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DocuSign Envelope ID:B2DOC3EF-E687-4AA6-93CF-D16200518BC6 mwo ' t� �A ` , 'vu However, since the origination of these program, there has been structural changes within the agricultural industry and land development activities within the County. With the closing of the sugar plantations, large landowners have been seeking diversified agricultural activities on their lands. This has led to a program of leasing/licensing portions of properties to various farms, with the farming activities changing through time as markets change. In addition, there has been a "gentrification" of the rural areas with the creation of "gentleperson"ranches. While supporting agricultural activities, the general tax breaks for non-dedicated agricultural activities has created an impression that the Agricultural Programs can be abused. In order to support commercial agricultural activities as well as to continue encouraging reasonable agricultural uses within the rural areas,the Real Property Agricultural Committee has concluded that the overall agricultural tax program should be restructured with the creation of a three (3)tiered system. This proposed system would include: I 91 Revision of the existing Dedicated Agricultural Program to encourage its use by landowners within diversified agricultural activities; 0 Creation of a new Short-Term Agricultural Dedication Program to encourage commercial agricultural activities where a farmer is just starting out or where the landowner is not willing/able to make a long term commitment for agricultural uses; and Revision of the Non-Dedicated Agricultural Program to continue to encourage agricultural activities in the rural areas while reducing the opportunities for and perceptions of abuse of the system. These following recommendations must be considered in combination with each other as they would not achieve the appropriate goal without the other changes. 1. Revise the 10 Fear Dedicated Agricultural Program. There are a number of reasons why the Dedicated Agricultural Program is not as effective as it can be in supporting commercial agricultural activities. A significant portion of these reasons will be addressed with the acceptance of the recommendations below. However, the program will also need to be revised to allow for diversified agricultural activities areas,recognizing that farmers and crops will change over time so area may be fallow while crops and/or farmers change. The potential for abuse of this program is proposed to be addressed with the requirement for a detailed farm plan that would identify the potential areas and types of uses as well as a requirement that any vacant areas be actively marketed during the dedication period. The program would also allow for blended agricultural values based on a potential range of uses. This would eliminate the need to continually monitor specific agricultural activities as long as the overall farm program is being followed. The valuation for this program would be the lower of 10% of market value or the dedicated value. 2. Create a Short Term Dedicated AG program. This would require a change to the Hawaii County Code. The change would create a program similar to the 10 year dedicated program with a shorter term of 3 years. The requirements would be 7