Revised Ordinances of Honolulu(Link to original Word Processing Version)
RELATING TO REAL PROPERTY TAXATION.
BE IT ORDAINED by the People of the City and County of Honolulu:
SECTION 1. The purpose of this ordinance is to: 1) add “homeowner” as
a new general land class and provide language defining such properties, 2) increase
the amount of the penalty for failing to comply with the home exemption
reporting requirements, 3) revise for clarity the definition and requirements for the home
exemption, 4) require that a taxpayer 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, and 5) include those lands dedicated for residential
use under Section 8-7.5 as part of the homeowner class, provided that the
property has been granted a home exemption under Section 8-10.4.
SECTION 2. Section 8-7.1, Revised Ordinances of Honolulu 1990, as amended, is amended
to read as follows:
“ Sec. 8-7.1 Valuation —Con siderations in fixing.
(b) So far as practicable, records shall be compiled and kept which shall show
the methods established by or under the authority of the director, for the
determination of values.
(c) (1) Land shall be classified, upon consideration of its highest and best use, into
the following general classes[:], unless it qualifies for a different class as defined
in this section:
(C) Commercial;
(D) Industrial;
(E) Agricultural;
(F) Preservation;
(G) Public service; [and]
(H) Vacant agricultural; and
Notwithstanding the city’s zoning district classification, the director shall assign to the agricultural
class any land classified as tree farm property under HRS Chapter 186.
(3) When real property is subdivided into condominium units, each unit and its appertaining
common interest:
(A) Shall be classified upon consideration of the unit’s actual use into one of
the general classes in the same manner as land; and
(B) Shall be deemed a parcel and assessed separately from other units.
(4) Notwithstanding any provision contained in this subsection, a condominium unit which is used
at any time during the assessment year as a time share unit shall
be classified for the following tax year as “hotel and resort” unless:
(A) The unit is on property zoned as apartment, apartment mixed use, apartment precinct,
or apartment mixed use precinct,
(B) The property on which the unit is located does not include a lobby
with a clerk’s desk or counter with 24-hour clerk service facilities for registration
and keeping of records relating to persons using the property, and
(C) The unit is part of a condominium property regime established pursuant to HRS
Chapter 514A.
If the requirements of (A), (B) and (C) are met, the time share
unit shall be classified as [“residential.”] “non-homeowner.” For purposes of this paragraph, “assessment
year” shall mean the one-year period beginning October 2nd of the previous calendar
year and ending October 1st, inclusive, of the calendar year preceding the tax
year, and “time sharing” shall be as defined in Section 21-10.1.
(5) “Vacant agricultural” means a parcel, or portion thereof, which would otherwise be classified
agricultural by the director upon major consideration of the districting established by the
city in its general plan and zoning ordinance and of such other factors
which influence highest and best use, but which parcel, or portion thereof: (i)
has no residential buildings; and (ii) is not dedicated for agricultural purposes. If
a portion of a parcel is dedicated as vacant agricultural, the remainder of
the parcel that is zoned agricultural must be dedicated for agricultural use.
(6) Notwithstanding any provision contained in this subsection, all lands actually used by a
public service company in its public service business shall be classified public service.
For purposes of this subsection, a public service company is defined as a
public utility, except airlines, motor carriers, common carriers by water, and contract carriers,
where:
(A) “Public utility” means and includes every person who may own, control, operate, or
manage as owner, lessee, trustee, receiver, or otherwise, whether under a franchise, charter,
license, articles of association, or otherwise, any plant or equipment, or any part
thereof, directly or indirectly for public use, for the transportation of passengers or
freight, or the conveyance or transmission of telecommunications messages, or the furnishing of
facilities for the transmission of intelligence by electricity by land or water or
air within the state, or between points within the state, or for the
production, conveyance, transmission, delivery, or furnishing of light, power, heat, cold, water, gas,
or oil, or for the storage or warehousing of goods, or the disposal
of sewage; provided that the term:
(i) Shall include any person insofar as that person owns or operates a private
sewer company or sewer facility;
(ii) Shall include telecommunications carrier or telecommunications common carrier;
(iii) Shall not include any person insofar as that person owns or operates an
aerial transportation enterprise;
(iv) Shall not include persons owning or operating taxicabs, as defined in this subsection;
(v) Shall not include common carriers transporting only freight on the public highways, unless
operating within localities or along routes or between points that the public utilities
commission of the State of Hawaii finds to be inadequately serviced without regulation
under this chapter;
(vi) Shall not include persons engaged in the business of warehousing or storage unless
the public utilities commission of the State of Hawaii finds that regulation thereof
is necessary in the public interest;
(vii) Shall not include:
(aa) The business of any carrier by water to the extent that the carrier
enters into private contracts for towage, salvage, hauling, or carriage between points within
the state and the carriage is not pursuant to either an established schedule
or an undertaking to perform carriage services on behalf of the public generally;
and
(bb) The business of any carrier by water, substantially engaged in interstate or foreign
commerce, transporting passengers on luxury cruises between points within the state or on
