B. Forever wild open space is an area of open space land that is eligible for an additional cumulative percentage reduction in valuation because it is permanently protected and subject to restrictions or committed to uses by a nonprofit entity in accordance with section 1109, subsection 3, paragraph H that ensure that in the future the natural resources on that protected property will remain substantially unaltered, except for:

(1) Fishing or hunting;

(2) Harvesting shellfish in the intertidal zone;

(3) Prevention of the spread of fires or disease; or

(4) Providing opportunities for low-impact outdoor recreation, nature observation and study.

C. Public access open space is an area of open space land, whether ordinary, permanently protected or forever wild, that is eligible for an additional cumulative percentage reduction in valuation because public access is by reasonable means and the applicant agrees to refrain from taking action to discourage or prohibit daytime, nonmotorized and nondestructive public use. The applicant may permit, but is not obligated to permit as a condition of qualification for public access status, hunting, snowmobiling, overnight use or other more intensive outdoor recreational uses. The applicant, without disqualifying land from status as public access open space, may impose temporary or localized public access restrictions to:

(1) Protect active habitat of endangered species listed under Title 12, chapter 713, subchapter V;

(2) Prevent destruction or harm to fragile protected natural resources under Title 38, chapter 3, subchapter I, article 5-A; or

(3) Protect the recreational user from any hazardous area.

D.__Wildlife habitat open space is an area of open space land identified by the Department of Inland Fisheries and Wildlife or the Department of Conservation that is subject to a written management agreement between the landowner and either appropriate department to ensure that the habitat benefits provided by this land are not lost.__Management agreements may be revised or updated by mutual consent of both parties at any time.__These management agreements must be renewed at least every 10 years.__Wildlife open space land may be included in a municipal comprehensive plan or an area zoned for resource protection.

Sec. 5. 36 MRSA §1108, sub-§1, as amended by PL 1999, c. 731, Pt. Y, §3, is further amended to read:

1. Organized areas. The municipal assessors shall adjust the 100% valuations per acre for farmland for their jurisdiction by whatever ratio or percentage of current just value is then being applied to other property within the municipality to obtain the assessed values. For any tax year, the classified farmland value must reflect only the current use value for farm or open space purposes and may not include any increment of value reflecting development pressure. Commencing April 1, 1978, land in the organized areas subject to taxation under this subchapter must be taxed at the property tax rate applicable to other property in the municipality, which rate must be applied to the assessed values so determined. The State Tax Assessor shall make payments to a municipality by the same method as in section 578, subsection 1 for all lands enrolled as open space under this subchapter.

Sec. 6. 36 MRSA §1109, sub-§3, ¶¶M and N, as enacted by PL 1989, c. 748, §4, are amended to read:

M. The identification of the land or of outstanding natural resources on the land by a legislatively mandated program, on the state, local or federal level, as particular areas, parcels, land types or natural resources for protection including, but not limited to, the Register of Critical Areas under Title 5, chapter 312; the laws governing wildlife sanctuaries and management areas under Title 12, sections 7651 and 7652; the laws governing the State's rivers under Title 12, chapter 200; the natural resource protection laws under Title 38, chapter 3, subchapter I, article 5-A; and the Maine Coastal Barrier Resources Systems under Title 38, chapter 21; or

N. Whether the land contains historic or archeological resources listed in the National Register of Historic Places or is determined eligible for such a listing by the Maine Historic Preservation Commission, either in its own right or as contributing to the significance of an adjacent historic or archeological resource listed, or eligible to be listed, in the National Register of Historic Places.; or

Sec. 7. 36 MRSA §1109, sub-§3, ¶O is enacted to read:

O.__The written agreement between the landowner and the Department of Inland Fisheries and Wildlife or the Department of Conservation, for wildlife habitat open space land.

Sec. 8. 36 MRSA §5219-U is enacted to read:

§5219-U.__Credit for land conveyed for conservation and

preservation purposes

A taxpayer is allowed a credit against tax imposed by this Part to be computed and subject to the provisions of this section.

