Big news from Washington! A new Conservation Easement Incentive Act has been introduced in the House, and things are moving quickly – it will be up for a vote of the full House as early as next Wednesday. If passed, this incentive will help make it possible to continue our work to preserve more of our cherished Eastern Sierra lands. But we need your help to make this happen.
Here is a letter we just received from Russell Shay at the Land Trust Alliance. After reading, if you have the time we hope you’ll consider calling your state’s legislators in Washington and encouraging them to support this Act.
Our new champions in the House, Representatives Mike Kelly (R-PA) and Mike Thompson (D-CA) just introduced the Conservation Easement Incentive Act, H.R. 641. It now goes immediately to a vote in the House Ways and Means Committee! The committee has scheduled a markup of this and other charitable incentives, which include incentives for donations of food to food banks, and provisions for tax-free charitable donations from IRAs tomorrow, February 4.
Then it goes to the House floor for a vote of the full House, as early as Wednesday, February 11th, most likely packaged with the other charitable provisions (similar to the packages voted on the floor in July and December of last year).
This is stunningly fast – which is possible because of all the work we did last year! We need you to call your representative and ask that they vote for the conservation easement incentive, and for the package of charitable incentives in which it will travel. The enhanced incentive is identical to that voted on last December.
- Here is the Dear Colleague Reps. Kelly and Thompson just sent out to their colleagues – asking them to co-sponsor. It’s too late for that now – what we really need is their vote next week!
- See our spreadsheet that shows how every House member voted on December’s charities bill (H.R. 5806), last July’s bill (H.R 4719) and whether they had co-sponsored H.R. 2807.
- If your representative didn’t vote for those bills, or is a freshman, see our new talking points to get your representative informed and on board.
Senators Dean Heller (R-NV) and Debbie Stabenow (D-MI) introduced the same legislation in the Senate, as S. 330. But right now, the upcoming House vote is the priority! Stay tuned for opportunities to have your senators co-sponsor S. 331. The Senate Finance Committee is already discussing possible ways to move this forward, soon.
President Obama’s Budget
The President’s Fiscal Year 2016 Budget was released Monday. The good news is that it endorses making the enhanced tax incentive for conservation easements permanent, and it proposes a small pilot program of tax credits worth up to 50% of the value of conservation easements. This is what we will emphasize, because it helps us make the case for Congress passing the easement incentive legislation.
Less good news is that the budget also includes a wide-ranging set of changes to how those donations would work in the future – including creating a generous tax credit for certain donations. While most of these changes are new, we will look at them carefully and work with the Administration.
- Increasing the standards for being a “qualified conservation organization.”
- Replacing the four “conservation purposes” for deductible easements with one – that the easement is pursuant to a clearly delineated Federal, state or tribal* conservation policy and yields a significant public benefit.
- Making the donee organization must liable for the conservation purpose, public benefits, and fair market value of the easement reported to the IRS.
- Additional reporting to IRS and public disclosure of easement purposes and easement valuations.
- Eliminating deductions for easements on golf courses (this was proposed last year as well).
- Not allowing deductions for historic building easements attributable to development potential above the existing profile of the building (even if that were the most likely development alternative).
The “pilot program” envisions an interagency federal board distributing tax credits to land trusts, with the land trusts assigning them to donors.
None of these items currently have a constituency outside the Treasury Department and the Office of Management and Budget. They are unlikely to be acted on by the current House of Representatives or Senate.
But they are an important reminder that while the Administration likes us, the Treasury Department and the IRS continue to be concerned about potential abuse in conservation donations – both in terms of whether donated conservation easements are the best way to achieve meaningful conservation, and in terms of their valuation.
*Tax wonk note – note that 170(h) includes local government policies. This proposal does not.
Tax wonks! Do not get distracted by this proposal. We will have the opportunity to respond in time. But it is very important that we focus on the tax legislation coming up in the House next week – which can make a positive contribution to our work!