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COUNTY OF HAWAII ~ . ~ ~ STATE OF HAWAII
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BILL NO. vs
Draft 2
ORDINANCE NO.
AN ORDINANCE AMENDING CHAPTER 19 OF THE HAWAII COUNTY CODE 1983
(1995 EDITION), REAL PROPERTY TAXES, RELATING TO VALUATION.
BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII:
SECTION 1. The purpose of this measure is to amend section 19-53, Valuations;
considerations in fixing.
SECTION 2. Chapter 19, article 7, section 19-53, of the Hawaii County Code 1983
(1995 edition), is amended to read as follows:
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.
(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
genera] 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 agricultural use
pursuant to subsection 19-53(f)(1) or (h).
(ii) Real property which is dedicated to an agricultural use or native
forest use.
(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 ]ot 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- or two-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- or two-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 maybe
considered to have special 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 pazcels of less than five acres, provided that the defen•ed 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 pazcels 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 defen•ed 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 defen•ed 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,
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
successful 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 atwenty-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 to 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 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 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
Statues, 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 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) For roroperties in the homeowner class as of January 1 2003 the assessed value of a
propertv shall not increase more than three percent (3%) per tax vear tax until the parcel
is sold or anv roortion thereof sold by way of convevance which is subject to convevance
tax under terms of chapter 247. Hawaii Revised Statutes at which time the propertv will
be assessed at market value. In addition to the 3% limit of this subsection anv
improvements undertaken on the property within the tax vear shall be assessed at market
value. All roarcels entering this class after January 1 2003 shall have the assessed value
as of January 1 of the following_year and be subject to the above provisions
SECTION 3. 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 4. 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 5. This ordinance shall take effect upon its approval.
INTRO ED BY:
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COUNCIL MEMBE COUNTY O HAWAII
Hilo, Hawaii
Date of Introduction:
Date of 1st Reading:
Date of 2nd Reading:
Effective Date:
REFEBENCF~ 3~-