HomeMy WebLinkAboutREP FC 338 10/19/2004 2002-2004REPORT OF THE
COMMITTEE ON FINANCE
DA'I'S: October 19, ?004 Re: Comm. No. 118/Bill No. 49
PLAC-~;: Council Chambers
MIME: 125 p.m.
Council Chair and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance. to which was referred Bill No. 49, reports as follows:
Bill No. 49. transmitted by Mayor Harry Kim, via Communication No. 1 18, dated
January 22. ?004, amends Chapter 19, Articles 1, 7 and 8, Hawaii County Code 1983 (1995
Edition), relating to Real Property Tax Definitions; non-dedicated agricultural use assessment
and agricultural use dedication.
The purpose of this measure is to define commercial agricultural activities; require commercial
agricultural activity to qualify for 10-year dedication benefits; maintain an agricultural use
valuation method for dedicated properties; allow a shorter dedication period for leasehold
properties in certain circumstances; allows cancellation of dedication without penalty in the case
of certain disasters or disabilities of the primary farmer; reduce severity of rollback penalties for
breach of dedication; provide benefits for Ag use, Non-dedicated properties using two times the
dedicated agricultural use valuation; reduce rollback period for Ag Use, Non-dedicated program;
and eliminate 20-year dedications.
Originally heard on February 19, 2003, this measure was deferred.
At a subsequent Finance Committee workshop held on February 18, 2003, Director of F InanCe
William Takaba presented a two part presentation: one to go over proposed the real property tax
agriculture program and the second part to show the comparisons between the existing ag tax
program and the administration"s proposal in order to have side-by-side comparisons of the
use(s) of property, zoning requirements, length of participation, minimum lots, breach
(exceptions, appeal. and rollback taxes), rollback penalty, homesite value, assessed values and
the desired outcomes (establish sound definition, simplify ag program and improve rules, prevent
obvious abuse and simplify enforcement).
Bill No. 49, Draft 2 was referred to Your Committee, dated February 18. 2003, from Director of
Finance William Takaba. amended the following additional sections:
Article 8, Section 19- (b). Commercial Agricultural Use Dedication:
"..July t_ 2003 may continue to he [lased] assessed at fifty percent of its [°.-se.~^°-!-~!_•_~,
J agricultural
use ~,i^a:,.^~:,.^ w_ ai:^,. ^ ^,..:«:._._ ..:.i..~o a:_~.«,._ t~. c~...o..,~.~. i onnz~ value and Shall be
suhiect to the conditions and provisions of the effective commercial agricultural use dedication."
Article 8, Section 19-(c)(4). Commercial Agricultural Use Dedication
°...market value of a comparably[~+nedi homesite."
Heard on August 8. 2004, this measure was deferred again to allow Your Committee to provide
workshops on this measure in various districts.
FC REPORT NO. 338
Bill No. 49, Uraft 3 was referred to Your Committee, dated August 2, 2004, from Mayor Harry
Kim and Director of Finance William "1"akaba. Mr. Takaba reminded Your Committee that the
Bill is intended to help implement the following goals:
1) Keep prime agricultural land in agricultural use;
2) Encourage new agricultural uses;
3) Return agricultural lands to agricultural use;
4) Promote agriculture industry/employment;
5) Promote equitable taxation; and
6) Promote General Plan goals/policies.
Additional amendments proposed in Draft 3:
• Modifies the dedication period to allow farmers/ranchers who lease their land to
dedicate it for the period of their lease if the period is at least five years.
• For those who do not choose to dedicate their land, the value of farmer's/rancher's
property will be set at twice the dedicated productivity values.
Workshop and community meetings were held on August 24, 2004 at Waimea Elementary
School Cafeteria, September 16. 2004 at the Hilo Coast Processing Company Office,
September 21, ?004 at Hawaiian Ocean View Community Center, September 30, 2004 at
Konawaena Elementary School Cafeteria and October 19, 2004 at Kea'au Community Center.
During the workshop and community meetings, Director of Finance William Takaba explained
to the members of your Committee and the public the amendments proposed in this measure.
Some of the public's concerns were as follows:
1. Value of the leased property should not be assessed as fee simple property.
2. Leasehold farmers cannot obtain long term leases to participate in the ag program.
3. Need more enforcement_ Farmers don't want to suffer because ofnon-farmers.
4. Non-fanners are taking advantage of real property tax intended to help bona fide
farmers.
5. Constitution and State laws favor the farmers (farm dwellings are a permitted use in
the State ag designation).
6. Increase in taxes will come from West Hawaii.
7. Agriculture is a tough business; needs support.
R. I lomesite values penalize the fanner/owner (not part of Bill 49, but this issue was
brought out consistently).
Your Committee on Finance is in accord with the purpose and intent of Bill No. 49, Draft 3, and
recommends it pass first reading.
smc
VA 4:5 FO4s .A&F: .~B9
Cf1UNG X
SAF'ARIK X
ARA KA KI X
ELARIONOFF X
HOLSCHUH X
JACOBSON X
REYNOLDS X
TULANG X
TYLER X
Respectfully submitted
ON FINANCE
~,
AARON S.Y. ('HUNG, CHAIR
FC REPORT NO. _
ADOPTED: _~_ 2~ __