HomeMy WebLinkAboutBIL 049 Draft 02 2002-2004
COUNTY OF HAWAII STATE OF HAWAII
BILL NO. 49
(Draft 2)
ORDINANCE NO.
AN ORDINANCE AMENDING CHAPTER 19, ARTICLES 1,7 AND 8 OF THE
HAWAII COUNTY CODE 1983 (1995 EDITION), RELATING TO REAL
PROPERTY TAX DEFINITIONS; NON-DEDICATED AGRICULTURAL USE
ASSESSMENT AND AGRICULTURAL USE DEDICATION.
BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII:
SECTION 1. Chapter 19, article 1, section 19-2 of the Hawaii County
Code 1983 (1995 edition), relating to Definitions is amended to read as follows:
Article 1. Administration.
Section 19-2. Definitions.
(a) Whenever used in this Chapter:
(1) "Commercial agricultural activities" shall mean the use of oropertv
to generate income, monetary gain or economic benefit in the form
of money or money's worth of a minimum $2,000 gross income oer
year, while adhering to generally accepted standards or recognized
practices within that agricultural industry.
(2) "Commercial Agricultural Use Dedication" means the use of land on
a continuous and regular basis that demonstrates the owner is
engaged in commercial agricultural activities from:
(A) intensive agriculture;
(B) orchards;
(C) feed crops and fast rotation forestry: or
(D) pasture and slow rotation forestry.
The term "commercial agricultural use dedication" does not include
nor apply to areas used primarily as homesite. setbacks, or open
landscape associated with residential use planted with fruit and
ornamental trees, flowers, and vegetables primarily for home use.
(3) "Continuous and regular basis" shall be evidenced by the recurring
planting, cultivation and harvesting of crops or ongoing animal
husbandry or aquaculture activities that adhere to generally
accepted standards or recognized practices within that agricultural
industry.
[(1)] jai "County" means the County of Hawaii.
[(4)] f~ "Dedicated lands" are lands which are restricted in their use
for specified periods of time by covenants executed between
the landowners and the director of finance as provided by
this chapter.
[(2)] ~ "Director" means the director of finance of the County of
Hawaii or the director's authorized subordinate.
(7) "Feed crops and fast rotation forestry" includes such crops as
forage, seed, cane, rice, and biomass grasses.
(8) "Pasture and slow rotation forestry" includes, but is not limited to.
pasture and longer rotation forestry.
(9) "Intensive agriculture" includes such crops as vegetables, ginger,
taro, herbs, nurseries, foliage, cut & potted flowers. piggeries, dairy,
poultry, feedlots, aquaculture, honey and honey bees.
[(5)] ~ "Market value" is the most probable sale price of a property
in terms of money in a competitive and open market
assuming that the buyer and seller are acting prudently and
knowledgeably, allowing sufficient time for the sale, and
assuming that the transaction is not affected by undue
stress.
(11) "Non-dedicated agricultural use assessment" means the present
use of agricultural or residential and agricultural zoned land on a
continuous and regular basis that demonstrates the owner is
engaged in agricultural activities from:
(A) intensive agriculture;
(B) orchards;
fC) feed crops and fast rotation forestry; or
(D) pasture and slow rotation forestry.
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The term "non-dedicated agricultural use assessment" does not
include nor apply to areas used primarily as homesite, setbacks, or
open landscape associated with residential use.
(12) "Orchards" includes such crops as macadamia nuts, guava,
banana, papaya, avocado, Drapes, passion fruit, coffee. citrus,
cacao, pineapple and tropical specialty fruits.
[(3)] 13 "Property" or "real property" means and includes all land and
appurtenances thereof and the buildings, structures, fences,
and improvements erected on or affixed to the same, and
any fixture which is erected on or affixed to such land,
building, structures, fences, and improvements, including all
machinery and other mechanical or other allied equipment
and the foundations thereof, whose use thereof is necessary
to the utility of such land, buildings, structures, fences, and
improvements, or whose removal therefrom cannot be
accomplished without substantial damage to such land,
buildings, structures, fences, and improvements, excluding,
however, any growing crops.
SECTION 2. Chapter 19, article 7, section 19-53 of the Hawaii County
Code 1983(1995 edition) relating to Valuation is amended to read as follows:
Article 7. Tax Maps; Valuations.
Section 19-53. Valuation; considerations in fixing.
(a) The director of finance shall cause the market value of all taxable real
property to be determined and annually assessed by the market data and
cost approaches to value using appropriate systematic methods suitable
for mass valuation of properties for taxation purposes, so selected and
applied to obtain, as far as possible, uniform and equalized assessments
throughout the County. In making such determination and assessment,
the director shall separately value and assess, within each class
established in accordance with subsection (e) of this section:
(1) Buildings.
(A) In determining the value of buildings, consideration shall be
given to any additions, alterations, remodeling, modifications
or other new construction, improvement or repair work
undertaken upon or made to existing buildings as the same
may result in higher assessable valuation of said buildings.
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(2) All other real property, exclusive of buildings.
(b) So far as practicable, records shall be compiled and kept which shall show
the methods established by or under the authority of the director, for the
determination of values.
(c) Whenever land has been divided into lots or parcels as provided by law,
each such lot or parcel shall be separately assessed.
(d) When a condominium property regime is declared for a property, each unit
shall be classified upon consideration of its actual use into one of the
general classes in the same manner as land.
(e) Classification of land:
(1) Except as otherwise provided in subsection (e)(2) of this section,
land shall be classified, upon consideration of its highest and best
use, into the following general classes:
(A) Improved residential,
(B) Unimproved residential,
(C) Apartment,
(D) Hotel and resort,
(E) Commercial,
(F) Industrial,
(G) Agricultural or native forests,
(H) Conservation, and
(I) Homeowner.
(2) In assigning land to one of the general classes the director of
finance shall give major consideration to the districting established
by the land use commission pursuant to chapter 205, Hawaii
Revised Statutes, the districting established by the County in its
general plan and zoning ordinance, use classifications established
in the general plan of the State, and such other factors which
influence highest and best use, except that parcels which are used
exclusively as the owner's principal residence shall be classified as
"Homeowner" without regard to the highest and best use, provided
that the director has granted to the owner a home exemption in
accordance with sections 19-71 to 19-72.
(A) The homeowner class is exclusively reserved for properties
which are used as the owner's principal residence. Uses
which shall not qualify as "Homeowner" include:
(i) Real property which is valued according to its
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nondedicated agricultural or native forest use
pursuant to subsection 19-57 [53(f)(1)], or [(h)]
subsection 19-53(g),
(ii) Real property which is dedicated to an agricultural
use or native forest use category pursuant to section
19-[55]_ or section 19-58.4 (Native forest dedication),
(iii) Real property which is used for commercial or
income-producing purposes,
(iv) Real property which is used for residential rental
purposes, whether for short-term or long-term lease,
(v) Real property which is used for any purpose other
than the owner's principal residence.
(3) Whenever there is an overlap or contradiction in districting or use
classification between the County and the State, zoned districts by
the County shall take precedence.
(4) "Improved residential" shall mean land which is classified as
residential by the department of finance upon consideration of its
highest and best use, and is property which fulfills the provisions of
at least one of the following subparagraphs:
(A) Land which has been subdivided prior to any assessment
year as a lot for single- or two- family residential use in
conformity with the then existing County zoning ordinances,
and has been approved for sale or approved as being in
conformity with all of the subdivision requirements of the
County, or
(B) Land which is in actual single- ortwo-family residence use at
a density of at least asingle- or atwo-family residential
building per acre, or
(C) Land which is sufficiently developed with necessary land
improvements to support a use density of at least asingle-
ortwo-family residential building per acre.
(5) "Unimproved residential" shall mean all residential class lands not
classified as "improved residential" or "homeowner."
[(f)(1) In determining the value of lands which are classified and used for
agriculture, whether such lands are dedicated pursuant to section
19-55 or not, consideration shall be given to rent, productivity,
nature of actual agricultural use, the advantage or disadvantage of
factors such as location, accessibility, transportation facilities, size,
shape, topography, quality of soil, water privileges, availability of
water and its cost, easements and appurtenances, and to the
opinions of persons who may be considered to have special
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knowledge of land values. Lands classified as tree farm property
pursuant to chapter 186, Hawaii Revised Statutes, shall be
considered for classification and valuation as agricultural.
(2) A deferred or rollback tax shall be imposed on the owner of
agricultural lands assessed according to its agricultural use as
provided in subsection (f) of this section in the event of a change in
land use classification by the authorized government agency to
urban or rural districts or upon the subdivision of the land into
parcels of less than five acres, provided that the deferred or
rollback tax shall not apply if the owner has dedicated the land as
provided in section 19-55 before the change in land use
classification to urban or rural districts or subdivision of the land into
parcels of less than five acres, and fulfills all of the requirements of
the dedication. The deferred or rollback tax shall commence from
the date the conversion to urban or rural districts or into parcels
less than five acres was made retroactive to the date the
assessment was made pursuant to subsection (f) of this section but
for not more than ten years. Any other provisions to the contrary
notwithstanding, the deferred or rollback tax shall apply to a change
in land use classification only if such change was made as a result
of a petition by a property owner or lessee and shall apply only
upon lands owned by the owner or lessee who has petitioned for
the change in classification. The deferred or rollback tax shall not
apply to lands owned by any owner or lessee who has not
petitioned for the change in classification or where the change in
classification or zoning is initiated by any government agency or
instrumentality. The deferred or rollback tax shall be based on the
difference in assessed value between the highest and best use and
the agricultural use of the land, at the rate applicable for the
respective years. All differences in the amount of taxes that were
paid and those that would have been due from assessment in the
higher use shall be payable with a ten percent penalty from the
respective dates that these payments would have been due. The
additional taxes and penalties due and owing shall be a paramount
lien upon the property as provided for by this chapter.
