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Home My WebLink AboutBIL 044 Draft 02 2022-2024 AN ORDINANCE AMENDING CHAPTER 19, ARTICLES 1 AND 7, OF THE HAWAI‘I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO COMMUNITY FOOD SUSTAINABILITY USE ASSESSMENTS AND NONDEDICATED AGRICULTURE USE ASSESSMENTS. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAI‘I: SECTION 1. Purpose. The Real Property Tax Review Working Group and Agricultural Committee report dated September 20, 2019 and the 2021 Annual Report from the Real Property Tax Board of Review, both recommended revision of the nondedicated agricultural use program provided for in chapter 19, section 19-57, of the Hawai‘i County Code. The purpose of this amendment is to act on the recommendations of these reports by restructuring and renaming the nondedicated agricultural use assessment to enable the County to attain the statewide goal of doubling our food supply by 2030. This amendment will incentivize property owners to contribute to food sustainability in Hawai‘i County by affording them with tax benefits, and reduce abuse of existing nondedicated agricultural use programs. SECTION 2. Chapter 19, article 1, section 19-2 of the Hawai‘i County Code 1983 (2016 Edition, as amended), is amended by amending the definition of “Nondedicated agricultural use assessment” to read as follows: “Nondedicated 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: (1) Intensive agriculture; (2) Orchards; (3) Feed crops and fast rotation forestry; and/or (4) Pasture and slow rotation forestry. This definition shall be repealed on January 1, 2028.” SECTION 3. Chapter 19, article 1, section 19-2 of the Hawai‘i County Code 1983 (2016 Edition, as amended), is amended by adding a new definition to be appropriately inserted and to read as follows: ““Community food sustainability use” 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 to provide food to the community, including: (1) Intensive agriculture; (2) Orchards; or (3) Diversified agriculture.” SECTION 4. Chapter 19, article 7, section 19-57 of the Hawai‘i County Code 1983 (2016 Edition, as amended), is amended by amending subsection (c) to read as follows: “(c) Application; filings; assessment effective; renewal. The director shall prescribe the form of the nondedicated agricultural use application. The application shall be filed with the director by December 31 of any calendar year[.] with no new applications accepted after September 1, 2024. The application for a nondedicated agricultural use assessment must be signed by all owners of the land being committed. 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 year. Renewal of the application shall be in such form and at such time as required by the director.” SECTION 5. Chapter 19, article 7, section 19-57 of the Hawai‘i County Code 1983 (2016 Edition, as amended), is amended by adding a new subsection (e) to be appropriately inserted and to read as follows: “(e) Sunset of nondedicated agricultural use assessment. This section shall be repealed on January 1, 2028. Consequently: (1) No new applications for nondedicated agricultural use assessment will be accepted by the director after September 1, 2024; (2) Owners of land currently assessed in the nondedicated agricultural use category shall reapply for an alternative use assessment or dedication by September 1, 2025. If no application is received by the director by September 1, 2025, the property shall not be assessed at the nondedicated agricultural use value established in subsection (a)(2) of this section; (3) The director shall notify all current owners of land currently assessed in the nondedicated agricultural use category in writing of the intent to sunset the nondedicated agricultural use assessment and the deadline to apply for another program; (4) On or before September 1, 2027, the director shall review all reapplications; (5) Owners of land who have applied for a community food sustainability use assessment or a short- or long-term commercial agricultural use dedication in accordance with section 19-57(e)(2) shall have their property assessed at the nondedicated agricultural use assessment rate until the 2028 tax year, unless their applications have been denied or they have applied for a different tax program; and (6) Subsection 19-57(d) shall continue to apply to owners of land who reapply under this sunset provision.” SECTION 6. Chapter 19, article 7, of the Hawai‘i County Code 1983 (2016 Edition, as amended), is amended by adding a new section to be appropriately designated and to read as follows: “Section. Community food sustainability use assessment. (a) Lands classified and used for farming to produce food crops, that are not dedicated to commercial agricultural use, may be assessed for real property tax purposes as established in subsection (a)(2) of this section and shall be subject to the following: (1) The land in community food sustainability use must be used on a continuous and regular basis to produce food for local consumption 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 to specific community food production shall be assessed at 30% of the fair market value; and (3) A farm dwelling site shall be assessed based on the proportional market value of the total property. (b) All portions of land that are not committed or used for community food sustainability shall be assessed based on the proportional market value of the total property. (c) Application; filings; assessment effective; renewal. (1) The director shall prescribe the form of the community food sustainability use application, which shall be accepted beginning September 2, 2024. (2) The application for a community food sustainability use assessment must be signed by all owners of the land being assessed. (3) The application for a community food sustainability use assessment 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; (D) Documentation of food safety certification from the U.S. Department of Agriculture; or (E) Receipts demonstrating an investment of a minimum of $10,000 in farm equipment, fertilizers, or soil amendments for use on the subject property. (4) If the application is approved, renewal of the application for the assessment, based upon the use requested, shall be required every five years from the initial approval date or earlier, at the discretion of the director, provided that: (A) The documentation provided under subsection (c)(3) encompasses at least five years and remains in effect; and (B) Documentation of annual sales or donations of food totaling a minimum of $1,000 are provided to the director at the time of renewal. Sales or donations must be generated from the assessed property. Annual sales shall be documented through excise tax receipts. Donations of food must be to a nonprofit 501(c)(3) organization. (d) Deferred or rollback tax. (1) A deferred or rollback tax shall be imposed on the owner of the agricultural land upon any of the following events: (A) The owner fails to observe any restriction, condition, or provision on the use of the land; (B) The property is converted to a County zoned district other than agricultural, residential and agricultural, family agricultural, intensive agricultural, agricultural project district as a result of a petition by the owner or lessee; (C) The property is subdivided into parcels of less than five acres in size; or (D) A condominium property regime is declared for the property resulting in condominium units with areas 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 year. (3) The amount of deferred taxes shall be based on the difference between the assessed market value at highest and best use and the assessed agricultural use value of the land at the tax rate applicable for the respective years, with a ten percent penalty.” SECTION 7. Material to be repealed is bracketed and stricken. New material is underscored. In printing this ordinance, the brackets, bracketed and stricken material, and underscoring need not be included. SECTION 8. Severability. If any provision of this ordinance, or the application thereof to any taxpayer or circumstance, is held invalid, the invalidity does 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 severable. SECTION 9. This ordinance shall take effect July 1, 2023. INTRODUCED BY: _______________________________________ COUNCIL MEMBER, COUNTY OF HAWAI‘I _______________________________________ COUNCIL MEMBER, COUNTY OF HAWAI‘I _______________, Hawai‘i Date of Introduction: Date of 1st Reading: Date of 2nd Reading: Effective Date: