Improving Easements

Conservation easements have been a popular way to protect land in Maine and across the country. A proposal being considered in Congress would make such easements and land donations much less attractive to donors, likely stalling conservation efforts. A better approach would be to thwart fraud through accrediting land trusts, raising standards for land appraisers and increasing penalties on those who inflate the value of land.

Under current IRS rules, landowners can write off as a charitable contribution the value of development rights on their land if they donate an easement on the property stipulating that it cannot be developed. If they donate land, they can take its appraised value as a one-time tax deduction.

Congress’ Joint Committee on Taxation has proposed cutting the tax deduction that a landowner can take for giving up development to just 33 percent of the value of those rights, rather than the full value. If land is donated, its value would be based on its purchase price, not its current appraised value, under the committee’s fix. Along the Maine coast, that could mean a parcel that has been in a family for generations would only net a tax benefit of a few thousands dollars when the land is worth millions. The committee would also ban tax breaks if the donor continues to live on the land. These provisions would diminish a family’s desire to preserve land rather than sell it to a developer. More than 1.5 million acres are now covered by easements in Maine, the state with the largest number of land trusts in the country.

Fortunately, the Senate Finance Committee, which investigated The Nature Conservancy after reports that it mishandled land transactions, has come up with a more reasonable approach. Among its recommendations is an accrediting system for conservation groups. The Land Trust Alliance, which represents more than 1,300 local groups, has developed a set of detailed standards and practices for such groups to follow. It says that 94 percent of land trusts said they would pursue such accreditation.

The Senate committee, of which Maine Sen. Olympia Snowe is a member, also called for better monitoring and enforcement of easements, something that is already required by the Land for Maine’s Future program and many large-scale easements here.

The Land Trust Alliance has also suggested tougher licensing requirements for appraisers who handle conservation land and for higher penalties on appraiser who inflate the value of land. It also calls for an end to easements on golf courses and backyards.

Some groups that support private property rights also favor such changes. “The beauty of conservation easements is that they provide a way for the public to help pay for environmental protection on private land. Although some problems need to be fixed, Congress should be careful not to gut one of the few private efforts that, for the most part, works well for grassroots conservation,” Terry Anderson, executive director of the Property and Environment Research Center, wrote in a recent paper.

Easements can be a good way to preserve land. Ensuring that they are placed on land that really needs protecting and that they are fairly valued and monitored will enhance their benefit.