HB 990

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AN ACT

RELATING TO TAXATION; PROVIDING FOR THE SALE, EXCHANGE OR

TRANSFER OF THE INCOME TAX CREDIT AND THE CORPORATE INCOME TAX

CREDIT THAT MAY BE CLAIMED FOR CERTAIN CONVEYANCES OF REAL

PROPERTY; INCREASING THE AMOUNT OF THE CREDIT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 7-2-18.10 NMSA 1978 (being Laws

2003, Chapter 331, Section 7) is amended to read:

"7-2-18.10. TAX CREDIT--CERTAIN CONVEYANCES OF REAL

PROPERTY.--

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

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contributions.

B. The amount of the credit that may be claimed by

a taxpayer shall not exceed one hundred thousand dollars

($100,000) for a conveyance made prior to January 1, 2008 and

shall not exceed two hundred fifty thousand dollars ($250,000)

for a conveyance made on or after that date. 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

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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

75-9-2 NMSA 1978. 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.

F. A taxpayer may apply for certification of

eligibility for the tax credit provided by this section from

the energy, minerals and natural resources department. If the

energy, minerals and natural resources department determines

that the application meets the requirements of this section

and that the property conveyed will not adversely affect the

property rights of contiguous landowners, it shall issue a

certificate of eligibility to the taxpayer, which shall

include a calculation of the maximum amount of tax credit for

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which the taxpayer would be eligible. The energy, minerals

and natural resources department may issue rules governing the

procedure for administering the provisions of this subsection.

G. To receive a credit pursuant to this section, a

person shall apply to the taxation and revenue department on

forms and in the manner prescribed by the department. The

application shall include a certificate of eligibility issued

by the energy, minerals and natural resources department

pursuant to Subsection F of this section. If all of the

requirements of this section have been complied with, the

taxation and revenue department shall issue to the applicant a

document granting the tax credit. The document shall be

numbered for identification and declare its date of issuance

and the amount of the tax credit allowed for the qualified

donation made pursuant to this section.

H. The tax credit represented by a document issued

pursuant to Subsection G of this section for a conveyance made

on or after January 1, 2008, or an increment of that tax

credit, may be sold, exchanged or otherwise transferred, and

may be carried forward for a period of twenty taxable years

following the taxable year in which the credit originated

until fully expended. A tax credit or increment of a tax

credit may only be transferred once. The credit may be

transferred to any taxpayer. A taxpayer to whom a credit has

been transferred may use the credit for the taxable year in

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which the transfer occurred and unused amounts may be carried

forward to succeeding taxable years, but in no event may the

transferred credit be used more than twenty years after it was

originally issued.

I. A tax credit issued pursuant to this section

shall be transferred through a qualified intermediary. The

qualified intermediary shall, by means of a sworn notarized

statement, notify the taxation and revenue department of the

transfer and of the date of the transfer within ten days of

the transfer. Credits shall only be transferred in increments

of ten thousand dollars ($10,000) or more. The qualified

intermediary shall keep an account of the credits and have the

authority to issue sub-numbers registered with the taxation

and revenue department and traceable to the original credit.

J. If a charitable deduction is claimed on the

taxpayer's federal income tax for any contribution for which

the credit provided by this section is claimed, the taxpayer's

itemized deductions for New Mexico income tax shall be reduced

by the amount of the deduction for the contribution in order

to determine the New Mexico taxable income of the taxpayer.

K. For the purposes of this section:

(1) "qualified intermediary" does not

include a person who has been previously convicted of a

felony, who has had a professional license revoked, who is

engaged in the practice defined in Section 61-28B-3 NMSA 1978

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and who is identified in Section 61-29-2 NMSA 1978, and does

not include any entity owned wholly or in part or employing

any of the foregoing persons; and

(2) "taxpayer" means a citizen or resident

of the United States, a domestic partnership, a limited

liability company, a domestic corporation, an estate,

including a foreign estate, or a trust."

Section 2. Section 7-2A-8.9 NMSA 1978 (being Laws 2003,

Chapter 331, Section 8) is amended to read:

"7-2A-8.9. TAX CREDIT--CERTAIN CONVEYANCES OF REAL

PROPERTY.--

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

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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) for a conveyance made prior to January 1, 2008 and

shall not exceed two hundred fifty thousand dollars ($250,000)

for a conveyance made on or after that date. 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

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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

5-9-2 NMSA 1978. 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.

F. A taxpayer may apply for certification of

eligibility for the tax credit provided by this section from

the energy, minerals and natural resources department. If the

energy, minerals and natural resources department determines

that the application meets the requirements of this section

and that the property conveyed will not adversely affect the

property rights of contiguous landowners, it shall issue a

certificate of eligibility to the taxpayer, which shall

include a calculation of the maximum amount of tax credit for

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which the taxpayer would be eligible. The energy, minerals

and natural resources department may issue rules governing the

procedure for administering the provisions of this subsection.

G. To receive a credit pursuant to this section, a

person shall apply to the taxation and revenue department on

forms and in the manner prescribed by the department. The

application shall include a certificate of eligibility issued

by the energy, minerals and natural resources department

pursuant to Subsection F of this section. If all of the

requirements of this section have been complied with, the

taxation and revenue department shall issue to the applicant a

document granting the tax credit. The document shall be

numbered for identification and declare its date of issuance

and the amount of the tax credit allowed for the qualified

donation made pursuant to this section.

H. The tax credit represented by a document issued

pursuant to Subsection G of this section for a conveyance made

on or after January 1, 2008, or an increment of that tax

credit, may be sold, exchanged or otherwise transferred, and

may be carried forward for a period of twenty taxable years

following the taxable year in which the credit originated

until fully expended. A tax credit or increment of a tax

credit may only be transferred once. The credit may be

transferred to any taxpayer. A taxpayer to whom a credit has

been transferred may use the credit for the taxable year in

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which the transfer occurred and unused amounts may be carried

forward to succeeding taxable years, but in no event may the

transferred credit be used more than twenty years after it was

originally issued.

I. A tax credit issued pursuant to this section

shall be transferred through a qualified intermediary. The

qualified intermediary shall, by means of a sworn notarized

statement, notify the taxation and revenue department of the

transfer and of the date of the transfer within ten days of

the transfer. Credits shall only be transferred in increments

of ten thousand dollars ($10,000) or more. The qualified

intermediary shall keep an account of the credits and have the

authority to issue sub-numbers registered with the taxation

and revenue department and traceable to the original credit.

J. If a charitable deduction is claimed on the

taxpayer's federal income tax for any contribution for which

the credit provided by this section is claimed, the taxpayer's

itemized deductions for New Mexico income tax shall be reduced

by the amount of the deduction for the contribution in order

to determine the New Mexico taxable income of the taxpayer.

K. For the purposes of this section:

(1) "qualified intermediary" does not

include a person who has been previously convicted of a

felony, who has had a professional license revoked, who is

engaged in the practice defined in Section 61-28B-3 NMSA 1978

and who is identified in Section 61-29-2 NMSA 1978, and does

not include any entity owned wholly or in part or employing

any of the foregoing persons; and

(2) "taxpayer" means a citizen or resident

of the United States, a domestic partnership, a limited

liability company, a domestic corporation, an estate,

including a foreign estate, or a trust."

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