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Home My WebLink AboutCOM 0923.004 2014-2016 P/Fc (iri,I6 .125 July 14 2016 RE: Bills 218 and 219, Testimonies and Comments July 18, 2016 Name: Wesley Takai Dear Members of the Hawaii County Council: Because my testimonies would take much more than the allotted 3 minutes, attached are my July 14, 2016 comments on proposed changes to Bills 218 and 219. The dedication and nondedicated programs are both good agricultural programs and can co- exist as they have for the past 40 plus years. 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 nonedicated 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, Sincerely, WESLEY TAKAI Comm. No. Ref. To: 11c(_- Ref. Date JUL 1 8 2 916 r SUBJECT: Comments to Proposed Council Bills 218 Public Hearing: Monday, July 18, 2016 BILL 218 • Page 1 SECTION 1. Findings and purpose;: 3rd and 4th sentences: "This ordinance provides an opportunity for those currently in the non- dedicated program seeking to participate in either the three year or ten year commercial agricultural use dedication programs to made an necessary adjustments in their farming options prior to when the existing non-dedicated program is fully phased out on December 31, 2017. This ordinance also allows owners to remain in the revised non-dedicated program rather than participate in one of the commercial dedicated programs, but as seventy percent of the market value for the qualifying agricultural use land." ❖ There are conflicting positions in the two sentences above which may have been an oversight of the author of this bill. If the non-dedicated program is fully phased out on December 31, 2017, how can anyone remain in the revised non-dedicated program rather than participate in one of the commercial dedicated programs regardless of what the per acre assessment is? ❖ If the non-dedicated program is fully phased out, I'm totally against this proposed bill. ❖ If the non-dedicated program remains with modifications, I would like to comment on some of the other suggested changes recommended in this bill. • Page 2 SECTION 2 ""Section 19-57(b) Assessment" (1) The portion of land that is committed to specific nondedicated agricultural use shall be assessed at ... (A) Three times the dedicated agricultural use value as established by the director under this chapter for tax year beginning 2017; and (B) Seventy percent of its market value for the tax year beginning 2018." ❖ The idea of using three times the dedicated agricultural use value, rather than the present two times, have been discussed in the past with little opposition. ❖ The idea of using twenty five percent of its market value was also discussed in the past and seemed to be a possible compromise rate. ❖ The idea of seventy percent of its market value as proposed in this bill is a first time concept for this writer. ❖ The 2001-2003 Chapter 19 review committee on which I was a member considered proposing a twenty five, fifty, and seventy five percent of market value to be phased in three years but eliminated the proposal due to the negative result of a similar bill in Honolulu as described below. ❖ Coincidently at that time City and County of Honolulu had passed a bill assessing farm properties at ninety percent of market value. ❖ When the taxes on the new assessments were sent out, the complaints from the farmers forced the council to almost immediately rescind the ninety percent provision and brought back the assessment to the level before the enactment of the ninety percent provision . (2) A farm dwelling site shall be assessed a [ -- - -- :-- --- .: ' . . - . -] seventy percent of its market value, provided that the maximum farm dwelling site area to be assessed at [ -- - - - . - --- -: ' . - . -] seventy percent of its market value shall not exceed one-fourth acre. ❖ Why seventy percent? ❖ Why not one hundred percent as residential properties are assessed at one hundred percent? ❖ The 2001-2003 Chapter 19 review committee had recommended that the homesite be assessed at a comparable residential house lot value. 1 ❖ The council changed the wording to the highest commercial agriculture use at the last minute. ❖ Food for thought— if the homesite portion is assessed at a comparable residential lot, should the homeowners land classification, Section 19-53(e)(2)(A), also be amended and granted to the homesite area for owners of affected parcels for equality and uniformity purposes? ❖ This will create multi-land classifications for qualified property owners who reside on their property as their principal residence and who will, at the same time, enjoy the use assessment on the agricultural portion of the property. ❖ The creation of the multi-land classifications will not be popular with the real property staff as it will create additional workload and maybe other unforeseen issues. • Page 2, SECTION 19-57 "19-57(d)" , (d)(1), (2), and (3) referring to "deferred or rollback"tax. ➢ Deferred and rollback tax have been used synonymously for many years. ➢ The proposed changes to delete "deferred" and use "rollback"tax are technically correct. ➢ Not all rollback taxes imposed on agricultural lands involved deferred taxes. ➢ The short section defining "deferred"tax was introduced by the State Legislature in 1973 in Act 175 and brought over to the County Code by Ordinance 613 effective July 1, 1981 when the real property function was transferred from the State to the County. ➢ The short"deferred"section in the County Code was repealed by the Council years ago. ➢ Unfortunately, time constraint in preparing this testimony did not allow me to find the wording for"deferred"tax in older versions of the County Code so clearer understanding and intent of "deferred"tax can be understood by all council members. ➢ If this technical change is approved, changes throughout Chapter 19 should also be made, including Section 19-60, commercial use agricultural dedication. • Short term commercial agricultural use dedication ➢ Should the nondedicated assessment rate increase to twenty five percent or seventy percent, there may a number of applications for the short term commercial agricultural use dedication. ➢ Recommend that the short term dedication be for five years rather than the proposed three years. ❖ The dedication process creates a great amount of paperwork for both the county staff and taxpayer, especially if the owner has many parcels to dedicate. ❖ The five year term will lessen the frequency of paperwork for both parties and will save the owner some money as the recording fee for the dedication will be every five years rather than three. 2