On a warm, fall day still reminiscent of summer on the property of the historic Benjamin McCann House near Lexington, Congressman Ben Chandler and members of the Bluegrass Conservancy held a press conference Oct. 10 to discuss the expansion of the federal conservation tax incentive for conservation easements.
The new law, called the HR4 Pension Protection Act, was signed by President Bush Aug. 17 and raises the deduction a landowner can take for donating a conservation easement from 30% of their income in any year to 50%. It also allows qualifying farmers and ranchers to deduct up to 100% of their income, and extends the carry-forward period for a donor to take tax deductions for a voluntary conservation agreement from five to 15 years.
The legislation only applies to easements donated in 2006 and 2007, however, which gives farm owners a limited window to take steps toward protecting their land. Currently, about 3,000 acres of Central Kentucky land is protected by easements.
"I think we have more of a reason here in Central Kentucky to take advantage of this than most other places I know of," said Chandler, one of the signers of the legislation.
Chandler's family has been farming on the same piece of property near Versailles, Ky., since 1784. "Now is the time that you can get the maximum tax advantage for putting your farm under conservation easement," he said. "The ability to do this may not be available after 2007."
A conservation easement is a voluntary legal agreement between a landowner and the Bluegrass Conservancy that protects a property's natural resources and agricultural use. In most cases, the easements, which are tailored to protect an owner's individual needs, will limit future use of the property to agricultural and open space uses.
"We're protecting the factory floor of agriculture, such as horse farming, cattle farming, and crop farming--it all goes together," said Billy Van Pelt, program administrative officer of the Purchase of Development Rights Program, a partner of the Bluegrass Conservancy.
In addition to aiding the future generations of farmers, Van Pelt said conservation easements could boost the tourism industry, which currently brings in about $880 million a year to the Lexington area.
"We are so blessed this morning to be standing on the site of one of our conserved properties," said Libby Jones, who helped launch the Bluegrass Conservancy, a non-profit program. Jones and her husband, Brereton, own Airdrie Stud near Midway, Ky., and have donated hundreds of acres their farm to the Conservancy.
"It is special to us to know that this land will be forever in production, and it will be protected for future generations," she said.
"For many of us, this is a labor of love," Chandler said. "If you have had the opportunity to travel elsewhere in this country and throughout the world, I think you'll find out very quickly that what we have here is something very special, and we ought to preserve that."
For more information about conservation easements, contact Mackenzie Victoria Royce at (859) 255-4552 or email@example.com.