2012 Advanced Real Property SeminarNC Department of Revenue

Joseph S. Koury Convention CenterGreensboro, NC

September 21, 2012

Need for H 350Clarify existing statute –

105-275(12)Better define public

purpose/benefitGreater consistency

across stateReduce “carrying costs”

for land trustsIncentive to accept land

donations

Property Tax Uniformity - 2010In 2010, CTNC documented:

58 counties consistently exempting conservation properties

14 counties taxing conservation properties at market value

7,800 acres of conservation land taxed at market value

$94,000 in tax revenue

Qualifying Purposes Under H 350Used exclusively for one OR more of the following:

Scientific or educational purposesPublic access to pubic waters or trailsWildlife habitat conservationForest stewardshipSubject to a permanent conservation easement to

protect water qualityTransfer to government agency for permanent

conservation

Other Key Provisions in H 350Limited to nonprofits organized to receive and

administer lands for conservation purpose5-year deferred tax payments if property is

disqualifiedDisqualifying events:

Sold for development/no longer used for conservation Income produced not incidental to conservation purpose

No deferred tax payments when sold subject to an easement or transferred to government agency

Scientific and Educational PurposesPreservation of natural

flora and fauna for observation and study

Scientific and educational defined in NCGS 105-278.7(f)Research/experimentationNatural sciencesTransmission of

knowledge or skills

Public Access Hiking trails Coastal/river

Paddling/boating

Wildlife Habitat ConservationProperty managed under

a written habitat conservation agreement w/ NC Wildlife Resources Commission

Use process developed for Wildlife Land Conservation Program

None to date

Forest Stewardship Managed under a Forest

Stewardship Plan approved by NC Forest Service (NCFS)

NCFS has developed “Forest Stewardship Plan Review Form”

NCFS, private contractor, landowner, county resource agencies may develop plan

At least eight properties have qualified under this option

Water Quality EasementMust be under a permanent

conservation easement to protect water quality

Easement must meet requirements of Chapter 121, Article 4 of the NCGS

Many held by the NC Clean Water Management Trust Fund

Easements recorded with deed

More than 20 properties have qualified under this purpose

Transfer to Government Agency for Permanent ConservationLand being held for

transfer to government conservation agencies

National Park Service, US Forest Service, NC State Parks, Local Governments

Documentation of agency intent

Eight properties qualified under this purpose

Challenges AheadDetermining what is/is not income incidental to the

conservation purpose

hunting leasestimber revenuesmitigation paymentscarbon sequestration or other “ecosystem service”

payments

Conservation buyers programs

Other IssuesReclassification of previously exempt properties as

deferred under the new 105-275(12)

Application process?

Property tax listing schedule

Land being used for production agriculture

Contact InfoEdgar MillerDirector of Government

RelationsConservation Trust for NCedgar@ctnc.org336-793-8219