Report Title:

Land use classifications



Sets up a process for transfer of development rights and creates a new land classification called rural legacy area.



S.B. NO.



S.D. 1
















     SECTION 1.  Purpose.  The purpose of this Bill is to address the rapid and increasing loss of rural lands and to protect our scenic, historic, recreational, cultural, natural and archaeological resources that tourism depends on.  As a consequence to this situation, the Legislature is currently reviewing other bills addressing the preservation of lands on the north shore owned by Kuilima Resort and the Galbraith Estate and the Ka`iwi Coast on the south shore of O`ahu. 

     The purpose of this Bill is to provide an alternative to preserving valuable lands through creating a new classification referred to as a rural legacy area which would be the “sending” area for transfer of development rights program to a “receiving area” where the State or a county has designated for higher density to build affordable homes. 

     As part of a statewide development plan, the State land use commission would designate rural legacy areas by request from a community or by a governmental agency and higher density areas that would encourage economic and housing developments.  Landowners in the rural legacy areas would be allowed to sell their land’s development rights to a transfer development rights (TDR) bank where the State would store and sell to landowners in a receiving area designated for high density.  This would allow the State to offer compensation to landowners who are willing to retain their land classification or down zone it to conservation or preservation.

     TDR’s allows the State to raise funds to augment other resources to preserve rural lands for the public.  In an effort to promote preservation actions by governmental agencies, this measure also allows for the State to automatically amend their boundary amendments to be consistent with a county’s re-zoning of lands to conservation or preservation.

     This Bill does not replace but supplements current statutory resources that are designed to preserve lands designated as valuable lands such as tax credits to landowners or moneys for purchasing lands.

     The Legislature recognizes that TDR programs have existed since 1990's and have been used successfully in Maryland, New Jersey, Colorado and Washington.   Creating such programs for our State is just another step towards preserving our valuable resources for all to enjoy.

          SECTION 2.  Chapter 205, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:


     §205-A    Purpose.  The purpose of this part is to:

     (a)  preserve open space, scenic views, critical and sensitive areas, and natural hazard areas;

     (b)  protect lands and structures of aesthetic, architectural and historic significance;

     (c)  retain open areas in which healthful outdoor recreation can occur;

     (d) ensure that the owners of preserved, conserved or protected land may make reasonable use of their property rights by transferring their right to develop to eligible zones;

     (e) provide a mechanism whereby development rights may be reliably transferred; and

     (f) ensure that development rights are transferred to properties in areas or districts that have adequate community facilities, including transportation, to accommodate additional development.

     §205-B    Authority.  The commission shall be the authority of this part.

     §205-C    Definitions. 

     "Development Rights" mean the rights of the owner of a parcel of land, under land development regulations, to configure that parcel and the structures thereon to a particular density for residential uses or floor area ratio for nonresidential uses.  Development rights exclude the rights to the area of or height of a sign.

     "Density" or "Net Density" means the result of multiplying the net area in acres times 43,560 square feet per acre and then dividing the product by the required minimum number of square feet per dwelling unit required by the zoning ordinance for a specific use district.  "Density" or "Net Density" is expressed as dwelling units per acre or per net acre.

     "Floor Area" means the gross horizontal area of a floor of a building or structure measured from the exterior walls or from the centerline of party walls.  "Floor Area" includes the floor area of accessory buildings and structures.

     "Floor Area Ratio" means the maximum amount of floor area on a lot or parcel expressed as a proportion of the net area of the lot or parcel.

     "Net Area" means the total area of a site for residential or nonresidential development, excluding street rights-of-way and other publicly dedicated improvements, such as parks, open space, and stormwater detention and retention facilities, and easements, covenants, or deed restrictions, that prohibit the construction of building on any part of the site.  "Net area" is expressed in either acres or square feet.

     "Overlay District" means a district superimposed over one or more zoning districts or parts of districts that imposes additional requirements to those applicable for the underlying zone.

     "Receiving District" means one or more districts in which the development rights of parcels in the sending district may be used.

     "Receiving Parcel" means a parcel of land in the receiving district that is the subject of a transfer of development rights, where the owner of the parcel is receiving development rights, directly or by intermediate transfers, from a sending parcel, and on which increased density and/or intensity is allowed by reason of the transfer of development rights.

