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

(A) Where the cost of acquisition of the land andimprovements in the redevelopment project by the redevelopment corporation isat least ninety per cent of the cost of acquisition, clearing and improvementof the land and improvements by the redevelopment agency, the tax exemptiongranted under clause (1) of this section shall be for fifteen years from thedate of acquisition of the project by the redevelopment corporation, with nofurther exemption thereafter, except that, if the net earnings from the projectfor 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 percent 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 anyland and improvements which are used for commercial, industrial, or any othernonresidential 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]