HomeMy WebLinkAboutREP PRDLC 070 02/24/1976 1972-1976 lii ' 1 .
LEGISLATIVE SUBCOMMITTEE
PLANNING, .RESEARCH, DEVELOPMENT & LEGISLATIVE
COMMITTEE
Report No. 70
Hawaii County Council '
Hilo, Hawaii
The following are the recommendations of the Planning, . Research, Develop-
ment and Legislative Committee which were considered at its meeting of
February 24, 1976 :
RECOMMENDATION
No. 1 : LEGISLATIVE BILLS
Recommend Council support the following bills :
i
a. A bill for an act relating to bonds. issued by the
state; the counties and the Board of Regents of
the University of Hawaii ; and
b. A bill for an act relating to establishment of
assessment criteria and procedures , modification
. of assessment date. for fiscal 1976-1977, pro-
vision_ £or adjustments of tax rates , exemptions
and tax credits, .and dedication of lands for
residential use.
Iu.kc. 4!, 1 j
FRANK DE LUZ , II , CHAIRMAN
IIP .
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i
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J/PH . E R. YAD/, 'VICE CHAIRMAN IK10 HISAOKA, MEMBER
."L"-1------7 . : J6 i� 6 ! ► 1
DANTE K. CA','ENTER, Mh BER MERL K. LAI , MEM: ''
Report No.wspasomasasac.su70m.amaa.....
ADOPTED: March 3 , .1976 File No. _...�. 4
M.•B. No /..2.a
Date: .-.... i f���..
SHORT FORM B . NO.
A BILL FOR AN ACT
RELATING TO BONDS ISSUED BY THE STATE , THE COUNTIES AND THE
BOARD OF REGENTS OF THE UNIVERSITY Ci" HAWAII
i
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HALUAII :
SECTION 1 . purtnose . The purposa of this Act is to
allow a different basis for detcrWilni.ny best bid for bonds
and to allow purchase of bond insurance.
SECTION 2 . Moans , The Hawaii Revised Statutes is
amended to conform with this Act .
SECTION 3 . Effective This Act shall take effect
upon its approval .
INTRODUCED BY:
D --225
('I'o be made one and twclV(' )ies) "
• I'V1E SENA`T'E "
.......E.1G IT ...... 1,EGISLA"PURL, j 9 7A. f
STATE OF I-IAt'VAII . .
RELATING `l'G "TP_BLISI*tPLENT Or A—QSh'SS1%I:?NT CRI`]:1MIA AND PnOCEIDURL"S ,
MODIFIC7N�TI04 OF ASt'.ESSI-ENT D,,1I'E FOP, FISCAL 1976-1977 ,
PROVISIW? FOR ADSUST -1L''1;TS OF TTX RATES, E<iL•I PTIONS A''D TliX
CREDITS , AND DL;DICFTION OF LANDS FOR RESIDEi.`.`!.' It1L USE.
BE IT ENACTED BY THE LEGISLA I URE, OF T H E STAT. OF HAWAII:
1 • SECTION1 . Purpose. The purpose of this Act is to establish
2 certain guidelines which will serve to better evaluate the performance
3 ox _the assessor, and sira.ultaneously provide the taxpaying public
W1 CA1 file rationale aiAC� method by which the aSSt SSii entS were e eter,i iiicu.
5 This Act, moreover, will provide a relief to the assessor as well
6 as to the taxpayers by eliminating the need for a reassessment as
7 of July 1, 1976 , inas:::uch as Act 157 , SLIT 1975 changed the assess<<icnt
8 date effective January 1 , 1977 . Furthermore, this Act proposes to
9 snake the payment of real property easier for the taxpayer by changing
10 the scrai-annual rayiL ents to quarterly payments. And finally, this
11 Hct will facilitate the budgetinc; processes by modifying the assess-
12 rtzent period to coincide with the State biennual budget (fiscal)
p- _, period,
13 and to clarify the basis upon which the tax rates of the individual
14 counties may be changed.
