Ownership of land is a "bundle of rights." These include timber, mineral, hunting or fishing and water rights. An owner can separate and sell or give away each of the rights. Also, each of the rights can be separated and sold or given away as an easement. For example, a utility easement can be sold or given to a gas company for a gas line through a property. Such a utility easement would appear on the deed to the property and would remain with the property permanently even though the owner might subsequently sell the land.
A conservation easement (CE), as the name implies, is a legal agreement used to extinguish development rights for the specific purpose of conserving and preserving land. Land might be conserved, for example, to assure continuation of agricultural activities, wildlife habitat or private open space. Typically, easements are written to reflect the current owner's personal wishes for his or her property. In effect, a CE is a plan for the future use of a specific property.
Each CE is recorded in the permanent public record just as deeds of ownership or utility easements are recorded. The CE simply sets limitations on future uses of the property in exchange for financial compensation and/or tax benefits. A CE would not convert the land to public use or permit public access; the land would remain entirely private. The land can be sold, leased and willed subsequently and can be used as defined in the easement.
The Ohio Revised Code recognizes CEs, allows conservation groups to hold them and specifies how they are to be handled. To qualify for a federal tax deduction, a CE must be given in perpetuity to a recognized conservation organization. A qualified appraiser can evaluate a CE just as an appraiser could determine the market value of land for sale as real estate. Values of CEs vary, but about 25 - 30% of the fair market value of the property is a general rule.
Recently enacted permanent federal tax incentives for individual landowners provide that for Qualified Conservation Contributions, which include CEs but not fee gifts of land, the federal income tax charitable deduction for the value of the CE gift, as determined by a Qualified Appraisal, can be deducted in the year the CE is granted in an amount equal to 50% of the grantor/donor's adjusted gross income for that year with the remaining 50% being deducted in subsequent years. For farmers, up to 100% can be deducted the year the CE is granted. Any deductible amount not used in the year the CE is granted can be carried forward for as many as 15 successive years with the deduction in each of those years being subject to the same AGI limitation measured by the donor's AGI for the year in question. Similar, but less generous, provisions apply to corporate landowners.
In Knox County, the Owl Creek Conservancy is a private, fully qualified 501 c (3) (IRS) non-profit land trust that can develop and hold conservation easements. Presently, the Conservancy holds forty CEs covering 4,824 acres. Thirty-seven of the completed CEs, totaling 4,478 acres and protecting both working farms and natural areas, are in Knox County. The three remaining CEs include a 91-acre working forest (that can be timbered forever) in Monroe Township in Richland County, a 125-acre farm in Troy-Morrow Township in Morrow County, and a 130-acre farm in Muskingum County that is to be developed by the Muskingum Valley Park District as an agricultural educational facility.
Twenty-three of the Conservancy's CEs were acquired through partial donations by the landowners and partial purchase by private funding or by grants of public funds from the Ohio Public Works Commission, ODNR (Division of Wildlife) or ODA (Office of Farmland Preservation). The remaining seventeen CEs were the generous donations of the property owners.
The Conservancy's completed CEs attest to the scope of land-protecting agreements and to the magnitude of the Conservancy's holdings. The listing above, however, does not demonstrate the uniqueness of each land-protecting agreement and the Conservancy's ability to tailor an agreement for each property and landowner.
In addition to the Conservancy, a private land trust, the Knox County Soil and Water Conservation District and the Board of County Commissioners are governmental entities that are also qualified to hold CEs. For more information about land use options and conservation easements, please visit the Conservancy's web site at www.owlcreekconservancy.org or the web site of the national organization of land trusts, the Land Trust Alliance, at www.lta.org.
