New Mexico Register / Volume XXXV, Issue 2
/ January 30, 2024
This is an amendment to 3.13.20
NMAC, amending Sections 7 through 15, effective 1/30/2024.
Explanatory statement: Statute citations throughout the
rule were corrected to conform to correct legislative styles.
3.13.20.7 DEFINITIONS:
A. "Applicant" means a taxpayer who on or after January 1, 2004, donates or partially donates (or for purposes of 3.13.20.8 NMAC plans to donate or partially donate) through a bargain sale for a conservation or preservation purpose, a perpetual less-than-fee interest in land that appears to qualify as a charitable contribution under 26 U.S.C. section 170(h) and its implementing regulations or a fee interest in land, which is subject to a perpetual conservation easement, to a public or private conservation agency. If more than one taxpayer owns an interest in the land or interest in land that is the donated or partially donated, they shall be considered one applicant, but the application shall include the names and addresses of all taxpayers that own an interest in the donated land or interest in land.
B. “Appraisal bureau” means the taxation and revenue department, property tax division, appraisal bureau.
C. "Bargain sale" means a sale where the taxpayer is paid less than the fair market value of the land or interest in land.
D. "Building envelope" means a designated area within a
conservation easement [that is] identified in the deed of conservation
easement that contains existing structures and activities or will contain
future structures and activities [that are] for the grantor's continued
use of the property but that are prohibited elsewhere within the conservation
easement.
E. “Committee” means the committee established pursuant to the Natural Lands Protection Act, Sections 75-5-1 et seq. NMSA 1978.
F. "Conservation or preservation purpose" means open space, natural area preservation, land conservation or preservation, natural resource or biodiversity conservation including habitat conservation, forest land preservation, agricultural preservation, watershed preservation or historic or cultural property preservation, or similar uses or purposes such as protection of land for outdoor recreation purposes. The resources or areas contained in the donation must be significant or important.
G. "Cultural property" means a structure, place, site or object having historic, archaeological, scientific, architectural or other cultural significance.
H. "Development approach" means a method of appraising undeveloped land having a highest and best use for subdivision into lots. This approach consists of estimating a final sale price for the total number of lots into which the property could best be divided and then deducting all development costs, including the developer's anticipated profit. The remaining sum, the residual, represents the raw land's market value.
I. "Governmental body" means the state of New Mexico or any of its political subdivisions.
J. "Interest in land" means a right in real property, including access, improvement, water right, fee simple interest, easement, land use easement, mineral right, remainder interest or other interest in or right in real property that complies with the requirements of 26 U.S.C. section 170(h)(2) and its implementing regulations, or any pertinent successor of 26 U.S.C. section 170(h)(2).
K. "Land" [means real
property, including rights of way, easements, privileges, water rights and all
other rights or interests connected with real property] is defined in
Subsection B of Section 75-9-3 NMSA 1978.
L. "Less-than-fee interest"
means an interest in land that is less than the entire property or all [of]
the rights in the property or a non-possessory interest in land that imposes a
limitation or affirmative obligation such as a conservation, land use or
preservation restriction or easement.
M. "National register of historic
places" means the register [that] the United States secretary
of the interior maintains of districts, sites, buildings, structures and
objects significant in American history, architecture, archaeology, engineering
or culture.
N. "Pass-through
entity" means a business association other than a sole proprietorship;
an estate or trust; a corporation, limited liability company, partnership or
other entity not a sole proprietorship taxed as a corporation for federal
income tax purposes for the taxable year; or a partnership [that is]
organized as an investment partnership in which the partners' income is derived
solely from interest, dividends and sales of securities.
O. "Public or private conservation
agency" [means a governmental body or a private non-profit
charitable corporation or trust authorized to do business in New Mexico
organized and operated for natural resources, land or historic conservation
purposes and has tax-exempt status as a public charity under 26 U.S.C. section
501(c)(3) and meets the requirements of 26 U.S.C. section 170(h)(3) and its
implementing regulations, and has the power to acquire, hold or maintain land
or interests in land] is defined in Subsection C of Section 75-9-3 NMSA
1978.
P. "Qualified appraisal" means a
qualified appraisal as defined in 26 C.F.R. section [1.170A-13(c)(3)] 1.170A-17(a)
or subsequent amendments and does not use the development approach as the sole
means of determining fair market value.
The appraisal for a conservation easement or restriction shall state
whether the donation increases the value of other property the donor or a
related person owns. In accordance with
26 C.F.R. section 1.170A-14(h)(3)(i), if the donation increases the value of
other property the donor or a related person owns the appraisal shall reflect
the value of enhancement, whether or not the other property is contiguous with
the donated property. The conservation
contribution shall be reduced by the amount of the increase in value to the
other property.
Q. "Qualified appraiser" means a
qualified appraiser as defined in 26 C.F.R. section [1.170A-13(c)(5)] 1.170A-17(b)
or subsequent amendments and who is a certified general real estate appraiser.
R. "Qualified intermediary" means any person who has not been previously convicted of a felony, who has not had a professional license revoked, who is not engaged in the practice of public accountancy as defined in Section 61-28B-3 NMSA 1978 or who is not identified in the Section 61-29-2 NMSA 1978, which governs real estate brokers and salespersons, or who is not an entity owned wholly or in part by or employing a person who has been previously convicted of a felony, who has had a professional license revoked, who is engaged in the practice of public accountancy as defined in Section 61-28B-3 NMSA 1978 or who is identified in Section 61-29-2 NMSA 1978.
S. "Taxpayer" [means a United
States citizen or resident, a United States domestic partnership, a limited
liability company, a United States domestic corporation, an estate, including a
foreign estate, or a trust] is defined in Paragraph (2) of Subsection K
of Section 7-2-18.10 NMSA 1978 and Paragraph (2) of Subsection K of Section
7-2A-8.9 NMSA 1978. A non-profit may
be a taxpayer if organized as a United States domestic partnership, a limited
liability company, a United States domestic corporation or a trust. A governmental body or other governmental
entity is not a taxpayer.
T. "Tax filer" means a New Mexico taxpayer who files a New Mexico income tax return claiming a tax credit pursuant to the Land Conservation Incentives Act together with valid numbered documentation from the taxation and revenue department or valid sub-numbered documentation from a qualified intermediary.
U. "Secretary" means the
secretary of energy, minerals and natural resources department or [his or
her] the secretary’s designee.
