FIRE PROTECTION DISTRICTS ‑- EFFECT OF 1951 LAW

FIRE PROTECTION DISTRICTS ‑- EFFECT OF 1951 LAW.

(1) The mere execution of a contract prior to April 1, 1951, would not take such contract out of the application of section 2, chapter 107, Laws of 1951, so as to entitle the district to levy taxes in the years 1952 and subsequent years for the payment of obligations thereby created if no bonds or interest-bearing warrants were actually issued prior to April 1, 1951.

(2) Interest-bearing coupon warrants may still be issued by fire protection districts, but such warrants cannot pledge the tax revenues of the district.

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                                                                   May 24, 1951

Honorable W. R. Cole
Prosecuting Attorney, Kittitas County
National Bank of Commerce Building
Ellensburg, Washington                                                                                            Cite as:  AGO 51-53 No. 48

Dear Sir:

            On May 16, 1951, you asked the following questions:

            "(1) Is the execution of a contract an indebtedness under the interpretation of chapter 107, section 2, Laws of 1951?

            "(2) Can the purchase of equipment needed by a fire district be accomplished through the issuance of interest-bearing coupon warrants under chapter 107, section 2, Laws of 1951?"

            The conclusions reached may be summarized as follows:

            (1) The mere execution of a contract prior to April 1, 1951, would not take such contract out of the application of section 2, chapter 107, Laws of 1951, so as to entitle the district to levy taxes in the years 1952 and subsequent years for the payment of obligations thereby created if no bonds of interest-bearing warrants were actually issued prior to April 1, 1951.

             [[Orig. Op. Page 2]]

            (2) Interest-bearing coupon warrants may still be issued by fire protection districts, but such warrants cannot pledge the tax revenues of the district.

                                                                     ANALYSIS

            Section 2, chapter 107, Laws of 1951 (52.16 RCW) provides:

            "In the year 1952 and subsequent years no tax levy shall be made by any district except for the purpose of retiring indebtedness outstanding on April 1, 1951, for which tax revenue of the district shall have been pledged.  In lieu of all tax levies each district shall annually determine its cost of operation, maintenance and capital improvement and the commissioners shall classify all the property within the district in accordance with the degree of benefit conferred by the operation of the district.  In accordance with the classification so made they shall apportion the amount required and shall levy assessments therefor to be collected with the general taxes of the county."

            Section 2, chapter 6, Laws of 1951, Ex Sess., also dealt with the same subject, but is immaterial herein.

            The underlying purpose of chapter 107, supra, was to change the method of raising revenue for the operation of weed districts (Section 1), fire protection districts (Sec. 2), sewer districts (Sec. 3) and water districts (Sec. 4) from the taxation method previously established to the assessment method therein established.  It was apparently hoped that through the action of the new assessment method counties would have a larger limit of taxation under the forty-mill constitutional amendment (Amendment No. 17).  Since the various laws relating to taxation by the various districts varied as to their language and terms, the exact wording of the various sections likewise varied.  Section 4 contains a provision reading:

            "For the year 1952 and subsequent years no taxes shall be levied by any district except for the purpose of paying bond and warrant indebtedness outstanding on April 1, 1951, for which the tax revenues of the district shall have been pledged.  * * *"

             [[Orig. Op. Page 3]]

            All four sections use April 1, 1951, as the last date on which the indebtedness must be outstanding for the application of the taxing privilege.  The only difference in the four sections is that sections 1, 3 and 4 specifically speak of "bond and warrant indebtedness," while section 2 speaks only of "indebtedness."  While the four sections relate to four separate and distinct kinds of districts, nevertheless we are inclined to believe that we can rightfully consider the entire act to ascertain the legislative intent.  We are therefore forced to the conclusion that the legislature intended that fire protection districts should be placed on exactly the same basis as were the other three kinds of districts and that section 2 should be interpreted and construed as though it read:

            In the year 1952 and subsequent years no tax levy shall be made by any district except for the purpose of retiring bond and warrant indebtedness outstanding on April 1, 1951, for which tax revenue of a district shall have been pledged.

            It would therefore necessarily follow that in the years 1952 and subsequent years the fire protection district in question could levy taxes only to retire such bonded and warranted indebtedness as existed on April 1, 1951, for which tax revenues had been pledged.  Other than as to those two classes of indebtedness all revenues of the district must be obtained through the assessment method as provided by section 2, supra.  It would likewise follow that the district would be without right to issue warrants after April 1, 1951, for the payment of which the tax revenues of the district were pledged.

            There is no provision against the issuance of interest-bearing coupon warrants as such.  The prohibition is as to the pledging of the tax revenues.  Such warrants can still be issued, but they must be paid through the assessment method.

            We also enclose a letter sent to the prosecuting attorney of Spokane County on May 8, 1951, for whatever aid it may be to you in working out your problems.

Very truly yours,

SMITH TROY
Attorney General

GEORGE DOWNER
Assistant Attorney General