2012-COH-A Technical Assistance Report Evaluating Property Tax Policies and Administrative Practices in Hawaii County

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Report Evaluating Property Tax Policies and Administrative Practices in Hawaii County 1. The Technical Assistance Project 1.1 Background and Introduction As a result of a constitutional amendment enacted through the Constitutional Convention of 1978 and ratified by vote of the people of Hawaii, the State of Hawaii transferred the property tax program to each of the four county governments, effective July 1,1981. 5 This change is incorporated in the Constitution of the State of Hawaii, which contains the statement that the: ...taxing power shall be reserved to the State, except so much thereof as may be delegated by the legislature to the political subdivisions, and except that all functions, powers, and duties relating to the taxation of real property shall be exerercised exclusively by the counties....6 This change and the property tax structure that has developed is significant in several ways, most notably in that the state oversight role fulfilled to some extent by every other state except Delaware does not exist in Hawai`i. 7 Although every state except Montana and Maryland vests much or all of the assessment, appraisal, and tax collection aspects of property tax administration with local governments (primarily municipalities, counties, towns, and townships), underlying statutory guidance as well as varying degrees of oversight are granted by or occur at the state levels In Hawaii there is far greater responsibility for local property tax policies than is typical throughout the U.S. State oversight can include many activities, such as: • A framework of legislation for exemptions and favored treatment of selected property types or uses. • Coordination of education and certification requirements and programs. • Quality assurance through independent ratio studies and performance audits and standards. • Appraisal references, publications, and guidelines or administrative rules. • Assessment administration software or guidance and assistance in the procurement of such software. • Assistance or guidance with regard to assessment related mapping. 5 Ooka, Stanley,CAE. Hawaii's Decentralization of Real Property Tax Functions Assessment Digest May/June, 1982. IAAO 6 Article VIII, Section, 3. The Constitution of the State of Hawaii. 7 Dornfest, Alan S., Steve Van Sant, Rick Anderson, and Ronald Brown. State and Provincial Property Tax Policies and Adminatrative Practices (PTAPP): Compilation and Report. Journal of Property Tax Assessment & Administration Volume 7, Number 4. 2010. p. 15. 8 Ibid.