COM 0118.043 2002-2004 - Laserfiche WebLink

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i 8-04;1 :34AM; 18085283463 ;18085283463 3/ t0 I Flaiom I James Y.IArakaki, Chairman, and Members County' until I Novcml>Ilc 10, 20041 i J Page 3 ~ ' € (1) One-year dedication at five percent, five-yeaz dedication at three percent, and ten- year dedication at one percent of fair market value; "Circuit Breakers" not to exceed agricriltural production value for five-year dedicated lands, and not to exceed five times that value for one-year dedicated f lands; E Assessment of vacant lands dedicated for ten years at 50 percent of fair market i value; O A schedule of declining rollback tax periods depending on the year the dedication is cancelled; and i ~~O A~~new Section 8-10 providing an exemption for the value of qualifying II agricultural irrigation and drainage systems and land improvements on dedicated ~ II vacant lands. h What W leamed~ through this process was that the Counties all start from a basis ofusing "fair I, ' ' market aloe," determined either through fee simple sales or replacement costs, as a~, means of ~ determi 'ng the tax assessed value of property in all land use categories. While appraisal i method logy recognizes the income approach as a means to determine fair market value, the ' Countie aze hesitant to use the income approach for agricultural assessments. We could find no - provisio in the County Charter that prohibits the use of the income approach; however, it appears at the Real Property Tax Office wanted to create a "uniform" assessment methodology for asse sment purposes. This created a problem because agricultural yield or productivity is viewed s an "income approach" in determining the land values. Using c mparable sales data to determine the fair mazket value for agricultural lands on Oahu resulted in significantly higher values for agricultural lands on Oahu from previous years. Ironical ,although the changes to the real property tax system were initially intended to close the "loo hole" that allowed for "gentlemen estates" to pay the agricultural rate, the fee simple, sales of `gentlemen estates" are being used as comparable sales to determine the tax assessed values f r agriculhrral lands on Oahu. For example, on lots less than 20 acres in size, the fair ' market aloe ford Waimanalo was $310,000 per acre; for Kahttku it was $250,000 per acre. Based on lots eing advertised for sale now, Mokuleia could be in the range of $1,000,000 per acre. i From t~r disc4ssions at the Task Force, the City Administration's position, supported by CorpOr on Counsel and the Real Property Assessment Division staff, was that the ~ Admire tration must use comparable sales or replacement cost to determine the fair market ~ r assesse values. The only flexibility or discretion the Administration has is based on having