ENVIRONMENTAL LAW COMMITTEECOMMENT ON A04231 Part 2

series of ranking systems, which evaluates the site’s vulnerability or criticalness based on a number of criteria. The criteria include “any announced plans for the site, including their nature, timing, scope and environmental compatibility; any pending applications for any form of governmental approval for the use or development of the site; the land use pattern and development trends in the area; and a number of other considerations.” The site is then reviewed to see if some strategies, other than acquisition of the fee or a conservation easement, would protect the resources adequately. “The final executive decision to purchase must take account of many other factors, including the landowner’s willingness to sell. Among the other factors is the statutory requirement to consider the possibility of an easement.” Land use and development patterns are considered because lands are chosen for acquisition whose conservation purpose is less likely to be thwarted by surrounding development and will therefore increase the success rate of each State dollar spent. Because “[c]onservation easements often result in fragmented, instead of contiguous, preservation of lands,” this selection criteria is of special importance.

Because the State must first consider obtaining an easement via voluntary means under current law, if the State is able to enter into such an agreement, under the proposed bill, the State must pay full compensation and cannot enter into a bargain sale with the landowner. This interplay with existing legislation could result in enormous costs being placed on the New York treasury.

Under the Open Space Plan, resources that can be protected by means other than obtaining a fee or conservation easement are ranked higher than other similarly valuable resources. As a result, this proposed bill, which creates incentives for landowners to hold out for a sale of their easements, rather than donate them, ranks such lands lower, and thus under the Open Space Plan system, such lands are less likely to be conserved. That is, because preference is given to gifted lands, then to lands voluntarily sold at reduced prices, then to fair market value lands, this last group of lands is likely to be left out of the mix given the meager State treasury and the State’s unwillingness to consider eminent domain.

 

C. Landowner Reaps a Windfall

 

The proposed bill seeks to create a windfall for landowners who can already receive a number of benefits in the establishment of a conservation easement. These preexisting incentives have proven sufficient to induce the creation of voluntary conservation easements. The addition of these other incentives creates the possibility of multiple compensations for landowners entering into such agreements or, in the alternative, could serve to limit the options of landowners seeking to enter into conservation easements and to limit the compensation ultimately due to landowners.

 

1. Tax Benefits

 

Under the current structure, donation of conservation easement lands results in a number of tax benefits. “[A] landowner may claim an income tax deduction based on the value of the rights foregone. The reduction in . . . value associated with a conservation easement can also lower estate and gift taxes, helping families pass their land intact to the next generation.” Donations avoid capital gains taxes, which may be quite significant if the land has appreciated considerably. This is a likely scenario in undeveloped wetlands where development pressures have increased land values and property taxes, thus making it more difficult for traditional use landowners to maintain the viability of such activities, such as in the scenario described above in Part IV.A.1. A combination of these factors has resulted in the nationwide donation of over 300,000 easements.

 

i. Income Tax Benefits

 

The Internal Revenue Service provides tax benefits for conservation easements given as charitable gifts. These benefits include a 30% deduction from the donor’s adjusted gross income and can be carried over up to five additional years. The appraisal and legal fees associated with establishing the donation are similarly deductible if such miscellaneous costs exceed 2% of the donor’s adjusted gross income.

In order to be eligible for an income tax benefit, the property must have “significant” conservation values. Properties containing wetlands are considered to have such values. Furthermore, the conservation easement must be granted in perpetuity to a qualified 501(c)(3) organization or public agency, must be dedicated to a conservation purpose that prohibits surface mining. Such purposes include: preservation of lands for education of, or recreation by, the public; protection of relatively natural habitat for fish, wildlife, plants or ecosystems, preservation of open space for scenic purposes or pursuant to a clearly delineated government policy. Data regarding the conservation values must be collected prior to the donation. Easements granted by a developer in exchange for a development purpose does not provide any income tax benefit under the Internal Revenue Code, as such an easement is best viewed as an exaction.

Therefore, the income and capital gains deductions for the donation of conservation easements are significant and provide a good incentive to landowners to enter into conservation agreements under existing law.

 

ii. Estate Tax Benefits

 

Although the income and capital gains tax deductions are significant, “[m]any ranch families are ‘land-rich’ but ‘cash-poor,’ and as a result benefit little from income tax deductions associated with the gift of a conservation easement.” For these individuals, as well as other, more cash-rich families, estate tax deductions are another valuable tax deduction available through the donation of a conservation easement.

“State and federal taxes are based on the fair market value of the property at the time of…death, not the original purchase price or current use value.” The estate tax levied may reach the millions of dollars, making cash-poor heirs incapable of inheriting the lands.

The easement decreases the value of the property, and thus decreases the value of the estate for tax purposes. Some farm operations will be exempt from estate tax after the easement if it causes their estate value to be below the minimum required for the tax. Decreasing the amount of estate taxes that must be paid may allow the family to keep the farm rather than having to sell part of it off to pay the taxes.

On the other hand, “[c]onservation easements can be a useful estate-planning tool to reduce estate tax liability and allow land to remain in the family.”

 

iii. Property Tax Benefits

 

Finally, there are property tax benefits to donating conservation easements to land trusts or public agencies, though this issue is slightly more complicated. In some areas, such as the Adirondack and Catskill parks and the Tug Hill region, the State must pay the property taxes on conservation easements acquired by the State. This presents a difficult issue and serves as a deterrent for establishing conservation easements in that ecologically sensitive area. A04231, however, also recognizes the importance of maintaining the property tax base in order to ensure that local jurisdictions can service their population’s needs adequately. Under the Open Space Plan, for instance, DEC and OPRHP look at the economic benefits and burdens associated with different ecologically important sites in determining whether or not to acquire them, by looking at the impact on the real property tax base. The goal is therefore to obtain easements that “may lessen a landowner’s tax burden while keeping conserved lands on local tax roles.” Generally, however, if the local property taxes are not paid by the State, the “conservation easement should reduce the assessed valuation of the burdened property.”

This occurs because “[l]and under conservation easement is treated for tax purposes as if it were in an agricultural district, and should clearly receive a lower valuation. Some assessors are slow to reassess the property, however, and even a reassessment may not result in lower taxes, depending upon the situation.” One such situation, for instance, is where the remaining land unaffected by the conservation easement increases in value as a result of the easement, thereby offsetting the tax benefits received by the easement. Nevertheless, applying this agricultural assessment tool to conservation easements has resulted in a reduced tax burden of approximately $47 million per year. The issue as presented by this review, therefore, is that the law provides for a reduced tax assessment upon the creation of a conservation easement but that implementation of the existing legislation is lacking. The proposed bill will do little to resolve this situation.

Generally, if a property is being taxed at its development value, then most likely an easement will reduce a landowner’s property taxes because an easement will generally reduce the allowable development. In fact, in Adirondack Mountain Reserve v. Board of Assessors of Town of North Hudson, the Third Department found that the impact that an easement has on the market value of the parcel in question must be considered in assessing the property tax.

Vermont law assesses property taxes in a manner similar to the one described by the proposed legislation, which provides a decreased assessment “only upon the value of those remaining rights or interests to which [the owner] retains title.” Because New York State law looks at the speculative uses of the property in assessing its taxable level, an easement should normally reduce the property tax assessment of lands containing easements. Of course, in some cases, the difference between the speculative value and the agricultural or recreational value is minimal.

 

2. Double Compensation

 

A further concern of the compensation scheme intended by the proposed bill is the potential for double compensation. Although income tax benefits are generally unavailable to properties and rights for which compensation is received, other tax benefits may be available. Furthermore, it is possible that a court would require compensation both for the conservation easement and for a taking. This might occur in a situation where a landowner’s property is designated as a wetland, thereby constricting development. The landowner attempts to develop the property but is denied a permit. The landowner sues under the Due Process Clause for “just compensation” of the regulatory taking and is awarded such compensation for the lost development rights. The landowner, however, still retains title to the property and perhaps still pays some property taxes. The landowner then seeks to relieve itself of all tax liability and executes a conservation easement agreement with the State, whereby the landowner is compensated not only by a reduced tax burden but is also compensated the fair market value of the easement, which awards the landowner the speculative value of the property based on predictions that the property will be re-designated as non-wetlands. Because the compensation requirement is automatic under the law and because the Board may not have knowledge of the landowner’s suit in court for compensation under the Takings Clause, such compensation under the proposed Conservation Easement Law is a possibility. Because the Board and the court system operate on two distinct levels and do not carry precedential authority on one or the other and because the compensation schemes could theoretically operate at two different levels (one for the designation of the property as a wetland and the other for the conservation easement), such double compensation is a very real possibility. This proposed bill, therefore, risks acting as a price support, compensating landowners for conservation easements by “paying the farmer twice.”

On the other hand, courts may be reluctant to allow game-playing by landowners and may therefore reject claims for compensation under the Due Process Clause as unripe until a landowner seeks compensation from the Board. This may have the result of increasing transaction costs and reducing the amount of the total award provided landowners–courts may be reluctant to provide a second round of compensation given the claim to provide just compensation at fair market value for the designation of wetlands. Whether there is a difference between the valuation methods utilized by the Board or the courts are uncertain given the lack of clarity of the legislation, but for consistency and equity across wetland and non-wetland conservation easement sellers, one centralized process is desirable. That the courts have experience and authority in such valuation procedures and that even under the proposed legislation would have judicial review of the quasi-judicial determination of the Board, leaving such valuation processes in the hands of the courts seems most appropriate and efficient.

If the situation were reversed, and the landowner sought compensation under the Conservation Easement Law first, and then for compensation under the Takings Clause, the landowner would likely not receive such compensation except any residual compensation due for consequential damages not properly accounted for in the sale of the easement. This is because courts attempt to avoid duplicative awards of damages and therefore will limit one award based on compensation received in prior proceedings.

 

3. Bargain Sale

 

Apart from donating conservation easements under existing law, the possibility exists for a landowner to sell the conservation easement at a bargain sale. This possibility exists because “[l]and trust and government agencies are sometimes willing, though often not able, to buy conservation land.” For landowners in need of immediate income, yet desiring to conserve the property, a bargain sale is a good option. A bargain sale means that a landowner sells the land at a price below its fair market value. “The difference between the land’s appraised fair market value and its sale price is considered a charitable donation and may be able to be claimed as an income tax deduction.” Therefore, “[i]f an easement donor wishes to claim tax benefits for the gift, he or she must donate or sell it for less than fair market value to a public agency or to a conservation or historic preservation organization that qualifies as a public charity under Internal Revenue Code Section 501(c)(3).”

As an example, Lancaster County, Pennsylvania has a program that provides the landowner with numerous options in the release of a conservation easement including “a bargain sale with tax benefits, the holding of proceeds in a tax escrow account with deferred payments over a five year period, and a payment method of either a lump sum or installment payments.” Even though the county only pays approximately $2,000 per permanent conservation easement acre, there are still more than 150 farms on the waiting list. Requiring the State to pay the full fair market value of the conservation easement as the value lost to the landowner would increase the price of the easements significantly and make nearly impossible Governor Pataki’s goal of conserving one million acres.

Another problem with this proposed legislation is that it fails to account for the differing values and goals of landowners willing to release conservation easements. Some landowners are more cash-poor than others. For some landowners, it is more advantageous to donate the conservation easement, not pay capital gains tax on the sale of the property and receive an income tax deduction (as well as a reduced estate tax assessment for future heirs) than it is to sell the property at full value and bear the full brunt of the tax system. Many landowners, if not most, lie somewhere in between—tangible cash is important for improvements to say, the farm, and serves to capitalize some of the equity, but the capital gains tax and other taxes prove to be too burdensome to sell the property at full value. For these landowners, a bargain sale is the ideal option. Eliminating this option would reduce the incentives for landowners to create conservation easements and would reduce the ability of the government to enter into conservation easements due to budgetary constraints. Finally, the proposed legislation may result in more leased development rights (LDRs). Because LDRs can provide tax abatement in return for a temporary conservation easement. However, LDRs are clearly a less desirable alternative because such temporary arrangements do not provide a long-term guarantee that the land will be protected, nor do they provide the landowners with income tax benefits.

 

C. Enforcement Concerns

 

Under the proposed legislation, compensating landowners at fair market value provides no funds for the monitoring and enforcement of the terms of the easement. Thus, if a landowner violates the terms of the easement, the State must expend more of its finite resources to enforce the agreement. In a private situation, such funds are contracted into the agreement and do not constitute a drain on taxpayers’ money because “[e]asement holders typically ask landowners for a financial contribution to a stewardship fund to ensure the ability to monitor and enforce the easement in perpetuity.” “Proper stewardship of easements requires that the easement holder have the technical and financial capacity to ensure that easement terms are being honored in perpetuity.” Because the State may or may not be able to guarantee the monitoring of such lands into perpetuity without guaranteed funds derivative from the easement agreement, private management of the lands or a less than fair market value compensation arrangement is more desirable to ensure that the easement is adequately enforced.

 

E. Expansion of Takings Doctrine

 

1. Review of Current Takings Jurisprudence

 

Designation of property as containing a protected wetland is not sufficient to trigger a takings claim. Furthermore, the requirement that a property owner obtain a permit prior to developing wetlands does not constitute a taking. Therefore, before a takings claim can become ripe for review, a development permit must first be sought. This bill attempts to either change New York takings law or circumvent takings law through the compensation requirements it intends to establish.

While this bill deals only with voluntary arrangements, it nevertheless predicates compensation on the designation of lands as wetlands and provides compensation for those wetlands. This bill seeks to add a subsection (c) to Subdivision 7 of Section 1 of ECL § 49-0305 which reads: “[t]he State Uniform Wetlands Compensation/Tax Abatement Board shall justly compensate landowners for wetlands designations of such land at fair market value. . . “ Therefore, the bill seeks to statutorily compensate landowners solely on the basis of the status of their land, without requiring a showing of preclusion of intended development by the application and denial of a permit, or by illustrating how the redesignation thwarted the landowner’s reasonable investment-backed expectations. Because DEC’s Mitigation Guidelines provide ample means to allow development to occur despite a designation of a property as wetland, this automatic compensation requirement stands at odds with existing law. Furthermore, it is equivalent to a requirement that landowners be compensated for a rezoning of their property even if the landowner’s intended development project was unaffected by the redesignation. Because compensation is predicated on the designation of the easement, rather than the establishment of the easement itself, there appears to be no exhaustion requirement analogous to other takings requirements.

While A04231 operates under the rubric of the Conservation Easement Law and is specifically limited to conservation easements, A04231 appears to attempt an expansion of traditional compensation law. Significantly, the Conservation Easement Law notes that: “[n]othing in this title shall be construed to alter the authority otherwise available to any public body to acquire conservation easements for the purposes of section 49-0301 of this title by eminent domain.” Allowing this bill to pass in any form would do just that: it would reduce the capabilities of DEC to enter into conservation easement agreements or redesignate properties as wetlands due to budgetary constraints. Furthermore, this bill would make this provision moot because under the Open Space Plan, prior to an eminent domain proceeding, 90 days notice must be given to landowners to provid an opportunity to sell their property at fair market value. Because this process provides for fair market value compensation already, restricting the ability of DEC to enter into such conservation easement agreements with respect to wetlands properties by limiting the value that can be paid for such properties to the fair market value makes this provision unnecessary. The existence of Section 49-0309 indicates that the legislature intended different levels of compensation for conservation easements obtained voluntarily and those obtained under eminent domain. Allowing this bill to pass would undermine this legislative purpose.

 

2. Application to Easements

 

Conservation easements are considered negative easements and are often treated as exactions. Even if viewed as an exaction, conservation easements would not be compensable unless they were unrelated to the intended project or overly restrictive for the intended purposes. Because the intended project is the conservation of the lands and is not a predicate which must be satisfied prior to development of the remaining unaffected lands, these conservation easements would not be compensable, even if viewed as an exaction. As discussed above, conservation easements are generally not more restrictive than wetlands restrictions and therefore would not be unduly restrictive.

 

3. Role of Notice

 

Finally, this proposed bill raises some very serious concerns about the role of notice in compensation. If a property owner purchases a property with awareness of the requirement to obtain a development permit, such knowledge generally precludes the owner from arguing that her reasonable investment-backed expectations have been frustrated. This notice requirement has been dealt with substantially in the New York courts.

This bill seeks to do away with the notice limitation on the right to compensation by allowing individuals, fully aware of the status of a property as a wetland, to purchase that property, enter into a conservation easement agreement with DEC and receive the fair market value of that designation, even though the landowner may have paid a price for the land that was below the fair market value. This can happen because the individual purchased the property when it was valued based upon the value of existing potential uses. The individual then turned around to sell the easement at the fair market value of the designation, which incorporates the speculative value of developing the property and the speculative value of such wetlands restrictions being lifted. This speculative value will inevitably be higher in the long-term given the long-time horizon and the uncertainty of such designations. Therefore the fair market value of the designation of the easement will inevitably be higher than the fair market value of the same easement for a limited period of time. Because property values are based on a shorter time horizon than perpetuity, landowners acting with notice will be rewarded contrary to the notice requirement. Although this provides an incentive to land speculators to establish conservation easements, such an incentive comes at the price of a markup suffered by the public and at the price of undermining the notice requirement and increasing the game-playing by land speculators.

 

V. A04231 Fails to Address New York State’s Right to Invoke the Public Trust Doctrine as a Defense to Compensation for Wetlands Conservation

 

A04231 should not be passed or proposed again in its current form. Section 1, Subdivision 7(c) of the bill reads, “[T]he state uniform wetlands compensation/tax abatement board shall justly compensate landowners for wetlands designations of such land at fair market value and the board shall implement rules and regulations necessary to implement the provisions of this subdivision.” A04231 sec. 1, subdiv. 7(c) (Proposed Bill 2003). The language of this subdivision assumes that the government should automatically compensate landowners for the loss of their land when DEC designates wetlands on their private property. In addition, this language reflects the view that private property owners possess an unencumbered right to use their property. The Committee On Environmental Law (CEL), however, asserts that DEC, as an agent of the State, has the authority under the public trust doctrine to regulate for the environmental conservation of wetlands on private property and limit the use of private property for the protection of biodiversity. A04231 fails to address the public trust doctrine as a valid agency defense to a private landowner’s claim for compensation when DEC designates a wetland for protection on a landowner’s property. More importantly, the passage of the bill would diminish an important source of authority for the State under the public trust doctrine to manage and control natural resources for the benefit of the citizens of New York State.

In the seminal case Lucas v. South Carolina Coastal Council, the United States Supreme Court attempted to determine when a regulatory action constituted a taking. The case concerned a land developer who bought two residential lots located on a barrier island off the coast of South Carolina. Two years after the developer bought the property and was about to build, South Carolina passed the Beachfront Management Act in order to prevent the erosion of South Carolina’s beaches. The Act prohibited any development seaward of a baseline connecting historical points of erosion on the barrier island. The developer sued in the South Carolina Court of Common Pleas arguing that the legislation’s ban on the development of his lots in the restricted area was a taking of his property without just compensation. The Court agreed and awarded Lucas damages. An appeal was taken. The South Carolina Supreme Court reversed. The United States Supreme Court granted certiorari. Justice Scalia, writing for the Court, held that the regulatory action was a taking for which the developer was entitled to compensation because the regulation deprived the developer of all productive uses of his land.

The Court, quoting from the 1980 holding in Agins v. Tiburon, explained, “[T]he Fifth Amendment is violated when land use regulation ‘does not substantially advance legitimate state interests or denies an owner economically viable use of his land.’” The Court noted, however, that one could successfully challenge a takings claim if one could show that the governmental regulation was grounded in the background common law principles of property law or nuisance law prohibiting the use that the property owner intended or carried out on his land. In order to defeat a takings claim the government has to show that the public harm against which the regulation protects is one that historically has had major importance.

In 1970, Professor Joseph L. Sax, in his book entitled Defending the Environment: A Strategy for Citizen Action and article The Public Trust Doctrine in Natural Resources Law: Effective Judicial Intervention acknowledged the public trust doctrine as an important legal doctrine for preservation of the environment rooted in the background principles of the State’s property law. Legal scholars of regulatory takings have given careful attention to Sax’s work and argued that the public trust doctrine falls within the exception to a taking under the Lucas case.

 

A. Origin of the Public Trust Doctrine

 

The property principle of the public trust has its roots firmly established in the common law. In Roman law, the doctrine of the public trust originated during the reign of Emperor Justinian and was based on the idea that “certain common properties such as rivers, the seashore, and the air, were held by government in trusteeship for the free and unimpeded use of the general public.” Human beings were believed to have a common right to the beneficial use of these resources. These resources included rivers, air, oceans, certain aquatic wildlife and the shores.

Similarly, English common law adopted the idea of the state acting as a trustee of common property such as natural resources. The seashore, rivers, air and submerged lands were held to be under the control of the English crown for posterity. “The King held his preserves and his waters not as an absolute despot, but in trust for the people.” In America, the public trust doctrine became part of the legal system of the thirteen original colonies when the colonies adopted the system of English common law. After the War of Independence, title to lands previously held by the Crown in England passed to the people of the States where the land was located by virtue of the change in nationality, independence of the country and different treaties made. In addition, the passage of the Northwest Ordinance of 1787 established the doctrine of “equal footing.” This doctrine held that when a new state entered the Union, the new state would be granted the “same sovereignty and jurisdiction over the territory within its limits as the original thirteen states.”

Similarly, the existence of the public trust in New York began with a land grant by Charles II to the Duke of York on June 29, 1674 by letters patent. These letters patent did not give ownership in navigable waters and the soil beneath them to the Duke of York. Therefore, the Duke of York was a private property owner who could not parcel and sell the navigable waters associated with his property or the subsurface lands to individuals for personal gain. Rather, the letters patent established a “public domain that was to serve as a trust for the common use of the new community about to be established.” After the War of Independence, New York became a sovereign government and the people of New York, like the citizens of other states, succeeded the King in owning all lands within the State subject to the public trust.

The public trust doctrine resembles the elements of a private trust. First, the natural resources protected by the doctrine are viewed as the corpus, or Yes of the trust. Resources are viewed as assets managed under the public trust framework. Second, the public trustee, the State, fictionally “owns” the resources. State governments act as fiduciaries with the right to manage, sell and develop these assets in order to achieve the purposes of the trust. Third, the public serves as the beneficiary of the trust assets in the benefits gained from the use and preservation of these assets.

 

B. Expansion of the Public Trust Doctrine

 

Under English common law, tidelands were solely subject to the public trust. In the United States, however, state case law has expansively interpreted the doctrine to include inland navigable and non-navigable fresh and marine waters and tidal areas. In addition, the United States Supreme Court and several state courts, including the New York Court of Appeals, have extended the doctrine to other types of resources such as wildlife, public parks, beaches, estuaries and other important aquatic ecosystems including wetlands.

