By the end of 2003, Pennsylvania land trusts reported a total of 394,872 acres protected through a variety of means.

Source: Land Trust Alliance, 2003 with a few corrections from PALTA.

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An Interview with Senator Rick Santorum

PA Land Trust Assn: Voluntary land conservation plays a key role in helping local communities protect the places special to them. Pennsylvania’s local land trusts have conserved roughly 400,000 acres of productive farm, forest, wildlife habitat and other lands. How do you feel about land trusts and their work?

Rick Santorum: Local and regional land trusts in Pennsylvania have played an important role in conserving land for its natural, recreational, historical and open space purposes. I have heard the growing concern from my constituents in Pennsylvania about the loss of open space in local communities and I am pleased Pennsylvania land trusts have stepped up to the challenge. Land trusts are very closely tied to the communities in which they operate, and these communities are turning to land trusts to conserve land. I have worked closely with the Pennsylvania land trusts and look forward to that continued collaborative effort.

PALTA: Conservation easement donors currently can deduct up to 30% of their adjusted gross income per year, for up to 6 years. This is a good incentive to help the wealthy landowner make a generous but difficult decision to conserve their land. However, families who are land-rich but cash-poor receive little tax incentive for their profoundly generous conservation gifts, which may be worth 10 or 20 times their annual income. Is this sensible public policy? What should the federal government do to promote voluntary land conservation?

RS: The current tax code gives greater value for monetary donations over land donations, in effect penalizing those land-rich families who want to contribute to conserve land. I have worked with my colleagues to enact changes to that policy in both my CARE Act, and in the recently Senate-passed Tax Relief Act of 2005, S. 2020. I am hopeful these changes will become law in 2006.

PALTA: How will your CARE Act, which you co-introduced with Senator Lieberman (CT), impact charitable giving and land conservation. What is the likelihood that this legislation with its conservation provisions will be enacted into law?

RS: The CARE Act, introduced in both the 108th and 109th Congresses, is important unfinished business. In the 108th Congress, more than 1,600 small and large organizations from around the country endorsed the CARE Act and 23 bipartisan Senators were cosponsors. The CARE Act would make it easier for donors to realize the full value of their donations. Currently, conservation easement donors can deduct up to 30% of the adjusted gross income (AGI) per year, for up to 5 years. The CARE Act would permit donors to deduct up to 50% of their AGI for up to 15 years. Farmers and ranchers would be allowed to deduct up to 100% of their AGI for 15 years. The CARE Act would also exclude 25% of the value of the sale from capital gains taxes when landowners sell land to qualified conservation organizations. Similar provisions are included in S. 2020 and I hope that we can get the provision to the President’s desk early in the new year.

PALTA: To prevent abuse of conservation easement tax benefits, PALTA supports enactment of stricter rules for appraisals and appraisers as well as increased IRS scrutiny of purported conservation donations. (http://conserveland.org/features/irstaxincentives). In contrast, the Congressional Joint Committee on Taxation proposed eliminating abuse by essentially eliminating the tax benefit. What do you feel is the appropriate way to deal with potential abuse?

RS: There has been talk in Washington about the potential elimination of fair market value deductions for the general contribution of property to charities. I believe that the Senate can think of better ideas that address the issue rather than eliminating fair market value deductions altogether. That’s why in March of this year, I wrote a letter to Senate Finance Committee Chairman Charles Grassley of Iowa stressing the importance of supporting conservation initiatives and the need to carefully evaluate the impact these proposals may have on conservation. I also urged the Chairman to address easement abuse and fraud without discouraging legitimate conservation activities.

I also urged my colleagues to critically analyze the implication these proposals may have during the June 8, 2005 Senate Finance Committee hearing. During this hearing, I highlighted the fact that limits on fair market value deductions can have a serious impact on conservation initiatives. I also underscored the importance of preserving farmland and other land resources as a critical way to encourage smart growth and combat urban sprawl.

Finally, when this issue came before the Senate Finance Committee in November as part of the Budget Reconciliation process, I noted my concerns with the proposal included in the original draft. I knew the concerns because I reached out to the Pennsylvania land trusts and asked for their input. With that information, I received a public commitment to make necessary changes. Thankfully, The current language strikes the appropriate balance.

PALTA: As a member of the Senate Committee on Agriculture, what do you see as the greatest challenges facing Pennsylvania’s farmers? What can Congress do?

RS: Among the many issues facing Pennsylvania's farmers are the threat of urban sprawl and the depletion of our Commonwealth's farmland. To combat this, I was proud to lead the charge to create the Farmland Preservation Program in the 1996 Farm Bill. Since its inception, this program has preserved over 13,000 acres of Pennsylvania farmland. Through the more than $12 million Pennsylvania has already received through his program, over 2,500 farms have been preserved and revitalized. This is a remarkable achievement, one that the entire Pennsylvania conservation community should be incredibly proud of. As one of Pennsylvania's two U.S. Senators, I will continue to urge my colleagues to provide more funding to this vital program that benefits thousands of Pennsylvania farmers.

