AN ACT CREATING A CONSERVATION TAX CREDIT FOR INDIVIDUALS.

This bill creates a conservation tax credit for people who donate land to the state or certain other entities for permanent preservation as open space. The credit is 50% of the land's fair market value at its highest and best use, up to $ 300,000 per transaction. A certified or licensed real estate appraiser must determine the land's value. The person donating the land may sell, assign, or transfer the credit. The total amount of credits allowed cannot exceed $ 10 million per fiscal year.

EFFECTIVE DATE: July 1, 2008, and applicable to income years starting on or after January 1, 2009.

Under the bill, taxpayers are eligible for the credit if they convey, without financial consideration or a discount in the sale price, land or an interest in land, in fee or as a conservation easement, to: (1) the state; (2) a political subdivision of the state; (3) a water company; (4) a federally recognized tribe; or (5) a private, nonprofit, 501(c)(3) charitable land conservation organization. The transfer must be made to permanently preserve the land for natural resource protection, including use as a public water supply source or wildlife habitat, and to foster biological diversity, agricultural and forestry production, or scenic and cultural values. The land must be identified as (1) conservation, preservation, or agricultural land in an adopted local, tribal, or regional conservation, open space, or land acquisition plan or (2) a conservation or preservation area in the state Plan of Conservation and Development. The donation, called a “qualified conservation contribution,” does not include a donation of a golf course, athletic field, or land required to be donated, set aside, or conserved as a condition of a federal, state, or municipal land use permit.

Under the bill, a taxpayer is an individual, estate, trust, beneficiary of a trust or estate, or partners in a partnership, including a limited liability company considered a partnership for federal income tax purposes.

To qualify for the tax credit, a taxpayer must submit the following information to the revenue services commissioner when he files a return for the taxable year in which he claims the credit:

1. statement indicating whether he or she claimed the deduction on his or her federal income tax return;

2. summary of the conservation purposes protected by the contribution, the county and municipality where the land is located, the number of acres that qualify, the amount of tax credit claimed, and the recipient;

3. sworn affidavit from the appraiser, including (a) a statement specifying the value of the unencumbered property and the total value of the qualified conservation contribution and, if the appraisal separately values sand and gravel, minerals, water, or improvements, (b) a statement of the separate value of these before and after the qualified conservation contribution is granted;

4. sworn affidavit from the recipient, including:

a. a copy of the information the holder filed with the Department of Environmental Protection (DEP) or Agriculture Department, as appropriate, and a copy of the department's certification;

b. a statement of whether the transaction is part of a series of transactions by the same donor; and

c. a statement that the recipient has reviewed the taxpayer form claiming the credit, and that it accurately describes the property; and

A credit or portion of a credit allowed for a taxable year beginning on or after January 1, 2009, but not used because the amount exceeds the taxpayer's liability, may be carried forward to each successive income year until it is fully taken, up to 15 years. A taxpayer cannot claim an additional credit while carrying a credit forward.

The total amount of credits allowed in a fiscal year cannot exceed $ 10 million. For the purposes of the bill, the fiscal year is the year the qualified conservation contribution took place, regardless of the carry forward period.

A taxpayer may sell, assign, or otherwise transfer a credit. The transferor and transferee must jointly submit written notice of the transfer to the revenue services commissioner, as he requires, no later than 30 days after the transfer. The notification must include any information the commissioner requires. Failure to comply with this requirement disallows the credit.

A taxpayer may claim only one credit per income tax year. But transferees may claim an unlimited number of credits. A taxpayer who has transferred a credit cannot claim an additional credit for any income tax year in which he or she claimed the transferred credit.

Before accepting the donation of land for which a credit may be claimed, the recipient must submit the following to the Agriculture Department (for a donation of farmland) or the DEP (for any other donation).

1. the number of conservation properties or easements it holds in the state;

2. the number of conserved acres it holds in the state;

3. the names of board members (if a private nonprofit organization) or elected or appointed officials (if a public or tribal organization);

4. a signed statement acknowledging the recipient has

a. a commitment to protect the conservation purpose of the donated land, and the resources to enforce the restrictions, apparently on its use; and

b. adequate resources and policies to provide annual monitoring of each qualified conservation contribution holds;

5. a qualified appraisal of the donation, prepared by a qualified appraiser, as the terms are defined by the U. S. Department of Agriculture, Fish and Wildlife Service, Forest Service, National Park Service and National Oceanic and Atmospheric Administration;

6. documentation that the donation is identified as a conservation, preservation, or agricultural land in an adopted local, regional, or tribal conservation plan, or as a conservation or preservation area in the state Plan of Conservation and Development;

7. documentation that the donation meets the bill's conservation purposes; and

8. if the recipient is a private, nonprofit land conservation organization, a copy of its 501(c)(3) approval letter.

Starting January 1, 2009, a recipient must submit the information to DEP or the Agriculture Department, as appropriate. The information must be submitted by February 1 of the calendar year following the year in which the recipient accepted the qualifying donation.

DEP or the Agriculture Department must certify that a taxpayer is eligible to claim a credit no later than 60 days after receiving the above information, provided:

1. a qualified appraisal prepared by a qualified appraiser has been submitted,

2. the donation is a qualified conservation contribution, and

3. the recipient is qualified under the bill to receive a qualified conservation contribution.

Yea

Nay

(03/12/2008)