In a rare but commendable act of bipartisanship earlier this year, Congress came together to pass the largest public lands package in a decade, which included the permanent reauthorization of the successful Land and Water Conservation Fund. At a time when working across party lines seems obsolete, conservation proved it is still possible to unite Republicans and Democrats.
This week, members of Partnership of Conservation (P4C), a nationwide coalition advocating for increased land conservation, are in Washington to build on this momentum and talk to lawmakers about the important tool of conservation easements. When making a conservation easement donation, an individual, family or partnership of unrelated individuals agrees to permanently give up their property’s development rights and receive a tax deduction for the fair market value of the forfeited property rights.
Current conservation easement law was passed with bipartisan support and was approved by both the Bush and Obama administrations. Between 2005 and 2015, nearly 20 million acres of land across the U.S. were conserved by individuals, families and partnerships. Clearly, the system is working as Congress intended.
As with any system, however, there is still room for improvement. There have been rare, but troubling, instances of abuse that should be addressed through commonsense solutions. Unfortunately, legislation put forth in Congress significantly misses the mark.
Senate Bill 170 was introduced in January 2019 with the intent of providing a solution. Unfortunately, this bill is based on a set of common misconceptions and should be modified to ensure that private conservation in this country will continue to thrive.
These misconceptions underlie S. 170’s proposed limit on who can receive the associated conservation easement deduction. Even though all types of landowners i.e., partnerships and individuals, are subject to the exact same rules and regulations, S.170 focuses on changing the rules for partnerships of un-related individuals and mandates a three-year holding period where there has been significant property value appreciation and yet, leaves the normal one-year holding period in place for other types of land ownership.
S.170 is right to suggest additional safeguards to curb the potential for abuse. However, if instituted, it would most certainly lead to a substantial decrease in land conservation without getting to the root cause of the rare instances of abuse. That root cause is the issue of appraisal overvaluation and has absolutely nothing to do with the type of landowner.
So, what should be done to advance conservation while reducing opportunities for overvaluation? P4C believes that we should start by enhancing the definition of a “qualified appraisal.” Additional solutions may include requiring an independent review of appraisals, and independent verification of a property’s “highest and best use” and bolstering the educational requirements to become a qualified appraiser, including requiring appraisers pass a course on valuing conservation easements and maintaining their educational status through continuing education every 24 months. Independently or taken together, all of these would lead to more accurate and well-substantiated valuations.
Limited public visibility of the benefits of conservation easement donations has also perpetuated misconceptions, and P4C believes that increased transparency by both the Internal Revenue Service (IRS) and taxpayers would benefit all conservation easement donations. For instance, to increase taxpayer compliance, our organization recommends that the IRS issue sample conservation easement deed language, clarify the rules and accept substantial compliance by taxpayers who have made good-faith efforts to comply with the law and IRS regulations.
Improving the ability of all Americans to participate in conservation could not come at a more crucial time. Currently, more than 6,000 acres of open space are lost daily to development. We must protect our country’s precious natural resources for future generations, and conservation partnerships play an important role in this mission. Let’s put an end to abuse, but let’s also make sure conservation can reach new heights.
Robert Ramsay is the executive director of Partnership for Conservation and the former president of the Georgia Conservancy.