Bob Ferguson
Other LanguagesAGLO 1971 No. 123 -
Attorney General Slade Gorton
- - - - - - - - - - - - -
October 26, 1971
Honorable G. H. Andrews
Director, Department of Highways
Highways Building
Olympia, Washington 98504
Cite as: AGLO 1971 No. 123 (not official)
Dear Sir:
You have requested the opinion of this office on two questions which we paraphrase as follows:
(1) Should the five‑eighths of one cent per gallon of motor vehicle fuel tax revenues allocated by the legislature to the urban arterial trust account under RCW 82.36.020 be insufficient to pay debt service on the full two hundred million dollars of limited obligation bonds authorized by RCW 47.46.420, may the bonds still be legally issued in the full amount authorized, with the additional debt service to be paid from other motor vehicle fuel tax revenues?
(2) If the answer to question (1) is in the affirmative, are only those motor vehicle fuel tax revenues distributable to cities and towns to be regarded as liable for payment of the debt service, or are moneys distributable to the state and counties liable as well?
We answer question (1) in the affirmative and question (2) in the manner stated in our analysis.
ANALYSIS
The proceeds of the motor vehicle fuel tax, consisting of nine cents for each gallon of fuel sold, distributed or used within the state, are distributed by the terms of RCW 82.36.020 as follows:
". . .
"(1) Seven cents shall be distributed between the state, cities, and counties under the provisions of RCW 46.68.090 and 46.68.100:
[[Orig. Op. Page 2]]
Provided, That from April 1, 1970 through June 30, 1976, six and seven-eighths cents shall be distributed between the state, cities, and counties under the provisions of RCW 46.68.090 and 46.68.100.
"(2) Five‑eighths of one cent shall be distributed to the state and expended pursuant to RCW 46.68.150.
"(3) Five‑eighths of one cent shall be paid into the motor vehicle fund and credited to the urban arterial trust account created by RCW 47.26.080.
"(4) One‑quarter cent shall be paid into the motor vehicle fund and credited to the Puget Sound reserve account created by RCW 47.60.350: Provided, That from April 1, 1970 through June 30, 1976, three‑eighths of one cent shall be paid into the motor vehicle fund and credited to the Puget Sound reserve account created by RCW 47.60.350.
"(5) One‑half cent shall be distributed to the cities and towns directly and allocated between them as provided by RCW 46.68.110, subject to the provisions of RCW 35.76.050: Provided, That the funds allocated to a city or town which are attributable to such one‑half cent of the additional tax imposed by this 1961 amendatory act shall be used exclusively for the construction, improvement and repair of arterial highways as that term is defined in RCW 46.04.030, or for the payment of any municipal indebtedness which may be incurred after June 12, 1963 in the construction, improvement and repair of arterial highways as that term is defined in RCW 46.04.030. All such sums shall first be subject to proper deductions for refunds and costs of collection as provided in RCW 46.68.090." (Emphasis supplied.)
As subsection (3) of this statute indicates, RCW 47.26.080 creates an "urban arterial trust account" within the motor vehicle fund. This latter statute also provides that moneys credited to this account shall be expended [[Orig. Op. Page 3]] for certain specified purposes, including "the payment of principal or interest on bonds issued for the purpose of constructing or improving city arterial streets and county arterial roads within urban areas."
The bond issue with which this opinion is concerned was authorized in 1967 by a statute, § 45, chapter 83, Laws of 1967 Ex. Sess., now codified as RCW 47.26.420 which reads as follows:
"In order to provide funds necessary to meet the urgent construction needs on county and city arterials within urban areas, there shall be issued and sold limited obligation bonds of the state of Washington in the sum of two hundred million dollars or such amount thereof and at such times as determined to be necessary by the state highway commission. The amount of such bonds issued and sold under the provisions of RCW 47.26.420 through 47.26.427 in any biennium shall not exceed the amount of a specific appropriation therefor, from the proceeds of such bonds, for the construction of county and city arterials in urban areas. The issuance, sale and retirement of said bonds shall be under the supervision and control of the state finance committee which, upon request being made by the state highway commission, shall provide for the issuance, sale and retirement of coupon or registered bonds to be dated, issued, and sold from time to time in such amounts as shall be requested by the state highway commission."
Section 50 of this 1967 act (RCW 47.26.425) provides that debt service for these urban arterial bonds shall be taken from that portion of the motor vehicle fund which is distributed to the urban arterial trust account in the motor vehicle fund,
". . . and shall never constitute a charge against any allocations of any other such funds in the motor vehicle fund to the state, counties, cities and towns unless and until the amount of the motor vehicle fund arising from the excise tax on motor vehicle fuels and distributed to the urban arterial trust [[Orig. Op. Page 4]] account proves insufficient to meet the requirements for bond retirement or interest on any such bonds." (Emphasis supplied.)
