TAXATION ‑- PROPERTY ‑- CITIES AND TOWNS ‑- LOCAL IMPROVEMENTS ‑- APPLICABILITY OF STATUTORY TAX LIMITATION TO CERTAIN MUNICIPAL PROPERTY TAXES

TAXATION ‑- PROPERTY ‑- CITIES AND TOWNS ‑- LOCAL IMPROVEMENTS ‑- APPLICABILITY OF STATUTORY TAX LIMITATION TO CERTAIN MUNICIPAL PROPERTY TAXES

(1) The 106% limitation on regular property taxes imposed by RCW 84.55.010 does not apply to the taxes levied by a city for the maintenance of its local improvement guaranty fund under RCW 35.54.060.

(2) Property taxes levied by a city for the maintenance of its local improvement guaranty fund, however, may not in any year exceed five percent of the outstanding obligations guaranteed by the fund and further may not, in any event, be in excess of a sum which is sufficient, with other sources of the fund, to pay warrants issued against the fund during the preceding fiscal year and establish a balance therein.

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                                                                  March 25, 1977

Honorable Curtis Ludwig
Prosecuting Attorney
Benton County
P.O. Box 510
Prosser, Washington 99350

                                                                                                                   Cite as:  AGO 1977 No. 9

Attention:  !ttMr. Dennis D. Yule

            Deputy Prosecuting Attorney

Dear Sir:

            By recent letter you have requested our opinion on two questions pertaining to property taxation which we paraphrase as follows:

            (1) Does the 106% limitation on regular property taxes imposed by RCW 84.55.010 apply to taxes levied by a city for maintenance of its local improvement guaranty fund under RCW 35.54.060?

            (2) If question (1) is answered in the negative what limitations, if any, does the language of RCW 35.54.060 itself place upon a city's authority to levy a property tax pursuant to that statute?

             [[Orig. Op. Page 2]]

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

                                                                     ANALYSIS

            Question (1):

            RCW 84.55.010 provides, with certain exceptions not here relevant, as follows:

            "Except as provided in RCW 84.55.020 through 84.55.050, the levy in 1973 and years subsequent thereto for a taxing district other than the state or a school district in any year shall be set so that the regular property taxes payable in the following year shall not exceed one hundred six percent of the amount of regular property taxes lawfully levied for such district in the highest of the three most recent years in which such taxes were levied for such district plus an additional dollar amount calculated by multiplying the increase in assessed value in that district resulting from new construction and improvements to property by the regular property tax levy rate of that district for the preceding year: . . ."  (Emphasis supplied.)

            Your first question is whether this tax limitation is applicable to taxes levied by a city for maintenance of its local improvement guaranty fund under RCW 35.54.060, the full text of which reads as follows:

            "For the purpose of maintaining the local improvement guaranty fund, every city and town shall, at the time of making its annual budget and tax levy, provide for the levy of a sum sufficient, with the other sources of the fund, to pay the warrants issued against the fund during the preceding fiscal year and to establish a balance therein:  Provided, That the levy in any one year shall not exceed five percent of the outstanding obligations guaranteed by the fund.

            "The taxes levied for the maintenance of the local improvement guaranty fund shall be additional to and, if need be, in excess of all statutory and charterlimitations applicable to tax levies in any city or town."  (Emphasis supplied.)

             [[Orig. Op. Page 3]]

            As indicated in AGLO 1975 No. 6 [[to Fred Van Sickle, Prosecuting Attorney of Douglas County, on January 20, 1975, an Informal Opinion AIR-75506]], copy enclosed, a key term in RCW 84.55.010, supra, is the term "regular property taxes" which is defined by RCW 84.04.140 to mean:

            ". . . a property tax levy by or for a taxing district which levy is subject to the aggregate limitation set forth in RCW 84.52.043 and RCW 84.52.050, as now or hereafter amended, or which is imposed by or for a port district or a public utility district."

            In responding to your question we are initially of the opinion that taxes levied by a city or town under RCW 35.54.060, supra, do fit this definition.  Clearly those taxes are subject to the aggregate limitation set forth in RCW 84.52.050 because that limitation is nothing more nor less than a statutory recital of the ". . . one percent of true and fair value. . ." constitutional limitation found in Article VII, § 2 of the state constitution.  Thus, even though RCW 35.54.060 says, in its second paragraph, that taxes levied thereunder may be in excess of all statutory limitations, those taxes are, nevertheless, subject to RCW 84.52.050 (the second tax limitation statute referred to in the above quoted definition of "regular property taxes") simply because that same limitation is also a constitutional one.

