HomeMy WebLinkAboutCOM 0118.028 2002-2004 ~)'Z 1 "Od
SUMMARY OF CHANGES
Bill d9 (2004), CDI, FD2 versus CD1, FDl ~3
I . Returns the assessment method from crop production value to fair market value in seejun
8-7.1.
2. Amends section 8-7.1 to add a category for "vacant agricultural" lands and a definitiod-
for "vacant agricultural" lands.
3. Replaces the assessment of agricultural lands in section 8-7.3 to one based on dedicatron
for 1, 5, and 10 years and provides that lands substantially and continuously used for
raising and producing agricultural products be assessed at 5, 3, and 1 percent of fair
market value, respectively.
4. Adds a definition of "unusable land" as land determined to be unsuitable for dedicated
agricultural use.
5. Provides that if the assessed valuation of dedicated agricultural land at 5, 3, and 1 percent
exceeds the production value per acre for certain crops as determined by the director
annually, the assessed value at 3 percent shall be adjusted as to not to exceed the
production value per acre for such crops, while the assessed values at 5 and 1 percent are
also adjusted proportionally.
6. Provides that lands dedicated for pasture use for a period of 1, 5, and 10 years be assessed
a[ 1 percent of market value.
7. Permits the dedication of vacant agricultural land for 10 years to be assessed at 50
percent of fair market value.
8. Provides that the petition filed for dedication must have the owner's authorization, a
declaration that during the dedication period, the land shall be used for the specific
agricultural use or maintained as vacant agricultural land, and requires the submittal of an
agricultural plan.
9. Provides that lands dedicated as vacant agricultural land may have the land changed to a
specific agricultural use without a rollback tax or penalty.
10. Retains the provision for director review and approval of the petition but removes the
allocation of land to specified categories of crop.
1 I . Provides that the approval of the petition constitutes a forfeiture by the owner of the right
to change the use for the duration of the dedication period, and provides that if the
dedicated land undergoes a change in classiftcation not initiated by the owner, the
dedication continues unless the owner files a written notice of cancellation with the
director within 60 days of the change. ' • Zg
Comm. No.
Ref. To: L
Ref. Uate
12. Establishes a rollback tax and penalty under certain conditions, and that the rollback tax
shall be the difference between the taxes owed at 100 percent of the land assessed at fair
market value and the taxes actually imposed on the ]and, and a 10 percent penalty for
each year of the rollback. The FD2 sets forth the formula for calculating the rollback
taxes for 5 and 10 year dedications.
13. Provides that if certain specified events beyond the control of the owner occur, no
rollback tax or penalty will be imposed.
14. Established a grace period not exceeding 2 years for lands dedication for specific
agricultural use under certain circumstances.
15. Amends section 8-10.27 relating to the ordinance reference to the exemption for public
service to reflect the revised reference due to the addition of the definition of vacant
agricultural lands.
16. Adds a new section that exempts certain qualifying agricultural improvements for 7 years
from taxation.
17. Adds an uncodified section [o provide that dedications of agricultural land which
occurred before the effective date of Ordinance 02-39 (Bill 10) shall be subject to the
ordinance provisions for agricultural dedication as it existed when the petition was filed,
including the rollback tax and penalty.
l 8. Adds an uncodified section which permits the filing of a petition under Bill 49, CD 1,
FD2 by November 1, 2004, and approved or disapproved by December 15, 2004, and
permits the director, for tax year 2005-2006 only, to establish the average agricultural
production value per acre using data from the State Department of Agriculture "Statistics
of Hawaii Agriculture 2002".
19. Specifies that the ordinance shall apply to tax years beginning July 1, 2005 and thereafter.
2
q CITY COUNCIL ORDINANCE
~ I ~ _ 44'I
CITY AND COUNTY OF HONOLULU
HONOLULU, HAWAII BILL 49 (20041 CD1
_ FD__ 2
DDC 9/21/04
A BILL FOR AN ORDINANCE
RELATING TO REAL PROPERTY TAXATION.
BE IT ORDAINED by the People of the City and County of Honolulu:
SECTION 1. Purpose. The purpose of this ordinance is to amend certain
provisions of the Revised Ordinances of Honolulu 1990, as amended, relating to real
property taxation.
SECTION 2. Section 8-7.1, Revised Ordinances of Honolulu 1990, as amended,
("Valuation-Considerations in fixing"), is amended to read as follows:
"Sec. 8-7.1 Valuation-Considerations in fixing.
(a) The director of budget and fiscal services shall cause the fair 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] real property for taxation purposes, so selected
and applied to obtain, as far as possible, uniform and equalized assessments
throughout the county.
