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Harry Kim <br />Mayor <br />County of Hawaii <br />25 Aupuni Street, Room 215 • Hilo, Hawaii 96720 <br />(808) 961-8234 • Fax (808) 961-8248 <br />August 25, 2008 <br />Pete Hoffmann, Chair, and <br />Members of the Hawaii County Council <br />Hawaii County Council <br />25 Aupuni Street <br />Hilo, Hawaii 96720 <br />Re: Repeal of the Nonspeculative Residential Use Program <br />Bill No. 323 <br />~) <br />On <br />Gt'j <br />L [' <br />-t -_: <br />-~,-. <br />L T, <br />= "= <br />?: <br />William Takaba <br />Finm~ce Director <br />Nancy Crawford <br />Deputy= Finmme Direcor <br />N <br />O <br />O <br />c <br />N <br />cn <br />T <br />3 <br />w <br />0 <br />c.o <br />..., <br />~1 <br />r. <br />=: <br />T <br />L"i <br />This letter is submitted in opposition to the Bill No. 323 in its present form. Although we agree <br />that the Nonspeculative Residential Use Program ("Program") may no longer be necessary due <br />to the current 3% annual limit on homeowner assessments, we have the following concerns about <br />the bill as it is written: <br />Purpose Statement. Since there is no purpose statement, we are unsure of what the bill <br />intends to accomplish. Is it to repeal the Program or is it to provide an additional benefit to <br />participants as they exit the program? We believe it is more of the latter. We recommend <br />the inclusion of a purpose statement in the bill. <br />2. Valuation Formula. The proposed valuation formula will allow current participants to <br />continue to receive no increases in their property assessments until their dedications expire, <br />which could theoretically be 9 years from now. And when their dedications expire, they will <br />be allowed to receive a new assessment based on a retroactive frozen value that not does not <br />increase by more than 3% per yeaz. We believe if any retroactive value is used, it should be <br />the retroactive mazket value of the property, just as it was done for those in the affordable <br />rental class. It would make more sense to let the dedication expire and then provide a new <br />assessment that limits the increases to 3% per yeaz. <br />3. Retroactive Benefits to Previous Participants. Subsection 19-53(g)(2)(C) in the bill <br />provides retroactive additional benefits for properties that were already converted to the <br />homeowners class. Providing retroactive benefits based on what the market has already done <br />sets a bad precedent for drafting future tax laws. <br />4. Deadline to Cancel. The bill provides no incentive for the participant to cancel a dedication. <br />A deadline to cancel should be included in the bill. <br />/32.3 <br />Comm- No. <br />Ref. To: Proien <br />Ref..Dcte nnr~„~ 7° <br />