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Ocean View Community Meeting September 21, ?004 <br /> Bill 49. Draft 3, Agricultural Land'faxation <br /> <br /> The group fell into discussion on the rollback tax and penalties for dedicated Ag. Mr. Masuda said that <br /> if a party is currently enrolled in a 20-year dedication, the dedication will continue when the new law <br /> takes effect, despite the elimination of the 20-year Ag dedication program. Mr. Jacobson asked if a <br /> person would be able to renew a 20-year dedication. Mr. Masuda said no; however, if a disability or <br /> disaster struck a person enrolled in the 20-year program after the new law becomes effective, they would <br /> be able to take advantage of the new reduced penalties. <br /> Mr. Tyler asked about start-up farms which take years to produce an income. Mr. Takaba explained the <br /> farm plan. He said the farmer can draft a farm plan to attach to the dedication application and if it is <br /> followed, and standard agricultural practices are followed, it is allowable and they would not be <br /> considered in a breach of the program. Instances of allowable breaks in Ag use were discussed. <br /> including crops or activities requiring land to be fallow for a period of time. <br /> A participant asked if a farmer would quality if the lands he farmed were noncontiguous; that is, not <br /> bordering. The reply was that the farm plan is the key. As long as one is submitted with the dedication <br /> and followed, there will not he a breach. <br /> Mr. Tyler asked about a farmer who may not use his products for profit, but may use them as a trade, or <br /> fbr personal consumption or use. Mr. Takaba stated as long as they could show that the farm produces <br /> $2,000 per year in worth, they would not be in breach of their dedication. They can barter, or whatever. <br /> Mr. Tyler yuestioned the elimination of the 20-year dedication program. He stated that our intent is to <br /> protect Agriculture activity and land. He wondered why we would not encourage a longer dedication. <br /> Mr. Takaba replied that very few properties had utilized the 20-year program. The few that had were the <br /> sugar plantations and some large landowners such as cattle ranches. He stated to have a program that <br /> was used so little caused unnecessary confusion to applicants considering their options. He mentioned <br /> the case of Hamakua Sugar, who was enrolled in the 20-year program and the business fell in the 19`~ <br /> year of the dedication, causing a breach which resulted in approximately $2 million in rollback taxes and <br /> penalties. <br /> Mr. "fyler reiterated that if somebody comes to the Big Island and purchases a parcel, it would be to the <br /> County's benefit to encourage them to keep that property in Agricultural use as much as possible. <br /> Mr. Takaba mentioned the 10-year dedication program, which provides a 50 percent reduction in land <br /> valuation than non-dedicated Ag. <br /> Discussion ensued regarding the different types of zoning and classes of taxation. Mr. Tyler asked about <br /> land in the State Land Use Agricultural District, which is now taxed at the highest and best use if there is <br /> no bona fide Ag use. He asked how the highest and best use is calculated. Mr. Takai replied that they <br /> look for a similar property and base it on that. Mr. Tyler asked for clarification, that the property is not <br /> taxed based on the house, that it is taxed based on the underlying zoning of the property. He used an <br /> example of a property on the roadway, in agriculturally zoned land. Mc Takai stated that if the property <br /> was on the roadway, it would not be in Ag use and the entire property would be taxed based on the <br /> homeowners class. <br /> ['age 2 <br /> <br />