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Home My WebLink AboutCOM 0024.020 2012-2014 Margaret Wille ��w OF 01 Phone No. Hilo: (808)961-8027 •Council Member Phone No. Waimea: (808) 887-2043 Fax No.: (808)887-2072 District 9-North and South Kohala �,.�„`��'.��, •:�� „,..t• E-Mail: mwille @co.hawaii.hi.us HAWAII COUNTY COUNCIL County of Hawai`i Hawaii County Building Holomua Center West Hawaii Civic Center Bldg.A 25 Aupuni Street 64-1067 Mamalahoa Highway,Suite C-5 74-5044 Ane Keohokalole Hwy. Hilo, Hawaii 96720 Waimea, Hawaii 96743 Kailua-Kona, Hawai'i,96740 o f7 -cm On TO: J Yoshimoto, Council Chair n-© and Members of the Hawai`i County Council —< N -t FROM: Margaret Wille, Council Member DATE: May 29, 2014 -- SUBJECT: Real Property Tax Stakeholders Task Force Quarterly Report I request 30 minutes to provide the attached Real Property Tax Stakeholders Task Force Quarterly Report. Please place this matter on the appropriate June 17, 2014 Committee agenda. If there are any questions please call me or my staff at (808) 887-2043. Thank you. MW/dh att. Comm. No. 62 44' 2"0 Ref.To: (-- Serving the Interests of the People of Our Island 9 2�� Hawai`i County Is An Equal Opportunity Provider And Employer Ref. Date MAY 2 Margaret Wille -'0tv.os p' Phone No. Hilo: (808)961-8027 cp.•_, '...4',.• Phone No. Waimea: (808) 887-2043 Council Member � . District 9-North and South Kohala ••- Fax No.: (808)887-2072 � - +c . . ••., E-Mail: mwille @co.hawaii.hi.us TE OF' P • ' HAWAII COUNTY COUNCIL County of Hawai`i Hawaii County Building Holomua Center West Hawaii Civic Center Bldg.A 25 Aupuni Street 64-1067 Mamalahoa Highway, Suite C-5 74-5044 Ane Keohokalole Hwy. Hilo, Hawaii 96720 Waimea, Hawaii 96743 Kailua-Kona, Hawaii,96740 STATUS REPORT FROM THE REAL PROPERTY TAX STAKEHOLDERS TASK FORCE May 29, 2014 The Real Property Tax Stakeholders' Task Force is continuing to work in collaboration with the Finance Department reviewing and assessing the recommendations of the International Association of Assessing Officers (IAAO) consultants. As part of its assessment, the Task Force is also considering ways to stimulate economic activities, such as consideration of a small business enterprise program that would afford some short-term real property tax relief for start- up small businesses. Our work comprises three interrelated components—intra-departmental matters, inter- governmental arrangements, and proposals for Council action. Since receipt of the IAAO report, the Department has on its own been working through many of the IAAO recommendations addressing intra-departmental, inter-governmental arrangements, and enforcement issues related to various IAAO recommendations. The Task Force will continue to support and monitor those administrative components and expects to detail the status of those administrative matters in the next report to the Council. In particular the Task Force has stressed how improved coordination with other governmental agencies will afford the County with improved means of enforcing the criteria for certain exemptions. For example, the Task Force intends to support one or more options to ensure compliance with the criteria for any homeowner exemption. The homeowner's exemption (HCC § 19-71) provides a partial reduction in real property taxes to those who make this island their home. Various options to ensure that those seeking this exemption do in fact reside here, and don't simply intend or plan to reside here are being considered, e.g. require that the applicant document residency such as by way of a drivers license, voter registration, or by having filed a resident status income tax return. The Task Force is taking a look at the homeowner exemption program in the County of Maui that is based on tax return resident status with enforcement based on information available from the state tax office. Following the prolonged delays that resulted from the Sunshine Law ramifications, the Task Force did jump onto one issue of particular concern to the Finance Department, which would assist in its proper appraisal of commercial properties—to wit, allowing the Department to use Serving the Interests of the People of Our Island Hawai`i County Is An Equal Opportunity Provider And Employer May 29, 2014 Page 2 of 2 one additional method of property valuation—the income approach. That Task Force recommendation is now before the Council in the form of bill to accordingly amend the County Code. The Task Force's current track is to focus first on agriculture related issues, then residential- homeowners issues, then commercial and other significant categories. We would prefer to bring any related bills or resolutions to the Council in bundles of related legislation, rather than piece meal. With respect to the real property tax programs that provide relief for agricultural activities on agriculturally zoned land, the Task Force has focused on how to handle the Dedicated (Code § 19-60) and Non-Dedicated (Code § 19-57) Agricultural use programs. The Department reported that the Dedicated Agricultural use program is working well (under 1000 participants; loss in tax revenue is approximately 2.6 million). On the other hand, the Department reported that the Non- dedicated Agricultural use program, as currently structured, is relatively lax and allows for abuse (10,666 participants; loss in tax revenue is approximately 28.3 million). The Task Force is looking at various options to revise this program and allow time for those within the program to bring their agricultural operations into alignment with the program criteria. The Task Force has informally adopted a Statement of Task Force Goals, but has not yet been formally approved. A copy of that Statement of Goals will be provided to the Council. In summary this Task Force aims to address the most problematic issues in order to bring recommendations to the Council before the end of this Council term. As a Co-Chair, I conclude by saying the obvious, that if we are able to eliminate abuses and establish more effective enforcement mechanisms, we hopefully, in the not so distant future, have the option of proposing reduced tax rates in light of having addressed the most prominent loopholes in the County's current real property tax program. Resp ctfull 1 su•mitted, Margaret Wille, Co-Chair Real Property Tax Stakeholders' Task Force