January 13, 2025 • 39 mins
Councilmember Heather Kimball details Hawaii County's agricultural tax program changes designed to prevent land speculation while supporting legitimate farmers and ranchers through targeted tax benefits.
• New requirements for non-dedicated agricultural land programs include upfront documentation of legitimate farming activities
• The current non-dedicated ag program is sunsetting in 2026, with two replacement options: a 10-year program (lowest tax rates) or 3-year program (more flexibility)
• Farmers must submit documentation like organic certifications, farm plans, or NRCS agreements
• Qualifying agricultural activities must generate $2,000 annual income or follow standard industry practices
• New programs allow farmers who live on their land to receive both ag land valuation benefits AND homeowner tax class benefits (including 3% valuation cap)
• Property owners must apply by September 1st each year for the following tax year
• Application forms and information available on the Real Property Tax website
• County is exploring creating a curated list connecting landowners with farmers seeking land to lease
• Future initiatives aim to convert small subdivision ag lots to rural designation while maintaining tax benefits for those farming smaller parcels
For questions about Hawaii County's agricultural tax programs, contact the Real Property Tax Department or email Councilmember Heather Kimball at heatherkimball@hawaiicounty.gov.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 2 (00:15):
Aloha.
Today's episode is sponsored bythe Livestock Extension Group
out of the University of HawaiiManoa College of Tropical
Agriculture and Human Resilience, the Center for Ag
Profitability out of theUniversity of Nebraska-Lincoln
and the Western SustainableAgriculture Research and
Education Program.
Speaker 3 (00:31):
Aloha and welcome to the Livestock Palau, a podcast
aimed to provide educationalsupport, information, guidance
and outreach to our livestockstakeholders in Hawaii and the
US.
We are your hosts, Belay Oshiroand Shannon Sand, and today
we're talking with HeatherKimball, who is in the Hawaii
County District 1 Councilmember.
Thank you very much for joiningus today.
(00:51):
Yes, thank you.
Thank you so much for having me.
It's good to be here.
Yeah, so maybe we'll just starta little bit if you want to
just share with everyone alittle of your background and
your current position.
Speaker 4 (01:03):
Yeah, happy to.
So my name is Heather Kimball.
I'm a Hawaii County Councilmember serving my third term now
for District 1, which startsjust outside of Hilo at the
Singing Bridge, goes all the wayup to Waipio and even covers a
small portion of the Waimea area.
My background actually is notas a politician but as a
(01:23):
scientist.
My first career was actually asa geneticist, working for
Lawrence Berkeley National Labon the Human Genome Project.
I then went and got a master'sdegree in tropical conservation
and environmental science, whereI worked on decision support
tools for land use management,which sounds like a technical
(01:43):
field, but actually it's reallyjust using GIS data geographical
information to improvedecision-making around land use.
And then you know, through mywork with that, what I
discovered is many people inpolicymaking positions and
decision-making positions don'tuse databases and information
for making good decisions, andso I understood that.
(02:10):
You know, if I wanted to reallymake a difference in how we
considered land use and therelated issues to that,
including agriculture, I neededto understand and be in a
decision-making position, andthat's how I ended up running
for office and serving here inthe county council.
In addition to that work, I'vealso worked for the College of
Ag at the University of Hawaiiat Hilo, as well as CTAR doing
(02:31):
various projects mostly relatedto the genetics, but also
looking at some other issues interms of crop diseases.
So I do have some backgroundwith the College of Ag here in
Hilo.
Speaker 3 (02:44):
Yeah, which I didn't know when I met you at the
meeting and we talked a littlebit about that, that's you know.
So I always say small worldright.
Speaker 4 (02:52):
Yeah, I will say, even though I have this
background in agriculture, I donot farm and I have tried to
grow things and I have a blackthumb.
So, despite the plethora ofeducation that I have around
biology and making things live,I'm not very good at it, so I
have a lot of respect for peoplewho can keep things, whether it
be plants or animals, alive.
Speaker 2 (03:13):
I was just saying.
I was like I have better luckwith animals than plants, so we
all have our specialties.
Yeah, so can you tell us aboutsome updates for non-dedicated
ag land?
What is it and what does itmean for, like Hawaii County
producers potentially?
I know that was a lot ofquestions in one, but I'm just
going to throw it out there soyeah, yeah, I.
Speaker 4 (03:34):
I'd like to actually start, if I may, with some
background.
You know, first of all, youknow the the reason that we
started looking at the ag taxprograms is because, back in
2012, they were identified by anexternal audit as areas that
had potential for fraud, wasteand abuse in terms of our tax
(03:56):
code policy.
And, subsequent to that audit,there were working groups, there
was a report that was producedin 2019, but no real code
changes had been implemented.
And so, in conjunction withthose things that happened
within the county, there werevarious ag assessments done of
(04:19):
particularly the Hummelkuhlregion that I represent, as well
as the county at large.
And again, one of the thingsthat was identified as an issue
for our local farmers andranchers is the issue of
speculation on ag land and howthat speculation drives up costs
in terms of folks looking forland to purchase and build a
(04:42):
farm on, or people just lookingto lease land, and so, um,
that's what we started lookingat making modifications to the
programs and, in particular, thenon-dedicated ag program is
where, um, we've seen, you know,historically, the most abuse,
and you know it's it's I.
(05:04):
I don't want to like pointfingers at anybody for anything,
but it's very, very easy tobasically park your money here
in Hawaii in land, so you knowyou can invest for a 20 acre
parcel fence, it stick a cow on,it, say I'm farming, and you're
going to pay the minimum tax of200 a year and you're always
(05:26):
going to make money on that ifyou're an investor, because I
mean, we have similar issues forcertain things in Nebraska
where yes, yeah, I get it.
Speaker 2 (05:36):
I would like people use it as an inflation hedge
investors who have lots of moneyin large portfolios.
We don't need to say name names, but yes, yeah.
Speaker 4 (05:45):
Yeah.
Speaker 1 (05:45):
And it is a national problem and in fact, you know
what I learned through all ofthis going.
Speaker 4 (05:52):
There was an international sorry, yeah, it
wasn't international but therewas an international tax
assessors meeting which I wentto and I was fascinated to learn
that this is a probleminternationally and that
actually Hawaii has some of thebetter programs, which I thought
actually was interesting.
We were highlighted in adocument that they had that
(06:13):
talked about the differentprograms.
So it is certainly a challengeand that's really what we were
trying to do with this isbasically ensure that folks that
are using the, the agdedication programs, to take
advantage to get some taxbenefits for the ownership and
(06:34):
use of that land that they'reactually doing farming right, um
, and, and that's that's kind ofthe fundamental purpose.
How that manifests is basicallywe're asking for the documents
up front and that there's manydifferent forms of documentation
that we'll take.
But I had somebody say so youbasically mean there's more
(06:54):
bureaucracy and it's like, yeah,basically, but we've tried to
make it as simple as possible,because one of the things we
recognize is that farmers andranchers don't have a lot of
time to do paperwork, and so wewanted to make it as
straightforward and simple aspossible by, in you know, taking
various forms of documentationthat they might already have.
(07:15):
So if they have, for example,an organic certification or a
food safety certification orthey worked with NRCS to do a
soils plan or some kind of farmplan with NRCS, we'll take all
those documents and they don'thave to do anything else.
If they don't have any of thosedocuments, we'll take a farm
(07:37):
plan and that we have a formthat's available on the Real
Property Tech's webpage thatfolks can fill out and they can
submit that as an alternative toany of those other documents.
But they don't need to do a FARplan if they have those other
resources.
Speaker 3 (07:53):
Oh, that's a good thing to say, because Shannon
and I have sort of in some ofour podcasts really kind of
honed in on record keeping andjust basic things right Like you
can and some of those records Imean.
That's part of why I was hiredat UH.
Apply, yeah, apply acrossdifferent programs, right.
So it makes it a little biteasier for you when you can be
able to use some of those otherdocuments.
(08:14):
So and so I'm just going tokind of go from you know, we
talked about the ag, so what,what's, what's sort of the steps
then I think, what people haveto producers have to take, right
, I mean, I'm sure there'sdeadlines when all all paperwork
needs to be submitted.
So you want to talk maybe alittle bit about the steps and
sort of those deadlines thatthey have to meet to be able to
(08:35):
get.
Speaker 4 (08:35):
Yeah, thank you.
