§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]