Friday, September 19, 2008

I have been trying to ascertain for months whether the conservation easement deductions provided in the 2008 Farmbill apply to forest landowners.  According to an email received this week, thankfully from Chris Adamo on Senator Stabenow's staff, forest lands are applicable for the full deductions.  This represents a significant opportunity.  Take note.

IRC section 170(b(1)(E)(v) defines “qualified farmer or rancher” as “a taxpayer whose gross income from the trade or business of farming (within the meaning of section 2032A(e)(5)) is greater than 50 percent of the taxpayer's gross income for the taxable year.”

 

IRC section 2032A(e)(5) states:

 

(5) Farming purposes. The term "farming purposes" means--

      (A) cultivating the soil or raising or harvesting any agricultural or horticultural commodity (including the raising, shearing, feeding, caring for, training, and management of animals) on a farm;

      (B) handling, drying, packing, grading, or storing on a farm any agricultural or horticultural commodity in its unmanufactured state, but only if the owner, tenant, or operator of the farm regularly produces more than one-half of the commodity so treated; and

      (C) (i) the planting, cultivating, caring for, or cutting of trees, or

         (ii) the preparation (other than milling) of trees for market.

Friday, June 20, 2008

A review of the current ranch-land conservation-scape


For the past ten years, I have been trying to convince environmental funders, federal and state officials and conservation leaders of the importance of focusing their energies and wallets on private lands as the largest and most strategic market niche for conservation investments in the Twenty-First century. The Resources First Foundation (RFF) has built a succession of internet websites targeting the market of private landowners including: the Private Landowner Network (PLN www.privatelandownernetwork.org), the Conservation Tax Center (CTC www.conservationtaxcenter.org), and the Maine State Conservation Center (www.stateconservation.org/maine). Our sites have received over 20 million hits in the last several years and are currently averaging over 100,000 visitors per month, so obviously our focus is attracting a significant response from viewers interested in this arena.

Sometimes as I try to articulate our vision and my personal frustration , particularly with most environmental funders who continue investments in the public lands and Twentieth century infrastructure sector in the West, I stumble upon new sources of information that serve to validate our prospectus for private land investment. Last week we found a small treasure trove of well reasoned arguments in a paper that not only substantiates our basic vision and perspective, but catalogues a number of compelling factual arguments in our favor. The article was published in the Journal of Rangeland Ecology and Management 61(2) March 2008 by two academics, Mark Brunson of Utah State University and Lynn Huntsinger of University California-Berkeley. Their synthesis paper is entitled: Ranching as a Conservation Strategy: Can Old Ranchers Save the New West? This paper is well researched and contains relevant empirical data to substantiate the points of view presented.

Today private lands in the west and particularly ranch lands are disproportionately important given the current demographics of landowners, the global climate and fire conditions impacting western landscapes, and the predominant position of private lands in riparian areas and in control of western water rights. Private lands in the west are like blood veins in the corporeal landscape of the West. They also retain the highest biodiversity index because of their low elevation and water access, and they provide critical buffers around and adjacent to federal public lands. I have quoted the salient points contained in Brunson and Huntsinger’s paper extensively to highlight these points and have added my own comments for emphasis and perspective. Much of what Brunson and Huntsinger have written about is contained in RFF literature and proposals, but their extensive documentation, which we have included, and conclusions serve as a veritable trampoline for our cause and recommended conservation investment strategy. With the caveat that what follows is obviously self serving to RFF’s perspective, I think it is important to review this paper and emphasize the research and its conclusions, because they provide the “particular connection” that is either overlooked or not understood by most conservation funders allocating investments to the West, particularly those investing in public landscape protection. We are convinced that from the standpoint of strategic investments for conservation in the West, a targeted focus on private land offers a compelling return on investment.

The authors point out in the paper’s introduction “The western United States … is undergoing rapid population growth fueled largely by in-migration from other regions…Saving ranches has become a focus of not only rural traditionalists and livestock producers, but also of conservationists, who prefer ranching as a land use over exurban subdivisions, and who see private lands conservation as a needed alternative to underfunded and controversial public acquisition.” The authors go to explain the vision of their paper addressing the ranchers/ranch’s role in western land conservation. “Conservation through private ownership is a complex process. To succeed practitioners must understand the synergies of people, environment, and institutions that are needed to accomplish conservation, recognizing that some forces such as global climate and economic change occur at scales…”

These are critical points and RFF’s websites, particularly PLN, CTC, and Save a Ranch are designed to addresses the full spectrum of complex needs of private land owners in the west, and they provide the opportunity to operate at full scale, locally, regionally, nationally, and on a global basis of readily accessible information and connectivity.

