senate Bill S5522

2013-2014 Legislative Session

Relates to a conservation, open space and farmland protection credit trading program

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Jan 08, 2014 referred to investigations and government operations
May 16, 2013 referred to investigations and government operations

S5522 - Bill Details

Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd ยงยง210 & 606, Tax L

S5522 - Bill Texts

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Relates to a conservation, open space and farmland protection credit trading program to provide tax credits against income and corporation franchise taxes in the amount of fifty percent of the value of the easement property.

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BILL NUMBER:S5522

TITLE OF BILL: An act to amend the tax law, in relation to the
conservation, open space and farmland protection credit trading
program

PURPOSE:

To create a new incentive for conservation, preservation of open
space, farmland protection and preserving and protecting New York's
natural and manmade environmental assets.

SUMMARY OF PROVISIONS:

Section 1 establishes the legislation as the "Conservation, Open Space
and Farmland Protection Credit Trading Program."

Section 2 sets forth the legislative intent.

Section 3 amends section 210 of the tax law to create a tradable
conservation, open space and farmland protection tax credit with a
value of fifty percent of the fair market value of the qualified real
property. The amount of the credit shall not exceed $100,000. This
section defines the lands that qualify for the credit as well as the
use, limitations and transferability of the tax credit. This section
also defines eligible parties who can participate in the program, the
types of property eligible for the program, approval process required
for the transfer of the tax credit and the rules applicable to the
transfer process.

Next, the legislation sets forth the administration process for the
program. The legislation creates the Conservation Easement Credit
approval board and sets out its duties and responsibilities, sets
standards for appraisals and requires that the Department of Taxation
and Finance issue yearly reports on the program.

The legislation also provides that property may only be transferred to
"public bodies" or "not-for-profits" that register and become
certified for inclusion in the program. The department of
environmental conservation is instructed to promulgate rules and
regulations to develop the registration and certification system. The
department of environmental conservation and the attorney general will
also have the authority. to revoke a registration if a
"not-for-profit" willfully and with the intent to defraud creates an
easement that does not match the value of the credit received.

Section 4 amends Section 606 of the tax law to create a transferable
conservation, open space and farmland protection credit that can be
applied to corporate and franchise taxes. This section creates the
identical program as in section 3, making it applicable to the
corporate and franchise tax.

JUSTIFICATION:

Easement donations often result in very large charitable deductions.
While those large deductions are useful to high-income land owners,
they offer very little incentive to most real farmer/ranchers, who


rarely have high income tax liabilities. This legislation would
address this situation.

An income tax credit for real property taxes paid on land under a
conservation easement will help landowners bear the annual carrying
costs of land that provides multiple public benefits. This income tax
credit will have a large impact on those landowners who have modest
incomes and are unlikely to benefit significantly from existing tax
deductions. An income tax credit will provide them with an incentive
to make a gift to perpetually conserve land that they otherwise could
not afford to make.

Several states have already enacted similar legislation, including
Colorado, Virginia and South Carolina. In the first two years of
Virginia's program, credit was not transferable. When credits were
made transferable during the following four years of the program, the
average number of donations doubled and the acres protected tripled.
With this legislation, landowners receive a financial reward for
protecting their land, the state advances its goals of land
conservation through tax policy rather than general fund expenditures,
and the public reaps the benefit of lands preserved as open space at a
fraction of their cost.

LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

To be determined.

LOCAL FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act will take effect on the first January next succeeding the
date on which it shall have become law.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5522

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  GIPSON -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in relation to the conservation, open space
  and farmland protection credit trading program

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. This act shall be known and may be cited as the "Conserva-
tion, Open Space and Farmland Protection Credit Trading Program".
  S 2. Legislative intent. Protection of our state natural resources  is
an  important  state  policy.  Conservation  of open space, farmland and
forest protection are important to a healthy and sustainable future. Not
only does land conservation serve an important environmental and  public
health   benefit   such   as  water  quality  protection  and  pollution
prevention, these conserved properties can provide a significant econom-
ic benefit to the people of  this  state.  Farmers  who  participate  in
conservation easements avail themselves to funds to invest in diversify-
ing  and  expanding  their  farm  businesses,  build new infrastructure,
introduce new crops, purchase equipment or livestock, and  perhaps  most
importantly,  transfer  family  farms to the next generation of farmers.
This program is designed to further the policies set out in  article  49
of  the  environmental  conservation  law  and to increase incentives to
landowners to conserve their land. This program  creates  a  market  for
tradable conservation easement credits to stimulate land conservation in
the state of New York.
  S 3. Section 210 of the tax law is amended by adding a new subdivision
47 to read as follows:
  47.  CONSERVATION,  OPEN  SPACE AND FARMLAND PROTECTION CREDIT. (A) AN
ELIGIBLE DONOR WHO DONATES QUALIFIED REAL PROPERTY INTEREST FOR A QUALI-
FIED CONSERVATION PURPOSE TO AN ELIGIBLE DONEE SHALL BE ALLOWED A CREDIT
OWNED BY SUCH TAXPAYER AGAINST THE TAX IMPOSED BY THIS ARTICLE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11087-02-3

