HB1797

Report Title:

Agricultural Lands; Preservation

Description:

Allows owners of agricultural lands, subject to approval of chairperson of board of agriculture and county council, to place lands in agricultural preservation districts. Provides criteria for eligibility. Restricts uses of lands in districts to agricultural uses. Exempts agricultural products produced in districts from GET, and exempts lands from property taxes.

HOUSE OF REPRESENTATIVES	H.B. NO.	1797
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE HAWAII AGRICULTURAL LAND PRESERVATION ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Statement of purpose. It is the declared policy of the State to conserve, protect and encourage improvement of agricultural lands within the State for the production of food and other agricultural products. It is also the declared policy of the State to encourage, promote, and protect farming as a valued occupation. Preservation of the State's agricultural lands is considered essential to maintaining agriculture as a viable industry and important contributor to Hawaii's economy. The legislature finds that valuable and irreplaceable agricultural lands are being lost due to nonagricultural development pressures and that, to insure the long-term utilization of the State's most viable agricultural lands, it is necessary to adopt and implement an effective program and infrastructure for permanent agricultural land preservation. The legislature finds that a need exists to create sufficient economic incentives and benefits to encourage agricultural landowners to voluntarily place viable agricultural lands under protective restrictions through the creation of and participation in agricultural preservation districts. It is the purpose and intent of the legislature to provide for the creation of permanent agricultural areas to serve the long-term needs of the agricultural community and the citizens of the State. It shall be a priority to create agricultural preservation districts in those areas located near and adjacent to designated growth zones.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII AGRICULTURAL LAND PRESERVATION ACT

§ -1 Definitions. The following terms shall have the meanings ascribed to them in this chapter:

"Agricultural lands" means farmlands and forestlands.

"Agricultural use" means all forms of farming, including agriculture, horticulture, aquaculture, silviculture, and activities devoted to the production for sale of food and other products useful to man which are grown, raised, or harvested on lands and waters.

"Chairperson" means the chairperson of the board of agriculture.

"LESA" means the land evaluation and site assessment system adopted by the department of agriculture to determine the quality of farmland and forestland and the long-term agricultural viability of such lands.

"Owner" or "owners" means the person or persons holding fee simple title to agricultural lands.

"Person" or "persons" means any individual or individuals, partnership, joint venture, corporation, association, trust, institution, cooperative enterprise, or duly established legal entity capable of holding title to real property in the State.

"Unimproved land" means the open space, the area of land under structures used for agricultural purposes, and the land under lakes, dams, ponds, streams, and irrigation ditches, but shall not include the land used for dwelling housing.

"Usable" means available and capable of being used for agricultural production activities.

§ -2 Establishment of agricultural preservation districts. (a) Any owner or owners of contiguous agricultural land containing at least ten usable acres of such lands located in the State may submit on a voluntary basis, on such forms as the chairperson prescribes, an application for establishment of an agricultural preservation district. Upon receipt of a completed application, the chairperson shall review within forty-five days the application to determine if it satisfies the criteria for eligibility established under this chapter and any rules adopted and related thereto. The chairperson, following the chairperson's review to determine eligibility, shall notify the applicant of its findings. The chairperson shall be entitled to provide assistance to potential applicants regarding the completion of necessary application forms.

(b) If an application for establishment of an agricultural preservation district satisfies the criteria for eligibility, the chairperson shall submit the application to the council for the county in which the agricultural lands are located for purposes of obtaining a recommendation. The county council, upon receipt of an application from the chairperson, shall timely notice consideration of the application at its next regularly scheduled meeting, and shall recommend in favor or against approval, and include any reasons for its decision. If the county council fails to render a decision on an application within ninety days of receipt, the application shall be deemed to be recommended for approval.

(c) The chairperson shall consider applications for establishment of agricultural preservation districts. The chairperson shall render a decision in favor or against approval of the application.

(d) An owner of agricultural land consisting of less than ten acres in the State may submit on a voluntary basis, on such forms as the chairperson prescribes, an application for expansion of an established agricultural preservation district if the application satisfies the criteria for eligibility established under this chapter and any rules adopted thereunder, as determined by the chairperson, and the agricultural land is either:

(1) Contiguous to the established agricultural preservation district; or

(2) Located in whole or part within a three-mile radius of an established agricultural preservation district.

The chairperson shall render decisions in favor or against applications for expansions of agricultural preservation districts.

(e) Upon the establishment or expansion of an agricultural preservation district, the chairperson shall provide appropriate notice and a description of the established or expanded district to the county council and the county real property taxation division for the county in which such district is located. Upon receipt of such information from the chairperson, the county real property taxation division shall provide appropriate reference in its real property records and notations on maps which are utilized and maintained that the subject agricultural lands are included in an agricultural preservation district.

§ -3 Criteria for eligibility and review. (a) In order to be considered eligible for inclusion in an agricultural preservation district, an application which qualifies under the requirements of this chapter shall satisfy the following criteria:

(1) The owner or owners seeking inclusion of real property in the district shall hold fee simple title to such property;

(2) The real property proposed for inclusion in the district shall have an agricultural zoning designation and shall not be subject to any major subdivision plan;

(3) The real property shall consist of viable and productive agricultural lands which meet the minimum LESA scoring requirements for eligibility established by the chairperson through adopted rules;

(4) The owner or owners of the real property proposed for inclusion in the district shall execute a declaration in recordable form committing to the district restrictions set forth in this chapter; and

(5) The real property proposed for inclusion in the district shall include all of the eligible real property located in the tax parcel or tax parcels subject to application, and no eligible real property shall be carved out or otherwise excluded from the application for establishment of an agricultural preservation district.

