Maine Land Conservation Law E-Bulletin

December 16, 2015

In this issue:
  • LMF Breakthrough!
  • Conservation Easement Tax Incentives Breakthrough!
  • Land and Water Conservation Fund Partial Breakthrough!
  • Important Open Space Tax Case
  • E-Bulletin Information

LMF Breakthrough!

Governor LePage has reversed course and now will allow the sale of Land for Maine’s Future bonds in the coming months.  This is great news for the more than 30 approved projects that were put on hold due to his previous attempts to sandbag the LMF program. Land trusts and conservation groups will now see to it that the Governor follows through on his commitment.

Perhaps the Governor was responding to polling results showing that Mainers across the political spectrum overwhelmingly support the LMF program.  In fact 74% of respondents, including 54% of Republicans, think the Governor should release the LMF bond funds.

For more on this encouraging development, see the BDN’s editorial piece and the Press Herald’s news story.

Conservation Easement Tax Incentives Breakthrough!

Ever since the enhanced giving incentives for conservation easements first went into effect in 2006, they have been extended for a year or two at a time.  Now, Congress is on the cusp of making these incentives permanent as part of a blockbuster tax deal   For more on the breaking news, check out the Land Trust Alliance.

To review, the enhanced easement incentives do the following:

  • Raise the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%;
  • Allow qualified farmers and ranchers to deduct up to 100% of their AGI; and
  • Increase the number of years over which a donor can take deductions from 6 years to 16 years.

Together, the enhanced incentives make it more likely that easement donors having modest levels of income will be able to claim more of their deduction, rather than letting it go unused due to the AGI cap and carryover limitations.

Land and Water Conservation Fund Partial Breakthrough!

And the good news just keeps on rolling.  The same bill that makes the conservation easement tax incentives permanent also reauthorizes the Land and Water Conservation Fund for three years.  The LWCF has provided billions of dollars in funding for land conservation and outdoor recreation since its inception in 1965.  Maine alone has received $172 million in funding, including projects in Acadia National Park, our three National Wildlife Refuges, and many local parks.  Unfortunately, some conservative Republicans in western states let the LWCF expire in September and were seeking radical changes to the program before reauthorizing it.  Although a permanent LWCF authorization would have been much better, the three-year extension is a step in the right direction.  Check the LWCF Coalition page as more information becomes available.

Important Open Space Tax Case

The recent decision by the Maine Board of Property Tax Review (BPTR) in Greenleaf Cove Ass’n v. Town of Westport Island, No. 2015-003 (BPTR Sept. 28, 2015) interpreted two important provisions of Maine’s Open Space Tax Program.

The Town of Westport had rejected an Open Space application by the Greenleaf Cove Association, a residential homeowner association.  The Association owned a 1.1-acre common lot on the shore of the Sheepscot River and allowed public to access the parcel.  Furthermore, a restrictive covenant enforceable by the lot owners required the parcel to remain undeveloped except for trail-related structures and a dock and seasonal ramp and float located on the parcel.

The Association applied for a 45% reduction in taxes, 20% for the basic Open Space category and 25% for the public access category. The Town initially determined that there was insufficient evidence showing any public benefit (a key requirement of eligibility for Open Space classification) from keeping such a small parcel in Open Space.  But the town backed off on this argument and conceded the issue before the BPTR.

Three issues remained for the BPTR’s determination. First, did the dock disqualify the parcel from Open Space eligibility because it was a “principal or accessory structure” or a “substantial improvement… inconsistent with the preservation of the land as open space”?  If the dock fit either of those definitions, then the entire parcel would be excluded from the Open Space area under 36 M.R.S. § 1109(3), because Westport Island’s minimum lot size is two acres.  The BPTR found that the dock was not a “principal or accessory structure” but was a “substantial improvement,” and that in this case it was consistent with Open Space classification because it provided recreational water access to the general public and a “scenic platform for scenic views association with that access.”  I think the key to making sense of this conclusion is to realize that the dock here was publicly accessible.  In contrast, a dock or similar improvement that was not accessible to the public and therefore did not facilitate recreational uses of the parcel presumably would not be consistent with Open Space classification.

The second issue was whether in order to qualify under the public access category for an additional 25% reduction, there needed to be a deeded right of access to the public that is enforceable by a third party (e.g., a conservation easement or trail easement).  The BPTR ruled that no such deeded public access is necessary under the language of § 1106-A(3)(C).  I think this is the right policy outcome here, as it will encourage landowners to open their property to the public, without making them commit to perpetual public access.

Finally, the BPTR found that the public could reach the parcel by reasonable means (driving down a dirt road and then walking down a path) and that the Association’s establishment of signs, two parking spaces, and trail improvements was enough to encourage the general public to use the parcel for recreational purposes.

Keep in mind that decisions of the BPTR are not binding legal precedent, but they can be useful as persuasive authority in negotiations with municipalities and in litigation briefs.

E-Bulletin Information

I send E-Bulletins 3 or 4 times per year to provide updates and analyses on legal and policy matters respecting Maine land conservation.  I do my best to keep my messages brief, timely, and useful to conservation-minded landowners, as well as land trust professionals and volunteers.  At the same time, no one should rely on these E-Bulletins as legal advice, and I encourage you to consult a qualified attorney for advice on any particular situation.

If you find this free E-Bulletin to be valuable and interesting, please forward it to a friend or colleague.  Subscriptions remain free, and I respect my subscribers’ privacy.

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