[3.13.20.7 NMAC - Rp, 3.13.20.7 NMAC, 6/16/2008; A, 12/30/2010; A, 2/12/2016; A, 1/30/2024]
3.13.20.8 GENERAL PROVISIONS:
A. Only an applicant may apply for a land conservation incentives tax credit.
B. A taxpayer shall be listed as an owner on the deed conveying the land or interest in land to be eligible for the land conservation incentives tax credit (see Subsection N of 3.13.20.8 NMAC for use of a land conservation tax credit issued to a pass-through entity).
C. A taxpayer is not eligible for a land conservation incentives tax credit if they are or have been a subsidiary, partner, manager, member, shareholder or beneficiary of a domestic partnership, limited liability company, domestic corporation or pass-through entity that owns or has owned the donated land or interest in land in the five years preceding the date that the applicant conveyed the land or interest in land.
D. Qualified donations include a conveyance, on or after January 1, 2004, in perpetuity for a conservation or preservation purpose of a less-than-fee interest in land that appears to qualify as a charitable contribution under 26 U.S.C. section 170(h) and its implementing regulations or a fee interest in land.
E. Dedications of land for open space for the purpose of fulfilling density requirements to obtain subdivision or building permits do not qualify for the land conservation incentives tax credit.
F. For
a donation of a fee interest in land or less-than-fee interest in land [that]
the applicant conveys, the total amount of the land conservation incentives tax
credit for the donation for which an applicant applies shall not exceed fifty
percent of the fair market value of the land or interest in land [that]
the applicant donated in perpetuity, regardless of the value of the land or
interest in land donated or the number of taxpayers [that own] owning
an interest in the donated property. An
applicant shall only apply for one land conservation incentives tax credit per
taxpayer per taxable year.
G. For
donations made prior to January 1, 2008, a taxpayer [that owns] owning
an interest in the donated land or interest in land may receive a land
conservation incentives tax credit worth the lesser of $100,000 or the
taxpayer's proportionate share, as determined by the taxpayer's ownership
interest in the donated land or interest in land, of fifty percent of the
donated land's or interest in land's fair market value. For donations made on or after January 1,
2008, a taxpayer [that owns] owning an interest in the donated
land or interest in land may receive a land conservation incentives tax credit
worth the lesser of $250,000 or the taxpayer's proportionate share, as
determined by the taxpayer's ownership interest in the donated land or interest
in land, of fifty percent of the donated land or interest in land's fair market
value. No matter the number of taxpayers
[that] owning the donated land or interest in land [has],
the total land conservation incentives tax credit all taxpayers receive for the
donated land or interest in land cannot exceed fifty percent of the donated
land's or interest in land's fair market value.
Therefore, if the applicant conveyed the donation on or after January 1,
2008, and there are 10 taxpayers [that have] owning an equal
interest in donated land or interest in land [that is] worth $2,000,000,
each taxpayer's land conservation incentives tax credit would be limited to
$100,000.
H. For
donations conveyed prior to January 1, 2008, [a husband and wife] married
individuals who both own a recorded interest in the donated land or
interest in land, as opposed to one spouse not being named on the deed but
having a community property interest, may each receive a land conservation
incentives tax credit worth the lesser of $100,000 or [his or her] the
spouse’s proportionate share, as determined by [his or her] the
spouse’s ownership interest in the donated land or interest in land, of
fifty percent of the donated land's or interest in land's fair market
value. For donations made on or after
January 1, 2008, [a husband and wife] married individuals who
both own a recorded interest in a donated land or interest in land, as opposed
to one spouse not being named on the deed but having a community property
interest, may each receive a land conservation incentives tax credit worth the
lesser of $250,000 or [his or her] the spouse’s proportionate
share, as determined by [his or her] the spouse’s ownership
interest in the donated land or interest in land, of fifty percent of the
donated land's or interest in land's fair market value.
I. The
land conservation incentives tax credit originates in the year the applicant
conveys the donation, which shall be determined by the date [that] the
deed is recorded with the county clerk where the land or interest in land is
located. Pursuant to Section 7-1-26 NMSA
1978, an applicant who files a tax return may amend [his or her] the
tax return and claim the land conservation incentives tax credit for three
calendar years after the applicant has paid the tax. An applicant may apply for the land
conservation incentives tax credit and then amend the applicant's tax return to
the year the applicant conveyed the donation as long as the applicant receives
approval of the land conservation incentives tax credit and files the amendment
within the three year period provided in Section 7-1-26 NMSA 1978. The applicant may carry over portions of the
land conservation incentives tax credit that are unused in prior taxable years
for a maximum of 20 consecutive years following the taxable year in which the
applicant donated the land or interest in land until fully expended.
J. If
the applicant donated a portion of the land or interest in land's value, but
received payment for the remaining fair market value of the land or interest in
land, the applicant may claim only the land conservation incentives tax credit
on that portion of the value [that] the applicant donated.
K. An applicant claiming a tax credit pursuant to the Land Conservation Incentives Act shall not claim a credit pursuant to a similar law for costs related to the same donation.
L. A
tax filer may claim the land conservation incentives tax credit against the tax
liability [that] the Income Tax Act or the Corporate Income and
Franchise Tax Act impose.
M. The amount of the land conservation incentives tax credit a tax filer uses in a taxable year may not exceed the amount of the individual income or corporate income tax otherwise due.
N. A
land conservation incentives tax credit [that] a pass-through tax entity
claims may be used either by the pass-through tax entity if it is the tax filer
on behalf of the pass-through tax entity or by the member, manager, partner,
shareholder or beneficiary, as applicable, in proportion to the interest in the
pass-through tax entity if the income, deductions and tax liability pass
through to the member, manager, partner, shareholder or beneficiary. Either (1) the pass-through tax entity or (2)
the member, manager, partner, shareholder or beneficiary, but not both (1) and
(2) may claim the land conservation incentives tax credit for the same
donation.
[3.13.20.8 NMAC - Rp, 3.13.20.8 NMAC, 6/16/2008; A, 1/30/2024]
3.13.20.9 ASSESSMENT APPLICATION:
A. An applicant who plans to apply for a land conservation
incentives tax credit shall apply for an assessment by the energy, minerals and
natural resources department of the donation the applicant made or proposes to
make for a conservation or preservation purpose of a fee interest in
land or a less-than-fee interest in land. An applicant may submit the assessment
application to the energy, minerals and natural resources department either
prior to conveying the fee interest in land or less-than-fee interest in land
or after conveying the fee interest in land or less-than-fee interest in
land. The applicant does not need to
submit an appraisal with the assessment application package.
