(a)
The Director shall cause the fee simple fair market value of all taxable real property to be determined and annually assessed by the market data and cost approaches to value using appropriate systematic methods suitable for mass valuation of properties for taxation purposes, so selected and applied to obtain, as far as possible, uniform and equalized assessments throughout the County; provided that land dedicated pursuant to Sec. 5A-9.1, 5A-9.2 or 5A-9.4 shall be assessed according to those respective sections; and provided further that public utilities shall be subject to taxation pursuant to Sec. 5A-8.3.
(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)
Except
as otherwise provided in this Chapter, the Director shall assess the
value of real property according to its highest and best use, giving
major consideration to the districting established by the land use
commission pursuant to Chapter 205, H.R.S., the districting established
by Kaua'i County in its general plan and zoning ordinance, use classifications
established in the general plan of the State, and such other factors
which influence highest and best use.
(d)
Whenever
land has been divided into lots or parcels as provided by law, each
such lot or parcel shall be separately assessed.
(e)
A building
shall be assessed only if such building is 20% or more complete as
of the October 1st assessment date. Any building less than 20% complete
as of the October 1st assessment date shall not thereafter be assessed
for that tax year under any provisions of this Chapter. To determine
whether a building is 20% or more complete, the Assessor shall conduct
a site inspection, or obtain written documentation from the contractor,
or both. The Director shall adopt rules pursuant to Chapter 91, Hawai'i
Revised Statutes, to establish the method for determining whether
a building is 20% or more complete and for determining the value of
a building under construction which is 20% or more complete.
(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 the buildings, provided, however, that, any increases
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, Chapter 53, H.R.S., shall not increase
the assessable valuation of any building for a period of seven assessment
years.
(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 by the Mayor
or any governmental official designated by him or her 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 redevelopment,
rehabilitation or conservation act provision.
(f)
Real
Property Subject to a Time Share Plan.
(1)
The assessed value of time share units shall be pursuant to Section 5A-8.1, provided that for the 2015 tax year the assessed value of a time share unit shall be capped at 50% of the difference between the assessed value of the time share unit for the 2014 tax year and the fair market value of the time share unit for the 2015 tax year. Commencing with the assessments for the 2016 tax year, time share units shall be assessed at 100% of their fair market value. Assessments under this Section shall be issued to the time share plan manager.
(2)
Where appropriate and as required by the context in which they appear,
words and phrases used in this Subsection including, but not limited
to, "developer," "plan manager," "time share interest," "time share
plan," and "time share unit" shall have the meanings ascribed to them
by Chapter 514E, Haw. Rev. Stat., as amended.
(3)
The Director may adopt rules pursuant to Chapter 91, Haw. Rev. Stat.,
necessary for the purposes of implementing this Subsection.
(g)
Land Leased or Held Under a Revocable Permit From the State of Hawai'i. Any person who either leases land or holds land under a revocable permit from the State of Hawai'i may have his or her land valued according to this Subsection if the requirements of this Subsection have been satisfied.
(1)
The lessee or permit holder shall file a completed application with
the Director of Finance by July 1 of any year. The Director shall
prescribe the form of the application. As part of the application,
the lessee or permit holder shall provide:
(A)
A legible plot plan or site plan that specifically describes the
land area which is in agricultural use;
(B)
A legible copy of the executed lease or revocable permit which includes
information concerning the term or period of the lease or permit,
and the consideration being paid to the State; and
(C)
A description of the agricultural use that is occurring on the leased
or permitted land.
(2)
After receiving the application, the Director shall prepare findings
of fact. If the Director finds: (A) that the applicant has satisfied
the requirements of Paragraph (1) of this Subsection, and (B) that
agricultural use is occurring on the land that is the subject of the
application, the Director shall approve the application. If the Director's
findings are adverse to the applicant, the Director shall disapprove
the application.
(3)
Land described in applications that have been approved by the Director
shall be assessed at the same percentage of fair market value as land
dedicated under Sec. 5A-9.1.
(4)
Reporting Requirements. Persons whose land is being valued under
this Subsection shall immediately file a report in a form prescribed
by the Director any time they wish to discontinue or have discontinued
the agricultural use on any portion of the subject land.
(A)
Further, the Director may at any time during the term or period of
the lease or revocable permit require such persons to submit evidence
to verify that the land is in substantial and continuous dedicated
use, including but not limited to the following, provided that if
any of the following are not available the owner shall submit a written
explanation:
(1)
A valid, current, State of Hawai'i general excise tax license issued
for agricultural purposes.
