ORANGE COUNTY BANKRUPTCY : County Seeks Approval for Partial Tax Refunds : Payout: Plan would give property owners 88%. About 11,000 rebates totaling $17.8 million are affected.

Attorneys for the county filed a motion in U.S. Bankruptcy Court on Friday, seeking permission to pay out 88% of each tax refund due to property owners who were over-assessed.

The motion would affect 11,000 long-awaited tax refunds valued at $17.8 million. The refunds have been held up since the county filed for bankruptcy Dec. 6.

In its legal filing, to be heard April 28 by U.S. Bankruptcy Judge John E. Ryan, the county seeks to promptly repay most of that, and send taxpayers to wait in line with other creditors for the remaining 12% of their refunds.

“This has really been a tremendous effort to get these things paid as quickly as possible,” said John Amsden, an attorney for the county who said the motion was the result of tedious and technical analysis of county tax records.

But the news was greeted coolly by those who have been clamoring to collect all the money that is owed them.

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Frustrated property owners have placed thousands of calls to the county in recent months to demand their refunds, including interest, or at least find out when they might see their money. Cowan said his office alone has been getting 2,500 calls a day, about half of those on the refund issue.

“I guess I’m not too forgiving,” said Maureen Borne Koch, an Anaheim resident who bought a home last June and has been waiting on a $500 refund since October. “First of all, the county went bankrupt because of bad leadership. Secondly, they think the people should keep paying for the mistakes of others.

“I don’t think (withholding) 12% or any amount is correct, considering we overpaid in the first place,” she said. “It doesn’t warm my heart at all.”

Many of the county’s top corporate taxpayers are also awaiting refunds, some in the millions of dollars. While the prospect of seeing some money was greeted with guarded optimism, an attorney for some of the county’s largest taxpayers called the county’s offer inadequate.

“We’re pleased that some of it might be coming,” said Arlen Woffinden, a Newport-Beach based tax attorney. “But the county ought not to be keeping any of it, because it was over-assessed and over-collected in the first place, and we’ve proven that it’s an illegal tax.

“To seek any authority to pay less than the full amount of a tax that was illegally collected in the first place is simply unfair.”

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Marriott International, which Woffinden described as one of the top 10 taxpayers in the county, is among his clients owed millions in property-tax refunds.

The county retains only part of collected property tax revenue, with the rest going to cities, redevelopment agencies and other districts. Some of the tax revenue earmarked for those other entities, however, is regularly withheld by the county to pay refunds. Amsden said the county’s motion offers to repay that money to taxpayers.

The plan offered by the county would affect taxpayers who have already prevailed in challenging their property tax assessments. Tens of thousands of other assessments--many by big corporate property owners--are being reviewed by the county Assessment Appeals Board.

Cowan said that those property owners who prevail in their assessment appeals will then become subject to the county’s plan, if Ryan approves the motion.

The Assessment Appeals Board had amassed a backlog of more than 62,000 assessment review requests by Feb. 1. Ryan directed the county last month to resume the assessment review process.

Cowan said that while his office has been swamped with calls, most taxpayers have been understanding. If approved, the plan will at least allow the county to start refunding the money.

“At least we’re able to tell people that they will be getting the majority of their money back,” Cowan said. “Even though it’s not everything, at least we are able to return as much as is legally possible. Let’s say it’s progress.”