[Extensions of Remarks]
[Page E33]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

AGRICULTURAL WATER CONSERVATION ACT

______

HON. GARY A. CONDIT

of california

in the house of representatives

Tuesday, January 7, 1997

Mr. CONDIT. Mr. Speaker, I rise today to introduce the Agricultural
Water Conservation Act.
Over the past few years I have read countless articles on the need to
conserve water and the role Federal Government has with this mission.
While discussing water conservation methods with farmers in my
district, I found cost was their overriding concern. The outlays
required to implement water conservation systems--that is, drip
irrigation, sprinkler systems, ditch lining--are a tremendous burden on
the agriculture industry. While I firmly believe most agriculture
interest are genuinely concerned about conserving water, cost has
crippled the ability to implement conservation methods on farms.
For example, in the San Joaquin Valley, CA, a study was done by the
San Joaquin Drainage Program. This report indicates a cost ranging from
$21.06 per acre for surface irrigation to $131.40 per acre for linear
irrigation. Drip irrigation was measured at a cost of $272.07 per acre.
As you can see, with cost ranging from 623 to 1,294 percent above the
least-cost approach method of surface irrigation, there are limited
incentives at this time for farmers to switch toward better water
maintenance practices.
The Agricultural Water Conservation Act is not a mandate for
expensive water conservation systems, it is a tool and an option for
farmers. Specifically, it will allow farmers to receive up to a 30
percent tax credit for the cost of developing and implementing water
conservation plans on their farm land with a cap of $500 per acre. The
tax credit could be used primarily for the cost of materials and
equipment. This legislation would not require them to change their
irrigation practices. However, it would allow those farmers who want to
move towards a more conservation approach of irrigation but can not
afford to do it during these tough economic times.
This measure is not the end-all solution. This is just the beginning
toward the demand for not only in California, but over the United
States, to conserve water. I believe farmers will contribute to solving
water supply problems when given the opportunity, as they already have
through conservation transfers and crop changes. I also believe
providing for the long-term water supply needs of environmental, urban,
and agricultural users is a critical part of the solution.
The Agricultural Water Conservation Act will provide another vehicle
for farmers to contribute to the solution and offer a modest credit to
share the cost with the true beneficiaries--the public.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Agricultural Water
Conservation Act''.

SEC. 2. CONGRESSIONAL FINDINGS.

The Congress finds that--
(1) the Federal Government has an historic commitment to
assisting areas of the Nation in need of developing adequate
water supplies,
(2) water is becoming increasingly scarce and expensive in
many parts of the United States, which is compounded when
multiple years of drought occur,
(3) in most areas of the United States, farms are
overwhelmingly the largest water consumers, and
(4) it is in the national interest for farmers to implement
water conservation measures which address water conservation
needs and for the Federal Government to promote such
conservation measures.

SEC. 3. CREDIT FOR PURCHASE AND INSTALLATION OF AGRICULTURAL
WATER CONSERVATION SYSTEMS.

``(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
foreign tax credit, etc.) is amended by adding at the end the
following new section:

``SEC. 30B. PURCHASE AND INSTALLATION OF AGRICULTURAL WATER
CONSERVATION SYSTEMS.

``(a) Allowance of Credit.--In the case of an eligible
taxpayer, there shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal
to 30 percent of the water conservation system expenses paid
or incurred by the taxpayer during such year.
``(b) Maximum Credit.--The credit allowed by subsection (a)
with respect to any water conservation system shall not
exceed the product of $500 and the number of acres served by
such system.
``(c) Definitions.--For purposes of this section--
``(1) Eligible taxpayer.--The term `eligible taxpayer'
means any taxpayer if--
``(A) at least 50 percent of such taxpayer's gross income
is normally derived from a trade or business referred to in
paragraph (3)(C), and
``(B) such taxpayer complies with all Federal, State, and
local water rights and environmental laws.
``(2) Water conservation system expenses.--
``(A) In general.--The term `water conservation system
expenses' means expenses for the purchase and installation of
a water conservation system but only if--
``(i) the land served by the water is entirely in an area
which has been identified, in the taxable year or in any of
the 3 preceding taxable years, as an area of--
``(I) extreme drought severity on the Palmer Drought
Severity Index published by the National Oceanic and
Atmospheric Administration, or
``(II) water shortage (due to increasing demands, limited
supplies, or limited storage) by the Natural Resources
Conservation Service of the Department of Agriculture or the
Bureau of Reclamation of the Department of the Interior,
``(ii) the taxpayer has in effect a water conservation plan
which has been reviewed and approved by such Service and
Bureau,
``(iii) such expenses are consistent with such plan, and
``(iv) there is an irrigation water savings of at least 5
percent which is attributable to such system.

For purposes of clause (iv), water savings shall be
determined and verified under regulations prescribed jointly
by such Service and Bureau.
``(B) Water conservation system.--The term `water
conservation system' means materials or equipment which are
primarily designed to substantially conserve irrigation water
used or to be used on farm land.
``(C) Farm land.--The term `farm land' means land used in a
trade or business by the taxpayer or a tenant of the taxpayer
for--
``(i) the production of crops, fruits, or other
agricultural products,
``(ii) the raising, harvesting, or growing of trees, or
``(iii) the sustenance of livestock.
``(c) Limitation Based on Amount of Tax.--
``(1) Liability for tax.--The credit allowable under
subsection 9a) for any taxable year shall not exceed the
excess (if any) of--
``(A) the regular tax for the taxable year, reduced by the
sum of the credits allowable under subpart A and the
preceding sections of this subpart, over
``(B) the tentative minimum tax for the taxable year.
``(2) Carryforward of unused credit.--If the amount of the
credit allowable under subsection (a) for any taxable year
exceeds the limitation under paragraph (1) for the taxable
year, the excess shall be carried to the succeeding taxable
year and added to the amount allowable as a credit under
subsection (a) for such succeeding taxable year.
``(d) Denial of Double Benefit.--No deduction shall be
allowed under this chapter with respect to any expense which
is taken into account in determining the credit under this
section, and any increase in the basis of any property which
would (but for this subsection) result from such expense
shall be reduced by the amount of credit allowed under this
section for such expense.''
(b) Technical Amendment.--Subsection (a) of section 1016 of
such Code is amended by striking ``and'' at the end of the
paragraph (25), by striking the period at the end of
paragraph (26) and inserting ``; and'', and by adding at the
end the following new paragraph:
``(27) to the extent provided in section 30B(d), in the
case of amounts with respect to which a credit has been
allowed under section 30B.''
(c) Clerical Amendment.--The table of sections for subpart
B of part IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following new item:

``Sec. 30B. Purchase and installation of agricultural water
conservation systems.''

(d) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after the date of the
enactment of this Act, in taxable years ending after such
date.

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