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Tuesday, January 31, 2012

SB 200 Guts Land Conservation Easements – Eliminating Incentives to Preserve Ecologically Important Lands for Future Generations

Kathy_SF CountyGuest blog by County Commissioner Kathy Holian.

Senator Phil Griego (D) has introduced SB 200  to drastically constrain the program of economic incentives that underpins conservation easements in New Mexico. Through Griego's bill, the Martinez administration is attempting to limit the scale and availability of tax credits to any landowner who wishes to put land under a conservation easement (CE).

The existing Landowner Conservation Incentive Act (LCIA) (Sec. 75-9-1 et seq. NMSA 1978) gives a landowner the ability to preserve land that is rich in ecological, cultural, recreational, or agricultural values, and obtain a NM tax credit up to $250,000, or half the value, whichever is less, of the donation of development rights. Moreover, the donation as a CE is, at present, transferable: for example, if a farmer has valuable arable land that he or she wishes to maintain in that condition (i.e., without being paved over by a housing development or parking lot or shopping mall), then the LCIA makes it possible to sell the tax credit, even when the farmer doesn't have enough tax liability to make it worthwhile for himself or herself.

"Land-rich, but cash-poor" is no longer a handicap for the farmer's (or rancher's) bottom line; his or her donation can be plowed back into the farm or ranch. Having a tangible economic benefit for the owner of agricultural land helps to preserve it, in perpetuity: for growing our food locally, or for keeping it in rangeland, or for preserving its scenic beauty and wildlife. In the last seven years, over 44,000 acres, with a total donation value of over $41 million, have been permanently protected at a minimal cost to taxpayers.

Griego's bill, SB200, would eliminate out-of-state landowners from the LCIA program, regardless of the conservation-worthiness of their land; would increase the tax burden to participants by converting capital gains to ordinary income, thus reducing their return; and would eliminate tax-relief benefits to NM businesses who purchase tax credits; would penalize married couples and families that jointly own land by limiting the number of tax credits; would institute a 5-year spacing requirement. This latter provision would make it nearly impossible to protect larger landscapes in phases or to work with landowners who own multiple, separate parcels worthy of conservation. By instituting a 5-year holding period, SB200 would eliminate tax credits and land protection as a financing tool, particularly for keeping land active in ranching or farming. SB200 eliminates nonprofits or conservation organizations from using CEs and redefines conservation purposes, thereby eliminating agricultural land as a conservation purpose under NM State Law. Finally, the Natural Land Protection Committee would be eliminated, so that there would be no public hearing process for the LCIA program.

SB 200 virtually guts the LCIA program. His bill is a frontal assault on land conservation in the State of New Mexico. If SB 200 passes and is signed into law, New Mexico will lose many benefits.

● Economic Development. Conservation easements on working, agricultural lands support a local and more resilient economy by circulating dollars within our rural communities, and conservation easements on scenic lands help promote and protect the State’s tourism industry.

● Jobs & Financial Benefits. Conservation easements enhance New Mexico’s outdoor recreation industry (which contributes $3.8 billion annually to New Mexico’s economy and supports 47,000 jobs) and New Mexico’s agricultural sector (which contributes $3.39 billion annually to New Mexico’s economy and supports 23,000 jobs).

● Financial Alternative. The proceeds from the sale of tax credits allowed by the Land Conservation Incentives Act provide a reasonable alternative to landowners who are under economic pressure to sell their water rights or subdivide and sell portions of their family land.

● Voluntary. Conservation Easements are completely voluntary; no landowner has ever been forced to donate a conservation easement, nor can the government “take” a conservation easement through the exercise of eminent domain.

● Hunter Friendly. Although conservation easements typically do not require public access, conservation easements on lands with wildlife habitat are hunter-friendly because they benefit wildlife (by providing wildlife corridors and protecting existing wildlife habitat) and because game species roam between privately conserved lands and public lands.

● Alternative Energy. Conservation easements can be drafted to support limited alternative energy infrastructure that allows landowners to diversify their energy resources in pursuit of continued, effective management of their family lands.

● Culture & Heritage. Conservation easements on agricultural land rein in sprawling development and help preserve New Mexico’s cultural heritage and longstanding, traditional way of life.

● Food Security. Conservation easements on working farms and ranches help to protect our local food supply, maintain the integrity of our local food economy, and support New Mexico’s thriving—and growing—farmers’ markets.

● Minimal Fiscal Impact/Substantial Conservation Benefit. Over its seven year history, the fiscal impact of the Land Conservation Incentives Act has been less than $3 Million, yet has conserved over 44,000 acres of land, the conservation portion of which is valued at over $40 Million. In other words, the program has resulted in more than $10 of land conserved for every $1 claimed as a tax credit.

January 31, 2012 at 06:30 AM in Land Issues, NM Legislature 2012, Taxes | Permalink


Thanks, Commissioner Holian, for bringing SB 200 to our attention.

I hope Senator Griego will consult with experts involved with conservation easements.

This is such an important tool in our land use toolbox.

Posted by: Lora Lucero | Jan 31, 2012 10:01:30 AM

This is such a disservice and will remove an important component in conservation of New Mexico land. It defies logic as the latest census indicates a huge migration of US population to the West and Southwest; thus the need for forward thinking to preserve NM land is paramount at this time. By simply crunching the very transparent numbers one could easily establish that more harm than good will be done by passing this bill and I urge Senator Griego to carefully analyze the data and to see the negative impact this bill will have on NM lands. Thank you Commissioner Holian for this article.

Posted by: Tom Rael | Feb 6, 2012 10:15:44 PM