BILL REQ. #:  H-0817.1 



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HOUSE BILL 1580
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State of Washington60th Legislature2007 Regular Session

By Representatives Takko, Orcutt, Lovick and Sells

Read first time 01/23/2007.   Referred to Committee on Finance.



     AN ACT Relating to consolidating designated forest lands and open space timber lands for ease of administration; amending RCW 84.33.035, 84.33.130, 84.33.140, 84.33.145, 84.33.170, 84.34.020, 84.34.030, 84.34.060, 84.34.070, 84.34.080, 84.34.108, 84.34.145, 84.34.155, 84.34.210, 84.34.220, 84.34.300, 84.34.310, 84.34.330, 84.34.340, 84.34.370, and 84.34.380; reenacting and amending RCW 84.34.320 and 84.34.360; and repealing RCW 84.33.077, 84.34.041, and 84.34.131.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 84.33.035 and 2004 c 177 s 1 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Agricultural methods" means the cultivation of trees that are grown on land prepared by intensive cultivation and tilling, such as irrigating, plowing, or turning over the soil, and on which all unwanted plant growth is controlled continuously for the exclusive purpose of raising trees such as Christmas trees and short-rotation hardwoods.
     (2) "Average rate of inflation" means the annual rate of inflation as determined by the department averaged over the period of time as provided in RCW 84.33.220 (1) and (2). This rate shall be published in the state register by the department not later than January 1st of each year for use in that assessment year.
     (3) "Commercial purposes" means the use of the forest land on a continuous and regular basis after application for designation that demonstrates the owner will engage in and intends to obtain, through lawful means, monetary profit from cash income by growing and harvesting timber, including timber grown using the methods described in subsection (1) of this section. However, this requirement does not apply if there is a governmental restriction that prohibits, in whole or in part, the owner from harvesting timber from the parcel.
     (4) "Composite property tax rate" for a county means the total amount of property taxes levied upon forest lands by all taxing districts in the county other than the state, divided by the total assessed value of all forest land in the county.
     (((4))) (5) "Forest land" is synonymous with "designated forest land" and means any parcel of land that is ((twenty)) five or more acres or multiple parcels of land that are contiguous and total ((twenty)) five or more acres that is or are devoted primarily to growing and harvesting timber for commercial purposes as defined in this section. Designated forest land means the land only and does not include a residential homesite. The term includes land used for incidental uses that are compatible with the growing and harvesting of timber but no more than ten percent of the land may be used for such incidental uses. It also includes the land on which appurtenances necessary for the production, preparation, or sale of the timber products exist in conjunction with land producing these products.
     (((5))) (6) "Harvested" means the time when in the ordinary course of business the quantity of timber by species is first definitely determined. The amount harvested shall be determined by the Scribner Decimal C Scale or other prevalent measuring practice adjusted to arrive at substantially equivalent measurements, as approved by the department.
     (((6))) (7) "Harvester" means every person who from the person's own land or from the land of another under a right or license granted by lease or contract, either directly or by contracting with others for the necessary labor or mechanical services, fells, cuts, or takes timber for sale or for commercial or industrial use. When the United States or any instrumentality thereof, the state, including its departments and institutions and political subdivisions, or any municipal corporation therein so fells, cuts, or takes timber for sale or for commercial or industrial use, the harvester is the first person other than the United States or any instrumentality thereof, the state, including its departments and institutions and political subdivisions, or any municipal corporation therein, who acquires title to or a possessory interest in the timber. The term "harvester" does not include persons performing under contract the necessary labor or mechanical services for a harvester.
     (((7))) (8) "Harvesting and marketing costs" means only those costs directly associated with harvesting the timber from the land and delivering it to the buyer and may include the costs of disposing of logging residues. Any other costs that are not directly and exclusively related to harvesting and marketing of the timber, such as costs of permanent roads or costs of reforesting the land following harvest, are not harvesting and marketing costs.
     (((8))) (9) "Incidental use" means a use of designated forest land that is compatible with its purpose for growing and harvesting timber. An incidental use may include a gravel pit, a shed or land used to store machinery or equipment used in conjunction with the timber enterprise, and any other use that does not interfere with or indicate that the forest land is no longer primarily being used to grow and harvest timber.
     (((9))) (10) "Local government" means any city, town, county, water-sewer district, public utility district, port district, irrigation district, flood control district, or any other municipal corporation, quasi-municipal corporation, or other political subdivision authorized to levy special benefit assessments for sanitary or storm sewerage systems, domestic water supply or distribution systems, or road construction or improvement purposes.
     (((10))) (11) "Local improvement district" means any local improvement district, utility local improvement district, local utility district, road improvement district, or any similar unit created by a local government for the purpose of levying special benefit assessments against property specially benefited by improvements relating to the districts.
     (((11))) (12) "Owner" means the party or parties having the fee interest in land, except where land is subject to a real estate contract "owner" means the contract vendee.
     (((12))) (13) "Primarily" or "primary use" means the existing use of the land is so prevalent that when the characteristic use of the land is evaluated any other use appears to be conflicting or nonrelated.
     (((13))) (14) "Short-rotation hardwoods" means hardwood trees, such as but not limited to hybrid cottonwoods, cultivated by agricultural methods in growing cycles shorter than fifteen years.
     (((14))) (15) "Small harvester" means every person who from his or her own land or from the land of another under a right or license granted by lease or contract, either directly or by contracting with others for the necessary labor or mechanical services, fells, cuts, or takes timber for sale or for commercial or industrial use in an amount not exceeding two million board feet in a calendar year. When the United States or any instrumentality thereof, the state, including its departments and institutions and political subdivisions, or any municipal corporation therein so fells, cuts, or takes timber for sale or for commercial or industrial use, not exceeding these amounts, the small harvester is the first person other than the United States or any instrumentality thereof, the state, including its departments and institutions and political subdivisions, or any municipal corporation therein, who acquires title to or a possessory interest in the timber. Small harvester does not include persons performing under contract the necessary labor or mechanical services for a harvester, and it does not include the harvesters of Christmas trees or short-rotation hardwoods.
     (((15))) (16) "Special benefit assessments" means special assessments levied or capable of being levied in any local improvement district or otherwise levied or capable of being levied by a local government to pay for all or part of the costs of a local improvement and which may be levied only for the special benefits to be realized by property by reason of that local improvement.
     (((16))) (17) "Stumpage value of timber" means the appropriate stumpage value shown on tables prepared by the department under RCW 84.33.091, provided that for timber harvested from public land and sold under a competitive bidding process, stumpage value shall mean the actual amount paid to the seller in cash or other consideration. The stumpage value of timber from public land does not include harvesting and marketing costs if the timber from public land is harvested by, or under contract for, the United States or any instrumentality of the United States, the state, including its departments and institutions and political subdivisions, or any municipal corporation therein. Whenever payment for the stumpage includes considerations other than cash, the value shall be the fair market value of the other consideration. If the other consideration is permanent roads, the value of the roads shall be the appraised value as appraised by the seller.
     (((17))) (18) "Timber" means forest trees, standing or down, on privately or publicly owned land, and except as provided in RCW 84.33.170 includes Christmas trees and short-rotation hardwoods.
     (((18))) (19) "Timber assessed value" for a county means the sum of: (a) The total stumpage value of timber harvested from publicly owned land in the county multiplied by the public timber ratio, plus; (b) the total stumpage value of timber harvested from privately owned land in the county multiplied by the private timber ratio. The numerator of the public timber ratio is the rate of tax imposed by the county under RCW 84.33.051 on public timber harvests for the year of the calculation. The numerator of the private timber ratio is the rate of tax imposed by the county under RCW 84.33.051 on private timber harvests for the year of the calculation. The denominator of the private timber ratio and the public timber ratio is the composite property tax rate for the county for taxes due in the year of the calculation, expressed as a percentage of assessed value. The department shall use the stumpage value of timber harvested during the most recent four calendar quarters for which the information is available. The department shall calculate the timber assessed value for each county before October 1st of each year.
     (((19))) (20) "Timber assessed value" for a taxing district means the timber assessed value for the county multiplied by a ratio. The numerator of the ratio is the total assessed value of forest land in the taxing district. The denominator is the total assessed value of forest land in the county. As used in this section, "assessed value of forest land" means the assessed value of forest land for taxes due in the year the timber assessed value for the county is calculated plus an additional value for public forest land. The additional value for public forest land is the product of the number of acres of public forest land that are available for timber harvesting determined under RCW 84.33.089 and the average assessed value per acre of private forest land in the county.
     (((20))) (21) "Timber management plan" means a plan prepared by a trained forester, or any other person with adequate knowledge of timber management practices, concerning the use of the land to grow and harvest timber. Such a plan ((includes)) may include:
     (a) A legal description of the forest land;
     (b) A statement that the forest land is held in contiguous ownership of ((twenty)) five or more acres and is primarily devoted to and used to grow and harvest timber;
     (c) A brief description of the timber on the forest land or, if the timber on the land has been harvested, the owner's plan to restock the land with timber;
     (d) A statement about whether the forest land is also used to graze livestock;
     (e) A statement about whether the land has been used in compliance with the restocking, forest management, fire protection, insect and disease control, and forest debris provisions of Title 76 RCW; and
     (f) If the land has been recently harvested or supports a growth of brush and noncommercial type timber, a description of the owner's plan to restock the forest land within three years.

