WSR 02-10-032

PROPOSED RULES

DEPARTMENT OF REVENUE


[ Filed April 24, 2002, 1:44 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 02-06-108.

Title of Rule: Amend sections WAC 458-53-030 Stratification of assessment rolls -- Real property, 458-53-050 Land use stratification, sales summary and abstract report, and 458-53-140 Personal property ratio study.

Repeal section WAC 458-53-090 Department generated sales studies.

Purpose: To provide information about the ratio study and ratio calculation to county assessors, their staff, and the public.

Statutory Authority for Adoption: RCW 84.08.010, 84.08.070, and 84.48.075.

Statute Being Implemented: RCW 84.48.075 and 84.48.080.

Summary: These rules set forth the processes to be used by the Department of Revenue and the counties in establishing the indicated real and personal property ratios for purposes of the state property tax levy and equalizing state assessed property.

Reasons Supporting Proposal: These rules are being revised to incorporate a recent legislative change (chapter 185, Laws of 2001) and to clarify and simplify the ratio process.

Name of Agency Personnel Responsible for Drafting: Mark Mullin, 1025 Union Avenue S.E., Suite #400, Olympia, WA, (360) 570-6112; Implementation and Enforcement: Sandy Guilfoil, 1025 Union Avenue S.E., Suite #200, Olympia, WA, (360) 570-5860.

Name of Proponent: Department of Revenue, governmental.

Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: No comments or recommendations are submitted.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: These rules provide important information for county assessors, their staff, and the general public regarding the processes to be used by the Department of Revenue and the counties in establishing the indicated real and personal property ratios for purposes of the state property tax levy and equalizing state assessed property.

WAC 458-53-030 explains the stratification process for real property for use in the ratio study and for ratio calculation. The rule provides a listing of land-use codes used in the stratification process. This rule needs to be updated to provide separate land-use codes for residential condominiums and other types of condominiums (e.g., commercial condominiums).

WAC 458-53-050 groups land-use codes into abstract categories. The rule needs to be updated to reflect the revisions that will be made to WAC 458-53-030.

WAC 458-53-090 provides information concerning sales studies generated by the Department of Revenue for those counties that are unable to provide the department with a computer generated sales study in accordance with WAC 458-53-100. This rule is being repealed, as the department no longer generates sales studies.

WAC 458-53-140 provides information about the personal property ratio study, including, among other things, the basis for a county's personal property ratio. This rule needs to be updated to reflect a change in the basis for a county's personal property ratio as a result of chapter 185, Laws of 2001.

Proposal Changes the Following Existing Rules: This is a change to WAC 458-53-030, 458-53-050, 458-53-090 and 458-53-140, as explained above.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The rule does not impose a responsibility or require a small business to perform something that is not already required by law.

RCW 34.05.328 does not apply to this rule adoption. These rules are interpretive rules as defined in RCW 34.05.328.

Hearing Location: Capital Plaza Building, 4th Floor, Large Conference Room, 1025 Union Avenue S.E., Olympia, WA, on June 6, 2002, at 9:30 a.m.

Assistance for Persons with Disabilities: Contact Sandy Davis no later than ten days before the hearing date, TTY 1-800-451-7985 or (360) 570-6175.

Submit Written Comments to: Mark Mullin, Department of Revenue, P.O. Box 47467, Olympia, Washington 98504-7467, fax (360) 664-0693, e-mail MarkM@dor.wa.gov, by June 6, 2002.

Date of Intended Adoption: June 13, 2002.

April 24, 2002

Alan R. Lynn, Rules Coordinator

Legislation and Policy Division

OTS-5613.1


AMENDATORY SECTION(Amending WSR 96-05-002, filed 2/8/96, effective 3/10/96)

WAC 458-53-030   Stratification of assessment rolls -- Real property.   (1) ((Stratification -- Uses for ratio study.)) Introduction. This rule explains the stratification process for real property. The stratification process is the grouping of real property within each county into homogeneous classifications based upon certain criteria in order to obtain representative samples. Stratification is used in determining the number of appraisals to be included in the ratio study and also for ratio calculation. The county's most current certified assessment rolls are used for stratification. Counties ((shall)) must stratify rolls using a land use code stratification system as prescribed by the department. (See RCW 36.21.100.)

