6/28/2016 Land Trust Standards & Practices on Conservation - - PDF document

6/28/2016 1 Land Trust Standards & Practices

• n Conservation Easements

Standards 8, 9, 10 (drafting) & 11 (stewardship)

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• Good conservation: deals and deeds
• Enforceable conditions: drafting and baselines
• Defense: Good monitoring practices, baselines,

and landowner relationships

• Perpetuity: Stewardship reserves, amendments
• Tax policy: Qualifying transactions, Amendments

Project Selection & Planning, not specific to Easements

• 8B. Project Selection Criteria and Public Benefit
• 8C. Property Evaluation
• 8D. Project Planning
• 9A. Legal Review
• 9C. Environmental Due Diligence for Hazardous Materials
• 9D. Determining Property Boundaries
• 9F. Title Investigation and Recording
• 9G. Recordkeeping
• 9H. Purchasing Land or Conservation Easements
• 9I. Selling Land or Conservation Easements
• 9J. Transfers and Exchanges of Land or Conservation Easements

Standard 10: Tax Benefits and Appraisals

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Practice 9E: Easement Drafting

No significant change in the proposed revisions

• 9E1. Every conservation easement

a. Individually tailor it to the specific property b. Identify the conservation values being protected c. Only allow uses and permitted rights that are not inconsistent with the conservation purposes and that will not significantly impair the important conservation values d. Only include restrictions and permitted rights that the land trust is capable of monitoring and enforcing e. Include all necessary and appropriate provisions to ensure it is legally enforceable

• 9E2. Ensure each federally tax-deductible easement is consistent with

the Treasury Department regulations (U.S.C. §1.170A-14)

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Accreditation Requirements Indicator Practice 9E

Key Elements of the Indicator Practice

• Conservation easements are individually tailored to the

specific property according to a project plan or process.

• Conservation easements only permit uses and reserved

rights that will not significantly impair the important conservation values.

• Conservation easement restrictions are within the

capacity of the organization to monitor.

• Conservation easements are enforceable.

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Accreditation Requirements Indicator Practice 9E

Additional Elements of Practice Implementation

• The person responsible for drafting the organization’s conservation

easements has the necessary knowledge and experience or the

• rganization obtains legal review of its conservation easements.
• The conservation easement contains all basic elements.
• If the organization’s standard conservation easements include a

broad discretionary consent clause, then the organization has conservation easement provisions, discretionary consent policies, procedures, or guidelines, and/or amendment policies or procedures (also relates to practice 11I) that address discretionary consent.

• If the landowner intends to take a tax deduction for a conservation

easement donation or bargain sale of a conservation easement, then the conservation easement must meet the requirements of the Internal Revenue Code and Treasury Department Regulations.

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• 9E2. Ensure each federally tax-deductible easement is

consistent with the Treasury Department regulations (U.S.C. §1.170A-14)

Basic Elements:

If the landowner intends on taking a tax deduction, the conservation easement also must include the following elements required by the Treasury Department Regulations (U.S.C. §1.170A-14)

• Statement that the conservation easement is perpetual
• Identification of one or more conservation purposes as defined in the Treasury

Department Regulations

• Prohibition on the surface extraction of minerals
• Provision that the conservation easement is transferrable only to another

qualified organization that agrees to carry out the original conservation purposes of the conservation easement

• Extinguishment provisions that include the following
• In the event of termination or condemnation, the organization is entitled to proportionate proceeds

to be used consistent with the conservation purposes

• Extinguishment for unexpected changes that make continued use of the property impossible or

impractical for conservation purposes can only be accomplished by judicial proceedings

• The conservation easement must give rise to an immediately vested

property right

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The Alliance’s Draft Proposal & “Andrew’s Blogpost”

Tax Shelters aren’t Charity

Cut off Tax Shelters

• 100+ member partnerships c/n opt out
• Deductions limited to <250% partner’s

basis for 5 yrs

• Donations >$2M “reportable

transactions” Stop IRS Attacks on Good Easements

• Allow amendments (*no net private

benefit, positive conservation benefit)

• Allow corrections w/I 90 days
• Modernize “Conservation Purpose”

Change who is Audited - Establish Audit Panel Non-Adversarial Valuation

• IRS to defer to other federal agency

valuations

• Establish:
• Canadian panel, Arbitration by non-IRS

appraisers, or Baseball Arbitration Other Reforms

• No easements on golf courses
• Halve capital gains tax on conservation

sales

• Apply easement incentive to

conservation donations in fee

• Defer estate taxes on ranch, farm and

forest land until actually sold

• Remove recapture penalty for 2032A

caused by sale of easement

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