(b) In reviewing applications for establishment of an agricultural preservation district the chairperson and the county councils shall consider the following factors:

(1) The viability and productivity of the agricultural lands based on the LESA scoring system;

(2) The extent to which the agricultural lands are being actively utilized for agricultural purposes;

(3) The extent to which the long-term preservation of the agricultural lands would be consistent with land use plans adopted after public hearing at state and county levels;

(4) The potential for expansion of the district if established and compatibility with surrounding land uses;

(5) The ancillary benefit of creating additional open space adjacent to existing established and protected open space; and

(6) The socio-economic benefits derived from an agricultural and historic perspective as a result of inclusion of the agricultural lands in an agricultural preservation district.

§ -4 Agricultural preservation district restrictions. (a) The agricultural lands included in an agricultural preservation district shall be subject to the following restrictions:

(1) No rezoning or major subdivision of the real property shall be allowed;

(2) Activities conducted on the real property shall be limited to agricultural and related uses, and residential use of the real property shall be limited as follows:

(A) No more than one-half acre of land for each ten acres of usable land owned in a district or an expansion of a district, to a maximum of five acres, shall be allowed for dwelling housing; and

(B) The dwelling housing shall be limited to residential use of the owner, relatives of the owner, and persons providing permanent and seasonal farm labor services; provided however, that the chairperson, pursuant to rules, may allow, from the effective date of an initial district agreement, no more than a total of two dwellings or dwelling lots located in the agricultural preservation district to be transferred from an owner or relatives of an owner to any other person, subject to the following limitations and requirements:

(i) The owner or relative of an owner seeking to make the transfer shall establish that a hardship condition exists, as defined pursuant to the chairperson's rules, and obtain the chairperson's approval;

(ii) The dwelling or dwelling lot, after transfer, shall be used only for residential purposes; and

(iii) The transferred property shall not qualify for district benefits or benefits of easement conveyance established under this chapter; and

(C) Any transfer of real property in a district or an expansion of a district to another person shall be preceded by the execution by the transferee of a document, in recordable form and as prescribed by the chairperson, which sets forth the acreage allowed for dwelling housing and the restrictions which apply to the real property under this chapter and the rules of the chairperson.

(3) The restrictions shall be deemed covenants which run with and bind the lands in the district for a period of ten years or any extended period from the date of placement of the lands in the district.

(b) Agricultural lands included in an agricultural preservation district shall be released from such district at the expiration of ten years from the date such lands are initially placed in the district if the owner of the agricultural lands provides written notification to the chairperson of intent to withdraw such lands from the district at least six months prior to the expiration of the referenced ten-year period; otherwise, such lands shall remain in the district for additional five-year periods until such time that the owner provides prior to the expiration date of any such additional period at least six months prior written notice to the chairperson of intent to withdraw the lands from the district.

§ -5 Agricultural use protections. (a) Normal agricultural uses and activities conducted in a lawful manner are preferred and priority uses and activities in agricultural preservation districts. In order to establish and maintain a preference and priority for such normal agricultural uses and activities and avert and negate complaints arising from normal noise, dust, manure, and other odors, the use of agricultural chemicals and nighttime farm operations, land use adjacent to agricultural preservation districts shall be subject to the following restrictions:

(1) For any new subdivision development located in whole or in part within three hundred feet of the boundary of an agricultural preservation district, the owner of the development shall provide in the deed restrictions and any leases or agreements of sale for any residential lot or dwelling unit the following notice:

"AGRICULTURAL PRESERVATION DISTRICT

This property is located in the vicinity of an established Agricultural Preservation District in which normal agricultural uses and activities have been afforded the highest priority use status. It can be anticipated that such agricultural uses and activities may now or in the future involve noise, dust, manure, and other odors, the use of agricultural chemicals and nighttime farm operations. The use and enjoyment of this property is expressly conditioned on acceptance of any annoyance or inconvenience which may result from such normal agricultural uses and activities."

(2) For any new subdivision development located in whole or in part within fifty feet of the boundary of an agricultural preservation district, no improvement requiring an occupancy approval shall be constructed within fifty feet of the boundary of the agricultural preservation district.

(b) Normal agricultural uses and activities conducted in accordance with good husbandry and best management practices in agricultural preservation districts shall be deemed protected actions and not subject to any claim or complaint of nuisance, including any such claims under any existing or future county or municipal code or ordinance. In the event a formal complaint alleging nuisance related to normal agricultural uses and activities is filed against an owner of lands located in an agricultural preservation district, such owner, upon prevailing in any such action, shall be entitled to recover reasonably incurred costs and expenses related to the defense of any such action, including reasonable attorney's fees.

§ -6 Agricultural preservation district benefits. (a) Any owner of real property located in an agricultural preservation district shall be entitled to the following benefits:

(1) Chapter 237, relating to general excise taxes, shall not apply to amounts received from the sale of agricultural products derived from such agricultural lands;

(2) Real property taxes imposed by the counties shall not apply to the agricultural lands within agricultural preservation districts; and

(3) Tangible personal property used in the production for sale of agricultural products shall be exempt from the general excise tax imposed by chapter 237.

(b) The director of taxation and the county real property taxation divisions shall coordinate, assist, and cooperate with the chairperson to fully effectuate the applicable provisions of this chapter.

§ -7 Rules. The chairperson may adopt rules under chapter 91 to implement this chapter."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2002-2003, to carry out the purposes of this Act.

The sum appropriated shall be expended by the department of agriculture for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2002.

INTRODUCED BY:	_____________________________