ON RANCH CONVERSION:
The driving force of development in the west stems from where people live in the region. As the authors put forward “The west is the most urban US region, with more than three-fourths of Westerners living in metropolitan areas”. They cite research reporting that the rural west is at a great risk of land use conversion. “The extent of population-driven land-use change is greater in the rural West than in urban areas because of the dispersed nature of exurban development” (Theobald 2000). They cite examples of actual acres converted. “In Colorado an average 110,000 ha (271,815 acres) of agricultural land was converted to commercial and residential development every year between 1992 and 1997(Maestras et al. 2001.)” Cromartie and Wardwell found that “between 1990-1997, Nonmetropolitan population growth in western states was three times that of the rest of the country”. During the 1990s the amount of land in mid-size Texas farms and ranches (500 to 2,000 acres) declined at a rate of about 250,000 acres per year (Wilkins et al. 2003). Other research in the Yellowstone region from 1990-2001 found that nearly one quarter of the large agricultural lands (ranches of 400 acres or more) changed hands and “only a quarter of these ranches were sold to “traditional” full-time ranchers. Nearly half (46%) went to amenity buyers or part-time ranchers.”

Sales in some areas are making it hard for prospective new ranchers to get into the game. Some ranches are selling for large sums; “In January 2007 the largest noncommercial real estate transaction in California history took place when a Los Angeles investment group purchased the 10,000 ha(24,710 ac) Cojo and Jalama ranches for $155 million, about $15,000/ha ($6,300/ac)” (Casselman 2007). “This price is well within the range for ranchland in that area”, reported Michael Fritz, editor of the Farmland Investor Letter, a monthly trade publication. Also reported; “a smaller ranch next door, suitable for vineyard production, sold for $19,000/ac in 2005”.

The authors concur that land prices such as these “restrict the entry of new ranchers into the business, and estate taxes squeeze heirs even if they want to continue ranching.” The record and empirical data are clear that private lands are the most subject to development, again because of their lower elevation, access to water and level valley floor landscaping. For all the same reasons these lands are the premier fish and wildlife habitat in the west and provide the connecting corridors to, from, and between publically protected lands.

RATIONAL TO PROTECT RANCHES AND PERPETUATE PRIVATE LANDS IN THE WEST:
HABITAT:
As previously stated private lands of the west are the habitat hot beds, along the valley floors and streambeds. I learned this lesson in 1987 when we gave the first NFWF grant to develop GIS-GAP analysis to Michael Scott in Idaho where 68% of the state is in public ownership, yet all this public land is over 6,000 feet, devoid of much of Idaho’s biodiversity habitat. All the state’s biodiversity resides in riparian areas, like Snake River valley, which is largely controlled by private landowners. The authors found research that reported “habitat for 95% of all federally threatened and endangered flora and fauna is on private land in the U.S. and 262 of those species (19%) survive only on private parcels” (Wilcove et al. 1996).

FIRE PROTECTION:
The authors cite their own work to make the case for ranching as a way to manage fuel loads, “In addition to the ranch itself acting as a refuge from development, grazing is a useful tool for managing vegetation and habitat… California land management agencies with Mediterranean grasslands and woodlands are using livestock grazing as the least costly, lowest risk,… and most environmentally benign option for reducing buildup of high fuel loads generated by nonnative grasses and for suppressing shrub invasion” (Huntsinger et al.2007a).

OPEN SPACE PROTECTION:
“A third, closely related value associated with ranches is open-space protection. Seeing the “countryside” within aesthetically pleasing viewsheds is important to many living in urban and exurban areas.” Importantly and rarely factored into conservation agendas, ranches provide this open space asset at no cost to the community it benefits. They buffer public lands from development and high intensity land uses that would clash more severely with wildlife, scenery, recreation, and management practices such as controlled burning. As the authors found in research; “unfortunately, ranches adjacent to public lands are especially attractive for development” (Riebsame et al. 1996). This issue lies at the root of the public / private lands conservation question, and represents the Achilles heel of public land investment strategies. Take for example West Yellowstone, Cody, and Teton Valley in the Yellowstone ecosystem. Today our National Parks are development magnets that attract and are surrounded by Michelin rings of development sealing off the protected land and end up choking both the aesthetics and the biodiversity of the parks themselves. The NPS has never integrated their core areas with a strategy to protect private peripheral lands in a strategy based on open space protection and sustainability. This is NPS’ greatest failure in the Twentieth century.

Ironically, in recent years (2005 to present) The Army and Department of Defense have developed and funded a comprehensive program to protect natural resources and landscapes surrounding the principal bases and infrastructure sites across the country. The Army’s program is called Army Compatible Use Buffers (ACUB) and funds are allocated for protection of adjacent farm and forest lands through conservation easements with conservation partner entities public and private. This program demonstrates considerable foresight and initiative as well as financial acumen on the part of the Department of Defense. The Department of Interior should be so bold.

