WSR 01-24-030

PERMANENT RULES

DEPARTMENT OF REVENUE


[ Filed November 27, 2001, 3:31 p.m. ]

Date of Adoption: November 27, 2001.

Purpose: These rules explain the terms used in the current use or open space taxation program, codified as chapter 84.34 RCW. The rules describe the procedures used to withdraw or remove land from current use classification, to reclassify land into a different current use classification, and the duties of county auditors and treasurers relative to classified current use land.

Citation of Existing Rules Affected by this Order: Amending WAC 458-30-200 Definitions, 458-30-275 Continuing classification upon sale or transfer of ownership of classified land -- Actions of landowner and county officials to be taken prior to recording a conveyance of classified land, 458-30-285 Withdrawal from classification, 458-30-295 Removal of classification, 458-30-300 Additional tax -- Withdrawal or removal from classification, 458-30-305 Due date of additional tax, ((applicable)) interest, and penalty upon withdrawal or removal, 458-30-310 County recording authority -- County financial authority -- Duties, and 458-30-325 Transfers between classifications -- Application for reclassification; and repealing WAC 458-30-315 County financial authority -- Duties and 458-30-350 Reclassification of lands classified under chapter 84.34 RCW prior to 1973.

Statutory Authority for Adoption: RCW 84.34.141.

Adopted under notice filed as WSR 01-18-093 on September 5, 2001.

Changes Other than Editing from Proposed to Adopted Version: WAC 458-30-200: Subsections (1) and (2) were rewritten to clearly state that the definitions provided in the rule apply only to land classified under chapter 84.34 RCW, Open Space Taxation Act.

WAC 458-30-295: Some of the information provided in subsection (3) of the proposed rule, titled "Circumstances that cause removal of land from classification" was split into a subsection (4), titled "Procedure when an assessor discovers a change in use." The subsequent subsections were renumbered accordingly.

Subsection (3)(h)(iv) of the proposed rule (now subsection (4)(a)) explained that an owner must respond to an assessor's inquiry about the use of classified land no later than thirty calendar days after the inquiry was mailed or given to the owner. This language was revised to clarify that the owner must respond no later than thirty calendar days following the date the inquiry was postmarked.

A new subsection (subsection (5)) was added to explain the procedure for the partial removal of classified land.

WAC 458-30-300: Subsection (2) discusses the duties of county assessors and treasurers with respect to the removal and notice processes. This subsection has been rewritten to match the explanation of the duties explained in subsection (4) of WAC 458-30-295.

Subsection (5) identifies the circumstances under which additional tax, interest, or penalty is not imposed when land is withdrawn or removed from classification. Subsection (5)(d) explains that one of the exceptions is when land is withdrawn or removed from classification due to an official action by the state, county, or city under certain ordinances or acts. The language in the proposed rule inadvertently misnamed the two acts. "Shoreline Protection Act" has been changed to "Shoreline Management Act" and "Environmental Protection Act" has been changed to "Environmental Policy Act."

Additional language has been added to subsection (5)(m) and (7) to clarify that reclassifications are done at the request of the landowner.

Editorial changes were also made to WAC 458-30-200, 458-30-295, 458-30-300, 458-30-305, and 458-30-310.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 2, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 8, Repealed 2.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 8, Repealed 2.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 8, Repealed 2.
Effective Date of Rule: Thirty-one days after filing.

November 27, 2001

Russell W. Brubaker

Assistant Director

Legislation and Policy Division

OTS-3992.4


AMENDATORY SECTION(Amending WSR 95-21-002, filed 10/4/95, effective 11/4/95)

WAC 458-30-200   Definitions.   (1) Introduction. This ((section)) rule provides definitions for the terms used ((throughout chapter 458-30 WAC)) in conjunction with land classified under the Open Space Taxation Act, codified as chapter 84.34 RCW. The terms listed in this ((section)) rule are intended to act in concert with each other as appropriate((, and with other definitions as they appear in the several sections of this chapter)).

(2) Definitions. For purposes of ((chapter 458-30 WAC)) land classified under chapter 84.34 RCW, the following definitions apply:

(a) "Additional tax" means the ((tax)) additional property taxes that will be collected when classification is withdrawn or removed from land ((that is)) classified ((according to the provisions of)) under chapter 84.34 RCW.

(b) "Affidavit" means the real estate excise tax affidavit required by chapter 82.45 RCW and chapter 458-61 WAC. ((See WAC 458-30-275 for a more detailed definition.)) The affidavit will be prescribed by the department and furnished to county treasurers. This form is used by landowners to report sales or transfers of classified land. The owner or transferor and the purchaser or transferee, or agents of each, must sign the affidavit under penalty of perjury.

(c) "Agreement" means an agreement executed between an owner and the granting authority regarding the classification of land ((in accordance with)) as either open space or timber land under chapter 84.34 RCW.

(d) "Applicant" means the owner who submits an application for classification of land ((in accordance with)) under chapter 84.34 RCW.

(e) "Application" means an application for classification of land ((in accordance with)) under chapter 84.34 RCW.

(f) "Approval" means a determination by the granting authority that ((the)) land qualifies for classification under chapter 84.34 RCW.

(g) "Appurtenance" refers to something used with, and related to or dependent upon another thing; that is, something that belongs to something else, an adjunct. The thing appurtenant is strictly necessary and essential to the proper use and enjoyment of the land, as well as useful or necessary for carrying out the purposes for which the land was classified under chapter 84.34 RCW.

(i) In terms of farm and agricultural land, an appurtenance is something used for a particular sort of farm and ((the thing)) is widely and routinely used in the operation of the commercial agricultural enterprise.

(ii) For example, an appurtenance may be an outhouse, barn, or tool shed attached to or adjoining a dwelling or it may be equipment used for a particular purpose or task, such as tools, instruments, or ((clothing)) machinery.

(h) "Aquaculture" means the growing and harvesting of marine or fresh water flora or fauna in a soil or water medium for commercial agricultural ((purposes)) activities.

(i) "Assessor" means the county assessor or any agency or person who is authorized to act on behalf of the assessor.

(j) "Assessment year" means the year ((when)) in which the property is listed and valued by the assessor and precedes the year ((when)) in which the ((tax is)) taxes on the property are due and payable.

(k) "Change in use" means a direct action taken by an owner that actually changes the use of, or has started changing the use of, classified land to a use that is not in compliance with the conditions of the agreement executed between the owner and the granting authority or to a use that is otherwise not in compliance with the provisions of chapter 84.34 RCW (see WAC 458-30-295).

(l) "Classified land" means a parcel(s) of land that has been approved by the appropriate granting authority for taxation under chapter 84.34 RCW.

(m) "Commercial agricultural ((purposes)) activities" means the use of land on a continuous and regular basis, prior to and subsequent to application for classification, that demonstrates that the owner or lessee intends to obtain through lawful means, a monetary profit from cash income received by:

(i) Raising, harvesting, and selling lawful crops;

(ii) Feeding, breeding, managing, and selling of livestock, poultry, fur-bearing animals, or honey bees, or any products thereof;

(iii) Dairying or selling of dairy products;

(iv) Animal husbandry;

(v) Aquaculture;

(vi) Horticulture;

(vii) Participating in a government-funded crop reduction or acreage set-aside program; or

(viii) Cultivating Christmas trees or short-rotation hardwoods on land that has been prepared by intensive cultivation and tilling, such as by plowing or turning over the soil, and on which all unwanted plant growth is controlled continuously for the exclusive purpose of ((raising)) growing such trees.

(n) "Contiguous" means land that adjoins other land ((that is)) owned by the same owner or held under the same ownership. Land that is an integral part of a farming operation is considered contiguous even though the land may be separated by a public road, railroad, right of way, or waterway.

(o) "County financial authority" and "financial authority" mean the ((county)) treasurer or any agency or person charged with the responsibility of billing and collecting property taxes.

(p) "County legislative authority" means the county commission, council, or other ((county)) legislative body.

(q) "County recording authority" means the ((county)) auditor or any agency or person charged with the recording of documents.

(r) "Current" and "currently" means as of the date on which property is to be listed and valued by the assessor.

(s) "Current use value" means the taxable value of a parcel of land placed on the assessment rolls following its classification under ((the provisions of)) chapter 84.34 RCW.

(t) "Department" means the department of revenue.

(u) "Farm woodlot" means an area of land within a parcel(s) of classified farm and agricultural land that is used in a manner compatible with commercial agricultural ((purposes)) activities including, but not limited to, the growing and cutting of trees for the use of the owner or the sheltering of livestock.

(v) "Granting authority" means the appropriate agency or official ((who)) that acts on an application for classification ((in accordance with the provisions of)) under chapter 84.34 RCW. The granting authority for:

(i) Open space classification under RCW 84.34.020(1) and 84.34.037 is the county legislative authority. However, for applications within an incorporated area of a county, the granting authority is made up of three members of the county legislative body and three members of the city legislative body in the county in which the land is located;

(ii) Farm and agricultural classification under RCW 84.34.020(2) and 84.34.035 is the assessor or the assessor's designee; and

(iii) Timber land classification under RCW 84.34.020(3) and 84.34.041 is the county legislative authority. However, for applications within an incorporated area of a county, the granting authority is made up of three members of the county legislative body and three members of the city legislative body in the county in which the land is located.

(w) "Gross income" means cash income derived from commercial agricultural ((purposes)) activities, including payments received from the United States Department of Agriculture for participating in a crop reduction or acreage set-aside program when such payments are based on the productive capacity of the land. The term shall not include the following:

(i) The value of any products produced on the land and consumed by the owner or lessee;

(ii) Cash income derived from leases for the use of the land for ((other than commercial)) noncommercial agricultural ((purposes)) activities; or

(iii) Payments for soil conservation programs.

(x) "Incidental use" means a use of land classified as farm and agricultural land that is compatible with commercial agricultural ((purposes)) activities if it does not exceed twenty percent of the classified land. An incidental use may include, but is not limited to, wetland preservation, a gravel pit, a farm woodlot, or a produce stand.

(y) "Integral" means that which is central to or inherent in the use or operation of classified farm and agricultural land for commercial agricultural ((purposes)) activities.

(z) "Interest" means the amount of applicable interest upon additional tax.

(aa) "Net cash rental" means the earning or productive capacity of farm and agricultural land less the production costs customarily or typically paid by an owner or landlord. See WAC 458-30-260 for a more detailed explanation.