B. An applicant may obtain an assessment application form
from the energy, minerals and natural resources department.
C. An applicant shall submit the assessment
application package, which shall include one signed, completed paper original
and [either eight paper copies or eight electronic copies] one
electronic copy, to the energy, minerals and natural resources
department. [If
submitting electronic copies, the applicant may submit the eight copies] For the electronic copy the applicant
shall submit a PDF of the assessment application package on a [compact
or digital video disc or other electronic medium such as a] USB flash
drive or by other method the energy, minerals and natural resources
department approves. Any photographs
submitted shall be in color.
D. The
assessment application package shall consist of an assessment application form
[that contains] containing the applicant's name, address,
telephone number, e-mail address if available and signature, with the following
required attachments:
(1) a donation assessment report that includes:
(a) a detailed description of the donation or proposed donation including:
(i) whether the donation or proposed donation is a fee interest in land or a less-than-fee interest in land;
(ii) if
the donation or proposed donation is a fee interest in land, [in order]
to ensure [that] the conservation or preservation purpose is protected
in perpetuity, a description of who holds or will hold a conservation easement
[that] the applicant has placed or will place on the land and assurance
[that] the conservation easement will contain a provision that the
conservation restrictions run with the land in perpetuity and [that] any
reserved use shall be consistent with the conservation or preservation purpose
and [that] separate donees will hold the fee interest and conservation
easement;
(iii) the donation or proposed donation's conservation or preservation purpose and how the donation or proposed donation protects that purpose in perpetuity;
(iv) significant natural or cultural resources present on the property; and
(v) a description of any water rights associated with the property and whether the conservation easement or deed requires or will require any water rights associated with the property to remain with the property;
(b) the
current property characteristics and condition with clear maps of appropriate
scale to illustrate relevant details, and showing the property's location and
boundaries including a survey plat if available, directions to the property,
topography, relation to other properties applicant owns [that are]
within a 10 mile radius of the property, and relation to adjacent land uses and
ownership (i.e. federal, tribal,
state, private, etc.) and other properties whose conservation or preservation
purposes are protected in perpetuity that are adjacent to the property or
within a five mile radius of the property;
(c) the size of the property in acres;
(d) a description of all structures existing on the property;
(e) if a donation or proposed donation is a less-than-fee interest, a description of any building envelopes including their size and exact location and the size of the buildings allowed within each building envelope;
(f) if
a donation or proposed donation is a less-than-fee interest, a description of
the reserved rights and permitted activities [that] the applicant has or
plans to retain or a copy of the completed or draft conservation easement;
(g) if
a conservation or preservation purpose is for the preservation of a
historically important land area, documentation [that] the donation
meets the requirements of 26 C.F.R. section 1.170A-14(d)(5); historically
important land areas include an independently significant land area [that
meets] meeting the national register criteria for evaluation in 36
C.F.R section 60.4, a land area (including related historic resources) within a
registered historic district including a building on the land area that can
reasonably be considered as contributing to the district's significance and a
land area adjacent to a property listed individually in the national register
of historic places where the land area's physical or environmental features
contribute to the property's historic or cultural integrity;
(h) if
a conservation or preservation purpose is for the preservation of a certified
historic structure, which means buildings, structures or land areas,
documentation [that] the structure is listed in the national register of
historic places or is located in a registered historic district and is
certified by the secretary of the interior to the secretary of treasury as
being of historic significance to the district and [that] the donation
meets the requirements of 26 C.F.R. section 1.170A-14(d)(5);
(i) if a conservation or preservation purpose is for the preservation of land areas for outdoor recreation by or for the education of the general public, a detailed description of how the conservation easement or deed will provide for the general public's substantial and regular use;
(j) if a conservation or preservation purpose is for the protection of a relatively natural area, a detailed description of the vegetative cover, wildlife use, how the property contributes to the functioning of the larger regional ecosystem and watershed and how the conservation easement will protect the soil, native plant cover and wildlife use of the property;
(k) if a conservation or preservation purpose is for the preservation of open space pursuant to a clearly delineated federal, state or local government policy, documentation of such policy and a detailed description identifying the significant public benefit;
(l) if a conservation or preservation purpose is for the preservation of open space that is not pursuant to a clearly delineated federal, state or local government policy, a detailed description of how the conservation easement or deed will provide for the general public's scenic enjoyment and identifying the significant public benefit;
(m) if
a conservation or preservation purpose is for the protection of agricultural
land, a detailed description of the property's crop or animal production
potential, documentation [that] the portion of the property claimed as
agricultural land is currently subject to the special method of valuation of
land used primarily for agricultural purposes as described in Section 7-36-20
NMSA 1978 (i.e., classified as either
irrigated agricultural land, dryland agricultural land or grazing land under
Paragraph (2) of Subsection F of 3.6.5.27 NMAC as shown on the statement of
value issued by the county in which the land is located) and a description of how
the conservation easement or deed will provide for agricultural use and the
continued use of any water rights;
(n) the results of and a description of the physical inspection of the property the donee or proposed donee conducted for any indications of potentially hazardous materials or activities that have or may result in environmental contamination such as landfills, leaking petroleum storage tanks, hazardous material containers or spills, polychlorinated biphenyl containing equipment, asbestos insulation and abandoned mineral mining or milling facilities or other past activities using hazardous materials and the results of and a description of the interview the donee or proposed donee conducted with the landowner concerning the landowner's knowledge of such potentially hazardous materials or activities;
(2) if the donee or proposed donee or landowner identified the potential for potentially hazardous materials or activities in the donation assessment report, a phase I environmental site assessment of the property and a phase II environmental site assessment if recommended by the phase I environmental assessment;
(3) a copy of any formal donor or donee plan for management or stewardship of the property's conservation or preservation values;
(4) signed
authorization from the applicant [that allows] allowing personnel
from the energy, minerals and natural resources department or members of the
committee to enter upon the land or interest in land to view the conservation
or preservation values conveyed or to be conveyed by the applicant for the
purposes of reviewing the assessment application, upon the personnel or
committee members providing the applicant with 48 hours prior notice; and
(5) a report from the public or private land conservation agency that has accepted or plans to accept the donation that provides the following:
(a) the
number of fee lands held for conservation or preservation purposes or
conservation easements [that] the agency holds in New Mexico;
(b) the
number of acres of each fee land held for conservation or preservation purposes
or conservation easement [that] the agency holds in New Mexico;
(c) the names of board members if the agency is a private nonprofit organization or the names of elected or appointed officials if the organization is a public entity; and
(d) a signed statement from the public or private conservation agency describing its commitment to protect the donation's conservation or preservation purposes, its resources to provide stewardship of and management for fee lands or to enforce conservation easement restrictions and, if a conservation easement, its resources and policies to annually monitor the conservation easement.
