Report Title:

Leasehold properties; Tax on improvements

Description:

Imposes a tax of fifty percent on the landowner for the assessed value of improvements made by the tenant on leasehold property, unless certain conditions are met.

HOUSE OF REPRESENTATIVES

H.B. NO.

2169

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to leasehold properties.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 246, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§246- Improvements to leasehold properties. Notwithstanding any law to the contrary, any improvement:

(1) Made by a tenant to leasehold property leased by the tenant; and

(2) That the owner of the property is entitled to retain according to the terms of the lease document

shall be taxed at fifty per cent of the assessed value of the improvement at the time that the lease expires. The tax shall be assessed to the owner of the property.

The tax shall not apply if the owner of the property:

(1) Pays to the tenant the assessed value of the improvement upon the expiration of the lease;

(2) Extends the lease for a period of time at least equal to the length of the original lease, with the new lease rent based only on the fair market value of the land and with other terms and conditions acceptable to the tenant; or

(3) Sells the property in fee to the tenant at an appraised value agreed upon by both parties."

SECTION 2. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 3. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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