[Congressional Record Volume 155, Number 130 (Tuesday, September 15, 2009)]
[Senate]
[Pages S9378-S9379]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BEGICH (for himself and Ms. Murkowski):
  S. 1673. A bill to amend the Internal Revenue Code of 1986 to 
encourage charitable contributions of real property for conservation 
purposes by Native Corporations; to the Committee on Finance.
  Mr. BEGICH. Mr. President, I am pleased today to join my colleague, 
Senator Murkowski, in introducing legislation that would give Alaska 
Native Corporation, ANC, parity for an important tax incentive 
encouraging the permanent protection of land through the charitable 
donation of a conservation easement. I would also like to commend our 
colleague Congressman Don Young, who today introduces a companion bill 
in the House of Representatives.
  America's wildlife, waters, and land are an invaluable part of our 
Nation's heritage. It is imperative to preserve these natural treasures 
for future generations. Congress long ago concluded that it was good 
public policy to encourage the charitable contribution of conservation 
easements to organizations dedicated to maintaining natural habitats or 
open spaces help protect the nation's heritage. A conservation easement 
creates a legally enforceable land preservation agreement between a 
willing landowner and another organization. The purpose of a 
conservation easement is to protect permanently land from certain forms 
of development or use. The property that is the subject to the easement 
remains the private property of the landowner. The organization holding 
the easement must monitor future uses of the land to ensure compliance 
with the terms of the easement and to enforce the terms if a violation 
occurs.
  In 2006, Congress enhanced the charitable tax deduction for 
conservation easements in order to encourage such gifts. With the 2006 
legislation, Congress temporarily increased the maximum deduction limit 
for individuals donating qualified conservation easements from 30 
percent to 50 percent of the taxpayer's adjusted gross income. Congress 
also created an exception for qualified farmers or ranchers, which are 
non-publicly traded corporations or individuals whose gross income from 
the trade or business of farming is greater than 50 percent of the 
taxpayer's gross income. In the case of a qualified farmer or rancher, 
the limitation increased from 30 percent to 100 percent. The 2008 Farm 
Bill extended the temporary rules for two additional years to 
charitable contributions made before December 31, 2009.
  Unfortunately, the way the law was crafted has disadvantaged a number 
of important landowners in my home state. Alaska Native Corporations, 
ANCs, own nearly 90 percent of the private land in Alaska, including 
some of the most scenic and resource rich. However, although they are 
very similar to the small communal family farms that are eligible, 
subsistence-based Alaskan Native communities are ineligible for these 
important new tax incentives. For thousands of years, Alaska has been 
home to Native communities, whose rich heritages, languages, and 
traditions have thrived in the region's unique landscape. Members of 
Alaska Native communities continue to have a deeply symbiotic 
relationship with the land even today. Much like their ancestors, many 
Native Alaskan communities engage in

[[Page S9379]]

traditional subsistence activities, with nearly 70 percent of their 
food coming from the land or adjacent waters. For many communities, 
subsistence is an economic necessity considering both the lack of 
economic development and the cost and difficulty involved in purchasing 
food. For example, in Kotzebue, a community in Northwestern Alaska, 
milk costs nearly $10 per gallon. In Buckland, a village home to 
approximately 400 people, a pound of hamburger, when it is actually 
available, costs $14.00.
  In Alaska, the Native Corporations have an important role to be 
stewards of the land. Their shareholders see themselves as the 
caretakers of the land and water as their ancestors have for thousands 
of years. Nonetheless, in Alaska today this means they have to balance 
the need for resource development and the need to cultivate the land 
for subsistence activities. The traditional lifestyles of Native 
Alaskans are under increasing stress from outside influences. 
Population growth and the pressure to pursue cash-generating activities 
have increased the desire for substantial development, significantly 
adding to the ecological stress on already fragile ecosystems. Without 
permanent protection, their lands could be developed in a manner that 
would destroy its ability to support the traditional ways and 
subsistence lifestyles crucial to Alaskan Native communities. Making 
use of tax incentives available to other Americans will make it easier 
for Native communities to make the right decisions for their 
shareholders.
  Today, Alaska Native communities are not eligible for the 50 percent 
deduction available to individuals because they are federally chartered 
as C corporations under the Alaska Native Claims Settlement Act of 
1971, ANCSA. This leaves Alaska Natives without the ability to convert 
to an eligible entity as other landowners can. In addition, most Alaska 
Native Corporations do not have sufficient gross income from the trade 
or business of what is considered traditional farming to be eligible 
for the 100 percent deduction available to qualified farmers or 
ranchers. This is in spite of the fact that as a group the Alaska 
Native shareholders of Alaska Native Corporations receive far more in 
subsistence benefits than they receive in income from the Alaska Native 
Corporation. As a result, Alaska Native Corporations do not have the 
same ability to offset the cost to permanently protect their 
properties, which contain important wildlife, fish, and other habitats, 
through donations of qualified conservation easements.
  The bill I am introducing with Senator Murkowski will allow Alaska 
Native Corporations to protect these important wildlife habitats, many 
used for subsistence, by providing an enhanced deduction for qualified 
conservation easements. The legislation modifies Section 170(b)(2) of 
the Internal Revenue Code by creating a new subsection that provides 
Alaska Native Corporations with a deduction for donations of certain 
qualified conservation easements. In order to be eligible, a qualified 
charitable conservation contribution must: (1) otherwise qualify under 
Section 170(h)(1); (2) be made by a Native Corporation; and (3) be land 
that was conveyed by ANCSA. Under Section 170(b)(2)(iii)(I), ``Native 
Corporation'' is defined by ANCSA, section 3(m). Under Section 
170(b)(2)(i), the maximum deduction limit would be set at 100 percent 
of the taxpayer's adjusted gross income. If the taxpayer has deductions 
in excess of the applicable percentage-of-income limitation, Section 
170(b)(2)(ii) would allow the taxpayer to carry-forward the deduction 
for up to 15 years.
  Congress must act to assist Alaska Native communities in permanently 
protecting their culturally, historically, and ecologically significant 
land, preserving the communities and their rich traditions in the 
process. I urge my colleagues to support this important legislation.
                                 ______