LIHUE — The mayor’s veto stands.
The Kauai County Council on Wednesday officially killed a bill that would have used lease rents, rather than fair market values, to help calculate real property tax assessments for biotech research land users.
The decision, by a 5-1 vote, affirmed Mayor Bernard Carvalho Jr.’s veto against the bill earlier this month in which he expressed concerns about the bill’s impact on the agricultural industry on Kauai and the county’s ability to enforce it.
The council agreed.
“I don’t see how it fits into an equitable tax system,” Councilman KipuKai Kualii said before casting his vote against the bill.
The failed bill proposed to separate all agricultural lands on Kauai into three different categories — pasture, diversified agriculture and biotech research — when real property tax assessments are being calculated. Though all agricultural lands would be taxed at the same rate, the value of lands in the biotech research category would have been based on lease rents rather than fair market values.
Councilman Gary Hooser, who cast the lone dissenting vote against upholding the veto, said the failed bill would have followed existing real property tax policies by treating lands differently based on use and created a more equal playing field, because large landowners can charge higher lease rents to companies that can absorb the financial impact.
“It’s frustrating because the underlying policy, I believe, is a very, very valid one: different types of activities deserve different types of treatment,” Hooser said. “The policy is an existing one, so I find it rather troubling that the administration says they don’t support that policy.”
Councilwoman JoAnn Yukimura, who cast a silent vote on the bill, agreed and said she would still like to work with county officials to address the bill’s underlying policy issues. A silent vote is counted in the affirmative, but is a way to show lack of support on the voter’s behalf.
“Throughout this process, my goal has not been to shut down or target the seed companies but to reflect actual agricultural value of the land used for large biotech agriculture because I believe they are a quantum level higher than conventional or traditional agriculture,” Yukimura said. “Since real property taxes represent value, I think it is reasonable to tax them based on a reasonable reflection of their agricultural value.”
Had the bill passed, County Managing Director Nadine Nakamura said enforcing it would have placed a strain on county resources and required additional taxpayer funding.
“Really tracking all of this is going to require additional resources,” Nakamura said. “We are behind on the agricultural dedication review process, so we’re trying to fix that and get back on board. So, the timing is not good to add another level of review.”
Councilman Arryl Kaneshiro was recused and did not vote on the bill. He works for Grove Farms, a company which would have been impacted by the rule.
County spokeswoman Beth Tokioka said Carvalho vetoed the bill because it would target businesses in unfair ways.
“He feels that this measure would be a disincentive to agriculture in many ways, and that the current structure of the various categories of agriculture within the real property tax code are sufficient to properly and fairly assess agricultural lands,” she wrote in an email.
• The council, by a unanimous vote, also passed a law that will give nonresidential property owners an extension to obtain building permits for an additional dwelling unit, if they already declared their intent to build it in 2007, when the county practice was officially discontinued. Those property owners must re-certify their documents with the Planning Department by Feb. 15 and pay an initial $250 regulatory fee that will be used to fund inspections and administrative costs for contested case hearings on ADU re-certifications.