(((aa))) (bb) "Notice of continuance" means the notice signed when land classified under chapter 84.34 RCW is sold or transferred if the new owner of the land intends to continue the classified use of the land and elects to have the land remain classified under chapter 84.34 RCW. This notice is part of the real estate excise tax affidavit or may be a separate document prepared by the department and attached to this affidavit.

(cc) "Owner" means:

(i) Any person(s) having a fee interest in a parcel of land, ((except when the land is subject to a real estate contract)); ((and)) or

(ii) The contract vendee when the land is subject to a real estate contract.

(((bb))) (dd) "Parcel of land" means a property identified as such on the assessment roll. For purposes of chapter 84.34 RCW and this WAC chapter, a parcel shall not include any land area not owned by the applicant including, but not limited to, a public road, right of way, railroad, or waterway.

(((cc))) (ee) "Penalty" means ((an)) the amount due when land is removed from classification ((in accordance with)) under chapter 84.34 RCW. The amount of the penalty is equal to twenty percent of the additional tax and ((applicable)) interest calculated ((according to the provisions of)) in accordance with RCW 84.34.080 or 84.34.108.

(((dd))) (ff) "Planning authority" means the local government agency empowered by the appropriate legislative authority to develop policies and proposals relating to land use.

(((ee))) (gg) "Primary use" means the existing use of a parcel or parcels of land so prevalent that when the characteristic use of the land is evaluated a conflicting or nonrelated use ((is)) appears to be very limited or excluded.

(((ff))) (hh) "Qualification of land" means the approval of an application for classification of land by ((the)) a granting authority in accordance with ((the provisions of)) chapter 84.34 RCW.

(((gg))) (ii) "Rating system" means a public benefit rating system adopted for ((the)) classified open space ((classification)) land according to RCW 84.34.055.

(((hh))) (jj) "Reclassification" means the process by which land classified under chapter 84.34 or 84.33 RCW is changed from one classification to ((another)) a different classification established by chapter 84.34 RCW or into forest land as described in chapter 84.33 RCW. For example, land classified as farm and agricultural land under RCW 84.34.020(2) may be reclassified as ((either timber or)) open space land under ((the provisions of chapter 84.34 RCW or as forest land under the provisions of chapter 84.33 RCW)) RCW 84.34.020(1).

(kk) "Removal" means land classified under chapter 84.34 RCW is removed from classification by the assessor either because the owner requests removal or because the land is no longer being used for the purpose for which it was granted classification.

(((ii))) (ll) "Sale of ownership" means the conveyance of the ownership of a parcel of land in exchange for ((a)) valuable consideration.

(((jj))) (mm) "Tax year" means the year when property tax is due and payable.

(((kk))) (nn) "Timber management plan" means the plan filed with the county legislative authority or ((with)) the assessor when classified timber land is sold or transferred ((that)). It is synonymous with a "forest management plan" and details an owner's plan regarding the management of classified timber land including, but not limited to, the planting, growing and/or harvesting of ((forest crops)) timber. Some of the elements of such a plan are set forth in WAC 458-30-232.

(((ll))) (oo) "Transfer" means the conveyance of the ownership of a parcel of land without an exchange of valuable consideration and may include situations where classified land is donated to an owner, corporation, partnership, or limited liability corporation.

(((mm))) (pp) "True and fair value" is the value of a parcel of land placed on the assessment rolls at its highest and best use without regard to its current use. The term also refers to market value, that is, the amount of money a buyer of property willing, but not obligated to buy((, purchaser)) would pay a seller of property willing((,)) but not obligated to sell, ((owner for the property)) taking into consideration all uses to which the property is adapted and might reasonably be applied.

(qq) "Withdrawal" or "withdrawn" means action taken by the owner of land classified under chapter 84.34 RCW in filing a notice of request to withdraw the land from classification under the current use program in compliance with RCW 84.34.070. Once land has been classified under chapter 84.34 RCW, it shall remain so classified for at least ten years from the date of classification. At any time after eight years of the initial ten-year classification period have elapsed, the owner may file a notice of request to withdraw all or a portion of the land from classification with the assessor of the county in which the land is located. Land is withdrawn from classification as a result of a voluntary act by the owner.

[Statutory Authority: RCW 84.08.110, 84.08.070, 84.34.141 and 84.34.360. 95-21-002, 458-30-200, filed 10/4/95, effective 11/4/95. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-200, filed 12/5/90, effective 1/5/91. Statutory Authority: RCW 84.08.010(2), 84.34.141 and chapter 84.34 RCW. 88-23-062 (Order PT 88-12), 458-30-200, filed 11/15/88.]

OTS-5106.1


AMENDATORY SECTION(Amending WSR 95-21-002, filed 10/4/95, effective 11/4/95)

WAC 458-30-275   Continuing classification upon sale or transfer of ownership of classified land -- Actions of landowner and county officials to be taken prior to recording a conveyance of classified land.   (1) Introduction. ((When land classified under chapter 84.34 RCW is sold or transferred certain procedures must be followed if the new owner wishes to keep the land in its present classified status. This section explains the required procedures and forms.

(2) Definitions. For purposes of this section, the following definitions apply:

(a) "Affidavit" means the real estate excise tax affidavit that the department prescribes and furnishes to county treasurers for use by the owner in reporting sales and/or transfers of classified land. The form will require the signature, under the penalty of perjury, of the owner and purchaser or transferee or agents of each. See chapter 82.45 RCW and chapter 458-61 WAC for more specific details.

(b) "Notice of continuance" means the notice signed when land classified as open space, farm and agricultural, or timber land under the provisions of chapter 84.34 RCW is sold or transferred and when the new owner of the classified land wishes to have the land remain classified under the provisions of chapter 84.34 RCW. This notice may be either part of the real estate excise tax affidavit or a separate document created by the department.

(c) "Owner" means any person or persons having a fee interest in a parcel of land, except when the land is subject to a real estate contract and the vendee when the land is subject to a real estate contract. For purposes of this section, the owner or owners of classified land must all sign the notice of classification continuance and/or real estate excise tax affidavit.

(3) General requirements. When a parcel(s) of land classified as open space, farm and agricultural, or timber land under chapter 84.34 RCW is sold or transferred and the new owner wishes to keep the land in its classified status, the new owner must:

(a) Sign a notice of classification continuance that is part of a real estate tax affidavit. (See subsection (8) of this section for a discussion regarding this affidavit); and

(b) Provide the assessor with a signed statement that explains how the owner will use the parcel(s) of land so as to continue its eligibility for classification under the provisions of chapter 84.34 RCW; and

(c) Sign a separate notice of continuance prepared by the department if the county has decided that it will require new owners to submit such a form.

(4) Assessor's duties and authority related to sale or transfers. When land classified under chapter 84.34 RCW is in the process of being sold or transferred, the new owner must sign a notice of continuance and the statement described in subsection (3) of this section if he or she wishes the land to remain classified. This notice of continuance and signed statement shall be presented to the assessor who must determine if the land will continue to be used in a manner approved for classified status or if the land will not be used in a manner consistent with the current use program. The assessor shall be allowed a reasonable amount of time to determine whether the classified use of the land will be continued by the new owner.

(a) Upon receipt of the notice of classification continuance, the assessor may require the new owner to submit additional information including, but not limited to, the types of data listed in WAC 458-30-270.

(b) Within fifteen calendar days of receiving the notice of classification continuance, the signed statement, and all requested information, the assessor shall determine whether the land qualifies for continued classification as of the date of conveyance.

(c) The assessor may consult with the granting authority to determine if the land will qualify for continued classification. The assessor and/or the granting authority may ask the owner to submit additional information and pertinent data to ensure that the land will continue to be used for a classified use.

(d) No instrument of conveyance may be filed with the county auditor or recorded unless:

(i) The assessor has determined that the land will be used for current use purposes and can continue to be classified within the current use program;

(ii) If the land is no longer eligible to be classified within the current use program, the seller or transferor has paid the additional tax, applicable interest, and penalty;

(iii) The land will be removed from classification and the removal results solely from one of the exceptions listed in RCW 84.34.108(5) to the imposition of additional tax, applicable interest, and penalty. See also WAC 458-30-300 that implements this statute; or

(iv) In the case of a sale, a completed real estate excise tax affidavit has been submitted to the treasurer of the county in which the classified land is located. To be complete the real estate excise tax affidavit must indicate whether the land is classified under the provisions of chapter 84.34 RCW.

(e) If land must be removed from classification because it was sold or transferred as a result of any of the occurrences or actions listed in RCW 84.34.108(5), the assessor shall:

(i) Follow the standard procedures set forth in WAC 458-30-295 and 458-30-300 for removing the land from classification;

(ii) Notify the county treasurer and the seller or transferor that no additional tax, applicable interest, or penalty are due as a result of the sale or transfer because RCW 84.34.108(5) specifically exempts the transaction from the imposition of additional tax, applicable interest, and penalty; and

(iii) In the case of land acquired for conservation purposes by any of the entities listed in RCW 84.34.108 (5)(f), inform the new owner or transferee that if the land ceases to be used for the purposes enumerated in RCW 84.34.210 or 64.04.130, the additional tax, applicable interest, and penalty will be due.

(5) Timber land. When a parcel(s) of classified timber land is sold or transferred, the new owner must submit a timber management plan to the assessor in order to continue the classification, in addition to the general requirements listed in subsection (3) of this section. The assessor shall send a copy of the timber management plan to the county legislative authority of the county in which the classified land is located. WAC 458-30-232 contains a list of the types of additional information an assessor may require the new owner to submit so that the assessor can determine if the land will continue to be used to grow and harvest forest crops for commercial purposes.

(6) Farm and agricultural land. When a parcel(s) of classified farm and agricultural land is sold or transferred, the new owner must comply with the general requirements set forth in subsection (3) of this section. The size of the parcel(s) of farm and agricultural land sold or transferred will determine whether any additional requirements must also be satisfied. A parcel(s) of land that is less than twenty acres must produce a specified amount of income to remain classified as farm and agricultural land. After all required information is submitted, the assessor shall determine whether the land qualifies for continued classification.

(a) Twenty acres or more. If the parcel(s) sold or transferred is twenty acres or more, the new owner must satisfy the general requirements listed in subsection (3) of this section.

(b) Less than twenty acres. In a sale or transfer involving less than twenty acres, the new owner will be required to comply with the general requirements of subsection (3) of this section and may be asked to provide gross income data relating to the productivity of the farm or agricultural operation for three of the past five years. This information regarding the earning or productive capacity of the classified land will be used to determine if the land meets the income criteria listed in chapter 84.34 RCW and this WAC chapter.

