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December 26, 1972
Honorable R. Ted Bottiger
State Representative, 29th Dist.
8849 Pacific Avenue
Tacoma, Washington 98444
Cite as: AGLO 1972 No. 94 (not official)
By letter previously acknowledged you have requested an opinion of this office on a question which we paraphrase as follows:
Does RCW 84.34.210 empower counties, cities, towns and metropolitan municipal corporations to accept by gift from the lessee‑operator of a privately owned airport such lessee's development rights in runways, clear zones, and adjacent buffer areas situated on the leased premises, assuming that the land in question is definable as "open space land" under RCW 84.34.020, but is not presently classified and taxed as such?
For the reasons set forth herein we answer this question in the affirmative.
By its enactment of chapter 87, Laws of 1970, 1st Ex. Sess., the legislature added to Title 84 RCW (property taxes) a new chapter (chapter 84.34 RCW) which is commonly known as the "open spaces act." The chapter's purpose, as expressed in § 1 (RCW 84.34.010), is to preserve open space land, farm and agricultural land, and timber land by providing tax relief in the form of a special valuation procedure to the owners of such land. See, § 6 (RCW 84.34.060) which provides that:
"In determining the true and fair value of open space land, farm and agricultural land, and timber land, which has been classified as such under the provisions of this chapter, the assessor shall consider only the use to which such property and improvements [[Orig. Op. Page 2]] is currently applied and shall not consider potential uses of such property. The assessor shall compute the assessed value of such property by using the same assessment ratio which he applies generally in computing the assessed value of other property: Provided, That the assessed valuation of open space land with no current use shall be not less than that which would result if it were to be assessed for agricultural uses."
Compare, RCW 84.40.030, which continues to govern the valuation of real property for tax purposes in all other instances and states that "All property shall be assessed fifty percent of its true and fair value in money . . ." (Emphasis supplied) ‑ a concept which was explained by this office in AGO 65-66 No. 65 [[to George Kinnear, Chairman, State Tax Commission, December 31, 1965]]as follows:
"the 'true and fair value of property in money' [for property tax valuation purposes] is its market value or the amount of money a buyer willing, but not obligated to buy would pay for it to a seller willing, but not obligated to sell. In arriving at a determination of such value the assessing officer can consider only those factors which can within reason be said to affect the price in negotiations between a willing purchaser and a willing seller, and he must consider all of such factors."
The constitutional basis for this new legislation is to be found in Article VII, § 11 (Amendment 53) of the state Constitution, approved by the voters in 1968, which 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."
Although each of these three categories of land is expressly defined in § 2 of the act (RCW 84.34.020), we need only concern ourselves here with the first ‑ "open space land" ‑ which is defined therein as follows:
[[Orig. Op. Page 3]]
"(1) 'Open space land' means (a) any land area so designated by an official comprehensive land use plan adopted by any city or county and zoned accordingly or (b) any land area, the preservation of which in its present use would (i) conserve and enhance natural or scenic resources, or (ii) protect streams or water supply, (iii) promote conservation of soils, wetlands, beaches or tidal marshes, or (iv) enhance the value to the public of abutting or neighboring parks, forests, wildlife preserves, nature reservations or sanctuaries or other open space, or (v) enhance recreation opportunities, or (vi) preserve historic sites, or (vii) retain in its natural state tracts of land not less than five acres situated in an urban area and open to public use on such conditions as may be reasonably required by the legislative body granting the open space classification."
Except where the subject lands have already been so classified by virtue of a comprehensive plan adopted by the municipality, an owner of land desiring a current use assessment under the act must make application to his county assessor for an appropriate classification. See, RCW 84.34.030. The term "owner," notably, is defined in RCW 84.34.020 (5) as meaning:
". . . the party or parties having the fee interest in land, except that where land is subject to real estate contract 'owner' shall mean the contract vendee."
