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H0467...............................................by REVENUE AND TAXATION RANCH, FARM AND FOREST PROTECTION ACT - Adds to existing law to enact the Ranch, Farm and Forest Protection Act to provide legislative intent; to define terms; and to provide an income tax credit for voluntary conservation of ranch, farm and forest land. 02/06 House intro - 1st rdg - to printing 02/07 Rpt prt - to Rev/Tax 03/05 Rpt out - to Gen Ord 03/06 Ret'd to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 467 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO TAXATION; PROVIDING LEGISLATIVE INTENT; AMENDING TITLE 63, IDAHO 3 CODE, BY THE ADDITION OF A NEW CHAPTER 45, TITLE 63, IDAHO CODE, TO PRO- 4 VIDE A SHORT TITLE, TO DEFINE TERMS, TO PROVIDE AN INDIVIDUAL AND CORPO- 5 RATE INCOME TAX CREDIT FOR VOLUNTARY CONSERVATION OF RANCH, FARM AND FOR- 6 EST LAND, TO PROVIDE FOR REFUND AND TO PROVIDE FOR ADMINISTRATION; DECLAR- 7 ING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION. 8 Be It Enacted by the Legislature of the State of Idaho: 9 SECTION 1. LEGISLATIVE INTENT. (1) It is hereby declared by the Legisla- 10 ture of the State of Idaho that: 11 (a) Idaho's working ranches, farms and forests provide important benefits 12 to all Idahoans by sustaining habitat for wildlife, intact watersheds for 13 clean water, and the economy, custom and culture of local communities; 14 (b) Working ranches, farms and forests, and the benefits they provide, 15 are being lost at a rapid rate; 16 (c) Many of Idaho's rural landowners are deeply committed to maintaining 17 agriculture and forestry traditions and to serving as stewards of fish, 18 wildlife and plants; 19 (d) The state of Idaho is actively pursuing cooperative programs to pro- 20 tect fish and wildlife habitat and address the population decline of some 21 of Idaho's species; and 22 (e) The state of Idaho must marshal the various resources of the state in 23 a cooperative, consensus-based approach to address the needs of fish, 24 wildlife and plants. 25 (2) It is hereby declared that the purposes of this act are to: 26 (a) Conserve lands important for fish, wildlife and plants as a legacy 27 for future generations; 28 (b) Provide a tax credit to honor the stewardship commitment of ranch, 29 farm and forest land owners who make voluntary donations to conserve such 30 lands; 31 (c) Ensure that lands subject to such tax credit will remain available 32 for continued agricultural and forestry uses; 33 (d) Target the tax credit on lands that have been specifically identified 34 as meeting the objectives of the state of Idaho for the conservation of 35 fish, wildlife and plants; 36 (e) Provide oversight to ensure accountability in the use of the tax 37 credit and to coordinate the tax credit with the ongoing wildlife priori- 38 ties and programs of the state of Idaho; and 39 (f) Avoid affecting property tax revenue because lands subject to volun- 40 tary conservation donations under this act will be assessed based on their 41 continued use for agriculture or forestry or, if managed for wildlife pur- 42 poses pursuant to section 63-605, Idaho Code, at their previous agricul- 43 tural rate. 2 1 SECTION 2. That Title 63, Idaho Code, be, and the same is hereby amended 2 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap- 3 ter 45, Title 63, Idaho Code, and to read as follows: 4 CHAPTER 45 5 RANCH, FARM AND FOREST PROTECTION ACT 6 63-4501. SHORT TITLE. This chapter shall be known and may be cited as the 7 "Idaho Ranch, Farm and Forest Protection Act." 8 63-4502. DEFINITIONS. As used in this chapter: 9 (1) "Advisory board" means the conservation tax credit advisory board 10 established in section 63-4505, Idaho Code. 11 (2) "Commission" means the state tax commission. 12 (3) "Eligible lands" means an identified parcel of land located in the 13 state of Idaho and actively devoted to agriculture as defined in section 14 63-604, Idaho Code, or held as forest land as defined in section 63-1701, 15 Idaho Code. 16 (4) "Plants" means communities of vegetation that are unique, high qual- 17 ity or composed of rare or declining species, as well as other vegetation 18 important to fish, wildlife and water quality. 