SB3156

SECTION 1. The legislature finds that farmers and ranchers during periods of drought suffer from crop and livestock losses that often require years to recover. Crop and livestock losses affect not only their income, but also have ancillary economic repercussions for hired workers, agricultural suppliers, and state 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 mitigation 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 mitigation tax credit. (a) There shall be allowed to each individual taxpayer who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or state income tax purposes, a drought mitigation tax credit that shall be deductible from the eligible taxpayer's net income tax liability imposed by this chapter for the taxable year in which the tax credit is properly claimed.

(b) The tax credit shall be an amount equal to fifty per cent of the cost paid by the taxpayer for the construction of a new water storage facility or repair or reconstruction of an existing water storage facility necessary for drought mitigation purposes; provided that the tax credit per taxpayer shall not exceed $ .

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

(d) To qualify for the tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(e) If the tax credit under this section exceeds the taxpayer's net income tax liability, the amount of the excess tax credit shall be paid to the eligible taxpayer; provided that no refund or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.

(f) Every claim, including amended claims, for the tax credit 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 tax credit may be claimed. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

(g) The director of taxation:

(1) Shall prepare forms as may be necessary to claim a tax credit under this section;

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

(3) May adopt rules pursuant to chapter 91 to effectuate the purposes of this section."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2009 and shall be repealed on December 31, 2015.

INTRODUCED BY:

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THE SENATE	S.B. NO.	3156
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII