Washington Watch, December 2012

Content:

Senate Dear Colleague Letter Supports a Funding Solution for LWCF

Funding Opportunity Cooperative Endangered Species Conservation Fund announced

U.S. Department of Transportation releases guidance for programs within MAP-21

Groups Urge Passage of Farm Bill

Tax Outlook for 2013 Still Uncertain


 Senate Dear Colleague Letter Supports a Funding Solution for LWCF

As Congress continues to meet in a "lame duck" session following the November 6 elections, 49 Senators have written to Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) demonstrating their support for the Land and Water Conservation Fund (LWCF). LWCF provides funding for federal land acquisition, protection of working forests through the Forest Legacy Program, protection of habitat for endangered species, protection of historic American battlefields, and grants to states for outdoor recreation.

The letter urges the Senate to consider a legislative solution before the end of the session to ensure that LWCF receives dedicated and consistent funding. Read letter (PDF).

The leaders of the bipartisan letter were U.S. Senators Max Baucus (D-MT) and Richard Burr (R-NC). In addition to the two sponsors of the letter, 47 of their colleagues signed on to the letter. The signers represent a total of 33 states and included 40 Democrat, 7 Republicans, and 1 Independent.

Legislation is needed to ensure the continuation of the Land and Water Conservation Fund and to provide a dedicated funding stream for the program in accordance with the intent of Congress when LWCF was established in 1964.

 Funding Opportunity Cooperative Endangered Species Conservation Fund announced

On October 25, the U.S. Fish and Wildlife Service released the request for proposals (RFP) for the Cooperative Endangered Species Conservation Fund (CESCF or Section 6) for FY 2013. The announcement and RFP are available here.

The final amount of funding available for CESCF in FY 2013 is undetermined. Congress enacted a six-month continuing resolution (CR) for federal programs for the first half of FY 2013, sometime during the early months of 2013. It is expected that Congress will complete an appropriations bill providing for the full fiscal year. The CR essentially held funding levels to the amounts provided in FY 2012. In FY 2012 CESCF received $47.757 million.

The final deadline for proposals to USFWS is January 14, 2013. However, states have deadlines of their own in advance. Nonprofit organizations like The Trust for Public Land may partner with states, but the states are the ultimate applicants to the USFWS. CESCF requires a minimum 25% nonfederal match for projects.

Two component programs are available for land acquisition projects:

  • The Habitat Conservation Plan (HCP) Land Acquisition program provides funds to complement habitat mitigation requirements within an approved HCP area. This program received about $15 million in FY 2012. The competition for this program is held at the national level. As in FY 2012, about 10% of HCP funds will be targeted for single-species projects.
  • The Recovery Land Acquisition (RLA) Program provides funds to implement recovery plans for listed species. This program received about $8.5 million in FY 2012. The competition for this program is held at the regional level with the national USFWS office determining how much money will be apportioned to the regions.

 U.S. Department of Transportation releases guidance for programs within MAP-21, the new two-year federal transportation reauthorization

The U.S. Department of Transportation (USDOT) and the Federal Highway Administration (FHWA) have released initial guidance documents to the states, interested partners, and the public for the surface transportation programs created under MAP-21. Signed into law by President Obama in July, MAP-21 is the new two-year transportation reauthorization that provides funding for federal programs in FY 2013 and FY 2014. The guidance documents, as well as links to public outreach presentations by USDOT officials on various programs, are available here.

Guidance is available for the Transportation Alternatives Program (TAP) - which combined and replaced the Transportation Enhancements (TE), Safe Routes to School, and Recreational Trails programs - and the Federal Land Access Program (FLAP) - which is similar to the previous Public Lands Highways program.

The guidance documents outline the legislative requirements of the programs, provide information on eligible activities and applicants, and begin to discuss the rules and procedures of the programs as they are implemented by USDOT and the states. In general, states will play a larger role in determining the distribution of federal transportation dollars from programs to projects.

 Groups Urge Passage of Farm Bill

The Farm Bill expired on September 30, 2012. As a result, the NRCS will not accept new enrollments under the Wetland Reserve or Grasslands Reserve programs until the law is extended. However, NRCS will continue to accept applications for new enrollments under the Farm and Ranchland Protection Program.

There is some discussion in Congress of the possibility of an extension of current law which would give time for Farm Bill negotiators to reach an agreement on a longer term bill. The Trust for Public Land recently joined a coalition of more than 230 groups to urge Congress to pass a new five-year Farm Bill during the "lame-duck" session. The new bill would likely resemble the draft legislation moving in the House and Senate.

Senate: On June 21st, the Senate approved, by a vote of 64-35, that chamber's version of the Farm Bill. The Senate-passed bill merges three NRCS easement programs: Farm & Ranchland Protection Program, Grassland Reserve Program, and Wetland Reserve Program. The three would form a new "Agricultural Conservation Easement Program" (ACEP). ACEP would have two branches: (1) Wetland Easements Program (essentially a continuation of the Wetlands Reserve Program) and (2) Agricultural Land Easements (which would encompass FRPP & GRP). ACEP would be funded at $2.2 billion over federal fiscal years 2013 through 2017. Under the new program the Agricultural Land Easements would receive at least 40% of funding from ACEP.

House: On July 12th, the Agriculture Committee of the House of Representatives passed its version of the Farm Bill. The House committee's proposal included virtually identical language establishing ACEP. The full House of Representatives has not yet taken up the Committee-passed bill.

Also of note, NRCS Chief Dave White retired from the agency on December 3rd. Jason Weller, White's Chief of Staff, is taking over the NRCS Chief position. Mr. Weller has been actively involved in the agency's Gulf of Mexico Initiative (GOMI) and the USDA/FWS Working Lands for Wildlife (WLW) program. GOMI provides aid to landowners in the five Gulf Coast states to restore water quality throughout the region. WLW is designed to assist landowners in protecting habitat for target species, including several which are either currently listed as threatened or endangered or are candidate species. These species include greater sage grouse, lesser prairie chicken, Southwestern willow flycatcher, New England cottontail, gopher tortoise, bog turtle, and golden-winged warbler.

 Tax Outlook for 2013 Still Uncertain

One of the major issues still facing Congress is tax policy for 2013 and beyond. While the expiration of the Bush tax cuts and what to do about it have wide-ranging implications, there are some provisions that have particular impacts on the conservation community.

Among a host of provisions that have already expired is the conservation tax incentive. Normally packaged with other popular tax benefits, such as the research and development tax credit, the enhanced deduction for the contribution of conservation easements has been extended a number of times. Having expired at the end of 2011, this incentive would have to be extended retroactively in order to benefit landowners who donated easements during 2012. Any tax legislation that is passed as part of a budget deficit deal is likely to include tax "extenders," and the conservation tax incentive could be part of such a package.

At the same time there is much discussion about simplifying the tax code and possibly putting a cap on deductions. A multitude of ideas are being discussed in the press, and the potential for a cap on deductions has gotten a lot of attention from the nonprofit community. Capping deductions would have a depressing effect on charitable donations, and The Trust for Public Land has joined with other charities to oppose such a cap. Read statement here.

Landowners considering a conservation sale may also be influenced in varying degrees by projected increases in the capital gains tax rate as well as overall tax rates for wealthier Americans. The estate tax too is slated to increase significantly unless Congress acts. The outlook should become clearer in the next few weeks, although Congress and the Obama Administration could decide on a short-term fix with the intention of dealing with these very complex issues next year. This would be disappointing to anxious taxpayers, but it is within the realm of possibility.