Report Title:

Taxation; lead contamination

Description:

Provides a tax deduction for replacement of lead plumbing pipes. Provides a tax credit for purchase of pre-approved lead filtration system.

HOUSE OF REPRESENTATIVES

H.B. NO.

1355

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO TAXATION.

 

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

SECTION 1. Lead contamination of drinking water continues to pose a problem for older communities. One of the main sources of lead contamination of drinking water is the leaching of lead from house plumbing. New home builders generally use copper pipes for plumbing purposes, but such was not the case years ago and many older homes in the state still have lead plumbing.

Treatments of high levels of lead in drinking water have met with mixed success. In some communities, treatment with other additives remedies the lead situation. In others, such as the case of upcountry Maui, the chemicals used for treating lead contamination appear to cause health problems. While lead does come from sources other than old lead plumbing pipes, leaching from lead plumbing is the greatest source of drinking water contamination. It is also the easiest situation to remedy. The purpose of this Act is to enact tax incentives for residents with lead plumbing pipes who seek to remedy the problem through replacement or pre-approved lead filtration systems.

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

"§235- Deduction; lead pipe replacement. (a) In addition to the deductions allowed under section 235-7, in computing taxable income, there shall be allowed as a deduction from gross income any amounts that are used by any state resident for the replacement of lead plumbing pipes with plumbing pipes not made of lead. The total amount of the aggregate allowable deduction shall equal the cost of the replacement.

(b) A taxpayer that qualifies for the deduction may claim up to a maximum of $2,500 for the taxable year in which the taxpayer incurred the cost of replacing their lead plumbing pipes. The excess of the deduction may be deducted from the taxpayer's gross income, up to $2,500, in subsequent years until exhausted.

(c) Every claim, including amended claims, for a tax deduction 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 deduction may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(d) No taxpayer that claims a deduction under this section shall claim any other deduction for the same qualified costs under any chapter.

(e) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for deduction made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91. The tax deduction allowed under this section shall be available for taxpayers who replace lead plumbing pipes with plumbing pipes not made of lead to remedy an existing residential lead poisoning problem."

SECTION 3. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Pre-approved lead filtration systems. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income tax credit which shall be deductible from 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 aggregate amount of the credit allowed shall be equal to the purchase cost of one pre-approved lead filtration system.

(b) A taxpayer that qualifies for the credit may claim up to a maximum of $500 for the taxable year in which the taxpayer incurred the cost of the pre-approved lead filtration system. The excess of the credit may be deducted from the taxpayer's tax liability in subsequent years until exhausted.

(c) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credits over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1. All claims, including any amended claims, for tax credits 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 credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(d) The tax credit allowed under this section shall be available for taxpayers that purchase and install a pre-approved lead filtration system to remedy an existing residential lead poisoning problem and shall be allowed for only one system.

(e) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91. The director of taxation shall incorporate rules relating to testing criteria and standards to determine lead poisoning promulgated by the department of health in effectuating the purposes of this section pursuant to chapter 91. The director of health shall adopt rules with respect to pre-approved lead filtration systems and the director of taxation shall incorporate those rules for purposes of effectuating this section pursuant to chapter 91."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2003.

 

INTRODUCED BY:

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