SUPES UNLAWFULLY AMENDED MEASURE S
Attorney says county needs to repay 'illegally collected taxes'
The California 1st District Court of Appeals found the Humboldt County Board of Supervisors overstepped its authority after amending Measure S, the county’s commercial cannabis cultivation tax, without voter approval. The ruling upholds last year’s trial court decision by Humboldt County Superior Court Judge Kelly Neel.
Following the passage of Measure S in 2016, the board of supervisors amended the measure in 2017 and 2018 to shift the tax burden from the cultivator to the property owner, expand the taxable area from the actual cultivation to the permitted area at large and tax permitted growers whether they cultivated cannabis or not.
The original measure approved by voters required legal
commercial cannabis cultivators to pay a tax of $1 per square foot of outdoor cultivation area, $2 per square foot of mixed-light cultivation area or $3 per square foot of indoor cultivation area. Significant changes to the measure require voter approval.
“We agree with the trial court that ‘the voters approved a measure whereby an individual involved in cultivation is the per
son responsible for the tax. While it may often be true that the property owner and cultivator are the same individual, such is not always the case.’ We construe the county’s mootness argument as an abandonment of its argument that the Board was authorized to broaden the tax by applying it to all property owners,” Thursday’s ruling stated.
Alderpoint-based attorney Eugene Denson and attorney Fred Fletcher challenged the county’s tax in early 2018 on behalf of cannabis farmer Karen Silva, the Humboldt-Mendocino Marijuana Advocacy Project (HuMMAP) and several others. The Court of Appeal plaintiffs were represented by Denson and Richard Jay Moller of Garberville.
“We felt the changes made by the county were illegal … ultimately Judge Neel ruled in our favor,” Denson told the Times-Standard on Monday afternoon. “The county appealed to the First District Court of Appeals in San Francisco challenging Judge Neel’s decision. A couple of days ago, the (three-judge panel) affirmed Judge Neel’s decision on all points.”
At this point, Denson said the county can ask for a rehearing in the Court of Appeals or ask the California Supreme Court to take the case.
“Moller and I think the California Supreme Court is quite unlikely to take the case because there is no new law, it is simply an application to existing law to situate the facts,” Denson said. “…If the county does not respond to the ruling in 40 days, the decision is final and cannot be challenged.”
Responding to the TimesStandard’s request for comment on the Court of Appeals decision, Humboldt County spokesperson Manny Machado said, “The County is disappointed with the Court’s ruling and considering its options with respect to the litigation. However, it does wish to maintain a collaborative relationship with cannabis farmers in the County and will continue dialogue with cultivators and their representatives regardless of the outcome of this suit.”
Although it is not specified in the court’s decision, the Times-Standard asked Machado if the county will be forced to reimburse property owners who overpaid their taxes due to the amendments made by supervisors.
“In order to protect the integrity of the case, I can only restate my original message,” Machado said.
“In my opinion, the county will need to repay all of the illegally collected taxes, probably with interest,” Denson said. “…The county would have a better figure, but I wouldn’t be surprised if the amount is over a million dollars.”
Robert Sutherland, HuMMAP founding member, told the Times-Standard he is concerned the unlawful amendments to Measure S disproportionately affected small cannabis farmers.
“They’re not big growers and making a whole lot of money,” Sutherland told the Times-Standard on Monday. “Besides which, HuMMAP has always stood for integrity and this is a step in that direction. We want to see a healthy industry evolve here in the county and when the government can’t see that and wants instead to play the game of just trying to be parasites, it’s not going to result in a healthy industry.”
“The goose that laid the golden egg was put there by the small growers and backto-the-land hippies who had a focus, not on money, but on producing quality products,” Sutherland added.