California's Revenue and Taxation Code contains provisions for all sorts of tax credits, most of them intended to encourage business or personal investment in activities deemed to have social value — creating jobs, saving energy, reducing waste, supporting charitable works. One of the newest provisions offers tax credits in exchange for the donation of land, water or development rights. Thus far, however, the Natural Heritage Preservation Tax Credit appears to be mostly a tool to provide tax relief to corporations and rich people who own view property near affluent coastal communities. Nearly a decade ago, California Assemblyman Jack O'Connell thought it would be a good idea to offer tax breaks for conservation of farmland and wildlife habitat. At the time, it did not seem as if doing so would prove all that difficult — Californians have a tradition of endorsing general obligation bonds and other revenue sources for land and water conservation, and legislators have never been shy about manipulating the tax code to curry support from potent voting blocs or important campaign contributors. Beginning in 1995, O'Connell repeatedly introduced bills to establish a tax credit for donations of land and water for parks, wildlife habitat and open space. But, dissuaded by estimates of lost revenues and antipathy from Gov. Pete Wilson, the Legislature rejected O'Connell's bills during the 1995-96 and 1997-98 sessions. Democrat Gray Davis replaced Wilson and California's economy revived. In the 1999-2000 session, a newer version of O'Connell's bill (SB 1647) sailed trough the Legislature and was signed by Davis. Known as the Natural Heritage Preservation Tax Credit (NHPTC) Act of 2000, it has become a little-noticed but important tool for conservationists. In its first year, the NHPTC has been responsible for protecting more than 5,200 acres worth about $60 million. Although the projects vary widely in purpose and geographical distribution, they have so far tended to involve major landowners and developers near affluent coastal communities rather than small, rural landowners, whose property typically is under greatest pressure to urbanize. The NHPTC authorizes tax credits for donation of land to state or local agencies, or to designated nonprofit organizations. Applications are subject to approval by the state Wildlife Conservation Board (WCB), which requires that the donation "result in the protection, in perpetuity (fee or conservation easement) of agricultural lands, rangelands, open space, wildlife habitat, oak woodlands, wetlands, waterfowl habitat, wildlife corridors, archaeological resources and/or the lands used for park purposes. In addition, water resources may be donated that will help improve the recovery of threatened or endangered species of plants and animals." The credit amounts to 55% of the property's appraised fair market value. The WCB, which meets quarterly and has three members — state Finance Director Timothy Gage, Department of Fish and Game Director Robert Hight, and Fish and Game Commissioner Michael Flores — is authorized to approve credits until the total reaches $100 million or until the end of 2005, whichever comes first. The WCB has approved $33.6 million in credits for 10 applications. Three more proposals, requesting about $5.5 million, were on the board's February 27 agenda. The first project approved under NHPTC was a donation from Mid-State Bank of 20.75 acres to the Cambria Community Services District, for a credit of $1.28 million. The property is in Cambria, a tourist-oriented hamlet near Hearst Castle. Mid-State Bank had planned a 36,000 square-foot shopping center on the meadow; the donation retired all development rights for the parcel. The WCB approved five applications in August 2001: * Donation of rights to 540 acre-feet of water on Battle Creek, within the state's Battle Creek Wildlife Area in Tehama County, for a tax credit of $269,500. * Donation of 282 acres to the Sacramento Prairie Vernal Pool Preserve, for $698,500. * Donation of 151.21 acres to the Santa Monica Mountains Conservancy in Los Angeles County, for a credit of $2.88 million. * Donation of 119 acres to The Trust for Public Land in Monterey County, for a credit of $2.97 million. The largest donation so far was of 1,016 acres at the western boundary of Topanga Canyon State Park within the Santa Monica Mountains National Recreational Area. That gift earned landowner Alfred E. Mann (a biomedical entrepreneur and philanthropist who has donated more than $100 million to the University of Southern California) a tax credit worth $16.11 million — nearly half the total approved so far under the NHPTC. Also in November, the board approved its second most valuable donation: 30 acres on the Carpinteria Bluffs in Santa Barbara County to The Trust For Public Land. The parcel includes 10 acres of oceanfront view property long coveted by residents as public recreation space and for its value as wildlife habitat. The owner — Venoco, Inc., the state's largest independent oil and gas producer — was allocated a tax credit of $7.31 million. Three other donations round out the credits that the WCB approved in November: * A conservation easement on more than 3,000 acres of the Eagle Ridge Ranch in north-central Calaveras County, donated to the Department of Fish and Game, for a credit of $1.43 million. * Donation of about 22 acres on the Hart Ranch to expand Clear Lake State Park in Lake County, for a credit of $20,350. * Donation of 92 acres of coastal scrub and pine forest for inclusion in Tomales Bay State Park, in western Marin County, for a credit of $651,750. The WCB's February 27 agenda had two more proposals for large and costly land deals in the Southern California mountains: a donation of 58.8 acres by Shea Homes Limited Partnership to the Conejo Recreation and Park District in Thousand Oaks, expanding the agency's historic Joel McCrea Ranch in the Santa Monica Mountains for a credit of $2.37 million; and Cima Del Mundo Limited Partnership's donation of a conservation easement on 1,406 acres in the Santa Ynez Mountains to the Land Trust of Santa Barbara for a credit of $3 million. The February agenda also contains the first specifically intended to preserve farmland as farmland: donation of an agricultural conservation easement protecting 116.5 acres just west of Madera to the American Farmland Trust for a credit of $93,500. Contacts: Marilyn Cundiff, Wildlife Conservation Board, 916-445-1079. Natural Heritage Preservation Tax Credit Act of 2000: Wildlife Conservation Board: