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Frequently
asked Questions about Conservation Easements
Can a conservation easement ever be amended or terminated?
Conservation easements
are assigned in perpetuity, what does this mean?
Do conservation easements
violate Wyoming's law of perpetuity?
Is it true that
conservation easements are a wedge which opens the door for increasing
environmental regulation on the property?
Will conservation
easements lower the tax base?
Will conservation
easements result in improper land planning?
Do conservation easements
require public access?
Are conservation
easements a subsidy for wealthy landowners?
Who gets the money when a
conservation easement property is sold?
How are conservation
easements valued?
How can I be assured that
a conservation easement I grant to WSGALT will not be sold or disposed of
for profit in the future?
Will a conservation
easement impact my ability to use my property as collateral in obtaining
a loan?
Can there be title
insurance on a property on which a conservation easement has been placed?
Will a conservation
easement result in the loss of my control over the management of my land?
Can I have oil and gas
development on my property if it has a conservation easement?
I have heard that land
conservation groups are elitist and a front for radical environmental
groups. Is this true?
Where does the Wyoming
Stock Growers Agricultural Land Trust get its funding?
Can a conservation easement ever be amended or
terminated?
The
Wyoming Stock Growers Agricultural Land Trust realizes that the
activities on a conservation easement property may evolve over time, or
in a manner that is presently unforeseeable by WSGALT or the landowner.
Outdated provisions can be amended as long as such amendments do not
result in a net loss in the ability of the easement maintain the features
of the property to be conserved or a substantial alter the value of the
easement.
Conservation easements can be terminated by
judicial action where the purpose of the easement can no longer be
fulfilled, and by government through an act of condemnation.
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Conservation easements are assigned in
perpetuity, what does this mean?
Perpetuity simply means
that a conservation easement cannot be amended or terminated unilaterally
by the grantor of the easement, which makes it no different from any deed
or other contract. Perpetuity is a requirement of the federal tax
law for an easement donation to be tax deductible.
Perpetuity may imply a
long time for some people. However, the land upon which WSGALT
receives conservation easements is locally, regionally, or nationally
significant for its agricultural, scenic, natural, or historic
qualities. WSGALT believes that the benefits provided through
maintaining the open character and productive capacity of such lands are
timeless, and likely only to increase in the future.
In order for WSGALT to
retain its effectiveness as an agricultural land conservation
organization its easement documents are carefully monitored to ensure
their continued relevancy. It should also be remembered that, while
a conservation easement can be amended or even terminated if necessary,
the decision to subdivide and develop a property is rarely reversible.
Do conservation easements violate Wyoming’s law
of perpetuity?
Conservation
easements do not violate the provisions of Wyoming law prohibiting perpetuities (WS 34-1-138, et
seq., and art. 1, section 30, Wyo. Const.). This is because a
conservation easement vests (becomes controlled or owned) immediately in
the holder when it is conveyed. The agreement’s intent is not to
enforce an ancient deed, but to convey one of the bundles of rights from
one party to another. The constitutional prohibition on
perpetuities addresses things such as a restriction written into a deed,
as compared to a transfer of rights.
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Is it true that conservation easements are a wedge
which opens the door for increasing environmental regulation on the
property?
WSGALT
and the landowner are the only two organizations involved with the
easement negotiations process. The landowner is responsible to
accommodate only the terms agreed to in the easement document.
WSGALT is the only entity that holds enforcement capacity. Easement agreements are carefully constructed to
maintain the property’s open character and agricultural capacity, while
providing maximum flexibility to the landowner in making land management
decisions. WSGALT was founded to maintain working ranching
landscapes, and its future success depends upon maintaining good
relations with agricultural producers and the community.
Will conservation easements lower the tax base?
Agricultural
lands in Wyoming are taxed
on their productive capacity, not on their development potential.
Lands on which WSGALT acquires conservation easements are in agriculture
and will continue to remain in agriculture, resulting in no loss in property
tax revenues.
Additionally, it has been found that rural
subdivisions are typically a drain on the county tax base because the
cost of maintaining public services (snow plowing, garbage removal, road
maintenance, etc.) typically exceeds what is generated through increased
property tax revenue. Conversely, agricultural lands generate more
in property tax revenue than they require in public services.
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Will conservation easements hamper economic
development in my community?
Current growth patterns across North America and the West show that people are choosing to
locate and remain in areas that have high natural amenities such as
scenic vista, abundant recreational opportunities, clean air, clean
water, and wildlife. Open spaces conserved through conservation
easements maintain these features and preserve the quality of life that
attract businesses and people to the region.
WSGALT is not an anti-growth organization.
We believe that Wyoming will grow in many ways that are beneficial to
the state. It is neither our intention, nor within our financial or
administrative capabilities to have conservation easements on every acre
of agricultural land in Wyoming. Additionally, there are properties and
families for which a conservation easement is not appropriate.
Will conservation easements result in improper
land planning?
Due to the long-term stewardship
responsibilities and associated expenses that accompany a conservation
easement, each easement is carefully reviewed regarding its benefits to
the public, the landowner, and WSGALT before it is accepted. WSGALT
maintains communications with local municipalities to ensure conservation
easements do not conflict with local planning. Easements have the
ability to be amended or terminated, in whole or in part, if necessary to
support a greater public good.
