Summer ruling on property tax cap appears likely.

For 14 years, landowners in California have not had to worry about their property tax bills climbing more than 2 percent each year. But that may change if Stephanie Nordlinger has her way.

The Baldwin Hills homeowner has convinced the U.S. Supreme Court to review the constitutionality of California's property-tax cap, created by the 1978 Proposition 13 constitutional amendment.

Arguments in the Stephanie Nordlinger v. L.A. County Assessor Kenneth Hahn case were made before the high court in February. A ruling is expected this summer.

According to real estate lawyers, the future of Proposition 13 is at stake. That means homeowners, business owners, real estate investors and millions of other California landowners might lose Proposition 13's power to minimize their tax liability.

Proposition 13 lowered the tax rate to 1 percent of assessed value. That value, under Proposition 13, was also rolled back to 1975 market rates and only allowed to rise a maximum of 2 percent (an inflation adjustment) each year.

The assessor's office has estimated the ramifications if Nordlinger wins, and the high court strikes down this assessment schedule and orders the Assessor's Office to hike all assessments up to current market value: In L.A. County, roughly $300 billion would be added to the local tax roll. And if the 1 percent rate were preserved, which attorney's say is a possibility, an ocean of new taxes would result.

According to the assessor, if they strike down the assessment schedule but keep the 1 percent rate, on average:

* Home assessments would rise from $132,000 to $239,000 (a $1,070 annual tax hike);

* Apartment complex assessments would climb from $257,000 to $417,000 (a $1,600 annual tax hike) per parcel; and

* Commercial and industrial parcel assessments would rise from $617,680 to $1 million (a $3,823 annual tax hike).

While the issues concerning business property are significant most of the public attention has gone to residential landowners, because homeowner Nordlinger focused the challenge on her own experience.

According to court papers, in November 1988 Nordlinger bought a 1,100-square-foot house in the middle-class Baldwin Hills section of L.A. County for $170,000. Her first tax bill amounted to $1,700 a year, or 1 percent of the sales price.

Her neighbors who had very similar homes, however, were paying about $375 annually, because their homes carried 1975 base values, the base year for Proposition 13. Their homes carried old assessments because, under Proposition 13, values are reassessed only in certain cases, and changes in ownership is one of them.

Nordlinger sued the assessor, claiming Proposition 13 violated the Equal Protection Clause of the 14th Amendment to the U.S. Constitution. In their brief to the high court, Nordlinger's attorneys claimed that newly purchased property carries "a disproportionate share" of the property tax burden, up to 17 times more than comparable property held by longtime owners.

The tax system that creates this dynamic has been labeled a "welcome stranger" scheme by assessors and real estate lawyers, because over time it shifts the overwhelming majority of increases in future property tax revenues onto new buyers ("strangers") who are "welcomed" to come and pay higher taxes into government treasuries.

Nordlinger, not surprisingly, cites homes in the vastly appreciated Ocean Park district of Santa Monica to press her case: A 1989 homebuyer there will pay roughly $51,000 over the ensuing decade, compared to $3,000 for a owner of a similar house holding its 1975 assessment.

Other areas appreciated less since 1975, but they still sock a burden to the "stranger" many times higher. Assessor Kenneth Hahn's staff studied a cluster of 895 parcels in the Marina del Rey-Venice area and found a 12:1 ratio, but only a 4:1 ratio among 8,330 parcels in an L.A. district east of Inglewood.

Hahn's attorneys have fought Nordlinger's challenge and have prevailed in the lower courts.

Hahn's defense is that taxation is a sovereign power, reserved to the states by the 10th Amendment to the U.S. Constitution. And consistent with the balance of government power between federal and local interests, the U.S. Supreme Court has long declined to mandate a single method of taxation.

Hahn claims in his defense filings that one purpose underlying Proposition 13 is "to protect property owners from being taxed on unrealized appreciation in the value of their property -- i.e., to avoid the situation in which homeowners may be taxed out of their homes, or to prevent, what is equally disturbing, residents on fixed incomes from diverting so much of their resources to housing that they are unable to purchase adequate food, clothing and health care to ensure their continued welfare."

Key to the Nordlinger case are other reassessment court decisions. In 1978, the California Supreme Court endorsed Proposition 13's acquisition-value scheme in Amador Valley Joint Union High School District v. State Board of Equalization. That was the first major test of Proposition 13 and once and for all affirmed its soul, according to some tax-law experts.

On the other hand, the U.S. Supreme Court cast doubt over Amador when it struck down a "welcome stranger" scheme in West Virginia. Nordlinger relies heavily on this 1989 decision, Allegheny Pittsburgh Coal Co. v. County Commission of Webster County, West Virginia. The invalidated scheme, however, was not part of West Virginia's constitution, but one adopted informally by an elected assessor in West Virginia. The high court, in Allegheny, crafted a footnote that pointedly reminded that it was not passing judgment on California's Proposition 13.