(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) (1) Land shall be classified, upon consideration of its highest and best use,
into the following general classes:
(A) Improved residential;
(B) Unimproved residential;
(C) Apartment;
(D) Hotel and resort;
(E) Commercial;
(F) Industrial;
OCS00672.B04 1
CITY COUNCIL ORDINANCE)
i~ Y~I • CITY AND COUNTY OF HONOLULU
HoNOw~u, Hnwnu BILL 49 2004 , CD1, FD2
DDC 9/21 /04
A BILL FOR AN ORDINANCE
(G) Agricultural;
(H) Preservation; [and]
(I) Public service and
L~1- Vacant agricultural
(2) In assigning land to one of the general classes, the director shall give
major consideration to the districting established by the city in its general
plan and zoning ordinance, and such other factors which influence highest
and best use.
Notwithstanding the city's zoning district classification, the director shall
assign to the agricultural class any land classified as tree farm property
under HRS Chapter 186.
(3) When real property is subdivided into condominium units, each unit and its
appertaining common interest:
(A) Shall be classified upon consideration of the unit's actual use into
one of the general classes in the same manner as land; and
(B) Shall be deemed a parcel and assessed separately from other
units.
(4) "Improved residential" means land which is classified as residential by the
director upon consideration of its highest and best use[, and is property]
which fulfills the provisions of at least one of the following paragraphs:
(A) Land which has been subdivided prior to any assessment year as a
lot for single- ortwo-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 city; or
(B) Land which is in actual single- ortwo-family residential use at a
density of at least asingle- or a two-family residential building per
acre; or
C i T Y COUNCIL ORDINANCE
ti ~
~ CITY AND COUNTY OF HONOLULU
~ r+oNOw~u, Hnwau BILL 49 _ j2004~i CD1, FD2
DDC 9/21/04
A BILL FOR AN ORDINANCE
(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" means all residential class lands not classified as
"improved residential."
{6) "Vacant agricultural" means land which would otherwise be classified
agriculture by the director upon major consideration of the districting
established by the city in its general plan and zoning ordinance and of
such other factors which influence highest and best use but which land: ji)
has no residential buildings• and (ii) is not in agricultural production.
[(6)] L1 Notwithstanding any provision contained in this subsection, all lands
actually used by a public service company in its public service business
shall be classified public service. For purposes of this subsection, a public
service company is defined as a public utility, except airlines, motor
carriers, common carriers by water, and contract carriers, where:
(A) "Public utility' means and includes every person who may own,
control, operate, or manage as owner, lessee, trustee, receiver, or
otherwise, whether under a franchise, charter, license, articles of
association, or otherwise, any plant or equipment, or any part
thereof, directly or indirectly for public use, for the transportation of
passengers or freight, or the conveyance or transmission of
telecommunications messages, or the furnishing of facilities for the
transmission of intelligence by electricity by land or water or air
within the state, or between points within the state, or for the
production, conveyance, transmission, delivery, or furnishing of
light, power, heat, cold, water, gas, or oil, or for the storage or
warehousing of goods, or the disposal of sewage; provided that the
term:
(i) Shall include any person insofar as that person owns or
operates a private sewer company or sewer facility;
(ii) Shall include telecommunications carrier or
telecommunications common carrier;
(iii) Shall not include any person insofar as that person owns or
operates an aerial transportation enterprise;
3
_ CITY COUNCIL ORDINANCE
• C CITY AND COUNTY OF HONOLULU
<'~~.,;,.<?~ HONOLULU, HAWAII BILL 49_~2004~ C_D1, _FD2
DDC 9/21/04
A BILL FOR AN ORDINANCE
(iv) Shall not include persons owning or operating taxicabs, as
defined in this subsection;
(v) Shall not include common carriers transporting only freight
on the public highways, unless operating within localities or
along routes or between points that the public utilities
commission of the State of Hawaii finds to be inadequately
serviced without regulation under this chapter;
(vi) Shall not include persons engaged in the business of
warehousing or storage unless the public utilities
commission of the State of Hawaii finds that regulation
thereof is necessary in the public interest;
(vii) Shall not include:
(aa) The business of any carrier by water to the extent that
the carrier enters into private contracts for towage,
salvage, hauling, or carriage between points within
the state and the carriage is not pursuant to either an
established schedule or an undertaking to perform
carriage services on behalf of the public generally;
and
(bb) The business of any carrier by water, substantially
engaged in interstate or foreign commerce,
transporting passengers on luxury cruises between
points within the state or on luxury round-trip cruises
returning to the point of departure;
(viii) Shall not include any person who:
(aa) Controls, operates, or manages plants or facilities for
the production, transmission, or furnishing of power
primarily or entirely from nonfossil fuel sources; and
(bb) Provides, sells, or transmits all of that power, except
such power as is used in its own internal operations,
directly to a public utility for transmission to the public;
A
~ CITY COUNCIL ORDINANCE
'~.,efe,..j ~ CITV AND COUNTY OF HONOLULU BILL 49 ~2004~ CD1 FD2
HONOLULU, HAWAII
DDC 9/21/04
A BILL FOR AN ORDINANCE
(ix) Shall not include a telecommunications provider only to the
extent determined by the public utilities commission of the
State of Hawaii, pursuant to applicable state law.