So you know most people thatare in the ag programs if
they're going to be, if theythey're pretty secure that
they're going to be doing it fora while they really should look
at the 10-year dedicated agprogram.
And that program is available.
You can apply now.
Or if you're not in thatprogram now, you need to apply
(09:00):
before September to make it takeeffect in the next tax year
cycle.
Okay, so that's true for all ofthe different programs.
September 1st is the deadlineto apply.
The 10-year program is going togive you a lower valuation for
most of the land than the other.
It's going to give you thelowest valuation.
(09:20):
The restriction with the10-year program is that there is
a deed restriction that's filedwith the Bureau of Conveyances
that says that you have to keepthat property in ag for 10 years
.
Now it doesn't mean you can'tsell it.
You can sell it.
But then the new buyer willhave to sign an affidavit that
they will finish out that10-year term.
(09:41):
If they don't, after it's beensold and they've signed the
affidavit, you don't have anyresponsibility.
That's on them.
Speaker 2 (09:50):
That would be on them .
Speaker 4 (09:51):
If you want to sell it without and breach that, that
10 year dedication, you wouldbe liable for back taxes and
penalties.
But you know you can add thatto the sales price if that's
really the way that you feel youhave to go.
But the objective of all ofthese plans is to keep ag land
in ag and productive Right.
(10:12):
So that's what we're trying toencourage and that's why we're
giving a tax benefit.
Right, there is a benefit here.
The next, the other program.
So if you're in thenon-dedicated ag program, that
program is sunsetting and it'ssunsetting in 2026.
So you have to, by September1st of 2026, decide which
program you want to be in.
(10:33):
So you can either, if you're innon-dedicated ag right now,
you'll stay in non-dedicated aguntil your application for a new
program is accepted and youhave the choice of the 10-year
program or the three-yearshort-term program.
The short-term program thevaluations are twice what they
are, so double the 10-yearprogram.
(10:55):
Tax benefits therefore are notas great but still pretty good
when you compare it to marketvalues here in Hawaii.
And you don't have that deedrestriction.
You only have the three years.
And actually, the way we'vewritten, we've written in fallow
period, so you actually can doone of those three years if
(11:15):
you're rotating crops.
If you need a fallow period,one of those can be a fallow
period.
Speaker 2 (11:20):
So in the 10 year there's not a fallow period.
No, there's also 10 year.
Okay, cause I was just like manthat's.
I mean again, the mainland isvery different than Hawaii in
terms of fallow periods and howlong they are and stuff.
Speaker 4 (11:31):
If I recall Millie correct me if I'm wrong yeah,
With the 10 year program it'skind of it's like if you added
the three year dedication into10 years, you get one fallow
period every three years and youwould write that into your farm
plan.
So you want to make sure thatyou document in your farm plan
(11:53):
if you're going to have fallowperiods in your rotation,
because what you don't want tohave happen is the tax inspector
come out and say, hey, there'snothing going on here, it's an
empty field.
But if you can show them, oh,look, in our farm plan it says
we're doing a fallow periodevery three years.
This is that fallow period andthis is what we've done the
previous two years, Then youdon't have to worry about that.
Speaker 2 (12:12):
Can the one year fallow period over the three
years be broken up in like threeor four month chunks throughout
the season over those three orfour?
Mellie, you know what I'mtrying to say here don't you?
Speaker 3 (12:23):
Yeah, not a solid year, but I mean, I know it's
not done there as much, but whoknows what crops will.
Speaker 2 (12:29):
I mean, there's all kinds of stuff that can be grown
, so yeah, yeah, there arealways more less productive
periods during the year or two.
Speaker 3 (12:36):
So well, that's true too, yeah.
Speaker 4 (12:38):
Yeah, yeah, I think that the way that it is worded,
that you could interpret it thatway.
Okay, so like a cumulative yearum per every three years the
main thing is that it's writteninto your farm plan as yeah,
yeah, you want to be able towrite it and have it there, just
for reference, um should thereever come any questions.
(12:59):
The same thing comes for umfolks that are rotating animals
like yeah that was going to bemy next question, yeah so if one
of the things that is permittedis that you can apply for the
tax benefits for multiple tmksthat are not contiguous so they
don't have to be next to eachother, so if you're somebody
(13:22):
that is rotating, you know sheepbetween three different TMKs
you can apply under one farmplan for all three TMKs.
But you want to notate thatyou're rotating those sheep,
because if you say you know thecounty does use satellite
imagery right to verify thatfolks are doing what they're
(13:42):
saying they're doing, and so ifthey capture the one field when
there's no sheep in it becauseyou rotated them to another
location, you want to make surethat there's just clear
documentation that, oh, this iswhat we're doing, they're
rotating between these threeTMKs.
So if it comes up on thesatellite, oh, there are not any
animals there right now, well,it's because they're at one of
the other three locations.
Speaker 3 (14:03):
And that was part, I guess, part of the question I
was going to ask too whatexactly, what's the definition
of agriculture, production onthose lands you know and what
there's?
I mean because I know from pasttimes poultry wasn't included
in some considered as livestockand whatnot is.
So what's exactly when you talkabout dedicated to ag?
(14:23):
What is their definition forthat?
Speaker 4 (14:26):
Yeah.
So this is one of the pointsthat I think frustrates a lot of
people, because the definitionis not super succinct, and the
reason for that is there's somany different types of
agriculture it is hard to haveone definition that covers
everything, but there's a fewkey components.
The first of all is, I wouldjust generally say, the tax
(14:50):
benefits.
The tax programs are forfarming, not gardening, and
they're for animals that aregoing to be utilized in some way
, but not a pet right?
You don't get those benefitsfor pets and this is something
that has actually been trueunder the non-dedicated ag
(15:10):
program, maybe not enforced perse, but the non-dedicated ag
program says that this is notmeant for home use or
recreational use.
Okay, so that's one point is tolook at the rules with respect
to the definition.
The other thing that we say isthat I'm going to read this from
(15:33):
Chapter 19.
This is under the definitionsection.
So this agriculture activitiesshall mean farm operations that
may include multiple parcelsthat need not be contiguous,
which I mentioned, may includemultiple parcels that need not
be contiguous, which I mentionedthat generate income, monetary
gain or economic benefit in theform of money or money's worth.
So it does cover, it does allowfor bartering.
(15:56):
It doesn't have to be theactual exchange of cash For a
minimum of $2,000 per gross orsorry, annual gross income per
farm operation or this is animportant or or adhere to
generally accepted standards orrecognized practices within that
agricultural industry.
(16:16):
So when you go to the farm planyou'll see that there's a box
that says do you have $2,000annual gross income or money's
worth, money's exchange?
You check that.
If you have that, good you'redone.
If you don't have that, becauseyou are doing a bartering system
or your your income doesn'tmeet that threshold, but you can
(16:39):
still justify that you adhereto accepted practices within
that industry then you just needto describe that in the
paragraph below of okay, this ishow we are still meeting the
standards of agriculture andagricultural industry, but we
don't have that $2,000 benchmark.
(17:00):
You know, just to your pointabout chickens, like game hens,
chicken fighting.
You know cocks are notpermitted, right, that's not
considered.
But if you're doing eggproduction or you're producing
hens for meat, those wouldqualify under the program.
Speaker 3 (17:19):
Yeah, and I'm going to probably bring up a question
that's sort of maybe alreadyanswered but we talked about I
think a question came up at onepoint about homestead, right?
So if that, like you're saying,2,000 annual gross income, but
this animal they are producingag, they are in production but
it's to sustain their homestead,how does that work into this?
Speaker 4 (17:45):
That's a good question how does that work into
this?
That's a good question, yeah,so it's really all about whether
or not you meet the acceptedpractices of that agricultural
industry.
And again, I know that it's.
It's maybe frustrating forfolks that it's not like black
and white about what qualifiesand what doesn't.
Again, we have to build in someflexibility for our own folks.
(18:08):
But basically that's kind ofthe dividing line is what you're
doing, whether it's pasturingfor meat production or you're
raising hens.
Are you meeting the standardsof the industry and what is
accepted practice versus, youknow, just having a backyard
garden?
Now, one of the things thatmaybe I should mention here is
(18:30):
that we did create a program forpeople that do have a backyard
garden or do have, you know,some fruit trees on their
property, because we did want toincentivize folks using any
access food to, you know, movingthat food into the food system,
and so we did create anotherprogram, that is the Community
(18:51):
Food Sustainability Program.
