AGO 1954 No. 370 - Dec 22 1954
TAXATION ‑- EXEMPTIONS ‑- STATE PROPERTY ‑- UNIVERSITY TRACT MUNICIPAL SERVICES ‑- PAYMENT ‑- LEGISLATION
1. Metropolitan tract of University is tax exempt.
2. Legislature may authorize regents to pay city for service to University property.
- - - - - - - - - - - - -
December 22, 1954
Honorable Charles O. Carroll
Seattle 4, Washington Cite as: AGO 53-55 No. 370
Attention: !ttMr. K. G. Smiles
Chief Civil Deputy
You have by letter requested our opinion on the following four questions:
1. In view of the provisions of the 14th amendment of the state constitution and of RCW 84.36.010, is it correct that the state legislature could not authorize King County to levy a real property tax on the fee interest in the University of Washington's Metropolitan Tract?
2. If the answer to 1 is affirmative, then can the state legislature authorize the Board of Regents of the University to pay the local governmental subdivisions which render police, fire, garbage collection, etc., services to the Metropolitan Tract, a sum in lieu of real property taxes approximating the cost of the services so rendered?
3. If the answer to 2 is affirmative, for what services could the Regents be authorized to make such a payment?
[[Orig. Op. Page 2]]
4. If the answer to 2 is affirmative, would the regents have authority to make such payments without seeking the sanction of the legislature?
Subsequently you withdrew your original letter and resubmitted questions 1, 3 and 4 in their original form and clarified question 2 by the following language:
"Question No. 2 in his letter should be clarified. We have now been informed that Mr. Stacy wishes to know whether the Board of Regents of the University of Washington may make a direct payment to the City of Seattle for services rendered to the Metropolitan Tract. As stated in his letter, these services would include police and fire protection, garbage collection, etc. The payment to the citywould not be made in lieu of taxes. The payment would not be listed on the tax rolls and no portion of it would be distributed to the various taxing units in King County. It would simply be a payment from the University of Washington to the City of Seattle. No formula has been devised as to how the value of these services would be determined."
It is our opinion that the answer to question 1 is in the affirmative and that the answer to question 4 is in the negative. Our answer to question 2, as clarified, is in the affirmative if the proposed legislation is in substantially the general form hereinafter suggested. In our opinion the answer to question 3 is that the Board of Regents of the University of Washington can make payments for any services furnished by a local governmental subdivision which are beneficial to the state property which is under the direct or indirect control of the Board of Regents if authorized so to do by legislation.
Our above answer to question 1 is because of amendment XIV to the state constitution which reads in part as follows:
[[Orig. Op. Page 3]]
"* * * property of the United States and of the state, counties, school districts and other municipal corporations, * * * shall be exempt from taxation."
Also, the legislature in furtherance of the constitutional inhibition of taxation against such property has enacted RCW 84.36.010 which reads as follows:
"All property belonging exclusively to the United States, the State, any county or municipal corporation shall be exempt from taxation."
Therefore, if the Metropolitan Tract is the property of the state of Washington it is exempt from taxation.
It is our understanding that on April 16, 1861, Arthur Denny and Mary, his wife, conveyed to the Territory of Washington 8.32 ‑ 14.25 acres of land and on the same day Charles C. Terry and Mary J. Terry, his wife and Edward Lander conveyed to the Territory of Washington 1.67 ‑ 11.25 acres and that thus the territory received title to ten acres of land in what is now downtown Seattle. It is our further understanding that the present University of Washington Metropolitan Tract is located on said ten acres of land; that none of the land on which the University of Washington Metropolitan Tract is now located has been conveyed to any third party except for a small part that was conveyed to the United States government for a post office at Third and Union. Thus, the State of Washington, as successor to the Territory of Washington, is the owner of the fee title in the University of Washington Metropolitan Tract and it is not taxable by King County.
Our conditional affirmative answer to question 2 is arrived at by the following reasoning.
It would appear clear that such legislation may be enacted unless it is in violation of some constitutional provision. It appears to us that there are only two constitutional provisions that might possibly apply to the situation here presented. The first is Article 1, section 12 of the Washington state constitution which reads as follows:
[[Orig. Op. Page 4]]
"No law shall be passed granting to any citizen, class of citizens, or corporationother than municipal, privileges or immunities which upon the same terms shall not equally belong to all citizens, or corporations." (Emphasis ours)
The supreme court of the State of Washington in the case of Spokane v. Spokane County, 179 Wash. 130, in considering certain legislation which allowed the state treasurer to credit certain moneys realized from an excise tax on gasoline to be paid to the various counties in the state and a portion thereof to be paid by the counties to cities of the first, second and third classes for the construction and improvement of certain arterial streets and highways, had this to say regarding the above quoted constitutional provision on page 136 of that opinion.
"It is also urged that the challenged provisions are void because conferring upon cities of the first, second and third classes privileges denied to fourth class cities and towns. The appellant makes reference to no particular constitutional provision violated. If it has in mind section 12, article 1, of the state constitution, to the effect that no law shall be passed granting to any citizen, class of citizens or corporation, other than municipal, privileges or immunities which, upon the same terms, shall not equally belong to all citizens or corporation, the objection is, of course, untenable, since this constitutional provision by its terms does not relate to municipal corporations. The legislature is authorized by the constitution to classify cities and towns, and is not required to endow all classes with the same powers and functions or impose upon all equally the same limitations."
The second possible applicable constitutional provision is Article 11, section [[Orig. Op. Page 5]] 28, subsection 6, which reads as follows:
"The legislature is prohibited from enacting any private or special laws in the following cases:
"* * *
"(6) For granting corporate powers or privileges."