(i) Minimum income limits are set forth in RCW 84.34.020 (2)(b)(i) and (ii) for parcels that are at least five but less than twenty acres in size and in RCW 84.34.020 (2)(c)(i) and (ii) for parcels that are less than five acres in size. Any sale or transfer of classified land, except to a surviving spouse, subject to these income limits. See WAC 458-30-210(3) and 458-30-317 for further information and details.

(ii) If, after January 1, 1993, classified land is sold by an owner who applied for and was granted classification prior to January 1, 1993, to a new owner, the minimum income requirements specified in RCW 84.34.020 (2)(b)(ii) and (c)(ii) will be deferred for a period of three years. The new owner must meet these minimum income limits at least once during the three calendar years immediately following the sale or transfer of the classified farm and agricultural land. For example, if classification was granted in 1978 to a fifteen acre parcel that produced a gross income of one hundred thirty dollars per acre per year and the land is sold on April 15, 1993, the minimum income requirements will be deferred until 1996. By the end of 1996, the new owner must provide proof that the parcel produced two hundred dollars per acre at least one year during the three-year period between 1993 and 1996. If the land has produced a gross income of two hundred dollars per acre the land will remain classified as farm and agricultural land. If the land has not produced this amount at least once during this three-year period, the land shall be removed from classification and the owner will be required to pay an additional tax, interest, and penalty.

(iii) If, after January 1, 1993, classified land is sold by an owner who applied for and was granted classification after January 1, 1993, the assessor will review the information regarding the productivity of the land for three out of the past five years to determine whether the minimum income limits set forth in RCW 84.34.020 (2)(b)(ii) or (c)(ii) have been met. For example, if a ten acre parcel was granted classification on May 1, 1993, and it is sold on February 23, 1994, the assessor will ask the seller and/or buyer of the classified land to provide information about the earning or production capacity of the land for at least the five calendar years preceding the sale (i.e., 1989 through 1993). To retain the current use classification, the land must have produced a minimum of two hundred dollars per acre per year at least three out of the five calendar years preceding the date of sale.

(c) Segregation of land. In a sale or transfer involving a land segregation, the owner of the newly created parcel(s), and the owner of the parcel(s) of land from which the segregated land was taken must comply with the requirements of (a) or (b) of this subsection before the assessor determines if the land qualifies for continued classification.

(7) New owner's warranty. The new owner, upon signing the notice of continuance, warrants that future use of the land will conform to the provisions of chapter 84.34 RCW and this WAC chapter.

(8) Real estate excise tax. Under the provisions of chapter 82.45 RCW whenever real property is sold or transferred an excise tax is imposed; the amount of this tax is related to the selling price of the real property. Real estate excise tax is due at the time of sale. This tax is paid to and collected by the treasurer of the county where the real property is located.

(a) The seller or the buyer, or the agent of either, of the real property must pay the excise tax and must submit a signed real estate excise tax affidavit to the treasurer of the county where the real property is located.

(b) When the ownership of classified land is sold or transferred to a new owner who intends to continue classification of the land under the provisions of chapter 84.34 RCW, the new owner must make a notation of this intent on the affidavit.

(c) No instrument of sale or conveyance evidencing a sale subject to the real estate excise tax may be accepted by the county auditor for filing or recording until a stamp is affixed to the affidavit by the treasurer that shows the tax has been paid. The county treasurer shall not stamp the instrument of sale or conveyance unless the assessor has determined that the classified use of the land will be continued or that the additional tax, interest, and/or penalty required under RCW 84.34.080 and 84.34.108, except as exempted under RCW 84.34.070 or 84.34.108(5), have been collected.)) If land classified under chapter 84.34 RCW is sold or transferred and the new owner wants to retain the classified status of the land, certain procedures must be followed before the conveyance may be recorded or filed. This rule explains the necessary procedures and required forms.

(2) General requirements - new owner elects to have the land remain classified. The county recording authority shall not accept an instrument conveying ownership of land classified under chapter 84.34 RCW unless certain conditions are satisfied. When land classified under chapter 84.34 RCW is sold or transferred and the new owner elects to have the land retain its classified status, prior to recording or filing the conveyance, the new owner or the new owner's agent must:

(a) Sign the notice of continuance that is part of the real estate excise tax (REET) affidavit or sign a separate notice of continuance. (Subsection (9) of this rule contains an explanation about REET.) Both the REET affidavit and the notice of continuance are forms prepared by the department of revenue and supplied to the counties. Both forms are available from the department by sending a written request to:

Department of Revenue

Taxpayer Services

P.O. Box 47478

Olympia, WA 98504-7478.

A copy of the notice of continuance may be obtained from the county assessor or it may be downloaded from the internet at http://dor.wa.gov/index.asp under property tax, "forms." A copy of the REET affidavit may be obtained from the county treasurer. If the classified land is owned by multiple owners, all owners or their agent(s) must sign the notice of continuance on the affidavit or the separate notice of continuance; and

(b) Provide the assessor with a signed statement that explains how the new owner intends to use the classified land and any other information the assessor deems necessary to determine whether the land will continue to be eligible for classification under chapter 84.34 RCW. (See RCW 84.34.121 and WAC 458-30-270.)

(3) Required duties of the assessor before a conveyance of classified land may be filed or recorded. The new owner must supply the assessor with the information outlined in subsection (2) of this rule if the new owner elects to have the land remain classified under chapter 84.34 RCW.

(a) After receiving all required documentation, the assessor is allowed up to fifteen calendar days to determine whether the land should retain its classified status or whether the land should be removed from classification as of the date of conveyance.

(b) To make this determination, the assessor may, but is not required to, consult with the county legislative authority if the land is classified as either open space or timber land or a combination of the county and city legislative bodies if the classified open space land is within an incorporated part of the county. Both the assessor and the granting authority may require the new owner to submit additional information about the use of the classified land after the sale or transfer is complete. This information will be used to determine whether the land should remain classified under chapter 84.34 RCW.

(4) When may a county recording authority accept an instrument conveying ownership of classified land? A county recording authority shall not accept an instrument of conveyance regarding the sale or transfer of land classified under chapter 84.34 RCW for filing or recording until the new owner signs a notice of continuance and the assessor determines that the land will or will not continue to qualify for classification. If the assessor decides that the land must be removed from classification, the assessor will note that the land does not qualify for continuance on the REET affidavit and begin the removal procedures set forth in WAC 458-30-295.

(a) If the new owner signs the notice of continuance and the assessor agrees that the land should remain classified, the assessor checks the box on the REET affidavit that the land qualifies for continued classified current use status. The completed affidavit is then presented to the county recording authority so that it may record or file the conveyance. A completed REET affidavit includes a stamp, placed on it by the treasurer, indicating that any REET or additional tax, interest, and penalty owed as a result of the sale or transfer has been paid. (See subsection (9) of this rule for a more detailed explanation of the real estate excise tax.)

(b) If the assessor decides that the land must be removed or the owner submits a written request to remove the land from classification, the assessor will check the appropriate box on the REET affidavit that the land does not qualify for continuance, sign the REET affidavit, and begin the removal procedures set forth in WAC 458-30-295.

(5) Land removed from classification with no back taxes imposed. If the removal results solely from one of the circumstances or actions listed in RCW 84.34.108(6), no additional tax, interest, or penalty is imposed. The assessor shall:

(a) Follow the procedures set forth in WAC 458-30-295 and 458-30-300 for removing land from classification;

(b) Notify the treasurer and the seller or transferor that no additional tax, interest, or penalty will be imposed; and

(c) If the land is acquired for conservation purposes by any of the entities listed in RCW 84.34.108 (6)(f), inform the new owner that a lien equal to the amount of additional tax, interest, and penalty has been placed on the land, even though the additional tax, interest, and penalty will not be collected at this time. This lien becomes due and payable if and when the land ceases to be used for one of the purposes outlined in RCW 64.04.130 or 84.34.210.

(6) Sales or transfers of timber land. When a parcel(s) of classified timber land is sold or transferred, the new owner must submit a timber management plan to the assessor and comply with the general requirements listed in subsection (2) of this rule to retain the land's classified status. The assessor sends a copy of the timber management plan to the granting authority of the county in which the classified land is located. WAC 458-30-232 contains a list of the types of additional information an assessor may require the new owner to submit to enable the assessor to determine whether the land will be used to grow and harvest timber for commercial purposes.

(7) Sales or transfers of farm and agricultural land. When a parcel(s) of classified farm and agricultural land is sold or transferred, the new owner must comply with the general requirements listed in subsection (2) of this rule. The size of the classified land dictates whether any additional requirements must also be satisfied. After all required information is submitted, the assessor determines whether the land qualifies for continued classification.

(a) If the classified land sold or transferred is twenty acres or more, the new owner must satisfy the general requirements listed in subsection (2) of this rule.

(b) If the sale or transfer involves less than twenty contiguous acres, the new owner will be required to comply with the general requirements of subsection (2) of this rule and the seller or buyer may be asked to provide gross income data relating to the productivity of the farm or agricultural operation for three of the past five years. This income data is used to determine whether the land meets the income production requirements listed in RCW 84.34.020 (2)(b) and (c) for classification. However, if the income data is unavailable but the new owner is willing to sign the notice of continuance and accept the responsibility for any additional tax and interest owed for prior years that will be due if the land is later found to be ineligible for continued classification, the classified status of the land will continue until the assessor determines that the use of the land has changed or has not produced the requisite minimum income.

(i) RCW 84.34.020 (2)(b) and (c) set forth the minimum income production requirements for classified farm and agricultural land of less than twenty acres. Any sale or transfer of classified land is subject to these income limits. However, the income production requirements will not be examined when classified land is being transferred to a surviving spouse, but such land is subject to the same production requirements that were applicable before the spouse's death. For example, a sixteen acre parcel of classified farm and agricultural land, which was classified in 1998, is still required to produce a minimum of two hundred dollars per acre per year even though the assessor is not required to review the income production data at the time of sale or transfer.

