LANDS ‑- AGRICULTURAL ‑- TAXATION ‑- OPEN SPACE ‑- SENATE BILL NO. 2177 (1973)

LANDS ‑- AGRICULTURAL ‑- TAXATION ‑- OPEN SPACE ‑- SENATE BILL NO. 2177 (1973)

Senate Bill No. 2177, relating to the taxation of agricultural lands, would be constitutional under the "open space" amendment to the state Constitution (Article VII, § 11, Amendment 53) if enacted in the form submitted for opinion.

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                                                                   April 11, 1973

Honorable Joe D. Haussler
State Representative, 7th District
Legislative Building
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1973 No. 48

Dear Sir:

            By letter previously acknowledged you have requested our opinion on whether Substitute Senate Bill No. 2177, relating to the taxation of agricultural land, would be constitutional under the "open space" amendment to the state Constitution (Article VII, § 11, Amendment 53) if this bill should be enacted in its present form.

            We answer this question in the affirmative.

                                                                     ANALYSIS

            Article VII, § 11 (Amendment 53) of the state Constitution, approved by the voters in 1968, provides that:

            "Nothing in this Article VII as amended shall prevent the legislature from providing, subject to such conditions as it may enact, that the true and fair value in money (a) of farms, agricultural lands, standing timber and timberlands, and (b) of other open space lands which are used for recreation or for enjoyment of their scenic or natural beauty shall be based on the use to which such property is currently applied, and such values shall be used in computing the assessed valuation of such property in the same manner as the assessed valuation is computed for all property."

            As explained in our previous opinion of December 26, 1972 [[an Informal Opinion, AIR-72594]], to State Senator R. Ted Bottiger, copy enclosed, the essential operational thrust of this provision and of the legislation which has been enacted in implementation thereof (see, chapter 84.34 RCW) is that of causing those types of land to which the amendment applies to be taxed  [[Orig. Op. Page 2]] at their true and fair value in money calculated on the basis of their present actual use rather than on the basis of some other "higher and better" use to which the particular land might be put.

            In briefest terms the apparent over-all purpose of SSB 2177 is that of affording this tax benefit to all "farm and agricultural land."  See, § 1 of the bill which would amend the present provisions of RCW 84.34.010 by adding the following sentence at the conclusion thereof:

            ". . .  The legislature further declares its intent that farm and agricultural lands shall be valued on the basis of their value for use as authorized by section 11 of Article VII of the Constitution of the state of Washington."

            The term "farm and agricultural land," which is currently defined in RCW 84.34.020 (2) would be amended by § 2 of the bill to read as follows:

            "(2) 'Farm and agricultural land' means either (a) land in any contiguous ownership of twenty or more acres devoted primarily to ((agricultural uses)) the production of livestock or agricultural commodities for commercial purposes:  (b) any parcel of land 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 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; or (c) any parcel of land of less than five acres devoted primarily to agricultural uses which has produced a gross income of one thousand dollars or more per year for three of the five calendar years preceding the date of application for classification under this chapter.  Agricultural lands shall also include farm woodlots of less than twenty and more than five acres 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  [[Orig. Op. Page 3]] this section as 'farm and agricultural lands.'"

            Your concern over the constitutionality of this bill, as we understand it, emanates from § 11 thereof which, if enacted, would add a new section to chapter 84.34 RCW, reading in pertinent part as follows:

            "The true and fair value of farm and agricultural land shall be determined by consideration of the earning or productive capacity of comparable lands from crops grown most typically in the area averaged over not less than five years, capitalized at indicative rates.  The earning or productive capacity of farm and agricultural lands shall be the 'net cash rental', capitalized at a 'rate of interest' charged on long term loans secured by a mortgage on farm or agricultural land plus a component for property taxes.

            ". . ."

            You have stated your concern with regard to this aspect of the bill as follows:

            "I am requesting your decision on the constitutionality of Senate Bill No. 2177 the so-called 'Colorado Plan' which calls for assessments on the 'production' of farm lands rather than 'use' as provided by the 'open space amendment'."

            We do not, however, think that this proposed statutory measure of the "true and fair" value of farm and agricultural land would, if enacted, be violative of the open space amendment to the Constitution.  That constitutional provision, as we read it, simply allows the legislature to provide by appropriate legislation for the taxation of farm and agricultural land on the basis of current rather than highest and best use ‑ and § 11 of the bill here in question appears to do nothing more than propose to establish by statute the procedures to be followed in determining the true and fair value of farm and agricultural landas such.  Accordingly, we perceive no constitutional infirmity in the bill because of this section ‑ particularly in view of the clear-cut expression of legislative intent in § 1,supra, that the over-all purpose of the bill is  [[Orig. Op. Page 4]] simply that of extending the benefits of Article VII, § 11 (Amendment 53),supra, to all farm and agricultural lands in this state.

            We trust that the foregoing will be of assistance to you.

Very truly yours,

SLADE GORTON
Attorney General

THOMAS F. CARR
Assistant Attorney General