(a) Definitions.
As used in this Section:
"Agricultural products"
means products derived from animals or vegetation, including:
the cultivation of floriculture, horticulture, viticulture, and aquaculture
products; forestry products; tree farm products; nut products; coffee
products; dairy products; poultry products; bee products; livestock
or animals raised by grazing and pasturing (except horses); and any
other farm, agronomic, or plantation products, excluding products
(e.g., hay) derived from guinea grass, leucaena (koa haole), panicum,
pangola, kikuyu, napier grass, and similar forage crops.
"Agricultural use"
means the active use of the land for the production of agricultural
products with the primary purpose of obtaining a monetary profit from
income received from the sales of agricultural products. Agricultural
use excludes selling, refining, or distributing agricultural products
when the vegetation from which such products are derived was not grown
on the parcel and when the animals from which such products are derived
were not raised on the parcel. Agricultural use includes meat packing
or processing operations occurring on the same parcel the animals
were raised on, provided that the packing or processing structure
will be taxed based on its fair market value.
"Dedicated land"
means a parcel or a portion thereof that is in dedicated
use pursuant to a petition approved by the Director. To qualify as
dedicated land, a parcel: (a) may not be designated as Urban District
by the State Land Use Commission, unless pursuant to the County Comprehensive
Zoning Ordinance the Use District of the parcel would allow the specific
dedicated use; and (b) shall be five acres or greater, provided that
a parcel may be less than five acres if it is unimproved and if 100%
of the parcel is dedicated at the time of petition and throughout
the dedication period, and provided further that an improvement directly
ancillary to the specific dedicated use is permissible.
"Dedicated use"
means a petitioned agricultural use that was approved by
the Director.
"Disqualifying change"
means, for dedicated land: (a) any reclassification of the
parcel by the State Land Use Commission, (b) a change in the County
zoning district, (c) a subdivision or creation of a condominium property
regime (CPR) of the parcel initiated or authorized by any fee simple
owner of the real property, or (d) the addition of a dwelling or commercial
structure to an unimproved dedicated parcel of less than five acres.
"Dwelling"
means a building or portion thereof designed or used exclusively
for residential occupancy and having all necessary facilities for
permanent residency such as living, sleeping, cooking, eating, and
sanitation. Dwelling does not include farm worker housing.
"Farm worker housing"
means, as provided in Kaua'i County Code 1987, as amended, Section
8-8.6, the use of a building or portion thereof designed and used exclusively for the housing of farm workers who actively and currently farm on the land upon which the housing is situated. Farm worker housing may also be used to house the immediate family members of the respective farm worker.
"Owner"
means the person or persons who file a petition pursuant
to this Article and is at least one of the fee simple owners of the
real property, provided that the owner may file a petition on behalf
of a tenant.
"Parcel"
means a subdivided lot or an "apartment" created by the submission
of land to a condominium property regime pursuant to Hawai'i Revised
Statutes Chapter 514A or 514B.
"Petition"
means a petition to dedicate a parcel or a portion thereof
for a specific agricultural use.
"Residential homesite area"
means the portion of a parcel used for residential purposes,
including land upon which a dwelling or driveway is located and land
designated to be the yard space. A residential homesite area may not
be dedicated for agricultural use.
"Substantial and continuous dedicated use"
means no less than 75% of the area of the dedicated land
is in active, continuous, and revenue-generating petitioned use at
the time of petition and dedicated use throughout the five-year dedication
period, provided that for dedicated parcels of less than five acres
100% of the dedicated land shall be in active, continuous, and revenue-generating
petitioned use at the time of petition and dedicated use throughout
the five-year dedication period. Substantial and continuous dedicated
use includes necessary and customary growth or fallowing periods.
(b) Petition
and Agricultural Plan. An owner may petition to dedicate a parcel
or a portion thereof for a specific agricultural use. Petitions shall
be filed with the Director and supported by an accompanying agricultural
plan. The Director shall prescribe the form of the petition and agricultural
plan. The agricultural plan shall include the following, provided
that evidence that an active certification for the same petitioned
use and proposed dedicated area has been granted by the United States
Department of Agriculture (USDA) Good Agricultural Practices (GAP)
individual or GroupGAP Audit Verification Program may serve to fulfill
the requirements of (b)(3) and (b)(6):
(2) A description and map showing the total acreage of the parcel, the
acreage and location of each specific petitioned use, and the acreage
and location of the residential homesite area, if any.
(3) A marketing or management plan and a timetable for implementation.
(4) A declaration that the land shall be used for the petitioned use
stated in the petition for the duration of the dedication period.