S. 5522                             2

  (B) THE VALUE OF THE CREDIT SHALL EQUAL  FIFTY  PERCENT  OF  THE  FAIR
MARKET  VALUE  OF  THE  QUALIFIED  REAL  PROPERTY DONATION CALCULATED TO
EXCLUDE ANY SHORT TERM CAPITAL GAIN PURSUANT TO 26 U.S.C.A.  S  170  (E)
(1)(A).  THE AMOUNT OF THE TAX CREDIT SHALL NOT EXCEED ONE HUNDRED THOU-
SAND  DOLLARS FOR ANY CONTIGUOUS PARCELS OF LAND OWNED BY THE SAME LAND-
OWNER, OR AN ENTITY IN WHICH THE LANDOWNER HAS AN INTEREST.  A  TAXPAYER
SHALL  NOT  BE  ALLOWED ANY OTHER TAX CREDIT AGAINST TAXES IMPOSED UNDER
THIS ARTICLE FOR A CONSERVATION EASEMENT ON SUCH PROPERTY.
  (C) FOR PURPOSES OF THIS SUBDIVISION A QUALIFIED REAL PROPERTY  INTER-
EST  MEANS  A  CONSERVATION EASEMENT AS DEFINED IN ARTICLE FORTY-NINE OF
THE ENVIRONMENTAL CONSERVATION LAW AND THE REGULATIONS PROMULGATED THER-
EUNDER OR A FULL REAL PROPERTY INTEREST AS DEFINED UNDER 26  U.S.C.A.  S
170(H)(2)  AND  CORRESPONDING  REGULATION  IN  26  C.F.R. S 170-A-14(B).
EITHER INTEREST MUST BE IN FULLY INSTATE LAND. NOTWITHSTANDING ANY OTHER
PROVISION OF LAW, A GOLF COURSE DOES NOT QUALIFY AS A CONSERVATION EASE-
MENT FOR PURPOSE OF THIS SUBDIVISION.
  (D) FOR PURPOSES OF THIS  SUBDIVISION  AN  "ELIGIBLE  DONEE"  MEANS  A
"PUBLIC BODY" OR A "NOT-FOR-PROFIT CONSERVATION ORGANIZATION" AS DEFINED
IN  ARTICLE  FORTY-NINE  OF THE ENVIRONMENTAL CONSERVATION LAW. IN ADDI-
TION, TO QUALIFY AS AN ELIGIBLE  DONEE  A  "NOT-FOR-PROFIT  CONSERVATION
ORGANIZATION"  MUST  BE  REGISTERED WITH THE DEPARTMENT OF ENVIRONMENTAL
CONSERVATION.
  (E) ELIGIBLE DONOR MEANS ANY PERSON OR ENTITY  WHO  OWNS  A  QUALIFIED
REAL  PROPERTY INTEREST, INCLUDING INDIVIDUALS, CORPORATIONS, TRUSTS AND
ESTATES, PARTNERS IN PARTNERSHIPS AND OTHER FLOW THROUGH  ENTITIES,  AND
BOTH MARRIAGE PARTNERS.
  (F)  ANY  QUALIFIED DONOR HOLDING A PRE-APPROVED CONSERVATION EASEMENT
