Original Notice.

Preproposal statement of inquiry was filed as WSR 00-05-074.

Title of Rule: Amending WAC 458-30-200 Definitions, 458-30-275 Continuing classification upon sale or transfer of ownership, 458-30-285 Withdrawal from classification, 458-30-295 Removal of classification, 458-30-300 Additional tax -- Withdrawal or removal from classification, 458-30-305 Due date of additional tax, applicable interest, and penalty upon withdrawal or removal, 458-30-310 County recording authority -- County financial authority -- Duties, and 458-30-325 Transfer between classifications -- Application for reclassification; and repealing WAC 458-30-315 County financial authority -- Duties, and 458-30-350 Reclassification of lands classified under chapter 84.34 RCW prior to 1973.

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

Statutory Authority for Adoption: RCW 84.34.141.

Statute Being Implemented: RCW 84.34.070, 84.34.080, and 84.34.108.

Summary: WAC 458-30-200 defines the terms used to administer the open space program. WAC 458-30-275 explains the process followed when classified land is sold or transferred. WAC 458-30-285 describes the process to withdraw current use classification. WAC 458-30-295 lists the events or circumstances that trigger removal of land from classification and the removal process. WAC 458-30-300 explains the financial consequences of withdrawing or removing land from classification. This rule also describes the method used to calculate the additional tax, interest, and penalty imposed when land loses its classified status and the circumstances that are exempt from these charges. WAC 458-30-305 explains how the date upon which these charges is determined and the consequences of failing to pay these sums on the due date. WAC 458-30-310 describes the duties of the county auditor. WAC 458-30-315 outlines the duties of the county treasurer. WAC 458-30-325 establishes the process by the classification of land can be changed, that is reclassified. WAC 458-30-350 declares that land classified prior to July 16, 1973, that meets the criteria contained in chapter 84.34 RCW is hereby reclassified.

Reasons Supporting Proposal: Changes to these rules are being proposed at this time: To consolidate the definitions of terms used in administering the current use program; to clarify existing practices regarding the sale or transfer of classified land, the withdrawal and removal of land from classification, the date upon which additional tax, interest, and penalty are due when classified status is lost, and the reclassification process; to reflect 1999 changes made to RCW 84.34.108; and to merge two rules describing the overlapping duties of county auditors and treasurers. Additionally, one rule that merely repeats statutory language will be repealed.

Name of Agency Personnel Responsible for Drafting: Kim M. Qually, 1025 Union Avenue, Room 400, Olympia, WA, (360) 570-6113; Implementation and Enforcement: Sandy Guilfoil, 1025 Union Avenue, Room 200, Olympia, WA, (360) 570-5860.

Name of Proponent: Department of Revenue, governmental.

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

Explanation of Rule, its Purpose, and Anticipated Effects: WAC 458-30-200, 458-30-275, 458-30-285, 458-30-305, and 458-30-325 will be amended to clarify existing practices and procedures and to eliminate some areas of confusion that currently exist in the administration of the current use program. In particular, the proposed revision of WAC 458-30-200 consolidates definitions of terms previously scattered throughout chapter 458-30 WAC. Also, WAC 458-30-305 is being revised to clarify the date on which back taxes are due. WAC 458-30-325 is to be amended to clarify and eliminate confusion about the reclassification process.

Chapters 233 and 356, Laws of 1999, changed RCW 84.34.108 regarding conveying classified current use land and added a new exemption to the collection of back taxes when land is withdrawn or removed from classification. Chapter 4, Laws of 1999 1st sp. sess., also changed RCW 84.34.108 by adding two more exemptions to the list of circumstances under which no back taxes are collected when land is withdrawn or removed from current use classification. WAC 458-30-295 and 458-30-300 are being amended to reflect these statutory changes and to clarify removal and withdrawal procedures.

WAC 458-30-310 describes the duties of the county auditor. WAC 458-30-315 outlines the duties of the county treasurer. WAC 458-30-310 and 458-30-315 are being consolidated into WAC 458-30-310 because the duties of the two offices overlap and are somewhat interdependent. WAC 458-30-315 will be repealed.

