Kalaeloa Ventures, LLC v. City and County of Honolulu. , 424 P.3d 458 ( 2018 )

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Electronically Filed
Supreme Court
SCAP-XX-XXXXXXX
27-JUL-2018
08:16 AM
IN THE SUPREME COURT OF THE STATE OF HAWAII
---o0o---
KALAELOA VENTURES, LLC,
Appellant-Appellant,
vs.
CITY AND COUNTY OF HONOLULU,
Appellee-Appellee.
SCAP-XX-XXXXXXX
APPEALS FROM THE TAX APPEAL COURT
(CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX, CAAP-17-
0000485, CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX,
CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX, CAAP-17-
0000492, CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX, and CAAP-XX-XXXXXXX)
(TX NOS. 17-1-0203, 17-1-0204, 17-1-0205, 17-1-0206, 17-1-0207,
17-1-0208, 17-1-0209, 17-1-0210, 17-1-0211, 17-1-0212, 17-1-
0214, 17-1-0215, 17-1-0216, and 17-1-0217)
JULY 27, 2018
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.
OPINION OF THE COURT BY POLLACK, J.
I. INTRODUCTION
This case arises from the Tax Appeal Court of the
State of Hawaii’s dismissal of fourteen appeals of real property
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tax assessments as untimely filed. The notices of appeal were
filed on Tuesday, January 17, 2017--the next business day
following the January 15 deadline set by a county real property
tax ordinance. The tax court dismissed the appeals, reasoning
that the county ordinance superseded the “weekend rule”
established by Hawaii state law, which typically extends legal
deadlines that would otherwise fall on a weekend or holiday to
the following business day. Although the January 15, 2017
appeal deadline fell on a Sunday and was immediately followed by
a State holiday, the tax court found that strict adherence to
the deadline was required. We conclude that the tax court erred
in determining that the timeliness of the appeal was determined
by county ordinance and not state law.
II. FACTS AND PROCEDURAL HISTORY
In 2015, the City Council of the City and County of
Honolulu (the City) passed Bill 39 FD1 to amend Revised
Ordinance of Honolulu (ROH) § 8-1.16 (1990) to add an exception
to the provision’s general rule extending legal deadlines
falling on weekends and holidays to the following business day.
The addition provided that “[n]otwithstanding the foregoing, the
due date for any appeal shall comply with the jurisdictional
requirements set forth in the law establishing the right to
appeal.” (Emphasis added.)
2
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On December 19, 2016, Kalaeloa Ventures, LLC (KV)
received notices of real property tax assessments (Assessment
Notices) from the City for fourteen parcels. Page 2 of each
notice stated under “Important Dates to Remember” that the
deadline for filing appeals was “January 15 (on or before).”
The Assessment Notices further provided that the assessments
could be appealed to the City’s board of review or the Tax
Appeal Court of the State of Hawaii (tax court). Appeals to the
board of review, it noted, could be filed online, and the
“[d]eadline to file is on or before January 15, 2017. Any
appeals submitted after January 15, 2017 will be subject to
dismissal.” (Emphasis omitted.) Regarding appeals to the tax
court, the Assessment Notices provided as follows: “Appeals to
the Tax Appeal Court are filed at 777 Punchbowl Street, 1st
Floor, Honolulu, Hawaii, 96813, on or before January 15
preceding the tax year.”
January 15, 2017, was a Sunday, and January 16, 2017,
was Martin Luther King Jr. Day, a state holiday. The tax court
clerk’s office was closed on both dates. On January 17, 2017,
KV filed a notice of appeal to the tax court for each of the
3
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fourteen parcels (collectively, Notices of Appeal) challenging
the City’s Assessment Notices.1
A. City’s Motions to Dismiss, or in the Alternative, Motions
for Summary Judgment
The City filed a “Motion to Dismiss, or in the
Alternative, Motion for Summary Judgment” for each of KV’s
Notices of Appeal (collectively, the City’s Motion). The City
requested that the tax court dismiss KV’s Notices of Appeal with
prejudice pursuant to Rule 12(b)(1) of the Hawaii Rules of Civil
Procedure (HRCP), or, alternatively, grant summary judgment
pursuant to HRCP Rule 56 for lack of subject matter
jurisdiction.
The City argued that KV did not timely file the
Notices of Appeal on or before January 15, 2017, as required by
ROH § 8-12.1(a)2 and Hawaii Revised Statutes (HRS) § 232-16.3
1
The merits of the grounds set forth in KV’s Notices of Appeal are
not at issue in this appeal.
2
ROH § 8-12.1(a) (1997) provides as follows:
Any taxpayer or owner who may deem himself or herself
aggrieved by an assessment made by the director or by the
director’s refusal to allow any exemption, may appeal from
the assessment or from such refusal to the board of review
or the tax appeal court pursuant to HRS Section 232-16 on
or before January 15th preceding the tax year, as provided
in this article.
3
HRS § 232-16(a) (2017) provides in part as follows: “An appeal to
the tax appeal court is properly commenced by filing, on or before the date
fixed by law for the taking of the appeal, a written notice of appeal in the
office of the tax appeal court.”
4
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Anticipating KV’s counterarguments, the City contended that HRS
§ 1-32,4 one of the statutory “weekend rules” allowing acts that
are legally required to be performed on a particular date to be
done the next business day when the specified day is a Sunday or
a holiday, does not apply to filing real property tax assessment
appeals. The 2015 amendment of ROH § 8-1.16 excluded these
appeals from the weekend rule’s operation, the City argued. The
amended ordinance made the deadline for perfecting appeals
mandatory, the City asserted, and it thus could not be extended
by the weekend rule.