In Phillips Petroleum v. Mississippi, the United States Supreme Court faced the issue of whether the public trust doctrine extended to navigable tidal wetlands only or also encompassed non-navigable and non-tidal wetlands. The case concerned ownership of 42 acres of land beneath the northern branch of Bayou LaCroix and eleven small drainage streams in southern Mississippi. Petitioners, record title holders of the property, filed suit against the State of Mississippi to remove clouds from title resulting from oil and gas leases granted by the State. The State of Mississippi claimed ownership of the property and issued oil and gas leases on the basis that the State possessed ownership of the property under the public trust doctrine when Mississippi entered the Union in 1817.

The United States Supreme Court granted certiorari to review the Mississippi Supreme Court’s decision, which held that the submerged lands belonged to the State of Mississippi by virtue of the public trust doctrine. The Court affirmed the decision of the Mississippi Supreme Court and held that Mississippi “owned” the property upon its admission to the Union in 1817 and that the doctrine of the public trust extended to all types of wetlands. The Court stated:

[i]t has long been established that the individual States have the authority to define the limits of the lands held in public trust and recognize private rights in such lands as they see fit. . . States have interests in lands beneath tidal waters which have nothing to do with navigation. . . .If States do not own lands under non-navigable tidal waters, many state and land grants based on our earlier decisions might now be invalid.

Likewise, in Adirondack League Club Inc. v. Sierra Club, the Third Department of the New York Supreme Court, Appellate Division considered the question of whether the public had the right to use a navigable river for canoeing under the public trust doctrine even if a landowner claimed ownership of the land underneath the water. Plaintiff, a private club, brought an action for trespass to land against the defendant, Sierra Club, seeking permanent injunctive relief and a declaration to have a twelve-mile portion of a river declared non-navigable. The defendants had canoed in the South Branch of the Moose River in the Adirondack Mountains. The defendants canoed through twelve miles of the river located over submerged lands of which the plaintiff claimed ownership. The State and another organization intervened as defendants and counterclaimed that “no trespassing” signs erected by the private club constituted a nuisance. Both parties made motions for summary judgment. The Supreme Court denied the motions. The plaintiff appealed. The Appellate Division held that the plaintiff was not entitled to summary judgment and that the public had rights in the South Branch of the Moose River due to the existence of the public trust doctrine in New York State. The Appellate Division stated, “[T]he public has certain rights in the South Branch of the Moose River. Pursuant to the public trust doctrine, the public right of navigation in navigable waters supersedes plaintiff’s private right in the land under the water.”

 

C. The Importance of Wetlands as Ecological Assets to Be Protected for the Public Benefit

 

The holding of the Lucas case suggests that the government can defeat a takings claim if the government demonstrates that the public harm against which the regulatory action protects is one that historically has had major importance. DEC can demonstrate that the conservation of wetlands on private property protects against harm to the public health, safety and welfare. The preservation of wetlands in New York State and throughout the United States confers important benefits on future generations. First, wetlands are places of great biodiversity. One of the major benefits of wetland conservation is the preservation of communities of animals, plants and microorganisms that play a vital role in ecosystem services. Biodiversity is vital to maintaining healthy ecosystems of which human beings are a part by cycling nutrients and gases, disposing of wastes, pollinating plants and protecting crops and animals from overpopulation and pests. Paul R. Ehrlich, Professor of Biological Sciences at Stanford University, writes that “[t]he extirpation of populations and species of organisms exerts its primary impact on society through the impairment of ecosystem services. When a population playing a certain role is wiped out, ecosystem services suffer.”

Edward O. Wilson, the renowned Professor of Sciences and Entomology at Harvard University’s Museum of Comparative Zoology, echoes this view in his book entitled, The Diversity of Life. Wilson writes:

[b]iological diversity—is the key to the maintenance of the world as we know it. . . . .Every species is part of an ecosystem, an expert specialist of its kind. . . .as it spreads its influence through the food web in other species, reducing or even extinguishing others, risking a downward spiral of the larger assemblage.

Second, preservation of wetlands and their biodiversity have value for the public health and welfare as genetic reservoirs. Animals and plants have unique combinations of genetic characteristics that enable them to adapt to different environments. Scientists believe that preserving gene pools, the sum of all the genes of individual members in a given population, can prove useful to future generations in the discovery of medicines and understanding certain diseases. Wilson writes:

[f]ew are aware of how much we already depend on wild organisms for medicine. . . .In the United States a quarter of all prescriptions dispensed by pharmacies are substances from plants. Another 13 percent come from microorganisms and 3 percent more from animals, for a total of over 40 percent that are organism derived.

Preservation of wetlands is therefore critical in the preservation of our health.

Third, wetlands nurture wildlife, purify water, revitalize groundwater systems, maintain water tables in ecosystems and prevent floods. Wetlands located in inland areas provide important habitat for freshwater fish and wildlife including one-third of all the bird species in North America. Populations of birds thrive in wetlands because wetlands provide them with a dense concentration of food sources and protection from predators. Birds, in turn, benefit humans by scattering seeds, pollinating flowers and controlling overpopulation of species. Prof. Neil A. Campbell, in his book entitled Biology, describes the important relationship between animals and flowering plants. Campbell writes:

[r]elationships between angiosperms and animals are also evident in the edible fruits of angiosperms. One of the most common colors of ripe fruit, is red, a color that insects can’t see very well. Thus, most of the fruit is saved for birds and mammals, animals large enough to disperse seeds. Again, we see that one of the keys to angiosperm success has been the interaction with animals.

Preservation of wetlands is therefore also critical in the preservation of our food supply.

Lastly, the preservation of wetlands and their biodiversity protects against harm to the public health, safety and welfare by saving both money and the environment for the public. Conserving wetlands saves the cost of installing or enlarging storm sewer systems, filters runoff from impervious surfaces and pollution, reduces the need for tax payer money to operate water pollution control programs, maintains the ecological health of lakes, streams and other bodies of water encouraging beach, fishing, boating and tourism, enhances property values of residential neighborhoods by keeping neighborhoods beautiful, and improves the lives of the public by providing places of recreation, reflection and wonder in experiencing wildlife in its natural habitat and exploring green spaces.

 

D. Courts Recognize the Nearly Paramount Importance of Wetlands and Biodiversity Preservation

 

Federal and state courts including courts in New York State have recognized that regulatory actions conserving wetlands and biodiversity protect the public health, safety and welfare and that the purpose of such regulation is a firmly-established value of great importance in the American legal tradition. In Missouri v. Holland, Justice Holmes writing for the United States Supreme Court in 1920 acknowledged that preservation of wildlife such as migratory birds was very nearly a paramount public interest because the continued survival of migratory birds maintained the well-being of the nation’s forests and raising of crops for the public. Justice Holmes wrote:

[h]ere a national interest of very nearly the first magnitude is involved. . . There soon might be no birds for any powers to deal with. We see nothing in the Constitution that compels the government to sit by while a food supply is cut off and the protectors of our forests and our crops are destroyed.

Similarly, in Barret et al. v. State, the New York Court of Appeals in 1917 held that the preservation of species such as beavers was a matter of important public interest within the discretion of the government and that the legislature had the general right to act as a trustee to protect them. The Court of Appeals stated that “the general right of the government to protect wild animals is too well established to be now called into question. Their ownership is in the state in its sovereign capacity, for the benefit of all the people. Their preservation is a matter of public interest.”

Likewise, in Goldhirsch v. Flacke, the Second Department of the New York Appellate Division recognized that a denial of a building permit for the construction of homes was proper because the construction would have an adverse impact on freshwater wetlands that provide specific important benefits to the public such as “open space and aesthetic appreciation in a major urban area, wildlife habitat for diverse species, storm control and recreation.” In the same way, the New York State Supreme Court in Rappl & Hoenig Co., Inc. v. New York State Department of Environmental Conservation acknowledged that “[i]t is . . . the public policy of the state to preserve, protect and conserve . . . wetlands and the benefits derived there from, to prevent the despoliation and destruction of . . . wetlands, and to regulate use and development of such wetlands to secure the natural benefits of . . . wetlands, consistent with the general welfare and beneficial economic, social and agricultural development of the state.”

 

 

CONCLUSION

 

A04231 should not be passed or proposed again in its current form because the language of the proposed bill lacks clarity, creates an incentive structure that undermines the purposes of the Conservation Easement Act, is inconsistent with existing law, and assumes that the government should automatically compensate landowners for the loss of use of land when DEC designates wetlands on their private property. The bill is deficient in that it does not address the authority DEC has under the public trust doctrine to regulate for the environmental conservation of wetlands on private property and limit the use of private property for the protection of biodiversity. Moreover, the passage of the bill would diminish an important source of authority for New York State government under the public trust doctrine to manage and control natural resources for the benefit of the citizens of New York State. For all the foregoing reasons presented in this legislative report, A04231 should not be passed or proposed in the future in its current form.

Dated: September 4, 2003

 

Footnotes:

 

1. N.Y. Envtl. Conserv. Law §§ 01-0101 et. seq. (2003).

2. The other bills, A2811 (tax abatement and real property law) and A2812 (buffer zone around house) propose a Citizens Expertise Fund to reimburse property owners for challenges made to wetlands designations and a detailed tax abatement program.

3. N.Y. Dep’t of Envtl Conserv., New York State Article 24 Freshwater Wetland Map Filing Dates by County, http://www.dec.state.ny.us/website/dfwmr/ habitat/CountyFilingDates.html (last revised Apr. 3, 2003).

4. N.Y. Dep’t of Envtl. Conserv., News: DEC Proposes to Amend Freshwater Wetland Maps: Saratoga County to be remapped, May 5, 1999, http://www.dec.state.ny.us/website/ press/pressrel/99-55.html.

5. Id. (quoting Commissioner Cahill).

6. N.Y. Dep’t of Envtl. Conserv., News: DEC Sets Additional Meetings on Saratoga County Wetlands Maps, June 15, 1999, http://www.dec.state.ny.us/website/press/pressrel/99-85.html.

7. See Carol W. Lagrasse, DEC Should Revisit Wetlands Mapping, Bus. Rev., Sep. 27, 1999 (hereinafter Lagrasse,

Revisit Wetlands Mapping), available at http://Albany.bizjournals.com/Albany/stories/1999/ 09/27/editorial4.html (last visited June 6, 2003); Carol W. Lagrasse, Commentary: Protecting Wetlands and Landowners’ Rights, Times Union, Sept. 22, 1999 (Albany, N.Y.) (hereinafter Lagrasse, Commentary) (citing Patricia Riexinger, DEC Freshwater Wetlands Program Manager).

8. N.Y. Dep’t of Envtl. Conserv., Letter to Property Owner from Gerald A. Barnhart, Director, Division of Fish, Wildlife & Marine Resources (Nov. 15, 2000) (hereinafter DEC Letter), available at http://prfamerica.org/DEC- Letter11-15-00.html (last visited June 8, 2003).

9. The proposed maps allegedly contained “many egregious errors” including noting “houses and dry woodlots” as wetlands. See Lagrasse, Commentary, supra note 7.

