[Congressional Record (Bound Edition), Volume 155 (2009), Part 16]
[Extensions of Remarks]
[Page 21686]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       ALASKA NATIVE CORPORATIONS

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                             HON. DON YOUNG

                               of alaska

                    in the house of representatives

                      Tuesday, September 15, 2009

  Mr. YOUNG of Alaska. Madam Speaker, today I introduce a bill that 
would provide Alaska Native Corporations (ANCs) with parity for an 
important tax incentive that promotes the permanent protection of land 
through the charitable donation of a conservation easement.
  Primarily, conservation easements are administered under state laws 
while federal law offers tax benefits associated with them. Under 
present law, Internal Revenue Code, Section 170 allows taxpayers to 
take a deduction for charitable contributions of property through 
conservation easements.
  In 2006, Congress enhanced the charitable tax deduction for 
conservation easements in order to further protect important habitats 
and encourage such gifts. Congress temporarily increased the maximum 
deduction limit for individuals making donations of qualified 
conservation easements from 30 percent to 50 percent of the taxpayer's 
adjusted gross income. Contributions made by corporations are 
deductible for up to 10 percent of their income. In the case of a 
qualified farmer or rancher, the limitation was increased from 30 
percent to 100 percent of taxable income.
  Many farmers and ranchers are owners of ecologically significant open 
spaces, but often have limited income. The purpose of the deduction was 
to create an incentive by providing these farmers and ranchers with 
some measure of value commensurate to that of the conservation easement 
donation. Qualified farmers or ranchers are defined as non-publicly 
traded corporations or individuals whose gross income from the trade or 
business of farming is greater than 50 percent of the taxpayers gross 
income. The temporary rules were extended for two additional years by 
the recently enacted Farm Bill to contributions made before December 
31, 2009.
  Although subsistence-based Alaskan Native communities are similarly 
situated to the small communal family farms that are eligible, they are 
ineligible for these important new tax incentives because they are 
Federally chartered as C corporations under the Alaska Native Claims 
Settlement Act of 1971 (ANCSA). Moreover, Alaska Native Corporations 
have insufficient gross income from the trade or business of farming to 
be eligible for the enhanced deduction.
  Alaska Native communities continue to have a deeply symbiotic 
relationship with the land even today, relying on important food 
sources from Alaskan waters and lands. For many communities, with 
purchasing of food both costly and difficult, nearly 70 percent of food 
continues to come from the land.
  Because conservation easements are the result of decades of 
statutory, regulatory, and case law, this legislation is crafted to 
ensure it does not change the underlying state law or the underlying 
federal tax law pertaining to conservation easements. A summary of the 
legislation follows.
  The legislation modifies Internal Revenue Code, Section 170(b) (2) by 
inserting subparagraph (C), creating an exception that provides Alaska 
Native Corporations with a deduction for donations of certain qualified 
conservation easements.
  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 
percentageof-income limitation, Section 170(b)(2) (ii) would allow the 
taxpayer to carry-forward the deduction for up to 15 years.
  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.
  Section 170(b)(C)(IV) reiterates that this legislation is not meant 
to modify underlying state law or the underlying federal tax law in any 
way most notably regarding to existing property rights conveyed to 
ANC's through ANCSA. For example, while the easement would apply to the 
surface rights of the land, the Regional Corporation would continue to 
hold their subsurface rights and reserve their right to develop those 
resources through methods such as directional drilling.
  The increased maximum deduction limit would apply to all 
contributions made in taxable years beginning January 1, 2009.
  Under Alaskan law, all ANCs already have the ability to place 
conservation easements on their land, so communities that would like to 
``tie up their land'' already posses the ability to do so. 
Additionally, current law affords eminent domain powers to governments 
for imposing corridors across easements. Moreover, courts have 
repeatedly held that lands subject to conservation easements are not 
protected from condemnation proceedings.
  Expanding eligibility for the tax deduction for charitable donations 
of qualified conservation easements would give parity to Alaska Native 
Corporations, providing them with an incentive to permanently protect 
properties. In addition, the tax incentive would help provide the 
resources necessary to offset the costs of permanent protection.

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