LIHUE — A bill that would create an ordinance amending the Kauai County Code 1987, relating to real property tax definitions and kuleana lands, has been introduced by councilmembers Luke Evslin and Mason Chock.
A public hearing on Bill 2756 has been scheduled for Aug. 14.
“I can tell you that a few years back what really started this was calls from kuleana landowners or title owners who were having issues with their taxes,” Chock said. “So I went to OHA (Office of Hawaiian Affairs) to inquire about how we may be able to assist them, and I was directed right back to our county tax office.”
The way the law reads now, only the owner of land is able to apply for a tax exemption.
Chock said there are situations with some landowners ending up in higher tax brackets rather than receiving the tax exemption initiated by the state Legislature a few years ago.
“We believe that we have come up with a solution that starts that process in the right direction to correct and move people into the right tax brackets,” Chock said.
Deputy County Attorney Adam Roversi gave a presentation at Wednesday’s council meeting to provide historical background on some of the challenges kuleana landowners have faced in Kauai County.
“The goal of the ordinance is to provide some property tax relief to Native Hawaiian property owners who are often subject to disenfranchisement and foreclosure through their inability to pay increasing property taxes as property values skyrocket in some areas of Kauai or all areas of Kauai,” Roversi said.
Office of Hawaiian Affairs Trustee Dan Ahuna agreed.
Roversi said there are two prongs for qualification for kuleana property tax relief.
The first is that the owner must be a lineal descendant of the person who received the original title. The second is that the land itself must qualify as kuleana land and must be owner-occupied, not a vacation rental or vacant or zoned agricultural.
In 2020 there are 29 properties that will receive the kuleana tax exemption on Kauai, with 22 on the North Shore and seven on the Westside, with 31 pending applications, Roversi said.
“The 31 pending applications that go back as far as 2008 haven’t been denied or accepted,” Roversi said. “I think that that speaks to the complexity of qualifying, both demonstrating that your property is legally a kuleana and going through the genealogical research that people have to go through to prove that they are a lineal descendant of the kuleana.”
A kuleana property has a very specific meaning, and must have been awarded under the Kuleana Act of 1850.
“Those properties were awarded to native tenants who presented claims to the land commission, and they were given a land commission award,” he said.
That land commission only existed for about five years, he added.
“There was a very small window of time for native tenants to present their land claims to the commission and receive their award,” he said.
The second type of kuleana parcel that can be legally identified would have been given under the Royal Patent Act of 1850, where a native tenant could make a claim for land where they had lived or grown taro, or where buyers could buy up to 50 acres under the act.
“Oftentimes the legal owner on a property that is recorded with our tax office could have been dead for a hundred years,” Roversi said, “even though the current people who are using the property and taking care of it and paying taxes on it could be three or four generations later of that original owner.”
The bill passed first reading with a vote of 6-0, with KipuKai Kuali‘i excused.