That says if you're gardening,if you have excess food and you
donate it or you sell it, up toa minimum of $1,000 per year.
So if you're giving a bunch ofULU to the food basket or the
ULU cooperative, you canactually get a tax benefit for
that area of your property.
(19:12):
It is one-third the marketvalue of that sorry, 30% of the
market value of that area thatis used to produce food.
So that is one of the ways thatwe're incentivizing it.
But I would say that if we'retalking about legitimate farmers
and ranchers, they want to bein one of the dedicated programs
(19:33):
.
That is a much better taxbenefit for them, so that but
the community foodsustainability is for people
that can't meet that threshold.
Speaker 2 (19:42):
Right, right, right.
So maybe you have like sixtrees in the backyard or
whatever that have bananas orlike you said, and you donate
them, yeah.
Speaker 4 (19:52):
Yep.
So we did want to create anopportunity there and it's
interesting because that one youreally got to look at the
market values in your area andsee which is going to be the
because in some areas withhigher market values you are
probably not going to see asmuch benefit as you will in
areas with lower market values.
(20:14):
So that's something to consideras a landowner what value get
themselves to the minimum taxthrough that community food
sustainability program and maynot be able to get that through
the dedicated ag program.
(20:34):
So I would always recommend, ifyou don't know for sure what is
best suited for you, to talk tothe real property tax
department.
They are the best people togive specific advice about your
property and what the bestopportunities might be.
Speaker 3 (20:50):
That was going to be my next question is you know
what?
You know where, where do we gofrom here and you know who they
reach out to?
So we want to remind everybodyagain, I guess, just what the
deadlines are for thenon-dedicated ag and the
different programs.
Speaker 4 (21:06):
Yes, if you receive the notice from Real Property
Tax about the sunsetting of thenon-dedicated ag program.
At the time the notice said2025, september 2025, we have
extended that deadline by a year, so you have September 1st 2026
to select one of the newprograms.
The applications are availablenow on the Real Property Tax
(21:29):
website, so there's no realbenefit in delaying.
You might as well just do it.
But if you don't need some timeto decide which is the right
program, you have untilSeptember 1st 2026.
That's nice.
I think there was a lot ofconcern and misunderstanding
that the deadline was September1st 2024 when it first came out.
Like we have a month and it'slike, oh, no you, a year plus a
(21:51):
year.
Yeah, we added that that timeresponse to that concern.
Oh, that's nice.
Speaker 3 (21:56):
So that's, that's good.
It's good to be able to havethat and just you know who to
contact if they've got questions, um, and how to go through all
these processes.
I know some folks may not evenbe able to access things online,
so can they go into the officesas well to get the forms that?
Speaker 4 (22:12):
they need.
They can come into the realproperty tax offices to get
forms.
Everything is available,including frequently asked
questions, the types ofdedications and what those
values are, even some guidelinesabout what qualifies are all
available on the Real PropertyTax website.
(22:33):
On the menu tab you go underforms and you'll see the link to
those dedicated programs there.
So I did also want to highlightwe are in the process of
talking with the Hamakua Harvestfolks up there in Honoka'a.
They want to put on a series ofeducational.
I was going to ask that next.
Speaker 2 (22:53):
Well, and I was actually thinking more of her,
because there are some reallylarge producers on Big Island
and they have tax professionalsthe ones I've talked to, and so
I was actually even thinking alot of times the tax
professionals don't necessarilyknow all the tax changes, don't
necessarily know all the taxchanges until things come out,
because we've had issues herewith changes for tax credits,
(23:13):
for schooling, right.
So I yes, that was my, that wasgoing to be my next question,
heather yeah.
Speaker 4 (23:19):
Yeah, this is kind of the first conversation we've
been having that with, aboutthat with a non-profit, but
there's some others um here inin the county.
We kind of want to distributethem.
Speaker 2 (23:30):
I'm just gonna also throw out.
Songy pike is in in hilo.
She's got my old job.
She's the ag finance agent.
So, okay, she has a degree inlike ag, econ and finance, so I
would throw her out potentiallyas someone to help with that.
Just not that she needs morework, but I'm going to anyway.
Yeah.
Speaker 4 (23:50):
Yeah, no, and there's .
I'm hopeful that maybe we canwork with the Cattlemen's
Association as another nonprofitentity to provide some funds to
do seminars or support forlocal ranchers to comply with
the program.
Although I would say you don'tneed a degree to fill out these
forms.
I mean, it's prettystraightforward.
(24:12):
It's kind of like a decisiontree.
You either check the box yes orno, and if the answer is no,
then you got to give a littlemore information.
But it's relativelystraightforward to fill out.
Speaker 2 (24:21):
Oh, okay, that's also a plus Cause.
Again, that's what I was like.
That's like really like I waslike boy.
I hope there's some educationon how to fill these forms out
or where to go for additionalinformation.
And then, like I said, I wasjust thinking like a tax
professional because I knowagain there's there's quite a
few larger producers on theisland and I'm sure that's a
question they'll be having.
Speaker 4 (24:40):
So, yeah, yeah, I think.
I think folks are going to needless support filling out the
farm plan.
Then they will kind of maybejust deciding what is the best
program for them in terms of thelong-term tax implications.
I will say that one of thereally so.
In conjunction with thesechanges to the dedication
(25:01):
programs, which affect thevaluation of the land, we did
make another really importanttax adjustment with respect to
agricultural land, which is ifyou live on your property that
your farm is located on, youwill still be able to get the
homeowner's tax class benefitsin addition to the farm
(25:24):
valuation benefits.
So in Hawaii County, thehomeowner's tax class it has two
components.
It has a rate of 5.95 as ofthis year, so this is 2024
people watching this in thefuture.
That's what the tax rates were.
It was 5.95 per thousanddollars of value.
(25:45):
In addition to that, per $1,000of value.
In addition to that, you getthis 3% cap, which is every year
.
The value cannot go up morethan 3%, regardless of what
happens in the market, and sopreviously folks either had to
decide between being in one ofthe ag-dedicated programs or the
non-dedicated programs or thehomeowner tax class, and what
(26:07):
that meant was for a lot of ourfarmers that were in the
dedicated program or thenon-dedicated program.
When COVID happened and themarket went through the roof and
all these folks were coming inand buying land here, they were
not protected on their homes.
They were protected on thevalue of their land because of
the ag programs.
But the value on their homejust went up because it was tied
(26:28):
to market rate.
It didn't have that 3% cap.
Unfortunately, we can't go backin time and bring those values
back down, but what we've doneis going forward.
If you live on your farm, thatcap will apply, even though
you're also getting the benefitsof the ag assessment on the
land.
Speaker 2 (26:46):
Now's only for for again, if they're also if they
also have the ag tied to itcorrect though.
Speaker 4 (26:53):
Right.
So I mean, if you don't havethe ag tied to it, you, your
land, is included in thatassessment at the at the regular
rate.
You don't have that benefit, andso that's going to be based on
you know what, what it wasvalued at the regular rate.
You don't have that benefit,and so that's going to be based
on you know what, what it wasvalued at at the time you bought
it and and you know the lengthof time that you've held it.
(27:16):
So with the ag dedicatedprograms, there's a fixed value
that is associated depending onwhat type of agricultural
activity you're using per acre,whereas in the other, in the
homeowners class, your propertyis assessed at a certain value,
but it's restricted then by the3%.
Speaker 3 (27:36):
So I have another question.
So if you are leasing land, whoshould be completing these
forms?
Should it be the leasee or theowner of the property?
Okay, right.
Speaker 4 (27:47):
So the application for the tax benefit to the
property should be completed bythe property owner.
The farm plan that is going tobe included in that application
again, only if you don't havesome of the other documentation
can be either completed by theleasee or the owner.
(28:09):
Can be either completed by theleasee or the owner.
So let's say, for example,you've got a leasee that works
with five different owners.
That leasee can do the farmplan, indicate all five TMKs and
what activity is happening, andso forth and so on.
Now each of those individualowners would apply for their
(28:31):
property to get the tax benefitand they could each include that
farm plan.
Speaker 2 (28:36):
So there would be one farm plan, five tax
applications from the individualowners and it's the owners that
get the tax benefit quickquestion if the leasee is
farming or ranching or whateverengaged in agriculture, does a
copy of the written lease needto be on file somewhere, because
(28:58):
there's a lot of verbalhandshake deals that happen.
