§ 48-7-40.10 - Tax credit for water conservation facilities and qualified water conservation investment property
O.C.G.A. 48-7-40.10 (2010)
48-7-40.10. Tax credit for water conservation facilities and qualified water conservation investment property
(a) As used in this Code section, the term:
(1) "Machinery and equipment" means all tangible personal property used directly in a minimum 10 percent reduction in permit by relinquishment or transfer of annual permitted water usage from existing permitted ground-water sources.
(2) "Qualified water conservation investment" means all spending by a taxpayer for use in this state for the modification of existing manufacturing processes, for the construction of a new water conservation facility, or for the expansion of an existing water conservation facility provided that such modification, construction, or expansion results in a minimum 10 percent reduction in permit by relinquishment or transfer of annual permitted water usage from existing permitted ground-water sources and has been certified pursuant to rules and regulations promulgated by the Department of Natural Resources as necessary to promote its ground-water management efforts for areas with a multiyear record of consumption at, near, or above sustainable use signaled by declines in ground-water pressure, threats of salt-water intrusion, need to develop alternate sources to accommodate economic growth and development, or any other indication of growing inadequacy of the existing resource.
(3) "Water conservation" means a minimum 10 percent reduction in permit by relinquishment or transfer of annual permitted water usage from existing permitted ground-water sources due to increased efficiencies or recycling of water which results in reduced ground-water usage, or a change from a ground-water source to a surface-water source or an alternate source.
(4) "Water conservation facility" means any facility, buildings, and machinery and equipment used in the water conservation process resulting in a minimum 10 percent reduction in permit by relinquishment or transfer of annual permitted water usage from existing ground-water sources, provided that up to 10 percent of any building that is a component of a water conservation facility may be used for office space to house support staff for the operation.
(b) Any taxpayer who financially participates in qualified water conservation investment in this state shall be allowed a credit against the tax imposed under this article in the taxable year following that in which the modified manufacturing process or the new or expanded water conservation facility has been placed in service and in which the taxpayer has initiated a minimum 10 percent reduction in permit by relinquishment or transfer of annual permitted water usage from existing permitted ground-water sources. This credit shall have a maximum carry forward of ten years, provided that such property remains in service, that the reduction in permit is maintained, and that the property continues to be used by the taxpayer. The amount of the credit allowed under this Code section shall be a percentage of the taxpayer's qualified water conservation investment. For projects of $50,000.00 to $499,999.00, the credit for such taxpayer shall be 10 percent; for projects of $500,000.00 to $799,999.00, the credit shall be 8 percent; for projects of $800,000.00 to $999,999.00, the credit shall be 6 percent; and for projects of $1 million or more, the credit shall be 5 percent. The amount of the credit which may be used in any tax year shall not exceed 50 percent of that year's tax liability as determined without regard to any other credits.
(c) The credit granted under subsection (b) of this Code section shall be subject to the following conditions and limitations:
(1) In order to qualify as a basis for the credit, the modified manufacturing process or the new or expanded water conservation facility must not be placed in service before January 1, 1997. The credit may be only taken with respect to qualified water conservation investment in a project costing $50,000.00 or more. For every year in which the taxpayer claims the credit, the taxpayer shall attach a schedule to the taxpayer's income tax return setting forth as a minimum the following information:
(A) The amounts, dates, and nature of the qualified water conservation investments which have allowed a modified manufacturing process or a new or expanded water conservation facility to be placed in service in the prior taxable year;
(B) The amount and date of reduction in permitted ground-water usage occurring as a result of this investment;
(C) The amount of tax credit claimed for these investments for the current taxable year;
(D) The amounts of qualified water conservation investment reported for tax years preceding the prior taxable year;
(E) The amounts of tax credit which have been utilized in prior taxable years;
(F) The amounts of tax credit which has been carried over from prior years;
(G) The amounts of tax credit allowed under this Code section being utilized by the taxpayer in the current taxable year; and
(H) The amounts of tax credit to be carried over to subsequent years;
(2) In the initial year in which the taxpayer claims the credit granted in subsection (b) of this Code section, the taxpayer shall include in the description of the project required by subparagraph (A) of paragraph (1) of this subsection information which demonstrates that the project completed with the qualified water conservation investment had an aggregate cost of $50,000.00 or more. The taxpayer shall also include a copy of the certification by the Department of Natural Resources under paragraph (2) of subsection (a) of this Code section;
(3) Any lease for a period of five years or longer of any real or personal property resulting from qualified water conservation investment shall be treated as qualified water conservation investment by the lessee. The taxpayer may treat the full value of the leased property as qualified water conservation investment in the taxable year in which the lease becomes binding on the lessor and the taxpayer if all other conditions of this subsection have been met;
(4) The utilization of the credit granted in this Code section shall have no effect on the taxpayer's ability to claim depreciation for tax purposes on assets acquired by the taxpayer, nor shall the credit have any effect on the taxpayer's basis in such assets for the purpose of depreciation; and
(5) If, after receiving approval for the water conservation credit, the annual permit for water usage from the same ground-water source is increased, any unused credits will expire immediately.