(x) Shall not include any person who controls, operates, or
manages plants or facilities developed pursuant to
applicable state law for conveying, distributing, and
transmitting water for irrigation and such other purposes that
shall be held for public use and purpose; and
(xi) Shall not include any person who owns, controls, operates,
or manages plants or facilities for the reclamation of
wastewater; provided that:
(aa) The services of the facility shall be provided pursuant
to a service contract between the person and a state
or county agency and at least 10 percent of the
wastewater processed is used directly by the state or
county which has entered into the service contract;
(bb) The primary function of the facility shall be the
processing of secondary treated wastewater that has
been produced by a municipal wastewater treatment
facility that is owned by a state or county agency;
(cc) The facility shall not make sales of water to residential
customers;
(dd) The facility may distribute and sell recycled or
reclaimed water to entities not covered by a state or
county service contract; provided that, in the absence
of regulatory oversight and direct competition, the
distribution and sale of recycled or reclaimed water
shall be voluntary and its pricing fair and reasonable.
For purposes of this sub-paragraph xi, "recycled
water" and "reclaimed water" mean treated
wastewater that by design is intended or used for a
beneficial purpose; and
(ee) The facility shall not be engaged, either directly or
indirectly, in the processing of food wastes.
5
`~~~0. CITY COUNCIL ORDINANCE
( ~ CITY AND COUNTY OF HONOLULU
HONOLULU, HAWAII BILL 49_ L2004~,_CD1, FD2
DDC 9/21/04
A BILL FOR AN ORDINANCE
(B) "Motor carrier" means a common carrier or contract carrier
transporting freight or other property on the public highways, other
than a public utility or taxicab.
(C) "Contract carrier" means a person other than a public utility or
taxicab which, under contracts or agreements, engages in the
transportation of persons or property for compensation, by land,
water, or air.
(D) "Carrier" means a person who engages in transportation, and does
not include a person such as a freight forwarder or tour packager
who provides transportation by contracting with others, except to
the extent that such person oneself engages in transportation.
(E) "Taxicab" means and includes:
(i) Any motor vehicle used in the movement of passengers on
the public highways under the following circumstances,
namely, the passenger hires the vehicle on call or at a fixed
stand, with or without baggage for transportation, and
controls the vehicle to the passenger's destination; and
(ii) Any motor vehicle having seating accommodations for eight
or less passengers used in the movement of passengers on
the public highways between a terminal, i.e., a fixed stand, in
the city of Honolulu, and a terminal in a geographical district
outside the limits of the city of Honolulu, and vice versa,
without picking up passengers other than at the terminals or
fixed stands; provided that passengers may be unloaded at
any point between terminals; and provided further that this
definition relating to motor vehicles operating between
terminals shall pertain only to those motor vehicles whose
operators or owners were duly licensed under any applicable
provision of law or ordinance and doing business between
such terminals on January 1, 1957.
(F) "Telecommunications carrier' or "telecommunications common
carrier" means any person that owns, operates, manages, or
controls any facility used to furnish telecommunications services for
profit to the public, or to classes of users as to be effectively
available to the public, engaged in the provision of services, such
as voice, data, image, graphics, and video services, that make use
r_
°~~~•°~'ti CITY COUNCIL ORDINANCE
I ~
~~f " • CITY AND COUNTY OF HONOLULU
_ HONOLULU, HAWAII BILL 49 (20U4~_CD1, FD_
_2
DDC 9/21/04
A BILL FOR AN ORDINANCE
of all or part of their transmission facilities, switches, broadcast
equipment, signalling, or control devices.
(G) "Telecommunications service" or "telecommunications" means the
offering of transmission between or among points specified by a
user, of information of the user's choosing, including voice, data,
image, graphics, and video without change in the form or content of
the information, as sent and received, by means of electromagnetic
transmission, or other similarly capable means of transmission, with
or without benefit of any closed transmission medium, and does not
include cable service as defined under applicable state law.
(d) Whenever land has been divided into lots or parcels as provided by law, each
such lot or parcel shall be separately assessed.
