[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[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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