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A proposal to change the estate tax code to keep more farms and ranches intact is back after U.S. Sen. Mark Udall reintroduced a bipartisan bill last week that never materialized in 2010.

The American Family Farm and Ranchland Protection Act would help families stave off the pressure of selling, dividing or developing their farms and ranches when bequeathing them to the next generation. As the law is currently written, if a conservation easement is placed on a property 40 percent of the value of the land can be exempted from the taxable estate. The amount is capped at 0,000. But under Udall’s proposal, the exclusion rate would rise to 50 percent of the total value of the land and cap it at million, providing tax relief should families designate it for agricultural and conservation use.

A ranch near Old Snowmass. (Photo by Troy Hooper)

“Colorado’s farmers and ranchers are the custodians of our rural and natural heritage, but outdated exemptions in estate tax law are sometimes forcing the loss of valuable agricultural lands,” Udall, D-Colo., said in a press release. “My bill would make a simple fix to our tax code to help make it more consistent and fair, while encouraging more robust conservation of our open spaces.  More important, it will encourage families to permanently protect the natural value of their lands through conservation easements so that they can be handed down to the next generation.”

Sen. Mike Crapo, R-Idaho, is a co-sponsor along with Sen. Michael Bennet, D-Colo, Al Franken, D-Minn., and Amy Klobuchar, D-Minn., Benjamin Cardin, D-Md., and Sheldon Whitehouse, D-R.I.

“Some of Colorado’s most important wildlife habitats, watersheds and prairies are held by private farmers and ranchers, and we should make sure we give them the tools they need to protect these natural treasures for generations to come,” Bennet said. “This bill would provide estate tax relief for family farms in Colorado and provide necessary incentives to encourage these landowners to protect their lands through conservation easements.”

The senators say the bill has broad public support, including that from the American Farm Bureau, U.S. Cattlemens Association, Defenders of Wildlife, Land Trust Alliance and the Nature Conservancy.

The American Family Farm and Ranchland Protection Act was first introduced on July 22, 2010, and referred to the Committee on Finance, but it never made it out of committee. When the session ended at the end of the year, the bill basically died on a vine and had to be reintroduced this year.
 

The Colorado Independent

A House subcommittee is scheduled to approve legislation to dismantle an array of federal programs aimed at helping homeowners avoid foreclosure. Among the programs the panel would end is the Obama administration’s troubled Home Affordable Modification Program (HAMP).

The House Financial Services Committee’s insurance, housing and community opportunity subcommittee is set Thursday to take up four separate bills.

“We need to break down barriers that have delayed the housing recovery, including expensive and ineffective government programs that have failed to help homeowners. Unfortunately, these programs were set up in haste, executed poorly, and have done little to restore stability in the marketplace,” says subcommittee Chairwoman Judy Biggert (R-Ill.). “A government program that spends more to save a single borrower than it costs to buy a home is no help at all – it’s just a waste of taxpayer money. We need to stop funding programs that don’t work with money we don’t have.”

Among the programs the subcommittee would send to the scrap heap is HAMP, President Obama’s signature program designed to stem the tide of foreclosures that has swept the nation in recent years.

That program has been plagued with a variety of reported problems, with banks modifying only a tiny percentage of mortgages in need. The government’s effort is unlikely to come anywhere close to meeting the administration’s stated goals of offering help to three to four million homeowners. It also seems unlikely to spend anywhere near the full billion originally set aside for the program.

Meanwhile, the mortgage industry, too, has proven dysfunctional in carrying out the program.

Despite the eagerness of Republicans to kill HAMP and other mortgage-assistance initiatives, it’s not clear what, if anything, they would do to offer struggling homeowners more effective help to stay in their homes.

Industry figures show that more households than ever are in some stage of foreclosure, with more than 5 million mortgage holders now at risk of losing their homes, according to the Center for Responsible Lending (CRL), a Washington-based nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices.

Avoiding unnecessary foreclosures and encouraging loan modifications will be key to economic recovery, as the nation is sorely missing the jobs and growth provided by a healthy housing market, CRL says.

“When we’re in the midst of an epidemic, we don’t close all the hospitals—we work faster and harder to find a cure,” says CRL President Mike Calhoun. “We call on Congress to strengthen foreclosure prevention efforts by holding servicers accountable and requiring a review of every mortgage loan before foreclosures proceed.”

Mortgage loan servicers who implement HAMP and related programs are to blame for why help is so often too little too late, and without these programs, that problem would only worsen, CRL says. In fact, slipshod, unfair business practices among loan servicers are so rampant that all 50 state attorneys general and 11 federal agencies are now investigating.

CRL says it is urging Congress to defeat the bills.

Scott Nance is the publisher of the news site The Washington Current, formerly known as On The Hill. He has covered Congress and the federal government for more than a decade.

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