(e) When a parcel of land which has been classified as agricultural is improved with
a single-family dwelling and has qualified for a home exemption for the tax year,
that portion of the parcel which is used for residential purposes shall be classified
as improved residential. This classification shall:
(1) Apply only to that portion used for residential purposes;
(2) Not exceed 5,000 square feet of land and the buildings and improvements
on that land; and
(3) Remain in effect only so long as the property qualifies for a home
exemption.
(f) When a parcel of land which has been classified as preservation is improved with
a single-family dwelling and has qualified for a home exemption for the tax year,
that portion of the parcel which is used for residential purposes shall be classified
as improved residential. This classification shall:
(1) Apply only to that portion used for residential purposes;
(2) Not exceed 5,000 square feet of land and the buildings and improvements
on that land; and
(3) Remain in effect only so long as the property qualifies for a home
exemption.
7
``~I~'`°. CITY COUNCIL ORDINANCE- _
I " CITY AND COUNTY OF HONOLULU BILL Q9 2004 CD1 FD2
HONOLULU, HAWAII -i--- -
DDC 9/21/04
A BILL FOR AN ORDINANCE
(g) (1) 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 a higher assessable valuation of said buildings;
provided, however, that any increase in value resulting from any additions,
alterations, modifications or other new construction, improvement 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 HRS Chapter 53,
shall not increase the assessable valuation of any building for a period of
seven years from the date of certification as hereinafter provided.
(2) It is further provided that the owner-occupant shall file with the director, in
the manner and place which the director may designate, a statement of
the details of the improvements certified in the following manner:
(A) In the case of additions, alterations, modifications or other new
construction, improvement 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 governmental 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 development, rehabilitation or
conservation act provision; or
(B) 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 (i) the building was inspected by them
and found to be substandard when the owner-occupant made the
claim, and (ii) the maintenance or repairs to the buildings were
made and satisfactorily comply with the particular code provision.
(h) Notwithstanding the provisions of subsection (c)(2), properties operating as
transient vacation units in accordance with Section 21-4.110-1, and which have a
valid nonconforming use certificate, shall be classified based on their underlying
zoning."
.:.„',gig CITY COUNCIL ORDINANCE _
I
I CITY AND COUNTY OF HONOLULU
HoNOLULU,HAwA,u BILL 49 (2004), CD1,_FD2_
DDC 9/21/04
A BILL FOR AN ORDINANCE
SECTION 3. Section 8-7.3, Revised Ordinances of Honolulu 1990, as amended,
("Dedication of lands for agricultural use"), is repealed.
SECTION 4. Chapter 8, Revised Ordinances of Honolulu 1990, as amended, is
amended by adding a new Section 8-7.3 which shall read as follows
"Sec. 8-7.3 Dedication of Lands for Agricultural Use.
l~ As used in this section_
"Agricultural use of land" means the active use of the land for the
production of agricultural products.
"Agricultural products' include such products as floricultural horticultural
viticultural, aguacultural, forestry nut coffee dairy livestock poultry bee
animal, tree farm, animals raised by grazing and pasturing and any other farm
agronomic, or plantation products
"Owner" or "property owner" mean the fee simple owner of the real
property Provided that for government owned real property "owner" or "property
owner" mean a lessee of the land where (i) the lease allows the specific
~ricultural use and (ii) the lease term extends through the period of the
dedication.
"Maintain as agricultural land" means that the subject land throughout th_e
subject time period is not at the initiation of the owner or with the authorization of
the owner subject to (i) a change in the state land use classification from
~riculture to urban or rural district (ii) a change in the county zoning from
agriculture, preservation or country district or (iii) a subdivision of the land into
parcels of five acres or less.
"Substantial and continuous agricultural use' means no less than 75
percent of the area of the subject land but excluding the area of unusable land
is rn active continuous and revenue-generating agricultural use throughout the
subject time period. For lands dedicated for a period of five years or 10 years
substantial and continuous agricultural use shall include necessary and
customary fallowing periods
"Tree farm property" and "tree farm" mean land classified as tree fa_r_m_
rp operty under Hawaii Revised Statutes Chapter 186
9
°'°°`,'`q, CITY COUNCIL ORDINANCE
I • CITY AND COUNTY OF HONOLULU
_ HONOLULU, HAWAII BILL 49_(2004-CD1, FD2_
DDC 9/21/04
A BILL FOR AN ORDINANCE
"Unusable land" means that portion of the lands dedicated for a specific
agricultural use that the director determines to be unsuitable for the dedicated
agricultural use.