luxury round-trip cruises returning to the point of departure;
(viii) Shall not include any person who:
(aa) Controls, operates, or manages plants or facilities for the production, transmission, or furnishing
of power primarily or entirely from nonfossil fuel sources; and
(bb) Provides, sells, or transmits all of that power, except such power as is
used in its own internal operations, directly to a public utility for transmission
to the public;
(ix) Shall not include a telecommunications provider only to the extent determined by the
public utilities commission of the State of Hawaii, pursuant to applicable state law;
(x) Shall not include any person who controls, operates, or manages plants or facilities
developed pursuant to applicable state law for conveying, distributing, and transmitting water for
irrigation and such other purposes that shall be held for public use and
purpose; and
(xi) Shall not include any person who owns, controls, operates, or manages plants or
facilities for the reclamation of wastewater; provided that:
(aa) The services of the facility shall be provided pursuant to a service contract
between the person and a state or county agency and at least 10
percent of the wastewater processed is used directly by the state or county
which has entered into the service contract;
(bb) The primary function of the facility shall be the processing of secondary treated
wastewater that has been produced by a municipal wastewater treatment facility that is
owned by a state or county agency;
(cc) The facility shall not make sales of water to residential customers;
(dd) The facility may distribute and sell recycled or reclaimed water to entities not
covered by a state or county service contract; provided that, in the absence
of regulatory oversight and direct competition, the distribution and sale of recycled or
reclaimed water shall be voluntary and its pricing fair and reasonable. For purposes
of this subparagraph xi, “recycled water” and “reclaimed water” mean treated wastewater that
by design is intended or used for a beneficial purpose; and
(ee) The facility shall not be engaged, either directly or indirectly, in the processing
of food wastes.
(B) “Motor carrier” means a common carrier or contract carrier transporting freight or other
property on the public highways, other than a public utility or taxicab.
(C) “Contract carrier” means a person other than a public utility or taxicab which,
under contracts or agreements, engages in the transportation of persons or property for
compensation, by land, water, or air.
(D) “Carrier” means a person who engages in transportation, and does not include a
person such as a freight forwarder or tour packager who provides transportation by
contracting with others, except to the extent that such person oneself engages in
transportation.
(E) “Taxicab” means and includes:
(i) Any motor vehicle used in the movement of passengers on the public highways
under the following circumstances, namely, the passenger hires the vehicle on call or
at a fixed stand, with or without baggage for transportation, and controls the
vehicle to the passenger’s destination; and
(ii) Any motor vehicle having seating accommodations for eight or less passengers used in
the movement of passengers on the public highways between a terminal, i.e., a
fixed stand, in the city of Honolulu, and a terminal in a geographical
district outside the limits of the city of Honolulu, and vice versa, without
picking up passengers other than at the terminals or fixed stands; provided that
passengers may be unloaded at any point between terminals; and provided further that
this definition relating to motor vehicles operating between terminals shall pertain only to
those motor vehicles whose operators or owners were duly licensed under any applicable
provision of law or ordinance and doing business between such terminals on January
1, 1957.
(F) “Telecommunications carrier” or “telecommunications common carrier” means any person that owns, operates, manages,
or controls any facility used to furnish telecommunications services for profit to the
public, or to classes of users as to be effectively available to the
public, engaged in the provision of services, such as voice, data, image, graphics,
and video services, that make use of all or part of their transmission
facilities, switches, broadcast equipment, signalling, or control devices.
(G) “Telecommunications service” or “telecommunications” means the offering of transmission between or among points
specified by a user, of information of the user’s choosing, including voice, data,
image, graphics, and video without change in the form or content of the
information, as sent and received, by means of electromagnetic transmission, or other similarly
capable means of transmission, with or without benefit of any closed transmission medium,
and does not include cable service as defined under applicable state law.
(d) Whenever land has been divided into lots or parcels as provided by law,
each such lot or parcel shall be separately assessed.
(e) When a parcel of land which has been classified as agricultural is improved
with a single-family dwelling and has [qualified for] been granted a home exemption
for the tax year, that portion of the parcel which is used for
residential purposes shall be classified as [residential.] homeowner. This classification shall:
(1) Apply only to that portion used for residential purposes;
(2) Not exceed 5,000 square feet of land and the buildings and improvements on
that land; and
(3) Remain in effect only so long as the property qualifies for a home
exemption.
(f) When a parcel of land which has been classified as preservation is improved
with a single-family dwelling and has [qualified for] been granted a home exemption
for the tax year, that portion of the parcel which is used for
residential purposes shall be classified as [residential.] homeowner. This classification shall:
(1) Apply only to that portion used for residential purposes;
(2) Not exceed 5,000 square feet of land and the buildings and improvements on
that land; and
(3) Remain in effect only so long as the property qualifies for a home
exemption.