Unfortunately, it now appears that because of the increase in interest rates since 1967, the five‑eighths of one cent per gallon of motor vehicle fuel tax revenues allocated to the urban arterial trust account by subsection (3) of RCW 82.36.020 (the first of the statutes quoted in this analysis) will be insufficient to pay the debt service on all bonds if they are issued in the full amount of two hundred million dollars authorized by RCW 47.26.420.
Question (1):
In this situation, you first inquire as to whether the state finance committee (at the request of the highway commission) may, nevertheless, issue bonds in the full amount of the two hundred million dollars, or if it must limit the issue to the amount that can be financed by the allocations to the urban arterial trust account under RCW 82.36.020 (3).
It appears clear from the language of RCW 47.26.425, quoted above, that the legislature, while providing that the debt service on such bonds as these first is to be paid from the urban arterial trust account, also contemplated the possibility that this account would lack sufficient funds for this purpose. It therefore provided for an alternate source of payment in the event of such a deficiency; i.e., "other such funds in the motor vehicle fund" of the state. No other inference is possible from the language of the concluding clause to the effect that the debt service for urban arterial bonds
". . . shall never constitute a charge against any allocations of any other such funds in the motor vehicle fund to the state, counties, cities and towns unless and until the amount of the motor vehicle fund arising from the excise tax on motor vehicle fuels and distributed to the urban arterial trust account proves insufficient to meet the requirements for bond retirement or interest on any such bonds."
[[Orig. Op. Page 5]]
The quoted language appears to have been taken verbatim from previous statutes authorizing similar bond issues (see, for example, RCW 47.10.340, RCW 47.10.470, and RCW 47.10.716). It does not seem ideally chosen to accomplish the end sought, for, though negative in form, it is made to carry an affirmative meaning ‑ providing, in effect, that if the urban arterial trust account should prove inadequate to meet the debt service requirements of the bonds, then other monies in the motor vehicle fund allocated to the "states, counties, cities and towns" shall be called upon to meet these requirements. Yet if such an affirmative meaning is not implied from this portion of the statute, it has no meaning at all. For a like construction of the word "unless" in a statute, see, Manning, Bowman & Co. v. Keenan, et al., 73 N.Y. 45, 56, 57 (1878).
Thus, we answer question (1) in the affirmative. Legally, the urban arterial bonds to which this question refers may be issued in amounts up to the full two hundred million dollars authorized by RCW 47.26.420, even though these motor vehicle fuel tax revenues distributable to the urban arterial trust account under RCW 82.36.020 are insufficient to meet all debt service requirements on the bonds.1/
Our interpretation of this portion of RCW 47.26.425 assists us in answering your second question. You ask if diversion of the additional sums necessary to pay debt service over and above the amount available in the urban arterial account, can be made from all the funds available for distribution to the various governmental units, or if it can only be made from that portion channelled to particular units, such as cities and towns.
First, as we have seen, the language of RCW 47.26.425 can only be interpreted to mean that if the urban arterial fund is insufficient to meet the debt service requirements of the bonds, then allocations of other funds in the motor vehicle fund to the "state, counties, cities and towns" shall be called upon to meet them. This statute contains no inference or direction that because this particular bond issue [[Orig. Op. Page 6]] is intended to finance county and city arterials within urban areas, the monies allocated to cities and towns, or to counties, should be drawn on before state monies. In the absence of such an inference or direction all the funds in the various accounts of the motor vehicle fund must be held equally liable.
The conclusion that the legislature intended urban arterial bonds issued pursuant to chapter 47.26 RCW to be a prior claim on motor vehicle fuel tax revenues is reinforced by the language of RCW 47.26.424, codifying § 49, chapter 83, Laws of 1967, Ex. Sess. This statute, while providing that these bonds are not a general obligation of the state, makes them nonetheless payable from the proceeds of state excise taxes on motor vehicle fuels imposed by chapter 82.36 RCW and 82.40 RCW. The statutory provision then goes on to provide as follows:
". . . The proceeds of such excise taxes are hereby pledged to the payment of any bonds and the interest thereon issued under the provisions of RCW 47.26.420 through 47.26.427, and the legislature hereby agrees to continue to impose the same excise taxes on motor vehicle fuels in amounts sufficient to pay, when due, the principal and interest on all bonds issued under the provisions of RCW 47.26.420 through 47.26.427."