(b) Lands for which the director has approved a petition for dedication for a specific
agricultural use for a period of one year five years or 10 years shall be classified_
and assessed for real property tax purposes at a percentage of the land's fair_
market value as established in subdivision (2) and shall be sublect to the
following
The land dedicated must be substantially and continuously used for the
business of raising and producing agricultural products in their natural
state.
(2) Dedicated land shall be assessed as follows•
For land dedicated for a period of one year the land shall be
assessed at five percent of its fair market value
~B) For land dedicated for a period of five years the land shall_be
assessed at three percent of its fair market value
For land dedicated for a period of 10 years the land shall be_
assessed at one percent of its fair market value i
(D) For land dedicated for a pasture use for a period of one five or 10
years, the land shall be assessed at one percent of its fair market
value.
{3) The land dedicated shall be substantially and continuously in a use
specified under subdivision (1) for the duration of the dedication period.
Notwithstanding the provisions of subsection (b) in the event the highest per
acre calculation for lands dedicated for five years under subsection (b)(2)(B~
based on the mmlmum lot size as designated in the chapter 21 for lands located
in agricultural districts exceeds the average agricultural production value~er acre
for the county for vegetables and melon crops, and fruits excluding inea pleas
determined annually by the director then the percent of market value for five
year dedications set forth in subsection (b)(2)(B) shall be changed so as not to
exceed the average agricultural production value per acre for such crows The
percent of market value for one year dedications set forth in subsectionL~~(A)_
shall also be changed to not exceed the percent of market value for five~ear
C ~ T Y COUNCIL ORDINANCE
~ I CITY AND COUNTY OF HONOLULU
HoNO~uw, Hnwnn BILL 49 2( 004)S CD1_, FD2
DDC 9/21/04
A BILL FOR AN ORDINANCE
dedications by more than 1 67 times and the percent of market value for 10 year
dedications set forth in subsection (b)(2)(C) shall also be changed to not exceed
the percent of market value for five year dedications by more than 0 33 times.
~___Lands for which the director has approved a petition for dedication as vacant
agricultural land for a period of 10 years shall be classified and assessed for real
property tax purposes at 50 percent of the land's fair market value provld_ed that_
for the period of the dedication the land dedicated is not at the initiation of the
owner or with the authorization of the owner subject to (i) a change in the state
land use classification from agriculture to urban or rural district (ii) a change in
the county zoning from agriculture preservation or country district or (iii
subdivision of the land into parcels of five acres or less.
e~__ _A petition to dedicate land for a specific agricultural use or as vacant agricultural_
land shall be filed with the director An owner of the land may petition for
dedication, or with the written authorization of the owner a lessee permittee or
licensee may petition for dedication of the owner's land The petition for
dedication for a specific agricultural use shall require a declaration that if the
petition is approved by the director the land shall be used for the specific
agricultural use for the duration of the dedication period and a petition for
dedication as vacant agricultural land shall require a declaration that if the
petition is approved by the director the land shall be maintained as agriculture
land for the duration of the dedication period The petition for a dedication for a
specific agricultural use shall be supported by an agricultural plan. The director
shall prescribe the form of the petition and of the agricultural plan. The
agricultural plan may include the following•
(1) A description of the specific agricultural use'
(2) A tax map key number of the owner's land•
(3) A description of the total acreage of the land•
(4) A description of the acreage to be utilized for the specific agricultural used
(5) A timetable for implementation of the plan and
L) A copy of a valid State of Hawaii general excise tax license issued for__
agricultural purposes.
~f) Lands which have been approved for dedication as vacant agricultural land ma~%
have their dedicated use changed to a specific agricultural use without the
11
CITY COUNCIL ORDINANCE-
c.f . ~ CITY AND COUNTY OF HONOLULU BILL 49 2004 CD1 FD2
HONOLULU, HAWAII ~ _
DDC 9/21/04
A BILL FOR AN ORDINANCE
imposition of the rollback tax and penalty upon petition to the director to chance
the dedication of the lands to a specific agricultural use provided that:
(1) When the remaining period of the dedication for vacant agricultural land is
more than five years, the dedication for a specific a ricultural use shall be
for a five or 10 year eriod~
(2) When the remainin period of the dedication for vacant agricultural land is
less than five years the dedication for a specific agricultural use- shall be
for a one, five, or 10 year period.
