A pair of lawmakers plan to introduce bipartisan legislation in the House that would provide permanent tax incentives to family farmers, ranchers and other landowners who choose not to develop their land and instead preserve their property for conservation.
Reps. Mike Thompson, D-Calif., and Jim Gerlach, R-Pa., said Tuesday that they will introduce the bipartisan Conservation Easement Incentive Act of 2013. They have attracted co-sponsors for the bill from more than 125 representatives from both sides of the aisle who support the concept of conservation easements.
Conservation easements are permanent legal agreements entered into by a landowner and state or local government, or a nonprofit land trust, according to the New York State Department of Environmental Conservation. Easement documents identify the open space values being protected, and describe the restrictions being placed on a property. An appraiser first needs to determine the value of the property rights given up by a landowner. The easement is then purchased, or it can be donated, resulting in a variety of tax benefits. When the government accepts and holds a conservation easement, it takes on the responsibility to monitor and enforce the terms of the easement in perpetuity, so the easement is recorded with the deed and is binding on future landowners.
“Conservation easements work,” Thompson said in a statement. “They’ve already encouraged landowners to conserve millions of acres of farm lands and scenic open spaces, but there’s more we can do. By making this important conservation tool permanent, our bill will give landowners the certainty they need to preserve and protect even more land and natural resources for future generations.”
Under Thompson and Gerlach’s bill, landowners who donate their property’s development rights would maintain ownership and management of the land, but forgo their rights to develop the land in the future. The Conservation Easement Incentive Act would make permanent an enhanced tax incentive for donating development rights that will otherwise expire at the end of 2013.
The incentive’s current uncertainty discourages conservation because it takes an average of three years to set up a conservation easement, the lawmakers contend. Landowners who want to donate their development rights for conservation may not know if incentive’s tax benefits will be available to them by the time their conservation easement is established. Eliminating this changing deadline would give more farmers, ranchers, and forest owners the assurance they need to choose land conservation over development, according to the bill’s proponents.
In addition, the Conservation Easement Incentive Act would help moderate-income landowners choose conservation by raising the maximum deduction a donor could take for donating a conservation easement from 30 percent of their adjusted gross income (AGI) in any year to 50 percent. The bill would also allowing qualified farmers and ranchers to deduct up to 100 percent of their AGI; and increase the number of years over which a donor can take this deduction from 5 to 15 years.
"Whether you are a farmer looking to preserve land that's been in your family for generations or a local land trust forging community partnerships to protect natural resources, this legislation gives you greater freedom to make critical choices about future land use," Gerlach said. "Our effort to make the conservation easement tax incentive permanent has generated bipartisan support because it makes sense. I look forward to continue working with Congressman Thompson and my colleagues in the House to provide certainty and ensure that conservation easements remain an option for all property owners in the future."
The Conservation Easement Incentive Act has been endorsed by the Land Trust Alliance, Ducks Unlimited, the National Wildlife Federation, the National Cattleman’s Beef Association, the American Forest Foundation, the Congressional Sportsmen’s Foundation and more than 50 other groups.
The bill will be referred to the House Ways and Means Committee for further consideration, on which both Congressmen Thompson and Gerlach both serve.
