Comm No 0029.35 - Testimony - CA-13 - Use of Special Funds in Times of Declared Emergency

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Doug Sensenig 65-1226 Puuki Place Kamuela, HI 96743 dougsensenigOgmail.com 207-706-6432 January 25, 2019 Testimony re: Proposed Charter Amendments CA -7, CA -9, CA -13 I'm Doug Sensenig and I live in Waimea. I have been involved in land conservation over 30 years, as an attorney, land trust board president, and executive director of two land trusts, one of which was Hawaii Island Land Trust. I am here today to speak to you about CA -7,9, and 13. I will speak to CA -7 and CA -13 first because they have many of the same failings. Unfortunately, they both seem to have been written without the assistance of anyone who knows how land conservation works, and they ignore the history of why the voters of Hawaii County decided, by substantial margins, to place the Fund beyond the grasp of the administration. CA -7 has two fatal flaws that require it to be dropped. First, you have already heard that the provision to allow lands acquired with the Fund to be sold will drive matching funds away. So far, we have had $10.7 million dollars in matching funds, which have saved the taxpayers about $2,300 an acre on the property acquired so far. The additional leverage provided by matching funds means the taxpayers have gotten over a 30% bump on their money. Not bad! I don't think the second fatal flaw has been discussed. The flaw arises from ignorance about the way conservation easements are structured. As you may know, conservation easements allow a landowner to sell OR DONATE various development rights on their property in a way that benefits the public, whether for watershed protection, scenic values, habitat, etc. The conservation easement allows a farmer or rancher to protect their land for the public good while being able to remain on the land, manage it, and pass it on to their heirs if they wish. When conservation organizations work with a landowner to protect land, one of their tools is a charitable tax deduction for any interest that the landowner donates rather than sells. This can work to lower the overall cost of the deal to, in our case, the County, and other funders. For example, a rancher decides to protect her land with a conservation easement. She needs some cash up front, because she's land rich and cash poor. But she also likes the idea of being able to offset up to 100% of her ranch income with a deduction that can be carried forward up to 15 years. This special treatment of the donation was enacted by Congress a few years ago, specifically to help farmers and ranchers. So she says, "I'll take 1� of the cost of the easement up front, and take the other 1/2 as a charitable deduction." Bingo. The County is able to save, in this case, 50% of the money it otherwise would have to spend if the deduction were not available. CA -7 must be dropped because the The Internal Revenue Service requires that ALL conservation interests that are donated MUST be in perpetuity if the deduction is to be available. Period. I'm sorry the drafter of CA -7 did not know this, or 1 am sure they never would have proposed it. Comm. No. 29.35