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Committee forwards bill to exempt buildings on Hawaiian home lands from county property tax; estimated $1.44M revenue impact
Summary
Bill 44 would change county code to exempt the value of buildings on Department of Hawaiian Home Lands parcels from county property tax (while retaining a minimum tax). Tax staff estimated the county would forgo about $1,440,000 in revenue if the bill passes; council sponsors framed the change as parity with other counties and an equity measure.
The Committee on Finance voted to forward Bill 44 to full council with a favorable recommendation after a lengthy discussion on equity, budget impact and administrative implications.
Sponsors said the bill corrects language in county code to include buildings on Hawaiian home lands within the exemption, aligning Hawaii County with policies in other counties while retaining a county minimum tax. Council member Inaba, a maker of the bill, said the change is "a very pretty straightforward easy change" that will bring parity; Council member Eustace, a co-sponsor, emphasized the relief for homestead communities.
Tax office staff provided the committee with an analysis. Real property tax administrator Lisa Mayer said the change "does make it more fair and in line with the other counties" and noted that, administratively, the county cannot tax parcels that remain under state ownership until the Department of Hawaiian Home Lands (DHHL) provides a route slip allowing placement on the county roll. Assistant real property tax staff estimated the county revenue reduction at about $1,440,000 if the bill becomes law.
Members asked for clarification on how many homeowner-exempt parcels would be affected. Staff said roughly 29% of homeowners in the homeowners tax classification are at the minimum tax (around 400 parcels) and that the proposed change would widen that classification to approximately 2,098 parcels that currently qualify for the homeowners exemption.
Administrators also told the committee the change would reduce staff workload because it would make exemptions effectively automatic rather than requiring staff to chase homeowner exemption forms.
After discussion of delinquencies on commercial DHHL leases and the broader budget context, the committee moved and carried a motion to forward Bill 44 to the full council with a favorable recommendation.