(g) (1) In determining the value of buildings, consideration shall be given to any additions,
alterations, remodeling, modifications or other new construction, improvement or repair work undertaken upon
or made to existing buildings as the same may result in a higher
assessable valuation of said buildings; provided, however, that any increase in value resulting
from any additions, alterations, modifications or other new construction, improvement or repair work
to buildings undertaken or made by the owner-occupant thereof pursuant to the requirements
of any urban redevelopment, rehabilitation or conservation project under the provisions of Part
II of HRS Chapter 53, shall not increase the assessable valuation of any
building for a period of seven years from the date of certification as
hereinafter provided.
(2) It is further provided that the owner-occupant shall file with the director, in
the manner and place which the director may designate, a statement of the
details of the improvements certified in the following manner:
(A) In the case of additions, alterations, modifications or other new construction, improvement or
repair work to a building that are undertaken pursuant to any urban redevelopment,
rehabilitation or conservation project as hereinabove mentioned, the statement shall be certified by
the mayor or any governmental official designated by the mayor and approved by
the council, that the additions, alterations, modifications, or other new construction, improvement or
repair work to the buildings were made and satisfactorily comply with the particular
urban development, rehabilitation or conservation act provision; or
(B) In the case of maintenance or repairs to a residential building undertaken pursuant
to any health, safety, sanitation or other governmental code provision, the statement shall
be certified by the mayor or any governmental official designated by the mayor
and approved by the council, that (i) the building was inspected by them
and found to be substandard when the owner-occupant made the claim, and (ii)
the maintenance or repairs to the buildings were made and satisfactorily comply with
the particular code provision.
(h) Notwithstanding the provisions of subsection (c)(2), properties operating as transient vacation units in
accordance with Section 21-4.110-1, and which have a valid nonconforming use certificate, shall
be classified based on their underlying zoning.
(i) “Non-homeowner” means a parcel or portion thereof which:
SECTION 3. Section 8-7.5, Revised Ordinances of Honolulu 1990 (“Certain lands dedicated for
residential use”), as amended, is amended by amending subsections (b) and (c) to
read as follows:
“(b) A special land reserve is established to enable the owner of any parcel
of land within a hotel, apartment, resort, commercial or industrial district to dedicate
such person’s land for residential use and to have such person’s land assessed
at its value in residential use[;] and classified as homeowner; provided, that (1)
the land dedicated shall be limited to a parcel used only for single
family dwelling residential use; (2) the owner of the land dedicated shall use
it as the owner’s home; [and] (3) the land dedicated has been granted
a home exemption under Section 8-10.4 of this chapter; and (4) not more
than one parcel of land shall be dedicated for residential use by any
owner.
(c) (1) If any owner desires to use such person’s land for residential use and
to have such person’s land assessed at its value in this use[,] and
classified as homeowner, the owner shall so petition the director of finance and
declare in such person’s petition that if such person’s petition is approved, the
owner will use such person’s land for single family dwelling residential use only
and that such person’s land so dedicated will be used as such person’s
home.
(2) Upon receipt of any such petition, the director of finance shall make a
finding of fact as to whether the land described in the petition is
being used by the owner for single-family dwelling residential use only and as
the owner’s home. If the finding is favorable to the owner, the director
of finance shall approve the petition and declare the land to be dedicated.”
SECTION 4. Section 8-10.1, Revised Ordinances of Honolulu 1990 (“Claims for certain exemptions”),
as amended, is amended by amending subsection (d) to read as follows:
“(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 [the lesser of:
(A) $200.00] $500 for each year that the change in facts remains unreported[;
or (B) the amount of the taxes due for the property computed without
the claim for exemption as of October 1st immediately preceding the tax year in
which the report was due]. 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.”
SECTION 5. Section 8-10.4, Revised Ordinances of Honolulu 1990, as amended, is amended
to read as follows:
“ Sec. 8-10.4 Homes.
(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;
For the purposes of this section, “real property owned and occupied [only] as
the owner’s principal home” means occupancy of a home in the city [with
the intent to reside in the city. Intent to reside 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 [of intent to reside in the city] 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 [and] 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
(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 drivers license, a Hawaii State identification card, or a passport.”
“(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 exemption to
be apportioned between each of their respective homes in proportion to the value
thereof;] one-half of one exemption;
(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 exemption to be apportioned between
each of their respective homes in proportion to the value thereof;] one-half of
one exemption;
(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
SECTION 8. This ordinance shall take effect upon approval and shall apply to
the tax years beginning July 1, 2010 and thereafter.
INTRODUCED BY:
Todd Apo
APPROVED AS TO FORM AND LEGALITY:
APPROVED this day of , 20___.
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