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New Senate Estate Tax Bill, No Easement Incentive in H.R. 4213, UT & MN Listening Sessions

Advocates Alert: July 22, 2010

Before anybody gets too excited, we want to clarify that the version of H.R. 4213 enacted today does not include an extension of the enhanced easement incentive; it does, however, help clear the way by simplifying the "extenders package."  We're also happy to announce a new estate tax incentive for conservation introduced in the Senate.

Senators Introduce Bill to Improve Estate Tax Incentives for Conservation

Today, Senators Mark Udall (D-CO) and Mike Crapo (R-ID) plan to introduce the American Family Farm and Ranchland Protection Act.  Like H.R. 3050 and H.R. 5475, this bill would improve the estate tax incentives for conservation under section 2031(c) of the Internal Revenue Code.  That incentive currently allows 40% of the value of land under easement to be excluded from the taxable estate, up to $500,000.  Recognizing that increased land values make that cap increasingly inadequate, this bill would:

  • Increase the cap on the 2031(c) exclusion to $5,000,000;
  • Raise the 40% exclusion percentage to 50%; and
  • Ensure quality easements by decreasing the benefits for less protective easements.

Congress may act this year to prevent the estate tax law from returning in 2011, to what it was in 2001, so we have a unique opportunity to improve incentives for conservation as part of that reform.  We believe this proposal, along with a permanent income tax incentive (S. 812) and an estate tax deferral for agricultural land (H.R. 5475), would keep important natural and historic resources intact, and will be a valuable contribution to land conservation, regardless of where Congress sets the estate tax rate and unified credit.

Please call the Capitol Switchboard at 202-224-3121 and ask your Senators to co-sponsor this bill by contacting Alex Harman in the office of Senator Mark Udall (D-CO) or Mike Quickel in the office of Senator Mike Crapo (R-ID).  Click here for a fact sheet on the bill, which will be updated with a bill number as soon as it's available.  We also encourage you to share this fact sheet which discusses all three conservation incentives we'd like to see included as part of estate tax reform.

Interestingly, an improvement to the 2031(c) exclusion was also included in S. 3533, an estate tax reform bill introduced by liberal Senators Bernie Sanders (I-VT) and Sheldon Whitehouse (D-RI).  It would increase the 2031(c) exclusion to 60% and $2 million, while keeping the $3.5 million unified credit from 2009, but raising estate tax rates as high as 65%.  If the Congress does not address the estate tax this year, the estate tax will have a unified credit of only $1 million and a top rate of 55%.

No Easement Incentive Extension in H.R. 4213, but It Clears the Way

To avoid any confusion: the enhanced easement incentive has not yet been extended for 2010.  You'll recall our incentive had been included in a bill numbered H.R. 4213, but the version the President will sign today only includes an extension of unemployment benefits.  Rumors that an extension has been included in either the new financial reform law or the "small business" and "manufacturing" bills currently in play are also false.

Today's action is actually good news!  Several senators had opposed the "extenders package" because it would add to the federal deficit.  With unemployment benefits taken care of, the remainder of that package (including the easement incentive, "s-corp fix," and IRA charitable rollover) is fully paid-for, removing a potent argument against it.  The Senate will try again with a new bill number, but further action prior to the August recess appears unlikely.

We're well aware that an incentive renewed in September or later is of diminishing value for the landowners you work with.  We need help showing your Senators and Representatives the real impacts of this lapse in their districts and the need to make this incentive PERMANENT!  Tell them about the landowner who risks losing a grant while waiting for the incentive, share statistics about how many easements you've completed compared to this time last year and warn of the limited capacity of appraisers and your staff to complete a year's worth of easements in just a few months.  But most importantly, use the August recess to show them a property that could be lost to development if they fail to act.  Time is running out to schedule site visits and in district meetings.  Click here for templates and advice.

America's Great Outdoors Listening Sessions in Utah & Minnesota

Here's the latest list of upcoming America's Great Outdoors listening sessions:

We expect several more to be announced soon.  For a continuously updated list and ways to get your members and supporters involved online, please visit: www.lta.org/greatoutdoors#action.


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November 6: With only eight weeks remaining before Congress adjourns (of which Congress will be in Washington for only four), there is limited time to act. Ask your senators to urge their party’s leadership to include the charitable package in any year-end tax legislation. We’ve been meeting with Senate offices and have been encouraged by their willingness to consider making some tax extenders permanent. This puts us in a good position, but we need you to reinforce that special places are being lost because the incentive has expired. Learn more »

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