The Mercury: Gerlach conservation tax break bill passes House, goes to Senate
By Evan Brandt
July 18, 2014
WASHINGTON, D.C. — Since before he was elected to Congress, U.S. Rep Jim Gerlach has worked at ways to preserve Pennsylvania’s remaining farms and natural landscape.
Now that he has announced his retirement and sees his Congressional career coming to a close, he may also be closing in on a long-sought goal — the passage of federal tax legislation to encourage the preservation of valuable land through conservation easements.
A conservation easement is one of the tools of choice for the preservation of farmland and sensitive natural areas.
Private landowners in essence donate the development rights on a parcel, usually to a non-profit preservation trust, which holds them in perpetuity while allowing the landowners to continue to own the land and pass it down to future generations with the restrictions attached.
On Thursday, the House voted 277 to 130 to pass H.R. 4719, called the“America Gives More Act,” a package of five changes to the tax code approved on a bipartisan basis by the House Ways and Means Committee.
The law, if approved by the Senate and signed by President Obama, would allow landowners who sell a conservation easement to deduct the fair market value of the land conserved from federal income taxes up to 50 percent of the taxpayer’s adjusted gross income.
For farmers, the deduction can be up to 100 percent of their adjusted gross income provided the land remains in agricultural or livestock production.
The bill passed also increases the deduction allowed and extends from six to 16 the number of years over which the donor can take the deductions.
This deduction, first enacted in 2006 and extended several times, expired at the end of 2013 and Gerlach has been fighting to get it made permanent for several years.
Thursday’s passage in the House is the furthest along in the legislative process the effort has achieved to date.
Speaking from the floor of the House Thursday, Gerlach explained the benefits of conversation easements and highlighted local property owners who took advantage of it before it expired.
“Mr. Speaker when the time comes for families across our great country to decide the future of land that has been farmed for generations or blessed with abundant natural resources, the choices should not be between selling that land or struggling to pay a bigger tax bill to hold on to what is likely their most valuable family asset,” Gerlach said.
“The extremely difficult choices families make about their farms and their property ultimately affect not only their lives, but also the quality of life for their neighbors and the character of their communities. Conservation easements provide property owners with another choice when looking for an alternative to selling their land,” Gerlach told Congress.
John Strickler/The Mercury U.S. Rep. Jim Gerlach picks blueberries at the Hawthorne Farm on Neiffer Road in Limerick while promoting the conservation easement tax credit during a visit in 2011. In a speech on the floor of the House of Representatives Thursday, Gerlach quoted farmer Don Hawthorne on the benefits of the program.
Gerlach offered up the example of Limerick farmer Don Hawthorne, who in 2006 donated a 26-acre conservation easement on his Neiffer Road Christmas tree farm, fruit orchard and blueberry patch to Montgomery County Lands Trust
“Knowing that farming will most likely continue on this farm long after I’m gone gives me peace of mind,” Gerlach quoted Hawthorne as saying.
He also pointed to the Great Marsh off Route 401 in East Nantmeal, “the most biologically diverse wetland in Southeast Pennsylvania,” and the land preserved by a conservation easement donated by the Moore family.
In addition to being home to 155 species of birds and 200 species of flowering plants, Gerlach said the Marshlands Preserve, as it is known, is also the headwaters of Marsh Creek, the primary source of drinking water for Wilmington, Del.
“Open space is really about the next generation,” Gerlach quoted Jim Moore as saying. “We preserve this land because we love it and want to share it and the tax benefits from easement donations make it more feasible for us to do that.”
The bill now moves to the Senate.
The Senate Finance Committee passed companion legislation on April 3 that would extend the conservation easement incentive for 2014 and 2015.”
“The House vote is important to let the Senate know that there is support for the conservation easement tax incentive and we can finally get a bill to the President’s desk before the end of the year,” Gerlach said.
“Senator Casey believes encouraging conservation can help preserve Pennsylvania’s natural beauty,” Press Secretary John Rizzo wrote in an email to The Mercury responding to an inquiry. “Senator Casey looks forward to this measure being considered in the Senate.”
A Mercury inquiry to the offices of Pennsylvania Sen. Pat Toomey about his stand on this measure was not returned Friday.
But there is no question about where the conservation community stands on the bill, and how they would like the Senate to respond.
“The fact that the bill has already gained more than 200 co-sponsors underscores the breadth of support on both sides of the aisle for the idea of making the enhanced incentive permanent,” said Rand Wentworth, president of the Land Trust Alliance, a national conservation group that works on behalf of the nation’s 1,700 land trusts.
“Nearly half of House members co-sponsored this bill, underscoring the fact that Congress believes it should be law, but the number of legislative days are numbered, so the time to act is now,” Wentworth said.
“For anybody to see that kind of consensus here in Washington, D.C. is noteworthy indeed,” Gerlach said on the House floor.
According to testimony received by the Ways and Means Committee, in the first two years following the deduction’s enactment, the number of conservation easements doubled compared to the prior two years, and increased the acreage conserved by approximately 32 percent.
Locally, the incentive helped to preserve thousands of acres of open spaces in the Oley Hills area of Berks County and the Great Marsh in East Nantmeal, Chester County.
It has been used to preserve land through partnerships with the French and Pickering Creek Conservation Trust, the Natural Lands Trust, the Berks County Conservancy and the Brandywine Conservancy.
“Landowners who contribute conservation easements are ensuring that generations of citizens will enjoy the conservation benefits of their property in perpetuity,” said Kim Murphy, president of the Berks Conservancy. “This deduction is a small incentive to assist them with their vision, and our collective future.”
Molly Morrison, president of Natural Lands Trust, thanked Gerlach for his “unwavering leadership” on the issue.
“We are grateful to the House for recognizing that empowering more landowners to make the choice to conserve their land is a smart way to protect our most important natural and agricultural resources,” she said.
Gerlach hopes the Senate will take up the bill and the President will sign it before he winds up his career in Washington.
“The conservation easement tax incentive has generated widespread support in Congress because the conservation easement tax credit works,” Gerlach said.