The week of March 11, 2008, National Public Radio ran a story called "In Land Conservation, 'Forever' May Not Last" on All Things Considered.
Unfortunately NPR focused on the termination of a single Wyoming
easement, implying that all conservation easements are at risk. If you
missed the story here is the link: http://www.npr.org/templates/story/story.php?storyId=88038482.
The
Hicks v. Dowd case that NPR featured is complicated. The nuances of the
case and its implications cannot fit into a single NPR radio piece. The
Wyoming Law Review will publish a lengthy analysis of the case this
summer. See: http://uwadmnweb.uwyo.edu/law/Student_life/lawreview.asp.
Two cases about conservation easement donations to a public agency:
- Wyoming Easement Extinguishment Case (Hicks v. Dowd) | Hicks v. Dowd Facts
- Walter v. Otero County Land Trust Facts
The
land conservation community does not want to let stand the impression
that conservation easements are transitory, nor that land trusts
lightly terminate perpetual conservation easements or dispose of
fee-owned conservation land for development. The Alliance has taken
several steps to explain and address this misconception and related
issues:
Land Trust Alliance Initiatives to Ensure Permanence
The
Alliance is aware of and shares your concern about the potential
negative impact of this NPR coverage. The alliance is helping to create
good case law, educate attorneys, collect useful legal materials and
provide tools to land trusts. These steps are intended to assist the
land trust community in making all conservation easements permanent.
The Alliance is also working to help all land trusts be strong and
effective through Land Trust Standards and Practices, Rally: the National Land Conservation Conference, The Learning Center, the Standards and Practices Curriculum, and the Land Trust Accreditation Commission, an independent program of the Land Trust Alliance.
The
best way to avoid legal challenges is to prevent them. The Alliance's
training courses are building the knowledge of land trust
practitioners, helping them draft strong legal documents and implement
sound easement stewardship.
Since
August 2007, the Conservation Defense Initiative launched the Network
and initiated regular teleconference and regional conference meetings
to facilitate information sharing and problem solving among experienced
conservation leaders across the country. The online forum allows
Network members to address issues rapidly. The Alliance also
established the Conservation Defense Fund, for use by the Alliance to
intervene in precedent-setting cases, usually by filing a friend of the
court brief. Several large law firms around the country have
volunteered their services to the Fund to assist with conservation
permanence.
Also
underway is an investigation of the feasibility of conservation defense
insurance so that all land trusts can have access to money and
resources to uphold conservation permanence. The Alliance hopes by
Rally to report to members about the potential feasibility of such
insurance, including proposed policy coverage, premiums, deductibles,
claims, review and underwriting standards.
Finally,
the Alliance increased its capacity to assist land trusts with
enforcement and defense issues, dissemination and analysis of new case
law, and guidance in addressing IRS concerns.
Addressing Public Perception and Media Relations
We
all know that what is legally true is rarely accepted or appreciated by
the general public, especially if the general public hears snippets of
news articles while commuting to work or getting the kids off to
school. So the Alliance is taking proactive steps on behalf of the land
trust community to increase the public's conviction that conservation
easements held by knowledgeable, publicly accountable land trusts are
indeed permanent.
Here is what the Alliance is doing:
- Contacting
NPR to secure placement for a follow-up piece to the March 11 story
that better reflects the commitment to easement permanence of nonprofit
land trusts
- Developing a statement regarding conservation permanence, which we will submit for placement on NPR's website
- Providing spokespersons to NPR who can address the positive message that strong land trusts keep easements permanent
- Developing further talking points for the land trust community, as needed
- Informing
our members and the professional community about Alliance initiatives
to support conservation permanence and the facts of cases such as Hicks v. Dowd
The Alliance suggests to members that, in responding to this NPR story or any other piece, remember the following:
- Do not allow yourself to get pulled into the negative question: "Why aren't easements permanent when they are supposed to be?" Instead focus on the positive message: "Strong land trusts and conservation easements are essential to my community." Remember the old adage: answer the question you wished they had asked, not the one they asked.
- The
bottom line is that our best message is about the WHY of conservation
and the WHO that benefit, not the HOW it was done or WHERE or even WHEN.
- Always remember to talk about your land trust, the good work you are doing and the impact on your community.
Here are some themes to consider and echo in your own messaging:
- Strong
land trusts are critical to conserving land in communities across
America and conservation easements are one of the best ways to do so.