FARM SUSTAINABILITY AND PROMOTING ORGANIC AGRICULTURE PRODUCTS:
The authors research documents that “ranchers and farmers with conservation easements were more likely to diversify their operations to take advantage of emerging markets” (Gale 2003b). Community supported agriculture is starting to take a hold, “A significant source of support for the farmers that participate in the Marin Agricultural Land Trust (MALT) north of San Francisco is value-added markets for local, natural, and organic meat and milk” (MALT 2007). This is one of the reasons RFF added Community Supported Agriculture resources to the Maine State Conservation Center. The Maine State Conservation Center www.stateconservation.org/maine is our first state site and can be viewed as a prototype for future western state sites.

RANCHER DEMOGRAPHICS:
The authors research revealed facts about the threats ranches face; “As many as 45% of US ranches are being sold each decade … ranchers are an aging population who are land rich and cash poor, and that the purchase or maintenance of a ranch as an economic enterprise is becoming less and less possible.” As is highlighted in all of RFF’s literature, the demographics of ranchers tracks the aging population of private landowners nationwide. Huntsinger et al. (2007b) found that the average age of California ranchers is 59. Peterson and Coppock (2001) reported that 37% of respondents in a survey of Utah livestock producers were aged 66 or older, and that 28% of federal grazing permittees and 51% of ranchers operating solely on private land reported they planned to retire in 5 years. The average age of all U.S. principal farm operators has been more than 50 years of age since at least the 1974 Census of Agriculture and has increased in each census since 1978. In addition, the percentage of principal farm operators 65 or older has risen consistently since 1978 (when it was about 1 in 6) and reached 26.2 percent (more than 1 in 4) in 2002 (2002 Census of Agriculture).

And there is a domino effect: “As development proceeds in an area, it also has consequences for the remaining ranches. One California study found that ranchers working in a matrix of subdivided lands and leased pastures were less likely to control yellow starthistle because they assumed weeds on adjacent lands would remain uncontrolled”. Another California study found those ranchers in urbanizing areas were more willing to accept that their ranches would eventually become developed than ranchers in rural areas, recognizing that the pressures and temptations that come with urbanization become irresistible beyond a certain point (Liffman et al. 2000). Fortunately there is an opposite domino effect through critical mass where ranchers team up to protect large contiguous geographic areas. (see the Critical Mass section below).

THE “TRUST FACTOR”:
It is perhaps the most important and understated driving force in private land conservation, particularly in the West, heir to the Sagebrush rebellion, Wise Use Movement etc. The trust factor is why most land trusts (with the particular exception of the agricultural and cattleman’s land trusts) and environmental organizations are viewed with suspicion and as inappropriate messengers by the private land owning communities throughout the West.

The authors present a survey that found a majority of ranchers in two areas of California undergoing rapid exurban development, and reported that “society’s hostility to ranching” was a reason to quit the business (Liffman et al.2000). Public agencies are battling with the trust issue too; “Building trust between ranchers and public agencies, and having a positive outlook about the future of ranching, have been suggested as crucial to reducing tensions between permittees and public agencies” (van Kooten et al. 2006). Some assistance and incentive programs are slow in their adoption by the ranching community because of lack of trust; “A Texas study found landowners to be wary even of market-based conservation incentives if they are novel and there is LESS THAN FULL TRUST of the entity offering the incentive” (Wilmot and Brunson 2005).

However, there is a growing appreciation by society of the values ranchers bring: a 2006 survey of Colorado residents found that three-fourths felt agriculture was very important to the quality of life in the state, and even more (83%) said it is very important to maintain land and water in agricultural production. “More than half (57%) agreed that agriculture in Colorado protects the environment, 72% believe farm and ranch animals are treated humanely, and 78% agreed that ranchers with permits to graze on public lands treat the land appropriately. Open space and wildlife habitat protection were found to be as important as food and fiber production as reasons for protecting agricultural land”. (Hull et al. 2006).

The Trust factor is why all RFF websites are neutral in political orientation, and why there is no environmental proselytizing or advocacy. Our sites are built as business to business information centers and networks, or in our internal vernacular, C to C as in Connecting people to Conservation. We designed our sites in a fashion that builds a business and market connection between land owners and the conservation based professional, financial, and legal service providers in their communities.

ECONOMIC CHALLENGES:
When it comes down to money development always wins, but for ranching folks there is more to it than just money. In a study by Torell and Bailey in 2000 the authors found “it has long been a fact that the value of ranch land for development far outstrips the value of land for production. Consumptive and quality-of-life values have been the most important reasons for the purchase and maintenance of ranches for decades”. There are other markets entering into the mix as the authors have come up with some ideas: “The possibility of marketing ‘ecosystem services’ has gained attention as ranchers view activities such as carbon sequestration and wildlife habitat as potential ways to increase income.” Also; “A promising program was initiated in March 2007 by the Chicago Climate Exchange which offers to pay ranchers who store carbon through rangeland rehabilitation or sound range management”.

