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Home My WebLink AboutBIL 323 Draft 01 2006-2008COUNTY OF HAWAII ORDINANCE NO. STATE OF HAWAII BILL NO. 323 AN ORDINANCE AMENDING CHAPTER 19, ARTICLE 7, SECTIONS 19-53,19-58.1 AND 19-58.2, HAWAII COUNTY CODE 1983 (2005 EDITION, AS AMENDED), RELATING TO REAL PROPERTY TAXES-NONSPECULATIVE RESIDENTIAL USE. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Chapter 19, article 7, subsection 19-53(g), Hawaii County Code 1983 (2005 Edition, as amended), is amended to read as follows: "(g) Limitation on homeowner assessment. (1) For properties in the homeowner class as of January 1, 2004 and not dedicated to nonspeculative residential use, the assessed value of the property shall not increase more than three percent per tax year tax until the parcel is sold or any portion thereof sold by way of conveyance which is subject to conveyance tax under terms of chapter 247, Hawaii Revised Statutes, at which time the property will be assessed at market value. In addition to the three percent limit of this subsection any improvements undertaken on the property within the tax year shall be assessed at market value. All parcels entering this class after January 1, 2004 shall have the assessed value as of January 1 of the following year and be subject to the above provisions. (2) The real property tax division will not accept applications for the nonspeculative residential use program. Those properties dedicated to nonspeculative residential use as of January 1, 2004 may continue the dedication until it expires or cancel the dedication program at an time, without the imposition of retroactive taxes when continuing in the homeowner class upon filing and approval of petition for such termination with the director of finance by [~be~l-] December 31. [e€ `] The owner may cancel the dedication and move into another class, however a retroactive assessment shall be imposed upon the breach of the dedication. Al For nronerties whose dedication date of the current dedication was prior or equal to July 1, 2005, their base year shall be 2004/2005 or market assessed value, whichever is less. ~B) For properties whose current dedication started after July 1 2005 their base year shall be the same as the first year of their dedication or market assessed value, whichever is less. (This means if your dedication started July 1, 2006, your base year will be 2006/2007.) ~C) For properties who converted from the nonspeculative residential use program to the homeowner program (three percent per year) since January 1, 2004, their base year shall be reassessed as provided in subsections A or B, above. (D) Upon the end of the nonspeculative residential use, cancellation without breach or reassessment, the ensuing real property assessed value shall be determined bathe following formula or current market assessed value. whichever is less: Ensuing_real property tax year assessed value =Base year's market value plus three percent a year compounded annually, to include the ensuing tax year. (E) Further, homeowners who have applied for or renewed their nonspeculative residential use. for the fiscal year 2009-2010 will have their application cancelled and will be assessed as stated above. ~3) ~T~,,, o~.+;o~ aea; n+oa }„ „„„~„nn,,,n+;,,o ,. ;an +• ~ iLi4i1 LtJ ~ r, +ov.w„r.n+i~.r..,F+L,e ao,]:nn+;.,v, r ~,.a +l,o .~. nol nl,nll 1-,n n o.a .++ +L,o .,..n«l~a+ ,>nt„o n,,.a +L.o . ,- f 11.,.,>;,,.:_+~,o } n+; w, ti,o m,ti,:nn++i. ~,on+: w, ~~ CZ~Ir~~~1i,«~nnn 4L,n ~oa:nn+; w~ ; o o .off n .;av~ ; nn+; ter, ~ ~ ~Q ~ .~ Paragraphs 19-53(,g) (2) and (3) shall be repealed upon the final participant in the nonspeculative residential use program being_converted as provided above." SECTION 2. Chapter 19, article 7, sections 19-58.1 and 19-58.2, Hawaii County Code 1983 (2005 Edition, as amended), are amended to read as follows: "Section 19-58.1. Certain lands dedicated to nonspeculative residential use. Applications will not be accepted. (a) The term "owner" as used in this section shall mean the fee owner or the lessee of real property with an unexpired lease term of not less than five years from the effective date of the dedication. (b) Any owner of property who qualifies under sections 19-71 and 19- 72 for home exemption and uses the property exclusively for residential use may dedicate said property in its entirety to nonspeculative residential use and have that parcel assessed in the manner provided by section 19-58.2, except that a husband and wife, although living separate and apart, shall be entitled to dedicate only one parcel to the nonspeculative residential use. Exclusive residential use as used in this section shall not permit the owner to conduct any commercial activities on the property, except as otherwise permitted in sections 19-71(a) and (b). Those owners who have dedicated their property to agricultural use or receive the benefit of the agricultural use or native forest dedication shall not be eligible for this nonspeculative residential use dedication. • ,i +• 1 .1 + 1, +1, ° °,.