2022-05 Department of Finance Real Property Tax Division Revenue Cycle Management

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Civil Remedies Overview As of 2017, government entities own approximately 1.5 million acres on Hawaiʻi Island. At 19.25% by dollars, government debt is the second-largest category owed and averages 7.46 years outstanding. Complicating Criteria Hawaiian Home Lands (DHHL) The legal basis for establishing the Department of Hawaiian Home Lands (DHHL) is the Hawaiian Homes Commission Act, 1920, as amended (HHCA). The HHCA provides for the rehabilitation of the native Hawaiian people through a government-sponsored homesteading program. Native Hawaiians are defined as individuals having at least 50 percent Hawaiian blood. DHHL provides direct benefits to native Hawaiians through 99-year homestead leases at an annual rental of $1. In 1990, the Legislature authorized DHHL to extend leases for an aggregate term not to exceed 199 years. Lessees occupying the property for homestead purposes have an initial seven-year property tax exemption. Kuleana Land Kuleana land is those lands granted to native tenants under, An Act to Amend an Act Granting to the Common People Allodial Titles for Their Own Lands and House Lots, and Certain Other Privileges and as further amended by subsequent legislation. Property in residential, agricultural, or vacant land designated as kuleana land pays the minimum real property tax outlined in subsection 19-90(e). Industrial and Commercial Activity Commercial activity on government-owned parcels makes delinquent tax collections particularly complicated. It is RPT’s practice to credit the oldest delinquencies first. Outstanding balances stay with the property and not the owner. When lessee’s (business) on government parcels do not pay, RPT has no recourse for collection. When one company goes defunct and new businesses take over the lease, the new tenants are held technically responsible for the debt of the prior lessee. Chapter 19 has provisions in sections 8 and 10 that allow RPT to have cases heard by the third circuit for purposes in part to obtain a civil judgment utilizing in-house counsel as its attorney of record but does not exercise the option. Chapter 19, Section 8 of the Hawaiʻi County Code states, “Except as otherwise provided in this chapter, the district court judges for the Third Circuit Court for the State, shall have jurisdiction to …” “hear and determine all civil actions and proceedings for the collection and enforcement of collection and payment of all taxes assessed thereunder, and all actions or judgments obtained in tax actions and proceedings, notwithstanding the amount claimed.” 33 Page