                                 CODE OF VIRGINIA

DETERMINATION OF FAIR MARKET VALUE OF DONATION (§ 58.1-512.1)

A. Each appraisal estimating the value of any donation upon which credits are to
be based shall employ proper methodology and be appropriately supported by
market evidence. The Department of Taxation shall establish and make publicly
available guidelines that incorporate, as applicable (without limitation),
requirements under &#xA7; 170(h) of the United States Internal Revenue Code of
1986, as amended, and the Uniform Standards of Professional Appraisal Practice
(USPAP). The Department shall update the guidelines as necessary as determined
by the Tax Commissioner. Such guidelines shall be exempt from the Administrative
Process Act (&#xA7; 2.2-4000 et seq.) but the Department shall provide for
adequate public participation, including adequate notice and opportunity to
provide comments on the proposed guidelines.

B. For purposes of any appraisal for a conveyance under the provisions of this
article, the value for any structures or other improvements to land shall be
determined in accordance with law. For any otherwise qualified donation of a
less-than-fee interest under this article, however, no more than 25% of the
total credit allowed shall be for reductions in value to any structures and
other improvements to land.

C. The fair market value of any property with respect to a qualified donation
shall not exceed the value for the highest and best use (i) that is consistent
with existing zoning requirements; (ii) for which the property was adaptable and
needed or likely to be needed in the reasonably near future in the immediate
area in which the property is located; (iii) that considers factors such as, by
way of illustration and not limitation, slopes, flood plains, and soil
conditions of the property; and (iv) for which existing roads serving the
property are sufficient to support commercial or residential development in the
event that is the highest and best use proposed for the property. Any appraisal
submitted in support of an application for a credit under this article shall
include an affidavit by the appraiser that to the best of his knowledge and
belief the valuation complies with this section and shall set forth in the
affidavit or refer to the specific portion of the appraisal setting forth the
facts and basis for this knowledge and belief.

HISTORY: 2006, Sp. Sess. I, cc. 4, 5.