Amended in Senate April 15, 2013

Senate Bill No. 355

Introduced by Senator Beall

February 20, 2013

An act to amend begin delete Section end delete begin insert Sections 37002, 37005, end insert 37006 begin insert , 37012, 37013, 37015, 37016, 37021, 37034, 37038, and 37040 end insert of the Public Resources Code, and to amend begin delete Section end delete begin insert Sections end insert 17053.30 and begin delete 25630 end delete begin insert 23630 end insert of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

SB 355, as amended, Beall. Conservation: tax credits.

The Natural Heritage Preservation Tax Credit Act of 2000 requires the Wildlife Conservation Board to implement a program under which property, as defined, may be contributed to the state, any local government, as defined, or to any nonprofit organization designated by a local government, based on specified criteria, in order to provide for the protection of wildlife habitat, open space, and agricultural lands.

The Personal Income Tax Law and the Corporation Tax Law allow a credit against the taxes imposed by those laws in the amount equal to 55% of the fair market value of any qualified contribution, as defined, contributed during the taxable year pursuant to the Natural begin insert Heritage end insert Preservation Tax Credit Act of 2000, as provided.

This bill would begin insert instead require the Natural Resources Agency to implement the Natural Heritage Preservation Tax Credit Act of 2000 and would also end insert allow for the transfer of the credit allowed pursuant to the Natural begin insert Heritage end insert Preservation Tax Credit Act begin insert of 2000 end insert by the taxpayer to an unrelated party, as provided.

 This bill would take effect immediately as a tax levy.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 37002 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37002.  

As used in this division, the following terms have the
following meanings:

begin insert

(a) “Agency” means the Natural Resources Agency created
pursuant to Chapter 1 (commencing with Section 12800) of Part
2.5 of Division 3 of the Government Code.

end insert begin delete

(a)

end delete

begin insert (b) end insert  “Approval” or “approval for acceptance” means the begin delete board’s end delete
begin insert agency’s end insert approval of the granting of a tax credit for a donation of
property pursuant to the program.

begin delete

(b) “Board” means the Wildlife Conservation Board created
pursuant to Article 2 (commencing with Section 1320) of Chapter
4 of Division 2 of the Fish and Game Code.

end delete

(c) “Conservation easement” means a conservation easement,
as defined by Section 815.1 of the Civil Code, that is contributed
in perpetuity.

(d) “Department” means any entity created by statute within
the Natural Resources Agency and authorized to hold title to land,
or the Natural Resources Agency.

(e) (1) “Designated nonprofit organization” means a nonprofit
organization qualified under Section 501(c)(3) of Title 26 of the
United States Code that has as a principal purpose the conservation
of land and water resources and that is designated by a local
government or a department to accept property pursuant to this
division in lieu of the local government or a department. In order
to be eligible to receive a donation of property pursuant to this
division, a nonprofit organization shall have experience in land
conservation.

(2) If bond funds are used pursuant to Chapter 7 (commencing
with Section 37030), the designated nonprofit organization shall
also meet the eligibility requirements specified in the relevant
provision of the applicable bond act, for a nonprofit organization.

(f) “Donee” means any of the following:

(1) A department to which a donor has applied to donate
property.

(2) A local government that has submitted a joint application
with a department requesting approval of a donation of property
to that local government.

(3) A local government that has submitted an application directly
to the begin delete board end delete begin insert agency end insert .

(4) A designated nonprofit organization.

(g) “Donor” means a property owner that donates, or submits
an application to donate, property pursuant to the program.

(h) (1) “Local government” means any city, county, city and
county, or any district, as defined in Section 5902 or in Division
26 (commencing with Section 35100), or any joint powers authority
made up of one or more of those entities or those entities and
departments.

(2) If bond funds are used pursuant to Chapter 7 (commencing
with Section 37030), “local government” also includes any other
local governmental entity eligible to receive bond funds pursuant
to the relevant provision of the applicable bond act.

