Kaheawa Wind Power, LLC v. Cnty. of Maui
Citation | 135 Hawai'i 202,347 P.3d 632 |
Decision Date | 20 November 2014 |
Docket Number | No. CAAP–12–0000728.,CAAP–12–0000728. |
Parties | In the Matter of the Tax Appeal of KAHEAWA WIND POWER, LLC, Taxpayer–Appellant–Appellee/Cross–Appellant, v. COUNTY OF MAUI, Appellee–Appellant/Cross–Appellee. |
Court | Court of Appeals of Hawai'i |
Richard B. Rost, Deputy Corporation Counsel, for Appellee–Appellant/Cross–Appellee.
Ronald I. Heller (Brian W. Tilker, Austin F. McCullough with him on the briefs) (Torkildson Katz, Moore, Hetherington & Harris), Honolulu, for Taxpayer–Appellant–Appellee/Cross–Appellant.
Vito Galati, Christopher T. Goodin (Cades Schutte LLP), Honolulu, on the briefs, for Amici Curiae Auwahi Wind Energy LLC.
Richard Wallsgrove (Blue Planet Foundation), on the briefs, for Amicus Curiae Blue Planet Foundation.
In this consolidated tax appeal, the County of Maui (County) appeals, and Kaheawa Wind Power, LLC (Kaheawa) cross-appeals, from a Final Judgment issued on July 24, 2012, by the Tax Appeal Court of the State of Hawai‘'i (Tax Appeal Court).1
This case arises from Kaheawa's challenges to real property assessments issued by the County for taxing property on Maui (Property) that Kaheawa leases from the State of Hawai‘i (State). Kaheawa operates a business on the Property producing electrical power from wind energy, with the power generated by twenty wind turbines. There are two issues before us on appeal: first, whether the wind turbines located on the Property could be considered in the "building" valuation for the real property assessments under the Maui County Code (MCC); and second, whether property assessments issued by the County in 2010 validly assessed the Property for retroactive taxes applicable to the years 2007–2009.
In its appeal, the County asserts that the Tax Appeal Court erred by ruling that the wind turbines could not be considered in the "building" valuation for the real property assessments, and thus, erred in granting Kaheawa's motion for partial summary judgment and denying the County's motion for partial summary judgment on this issue.
In its cross-appeal, Kaheawa contends that the Tax Appeal Court erred by granting partial summary judgment to the County as to the retroactive assessments of the Property for taxes. Kaheawa asserts that a factual dispute exists over when the County discovered that Kaheawa was leasing the Property, which made the Property taxable and which affects whether the assessments were timely. Kaheawa also contends that the Tax Appeal Court erred in holding that the County had an unlimited time period in which to add the Property as "omitted property" for assessment and taxing purposes.
We affirm the Tax Appeal Court's Final Judgment and hold that: (1) the wind turbines do not constitute "real property" for tax purposes under the MCC; and (2) the County was entitled to retroactively assess the Property for taxes in this case because the MCC does not create an express or implied time limit in which the County must add "omitted property" to tax assessment lists.
The parties agreed to stipulated facts, which provide in relevant part:
Kaheawa initiated this action by filing appeals with the Tax Appeal Court from the respective notices and amended notices of property assessment issued by the County for the years 2007 through 2011. In its appeals, Kaheawa challenged the County's treatment of alleged personal property as being part of the building value. Kaheawa also challenged the County's issuance of amended notices in 2010 that retroactively assessed the Property for the previous years of 2007, 2008, and 2009.2
On January 18, 2012, Kaheawa filed a motion for partial summary judgment, arguing that the wind turbines and towers are not real property for purposes of real property taxes. On January 19, 2012, the County filed a cross motion on the same issue. At a February 13, 2012 hearing, the Tax Appeal Court held that the wind turbines and towers do not constitute real property for real property tax assessment purposes. On April 9, 2012, the Tax Appeal Court filed an order denying the County's motion for summary judgment, and also an order granting Kaheawa's motion for partial summary judgment, holding as a matter of law that "the towers and turbines which are located on the subject property are not within the definition of ‘real property’ for purposes of the real property tax."
The Tax Appeal Court's April 9, 2012 orders thus determined that the wind turbines and towers could not be included in the real property valuation for the assessments. Because the assessments covered more than just the wind turbines and towers, a remaining issue was whether the County properly issued amended notices of property assessment in 2010 retroactive back to 2007, 2008, and 2009.
On June 7, 2012, the County filed a motion for partial summary judgment, arguing that the 2010 amended notices of property assessment for 2007, 2008, and 2009 were proper. The County explained that up until 2005, the Property was exempt from taxation because it is owned by the State and real property owned by the State is exempt from property taxes under MCC § 3.48.530 (2014). In 2005, the State leased the Property to Kaheawa, and thus the Property became taxable. The County argued that although the amended property assessments were not issued until May 17, 2010, the assessments were proper and not invalid due to their timing.
On June 22, 2012, Kaheawa filed a memorandum in opposition to the County's motion for partial summary judgment, arguing that summary judgment was inappropriate. Specifically, Kaheawa argued that the County " discovered" the lease when the County received the lease with other recorded documents in 2005, and that upon discovering the lease, the County had a duty to add the Property to the tax assessment list within a reasonable time.
On July 16, 2012, the Tax Appeal Court held a hearing on the County's motion for partial summary judgment and granted the motion. The Tax Appeal Court's subsequent order stated that "[t]he Court finds that there is not an express or implied time limitation on the County of Maui's ability to make real property tax assessments, and thus the County was legally entitled to make retroactive assessments of the subject property."
On July 24, 2012, the Tax Appeal Court entered the Final Judgment.
On August 22,...
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