H-3943              _______________________________________________

                                                   HOUSE BILL NO. 1886

                        _______________________________________________

State of Washington                              49th Legislature                              1986 Regular Session

By Representative Dellwo

Read first time 1/24/86 and referred to Committee on Judiciary.

AN ACT Relating to the board of tax appeals; amending RCW 82.03.020, 82.03.030, 82.03.040, 82.03.090, 82.03.100, 82.03.110, 82.03.130, 82.03.140, 82.03.150, 82.03.190, and 82.01.090; adding new sections to chapter 82.03 RCW; creating new sections; and repealing RCW 82.03.050, 82.03.060, 82.03.070, 82.03.080, 82.03.120, 82.03.160, and 82.03.170.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 31, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.020 are each amended to read as follows:

          The board of tax appeals, hereinafter in this ((1967 amendatory act)) chapter referred to as the board, shall ((consist of three members)) be under the direction of a chief administrative law judge qualified by experience and training in the field of state and local taxation, and, as a condition of appointment, admitted to practice law in the state of Washington.  The chief administrative law judge shall be appointed by the governor with the advice and consent of the senate((, and no more than two of whom at the time of appointment or during their terms shall be members of the same political party)).

        Sec. 2.  Section 32, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.030 are each amended to read as follows:

          ((Members of the board)) The chief administrative law judge first appointed to the office shall serve such term, not to exceed six years, as may be determined by the governor at the time of appointment.  Thereafter the chief administrative law judge shall be appointed for a term of six years and until ((their successors are)) his or her successor is appointed and ((have)) has qualified.  In case of a vacancy, it shall be filled by appointment by the governor with the advice and consent of the senate for the unexpired portion of the term in which said vacancy occurs((:  PROVIDED, That the terms of the first three members of the board shall be staggered so that one member shall be appointed to serve until March 1, 1969, one member until March 1, 1971, and one member until March 1, 1973)).

        Sec. 3.  Section 33, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.040 are each amended to read as follows:

          ((Any member of the board may be removed for inefficiency, malfeasance or misfeasance in office, upon specific written charges filed by the governor, who shall transmit such written charges to the member accused and to the chief justice of the supreme court.  The chief justice shall thereupon designate a tribunal composed of three judges of the superior court to hear and adjudicate the charges.   Such tribunal shall fix the time of the hearing, which shall be public, and the procedure for the hearing, and the decision of such tribunal shall be final and not subject to review by the supreme court.  Removal of any member of the board by the tribunal shall disqualify such member for reappointment.)) The chief administrative law judge may be removed for cause arising from inefficiency, malfeasance, or misfeasance in office.  Removal for cause shall disqualify the person for reappointment to that position.

NEW SECTION. Sec. 4.  A new section is added to chapter 82.03 RCW to read as follows:

          (1) The chief administrative law judge shall appoint administrative law judges to fulfill the duties prescribed in this chapter.  All administrative law judges shall have a demonstrated knowledge of taxation, property valuation, and administrative law and procedures.  The chief administrative law judge may establish different levels of administrative law judge positions.

          (2) The chief administrative law judge may appoint such clerical and other specialized, professional, or technical personnel as may be necessary to carry on the work of this chapter.

          (3) All administrative law judges and employees of the office, except the chief administrative law judge, are subject to chapter 41.06 RCW.

          (4) The chief administrative law judge may adopt rules for the operation of the board and in furtherance of this chapter in accordance with chapter 34.04 RCW.

          (5) Administrative law judges must be admitted to practice law in the state of Washington at the time of appointment.

NEW SECTION. Sec. 5.  A new section is added to chapter 82.03 RCW to read as follows:

          The chief administrative law judge shall be paid a salary fixed by the governor after recommendation of the state committee on salaries.  The salaries of the administrative law judges appointed under section 4 of this act shall be determined by the chief administrative law judge after recommendation of the state committee on salaries.

