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2006 SESSION

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SB 93 Land Conservation Incentives Act; tax credit.

Introduced by: John C. Watkins | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED SENATE: (all summaries)

Land preservation tax credit.  The bill provides an aggregate limit of $600,000 or 50% of the fair market value in tax credit for each parcel of land donated under the Virginia Land Conservation Incentives Act of 1999, which limit includes any transfer of unused tax credits. Under the bill, the value of any improvement to land shall not be considered for purposes of valuing land donations for tax credit. The fair market of the land must not exceed the highest and best use for which the property is adaptable, and must be supported by market evidence. The bill would restrict tax credit to land or interest in land that (i) meets guidelines of objective criteria established by the Virginia Land Conservation Foundation or (ii) the Secretary of Natural Resources has otherwise determined provides exceptional benefit to the Commonwealth in cases that do not meet the objective criteria. The bill would permit only one transfer of unused tax credits associated with donated property and would prohibit nonprofit organizations from transferring any tax credit, and it would allow as a credit against the estate tax any unused credit held by the decedent of the estate at the time of his death.

Land dedicated as open space within a residential or commercial development; as open space in any real estate development plan; or dedicated to fulfill density requirements to obtain approvals for zoning, subdivision, site plan, or building permits would not qualify for purposes of the tax credit. The bill provides that no more than one donation can be made from the same parcel of land during a 15-year period, unless there is no affiliation between the persons or entities who already have been allowed credit with respect to the parcel and the persons or entities seeking credit.

In cases in which the fair market value of a donation of property is being contested, the burden of proof would be on the taxpayer to show there is a reasonable probability that (i) the property is physically adaptable for the highest and best use that is proposed in the appraisal and (ii) there is a need or demand for such use in the reasonably near future.

In general, the provisions of the bill are applicable to conveyances of property made on or after July 1, 2006.

This bill incorporates Senate Bill 403.


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