Under a 2002 agreement, the county received $506,583 in April of that year in exchange for waiving all penalty and interest charges that had accumulated as of Dec. 31, 2001. BY JASON ARMSTRONG ADVERTISING STEPHENS MEDIA jarmstrong@hawaiitribune-herald.com HILO — Hawaii
BY JASON ARMSTRONG
STEPHENS MEDIA
jarmstrong@hawaiitribune-herald.com
HILO — Hawaii County and the state Department of Hawaiian Home Lands continue working toward settling Big Island homesteaders’ multi-year property tax debt, officials said.
“We’ve moving toward a resolution,” county Finance Director Nancy Crawford said.
Asked if a deal will involve waiving a portion of the bill as the county did in a 2002 tax settlement with the DHHL, Crawford said that option remains “on the table.”
She declined to reveal details, opting instead to wait until an agreement is reached and sent to the County Council for approval.
The issue stems from Hawaii County’s inability to foreclose on DHHL property as a way of forcing lessees to pay mandatory taxes. When private landowners go three consecutive years without paying, they risk having their property sold at one of the foreclosure auctions the county typically holds twice a year. That threat prompts some tax delinquents to pay up, often right before their property goes on the auction block.
But that foreclosure authority doesn’t extend to state land, such as DHHL property leased to Hawaiian homesteaders.
The DHHL beneficiaries are exempted from property taxes for the first seven years of their lease, which often is for a 99-year term. After that, they are charged taxes only on the value of homes and other structures built on the properties, according to Hawaii County law.
However, the county does impose the minimum $100 yearly tax on properties that remain vacant for more than the first seven years of a new lease, Tax Administrator Stan Sitko said.
If a lease is reissued, the clock gets reset, he said.
As of last June, the county was owed $1.61 million in unpaid taxes, penalties and interest levied on 176 of the DHHL’s Big Island homestead properties, Sitko said at the time. Basic taxes accounted for $564,727 of that total, he said.
“We’re unable to provide that number,” Crawford said Wednesday when asked for updated figures.
Although an attempt was made to generate the data, Crawford said she couldn’t verify the results and didn’t want to release inaccurate information.
The Hawaiian Homes Commission believes homesteaders are responsible for paying their property taxes, Chairman Alapaki Nahale-a said in a statement.
“We are still working with Hawaii County to come up with a resolution that works for both the county and Hawaiian Home Lands,” he said last week. “The issue of property taxes, as it pertains to Hawaiian Home Lands, is a complex issue; it affects each county, and so we would like to create a solution that is long-term and permanent so we aren’t revisiting this situation every few years.”
Nahale-a, who once worked for Hawaii County as a County Council aide, thanked Mayor Billy Kenoi for his “leadership in this arena.”
“(We) look forward to completing our discussions toward a fair and just resolution,” Nahale-a added.
He and Kenoi will meet soon to discuss the tax debt and other issues, said Crawford, who didn’t know when the matter might be resolved.
“They have presented a very positive attitude of a willingness to work this out,” she said of Nahale-a and his staff.
Under a 2002 agreement, the county received $506,583 in April of that year in exchange for waiving all penalty and interest charges that had accumulated as of Dec. 31, 2001.
