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REPORT OF THE <br />COMMITTEE ON FINANCE <br />DATE: January 22, 2013 Re: Comm. No. 71/Bill No. 23 <br />PLACE: Council Chambers <br />Kona, Hawaii <br />TIME: 9:01 a.m. <br />Council Chair and Members <br />Hawaii County Council <br />Hilo, Hawaii 96720 <br />Your Committee on Finance, to which was referred Bill No. 23, reports as follows: <br />Bill No. 23, transmitted by Council Member Brenda Ford, via Communication No. 23 dated <br />January 3, 2013, amends Chapter 19, Article 3, Section 19-32 of the Hawaii County Code 1983 <br />(2005 edition, as amended), relating to reduction of the real property tax penalty and monthly interest for <br />delinquent taxes. <br />Bill No. 23 reduces the penalty for delinquent taxes from 10 to 5 percent for each year of such new <br />delinquent taxes, and reduces the interest on delinquent taxes and penalties from one to one-half of one <br />percent. <br />Finance Director Nancy Crawford and Real Property Tax Administrator Stan Sitko came forward to <br />address the members of the Committee. <br />Mr. Sitko explained the method of the penalty and interest process on delinquent taxes leading to <br />foreclosure. On the first late payment, a one-time ten percent late fee is applied; thereafter, an additional <br />one percent penalty is applied monthly to the bill, based on the amount of the tax due. At the third year <br />of delinquency, the foreclosure procedure begins. Ms. Crawford included that an interim billing <br />payment plan is available to help prevent foreclosure. She informed the Committee of the foreclosure <br />process and noted that unlike the banks, the County does not take a loss when a foreclosure is sold. <br />It was stated by Ms. Ford that the Finance Department was not in support of Bill 23. There was great <br />concern regarding the revenue that would be cut from the budget. Several Council Members expressed <br />their opposition to Bill 23, as well. A firm estimated amount could not be confirmed by the Finance <br />Department due to several variables. <br />However, it was recognized by the Committee that the intent of Bill 23 is to give relief to those <br />delinquent. <br />Mr. Kern provided that if Bill No. 23 pertained specifically to homeowner exemptions, he would be in <br />support. <br />FC Report No. 26 <br />