(5) A declaration that the owner grants the Director a right-of-entry
to the parcel to physically inspect the land for evidence of the:
(A) Petitioned use, upon petition filing and prior to approval or disapproval
of a dedication; and
(B) Dedicated use, upon approval of a dedication and for the duration
of the dedication period.
(6) Evidence to verify that the land is in agricultural use, provided
that if any of the following is not available the owner shall submit
a written explanation:
(A) A valid, current, State of Hawai'i general excise tax license issued
for agricultural purposes.
(B) Documentation showing that the land receives County Department of
Water agricultural water rates.
(C) A copy of the Schedule F form filed with the U.S. Internal Revenue
Service in the immediately preceding year.
(D) A copy of any claim for exemption from federal income taxation filed
under U.S. Internal Revenue Code Section 6427(c).
(E) Sales receipts generated from the activities listed under the definition
of the term "agricultural use."
(c) Petition
Process. Petitions shall be filed by July 1 of any calendar year.
The Director's review shall proceed as follows:
(1) Following a petition filing, the Director shall determine whether
the land is reasonably well suited for the petitioned use and whether
the petition has sufficiently demonstrated potential success for the
petitioned use, by considering factors including: land size, use of
surrounding similar land, economic feasibility, State and County land
use restrictions, and conformity with the County General Plan and
applicable Community Plan.
(2) The Director shall approve the portion of the petition that satisfies
all of the following:
(A) The land is reasonably well suited for the petitioned use.
(B) The petition has sufficiently demonstrated potential success for
the petitioned use.
(C) The petition has met all requirements of this Section and all additional
requirements of any rules adopted by the Director pursuant to HRS
Chapter 91.
(3) The notice of assessment shall serve as notice of full or partial approval or disapproval of the petition. If approved, the reduced assessment pursuant to Section
5A-9.1(d) shall be reflected on the real property tax bill due on August 20 of the following calendar year.
(d) Dedication Period and Assessment. All approved petitions shall be for a dedication period of five years. Dedicated land shall be assessed at 5% of its fair market value. For government-owned land, if the Director receives a lease, license, or permit agreement restricted to a specific agricultural use, the applicable land shall be assessed at 5% of its fair market value during the term of the tenancy, provided that this assessment shall cease if the lessee, licensee, or permittee experiences any of the occurrences set forth in Section
5A-9.1(f).
(e) Right-of-Entry and Evidence of Agricultural Use on Request. In addition to the right-of-entry granted by the owner at the time of petition submission pursuant to Section
5A-9.1(b), at any time during the dedication period the Director may require an owner to submit evidence to verify that the land is in substantial and continuous dedicated use, including but not limited to the materials listed in Section
5A-9.1(b)(6).
(f) Dedication
Cancelation. The following provisions apply to dedication cancelation:
(1) Whenever a dedication is canceled, the Director shall mail to the
owner a notice of cancelation that includes the reason for the cancelation
and the effective date of the cancelation, which shall be on the following
September 30.
(2) The Director shall cancel a dedication if any of the following occur:
(A) The Director finds that the dedicated land is not in substantial
and continuous dedicated use.
(C) The owner requests that the dedication be canceled.
(D) 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 cancelation shall be effective only as to the portion taken.
(E) Any conveyance or change in ownership subject to state conveyance
tax pursuant to Hawai'i Revised Statutes Chapter 247 during the dedication
period.
(F) The property undergoes a disqualifying change.
(3) Notwithstanding any provision to the contrary in this Section, if the Director adopts rules pursuant to HRS Chapter 91, those rules may amend this Subsection
5A-9.1(f), including adding additional bases for cancelation and providing the Director discretion not to cancel a dedication, including but not limited to if the dedicated land is not in substantial and continuous dedicated use.
(g) Appeal. An owner may appeal any petition that has been fully or partially disapproved, or any dedication cancelation, to the Board of Review as provided in Article 12. A petition that has been fully or partially disapproved as stated in the annual notice of assessment or the corrected notice of assessment may be appealed pursuant to Section
5A-12.1. A dedication cancelation reflected in the annual notice of assessment or the corrected notice of assessment may be appealed pursuant to Section
5A-12.1.
(h) General
Provisions. The following apply to this Section:
(1) The Director may adopt any rules pursuant to HRS Chapter 91 that
are consistent with the provisions of this Section.
(2) Provisions of this Section and any corresponding rules adopted by
the Director pursuant to HRS Chapter 91 are subject to change and
may be disallowed or modified as provided by law.
