OLR Research Report

December 12, 2007




By: Paul Frisman, Principal Analyst

You asked about tax incentives available to people who donate land for hiking trails, and for the funding available to purchase such trails.


A federal tax incentive and a state corporation tax credit apply to donations of open space land. In addition, state law allows (1) the Department of Environmental Protection (DEP) commissioner to prepare a model river protection ordinance and (2) river commissions to prepare river protection plans that recommend tax credits for donating open space land.

DEP has two open space acquisition programs. It purchases open space land through the Recreation and Natural Heritage Trust Program; the Open Space and Watershed Land Acquisition Grant program provides financial assistance to municipalities and nonprofit land conservation organizations that acquire land to add to a community's open space, enhance recreational opportunities, protect unique geographical features, or conserve wildlife habitat.

According to the Office of Fiscal Analysis (OFA), $12.5 million in general obligation (GO) bond funds is available in FY 08 for the Recreation and Natural Heritage Trust program. In FY 09, $7.5 million will be available, in addition to any unallocated FY 08 bond funds. Similarly, OFA reports that $11.25 million in GO bond funds is available in FY 08 and an additional $7.5 million will be available in FY 09 for the Open Space and Watershed Land Acquisition program. There are other state and federal programs that fund bicycle and hiking trails. We have attached OLR Report 2007-R-0668, which describes some of these programs and the amount of funding available.

We have attached a copy of DEP's recently issued 2007-2013 Green Plan ( which further describes the state's open space plan. We also have attached OLR Reports 2002-R-0778, 2005-R-0678, and 2006-R-0279, which provide additional information on state open space acquisition policies and procedures.


Signed into law as part of the federal Pension Protection Act of 2006 (P.L. 109-280), the conservation tax incentive expands the tax break available to landowners and farmers who voluntarily protect their land from development through conservation easements.

It increases the deduction a landowner can take for donating a conservation easement from 30% of his adjusted gross income to 50%, and to 100% for qualifying farmers and ranchers. It extends the carry-forward period that a donor can take tax deductions for a voluntary conservation agreement from five years to 15 years. We have attached a February 7, 2007 Wall Street Journal article that explains the tax incentive in more detail.

The expanded incentive applies only to easements donated between January 1, 2006 and December 31, 2007. However, legislation has been proposed in both the U.S. Senate (S. 469) and House of Representatives (H.R. 1576) to make the expanded incentive permanent.


State law provides a tax incentive to corporations that donate land to the state, a political subdivision, a water company, or a nonprofit land conservation organization. The land must be permanently preserved as open space or used as a public water supply source.

It allows corporations to take a credit against their corporation business tax equal to 50% of the value of land donated to the state, a political subdivision, a water company, or a nonprofit land conservation organization. The credit applies to taxable years beginning on or after January 1, 2000. Corporations can carry forward unused credits for up to 15 years (CGS 12-217dd). Additional information on this program can be found on this Department of Revenue Services website: (


By law, the DEP commissioner may prepare a model river protection ordinance for use by municipalities. Such an ordinance may include recommendations for tax credits for donation to appropriate parties of open space easements or land development rights (CGS 25-102xx). A similar provision in the Multiple Use Rivers Act authorizes river commissions to include such recommendations in a river corridor management plan (CGS 25-234 (f) (2)). (The Multiple Use Rivers Act authorizes two or more towns to establish a river commission to coordinate the development, protection, and preservation of river corridors.)


We have attached a 2007 analysis of state conservation tax credits, including Connecticut's, conducted by the Conservation Resource Center, a Colorado-based nonprofit land conservation organization. The report is also available on line at