(ii) Sale or transfer of land classified prior to January 1, 1993. As of January 1, 1993, the legislature imposed higher income production requirements on classified farm and agricultural land of less than twenty acres. When land classified prior to January 1, 1993, is sold or transferred to a new owner, the higher minimum income requirements set forth in RCW 84.34.020 (2)(b)(ii) and (c)(ii) will be deferred for a period of three years. The new owner is required to produce either two hundred dollars per acre per year if the parcel is five acres or more or fifteen hundred dollars per year if the parcel is less than five acres at least once during the three calendar years immediately following the sale or transfer. For example, if classification was granted in 1978 to a fifteen acre parcel that produced a gross income of one hundred thirty dollars per acre per year until it was sold on April 15, 1999, the minimum income requirements will be deferred until 2002. By the end of 2002, the new owner must show that the parcel produced two hundred dollars per acre at least one year during the three-year period between 2000 and 2002. If the land produced a gross income of two hundred dollars per acre, the land remains classified as farm and agricultural land. If the land failed to produce this amount at least once during this three-year period, the land will be removed from classification and the owner will be required to pay additional tax, interest, and penalty.

(iii) Sale or transfer of land classified after January 1, 1993. The higher minimum income production requirements of RCW 84.34.020 (2)(b)(ii) and (c)(ii) apply to all land classified after January 1, 1993. When such land is sold or transferred, the assessor may ask the seller or buyer to provide gross income data relating to the productivity of the farm or agricultural operation for three of the past five years. This information will be used to determine whether the land should retain its status as classified farm and agricultural land. For example, a ten acre parcel that was classified as farm and agricultural land on May 1, 1995, is sold on February 23, 2001. The assessor asks the seller of the classified land to provide information about the income the land produced during the five calendar years preceding the sale (i.e., 1995 through 2000). To retain the farm and agricultural classification, the land must have produced a minimum income of two hundred dollars per acre per year at least three of the five calendar years preceding the date of sale. However, if the income data is unavailable but the new owner is willing to sign the notice of continuance and accept the responsibility for any additional tax and interest owed for prior years that will be due if the land is later found to be ineligible for continued classification, the classified status of the land will continue until the assessor determines that the use of the land has changed or has not produced the requisite minimum income.

(c) Segregation of land. If the sale or transfer of classified land involves a segregation, the owner of the newly created parcel(s) and the owner of the parcel from which the land was segregated must comply with the requirements for classification, including the production of minimum income, to enable the assessor to continue the classified status of the land.

(8) New owner's acknowledgement. The new owner, by signing the notice of continuance, acknowledges that future use of the land must conform to the provisions of chapter 84.34 RCW.

(9) Real estate excise tax (REET). An excise tax is generally imposed in accordance with chapter 82.45 RCW whenever real property is sold or transferred. The amount of this tax is based upon the selling price of the real property. Real estate excise tax is due at the time of sale. This tax is paid to and collected by the treasurer of the county in which the real property is located. (See RCW 82.45.010 for a listing of transactions that are not considered a sale or transfer upon which REET is imposed.)

[Statutory Authority: RCW 84.08.110, 84.08.070, 84.34.141 and 84.34.360. 95-21-002, 458-30-275, filed 10/4/95, effective 11/4/95. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-275, filed 12/5/90, effective 1/5/91. Statutory Authority: RCW 84.08.010(2), 84.34.141 and chapter 84.34 RCW. 88-23-062 (Order PT 88-12), 458-30-275, filed 11/15/88.]

OTS-3994.2


AMENDATORY SECTION(Amending WSR 95-21-002, filed 10/4/95, effective 11/4/95)

WAC 458-30-285   Withdrawal from classification.   (1) Introduction. RCW 84.34.070(1) states that once land has been classified under chapter 84.34 RCW, it must remain so classified for a minimum of ten years from the date of classification. The land will remain classified until and unless the owner submits to the assessor a notice of request for withdrawal of all or a portion of the land from classification. After a request to withdraw classification is received, the assessor is required to make a series of determinations. This ((section)) rule explains the procedures the assessor must follow upon receipt of a request for withdrawal.

(2) ((Definition. For purposes of this section, the following definition applies: "Withdrawal" or "withdrawn" occurs when the owner of land classified under the provisions of chapter 84.34 RCW has filed a notice of request to withdraw all or a portion of the land from classification. In order to qualify for withdrawal, the parcel(s) of land must have been classified for a minimum of ten years and the owner must have filed a notice of request to withdraw with the assessor at least two years prior to the assessment year when the parcel will be valued at the assessed value as determined in accordance with the county's approved revaluation cycle. Land is withdrawn from classified status by a voluntary act of the owner.

(3) Complete or partial)) Withdrawal process. Land ((that has been)) classified under chapter 84.34 RCW must be applied to the classified use and remain in its classified status for at least ten years from the date of classification. During the ninth or later year of classification, ((if)) the owner ((decides)) may request to have all or a portion of the land withdrawn from the current use program ((he or she)). The owner must submit a written request to withdraw classification to the assessor of the county in which the land is located. The land will be withdrawn from classification two assessment years after the request to withdraw is received.

(a) A parcel of land may be withdrawn from classification in whole or in part. See RCW 84.34.070(1).

(b) The additional tax and ((applicable)) interest ((set forth in)) imposed by RCW 84.34.108 are due when land is withdrawn from classification if the land has been classified under chapter 84.34 RCW for a minimum of ten assessment years. ((When)) If a request to withdraw classification ((has been)) is received by the assessor's office and an intervening act causes the current use classification to be removed before the two assessment years have elapsed, the penalty described in RCW 84.34.108 (((3))) (4)(c) is also due. However, if the removal is a result of one of the circumstances ((set forth)) listed in RCW 84.34.108(((5))) (6) no additional tax, interest, or penalty will be imposed. (See WAC 458-30-300.)

(((4))) (c) Within seven days of receiving a notice to withdraw classification, the assessor forwards a copy of this notice to the legislative body that approved the initial application for classification.

(d) A request to withdraw classification may be revoked by the owner at any time before the land is actually withdrawn from classification.

(3) Procedure for partial withdrawal. RCW 84.34.070 allows an owner to withdraw all or only a portion of the land from classification as long as the owner submits a notice of request for withdrawal two assessment years in advance of the effective date of the withdrawal. If only a portion of the classified land is to be withdrawn from classification, the remaining parcel must ((meet)) satisfy the same requirements the entire parcel was required to meet when the land was originally granted classification unless ((the remaining parcel has)) different criteria are required by statute. For example, if ((a thirty acre parcel of land was previously classified as farm and agricultural land and)) the owner ((now)) of a thirty acre parcel of classified farm and agricultural land wishes to withdraw fifteen acres, ((the land that remains classified)) the remaining fifteen acres must meet the income production requirements ((set forth)) listed in RCW 84.34.020 (2)(b)(i) or (ii) to remain classified even though the thirty acre parcel was not required to meet any minimum income production requirements under RCW 84.34.020 (2)(a).

(a) The assessor may ask the owner of the ((remaining)) parcel ((of)) that will remain classified ((land)) to submit information relevant to its continuing eligibility ((of the land)) under chapter 84.34 RCW. See WAC 458-30-270 for more details ((about such a request)) for the types of information that may be requested.

(b) If the parcel is classified ((as)) farm and agricultural land, the assessor ((shall)) will verify that the remaining portion meets the requirements of RCW 84.34.020(2) ((and this WAC chapter)).

(c) If the parcel is classified ((as)) open space or timber land, the assessor ((shall)) will consult with the granting authority before determining whether the remaining portion meets the requirements of RCW 84.34.020 (1) ((and)) or (3) ((and this WAC chapter)). The granting authority may ask the owner to submit ((pertinent)) any data that it considers necessary to assist it in making this determination.

(d) The assessor may segregate the portion of land from which classification is being withdrawn for valuation and taxation purposes.

(((5))) (4) Date of withdrawal and notice to owner. ((According to)) RCW 84.34.070(1) requires the assessor ((shall)) to withdraw land from classification when two assessment years have elapsed following receipt of the owner's request to withdraw ((classification)). In other words, land ((shall be)) is withdrawn from classification as of January 1st of the third assessment year after the request to withdraw classification is received by the assessor's office.

(a) Method for counting assessment years. The year in which the request to withdraw is received ((shall)) counts as the first assessment year; the second assessment year ((shall)) begins on January 1 of the year immediately following the year in which the request ((was)) is received; and the third assessment year ((shall)) begins on January 1 of the following year. (For example, if a request to withdraw classification is received on November 1, ((1995)) 1999, the first assessment year is ((1995)) 1999, the second assessment year is ((1996)) 2000, and the third assessment year is ((1997)) 2001. The land is withdrawn from classification as of January 1, ((1997)) 2001.)

(b) Notice to owner. No later than thirty days after withdrawing the land from classification, the assessor ((shall)) must notify the owner in writing that classification has been withdrawn ((from the parcel(s))).

(c) Valuation of land withdrawn from classification. When land has been withdrawn from classification, it shall be placed on the assessment roll at ((the assessed)) its true and fair value ((as)) determined in accordance with the county's approved revaluation ((cycle)) plan.

(d) Example. An application for classification as open space land was submitted in April ((1980)) 1990 and approved effective assessment year ((1981)) 1991. In ((1989)) 1999, the owner submits a notice of request to withdraw all the land from classification. The assessor ((shall)) withdraws the land from classification as of January 1, ((1991)) 2001, which is the third assessment year after the request to withdraw ((classification)) was received((; the land value shall be the assessed value as determined in accordance with the county's approved revaluation cycle on January 1 of assessment year 1991)). This land is placed on the assessment roll at its true and fair value as of January 1, 2001, in accordance with the county's approved revaluation plan.

[Statutory Authority: RCW 84.08.110, 84.08.070, 84.34.141 and 84.34.360. 95-21-002, 458-30-285, filed 10/4/95, effective 11/4/95. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-285, filed 12/5/90, effective 1/5/91. Statutory Authority: RCW 84.08.010(2), 84.34.141 and chapter 84.34 RCW. 88-23-062 (Order PT 88-12), 458-30-285, filed 11/15/88.]

OTS-3995.3


AMENDATORY SECTION(Amending WSR 95-21-002, filed 10/4/95, effective 11/4/95)

WAC 458-30-295   Removal of classification.   (1) Introduction. ((This section discusses the occurrences that may cause land to be removed from classification and the actions taken by an assessor relative to a removal. Classified land may be removed if it is no longer used for the purpose for which classification was granted or if the owner has sought reclassification of the land and the land does not meet the criteria for classification under chapter 84.34 or 84.33 RCW.)) This rule discusses the circumstances that may cause land to be removed from classification and the actions an assessor takes to remove the land, in whole or in part, from classification under chapter 84.34 RCW.

