Overview
Title
To amend the Internal Revenue Code of 1986 to allow a credit against income tax for qualified conservation contributions which include National Scenic Trails.
ELI5 AI
The Complete America’s Great Trails Act is a law idea that lets people get a tax break if they give money or land to help keep big, beautiful hiking trails safe and nice. It wants to see if this tax break makes these trails better and bigger and asks for a report about how it's working after a few years.
Summary AI
The bill H.R. 10521 is titled the "Complete America’s Great Trails Act" and aims to amend the Internal Revenue Code of 1986. It proposes to allow a tax credit for contributions that help conserve National Scenic Trails. This credit is determined by the fair market value of the conservation contribution and includes stipulations on how trails and trail corridors are defined. The bill also calls for a study on the effectiveness of this tax credit in expanding and improving these trails, with a report to Congress required within four years of the bill's enactment.
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AnalysisAI
General Summary of the Bill
H.R. 10521, introduced in the 118th Congress, proposes an amendment to the Internal Revenue Code of 1986. This bill seeks to establish a National Scenic Trail conservation credit, which would provide a tax credit for individuals who make property contributions for the conservation of National Scenic Trails. Specifically, the credit would be equivalent to the fair market value of the contributed property for conservation purposes related to these trails. The intention is to incentivize landowners to set aside land near designated trails for conservation, thereby helping to preserve America's natural landscapes.
Summary of Significant Issues
There are several key concerns regarding the implementation and implications of this bill:
Subjectivity in Valuation: The provision that the tax credit is based on the "highest and best use" of real property may lead to subjective valuations. This could potentially benefit larger landowners who may overvalue their property, thereby disproportionately affecting the fairness of the tax credit distribution.
Irrevocable Election: Once a taxpayer elects to take this tax credit, the decision is irrevocable. This could limit tax strategy flexibility, as taxpayers might find themselves locked into a decision that becomes less favorable due to changing circumstances.
Complex Language and Potential Misunderstandings: The detailed and complex language, particularly regarding definitions and exceptions like "trail corridor," could be challenging for the general public to comprehend. This complexity might lead to misunderstandings and incorrect applications of the law.
Exclusion of Qualified Mineral Interest: The exclusion of "qualified mineral interest" lacks clarity and may confuse taxpayers and untangle eligibility for the credit.
Denial of Double Benefits: The bill prohibits claiming both the credit and a deduction for the same contribution, which might disincentivize some taxpayers due to perceived penalties.
Financial and Administrative Implications: The mandated study on the efficacy of the credit and its possible modifications—such as making it refundable or transferrable—could incur significant administrative costs and have broad budgetary impacts.
Public Impact
Broadly, the bill aims to enhance conservation efforts by motivating landowners to help protect the natural environs of National Scenic Trails. By financially incentivizing these contributions, the hope is to see increased participation in land conservation, preserving scenic and recreational areas for the enjoyment of future generations.
Impact on Stakeholders
Positive Impacts: - Environmental Advocates and Organizations: These groups could see great benefit from increased conservation activity and resource protection. - Recreational Users: Hikers, nature enthusiasts, and tourists alike could experience enhanced and preserved trails, boosting the quality of outdoor recreation activities.
Negative Impacts: - Taxpayers and Landowners: Those who participate may face difficulties due to complex regulations and potential tax strategy inflexibility. Also, small landowners might not see as much benefit compared to those with larger properties able to achieve higher valuations. - Government Agencies: Agencies involved may bear the costs and administrative burdens associated with conducting assessments and managing any potential changes to the credit’s structure.
In summary, while the bill has clear conservation goals, its practical implications for taxpayers and administrators present challenges that need careful consideration. The intent to conserve scenic trails aligns with broader environmental goals, yet the mechanisms to achieve this require further refinement to ensure equitable and efficient implementation.
Issues
The provision for tax credit based on the 'highest and best use' of real property in Section 2 may lead to subjective and potentially inflated valuations, making it controversial in how it could disproportionately benefit larger landowners who might overvalue their property.
The irrevocability of the election to claim the tax credit, as described in Section 2, may significantly limit taxpayer flexibility, especially as taxpayers cannot adjust their tax strategy in response to changing circumstances.
The exclusion of 'qualified mineral interest' from the definition of 'qualified conservation contribution' in Section 2 is complex and may lack sufficient clarity, leading to potential misunderstandings about eligibility and compliance.
The lack of specific standards or mechanisms to determine 'impairment of significant conservation interests' in Section 2 could lead to inconsistent applications and misuse of the tax credit, undermining conservation goals.
The study required by Section 2(c) could result in significant administrative costs. The potential changes to make the credit refundable or transferable may have far-reaching budgetary implications that need careful evaluation.
The denial of double benefits, where a taxpayer cannot claim both the credit and a deduction for the same contribution as stated in Section 2, might cause confusion and be viewed as a penalizing factor for those opting for the credit.
The lengthy text and complex language used in defining 'trail corridor' and its exceptions in Section 2 may be inaccessible to lay readers, creating barriers to understanding and potential misinterpretation by taxpayers.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill states that it can be called the “Complete America’s Great Trails Act.”
2. National Scenic Trail conservation credit Read Opens in new tab
Summary AI
The bill introduces a National Scenic Trail conservation credit to the tax code, allowing taxpayers a credit equal to the fair market value of real property contributions for conservation efforts related to National Scenic Trails. This credit is subject to certain conditions, such as irrevocable elections and denial of double benefits, and it can be carried forward for up to ten years if unused; additionally, the effectiveness and potential modifications of this credit will be studied by the government.
30E. National Scenic Trail conservation credit Read Opens in new tab
Summary AI
The section outlines a tax credit for taxpayers who make contributions to National Scenic Trail conservation. A taxpayer can deduct the fair market value of a qualified conservation property interest that includes parts of a National Scenic Trail and its trail corridor, with special rules for fair market value determination and carrying forward unused credits.