(A) Where the owner changes the land use classification or
subdivides the land into parcels of less than five acres, the
deferred or rollback tax shall be due and payable within sixty
days of such conversion, subject to a ten percent penalty. If
the owner has dedicated the land as provided in section 19-
55 before the change in the land use classification or
subdivision into parcels of less than five acres, and any
owner of the dedicated land or subdivided parcels later
breaches a condition of the dedication before its completion,
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deferred or rollback taxes shall be imposed on the subject
parcel under section 19-55 and this section, retroactive from
the end of the tax year in which the breach occurs.
(B) In any case in which deferred or rollback taxes are imposed
after successful completion of an agricultural dedication
period, the deferred or rollback taxes shall be retroactive
only to the end of the completed dedication period, and shall
not be imposed for any time covered by a successfully
completed agricultural dedication period. In cases involving a
breach of a ten-year dedication, or a rollback period of ten or
fewer years for breach of a twenty-year dedication, the
rollback taxes under this section shall be for a maximum
total of ten years, including both the breached dedication
rollback period and any period of nondedicated agricultural
use assessment subject to rollback. Rollback taxes for any
breach of dedication affecting more than ten years under a
twenty-year dedication shall be as provided under section
19-55(f), not to exceed twenty years.
(3) Where lands located within agricultural districts are put to
agricultural uses, the tax on that portion of such lands not usable or
suitable for any agricultural use shall be deferred and shall be
payable upon the imposition of deferred or rollback taxes as
provided under this section.
(4) A portion or portions of a parcel of land that is being assessed as
pasture, whether it is dedicated under the provisions of section 19-
55 or not, may be taken out of production for a specified time
period, not to exceed ten years, as part of a good forestry plan in
order to restore a degraded native forest such that it meets the
requirements of the native forest category as stated in section 19-
53 (h). Such a plan indicating the acreage and area, as well as the
specific forest restoration work to be done, shall be filed with the
director of finance by September 1 and approved by the director by
December 15. If the plan is approved, the land shall continue to be
given the same pasture assessment.
(A) The owner shall provide to the director of finance yearly
evidence that the forest restoration plan is being
implemented, as well as a signed and notarized affidavit by a
recognized forestry professional that the restoration plan is
likely to succeed within the designated time period. The
owner shall continue to fulfill all other requirements of the
agricultural assessment, including providing yearly proof that
any portion of the parcel not being restored to a native
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forest, but still being assessed for an agricultural use,
continues to be used and maintained substantially and
continuously in the approved agricultural use.
(B) If, at the end of the time period designated by the plan, the
land meets the requirements of the native forest category as
described in subsection (h) of this section, then it shall be
classified as a native forest. If, at the end of the time period
designated in the plan, the land does not meet the
requirements of the native forest category, the land may be
returned to its designated agricultural use as pasture or it
shall be assessed and taxed at market value.
(C) If the land is dedicated according to section 19-55, it shall
remain dedicated as pasture or native forest and shall
continue to be subject to all rollback taxes and penalties
applicable to dedications.
(g)]~ In determining the value of buildings, consideration shall be given
to any additions, alterations, remodeling, modifications or other new
construction, improvement or repair work undertaken upon or made
to existing buildings as the same may result in higher assessable
valuation of said buildings; provided, however, that [they] the
increase in value resulting from any additions, alterations,
modifications or other new construction, improvements or repair
work to buildings undertaken or made by the owner-occupant
thereof pursuant to the requirements of any urban redevelopment,
rehabilitation or conservation project under the provisions of part II
of chapter 53, Hawaii Revised Statutes, shall not increase the
assessable valuation of any building for a period of seven years
from the date of certification as hereinafter provided.
