AGO 1974 No. 6 - Feb 13 1974
OFFICES AND OFFICERS ‑- COUNTY ‑- ASSESSOR ‑- TAXATION ‑- REAL PROPERTY ‑- EXEMPTIONS
(1) The substantive provisions of §§ 1 through 7 of chapter 40, Laws of 1973, 2nd Ex. Sess., redefining the standards to be applied in determining the eligibility of certain property for an exemption from property taxation, apply to assessments made in 1973 for taxes due and payable in 1974.
(2) The procedural requirements of §§ 9 through 19 of chapter 40, Laws of 1973, 2nd Ex. Sess., under which the function of determining the eligibility of property for a tax exemption is, henceforth, to be performed by the state department of revenue instead of the various county assessors and boards of equalization, do not apply in the case of assessments made in 1973 for taxes due and payable in 1974.
(3) The remedies available under existing law for taxpayers who, during 1974, received tax statements covering properties which qualify for an exemption under §§ 1 through 7, chapter 40, Laws of 1973, 2nd Ex. Sess., include a request for cancellation of the assessment as provided for in RCW 84.56.400, a suit for a refund pursuant to chapter 84.68 RCW, or an injunction under RCW 84.68.010 (2).
(4) The provisions of § 21, chapter 40, Laws of 1973, 2nd Ex. Sess., making a general fund appropriation to the department of revenue to administer the provisions of this new property tax exemption law, do not authorize that department to reimburse the counties for their costs incurred in determining property tax exemptions during the 1973 assessment year.
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February 13, 1974
Honorable Ronald L. Hendry
946 County-City Building
Tacoma, Washington 98402
Cite as: AGO 1974 No. 6
[[Orig. Op. Page 2]]
By letter previously acknowledged you have requested an opinion of this office on certain questions pertaining to the applicability of chapter 40, Laws of 1973, 2nd Ex. Sess., to 1973 property tax exemptions. We paraphrase your questions as follows:
(1) Do the substantive provisions of §§ 1 through 7 of chapter 40, Laws of 1973, 2nd Ex. Sess., redefining the standards to be applied in determining the eligibility of certain property for an exemption from property taxation, apply to assessments made in 1973 for taxes due and payable in 1974?
(2) Do the procedural requirements of §§ 9 through 19 of chapter 40, Laws of 1973, 2nd Ex. Sess., under which the function of determining the eligibility of property for a tax exemption is, henceforth, to be performed by the state department of revenue instead of the various county assessors and boards of equalization, apply in the case of assessments made in 1973 for taxes due and payable in 1974?
(3) In the event that question (1) is answered in the affirmative and question (2) in the negative, what statutory remedies are available under existing law for taxpayers who, during 1974, receive tax statements covering properties which qualify for an exemption under §§ 1 through 7 of chapter 40, supra?
(4) If question (2) is answered in the negative, do the provisions of § 21, chapter 40, Laws of 1973, 2nd Ex. Sess., making a general fund appropriation to the department of revenue to administer the provisions of this new property tax exemption law, authorize that department to reimburse the counties for their costs incurred in determining property tax exemptions during the 1973 assessment year?
We answer question (1) in the affirmative, questions (2) and (4) in the negative and question (3) in the manner set forth in our analysis.
By its enactment of chapter 40, Laws of 1973, 2nd Ex. Sess., the legislature first amended several preexisting statutes relating to property tax exemptions so as to redefine and generally broaden the standards to be applied in determining the eligibility of property for an exemption under their various provisions. See, §§ 1 ‑ 5, chapter 40,supra, amending RCW 84.36.020 ‑ 84.36.050, [[Orig. Op. Page 3]] together with sections 6 and 7 by which the legislature defined certain terms and otherwise attempted to clarify the conditions under which these property tax exemptions would, henceforth, be allowed. Then, after providing in section 8 for the consequences of a later cessation of a use under which an exemption has been granted under those sections, the legislature went on in sections 9 through 19 to establish a detailed new set of procedures for the administration of these exemptions ‑ essentially transferring the basic responsibility for their administration from the several county assessors and boards of equalization to the state department of revenue.
The obvious, underlying basis for all of your questions is the fact that property taxes, in this state, are assessed, levied and collected in accordance with a cyclical schedule under which the functions of assessing property for taxation and the levying of taxes both occur during the calendar year prior to the calendar year in which the taxes thus assessed and levied become due and payable. See, in particular, RCW 84.40.020, RCW 84.52.030, and RCW 84.56.020. Thus, the function of determining the eligibility of property for a tax exemption (being a part of the assessment process) occurs during the year prior to the year of collection ‑ although, as discussed at some length in AGLO 1973 No. 92 [[to Martin J. Durkan and Harry B. Lewis, Senate Committee on Ways and Means, an Informal Opinion, AIR-73592 on September 7, 1973]], copy enclosed, the legislature may, in providing for a particular exemption, make it applicable to property which has already been assessed for taxation so long as the taxes from which the property is thus exempted have not yet been collected.