I really try to encouragepeople to get written leases
anymore just because, yeah, youknow, but um there does have to
be an on paper agreement.
Speaker 4 (29:12):
Okay, um, it doesn't have to be recorded.
So that was one of the changes.
Okay, yeah, it doesn't have tobe a recorded lease agreement,
but there does have to be somesort of executed agreement
between the leasee and thelandholder I mean, that's what
most written agreements againhere particularly are is just
yeah, something on paper.
Speaker 2 (29:31):
The only time well, in the state of nebr, the only
time that's, you have to have itrecorded as if it's multi-year.
So, and I don't remember whatthe Hawaii ones are.
I'm sorry, I forgot.
Speaker 4 (29:42):
So well, and that is an important consideration is
that the lease does have to lineup with the term of the
dedication, right?
So if you have, if you're doinga three the three-year
dedication, your lease has tocover that time, and you know it
can be.
Certainly there is language inthe code that you know.
(30:04):
One of the things that we havea lot of Baltimore farmers are
like what if I die, and you knowif you die or become disabled,
if I die and you know if you dieor become disabled, the you're
going to be able to get out ofthe program without any
penalties.
Oh, that's nice.
There is language written inthere.
Natural disasters too, ifthere's there's some natural
disaster that makes itimpossible to continue, right.
Speaker 2 (30:26):
If something happens.
Okay, I'm going to ask anothernosy question, because I do.
I work a lot with farmers andranchers to do estate and
transition planning.
So if somebody does die, butokay, so let's say I'm trying.
Okay, let's say my grandfatherowns, I don't know, a ranch in
Hawaii and he dies and I wantedto, I'm supposed to take it over
.
It's written in the will,that's the way it's done, can we
(30:47):
?
Is there a continuation clausein this, or do I need to go
refill paperwork out ifsomething happens?
Speaker 4 (30:53):
I'm just scenarios, sorry yeah, yeah, you know, um,
that is maybe above my pay grade.
Sorry, yeah, no, I would.
I would say that I I mean at abare minimum, you can just
reapply okay with your name.
But you know, if you, if you dosomething like hold it in a
family trust or something likethat, I think that there was a
(31:13):
requirement to, to refile Ithink it really probably depends
on the status, um that underwhich you're holding it.
Um, again, kind of outside mypre-grade.
Speaker 2 (31:25):
Oh, I'm sorry.
Speaker 4 (31:25):
Yeah, no, no, no, it's okay.
Speaker 3 (31:28):
Sometimes you got to just say you don't know, and
that's one of them.
Yeah, nothing wrong with that.
Oh well, thank you.
Is there anything else you wantto add or share about the?
Speaker 4 (31:40):
program.
You know, I I think you know oneof the things that, as I
mentioned, when obviouslyprotecting against fraud, waste
and abuse is a piece of this,and a lot of that is just having
documentation upfront to showus what you're doing, having
those lease agreements, as yousaid.
The other thing here is reallyto just ensure that our quality
(32:01):
agricultural properties arebeing productive and
contributing to the food system,and one of the things that I
will say has resulted in thechanges in the ag code is we
have had more people going ohhey, I want to lease my land to
somebody that will actually useit, and you know that is the
(32:21):
goal, and so I'm excited to seemore of that.
I'm hoping that we can provide,either through the county or
another nonprofit organization,is a curated list of OK, these
are farmers that know whatthey're doing, they're looking
for land, and over here arelandowners that want to be able
(32:43):
to still take advantage of thesetax benefits but are either too
old to farm it or don't knowwhat they're doing and being
able to those folks so that weactually I'm gonna have a
recommendation for you then,because we have a program called
land link and after this,remind me, and I will get you in
contact with the gal who's incharge of it so you can talk to
her and see how it's going,because it's been pretty
(33:04):
successful.
Speaker 2 (33:04):
knock on wood here, and I was like just remind me
after we're done with this.
Sorry to interrupt you Go forit.
Speaker 4 (33:12):
No, that would be fabulous.
I think that's kind of the nextstage in all of this is people
are saying, okay, I want to makesure that I can keep these
benefits.
I need to get my land insomething that is productive,
legitimate agriculture and weknow there are people looking
for land to lease.
So we just did.
Speaker 2 (33:31):
And it's also about finding that right fit for the
person.
So we've had ones that,specifically, are looking for
organic and then some that arelooking for no-till and, again,
very you know, they want to makesure their their land's going
to be taken care of the way theywant it to be taken care of
yeah, yeah, absolutely, I get ityeah, that makes sense that
that's the logical next step.
Speaker 3 (33:50):
It's a great way for us to continue to keep those
agricultural lands in ag In ag.
Speaker 4 (33:55):
Yeah, and I'll just mention a couple other
initiatives as they're kind ofrelevant to this objective, and
one of them is you know, here inthe county of Hawaii we have
most of our land in state landuse agriculture.
We have most of our land instate land use agriculture.
(34:16):
That includes some of the bigsubdivisions, the HPPs and the
orchid lands and even some ofthe plantation camps in Hamakua
in my district.
One of the things that we'retrying to figure out a mechanism
for is to convert those smallercontiguous lots from state land
use ag to rural, and the reasonfor doing that is that any
(34:38):
regulations or protections thatwe put in place around the use
of agricultural land right now,they have to also compensate for
the sort of non-conforming useof being essentially a rural
residential subdivision.
It doesn't mean if you convertto rural, if we convert to state
land use rural, you can stilluse these tax programs.
(34:59):
You can still.
If you're farming on that oneacre parcel or the two acre
parcel, you can still enroll inthese tax benefit programs.
So it's not going to have anyimpact on your taxes.
But what it does is it allowsus to protect and incentivize
agricultural activities onlegitimate ag land without
having to compensate.
The other thing that we'relooking at is how to deal with
(35:22):
transient accommodation, rentals, overnight accommodations on
agricultural land, and I bringthat up too, because right now,
the county of Hawaii cannotregulate overnight
accommodations under the agtourism policy at the state
level.
However, yeah, yeah, Maui can.
It's limited to counties withthree islands, which is one of
(35:47):
the weirder things that thestate has done the weirder
things that the state has done.
But the other argument I wouldmake there is that if we had the
ability to regulate overnightaccommodations through the ag
tourism policy, we could putsome conditions on that that
would ensure that there waslegitimate agricultural activity
while still allowing fortransient accommodations.
(36:07):
And I know you know from theassessments that have been done
here that for many of ourfarmers and ranchers, having a
side business that's related tothe tourism industry is like the
only way you make it right.
But what we don't want to havehappen and what we are seeing
right now is folks, of course,taking up ag land to do
(36:27):
transient accommodation withoutany farming.
So if we actually were able toregulate that under ag tourism,
that would be a better situationthan what we've got now.
So those are two other kind ofinitiatives that we're looking
at.
It requires the state to enableus to do it, so it's kind of a
challenge.
But as those pieces oflegislation come through, I hope
(36:48):
that folks listening and yourmembers will consider supporting
those endeavors, because Ithink it's going to be able to
continue to help us ensure thatag land is being used
appropriately and is not beingspeculated upon by outside
investors.
Speaker 2 (37:05):
Yeah, oh yeah.
Like I said, that's anationwide and, like you said,
international issue with a lotof people, but in Hawaii I think
it's much more easy for it tohappen sometimes.
Speaker 4 (37:16):
It's like on steroids .
Speaker 3 (37:18):
Yeah Well, thank you so much for joining us.
Speaker 4 (37:23):
Absolutely, and thank you for having me, and I hope
that anybody listening reallydid find this helpful, and my
door is always open too, so feelfree to give me a call.
My office here 961-8828.
My email heatherkimble athawaiicountygov.
I'm always happy to talk peoplethrough.
Although I cannot give youspecific tax advice on your
(37:44):
personal, I'm happy to give yougeneral information.
Speaker 2 (37:48):
Yeah, I always tell people I'm not an accountant.
I can teach you how to keepyour records and things, but I'm
not an accountant.
Yeah, tax law is not my area ofexpertise in any shape or form.
Thank you so much for joiningus today, and we hope our
listeners found this informativeand that it'll be useful to
them.
Speaker 3 (38:04):
Yeah, make sure to follow us on our social media
pages the Livestock PalauLivestock Extension Group, if
you haven't already, and be sureto visit the UHC TAR Extension
website and our YouTube channellisted in the show notes Yep yep
, like Mele said.