It is further provided that the owner-occupant shall file with the director of
finance, in the manner and place which the director may designate, a
statement of the details of the improvements certified in the following
manner:
(1) In the case of additions, alterations, modifications or other new
construction, improvements or repair work to a building that are
undertaken pursuant to any urban redevelopment, rehabilitation or
conservation project as hereinabove mentioned, the statement shall
be certified by the mayor or any government official designated by
the mayor and approved by the council, that the additions,
alterations, modifications, or other new construction, improvement
or repair work to the buildings were made and satisfactorily comply
with the particular urban redevelopment, rehabilitation or
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conservation act provision, or
(2) In the case of maintenance or repairs to a residential building
undertaken pursuant to any health, safety, sanitation or other
governmental code provision, the statement shall be certified by the
mayor or any governmental official designated by the mayor and
approved by the council, that:
(A) The building was inspected by them and found to be
substandard when the owner-occupant made the claim, and
(B) The maintenance or repairs to the buildings were made and
satisfactorily comply with the particular code provision.
((h)](g) "Native forests" means lands which have sixty percent or greater
native species forest cover. Native species are defined as those
indigenous to the Hawaiian islands. Indigenous in this context shall
mean plants that became established or evolved in the Hawaiian
islands without the aid of human beings. The forest cover
requirement may be met by native species in either the tree layer or
the understory layer, or a combination of the two; provided a
minimum twenty-five percent of the forest cover shall be tree cover.
(1) The director of finance shall determine whether or not land qualifies
as a native forest by using current natural resource or vegetation
maps or other acceptable evidence. Other acceptable evidence
includes, but is not limited to:
(A) A written affidavit by a recognized professional in the field of
natural resources, or
(B) A finding by a County, State or Federal agency or
department with the relevant expertise in the field of natural
resources.
(2) The following shall also apply to land classified native forest:
(A) If the cover of native forest species falls below sixty percent,
the native forest classification shall be rescinded.
(B) Land taxed as native forest shall be maintained according to
sound land management practices such that soil erosion is
minimized, foreign species are controlled, and the watershed
is protected.
(C) The native forest assessment is available only for parcels
which are covered with at least five intact and contiguous
acres of native forest.
(3) In determining the value of lands which are classified native forest,
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the director shall assign the value of the lowest agricultural use
category that the land could qualify for if it were to be put into
agricultural use.
SECTION 3. Chapter 19, article 7, section 19-55 of the Hawaii County
Code 1983 (1995 edition), relating to Dedicated Lands is amended to read as
follows:
Section 19-55. [Dedicated lands] Reserved.
[(a) A special land reserve is established to enable the owner of any parcel of
land within an agricultural district, a rural district, a conservation district, or
any urban district to dedicate his or her land for a specific ranching or
other agricultural use and to have his or her land assessed at its value in
such use provided, that if the land is located within an urban district:
(1) A lessee of the land with a term of ten or more years remaining
from the date of the petition shall also be deemed an owner of the
land within these provisions;
(2) The land dedicated must be used for the cultivation of crops such
as sugar cane, pineapple, truck crops, orchard crops, ornamental
crops, or the like, or tree farms;
(3) The land dedicated must have been substantially and continuously
used for the cultivation of crops such as sugar cane, pineapple,
truck crops, orchard crops, ornamental crops, or the like, or tree
farms, for the five-year period immediately preceding the dedication
request; provided further, that land situated within an agricultural
district may be dedicated for a period of twenty years and shall be
taxed at fifty percent of its assessed value in such use.
(b) If any owner desires to use his or her land for a specific ranching or other
agricultural use and to have his or her land taxed at its assessed value in
this use or fifty percent of its assessed value as the case may be, the
owner shall so petition the director of finance and declare in his or her
petition that his or her land can best be used for the purpose for which he
or she requests permission to dedicate his or her land that if the petition is
approved he will use his or her land for this purpose.
(c) If the owner desires to change from one specific ranching or other
agricultural use to another ranching or other agricultural use the owner
shall so petition the director of finance and declare in the petition that:
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(1) His or her land can best be used for a ranching or other agricultural
purpose other than that for which he or she originally requested
permission; and
(2) He or she will use his or her land for that new purpose if the petition
is approved.
(d) Upon receipt of a petition as provided above in subsections (b) and (c),
the director shall make a finding of fact as to whether the land in the
petition area is reasonably well suited for the intended use. The finding
shall include and be based upon the productivity ratings of the land in
those uses for which it is best suited, a study of the ownership, size of
operating unit, the present use of surrounding similar lands and other
criteria as may be appropriate.
The director shall also make a finding of fact as to whether the intended
use is in conflict with the overall development plan of the State. If both
findings are favorable to the owner, the director shall approve the petition
and declare that the owner's land is dedicated land; provided, that for
lands in urban districts, the director shall make further findings respecting
the economic feasibility of the intended use of the land. If all three findings
are favorable, the director shall approve the petition and declare the land
to be dedicated. In order to place prospective buyers on notice of the
rollback liability, the petitioner shall within thirty days of notice of approval
record the dedication in accordance with the procedures of the bureau of
conveyances.