In that recent opinion, which immediately preceded the enactment of chapter 40,supra, by the legislature at its September, 1973, special session, we specifically advised that if it were then to pass an act exempting certain additional property from taxation it could make such broadened exemptions applicable to 1973 levies for taxes due and payable during the calendar year 1974 even though the subject properties had already been placed upon the 1973 tax rolls earlier during 1973. Accord,Snow's Mobile Homes, Inc. v. Morgan, 80 Wn.2d 283, 494 P.2d 216 (1972). The legislature's response to this advice was to include in chapter 40, as § 23 thereof, the following:
"This 1973 amendatory act is necessary for the immediate preservation of the public [[Orig. Op. Page 4]] peace, health and safety, the support of the state government and its existing public institutions, shall take effect immediately and shall be effective for assessment in 1973 for taxes due and payable in 1974.
Bearing this background in mind we turn now to your questions.
The initial question arising by reason of your request is whether, in view of § 23,supra, thesubstantive portions of chapter 40 which broadened and redefined the standards to be applied in determining the eligibility of property for an exemption from taxation are applicable to assessments made and taxes levied in 1973 for collection in 1974. We think that this question is clearly answerable in the affirmative, based upon the reasoning of AGLO 1973 No. 92,supra, and the specific language to that effect appearing in § 23 of the act.
This question also involves section 23, supra, and asks whether, by virtue of this provision of chapter 40, the procedural requirements of sections 9 ‑ 19 arealso to be deemed applicable with respect to assessments made in 1973 for taxes due and payable in 1974. Based upon the terms of these sections of the act, we answer in the negative.
To begin with, § 9 provides that:
"In order to qualify or requalify for exempt status for real or personal property pursuant to the provisions of chapter 84.36 RCW, as now or hereafter amended, all foreign national governments, churches, cemeteries, nongovernmental nonprofit corporations, organizations, and associations, private schools or colleges, and soil and water conservation districts must file an annual renewal application verifying the facts in the original claim with the state department of revenue. All application forms shall be signed by an authorized agent of the applicant. Such applications must be filed on forms prescribed by the department of revenueno later than March 31 of each year. The department of revenue may provide by rule that such applications [[Orig. Op. Page 5]] may be available at and filed with each county assessor and forwarded to the department of revenue for review." (Emphasis Supplied.)
Section 10 then states that:
"On or beforeJanuary 1 of each year, the department of revenue shall mail application forms to owners of record of property exempted from property taxation at their last known address who must make a renewal application for continued exemption. The department of revenue shall notify the assessor of the county in which the property is located who shall remove the tax exemption from any property if an application has not been received for the exemption of such property as required by section 9 of this 1973 amendatory act on or before the due date: PROVIDED, That the department of revenue shall allow a reasonable extension of time for filing upon written request filed on or before the due date, and for good cause shown therein: PROVIDED FURTHER, That failure to file and subsequent removal of exemption shall not be subject to review as provided in section 16 of this 1973 amendatory act." (Emphasis Supplied.)
Passing over § 11, which simply provides for the payment of an application fee ". . . for each annual application for exemption . . .", we next note § 12 which states, in material part, that:
"The department of revenue shall review each application for exemption and make a determination thereon prior to August 1st of the assessment year for which such application is made. The department of revenue may request such additional relevant information as it deems necessary. . . ."
Section 13 then provides that:
"On or beforeAugust 31st, the department of revenue shall prepare a list by county of those properties exempted under this 1973 amendatory act, and shall forward a list to each county assessor of the property exempt in that county." (Emphasis Supplied.)
[[Orig. Op. Page 6]]
Following this, § 14 details the information which must be filed with the department of revenue in connection with applications for certain property tax exemptions by institutions; § 15 provides for the revocation of an exemption initially granted on the basis of incorrect information; and § 16 provides for the review of the department of revenue's action with respect to a particular application for an exemption by the state board of tax appeals. Section 17 then addresses itself to those situations in which property changes from exempt to taxable status at some time in the future, and § 18 requires both the county assessors and the department of revenue to issue public notice of the provisions of the act. Finally, § 19 empowers the department of revenue with the requisite authority to adopt necessary rules and regulations.