(2)
Documentation showing that the land receives County Department of
Water agricultural water rates.
(3)
A copy of the Schedule F form filed with the U.S. Internal Revenue
Service in the immediately preceding year.
(4)
A copy of any claim for exemption from federal income taxation filed
under U.S. Internal Revenue Code Section 6427(c).
(5)
Sales receipts generated from the activities listed under the definition
of the term "agricultural use."
(B)
The Director may also, by administrative rule, require lessees or
permit holders to submit such other additional information and documents
as the Director deems necessary to verify that the subject land is
in agricultural use.
(C)
When submitting materials to the Director, persons shall clearly
identify any confidential commercial or financial information, including
income statements or tax statements, that the person believes is not
subject to disclosure as a government record.
(Ord. No. 394, July 1,
1981; Ord. No. 442, December 22, 1982; Ord. No. 464, August 6, 1984; Ord.
No. 519, December 9, 1987; Ord. No. 541, May 18, 1988; Ord. No. 579, October 24, 1990; Ord. No. 582, December
27, 1990; Ord. No. 583, March 7, 1991; Ord.
No. 596, November 21, 1991; Ord. No. 606, September 23, 1992; Ord. No. 713, November
22, 1996; Ord. No. 742, September 24, 1999; Ord. No. 755, November 30, 2000; Ord. No. 920, December 14, 2011; Ord. No. 972, September
16, 2014; Ord. No. 1132, September 26, 2022)
Any provision to the contrary notwithstanding, any tank or other
storage receptacle required by any government agency to be constructed
or installed on any taxable real property before water for home and
farm use is supplied, and any other water tank, owned and used by
a real property taxpayer for storing water solely for his or her own
domestic use, shall be exempted in determining and assessing the value
of such taxable real property.
(Ord. No. 394, July 1,
1981)
(a)
"Gross income"
"H.R.S."
"Net income"
"Outside plant"
(1)
(2)
(3)
(4)
(5)
(6)
(7)
"Plant," "structure," or "structures"
"Public utility"
"State"
"Tax year"
Definitions.
As used in this Sec. 5A-8.3:
means gross income as defined in Hawai'i Revised Statutes
Chapter 239.
means Hawai'i Revised Statutes, as amended.
means net income as defined in Hawai'i Revised Statutes Chapter
239.
means public utility real property, which consists predominantly
of production, transmission, collection, switching, and distribution
facilities, and which may also consist of one or more of the following
items:
Units which have physical and functional characteristics that
are so similar that they are accounted for by the public utility as
a group or class and are generally installed on easements;
Transmission cable, wire, or pipes, including support or conduit
structures;
Substation equipment;
Measuring and regulating equipment;
Generation equipment;
Storage equipment; and
Switching equipment.
mean public utility real property improvements described
in the definition of "outside plant" in Sec. 5A-8.3(a) and also improvements
that are not outside plant, such as buildings, generating stations,
production plants, gas compressor stations, boilers, switching plants,
dams and reservoirs, circuit equipment, radio systems, terminals,
satellite facilities, storage wells, and pumping facilities.
means a public utility as defined in Hawai'i Revised Statutes
Sec. 269-1, except airlines, motor carriers, common carriers by water,
and contract carriers subject to taxation under Hawai'i Revised Statutes
Sec. 239-6.
means the State of Hawai'i.
shall have the meaning ascribed to it in Sec. 5A-6.2.
(b)
Property
of public utilities including, but not limited to, outside plant,
plant, and structures, shall be subject to real property taxation
according to Sec. 5A-8.3.
(c)
Notwithstanding
any section in Chapter 5A, K.C.C. 1987, to the contrary, the Director,
in determining the fair market value of the real property of public
utilities, may use the values for real property, outside plant, plant,
and structures set forth in the annual financial reports of the public
utilities filed with the Hawai'i Public Utilities Commission pursuant
to Chapter 269, H.R.S., as the basis for the Director's assessments.
(d)
Valuation
by Assessment.
(1)
The fair market value of public utility real property shall be determined
as follows:
(A)
Land. Public utility land values shall be determined by the market
data approach to value using appropriate systematic methods suitable
for mass valuation of properties for taxation purposes.
