In strong bi-partisan fashion, Congress passed a year-end funding bill that will significantly impact land conservation in Virginia.
The new legislation, which will be signed into law this week, makes permanent the enhanced federal tax incentive for the donation of a conservation easement. The bill also included reauthorization of the Land and Water Conservation Fund (LWCF), which gets revenue from offshore oil drilling and helps pay for local, state and national parks as well as other types of public land. In addition, it includes $73 million for the EPA Chesapeake Bay Program, an amount matching last year’s historic high level of funding.
First enacted as a temporary provision in 2006, the expanded federal incentive for conservation easements is responsible for conserving more than 2 million acres of Americaâ??s natural outdoor heritage, and contributed to the protection in Virginia of more than 668,000 acres.
The incentive grants certain tax benefits to landowners who donate a conservation easement. Such private, voluntary agreements permanently limit uses of the land in order to protect its conservation values. Landowners retain the right to farm, hunt, lease, and sell the conserved land, subject to the terms of the easement. As private land, property under easement remains on county tax rolls, supporting local public services.
â??This is the single greatest legislative action in decades to support land conservation. It states, unequivocally, that we as a nation treasure our lands and must conserve their many benefits for all future generations,â? said Rand Wentworth, President for Land Trust Alliance.
â??When it comes to Virginia, conserved lands are vital for the farming, forestry and tourism sectors that serve as the Commonwealthâ??s economic backbone,â? said Chris Miller, The Piedmont Environmental Council President. â??In our region alone, more than 375,000 acres are permanently conserved. These lands are also key to environmental protection– helping reduce sprawl, cutting down on impervious surfaces, and providing cleaner streams and cleaner drinking water supplies.â?
Once signed into law, the incentive will be applied retroactively to Jan. 1, 2015. An earlier version of the incentive expired Dec. 31, 2014.
â??Congress has been fiddling with this provision for a decade, and making the enhanced incentive permanent has been a priority for us and for land conservation advocates all across the country. It is nice to see it was finally made permanent, so that landowners can plan accordingly,â? said Miller. â??We hope that this will encourage an acceleration in land conservation. Our land base provides a lot of what makes this region special, the farm soils, forests and waterways, as well as beautiful and historic landscapes.â?
Additional Information on the Enhanced Federal Incentive:
When landowners donate a conservation easement to protect their land, their charitable actions provide a variety of public benefits that may be eligible for a charitable gift deduction on their Federal income taxes.
Unfortunately, tax laws have historically limited the extent to which donors can use a tax deduction to no more than 30 percent of their income per year with only a 5-year carryforward. With these limits in place, lower income landowner or family farmers may not have been able to fully take advantage of the tax incentives for preserving their land.
The new legislation passed by Congress permanently expands the ability for landowners to use their charitable gift deduction, allowing them to deduct up to 50 percent of adjusted gross income with a 15-year carryforward. Further, qualified farmers can use the deduction at the rate of 100 percent of their income, meaning that such farmers may be eligible to have no federal income tax due for years after donating a conservation easement.