(i) “Program” means the Natural Heritage Preservation Tax
Credit Program authorized by this division.

(j) “Property” means any real property, and any perpetual
interest therein, including land, conservation easements, and land
containing water rights, as well as water rights.

(k) “Secretary” means the Secretary of the Natural Resources
Agency.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 37005 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37005.  

The begin delete Wildlife Conservation Board end delete begin insert Natural Resources
Agency end insert shall implement the program. The begin delete board end delete begin insert agency end insert may
request staff services from any department that submits an
application and a proposal for a donation of property to the begin delete board end delete
begin insert agency end insert .

begin delete SECTION 1. end delete
begin insert SEC. 3. end insert   

Section 37006 of the Public Resources Code is
amended to read:

37006.  

(a) (1) Under the program, upon approval by the begin delete board end delete
begin insert agency end insert , a donor may contribute qualified property to a donee and
receive a tax credit for a portion of the value of the property, as
provided in Sections 17053.30 and 23630 of the Revenue and
Taxation Code.

(2) If the begin delete board end delete begin insert agency end insert approves a transfer of the credit pursuant
to subdivision (f) of Section 17053.30 or begin insert Section end insert 23630 begin insert of the
Revenue and Taxation Code end insert , the begin delete board end delete begin insert agency end insert shall provide a
certificate to the donor evidencing that approval, in a form
satisfactory to the Franchise Tax Board.

(b) The begin delete board end delete begin insert agency end insert shall adopt guidelines or regulations to
implement the program, including procedures for applications
submitted pursuant to Chapter 4 (commencing with Section 37010)
and for the evaluation of properties proposed to be contributed
pursuant to the program. Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code
does not apply to the guidelines or regulations adopted pursuant
to this section.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 37012 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37012.  

(a) Each donee shall evaluate applications submitted
to it and prepare a plan for the board that sets forth the donee’s
priorities for acquisition of property that qualifies under the
program. Consistent with the criteria established for the program,
each donee may use its own priority lists and procedures in
determining which properties or types of properties shall be given
priority.

(b) Each donee or the begin delete board end delete begin insert agency end insert may request that the
applicant supply further information reasonably necessary to allow
the donee or the begin delete board end delete begin insert agency end insert to evaluate the proposed donation.

(c) The department may accept contributions of money from
any taxpayer to pay or reimburse the costs of appraisal, escrow,
title, and other transaction costs associated with the contribution
of any particular property or set of properties, including any
environmental assessments required by the department, and the
costs of preparing any necessary management plan for the property
or set of properties.

(d) Prior to acquiring an easement or other interest in land
pursuant to this division, a public hearing shall be held by the
donee, if the donee is a public agency, or by the begin delete board end delete begin insert agency end insert if
the donee is a designated nonprofit organization, in the local
community. Notice shall be given by the donee or the begin delete board end delete begin insert agency end insert
to the county board of supervisors of the affected county, adjacent
landowners, affected water districts, local municipalities, and other
interested parties, as determined by the donee or the begin delete board end delete begin insert agency end insert .

(e) When submitting a donation of qualified property to the
begin delete board end delete begin insert agency end insert for final approval, the donee shall provide the begin delete board end delete
begin insert agency end insert with the fair market value of the property proposed for
acceptance, based on appraisals that have been reviewed and
approved by the Department of General Services.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 37013 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37013.  

The begin delete board end delete begin insert agency end insert shall provide a list to the Joint
Legislative Budget Committee and the Franchise Tax Board, in
the form and manner determined by the Franchise Tax Board, of
the names, taxpayer identification numbers, including taxpayer
identification numbers of each partner or shareholder, as applicable,
a legal description of the donated property, and the total amount
of the tax credit approved for each donation.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 37015 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37015.  