The petition for change of the dedication shall be filed by the owner of the land o__r
with the written authorization of the owner by a lessee permittee or licensee of
the land, as the case may be. The director shall prescribe the form of the_Qetition
to change dedication. _
(g) Upon receipt of a petition as provided in subsection (e) the director shall make a
finding of fact as to whether the land in the petition area is reasonably well suited_
for the designated specific agricultural use or is classified agriculture under
section 8-7.1 and qualifies to be maintained as agricultural land The finding shall
be based upon a study of the ownership size of operating unit the present us_e_
of surrounding similar lands the state and county land use restrictions for the
land and other criteria as may be appropriate. The director shall also make a
finding of fact as to whether the designated specific agricultural use or vacant
agricultural land use conforms to the development plan for the area The directo_r_
shall also make a finding of fact as to the economic feasibility of the designated
specific agricultural use of the land If all of the findings are favorable the director
shall approve the petition and declare the land to be dedicated for the designated
specific agncultural use or as vacant agricultural land _
{h) The 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 owner's land to a
use other than agriculture for a minimum period of one year five years or 10
years, as the case may be or to cease to maintain the land as agricultural land
for a minimum of 10 years.
The petition for dedication shall be filed with the director by September 1st of a~
calendar year and shall be approved or disapproved by October 31 If approved
the assessment based upon the use requested in the petition for dedication shall
be effective on July 1st of the following tax year
_ CITY COUNCIL ORDINANCE
t_=:~,
~ CITY AND COUNTY OF HONOLULU BILL 49 (2004 CD1
±.•e HONOLULU, HAWAII FD2
-
DDC 9/21/04
A BILL FOR AN ORDINANCE
Q~__ The owner of any parcel of land dedicated under this section shall annual+
submit a report to the director no later than September 1st following each tax
year of the dedication. The report may be rejected by the director in the event the
report is incomplete or contains erroneous or incorrect information The report
shall be accepted or rejected by the director by October 31 of the vear in which it
is submitted. The director shall prescribe the form of the report. The report may
include but is not limited to:
(1) An updated description of the agricultural use of the lan_ d during the
immediately preceding and current tax vears~
(2) A copy of all state general excise tax returns for the immediately
preceding tax year concerning activities conducted on the parcel of land_
dedicated for a specific agricultural use'
A description of the acreage and percentage of the area of the parcel o_f_
land utilized for the specified agricultural use during the immediately_
preceding and current tax years and
(4) A declaration, if applicable that the owner will keep the land in substantial_
and continuous agricultural use or will maintain the land as agricultural
land through the remaining period of the dedication.
AnV part of the report containing confidential commercial or financial information,
including income statements or tax statements shall be clearly labeled by the
owner as such and shall not be open to inspection bV the public
(k) If land dedicated for agricultural use undergoes a change in classification which
is not at the initiation of the owner or with the authorization of the owner such
that there is (i) a change in the state land use classification from agriculture to_
urban or rural district (ii) a change in the county zoning from agriculture1
preservation or country district the dedication shall continue unless the owner
files a written notice of cancellation with the director within 60 days of the
change. Such cancellation shall be effective on the next July 1st which is at least
nine months after the filing. _
In the event that a dedication is canceled or expires the director_shall execute an
expiration or cancellation of the dedication.
In the event the director, upon inspection, finds that dedicated agricultural land is
not in substantial and continuous agricultural use that the land has not been
maintained as agricultural land that the property owner failed to file the reguired_
1~
CITY COUNCIL ORDINANCE
I " CITY AND COUNTY OF HONOLULU
HONOLULU, HAWAII BILL. _49 _~2004~1 CD1, FD2
DDC 9/21/04
A BILL FOR AN ORDINANCE
report in a timely manner or that the required report must be rejected the owne_r_
shall be notified of the finding and the owner shall have 60 days to address t_he_
finding. In the event the owner fails to satisfactorily address the finding the
dedication shall be canceled and the propertv owner shall be subject to a rollback
tax and penalty. The rollback tax shall be the difference between the taxes owed
for the land at 100 percent of the land's assessed value at fair market value and
the taxes actually imposed on the land retroactive from June 30th of the tax rear
in which the dedication was canceled to July 15` of the initial year of the
dedication at the tax rate applicable for the respective tax vears except as
provided in paragraphs (1) and (2) below The penalty shall be 10 percent for
each year of the rollback tax. The rollback tax and penalty shall be a paramount
lien upon the propertv
(1.. For lands dedicated for five vears and subject to a cancellation after the
third tax year of the dedication period the period of the rollback tax shall
be in accordance with the followina schedule•
(A) For two tax vears for a cancellation in the fourth tax vear of the
dedication period retroactive from June 30th of the fourth taxyear_
to July 1S` of the third tax vear of the dedication period
(B) For one tax vear for a cancellation in the fifth tax vear of the
dedication period retroactive from June 30` of the fifth tax year to
July 1st of the fifth tax vear of the dedication period
(2) For lands dedicated for 10 vears and subject to a cancellation after the
fifth vear of the dedication period the period of the rollback tax shall be in
accordance with the following schedule•
(A) For five tax vears for a cancellation in the sixth tax vear of the
dedication period retroactive from June 30th of the sixth tax ear to
July 1st of the second tax vear of the dedication period•
~B) For four tax years for a cancellation in the seventh tax vear of the
dedication period retroactive from June 30th of the seventh tax_
year to July 1st of the fourth tax year of the dedication eriod;
(C) For three tax years for a cancellation in the eighth tax year of the
dedication period retroactive from June 30th of the eighth ta_x year
to July 1st of the sixth tax vear of the dedication period•
•~`f CITY COUNCIL ORDINANCE
~ CITY AND COUNTY OF HONOLULU BILL 49_~2004~
HONOLULU, HAWAII LCD1, FD2
DDC 9/21/04
A BILL FOR AN ORDINANCE
{D) For two tax years for a cancellation in the ninth tax year of the
dedication period retroactive from June 30th of the ninth tax year to
July 1st of the eighth tax year of the dedication period
LL For one tax year for a cancellation in the tenth tax year of the_
dedication period, retroactive from June 30th of the tenth tax year
to July 1st of the tenth tax year of the dedication period1
{n) The owner may appeal any disapproved petition for dedication resection of the
annual report cancellation of the dedication or imposition of a rollback tax and
penalty in the same manner as an appeal from an assessment.
