HomeMy WebLinkAboutBIL 027 Draft 01 2020-2022
AN ORDINANCE AMENDING CHAPTER 19, ARTICLE 7, SECTION 19-53 AND REPEALING CHAPTER 19, ARTICLE 7, SECTION 19-58.1 AND SECTION 19-58.2 OF THE HAWAI‘I COUNTY CODE 1983 (2016 EDITION, AS
AMENDED), RELATING TO THE NONSPECULATIVE RESIDENTIAL USE REAL PROPERTY TAX DEDICATION.
BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAI‘I:
SECTION 1. Chapter 19, article 7, section 19-53, of the Hawai‘i County Code 1983 (2016 Edition, as amended), is amended by amending subsection (g) to read as follows:
“(g) Limitation on homeowner assessment.
[(1)] For properties in the homeowner class as of January 1, 2004 [and not dedicated to nonspeculative residential use], the assessed value of the property shall not increase more than
three percent per tax year until the parcel is sold or any portion thereof sold by way of conveyance which is subject to conveyance tax under terms of chapter 247, Hawai‘i Revised Statutes,
at which time the property will be assessed at market value. In addition to the three percent limit of this subsection any improvements undertaken on the property within the tax year
shall be assessed at market value. All parcels entering this class after January 1, 2004 shall have the assessed value as of January 1 of the following year and be subject to the above
provisions.
[(2) Those properties dedicated to nonspeculative residential use as of January 1, 2004 may terminate the dedication without imposition of retroactive taxes upon filing and approval
of petition for such termination with the director of finance by September 1, 2009. Upon termination of the dedication these properties shall be assessed at the market value and subject
to section 19-53(g)(1).
(3) Those properties dedicated to nonspeculative residential use as of January 1, 2004 may continue the dedication and upon termination of the dedication period the parcel shall be assessed
at the market value and the year following the termination be subject to section 19-53(g)(1) unless the dedication is renewed as provided in section 19-58.1.
(4) Those properties dedicated to nonspeculative residential use as of the effective date of this ordinance may terminate the dedication without the imposition of retroactive taxes upon
filing and approval of petition for termination of dedication with the director of finance by September
1, 2009.or properties with an effective date of dedication prior to July 1, 2005, or renewals after July 1, 2005, the assessed value shall be the market value at January 1, 2004 and
increased compounded annually by three percent; and for properties with an effective date of dedication after July 1, 2005, the assessed value shall be the market value at the effective
date of dedication and increased compounded annually by three percent as set in the table below rounded to the nearest hundred dollars of assessed value:
Effective Date of Dedication
Market Value at
Assessed Value Multiplier
Prior to July 1, 2005
January 1, 2004
1.1941
July 1, 2005
January 1, 2005
1.1593
July 1, 2006
January 1, 2006
1.1255
July 1, 2007
January 1, 2007
1.0927
July 1, 2008
January 1, 2008
1.0609
(5) Paragraphs 19-53(g)(2), (3), (4) and (5) shall be repealed upon the final participant in the nonspeculative residential use program being converted as provided above.]”
SECTION 2. Chapter 19, article 7, section 19-58.1, of the Hawai‘i County Code 1983 (2016 Edition, as amended), is repealed:
“[Section 19-58.1. Certain lands dedicated to nonspeculative residential use. Only renewal petitions will be accepted.
(a) The term “owner” as used in this section shall mean the fee owner or the lessee of real property with an unexpired lease term of not less than five years from the effective date
of the dedication.
(b) Any owner of property who qualifies under sections 19-71 and 19-72 for home exemption and uses the property exclusively for residential use may dedicate said property in its entirety
to nonspeculative residential use and have that parcel assessed in the manner provided by section 19-58.2, except that a husband and wife, although living separate and apart, shall
be entitled to dedicate only one parcel to the nonspeculative residential use.
Exclusive residential use as used in this section shall not permit the owner to conduct any commercial activities on the property, except as otherwise permitted in sections 19-71(a)
and (b). Those owners who have dedicated their property to agricultural use or receive the benefit of the agricultural use or native forest dedication shall not be eligible for this
nonspeculative residential use dedication.
(c) In the case of a renewal which immediately follows an expiring term, the assessment base for the new five- or ten-year dedication term shall be the
dedicated value on the expiration date plus fifty percent of the amount of increase between the dedicated value and the market valuation as of January 1, preceding the termination of
the dedication term.
(d) If, during any period of dedication, any breach of the dedication requirements should occur, the special nonspeculative residential use assessment privilege shall be canceled and
retroactive taxes shall be imposed. Breach of the dedication shall include termination of the dedication after September 1, 2009 or other unauthorized termination, the failure to maintain
the home exemption status of the property, violating the exclusive residential use provision, dedicating the property to agricultural use or receiving the benefit of the agricultural
use assessment, subdivision of the property into separate parcels, or the declaration of a condominium property regime, or the sale of the dedicated property or any portion thereof
sold by way of a conveyance which is subject to conveyance tax under the terms of chapter 247, Hawai‘i Revised Statutes. Retroactive taxes due and owing as a result of the breach shall
be a paramount lien on the property.
(1) Provided, that the nonspeculative residential use dedication shall not be breached if the dedicated property meets the criteria as listed below:
The following also includes provisions that are not subject to the conveyance tax under the terms of chapter 247, Hawai‘i Revised Statutes, and are included for further clarification.
(A) Transferred to the owner’s heirs by testacy or intestacy,
(B) Jointly owned by spouses and upon the death of one spouse ownership is transferred to the surviving spouse,
(C) Transferred to a spouse or former spouse in connection with a property settlement agreement or decree of dissolution of a marriage or legal separation,
(D) Transferred to a trustee for the beneficial use of a spouse, or the surviving spouse of a deceased transferor, or by a trustee of such a trust to the spouse of the trustor,
(E) Subject to a title change between spouses and said change does not result in a loss of the home exemption status,
(F) And the heirs, surviving spouse, divorced spouse, or trustee, within sixty days after receiving title to the property, petitions the director, in writing, to continue the dedication
and the property continues to qualify for the home exemption as defined in sections 19-71 and 19-72, or
(G) The dedication shall not be cancelled if the lessee purchases the leased fee interest from the lessor.
(2) Provided further that, except as provided herein, retroactive taxes shall not be assessed when:
(A) A person receives title to property dedicated to nonspeculative residential use by ways of testacy or intestacy and does not petition the director to continue the dedication as provided
in section 19 58.1(d)(1)(A).