15 SECTION 2 . Section 246-2 , Hawaii Revised Statutes, is amended
16 to read as follows :
17
18
SMA 548-935
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. 1 "Section 246-2 . Tax base and rate. Except as exempted or
'2 otherwise taxed , all real property in each county shall be subject
3 each year to a tax upon its fair market value determined in the
. 4 manner provided by law, at such rate as shall be determined in the
5 manner provided in section 248--2 . However , the director of taxation
6 [may use as the tax base a percentage of fair market value; if he .
7 does so] shall use as the tax base , seventy percent (70s) of fair
8 market value; he shall certify to the board of supervisors or city
9 council the percentage so used at the time he furnishes the board
10 the calculations as to the tax base pursuant to section 248-2 (f) 2_
11 [ , and if he does not do so he shall certify to the board that he
12 has used one hundred percent of fair market value as the tax base . ]
13 Both as to the calculations as to the .tax base and also as to the
14 percentage of fair market value used as the tax base , the director ' s
15 certificate to the board shall be conclusive insofar as the validity
16 of any tax rate is concerned , except for the right to appeal assess-
17 • ments of real property as may be provided by law. [Whether the.
18 director uses as the tax base one hundred per cent of fair market
•
•
19value or some other percentage of fair market value , ] No taxpayer
20 . shall be deemed aggrieved by an assessment, nor shall an assessment
21 by lowered, except as the result of a decision on an appeal as
22 provided by law. "
23 SECTION 3 . Section 246-3 , Hawaii Revised Statutes, is amended
24 •
• 25 •
SMA 361-957
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a
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1 to read as follows : •
• 2 • "Section 246-3 Tax year; time as of which levy and assessment
3 'made. For real property tax purposes ' tax year ' shall mean
. 4 the fisdal year beginning July 1 of each calendar year and
5 ending June 30 of the following calendar. year , Real property .nall
•
6. be assessed [ , ) biennually, and taxes shall 1:); lei_i-c•d thereon ,
7 as of (July 1 of the) January 1. prec-ce=ding each tax year upon the
8 basis of valuations determined in the manner and at the time
9 provided in this chapter. " .
10NOTE : Effective January 1 , 1977 , double underscored •
matter is substituted for (parenthesis matter). .
11
•
12
SECTION 4 . The assessment for .fiscal 1976-1977 shall
13
remain the same as for fiscal -1975-76 .
14
SECTION 5. Section 246-10 , paragraph (d.) (2) , Hawaii - •
15
Revised Statutes , is amended to read as follows :
16
•
•
17 " (2) In' assigning land to one of the general classes ,
18 the director of taxation shall give major consideration
to [the districting established by the land use .
19
20
commission pursuant to chapter 205 , the districting
21 •
established by a county in its general plan. and
22 zoning ordinance , use classifications established in
�3 the general plan of the State, and . such other factors
•
24 • '
25 .
SMA 547-120 .
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which influence highest and best use; provided that]
2
(a) the existing county zoning; (b) the districting
3 established by the land use commission pursuant to
4 0 chapter 205 ; (c) the use classiications_ established
5 and indicated in the County General Plan and the
6 State Policy Plan, and such other factors which
•7
influence highest and best use; and shall document
8 the use reference in the classification system. Lands
9 • as to which the highest and best. use is single-family
•
10 and two-family residential , shall be classified as
• 11 •
' improved residential ' as set forth below. "
12
SECTION 6 . Section 246-12 . 3 , Hawaii Revised Statutes is
13
amended to read :
14 "Sec. 246-12. 3 [Dedicated lands for residential uses . ]
15
Certain lands dedicated for residential use . (a) The term
16
"owner" as used in this section means any person [sixty years
17
of age or older] who is the fee simple owner of real property.,
18 •
or who is the lessee of real property whose lease term extends
•
. 19
at least ten years from the date of petition. •
20
(b) A special land reserve is established to enable the
21 • '
owner, of any parcel of land [not more than 10 , 000 square feet •
22
in area within an urban district] within a hotel , apartment ,
23
resort, commercial , or industrial district, to dedicate his land .
