Water Conserv; Tax Credits

Creates a water conservation tax credit for investment in water
conservation facilities or devices.

THE SENATE                              S.B. NO.           72
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The purpose of this Act is to provide income tax
 2 credits to offset taxpayers' capital expenditures made to develop
 3 water conservation facilities and devices.
 4      SECTION 2.  Chapter 235, Hawaii Revised Statutes, is amended
 5 by adding a new section to be appropriately designated and to
 6 read as follows:
 7      "235-    Water conservation; income tax credit.  (a)  For
 8 taxable years beginning on or after January 1, 2000, each
 9 individual and corporate resident taxpayer that files an
10 individual or corporate net income tax return for a taxable year,
11 may claim a tax credit under this section against the Hawaii
12 state individual or corporate net income tax.  The tax credit may
13 be claimed for any water conservation facility or device or any
14 qualified water conservation investment property in an amount not
15 to exceed ten per cent of the total cost of the water
16 conservation facility or device; provided that the tax credit
17 shall apply only to the actual cost of the water conservation
18 facility or device and shall not include the cost of consumer-
19 incentive premiums unrelated to the operation of the water

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                                     S.B. NO.           72

 1 conservation facility or device.  The credit shall be claimed
 2 against net income tax liability for the year in which the water
 3 conservation facility or device was purchased and placed in use;
 4 provided that the tax credit shall be applicable only with
 5 respect to water conservation facilities or devices that are
 6 erected and placed in service after December 31, 1999.  Tax
 7 credits that exceed the taxpayer's income tax liability may be
 8 used as a credit against the taxpayer's income tax liability in
 9 subsequent years until exhausted.
10      (b)  As used in this section, "water conservation facility
11 or device" means any new or modified facility, building,
12 machinery, or equipment used in the water conservation process
13 resulting in a minimum ten per cent reduction by relinquishment
14 or transfer of annual permitted water usage from existing
15 groundwater sources.
16      (c)  The director of taxation shall prepare such forms as
17 may be necessary to claim a credit under this section.  The
18 director may also require the taxpayer to furnish reasonable
19 information to ascertain the validity of the claim for credit
20 made under this section and may adopt rules necessary to
21 effectuate the purposes of this section pursuant to chapter 91."
22      SECTION 3.  New statutory material is underscored.

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                                     S.B. NO.           72

 1      SECTION 4.  This Act, upon its approval, shall apply to
 2 taxable years beginning after December 31, 1998.
 4                           INTRODUCED BY:  _______________________