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AN OVERVIEW OF CONSERVATION AGREEEMENTS Brad Wyche September 19, 2007.

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Presentation on theme: "AN OVERVIEW OF CONSERVATION AGREEEMENTS Brad Wyche September 19, 2007."— Presentation transcript:

1 AN OVERVIEW OF CONSERVATION AGREEEMENTS Brad Wyche September 19, 2007

2 LAND CONVERSION IN UNITED STATES –6,000 acres per day –4 acres per minute

3 LAND CONVERSION IN SOUTHEAST –Highest in United States –1,200 acres per day

4 Upstate Development Rate Land consumption can be projected on the basis of previous land development patterns and future population –2 scenarios presented: Assume average densities consistent with pattern of development from 1940 to 1990: L and consumption at less than one-half the rate of population growth. Assume land consumption rates consistent with pattern of development from 1990 to 2000: L and consumption at up to 6 times the rate of population growth. Clemson University, Center for Community Growth and Change, Growth Impact Study for Upstate South Carolina (2005)

5 Total Urbanized Area Under Two Scenarios ( rate)383, ,385 2 ( rate)793,915 1,705,595

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7 WHAT IS GOING TO HAPPEN TO RIVERVIEW??

8 “IF YOU ARE A LANDOWNER IN THIS COUNTRY, AND IF YOU CARE ABOUT YOUR LAND, YOU CANNOT DO NOTHING.” Stephen J. Small, Preserving Family Lands, Book III, p. 27. “IF YOU ARE A LANDOWNER IN THIS COUNTRY, AND IF YOU CARE ABOUT YOUR LAND, YOU CANNOT DO NOTHING.” Stephen J. Small, Preserving Family Lands, Book III, p. 27.

9 THE USUAL OPTIONS SELL ITSELL IT GIVE IT AWAYGIVE IT AWAY HANG ONHANG ON

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11 “NEVER TRUST AN UNRESTRICTED PIECE OF LAND.” Stephen J. Small, Preserving Family Lands, Book I, p. 84. “NEVER TRUST AN UNRESTRICTED PIECE OF LAND.” Stephen J. Small, Preserving Family Lands, Book I, p. 84.

12 ANOTHER OPTION: THE CONSERVATION AGREEMENT A VOLUNTARY AGREEMENT BETWEEN A LANDOWNER AND A LAND TRUST (OR GOVERNMENT AGENCY) THAT PERMANENTLY RESTRICTS USES AND ACTIVITIES ON THE PROPERTY IN ORDER TO PROTECT ITS CONSERVATION VALUES. A VOLUNTARY AGREEMENT BETWEEN A LANDOWNER AND A LAND TRUST (OR GOVERNMENT AGENCY) THAT PERMANENTLY RESTRICTS USES AND ACTIVITIES ON THE PROPERTY IN ORDER TO PROTECT ITS CONSERVATION VALUES.

13 RETAINED RIGHTS RELINQUISHED RIGHTS COMMERCIAL INDUSTRIAL RESIDENTIAL AGRICULTURAL MINING WETLANDS ALTERATION STREAMS AND LAKES ALTERATION TIMBER HARVESTING FOR HAZARD & DISEASE ONLY UNDER FOREST MANAGEMENT PLAN WASTE DISPOSAL SIGNS AND BILLBOARDS FISHING AND HUNTING

14 RETAINED RIGHTS RELINQUISHED RIGHTS COMMERCIAL INDUSTRIAL SOME RESIDENTIAL AGRICULTURAL MINING WETLANDS ALTERATION STREAMS AND LAKES ALTERATION TIMBER HARVESTING UNDER FOREST MANAGEMENT PLAN WASTE DISPOSAL SIGNS AND BILLBOARDS FISHING AND HUNTING

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16 SOME OTHER POINTS PROPERTY CONTINUES TO BE PRIVATELY OWNEDPROPERTY CONTINUES TO BE PRIVATELY OWNED EASEMENT CAN BE PURCHASED OR DONATEDEASEMENT CAN BE PURCHASED OR DONATED EASEMENT CAN APPLY TO PART OR ALL OF THE PROPERTYEASEMENT CAN APPLY TO PART OR ALL OF THE PROPERTY THE EASEMENT IS TYPICALLY PERMANENTTHE EASEMENT IS TYPICALLY PERMANENT

17 “IN FACT, IT IS USUALLY CORRECT TO SAY THAT A LANDOWNER WHO CARES ENOUGH ABOUT HIS OR HER PROPERTY TO PUT A CONSERVATION EASEMENT ON IT WILL BE DOING EXACTLY THE SAME THING ON THE LAND AFTER THE EASEMENT IS RECORDED AS HE OR SHE WAS DOING BEFORE THE EASEMENT WAS RECORDED.” Stephen J. Small, Preserving Family Lands, Book II, pp “IN FACT, IT IS USUALLY CORRECT TO SAY THAT A LANDOWNER WHO CARES ENOUGH ABOUT HIS OR HER PROPERTY TO PUT A CONSERVATION EASEMENT ON IT WILL BE DOING EXACTLY THE SAME THING ON THE LAND AFTER THE EASEMENT IS RECORDED AS HE OR SHE WAS DOING BEFORE THE EASEMENT WAS RECORDED.” Stephen J. Small, Preserving Family Lands, Book II, pp