Our answer to your second question is based, primarily, upon the various dates which are specifically set forth in §§ 9, 10, 12 and 13, supra. Each of the procedural requirements of these sections would be manifestly impossible for either a property owner or the department of revenue to have met during the 1973 assessment year since the time for performing the acts required had, in every case, already passed before September 27, 1973, the date that chapter 40 was signed into law by the governor. It would be an absurd consequence not consistent with the apparent legislative purposes to be accomplished by this act to conclude that the legislature intended to transfer responsibility for administering the exemptions provided for in the act to the department of revenue on a retroactive basis, while at the same time making it impossible for the department to carry out its functions under the express terms of the act. And, as you know, it is a fundamental rule of statutory construction that ". . . no construction should be given to a statute which leads to a gross injustice or absurdity." Wilson v. Lund, 74 Wn.2d 945, 447 P.2d 718 (1968), and cases cited therein.
Accordingly, even though the substantive eligibility of a parcel of property for an exemption from taxes assessed and levied in 1973 for collection in 1974is to be determined on the basis of §§ 1 ‑ 7 of chapter 40, supra, in accordance with our answer to your first question, it is our opinion the various procedural functions which are to be performed in determining the eligibility of such property for an exemption must continue to be performed, with respect to those taxes, [[Orig. Op. Page 7]] by the various county assessors and boards of equalization without regard to the procedural requirements of this 1973 act.
In so concluding we should also take note of the fact that nowhere in chapter 40 is there any express amendment to, or repeal of, any of the preexistingprocedural statutes relating to property tax exemptions. Instead, the approach taken by this act involves the concept of an implied repeal or amendment of prior statutes by a later inconsistent act1/ - with the prior laws becoming inoperative only when the new ones go into operation with respect to assessments in 1974 and subsequent years. Thus, the answer which we give to this your second question can also be expressed by saying, simply, that the prior procedural statutes relating to property tax exemptions, not having been repealed as to 1973 assessments, remain in effect as far as they are concerned.
Your third question assumes the foregoing answers to questions (1) and (2) and asks what statutory remedies are available for taxpayers who, during 1974, receive tax statements covering properties that qualify for an exemption from 1973 taxes under one or more of the substantive provisions of chapter 40.
This question was also specifically answered in AGLO 1973 No. 92,supra, wherein we made reference, on pages 3 and 4, to the following language of RCW 84.56.400:
"The county treasurer shall also make and file with the county board of equalization a record, setting forth the facts relating to such manifest errors in description, double assessments, clerical errors in extending the rolls, and such manifest errors in the listing of property which do not involve a revaluation of property,such as the assessment of property exempted by law from taxation or the failure to deduct the exemption allowed by law to the head of a family, as shall come to his attention after the rolls have been turned over to him [[Orig. Op. Page 8]] for collection. The said record shall also set forth by legal description all property belonging exclusively to the state, any county or any municipal corporation whose property is exempt from taxation, upon which there remains, according to the tax roll, any unpaid taxes." (Emphasis Supplied.)
We then advised that the appropriate remedy for such a taxpayer as is described by your third question would be that of bringing the situation to the attention of his county treasurer promptly upon receipt of his 1974 tax statement so as to enable the case then to be presented to the board of equalization for a cancellation of the assessment as provided for in that statute. If, however, he fails to do this his remaining remedy will either be that of payment of the tax under protest followed by a suit for a refund pursuant to chapter 84.68 RCW or, if proper grounds for invoking equity jurisdiction exist, the initiation of an injunctive action under RCW 84.68.101 (2) which allows the collection of taxes to be enjoined "where the property upon which the tax is imposed is exempt from taxation."
Finally, assuming the foregoing negative answer to question (2), you have asked whether § 21, chapter 40, supra, authorizes the department of revenue to reimburse the counties for their costs incurred in administering property tax exemptions in the assessment year 1973. We find no such legislative authorization and, accordingly, answer this question in the negative as well.
As noted earlier, § 21 of this act merely contains an appropriation to the department of revenue, in the following language:
"There is hereby appropriated to the Department of Revenue $450,000 from the general fund to administer the provisions of this 1973 amendatory act for the biennium ending June 30, 1975."
This provision clearly constitutes an appropriation to the department to enableit to administer the property tax exemption processes during the remainder of the 1973 ‑ 75 biennium; i.e., commencing with the assessment [[Orig. Op. Page 9]] year 1974 in accordance with our answer to question (3). Nothing in this section or in any other law authorizes the department to disburse these funds for the administration of tax exemptions by any other public officials or agencies. And, of course, without such authority the department most certainly cannot disburse these funds to any other such agency. State ex rel. Eastvold v. Maybury, 49 Wn.2d 533, 304 P.2d 663 (1956).
This completes our consideration of your several questions, and we trust that the foregoing will be of some assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General
WILLIAM D. DEXTER
Assistant Attorney General
*** FOOTNOTES ***
1/See, e.g., Herrett Truck'g Co. v. Wn. Pub. Ser. Com., 58 Wn.2d 542, 364 P.2d 505 (1961).