~ _ Notwithstanding any provision in this section to the contrary the occurrence of
any of the following events shall cause the dedication to be canceled without the_
imposition of any rollback taxes or penalties whatsoever.
{1) The death of any owner or
(2) Events beyond the owner's control make it unfeasible to continue the
~ricultural use of the dedicated property including but not limited to'
A serious or debilitating long-term illness or injury suffered by the
owner;
~B) A natural disaster such as a windstorm flood disease or
infestation that destroys the crop or livestock on the dedicated
parcel; or
(C) The taking of the dedicated parcel or any Portion thereof by a
governmental entity provided that where only a portion of the
parcel is taken, the cancellation shall be effective only as_to the
portion taken.
(3) The change of a dedication of vacant agricultural lands to a dedication for_
a specific agricultural use under subsection (f)
(p) Notwithstanding any provisions in this section to the contrary for five and 10 year
dedications of land for a specific agricultural use the director may grant an owner
a grace period which may be granted subject to the following conditions
(1) A grace period may be granted only if one of the following events occurs:
15
CITY COUNCIL ORDINANCE
I ~ CITY AND COUNTY OF HONOLULU
_ HONOLULU, HAWAII BILL 49 (2004~CD_1, FD2_
DDC 9/21/04
A BILL FOR AN ORDINANCE
(A) A bank or other lending institution acquires possession of a
rp
operty as a result of a default of a mortgage on the propel or
(B) The agricultural use of a dedicated parcel is terminated because a
lessee has abandoned or terminated a lease Drior to the end of th_e
term of the lease the owner of the parcel has not found another
lessee, and the lease has a term of five years or longer.
(2) During the grace period the owner is not required to use the land for th__e
business of raising and producing agricultural products.
At the end of the grace period the owner shall use the land for the_
business of raising and producing agricultural products for the entire
remaining period of the owner's dedication The grace period shall not be
counted in determining the owner's compliance with the dedication.
The grace period shall not exceed two years
(5) During the grace period the land shall be assessed at 100% of market
value. -
(6) No grace period shall be granted for a parcel of land within five tears
following the expiration of a previous grace period "
SECTION 5. Section 8-10.27, Revised Ordinances of Honolulu 1990, as amended,
is amended to read as follows:
"Sec. 8-10.27 Exemption-Public Service.
(a) Real Property which is owned, or leased and actually used by a public service
company shall be exempt from real property taxes.
(b) If the property for which exemption is claimed is leased by the public service
company for a period of one year or more, the lease agreement shall be in force
and recorded in the bureau of conveyances at the time the exemption is claimed.
(c) The exemption provided in this section shall not apply to any portion of the
property that is not used for the primary purpose of the public service company.
(d) If any portion of the property is ineligible for the property tax exemption under this
section:
r 'I°•.
q`
,CITY COUNCIL ORDINANCE
- ',f CITY AND COUNTY OF HONOLULU BILL 49 2004 CD1 FD2
HONOLULU, HAWAII i_ _
DDC 9/21/04
A BILL FOR AN ORDINANCE
(1) The remaining eligible portion shall not be deprived of the exemption;
(2) The ineligibility for exemption under this section shall not disqualify that
portion for an exemption under any other law; and
(3) The tax shall be assessed upon so much of the value of the building and
land thereunder as the proportion of the nonexempt floor area bears to the
total floor area of the building.
