Senate Considering Bill Vital to Conservation

March 26, 2015

A vitally important bill that impacts the efficacy of land trusts across the country is currently under consideration by the U.S. Senate. The Conservation Easement Act would restore tax incentives to prior levels and ensure that organizations and governments can continue to protect our vital natural resources on a large scale. Conservations easements – a legal agreement between a landowner and a land trust that permanently limits uses on that land – are an important tool for Openlands and land trusts across the region and country. Easements are most often donated by the landowner, who is then eligible for a variety of tax benefits as an incentive to donate and to partially offset the loss of potential profit from outright sale or development of the land.

Since 2006, those tax benefits were enhanced so that family farmers, ranchers, and other landowners who chose to protect their land in perpetuity could receive significant benefits for doing so. The enhanced tax incentives allowed a landowner to deduct up to 50% of their annual income and allowing farmers who derived the majority of their income from farming to deduct up to 100% of their annual gross income, an increase from the original 30% deduction. Under the enhanced incentive, landowners were able to take this deduction for up to 16 years after the gift, up from 6 previously. Without the enhanced easement incentive, an agricultural landowner earning $50,000 a year who donated a conservation easement worth $1 million could take a total of no more than $90,000 in tax deductions. Under the enhanced incentive, that landowner can take as much as $800,000 in tax deductions – still less than the full value of their donation, but a significant increase.

Unfortunately, the enhanced tax incentive expired at the end of 2014. A recent bill passed the House of Representatives to restore the enhanced incentives and make them permanent. A similar, bipartisan proposal is now working its way through the Senate. Conservation Easement Incentive Act S. 330, introduced by Senators Dean Heller (R-NV) and Debbie Stabenow (D-MI), is currently before the Senate Finance committee. If it is passed, the bill will go to the President for final approval. Please contact your Senators and ask them to co-sponsor the measure and let them know that robust tax incentives for conservation easements are a cost-effective, voluntary, and private-sector solution to protect our natural resources, conserve and enhance our regional food system, and provide a fair tax system for modest-income farmers and ranchers.

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