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Introduced Version Senate Bill 173 History

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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 173

(By Senator Unger)

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[Introduced January 10, 2008; referred to the Committee on Agriculture; and then to the Committee on Finance.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §8A-13-1, §8A-13-2, §8A-13-3, §8A-13-4, §8A-13-5 and §8A-13-6, all relating to creating the Food Security Act; providing a tax credit for a qualified donation, including, but not limited to, a fee interest in real property and conservation or preservation easement, located in West Virginia, by a landowner taxpayer to a public or private conservation agency; and addressing its administration, applicability, limitations and renewal.

Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §8A-13-1, §8A-13-2, §8A-13-3, §8A-13-4, §8A-13-5 and §8A-13-6, all to read as follows:
ARTICLE 8A. FOOD SECURITY ACT.
§8A-13-1. Short title.
This article may be known and cited as the "Food Security Act."
§8A-13-2. Findings.
The Legislature finds:
(1) The lands of the State of West Virginia provide a variety of important public benefits, including, but not limited to, protection of farmland to ensure food security for the citizens of the state, the protection of drinking water supplies, recreational opportunities, archaeological and historical resources and scenic and cultural values, but these privately-owned lands are being permanently developed at an alarming rate;
(2) Private landowners should be encouraged to be stewards of their lands for the protection of public benefits, including, but not limited to, protection of farmland to ensure food security for the citizens of the state, drinking water supplies, recreational opportunities, archaeological and historical resources and scenic and cultural values;
(3) The state should provide private landowners with incentives to encourage the conservation of such lands to provide a source for the securing of food within the State of West Virginia both now and into the future.
§8A-13-3. Definitions.
The following definitions apply to this article:
"Authority" means the West Virginia Agricultural Land Protection Authority created by section seven, article twelve of this chapter, acting as a granting agency for the purposes of the awarding of tax credits. This section is not intended to usurp the powers or abilities, nor intended to regulate, the county farmland protection boards created under the Voluntary Farmland Protection Act.
"Bargain sale" means the sale of an interest in real property by a taxpayer at a cost below appraised market value, when a portion of the value of the interest in real property is a qualified donation, as these terms are defined in this section, and which meets the requirements of Section 1011(b) of the Internal Revenue Code of 1986, as amended.
"Interest in real property" means any right in real property in the State of West Virginia, including improvements on the real property, or water, including, but not limited to, a fee simple easement, including conservation easement, provided the interest complies with the requirements of the U.S. Internal Revenue Code Section 170(h), life estate, restriction, covenant, condition, partial interest, remainder or future interest, lease, license, mineral right, riparian right or other interest or right in real property that may be conveyed concerning the power to transfer property.
"Public or private conservation agency" means any government body empowered to hold an interest in real property under the laws of this state or the United States, including the West Virginia Agricultural Land Protection Authority; a county farmland protection board created under section two, article twelve, chapter eight-a of this code; or a private nonprofit corporation organized for the purposes of land conservation, which is authorized to do business in West Virginia, and which has tax-exempt status as a nonprofit charitable organization as described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and having the power to acquire, hold and maintain land or interests in land for conservation purposes.
"Qualified donation" means a donation, or the donated portion of a bargain sale, made in perpetuity of a fee interest in real property or a less-than-fee interest in real property, including a conservation or preservation easement, if the less-than-fee interest qualifies as a charitable contribution deduction under Section 170(h) of the U.S. Internal Revenue Code of 1986.
"Taxpayer" means a taxpayer subject to income tax under the laws of the State of West Virginia.
§8A-13-4. Tax credit available.
(a) There is allowed as a credit against a taxpayer's tax liability under the taxes imposed by articles twenty-one and twenty-four, chapter eleven of this code, a percent, to be determined by the authority, of the fair market value of any qualified donation located in West Virginia, by a landowner taxpayer to a public or private conservation agency, subject to:
(1) Approval of the tax credit by the authority; and
(2) The recording of a deed for a fee interest in real property or a perpetual conservation or preservation easement.