24 .
•
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SMA 547-121 .
, •
•1111)
1 [1.
Pae 5 1 o o
g
. 1 for residential. use and to have his land assessed at its value
2 in residential use ; provided that (1) the land dedicated shall
3 be limited to a parcel used only for• single family dwelling
4residential [uses; ] (2) the the land dedicated .
1_^�e�; li._�i_ , � l�. Oi^�i7i�1. of
5 shall use it as his home [ ; ] , and (3) not more than one parcel.
6 of land shall be dedicate& for. residential [uses] use by any
owner. .
8 (c) If any owner desires to use his land for residential
9 use and to have his land assessed at its value in this use ,
10 he shall so petition the director of taxation and declare in
11 .his petition that if his petition is approved , he will use his
12 land for single family dwelling residential [uses] use only and
13 that his land so dedicated will be used as his home.
14 Upon receipt of any such petition; the director of taxation
15 shall make a finding of fact as to whether the land described
16 in the petition is being used by the owner for single family
17 dwelling residential [uses] use only and as his home. If the
18 finding is favorable to the owner, the director of taxation
19 •
shall approve the petition and declare the land to be dedicated.
20 (d) The approval of the petition by the director of
•
21 taxation to dedicate shall constitute a forfeiture on the part
22 of the owner of any right to change the use of his land for a
23 minimum period of ten years , automatic renewable thereafter for
24 • .
25 •
SMA 547-122 • •
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1 .i] 1 67/1; l'h
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1. additional periods of tep years [each upon reapplication, ]
2 subject to cancellation by either the owner or the director of
3 taxation [upon five years ' notice at any time after the end of.
4 the fifth year] . .
5 (e) Failure of the owner to observe the restrictions on
6 the. use of his land or the sale of the property shall cancel
the special tax assessment privilege retroactive to the date of
8 the [petition] dedication or the latest renewal-ten-year period ,
9 'and all differences in the amount. of taxes that were paid and
10 those that would have been due from assessment in the higher use
11, shall be payable with an [eight] ten per cent per year penalty •
12 from the respective dates that these payments would have been
13 due. Failure to observe the restrictions on the use means
14. failure for a period of over [one calendar year] twelve
15 consecutive months to use the land in the manner requested
16 in the petition or the overt act of changing the use for any .
17 period [ . ] , or the sale of the real property. Nothing in this
18 subsection shall preclude the State from pursuing any other .
19remedy to enforce the covenant on the use of the land.
20 The additional taxes and penalties , due and owing as a •
21 . result of failure to use or any other 1preach of the dedication
22 shall be a paramount lien upon the .property pursuant to section
23246-55 . . . •.
24 . . .
25 .
SMA 547-123
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1 (f) The director of taxation shall pr_escirbe the form of .
1 . 2 the petition. The petition. shall be filed with the director of
3 taxation by March 1 of any calendar year and shall be approved
4 . or disapproved by June 15 . If approved,. the assessment based
5 upon the use requested in the dedication shall be effective
6 on July 1 of the next [calendar] tax year .
7 (g) The owner may appeal any disapproved Petition as in
8 the case of an appeal from an assessment. .
SECTION 7 . Sections 246-12 . 4 and 246-12 .5 , Hawaii Revised
10 Statutes , are repealed. •
• 11
[Sec . 246-12 . 4 Effect of._ sale of dedicated land under
12 certain circumstances . (a) Upon the sale of land dedicated
13 pursuant to section 246-12. 3 and within five years after :
14 (1) Failure of the owner to observe the restrictions on
15 the use of the dedicated land; •
16 (2) Termination of the initial or any succeeding ten year
17 . dedication period; or _
18
(3) Death of the owner who was granted approval to dedicate;
19 there shall be due to. the State from the vendor of the
20 land the amount specified in subsection (b) .
