LIHU‘E — Mayor Derek Kawakami signed a bill this week that will change the way the county taxes agricultural land.
Bill No. 2875, Draft 2, introduced by County Councilmembers Billy DeCosta and Luke Evslin, repeals the county’s current agricultural dedication program and enacts a comprehensive revision, which proponents hope will improve the incentive system for agriculture.
“The purpose here is to incentivize farming, and to try and reduce the abuse of our agricultural dedication program,” said Evslin. “It also reduces the administrative burden both for the farmers and for the county.”
There are 1,200 special ag dedications throughout the county, spanning 156,000 acres providing over $8 million annually in tax relief to the agriculture industry and those who own property where agriculture occurs, according to county Finance Department Director Reiko Matsuyama.
Currently, ag land is assessed based on a complicated system of soil rates, which leads to pasture land being taxed at a lower rate than diversified ag land. Under the new system, taxes on land subject to the new agricultural dedication will be assessed at 5% of their fair market value, whether they are used for diversified ag or ranching.
“People with loads of pasture land, their tax will go up — people with diversified ag their bill will go down,” said Evslin.
The bill is revenue neutral — increases in the taxes paid by pasture land will be offset by decreases in taxes paid by diversified-ag land. The dedication will still provide a substantial 95% discount on the tax bills of those who own land where agriculture occurs.
Existing dedications will remain valid until their originally approved dedication period ends, unless they are canceled. Farms within the Urban State Land Use District are not eligible for the program unless the county zoning is agriculture or open.
Under the new program, all agricultural dedications will be for a five-year period rather than 10- or 20-year periods, and farmers will not be penalized with rollback taxes if a dedication is canceled.
Farmers will no longer need to record their dedication with the state Board of Conveyance, and the new program does not require all owners of properties with multiple owners to sign the petition.
“This is a first step in simplifying things for our personnel, while allowing you to farm without fear, and together we’re looking forward to better and brighter things ahead,” said Terry Phillips, the county’s agriculture land use and valuation specialist.
Billy DeCosta, who is a rancher as well as a council member saw the bill as a chance to improve agriculture on island.
We need to promote food production — livestock, fruits and vegetables, grains — to ensure we can and will be sustainable,” said DeCosta. “The time is now to diversify into co-op ranching.”
The ordinance took effect upon Kawakami’s approval and signature Monday at a ceremony attended by council members and government officials.
“It’s an honor and pleasure to sign this bill today which will truly help our agriculture industry propel forward and will further support sustainability on our island now and for future generations,” said Kawakami.
To view Ordinance No. 1132 (Bill No. 2875, Draft 2), visit https://tgilinks.com/3RuyUyY