Upon receipt of such an application the assessor is to refer same to the county commission or other legislative body, if the land is in an unincorporated area, or to the city legislative body, if it is in an incorporated area. See, RCW 84.34.040, which goes on to provide that:
". . . An application made for classification under RCW 84.34.020 (1) (b), (2), or (3), shall be acted upon in a city or county with a comprehensive plan in the same manner in which an amendment to the comprehensive plan is processed by such city or county, and by a city or county without a comprehensive plan after a public hearing and after notice of the hearing shall have been given by one publication in a newspaper of general circulation in the city or county at least ten days before the hearing. In determining whether an application made for classification under RCW 84.34.020 (1) (b), (2), or (3) should be approved or disapproved, the granting authority may take cognizance of the benefits to the general welfare [[Orig. Op. Page 4]] of preserving the current use of the property which is the subject of application, and may consider whether or not preservation of current use of the land will (a) conserve or enhance natural or scenic resources, (b) protect streams or water supplies, (c) promote conservation of soils, wetlands, beaches or tidal marshes, (d) enhance the value of abutting or neighboring parks, forests, wildlife preserves, nature reservations, sanctuaries, or other open spaces, (e) enhance recreation opportunities, (f) preserve historic sites, (g) maintain farm and agricultural land, or (h) affect any other factors relevant in weighing benefits to the general welfare of preserving the current use of the property against the potential loss in revenue which may result from granting the application: Provided, That the granting authority may approve the application with respect to only part of the land which is the subject of the application: Provided further, That if any part of the application is denied, the applicant may withdraw the entire application: And provided further, That the granting authority in approving in part or whole an application may also require that certain conditions be met, including but not limited to the granting of easements: And provided further, That the granting or denial of the application for current use assessment is a legislative determination and shall be reviewable only for arbitrary and capricious actions."
Only after the appropriate classification has been granted pursuant to this section does the "current use" tax assessment procedure under § 6 (RCW 84.34.060), supra, come into play. Thereafter, the property must remain under this classification, and not be put to any use which is inconsistent therewith, for at least ten years, except that after seven years of such ten year period a request for withdrawal from classification may be processed in the manner provided for in § 7 (RCW 84.34.070). In the event of any change in use occurring during this period, except through compliance with § 7, the owner of the subject land is required by § 8 of the act (RCW 84.34.080) to pay a penalty assessment in accordance with the requirements of a formula set forth in this section.
So far, it will be noted that everything which we have said with respect to this legislation presupposes that the subject "open space land" is, and remains, in private ownership, and is thus subject to property taxation either on the basis of its "highest and best" use (prior to classification) or its "current [[Orig. Op. Page 5]] use" (after classification).1/ With this in mind, we may now turn to certain additions which were made to the "open spaces" act of 1970, supra, by the 1971 legislature.
By its enactment of chapter 243, Laws of 1971, 1st Ex. Sess., now codified as RCW 84.34.200, et seq., the legislature added several new sections to chapter 84.34 RCW in order to provide for direct acquisition of open space land, farm and agricultural land and timber land by local municipal corporations. The policy reasons for these additions to the 1970 act are set forth in § 1, chapter 243, (RCW 84.34.200), as follows:
"The legislature finds that the haphazard growth and spread of urban development is encroaching upon, or eliminating, numerous open areas and spaces of varied size and character, including many devoted to agriculture, the cultivation of timber, and other productive activities, and many others having significant recreational, social, scenic, or esthetic values. Such areas and spaces, if preserved and maintained in their present open state, would constitute important assets to existing and impending urban and metropolitan development, at the same time that they would continue to contribute to the welfare and well-being of the citizens of the state as a whole. The acquisition of interests or rights in real property for the preservation of such open spaces and areas constitutes a public purpose for which public funds may properly be expended or advanced."
In implementation of this policy the legislature provided, by RCW 84.34.210, that:
"Any county, city or town, or metropolitan municipal corporation may acquire by purchase, gift, grant, bequest, devise, lease or otherwise, except by eminent domain, the fee or any lesser interest, development right, easement, covenant, or other contractual right necessary to protect, preserve, maintain, improve, restore, limit the future use of, or otherwise conserve, selected open space land, farm and agricultural land, and timber land as such are defined in chapter 84.34 RCW for public use or enjoyment. Among interests that may be so acquired are mineral rights. Any county, city or town, or metropolitan municipal corporation [[Orig. Op. Page 6]] may acquire the fee to such property for the purpose of conveying or leasing the property back to its original owner or other person under such covenants or other contractual arrangements as will limit the future use of the property in accordance with the purposes of this 1971 amendatory act."
In addition, by RCW 84.34.220 the legislature further provided that:
"In accordance with the authority granted in RCW 84.34.210, a county, city or town, or metropolitan municipal corporation may specifically purchase or otherwise acquire, except by eminent domain, rights in perpetuity to future development of any open space land, farm and agricultural land, and timber land which are so designated under the provisions of chapter 84.34 RCW and taxed at current use assessment as provided by that chapter. For the purposes of this 1971 amendatory act, such developmental rights shall be termed 'conservation futures'. The private owner may retain the right to continue any existing open space use of the land, and to develop any other open space use, but, under the terms of purchase of conservation futures, the county, city or town, or metropolitan municipal corporation may forbid or restrict building thereon, or may require that improvements cannot be made without county, city or town, or metropolitan municipal corporation permission. The land may be alienated or sold and used as formerly by the new owner, subject to the terms of the agreement made by the county, city or town, or metropolitan municipal corporation with the original owner."
