One of the most useful,
cost-effective methods of conserving land in America is in serious
crisis. A series of scandals has revealed major abuses of
conservation easements — a legal tool increasingly used to
protect private land from development by compensating landowners
for development rights.
It is true that some landowners
who donate easements to nonprofit land trusts have used inflated
appraisals to take huge tax write-offs at the expense of taxpayers.
Others have used easements to protect swamps and mountainsides that
could never be developed, or golf courses and private lots that
have little or no conservation value.
Congress is now
rightly considering how to crack down on these abuses. But rather
than fixing the problems, some of the proposals could destroy a
tool that in most cases has worked well. It has protected important
wildlife habitat, open space, forests, ranch and farm lands on more
than 17,000 properties totaling more than 5 million acres across
the country.
A Joint Committee on Taxation report
proposes cutting the tax deduction that a landowner can take for
donating a conservation easement from the full value of the
development rights to just 33 percent of the value.
But
cutting tax incentives is the wrong way to prevent inflated
appraisals. In the first place, reducing tax deductions would
discourage some of the most valuable conservation easements, such
as those used by ranchers to keep land in agriculture.
Because most ranchers and farmers are not in a position to take
large tax deductions in a short period of time, it actually makes
sense to extend the period over which they can take tax deductions.
A proposal to do this is before Congress, and it should be
approved.
If the goal is stopping inflated easement
valuations, however, then the Internal Revenue Service, state tax
departments, county tax assessors and appraisers need to police the
appraisal process. Appraisers should be held accountable for their
determinations, but now, the industry has no standards for
appraising conservation easements. Standards need to be set. If
that is not enough, it may be necessary to require certification
for appraisers.
If the appraisal industry cannot fix this
problem, then stronger governmental policing may be necessary. That
is already happening in South Carolina where the department of
revenue is working with the IRS to audit conservation easements.
The department has reviewed 51 conservation easements, covering
32,000 acres, valued at more than $255 million.
Land
trusts also can play a role in fixing the problem. They want
nothing more than to help drive bad actors out of business before
they take good conservation down with them. This explains why
conservationists have applauded appraisal audits.
Congress should recognize and encourage self-regulation among
conservationists and land trusts. Recent research on conservation
easements, conducted by Dominic Parker of the Property and
Environment Research Center, shows that self-interest may be the
most cost-effective way to curb abuses and encourage conservation.
Parker studied conservation easements given to 1,250 land
trusts around the country, and his results suggest that most land
trusts are efficient conservation producers. Land trusts hold
easements on properties for which the costs of enforcing such
easements against violations are fairly low. For example, easements
for open space and scenery are easily enforced, especially when
ranchers and farmers own the land and want to preserve their
heritage.
On the other hand, land trusts tend to buy land
for restoration, rare and endangered species habitat and
recreational access. Easements for these purposes are costly to
enforce.
Parker also discovered that self-regulation is
already working to some degree. He found that land trusts that are
part of the Land Trust Alliance, an umbrella organization that
encourages land trusts to adhere to standards and practices,
generally are more efficient.
Still, the Land Trust
Alliance recognizes that it could help more by moving from
voluntary compliance to an accreditation program. Congress could
give a real boost to this approach by requiring landowners to
donate easements to accredited land trusts if they want to qualify
for tax deductions.
The beauty of conservation easements
is that they provide a way for the public to help pay for
environmental goods produced by private organizations on private
lands. Though there are problems that need to be fixed, Congress
should be careful not to gut one of the few private initiatives
that, for the most part, works well for grassroots conservation.
Jon Christensen and Terry Anderson are
contributors to Writers on the Range, a service of High
Country News (hcn.org) Christensen is a research fellow
at the Center for Environmental Science and Policy at Stanford
University in California; Anderson is a senior fellow at the Hoover
Institution at Stanford, and the director of the Property and
Environment Research Center in Bozeman,
Montana.
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