(b) The fair market value of certified land shall be substantiated by a qualified appraisal, as defined in United States Treasury Regulation Section 1.1 70A-13(c)(3), and shall be prepared by a qualified appraiser, as defined in United States Treasury Regulation Section 1.1 70A-13(c)(5). For any taxpayer to claim the credit provided in subsection (a) of this section, the taxpayer shall file with the Department of Revenue at the same time as the taxpayer files a return for the taxable year in which the credit is claimed. The form must contain signatory approvals of the authority and public or private agency to which the conservation or preservation easement was donated.
(c) In any one tax year the credit used may not exceed the amount of personal or corporate net income tax otherwise due by the taxpayer either directly or through transferability. Credits may be transferred or carried over to subsequent years consistent with rules proposed by the authority for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code promulgated and approved by the Legislature.
§8A-13-5. Administration.
(a) The authority shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code that govern the awarding of the tax credits under this article, after consultation with the commission established in (d) below, including:
(1) A system of ranking applications for qualified donations in order to award the tax credits including, but not limited to, the factors in section fifteen, article twelve of this chapter and the U.S. Internal Revenue Code Section 170(h). For the purposes of awarding the tax credits, the authority shall consider all lands in West Virginia;
(2) The percent of the appraised value of the qualified donation to be used as a tax credit;
(3) The carry-over period over which the tax credits may be used;
(4) Forms to indicate the awarding of the tax credit and use by fiscal year; and
(5) Approval of the qualified appraisal by the authority.
(b) The Tax Commissioner shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to prevent the generation of multiple credits with respect to the same property.
(c) The authority shall monitor the use of awarded tax credits by fiscal year.
(d)(1) A commission to study the development and implementation of this tax credit program including, but not limited to, the transferability of tax credits under this article, as well as propose rules under subsection (a) of this section, shall be appointed by the authority. The authority shall appoint representatives from the authority, county farmland protection boards, and members of 501(c)(3) land conservation organizations operating in the state to the commission. The commission shall examine all aspects of transferability, including, but not limited to:
(A) The status and operation of tax credits in other states;
(B) Facilitation of the transfer by government entities;
(C) Value to transferring and recipient taxpayers; and
(D) Procedures, forms, monitoring and reporting of transfers.
(2) The commission shall file a report of its findings and recommendations, including proposed legislative rules necessary to put its recommendations into effect prior to any tax credits being transferred.
§8A-13-6. Applicability, fiscal limitation and renewal.
(a) The tax credits provided by this article apply to transfers of interests in real property in taxable years beginning on or after the first day of January, two thousand nine, and taxable years after that.
(b) The tax credits fiscal cap imposed by the Legislature during the fiscal year carry forward to future years until used by West Virginia taxpayers. The authority shall monitor and annually report the use of the tax credits within the state by year to the Joint Committee on Government and Finance.
(c) Any taxpayer claiming a tax credit under this article may not claim additional credits during any one tax year for costs related to the same interest in certified lands.
(d) Any tax credits which arise under this article from the qualified donation of such land by a pass-through tax entity such as a trust, estate, partnership, corporation, limited partnership, limited liability partnership, limited liability corporation, Subchapter S organization or other fiduciary, may be used either by that entity in the event it is the taxpayer on behalf of the entity or by the member, partner, shareholder or beneficiary, as the case may be, in proportion to their interest in the entity in the event that income, deductions and tax liability passes through the entity to the member, partner, shareholder or beneficiary. The tax credits may not be claimed by both the entity and the member, partner, shareholder or beneficiary, for the same conveyance.
(e) Any tax credits which arise under this article from the qualified donations of such land by a married couple may be used only if the spouses file a joint return, if both spouses are required to file West Virginia income tax returns. If only one spouse is required to file a West Virginia income tax return, that spouse may claim the credit allowed by this article on a separate return.


NOTE: The purpose of this bill is to enact the Food Security Act. It will provide a tax credit for a qualified donation or bargain sale of a fee interest in real property or a conservation or preservation easement located in West Virginia, by a landowner taxpayer to a public or private conservation agency.

This article is new; therefore, strike-throughs and underscoring have been omitted.
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