Landowners are misusing conservation easements

CESP NEWS

March 31, 2005

Jon Christensen, CESP research fellow, and Terry Anderson, Hoover senior fellow, respond to the Feb. 26th story "Charities Fight for Easement Donors; Preservation Groups Target Legislators in Move to Save Tax Breaks" in the Washington Post.

Originally appeared in Washington Post, March 17, 2005

How to Stop Easement Abuses

By Jon Christensen
Terry Anderson, Senior Fellow at Hoover Institution, Stanford University

Conservation easements -- a legal tool used to protect private land from development by compensating landowners for development rights -- have been misused by some landowners ["Charities Fight for Easement Donors; Preservation Groups Target Legislators in Move to Save Tax Breaks," news story, Feb. 26].

Some landowners have submitted inflated appraisals so that they can take huge write-offs for donating easements to nonprofit land trusts to protect swamps and mountains that could never be developed and golf courses and private lots that have little or no conservation value.

Congress rightly is considering how to crack down on these abuses. But some of the proposals on Capitol Hill could destroy a tool that has worked to protect important wildlife habitats, open space, forests, ranchland and farmland 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 a third of the value.

The way to stop inflated easement valuations is for the Internal Revenue Service, state tax departments, county tax assessors and appraisers to police the appraisal process. The industry now has no standards for appraising conservation easements. Standards are needed. If that is not enough, appraisers may need to be certified if they want to work in the field.