Conservation easements play a critical role in landscape conservation and the preservation of wildlife habitat. And thanks to the passage of the Charitable Conservation Easement Program Integrity Act (CCEPIA) in late December, the integrity of conservation easements now receives permanent protection like the land that easements preserve. The Act, which is part of the omnibus spending bill, will play a powerful role in stopping the abuse of conservation easements by tax cheats, saving billions in taxpayer dollars.
A conservation easement is a voluntary and legal agreement that allows landowners to retain desired rights to their private land while protecting a property’s important natural features like woodlands, water sources, and native plantings. Landowners keep many of their rights, including the right to own and use the land, sell it, or pass it on to their heirs, but give up the right to cut down or destroy the parts of the property protected in the easement.
Currently, conservation easements save around 40 million acres of open space and wildlife habitat in the United States and provide tax incentives for landowners, with land trusts stewarding about half of those 40 million acres. Conservation easements are a critical part of achieving the goal of conserving 30% of U.S. lands and waters by 2030. Easements are a pillar of Openlands’ land preservation work, and over the past 40 years, Openlands has assisted over 100 communities across northeastern Illinois in acquiring land and conservation easements to directly preserve over 15,000 acres of open space.
In 2015, Congress increased tax incentives to encourage landowners to use conservation easements. Unfortunately, a small number of bad actors have abused this system, taking advantage of tax break benefits for their own gain. In doing so, they jeopardized the reputation of conservation easements. According to the most recent publicly available IRS data, investors claimed nearly $36 billion in unwarranted deductions between 2010 and 2018.
To put that into perspective, approximately 2,000 to 2,500 conservation donations are made annually for truly charitable purposes, resulting in about $1 billion in claimed deductions per year. Meanwhile, between 2016 and 2018, the IRS found $22 billion in unwarranted tax deductions claimed on fewer than 300 easements. And while the number of bad actors is small, the discovery by the IRS of this tax abuse called into question the entire system and connected the concept of conservation easements with fraud in the public eye. The CCPEIA puts an end to these abuses and will protect the federal conservation easement tax incentive and preserve the integrity of our tax laws and the conservation community as a whole.
Conservation easements like the one protecting Hoffman Farm in McHenry County can create a family legacy that ensures the enjoyment of the land for future generations. Elena Spiegelhoff, who grew up playing among the natural wonders of the property, inherited the family farm in McHenry County and wanted to protect the farmland and natural features she had known since childhood. Through a partnership between McHenry County Conservation District and Openlands, the 153 acres that sit within the greater Hackmatack National Wildlife Refuge are now permanently protected. Openlands is now working with a sustainable farmer to keep the land healthy and productive in its new role as a native plant nursery. You can hear more from Elena about the process in the video below.
While conservation easements are often used on private land, they can directly benefit the public, as in the case of North Park Village Nature Center located on the northwest side of Chicago. Formerly the site of the Municipal Tuberculosis Sanitarium, the sprawling campus grounds provided fresh air for patients and a natural setting for the treatment of tuberculosis. After the Sanitarium’s doors closed in 1974, the public gained access to the site and recognized the over 140 acres of natural areas as a special nature hub within the city. Throughout the years, multiple development plans were proposed for the area, but thanks to the help of Openlands’ collaboration with the local community and an advisory council, it was decided that the site would remain in the hands of the City through a conservation easement with Openlands, who would ensure the open space would stay protected. This was the first time that Openlands applied a conservation easement to publicly owned property.
You can learn more about how to protect your land in perpetuity with a conservation easement through Openlands here.