Sec. 2   RCW 84.33.130 and 2003 c 170 s 4 are each amended to read as follows:
     (1) Notwithstanding any other provision of law, lands that were assessed as classified forest land before July 22, 2001, or open space timber land under chapter 84.34 RCW before the effective date of this section, shall be designated forest land for the purposes of this chapter. The date the property was classified as open space timber shall be considered the date the property was designated as forest land under this chapter. The assessor shall notify each owner of open space timber land of the transfer by certified mail. For any forest land removed from designation after the merger of designated forest land and open space timber land on the effective date of this section, only compensating tax shall be collected as a result of the removal in accordance with RCW 84.33.140(12), unless otherwise provided by law. The owners of previously classified forest land shall not be required to apply for designation under this chapter. As of ((July 22, 2001)) the effective date of this section, the land and timber on such land shall be assessed and taxed in accordance with the provisions of this chapter.
     Any open space taxation agreement recorded with a county legislative authority by an owner of classified open space timber land before the effective date of this section, becomes null and void when the subject land becomes designated as forest land under this chapter.
     (2) An owner of land desiring that it be designated as forest land and valued under RCW 84.33.140 as of January 1st of any year shall submit an application to the assessor of the county in which the land is located before January 1st of that year. The application shall be accompanied by a reasonable processing fee when the county legislative authority has established the requirement for such a fee.
     (3) No application of designation is required when publicly owned forest land is exchanged for privately owned forest land designated under this chapter. The land exchanged and received by an owner subject to ad valorem taxation shall be automatically granted designation under this chapter if the following conditions are met:
     (a) The land will be used to grow and harvest timber; and
     (b) The owner of the land submits a document to the assessor's office that explains the details of the forest land exchange within sixty days of the closing date of the exchange. However, if the owner fails to submit information regarding the exchange by the end of this sixty-day period, the owner must file an application for designation as forest land under this chapter and the regular application process will be followed.
     (4) The application shall be made upon forms prepared by the department and supplied by the assessor, and shall include the following:
     (a) A legal description of, or assessor's parcel numbers for, all land the applicant desires to be designated as forest land;
     (b) The date or dates of acquisition of the land;
     (c) A brief description of the timber on the land, or if the timber has been harvested, the owner's plan for restocking;
     (d) A copy of the timber management plan, if one exists, for the land prepared by a trained forester or any other person with adequate knowledge of timber management practices;
     (e) If a timber management plan exists, an explanation of the nature and extent to which the management plan has been implemented;
     (f) Whether the land is used for grazing;
     (g) Whether the land has been subdivided or a plat has been filed with respect to the land;
     (h) Whether the land and the applicant are in compliance with the restocking, forest management, fire protection, insect and disease control, and forest debris provisions of Title 76 RCW or any applicable rules under Title 76 RCW;
     (i) Whether the land is subject to forest fire protection assessments under RCW 76.04.610;
     (j) Whether the land is subject to a lease, option, or other right that permits it to be used for any purpose other than growing and harvesting timber;
     (k) A summary of the past experience and activity of the applicant in growing and harvesting timber;
     (l) A summary of current and continuing activity of the applicant in growing and harvesting timber;
     (m) A statement that the applicant is aware of the potential tax liability involved when the land ceases to be designated as forest land;
     (n) An affirmation that the statements contained in the application are true and that the land described in the application meets the definition of forest land in RCW 84.33.035; and
     (o) A description and/or drawing showing what areas of land for which designation is sought are used for incidental uses compatible with the definition of forest land in RCW 84.33.035.
     (5) The assessor shall afford the applicant an opportunity to be heard if the applicant so requests.
     (6) The assessor shall act upon the application with due regard to all relevant evidence and without any one or more items of evidence necessarily being determinative, except that the application may be denied for one of the following reasons, without regard to other items:
     (a) The land does not contain a "merchantable stand of timber" as defined in chapter 76.09 RCW and applicable rules. This reason shall not alone be sufficient to deny the application (i) if the land has been recently harvested or supports a growth of brush or noncommercial type timber, and the application includes a plan for restocking within three years or a longer period necessitated by unavailability of seed or seedlings, or (ii) if only isolated areas within the land do not meet the minimum standards due to rock outcroppings, swamps, unproductive soil or other natural conditions;
     (b) The applicant, with respect to the land, has failed to comply with a final administrative or judicial order with respect to a violation of the restocking, forest management, fire protection, insect and disease control, and forest debris provisions of Title 76 RCW or any applicable rules under Title 76 RCW; or
     (c) The land abuts a body of salt water and lies between the line of ordinary high tide and a line paralleling the ordinary high tide line and two hundred feet horizontally landward from the high tide line. However, if the assessor determines that a higher and better use exists for the land but this use would not be permitted or economically feasible by virtue of any federal, state, or local law or regulation, the land shall be assessed and valued under RCW 84.33.140 without being designated as forest land.
     (7) The application shall be deemed to have been approved unless, prior to ((May)) July 1st of the year after the application was mailed or delivered to the assessor, the assessor notifies the applicant in writing of the extent to which the application is denied.
     (8) An owner who receives notice that his or her application has been denied, in whole or in part, may appeal the denial to the county board of equalization in accordance with the provisions of RCW 84.40.038.