WAC 458-30-350 declares that land classified prior to July 16, 1973, meeting the criteria contained in chapter 84.34 RCW is to be reclassified under the provisions of the Open Space Taxation Act, commonly referred to as the current use program. The rule is being repealed because it merely reiterates RCW 84.34.150.

Proposal Changes the Following Existing Rules: See descriptions above.

No small business economic impact statement has been prepared under chapter 19.85 RCW. A small business economic impact statement is not required because the rules and the proposed amendments do not impose any requirements or burdens upon small businesses that are not already specifically required by statute.

RCW 34.05.328 does not apply to this rule adoption. The proposed rules are interpretative rules as defined in RCW 34.05.328.

Hearing Location: Capital Plaza Building, 1025 Union Street, Room 400, Olympia, WA, on June 27, 2000, at 9:30 a.m.

Assistance for Persons with Disabilities: Contact Ginny Dale no later than ten days before the hearing date, TDD 1-800-451-7985, or (360) 586-0721.

Submit Written Comments to: Kim M. Qually, Department of Revenue, P.O. Box 47467, Olympia, WA 98504-7467, fax (360) 664-0693, e-mail kimq@dor.wa.gov, by June 27, 2000.

Date of Intended Adoption: July 7, 2000.

May 9, 2000

Claire Hesselholt

Rules Manager

Legislation and Policy Division

OTS-3992.1

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

WAC 458-30-200
Definitions.

(1) Introduction. This section provides definitions for the terms used throughout chapter 458-30 WAC.      The terms listed in this section are intended to act in concert with each other as appropriate, and with other definitions as they appear in the several sections of this chapter.     

(2) Definitions. For purposes of chapter 458-30 WAC, the following definitions apply:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(iii) Dairying or selling of dairy products;

(iv) Animal husbandry;

(v) Aquaculture;

(vi) Horticulture;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(iii) Payments for soil conservation programs.

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

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

(z) "Interest" means the amount or applicable interest assessed upon additional property taxes, which are imposed when land is removed or withdrawn from current use classification, and authorized by RCW 84.34.080 and 84.34.108.

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

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

(cc) "Owner" means:

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

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

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

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

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

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

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

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

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

(kk) "Removal" means land classified under chapter 84.34 RCW must be removed from classification because the land is no longer being used for the purpose for which classification was granted nor for any other classified use authorized by this chapter. A change in use may occur because of a sale or transfer of the classified land, a request by the owner to remove the land from the current use program, a determination by the assessor that the classified land no longer meets the criteria for classification under chapter 84.34 RCW, or any of the circumstances listed in RCW 84.34.108.

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

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

(((kk))) (nn) "Timber management plan" means the plan filed with the county legislative authority or ((with)) the assessor when classified timber land is sold or transferred ((that)). It details an owner's plan regarding the management of classified timber land including, but not limited to, the planting, growing and/or harvesting of ((forest crops)) timber.

(((ll))) (oo) "Transfer" means the conveyance of the ownership of a parcel of land without an exchange of valuable consideration.

(((mm))) (pp) "True and fair value" is the value of a parcel of land placed on the assessment rolls at its highest and best use without regard to its current use.      The term also refers to market value, that is, the amount of money a willing, but not obligated to buy, purchaser would pay a willing, but not obligated to sell, owner for the property.

(qq) "Withdrawal" or "withdrawn" means the owner of land classified under chapter 84.34 RCW has filed a notice of request to withdraw land from classification under the current use program. Land is withdrawn from classification as a result of a voluntary act by the owner.

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

OTS-3993.1

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

WAC 458-30-275
Continuing classification upon sale or transfer of ownership of classified land.

(1) Introduction. When land classified under chapter 84.34 RCW is sold or transferred certain procedures must be followed if the new owner wishes to keep the land in its present classified status.      This section explains the required procedures and forms.