        Sec. 6.  Section 38, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.090 are each amended to read as follows:

          The principal office of the board shall be at the state capital, but ((it may sit or hold)) hearings may be conducted at any other place in the state.  ((A majority of the board shall constitute a quorum for making orders or decisions, promulgating rules and regulations necessary for the conduct of its powers and duties, or transacting other official business, and may act though one position on the board be vacant.  One or more members may hold hearings and take testimony to be reported for action by the board when authorized by rule or order of the board.  The board shall perform all the powers and duties specified in this chapter or as otherwise provided by law.)) Hearings shall be conducted with the greatest degree of informality consistent with fairness and the nature of the proceedings.  The chief administrative law judge may establish a method or methods of making a record of all hearings and may employ or contract in order to implement the method or methods.  The chief administrative law judge shall assign administrative law judges to preside at hearings.  Any party to a hearing being conducted under this chapter may file with the chief administrative law judge a motion of prejudice, with supporting affidavit, against the administrative law judge assigned to preside at the hearing.  The first such motion filed by any party shall be granted as a matter of right.

NEW SECTION. Sec. 7.  A new section is added to chapter 82.03 RCW to read as follows:

          All hearings shall be conducted in conformance with the administrative procedure act, chapter 34.04 RCW.  The chief administrative law judge may adopt rules governing the procedural conduct of the hearings.  Where the provisions of chapter 34.04 RCW and the provisions of this chapter conflict, the provisions of this chapter shall control.

        Sec. 8.  Section 39, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.100 are each amended to read as follows:

          The ((board)) administrative law judge presiding at a hearing shall make ((findings of fact and prepare)) a written decision, setting forth pertinent findings of fact and conclusions of law, in each case decided by ((it, and)) him or her.  Such findings and decision shall be effective upon being signed by ((two or more members of the board)) the administrative law judge and upon being issued by the chief administrative law judge.  All decisions shall be filed at the board's principal office, and shall be open to public inspection at all reasonable times.

        Sec. 9.  Section 40, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.110 are each amended to read as follows:

          The ((board)) chief administrative law judge shall either publish at ((its)) the board's expense or make arrangements with a publishing firm for the publication of those of its ((findings and)) decisions which are of general public interest, in such form as to assure reasonable distribution thereof.

        Sec. 10.  Section 42, chapter 26, Laws of 1967 ex. sess. as last amended by section 6, chapter 46, Laws of 1982 1st ex. sess. and RCW 82.03.130 are each amended to read as follows:

          The board shall have jurisdiction to decide the following types of appeals:

          (1) Appeals taken pursuant to RCW 82.03.190.

          (2) Appeals from a county board of equalization pursuant to RCW 84.08.130.

          (3) Appeals by an assessor or landowner from an order of the director of revenue made pursuant to RCW 84.08.010 and 84.08.060, the right to such an appeal being hereby established.

          (4) Appeals by an assessor or owner of an intercounty public utility or private car company from determinations by the director of revenue of equalized assessed valuation of property and the apportionment thereof to a county made pursuant to chapter 84.12 RCW and 84.16 RCW, the right to such appeal being hereby established.

          (5) Appeals by an assessor, landowner, or owner of an intercounty public utility or private car company from a determination of any county indicated ratio for such county compiled by the department of revenue pursuant to RCW 84.48.075:  PROVIDED, That

          (a) Said appeal be filed after review of the ratio under RCW 84.48.075(3) and not later than fifteen days after the date of certification as required by RCW 84.48.075; and

          (b) The hearing before the ((board)) administrative law judge shall be expeditiously held in accordance with rules prescribed by the ((board)) chief administrative law judge and shall take precedence over all matters of the same character.

        Sec. 11.  Section 43, chapter 26, Laws of 1967 ex. sess. as amended by section 8, chapter 46, Laws of 1982 1st ex. sess. and RCW 82.03.140 are each amended to read as follows:

          In all appeals over which the board has jurisdiction under RCW 82.03.130, a party taking an appeal may elect either a formal or an informal hearing, such election to be made according to rules of practice and procedure to be promulgated by the ((board)) chief administrative law judge:  PROVIDED, HOWEVER, That nothing herein shall be construed to modify the provisions of RCW 82.03.190:  AND PROVIDED FURTHER, That upon an appeal under RCW 82.03.130(5), the director of revenue may, within ten days from the date of its receipt of the notice of appeal, file with the ((clerk of the board)) chief administrative law judge notice of its intention that the hearing be held pursuant to chapter 34.04 RCW as a formal hearing.  In the event that appeals are taken from the same decision, order, or determination, as the case may be, by different parties and only one of such parties elects a formal hearing, a formal hearing shall be granted.