(e) The approval of the director of the petition to dedicate shall constitute a
forfeiture on the part of the owner of any right to change the use of his or
her land to a use other than agriculture for a minimum period of ten years
or twenty years as the case may be, subject to cancellation or renewal as
follows:
(1) At least one hundred eighty days prior to any cancellation or
termination, the department of finance shall notify the owner by mail
of such cancellation or termination. The owner shall reapply for
renewal of the dedication by filing an application with the director on
or before September 1 of the tenth or twentieth year as the case
may be. The renewal petition shall, in all respects, be processed
similarly to an original petition. Upon approval by the director of
succeeding dedications, the property shall continue to be assessed
in accordance with the provisions of the dedication;
(2) In the case of a change in a major land use classification not as a
result of a petition by any property owner or lessee such that the
owner's land is placed within an urban district, the dedication may
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be cancelled within sixty days of the change by the owner. Upon
any conveyance or any change in ownership during the period of
dedication, the land shall continue to be subject to the terms and
conditions of the dedication unless a release has been issued by
the director.
Any other provision to the contrary notwithstanding, an approved change
in use as provided in subsections (c) and (d) shall not alter the original
dedication period.
(f) Failure of the owner to observe the restrictions on the use of his or her
land shall cancel the dedication and special tax assessment privilege
retroactive to the date of the dedication, but in any event, shall not exceed
the term of the original dedication, and all differences in the amount of
taxes that were paid and those that would have been due from
assessment in the higher use shall be payable with a ten percent penalty
from the respective dates that these payments would have been due. The
additional taxes and penalties, due and owing as a result of a breach of
the dedication, shall be a paramount lien upon the property as provided for
by this chapter.
(1) Failure to observe the restrictions on the use means failure far a
period of twelve consecutive months to use the land in that manner
requested in the petition or the overt act of changing the use for any
period; provided that a change in land use classification upon
petition by the owner of such dedicated lands, or the petition by the
owner for a change in use as provided in subsection (c), and the
owner's subsequent change in use of such dedicated lands, shall
not be deemed to constitute a failure of the owner to observe the
restrictions on the use.
(2) If an owner is permitted to change the use as provided in
subsections (c) and (d), the owner shall be allowed up to thirty-six
months from the date of the approval of the petition to convert to
the new ranching or agricultural use. If the owner fails to make the
conversion within the specified time limit, the owner will be subject
to the taxes and penalties provided above. For purposes of assess-
ment of taxes and penalties, the conversion period shall be
considered in addition to the specified dedication period, except,
however, in the case of leased lands whose term expires prior to or
in conjunction with the end of the dedication period, the conversion
period shall be considered as a part of the dedication period. The
petitioner shall submit progress reports of his or her efforts in
converting from one agricultural use to another agricultural use to
the director of finance by the anniversary date of the petition
approval and yearly, thereafter, as long as such conversion period
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remains.
Any other provisions to the contrary notwithstanding, when a portion of the
dedicated land is subsequently applied to a use other than the use set
forth in the original petition, only such portion as is withdrawn from the
dedicated use and applied to a use other than ranching or other
agricultural use shall be taxed as provided by this subsection.
(g) The director shall prescribe the form of the petition. The petition shall be
filed with the director of finance by September 1 of any calendar year and
shall be approved or disapproved by December 15. If approved, the
assessment based upon the use requested in the dedication shall be
effective on January 1 of the next calendar year.
(h) The owner may appeal any disapproved petition as in the case of an
appeal from an assessment.
(i) The term "owner" as used in this section includes lessees of real property
whose lease term extends at least ten years from the date of the petition
in the case of a ten-year dedication or lessees of real property whose
lease term extends at least twenty years from the date of the petition in
the case of a twenty-year dedication.
Q) The term "agricultural use" as used in this section shall include
aquaculture.
(k) A special land reserve is established to enable the owner of any parcel of
land within an urban district to dedicate his or her land for a specific
livestock use such as feed lots, calf-raising and like operations in dairy,
beef, swine, poultry and aquaculture, but excluding grazing or pasturing,
and to have his or her land assessed at its value in such use; provided,
that
(1) A lessee of the land with a term of ten or more years remaining
from the date of the petition shall also be deemed an owner of the
land within these provisions;
(2) The land dedicated must be used for livestock uses such as feed
lots, calf-raising and like operations in dairy, beef, swine, poultry
and aquaculture but excluding grazing and pasturing;
(3) The land dedicated must have been substantially and continuously
used in the livestock uses enumerated in (2) hereinabove;
(4) And such livestock use must be compatible with the surrounding
uses.]