The begin delete board end delete begin insert agency end insert shall approve only contributions of
properties that meet one or more of the following criteria:

(a) The property will help meet the goals of a habitat
conservation plan, multispecies conservation plan, natural
community conservation plan, or any other similar plan
subsequently authorized by statute that is designed to benefit native
species of plants, including, but not limited to, protecting forests,
old growth trees, or oak woodlands, and animals and development.
In proposing and approving the acceptance of contributed property
pursuant to this subdivision, the recovery benefits for listed species,
the habitat value of the property, the value of the property as a
wildlife corridor, and similar habitat-related considerations shall
be the criteria on which the acceptance is based.

(b) The property will provide corridors or reserves for native
plants and wildlife that will help improve the recovery possibilities
of listed species and increase the chances that the species will
recover sufficiently to be eligible to be removed from the list, or
will help avoid the listing of species pursuant to the California
Endangered Species Act (Chapter 1.5 (commencing with Section
2050) of Division 3 of the Fish and Game Code) or the federal
Endangered Species Act (16 U.S.C. Sec. 1531 et seq.), or protect
wetlands, waterfowl habitat, or river or stream corridors, or
promote the biological viability of important California species.

(c) The property interest is a perpetual conservation easement
over agricultural land, or is a permanent contribution of agricultural
land, that is threatened by development and is located in an
unincorporated area certified by the secretary to be zoned for
agricultural use by the county. Property accepted pursuant to this
subdivision shall be accepted pursuant to the California Farmland
Conservancy Program Act established by Division 10.2
(commencing with Section 10200), pursuant to the agricultural
conservation program of the Coastal Conservancy, or pursuant to
the Bay Area Conservancy Program established pursuant to Chapter
4.5 (commencing with Section 31160) of Division 21.

(d) (1) The property interest is a water right, or land with an
associated water right, and the contribution of the property will
help improve the chances of recovery of a listed species, will
reduce the likelihood that any species of fish or other aquatic
organism will be listed pursuant to the California Endangered
Species Act (Chapter 1.5 (commencing with Section 2050) of
Division 3 of the Fish and Game begin delete Code)) end delete begin insert Code) end insert or the federal
Endangered Species Act (16 U.S.C. Sec. 1531 et seq.), will improve
the protection of listed species, or will improve the viability and
health of fish species of economic importance to the state. The
donee receiving the water right, or land with an associated water
right, shall ensure that it shall retain title to the water right, and
that the water shall be used to fulfill the purposes for which the
water right or land associated with a water right is being accepted.

(2) Any contribution of a water right that includes a change in
the point of diversion, place of use, or purpose of use may be made
only if the proposed change will not injure any legal user of the
water involved and is made in accordance with either Chapter 10
(commencing with Section 1700), or Chapter 10.5 (commencing
with Section 1725), of Part 2 of Division 2 of the Water Code.

(e) The property will be used as a park or open space or will
augment public access to or enjoyment of existing regional or local
park, beach, or open-space facilities, or will preserve archaeological
resources.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 37016 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37016.  

(a) The begin delete board end delete begin insert agency end insert shall grant approval of a proposed
contribution of property under the program only upon a
determination that:

(1) (A) The donation of property satisfies the requirements for
a qualified contribution pursuant to Section 170 of Title 26 of the
United States Code. If only a portion (either an undivided fractional
interest in the entire property or one or more discrete parcels) of
a proposed conveyance of property satisfies the requirements of
Section 170 of Title 26 of the United States Code, or if the property
is sold for less than fair market value, only that portion, or the
amount representing the difference between the amount paid by
the donee and the fair market value, shall be eligible for the tax
credit, to the extent permitted by Section 170(h) of Title 26 of the
United States Code. The begin delete board end delete begin insert agency end insert may segregate eligible and
ineligible interests in property proposed to be contributed pursuant
to this division. The donor shall receive no other valuable
consideration for the donation of property subject to the tax credit.