- Land
trusts have adopted and follow a set of professional standards and
practices that help ensure their sound operation and the permanent
protection of land. Some government holders also follow these
standards, but government holders are not required to the same rules as
land trusts.
- Conservation
easements have helped thousands of farmers and ranchers keep their land
in agricultural production and have helped communities protect the
forests, clean water, scenic views and natural and historic areas that
are important to their quality of life.
- Let me tell you a story about what a difference conservation has made to the people of my community...
- Conservation
easements work because they allow the landowner to stay on the land,
they restrict future inappropriate development and they are drafted as
legally enforceable documents that protect the natural features or
traditional uses of the land.
- The
best way for landowners to permanently conserve their land is to work
closely with an established nonprofit land trust in their community --
one that knows and follows established standards for keeping land
permanently protected.
We
cannot control what NPR may or may not run in response, but we are
requesting a follow-up story and will keep you informed of progress.
Also, please let us know if you see any local or regional media
coverage that may piggyback on the NPR story. Keep in mind the advice
to not perpetuate a story by responding too fervently or too frequently
to it.
Please
let us know if you see any local or regional media coverage that
"piggybacks" on the NPR story. We hope this is helpful, and if you have
feedback please contact Jim Wyerman, Director of Communications &
Development at 202-638-4725 x 310 or communications@lta.org.
Addressing Policy Issues
Separate from the narrow legal fact that Hicks v. Dowd
affects only government-held conservation easements is the larger
impact that the case has had, and will continue to have, on policy
development. This impact is driven both by public perception and by IRS
concerns about conservation permanence.
Despite the limited facts in Hicks v. Dowd,
the case is contributing significantly to the discussion about the
applicability of the charitable trust doctrine to all conservation
easements. It may also drive changes in the tax law to apply the same
penalties and reporting requirements to government-affiliated land
trusts as are currently applicable to publicly-supported land trusts.
Attorney General intervention in conservation easement cases has been
rare to date. Experts disagree about the advisability and efficacy of
such intervention. For more information about the charitable trust
doctrine, read the article by Nancy McLaughlin. See also, the Land
Trust Alliance research report entitled "Amending Conservation
Easements: Evolving Practices and Legal Principles," from August 2007.
It can be found on The Learning Center. You will need to login in, click on Library and search by the report title.
Ultimately,
the applicability of the charitable trust doctrine and the involvement
of Attorneys General are questions of state law.
This
debate also supports the need for additional outreach by the Alliance
and the land trust community to all government easement holders.
Alliance staff is working closely with federal government holders, and
some state holders to help them better prepare for conservation
permanence.
Addressing Practice Issues
Hicks v. Dowd
illustrates the problems with groups accepting conservation easements
that do not have the knowledge, resources or resolve to steward them.
Full implementation of Land Trust Standards and Practices,
as applicable to each individual conservation organization, is one way
to ensure conservation permanence. Land trusts can minimize risks of
conflict with careful land protection criteria, strategic conservation
planning, appropriate evaluation of conservation options, thorough
baseline documentation of conservation easement-protected land, annual
visits and good communication with landowners. The purposeful
protection of land and strategically directed conservation also will
help prevent future challenges.
The
rapid increase of land protected by private land trusts through
conservation easements makes it likely that the proposed termination
and modification of conservation easements will become more frequent.
This is particularly true as conservation easements age and as
ownership of conserved land changes. Conservation easement holders can
address these issues by adopting and implementing written policies on
conservation easement amendments, termination, condemnation and
enforcement.
Nancy
McLaughlin aptly observed that "as the cache of conservation easements
in this country continues to grow, and as those easements, the vast
majority of which are perpetual, begin to age, it will become
increasingly important to determine whether, when and how easements
that no longer accomplish their intended conservation purposes can be
modified or terminated." (Nancy A. McLaughlin, "Rethinking the
Perpetual Nature of Conservation Easements," 29 Harvard Environmental
Law Review, 422, 424 (2005) at www.law.harvard.edu/students/orgs/elr/ and at http:// learningcenter.lta.org/objects/view.acs?object_id=17089.
Equally
important is building sufficient skills in all land trusts so that
termination can be avoided. Many tools exist and more can be created,
that allow issues such as those raised in Hicks v. Dowd and in Walter v. Otero County Land Trust
to be addressed without easement termination while still preserving the
landowner relationship. Land trusts are encouraged to conduct annual
visits to conserved land, build trusting landowner relationships,
especially with successor owners, provide landowners access to
conservation education and resources, and keep sufficient records to
uphold an easement's conservation purposes.