E. The
secretary reviews the assessment applications in consultation with the
committee. The secretary initiates
consultation by sending the assessment application package to the committee
members for review and comment or by calling a meeting of the committee. The secretary shall accept assessment
application packages on a rolling basis or not fewer than three times per year
spaced throughout the year, the deadlines for which shall be published in
advance on the energy, minerals and natural resources department’s
website. The committee shall meet not
fewer than three times per year (within approximately 45 days after a set
deadline for assessment application package submittals or otherwise spaced
throughout the year) to consider timely and complete assessment applications
unless no assessment applications are currently pending or the limited volume
of the assessment application enables the secretary to consult with the
committee without the need for a formal meeting. The secretary, in consultation with the
committee, shall assess the donation or proposed donation, using the factors in
3.13.20.13 NMAC, to determine if the donation or proposed donation is for a
conservation or preservation purpose and will protect the conservation or
preservation purpose in perpetuity and [that] the resources or areas
contained in the donation or proposed donation are significant or important.
F. If
the secretary finds [that] the donation as conveyed or proposed is for a
conservation or preservation purpose and will protect the conservation or
preservation purpose in perpetuity and [that] the resources or areas
contained in the donation or proposed donation are significant or important,
the secretary shall notify the applicant by letter [that] the applicant
may file an application for certification of eligibility as provided in
3.13.20.10 NMAC. Approval of the
application for certification of eligibility is contingent upon the applicant
meeting the requirements in 3.13.20.10 NMAC, the completed conservation
easement or deed accurately reflecting the donation or proposed donation
described in the donation assessment report and the appraisal bureau issuing a
favorable recommendation of the appraisal.
[In order to] To apply for certification of eligibility,
the applicant may not change a proposed donation, donation assessment report
or, if a proposed donation, the public or private conservation agency to which
the applicant is making the donation after the applicant submits the assessment
application. If the applicant makes such
changes, the applicant shall submit a new assessment application or a letter
describing the specific changes made and must receive a favorable finding
from the secretary before applying for certification of eligibility.
G. The
secretary shall reject an assessment application that is not complete or
correct. If the secretary rejects the
assessment application because the assessment application is incomplete or
incorrect or finds [that] the donation or proposed donation is not for a
conservation or preservation purpose, the donation or proposed donation may not
or will not protect the conservation or preservation purpose in perpetuity or [that]
the resources or areas contained in the donation or proposed donation are not
significant or important, the applicant may not submit an application for
certification of eligibility for the land conservation incentives tax credit. The secretary's letter shall state the
specific reasons why the secretary found the assessment application incomplete
or incorrect, [that] the donation or proposed donation is not for a
conservation or preservation purpose, [that] the donation or proposed
donation may not or will not protect the conservation or preservation purpose
in perpetuity or [that] the resources or areas contained in the donation
or proposed donation are not significant or important.
H. If
the secretary rejects the assessment application because the assessment
application is incomplete or incorrect; or although the assessment application
is complete and correct and the donation or proposed donation is for a
conservation or preservation purpose the resources or areas contained in the
donation or proposed donation are not significant or important; or the donation
or proposed donation may not or will not protect the conservation or
preservation purpose in perpetuity, the applicant may resubmit the application
package with the complete or correct information or additional information [that
addresses] addressing the requirement [that] the resources or
areas contained in the donation or proposed donation be significant or
important or [that] the donation or proposed donation protect the
conservation or preservation purpose in perpetuity. The secretary shall place the resubmitted
assessment application in the review schedule as if it were a new assessment
application.
[3.13.20.9 NMAC - N,
6/16/2008; A, 12/30/2010; A, 1/30/2024]
3.13.20.10 APPLICATION FOR CERTIFICATION OF ELIGIBILITY:
A. An
applicant who submitted an assessment application to the energy, minerals and
natural resources department and received a finding from the secretary [that]
the donation or proposed donation is for a conservation or preservation purpose
and will protect that conservation or preservation purpose in perpetuity and [that]
the resources or areas contained in the donation or proposed donation are
significant or important may apply for certification of eligibility for a land
conservation incentives tax credit. An
applicant may not apply for certification of eligibility for a land
conservation incentives tax credit without first submitting an assessment
application pursuant to 3.13.20.9 NMAC and receiving a favorable finding from
the secretary. The applicant shall
certify in writing [that] the applicant has not changed the donation or
proposed donation, donation assessment report or the public or private
conservation agency to which the applicant conveyed or planned to convey the
donation since the applicant submitted the assessment application; or, if
the applicant has made changes, the applicant shall describe the changes and
provide a redline copy showing the changes or provide a letter describing the
specific changes made. If the applicant
has not made changes or the changes consist solely of
increasing the acreage of the donation or decreasing the size of or removing a
building envelope, the secretary shall review the application for
certification of eligibility. If the
applicant has made changes other than increasing the acreage of the donation or
decreasing the size of or removing a building envelope the applicant shall
submit a new assessment pursuant to 3.13.20.9 NMAC application or a letter
describing the specific changes made and receive a favorable finding from
the secretary before applying for certification of eligibility.
B. The applicant may obtain a land conservation incentives tax credit certification of eligibility application form from the energy, minerals and natural resources department.
C. An
applicant shall submit the certification of eligibility application package,
which shall include one signed, completed paper original and [two paper
copies] one paper copy and one electronic copy of the application
package, to the energy, minerals and natural resources department. For the electronic copy the applicant
shall submit a PDF of the certification application package on a USB flash
drive or by other method the energy, minerals and natural resources department
approves. Any photographs shall be
provided in color. The applicant shall
certify [that] the information and documents included in the application
for certification of eligibility are true and correct.