CREDIT MAY SELL OR TRANSFER IN PART, OR IN FULL, THE CONSERVATION  EASE-
MENT  CREDIT  TO  ANOTHER  PERSON  OR ENTITY FOR USE AGAINST TAX IMPOSED
UNDER THIS ARTICLE. IN ORDER FOR THE TRANSFEREE OR  PURCHASER  TO  APPLY
THE  CONSERVATION  EASEMENT  TAX  CREDIT  AGAINST TAXES FOR A PARTICULAR
YEAR, THE TRANSFEREE MUST HAVE ACQUIRED THE  CONSERVATION  EASEMENT  TAX
CREDIT  ON  OR BEFORE THE DATE UPON WHICH THE TRANSFEREE'S TAXES ARE DUE
(WITHOUT EXTENSIONS) FOR THE YEAR IN QUESTION.
  (G) LIMITATIONS ON USE  OF  CONSERVATION  EASEMENT  CREDITS.  (1)  THE
CONSERVATION EASEMENT CREDIT MAY NOT BE USED, BY AMENDMENT OR OTHERWISE,
AGAINST TAXES OWING FOR TAX YEARS PRIOR TO THE YEAR IN WHICH THE CONSER-
VATION EASEMENT CREDIT WAS EARNED OR ACQUIRED BY THE TAXPAYER.
  (2)  ONLY  ONE CONSERVATION EASEMENT CREDIT MAY BE EARNED PER A QUALI-
FIED REAL PROPERTY INTEREST DONATION:
  (A) IF THE QUALIFIED REAL PROPERTY INTEREST IS HELD IN  COMMON  OWNER-
SHIP,  THE CONSERVATION EASEMENT CREDIT SHALL BE ALLOCATED IN PROPORTION
TO RESPECTIVE OWNERSHIP SHARES.
  (B) IF THE QUALIFIED REAL PROPERTY INTEREST IS HELD BY A  PASS-THROUGH
ENTITY,   THE   CONSERVATION  EASEMENT  CREDIT  SHALL  BE  ALLOCATED  AS
PRESCRIBED UNDER 26 U.S.C.A.  S 704(B) AND CORRESPONDING REGULATIONS  IN
26 C.F.R. S 1.704A-1(B)(4)(II).
  (3)  AN  ELIGIBLE DONOR MAY EARN ONLY ONE CONSERVATION EASEMENT CREDIT
PER INCOME TAX YEAR.
  (4)(A) THE CREDIT SHALL ONLY APPLY FOR TEN YEARS FOLLOWING THE  QUALI-
FIED REAL PROPERTY DONATION.
  (B)  IN  DETERMINING  ANY  CARRY-FORWARD  AMOUNT,  THE FOLLOWING RULES
APPLY: (I) THE AMOUNT OF CONSERVATION EASEMENT CREDIT USED IN A  TAXABLE
YEAR, WHEN COMBINED WITH ALL OTHER STATE INCOME TAX CREDITS OF THE USER,
MAY  NOT  EXCEED  THE  USER'S  TOTAL STATE TAX LIABILITY FOR THE TAXABLE
YEAR.

S. 5522                             3

  (II) ANY UNUSED PORTION OF CONSERVATION EASEMENT CREDIT MAY BE CARRIED
FORWARD UP TO TEN YEARS. ANY UNUSED PORTION OF A  CONSERVATION  EASEMENT
CREDIT  SHALL  SURVIVE  THE  DEATH  OF THE INDIVIDUAL AND MAY BE USED OR
TRANSFERRED BY THE DECEDENT'S ESTATE.
  (H) APPROVAL PROCESS. (1) BEFORE AN ELIGIBLE DONOR MAY USE OR TRANSFER
A  CONSERVATION EASEMENT CREDIT, AN ELIGIBLE DONOR SHALL ATTAIN APPROVAL
FROM THE EASEMENT CREDIT APPROVAL BOARD ESTABLISHED BY PARAGRAPH (I)  OF
THIS  SUBDIVISION. RECEIPT OF APPROVAL FROM THE EASEMENT CREDIT APPROVAL
BOARD SIGNIFIES ONLY THE  SATISFACTION  OF  THE  SCREENING  REQUIREMENTS
PURSUANT TO SUBPARAGRAPH THREE OF PARAGRAPH (I) OF THIS SUBDIVISION. THE
APPROVAL  HAS NO PROBATIVE VALUE IN ANOTHER STATE OR FEDERAL ADMINISTRA-
TIVE ACTION, SUCH AS AN AUDIT REVIEW OF THE CONSERVATION EASEMENT CREDIT
USED.
  (A) THE ELIGIBLE DONOR SHALL SUBMIT TO THE CONSERVATION EASEMENT CRED-
IT APPROVAL BOARD AN APPLICATION FOR APPROVAL ON A FORM CREATED  BY  THE
CONSERVATION  EASEMENT  CREDIT  APPROVAL BOARD THAT CONTAINS INFORMATION
REQUIRED BY THE CONSERVATION EASEMENT CREDIT APPROVAL  BOARD  TO  ASSESS
THE  CRITERIA  PURSUANT  TO  SUBPARAGRAPH THREE OF PARAGRAPH (I) OF THIS
SUBDIVISION. SUCH DOCUMENTS MAY INCLUDE A DRAFT OR RECORDED CONSERVATION
EASEMENT, A COPY OF A QUALIFIED APPRAISAL, AND ANY OTHER REQUIRED INFOR-
MATION. FOR THE PURPOSES OF THIS SUBDIVISION A QUALIFIED APPRAISAL MEANS
AN APPRAISAL IN ACCORDANCE  WITH  26  C.F.R.  S  170A-13(C)(4)  AND  THE
UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE ("USPAP").
  (B)  AN  ELIGIBLE  DONOR  MAY  APPLY FOR CONDITIONAL APPROVAL BEFORE A
QUALIFIED REAL PROPERTY INTEREST DONATION HAS BEEN RECORDED.  IF  CONDI-
TIONAL  APPROVAL  IS GRANTED, THE APPLICATION MUST BE RESUBMITTED TO THE
CONSERVATION EASEMENT CREDIT APPROVAL BOARD AFTER THE DONATION HAS  BEEN
RECORDED  FOR  THE  LIMITED PURPOSE OF DEMONSTRATING CONFORMITY WITH THE
DRAFT DOCUMENTS.
  (C) THE CONSERVATION EASEMENT CREDIT APPROVAL BOARD SHALL  NOTIFY  THE
ELIGIBLE  DONOR OF ITS DECISION WITHIN SIXTY DAYS OF RECEIVING AN APPLI-
CATION OR WITHIN THIRTY DAYS OF RECEIVING A RESUBMISSION.
  (D) IN  THE  EVENT  OF  APPROVAL,  THE  CONSERVATION  EASEMENT  CREDIT
APPROVAL  BOARD  SHALL  ISSUE A TRACKING NUMBER TO THE DONOR. TO USE THE
CONSERVATION EASEMENT CREDIT, THE DONOR OR TRANSFEREE  SHALL  ENTER  THE
TRACKING  NUMBER  ON THE APPROPRIATE TAX FORMS ISSUED BY THE DEPARTMENT,
THUS INDICATING RECEIPT OF APPROVAL.
  (E) THE CONSERVATION EASEMENT CREDIT APPROVAL BOARD  SHALL  PROVIDE  A
BRIEF  STATEMENT  OF  REASONS  FOR A DECISION TO DENY APPROVAL. ONCE THE
PROBLEMS IDENTIFIED BY THE CONSERVATION EASEMENT CREDIT  APPROVAL  BOARD
HAVE  BEEN  REMEDIED, AN ELIGIBLE DONOR MAY RESUBMIT THE APPLICATION FOR
APPROVAL. DECISIONS TO DENY APPROVAL ARE NOT SUBJECT TO APPEAL.
  (2) THE FOLLOWING RULES AND PROCEDURES MUST BE FOLLOWED TO TRANSFER  A
CONSERVATION EASEMENT CREDIT:
  (A)  A  TRANSFEROR  AND  A TRANSFEREE SHALL NOTIFY THE DEPARTMENT OF A
CONSERVATION EASEMENT CREDIT TRANSFER. BOTH PARTIES  SHALL  PROVIDE  THE
CONSERVATION  EASEMENT  CREDIT TRACKING NUMBER AND AMOUNT TRANSFERRED ON
THE APPROPRIATE TAX FORMS, WHICH SHALL BE  FILED  WITH  THE  INCOME  TAX
RETURN  FOR  THE YEAR IN WHICH THE CONSERVATION EASEMENT CREDIT TRANSFER
IS MADE. A TRANSFEREE MAY NOT USE A  TRANSFERRED  CONSERVATION  EASEMENT
CREDIT  UNLESS THE TRANSFEROR'S WRITTEN STATEMENT VERIFIES THE AMOUNT OF
CONSERVATION EASEMENT CREDIT USED BY THE TRANSFEREE.
  (B) THE DONOR OF A TRANSFERRED CONSERVATION EASEMENT CREDIT  SHALL  BE
THE  TAX-MATTERS  REPRESENTATIVE  IN  ALL  MATTERS  WITH  RESPECT TO THE
CONSERVATION EASEMENT CREDIT.  A  TAX-MATTERS  REPRESENTATIVE  SHALL  BE
RESPONSIBLE FOR REPRESENTING AND BINDING THE TRANSFEREES WITH RESPECT TO