In addition, the City submitted that, where a conflict
between specific and general statutes cannot be resolved in pari
materia, the county ordinances dealing specifically with the
deadline for real property tax assessment appeals--ROH §§ 8-
12.1(a) and 8-1.16--must prevail over the general weekend rule.
4
HRS § 1-32 (2009) provides as follows:
Whenever any act of a secular nature other than a work of
necessity or mercy is appointed by law or contract to be
performed upon a particular day, which day falls upon a
Sunday or holiday, the act may be performed upon the next
business day with the same effect as if it had been
performed upon the appointed day. When so provided by the
rules of court, the act also may be performed upon the next
business day with the same effect as if it had been
performed upon the appointed day if the appointed day falls
on a Saturday.
5
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The City also asserted that article VIII, section 3 of
the Hawaii Constitution5 broadly grants counties the exclusive
authority over functions, powers, and duties relating to the
taxation of real property, including the authority to set filing
deadlines and any procedures relating to the filing of real
property tax assessment appeals, so long as those deadlines and
procedures do not violate the state or federal constitution.
The City concluded that KV’s Notices of Appeal were untimely
executed, filed, and served, and therefore the tax court lacked
subject matter jurisdiction to hear the appeals.
KV opposed the City’s Motion, contending that the date
for filing the Notices of Appeal extended to January 17, 2017,
because HRS § 1-29,6 the weekend rule that sets forth the method
5
Article VIII, section 3 of the Hawaii Constitution provides as
follows:
The taxing power shall be reserved to the State, except so
much thereof as may be delegated by the legislature to the
political subdivisions, and except that all functions,
powers and duties relating to the taxation of real property
shall be exercised exclusively by the counties, with the
exception of the county of Kalawao. The legislature shall
have the power to apportion state revenues among the
several political subdivisions.
(Emphasis added.)
6
HRS § 1-29 (2009) provides as follows:
The time in which any act provided by law is to be done is
computed by excluding the first day and including the last,
unless the last day is a Sunday or holiday and then it is
(continued . . .)
6
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for computing deadlines, excludes Sundays and holidays from the
computation of time. Under this court’s precedent, KV argued,
the City’s constitutional authority has not been interpreted to
broadly extend to setting filing deadlines and any procedures
related to real property tax assessment appeals. KV also
asserted that the tax court’s subject matter jurisdiction
derived from HRS § 232-11.7 Based on precedent, the City did not
have authority to expand or limit the jurisdiction of the tax
court beyond that provided by state statute, KV contended.
KV alternately argued that, because statutes related
to the same subject matter must be construed together, statutes
establishing filing deadlines must be read in conjunction with
HRS § 1-29. KV added that statutory deadlines must be
interpreted in a manner that achieves the intent of the
legislature to provide a meaningful opportunity to appeal.
(. . . continued)
also excluded. When so provided by the rules of court, the
last day also shall be excluded if it is a Saturday.
7
HRS § 232-11 (2017), “Court of record; general duties, powers,
seal,” provides in relevant part as follows:
The tax appeal court shall hear and determine appeals as
provided in section 232-16 or 232-17. It shall be a court
of record; have jurisdiction throughout the State with
respect to matters within its jurisdiction; and shall have
the power and authority in the manner provided in section
232-13, to decide all questions of fact and all questions
of law, including constitutional questions, involved in any
such matters, without the intervention of a jury.
7
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In reply, the City rejected KV’s argument that ROH §
8-1.16 may be interpreted as allowing application of the weekend
rule, contending that the ordinance provides specificity in
regard to the appeal filing deadline. The City submitted that,
because HRS § 1-32 conflicts with ROH § 8-1.16, the former does
not apply here.
B. Tax Court Hearing and Order
On May 1, 2017, the City’s Motion came on for hearing
before the tax court.8 The tax court consolidated the Notices of
Appeal for purposes of the hearing and granted the City’s
request for the matter to be considered only as a motion to
dismiss and not as a motion for summary judgment. The tax court
stated that the dispositive issue in the case was whether the
City had the constitutional authority to negate the weekend rule
by ordinance as it relates to real property tax assessment
appeals. Construing ROH § 8-12.1 together with ROH § 8-1.16,
the tax court noted that the City was “emphatic” that all
appeals must be filed on or before “and not after January 15.”
The tax court likened the case to State ex rel. Anzai
v. City and County of Honolulu, 99 Hawaii 508, 57 P.3d 433(2002), which it interpreted “as providing or recognizing the
superiority of the counties’ interest in real property tax.”
8
The Honorable Gary Wong Bae Chang presided.
8
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Accordingly, the tax court explained that it “recognizes the
constitutional principle of the superior power of the City to
address matters of real property tax,” noting that the counties
do not have uniform appeals deadlines, “so there appears to be
at least some variation in terms of a county or the City’s
interest in setting their real property tax deadlines.”
The tax court concluded that ROH § 8-1.16 negated the
statewide weekend rule as it applied to tax appeals because the
Hawaii Constitution grants exclusive authority to the counties
over real property tax assessments. Therefore, the tax court
held that KV’s Notices of Appeal were untimely and that the
court lacked subject matter jurisdiction over the cases. On May
30, 2017, the tax court entered orders granting the City’s
Motion as to each of KV’s Notices of Appeal and dismissed the
appeals with prejudice for lack of subject matter jurisdiction.
KV timely filed a notice of appeal from the tax
court’s order granting the City’s motion to dismiss, and the
case was subsequently transferred to this court.
