Suggestions to improve the future of conservation easements

The Land Trust Alliance, the organization that pioneered the use of conservation easements to protect private land, states that over the past few decades, conservation easements have been responsible for the long-term protection of over 7 million acres of land in the United States. In comparison, between 1992 and 2001 the rate of development of rural land went from 1.4 million to 2.2 million acres per year, with forestland,cropland, and pastureland being the hardest hit areas (Greene, 2005).

Conservation easements have allowed for the restriction of development and thus the reduction of urban sprawl and land fragmentation, but most importantly have worked to unite the idealistic goals of conservation with the realities of private land ownership. Thus, many believe that in order to protect the ecosystems of Minnesota and the rest of the country, it is vital to work to protect this conservation tool from the abuses and other drawbacks that have become a drain on the system.

The Land Trust Alliance believes that the proposals recommended by the Joint Committee on Taxation would be extremely detrimental to the future of conservation easements. Especially detrimental may be the clause that states that landowners cannot receive tax deductions for properties on which they are living. This comprises a large part of the conservation easements that take place in the United States and thus would greatly hurt the system. The recommendations would also virtually eliminate federal tax incentives for conservation easements, which have become a driving force for conservation over the past few decades.

Due to the importance of retaining conservation easements as a viable conservation tool, and due to the potential harmful impacts of conservation easement reform, the Land Trust Alliance suggests three main changes:

1.) Strong private sector training and accreditation

An accreditation by a qualified third party can work to verify ethical practices in the formation of conservation easements. Each land trust and conservation organization can become accredited and thus present to the public a seal of approval that certifies that they are engaging in proper conservation practices.

2.) Increased enforcement

Increased enforcement of conservation easements can occur in two separate ways: first, to ensure that appraisals made of land are fair and not inflated, and that only land that has true conservation value is accepted for a conservation easement. One of the primary abuses that has occurred in the past is that inflated appraisals of land have been made in order to increase compensation that is received by the IRS. In a Congressional testimony in 2005, the Commissioner of the IRS gave several guidelines that IRS representatives will follow in order to improve enforcement. The IRS is improving methods of ensuring that conservation easement programs meet the requirements for exemption and are able to properly regulate their properties. They are also improving ways of keeping track of any easement donations that request tax exemptions, particulary open space easements, and ensuring that they meet conservation guidelines.

Second, stronger enforcement can work to ensure that all regulations stipulated by the contract of the conservation easement are met by the landowner. The Minnesota Land Trust stated that a fair portion of the violations they encountered were unintentional; thus, greater communication and greater enforcement is needed to let landowners know what activities are permissible on their land.

3.) Strong reform legislation

The Land Trust Alliance vowed to support reform legislation, as long as the standards below are met (taken directly from Capitol Hill Hearing Testimony from Land Trust Alliance President, Rand Wentworth):

-- Targets the worst abuses

-- Is cost-effective for small, all-volunteer charities

-- Protects the incentives for legitimate gifts;

-- Clarifies rules, rather than complicates them; and

-- Complements what the private sector and state governments can do to prevent abuses.

These reforms will not work to target legitimate consevation easement claims, but instead to remove the abuses and inflations that have come to hurt the conservation easement system.

The Future

Do conservation easements have the potential to be a practical solution to the problems of urban sprawl and land fragmentation in Minnesota?

Yes.

Although the system has been plagued recently by critics and abuses, and has been overhwhelmed by a recent explosion in interested landowners, it is believed by many that their benefits outweight any potential or real negative aspects. Like anything good in life, it will take time for this system to develop. Land Trusts and other conservation organizations involved with conservation easements have the potential to learn how to identify ideal sites for future conservation easements and how to continually monitor and enforce restrictions once an agreement has been made. Legislation reform and increased vigilance from these groups can help to target the exploitations of the system and only leave legitimate conservation easements that have real conservation value and work to provide the landowner with an economic reward as well as peace of mind, knowing that their land will be protected from development. Elements of flexibility can be inserted into conservation agreements, in a form that will not violate the spirit of the system but instead to allow for future landowners to adjust the agreement to meet changing demands, advances, and desires.

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