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SECTION 4. Chapter 19, article 7, section 19-57 of the Hawaii County
Code 1983 (1995 edition), relating to Reserved is amended to read as follows:
Section 19-57. [Reserved] Non-dedicated Agricultural Use Assessment.
(a) Lands classified and used for agriculture and which are not dedicated
pursuant to Article 8, section 19- may be assessed for real property
tax purposes at a percentage of the land's market value as established
in subsection (a)(2) of this section and shall be subject to the following:
(1) The land in non-dedicated agricultural use must be used
on a continuous and regular basis for intensive
agriculture, orchards feed crops and fast rotation forestry
or pasture and slow rotation forestry on lands zoned by
the County to be in the districts of agricultural, residential
and agricultural, family agricultural, intensive agricultural,
and agricultural project district;
(2) The portion of land that is committed in specific non-
dedicated agricultural use shall be assessed as follows:
twenty five (25) percent of its market value for the
tax year beginninq July 1, 2004;
(B) fifty (50) percent of its market value for the tax
wear beginninq July 1, 2005;
(C) seventy five (75) percent of its market value for the
tax year beginninq July 1, 2006 and thereafter.
(b) All portions of land that are not committed or used for a specific
agricultural use shall be assessed at 100 percent market value.
(c) Application filinq~ assessment effective renewal
(1) The director shall prescribe the form of the non-dedicated
agricultural use application.
(2) The application shall be filed with the director by December 31 of
any calendar year.
(3) The application for anon-dedicated agricultural use assessment
must be signed by all owners of the land being committed.
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If the application is approved, the assessment based upon the use
requested in the application shall be effective as of January 1 for
the following tax vear.
(5) Renewal of the application shall be in such form and at such time
as required by the director.
(d) Deferred or roll back tax.
(1) A deferred or roll back tax shall be imposed on the owner of the
agricultural land upon anv of the following events:
(A) Conversion to anv County zoned district other than
agricultural, residential and agricultural, family
agricultural, intensive agricultural, or agricultural project
district as a result of a petition by the owner or lessee:
(B) The property is subdivided into parcels of less than five
acres in size; or
(C) A condominium property regime is declared for the property
having condominium units with an area equivalent to less
than five acres in size.
(2) The deferred tax shall commence from the date the
conversion was made retroactive to the date the
agricultural use assessment was approved, but for not
more than a period of two years plus the current vear.
(3) The amount of deferred taxes shall be based on the
difference in assessed value between the highest and
best use and the agricultural use of the land, at the tax
rate applicable for the respective years, with a ten
percent penalty.
SECTION 5. Chapter 19, article 8 of the Hawaii County Code 1983 (1995
edition), relating to Reserved is amended to read as follows:
Article 8. [Reserved] Dedications.
Section 19- .Commercial Agricultural Use Dedication.
(a) A special land reserve is established to enable the owner of any parcel of
land to dedicate his or her land for a specific commercial agricultural use
dedication. and to have his or her land assessed its value in such use for
a period of ten years. provided:
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(1) The land dedicated for commercial activity must be used on a
continuous and regular basis for intensive agriculture, orchards.
feed crops and fast rotation forestry or pasture and slow rotation
forestry and have a minimum lot size per farm operation for that
dedicated category of commercial activity as provided for in the
administrative rules and regulations of the department; and
(2) The land is within the County zoned district of agricultural.
residential and agricultural, family agricultural, intensive agricultural.
agricultural project district, or any other County zoned district
meeting with the approval of the director of planning
(b) The owner of land under the 20-year agricultural dedication at Julv 1 2003
may continue to be assessed at fifty percent of its agricultural use value
and shall be subject to the conditions and provisions of the effective
commercial agricultural use dedication.
(c) Determining Agricultural Use Value.
(1) In determining the value of lands which are classified and used for
commercial agriculture use, consideration shall be given to rent,
productivity, nature of actual commercial agricultural use, the
advantage or disadvantage of factors such as location,
accessibility, transportation facilities, size, shape, topography.
quality of soil, water privileges, availability of water and its cost,
easements and appurtenances, and to the opinions of persons who
may be considered to have special knowledge of land values.
(2) Four general agricultural categories shall be used in determining
the value of lands which are dedicated for commercial agriculture:
(A) INTENSIVE AGRICULTURE, which includes such crops as
vegetables, ginger, taro, herbs, nurseries, foliage, cut and
potted flowers, pig4eries, dairy, poultry, feedlots,
aguaculture, honey and honeybees.
(B) ORCHARDS, which includes such crops as macadamia
nuts, guava, banana, papaya, avocado, grapes, passion
fruit, coffee, citrus, cacao, pineapple and tropical specialty
fruits.
