No. SCAP-17-0000816, Tuesday, December 18, 2018, 11:15 a.m.

In the Matter of the Tax Appeal of KAHEAWA WIND POWER, LLC, and KAHEAWA WIND POWER II, LLC, Taxpayers-Appellants-Appellees, vs. COUNTY OF MAUI, Appellee-Appellant. In the Matter of the Tax Appeal of AUWAHI WIND ENERGY LLC, Taxpayer-Appellant-Appellee, vs. COUNTY OF MAUI, Appellee-Appellant.

The above-captioned case has been set for argument on the merits at:

Supreme Court Courtroom
Ali iolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

Attorneys for appellant County of Maui:

Patrick K. Wong, Corporation Counsel; Brian A. Bilberry, Deputy Corporation Counsel

Attorney for appellees Kaheawa Wind Power, LLC, and Kaheawa Wind Power II, LLC:

Ronald I. Heller of Torkildson Katz Hetherington Harris & Knorek

Attorneys for appellee Auwahi Wind Energy LLC:

Vito Galati and Christopher T. Goodin of Cades Schutte LLP

NOTE: Order granting Application for Transfer, filed 06/15/18.

COURT: MER, C.J., PAN, SSM, RWP, and MDW, JJ.

[  Listen to the entire audio recording in mp3 format  ]

Brief Description:

Appellant County of Maui (County) challenges the tax appeal court’s (TAC) 2017 summary judgment orders and final judgment, which conclude that the County exceeded its taxation authority under the Hawai i State Constitution when it amended Maui County Code (MCC) § 3.48.005 to define the term “real property” to include wind turbines for taxation purposes.

In Kaheawa Wind Power, LLC v. County of Maui, the ICA held that under the then-existing MCC, wind turbines did not qualify as “real property” for taxation purposes. 135 Hawai i 202, 346 P.3d 632 (2014) (cert. denied, 2015 WL 745424 (Feb. 19, 2015)). In response, the County amended MCC § 3.48.005 by redefining “real property” to include wind turbines.

Pursuant to the amended code, the County started including wind turbines in the “building value” for real property taxes assessed to the Appellee-taxpayers Kaheawa Wind Power, LLC, Kaheawa Wind Power II, LLC, and Auwahi Wind Energy LLC. The Appellee-taxpayers appealed to the TAC, which issued summary judgment orders and a final judgment in their favor.

The TAC held that the County, by amending MCC § 3.48.005, exceeded its authority under article VIII, section 3 of the Hawai i State Constitution. In response, the County filed five separate appeals with the ICA (consolidated under CAAP-17-816) and filed an application for transfer, which this court granted.

The County argues the following:

(1) The TAC erred in concluding that article VIII, section 3, did not transfer policymaking authority to the counties for purposes of real property taxation;

(2) The TAC erred in concluding that article VIII, section 3, restricts counties from defining and/or identifying the types of property which may be included as realty for purposes of real property taxation;

(3) The ICA’s Kaheawa decision does not hold that wind turbines are exclusively personal property which cannot be included as part of the underlying realty on which they are constructed and/or affixed; and

(4) There is no traditional common law, statutory, and/or constitutional definition of “personal property” in Hawai i which precludes any type of property from becoming an accession to realty pursuant to appraisal concepts of use, utility, and value.