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Home My WebLink AboutCOM 0924.005 2014-2016 OVIV OF~,.�, Office: (808)965-2712 From the office of- `•' _' Fax: (808)965-2707 Council Member �.�` District 4—Puna Makai ", ' y�� Email: gilagan@hawaiicounty.gov GREGGOR ILAGAN 25 Aupuni Street,Hilo,Hawaii 96720 MEMORANDUM g. DATE: October 5, 2016 0. c n TO: Dru Mamo Kanuha, Council Chair and Members of the Hawai`i County Council y -` FROM: Greggor Ilagan, Council Member7.7ar .c 7 SUBJECT: Bill 219; relating to the nondedicated agricultural assessment. Attached for your information is an annotated version of Bill 219. This annotated version is intended to answer questions about the effect that Bill 219 will have on Section 19-57 of the Hawaii County Code 1983 (2005 edition, as amended). Please place this item on the Finance Committee agenda scheduled for October 18, 2016. GI:ps Att. eQmm. No. `"! - • c Ref. To: Fl FC Ref. Date_nr . $ 20?&j. Hawaii County Is an Equal Opportunity Provider And Employer AN ORDINANCE AMENDING CHAPTER 19, ARTICLE 7, SECTION 19-57 OF THE HAWAII COUNTY CODE 1983 (2005 EDITION, AS AMENDED), RELATING TO NONDEDICATED AGRICULTURAL USE ASSESSMENT. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Purpose. The purpose of this ordinance is to encourage proper use of the nondedicated agricultural use assessment,to close loopholes,to improve the inspection process, to add an approval notification process, and to prevent abuse. **Explains in plain language the intent of Bill 219. SECTION 2. Chapter 19, article 7, section 19-57 of the Hawaii County Code 1983 (2005 Edition, as amended) is amended to read as follows: "Section 19-57. Nondedicated agricultural use assessment. (a) Lands classified and used for agriculture and which are not dedicated pursuant to section 19-60, may be assessed for real property tax purposes as established in subsection(a)(2) of this section and shall be subject to the following: (1) The land in nondedicated 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, or be fallowed for such purposes, or agricultural waste lands,on lands zoned by the County to be in the districts of agricultural, residential and agricultural, family agricultural, intensive agricultural, and agricultural project district; **Makes clear that land that not being"used on a continuous and regular basis" because it is being temporarily fallowed at the time that an agricultural use application is made does not disqualify the land. A definition of"agricultural waste lands" is provided in the proposed amendment transmitted in Communication No. 924.2: "All lands that are unproductive or unfit for cultivation, grazing, or other economic uses due to lava inundation, rough terrain, or eroded soils." (2) The portion of land that is committed in specific nondedicated agricultural use shall be assessed at two times the dedicated agricultural use value as established by the director of finance under this chapter; and (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 property. (c) Application; filings; notice; assessment effective; inspection; renewal. (1) The director shall prescribe the form of the nondedicated agricultural use application. (2) The application shall be filed with the director by December 31 of any calendar year. (3) The application for a nondedicated agricultural use assessment must be signed by all owners of the land being committed. The director shall send every applicant a written notice providing the director's determination that the application is approved in whole, approved in part, or denied. If the application is approved in part, the notice shall indicate the portion of the land that qualifies for the assessment. **Requires the director to send a letter to the applicant stating the application is fully approved, partially approved, or denied, with an explanation. Improves the process by allowing a farmer to be notified about the director's decision regarding the application. [(-4-)] M If the application is approved[;] in whole or in parts the assessment based upon the use requested in the application shall be effective as of January 1 for the following tax year. **Non-substantive changes. (6) The director shall cause an inspection of every property assessed for non-dedicated agricultural use no later than ten years since the last inspection. **Every property that receives this assessment must be inspected to ensure compliance with the law at least once every 10 years, although the director has the authority to order an inspection after a shorter interval of time. The exact interval may depend on available staff levels. Any change in the owners of the committed land shall cause an inspection to determine that the land use continues to meet the requirements of subsection (a)(1) of this section. **Whenever the title to the land is sold, transferred, or inherited, a new inspection is required. An inspection may consist of a review of the parcel by the most recent available aerial or satellite imagery. If the director is unable to determine the land use by this method, the director may cause a site visit and may require the owner to furnish additional evidence of such use to the director's satisfaction that the land use is consistent with the requirements of subsection (a)(1) of this section. **Specifies that aerial imagery may be sufficient in normal circumstances to determine compliant agricultural use. Adds option for a ground-based site visit if overhead imagery is inconclusive due to clouds or out-of-date imagery. [(SAL71 Renewal of the application shall be in such form and at such time as required by the director. (d) Deferred or rollback tax. (1) A deferred or rollback tax shall be imposed on the owner of the agricultural land upon any of the following events: (A) Conversion to any County zoned district other than agricultural,residential and agricultural, family agricultural, intensive agricultural, or agricultural 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; ter] (C) A condominium property regime is declared for the property having condominium units with an area equivalent to less than five acres in size[.]; or (D) The land is not being used as required in subsection (a)(1) of this section. **Makes clear that taking nondedicated lands out of agricultural use is grounds for imposition of deferred or rollback taxes. (2) The deferred tax [shall] may commence from the date the conversion was made retroactive to the date the agricultural use assessment was [ , . , . • , , , , . , • , . • . • • • .] submitted. The deferred tax shall not be applied to those years for which the owner can provide evidence to the director's satisfaction that intensive agricultural activity was occurring. **Changes "shall" to "may" to provide the Finance Department with administrative flexibility based on circumstances. Removes the maximum limit of two years plus the current year that the tax may be assessed. Exempts years that agricultural activity was occurring from the calculation of the tax. (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. The administrative rules of the department shall include criteria to determine whether a particular land use is eligible for the nondedicated agricultural assessment under subsection (a)(1) of this section." **Requires the department's rules to define "continuous and regular basis," "intensive agriculture," "orchards," "feed crops," "fast rotation forestry," "pasture," and"slow rotation forestry." SECTION 3. For informational purposes, any appeal of this ordinance arising from a decision of the director of finance shall be made according to the process outlined in chapter 19, article 12 of the Hawaii County Code 1983 (2005 Edition, as amended). **Informs Council members and the public that denial of an application is subject to appeal through the proper channels. SECTION 4. Material to be repealed is bracketed and stricken.New material is underscored. In printing this ordinance, the brackets,bracketed and stricken material and underscoring need not be included. SECTION 5. 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 6. This ordinance shall take effect upon approval.