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Do conservation easements require public access?
No. Decisions regarding public access to
the property are left to the landowner.
Are conservation easements a subsidy for wealthy
landowners?
Conservation easements provide tremendous public
benefit through maintaining the state’s open spaces, agricultural
heritage, and natural areas that make Wyoming so special for both residents and visitors
alike.
Landowners can receive an income tax deduction
for donating a conservation easement to a land trust which is a federally
registered charity. It is true that individuals with higher incomes
are typically in a better positioned to fully utilize the income tax
benefits of a conservation easement donation than landowners who are land
rich and cash poor. However, by lowering the appraised value of the
land closer to its agricultural potential, conservation easements have
enabled many not so well-to-do landowners to pass their ranch down within
their family that otherwise would have to been broken up by high
inheritance taxes.
WSGALT is researching ways to make conservation
easements more financially advantageous for traditional ranching
families.
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Who gets the money when a conservation easement
property is sold?
The landowner gets all the money from the future
sale of easement lands. The only exception would be sales that
involve the termination of the easement agreement. Typically this
would only occur when the land is being expropriated by the government
for public purposes (building a road, school, etc.). Under such
circumstances, proceeds from the sale of the land would be divided
between WSGALT and the landowner according to the proportion of the total
value of the land that the easement represents. A qualified
appraiser determines the value of the easement when it is signed.
How are conservation easements valued?
The value of the conservation easement is
determined by a qualified appraiser according to what is called the “before
and after test”. The appraiser establishes the value of the
property without a conservation easement and after the development
restrictions have been put in place. The difference between the two
is the value of the easement. The value of conservation easements
vary widely depending on the terms of the agreement (particularly what
future development will be allowed) and the development pressure in the
area. However, conservation easements used to preserve working
ranches typically range between 30% to 60% of the property’s fair market
value.
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How can I be assured that a conservation
easement I grant to WSGALT will not be sold or disposed of for profit in
the future?
Although conservation easements are considered
both a contract and a property interest, the easement agreement does not
give WSGALT the right or ability to sell or dispose of the easement for
financial gain. The conservation easement only gives WSGALT the
authority to restrict uses of the land, as specified in the agreement,
which would compromise the property’s natural or productive values.
Additionally, WSGALT holds the right to monitor and enforce the terms of
the agreement. Easements that WSGALT holds cannot be transferred to
other organizations without the mutual consent of both WSGALT and the
landowner.
Will a conservation easement impact my ability
to use my property as collateral in obtaining a loan?
Landowners can obtain loans on a property on
which a conservation easement exists. The size of the loan will be
adjusted to the reappraised value of the property with the conservation
easement in place.
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Can there be title insurance on a property on
which a conservation easement has been placed?
Yes
Will a conservation easement result in the loss
of my control over the management of my land?
Land
use restrictions found WSGALT’s conservation easements put limitations on
future subdivision and residential and commercial development of the
property in order to retain the land’s agricultural capacity and open
character. The terms of WSGALT’s conservation easements are
designed to have minimal effect on the day-to-day management decisions of
the landowner.
Can I have oil and gas development on my
property if it has a conservation easement?
Conservation easements that qualify for federal
income tax benefits must have prohibitions against surface mining.
If the landowner does not own the surface minerals, a letter must be
obtained from a certified geologist stating the chances of mineral
development are “so remote as to be negligible.” Extraction of minerals,
including oil and gas, by techniques that have minimal surface
disturbance may be allowed. However, such techniques cannot have a
significant negative impact on the long-term natural and productive
values of the property.
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I have heard that land conservation groups are
elitist and a front for radical environmental groups. Is this true?
The Wyoming Stock Growers Agricultural Land
Trust was specifically founded to maintain working agricultural
landscapes and to focus on landowners that are dependent upon
agricultural incomes. Underlying all of WSGALT’s work is a desire
to see the continuation of the family ranch. WSGALT’s board is
composed largely of agricultural producers who have a first hand
understanding of ranching and community issues. The majority of the
board is appointed by the Wyoming Stock Growers Association. All
are Wyoming residents.
Where does the Wyoming Stock Growers Agricultural Land Trust get its funding?
Money to establish WSGALT has come from
individuals committed to the conservation of Wyoming’s open spaces and
ranching heritage. WSGALT plans to continue to receive the majority
of its funding from this source. Private individuals make up by far
the greatest proportion of contributions to non-profits (75%).
Similarly, a strong private funding base allows maximum autonomy for
WSGALT to pursue its mission. In the future, WSGALT will rely more
heavily on foundations, particularly for project expenses, including the
purchase of conservation easements.
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In cases where
the landowner has claimed an income tax deduction for donating a
conservation easement, there could be tax penalties if a landowner
persists in activities that substantially reduce the appraised value of
the conservation easement (i.e. develops land upon which he/she has
relinquished development rights)
Agriculture lands in Wyoming require an average $0.54 in public services
(fire and police protection, roads, busing to area schools etc.) for
every dollar of property tax revenue they generate. In comparison,
rural residential development requires $2.01 in public services for every
tax dollar produced.
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