21
(b) The amount due to the State pursuant to subsection (a)
22 shall be fifty per cent of the. difference between the selling
23 price of the land and :
24
25
SMA 547-124
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1 (1) The basis of the land for determining capital gain or
2 - loss for tax purposes; or
3 * (2) The real property tax assessed value as of the date •
the happeningof the event designated in subsection
4 of J
5 (a) (1) , (2) , or (3) ;
6 whichever is higher . ]
7 [Sec . 246-12 . 5 Payment of amount due to the State . _ Payment
8 of any amount due under section 246-12 . 4 shall be made to the
9 .director of taxation within .six months after sale of the land .
10 Any amounts not .paid within such time shall constitute a lien •
11 in favor of the State upon the land sold as of the date of
12 sale. In addition, amounts due and unpaid shall be subject .
13 to interest at the rate of six per cent a year until fully
14 paid. Amounts received or recovered by suit shall he deposited
. 15 into the general fund of the State . ] •
16 .. SECTION S . Section 246-43 of the Hawaii Revised Statutes
17 is amended to read as follows :
18 "Section 246-43 . 1 Pre-notice public information meetings.
19 On or before -rebruay 15 preceding the tax ;year, the director
20 of taxation shall inform the general public through a series
21 of one or more public meetings in each taxation district, of .
22 impending value changes and the reasons for the proposed changes .
23 . These public meetings shall explain the nature of impending
24 ••
. 25 •
SMA 547-125 . . .
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2 /64 .1'C.
• Pagc 9 •
1 value changes based on benchmarks or neighborhood reference
2 . appraisals by categories of. land use rather,_than by individual
3 parcels . The informational meetings should show. in sufficient
4 . detail basic values of similar categories or classes of real
5 property at the neighborhood , community and district level ,
. 6 and in some cases at a regional or island level .." •
7 "Section 246-43 . 2 Notice of assessments; addresses of persons
8 entitled to notice. On or before
9 - SECTION 9 . Section 246--46 , Hawaii Revised Statutes is •
to amended as follows : - . ..
11 "Section 246-46 Appeals . Any taxpayer .who may deem himself.
12 aggrieved by an assessment made by the assessor or. by. the assessor' s
13 refusal to allow any exemption, may appeal from : the assessment . •
14 or from such refusal to a board of review or the tax appeal court,
15 on or before (September 25 of) [April 9] April 15 preceding the
16 tax year , as provided in chapter 232 . Where such an ;appeal is " .. .
17 based upon the• ground that the assessed value. of the real property
18 for tax purposes is excessive , the valuation claimed by the taxpayer
19 in the appeal shall be admissible in evidence, in any subsequent.
20 condemnation action involving the property, as an admission.: that -
31 the -fair market value of the real property as of the date of:.".a•ssessment
22 is no more than the value arrived at when the assessed value from
• 23
which the taxpayer appealed is adjusted to one hundred per cent fair
24 .
25 •
SMA547-126 .
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Page 10
1 market value; provided, that such evidence shall not in any way
2 affect the right of the taxpayer to any severance damages to
3 • which he may be entitled.
4 "The chairman of •the board of supervisors or the board of
5 supervisors of any county or the mayor or the city council of the
6 city and county of Honolulu may appeal any assessment of real
7 property located within the respective county which, in his or
8 its judgment, does not fairly represent the fair market value of
9 •the property' assessed when compared with other property in the
10 same county of similar character and value, and may likewise
11 appeal from the allowance of an exemption of any- property when
12 the exemption is not authorized by - law. The appeal shall be
13 taken to a board of review or the to:- appeal court on or before
14 (September 25
p of) [April 9] April 15 preceding the tax year.
