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HomeMy WebLinkAboutREP FC 028 2025-02-18 2024-2026REPORT OF THE COMMITTEE ON FINANCE DATE: February 18, 2025 PLACE: Council Chambers Kailua-Kona, Hawaii TIME: 1:31 p.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Re: Comm. No. 96/13ill No. 23 Your Committee on Finance, to which was referred Bill No. 23, reports as follows: Bill No. 23, transmitted by Committee Member James Hustace via Communication No. 96, dated January 9, 2025, amends Chapter 19, Article 1, Section 19-2 and Article 8, Section 19-61 of the Hawaii County Code 1983 (2016 Edition, as amended), relating to Short -Term Commerical Agricultural Use Dedication. This bill increases the term length requirements for the Short -Term Commercial Agricultural Use Dedication property tax assessment program from three to five years. Finance Committee Meeting of February 4, 2025 Real Property Tax Administrator Lisa Miura and Assistant Administrator Keita Jo were in attendance and available for questions. Committee Member James Hustace provided background on this measure stating that he saw a need to change the term length from three to five years to offer farmers more time to cultivate their land before reapplying for this program. Committee Member Heather Kimball asked that this measure be postponed to the next committee meeting to allow the members time to speak with community members as no testifiers were present to comment on this matter. Multiple Committee Members commented in support of a postponement. Committee Member Holeka Inaba asked Ms. Miura to comment on the amendment. Ms. Miura commented that it is concerning when a Real Property Tax matter is before the committee, and there are no testifiers. Ms. Miura further added taht postponing this matter would allow her to speak with Mr. Hustace. Committee Member Michelle Galimba stated that the flexibility of the three-year period is valuable to some applicants. The committee unanimously voted to postpone Bill No. 23 to February 18, 2025. Finance Committee Meeting of February 18, 2025 Real Property Tax Administrator Lisa Miura and Assistant Administrator Keita Jo were in attendance and available for questions. Committee Member James Hustace provided background on this matter. FC Report No. 28 FC-28 Page 2 February 18, 2025 Commitee Member Heather Kimball stated that she attended community meetings in her district and the monthly East Hawaii Farmers Union meeting to discuss the proposed changes, adding there was limited feedback and no preference. She explained that when this program was created, the decision to give it a three-year term was based on the recommendation of the 2019 Real Property Tax Agricultural Committee Advisory Report. Committee Member Michelle Galimba stated that a five-year term would likely be preferable to the administration since it would involve less paperwork and asked if the paperwork was a significant concern. Ms. Miura replied that the Clerical Department has been overwhelmed, as they are responsible for the initial intake and would probably be very interested in changing this program term to five years. Mr. Jo concurred with Ms. Miura and added that one of the concerns he heard from taxpayers was the timing between applying for and the renewal, mentioning that they felt this process was too quick. Ms. Galimba noted that she believed there was an advantage to maintaining this program for three years. Committee Member Rebecca Villegas asked if there were any downsides or red flags regarding the proposed change. Ms. Miura stated that she isn't aware of the unintended consequences yet as most applicants have applied for the five-year term. Committee Chair Matt Kdneali`i-Kleinfelder asked about the benefits of this program compared to other programs. Ms. Miura replied that for this program, once you apply and are approved, your assessed land value is lower, and you will be taxed less. Mr. Hustace proposed an amendment to Subsection (a) by amending the agricultural lease minimum from five years to three years. Ms. Miura provided background on the amendment. Bill 23 was amended with the contents of Communication No. 96.1, which was introduced by Mr. Hustace and approved with nine "ayes." Mr. Kdneali`i-Kleinfelder reqeuested clarification on the lease terms asking if it only establishes a minimum lease term and if applicants could apply for terms longer than five years. Ms. Miura confirmed. Ms. Galimba thanked Mr. Hustace for speaking with community members, but stated she is not in support of the bill. Ms. Villegas and Mr. Kdneali`i-Kleinfelder also spoke in opposition to the bill. Your Committee on Finance is not in accord with the purpose and intent of Bill No. 23, as amended to Draft 2, and forwards it to Council with a negative recommendation. W AYES NOES ABS EX GALIMBA X HUSTACE X INABA X KAGIWADA X KANEALI`I-KLEINFELDER X KIERKIEWICZ X KIMBALL X ONISHI X VILLEGAS X Respectfully submitted, COMMITTEE ON FINANCE MATT ALI`I-KLEINFELDER, CHAIR ADOPTED: 1