(2) ((Definitions. For purposes of this section, the following definitions apply:

(a) "Reclassification" means the process by which land classified under chapter 84.34 or 84.33 RCW is changed from one classification to another classification established by chapter 84.34 RCW or into forest land as described in chapter 84.33 RCW. For example, land classified as farm and agricultural land under RCW 84.34.020(2) may be reclassified as either timber or open space land under the provisions of chapter 84.34 RCW or as forest land under the provisions of chapter 84.33 RCW.

(b) "Removal" means that all or a portion of land classified under the provisions on chapter 84.34 RCW must be removed from classification because the land is no longer being used for the purpose for which classification was granted or for any other classified use within the current use program. The change in use may occur because of the sale or transfer of the classified land, the request by the owner to remove the land from current use program, the determination by the assessor that the classified land no longer meets the criteria for classification under chapter 84.34 RCW, or any of the other occurrences listed in subsection (4) of this section.

(3))) General requirement - removal process. If land classified under chapter 84.34 RCW is applied to a use other than the one for which classification is granted, the owner ((shall)) must notify the assessor of the change in use within ((thirty)) sixty days of the change. ((An)) If the new use of the land does not qualify for classification under chapter 84.34 RCW, the land must be removed from classification and, in most cases, additional ((property)) tax, ((applicable)) interest, and a penalty ((shall be)) are imposed ((upon the land when it is removed from classification due to this change in use)). Land may be totally or partially removed from classification depending on the reason(s) for the removal. See WAC 458-30-300 for details about the additional tax, interest, and((/or)) penalty imposed when land is removed.

(((4) Actions)) (3) Circumstances that cause removal of land from classification. When any of the following actions occur, the assessor shall remove all or a portion of the land from classification ((all or a portion of the parcel)):

(a) Receipt of a written notice from the owner directing ((removal of)) the assessor to remove the land from classification;

(b) Sale or transfer of the land to an owner that makes the land exempt from ((paying)) property taxes, except a transfer ((that resulted)) resulting from a default in loan payments made to or secured by a governmental agency that intends to or is required by law or regulation to resell the land for the same use as before;

(c) Any change in use that occurs after a request to withdraw classification is made ((in accordance with the provisions of WAC 458-30-285)) under RCW 84.34.070 and before the actual withdrawal of the classification occurs;

(d) Sale or transfer of ((all or a portion of)) classified land to a new owner who is ((not exempt from paying)) required to pay property ((taxes)) tax and who ((has not signed a)) does not sign the notice of classification continuance, except a transfer to an owner who is an heir or devisee of a deceased owner;

(e) Failure of an owner to respond to a request from the assessor for data ((pursuant to WAC 458-30-270)) regarding the use of the land, productivity of typical crops, and similar information pertinent to continued classification and assessment of the land (see RCW 84.34.121 and WAC 458-30-270);

(f) ((When the owner has sought a reclassification of the land because the land no longer meets the criteria of the classification under which it is classified or the owner has decided to change the use of the classified land thereby requiring a change in classification and the land does not meet the requirements of the new classification; or

(g) A determination by)) The assessor denies an owner's request for reclassification and the land no longer meets the criteria under which it was originally classified; or

(g) The assessor determines, based on field inspections, analysis of income and expense data, or any other reasonable evidence, that ((all or a portion of)) the ((parcel(s) of)) land no longer meets the criteria for classification under chapter 84.34 RCW.

(i) Example 1. During an on-site inspection ((of a parcel of classified farm and agricultural land)), the assessor discovers that ((the)) classified farm and agricultural land ((is no longer being used for commercial agricultural purposes because the five acre parcel)) has been paved over and is ((currently being)) used as a parking lot for school buses.

(ii) Example 2. Based on information released at a public meeting of the county planning commission, the assessor learns that an owner of classified timber land has harvested all ((forest crops)) timber from the ((classified)) land, the land has been platted, public services such as roads, sewers, and domestic water supply have ((all)) been made available to the platted land, and ((at least six)) houses have been built on the ((classified timber)) land. This information has led the assessor to conclude that the use of the land has changed or that the land no longer meets the criteria for classification as timber land.

(((iii))) (4) Procedure when an assessor discovers a change in use. If the assessor determines that the land is not being used for a classified use, the assessor must notify the owner in writing regarding this determination((, but)) and may not remove the land from classification until the owner has had an opportunity to respond to the assessor's determination.

(((iv))) (a) The owner must respond, in writing, to the assessor's inquiry about the use of the classified land no later than thirty calendar days following the postmark date ((this)) the assessor's inquiry was mailed to the owner.

(((v))) (b) If the parcel ((of land)) in question is classified ((as)) open space land or timber land, the assessor may ask, but is not required to ask, the granting authority to provide reasonable assistance in determining whether the classified land continues to meet the criteria for classification. The granting authority shall provide this assistance within thirty days of receiving the assessor's request for assistance (see RCW 84.34.108(1)).

(c) Unless the owner demonstrates to the assessor that the classified use of the land has not changed, the assessor will remove the land from classification and impose additional tax, interest, and penalty from the date of the change in use (see RCW 84.34.080 and 84.34.108).

(5) Procedure for partial removal. If the use of only a portion of the classified land has changed and it no longer qualifies for classification under chapter 84.34 RCW, the assessor will remove the nonqualifying portion of the classified land. The remaining parcel must satisfy the same requirements the entire parcel was required to meet when the land was originally granted classification unless different criteria are required by statute because of the reduced size of the land that remains classified.

(a) The assessor may ask the owner of the parcel that will remain classified to submit information relevant to its continuing eligibility under chapter 84.34 RCW. See WAC 458-30-270 for more details.

(b) If the parcel is classified farm and agricultural land, the assessor will verify that the remaining portion meets the requirements of RCW 84.34.020(2).

(c) If the parcel is classified open space or timber land, the assessor will consult with the granting authority before determining whether the remaining portion meets the requirements of RCW 84.34.020 (1) or (3). The granting authority and assessor may ask the owner to submit pertinent data for this determination.

(d) The assessor may segregate the portion of land from which classification is being removed for valuation and taxation purposes.

(((5))) (6) Transactions that do not cause land to be removed from classification. Land cannot be removed from classification solely because of:

(a) The creation, sale, or transfer of forestry riparian easements under RCW 76.13.120; or

(b) The creation, sale, or transfer of a fee interest or a conservation easement for the riparian open space program under RCW 76.09.040.

(7) Notice to owner. Within thirty days ((after)) of the removal ((of all or a portion)) of ((the)) land from classification, the assessor ((shall)) must notify the owner in writing of the reason(s) for ((the)) removal.

(((6))) (8) Right of appeal. The seller, transferor, or owner of classified land may appeal the removal ((of land)) from classification to the board of equalization of the county in which the land is located. The appeal must be filed within thirty calendar days ((following)) (or up to sixty days if such a time limit has been adopted by the county legislative authority) of the date the notice of removal was mailed by the assessor or given to the owner, or on or before July 1st of the year of removal, whichever is later (RCW 84.40.038).

(((7))) (9) Assessor's duty after removal. Unless the removal is reversed on appeal, the assessor ((shall revalue the previously classified land by consulting the existing assessment rolls that contain both the current use and the true and fair value of the land. After the effective date of the removal, the assessor will list only the true and fair value of the land on the assessment roll)) places the land on the assessment roll at its true and fair value determined in accordance with the county's approved revaluation plan. The value on the date of removal is the true and fair value as of January 1st of the year of removal. The assessment roll ((will)) lists both the assessed ((valuation)) value of the land before and after the removal of classification. Taxes ((will be)) for the current tax year are prorated according to the portion of the year to which each assessed ((valuation)) value applies.

(((8))) (10) Possible segregation after removal. If only a portion of the land is being removed from classification, the assessor ((may)) must segregate the affected portion for valuation and tax purposes.

(((9) Penalties)) (11) Additional tax, interest, and penalty are due when land is removed. The additional tax, ((applicable)) interest, and penalty ((set forth in)) imposed by RCW 84.34.080 and 84.34.108 ((will be)) are due when land is removed from classification unless the removal is the result ((on)) of one of the exempt circumstances or transactions ((exempt under that statute)) listed in RCW 84.34.108(6). (See WAC 458-30-300.)

[Statutory Authority: RCW 84.08.110, 84.08.070, 84.34.141 and 84.34.360. 95-21-002, 458-30-295, filed 10/4/95, effective 11/4/95. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-295, filed 12/5/90, effective 1/5/91. Statutory Authority: RCW 84.08.010(2), 84.34.141 and chapter 84.34 RCW. 88-23-062 (Order PT 88-12), 458-30-295, filed 11/15/88.]

OTS-5105.3


AMENDATORY SECTION(Amending WSR 95-21-002, filed 10/4/95, effective 11/4/95)

WAC 458-30-300   Additional tax -- Withdrawal or removal from classification.   (1) Introduction. ((When land is withdrawn or removed from classification an additional tax and applicable interest are due. A penalty is also due when land is removed. This section explains how the additional tax, applicable interest, and, if appropriate, penalty are calculated. It also sets forth the situations under which no additional tax, applicable interest, and/or penalty are due if land is withdrawn or removed from classification. The provisions of RCW 84.34.108 and 84.34.070(2) are outlined in this section.

(2) Definitions. For purposes of this section, the following definitions apply:

(a) "Reclassification" means the process by which land classified under chapter 84.34 or 84.33 RCW is changed from one classification to another classification established by chapter 84.34 RCW or into forest land as described in chapter 84.33 RCW. The process of reclassification is a voluntary act taken on the part of an owner of classified land when the land must either be removed from classification or transferred to another classification to remain eligible under chapter 84.34 or 84.33 RCW. For example, land classified as farm and agricultural land under RCW 84.34.020(2) may be reclassified as either timber or open space land under the provisions of chapter 84.34 RCW or as forest land under the provisions of chapter 84.33 RCW.

(b) "Removal" means that all or a portion of land classified under the provisions of chapter 84.34 RCW must be removed from classification because the land is no longer being used for the purpose for which classification was granted or for any other classified use within the current use program. The change in use may occur because of the sale or transfer of the classified land, the request by the owner to remove the land from the current use program, the determination by the assessor that the classified land no longer meets the criteria for classification under chapter 84.34 RCW, or any of the other occurrences listed in WAC 458-30-295.

