Opinion ID: 2518820
Heading Depth: 2
Heading Rank: 3

Heading: The County's Complaint and First Amended Complaint

Text: On October 25, 2004, the County Attorney, acting on behalf of the County, filed a Complaint for Declaratory Relief, captioned In Re Proposed Kauai Charter Amendment (the initial complaint), seeking a declaratory judgment that the proposed Charter Amendment, which would appear on the November 2, 2004 ballot, was void. The proposed Charter Amendment provided: AMENDMENT TO THE CHARTER OF THE COUNTY OF KAUA`I Shall the Kaua`i County Charter be amended by the addition of a new Article XXXI to read: ARTICLE XXXI. RESIDENT PROPERTY TAXES. Section 31.01. Resident Property Taxes. It is the policy of the County that resident taxpayers should be equitably protected when there are significantly rising real estate values and government costs. Therefore, for County residents who have owned and occupied their place of residence beginning in or before the fiscal year 1998-1999, then for the next fiscal year after the adoption of this section real property taxes with respect to such residence shall not exceed the amount of such tax assessed for the 1998-1999 fiscal year. For County residents acquiring their place of residence after the fiscal year 1998-1999 their real property taxes with respect to such residence for the next fiscal year after the adoption of this section shall not exceed the amount of tax assessed for the fiscal year the ownership and residence commences. For all such taxpayers in no fiscal year after the year in which the tax was restored to the amount in 1998-1999 or the year of acquisition, whichever is applicable, shall the percentage increase in real property tax with respect to such residence exceed the lesser of the percentage rate applicable at the commencement of such fiscal year for cost of living adjustments in retirement benefits by the Social Security Administration, or two percent (2%). Promptly following its adoption the County shall notify in writing all owners of residential property in its property tax records of the principal terms of this section. The County shall adopt such ordinances, laws, rules and regulations as are necessary to carry out and are consistent with the purpose of the foregoing policy and the terms of this section. (Capitalization and line breaks in original.) (Internal quotation marks omitted.) The proposed Charter Amendment, if adopted, would essentially decrease and limit real property taxes for county residents  a function that the County alleged was reserved to the County Council. The initial complaint alleged that the proposed Charter Amendment was void under the RCCK, violated the Hawai`i Constitution, and was otherwise void for vagueness. Two days later, on October 27, 2004, the County filed its motion for summary judgment (first motion for summary judgment). Concurrently, the County filed an ex parte motion for an order shortening time for the hearing on the first motion for summary judgment (motion to shorten time), attempting to have the legality of the Charter Amendment decided before the general election. The circuit court denied the motion to shorten time; however, it set the hearing on the first motion for summary judgement for November 22, 2004. [3] On November 10, 2004, the County filed its first amended complaint for declaratory relief, specifically naming the Defendants and seeking a declaratory judgment that the now-approved Charter Amendment was void. The first amended complaint sought both declaratory and injunctive relief and, like the initial complaint, alleged that the Charter Amendment: (1) violated article VIII, section 3 of the Hawai`i Constitution; (2) was void under article XXII, section 22.02, of the RCCK; and (3) was void for vagueness. Specifically, the first amended complaint alleged in pertinent part: 2. This [c]ourt has jurisdiction over the claims set forth in this complaint pursuant to [HRS] §§ 603-21.5 [(Supp.2004) [4] ], 603-23 [(Supp.2004), quoted infra,] and 632-1 [(1993), quoted infra ]. 3. This [c]ourt is authorized to order declaratory relief pursuant to HRS § 632-1 and Hawai`i Rules of Civil Procedure Rule 57. 4. Petitioner COUNTY at all times mentioned herein was and is a governmental entity duly organized and existing under and by virtue of the laws of the State of Hawai`i. Lani D.H. Nakazawa is the duly appointed County Attorney and has the authority, pursuant to HRS § 603-23 to bring this action. . . . . FACTUAL ALLEGATIONS . . . . 17. Although styled as an amendment to the Charter itself, the Charter Amendment is in fact an attempt to amend the existing ordinances of the County which govern the assessment of real property. This is prohibited by Section 22.02 of Article XXII of the Charter. . . . . 19. The Hawai`i State Constitution, Article VIII, section 3, reserves the taxing power to the State and delegates the real property tax function to the counties. An initiative cannot authorize, repeal, or otherwise affect the real property taxing power of the County because this power is reserved to the county government, and cannot be further delegated through an initiative. 20. The intent of Article VIII, section 3 of the Hawai`i State Constitution is specifically to delegate the real property tax function to the county councils because the county councils are in a better position to administer local affairs. 21. The Charter Amendment violates Article VIII, section 3 of the Hawai`i State Constitution. 22. HRS § 50-15 [(1993)] provides that there is expressly reserved to the State Legislature the power to enact all laws of general application through the State on matters relating to the fiscal powers of the counties (except as delegated to the counties), and neither a charter or ordinance adopted under a charter shall be in conflict therewith. 23. The Charter Amendment violates HRS § 50-15.[ [5] ] 24. Because the Charter Amendment is unconstitutional pursuant to the Hawai`i State Constitution and violates HRS § 50-[15], the County seeks an appropriate declaratory judgment determining the proposed Charter Amendment to be invalid. (Emphasis in original.)