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HomeMy WebLinkAboutORD 1991-143 1988-1992COUNTY OF HAWAIh STATE OF HAWAII BILL NO. 496 (Draft 2) ORDINANCE NO. 91 143 AN ORDINANCE AMENDING CHAPTER 19, ARTICLE 7, RELATING TO REAL PROPERTY TAX MAPS AND VALUATIONS, HAWAII COUNTY CODE AS AMENDED. SECTION 1. Findings and Purpose. The Council finds that existing real property tax provisions do not recognize tree farming as an agricultural activity. This provision serves as a disincentive for tree cultivation. Forested areas are often cleared and converted to pasture use so that the land may be eligible for the agricultural use assessment and agricultural dedication. State statute currently allows lands to be classified as tree farm property if approved by the Board of Land Natural Resources. The Council finds that real property tax provisions should recognize tree farm property, so classified pursuant to Chapter 186 Hawaii Revised Statutes, as agricultural activities eligible for consideration for the agricultural use assessment and agricultural dedication. SECTION 2. Chapter 19, Article 7, Section 19-53 of the Hawaii County Code, as amended, relating to valuation, is amended to read as follows: "Section 19-53. Valuation; considerations in fixing. (a) The director of finance 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 for taxation purposes, so selected and applied to obtain, as far as possible, uniform and equalized assessments throughout the county; provided, that the value of land classified and used for agriculture, whether such lands are dedicated pursuant to section 19-55 or not, shall, for real property tax purposes, be the value of such land for agricultural use without regard to any value that such land might have for other purposes or uses, or to neighboring land uses, as determined as provided in subsection (f) (1) of this section. In making such determination and assessment, the director shall separately value and assess, within each class established in accordance with subsection (d) of this section: (1) Buildings, and (2) All other real property, exclusive of buildings. (b) All property shall be valued by appropriate systematic methods so selected and applied as to obtain, as far as possible, uniform and equalized assessments throughout the County. (c) 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. 2 (d) (1) Except as otherwise provided in subsection (d) (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, (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 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 section 19-71 to 19-72. 3 (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: (1) Real property which is valued according to its agricultural use pursuant to subsection 19-53 (f) (1), (2) Real property which is dedicated to an agricultural use pursuant to section 19-55, (3) Real property which is used for commercial or income producing purposes, (4) Real property which is used for residential rental purposes, whether for short of long-term lease, (5) Real property which is used for any other purposes except the owner's principal residence. (3) When property is subdivided into condominium units, each unit shall be classified upon consideration of its actual use into one of the general classes in the same manner as land except that units which have been allowed a home exemption for the tax year shall be classified homeowner. (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 sub-paragraphs: 4 (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 residential use at a density of at least a single or two-family residential building per acre, or (C) Land which is sufficiently developed with necessary land improvements to support a use density of at least a single or two-family residential building per acre. (5) "Unimproved residential" shall mean all residential class lands not classified as "improved residential" or "homeowner". (e) Whenever land has been divided into lots or parcels as provided by law, each such lot or parcel shall be separately assessed. (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 may be considered to have special 5 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 ricultural lands. (2) A deferred or roll back tax shall be imposed on the owner of agricultural lands assessed according to its agricultural use as provided in subsection (a) of this section in the event of a change in land use classification by the authorized state agency to urban or rural districts or upon the subdivision of the land into parcels of five acres or less, provided that the tax shall not apply if the owner dedicates the land as provided in section 19-55 within three years from the date of the change in land use classification and fulfills all of the requirements of the dedication. The deferred tax shall be due and payable at the end of the third year following the change in land use classification provided that the land shall continue to be used for agriculture during this period. The total amount of deferred taxes shall be computed commencing at the end of the third year following the change in classification where the land has continuously been used for agriculture, provided however that where the land has been put to a higher urban or rural use prior to the expiration of the three-year period the amount of deferred taxes shall be computed commencing at the end of the year in which the land has been put to such higher urban or rural use, and shall be retroactive to the date the assessment was made pursuant to subsection (a) of this section provided the retroactive period shall not exceed ten years. Where the owner has subdivided the 6 land into parcels of five acres or less, the deferred tax shall commence from the date the conversion was made retroactive to the date the assessment was made pursuant to subsection (a) of this subsection but for not more than ten years. Any other provisions to the contrary notwithstanding , the deferred or roll back tax shall apply only if a change in land use classification has been made as a result of a petition by any 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 deferred or roll back tax shall not apply to lands owned by the owner or lessee who has not petitioned for the change in classification provided the owner or lessee shall continue to use the land in its agricultural use for a period of three years after the change in land use classification is made, or where the change in classification or zoning is initiated by any governmental agency or instrumentality. The deferred or roll back 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 tax rate applicable for the respective years. (A) Where the owner subdivides the land into parcels of five acres or less, the deferred tax shall be due and payable within 60 days of such conversion, subject to a ten percent per annum penalty. 