Agriculture; State Agricultural Land Protection Program
Establishes the state agricultural land protection program. (SD1)
TWENTY-SECOND LEGISLATURE, 2004
STATE OF HAWAII
A BILL FOR AN ACT
relating to Agriculture.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
Section 1. The legislature finds that article XI, section 3 of the Hawaii State Constitution requires the State to conserve and protect agricultural lands and assure the long-term availability of agriculturally suitable lands. These lands are critical to the long-term viability of agriculture as a major export industry and as a means to increase Hawaii's self-sufficiency and diversification in agriculture.
The purpose of this Act is to establish a state agricultural land protection program for the voluntary acquisition of agricultural easements on lands identified as important agricultural land to the State.
SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
STATE AGRICULTURAL LAND PROTECTION PROGRAM
§ -1 Purpose. The legislature finds that the quality of life of the people of Hawaii is dependent in many ways upon the vitality and viability of the agricultural industry. The sustainability of agriculture in Hawaii will depend on factors related to agricultural business viability and affordable access to productive agricultural lands. The State has a compelling interest in ensuring a strategic agricultural land base that is affordable to farmers and the industry as a whole for current and future agricultural entrepreneurs.
The voluntary acquisition of easements on lands identified as important agricultural lands to the State that restrict use of the land to agricultural use is an important tool in the State’s efforts to ensure that agricultural land remains affordable to farmers and that the State’s important agricultural lands are protected for long-term agricultural use. Thus, the legislature finds and declares that the use of moneys for the acquisition of agricultural easements on important agricultural lands to the State is in the public interest and will promote the public health, safety, and general welfare of the people of this State.
§ -2 Agricultural land protection program. (a) The chairperson of the board of agriculture shall establish a program to assist the State in the acquisition of agricultural easements as defined in section 198-1, for land identified as important agricultural land to the State pursuant to article XI, section 3 of the Hawaii State Constitution. The chairperson may from funds appropriated to carry out the provisions of this chapter or received from other sources, pay any owner of agricultural land identified as important agricultural land to the State and as approved by the agricultural land protection board, an amount as is determined to be equitable in consideration of the benefits to the public, but not to exceed the difference between the fair market value of the land and the fair market value of the land restricted to agricultural purposes.
(b) Title to the agricultural easement shall be held in the name of the State; provided, that the county in which that land is located and which provides assistance or a portion of the funds required for the purchase, may hold title to the land jointly with the State.
(c) As used in this chapter, unless the context otherwise requires "Department" means the department of agriculture.
§ -3 Agricultural land protection board. (a) There is established, within the department for administrative purposes, the agricultural land protection board consisting of five members appointed by the governor as provided in section 26-34. Two of the members shall be apppointed from a list of nominees submitted by the speaker of the house of representatives and two shall be appointed from a list of nominees submitted by the president of the senate. The members of the agricultural land protection board shall include at a minimum one farmer, and shall include but not be limited to members with expertise in agriculture, agricultural economics, and real property appraisal.
(b) The members of the agricultural land protection board shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.
(c) The agricultural land protection board shall evaluate and accept proposals for the acquisition of agricultural easements. In so evaluating, the board shall consider at a minimum the following:
(1) The factors which led to the land’s identification as important agricultural land pursuant to article XI, section 3 of the Hawaii State Constitution;
(2) The suitability of the land for agricultural use, based on soil classification and other criteria, such as those criteria determined by the Agricultural Lands of Importance to the State of Hawaii (ALISH) classification system adopted by the board of agriculture on January 28, 1977, or similar agricultural productivity rating systems;
(3) The fair market value of the land compared with the fair market value of the land when used for agricultural purposes as determined by independent appraisals;
(4) The degree to which the acquisition would result in the protection of a critical mass or contiguous blocks of agriculturally productive land; and
(5) The degree to which the acquisition would serve to sustain the agricultural potential of the State.
§ -4 Rules and procedures. The board of agriculture shall adopt rules pursuant to chapter 91 necessary for the purposes of this chapter. The rules shall include but not be limited to criteria and procedures for:
(1) Evaluation and selection criteria for the acquisition of agricultural easements on important agricultural land;
(2) Acquisition of agricultural easements;
(3) Guidelines for county programs that would be eligible for state matching funds;
(4) Management of easements by the State, counties, or other non-profit entities;
(5) Monitoring and evaluation of the agricultural land protection program; and
(6) Administration of the agricultural land protection fund.
§ -5 State matching of county agricultural land protection purchases; guidelines. The board of agriculture shall adopt guidelines and procedures for county purchases of agricultural easements that are matched by state agricultural land protection funds. State funds requested as a match for county or other sources of funding shall only be used by entities participating in an agricultural land protection program adopted by each county that meets these guidelines.
§ -6 Funding for acquisition; dedicated funding source. The purchase of agricultural easements shall be financed by funds from state, federal, or private grants and appropriations, any funds received pursuant to section -9, and by . Funds collected from the shall be deposited into the state agricultural land protection fund established under section -10, and shall be used solely for the acquisition of agricultural easements on lands identified as important agricultural lands of the State.
§ -7 Eligibility for tax incentives. A landowner who sells or donates an agricultural easement on important agricultural lands to the State or counties pursuant to this chapter, shall be eligible for tax incentives enacted to promote the protection of important agricultural land, to the extent allowable. An agricultural business with agricultural operations on important agricultural lands with an agricultural easement that is acquired pursuant to this chapter shall be eligible for tax incentives enacted to promote long-term agricultural use of important agricultural lands.
