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March 15, 1971
Municipal Research Council
4719 Brooklyn Avenue N. E.
Seattle, Washington 98105
Cite as: AGLO 1971 No. 40 (not official)
Attention: Dr. Ernest H. Campbell, Agent
This is written in response to your recent letter, previously acknowledged, requesting an opinion of this office on several questions regarding the proper distribution to be made of uncollected Grays Harbor County road district property tax revenues in view of the incorporation, on November 23, 1970, of Ocean Shores as a noncharter code city. Under the factual circumstances giving rise to your request, we believe that your inquiry may be properly subdivided and paraphrased as follows:
Based upon the incorporation of Ocean Shores as a noncharter code city effective November 23, 1970, what distribution is to be made of uncollected Grays Harbor County road district property tax revenues previously levied on property within the territory of such city:
(a) levied prior to 1969 for collection prior to 1970; (b) levied in 1969 for collection in 1970; (c) levied in 1970 for collection in 1971?
The answers to your questions are contained in the following analysis:
The first point which we would make in responding to your request is that the governing statute with respect to this matter is RCW 35A.03.150‑-and not one of the other statutes which you have cited in your letter, such as RCW 35.02.140 or RCW 35.13.270.1/ These latter statutes, which were construed in various previous opinions of this office which you have also cited, govern the distribution of uncollected county road district tax revenues in situations involving municipal incorporations or annexations occurring outside [[Orig. Op. Page 2]] of the scope of the new optional municipal code, of which RCW 35A.03.150 is a part. Moreover, these pre‑existing statutes are somewhat differently worded than is RCW 35A.03.150, the text of which reads as follows:
"Whenever any territory which is part of a road district of the county becomes a part of an incorporated noncharter code city, and any road district taxes have been levied on any property within such territory, the county treasurer, upon collection of such taxes, shall pay to the code city treasurer a pro rata share of such taxes in the proportion which the remaining period of the assessment year after the effective date of the incorporation bears to the total assessment year. Such moneys shall be placed by the city treasurer in the city street fund: PROVIDED, That this section shall not apply to any special assessments due in behalf of such property."
To compute the share of uncollected road district taxes a noncharter code city is to receive under RCW 35A.03.150 as applied to the factual situation set out above, it is necessary to know the date of incorporation, which in this instance is November 23, 1970,2/ and the meaning of the term "assessment year."
By way of background, RCW 36.82.040 requires a property tax levy to be made for road district purposes at the time a levy is made for general county purposes. The imposition and collection of these taxes is governed by the provisions of Title 84 RCW.
The first major step in the property tax process is contained in RCW 84.40.020 which requires all property, real or personal, subject to taxation to be listed and assessed each year with reference to its value as of the first day of January of that year. Under RCW 84.40.040 the county assessor must complete his listing and valuation of all property by the following May 31st.3/
Thereafter, in October of the same year4/ the levy is made which actually imposes the tax "and fixes the amount, purpose, and subject of the exation." Carkonen v. Williams, 76 Wn.2d 617, 627, 458 P.2d 280 (1969).5/
[[Orig. Op. Page 3]]
The taxes so assessed and levied become payable under the provisions of RCW 84.56.010 and 84.56.020 on and after the 15th day of February next succeeding the date of levy.
The only statutory definition of "assessment year" is found in RCW 84.04.0406/ which only partially answers the questions presented. We must further determine whether the term as used in RCW 35A.03.150 means the year in which the property is listed and valued by the county assessor, or the year in which the taxes become due and payable.
As pointed out above, the listing and valuation of property is the first step in the taxing process. RCW 84.40.020 reads in material part:
"All real property in this state subject to taxation shall be listed and assessed every year, with reference to its value on the first day of January of the year in which it is assessed. All personal property in this state subject to taxation shall be listed and assessed every year, with reference to its value and ownership on the first day of January of the year in which it is assessed: . . ." (Underscoring ours.)
"Assessment," in relation to ad valorem taxation, has been defined as the listing and valuation of property liable to taxation according to law. State ex rel. State Tax Comm. v. Redd, 166 Wash. 132, 139, 6 P.2d 619 (1932); Northwestern Imp. Co. v. Henneford, 184 Wash. 502, 508, 51 P.2d 1083 (1935). In 3 Cooley on Taxation, § 1044 (4th Ed.), it is said:
"The word 'assessment,' as used in the decisions and statutes, has various meanings. Properly speaking it does not include the levy of taxes although sometimes the words 'assess,' 'assessed,' or 'assessment' are used in a statute as including both the levy and the assessment. An assessment, strictly speaking, is an official estimate of the sums which are to constitute the basis of an apportionment of a tax between the individual subjects of taxation within the district. It does not, therefore, of itself lay the charge upon either person or property, but it is a step preliminary thereto, and which is essential to the apportionment. As the word is more commonly employed, an assessment consists in the two processes [[Orig. Op. Page 4]] of listing the persons, property, etc., to be taxed, and of estimating the sums which are to be the guide in an apportionment of the tax between them. When this listing and estimate are completed in such form as the law may have prescribed, nothing remains to be done, in order to determine the individual liability, but the mere arithmetical process of dividing the sum to be raised among the several subjects of taxation, in proportion to the amounts which they are respectively assessed. . . ."