D. The
completed application for certification of eligibility shall contain the
applicant's name, address, telephone number, e-mail address if available,
signature, federal employer identification number or social security number,
and, if available, the New Mexico [combined reporting system (CRS)] business
tax identification number (BTIN) as well as the certifications,
information and attachments required by Subsections E through I of 3.13.20.10
NMAC, as applicable. If more than one
taxpayer owns the donated land or interest in land, the application shall
include each taxpayer's federal employer identification number or social
security number and, if available, New Mexico [CRS identification number]
BTIN. The applicant shall
indicate on the application whether the applicant is a United States citizen or
resident, a United States domestic partnership, a limited liability company, a
United States domestic corporation, an estate or a trust. If more than one taxpayer owns the donated
land or interest in land, the application shall include each taxpayer's status.
E. The application shall state whether the applicant made the donation as part of a bargain sale. If the applicant made the donation as part of a bargain sale, the application shall include the amount the applicant received from the sale of the land or interest in land.
F. The
applicant shall certify on the certification of eligibility application [that]
none of the taxpayers listed on the certification of eligibility application is
or was a subsidiary, partner, manager, member, shareholder or beneficiary of a
domestic partnership, limited liability company, domestic corporation or
pass-through entity that owns or has owned the land or interest in land in the
five years preceding the date [that] the applicant conveyed the land or
interest in land. If an individual and a
domestic partnership, limited liability company, domestic corporation or
pass-through entity are listed as owners on the deed conveying the land or
interest in land, the applicant shall certify on the certification of
eligibility application [that] the individual is not a partner, manager,
member, shareholder or beneficiary of the domestic partnership, limited
liability company, domestic corporation or pass-through-entity. If more than one domestic partnership,
limited liability company, domestic corporation or pass-through entity are
listed as an owner on the deed conveying the land or interest in land, the
applicant shall certify on the certification of eligibility application [that]
none of the named entities is a subsidiary, partner, manager, member,
shareholder or beneficiary of any of the other entities listed on the deed.
G. The certification of eligibility application package shall consist of a land conservation incentives tax credit application form, with the following required attachments as well as any attachments required in Subsection H of 3.13.20.10 NMAC for fee donations or Subsection I of 3.13.20.10 NMAC for less-than-fee donations:
(1) a
copy of the letter from the secretary stating [that] after reviewing the
applicant's assessment application [that] the donation or proposed
donation is for a conservation or preservation purpose and will protect the
conservation or preservation purpose in perpetuity and [that] the
resources or areas contained in the donation or proposed donation are
significant or important;
(2) written
certification signed by the applicant [that] since the applicant
submitted the assessment application and received approval of the assessment
application or pursuant to Subsection F of 3.13.20.9 NMAC changes to the
assessment application the applicant has not changed the
(a) donation or proposed donation or donation assessment report, or if the applicant has made changes, the changes consist solely of increasing the acreage of the donation or decreasing the size of or removing a building envelope, or
(b) [the] public or private
conservation agency to which the applicant conveyed or planned to convey the
donation [since the applicant submitted the assessment application];
(3) a copy of the conservation easement or deed recorded with the county clerk of the county or counties where the land is located, which reflects the ownership interest of each individual or entity conveying the land or interest in land;
(4) a
qualified appraisal of the land or interest in land donated [that] a
qualified appraiser prepared showing the fair market value of the land or
interest in land with a statement from the appraiser [that] who
prepared the appraisal certifying [that] the appraisal is a qualified
appraisal and [that] the appraiser is a qualified appraiser; the
appraisal shall not be made more than 60 days prior to the date of the
donation; the appraisal shall be a fully documented appraisal report
commensurate with the complexity of the assignment;
(5) if the donation is to a private conservation agency, a copy of that agency's 501(c)(3) certification from the United States internal revenue service;
(6) a
signed statement from the applicant certifying [that] the applicant did
not donate the land or interest in land for open space for the purpose of
fulfilling density requirements to obtain subdivision or building permits;
(7) if the applicant owns other properties within a 10 mile radius of the donated land or interest in land, a legal description of those properties;
(8) signed
authorization from the applicant [that authorizes] authorizing
personnel from the appraisal bureau to contact the appraiser that prepared the
appraisal for the donation;
(9) a
title opinion certifying [that] the applicant owned the donated land or
interest in land as of the date of the donation or a title insurance policy for
the land or interest in land showing [that] the applicant owned the
donated land or interest in land as of the date of the donation;
(10) if
the applicant owns the mineral interest under the land or the interest in land,
a title opinion certifying such ownership, other documentation establishing
such ownership or a report from a professional geologist [that] finding
the probability of surface mining occurring on such property is so remote as to
be negligible, and a provision in the conservation easement or deed [that
prohibits] prohibiting any extraction or removal of minerals by any
surface mining method; methods of mining that have limited, localized negative
effects on the land and [that] are not irremediably destructive of
significant conservation interests may be allowed if the secretary finds [that]
the methods will have limited, localized negative effects and are not
irremediably destructive of significant conservation interests; and
(11) if
the ownership of the surface estate and mineral interest has been separate and
remains separate, a report, satisfactory to the secretary, from a professional
geologist [that] finding the probability of surface mining
occurring on such property is so remote as to be negligible; the secretary may
have a geologist [that] the state employs review the report; if the
secretary finds the report unsatisfactory the secretary's letter denying
certification of eligibility shall state the reasons [that] the report
is unsatisfactory.
H. If the applicant donated the land in fee, the applicant shall also include the following attachments with the application package:
(1) a
statement from the public or private conservation agency to which the applicant
donated the land [that] the applicant donated the land for conservation
or preservation purposes and the public or private conservation agency will
hold the land for such purposes;
(2) a copy of United States internal revenue service form 8283 for the donation signed by the public or private conservation agency and the appraiser who prepared the appraisal for the donation; and
(3) to
ensure the land will be used in perpetuity for the purposes of the donation,
documentation in the form of a conservation easement [that complies] complying
with 26 U.S.C. section 170(h) and its implementing regulations placed on the
land [that contains] containing a provision [in the
conservation easement that] the conservation restrictions run with the land
in perpetuity and [that] any reserved use shall be consistent with the
conservation or preservation purpose (separate donees must hold the fee and
conservation easement).