Sec. 3   RCW 84.33.140 and 2005 c 303 s 13 are each amended to read as follows:
     (1) When land has been designated as forest land under RCW 84.33.130, a notation of the designation shall be made each year upon the assessment and tax rolls. A copy of the notice of approval together with the legal description or assessor's parcel numbers for the land shall, at the expense of the applicant, be filed by the assessor in the same manner as deeds are recorded.
     (2) In preparing the assessment roll as of January 1, 2002, for taxes payable in 2003 and each January 1st thereafter, the assessor shall list each parcel of designated forest land at a value with respect to the grade and class provided in this subsection and adjusted as provided in subsection (3) of this section. The assessor shall compute the assessed value of the land using the same assessment ratio applied generally in computing the assessed value of other property in the county. Values for the several grades of bare forest land shall be as follows:

LAND
GRADE		OPERABILITY
CLASS		VALUES
PER ACRE
 1$234
12 229
 3 217
 4 157
 1 198
22 190
 3 183
 4 132
 1 154
32 149
 3 148
 4 113
 1 117
42 114
 3 113
 4 86
 1 85
52 78
 3 77
 4 52
 1 43
62 39
 3 39
 4 37
 1 21
72 21
 3 20
 4 20
8  1

     (3) On or before December 31, 2001, the department shall adjust by rule under chapter 34.05 RCW, the forest land values contained in subsection (2) of this section in accordance with this subsection, and shall certify the adjusted values to the assessor who will use these values in preparing the assessment roll as of January 1, 2002. For the adjustment to be made on or before December 31, 2001, for use in the 2002 assessment year, the department shall:
     (a) Divide the aggregate value of all timber harvested within the state between July 1, 1996, and June 30, 2001, by the aggregate harvest volume for the same period, as determined from the harvester excise tax returns filed with the department under RCW 84.33.074; and
     (b) Divide the aggregate value of all timber harvested within the state between July 1, 1995, and June 30, 2000, by the aggregate harvest volume for the same period, as determined from the harvester excise tax returns filed with the department under RCW 84.33.074; and
     (c) Adjust the forest land values contained in subsection (2) of this section by a percentage equal to one-half of the percentage change in the average values of harvested timber reflected by comparing the resultant values calculated under (a) and (b) of this subsection.
     (4) For the adjustments to be made on or before December 31, 2002, and each succeeding year thereafter, the same procedure described in subsection (3) of this section shall be followed using harvester excise tax returns filed under RCW 84.33.074. However, this adjustment shall be made to the prior year's adjusted value, and the five-year periods for calculating average harvested timber values shall be successively one year more recent.
     (5) Land graded, assessed, and valued as forest land shall continue to be so graded, assessed, and valued until removal of designation by the assessor upon the occurrence of any of the following:
     (a) Receipt of notice from the owner to remove the designation;
     (b) Sale or transfer to an ownership making the land exempt from ad valorem taxation;
     (c) Sale or transfer of all or a portion of the land to a new owner, unless the new owner has signed a notice of forest land designation continuance, except transfer to an owner who is an heir or devisee of a deceased owner, shall not, by itself, result in removal of designation. The signed notice of continuance shall be attached to the real estate excise tax affidavit provided for in RCW 82.45.150. The notice of continuance shall be on a form prepared by the department. If the notice of continuance is not signed by the new owner and attached to the real estate excise tax affidavit, all compensating taxes calculated under subsection (11) of this section shall become due and payable by the seller or transferor at time of sale. The auditor shall not accept an instrument of conveyance regarding designated forest land for filing or recording unless the new owner has signed the notice of continuance or the compensating tax has been paid, as evidenced by the real estate excise tax stamp affixed thereto by the treasurer. The seller, transferor, or new owner may appeal the new assessed valuation calculated under subsection (11) of this section to the county board of equalization in accordance with the provisions of RCW 84.40.038. Jurisdiction is hereby conferred on the county board of equalization to hear these appeals;
     (d) Determination by the assessor, after giving the owner written notice and an opportunity to be heard, that:
     (i) The land is no longer primarily devoted to and used for growing and harvesting timber. However, land shall not be removed from designation if a governmental agency, organization, or other recipient identified in subsection (13) or (14) of this section as exempt from the payment of compensating tax has manifested its intent in writing or by other official action to acquire a property interest in the designated forest land by means of a transaction that qualifies for an exemption under subsection (13) or (14) of this section. The governmental agency, organization, or recipient shall annually provide the assessor of the county in which the land is located reasonable evidence in writing of the intent to acquire the designated land as long as the intent continues or within sixty days of a request by the assessor. The assessor may not request this evidence more than once in a calendar year;
     (ii) The owner has failed to comply with a final administrative or judicial order with respect to a violation of the restocking, forest management, fire protection, insect and disease control, and forest debris provisions of Title 76 RCW or any applicable rules under Title 76 RCW; or
     (iii) Restocking has not occurred to the extent or within the time specified in the application for designation of such land.
     (6) Land shall not be removed from designation if there is a governmental restriction that prohibits, in whole or in part, the owner from harvesting timber from the owner's designated forest land. If only a portion of the parcel is impacted by governmental restrictions of this nature, the restrictions cannot be used as a basis to remove the remainder of the forest land from designation under this chapter. For the purposes of this section, "governmental restrictions" includes: (a) Any law, regulation, rule, ordinance, program, or other action adopted or taken by a federal, state, county, city, or other governmental entity; or (b) the land's zoning or its presence within an urban growth area designated under RCW 36.70A.110.
     (7) The assessor shall have the option of requiring an owner of forest land to file a timber management plan with the assessor upon the occurrence of one of the following:
     (a) An application for designation as forest land is submitted; ((or))
     (b) Designated forest land is sold or transferred and a notice of continuance, described in subsection (5)(c) of this section, is signed; or
     (c) The assessor has reason to believe that the land is no longer being used as designated forest land. In this case, the assessor can require such a plan to determine whether the land can continue as designated forest land.
     (8) If land is removed from designation because of any of the circumstances listed in subsection (5)(a) through (c) of this section, the removal shall apply only to the land affected. If land is removed from designation because of subsection (5)(d) of this section, the removal shall apply only to the actual area of land that is no longer primarily devoted to the growing and harvesting of timber, without regard to any other land that may have been included in the application and approved for designation, as long as the remaining designated forest land meets the definition of forest land contained in RCW 84.33.035.
     (9) Within thirty days after the removal of designation as forest land, the assessor shall notify the owner in writing, setting forth the reasons for the removal. The seller, transferor, or owner may appeal the removal to the county board of equalization in accordance with the provisions of RCW 84.40.038.
     (10) Unless the removal is reversed on appeal a copy of the notice of removal with a notation of the action, if any, upon appeal, together with the legal description or assessor's parcel numbers for the land removed from designation shall, at the expense of the applicant, be filed by the assessor in the same manner as deeds are recorded and a notation of removal from designation shall immediately be made upon the assessment and tax rolls. The assessor shall revalue the land to be removed with reference to its true and fair value as of January 1st of the year of removal from designation. Both the assessed value before and after the removal of designation shall be listed. Taxes based on the value of the land as forest land shall be assessed and payable up until the date of removal and taxes based on the true and fair value of the land shall be assessed and payable from the date of removal from designation.
     (11) Except as provided in subsection (5)(c), (13), or (14) of this section, a compensating tax shall be imposed on land removed from designation as forest land. The compensating tax shall be due and payable to the treasurer thirty days after the owner is notified of the amount of this tax. As soon as possible after the land is removed from designation, the assessor shall compute the amount of compensating tax and mail a notice to the owner of the amount of compensating tax owed and the date on which payment of this tax is due. The amount of compensating tax shall be equal to the difference between the amount of tax last levied on the land as designated forest land and an amount equal to the new assessed value of the land multiplied by the dollar rate of the last levy extended against the land, multiplied by a number, in no event greater than nine, equal to the number of years for which the land was designated as forest land, plus compensating taxes on the land at forest land values up until the date of removal and the prorated taxes on the land at true and fair value from the date of removal to the end of the current tax year.
     (12) Compensating tax, together with applicable interest thereon, shall become a lien on the land which shall attach at the time the land is removed from designation as forest land and shall have priority to and shall be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation, or responsibility to or with which the land may become charged or liable. The lien may be foreclosed upon expiration of the same period after delinquency and in the same manner provided by law for foreclosure of liens for delinquent real property taxes as provided in RCW 84.64.050. Any compensating tax unpaid on its due date shall thereupon become delinquent. From the date of delinquency until paid, interest shall be charged at the same rate applied by law to delinquent ad valorem property taxes.
     (13) The compensating tax specified in subsection (11) of this section shall not be imposed if the removal of designation under subsection (5) of this section resulted solely from:
     (a) Transfer to a government entity in exchange for other forest land located within the state of Washington;
     (b) A taking through the exercise of the power of eminent domain, or sale or transfer to an entity having the power of eminent domain in anticipation of the exercise of such power;
     (c) A donation of fee title, development rights, or the right to harvest timber, to a government agency or organization qualified under RCW 84.34.210 and 64.04.130 for the purposes enumerated in those sections, or the sale or transfer of fee title to a governmental entity or a nonprofit nature conservancy corporation, as defined in RCW 64.04.130, exclusively for the protection and conservation of lands recommended for state natural area preserve purposes by the natural heritage council and natural heritage plan as defined in chapter 79.70 RCW or approved for state natural resources conservation area purposes as defined in chapter 79.71 RCW. At such time as the land is not used for the purposes enumerated, the compensating tax specified in subsection (11) of this section shall be imposed upon the current owner;
     (d) The sale or transfer of fee title to the parks and recreation commission for park and recreation purposes;
     (e) Official action by an agency of the state of Washington or by the county or city within which the land is located that disallows the present use of the land;
     (f) The creation, sale, or transfer of forestry riparian easements under RCW 76.13.120;
     (g) The creation, sale, or transfer of a fee interest or a conservation easement for the riparian open space program under RCW 76.09.040; or
     (h) The sale or transfer of land within two years after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified forest land, designated as forest land under this chapter, or classified under chapter 84.34 RCW continuously since 1993. The date of death shown on a death certificate is the date used for the purposes of this subsection (((13)(h); or
     (i) The sale or transfer of land after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified forest land, designated as forest land under this chapter, or classified under chapter 84.34 RCW continuously since 1993 and the sale or transfer takes place after July 22, 2001, and on or before July 22, 2003, and the death of the owner occurred after January 1, 1991. The date of death shown on a death certificate is the date used for the purposes of this subsection (13)(i))).
     (14) In a county with a population of more than one million inhabitants, the compensating tax specified in subsection (11) of this section shall not be imposed if the removal of designation as forest land under subsection (5) of this section resulted solely from:
     (a) An action described in subsection (13) of this section; or
     (b) A transfer of a property interest to a government entity, or to a nonprofit historic preservation corporation or nonprofit nature conservancy corporation, as defined in RCW 64.04.130, to protect or enhance public resources, or to preserve, maintain, improve, restore, limit the future use of, or otherwise to conserve for public use or enjoyment, the property interest being transferred. At such time as the property interest is not used for the purposes enumerated, the compensating tax shall be imposed upon the current owner.

