AGO 1968 No. 10 - Feb 29 1968
COUNTIES - FOREST - TAXATION - DISTRICTS - DISTRIBUTION AND PRORATION OF STATE FOREST LAND REVENUES.
Where state forest land revenues are distributed to a county by the department of natural resources under the provisions of RCW 76.12.030 and 76.12.120, they are to be prorated and paid to the various taxing unit funds which would receive real property taxes from the state forest land producing the revenues if those lands were in private ownership, in the same manner that general taxes, including excess tax levies, are paid and distributed by the county, as tax collector, during the year of payment.
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February 29, 1968
Honorable Edward B. Shamek
Klickitat County Court House
Goldendale, Washington 98620
Cite as: AGO 1968 No. 10
By letter previously acknowledged you have requested our opinion on a question pertaining to the formula for prorating state forest land revenues which are distributed to a county by the department of natural resources under the provisions of RCW 76.12.030 and 76.12.120. Your question may be paraphrased as follows:
Are excess tax levies, as well as tax levies within the 40-mill limit of Washington constitution, Amendment 17, to be included as a basis for proration by the county under RCW 76.12.030 and 76.12.120?
We answer this question in the affirmative, noting that each statute directs that state forest revenues received by the county be distributed by it to the various funds "in the same manner as general taxes are paid and distributed." In our opinion excess tax levies are "general taxes" within the meaning of RCW 76.12.030 and 76.12.120.
We recognize at the outset that your question is prompted by [[Orig. Op. Page 2]] the existence of the "40-mill" limit in our state property tax laws. In 1944, the people of the state approved Amendment 17 to the Washington constitution.1/ By virtue of this amendment the total of all property taxes which may be levied against taxable property by the state and all other taxing districts, except port and public utility districts, may not exceed forty mills based upon an assessed valuation of fifty percent of the true and fair value of the property. The forty mills are allocated between the state and other taxing districts by statute. See, RCW 84.52.050.2/
Amendment 17, however, contains provisions for levies in excess of the forty mill limit if sixty percent of the electors in a taxing district authorize the levy at an election where the total number of persons voting is not less than forty percent of the total vote cast at the last preceding general election. This feature of the amendment has given rise to common use of the term "special levy" to designate that property tax assessment that is imposed as the result of [[Orig. Op. Page 3]] such a "special" election. In turn the taxes raised by the "special levy" are sometimes referred to as "special taxes" to distinguish them from those raised by levies within the forty mill limit. These latter taxes are sometimes referred to as "general taxes."
With this explanation of the "forty mill limit" in mind, let us now consider the two statutes in question, relating to the distribution of state forest land revenues. The first is RCW 76.12.030, which provides as follows:
"If any land acquired by a county through foreclosure of tax liens, or otherwise, comes within the classification of land described in RCW 76.12.020 and can be used as state forest land and if the board deems such land necessary for the purposes of this chapter, the county shall, upon demand by the board, deed such land to the board and the land shall become a part of the state forest lands, and [[Orig. Op. Page 4]] upon such deed being made the commissioner of public lands shall be notified and enter and note it upon the records of his office.
"Such land shall be held in trust and administered and protected by the board as other state forest lands. Any moneys derived from the lease of such land or from the sale of forest products, oils, gases, coal, minerals, or fossils therefrom, shall be distributed as follows:
"(1) The expense incurred by the state for administration, reforestation, and protection, not to exceed ten percent, shall be returned to the forest development fund of the state treasury.
"(2) Ten percent thereof shall be placed in the forest development fund of the state treasury.
"(3) Any balance remaining shall be paid to the county in which the land is located to be paid, distributed, and prorated, except as hereinafter provided,to the various funds in the same manner as general taxes are paid and distributed during the year of payment: Provided, That any such balance remaining paid to a county of the eighth or ninth class shall first be applied to the reduction of any indebtedness existing in the current expense fund of such county during the year of payment." (Emphasis supplied.)
