A BILL TO BE ENTITLED
AN ACT to amend the land conservation statutes of the state of north carolina, as recommended by the environmental review commission.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑130.34(a) reads as rewritten:
"(a)	Any corporation that makes a qualified donation of an interest in real property located in North Carolina during the taxable year that is useful for public beach access or use, public access to public waters or trails, fish and wildlife conservation, or other similar land conservation purposes is allowed a credit against the tax imposed by this Part equal to twenty‑five percent (25%) of the fair market value of the donated property interest. To be eligible for this credit, the interest in real property must be donated in perpetuity to and accepted by either the State, a local government, or a body that is both organized to receive and administer lands for conservation purposes and qualified to receive charitable contributions pursuant to G.S. 105‑130.9. Lands required to be dedicated pursuant to local governmental regulation or ordinance and dedications made to increase building density levels permitted under a regulation or ordinance are not eligible for this credit. The credit allowed under this section may not exceed five hundred thousand dollars ($500,000). To support the credit allowed by this section, the taxpayer must file with its income tax return, for the taxable year in which the credit is claimed, a certification by the Department of Environment and Natural Resources that the property donated is suitable for one or more of the valid public benefits set forth in this subsection."
SECTION 2.  G.S. 105‑151.12(a) reads as rewritten:
"(a)	A person who makes a qualified donation of an interest in real property located in North Carolina during the taxable year that is useful for (i) public beach access or use, (ii) public access to public waters or trails, (iii) fish and wildlife conservation, or (iv) other similar land conservation purposes is allowed a credit against the tax imposed by this Part equal to twenty‑five percent (25%) of the fair market value of the donated property interest. To be eligible for this credit, the interest in property must be donated in perpetuity to and accepted by either the State, a local government, or a body that is both organized to receive and administer lands for conservation purposes and qualified to receive charitable contributions under the Code. Lands required to be dedicated pursuant to local governmental regulation or ordinance and dedications made to increase building density levels permitted under a regulation or ordinance are not eligible for this credit. The credit allowed under this section may not exceed two hundred fifty thousand dollars ($250,000). To support the credit allowed by this section, the taxpayer must file with the income tax return for the taxable year in which the credit is claimed a certification by the Department of Environment and Natural Resources that the property donated is suitable for one or more of the valid public benefits set forth in this subsection."
SECTION 3.  G.S. 113A‑231 reads as rewritten:
"§ 113A‑231.  Program to accomplish conservation purposes.
The Department of Environment and Natural Resources shall develop a nonregulatory program that uses conservation tax credits as a prominent tool to accomplish conservation purposes, including the maintenance of ecological systems. As a part of this program, the Department shall exercise its powers to protect those interests in real property donated for tax credit under G.S. 105-130.34 or G.S. 105-151.12, conserved with the use of other financial incentives, or conserved through nonregulatory programs. The Department shall call upon the Attorney General for legal assistance in developing and implementing the program."
SECTION 4.  G.S. 113A‑232 reads as rewritten:
"§ 113A‑232.  Conservation Grant Fund.
(a)	Fund Created. – The Conservation Grant Fund is created within the Department of Environment and Natural Resources. The Fund shall be administered by that Department. The purpose of the Fund is to stimulate the use of conservation easements and conservation tax credits to improve the capacity of private nonprofit land trusts to successfully accomplish conservation projects, to better equip real estate related professionals to pursue opportunities for conservation, to increase landowner participation in land and water conservation, and to provide an opportunity to leverage private and other public monies for conservation easements.
(b)	Fund Sources. – The Conservation Grant Fund shall consist of any monies appropriated to it by the General Assembly and any monies received from public or private sources. Unexpended monies in the Fund that were appropriated from the General Fund by the General Assembly shall revert at the end of the fiscal year unless the General Assembly otherwise provides. Unexpended monies in the Fund from other sources shall not revert and shall remain available for expenditure in accordance with this Article.