(2) Stratification -- Parcel count and total value -- Exclusions. The stratification of the real property assessment rolls ((shall)) must include a parcel count and a total value of the taxable real property parcels in each stratum, excluding the following:

(a) ((Classified and)) Designated forest lands ((and timberland classified under chapter 84.34 RCW (see RCW 84.34.060))). (See chapter 84.33 RCW);

(b) ((State-owned game lands as defined in RCW 77.12.203(2);)) Timberland classified under chapter 84.34 RCW. (See RCW 84.34.060);

(c) Current use properties in those counties where a separate study is conducted pursuant to WAC 458-53-095(3); ((and))

(d) State assessed properties; and

(e) State-owned game lands as defined in RCW 77.12.203(2).

(3) Stratification -- By county. For the real property ratio study, the assessment roll ((shall)) must be stratified for individual counties according to land use categories and substratified by value classes as determined by the department. Stratification ((shall)) will be reviewed at least every other year by the department to determine if changes need to be made to improve sampling criteria. After the strata have been determined, the department ((shall)) will notify the counties of the strata limits, and each county ((shall)) must provide the department with the following, taken from the county's assessment rolls:

(a) A representative number of samples, as determined by the department, in each stratum, together with:

(i) The name and address of the taxpayer for each sample;

(ii) The land use code for each sample;

(iii) The assessed value for each sample; and

(iv) The actual number of samples;

(b) The total number of real property parcels in each stratum; and

(c) The total assessed value in each stratum.

(4) Counties to provide information timely. The stratification information described in subsection (3) of this ((section shall)) rule must be provided by the counties to the department in a timely manner to enable the department to certify the preliminary ratios in accordance with WAC 458-53-200(1). Failure to provide the information in a timely manner will result in the department using its best estimate of stratum values to calculate the real property ratio.

(5) Standard two-digit land use code. The following two-digit land use code ((shall)) will be used as the standard to identify the actual use of the land. Counties may elect to use a more detailed land use code system using additional digits, however, no county land use code system may use fewer than the standard two digits.

RESIDENTIAL
11 Household, single family units
12 Household, 2-4 units
13 Household, multi-units (5 or more)
14 Residential ((hotels - ))condominiums
15 Mobile home parks or courts
16 Hotels/motels
17 Institutional lodging
18 All other residential not elsewhere coded
19 Vacation and cabin

MANUFACTURING
21 Food and kindred products
22 Textile mill products
23 Apparel and other finished products made from fabrics, leather, and similar materials
24 Lumber and wood products (except furniture)
25 Furniture and fixtures
26 Paper and allied products
27 Printing and publishing
28 Chemicals
29 Petroleum refining and related industries
30 Rubber and miscellaneous plastic products
31 Leather and leather products
32 Stone, clay and glass products
33 Primary metal industries
34 Fabricated metal products
35 Professional scientific, and controlling instruments; photographic and optical goods; watches and clocks-manufacturing
36 Not presently assigned
37 Not presently assigned
38 Not presently assigned
39 Miscellaneous manufacturing

TRANSPORTATION, COMMUNICATION, AND UTILITIES
41 Railroad/transit transportation
42 Motor vehicle transportation
43 Aircraft transportation
44 Marine craft transportation
45 Highway and street right of way
46 Automobile parking
47 Communication
48 Utilities
49 Other transportation, communication, and utilities not classified elsewhere

TRADE
50 Condominiums - other than residential condominiums
51 Wholesale trade
52 Retail trade - building materials, hardware, and farm equipment
53 Retail trade - general merchandise
54 Retail trade - food
55 Retail trade - automotive, marine craft, aircraft, and accessories
56 Retail trade - apparel and accessories
57 Retail trade - furniture, home furnishings and equipment
58 Retail trade - eating and drinking
59 Other retail trade

SERVICES
61 Finance, insurance, and real estate services
62 Personal services
63 Business services
64 Repair services
65 Professional services
66 Contract construction services
67 Governmental services
68 Educational services
69 Miscellaneous services

CULTURAL, ENTERTAINMENT AND RECREATIONAL
71 Cultural activities and nature exhibitions
72 Public assembly
73 Amusements
74 Recreational activities
75 Resorts and group camps
76 Parks
77 Not presently assigned
78 Not presently assigned
79 Other cultural, entertainment, and recreational