1.__Definitions.__As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A.__"Cooperating entity" has the same meaning as in Title 5, section 6209.

B.__"Interest in real property" means any right in real property, including access to or improvements on the property, or water, including, but not limited to, fee simple; an easement, including a conservation easement, provided that the interest complies with the requirements of the United States Internal Revenue Code, Section 170(h); partial interest; a mineral right; a remainder or future interest; or other interest or right in real property.

C.__"Land" means real property, with or without improvements; rights-of-way, water and riparian rights; easements; privileges and all other rights or interests in any land, relating to or connected with real property.

D.__"Public access" means that the public's ability to enter onto the land meets the requirements set forth in section 1106-A, subsection 3.

2.__Value of credit.__The tax credit allowed under this section is equal to 40% of the fair market value of any land or interest in land located in this State that is conveyed for the

purpose of open space, natural resource or wildlife conservation or land, agricultural or watershed preservation.

A.__The taxpayer is allowed an additional credit equal to 10% of the fair market value of the donated land or interest in land if the taxpayer allows public access to the land.

B.__The amount of the credit that may be claimed by a taxpayer may not exceed $100,000 for individuals and $250,000 for corporations.

C.__In any one 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 one tax year may be carried over for a maximum of 20 consecutive tax years following the tax year in which the credit originated until fully expended.

3.__Qualified donations.__Qualified donations include the conveyance in perpetuity of a fee interest in real property or a less-than-fee interest in real property, or a watershed preservation restriction.

The use and protection of land or interest in land for open space, natural area protection, wildlife habitat conservation, land preservation, agricultural preservation or similar use and purpose of that property must be ensured in perpetuity.

The fee interest or less-than-fee interest must qualify as a charitable contribution deduction under the United States Internal Revenue Code, Section 170(h).

Dedications of land for open space to fulfill density requirements to obtain subdivision or building permits are not qualified donations.

4.__Fair market value.__The fair market value of qualified donations made under this section must be substantiated by a qualified appraisal.

5.__Land recipient. Qualified donations are eligible for the tax credit if those donations are made to the State or a cooperating entity as that term is defined in Title 5, section 6201, subsection 2.

6.__Transfer of credit.__A taxpayer claiming a tax credit under this section may transfer, for consideration, all or a portion of any unexpended tax credit that may be available to another taxpayer for use by that other taxpayer, as transferee, to apply as a credit against tax imposed by this Part.__Notice of

this transfer and the amount of the tax credits transferred in this manner must be filed with the transferee's and transferor's tax returns, pursuant to rules adopted to implement this subsection.

7.__Limitations.__A taxpayer claiming a tax credit under this section may not claim a credit under any similar law for costs related to the same project.

8.__Use by trust, estate, partnership, limited liability corporation or partnership, limited partnership, subchapter S corporation or other fiduciary.__Any tax credits claimed under this section and 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 must be used either by that entity in the event it is the taxpayer on behalf of that entity or by the member, manager, partner, shareholder or beneficiary, as the case may be, in proportion to the member's, manager's, partner's, shareholder's or beneficiary's interest in that entity in the event that income, deductions and tax liability pass through the entity to that member, manager, partner, shareholder or beneficiary.__Tax credits under this section may not be claimed by both the entity and the member, manager, partner, shareholder or beneficiary for the same donation.

9.__Rules.__Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.

10.__Construction.__No part or segment of this section may 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.

Sec. 9. Effective date. This Act takes effect June 1, 2002.

SUMMARY

This bill allows a reduction in local property tax assessments for land that is wildlife habitat open space. It also reimburses municipalities for lands enrolled as open space, including wildlife habitat open space.

The bill also creates a tax credit for state income taxes for the donation of land or interest in land that is preserved for conservation or public access purposes. The bill stipulates certain requirements that these donations must meet to ensure

that they are bona fide donations and are made in the public interest.