helping the land rich, cash poor

Baucus Bill Would Boost Conservation Easement Incentives

By Dave Loos, 9-26-07

A bill passed last week by Senator Max Baucus and the Finance Committee he chairs could significantly lower the tax bill for farmers and ranchers with conservation easements.

The Habitat and Land Conservation Act, which passed by a voice vote last Friday in the Senate Finance Committee, includes several tax incentive components that supporters say will enable land-rich but cash-poor residents to place voluntary easements on their property without the financial hits they currently incur.

The legislation still must pass in the full Senate, where floor time has yet to be scheduled.

As development pressures escalate with land prices in the West, and as myriad other forces threaten the viability of farmers and ranchers, the conservation easement has become one of the most effective tools for preserving private, working lands and open space for perpetuity.

Jim Berkey, Stewardship and Land Protection Coordinator for the Missoula-based Five Valleys Land Trust, said this week that if enacted, the bill would enable those in the agricultural industry to better protect endangered and threatened species through the easements, and to do so without paying such high taxes on the property.

The legislation would make permanent many of the provisions in the Pension Protect Act, which Congress passed last year and which is set to expire on the last day of 2007. The most important of these, according to proponents, is that landowners who make more than half their income from farming and ranching will be able to deduct the value of the conservation easement against 100 percent of their gross adjusted income (AGI) over 16 years.

For all other landowners, the percentage of AGI will increase from 30 to 50 percent, also over 16 years.

“This is very good news for all agricultural trusts nationwide,” said Rock Ringling, managing director of the Montana Land Reliance. “It puts Montana farmers and ranchers on equal footing with high net worth individuals.

Supporters of the bill say ranchers and farmers with an income of $50,000 who donate conservation easements with a land value of $1 million will now be able to deduct up to $800,000 over 16 years, nearly ten times as much as would have been allowed under the old system.

“One of the struggles over the years is that there has been nothing to motivate people without high incomes but with high land value to get these conservation easements,” Berkey said. “So this is good news on that front.”

“Partnering with private landowners on wildlife conservation is absolutely critical,” said Defenders of Wildlife president Rodger Schlickeisen in a statement. “This legislation provides key incentives to enlist more landowners in this effort, which benefits people and endangered species alike.

The bill falls under the larger umbrella of the Endangered Species Act, and lawmakers have said they hope the tax incentives will lead to greater habitat protection and restoration. The legislation also extends a provision in the Pension Act to allow taxpayers to fully deduct the costs of environmental cleanups in the year the costs are incurred.

There also is a provision in the proposed law for landowners who cannot afford to take conservation measures themselves, allowing partnerships to fund species conservation activities and receive the tax incentives.

“This legislation rewards their conservation activities, and guarantees that future generations will enjoy America’s great natural bounty just as much as we do today,” Baucus said in a statement. 

[End of article]

I have always wondered just what percentage of the American public actually believes that there are a large number of land owners who (1) make more than half their income from farming and ranching; (2) have that income of $50,000 doing so; and, (3) do so on land valued at *ONLY* $1 million.

"There also is a provision in the proposed law for landowners who cannot afford to take conservation measures themselves, allowing partnerships to fund species conservation activities and receive the tax incentives" ???

I see. Now ain't THAT a nice thing ... for ....... WHO???

It is far past time for the boys & girls in D.C. to get back down on the farm ... or ranch, as the case most often is when the subject of conservation easements arise.

Maybe they can then SHOW us how their antics do anything other than stroke the self-righteousness of urban voters with the hope those voters will then go to the polls in far greater numbers than effected landowners. "Feel good" has reaped many votes in the past and will probably always continue to do so.

" ... lawmakers have said they hope the tax incentives will lead to greater habitat protection and restoration." ???

Yep. Sounds like such-a-deal to me alright. Give tax incentives to those with a Net LOSS Carry Forward. Can't beat a deal like that me-thinks ...

... unless, of course, you want to stack it up against the financial benefits of paving the whole shebang with concrete so those average-age-of-over-60 farmers and ranchers can pay for health care and all those other marvelous "benefits" of the Screw-The-Golden-Years scenario waiting NOW on their front steps.

As Defenders of Wildlife president Rodger Schlickeisen said: “This legislation provides key incentives to enlist more landowners in this effort, which benefits people and endangered species alike."

Too bad those "people" with most of those "benefits" don't ever seem to include those enlisted landowners.

"HELPING THE LAND RICH, CASH POOR" has yet to hit the docket. And there will be whole lot of those over-60 land owners dead and buried under their own soon-to-be-concrete jungles before it ever does as long as the traffic of other-alternatives such as this prevail.

Rose Mary wrote:

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I have always wondered just what percentage of the American public actually believes that there are a large number of land owners who (1) make more than half their income from farming and ranching; (2) have that income of $50,000 doing so; and, (3) do so on land valued at *ONLY* $1 million.

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The benefits aren't just for people with this particular land value or income. The legislation doesn't place limits on the income level or land value of people who can apply.

Mary rose also wrote:

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There also is a provision in the proposed law for landowners who cannot afford to take conservation measures themselves, allowing partnerships to fund species conservation activities and receive the tax incentives???

I see. Now ain't THAT a nice thing ... for ....... WHO???

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Particiaption in the program is entirly optional for landowners. If a landowner opts to particiapte via a partnership, the wildlife benefits from the measures, the partners are reimbursed via tax incentive funds, and the landowner is no worse off, and could even enter into an agreement where they recieved some of the tax benefits, sharing some with the partner groups.

You need to re-read the article, Gary. The numbers I used in the first paragraph of my earlier posting came from the article. Re-reading those comments also might clarify them for you.

Those of us who have much of our life and times invested in our land are not nearly as prone to wish for a way to make all the rest of you "feel good" as I am sure you might like for us to be. I'm sure it never even passed through your mind but we might just happen to want the fruits of our work and sacrifices to make our own families "feel good" first and foremost.

Would you like to disclose just how much of YOUR real property you have given for "the wildlife benefits"? ... or are willing to encumber in any way whatsoever that would depreciate the fair-market-value of it?

If it is the intent to boost conservation easements, as long as conservation easements are tied to tax incentives they will continue to be unattractive to those of us who do not need tax incentives ~ and that sure is true for many who own land and understand how that will NOT pay the bills.

Amen, Rose Mary, right on the button as usual. We are paying a terrible price to make others feel good about what "they" are doing.

Help me out - I own land and work with foresters who want to keep land in forestry and pass it on - I've helped buy conservation easements to enable continued forestry instead of selling to developers/investors - I thought I'd do a conservation easement to preserve the land and decrease my taxes ...

Is the article accurate about the restrictions - especially the $1M minimum? Still, as America is seemingly headed for continuing inflation in land values, I think that there will be more folks who qualify... or will this amount increase with inflation? I thought this $1M number was a small fraction of the "estate tax giveaway" to folks passing on more than $5M (so their kids can sell the land and consume their capital).

Cities are rapidly sprawling and the rich are buying their pieces of paradise in the midst of working forests, ranches and farms (and having us pay to put in roads and fight the fires - while complaining about their working neighbors and stopping them).

What should be done to protect producers, consumers and recreational users since we can't eat concrete and wildlife is incompatible with people?

I thought the Baucus bill was a good start, especially the 16 year period for deducting.