echeverria, milne & mclaughlin: straight talk on
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3/15/14 9:32 AMEcheverria, Milne & Mclaughlin: Straight talk on conservation easements - VTDigger
Page 1 of 5http://vtdigger.org/2014/02/23/echeverria-milne-mclaughlin-straight-talk-conservation-easements/
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ECHEVERRIA, MILNE & MCLAUGHLIN:STRAIGHT TALK ON CONSERVATIONEASEMENTS
COMMENTARYCOMMENTARY FEB. 23, 2014 2 COMMENTS
Editor’s note: This commentary is by John Echeverria and Janet Milne, professors at Vermont LawSchool, and Nancy A. Mclaughlin, a professor at the University of Utah S.J. Quinney College of Law.
In response to our commentary in VTDigger on Feb. 10 addressing S.119, Gil Livingston,president of the Vermont Land Trust, provided his own commentary in rebuttal on Feb.11. Mr. Livingston offered various bromides apparently designed to allay concerns thatlegislators, easement donors, land trust supporters, and members of the general publicmay have about S.119 as a result of reading our criticisms. With all due respect, we thinkVermonters deserve more direct responses to the serious concerns we have raised aboutthe bill.
First, Mr. Livingston repeatedly refers to the bill as involving “amendments” toconservation easements, implying that the bill only permits modifications to individualeasements that would not destroy the easements or alter their fundamental character. Butthe bill specifically defines “amendments” to include “the whole or partial termination ofan existing conservation easement” and “the substitution of a new easement for anexisting conservation easement.”
Thus, S.119 would allow a land trust to use the process established by the bill to terminatean easement that a conservation donor gave to the land trust to permanently protect hisor her land, provided the land trust gets paid and uses the money to conserve other landsomewhere else. This would defeat the objectives of individual easement donors whointended to permanently protect specific lands that have special significance to them andtheir communities. Mr. Livingston needs to own up to the fact that the bill he supportsinvolves much more than the benign easement “amendments” he alludes to in hiscommentary.
Second, Mr. Livingston does not respond to our objection that the bill would represent abreach of the fiduciary duty a land trust owes to its conservation easement donors whenthe land trust accepts easement gifts. Based on his silence, we understand Mr. Livingstonto take the position, expressly adopted by other supporters of this bill, that a land trust
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3/15/14 9:32 AMEcheverria, Milne & Mclaughlin: Straight talk on conservation easements - VTDigger
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While the land trust’sdecision couldsubsequently be appealedto the five-person panel,S.119 would require thepanel to apply a“presumption” that theland trust’s decision wasin the broadly defined“public conservationinterest” and should beupheld. This is the worstkind of insider process –the very antithesis of anopen, democratic Vermonttown meeting.
has no legal duty to uphold a conservation easement donor’s goals once the land trust hassecured the easement gift from the donor and, instead, can seek to terminate the donor’seasement so that it can pursue the protection of other lands.
We think that position is wrong as a matter of law – not to mention disheartening to themany easement donors who think they can rely on a land trust to uphold theirconservation objectives. In contrast with Mr. Livingston’s position, other leaders in theland trust community recognize that land trusts do owe a fiduciary duty to donors ofconservation easements. Legislators, the general public as well as prospective futuredonors of conservation easements need to understand that this bill is built on theproblematic premise that land trusts have no legal duty to uphold the wishes of easementdonors.
Third, Mr. Livingston does not respond to our concern that passage of this legislationwould raise a serious risk of rendering easement donations in Vermont ineligible for thefavorable federal tax incentives available to easement donors in other states. Nor does heacknowledge that the risk of noncompliance with federal tax rules and the emotional andfinancial costs of dealing with the Internal Revenue Service on audit would fall, not onhim or the Vermont Land Trust, but on unsuspecting Vermont landowners makingeasement donations.
A few years back, in response to reports of abuse inColorado of the federal incentives available toconservation easement donors, the Internal RevenueService audited the tax returns of hundreds ofindividual landowners in that state who had madecharitable donations of easements. The fallout fromthose audits and subsequent litigation is still being feltby many Colorado landowners. Enactment of S.119,which we believe does not comply with the federal taxlaw’s perpetuity requirements, could bring similardevastating IRS scrutiny to easement donors inVermont.
We think the federal tax rules are clear and that theproposed legislation does not comply with those rules.Mr. Livingston and others may disagree. But they atleast need to acknowledge that there is a serious riskthat the bill does not comply with federal law anddemonstrate why Vermont landowners should besubjected to such a risk when it is so easy to avoid.
