Income, Inheritance and Estate Taxes
CHAPTER 18. Land and Historic Resource Tax Credit
Subchapter I. Land Donated for Conservation or Preservation
This subchapter shall be known as the “Delaware Land and Historic Resources Protection Incentives Act of 1999.”72 Del. Laws, c. 254, § 1; 73 Del. Laws, c. 6, § 1;
(a) The General Assembly finds:
(1) That the State of Delaware’s unique natural resources, wildlife habitats, historic resources and resources of outdoor recreation are a significant benefit to the State and the public;
(2) That the State of Delaware’s unique natural resources and distinctive natural heritage, including habitat for plants, animals and natural communities and historic resources, are being lost at an alarming rate; and
(3) That much of the State’s unique natural resources and habitats and historic resources are found on lands that are privately owned.
(b) The General Assembly desires:
(1) To encourage private landowners to be stewards of lands that are important habitats or designated natural areas, or that contain significant historic resources;
(2) To complement existing land conservation acquisition programs under the Delaware Land Protection Act, as set forth in Chapter 75 of Title 7, and historic preservation programs, and not duplicate them and thereby preserve public financial resources and leverage public expenditures; and
(3) To provide private landowners with incentives to encourage protection of private lands for open space, natural resources, biodiversity conservation, outdoor recreation and historic preservation purposes.72 Del. Laws, c. 254, § 1;
The following definitions shall apply to this subchapter:
(1) “Delaware Heritage program” means the program within the Department of Natural Resources and Environmental Control, Division of Fish and Wildlife, that is responsible for inventory, research, data collection, information management and consultation about Delaware’s unique or rare plant and animal species and natural communities and for the maintenance of computerized and manual records of the status and trends of such species and natural communities and habitat location information.
(2) “Department” means the Department of Natural Resources and Environmental Control.
(3) “Historic resources” means those structures, improvements, sites or lands that are listed as significant in or eligible for listing in the National Register of Historic Places, either as individual listings or as contribution elements in listed or eligible historic districts.
(4) “Interest in real property” means any perpetual right in real property, or improvements thereto, or water, including but not limited to a fee simple, easement, partial interest, mineral right, remainder, future interest, or other interest or right concerning the use of property.
(5) “Land” or “lands” means real property, with or without improvements thereon; right-of-way, water and riparian rights; easements; privileges and all other rights or interests of any kind or description in, relating to or connected with real property.
(6) “Natural habitat” means those land areas in Delaware that are or may be documented as areas of ecological importance and significance for the protection of unique or rare plants, animals and natural communities. Such areas are or may be comprised of lands that due to their physical or biological features, provide important elements for the protection, maintenance and survival of plants, animals and/or natural communities such as, for example, food, shelter, or living space, and may include, without limitation, breeding, feeding, resting, migratory and overwintering areas. Physical and biological features include, but are not limited to: structure and composition of the vegetation; faunal community; soils; water chemistry and quality; and geologic, hydrologic and microclimatic factors and other ecological processes.
(7) “Open space” means any open lands characterized by (i) natural and/or scenic beauty, or (ii) whose existing openness, natural condition or present state of use, if retained, would maintain important outdoor recreational areas and wildlife habitat, or would maintain or enhance the conservation of Delaware’s natural, historic, or scenic resources.
(8) “Public or private conservation agency” means any Delaware governmental body or any private not-for-profit charitable corporation or trust authorized to do business in the State and organized and operated for natural resources, land conservation or historic preservation purposes, and having tax-exempt status as a public charity under the U.S. Internal Revenue Code of 1986, as amended, and having the power to acquire, hold and maintain land and/or interests in land for such purposes.72 Del. Laws, 1st Sp. Sess., c. 254,, § 1; 73 Del. Laws, c. 6, § 1;
(a) There shall be allowed as a credit against the tax imposed by Chapters 11 and 19 of this title, an amount equal to 40% of the fair market value of any land or interest in land located in Delaware that is conveyed for the purpose of open space, natural resource and/or biodiversity conservation or historic preservation as an unconditional donation in perpetuity by the landowner/taxpayer to a public or private conservation agency eligible to hold such land and interests therein for conservation or preservation purposes. The fair market value of qualified donations made under this chapter shall be substantiated by a “qualified appraisal” prepared by a “qualified appraiser,” as those terms are defined under applicable federal law and regulations governing charitable contributions.
(b) The amount of the credit that may be claimed by a taxpayer shall not exceed $50,000. In addition, in any 1 tax year the credit used may not exceed the amount of individual or corporate income tax otherwise due. Any portion of the credit that is unused in any 1 tax year may be carried over for a maximum of 5 consecutive tax years following the tax year in which the credit originated, subject to the limitations provided herein, until fully expended.