(3) When submitting materials to the Director, an owner shall clearly
identify any confidential commercial or financial information, including
income statements or tax statements, that the owner believes is not
subject to disclosure as a government record.
(Ord. No. 394, July 1,
1981; Ord. No. 457, April 25, 1984; Ord. No. 464, August 6, 1984; Ord.
No. 520, December 9, 1987; Ord. No. 679, March 28, 1995; Ord. No. 741, September 24, 1999; Ord. No. 781, December
10, 2001; Ord. No. 822, December 30, 2004; Ord. No. 915, November 16, 2011; Ord. No. 916, December 1, 2011; Ord. No. 920, December
14, 2011; Ord. No. 932, September 5, 2012; Ord. No. 1036, July 13, 2018; Ord. No. 1113, May 19, 2022; Ord. No. 1132, September
26, 2022)
(a) The
following definitions shall apply for purposes of this Section:
"Cost of development"
means the actual or estimated costs to improve the land into
an operating golf course.
"Golf course"
means property that has been developed for the sport of golf,
including its related and incidental activities.
"Golf course use"
means the actual use of property for the sport of golf and
its related and incidental activities.
"Sales price"
means the sale price of a property operated and used as a
golf course and land acquired for golf course use.
(b) Land
operated and used as a golf course shall be assessed for property
tax purposes on the following basis:
(1) The value to be assessed by the Director shall be on the basis of
its actual use as a golf course rather than on the valuation based
on the highest and best use of the land.
(2) In determining the value of actual use, the factors to be considered
shall include, among others, rental income, cost of development, and
sales price.
(c) In
order to qualify in having land assessed in valuation as a golf course,
the owner of any parcel of land desiring or presently using his or
her land for a golf course shall, as a condition precedent, qualify
as follows:
(1) Dedication of Land.
(A) The owner of any parcel of land for a golf course shall petition
the Director and declare in his or her petition that he or she will
dedicate his or her parcel of land for a golf course.
(B) The approval by the Director of the petition to dedicate the land
shall constitute a forfeiture on the part of the owner of any right
to change the use of the land for a minimum period of 10 years, automatically
renewable indefinitely, subject to cancellation by either the owner
or the Director upon five years' notice at any time.
(C) The failure of the owner to observe the restrictions on the use of
his or her land to that of a golf course shall cancel the special
tax assessment privilege retroactive to the date of the dedication
but not more than 10 years prior to the tax year in which the exemption
is disallowed; 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 6% a year penalty from the respective
dates that these payments would have been due. Failure to observe
the restrictions on the use means failure for a period of over 12
consecutive months to use the land in that manner requested in the
petition as a golf course by the overt act of changing the use for
any period. Nothing in this Paragraph shall preclude the County from
pursuing any other remedy to enforce the covenant on the use of the
land as a golf course.
(D) The Director shall prescribe the form of the petition. The petition
shall be filed by July 1st of any calendar year and shall be approved
or disapproved by September 15th of such year. If approved, the assessment
based upon the use requested in the dedication shall be effective
on October 1st.
(E) The owner may appeal any disapproved petition as in the case of an
appeal from an assessment.
(F) The term "owner," as used in this Section, includes lessees of real
property whose lease term extends at least 10 years effective from
the date of the petition.
(G) The amount of additional taxes due and owing where the owner has
failed to observe the restriction on the use shall attach to the property
as a paramount lien in favor of the County as provided in Sec. 5A-5.1.
(2) Covenant Not to Engage in Discrimination. The owner shall covenant
in his or her petition with the Director that he or she will not discriminate
against any individual in the use of the golf course facilities because
of the individual's race, sex, religion, color or ancestry.
(Ord. No. 394, July 1,
1981; Ord. No. 521, December 9, 1987; Ord. No. 920, December 14, 2011; Ord. No. 1128, August 22, 2022)
(Ord. No. 571, July 16,
1990; Ord. No. 591, September 17, 1991; Ord. No. 600, December 20, 1991; Ord. No. 645, December 17, 1993; Ord. No. 680, March 28, 1995; Ord. No. 780, December
10, 2001; Ord. No. 806, October 1, 2003; Ord.
No. 820, November 8, 2004; Ord. No. 826, May 13, 2005; Ord. No. 835, October 7, 2005; Ord. No. 915, November
16, 2011; Ord. No. 920, December 14, 2011; Ord. No. 953, September 4, 2013)
(Ord. No. 394, July 1,
1981; Ord. No. 637, October 14, 1993; Ord. No. 920, December 14, 2011; Ord. No. 953, September 4, 2013)