RESOURCE PRODUCTION AND EXTRACTION
81 Agriculture (not classified under current use law)
82 Agriculture related activities
83 Agriculture classified under current use chapter 84.34 RCW
84 Fishing activities and related services
85 Mining activities and related services
86 Not presently assigned
87 ((Classified forest land chapter 84.33 RCW)) Not presently assigned
88 Designated forest land under chapter 84.33 RCW
89 Other resource production

UNDEVELOPED LAND AND WATER AREAS
91 Undeveloped land
92 Noncommercial forest
93 Water areas
94 Open space land classified under chapter 84.34 RCW
95 Timberland classified under chapter 84.34 RCW
96 Not presently assigned
97 Not presently assigned
98 Not presently assigned
99 Other undeveloped land

[Statutory Authority: RCW 84.08.010, 84.08.070 and 84.48.075. 96-05-002, 458-53-030, filed 2/8/96, effective 3/10/96. Statutory Authority: RCW 84.08.010 and 84.08.070. 91-01-008, 458-53-030, filed 12/6/90, effective 1/6/91. Statutory Authority: RCW 84.48.075 and 84.08.010(2). 89-09-021 (Order PT 89-5), 458-53-030, filed 4/12/89. Statutory Authority: RCW 84.48.075. 86-21-004 (Order PT 86-6), 458-53-030, filed 10/2/86; 84-14-039 (Order PT 84-2), 458-53-030, filed 6/29/84; 79-11-029 (Order PT 79-3), 458-53-030, filed 10/11/79. Formerly WAC 458-52-030.]

OTS-5614.1


AMENDATORY SECTION(Amending WSR 96-05-002, filed 2/8/96, effective 3/10/96)

WAC 458-53-050   Land use stratification, sales summary and abstract report.   Stratification of the assessment rolls, the annual sales summary, and the abstract report to the department for real property will be based on the following abstract categories:


Abstract Category Land Use Code
1. Single family residence 11, 14, 18, 19
2. Multiple family residence 12, 13((, 14))
3. Manufacturing 21 through 39
4.

Commercial 15, 16, 17, 41-49,

((51)) 50-59, 61-69, 71-79

5. Agricultural 81
6. Agricultural (current use law) 83
7. Forest lands (chapter 84.33 RCW) ((87,)) 88
8. Open space (current use law) 94
9. Timberland (current use law) 95
10. Other 82, 84, 85, 89, 91,92, 93, 96-99

[Statutory Authority: RCW 84.08.010, 84.08.070 and 84.48.075. 96-05-002, 458-53-050, filed 2/8/96, effective 3/10/96. Statutory Authority: RCW 84.48.075. 79-11-029 (Order PT 79-3), 458-53-050, filed 10/11/79. Formerly WAC 458-52-040.]

OTS-5615.1


AMENDATORY SECTION(Amending WSR 96-05-002, filed 2/8/96, effective 3/10/96)

WAC 458-53-140   Personal property ratio study.   (1) ((Random selection of accounts. The basis for a county's personal property ratio shall be accounts selected at random from the preceding year's assessment rolls at the January 1 value for the preceding year.)) Introduction. This rule provides information about the personal property ratio study, including the basis for a county's personal property ratio, the determination of strata for each county, and the effect of the discovery of omitted property on the ratio study.

(2) Basis for personal property ratio. The basis for a county's personal property ratio will be valuation data with respect to personal property from the three years preceding the current assessment year.

(3) Stratification of rolls. Determination of strata for each county ((shall)) will be made by the department to ensure the selection of a representative audit sample and will be reviewed periodically. After the strata have been determined, the department ((shall)) will notify the counties of the strata limits and each county ((shall)) must provide the department with the following, taken from the county's assessment rolls:

(a) A representative number of samples, as determined by the department, in each stratum, together with:

(i) The name and address of the taxpayer for each sample;

(ii) The assessed value for each sample; and

(iii) The actual number of samples;

(b) The total number of personal property accounts in each stratum; and

(c) The total assessed value in each stratum.

(((3))) (4) Omitted property. If the department discovers omitted property in a county, the results of the department's audit ((shall)) will be included in the ratio study.

[Statutory Authority: RCW 84.08.010, 84.08.070 and 84.48.075. 96-05-002, 458-53-140, filed 2/8/96, effective 3/10/96. Statutory Authority: RCW 84.48.075. 84-14-039 (Order PT 84-2), 458-53-140, filed 6/29/84; 79-11-029 (Order PT 79-3), 458-53-140, filed 10/11/79. Formerly WAC 458-52-080.]

Washington State Code Reviser's Office