            Likewise, when we turn to RCW 84.52.043 (the other limitation statute incorporated in the definition of "regular property taxes") we come to the same conclusion but for a different reason.  That statute,inter alia, fixes a statutory limitation for nonvoted property tax levies by cities or towns of $3.375 per thousand dollars of assessed value.  Then, more significantly for our present purposes, the last paragraph of RCW 84.52.043 provides that:

            "It is the intent of the legislature that the provisions of this section shall supersede all conflicting provisions of law. . . ."

            RCW 84.52.043 was enacted as § 134, chapter 195, Laws of 1973, 1st Ex.Sess.  RCW 35.54.060, on the other hand, originated many years earlier and then was recodified, in 1965, by § 35.54.060, chapter 7, Laws of 1965.  And, while it is entirely true that construing a later statute as repealing or amending an earlier one by implication is not  [[Orig. Op. Page 4]] favored, Misterek v. Washington Mineral Products, 85 Wn.2d 166, 531 P.2d 805 (1975), it is also true, as indicated in 73 Am.Jur. 2d, Statutes, § 401 (1974), that:

            "If an act is so repugnant to, or so contradictory of, or so irreconcilably in conflict with, a prior act that the two acts cannot be harmonized in order to effect the purpose of their enactment, the later act operates without any repealing clause, as a repeal of the first to the extent of the irreconcilable inconsistency. . . ."

            In this case, there clearly is such a conflict between the last paragraph of RCW 35.54.060 and the provisions of RCW 84.52.043 ‑ with the final paragraph of the latter indicating an express legislative intent that the property tax levy limitations contained in that statute were to supersede all conflicting statutory provisions.  Thus, that tax limitation must be given force and effect even as against the earlier enacted language of RCW 35.54.060 which says that tax levies for a local improvement guaranty fund may be ". . . in excess of all statutory limitations."

            Having so concluded, however, we nevertheless still must answer your first question in the negative ‑ meaning that the 106% limitation on regular property taxes imposed by RCW 84.55.010, supra, does not apply to taxes levied by a city or town under RCW 35.54.060.  Our reason, simply stated, is that the 106% law (RCW 84.55.010) is itself only astatutory tax limitation ‑ as distinguished from theconstitutional, one percent, limitation contained in Article VII, § 2 (Amendment 55) of our state constitution, supra.  And even though, like RCW 84.52.043,supra, it represents a later enactment than RCW 35.54.060, the 106% law differs from RCW 84.52.043 in that it contains no language (comparable to the final paragraph of the latter) expressing clearly and unequivocally a legislative intent that the limitation therein prescribed was to supersede any other statutory provisions to the contrary.  Therefore, even though taxes levied under RCW 35.54.060 are subject to RCW 84.52.043 through the process of an implied amendment (for the reasons above explained) and, hence, are "regular property taxes" as defined in RCW 84.04.140, they are not similarly subject to the provisions of RCW 84.55.010 (the 106% law) because, as related to that latter statutory tax limitation, the second paragraph of RCW 35.54.060 (permitting levies in excess of all statutory limitations) must continue to be given full force and effect.

             [[Orig. Op. Page 5]]

            Question (2):

            Your second question assumes the foregoing negative answer to question (1) and asks:

            ". . . what limitations, if any, does the language of RCW 35.54.060 itself place upon a city's authority to levy a property tax thereunder?"

            Repeated for ease of reference, RCW 35.54.060 reads as follows:

            "For the purpose of maintaining the local improvement guaranty fund, every city and town shall, at the time of making its annual budget and tax levy, provide for the levy of a sum sufficient, with the other sources of the fund, to pay the warrants issued against the fund during the preceding fiscal year and to establish a balance therein:  Provided, That the levy in any one year shall not exceed five percent of the outstanding obligations guaranteed by the fund.

            "The taxes levied for the maintenance of the local improvement guaranty fund shall be additional to and, if need be, in excess of all statutory and charter limitations applicable to tax levies in any city or town."

            As we read this statute there are two limitations contained therein, one express and one implied.  The express limitation, obviously, is the one which is stated in the proviso at the end of the first paragraph; i.e., that the levy in any one year shall not exceed five percent of the outstanding obligations guaranteed by the [local improvement guaranty] fund.  The implied limitation which we see, in turn, is to be derived from the opening portion of the statute which specifies the purpose for which the levy in question is to be made.  The requirement of the statute is that a city ". . . provide for the levy of a sum sufficient, with the other sources of the fund, to pay the warrants issued against the fund during the preceding fiscal year and to establish a balance therein: . . ."  Therefore it follows, by negative implication,  [[Orig. Op. Page 6]] that a city may not provide for a levy under RCW 35.54.060 which is in excess of the amount needed to accomplish those things.

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

Very truly yours,

SLADE GORTON
Attorney General

PHILIP H. AUSTIN
Deputy Attorney General

RICHARD H. HOLMQUIST
Senior AssistantAttorney General