EXPEDITED RULES
Title of Rule: Amendatory section WAC 458-30-590 Rate of inflation -- Publication -- Interest rate -- Calculation.
Purpose: To provide information about the rate of inflation that is used by county officials to calculate interest on deferred special benefit assessments when farm and agricultural or timber land is removed or withdrawn from classification under chapter 84.34 RCW, the open space program.
Statutory Authority for Adoption: RCW 84.34.360.
Statute Being Implemented: RCW 84.34.310.
Summary: Special benefit assessments for certain local improvements to farm and agricultural or timber land classified under chapter 84.34 RCW may be deferred by the land owner. If a land owner has chosen to defer these assessments, when the land is subsequently removed or withdrawn from classification the deferred special benefit assessments become due and payable with interest. WAC 458-30-590 provides the rate of inflation used in calculating the interest that is added to the deferred amount of special benefit assessments.
Reasons Supporting Proposal: RCW 84.34.310(6) authorizes the department to determine the rate of inflation and to publish this rate no later than January 1 each year for use in that assessment year.
Name of Agency Personnel Responsible for Drafting: Kim M. Qually, 1025 Union Avenue S.E., Suite #400, Olympia, WA, (360) 570-6133; Implementation and Enforcement: Gary O'Neil, 1025 Union Avenue S.E., Suite #200, Olympia, WA, (360) 570-5860.
Name of Proponent: Department of Revenue, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: WAC 458-30-590 explains the department's duty to determine and publish an annual rate of inflation, the basis for the inflation rate, how the rates of inflation are used to calculate the rate of interest, and the rate of inflation. The rate of inflation is used when farm and agricultural or timber land classified under chapter 84.34 RCW is removed or withdrawn from classification. When land is removed or withdrawn, the deferred amounts of special benefit assessments and/or property taxes plus interest are due and payable. This rate of inflation is used to calculate the rate of interest applied.
Proposal Changes the Following Existing Rules: The rule
being proposed amends the current version of WAC 458-30-590.
It provides the rate of inflation for 2003 that will be used
to calculate the amount of interest due when farm and
agricultural or timber land is removed or withdrawn from
classification under chapter 84.34 RCW during assessment year
2004.
THIS RULE IS BEING PROPOSED UNDER AN EXPEDITED RULE-MAKING PROCESS THAT WILL ELIMINATE THE NEED FOR THE AGENCY TO HOLD PUBLIC HEARINGS, PREPARE A SMALL BUSINESS ECONOMIC IMPACT STATEMENT, OR PROVIDE RESPONSES TO THE CRITERIA FOR A SIGNIFICANT LEGISLATIVE RULE. IF YOU OBJECT TO THE USE OF THE EXPEDITED RULE-MAKING PROCESS, YOU MUST EXPRESS YOUR OBJECTIONS IN WRITING AND THEY MUST BE SENT TO Kim M. Qually, Counsel, Department of Revenue, P.O. Box 47467, Olympia, WA 98504-7467, fax (360) 664-0693, e-mail kimq@dor.wa.gov , AND RECEIVED BY December 1, 2003.
September 30, 2003
Alan R. Lynn
Rules Coordinator
Legislation and Policy Division
OTS-6704.1
AMENDATORY SECTION(Amending WSR 02-24-058, filed 12/3/02,
effective 1/3/03)
WAC 458-30-590
Rate of inflation -- Publication -- Interest
rate -- Calculation.
(1) Introduction. This section sets forth
the rates of inflation discussed in WAC 458-30-550. It also
explains the department of revenue's obligation to annually
publish a rate of inflation and the manner in which this rate
is determined.
(2) General duty of department -- Basis for inflation rate. Each year the department determines and publishes a rule establishing an annual rate of inflation. This rate of inflation is used in computing the interest that is assessed when farm and agricultural or timber land, which are exempt from special benefit assessments, is withdrawn or removed from current use classification.
