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HomeMy WebLinkAboutBIL 1097 Draft 01 1980-1984a `";- ,ORDINANCE Intr. By: Reten. Re: Creat ew "Homeowners" Class for Tax e Setting Refer: C-1631/FC- MB No. Bill 1097: Amends Chapter 19, Article 7, Section 19-53, of the Hawaii County Code, relating to real property valuation for tax purposes. FC - 6/4/84 FC -4,62 - the Subcor,7nittee on ReaZ Property Tax concurs with the intent of the BiZZ and recommends that the CounciZ approve the report and forward it to the HSA C ReaZ Property Tax Committee - 6/20/84 BILL NO. 1097 COUNTY OF HAWAII - STATE OF HAWAII ORDINANCE NO. A BILL FOR AN ORDINANCE TO AMEND CHAPTER 19, ARTICLE 7, SECTION 19-53, OF THE HAWAII COUNTY CODE RELATING TO REAL PROPERTY VALUATION FOR TAX PURPOSES. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Purpose. The purpose of this ordinance is to amend Section 19-53 by creating a new Homeowner class of property which shall consist of all property that have been granted home exemptions. All such property will first be part of the other eight classes of property and be assessed in such classes. Transfer to the Homeowner class will be made for rate setting and billing purposes only. SECTION 2. Chapter 19, Article 7, Section 19-53, of the Hawaii County Code, as amended, is hereby amended 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 58 or f 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, and 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 thoughout 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. (d) (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, -2- (E) Commercial, (F) Industrial, (G) Agricultural, and (H) Conservation., (2) In addition to the land classification stated in section 19-53(d)(1) of this chapter, land shall be classified for tax rate setting purposes as 'Homeowner.' Property shall be classified as Homeowner for the tax year for which it was granted the Homeowner exemption as provided in this chapter and shall continue to be classified as 'Homeowner' as long as the property continues to qualify for the Homeowner's exemption. The Homeowner class is a classification for tax rate setting purposes only and is not a classification for purposes of valuation. [(2)](3) In assigning land to one of the [general classes] classes referred to in section 19-53(d)(1), 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 -3- the State, and such other factors which influence highest and best use. [(3)](4) 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 Improved Residential. [(4)](5) '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: (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 sigle or a two-family residential building per acre, or -4- (C) land which is sufficiently developed with necessary land improvements to support a use density of at least a single or a two-family residential building per acre. [(5)](6) 'Unimproved Residential' shall mean all residential class lands not classified as 'Improved Residential.' (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 land which are classified and used for agriculture, whether such lands are dedicated pursuant to Section 58 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 knowledge of land values. (2) A deferred or roll -back tax shall be improved on the owners of agricultural lands assessed according to their agricultural use as provided in OM 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 his land as provided in Section 58 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 deferrea 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 his 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 section (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 any owner or lessee which has not petitioned for a 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 is initiated by any governmental agency or instrumentality. The deferred or roll -back tax shall be based on the -7- difference in assessed value between the highest and best use and agricultural use of the land at the tax rate applicable for the respective years. (A) Where the owner subdivides his land into parcels of five acres or less, the deferred tax shall be due and payable within sixty days of such conversion, subject to a ten per cent per annum penalty. (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 per cent per annum penalty. Any other provision 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 or 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 58 or not, the tax upon such unusable or unsuitable land shall be deferred and shall be payable upon conversion a provided under this section. (g) 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 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: (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 satisfactorily comply with the particular urban redevelopment, rehabilitation or conservation act provision, or -10- (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 state 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 or repairs to the buildings were made and satisfactorily comply with the particular code provision." SECTION 3. Material to be repealed is bracketed. New material is underscored. In printing this ordinance, the underscoring need not be included. SECTION 4. In the event that any portion of the ordinance is declared invalid, such invalidity shall not affect the other parts of this ordinance. SECTION 5. This ordinance shall take effect upon the adoption of this language by three counties. Hilo, Hawaii Date of Introduction: Date of lst Reading: Date of 2nd Reading: Effective Date: -11- t JUSTIFICATION Bill No.: 1097 Title: Relating to the Creation of a Homeowner Class of Property Purpose: The purpose of Bill No. 1097 is to create a homeowners class for real property tax rate setting purposes. All properties granted home exemptions would be placed in this homeowners class and taxed at the rate set for the class. The homeowner class is a category for tax rate setting purposes only and is not a classification for purposes of valuation. The Hawaii State Constitution requires that the policies and methods of assessing real property taxes shall be uniform throughout the State. It does not, however, require uniformity of tax rates. With a homeowner class, each county could provide tax relief for homeowners through the rate setting mechanism. A majority of the counties must approve the creation of such a homeowners class before a differential tax rate can be established in each county.