REP FC 298 08/31/2004 2002-2004 - Laserfiche WebLink

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REPORT OF THE COMMITTEE ON FINANCE, UATE: August 31.2004 PLACE: Council Chambers TIME: 10:05 a.m. Council Chair and Members Hawaii County Council Hilo Hawaii 96720 Re: Comm. No. 395/Bill No. 175 Your Committee on Finance, to which was referred Bill No. 175, reports as lollows: Bill No. 175. transmitted by Director of Finance William Takaba, via Communication No. 395, dated October 23.2003, amends Chapter 19, Hawaii County Code 1983 (1995 Edition), Real Property faxes, relating to valuation. The purpose of this measure is to limit the increase in the market value of properties in the homeowners class to not more than three percent (3%) per tax year until the property is sold or otherwise transferred. At that time, the owner pays tax on market value. This growth cap is proposed to provide needed relief to residents of the Big Island experiencing rapidly increasing property values. Originally heard on November 4.2003, this measure was deferred. At subsequent Finance Committee workshops held on November 3 & 17, 2003, Director of Finance William Takaba provided an overview of the bill, summary of concerns, summary of exemptions and major issues. These issues included the following pros and cons: Pros: -Rewards commitment to one's home -"I~axpayer would know growth limit -Perceived fairness to homeowner -Can consider eliminating dedication program -No back-tax provision like non-spec dedication program Cons: -No back-tax may lead to abuse -Seems complex -Shifts tax burden to other classes -May lead to budget problems -Taxes paid may not be equitable Bill No. 175, Draft 2 was referred to Your Committee, dated October 30, 2003, from Director of Finance William "fakaba, clarifying and correcting the original bill. Bill No. 175, Draft 3 was presented to Your Committee on August 26, 2004. from Director of Finance William "Cukaba, amending the base assessment year from 2003 to 2004. FC REPORT NO. 298