S. 5522                             4

ALL  ISSUES  AFFECTING  THE CONSERVATION EASEMENT CREDIT, INCLUDING, BUT
NOT LIMITED TO, THE APPRAISAL, NOTIFICATIONS,  CORRESPONDENCE  FROM  AND
WITH  THE  DEPARTMENT  AND  THE  IRS,  AUDIT  EXAMINATIONS, ASSESSMENTS,
SETTLEMENT  AGREEMENTS,  AND  THE  STATUTE OF LIMITATIONS AND EXTENSIONS
THEREOF. FINAL RESOLUTIONS OF DISPUTES REGARDING A CONSERVATION EASEMENT
CREDIT BETWEEN THE DEPARTMENT AND A TAX-MATTERS REPRESENTATIVE,  INCLUD-
ING ADMINISTRATIVE AND JUDICIAL DECISIONS, SHALL BE BINDING ON TRANSFER-
EES.
  (C)  IN  THE  EVENT  THE  TRANSFERRED  CONSERVATION EASEMENT CREDIT IS
DISALLOWED OR DEVALUATED IN AUDIT PROCEDURES, THE DEPARTMENT SHALL FIRST
MAKE DEMANDS FOR PAYMENT OF ANY ADDITIONAL TAX, TOGETHER  WITH  INTEREST
AND  PENALTIES,  FROM THE CONSERVATION EASEMENT CREDIT EARNING DONOR. IN
THE EVENT SUCH PAYMENT DEMAND IS NOT VOLUNTARILY SATISFIED WITHIN APPLI-
CABLE TIME LIMIT, THE DEPARTMENT SHALL PROCEED TO COLLECTION AGAINST THE
TRANSFEREES ON A PRO RATA BASIS.
  (I) ADMINISTRATION. (1) TO ADMINISTER THE CONSERVATION, OPEN SPACE AND
FARMLAND PROTECTION CREDIT TRADING PROGRAM, THE  DEPARTMENT  IS  AUTHOR-
IZED:
  (A) TO REQUIRE ADDITIONAL INFORMATION FROM AN ELIGIBLE DONOR OR TRANS-
FEREE  REGARDING  THE APPRAISAL VALUE OF THE EASEMENT, THE AMOUNT OF THE
CONSERVATION EASEMENT PROGRAM, THE VALIDITY OF THE CONSERVATION EASEMENT
CREDIT, AND OTHER RELEVANT MATTERS; AND
  (B) TO REVIEW, FOR GOOD CAUSE SHOWN, AND ACCEPT OR REJECT, IN WHOLE OR
IN PART, ALL ASPECTS RELATING TO A CONSERVATION EASEMENT CREDIT, INCLUD-
ING COMPLIANCE WITH FEDERAL RULES AND REGULATIONS. IN  APPLYING  FEDERAL
RULES  AND  REGULATIONS,  THE  DEPARTMENT SHALL DETERMINE WHETHER A USED
CONSERVATION EASEMENT CREDIT  COMPLIES  WITH  THE  APPROPRIATE  INTERNAL
REVENUE  CODE  SECTIONS AND TREASURY REGULATIONS. ANY POSITIONS TAKEN BY
THE UNITED STATES COMMISSIONER OF THE INTERNAL  REVENUE  SERVICE  AND/OR
ANY  FEDERAL  COURTS  SHOULD  BE  CONSIDERED  BUT ARE NOT BINDING ON THE
DEPARTMENT.
  (2) THERE IS CREATED THE CONSERVATION EASEMENT CREDIT  APPROVAL  BOARD
TO  ADMINISTER  THE  APPROVAL PROCESS SET FORTH IN THIS SUBDIVISION. THE
BOARD SHALL REVIEW APPLICATIONS PURSUANT TO CRITERIA SET FORTH  IN  THIS
SUBDIVISION.
  (A)  THE  CONSERVATION EASEMENT CREDIT APPROVAL BOARD SHALL CONSIST OF
THREE MEMBERS AS FOLLOWS: A REPRESENTATIVE  OF  THE  DEPARTMENT  WHO  IS
KNOWLEDGEABLE  ABOUT  APPRAISAL  VALUATIONS;  A  REPRESENTATIVE  OF  THE
DEPARTMENT OF ENVIRONMENTAL  CONSERVATION  WHO  IS  KNOWLEDGEABLE  ABOUT
CONSERVATION  VALUES;  AND A REPRESENTATIVE OF THE STATE ATTORNEY GENER-
AL'S OFFICE WHO IS KNOWLEDGEABLE ABOUT THE LEGAL REQUIREMENTS FOR QUALI-
FIED REAL PROPERTY INTERESTS.
  (B) THE BOARD MEMBERS  SHALL  BE  APPOINTED  ADMINISTRATIVELY  BY  THE
DIRECTORS  OF THE RESPECTIVE DEPARTMENTS AND MAY BE CHANGED FROM TIME TO
TIME AT THE PLEASURE OF THE APPOINTING AUTHORITY.
  (3) THE  CONSERVATION  EASEMENT  CREDIT  APPROVAL  BOARD  SHALL  LIMIT
APPROVAL REVIEW TO THE FOLLOWING CONSIDERATIONS:
  (A)  WHETHER THE APPRAISAL APPEARS TO MEET MINIMUM USPAP STANDARDS AND
IRS REQUIREMENTS FOR A QUALIFIED APPRAISAL, AND  WHETHER  ITS  VALUATION
DOES NOT APPEAR TO BE MANIFESTLY ABUSIVE.
  (B)  WHETHER THE CONSERVATION VALUES ARGUABLY COMPLY WITH THE REQUIRE-
MENTS PURSUANT TO PARAGRAPH (C) OF THIS SUBDIVISION.
  (C) IN THE CASE OF  A  CONSERVATION  EASEMENT  DONATION,  WHETHER  THE
DOCUMENTATION  REQUIRED  FOR THE EASEMENT ARGUABLY COMPLIES WITH MINIMUM
STANDARDS FOR A QUALIFIED EASEMENT PURSUANT TO ARTICLE FORTY-NINE OF THE
ENVIRONMENTAL CONSERVATION LAW.