• 15 In any appeal taken by a county, the county shall be a party
•
16 in interest with the same right of appeal from the decision of
17 the board of review and tax appeal court as is allowed a taxpayer*:-
18 under chapter 232 . •
19 "Any taxpayer who has an interest in an appeal taken by the.; :• .
20 county may intervene . " • • • • • •
•
21 •
SECTION 10 . Section 246-48 , Hawaii Revised Statutes is •
22 •
amended to read as follows : •
23
• "Section 246-48 Taxes; due' when; installment payments;
24 •
25 '
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• SMA 547-127 •.
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5
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. ' . IS - '
' ' 1,1] [..1 2911/16 '":1‘ .
• Page 11 •
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1 billings and delinquent dates . J5;1.1 real property taxes shall be due
•
2 and payable on and after July 1 of: ea::11 ta: year and the payment
3 thereof shall be determined in the f`Dllowinq manner :
' - 4 - "All known ,4Irs CI ,,!-.... .. s : d fo.- r< l.1 property taxes shall be
5 billed not later than the billing 0. 1..:ed`,4 gnated in the scheaul-e ••
6 listed herein; subject how ver , to the .i.h iLai.ic'ns heretofore p:;:e— . .
7vided in section 246-47 . Each <4axp; _�e sh6.1 pa-:? the real
• 8 property taxes due from him, ft..:. •th::. yea:t- in which the taxes are .
•
g 7 ,, .,.,,.,...., P�rF be fare the
•
assessed, in [two] four equal : insta_:._: e y� on
•
10 dates designated (for the group to which his parcel is assigned... .
• 11
The director of taxation shall.., in each year, arrange the total_
12
parcels of real property in each t;.ax_itic.ai district into two g.r_o:aps�.
13designated as Groups I and IL. He shall then assign each .
14 parcel to one of these groups in such a manner as to insure that
15 approximately 25 per cent of the estimated real property taxes for the
•
16current year are due on each of the four payment dates designated) in
17 the fallowing schedule : • .
18 •
19
[Billing Date] [1st Payment] 12nd Payment] . .
20• [Group I ] [November 5 ] [November 20] [May 20 ]
[Group II] [November 15] [November 301 [May 30 ]
21 [July 20] [August 20] • [February 20]
22 Billing Date 1st Payment 2nd PayEent 3rd Payment 4th Payment
23 July 20 August 20 November 20 February 20 Max 20 -
24 • . •
25 • SMA 547-144 .
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. tt ') 1] VI
41:;I4/2 ;77/;
• Page 12
1 All such taxes due on the [first] payment dates of such year from
2 each taxpayer (in each respective group) , which remain unpaid
3 after [the] said dates , shall thereupon become delinquent. [ , and
•
4 the balance of such taxes due on the second payment date of such
5 year from each taxpayer (in each respective group) , which remain
6 unpaid after the date , shall thereupon become delinquent, ] "
7 SECTION 11 . Section 248-2 , Hawaii Revised Statutes , is
8 amended by adding a new paragraph : •
9 ''Notwithstanding any provision to the contrary in this
10 section, the average tax rate as determined under paragraph (b)
11 shall not exceed one and one-Quarter percent (1-1/4%) of
12 market value for counties with less than 100 , 000 population;
13 and shall not exceed one and one-eighth percent (1-1/8%) of
14 market value for counties with population of 100 , 000 or more_"
15 SECTION 12 . Section 232-3 , Hawaii Revised Statutes is
16 amended to read as follows :
17 "Section 232-3 Grounds of appeal , real property taxes . In
18 the case of a real property tax appeal , no taxpayer or county
• 19 shall be deemed aggrieved by an assessment, nor shall an assess-
20 ment be lowered or raised or an exemption allowed, unless there is
•
21 . shown : •
22 " (1) Assessment of the property exceeds by more than [twenty
•
,23 percent] fifteen percent (150) or less than fifteen percent
•
24 • .
