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Summer 2008


Policy Update

Farm Bill/Federal Conservation Tax Incentive

The Farm Bill renews a powerful conservation tax incentive for voluntary conservation agreements that had expired January 1st.
The incentive:
*Raises the deduction a donor can take for donating a voluntary conservation      agreement from 30% of their income in any year to 50%
*Allows farmers and ranchers to deduct up to 100% of their income
*Increases the number of years over which a donor can take deductions from 6 years to 16 years.

Landowner donations to conservancies have resulted in millions of acres of farmland, forest and rangeland being
conserved for the future. The renewed incentive is retroactive to the beginning of the year and will last through 2009.

In addition, the Farm Bill provides $733 million over 5 years for the federal Farmland Protection Program as well as administrative changes to improve program efficiency.

State Tax Incentives

Legislation to provide a state income tax credit to property owners who donate land or rights in land for conservation was introduced in February. House Bill 5698 (Sheltrown) and its mirror bill, SB 1069 (Stamas), would provide up to a $10,000 per year tax credit with a carry-forward of up to 20 years for donations of land or rights in land (conservation easements) to qualified conservation organizations. While an important tool for encouraging conservation, the tax credits would impact the state’s general fund, and therefore will likely be difficult to pass given the current state budget situation.

Michigan Natural Resources Trust Fund

Legislation to modify the Michigan Natural Resources Trust Fund was introduced in April. Senate Joint Resolution (SJR) M (Birkholz), House Bill 6002 (Lindberg) & Senate Bill 1257 (Richardville) would reverse the current Trust Fund spending ratio to allow up to 2/3 of the revenues and royalties to fund projects annually with the remaining 1/3 deposited into the Trust Fund corpus. This change would provide increased funding to purchase land, rights in land, or to fund development projects. The bills also create bonding authority such that large scale projects could be funded through bonds. A stakeholder work group was formed to discuss the bills, which have currently not progressed past the initial Committee stage.

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In This Issue:

Heart of the Lakes Center for Land Conservation Policy

300 N. Bridge Street, Grand Ledge, MI 48837  |  517.925.8649  |

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