AGO 1959 No. 92 - Dec 23 1959
SCHOOLS - LIABILITY OF DISTRICT FOR INTEREST OR PENALTIES ON ASSESSMENTS LEVIED BY L.I.D. OF A WATER DISTRICT.
(1) A school district is liable for the payment of interest in an assessment payable in installments and levied against its real property by utility L.I.D.created by a water district.
(2) A school district is not liable for interest or penalties for failure to pay the assessment or any installment when due.
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December 23, 1959
Honorable Newman H. Clark
State Representative, 43rd District
1044 Henry Building
Seattle, Washington Cite as: AGO 59-60 No. 92
You have requested an opinion from this office on the following questions which we paraphrase as follows:
1. Is a school district liable for the payment of interest on an assessment payable in installments and levied against its real property by a utility local improvement district created by a water district?
2. Is a school district liable for interest or penalties on an assessment for failure to pay the assessment or any installment thereof when due?
We answer the first question in the affirmative and the second in the negative.
Establishment of utility local improvement districts by water districts is authorized by RCW 57.16.050, which provides as follows:
[[Orig. Op. Page 2]]
"A district may establish local improvement districts within its territory; levy special assessments under the mode of annual installments extending over a period not exceeding twenty years, on all property specially benefited by a local improvement, on the basis of special benefits to pay in whole or in part the damage or costs of improvements ordered in the district; and issue local improvement bonds in the improvement district to be repaid by the collection of local improvement assessments. The levying, collection and enforcement of such assessments and issuance of bonds shall be as provided for the levying, collection, and enforcement of local improvement assessments and the issuance of local improvement bonds by cities of the first class insofar as consistent herewith. The duties devolving upon the city treasurer are hereby imposed upon the county treasurer for the purposes hereof. The mode of assessment shall be determined by the water commissioners by resolution. When in the petition or resolution for the establishment of a local improvement district, and in the comprehensive plan or amendment thereto or plan providing for additions and betterments to the original plan, previously adopted, it is provided that the assessments shall be for the sole purpose of payment into the revenue bond fund for the payment of revenue bonds, then the local improvement district shall be designated as a 'utility local improvement district.' No warrants or bonds shall be issued in a utility local improvement district, but the collection of interest and principal on all assessments in the utility local improvement district shall be paid into the revenue bond fund."
This statute also provides that insofar as not inconsistent, the levying, collection and enforcement of such assessments are the same as provided for local improvement assessments in cities of the first class under Title 35 RCW.
Property of school districts is subject to local improvement assessment in the same manner as all other property. In re Howard Avenue North, 44 Wash. 62, 88 Pac. 1117 (1906); Spokane v. Fonnell, 75 Wash. 417, 135 Pac. 211 (1913). The legislature has made it clear that assessments payable in installments shall bear interest. RCW 35.49.030 and 57.16.050. It reasonably follows therefrom that such an assessment payable by a school [[Orig. Op. Page 3]] district shall carry with it accrued interest. SeeIn re Reassessment Second School Add., 110 Wash. 104, 187 Pac. 1092 (1920).
RCW 35.49.030 also provides for interest and penalties on delinquent assessments or installments thereof. However, interest upon delinquent taxes is a penalty to insure prompt payment, is no part of the tax, and is not interest in the accepted sense. State ex rel. First Thought G.M. v. Sup'r Ct., 93 Wash. 433, 161 Pac. 77 (1916). The only amount for which a school district may be liable is the proportionate amount assessable to it with interest on the deferred balance as of the date each installment is due, and provisions relating to interest or penalties on delinquent payments do not apply to it. Wilson v. City of Hollis, 193 Okla. 241, 142 P. (2d) 633 (1943), 150 A.L.R. 1385;Board of Education, Etc., v. City of Chickasha, 195 Okla. 127, 155 P. (2d) 723 (1945); City of Healdton v. Board of Education, 204 Okla. 579, 232 P. (2d) 148 (1951). The rationale behind these cases is that the taxpaying public should not be penalized because of the failure of their officials to perform their duties on time.
The same conclusion was reached in an opinion of this office dated July 18, 1952, AGO No. 51-53-355, in which it was held that a school district was not liable for interest on delinquent irrigation district assessments. That opinion was not concerned with interest on an assessment payable in installments before delinquency but only with interest as a penalty for late payment.
We trust that the foregoing will be of assistance to you.
Yours very truly,
JOHN J. O'CONNELL
HENRY W. WAGER
Assistant Attorney General