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AGO 1971 No. 27 - August 31, 1971
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Slade Gorton | 1969-1980 | Attorney General of Washington

TAXATION ‑- EXEMPTION ‑- INCOME QUALIFICATIONS FOR PROPERTY TAX EXEMPTION UNDER § 4, CHAPTER 288, LAWS OF 1971, 1st EX. SESS

(1) If a property owner claiming a tax exemption under § 4, chapter 288, Laws of 1971, 1st Ex. Sess., received income during the preceding calendar year "of the type and amount which would cause any reduction from social security benefits for a recipient of such benefits pursuant to 42 U.S.C. 403 as in effect on the effective date of this 1971 amendatory act," then such taxpayer is disqualified for the subject tax exemption even though his or her total amount of income was less than the $4,000 annual maximum provided for in subsection (5) for a one hundred percent excess levy exemption.   

(2) Action by the United States Congress at some time in the future to amend the provisions of 42 U.S.C. 403 so as to increase the amount of earnings which a social security recipient may have without reduction of his or her social security benefits will not, automatically, have the effect of increasing the amount of earnings which a Washington taxpayer may have and still qualify for the property tax exemption provided for by § 4, chapter 288, Laws of 1971, 1st Ex. Sess.

                                                              - - - - - - - - - - - - -

                                                                 August 31, 1971

Honorable George F. Hanigan
Prosecuting Attorney
Wahkiakum County
P. O. Box 56
Cathlamet, Washington 98612

                                                                                                                 Cite as:  AGO 1971 No. 27

Dear Sir:

            This is written in response to your recent letter requesting our opinion on two questions pertaining to the provisions of § 4, chapter 288, Laws of 1971, 1st Ex. Sess., dealing with property tax exemptions for certain senior citizens.  We paraphrase your questions as follows:

            (1) Is a person disqualified from receiving the tax exemption provided for by § 4, chapter 288, Laws of 1971, 1st Ex. Sess., by reason of his or her receipt of earnings "of the type and  [[Orig. Op. Page 2]] amount which would cause any deduction from social security benefits for a recipient of such benefits pursuant to 42 U.S.C. 403 as in effect on the effective date of this 1971 amendatory act," even though the total amount of income received by the claimant is less than the $4,000 maximum provided for in subsection (5) for a one hundred percent excess levy exemption?

            (2) If the United States Congress at some time in the future amends the provisions of 42 U.S.C. 403 so as to increase the amount of earnings which a social security recipient may have without reduction of his or her social security allowance, will such amendment have the effect of increasing the amount of earnings which a Washington taxpayer may have and still qualify for the property tax exemption provided for by § 4, chapter 288, Laws of 1971, 1st Ex. Sess.?

            We answer question (1) in the affirmative and question (2) in the negative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            By its enactment of § 4, chapter 288, Laws of 1971, 1st Ex. Sess., the Washington legislature, exercising the authority granted to it by Article VII, § 10 (Amendment 47) of our state constitution,1/ enacted the following tax exemption provisions:

             [[Orig. Op. Page 3]]

            "A person shall be exempt from any legal obligation to pay a percentage of the amount of real property taxes due and payable in 1972 and subsequent years as the result of the levy of additional taxes in excess of regular property tax levies as that term is defined in section 13 of this 1971 amendatory act, as now or hereafter amended, and/or from such regular property tax levies in accordance with the following conditions:

            "(1) The property taxes must have been imposed upon a residence which has been regularly occupied by the person claiming the exemption during the two calendar years preceding the year in which the exemption claim is filed; or the property taxes must have been imposed upon a residence which has been regularly occupied by the person claiming the exemption during the preceding calendar year and the person claiming the exemption must also have been a resident of the state of Washington for the last three calendar years preceding the year in which the claim is filed.

            "(2) The person claiming the exemption must have owned, at the time of filing, in fee, or by contract purchase, the residence on which the property taxes have been imposed.  For purposes of this subsection, a residence owned by a marital community shall be deemed to be owned by each spouse.

            "(3) The person claiming the exemption must have been sixty-two years of age or older on January 1st of the year in which the exemption claim is filed, or must have been, at the time of filing, retired from regular gainful employment by reason of physical disability.

