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Landowners Want to See Expired Tax Breaks for Land Conservation Reinstated and Made Permanent

Bill Clark/CQ Roll Call File Photo
Proponents of the tax deduction for landowners who donate property for conservation purposes are looking to Camp, as chairman of the House Ways and Means Committee, to make permanent the expired tax break.

The Obama administration recommended making the conservation easement permanent in its 2015 budget, but called for eliminating the deduction for golf course owners and tightening requirements on the historic preservation claims. The administration estimated that the modified deduction would cost the government $522 million between fiscal years 2015 and 2024. Last year, Montana Democrat Max Baucus, then chairman of the Senate Finance Committee, excluded golf course owners from a stand-alone bill (S 526) to make the conservation easement permanent. The committee’s ranking Republican, Orrin G. Hatch of Utah, co-sponsored the bill.

Baucus had been behind the revision that raised the deduction levels for farm and nonfarm land donors in 2006, and to him having a permanent deduction seemed a logical step.

In the House, Ways and Means members Jim Gerlach, R-Pa. and Mike Thompson, D-Calif., have a measure (HR 2807) similar to the Senate bill that has 186 co-sponsors, including Michigan Democrat John D. Dingell, who wrote the original conservation easement tax deduction nearly 40 years ago.

In April, the Finance Committee, under new chairman Ron Wyden of Oregon, approved a two-year renewal of the conservation easement without the administration’s modifications. It is part of the committee’s tax extender package (S 2260). The relatively obscure tax provision would be extended through 2015 at a 10-year cost of $268 million to the U.S. Treasury, according to the Joint Committee on Taxation. The first two years account for $87 million of the cost.

Under the current committee version, golf course owners could continue to donate land and claim the deduction.

“I’m thinking logic prevailed,” said Mike Hughes, chief executive officer of the National Golf Course Owners Association.

“Golf has just as much right to be included as any other business,” Hughes said. “It’s an important economic driver for many areas. It accounts for 2 million jobs. They are stable businesses, sustainable businesses. They are good land uses.” The average 18-hole golf course covers about 150 acres.

The Land Trust Alliance, the lead group campaigning to make the tax credit permanent, took no position on the golf course question. Instead, the alliance is touting the tax deduction as an attractive financial planning tool for farmers and ranchers that also delivers environmental benefits.

Russ Shay, public policy director for the Land Trust Alliance, said he remains optimistic about winning permanent status for the deduction. He said the Senate has approved the idea several times. The House has been a question mark.

The higher deduction level, he said, is more important to property owners of modest income. “Sen. Baucus was approached by people from his state who were involved in land conservation and working with the ranching community. What they found was the ranching community there had relatively modest income. The development rights to their land was 10 or 20 times what their annual income was or maybe even more” because of developers interest in building homes for the well-to-do in scenic parts of Montana.

They would take a financial deduction in donating land that might easily be worth $1 million or more, Shay said.

An earlier version of this story misstated how long the permanent tax break allows for deductions.

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