19 (5) "Qualified sponsor" means any governmental entity authorized to hold 20 interests in real property, or any private not-for-profit charitable organiza- 21 tion organized for land conservation purposes. To be a qualified sponsor, a 22 not-for-profit charitable organization must: 23 (a) Be authorized to do business in the state of Idaho and have tax 24 exempt status as a charity under section 501(c)(3) of the Internal Revenue 25 Code; 26 (b) Meet the requirements of an "eligible donee" as defined in 26 CFR 27 1.170A-14(c)(1), and therefore have the power to acquire, hold, or main- 28 tain land or interests in land; 29 (c) Have adopted, by resolution of the organization's board of directors, 30 the land trust alliance's standards and practices as guidelines for the 31 organization's operation and be committed to making continual progress 32 toward implementation of these standards and practices; 33 (d) Have been operated in good standing as a not-for-profit corporation 34 under Idaho laws for a period of not less than two (2) years; and 35 (e) Have registered with the advisory board, established in section 36 63-4505, Idaho Code, showing that it has met the requirements of this 37 chapter. 38 (6) "Taxpayer" means any taxpayer as defined in section 63-3009, Idaho 39 Code. 40 (7) "Voluntary conservation donation" means the conveyance of a conserva- 41 tion easement, pursuant to chapter 21, title 55, Idaho Code, on eligible 42 lands, provided that such conservation easement satisfies the requirements of 43 section 170(h) of the Internal Revenue Code, except that such conservation 44 easement may be for a term less than in perpetuity but greater than thirty 45 (30) years. A voluntary conservation donation includes the value of the chari- 46 table contribution made when the taxpayer sells the conservation easement to a 47 qualified sponsor for less than its market value, as established by the 48 taxpayer's qualified appraisal, where such contribution value is claimed in 49 compliance with sections 170 and 1011(b) of the Internal Revenue Code. The 50 terms of such conservation easement shall reserve to the landowner the right 51 to continue agricultural or forestry uses on all or part of the eligible 52 lands. A voluntary conservation donation may include conveyance of a right of 3 1 public access. 2 63-4503. TAX CREDIT FOR VOLUNTARY CONSERVATION OF RANCH, FARM AND FOREST 3 LAND. (1) Subject to the limitations of this chapter, a taxpayer who makes a 4 voluntary conservation donation to a qualified sponsor shall be allowed a 5 credit against taxes imposed in sections 63-3024, 63-3025 and 63-3025A, Idaho 6 Code, in the amount of fifty percent (50%) of the fair market value of such 7 voluntary conservation donation. The total amount of the tax credit that may 8 be claimed by a taxpayer shall not exceed five hundred thousand dollars 9 ($500,000) per voluntary conservation donation. 10 (2) The fair market value of voluntary conservation donations made under 11 this chapter shall be substantiated by a "qualified appraisal" prepared by a 12 "qualified appraiser," as those terms are defined under applicable federal law 13 and regulations governing income tax deductions for charitable contributions, 14 provided that the valuation of voluntary conservation donations for a term of 15 less than in perpetuity shall comply with any guidelines for valuation of such 16 donations adopted by the advisory board. Such qualified appraisal shall be 17 prepared in conformance with the uniform standards of professional appraisal 18 practice. Such qualified appraiser shall be licensed or certified pursuant to 19 the Idaho real estate appraisers act, chapter 41, title 54, Idaho Code. A copy 20 of the appraisal must be provided to the commission with the taxpayer's return 21 for the year in which the credit is claimed. 22 (3) To qualify for the tax credit established by this section, a volun- 23 tary conservation donation must further at least one (1) of the following 24 objectives: 25 (a) To protect lands important to fish, wildlife and plants, including 26 but not limited to: big game winter range, fish spawning and rearing 27 areas, river corridors and flood plains, riparian areas, wetlands, migra- 28 tion corridors and other important habitats; 29 (b) To assist in agreements and plans with governmental entities for the 30 conservation of endangered, threatened, petitioned, candidate, rare or 31 declining species; 32 (c) To further the plan for state conservation assessments and strategies 33 for rare and declining species prepared by the office of species conserva- 34 tion pursuant to section 67-818, Idaho Code; and 35 (d) To meet any additional criteria adopted by the conservation tax 36 credit advisory board established in section 63-4505, Idaho Code. 37 (4) The unused portion of the tax credit shall survive the death of the 38 taxpayer and may be claimed by the decedent's estate and passed on to its ben- 39 eficiaries. 