Why Are Easements Targeted?
For clues, look at the staff summary at the beginning of the Joint Committee Report. First the committee was launched at the request of Senators Charles Grassley and Max Baucus. If you go back and read the Washington Post coverage of the Senate investigation following the Post investigative series on The Nature Conservancy, it's clear that both men were plenty ticked off at a perception that TNC was not being fully forthcoming. Grassley is quoted as saying " "I expect it will become even more clear that reforms to existing law should accompany any new incentives for taxpayers to donate land for conservation." Then the article continues Grassley is sponsor of a bill backed by the Conservancy that passed the Senate earlier this year and which would provide hundreds of millions of dollars in new conservation tax breaks." So Grassley sponsored the bill to expand the tax breaks, then gets embarrassed when the Post comes out with all the reports of abuses.
Among the staff marching orders, you find this paragraph; "Valuation issues....in the context of charitable contributions.... are a common source of noncompliance. The report contains several proposals to resolve valuation controversies in a simpler and more administrable way.” Everyone agrees that determining the fair value of easements is subjective, complicated and generally beyond the expertise of the IRS. So given the choice between taking the time intensive steps of codifying some version of the LTA's Land trust standards or just essentially getting rid of easements, the staff chose the easy out. Lose the easements.
Finally, you have a Congress that faces a huge budget deficit with a mandate that it can't raise taxes. What's the only other way to raise money? Close loopholes. The committee claims making the changes to easements can raise 1 billion dollars over 10 years.
So add it all together. 1) A ticked off, embarrassed boss, 2) a search for simplicity and 3) strong, strong pressure to raise revenues without raising taxes = conservation easements as roadkill.
What to do?
The LTA has come out with an outline for a letter to Congress that it suggests be modified by each trust and its supporter and mailed immediately. Interestingly (at least to me) the LTA is the only national trust group that I can find that has even mentioned the report. Not a peep from The Nature Conservancy on its website. (I imagine all the talking is being done behind closed doors)
Also, trusts are being urged to come up with a single page of talking points in support of easements, and get them to their congressional delegation ASAP.
So who should the groups target for help? People with real experience in Washington will know better, but here are my outsider suggestions and guesses.
First, I think a fairly high level group of national leaders should go before Grassley and Baucus, kowtow on the floor and beg forgiveness. If those two remain truly angry, they've probably got the muscle to get this one through, no matter how many letters are written.
Second, target the committees on each side. In the Senate, it's the Finance committee, and I'm guessing this is the right subcommittee.
SENATE SUBCOMMITTEE ON TAXATION AND IRS OVERSIGHT
Jon Kyl, AZ, Chairman
James M. Jeffords, VT, Ranking Member
Trent Lott, MS
Orrin Hatch, UT
Olympia J. Snowe, ME
Mike Crapo, ID
Craig Thomas, WY
Rick Santorum, PA
Max Baucus, MT
Kent Conrad, ND
Blanche L. Lincoln, AR
Charles Schumer, NY
Kyl, Jeffords and Snowe might be sympathetic ears. Snowe particularly because Maine is a huge Land Trust state.
The House side is a little more difficult to figure, because as I read it, the subcommittees get whatever the Chairman decides they should have. The Ways and Means chairman is Bill Thomas (R) from Bakersfield, CA. Agriculture is big there, so Farm Trusts might have some pull with him. Committee member Thomas Reynolds (R) NY has been mentioned as possibly sympathetic. Other sympathetics might be Mark Foley (R) FL, Nancy Johnson (R) CT and Bob Beauprez (R) CO. If anyone knows of others, please speak up.
Finally, this really does have to be the wake-up call for trusts to do everything they can to stop all easement abuses. In fact, the horse may be out of the barn on this one. The next few months will tell.