An Incentive for Conservation by Private Landowners
Landowners across the North Carolina have embraced the Conservation Tax Credit as a way to pursue their personal motivations for conservation. Authorized by the state in 1983, these income tax credits provide an incentive for private landowners to participate in efforts to conserve the state's natural resources and to allow appropriate public use. What is most important is that landowners have the option to explore alternatives and find the combination that best meets their individual needs.
Through the use of conservation easements, donors can continue to own and use their land for specified purposes, while relinquishing development rights. They may simply want to see their land protected in perpetuity from development, or they may want to protect the viability of their farming or forestry business. Perhaps they are interested in preserving an historic landscape, the viewshed of the Blue Ridge Parkway, or a coastal salt marsh and maritime forest complex. They may add land to a local greenway system, beach access site, environmental education center - to a state park, gameland or historic site - or to a national park, forest, or natural and scenic river.
More than 109,000 acres had been conserved through the end of the 2002 tax year. These donations have been to the State, local governments, and to nonprofit organizations created to own and manage land for conservation purposes. Donors have bargain sold (at less than fair market value) land in many instances, saving the recipients more than $48 million. Equally significant is the more than $87 million of value that has been donated, in excess of the value that can be counted toward creation of the tax credit.
The General Assembly recently authorized a study in House Bill 1602 that could lead to further improvements to this incentive program. The Revenue Laws Study Committee will review and report by February 1, 2005 on the following eight issues:
1. The coordination between DENR and Dept. of Revenue in administering the credits.
2. Criteria by which DENR determines whether a donation provides public benefits.
3. The integrity of appraisals submitted by donors and procedures for preventing abuse of the credits.
4. Qualifications and certifications of the government and nonprofit agencies that receive the donations.
5. Long-term stewardship of conservation easements.
6. Rising land prices and the effect of the credit caps on the amount of credit that can be claimed.
7. Options for carryforward, refundability, and transfer of the credits.
8. Any other issues the committee considers relevant to tax incentives for encouraging farmers, landowners, and developers to conserve land.
For more information about how to become involved in the Conservation Tax Credit Program, go to www.enr.state.nc.us/conservationtaxcredit/.
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