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~~AWAI`I COUNTY COUNCIL
October 28, 2004 -
TO: Council Members
FROM. J. Curtis Tyler, III, Vice Chan ~
RE: Bi1149, Draft 4 1
Agricultural Tax Bill
This is to transmit Bi1149, Draft 4, which includes the following amendments. The amendments discuss the
difference between Draft 3 and Draft 4:
1. Section 19-2(a)(1): Added a definition for "agriculture use value".
2. Section 19-2(a)(2): Clarified definition for "commercial agricultural activities" where the
minimum $2,000 gross income is per farm operation, which may include
multiple parcels that need not be contiguous.
3. Section 19-2(a)(3): Deleted reference to the areas that "commercial agricultural use dedication" do
not apply, such as homesite, and setbacks. With the change in the way a
homesite would be valued under Bi1149, this reference is not needed.
4. Section 19-2(a)(7): Amended "director" to replace the word "subordinate" with "representative."
5. Section 19-2(a)(8): Added a definition for "farm dwelling," which is similar to that in the Zoning
Code and Chapter 205, HRS, Land Use Law.
6. Section 19-2(a)(9), (11), (14): Added the words "but not limited to" for consistency.
7. Section 19-2(a)(13): Amended the list of agricultural activities to say "and/or" instead of "or".
8. Section 19-2(a)(13): Deleted reference to the areas that "non-dedicated agricultural use assessment"
do not apply, such as homesite and setbacks. With the change in the way a
homesite would be valued under Bi1149, this reference is not needed.
9. Section 19-(2)(a)(14): Added "noni" to the list of possible orchard crops.
10. Section 19-53(a): Added the phrase "Except as provided below" in order to allow the
determination of value for agricultural real property to be valued on its
productivity value.
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11. Section 19-53(a)(2): Added the exception to value the use of agricultural land without regard
to any value the land may have for other purposes or uses. Required the
director to update the ag use values at least every five years and to
consults with agriculturalists and/or experts in the field. Required ag use
rate values to be established by rules.
12. Section 19-53(e)(2)(A): Repealed provisions of Ordinance No. 04-67, which allowed the homesite of
an agricultural parcel to qualify for Homeowner Class. The policy change
would allow a farm dwelling site to be valued at the highest agricultural use
value. Under the current productivity values, the highest value is $2,000.
13. Section 19-57(a): Amended language to be consistent with rest of bill. "Lands classified and
used for agriculture and which are not dedicated pursuant to Article 8, section
19- maybe assessed for real property tax purposes [
l~~~t~-~kete] as established in subsection (a)(2) .
14. Section 19-57(a)(2): Amended language for consistency to ag use value definition. "shall be
assessed at two times the dedicated [greduetivity] agricultural use value as
established by the director of finance under this chapter.
15. Section 19-57(a)(3): Added the method for detemuning the value of a farm dwelling site would be
at the highest commercial ag use value. This would supercede Finance
Director's Rules 7 and 8 regazding homesite value. Provided that the
maximum farm dwelling site area to be assessed at the highest commercial ag
use value does not exceed one-fourth acre.
16. Section 19-57(b): Clarified that all portions of land not committed or used for a specific ag use
will be assessed on the proportional makket value of the total property.
17. Section 19-57(d)(3): Clarified "The amount of deferred taxes shall be based on the difference [itr}
between assessed market value [betiveex-tlu~] at highest and best use and the
assessed agricultural use value of the land at the tax rate applicable for the
respective yeas, with a ten percent penalty."
18. Section 19-60(c)(4): Clarified that "The portion of land that is not dedicated for commercial
agriculture use shall be assessed [at-t~ket
value] based on the proportional
makket value of the total property.
19. Section 19-60(c)(5): Added the method for determining the value of a farm dwelling site would be
at the highest highest commercial ag value. Under the current productivity
values, the highest value would be $2,000. Provided that the maximum farm
dwelling site area to be assessed at the highest commercial ag use value does
not exceed one-fourth acre.
20. Section 19-60(c)(5): Added the method for detemilning the value of a farm dwelling site would be
at the highest commercial agricutlural use value. This would supercede
Finance Director's Rules 7 and 8 regarding homesite value.
21. Section 19-60(g)(3)(A): Clarified calculation of deferred or rollbax taxes for commercial ag use similaz
to #17.
22. Section 19-60(h)(1): Clarified "A recognized natural disaster bevond the farmer's control".
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