DISTRICTS - WATER AND SEWER - AUTHORITY TO LEVY SPECIAL ASSESSMENTS ON STATE OR FEDERALLY OWNED LAND AND PROCEDURES TO BE FOLLOWED IN REMOVING ILLEGAL SPECIAL ASSESSMENTS LEVIED ON SUCH LANDS(1)

DISTRICTS - WATER AND SEWER - AUTHORITY TO LEVY SPECIAL ASSESSMENTS ON STATE OR FEDERALLY OWNED LAND AND PROCEDURES TO BE FOLLOWED IN REMOVING ILLEGAL SPECIAL ASSESSMENTS LEVIED ON SUCH LANDS.

(1) Water and sewer districts are not authorized to levy special assessments on state or federally owned lands.

(2) The special assessments levied on state or federally owned lands may be removed from the accounts of the districts and the county treasurer.

(3) The procedures to be followed to remove such invalid special assessments from the rolls are those prescribed by RCW 35.44.280.

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                                                               November 25, 1960

Honorable Charles O. Carroll
Prosecuting Attorney
King County
County City Building
Seattle 4, Washington                                                                                            Cite as:  AGO 59-60 No. 161

Dear Sir:

            By letter previously acknowledged you have requested an opinion from this office on the following questions:

            1.  May certain municipal corporations, such as water districts and sewer districts, levy special assessments on state or federally owned lands?

            2.  May the special assessments levied on state or federally owned lands be stricken or otherwise removed from the accounts of the municipal corporation and county treasurer?

             [[Orig. Op. Page 2]]

            3.  If the special assessments levied on state or federally owned lands may be cancelled, what method or procedure should be followed by the public officials concerned?

            We answer your first question in the negative and your second question in the affirmative.  Your third question is answered in the manner set forth in our analysis.

                                                                     ANALYSIS

            At the outset, in order to clarify the questions with which this opinion is intended to deal, and to distinguish those questions from certain other somewhat analogous questions, several general observations appear to be in order.

            First, it appears to be quite clear that no municipal corporation may levy a general real property tax against federally owned land unless such a tax is expressly permitted by Federal legislation.  Boeing Aircraft Company v. Reconstruction Finance Corporation, 25 Wn. (2d) 652, 171 P. (2d) 838 (1946), and cases cited therein.  This rule is based upon the concept of Federal supremacy set forth by Chief Justice Marshall in the famous case of McCulloch v. Maryland, 17 U.S. 315, 4 L.Ed. 579 (1819), and not upon any state constitutional or statutory prohibitions.  This latter point is made clear by the opinion of the Washington Supreme Court in the Boeing Aircraft Company case, supra.  See also the nineteenth amendment of the Washington State Constitution (Art. VII, § 3) which provides:

            "The United States and its agencies and instrumentalities, and their property, may be taxed under any of the tax laws of this state, whenever and in such manner as such taxation may be authorized or permitted under the laws of the United States, notwithstanding anything to the contrary in the Constitution of this state."  (Emphasis supplied.)

            Next it is clear, pursuant to the fourteenth amendment of the Washington State Constitution (Art. VII, § 1), that no general real  [[Orig. Op. Page 3]] property tax may be levied against state owned land.  The pertinent portion of this state constitutional prohibition reads as follows:

            ". . . Property of the . . . state, counties, school districts and other municipal corporations, and credit secured by property actually taxed in this state, not exceeding in value the value of such property, shall be exempt from taxation. . . ." (Emphasis supplied.)

            However, the specific question with which this portion of the present opinion is intended to deal does not relate to the power of any municipal corporation to levy a general real property tax against state or federally owned land.  Rather, the specific question to be here answered is whether certain municipal corporations, i.e. water districts and sewer districts, may levy a special assessment against such lands.

            Nevertheless, with respect to federally owned land, the same general rule of prohibition as was above noted relative to general real property taxes against federally owned land has been held applicable in the case of special assessments.  Mullen Benevolent Corp. v. United States, 290 U.S. 89, 54 Sup.Ct. 38, 78 L.Ed. 192 (1933).  The rule is stated in 48 Am.Jur., Special or Local Assessments, § 86, as follows:

            "In the absence of an act of Congress allowing the lands of the United States to become subject to assessment, it has been uniformly held that such lands are not liable for special assessments for local improvements, and it is not within the power of a state legislature to subject such lands to such an assessment. . . ."