III. STANDARDS OF REVIEW
The interpretation of municipal ordinances “is a
question of law reviewable de novo.” Weinberg v. City & Cty. of
Honolulu, 82 Hawaii 317, 322, 922 P.2d 371, 376 (1996) (citation
omitted).
9
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This court “answer[s] questions of constitutional law
by exercising our own independent judgment based on the facts of
the case.” State v. Aplaca, 96 Hawaii 17, 22, 25 P.3d 792, 797
(2001) (quoting State v. Jenkins, 93 Hawaii 87, 100, 997 P.2d
13, 26 (2000)). Thus, “questions of constitutional law are
reviewed on appeal ‘under the “right/wrong” standard.’” Id.(quoting Jenkins, 93 Hawaii at 100, 997 P.2d at 26).
IV. DISCUSSION
KV’s first two points of error on appeal contend that
the tax court erred in concluding that the City had
constitutional authority to negate the statutory weekend rule by
ordinance as it applies to real property tax assessment appeals,
thereby rendering the Notices of Appeal untimely filed.9 The
City responds that ROH § 8-1.16 does not restrict the
jurisdiction of the tax court granted by HRS § 232-11 because
ROH § 8-1.16 simply establishes that the weekend rule applies to
only certain filings that do not include appeals. Nonetheless,
the City argues, even if ROH § 8-1.16 does negate HRS §§ 1-29
and 1-32, the City has the authority to restrict the subject
matter jurisdiction of the tax court as it relates to real
property tax assessment appeals because the Hawaii Constitution
9
In light of our disposition of the appeal in this case, we find
it unnecessary to address KV’s other points of error.
10
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broadly confers all functions, powers, and duties related to
real property tax assessment upon the counties. It is thus
within the City’s constitutional authority, the City argues, to
negate HRS §§ 1-29 and 1-32 by ordinance insofar as the statutes
apply to real property tax assessment appeals.10
As stated, the City amended ROH § 8-1.16 in 2015 to
read as follows:
When the due date for any notice, application, document or
remittance required by this chapter falls on a Saturday,
Sunday or legal holiday, the notice, application, document
or remittance shall not be due until the next succeeding
day which is not a Saturday, Sunday or legal holiday.
Notwithstanding the foregoing, the due date for any appeal
shall comply with the jurisdictional requirements set forth
in the law establishing the right to appeal.
ROH § 8-1.16 (2015) (pertinent amendment underlined).
This court has held that “the right to appeal a tax
assessment is purely statutory.” Univ. of Haw. v. City & Cty.
10
The Attorney General of the State of Hawaii submitted an amicus
curiae brief on behalf of the State because the City has “drawn into
question” the constitutionality of HRS §§ 1-29 and 1-32. The State frames
KV’s appeal as a challenge to whether the City has constitutional authority
to limit the tax court’s jurisdiction over real property tax assessment
appeals by negating application of the statutory weekend rule as it relates
to real property tax assessment appeals. The City does not have that
authority, the State contends, because the state legislature is
constitutionally empowered to establish the subject matter jurisdiction of
the tax court. (Citing Haw. Const. arts. III, VI.)
The State argues further that even if this court finds that the
counties were granted authority over real property tax assessment appeals to
the tax court through article VIII, section 3 of the Hawaii Constitution,
that authority is limited by the reservation of power to the legislature to
enact statutes of statewide concern in article VIII, section 6 of the Hawaii
Constitution. Because HRS §§ 1-29 and 1-32 are statutes of statewide
concern, the State contends, ROH § 8-1.16 is preempted insofar as it
conflicts with them. We do not find it necessary to address this argument.
11
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of Honolulu, 102 Hawaii 440, 444, 77 P.3d 478, 482 (2003). HRS
§ 232-16(a) (2017)11 establishes the right to appeal to the tax
court, specifically providing that “[a] taxpayer . . . may
appeal directly to the tax appeal court.”12 Indeed, the ROH
expressly recognize HRS § 232-16 as a statute governing appeals
to the tax court by stating, “An appeal to the tax appeal court
may be filed by a taxpayer or the director as provided in HRS
Sections 232-8 through 232-14 and Sections 232-16 through 232-
18.” ROH § 12.8(a) (1983).
11
HRS § 232-16(a) provides in relevant part as follows:
A taxpayer or county may appeal directly to the tax appeal
court . . . An appeal to the tax appeal court is properly
commenced by filing, on or before the date fixed by law for
the taking of the appeal, a written notice of appeal in the
office of the tax appeal court and by service of the notice
of appeal on the director of taxation and, in the case of
an appeal from a decision involving the county as a party,
the real property assessment division of the county
involved. An appealing taxpayer shall also pay the costs
in the amount fixed by section 232-22.
(Emphasis added.)
12
HRS § 232-16 is part of HRS Chapter 232, which generally sets
forth the statutes governing tax appeals to the tax court, the state boards
of review, and a small claims court within the tax court. See generally HRS
Chapter 232. The chapter comprehensively provides for the judicial functions
of the tax court. HRS § 232-11, inter alia, establishes that the tax court
shall be a court of record and that it has the power to hear and determine
appeals as provided in HRS § 232-16. HRS § 232-11 (2017). HRS § 232-14(a)
(2017) provides, inter alia, that the Supreme Court of Hawaii shall have the
power to make rules relating to procedure in tax appeals and other process by
the tax appeal court. HRS Chapter 232 establishes two methods for
challenging property assessments: appeals to a state or county board of
review and appeals to the tax court. HRS §§ 232-15, 232-17 (2017).