(e) "Public service company' shall be as defined under Section [8-7.1(c)(6)]
SECTION 6. Chapter 8, Article 10, Revised Ordinances of Honolulu 1990, as
amended, is amended by adding a new section to be appropriately designated by the
revisor of ordinances and to read as follows:
"Sec. 8-10. Exemption-Qualifying agricultural improvements for dedicated
vacant agricultural lands.
(aj____ As used in this section:
"Drainage systems" means agricultural systems of channels ditched
pipes, pumps, and accessory facilities established for the purpose of drawing off
water from a land area.
"Incremental increase in the valuation of real property attributable to
qualifying agricultural land improvements" means the sum of all documented
expenses incurred to construct the qualifying agricultural land improvements.
"Irrigation systems" means the agricultural systems of intakes diversionsL
wells, ditches, siphons pipes reservoirs and accessory facilities established for
the purpose of providing water for agricultural production.
"Qualifying agricultural land improvements" means construction
reconstruction or improvement of irrigation systems drainage systems or roads
soil conservation, fire protection or animal control measures on land classified as
vacant agricultural land as defined in 8-7 1(c) and dedicated for 10 years unde_r_
8-7.3(d), where the cost of such improvements is equal to or greater than
$10,000.00.
(b) Any incremental increase in the valuation of real property attributable to
qualifying agricultural land improvements shall be exempt from propertyaxes for
17
CITY COUNCIL ORDINANCE
~ CITY AND COUNTY OF HONOLULU BILL 49 200~CD1, FD2
",.,,;,,d- HONOLULU, HAWAII
DDC 9/21/04
A BILL FOR AN ORDINANCE
a period of seven years following the construction of the agricultural land_
improvements.
The claim for exemption shall be filed with the director on or before September
30th preceding the tax year for which such exemption is claimed on such for_m_as_
shall beQrescribed by the department The claim shall be supported by
documentation describing the agricultural land improvements, establishing that
the agricultural land improvements have been constructed and establishing the
amount of expenses therefor. Any additional qualifying agricultural
improvements for a subsequent fiscal year shall be separately claimed.
(d) The claim for exemption once allowed, shall continue for a period of seven
ey ars "
SECTION 7. It is the intent of the council to annually set the tax rate for
properties classified agricultural at a rate that is equal to or less than the rate for
properties classified improved residential.
SECTION 8. Notwithstanding the foregoing provisions of this ordinance, all lands
approved for an agricultural dedication under the applicable ordinance provisions
existing prior to the enactment of Ord. 02-39, and irrespective of whether or not the
petition for dedication was filed after July 30, 2002, the effective date of Ord. 02-39,
shall continue to be subject to the ordinance provisions for agricultural dedication under
which the petition was filed and approved by the director, including the provisions for
failure to observe the restrictions on the use of the dedicated land and the imposition of
the rollback tax and penalty therefor, and as may be further amended by the provisions
of Section 5 of Ord. 02-39.
SECTION 9. Notwithstanding any other provisions of this ordinance, for tax year
2005-2006 only, petitions to dedicate for a specific agricultural use, or for vacant
agricultural land, shall be filed with the director by November 1, 2004, and shall be
approved or disapproved by December 15, 2004. Due to the limited time available to
the director to implement this ordinance for the tax year 2005-2006, for tax year 2005-
2006 only, the director shall determine the average agricultural production value per
acre of vegetable and melons, and fruits but excluding pineapple, using data from the
report published by the State of Hawaii, Department of Agriculture entitled "Statistics of
Hawaii Agriculture 2002."
SECTION 10. Ordinance material to be repealed is bracketed; new material is
underscored. When revising, compiling or printing this ordinance for inclusion in the
Revised Ordinances of Honolulu, the revisor of ordinances need not include the
brackets, bracketed material, or the underscoring.
~o
qq CITY COUNCIL ORDINANCE
P~ - I
~~,~,f CITY AND COUNTY OF HONOLULU BILL 49 2UU4 CD1 _
HONOLULU, HAWAII a FD2
DDC 9/21/04
A BILL FOR AN ORDINANCE
SECTION 11. This ordinance shall take effect upon its approval and apply
to the tax years beginning July 1, 2005 and thereafter.
INTRODUCED BY:
Donovan Dela Cruz
Ann Kobayashi
DATE OF INTRODUCTION: _
July 27, 2004 _
Honolulu, Hawaii Councilmembers
APPROVED AS TO FORM AND LEGALITY:
Deputy Corporation Counsel
APPROVED this _ day of , 2004.
JEREMY HARRIS, Mayor
City and County of Honolulu
(OCS/092104/mg)
19