COM 0118.043 2002-2004 - Laserfiche WebLink

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I t~- 8-04; 1q:34AM; tBOB6283463 t80B52B3463 # 4/ t0 j II I ~ I-lonorabl James Y. Arikaki. Chairman, and ~1embcrs ~ ~ County ~ until Noverob~ 10,2004 ~ i Page 4 III i lands de icated. When lands are dedicated, the Administration has some flexibility to adjust the I fair ma bt value Also, and just as significant, is the fact that the Council is solely responsible ; I ; for sett~i g the "ta rates" for the different categories of land on Oahu for tax purposes. In coope ation with the City Administration, the Task Force allowed for the fair mar~ret values to be deteh fined by using fee simple sales. Based on dedication periods, the assessed c~alues were adjusted y 95 percent, 97 percent, or 99 percent; however, the bill provides fora "cap" on the assessed values by comparing the adjusted assessed values based on fee simple sales against the ' agricult 1 yields for the property. If the fee simple sales-adjusted assessments exceed the value of the a cultural yields, the bill provides for automatic lowering of the percentage adjustment such tha the tax assessed values do not exceed the agricultural yields. (See attached Spreads eet.) The Cou ty of Hawaii's Bill No. 49 provides for agricultural real property tax assessments to be ~ ' detenn` d by the agricultural productivity values for dedicated and non-dedicated lands. We ~ unders ' d this to mean that for lands in active agricultural use, whether the lands arG dedicated I or not, tl a maximum tax liability will be twice the agricultural productivity value for the propert~ Similar to the City and County of Honolulu, this provides fora "cap" on the assessed values agricultural lands and provides for some stability for farmers from the fluctuations in the real state ma ket. We believe that using agricultural productivity values or agriculhtral yields,pt vides a air basis to assess agricultural lands. I ' With tes ect to vacant and unusable/waste lands, in both the City and County of Honolulu and II the Co of Hawaii, the fair market value based on comparable sales will be used to determine ~ ' the tax ~ sensed values for vacant and unusable/waste lands. Recognizing the fact that this ~ i "surplus' of agricultural lands maybe attributed to the limited amount of qualified farmers in Hawaii, to City and Comity of Honolulu allows for property owners who dedicate "Vacant" I lands for 10 years a 50 percent reduction in their assessed valuations. This would allow owners I to invest in infrastructure or improvements to the lands and keep the lands available for qualified farmers i the future. It also attempts to address the situation where owners of agricultural lands I that arel acant because of market conditions (i.e. limited amount of farmers) are provided with ~ some tax relief as long as the property remains zoned for agriculture. I; At the re ent Agriculture 2004 Conference, we participated in a panel discussion on the i ' ~i agricultu al real property tax issue in Hawaii. One approach that has been used in the past wad tol I have vac nt lands taxed at their "highest and best use" in order to, orce the lazidowners to put the ' ( II lauds irit active 2gricultural use. The rationale is based on the assumption that by taxing ' I ~ landown rs of vacant lands at less than market value, the Counties would allow the lands to be i "land ba ked" anal not used for active agriculttue. Our position is that in today's market in I Hawaii; tere a}•e Ilnot enough qualified farmers to use all of the agricultural lands made available I i I i I I I II i