            "(4) No person who, during the preceding calendar year, has regularly occupied the residence on which the taxes have been imposed shall have received during the preceding calendar year any earnings of the type and amount which would cause any deduction from social security benefits  [[Orig. Op. Page 4]] for a recipient of such benefits pursuant to 42 U.S.C. 403 as in effect on the effective date of this 1971 amendatory act:Provided, That the earnings of any occupant living with and paying rent to the person claiming exemption shall not be included in the determination of the eligibility of such person for the exemption.

            "(5) The amount that the person shall be exempt from an obligation to pay shall be calculated, on the basis of the combined income, from all sources whatsoever, of the person claiming the exemption and his or her spouse for the preceding calendar year, in accordance with the following schedule:

           !tp2,2"Income Range   Percentage of Excess Levies

            Exemption

            "$4,000 or less            One hundred percent

 

            "$4,001-$6,000          Fifty percent

            "Provided,however, That, solely with respect to a person within the income range of $4,000 or less, in the event that taxes due and payable include no excess levies or include excess levies less than $50.00, the amount of the exemption shall be $50.00 and the difference shall be attributed pro rata to regular property tax levies of each of the taxing districts.

            "This section shall be effective as to claims made in 1971 and subsequent years with respect to taxes due and payable in 1972 and subsequent years."

            Question (1):

            Your first question involves the relationship between subsections (4) and (5) of this new statute.  However, contrary to the suggestion contained in your letter, only the first of these two subsections contains a qualification which must  [[Orig. Op. Page 5]] be met by an applicant for the subject tax exemption.  On the other hand, subsection (5) merely established the formula for computation of the amount of a tax exemption in the case of a person who has met all of the qualifications set forth in subsections (1) through (4), inclusive.

            We find no ambiguity in the statute in regard to the foregoing; instead, we regard the statute as clearly and unambiguously, on its face, requiring an applicant for the tax exemption to meet each of the qualifying conditions set forth in subsections (1) through (4) ‑ including, irrespective of total income, the qualification of not havingany earnings which would cause a deduction from the applicant's social security benefits pursuant to 42 U.S.C. 403.

            Then, only if all of these conditions are met, does subsection (5) come into play.  And once this point is reached, the applicable income standards set forth in this subsection go not to the eligibility of the applicant for an exemption but rather to the computation of the amount of the exemption which is to be granted to an eligible applicant.  Accordingly, we answer your first question, as paraphrased, in the affirmative.

            Question (2):

            In speaking of 42 U.S.C. 403, the legislature expressly referred to that federal enactment as it stood ". . . on the effective date of this 1971 amendatory act: . . ."  See, § 4 (4), chapter 288, Laws of 1971, 1st Ex. Sess., supra.  Because this 1971 enactment contained an emergency clause, it became effective on May 21, 1971, when it was signed into law by the governor.  We are enclosing herewith a Xerox copy of this federal enactment as of the critical date for your immediate reference.  However, by its use of the language above quoted, the legislature has clearly manifested its intent that any subsequent Congressional amendments to this act are to have no bearing upon the earnings test to be applied in determining eligibility for a property tax exemption under the new state statute, unless, of course, that statute should also be amended to coincide with such altered earnings test for social security  [[Orig. Op. Page 6]] benefits.2/

             We trust that the foregoing will be of assistance to you.

Very truly yours,

SLADE GORTON
Attorney General


PHILIP H. AUSTIN
Deputy Attorney General

                                                         ***   FOOTNOTES   ***

1/This constitutional provision reads as follows:

            "Notwithstanding the provisions of Article 7, section 1 (Amendment 14) and Article 7, section 2 (Amendment 17), the following tax exemption shall be allowed as to real property:

            "The legislature shall have the power, by appropriate legislation, to grant to retired property owners relief from the property tax on the real property occupied as a residence by those owners.  The legislature may place such restrictions and conditions upon the granting of such relief as it shall deem proper.  Such restrictions and conditions may include, but are not limited to, the limiting of the relief to those property owners below a specific level of income and those fulfilling certain minimum residential requirements."

2/See, State ex rel. Kirschner v. Urquhart, 50 Wn.2d 131, 310 P.2d 261 (1957), for a probable constitutional basis for this legislative approach.  Arguably, at least, any other procedure would have resulted in an unconstitutional delegation ofstate legislative authority to the federal Congress.

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