AGLO 1977 No. 21 - May 25 1977
OFFICES AND OFFICERS ‑- COUNTY ‑- ASSESSOR ‑- TAXATION ‑- PROPERTY ‑- PUBLIC RECORDS ‑- ACCESS TO COMPARABLE LEASES
(1) In the event that a county assessor has utilized one or more leases of comparable lands to establish the "net cash rental" for certain farm and agricultural land under RCW 84.34.065, those leases (or copies), if retained in his custody, constitute "public records" under the public disclosure law (chapter 42.17 RCW); accordingly, the owner of such land will be governed by the provisions of that law in seeking to require the assessor to permit inspection of the contents of those documents.
(2) If, however a petition for review under chapter 84.48 RCW has been filed, such a landowner may utilize the provisions of RCW 84.48.150 to obtain the same material or information from the assessor.
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May 25, 1977
Honorable Charles D. Kilbury
State Representative, 16th District
311 House Office Building
Olympia, Washington 98504 Cite as: AGLO 1977 No. 21
By letter previously acknowledged you have requested our opinion on a question which we divide and paraphrase as follows:
(1) In the event that a county assessor has utilized one or more leases of comparable lands to establish the "net cash rental" for certain farm and agricultural land under RCW 84.34.065, what procedures are available to the owner of such land, in the absence of a formal petition for review under chapter 84.48 RCW, to require the assessor to permit inspection of the contents of those leases?
(2) If, instead, a petition for review under chapter 84.48 RCW has been filed, to what extent will that fact affect the right of the landowner to obtain the same material or information from the assessor?
[[Orig. Op. Page 2]]
We answer the foregoing questions in the manner set forth in our analysis.
While we do not know all of the factual background behind the controversy which has prompted your request, it apparently has arisen in the administration of RCW 84.34.065. That statute, which was enacted by § 10, chapter 212, Laws of 1973, 1st Ex.Sess., provides for a new procedure for determining the "true and fair value" of farm and agricultural lands for property tax purposes. RCW 84.34.065 reads, 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 camparable 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.
"For the purposes of the above computation:
"(1) The term 'net cash rental' shall mean the average rental paid, on an annual basis, in cash or its equivalent, for the land being appraised and other farm and agricultural land of similar quality and similarly situated that is available for lease for a period of at least three years to any reliable person without unreasonable restrictions on its use for production of agricultural crops. There shall be allowed as a deduction from the rental received or computed any costs of crop production charged against the landlord if the costs are such as are customarily paid by a landlord. If 'net cash rental' data is not available, the earning or productive capacity of farm and agricultural lands shall be determined by the cash value of typical or usual crops grown on land of similar quality and similarly situated averaged over not less than five years. Standard costs of production shall be allowed as a deduction from the cash value of the crops. . . ."
[[Orig. Op. Page 3]]
The effect of this statute can be simply stated. Instead of using, in whole or in part, a valuation method based upon comparablesales, the assessor is to use, exclusively, a method based upon capitalization of income. The income to be capitalized is the "net cash rental" which is to be determined on the basis of both the rental being paid on the land being appraised and comparable rental being paid on ". . . other farm and agricultural land of similar quality and similarly situated . . ." In essence, then, valuation under RCW 84.34.065 is to be based in part upon what we might term "comparable leases" (i.e., leases of comparable farm and agricultural land) rather than upon comparable sales.
We have divided your opinion request into two parts because of the significance, by reason of RCW 84.48.150, discussed below, of a taxpayer's petition for review by a county board of equalization under chapter 84.48 RCW. We will first discuss the procedures which are available to a property owner to obtain access to any such "comparable leases" in the absence of a petition for review. Then, in dealing with what we have separately designated as question (2), we will consider the provisions of RCW 84.48.150 and their ramifications insofar as this matter is concerned.
In the absence of a petition for review under chapter 84.48 RCW the only legal tools available to the owner of farm and agricultural land to obtain access to comparable leases used by an assessor in valuing his land are those afforded by chapter 42.17 RCW, commonly known as the public disclosure law. The starting point under that law is RCW 42.17.260, which provides, in pertinent part, as follows:
"(1) Each agency, in accordance with published rules, shall make available for public inspection and copying all public records . . ."
