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Page 4 farmland preservation report April 2003 Vrginia Beach, continued from page 3 have unusually large capital gains. Because IPAs allow farmers to defer the taxes on those gains, IPAs are much more financially attractive than cash payments for easements," O'Connell said. The Virginia Beach program is funded by a dedicated portion of real property tax that gener- ates $3.5 million annually. Contact: Melvin Atkinson, 757 426 -5775; Pat O'Connell: pat@evergreenca.com. Maryland cuts lot rights, exclusions Continued from page I tural Land Preservation Foundation, which receives requests from landowners for lot exclu- sions prior to easement sale as well as for child lots after easement sale, will also have new rules. Currently, applicants can request lot exclusions at the discretion of the Foundation, which had no formal guidelines to follow for these requests. Under new rules, program applicants must decide whether to have one unrestricted lot excluded from the easement property, or, to reserve the right to request the family lot or lots at a later date. Currently, applicants could do both. The law takes effect Oct. 1. Allowable economic activity on preserved farms will -also be expanded under HB 805. In other legislation, the Foundation has been authorized to set guidelines for easement rankings under HB 804. An effort to reduce acreage requirements for easement sale from 50 to 25 died in committee. HB 827, which set down guidelines for an installment purchase program that doesn't exist, was withdrawn by its Harford County sponsors. According to Douglas Wilson, director of admin- istrative services for the Department of Agricul- ture, installment purchases need to be examined Continued on page ' etcetera .... U.S. Senate approves tax breaks for conservation in charities bill WASHINGTON, DC - The U.S. Senate passed conservation tax incentives April 9 as part of a bill to aid charities. According to the Land Trust Alliance, S 476, referred to as the CARE bill, could have far - reaching impact on conservation activities. The bill includes four tax breaks for land protection efforts— one for landowners who donate conservation easements, one for landowners who sell their land to a conservation organization, one allowing nonprofits to use tax -exempt bonds for conservation of forests, and one exempting conservation grants from the U.S. Department of Interior's Partners in wildlife Program from taxation. The bill will need to be approved by the House of Representatives before it becomes law. Land Trust Alliance (LTA) President Rand �,'entwortlizaid the new tax benefits will . "dramatically increase the number of landowners who will choose to conserve their land." Section 106 of the CARE package allows landowners who donate a permanent conservation easement to a nonprofit organization or government agency to deduct the value of their gift over 16 years rather than the six years previously permitted. The bill also increases the amount that can be deducted in any one year from the current 30 percent of the donor's income to 50 percent, with provisions allowing farmers and ranchers to deduct all of their income under certain circumstances. The deduction cannot exceed the gift's appraised value. Under present law, landowners who donated a conservation easement were limited to deducting just 30 percent of their adjusted gross income in any year, for a maximum of six years. That meant if a landowner earned $50,000 annually — rather typical for America's farmers and ranchers — and donated an easement worth $1 million, the landowner could only deduct $ 15,000 in any year, up to a maximum Of $90,000. "The law needed to be changed to give a fair incentive to people giving extraordinary donations that were worth many times their annual income," stressed LTA Public Policy Director Russ Shay. "It only makes sense to allow ranchers, farmers and