            See also, 63 C.J.S., Municipal Corporations, § 1322b; 90 A.L.R. 1137, 1140; and the previous opinion of this office, AGO 49-51 No. 372, a copy of which is enclosed.  Thus, it is our conclusion that neither a water district, sewer district, nor any other municipal corporation may levy a special assessment against federally owned land except pursuant to an act of Congress.

             [[Orig. Op. Page 4]]

            The question of whether a water district or sewer district may levy a special assessment against state owned land is somewhat more complex.  Unlike the case of a general real property tax, as above discussed, there appears to be no state constitutional bar to a levy by any municipal corporation of a special assessment against state owned land.  The fourteenth amendment of the Washington State Constitution (Art. VII, § 1), which exempts state owned land from a general real property tax does not apply in the case of a special assessment because "the word 'taxation,' as used in said section, does not include special assessments of the character here involved.  The law is well settled that exemption from taxation does not mean exemption from special assessments."  In re Howard Avenue North, 44 Wash. 62, 66, 86 Pac. 1117 (1906).  However, the fact that state owned lands are not constitutionally exempt from special assessments levied by municipal corporations does not by itself mean that municipal corporations, or any particular class of municipal corporations may properly levy special assessments against such lands.  With the probable exception of cities of the first class (see Winkenwerder v. Yakima, 52 Wn. (2d) 617, 328 P. (2d) 873 (1958)), municipal corporations have only such powers as have been expressly granted by the legislature, or as are to be necessarily implied from expressly granted powers.  Pacific First Federal Savings and Loan Association v. Pierce County, 27 Wn. (2d) 347, 178 P. (2d) 351 (1947).

            The powers of a sewer district with regard to the formation of local improvement districts and the levying of special assessments are set forth in RCW 56.20.010, the pertinent portion of which reads as follows:

            "Any sewer district shall have the power to establish utility local improvement districts within its territory as hereinafter provided, and to levy special assessments under a mode of annual installments extending over a period not exceeding twenty years on all property specially benefited by any local improvement, on the basis of the special benefits to pay in whole or in part the damages or costs of any improvements ordered in such sewer district. . . ."

             [[Orig. Op. Page 5]]

            Likewise the powers of a water district with regard to the establishment of local improvement districts and the levying of special assessments are set forth in RCW 57.16.050, the pertinent portion of which reads as follows:

            "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 any improvements ordered in the district; and issue local improvement bonds in the improvement district to be repaid by the collection of local improvement assessments. . . ."

            In view of the foregoing analysis, the precise question to be here answered is whether the powers granted to sewer districts and water districts, respectively, by the above quoted statutory provisions authorizing the levying of special assessments "on all property specially benefited" by a local improvement, are sufficient to empower these two particular classes of municipal corporations to levy special assessments against state owned lands.  We are compelled to answer this question in the negative, for the reasons hereinafter set forth.

            Because of the rule against the levying of special assessments against federally owned lands, previously discussed, the phrase "all property specially benefited" appearing in both RCW 56.20.010 and RCW 57.16.050 manifestly cannot be taken to mean "all property, including federally owned lands" for the reason that our state legislature is simply without power to subject federally owned lands to special assessment levies.  However, because a special assessment is not a tax within the meaning of the fourteenth amendment of the state Constitution, In re Howard Avenue North, supra, our state legislature does have the power to authorize municipal corporations to levy special assessments against state owned lands.  Therefore the question of whether the authority which our legislature has granted to sewer districts and water  [[Orig. Op. Page 6]] districts by RCW 56.20.010 and RCW 57.16.050 respectively, to levy special assessments against "all property specially benefited" empowers these two classes of municipal corporations to levy special assessments against state owned lands specially benefited, is simply a question of legislative intent, and statutory construction.