Sec. 4   RCW 84.33.145 and 2001 c 249 s 4 are each amended to read as follows:
     (1) If no later than thirty days after removal of designation under this chapter the owner applies for classification under RCW 84.34.020 (1)((,)) or (2), ((or (3),)) then the designated forest land shall not be considered removed from designation for purposes of the compensating tax under RCW 84.33.140 until the application for current use classification under chapter 84.34 RCW is denied or the property is removed from classification under RCW 84.34.108. Upon removal of classification under RCW 84.34.108, the amount of compensating tax due under this chapter shall be equal to:
     (a) The difference, if any, between the amount of tax last levied on the land as designated forest land and an amount equal to the new assessed valuation of the land when removed from classification under RCW 84.34.108 multiplied by the dollar rate of the last levy extended against the land, multiplied by
     (b) A number equal to:
     (i) The number of years the land was designated under this chapter, if the total number of years the land was designated under this chapter and classified under chapter 84.34 RCW is less than ten; or
     (ii) Ten minus the number of years the land was classified under chapter 84.34 RCW, if the total number of years the land was designated under this chapter and classified under chapter 84.34 RCW is at least ten.
     (2) Nothing in this section authorizes the continued designation under this chapter or defers or reduces the compensating tax imposed upon forest land not transferred to classification under subsection (1) of this section ((which)) that does not meet the definition of forest land under RCW 84.33.035. Nothing in this section affects the additional tax imposed under RCW 84.34.108.
     (3) In a county with a population of more than one million inhabitants, no amount of compensating tax is due under this section if the removal from classification under RCW 84.34.108 results from a transfer of property described in RCW 84.34.108(6).

Sec. 5   RCW 84.33.170 and 2001 c 249 s 5 are each amended to read as follows:
     Notwithstanding any provision of this chapter to the contrary, this chapter shall not exempt from the ad valorem tax nor subject to the excise tax imposed by this chapter, Christmas trees and short-rotation hardwoods, which are cultivated by agricultural methods, and the land on which the Christmas trees and short-rotation hardwoods stand shall not be taxed as provided in RCW 84.33.140. ((However, short-rotation hardwoods, which are cultivated by agricultural methods, on land classified as timber land under chapter 84.34 RCW, shall be subject to the excise tax imposed under this chapter.))

Sec. 6   RCW 84.34.020 and 2005 c 57 s 1 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)(i) 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:
     (A) 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
     (B) 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;
     (ii) For the purposes of (b)(i) of this subsection, "gross income from agricultural uses" includes, but is not limited to, the wholesale value of agricultural products donated to nonprofit food banks or feeding programs;
     (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)(A) 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)(i)(B) and (c)(ii) of this subsection;
     (d) Any lands including 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
     (e) 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.
     (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 timber for commercial purposes. Timber land means the land only and does not include a residential homesite. The term includes land used for incidental uses that are compatible with the growing and harvesting of timber but no more than ten percent of the land may be used for such incidental uses. It also includes the land on which appurtenances necessary for the production, preparation, or sale of the timber products exist in conjunction with land producing these products.
     (4))) "Current" or "currently" means as of the date on which property is to be listed and valued by the assessor.
     (((5))) (4) "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))) (5) "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))) (6) "Granting authority" means the appropriate agency or official who acts on an application for classification of land pursuant to this chapter.
     (((8))) (7) "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 84.34.030 and 1989 c 378 s 10 are each amended to read as follows:
     An owner of agricultural land desiring current use classification under ((subsection (2) of)) RCW 84.34.020(2) shall make application to the county assessor upon forms prepared by the state department of revenue and supplied by the county assessor. An owner of open space ((or timber)) land desiring current use classification under ((subsections (1) and (3) of)) RCW 84.34.020(1) shall make application to the county legislative authority upon forms prepared by the state department of revenue and supplied by the county assessor. The application shall be accompanied by a reasonable processing fee if ((such)) a processing fee is established by the city or county legislative authority. Said 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)) the land ceases to be designated as open space((,)) or farm and agricultural ((or timber)) land. 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.

