Tax incentives, grants program included in legislation
The conservation community is celebrating a pair of victories! The U.S. Congress, perhaps inspired by eggnog and a good dose of Christmas cheer, took action to strengthen two major land protection tools.
First, it approved legislation that will make permanent additional tax incentives for conservation easement donations. As many of you may know, starting back in 2006, an enhanced income tax deduction allowed family farmers, ranchers, and forest land owners to receive an additional, significant tax benefit for donating a conservation easement on their land. Unfortunately, it expired at the end of 2014 but discussions on restoring the incentive continued on through 2015. Finally, and thanks to the support of Senator Jeanne Shaheen, Senator Kelly Ayotte, Cong. Anne Kuster and Cong. Frank Guinta, both the U.S. Senate and U.S. House of Representatives overwhelmingly passed the America Gives More Act on December 18.
The added benefits consist principally of two items. First, they increase the amount of the deduction that a landowner can claim in any given year, from 30% of Adjusted Gross Income to 50% of AGI. Second, they increase the number of “carryover” years over which the landowner can spread the deduction, from five additional years to 15. In addition, the incentive applies not only when a landowner makes a full gift of an easement, but also a partial donation of an easement such as when the landowner sells the easement for less than its full value.
The America Gives More Act, which actually is a package of tax incentives including the additional conservation easement tax incentive, is designed to encourage charitable giving. Promoting this charitable giving while simultaneously protecting significant natural resources is sound public policy. However, the decision to donate the development rights to land –which for most families is their most valuable asset – can be a difficult one. Most land trusts can recount the years of careful planning that occur after the initial conversation with a landowner before a conservation easement is finally executed. Having access to an enhanced tax incentive will help landowners, especially those of modest means, do the right thing and choose conservation over unnecessary development. When they take this step, not only do the important natural, scenic and historic resources in New Hampshire benefit but the people of our state do as well.
Second, Congress reauthorized the Land and Water Conservation Fund. The LWCF is, of course, the principal conservation instrument at the federal level. After the program’s authorization expired in September, there was deep concern among its supporters that a failure to restore the program this year could end up killing it altogether. Fortunately, LWCF’s friends in Congress, led again by Senator Ayotte, Senator Shaheen and Congresswoman Kuster, were able to craft a short-term solution. While falling short of the permanent reauthorization for which the conservation community has been advocating, Congress did include language in the giant Fiscal Year 2016 omnibus appropriation bill that calls for a three-year reauthorization of the LWCF. The bill would also increase 2016 funding for LWCF by nearly $150 million, to $450 million, the highest level for the program since 2010.
With 2015 coming to a close, we actually have much to celebrate. Let’s aim to build on these successes in 2016 ahead.