I would first like to give the committee a brief introduction to the Montana Land Reliance. Founded in 1978, we are a privately-funded, non-profit land trust that utilizes donated conservation easements and other tools to permanently protect Montana's private lands. With the help of 324 landowners, we have been able to protect just over 322,000 acres of private land in Montana. This represents roughly 20 percent of all protected land by local, state and/or regional land trusts across the United States. Within that acreage we have permanently protected 620 miles of stream and river frontage, over 116,000 acres of elk habitat, over 5,200 acres of wetlands and over 131,000 acres in the Greater Yellowstone Ecosystem. Again, all of this protection has been completed with private conservation easements. And our customer base is typically ranchers and farmers.
The private landowners that make up our customer-base are facing incredible economic and estate pressures to develop their land. A vast majority are what we call "land rich, but cash poor." They typically own a tremendous resource that they cannot afford to keep.
Although the following statistics are Montana-specific, as you are all aware, these issues and problems are not inherent to our state. In 1970, Montana had fewer than 700,000 residents. By 1995, the state's population had risen to just over 870,000 and is projected to top one million by the year 2000 or 2001. At first glance I realize this does not seem to be an overwhelming amount of growth. However, this growth has not been evenly dispersed across the state. Certain areas, especially those around designated wilderness areas and along riparian zones are undergoing population increases as high as 25 percent. In other words, people are moving into the prettiest places they can find. And these places are usually the ones that are the most fragile or are our most productive agricultural lands.
For example, the amount of land in agriculture declined by more than three million acres between 1974 and 1994 and the number of farms and ranches has declines by more than 11 percent in the same time period. In Montana, over the 10 year period between 1983 and 1993, 11,000 subdivision proposals were reviewed by state and county government. These numbers do not include 20 acre or larger parcels, which until 1993, required no subdivision review. And that type of development skyrocketed during that period and is still high today.
Most counties view rural subdivision development as a positive economic influence on their communities. Interestingly, however, a study done by Montana State University and the Greater Yellowstone Coalition found that for every dollar of revenue raised from new rural residential property, the county government and school districts spent $1.47 for roads, public education, police and fire protection and other services. Conversely, agricultural land and open space required only 25 cents worth of service for every dollar it contributes.
Simultaneously, land values in Montana and the West have risen dramatically. Recent news accounts in Montana show 10-year property tax appraisal increases averaging 43 percent! The economic pressures to convert open and agricultural land to residential property has intensified significantly in certain areas of Montana, and, I think it's safe to say, throughout the West.
The good news is that Montana leads the way in private land protection through conservation easement. As of 1997, Montana had permanently protected over 670,000 acres. The bad news is that this represents only about 1 percent of the 55 million acres in private ownership in the state. And the average age of these owners is 59 lid. Over the estimated 20 year period this amount was protected well over 3 million acres left agricultural production or open space and have either been developed or are headed that way. In the next ten to fifteen years, given the average age of ownership of private lands in Montana, we are going to see a huge turnover in land. Depending on the tools available to the conservation and trust community much of this land will be threatened. Currently, the battle to protect open space in Montana is being lost at a rage of roughly 5 to one and in some regions, by a margin of 8 to 1.
So, what does all this mean? Why should anyone be concerned about a place or a region that has so much land and open space? For several reasons, the most important being that Montana and, generally, the West, has a unique opportunity to make a difference before it's really too late. Before we lose all of our most precious agricultural land, river frontage, fisheries, habitat and open space. We are not here today to say that development and growth are evil. They are not. We are here today to ask as you debate these issues that you give the private land trust community the additional tools to compete and fight against inappropriate development. Give us the added strength to give our farmers, ranchers and private landowners more options to subdivision as an economic way out.
The initiatives and ideas we present today will, we believe, substantially help in protecting the open lands of our heritage. Should these additional tools be made available, we are confident, based on our work last year, that we could immediately double and, over the next few years, triple our conservation output each year.
All of these additional tools could be easily added to the current construct of conservation easement law, or 1 70(h) of the Tax Code. These ideas are simple and private and if made quickly will, we believe, have an immediate, positive impact on private land conservation in this country.
First, a majority of our customers cannot use the income tax deduction benefit associated with the donation of a conservation easement. We are fast becoming a tool only the very wealthy can use. We propose a tax credit of between $50,000 and $1000,000 if the landowner did not have
the means to use the deduction. We would proposes that to qualify for this tax credit, 50 percent of the landowner's total income be derived from agriculture.
Second, allow the same deductibility for C-corporations as for all other forms of business. Currently, a ranch in a C-corp structure may only deduct 10 percent of net income as opposed to 30 percent for all other types of ownership. We feel this tool alone would have allowed us to protect and additional 20,000-30,000 acres in Montana last year.
Third, the Congress in 1997 wisely increased the Unified Tax Credit and, particularly with conservation easements, gave additional estate tax relief if the landowner lived within a 25 mile radius of a metropolitan (defined as a county with 50,000 or more residents) or wilderness area. This boundary should be larger to not only to give us added tools for land farther out but to also reward the landowner who is willing to protect his or her land.
Any public monies raised for conservation easements should be matched funds to allow the government's money to go farther and do more conservation. We would recommend a 2 to 1 match.
Furthering land conservation is the right thing to do. We applaud the committee for its role and eventual action. Landowners, generally, are also interested in doing the right thing. They don't want to chop up their land, but we need to be able to offer them reasons not to when they are faced with huge economic and estate tax pressures. We need to be able to compete in that atmosphere. We need to be able to compete with rural developers. We have a great opportunity, especially in the West, to make a major impact on land and open space conservation. I hope we will be given the tools to do just that. Thank you Mr. Chairman and members of the committee.