WORKING THE SYSTEM

Conservation Easements: Good for the Land, but Tax Losses Mount

By Headwaters News, 12-27-06

As more ranchland and open, undeveloped private land is converted into homes and communities, the loss of such "open space" is becoming a bigger issue in the West. Perhaps the best defense against such loss is the conservation easement - a legal, binding agreement by a landowner to forfeit his or her rights to develop the land. All conservation easements are a bit different, administered by different groups and written with different terms, though most provide some sort of a tax break to the landowner in exchange for giving up development rights.

These easements are widely popular conservation tools because they offer benefits to the landowner and to the land. In Montana, The Nature Conservancy and the Blackfoot Challenge are using conservation easements to help secure and keep land free from development in the Blackfoot Valley.

The two groups' goal here is to protect 88,000 acres of land in Montana now owned by Plum Creek Timber Company. So far, the Blackfoot Community Project has secured 68,076 acres, including 13,970 acres recently purchased by The Nature Conservancy of Montana. And The Nature Conservancy has options on another 20,000 acres. But once the groups secure the acres, they then have to do something with them.

So, they add conservation easements to many of the acres and then offer them up for sale. The buyers in this case range from the federal Bureau of Land Management to the state to private owners. But because of the easements, the lands can't be developed - though often there are allowances for a building or two. Funding schemes vary with the buyer and may take some time to complete, but the end result is more protection for the land.

In Colorado, conservation easements have become so popular that, since 2000, reports the Grand Junction Sentinel, around 38 land trusts have protected more than 620,000 privately owned acres, which is 183 percent more than the amount of protected private land before then. The state is number three behind California and Maine in the number of acres protected using conservation easements, which makes many conservationists very happy.

But the state may not be faring so well. An article last week from the Denver Rocky Mountain News and an op-ed today shed some light on how the state may be being shafted in the whole deal.

Since implementing its conservation easement tax program six years ago, the state has lost millions of dollars in revenue. In 2002, it was just $2.3 million, but in 2005, that lost revenue had climbed to $85.1 million - which is surely more than lawmakers intended. Additionally, says the op-ed, the state has no effective way of knowing where the lands are, or if the state is getting taken for a ride, as there is evidence that there are some who are illegally manipulating the system.

Shady deals have long lingered in the shadows of conservation easements. Congress tried to tackle the issue a few years ago when The Nature Conservancy was investigated, and the Rocky Mountain News thinks the Colorado Legislature should do the same this year.

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