THE SENATE

S.B. NO.

1393

TWENTY-SIXTH LEGISLATURE, 2011

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO AGRICULTURE.

 

 

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

 


     SECTION 1.  Chapter 205, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§205‑    Dams and reservoirs.  All dams and related reservoir areas designated as important agricultural lands shall be eligible for inclusion in the total acreage calculation for important agricultural lands and shall qualify for incentives pursuant to section 205-46; provided that dams and reservoirs classified as important agricultural lands shall not be included in the total acreage calculation for a petition for declaratory order to designate important agricultural lands in combination with the reclassification of agricultural lands to the rural, urban or conservation district."

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

     "§235-A  Dam or reservoir remediation tax credit.  (a)  There shall be allowed to each taxpayer subject to the tax imposed by this chapter, a credit for remediation of dams or reservoirs as directed by the department of land and natural resources, 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.

     (b)  The amount of the credit determined under this section for the taxable year shall be equal to seventy-five per cent of the cost of all remediation measures taken as directed by the department of land and natural resources.

     (c)  For purposes of this section:

     "Dam" has the same meaning as in section 179D-3.

     "Remediation" means any work performed or measures as directed by the department of land and natural resources; provided that remediation shall not include any measures taken pursuant to an order issued pursuant to section 179D-24(f).

     "Reservoir" has the same meaning as in section 179D-3.

     (d)  The following costs and expenses are ineligible to be claimed for this credit:

     (1)  Costs recoverable by the department of land and natural resources pursuant to subsection 179D-24(c) for emergency measures taken by the department to protect life or property;

     (2)  Attorney's fees recoverable by the department of land and natural resources pursuant to subsection 179D‑24(d); and

     (3)  Costs incurred in complying with an order of the department of land and natural resources issued pursuant to subsection 179D-24(f), regardless of whether the taxpayer is ultimately successful in any challenge to that order.

     (e)  A successor landowner of a remediated dam or reservoir subject to this section shall not be eligible to claim the tax credit allowed by this section.

     (f)  The credit allowed under this section shall be claimed against net income tax liability for the taxable year.  A tax credit under this section that exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     (g)  All claims for tax credits under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credits may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

     (h)  No deduction shall be allowed for that portion of the cost of remediation paid or incurred for the taxable year that is equal to the amount of the credit determined under this section.

     (i)  The director of taxation may adopt any rules under chapter 91 and forms necessary to carry out this section.

     §235-B  Aquacultural facilities tax credit.  (a)  There shall be allowed to each taxpayer subject to the tax imposed by this chapter, a credit for the cost of capital investments in aquacultural facilities, 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.

     (b)  The amount of the credit determined under this section for the taxable year shall be equal to twenty-five per cent of the amount of capital investments in aquacultural facilities.

     (c)  For purposes of this section:

     "Aquacultural facilities" means infrastructure used in the propagation, cultivation, or farming of aquatic plants and animals in controlled or selected environments for commercial purposes or authorized stock enhancement purposes including hatcheries; on-shore and off-shore farms including ponds and off shore cages or nets; harvesting facilities; and processing facilities.

     (d)  A successor owner of aquacultural facilities subject to this section shall not be eligible to claim the tax credit allowed by this section.

     (e)  The credit allowed under this section shall be claimed against net income tax liability for the taxable year.  A tax credit under this section that exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     (f)  All claims for tax credits under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credits may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

     (g)  No deduction shall be allowed for that portion of the capital investment paid or incurred for the taxable year that is equal to the amount of the credit determined under this section.

     (h)  The director of taxation may adopt any rules under chapter 91 and forms necessary to carry out this section.

     SECTION 3.  Chapter 200, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§200-    Priority for aquacultural activities.  (a)  At all harbors and waterfront improvements belonging to or controlled by the State, aquacultural enterprises shall have priority of access over leisure crafts and houseboats; provided that this section shall not apply to commercial harbors of the State. 

     (b)  For purposes of this section, "aquacultural enterprises" means persons or entities actively engaged in the propagation, cultivation, or farming of aquatic plants and animals in controlled or selected environments for commercial purposes, including stock enhancement."

     SECTION 4. Section 201-1, Hawaii Revised Statutes, is amended by amending the definition of "agriculture" to read as follows:

     ""Agriculture" and "agricultural" mean the planting, cultivating, and harvesting of crops[,] or aquatic life, including [those so] crops and aquatic life that are planted, cultivated, and harvested for food, ornamental, grazing, or forest purposes[.  Once the]; provided that once crops or aquatic life are harvested and transported to a point of distribution, they cease to be agricultural [in the terms] for purposes of this part."

     SECTION 5.  Section 237-24.75, Hawaii Revised Statutes, is amended to read as follows:

     "§237-24.75  Additional exemptions.  In addition to the amounts exempt under section 237-24, this chapter shall not apply to:

     (1)  Amounts received as a beverage container deposit collected under chapter 342G, part VIII;

     (2)  Amounts received by the operator of the Hawaii convention center for reimbursement of costs or advances made pursuant to a contract with the Hawaii tourism authority under section 201B‑7[[]; [and

   [](3)  Amounts received[]] by a professional employment organization from a client company equal to amounts that are disbursed by the professional employment organization for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick leave, health benefits, and similar employment benefits with respect to assigned employees at a client company; provided that this exemption shall not apply to a professional employment organization upon failure of the professional employment organization to collect, account for, and pay over any income tax withholding for assigned employees or any federal or state taxes for which the professional employment organization is responsible.  As used in this paragraph, "professional employment organization", "client company", and "assigned employee" shall have the meanings provided in section 373K-1[.]; and

     (4)  Amounts received for the wholesale or retail business conducted by a qualified agricultural food processing facility, during the first five years of its operation."

     SECTION 6.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect on July 1, 2011.

 



 

Report Title:

Agriculture; Aquaculture; Tax Credits

 

Description:

Provides that dams and related reservoir areas designated as important agricultural lands shall be included in the total area calculation for important agricultural lands. Provides tax credits and exemptions for dam and reservoir remediation and aquacultural facilities.  Grants priority to aquacultural activities at non-commercial state-owned harbors.  (SD1)

 

 

 

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