Conservation easements are used too frequently, lack transparency, tie up property for too long and could be improved in other ways, according to speakers at a special summit held by the Kansas Natural Resources Coalition recently in Oakley, Kansas.

Conservation easements are used too frequently, lack transparency, tie up property for too long and could be improved in other ways, according to speakers at a special summit held by the Kansas Natural Resources Coalition recently in Oakley, Kansas.

The coalition, which is made up of county commissions from across the western third of Kansas, was formed in the last couple of years to address concerns over private property rights and local control. Its establishment was prompted when the Environmental Protection Agency listed the lesser prairie chicken as a threatened species. The meeting on easements drew state legislators, county commissioners and utility representatives as well as farmers and ranchers from multiple states.

Some 10 million acres are now held in easements by 1,700 different land trust organizations around the country. The arrangements have become increasingly popular as farmers seek to reduce their tax burden in exchange for agreeing to keep the land as agricultural production or wildlife habitat and never developing it.

But landowners should remember that while conservation easements reduce tax liabilities, they also devalue property, restrict use and inhibit borrowing power, explained Harriet Hageman an attorney from Cheyenne, Wyoming. In a dispute, they pit landowners against the resources of the federal government. And she has studied numerous contractual documents that seem wordy, running 25 to 30 pages long, and appear slanted in favor of the land trusts, which as nonprofits are exempt from paying legal fees, she said.

To qualify for federal income and estate tax relief, the Internal Revenue Service dictates that landowners entering into easements must give up developmental rights for perpetuity, which means forever. Meanwhile, the National Parks Service is currently running an $11 billion backlog funding maintenance projects.

“I believe one of the reasons for the big push for conservation easements is they (the federal government) want to dictate practices but leave someone else responsible for the maintenance,” she said. “I believe it’s a government land grab, I really do.”

Hageman kicked off a full day of spirited presentations that included a diverse panel and a lunch visit by Western Kansas Representative Tim Huelskamp.

Jesse Richardson, an assistant professor at the University of West Virginia School of Law, traveled to the meeting to outline some of the more onerous easement restrictions he has seen. Landowners with conservation easements have been penalized for filling in a sinkhole in Kentucky and for landscaping property in Connecticut. A Maryland dairy farmer spent $200,000 in legal fees over five years to gain the right to transition from conventional to organic production.

“Typically it’s not the person who donates or sells the land that has problems, it’s the second or third generation or the person who later buys it,” he noted.

A prime example was audience member Ondre Rexford of Meade, Kansas, who said he was unable to farm or sell land he had inherited because it was tied up in an easement. He said his granddad made the deal while his dad was sick with cancer and both have since passed away. He recently bought 160 acres of farmland for nearly the same price as what his granddad made enrolling 320 acres in the easement just a few years ago, he said.

That’s a complaint several speakers had: what looks like a large upfront pay-off now could in fact end up reflecting a tiny fraction of the property’s value after even just a few decades.

Richardson said he believed the concept was overused.

“It’s become a matter of quantity over quality,” he said. “I think we should be reserving these for what I like to call our crown jewels.”

Ric Frost, a former New Mexico State University professor and an environmental and policy analyst, said local communities should have more of say, since the deals have long-term tax implications and also have the potential to raise utility costs in rural areas that are already subject to higher prices.

He also suggested that all easements include a review clause that allows landowners to re-evaluate the arrangement during the life of the contract.

In addition, he would like to see a requirement that land trust agents be licensed and bonded like real estate agents to improve accountability and transparency. Another way to make agents more accountable would be to require that land trusts pick up the tab for any back taxes owed, if the assessed value comes under dispute.

In Colorado, thousands of landowners were held liable for proceeds on tax credits they had already sold after the state determined the assessed values the credits had been based on were excessive. Among them was Lamar’s Jillane Hixson, who was in the audience. Financially stressed by the drought, she opted for an easement instead of selling a parcel of land to developers but ended up regretting it after the dispute cost her close to $700,000 and left her with town frontage that is now virtually worthless.

As part of a panel, Mike Beam, executive director of the Kansas Livestock Association’s Ranchland Trust, reminded the crowd that easements keep land on the tax rolls, assessed at agricultural land use rates, which he considered preferable to having the federal government buy land outright. Since most of the easements his group has arranged are on land that has yet to change hands, their effect on future property values would become clearer over time, he added.

Frost’s main complaint was that easements don’t address the fundamental underlying problem. Farmers are being forced to financial desperation by unfair foreign competition, inability to pass on their costs, excessive government regulations, erratic weather and other factors unique to their industry.

“I call them ‘compromised sellers,’” he said.