(B) For purposes of this division, if the property is proposed to
be donated to satisfy a condition imposed upon the donor by any
lease, permit, license, certificate, or other entitlement for use issued
by one or more public agencies, including, but not limited to, the
mitigation of significant effects on the environment of a project
pursuant to an approved environmental impact report or mitigated
negative declaration required pursuant to the California
Environmental Quality Act (Division 13 (commencing with Section
21000)), that property shall not qualify for the credit provided in
Section 17053.30 or 23630 of the Revenue and Taxation Code.

(2) There has been no release or threatened release of a
hazardous material on the property, unless all of the following
occur:

(i) A final remedy in response to the release has been approved
by the Department of Toxic Substances Control pursuant to Chapter
6.5 (commencing with Section 25100) of, Chapter 6.8
(commencing with Section 25300) of, or Chapter 6.85
(commencing with Section 25396) of, Division 20 of the Health
and Safety Code, or the appropriate California regional water
quality control board pursuant to Chapter 6.7 (commencing with
Section 25280) of Division 20 of the Health and Safety Code.

(ii) The donor or donee have agreed to implement the final
remedy approved pursuant to clause (i).

(iii) The donor or donee have agreed to fund and have made
adequate funding available to pay for the response action, as
defined by Section 25323.3 of the Health and Safety Code.

(b) Notwithstanding paragraph (2) of subdivision (a), a donation
of property containing hazardous materials may be accepted under
the program without satisfying the requirements of paragraph (2)
of subdivision (a) if the donee determines, based on written
findings from the Department of Toxic Substances Control and
the California regional water quality control board with jurisdiction
over the property, that the hazardous materials present will pose
no substantial risk to human health or the environment and no
substantial risk of liability on the donee under the conditions under
which the property will be used. The Department of Toxic
Substances Control and the California regional water quality
control board with jurisdiction over the property shall carry out
their normal due diligence when developing the written findings
that will be the basis for the written determination regarding the
presence and risk of toxic materials on the property by the
Department of Toxic Substances Control or the regional board,
whichever is applicable. As used in this subdivision, “hazardous
materials” has the same meaning as contained in subdivision (d)
of Section 25260 of the Health and Safety Code.

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 37021 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37021.  

(a) If any property approved for acceptance pursuant
to this division is later transferred by the donee, the use of the
property shall be restricted by deed to the conservation purposes
for which the property was contributed pursuant to the program.
If the begin delete board end delete begin insert agency end insert determines that the conservation purposes for
which the property was contributed can no longer be achieved due
to significantly changed circumstances beyond the control of the
donee that accepted the property, the proceeds of the sale shall be
used by the donee that accepted the property to acquire land in
California of equal or greater value and comparable public
resources values, as determined by the begin delete board end delete begin insert agency end insert . The land
acquired shall meet the criteria of Section 37015. Nothing in this
division prohibits the transfer of donated property to a nonprofit
organization that is qualified to manage the property for the
purposes intended by this division, if the terms of this section are
met. Any local government or nonprofit organization seeking to
sell land pursuant to this subdivision shall first obtain the approval
of the begin delete board end delete begin insert agency end insert .

(b) Other than as provided by subdivision (a), property approved
for acceptance pursuant to this division shall be used only for
purposes consistent with Section 37015.

(c) (1) If any unauthorized use is made of the property after the
property is donated to a local government or nonprofit organization
pursuant to this program, the local government or nonprofit
organization shall seek to terminate the unauthorized use and
restore the conservation benefits for which the property was
contributed. If the begin delete board end delete begin insert agency end insert determines that the unauthorized
use has not been terminated and the conservation benefits fully
restored within a reasonable period of time, the fee title owner of
the property shall pay to the state the greater of the following:

(A) The fair market value of the property based on appraisals
when accepted by the begin delete board end delete begin insert agency end insert .

(B) The fair market value of the property based on appraisals
at the time of and based on the unauthorized use of the property.