Exercising
due diligence prior to completing a conservation transaction is also
critical. The due diligence required to satisfy the IRS requirements
for tax-deductible easements and that required to ensure permanence and
ease of stewardship often are different and require different
practices. Land trusts can learn from Hicks v. Dowd
that a prudent course of action includes a conservation with owners of
any severed mineral interest, even if the landowner has obtained the
"remoteness letter" required by the IRS. In a best-case scenario, the
mineral rights holder may agree to extinguish its rights or subordinate
them to the conservation easement. At a minimum, this conversation
serves to notify the mineral estate holder of the conservation easement
and provides an opportunity for the land trust and landowner to
convince the holder to limit its area of exploration or its extraction
activities in such a way as to minimize the adverse impact on the
conservation resources.
A
close reading of the Treasury Regulations at section 1.170A-14(g)(4)
and the examples cited indicate that further steps for severed oil and
gas interests may be required in order for the easement to qualify as a
charitable deduction. While limited, localized disturbance that does
not interfere with the overall conservation purpose is permitted, any
extraction activities that are "irremediably destructive of significant
conservation interests" must be prohibited. To be bound by the terms of
the conservation easement, the owner of any minerals whose claim
predates the easement must subordinate his or her interest in the
minerals to the easement. Land trusts must take additional steps to
minimize the adverse impact of all pre-existing legal rights on
conserved land to uphold conservation permanence.
Attorneys
can also help with better drafting of conservation easements,
anticipating potential conflicts and resolving them beforehand.
Attorneys and land trusts can help grantors and successor landowners
understand the full implications of a permanent conservation easement
before they either place an easement on their land or buy conserved
property.
In
addition, for those unanticipated dilemmas that often occur with a
permanent conservation easement, there is a critical middle ground in
response to conflicts, such as those shown in the two cases above.
Experienced land trusts understand that conflict resolution does not
have to result in either land trust capitulation or aggrieved
landowners. There can be a satisfactory solution for all that upholds
conservation easement purposes, complies with the law and addresses
landowner concerns. Knowing how to balance those issues and being
expert in addressing problems and finding solutions are the hallmarks
of effective conservation organizations.
When
voluntary solutions fail, land trusts and their attorneys also must be
prepared to defend easements in court if necessary. For many land
trusts without sufficient funds for defending easements, the cost of a
single lawsuit could threaten the land trust's survival. Congress and
the IRS have both raised questions about the ability of land trusts to
defend their easements. Currently, land trusts have no conservation
defense insurance available. If a land trust fails to properly defend
an easement, it could result in bad case law that may jeopardize
easements held by other organizations across the United States. To
address these threats, it is essential for all conservation easement
holders to exercise leadership to ensure the permanence and quality of
land conservation. Implementing Land Trust Standards and Practices is one method to accomplish this goal. Working with the Alliance on collective conservation defense in another.
It is worth noting that several government agencies have adopted Land Trust Standards and Practices
and are managing conservation easements and landowner requests
responsibly and effectively. These groups are to be applauded and used
as models for government conservation everywhere on the thousands of
conservation easements and fee-owned land under the care of local,
state, and federal government.
Conclusion
The
land trust community and the Alliance are working to make all land
trusts strong and all conservation permanent. As the work of land
trusts becomes more visible, however, new threats to conservation
easements and fee-owned properties will occur. These threats may come
from successor landowners, neighbors or others in the community who do
not share the conservation vision of the original grantor, or from lack
of public confidence in the permanence of conservation.
The
best way to prevent and prepare for challenges to conservation easements
and land trusts owned land is to implement good practices, as defined
in Land Trust Standards and Practices.
How a land trust responds to a potential violation or to a landowner
request, especially for amendments or termination of a conservation
easement, affects the enforceability of that easement and potentially
all other easements. It also affects the public trust and confidence in
conservation as a whole as demonstrated by the NPR feature on the
Wyoming easement termination.
Conservation
easements are new legal tools, and the enabling statutes have not been
in place long enough for the development of a full body of case law. As
the first cases make their way through state court systems, they are
likely to be cases of first impression. States without case law on the
topic will look to those states to inform their decisions. It is
important that land trusts work together to defend conservation
permanence and build a strong body of favorable case law in every state.
Conservation
organizations concerned with the credibility and sustainability of
conservation, therefore, may want to do everything possible to ensure
good practices and sound policies and implement their programs to
uphold conservation permanence.
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