AN ACT
RELATING TO PROPERTY TAXATION; PROVIDING TAX CREDITS FOR THE
DONATION OF LAND OR INTEREST IN LAND; ENACTING THE LAND CONSERVATION INCENTIVES
ACT; PROVIDING FOR ADMINISTRATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. SHORT TITLE.‑-Sections 1 through 6 of
this act may be cited as the "Land Conservation Incentives Act".
Section 2. PURPOSE.‑‑The purpose of the Land
Conservation Incentives Act is to encourage private landowners to be stewards
of lands that are important habitat areas or contain significant natural, open
space and historic resources by providing private landowners with incentives
that encourage the protection of private lands for open space, natural
resources, biodiversity conservation, outdoor recreation, farmland and forest
land preservation, historic preservation and land conservation purposes.
Section 3. DEFINITIONS.‑‑As used in the Land
Conservation Incentives Act:
A. "interest in real property" means a
right in real property, including access, improvements, water rights, fee
simple interest, easement and land use easement. The interest shall comply with the
requirements of the Section 170(h) of the Internal Revenue Code of 1986,
partial interest, mineral right, remainder or future interest or other interest
or right in real property;
B. "land" means real property,
including rights of way, easements, privileges and all other rights or
interests of a land or description relating to or connected with real property;
and
C. "public or private conservation
agency" means a governmental body or a private not‑for‑profit
charitable corporation or trust authorized to do business in New Mexico that is
organized and operated for natural resources, land conservation or historic
preservation purposes and that has tax‑exempt status as a public charity
under the federal Internal Revenue Code of 1986, and the power to acquire, hold
or maintain land or interests in land.
Section 4. ADMINISTRATION.--
A. The Land Conservation Incentives Act shall be
administered by the secretary of energy, minerals and natural resources in
consultation with the committee established pursuant to the Natural Lands
Protection Act.
B. The secretary of energy, minerals and natural
resources may promulgate rules as may be deemed necessary to certify eligible
projects for treatment in fulfillment of the purposes of this act. The secretary of taxation and revenue, in
consultation with the secretary of energy, minerals and natural resources,
shall promulgate rules as may be deemed necessary to administer the tax
incentives provided for in the Land Conservation Incentives Act and shall
coordinate the preparation of the report to the legislature showing the fiscal
impact on the treasury of the credits claimed pursuant to that act.
Section 5. APPLICABILITY AND LIMITATIONS.‑‑
A. The tax credits provided by the Land
Conservation Incentives Act apply to transfers of land or interests therein in
taxable years beginning on or after January 1, 2004 and all taxable years
thereafter.
B. A taxpayer claiming a tax credit pursuant to
the Land Conservation Incentives Act may not claim a credit pursuant to a
similar law for costs related to the same project.
C. A tax credit that is claimed pursuant to the
Land Conservation Incentives Act from the donation of land or an interest in
land made by a pass‑through tax entity, such as a trust, estate,
partnership, limited liability corporation or partnership, limited partnership,
S corporation or other fiduciary, shall be used either by an
entity in the event it is the taxpayer on behalf of the entity or by the
member, manager, partner, shareholder or beneficiary, as the case may be, in
proportion to his interest in the entity in the event that income, deductions
and tax liability pass through the entity to the member, manager, partner,
shareholder or beneficiary. Tax credits
may not be claimed by both the entity and the member, manager, partner,
shareholder or beneficiary for the same donation.
Section 6. INTERPRETATION.--No part or segment of the
Land Conservation Incentives Act shall be interpreted to alter or amend permit
requirements, reporting requirements, allocation procedures or other
requirements as set forth in any other provision of state law.
Section 7. A new section of the Income Tax act, Section
7-2-18.10 NMSA 1978, is enacted to read:
"7-2-18.10. TAX CREDIT AVAILABLE.‑-
A. There shall be allowed as a credit against
the tax liability imposed by the Income Tax Act, an amount equal to fifty
percent of the fair market value of land or interest in land that is conveyed
for the purpose of open space, natural resource or biodiversity conservation,
agricultural preservation or watershed or historic preservation as an
unconditional donation in perpetuity by the landowner or taxpayer to a public
or private conservation agency eligible to hold the land and interests therein
for conservation or preservation purposes.
The fair market value of qualified donations made pursuant to this
section shall be substantiated by a "qualified appraisal" prepared by
a "qualified appraiser", as those terms are defined under applicable
federal laws and regulations governing charitable contributions.