Sec. 8   RCW 84.34.060 and 1997 c 429 s 32 are each amended to read as follows:
     In determining the true and fair value of open space land ((and timber land)), which has been classified as such under the provisions of this chapter, the assessor shall consider only the use to which such property and improvements is currently applied and shall not consider potential uses of such property. The assessed valuation of open space land shall not be less than the minimum value per acre of classified farm and agricultural land except that the assessed valuation of open space land may be valued based on the public benefit rating system adopted under RCW 84.34.055((: PROVIDED FURTHER, That timber land shall be valued according to chapter 84.33 RCW)). In valuing any tract or parcel of real property designated and zoned under a comprehensive plan adopted under chapter 36.70A RCW as agricultural((, forest,)) or open space land, the appraisal shall not be based on similar sales of parcels that have been converted to nonagricultural((, nonforest,)) or nonopen-space uses within five years after the sale.

Sec. 9   RCW 84.34.070 and 1992 c 69 s 10 are each amended to read as follows:
     (1) When land has once been classified under this chapter, it shall remain under such classification and shall not be applied to other use except as provided by subsection (2) of this section for at least ten years from the date of classification ((and)). It shall continue under such classification until and unless withdrawn from classification after notice of request for withdrawal shall be made by the owner. During any year after eight years of the initial ten-year classification period have elapsed, notice of request for withdrawal of all or a portion of the land may be given by the owner to the assessor or assessors of the county or counties in which ((such)) the land is situated. In the event that a portion of a parcel is removed from classification, the remaining portion must meet the same requirements as did the entire parcel when ((such)) the land was originally granted classification ((pursuant to)) under this chapter unless the remaining parcel has different income criteria. Within seven days the assessor shall transmit one copy of ((such)) the notice to the legislative body ((which)) that originally approved the application. The assessor or assessors, as the case may be, shall, when two assessment years have elapsed following the date of receipt of ((such)) the notice, withdraw ((such)) the land from ((such)) the classification and the land shall be subject to the additional tax and applicable interest due under RCW 84.34.108. The open space taxation agreement to tax according to use shall not be considered to be a contract and can be abrogated at any time by the legislature in which event no additional tax or penalty shall be imposed.
     (2) The following reclassifications are not considered withdrawals or removals and are not subject to additional tax under RCW 84.34.108:
     (a) ((Reclassification between lands under RCW 84.34.020 (2) and (3);
     (b))) Reclassification of land classified under RCW 84.34.020(2) ((or (3))) or chapter 84.33 RCW to open space land under RCW 84.34.020(1);
     (((c))) (b) Reclassification of land classified under RCW 84.34.020(2) ((or (3))) to forest land ((classified)) designated under chapter 84.33 RCW; and
     (((d))) (c) Reclassification of land classified as open space land under RCW 84.34.020(1)(c) and reclassified to farm and agricultural land under RCW 84.34.020(2) if the land had been previously classified as farm and agricultural land under RCW 84.34.020(2).
     (3) Applications for reclassification shall be subject to applicable provisions of RCW 84.34.037, 84.34.035, ((84.34.041,)) and chapter 84.33 RCW.
     (4) The income criteria for land classified under RCW 84.34.020(2) (b) and (c) may be deferred for land being reclassified from land classified under RCW 84.34.020(1)(c) ((or (3))), or chapter 84.33 RCW into RCW 84.34.020(2) (b) or (c) for a period of up to five years from the date of reclassification.

Sec. 10   RCW 84.34.080 and 1999 sp.s. c 4 s 705 are each amended to read as follows:
     When land which has been classified under this chapter as open space land((,)) or farm and agricultural land((, or timber land)) is applied to some other use, except through compliance with RCW 84.34.070, or except as a result solely from any one of the conditions listed in RCW 84.34.108(6), the owner shall within sixty days notify the county assessor of ((such)) the change in use and additional real property tax shall be imposed upon ((such)) the land in an amount equal to the sum of the following:
     (1) The total amount of the additional tax and applicable interest due under RCW 84.34.108; plus
     (2) A penalty amounting to twenty percent of the amount determined in subsection (1) of this section.