            Clearly state owned lands are neither (1) expressly included within, nor (2) expressly exempted from, the coverage of either RCW 56.20.010 or RCW 57.16.050.  Therefore, if, in order to subject state owned lands to special assessment levies, it is necessary for the legislature to expressly so state its intent, it must be concluded in the instant matter that the legislature did not intend to authorize special assessment levies by sewer districts and water districts against state owned lands.  On the other hand, if a legislative intent to include state owned lands within the permissible objects of a special assessment levy is to be implied from the absence of an expressed exemption of such lands, then it would follow in the instant matter that the legislature did intend to authorize sewer districts and water districts to levy special assessments against state owned lands specially benefited by a local improvement.

            Our examination of a considerable number of reported cases from this and other jurisdictions reveals a split of authority on this particular point of statutory construction.  The existence and status of this split of authority is aptly summarized in 48 Am.Jur., Special or Local Assessments, § 87, as follows:

            "The minority rule is that state property, unless it is expressly exempted, is subject to a special or local assessment.  The majority rule, however, is that in the absence of legislative permission, state property is not subject to special assessment. . . ."

            It would appear that the position which the Washington Supreme Court has taken on this point is generally in accord with the majority rule requiring that authority to levy special assessments against state owned land be expressly granted.  In Rabel v. Seattle, 44 Wash. 482, 87 Pac. 520 (1906), the city of Seattle had attempted to levy a special assessment against lands belonging to the state but leased to appellants.  The ordinance providing for the improvements, for the payment of which the assessment was sought to be  [[Orig. Op. Page 7]] levied, was passed prior to the issuance of the lease, and the assessment was made against the entire property owned by the state, instead of merely the leasehold held by appellants.  In holding the property was not subject to the assessment, the court said at page 483:

            ". . . Where local improvements are legally proposed by a municipality, subsequent to the bidding of a prospective leaseholder for the property covered by his lease, and such improvements when made constitute a special benefit to such leasehold interest, we believe that said interest can be subjected to an assessment to pay for the special benefits thus accruing.  Before delivering a lease, all of the state property in a given parcel of real estate belongs to the state; hence, at such time it is nonassessable for any purpose, unless clearly and expressly made so by the constitution or statute. . . ." (Emphasis supplied.)

            In Spokane v. Security Savings Society, 46 Wash. 150, 89 Pac. 466 (1907), the court rejected an attempt to levy a special assessment against state school property, stating at pages 153-154:

            ". . . The respondent has cited no charter or statutory authority which, in the year 1891, conferred upon it the power to assess state lands.  In the absence of express statutory authority, the city could not subject lands of the state to a special assessment for local improvements.  Authority therefore is not conferred by a statute which in general terms delegates power to the city to levy special assessments upon private property benefited by the improvement."  (Emphasis supplied.)

            See also State v. Olympia, 171 Wash. 594, 18 P. (2d) 848 (1933), and Paine v. State, 156 Wash. 31, 286 Pac. 89 (1930).

            In apparent conformity with this view the Washington legislature itself appears to have adopted the practice of expressly granting authority to levy special assessments against state owned lands in those cases where it intended to authorize the levying of such assessments.  By chapter 164, Laws of 1919 (amending by implication  [[Orig. Op. Page 8]] chapter 154, Laws of 1909), the legislature enacted a comprehensive statute expressly authorizing the levying of special assessments against state owned lands by incorporated cities, towns, diking, drainage, or port districts.  This legislation, together with certain subsequent amendments, is now codified as RCW 79.44.010 through 79.44.160.

            RCW 79.44.010 provides in pertinent part that:

            "All lands, including school lands, granted lands, escheated lands, tidelands, shorelands, or other lands, (including harbor areas lying between tide or shore lands and outer harbor line) held or owned by the state of Washington in fee simple (in trust or otherwise), situated within the limits of any incorporated city, town, diking, drainage, or port district in this state, may be assessed and charged for the cost of local improvements specially benefiting such lands which may be ordered by the proper authorities of any such city, town, diking, drainage, or port district: . . ."

            RCW 79.44.020 contains a further express declaration of legislative intent, as follows:

            "In all local improvement assessment districts in any incorporated city, town, diking, drainage or port district in this state, property in such district, held or owned by the state shall be assessed and charged for its proportion of the cost of such local improvements in the same manner as other property in such district, it being the intention of this act that the state shall bear its just and equitable proportion of the cost of local improvements specially benefiting state lands: . . ."