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

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

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

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

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

(a) Sign ((a)) the notice of classification continuance that is part of a real estate excise tax affidavit.      For the purposes of this section, if there are multiple owners of classified land, they must all sign the notice of continuance and/or the affidavit. (See subsection (((8))) (7) of this section for a discussion regarding this ((affidavit)) tax); and

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

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

(((4))) (3) Assessor's and auditor's duties and authority related to sale or transfers. When land classified under chapter 84.34 RCW is in the process of being sold or transferred, the new owner must sign ((a)) and submit to the assessor the notice of continuance and the statement described in subsection (((3))) (2) of this section if ((he or she)) the owner wishes the land to remain so classified.      ((This notice of continuance and signed statement shall be presented to the assessor who must determine if the land will continue to be used in a manner approved for classified status or if the land will not be used in a manner consistent with the current use program.)) Upon receipt of these documents, the assessor must determine whether the new owner will continue the classified use of the land or whether the land must be removed from classification. The assessor ((shall be)) is allowed a reasonable amount of time to ((determine whether the classified use of the land will be continued by the new owner)) make this determination.

(a) Upon receipt of the notice of ((classification)) continuance, the assessor may require the new owner to submit additional information including((, but not limited to,)) the types of data listed in RCW 84.34.121 and WAC 458-30-270.

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

(c) The assessor may, but is not required to, consult with the granting authority ((to determine if)) in determining whether the land will qualify for continued classification.      The assessor and/or the granting authority may ask the owner to submit additional information and pertinent data to ensure that the land will continue to be used ((for a classified use)) in a manner for which classification under chapter 84.34 RCW was granted.

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

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

(ii) ((If the land is no longer eligible to be classified within the current use program,)) The seller or transferor has paid the additional tax, ((applicable)) interest, and penalty owed because the land has been removed from classification and the treasurer has affixed a stamp on the affidavit signifying that these sums have been paid;

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

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

(e) If land ((must be)) is removed from classification because it was sold or transferred as a result of any of the occurrences or actions listed in RCW 84.34.108(((5))) (6), the assessor shall:

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

(ii) Notify the ((county)) treasurer and the seller or transferor that no additional tax, ((applicable)) interest, or penalty are due ((as a result of the sale or transfer)) because RCW 84.34.108 (((5))) (6) specifically exempts the transaction from the imposition of additional tax, ((applicable)) interest, and penalty; and

(iii) ((In the case of)) If classified land is acquired for conservation purposes by any of the entities listed in RCW 84.34.108 (((5))) (6)(f), inform the new owner or transferee that if the land ceases to be used for the purposes enumerated in RCW 84.34.210 or 64.04.130, ((the)) additional tax, ((applicable)) interest, and penalty will be ((due)) imposed.

(((5))) (4) Timber land. When a parcel(s) of classified timber land is sold or transferred, the new owner must submit a timber management plan to the assessor ((in order to continue the classification, in addition to)) and comply with the general requirements listed in subsection (((3))) (2) of this section to continue the land's classified status.      The assessor ((shall)) will send a copy of the timber management plan to the ((county)) legislative authority of the county in which the classified land is located.      WAC 458-30-232 contains a list of the types of additional information an assessor may require the new owner to submit ((so that)) to enable the assessor ((can)) to determine ((if)) whether the land will continue to be used to grow and harvest ((forest crops)) timber for commercial purposes.

(((6))) (5) Farm and agricultural land. When a parcel(s) of classified farm and agricultural land is sold or transferred, the new owner must comply with the general requirements ((set forth)) listed in subsection (((3))) (2) of this section.      The size of the parcel(s) of ((farm and agricultural)) classified land sold or transferred will determine whether any additional requirements must also be satisfied.      ((A parcel(s) of land that is less than twenty acres must produce a specified amount of income to remain classified as farm and agricultural land.))      After all required information is submitted, the assessor ((shall)) will determine whether the land qualifies for continued classification.