While we seriously doubt that a payment to the city of Seattle, because of fire and police protection furnished the Metropolitan Tract, could be considered a grant of a corporate privilege, it would nevertheless seem that legislation directly authorizing the Board of Regents to pay the city of Seattle might allow such an argument to be made. If, however, the legislation would provide that the payment for such services as furnished could be made by the Board of Regents to any city or town in which state income‑producing real property, the income of which was dedicated to university purposes, was located, it would then seem that all cities and towns similarly situated would be treated in the same manner and thus the possible argument would be vitiated.
In the case ofState ex rel. Lindsey v. Derbyshire, 79 Wash. 227, the supreme court for the state of Washington had before it an act providing for the appointment of official court reporters. Certain sections of the act provided that court reporters could be appointed in judicial districts having a population of more than 30,000 but could not be appointed in judicial districts having a lesser population. On page 234 of that decision the supreme court said:
"Viewed, then, as a classification by population, the act is uniform in its application, and must remain so, since there is nothing in the act limiting its operation only to judicial districts now having a population of 30,000 or over. It must be construed as applying to every judicial district if, and when, it hereafter acquires that population, though now having less."
[[Orig. Op. Page 6]]
While the form of legislation suggested here does not amount to a classification by population we nevertheless feel that the above quoted language is apposite because as suggested, the legislation would apply to all cities and towns now containing income‑producing property dedicated to university purposes and to any city or town which may hereafter contain such property.
In answer to question 3 we are unable to find any authority that condemns legislation allowing payment to a city or town for services performed by that city or town that the state itself could legally perform for or on the state property. In the case ofSpokane v. Spokane County, supra, in regard to the gasoline tax moneys being paid to the cities as above described, the court on page 137 had this to say:
"The grant of financial aid to cities of the first, second and third classes here involved is not made to them in aid of any of their general corporate or proprietary purposes, but in trust for the construction and maintenance of public highways whose ultimate control rests in the state. The state itself could establish and improve the streets within the cities without challenge of its legal right to do so. It has chosen rather to act through municipal agencies of its own creation.
"Neither do we think the fact that the legislature has chosen to remit these moneys to the cities through the agency of the counties makes the law vulnerable. Under the provisions of chapter 88 of the 1929 session, p. 159, the cities' share was to be remitted directly by the state treasurer. This plan was changed by the amending acts, and the county was used as the agency of transmittal. The counties, of course, as agencies of the state, may have this ministerial duty imposed upon them by the legislature."
While the above quoted paragraphs are not entirely analogous to the present [[Orig. Op. Page 7]] situation, the only distinctions that there appear to be are that the moneys that are paid to the cities are paid in trust and are paid in advance for subsequent construction and maintenance services to be performed. Here it may well be that the legislation will not allow the moneys to be paid until after the performance of the services. In all other respects the above quoted paragraphs appear to be "on all fours" with the situation here presented. The moneys will be paid to the city or town for services furnished to property whose ultimate control rests in the state. The state itself could certainly perform such services upon its own property. The state here has chosen to act through municipal agencies. There the money was being remitted to the cities through the agency of the counties. Here, the money is being remitted to the cities and towns through the agency of the Board of Regents. Both the Board of Regents and the counties are agencies of the state.
Turning our attention now to question 4, we feel that legislation is necessary for the Board of Regents to make the payments suggested because of the facts that a search of the general powers heretofore granted to the Board of Regents did not appear to cover this specific situation and there is of course no express power granted to them to make the payments here contemplated. In regard to the general powers of the Board of Regents, RCW 28.77.130 reads in part as follows:
"* * * The board of regents shall have full control of the university * * *"
This general power has been construed by the supreme court of this state in a recent decision,State ex rel. Holcomb v. Armstrong, 39 Wn. (2d) 860. The problem there presented was whether or not the Board of Regents under the above quoted general power had the right to require students at the University to undergo an x-ray examination for the purpose of discovering a tuberculin infection as a condition precedent to registration as a student. On page 866 of the opinion the supreme court said in considering the general power grant contained in the above quotation from the statute:
"At least, it must have been intended that they would not permit an infectious disease to spread on the campus, if a way to prevent its doing so became known to them. Mere contemplation of an institution where action necessary for that [[Orig. Op. Page 8]] purpose cannot be taken by its governing board,when no other public authority has acted, answers any doubt upon the subject." (Emphasis ours)
It would appear from the above emphasized portion of the decision that the court might well have not allowed the university to subject its students to x-ray examinations if some other public authority had already subjected such students to an x-ray examination and the result thereof was that there was no infectious or contagious disease present. Here, the police and fire services are already being furnished by whatever municipalities may now be covered by the suggested legislation. Thus a public authority has acted and it would seem in view of the above emphasized language that it would be indeed safer to require specific legislation allowing the Board of Regents to make the contemplated payments rather than to rely on the general grant of power above quoted.
Your letter clarifying question 2 makes it clear that there has been no formula yet devised setting the amount to be paid affected municipalities. We thus, of course, can express no opinion on this subject.
It is therefore our opinion as above indicated, first that no real property tax may be levied on the fee interest in the University of Washington's Metropolitan Tract. Second, that the state legislature may authorize the Board of Regents of the University of Washington to pay the local governmental subdivision for services beneficial to the Metropolitan Tract, if such general legislation has been enacted. Third, that the Board of Regents would not have authority to make such payments without specific authority from the legislature.
I sincerely hope that the above will be of service to you.
Very truly yours,
J. D. THOMAS, JR.
Assistant Attorney General