I. If the applicant donated a less-than-fee interest in land, the applicant shall also include the following attachments with the application package:
(1) a
copy of United States internal revenue service form 8283 for [that] the
donation signed by the public or private conservation agency and the appraiser
who prepared the appraisal for the donation;
(2) a
provision in the conservation easement [that identifies] identifying
the donation's conservation or preservation purpose or purposes;
(3) a
provision in the conservation easement [that provides that] providing
the conveyance of the less-than-fee interest does not and will not adversely
affect contiguous landowners' existing property rights;
(4) if
a conservation or preservation purpose is for the conservation or preservation
of land areas for outdoor recreation by or for the education of the general
public, a provision in the conservation easement [that provides] providing
for the general public's substantial and regular use;
(5) if
a conservation or preservation purpose is for the protection of a relatively
natural habitat, a provision in the conservation easement [that describes]
describing the habitat;
(6) if a conservation or preservation purpose is for the preservation of open space pursuant to a clearly delineated federal, state or local government policy, a provision in the conservation easement identifying such policy and identifying the significant public benefit;
(7) if
a conservation or preservation purpose is for the preservation of open space
that is not pursuant to a clearly delineated federal, state or local government
policy, a provision in the conservation easement stating how the easement or
restriction provides for the general public's scenic enjoyment and [identifies]
identifying the significant public benefit;
(8) if
a conservation or preservation purpose is for the property's continued use for
irrigated agriculture, a provision [that provides that] providing
sufficient water rights will remain with the property;
(9) a
provision in the conservation easement [that] the conservation
restrictions run with the land in perpetuity;
(10) a
provision in the conservation easement [that] any reserved use shall be
consistent with the conservation or preservation purpose;
(11) a
provision in the conservation easement [that prohibits] prohibiting
the donee from subsequently transferring the interest in land unless the
transfer is to another public or private conservation agency and the donee, as
a condition of the transfer, [requires that] requiring the
conservation or preservation purposes for which the donation was originally
intended continue to be carried out;
(12) a
provision in the conservation easement [that provides that] providing
the donation of the less-than-fee interest is a property right, immediately
vested in the donee, and [provides that] providing the
less-than-fee interest has a fair market value [that is] at least equal
to the proportionate value [that] the conservation restriction at the
time of the donation bears to the property as a whole at that time; the
provision shall further provide [that] if subsequent unexpected changes
in the conditions surrounding the property make impossible or impractical the
property's continued use for conservation or preservation purposes and judicial
proceedings extinguish the easement or restrictions then the donee is entitled
to a portion of the proceeds from the property's subsequent sale, exchange or
involuntary conversion at least equal to the perpetual conservation
restriction's proportionate value;
(13) if
the applicant reserves rights [that] if exercised may impair the
conservation interests associated with the property, documentation sufficient
to establish the property's condition at the time of the donation and a
provision in the conservation easement whereby the applicant agrees to notify
the public or private conservation agency receiving the donation before
exercising any reserved right that may adversely impact the conservation or
preservation purposes; and
(14) if
the interest in land is subject to a mortgage, a subordination agreement,
recorded with the county clerk of the county or counties where the land that is
located, from the mortgage holder [that the mortgage holder subordinates]
subordinating the mortgage holder’s rights in the interest in land to
the right of the public or private conservation agency to enforce the
conservation or preservation purposes of the donation in perpetuity.
[3.13.20.10 NMAC - Rp, 3.13.20.9 NMAC, 6/16/2008; A, 12/30/2010; A, 2/12/2016; A, 1/30/2024]
3.13.20.11 CERTIFICATION OF ELIGIBILITY APPLICATION REVIEW PROCESS AND CERTIFICATION
OF ELIGIBLE DONATION:
A. Authority to review. The secretary reviews certification of eligibility applications.
B. Appraisal review. Upon receiving the certification of eligibility application, the secretary requests that the taxation and revenue department review the appraisal and forwards the appraisal to the appraisal bureau for review. The appraisal bureau shall review the appraisal and advise the secretary whether the appraisal meets the requirements of 3.13.20 NMAC including whether the appraisal complies with the uniform standards of professional appraisal practice and whether the appraiser used proper methodology and reached a reasonable conclusion concerning value.
(1) If
the appraisal bureau determines that the appraisal meets the requirements of
3.13.20 NMAC including whether the appraisal complies with the uniform
standards of professional appraisal practice and [that] the appraiser
used proper methodology and reached a reasonable conclusion concerning value
the appraisal bureau shall issue a final review of the appraisal to the energy,
minerals and natural resources department.
(2) If
the appraisal bureau determines [that that] the appraisal does not meet
the requirements of 3.13.20 NMAC, the uniform standards of professional
appraisal practice or [that] the appraiser did not use proper
methodology or reach a reasonable conclusion concerning value the appraisal
bureau shall send a preliminary review of the appraisal to the energy, minerals
and natural resources department identifying the reasons for the appraisal
bureau’s determination.
(3) The appraisal bureau's review does not preclude further audit by the taxation and revenue department or the United States internal revenue service.
C. Rejection of certification of eligibility applications. The secretary shall reject a certification of eligibility application if:
(1) the certification of eligibility application is incomplete or incorrect;
(2) since the applicant submitted and received approval of the assessment application or pursuant to Subsection F of 3.13.20.9 NMAC changes to the assessment application, the applicant changed the
(a) donation or proposed donation or donation assessment report, and the changes consist of more than increasing the acreage of the donation or decreasing the size of or removing a building envelope, or
(b) [the] public or private
conservation agency to which the applicant conveyed or planned to convey the
donation [since the applicant submitted the
assessment application];
(3) the donation does not meet the requirements of 3.13.20.8 NMAC or 3.13.20.10 NMAC;
(4) the completed conservation easement or deed does not accurately reflect the donation the applicant described in the applicant’s assessment application; or
(5) the appraisal bureau provides a final unfavorable recommendation of the appraisal.
D. Notice of cause to reject. If the secretary determines that there is cause to reject the certification of eligibility application, the secretary shall issue notice to the applicant pursuant to 3.13.20.12 NMAC.
E. Resubmittal of rejected certification of eligibility applications.
(1) If
the secretary rejects the certification of eligibility application because the
certification of eligibility application was incomplete or incorrect; does not
meet the requirements of 3.13.20.8 NMAC or 3.13.20.10 NMAC; the filed
conservation easement or deed does not accurately reflect the donation the
applicant described in the applicant’s assessment application; or the appraisal
bureau provides a final unfavorable recommendation of the appraisal, the
applicant may resubmit the application package for the rejected certification
of eligibility application with the complete or correct information or
additional information [that addresses] addressing the
requirements the donation does not meet.
