Revised Ordinances of Honolulu
(Link to original Word Processing Version)
Article 10. Exemptions
Sections:
8-10.1 Claims for certain exemptions.
8-10.2 Rules and regulations.
( 8-10.3 Assignment of partial exemptions. Repealed by Ord. 02-45.)
8-10.3. Reserved.
8-10.4 Homes.
8-10.5 Home, lease, lessees defined.
8-10.6 Exemption--Homes of totally disabled veterans.
8-10.7 Exemption--Persons affected with leprosy.
8-10.8 Exemption--Persons with impaired sight or hearing and persons totally disabled.
8-10.9 Exemption--Nonprofit medical, hospital indemnity association.
8-10.10 Exemption--Charitable purposes.
8-10.11 Exemption--Property used in manufacture of pulp and paper.
8-10.12 Exemption--Crop shelters.
8-10.13 Exemption--Dedicated lands in urban districts.
8-10.14 Exemption--Air pollution control facility.
8-10.15 Exemption--Alternate energy improvements.
8-10.16 Exemption--Fixtures used in manufacturing or producing tangible personal products.
8-10.17 Exemption--Public property.
8-10.18 Lessees of exempt real property.
8-10.19 Property of the United States leased under the National Housing Act.
8-10.20 Exemption--Low-income rental housing.
8-10.21 Claim for exemption.
8-10.22 Exemption--Historic residential real property dedicated for preservation.
8-10.23 Other exemptions.
8-10.24 Exemption--Credit union.
8-10.25 Exemption--Slaughterhouses.
8-10.26 Exemption--Qualifying construction work.
8-10.27 Exemption -- Public service.
8-10.28. Additional terms and conditions for exemption of low-income rental housing projects on
Hawaiian home lands.
8-10.29 Exemption—Nonprofit organization thrift shops.
8-10.30 Exemption—Historic commercial real property dedicated for preservation.
8-10.31 Exemption—Qualifying agricultural improvements for dedicated vacant agricultural lands.
8-10. 32 Exemption—Kuleana land.
8-10.__ Exemption—For-profit group child care centers.
Sec. 8-10.1 Claims for certain exemptions.
(a) None of the exemptions from taxation granted in Sections 8-10.4, 8-10.6 through 8-10.11,
8-10.24, 8-10.27, 8-10.29, 8-10.32, and 8-10.__ shall be allowed in any case, unless
the claimant shall have filed with the department of budget and fiscal services
on or before September 30th preceding the tax year for which such exemption
is claimed, a claim for exemption in such form as shall be prescribed
by the department.
(b) A claim for exemption, once allowed, shall have continuing effect until:
(1) The exemption is disallowed;
(2) The assessor voids the claim after first giving notice (either to the claimant
or to all claimants in the manner provided for by this chapter) that
the claim or claims on file will be voided on a certain date,
not less than 30 days after such notice;
(3) The five-year period for exemption, as allowed in Sections 8-10.4(e) and 8-10.11, expires;
or
(4) The report required by subsection (d) is made.
(c) A claimant may file a claim for exemption even though there is on
file and in effect a claim covering the same premises, or a claim
previously filed and disallowed or otherwise voided. However, no such claim shall be
filed if it is identical with one already on file and having continuing
effect. The report required by subsection (d) of this section may be accompanied
by or combined with a new claim.
(d) The owner of any property which has been allowed an exemption under Sections
8-10.4, 8-10.6 through 8-10.11, 8-10.24, 8-10.27, 8-10.29, 8-10.32, or 8-10.__ has a duty
to report to the assessor within 30 days after such owner or property
ceases to qualify for such an exemption for, among others, the following reasons:
(1) The ownership of the property has changed;
(2) A change in the facts previously reported has occurred concerning the occupation, use
or renting of the premises, buildings or other improvements thereon; or
(3) A change in status has occurred which affects the owner's exemption.
Such report shall have the effect of voiding the claim for exemption previously
filed, as provided in subsection (b)(4) of this section. The report shall be
sufficient if it identifies the property involved, states the change in facts or
status, and requests that the claim for exemption previously filed be voided.
In the event the property comes into the hands of a fiduciary who
is answerable as provided for by this chapter, the fiduciary shall make the
report required by this subsection within 30 days after the assumption of the
fiduciary's duties or within the time otherwise required, whichever is later.
A penalty shall be imposed for the failure to make the report required
by this subsection. The amount of the penalty shall be $500 for each
year that the change in facts remains unreported. In addition to this penalty,
the taxes due on the property plus any additional penalties and interest thereon
shall be a paramount lien on the property as provided for by this
chapter.
(e) If the assessor is of the view that, for any tax year, the
exemption should not be allowed, in whole or in part, the assessor may
at any time within five years of October 1st of that year disallow
the exemption for that year, in whole or in part, and may add
to the assessment list for that year the amount of value involved, in
the manner provided for by this chapter for the assessment of omitted property.
(Sec. 8-10.1, R.O. 1978 (1987 Supp. to 1983 Ed.); Am. Ord. 88-01, 89-129,
95-67, 96-15, 01-60, 03-05, 06-04, 07-7, 09-24, 09-32)
Sec. 8-10.2 Rules and regulations.
The director of finance may promulgate rules and regulations as may be necessary
to administer Sections 8-10.4 to 8-10.17. (Sec. 8-10.2, R.O. 1978 (1983 Ed.))
( Sec. 8-10.3 Assignment of partial exemptions. Repealed by Ord. 02-45.)
Sec. 8-10.3 Reserved.
Sec. 8-10.4 Homes. *
(a) Real property owned and occupied as the owner's principal home as of the
date of assessment by an individual or individuals, shall be exempt only to
the following extent from property taxes:
(1) Totally exempt where the value of a property is not in excess of
$80,000;
(2) Where the value of the property is in excess of $80,000, the exemption
shall be the amount of $80,000.
Provided:
(A) That no such exemption shall be allowed to any corporation, copartnership or company;
(B) That the exemption shall not be allowed on more than one home for
any one taxpayer;
(C) That where the taxpayer has acquired the taxpayer's home by a deed made
on or after July 1, 1951, the deed shall have been recorded on
or before September 30th immediately preceding the year for which the exemption is
claimed;
(D) That a husband and wife shall not be permitted exemption of separate homes
owned by each of them, unless they are living separate and apart, in
which case they shall each be entitled to one-half of one exemption; and
(E) That a person living on premises, a portion of which is used for
commercial purposes, shall not be entitled to an exemption with respect to such
portion, but shall be entitled to an exemption with respect to the portion
thereof used exclusively as a home.
For the purposes of this section, "real property owned and occupied as the
owner's principal home" means occupancy of a home in the city and may
be evidenced by, but not limited to, the following indicia: occupancy of a
home in the city for more than 270 calendar days of a calendar
year; registering to vote in the city; being stationed in the city under
military orders of the United States; and filing of an income tax return
as a resident of the State of Hawaii, with a reported address in
the city. The director may demand documentation of the above or other indicia
from a property owner applying for an exemption or from an owner as
evidence of continued qualification for an exemption. Failure to respond to the director's
request shall be grounds for denying a claim for an exemption or disallowing
an existing exemption.
In the event the director receives satisfactory evidence that an individual occupies a
home outside the city or there is documented evidence of the individual's intent
to reside outside the city, that individual shall not be qualified for an
exemption or continued exemption under this section, as the case may be.
Notwithstanding any provision to the contrary, for real property held by a trustee
or other fiduciary, the trustee or other fiduciary shall be entitled to the
exemption where: (i) the settlor of the trust occupies the property as the
settlor’s principal home; or (ii) the settlor of the trust dies and a
beneficiary entitled to live in the home under the terms of the trust
document occupies the property as the beneficiary’s principal home.
(b) The use of a portion of any building or structure for the purpose
of drying coffee and the use of a portion of real property, including
structures, in connection with the planting and growing for commercial purposes, or the
packing and processing for such purposes, of flowers, plants, or foliage, shall not
affect the exemptions provided for by this section.
(c) Where two or more individuals jointly, by the entirety, or in common own
or lease land on which their homes are located, each home, if otherwise
qualified for the exemption granted by this section, shall receive the exemption. If
a portion of land held jointly, by the entirety, or in common by
two or more individuals is not qualified to receive an exemption, such disqualification
shall not affect the eligibility for an exemption or exemptions of the remaining
portion.
(d) A taxpayer who is 65 years of age or over on or before
June 30th preceding the tax year for which the exemption is claimed and
who qualifies under subsection (a) of this section shall be entitled to a
home exemption of $120,000.
For the purpose of this subsection, a husband and wife who own property
jointly, by the entirety, or in common, on which a home exemption under
the provisions of subsection (a) of this section has been granted shall be
entitled to the $120,000 home exemption set forth above when at least one
of the spouses qualifies for this home exemption.