10. Lagrasse, Revisit Wetlands Mapping, supra note 7. Although in certain circumstances the presence of the other two characteristics may be inferred from the presence of one of the characteristics, and this methodology of designating wetlands is acceptable under the United States Army Corps of Engineers’ 1989 Delineation Manual, funding for designations made under that manual has been cut, causing the USACE to resort to delineations under the 1987 Delineation Manual, which indicates that all three characteristics must be present. See Sharon M. Mattox, Regulatory Obstacles to Development and Redevelopment: Wetlands and Other Essential Issues, SC18 ALI-ABA 893, 904-07 (Am. L. Inst. Sept. 25, 1997). The DEC Freshwater Wetlands Delineation Manual does not require the presence of all three characteristics (despite likening itself to the 1987 USACE Delineation Manual), but does require the presence of hydrophytic vegetation. See N.Y. Dep’T Of Envtl. Conserv., New York State Freshwater Wetlands Delineation Manual (1995), at http://www.dec.state.ny.us/website/ dfwmr/habitat/wdelman.pdf. Of course, wetlands smaller than 12.4 acres can be designated if they have “unusual local importance.” See id. at 1.

11. Lagrasse, Revisit Wetlands Mapping, supra note 7.

12. Id.

13. Id.

14. Id. Compare Lagrasse, Revisit Wetlands Mapping, supra note 7 (“At least 550 property owners made formal requests that the designation of their property be reconsidered”). Of course, the proposed amendments did not constitute a final agency determination with regards to wetlands designations. DEC Letter, supra note 8.

15. See infra Part IV.E.

16. See Lagrasse, Revisit Wetlands Mapping, supra note 7.

17. They could come from a number of sources, such as the Department of Taxation and Finance, the Conservation Fund, the Environmental Protection Fund, or the Clean Water/Clean Air Bond Act funds, none of which directly impact the operation of DEC. See N.Y. State Fin. Law § 83(b) (2003); infra note 191 and accompanying text.

18. For a review of the problem of regulator accountability in the takings context, see Vicki Been & Joel C. Beauvais, The Global Fifth Amendment? NAFTA’s Investment Protections and the Misguided Quest for an International “Regulatory Takings” Doctrine, 78 N.Y.U. L. Rev. 30, 88-100 (2003).

19. D.D. Hook, The Ecology And Management Of Wetlands 7-8 (1988); see also Part V.C infra.

20. Coastal Zone Management: Hearing Before the Nat’l Ocean Pol’y Study of the Comm’n on Commerce, Sci. and Transport of the Senate, 100th Cong., 1st Sess. 1, 38 (1987) (statement of Dr. Donald F. Boesch, Executive Director, Lousiana University Marine Consortium); Linda A. Malone, The Coastal Zone Management Act and the Takings Clause in the 1990s: Making the Case for Federal Land Use to Preserve Coastal Areas, 62 U. COL. L. REV. 711, 712 (1991); Mark A. Chertok, Federal Regulation of Wetlands, SG101 ALI-ABA 1049, 1051 (2002) (citing M. Holloway, High and Dry: New Wetlands Policy Is a Political Quagmire, Sci. Am., Dec. 1991, at 20).

21. Forrest Stearns, Management Potential: Summary and Recommendations, in Freshwater Wetlands: Ecological Processes And Management Potential 360 (Ralph E. Good et al. eds. 1978); William Odum, Non-Tidal Freshwater Wetlands in Virginia, 7 Va. J. Nat. Resources L. 421, 431 (1988); Bhavani P. Nerikar, Comment, This Wetland is Your Land, This Wetland Is My Land: Section 404 of the Clean Water Act and Its Impact on the Private Development of Wetlands, 4 Admin L.J. 197, 203 (1990).

22. Richard C. Ausness, Regulatory Takings and Wetland Protection in the Post-Lucas Era, 20 Land & Water L. Rev. 349, 356 (1995) (internal citations omitted).

23. Id. at 1051-52.

24. Id. at 1051. See also HOOK, supra note 19, at 52-53.

25. Anne D. Marble,A Guide To Wetland Functional Design 31-66 (1992); S. Wesley Woolf & James E. Kundell, Georgia Wetlands: Values, Trends, and Legal Status, 41 Mercer L. Rev. 791, 793 (1990); Oliver A. Houck, Land Loss in Coastal Louisiana: Causes, Consequences, and Remedies, 58 Tul. L. Rev. 3, 88-89 (1983); Odum, supra note 21, at 433; Wetlands Conservation: Hearings Before the Subcomm. on Fisheries and Wildlife Conserv. and the Env’t of the House Comm. on Merch. Marine and Fisheries, 101st Cong., 1st Sess. 1, 236 (1989) (statement of Janice L. Goldman-Carter, Fisheries and Wildlife Div., Nat’l Wildlife Fed’n); Jeter M. Watson & Richard H. Sedgley, Land Use Regulation by the Virginia Marine Resources Commission: The Virginia Wetlands Act and Coastal Primary Sand Dune Protection Act, 7 Va. J. Nat. Resources L. 381, 386 (1988); Kevin O’Hagan, Comment, Pumping with Intent to Kill: Evading Wetlands Jurisdiction Under Section 404 of the Clean Water Act Through Draining, 40 Depaul L. Rev. 1059, 1063-65 (1991).

26. O’Hagan, supra note 25, at 1064; Denis Binder, Taking Versus Reasonable Regulation: A Reappraisal in Light of Regional Planning and Wetlands, 25 U. Fla. L. Rev. 1, 18-19 (1972); Houck, supra note 25, at 76; Mary K. McCurdy, Application of the Public Trust: Public Trust Protection for Wetlands, 19 ENVTL. L. 683, 697 (1989).

27. Ofc. Of Tech. Assessment, Wetlands: Their Use And Regulation 44 (1984) [Hereinafter Wetlands Use And Regulation].

28. D.F. Whigham Et Al., Wetland Ecology And Management: Case Studies 64-65 (1990); Wetlands Use And Regulation, supra note 27, at 46.

29. Stephen M. Johnson, Federal Regulation of Isolated Wetlands, 23 Envtl. L. 1, 3 (1993); Hope Babcock, Federal Wetlands Regulatory Policy: Up to Its Ears in Alligators, 8 Pace Envtl. L. Rev. 307, 309 (1991); Stewart L. Hofer, Comment, Federal Regulation of Agricultural Drainage Activity in the Prairie Potholes: The Effect of Section 404 of the Clean Water Act and the Swampbuster Provisions of the 1985 Farm Bill, 33 S.D. L. Rev. 511, 527 (1987); see also Janet Lyons & Sandra Jordan, Walking The Wetlands 171 (1989).

30. Woolf & Kundell, supra note 25, at 797.

31. N.Y. Dep’t of Envtl. Conserv., A Brief Description of the Freshwater Wetlands Act and What it Means to Wetlands Landowners, available at http://www.dec.state.ny.us/website/ dfwmr/habitat/wetdes.htm (last visited April 7, 2003); see also N.Y. Dep’t of Envtl. Conserv., Wetlands Functions and Values, available at http://www.dec.state.ny.us/website/ dfwmr/habitat/fwwprog2.htm (last visited June 25, 2003) (noting that wetlands provide functions and benefits that include: flood protection and abatement, erosion and sediment control, water quality maintenance, recharging groundwater supplies, maintaining surface flows, fish and wildlife habitats, nutrient production and cycling, recreation, open space, educational and scientific research, and biological diversity).

32. N.Y. Envtl. Conserv. Law §§ 24-0101 et. seq. (2003).

33. Id. § 24-0103 (2003).

34. Id. § 49-0301 (2003).

35. Id. 

36. See Thomas E. Dahl & Craig E. Johnson, U.S. Dep’T Of Interior, Status And Trends Of Wetlands In The Coterminous United States: Mid-1970S To Mid -1980S 2-3 (1991).

37. See id.

38. N.Y. Dep’t of Envtl. Conserv., Freshwater Wetlands Status and Trends, available at

http://www.dec.state.ny.us/website/ dfwmr/habitat/fwwprog3.htm (last visited June 25, 2003).

39. Id. In the United States generally, agricultural conversion is the largest cause of inland wetland losses, while port development and other transportation hub-related dredging is the largest cause of estuarine wetland losses. See Wetlands Use And Regulation, supra note 27, at 7, 170; Dahl & Johnson, supra note 36, at 2; Joseph G. Theis, Wetlands Loss and Agriculture: The Failed Federal Regulation of Farming Activities Under Section 404 of the Clean Water Act, 9 Pace Envtl. L. Rev. 1, 4 (1991); James T.B. Tripp & Michael Herz, Wetland Preservation and Restoration: Changing Federal Priorities, 7 Va. J. Nat. Resources L. 221, 221 n.2 (1988).

40. Margot Anderson & Richard Magleby, Agricultural Resources And Environmental Indicators, 1996-1997, 310 (1997).

41. For a list of filing dates of DEC wetlands maps by region, see N.Y. Dep’t of Envtl. Conserv., New York State Article 24 Freshwater Wetland Map Filing Dates by County, available at http://www.dec.state.ny.us/website/ dfwmr/habitat/CountyFilingDates.html (last visited June 25, 2003).

42. Reduced farm incomes appear to be a large cause of such reversions. See Anderson & Magleby, supra note 40, at 316 (noting greatly reduced agricultural conversions between 1982-1992, and the elimination of government payments as part of farm income derived from converted lands); Ofc. Of Envtl. Pol’Y & Compliance, Dep’T Of Interior, The Impact Of Federal Programs On Wetlands, Vol. 2, ch. 15 (1994) (“It may be technically possible for wet cropland drained . . . to revert to wetlands, and in the absence of the subsidized drainage, farm operators might ultimately find it financially unattractive to continue working the land and allow the reversion.”), available at http://www.doi.gov/oepc/ wetlands2/index.html (last visited June 25, 2003).

43. See, e.g., Tex. Parks & Wildlife Dep’t, Texas Wetlands, available at http://www.tpwd.state.tx.us/wetlands/ ecology/wetland_types.htm (last visited June 25, 2003).

44. Wetlands Conservation: Hearings Before the Subcomm. on Fisheries and Wildlife Conserv. and the Env’t of the House Comm. on Merch. Marine and Fisheries, 101st Cong., 1st Sess., 1, 9 (1991) (between 300,000 and 450,000 acres lost annually) (statement of Ralph Morgenwerk, Asst. Dir. of Fish and Wildlife Enhancement, U.S. Fish and Wildlife Serv.); U.S. Fish And Wildlife Serv., Wetlands Of The United States: Current Status And Recent Trends 31 (1984) (400,000 acres lost annually); Michael C. Blumm & D. Bernard Zaleha, Federal Wetlands Protection Under the Clean Water Act: Regulatory Ambivalence, Intergovernmental Tension, and a Call for Reform, 60 U. Colo. L. Rev. 695, 698 (1989) (between 300,000 and 500,000 acres lost annually).

45. Robert H. Levin, Note, When Forever Proves Fleeting: The Condemnation and Conversion of Conservation Land, 9 N.Y.U. Envtl. L.J. 592, 598-99 (2001) (“Irreversibility looms large in the background of every conservation and condemnation question. Once land is developed, it is nearly impossible, for economic and ecological reasons, for it to ever return to its natural state.”).

46. D.F. Whigham Et al., supra note 28, at 68; Jan Goldman-Carter, Protecting Wetlands and Reasonable Investment-Backed Expectations in the Wake of Lucas v. South Carolina Coastal Council, 28 Land & Water L. Rev. 425, 450-52 (1993); Michael Williams, Wetlands:A Threatened Landscape 302 (1990); Woolf & Kundell, supra note 25, at 796.

47. See, e.g., Monica K. Kalo & Joseph J. Kalo, The Battle to Preserve North Carolina’s Estuarine Marshes: The 1985 Legislation, Private Claims to Estuarine Marshes, Denial of Permits to Fill, and the Public Trust, 64 N.C. L. REV. 565, 567 (1986) (noting the decreased yield from commercial and recreational fishing as a result of reduced coastal marshlands).