Unquestionably a county assessor's office is an "agency" for the purposes of that statute. Accord, RCW 42.17.020(1) which provides that:
"(1) 'Agency' includes all state agencies and all local agencies. 'State agency' includes every state office, public official, department, division, bureau, board, commission, or other state agency. 'Local agency' includes every county, city, city and county, school district, [[Orig. Op. Page 4]] municipal corporation, district, political subdivision, or any board, commission, or agency thereof, or other local public agency."
Bearing that in mind we next note the definition of "public records" which, as found in RCW 42.17.020(26), reads as follows:
"'Public record' includes any writing containing information relating to the conduct of government or the performance of any governmental or proprietary function prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics."
Assuming that the "comparable" leases in question were used in the performance of, and contain information pertaining to, the governmental function of determining the taxable value of farm and agricultural land, it also seems clear that those leases (or copies), if still in the possession of the county assessor, constitute "public records." On the other hand, if the lease documents (or copies) themselves are not in the possession of the assessor they will not then be reachable under the public disclosure law at all and, instead, the property owner will, at most, be able to utilize that law only to obtain access to such secondary records as may have been prepared by the assessor on the basis of information contained in the actual leases.
So far, so good. But now, unfortunately, the question becomes a bit more complicated. While RCW 42.17.260,supra, declares all public records to be ". . . available for public inspection and copying . . .", later provisions of the law then qualify that requirement by providing for various exemptions. Among those exemptions, under RCW 42.17.310(1), is one covering:
"(c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would violate the taxpayer's right to privacy or would result in unfair competitive disadvantage to such taxpayer." (RCW 42.17.310(1)(c).)
In addition, there is in RCW 42.17.260, supra, itself a general qualification relating to all public records. That qualification, as set forth in the second sentence of the statute, provides that:
[[Orig. Op. Page 5]]
"To the extent required to prevent an unreasonable invasion of personal privacy, an agency shall delete identifying details when it makes available or publishes any public record; however, in each case, the justification for the deletion shall be explained fully in writing."
On the other hand, even the exemptions from public inspection provided for in RCW 42.17.310,supra, are qualified ‑ by subsection (2) of that statute which provides as follows:
"(2) The exemptions of this section shall be inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. . . ."
What, then, does all of this mean in terms of access to "comparable leases" (or information obtained therefrom) in the custody of a county assessor? Unfortunately, it quite possibly means litigation, at least in the absence of a petition for review by the property owner under chapter 84.48 RCW.
The problem, basically, is one to which we have addressed ourselves at length in a number of other opinions which we have written since the public disclosure law was enacted, as Initiative No. 276, at the November, 1972, state general election.1/ It stems from the fact that the drafters of the law did not define or otherwise state specific standards outlining either the right of personal privacy or the concept of vital governmental interests upon which access to records is made dependent under the law. Instead, they left it to the courts to determine the status of given public records on a case‑by-case basis under procedures which they then spelled out within the initiative. Accord, AGO 1973 No. 4 [[to Robert E. Schillberg, Prosecuting Attorney of Snohomish County, on January 19, 1973]], at p. 12. As a consequence, however, it has thus in turn not been possible for this office to render opinions regarding the disclosure (or nondisclosure) of particular documents. Rather, whenever asked, we have responded by simply outlining the legal procedures which are available to obtain a judicial resolution of the question ‑ as we will once again now do in the context of your present question.
[[Orig. Op. Page 6]]
The pertinent procedural sections of the public disclosure law, insofar as a judicial determination of the status of given public records is concerned, are RCW 42.17.310(3) and (4), RCW 42.17.330 and RCW 42.17.340 and they read, in pertinent part, as follows:
RCW 42.17.310(3) and (4):
"(3) Inspection or copying of any specific records, exempt under the provisions of this section, may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records, is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.
"(4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld."
"The examination of any specific public record may be enjoined if, upon motion and affidavit, the superior court for the county in which the movant resides or in which the record is maintained, finds that such examination would clearly not be in the public interest and would substantially and irreparably damage any person, or would substantially and irreparably damage vital governmental functions."