     "Sending District" means one more districts in which the development rights of parcels in the district may be designated for use in one or more receiving districts;

     "Sending Parcel" means a parcel of land in the sending district that is the subject of a transfer of development rights, where the owner of the parcel is conveying development rights of the parcel, and on which those rights so conveyed are extinguished and may not be used by reason of the transfer of development rights; and

            "Transfer of Development Rights" means the procedure prescribed by this part whereby the owner of a parcel in the sending district may convey development rights to the owner of a parcel in the receiving district or other person or entity, whereby the development rights so conveyed are extinguished on the sending parcel and may be exercised on the receiving parcel in addition to the development rights already existing regarding that parcel or may be held by the receiving person or entity.

     "Transferee" means the person or legal entity, including a person or legal entity that owns property in a receiving district, who purchases the development rights.

     §205-C  Districts. (a)  The commission may establish sending and receiving districts as overlays within land use district boundaries or any other provisions to effectuate their duties.  The commission shall cause the official zoning district map to be amended by overlay districts to the affected properties. The designation "TDR-S" shall be the title of the overlay for a sending district, and the designation "TDR-R" shall be the title of the overlay for a receiving district.

     (b) Sending and receiving districts established pursuant to this part shall be consistent with the local comprehensive plan.

     §205-D  Designation of Districts.  (a) The commission shall designate rural legacy areas as sending districts for the purposes of the transfer of development rights program.

     (b) The commission shall designate zoning districts that shall be receiving districts for the purposes of the transfer of development rights program after approval by the respective county planning commission.

     §205-E  Right to transfer development rights.  (a) Each transferor shall have the right to sever all or a portion of the rights to develop from the parcel in a sending district and to sell, trade, or barter all or a portion of those rights to a transferee consistent with the purposes of this part.

     (b)  All rights transferred under this part are extinguished upon transfer.

     §205-F    Development Rights Bank.  A development rights bank is established within the commission and shall be called the "TDR Bank."  The bank shall have the power to:

     (1)  purchase and sell or convey development rights;

     (2)  recommend to a state agency where the State should acquire development rights by condemnation;

     (3)  hold indefinitely any development rights if possesses for conservation or other purposes;

     (4)  receive donations of development rights from any person or entity; and

     (5)  receive funding from any source, the proceeds from the sale of development rights or grants or donations.

     §205-G    Administration.  The commission shall adopt rules pursuant to chapter 91 for the determination of development rights, issuance of certificate, instruments of transfer, application of development rights to a receiving parcel."

     SECTION 3.  Chapter 205, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:


     §205‑H  Rural legacy area.  (a)  As used in this part, "rural legacy area" means a land area that has significant historic, cultural, and visual value to the State.

     (b)  The objective for the designation of a rural legacy area is to restrict the land use to its present zoning or to rezone it to preservation or conservation to preserve and perpetuate the land for the continuing benefit of the people of the State.

     (c)  A rural legacy area shall be designated through enactment of legislation or by the commission.  Once designated as a rural legacy area, the uses allowed on the land shall be restricted to the permitted uses listed in section 205‑4.5 or for preservation or conservation.

     (d)  A landowner with land designated in a rural legacy area shall be entitled to any incentives provided in this part or by any statute.

     (e)  Notwithstanding any law to the contrary, any land use district boundary amendment or change in zoning involving a rural legacy area shall be made by the commission.

     (f)  A rural legacy area may consist of lands in preservation, conservation, agriculture, forestry, and as determined by the legislature or the commission."

     SECTION 4.  Section 205-2, Hawaii Revised Statutes, is amended to read as follows:

     "§205-2  Districting and classification of lands.  (a)  There shall be [four] five major land use districts in which all lands in the State shall be placed:  urban, rural, agricultural, rural legacy area as provided for in part    , and conservation.  The land use commission shall group contiguous land areas suitable for inclusion in one of these four major districts.  The commission shall set standards for determining the boundaries of each district, provided that:

     (1)  In the establishment of boundaries of urban districts those lands that are now in urban use and a sufficient reserve area for foreseeable urban growth shall be included;

     (2)  In the establishment of boundaries for rural districts, areas of land composed primarily of small farms mixed with very low density residential lots, which may be shown by a minimum density of not more than one house per one-half acre and a minimum lot size of not less than one-half acre shall be included, except as herein provided;

