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October 30, 2014 Page 2 of 3 valuation, as proposed, would not be based on the same methodology as currently used for all other crop valuations. There was also concern the Administration would have difficulty verifying and enforcing operations comprised of both organic and non - organic farming operations. The Task Force does not support Bill No. 185. Bill 185 was withdrawn by the introducer on 9- 30 -14. Drafted and introduced Bill 256 which added the income approach as consideration in the valuation of commercial properties. Bill 256 passed second and final Council reading on 7 -2 -14. Drafted and introduced Bill 292 regarding eligibility to claim property as a principal home. Bill 292 adds an additional requirement that a Hawaii State Income Tax return be filed to qualify for the homeowners exemption, subject to exceptions for these who just recently moved to Hawaii and have not yet filed a state income tax return and for those whose income is below the minimum required to trigger the filing of a state income tax return. Bill 292 was amended to Draft 2 and passed first reading at Council on 10- 15 -14. Drafted and introduced Bill 293 regarding the filing of a claim for a home exemption from real property tax. Bill 293 intent was to increase the efficiency of the real property tax division by eliminating the one -half year application of the home exemption. Bill 293 failed to pass first Council reading on 10- 15 -14. Drafted and introduced Bill 294. Bill 294 would have increased the base property tax exemption for real property owned and occupied as a principal home by increasing the principal home exemption from $40,000 to $60,000. The finance department and Council Members voiced concern over the County's current financial situation and Bill 294 failed to pass first Council reading on 10- 15 -14. Drafted a proposed Bill regarding exemptions from real property tax by way of dedication of land to agricultural use. The Bill phases out the nondedicated agricultural use assessment program and replaces it with a short -term dedicated agricultural use assessment program. Recommendation Concerning Continuation of the Real Property Task Force: The Task Force recommends: (1) That the Task Force efforts be continued in order to address additional IAAO's recommendations, address related legislation proposed by Council members, and related Real Property Tax matters; (2) Consideration of a tax break program to encourage preservation of open space on a permanent basis, not necessarily based on agricultural activities; (3) Consideration of the State's enterprise zone program which affords real property tax relief, but which may no longer be in sync with county real property tax exemption policies; and (4) Consideration of a real property tax exemption program for startup businesses but with consideration of how the county permitting system works and how other tax programs affect start up small business. Respectfully submitted, Margaret Wille, Co -Chair Real Property "Tax Stakeholders' Task Force M W /dh Att.