(a) The rate of inflation is based upon the implicit price deflator for personal consumption expenditures calculated by the United States Department of Commerce. This rate is used to calculate the rate of interest collected on exempt special benefit assessments.
(b) The rate is published by December 31st of each year and applies to all withdrawals or removals from farm and agricultural or timber land classification that occur the following year.
(3) Assessment of rate of interest. An owner of classified farm and agricultural or timber land is liable for interest on the exempt special benefit assessment. Interest accrues from the date the local improvement district is created until the land is withdrawn or removed from classification. Interest accrues and is assessed in accordance with WAC 458-30-550.
(a) Interest is assessed only for the time (years and months) the land remains classified under RCW 84.34.020 (2) or (3).
(b) If the classified land is exempt from the special benefit assessment for more than one year, the annual inflation rates are used to calculate an average rate of interest. This average is determined by adding the inflation rate for each year the classified land was exempt from the special benefit assessment after the local improvement district was created. The sum of the inflation rates is then divided by the number of years involved to determine the applicable rate of interest.
(c) Example. A local improvement district for a domestic water supply system was created in January 1990 and the owner used the statutory exemption provided in RCW 84.34.320. On July 1, 1997, the land was removed from the farm and agricultural classification. An average interest rate was calculated using the inflation rates for 1990 through 1997. The owner was then notified of the amount of previously exempt special benefit assessment, plus the average interest rate.
(4) Rates of inflation. The rates of inflation used to calculate the interest as required by WAC 458-30-550 are as follows:
| YEAR | PERCENT | YEAR | PERCENT | ||||
| 1976 | 5.6 | 1977 | 6.5 | ||||
| 1978 | 7.6 | 1979 | 11.3 | ||||
| 1980 | 13.5 | 1981 | 10.3 | ||||
| 1982 | 6.2 | 1983 | 3.2 | ||||
| 1984 | 4.3 | 1985 | 3.5 | ||||
| 1986 | 1.9 | 1987 | 3.7 | ||||
| 1988 | 4.1 | 1989 | 4.8 | ||||
| 1990 | 5.4 | 1991 | 4.2 | ||||
| 1992 | 3.3 | 1993 | 2.7 | ||||
| 1994 | 2.2 | 1995 | 2.3 | ||||
| 1996 | 2.2 | 1997 | 2.1 | ||||
| 1998 | 0.85 | 1999 | 1.42 | ||||
| 2000 | 2.61 | 2001 | 1.89 | ||||
| 2002 | 1.16 | 2003 | 1.84 | ||||
[Statutory Authority: RCW 84.34.360 and 84.34.310. 02-24-058, § 458-30-590, filed 12/3/02, effective 1/3/03; 02-03-041, § 458-30-590, filed 1/8/02, effective 2/8/02; 00-24-107, § 458-30-590, filed 12/6/00, effective 1/1/01; 99-24-035, § 458-30-590, filed 11/23/99, effective 12/24/99; 99-01-068, § 458-30-590, filed 12/14/98, effective 1/1/99; 98-01-179, § 458-30-590, filed 12/23/97, effective 1/1/98; 97-02-067, § 458-30-590, filed 12/31/96, effective 1/1/97; 96-01-094, § 458-30-590, filed 12/19/95, effective 1/1/96; 95-06-043, § 458-30-590, filed 2/24/95, effective 3/27/95. Statutory Authority: RCW 84.34.360. 94-11-098, § 458-30-590, filed 5/17/94, effective 6/17/94; 92-22-061, § 458-30-590, filed 10/29/92, effective 11/29/92. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, § 458-30-590, filed 12/5/90, effective 1/5/91. Statutory Authority: Chapter 84.34 RCW and RCW 84.34.360. 89-05-010 (Order PT 89-3), § 458-30-590, filed 2/8/89. Statutory Authority: RCW 84.34.360. 88-07-004 (Order PT 88-4), § 458-30-590, filed 3/3/88; 87-07-009 (Order PT 87-3), § 458-30-590, filed 3/10/87.]