Speaker 2 (38:16):
for additional information about this topic,
see those show notes of thepodcast and the description box
of our YouTube page.
Thanks for listening to theLivestock Voila Owl Before we go
.
Show some love for yourfavorite podcast by leaving us a
review, anywhere you listen tothis and then stay tuned for
next month's episode.
Speaker 3 (38:36):
Yeah, thanks again to our sponsors the livestock
extension group of theuniversity of poa e manoa
college of tropical agricultureand human resilience, the center
for ag profitability of theuniversity of nebraska, lincoln,
and the western sustainableagriculture research and
education program.
Mahalo for listening, a hui hou.
Aloha.
Today's episode is sponsored bythe Livestock Extension Group
out of the University of HawaiiManoa College of Tropical
Agriculture and Human Resilience, the Center for Ag
Profitability out of theUniversity of Nebraska-Lincoln
and the Western SustainableAgriculture Research and
Education Program.
Speaker 3 (00:31):
Aloha and welcome to the Livestock Palau, a podcast
aimed to provide educationalsupport, information, guidance
and outreach to our livestockstakeholders in Hawaii and the
US.
We are your hosts, Belay Oshiroand Shannon Sand, and today
we're talking with HeatherKimball, who is in the Hawaii
County District 1 Councilmember.
Thank you very much for joiningus today.
(00:51):
Yes, thank you.
Thank you so much for having me.
It's good to be here.
Yeah, so maybe we'll just starta little bit if you want to
just share with everyone alittle of your background and
your current position.
Speaker 4 (01:03):
Yeah, happy to.
So my name is Heather Kimball.
I'm a Hawaii County Councilmember serving my third term now
for District 1, which startsjust outside of Hilo at the
Singing Bridge, goes all the wayup to Waipio and even covers a
small portion of the Waimea area.
My background actually is notas a politician but as a
(01:23):
scientist.
My first career was actually asa geneticist, working for
Lawrence Berkeley National Labon the Human Genome Project.
I then went and got a master'sdegree in tropical conservation
and environmental science, whereI worked on decision support
tools for land use management,which sounds like a technical
(01:43):
field, but actually it's reallyjust using GIS data geographical
information to improvedecision-making around land use.
And then you know, through mywork with that, what I
discovered is many people inpolicymaking positions and
decision-making positions don'tuse databases and information
for making good decisions, andso I understood that.
(02:10):
You know, if I wanted to reallymake a difference in how we
considered land use and therelated issues to that,
including agriculture, I neededto understand and be in a
decision-making position, andthat's how I ended up running
for office and serving here inthe county council.
In addition to that work, I'vealso worked for the College of
Ag at the University of Hawaiiat Hilo, as well as CTAR doing
(02:31):
various projects mostly relatedto the genetics, but also
looking at some other issues interms of crop diseases.
So I do have some backgroundwith the College of Ag here in
Hilo.
Speaker 3 (02:44):
Yeah, which I didn't know when I met you at the
meeting and we talked a littlebit about that, that's you know.
So I always say small worldright.
Speaker 4 (02:52):
Yeah, I will say, even though I have this
background in agriculture, I donot farm and I have tried to
grow things and I have a blackthumb.
So, despite the plethora ofeducation that I have around
biology and making things live,I'm not very good at it, so I
have a lot of respect for peoplewho can keep things, whether it
be plants or animals, alive.
Speaker 2 (03:13):
I was just saying.
I was like I have better luckwith animals than plants, so we
all have our specialties.
Yeah, so can you tell us aboutsome updates for non-dedicated
ag land?
What is it and what does itmean for, like Hawaii County
producers potentially?
I know that was a lot ofquestions in one, but I'm just
going to throw it out there soyeah, yeah, I.
Speaker 4 (03:34):
I'd like to actually start, if I may, with some
background.
You know, first of all, youknow the the reason that we
started looking at the ag taxprograms is because, back in
2012, they were identified by anexternal audit as areas that
had potential for fraud, wasteand abuse in terms of our tax
(03:56):
code policy.
And, subsequent to that audit,there were working groups, there
was a report that was producedin 2019, but no real code
changes had been implemented.
And so, in conjunction withthose things that happened
within the county, there werevarious ag assessments done of
(04:19):
particularly the Hummelkuhlregion that I represent, as well
as the county at large.
And again, one of the thingsthat was identified as an issue
for our local farmers andranchers is the issue of
speculation on ag land and howthat speculation drives up costs
in terms of folks looking forland to purchase and build a
(04:42):
farm on, or people just lookingto lease land, and so, um,
that's what we started lookingat making modifications to the
programs and, in particular, thenon-dedicated ag program is
where, um, we've seen, you know,historically, the most abuse,
and you know it's it's I.
(05:04):
I don't want to like pointfingers at anybody for anything,
but it's very, very easy tobasically park your money here
in Hawaii in land, so you knowyou can invest for a 20 acre
parcel fence, it stick a cow on,it, say I'm farming, and you're
going to pay the minimum tax of200 a year and you're always
(05:26):
going to make money on that ifyou're an investor, because I
mean, we have similar issues forcertain things in Nebraska
where yes, yeah, I get it.
Speaker 2 (05:36):
I would like people use it as an inflation hedge
investors who have lots of moneyin large portfolios.
We don't need to say name names, but yes, yeah.
Speaker 4 (05:45):
Yeah.
Speaker 1 (05:45):
And it is a national problem and in fact, you know
what I learned through all ofthis going.
Speaker 4 (05:52):
There was an international sorry, yeah, it
wasn't international but therewas an international tax
assessors meeting which I wentto and I was fascinated to learn
that this is a probleminternationally and that
actually Hawaii has some of thebetter programs, which I thought
actually was interesting.
We were highlighted in adocument that they had that
(06:13):
talked about the differentprograms.
So it is certainly a challengeand that's really what we were
trying to do with this isbasically ensure that folks that
are using the, the agdedication programs, to take
advantage to get some taxbenefits for the ownership and
(06:34):
use of that land that they'reactually doing farming right, um
, and, and that's that's kind ofthe fundamental purpose.
How that manifests is basicallywe're asking for the documents
up front and that there's manydifferent forms of documentation
that we'll take.
But I had somebody say so youbasically mean there's more
(06:54):
bureaucracy and it's like, yeah,basically, but we've tried to
make it as simple as possible,because one of the things we
recognize is that farmers andranchers don't have a lot of
time to do paperwork, and so wewanted to make it as
straightforward and simple aspossible by, in you know, taking
various forms of documentationthat they might already have.
(07:15):
So if they have, for example,an organic certification or a
food safety certification orthey worked with NRCS to do a
soils plan or some kind of farmplan with NRCS, we'll take all
those documents and they don'thave to do anything else.
If they don't have any of thosedocuments, we'll take a farm
(07:37):
plan and that we have a formthat's available on the Real
Property Tech's webpage thatfolks can fill out and they can
submit that as an alternative toany of those other documents.
But they don't need to do a FARplan if they have those other
resources.
Speaker 3 (07:53):
Oh, that's a good thing to say, because Shannon
and I have sort of in some ofour podcasts really kind of
honed in on record keeping andjust basic things right Like you
can and some of those records Imean.
That's part of why I was hiredat UH.
Apply, yeah, apply acrossdifferent programs, right.
So it makes it a little biteasier for you when you can be
able to use some of those otherdocuments.
(08:14):
So and so I'm just going tokind of go from you know, we
talked about the ag, so what,what's, what's sort of the steps
then I think, what people haveto producers have to take, right
, I mean, I'm sure there'sdeadlines when all all paperwork
needs to be submitted.
So you want to talk maybe alittle bit about the steps and
sort of those deadlines thatthey have to meet to be able to
(08:35):
get.
Speaker 4 (08:35):
Yeah, thank you.
So you know most people thatare in the ag programs if
they're going to be, if theythey're pretty secure that
they're going to be doing it fora while they really should look
at the 10-year dedicated agprogram.
And that program is available.
You can apply now.
Or if you're not in thatprogram now, you need to apply
(09:00):
before September to make it takeeffect in the next tax year
cycle.
Okay, so that's true for all ofthe different programs.
September 1st is the deadlineto apply.
The 10-year program is going togive you a lower valuation for
most of the land than the other.
It's going to give you thelowest valuation.
(09:20):
The restriction with the10-year program is that there is
a deed restriction that's filedwith the Bureau of Conveyances
that says that you have to keepthat property in ag for 10 years
.
Now it doesn't mean you can'tsell it.
You can sell it.
But then the new buyer willhave to sign an affidavit that
they will finish out that10-year term.
(09:41):
If they don't, after it's beensold and they've signed the
affidavit, you don't have anyresponsibility.
That's on them.
Speaker 2 (09:50):
That would be on them .
Speaker 4 (09:51):
If you want to sell it without and breach that, that
10 year dedication, you wouldbe liable for back taxes and
penalties.
But you know you can add thatto the sales price if that's
really the way that you feel youhave to go.
But the objective of all ofthese plans is to keep ag land
in ag and productive Right.
(10:12):
So that's what we're trying toencourage and that's why we're
giving a tax benefit.
Right, there is a benefit here.
The next, the other program.
So if you're in thenon-dedicated ag program, that
program is sunsetting and it'ssunsetting in 2026.
So you have to, by September1st of 2026, decide which
program you want to be in.
(10:33):
So you can either, if you're innon-dedicated ag right now,
you'll stay in non-dedicated aguntil your application for a new
program is accepted and youhave the choice of the 10-year
program or the three-yearshort-term program.
The short-term program thevaluations are twice what they
are, so double the 10-yearprogram.
(10:55):
Tax benefits therefore are notas great but still pretty good
when you compare it to marketvalues here in Hawaii.
And you don't have that deedrestriction.
You only have the three years.
And actually, the way we'vewritten, we've written in fallow
period, so you actually can doone of those three years if
(11:15):
you're rotating crops.
If you need a fallow period,one of those can be a fallow
period.
Speaker 2 (11:20):
So in the 10 year there's not a fallow period.
No, there's also 10 year.
Okay, cause I was just like manthat's.
I mean again, the mainland isvery different than Hawaii in
terms of fallow periods and howlong they are and stuff.
Speaker 4 (11:31):
If I recall Millie correct me if I'm wrong yeah,
With the 10 year program it'skind of it's like if you added
the three year dedication into10 years, you get one fallow
period every three years and youwould write that into your farm
plan.
So you want to make sure thatyou document in your farm plan
(11:53):
if you're going to have fallowperiods in your rotation,
because what you don't want tohave happen is the tax inspector
come out and say, hey, there'snothing going on here, it's an
empty field.
But if you can show them, oh,look, in our farm plan it says
we're doing a fallow periodevery three years.
This is that fallow period andthis is what we've done the
previous two years, Then youdon't have to worry about that.
Speaker 2 (12:12):
Can the one year fallow period over the three
years be broken up in like threeor four month chunks throughout
the season over those three orfour?
Mellie, you know what I'mtrying to say here don't you?
Speaker 3 (12:23):
Yeah, not a solid year, but I mean, I know it's
not done there as much, but whoknows what crops will.
Speaker 2 (12:29):
I mean, there's all kinds of stuff that can be grown
, so yeah, yeah, there arealways more less productive
periods during the year or two.
Speaker 3 (12:36):
So well, that's true too, yeah.
Speaker 4 (12:38):
Yeah, yeah, I think that the way that it is worded,
that you could interpret it thatway.
Okay, so like a cumulative yearum per every three years the
main thing is that it's writteninto your farm plan as yeah,
yeah, you want to be able towrite it and have it there, just
for reference, um should thereever come any questions.
(12:59):
The same thing comes for umfolks that are rotating animals
like yeah that was going to bemy next question, yeah so if one
of the things that is permittedis that you can apply for the
tax benefits for multiple tmksthat are not contiguous so they
don't have to be next to eachother, so if you're somebody
(13:22):
that is rotating, you know sheepbetween three different TMKs
you can apply under one farmplan for all three TMKs.
But you want to notate thatyou're rotating those sheep,
because if you say you know thecounty does use satellite
imagery right to verify thatfolks are doing what they're
(13:42):
saying they're doing, and so ifthey capture the one field when
there's no sheep in it becauseyou rotated them to another
location, you want to make surethat there's just clear
documentation that, oh, this iswhat we're doing, they're
rotating between these threeTMKs.
So if it comes up on thesatellite, oh, there are not any
animals there right now, well,it's because they're at one of
the other three locations.
Speaker 3 (14:03):
And that was part, I guess, part of the question I
was going to ask too whatexactly, what's the definition
of agriculture, production onthose lands you know and what
there's?
I mean because I know from pasttimes poultry wasn't included
in some considered as livestockand whatnot is.
So what's exactly when you talkabout dedicated to ag?
(14:23):
What is their definition forthat?
Speaker 4 (14:26):
Yeah.
So this is one of the pointsthat I think frustrates a lot of
people, because the definitionis not super succinct, and the
reason for that is there's somany different types of
agriculture it is hard to haveone definition that covers
everything, but there's a fewkey components.
The first of all is, I wouldjust generally say, the tax
(14:50):
benefits.
The tax programs are forfarming, not gardening, and
they're for animals that aregoing to be utilized in some way
, but not a pet right?
You don't get those benefitsfor pets and this is something
that has actually been trueunder the non-dedicated ag
(15:10):
program, maybe not enforced perse, but the non-dedicated ag
program says that this is notmeant for home use or
recreational use.
Okay, so that's one point is tolook at the rules with respect
to the definition.
The other thing that we say isthat I'm going to read this from
(15:33):
Chapter 19.
This is under the definitionsection.
So this agriculture activitiesshall mean farm operations that
may include multiple parcelsthat need not be contiguous,
which I mentioned, may includemultiple parcels that need not
be contiguous, which I mentionedthat generate income, monetary
gain or economic benefit in theform of money or money's worth.
So it does cover, it does allowfor bartering.
(15:56):
It doesn't have to be theactual exchange of cash For a
minimum of $2,000 per gross orsorry, annual gross income per
farm operation or this is animportant or or adhere to
generally accepted standards orrecognized practices within that
agricultural industry.
(16:16):
So when you go to the farm planyou'll see that there's a box
that says do you have $2,000annual gross income or money's
worth, money's exchange?
You check that.
If you have that, good you'redone.
If you don't have that, becauseyou are doing a bartering system
or your your income doesn'tmeet that threshold, but you can
(16:39):
still justify that you adhereto accepted practices within
that industry then you just needto describe that in the
paragraph below of okay, this ishow we are still meeting the
standards of agriculture andagricultural industry, but we
don't have that $2,000 benchmark.
(17:00):
You know, just to your pointabout chickens, like game hens,
chicken fighting.
You know cocks are notpermitted, right, that's not
considered.
But if you're doing eggproduction or you're producing
hens for meat, those wouldqualify under the program.
Speaker 3 (17:19):
Yeah, and I'm going to probably bring up a question
that's sort of maybe alreadyanswered but we talked about I
think a question came up at onepoint about homestead, right?
So if that, like you're saying,2,000 annual gross income, but
this animal they are producingag, they are in production but
it's to sustain their homestead,how does that work into this?
Speaker 4 (17:45):
That's a good question how does that work into
this?
That's a good question, yeah,so it's really all about whether
or not you meet the acceptedpractices of that agricultural
industry.
And again, I know that it's.
It's maybe frustrating forfolks that it's not like black
and white about what qualifiesand what doesn't.
Again, we have to build in someflexibility for our own folks.
(18:08):
But basically that's kind ofthe dividing line is what you're
doing, whether it's pasturingfor meat production or you're
raising hens.
Are you meeting the standardsof the industry and what is
accepted practice versus, youknow, just having a backyard
garden?
Now, one of the things thatmaybe I should mention here is
(18:30):
that we did create a program forpeople that do have a backyard
garden or do have, you know,some fruit trees on their
property, because we did want toincentivize folks using any
access food to, you know, movingthat food into the food system,
and so we did create anotherprogram, that is the Community
(18:51):
Food Sustainability Program.
That says if you're gardening,if you have excess food and you
donate it or you sell it, up toa minimum of $1,000 per year.
So if you're giving a bunch ofULU to the food basket or the
ULU cooperative, you canactually get a tax benefit for
that area of your property.
(19:12):
It is one-third the marketvalue of that sorry, 30% of the
market value of that area thatis used to produce food.
So that is one of the ways thatwe're incentivizing it.
But I would say that if we'retalking about legitimate farmers
and ranchers, they want to bein one of the dedicated programs
(19:33):
.
That is a much better taxbenefit for them, so that but
the community foodsustainability is for people
that can't meet that threshold.
