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Estate Tax/Land Preservation Tax Credit
• Eliminates the estate tax for deaths that occur On or after July 1, 2007.
• Reforms the Land Preservation Tax Credit to help pay for eliminating estate tax.
Major Features of Land Preservation Reform:
• $50 million of tax credits can be issued in calendar year 2007 and $75 million in tax credits can be issued in each calendar year thereafter. (Note: No cap existed prior to proposed changes)
• Credits registered above the caps in one year are the first draw against the subsequent year’s cap.
• Credit is 40 percent of fair market value, if land is located in Chesapeake Bay Watershed or seaside of Northampton or Appomattox Counties; credit is 40 percent of FMV or $750,000 (equates to $1.9 million FMV), whichever is less, if land is located outside the watershed. (Note: credit was set at 50% prior to proposed changes)
• Donations must meet objective criteria promulgated by Department of Conservation and Recreation.
• Donations that have credit value over $2.5 million (FMV over $6.3 million), must be specifically approved by DCR, in addition to meeting the objective criteria.
• Provides state oversight/accountability of high value credits.
• Only 16 donations have had credit value over $2.5 million in the program’s 6-year history; therefore, this requirement does not produce an administrative burden.
• Appraisal value being claimed must be supported by evidence that property is physically adaptable for use claimed in appraisal and there is a need or demand for such use in the reasonably near future.
• Unusable credit may be carried forward for 10 years. (Note: was set at 5 years prior to proposed changes)
94.9%