Another important conservation and land management issue facing Pennsylvania farmers is the need to preserve the Chesapeake Bay ecosystem. While the Bay does not directly touch our borders, the fact is we all live downstream. The Susquehanna River, one of the Bay's primary tributaries, flows directly through our Commonwealth. So, it is essential that we responsibly care for this waterway and the creeks and streams that flow into it. As a way of addressing this important issue, I have been proud to join Senator Paul Sarbanes of Maryland is cosponsoring bipartisan legislation that addresses nutrient pollution reduction. I have also worked with Senator Sarbanes to make $20 million available to initiate a Chesapeake Bay Working Lands Nutrient Reduction Pilot Program at the USDA to test ways to reduce agricultural nutrient and sediment pollution. By responsibly managing tributaries like the Susquehanna, the Chesapeake Bay will one day be restored for our entire nation to fully enjoy.

PALTA: Is the work of land trusts understood in Washington? How can land trusts better communicate their many success stories?

RS: I think it is important for lawmakers to understand how tax policy can be quite helpful to conservation and open space issues. Land trusts have been supportive of tax policy that will encourage people to donate and preserve land.

Land trusts are making a huge impact in preserving open space. In 1950, only 53 land trusts operated in 26 states. Today, more than 1,500 land trusts operate across the country in every state in the nation. Land trusts are becoming more creative in their effort to conserve land in the communities they serve. I encourage land trusts to make sure lawmakers are aware of their efforts and see the evidence of their progress. I look forward to continue working with these admirable organizations in the future.

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Conservation Tax Benefit Update

In Fall 2005, the U.S. Senate passed legislation (S. 2020) that included a significant expansion of the tax deduction available to landowners who donate a conservation easement.  

S. 2020 would extend the carry-forward period for tax deductions from 5 to 15 years and raise the cap on conservation deductions from 30% of a donor’s income to 50% -- and to 100% for farmers. The bill also includes a variety of changes in the law affecting charitable contributions, including a much needed tightening of the rules on appraisers and appraisals of donated property and a significant tightening of the rules on donations of easements to protect historic structures.  

The House counterpart of this bill does not include the conservation incentive.

PALTA will keep you updated on important issues impacting conservation through e-mail alerts and through updates at conserveland.org. To receive PALTA e-mail alerts, simply sign up at conserveland.org/lists.

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Transfer of Development Rights in Pennsylvania
A Q&A by John Theilacker , Brandywine Conservancy

Q. How are TDRs allocated within the sending zone?
A. TDRs are typically allocated to each parcel or tract of land within a zoning district as “so many development rights per acre”. Some municipalities with TDR provisions allocate these rights based on the parcel’s gross acreage, while others “net-out” physically constrained lands or other built lands before allocating development rights.

Q. Are all allocated development rights sold at once?
A. No, unlike the sale of an agricultural easement, TDRs can be sold in varying amounts. Upon severing, however, development rights are permanently conveyed. A map or other legal document is filed with the municipality showing where the development rights originated from. This also prevents their reuse.

Q. Once purchased, do TDRs have to be immediately used?
A. The answer depends on who initiates the transaction. Private-market transactions usually occur because the TDR buyer intends to immediately put the TDRs to use in a receiving zone development. Under a TDR scenario in which a municipality initiates the TDR buy, purchased TDRs are often “banked” for future sale by the municipality, or retired altogether.

Q. Isn’t it true that the TDR tool really hasn’t worked in Pennsylvania?
A. There are both TDR success stories and failures, but the reasons why TDR has often failed are now better understood. For TDR to work, the community must want to conserve natural or cultural resources, while at the same time, be willing to accept land development in some part or parts of their community (or region, if planning at the regional level). TDR cannot be mandated in PA, so it must be the most attractive option offered to a landowner or a developer within the zoning districts where sending and receiving zones are established.  Municipalities should add TDR to their toolboxes along with other equally important tools, such as conservation easements and open space financing.

Q. Is the buying and selling of TDRs limited to the private market?
A. No, municipalities or their municipal land trusts are buying TDRs from prioritized farms or other properties, often to avoid losing the property to a development proposal. In some cases, TDRs are resold by the municipality for use within a local receiving zone. In another case, purchased TDRs are precluded from use within the municipality, but may be offered for use on a more regional basis.

Q. How is the value of TDRs determined?
A. For private transactions, the sale value of a TDR is based on the utility of using those rights for a receiving zone development. Not all residential TDR uses within a receiving zone development bear the same market price. For public purchases, the sale value of a TDR is based either at, or less than, the fair market value determined through a qualified appraisal. In some municipalities that function as TDR brokers and banks, TDR value is intentionally set below fair market value to encourage purchase.

Q. Must TDRs be limited to use in residential receiving zones only?
A. No, TDRs may be used to increase square footage of commercial and industrial buildings in non-residential receiving zones.

Q. May municipalities transfer development rights across their boundaries?
A. Yes, recent amendments to the Municipal Planning Code enable the inter-municipal transfer of development rights from “rural resource areas” to “growth areas” where participating municipalities have adopted a multi-municipal plan, have joint-zoning, or have formed an intergovernmental agreement.

Learn more on TDRs! Attend our upcoming seminar entitled Transfer of Development Rights: Turning Obstacles into Opportunities on Friday, April 28th in conjunction with the 2006 Pennsylvania Land Conservation Conference, Learn more at conserveland.org

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CEAP Expansion Planned

PALTA is working to expand the Conservation Easement Assistance Program to:

• fund the amendment and restatement of older easements
• fund sign installation on easement properties
  
• fund baseline documentation for older easements that lack or have inadequate baselines