The most popular tool by far is the conservation easement, and it is in use throughout the ranching community; “Voluntary easements that preclude development in perpetuity are acceptable to many ranchers, especially when the easement programs are managed by ranchers’ organizations” (Pritchett et al.2007). This is the reason behind the construction of our SAVE A RANCH site. The goal of the site is to protect working ranches in select geographic areas by raising money to fund easements on working ranches such as the O’Toole’s Ladder Ranch in Wyoming. There are federal and state programs that kick in funding for ranchers who want to use easements to restrict development and promote habitat preservation; “At the state level California and Texas both offer landowner incentive programs that provide payments to landowners implementing habitat management plans that benefit special status species”. There are numerous state and federal programs already listed in RFF’s PLN database, as is every state wildlife action plan and information about the tax deductions available to landowners for conservation in all participating states.

TAXES:
Taxes are all important to protecting private land. “If ranchers are aging and headed for retirement, the issue of how large properties can be transmitted across generations intact is critical. Johnson (1998) found that INHERITANCE TAXES were considered a PRIMARY BARRIER to ranch transmission in California. The Pinchot Institute and many others have found taxes to be the primary barrier to protecting forestlands across the country as well. The tax provisions enacted in the 2006 Pension act and continued in the 2008 Farm Bill were solely responsible for a ‘gold rush’ on easements in 2007. Conservation organizations were backlogged with easement projects created by interested landowners motivated by these tax provisions. A Texas Attorney reported “Our firm is doing at least three times as many easements this year as in past years. I'm sure that the expanded tax incentives are the main difference.” A report out of a Wyoming land trust; “We have seen close to a tripling of conservation easement numbers completed when compared to previous years. [A] good proportion of this increase has been related to the increase in tax incentives for landowners.”

VALUE JUDGMENTS:
“One reason why conservation easements have proven so appealing to conservation groups and the public is that they provide some guarantee of a long-term return.”

“Many residents of the western United States, including ranchers, tend to be suspicious of government land acquisitions in a region where more than half of the land in many states is managed by federal and state agencies.”

CRITICAL MASS:
The importance of a critical mass of neighbors gets you to scale. “It may take a community of ranches working together and with public agencies… to maintain ecosystem processes and to conserve habitat and water at an ecologically effective scale. Socially, a “critical mass” of ranches is needed to support the infrastructure, markets, and human relationships that keep a ranch culture and industry alive.” This is what PLN and RFF’s websites offer: an internet network that provides geographic infrastructure, markets and access to all local service providers and market entries, and a web of human relationships to enable ranchers to perpetuate their lifestyle and businesses, keep their land in the family, and afford to pass it on to future generations. As the Malpai experience proves, there is strength in numbers. The Malpai Borderlands Group is organized and led by ranchers who live and work primarily in Southeast Arizona and Southwest New Mexico. It is a collaborative effort that is built around goals shared by neighbors within their community. It was because of this coherent sense of community, that I funded the Malpai Group for six successive years from the National Fish and Wildlife Foundation and later walked them into the Packard Foundation which also funded them generously. This group originated as a series of informal discussions among ranching neighbors who recognized that a way of life, and a wild landscape that they all loved, was being threatened by spread of development and subdivision from nearby towns. The Malpai Borderlands Group was formally organized as a non-profit organization in 1994. They have protected 75,000 acres of private land through conservation easements, which is protected as natural wildlife habitat and productive ranch land while preventing development. These ranchers, using conservation easements teamed up with neighboring ranches to protect a greater geographic area totaling over one million acres. As Bill McDonald’s daughter wrote: “I believe that the success of Malpai and the proliferation of similar collaborative efforts will provide inspiration for young people across the country to maintain these traditional livelihoods”.

Brunson and Huntsinger end their paper with the following paragraph: “Communities of sustainability, new kinds of owners, a rising group of natural resource-oriented ranch managers, and complex mosaics of ownership and obligation: this will indeed be a “new West”, but it seems likely that it cannot be saved by “old ranchers” alone. “New ranchers” must find agencies, neighbors, and publics that share their vision”. THIS IS Exactly WHAT RFF offers- an internet highway to all the above through:

www.privatelandownernetwork.org

www.conservationtaxcenter.org

www.savearanch.org



REFERENCES
BRUNSON, M. AND HUNTSINGER, L. 2008. Ranching as a Conservation Strategy: Can Old Ranchers Save the New West?
Journal of Rangeland Ecology and Management 61(2).

CASSELMAN, B. 2007. Nine beachfront miles of Pacific coastline. Wall Street Journal 12 January 2007. Available at: http://www.realestatejournal.com/columnists/private/20070115-private.html. Accessed 5 October, 2007.

CROMARTIE, J. B., AND J. M. WARDWELL. 1999. Migrants settling far and wide in the rural West. Rural Development Perspectives 14:2–8.