48. Natural Res. Conserv. Serv., U.S. Dep’t Of Agric., Summary Report: 1997 National Resources Inventory 39 (2000), available at http://www.nrcs.usda.gov/technical/NRI /1997/summary_report/report.pdf.

49. See infra Parts IV & V.

50. Tug Hill Comm’n, Issue Paper Series: Conservation Easements 4 (2000), at http://www.tughill.org (noting that the federal regulations governing such appraisals are extensive). For additional information regarding methods of appraising conservation easements, see Deb Brighton & Davis J. Cable, Taxation Of Land Subject To Conservation Easements In Vermont:A Lister’S Guide (Nov. – Dec. 1992).

51. Richard J. Kohlman, Condemnation of Easements, 22 AM. JUR. Trials 743 § 3(e) (2003).

52. Though the Internal Revenue Code (IRC) only deals with the donations of properties or bargain sales, see infra Parts IV.C.1 & IV.C.3, there is no reason why such a system should not be similarly used in the context of sales, since the valuation process is the same.

53. For a discussion of the origin of agency “capture” theories, see Richard B. Stewart, Administrative Law in the Twenty-First Century, 78 N.Y.U. L. Rev. 437, 441 (2003); see also Bradford C. Mank, Superfund Contractors and Agency Capture, 2 N.Y.U. Envtl. L.J. 34, 49-54 (1993).

54. U.S. Fish And Wildlife Serv., Wetlands Of The United States: Current Status And Recent Trends 5 (1984). See also Ausness, supra note 22, at 353-54.

55. N.Y. Envtl. Conserv. Law § 25-0302 (2003).

56. N.Y. Dep’t of Envtl. Conserv., A Brief Description of the Freshwater Wetlands Act and What it Means to Wetlands Landowners, available at http://www.dec.state.ny.us/website/ dfwmr/habitat/wetdes.htm (last visited April 7, 2003).

57. Id. This authority is provided by N.Y. Comp. Codes R. & Regs. tit. 6, § 664 (2003). A supplemental classification process is currently being undertaken as part of DEC’s Natural Heritage Program. See N.Y. Dep’t of Envtl. Conserv., Other Wetlands Conservation Programs, available at http://www.dec.state.ny.us/website/ dfwmr/habitat/fwwprog7.htm (last visited June 25, 2003).

58. N.Y. Dep’t of Envtl. Conserv., Tidal Wetlands Categories, available at http://www.dec.state.ny.us/website/ dfwmr/marine/twcat.htm (last visited June 25, 2003).

59. N.Y. Dep’t of Envtl. Conserv., Tidal Wetlands Permit Program: Standards for Issuance, available at http://www.dec.state.ny.us/website/ dcs/tidalwet/tidalwet05.html (last visited June 25, 2003).

60. See N.Y. Dep’t of Envtl. Conserv., Tidal Wetlands Land-Use Regulations (6 N.Y.C.R.R. Part 661), available at http://www.dec.state.ny.us/website/ dcs/tidalwet/tw009.html (last visited June 25, 2003).

61. See infra Part IV.A.

62. This “fair market value” standard applied in the Conservation Easement Law does not ensure that there is a “minimum acceptable level of public benefits that should be expected from an easement funded in whole or in part with public funds” given the vast variety of easements possible. Northern Forest Alliance, Conservation Easements In The Northern Forest, available at http://www.northernforestalliance.org/ newspubs/1easements/ NFAeasements.htm (last visited June 30, 2003) [hereinafter NORTHERN FOREST EASEMENTS]. While the Open Space Plan establishes minimum standards, as well as for easements purchased with Clean Water/Clean Air Bond Act monies, this does not guarantee such a minimum level of public benefit, or a proper cost-benefit analysis prior to entering into the easement agreement. See N.Y. Envtl. Conserv. Law § 56-0307(1) (2003); see also infra Part IV.A.1.

63. See infra Part III.C.

64. This one-size-fits-all approach has been soundly criticized. For instance,

[t]wo overarching concepts must be considered with these, or any, principles regarding conservation easements. First, easements will differ based on the values and objectives of the landowner, the easement holder, the funders, and the public at large. Public interests are particularly important where public funds are involved or where a public agency will be the easement holder. Second, every easement will be tailored to the unique characteristics of the land it covers—its size, biophysical character, and geographical context—and must be based on a comprehensive resources analysis of the property. There is no such thing as an ideal “one-size- fits-all” easement.

Northern Forest Easements, supra note 62.

65. Other conservation easement laws, however, create categories of easements based upon levels of protections afforded, thus starting the process of valuing easements by function. See, e.g., Forest Conservation Law, Montgomery County Council, Md. (July 1, 1992) (creating categories of conservation easements, with different activities restricted and allowed for each category of easements). While “[e]very easement is unique and tailored to the particular property and the interests of the landowner, the easement holder, and the programs or organizations providing funding for the easement’s purchase,” Northern Forest Easements, supra note 62, the proposed law does not do enough to assist the Board in valuing easements based upon the value of the easement to the public, but rather requires the valuation to be based upon the value lost to the landowner, despite the voluntary nature of the transaction.

66. Northern Forest Easements, supra note 62.

67. See id.

68. See, e.g., In re Acquisition of Easements by Albany County Airport Auth., 265 A.D.2d 720, 696 N.Y.S.2d 305 (3d Dep’t 1999), lv. denied, 94 N.Y.2d 758, 705 N.Y.S.2d 5 (2000).

69. N.Y. Envtl. Conserv. Law § 24-0701(2) (2003) imposes restrictions upon development within the buffer zone of wetlands designations.

70.  Am. Conserv. Real Estate, Conservation Easements, available at http://www.conservationrealestate. com/coneasements.htm (last visited June 30, 2003) [hereinafter Conservation Easements].

71. This is not the only means of becoming a DEC-regulated wetland, as wetlands smaller in size than 12.4 acres may be regulated by DEC if such parcels, in combination with other parcels, constitute 12.4 acres, or if such wetlands, though being smaller than 12.4 acres, nevertheless are so locally important as to warrant regulation. N.Y. Dep’T Of Envtl. Conserv., New York State Freshwater Wetlands Delineation Manual 1 (1995), at http://www.dec.state.ny.us/website/ dfwmr/habitat/wdelman.pdf. Nevertheless, for the purpose of this Comment and simplification purposes, we treat this acreage minimum as the sole jurisdictional ground under which DEC may assert its regulatory powers over wetlands.

72. See infra Part IV.C.2 for a discussion of the desirability of the double incentive structure proposed by A04231. This double incentive may be desirable in certain circumstances, while in others, not. Therefore, under such a system, the functional value of the particular parcel of wetlands to be conserved is of utmost importance in determining the amount of compensation that should be tendered, and categorical compensation is therefore inappropriate.

73. N.Y. Em. Dom. Proc. Law § 101 (2003).

74. N.Y. Envtl. Conserv. Law § 49-0203(3) (2003).

75. Id.

76. N.Y. Em. Dom. Proc. Law § 303 (2003).

77. N.Y. Envtl. Conserv. Law § 49-0211(1), (3) (2003); N.Y. JUR. 2D Envt. § 65 (2003).

78. See Christopher A. Bauer, Note, Government Takings and Constitutional Guarantees: When Date of Valuation Statutes Deny Just Compensation, 2003 B.Y.U. L. Rev. 265, 273 (2003); David A. Dana & Thomas W. Merrill, Property: Takings 169 (2002); see also Keator v. State, 23 N.Y.2d 337, 296 N.Y.S.2d 767 (1968).

79. Carmen F. Randolph, The Law Of Eminent Domain In The United States § 285, at 262 (photo. reprint 1991) (1894).

80. See Bauer, supra note 78, at 276 & n.62.

81. See id. at 283-84, 296-98.

82. See infra Part IV.A.1.

83. N.Y. Const., art. I, § 7(a). See also 3 JULIUS L. SACKMAN, NICHOLS ON EMINENT DOMAIN §8.01 n.14 (rev. 3ded. 2001), for judicial applications of the constitutional provision of “just compensation.”

84.See, e.g., Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 10 (1984).

85. See, e.g., J.D. Eaton, Real Estate Valuation In Litigation 13 (2d ed. 1995).

86. See, e.g., Sidney Z. Searles, The Law of Eminent Domain, SB48 ALI-ABA 1, 8 (Am. L. Inst. 1997)

87. Searl v. Schl. Dist., 133 U.S. 553 (1890).

88. Thomas W. Merrill, Incomplete Compensation for Takings, 11 N.Y.U. Envtl. L.J. 110, 117-18 (2002) (citing Roger P. Smith, Real Property Valuation for Foreign-Wealth Deprivations, in 1 The Valuation Of Nationalized Property In International Law 141 (Richard B. Lillich ed., 1972)).

89. A benefit to the taker standard of compensation, or a restitution/unjust enrichment theory of compensation, would result in higher awards because “condemnations of land typically increase the value of the property taken.” Id. at A loss to owner standard of compensation, or indemnification standard, would also result in higher awards by providing compensation for the subjective value of the property to the individual owner as well as consequential damages such as lost profits, locational benefits, moving expenses, etc., otherwise lacking in a “fair market value” standard. Id. at 118-19. While it is possible for an indemnification standard to result in a lower award, that would only occur “in those relatively rare cases where an owner obtains some offsetting benefit from the taking.” Id. at Merrill views the “fair market value” standard as providing incomplete compensation. Id. at 111.

90. See id.

91. Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 10 (1984). The Court noted that this standard of compensation does not fully indemnify the owner for particularized sentimental or specialized value placed on the property, but that the “need for a clear, easily administrable rule governing the measure of ‘just compensation’” outweighed such occasional inequities. Id. at 10 n.15 (internal citations omitted).

92. 4 JULIUS L. SACKMAN, NICHOLS ON EMINENT DOMAIN §12.02[1], at 12-60 to 12-67 (rev. 3d ed. 2001)

93. In re Lido Blvd., Town of Hempstead, Lido Beach, Nassau County, 43 A.D.2d 45, 349 N.Y.S.2d 422 (2d Dep’t 1973), aff’d, 39 N.Y.2d 958, 386 N.Y.S.2d 886; Thomas W. Merrill, supra note 88, at 118 (citing United States v. Causby, 328 U.S. 256, 261 (1946)). This means that awards are not limited to compensating landowners for the value of the current uses, but based upon the most advantageous use to which the land could be developed. Matter of Town of Esopus, 162 A.D.2d 829, 557 N.Y.S.2d 732 (3d Dep’t 1990), lv. denied, 77 N.Y.2d 801, 566 N.Y.S.2d586; Dillenbeck v. State, 193 Misc. 542, 83 N.Y.S.2d 308 (N.Y. Ct. Cl. 1948), aff’d, 275 A.D. 871, 88 N.Y.S.2d 389 (3d Dep’t 1949).

94. Searles, supra note 86, at 9.

95. See DANA & MERRILL, supra note 78, at 169-90.

96. Merrill, supra note88, at 130.

97. Id. at 132.

98. Levin, supra note 45, at 602.

99. See infra Part V.

100. See id.

101. For a discussion of the inherent value of property in defining personhood, see Margaret Jane Radin, Property and Personhood, 34 STAN. L. REV. 957 (1982).

102. Levin, supra note 45, at 626 (proposing a “comprehensive set of procedural and substantive restrictions that reflect the complexities of conversion and condemnation,” thereby “raising the cost and time it takes to convert or condemn conservation property” in order to prevent “rash and unnecessary conversions and condemnations”).