(c) "Withdrawal" or "withdrawn" occurs when the owner of land classified under the provisions of chapter 84.34 RCW has filed a notice of request to withdraw all or a portion of the land from classification. In order to qualify for withdrawal, the parcel(s) of land must have been classified for a minimum of ten years and the owner must have filed a notice of request to withdraw with the assessor at least two years prior to the assessment year when the parcel will be valued at the assessed value as determined in accordance with the county's approved revaluation cycle. Land is withdrawn from classified status by a voluntary act of the owner.

(3) Duties of assessor and county treasurer. When land is withdrawn from classification the assessor shall compute an additional tax and applicable interest and when land is removed from classification the assessor shall compute an additional tax, applicable interest, and penalty. As soon as possible after determining that the land is to be withdrawn or removed from classification, the assessor shall compute the amount of the additional tax, applicable interest, and, if appropriate, penalty, except as provided in subsection (6) of this section. The county treasurer shall mail a notice to the owner regarding the additional tax, applicable interest, and penalty due and the date on which the total amount is due. The additional tax, applicable interest, and penalty shall be due and payable to the county treasurer thirty days after the notice is mailed to the owner.

(4) Amount of additional tax, applicable interest, and penalty. The amount of additional tax, applicable interest, and penalty shall be determined as follows:

(a) The amount of additional tax shall be equal to the difference between the property tax that was levied on the land based on its classified current use value and the tax that would have been levied on its true and fair value for the seven tax years preceding the withdrawal or removal, in addition to the portion of the tax year when the withdrawal or removal takes place;

(b) The amount of applicable interest shall be equal to the interest on the amount of additional tax determined under (a) of this subsection at the statutory rate, specified in RCW 84.56.020, charged on delinquent property taxes starting from the date the tax could have been paid without interest to the date the additional tax is paid; and

(c) The amount of penalty shall be twenty percent of the additional tax and applicable interest; that is, twenty percent of the total amount computed in (a) and (b) of this subsection. A penalty is not imposed when:

(i) The land has been classified for at least ten years at the time of declassification and the owner has given the assessor a request to withdraw classification two years in advance of the date the classified land will be withdrawn, in accordance with RCW 84.34.070; or

(ii) The change in use was the result of one of the circumstances listed in RCW 84.34.108(5). See subsection (6) of this section for a detailed list of these circumstances.

(5) Failure to sign notice of continuance. If a new owner fails to sign the notice of classification continuance when classified land is sold or transferred, an additional tax, applicable interest, and penalty shall be calculated according to subsection (4) of this section.

(6) Exceptions - no additional tax, applicable interest, or penalty are due. When all or a portion of classified land is withdrawn or removed from classification, no additional tax, applicable interest, or penalty shall be imposed if the withdrawal or removal is the result of one or more of the following circumstances:

(a) Transfer to a governmental entity in exchange for other land located within the state of Washington;

(b) A taking through the exercise of the power of eminent domain or the sale or transfer to an entity having the power of eminent domain in anticipation of the exercise of this power, said entity having manifested its intent to exercise the power of eminent domain in writing or by other official action;

(c) A natural disaster such as a flood, windstorm, earthquake, or other such calamity rather than by virtue of the act of the landowner changing the use of such property;

(d) Official action by an agency of the state of Washington or by the county or city in which the land is located disallowing the current use of classified land. For the purposes of this section, "official action" may include, but is not limited to, city ordinances, zoning restrictions, Growth Management Act, Shoreline Protection Act, and Environmental Protection Act(s);

(e) Transfer of land to a church when the land would qualify for property tax exemption pursuant to RCW 84.36.020. The conditions set forth in RCW 84.36.020 shall only apply to the affected parcel of land and shall not relieve any portion not so affected from the potential tax liability;

(f) Acquisition of property interests by public agencies or private organizations qualified under RCW 84.34.210 or 64.04.130 for the purposes specified therein. See subsection (7) of this section for a listing of these agencies, organizations, and purposes. However, when the property interests are not used for the purposes enumerated in these statutes, the additional tax, applicable interest, and penalty specified in subsection (4) of this section shall be imposed;

(g) Removal of land that was granted classification as farm and agricultural land under RCW 84.34.020 (2)(d) because the principal residence of the farm operator or owner and/or housing for farm and agricultural employees was situated on it; or

(h) The result of one of the following changes in classification:

(i) Reclassification from farm and agricultural land under RCW 84.34.020(2) to timber land under RCW 84.34.020(3), open space land under RCW 84.34.020(1), or forest land under chapter 84.33 RCW;

(ii) Reclassification from timber land under RCW 84.34.020(3) to farm and agricultural land under RCW 84.34.020(2), open space land under RCW 84.34.020(1), or forest land under chapter 84.33 RCW;

(iii) Reclassification from open space/farm and agricultural conservation land under RCW 84.34.020 (1)(c) to farm and agricultural land under RCW 84.34.020(2) if the land was previously classified as farm and agricultural land; or

(iv) Reclassification from forest land under chapter 84.33 RCW to open space land under RCW 84.34.020(1).

(7) Land acquired by agencies or organizations qualified under RCW 84.34.210 or 64.04.130. If the purpose for acquiring classified land is to protect, preserve, maintain, improve, restore, limit the future use of, or conserve the land for open space purposes and otherwise conserve the land for public use or enjoyment and the classified land is acquired by any of the following entities, no additional tax, applicable interest, or penalty are due as long as the property is used for one of the purposes listed in this subsection:

(a) State agency;

(b) Federal agency;

(c) County;

(d) City;

(e) Town;

(f) Metropolitan park district;

(g) Metropolitan municipal corporation;

(h) Nonprofit historic preservation corporation as defined in RCW 64.04.130; or

(i) Nonprofit nature conservancy corporation or association as defined in RCW 84.34.250.

(8) Removal of classification from land that was previously classified or designated forest land under chapter 84.33 RCW. Land that was previously classified or designated as forest land under chapter 84.33 RCW may be reclassified under RCW 84.34.020. If the current use classification is subsequently removed before the land has been classified for at least ten assessment years under chapter 84.34 RCW, a combination of compensating tax and additional tax shall be due. RCW 84.33.145 explains the way in which these taxes are calculated.)) This rule outlines the withdrawal and removal procedures, events that trigger removal, and how to calculate the additional property tax ("additional tax"), interest, and penalty that may be imposed because land is withdrawn or removed from classification. When land is withdrawn or removed additional tax and interest are due. A twenty percent penalty is also due when land is removed from classification (see RCW 84.34.108 and 84.34.070(2)).

(2) Duties of assessor and treasurer. As soon as possible after determining that the land no longer qualifies for classification under chapter 84.34 RCW or the use of the land has changed, the assessor must notify the owner in writing regarding this determination and of his or her intent to remove the land from classification. The assessor may not remove the land from classification until the owner has had an opportunity to be heard on the issue of removal.

(a) The owner has thirty calendar days following the postmark date on the assessor's notice of intent to remove to respond, in writing, to the assessor about the removal of the land from classification. After giving the owner an opportunity to be heard and unless sufficient information or evidence is presented as to why the land should not be removed from classified status, the land will be removed from classification as of the date the land no longer qualified for classification or the use of the land changed.

(b) Within thirty days of removing land from classification, the assessor notifies the owner, in writing, about the reasons for the removal. The owner, seller, or transferor may appeal the removal to the county board of equalization.

(c) Unless the removal is reversed on appeal, the assessor revalues the affected land with reference to its true and fair value on the date of removal from classification. The assessment roll will list the assessed value of the land before and after the removal from classification. Taxes will be allocated to the part of the year to which each assessed value applies; that is, current use and true and fair value.

(d) The assessor computes the amount of additional tax, interest, and penalty, unless the removal is the result of one of the circumstances listed in subsection (5) of this rule.

(e) The assessor notifies the treasurer of the amount of additional tax, interest, and penalty due.

(f) The treasurer mails or gives the owner written notice about the amount of the additional tax, interest, and, if required, penalty due and the date on which the total amount must be paid.

(g) The total amount is due and payable to the treasurer thirty days after the owner is notified of the amount of additional tax, interest, and penalty due.

(3) Amount of additional tax, interest, and penalty. The amount of additional tax, interest, and penalty will be determined as follows:

(a) The amount of additional tax is equal to the difference between the property tax paid on the land because of its classified status and the property tax that would have been paid on the land based on its true and fair value for the seven tax years preceding the withdrawal or removal. And in the case of a removal, the taxes owed for the balance of the current tax year;

(b) The amount of interest, calculated at the same statutory rate charged on delinquent property taxes specified in RCW 84.56.020, is based upon the amount of additional tax determined under (a) of this subsection, starting from the date the additional tax could have been paid without interest until the date the tax is paid; and

(c) A penalty amounting to twenty percent of the additional tax and interest; that is, twenty percent of the total amount computed in (a) and (b) of this subsection. A penalty is not imposed when:

(i) The land has been classified for at least ten years at the time it is withdrawn from classification and the owner submitted a request to withdraw classification to the assessor at least two assessment years prior to the date the land is withdrawn from classification; or

(ii) The use of the land has changed and the change in use was the result of one of the circumstances listed in RCW 84.34.108(6). See subsection (5) of this rule for a detailed list of these circumstances.

(4) Failure to sign notice of continuance. Land will be removed from current use classification if a new owner fails to sign the notice of continuance when the classified land is sold or transferred. Additional tax, interest, and penalty will be imposed in accordance with RCW 84.34.108(4) because of this removal. A notice of continuance is not required when classified land is transferred to a new owner who is the heir or devisee of a deceased owner and the new owner wishes to continue classified use (see RCW 84.34.108 (1)(c)). If the heir or devisee elects not to continue classified use, the land will be removed from classification and additional tax, interest, and penalty are due.

