Helena men lead passage of conservation tax incentives

By JOE MENDEN - IR Outdoors Editor - 02/22/07

It was February of 1999, and Rock Ringling and Bill Long had just finished an unsuccessful attempt to help a Montana ranching family put a conservation easement on their land.

Though the family wanted to preserve the land the ranch sat on, after hours of crunching numbers, they couldn’t find a for it to make financial sense for the family.

Dejected at the failure, Ringling and Long headed back to Helena, where they work for the Montana Land Reliance.

On that pickup ride home Ringling and Long hatched an idea for a new tax incentive for land-rich, cash poor ranchers to donate easements.

Little did the two men know then that what started out as an off-the-cuff conversation between two men in a pickup truck in rural Montana would turn into a seven-year journey through the ins and outs of Washington, D.C., politics.

That journey included three trips by Ringling to testify before the Senate Finance Committee and three times seeing the bill pass the Senate before stalling in the House.

The perseverance paid off last August when the bill, co-authored and sponsored by Sen. Max Baucus, D-Mont., was finally signed into law by President Bush.

“We were trying to figure out how to get Montana landowners on an equal footing with recreational buyers,” Ringling said of the day he and Long began their quest. “A lot of ranchers really couldn’t use (the previously existing) benefits.

“One of the nicest things about Montana is you get to drive a lot,” he continued. “We started throwing ideas out about what needs to happen” to make donating easements more attractive to Montana ranchers.”

He thought the idea made so much sense it would be easy to get it passed.

“We were just too naive to know that that isn’t how the system works.”

Ringling said having the support of Sen. Baucus, now chairman of the Senate Finance Committee, and Sen. Charles Grassley, R-Iowa, chairman of the committee at the time of the bill’s passage, was a big reason for its eventual success.

Now their attention has turned to making the law, which is scheduled to expire at the end of this year, permanent.

So the Montana Land Reliance is working closely with Sen. Baucus to get a permanent bill passed this year.

Ringling said he feels good about the chances of success, especially “The base that we built still exists,” he said. “Everyone is working hard to make it permanent. Sen. Baucus’ position makes that a lot more doable.”

On Jan. 31 of this year, Sen. Baucus introduced S. 469, a bill that would make the newly expanded tax incentive for conservation easement donations permanent. Sen. Grassley co-sponsored the bill.

Key provisions of the law include:

-- Raising the maximum federal income tax deduction for donating a conservation easement from 30 percent to 50 percent of adjusted gross income.

-- Allowing qualifying farmers and ranchers to deduct up to 100 percent of their adjusted gross income.

-- Increasing the number of years a donor can take federal income tax deductions from six years to 16 years.

According to Russ Shay of the Land Trust Alliance in Washington, D.C., under the old rules a person who donated land valued at $1 million whose farming or ranching income totaled $50,000 a year could deduct a total of $90,000 for their million-dollar gift.

“There’s something that’s basically unfair about that,” said Shay, who worked along with the Montana Land Reliance to rally support for the legislation. “For many of those people that’s their largest family asset. They can’t afford to give it away without getting anything.”

Now, Shay said, that same person can deduct up to $800,000 over 15 years.

According to Jay Erickson, who is a managing director of the Montana Land Reliance along with Ringling and Long, the original idea was a tax credit.

Erickson, whose background is in accounting, provided technical advice on the tax ramifications of the bill. He said the price tag of a credit would have made it hard to pass, so the group focused on the increased deduction.

Ringling said that every year he would go before the Montana Land Reliance board and tell them that a deal was almost done on the legislation. And every year something else would cause it to stall.

His confidence had started to fade in the months after a series of Washington Post articles on alleged appraisal fraud in some easements done by The Nature Conservancy once again derailed the process.

“Frankly we’d almost given up. I told (the board), ‘It’s probably not going to happen.’

“We finally got a national consensus together that this needed to happen.”

“Senator Baucus hung in there with us, and when the opportunity came up, (Sens. Baucus and Grassley) were able to get it done.”

“This is an idea that was conceived right here,” said Glenn Marx of the Montana Association of Land Trusts. “I don’t know that we’ve had a Montana citizen-initiated bill that’s impacted the nation to this extent. They learned an awful lot. This thing evolved a lot, mainly due to their perseverance. They just didn’t give up.”

Added Ringling: “It’s an interesting model for passing legislation. You can actually have an idea and get it passed at the national level. It’s pretty cool.”