103. See, e.g., Bath & Hammondsport R. Co. v. Dep’t of Envtl. Conserv., 73 N.Y.2d. 434, 541 N.Y.S.2d 732 (1989); In re Fowler, 53 N.Y. 60 (1873).

104. Wechsler v. Dep’t of Envtl. Conserv., 153 A.D.2d 300, 550 N.Y.S.2d 749 (3d Dep’t 1990), aff’d, 76 N.Y.2d 923, 563 N.Y.S.2d 50; Application of Residents of Summer Haven, Hamlin, NY, 202 Misc. 682, 110 N.Y.S.2d 186 (N.Y. Sup. 1952); Richard J. Kohlman, Condemnation of Easements, 22 AM. JUR. Trials 743 § 5 (2003).

105. Levin, supra note 45, at 600. This is of particular concern since “[p]rotected conservation land will almost always be a less expensive condemnation option than an already developed site. The disparity is even more glaring if the government already owns the protected property, for it need not go through condemnation proceedings or acquire right-of-way access.” Id. at 600, 626-37 (arguing that greater procedural roadblocks to conversion or condemnation of conservation easements are necessary to ensure that they are not unduly taken). A telling example of the ease with which such conservation easements can be extinguished is the case of Massachusetts, which, although requiring that such condemnations be approved by a 2/3 vote by both the municipality and the state legislature, over 85% of the proposed condemnations were passed by both and undertaken. See id. at 605-06 (citing OPEN SPACE SUBCOMM’N OF THE JOINT COMM’N ON LOCAL AFFAIRS, GEN. CT. OF MASS., NEW SCHOOL CONSTRUCTION AND THE LOSS OF ARTICLE 97 LAND 13 (2000).

106. Ossining Urban Renewal Agency v. Lord, 39 N.Y.2d 628, 385 N.Y.S.2d 28 (1976). However, “[h]uge economic incentives are the major driving force behind the high number of Massachusetts conversions, as the towns need not pay to convert their open space land.” Levin, supra note 45, at 606 (internal citations omitted).

107. Id. at 610-12 (but noting that “governmental acquisition programs are not created to protect property from imminent condemnation”).

108. LAND TRUST ALLIANCE & NAT’L TRUST FOR HISTORIC PRESERVATION, APPRAISING EASEMENTS (1990).

109. See Bauman v. Ross, 167 U.S. 548, 574 (1897); Donaloio v. State, 99 A.D.2d 335, 472 N.Y.S.2d 946 (3d Dep’t 1984), aff’d, 64 N.Y.2d 811, 485 N.Y.S.2d 924; 4A JULIUS L. SACKMAN, NICHOLS ON EMINENT DOMAIN §14A.01[2], at 14A-4 (rev. 3d ed. 2001). It may also be important, though for different reasons, to compute the fair market value of the real property interest of the holder of the easement. See INTERAGENCY COMM. FOR OUTDOOR RECREATION, GUIDELINES FOR USE OF CONSERVATION EASEMENTS: RIPARIAN HABITAT GRANT PROGRAM 17 (1999), for an example of how to compute such a value.

110. Searles, supra note 86, at 13.

1111. Id.

112. Id. at 13-14.

113.  Merrill, supra note 88, at 122.

114. Id.

115. Id. at 122-23.

116.  Searles, supra note 86, at 13.

117. See TUG HILL COMM’N, supra note 50, at 4..

118.  FLATHEAD LAND TRUST, PURSUING A CONSERVATION EASEMENT 5 (2002), at http://www.flatheadlandtrust.org /images/Easement%20 Fact%20Sheet%20.pdf.

119. See 520 East 81st Street Assocs. v. New York, 2002 N.Y. LEXIS 3459 (Nov. 14, 2002).

120.  Lorig v. State, 58 A.D.2d 734, 396 N.Y.S.2d 122 (4th Dep’t 1977), appeal dismissed, 42 N.Y.2d 1101, 399 N.Y.S.2d 1029.

121.  Richard J. Kohlman, Condemnation of Easements, 22 AM. JUR. Trials 743 § 3(e) (2003).

122. See NORTHERN FOREST EASEMENTS, supra note 62 (“[Conservation easements] are particularly valuable for protecting values that are not adequately conserved by market forces.”).

123. N.Y. ENVTL. CONSERV. LAW § 49-0305(3)(a) (2003).

124. Merrill, supra note 88, at 116.

125. See id. at 116-17.

126. Even where assessing the value to the landowner, it does so objectively, without referencing the subjective value attached to the land by the owner, “ranging from psychological attachment to the property, to features of the property that have been customized to the owner’s tastes, to nontransferable benefits associated with the location, to a desire to avoid the hassles of moving” despite the fact that “if an owner has not sold the property, it is likely that the owner has a subjective value higher than the market value.” Id. at 119.

127. Searles, supra note 86, at 9.

128. Id. at 9-10 (citing In re Simmons, 127 N.Y.S. 940 (1910)).

129.  United States v. Cors, 337 U.S. 325, 332 (1949).

130. TUG HILL COMM’N, supra note 50, at 4; Berwick v. State, 159 A.D.2d 544, 552, N.Y.S.2d 409 (2d Dep’t 1990), lv. denied, 76 N.Y.2d 884, 561 N.Y.S.2d 544 (appropriation of wetlands for conservation easement required downward adjustment of valuation given development limitations imposed by wetlands regulations).

131. TUG HILL COMM’N, supra note 50, at 3.

132. Chase Manhattan Bank, N.A. v. State, 103 A.D.2d 211, 479 N.Y.S.2d 983 (2d Dep’t 1984).

133. Sun Oil Co. of Pa. v. State, 50 A.D.2d 983, 377 N.Y.S.2d 252 (3d Dep’t 1975). Otherwise, such consequential damages are warranted. See, e.g., Yochmowitz v. State, 25 A.D.2d 930, 270 N.Y.S.2d 333 (3d Dep’t 1966), lv. denied, 18 N.Y.2d 579, 274 N.Y.S.2d 1027; see also Bd. of Supervisors of Monroe County v. Frisbee, 18 N.Y.S.2d 668 (1940) (where private character had been lost, the granting of an access easement entitled the landowner only to nominal damages); Cooper v. State, 48 N.Y.S.2d 212 (1944) (same). These damages are determined based on the difference between the market value of the remainder before and after the easement was taken. Bohm v. Metropolitan El. Ry. Co., 129 N.Y. 576 (1892); S.J. & J. Serv. Station, Inc. v. State, 74 A.D.2d 707, 426 N.Y.S.2d 112 (3d Dep’t 1980), appeal dismissed, 50 N.Y.2d 927, 431 N.Y.S.2d 1033.

134. 3775 Genesee St., Inc. v. State, 99 Misc.2d 59, 415 N.Y.S.2d 575 (N.Y. Ct. Cl. 1979).

135.TUG HILL COMM’N, supra note 50, at 3 (“Even the most restrictive easements typically permit landowners to continue traditional uses of the land.”).

136. For example, ECL § 3-0305(15) allows for the extinguishment of a temporary easement when “the purposes for which such easement right was acquired have been accomplished and that the exercise of such easement is no longer necessary.” N.Y. ENVTL. CONSERV. LAW § 3-0305(15) (2003). Temporary easements, however, are treated quite differently than permanent easements, as the taking of a temporary easement is compensated by the value of the lost rental income caused thereby. Matter of County of Nassau, 148 A.D.2d 533, 538 N.Y.S.2d 865 (2d Dep’t 1989); Kauffman v. State, 43 A.D.2d 1004, 353 N.Y.S.2d 61 (3d Dep’t 1974), aff’d, 36 N.Y.2d 745, 368 N.Y.S.2d 164.

137. N.Y. ENVTL. CONSERV. LAW § 49-0307(1) (2003); see Bd. of Educ., E. Irondequoit Cent. Schl. Dist. v. Doe, 88 A.D.2d 108, 113, 452 N.Y.S.2d 964, 967 (4th Dep’t 1982).

138. This is because the scope of the Conservation Easement Law is limited to conservation easements. See N.Y. ENVTL. CONSERV. LAW § 49-0309 (2003).

139. Two possible outcomes, of course, remain: the proposed development may be approved, or the courts may find that no taking has occurred.

140. Conservation easements take a minimum of three to six months to obtain from start to finish, which provides ample time to start and finish the process upon notice of intended remapping. See FLATHEAD LAND TRUST, supra note 118, at 2.

141. Dave Tetor, We are Number One! We are Number One!, LAND & LIVING, Dec. 1995 – Jan. 1996, at 7; see also ADVISORY COUNCIL ON AGRIC., N.Y. DEP’T OF AGRIC.& MKTS., FARM PROPERTY TAXES IN N.Y. STATE 18 (1996) (noting that “tax levies on farm property are ‘high’ compared to other states”).

142. Tetor, supra note 141, at 7. However, “[f]armers’ complaints about property taxes are often related to the tax rate rather than the property assessment.” Sean F. Nolon Cozata Solloway, Note, Preserving Our Heritage: Tools to Cultivate Agricultural Preservation in New York State, 17 PACE L. REV. 591, 637 (1997).

143. HENRY H. STEBBINS, SCENIC HUDSON, INC., PRESERVING WORKING FARM LANDSCAPES IN THE HUDSON VALLEY: A FEASIBILITY STUDY 2 (1995) (calling this situation the “impermanence syndrome”); John R. Nolon, The Stable Door is Open: New York’s Statutes to Protect Farm Land, in LAND USE L. REP., May 1994, at 5.

144. See, e.g., PATRICK G. HALPRIN, SUFFOLK COUNTY PLAN. COMM’N, FARMLAND PRESERVATION PROGRAM: HISTORY AND CURRENT PERSPECTIVE 1, 17 (1990).

145. Id. at 10. One way to do this would be to increase the minimum acreage required for development, which would decrease the number of subdivisions allowed from a large property such as a farm. Solloway, supra note 142, at 619-20 (internal citations omitted). Another possible means of regulating development not through acquisition is through a transferable development rights (TDRs) scheme that has as a sending zone made up of lands the State wishes to conserve, and a receiving zone located in an environmentally noncritical or nonvulnerable area. Id. at 630-34.

146. LaGrasse, A Critical Look at Conservation Easements, speech to Tompkins County Farm Bureau (Oct. 26, 2000), available at http://www.prfamerica.org/ ConsEaseCriticalLook.html (last visited June 30, 2003) [hereinafter LaGrasse, Critical Look]; see also AGRIC. ADVISORY COMM. OF THE HUDSON RIVERY VALLEY GREENWAY, THE AGRICULTURAL LANDSCAPE:A POLICY RECOMMENDATION FOR THE HUDSON RIVER VALLEY GREENWAY 13 (1990) [hereinafter AGRIC. ADVISORY COMM.].

147. LaGrasse, Critical Look, supra note 146; see also AGRIC. ADVISORY COMM., supra note 146, at 13.

148. Id.; See, e.g., Letter to Jack & Bev Sparrowk from Joe Mehrten, Regarding the Murphy Creek proposal, (Jan. 6, 2002).

149. See Solloway, supra note 142, at 608-09 (internal citations omitted).

150. Id. (internal citations omitted).

151. Id. at 610 (internal citations omitted).

152. Id. (internal citations omitted).

153. It should be noted that the Conservation Easement Law does not indicate under which circumstances the government should enter into conservation easement agreements nor what the agreements should contain, thereby making the Board very vulnerable to “agency capture.” However, though the language of the proposed statute indicates that compensation is derived from the designation as opposed to the provision of the easement, such a reading seems difficult to sustain because the proposed legislation primarily amends the Conservation Easement Law, and not the articles dealing with wetlands.