(2) The department that is the donee or the begin delete board end delete begin insert agency end insert may
seek injunctive relief to prevent the unauthorized use of the
property, or may assume ownership or management of the property
to assure that it is used in the manner originally authorized.

(d) The begin delete board end delete begin insert agency end insert shall develop a process to monitor the
uses of any land that a local government or nonprofit organization
receives pursuant to this division in order to ensure those uses are
in conformance with the purposes for which the property is
accepted.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 37034 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37034.  

(a) (1) If a department determines that property is
available for acquisition by donation, and that the acquisition of
the property would comply with the requirements of an applicable
bond provision specified in subdivision (c) of Section 37032 and
any applicable guidelines developed for that bond provision by
the administering agency, and the department believes the
acquisition of the property would comply with the requirements
of this division, the department may request the prospective donor
of the property to submit an application pursuant to Section 37010.
If the prospective donor agrees to submit that application, the
department may apply for approval of the donation pursuant to the
requirements of this division.

(2) If a local government determines that property is available
for acquisition by donation, and that the acquisition of the property
would comply with the requirements of an applicable bond
provision specified in subdivision (c) of Section 37032 and any
applicable guidelines developed for that bond provision by the
administering agency, and the local government believes that the
acquisition of the property would comply with the requirements
of this division, the local government may request the department
that allocated to it the relevant bond funds to determine whether
it agrees with the local government’s determinations and beliefs
made pursuant to this paragraph. If the department agrees with the
local government and gives its approval for the acquisition with
bond funds that it has allocated to the local government, the local
government may request the prospective donor of the property to
submit an application pursuant to Section 37010. If the prospective
donor agrees to submit the application, the local government may
apply for approval of the donation pursuant to the requirements
of this division.

(3) In addition to the requirements of Section 37011, the
application shall include, and shall not be accepted if it does not
include, a signed authorization by the donor, in a form and manner
mutually agreeable to the begin delete board end delete begin insert agency end insert and the Franchise Tax
Board, for the disclosure of the information necessary to make the
payment as required by subdivision (b). For purposes of subdivision
(b) of Section 1798.24 of the Civil Code, the signed authorization
shall be the donor’s voluntary consent to the disclosure of the
information.

(b) (1) If the begin delete board end delete begin insert agency end insert gives approval, the department or
local government may acquire the property pursuant to this
division. Through the process outlined in this section, the
department shall reimburse the General Fund for the tax credit
claimed pursuant to this chapter under Section 17053.30 or 23630
of the Revenue and Taxation Code by transferring bond funds
identified under subdivision (c) of Section 37032 to the Natural
Heritage Preservation Tax Credit Reimbursement Account, on the
basis of information provided to the department under Section
37040 regarding credit claimed for a qualified contribution under
Section 17053.30 or 23630 of the Revenue and Taxation Code in
that tax year.

(2) If a local government applies directly to the begin delete board end delete begin insert agency end insert
for acceptance of a qualified donation, the begin delete board end delete begin insert agency end insert may
provide conditional approval for the local government to acquire
the property pursuant to this division. Through the process outlined
in this section, the local government shall reimburse the General
Fund for the tax credit claimed pursuant to this chapter under
Section 17053.30 or 23630 of the Revenue and Taxation Code by
transferring funds in the full amount of the approved tax credit to
the board for deposit into the Natural Heritage Preservation Tax
Credit Reimbursement Account.

(3) (A) Upon approval by the begin delete board end delete begin insert agency end insert , and prior to the
time the department, local government, or designated nonprofit
organization receives the property, the department shall encumber
bond funds identified under subdivision (c) of Section 37032 in
an amount necessary to pay for the tax credit as provided in Section
17053.30 or 23630, as applicable, of the Revenue and Taxation
Code.

