Allows an income tax credit of 4 per cent for construction of a new drought mitigating water storage facility, or repair or reconstruction of existing water storage facility. (HB1074 HD2)

A BILL FOR AN ACT

SECTION 1. The legislature finds that farmers and ranchers during periods of drought suffer from loss of crops and livestock. This results in losses, which often takes farmers and ranchers years to recover from, resulting in loss of income and jobs for hired workers, loss of business for agricultural suppliers, and loss of tax revenues. These losses can be minimized by the construction of water storage facilities to alleviate water problems during times of drought.

The purpose of this Act is to provide an income tax credit for the construction of drought mitigating water storage facilities.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Drought mitigating water storage facility; income tax credit. (a) There shall be allowed to each taxpayer, subject to the taxes imposed by this chapter, for the construction of a new water storage facility or repair or reconstruction of an existing water storage facility necessary for drought mitigation purposes, an income tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. The tax credit shall be an amount equal to four per cent of the cost paid by the taxpayer for construction of the new water storage facility or repair or reconstruction of an existing water storage facility for the taxable year in which the water storage facility was constructed.

(b) All claims, including any amended claims, for tax credits under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(c) As used in this section "water storage facility" means a water storage facility and associated infrastructure that is part of a conservation plan approved by the local soil and water conservation district."

SECTION 3. New statutory material is underscored.