Farm act renews land conservation tax breaks

By Robert Norris
of The Daily Times Staff

The Foothills Land Conservancy got a boost with the enactment of the Food, Conservation and Energy Act of 2008.

The legislation, commonly called the federal farm bill, extends income tax incentives through 2009 to landowners who agree to grant conservation easements.

“It will do wonders,” said Bill Clabough, executive director of the Foothills Land Conservancy. “There’s no question that last year, when we were so busy, it had an impact.”

The tax breaks are an economic lure to landowners seeking to preserve the scenic, natural and historic values of their land.

“Most people describe it as icing on the cake,” Clabough said.

That icing comes in the form of enhanced income tax incentives that expired on Jan. 1. While some landowners aren’t concerned about the benefits, others, especially farmers, need the enhancements to encourage conservation agreements, according to Clabough.

In 2007, Foothills Land Conservancy signed 23 conservation easements, a record number.

“We did more in conservation easements last year than Foothills had ever done. There’s no doubt in my mind that the tax incentives had a lot to do with that.”

As the deadline for losing the enhancements approached toward the end of 2007, conservancy staff informed landowners about the potential loss of the enhanced tax incentives.

“We’ve been open and honest with people. Some people aren’t interested in the income tax benefits. The ones who were, we told them just hold off,” Clabough said.
After Congress overrode a presidential veto of the federal farm bill on May 15, the conservancy staff got on the phones to pass the word that the tax benefits were back in place.

Clabough said several projects are in the works for the Foothills Land Conservancy — one in Blount County, one in Roane and two in Knox.

The enhanced federal income tax incentive encourages conservation easements in several ways:

Raises the deduction a donor can take for donating a voluntary conservation easement from 30 percent of income in any year to 50 percent;

Permits working farmers to deduct up to 100 percent of their income;

Increases the number of years over which a donor can take deductions from six to 16 years.

The Land Trust — a group with offices in Nashville, Hickman County, Monteagle/Sewanee and Chattanooga and a parallel mission to the Foothills Land Conservancy — also had a record year in 2007 with 52 completed conservation easement projects.

“We know, in some cases, that certain landowners chose to conserve their land at a specific time because the enhanced tax incentives were in place,” said Jean C. Nelson, executive director of The Land Trust.

“Our goal is to close on parcels of land that might be the next sprawling development target or is the first in a series of adjoining properties in an area that we identify as crucial to conserving the quality of life in that particular region of Tennessee,” said Nelson, who praised lawmakers for renewing the tax incentives.