(e) (1) In lieu of the $120,000 home exemption provided in subsection (d), a low-income
taxpayer who:
(A) Is 75 years of age or over on or before June 30th preceding
the tax year for which the exemption is claimed;
(B) Qualifies under subsection (a) of this section;
(C) Applies for the exemption as required in subdivision (2) of this subsection; and
(D) Has household income that meets the definition of “low-income” in Section 8-10.20(a)
shall be entitled to one of the following home exemption amounts for
that tax year:
Age of Taxpayer Home Exemption Amount
75 years of age or over but not 80 years of age or
over $140,000
80 years of age or over but not 85 years of age or
over $160,000
85 years of age or over but not 90 years of age or
over $180,000
90 years of age or over $200,000
(2) The claim for exemption, once allowed, shall continue for a maximum period of
five years, and may be renewed for a period of five years by
filing a claim for exemption on or before September 30th of the year
in which the multiple used in computing the home exemption increases, to coincide
with the applicant’s attainment of 80 or 85 years of age, except the
renewal at 90 years of age shall extend for the life of the
applicant.
(3) For the purpose of this subsection, a husband and wife who own property
jointly, by the entirety, or in common, on which a home exemption under
the provisions of subsection (a) of this section has been granted and qualify
under this subsection shall be entitled to the applicable home exemption set forth
above when at least one of the spouses qualifies each year for the
minimum age of the applicable home exemption.
(
f) To qualify for the exemptions under subsections (d) and (e), a taxpayer must
provide, upon request, a photocopy of or submit for inspection, a current, valid
government-issued identification containing a photo and the date of birth, such as a
Hawaii State driver’s license, a Hawaii State identification card, or a passport.
[ * Editor’s Note: The amendments made to subsections (a), (d) and (e) that appear
in this publication will apply to the tax years beginning
July 1, 2007 and thereafter. For the language of those subsections that existed prior
to the amendments, see Ordinances 06-04 and 06-07.]
(Sec. 8-10.4, R.O. 1978 (1983 Ed.); Am. Ord. 88-84, 89-132, 94-76, 96-15, 04-31,
05-004, 06-04, 06-07, 09-32)
Sec. 8-10.5 Home, lease, lessees defined.
(a) For the purpose of Section 8-10.4, the word "home" includes:
(1) The entire homestead when it is occupied by the taxpayer as such;
(2) A residential building on land held by the lessee or the lessee's successor
in interest under a lease for a term of five years or more
for residential purposes and owned and used as a residence by the lessee
or the lessee's successor in interest, where the lease and any extension, renewal,
assignment or agreement to assign the lease, have been duly entered into and
recorded prior to October 1st preceding the tax year for which the exemption
is claimed, and whereby the lessee agrees to pay all taxes during the
term of the lease;
(3) A condominium unit, with its appertaining common interest, which is occupied as a
residence by the owner of the unit. The "owner of a condominium unit"
means the individual:
(A) Owning the fee simple interest in the unit and its appertaining common interest;
or
(B) Holding the leasehold interest in the unit and its appertaining common interest under
a lease:
(i) For a term of five years or more for residential purposes;
(ii) Duly entered into and recorded prior to October 1st preceding the tax year
for which the exemption is claimed; and
(iii) Requiring the holder of the leasehold interest to pay all real property taxes
during the term of the lease.
(4) An apartment which is a living unit (held under a proprietary lease by
the tenant thereof) in a multiunit residential building on land held by a
cooperative apartment corporation (of which the proprietary lessee of such living unit is
a stockholder) under a lease for a term of five years or more
for residential purposes and which apartment is used as a residence by the
lessee- stockholder, where the lease and any extension or renewal have been duly
entered into and recorded prior to October 1st preceding the tax year for
which the exemption is claimed, and whereby the lessee-stockholder agrees to pay all
taxes during the term of the lease provided that:
(A) The exemption shall not be allowed in respect to any cooperative apartment unit
where the owner of the cooperative apartment unit claims exemption on a home
or other cooperative apartment unit; and
(B) The owner or owners of a cooperative apartment building or premises shall not
be permitted exemptions where a husband and wife owner of a cooperative apartment
unit own separate cooperative apartment units or separate homes owned by each of
them, unless they are living separate and apart, in which case the owner
of the cooperative apartment or premises shall be entitled to one-half of one
exemption;
(5) An apartment in a multiunit apartment building which is occupied by the owner
of the entire apartment building as such person's residence, provided that:
(A) The exemption shall not be allowed in respect to any apartment owner who
claims any other home exemption; and
(B) A husband or wife owner of the aforementioned type of apartment shall not
be allowed a full exemption where the husband and wife are living separate
and apart and each is maintaining an apartment or home entitled to an
exemption, in which case they shall each be entitled to one-half of one
exemption;
(6) That portion of a residential duplex and that portion of land appurtenant to
the duplex which are occupied by the owner of the duplex and land
as the owner's residence, provided that:
(A) The exemption shall not be allowed in respect to any duplex owner who
claims any other home exemption;
(B) The portion of the appurtenant land shall not be exempt unless owned in
fee by the duplex owner; and
(C) A husband or wife owner of the duplex shall not be allowed a
full exemption where the husband and wife are living separate and apart and
each is maintaining a duplex or home entitled to an exemption, in which
case they shall each be entitled to one-half of one exemption;
(7) Premises held under an agreement to purchase the same for a home, where
the agreement has been duly entered into and recorded prior to October 1st
preceding the tax year for which the exemption is claimed, whereby the purchaser
agrees to pay all taxes while purchasing the premises;
(8) An apartment which is a living unit (held under a lease by the
tenant thereof) in a multiunit residential building used for retirement purposes under a
lease for a term to last during the lifetime of the lessee and
the lessee's surviving spouse and which apartment is used as a residence by
the lessee and the lessee's surviving spouse, and where the apartment unit reverts
back to the lessor upon the death of the lessee and the lessee's
surviving spouse, and where the lease has been duly entered into and recorded
prior to October 1st preceding the tax year for which the exemption is
claimed, and whereby the lessee agrees to pay all taxes during the term
of the lease; and
(9) That portion of a property which is occupied as the property owner’s principal
home.
(b) The subletting by the taxpayer of not more than one room to a
tenant shall not affect the exemption provided for by Section 8-10.4.
(c) As used in Section 8-10.4, in the first paragraph of Section 8-6.3 and
in Section 8-10.1, the word "lease" shall be deemed to include a sublease,
and the word "lessee" shall be deemed to include a sublessee.
(Sec. 8-10.5, R.O. 1978 (1983 Ed.); Am. Ord. 92-63, 96-15, 09-32)
Sec. 8-10.6 Exemption--Homes of totally disabled veterans.
(a) Real property:
(1) Owned and occupied as a home by any person who is totally disabled
due to injuries received while on duty with the armed forces of the
United States;
(2) Owned by any such person together with such person's spouse and occupied by
either or both spouses as a home; or
(3) Owned and occupied by a widow or widower of such totally disabled veteran
who shall remain unmarried and who shall continue to own and occupy the
premises as a home,
is exempted from all property taxes, other than special assessments, subject to subsection
(b).
(b) The exemption provided for in subsection (a) shall be subject to the following:
(1) That the total disability of the veteran was incurred while on duty as
a member of the armed forces of the United States, and that the
director may require proof of total disability.
(2) That the home exemption shall be granted only as long as the veteran
claiming exemption remains totally disabled.
(3) That the exemption shall not be allowed on more than one house for
any one person.
(4) That a person living on premises, a portion of which is used for
commercial purposes, shall not be entitled to an exemption with respect to such
portion, but shall be entitled to an exemption with respect to the portion
used exclusively as a home; provided, that this exemption shall not apply to
any structure, including the land thereunder, which is used for commercial purposes.
(5) That a widow or widower of a disabled veteran may apply for an
exemption and the exemption may be granted even if the disabled veteran did
not apply for and obtain the exemption provided for in subsection (a) during
the veteran’s lifetime, provided that the widow or widower submits proof satisfactory to
the director that, at the time of the veteran’s death, the veteran would
have qualified for an exemption under this section.
(c) For the purposes of this section, the word “home” includes the entire homestead
when it is occupied by a qualified totally disabled veteran or the veteran's
qualifying widow or widower as a residence; houses where the occupant disabled veteran
owner or the qualifying widow or widower owner sublets not more than one
room to a tenant; and premises held under an agreement by which the
disabled veteran agrees to purchase the same for a residence, where the agreement
has been duly entered into and recorded prior to October 1st preceding the
tax year for which the exemption is claimed, whereby the purchaser agrees to
pay all taxes while purchasing the premises.
(d) The exemption shall take effect beginning with the next tax payment date, provided
that the claimant shall have filed with the department a claim for a
disability exemption along with a copy of a physician's certificate of disability on
such form as the department shall prescribe on or before June 30 for
the first payment or December 31 for the second payment.
