REFERENDUM ON ADDITIONAL LOCAL SALES AND USE TAX AND REAL ESTATE EXCISE TAX

COUNTIES ‑‑CITIES AND TOWNS ‑‑ TAXATION ‑‑ INITIATIVE AND REFERENDUM ‑‑ REFERENDUM ON ADDITIONAL LOCAL SALES AND USE TAX AND REAL ESTATE EXCISE TAX 

As a consequence of the enactment of § § 2 and 3, chapter 99, Laws of 1983, every county or city ordinance enacted after the effective date of that act (April  22, 1983) which imposes or alters the rate of a local sales or use tax imposed under RCW 82.14.030(2), or a real estate excise tax imposed under RCW 82.46.010(2), is subject to the referendum procedures prescribed by those two sections of the subject act. 

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August 5, 1983

Honorable Avery Garrett, Chairman
Municipal Research Council
4719 Brooklyn Avenue N.E.
Seattle, Washington 98105

Cite as:  AGO 1983 No. 15                                                                                                                

Dear Sir:

            By letter previously acknowledged you directed our attention to certain provisions of chapter 99, Laws of 1983, relating to local government finance, and then requested our opinion on the following questions

             "1.        Does Sec. 2, Ch. 99, Laws of 1983, or any other law, presently require that every city ordinance which imposes or alters the rate of a sales tax or use tax imposed under RCW 82.14.030(2), be subject to the referendum procedure prescribed by that section?

             "2.        Does Sec. 3, Ch. 99, Laws of 1983, or any other law, presently require that every city ordinance which imposes or alters the rate of a real estate excise tax imposed under RCW 82.46.010(2), be subject to the referendum procedure prescribed by that section?

             [Orig. Op. Page 2]

            "3.        Alternatively, do Sections 2 and 3, Ch. 99, Laws of 1983 apply only to jurisdictions wherein the referendum power exists by virtue of some other law?"

             For the reasons set forth in our analysis we answer your first two questions in the affirmative and your third question in the negative.

ANALYSIS

            By way of background there are three distinct municipal excise taxes which are here involved.  They are:

             (1)  The additional local sales and use tax authorized by RCW 82.14.030(2)

            (2) The additional local real estate excise tax provided for by RCW 82.46.010(2); and

            (3) Any city or town business and occupation tax initially imposed, or increased, after the effective date of chapter 49, Laws of 1982, 1st Ex. Sess.

             Under that 1982 enactment the respective ordinances imposing, or increasing, the particular taxes were stated to be subject to voter review through aninitiative (not referendum) procedure.  Accord AGO 1982 No. 13; and see, § 19 (initiative on increased local sales and use tax), § 12 (additional real estate excise tax) and § 9 (ordinance imposing business and occupation tax or increasing rate) of chapter 49,supra.  However, by § 8, chapter 99, Laws of 1983, supra, all three of those sections of the 1982 act were repealed and, in essence, replaced by § § 2, 3 and 6 of that later act.  First, by § 2, chapter 99,supra, the legislature dealt with the question of voter review of an additional local sales or use tax imposed pursuant to RCW 82.14.030(2) by providing that:

             "Any referendum petition to repeal a county or city ordinance imposing a tax or altering the rate of the tax authorized  under RCW 82.14.030(2) shall be filed with a filing officer, as identified in the ordinance, within seven days of passage of the ordinance.  Within ten days, the filing officer shall confer with the petitioner concerning form and style of the petition, issue an identification number for the petition, and write a [Orig. Op. Page 3] ballot title for the measure.   The ballot title shall be posed as a question so that an affirmative answer to the question and an affirmative vote on the measure results in the tax or tax rate increase being imposed and a negative answer to the question and a negative vote on the measure results in the tax or tax rate increase not being imposed.  The petitioner shall be notified of the identification number and ballot title within this ten‑day period.

             "After this notification, the petitioner shall have thirty days in which to secure on petition forms the signatures of not less than fifteen percent of the registered voters of the county for county measures, or not less than fifteen percent of the registered voters of the city for city measures, and to file the signed petitions with the filing officer.  Each petition form shall contain the ballot title and the full text of the measure to be referred.  The filing officer shall verify the sufficiency of the signatures on the petitions.  If sufficient valid signatures are property submitted, the filing officer shall submit the referendum measure to the  county or city voters at a general or special election held on one of the dates provided in RCW 29.13.010 as determined by the county legislative authority or city council, which election shall not take place later than one hundred twenty days  after the signed petition has been filed with the filing officer.

             "After the effective date of this act, the referendum procedure provided in this section shall be the exclusive method for subjecting any county or city ordinance imposing a tax or altering the rate under RCW 82.14.030(2) to a referendum vote.