        Sec. 12.  Section 44, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.150 are each amended to read as follows:

          In all appeals ((involving an informal hearing)), the board shall have all powers relating to administration of oaths, issuance of subpoenas, and taking of depositions as are granted to agencies by chapter 34.04 RCW.  The board shall also have all powers granted the department of revenue pursuant to RCW 82.32.110.  In the case of appeals within the scope of RCW 82.03.130(2) the ((board or any member thereof)) chief administrative law judge may obtain such assistance, including the making of field investigations, from the staff of the director of revenue as the ((board or any member thereof)) chief administrative law judge may deem necessary or appropriate.

        Sec. 13.  Section 48, chapter 26, Laws of 1967 ex. sess. as last amended by section 211, chapter 3, Laws of 1983 and RCW 82.03.190 are each amended to read as follows:

          Any person having received notice of a denial of a petition or a notice of determination made under RCW 82.32.160 or 82.32.170 may appeal, within thirty days from the date of the notice of such denial or determination, to the board of tax appeals.  In the notice of appeal the taxpayer shall set forth the amount of the tax which he contends should be reduced or refunded and the reasons for such reduction or refund, in accordance with rules of practice and procedure prescribed by the board.  The appeal shall be perfected by serving a copy of the notice of appeal upon the department of revenue within the time specified herein and by filing the original thereof with proof of service with the ((clerk of the board)) chief administrative law judge:  PROVIDED, HOWEVER, That if the notice of appeal relates to an application made to the department of revenue under chapter 82.34 RCW, the taxpayer shall set forth the amount to which the taxpayer claims the credit or exemption should apply, and the grounds for such contention, in accordance with rules of practice and procedure prescribed by the board.  If the taxpayer intends that the hearing before the board be held pursuant to the administrative procedure act (chapter 34.04 RCW) as a formal hearing, the notice of appeal shall also so state.  In the event that the notice of appeal does not so state, the department may, within ten days from the date of its receipt of the notice of appeal, file with the ((clerk of the board)) chief administrative law judge notice of its intention that the hearing be held as a formal hearing pursuant to the administrative procedure act.

        Sec. 14.  Section 6, chapter 26, Laws of 1967 ex. sess. and RCW 82.01.090 are each amended to read as follows:

          Except for the powers and duties devolved upon the board of tax appeals ((by the provisions of RCW 82.03.010 through 82.03.190)) under chapter 82.03 RCW, the director of revenue shall, after July 1, 1967, exercise those powers, duties and functions theretofore vested in the tax commission of the state of Washington, including all powers, duties and functions of the commission acting as the commission or as the state board of equalization or in any other capacity.

NEW SECTION. Sec. 15.    Members of the board of tax appeals appointed to office prior to January 1, 1986, and serving terms of appointment that had not expired by December 31, 1985, who do not meet the criteria for appointment as either the chief administrative law judge or an administrative law judge as set forth in RCW 82.03.020 and section 4 of this act may nonetheless continue in the employ as an administrative law judge, to perform the duties of such position as established by the chief administrative law judge, and to receive the salary in effect for a regular member of the board on December 31, 1985, until the date of expiration of the term to which most recently appointed as a member of the board, and not beyond.

NEW SECTION. Sec. 16.    All rules adopted by the board, and in effect on the effective date of this act, shall remain in full force and effect until superseded.

NEW SECTION. Sec. 17.    This act shall not affect the validity of any rule, regulation, action, decision, or proceeding promulgated, issued, or held prior to the effective date of this act.

NEW SECTION. Sec. 18.  The following acts or parts of acts are each repealed:

                   (1) Section 34, chapter 26, Laws of 1967 ex. sess., section 2, chapter 65, Laws of 1970 ex. sess., section 176, chapter 34, Laws of 1975-'76 2nd ex. sess. and RCW 82.03.050;

          (2) Section 35, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.060;

          (3) Section 36, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.070;

          (4) Section 37, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.080;

          (5) Section 41, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.120;

          (6) Section 45, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.160; and

          (7) Section 46, chapter 26, Laws of 1967 ex. sess. and RCW 82.03.170.