154. This analysis would apply equally, though in a different manner, if compensation was predicated on the establishment of an easement agreement and not on the designation. In such an instance, the landowner would attempt to illustrate that her entrance into the conservation easement agreement was based on some desire to enhance the public good, reduce transaction costs (by not attempting to seek a development permit first), etc. Both arguments are summarily dismissible.

155. See supra notes 86-87 and accompanying text.

156. Land Trust Alliance, 1990s Bring Surge in Land Conservation as Regional, Local Land Trusts Attract 1 Million Supporters, at http://www.lta.org/aboutlta/ census.shtml (last visited July 3, 2003) (“1,263 local and regional land trusts were in operation in 2000, a 42 percent increase over the number (887) that existed in 1990 [hereinafter Land Conservation Surge].

157. Land Trust Alliance, National Land Trust Census: Charts and Graphs, at http://www.lta.org/newsroom/ census_charts.htm (last visited July 3, 2003); Kevin Kasowski, Growth Management and Green Spaces: Rural America at a Crossroads, Developments, NAT’L GROWTH MGMT. LEADERSHIP PROJECT NEWSL., July, 1993, at 3.

158. Land Conservation Surge, supra note 156.

159. Id. This is a 475% increase in the use of conservation easements to protect lands since 1990, and an overall increase of 226% of lands conserved since 1990. Id.

160.  Margaret Jordan, Press Release: Nature Conservancy Celebrates 50 years of Saving Last Great Places, Oct. 22, 2001, at http://nature.org/wherewework/ northamerica/states/northcarolina/ press/press449.html (last visited July 3, 2003).

161. Carol W. LaGrasse, Land Trusts Threaten Private Property: Conservation Easements: Easy Government Money—Future Problems, (citing RON ARNOLD, UNDUE INFLUENCE 162 (Merril Press 1999), available at http://www.prfamerica.org/ LandTrustsThreatenPP.html (last visited June 30, 2003).

162. “California, New York and Montana led the nation in the amount of acreage protected by local and regional land trusts.” Id.

163. Land Trust Alliance, 24 Land Trusts Receive Grants from Innovative NY Program, available at http://www.lta.org/regionallta/ ny_regrants03.html (last visited June 30, 2003) [hereinafter Land Trust Grants].

164. Id.

165. Id.

166. TUG HILL COMM’N, supra note 50, at 1; Levin, supra note 45, at 598, 608.

167. See supra Part III.C.1; see also N.Y. CONST., art. I, § 7(1)(a) (“Private property shall not be taken for public use without just compensation.”).

168. N.Y. EM. DOM. PROC. LAW § 512 (2003); Sowma v. State, 203 Misc. 1105, 121 N.Y.S.2d 468 (N.Y. Ct. Cl. 1953).

169. Richard E. Hitchcock, Conservation Easements: Recent Modifications to Traditional Law, available at http://prfamerica.org/ ConsEaseHitchcock.html (last visited June 30, 2003).

170. Philip Weinberg, Practice Commentaries to ECL § 49-0301 (2003 Elec. Update) (1997); Solloway, supra note 142, at 599 (internal citations omitted).

171. Id.

172. NORTHERN FOREST EASEMENTS, supra note 62.

173. TUG HILL COMM’N, supra note 50, at 1.

174. N.Y. STATE FIN. LAW § 83(a) (2003).

175. Id. § 83(b).

176. N.Y. ENVTL. CONSERV. LAW § 3-0305 (2003).

177. N.Y. STATE FIN. LAW § 83(d) (2003).

178. Id. § 83(e).

179. See generally Carol W. LaGrasse, Renegotiating the Conservation Easement, available at http://prfamerica.org/ ConsEaseRenegotiation.html (last visited June 30, 2003).

180. In New York, of the thirteen open space conservation measures proposed in 2002, 92% passed, totaling over $400 million in funds allocated to such conservation. LAND TRUST ALLIANCE, LAND VOTE 2002: AMERICANS INVEST IN PARKS & OPEN SPACE 11 (2003), available at http://www.lta.org/publicpolicy/ landvote2002.pdf. Interestingly enough, in Saratoga Springs, a ballot measure passed with approximately a 75% approval rate authorizing $5,000,000 in funds for conservation. Id. at 12.

181. N.Y. ENVTL. CONSERV. LAW § 54-0301 (2003).

182. Erin M. Crotty, Comm’r, Dep’t of Envtl. Conserv., quoted in Land Trust Grants, supra note 163.

183. See Land Trust Grants, supra note 163 (quoting Sen. Carl L. Marcellino).

184. 2002 NYS OPEN SPACE CONSERVATION PLAN, ch. 4, at 69 (2002).

185. Id.

186. Id. at 78.

187. Id. at 70; see also id. ch. 3.

188. See id., app. A, for a detailed look at these requirements.

189. Id. at 71-72.

190. Id. at 73. Some of these strategies are discussed in the Open Space Plan. See id., ch. 6, fig. 7.

191. Acquisition using funds from the Clean Water/Clean Air Bond Act requires a willing seller. The Environmental Protection Fund has a similar requirement, though it allows departure in extenuating circumstances. Id. at 78. Both of these funds would be available to wetlands easement acquisitions. The Open Space Plan, therefore, “recommends that any pursuit of acquisitions with unwilling sellers be as a last resort and resulting from unique circumstances.” Id. at 78. As a side note, “[t]he State Finance Law requires that individual open space conservation projects that are proposed for funding through the EPF be included as specific line appropriations in the capital project budget prepared each year.” Id. at 79.

192. Id. at 74. This requirement comes from ECL § 49-0203(2). It states that [t]he department and the office shall first consider in each acquisition whether acquisition of conservation easement or other less than full fee title interests would fulfill the purposes for which the particular acquisition is sought. If it is determined that a conservation easement or other interest would fulfill such purposes, the department or the office will use its best efforts to acquire such easement or interest, where practicable. N.Y. ENVTL. CONSERV. LAW § 49-0203(2) (2003). Furthermore, the department and office must “pursue acquisitions through voluntary agreement to the maximum extent practicable to achieve the purposes of this article. Accordingly, the process of eminent domain shall only be used when reasonable efforts to obtain a voluntary agreement have been exhausted.” Id. § 49-0203(3).

193. 2002 NYS OPEN SPACE CONSERVATION PLAN, ch. 4, at 75 (2002).

194. Solloway, supra note 142, at 608 (internal citations omitted).

195. N.Y. ENVTL. CONSERV. LAW § 49-0203(2) (2003).

196. 2002 NYS OPEN SPACE CONSERVATION PLAN, ch. 4, at 74.

197. Bargain sales do rank sites higher than sites whose landowners are unwilling to sell the easement at anything lower than the full market value based on speculation. See id. at 76. However, such ranking occurs at the qualitative review stage, and after the numerical ranking has already occurred. Id. at 74-76.

198. Am. Conserv. Real Estate, An Introduction to Conservation Easements, available at http://www.conservationrealestate. com/coneasements.htm (last visited June 30, 2003); see also FLATHEAD LAND TRUST, supra note 118, at 2.

199. FLATHEAD LAND TRUST, supra note 118, at 8.

200. LEELANAU CONSERVANCY, CONSERVATION EASEMENTS:A GUIDEBOOK FOR LANDOWNERS IN LEELANAU COUNTY 7-8 (2002), at http://www.theconservancy.com/ protection/guidebook.doc; Stephen Longmire, Push Incentives for Preservation, E. HAMPTON STAR, Apr. 3, 2003, available at http://www.lta.org/newsroom/ news_star_040303.htm (last visited June 30, 2003) (quoting Russell Shay, Public Policy Director, Land Trust Alliance).

201. TUG HILL COMM’N, supra note 50, at 5.

202. See IRC § 170 (2003); see also STEPHEN J. SMALL, LAND TRUST ALLIANCE, THE FEDERAL TAX LA W OF CONSERVATION EASEMENTS WITH SUPPLEMENT (1986). For a more detailed, though slightly outdated, discussion of the income tax implications of conservation easements, see John C. Partigan, New York’s Conservation Easement Statute: The Property Interest and its Real Property and Federal Income Tax Consequences, 49 ALBANY L. REV. 430 (1985).

203. IRC § 170(b)(1)(B) (2003); see also FLATHEAD LAND TRUST, supra note 118, at 5-6. This may change, as “Senate Bill 701 would increase the portion of adjusted gross income landowners could deduct from their federal taxes for donating conservation easements to land trusts or local governments from 30 to 50 percent.” Longmire, supra note 200. Furthermore, “the deduction could taken for up to 16 years, instead of the current six, until the appraised value of the gift was exhausted.” Id. In addition, “the CARE Act proposes a 25-percent cut in the capital gains tax now due when land or a conservation easement is sold, not given, to a land trust or government.” Id.

204. FLATHEAD LAND TRUST, supra note 118, at 6; LEELANAU CONSERVANCY, supra note 200, at 5.

205. IRC § 170(h)(4)(A) (2003); LEELANAU CONSERVANCY, supra note 200, at 3.

206. LEELANAU CONSERVANCY, supra note 200, at 3.

207.  An interesting question that is beyond the scope of this report is the applicability of the Rule Against Perpetuities in the sale of a conservation easement. See LaGrasse, Critical Look, supra note 146. “Of the fort-seven states that have conservation easement statutes, all allow, or even require, the easement to be perpetual.” Levin, supra note 45, at 599 (internal citations omitted).

208. IRC § 170(h); see also FLATHEAD LAND TRUST, supra note 118, at 3-4.

209. FLATHEAD LAND TRUST, supra note 118, at 5.

210. Conservation Easements, supra note 70.

211. FLATHEAD LAND TRUST, supra note 118, at 6. This is “usually the amount a developer or speculator would pay.” TUG HILL COMM’N, supra note 50, at 4. It is also termed the “highest and best use” of the property. Longmire, supra note 200.

212. FLATHEAD LAND TRUST, supra note 118, at 6. “The resulting estate tax can be so high that the heirs must sell the property to pay the taxes.” TUG HILL COMM’N, supra note 50, at 4.

213. Solloway, supra note 142, at 611 (internal citations omitted).

214. TUG HILL COMM’N, supra note 50, at 4. This is because “an individual can give up to $1,000,000 (including land) during his/her lifetime and/or at death that is not subject to federal gift or estate tax.” Id. Conservation easements can therefore save hundreds of thousands of dollars in estate taxes, and allow the remaining property to be inherited by its rightful heirs. Id. at 6-7.

215. Philip Weinberg, Supp. Practice Commentaries to ECL § 49-0301 (2003 Elec. Update) (1999); N.Y. REAL PROP. TAX LAW § 533, as amended by Chapter 419 of the Laws of 1998 (July 22, 1998); TUG HILL COMM’N, supra note 50, at 1. Of note is that the group that in large part helped passed this bill, the East Branch of Fish Creek Working Group, concluded that “conservation easements are the best way to protect water quality in the watershed while still allowing for timber production, hunting, fishing, trapping, and snowmobiling.” TUG HILL COMM’N, supra note 50, at 1. Governor Pataki noted that Section 533 “is consistent with the recommendations of the State Open Space Plan, which calls for the use of ‘Working Forest’ conservation easements in the Tug Hill region, coupled with the payment by the State of its proportionate share of local taxes.” Governor Pataki, Memorandum Approving 1998 Amendments to Real Property Tax Law § 533, 1998 McKinney’s Sess. Laws 1474. Real Property Tax Law § 533 requires the State to pay property taxes on conservation easements obtained in a number of areas. N.Y. REAL PROP. TAX LAW § 533 (2003). However, such designated areas do not include all possible areas, and therefore some areas leave the property tax question less well defined.

