2871-S AMH PARL H5154

2871-S AMH PARL H5154.1

SHB 2871 - H AMD 928

By Representative Parlette

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. This chapter creates a new system of classifying agricultural land for property tax purposes as agricultural land with long-term commercial significance where the true and fair value of the land is based upon its current use.

NEW SECTION. Sec. 2. (1) Land shall be classified as agricultural land with long‑term commercial significance if: (a) The land is designated as agricultural land under RCW 36.70A.170(1) by a county, city, or town planning under RCW 36.70A.040; (b) the land is devoted primarily to agricultural uses specified under RCW 36.70A.030(2) and not used for residential purposes, industrial purposes, or other commercial purposes; and (c) the county, city, or town has adopted its development regulations under RCW 36.70A.060 conserving agricultural land designated under RCW 36.70A.170(1). Once classified as agricultural land with long-term commercial significance under this chapter, land shall not be removed from classification solely because the land is no longer designated as agricultural land under RCW 36.70A.170(1).

(2) An owner of land desiring classification as agricultural land with long-term commercial significance shall make application to the county assessor upon forms prepared by the department of revenue and supplied by the county assessor. The application shall require only such information reasonably necessary to properly classify an area of land under this chapter with a notarized verification of the truth thereof and shall include a statement that the applicant is aware of the potential tax liability involved when such land ceases to be classified as agricultural land with long-term commercial significance. Applications must be made during the calendar year preceding that in which such classification is to begin. The assessor shall make necessary information, including copies of this chapter and applicable regulations, readily available to interested parties, and shall render reasonable assistance to such parties upon request.

(3) The assessor shall automatically send applications to all landowners of land meeting the requirements of this section based upon information submitted to the assessor by counties, cities, and towns under RCW 36.70B.230 (as recodified by this act). The manifest error provisions of RCW 84.48.065 apply to the classification of land as agricultural land with long‑term commercial significance.

(4) The assessor shall act upon the application for classification as agricultural land with long-term commercial significance with due regard to all relevant evidence. The application shall be deemed to have been approved unless, prior to the first day of May of the year after such application was mailed or delivered to the assessor, the assessor shall notify the applicant in writing of the extent to which the application is denied. The owner of land eligible for classification as agricultural land with long-term commercial significance that is not approved by the assessor under subsection (2) of this section may appeal to the board of equalization of the county in which the property is located, in accordance with RCW 84.40.038, within thirty days of the date the notice of denial is mailed.

(5) Land classified or designated as forest land under chapter 84.33 RCW shall not be classified as agricultural land with long‑term commercial significance, even if it meets the requirements of this section. Land classified as open space land, farm and agricultural land, or timber land under RCW 84.34.020 (1), (2), or (3) shall not be classified as agricultural land with long‑term commercial significance, even if it meets the requirements of this section.

(6) The true and fair value of agricultural land with long‑term commercial significance for property tax purposes shall be the current use value of the land determined in the same manner as the current use value of land classified as farm and agricultural land is determined under chapter 84.34 RCW.

NEW SECTION. Sec. 3. (1) The classification of land as agricultural land with long-term commercial significance shall be removed if either: (a) The land is no longer designated as agricultural lands under RCW 36.70A.170(1) and the landowner requests the land be removed from classification under this chapter; or (b) the use of the land changes to a use not permitted for designation as agricultural land with long-term commercial significance.

Land removed from classification as agricultural land with long-term commercial significance shall be valued at its true and fair value under RCW 84.40.030 unless it is reclassified under another current use valuation program under chapter 84.33 or 84.34 RCW.

(2) Land classified as agricultural land with long-term commercial significance that is removed from classification under subsection (1)(a) of this section is not subject to any additional tax, interest, and penalty. Land classified as agricultural land with long-term commercial significance that is removed from classification under subsection (1)(b) of this section is subject to additional tax, interest, and penalty. Additional tax, interest, and penalty shall be determined in the manner provided for additional tax, penalty, and interest for removal of open space lands under RCW 84.34.070 through 84.34.108.

NEW SECTION. Sec. 4. The provisions of RCW 84.34.300 through 84.34.380, relating to exemptions from special benefit assessments, apply to agricultural land with long-term commercial significance.

NEW SECTION. Sec. 5. The department shall adopt rules consistent with this chapter as are necessary or desirable to permit the effective administration of this chapter.

Sec. 6. RCW 84.34.020 and 1997 c 429 s 31 are each amended to read as follows:

As used in this chapter, unless a different meaning is required by the context:

(1) "Open space land" means (a) any land area so designated by an official comprehensive land use plan adopted by any city or county and zoned accordingly, or (b) any land area, the preservation of which in its present use would (i) conserve and enhance natural or scenic resources, or (ii) protect streams or water supply, or (iii) promote conservation of soils, wetlands, beaches or tidal marshes, or (iv) enhance the value to the public of abutting or neighboring parks, forests, wildlife preserves, nature reservations or sanctuaries or other open space, or (v) enhance recreation opportunities, or (vi) preserve historic sites, or (vii) preserve visual quality along highway, road, and street corridors or scenic vistas, or (viii) retain in its natural state tracts of land not less than one acre situated in an urban area and open to public use on such conditions as may be reasonably required by the legislative body granting the open space classification, or (c) any land meeting the definition of farm and agricultural conservation land under subsection (8) of this section. As a condition of granting open space classification, the legislative body may not require public access on land classified under (b)(iii) of this subsection for the purpose of promoting conservation of wetlands.