(c) Qualified donations shall include the conveyance in perpetuity of a fee interest in real property or a less-than-fee interest in real property, such as a conservation easement, pursuant to Chapter 69 of Title 7. Dedications of land for open space for the purpose of fulfilling density requirements to obtain subdivision or building permits shall not be considered as qualified donations under this chapter.
(d) Qualified donations shall be eligible for the tax credit herein described if such donations are made to the State, an instrumentality thereof or a charitable organization described in § 501(c) of the U.S. Internal Revenue Code of 1986 [26 U.S.C. § 501] and meet the requirements of 26 U.S.C. § 170(h)(3)(A) or (B).
(e) To be eligible for treatment as qualified donations under this section, land or interests in lands must meet the requirements for land protection of the Delaware Land Protection Act as set forth in § 7503 of Title 7; or consist of lands that are natural habitat for the protection of Delaware’s unique and rare biological and natural features as determined by the Department, relying on information supplied and maintained by the Delaware Natural Heritage Program; or meet the requirements for Delaware’s important historic resources as determined by the Delaware Department of State, Division of Historical and Cultural Affairs. The use and protection of such lands or interests therein for open space, natural area protection, biodiversity habitat conservation, historic preservation or similar use and purpose shall be assured in perpetuity.
(f) Any qualified donation made in a tax year for which the tax credit herein described is claimed by a taxpayer shall not also be eligible for treatment in the same tax year as a charitable contribution for state income tax deduction purposes in calculating Delaware income tax liability.72 Del. Laws, c. 254, § 1;
(a) The Department, in consultation with the Department of State, Division of Historical and Cultural Affairs, shall promulgate such rules and regulations as may be deemed necessary to certify eligible projects for treatment in fulfillment of the purposes of this subchapter by February 5, 2000. The Department and the Division of Historical and Cultural Affairs, in cooperation with the Open Space Council, upon each 5-year anniversary of the enactment of this subchapter or of any renewals thereof, shall prepare a report to the General Assembly showing the lands protected during such period pursuant to this subchapter.
(b) The Division of Revenue of the Department of Finance for the State of Delaware, in consultation with the Department, shall promulgate such rules and regulations by February 5, 2000, as may be necessary to administer the tax incentives provided for in this subchapter and shall coordinate with the agencies referenced in subsection (a) of this section in the preparation of the report or reports to the General Assembly showing the fiscal impact on the Delaware Treasury of the credits claimed pursuant to this subchapter.72 Del. Laws, c. 254, § 1; 73 Del. Laws, c. 6, § 1;
(a) The tax credits provided by this subchapter shall apply to transfers of land or interests therein in taxable years beginning on or after January 1, 2000.
(b) Any taxpayer claiming a tax credit under this subchapter may not claim a credit under any similar Delaware law for costs related to the same project. A taxpayer may not claim a tax credit under this subchapter for lands or interests in land a portion of which constitutes the taxpayer’s entire holdings and where the taxpayer has sold or has contracted to sell to the State the balance of such lands or interests in land for open space, biodiversity, land conservation or historic preservation purposes.
(c) Any tax credits which arise under this subchapter from the donation of land or an interest in land made by a pass-through tax entity such as a trust, estate, partnership, limited liability corporation or partnership, limited partnership, Subchapter S corporation or other fiduciary shall be used either by such entity, in the event it is the taxpayer, on behalf of such entity, or by the member, manager, partner, shareholder and/or beneficiary, as the case may be, in proportion to their interest in such entity in the event that income, deductions and tax liability passes through such entity to such member, manager, partner, shareholder and/or beneficiary. Such tax credits may not be claimed by both the entity and the member, manager, partner, shareholder and/or beneficiary for the same donation.
(d) The total amount of tax credits to be made available under this subchapter shall not exceed $10,000,000. The aggregate amount of such tax credits available in any 1 tax year shall not exceed $1,000,000 and shall be allocated to taxpayers for eligible projects in accordance with the rules and regulations to be established as set forth in § 1805 of this title.
(e) [Repealed.]72 Del. Laws, c. 254, § 1; 73 Del. Laws, c. 6, § 1; 77 Del. Laws, c. 135, §§ 1-3;
No part or segment of this subchapter shall be interpreted to in any way alter or amend any permit requirements, reporting requirements, allocation procedures or other requirements set forth in any other provision of state law.72 Del. Laws, c. 254, § 1; 73 Del. Laws, c. 6, § 1;