12
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HRS § 232-16 also sets forth requirements for when and
how appeals to the tax court will be taken, including the
required contents of a notice of appeal, the cost for filing an
appeal,13 and the appropriate timeframe within which an appeal
may commence. “An appeal to the tax appeal court is properly
commenced by filing, on or before the date fixed by law for the
taking of the appeal[.]” HRS § 232-16(a). HRS § 232-16(d)
(2017) states that an appeal “shall be deemed to have been taken
in time if . . . the notice shall have been deposited in the
mail . . . on or before the date fixed by law for the taking of
the appeal.”
Pursuant to HRS § 232-16, the counties have by
ordinance set the date to take an appeal from a real property
tax assessment.14 The City provided for such a date in ROH § 8-
12.1, which provides in pertinent part as follows:
Any taxpayer or owner who may deem himself or herself
aggrieved by an assessment made by the director or by the
13
HRS § 232-16 cross-references HRS § 232-22, which provides, “The
nonrefundable costs to be deposited in any one case per taxpayer on any
appeal to the tax appeal court shall be an amount set pursuant to rules
adopted by the supreme court, which shall not exceed $100.” HRS § 232-22
(2017).
14
For example, Maui County requires appeals to be filed with its
board of review prior to being heard by the tax appeal court. Maui County
Code § 3.48.595 (2014). Appeals must be filed on or before April 9 preceding
the tax year. Id. Hawaii County also requires appeals to be filed on or
before April 9 preceding the tax year. Hawaii County Code § 19-91 (2016).
Kauai County requires appeals to be filed with the tax court on or before
December 31 preceding the tax year. Kauai County Code § 5A-12.1 (2011).
13
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director’s refusal to allow any exemption, may appeal from
the assessment or from such refusal to the board of review
or the tax appeal court pursuant to HRS Section 232-16 on
or before January 15th preceding the tax year, as provided
in this article.
ROH § 8-12.1(a) (1997) (emphasis added). Therefore, HRS § 232-
16’s “date fixed by law” as it relates to appeals of City real
property tax assessments is “on or before January 15th preceding
the tax year.” See HRS § 232-16; ROH § 8-12.1.
In HRS Chapter 1 Title 1, the chapter pertaining to
the construction of laws and common law, the legislature
provided for extending deadlines when a date fixed by law on
which an action must be performed falls on a non-business day--
that is, a Sunday, holiday, or, when provided for by court
rules, a Saturday. See HRS §§ 1-29, 1-32 (2009). HRS § 1-29
provides that when computing the time in which any act provided
by law is to be done, the last day is included in the
computation of time unless it is a Sunday or a holiday:
The time in which any act provided by law is to be done is
computed by excluding the first day and including the last,
unless the last day is a Sunday or holiday and then it is
also excluded. When so provided by the rules of court, the
last day also shall be excluded if it is a Saturday.
HRS § 1-29. HRS § 1-32 correspondingly provides that any act
that is appointed by law to occur on a Sunday or a legal holiday
may be done with the same effect on the next business day
following the Sunday or legal holiday:
Whenever any act of a secular nature other than a work of
necessity or mercy is appointed by law or contract to be
performed upon a particular day, which day falls upon a
Sunday or holiday, the act may be performed upon the next
14
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business day with the same effect as if it had been
performed upon the appointed day. When so provided by the
rules of court, the act also may be performed upon the next
business day with the same effect as if it had been
performed upon the appointed day if the appointed day falls
on a Saturday.
HRS § 1-32. HRS §§ 1-29 and 1-32 by their plain language thus
encompass all possible acts appointed by law to be done on a
particular day. Cf. Allstate Ins. Co. v. Pruett, 118 Hawaii
174, 181, 186 P.3d 609, 616 (2008) (“[B]y itself, the term ‘any
person,’ ‘encompass[es] every possible individual . . . .’”
(second alteration in original) (citation omitted)).
As noted, HRS § 232-16 provides that an appeal from a
real property tax assessment must be filed by the “date fixed by
law,” which, pursuant to ROH § 8-12.1, is “on or before January
15th preceding the tax year.” Therefore, HRS §§ 1-29 and 1-32
by their plain terms apply to the City’s “date fixed by law” for
filing real property tax appeals as prescribed in ROH § 8-12.1.
Accordingly, when the City’s date fixed by law--
January 15 preceding the tax year--falls on a Sunday or a
holiday, an appeal may be filed with the tax court on the next
business day with the same effect as if it had been filed upon
the “appointed day.” See HRS §§ 1-29, 1-32, 232-16. In this
case, KV’s Notices of Appeal were filed on Tuesday, January 17,
2017, which was the next business day after Sunday, January 15,
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and the holiday on Monday, January 16. Thus, pursuant to HRS §§
1-29 and 1-32, KV’s Notices of Appeal were timely filed.15
The City argues, however, that it has the
constitutional authority to determine the tax court’s
jurisdiction by excluding real property tax assessment appeals
to the tax court from application of the weekend rule. This
authority, according to the City, is derived from article VIII,
section 3 of the Hawaii Constitution, which provides the
following:
Section 3. The taxing power shall be reserved to the
State, except so much thereof as may be delegated by the
legislature to the political subdivisions, and except that
all functions, powers and duties relating to the taxation
of real property shall be exercised exclusively by the
counties, with the exception of the county of Kalawao. The
legislature shall have the power to apportion state
revenues among the several political subdivisions.
