“The Battle for the Bluegrass: An Overview of the Struggle Between Conservation and Development”

Appearing in JNREL Vol. 20, No.2 the following Note was written by former staff member Elizabeth Clevinger. Staff member J. Anthony Cash wrote the following abstract.

The Bluegrass Region of Kentucky has gained great economic benefit from its agricultural lands, particularly those utilized by the equine industry. In addition to money, these farmlands provide a cultural and aesthetic value that is unique to the region and irreplaceable. However, these farmlands can become a victim of their own success. For as with any economic boon, comes development. In the Bluegrass Region of Kentucky, such development can easily consume the farmlands that made such growth possible.

With such a clash of competing and coalescing interests, the struggle to strike a balance between development and conservation of farmland is difficult. It is made increasingly difficult because farmland is privately owned and thus protection of farmland depends upon the cooperation of landowners. However, the creation of several non-profit and governmental bodies that engage in the purchase or collection of donated easements has helped to ease this tension. The easements collected by these organizations guarantee that the land will be available for farm use in perpetuity by restricting the use of farmland upon which the easement is placed.

Even with these easements a number of factors can still affect the balance between development and conservation. First, the donation of these easements is heavily dependent on the tax deductibility of these easements. However, Congress has considered reducing the amount of the deduction granted for these types of donations. Additionally, funding for the purchase of additional easements by the local and state governments is becoming increasingly difficult because funding is drying up. Finally, the community of farmers, entrepreneurs, developers, and ordinary citizens of the Bluegrass has not decided exactly how to find the balance that is needed between development and conservation. While there is no simple answer, it is important that whatever solutions are used balance the need for conservation against the need for economic development.

Conservation Easement Tax Advantages Are Set to Expire

The following post was written by staff member Katie Shoultz.

On December 31, 2009, favorable tax deductions for individuals with qualified conservation easements will expire. Farm and Dairy, Land conservation tax break is set to expire Dec. 31, http://www.farmanddairy.com/news/land-conservation-tax-break-is-set-to-expire-dec-31/13279.html (last visited Nov. 16, 2009). A conservation easement is a restriction placed on a piece of property. The Nature Conservancy, Conservation Easements, http://www.nature.org/aboutus/howwework/conservationmethods/privatelands/conservationeasements/about/art14925.html (last visited Nov. 16, 2009). In executing an easement, a landowner either donates or sells certain rights attached to his or her property whereby a private or public organization then agrees to enforce the landowner's promise not to exercise the rights. Id. Such easements are generally seen as favorable in the farming industry because they serve as a protective measure for family farms. Farm and Dairy, Land conservation tax break is set to expire Dec. 31, http://www.farmanddairy.com/news/land-conservation-tax-break-is-set-to-expire-dec-31/13279.html (last visited Nov. 16, 2009). Advocates of easements also tout the added benefit of creating needed cash flow for many in the farming industry. Juan Espinosa, Rocky Ford, Colo., Farmers Receive Tax Advantages by Conservation Easement, The Pueblo Chieftain, June 22, 2002 available at http://www.encyclopedia.com/doc/1G1-120638712.html. This cash flow is particularly beneficial in depressed economic times and can help encourage sustainability. From a greater public perspective - these tax benefits provide incentives to a crucial sector in our society as "[a]gricultural producers not only provide the food we eat, but open space, wildlife habitat, and potentially carbon sequestration." Private Landowner Network, Conservation Tax Provisions making their way through Congress, http://www.privatelandownernetwork.org/plnlo/taxprovisions.asp?pp=true (last visited Nov. 16, 2009). In fact, one source indicates that from 2003-2007, over a half million acres have been placed in conservation easements. Id.

Currently, the legislation allows landowners to take deductions of up to fifty percent of their adjusted gross income (AGI). Farm and Dairy, Land conservation tax break is set to expire Dec. 31, http://www.farmanddairy.com/news/land-conservation-tax-break-is-set-to-expire-dec-31/13279.html (last visited Nov. 16, 2009). This percentage "allows grantors to realize the value of preserved property more quickly." Id. Qualified farmers who earn more than half of their income from farming operations are allowed to deduct up to one hundred percent of their AGI. Id. The expiring legislation also provides a longer time period for those claiming such deductions. Id. Those who have taken advantage of the more favorable legislation have up to 16 years "to carry forward the unused balance(s)." Id. Prior to the legislation, only six years was allowed. Id. For further information, the IRS released Notice 2007-50 to provide guidance for such deductions. I.R.S. Notice 07-50, 2007-25 I.R.B. (Jan. 4, 2007).

Two bills are currently set before Congress that would extend the aforementioned benefits permanently - HR 1831 (the Conservation Easement Incentive Act) and S 812 (the Rural Heritage Conservation Extension Act). It would obviously be quite advantageous for individuals, particularly farmers and ranchers, interested in placing an easement on their property if such proposals were adopted. Permanency would also lend "legal certainty for those involved in these long term projects." Private Landowner Network, Conservation Tax Provisions making their way through Congress, http://www.privatelandownernetwork.org/plnlo/taxprovisions.asp?pp=true (last visited Nov. 16, 2009).

Land and Home in the American Mind

Written by Will Sarvis this article appears in JNREL Vol. 22. No.2. This abstract was written by staff member Anthony Cash.

The American feelings towards property and home ownership have gone through drastic changes since the first settlers arrived in the United States. The early settlers were primarily informed by English common law, Christianity, and Enlightment philosophy, especially John Locke. These ideas have combined with Native American feelings of closeness to the land to produce a distinctly American way of viewing property and home ownership. This unique bond between Americans and the land they live upon has always informed their reactions to land use restrictions, government takings, and property law generally.

However, the industrialization of the United States and the current post industrial age have made previous affections with land ownership less functional ways of interacting with property. The United States is experiencing many of the same problems which have long plagued Europe. Central to these is a growing population that puts ever greater demands on limited space available. Of course these increased demands lead to a need for increased regulation and progressive zoning laws. These needs often conflict with the almost spiritual connection many Americans feel for their home and property. By examining the history and development of American feelings towards land and land ownership, we can hopefully understand a way forward that takes this bond into account, while advancing responsible land use restrictions.