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January3, 2016
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RE: Testimony Against Bill 126
January 5, 2016
Name: Wesley Takai
Dear Members of the Hawaii County Council:
Attached are my November 17, 2014 and May 5, 2015 testimonies against Bill 317 as I
believe the contents are relevant to today's bill. Unfortunately, I could not find Bill 126
on the County's website when the news appeared in the Hawaii Tribune Herald on New
Year's Day. My testimony is based on the information contained in that article.
I worked intensely with the agricultural programs for over 30 years when employed by
the real property division. I talked to farmers, visited many properties that were put
into production because of the agricultural tax benefits, processed rollback taxes for
properties violating the use requirements, and were on 2 review committees that
recommended changes to improve the programs. Major amendments to these
recommendations were passed in 1997 and 2004.
It appears that the primary reason for trying to amend the agricultural sections is the
seemingly large number of abuses that are causing loss of revenue to the County. If
this is true, then there is a need to look at the Council's and the Administration's roles
in this matter. The Council expressed their views by making the changes in 1997 and
2004. It is now the Administration's function to enforce violations and abuses to the
provisions passed by the Council.
Bill 126 is even worse than Bill 317. There is a proposal that seems to advocate and
reward land banking by reducing taxes 30%. At whose expense is this? The author of
this bill wants to close loopholes yet is creating an obvious one here. Ten years is a
long time for the real property staff to continuously monitor another long range
program. Is there a guarantee that this new loophole will be free from abuse?
Please vote against this bill. The provisions for the county's agricultural programs are
sound and legislatively are performing as intended by your predecessors.
If you have any questions or need my assistance, please call on me.
Thank you.
Sincerely, Qg I 1
Comm. No.
Ref. TO: V
Wesley Takai Ref. Date JAN 06 2016
January 5,2016 ATTACHMENT TO BILL 126 TESTIMONY
May 3, 2015
RE: Testimony Against Bill 317
May 5, 2015
Name: Wesley Takai
Dear Members of the Hawaii County Council:
I have attached my November 17, 2014 testimony against Bill 317 below for the benefit
of the new members who were not present when I personally appeared to testify last
November. Regretfully I cannot attend this hearing due to a prior commitment.
The main reason given for proposing Bill 317 was to eliminate the loopholes that allow
property owners who aren't farming to take advantage of the program at the expense
of other taxpayers. These abuses result in a relatively sizable revenue loss for the
county.
I have briefly discussed my position on Bill 317 with some real property personnel on
several occasions mainly to determine if my personal opposition to this bill was
consistent with the division's present and future plans. It was great to hear that the
division is listening to the concerns addressed by the IAAO audit and almost
immediately planned and started to implement enforcement procedures. The revenue
loss due to the seemingly low per acre agricultural assessment may be another issue
that the division is actively reviewing.
It is my opinion that any action on Bill 317 be deferred to give the real property division
time to resolve the abuse and revenue loss issues addressed by the audit. If I can be
of any help, please call on me. The one area that I probably can best assist in is as a
historian on discussions to improve the 40 year old nondedicated agricultural use
assessment program. I am one of the very few citizens of this county who had worked
intensively with this program from its initial passage and had experienced the
amendments throughout the years to better its provisions.
Thank you for your time.
Sincerely,
Wesley Takai
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January 5,2016 ATTACHMENT TO BILL 126 TESTIMONY
November 17, 2014
RE: Testimony Against Bill 317
Name: Wesley Takai
Background: Real Property Employee 39 years (1969 — 2007)
Real property appraiser, supervising appraiser, administrator
Member, real property chapter 19 review committee, 1995 — 1997
Member, real property chapter 19 review committee, 2001 — 2003
Member, Department of Finance, Board of Review, 2008 - 2012
• This is the biggest change in the agricultural program in 40 years.
• Act 175 was passed by the State Legislature in 1973 when the real property
office was still a State agency.
• Act 175 created the provisions of the 20 year dedication and nondedicated
agricultural use assessment programs.
• The nondedicated agricultural use assessment (hereafter to be noted as AU) is
now Section 19-57, Hawaii County Code, as printed on Bill 317, starting at the
bottom of page 1.
