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(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); 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; and
(C) Federal property for which payment of certain contributions are made under § 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 USC §§ 2871 through 2885), as amended, including all improvements thereon; provided that 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, 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; and
(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. If the use or occupancy is in effect on October 1 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. If the use or occupancy commences after October 1 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 § 8-11.1 but the council, when 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 1 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 when prescribed as provided for by this chapter, and when so given, the taxpayer, if the taxpayer deems oneself aggrieved, may appeal as provided for by this chapter, if a use or occupancy commences after October 1 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 when prescribed in § 8-3.4.
(Sec. 8-10.18, R.O. 1978 (1987 Supp. to 1983 Ed.)) (1990 Code, Ch. 8, Art. 10, § 8-10.18) (Am. Ords. 96-15, 04-38)
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); and
(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.)) (1990 Code, Ch. 8, Art. 10, § 8-10.19)
(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)
(a) Notwithstanding any provision in this chapter to the contrary, any real property determined by the director to be exempt from property taxes under § 8-10.17 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 30 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 applies, 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:
(1) The date when the mortgage made by the nonprofit or limited distribution mortgagor and insured under § 202, 221(d)(3), or 236 of the National Housing Act, 12 USC Chapter 13, as amended, is recorded; or
(2) 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 applies.
For a housing project that qualified for an exemption from real property taxation under § 8-10.17 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 30, 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) Continued exemption. A claim for a continued exemption may be filed after September 30 but on or before November 15. Such a late filed claim is subject to a nonwaivable late filing penalty of $500, which must be paid at the time of such filing.
(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 30 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, all the necessary documents, and the late filing penalty of $500 are received by the director by November 15 of the same year, the exemption shall be canceled.
(2) Cancellation of continued exemption.
An owner who has been sent a notice under subdivision (1) by the director and who fails to file for a continued exemption by the November 15 deadline or fails to submit the late filing penalty of $500, shall have the exemption canceled and the housing project shall be subject to taxes and penalties pursuant to subdivision (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 § 8-10.17 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 subdivision (3).
(3) Back taxes and penalties.
In the event a housing project is subject to taxes and penalties as provided in subdivision (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 a year, 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.
(Sec. 8-10.21, R.O. 1978 (1983 Ed.)) (1990 Code, Ch. 8, Art. 10, § 8-10.21) (Am. Ords. 02-68, 16-37)
Editor’s note:
* “December 20, 2002” is substituted for “the effective date of this ordinance.”
(a) For the purposes of this section, the following definitions apply unless the context clearly indicates or requires a different meaning.
Alternative Visual Visitations. The alternative visual access provided to the public from a viewing point on the property.
Average Condition of Property. A finding by the director that all major components of a property are still functional and contributing toward an extended life expectancy and effective age and utility are standard for like properties of its class and usage; this finding will allow for some deferred maintenance and normal obsolescence with age, in that a few minor repairs and some refurbishing is needed.
Day. The seven consecutive hours running from 9:00 a.m. to 4:00 p.m.
Historic Property. Property that has been placed on the Hawaii Register of Historic Places.
Public Way. Includes any area open to the general public, such as a road, alley, street, way, right-of-way, lane, trail, bikeway, highway, bridge, sidewalk, park, or beach and any private property usually open to the public, such as a parking lot.
Residential Property. Property improved with a one or two-family detached dwelling or a duplex unit. This definition includes associated structures, such as carriage houses, ohana units, and outbuildings. This definition specifically excludes vacant parcels, districts, areas, or sites, including heiau, burial, and underwater sites.
Visual Access. Visual access at all times with the unaided eye from a distance of not more than 50 feet from the owner’s property line from a public way as defined in this section, of the entire front or rear of the one or two-family detached dwelling or duplex unit that is the subject of the petition for dedication under this section.
(b) An owner of taxable historic residential property may dedicate a portion or portions of the residential property thereof for historic preservation by petitioning the director; provided that the residential property has visual access or the owner allows alternative visual visitations.
(1) If the historic residential property does not provide visual access, the petition shall provide the public with alternative visual visitations to the property from a viewing point on the historic residential property for at least the 12 days a year designated in the rules adopted by the director.
(2) The viewing point on the historic residential property for alternative visual visitations shall:
(A) Be clearly identified on the sketch or site plan included in the petition for dedication;
(B) Be identified by a sign on the historic residential property marking the location of the viewing point; and
(C) Establish the point beyond which the public shall not advance.