40 (5) A taxpayer and any person related to the taxpayer as defined in sec- 41 tion 267 of the Internal Revenue Code may claim only one (1) tax credit under 42 this section per income taxable year. 43 (6) With regard to any tax credits for voluntary conservation donations 44 made by a joint tenancy, tenancy in common, partnership, S corporation, or 45 other similar entity or ownership group that makes such donation as an entity 46 or group, the amount of the credit allowed pursuant to subsection (1) of this 47 section shall be allocated to the entity's owners, partners, members or share- 48 holders in proportion to the owners', partners', members' or shareholders' pro 49 rata or distributive shares as determined by the controlling agreement with 50 regard to assets of such entity or group. Such tax credits may not be claimed 51 by the entity and the member, manager, partner, shareholder and/or beneficiary 52 for the same voluntary conservation donation. 53 63-4504. REFUND. If the amount of the credit under this chapter for any 4 1 taxable year shall exceed the taxpayer's tax due for such year, the excess 2 shall be treated as an overpayment of tax to be credited or refunded from the 3 state refund account provided for in section 63-3067, Idaho Code, with no 4 interest on the credit or refund. The amount refunded shall not constitute 5 Idaho taxable income. 6 63-4505. ADMINISTRATION. (1) The state tax commission shall enforce the 7 provisions of this chapter and may prescribe, adopt and enforce reasonable 8 rules relating to the administration and enforcement of those provisions. For 9 purposes of carrying out its duties to enforce or administer the provisions of 10 this chapter, the commission shall have the powers and duties provided in sec- 11 tions 63-3038, 63-3039, 63-3042 through 63-3068, 63-3071, 63-3074 through 12 63-3078 and 63-217, Idaho Code. 13 (2) There is hereby created the conservation tax credit advisory board 14 that will assist the commission in the implementation of this chapter. The 15 advisory board shall consist of the following members appointed by and serving 16 at the pleasure of the governor: 17 (a) A representative of livestock grazing interests; 18 (b) A representative of farming interests; 19 (c) A representative of private forestry interests; 20 (d) Two (2) members representing the interests of hunting, fishing, or 21 fish and wildlife conservation; 22 (e) A representative of the department of fish and game; 23 (f) A representative of the office of species conservation; 24 (g) A representative of the department of lands; and 25 (h) A representative of the department of agriculture. 26 (3) The governor shall appoint the chair of the advisory board from among 27 its members. 28 (4) The advisory board shall have the following powers and duties: 29 (a) To establish, by rule, criteria for the review, approval or rejection 30 of tax credit applications; 31 (b) To establish procedures for administration of the tax credit includ- 32 ing, but not limited to, submission and review of applications for pro- 33 posed use of the tax credit and guidelines for valuation of voluntary con- 34 servation donations that are for a term less than in perpetuity; 35 (c) To approve or reject tax credit applications based on consideration 36 of the objectives of this chapter, the duration of the voluntary conserva- 37 tion donation, any procedures and criteria established by the advisory 38 board, and the public interest; 39 (d) To reject in whole or in part any tax credit application that would 40 represent an inefficient or abusive use of the tax credit or that contains 41 an improper valuation of the voluntary conservation donation; 42 (e) To register not-for-profit charitable organizations as qualified 43 sponsors; 44 (f) To complete an annual report describing the use of the tax credit, 45 the location and acreage of lands subject to voluntary conservation dona- 46 tions, the conservation benefits of donations, the fiscal impact of the 47 tax credit and any proposed modifications in the tax credit program; 48 (g) To coordinate the use of the tax credit with the ongoing wildlife 49 priorities and programs of the state of Idaho; and 50 (h) In accordance with chapter 52, title 67, Idaho Code, to promulgate, 51 adopt, amend and rescind any rules necessary for the implementation of the 52 advisory board's powers and duties. 53 (5) No tax credit shall be allowed under this chapter unless the taxpayer 54 files with the taxpayer's income tax return a certification that the advisory 5 1 board has approved its application for use of the tax credit. 2 (6) In no case shall the advisory board approve, during any calendar 3 year, tax credits which exceed three million dollars ($3,000,000) in total. 