+< °,a ., + + F 1, °+;+:,,,~, +1,° .a;«°n+.,« nl,~il „-..,1~° n ~.,.l;.,n< .,~ ~ + + 1, +L. ~ b + +L, °«+<• .7°nn«;L,°a ;~+L,° «.°+;+;~, a.) ...v.,............. ..... t . .. ........ ... ~ t m T~+L.° ~,,.a;,,.< ;~ ~ .~.<« 1 (1 '11 ~7 1 O ~7 ~l~,l i6i izvrr~ .r~E- C-6n + +L, +L, rl' . ~S + L,nll n ° +4,° ,~,°+;+:,,,~ n„rl .1°nl., «° +L.° ,..., r, ................ ~..,.,_.,. _., ._.., +l, + r' + 1' L,'1'+ +i, °+;+;~„°« ~L,nll . ,;+1,;,, n v+< '~" ~~f u „n -- ~ ° r i~ v« ~ „ , r za uii u i ~} 1 } 1, a , a l,t< ,ln<rn .+ «+.~ +1,° n °t1~+inn_ tl~a v u.avv..a.. ~. v.., .... 11 ou e ~ ' i-r° i ~ -r~° u ' Erk1~Ee- -&t~6~r~ r~v ,i aii u .. . c i c pPi~ za vnv1 Jaaurz ~~..~ t1, ~t~~ ,~ Tl, .nl „°+;+;,,,-, nl,nll nll z~ e t~ `~ ~~ p L.~, +L,o .1;,-0~+.,,- (.f'~,,....o o.a;.,~~ ,-la.a;r.,+:.,,,.~ +l,o ~h~o~~.~.a ..,l„~+;.,,~ ~L.~11 ,.+;,,,.o +., L.o ., o.l .,...1.,,,..o . ,;+1, +l,o ,. .,F+L,o ~ t~ ~' r = °• '~ 1 = ,, r= i ~l ~ t i c-v L rir 3C -cis~c-v ir r~i dP 8r vvc~%rir2~C ~iiiiTg rcc irE ii~32E h~ ~ +o.-„, ~L..,11 1,v +L,o .ao.a :,..,+0,7 ,,.,1„0 ,.,, +l,o o .-~+;,,,, a.,+o .,l„~ f:~+., „+ ~,f'+L,a ~ ., + .,f';,,..«o.,~o L,o+,,,ov,~, +l,o ~lo.l;...,+o.l ..,l„o .,.,rl „ ~ (-I}]~ If, during any period of dedication, any breach of the dedication requirements should occur, the special nonspeculative residential use assessment privilege shall be canceled and retroactive taxes shall be imposed. Breach of the dedication shall include the failure to maintain the home exemption status of the property, violating the exclusive residential use provision, dedicating the property to agricultural use or receiving the benefit of the agricultural use assessment, subdivision of the property into separate parcels, or the declaration of a condominium property regime, or the sale of the dedicated property or any portion thereof sold by way of a conveyance which is subject to conveyance tax under the terms of chapter 247, Hawaii Revised Statutes. Retroactive taxes due and owing as a result of the breach shall be a paramount lien on the property. (1) Provided, that the nonspeculative residential use dedication shall not be breached if the dedicated property meets the criteria as listed below: The following also includes provisions that are not subject to the conveyance tax under the terms of chapter 247, Hawaii Revised Statutes, and are included for further clarification. (A) Transferred to the owner's heirs by testacy or intestacy, (B) Jointly owned by spouses and upon the death of one spouse ownership is transferred to the surviving spouse, (C) Transferred to a spouse or former spouse in connection with a property settlement agreement or decree of dissolution of a marriage or legal separation, (D) Transferred to a trustee for the beneficial use of a spouse, or the surviving spouse of a deceased transferor, or by a trustee of such a trust to the spouse of the trustor, (E) Subject to a title change between spouses and said change does not result in a loss of the home exemption status, 4 (F) And the heirs, surviving spouse, divorced spouse, or trustee, within sixty days after receiving title to the property, petitions the director, in writing, to continue the dedication and the property continues to qualify for the home exemption as defined in sections 19-71 and 19-72, or (G) The dedication shall not be cancelled if the lessee purchases the leased fee interest from the lessor. (2) Provided further that, except as provided herein, retroactive taxes shall not be assessed when: (A) A person receives title to property dedicated to nonspeculative residential use by ways of testacy or intestacy and does not petition the director to continue the dedication as provided in section 19- (B) The dedicated property is jointly owned by spouses and upon the death of one spouse, ownership is transferred to the surviving spouse, and the surviving spouse does not petition the director to continue the dedication as provided in section 19- (C) The property is wholly or partially destroyed or damaged as a result of fire, seismic or tidal wave, volcanic eruption, earthquake, flood waters and wind or rain storm. The owner may cancel the dedication for the reasons enumerated in paragraph (2)(C) by submitting written notice of the cancellation within sixty days of the damage or destruction. Cancellations shall become effective July 1 of the next tax year, and the property shall be assessed in accordance with section 19- 53(a). [{g~]~The director shall prescribe the form of the petition. [T-13e ~~ nl, 11 6. a'lorl '+l, +L.o .1' +., 1, C ,,.+e,~,l,or 1 „f .,,,., ,.