(a) For the purposes of this section, the following definitions apply unless the context clearly indicates or requires a different meaning.
Dwelling Unit. 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. 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:
(1) A single parcel of land;
(2) Multiple parcels of land that are contiguous; or
(3) 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. 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 or for washing and preparing food, or both; and
(3) Refrigeration of food.
Low-Income. 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. A mortgagor who qualifies for and obtains mortgage insurance under § 202, 221(d)(3), or 236 of the National Housing Act, 12 USC Chapter 13, as amended, 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. 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. The period during which a housing project is subject to a regulatory agreement, which shall not be less than 15 years.
(b) Real property that is owned and operated by: a nonprofit, limited distribution mortgagor; or 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 canceled and the housing project shall be subject to taxes and penalties as determined in § 8-10.18(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 canceled 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 § 8-10.18(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 applies 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 applies. 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 § 8-10.18(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 § 53-38.
(Sec. 8-10.20, R.O. 1978 (1983 Ed.)) (1990 Code, Ch. 8, Art. 10, § 8-10.20) (Am. Ords. 90-31, 02-68)