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 bill S. 5641 wants to give people a kind of "thank you" in the form of a tax break when they help keep special paths in nature, called National Scenic Trails, safe and pretty. This tax break is like a coupon that you can use later if you don't need it right away.

Summary AI

The bill S. 5641 aims to amend the Internal Revenue Code of 1986 to include a tax credit for qualified conservation contributions that preserve National Scenic Trails. This tax credit would be equal to the fair market value of the contributions related to National Scenic Trails and their corridors, and comes with specific definitions and rules for eligibility. The bill also calls for a study to assess the effectiveness of this credit in expanding and enhancing the National Scenic Trails, with a report due in four years. Additionally, it includes provisions for unused credits to be carried over to future years and discusses rules for the continued use of the property involved.

Published

2024-12-20
Congress: 118
Session: 2
Chamber: SENATE
Status: Introduced in Senate
Date: 2024-12-20
Package ID: BILLS-118s5641is

Bill Statistics

Size

Sections:
3
Words:
1,445
Pages:
7
Sentences:
25

Language

Nouns: 453
Verbs: 90
Adjectives: 98
Adverbs: 8
Numbers: 45
Entities: 85

Complexity

Average Token Length:
4.20
Average Sentence Length:
57.80
Token Entropy:
5.01
Readability (ARI):
30.75

AnalysisAI

General Summary of the Bill

The proposed legislation, known as the "Complete America’s Great Trails Act", aims to amend the Internal Revenue Code of 1986. The bill introduces a new tax credit, the National Scenic Trail conservation credit, which offers taxpayers a financial incentive for making contributions toward the conservation of National Scenic Trails. This credit equates to the fair market value of the real property interest dedicated to such conservation efforts. The primary intention of this bill is to encourage private investment in preserving and completing these significant trails, which are considered valuable national resources.

Summary of Significant Issues

Several issues within the bill could lead to complexities and challenges in its implementation. First, the determination of the "fair market value" for conservation contributions based on the "highest and best use" of real property might result in subjective and potentially inflated valuations. This could affect taxpayer equity and transparency. Additionally, the bill's restrictions, such as the irrevocable election to take this tax credit, might limit taxpayers' flexibility in managing their tax strategies. The denial of the ability to claim a deduction if the credit is elected might also penalize certain taxpayers.

Furthermore, the bill lacks clear guidelines on evaluating impairment of conservation interests, potentially causing inconsistencies in its application. Another concern is the exclusion of "qualified mineral interest" without clear explanation, which could lead to confusion. The requirement for a study on the credit's efficacy poses potential significant administrative costs.

Broad Public Impact

The implementation of this bill might affect the general public by encouraging more private contributions towards environmental conservation, particularly in enhancing and preserving scenic trails across the country. The trails serve not only as recreational amenities but also as critical pathways for biodiversity conservation. However, while the bill may stimulate increased maintenance of these trails, its financial benefits might largely favor wealthier individuals or corporations that can afford such contributions, possibly creating socio-economic disparities.

Impact on Specific Stakeholders

For taxpayers capable of making substantial conservation contributions, this bill provides a potentially lucrative tax incentive, allowing them to claim a credit equivalent to the value of their land donations. This could result in increased private participation in public land conservation.

Landowners along National Scenic Trails who partake in this program might face challenges with maintaining the utility of their land, considering the constraints and exemptions detailed in the definitions, such as "trail corridor." Moreover, taxpayers who misjudge the provisions or face fluctuating incomes might encounter challenges due to the irrevocable credit election and complex carryforward provisions.

From an administrative perspective, government agencies tasked with evaluating the efficacy and potential modifications to the tax credit may face increased workloads and resource allocation requirements. This could divert focus and funds from other critical governmental functions.

In conclusion, while the "Complete America’s Great Trails Act" could enhance conservation efforts and expand the nation's scenic trails, careful consideration of its socio-economic implications, administrative burdens, and taxpayer equity issues is crucial for balanced and effective implementation.

Issues

  • The provision for determining the fair market value of a National Scenic Trail conservation contribution based on the 'highest and best use' of the real property could lead to subjective and potentially inflated valuations, impacting financial transparency and taxpayer equity. (Section 30E(c)(1))

  • The allowance of a tax credit under this bill may favor individuals or entities with the financial means to participate in such conservation contributions, potentially creating socio-economic disparities and raising ethical concerns about equitable access to tax benefits. (Section 2(a))

  • The irrevocable nature of the election to take the National Scenic Trail conservation credit might limit taxpayer flexibility in adjusting their tax strategy, leading to potential financial disadvantages for taxpayers. (Section 30E(c)(2))

  • The provision that denies deductions when an election under this section is made could penalize taxpayers who choose this credit, potentially leading to financial disadvantages for some taxpayers. (Section 30E(c)(3))

  • The lack of specified mechanisms or standards for determining impairment of significant conservation interests could lead to inconsistent applications, affecting legal enforcement and clarity of the bill. (Section 2(b))

  • The exclusion of 'qualified mineral interest' from the definition of 'qualified conservation contribution' without clear rationale or explanation adds complexity and may lead to legal confusion. (Section 30E(b)(4))

  • The study requirement in subsection (c) to evaluate the efficacy of the credit and its possible refundability or transferability implies potential significant administrative costs, impacting financial resource allocation. (Section 2(c))

  • The wide potential range for 'trail corridor' definition, with exceptions allowing distance adjustments, could lead to inconsistent application and potential disputes over real property valuations. (Section 30E(b)(3))

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.