It is not necessary for us to determine whether the term "assessment," as used in RCW 35A.03.150, includes the levy, because under the statutory scheme of property taxation, the listing of property, its valuation, and the levy all take place within one and the same calendar year, with the resulting tax becoming due and payable the following year.
In view of the foregoing, we conclude that "assessment year" as used in the tax statutes and RCW 35A.03.150 does not mean the year in which the taxes become due and payable but means the calendar year7/ in which the property is listed and valued by the county assessor, or, as stated in RCW 84.40.020, supra, ". . . the year in which it is assessed."
Some mention should be made of RCW 84.09.010, which, on its face, may cause some confusion. It reads:
"All annual taxes and assessments of real and personal property shall hereafter be known and designated as taxes and assessments of the year in which such taxes and assessments, or the initial installment thereof, shall become due and payable."
In relation to taxation in general, the word "assessment" is synonymous with "tax" or merely another way of denoting that final enforced contribution from persons or property imposed by the state for the support of government. In this broad, general sense, a tax is an assessment and vice versa.
Further, the word "assessment" is also used to describe a particular type of tax, namely, a "special assessment," which is defined in In re Local Improvement District No. 1, 195 Wash. 439, 81 P.2d 289 (1938), as:
"'Special assessments are special charges imposed by law on land to defray the expenses in whole or in part of a local [[Orig. Op. Page 5]] improvement made by a municipality, on the theory that the owner of the property has received special benefits from the improvement in excess of the benefits accruing to the general public.' 44 C.J. 481 § 2806."
It is immaterial for our purposes to determine whether "assessments" as used in RCW 84.09.010 is intended to be merely synonymous with "taxes," or is intended to refer to special assessments. It clearly has reference to a previously fixed amount which is or will become "due and payable" and is not intended to encompass the valuation process necessary to arrive at that ultimate amount. The statute simply designates taxes and assessments, meaning final exactions, as those of the year in which they become due and payable. This becomes clearer when we look at the statute as it was originally enacted in section 2, chapter 136, Laws of 1939, to-wit:
"All annual taxes and assessments of real and personal property shall hereafter be known and designated as taxes and assessments of the year in which such taxes and assessments, or the initial installment thereof, shall become due and payable; except, that any such taxes and assessments that have become due and payable, or of which any installment has become due and payable, at the time this act becomes effective, shall continue to be known and designated the same as heretofore."
Based upon the fact that Ocean Shores was incorporated as a noncharter code city on November 23, 1970, and that the "assessment year" as used in RCW 35A.03.150 is the calendar year (here, 1970) in which the property is listed and valued by the county assessor, we specifically answer each subdivision of your question as follows:
(a) No part of the road district taxes, levied prior to 1969 for collection prior to 1970 can be distributed to the city.
(b) No part of the road district taxes levied in 1969 for collection in 1970 can be distributed to the city.
(c) 38/365ths of the road district taxes levied in 1970 for collection in 1971, being the ". . . pro rata share of such taxes in the proportion which the remaining period of the assessment year after the effective date of the incorporation bears to the total assessment . . ." shall be distributed to the city.8/
[[Orig. Op. Page 6]]
In thus concluding, we most certainly recognize that the effect of RCW 35A.03.150 upon a newly incorporated noncharter code city is to delay any receipt by that city of a full year's amount of former road district tax revenues for more than a year following its date of incorporation‑-in that during the first "tax collection" year of its existence9/ it will only receive some fractional share of a full year's amount of such taxes. However, we should hasten to point out that but for this statute, a city such as Ocean Shores which was incorporated after March 1 of the "assessment year" would receive no former road district tax revenues at all until the second "collection" year following the calendar year of incorporation. See RCW 84.09.030, together with our opinion of November 6, 1970, to the Grays Harbor County Prosecuting Attorney, copy enclosed. Moreover, of course, this whole subject of the property tax treatment to be applied to newly incorporated cities and towns is essentially a policy matter which can be altered by the legislature should it be deemed necessary or appropriate to do so.
We trust the foregoing will be of assistance to you.
Very truly yours,
FOR THE ATTORNEY GENERAL
Henry W. Wager
Assistant Attorney General
*** FOOTNOTES ***
1/Accord, letter dated November 6, 1970, to the Grays Harbor County Prosecuting Attorney, of which you are aware.
2/See RCW 35A.03.130 for the formula for ascertaining the effective date of incorporation of a noncharter code city.
3/Note exception in RCW 84.40.060.
5/Under RCW 84.60.020 real property taxes become a lien in the year the levy is made and taxes on personal property constitute a lien in the year the property is listed and valued.
6/"The assessment year contemplated in this title and the fiscal year contemplated in this title shall commence on January 1st and end on December 31st in each year."
7/See note 6.
8/The statutory phrase "after the effective date of the incorporation" denotes to us that the first day to be counted in ascertaining the fraction of the assessment year remaining is the day after the date of incorporation; i.e., here, November 24, 1970.
9/I.e., the year following the "assessment year."