State v. Board of Valuation, King County

• Decision Date: 14 September 1967
• Docket Number: No. 38911,38911
• Citation: 431 P.2d 715,72 Wn.2d 66
• Court: Washington Supreme Court
• Parties: The STATE of Washington, Appellant, v. BOARD OF VALUATION, KING COUNTY, Washington, Respondent.

Page 66

72 Wn.2d 66

431 P.2d 715

The STATE of Washington, Appellant, v. BOARD OF VALUATION, KING COUNTY, Washington, Respondent.

No. 38911.

Supreme Court of Washington, Department 2.

Sept. 14, 1967.

John J. O'Connell, Atty. Gen., James C. Hanken, J. R. Pritchard, Asst. Attys. Gen., Olympia, for appellant.

Charles O. Carroll, Pros. Atty., James E. Kennedy, Deputy Pros. Atty., William L. Paul, Jr., Seattle, for respondent.

WEAVER, Judge.

The Constitution of the State of Washington (Art. 15, §§ 1, 2) declares that the 'legislature shall provide for the appointment of a commission whose duty it shall be to locate and establish harbor lines in the navigable waters of all harbors, estuaries, bays and inlets of this state * * *.'

The area lying between the harbor line (as determined by the harbor commission) and the line of ordinary high water, wherever such area is within or in front of the corporate limits of a city or within one mile thereof on either side, is owned by the state in perpetuity. The area is reserved for landings, wharves, streets and other conveniences of navigation and commerce. The legislature is directed, however, to provide general laws for leasing the right to build and maintain wharves, docks and other structures in the area.

The legislature, by Laws of 1927, ch. 255 (RCW 79.01), passed the Public Lands Act. It contains a comprehensive procedure governing the leasing of harbor areas and tidelands belonging to the state.

RCW 79.01.516 provides that the rental shall be a fixed percentage during the term of such lease on the True and fair value in money of such harbor area determined from time to time by the County assessor as herein provided. (Italics ours.)

RCW 79.01.520 sets forth the method to be employed by the county assessor in determining the true and fair value of the harbor area property; further, it establishes a procedure for appeal from his valuation. The statute is so long that we attach it as Appendix 'A' to this opinion. In general, it provides that when there is an application to lease or re-lease a harbor area, the commissioner shall certify the description to the county assessor who shall determine 'the true and fair value in money * * * which true and fair value in money * * * shall be the value at which the property would be taken in payment of a just debt from a solvent debtor.'

If the applicant, the lessee, or The state is dissatisfied with the valuation as fixed by the assessor, there is a right of appeal to a 'valuation board' composed of the county commissioners, the county treasurer, and the county assessor.

In the instant matter, two state lessees applied for renewal of their leases. ¹ Disputing the assessor's valuation, they appealed to the 'valuation board' as provided in RCW 79.01.520. Counsel inform us that this is the first time such a 'valuation board' has been convened. Upon organization, it adopted rules of procedure to govern the contested hearing to be held before it.

At this point, the state of Washington, Department of Natural Resources, commenced this action against the 'valuation board' for a declaratory judgment, pursuant to RCW 34.04.070, to determine the validity of the rules of procedure it had adopted.

The nub of the state's theory is that the procedural rules adopted were, in some respects, contrary to the Administrative Procedure Act (RCW 34.04) and were not adopted pursuant thereto. Specifically, the state contends that rules are invalid because (1) no notice of the rules was filed with the office of code reviser, as required by RCW 34.04.020(3); ² (2) the rules have not been filed with the code reviser, as required by RCW 34.04.040(1); ³ and (3) the rules do not guarantee the right of cross-examination, as required by RCW 34.04.100(3). ⁴

Without expressing its reasons, the trial court dismissed the action upon defendant's motion for summary judgment. The state appeals.

In spite of the complexity of the factual background, the solution of this appeal pivots on whether the King County Board of Valuation (King County Leased-Tide Lands Review Board) is a State agency or a County agency. If it is a state agency, it must conform to the Administrative Procedure Act (RCW 34.04); if it is not a state agency, it is not subject to the act.

RCW 34.04.010 defines 'agency' as:

any state board, commission, department, or officer, authorized by law to make rules or to adjudicate contested cases, except those in the legislative or judicial branches.

'Rule' is defined in the same section of the statute as:

every regulation, standard, or statement of policy or interpretation of general application and future effect, including the amendment or repeal thereof, adopted by an agency, whether with or without prior hearing, to implement or make specific the law enforced or administered by it or to govern its organization or procedure, but does not include regulations which concern only the internal management of the agency and do not directly affect the rights of or procedures available to the public.

The same section of the statute defines 'contested case' as:

a proceeding before an agency in which the legal rights, duties, or provileges of specific parties are required by law or constitutional right to be determined after an agency hearing.

It is beyond dispute that the current matters before the 'valuation board' are contested cases within the statutory definition.

We conclude that the 'valuation board' is a state agency and not a county agency. The official county position that each member of the 'valuation board' holds in county government does not determine the nature of the board. It is the function which the board performs that determines its nature. The function is entirely state, not county. In short, there is nothing that the assessor does, or that the 'valuation board' does that is for a county purpose. The assessor fixes a valuation for the state in a manner different from his statutory and constitutional duties for the county. RCW 79.01.520 (Appendix 'A') requires that he 'keep a record of such valuation Separate from his records of assessments for taxation purpose.' (Italics ours.) This work is all done for a state purpose. Once the value of the property is determined, either by the county assessor or by the 'valuation board,' the rental is paid to the state, not to the county. The administration of harbor areas is a function of the state, not of a county.

Although the facts are different, this court, in State ex rel. Lopas v. Shagren, 91 Wash. 48, 157 P. 31 (1916), has already determined the proper method of evaluating the function of an agency when it said:

The next inquiry is whether the functions to be performed by the county game commissions and the county game wardens are county functions. If the functions of these offices relate exclusively to the local concerns of particular counties, then they are county offices, notwithstanding the Legislature may have entertained a contrary intention. But if the functions of the offices created by the act concern the state at large, or the general public, although exercised within definite territorial limits, they are not county offices.

As a state agency, the 'valuation board' is required to adopt rules pursuant to the Administrative Procedure Act.

We are cognizant of the fact that a 'valuation board' may be called into existence in any county having state-owned harbor areas within its boundaries. It is salutary, for the parties involved and for practitioners before the boards, that each board adopt rules within the ambit of the Administrative Procedure Act and that the rules be filed with the code reviser and published in the Washington Administrative Code.

The judgment of dismissal is...