(Sec. 8-10.6, R.O. 1978 (1983 Ed.); Am. Ord. 96-15, 00-63)
Sec. 8-10.7 Exemption--Persons affected with leprosy.
Any person who has been declared by authority of law to be a
person affected with leprosy in the communicable stage and is admitted to a
hospital for isolation treatment shall, so long as such person is so hospitalized,
and thereafter for so long as such person has been so declared to
be therefrom temporarily released, and so long as such person remains or continues
under temporary release, be exempted from real property taxes on all real property
owned by such person on the date when such person was declared to
be a person so affected with leprosy, up to, but not exceeding, a
taxable value of $25,000.00. (Sec. 8-10.7, R.O. 1978 (1983 Ed.))
Sec. 8-10.8 Exemption--Persons with impaired sight or hearing and persons totally disabled.
(a) Any person who is blind or deaf, so long as the person's sight
or hearing is so impaired, shall be exempt from real property taxes on
all real property owned by the person up to, but not exceeding a
taxable value of $25,000.00. The impairment of sight or hearing shall be certified
to by a qualified ophthalmologist, optometrist or otolaryngologist, as the case may be,
on forms prescribed by the department of finance.
(b) Any person who is totally disabled, as long as the person is totally
disabled, shall be exempt from real property taxes on all real property owned
by the person up to, but not exceeding a taxable value of $25,000.00.
The disability shall be certified to by a physician licensed under HRS, Chapter
453 or 460, or both, on forms prescribed by the department of finance.
(c) When used in this section:
"Blind" means a person whose visual acuity does not exceed 20/200 in the
better eye with correcting lenses, or whose visual acuity is greater than 20/200
but is accompanied by a limitation in the field of vision such that
the widest diameter of the visual field subtends an angle no greater than
20 degrees.
"Deaf" means a person whose average loss in speech frequencies (500-2000 Hertz) in
the better ear is 82 decibels, A.S.A., or worse.
"Totally disabled" means a person who is totally and permanently disabled, either physically
or mentally, which results in the person's inability to engage in any substantial
gainful business or occupation.
(Sec. 8-10.8, R.O. 1978 (1983 Ed.); Am. Ord. 89-138)
Sec. 8-10.9 Exemption--Nonprofit medical, hospital indemnity association.
Every association or society organized and operating under HRS Chapter 432, solely as
a nonprofit medical indemnity or hospital service association or society or both shall
be from the time of such organization, exempt from real property taxes on
all real property owned by it. (Sec. 8-10.9, R.O. 1978 (1983 Ed.))
Sec. 8-10.10 Exemption--Charitable purposes.
(a) There shall be exempt from real property taxes real property, or a portion
thereof, designated in subsection (b) or (c) of this section and meeting the
requirements stated therein, actually and (except as otherwise specifically provided) exclusively used for
nonprofit purposes. If an exemption is claimed under one of these subsections (b)
and (c), an exemption for the same property, or a portion thereof, may
not also be claimed under the other of these subsections.
(b) This subsection applies to property, or a portion thereof, owned in fee simple,
leased or rented for a period of one year or more, by the
person using the property for the exempt purposes, hereinafter referred to as the
person claiming the exemption. If the property, or a portion thereof, for which
exemption is claimed is leased or rented, the lease or rental agreement shall
be in force and recorded in the bureau of conveyances or filed in
the office of the assistant registrar of the land court.
Exemption is allowed by this subsection to the following property:
(1) Property used for school purposes including:
(A) Kindergartens, grade schools, junior high schools and high schools, which carry on a
program of instruction meeting the requirements of the compulsory school attendance law, HRS
Section 302A-1132, or which are for preschool children who have attained or will
attain the age of five years on or before December 31st of the
school year; provided, that any claim for exemption based on any of the
foregoing uses shall be accompanied by a certificate issued by or under the
authority of the department of education stating that the foregoing requirements are met.
(B) Junior colleges or colleges carrying on a general program of instruction of college
level. The property exempt from taxation under this paragraph is limited to buildings
for educational purposes (including dormitories), housing owned by the school or college and
used as residence for personnel employed at the school or college, campus and
athletic grounds, and realty used for vocational purposes incident to the school or
college.
(C) Group child care centers, which meet the child care facilities requirements of HRS
Chapter 346, Part VIII; provided, that any claim for exemption based on the
foregoing use shall be accompanied by a certificate issued by or under the
authority of the department of human services stating that the foregoing requirements are
met. As used herein, “group child care centers” means a facility other than
a residence, maintained by an individual, organization, or agency for the purpose of
providing child care for preschool age children ages two years to six years
and infants and toddlers ages six weeks to 36 months.
(2) Property used for hospital and nursing home purposes, including housing for personnel employed
at the hospital; in order to qualify under this paragraph the person claiming
the exemption shall present with the claim a certificate issued by or under
the authority of the state department of health that the property for which
the exemption is claimed consists in, or is a part of, hospital or
nursing home facilities which are properly constituted under the law and maintained to
serve, and which do serve the public.
(3) Property used for church purposes, including incidental activities, parsonages and church grounds, the
property exempt from taxation being limited to realty exclusive of burying grounds (exemption
for which may be claimed under paragraph (4) of this subsection).
(4) Property used as cemeteries (excluding, however, property used for cremation purposes) maintained by
a religious society, or by a corporation, association or trust organized for such
purpose.
(5) Property dedicated to public use by the owner, which dedication has been accepted
by the state or county, reduced to writing, and recorded in the bureau
of conveyances; and property which has been set aside for public use and
actually used therefor for a period not less than five years.
(6) Property owned by any nonprofit corporation, admission to membership of which is restricted
by the corporate charter to members of a labor union; property owned by
any government employees' association or organization, one of the primary purposes of which
is to improve employment conditions of its members; property owned by any trust,
the beneficiaries of which are restricted to members of a labor union; property
owned by any association or league of federal credit unions chartered by the
United States, the sole purpose of which is to promote the development of
federal credit unions in the state.
Notwithstanding any provision in this section to the contrary, the exemption shall apply
to property or any portion thereof which is leased, rented or otherwise let
to another, if such leasing, renting or letting is to a nonprofit association,
organization or corporation.
(c) This subsection shall apply to property owned in fee simple or leased or
rented for a period of one year or more, the lease or rental
agreement being in force and recorded in the bureau of conveyances at the
time the exemption is claimed, by either:
(1) A corporation, society, association or trust having a charter or other enabling
act or governing instrument which contains a provision or has been construed by
a court of competent jurisdiction as providing that in the event of dissolution
or termination of the corporation, society, association or trust, or other cessation of
use of the property for the exempt purpose, the real property shall be
applied for another charitable purpose or shall be dedicated to the public, or
(2) A corporation chartered by the United States under Title 36, United States
Code, as a patriotic society.
Exemption is allowed by this subsection for property used for charitable purposes which
are of a community, character building, social service or educational nature, including museums,
libraries, art academies and senior citizen housing facilities qualifying for a loan under
the laws of the United States as authorized by Section 202 of the
Housing Act of 1959 as amended by the Housing Act of 1961, the
Senior Citizens Housing Act of 1962, the Housing Act of 1964 and the
Housing and Urban Development Act of 1965.
(d) If any portion of the property which might otherwise be exempted under this
section is used for commercial or other purposes not within the conditions necessary
for exemption (including any use the primary purpose of which is to produce
income even though such income is to be used for or in furtherance
of the exempt purposes) that portion of the premises shall not be exempt
but the remaining portion of the premises shall not be deprived of the
exemption if the remaining portion is used exclusively for purposes within the conditions
necessary for exemption. In the event of an exemption of a portion of
a building, the tax shall be assessed upon so much of the value
of the building (including the land thereunder and the appurtenant premises) as the
proportion of the floor space of the nonexempt portion bears to the total
floor space of the building.
(e) The term "for nonprofit purposes," as used in this section requires that no
monetary gain or economic benefit inure to the person claiming the exemption, or
any private shareholder, member or trust beneficiary. "Monetary gain" includes, without limitation, any
gain in the form of money or money's worth. "Economic benefit" includes, without
limitation, any benefit to a person in the course of that person's business,
trade, occupation or employment.
(Sec. 8-10.10, R.O. 1978 (1983 Ed.); Am. Ord. 88-01, 01-52, 09-24)
Sec. 8-10.11 Exemption--Property used in manufacture of pulp and paper.
All property in the state, both real and personal, actually and solely used
or to be used, whether by the owner or lessee thereof, in connection
with the manufacture of pulp and paper from bagasse fibre, shall be exempt
from property taxes for a period of five years from the first day
of October following commencement of construction of a plant or plants on the
property for such purpose. (Sec. 8-10.11, R.O. 1978 (1983 Ed.); Am. Ord. 96-15)
Sec. 8-10.12 Exemption--Crop shelters.
