A lot of Montana land legislation landed in the congressional trash can this week, but there may be a few bright spots.

One unexpected bit of good news came out of the federal tax cut extensions approved Thursday: renewal of a big tax break for property owners putting conservation easements on their land. Uncertainty about the tax break's survival had left many land protection deals in limbo this year.

A less certain development late Friday was Sen. Harry Reid's announcement of the America's Great Outdoors Act of 2010, an omnibus public lands bill cobbling together more than 110 other pieces of legislation. While draft versions of the bill were not available Friday evening, Reid's statement claimed it would designate new wilderness in three states, add 4,600 miles of trails and preserve historic Revolutionary War and Civil War sites.

The legislation may also contain Montana-important items such as the North Flathead Protection Act and a permanent extension of the Land and Water Conservation Fund, which provides money for wildlife habitat and conservation easements.

Landowners interested in placing conservation easements on their property got the first bit of good news Friday when President Barack Obama signed the compromise tax cut extension bill. The legislation included an extension through 2013 of income tax deductions for land protection deals.

"This is terrific news for Montana landowners," said Glenn Marx, director of the Montana Association of Land Trusts in Whitehall. "It broadens the incentives for landowners to conserve their land."

Marx said the tax incentive helped protect 236,000 acres of Montana farm and ranch land in 2007 and 2008, but the tally had slipped badly in 2010 as Congress debated whether to continue the offer. Conservation easements often take years to work out, and the tax incentive is a major part of the calculation, he said.

"It's very advantageous to modest-income working landowners with valuable land," said Russ Shay, public policy director for the Washington, D.C.-based Land Trust Alliance. He credited bipartisan support, including Democrats Max Baucus of Montana and Mike Thompson of California and Republicans Charles Grassley of Iowa and Eric Cantor of Virginia, with keeping the incentive alive.

The approved tax break lets farmers and ranchers deduct up to 100 percent of their annual income against the value of a conservation easement for up to 16 years or the total value of the easement, whichever comes first. So someone with $100,000 in farm income and a $1 million conservation easement could deduct all their income for 10 years. Those who own conservation easements on non-agricultural land qualify for a 50 percent deduction.

"This year, people have been uncertain about this expanded tax incentive," said Grant Keir, director of Missoula's Five Valleys Land Trust. "We're very excited we'll see interest from landowners who've been sitting on the sidelines waiting to see how it would play out."

Five Valleys helped secure easements on more than 12,000 acres in western Montana during 2010, making it a record-setting year for the organization. Keir said the hesitation about the income tax break was paired with uncertainty about the fate of the federal estate tax, leaving many landowners holding their breath as Congress deliberated.

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A lot of other Montana issues weren't so lucky. Senate Democratic leaders dumped a 1,924-page omnibus appropriations bill Thursday evening, just a day after they proposed the $1.1 trillion spending package. That decision may have killed chances for Sen. Jon Tester to pass his Forest Jobs and Restoration Initiative, which was included in the omnibus.

The bill would have brought new logging mandates and designated 1 million acres of wilderness and recreation areas in Montana.

Tester may also see the failure of a widely praised national food safety bill, which was in the omnibus. He had successfully amended that bill to protect small food producers from big-industry regulations, only to see it stall on a technicality earlier this month. Although the bill passed the Senate 73-25 in November, the Politico.com website predicted it had little chance of revival in next year's session.

A $40 million line item for collaborative forest landscape management could also die with the omnibus. Part of that money would have underwritten the Southwest Crown of the Continent logging and habitat restoration effort in forests of the Blackfoot, Swan and Clearwater river drainages. While the project has been approved for $4 million in annual funding for 10 years, that money has to be appropriated.

It's uncertain whether any of those measures might find a home in Reid's Great American Outdoors bill, especially Tester's logging/wilderness bill. Tester spokesman Aaron Murphy said the senator remained committed to trying all options to pass his bill this year, but couldn't say if it had a chance of getting attached to Reid's omnibus.

"Something's flying around, but it's not the version the committee put forward," Murphy said Friday evening. "Everything is so unclear, I just don't have answers now."

But after Republican senators unified their opposition to the omnibus appropriations bill despite numerous bipartisan elements, chances for an omnibus lands bill making it on the debate calendar at the end of the lame-duck session are dim.

Reporter Rob Chaney can be reached at 523-5382 or at rchaney@missoulian.com.

 

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