18 LAND TRUST’S RESPONSIBILITIES BASELINE REPORTBASELINE REPORT MONITORINGMONITORING ENFORCEMENTENFORCEMENT

19 INCOME TAX BENEFIT DIFFERENCE BETWEEN “PRE-EASEMENT” VALUE AND “POST-EASEMENT” VALUE IS THE POTENTIAL DEDUCTION

20 DEDUCTION LIMITS OLD LAW: CANNOT EXCEED 30% OF ADJUSTED GROSS INCOME WITH 5 YEAR CARRY FORWARD NEW LAW: 50% OF ADJUSTED GROSS INCOME WITH 15 YEAR CARRY FORWARD. FOR FARMERS AND RANCHERS, 100% OF ADJUSTED GROSS INCOME! BUT: NEW LAW APPLIES ONLY TO EASEMENTS SIGNED IN 2006 AND LAW WILL EXPIRE AT END OF THIS YEAR AND OLD DEDUCTION LIMITS WILL GO BACK INTO EFFECT. BUT LEGISLATION IS PENDING TO MAKE THE NEW LAW PERMANENT—CALL YOUR REPRESENTATIVES!

21 NEW INCENTIVES ESPECIALLY HELPFUL FOR MODEST INCOME LANDOWNERS : Assume landowner has AGI of $50,000 and donates easement worth $400,000 Old Law: Total deduction over six years=$90,000 $310,000 of the deduction wasted $310,000 of the deduction wasted New Law: Total deduction over 15 years=$400,000 Entire deduction used Entire deduction used

22 CONSERVATION PURPOSES TEST 1.The preservation of land for outdoor recreation by, or the education of, the public 2.The protection of relatively natural habitat for fish, wildlife, or plants or similar ecosystems 3.The preservation of open space (including farmland and forest land) where such preservation will yield a significant public benefit and is either (a) for the scenic enjoyment of the general public or (b) pursuant to a clearly delineated federal, state or local government conservation policy 4.The preservation of a historically significant land area or certified historic structure.

23 “ IF YOU ARE TRULY CONTRIBUTING SOMETHING TO THE GENERAL ENVIRONMENTAL WELL-BEING OF THE AREA, THEN THAT’S A GOOD (AND DEDUCTIBLE) GIFT. IF YOU ARE TRULY TRYING TO GET AWAY WITH SOMETHING (“MAYBE I CAN GET A DEDUCTION FOR NOT ALLOWING ANY MORE DEVELOPMENT ON MY SUBURBAN LOT”), AND THERE IS NOTHING PARTICULARLY UNUSUAL ABOUT THE PROPERTY OR ITS SETTING, YOU ARE PROBABLY NOT ENTITLED TO AN INCOME TAX DEDUCTION.” Stephen J. Small, Preserving Family Lands, Book I, pp “ IF YOU ARE TRULY CONTRIBUTING SOMETHING TO THE GENERAL ENVIRONMENTAL WELL-BEING OF THE AREA, THEN THAT’S A GOOD (AND DEDUCTIBLE) GIFT. IF YOU ARE TRULY TRYING TO GET AWAY WITH SOMETHING (“MAYBE I CAN GET A DEDUCTION FOR NOT ALLOWING ANY MORE DEVELOPMENT ON MY SUBURBAN LOT”), AND THERE IS NOTHING PARTICULARLY UNUSUAL ABOUT THE PROPERTY OR ITS SETTING, YOU ARE PROBABLY NOT ENTITLED TO AN INCOME TAX DEDUCTION.” Stephen J. Small, Preserving Family Lands, Book I, pp

24 ESTATE TAX BENEFIT Property Is Valued In Owner’s Estate At Its Reduced Value, And An Additional 40% Of This Value Can Be Excluded From The Estate

25 “EVERY LANDOWNER IS UNIQUE AND EVERY PIECE OF LAND IS UNIQUE. EVERY CONSERVATION EASEMENT SHOULD BE UNIQUE AND MUST BE TAILORED TO MEET THE NEEDS OF THAT PARTICUAR LANDOWNER AND THAT PARTICULAR PIECE OF LAND.” Stephen J. Small, Preserving Family Lands, Book I, pp. 18. “EVERY LANDOWNER IS UNIQUE AND EVERY PIECE OF LAND IS UNIQUE. EVERY CONSERVATION EASEMENT SHOULD BE UNIQUE AND MUST BE TAILORED TO MEET THE NEEDS OF THAT PARTICUAR LANDOWNER AND THAT PARTICULAR PIECE OF LAND.” Stephen J. Small, Preserving Family Lands, Book I, pp. 18.

26 THE CONSERVATION AGREEMENT: A WIN-WIN FOR LANDOWNERS AND THE LAND! THE CONSERVATION AGREEMENT: A WIN-WIN FOR LANDOWNERS AND THE LAND!

27 QUESTIONS???


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