Any other law to the contrary notwithstanding, any permanent structure constructed or installed
on any taxable real property consisting of frames or supports and covered by
rigid plastic, fiberglass or other rigid and semirigid transparent or translucent material, and
including wooden laths, used primarily for the protection of crops shall be exempted
in determining and assessing the value of such taxable real property for 10
years or for a period of 10 years from the first day of
October following commencement of construction or installation of the structure on the property
for such purpose; provided, that any temporary structure so constructed or installed and
covered by flexible plastic or other flexible transparent or translucent material, used for
such purpose, shall be so exempted not subject to the 10-year limitation; provided
further, that such exemption shall continue only so long as the structure is
maintained in good condition. Only structures used for commercial agricultural or horticultural purposes
shall be included in the exemption. (Sec. 8-10.12, R.O. 1978 (1983 Ed.); Am.
Ord. 96-15)
Sec. 8-10.13 Exemption--Dedicated lands in urban districts.
(a) Portions of taxable real property which are dedicated and approved by the director
of finance as provided for by this section shall be exempted in determining
and assessing the value of such taxable real property.
(b) Any owner of taxable real property in an urban district desiring to dedicate
a portion or portions thereof for landscaping, open spaces, public recreation and other
similar uses shall petition the director of finance stating the exact area of
the land to be dedicated and that the land is not within the
setback and open space requirements of applicable zoning and building code laws and
ordinances, and that the land shall be used, improved and maintained in accordance
with and for the sole purpose for which it was dedicated, except that
land within a historic district may be so dedicated without regard to the
setback and open space requirements of applicable zoning and building code laws and
ordinances.
The director shall make a finding as to whether the use to which
such land will be dedicated has a benefit to the public at least
equal to the value of the real property taxes for such land. Such
finding shall be measured by the cost of improvements, the continuing maintenance thereof,
and such other factors as the director may deem pertinent. If the director
finds that the public benefit is at least equal to the value of
real property taxes for such land, the director shall approve the petition and
declare such land to be dedicated land.
(c) The approval of the petition by the director shall constitute a forfeiture on
the part of the owner of any right to change the use of
the owner's land for a minimum period of 10 years, automatically renewable indefinitely,
subject to cancellation by either the owner or the director upon five years'
notice at any time after the end of the fifth year.
(d) Failure of the owner to observe the restrictions on the use, improvement, and
maintenance of the owner's land shall cancel the special tax exemption privilege retroactive
to the date of the original dedication, and all differences in the amount
of taxes that were paid and those that would have been due from
the assessment of the tax exempted portion of the owner's land shall be
payable together with interest of five percent a year from the respective dates
that these payments would have been due. Failure to observe the restrictions on
the use means failure for a period of over 12 consecutive months to
use, improve and maintain the land in the manner requested in the petition
or any overt act changing the use for any period. Nothing in this
paragraph shall preclude the county from pursuing any other remedy to enforce the
covenant on the use of the land.
(e) The director shall prescribe the form of the petition. The petition shall be
filed with the director by September 1st of any calendar year and shall
be approved or disapproved by October 31st of such year. If approved, the
exemption based upon the use requested in the dedication shall be effective July
1st of the following tax year.
(f) The owner may appeal any disapproved petition as in the case of an
appeal from an assessment.
(g) The director shall make and adopt necessary rules and regulations including such rules
and regulations governing minimum areas which may be dedicated for the improvement and
maintenance of such areas.
(h) "Landscaping" means lands which are improved by landscape architecture, cultivated plantings or gardening.
(i) "Open spaces" means lands which are open to the public for pedestrian use
and momentary repose, relaxation and contemplation.
(j) "Public recreation" refers to lands which may be used by the public as
parks, playgrounds, historical sites, campgrounds, wildlife refuges, scenic sites, and other similar uses.
(k) "Owner" includes lessees of real property whose lease term extends at least 10
years from January 1st following the filing of the petition.
(Sec. 8-10.13, R.O. 1978 (1987 Supp. to 1983 Ed.); Am. Ord. 95-15)
Sec. 8-10.14 Exemption--Air pollution control facility.
(a) The value of all property in the county (not including a building and
its structural components, other than a building which is exclusively a treatment facility)
actually and solely used or to be used as an air pollution control
facility as the term is defined in HRS Chapter 237, shall be exempted
from the measure of the taxes imposed by this chapter; provided, however, the
property exemption shall be applicable only with respect to a certified facility which
is property (1) the construction, reconstruction or erection of which is completed by
the taxpayer after June 30, 1969, or (2) acquired by the taxpayer after
June 30, 1969, if the original use of the property commences with the
taxpayer after June 30, 1969; provided, further, the facility is placed in service
by the taxpayer before July 1, 1975.
(b) Application for the exemption provided herein shall first be made with the state
director of health who shall, if satisfied that the facility meets the pollution
emission criteria established by the state department of health, certify to that fact.
Upon receipt of the certification from the department of health, the director of
finance shall exempt the facility from the tax imposed by this chapter. A
new certificate shall be obtained from the director of health and filed with
the director of finance every two years certifying that the pollution control facility
complies with the pollutant emission criteria established by the department of health. The
director of finance shall furnish all forms required by this section.
(c) The director of finance shall promulgate rules and regulations necessary to administer this
section.
(Sec. 8-10.14, R.O. 1978 (1983 Ed.))
Sec. 8-10.15 Exemption--Alternate energy improvements.
(a) The value of all improvements in the county (not including a building or
its structural components, except where alternate energy improvements are incorporated into the building,
and then only that part of the building necessary to such improvement) actually
used for an alternate energy improvement shall be exempted from the measure of
the taxes imposed by this article.
(b) As used in this section "alternate energy improvement" means any construction or addition,
alteration, modification, improvement or repair work undertaken upon or made to any building,
property or land which results in:
(1) The production of energy from a source, or uses a process which does
not use fossil fuels, nuclear fuels or geothermal source. Such energy source may
include, but shall not be limited to, solid wastes, wind, solar or ocean
waves, tides or currents; or
(2) An increased level of efficiency in the utilization of energy produced by fossil
fuels or in the utilization of secondary forms of energy dependent upon fossil
fuels for its generation.
(c) Application for the exemption provided by this section shall be made with the
director on or before September 30th, preceding the tax year for which the
exemption is claimed, except that no claim need be filed for the exemption
of solar water collectors, heaters, heat pumps and similar devices. The director may
require the taxpayer to furnish reasonable information in order that the director may
ascertain the validity of the claim for exemption.
(d) The claim for exemption, once allowed, shall continue for a period of 25
years thereafter.
(e) The director may adopt rules and regulations to implement this section.
(Sec. 8-10.15, R.O. 1978 (1983 Ed.); Am. Ord. 96-15, 09-31)
Sec. 8-10.16 Exemption--Fixtures used in manufacturing or producing tangible personal products.
There shall be exempted and excluded from the measure of the taxes imposed
by this chapter, all fixtures which are categorized as machinery and other mechanical
or other allied equipment which are primarily and substantially used in manufacturing or
producing tangible personal products. (Sec. 8-10.16, R.O. 1978 (1983 Ed.))
Sec. 8-10.17 Exemption--Public property.
The following real property shall be exempt from taxation:
(a) Real property belonging to the United States, to the state or to the
county; provided, that real property belonging to the United States shall be taxed
upon the use or occupancy thereof as provided in Section 8-10.18, and there
shall be a tax upon the property itself if and when the Congress
of the United States so permits, to the extent so permitted and in
accordance with any conditions or provisions prescribed in such act of Congress; provided,
further, that real property belonging to the state or the county, or belonging
to the United States and in the possession, use and control of the
state, shall be taxed on the fee simple value thereof, and private persons
shall pay the taxes thereon and shall be deemed the "owners" thereof for
the purposes of this chapter, in the following cases:
(1) Property held on October 1st preceding the tax year under an agreement for
its conveyance by the government to private persons shall be deemed fully taxable,
the same as if the conveyance had been made.
(2) Property held on October 1st preceding the tax year under a government lease
shall be entered in the assessment lists and such tax rolls for that
year as fully taxable for the entire tax year, but adjustments of the
taxes so assessed may be made as provided for by this chapter so
that such tenants are required to pay only so much of the taxes
as is proportionate to the portion of the tax year during which the
real property is held or controlled by them.
(3) Property held under a government lease commencing after October 1st preceding the tax
year or under an agreement for its conveyance or a conveyance by the
government, made after October 1st preceding the tax year, shall be assessed as
omitted property as provided for by this chapter, but the taxes thereon shall
be prorated so as to require the payment of only so much of
the taxes as is proportionate to the remainder of the tax year.
