September 01, 2017

Uniform Laws Update

Uniform Laws Update provides information on uniform and model state laws in development as they apply to property, trust, and estate matters. The editors of Probate & Property welcome information and suggestions from readers.

The Uniform Conservation Easement Act Gets Another Look

A conservation easement is an interest in real property created to preserve natural or historic resources and held by a governmental agency or a charitable organization interested in conservation. The instrument creating the easement may impose restrictions on land use and affirmative obligations for preservation on the holder.

Historically, the common law of property frowned on restrictive easements as an impediment to the best use of land and provided several defenses for opponents of the restrictions. Recognizing the value of conservation and historic preservation, states began to enact statutory law to override the common-law defenses and enable the use of conservation easements. Virginia enacted the first such statute in 1966, and other states soon followed suit.

In addition to the preservation benefit, there are financial incentives to creating conservation easements. The Internal Revenue Code authorizes a federal charitable income tax deduction for the donation of a conservation or façade preservation easement to a governmental agency or charitable organization, provided the easement is “granted in perpetuity,” its conservation purpose is “protected in perpetuity,” and it satisfies numerous other specific requirements. IRC § 170(h); Treas. Reg. § 1.170A-14. A number of states now also offer state tax incentives.

Due in part to their tax advantages, conservation easements have grown in popularity over the past 40 years. The National Conservation Easement Database, a voluntary (and hence incomplete) national registry of conservation easements, includes 130,758 conservation easements covering over 24 million acres, but it estimates that approximately 40 million acres are now encumbered by easements throughout the United States. National Conservation Easement Database, at http://conservationease ment.us (last visited June 15, 2017).

The Original UCEA

In 1981, the Uniform Law Commission (ULC) approved the Uniform Conservation Easement Act (UCEA) to promote uniformity among the states in this area of the law. Twenty-five jurisdictions have adopted the UCEA (see map on page 9), and the remaining states have a non-uniform statute that similarly allows the creation of conservation easements.

The UCEA is a concise enabling statute that simply authorizes the creation of conservation easements, provides for their enforcement by interested parties, and establishes their validity despite the traditional common-law defenses. Some of the enacting states have supplemented the language of the UCEA with locally applicable provisions on topics such as recording of easements or approval by land-use planning agencies.

The sheer number of conservation easements created has naturally produced some conflicts, raising issues that either were never considered by the UCEA drafters or were intentionally left to an adopting state’s other law. What happens when the organization holding the easement ceases to exist? Does a conservation easement cloud the title of property in violation of a state’s marketable-title act? Who can be compensated if a state takes the easement by eminent domain? In the 36 years since approval of the UCEA, some case and statutory law has developed to deal with these and other issues.

A New Study

The Joint Editorial Board for Uniform Real Property Acts (JEB) is charged with monitoring the law of real property and keeping uniform acts current. Last year the JEB recommended the formation of a committee to study the law of conservation easements and determine whether amendments to the UCEA were advisable to deal with emerging issues.

The ULC appointed a study committee chaired by Commissioner Stephen Cawood of Kentucky, with Commissioner King Burnett of Maryland (who also served on the original UCEA drafting committee) serving as vice-chair. Nancy A. McLaughlin, the Robert W. Swenson Professor of Law at the University of Utah S.J. Quinney School of Law and a noted scholar in this area, was named as the Reporter.

The committee will be aided by stakeholders from organizations including the Land Trust Alliance, the National Association of State Charity Officials, the U.S. Forest Service, and the Nature Conservancy. RPTE has appointed an advisor to the committee, as have the Section of Taxation and the Government and Public Sector Lawyers Division.

The committee is reviewing the existing law of every state and studying a range of issues to determine whether a uniform solution is advisable. At the conclusion of its study, the committee will deliver a report to the ULC Scope and Program Committee recommending whether the UCEA should be amended to address certain issues. That report is expected to be delivered in 2018.

To follow the work of the Study Committee on Possible Amendments to the Uniform Conservation Easement Act, or any other ULC project, visit the ULC web site: www.uniformlaws.org. n