(5) Exceptions. No additional tax, interest, or penalty will be imposed if the withdrawal or removal from classification was the result of one or more of the following circumstances:

(a) Transfer to a governmental entity in exchange for other land located within the state of Washington;

(b) A taking through the exercise of the power of eminent domain or the sale or transfer to an entity having the power of eminent domain in anticipation of the exercise of this power. This entity must have declared its intent to exercise the power of eminent domain in writing or by some other official action;

(c) A natural disaster such as a flood, windstorm, earthquake, or other such calamity rather than an act of the landowner changing the use of the property;

(d) Official action by an agency of the state of Washington or by the county or city in which the land is located disallowing the current use of classified land. For the purposes of this rule, "official action" includes: City ordinances, zoning restrictions, Growth Management Act, Shoreline Management Act, and Environmental Policy Act;

(e) Transfer of land to a church when the land would qualify for a property tax exemption under RCW 84.36.020. Only the land that would qualify for exemption under RCW 84.36.020 is included within this exception. Additional tax, interest, and, if appropriate, the penalty will be assessed upon the remainder of the land withdrawn or removed from classification;

(f) Acquisition of property interests by public agencies or private organizations qualified under RCW 84.34.210 or 64.04.130 for the conservation purposes specified therein. See subsection (6) of this rule for a listing of these agencies, organizations, and purposes. However, when the property interests are no longer used for one of the purposes enumerated in RCW 84.34.210 or 64.04.130, additional tax, interest, and penalty will be imposed on the owner of the property at that time;

(g) Removal of land granted classification as farm and agricultural land under RCW 84.34.020 (2)(d) because the principal residence of the farm operator or owner and/or housing for farm and agricultural employees was situated on it. This exception applies only to the land upon which the housing is located even if this portion of the agricultural enterprise has not been allocated a separate parcel number for assessment and tax purposes;

(h) Removal of classification after a statutory exemption is enacted that would exempt the land from property tax and the landowner submits a written request to the assessor to remove the land from classification. This exception applies only to newly enacted exemptions that would cause classified land to go from taxable to exempt status. For example, in 1999 the legislature created a new property tax exemption for property used for agricultural research and education programs. Subsequently, the owner of such land requests removal of the land from classification, no additional tax, interest or penalty are imposed because of this new property tax exemption authorized by RCW 84.36.570.

(i) The creation, sale, or transfer of forestry riparian easements under RCW 76.13.120;

(j) The creation, sale, or transfer of a fee interest or a conservation easement for the riparian open space program under RCW 76.09.040;

(k) The sale or transfer of land within two years of the death of an owner who held at least a fifty percent interest in the land if:

(i) The individual(s) or entity(ies) who received the land from the deceased owner is selling or transferring the land; and

(ii) The land has been continuously assessed and valued as classified or designated forest land under chapter 84.33 RCW or classified under chapter 84.34 RCW since 1993. The date of death shown on the death certificate begins the two-year period for sale or transfer;

(l) The sale or transfer of classified land between July 22, 2001, and July 22, 2003, if:

(i) An owner who held at least a fifty percent interest in the land died after January 1, 1991;

(ii) The individual(s) or entity(ies) who received the land from the deceased owner is selling or transferring the land; and

(iii) The land has been continuously assessed and valued as classified or designated forest land under chapter 84.33 RCW or classified under chapter 84.34 RCW since 1993. The date of death shown on the death certificate is the date used to determine the deceased owner's date of death; or

(m) The result of one of the following changes in classification because of the owner's request:

(i) Reclassification from farm and agricultural land under RCW 84.34.020(2) to: Timber land under RCW 84.34.020(3), open space land under RCW 84.34.020(1), or forest land under chapter 84.33 RCW;

(ii) Reclassification from timber land under RCW 84.34.020(3) to: Farm and agricultural land under RCW 84.34.020(2), open space land under RCW 84.34.020(1), or forest land under chapter 84.33 RCW;

(iii) Reclassification from open space/farm and agricultural conservation land under RCW 84.34.020 (1)(c) to farm and agricultural land under RCW 84.34.020(2) if the land was previously classified as farm and agricultural land; or

(iv) Reclassification from forest land under chapter 84.33 RCW to open space land under RCW 84.34.020(1).

(6) Land acquired by agencies or organizations qualified under RCW 84.34.210 or 64.04.130. If the purpose for acquiring classified land is to protect, preserve, maintain, improve, restore, limit the future use of, or conserve the land for public use or enjoyment and the classified land is acquired by any of the following entities, no additional tax, interest, or penalty will be imposed as long as the property is used for one of these purposes:

(a) State agency;

(b) Federal agency;

(c) County;

(d) City;

(e) Town;

(f) Metropolitan park district (see RCW 35.61.010);

(g) Metropolitan municipal corporation (see RCW 35.58.020);

(h) Nonprofit historic preservation corporation as defined in RCW 64.04.130; or

(i) Nonprofit nature conservancy corporation or association as defined in RCW 84.34.250.

(7) Removal of classification from land that was previously classified or designated forest land under chapter 84.33 RCW. Land that was previously classified or designated as forest land under chapter 84.33 RCW may be reclassified under chapter 84.34 RCW at the request of the land owner. If such land is subsequently removed from the current use program before the land has been classified under chapter 84.34 RCW for at least ten assessment years, a combination of compensating tax imposed under chapter 84.33 RCW and additional tax, interest, and penalty imposed under chapter 84.34 RCW is due. RCW 84.33.145 explains the way in which these taxes are to be calculated.

[Statutory Authority: RCW 84.08.110, 84.08.070, 84.34.141 and 84.34.360. 95-21-002, 458-30-300, filed 10/4/95, effective 11/4/95. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-300, filed 12/5/90, effective 1/5/91. Statutory Authority: RCW 84.08.010(2), 84.34.141 and chapter 84.34 RCW. 88-23-062 (Order PT 88-12), 458-30-300, filed 11/15/88.]

OTS-3997.3


AMENDATORY SECTION(Amending WSR 95-21-002, filed 10/4/95, effective 11/4/95)

WAC 458-30-305   Due date of additional tax, ((applicable)) interest, and penalty upon withdrawal or removal.   (1) Introduction. This ((section)) rule specifies the date upon which the additional tax, ((applicable)) interest, and, if appropriate, penalty are due when land is withdrawn or removed from classification under chapter 84.34 RCW. This ((section)) rule also explains the consequences of failure to timely pay these charges.

(2) ((Definitions. For purposes of this section, the following definitions apply:

(a) "Removal" means that all or a portion of land classified under the provisions of chapter 84.34 RCW must be removed from classification because the land is no longer being used for the purpose for which classification was granted or for any other classified use within the current use program. The change in use may occur because of the sale or transfer of the classified land, the request by the owner to remove the land from the current use program, the determination by the assessor that the classified land no longer meets the criteria for classification under chapter 84.34 RCW, or any of the other occurrences listed in WAC 458-30-295.

(b) "Withdrawal" or "withdrawn" occurs when the owner of land classified under the provisions of chapter 84.34 RCW has filed a notice of request to withdraw all or a portion of the land from classification. In order to qualify for withdrawal, the parcel(s) of land must have been classified for a minimum of ten years and the owner must have filed a notice of request to withdraw with the assessor at least two years prior to the assessment year when the parcel will be valued at the assessed value as determined in accordance with the county's approved revaluation cycle. Land is withdrawn from classified status by a voluntary act of the owner.

(3) Result of a sale or transfer. If a parcel of land is withdrawn or removed from classification because of a sale or transfer, the additional tax, applicable interest, and penalty, if owed, are due and payable at the time of the sale or transfer.

(4))) General rule - ((withdrawal or removal due to all other circumstances)) payable within thirty days of removal or withdrawal. ((Except for a sale or transfer, the additional tax, applicable interest, and penalty, if owed, are due no later than thirty days after the date the county treasurer mails the written notice to the owner regarding the amounts owed. This notice shall also state the date upon which the amounts owed are due)) No later than thirty days after the date the treasurer mails or gives the owner written notice that the land will be removed from classification with the amount of additional tax, interest, and penalty due, the total amount owing must be paid, except in the case of a sale or transfer. The notice must list the amount of additional tax, interest, and penalty owed, as well as the date on which the total amount must be paid.

(((5))) (3) Exception to general rule - payable on date of sale or transfer. If classified land is to be removed because of a sale or transfer, additional tax, interest, and penalty, if owed, must be paid at the time of sale or transfer.

(4) Failure to timely pay - delinquency. Any additional tax, ((applicable)) interest, or penalty that is unpaid on its due date is delinquent. Interest ((shall be)) is charged on the total amount due at the same rate ((as)) that is applied by law to delinquent property taxes (see RCW 84.56.020). Interest accrues from the date of the delinquency until the date the total amount is paid in full.

(((6))) (5) Additional tax, ((applicable)) interest, and penalty constitute a lien. When land is withdrawn or removed from classification ((is withdrawn or removed from a parcel of land)), the amount of additional tax, ((applicable)) interest, and((/or)) penalty ((shall)) becomes a lien on the ((parcel of)) land ((as of)) that attaches on the date of withdrawal or removal.

(a) This lien ((shall have)) has priority to and ((shall)) must be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation, or responsibility to or with which ((this)) the land may become charged or liable.

(b) The lien may be foreclosed at the same time and in the same manner ((provided by law for foreclosure of)) as liens for delinquent real property taxes ((as set forth in)) are foreclosed under RCW 84.64.050.

[Statutory Authority: RCW 84.08.110, 84.08.070, 84.34.141 and 84.34.360. 95-21-002, 458-30-305, filed 10/4/95, effective 11/4/95. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-305, filed 12/5/90, effective 1/5/91. Statutory Authority: RCW 84.08.010(2), 84.34.141 and chapter 84.34 RCW. 88-23-062 (Order PT 88-12), 458-30-305, filed 11/15/88.]

OTS-3998.3


AMENDATORY SECTION(Amending WSR 95-21-002, filed 10/4/95, effective 11/4/95)

WAC 458-30-310   County recording authority -- County financial authority -- Duties.   (1) Introduction. This ((section)) rule explains the conditions under which documents conveying ownership of land classified under chapter 84.34 RCW will be accepted by the county recording authority ((under the provisions of chapter 84.34 RCW)). It also describes the duties of the treasurer in the withdrawal and removal processes.

(2) County recording authority -- Limited documents may be accepted. The county recording authority ((shall)), usually the auditor, will not ((accept for recording)) record any instrument of conveyance involving ((a parcel of)) land classified ((according to)) under chapter 84.34 RCW unless:

(a) Any required additional tax, ((applicable)) interest, and((/or)) penalty has been paid to the treasurer and the treasurer has affixed a stamp on the REET affidavit showing this payment;

(b) The notice of continuance on or attached to the ((real estate excise tax)) REET affidavit is signed by the new owner or transferee, the assessor agrees that the land should remain classified, and the assessor checks the box on the REET affidavit that the land qualifies for continued classified current use status; or

(c) The land is to be removed from classification ((and the removal results solely from)) because of one of the exceptions listed in RCW 84.34.108(((5) to the imposition of)) (6) and is exempt from additional tax, ((applicable)) interest, and penalty. ((See also WAC 458-30-300 that implements this statute.))

