Conservation Easement Bill Would Cost $1.2 Billion, CBO Says

H.R. 641 would amend the Internal Revenue Code to reinstate and make permanent specified rules that increased the amount of income tax deductions allowed for taxpayers making certain charitable contributions of real property for conservation purposes. The rules, which expired on December 31, 2014, increased certain income-based limits on the amount of such conservation contributions that an individual or qualified corporate farmer or rancher could deduct in a year, and extended the number of years over which such contributions above the limits could be carried forward and deducted. H.R. 641 also includes special rules for qualified conservation contributions made by Alaska Native Corporations.

The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 641 would reduce revenues, thus increasing federal budget deficits, by about $1.2 billion over the 2015-2025 period.

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending and revenues. Enacting H.R. 641 would result in revenue losses in each year beginning in 2015. The estimated increases in the deficit are shown in the following table.

JCT has determined that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

The CBO staff contact for this estimate is Nathaniel Frentz. The estimate was approved by David Weiner, Assistant Director for Tax Analysis.

              CBO Estimate of Pay-As-You-Go Effects for H.R. 641,