SB3032

SECTION 1. The legislature finds that there is a need to revise laws related to agricultural property regimes. Recently, there has been an increased interest in developing agricultural lands through the condominium property regime process. While this provides land developers with a process to reduce front-end costs of selling agricultural lands, it often thwarts the long-term viability of these "units", as master planning is absent, particularly with respect to supporting county infrastructure.

The legislature finds that current condominium property regime laws only require that the proposed condominium property regime comply with county zoning, but does not require compliance with county subdivision requirements, which is where counties can review and ensure that necessary supportive infrastructure is available, including roads, water, and sewer lines, prior to the sale of the property. This current process also inhibits a county's ability to plan, regulate, and enforce its agricultural plans, goals, and infrastructure services.

Further, current law specifically exempts condominium property regime projects with units to be sold for $1,000,000 or more from the requirement to be registered with the real estate commission. These types of projects may be of equal, if not greater, concern to the counties and the communities surrounding them.

The legislature further finds that section 205-4.5(e)(3), Hawaii Revised Statutes, specifically allows agricultural land developers to bypass county subdivision requirements. Accordingly, this promotes the condominium property regime process over the county subdivision process. The condominium property regime process is a complex set of regulations and restrictions that is often not easily understood at the time of purchase.

Accordingly, the purpose of this Act is to provide an option for county participation in the approval of major condominium property regimes.

SECTION 2. Section 205-4.5, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"[[](f)[]] Notwithstanding any other law to the contrary, agricultural lands may be subdivided and leased for the agricultural uses or activities permitted in subsection (a); provided that:

(1) The principal use of the leased land is agriculture;

(2) No permanent or temporary dwellings or farm dwellings, including trailers and campers, are constructed on the leased area. This restriction shall not prohibit the construction of storage sheds, equipment sheds, or other structures appropriate to the agricultural activity carried on within the lot; and

(3) The lease term for a subdivided lot shall be for at least as long as the greater of:

(A) The minimum real property tax agricultural dedication period of the county in which the subdivided lot is located; or

(B) Five years.

Lots created and leased pursuant to this section shall be legal lots of record for mortgage lending purposes [~~and shall be exempt from county subdivision standards~~]."

SECTION 3. Section 514B-5, Hawaii Revised Statutes, is amended to read as follows:

"§514B-5 Conformance with county land use laws. Any condominium property regime established under this chapter shall conform to the existing underlying county zoning and subdivision or equivalent requirements for the property and all applicable county permitting requirements adopted by the county in which the property is located, including any supplemental rules adopted by the county, pursuant to section 514B‑6, to ensure the conformance of condominium property regimes to the purposes and provisions of county zoning and development ordinances and chapter 205, including section 205-4.6 where applicable. In the case of a property which includes one or more existing structures being converted to condominium status, the condominium property regime shall comply with section 514B‑32(a)(13) or 514B‑84(a)."

SECTION 4. Section 514B-51, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The registration requirement of this section shall not apply to:

(1) The disposition of units exempted from the developer's public report requirements pursuant to section 514B‑81(b); or

[~~(2)~~ ~~Projects in which all units are restricted to nonresidential uses and all units are to be sold for $1,000,000 or more; or~~

~~(3)~~] (2) The sale of units in bulk, such as where a developer undertakes to develop and then sells all or a portion of the developer's entire inventory of units to a purchaser who is a developer. The registration requirements of this section and the developer's amended developer's public report requirements of section 514B‑56 shall apply to any sale of units to the public following a sale of units in bulk."

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

SECTION 6. This Act shall take effect on July 1, 2018.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3032
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII