While Congress struggles with diverse and, at times, divisive issues, it’s comforting to know the Montana congressional delegation can unify around homegrown Montana legislation that’s beneficial to agriculture, landowners and conservation.
About a decade ago, Rock Ringling and the Montana Land Reliance had the idea to level the field of federal income tax policy to allow traditional, multigenerational farm and ranch families the same opportunity to participate in land conservation as new, more recreation-based landowners. Sen. Max Baucus championed the effort. In 2006 a Republican-controlled Congress passed, and a Republican president signed, legislation creating new conservation tax incentives for landowners.
Expiring this month
Those tax incentives are set to expire at the end of 2013 unless Congress either extends them or makes them permanent. Landowners and land trusts prefer the latter but will accept the former. Montana farmers, ranchers, forest owners, sportsmen and women, and land trusts are proud to report Montana is one of only a couple states whose entire congressional delegation is unanimously behind making the tax incentives permanent. Baucus, a consistent leader in the effort, has introduced S. 526 to make the tax incentives permanent, and Sen. Jon Tester is an original co-sponsor of the bill. Freshman Rep. Steve Daines, R-Mont., has signed on as a co-sponsor of HR 2807. It’s great to see the delegation coming together on this issue.
The conservation tax incentives have been endorsed by such diverse national groups as the National Rifle Association, Land Trust Alliance, American Forest Foundation and Safari Club International. The legislation enjoys broad congressional geographical support in the U.S. House — from Washington state to Florida and from Maine to California — as well as strong bipartisan support, with 70 of 156 co-sponsors in the House coming from the Republican side of the aisle.
The strong bipartisan commitment exists for one major reason: The incentives work, and they work best for the so-called “land rich, cash poor” farmer or rancher. By limiting federal estate tax exposure, the tax incentives and conservation easements can help ease the transition of land ownership from one generation to the next. The longer term of years and increased deductions of the enhanced tax incentives provide key benefits to traditional farm and ranch families. This is good for agriculture, the landscape, the local economy and our ability to help feed the nation and the world.
Nationally, the rate of private land conservation increased by 36 percent during the first two years the tax incentives were in place.
In Montana since 2010, we have seen the protection of an additional 200,000 acres of farm and ranch lands through conservation easements. Many of these conservation easements would not have been possible without the enhanced conservation incentives in place. The federal conservation tax incentives have been instrumental in traditional multigeneration families conserving land and helping to make their operations financially sustainable now and through the next generation.
Making the tax incentives permanent is essential. Agricultural financial planning takes time and needs a relatively stable regulatory and tax climate. There are multiple major land conservation projects in Montana either in a holding pattern or proceeding slowly with trepidation because of significant tax uncertainty caused in large part by the temporary nature — and possible expiration — of the enhanced conservation tax incentives. Making these conservation tax incentives permanent would eliminate that uncertainty, help stabilize rural financial planning and allow conservation projects to confidently proceed.
Montana’s agriculture and land trust communities are truly grateful to the Montana delegation for its strong support, but a final push from Congress is needed to get the deal done.
Extension of or permanence for the tax incentives would benefit the landscape, the economy and our way of life.