7 (B) Where the owner changes the land use classification, the deferred tax shall be due and payable within three years of such conversion except that where the land has been put to its higher urban or rural use, the tax shall be due and payable at the end of the year in which the land has been put to such higher use, subject to a ten percent per annum penalty. Any other provisions to the contrary notwithstanding, the land shall continue to be assessed in its agricultural use as provided in subsection (a) of this section until the land is put to its higher urban of rural use for a period of three years following the change in classification whichever is shorter, provided that for purposes of determining the amount of deferred taxes to be assessed to the owner or lessee, the retroactive period shall include the period during which the land is continued to be assessed in its agricultural use following the change in classification. Any tax due and owing shall attach to the land as a paramount lien in favor of the County as provided for by ordinance. (3) Where lands located within agricultural districts are put to agricultural uses, that portion of such lands not usable or suitable for any agricultural use, whether dedicated pursuant to section 19-55 or not, the tax upon such unusable or unsuitable land shall be deferred and shall be payable upon conversion as provided under this section. 8 (q) In determining the value of buildings, consideration shall be given to any additions, alterations, remodeling, 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 11 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 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, 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 him and approved by the council, that the additions, alterations modifications or other new construction, improvement or repair work to the buildings were made and satifactorily comply with the particular urban redevelopment, rehabilitation or conservation act provision, or, 9 (2) In the case of maintenance or repair 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 him and approved by the council, that (A) The building was inspected by them and found to be substandard when the owner-occupant made his claim, and (B) The maintenance of 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, as amended, relating to dedicated lands, is amended to read as follows: "Section 19-55. Dedicated lands. (a) A special land reserve is established to enable the owner of any parcel of land within an agricultural district, a rural district, a conservation district, or any urban district to dedicate his land for a specific ranching or other agricultural use and to have his land assessed at its value in such use provided, that if the land is located within an urban district: 10 (1) A lessee of the land with a term of ten or more years remaining from the date of the petition shall also be deemed an owner of the land within these provisions; (2) The land dedicated must be used for the cultivation of crops such as sugar cane, pineapple, truck crops, orchard crops, ornamental crops, or the like, or tree farms; (3) The land dedicated must have been substantially and continuously used for the cultivation of crops such as sugar cane, pineapple, truck crops, orchard crops, ornamental crops, or the like, or tree farms, for the five-year period immediately preceding the dedication request; provided further, that land situated within an agricultural district may be dedicated for a period of twenty years and shall be taxed at fifty percent of its assessed value in such use. (b) If any owner desires to use his land for a specific ranching or other agricultural use and to have his land taxed at its assessed value in this use or fifty percent of its assessed value as the case may be, he shall so petition the director of finance and declare in his petition that his land can best be used for the purpose .for which he requests permission to dedicate his land and that if his petition is approved he will use his land for this purpose. (c) If the owner desires to change from one specific ranching or other agricultural use to another ranching or agricultural use he shall so petition the director of finance and declare in his petition that: 11 (1) his land can best be used for a ranching or other agricultural purpose other than for which he originally requested permission and (2) he will use his land for that new purpose if his petition is approved. (d) Upon receipt of a petition as provided above in subsections (b) and (c), 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 the operating unit, the present use of the surrounding similar lands and other criteria as may be appropriate. 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. If both findings are favorable to the owner, the director shall approve the petition and declare that the owner's land is dedicated land; provided, that for lands in urban districts, the director shall make further findings respecting the economic feasibility of the intended use of the land. If all three findings are favorable, the director shall approve the petition and declare the land to be dedicated. In order to place prospective buyers on notice of the roll back liability, the petitioner shall within thirty days of notice of approval record the dedication in accordance with the procedures of the bureau of conveyances. 