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HomeMy WebLinkAboutCOM 0118.000 2002-2004 MTV os py~ Harry Kim ~ j,~'~ Dixie Kaetsu Mayor ~ ~ Managing Direcror ~T~ ~ •N'~ County of Hawaii 25 Aupunf Strec4 Room 215 Hilq Hawaii 96720 ~ 1 _ (808)961-8211 • Fax (808)961-6553 January 22, 2003 The Honorable Chairman James Y. Arakaki and Members of the County Council County of Hawaii Hilo, HI 96720 Dear Chairman Arakaki and Council Members: As you know, one of the major goals of my administration has been to ensure that our real property tax laws are fair, adequate, and up-to-date. The task of reviewing our tax laws and proposing appropriate changes to these laws has been assigned to Finance Director, William'I'akaba. To carry out this assignment, Takaba assembled a team of knowledgeable and interested individuals to work with him. The team, known as the Real Property Tax Discussion Group, consists of representatives of the Department of Finance and the Offices of Management, Corporation Cowtsel, Legislative Auditor, and County Clerk. The Group meets every two weeks to review and propose improvements to different sections of the County's real property tax laws, and the policies and procedures of the real property tax division. Since September 2001, the Group has been working on the county's agriculture tax program. Part of the work includes receiving input from members of related organizations, such as the Big Island Farm Bureau, the Hawaii Cattlemen's Association, the Leeward Planning Conference, and the Hawaii Island Board of Realtors. Members of my cabinet and 1 meet with the Group periodically to review its progress and provide further input and guidance. After one year and four months, we are pleased to submit the enclosed bill for an ordinance to amend Chapter 19, Articles 1, 7 and 8 of the Hawaii County Code. We believe these amendments address our goals of simplifying and improving the County's agricultural tax program, supporting the agriculture industry and employment, and promoting equitable taxation. They are not being proposed to increase revenues. Q ~ / ~ 9 Comm. No. I File No. ~jC.. C- Ref. To: ~ Ref. Date JAN 2 4 2003 Honorable James Y. Arakaki and Members of the County Council Page 2 January 22, 2003 Highlights of the proposed revisions are enclosed. Due to the complexity and importance of these revisions, we feel that a workshop to discuss them in greater detail is appropriate. If you agree to a workshop, Bill Takaba will work with your staff in its coordination. Future work for the Real Property Tax Discussion Group includes exploring ways to provide relief for homeowners of properties with rapidly rising values and for homeowners who are not able to afford the taxes that they now pay. They will be reviewing such programs as the "circuit breaker," deferred taxes, and exemptions based on values. We look forward to working with you and your staff very closely as we do this. Thank you very much. Aloha, I Harry Krm" Mayor Enclosure HIGHLIGHTS OF PROPOSED REVISIONS ARTICLE 1 Definitions Add definitions that clarify terminology [Sec. 19-1(a)]. ARTICLE 7 Non-dedicated Agricultural Use Assessment 1. Zoning requirements. Require properties to be in one of the following (County) zoning districts: agricultural, residential and agricultural, family agricultural, intensive agricultural, or agricultural project [Sec. 19-57(a)(1)~. Currently, property must be in the (Stale land use) agricultural district. 2. Assessed values. Lands will he assessed at a percentage of the land's market value 25°fi for the tax year beginning July 1, 2004; 50% beginning July 2005; and 75% beginning July I, ?006 and thereafter Sec. 19-57(x)(2)]. Currently, "productivity values" arc assigned, similar to the 10-year agricultural dedication program. 3. Tax rollback. When a breach occurs, the look-back period for the rollback tax will he two years plus the current ~ Sec. 19-57(4)(2)]. Currently, the look-back period is up to ten years. ARTICLE 8 Commercial Agricultural Use Dedication I. Use. Require that new dedications be for ten only and the dedicated property be used for commercial purposes (gross revenues of $2,000/year) Sec. 19-(a)]. Currently, the dedication is for ten or twenty years, and both commercial and non- ronunercial uses are allowed. Properties in the 20-yetU agricultural dedication program are subject to the same requirements as the 10-year dedication, except for the tc rm ujdedicntion an4 the ta_r be nc,fit received (50°Io of its "productivity nahie 2. N;ffect on existing 20-year dedications. Allow properties in the 20-year agricultural dedication at July I . ?003 to continue the dedication [Sec. L9- (b)~. 3. 'Coning requirements. Require that property in the 10-year agricultural dedication program he in one of the following (County) zoning districts: arricullm'al, residential and agricultural, family agricultural, intensive a~*ricultural, a r_ ig cultural project disu~ict, or any other 4isU'ict with the approval of the Planning Director Sec. 19- __(a)(3)I. Currently, there is no zonin,~~ reyunenumt, except pasture use i1 nut allowed on residentiala.oned properly. 4. Assessment of nun-dedicated section(s) of land. Specify that the portion of lan4 lhal is not dedicated for commercial agriculture use shall be assessed at market value and the homesite portion ~~hall he assessed at market value of a comparably-size4 homesite Sec. 19- _(c)(41~. Curremly, this is specified by the Director of finance. Highlights Page Two January 22, 2003 S. Breach of dedication; deferred or rollback taxes. • Will occur if the property is sold, unless the buyer assumes the dedication in writing Sec. 19- (g)(1)(B)]. Currently, the hnyer anlornaticnll}~ a,rsi~mes tDie dPdlCa/LOn. • Will occur if the property is not used as dedicated for 6 consecutive months, unless the non-use is part of an approved farm plan Sec. L9- (a)(2)(A)]. Currently, breach of dedication occurs after 12 conse~~ittii~e mm~~h.c of non-use, with no exceptions Sec. 19-(g)(2)(A)]. 6. Breach exceptions. Allow cancellation for natural disasters, when land can no lont*,er be used for the dedication, or the death or disability of the primary farmer [Sec. 19-__(h)~. Currently, no exceptions are allowed. 7. 'fax rollback. • If the property has been in its dedicated use for 5 years or less, apply rollback taxes from the beginning of the dedication; • If in use for 6 years, apply rollback from 4 years back; • If in use for 7 years, apply rollback from 3 years back; • If in use for 8 or 9 years, apply rolhack from 2 years back Sec. 19-(g)(3)(F)]. Currently, rollback taxes are calculated from the beginning q/~ the dedication, regardless of how long the property was in its dedicated use.