"(1) Upon the motion of any person having been denied an opportunity to inspect or copy a public record by an agency, the superior court in the county in which a record is maintained may require the responsible agency to show cause why it has refused to allow inspection or copying of a specific public record or class of records. The burden of proof shall be on the agency to establish that refusal to permit public inspection and copying is required.
[[Orig. Op. Page 7]]
". . .
"(3) Any person who prevails against an agency in any action in the courts seeking the right to inspect or copy any public record shall be awarded all costs, including reasonable attorney fees, incurred in connection with such legal action. In addition, it shall be within the discretion of the court to award such person an amount not to exceed twenty-five dollars for each day that he was denied the right to inspect or copy said public record."
Thus, in terms of your present question, if a taxpayer whose land is being valued by the use of comparable leases wishes (without filing a petition for review under chapter 84.48 RCW) to inspect any such leases (or related secondary records) in the custody of the county assessor, he should first make a request of the assessor to be allowed to do so. If the assessor responds by refusing, the latter is then required to give reasons for having done so ‑ and if the taxpayer, in turn, does not find those reasons to be satisfactory he may take the matter to court under the provisions of RCW 42.17.340(1),supra. And, as you will readily note, there are several features of that statute which are designed to aid a person in obtaining access to such public records as he wishes to inspect. First, the burden of proof is on the agency to establish that its refusal to permit inspection is required by the law. Secondly, the court may examine the recordsincamera in order to make an independent judgment as to whether or not they should be subject to public inspection. Thirdly, a person who prevails in obtaining public inspection against a refusal by an agency to permit such inspection is entitled, under subsection (3) of RCW 42.17.340, to be awarded ". . . all costs, including reasonable attorney fees, incurred in connection with such legal action. . . ." Also, that same subsection of RCW 42.17.340 then concludes by providing that:
". . . in addition, it shall be within the discretion of the court to award such person an amount not to exceed twenty-five dollars for each day that he was denied the right to inspect or copy said public record."
On the other hand, the judicial review procedures of the public disclosure law are also clearly designed to take into account the interests of the public agency having custody [[Orig. Op. Page 8]] (here, the county assessor) and of those individuals (here, the parties to the lease or leases) to whom the records in question pertain. See, again, RCW 42.17.310(3) and 42.17.330, supra.
In essence, these various procedural provisions of the law do two things. First, they identify the competing interests which might be involved in any request for inspection of a given record ‑ but without giving any precise definitions of those interests. And secondly, after thus identifying those interests, they establish procedures for obtaining a judicial resolution as to which of the competing interests, in a given case, should prevail.
The second part of your question, as we have paraphrased it, assumes that the property owner involved has filed a petition for review of the assessor's determination of "net cash rental" with the county board of equalization under chapter 84.48 RCW and asks:
". . . to what extent will that fact affect the right of the landowner to obtain the same material or information from the assessor?"
First, it is clear that such review is available. In its last paragraph, RCW 84.34.065(1),supra, provides as follows:
"The current 'net cash rental' or 'earning capacity' shall be determined by the assessor with the advice of the advisory committee as provided in RCW 84.34.145, and through a continuing study within his office, assisted by studies of the department of revenue. This net cash rental figure as it applies to any farm and agricultural land may be challenged before the same boards or authorities as would be the case with regard to assessed values on general property." (Emphasis supplied.)
Thus, all of the procedures relating to appeals to the county board of equalization are applicable to a property owner's challenge, before the county board of equalization, to the assessor's determination of the "net cash rental" factor in the valuation process for farm and agricultural lands. The most important of those procedures, for purposes of your question, will be found in RCW 84.48.150 which provides, in [[Orig. Op. Page 9]] pertinent part, as follows:
"The assessor shall, upon the request of any taxpayer who petitions the board of equalization for review of a tax claim or valuation dispute, make available to said taxpayer a compilation of comparable sales utilized by the assessor in establishing such taxpayer's property valuation. If valuation criteria other than comparable sales were used, the assessor shall furnish the taxpayer with such other factors and the addresses of such other property used in making the determination of value.
"The assessor shall within thirty days of such request but at least ten business days prior to such taxpayer's appearance before the board of equalization make available to the taxpayer the valuation criteria and/or comparables which shall not be subsequently changed or modified by the assessor during review or appeal proceedings unless the assessor has found new evidence supporting the assessor's valuation, in which situation the assessor shall provide such additional evidence to the taxpayer at least ten business days prior to the hearing on appeal or review proceedings. . . ."
