Council Bills and Resolutions Text(Back | View Word Processing version to see any attachments)
RELATING TO REAL PROPERTY TAXATION.
BE IT ORDAINED by the People of the City and County of Honolulu:
SECTION 1. Purpose. The purpose of this ordinance is to amend certain provisions
of the Revised Ordinances of Honolulu 1990, as amended, relating to real property
taxation.
SECTION 2. Section 8-7.3, Revised Ordinances of Honolulu 1990, as amended, (“Dedication of
lands for agricultural use”), is amended to read as follows:
““ Sec. 87.3 Dedication of lands for agricultural use. (a) Lands that have been dedicated by the property owner for a period of 1 year, 5 years, or 10 years for a specific agricultural use shall be classified and assessed for real property tax purposes at a percentage of the land’s fair market value as established in subdivision (2) and be subject to the following: (1) The land dedicated must be substantially and continuously used for the business of raising and producing agricultural products in their natural state. (2) Dedicated land shall be assessed as follows: (A) For land dedicated for a period of 1 year, the land shall be assessed at 10 percent of its fair market value. (B) For land dedicated for a period of 5 years, the land shall be assessed at 5 percent of its fair market value.
(C) For land dedicated for a period of 10 years, the land shall be
assessed at 1 percent of its fair market value.
(D) That portion of dedicated land that is not used for a specific agricultural
use shall be assessed at 100 percent of its fair market value. (3) The land dedicated shall be substantially and continuously in a use specified under subdivision (1) for the duration of the dedication period.
(b) If any owner desires to dedicate said person's land for a specific agricultural
use and to have the owner's land assessed for real property tax purposes
at the applicable percentage of the land’s fair market value, the owner shall
so petition the director and declare in the owner's petition that if the
owner's petition is approved the owner will use the owner's land for this
specific agricultural purpose. The petition shall be accompanied by an agricultural plan which
may include:
(1) A description of the specific agricultural use;
(2) A tax map identification of the owner’s land;
(4) A description of the acreage to be utilized for the specific agricultural use;
(5) A timetable for implementation of the plan; and (6)](3) A copy of a valid State of Hawaii general excise tax license or a copy of Internal Revenue Service Schedule F (Form 1040) for the immediately preceding tax year. The director shall prescribe the form of the agricultural plan. (c) Upon receipt of a petition as provided in subsection (b), the director shall make a finding of fact as to whether the land in the petition area is reasonably well suited for the designated specific agricultural 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. The director shall also make a finding of fact as to whether the designated specific agricultural use conforms to the development plan for the area. The director shall also make a finding of fact as to the economic feasibility of the designated specific agricultural use of the land. If all three findings are favorable, the director shall approve the petition and declare the land to be dedicated for the designated specific agricultural use. For 5- and 10-year dedications, in order to place prospective buyers on notice of the dedication, the petitioner shall within 30 days of notice of approval record the dedication in accordance with the procedures of the bureau of conveyances and/or the land court, as is appropriate. Upon the expiration of the dedication and receipt of the notice of cancellation from the director, the owner shall record the notice of cancellation with the bureau of conveyances and/or the land court, as is appropriate.
(d) 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 the owner's land to a use other than agricultural for a
minimum period of 1 year, 5 years, or 10 years, as the case
may be.
(e) The director shall prescribe the form of the petition. The petition shall be
filed with the director by September 1st of any calendar year and shall
be approved or disapproved by October 31. If approved, the assessment based upon
the use requested in the dedication shall be effective on July 1st of
the following tax year.
(f) The owner may appeal any disapproved petition as in the case of an
appeal from assessment.
[(g) The owner of any parcel of land dedicated for a specific agricultural use
shall, annually, no later than September 1st following each tax year of the
dedication, submit a report to the director which may include but not be
limited to:
(1) An updated description of the agricultural use of the land during the immediately
preceding and current tax years; (2) A copy of all state general excise tax returns for the immediately preceding tax year concerning activities conducted on the parcel of land dedicated for a specific agricultural use; (3) A description of the acreage and percentage of the area of the parcel of land utilized for the specified agricultural use during the immediately preceding and current tax years; and
(4) A declaration, if applicable, that the owner will keep the land in substantial
and continuous agricultural use through the remaining period of the dedication.
Any part of the report containing confidential commercial or financial information, including income
statements or tax statements, shall be clearly labelled by the owner as such
and shall not be open to inspection by the public.
The director shall prescribe the form of the report. The report may be
rejected by the director in the event the report is incomplete or contains
erroneous or incorrect information. The report shall be accepted or rejected by the
director by October 31 of the year in which it is submitted.
