CERTIFICATION OF ENROLLMENT
SUBSTITUTE HOUSE BILL 1818
Chapter 109, Laws of 2024
68th Legislature
2024 Regular Session
FORESTLAND AND TIMBERLAND—SALE TO GOVERNMENTAL ENTITY—COMPENSATING
TAX EXCLUSION
EFFECTIVE DATE: June 6, 2024
Passed by the House January 17, 2024 CERTIFICATE
Yeas 97 Nays 0
I, Bernard Dean, Chief Clerk of the
House of Representatives of the
LAURIE JINKINS State of Washington, do hereby
Speaker of the House of certify that the attached is
Representatives SUBSTITUTE HOUSE BILL 1818 as
passed by the House of
Representatives and the Senate on
the dates hereon set forth.
Passed by the Senate March 1, 2024
Yeas 49 Nays 0
BERNARD DEAN
DENNY HECK Chief Clerk
President of the Senate
Approved March 15, 2024 9:40 AM FILED
March 15, 2024
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
 SUBSTITUTE HOUSE BILL 1818
Passed Legislature - 2024 Regular Session
State of Washington 68th Legislature 2023 Regular Session
By House Finance (originally sponsored by Representatives Tharinger
and Chapman)
READ FIRST TIME 03/29/23.
1 AN ACT Relating to exclusion of compensating tax when land is
2 sold to a governmental entity intending to manage the land similarly
3 to designated forestland or timberland; amending RCW 84.33.140 and
4 84.34.108; and creating a new section.
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
6 Sec. 1. RCW 84.33.140 and 2017 3rd sp.s. c 37 s 1002 are each
7 amended to read as follows:
8 (1) When land has been designated as forestland under RCW
9 84.33.130, a notation of the designation must be made each year upon
10 the assessment and tax rolls. A copy of the notice of approval
11 together with the legal description or assessor's parcel numbers for
12 the land must, at the expense of the applicant, be filed by the
13 assessor in the same manner as deeds are recorded.
14 (2) In preparing the assessment roll as of January 1, 2002, for
15 taxes payable in 2003 and each January 1st thereafter, the assessor
16 must list each parcel of designated forestland at a value with
17 respect to the grade and class provided in this subsection and
18 adjusted as provided in subsection (3) of this section. The assessor
19 must compute the assessed value of the land using the same assessment
20 ratio applied generally in computing the assessed value of other
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1 property in the county. Values for the several grades of bare
2 forestland are as follows:
3 LAND OPERABILITY VALUES
4 GRADE CLASS PER ACRE
5 1 $234
6 1 2 229
7 3 217
8 4 157
9 1 198
10 2 2 190
11 3 183
12 4 132
13 1 154
14 3 2 149
15 3 148
16 4 113
17 1 117
18 4 2 114
19 3 113
20 4 86
21 1 85
22 5 2 78
23 3 77
24 4 52
25 1 43
26 6 2 39
27 3 39
28 4 37
29 1 21
30 7 2 21
31 3 20
32 4 20
33 8 1
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 1 (3) On or before December 31, 2001, the department must adjust by
2 rule under chapter 34.05 RCW, the forestland values contained in
3 subsection (2) of this section in accordance with this subsection,
4 and must certify the adjusted values to the assessor who will use
5 these values in preparing the assessment roll as of January 1, 2002.
6 For the adjustment to be made on or before December 31, 2001, for use
7 in the 2002 assessment year, the department must:
8 (a) Divide the aggregate value of all timber harvested within the
9 state between July 1, 1996, and June 30, 2001, by the aggregate
10 harvest volume for the same period, as determined from the harvester
11 excise tax returns filed with the department under RCW 84.33.074; and
12 (b) Divide the aggregate value of all timber harvested within the
13 state between July 1, 1995, and June 30, 2000, by the aggregate
14 harvest volume for the same period, as determined from the harvester
15 excise tax returns filed with the department under RCW 84.33.074; and
16 (c) Adjust the forestland values contained in subsection (2) of
17 this section by a percentage equal to one-half of the percentage
18 change in the average values of harvested timber reflected by
19 comparing the resultant values calculated under (a) and (b) of this
20 subsection.
21 (4) For the adjustments to be made on or before December 31,
22 2002, and each succeeding year thereafter, the same procedure
23 described in subsection (3) of this section must be followed using
24 harvester excise tax returns filed under RCW 84.33.074. However, this
25 adjustment must be made to the prior year's adjusted value, and the
26 five-year periods for calculating average harvested timber values
27 must be successively one year more recent.