     (3)  In the establishment of the boundaries of agricultural districts the greatest possible protection shall be given to those lands with a high capacity for intensive cultivation; and

     (4)  In the establishment of the boundaries of conservation districts, the "forest and water reserve zones" provided in Act 234, section 2, Session Laws of Hawaii 1957, are renamed "conservation districts" and, effective as of July 11, 1961, the boundaries of the forest and water reserve zones theretofore established pursuant to Act 234, section 2, Session Laws of Hawaii 1957, shall constitute the boundaries of the conservation districts; provided that thereafter the power to determine the boundaries of the conservation districts shall be in the commission.

In establishing the boundaries of the districts in each county, the commission shall give consideration to the master plan or general plan of the county.

     (b)  Urban districts shall include activities or uses as provided by ordinances or regulations of the county within which the urban district is situated.

     (c)  Rural districts shall include activities or uses as characterized by low density residential lots of not more than one dwelling house per one-half acre, except as provided by county ordinance pursuant to section 46-4(c), in areas where "city-like" concentration of people, structures, streets, and urban level of services are absent, and where small farms are intermixed with low density residential lots except that within a subdivision, as defined in section 484-1, the commission for good cause may allow one lot of less than one-half acre, but not less than 18,500 square feet, or an equivalent residential density, within a rural subdivision and permit the construction of one dwelling on such lot, provided that all other dwellings in the subdivision shall have a minimum lot size of one-half acre or 21,780 square feet.  Such petition for variance may be processed under the special permit procedure.  These districts may include contiguous areas which are not suited to low density residential lots or small farms by reason of topography, soils, and other related characteristics.  Rural districts shall also include golf courses, golf driving ranges, and golf-related facilities.

     (d)  Agricultural districts shall include:

     (1)  Activities or uses as characterized by the cultivation of crops, crops for bioenergy, orchards, forage, and forestry;

     (2)  Farming activities or uses related to animal husbandry, and game and fish propagation;

     (3)  Aquaculture, which means the production of aquatic plant and animal life within ponds and other bodies of water;

     (4)  Wind generated energy production for public, private, and commercial use;

     (5)  Biofuel production as described in section 205‑4.5(a)(15) for public, private, and commercial use;

     (6)  Bona fide agricultural services and uses that support the agricultural activities of the fee or leasehold owner of the property and accessory to any of the above activities, whether or not conducted on the same premises as the agricultural activities to which they are accessory, including but not limited to farm dwellings as defined in section 205-4.5(a)(4), employee housing, farm buildings, mills, storage facilities, processing facilities, vehicle and equipment storage areas, roadside stands for the sale of products grown on the premises, and plantation community subdivisions as defined in section 205‑4.5(a)(12);

     (7)  Wind machines and wind farms;

     (8)  Small-scale meteorological, air quality, noise, and other scientific and environmental data collection and monitoring facilities occupying less than one‑half acre of land; provided that these facilities shall not be used as or equipped for use as living quarters or dwellings;

     (9)  Agricultural parks;

    (10)  Agricultural tourism conducted on a working farm, or a farming operation as defined in section 165‑2, for the enjoyment, education, or involvement of visitors; provided that the agricultural tourism activity is accessory and secondary to the principal agricultural use and does not interfere with surrounding farm operations; and provided further that this paragraph shall apply only to a county that has adopted ordinances regulating agricultural tourism under section 205-5; and

    (11)  Open area recreational facilities.

Agricultural districts shall not include golf courses and golf driving ranges, except as provided in section 205-4.5(d).  Agricultural districts include areas that are not used for, or that are not suited to, agricultural and ancillary activities by reason of topography, soils, and other related characteristics.

     (e)  Conservation districts shall include areas necessary for protecting watersheds and water sources; preserving scenic and historic areas; providing park lands, wilderness, and beach reserves; conserving indigenous or endemic plants, fish, and wildlife, including those which are threatened or endangered; preventing floods and soil erosion; forestry; open space areas whose existing openness, natural condition, or present state of use, if retained, would enhance the present or potential value of abutting or surrounding communities, or would maintain or enhance the conservation of natural or scenic resources; areas of value for recreational purposes; other related activities; and other permitted uses not detrimental to a multiple use conservation concept."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.