(B) If a local government applies directly to the begin delete board end delete begin insert agency end insert
for acceptance of a qualified donation, and the begin delete board end delete begin insert agency end insert
provides conditional approval of the qualified donation, the local
government shall have 60 days to transfer to the begin delete board end delete begin insert agency end insert the
full amount of funds necessary to reimburse the General Fund.
Upon receipt of the funds necessary to reimburse the General Fund,
the begin delete board end delete begin insert agency end insert shall provide the donor and the local government
with a notice of final approval of the tax credit. A tax credit is not
approved until such time as the donor and local government receive
a final notification from the begin delete board end delete begin insert agency end insert that sufficient funds
have been received to reimburse the General Fund for the loss of
revenue associated with the tax credit.

(C) The acquisition agreement or any other document that
clearly delineates the commitment pursuant to this division shall
be the only documentation required for the department to encumber
the bond funds as required by this paragraph.

(D) Except as prohibited by the relevant bond act,
notwithstanding Section 13340 of the Government Code or any
other provision of law, the encumbrance shall be available without
regard to fiscal years to allow payments to the Natural Heritage
Preservation Tax Credit Reimbursement Account for the tax credit
due the donor of the property under Section 17053.30 or 23630,
as applicable, of the Revenue and Taxation Code.

(4) The Franchise Tax Board shall provide the begin delete board end delete begin insert agency end insert
information pursuant to subdivision (a) of Section 19560 of the
Revenue and Taxation Code on tax credits claimed. The
information shall include the tax year for which the credit was
claimed. The begin delete board end delete begin insert agency end insert shall provide the information required
by Section 37040 to the relevant department. Upon notification
that a qualified tax credit has been claimed, the department,
pursuant to paragraph (1), shall transfer bond funds in the amount
of the tax credit for that tax year to the Natural Heritage
Preservation Tax Credit Reimbursement Account within 60 days
of receipt of the notification. The department shall notify the begin delete board end delete
begin insert agency end insert of this transfer.

(5) The begin delete board end delete begin insert agency end insert shall forward the information it receives
pursuant to paragraph (4) to the Controller and the Department of
Finance, which shall use the information for the purpose of
attributing the budgetary impact of the credit and bond fund transfer
to the appropriate tax and fiscal year.

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 37038 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37038.  

If the begin delete board end delete begin insert agency end insert is the department that receives
moneys pursuant to any of the bond provisions listed in subdivision
(c) of Section 37032 and the begin delete board end delete begin insert agency end insert wishes to use those
bond funds to acquire property pursuant to this division using those
bond funds, the begin delete board end delete begin insert agency end insert shall make separate determinations
regarding whether the acquisition of that property would comply
with the purpose of the applicable bond provision and any
applicable guidelines developed for that bond provision by the
administering agency, and whether the acquisition would comply
with the requirements of this division.

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 37040 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

37040.  

(a) The begin delete board end delete begin insert agency end insert shall notify the Controller, the
Treasurer, and the relevant department of the information listed
in subdivision (b) after the begin delete board end delete begin insert agency end insert receives notification from
the Franchise Tax Board pursuant to Section 19560 of the Revenue
and Taxation Code that a person is claiming a tax credit under this
chapter.

(b) The begin delete board end delete begin insert agency end insert shall provide all of the following
information:

(1) The bond fund and specific provision of the bond act under
which the credit is being claimed.

(2) The project name, appropriation under which the credit was
encumbered, and, if applicable, the related local government.

(3) The department that will transfer the appropriate bond funds
to the Natural Heritage Preservation Tax Credit Reimbursement
Account.

(4) The amount of the tax credit for that tax year.

begin delete SEC. 2. end delete
begin insert SEC. 12. end insert   

Section 17053.30 of the Revenue and Taxation Code
is amended to read:

17053.30.  

(a) There shall be allowed as a credit against the
“net tax,” as defined in Section 17039, an amount equal to 55
percent of the fair market value of any qualified contribution made
on or after January 1, 2000, and not later than June 30, 2008, and
on or after January 1, 2010, and not later than June 30, 2015, by
the taxpayer during the taxable year to the state, any local
government, or any designated nonprofit organization, pursuant
to Division 28 (commencing with Section 37000) of the Public
Resources Code.

