HB 2777 — Improving and updating administrative provisions related to the board of tax appeals.

H-3740.2HOUSEENGROSSED HOUSE BILL 2777State of Washington65th Legislature2018 Regular SessionBy Representative JinkinsRead first time 01/16/18.

amending RCW 82.03.020, 82.03.030, 82.03.040, 82.03.050, 82.03.060, 82.03.070, 82.03.080, 82.03.090, 82.03.100, 82.03.110, 82.03.120, 82.03.140, 82.03.150, 82.03.160, 82.03.170, 34.05.518, and 82.03.170;34.05.522;

adding a new sectionsections to chapter 82.03 RCW;

An agreement reached by the parties during the mediation must be memorialized in writing and signed by the parties before the board may enter an order closing the appeal.(c) All mediation discussions, statements of parties, and materials provided as part of the mediation are confidential, must be destroyed or returned to the parties after mediation is complete, and may not be used for any other purpose or in any other proceeding.---proceeding.Sec. 18.  RCW END34.05.518 ---and 2010 c 211 s 15 are each amended to read as follows:(1) The final decision of an administrative agency in an adjudicative proceeding under this chapter may((, except as otherwise provided in chapter 43.21L RCW,)) be directly reviewed by the court of appeals ((either)):(a) Upon certification by the superior court pursuant to this section ((or));(b) If the final decision is from an environmental board as defined in subsection (((3))) (4) of this section, upon acceptance by the court of appeals after a certificate of appealability has been filed by the environmental board that rendered the final decision;

or(c) If the final decision is from the board of tax appeals, upon acceptance by the court of appeals after a certificate of appealability has been filed by the board of tax appeals.(2) For direct review upon certification by the superior court, an application for direct review must be filed with the superior court within thirty days of the filing of the petition for review in superior court.

The superior court may certify a case for direct review only if the judicial review is limited to the record of the agency proceeding and the court finds that:(a) Fundamental and urgent issues affecting the future administrative process or the public interest are involved which require a prompt determination;(b) Delay in obtaining a final and prompt determination of such issues would be detrimental to any party or the public interest;(c) An appeal to the court of appeals would be likely regardless of the determination in superior court;

and(d) The appellate court's determination in the proceeding would have significant precedential value.(3) Procedures for certification ((shall)) under this section must be established by court rule.(((3))) (4)(a) For the purposes of direct review of final decisions of environmental boards, environmental boards include those boards identified in RCW 43.21B.005 and the growth management hearings board as identified in RCW 36.70A.250.(b) An environmental board may issue a certificate of appealability if it finds that delay in obtaining a final and prompt determination of the issues would be detrimental to any party or the public interest and either:(i) Fundamental and urgent statewide or regional issues are raised;

or(ii) The proceeding is likely to have significant precedential value.(((4))) (5) The environmental board ((shall)) must state in the certificate of appealability which criteria it applied, explain how that criteria was met, and file with the certificate a copy of the final decision.(((5))) (6) For purposes of direct review of final decisions of the board of tax appeals, the board of tax appeals must issue a certificate of appealability, unless it finds that:(a) The proceeding is unlikely to have significant precedential value;

or(b) Direct review by the court of appeals would be detrimental to any party or the public interest.(7) If the board of tax appeals denies a request for a certificate of appealability, it must state in its denial which criteria it applied and explain how that criteria supported its decision to deny the request.(8) For an appellate court to accept direct review of a final decision of an environmental board, it ((shall)) must consider the same criteria outlined in subsection (((3))) (4) of this section((, except as otherwise provided in chapter 43.21L RCW)).(((6))) (9) For an appellate court to accept direct review of a final decision of the board of tax appeals, it must consider the same criteria outlined in subsection (6) of this section.(10) The procedures for direct review of final decisions of environmental boards or the board of tax appeals include:(a) Within thirty days after filing the petition for review with the superior court, a party may file an application for direct review with the superior court and serve the board of tax appeals or the appropriate environmental board and all parties of record.

The application ((shall)) must request the board of tax appeals or the environmental board to file a certificate of appealability.(b) If an issue on review is the jurisdiction of the environmental board or the board of tax appeals, the board with jurisdiction may file an application for direct review on that issue.(c) The environmental board ((shall have)) or the board of tax appeals has thirty days to grant or deny the request for a certificate of appealability and its decision ((shall)) must be filed with the superior court and served on all parties of record.(d) If a certificate of appealability is issued, the parties ((shall)) have fifteen days from the date of service to file a notice of discretionary review in the superior court, and the notice ((shall)) must include a copy of the certificate of appealability and a copy of the final decision.(e) If the appellate court accepts review, the certificate of appealability ((shall)) must be transmitted to the court of appeals as part of the certified record.(f) If a certificate of appealability is denied, review ((shall)) must be by the superior court.