S. 5522                             5

  (4) THE DEPARTMENT SHALL ISSUE A  REPORT  EVERY  YEAR  SUMMARIZING  BY
COUNTY THE FOLLOWING ANNUAL TOTALS:
  (A)  NUMBER  OF QUALIFIED REAL PROPERTY INTEREST DONATIONS APPROVED BY
THE CONSERVATION EASEMENT CREDIT APPROVAL BOARD;
  (B) FAIR MARKET VALUE OF QUALIFIED REAL  PROPERTY  INTEREST  DONATIONS
APPROVED BY THE CONSERVATION EASEMENT CREDIT APPROVAL BOARD;
  (C)  VALUE  OF CONSERVATION EASEMENT CREDITS APPROVED BY THE CONSERVA-
TION EASEMENT CREDIT APPROVAL BOARD;
  (D) VALUE OF USED CONSERVATION EASEMENT  CREDITS  BY  CLASS  (ELIGIBLE
DONORS OR TRANSFEREES).
  (E)  ACREAGE  OF QUALIFIED REAL PROPERTY INTERESTS DONATED APPROVED BY
THE CONSERVATION EASEMENT CREDIT APPROVAL BOARD, BY  DONEE  CLASS  (LAND
TRUST, GOVERNMENT, OTHER).
  (J) THE FOLLOWING AGENCIES SHALL HAVE THE FOLLOWING RULEMAKING POWER:
  (1)  THE  DEPARTMENT  OF  ENVIRONMENTAL  CONSERVATION SHALL PROMULGATE
RULES FOR THE IMPLEMENTATION OF THE APPROVAL SCREEN  PURSUANT  TO  PARA-
GRAPH  (I)  OF  THIS  SUBDIVISION.  SUCH  RULES  SHALL BE PROMULGATED IN
ACCORDANCE WITH THE STATE'S ADMINISTRATIVE PROCEDURE ACT STATUTE.
  (2) THE DEPARTMENT SHALL PROMULGATE ALL OTHER  RULES  AND  REGULATIONS
NECESSARY TO IMPLEMENT AND ADMINISTER THIS SUBDIVISION.
  (K)  REGISTRATION  OF  NOT-FOR-PROFIT  ORGANIZATION. THE DEPARTMENT OF
ENVIRONMENTAL CONSERVATION SHALL PROMULGATE ALL  RULES  AND  REGULATIONS
NECESSARY  TO  DEVELOP  A  REGISTRATION  AND  CERTIFICATION  SYSTEM  FOR
NON-PROFIT ORGANIZATIONS TO BE ELIGIBLE FOR CREDIT UNDER  THIS  SUBDIVI-
SION.    ONE  REQUIREMENT MUST BE THAT THE NOT-FOR-PROFIT ADOPT THE LAND
TRUST ALLIANCE "BEST STANDARDS AND PRACTICES". SUCH REGISTRATION MAY  BE
REVOKED  BY THE CONSERVATION EASEMENT CREDIT APPROVAL BOARD, THE DEPART-
MENT OF ENVIRONMENTAL CONSERVATION OR THE ATTORNEY GENERAL UPON A  FIND-
ING  THAT  THE NOT-FOR-PROFIT ORGANIZATION WILLFULLY AND WITH THE INTENT
TO DEFRAUD CREATED AN EASEMENT THAT DOES NOT  MATCH  THE  VALUE  OF  THE
CREDIT RECEIVED.
  S  4. Section 606 of the tax law is amended by adding a new subsection
(ww) to read as follows:
  (WW) CONSERVATION, OPEN SPACE AND FARMLAND PROTECTION CREDIT.  (1)  AN
ELIGIBLE DONOR WHO DONATES QUALIFIED REAL PROPERTY INTEREST FOR A QUALI-
FIED CONSERVATION PURPOSE TO AN ELIGIBLE DONEE SHALL BE ALLOWED A CREDIT
OWNED BY SUCH TAXPAYER AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (2)  THE  VALUE  OF  THE  CREDIT SHALL EQUAL FIFTY PERCENT OF THE FAIR
MARKET VALUE OF THE  QUALIFIED  REAL  PROPERTY  DONATION  CALCULATED  TO
EXCLUDE  ANY  SHORT  TERM  CAPITAL GAIN PURSUANT TO 26 U.S.C.A. S 170(E)
(1)(A). THE AMOUNT OF THE TAX CREDIT SHALL NOT EXCEED ONE HUNDRED  THOU-
SAND  DOLLARS FOR ANY CONTIGUOUS PARCELS OF LAND OWNED BY THE SAME LAND-
OWNER, OR AN ENTITY IN WHICH THE LANDOWNER HAS AN INTEREST.
  (3) FOR PURPOSES OF THIS SUBSECTION A QUALIFIED REAL PROPERTY INTEREST
MEANS A CONSERVATION EASEMENT AS DEFINED IN ARTICLE  FORTY-NINE  OF  THE
ENVIRONMENTAL  CONSERVATION  LAW  AND THE REGULATIONS PROMULGATED THERE-
UNDER OR A FULL REAL PROPERTY INTEREST AS DEFINED UNDER 26 U.S.C.A.    S
170(H)(2)  AND  CORRESPONDING  REGULATION  IN  26  C.F.R. S 170-A-14(B).
EITHER INTEREST MUST BE IN FULLY INSTATE LAND. NOTWITHSTANDING ANY OTHER
PROVISION OF LAW, A GOLF COURSE DOES NOT QUALIFY AS A CONSERVATION EASE-
MENT FOR PURPOSES OF THIS SUBSECTION.
  (4) FOR PURPOSES OF  THIS  SUBSECTION  AN  "ELIGIBLE  DONEE"  MEANS  A
"PUBLIC BODY" OR A "NOT-FOR-PROFIT CONSERVATION ORGANIZATION" AS DEFINED
IN  ARTICLE  FORTY-NINE  OF THE ENVIRONMENTAL CONSERVATION LAW. IN ADDI-
TION, TO QUALIFY AS AN ELIGIBLE  DONEE  A  "NOT-FOR-PROFIT  CONSERVATION

