STAND. COM. REP. NO. 1186
Honolulu, Hawaii
, 2001
RE: H.B. No. 1074
H.D. 2
S.D. 1
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committee on Agriculture, to which was referred H.B. No. 1074, H.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO DROUGHT MITIGATING FACILITIES,"
begs leave to report as follows:
The purpose of this measure is to allow an income tax credit for agricultural infrastructure investments and for drought mitigation water storage facilities.
Your Committee received testimony in favor of this measure from the Mayor and four council members of Maui County, Hawaii Farm Bureau Federation, Maui County Farm Bureau, Big Island Farm Bureau, Hawaii Agriculture Research Center, and Pineapple Growers Association of Hawaii. Comments were received from the Tax Foundation of Hawaii. The Department of Agriculture deferred to the opposing testimony of the Department of Taxation. The Department of Budget and Finance also submitted opposing testimony.
Your Committee finds that ranchers and farmers suffer economically during times of drought which, in turn, burdens the overall economy. Water storage facilities allow farmers and ranchers to store additional water during times of abundant rainfall and use it during times of drought, thus lessening the impact of a drought on the economy. This measure provides an incentive for the establishment of water storage facilities.
Your Committee has been aware of the commendable collaborative efforts by the Department of Taxation and other parties to refine the tax credit provided by this measure. Thus, your Committee has amended this measure by replacing its contents with the draft resulting from those efforts which:
(1) Allows a tax credit of four per cent of the costs paid for the construction, repair, or reconstruction of a qualified water storage facility after December 31, 2000, but excluding amounts received through grant or subsidy from any federal or state government;
(2) Defines "qualified water storage facility" as a water storage facility that is part of a conservation plan approved by the local soil and water conservation district;
(3) Ensures that the amount of the tax credit may only be claimed once for tax credit or depreciation purposes;
(4) Provides that if the tax credit exceeds the taxpayer's tax liability, the excess credits will be refunded to the taxpayer; and
(5) Provides that the tax credit is available after December 31, 2000, and until December 31, 2005.
As affirmed by the record of votes of the members of your Committee on Agriculture that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1074, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1074, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Agriculture,
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____________________________ JAN YAGI BUEN, Chair |
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