GALE, I. 2003b. West Marin ranchers increasingly diversity. Point Reyes Light 10 April 2003. Available at: http://www.ptreyeslight.com/stories/apr10_03/ag_survey.html. Accessed 5 October 2007

HULL, T., A. BRIGHT, AND G. WALLACE. 2006. Public attitudes about agriculture in Colorado. Denver, CO, USA: Colorado Department of Agriculture. Available at: http://www.ag.state.co.us/mkt/AgInsights/Attitudes%20Toward%20Colorado%20Agriculture%202006%20Final%20Report.pdf. Accessed 5 October 2007.

HUNTSINGER, L., J. W. BARTOLOME, AND C. D’ANTONIO. 2007a. Grazing management on California’s Mediterranean grasslands. In: M. R. Stromberg, J. D. Corbin, and C. D’Antonio [EDS.]. California grasslands: ecology and management. Berkeley, CA, USA: University of California Press. p. 233–253.

LIFFMANN, R. H., L. HUNTSINGER, AND L. C. FORERO. 2000. To ranch or not to ranch: home on the urban range? Journal of Range Management 53:362–370.

MAESTAS, J. D., R. L. KNIGHT, AND W. C. GILGERT. 2001. Biodiversity and land-use
change in the American Mountain West. Geographical Review 91:509–524.

PRITCHETT, L., R. L. KNIGHT, and J. LEE [EDS.]. 2007. Home land: ranching and a West that works. Boulder: CO, USA: Johnson Books. 217p.

THEOBALD, D. M. 2000. Fragmentation by inholdings and exurban development. In: R. L. Knight, E. H. Smith, S. W. Buskirk, W. H. Romme, and W. L. Baker [EDS.]. Forest fragmentation in the southern Rocky Mountains. Boulder, CO, USA:
University Press of Colorado. p. 155–174.

WILCOVE, D., M. BEAN, R. BONNIE, AND M. MCMILLAN. 1996. Rebuilding the ark: toward a more effective endangered species act for private land. Available at: http://www.environmentaldefense.org/documents/483_Rebuilding%20the%20Ark.htm. Accessed 5 October 2007.

WILKINS, N., HAYS, A., KUBENKA, D., STEINBACH, D. 2003. Texas Rural Lands; Trends and Conservation Implications for the 21st Century. Available at: http://landinfo.tamu.edu/projects/aft/rldocl.pdf Accessed 19 June 2008.

WILMOT, S., AND M. W. BRUNSON. 2005. Conservation attitudes of rural landowners near Fort Hood, Texas: final report to The Nature Conservancy, February. Logan, UT, USA: Utah State University. 56 p.

Tuesday, May 27, 2008

When Congress comes back into session following the Memorial Day Recess, we should finally see passage of the 2008 Farmbill which contains a two year extension of the deductions for landowners on federal income tax. The Farmbill is the proverbial  overstuffed sausage, and we had hoped the Congress would make permanent the Pension Act (August 2006), deductions for conservation easements that expired after 2007 on 1 January, 2008. Unfortunately Congress addded so many costly provisions to the bill that the conservation easement deductions wrere only extended for two years, but the new provision applies retroactively back to 1 January 2008 and runs throuhgh 31 December 2009.

The Conservartion Tax Incentive for Family Farms and Ranches provides for:

* Raising the deduction a donor can take for donating a voluntary conservation easement fom 30% of their adjusted gross income in any year to 50%;

* Allow farmers and ranchers to deduct up to 100% of their adjusted gross income for donations of conservation easements;

* Increase the number of years over which a donor can take deductions from 5 to 15 years.

 If you take advantage of this new provision, PLEASE, PLEASE tell us so we can begin building a case for making these deductions permanent nationwide before they expire again in the end of 2009.

Wednesday, January 23, 2008

I just read that the USDA's nationwide Conservation Reserve Enhancement Program (CREP) topped the 1 million acre mark last week with the addition of a 60 acre tract in Minnesota.   That is a great milestone.

Farmers who participate in the CREP program agree to retire crop and pastureland determined to be highly subject to erosion or otherwise environmentally sensitive. During a 10- to 15-year contract period, the participant landowners convert the retired land to grass, trees, wetlands, wildlife cover and other conservation uses. The plantings help prevent soil and fertilizer from running into streams and rivers where they can harm water quality. Wildlife habitat and soil quality also benefit from the plantings. The farmers receive incentive payments from the USDA during the terms of their CREP participation.

Here is the quote from the Secretary of Agriculture:

"Enrolling the one millionth acre is an important milestone in the history of USDA's Conservation Reserve Enhancement Program," said acting Secretary of Agriculture Chuck Conner in a press release. "By collaborating with agricultural producers, state agencies and many other partners through this highly effective program, USDA is improving water quality, wildlife habitat, soil productivity and air quality throughout the country today and for the next generation."