(b) For purposes of this section, “qualified contribution” means
a contribution of property, as defined in Section 37002 of the Public
Resources Code, that has been approved for acceptance by the
begin delete Wildlife Conservation Board end delete begin insert Natural Resources Agency end insert pursuant
to Division 28 (commencing with Section 37000) of the Public
Resources Code.

(c) In the case of any pass-thru entity, the fair market value of
any qualified contribution approved for acceptance under Division
28 (commencing with Section 37000) of the Public Resources
Code shall be passed through to the partners or shareholders of
the pass-thru entity in accordance with their interest in the pass-thru
entity as of the date of the qualified contribution. For purposes of
this subdivision, the term “pass-thru entity” means any partnership,
“S” corporation, or limited liability company treated as a
partnership.

(d) If the credit allowed by this section exceeds the “net tax,”
the excess may be carried over to reduce the “net tax” in the
following year, and the succeeding seven years if necessary, until
the credit is exhausted.

(e) This credit shall be in lieu of any other credit or deduction
which the taxpayer may otherwise claim pursuant to this part with
respect to the property or any interest therein that is contributed.

(f) (1) Notwithstanding any other law, for each taxable year
beginning on or after January 1, 2013, a taxpayer may transfer any
credit begin insert , in whole or in part, end insert allowed under this section to an
unrelated party.

begin delete

(2) The taxpayer shall report to the Wildlife Conservation Board
prior to the transfer of the credit, in the form and manner specified
by the Wildlife Conservation Board, all required information
regarding the transfer of the credit, including the social security
or other taxpayer identification number of the unrelated party to
whom the credit has been transferred and the face amount of the
credit transferred, for the approval of the Wildlife Conservation
Board.

(3) Upon approval of the transfer, the Wildlife Conservation
Board shall provide a certificate to the taxpayer evidencing the
approval, in the form and manner specified by the Franchise Tax
Board, that shall include all required information regarding the
credit.

end delete begin insert

(2) At the time the project is under consideration by a
department or agency, the donor shall indicate to the department
or the Natural Resources Agency, in the form and manner specified
by the department or the Natural Resources Agency, the donor’s
interest in transferring the credit, in whole or in part, to an
unrelated party.

end insert begin insert

(3) On and after January 1, 2013, the Natural Resources Agency
shall maintain a list of parties that are interested in acquiring a
tax credit pursuant to this subdivision. The Natural Resources
Agency shall collect all required information necessary for the
transfer of the credit, including the social security or other
taxpayer identification number of the unrelated party to whom a
credit could be transferred and the amount of the tax credit the
party is interested in acquiring.

end insert begin insert

(4) As part of the approval process, the Natural Resources
Agency shall match projects with donors interested in transferring
credits with parties interested in acquiring a tax credit. All parties
shall agree to any proposed transfer of a tax credit.

end insert begin insert

(5) The Natural Resources agency shall establish procedures
as needed, including, but not limited to, the use of an escrow
account, for the tax credit to be purchased by the acquiring entity,
the donor to receive the payment for the value of the transferred
tax credit at the time of project closing, and for a certificate
evidencing the tax credit to be given to the unrelated party. The
Natural Resources Agency shall issue a certificate, in the form
and manner specified by the Franchise Tax Board, that shall
include all required information regarding the credit.

end insert begin insert

(6) For purposes of this subdivision, “department” has the same
meaning as defined in subdivision (d) of Section 37002 of the
Public Resources Code.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 13. end insert   

Section 23630 of the Revenue and Taxation Code is
amended to read:

23630.  

