Easement rule could threaten new RIM acreage
St. Paul — At present, there are about 600,000 acres in Minnesota protected by state-funded conservation easements. Of that amount, about 270,000 acres are Reinvest in Minnesota easements, administered by the Board of Water and Soil Resources.
But some state conservation groups and agencies fear legislation passed last session, part of the Senate tax bill, might limit future decisions by landowners to protect wildlife habitat and, ultimately, improve water quality via such easements.
That legislation, sponsored by Senate Tax Chair Rod Skoe, DFL-Clearbrook, and passed in a much larger tax bill, would in most cases mean county tax assessors couldn’t reduce land valuation of acres placed in conservation easements, something that was fairly standard procedure. One provision, however, would exempt some riparian lands along waterways, according to John Jaschke, BWSR’s executive director. Further, current conservation easements aren’t affected. But it’s the future that concerns Jaschke.
“The big concern is that this will deter private landowners from (offering lands for) conservation easements,” he said this week.
RIM was created in the mid-1980s “to restore certain marginal and environmentally sensitive agricultural land to protect soil and water quality and (to) support fish and wildlife habitat,” according to a BWSR fact sheet. Jaschke said nearly all those RIM easements result in perpetual protection of the land.
“The land remains in private ownership and the landowner retains responsibility for maintenance and paying applicable real estate taxes and assessments,” according to BWSR.
But typically, those taxes are based on land values a fraction of what they were when the land was in production.
BWSR officials recently sent an informational letter to county Soil and Water Conservation District employees (who enroll landowners in easement and other conservation programs), informing them of the changes.
As explained in the letter: “The effect of a conservation easement on a parcel’s property value depends on a variety of factors, including the location of the property and the restrictions on use and development of the property put in place by the easement. Until a recent change in law, local assessors were allowed to determine the effects of a conservation easement, if any, on the property tax assessment on a case-by-case basis.”
Now, according to BWSR, “This change prohibits a reduction of property value based on a conservation easement … “
The exceptions include those riparian areas along waterways, easements entered into prior to May 23, 2013, and lands in Dakota County affected by a 1999 referendum adopted to protect farmland and natural areas.
Skoe said earlier this week he’s not opposed to conservation easements. However he doesn’t believe tax breaks – after, in some cases, landowners are paid for easements – should come at the expense of other area taxpayers.
Skoe called the UPM Blandin forest land issue in the Legislature the “poster child” for needed easement changes, though not the only reason they were sought. That easement, of thousands of acres, represented a “significant increase for other taxpayers,” he said.
Easements intended to reduce flooding in the Red River Valley, for instance, would allow reductions in land value, Skoe said.
“There are a few examples where landowners just want to preserve land, then hunt on it themselves,” he said. “I just don’t think that’s fair.”
Skoe said he also believes the changes in state law will create greater consistency among assessors in various counties.
Groups like Pheasants Forever say they’re keeping a watchful eye on the new rule as it plays out. Like BWSR, PF officials say it could discourage conservation easements in the future.
“If it’s going to impact landowners’ interest in the RIM program, that’s a major deal,” said Matt Holland, PF director of grant development.
Holland said his and other groups have questions regarding how the law change will affect conservation easements, as well as if it will create confusion among the counties’ assessors – leading to differing expectations among neighboring landowners.
“Part of the issue is determining what this means,” he said. “There could be differing tax circumstances for neighbors (considering the RIM program).
“Things that have come out early suggest there could be complications for things like RIM,” Holland added. “If there’s a negative impact on the RIM program, we’ll be trying to fix it during the next legislative session.”
RIM is unlike the larger tracts often targeted in the forest range of Minnesota, Jaschke said. And in most cases, they target “marginal” cropland, most better suited for wildlife habitat.
“They’re much smaller easements,” he said, “most under 100 acres.”
RIM sometimes is funded by the state’s Clean Water Fund (Legacy amendment dollars), as well as from the Outdoor Heritage Fund (same source). The Legislative Citizen Commission on Minnesota Resources also has provided easement funding. For several years now, RIM has partnered with federal programs – usually the Wetland Reserve Program – to restore wetlands.