(C) FEED CROPS AND FAST ROTATION FORESTRY, which
includes forage crops, seed crops, cane, short rotation
forestry, biomass, grasses, etc.
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(D) PASTURE AND SLOW ROTATION FORESTRY, which
includes pasture and longer rated forestry.
Lands classified as tree farm property pursuant to chapter 186,
Hawaii Revised Statutes, shall be considered for classification and
valuation as agricultural.
(4) The portion of land that is not dedicated for commercial agriculture
use shall be assessed at market value, except that the homesite
portion shall be assessed at market value of comparable homesite.
(d) Commercial Agricultural Use Dedication Petition.
(1) If any owner desires to dedicate his or her land for a commercial
agricultural use and to have his or her land taxed as its assessed
value in this use, the owner shall so petition the director of finance
and declare in the petition that his or her land can best be used for
the purpose for which he or she requests permission and that if the
petition is approved the land will be used for this purpose. The
director may require evidence of commercial agricultural use in
such form and at such times as provided for in the administrative
rules and regulations of the department.
(2) The director shall prescribe the form of the petition.
(3) The petition shall be filed with the director of finance by September 1
of any calendar year and shall be approved or disapproved by
December 15. If approved, dedication shall be effective on July 1
of the following tax year.
(4) The petition for commercial agricultural use dedication must be
signed by all owners of the land being dedicated; and
(5) A lessee of the land with a term of ten or more years remaining
from the date of the petition and who is responsible for payment of
the real property tax shall also be deemed an owner of the land
within these provisions.
(6) Action by director on petition.
(A) Upon receipt of a petition as provided above, the director
shall make a finding of fact as to whether the land in the
petition area is reasonably well suited for the intended use.
The finding shall include and be based upon the productivity
ratings of the land in those uses for which it is best suited, a
study of the ownership, size of operating unit, the present
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use of surrounding similar lands and other criteria as may be
appropriate.
(B) The director shall also make a finding of fact as to whether
the intended use is in conflict with the overall development
plan of the State and County: provided that for lands in a
zoned district other than County zoned district of agricultural,
residential and agricultural, family agricultural, intensive
agricultural or agricultural project district, the director shall
make further findings respecting the economic feasibility of
the intended use of the land.
(C) If all findings are favorable, the director shall approve the
petition and declare the land to be dedicated.
(D) In order to place prospective buyers on notice of the rollback
liability. the petitioner shall record the dedication in
accordance with the procedures of the bureau of
conveyances within ninety days of notice of approval.
~ Approval by the director of the petition to dedicate shall constitute a
forfeiture on the part of the owner of any right to change the use of his or
her land to a use other than commercial agriculture for a minimum period
of ten years subiect to cancellation or renewal as follows:
(1) At least one hundred eighty days prior to any cancellation or
termination the department of finance shall notify the owner by mail
of such cancellation or termination. The owner shall reapply for
renewal of the dedication by filing an application with the director on
or before September 1 of the last year of dedication. The renewal
petition shall in all respects be processed similarly to an original
petition Upon approval by the director of succeeding dedications,
the property shall continue to be assessed in accordance with the
provisions of the dedication.
(2) In the case of a change in zoning not as a result of a petition by any
property owner or lessee such that the owner's land is placed within
any zoned district other than a County zoned district of agricultural,
residential and agricultural family agricultural, intensive agricultural,
or aoricultural project district the dedication may be cancelled
within sixty days of the change by the owner.
(3) Upon any conveyance or any chanoe in ownership during the
period of dedication the land shall continue to be subiect to the
terms and conditions of the dedication unless a release has been
issued by the director.
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(f) Changing Between Commercial Agricultural Categories.
(1) If the owner desires to change from a specific commercial
agricultural category to another commercial agricultural category,
the owner shall so petition the director of finance and declare in the
petition that:
(A) His or her land can best be used for a commercial
agricultural activity other than that for which the petition was
originally approved; and
(B) Her or she will use his or her land for that new commercial
agricultural activity if the petition if approved.
(2) If an owner is permitted to change the use as provided in this
subsection, the owner shall be allowed up to twenty-four months
from the effective date of the petition to convert to the new
commercial agricultural category. This conversion must be
completed prior to the end of the dedication period.
(3) The petitioner shall submit progress reports of his or her efforts in
converting from one commercial agricultural category to another
commercial agricultural category to the director of finance by the
anniversary date of the petition approval and yearly, thereafter, as
long as such conversion period remains.
(4) If the owner fails to make the conversion within the specified time
limit the owner will be subject to the taxes and penalties provided
herein.
