HomeMy WebLinkAboutBIL 049 Draft 04 2002-2004
COUNTY OF HAWAII STATE OF HAWAII
BILL NO. 49
Draft 4
ORDINANCE NO.
AN ORDINANCE AMENDING CHAPTER 19, ARTICLES 1,7 AND 8 OF THE HAWAPI COUNTY CODE 1983
(1995 EDITION), RELATING TO REAL PROPERTY TAX DEFINITIONS; NON-DEDICATED AGRICULTURAL
USE ASSESSMENT AND AGRICULTURAL USE DEDICATION.
BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAtI:
SECTION 1. Chapter 19, article 1, section 19-2 of the Hawai i Counry Code 1983 (1995 edition),
relating to definitions is amended to read as follows:
Article 1. Administration.
Section 19-2. Definitions.
(a) Whenever used in this chapter:
(1) "Agriculture use value" means the productivity value for assessment purposes
determined for lands being put to any agricultural use
12) "Commercial agricultural activities" shall mean the use of property to~enerate
income, monetary gain or economic benefit in the form of money or money's
worth of a minimum $2 000 annual gross income per farm operation which may
include multiple parcels that need not be contiguous and/or the use of property
that adheres to generally accepted standards or recognized practices within that
agricultural industry.
(3) "Commercial agricultural use dedication" means the use of land on a continuous
and regular basis that demonstrates the owner is engaged in commercial
agricultural acbwties from•
(A) intensive agriculture•
(B) orchards;
(C) feed crops and fast rotation forestry• or
(D) pasture and slow rotation forestry
(4) "Continuous and regular basis" shall be evidenced by the recurring planting
cultivation and harvesting of crops or ongoing animal husbandry or aguaculture
activities that adhere to generally accented standards or recognized practices
within that agricultural indust~
{ f}}} u "County" means the County of Hawaii.
K4j} u "Dedicated lands" are lands which are restricted in their use for specified
periods of time by covenants executed between the landowners and the
director of finance as provided by this chapter.
f(~-}3 Ll "Director" means the director of finance of the County of Hawai i or the
director's authorized [sa~erdinate,] representative.
L8) "Farm dwelling" means asingle-family dwelling located on and used in direct
connection with a farm, or where the agricultural activity provides income to the
occupant(s) of the dwelling A farm dwelling includes employee housing for that
farm.
(9) "Feed crops and fast rotation forestry" includes but is not limited to such crops
as forage, seed, cane rice and biomass grasses
(10) "Intensive agriculture" includes but is not limited to such crops as vegetables
ginger, taro, herbs nurseries foliage cut & potted flowers piggeries dairy
poultry feedlots aguaculture honey and honey bees
{f5}} 11 "Market value" is the most probable sale price of a property in terms of
money in a competitive and open market assuming that the buyer and
seller are acting prudently and knowledgeably, allowing sufficient time for
the sale, and assuming that the transaction is not affected by undue
stress.
(12) "Non-dedicated 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 a ricultural activities from•
(A) intensive agriculture;
(B) orchards;
(C) feed crops and fast rotation forestry• and/or
(D) pasture and slow rotation forestry
(13) "Orchards" includes. but is not limited to such crows as macadamia nuts guava
banana papaya avocado grapes passion fruit coffee citrus cacao~pineappfe
noni and tropical specialty fruits.
(14) "Pasture and slow rotation forestry" includes but is not limited to pasture and
longer rotation forestry
{{3}} 15 "Property" or "real property" means and includes all land and
appurtenances thereof and the buildings, structures, fences, and improvements
erected on or affixed to the same, and any fixture which is erected on or affixed
to such land, building, structures, fences, and improvements, including all
machinery and other mechanical or other allied equipment and the foundations
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thereof, whose use thereof is necessary to the utility of such land, buildings,
structures, fences, and improvements, or whose removal therefrom cannot be
accomplished without substantial damage to such land, buildings, structures,
fences, and improvements, excluding, however, any growing crops.
SECTION 2. Chapter 19, article 7, section 19-53 of the Hawaii County Code 1983 (1995
edition) relating to valuation is amended to read as follows:
Article 7. Tax Maps; Valuations.
Section 19-53. Valuation; considerations in fixing.
(a) [Tke] Except as provided below, 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.
Exception The value of land classified and used for agriculture as determined
pursuant to sections 19-57 or 19-60 shall be the value of such land for such
arc ricultural use without regard to any value that such land might have for other
purposes or uses The director shall update the agricultural use values at least
every five years and shall consult with agriculturalists and/or experts in the field
when making such determination. The establishment of the agricultural use rate
values shall be made in accordance with chapter 91, Hawaii Revised Statutes.
(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.
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(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) 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 properly which is valued according to its nondedicated
agricultural use pursuant to subsection 19-57.
.
(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, except as exempted under section 19-71(a) or fib,
(iv) Real property which is used for residential rental purposes,
whether for short-term or long-term tease.