Speaker 2 (19:42):
Right, right, right.
So maybe you have like sixtrees in the backyard or
whatever that have bananas orlike you said, and you donate
them, yeah.
Speaker 4 (19:52):
Yep.
So we did want to create anopportunity there and it's
interesting because that one youreally got to look at the
market values in your area andsee which is going to be the
because in some areas withhigher market values you are
probably not going to see asmuch benefit as you will in
areas with lower market values.
(20:14):
So that's something to consideras a landowner what value get
themselves to the minimum taxthrough that community food
sustainability program and maynot be able to get that through
the dedicated ag program.
(20:34):
So I would always recommend, ifyou don't know for sure what is
best suited for you, to talk tothe real property tax
department.
They are the best people togive specific advice about your
property and what the bestopportunities might be.
Speaker 3 (20:50):
That was going to be my next question is you know
what?
You know where, where do we gofrom here and you know who they
reach out to?
So we want to remind everybodyagain, I guess, just what the
deadlines are for thenon-dedicated ag and the
different programs.
Speaker 4 (21:06):
Yes, if you receive the notice from Real Property
Tax about the sunsetting of thenon-dedicated ag program.
At the time the notice said2025, september 2025, we have
extended that deadline by a year, so you have September 1st 2026
to select one of the newprograms.
The applications are availablenow on the Real Property Tax
(21:29):
website, so there's no realbenefit in delaying.
You might as well just do it.
But if you don't need some timeto decide which is the right
program, you have untilSeptember 1st 2026.
That's nice.
I think there was a lot ofconcern and misunderstanding
that the deadline was September1st 2024 when it first came out.
Like we have a month and it'slike, oh, no you, a year plus a
(21:51):
year.
Yeah, we added that that timeresponse to that concern.
Oh, that's nice.
Speaker 3 (21:56):
So that's, that's good.
It's good to be able to havethat and just you know who to
contact if they've got questions, um, and how to go through all
these processes.
I know some folks may not evenbe able to access things online,
so can they go into the officesas well to get the forms that?
Speaker 4 (22:12):
they need.
They can come into the realproperty tax offices to get
forms.
Everything is available,including frequently asked
questions, the types ofdedications and what those
values are, even some guidelinesabout what qualifies are all
available on the Real PropertyTax website.
(22:33):
On the menu tab you go underforms and you'll see the link to
those dedicated programs there.
So I did also want to highlightwe are in the process of
talking with the Hamakua Harvestfolks up there in Honoka'a.
They want to put on a series ofeducational.
I was going to ask that next.
Speaker 2 (22:53):
Well, and I was actually thinking more of her,
because there are some reallylarge producers on Big Island
and they have tax professionalsthe ones I've talked to, and so
I was actually even thinking alot of times the tax
professionals don't necessarilyknow all the tax changes, don't
necessarily know all the taxchanges until things come out,
because we've had issues herewith changes for tax credits,
(23:13):
for schooling, right.
So I yes, that was my, that wasgoing to be my next question,
heather yeah.
Speaker 4 (23:19):
Yeah, this is kind of the first conversation we've
been having that with, aboutthat with a non-profit, but
there's some others um here inin the county.
We kind of want to distributethem.
Speaker 2 (23:30):
I'm just gonna also throw out.
Songy pike is in in hilo.
She's got my old job.
She's the ag finance agent.
So, okay, she has a degree inlike ag, econ and finance, so I
would throw her out potentiallyas someone to help with that.
Just not that she needs morework, but I'm going to anyway.
Yeah.
Speaker 4 (23:50):
Yeah, no, and there's .
I'm hopeful that maybe we canwork with the Cattlemen's
Association as another nonprofitentity to provide some funds to
do seminars or support forlocal ranchers to comply with
the program.
Although I would say you don'tneed a degree to fill out these
forms.
I mean, it's prettystraightforward.
(24:12):
It's kind of like a decisiontree.
You either check the box yes orno, and if the answer is no,
then you got to give a littlemore information.
But it's relativelystraightforward to fill out.
Speaker 2 (24:21):
Oh, okay, that's also a plus Cause.
Again, that's what I was like.
That's like really like I waslike boy.
I hope there's some educationon how to fill these forms out
or where to go for additionalinformation.
And then, like I said, I wasjust thinking like a tax
professional because I knowagain there's there's quite a
few larger producers on theisland and I'm sure that's a
question they'll be having.
Speaker 4 (24:40):
So, yeah, yeah, I think.
I think folks are going to needless support filling out the
farm plan.
Then they will kind of maybejust deciding what is the best
program for them in terms of thelong-term tax implications.
I will say that one of thereally so.
In conjunction with thesechanges to the dedication
(25:01):
programs, which affect thevaluation of the land, we did
make another really importanttax adjustment with respect to
agricultural land, which is ifyou live on your property that
your farm is located on, youwill still be able to get the
homeowner's tax class benefitsin addition to the farm
(25:24):
valuation benefits.
So in Hawaii County, thehomeowner's tax class it has two
components.
It has a rate of 5.95 as ofthis year, so this is 2024
people watching this in thefuture.
That's what the tax rates were.
It was 5.95 per thousanddollars of value.
(25:45):
In addition to that, per $1,000of value.
In addition to that, you getthis 3% cap, which is every year
.
The value cannot go up morethan 3%, regardless of what
happens in the market, and sopreviously folks either had to
decide between being in one ofthe ag-dedicated programs or the
non-dedicated programs or thehomeowner tax class, and what
(26:07):
that meant was for a lot of ourfarmers that were in the
dedicated program or thenon-dedicated program.
When COVID happened and themarket went through the roof and
all these folks were coming inand buying land here, they were
not protected on their homes.
They were protected on thevalue of their land because of
the ag programs.
But the value on their homejust went up because it was tied
(26:28):
to market rate.
It didn't have that 3% cap.
Unfortunately, we can't go backin time and bring those values
back down, but what we've doneis going forward.
If you live on your farm, thatcap will apply, even though
you're also getting the benefitsof the ag assessment on the
land.
Speaker 2 (26:46):
Now's only for for again, if they're also if they
also have the ag tied to itcorrect though.
Speaker 4 (26:53):
Right.
So I mean, if you don't havethe ag tied to it, you, your
land, is included in thatassessment at the at the regular
rate.
You don't have that benefit, andso that's going to be based on
you know what, what it wasvalued at the regular rate.
You don't have that benefit,and so that's going to be based
on you know what, what it wasvalued at at the time you bought
it and and you know the lengthof time that you've held it.
(27:16):
So with the ag dedicatedprograms, there's a fixed value
that is associated depending onwhat type of agricultural
activity you're using per acre,whereas in the other, in the
homeowners class, your propertyis assessed at a certain value,
but it's restricted then by the3%.
Speaker 3 (27:36):
So I have another question.
So if you are leasing land, whoshould be completing these
forms?
Should it be the leasee or theowner of the property?
Okay, right.
Speaker 4 (27:47):
So the application for the tax benefit to the
property should be completed bythe property owner.
The farm plan that is going tobe included in that application
again, only if you don't havesome of the other documentation
can be either completed by theleasee or the owner.
(28:09):
Can be either completed by theleasee or the owner.
So let's say, for example,you've got a leasee that works
with five different owners.
That leasee can do the farmplan, indicate all five TMKs and
what activity is happening, andso forth and so on.
Now each of those individualowners would apply for their
(28:31):
property to get the tax benefitand they could each include that
farm plan.
Speaker 2 (28:36):
So there would be one farm plan, five tax
applications from the individualowners and it's the owners that
get the tax benefit quickquestion if the leasee is
farming or ranching or whateverengaged in agriculture, does a
copy of the written lease needto be on file somewhere, because
(28:58):
there's a lot of verbalhandshake deals that happen.
I really try to encouragepeople to get written leases
anymore just because, yeah, youknow, but um there does have to
be an on paper agreement.
Speaker 4 (29:12):
Okay, um, it doesn't have to be recorded.
So that was one of the changes.
Okay, yeah, it doesn't have tobe a recorded lease agreement,
but there does have to be somesort of executed agreement
between the leasee and thelandholder I mean, that's what
most written agreements againhere particularly are is just
yeah, something on paper.
Speaker 2 (29:31):
The only time well, in the state of nebr, the only
time that's, you have to have itrecorded as if it's multi-year.
So, and I don't remember whatthe Hawaii ones are.