~lo,,,a~r . ~ it +., T., ,auto t tl-,o oonao.l 1 +T,~ ,-L~t v ~ YLl.1 UV, ~aiv a~iu~i~v~ 1 L, 11 L. .] + .a ., roa o..t;~,,, 10 S2l~1~~ .,l , .a; oa ro+;+;~. 11~+; .,~ a ~' +' +1, .,f' .,,, ., ~~l fem.,.„ .] :11 „+'w, o +T.o n+irirt ~1~iL~fi~v. „lo tL,:~ ~o~+;.,., .,.,.a .a >, +L,o ,l;ro..t„r 1,., Co,..+o„,L,o,- 1 .,Ftl,o . 5 (e) Applications will not be accepted. Section 19-58.1 shall be repealed upon the final~artic~ant in the nonspeculative residential use program being converted as provided in paragraph 19-53(x). Section 19-58.2. Nonspeculative residential use assessment. Properties approved by the director for dedication to nonspeculative residential use shall be assessed for real property tax purposes in the following manner: (a) Property, approved for nonspeculative residential use dedication, shall be assessed for real property tax valuation purposes on its market value as of the assessment date January 1 of the calendar year following the petition approval. This assessment shall be frozen for the dedication period, except for adjustments as provided for in this section. (b) Upon approval by the director of succeeding dedications by the owner of the same property, the assessed valuation shall continue to be assessed in accordance with the provisions of section 19- 58.2(a). (c) If any improvements are undertaken on the dedicated property, and such improvements increase the market value of the dedicated property, the assessment shall be increased based on the market value of the improvements undertaken, however, the assessed valuation for ensuing tax years shall be determined in accordance with the provisions of section 19-58.2(a). (d) If any improvements are undertaken on the dedicated property, the owner shall obtain the required building permit for the construction of new or additional improvements or renovations of the dedicated property. Violation of this reporting requirement will result in cancellation of the dedication and activate payment of retroactive taxes and penalties. (e) In the case where additional dwelling units are constructed or a single-family dwelling unit is renovated or converted into a two or more family dwelling unit all in accordance with article 6, chapter 25, Hawaii County Code of 1983, as amended, the dedication shall not be cancelled provided the owners within sixty days of the change submit a written application to continue the dedication and file the claim for home exemption and the owners would continue to be eligible for the home exemption. If the owner fails to submit the written application in a timely manner or uses the additional dwelling units or renovated areas for rental or income- producing purposes the dedication shall be cancelled and the retroactive taxes imposed. (f) If the dedicated property loses the home exemption under which it was dedicated, or if the dedicated property 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, the 6 dedication shall be deemed breached. Occupancy of a separate living unit by an immediate family member is permissible under this section and is not considered a breach of dedication provided all other provisions are met. For the purpose of this section immediate family is defined as: parents, brothers, sisters, spouses, children, parents-in-law, grandparents, and grandchildren. (g) Retroactive assessments shall be imposed upon the breach of the dedication. The retroactive assessment shall be calculated as the cumulative difference between the amount that should have been owed without the dedication less the amount actually paid for each of the years deemed to be in breach plus penalty at a rate often percent. If the dedicated property is sold, the retroactive assessment for that year shall be calculated as the difference between the dedicated value and the higher of either the actual selling price or the value of the property at its actual use. In the case of properties dedicated to nonspeculative use, notice of assessment as prepared under section 19-27 shall delineate the dedicated value and market value, beginning tax year 1993-94. ~) Section 19-58 2 shall be repealed upon the final participant in the nonspeculative residential useprogram being converted as provided in paragraph 19-53(x)." SECTION 3. Severability. If any provision of this ordinance, or the application thereof to any person or circumstance, is held invalid, the 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 4. Material to be repealed is bracketed and stricken. New material is underscored. In printing this ordinance, the brackets, bracketed material, and underscoring need not be included. SECTION 5. This ordinance shall take effect upon its approval. INTRODUCED BY: ,-- CO MEMBER, COUNTY OF HAWAII Hawaii Date of Introduction: Date of I st Reading: Date of 2nd Reading: Effective Date: REFER8VC6 Catty 1326 7