(a) There shall be allowed as a credit against the “tax,”
as defined in Section 23036, an amount equal to 55 percent of the
fair market value of any qualified contribution made on or after
January 1, 2000, and not later than June 30, 2008, and on or after
January 1, 2010, and not later than June 30, 2015, by the taxpayer
during the taxable year to the state, any local government, or any
designated nonprofit organization, pursuant to Division 28
(commencing with Section 37000) of the Public Resources Code.

(b) For purposes of this section, “qualified contribution” means
a contribution of property, as defined in Section 37002 of the Public
Resources Code, that has been approved for acceptance by the
begin delete Wildlife Conservation Board end delete begin insert Natural Resources Agency end insert pursuant
to Division 28 (commencing with Section 37000) of the Public
Resources Code.

(c) In the case of any pass-thru entity, the fair market value of
any qualified contribution approved for acceptance under Division
28 (commencing with Section 37000) of the Public Resources
Code shall be passed through to the partners or shareholders of
the pass-thru entity in accordance with their interest in the pass-thru
entity as of the date of the qualified contribution. For purposes of
this subdivision, the term “pass-thru entity” means any partnership
or “S” corporation.

(d) If the credit allowed by this section exceeds the “tax,” the
excess may be carried over to reduce the “tax” in the following
year, and the succeeding seven years if necessary, until the credit
is exhausted.

(e) This credit shall be in lieu of any other credit or deduction
that the taxpayer may otherwise claim pursuant to this part with
respect to the property or any interest therein that is contributed.

(f) (1) Notwithstanding any other law, for each taxable year
beginning on or after January 1, 2013, a taxpayer may transfer any
credit begin insert , in whole or in part, end insert allowed under this section to an
unrelated party.

begin delete

(2) The taxpayer shall report to the Wildlife Conservation Board
prior to the transfer of the credit, in the form and manner specified
by the Wildlife Conservation Board, all required information
regarding the transfer of the credit, including the social security
or other taxpayer identification number of the unrelated party to
whom the credit has been transferred and the face amount of the
credit transferred, for the approval of the Wildlife Conservation
Board.

end delete begin delete

(3) Upon approval of the transfer, the Wildlife Conservation
Board shall provide a certificate to the taxpayer evidencing the
approval, in the form and manner specified by the Franchise Tax
Board, that shall include all required information regarding the
credit.

end delete begin insert

(2) At the time the project is under consideration by a
department or agency, the donor shall indicate to the department
or the Natural Resources Agency, in the form and manner specified
by the department or the Natural Resources Agency, the donor’s
interest in transferring the credit, in whole or in part, to an
unrelated party.

end insert begin insert

(3) On and after January 1, 2013, the Natural Resources Agency
shall maintain a list of parties that are interested in acquiring a
tax credit pursuant to this subdivision. The Natural Resources
Agency shall collect all required information necessary for the
transfer of the credit, including the social security or other
taxpayer identification number of the unrelated party to whom a
credit could be transferred and the amount of the tax credit the
party is interested in acquiring.

end insert begin insert

(4) As part of the approval process, the Natural Resources
Agency shall match projects with donors interested in transferring
credits with parties interested in acquiring a tax credit. All parties
shall agree to any proposed transfer of a tax credit.

end insert begin insert

(5) The Natural Resources agency shall establish procedures
as needed, including, but not limited to, the use of an escrow
account, for the tax credit to be purchased by the acquiring entity,
the donor to receive the payment for the value of the transferred
tax credit at the time of project closing, and for a certificate
evidencing the tax credit to be given to the unrelated party. The
Natural Resources Agency shall issue a certificate, in the form
and manner specified by the Franchise Tax Board, that shall
include all required information regarding the credit.

end insert begin insert

(6) For purposes of this subdivision, “department” has the same
meaning as defined in subdivision (d) of Section 37002 of the
Public Resources Code.

end insert

begin delete SEC. 4. end delete
begin insert SEC. 14. end insert   

This act provides for a tax levy within the meaning
of Article IV of the Constitution and shall go into immediate effect.