NC H1771

Authorizes local governments (cities, counties, and water authorities) to make special assessments, levy surcharges on water rates (up to $1.00), and levy property taxes to fund installation of water conservation systems on residential, commercial, or other real property.

Permits cities, counties, and water authorities to establish revolving loan funds for water conservation system financing with annual interest rates capped at 8% per annum and maximum loan terms of 15 years.

Defines "water conservation system" as a system designed to collect and reuse rainwater on the premises, constructed in accordance with Department of Environment and Natural Resources or Building Code Council standards.

Establishes a state income tax credit equal to 35% of water conservation system costs for taxpayers, with ceilings of $3,000 per residential dwelling unit and $1,000,000 per nonresidential installation, expiring for taxable years beginning January 1, 2016.

Allows taxpayers financed through local government loan programs to claim the tax credit in annual installments corresponding to yearly payments rather than taking the full credit in the year the system is installed.