§ -8 Use of land for which easement acquired. Uses on lands subject to an agricultural easement acquired pursuant to this chapter shall be restricted to agricultural uses, and normal agricultural operations including but not limited to the sale of farm products produced on the land with the easement.
§ -9 Termination of easement. (a) It is the intent of the legislature that the agricultural easement acquired pursuant to this chapter be held by the State in perpetuity. If circumstances have changed and it is determined that farming is no longer feasible on the land under easement, then the agricultural easement may be terminated only in the manner and at the time specified in this section. Notwithstanding any other law to the contrary, any agricultural easement acquired pursuant to this chapter with matching funds from the federal farm and ranch lands protection program pursuant to Title 7 Code of Federal Regulations Part 1491, as amended, shall be held by the State in perpetuity.
(b) At any time after thirty years from the date of acquisition of an agricultural easement, the landowner may request that the easement be reviewed for possible termination. Upon a request for review of an agricultural easement for termination, an inquiry shall be conducted by the agricultural land protection board to determine whether conditions on the land with the easement have changed so significantly that agricultural production is no longer viable and and it has become impossible to fulfill the easement’s purposes. The inquiry shall be concluded and a decision reached by the board within 180 days after the request for termination, and shall include:
(1) An on-site inspection of the land with the agricultural easement; and
(2) A public hearing conducted by the board within the county in which the land with the agricultural easement is situated after adequate public notice.
(c) An agricultural easement may be terminated only with the approval of the governing body of the county in which the land with the easement is situated. In deciding whether to approve the request for termination, the county governing body shall receive the recommendations of farming organizations on the island on which the land with the easement is situated and the person or agency responsible for administering the county’s agricultural land protection program, if one is established. The decision of the county governing body shall be made after the public hearing required in paragraph (b). The county governing body shall notify the agricultural land protection board of its decision within thirty days after the conclusion of the public hearing required in paragraph (b).
(d) Upon the affirmative vote of a majority of the board, and upon the approval of the chairperson of the board of agriculture and the state comptroller, the request for termination shall be approved, and the landowner shall be notified.
(e) If the request for termination is approved, an appraisal of the land with the easement shall be ordered by the agricultural land protection board at the expense of the landowner requesting termination of the agricultural easement. No more than one hundred eighty days following the appraisal, the landowner may repurchase the agricultural easement by paying the difference between the fair market value and the agricultural value of the subject land, as determined by the appraisal, to the board. For purposes of this subsection, the agricultural value is the price as of the valuation date which a vendor, willing but not obligated to sell, would accept, and which a purchaser, willing but not obligated to buy, would pay for comparable land that is restricted to agricultural use.
(f) In the case of the termination of an agricultural easement that was originally acquired with matching funds, the board shall deposit the state portion of the repurchase payment received under subsection (e) into the agricultural land protection fund. The state portion of the repurchase payment shall be the percentage of the repurchase payment that is equal to the percentage of the original easement purchase price contributed by the State. The board shall also distribute to the contributing county the portion of the repurchase payment that is equal to the percentage of the original easement purchase price contributed by the county. The county shall deposit these funds in a county special account established solely for the purchase of agricultural easements.
(g) If any of the funds deposited in the county's special account pursuant to this section have not been expended or committed within three years from the date of deposit into the special account, the county collector shall remit those funds to the state comptroller for deposit in the state agricultural land protection fund.
(h) If the request for termination of the agricultural easement is denied, or if the landowner fails to repurchase the easement within one hundred eighty days of the appraisal, the landowner may not again request termination of the agricultural easement until five years after his last request for termination.
§ -10 Agricultural land protection fund. (a) There is established in the state treasury the agricultural land protection fund, into which shall be deposited:
(1) Funds from state, federal, or private grants and appropriations;
(2) Funds received pursuant to section -9; and
(3) Funds from , which shall be a permanent source of funds to be restricted to program expenditures as authorized in this part.
(b) Moneys in the agricultural land protection fund shall be used to acquire agricultural easements or to provide matching funds for the acquisition of agricultural easements pursuant to this chapter, as part of the state agricultural land protection program pursuant to section -2 or county programs established for the purchase of agricultural easements.
(c) The fund shall be administered by the department. Appropriations or authorizations from the fund shall be expended by the department. The department may contract with other public or private entities for the provision of all or a portion of the services necessary for the administration and implementation of the fund. The department may set fees or charges for fund management or technical assistance provided under this section.
(d) All interest earned on the deposit or investment of the moneys in the fund shall become a part of the fund.
§ -11 Annual report. The department shall submit to the governor and the legislature, at least twenty days prior to the start of any regular session, a complete report describing the program activities, agricultural easements acquired, and fund administration pursuant to this chapter."
SECTION 3. Section 198-1, Hawaii Revised Statutes, is amended to read as follows:
"§198-1 Conservation easement defined. For the purposes of this chapter, a "conservation easement" is an interest in real property created by deed, restrictions, covenants, or conditions, the purpose of which is to:
(1) Preserve and protect land predominantly in its natural, scenic, forested, or open-space condition;
(2) Preserve and protect the structural integrity and physical appearance of cultural landscapes, resources, and sites which perpetuate indigenous native Hawaiian culture; [
(3) Preserve and protect historic properties as defined in section 6E-2, and traditional and family cemeteries[
(4) In the case of agricultural land, restrict use of the affected land to agricultural use and forbid or limit activities and uses that would adversely affect the land’s current and future use for agriculture. A conservation easement on agricultural land shall be known as an "agricultural easement" for the purposes of this chapter and other programs and incentives enacted by the legislature for agricultural easements."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon approval.