Frequently Asked Questions
Q. What is a conservation
A. A conservation
tax credit is a credit against a landowner’s income tax awarded
to the landowner if he/she donates land or water rights to the state
or to a qualified nonprofit organization for certain conservation
purposes. Conservation tax credits should not be confused with credits
awarded for energy or water conservation.
Q. What property
qualifies for the credit?
- Property, including water rights, that meets the goals of
a conservation plan or a similar plan;
- Property, including water rights, that harbors or aids the
survival endangered species or habitat;
- Agricultural land threatened by development; and
- Property that will increase public access to the state’s
See Section 5 of the bill
text. Fee interest donations, conservation easements,
and water rights are all acceptable protection mechanisms under
Q. Who is “the
board” and what is their role in the program?
A. In California,
the Wildlife Conservation
Board (WCB) is in charge of the program. The WCB consists of
one official each from the state Fish and Game Commission, Department
of Finance, and Department of Fish and Game, and has a six-member
legislative advisory committee. Many states with conservation tax
credit programs also have certifying boards or agencies. In Delaware,
the Department of Natural Resources and Environmental Control, in
conjunction with the Department of State and Division of Historical
and Cultural Resources, certifies donations. The job is relegated
to the Board of Public Works for the program in Maryland and, in
North Carolina, the Department of Environment and Natural Resources
accepts applications for donations. The Natural Heritage Preservation
Tax Credit Act authorizes “the board” to implement the
conservation tax credit program. The board is required to adopt
guidelines for the program according to rules spelled out in the
act. Once the program is established, the board considers and certifies
applications for donations from designated donees.
Q. How can the
state be a donee?
A. In California,
Agency contains departments and conservancies created by statute
that may act as donees. The mission of the Resources Agency is to
restore, protect, and manage the state’s natural, historical,
and cultural resources for current and future generations using
creative approaches and solutions based on science, collaboration,
and respect for all the communities and interests involved. If your
state government has no equivalent to the Resources Agency, other
existing state agencies can still fulfill this role. The agency
or agencies must contain departments and/or conservancies created
by statute that are capable of acting as land or water donees, and
can hold the donations in perpetuity as preserves or easements.
These departments and/or conservancies may create their own priority
lists and procedures, based on criteria specified in the act, to
determine which properties should be give priority. They submit
their applications for donations to the board.
Q. If a landowner
wants to donate property, what should they do?
A. Interested land
donors need to contact qualified land donees, including land trusts
and specified state departments and conservancies. The qualified
donee will file a tax credit application with the board.
Q. Do required
donations (e.g., for environmental mitigation) qualify for the tax
A. No. Not under
the provisions of this bill. Most states who have these programs
don’t allow credits for required donations. See
Section 6(B)(4)(b) of the bill text.
Q. Can property
owners donate a fraction of piece of property?
A. Yes. But the
donor will receive a break based only on the fair market value of
the fraction of the property qualifying for donation. See
Section 7(G)(1) of the bill text.
Q. What is a conservation
A. A conservation
easement is a voluntary agreement between a landowner and a qualified
conservation organization that permanently restricts the use of
land to preserve wildlife habitat, scenic, historic, recreational,
or agricultural conservation values. Generally, an easement limits
development and future use of a property (without necessarily preventing
all development or continued uses such as agriculture). Once a landowner
and land trust agree upon the terms of an easement, the trust accepts
responsibility for enforcing them, while the land stays under the
ownership and control of the landowner. Conserved land may still
be mortgaged, sold, or passed on to one’s heirs. In addition,
donating an easement may provide the landowner significant estate
and income tax benefits.
Q. What is a “carry-forward
A. A carry-forward
period is the number of years a land donor may claim tax credits
they are not able to claim following the year they are originally
awarded the credit due to restrictions on total income tax deductions.
According to the bill included in this package, donors may not claim
additional tax credits for donations in years they carry forward
credits from previous donations. The carry forward period in the
California program is eight years. Most states allow five or ten
Q. How should
public hearings be conducted?
A. All public hearings
must comply with the provisions of your state’s open meeting
law. To assure the public hearing provides meaningful information
to the public and the board, all public hearings should provide,
at a minimum, the following information:
(1) A description of how the donation meets the
requirements and criteria of the act;
(2) Property description and location, including
maps that show the property boundaries and adjacent properties;
(3) Identification of donor and donee;
(4) A discussion on what, if any, impact the donation
may have on adjacent landowners;
(5) A discussion on how setbacks or buffers will
be used to minimize impacts on adjacent landowners. The donee
should be prepared to address this issue and how the size of any
setback or buffer was established;
(6) A discussion on whether or not public access
will be provided. If access is provided, the hearing should provide
information on how the access will be managed and the status of
the required plan to minimize any impact on adjacent landowners;
(7) A discussion regarding any known or suspected
toxic conditions that may or may not have an impact on the environment;
(8) If the donation is a water right, a discussion
on how the water right will be used, how it meets the criteria
of the program, the point of diversion, and how the donation will
not injure any legal user of the water.
The donee must record the hearing, prepare minutes
of the public hearing, and provide this information to the board
as part of the application.