The CREP program began in 1997, with the enrollment of the first acre of land in Maryland. Plantings and improvements made on the 60 acres just enrolled in Minnesota will help protect water quality in the Missouri River watershed and restore wildlife habitat.

Then on the other side of the coin the Conservation Reserve Program is shrinking!  Officials at USDA NRCS and the states the program is active in, are concerned that higher crop prices and rental rates are driving land, and as a result habitat, out of the program and into production.  In South Dakota 17 percent of their CRP acres were not renewed this year -- that's nearly 300,000 acres.  U.S. Sen. John Thune, R-S.D., reports that losing CRP acres will have impacts in many places such as the tourism and hunting areas.  He says conservation reserve acres are the reason South Dakota has a successful pheasant hunting industry. And it's a big one with a $150 million economic impact. Losing wildlife habitat is a big concern for the South Dakota Department of Game, Fish & Parks. Bill Smith, a senior wildlife biologist, says this year had the largest pheasant population in 40 years. He says 2008 will be a different story.

CRP land produces cleaner air, cleaner water, wildlife, and beauty. As a conservation program, it's not perfect, but what it produces for society is just as valuable as corn and beans.

As I continue to say conservation on private lands is the future of conservation and habitat protection in this country.  We need to continue to support and foster the best stewards of this nation's land - private landowners!

 

Monday, January 07, 2008

See the two recent article links below from the Boston Globe and the Denver Post

First ,the Boston Globe reports that more than 11,000 acres were protected in Massachusetts in 2007 through conserrvation  easements , the most land protected in one year since the state inaugurated the easement program in 1967. More land was protected through conservation easements last year than the three previous years combined. The reason???

" Environmental leaders said the driving factor was a tax break Congress and President Bush approved in August 2006"

Second, The Denver Post reports that farmers and ranchers are going out of their way to protects dwinding species and wildlife habitat. "..Private landowners are scrambling to keep imperiled plants and animals off the endangered species list by protecting habitat voluntarily." In Colorado's San Luis Valley " people here felt like they could do a much better job taking care and preservinfgthe habitat.... such collaborative efforts are becomiong coomonplace as landowners develop innovative ways to deal with species protection."

Check out the articles:

Boston Globe

Denver Post

 

Friday, November 16, 2007

Now that the 2006 Pension Bill provisions are due to expire in just over a month it is becoming more and more imperative to persuade the senate and house to make these provisions permanent.    In our work with members of the senate finance committee we have been asked to provide them with
information and evidence about whether these provisions have influenced a greater number of landowners to take advantage of the tax incentives by donating easements during the term of the new provisions. 

We here at the Private Landowner Network sent a query out to the land conservation community asking them to provide commentary on the effectiveness of these provisions translating into acres conserved.  The responses have been eye opening and quite convincing.  The tax provisions (click here for a description) are motivating landowners, even pulling some out of the shadows, to donate conservation easements on their land.  Take a look through the responses we have received:

“[We] have taken many new projects in due to the tax incentives. Unfortunately, due to our backlog, and inability to hire new staff until next year, the folks who contacted us about work to get the tax incentive will not be able to take advantage of it unless it is extended.“
New Hampshire land trust
 
“Our firm is doing at least three times as many easements this year as in past years. I'm sure that the expanded tax incentives are the main difference.”
Texas Attorney
 
“We are on track to do about double the CE's our organization has EVER done in the past. Most are on water or prime undeveloped wildlife land. The tax provisions are the critical component as we talk to donors. I hear things like this every day, … we want to make sure we can take advantage of the tax benefits so we want to do a CE now." 
Michigan land trust
 
“The combination of this year's incentives for farmers and the money that the state of South Carolina provides for land protection is making it possible …”
South Carolina land trust
 
“… other owners of very desirable properties [from a conservation as well as a development point view] who will be less likely to do a deal with us if the more favorable tax provisions expire.”
Connecticut land trust
 
“I am doing over 4 times the Conservation Easements that I would normally do in a year.”
New York Attorney
 
“We have over three times the historical project load right now.“
Connecticut land trust
 
“We don’t have the staff to process all of the work we have. This piece of legislation may be the single biggest protector of private property from future subdivision ever.”
Michigan land trust
 
“[T]he landowners are [telling us they are] acting now in case the 2006 Pension Bill is not extended. We will likely have five times as many donated CE's this year and six times as many acres then the previous year.”
Ohio land trust
 
“We have already set a record in 2007. A number of landowners have specifically said they expanded the size of what they considered donating because this benefit helped them get past the very large value they were giving up”
Michigan land trust
 
“Last year we more than doubled the number of easements we closed and this year we doubled that again. Based on averages, we have seen a 375% increase in easements closed since the tax incentives went into effect. “
Wisconsin land trust
“[I]n 2007 we will have increased our protection almost seven-fold. These easements are specifically as a result of the 2006 Bill provisions.”
Hawaii land trust
 