There is no indication in this statute that monies allocable to the counties or state are any less liable to pay debt service on the bonds than are other proceeds of the motor vehicle fuel tax.
That the legislature affirmatively intended that these monies should be equally liable in situations of this kind seems even plainer when RCW 47.26.424 is considered in connection with RCW 46.68.090, RCW 46.68.100 and RCW 46.68.130 dealing with allocation of monies in the motor vehicle fund. The first of these three statutes provides that monies accruing to the motor vehicle fund from the motor vehicle fuel tax and use fuel tax shall be first expended (1) for payment of any refunds of motor vehicle fuel tax and use fuel tax revenues which have been paid but are refundable; and (2) for expenses of certain administrative offices of the state of Washington. The amount of revenues remaining after these disbursements is denominated the "net tax amount."
RCW 46.68.100 then provides for allocations of this "net tax amount" among the cities, towns, counties and state, [[Orig. Op. Page 7]] in the manner specified in succeeding statutes. RCW 46.68.130 provides that the share going to the state "shall be expended by the department of highways, . . . for state highways and other proper department of highways purposes."
For our purposes, the most important part of these statutes is the concluding sentence of RCW 46.68.100, which states:
"Nothing in this section or in RCW 46.68.090 or 46.68.130 shall be construed so as to violate any terms or conditions contained in any highway construction bond issues now or hereafter authorized by statute and whose payment is by such statute pledged to be paid from any excise taxes on motor vehicle fuels." (Emphasis supplied.)
Clearly, RCW 47.26.424 is a statute of the sort referred to in the concluding clause of this provision, and in consequence the urban arterial bonds with which we are here concerned specifically fall within the purview of this sentence. The language used makes it clear that nothing in any of the referenced statutes providing for the allocation of motor vehicle fuel tax monies is to be allowed to interfere with obligations incurred with respect to these bonds. Here again, the conclusion is inescapable that monies distributable to the state stand upon the same footing as monies distributable to the counties, cities and town.
The final statute to be noted in connection with this matter is RCW 47.26.426, codifying § 51, chapter 83, Laws of 1967, Ex. Sess. This statute, which deals with the actual mechanics of transferring motor vehicle fuel tax revenues to the urban arterial bond retirement fund (from which all debt service payments are actually made), provides as follows:
"At least one year prior to the date any interest is due and payable on such bonds or before the maturity date of any bonds, the state finance committee shall estimate, subject to the provisions of RCW 47.26.425, the percentage of the receipts in money of the motor vehicle fund, resulting from collection of excise taxes on motor vehicle fuels, for each month of the year which shall be required to meet interest or bond payments hereunder when due, and shall notify the state treasurer of such estimated requirement. The state treasurer shall thereafter from time to [[Orig. Op. Page 8]] time each month as such funds are paid into the motor vehicle fund, transfer such percentage of the monthly receipts from excise taxes on motor vehicle fuels of the motor vehicle fund to the bond retirement fund, hereby created, which fund shall be available solely for payment of interest or bonds when due. If in any month it shall appear that the estimated percentage of money so made is insufficient to meet the requirements for interest or bond retirement, the treasurer shall notify the state finance committee forthwith and such committee shall adjust its estimates so that all requirements for interest and principal of all bonds issued shall be fully met at all times."
Again, as with RCW 47.26.424 and 47.26.425 (which, as parts of the same 1967 act are to be read in pari materia with RCW 47.26.426) no distinction is drawn between motor vehicle fuel tax revenues which are distributable to, or for the benefit of, cities and towns and those which go to counties or the state.
Thus, by way of direct answer to your second question, there being no legal basis for any other conclusion, it is our opinion that if it becomes necessary to pay debt service on the subject urban arterial bonds out of motor vehicle fuel tax revenues other than those distributable to the urban arterial trust account under RCW 82.36.020 (3), supra, those revenues which are distributable to the state and counties must be regarded as being just as much liable for this excess debt service as are those revenues which are distributable to or for the benefit of the various cities and towns. Moreover, we would regard RCW 47.26.425 and 47.26.426, supra, as constituting a direction that any revenues required for debt service over and above the amount specifically placed in the urban arterial trust account represent a first call on fuel tax revenues after the payment of refunds and costs of collection under RCW 46.68.090.
We trust the foregoing will be of assistance to you.
Very truly yours,
FOR THE ATTORNEY GENERAL
Philip H. Austin
Deputy Attorney General
*** FOOTNOTES ***
1/See, § 2, chapter 290, Laws of 1971, 1st Ex. Sess., with regard to the amount of urban arterial trust account monies ($97,217,000) which has been appropriated for the current, 1971-73 biennium.