25
SMA 547-128
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1110 ' ,J 1] 11]. '42',7/ 0-74,'
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Page 13
15%• of the seventy percent [the] ratio of assessment to
2 market value used [by the director of taxation] as the •
•
•
•
3 real property tax base , or
• 4 (2) Lack of uniformity. or inequality , brought about •
5 by illegality of the methods used or error in the
6 application of the methods to the property involved, or •
7 (.3) Denial of an exemption to which the taxpayer is
8 entitled and for which he has qualified, • or
9 (4) Illegality, on any ground arising under the Constitution
•
io or laws of the United States or the laws of the State
11 . (in addition to the ground of illegality of the methods .
12 used, mentioned - in clause (2) .
13 (5) In any appeal case , the taxpayer and/or county shall
14 ' be entitled to obtain from .the director of taxation, a
15 copy of all pertinent factual data, description of
•
16 •
procedure and analysis of factors ' cited in Section 246-.10 ,
17 • which led to the determining of the assessment in question. '
18 SECTION 13 . ' Section 246-2G , Hawaii. Revised Statutes ,
•
19 sub-paragraph (2) of paragraph (a) is amended to read as •
_
•
20 follows : •
21
" (2) Where the value of the property is in' excess of .
22
. $8 , 000 , the. exemption shall be [the amount of $8 , 000 . ]
23 • as follows : .
24
•
25
SI41\ 547-129 •
111
29/‘ - 7,4
s
Page 14 •
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1 • (a) $8 , 000 , irrespective of net taxable income of
2 net taxable income of owner-occupant;
3 (b) Over $2 , 000 , differentially exempt according to.
4 the following table:.
•
5 If taxable income is -- Additional
Exemption
6
Not over $15 , 000 $8 , 000
7
. Over $15 , 000 but not over_ $20 , 000 7 , 000
8
Over $20 , 000 but not over $25 , 000 4 , 000
9 . .
Over $25 ,000 but not over $30 , 000 1, 500
10
Over $30 , 000 • 0
11 •
12 SECTION 14 . A new section under Section 235 titled
13 Real Property Tax Credits shall be added:
14
15 " (a) Each resident taxpayer, who filed an individual
16 income tax return for a taxable year , and who• is not
17 an owner-occupant or is not otherwise eligible to
18 claim a home exemption under Section 246-26 , may
19 claim a tax credit against his individual income tax .
20 • liability for the taxable year for which the individual •
21 income tax return is being filed. •
22 " (b) Tax Credit Schedule . Each taxpayer may claim tax
•
23 credits in the amount indicated for each adjusted gross
24 • income as shown in the schedule below:
• 25 .
SMA 547-130 •
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Ili k ,
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.,
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..b.-R, I\. 2 93'6 - 7Z- .
Page 15 H
1
Non-head of
(lead of Household or
2 Adjusted Gross Income a�, car joint Return Separate Ret
3 Not over $15 , 000 $150 $75
• 4 Over $15 , 000 but not over $20 , 000 125 62
5 Over $20 , 000 but_ not over $25 , 000 75 38
6 Over $25 , 000 but not over $30 , 000 252
12
7 Over $30 , 000 0 0
8 •
SECTION 15. Statutory material tobe repealed is .bracketed.
10 New material is underscored. In printing this Act, the revisor
11of statutes may exclude the brackets , the bracketed material ,
12 and the underscoring.
13 SECTION 16 . This Act shall be effective for taxable years
14 beginning after June 30 , 1976 .
15
16
17 fJ s-, n �� A�
I1WRODUCLD EY _ d.,.a ,. "r
18
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20 dv,..t.4,/ c=csitj�= ,��,,
,!"°i (1
21 ? (fp/
22 • • IAA ja,t,t, '
12((1),..,(A 4,./jo
• 23 .
24 .
25
SMA 547-131
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`t 0 lo^
•