“I can attest to the fact of increased demand, larger parcels, and interest from a broader array of landowners … of these being specifically motivated by the new tax incentives. “
Texas land trust
 
“[W]e haven’t had enough time to explain to less-wealthy landowners, particularly the timberland landowners in our northern counties, that they can truly now benefit from these incentives – where before, it probably was better financially for them to sell out to developers. We desperately need these tax incentives extended so that these folks can have the time to understand that they can also benefit.”
Texas land trust
 
“[W]e will have doubled fifteen years worth of acreage in one year.”
South Carolina land trust
 
“[P]rivate landowners involved were clearly motivated by the incentives. One of them had not intended to donate his easement until 2015. That particular easement will ensure the 100% protection of a native trout stream watershed in the Tennessee mountains. Making these incentives permanent is critically important.”
Tennessee land trust
 
“266 Acres have or will be completed as a result of these incentives.”
New Jersey land trust
 
“[We have] seen a marked increase in CE projects in the last 15months, and most of the increase is attributable directly to the 2006 Pension Protection Act provisions. Most of those would not be in process were it not for the PPA. In two specific instances, the landowners had been planning to donate the CE through bequests, but decided to make the donation inter vivos instead because of the PPA provisions.”
Massachusetts land trust
 
“This is close to a tripling conservation numbers completed when compared to previous years. [A] good proportion of this increase has been related to the increase in tax incentives landowners.”
Wyoming land trust
 
“Since the passage of this expanded tax incentive in August of 2006, our land trust has seen a dramatic increase in the interest of conserving valuable resources. Conservation easement inquiries went from 100/yr to well over 200/yr., and actual easements to be completed have gone from 4 in the first 8 months of 2006, to 50 to be completed (if at all possible) by the end of 2007.    The net result will be a doubling of protected lands in SW Ohio in one year! “
Ohio land trust
 
“[A landowner said he] may not donate the easement unless there is the full tax benefit that exists in the current law. This makes it all the more critical that the conservation easement tax incentives become permanent or at least be extended for another couple years.”
Wisconsin land trust
 
“We expect to finish four times as many as we did last year! Many of the new easements completed this year have had the added impetus of the tax benefits figure strongly in the donors' decisions to 'go for it' now. As far as we can judge, no one has declined the opportunity to complete an easement with us because of the added tax benefits from the Pension Bill.”
Tennessee land trust
 
“Last year the Maryland Environmental Trust accepted 34 easements on 3,185 acres. This year, if all projects are completed by year’s end, we’ll have 77 easements on 7,920 acres in MD. There are a few purchased ones (both years) but the great majority are donated. We believe that the increase is largely attributable to the new federal benefits. “
Maryland land trust
 
“[W]e have had so much interest that we have had to turn some landowners away who wanted to make the donation by 12/31/07 because we don't have the capacity to handle the demand in such a short period of time. In other words, we will likely protect six times as many acres this year through donated easements as we did in three years prior to enactment of the Pension Bill provisions.”
Ohio land trust
 
“[We were] able to close three times our usual amount.    The incentives made local headlines here, energized our land trust, and generated an extraordinary level of interest and excitement in conservation. We urge Congress to extend these provisions. They have generated more interest in land conservation than any single initiative in memory.”
Massachusetts land trust
 
“Since the provisions went into effect we have almost doubled our protection in eastern Washington and northern Idaho. For sure the easements are a result of the tax provisions. The tax incentives caused increased interest in conservation easements and gave us an entrée into the estate planner and financial advisor circles so we now have more lined up for 2008. We’ve never been so busy.”
Washington land trust
 
“This year alone we are looking to increase our protected acreage by a full 33%, and all of these are donated easements from landowners interested in taking advantage of the new incentives. Some of these properties are quite large, and the landowners otherwise would not have had the opportunity to maximize the value of their donation, had it not been for the 2006 Pension Bill provisions.”
Georgia land trust
 
“It would be wonderful if the provisions were made permanent since we have other landowners who are interested in donating in 2008. We have experienced a higher level of interest in easement donations this year due to the incentives. Our county is under extreme development pressure, so making the incentives permanent will continue to be a great help in preserving important parcels of land.”
Pennsylvania land trust
 
“[We have had] a significant increase from 12 to 42 easements in our county this year, and clearly driven by the enhanced tax benefits available this year. Let's hope it will be extended or even better, made permanent. A lot of good private land conservation is happening as a result.”
Massachusetts land trust
 
“[We] have seen a decided increase in easement projects. So far, we have concluded 9 easements involving 371 acres. We are currently working on 21 more easements involving 840 acres that are scheduled for year-end completion.”
Pennsylvania land trust
 
Check out these articles in the news:
 
If you want to comment on this topic click the feedback link below or jump onto the PLN Bulletin Board and post your comment
 

Friday, November 02, 2007

RFF just posted its first state conservation website (www.stateconservation.org/Maine).  We used Maine as our guinea pig, not only because we live and work here, but because Maine is 97% privately owned.  I’ve been using Maine as a mixing bowl for innovative grants and approaches to conservation programs and products for the private land market for over a decade.