S. 5522                             6

ORGANIZATION"  MUST  BE  REGISTERED WITH THE DEPARTMENT OF ENVIRONMENTAL
CONSERVATION.
  (5)  ELIGIBLE  DONOR  MEANS  ANY PERSON OR ENTITY WHO OWNS A QUALIFIED
REAL PROPERTY INTEREST, INCLUDING INDIVIDUALS, CORPORATIONS, TRUSTS  AND
ESTATES,  PARTNERS  IN PARTNERSHIPS AND OTHER FLOW THROUGH ENTITIES, AND
BOTH MARRIAGE PARTNERS.
  (6) ANY QUALIFIED DONOR HOLDING A PRE-APPROVED  CONSERVATION  EASEMENT
CREDIT  MAY SELL OR TRANSFER IN PART, OR IN FULL, THE CONSERVATION EASE-
MENT CREDIT TO ANOTHER PERSON OR ENTITY  FOR  USE  AGAINST  TAX  IMPOSED
UNDER  THIS  ARTICLE.  IN ORDER FOR THE TRANSFEREE OR PURCHASER TO APPLY
THE CONSERVATION EASEMENT TAX CREDIT  AGAINST  TAXES  FOR  A  PARTICULAR
YEAR,  THE  TRANSFEREE  MUST HAVE ACQUIRED THE CONSERVATION EASEMENT TAX
CREDIT ON OR BEFORE THE DATE UPON WHICH THE TRANSFEREE'S TAXES  ARE  DUE
(WITHOUT EXTENSIONS) FOR THE YEAR IN QUESTION.
  (7)  LIMITATIONS  ON  USE  OF  CONSERVATION  EASEMENT CREDITS. (A) THE
CONSERVATION EASEMENT CREDIT MAY NOT BE USED, BY AMENDMENT OR OTHERWISE,
AGAINST TAXES OWING FOR TAX YEARS PRIOR TO THE YEAR IN WHICH THE CONSER-
VATION EASEMENT CREDIT WAS EARNED OR ACQUIRED BY THE TAXPAYER.
  (B) ONLY ONE CONSERVATION EASEMENT CREDIT MAY BE EARNED PER  QUALIFIED
REAL PROPERTY INTEREST DONATION:
  (I)  IF  THE QUALIFIED REAL PROPERTY INTEREST IS HELD IN COMMON OWNER-
SHIP, THE CONSERVATION EASEMENT CREDIT SHALL BE ALLOCATED IN  PROPORTION
TO RESPECTIVE OWNERSHIP SHARES.
  (II) IF THE QUALIFIED REAL PROPERTY INTEREST IS HELD BY A PASS-THROUGH
ENTITY,   THE   CONSERVATION  EASEMENT  CREDIT  SHALL  BE  ALLOCATED  AS
PRESCRIBED UNDER 26 U.S.C.A.  S 704(B) AND CORRESPONDING REGULATIONS  IN
26 C.F.R. S 1.704A-1(B)(4)(II).
  (C)  AN  ELIGIBLE DONOR MAY EARN ONLY ONE CONSERVATION EASEMENT CREDIT
PER INCOME TAX YEAR.
  (D)(I) THE CREDIT SHALL ONLY APPLY FOR TEN YEARS FOLLOWING THE  QUALI-
FIED REAL PROPERTY DONATION.
  (II)  IN  DETERMINING  ANY  CARRY-FORWARD  AMOUNT, THE FOLLOWING RULES
APPLY: (I) THE AMOUNT OF CONSERVATION EASEMENT CREDIT USED IN A  TAXABLE
YEAR, WHEN COMBINED WITH ALL OTHER STATE INCOME TAX CREDITS OF THE USER,
MAY  NOT  EXCEED  THE  USER'S  TOTAL STATE TAX LIABILITY FOR THE TAXABLE
YEAR.
  (II) ANY UNUSED PORTION OF CONSERVATION EASEMENT CREDIT MAY BE CARRIED
FORWARD UP TO TEN YEARS. ANY UNUSED PORTION OF A  CONSERVATION  EASEMENT
CREDIT  SHALL  SURVIVE  THE  DEATH  OF THE INDIVIDUAL AND MAY BE USED OR
TRANSFERRED BY THE DECEDENT'S ESTATE.
  (8) APPROVAL PROCESS. CREDITS UNDER THIS SUBSECTION  SHALL  BE  DETER-
MINED  IN ACCORDANCE WITH THE PROCEDURES, RULES AND PROVISIONS SET FORTH
IN PARAGRAPHS (H), (I),  (J)  AND  (K)  OF  SUBDIVISION  FORTY-SEVEN  OF
SECTION TWO HUNDRED TEN OF THIS CHAPTER.
  S  5. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

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