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August 28, 2006
Tax-credit changes get quick OK
Michael Sluss
The Roanoke Times
Lawmakers pass modifications to a land conservation incentive program,
aimed at affordably encouraging preservation.
RICHMOND -- The General Assembly on Monday swiftly approved Gov. Tim Kaine's changes to legislation that will cap the amount of tax credits the state awards under a land conservation incentive program, addressing concerns raised by the governor and by preservationist groups around the state.
The changes ease restrictions that lawmakers sought to impose on tax credits tied to the value of conservation easements. The revisions also create a uniform limit on individual easements, eliminating a cap that would have applied to land outside the Chesapeake Bay watershed.
Kaine said the changes will maintain incentives "for the preservation of environmentally meaningful land" without having budget-busting consequences over the long term. Concerns about the program's cost drove Senate leaders to pursue a cap earlier this year. House leaders accepted the cap as part of a broader bill that also repeals the tax on large estates.
The original bill would have capped the annual tax credits for conservation easements at $50 million in 2007 and $75 million each year afterward. And it would have imposed a limit of $750,000 on individual credits for easements outside of the Chesapeake Bay watershed.
Kaine's changes raise the cap on annual tax credits to $100 million in 2007 and index it annually by the consumer price index. And they eliminate the individual caps that would have affected landowners in Southwest and Southside Virginia.
The measure also reduces the credit on easements from 50 percent of fair market value to 40 percent. And it requires the Virginia Land Conservation Foundation to adopt criteria for determining the conservation value of easement donations to prevent abuses in the program.
Del. Jim Shuler, D-Blacksburg, said Kaine improved the bill by eliminating a cap on individual credits for landowners in parts of Southwest and Southside Virginia.
"It's nice for those of us in the watershed that flows to the Mississippi that we're equal partners in land conservation in Virginia," Shuler said.
Some lawmakers raised concerns about a provision to index the annual cap on tax credits, calling it unprecedented. Sen. Emmett Hanger, R-Augusta County, suggested that lawmakers may want to reconsider the provision next year. But, Hanger added, the revised bill "is better than the status quo."
Kaine and House Republican leaders also hailed the repeal of the state tax levied posthumously on estates valued at $2 million or more. The repeal will take effect July 1.
House Speaker Bill Howell, R-Stafford County, said the estate tax repeal "brings a struggle by independent businesses, small business advocates, and representatives for Virginia's farmers to a successful conclusion."
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