Sec. 11   RCW 84.34.108 and 2003 c 170 s 6 are each amended to read as follows:
     (1) When land has once been classified under this chapter, a notation of the classification shall be made each year upon the assessment and tax rolls and the land shall be valued pursuant to RCW 84.34.060 or 84.34.065 until removal of all or a portion of the classification by the assessor upon occurrence of any of the following:
     (a) Receipt of notice from the owner to remove all or a portion of the classification;
     (b) Sale or transfer to an ownership, except a transfer that resulted 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 property for the same use as before, making all or a portion of the land exempt from ad valorem taxation;
     (c) Sale or transfer of all or a portion of the land to a new owner, unless the new owner has signed a notice of classification continuance, except transfer to an owner who is an heir or devisee of a deceased owner shall not, by itself, result in removal of classification. The notice of continuance shall be on a form prepared by the department. If the notice of continuance is not signed by the new owner and attached to the real estate excise tax affidavit, all additional taxes calculated pursuant to subsection (4) of this section shall become due and payable by the seller or transferor at time of sale. The auditor shall not accept an instrument of conveyance regarding classified land for filing or recording unless the new owner has signed the notice of continuance or the additional tax has been paid, as evidenced by the real estate excise tax stamp affixed thereto by the treasurer. The seller, transferor, or new owner may appeal the new assessed valuation calculated under subsection (4) of this section to the county board of equalization in accordance with the provisions of RCW 84.40.038. Jurisdiction is hereby conferred on the county board of equalization to hear these appeals;
     (d) Determination by the assessor, after giving the owner written notice and an opportunity to be heard, that all or a portion of the land no longer meets the criteria for classification under this chapter. The criteria for classification pursuant to this chapter continue to apply after classification has been granted.
     The granting authority, upon request of an assessor, shall provide reasonable assistance to the assessor in making a determination whether the land continues to meet the qualifications of RCW 84.34.020(1) ((or (3))). The assistance shall be provided within thirty days of receipt of the request.
     (2) Land may not be removed from classification 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.
     (3) Within thirty days after ((such)) the removal of all or a portion of the land from current use classification, the assessor shall notify the owner in writing, setting forth the reasons for the removal. The seller, transferor, or owner may appeal the removal to the county board of equalization in accordance with the provisions of RCW 84.40.038.
     (4) Unless the removal is reversed on appeal, the assessor shall revalue the affected land with reference to its true and fair value on January 1st of the year of removal from classification. Both the assessed valuation before and after the removal of classification shall be listed and taxes shall be allocated according to that part of the year to which each assessed valuation applies. Except as provided in subsection (6) of this section, an additional tax, applicable interest, and penalty shall be imposed which shall be due and payable to the treasurer thirty days after the owner is notified of the amount of the additional tax. As soon as possible, the assessor shall compute the amount of additional tax, applicable interest, and penalty and the treasurer shall mail notice to the owner of the amount thereof and the date on which payment is due. The amount of the 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 paid as "open space land"((,)) or "farm and agricultural land"((, or "timber land")) and the amount of property tax otherwise due and payable for the seven years last past had the land not been so classified;
     (b) The amount of applicable interest shall be equal to the interest upon the amounts of the additional tax paid at the same statutory rate charged on delinquent property taxes from the dates on which the additional tax could have been paid without penalty if the land had been assessed at a value without regard to this chapter;
     (c) The amount of the penalty shall be as provided in RCW 84.34.080. The penalty shall not be imposed if the removal satisfies the conditions of RCW 84.34.070.
     (5) Additional tax, applicable interest, and penalty, shall become a lien on the land ((which)) that shall attach at the time the land is removed from classification under this chapter and shall have priority to and shall be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation or responsibility to or with which the land may become charged or liable. This lien may be foreclosed upon expiration of the same period after delinquency and in the same manner provided by law for foreclosure of liens for delinquent real property taxes as provided in RCW 84.64.050 now or as hereafter amended. Any additional tax unpaid on its due date shall thereupon become delinquent. From the date of delinquency until paid, interest shall be charged at the same rate applied by law to delinquent ad valorem property taxes.
     (6) The additional tax, applicable interest, and penalty specified in subsection (4) of this section shall not be imposed if the removal of classification ((pursuant to)) under subsection (1) of this section resulted solely from:
     (a) Transfer to a government entity in exchange for other land located within the state of Washington;
     (b)(i) A taking through the exercise of the power of eminent domain, or (ii) sale or transfer to an entity having the power of eminent domain in anticipation of the exercise of such power, said entity having manifested its intent 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 the property;
     (d) Official action by an agency of the state of Washington or by the county or city within which the land is located which disallows the present use of the land;
     (e) Transfer of land to a church when the land would qualify for exemption ((pursuant to)) under RCW 84.36.020;
     (f) Acquisition of property interests by state agencies or agencies or organizations qualified under RCW 84.34.210 and 64.04.130 for the purposes enumerated in those sections. At such time as these property interests are not used for the purposes enumerated in RCW 84.34.210 and 64.04.130 the additional tax specified in subsection (4) of this section shall be imposed;
     (g) Removal of land classified as farm and agricultural land under RCW 84.34.020(2)(e);
     (h) Removal of land from classification after enactment of a statutory exemption that qualifies the land for exemption and receipt of notice from the owner to remove the land from classification;
     (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 after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified forest land, designated as forest land under chapter 84.33 RCW, or classified under this chapter continuously since 1993. The date of death shown on a death certificate is the date used for the purposes of this subsection (((6)(k); or
     (l) The sale or transfer of land after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified forest land, designated as forest land under chapter 84.33 RCW, or classified under this chapter continuously since 1993 and the sale or transfer takes place after July 22, 2001, and on or before July 22, 2003, and the death of the owner occurred after January 1, 1991. The date of death shown on a death certificate is the date used for the purpose of this subsection (6)(l))).

Sec. 12   RCW 84.34.145 and 1998 c 311 s 17 are each amended to read as follows:
     The county legislative authority shall appoint a five member committee representing the active farming community within the county to serve in an advisory capacity to the assessor in implementing assessment guidelines as established by the department of revenue for the assessment of open space((,)) and farm((s)) and agricultural land((s, and timber lands)) classified under ((this)) chapter 84.34 RCW.

Sec. 13   RCW 84.34.155 and 1992 c 69 s 15 are each amended to read as follows:
     Land classified under the provisions of RCW 84.34.020(2) ((or (3) which)) that meets the definition of forest land under the provisions of chapter 84.33 RCW, upon request for ((such change)) reclassification made by the owner to the granting authority, shall be reclassified by the assessor under the provisions of chapter 84.33 RCW. This change in classification shall be made without additional tax, applicable interest, penalty, or other requirements set forth in chapter 84.34 RCW((: PROVIDED, That subsequent to such)). After reclassification, the land shall be fully subject to the provisions of chapter 84.33 RCW((, as now or hereafter amended)).

Sec. 14   RCW 84.34.210 and 1993 c 248 s 1 are each amended to read as follows:
     Any county, city, town, metropolitan park district, metropolitan municipal corporation, nonprofit historic preservation corporation as defined in RCW 64.04.130, or nonprofit nature conservancy corporation or association, as such are defined in RCW 84.34.250, may acquire by purchase, gift, grant, bequest, devise, lease, or otherwise, except by eminent domain, the fee simple or any lesser interest, development right, easement, covenant, or other contractual right necessary to protect, preserve, maintain, improve, restore, limit the future use of, or otherwise conserve, selected open space land((,)) and farm and agricultural land((, and timber land as such)) as these are defined in chapter 84.34 RCW for public use or enjoyment. Among interests that may be so acquired are mineral rights. Any county, city, town, metropolitan park district, metropolitan municipal corporation, nonprofit historic preservation corporation as defined in RCW 64.04.130, or nonprofit nature conservancy corporation or association, as ((such are)) defined in RCW 84.34.250, may acquire ((such)) the property for the purpose of conveying or leasing the property back to its original owner or other person under such covenants or other contractual arrangements as will limit the future use of the property in accordance with the purposes of chapter 243, Laws of 1971 ex. sess.; i.e., conservation futures.

Sec. 15   RCW 84.34.220 and 1993 c 248 s 2 are each amended to read as follows:
     In accordance with the authority granted in RCW 84.34.210, a county, city, town, metropolitan park district, metropolitan municipal corporation, nonprofit historic preservation corporation as defined in RCW 64.04.130, or nonprofit nature conservancy corporation or association, as ((such are)) defined in RCW 84.34.250, may specifically purchase or otherwise acquire, except by eminent domain, rights in perpetuity to future development of any open space land((,)) and farm and agricultural land((, and timber land which are so designated under the provisions of chapter 84.34 RCW)) that are classified and taxed at current use assessment ((as provided by that chapter)) under the provisions of chapter 84.34 RCW. For the purposes of chapter 243, Laws of 1971 ex. sess., ((such)) the developmental rights shall be termed "conservation futures". The private owner may retain the right to continue any existing open space use of the land, and to develop any other open space use, but, under the terms of purchase of conservation futures, the county, city, town, metropolitan park district, metropolitan municipal corporation, nonprofit historic preservation corporation as defined in RCW 64.04.130, or nonprofit nature conservancy corporation or association, as ((such are)) defined in RCW 84.34.250, may forbid or restrict building thereon, or may require that improvements cannot be made without county, city, town, metropolitan park district, metropolitan municipal corporation, nonprofit historic preservation corporation as defined in RCW 64.04.130, or nonprofit nature conservancy corporation or association, as ((such are)) defined in RCW 84.34.250, permission. The land may be alienated or sold and used as formerly by the new owner, subject to the terms of the agreement made by the county, city, town, metropolitan park district, metropolitan municipal corporation, nonprofit historic preservation corporation as defined in RCW 64.04.130, or nonprofit nature conservancy corporation or association, as ((such are)) defined in RCW 84.34.250, with the original owner.