Fourth, Mr. Livingston is, at best, only half right inasserting that current law contains “vague standards” for reviewing potential easementamendments and that the proposed bill would establish “clear, rigorous standards.” Weagree that the Vermont Legislature could usefully improve the process and standardsgoverning certain easement amendments. But with respect to easement termination, thebill would replace the clear process and standards provided in both federal and state law(judicial proceeding and a finding of impossibility or impracticality, with a great deal ofprecedent defining this venerable standard) with loose, vague standards, just the opposite
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3/15/14 9:32 AMEcheverria, Milne & Mclaughlin: Straight talk on conservation easements - VTDigger
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of what Mr. Livingston asserts.
Fifth, Mr. Livingston cites various standards in the bill that he suggests would limit thetype and number of easement amendments and terminations, but those standards are sovague (for example, “consistent with the public conservation interest”) that they imposeno real constraints. Advocates for the bill suggest that the kind of destructive easementterminations and swaps the bill expressly authorizes would “never happen.” But thepersonal assurances of individuals who will inevitably retire, change jobs, or otherwisepass the baton of land trust leadership to others is cold comfort in light of the fact that thebill would expressly authorize such terminations and swaps.
Finally, it is nonsensical for Mr. Livingston to describe the proposed process foraddressing easement swaps, terminations, and amendments as being “in the spirit of ourtown meeting form of democracy.” Under S.119, a five-person state panel would beresponsible for reviewing land trust proposals to terminate or amend conservationeasements, with a portion of the membership of that panel nominated by the same landtrusts submitting the applications to terminate or amend easements. Local towns andindividual citizens could voice their opinions, but they would have no vote on whethereasements should be transferred from their communities to other parts of the state.
To make matters worse, land trusts could routinely circumvent the state panel process.Under the bill, the land trust itself could run a “public process” to approve thetermination or amendment of an easement on conserved land. While the land trust’sdecision could subsequently be appealed to the five-person panel, S.119 would require thepanel to apply a “presumption” that the land trust’s decision was in the broadly defined“public conservation interest” and should be upheld. This is the worst kind of insiderprocess – the very antithesis of an open, democratic Vermont town meeting.
We recognize and agree with Mr. Livingston that conditions change and there needs to bea rigorous, transparent process by which conservation easements can be amended overtime in light of changing circumstances. But S.119 would go far beyond those objectives.Vermonters deserve more limited, carefully crafted legislation that will allowconservation easements to adapt over time and at the same time comply with applicablefederal and state laws and honor the promises that have been made to conservationdonors.
We acknowledge that our words in response to Mr. Livingston’s commentary may seemharsh to some. But we believe the serious flaws in the bill and the lack of clarity in thepublic discussion surrounding it warrant some straight talk.
Filed Under: CommentaryTagged With: conservation easement ammendments, Gil Livingston, Janet Milne, John Echeverria,Nancy A. Mclaughlin, S.119, Vermont Land Trust, Vermont Law School
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3/15/14 9:32 AMEcheverria, Milne & Mclaughlin: Straight talk on conservation easements - VTDigger
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February 24, 2014 at 7:01 am
This article is well written. There are a few more issues. One is the habit of doing specialappraisals on donated easements. It is like alchemy really. In Monkton,Vermont,townspeople are taxed to pay for such appraisals from our conservation tax. Then theproperty comes off the high tax list and everyone pays. Then the land is not managed,then someone says, wow, great views. Let’s flip this land. Knowing at least one Vermonterwho worked their whole life to keep the land the way it was, if it gets developed, theremay be a haunting. Land use is another topic. It all shifts tax burdens to townspeople.
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Grant Reynolds
February 24, 2014 at 6:08 pm
Perpetual means perpetual – while the rivers run and the grass grows (sorry – thatdefinition has a scandalous history). But if one gives or sells a perpetual conservationeasement, he/she doesn’t mean “until the holder of the easement, a state board, or a courtother than a probate or superior court decides to use it for something else.” Neither doesit mean “until things change.” The point of such an easement is to freeze the use of theland regardless of the use of surrounding land. Would anyone who wanted his landpreserved, or used only for agriculture or forestry, be able to trust that his clear intentionwould still be observed if this law passed? Would such a person give or sell a conservationeasement? Even if the person included a “no changes ever absolutely” clause in theeasement, would this law allow the trust, the board, or the court to disregard it? I wouldnot be surprised if a town, wanting more tax money, or a developer, wanting to round offhis project, was behind this bill. But I am baffled why Vermont Land Trust is.
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