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HomeMy WebLinkAboutCOM 0118.036 2002-2004 rr or.y__ AARON S.Y. CHUNG ~);4 Phone: 961-8396 (bannlnremhei~ FAX: 961-8912 ~i': ~>`oi~M~~ OFF/CE OF THE COUNTY COUNCIL Crninry gjHnwai'i ll~nrni'f ('nuns- Baildin~ ?J .d upuni S7reei lli[n, llan~ai'f 96720 i",' c-+ c- . October 20. 2004 N ~i IY): James Y. Arakaki, Chair ~ and Members of the County Council FROM: Aaron S.Y. Chung, Chair fir. Finance Committee SUBJECT: Bill 49, Dratt 3 -Agricultural Land 'T'axation Community Meeting in Kea'au On October 19, ?004, there was a meeting at the Kea`au Community Center regarding the above bill. 1 would like to submit the summary minutes of this meeting for the official record, so they may be available to all concerned. Thank you for your attention to this matter. ASYC/ja Attachment Comm. No. I I 3(n Ref. 70: R<f. _ COMMUNITY MEETING ON BILL 49, DR. 3 AGRICULTURAL LAND TAXATION Kea`au Community Center Kea'au, Hawaii Tuesday, October 19, 2004 The following is a summary of the proceedings of a community meeting held by Finance Committee Chairman Aaron S.Y. Chung at the Kea'au Community Center in Kea`au, Hawaii, on Bill 49, Draft 3, which amends Chapter 19, Articles 1. 7 and 8 of the Hawaii County Code 1983 (1995 Edition), relating to Real Property 'Cax Definitions; Non-Dedicated Agricultural Use Assessment and Agricultural Use Dedication. The meeting was convened at 6:10 p.m. The attendance was as follows: Members of the Public: Susan O'Neill Donald Ikeda County Representatives: Aaron, S.Y. Chung, Finance Committee Chairman Bob Jacobson, Councilmember J. Curtis Tyler, III, Councilmember William Takaba, Finance Director Wes Takai, Real Property Tax Administrator Craig Masuda, Deputy Corporation Counsel Constance R. Kiriu, Legislative Auditor Rodney Oshiro, Legislative Analyst Skip Bethea. Legislative Auditor Assistant Jeanette Aiello, Council Services Supervisor Chair Chung turned over the proceedings to Mr. Takaba, who had passed out a handout explaining the nine points of interest in proposed Bill 49. Mr. Takaba went explained each, as well as the examples provided on page two of the handout. Further, he explained the third page of the handout which delineates the difference between the proposed non-dedicated and 10-year dedication program for different types of crops and land valuations. Ms. O'Neill asked about a situation in which the property was zoned Ag and was in Ag use. but there was not the $2,000 annual income required for the dedication program. Mr. "fakaba replied that the party would be advised to choose the non-dedicated Ag program, which provides similar benefits, only they arc 50 percent of those in the dedicated program; however, it's still much lower than not claiming Ag, which would result in the land being valued at market value. Ms. O'Neill stated she is supportive of the proposal, and that it seems to address problems being experienced in the community. Page 1 Kea'au Community Meeting October 19, 2004 Bill 49. Draft 3, Agricultural band Taxation Mr. "Cakaba stated that a Draft 4 of the bill will come forward. The new draft tends even more towards helping the farmer. Ms. O'Neill asked if senior citizens have shown interest in dedicating their property to Ag, as they may not want to commit for that length of time. Mr. Takaba stated it is a concern for seniors, but there is an escape clause in the proposal, which provides for cancellation in the case of disability or disaster. Mr.Takai reiterated this statement. Mr. "Cyler asked what if the land owner transfers the title of the property to a new party and the use is continued. Mr. Takaba stated if the property owner sells or transfers the property and the Ag use carries on, the dedication would also carry on. Mr. Tyler asked how the land owner would know about this provision. Mr. "Cakaba replied that when a landowner applies for a dedication, the information would be provided to them. All rules regarding the Ag program would he included. Mr. Tyler asked if there was an automatic rollback provision when the property is transferred. Mr. "Cakai stated that when the property is dedicated, it is recorded with the Bureau of Conveyances. When the property is sold, the real estate representative would see that in the property title. It is the responsibility of the real estate agent to disclose information regarding the title. They would inform the buyer that the dedication runs with the land and in order to receive the benefit, the Ag use would have to he sustained. Mr. Tyler stated there should be a notice upon recordation, so that the dedication would show up the reservations contained in the deed to the property. Mr. Takaba stated that once Bill 49 is adopted and becomes law, the Real Property Tax Office would need to have informational booklets made to provide to applicants, realtors and escrow companies. Mc Tyler mentioned that the new provisions in the upcoming Draft 4 will enable the property under the house site on agricultural lands to be valued at the highest agricultural rate, rather than at the market value. He asked Ms. O'Neill her opinion. Ms. O'Neill stated she could see no detriment other than revenues lost to the County. Mr. Bethea asked if there has been an estimate of the revenue impact to the County. Mr. Takaba stated that the revenues would have gone up $2.5 million with the enactment of Rule 7. Mr. Bethea asked if the proposal was meant to he revenue neutral. Mr. Takaba stated revenues to the County weren't considered, but the changes in the upcoming Draft 4 will result in less revenues to the County. Mr. l~akai stated the revenues as it currently stands with the enactment of Rule 7 would actually he nearer to $I.5 million. Mr. ~Cyler asked how those folks on Agricultural land but not in Ag use will be taxed. Mr. Takai stated that currently, landowners who have their home on Agriculturally zoned land but have not claimed Ag use, either dedicated or non dedicated, are taxed at market value. Mr. Takaba stated that if they are in the homeowner's class for their home, they can get the homeowners' exemption. Page 2 Kea'au Community Meeting October 19, 2004 Bill 49, Draft 3, Agricultural [.and Taxation Ms. O'Neill asked if there will be more checking on properties to verify the use. Mr. "Fakaba expressed the "fax Office is not doing as much as they would like because of staffing. They would like to visit properties more often. He stated the proposal will not change their current procedures. He said that if the upcoming Draft 4 passes, it will make the work easier. The value of the home site will be fixed. As the law currently stands, there is some judgement that has to be made. Ms. O'Neill asked if this would benefit the small farmers with little income. Mr. "I~akaba stated the proposal was meant to benefit the small truck farmers and attempt to eliminate abuse. Mr. l~ylcr stated that one of the assessors in Kona had expressed to him that the changes from the enactment o1' Rule 7 had generated an enormous amount of work for the Tax Office. He stated people arc trying to cheat the system. I le said a misrepresentation of the use of the property for folks who have applied for Ag use would result in a penalty for perjury of $1,000. Mr. Takai stated that there is a penalty for fraud if a landowner is claiming the homeowners' exemption and are not living in the home. and that fine is $100. Further, he said the exemption would be denied for the current year in which the violation occurred and for two years prior, so that the taxes that should have been paid would become due and payable, along with the $100 fine. There being no more questions or comments, the meeting dispersed at 6:40 p.m. ja Page 3