Echeverria, Milne & Mclaughlin: Keep the perpetual in perpetual conservation easements

Editor’s note: This commentary is by John Echeverria and Janet Milne, professors at Vermont Law School, and Nancy A. Mclaughlin, a professor at the University of Utah S.J. Quinney College of Law.

If you are lucky enough to own land in Vermont that provides a home for wildlife and contributes to the scenic beauty of the Green Mountain State, and you decide to convey a conservation easement prohibiting development of the land to your local land trust, do you expect your land to be conserved in perpetuity for generations to come?

You would if you looked at the website of the Vermont Land Trust, which says that a conservation easement “dedicate[s] your property, forever, to being a part of Vermont’s rural, productive, and natural landscape,” and that the “greatest reward” to families and individuals who have worked with the Vermont Land Trust “is the personal satisfaction and peace of mind that comes from knowing their land will remain forever a part of our state’s unique landscape.”

You also would think so if you consulted the website of Stowe Land Trust, which defines a conservation easement as “a legal agreement between a landowner and a land trust … that permanently limits the use of the land in order to protect its conservation values” and explains that “future owners … will be bound by the easement’s terms.”

Or the website of The Nature Conservancy, which explains that a conservation easement “can give peace-of-mind to current landowners worried about the future of a beloved property” and is “attractive” to landowners “because it reaches beyond their own lifetimes to ensure the conservation purposes are met forever.”

But a bill now before the Vermont Legislature (S.119) would change that. The bill would allow a land trust and a future owner of your land to apply to a five-person panel in Montpelier to lift the restrictions from the land and sell the property, provided the proceeds attributable to the easement are used to conserve some other property that the land trust and the panel deem, in their view, to be a higher priority. Once your easement has been terminated in exchange for protecting the new property, your “conserved” land would be open to development, even though you donated the conservation easement specifically to protect your land from development. While the bill would exempt easements that contain certain specific language from this termination process, many easements do not contain this special language because landowners could not have predicted that it would be required to ensure permanent protection of their land.

The bill would also allow a land trust and a future owner of your land to modify your easement in manners contrary to its conservation purpose (such as, for example, to permit subdivision and residential or commercial development of the land), provided, again, that the land trust and the panel decide that, in their view, protection of some other land in some other location is a higher priority.

The bill does not serve the interests of landowners, taxpayers, land trusts, or the general public in Vermont. The bill, now roughly 25 pages of dense legalese, has been revised — and made more complicated — over the course of several years in response to objections to prior versions of this proposal. But the current version still has the same basic problems that have plagued the bill from the beginning.

The bill misleads the public. It uses the benign term “amendment” to refer to the changes that the five-person “Easement Amendment Panel” could make to perpetual conservation easements. But when you read the fine print, it becomes clear that the bill would authorize “the whole or partial termination of an existing conservation easement” as well as “the substitution of a new easement for an existing conservation easement.”

Proponents of this legislation apparently would like conservation easements to be fungible conservation assets. They apparently believe that land trusts, subject to the approval of the proposed panel, should have the authority to move easements from one place to another on the landscape like so many Monopoly houses and hotels whenever such substitutions or swaps are, in their view, in the public interest. This theory suffers from a number of fatal defects.

First, such a swap process, if applied retroactively to existing conservation easements, would break the promises made to specific Vermont landowners. Landowners in Vermont have been promised that their land will be protected — not some other land that the land trust and the panel might later deem to be of higher priority. A system that would permit easements to be swapped to new lands would defeat the grantors’ original intentions as well as their legitimate expectations about how their lands will be managed over the long term. Such a system would also be contrary to the expectations of neighbors, community members, and the general public, who also believe, in no small part due to the representations made by land trusts, that land subject to a perpetual conservation easement will be permanently protected.

By breaking the promises that have been made to conservation-minded landowners, the legislation would hurt the cause of land trusts, which rely on voluntary conveyances of conservation easements. Landowners are typically motivated to convey an easement to conserve a particular farm, or forest, or meadow that has special personal significance for them. If landowners lack confidence that their land will remain protected, and realize that an easement on their property could simply become currency to finance other transactions involving other lands, many would think twice (at least) about conveying an easement.

Moreover, all charities, including non-profit land trusts, have a legal duty to use the gifts they receive for the purposes for which they were given. For example, the University of Vermont cannot use a $1 million gift made to it for the purpose of providing scholarships to students studying literature and the arts to, instead, provide scholarships to students studying business administration or computer science, even if the University’s Board of Trustees were to deem those latter pursuits to be a higher priority. Similarly, a land trust cannot use a conservation easement donated to it for the purpose of protecting a specific parcel of land in perpetuity to protect some other land, even if its Board of Trustees were to deem protection of that other land to be a higher priority. Under the law, a donor who gives a gift for a specific charitable purpose has the right to have her intentions enforced.

Finally, adoption of this legislative proposal would create a serious risk that future donors of conservation easements in Vermont could not take advantage of generous federal tax benefits available to easement donors in other states. Federal tax law requires that the conservation purpose of a tax-deductible easement must be “protected in perpetuity.” Federal tax law also recognizes that, in rare cases, changed circumstances on or surrounding a conserved property may mean that the property can no longer serve a conservation purpose. In that event, federal law authorizes a land trust to go through a judicial process to obtain approval to extinguish the easement.

Although proponents of the legislation maintain that it complies with federal requirements, a close reading of the fine print indicates that, in some respects, it does not. Moreover, if the legislation were enacted in its current form, the risk of noncompliance with the federal requirements, as well as the emotional and financial costs of dealing with an Internal Revenue Service audit would fall, not on the proponents of the legislation, but on unsuspecting charitably-minded landowners in Vermont who were willing to make gifts of conservation easements to benefit the state and their communities.

Vermonters should reject S.119 in anything like its present form.