The secretary shall place the resubmitted certification of eligibility
application in the review schedule as if it were a new certification of
eligibility application.
(2) The applicant shall submit a new assessment application pursuant to 3.13.20.8 NMAC, if the secretary rejects the certification of eligibility application because the applicant changed the
(a) donation or proposed donation[,]
or donation assessment report, and the changes consist of more than
increasing the acreage of the donation or decreasing the size of or removing a
building envelope, or
(b) the public or private conservation
agency to which the applicant conveyed or planned to convey the donation since
the applicant submitted the assessment application [, the applicant shall
submit a new assessment application pursuant to 3.13.20.8 NMAC].
F. Approval of certification of eligibility applications.
(1) The secretary approves the certification of eligibility application if the secretary finds:
(a) the donation of land or interest in land meets the requirements of 3.13.20.8 NMAC or 3.13.20.10 NMAC;
(b) the secretary issued a favorable finding on the applicant's assessment application and the applicant has not changed the donation or proposed donation, donation assessment report or the public or private conservation agency to which the applicant conveyed or planned to convey the donation since the applicant submitted the assessment application;
(c) the completed conservation easement or deed accurately reflects the donation the applicant described in the applicant’s assessment application; the donation does not adversely affect contiguous landowners' property rights; and
(d) the
appraisal meets the requirements of 3.13.20 NMAC including compliance with the
uniform standards of professional appraisal practice and [that] the
appraiser used proper methodology and reached a reasonable conclusion
concerning value.
(2) The
secretary's approval is given by the issuance of a letter to the
applicant. This letter shall certify [that]
the donation of land or interest in land includes the conveyance in perpetuity,
on or after January 1, 2004, for a conservation or preservation purpose of a
fee interest in land or a less-than-fee interest in land that meets the
requirements of the Land Conservation Incentives Act; Sections 7-2-18.10 or
7-2A-8.9 NMSA 1978; and 3.13.20 NMAC, and include a calculation of the maximum
amount of the land conservation incentives tax credit for which each taxpayer
is eligible.
[3.13.20.11 NMAC - Rp, 3.13.20.10 NMAC, 6/16/2008; A, 12/30/2010; A, 1/30/2024]
3.13.20.12 NOTICE TO APPLICANT OF PROPOSED REJECTION OF CERTIFICATION OF ELIGIBILITY APPLICATION; APPLICANT RESPONSE; FINAL ACTION:
A. If
after review of a certification of eligibility application, the secretary
determines [that] there is cause to reject the certification of
eligibility application, the secretary shall issue a letter advising the
applicant [that] the secretary is proposing to reject the certification
of eligibility application and stating the specific reasons for the proposed
rejection. If the proposed rejection
involves an unfavorable preliminary review of the appraisal from the appraisal
bureau, the energy, minerals and natural resources department shall include a
copy of the unfavorable preliminary review of the appraisal with the
secretary’s letter.
B. The
applicant shall have 45 days after the issuance of the letter to respond in
writing to the reasons for the proposed rejection and submit a revised
appraisal, information or other documentation [that demonstrates] demonstrating
the application meets the requirements.
C. If
the secretary’s proposed rejection involves an unfavorable preliminary review
of the appraisal from the appraisal bureau and the applicant responds to the
preliminary review of the appraisal within 45 days of the issuance of the
letter, the energy, minerals and natural resources department shall forward the
applicant’s response to the appraisal bureau for review of the response and
issuance of the appraisal bureau’s final review of the appraisal. If the applicant does not respond to the
preliminary review of the appraisal within 45 days of the issuance of the
letter, the energy, minerals and natural resources department shall notify the
appraisal bureau [that] the energy, minerals and natural resources
department did not receive a response to the preliminary review of the
appraisal from the applicant. After
reviewing the applicant’s response, if any, the appraisal bureau shall issue a
final review of the appraisal and advise the secretary whether the appraisal
meets the requirements of 3.13.20 NMAC including whether the appraisal complies
with the uniform standards of professional appraisal practice and whether the
appraiser used proper methodology and reached a reasonable conclusion
concerning value.
D. After
reviewing the applicant’s response, if any, and the appraisal bureau’s final
review of the appraisal the secretary shall determine whether the information
or documents the applicant has supplied satisfactorily address and resolve the
specific reasons for the proposed rejection and issue a letter either rejecting
the certification of eligibility application or approving the certification of
eligibility application. If the
secretary determines [that] the applicant’s response does not
satisfactorily resolve the reasons for the rejection or if the appraisal bureau
has issued a final unfavorable recommendation of the appraisal, the secretary
shall issue a letter denying the certification of eligibility application. The secretary's letter shall state the
specific reasons why the secretary rejected the certification of eligibility
application.
[3.13.20.12 NMAC - N, 6/16/2008; A, 12/30/2010; A, 2/12/2016; A, 1/30/2024]
3.13.20.13 FACTORS IN DETERMINING SUITABILITY FOR CERTIFICATION OF ELIGIBILITY:
A. The donation shall meet the following three criteria for the secretary to consider the donation for certification eligibility:
(1) the land or interest in land fits one or more of the descriptions of purposes in Subsection D of 3.13.20.7 NMAC;
(2) the recipient is a public or private conservation agency with the ability and commitment to monitor and ensure the grantor's compliance with the conservation easement or provide stewardship of the fee land, as applicable; and
(3) the donation provides for the protection in perpetuity of the conservation or preservation purposes for which the applicant donated the land or interest in land through a conservation easement.
B. In determining an application's suitability for certification of eligibility, the secretary considers several factors including the following:
(1) property size;
(2) property condition or potential;
(3) presence of significant natural or cultural resources;
(4) property's location relative to other lands protected for conservation or preservation purposes;
(5) current and future management and use;
(6) contribution to local, regional or state conservation or preservation objectives;
(7) terms of the conservation easement or deed;
(8) qualifications
and stewardship capacity of the public or private conservation agency [that
holds] holding the fee or conservation easement; and
(9) other factors affecting the property's long-term protection and viability.
