HomeMy WebLinkAboutREP FC 178 2014/06/03 (2012-2014) REPORT OF THE
COMMITTEE ON FINANCE
DATE: June 3, 2014 Re: Comm. No. 893/Bill No. 256
PLACE: Council Chambers
Hilo, Hawai`i
TIME: 9:30 a.m.
Council Chair and Members
Hawai`i County Council
Hilo, Hawai`i 96720
Bill No. 256, transmitted by Finance Director Nancy Crawford, via Communication No. 893 dated
May 15, 2014, amends Chapter 19, Article 7 Tax Map; Valuations, of the Hawai`i County Code
1983 (2005 Edition, as amended), relating to valuations; considerations in fixing.
The proposed bill modifies Section 19-53 of the Hawai`i County Code to include the "income
approach" as a consideration in the valuation of taxable real property.
Several Council Members expressed their concerns with the bill.
Council Member Wille spoke in support of the bill. She stated that the "income approach" was
brought forth by the Real Property Tax Stakeholder's Task Force as an "administrative tool"to help
with real property tax assessing.
Finance Director Nancy Crawford and Real Property Tax Administrator Stan Sitko appeared before
Your Committee for questions. The committee was informed that the three basic approaches to
assessing property or market value is cost of the land, sales data or comparables, and the "income
approach." Ms. Crawford stated that adding the "income approach" will broaden the ability to
fairly assess the value of real property tax, particularly in commercial properties. She included that
it will provide more data to effectively assess commercial properties, helping to prevent board
appeals and save the county money. Mr. Sitko informed the council that the "income approach"
method is recognized by the Appraisal Institute and the International Association of Assessing
Officers (IAAO). He added that it was recommended by the IAAO to include the "income
approach"to the Hawai`i County Code. Mr. Sitko added that the County's existing taxation system
could handle adding income data to help assess property value; however, there would be a cost to
collect the data. Furthermore, in discussion, he noted that models would need to be set up for the
"income approach", but the appraisers would need to use whatever value is most appropriate.
Council Member Ford, who opposes the bill, feels it should have the word "commercial" included
in the language for more clarification. She also stated that she was concerned about how farm
properties would be handled.
For informational purposes, Council Member Ford voted "kanalua" then "aye."
FC Report No. 178
FC-178 Page 2 June 3, 2014
Your Committee on Finance is in accord with the purpose and intent of Bill No. 256, and
recommends its passage on first reading.
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AYES NOES ABS EX Respectfully submitted,
EOFF X
FORD X COMMITTEE ON FINANCE
ILAGAN X
KANUHA X
KERN X
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ONISHI X e'14(}_ r / Ej -
POINDEXTER X VALERIE T. POINDEXTER, CHAIR
WILLE X FC REPORT NO.: 178
YOSHIMOTO x ADOPTED: JUN 1 8 2014