HB2857 HD1

SECTION 1. (a) There shall be allowed to each taxpayer in the upcountry Maui area and other areas in the twelfth representative district who are not claimed, or are otherwise eligible to be claimed, as a dependant by another taxpayer for federal or Hawaii state individual income tax purposes, who files an income tax return for a taxable year, a one-time nonrefundable tax credit that shall be deducted from the taxpayer's net income tax liability imposed by chapter 235, Hawaii Revised Statutes.

(b) The amount of the nonrefundable tax credit shall be per cent of the losses incurred by the taxpayer for repairs, insurance, rental, or other expenses or costs related to the damage caused to the taxpayer's real or personal property in the upcountry Maui area and other affected areas in the twelfth representative district by the flood and wind storm of December of 2007, provided that:

(1) The expenses or costs are not reimbursed by insurance proceeds or disaster relief payments from government agencies or nonprofit organizations;

(2) The tax credit shall not exceed $ per taxpayer; and

(3) No refund or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.

(c) If the tax credit under this section exceeds the taxpayer's net income tax liability, any excess of the tax credit may be used as a credit against the taxpayer's income tax liability in subsequent taxable years until exhausted.

(d) If a deduction is taken under section 179 (with respect to election to expense certain depreciable businesses assets) of the Internal Revenue Code, no tax credit shall be allowed for that portion of the expenses for which the deduction is taken.

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. In the alternative, the taxpayer shall treat the amount of the credit allowable and claimed as a taxable income item for the taxable year in which it is properly recognized under the method of accounting used to compute taxable income.

(f) No taxpayer that claims the tax credit under this section shall claim any other credit for the same losses or other expenses or costs.

(g) Every claim, including amended claims, for the tax credit under this section shall be filed on or before December 31, 2008. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

(h) The director of taxation:

(1) Shall determine the applicability of this Act with respect to the boundaries and locations of flood and wind storm of December 2007 in the upcountry Maui area and other affected areas in the twelfth representative district that are subject to this Act;

(2) Shall prepare any forms as may be necessary to claim a tax credit under this Act;

(3) May require proof of the claim for the tax credit; and

(4) May adopt rules pursuant to chapter 91, Hawaii Revised Statutes, to effectuate the purposes of this Act.

SECTION 2. This Act shall take effect on July 1, 2050 and shall apply to taxable years beginning after December 31, 2007.

HOUSE OF REPRESENTATIVES	H.B. NO.	2857
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 1
STATE OF HAWAII