             "Any county or city tax authorized under RCW 82.14.030(2) that has been imposed prior to the effective date of this act is not subject to the referendum procedure provided for in this section."

             Next, by § 3 of chapter 99, supra, the legislature enacted an identical provision with respect to the use of a referendum to overturn a county or city ordinance imposing an additional real estate excise tax under RCW 82.46.020(2),supra.  But then, in § 6 of that act relative to a new or increased municipal business and occupation tax, it followed a somewhat different format by [Orig. Op. Page 4] providing that:

             "Every city and town first imposing a business and occupation tax or increasing the rate of the tax after the effective date of this section shall provide for a referendum procedure to apply to an ordinance imposing the tax or increasing the rate of the tax.  This referendum procedure shall specify that a referendum petition may be filed within seven days of passage of the ordinance with a filing officer, as identified in the ordinance.  Within ten days, the filing officer shall confer with the petitioner concerning form and style of the petition, issue the petition an identification number, and secure an accurate, concise, and positive ballot title from the designated local official.  The petitioner shall have thirty days in which to secure the signatures of not less than fifteen percent of the registered voters of the city, as of the last municipal general election, upon petition forms which contain the ballot title and the full text of the measure to be referred.  The filing officer shall verify the sufficiency of the signatures on the petition and, if sufficient valid signatures are properly submitted, shall certify the referendum measure to the next election ballot within the city or at a special election ballot as provided pursuant to RCW 35.17.260(2).

             "This referendum procedure shall be exclusive in all instances for any city ordinance imposing a business and occupation tax or increasing the rate of the tax and shall supersede the procedures provided under chapters 35.17 and 35A.11 RCW and all other statutory or charter provisions for initiative or referendum which might otherwise apply."

             Clearly, this latter provision applies to every city or town regardless of whether or not it is also governed by any other statutory referendum process.  The basic thrust of your request, however, relates to the possibility of a more limited result in the case of § § 2 and 3 of chapter 99,supra.  Specifically, you have suggested limiting the applicability of those two sections of the new law to such cities or towns as are independently subject to a referendum procedure, under other statutes, with respect to their ordinances imposing or increasing taxes; i.e., according to your letter, a result which would reach only first class cities and [Orig. Op. Page 5] cities having a commission form of government (see, RCW 35.32.200 and RCW 35.17.240, et seg.) since, under RCW 35A.11.090(7), the referendum power which is available to voters in code cities does not extend to ordinances levying taxes and there are no referendum provisions at all in the case of second, third or fourth class cities, generally.

             We do not believe that such a limited reading of § § 2 and 3,supra, is justified.  We therefore answer your first two questions, as above stated, in the affirmative and your third question in the negative.1/

             We do not know why the legislature worded § § 2 and 3, on the one hand, and § 6, on the other, differently.  Be that as it may, the only real difference we see between the two involves the source of the referendum procedure.   In the case of a referendum on a local business and occupation tax (or tax increase) the referendum procedure is to be spelled out in a related local ordinance, the terms of which are to be drafted in accordance with state law.  Conversely, in the case of a referendum on an additional (local) sales and use tax or real estate excise tax, the applicable referendum procedures are spelled out in the state law itself.

             That simple distinction between the respective situations, however, seems hardly sufficient to justify a conclusion that the legislature, which must be presumed to have been aware of its own prior acts,2/ intended to make the particular local tax increases to which § § 2 and 3 apply subject to referendum only in first‑class cities or cities operating under a commission form of government.  Indeed, out of a total of nearly 270 incorporated cities and towns which now exist in this state, there are presently less than 15 which would be covered by either § 2 or § 3,supra, under that approach.  We think it far more reasonable, therefore, to believe that the legislature intended, by its enactment of § § 2 and 3, supra, to establish a referendum procedure in all classes of cities and towns for the limited purpose, however, of reviewing only those ordinances imposing the additional excise taxes [Orig. Op. Page 6] authorized by RCW 82.14.030(2) and RCW 82.46.010(2), as the case may be.

              We trust that the foregoing will be of assistance to you.

 Very truly yours,
KENNETH O. EIKENBERRY
Attorney General 

PHILIP H. AUSTIN
Senior Deputy Attorney General 

                                                          ***   FOOTNOTES   ***

 1/ The specific source of the requirement is §§ 2 and 3 of chapter 99, supra, itself--and not some other law.  Those two sections apply to all ordinances enacted after the effective date of the law, April 22, 1983.

 2/ Accord, Baker v. Baker, TIAA-CREF, 91 Wn.2d 482, 588 P.2d 1164 (1979) and cases cited therein.