GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	3 

HOUSE BILL 260*
Committee Substitute Favorable 4/8/97
Senate Finance Committee Substitute Adopted 4/22/97

Short Title:  Increase Conservation Tax Credit.	(Public)

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Sponsors:

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Referred to:  

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February 17, 1997

A BILL TO BE ENTITLED
AN ACT TO INCREASE THE CAP ON THE INCOME TAX CREDIT FOR REAL PROPERTY DONATED FOR CONSERVATION PURPOSES AND TO ENSURE THAT CONSERVATION AND PRESERVATION AGREEMENTS ARE CONSIDERED IN DETERMINING THE APPRAISED VALUE OF LAND AND IMPROVEMENTS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-130.34 reads as rewritten:
"§ 105-130.34.  Credit for certain real property donations.
(a)	Any corporation that makes a qualified donation of an interest in real property located in North Carolina during the taxable year that is useful for public beach access or use, public access to public waters or trails, fish and wildlife conservation, or other similar land conservation purposes is allowed a credit against the tax imposed by this Division equal to twenty-five percent (25%) of the fair market value of the donated property interest.  To be eligible for this credit, the interest in real property must be donated to and accepted by either the State, a local government, or a body that is both organized to receive and administer lands for conservation purposes and qualified to receive charitable contributions pursuant to G.S. 105-130.9.  Lands required to be dedicated pursuant to local governmental regulation or ordinance and dedications made to increase building density levels permitted under a regulation or ordinance are not eligible for this credit.  The credit allowed under this section may not exceed two hundred fifty thousand dollars ($250,000).  To support the credit allowed by this section, the taxpayer must file with its income tax return, for the taxable year in which the credit is claimed, a certification by the Department of Environment, Health, and Natural Resources that the property donated is suitable for one or more of the valid public benefits set forth in this subsection.
(b)	The credit allowed by this section may not exceed the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.
(c)	Any unused portion of this credit may be carried forward for the next succeeding five years.
(d)	That portion of a qualifying donation that is the basis for a credit allowed under this section is not eligible for deduction as a charitable contribution under G.S. 105-130.9."
Section 2.  G.S. 105-151.12 reads as rewritten:
"§ 105-151.12.  Credit for certain real property donations.
(a)	A person who makes a qualified donation of an interest in real property located in North Carolina during the taxable year that is useful for (i) public beach access or use, (ii) public access to public waters or trails, (iii) fish and wildlife conservation, or (iv) other similar land conservation purposes is allowed a credit against the tax imposed by this Division equal to twenty-five percent (25%) of the fair market value of the donated property interest.  To be eligible for this credit, the interest in property must be donated to and accepted by either the State, a local government, or a body that is both organized to receive and administer lands for conservation purposes and qualified to receive charitable contributions under the Code.  Lands required to be dedicated pursuant to local governmental regulation or ordinance and dedications made to increase building density levels permitted under a regulation or ordinance are not eligible for this credit.  The credit allowed under this section may not exceed one hundred thousand dollars ($100,000).  To support the credit allowed by this section, the taxpayer must file with the income tax return for the taxable year in which the credit is claimed a certification by the Department of Environment, Health, and Natural Resources that the property donated is suitable for one or more of the valid public benefits set forth in this subsection.
(b)	The credit allowed by this section may not exceed the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.
Any unused portion of this credit may be carried forward for the next succeeding five years.
(c)	In order to claim the credit allowed under this section, the taxpayer must add the fair market value of the donated property interest, up to a maximum of four hundred thousand dollars ($400,000), to taxable income as provided in G.S. 105-134.6(c).
(d)	In the case of property owned by a married couple, if both spouses are required to file North Carolina income tax returns, the credit allowed by this section may be claimed only if the spouses file a joint return.  If only one spouse is required to file a North Carolina income tax return, that spouse may claim the credit allowed by this section on a separate return.
(e)	In the case of marshland for which a claim has been filed pursuant to G.S. 113-205, the offer of donation must be made before December 31, 1998, to qualify for the credit allowed by this section."
Section 3.  G.S. 105-134.6(c)(5) reads as rewritten:
"(5)	The fair market value, up to a maximum of four hundred thousand dollars ($400,000), of the donated property interest for which the taxpayer claims a credit for the taxable year under G.S. 105-151.12 and the market price of the gleaned crop for which the taxpayer claims a credit for the taxable year under G.S. 105-151.14."
Section 4.  G.S. 105-287(a) reads as rewritten:
"(a)	In a year in which a general reappraisal or horizontal adjustment of real property in the county is not made, the assessor shall increase or decrease the appraised value of real property, as determined under G.S. 105-286, to accomplish any one or more of the following:
(1)	Correct a clerical or mathematical error.
(2)	Correct an appraisal error resulting from a misapplication of the schedules, standards, and rules used in the county's most recent general reappraisal or horizontal adjustment.
(2a)	Recognize an increase or decrease in the value of the property resulting from a conservation or preservation agreement subject to Article 4 of Chapter 121 of the General Statutes, the Conservation and Historic Preservation Agreements Act.
(3)	Recognize an increase or decrease in the value of the property resulting from a factor other than one listed in subsection (b)."
Section 5.  G.S. 105-317(a) reads as rewritten:
"(a)	Whenever any real property is appraised it shall be the duty of the persons making appraisals:
(1)	In determining the true value of land, to consider as to each tract, parcel, or lot separately listed at least its advantages and disadvantages as to location; zoning; quality of soil; waterpower; water privileges; dedication as a nature preserve; conservation or preservation agreements; mineral, quarry, or other valuable deposits; fertility; adaptability for agricultural, timber-producing, commercial, industrial, or other uses; past income; probable future income; and any other factors that may affect its value except growing crops of a seasonal or annual nature.
(2)	In determining the true value of a building or other improvement, to consider at least its location; type of construction; age; replacement cost; cost; adaptability for residence, commercial, industrial, or other uses; past income; probable future income; and any other factors that may affect its value.
(3)	To appraise partially completed buildings in accordance with the degree of completion on January 1."
Section 6.  Sections 1 through 3 of this act are effective for taxable years beginning on or after January 1, 1998.  The remaining sections of this act become effective July 1, 1997.