[[Orig. Op. Page 5]]
The second statute is RCW 76.12.120, which reads:
"All land, acquired or designated by the board as state forest land, shall be forever reserved from sale, but the timber and other products thereon may be sold or the land may be leased in the same manner and for the same purposes as is authorized for state granted land if the board finds such sale or lease to be in the best interests of the state and approves the terms and conditions thereof. The board may prescribe the manner in which timber and other products, valued at not more than two thousand dollars in any one sale, shall be sold. However, if the timber or other products to be sold are reasonably valued at more than twenty-five dollars, then at least ten days' notice of the sale must be given by publication in a newspaper of general circulation located near the property.
"The board may approve sales for Christmas trees and may approve leases for a period of ten years or less for the purposes of harvesting Christmas trees, huckleberry brush, salal, sword fern, cascara and other minor forest products.
"All money derived from the sale of timber or other products, or from lease, or from any other source from the land, except where the Constitution of this state or RCW 76.12.030 requires other disposition, shall be disposed of as follows:
"(1) Fifty percent shall be placed in the forest development fund.
"(2) Fifty percent shall be paid to the county in which the land is located to be paid, distributed, and prorated to the various funds in the same manner as general taxes are paid and distributed during the year of payment." (Emphasis supplied.)
[[Orig. Op. Page 6]]
We have underscored the crucial (and, notably, identical) language of each statute. In our opinion, there are two reasons why these references to "general taxes" should not be construed as a direction to ignore excess tax levies when state forest land revenues are to be prorated and distributed by a county.
(1) First, the reference to general taxes in the statutes could not have been equated by the legislature which enacted them with the term "general taxes" as sometimes used in connection with the forty mill limit of Amendment 17 (per our explanation above). This is because the term "general taxes" in the formula for distributing state forest land revenues came into being prior to the adoption of Amendment 17 in 1944 and, as well, prior to the adoption by initiative of the first of the statutory forty mill provisions noted above, in 1932.3/
(2) Our second reason for concluding that excess tax levies are not to be ignored when state forest land revenues are prorated and distributed by a county is more fundamental. Those lands to which RCW 76.12.030 applies were originally lands which the county acquired through tax sale. The counties held title in trust for the state, county, and other taxing districts entitled to tax revenue from the land. Gustaveson v. Dwyer, 78 Wash. 336, 139 Pac. 194 (1914), aff'd on rehearing, 83 Wash. 303, 145 Pac. 458 (1915). As such the county held proceeds arising from the sale or rental of these lands in trust for the various taxing districts, Commercial [[Orig. Op. Page 7]] Waterway Dist. No. 1 v. King County, 197 Wash. 441, 85 P.2d 1067 (1938), and distributed the proceedswithout excluding excess levies from the distribution apportionment. See, RCW 84.64.230, pertaining to the distribution of sale proceeds, and RCW 84.64.310, pertaining to the distribution of rental proceeds.4/
[[Orig. Op. Page 8]]
When the legislature, by enactment of RCW 76.12.030, directed that tax title lands chiefly valuable for timber should be taken over and administered by the state forest board (now the department of natural resources), the transfer was not intended as a device to revise the trust under which such lands were held. On the contrary, the transfer was intended as a management plan under which the existing trusts would be better served through utilization of the state's professional forestry resources and services. Indeed, revision of the trust, if intended, would have introduced unnecessary and undesirable complexity in the administration of the tax statutes. Avoidance of such complexity is alone reason for interpreting "general taxes" (as used in RCW 76.12.030 and 76.12.120)5/ so as to include excess levies within the distribution formula for state forest land revenues.
In summary, then, it is our opinion that the state forest land monies which counties receive from the department of natural resources under RCW 76.12.030 and 76.12.120 are to be prorated and distributed in the same proportion that current real property taxes (including excess levies) are apportioned. Of course not all taxing district boundaries within a county are coextensive with the county's boundaries. Accordingly the funds which are benefited by a distribution of state forest revenues are only those funds which would receive real property taxes from the specific state forest land giving rise to the revenues being distributed. (It is for this reason that transmittals to the counties by the department of natural resources identify the [[Orig. Op. Page 9]] source of the funds by property description.)6/
We trust that the foregoing advice will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
HAROLD T. HARTINGER
Assistant Attorney General
*** FOOTNOTES ***
1/Previously, commencing in 1932, the people had on several occasions enacted initiatives having a similar purpose. See, Initiative 64 (1932); Initiative 94 (1934); and Initiative 114 (1936); however, these were mere statutes, subject to legislative amendment and so, apparently, it was determined in 1944, that a more fundamental limitation, in the form of a constitutional amendment, was needed.
