HOUSE OF REPRESENTATIVES

H.B. NO.

153

TWENTY-EIGHTH LEGISLATURE, 2015

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that the State's streams, groundwaters, and ocean are being harmed by water pollution from nonpoint contamination sources that flow off the land directly rather than through pipes or ditches.  A nonpoint contamination source of great concern are cesspools.  These substandard systems are essentially holes in the ground that discharge raw, untreated sewage.  Groundwaters, drinking water sources, streams, and the ocean are contaminated by cesspool pollution from systems that don't treat wastewater but merely dispose of the wastewater.

     The legislature further finds that the State's cesspools release approximately 55,000,000 gallons of untreated sewage into the ground each day.  There are approximately 90,000 cesspools in the State, with nearly 50,000 located on Hawaii island, approximately 14,000 on Kauai, over 12,000 on Maui, over 11,000 on Oahu, and over 1,400 on Molokai.  In response to the State's cesspool pollution problem, the department of health has proposed amending chapter 11-62, Hawaii Administrative Rules, to prohibit the installation of new cesspools and require that an existing cesspool be connected or upgraded to a septic system within one hundred eighty days after the sale of a property.  While these proposed changes may reduce water contamination, the changes will also impose substantial costs on private landowners.

     The purpose of this Act is to offer financial assistance to cesspool owners who connect or upgrade to septic systems by establishing a cesspool system upgrade or replacement income tax credit.

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

     "§235-    Individual wastewater system; cesspool system upgrade; income tax credit.  (a)  There shall be allowed to each taxpayer subject to the tax imposed by this chapter a cesspool system upgrade tax credit which shall be deductible against 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 may be claimed by any taxpayer who connects a cesspool system to a septic system during the taxable year or upgrades from a cesspool system by placing into service during the taxable year a septic system or a department of health-approved individual wastewater system.

     (b)  The amount of the tax credit shall be equal to the costs incurred by the taxpayer to connect or upgrade the individual's cesspool system to a septic system or a department of health-approved individual wastewater system, including purchase and installation costs.  There shall be allowed a maximum of one cesspool system upgrade income tax credit per cesspool system.

     (c)  For the purposes of this section:

     "Actual cost" means costs related to the upgraded wastewater system under subsection (a), including purchase, accessories, and installation.

     "Cesspool" means an individual wastewater system consisting of an excavation in the ground whose depth is greater than its widest surface dimension, which receives untreated wastewater, and retains or is designed to retain the organic matter and solids discharging therein, but permits the liquid to seep through its bottom or sides to gain access to the underground formation.

     "Individual wastewater system" means facilities, including cesspools, septic systems, and aerobic treatment units, that are not connected to a sewer and are used and designed to receive and dispose of no more than one thousand gallons per day of domestic wastewater or greater than one thousand gallons with a variance.

     "Septic system" means an individual wastewater system that usually consists of a septic tank, piping, and a drainage field where there is natural biological decontamination as it is filtered through soil.

     "Waste" means sewage, industrial and agricultural matter, and any other liquid, gaseous, or solid substance, including radioactive substance, whether or not treated, which may pollute or tend to pollute the waters of the State.

     "Wastewater" means any liquid waste, whether or not treated and whether animal, mineral, or vegetable, including agricultural, industrial, and thermal wastes.

     (d)  Credits which exceed the taxpayer's income tax liability for any taxable year shall be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     (e)  The director of taxation shall prepare such forms as may be necessary to claim a tax credit under this section.  The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91."

     SECTION 3.  Section 321-27, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  Any amount in the fund in excess of $1,500,000 on June 30 of each year shall [be deposited into the general fund.] fund the cesspool system upgrade income tax credit established under section 235-  ."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2015, and shall be repealed on July 1, 2019.

 

INTRODUCED BY:

_____________________________

 

 

 

 

Report Title:

Department of Health; Cesspools; Septic Systems; Individual Wastewater Systems; Income Tax Credit; Sanitation and Environmental Health Special Fund

 

Description:

Establishes a cesspool system upgrade income tax credit for taxpayers who connect or upgrade a cesspool system to a septic system or any department of health-approved individual wastewater system; and requires any annual amount over $1,500,000, in the department of health's sanitation and environmental health special fund, be used to fund the cesspool system upgrade income tax credit rather than having the excess special fund moneys be deposited into the general fund.  Repeals July 1, 2019.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.