4 (7) For budgetary and administrative support purposes, the advisory board 5 shall be assigned to the office of species conservation. The advisory board 6 may request staff services from the commission and any department or office 7 represented on the advisory board. Members of the advisory board shall serve 8 without compensation except for reimbursement of actual and necessary expenses 9 pursuant to section 59-509(b), Idaho Code. 10 (8) Each application to the advisory board for a proposed use of the tax 11 credit shall contain all of the following: 12 (a) Identification of the donor and qualified sponsor serving as donee; 13 (b) The draft conservation easement upon which the voluntary conservation 14 donation is based and any other documentation of how such lands meet the 15 purposes for voluntary conservation donations and the criteria established 16 by the advisory board; 17 (c) A statement of the estimated fair market value of the proposed volun- 18 tary conservation donation; 19 (d) A certification from the donor that the voluntary conservation dona- 20 tion was not, and is not, required to satisfy a requirement or condition 21 imposed upon the donor by any subdivision or building approval, lease, 22 permit, license, certificate or other entitlement for use issued by fed- 23 eral, state or local governmental entities other than permits and agree- 24 ments provided for in 16 U.S.C. sections 1531, et seq; 25 (e) A certification from the qualified sponsor serving as donee that it 26 has reviewed and approves the application; and 27 (f) Such other contents as may be prescribed by the commission or the 28 advisory board. 29 (9) Within ninety (90) days following approval of the application by the 30 advisory board or such other time specified in procedures adopted by the advi- 31 sory board, the taxpayer shall submit to the advisory board the appraisal 32 required in section 63-4503(2), Idaho Code, stating the estimated fair market 33 value of the voluntary conservation donation. The amount of the voluntary con- 34 servation donation claimed on the taxpayer's return filed with the commission 35 shall not exceed one hundred twenty percent (120%) of the statement of esti- 36 mated fair market value contained in the application approved by the advisory 37 board. 38 (10) (a) Credits under this chapter are subject to recapture by the com- 39 mission when: 40 (i) The board determines and notifies the commission that the 41 credit was not properly granted; or 42 (ii) The commission determines that the credit has been claimed on a 43 tax return for an amount not otherwise permitted in this chapter. 44 (b) The commission is authorized to disclose to the board any informa- 45 tion, however obtained, that is or may be relevant to a determination 46 regarding the granting of the credit. 47 (c) Any amount subject to recapture under this section is a deficiency in 48 tax in the taxable year in which the determination in paragraph (a) of 49 this subsection is made and may be enforced and collected in the manner 50 provided in the Idaho income tax act. 51 SECTION 3. An emergency existing therefore, which emergency is hereby 52 declared to exist, this act shall be in full force and effect on and after its 53 passage and approval, and retroactively to January 1, 2008.
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STATEMENT OF PURPOSE
RS 17695
The Ranch, Farm and Forest Protection Act is intended to help keep
Idaho's rural working lands working and give the State of Idaho a tool to meet
the State's most important wildlife objectives. Idaho's working farms,
ranches and timberlands offer the way of life, rural character, open space and
outdoor recreation vital to maintaining Idaho's natural resource heritage.
They also provide lands that sustain the state's fish and wildlife.
The Ranch, Farm and Forest Protection Act would provide a tax credit to
owners of agricultural and forest land who voluntarily agree not to develop
lands important to fish and wildlife. Eligible lands must remain available
for continued agricultural and forestry uses. An advisory board will review
each proposed use of the tax credit to ensure that it meets wildlife
objectives and to safeguard against misuse of the credit. A landowner who
meets the criteria set by the advisory committee will receive a refundable
income tax credit equal to 50% of the appraised value of his voluntary
conservation donation, with a maximum credit of $500,000.
FISCAL NOTE
The maximum amount of tax credits authorized annually will not exceed $3
million.
Contact
Name: Suzanne Budge, SBS Associates
Phone: 208.850.3065
On behalf of:
Idaho Cattle Association; Idaho Farm Bureau; Idaho Forest Owners
Association; Idaho Sportsmen's Caucus Advisory Council; Idaho
Woolgrowers Associations; Intermountain Forest Association; Land
Trusts in Idaho; Rocky Mountain Elk Foundation; Sportsmen for
Fish and Wildlife; The Nature Conservancy; The Trust for Public
Land.
STATEMENT OF PURPOSE/FISCAL NOTE H 467