(c)	Eligibility. – In order for land to be the subject of a grant under this Article, the land must possess or have a high potential to possess ecological value, must be reasonably restorable, and must qualify for tax credits under G.S. 105‑130.34 or G.S. 105‑151.12. Private nonprofit land trust organizations must be qualified pursuant to G.S. 105‑130.34 and G.S. 105‑151.12 and must be certified under section 501(c)(3) of the Internal Revenue Code.
(d)	Use of Revenue. – Revenue in the Conservation Grant Fund may be used only for the following purposes:
(1)	The administrative costs of the Department in administering the Fund.
(2)	Conservation grants made in accordance with this Article.
(3)	To establish an endowment account, the interest from which will be used for a purpose described in  G.S. 113A-233."
SECTION 5.  G.S. 113A‑233 reads as rewritten:
"§ 113A‑233.  Uses of a grant from the Conservation Grant Fund.
(a)	Allowable Uses. – A grant from the Conservation Grant Fund may be used only to pay for one or more of the following costs:
(1)	Reimbursement for total or partial transaction costs for donations of real property or interests in real property from individuals or corporations satisfying either of the following:
a.	Insufficient financial ability to pay all costs or insufficient taxable income to allow these costs to be included in the donated value.
b.	Insufficient tax burdens to allow these costs to be offset by the value of tax credits under G.S. 105‑130.34 or G.S. 105‑151.12 or by charitable deductions.
(2)	Management support, including initial baseline inventory and planning.
(3)	Monitoring compliance with conservation easements, the related use of riparian buffers, natural areas, and greenways, and the presence of ecological integrity.
(4)	Education on conservation, including information materials intended for landowners and education for staff and volunteers.
(5)	Stewardship of land.
(6)	Transaction costs for recipients, including legal expenses, closing and title costs, and unusual direct costs, such as overnight travel.
(7)	Administrative costs for short‑term growth or for building capacity.
(b)	Prohibition. – The Fund shall not be used to pay the purchase price for any interest in land."
SECTION 6.  G.S. 113A‑234 reads as rewritten:
"§ 113A‑234.  Administration of grants.
The Secretary of Environment and Natural Resources shall establish the procedures and criteria for awarding grants from the Conservation Grant Fund to private nonprofit land trust organizations and State and local government conservation land management agencies. The criteria shall focus grants on those areas, approaches, and techniques that are likely to provide the optimum positive effect on environmental protection. The Secretary shall make the final decision on the award of grants and shall announce the award publicly in a timely manner.
The Secretary may administer the grants under this Article or may contract for selected activities under this Article. If administrative services are contracted, the Department shall establish guidance and criteria for its operation and contract with a statewide nonprofit land trust service organization."
SECTION 7.  G.S. 113A‑235 reads as rewritten:
"§ 113A‑235.  Conservation easements.
(a)	Ecological systems and appropriate public use of these systems may be protected through conservation easements, including conservation agreements under Article 4 of Chapter 121 of the General Statutes, the Conservation and Historic Preservation Agreements Act, and conservation easements under the Conservation Reserve Enhancement Program. The Department of Environment and Natural Resources shall work cooperatively with State and local agencies and qualified nonprofit organizations to monitor compliance with conservation easements and conservation agreements and to ensure the continued viability of the protected ecosystems. Soil and water conservation districts established under Chapter 139 of the General Statutes may acquire easements under the Conservation Reserve Enhancement Program by purchase or gift.
(b)	The Department may convey real property or an interest in real property that has been acquired for conservation in perpetuity to a federal or State agency, a local government, or a private, nonprofit conservation organization to  manage and maintain the real property or an interest in real property for the purposes set out in subsection (a) of this section. A grantee of real property or an interest in real property under this subsection may be asked to accept a transfer that includes a reverter or other related interest to the Department in a form that is acceptable to the Department.
(c)	The Department shall report on the implementation of this Article to the Environmental Review Commission no later than 1 November of each year. The Department shall maintain an inventory of all conservation easements held by the Department. The inventory shall be included in the report required by this subsection."SECTION 8.  This act is effective when it becomes law.