TAXATION ‑- COUNTIES ‑- CITIES AND TOWNS ‑- PLATTING AND SUBDIVISIONS ‑- FEES
Where counties, cities, and towns charge fees for short plats in amounts designed to cover the actual cost of administering a regulatory program, such fees are authorized by statute and are not an improper form of taxation. However, where fees for short platting are designed to raise revenue over and above the actual costs of administering the regulatory program, the fees are a form of taxation in excess of the local government's statutory taxing power.
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March 22, 1988
Honorable Emilio Cantu
State Senator, 41st District
4416 ‑ 138th Avenue S.E.
Bellevue, WA 98006
Cite as: AGO 1988 No. 7
Dear Senator Cantu:
By letter previously acknowledged, you have requested the opinion of this office on a question we have paraphrased as follows:
Do fees for short plats constitute a form of unconstitutional or improper taxation?
We answer your question in the manner indicated in the analysis below.
A short plat is a map or representation of a short subdivision. RCW 58.17.020(8). A short subdivision is defined as the "division or redivision of land into four or fewer lots, tracts, parcels, sites or divisions for the purpose of sale, lease, or transfer of ownership . . . ." RCW 58.17.020(6). The legislative body of a city, town, or county is authorized to adopt regulations for the approval or revision of short plats and short subdivisions, including requirements for surveys, monumentations, and filings of a short plat for record in the office of the county auditor. RCW 58.17.060.
[[Orig. Op. Page 2]]
Your question arises in the context of the review and approval process of short plats under regulations authorized by RCW 58.17.060. Most cities, counties, and towns assess fees for short plat applications according to a fee schedule set out in regulation. You have asked whether these fees, which may be very high, constitute invalid taxation. Our answer to your inquiry must include the analysis of constitutional and statutory provisions as well as the case law interpreting those provisions.
The Washington State Constitution delegates a broad power to each county, city, town, or township to "make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws." Const. art. 11, § 11; Hillis Homes, Inc. v. Snohomish Cy., 97 Wn.2d 804, 650 P.2d 193 (1982). These broad powers, however, do not include the power to tax. The constitution provides that "[n]o tax shall be levied except in pursuance of law . . . ." Const. art. 7, § 5. Therefore, local authorities must have express authority, either under the constitution or an act of the Legislature, to levy taxes. San Telmo Assocs. v. Seattle, 108 Wn.2d 20, 23, 735 P.2d 673 (1987);Ivy Club Investors Ltd. Partnership v. Kennewick, 40 Wn. App. 524, 528, 699 P.2d 782,review denied, 104 Wn.2d 1006 (1985). If the short plat fees are correctly characterized as taxes, the local authorities must be expressly authorized to assess them.
Our inquiry must then turn to consider whether the fees should be characterized as taxes. InSpokane v. Spokane Police Guild, 87 Wn.2d 457, 553 P.2d 1316 (1976), the Washington State Supreme Court defined "taxes" as follows:
Taxes are defined to be "burdens or charges imposed by legislative authority on persons or property, to raise money for public purposes, or, more briefly, 'an imposition for the supply of the public treasury.'"
Id. at 461. If the primary purpose of the legislation is regulation rather than raising revenue, the legislation cannot be classified as a tax even if a burden or charge is imposed. If the charges are primarily tools of regulation, they are not taxes.Id.
Under this "primary purpose" test the courts have analyzed the imposition of burdens and charges in a number of cases. InSpokane v. Spokane Police Guild, supra, the State Supreme court held that the additional expense upon Spokane, in the form of the statutorily imposed increased wages for uniformed personnel, was not a tax because the primary purpose was clearly regulatory. InMiller v. Port Angeles, 38 Wn. App. 904, 691 P.2d 229 (1984),review denied, 103 Wn.2d 1024 (1985), the Court of Appeals held [[Orig. Op. Page 3]] that "[w]idening streets and installing controls for the safety of pedestrians and vehicle traffic are regulatory measures" within the proper exercise of local authority and the costs of those measures could be borne by those who created the need. Id. at 910. InTeter v. Clark Cy., 104 Wn.2d 227, 704 P.2d 1171 (1985), the charge to pay for necessary regulatory action by a storm and surface water management department was held to have the primary purpose of regulation and was, therefore, not a tax. Finally, because the reimbursement to the county of the expense of registering voters was meant to pay actual costs of specific regulatory actions, the charge was not a tax. Lynnwood v. Snohomish Cy., 48 Wn. App. 210, 738 P.2d 699 (1987).
Under this test the State Supreme Court has found the burden or charge to be a tax when the primary purpose of fees on new subdivisions for parks, schools, roads, and fire protection was raising revenues rather than regulation of the subdivision. Hillis Homes v. Snohomish Cy., supra. Similarly, a park fee imposed on a builder had the primary purpose of raising revenue for park improvements rather than of regulating building conversion or development and, therefore, was found to be a tax. Prisk v. Poulsbo, 46 Wn. App. 793, 732 P.2d 1013, review denied, 108 Wn.2d 1020 (1987); Ivy Club Investors Ltd. Partnership v. Kennewick,supra. Finally, the Supreme Court recently has held that requiring a developer to fund housing for low income residents displaced by the development is a tax because rather than regulating the demolition of low income housing units, the ordinance merely raises revenues to fund the public responsibility of providing such housing. San Telmo Assocs. v. Seattle, supra.
In light of this extensive case law, fees for short plats are regulatory and, therefore, not taxes if the primary purpose is to reimburse the actual costs of a regulatory program under chapter 58.17 RCW. This is so even if a grate burden or charge is imposed. Lynnwood v. Snohomish Cy., supra. Conversely, if the purpose of the fees for short plats is to raise revenues beyond the actual costs of the regulatory program, they are taxes. San Telmo Assocs. v. Seattle,supra.
From the foregoing analysis, it is obvious that the answer to your question depends on the purpose and the operation of the particular fee scheme chosen by a county, city, or town. With your letter, you supplied materials about one county. Our perusal of those materials suggests that the short plat fees in that county are intended to reimburse the local government for the actual costs of processing the short plat application. If so, the fees are primarily regulatory and not a tax. There may be other counties, cities, or towns whose fees raise revenues in excess of their actual costs, and therefore these fees might be taxes as defined above.
[[Orig. Op. Page 4]]
RCW 82.02.020, as amended in 1982, supports the above analysis. See Laws of 1982, 1st Ex. Sess., ch. 49, § 5, p. 1375. While it provides that no local authority shall impose any tax, fee, or charge, either direct or indirect, on most forms of development, it also provides that
[n]othing in this section prohibits cities, towns, counties, or other municipal corporations from collecting reasonable fees from an applicant for a permit or other governmental approval to cover the cost to the city, town, county, or other municipal corporation of processing applications, inspecting and reviewing plans, or preparing detailed statements required by chapter 43.21C RCW.(Emphasis added.)
The short plat fees fall under this quoted provision to the extent that they cover the costs of the regulatory program implementation. The Legislature distinguished between fees and taxes in RCW 82.02.020 and expressly preserved the authority of the local governments to assess fees.
In sum, where short plat fees have the primary purpose of reimbursement of the actual costs of a regulatory program under chapter 58.17 RCW, they are authorized by statute and are not unconstitutional or improper taxation. However, where the fees are designed to raise revenue in excess of the actual costs of the regulatory program, they would exceed the local government's statutory authority and would be an improper form of taxation.
We trust the foregoing will be of assistance to you.
KENNETH O. EIKENBERRY
TERESE NEU RICHMOND
Assistant Attorney General