 

Our new Maine site incorporates all the resources available through the Private Landowner Network, and we have added several suites of new resources.  The site includes listings for all the organic and natural market farms throughout Maine as well as listings for energy-saving and bio-fuel sources.  Both of these will be updated and expanded in the coming year.

 

We have also included the Maine’s Comprehensive Wildlife Conservation Strategy, and incorporated mapping technology.  Thematic layers include species habitat (bald eagles, piping plovers, Atlantic salmon, anadromous and catadromous fish runs and passages), wetlands, watersheds, and conservation lands.  We have also provided parcel mapping for all of the 33 towns in Maine that have digitized their tax maps.  Why is this important?

 

Parcel mapping is critical for landowners to determine if their land qualifies for conservation easements and federal income tax deductions (170H provisions).  There are many federal and state grant programs available for lands that abut or enhance open space, protect wetlands, forests, endangered species and other natural resources.  The quickest way for a landowner to determine whether his or her land qualifies for any of these grant or incentive or tax programs is to look at a map and pinpoint the land’s characteristics and proximity to conservation areas.

 

Maine has been our mortar and pestle.  Our next site will feature the metropolitan Houston area.

 

If you have suggestions or recommendations for information to be added to our sites, call or email us.  We added the farmer’s markets and energy-saving features to the Maine site at the suggestions of Michelle Knapik of the Geraldine R. Dodge Foundation in NJ.  We welcome suggestions.  The beauty of websites is the speed with which information can be added and augmented.

Friday, September 28, 2007

There is a real chance that by the end of this calendar year, December, 2007, Congress will finally recognize the stewardship contributions of private landowners and will provide real financial rewards ($$) and incentives for conservation on private land.  
 
Under the leadership of Senate Finance Committee Chair Max Baucus (D-MT), and Senator Charles Grassley (R-IA), last week the Senate Finance committee marked up (meaning: approved in committee votes) new legislation to “Make Permanent the Special Rule Encouraging Contribution of Capital Gain Real Property for Conservation Purposes.” What does this mean? It means conservation easements will continue to qualify for significant federal IRS tax deductions.
 
The Pension Protection Act of 2006 (re: the “Special Rule Encouraging. . .) made a number of steps up from previous incentives for conservation. These increased incentives make conservation an economically viable solution for America’s landowners.
 
Here is some of the language directly from the legislation:
“Individuals may deduct the fair market value of any qualified conservation contribution to an organization described in section 170 (H)(1)(A) to the extent of the excess of 50% of the contribution base over the amount of all other allowable charitable contributions.” 
This is up from 30%. Also,
“Individuals are allowed to carryover any qualified conservation contributions that exceed the 50% limitation for up to 15 years.”
This is up from 5 years. 
 
For a farmer or rancher (50% or more of their gross income comes from the trade or business of farming) the incentives are even greater allowing for 100% of a conservation contribution to be deductible as long as the property remains available for agricultural production. On top of the deduction, it also means the land can remain working and providing income for farmers, ranchers, and the communities that depend on them.
 
Depending on individual circumstances, these provisions mean real money and real tax deductions for landowner’s pockets. See our Conservation Tax Center and PLN for the full language specifics of these important provisions. Unless this legislation passes, these provisions are set to expire after 31 December 2007. 
 
The Finance Committee also approved new legislation sponsored by Senator Crapo (R-ID) to “Provide Tax Credit for Recovery and Restoration of Endangered Species.” The proposed legislation provides
a credit against income taxes for (1) costs paid or incurred by an eligible taxpayer for conservation of qualified species pursuant to a habitat management plan, (2) a percentage of the loss in value to real property attributable to an easement placed on property pursuant to habitat protection agreements.” 
The allowable credit amount is 100% of costs paid or incurred for perpetual habitat protection agreements. In plain English, landowners that want to improve endangered species habitat on their land will now be compensated for their efforts in the form of tax credits. Landowners will need a qualified appraisal for their tax return (see PLN for Appraisers).
 
These initiatives are huge, and long overdue, and in the long run should be a great boon for farmers and ranchers across the country from Maine to California. 
 
Be sure to contact a good lawyer familiar with these important conservation tax provisions, and a qualified appraiser.
 

Tuesday, September 04, 2007

My name is Amos S. Eno and I am President of the Resources First Foundation (hereafter RFF), which I established in 2000. RFF sponsors what we call PLN (www.privatelandownernetwork.com), and CTC (www.conservationtaxcenter.org), and a host of satellite websites, the latest of which is (www.savearanch.org). All our websites are designed to empower private landowners and to stimulate private sector conservation and stewardship initiatives and solutions for environmental problems.