Establishes incentives to develop additional redemption centers for the deposit beverage container redemption program, including a tax credit applicable to redemption centers in retail food stores and a grant program administered by the Department of Health. (SB212 HD2)

A BILL FOR AN ACT

SECTION 1. In 2002, the legislature established the deposit beverage container program under Act 176, Session Laws of Hawaii 2002, recognizing that recycling is an important element of the integrated solid waste management system that helps to protect and preserve environmental resources and reduce economic costs to residents and businesses within the State.

Since Act 176 was enacted, public participation in the deposit beverage container program has been minimal with the department of health reporting in early 2005 that:

One of the primary factors causing low participation rates is the inadequate number of redemption centers. Few and far between, redemption centers are inconvenient for many people and waiting times at the redemption centers are long.

The legislature finds that given the continued need to conserve our valuable resources, save dwindling landfill space, and promote active conservation, it is imperative that the State provide incentives to encourage the quick development of additional redemption centers to improve the convenience of redeeming deposit beverage containers for the public and other participants, including schools, non-profit, and for profit organizations.

The purpose of this Act is to:

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

"§235- Deposit beverage container redemption center tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, a deposit beverage container redemption center 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 qualifying costs were incurred and paid; provided that:

(b) The maximum allowed tax credit shall be $ for qualifying costs incurred and paid by the taxpayer during the taxable year to place a deposit beverage container redemption center in service. Each taxpayer shall be entitled to a single tax credit for each deposit beverage container redemption center that is placed in service by the taxpayer during the taxable year.

(c) The basis of eligible property for depreciation or accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed.

(d) The credit allowed under this section shall be claimed against the taxpayer's net income tax liability for the taxable year.

(e) If the tax credit under this section exceeds the taxpayer's net income tax liability, the excess of the credits over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1. All claims, including any amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable years 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.

(f) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purpose of this section pursuant to chapter 91.

(g) The credit allowed under this section shall be available for taxable years beginning after December 31, 2004, and shall not be available for taxable years beginning after December 31, 2005.

(h) As used in this section:

"Net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.

"Qualifying costs" means the actual costs incurred and paid by the taxpayer before December 31, 2005, for the purchase, lease, or operation of a deposit beverage container redemption center that is located in a retail store; provided that "qualifying costs" shall not include amounts received through a grant or subsidy from the federal or state government.

"Redemption center" means an operation as defined in section 342G-101 and includes an operation that operates reverse vending machines as defined in section 342G-101.

"Retail store" means a food or grocery store, organized for retailing goods in this state that:

(1) Is more than ten thousand square feet in area; and

SECTION 3. Chapter 342G, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§342G- Redemption center grant program. (a) The department shall develop and implement a grant program to assist organizations in establishing redemption centers; provided that:

(b) The director shall submit a report to the legislature on the redemption center grant program no later than twenty days prior to the convening of each legislative session, starting with the regular session of 2006."

SECTION 4. Section 342G-104, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Moneys in the deposit beverage container deposit special fund shall be used to reimburse refund values [and], pay handling fees to redemption centers[.], fund the deposit beverage container redemption center tax credit established under section 235- , and fund the redemption center grant program established by section 342G- . The department may also use the money to:

SECTION 5. There is appropriated out of the deposit beverage container deposit special fund the sum of $ or so much thereof as may be necessary for fiscal year 2005-2006 and the sum of $ or so much thereof as may be necessary for fiscal year 2006-2007 for the purposes of this Act.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2010; provided that section 5 shall take effect on July 1, 2010.