ORDINANCE NO. BILL NO A BILL FOR AN ORDINANCE AMENDING CHAPTER 5A, KAUA I COUNTY CODE 1987, AS AMENDED, RELATING TO REAL PROPERTY TAXES

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1 RELATING TO REAL PROPERTY TAXES KAUA I COUNTY CODE 1987, AS AMENDED, A BILL FOR AN ORDINANCE AMENDING CHAPTER 5A, 1 highest tax rate.] a property has multiple actual uses, it shall be classified as the use with the Vacant property shall be classified as zoned until actual use is established. [If (10) Commercialized Home Use. (9) Residential Investor. (8) Homestead. (7) Hotel and Resort. (6) Conservation. (5) Agricultural. (4) Industrial. (3) Commercial. (2) Vacation rental. (1) Residential. one (1) of the following general classes according to the property s actual use (a) For purposes of tax rates, real property shall be classified into Code 1987, as amended, is hereby amended to read as follows: not permitted in the homestead tax class. unless otherwise provided in this Chapter: homestead tax class except that the property has an additional use or uses which are Commercialized Home Use to encompass property which would be eligible for the SECTION 2. Chapter 5A, Section 5A-6.4, of the Kaua i County as amended, relating to Real Property Taxes, to create a new tax class entitled Chapter 5A, Section 5A-6.4 and Section 5A-11.4(a), of the Kaua i County Code 1987, SECTION 1. Purpose. The purpose of this Ordinance is to amend Sec. 5A-6.4 Real Property Tax Rate Classifications. HAWAI I: BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF KAUA I, STATE OF ORDINANCE NO. BILL NO. 2560

2 assessed separately. classes in the same manner as other property, and (2) deemed a parcel and be (1) classified upon consideration of its actual use into one (1) of the general (b) When property is divided into condominium units, each unit shall 4 2 use with the highest tax rate, unless it satisfies the criteria for classification as commercialized home use set forth in subsection (0. (e) If a property has multiple actual uses, it shall be classified as the Residential Investor shall be applied to properties that do not qualify for the and have an assessed value Of two million dollars ($2,000,000.00) or more. home exemption, are improved with a dwelling unit(s), and not vacant land, (d) For the purposes of this Article, the tax rate classification for commercial or industrial in nature, such as importing, selling, refining or The residentially-used portions of agricultural land shall be assessed according exclusively as the owner s principal residence, except as otherwise provided in purpose other than the owner s principal residence and agriculture. The ditches and sheltering of farm machinery. Uses which are primarily owner has been granted a home exemption, no portion of the parcel is used for provided above and otherwise in this Chapter. for residential rental purposes, whether for long term or short term, except as owner s principal residence which are being assessed according to their to their value in residential use. The homestead class shall also include parcels to the applicable tax year. The homestead class shall also include parcels that to Sec. 5A-11A.1. Homestead shall mean properties which are used Sec. 5A The homestead class shall also include parcels used as the has applied for and been granted a home exemption according to agricultural use as provided in Sec. 5A-9.1; provided that the owner has been granted a home exemption and that no portion of the parcel be used for a agricultural use shall be limited to the cultivation of crops, pasturing of principal residence shall be classified as homestead provided that the owner support the agricultural activity such as windbreaks, access roads, irrigation distributing agricultural products, shall not qualify for the homestead class. this Section. Uses which shall not qualify as homestead include, but are not the day care provider license to the Director on or before September 30th prior term affordable rental uses provided above; and (2) real property which is used animals, and cultivation of aquaculture products, and uses which directly used as day care centers by licensed day care providers; provided that the any other commercial activity, and that owner has provided a current copy of limited to, the following: (1) real property which is used for commercial, income have applied for and have been deemed a long term affordable rental pursuant producing purposes, except for the agricultural, licensed day care, and long (c) Parcels which are used for no other purpose than as the owner s

3 the case of an appeal from an assessment. [e].(g The owner may appeal the property s tax rate classification as in classified as commercialized home use provided that the taxpayer has received a home use exemption on the property pursuant to Sec. 5A-ll.4. applicable to the entire property, but shall be classified and taxed commercialized home use class. set for each use class from the prior year;] be placed in the at the highest applicable use rate as determined by the tax rates exemption of separate homes owned by each of them, unless they respective homes in proportion to the value thereof are living separate and apart, in which case they shall be entitled exemption is claimed; September 30th immediately preceding the year for which the home by a deed, the deed shall have been recorded on or before than one (1) home for any one (1) taxpayer; corporation, cop artnership, or company; Provided: hundred sixty thousand dollars ($160,000.00), the exemption shall be the amount of one hundred sixty thousand dollars ($160,000.00). excess of one hundred sixty thousand dollars ($160,000:0O); exempt only to the following extent from property taxes: SECTION 3. Chapter 5A, Section 5A-l1.4, of the Kaua i County use as the taxpayer s principal residence as of the date of assessment, shall be (f) Parcels which are utilized for multiple purposes, one of which is Code 1987, as amended, is hereby amended by amending subsection (a) to read as follows: (a) Real property owned and occupied only as the taxpayer s principal home, as of the date of assessment by any individual or individuals, shall be (1) Totally exempt where the value of the property is not in (2) Where the value of such property is in excess of one (A) That no such exemption shall be allowed to any (B) That the exemption shall not be allowed on more (C) That where the taxpayer has acquired the taxpayer s (D) That a husband and wife shall not be permitted to one (1) exemption, to be apportioned between each of their (E) That a person living on-premises, a portion of which is used for commercial purposes, shall [receive the exemption 3

4 provisions or applications of the Ordinance which can be given effect without the severable. invalid provision or application, and to this end the provisions of this Ordinance are 4 V:\BILLS\ TERM\Commercialized Home Use Tax Class AB:aa Lihu e, Kaua i, Hawai i October 1, 2014 DATE OF INTRODUCTION: (By Request) MASON K. CHOCK, SR. Introduced by: SECTION 6. This Ordinance shall take effect upon its approval. bracketed material, and underscoring need not be included. underscored. When revising, compiling, or printing this Ordinance, the brackets, SECTION 5. Material to be deleted is bracketed. New Material is to any person or circumstance is held invalid, the invalidity does not affect other SECTION 4. If any provision of this Ordinance or the application thereof

5 of the County of Kaua i at its meeting held on October 1, 2014, by the following vote: No. 2560, which was passed on first reading and ordered to print by the Council I hereby certify that heretofore attached is a true and correct copy of Bill County Clerk, County of Kaua i October 1, 2014 Ricky Watanabe Lihu e, Hawai i RECUSED & NOT VOTING: None TOTAL -0. Rapozo, Yukimura, Furfaro TOTAL 7, FOR PASSAGE: Bynum, Chock, Hooser, Kagawa, AGAINST PASSAGE: None TOTAL -0, EXCUSED & NOT VOTING: None TOTAL -0, CERTIFICATE OF THE COUNTY CLERK