216. NYS OPEN SPACE CONSERVATION PLAN, ch. 4, at 76.

217. NORTHERN FOREST EASEMENTS, supra note 62.

218. Philip Weinberg, Practice Commentaries to ECL § 49-0301 (2003 Elec. Update) (1997).

219. Solloway, supra note 142, at 612 (citing N.Y. Agric. & Mkts. Law § 306(1)) (internal citations omitted).

220. Id. (internal citations omitted).

221. ADVISORY COUNCIL ON AGRIC., N.Y. DEP’T OF AGRIC.& MKTS., FARM PROPERTY TAXES IN N.Y. STATE 47 (1996).

222. LEELANAU CONSERVANCY, supra note 200, at 5.

223. 99 A.D.2d 600, 471 N.Y.S.2d 703 (3d Dep’t 1984).

224. Id. at 601, 471 N.Y.S.2d at 705.

225. 10 VT. STAT. ANN. tit. 10 § 6306 (1995).

226. Nolon, supra note 143, at 4.

227. Solloway, supra note 142, at 637 (internal citations omitted).

228. See IRC § 701 (2003).

229. Solloway, supra note 142, at 609.

230. See Tarbell Road Realty, Inc. v. State, 28 A.D.2d 819, 281 N.Y.S.2d 852 (4th Dep’t 1967).

231. FLATHEAD LAND TRUST, supra note 118, at 9.

232. Id.

233. Id.

234. TUG HILL COMM’N, supra note 50, at 3.

235. Solloway, supra note 142, at 605 (internal citations omitted).

236. Id. at 605, 607-08.

237. LDRs are authorized under N.Y. GEN. MUN. LAW § 247 (2003).

238. STEBBINS, supra note 143, at 11.

239. FLATHEAD LAND TRUST, supra note 118, at 3; TUG HILL COMM’N, supra note 50, at 3; see, e.g., LEELANAU CONSERVANCY, supra note 200, at 3 (noting that “the Conservancy asks all easement donors to make a financial contribution to the Conservancy’s Endowment Fund” to help it annually monitor its easements for violations).

240. NORTHERN FOREST EASEMENTS, supra note 62.

241. Avoyelles Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897 (5th Cir. 1983).

242. United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 126-27 (1985) (“[T]he mere assertion of regulatory jurisdiction by a governmental body does not constitute a regulatory taking.Only when a permit is denied and the effect of the denial is to prevent economically-viable use of the land in question can it be said that a taking has occurred.”).

243. United States v. Byrd, 609 F.2d 1204, 1211 (7th Cir. 1979).

244. See N.Y. DEP’T OF ENVTL. CONSERV., FRESHWATER WETLANDS REGULATION GUIDELINES ON COMPENSATORY MITIGATION (2003).

245. See, e.g., Williamson County Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 185-97 (1985); DANA & MERRILL, supra note 78, at 254-73.

246. If the intention of the legislation is to seek compensation for the establishment of conservation easements on wetlands properties, although an unlikely reading of the statute, the proposed bill would nevertheless be contrary to existing takings law because the compensation would be predicated on a voluntary action, and not upon a deprivation of property without Due Process. Certainly it does not make sense for the State to pay more to acquire property from a willing property owner than it does for the State to acquire a property against the landowner’s wishes.

247. N.Y. ENVTL. CONSERV. LAW § 49-0309 (2003).

248. Id. § 49-0203(3).

249. See supra note 131 and accompanying text.

250. Ciampetti v. United States, 18 Cl. Ct. 548 (1989).

251. See, e.g., Anello v. Zoning Bd. of Appeals, 89 N.Y.2d 535, 656 N.Y.S.2d 184 (1997); Basile v. Town of Southampton, 89 N.Y.2d 974, 655 N.Y.S.2d 877 (1997); Gazza v. Dep’t of Envtl. Conserv., 89 N.Y.2d 603, 657 N.Y.S.2d 555 (1997); Kim v. City of New York, 90 N.Y.2d 1, 659 N.Y.S.2d 145 (1997); see also Steven J. Eagle, The Regulatory Takings Notice Rule, 24 U. HAW. L. REV. 533 (2002).

252. Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992).

253.Id. at 1006-07.

254. Id. at 1008-10.

255. Id.

256. Id. at 1009.

257. Id. at 1009-1010.

258. Id.

259. Id.

260. Id. at 1010. See Lucas v. S.C. Coastal Council, 502 U.S. 966 (1991) (granting petition for writ of certiorari to the Supreme Court of South Carolina).

261. Id. at 1019-22.

262. Id. at 1016 (quoting Agins v. Tiburon, 447 U.S. 255, 260 (1980)).

263. Id. at 1028-31.

264. Oliver A. Houk, Why Do We Protect Endangered Species, And What Does That Say About Whether Restrictions On Private Property To Protect Them Constitute “Takings?” 80 Iowa L. Rev. 297, 308 (1995). “[T]o prevail in a takings case the government could not be preventing simply any public harm; it must be preventing something recognized as harmful for quite a long time and, by some measure, as major harm.”

265. JOSEPH L. SAX, DEFENDING THE ENVIRONMENT:A STRATEGY FOR CITIZEN ACTION 163-165 (1970); Joseph L. Sax, The Public Trust Doctrine in Natural Resources Law: Effective Judicial Intervention, 68 Mich. L. Rev. 471, 489-502 (1970).

266. Id.; See also Alison Rieser, Ecological Preservation as a Public Property Right: An Emerging Doctrine in Search of a Theory, 15 HARV. ENVTL. L. REV. 393, 97-398 (1991).

267. Gary D. Meyers, Variation on a Theme: Expanding the Public Trust Doctrine to Include the Protection of Wildlife, 19 ENVTL. L. 723, 728 (1991).

268. 2 H. BRACTON, ON THE LAWS AND CUSTOMS OF ENGLAND 40 (S. Thorne trans. 1968).

269. People of Town of Smithtown v. Poveromo, 71 Misc.2d 524, 526, 336 N.Y.S. 2d 764, 769 (N.Y. Dist. Ct. 1972).

270. Id. at 770.

271. Jack H. Archer & Terrance W. Stone, The Interaction of the Public Trust and the “Takings” Doctrines: Protecting Wetlands and Critical Coastal Areas, 20 VT. L. REV. 84-85 (1995); See Martin v. Waddell’s Lessee, 41 U.S. 367, 410 (1842).

272. Id.

273. Poveromo, 336 N.Y.S. 2d at 771-72.

274. Id. at 771 (citing and quoting Martin v. Waddell’s Lease, 41 U.S. 367 (16 Pet.) (1842).

275. Id. at 772-73.

276. Ill. Cent. R. Co. v. State of Ill., 146 U.S. 387, 452-53 (1892).

277. Id.

278. Id.

279. Id.

280. Id. at 453-54.

281. Archer & Stone, supra note 268, at 84-85.

282. See Thornton v. Hay, 462 P.2d 671 (Or. 1969); Nat’l Audubon Soc’y v. Super. Ct. of Alpine County (Mono Lake), 658 P.2d 709 (Cal. 1983) (holding that the public trust doctrine included such values as preserving the biological and ecological integrity, and the human recreational and aesthetic uses of Mono Lake); Mountain States Legal Found. v. Hodel, 854 F. Supp. 843 (D. Wyo. 1994) (holding that “wild animals are . . . common property whose control and regulation are to be exercised ‘as a trust for the benefit of the people’”); Geer v. Connecticut, 161 U.S. 519, 528-29 (1896) (holding that the preservation of wildlife is to be exercised by the State as a trust for the benefit of the people); Paepke v. Pub. Bldg. Comm’n, 263 N.E. 2d 11 (Ill. 1970) (holding that private property owner could not assert property right in a public park because municipal bodies as agents of the state hold the property in trust for uses and purposes specified in the statute and for the benefit of the public); People v. The New York and Staten Island Ferry Company, 68 N.Y. 71 (1877) (holding that New York State under the public trust doctrine could prohibit construction of a wharf more than the width prescribed by law in New York Harbor because the construction interfered with the public’s right in the harbor as a natural highway for passage and commerce).

283. Phillips Petroleum v. Mississippi, 484 U.S. 469 (1988).

284. Id. at 472.

285. Id.

286. Id.

287. Id. at 473, 476.

288. Id. at 484.

289. Id. at 475-83.

290. Adirondack League Club Inc. v. Sierra Club, 201 A.D.2d 225, 615 N.Y.S.2d 788 (3d Dep’t 1994).

291. Id. at 227, 615 N.Y.S.2d at 789.

292. Id.

293. Id. at 228, 615 N.Y.S.2d at 790.

294. Id.

295. Id. at 228-29, 615 N.Y.S.2d at 790.

296. Id. at 232, 615 N.Y.S.2d at 792.

297. Id. See also People of Town of Smithtown v. Poveromo, 71 Misc.2d 524, 336 N.Y.S.2d 764 (N.Y. Dist. Ct. 1972) (holding that the doctrine of the public trust in New York State requires the preservation and conservation of the vital natural resource of wetlands and the enforcement of protective measures against infringements by nominal owners, be they private or governmental).

298. See, e.g., supra note 263.

299. See, e.g., supra Part II.

300. EDWARD O. WILSON, THE DIVERSITY OF LIFE 308 (1992).

301. JON NAAR ET AL., THIS LAND IS YOUR LAND: A GUIDE TO NORTH AMERICA’S ENDANGERED ECOSYSTEMS 302 (1993).

302. Paul R. Ehrlich, The Loss of Diversity: Causes and Consequences, BIODIVERSITY 21, 24 (Edward O. Wilson ed. 1986).

303. WILSON, supra note 300, at 15, 308.

304. JOSEPH A. MORAN, INTRODUCTION TO ENVIRONMENTAL SCIENCE 466-67 (1986).

305. Id.

306. Id.

307. WILSON, supra note 300, at 283-84.

308. NAAR ET AL., supra note 301, at 62-63.

309. Id. at 63.

310. Id. at 62.

311. NEIL A. CAMPBELL, BIOLOGY 579 (3d ed. 1993).

312. The Bluebelt: Brilliant Program Saves Tax Dollars and Greenspaces in Bruce Kershner, SECRET PLACES OF STATEN ISLAND 134 (1998).

313. Id. See also Robert Gavin, Pataki Oks wetlands building ban, STATEN ISLAND ADVANCE, June 28, 2003, at 1 (stating that development will be banned for one year around wetlands from South Beach to Great Kills, under a bill signed into law by Gov. Pataki. The legislation outlaws any construction near the waterways the city has designated “Mid-Island Bluebelt,” a natural flood control system relying on existing streams and ponds, as opposed to the construction of new sewers).

314. Missouri v. Holland, 252 U.S. 416 (1920).

315. Barret et al. v. State, 116 N.E. 99, 100 (N.Y. 1917).

316. Goldhirsch v. Flacke, 495 N.Y.S.2d 436, 438 (2d Dep’t 1985).

317. Rappl & Hoenig Co., Inc. v. New York State Dep’t of Environmental Conservation, 387 N.Y.S.2d 985, 986 (1976).

 

 

 

 

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ENVIRONMENTAL LAW COMMITTEECOMMENT ON A04231 Part 1

ENVIRONMENTAL LAW COMMITTEECOMMENT ON A04231 Part 2