(B)
Outside Plant, Plant, and Structures. The value of outside plant,
plant, and structures shall be determined on the basis of reproduction
cost new less depreciation, if any.
(i)
The reproduction cost new shall be determined by multiplying reported
inventory original cost by appropriate price indices or by multiplying
physical inventories by appropriate unit prices, or both.
(ii)
The rate of depreciation shall be a function of the appraised
property's age, estimated service life, and salvage factor.
(C)
Real property of public utilities not otherwise classified under
Sec. 5A-6.4 shall be classified industrial.
(2)
Liens and Foreclosures. For purposes of liens and foreclosures, outside
plant shall be considered a part of any system or plant of which it
is a part, and to which a tax map key has been assigned.
(e)
Taxation by Percentage of Gross Income. In lieu of the assessment method specified in Subsections (c) and (d) of this Section, a public utility may elect to be assessed, and shall pay, real property taxes of such percent of its gross income for the preceding year according to this Subsection. The tax imposed by this Subsection shall be a means of taxing real property owned by a public utility or leased to it under a lease pursuant to which the public utility is required to pay real property taxes upon the property.
(1)
The rate of tax upon the gross income of a public utility shall be
determined as follows:
(A)
If the ratio of net income of the public utility to its gross income
is 15% or less, the rate of the tax on gross income shall be 1.885
percent (1.885%); for all companies having net income in excess of
15% of gross income, the rate of the tax on gross income shall increase
continuously in proportion to the increase in ratio of net income
to gross income, at such rate that for each increase of 1% in the
ratio of net income to gross income, there shall be an increase of
0.2675% in the rate of the tax.
(B)
The following formula may be used to determine the rate, in which
formula the term "R" is the ratio of net income to gross income, and
"X" is the required rate of the tax on gross income for the utility
in question:
|
X = (26.75R-2.1275)%;
|
provided that in no case governed by the formula shall
"X" be less than 1.885 percent (1.885%) or more than 4.2 percent (4.2%);
and provided further that in no case shall the application of the
rate or formula described above, when added to the amount of real
property tax levied by the other counties using the same formula in
their respective county ordinances, result in a combined statewide
real property tax liability which is greater than that portion of
the tax liability in excess of 4% that would have been payable by
the public utility under H.R.S. Chapter 239, as codified on August
1, 2000.
(2)
In determining a public utility's gross income and net income under
this Subsection, the Director shall use the gross income and net income
information set forth in the reports filed by the public utility pursuant
to Chapter 239, H.R.S.
(A)
If a public utility has not allocated its gross income and net income
on a county-by-county basis, a method of allocation shall be agreed
to by the Director and the public utility.
(B)
If the Director and the public utility are unable to agree on an
appropriate method of allocation, the method shall be determined by
the Tax Appeal Court; provided that a tele-communications company
that uses access lines may elect to allocate its statewide gross in
come from its public utility business based on the ratio of the number
of the company's access lines in the County to the total number of
the company's access lines in the State.
(3)
Election or Mandatory Use of Percentage of Gross Income Methodology.
A public utility may elect to subject its real property to taxation
pursuant to this Subsection, instead of Subsections (c) and (d) of
this Section, by filing with the Director, on a yearly basis, a notice
of such election on or before September 30th preceding the tax year
for which such an election is made. The form of the notice shall be
prescribed by the Director.
(4)
A public utility whose real property is subject to taxation under
this Subsection shall, notwithstanding any section in this Chapter
to the contrary, pay real property taxes due for the year in 12 equal
monthly installments. The first installment shall be paid on or before
July 10th, and the remaining installments shall be paid on or before
the tenth (10th) day of each month thereafter. All taxes due on an
installment payment date that remain unpaid after that date shall
thereupon become delinquent.
(Ord. No. 755, November
30, 2000; Ord. No. 920, December 14, 2011)
(a)
Any
provision to the contrary notwithstanding, lands underlying areas
that are designated and approved for commercial alternative energy
facilities shall be annually assessed at the market value of industrial
land (taking into account the limited scope of permitted uses), regardless
of the actual zoning. The Director shall consider the restricted nature
of the use permits required, if any, as well as the limited scope
of alternative energy facilities when valuing the underlying lands
as industrial.
(b)
Any
provision to the contrary notwithstanding, lands underlying areas
that are designated and approved for commercial alternative energy
facilities shall be classified as industrial.
(Ord. No. 916, December
1, 2011)