2/As amended by § 3, chapter 133, Laws of 1967, Ex. Sess., this section provides, in material part:
". . . and within and subject to the aforesaid limitation the levy by the state shall not exceed two mills to be used exclusively for the public assistance program of the state; the levy by any county shall not exceed eight mills; the levy by or for any school district shall not exceed fourteen mills: Provided, That, in each of the years 1967 and 1968 the state shall levy a property tax of four mills of which two mills shall be used exclusively for the public assistance program of the state and of which two mills shall be used exclusively for the support of the common schools; and in such years in which the state shall validly levy a property tax of two mills for the support of the common schools, the levy by or for any school district shall not exceed twelve mills: Provided Further, That the levy by or for any union high school district shall not exceed two-fifths of the maximum levy permissible for any school district without a vote of the electors thereof and the levy by or for any component district within a union high school district shall not exceed three fifths of the maximum levy permissible for any school district without a vote of the electors thereof: Provided Further, That the levy against any nonhigh school district for the high school district fund shall not exceed two-fifths of the maximum levy permissible for any school district without a vote of the electors thereof and the levy by or for any such nonhigh school district shall not exceed the balance of such maximum permissible levy; the levy for any road district shall not exceed ten mills; and the levy by or for any city or town shall not exceed fifteen mills:Provided Further, That counties of the fifth class and under are hereby authorized to levy from eight to eleven mills for general county purposes and from seven to ten mills for county road purposes if the total levy for both purposes does not exceed eighteen mills: Provided Further, That counties of the fourth and the ninth class are hereby authorized to levy nine mills until such time as the junior taxing agencies are utilizing all the millage available to them.
"Nothing herein shall prevent levies at the rates provided by existing law by or for any port or power district."
3/The specific language that now appears in RCW 76.12.030 as subd. (3) was first enacted by the legislature in 1927. Section 3, chapter 288, Laws of 1927, added a new section 3-b to the pre existing law (Laws of 1923, chapter 154). The new provision contained the following language:
"(c) Any balance remaining shall be paid to the county in which the lands are located to be paid, distributed and pro-rated [[prorated]]to the various funds in the same manner as general taxes are paid and distributed during the year of such payment."
It is true, of course, that the provisions of RCW 76.12.120 for payment of revenues to the county were added after 1944, and the adoption of the constitutional forty mill limit. See, § 1, chapter 116, Laws of 1955. However, in view of the obvious parallel and purpose between the two statutes, there is no doubt in our mind that the legislature had no intent to depart from the pre existing meaning of the term "general taxes" as it was used in the companion statute.
4/RCW 84.64.230 provides:
". . . That the proceeds of any sale of any property acquired by the county by tax deed shall be justly apportioned to the various funds existing at the date of the sale, in the territory in which such property is located, according to the tax levies of the year last in process of collection."
RCW 84.64.310 reads:
"The board of county commissioners of any county may, pending sale of any county property acquired by foreclosure of delinquent taxes, rent any portion thereof on a tenancy from month to month. From the proceeds of the rentals the board of county commissioners shall first pay all expense in management of said property and in repairing, maintaining and insuring the improvements thereon, and the balance of said proceeds shall be paid to the various taxing units interested in the taxes levied against said property in the same proportion as the current tax levies of the taxing units having levies against said property."
5/We are aware that revenues distributed under RCW 76.12.120 are not revenues from tax title lands. Instead, they are revenues from lands purchased with forest development bonds or funds. But considering the source of these monies, at least part of which were derived from tax title lands (see, RCW 76.12.030 and Laws of 1923, chapter 154, §§ 5, 7), we are satisfied that the legislature intended the compass of RCW 76.12.120 to be as broad as that of RCW 76.12.030.
6/By virtue of Laws of 1957, chapter 167, § 1 (adding the proviso to subd. (3) of RCW 76.12.030), revenues distributed to eighth and ninth class counties under RCW 76.12.030 are first used to reduce indebtedness of the counties' current expense funds before the regular distribution becomes applicable.