The News Desk is a collection of news, notes and breaking items affecting the Fredericksburg community.
Committee kills Stuart’s tax credit bill
RICHMOND–As a senator from the Fredericksburg area, Sen. Richard Stuart probably doesn’t come up against coal mining interests that often.
After all, Stafford County is some 400 miles from Southwest Virginia’s coalfields.
But at least one lobbyist made the drive Wednesday to protest Stuart’s bill that would have barred anyone taking a land preservation tax credit from also retaining the mineral rights on that land.
Concerns about coal ultimately killed Stuart’s bill in the Senate Finance committee Wednesday.
Stuart proposed the bill as the potential for oil and gas drilling—fracking—in the Northern Neck, Caroline and the Middle Peninsula gains attention.
As of last October, a Texas company had secured leases for mineral rights from landowners of more than 80,000 acres in King George, Westmoreland, Caroline, Essex and King and Queen counties.
Stuart’s bill didn’t prevent anyone from putting land in a conservation easement, he said. But it would have made those landowners choose between retaining mineral rights—from which they could still profit if, say, they leased that land for fracking—or taking a tax credit.
“It just seems patently unfair to me” that a landowner could take a tax credit for conserving land, yet still profit from drilling under that land, Stuart said. “You just shouldn’t get a tax credit when you’ve reserved that industrial application.”
Virginia has promoted land preservation—landowners placing their land in conservation easements—by offering tax credits to landowners who protect their land. In an easement, the landowner continues to own the land, but development of that land is barred or limited in perpetuity.
The program, which started in 2000, is popular. The number of acres put into easements and the tax credits taken on them vary widely by year. In 2012, the last full year in which numbers are available from the tax department, 43,347 acres were conserved, with an appraised value of more than $146 million total, and $58.4 million in 213 credit requests. The state offers a 40 percent credit on the conserved land’s value.
In total since 2000, the program has seen 634,596 acres permanently protected through 2,982 land donations, according to a report on the credit late last year. The value of that land is about $3.5 billion, and landowners received $1.3 billion in tax credits.
Stuart said the way fracking works, he fears that the open space preserved under the conservation easement “now becomes a vast area of industrialization.”
Sen. Frank Wagner, R–Virginia Beach, disagreed, saying that fracking requires “a very small imprint not the industrial operation with smokestacks and all that.”
Some lawmakers and opponents of Stuart’s bill feared it would discourage landowners from putting their land into conservation easements.
“This might have a deterrent effect a very chilling effect on this very good tax credit,” said Clark Lewis of the Virginia Coal and Energy Alliance.
Donnie Ratliff of Alpha Natural Resources—based in Southwest Virginia—said that company actually owns conservation easements in Wise County.
“This would impede transforming land and working out easements,” Ratliff said.
A Virginia Outdoors Foundation representative said that group holds two-thirds of the easements in the state. They have very restrictive language, he said, for easements given to them, to control what landowners can do with that land after they donate it. The VOF had no position on Stuart’s bill, however.
Senators on the committee did.
“I think this is going to be a detriment to our coal mining industry,” said Sen. Bill Carrico, R–Grayson.
The committee voted 8 to 6 to kill Stuart’s bill.
Chelyen Davis: 804/343-2245