(a) Twenty acres or more.      If the parcel(s) sold or transferred is twenty acres or more, the new owner must satisfy the general requirements listed in subsection (((3))) (2) of this section.

(b) Less than twenty acres.      In a sale or transfer involving less than twenty acres, the new owner will be required to comply with the general requirements of subsection (((3))) (2) of this section and may be asked to provide gross income data relating to the productivity of the farm or agricultural operation for three of the past five years.      ((This information regarding the earning or productive capacity of the classified land will be used to determine if the land meets the income criteria listed in chapter 84.34 RCW and this WAC chapter.)) The income production data relating to the classified land will be used to determine whether the land meets the income production requirements listed in RCW 84.34.020 (2)(b) and (c).

(i) Minimum income ((limits)) production requirements are set forth in RCW 84.34.020 (2)(b)(i) and (ii) for parcels that are at least five but less than twenty acres in size and in RCW 84.34.020 (2)(c)(i) and (ii) for parcels that are less than five acres in size.      Any sale or transfer of classified land((, except to a surviving spouse,)) is subject to these income limits. However, the income production requirements will not be examined when classified land is being transferred to a surviving spouse, even though the land remains subject to the same production requirements that were applicable before the spouse's death.      See WAC 458-30-210(3) and 458-30-317 for further information and details.

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

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

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

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

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

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

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

(c) No instrument of sale or conveyance evidencing a sale subject to the real estate excise tax ((may)) will be accepted by the county auditor for filing or recording until a stamp is affixed to the affidavit by the treasurer that shows the excise tax has been paid.      ((The county treasurer shall not stamp the instrument of sale or conveyance unless the assessor has determined that the classified use of the land will be continued or that the additional tax, interest, and/or penalty required under RCW 84.34.080 and 84.34.108, except as exempted under RCW 84.34.070 or 84.34.108(5), have been collected.)) Nor will the treasurer stamp this instrument unless the assessor has determined that the classified use of the land will continue, that the additional tax, interest, and penalty imposed by RCW 84.34.080 and 84.34.108 have been paid, or that no additional tax, interest, and penalty are due.

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

OTS-3994.1

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

WAC 458-30-285
Withdrawal from classification.

(1) Introduction. After a request to withdraw classification is received, the assessor is required to make a series of determinations.      This section explains the procedures the assessor must follow upon receipt of a request for withdrawal.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

OTS-3995.1

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

WAC 458-30-295
Removal of classification.

(1) Introduction. This section discusses the ((occurrences)) circumstances that may cause land to be removed from classification under chapter 84.34 RCW and the actions to be taken by an assessor relative to a removal.      Classified land ((may)) will be removed if it is no longer used for the purpose for which classification was granted, the owner wants the land removed from classification, the owner does not want to follow the withdrawal process set out in RCW 84.34.070, or ((if)) the owner ((has)) sought reclassification ((of the land)) and the land does not meet the criteria for classification under chapter 84.34 or 84.33 RCW.

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

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

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

(3))) General requirement. If land classified under chapter 84.34 RCW is applied to a use other than the one for which classification is granted, the owner ((shall)) must notify the assessor of the change in use within thirty days of the change.      ((An)) If the new use of the land does not qualify for classification under chapter 84.34 or 84.33 RCW, the land must be removed from classification and additional property tax, ((applicable)) interest, and a penalty ((shall)) will be imposed ((upon the land when it is removed from classification due to this change in use)).      See WAC 458-30-300 for details about the additional tax, interest, and((/or)) penalty imposed when land is removed from classification.

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

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

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

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

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

(e) Failure of an owner to respond to a request for data ((pursuant to WAC 458-30-270)) under RCW 84.34.121;

(f) When the owner ((has sought a)) requested reclassification of the land because the use of the land no longer meets the criteria of the classification under which it ((is)) was classified ((or the)) and the request for reclassification is denied;

(g) The owner ((has decided to)) of classified land changes the use of the ((classified)) land thereby requiring a change in classification and the land does not meet the requirements of the new classification; or

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

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

(ii) Example 2.      Based on information released at a public meeting of the county planning commission, the assessor learns that an owner of classified timber land has harvested all ((forest crops)) timber from the ((classified)) land, the land has been platted, public services such as roads, sewers, and domestic water supply have ((all)) been made available to the platted land, and at least six houses have been built on the ((classified timber)) land.

