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Advocates Alert: Congressional Update: House Hearing and Independent Sector Report
Date: June 28, 2005

To Leaders in Conservation:

I would like to update you on two recent events that may influence federal policy of interest to land trusts: a Congressional hearing on historic façade easements, and the release of the Independent Sector's report on charity reforms. 

HOUSE HEARING

Last week, the House Ways and Means Committee's Subcommittee on Oversight held a hearing on historic façade easements. Land conservation was not discussed in the hearing, but we are watching the proceedings carefully since we are addressing the same section of the tax code. The hearing was chaired by Representative Ramstad (R-MN) who will also be closely involved with land trust legislation in the House. Some cases of abuse were discussed, particularly related to overvaluation, further indicating that easement reform is a priority for the tax-writing Committees. In their testimony, members of the historic preservation community emphasized the same commitment to and many of the same approaches for stemming abuse that land trusts and Land Trust Alliance have supported. These include higher standards and tougher penalties for appraisers, IRS enforcement, and targeted reforms. The National Trust for Historic Preservation also discussed their interest in a system of voluntary accreditation for historic preservation organizations. Written testimony from the hearing is available at: http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=426

INDEPENDENT SECTOR REPORT

Last week the Panel on the Nonprofit Sector released their final report. The Panel, convened by the Independent Sector at the request of the Senate Finance Committee, is a group of nonprofit leaders who have spent months discussing proposals that would help Congress strengthen transparency, governance, and accountability at charitable organizations. The Panel made a number of general recommendations applicable to every charity, as well as specific suggestions on conservation and historic easements. Their general recommendations include:

• Mandatory electronic filing of Forms 990 and 8283.
• Tougher appraisal standards for gifts of appreciated property (including conservation easements), by instituting a more rigorous definition of a "qualified appraiser", and requiring the Uniform Standards of Professional Appraisal Practice (USPAP) in some cases.
• Meaningful penalties for appraisers and taxpayers in cases of overvaluation.

With respect to conservation easements, the Panel also made a number of suggestions:

• A new system to impose penalties on organizations that fail to enforce the easements they hold. The recommendations do not provide further detail, saying only that penalties should be proportional to violations.
• Changes to Form 990, requiring charities that hold easements to 1) certify that they have written monitoring and enforcement policies, as well as the necessary resources for enforcement, and 2) list the easements they hold.
• Legislation specifically requiring that deductions be reduced when a donated easement increases the value of adjacent or other land owned by the donor or related parties. Existing Treasury regulations already require this reduction.
• Amending Treasury regulations to specifically define a "qualified conservation organization" as a 501(c)(3) whose primary purpose is environmental protection or preservation.

In addition, the report praises private sector initiatives to promote ethical behavior amongst all charitable organizations, and particularly recognizes the land trust community's existing standards. Read the report at: http://www.nonprofitpanel.org/.

NEXT STEPS

The next major action that we expect in Washington is the Senate Finance Committee's introduction of reform legislation. Senator Grassley has indicated that he hopes to move forward on reforms before Congress recesses for the summer on August 1. Your actions between now and then will make a difference!

• Meet with members of Congress when they are in their district during the July 4th recess (July 4-8) about your concern that inappropriate "reforms" - such as those suggested by the Joint Committee on Taxation - could harm your ability to do important conservation work. Because of the massive grassroots outreach following the Joint Committee on Taxation proposals in January, Congressional leaders are paying attention to land trusts! Contact ProtectPrivateConservation@lta.org for assistance.
• Place news stories and op-eds on the value of conservation in your community. Contact ProtectPrivateConservation@lta.org for more information.
• Stay informed by becoming a Land Trust Advocate and by visiting http://www.lta.org/publicpolicy/ppc.htm.

Thank you for all that you do. Land trust leaders like you have long been devoted to creating a legacy of land for future generations. Over the last several months, you have helped to build a new sort of legacy, by educating federal policymakers about the importance of your work to the communities they represent.

Sincerely,

Rand Wentworth
President
Land Trust Alliance
1660 L St. NW, Suite 1100
Washington, DC 20036
202.638.4725
ProtectPrivateConservation@lta.org