12 (e) 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 his land to a use other than agriculture for a minimum period of ten years of twenty years as the case may be, automatically renewable indefinitely, subject to cancellation as follows: (1) In the case of a ten-year dedication, the owner may after the ninth year and years thereafter, give notice of cancellation by filing with the director, a written notice of cancellation, on or before December 31, to be effective as of July 1 of the following tax year; (2) In the case of the twenty-year dedication, the owner may during the nineteenth year and years thereafter give notice of cancellation as provided by this subsection; (3) In the case of a change in a major land use classification not as a result of a petition by any property owner or lessee such that the owner's land is placed within an urban district, the dedication may be cancelled within sixty days of the change by the owner. Upon any 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. Any other provision to the contrary notwithstanding an approved change in use as proved in subsection (c) and (d) shall not alter the original dedication period. 13 (f) Failure of the owner to observe the restrictions on the use of his land shall cancel the dedication and special tax assessment privilege retroactive to the date of the dedication, but in any event, shall not exceed the term of the original dedication, and 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 a year penalty from the respective dates that these payments would have been due. The additional taxes and penalties, due and owning as a result of a breach of the dedication, shall be a paramount lien upon the property as provided for by this chapter. (1) Failure to observe the restrictions on the use means failure for a period of twelve consecutive months to use the land in that manner requested in the petition or the overt act of changing the use for any period; provided that a change in the land use classification upon petition by the owner of such dedicated lands, or the petition by the owner for a change in use as provided in subsection (c), 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. 14 (2) If an owner is permitted to change his use as provided in subsection (c) and (d), he shall be allowed up to thirty-six months from the date of the approval of his petition to convert to the new ranching or agricultural use. if the owner fails to make the conversion within the specified time limit he will be subject to the taxes and the penalties provided above. For purposes of assessment of taxes and penalties, the conversion period shall be considered in addition to the specified dedication period, except, however, in the case of leased lands whose term expires prior to or in conjunction with the end of the dedication period, the conversion period shall be considered as a part of the dedication period. The petitioner shall submit progress reports of his efforts in converting from one agricultural use to another agricultural use to the director of finance by the anniversary date of the petition approval and yearly, thereafter, as long as such conversion period remains. 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 ranching or other agricultural use shall be taxed as provided by this subsection. (g) The director shall prescribe the form of the petition. The petition shall be filed with the director of finance by September 1 of any calendar year and shall be approved or 15 disapproved by December 15. If approved, the assessment based upon the use requested in the dedication shall be effective on January 1' of the next calendar year. (h) The owner may appeal any disapproved petition as in the case of an appeal from.an assessment. (i) The term "owner" as used in this section includes lessees of real property whose lease term extends as least ten years from the date of the petition in the case of a ten-year dedication or lessees of real property whose lease term extends as least twenty years from the date of the petition in the case of a twenty-year dedication. (j) The term "agricultural use" as used in the section shall include aquaculture. (k) A special land reserve is established to enable the owner of any parcel of land within as urban district to dedicate his land for a specific livestock use such as feed lots, calf-raising and like operations in dairy, beef, swine, poultry and aquaculture, but excluding grazing or pasturing, and to have his land assessed at its value in such use; provided that (1) A lessee of the land with a term of ten or more years remaining from the date of the petition shall also be deemed an owner of the land within these provisions; (2) The land dedicated must be used for livestock uses such as feed lots, calf-raising and like operations in dairy, beef, swine, poultry and aquaculture but excluding grazing or pasturing; 16 (3) The land dedicated must have substantially and continuously .used in the livestock uses enumerated in (2) hereinabove; (4) And such livestock use must be compatible with the surrounding uses." SECTION 4. Material to be deleted is bracketed. New material is underscored. In printing this ordinance, the brackets, bracketed material, and underscoring need not be included. SECTION 5. In the event that any portion of the ordinance is declared invalid, such invalidity shall not affect the other parts of this ordinance. SECTION 6. This ordinance shall take effect on July 1, 1992. INTRODUCED BY: ~ ,/ / ~~ C UNCIL MEMBER, COU TY OF HAWAII Hilo, Hawaii Date of Introduction: December 10, 1991 Date of 1st Reading: December 10, 1991 Date of 2nd Reading: December 18, 1991 Effective Date: JUL 1 1592 17