(v) Real property which is used for any purpose other than the
owner's principal residence.
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(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.
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(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 lot 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."
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(~)]uf 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] the 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
Statutes, 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:
(I) 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.
SECTION 3. Chapter 19, article 7, section 19-55 of the Hawaii County Code 1983
(1995 edition), relating to dedicated lands is amended to read as follows:
Section 19-55. [9edie~ated-lands] Reserved.
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SECTION 4. Chapter 19, article 7, section 19-57 of the Hawaii County Code 1983 (1995
edition), is amended to read as follows:
Section 19-57. [lteserared] Non-dedicated agricultural use assessment.
(a) Lands classified and used for agriculture and which are not dedicated pursuant to
Article 8 section 19- may be assessed for real property tax purposes as established
in subsection (a){2) of this section and shall be subject to the following
(i) The land in non-dedicated agricultural use must be used on a
continuous and regular basis for intensive agriculture orchards feed
crops and fast rotation forestry or pasture and slow rotation forestry
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 in specific non-dedicated
agricultural use shall be assessed at two times the dedicated
agricultural use value as established by the director of finance under
this chapter.
(3) A farm dwelling site shall be assessed at the highest commercial agriculture use
value, provided that the maximum farm dwelling site area to be assessed at the
highest commercial agriculture use value shall not exceed one-fourth acre.
(b) All portions of land that are not committed or used for a specific agricultural
use shall be assessed based on the proportional market value of the total
ro e
(c~pplication; filing; assessment effective; renewal.
(i) The director shall prescribe the form of the non-dedicated agricultural use
application.
(2) The application shall be filed with the director by December 31 of any calendar
year.
(3) The application for anon-dedicated agricultural use assessment must be signed
by all owners of the land being committed.
ti
(4) 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
(5) Renewal of the application shall be in such form and at such time as required by
the director.
(d) Deferred or roll back tax.
(1) A deferred or roll back tax shall be imposed on the owner of the agricultural
land upon anv of the following events:
(A) Conversion to anv County zoned district other than agricultural
residential and agricultural family agricultural intensive agricultural
or aoricultural project district as a result of a petition by the owner or
lessee;
(B) The property is subdivided into parcels of less than five acres in size• or
(C) A condominium property regime is declared for the property having
condominium units with an area equivalent to less than five acres in size
(2) The deferred tax shall commence from the date the conversion was
made retroactive to the date the aoricultural 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 5. Chapter 19, article 8, section 19-60, of the Hawai i County Code 1983
(1995 edition), is amended to read as follows:
Section 19-60. [Rp~_.-__-.] Commercial Agricultural Use Dedication.
(a) A special land reserve is established to enable the owner of any parcel of land or lessee
of a recorded agricultural lease with a minimum of five years remaining on the lease at
time of petition, to dedicate his or her land for a specific commercial agricultural use
dedication, and to have his or her land assessed its value in such use for a period of ten
years, or in the case of a recorded aoricultural lease the term of the (ease up to ten
years, provided:
(1) The land dedicated for commercial activity must be used on a continuous and
regular basis for intensive agriculture, orchards, feed crops and fast rotation
forestry or pasture and slow rotation forestry and have a minimum lot size per
farm operation for that dedicated category of commercial activity as provided for
in the administrative rules and regulations of the department; and
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(2) The land is within the County zoned district of agricultural residential and
agricultural family agricultural intensive agricultural agricultural project district
or any other County zoned district meeting with the approval of the director of
planning.
(b) The owner of land under the 20-year agricultural dedication at July 1 2003 mav_
continue to be assessed at fifty percent of its agricultural use value and shall be subject
to the conditions and provisions of the effective commercial agricultural use dedication
(c) Determining Agricultural Use Value.
Lll In determining the value of lands which are classified and used for commercial
agriculture use consideration shall be given to rent productivity nature of
actual commercial 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 may be considered to have
special knowledge of land values.
(2) Four general agricultural categories shall be used in determining the value of
lands which are dedicated for commercial agriculture:
(A) INTENSIVE AGRICULTURE, which includes such crops as vegetables
ginger taro herbs nurseries foliage cut and potted Flowers piggeries
dairy, poultry, feedlots, aquaculture. honey and honeybees.
L61 ORCHARDS which includes such crops as macadamia nuts guava
banana, papaya, avocado, grapes, passion fruit. coffee citrus cacao
pineapple and tropical specialty fruits.
(C) FEED CROPS AND FAST ROTATION FORESTRY which includes forage
crops, seed crops, cane, short rotation forestry, biomass, grasses etc.
(D) PASTURE AND SLOW ROTATION FORESTRY. which includes pasture and
longer rated forestry,
(3) Lands classified as tree farm property pursuant to chapter 186 Hawaii Revised
Statutes, shall be considered for classification and valuation as agricultural.