It seems evident that while the basic purpose of this 1971 legislation is similar to that of the 1970 "open spaces act" ‑ i.e., the preservation of undeveloped open spaces ‑ the means of accomplishment of this purpose differs as between these two acts. The approach manifest in the original, 1970, act is to induce private owners of open space lands to maintain these lands in this condition by means of tax relief, whereas the 1971 act seeks to obtain this same objective by means of authorizing municipalities to acquire either ownership or, at least, sufficient control over the development of such lands as to allow them to preserve the lands in their current condition through the exercise of their governmental authority.
[[Orig. Op. Page 7]]
From this it will be seen that even where a municipality's acquisition of a development right or other interest described in RCW 84.34.210, supra, effectively precludes any development of the subject property by others retaining interests therein, such acquisition will not, by itself, cause this land to be taxable as "open space land" under RCW 84.34.060, supra‑- either in the hands of its owner or those of a lessee. It will, however, have a comparable tax impact if the area involved has a "highest and best" potential use other than its actual use; e.g., if it is a likely candidate for industrial development, then the city's acquisition of a limiting interest could have the effect of eliminating this as its highest and best use. This follows from the simple fact that in any transaction for the property between a willing buyer and a willing seller the inhibitions upon future development would have to be taken into consideration in establishing a "fair market" selling price.
Bearing this point in mind, we may now turn to your inquiry; i.e., whether RCW 84.34.210, supra, authorizes the municipalities listed therein to accept as a gift from the lessee‑operator of a privately owned airport his development rights in the runways, clear zones, and adjacent buffer areas, assuming that the subject property, though falling within the definition of "open space land," is not presently classified and taxed as such. We think that the statute does grant this authority.
Before reaching the precise question you have asked, we deem it necessary to clarify one point; namely, whether the provisions of RCW 84.34.220, supra ‑ relating to the acquisition of "conservation futures" ‑ somehow apply to the contemplated transaction you describe. We think that RCW 84.34.220 is applicable only in cases where the property in question has already been "designated" as "open space land", and is currently being taxed as such. Its apparent raison d'etre is to vest municipalities with specific authority to acquire future development rights to property which is already limited as to present development by its current open space classification ‑ the acquisition to become "effective" if and when the property's present classification as open space land is terminated by the owner. Since the property described in your inquiry is not presently classified as open space land ‑ although definable and presumptively capable of classification as such ‑ the provisions of RCW 84.34.220 do not come into play here.
Under the broad provisions of RCW 84.34.210, supra, on the other hand, we think a municipality would clearly be authorized to acquire whatever present "development rights" are held by the lessee in this case, subject to one major limitation. The limitation which we perceive is that the property in question must fit within the definition of "open space land" set forth [[Orig. Op. Page 8]] in RCW 84.34.020, supra, read in the light of Article VII, § 11 (Amendment 53), supra.2/ In reaching this conclusion, we would again remind you however, that this acquisition would not, by itself, result in a designation of the subject property as "open space land" for purposes of tax assessment on a current use basis; such a designation must be applied for by the "owner" (not the lessee‑operator) in the manner provided for in RCW 84.34.040, supra.
This concludes our response to the question which you have asked. We trust the foregoing will be of assistance to you.
Very truly yours,
THOMAS F. CARR
Assistant Attorney General
*** FOOTNOTES ***
1/Of course, by virtue of tax exemptions contained in Article VII, § 1 (Amendment 14) of our state Constitution and RCW 84.36.010, public property (i.e., that belonging exclusively to the United States, the state, or any county or municipal corporation) is exempt from taxation irrespective of the use to which it is being put by the public agency which owns it.
2/It is, of course, elementary that the RCW 84.34.020 definition of "open space land" is to be read in a manner consistent with the provisions of Article VII, § 11 (Amendment 53), supra; State ex rel. Morgan v. Kinnear, 80 Wn.2d 400 (1972). Recalling that the Constitution speaks of ". . . other open space lands which are used for recreation or for enjoyment of their scenic or natural beauty . . ." the factual question to be resolved in a particular case would be, essentially, one of whether the specific airport property in question is being used for recreation or for the enjoyment of scenic or natural beauty. This factual determination, obviously, is left to the concerned municipality.