(4) Property where the occupancy by the tenant for commercial purposes has continued for
a period of one year or more, whether the occupancy has been on
a permit, license, month-to-month tenancy or otherwise, shall be fully taxable to the
tenant after the first year of occupancy, and the property shall be assessed
in the manner provided in subdivisions (2) and (3) of this subsection for
the assessment of properties held under a government lease; provided, that the property
occupied by the tenant solely for residential purposes on a month-to-month tenancy shall
be excluded from this paragraph.
(5) (A) In any case of occupancy of a building or structure by two or
more tenants, or by the government and a tenant, under a lease for
a term of one year or more, the tax shall be assessed to
the tenant upon so much of the value of the entire real property
as the floor space occupied by the tenant proportionately bears to the total
floor space of the structure or building.
(B) For the purposes of subdivisions (2) and (3) of this subsection: "lease" means
any lease for a term of one year or more or which is
renewable for such period as to constitute a total term of one year
or more. A lease having a stated term shall, if it otherwise comes
within the meaning of the term "lease," be deemed a lease notwithstanding any
right of revocation, cancellation, or termination reserved therein or provided for thereby. Whenever
a lease is such that the highest and best use cannot be made
of the property by the lessee, the measure of the tax imposed on
such property pursuant to subdivisions (2) and (3) of this subsection shall be
its fee simple value upon consideration of the highest and best use which
can be made of the property by the lessee.
(C) Provided, further, that real property belonging to the United States, even though not
in the possession, use and control of the state, shall be taxed on
the fee simple value thereof, and private persons shall pay the taxes thereon
and shall be deemed the "owners" thereof for the purposes of this chapter,
in the following cases:
(i) Property held on October 1st preceding the tax year under an agreement for
the conveyance of the same by the government to private persons shall be
deemed fully taxable, the same as if the conveyance had been made, but
the assessment thereof shall not impair and shall be so made as to
not impair, any right, title, lien or interest of the United States.
(ii) Property held under an agreement for the conveyance of the same or a
conveyance of the same by the government, made after October 1st preceding the
tax year, shall be assessed as omitted property as provided for by this
chapter, but the taxes thereon shall be prorated so as to require the
payment of only so much of such taxes as is proportionate to the
remainder of the tax year, and in the case of property held under
an agreement for the conveyance of the same but not yet conveyed, the
assessment thereof shall not impair, and shall be so made as to not
impair, any right, title, lien or interest of the United States.
(b) Subject to HRS Section 101-39(B), any real property in the possession of the
state or county which is the subject of eminent domain proceedings commenced for
the acquisition of the fee simple estate in such land by the state
or county; provided the fact of such possession has been certified to the
director as provided by HRS Section 101-36 or 101-38, or is certified not
later than September 30th preceding the tax year for which such exemption is
claimed.
(c) Real property with respect to which the owner has granted to the state
or county a right of entry and upon which the state or county
has entered and taken possession under the authority of the right of entry
with intention to acquire the fee simple estate therein and to devote the
real property to public use; provided the state or county shall have, prior
to September 30th preceding the tax year for which the exemption is claimed,
certified to the director the date upon which it took possession.
(d) Any portion of real property within the area upon which construction of buildings
is restricted or prohibited and which is actually rendered useless and of no
value to the owners thereof by virtue of any ordinance establishing setback lines
thereon; provided, that in order to secure the exemption the person claiming it
shall annually file between September 15th and September 30th preceding the applicable tax
year a sworn written statement with the director describing the real property in
detail and setting forth the facts upon which exemption is claimed, together with
a written agreement that in consideration of the exemption from taxes the owner
will not make use of the land in any way whatsoever during the
ensuing year. Any person who has secured such exemption who violates the terms
of the agreement shall be fined twice the amount of the tax which
would be assessed upon the land but for such exemption.
(e) Real property exempted by any laws of the United States which exemption is
not subject to repeal by the council.
(f) Any other real property exempt by law.
(Sec. 8-10.17, R.O. 1978 (1983 Ed.); Am. Ord. 95-67, 96-15)
Sec. 8-10.18 Lessees of exempt real property.
(a) When any real property which for any reason is exempt from taxation is
leased to and used or occupied by a private person in connection with
any business conducted for profit, such use or occupancy shall be assessed and
taxed in the same amount and to the same extent as though the
lessee were the owner of the property and as provided in subsection (b)
of this section, provided, that:
(1) The foregoing shall not apply to the following:
(A) Federal property for which payments are made in lieu of taxes in amounts
equivalent to taxes which might otherwise be lawfully assessed.
(B) Any property or portion thereof taxed under any other provision of this chapter
to the extent and for the period so taxed.
(C) Federal property for which payment of certain contributions are made under Section 6-58.3,
and which is leased to a private person, who under such lease is
contractually obligated to develop, rehabilitate, maintain and operate a military housing project under
the authority of the National Defense Authorization Act for Fiscal Year 1996, P.L.
104-106, Title XXVIII, Subtitle A – Military Housing Privatization Initiative (codified at 10 U.S.C.
Sections 2871-2885), as amended, including all improvements thereon, provided such federal property does
not use the county’s refuse and road maintenance services, and routine police, fire
and ambulance services, where “routine police, fire and ambulance services” do not include
services provided by the county on such federal property (i) pursuant to agreements
between the federal government and the county or the State of Hawaii, including
without limitation, mutual aid agreements, or (ii) in accordance with policies or procedures
developed by the county to coordinate the provision of such services as between
the federal government and the county.
(2) The term "lease" means any lease for a term of one year or
more, or which is renewable for such period as to constitute a total
term of one year or more. A lease having a stated term shall,
if it otherwise comes within the meaning of the term "lease," be deemed
a lease notwithstanding any right of revocation, cancellation or termination reserved therein or
provided for thereby.
(3) The assessment of the use or occupancy shall be made in accordance with
the highest and best use permitted under the terms and conditions of the
lease.
(b) The tax shall be assessed to and collected from such lessee as nearly
as possible in the same manner and time as the tax assessed to
owners of real property, except that the tax shall not become a lien
against the property. In case the use or occupancy is in effect on
October 1st preceding the tax year, the lessee shall be assessed for the
entire year but adjustments of the tax so assessed shall be made in
the event of the termination of the use or occupancy during the year
so that the lessee is required to pay only so much of the
tax as is proportionate to the portion of the tax year during which
the use or occupancy is in effect, and the director is authorized to
remit the tax due for the balance of the tax year. In case
the use or occupancy commences after October 1st preceding the tax year, the
lessee shall be assessed for only so much of the tax as is
proportionate to the period that the use or occupancy bears to the tax
year.
(c) The assessment of the use or occupancy of real property made under this
section shall not be included in the aggregate value of taxable realty for
the purposes of Section 8-11.1 but the council, at the time that it
is furnished with information as to the value of taxable real property, shall
also be furnished with information as to the assessments made under this section,
similarly determined but separately stated.
(d) If a use or occupancy is in effect on October 1st preceding the
tax year, the assessment shall be made and listed for that year and
the notice of assessment shall be given to the taxpayer in the manner
and at the time prescribed as provided for by this chapter, and when
so given, the taxpayer, if said taxpayer deems oneself aggrieved, may appeal as
provided for by this chapter, if a use or occupancy commences after October
1st preceding the tax year or if for any reason an assessment is
omitted for any tax year, the assessment shall be made and listed and
notice thereof shall be given, and an appeal may be taken therefrom in
the manner and at the time prescribed in Section 8-3.4.
(Sec. 8-10.18, R.O. 1978 (1987 Supp. to 1983 Ed.); Am. Ord. 96-15, 04-38)
Sec. 8-10.19 Property of the United States leased under the National Housing Act.
Real property belonging to the United States leased pursuant to Title VIII of
the National Housing Act, as amended or supplemented from time to time:
(a) Shall not be taxed under this chapter upon the lessee's interest or any
other interest therein, except as provided in subsection (b) of this section.
(b) Shall be taxed under this chapter to the extent of and measured by
the value of the lessee's interest in any portion of the real property
(including land and appurtenances thereof and the buildings and other improvements erected on
or affixed on the same) used for, or in connection with, or consisting
in, shops, restaurants, cleaning establishments, taxi stands, insurance offices, or other business or
commercial facilities. The tax shall be assessed to and collected from the lessee.
The assessment of such property shall not impair, and shall be so made
as to not impair, any right, title, lien or interest of the United
States.
(Sec. 8-10.19, R.O. 1978 (1983 Ed.))
Sec. 8-10.20 Exemption--Low-income rental housing.
(a) For the purposes of this section:
“Dwelling unit” means a room or rooms connected together, constituting an independent living
unit and containing a single kitchen and at least one bathroom. A dwelling
unit shall not include a unit used for time sharing or as a
transient vacation unit.
"Housing project" means a rental housing project where at least 20 percent of
the dwelling units are
reserved for low-income residents. The housing project must be situated on (i) a
single parcel of land, (ii)
multiple parcels of land that are contiguous, or (iii) noncontiguous multiple parcels of
land which are
separated from each other only by a road or roads. If the housing
project is comprised of multiple parcels
of land, or is comprised of individual dwelling units, each situated upon a
subdivided parcel of land, the
regulatory agreement must specifically identify each such parcel of land or dwelling units
as comprising the
housing project.
“Kitchen” means a facility in a dwelling unit that exists when there are
fixtures, appliances or devices for all
of the following: (1) heating or cooking of food, (2) washing of utensils
used for dining and food
preparation and/or for washing and preparing food, and (3) refrigeration of food.
“Low-income” means the annual income of a household that does not exceed 80
percent of the area median
income for the county as determined by the United States Department of Housing
and Urban Development.
"Nonprofit or limited distribution mortgagor" means a mortgagor who qualifies for and obtains
mortgage
insurance under Sections 202, 221(d)(3) or 236 of the National Housing Act as
a nonprofit or limited
distribution mortgagor.
“Owner” shall include a lessee of the property whose lease term extends at
least as long as the regulated
period.
“Regulatory agreement” means an agreement between an owner and the federal government, state
government or a political subdivision of the state government, or agency of the
federal government, agency
of the state government or agency of the political subdivision of the state
government, embodying
provisions regulating rents, charges, profits, dividends, development costs, and methods of operation, in
accordance with the laws, policies, or rules of the federal government, state government
or of the political
subdivision of the state government, or agency of the federal government, agency of
the state government or
agency of the political subdivision of the state government.
“Regulated period” means the period during which a housing project is subject to
a regulatory agreement,
which shall not be less than 15 years.
(b) Real property which is owned and operated by (i) a nonprofit, limited distribution
mortgagor, or (ii) a person, corporation, trust, partnership or association which is used
for a housing project that is subject to a regulatory agreement shall be
exempt from property taxes for the duration of the regulated period. This exemption
shall be incorporated into any and all agreements, including regulatory and loan agreements
as applicable.
(1) If the qualifying housing project is comprised of multiple parcels of land, each
parcel comprising
the housing project shall be exempt from property taxes.
(2) If the housing project fails to meet the requirements under this section at
any time during the
regulated period, the exemption shall be cancelled and the housing project shall be
subject to taxes
and penalties as determined in Section 8-10.21(c).
(3) If any portion of the housing project that qualifies for an exemption under
this section is
transferred during the regulated period, the exemption shall be cancelled and the entire
housing
project, including the portion retained, if any, and the portion transferred, shall be
subject to the
taxes and penalties pursuant to Section 8-10.21(c)(3). The taxes and penalties shall not
apply to
any portion of the housing project for which a new claim is filed
for an exemption for low-income rental housing as described in this section within
30 days of the recordation or filing of the sale or transfer with
the registrar of the bureau of conveyances or the assistant registrar of the
land court, whichever is applicable, and the exemption is granted by the director.
(4) If the entire housing project is sold or otherwise transferred during the regulated
period, a new claim for exemption must be filed within 30 days of
the recordation of filing of such sale or transfer with the registrar of
the bureau of conveyances or the assistant registrar of the land court, whichever
is applicable. Failure to file a new claim for exemption or meet the
qualifications under this section shall result in cancellation of the exemption and taxes
and penalties imposed pursuant to Section 8-10.21(c).
(c) The exemption provided in this section shall not apply to any portion of
the property that is used for commercial or other purposes, and not for
the primary use of the tenants of the housing project.
(d) Where a housing project is situated upon a single parcel of land, if
any portion of the property is ineligible for the property tax exemption under
this section:
(1) The remaining eligible portion shall not be deprived of the exemption;
(2) The ineligibility of a portion of the property for exemption under this section
shall not disqualify that portion from exemption under any other law; and
(3) The tax shall be assessed upon so much of the value of the
building and land thereunder as the proportion of the nonexempt floor area bears
to the total floor area of the building.
(e) Exemptions claimed under this section shall disqualify the same property from receiving an
exemption under HRS Section 53-38.
(Sec. 8-10.20, R.O. 1978 (1983 Ed.); Am. Ord. 90-31, 02-68)
Sec. 8-10.21 Claim for exemption.
(a) Notwithstanding any provision in this chapter to the contrary, any real property determined
by the director to be exempt from property taxes under Section 8-10.20 shall
be exempt from property taxes effective as of the date the application is
filed with the director; provided, that the initial application for exemption shall be
filed with the director within 60 days of the qualification or in the
failure thereof by September 30th preceding the tax year for which the exemption
is claimed. A copy of the regulatory agreement that has been recorded with
the registrar of the bureau of conveyances or filed with the assistant registrar
of the land court, whichever is applicable, shall be filed with the application
along with any additional documents determined by the director to be necessary to
supplement the application. As used herein, the date of the qualification shall be
the earlier of: (i) the date when the mortgage made by the nonprofit
or limited distribution mortgagor and insured under Section 202, 221(d)(3) or 236 of
the National Housing Act is recorded or (ii) the date the regulatory agreement
is recorded with the registrar of the bureau of conveyances or the assistant
registrar of the land court of the state, whichever is applicable.
For a housing project that qualified for an exemption from real property taxation
under Section 8-10.20 before December 20, 2002, * the first application filed after December
20, 2002 * shall be deemed the initial filing under this subsection.
After the initial year for which the real property has qualified for an
exemption, a claim for an exemption shall be filed annually on or before
September 30th, together with a document from the agency regulating the housing project
certifying that the housing project continues to be in compliance with the initial
regulatory agreements and is in compliance with the applicable low-income rental requirements in
the manner provided by applicable law or rule.
(b) In the event property taxes have been paid to the county in advance
for real property that subsequently qualifies for the exemption, the director shall refund
to the owner that portion of the taxes attributable to and paid for
the period after the qualification.
(c) Cancellation of Exemption—Penalties.
(1) Notice by Director.
Following the initial year for which real property has qualified for an exemption,
if an owner fails to file a claim for continued exemption by the
September 30th deadline, the director shall promptly mail a notice to the owner
at the owner’s address of record stating that unless a claim for continued
exemption and all the necessary documents are received by the director by November
15th of the same year, the exemption shall be cancelled.
(2) Cancellation of Exemption.
An owner who has been sent a notice under paragraph (1) by the
director and who fails to file for an exemption by the November 15th
deadline shall have the exemption cancelled and the housing project shall be subject
to taxes and penalties pursuant to paragraph (3).
In the event the director finds that the initial or subsequent claim for
exemption contains false or fraudulent information, the housing project fails to meet the
requirements of Section 8-10.20 during the regulated period, or the owner fails to
file annually during the regulated period as required under this section, the director
shall cancel the exemption retroactive to the date the exemption was first granted
pursuant to an initial filing under subsection (a), and the housing project shall
be subject to the taxes and penalties determined in paragraph (3).
(3) Back Taxes and Penalties.
In the event a housing project is subject to taxes and penalties as
provided in paragraph (2), the differences in the amount of taxes that were
paid and those that would have been due but for the exemption allowed
shall be payable, together with interest at 10 percent per annum, from the
respective dates that these payments would have been due. The taxes and penalties
due shall be a paramount lien upon the real property.
In addition, in the event a claim for an exemption is submitted after
the September 30th deadline but on or before the November 15th deadline, a
late filing penalty of $500.00 shall be imposed.
(Sec. 8-10.21, R.O. 1978 (1983 Ed.); Am. Ord. 02-68)
[ *Editor’s Note: “December 20, 2002” is substituted for “the effective date of this
ordinance.”
Sec. 8-10.22 Exemption--Historic residential real property dedicated for preservation.
(a) Portions of residential real property which are dedicated and approved by the director
of budget and fiscal services as provided for by this section, shall be
exempt from real property taxation except as provided by Section 8-9.1. The owners
shall assure reasonable visual access to the public.
(b) An owner of taxable real property, that is the site of a historic
residential property that has been placed on the Hawaii Register of Historic Places
after January 1, 1977, desiring to dedicate a portion or portions thereof for
historic preservation, shall petition the director of budget and fiscal services.
(c) The director of budget and fiscal services shall review the petition and determine
what portion or portions of the real property shall be exempted from real
property taxes. The director shall consult with the state historic preservation office in
making this determination. The director may take into consideration whether the current level
of taxation is a material factor which threatens the continued existence of the
historic property, and may determine the total area or areas of real property
that shall be exempted.
(d) The approval of the petition by the director shall constitute a forfeiture on
the part of the owner of any right to change the use of
the owner's exempted property for a minimum period of 10 years, automatically renewable
indefinitely, subject to cancellation by either the owner or the director upon five
years' notice at any time after the end of the fifth year.
(e) Failure of the owner to observe the restrictions of subsection (d) of this
section shall cancel the tax exemption and privilege retroactive to the date of
the dedication, and all differences in the amount of taxes that were paid
and those that would have been due but for the exemption allowed by
this section shall be payable together with interest at 12 percent per annum
from the respective dates that these payments would have been due, provided the
provision in this subsection shall not preclude the county from pursuing any other
remedy to enforce the covenant on the use of the land.
(f) Any person who becomes an owner of real property that is permitted an
exemption under this section shall be subject to the restrictions and duties imposed
under this section.
(g) The director shall prescribe the form of the petition. The petition shall be
filed with the director by September 1st of any calendar year and shall
be approved or disapproved by October 31st of such year. The exemption provided
for by this section shall be effective October 1st of the same calendar
year.
(h) An owner applicant may appeal any determination as in the case of an
appeal from an assessment.
(i) Subject to HRS Chapter 91, the director shall adopt rules and regulations decreed
necessary to accomplish the foregoing.
(j) The owner of a historic residential property that has received an exemption from
real property taxation pursuant to this section shall place and maintain on that
property a sign or plaque that has been approved by the director and
the state historic preservation officer. Subject to HRS Chapter 91, the director shall
adopt rules prescribing the requirements for such a sign or plaque.
(Sec. 8-10.22, R.O. 1978 (1987 Supp. to 1983 Ed.); Am. Ord. 96-15, 01-23)
Sec. 8-10.23 Other exemptions.
Exemptions to real property taxes as set forth in HRS Chapter 53 ("Urban
Renewal Law") and Chapter 183 ("Forest Reserves, Water Development, Zoning"), and in Section
208 of the Hawaiian Homes Commission Act, 1920, and which were enacted prior
to November 7, 1978, shall remain in effect and be recognized and implemented
by the city in its administration of the real property tax system; provided
that real property leased under homestead and not general lease pursuant to the
authority granted the department of Hawaiian home lands by Section 207 of the
Hawaiian Homes Commission Act, 1920, shall be exempt from real property taxes, the
seven-year limitation on the exemption afforded by Section 208 of the Hawaiian Homes
Commission Act, 1920, notwithstanding. (Sec. 8-10.23, R.O. 1978 (1983 Ed.); Am. Ord. 92-38,
92-63, 93-13, 93-112, 97-56, 00-65)
Sec. 8-10.24 Exemption--Credit union.
(a) Real property owned in fee simple or leased for a period of one
year or more by a federal or state credit union which is actually
and exclusively used for credit union purposes shall be exempt from real property
taxes. If the property for which exemption is claimed is leased, the lease
agreement shall be in force and recorded in the bureau of conveyances at
the time the exemption is claimed. As used in this section, "federal credit
union" means a credit union organized under the Federal Credit Union Act of
1934, 12 U.S.C. Chapter 14, as amended, and "state credit union" means a
credit union organized under the Hawaii Credit Union Act, HRS Chapter 410, as
amended.
(b) If any portion of the property which might otherwise be exempted under this
section is used for commercial or other purposes not within the conditions necessary
for exemption (including any use the primary purpose of which is to produce
income even though such income is to be used for or in furtherance
of the exempt purposes) that portion of the premises shall not be exempt
but the remaining portion of the premises shall not be deprived of the
exemption if the remaining portion is used exclusively for purposes within the conditions
necessary for exemption. In the event of an exemption of a portion of
a building, the tax shall be assessed upon so much of the value
of the building (including the land thereunder and the appurtenant premises) as the
proportion of the floor space of the nonexempt portion bears to the total
floor space of the building.
(Added by Ord. 88-01)
Sec. 8-10.25 Exemption--Slaughterhouses.
All real property in the city used exclusively by the owner or lessee
thereof for purposes of slaughtering or butchering cattle, pigs, poultry animals or other
domestic livestock for commercial slaughterhouse purposes shall be exempt from real property taxes
for a period of 10 years. In the case of newly constructed slaughterhouses,
the exemption shall apply to the tax year following the first day of
October following commencement of construction of such slaughterhouse. (Added by Ord. 93-06; Am.
Ord. 96-15)
Sec. 8-10.26 Exemption--Qualifying construction work.
(a) Any incremental increase in the valuation of buildings primarily attributable to qualifying construction
work shall be exempt from property taxes for a period of seven years
following the completion of the qualifying construction work, provided that:
(1) The qualifying construction work commences on or after January 1, 1999 as evidenced
by the issuance date of the building permits;
(2) The qualifying construction work is completed on or before June 30, 2003 unless
extended pursuant to subsection (d); and
(3) The laborers and mechanics who performed the qualifying construction work were paid at
or above the rate of wages established by Hawaii Revised Statutes Chapter 104
and the applicable rules adopted thereunder.
(b) As used in this section:
"Incremental increase in the valuation of buildings primarily attributable to qualifying construction work"
shall be determined by subtracting the valuation of buildings on the property as
determined in the real property tax assessment immediately preceding June 22, 1999 * from
the valuation of buildings following the completion of qualifying construction work as of
June 22, 1999. [*Editor's Note: "June 22, 1999" is substituted for "the effective
date of this ordinance" (Ord. 99-42).]
"Qualifying construction work" means work to construct new buildings, or to construct additions
or renovations to existing buildings, located on land which is classified in accordance
with Section 8-7.1 as hotel and resort, commercial, industrial, preservation, or agricultural.
(c) The date of the completion of the construction shall be established by the
date of the department of planning and permitting’s inspection completion date, or the
last of the inspection completion dates, where multiple inspections are required for the
electrical, plumbing and/or architectural and structural work allowed under the building permit.
(d) The claimant may request an extension of time of up to one year
but no later than June 30, 2004 to complete construction, and only if
a major change in circumstances beyond the control of the claimant has occurred
since the issuance of the building permit which causes the delay. The request
for an extension setting forth the claimant's justification for an extension shall be
made in writing to the director of planning and permitting and either receipt-stamped
by the department or U.S. postmarked. By either method, the request shall be
receipt-stamped or U.S. postmarked no later than June 29, 2003. The decision of
the director of planning and permitting on the request shall be final.
(e) The claim for exemption shall be filed with the department of budget and
fiscal services on or before September 30th preceding the first tax year for
which such exemption is claimed on such form as shall be prescribed by
the department, and shall be supported by documentation establishing the date of the
issuance of the building permit, the department of planning and permitting’s inspection completion
date, and the director of planning and permitting's decision to grant an extension
of time to complete construction, if applicable.
(f) The claim for exemption, once allowed, shall continue for a period of seven
years provided that where an extension has been granted under subsection (d) in
no event shall such exemption be allowed beyond June 30, 2012.
(g) In order to confirm that the laborers and mechanics who performed the qualifying
construction work were paid at or above the applicable rate of wages, every
claim for exemption filed with the department of budget and fiscal services shall
include documentation in a form satisfactory to the director of budget and fiscal
services which establishes that the wage rates for the laborers and mechanics who
performed the qualifying construction work were not less than the wage rates established
by HRS Chapter 104 and the applicable rules adopted thereunder. This documentation shall
include, but not be limited to, a notarized affidavit from the claimant establishing
that the wage rates for the laborers and mechanics who performed the qualifying
construction work were not less than the wage rates established by HRS Chapter
104 and the applicable rules adopted thereunder.
(Added by Ord. 99-42; Am. Ord. 00-45, 02-39)
Sec. 8-10.27 Exemption--Public service.
(a) Real property which is owned, or leased and actually used by a public
service company shall be exempt from real property taxes.
(b) If the property for which exemption is claimed is leased by the public
service company for a period of one year or more, the lease agreement
shall be in force and recorded in the bureau of conveyances at the
time the exemption is claimed.
(c) The exemption provided in this section shall not apply to any portion of
the property that is not used for the primary purpose of the public
service company.
(d) If any portion of the property is ineligible for the property tax exemption
under this section:
(1) The remaining eligible portion shall not be deprived of the exemption;
(2) The ineligibility for exemption under this section shall not disqualify that portion for
an exemption under any other law; and
(3) The tax shall be assessed upon so much of the value of the
building and land thereunder as the proportion of the nonexempt floor area bears
to the total floor area of the building.
(e) "Public service company" shall be as defined under Section 8-7.1(c)(7).
(Added by Ord. 01-60; Am. Ord. 04-34, 04-35)
Sec. 8-10.28 Additional terms and conditions for exemption of low-income rental housing projects on
Hawaiian home lands.
(a) For the purposes of this section:
“Hawaiian home lands” means the lands described in the Hawaiian Homes Commission Act,
Hawaii Revised Statutes, Section 201.
The definitions provided in Section 8-10.20(a) shall also apply to this section.
(b) A low-income rental housing project that occupies Hawaiian home lands and qualifies for
an exemption
from real property taxes pursuant to Section 8-10.20 shall be subject to the
following additional terms and
conditions:
(1) The exemption shall be for the duration of the regulated period, provided that
the lease remains in
force and effect for the duration of said regulated period. This exemption shall
be incorporated
into any and all agreements, including regulatory and loan agreements as applicable.
(2) If the qualifying housing project is comprised of multiple parcels of land, each
parcel comprising
the housing project shall be:
(A) Exempt from property taxes; and
(B) Subject to the assessment of the minimum tax under Section 8-11.1; provided that
for an
exempt rental housing project consisting of no more than one hundred (100) parcels
of land, in the event full payment of the annual minimum tax is
received on or before June 30th prior to the tax year for any
one of the parcels comprising the exempt rental housing project, no minimum tax
shall be due and owing for the tax year for any of the
other parcels comprising the exempt rental housing project; provided further, that no tax
bill shall be issued for the June 30th full minimum tax payment.
(Added by Ord. 02-68)
Sec. 8-10.29 Exemption—Nonprofit organization thrift shops.
(a) Notwithstanding Section 8-10.10(d), real property used for a thrift shop shall be exempt
from property
taxes, provided that:
(1) The thrift shop is operated by a nonprofit organization that sells goods;
(2) Ninety percent or more of the goods sold in the thrift shop have
been donated; and
(3) All of the net revenues from the thrift shop are used to provide
job training and employment
services or drug rehabilitation services at no cost to the person being trained
or rehabilitated.
(b) For the purposes of this section, the term “nonprofit organization” means an association,
corporation or
other entity, organized and operated exclusively for religious, charitable, scientific, literary, cultural,
educational, recreational or other nonprofit purposes, no part of the assets, income or
earnings of which
inures to the benefit of any individual or member thereof, and whose charter
or other enabling act contains a
provision that, in the event of dissolution, the assets owned by such association,
corporation or other entity
shall be distributed to another association, corporation or other entity organized and operated
exclusively
for nonprofit purposes, and which further qualifies for exemption under Section 501 of
the Internal
Revenue Code of 1954, as amended.
(c) “Thrift shop” means a retail outlet.
(Added by Ord. 03-05)
Sec. 8-10.30 Exemption—Historic commercial real property dedicated for preservation.*
(a) An owner of commercial property which has been placed on either the National
or the Hawaii Register of Historic Places after January 1, 1977 who wishes
to dedicate such property for historic preservation may petition the director to obtain
an exemption from real property taxation as provided herein. As used in this
section, “commercial property” means properties classified for real property tax purposes as commercial
and excludes properties classified for real property tax purposes as hotel and resort
or industrial.
(b) The director shall prescribe the form of the petition. The petition shall be
filed with the director by September 1st of any calendar year and shall
be approved or disapproved by December 15th of such year. If approved, the
exemption shall be effective July 1st of the immediately following tax year.
(c) The petition shall include a copy of a covenant that has been recorded
with the bureau of conveyances or the land court, whichever is applicable. The
covenant shall ensure that the public is provided reasonable visual access to the
historic commercial real property and that the property is maintained in accordance with
a maintenance agreement approved by the director, in consultation with the state historic
preservation division, nonprofit historic preservation organizations and the director of planning and permitting.
(d) The director shall review the petition and determine whether the historic commercial landmark
shall be granted the real property tax exemption. The director shall consult with
the state historic preservation office and nonprofit historic preservation organizations in making this
determination.
(e) Upon approval of the petition, 50 percent of the value of that real
property or portion thereof that is designated as a historic site shall be
exempt from real property taxes.
(f) The approval of the petition by the director shall constitute a forfeiture on
the part of the owner of any right to change the use of
the owner’s exempted property as specified in the maintenance agreement for a minimum
period of 10 years. The petition shall be automatically renewable for an unlimited
number of additional 10-year periods.
(g) Upon determining that the owner has failed to observe the restrictions of the
covenant, the director shall cancel the exemption retroactive to the date of the
dedication, and all differences in the amount of taxes that were paid and
those that would have been due but for the exemption allowed by this
section shall be payable together with interest at 12 percent per annum from
the respective dates that these payments would have been due, provided the provision
in this subsection shall not preclude the county from pursuing any other remedy
to enforce the covenant on the use of the land.
(h) An owner applicant may appeal any adverse determination as in the case of
an appeal from an assessment.
(i) The director shall adopt rules pursuant to HRS Chapter 91 as deemed necessary
to accomplish the purposes of this section.
(Added by Ord. 04-17)
[ *Editor’s Note: Ordinance 04-17 shall take effect on July 1, 2005.]
Sec. 8-10.31 Exemption—Qualifying agricultural improvements for dedicated vacant agricultural lands.
(a) As used in this section:
“Drainage systems” means agricultural systems of channels, ditches, pipes, pumps, and accessory facilities
established for the purpose of drawing off water from a land area.
“Incremental increase in the valuation of real property attributable to qualifying agricultural land
improvements” means the sum of all documented expenses incurred to construct the qualifying
agricultural
land improvements.
“Irrigation systems” means the agricultural systems of intakes, diversions, wells, ditches, siphons, pipes,
reservoirs, and accessory facilities established for the purpose of providing water for agricultural
production.
“Qualifying agricultural land improvements” means construction, reconstruction or improvement of irrigation systems, drainage
systems or roads, soil conservation, fire protection or animal control measures on land
classified as vacant agricultural land as defined in 8-7.1(c) and dedicated for 10
years under 8-7.3(d), where the cost of such improvements is equal to or
greater than $10,000.
(b) Any incremental increase in the valuation of real property attributable to qualifying agricultural
land improvements shall be exempt from property taxes for a period of seven
years following the construction of the agricultural land improvements.
(c) The claim for exemption shall be filed with the director on or before
September 30th preceding the tax year for which such exemption is claimed on
such form as shall be prescribed by the department. The claim shall be
supported by documentation describing the agricultural land improvements, establishing that the agricultural land
improvements have been constructed, and establishing the amount of expenses therefor. Any additional
qualifying agricultural improvements for a subsequent fiscal year shall be separately claimed.
(d) The claim for exemption, once allowed, shall continue for a period of seven
years.
(Added by Ord. 04-34)
Sec. 8-10. 32 Exemption—Kuleana land.
(a) Real property zoned as residential or agricultural, any portion of which is designated
as kuleana land, shall pay the minimum real property tax as long as
the real property is owned in whole or in part by a lineal
descendant of the person(s) that received the original title to the kuleana land.
(b) An application for this exemption shall be filed with the director on forms
prescribed by the director. The application shall include documents verifying that the condition
set forth in subsection (a) has been satisfied. The director shall prescribe what
shall be sufficient to show genealogy verification, provided that: (1) genealogy verification by
the Office of Hawaiian Affairs or by court order shall be deemed sufficient;
and (2) the applicant/landowner shall be responsible for the cost of such evidence.
The director shall require the applicant to obtain a court order verifying ownership
of property if the applicant is not identified as the owner of the
property in the records of the director.
(c) For purposes of this section, “kuleana land” means those lands granted to native
tenants pursuant to L. 1850, p. 202, entitled “An Act Confirming Certain Resolutions
of the King and Privy Council, Passed on the 21st Day of December,
A.D. 1849, Granting to the Common People Allodial Titles for Their Own Lands
and House Lots, and Certain Other Privileges,” as amended by L. 1851, p.
98, entitled “An Act to Amend An Act Granting to the Common People
Allodial Titles for Their Own Lands and House Lots, and Certain Other Privileges”
and as further amended by any subsequent legislation.
(d) Notwithstanding the provisions of subsection (a), kuleana lands which are Hawaiian home lands
shall not pay the minimum real property tax if they qualify for the
exemption set forth in Section 8-10.28(b)(2)(B). (Added by Ord. 07-7)
Sec. 8-10. __ Exemption— For-profit group child care centers.
(a) Real property, or a portion thereof, used for a for-profit group child care
center shall be exempt from
property taxes provided that:
(1) The property is actually and exclusively used for a group child care center;
(2) If an exemption is claimed under this section, an exemption for the same
property may not also be
claimed under any other section.
(3) The property is owned in fee simple, leased or rented for a period
of one year or more, by the
person using the property for the exempt purposes, hereinafter referred to as the
person claiming
the exemption.
(4) If the property for which exemption is claimed is leased or rented, the
lease or rental agreement
shall be in force and recorded in the bureau of conveyances or filed
in the office of the assistant
registrar of the land court.
(5) The group child care center meets the child care facilities requirements of HRS
Chapter 346,
Part VIII; and
(6) Any claim for exemption based on the foregoing use shall be accompanied by
a certificate issued
by or under the authority of the department of human services stating that
the foregoing
requirements are met.
(b) For purposes of this section, the term “group child care center” means a
facility other than a residence,
maintained by an individual, organization, or agency for the purpose of providing child
care for preschool
age children ages two years to six years and infants and toddlers ages
six weeks to 36 months.
(Added by Ord. 09-24)
Revised Ordinances
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