SF 1623

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to income tax; establishing the Minnesota Land Conservation Incentives
Act of 2007; providing a credit for certain land donations; proposing coding for
new law in Minnesota Statutes, chapters 84; 290.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [84.635] MINNESOTA LAND CONSERVATION INCENTIVES ACT.
new text end

new text begin Subdivision 1. new text end

new text begin Citation. new text end

new text begin This section may be cited as the "Minnesota Land
Conservation Incentives Act of 2007."
new text end

new text begin Subd. 2. new text end

new text begin Purpose and findings. new text end

new text begin (a) The legislature finds that Minnesota's unique
natural resources are of significant benefit to the state and the public.
new text end

new text begin (b) The legislature finds that the state of Minnesota's unique natural resources and
distinctive natural heritage, including habitat for plants, animals, and natural communities,
are being lost at an alarming rate.
new text end

new text begin (c) The legislature finds that much of Minnesota's unique natural resources and
habitats are found on lands which are privately owned.
new text end

new text begin (d) The legislature shall provide private landowners with incentives to encourage
protection of private lands for natural resources, biodiversity conservation, and outdoor
recreation purposes.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (a) "Interest in real property" means any right in real property including: a fee
simple; access to property; improvements on a property; an easement; a conservation
easement, provided such interest complies with the requirements of section 170(h) of the
Internal Revenue Code; a partial interest; mineral rights; a remainder or future interest; or
other interest or right in real property that can be legally conveyed.
new text end

new text begin (b) "Public or private conservation agency" means any governmental body, or any
private not-for-profit charitable corporation or trust authorized to do business in Minnesota
and organized and operated for natural resources or land conservation purposes, and
having tax-exempt status as a public charity under the Internal Revenue Code of 1986, as
amended, and having the power to acquire, hold, and maintain real property and interests
in real property for such purposes.
new text end

new text begin (c) "Eligible taxpayer" means a taxpayer who:
new text end

new text begin (1) donates an interest in real property to a public or private conservation agency;
new text end

new text begin (2) has the donation approved for a tax credit under subdivision 5, clause (1); and
new text end

new text begin (3) has been granted a certificate for the tax credit under subdivision 5, clause (2).
new text end

new text begin Subd. 4. new text end

new text begin Tax credit. new text end

new text begin (a) An eligible taxpayer may take a credit under section
290.0678 against the tax due under chapter 290 for an amount equal to up to 50 percent of
the fair market value of any donation of an interest in real property located in Minnesota
which satisfies the requirements and purposes of this section.
new text end

new text begin (b) The conveyance of an interest in real property must be an unconditional
donation in perpetuity by the taxpayer for the purpose of natural resource or biodiversity
conservation to a public or private conservation agency eligible to hold such land for
conservation or preservation purposes.
new text end

new text begin (c) The fair market value of qualified donations made under this section shall be
substantiated by a qualified appraisal prepared by a qualified appraiser, as those terms are
defined under applicable federal law and regulations governing charitable contributions.
new text end

new text begin (d) A taxpayer must establish eligibility and receive a land conservation credit tax
certificate from the commissioner in order to receive the credit.
new text end

new text begin (e) The maximum statewide credit amount is $2,000,000 for each taxable year.
new text end

new text begin Subd. 5. new text end

new text begin Duties. new text end

new text begin The commissioner shall:
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new text begin (1) approve donations of an interest in real property to a public or private
conservation agency for a tax credit under this section and section 290.0678;
new text end

new text begin (2) determine criteria and priorities for awarding certificates for the tax credit, in
accordance with section 290.0678, to taxpayers approved for the tax credit under clause
(1);
new text end

new text begin (3) provide a certificate to taxpayers who qualify under clause (1) and are granted
the credit under clause (2), notifying the taxpayer of the taxpayer's eligibility to take the
credit under 290.0678, of the amount of tax credit the taxpayer has been awarded, and
that the taxpayer must submit the certificate with the taxpayer's returns in order to claim
the credit; and
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new text begin (4) not award more than a total of $2,000,000 worth in tax credit certificates per year.
new text end