Anv other provision to the contrary notwithstanding, an approved
change in use as provided herein shall not alter the original
dedication period.
(q) Breach of dedication• deferred or rollback taxes penalties and interest.
(1) A deferred or rollback tax shall be imposed on the owner of
commercial agricultural use dedicated lands upon any of the
following:
(A) Failure of the owner to observe any restriction, condition, or
provision on the use of the land; or
(B) If the dedicated property or any portion thereof is sold by
way of a conveyance which is subject to conveyance tax
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under the terms of chapter 247, Hawaii Revised Statutes.
unless a notarized affidavit is signed by the owner stating
that the land will continue to be subject to the full
requirements of the dedication including anv penalties for
violation. The director shall record the notarized affidavit
with the bureau of conveyances.
(2) The deferred or rollback tax shall commence from the date the
failure to observe the restriction, condition or provision, or the
property's conveyance retroactive to the date the assessment was
made pursuant to subsection (F) of this section but for not more
than ten years.
(A) Failure to observe the restrictions on the use means failure
for a period of six consecutive months to use the land in the
manner requested in the petition or the overt act of changing
the use for anv period; provided that the petition by the
owner for a change in use as provided in subsection (f), and
the owner's subsequent change in use of such dedicated
lands, shall not be deemed to constitute a failure of the
owner to observe the restrictions on the use.
Any other provisions to the contrary notwithstanding, when a
portion of the dedicated land is subsequently applied to a
use other than the use set forth in the original petition, only
such portion as is withdrawn from the dedicated use and
applied to a use other than the commercial agricultural
category shall be taxed as provided by this subsection.
(3) Calculating deferred or rollback taxes.
(A) The deferred or rollback tax shall be based on the difference
in assessed value between the highest and best use and the
commercial agricultural use of the land, at the rate applicable
for the respective years.
(B) All differences in the amount of taxes that were paid and
those that would have been due from assessment in the
higher use shall be due and payable with a ten percent
ep naltV.
f C) If the owner of dedicated land breaches a condition of the
dedication before its completion, deferred or rollback taxes
shall be imposed on the subject parcel pursuant to
subsection (F) below, retroactive from the end of the tax year
in which the breach occurs.
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(D) In anv case in which deferred or rollback taxes are imposed
after successful completion of an agricultural dedication
period, the deferred or rollback taxes shall be retroactive
only to the end of the completed dedication period, and shall
not be imposed for anv time covered by a successfully
completed agricultural dedication period.
(E) In cases involving a breach of a ten-vear dedication, or a
rollback period of ten or fewer vears for breach of a twenty-
yeardedication, the rollback taxes under this section shall be
for a maximum total of ten vears, including both the
breached dedication rollback period and anv period of
nondedicated agricultural use assessment subject to
rollback. Rollback taxes for anv breach of dedication
affecting more than ten vears under a twenty-vear dedication
shall not exceed ten vears.
(F) Deferred or Rollback Tax Schedule.
(i) Breach of the restrictions on use within five vears of
the dedication shall result in a rollback to the date of
the dedication.
(ii) Breach of the restrictions on use within six vears of
the dedication shall result in a rollback of four vears
from the date of the breach.
{iii) Breach of the restrictions on use within seven vears of
the dedication shall result in a rollback of three vears
from the date of the breach.
(iv) Breach of the restrictions on use within eight or nine
vears of the dedication shall result in a rollback of two
vears from the date of the breach.
(4) The additional taxes and penalties due and owing shall be a
paramount lien upon the property as provided for by this chapter.
f h) The director may cancel a dedication without rollback taxes or penalties in
the event of anv of the following:
(1) A recognized natural disaster; or
(2) The land can no longer be used for the dedicated agricultural use; or
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(8) The death or severe disability of the principle farmer such that the
farm operation cannot continue. Corporations and partnerships are
not eligible for this death or severe disability exemption.
SECTION 6. Material to be repealed is bracketed. New material is
underscored. In printing this ordinance, the brackets, bracketed material and
underscoring need not be included.
SECTION 7. If any provision of this ordinance, or the application thereof
to any person or circumstance, is held invalid, such invalidity shall not affect
other provisions or applications of the ordinance which can be given effect
without the invalid provision or application, and to this end, the provisions of this
ordinance are declared to be severable.
SECTION 8. This ordinance shall take effect upon its approval.
INTRODUCED BY:
000NCI~ MEMBER, COUN Y OF HAWAII
Hawaii
Date of Introduction:
Date of 1st Reading:
Date of 2nd Reading:
Effective Date:
S:dept\rpt\ord Ag Def Assess & Ded 10-02 CTMpc temp.doc
kttcKElyut: ~.o~nm..118.1
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