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

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

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

(4) Transactions that do not cause land to be removed from classification. Land cannot 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.

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

(6) Right of appeal. The seller, transferor, or owner of classified land may appeal the removal ((of land)) from classification to the board of equalization of the county in which the land is located.      The appeal must be filed within thirty calendar days ((following)) of the date the notice of removal was mailed by the assessor.

(7) Assessor's duty after removal. Unless the removal is reversed on appeal, the assessor ((shall)) will revalue the previously classified land ((by consulting the existing assessment rolls that contain both the current use and the)) with reference to its true and fair value ((of the land.      After the effective date of the removal, the assessor will list only the true and fair value of the land on the assessment roll)) on the date of removal from classification.      The assessment roll will list both the assessed ((valuation)) value of the land before and after the removal of classification.      Taxes for the current tax year will be prorated according to the portion of the year to which each assessed ((valuation)) value applies.

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

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

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

OTS-3996.1

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

WAC 458-30-300
Additional tax -- Withdrawal or removal from classification.

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

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

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

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

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

(3))) Duties of assessor and ((county)) treasurer. ((When land is withdrawn from classification the assessor shall compute an additional tax and applicable interest and when land is removed from classification the assessor shall compute an additional tax, applicable interest, and penalty.))      As soon as possible after determining that the land is to be withdrawn or removed from classification, the assessor ((shall)) will compute the amount of the additional tax, ((applicable)) interest, and, if appropriate, penalty due, ((except as provided)) unless the withdrawal or removal is the result of one of the circumstances listed in subsection (((6))) (5) of this section.      When land is withdrawn from classification, additional tax and interest are imposed. When land is removed from classification, additional tax, interest, and penalty are imposed.

(a) The ((county)) treasurer ((shall)) will mail a notice to the owner regarding the additional tax, ((applicable)) interest, and, if required, penalty due and the date on which the total amount ((is due)) must be paid.      The ((additional tax, applicable interest, and penalty shall be)) total amount is due and payable to the ((county)) treasurer thirty days after the notice is mailed to the owner.

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

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

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

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

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

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

(((5))) (4) Failure to sign notice of continuance. If a new owner fails to sign the notice of ((classification)) continuance when classified land is sold or transferred, ((an)) additional tax, ((applicable)) interest, and penalty ((shall be calculated)) are imposed according to ((subsection (4) of this section)) RCW 84.34.108(4). A notice of continuance is not required when classified land is transferred to a new owner who is the heir or devisee of a deceased owner.

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

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

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

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

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

(e) Transfer of land to a church when the land would qualify for a property tax exemption ((pursuant to)) under RCW 84.36.020.      ((The conditions set forth in RCW 84.36.020 shall only apply to the affected parcel of land and shall not relieve any portion not so affected from the potential tax liability;)) Only the land that would qualify for exemption under RCW 84.36.020 is included within this exception. Additional tax, interest, and, if appropriate, the penalty will be assessed upon the remainder of the land withdrawn or removed from classification;

(f) Acquisition of property interests by public agencies or private organizations qualified under RCW 84.34.210 or 64.04.130 for the purposes specified therein.      See subsection (((7))) (6) of this section for a listing of these agencies, organizations, and purposes.      However, when the property interests are not used for the purposes enumerated in ((these statutes)) RCW 84.34.210 or 64.04.130, the additional tax, ((applicable)) interest, and penalty specified in ((subsection (4) of this section shall)) RCW 84.34.108(4) will be imposed;

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

(h) Removal of classification after a statutory exemption is enacted that would exempt the land from property tax and the landowner has submitted a written request to the assessor to remove the land from classification. This exemption applies only to newly enacted exemptions that would cause classified land to go from taxable to exempt ownership;

