HomeMy WebLinkAboutCOM 0217.004 2022-2024 Heather L. Kimball Michelle Gall bre
Council Chair&Presiding Officer ' Council District 6
Council District I `° '" Phone: 808-323-4277
Phone: 808-961-8828 michelle. alg imba(a?hawaiicountyzov
heather.kimball(a7hawalicount gov f+r'' •••° a'`
AWI`I COUNTY COUNCIL
25 Aupuni Street, Ste. 1402. :
Hilo, Hawai'i 96720
DATE: May 1, 2023
TO: Members of the Hawaii County Council 3
FROM: (leather L. Kimball, Council Chair(Council District 1)
Michelle Galimba, Council Member(Council District 6)
SUBJECT: Proposed Amendment to Bill No. 43; An Ordinance Amending Chapter 19,
Articles 1 and 8, of the Hawaii County Code 1983 (2016 Edition, as
Amended), Relating to Commercial Agricultural Use Dedication for Real
Property Taxes.
Please see below a proposed amendment to Bill No. 43 relating to commercial agricultural use
dedication for real property taxes. This proposed amendment is illustrated in Ramseyer format
with respect to the contents of Bill No. 43; material to be deleted is bracketed and stricken, and
new material is underscored.
SECTION 6 of Bill No. 43 is amended by 1) amending subsection(c), 2) changing subsection(e)
to (d) and renumbering all subsequent subsections, and 3) adding a new subsection(h);
amendments are to read as follows:
"(c) Short-term commercial agricultural use dedication petition.
(1) If any owner desires to dedicate the owner's land for a short-term commercial
agricultural use and to have the land taxed at its assessed value in this use, the owner
shall so petition the director of finance and declare in the petition that the land can
best be used for the purpose for which the owner requests permission and that if the
petition is approved the land will be used for this purpose. The director shall require
evidence of short-term 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 that shall include at least one of
the following:
(A) A farm plan;
(B) Documentation of organic certification from the U.S. Department of
Agriculture;
(C) A plan from the U.S. Department of Agriculture,Natural Resources
Conservation Service;
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(D) Documentation of food safety certification from the U.S. Department of
Agriculture; or
(E) Receipts demonstrating an investment of a minimum of[$2-,-OW] $10,000 in
farm equipment fertilizers or soil amendments for use on the subject property.
(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 short-term commercial agricultural use dedication must be signed by
all owners of the land being dedicated.
(5) 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 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] eg neral pian and any applicable community
development plan of the County; provided that, with respect to lands in County
zoning districts other than 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.
[(e)](d� 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 the land to a use other than short-term
commercial agriculture for a minimum period of three years,unless otherwise provided by
this chapter, 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 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 agricultural project district, the dedication may be cancelled
within sixty days of the change by the owner.
(3) Upon any conveyance or any change in ownership during the period of dedication,
the land shall no longer continue to be subject to the terms and conditions of the
dedication.
[(O](e) Changing between commercial agricultural categories.
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(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) The owner's land can best be used for a commercial agricultural activity other
than that for which the petition was originally approved; and
(B) The owner will use the land for that new commercial agricultural activity if the
petition is approved.
(2) If an owner is permitted to change the use as provided in this subsection, the owner
shall be allowed up to twelve 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 the petitioner's 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.
(5) Any other provision to the contrary notwithstanding, an approved change in use as
provided herein shall not alter the original dedication period.
[{g}] f Breach of dedication; deferred or rollback taxes; penalties and interest.
(1) A deferred or rollback tax shall be imposed on the owner of short-term commercial
agricultural use dedicated lands upon failure of the owner to observe any restriction,
condition, or provision on the use of the land.
(2) The deferred or rollback tax shall commence from the date the failure to observe the
restriction, condition, or provision, retroactive to the date the assessment was made
but for not more than three 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 any 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.
(B) 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 between the
assessed market value at highest and best use and the short-term 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 penalty.
(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,
retroactive from the end of the tax year in which the breach occurs.
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(D) 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.
(E) In cases involving a breach of a three-year dedication, rollback taxes shall be
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assessed to the date of the dedication.
(4) The additional taxes and penalties due and owing shall be a paramount lien upon the
property as provided for by this chapter.
[(hfl] gA The director may cancel a dedication without rollback taxes or penalties in the event of
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any of the following:
(1) A recognized natural disaster beyond the farmer's control;
(2) The land can no longer be used for the dedicated agricultural use; or
(3) The death or severe disability of the principal farmer such that the farm operation
cannot continue. Corporations and partnerships are not eligible for this death or
severe disability exemption.
O Applications for the short-term commercial agricultural use dedication shall be accepted
beginning_September 2, 2024, and approved applications under this dedication shall take
effect no sooner than the 2026 tax year.
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Due to the limited scope of this amendment, a copy of the revised draft of this bili that would
result if this proposed amendment is adopted is not attached.
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