Conservation Easements 101

1. Conservation Easements 101 Why is this important? What will it do for me? What can I do? Native Plants in the Landscape July 24, 2009 Milo Pyne, NatureServe

2. Acknowledgements • Land Trust Alliance http://www.landtrustalliance.org • LandScope America http://www.landscope.org/ • NatureServe http://www.natureserve.org/

3. What is an Easement? • It is a kind of property “right” – but not ownership, nor a license • Property ownership is a “bundle” of rights, some are transferred • Traditionally include rights-of-way, easements of support (pertaining to excavations), easements of "light and air", and rights pertaining to artificial waterways • Does not make the land public • Rules/laws/benefits vary widely by state

4. What is a Conservation Easement? • The most traditional tool for conserving private land, a “conservation easement” (also known as a conservation restriction) is a legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land in order to protect its conservation values.

5. Why Should I Care? • A conservation easement allows landowners to continue to own and use their land, and they can also sell it or pass it on to heirs. • If the donation benefits the public by permanently protecting important conservation resources, and meets other federal tax code requirements, it can qualify as a tax-deductible charitable donation.

6. Of mutual benefit… • A voluntary agreement; “runs with the land” • The donor and the recipient of the easement both achieve their objectives • It is also necessary that the recipient be able to guarantee that the terms of the easement are adhered to • There are costs to the recipient associated with this…

7. Terms of an Easement • It is a relationship between a willing donor or seller and a willing recipient • The landowner contributes to the public good by preserving the conservation values associated with their land for future generations. • The easement holder has a responsibility to monitor future uses of the land to ensure compliance with the terms of the easement and to enforce the terms if a violation occurs.

8. General Purposes: • To protect land from certain forms of development or use, including agricultural land, timber resources, and/or other valuable natural resources such as wildlife habitat, clean water, clean air, or scenic open space. • The right to subdivide and build on the land is separated from the other rights of ownership. • The landowner who gives up these "development rights" continues to privately own and manage the land and may receive significant state and federal tax advantages for having donated and/or sold the conservation easement.

9. Terms and conditions… • A landowner sometimes sells a conservation easement, but usually easements are donated to a land trust. • Easement values vary greatly; in general, the highest easement values result from very restrictive conservation easements on tracts of developable open space under intense development pressure. • In some jurisdictions, placing an easement on your property may also result in property tax savings.

10. Disclaimer: consult your own tax advisor! Income Tax Deductions • Landowners who donate a "qualifying" conservation easement to a "qualified" land protection organization may be eligible for a federal income tax deduction. • The value of the easement donation, as determined by a qualified appraiser, equals the difference between the fair market value of the property before and after the easement takes effect. • The easement must be: a) perpetual; b) held by a qualified governmental or non-profit organization; and, c) serve a valid "conservation purpose" - property must have an appreciable natural, scenic, historic, scientific, recreational, or open space value.

11. Disclaimer: consult your own tax advisor! About the 2008 Farm Bill • With the passage of the Farm Bill in the summer of 2008 these expanded federal income tax incentives were extended and also apply to all conservation easements donated in 2008 and 2009. • This Bill extended tax incentive legislation that applies to a landowner’s federal income tax and will: • Raise the deduction a donor can take for donating a voluntary conservation agreement from 30% of their income in any year to 50%; • Allow farmers and ranchers to deduct up to 100% of their income; and • Increase the number of years over which a donor can take deductions from 6 to 16 years.

12. Disclaimer: consult your own tax advisor! Reducing Estate Taxes • Perhaps the most important benefit, a conservation easement can be essential for passing undeveloped land on to the next generation. By removing the land’s development potential, the easement typically lowers the property’s market value, which in turn lowers potential estate tax. • Whether the easement is donated during life or by will, it can make a critical difference in one’s heirs’ ability to keep the land intact.

13. LTA - Working for a Permanent Easement Incentive! • We need to defend a 2006 tax incentive that enables family farmers, ranchers, and other moderate-income landowners to get a significant tax benefit for donating a conservation easement on their land. • It allows landowners to deduct a larger portion of their income over a longer period of time. • Unless Congress acts, this important conservation tool will expire December 31, 2009! • http://www.landtrustalliance.org/policy/taxincentives/federal

14. NC House approves easement protection bill! • On July 15, the North Carolina House voted 114-4 to pass H1080, a bill that will help protect conservation easements from condemnation for public works projects. The measure will set a higher standard for such condemnations, and it will enable landowners and easement holders to be reimbursed at full market value. It is similar to Senate Bill S600. • House bill H1080 now goes back to the Senate for concurrence with the House changes • thanks to Rep. Ruth Samuelson andto Eddie Poe and Dave Cable of the Catawba Lands Conservancy!

15. Importance to the Conservation Community… • Many state funds to support conservation land purchases have been scaled back or curtailed (e.g. Clean Water Management Trust Fund in NC) • This increases the importance of the Conservation Easement as a land protection tool!

16. Beginning to evaluate your land… • Is your land part of a conservation priority area? • Is your land adjacent to any public land or dedicated open space? • Is your land farmland near to an area of rapidly growing population? • These are factors that would help determine if it has value as a conservation easement!

17. LandScope.org can help! • LandScope America: The Conservation Guide to America’s Natural Places • www.landscope.org • Themes in map viewer include: • Conservation Priorities • Protected Areas • You can view your land in context!

20. Some additional resources: • http://www.landscope.org/action/conserve/easements/ • http://www.landscope.org/action/conserve/federal_programs/ • http://www.landtrustalliance.org/ (search site) • http://landtrust.org/ProtectingLand/EasementInfo.htm Thanks for your attention and your support of land conservation!