(h)](g) If land dedicated for agricultural use undergoes a change in land use classification
which is not a result of a petition by any property owner or
lessee such that the owner's land which was initially classified in the agricultural
or preservation zoning district is placed within a zoning district other than agricultural
or preservation, the dedication shall continue unless the owner files a written notice
of cancellation with the director within 60 days of the change. Such cancellation
shall be effective on the next July 1st which is at least nine
months after the filing.
[(i)](h) In the event that a dedication is cancelled or expires, the director shall
execute and record an expiration or cancellation of the dedication. Any required fees
and charges associated with the recordation shall be charged to the property owner.
[(j)](i) In the event the director, upon inspection, finds that dedicated agricultural land is
not in substantial and continuous agricultural use, [that the property owner failed to
file the required report in a timely manner, or that the required report
must be rejected,] the owner shall be notified of the finding and the
owner shall have 60 days to address the finding. In the event the
owner fails to satisfactorily address the finding, the dedication shall be canceled and
the property owner shall be subject to a rollback tax and penalty. The
rollback tax shall be the difference between the taxes owed for the land
at 100 percent of the land's assessed value at the fair market value
and the taxes actually imposed on the land, retroactive to the date of
the dedication. The penalty shall be 10 percent of the rollback tax per
annum. The rollback tax and penalty shall be a paramount lien upon the
property.
[(k)](j) The owner may appeal any [rejection of the report,] cancellation of the dedication[,]
or imposition of a rollback tax and penalty in the same manner as
an appeal from an assessment.
[(l)](k) Notwithstanding any provision in this section to the contrary, the occurrence of any
of the following events shall cause the dedication to be canceled without the
imposition of any rollback taxes or penalties whatsoever.
(1) The death of any owner; or
(2) Events beyond the owner’s control make it unfeasible to continue the agricultural use
of the dedicated property, including, but not limited to:
(A) A serious or debilitating long-term illness or injury suffered by the owner;
(B) A natural disaster such as a windstorm, flood, disease, or infestation that destroys
the crop or livestock on the dedicated parcel; or
(C) The taking of the dedicated parcel or any portion thereof by a governmental
entity, provided that where only a portion of the parcel is taken, the
cancellation shall be effective only as to the portion taken.
[(m)](l) Notwithstanding any provisions in this section to the contrary, for 5- and 10-year
dedications, the director may grant an owner a grace period which may be
granted subject to the following conditions:
(1) A grace period may be granted only if one of the following events
occurs:
(A) A bank or other lending institution acquires possession of a property as a
result of a default of a mortgage on the property; or
(B) The agricultural use of a dedicated parcel is terminated because a lessee has
abandoned or terminated a lease prior to the end of the term of
the lease, the owner of the parcel has not found another lessee, and
the lease has a term of five years or longer.
(2) During the grace period, the owner is not required to use the land
for the business of raising and producing agricultural products.
(3) At the end of the grace period, the owner shall use the land
for the business of raising and producing agricultural products for the entire remaining
period of the owner’s dedication. The grace period shall not be counted in
determining the owner’s compliance with the dedication.
(4) The grace period shall not exceed two years.
(5) During the grace period, the land shall be assessed at 100 percent of
market value.
(6) No grace period shall be granted for a parcel of land within 5
years following the expiration of a previous grace period.
[(n)][m] As used in this section:
"Agricultural products" include floricultural, horticultural, viticultural, aquacultural, forestry, nut, coffee, dairy, livestock, poultry,
bee, animal, tree farm, animals raised by grazing and pasturing, and any other
farm, agronomic, or plantation products.
[“Owner”] For 1-year dedications, “owner” includes a lessee of real property [whose lease
term extends at least through the time period of the dedication from the
date of the petition].
For 5-year and 10-year dedications, “owner” includes a lessee of real property whose
lease term extends at least through the time period of the dedication. "Substantial and continuous agricultural use" means no less than 75 percent of the area of the dedicated land is in active, continuous and revenue-generating agricultural use throughout the subject time period. For lands dedicated for a period of 5 years or 10 years, substantial and continuous agricultural use shall include necessary and customary fallowing periods.
“Tree farm property” and “tree farm” mean land classified as tree farm property
under HRS Chapter 186.” SECTON 4. This ordinance shall take effect upon its approval. INTRODUCED BY:
APPROVED AS TO FORM AND LEGALITY:
APPROVED this day of , 2004.
(OCS/072604/ct)
| |||||||