new text begin Subd. 6. new text end

new text begin Authorizing rulemaking; requiring report. new text end

new text begin (a) The commissioner of
natural resources shall adopt such rules as may be deemed necessary to implement a
tax incentive program to award tax certificates under this section. The commissioner,
upon the five-year anniversary of the enactment of this section or any renewals thereof
shall prepare a report to the legislature showing the lands protected during such period
under this section.
new text end

new text begin (b) The Department of Revenue in consultation with the commissioner may adopt
rules necessary to administer the tax incentives provided for in this section and shall
coordinate with the agencies referenced in subdivision 3, paragraph (c), in the preparation
of the report to the legislature showing the fiscal impact on Minnesota of the credits
claimed under this section.
new text end

new text begin Subd. 7. new text end

new text begin Construction. new text end

new text begin No part of this section shall be interpreted to alter or
amend any permit requirements, reporting requirements, allocation procedures, or other
requirements set forth in any other provision of state law.
new text end

Sec. 2.

new text begin [290.0678] LAND CONSERVATION CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin (a) A taxpayer is allowed a credit against the tax
imposed by this chapter for qualified donations of real property for land conservation
purposes if the requirements under section 84.635 and this section are satisfied.
new text end

new text begin (b) For the purposes of this section, "qualified donations" means the conveyance
in perpetuity of a fee interest in real property or a less-than-fee interest in real property,
provided that such less-than-fee interest qualifies as a charitable contribution deduction
under section 170(h) of the Internal Revenue Code of 1986. Dedication 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 for the purposes of this credit.
new text end

new text begin (c) To be eligible for treatment as qualified donations under this section, donations
of land, or interests in lands, must be determined by the commissioner of natural resources
to fulfill the purposes set forth in section 84.635, subdivision 2.
new text end

new text begin (d) The credit may be claimed only after approval and certification by the
commissioner of natural resources under section 84.635.
new text end

new text begin Subd. 2. new text end

new text begin Process. new text end

new text begin To claim the credit, the taxpayer must apply to the Department of
Natural Resources. The commissioner of natural resources shall issue certificates verifying
eligibility for and the amount of the credit. The taxpayer shall attach the certificate to any
tax return on which the credit is claimed.
new text end

new text begin Subd. 3. new text end

new text begin Credit limitations. new text end

new text begin (a) The amount of the credit that may be claimed
by a taxpayer shall not exceed $100,000.
new text end

new text begin (b) The credit is limited to the liability for tax, as computed under this chapter for the
taxable year. If the amount of the credit determined under this section for any taxable year
exceeds this limitation, the excess is a land conservation credit carryover to each of the 20
succeeding taxable years. The entire amount of the excess unused credit for the taxable
year is carried first to the earliest of the taxable years to which the credit may be carried
and then to each successive year to which the credit may be carried. The amount of the
unused credit which may be added under this paragraph shall not exceed the taxpayer's
liability for tax less the land conservation credit for the taxable year.
new text end

new text begin (c) The tax credits provided by this section shall apply to donations of land in taxable
years beginning after December 31, 2007.
new text end

new text begin (d) Any taxpayer claiming a tax credit under this section may not claim a credit
under any similar law for the same donation.
new text end

new text begin (e) Any tax credits which arise under this section from the donation of land made by
a pass-through tax entity such as a trust, estate, partnership, limited liability corporation,
limited partnership, subchapter S corporation, or other fiduciary shall be used either by
such entity in the event it is the taxpayer on behalf of such entity or by the member,
manager, partner, shareholder, or beneficiary, as the case may be, in proportion to its
interest in such entity in the event that income, deductions, and tax liability passes through
such entity to such member, manager, partner, shareholder, or beneficiary. Such tax credits
may not be claimed by both the entity and the member, manager, partner, shareholder, or
beneficiary for the same donation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end