Two features of this statute are to be noted. First, the statute addresses itself only to a situation in which a taxpayer has petitioned a county board of equalization for review in connection with a tax claim or valuation dispute and has made a request for information prior to the hearing on his petition. Secondly, once the statute does become operative it applies even with respect to valuation criteria other than comparable sales. And the "other factors" which the assessor must furnish to the taxpayer under this statute would certainly, in our judgment, include such "other factors" as are obtained from leases of other comparable property.
This is not to say that under RCW 84.48.150, supra, the assessor is required to furnish the taxpayer a copy of any such "comparable leases" themselves. He is, however, required to furnish the taxpayer with any information contained in those leases if he has used such information for [[Orig. Op. Page 10]] purposes of valuing the taxpayer's property. And he also must furnish the address of the property covered by the lease. The purpose of this statute, of course, is to give the taxpayer the information he needs to test out whether the supposedly comparable sale or lease is really comparable.
Finally, and most importantly, it will be noted that RCW 84.48.150,supra, does not embody any of the kinds of restrictions on access to information which are contained in the public disclosure law, Initiative No. 276,supra. Instead, that later, 1973, law2/ seems to us to grant to a taxpayer an unqualified right to be furnished with any information contained in "comparable" sales or leases which a county assessor has used for the purpose of valuing the taxpayer's property. This, however, does not mean that RCW 84.48.150 is in conflict with the public disclosure law so as to give rise to a necessity to determine the relationship between these two laws in accordance with the doctrine or concept of implied amendment or repeal. Rather, it merely means that insofar as information relating to such comparable leases or sales is concerned, the legislature has, by its later affirmative act, negated any basis for invoking either a "right of privacy" or a "vital governmental interest" objection under RCW 42.17.260, et seq., supra, to disclosure of that particular information to a taxpayer who files a petition for review with his county board of equalization under chapter 84.48 RCW and then invokes RCW 84.48.150.
As we have pointed out in our response to your first question, the judicial review procedures of the public disclosure law do two things. First, they identify the competing interests which might be involved in any request for inspection of a given record ‑ but without defining those interests. And then secondly, they establish procedures for obtaining a judicial resolution as to which of those competing interests, in any given case, should prevail; for, stating the proposition negatively, the disclosure law itself does not purport to determine which competing interest, in any given case, should win out ‑ or even what weight they should be given. Here, however, in RCW 84.48.150, supra, the legislature has, in effect, made such a determination. In essence, the legislature has decided that neither any possible right of [[Orig. Op. Page 11]] privacy nor any possible "vital governmental interest" should outweigh a taxpayer's right to obtain information which, in turn, he must be able to present to the local board of equalization in order to enable it to determine whether the assumptions upon which his land is being valued are, in fact valid; provided, however, that the information in question is in the hands of the assessor and was used by him in arriving at the valuation. In short, just as a judge can define and weigh the competing interests involved in any given case, so too can the legislature on a more generalized basis and, in our opinion, it has done so in RCW 84.48.150, supra.
We trust that the foregoing will be of some assistance to you.
Very truly yours,
TIMOTHY R. MALONE
Assistant Attorney General
*** FOOTNOTES ***
1/See, AGO 1973 No. 4 [[to Robert E. Schillberg, Prosecuting Attorney of Snohomish County, on January 19, 1973]], AGO 1973 No. 10 [[to C. J. Rabideau, Prosecuting Attorney of Franklin County on April 16, 1973]], AGLO 1976 No. 24 [[to Earl F. Tilley, State Representative, on March 25, 1976, an Informal Opinion, AIR-76524]]and AGLO 1976 No. 57 [[to Max Benitz, State Senator, on September 15, 1976, an Informal Opinion, AIR-76557]].
2/RCW 84.48.150, supra, was enacted as § 1, chapter 30, Laws of 1973, 1st Ex. Sess., whereas the public disclosure law (Initiative No. 276) was approved by the voters at the 1972 general election and became effective, in accordance with its own express terms, upon January 1, 1973.