(4) The portion of land that is not dedicated for commercial agriculture use shall be
assessed based on the ro ortional market value of the total roe
(5) A farm dwelling site shall be assessed at the highest commercial agricultural use
value, provided that the maximum farm dwelling site area to be assessed at the
highest commercial agriculture use value shall not exceed one-fourth acre.
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(d) Commercial Agricultural Use Dedication Petition.
(1 If any owner desires to dedicate his or her land for a commercial agricultural use
and to have his or her land taxed as its assessed value in this use. the owner
shall so petition the director of finance and declare in the petition that his or her
land can best be used for the purpose for which he or she requests permission
and that if the petition is approved the land will be used for this purpose The
director may require evidence of 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.
(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 vear
(4) The petition for commercial agricultural use dedication must be signed by all
owners of the land being dedicated; and
(51 A recorded lessee of the land with a term of five or more years remaining from
the date of the petition and who is responsible for payment of the real property
tax shall also be deemed an owner of the land within these provisions
(6) 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 development plan of the State and
County; provided that for lands in a zoned district other than County
zoned district of 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.
(D) In order to place prospective buyers on notice of the rollback liability, the
petitioner shall record the dedication in accordance with the procedures
of the bureau of conveyances within ninety days of notice of approval.
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(e) Approval by the director of the petition to dedicate shall constitute a forfeiture on the
part of the owner of anv right to chance the use of his or her land to a use other than
commercial agriculture for a minimum period of ten years unless otherwise provided by
this chapter, subject to cancellation or renewal as follows•
(I) At least one hundred eighty davs 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 davs of the change by the owner
(3) Upon anv conveyance or any change in ownership during the period of
dedication. the land shall continue to be subject to the terms and conditions of
the dedication unless a release has been issued by the director
(f) Changing Between Commercial Agricultural Categories
(1) If the owner desires to chance 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) His or her land can best be used for a commercial agricultural activity
other than that for which the petition was originally approved• and
(B) He or she will use his or her land for that new commercial agricultural
activity if the petition if approved.
(2) If an owner is permitted to change the use as provided in this subsection the
owner shall be allowed up to twenty-four 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 prooress reports of his or her efforts in converting
from one commercial agricultural category to another commercial aoricultural
cate4orv 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.
~s
(5) Anv other provision to the contrary notwithstanding an approved change in use
as provided herein shall not alter the original dedication period.
(g) Breach of dedication• deferred or rollback taxes• penalties and interest
(1) A deferred or rollback tax shall be imposed on the owner of commercial
agricultural use dedicated lands upon any of the following
(A) Failure of the owner to observe any restriction condition or provision on
the use of the land: or
l~ If the dedicated progertv or any portion thereof is sold by way of a
conveyance which is subject to conveyance tax under the terms of
chapter 247, Hawaii Revised Statutes, unless a notarized affidavit is
signed by the owner stating that the land will continue to be subject to
the full requirements of the dedication including any penalties for
violation. The director shall record the notarized affidavit with the bureau
of conveyances.
(2) The deferred or rollback tax shall commence from the date the failure to observe
the restriction, condition orprovision, or the property's conveyance retroactive to
the date the assessment was made pursuant to subsection (F) of this section but
for not more than ten 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 ad of changing the use for any period; provided that
the petition by the owner for a chance 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 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.
i~
(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 pursuant to subsection (F) below, retroactive from the end
of the tax vear in which the breach occurs.
LDl 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 anv time covered by a
successfully completed agricultural dedication period.
(E) In cases involving a breach of a ten-vear dedication or a rollback period
of ten or fewer years for breach of a twentyyear 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 anv breach of dedication affecting more than ten vears under a
twenty-year dedication shall not exceed ten years.
(F) Deferred or Rollback Tax Schedule.
(i) Breach of the restrictions on use within five vears of the
dedication shall result in a rollback to the date of the dedication.
(ii) Breach of the restrictions on use within six years of the dedication
shall result in a rollback of four years from the date of the breach
(iii) Breach of the restrictions on use within seven years of the
dedication shall result in a rollback of three vears from the date of
the breach.
(iv) Breach of the restrictions on use within eight or nine vears of the
dedication shall result in a rollback of two vears from the date of
the breach.
(4) The additional taxes and penalties due and owing shall be a paramount lien upon
the property as provided for bkthis chapter.
(h) The director may cancel a dedication without rollback taxes or penalties in the event of
any of the following
(1) A recognized natural disaster beyond the farmer's control: or
(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.
i~
SECTION 6. 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 7. 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 8. This ordinance shall take effect upon its approval.
INTRODUCED BY: r
COUNCIL MEMBER COUNTY OF HAWAII COUN IL EMBER, COUNTY OF HAWAII
Hawaii
Date of Introduction:
Date of 1st Reading:
Date of end Reading:
Effective Date:
(:~~EitE~l~.~ C®cr~~~. 118.38
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