I'm sorry, I forgot.
Speaker 4 (29:42):
So well, and that is an important consideration is
that the lease does have to lineup with the term of the
dedication, right?
So if you have, if you're doinga three the three-year
dedication, your lease has tocover that time, and you know it
can be.
Certainly there is language inthe code that you know.
(30:04):
One of the things that we havea lot of Baltimore farmers are
like what if I die, and you knowif you die or become disabled,
if I die and you know if you dieor become disabled, the you're
going to be able to get out ofthe program without any
penalties.
Oh, that's nice.
There is language written inthere.
Natural disasters too, ifthere's there's some natural
disaster that makes itimpossible to continue, right.
Speaker 2 (30:26):
If something happens.
Okay, I'm going to ask anothernosy question, because I do.
I work a lot with farmers andranchers to do estate and
transition planning.
So if somebody does die, butokay, so let's say I'm trying.
Okay, let's say my grandfatherowns, I don't know, a ranch in
Hawaii and he dies and I wantedto, I'm supposed to take it over
.
It's written in the will,that's the way it's done, can we
(30:47):
?
Is there a continuation clausein this, or do I need to go
refill paperwork out ifsomething happens?
Speaker 4 (30:53):
I'm just scenarios, sorry yeah, yeah, you know, um,
that is maybe above my pay grade.
Sorry, yeah, no, I would.
I would say that I I mean at abare minimum, you can just
reapply okay with your name.
But you know, if you, if you dosomething like hold it in a
family trust or something likethat, I think that there was a
(31:13):
requirement to, to refile Ithink it really probably depends
on the status, um that underwhich you're holding it.
Um, again, kind of outside mypre-grade.
Speaker 2 (31:25):
Oh, I'm sorry.
Speaker 4 (31:25):
Yeah, no, no, no, it's okay.
Speaker 3 (31:28):
Sometimes you got to just say you don't know, and
that's one of them.
Yeah, nothing wrong with that.
Oh well, thank you.
Is there anything else you wantto add or share about the?
Speaker 4 (31:40):
program.
You know, I I think you know oneof the things that, as I
mentioned, when obviouslyprotecting against fraud, waste
and abuse is a piece of this,and a lot of that is just having
documentation upfront to showus what you're doing, having
those lease agreements, as yousaid.
The other thing here is reallyto just ensure that our quality
(32:01):
agricultural properties arebeing productive and
contributing to the food system,and one of the things that I
will say has resulted in thechanges in the ag code is we
have had more people going ohhey, I want to lease my land to
somebody that will actually useit, and you know that is the
(32:21):
goal, and so I'm excited to seemore of that.
I'm hoping that we can provide,either through the county or
another nonprofit organization,is a curated list of OK, these
are farmers that know whatthey're doing, they're looking
for land, and over here arelandowners that want to be able
(32:43):
to still take advantage of thesetax benefits but are either too
old to farm it or don't knowwhat they're doing and being
able to those folks so that weactually I'm gonna have a
recommendation for you then,because we have a program called
land link and after this,remind me, and I will get you in
contact with the gal who's incharge of it so you can talk to
her and see how it's going,because it's been pretty
(33:04):
successful.
Speaker 2 (33:04):
knock on wood here, and I was like just remind me
after we're done with this.
Sorry to interrupt you Go forit.
Speaker 4 (33:12):
No, that would be fabulous.
I think that's kind of the nextstage in all of this is people
are saying, okay, I want to makesure that I can keep these
benefits.
I need to get my land insomething that is productive,
legitimate agriculture and weknow there are people looking
for land to lease.
So we just did.
Speaker 2 (33:31):
And it's also about finding that right fit for the
person.
So we've had ones that,specifically, are looking for
organic and then some that arelooking for no-till and, again,
very you know, they want to makesure their their land's going
to be taken care of the way theywant it to be taken care of
yeah, yeah, absolutely, I get ityeah, that makes sense that
that's the logical next step.
Speaker 3 (33:50):
It's a great way for us to continue to keep those
agricultural lands in ag In ag.
Speaker 4 (33:55):
Yeah, and I'll just mention a couple other
initiatives as they're kind ofrelevant to this objective, and
one of them is you know, here inthe county of Hawaii we have
most of our land in state landuse agriculture.
We have most of our land instate land use agriculture.
(34:16):
That includes some of the bigsubdivisions, the HPPs and the
orchid lands and even some ofthe plantation camps in Hamakua
in my district.
One of the things that we'retrying to figure out a mechanism
for is to convert those smallercontiguous lots from state land
use ag to rural, and the reasonfor doing that is that any
(34:38):
regulations or protections thatwe put in place around the use
of agricultural land right now,they have to also compensate for
the sort of non-conforming useof being essentially a rural
residential subdivision.
It doesn't mean if you convertto rural, if we convert to state
land use rural, you can stilluse these tax programs.
(34:59):
You can still.
If you're farming on that oneacre parcel or the two acre
parcel, you can still enroll inthese tax benefit programs.
So it's not going to have anyimpact on your taxes.
But what it does is it allowsus to protect and incentivize
agricultural activities onlegitimate ag land without
having to compensate.
The other thing that we'relooking at is how to deal with
(35:22):
transient accommodation, rentals, overnight accommodations on
agricultural land, and I bringthat up too, because right now,
the county of Hawaii cannotregulate overnight
accommodations under the agtourism policy at the state
level.
However, yeah, yeah, Maui can.
It's limited to counties withthree islands, which is one of
(35:47):
the weirder things that thestate has done the weirder
things that the state has done.
But the other argument I wouldmake there is that if we had the
ability to regulate overnightaccommodations through the ag
tourism policy, we could putsome conditions on that that
would ensure that there waslegitimate agricultural activity
while still allowing fortransient accommodations.
(36:07):
And I know you know from theassessments that have been done
here that for many of ourfarmers and ranchers, having a
side business that's related tothe tourism industry is like the
only way you make it right.
But what we don't want to havehappen and what we are seeing
right now is folks, of course,taking up ag land to do
(36:27):
transient accommodation withoutany farming.
So if we actually were able toregulate that under ag tourism,
that would be a better situationthan what we've got now.
So those are two other kind ofinitiatives that we're looking
at.
It requires the state to enableus to do it, so it's kind of a
challenge.
But as those pieces oflegislation come through, I hope
(36:48):
that folks listening and yourmembers will consider supporting
those endeavors, because Ithink it's going to be able to
continue to help us ensure thatag land is being used
appropriately and is not beingspeculated upon by outside
investors.
Speaker 2 (37:05):
Yeah, oh yeah.
Like I said, that's anationwide and, like you said,
international issue with a lotof people, but in Hawaii I think
it's much more easy for it tohappen sometimes.
Speaker 4 (37:16):
It's like on steroids .
Speaker 3 (37:18):
Yeah Well, thank you so much for joining us.
Speaker 4 (37:23):
Absolutely, and thank you for having me, and I hope
that anybody listening reallydid find this helpful, and my
door is always open too, so feelfree to give me a call.
My office here 961-8828.
My email heatherkimble athawaiicountygov.
I'm always happy to talk peoplethrough.
Although I cannot give youspecific tax advice on your
(37:44):
personal, I'm happy to give yougeneral information.
Speaker 2 (37:48):
Yeah, I always tell people I'm not an accountant.
I can teach you how to keepyour records and things, but I'm
not an accountant.
Yeah, tax law is not my area ofexpertise in any shape or form.
Thank you so much for joiningus today, and we hope our
listeners found this informativeand that it'll be useful to
them.
Speaker 3 (38:04):
Yeah, make sure to follow us on our social media
pages the Livestock PalauLivestock Extension Group, if
you haven't already, and be sureto visit the UHC TAR Extension
website and our YouTube channellisted in the show notes Yep yep
, like Mele said.
Speaker 2 (38:16):
for additional information about this topic,
see those show notes of thepodcast and the description box
of our YouTube page.
Thanks for listening to theLivestock Voila Owl Before we go
.
Show some love for yourfavorite podcast by leaving us a
review, anywhere you listen tothis and then stay tuned for
next month's episode.
Speaker 3 (38:36):
Yeah, thanks again to our sponsors the livestock
extension group of theuniversity of poa e manoa
college of tropical agricultureand human resilience, the center
for ag profitability of theuniversity of nebraska, lincoln,
and the western sustainableagriculture research and
education program.
Mahalo for listening, a hui hou.
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