15
Citing Kinkaid v. Board of Review of the City & County of
Honolulu, 106 Hawaii 318, 323-24, 104 P.3d 905, 910-11 (2004), the City
contends that ROH § 8-1.16 must prevail because it is a “specific” statute,
unlike HRS §§ 1-29 and 1-32 which are of general concern, and the ordinance
and statutes cannot be resolved in pari materia. However, Kinkaid dealt with
a conflict between two state statutes of coequal authority--HRS § 232-17,
establishing the right to appeal to the tax court from a decision of a state
or county board of review, and HRS § 91-14(a), granting a right of appeal to
the circuit court from a state or county board of review decision. Kinkaid,
106 Hawaii at 323, 104 P.3d at 910. By contrast, here a county ordinance is
in conflict with a state statute. Under such circumstances, the appropriate
analysis is one of sovereign preemption--and not the reconciliation of a
specific statute with a general statute--because HRS §§ 1-29 and 1-32 are
statutes of statewide concern that take precedence over the enactments of the
State’s political subdivisions. See Richardson v. City & Cty. of Honolulu,
76 Hawaii 46, 66, 868 P.2d 1193, 1213 (1994) (“Thus, if an ordinance truly
conflicts with Hawaii statutory law that is of statewide concern, then it is
necessarily invalid because it violates article VIII, section 6 of the Hawaii
Constitution and HRS § 50–15--the state’s supremacy provisions.”). Kinkaid
is therefore inapposite.
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Haw. Const. art. VIII, § 3 (emphases added).
“In interpreting constitutional provisions, ‘[t]he
general rule is that, if the words used in a constitutional
provision . . . are clear and unambiguous, they are to be
construed as written.’” Everson v. State, 122 Hawaii 402, 407,
228 P.3d 282, 287 (2010) (alterations in original) (quoting
Watland v. Lingle, 104 Hawaii 128, 139, 85 P.3d 1079, 1090
(2004)). Here, article VIII, section 3 does not provide the
City with authority to define the jurisdiction of the tax court
when the tax court exercises its judicial power to review real
property tax assessments imposed by the City. This judicial
power is derived from article VI, section 1 of the Hawaii
Constitution, which establishes the power of the judiciary:
Section 1. The judicial power of the State shall be vested
in one supreme court, one intermediate appellate court,
circuit courts, district courts and in such other courts as
the legislature may from time to time establish. The
several courts shall have original and appellate
jurisdiction as provided by law and shall establish time
limits for disposition of cases in accordance with their
rules.[16]
Haw. Const. art. VI, § 1 (emphasis added). This constitutional
provision does not provide an exception allowing the City to
16
Article III, section 1 of the Hawaii Constitution vests
legislative power of the State in a legislature, which extends to “all
rightful subjects of legislation not inconsistent” with the federal and state
constitutions, including the authority to establish the subject matter
jurisdiction of the courts under article VI, section 1.
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define the state tax court’s jurisdiction whenever it considers
appeals of real property tax assessments.
In addition, article VIII of the Hawaii Constitution,
entitled “Local Government,” provides in section 6, “This
article shall not limit the power of the legislature to enact
laws of statewide concern.” Haw. Const. art. VIII, § 6. Thus,
article VIII reserves the State legislature’s power to enact
laws of statewide concern even where powers, functions, and
duties have been given to the counties. The tax court, which is
established by statute, is a statewide court, and therefore its
jurisdiction is inherently a matter of statewide concern.
Even assuming an ambiguity exists in these
constitutional provisions, this court has “repeatedly held that
the fundamental principle in construing a constitutional
provision is to give effect to the intention of the framers and
the people adopting it.” Everson, 122 Hawaii at 407, 228 P.3d
at 287 (quoting Pray v. Judicial Selection Comm’n of the State
of Haw., 75 Haw. 333, 343, 861 P.2d 723, 728 (1993)). In
determining the intention of the framers and the people adopting
the constitution, this court may look to constitutional history
and the legislative implementation of the constitutional
amendment. Id.18
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The constitutional history of article VIII, section 3
indicates that the Local Government Committee preferred the
provision’s current language--granting the counties power over
“all functions, powers and duties relating to the taxation of
real property”--over the amendment’s original proposed language,
which afforded counties “the power to levy a tax on real
property.” The report of the Committee of the Whole indicates
the change was made in order to “clarify the [Local Government]
standing committee’s intent to grant all taxing powers relating
to real property to the counties.” Comm. of the Whole Rep. No.
7, in 1 Proceedings of the Constitutional Convention of Hawaii
of 1978, at 1008 (1980). Although the Local Government
Committee expressed in its standing committee report that a
general grant of taxing powers to the counties would include the
(presumably administrative) adjudication of appeals,17 there is
17
The Local Government Committee Report states in relevant part as
follows:
Presently, under the Hawaii Revised Statutes, the State is
responsible for assessing all real property in the State
that is subject to the payment of real property taxes, and
for levying and collecting all such taxes, and adjudicating
taxpayer appeals. Basic policies defining real property,
setting the basis of assessment, determining the manner in
which rates are set, setting exemptions and describing the
appeals process are the responsibility of state
lawmakers. . . . A general grant of taxing powers to the
counties would include: a) assessments of property, b)
adjudications of appeals, c) levying of tax rates, d)
collections of taxes and e) formulation of basic policies.
(continued . . .)
19
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no indication--and the City does not argue--that the authority
was meant to divest the state tax court of its then-existing
jurisdiction over real property tax appeals.18 In short, there
is nothing in the Local Government Committee’s standing report,
the committee report of the Committee of the Whole, or the final
language adopted in article VIII, section 3 of the Hawaii
Constitution to suggest the provision was intended to allow the
counties to limit the state tax court’s jurisdiction over real
property tax appeals at their discretion.