B. The amount of the credit that may be claimed
by a taxpayer shall not exceed one hundred thousand dollars ($100,000). In addition, in a taxable year the credit
used may not exceed the amount of individual income tax otherwise due. A portion of the credit that is unused in a
taxable year may be carried over for a maximum of twenty consecutive taxable
years following the taxable year in which the credit originated until fully
expended. A taxpayer may claim only one
tax credit per taxable year.
C. Qualified donations shall include the
conveyance in perpetuity of a fee interest in real property or a less‑than‑fee
interest in real property, such as a conservation restriction, preservation
restriction, agricultural preservation restriction or watershed preservation
restriction, pursuant to the Land Use Easement Act and provided that the less‑than‑fee
interest qualifies as a charitable contribution deduction under Section 170(h)
of the Internal Revenue Code.
Dedications of land for open space for the purpose of fulfilling density
requirements to obtain subdivision or building permits shall not be considered
as qualified donations pursuant to the Land Conservation Incentives Act.
D. Qualified donations shall be eligible for the
tax credit if the donations are made to the state of New Mexico, a political
subdivision thereof or a charitable organization described in Section 501(c)(3)
of the Internal Revenue Code and that meets the requirements of Section
170(h)(3) of that code.
E. To be eligible for treatment as qualified donations
under this section, land or interests in lands must be certified by the
secretary of energy, minerals and natural resources as fulfilling the purposes
as set forth in Section 2 of the Land Conservation Incentives Act. The use and protection of the lands, or
interests therein, for open space, natural area protection, biodiversity
habitat conservation, land preservation, agricultural preservation, historic
preservation or similar use or purpose of the property shall be assured in
perpetuity."
Section 8. A new section of the Corporate Income and
Franchise Tax Act, Section 7‑2A‑8.9 NMSA 1978, is enacted to read:
"7‑2A‑8.9. TAX CREDIT AVAILABLE.‑‑
A. There shall be allowed as a credit against
the tax liability imposed by the Corporate Income and Franchise Tax Act an
amount equal to fifty percent of the fair market value of land or interest in
land that is conveyed for the purpose of open space, natural resource or
biodiversity conservation, agricultural preservation or watershed or historic
preservation as an unconditional donation in perpetuity by the landowner or taxpayer
to a public or private conservation agency eligible to hold the land and
interests therein for conservation or preservation purposes. The fair market value of qualified donations
made pursuant to this section shall be substantiated by a "qualified appraisal"
prepared by a "qualified appraiser", as those terms are defined under
applicable federal laws and regulations governing charitable contributions.
B. The amount of the credit that may be claimed
by a taxpayer shall not exceed one hundred thousand dollars ($100,000). In addition, in a taxable year the credit
used may not exceed the amount of corporate income tax otherwise due. A portion of the credit that is unused in a
taxable year may be carried over for a maximum of twenty consecutive taxable
years following the taxable year in which the credit originated until fully
expended. A taxpayer may claim only one
tax credit per taxable year.
C. Qualified donations shall include the
conveyance in perpetuity of a fee interest in real property or a less‑than‑fee
interest in real property, such as a conservation restriction, preservation
restriction, agricultural preservation restriction or watershed preservation
restriction, pursuant to the Land Use Easement Act; provided that the less‑than‑fee
interest qualifies as a charitable contribution deduction under Section 170(h)
of the Internal Revenue Code.
Dedications of land for open space for the purpose of fulfilling density
requirements to obtain subdivision or building permits shall not be considered
as qualified donations pursuant to the Land Conservation Incentives Act.
D. Qualified donations shall be eligible for the
tax credit if the donations are made to the state of New Mexico, a political
subdivision thereof or a charitable organization described in Section 501(c)(3)
of the Internal Revenue Code and that meets the requirements of Section
170(h)(3) of that code.
E. To be eligible for treatment as qualified
donations under this section, land or interests in lands must be certified by
the secretary of energy, minerals and natural resources as fulfilling the
purposes as set forth in Section 2 of the Land Conservation Incentives Act. The use and protection of the lands, or
interests therein, for open space, natural area protection, biodiversity
habitat conservation, land preservation, agricultural preservation, historic
preservation or similar use or purpose of the property shall be assured in
perpetuity."
Section 9. EFFECTIVE DATE.--The effective date of the
provisions of this act is January 1, 2004.