HOUSE OF REPRESENTATIVES

H.B. NO.

1394

TWENTY-SEVENTH LEGISLATURE, 2013

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to groundwater recharge.

 

 

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

 


     SECTION 1.  The legislature finds that the amount of recharge to groundwater aquifers must be increased to meet rising water demands.  Groundwater recharge can only occur if water can penetrate the land surface.  The legislature also finds that businesses and agricultural operations can provide a public service by opting to maintain a permeable land surface where water can percolate down to groundwater aquifers.  By doing so, excess water that is not evaporated or taken up by vegetation becomes groundwater storage that will serve a future public good.  The legislature believes that businesses and agricultural operations should be compensated for such public service, and an incentive should be provided to encourage businesses and agricultural operations to incorporate the performance of ecological services into their business models.

     The purpose of this Act is to:

     (1)  Establish an income tax credit for taxpayers who maintain permeable surfaces on their property; and

     (2)  Permit the deduction of expenses incurred toward certification as an organic agricultural operation, or the determination of a qualifying property's net water infiltration.

     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  Permeable surfaces tax credit.  (a)  There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income tax credit that 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.

     For each qualifying property, the dollar amount of the permeable surfaces tax credit shall be equal to ten per cent of the value of the volume of water permitted to percolate into the groundwater aquifer, as determined by a geologist, hydrologist, soil agronomist, or related professional, based on the net water infiltration, the area of permeable surface available for groundwater recharge, and an average water utility rate determined by the public utilities commission.  This rate shall be double for:

     (1)  Operations actively irrigating with reclaimed wastewater, gray water, or brackish water;

     (2)  Business or agricultural operations operating in an area found to be under drought conditions; or

     (3)  Organic agricultural operations, as certified by the United States Department of Agriculture.

A taxpayer may claim this credit for each qualifying property.

     (b)  As used in this section:

     "Net water infiltration" means the amount of water that penetrates the ground surface, in excess of evaporation and plant consumption, per unit of time as determined by a geologist, hydrologist, soil agronomist, or related professional.

     "Organic agricultural operation" means any agricultural operation that has been certified as organic by the United States Department of Agriculture.

     "Permeable surface" means a ground surface that permits water to infiltrate at a rate in excess of 0.1 feet per day.

     "Qualifying property" means property where the taxpayer maintains permeable surfaces for the purpose of allowing water infiltration into aquifers; provided that the property:

     (1)  Is operated:

         (A)  For agricultural purposes; or

         (B)  For recreational purposes; and

     (2)  Comprises at least five acres.

     (c)  Each calendar year that the tax credit is claimed, the taxpayer shall provide information to the chairperson of the board of land and natural resources on the net water infiltration of the qualifying property.  This information shall be verified by a geologist, hydrologist, soil agronomist, or related professional.

     Upon verification of the information provided by the taxpayer, the department of land and natural resources shall issue a certificate to the taxpayer verifying the credit amount certified for each taxable year.  The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation.  Notwithstanding the department of land and natural resources' certification authority under this section, the director of taxation may audit and adjust certification to conform to the facts.

     (d)  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 this subsection shall constitute a waiver of the right to claim the credit.

     (e)  The director of taxation shall prepare 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 claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

     §235-B  Net water infiltration certification; tax deduction.  (a)  There shall be allowed as a deduction from gross income a dollar amount equal to the amount paid during the taxable year by a taxpayer to obtain:

     (1)  Certification of an organic agricultural operation; or

     (2)  A determination of the net water infiltration of a qualifying property's net water infiltration by a geologist, hydrologist, soil agronomist, or related professional;

provided that these amounts were paid for the purpose of claiming a tax credit under section 235-A.

     (b)  The director of taxation shall prepare any forms that may be necessary to claim a deduction under this section.  The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for a deduction made under this section and may adopt rules necessary to implement this section pursuant to chapter 91."

     SECTION 3.  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 4.  New statutory material is underscored.

     SECTION 5.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2012.

 

INTRODUCED BY:

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Report Title:

Permeable Surfaces; Water Infiltration; Tax Credit; Tax Deduction

 

Description:

Establishes an income tax credit for taxpayers who maintain permeable surfaces on their property.  Permits a taxpayer to deduct from state income taxes the costs of certifying an organic agricultural operation or determining a qualifying property's net water infiltration.

 

 

 

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