COM 0118.019 2002-2004 - Laserfiche WebLink

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Hawaii Cattlemen's Council Comments Relating to Real Property Taxation and Assessment Practices On Land in Agricultural Use And Bill 49 (Draft 3) 8/23/2004 The Hawaii Cattlemen's Council (HCC) is a statewide umbrella organization comprising the various county level Cattlemen's Associations. Our 110+ member ranchers represent over 60,000 beef cows (which is over 75% of the State total). Ranchers are the stewards and usually the tax payers of over 1 million acres in Hawaii which is about one quarter of the State's total land mass. The basic question as to how to assess and tax our ag lands requires us to make a fundamental philosophical decision and then stick with it. The key premise is whether we are going to recognize and respect real property (land and improvements) which is in legitimate agricultural use as being a factor of agricultural production and assessed at its ag use production value for the commodity it produces or are we going to treat it as an investment asset and assess it at its fair market value or some fraction thereof. We fully acknowledge that assessing based on fair market values and comparable sales, while in itself complicated, is far easier than having to wrestle with the very complex question of establishing fair ag use production values for each commodity, but there is absolutely no linkage or rationale connecting the two approaches. If agriculture in Hawaii is to survive much less thrive, the ag productivity valuation approach must be the one and the only basis for assessing all real property that is in legitimate agricultural use. HCC's position with respect to Bill 49 (Draft 3) is basically supportive and we commend the changes in Draft 3 as we understand that it would preserve the ag productivity assessment practice. We would, however, still like to offer a few additional comments since this bill and subject obviously touch on a lot of other critical issues related to both ag land taxation and ag land use. 1. While there definitely is a place for rural residential and so-called "gentlemen ranchettes", we need to distinguish those from legitimate or commercial ag. This requires a good yardstick and maybe the $2,000/year in ag income is a reasonable one; however we feel small ranches and subsistence producers who may otherwise not qualify under this yardstick for the ag production benefits should be allowed to include in that figure the value of livestock slaughtered or produce consumed for "home use". 2. While the use of ag productivity values must be preserved, we recognize that these values do deserve periodic review and adjustment. We suggest that this may best be handled on a statewide basis, commodity-by-