28 (5) Land graded, assessed, and valued as forestland must continue
29 to be so graded, assessed, and valued until removal of designation by
30 the assessor upon the occurrence of any of the following:
31 (a) Receipt of notice of request to withdraw land classified
32 under RCW 84.34.020(3) within two years before the date of the merger
33 under RCW 84.34.400. Land previously classified under chapter 84.34
34 RCW will be removed under the provisions of this chapter when two
35 assessment years have passed following receipt of the notice as
36 described in RCW 84.34.070(1);
37 (b) Receipt of notice from the owner to remove the designation;
38 (c) Sale or transfer to an ownership making the land exempt from
39 ad valorem taxation;
p. 3 SHB 1818.SL
 1 (d) Sale or transfer of all or a portion of the land to a new
2 owner, unless the new owner has signed a notice of forestland
3 designation continuance, except transfer to an owner who is an heir
4 or devisee of a deceased owner or transfer by a transfer on death
5 deed, does not, by itself, result in removal of designation. The
6 signed notice of continuance must be attached to the real estate
7 excise tax affidavit provided for in RCW 82.45.150. The notice of
8 continuance must be on a form prepared by the department. If the
9 notice of continuance is not signed by the new owner and attached to
10 the real estate excise tax affidavit, all compensating taxes
11 calculated under subsection (11) of this section are due and payable
12 by the seller or transferor at time of sale. The auditor may not
13 accept an instrument of conveyance regarding designated forestland
14 for filing or recording unless the new owner has signed the notice of
15 continuance or the compensating tax has been paid, as evidenced by
16 the real estate excise tax stamp affixed thereto by the treasurer.
17 The seller, transferor, or new owner may appeal the new assessed
18 valuation calculated under subsection (11) of this section to the
19 county board of equalization in accordance with the provisions of RCW
20 84.40.038. Jurisdiction is hereby conferred on the county board of
21 equalization to hear these appeals;
22 (e) Determination by the assessor, after giving the owner written
23 notice and an opportunity to be heard, that:
24 (i) The land is no longer primarily devoted to and used for
25 growing and harvesting timber. However, land may not be removed from
26 designation if a governmental agency, organization, or other
27 recipient identified in subsection (13) or (14) of this section as
28 exempt from the payment of compensating tax has manifested its intent
29 in writing or by other official action to acquire a property interest
30 in the designated forestland by means of a transaction that qualifies
31 for an exemption under subsection (13) or (14) of this section. The
32 governmental agency, organization, or recipient must annually provide
33 the assessor of the county in which the land is located reasonable
34 evidence in writing of the intent to acquire the designated land as
35 long as the intent continues or within sixty days of a request by the
36 assessor. The assessor may not request this evidence more than once
37 in a calendar year;
38 (ii) The owner has failed to comply with a final administrative
39 or judicial order with respect to a violation of the restocking,
40 forest management, fire protection, insect and disease control, and
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 1 forest debris provisions of Title 76 RCW or any applicable rules
2 under Title 76 RCW; or
3 (iii) Restocking has not occurred to the extent or within the
4 time specified in the application for designation of such land.
5 (6) Land may not be removed from designation if there is a
6 governmental restriction that prohibits, in whole or in part, the
7 owner from harvesting timber from the owner's designated forestland.
8 If only a portion of the parcel is impacted by governmental
9 restrictions of this nature, the restrictions cannot be used as a
10 basis to remove the remainder of the forestland from designation
11 under this chapter. For the purposes of this section, "governmental
12 restrictions" includes: (a) Any law, regulation, rule, ordinance,
13 program, or other action adopted or taken by a federal, state,
14 county, city, or other governmental entity; or (b) the land's zoning
15 or its presence within an urban growth area designated under RCW
16 36.70A.110.
17 (7) The assessor has the option of requiring an owner of
18 forestland to file a timber management plan with the assessor upon
19 the occurrence of one of the following:
20 (a) An application for designation as forestland is submitted;
21 (b) Designated forestland is sold or transferred and a notice of
22 continuance, described in subsection (5)(d) of this section, is
23 signed; or
24 (c) The assessor has reason to believe that forestland sized less
25 than twenty acres is no longer primarily devoted to and used for
26 growing and harvesting timber. The assessor may require a timber
27 management plan to assist with determining continuing eligibility as
28 designated forestland.
29 (8) If land is removed from designation because of any of the
30 circumstances listed in subsection (5)(a) through (d) of this
31 section, the removal applies only to the land affected. If land is
32 removed from designation because of subsection (5)(e) of this
33 section, the removal applies only to the actual area of land that is
34 no longer primarily devoted to the growing and harvesting of timber,
35 without regard to any other land that may have been included in the
36 application and approved for designation, as long as the remaining
37 designated forestland meets the definition of forestland contained in
38 RCW 84.33.035.
39 (9) Within thirty days after the removal of designation as
40 forestland, the assessor must notify the owner in writing, setting
p. 5 SHB 1818.SL
 1 forth the reasons for the removal. The seller, transferor, or owner
2 may appeal the removal to the county board of equalization in
3 accordance with the provisions of RCW 84.40.038.
4 (10) Unless the removal is reversed on appeal a copy of the
5 notice of removal with a notation of the action, if any, upon appeal,
6 together with the legal description or assessor's parcel numbers for
7 the land removed from designation must, at the expense of the
8 applicant, be filed by the assessor in the same manner as deeds are
9 recorded and a notation of removal from designation must immediately
10 be made upon the assessment and tax rolls. The assessor must revalue
11 the land to be removed with reference to its true and fair value as
12 of January 1st of the year of removal from designation. Both the
13 assessed value before and after the removal of designation must be
14 listed. Taxes based on the value of the land as forestland are
15 assessed and payable up until the date of removal and taxes based on
16 the true and fair value of the land are assessed and payable from the
17 date of removal from designation.
18 (11) Except as provided otherwise in this section, a compensating
19 tax is imposed on land removed from designation as forestland. The
20 compensating tax is due and payable to the treasurer thirty days
21 after the owner is notified of the amount of this tax. As soon as
22 possible after the land is removed from designation, the assessor
23 must compute the amount of compensating tax, and the treasurer must
24 mail a notice to the owner of the amount of compensating tax owed and
25 the date on which payment of this tax is due. The amount of
26 compensating tax is equal to the difference between the amount of tax
27 last levied on the land as designated forestland and an amount equal
28 to the new assessed value of the land multiplied by the dollar rate
29 of the last levy extended against the land, multiplied by a number,
30 in no event greater than nine, equal to the number of years for which
31 the land was designated as forestland, plus compensating taxes on the
32 land at forestland values up until the date of removal and the
33 prorated taxes on the land at true and fair value from the date of
34 removal to the end of the current tax year.
35 (12) Compensating tax, together with applicable interest thereon,
36 becomes a lien on the land, which attaches at the time the land is
37 removed from designation as forestland and has priority and must be
38 fully paid and satisfied before any recognizance, mortgage, judgment,
39 debt, obligation, or responsibility to or with which the land may
40 become charged or liable. The lien may be foreclosed upon expiration
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 1 of the same period after delinquency and in the same manner provided
2 by law for foreclosure of liens for delinquent real property taxes as
3 provided in RCW 84.64.050. Any compensating tax unpaid on its due
4 date will thereupon become delinquent. From the date of delinquency
5 until paid, interest is charged at the same rate applied by law to
6 delinquent ad valorem property taxes.
7 (13) The compensating tax specified in subsection (11) of this
8 section may not be imposed if the removal of designation under
9 subsection (5) of this section resulted solely from:
10 (a) Transfer to a government entity in exchange for other
11 forestland located within the state of Washington;
12 (b)(i) A taking through the exercise of the power of eminent
13 domain, or (ii) a sale or transfer to an entity having the power of
14 eminent domain in anticipation of the exercise of such power based on
15 official action taken by the entity and confirmed in writing;
16 (c) A donation of fee title, development rights, or the right to
17 harvest timber, to a government agency or organization qualified
18 under RCW 84.34.210 and 64.04.130 for the purposes enumerated in
19 those sections, or the sale or transfer of fee title to a
20 governmental entity or a nonprofit nature conservancy corporation, as
21 defined in RCW 64.04.130, exclusively for the protection and
22 conservation of lands recommended for state natural area preserve
23 purposes by the natural heritage council and natural heritage plan as
24 defined in chapter 79.70 RCW or approved for state natural resources
25 conservation area purposes as defined in chapter 79.71 RCW, or for
26 acquisition and management as a community forest trust as defined in
27 chapter 79.155 RCW. At such time as the land i