A BILL TO BE ENTITLED
AN ACT to provide a tax credit for construction and installation of cisterns on residential and commercial property, to provide a tax credit for installation of innovative irrigation systems on residential and commercial property, and to provide that large cities may not prohibit rainwater recovery and innovative irrigation systems.
The General Assembly of North Carolina enacts:
SECTION 1.  Part 1 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑130.49. Credit for cistern installation.
(a)	Credit. – A taxpayer that constructs, installs, and places in service in this State an eligible cistern is allowed a credit equal to thirty‑five percent (35%) of the cost to the taxpayer of constructing and installing the system, including modifications to existing plumbing systems necessary for operation of the system. An eligible cistern is a system that meets each of the following criteria:
(1)	It is a watertight storage tank with smooth interior surfaces and an enclosed lid fabricated from nonreactive materials such as reinforced concrete, galvanized steel, or plastic and which is located underground, at ground level, or on elevated stands either outdoors or within a building or other containment structure and that is intended to collect rainfall from a catchment area such as a roof.
(2)	It meets all standards for reclaimed water or gray water promulgated by the Division of Public Health of the Department of Environment and Natural Resources, the North Carolina Building Code Council, and the local health department with jurisdiction over the facility where the system is located.
(b)	Limitation. – The credit allowed by this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.
(c)	Substantiation. – A taxpayer allowed a credit under this section must maintain and make available for inspection any information or records required by the Secretary. The taxpayer has the burden of proving eligibility for a credit and the amount of the credit.(d)	Carryforward. – Any unused portion of this credit may be carried forward for the next succeeding five years.
(e)	Sunset. – This section is repealed effective for taxable years beginning on or after January 1, 2014."
SECTION 2.  Part 1 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑130.50. Credit for installation of an innovative irrigation system.
(a)	Credit. – A taxpayer that constructs, installs, and places in service in this State an eligible irrigation system is allowed a credit equal to thirty‑five percent (35%) of the cost to the taxpayer of constructing, installing, and placing the system into service, including modifications to existing plumbing systems necessary for operation of the system. An eligible irrigation system is a system that meets each of the following criteria:
(1)	It includes a rain sensor or any other innovative water application technology that results in a decrease in water consumption of twenty‑five percent (25%) or more over an irrigation system that does not include innovative water application technology. For purposes of this subdivision, "innovative water application technology" includes a conservation controller, an evapotranspiration controller, soil moisture sensor controller, flow sensor, pressure‑regulating master valve, pressure‑regulating zone valves, pressure‑regulating spray heads, spray and rotor heads with check valves, drip irrigation, and micro‑sprinklers.
(2)	It meets all standards for reclaimed water or gray water promulgated by the Division of Public Health of the Department of Environment and Natural Resources, the North Carolina Building Code Council, and the local health department with jurisdiction over the facility where the system is located.
(b)	Limitation. – The credit allowed by this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.
(c)	Substantiation. – A taxpayer allowed a credit under this section must maintain and make available for inspection any information or records required by the Secretary. The taxpayer has the burden of proving eligibility for a credit and the amount of the credit.(d)	Carryforward. – Any unused portion of this credit may be carried forward for the next succeeding five years.
(e)	Sunset. – This section is repealed effective for taxable years beginning on or after January 1, 2014."
SECTION 3.  Part 2 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑151.33. Credit for cistern installation.
(a)	Credit. – A taxpayer that constructs, installs, and places in service in this State an eligible cistern is allowed a credit equal to thirty‑five percent (35%) of the cost to the taxpayer of constructing and installing the system, including modifications to existing plumbing systems necessary for operation of the system. An eligible cistern is a system that meets each of the following criteria:
(1)	It is a watertight storage tank with smooth interior surfaces and an enclosed lid fabricated from nonreactive materials such as reinforced concrete, galvanized steel, or plastic and which is located underground, at ground level, or on elevated stands either outdoors or within a building or other containment structure and that is intended to collect rainfall from a catchment area such as a roof.
(2)	It is located at a residence owned by the taxpayer.
(3)	It meets all standards for reclaimed water or gray water promulgated by the Division of Public Health of the Department of Environment and Natural Resources, the North Carolina Building Code Council, and the local health department with jurisdiction over the facility where the system is located.
(b)	Limitation. – The credit allowed by this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.
(c)	Substantiation. – A taxpayer allowed a credit under this section must maintain and make available for inspection any information or records required by the Secretary. The taxpayer has the burden of proving eligibility for a credit and the amount of the credit.
(d)	Carryforward. – Any unused portion of this credit may be carried forward for the next succeeding five years.
(e)	Sunset. – This section is repealed effective for taxable years beginning on or after January 1, 2014."
SECTION 4.  Part 2 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑151.34. Credit for installation of an innovative irrigation system.
(a)	Credit. – A taxpayer that constructs, installs, and places in service in this State an eligible irrigation system is allowed a credit equal to thirty‑five percent (35%) of the cost to the taxpayer of constructing, installing, and placing the system into service, including modifications to existing plumbing systems necessary for operation of the system. An eligible irrigation system is a system that meets each of the following criteria:
(1)	It includes a rain sensor or any other innovative water application technology that results in a decrease in water consumption of twenty‑five percent (25%) or more over an irrigation system that does not include innovative water application technology. For purposes of this subdivision, "innovative water application technology" includes a conservation controller, an evapotranspiration controller, soil moisture sensor controller, flow sensor, pressure‑regulating master valve, pressure‑regulating zone valves, pressure‑regulating spray heads, spray and rotor heads with check valves, drip irrigation, and micro‑sprinklers.
(2)	It is located at a residence owned by the taxpayer.
(3)	It meets all standards for reclaimed water or gray water promulgated by the Division of Public Health of the Department of Environment and Natural Resources, the North Carolina Building Code Council, and the local health department with jurisdiction over the facility where the system is located.
(b)	Limitation. – The credit allowed by this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.
(c)	Substantiation. – A taxpayer allowed a credit under this section must maintain and make available for inspection any information or records required by the Secretary. The taxpayer has the burden of proving eligibility for a credit and the amount of the credit.
(d)	Carryforward. – Any unused portion of this credit may be carried forward for the next succeeding five years.
(e)	Sunset. – This section is repealed effective for taxable years beginning on or after January 1, 2014."
SECTION 5.  Article 8 of Chapter 160A of the General Statutes is amended by adding a new section to read:
"§ 160A‑202.  Regulation of cisterns and rain barrels used for irrigation and innovative irrigation systems.
(a)	No city ordinance may prohibit or have the effect of prohibiting the installation and maintenance of cistern and rain barrel collection systems used to collect water for irrigation purposes or any innovative irrigation systems on any property within the city's corporate limits and extraterritorial planning jurisdiction. The city may regulate the installation and maintenance of cistern and rain barrel collection systems and innovative irrigation systems for the purpose of protecting the public health and safety and for the purpose of preventing them from becoming a public nuisance. For purposes of this section, "an innovative irrigation system" is an irrigation system that utilizes an innovative water application technology, such as a conservation controller, an evapotranspiration controller, soil moisture sensor controller, flow sensor, pressure‑regulating master valve, pressure‑regulating zone valves, pressure‑regulating spray heads, spray and rotor heads with check valves, drip irrigation, and micro‑sprinklers.
(b)	This section applies to cities having a population in excess of 100,000 according to the last federal decennial census."
SECTION 6.  Sections 1 through 4 of this act become effective for taxable years beginning on or after January 1, 2010. Section 5 of this act becomes effective October 1, 2009.  Section 6 of this act is effective when this act becomes law.