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Home My WebLink AboutBIL 173 Draft 02 2024-2026 Hawai`i County Council-48 September 2,2026 Bill 173: AMENDS CHAPTER 19 OF THE HAWAI`I COUNTY CODE 1983 (2016 (Draft 2) EDITION, AS AMENDED), RELATING TO THE ESTABLISHMENT OF A BED AND BREAKFAST HOME CLASSIFICATION FOR REAL PROPERTY TAXES Establishes a new"bed and breakfast home"property tax class for any property that is a vacation rental and the owner's principal residence; establishes a temporary tax amnesty period for properties that have existing vacation rentals in violation of the restrictions of the homeowner class to either cease the rental activity or to properly register the rental activity without being penalized. Reference: Comm. 960.3 Intr. by: Council Member Kimball Negative: FC-167 (Due to a vote of 4-ayes, 4-noes, 1-absent) FAILED: Ayes: Council Members Galimba, Kagiwada, and Kimball—3. Noes: Council Members Hustace, Kaneali`i-Kleinfelder, Kierkiewicz, Onishi, Villegas, and Chair Inaba—6. Absent: None. Excused: None. ; and Comm. 960.5: From Council Member Heather L. Kimball, dated August 19, 2026, transmitting information regarding Bill 173, Draft 2. ; and Comm. 960.6: From Council Member Heather L. Kimball, dated August 20, 2026, transmitting proposed amendments to Bill 173, Draft 2. Bill 176: AMENDS CHAPTER 16, ARTICLE 1, OF THE HAWAI`I COUNTY CODE (Draft 2) 1983 (2016 EDITION, AS AMENDED), RELATING TO THE GENERAL PLAN Establishes amendment procedures for the General Plan, including a comprehensive review every ten years and interim amendments; describes powers and duties of the planning director and planning commissions. Reference: Comm. 968.6 Intr. by: Council Members Inaba and Kierkiewicz Approve: PCPLUED-14 (Vote on Bill 176, Draft 2, is on the next page.) Page 24 „ ,,,,,,,,,, COUNTY OF HAWAI`I STATE OF HAWAII 4(4 BILL NO. 173 (DRAFT 2) ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 19 OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION,AS AMENDED),RELATING TO THE ESTABLISHMENT OF A BED AND BREAKFAST HOME CLASSIFICATION FOR REAL PROPERTY TAXES. 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 (e)to read as follows: "(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) Residential; (B) Affordable rental housing; (C) Apartment; (D) Hotel and resort; (E) Commercial; (F) Industrial; (G) Agricultural or native forests; (H) Conservation; (I) Homeowner; [ ] (J) Long-term rental[:]; and, (K) Bed and breakfast home. (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,Hawai`i 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 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 used for commercial or income-producing purposes, except as exempted under section 19-71(a)or(b). (ii) Real property which is used for residential rental purposes for a term less than six months, except as exempted under section 19- 71(a) and affordable rental housing. (iii) Real property which is used for any purpose other than the owner's principal residence,with the exception of any property valued according to its agricultural use pursuant to sections 19-57, 19- 57.1, 19-59, 19-60, or 19-61. (B) The affordable rental housing class is exclusively reserved for properties which meet the eligible requirements for this class and have the annual required application timely filed.Real property which is used for commercial or income-producing purposes shall not qualify as "affordable rental housing," except: (i) Real property with uses legally permitted as a home occupation in accordance with the zoning code; or (ii) Real property with agricultural use pursuant to sections 19-57, 19- 57.1, 19-59, 19-60, or 19-61. (C) The bed and breakfast home class is exclusively reserved for properties that are used as the owner's principal residence and are registered as a TVR under chapter 6,provided that the director has granted the owner a home exemption in accordance with sections 19-71 to 19-72. (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." SECTION 2. Chapter 19, article 7, of the Hawai`i County Code 1983 (2016 Edition, as amended) is amended by adding a section to be appropriately inserted and to read as follows: "Section 19- . Tax amnesty for bed and breakfast homes. (a) The director shall waive the rollback taxes,penalties, and interest that would have been imposed on the basis of a violation of section 19-53(e)(2)(A)(ii);provided that,no later than December 31,2026,the owner: (1) Submits a notarized affidavit to the director stating that the rental activity in violation of section 19-53(e)(2)(A)(ii)will cease before December 31,2026, and the rental activity ceases and indicated in the affidavit; or (2) Registers the rental activity in compliance with chapter 6. (b) This section does not apply to any owner who, prior to the effective date of this ordinance,was subject to property tax adjustments, rollback taxes, penalties, or interest on the basis of a violation of section 19-53(e)(2)(A)(ii)." SECTION 3. 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. 2 SECTION 4. Severability. If any provision of this ordinance, or the application hereof to any taxpayer or circumstance, is held invalid,the invalidity does not affect other provisions or applications of this ordinance that can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are severable. SECTION 5. This ordinance shall take effect on the effective date of Ordinance No. 25-50, as amended, and SECTION 2 hereof shall be repealed on June 30, 2028. INTRODUCED BY: '6-etv—r /14,1I'V 07. (: ---'id` e/ HEATHER KIMBALL Council Member ,Hawai`i Date of Introduction: Date of 1st Reading: Date of 2nd Reading: Effective Date: REFERENCE Comm. 960.3 E LEllHI I O liI I I IID III 3 LRB 26-045 D1