(c) The director shall prescribe the form of the petition. The petition shall be filed with the director by September 1 of any calendar year. The notice of assessment shall serve as notification of approval, approval in part, or disapproval of the petition for dedication. The owner may appeal any petition for dedication approved in part or disapproved, on or before the date for appealing an assessment as set forth in § 8-12.1. If the petition is approved or approved in part, the exemption provided for by this section shall be effective October 1 of the same calendar year.
(d) The director shall review the petition and determine what portion or portions of the residential real property shall be exempted from real property taxes. Any building or portion of a building less than 50 years old shall not be exempted from real property taxes. The director shall consult with the State historic preservation office in making this determination. The director shall take into consideration whether the historic property has been maintained, at a minimum, in average condition, and shall determine the total area or areas of real property that shall be exempted. The director shall confirm that the historic residential property has visual access. If the director determines that the historic residential property does not provide visual access, then the director shall confirm that the petition provides the public with acceptable alternative visual visitations.
(e) If the director determines that the historic residential property does not provide visual access to the public or that the petition does not provide the public with acceptable alternative visual visitations, the application for dedication shall be denied.
(f) Portions of residential real property that are dedicated and approved by the director as provided for by this section, shall be exempt from real property taxation except as provided by § 8-9.1.
(g) The approval of the petition by the director shall constitute an obligation on the part of the owner to meet the following requirements:
(1) The owner shall provide visual access to the public of the dedicated historic residential property, or shall provide alternative visual visitations as described in the approved petition;
(2) The owner shall certify that the historic property shall meet or exceed average condition, and, during the dedicated period, shall maintain the historic property in at least average condition. All repair, maintenance, and improvements to the property, and use of the property, shall comply with all statutes, ordinances, rules, and standards for historic properties; and
(3) The owner of a historic residential property that has been approved for dedication pursuant to this section shall place and maintain on the dedicated historic residential property a plaque that has been approved by the director and the State historic preservation officer. The director shall adopt rules prescribing the requirements for such a plaque;
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. Legally permitted uses of the historic residential property may continue during the dedication period without cancellation of the dedication.
(h) An owner may appeal any cancellation of the dedication or imposition of any rollback tax or penalty as in the same manner as an appeal from an assessment.
(i) Any person who becomes an owner of historic residential property that is subject to a dedication under this section shall be subject to the requirements imposed under subsection (g).
(j) The director shall cancel the dedication and disallow the tax exemption if:
(1) The owner fails to observe the requirements and obligations of this section and the rules adopted to implement this section;
(2) A city department issues a citation for noncompliance with or violation of Chapters 16 through 21; or
(3) The property is removed from the historic register.
The cancellation and disallowance shall subject the owner to a rollback tax and penalty, retroactive to the date of the last 10-year renewal of the dedication. 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 a 12 percent penalty and interest at 12 percent per year for each year of the rollback tax; provided that the provision in this subsection shall not preclude the city from pursuing any other remedy to enforce the covenant on the use of the property.
(k) The director shall cancel the dedication and the retroactive assessment shall not apply:
(1) Where the owner submits the written notice of cancellation within the prescribed time as provided in subsection (g); and
(2) Where the subject property is destroyed by any natural disaster or by fire, and upon verification by the historic preservation officer that the restoration or reconstruction of the property is not feasible.
(l) The director shall adopt rules deemed necessary to accomplish the foregoing in accordance with HRS Chapter 91.
(Sec. 8-10.22, R.O. 1978 (1987 Supp. to 1983 Ed.)) (1990 Code, Ch. 8, Art. 10, § 8-10.22) (Am. Ords. 96-15, 01-23, 11-7)
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 § 208 of the Hawaiian Homes Commission Act, 1920, and which were enacted before 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 § 207 of the Hawaiian Homes Commission Act, 1920, shall be exempt from real property taxes, the seven-year limitation on the exemption afforded by § 208 of the Hawaiian Homes Commission Act, 1920, notwithstanding.
(Sec. 8-10.23, R.O. 1978 (1983 Ed.)) (1990 Code, Ch. 8, Art. 10, § 8-10.23) (Am. Ords. 92-38, 92-63, 93-13, 93-112, 97-56, 00-65)
(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 to the extent taxes assessed exceed $1,000. If the property for which exemption is claimed is leased, the lease agreement shall be in force and recorded in the bureau of conveyances when the exemption is claimed. As used in this section, “federal credit union” means a credit union organized under any federal law including the Federal Credit Union Act of 1934, 12 USC Chapter 14, as amended, and “State credit union” means a credit union organized under State law.
(b) If any portion of the property that 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.
(1990 Code, Ch. 8, Art. 10, § 8-10.24) (Added by Ord. 88-1; Am. Ord. 15-36)
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