(2) "Farm and agricultural land" means:

(a) Any parcel of land that is twenty or more acres or multiple parcels of land that are contiguous and total twenty or more acres:

(i) Devoted primarily to the production of livestock or agricultural commodities for commercial purposes;

(ii) Enrolled in the federal conservation reserve program or its successor administered by the United States department of agriculture; or

(iii) Other similar commercial activities as may be established by rule;

(b) Any parcel of land that is five acres or more but less than twenty acres devoted primarily to agricultural uses, which has produced a gross income from agricultural uses equivalent to, as of January 1, 1993:

(i) One hundred dollars or more per acre per year for three of the five calendar years preceding the date of application for classification under this chapter for all parcels of land that are classified under this subsection or all parcels of land for which an application for classification under this subsection is made with the granting authority prior to January 1, 1993; and

(ii) On or after January 1, 1993, two hundred dollars or more per acre per year for three of the five calendar years preceding the date of application for classification under this chapter;

(c) Any parcel of land of less than five acres devoted primarily to agricultural uses which has produced a gross income as of January 1, 1993, of:

(i) One thousand dollars or more per year for three of the five calendar years preceding the date of application for classification under this chapter for all parcels of land that are classified under this subsection or all parcels of land for which an application for classification under this subsection is made with the granting authority prior to January 1, 1993; and

(ii) On or after January 1, 1993, fifteen hundred dollars or more per year for three of the five calendar years preceding the date of application for classification under this chapter.

Parcels of land described in (b)(i) and (c)(i) of this subsection shall, upon any transfer of the property excluding a transfer to a surviving spouse, be subject to the limits of (b)(ii) and (c)(ii) of this subsection.

Agricultural lands shall also include such incidental uses as are compatible with agricultural purposes, including wetlands preservation, provided such incidental use does not exceed twenty percent of the classified land and the land on which appurtenances necessary to the production, preparation, or sale of the agricultural products exist in conjunction with the lands producing such products. Agricultural lands shall also include any parcel of land of one to five acres, which is not contiguous, but which otherwise constitutes an integral part of farming operations being conducted on land qualifying under this section as "farm and agricultural lands"; or

(d) The land on which housing for employees and the principal place of residence of the farm operator or owner of land classified pursuant to (a) of this subsection is sited if: The housing or residence is on or contiguous to the classified parcel; and the use of the housing or the residence is integral to the use of the classified land for agricultural purposes((;

~~(e) Any parcel of land designated as agricultural land under RCW 36.70A.170; or~~

~~(f) Any parcel of land not within an urban growth area zoned as agricultural land under a comprehensive plan adopted under chapter 36.70A RCW~~)).

(3) "Timber land" means any parcel of land that is five or more acres or multiple parcels of land that are contiguous and total five or more acres which is or are devoted primarily to the growth and harvest of forest crops for commercial purposes. A timber management plan shall be filed with the county legislative authority at the time (a) an application is made for classification as timber land pursuant to this chapter or (b) when a sale or transfer of timber land occurs and a notice of classification continuance is signed. Timber land means the land only.

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

(5) "Owner" means the party or parties having the fee interest in land, except that where land is subject to real estate contract "owner" shall mean the contract vendee.

(6) "Contiguous" means land adjoining and touching other property held by the same ownership. Land divided by a public road, but otherwise an integral part of a farming operation, shall be considered contiguous.

(7) "Granting authority" means the appropriate agency or official who acts on an application for classification of land pursuant to this chapter.

(8) "Farm and agricultural conservation land" means either:

(a) Land that was previously classified under subsection (2) of this section, that no longer meets the criteria of subsection (2) of this section, and that is reclassified under subsection (1) of this section; or

(b) Land that is traditional farmland that is not classified under chapter 84.33 or 84.34 RCW, that has not been irrevocably devoted to a use inconsistent with agricultural uses, and that has a high potential for returning to commercial agriculture.

Sec. 7. RCW 36.70B.230 and 1996 c 254 s 6 are each amended to read as follows:

By July 31, ((~~1997, a local government~~)) 1998, every county or city planning under RCW 36.70A.040 shall provide to the county assessor a copy of ((~~the local government's~~)) its comprehensive plan and development regulations in effect on July 1st of that year and shall thereafter provide any amendments to the plan and regulations that were adopted before July 31st of each following year. The plans and regulations provided to the assessor must include the agricultural land designated under RCW 36.70A.170 and the regulations adopted under RCW 36.70A.060 conserving the designated land.

A county or city that initially plans under RCW 36.70A.040 after the effective date of this section shall provide a copy of its comprehensive plan and development regulations to the county assessor by July 31st of the year immediately following the year the county or city initially became subject to RCW 36.70A.040.

NEW SECTION. Sec. 8. The following acts or parts of acts are each repealed:

(1) RCW 35.63.240 and 1996 c 254 s 3;

(2) RCW 35A.63.260 and 1996 c 254 s 4; and

(3) RCW 36.70.495 and 1996 c 254 s 5.

NEW SECTION. Sec. 9. RCW 36.70B.230, as amended by this act, is recodified as a new section in chapter 36.70A RCW.

NEW SECTION. Sec. 10. Sections 1 through 5 of this act constitute a new chapter in Title 84 RCW."

Correct the title.

EFFECT: Requires lands owners to apply for the new current use program for land designated as agricultural lands of long term commercial significance. Limits new program to land not already in a current use program. Forgives back taxes if land is removed from designation as agricultural lands of long term commercial significance but otherwise requires back taxes if land is no longer farmed. Removes language adopted in 1997 that qualifies all rural agricultural land located outside the urban growth area for current use valuation.