The superior court's decision may be appealed to the court of appeals.Sec. 19.  RCW 34.05.522 and 1995 c 382 s 6 are each amended to read as follows:The court of appeals may refuse to accept direct review of a case pursuant to RCW 34.05.518 if it finds that the case does not meet the applicable standard in RCW 34.05.518 (2) ((or (5))), (4), or (6).

Rules of Appellate Procedure 2.3 do not apply in this instance.

The refusal to accept such review is not subject to further appellate review, notwithstanding anything in Rule 13.3 of the Rules of Appellate Procedure to the contrary.NEW SECTION.  Sec. 20.  A new section is added to chapter 82.03 RCW to read as follows:(1) The board, by its order, may direct the department of revenue to hold in abeyance the collection of tax from any taxpayer or any group of taxpayers when a question bearing on their liability for tax hereunder is pending before the board.

The board may impose such conditions as may be deemed just and equitable and shall require the payment of interest at the rate of three-quarters of one percent of the amount of the tax for each thirty days or portion thereof from the date upon which such tax became due until the date of payment.(2) Interest imposed under this section shall be computed on a daily basis at the rate as computed under RCW 82.32.050(2).

The rate so computed shall be adjusted on the first day of January of each year.(3) The department of revenue must not impose a late payment penalty if the taxpayer pays the assessment within thirty days of:(a) The denial of a stay of collections by the board;

or(b) The expiration of an order staying the collection of such assessment.NEW SECTION.  Sec. 21.  A new section is added to chapter 82.03 RCW to read as follows:(1) When any assessment or additional assessment has been made, the taxpayer may obtain a stay of collection, under such circumstances and for such periods as the board may by general regulation provide, of the whole or any part thereof, by filing with the board a bond in an amount, not exceeding twice the amount on which stay is desired, and with sureties as the department deems necessary, conditioned for the payment of the amount of the assessments, collection of which is stayed by the bond, together with the interest thereon at the rate of one percent of the amount of such assessment for each thirty days or portion thereof from the date the bond is filed until the date of payment.(2) Interest imposed under this section shall be computed on a daily basis on the amount of tax at the rate as computed under RCW 82.32.050(2).

The rate so computed shall be adjusted on the first day of January of each year.NEW SECTION.  Sec. 22.  A new section is added to chapter 82.03 RCW to read as follows:(1) Except as otherwise specifically provided by statute, the board must award a qualified party that prevails in a formal hearing fees and other expenses, including reasonable attorneys' fees, unless the court finds that the department of revenue's or the board of equalization's action was substantially justified or that circumstances make an award unjust.

A qualified party shall be considered to have prevailed if the qualified party obtained relief on a significant issue that achieves some benefit that the qualified party sought.(2) The amount awarded a qualified party under subsection (1) of this section shall not exceed twenty-five thousand dollars.

The board, in its discretion, may reduce the amount to be awarded pursuant to subsection (1) of this section, or deny any award, to the extent that a qualified party during the course of the proceedings engaged in conduct that unduly or unreasonably protracted the final resolution of the matter in controversy.(3) Fees and other expenses awarded under this section must be paid by the board over which the party prevails from operating funds appropriated to the agency within sixty days.

The board shall report all payments to the office of financial management within five days of paying the fees and other expenses.

Fees and other expenses awarded by the board shall be subject to the provisions of chapter 39.76 RCW and shall be deemed payable on the date the board announces the award.(4) The following definitions apply to this section unless the context clearly indicates otherwise.(a) "Fees and other expenses" includes the reasonable expenses of expert witnesses, the reasonable cost of a study, analysis, engineering report, test, or project that is found by the court to be necessary for the preparation of the party's case, and reasonable attorneys' fees.

Reasonable attorneys' fees shall be based on the prevailing market rates for the kind and quality of services furnished, except that (i) no expert witness shall be compensated at a rate in excess of the highest rates of compensation for expert witnesses paid by the state of Washington, and (ii) attorneys' fees shall not be awarded in excess of one hundred fifty dollars per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.(b) "Qualified party" means (i) an individual whose net worth did not exceed one million dollars at the time the initial appeal petition was filed or (ii) a sole owner of an unincorporated business, or a partnership, corporation, association, or organization whose net worth did not exceed five million dollars at the time the initial appeal petition was filed, except that an organization described in section 501(c)(3) of the federal internal revenue code of 1954 as exempt from taxation under section 501(a) of the code and a cooperative association as defined in section 15(a) of the agricultural marketing act (12 U.S.C.

1141J(a)), may be a party regardless of the net worth of such organization or cooperative association.--- END ---