Agenda - 03-18-1997 - 9a - Laserfiche WebLink

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20' EXPLANATION OF CONSERVATION TAX CREDIT LEGISLATION N.C. GENERAL ASSEMBLY, 1897 SESSION SENATE BILLS 176 (structure) and 175 (appropriation) lead sponsors Sen. E. Sinnaird and H. Horton HOUSE BILLS 260 (structure) and 241 (appropriation) lead sponsors Rep. L. Gray and F. Mitchell PURPOSE: To increase the state income tax credit awarded to private property owners who voluntarily donate land or easements for conservation purposes. Current state law provides a- maximum of$25,000 in income tax credits for each land conservation gift made to public agencies or qualified not-for-profit, private conservation organizations. (The credit is based dollar-for-dollar up to 25% of the appraised value of land gift, but no more than$25,000 per gift. Any unused portion of the credit can be carried over by the taxpayer for five succeeding years.) The bill (SB 176 and HB 260) will increase the maximum credit to$100,000 for individual donors and$250,000 for corporate donors. The appropriation bill (SB 175 and HB 241) provides funds to the NC Department of Environment, Health and Natural Resources to: (a) cover program information and administrative costs to review and certify donated properties as qualified for the required public benefits for park, public recreation, and other land conservation purposes; and (b) establish a grant-in-aid program ($300,000 annually) to cover expenses of qualified, private conservation organizations incurred in arranging land and easement donations and managing or monitoring those properties. LEGISLATIVE ORIGINS: This legislation has been recommended by the Governor's Coastal Futures Commission and the Year of the Mountains Commission. It was recommended in the Governor's Coastal Agenda It is recommended by the joint House-Senate Environmental Review Commission. It is supported by the NC Department of Environment, Health, and Natural Resources. It is supported by North Carolina business and industry, by local government associations, and by environmental organizations. PROGRAM HISTORY: The state income tax credit for land conservation was first enacted in 1983 (with a$5,000 maximum credit). The cap was raised to$25,000 by the General Assembly in 1989. In the period from 1983-88 ($5,000 cap) 37 land donations (average of 6 gifts per year) qualified for tax credits (total of 2,383 acres valued at$5,642,000); and from 1989-95 ($25,000 cap) 95 land donations (average of 13.6 each year) qualified for tax credits (a total of 23,714 acres valued at$34,264,000). [Note that the maximum tax credit allowed is 25% of the value of the property donated, and, therefore, the current credit related revenue reduction is less than$300,000 per year for conservation lands annually donated for public benefit valued at$1,210,000. By DEHNR calculations, the tax credit program has delivered a 13:1 value to the public, with$13 in donated land values for every$1 of income tax credits.] The NC DEHNR has no funded staff positions to fulfill its obligations to review and approve applications for the tax credit, or to promote and explain the program. RATIONALE FOR THE CREDIT INCREASE: State and local public agencies and a statewide network of private, non-profit land conservation organizations are responding to the rapid destruction of North Carolina's natural areas and rural landscapes with programs designed to encourage voluntary conservation by private landowners. We need alternatives to relying on land use regulations or public purchases at full market value of all lands important for protection of river natural corridors, natural wildlife habitats, parks and greenways, beach access, scenic and open space landscapes, and farmlands in urban areas. New state programs have established funds to acquire and protect important environmental lands, such as the Clean Water Management Trust Fund, the Natural Heritage Trust Fund, the Parks and Recreation Trust Fund, and Wetlands Restoration Fund. Those public funds can go further when landowners are willing to sell for less than the full property value (Le., partially