            Significantly, at the time of the enactment of this special legislation expressly authorizing cities, towns, diking, drainage and port districts to levy special assessments against state owned lands, there already existed certain other legislation authorizing  [[Orig. Op. Page 9]] two of the classes of municipal corporations covered by the 1919 act, namely, cities and towns, to levy special assessments against "all property specially benefited by a local improvement."  See section 13, chapter 98, Laws of 1911 (cf. RCW 35.44.010).  Had the legislature intended to include state owned lands within the scope of the phrase "all property" which it used in the earlier act covering cities and towns, it would not have found it necessary subsequently to enact a special law expressly authorizing cities and towns, among others, to levy special assessments against state owned lands.

            Therefore, we conclude that in as much as the legislature has not expressly authorized sewer districts and water districts to levy special assessments against state owned lands, these two classes of municipal corporations have no such authority.  So much of this conclusion as relates to water districts, it should be noted, is in accord with the conclusion expressed by this office in an opinion to the Commissioner of Public Lands, dated August 24, 1948 (Ops. Atty. Gen 1947-48:116d) [[1947-48 OAG 116d]], a copy of which is also enclosed.

            The next question to be considered is whether, and in what manner, may special assessments which have been levied upon state or federally owned lands by sewer districts or water districts be stricken or otherwise removed from the accounts of the districts and the county treasurer.

            It is our opinion that such special assessments as have been levied against state or federally owned lands by a sewer district or a water district may be removed from the assessment rolls by means of re assessment.  We have arrived at this conclusion on the basis of the following line of reasoning:

            (1) RCW 56.20.010, governing the levying of special assessments by sewer districts, provides in pertinent part that:

            ". . . The levying, collection and enforcement of all public assessments hereby authorized shall be in the manner now and hereafter provided by law for the levying, collection and enforcement of local assessments by cities of the first class, insofar  [[Orig. Op. Page 10]] as the same shall not be inconsistent with the provisions of this title. . . ."

            (2) Likewise RCW 57.16.050, governing the levying of special assessments by water districts, provides in pertinent part that:

            ". . . The levying, collection and enforcement of such [local improvement] 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. . . ."

            (3) RCW 35.44.280, governing the levying of special assessments by cities, including cities of the first class, provides that:

            "In all cases of special assessment for local improvements wherein the assessments are not valid in whole or in part for want of form, or insufficiency, informality, irregularity, or nonconformance with the provisions of law, charter, or ordinance, the city or town council may reassess the assessment and enforce their collection in accordance with the provisions of law and ordinance existing at the time the reassessment is made.  This shall apply not only to an original assessment but also to any reassessment, to any assessment upon omitted property and to any supplemental assessment which is declared void and its enforcement refused by any court or which for any cause has been set aside, annulled or declared void by any court either directly or by virtue of any decision thereof."

            (4) In conformity with our previously expressed views, a special assessment levied against state or federally owned lands by a sewer district or a water district is invalid or void, because of non-conformity [[nonconformity]]with those provisions of law governing and authorizing the levying of special assessments by these two classes of municipal corporations.

             [[Orig. Op. Page 11]]

            (5) Nothing contained in either chapter 56.20 RCW, governing sewer districts, or chapter 57.16 RCW governing water districts, is in any way inconsistent with the provisions of RCW 35.44.280 authorizing re assessment [[reassessment]]in cases where original assessments are not valid because of non-conformance [[nonconformance]]with the provisions of law.

            (6) Therefore, it is concluded that sewer districts and water districts which have levied special assessments against state or federally owned lands may properly remove such invalid assessments from their assessment rolls and redistribute the costs of the local improvements in question among properly assessable privately owned lands by means of re assessment [[reassessment]]in accordance with RCW 35.44.280.  Parenthetically it should be further noted that the authority to make a re assessment [[reassessment]]in a case where the original assessment fails to conform with the applicable provisions of law has been held by the Washington Supreme Court not to be dependent upon a judgment of a court declaring the first assessment void.  See, State ex rel. Barber Asphalt Paving Co. v. Seattle, 42 Wash. 370, 85 Pac. 11 (1906).

            We trust the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

PHILIP H. AUSTIN
Assistant Attorney General