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HomeMy WebLinkAboutREP FC 220 2022/10/18 2020-2022REPORT OF THE COMMITTEE ON FINANCE DATE: October 18, 2022 PLACE: Council Chambers Kailua-Kona, Hawai i TIME: 1:04 p.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Re: Comm. No. 739/Bill No. 156 Your Committee on Finance, to which was referred Bill No. 156, reports as follows: Bill No. 156, transmitted by Council Member Susan L. K. Lee Loy via Communication No. 739 dated April 13, 2022, amends Chapter 19, Article 7, Section 19-53, of the Hawaii County Code 1983 (2016 edition, as amended), relating to Real Property Tax valuation; considerations in fixing. This bill establishes that the value of property classified as apartment, hotel and resort, commercial, industrial, agricultural or native forests, or conservation cannot be assessed by the County at more than 15 percent than the previous year's assessed value for that property. This measure was previously heard and postponed on April 19, May 17, and September 6, 2022. April 19, 2022 Finance Committee Meeting Ms. Lee Loy provided background on the intent of this resolution. Ms. Lee Loy then asked for input from Finance Director Deanna Sako. Ms. Sako provided comments in opposition of this measure, explaining why this bill would not be in the best interest of the County. Committee Member Herbert M. "Tim" Richards III expressed his concerns on this measure, emphasizing the need to limit the volatility of the bill and to think through the whole process before supporting this measure. Ms. Lee Loy responded with appreciation for Mr. Richards and his input to which Mr. Richards extended to Ms. Lee Loy an offer to work with her on this measure going forward. Committee Member Aaron S. Y. Chung offered a suggestion to Ms. Lee Loy on amending the bill to reflect the adoption year as it will not go into effect upon approval as the bill stated. Committee Member Ashley L. Kierkiewicz thanked Ms. Lee Loy for putting this measure forward and applauded Ms. Lee Loy on her willingness to have her colleagues contribute. Both Committee Chair Matt Kaneali`i-KI einfelder and Committee Member Heather L. Kimball asked Ms. Sako questions regarding the language and potential problems the bill could cause. FC Report No.: 220 FC -220 Page 2 October 18, 2022 Finance Deputy Director Steven Hunt as well as Real Property Tax Administrator Lisa Miura offered comments in opposition of this measure. Ms. Kimball mentioned the potential to create an ad hoc committee for this measure. A motion to postpone the measure to the May 17, 2022 Finance Committee meeting was made by Ms. Lee Loy, seconded by Mr. Inaba. May 17, 2022 Finance Committee Meeting Mr. Chung commented on his reservations, explaining that he is not supportive of a cap which may unnecessarily restrict the County. Per Mr. Inaba's request, Ms. Sako stated that the main challenge is to distinguish whether a property exceeding the class rate was due to a property owner performing improvements versus the impact of market value. Mr. Inaba then stated that he would not be able to take a position on the measure due to a lack of details. Per Mr. Richards' request, Ms. Sako confirmed that should the measure be passed, if a property exceeds 15 percent in a single year, the differential will be incorporated in the following year. Mr. Richards then suggested that a minimum should also be incorporated to accompany the 15 percent limit. Ms. Kimball suggested that the measure be postponed until the appeals results are provided to the members. Ms. Kimball then reiterated previously expressed concerns with a lack of fairness by only targeting certain property classes. Ms. Sako confirmed Mr. Kdneali`i-Kleinfelder's request for a financial statement and stated that the statement will likely be provided prior to First Reading at Council. Ms. Villegas expressed concerns with the impact on West Hawaii. Real Property Tax Administrator Lisa Miura clarified the definition of the apartment class and potential conflicts found in the measure. A motion to postpone the measure to the September 6, 2022 Finance Committee meeting was made by Ms. Lee Loy, seconded by Ms. David. September 6, 2022 Finance Committee Meeting Ms. Lee Loy expressed that her position has not changed on this measure and requested a postponement for the October 18, 2022 committee meeting. Ms. Kimball commented that her opposition has not changed as well and is happy to support the postponement. A motion to postpone the measure to the October 18, 2022 Finance Committee meeting was made by Ms. Lee Loy, seconded by Mr. Richards. FC Report No.: 220 A motion to amend Bill 156 with the contents of Communication 739.15 was made. Said amendment adds that the assessed value may also not decrease more than fifteen percent. Mr. Inaba requested some feedback from Ms. Miura. Ms. Miura expressed the department's concern for and opposition to the measure. Ms. Miura shared that Finance intends to have Bond Counsel and the International Association of Assessing Officers present at the next hearing to express their concerns. Ms. David and Ms. Kimball expressed an interest in hearing what the Bond Counsel and the International Association of Assessing Officers would recommend. Ms. Lee Loy called for the vote to amend Bill 156 with the contents of Communication 739.15. The motion failed with two members in favor, six members opposed and one member absent. A motion was made to amend Bill 156 with the contents of Communication 739.16. Said amendment removes the effective date from "upon its approval" to a projected date of January 1, 2028. Ms. David and Mr. Richards provided comments on the amendment. Mr. Richards asked Ms. Miura if setting this projected date is helpful to the department, to which Ms. Miura replied that she would need to confer with the director. Ms. Lee Loy called for the vote to amend Bill 156 with the contents of Communication 739.16. The motion failed with four members in favor, five members opposed. Mr. Kdneali'i-Kleinfelder asked Ms. Miura to explain some of the major drawbacks of this bill, to which she explained the bill causes confusion among constituents regarding the different values in assessment. Both Ms. Kierkiewicz and Mr. Richards shared their appreciation towards Ms. Lee Loy in her efforts to put this bill foward and to help those who have reached out to her with concerns. Your Committee on Finance is not in accord with the purpose and intent of Bill No. 156, and forwards it to Council with a negative recommendation. Ik Respectfully submitted, COMMITTEE ON FINANCE 1w4w, 'V PORT NO.: 220 ADOPTED: NOV 0 2 2022