C. The secretary also considers the criteria listed in the following table in determining whether the resources or areas contained in the donation are significant or important: These criteria relate to the property's overall condition and viability as well as the compatibility of future management and uses and surrounding land uses for maintenance of conservation values.
|
Ranking |
Site Condition |
Development |
Uses |
Surroundings |
Stewardship or
Monitoring |
|
Favorable |
Site is of uniformly good condition and sufficient size to maintain the conservation or preservation purposes, assuming other favorable factors such as good potential for restoration if needed |
Additional development of the property is specifically prohibited or additional development that is allowed is consistent with the conservation or preservation purposes |
Allowed uses of the property are consistent with the conservation or preservation purposes |
Surrounding land uses are entirely compatible with site conservation or preservation purposes, or site serves as a connection between other conservation lands or provides significant or important open space |
If a fee donation, the recipient has sufficient resources as well as a formal plan to provide stewardship for the conservation or preservation purposes. If a less-than-fee donation the recipient has sufficient resources to monitor and ensure the grantor's compliance with the conservation's easement's terms. |
|
Marginal |
Site is of minimum size and condition to maintain the conservation or preservation purposes, assuming other favorable factors |
Additional development allowed that may impair the conservation or preservation purposes |
Allowed uses of the property may be incompatible for long-term maintenance of the conservation or preservation purposes |
Surrounding lands uses are not consistent with site conservation or preservation purposes, and site does not serve as a connection between other conservation lands or provide significant or important open space, but surrounding land uses do not seriously compromise site integrity |
If a fee donation, the recipient has no formal plan and marginal capacity to provide stewardship of the conservation or preservation purposes. If a less-than-fee donation, the recipient has marginal resources to monitor and ensure the grantor's compliance with the conservation's easement's terms. |
|
Unfavorable |
Maintenance of conservation or preservation values is severely compromised by the site's size, configuration, location or condition |
Additional development allowed that is inconsistent with the conservation or preservation purposes |
Allowed uses are clearly incompatible with the long-term maintenance of the conservation or preservation purposes |
Surrounding land uses are clearly incompatible with site conservation or preservation and threaten site integrity and the site does not serve as a connection between other conservation lands or provide significant or important open space |
If a fee donation, the recipient has no plan or resources to provide stewardship of the conservation or preservation purposes. If a less-than-fee donation, the recipient has no or limited resources to monitor and ensure the grantor's compliance with the conservation's easement's terms. |
D. The secretary evaluates each application in the context of the property's unique geographic setting and characteristics, but the secretary will not apply rigid standards relating to tract size or other factors. Instead, the secretary evaluates the donation's overall contribution to the indicated conservation or preservation purpose as well as the probability the purposes will be supported in perpetuity.
[3.13.20.13 NMAC - N, 6/16/2008; A, 1/30/2024]
3.13.20.14 FILING
REQUIREMENTS:
A. After obtaining a certificate of eligibility from the energy, minerals and natural resources department, the applicant shall apply for the land conservation incentives tax credit with the taxation and revenue department on a form the taxation and revenue department develops. The applicant shall attach the certificate of eligibility received from the secretary.
B. If
the applicant complies with all the requirements in Section 7-2-18.10 or
Section [7-2-8.9] 7-2A-8.9 NMSA 1978 and has received the
certificate of eligibility from the secretary, the taxation and revenue
department shall issue a document granting the land conservation incentives tax
credit, which is numbered for identification and includes its date of issuance
and the amount of the land conservation incentives tax credit allowed.
C. A
tax filer shall use a claim form the taxation and revenue department develops
to apply the land conservation incentives tax credit to the tax filer's income
taxes. A tax filer shall submit the
claim form with [its] the tax filer’s income tax return.
D. A
tax filer who has both a carryover credit and a new credit derived from a
qualified donation in the taxable year for which the tax filer is filing the
return shall first apply the amount of carryover credit against the income tax
liability. A tax filer may apply one or
more tax credits against the liability in a given year; provided however, [that]
the tax credits applied shall not exceed the liability for that year. If the amount of liability exceeds the
carryover credit, then the tax filer may apply the current year credit against
the liability.
E. If an applicant claims a charitable deduction on the applicant's federal income tax for a contribution for which the applicant also claims a tax credit pursuant to the Land Conservation Incentives Act, the applicant's itemized deduction for New Mexico income tax shall be reduced by the deduction amount for the contribution to determine the applicant's New Mexico taxable income.
[3.13.20.14 NMAC - Rp, 3.13.20.11 NMAC, 6/16/2008; A, 12/30/2010; A, 1/30/2024]
3.13.20.15 TRANSFER OF THE LAND CONSERVATION INCENTIVES TAX CREDIT:
A. An applicant may sell, exchange or otherwise transfer an approved
land conservation incentives tax credit, represented by the document [that]
the taxation and revenue department issues, for a conveyance made on or after
January 1, 2008. A land conservation
incentives tax credit or increment of a land conservation incentives tax credit
may only be transferred once. An
applicant may transfer the applicant’s land conservation incentives tax credit
to any tax filer.
B. A
tax filer to whom an applicant has transferred a land conservation incentives
tax credit may use the land conservation incentives tax credit in the year [that]
the transfer occurred and carry forward unused amounts to succeeding taxable
years, but may not use the land conservation incentives tax credit for more
than 20 years after the taxation and revenue department originally issued the
land conservation incentives tax credit.
[In order to] To use the land conservation incentives tax
credit for that taxable year, the transfer of the land conservation incentives
tax credit must occur on or before December 31 of that taxable year, if the
individual or entity who will use the land conservation incentives tax credit
has a taxable year of January 1 to December 31, or on or before the end of the
taxable year if the individual or entity has a taxable year that is not January
1 to December 31.
C. An applicant may only transfer a land conservation incentives tax credit in increments of $10,000 or more.
D. An applicant shall use a qualified intermediary to transfer a land conservation incentives tax credit. The qualified intermediary shall notify the taxation and revenue department of the transfer and the date of the transfer on a taxation and revenue department-developed form within 10 days following the transfer. The qualified intermediary shall keep an account of the land conservation incentives tax credit transferred.
E. A qualified intermediary may issue sub-numbers registered with and obtained from the taxation and revenue department.
F. If an individual who owns an interest in the donated property dies prior to selling, exchanging or otherwise transferring the land conservation incentives tax credit, the donor's estate may sell, exchange or otherwise transfer the land conservation incentives tax credit.
[3.13.20.15 NMAC - N, 6/16/2008; A, 12/30/2010; A, 1/30/2024]