WSR 05-01-052

PERMANENT RULES

DEPARTMENT OF REVENUE


[ Filed December 7, 2004, 3:45 p.m. , effective January 1, 2005 ]


Other Findings Required by Other Provisions of Law as Precondition to Adoption or Effectiveness of Rule: RCW 84.34.310(6) requires the department to determine and publish the rate of inflation by January 1st of each year for use in that assessment year.

Purpose: To provide the rate of inflation used by county officials to calculate interest on deferred special benefit assessments when farm and agricultural or timber land is removed or withdrawn from classification under chapter 84.34 RCW, the Open Space Program. Special benefit assessments for certain local improvements to farm and agricultural or timber land classified under chapter 84.34 RCW may be deferred by the land owner. If a landowner has chosen to defer these assessments, when the land is subsequently removed or withdrawn from classification the deferred special benefit assessment becomes due and payable with interest. WAC 458-30-590 provides the rate of inflation used in calculating the interest rate that is added to the amount of deferred special benefit assessments.

Citation of Existing Rules Affected by this Order: Amending WAC 458-30-590 Rate of inflation -- Publication -- Interest rate--Calculation.

Statutory Authority for Adoption: RCW 84.34.360.

Other Authority: RCW 84.34.310.

Adopted under notice filed as WSR 04-20-117 on October 6, 2004.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.

Date Adopted: December 7, 2004.

Janis P. Bianchi, Manager

Interpretations and Technical Advice Unit

OTS-7596.1


AMENDATORY SECTION(Amending WSR 03-24-076, filed 12/2/03, effective 1/2/04)

WAC 458-30-590   Rate of inflation -- Publication -- Interest rate -- Calculation.   (1) Introduction. This section sets forth the rates of inflation discussed in WAC 458-30-550. It also explains the department of revenue's obligation to annually publish a rate of inflation and the manner in which this rate is determined.

(2) General duty of department -- Basis for inflation rate. Each year the department determines and publishes a rule establishing an annual rate of inflation. This rate of inflation is used in computing the interest that is assessed when farm and agricultural or timber land, which are exempt from special benefit assessments, is withdrawn or removed from current use classification.

(a) The rate of inflation is based upon the implicit price deflator for personal consumption expenditures calculated by the United States Department of Commerce. This rate is used to calculate the rate of interest collected on exempt special benefit assessments.

(b) The rate is published by December 31st of each year and applies to all withdrawals or removals from farm and agricultural or timber land classification that occur the following year.

(3) Assessment of rate of interest. An owner of classified farm and agricultural or timber land is liable for interest on the exempt special benefit assessment. Interest accrues from the date the local improvement district is created until the land is withdrawn or removed from classification. Interest accrues and is assessed in accordance with WAC 458-30-550.

(a) Interest is assessed only for the time (years and months) the land remains classified under RCW 84.34.020 (2) or (3).

(b) If the classified land is exempt from the special benefit assessment for more than one year, the annual inflation rates are used to calculate an average rate of interest. This average is determined by adding the inflation rate for each year the classified land was exempt from the special benefit assessment after the local improvement district was created. The sum of the inflation rates is then divided by the number of years involved to determine the applicable rate of interest.

(c) Example. A local improvement district for a domestic water supply system was created in January 1990 and the owner used the statutory exemption provided in RCW 84.34.320. On July 1, 1997, the land was removed from the farm and agricultural classification. An average interest rate was calculated using the inflation rates for 1990 through 1997. The owner was then notified of the amount of previously exempt special benefit assessment, plus the average interest rate.

(4) Rates of inflation. The rates of inflation used to calculate the interest as required by WAC 458-30-550 are as follows:


YEAR PERCENT YEAR PERCENT
1976 5.6

1977 6.5
1978 7.6 1979 11.3
1980 13.5 1981 10.3
1982 6.2 1983 3.2
1984 4.3 1985 3.5
1986 1.9 1987 3.7
1988 4.1 1989 4.8
1990 5.4 1991 4.2
1992 3.3 1993 2.7
1994 2.2 1995 2.3
1996 2.2 1997 2.1
1998 0.85 1999 1.42
2000 2.61 2001 1.89
2002 1.16 2003 1.84
2004 2.39

[Statutory Authority: RCW 84.34.360 and 84.34.310. 03-24-076, 458-30-590, filed 12/2/03, effective 1/2/04; 02-24-058, 458-30-590, filed 12/3/02, effective 1/3/03; 02-03-041, 458-30-590, filed 1/8/02, effective 2/8/02; 00-24-107, 458-30-590, filed 12/6/00, effective 1/1/01; 99-24-035, 458-30-590, filed 11/23/99, effective 12/24/99; 99-01-068, 458-30-590, filed 12/14/98, effective 1/1/99; 98-01-179, 458-30-590, filed 12/23/97, effective 1/1/98; 97-02-067, 458-30-590, filed 12/31/96, effective 1/1/97; 96-01-094, 458-30-590, filed 12/19/95, effective 1/1/96; 95-06-043, 458-30-590, filed 2/24/95, effective 3/27/95. Statutory Authority: RCW 84.34.360. 94-11-098, 458-30-590, filed 5/17/94, effective 6/17/94; 92-22-061, 458-30-590, filed 10/29/92, effective 11/29/92. Statutory Authority: RCW 84.08.010 and 84.08.070. 90-24-087, 458-30-590, filed 12/5/90, effective 1/5/91. Statutory Authority: Chapter 84.34 RCW and RCW 84.34.360. 89-05-010 (Order PT 89-3), 458-30-590, filed 2/8/89. Statutory Authority: RCW 84.34.360. 88-07-004 (Order PT 88-4), 458-30-590, filed 3/3/88; 87-07-009 (Order PT 87-3), 458-30-590, filed 3/10/87.]

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