SB2252

SECTION 1. The legislature finds that many native plant species are at risk of extinction. The legislature further finds that native plants sequester carbon, reduce erosion, reestablish habitat for endangered species, mitigate threat of wildfire by removing fire-adapted invasive plants, and provide cultural benefits. The purpose of this Act is to promote these benefits by encouraging taxpayers to engage in reforestation using plants native to Hawaii.

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

"§235- Native plant reforestation tax credit. (a) There shall be allowed to each individual taxpayer subject to the tax imposed by this chapter a native plant reforestation tax credit that 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.

(b) In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified expenses incurred by the entity for the taxable year. The expenses upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be pursuant to section 704(b) of the Internal Revenue Code.

(c) The native plant reforestation tax credit shall be equal to the lesser of $ , or per cent of the qualified expenses of the taxpayer in reforestation using native plants, as certified by the department of land and natural resources pursuant to subsection (e). The native plant reforestation tax credit shall be available only for the taxable year in which the taxpayer's qualified expenses are certified by the appropriate government agency.

(d) The total amount of tax credits allowed under this section shall not exceed $ for all taxpayers in any taxable year; provided that any taxpayer who is not eligible to claim the credit in a taxable year due to the $ cap having been met for that taxable year shall be eligible to claim the credit in the subsequent taxable year.

(e) The department of land and natural resources shall:

(1) Certify all qualified reforestation using native plants for the purposes of this section;

(2) Collect and maintain a record of all qualified expenses certified by an appropriate government agency for the taxable year; and

(3) Certify to each taxpayer the amount of credit the taxpayer may claim; provided that if, in any year, the annual amount of certified credits reaches $ in the aggregate, the department of land and natural resources shall immediately discontinue certifying credits and notify the department of taxation.

The chairperson of the board of land and natural resources may adopt rules under chapter 91 as necessary to implement the certification requirements under this section.

(f) The director of taxation:

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

(2) May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and

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

(g) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims for the tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year 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.

(h) For purposes of this section:

"Native plants" means any plants that are indigenous or endemic to Hawaii.

"Qualified expenses" means costs that are necessary and directly incurred by the taxpayer for reforestation using native plants, and that are certified as such by the appropriate government agency."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2018-2019 for reforestation using native plants on state and county lands.

The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2018.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2252
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII