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June 10, 2014

Conservation Easement Tax Incentive One Step Closer To Becoming Permanent

Photo by Kat Netzler.

On May 29, H.R. 2807, legislation to make the enhanced tax incentive for conservation easement donations permanent, passed out of the House of Representatives Ways and Means committee.

Since 2006, an enhanced income tax deduction has allowed family farmers, ranchers and forestland owners to receive a significant tax benefit for donating a conservation easement on their land.  However, it expired at the end of 2013.

Now Representatives Jim Gerlach (R-PA) and Mike Thompson (D-CA) have introduced H.R. 2807, the Conservation Easement Incentive Act, to make the incentive permanent.

Senators Max Baucus (D-MT) and Orrin Hatch (R-UT) also introduced S. 526, the Rural Heritage Conservation Extension Act, which would extend the income tax deduction through 2015. The Senate Finances Committee voted for S. 526 on April 3.

Conservation easements allow private landowners to permanently retire development rights to protect their property in perpetuity and protect other public benefits like scenic view sheds and soil quality. The enhanced incentive gives landowners additional benefits for putting their land in conservation easement such as raising the maximum deduction a donor can take for donating a conservation easement from 30 percent of their adjusted gross income in any year to 50 percent, allowing qualified farmers and ranchers to deduct up to 100 percent of their AGI, and increasing the number of years over which a donor can take deductions from 6 to 16 years.

“This particular enhanced incentive has made conservation more accessible to more people, especially people of moderate incomes or people who are land rich and cash poor,” said Heather Richards, vice president for conservation and rural programs for the Piedmont Environmental Council based in northern Virginia.

“The 100 percent deduction for qualified farmers and ranchers can be incredibly important in that it helps very average people,” continued Richards. “If you have an easement that’s worth $500,000, you only have a total of six years to use the incentive. You have to have a pretty high income in order to be able to use all of the value of your deduction. The enhanced incentive makes it much more accessible for people to then have 16 years to use the deduction.”

A survey by the Land Trust Alliance showed that this incentive has helped America’s 1,700 land trusts increase the pace of conservation by a third—to over a million acres a year.

“As horse people we can’t do anything we do, including just feed our creatures, without conserved land,” said Richards. “We always talk about places to go ride, but we forget that the very basic inputs of grass, clean water and hay—farms grow the feed that we feed our horses. We depend upon all of that, and that’s one of the really important aspects of land conservation.”

More than 200 members of Congress have co-sponsored these bills in a bi-partisan effort, but it still needs to reach the House floor in order for a vote to take place.

“We need people to call their Representatives and ask the House of Representatives to pass H.R. 2807,” said Richards. “We have a very small window of time in which this Congress may actually act before the end of July recess. We need folks to ask their Representatives to make sure this gets a vote on the floor.”

Call the Capitol switchboard at 202-224-3121 to ask your Congressman to co-sponsor.