Sec. 16   RCW 84.34.300 and 1992 c 52 s 14 are each amended to read as follows:
     The legislature finds that farming((, timber production,)) and the related agricultural ((and forest)) industries have historically been and currently are central factors in the economic and social lifeblood of the state; that it is a fundamental policy of the state to protect agricultural ((and timber)) lands as a major natural resource in order to maintain a source to supply a wide range of agricultural ((and forest)) products; and that the public interest in the protection and stimulation of farming((, timber production,)) and the agricultural ((and forest)) industries is a basic element of enhancing the economic viability of this state. The legislature further finds that farm land ((and timber land)) in urbanizing areas ((are)) is often subjected to high levels of property taxation and benefit assessment, and that ((such)) the levels of taxation and assessment encourage and even force the removal of such lands from agricultural ((and forest)) uses. The legislature further finds that because of this level of taxation and assessment, ((such)) the farm land ((and timber land)) in urbanizing areas ((are)) is either converted to nonagricultural ((and nonforest)) uses when significant amounts of nearby nonagricultural ((and nonforest)) area could be suitably used for ((such)) nonagricultural ((and nonforest)) uses, or, much of this farm land ((and timber land)) is left in an unused state. The legislature further finds that with the approval by the voters of the Fifty-third Amendment to the state Constitution, and with the enactment of chapter 84.34 RCW, the owners of farm lands ((and timber lands)) were provided with an opportunity to have ((such)) the land valued on the basis of its current use and not its "highest and best use" and that such current use valuation is one mechanism to protect agricultural ((and timber)) lands. The legislature further finds that despite this potential property tax reduction, farm lands ((and timber lands)) in urbanized areas are still subject to high levels of benefit assessments and continue to be removed from farm ((and forest)) uses.
     It is therefore the purpose of the legislature to establish, with the enactment of RCW 84.34.300 through 84.34.380, another mechanism to protect agricultural ((and timber)) land ((which)) that creates an analogous system of relief from certain benefit assessments for farm and agricultural land ((and timber land)). It is the intent of the legislature that special benefit assessments not be imposed for the availability of sanitary and/or storm sewerage service, or domestic water service, or for road construction and/or improvement purposes on farm and agricultural lands ((and timber lands which)) that have been ((designated for)) granted current use classification as farm and agricultural lands ((or timber lands)) until ((such)) the lands are withdrawn or removed from ((such)) classification or unless ((such)) the lands benefit from or cause the need for the local improvement district.
     The legislature finds, and it is the intent of RCW 84.34.300 through 84.34.380 and 84.34.922, that special benefit assessments for the improvement or construction of sanitary and/or storm sewerage service, or domestic water service, or certain road construction do not generally benefit land ((which)) that has been classified as open space farm and agricultural land ((or timber land)) under the open space act, chapter 84.34 RCW, until ((such)) the land is withdrawn or removed from ((such)) classification or ((such)) the land is used for a more intense and nonagricultural use((, or the land is no longer used as timber land)). The purpose of RCW 84.34.300 through 84.34.380 and 84.34.922 is to provide an exemption from certain special benefit assessments ((which)) that do not benefit ((timber land or)) open space farm and agricultural land, and to provide the means for local governmental entities to recover ((such)) the assessments in current dollar value in the event ((such)) the land is no longer devoted to farming ((or timber)) production under chapter 84.34 RCW. ((Where)) When the owner of such land chooses to make limited use of improvements related to special benefit assessments, RCW 84.34.300 through 84.34.380 provides the means for the partial assessment on open space ((timber and)) farm land to the extent the land is directly benefited by the improvement.

Sec. 17   RCW 84.34.310 and 1999 c 153 s 71 are each amended to read as follows:
     As used in RCW 84.34.300 through 84.34.380, unless a different meaning is required, the words defined in this section shall have the meanings indicated.
     (1) "Farm and agricultural land" shall mean the same as defined in RCW 84.34.020(2).
     (2) (("Timber land" shall mean the same as defined in RCW 84.34.020(3).
     (3))) "Local government" shall mean any city, town, county, water-sewer district, public utility district, port district, irrigation district, flood control district, or any other municipal corporation, quasi-municipal corporation, or other political subdivision authorized to levy special benefit assessments for sanitary and/or storm sewerage systems, domestic water supply and/or distribution systems, or road construction or improvement purposes.
     (((4))) (3) "Local improvement district" shall mean any local improvement district, utility local improvement district, local utility district, road improvement district, or any similar unit created by a local government for the purpose of levying special benefit assessments against property specially benefited by improvements relating to such districts.
     (((5))) (4) "Owner" shall mean the same as defined in RCW 84.34.020(((5))) (4) or the applicable statutes relating to special benefit assessments.
     (((6))) (5) The term "average rate of inflation" shall mean the annual rate of inflation as determined by the department of revenue averaged over the period of time as provided in RCW 84.34.330 (1) and (2). ((Such)) This determination shall be published in the form of a rule not later than January 1 of each year for use in that assessment year.
     (((7))) (6) "Special benefit assessments" shall mean special assessments levied or capable of being levied in any local improvement district or otherwise levied or capable of being levied by a local government to pay for all or part of the costs of a local improvement and which may be levied only for the special benefits to be realized by property by reason of that local improvement.

Sec. 18   RCW 84.34.320 and 1992 c 69 s 17 and 1992 c 52 s 16 are each reenacted and amended to read as follows:
     Any land classified as farm and agricultural land ((or timber land pursuant to)) under chapter 84.34 RCW at the earlier of the times the legislative authority of a local government adopts a resolution, ordinance, or legislative act (1) to create a local improvement district, in which such land is included or would have been included but for ((such)) its classification, or (2) to approve or confirm a final special benefit assessment roll relating to a sanitary and/or storm sewerage system, domestic water supply and/or distribution system, or road construction and/or improvement, which roll would have included ((such)) the land but for ((such)) its classification, shall be exempt from special benefit assessments or charges in lieu of assessment for such purposes as long as that land remains in ((such)) classification, except as otherwise provided in RCW 84.34.360.
     Whenever a local government creates a local improvement district, the levying, collection and enforcement of assessments shall be in the manner and subject to the same procedures and limitations as are provided ((pursuant to)) under the law concerning the initiation and formation of local improvement districts for the particular local government. Notice of the creation of a local improvement district that includes farm and agricultural land ((or timber land)) shall be filed with the county assessor and the legislative authority of the county in which ((such)) the land is located. The assessor, upon receiving notice of the creation of ((such)) a local improvement district, shall send a notice to the owner of the farm and agricultural land ((or timber land)) listed on the tax rolls of the applicable county treasurer of: (1) The creation of the local improvement district; (2) the exemption of that land from special benefit assessments; (3) the fact that the farm and agricultural land ((or timber land)) may become subject to the special benefit assessments if the owner waives the exemption by filing a notarized document with the governing body of the local government creating the local improvement district before the confirmation of the final special benefit assessment roll; and (4) the potential liability, ((pursuant to)) under RCW 84.34.330, if the exemption is not waived and the land is subsequently withdrawn or removed from the farm and agricultural land ((or timber land status)) classification. When a local government approves and confirms a special benefit assessment roll, from which farm and agricultural land ((or timber land)) has been exempted ((pursuant to)) under this section, it shall file a notice of ((such)) this action with the assessor and the legislative authority of the county in which ((such)) the land is located and with the treasurer of that local government((, which)). The notice shall describe the action taken, the type of improvement involved, the land exempted, and the amount of the special benefit assessment ((which)) that would have been levied against the land if it had not been exempted. The filing of ((such)) this notice with the assessor and the treasurer of that local government shall constitute constructive notice to a purchaser or encumbrancer of the affected land, and every person whose conveyance or encumbrance is subsequently executed or subsequently recorded, that ((such)) the exempt land is subject to the charges provided in RCW 84.34.330 and 84.34.340 if ((such)) the land is withdrawn or removed from its current use classification as farm and agricultural land ((or timber land)).
     The owner of the land exempted from special benefit assessments ((pursuant to)) under this section may waive that exemption by filing a notarized document to that effect with the legislative authority of the local government upon receiving notice from said local government concerning the assessment roll hearing and before the local government confirms the final special benefit assessment roll. A copy of that waiver shall be filed by the local government with the assessor, but the failure of such filing shall not affect the waiver.
     Except to the extent provided in RCW 84.34.360, the local government shall have no duty to furnish service from the improvement financed by the special benefit assessment to ((such)) the exempted land.

