The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1908-07-02

Their provided that when any real es-
tate or house is leased OF rented the
sum of eight years rental thereof shall
be the assessment value of such real
estate or house unless such valuation
shall be manifest4y unfair or unjust"
be repealed. The Section was passed
several years ago at a time when a
return of not less than 1212Go on capital
invested in real estate or houses was
deemed to be an ordinary and proper
return. Conditions have changed since
that time and SELDOM, if ever, is the
ejaculation of the value of the princi-
pal of the property from the income
based on that rate The exception
stated in the paragraph just quoted Is
Almost as broad as the rule itself. In
practical application the provision as
it now stands is valueless. 1t serves
no good pun pose and may in a few in
stances hinder the assessor in the APP
plication of a more equitable rule of
calculation. No such definite state
ment of a percentage to be used is nee
essary. There is no danger to a tax
payer or detriment to the Government
in emitting it. See Exhibit "a" Sec
ton &C., pages.
TAXATION OF LEASEHOLD INTER-
ESTS IN GOVERNMENT LANDS.
Section 2S3 of the Revised Laws pro-
vides as follows: For the purpose Of
taxation the value of general leases
hereafter executed shall be the value
of the fee of the real estate demised,
and the lessees shall be assessed there's
on accordingly such leases shall be
void upon default In the payment OF
taxes thereon for sixty days after such
taxes have become delinquent" From
taxpayers the suggestion has come
to be found in paragraphs marked 2
sumably on the ground that the rule
there stated presCribes an untrue
standard OF measurement of the value
of the leasehold interest in such lands.
The Section is a part of Chapter % Of
the Revised Laws. which chapter deals
with the subject of public lands gen.
orally and in particular With the sale.
lease and other disposition of such
lands. While the language used in
Section 2S3 is somewhat unfortunate.
it seems to be beyond doubt that the
object of the Legislature in inserting
the Section was to provide that as q
part of the consideration for the use
of the land under such leases the lessee
should pay the taxes on the whole
value of the fee; and when a lessee &C
| cepts lease under the provisions OF
that chapter and with the condition
contemplated by Section 2S3 inserted
he does so with the knowledge and up
on the understanding that as a part OF
l. % L.
| is to pay certain taxes or additional
rent, whichever it may be called. meas
ured by the value of the fee There is
no unfairness in asking the lessee af-
ter the execution of the lease to pay
taxes so measured. Moreover. the Or
ganic Act in Section 70 prescribes
that the laws of Hawaii relating to
public lands shall continue
in force until Congress shaN otherwise
provide" Section 2S3 Is part of those
laws and prescribes one OF the condi-
tions to be attached to leases granted
hereunder. It is not within the power
OF the Legislature to repeal the Sec
ton. For al of these reasons the Com
mission does not recommend the re-
neal of the Section.
BASIS OF VALUATION FOR PROP
ERTY TAX.
The Merchants Association of Ho-
nolulu has asked of the Commission
that it recommend certain amend
ments in the matter of the standard of
valuation of certain classes of prop
erty the sections which that body has
proposed for incorporation in the law
being set out in Exhibit &c" hereto
attached and made a part hereof, The
| essence of the proposed changes is to
to be found in paragraph marked
and giving the proposed definition Of
cash value" The Commission is of
the opinion that to adopt the change
thus suggested would be a step back
ward. The definition proposed is too
| limited and will be found insufficient
in many cases. In all cases where
there are no "actual sales of property
of like value made during the previous
twelve months within the vicinity of
property assessed" or sales of prop
erty of a similar character" the par
| ties, assessor and assessed alike. will
be left without any prescribed stand
ard OF measurement of the valuation
to be fixed. Again, the definition sup
poses factor as known which in truth
is just as open to doubt as the value
OF the particular property then under
consideration. This it does when it
refers to property "of like value" the
actual sales of which may be consid-
cred in fixing the assessment in con-
troVersy. Still further, actual sales
are not necessarily a true guide. Such
sales are some ines influenced by ex-
traordinary circumstances, such as the
present necessity of the seller or a
lack of advertising which could not be
held to apply to the case of any par
ticular piece of property under con-
sideration. The standard now pres
cribed by the statutes is, as it seems
to the Commission, more definite and
more satisfactory. The existing pro-
visions of the law in this respect have,
moreover, been repeatedly construed
by the Supreme Court of the Territory.
and there is now practically no excuse
for not understanding their meaning.
To substitute a new standard now such
as that proposed by the Association
would, in addition to the other Ohiep-