The framers also provided for a period of transition
in article XVIII, section 6 of the Hawaii Constitution as
authority over real property taxation transferred from the State
to the counties. This provision provided that article VIII,
(. . . continued)
Stand. Comm. Rep. No. 42, in 1 Proceedings of the Constitutional Convention
of Hawaii of 1978, at 594-95 (1980). When the constitutional amendment was
drafted, the two venues for adjudicating real property tax assessment appeals
were state boards of review and the tax court. HRS § 232-15 (1967); HRS §
232-16 (1963). While the ultimate authority to review tax appeals has
remained with the State, HRS § 232-16(a) now provides “that a taxpayer
appealing a real property tax assessment shall first obtain a decision from
an administrative body established by county ordinance, prior to appealing to
the tax appeal court, if county ordinance requires a taxpayer to do so.”
18
Notwithstanding its argument that the counties were
constitutionally granted exclusive authority over matters pertaining to real
property taxation, the City contrarily relies upon HRS § 232-16(d) and Rule
2(a) of the Rules of the Tax Court (RTAC) to argue that KV’s Notices of
Appeal would have been timely if postmarked on January 15 by an in-house
postage machine. In relying upon HRS § 232-16 and RTAC Rule 2(a) as the
authorities that establish the timeliness of an appeal, the City undermines
its argument that the tax court’s jurisdiction as it relates to appeals from
City real property tax assessments is determined by City ordinances.
20
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section 3 of the Hawaii Constitution would take effect two years
after ratification, with an additional eleven-year transition
period during which policies related to real property taxation
would be uniform throughout the state.19
In 1980, pursuant to article XVIII, section 6 of the
Hawaii Constitution, the legislature passed House Bill (H.B.)
2193-80, enacted as Act 279 (1980) and codified as HRS Chapter
246A, to transfer real property taxation from the State to the
counties.20 1980 Haw. Sess. Laws Act 279, § 6 at 533-36; State
ex rel. Anzai v. City & Cty. of Honolulu, 99 Hawaii 508, 511, 57
19
Article XVIII, section 6 provides in pertinent part as follows:
The amendment to Section 3 of Article VIII shall take
effect on the first day of July after two full calendar
years have elapsed following the ratification of such
amendment [November 7, 1978]; provided that for a period of
eleven years following such ratification, the policies and
methods of assessing real property taxes shall be uniform
throughout the State and shall be established by agreement
of a majority of the political subdivisions.
20
HRS § 246A-1 (repealed) provided the purpose of the chapter as
follows:
Purpose. The legislature finds that section 3 of article
VIII of the constitution of the State has been amended to
provide that all functions, powers, and duties relating to
the taxation of real property heretofore reserved to the
State shall be exercised exclusively by the counties with
the exception of the County of Kalawao. It is the purpose
of this chapter to provide for the orderly transfer of
these functions, powers, and duties, including the transfer
of personnel, records, and equipment to the counties.
HRS § 246A-1 (repealed by 2016 Haw. Sess. Laws Act 52, § 8 at 85-86).
21
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P.3d 433, 436 (2002). Regarding appeals, Act 279, section 6
read as follows:
The right of appeal from administrative actions or
determinations as now provided by law shall not be impaired
by this Act.
Each of the counties shall by ordinance provide for appeals
from assessments, denial of an exemption, or the denial of
a dedication to the same extent and in accordance with the
procedures prescribed in chapter 232, Hawaii Revised
Statutes.
1980 Haw. Sess. Laws Act 279, § 6 at 536 (emphases added). Act
279 thus preserved then-existing rights of appeal, including the
right to appeal to the tax court from a real property tax
assessment. The right to appeal was found then, as it is today,
in HRS § 232-16.
Separate and apart from the existing right of appeal
to the tax court, the House Standing Committee Report on H.B.
2193-80 (Act 279) expressly noted that the constitution granted
the counties authority to establish an appeals process by county
ordinance, but the committee distinguished that appeals process
from the existing tax court appeals procedure:
[P]rovision has been made to provide that appeals from
assessments, denial of exemptions, or denial of dedication
may be made under an appeals process established by county
ordinance or may be made to the appropriate state court as
is now the law. It is the feeling of your Committee that
the counties not only have the power to establish such an
appeals process, but that they are mandated to do so by the
provisions of this bill and the constitution transferring
the real property tax function to the counties.
22
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H. Stand. Comm. Rep. No. 422-80, in 1980 House Journal, at
1461.21 The Committee thus appears to have envisioned the
continuation of two forums for filing real property tax
assessment appeals, with authority granted to the counties to
establish boards of review to take initial appeals from real
property tax assessments in place of existing state boards of
review, and the tax court retaining ultimate appellate
jurisdiction. In addition, comparing H.B. No. 2193-80 with its
Senate companion bill, Senate Bill No. 2219-80, the Senate
Standing Committee on Intergovernmental Relations noted the
distinction between the forums for appeal: “Both [bills] permit
appeals to the State court system in disputes.” S. Stand. Comm.
Rep. No. 824-80, in 1980 Senate Journal, at 1409. The committee
reports indicate that the legislature did not consider the
“functions, powers and duties relating to real property
taxation” to include authority over the jurisdiction of the tax
court as it relates to real property tax assessment appeals and
that the committees intended the appellate jurisdiction of the
tax court to continue as it did prior to the implementation of
article VIII, section 3 of the Hawaii Constitution.
21
The City quotes this committee report in support of its argument
that HRS § 246A-4 (Act 279, § 6) granted the City authority over the
jurisdiction of the tax court as it relates to real property tax appeals.