Sec. 19   RCW 84.34.330 and 1992 c 52 s 17 are each amended to read as follows:
     Whenever farm and agricultural land ((or timber land)) has once been exempted from special benefit assessments ((pursuant to)) under RCW 84.34.320, any withdrawal or removal from classification or change in use from farm and agricultural land ((or timber land)) under chapter 84.34 RCW shall result in the following:
     (1) If the bonds used to fund the improvement in the local improvement district have not been completely retired, ((such)) the land shall immediately become liable for: (a) The amount of the special benefit assessment listed in the notice provided for in RCW 84.34.320; plus (b) interest on the amount determined in (1)(a) of this section, compounded annually at a rate equal to the average rate of inflation from the time the initial notice is filed by the governmental entity ((which)) that created the local improvement district as provided in RCW 84.34.320 to the time the owner withdraws ((such)) or removes the land from the exemption category provided by this chapter; or
     (2) If the bonds used to fund the improvement in the local improvement district have been completely retired, ((such)) the land shall immediately become liable for: (a) The amount of the special benefit assessment listed in the notice provided for in RCW 84.34.320; plus (b) interest on the amount determined in (2)(a) of this section compounded annually at a rate equal to the average rate of inflation from the time the initial notice is filed by the governmental entity ((which)) that created the local improvement district as provided in RCW 84.34.320, to the time the bonds used to fund the improvement have been retired; plus (c) interest on the total amount determined in (2)(a) and (b) of this section at a simple per annum rate equal to the average rate of inflation from the time the bonds used to fund the improvement have been retired to the time the owner withdraws ((such)) or removes the lands from the exemption category provided by this chapter.
     (3) The amount payable ((pursuant to)) under this section shall become due on the date ((such)) the land is withdrawn or removed from its current use ((or timber land)) classification and shall be a lien on the land prior and superior to any other lien whatsoever except for the lien for general taxes, and shall be enforceable in the same manner as the collection of special benefit assessments are enforced by that local government.

Sec. 20   RCW 84.34.340 and 1992 c 52 s 18 are each amended to read as follows:
     Whenever farm and agricultural land ((or timber land)) is withdrawn or removed from its current use classification as farm and agricultural land ((or timber land)), the county assessor of the county in which ((such)) the land is located shall forthwith give written notice of ((such)) the withdrawal or removal to the local government or its successor ((which had)) that filed with the assessor the notice required by RCW 84.34.320. Upon receipt of the notice from the assessor, the local government shall mail a written statement to the owner of ((such)) the land for the amounts payable as provided in RCW 84.34.330. ((Such)) The amounts due shall be delinquent if not paid within one hundred and eighty days after the date of mailing of the statement, and shall be subject to the same interest, penalties, lien priority, and enforcement procedures that are applicable to delinquent assessments on the assessment roll from which that land had been exempted, except that the rate of interest charged shall not exceed the rate provided in RCW 84.34.330.

Sec. 21   RCW 84.34.360 and 1992 c 69 s 18 and 1992 c 52 s 19 are each reenacted and amended to read as follows:
     The department of revenue shall adopt rules it shall deem necessary to implement RCW 84.34.300 through 84.34.380 ((which)) that shall include, but not be limited to, procedures to determine the extent to which a portion of the land otherwise exempt may be subject to a special benefit assessment for the actual connection to the domestic water system or sewerage facilities, and further to determine the extent to which all or a portion of ((such)) the land may be subject to a special benefit assessment for access to the road improvement in relation to its value as farm and agricultural land ((or timber land)) as distinguished from its value under more intensive uses. The provision for limited special benefit assessments shall not relieve ((such)) the land from liability for the amounts provided in RCW 84.34.330 and 84.34.340 when ((such)) the land is withdrawn or removed from its current use classification as farm and agricultural land ((or timber land)).

Sec. 22   RCW 84.34.370 and 1992 c 52 s 20 are each amended to read as follows:
     Whenever a portion of a parcel of land ((which)) that was classified as farm and agricultural ((or timber land pursuant to)) land under this chapter is withdrawn or removed from classification or there is a change in use, and ((such)) the land has been exempted from any benefit assessments ((pursuant to)) under RCW 84.34.320, the previously exempt benefit assessments shall become due on only that portion of the land ((which)) that is withdrawn or changed.

Sec. 23   RCW 84.34.380 and 1992 c 52 s 21 are each amended to read as follows:
     Farm and agricultural land ((or timber land)) on which the right to future development has been acquired by any local government, the state of Washington, or the United States government shall be exempt from special benefit assessments in lieu of assessment for ((such)) the purposes in the same manner, and under the same liabilities for payment and interest, as land classified under this chapter as farm and agricultural land ((or timber land)), for as long as ((such)) the classification applies.
     Any interest, development right, easement, covenant, or other contractual right ((which)) that effectively protects, preserves, maintains, improves, restores, prevents the future nonagricultural ((or nonforest)) use of, or otherwise conserves farm and agricultural land ((or timber land)) shall be exempt from special benefit assessments as long as ((such)) the development right or other such interest effectively serves to prevent nonagricultural ((or nonforest)) development of ((such)) the land.

NEW SECTION.  Sec. 24   The following acts or parts of acts are each repealed:
     (1) RCW 84.33.077 (Credit for property taxes paid on timber on public land) and 1984 c 204 s 21 & 1983 1st ex.s. c 62 s 8;
     (2) RCW 84.34.041 (Application for current use classification--Forms -- Public hearing -- Approval or denial) and 2002 c 315 s 2 & 1992 c 69 s 20; and
     (3) RCW 84.34.131 (Valuation of timber not affected) and 1998 c 311 s 15 & 1973 1st ex.s. c 212 s 16.

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