§53-38  Tax exemption.  Where and so
long as the major portion of a redevelopment project of a redevelopment
corporation is composed of residential units and the rents for the residential
units are reasonable as compared with prevailing rental levels for comparable
accommodations, the land and improvements in the project shall be exempted (1)
for ten years from the date of acquisition of such project by the redevelopment
corporation, from real property taxes, other than assessments for local
improvements in excess of the total real property taxes paid upon the land and
improvements for the year prior to the commencement of proceedings by the
agency for the acquisition of the lands and improvements; and (2) for the next
succeeding fifteen-year period following such ten-year period, from real
property taxes on fifty per cent of the assessed valuation of the property and
improvements; provided that:



(A) Where the cost of acquisition of the land and
improvements in the redevelopment project by the redevelopment corporation is
at least ninety per cent of the cost of acquisition, clearing and improvement
of the land and improvements by the redevelopment agency, the tax exemption
granted under clause (1) of this section shall be for fifteen years from the
date of acquisition of the project by the redevelopment corporation, with no
further exemption thereafter, except that, if the net earnings from the project
for the last five of the fifteen-year period, above expenses, taxes,
assessments, and depreciation or amortization (as provided in section 53-27),
available for payment of interest and dividends, shall be less than three per
cent of the total actual final cost of the project (as defined by [paragraph]
(2) of section 53-32), then the tax exemption granted under this proviso (A)
shall be extended for an additional ten years; and



(B) No such tax exemption shall be allowed for any
land and improvements which are used for commercial, industrial, or any other
nonresidential purposes. [L 1949, c 379, §21; am L 1951, c 244, §9; am L 1955,
c 271, §1(m); RL 1955, §143-37; am L 1959, c 44, §6; HRS §53-38]