23
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The following year, the legislature enacted Act 78
(1981), which amended HRS § 246A-4 to clarify the transition
process for real property tax appeals pending before the state
boards of review and to allow for the boards’ decisions to
continue to be appealed to the tax court as provided in HRS
Chapter 232.22 Thus, after July 1, 1981, appeals from real
property tax assessments could be made to the county-established
boards of review or to the tax court pursuant to HRS § 246A-4
(repealed).23 As stated, although the legislature provided for a
transition from the state boards of review to the county-
22
Act 78 amended HRS § 246A-4, Appeals, to read,
The right of appeal from administrative actions or
determinations as now provided by law shall not be impaired
by this chapter.
Each of the counties shall by ordinance provide for appeals
from assessments, denial of an exemption, or the denial of
a dedication.
For purposes of this transfer, all appeals from the
assessment of real property taxes made to the various
boards of taxation review, all appeals from the denial of
an exemption made to such boards, and every other appeal
made to such boards prior to July 1, 1981, shall continue
to be heard and decided by the board of taxation review for
the taxation district in which the appeals have been made.
The jurisdiction of all such boards to hear and decide the
appeal shall extend and continue over such matters until
decision is filed with the assessor as provided in section
232-7. Any such decision made by the board may be appealed
to the tax appeal court as provided in chapter 232.
HRS § 246A-4 (repealed); see 1981 Haw. Sess. Laws Act 78, § 1 at 108-09.
23
Act 78 also removed the requirement in Act 279 that the counties’
provision of a right to appeal from assessments established by ordinance must
be to the same extent and in accordance with HRS Chapter 232. 1981 Haw.
Sess. Laws Act 78, § 1 at 108-09.
24
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established boards of review, the legislature did not discuss or
provide for a transition of control over the tax court’s
jurisdiction to the counties with respect to real property tax
assessment appeals, indicating that such divesting of authority
was not contemplated.24
At the end of the eleven-year transition period, the
legislature enacted amendments to various statutory provisions
to further facilitate the transfer of matters involving real
property taxation to the counties. 1989 Haw. Sess. Laws Act 14,
§ 9 at 42. Act 14 amended HRS § 232-16(a) to read as follows:
A taxpayer or county [may], in all cases, may appeal
directly to the tax appeal court without appealing to [the]
a state board of review, or any equivalent administrative
body established by county ordinance, by filing on or
before the date fixed by law for the taking of the appeal.
1989 Haw. Sess. Laws Act 14, § 9 at 42 (material to be deleted
bracketed and additions underlined). Act 14 also made changes
to other sections within HRS Chapter 232 to include references
to an “equivalent administrative body established by county
ordinance” and to state-established boards of review. See,
e.g., 1989 Haw. Sess. Laws Act 14, §§ 10-11 at 43. As
discussed, no provision was made or discussed for a transfer of
control over the jurisdiction of the tax court as it relates to
24
See S. Stand. Comm. Rep. No. 806, in 1981 Senate Journal, at
1257; H. Stand. Comm. Rep. No. 295, in 1981 House Journal, at 1061; H. Stand.
Comm. Rep. No. 578, in 1981 House Journal, at 1179.
25
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real property tax assessment appeals. The same was true in
2011, when the legislature enacted Act 106 amending HRS § 232-
16(a) to enable the counties to require a taxpayer to appeal a
real property tax assessment to a county board of review prior
to filing an appeal with the tax court.25 2011 Haw. Sess. Laws
Act 106, § 1 at 277-78.
In 2016, the legislature further amended and repealed
statutory provisions relating to real property taxation that
were unnecessary or obsolete due to the constitutional transfer
of real property taxation to the counties. 2016 Haw. Sess. Laws
Act 52, § 1 at 87. Among the provisions repealed was HRS § 246-
46, which set forth the date for appeals of real property tax
assessments to both the state boards of review and the tax
court.26 2016 Haw. Sess. Laws Act 52, § 7 at 88.
Accordingly, the legislative history of the statutes
implementing article VIII, section 3 of the Hawaii Constitution
25
The purpose of H.B. 1532 (2011), subsequently enacted as Act 106,
was to reduce the number of appeals to the tax court by requiring taxpayers
to, if required by county ordinance, first appeal to the applicable county
board of review for an initial decision from that body prior to appealing to
the tax appeal court. S. Stand. Comm. Rep. No. 888, in 2011 Senate Journal,
at 1160.
26
HRS § 246-46 (repealed) provided in pertinent part as follows:
Any taxpayer who may deem oneself aggrieved by an
assessment made by the assessor or by the assessor’s
refusal to allow any exemption, may appeal from the
assessment or from such refusal to a board of review or the
tax appeal court, on or before April 9 preceding the tax
year, as provided in chapter 232.
26
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does not indicate that authority over the jurisdiction of the
tax court was granted to the counties. A review of our caselaw
leads to a similar conclusion.
In University of Hawaii v. City & County of Honolulu,
this court held that counties require statutory authority to
expand the jurisdiction of the tax court. See 102 Hawaii at
444-45, 77 P.3d at 482-83. We concluded that the University of
Hawaii did not have standing to appeal from a real property tax
assessment as an “owner” of the assessed property, pursuant to
ROH § 8-12.1 (1987), because ROH § 8-12.1 expanded the right of
appeal beyond that provided for by the ordinance’s enabling
statute, HRS § 232-16 (2003).27 Id. at 441, 77 P.3d at 479. In
our analysis, we stated that because the right to appeal a tax
assessment is purely statutory, “whether a person challenging an
assessment bears such a relation to the real property being
assessed as to entitle that person the right to appeal is
determined by the applicable statutes.” Id. at 444, 77 P.3d at
482 (quoting Maile Sky Court Co. v. City & Cty. of Honolulu, 85
Hawaii 36, 39, 936 P.2d 672, 675 (1997)). Thus, while “the
27
The ordinance in question, ROH § 8-12.1 (1987), provided in
pertinent part that “[a]ny taxpayer or owner . . . may appeal the assessment
. . . to the board of review or tax appeal court pursuant to HRS Section 232-
16.” HRS § 232-16 (2001), however, only extended the right to appeal to a
taxpayer or county. Univ. of Haw., 102 Hawaii at 441 n.1, 77 P.3d at 479 n.1
(citing HRS § 232-16 (2001)).
27
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exclusive taxation authority of the State director over real
property was turned over to the counties under an amendment to
the Hawaii Constitution . . . the authority to oversee and
create laws for tax appeals remains with the State director.”
Id. at 445 n.12, 77 P.3d at 483 n.12. Accordingly, absent
statutory authority, the City could not expand to an “owner” the
right of appeal to the tax court from a real property tax
assessment pursuant to HRS § 232-16. See id. at 444-45, 77 P.3d
at 482-83.
In ruling upon the City’s Motion, the tax court relied
on our holding in Anzai as “providing or recognizing the
superiority of the counties’ interest in real property tax.” In
Anzai, this court upheld a county ordinance that removed an
exemption from taxation of real property leased to the State if
the lease terms required the State to pay taxes on the leased
property (the Exemption). 99 Hawaii at 510-13, 57 P.3d at 435-
38. We found that the State impermissibly infringed on the
county’s constitutional authority by enacting a statute
requiring the county to maintain the Exemption for the 1996-97
tax year. Id. at 520-22, 57 P.3d at 445-47. HRS § 246A-2(2),
which required the counties to maintain uniform exemptions
during the eleven-year transfer of power, had lapsed, we noted,
when the county enacted its ordinance removing the Exemption and
28
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thus, based on the facts of the case, the county ordinance
controlled over the state statute. Id. at 520-21, 57 P.3d at
445-46. We stated,
Simply put, the Constitution obligated the County to
maintain the Exemption for eleven years, after which period
the County was free to exercise its exclusive authority to
increase, diminish, enact, or repeal any exemptions
involving real property taxes without interference by the
legislature. To argue, as the State does, that the
Exemption is a matter of statewide concern is to ignore the
fact that the framers of the amendment clearly understood
real property taxation powers, including the power to
create or repeal exemptions, as matters of local concern.
Id. at 521, 57 P.3d at 446. In rejecting the State’s argument
that the Exemption was a matter of statewide concern, this court
pointed to the amendment’s constitutional history, which
demonstrated the framers’ clear intent that exemptions were a
matter of local concern included in the transfer of real
property taxation power. Id. at 521-22, 57 P.3d at 446-47.
Here, however, the constitutional history of the amendment does
not demonstrate a clear intent on the part of the framers to
transfer to the counties control over the jurisdiction of the
statewide tax court as it relates to real property tax
assessment appeals.
Taken together, under a plain meaning reading of
applicable constitutional provisions; the constitutional history
of article VIII, section 3 of the Hawaii Constitution; the
legislative history of its implementing legislation; and
relevant caselaw, article VIII, section 3 of the Hawaii
29
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Constitution does not grant the counties authority to restrict
or expand the tax court’s jurisdiction. This authority is
reserved to the State as a function of the legislative power to
enact laws of statewide concern. Thus, the City does not have
the constitutional authority to negate via ordinance the
statutory weekend rule as it applies to the tax court’s
jurisdiction, and KV’s Notices of Appeal were therefore timely
filed.28
V. CONCLUSION
Based on the foregoing, the tax court’s May 30, 2017
order granting the City Council of the City and County of
Honolulu’s motion to dismiss or in the alternative, motion for
28
It is noted that if this court interpreted article VIII, section
3 of the Hawaii Constitution to grant counties control over the procedure of
the tax court, such an interpretation would require the state tax court to
potentially have four sets of internal procedures to govern each county’s
appeals. Any county could change its ordinances at any time, creating
procedural confusion in the court and requiring the tax court to interpret
county ordinances that would control state court procedural rules. This
would be contrary to the statewide jurisdiction of the tax court and this
court’s authority to make rules relating to the tax court’s procedure
pursuant to HRS § 232-14 and article VI, section 7 of the Hawaii
Constitution.
Additionally, if, as the City purports, the “functions, powers
and duties relating to the taxation of real property” conferred on the
counties included those related to the tax court, then the “functions, powers
and duties” of the tax court could only be exercised “exclusively” by the
counties. Thus, the tax court could not function in accordance with HRS
Chapter 232, the Rules of the Tax Court, and other applicable rules
promulgated by this court. Further, the historical use of the tax court as a
forum for appeals of real property tax assessments would be unconstitutional
because the functions, powers, and duties of the tax court were not
“exclusively” exercised by the counties. This court construes legislation to
avoid illogical, impractical, and absurd results. See Morgan v. Planning
Dep’t, Cty. of Kauai, 104 Hawaii 173, 185, 86 P.3d 982, 994 (2004).
30
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summary judgment is vacated, and the case is remanded to the tax
court for further proceedings to consider the merits of the tax
assessment appeals.
Frederick W. Rohlfing III /s/ Mark E. Recktenwald
Nancy J. Youngren
Lisa K. Johnson /s/ Paula A. Nakayama
for petitioner
/s/ Sabrina S. McKenna
Lee M. Agsalud
Karen K. Lee /s/ Richard W. Pollack
for respondent
/s/ Michael D. Wilson
Clyde J. Wadsworth
Ewan C. Rayner
for amicus curiae,
State of Hawaii
31