(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; or

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

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

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

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

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

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

(a) State agency;

(b) Federal agency;

(c) County;

(d) City;

(e) Town;

(f) Metropolitan park district;

(g) Metropolitan municipal corporation;

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

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

(((8))) (7) Removal of classification from land that was previously classified or designated forest land under chapter 84.33 RCW. Land that was previously classified or designated as forest land under chapter 84.33 RCW may be reclassified under RCW 84.34.020.      If the current use classification is ((subsequently)) removed before the land has been classified for at least ten assessment years under chapter 84.34 RCW, a combination of compensating tax imposed under chapter 84.33 RCW and additional tax ((shall be)), interest, and penalty imposed under chapter 84.34 RCW is due.      RCW 84.33.145 explains the way in which these taxes are to be calculated.

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

OTS-3997.1

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

WAC 458-30-305
Due date of additional tax, ((applicable)) interest, and penalty upon withdrawal or removal.

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

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

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

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

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

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

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

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

(((6))) (5) Additional tax, ((applicable)) interest, and penalty constitute a lien. When land is withdrawn or removed from classification ((is withdrawn or removed from a parcel of land)), the amount of additional tax, ((applicable)) interest, and((/or)) penalty ((shall)) becomes a lien on the ((parcel of)) land ((as of)) that attaches on the date of withdrawal or removal.      This lien ((shall have)) has priority to and ((shall)) must be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation, or responsibility to or with which this land may become charged or liable.      The lien may be foreclosed at the same time and in same manner ((provided by law for foreclosure of)) as liens for delinquent real property taxes ((as set forth in)) are foreclosed under RCW 84.64.050.

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

OTS-3998.1

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

WAC 458-30-310
County recording authority -- County financial authority -- Duties.

(1) Introduction. This section explains the conditions under which documents will be accepted by the county recording authority under ((the provisions of)) chapter 84.34 RCW. It also describes the duties of the treasurer in the withdrawal or removal process.

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

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

(b) The notice of continuance on or attached to the ((real estate excise tax)) affidavit is signed by the new owner or transferee; or

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

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

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

(b) Removal. As soon as possible after determining that land must be removed from classification, the assessor will prepare a notice of removal of classification and additional tax calculations. This form lists the reason(s) for the removal of classification and the assessor's calculations of the total amount of additional tax, interest, and penalty due. RCW 84.34.108 requires the treasurer to mail to the owner a notice of the total amount due and the date on which this amount must be paid.

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

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

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

OTS-3999.1

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

WAC 458-30-325
Transfers between classifications -- Application for reclassification.

(1) Introduction. This section discusses the process ((by which classified)) used when land is reclassified ((under another)) into a different classification ((of)) under chapter 84.34 ((RCW)) or ((under chapter)) 84.33 RCW.

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

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

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

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

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

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

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

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

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

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

(((5))) (4) Reclassification ((when)) process if an owner seeks the change of classification. An owner of classified land ((classified under 84.34 RCW)) may seek ((reclassification of that)) to have the land reclassified under a different current use classification under chapter 84.34 RCW or may seek classification or designation as forest land under chapter 84.33 RCW.      ((The owner of classified land may seek)) Reclassification may be sought because ((of a desire)) the owner wants to change the use of ((the)) classified land or because ((he or she does not want to meet or cannot meet)) the owner no longer wants to satisfy or cannot satisfy the requirements of the classification under which the land is currently classified.

(a) If an owner wishes to have land reclassified, the owner must submit an application for reclassification to the assessor of the county in which the land is located.      This ((form shall)) application will be ((designed)) prescribed by the department and supplied to ((county)) assessors.

(b) Within seven days of ((receipt of)) receiving this request, the assessor ((shall)) must forward a copy of ((this)) the application for reclassification to the appropriate granting authority.      The assessor ((shall)) will retain a copy of all applications for reclassification.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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