• Intent of Act 175: "to encourage owners of agricultural lands to keep lands in
agricultural production or to put back lands taken out of agricultural production
into such production, through tax incentives for keeping or dedicating such lands
for agricultural use on the one hand, and providing tax penalty features on the
other hand to curb speculation".
• Act 175 was a pro-taxpayer legislation giving tax benefits to owners who put
unused agr lands_into production with minimal paperwork.
• Bill 317, on the other hand, is adverse to landowners requiring them to face
"paperwork hoops", time and expenses to get benefits readily available under the
AU program.
• Because Bill 317 will have the greatest impact on the farming community, did
they have any input to this bill?
• The county should not just post an agenda on the bulletin board and in the
Internet 6 days prior to the Task Force and Council meetings and feel the public
was adequately notified of such a major change in the real property program.
• This will have such a great impact on the agr community that the county really
needs to have town hall meetings on this bill and notify all agr organizations of
these proposals.
• The information needs to be sent to the major players for feedback before voting
on this bill.
• What are some of the merits of the AU program?
❖ This is a'good, easy, and flexible program to work with.
❖ Shortly after this program was enacted, there was a large movement to
put vacant lands into production.
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January 5,2016 ATTACHMENT TO BILL 126 TESTIMONY
❖ Literally hundreds of acres have been put into agr use since its inception
and there are currently about 10,000 parcels in this program.
❖ Through various means of communication with farmers, I personally saw
many abandoned coffee farms being brought back to production while I
was the appraiser assigned to North Kona for 19 years.
❖ When the plantations closed, the transition from sugar cane to other agr
uses was seamless primarily because of this program.
+ The increase in this county's agr production and diversity has positively
contributed to the motto, "Buy Local".
• Excerpt from Act 175 informational flyer: Because the Act itself makes
amendments to different sections of the real property tax laws, it is assumed
that the reader is familiar enough with the existing sections of the laws to
understand these amendments in a total context".
• How many council members have read Bill 317 and understand what is said in
this lengthy document? The above Act 175 excerpt also applies to Bill 317.
• The findings and purposes of Bill No. 317 states in part: "The Council
finds it necessary to phase out the nondedicated use assessment program'...
• Why does the Council find it necessary to phase out this program?
❖ Not one reason is listed to back up the above statement.
❖ Is it because the other counties may have repealed the AU program?
> Take care of the needs of this county and don't worry about what
the other counties do with their agr programs.
> This county has the largest number of agr parcels, number of
parcels in agr use, and number of parcels vacant and available for
future agr use.
❖ Is this trying to close loopholes and abuses? If so, what guarantees are
there that the new section proposed in this bill will not also encounter
abuses?
❖ Is the AU program not working?
❖ Have other options to improve the AU program being considered such as
having the real property office implement a monitoring or enforcement
program which up to this time, unfortunately, was not a high priority item
on the appraisal staff's annual schedule?
• Probably the most damaging part of Bill 317 is the proposed addition (page 3),
19-57fe): This section shall be repealed in its entirety on June 30,
2019."
• What and whose advice was given to the Task Force to make this drastic change
to a program that has been highly productive for the past 40 years?
• The dedication and AU programs are both good and can co-exist as
they have for the past 40 years.
• If it's not broken, don't try to fix it.
• A dedication program can be cumbersome and costly, and for this county's agr
program future, Bill 317 is not the "wonder" solution it portrays.
• Two examples of the adverse effect dedications have had in this county are:
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January 5,2016 ATTACHMENT TO BILL 126 TESTIMONY
❖ The bankruptcy of Hamakua Sugar Company that resulted in $18 million
of back taxes for the breach of its 20 year dedication.
❖ The closure of Puna Sugar Company that resulted in thousands of dollars
of back taxes when they closed in the 1980's, again for the breach of its
20 year dedication.
• In summary:
❖ Dedication is not the Viagra for the agr program; a good
enforcement program is and the real property division is working
hard developing this. They have already started by sending out
letters to potential non-users discovered via satellite images.
❖ If there are loopholes and abuses in the present AU program, the
solution is the tightening of office and enforcing procedures, not
making ordinance changes. It's like having a good, reliable car
that gets a flat tire; fix the flat or change the tire, not buy a new
car that may turn out to be a lemon.
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