(3) Treasurer's duties. The treasurer has a number of responsibilities relative to land classified under chapter 84.34 RCW and to land that is to be withdrawn or removed from classification.

(a) Withdrawal. Upon receipt of a request for withdrawal from classification, the assessor prepares a statement listing the amount of additional tax and interest due as a result of the withdrawal, the date on which this sum must be paid, and the effective date of the withdrawal. The assessor sends a copy of this statement to the treasurer's office. The treasurer's office collects the total amount of additional tax and interest listed on the date specified.

(b) Removal. As soon as possible after determining that land must be removed from classification, the assessor prepares a notice of removal of classification and statement containing additional tax, interest, and penalty calculations. This notice and statement lists the reason(s) for removing the land from classification and the assessor's calculations of the total amount of additional tax, interest, and penalty due. The assessor sends or gives a copy of this notice and statement to the treasurer's office and to the taxpayer. The treasurer's office collects the total amount due on the date specified.

(c) Collection and distribution. The additional tax, interest, and, if any, penalty imposed under RCW 84.34.080 or 84.34.108 must be paid in full to the treasurer's office thirty days after the date the statement was mailed to the owner. When classified land is sold or transferred and real estate excise tax must be paid, the treasurer will affix a stamp on the REET affidavit as proof that the REET and additional tax, interest, and if any, penalty have been paid so the conveyance may be recorded. The additional tax collected is distributed to taxing districts in the same manner as current taxes applicable to the land are distributed. The treasurer distributes the interest and penalty collected to the county's current expense fund.

(d) The treasurer treats any additional tax, interest, and penalty not paid on the due date as delinquent property taxes.

[Statutory Authority: RCW 84.08.110, 84.08.070, 84.34.141 and 84.34.360. 95-21-002, 458-30-310, filed 10/4/95, effective 11/4/95. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-310, filed 12/5/90, effective 1/5/91. Statutory Authority: RCW 84.08.010(2), 84.34.141 and chapter 84.34 RCW. 88-23-062 (Order PT 88-12), 458-30-310, filed 11/15/88.]

OTS-3999.2


AMENDATORY SECTION(Amending WSR 95-21-002, filed 10/4/95, effective 11/4/95)

WAC 458-30-325   Transfers between classifications -- Application for reclassification.   (1) Introduction. This ((section)) rule discusses the process ((by which classified)) used when land is reclassified ((under another)) into a different classification ((of)) under chapter 84.34 ((RCW)) or ((under chapter)) 84.33 RCW.

(2) ((Definitions. For purposes of this section the following definitions apply:

(a) "Reclassification" means the process by which land classified under chapter 84.34 or 84.33 RCW is changed from one classification to another classification established by chapter 84.34 RCW or into forest land as described in chapter 84.33 RCW. The process of reclassification is a voluntary act taken on the part of an owner of classified land when the land must either be removed from classification or transferred to another classification to remain eligible under chapter 84.34 RCW or 84.33 RCW. For example, land classified as farm and agricultural land under RCW 84.34.020(2) may be reclassified as either timber or open space land under the provisions of chapter 84.34 RCW or as forest land under the provisions of chapter 84.33 RCW.

(b) "Removal" means that all or a portion of land classified under the provisions on chapter 84.34 RCW must be removed from classification because the land is no longer being used for the purpose for which classification was granted or for any other classified use within the current use program. The change in use may occur because of the sale or transfer of the classified land, the request by the owner to remove the land from the current use program, the determination by the assessor that the classified land no longer meets the criteria for classification under chapter 84.34 RCW, or any of the other occurrences listed in WAC 458-30-295.

(3))) General information - when reclassification is required. ((When the current use program was revised in 1992, the statutes were changed to allow a transfer or reclassification)) In 1992, the legislature created an opportunity for owners of classified land to change the classification under which their land is classified under chapter 84.34 RCW or designated under chapter 84.33 RCW. The name given to this process is "reclassification." It is now possible to switch between the different classifications of chapter 84.34 RCW and forest land under chapter 84.33 RCW. The following circumstances may cause an owner of classified land to seek reclassification ((to be sought)):

(a) The classified land is no longer being used for the purpose for which it was granted classification;

(b) The owner or new owner of classified land has decided to change the use of classified land;

(c) The classified land no longer meets the requirements of the classification under which it was ((granted classification)) originally classified; for example, farm and agricultural land that ((does not)) no longer produces the minimum income required by RCW 84.34.020 (2)(b) and (c) must either be reclassified or removed from the current use program;

(d) The new owner is an heir or devisee of a deceased owner who held classified land and the new owner either does not choose to meet or cannot meet the requirements of the classification under which ((it)) the land was ((granted classification)) originally classified; or

(e) The assessor has determined ((that)) the classified land is no longer eligible under the existing classification and the land must either be reclassified or removed from ((classification)) the current use program.

(((4))) (3) Reclassification process if land is subject to removal. Within thirty days of receiving notice from the assessor that ((the)) classified land is to be removed from the current use program, the owner must submit an application for reclassification ((to)) into another classification under chapter 84.34 or 84.33 RCW if the owner elects to have the land remain classified. The removal notice ((shall)) must include a statement ((that informs)) informing the owner of the classified land ((that he or she may seek)) about the reclassification option. If ((the)) an application for reclassification is submitted within thirty days, the ((classified)) land ((shall)) is not ((be)) removed from classification until the application for reclassification is approved or denied.

(((5))) (4) Reclassification ((when)) process if an owner seeks change of classification. An owner of classified land ((classified under 84.34 RCW)) may seek ((reclassification of that)) to have the land reclassified under a different current use classification under chapter 84.34 RCW or may seek ((classification or)) designation as forest land under chapter 84.33 RCW. ((The owner of classified land may seek reclassification because of a desire to change the use of the classified land or because he or she does not want to meet or cannot meet the requirements of the classification under which the land is currently classified.))

(a) If an owner elects to have land reclassified, the owner must submit an application for reclassification to the assessor of the county in which the land is located. This ((form shall)) application form will be ((designed)) prepared by the department and supplied to ((county)) assessors or it may be obtained on the internet at http://dor.wa.gov/index.asp under property tax, "forms."

(b) Within seven days of ((receipt of)) receiving this request, the assessor ((shall)) must forward a copy of ((this)) the application for reclassification to the appropriate granting authority (see the definition of "granting authority" in WAC 458-30-200 for more details). The assessor ((shall)) retains a copy of all applications for reclassification.

(c) ((The status of classified land for which)) When an application for reclassification is ((sought shall)) submitted, the classified status of the land is not ((be)) changed until the application ((for reclassification)) is approved or denied.

(((6))) (5) Application procedure. An application for reclassification ((shall be handled)) is processed in the same manner as an initial application for classification, which may include payment of an application fee if the county requires one. All classification requirements of RCW 84.34.035 for farm and agricultural land, RCW 84.34.037 for open space land, RCW 84.34.041 for timber land, and chapter 84.33 RCW for forest land must be satisfied in order to reclassify land. (These requirements are also described in WAC 458-30-225, 458-30-230, 458-30-232, 458-30-242, and chapter 458-40 WAC.)

(a) ((When evaluating an application for reclassification, the granting authority will follow the same procedures it has for processing an initial application for classification under chapter 84.34 or)) The granting authority must process an application for reclassification in the same manner as it processes an initial application for classification under chapter 84.34 RCW or for designation as forest land under chapter 84.33 RCW.

(b) An application for reclassification may be approved or denied, in whole or in part.

(i) The granting authority ((shall)) must notify the applicant in writing of the extent to which the application for reclassification is approved or denied.

(ii) The applicant ((shall have)) has the same appeal rights in relation to a denial of an application for reclassification as ((he or she)) the applicant has in regard((s)) to an initial application for classification.

(iii) If an application for reclassification is denied, the assessor ((shall)) removes the land from classification and ((shall)) calculates ((the)) additional tax, ((applicable)) interest, and penalty in ((the manner set forth in WAC 458-30-300)) accordance with RCW 84.34.108.

(((7))) (6) Reclassifications exempt from additional tax. No additional tax, ((applicable)) interest, ((and)) or penalty are due when ((the)) reclassification is a result of any of the following transfers between classifications:

(a) Reclassification from farm and agricultural land under RCW 84.34.020(2) to: Timber land under RCW 84.34.020(3), open space land under RCW 84.34.020(1), or forest land under chapter 84.33 RCW;

(b) Reclassification from timber land under RCW 84.34.020(3) to: Farm and agricultural land under RCW 84.34.020(2), open space land under RCW 84.34.020(1), or forest land under chapter 84.33 RCW;

(c) Reclassification from open space/farm and agricultural conservation land under RCW 84.34.020 (1)(c) to farm and agricultural land under RCW 84.34.020(2) if the land was previously classified as farm and agricultural land; or

(d) Reclassification from forest land under chapter 84.33 RCW to open space land under RCW 84.34.020(1).

(((8))) (7) Income ((criteria)) production requirements of land to be reclassified. The income ((criteria)) production requirements relating to the following reclassifications may be deferred for a period of up to five years from the effective date of reclassification when:

(a) Land classified as open space/farm and agricultural conservation land under RCW 84.34.020 (1)(c) or timber land under RCW 84.34.020(3) is reclassified as farm and agricultural land under RCW 84.34.020 (2)(b) ((and)) or (c); or

(b) Land classified or designated as forest land under chapter 84.33 RCW is reclassified as farm and agricultural land under RCW 84.34.020 (2)(b) ((and)) or (c).

(((9))) (8) Valuation of reclassified land. The ((assessed)) value of ((land that has been)) reclassified ((shall reflect)) land will be based on the new classification as of January 1 of the assessment year following ((the)) approval of the request for reclassification. For example, if an application for reclassification from farm and agricultural land to open space/farm and agricultural conservation land is submitted on February 15, ((1993)) 1999, and approved effective June 1, ((1993)) 1999, the land ((shall)) will be valued and assessed as open space/farm and agricultural conservation land on January 1, ((1994)) 2000, and the owner ((shall)) is required to pay taxes on this new assessed value in ((1995)) 2001.

[Statutory Authority: RCW 84.08.110, 84.08.070, 84.34.141 and 84.34.360. 95-21-002, 458-30-325, filed 10/4/95, effective 11/4/95. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-325, filed 12/5/90, effective 1/5/91. Statutory Authority: RCW 84.08.010(2), 84.34.141 and chapter 84.34 RCW. 88-23-062 (Order PT 88-12), 458-30-325, filed 11/15/88.]

Washington State Code Reviser's Office