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THE SENATE |
S.B. NO. |
547 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO WATER CONSERVATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
Accordingly, the purpose of this Act is to encourage the installation and use of gray water recycling systems and atmospheric water generators in the State.
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Water conservation income tax credit. (a)
There shall be allowed to each taxpayer subject to the tax imposed by
this chapter, a water conservation 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.
(b)
In the case of a partnership, S corporation, estate, or trust, the tax
credit allowable shall be as provided under subsection (c) for the taxable
year. The cost upon which the credit is
computed shall be determined at the entity level. Distribution and share of the credit shall be
determined pursuant to administrative rule. If a deduction is taken under section 179
(with respect to election to expense depreciable business assets) of the
Internal Revenue Code, no tax credit shall be allowed for that portion of the
qualified expense for which the deduction is taken.
(c)
The amount of the tax credit shall be equal to:
(2) For
each commercial property in which an NSF/ANSI 350‑certified gray water
recycling system or an atmospheric water generator that meets NSF P343 test
results and component standards is installed and placed in service, twenty per
cent of the cost of the installation or $50,000, whichever is less.
(d)
Notwithstanding subsection (c), a low-income homeowner who installs and
places in service an NSF/ANSI 350-certified gray water recycling system or an
atmospheric water generator that meets NSF P343 test results and component
standards may qualify for a tax credit of thirty-five per cent of the cost of the
installation or $12,500, whichever is less.
(e)
Beginning July 1, 2028, only atmospheric water generators that are fully
NSF P343-certified shall be eligible for tax credits under this section.
(f)
If the tax credit under this section exceeds the taxpayer's net 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;
provided that no credit forward may be claimed more than five years after the
initial claim for credit is made under this section.
(g)
The director of taxation shall:
(1) Prepare any forms necessary to claim a credit under this section;
(2) Require
the taxpayer to furnish reasonable information to ascertain the validity of the
claim for credit made under this section; and
(3) Adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this section.
(h)
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 in which the water conservation system is placed in
service. Failure to comply with this
provision shall constitute a waiver of the right to claim the credit.
(i)
For the purposes of this section:
"Atmospheric water generator"
means a device that extracts water from ambient air humidity.
"Area median income" means the
median income for each of the counties of Honolulu, Hawaii, Maui, and Kauai as
determined by the United States Department of Housing and Urban Development,
from time to time, and as adjusted by family size.
"Gray water" shall have the
same meaning as defined in section 342D-1.
"Low-income
homeowner" means a person with an ownership interest in the property
who resides at the property as their principal residence and whose adjusted
gross income is eighty per cent or less of the area median income.
"NSF/ANSI
350-certified" means certified to meet the National Sanitation
Foundation/American National Standards Institute 350 certification for onsite
residential and commercial water reuse treatment systems.
"NSF/ANSI
350-certified gray water recycling system effluent" means effluent
from an NSF/ANSI 350-certified gray water recycling system that is used only for
subsurface disposal or subsurface irrigation in compliance with department of
health rules and recycle or reuse water guidelines.
"NSF P343" means the National
Sanitation Foundation Protocol P343 - health and sanitation requirements for
atmospheric water generators.
"NSF P343-certified" means
certified to meet NSF P343 for atmospheric water generators.
"Water conservation system"
means an NSF/ANSI 350-certified gray water recycling system or an atmospheric
water generator that meets NSF P343 test results and component standards."
SECTION 3. (a) The department of business, economic development, and tourism shall establish a rebate program to incentivize the installation of gray water recycling systems and atmospheric water generators.
(b) Rebates shall be awarded as follows:
(1) For each residential property in which an NSF/ANSI 350 certified gray water recycling system or an atmospheric water generator that meets NSF P343 test results and component standards is installed and placed in service, thirty per cent of the cost of the installation or $7,500, whichever is less; and
(2) For each commercial property in which an NSF/ANSI 350‑certified gray water recycling system or an atmospheric water generator that meets NSF P343 test results and component standards is installed and placed in service, twenty-five per cent of the cost of the installation or $35,000, whichever is less.
(c) A low-income homeowner who installs and places in service an NSF/ANSI 350-certified gray water recycling system or an atmospheric water generator that meets NSF P343 test results and component standards may qualify for a rebate of forty per cent of the cost of the installation or $10,000, whichever is less.
(d) Beginning July 1, 2028, only atmospheric water generators that are fully NSF P343-certified shall be eligible for rebates under this section.
(e) The department of business, economic development, and tourism shall adopt rules pursuant to chapter 91 necessary to implement this section.
(f) For the purposes of this section, the definitions established in section 235- , Hawaii Revised Statutes, shall apply.
SECTION 4. (a) The state building code council shall adopt the International Association of Plumbing and Mechanical Officials' 2023 water efficiency and sanitation standard, incorporating provisions regulating the design, installation, and maintenance of gray water recycling systems and atmospheric water generators in the State.
(b) The state building code council shall adopt rules pursuant to chapter 91 necessary to implement this section.
SECTION 5. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2050; provided that section 2 shall apply to taxable years beginning after December 31, 2025.
Report Title:
DOTAX; DBEDT; Water Conservation; Water Conservation Income Tax Credit; Graywater Recycling Systems; Atmospheric Water Generators; Rebate Program; State Building Code Council; Water Efficiency and Sanitation Standard
Description:
Incentivizes the installation and use of gray water recycling systems and atmospheric water generators in the State by establishing an income tax credit to be administered by the Department of Taxation. Requires the Department of Business, Economic Development, and Tourism to establish a rebate program. Requires the State Building Code Council to adopt certain standards on gray water recycling systems and atmospheric water generators in the State. Effective 7/1/2050. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.