[ABC Land Trust]

LAND ACQUISITION POLICY AND GUIDELINES

  1. Introduction

A.Mission

B.Strategic Conservation Plan

II.Project Selection Criteria

A.Geographic Area/Region of Practice

B.Consistency with ABC Mission

C.Public Benefit

D.Consistency with Tax Code and Regulations

E.Selection Criteria Specific to ABC

F.Feasibility and Stewardship Concerns

III.Project Planning and Due Diligence

A.Initial Information

B.Landowner Meeting

C.Site Visit

D.Evaluating Conservation Options

E.[Acquisition Committee Review and] Board Approval for further Project Development

  1. Stewardship Reserves and Stewardship Contribution

G.Tax information for Donors who may use Tax Incentives

H.Legal and Professional Representation

I.Title Investigation, Title Documentation, Title Insurance and Mortgage Subordination

J.Environmental Site Assessment/Risk Assessment

K.Survey and Determination of Property Boundaries

L.Appraisals When Purchasing Land or Easements

M.Easement Drafting Issues

N.Baseline Documentation Reports for Conservation Easements

O.Fee Property Management Plans

IV.Board Review and Approval

A.Project Summary Information

B.Approval Resolution and Voting

V.Post Closing

A.Recording

B.Donor Substantiation

C.Review of Form 8283 and Donor’s Appraisal

D.Project Files

E.Publicity

F.Tax exemption for fee properties

G.Insurance Considerations

H.Beginning Stewardship Responsibilities

VI.Special Circumstances

A.Conflicts of Interest

B.Partnerships, Joint Acquisitions, Co-Held Properties

C.Land Held for Transfer to a Conservation Organization

D.Nonconservation Land

VII.Appendices

  1. [Placeholder for Strategic Conservation Plan]
  2. Project Checklist
  3. Site Visit Report Form
  4. Standard Tax Information
  5. Environmental Assessment Form
  6. Project Summary Form
  7. Form of Resolution to Approve a Project
  8. Checklist for Review of Appraisal and Form 8283

I.INTRODUCTION

It is the policy of the ABC Land Trust (“ABC”) to seek, acquire and hold parcels of generally unimproved land, as well as to accept conservation easements or restrictions on lands for preservation generally in their natural state. ABC Land Trust (“ABC”) intends that its real property acquisitions conform to all requirements of law, the Land Trust Standards and Practices[1], and all other ABC policies. The purpose of this document is to memorialize ABC’s policies for real property and conservation easement acquisitions and guide ABC’s acquisition practices. The policy is intended to guide, not limit, the actions of ABC. ABC retains discretion over project selection and will evaluate each project and proposal on its own merits after careful investigation pursuant to the guidelines below.

A.Mission

This policy conforms to the following statement of purpose within ABC’s Certificate of Incorporation,

“ [insert statement of purpose if desired]”

as well as ABC’s mission statement,

“[insert mission]”

[Note: sub in vision statement and/or remove reference to Certificate of Incorporation as desired. It will be helpful in all cases to have the mission statement in the introductory paragraph.]

  1. Strategic Conservation Plan

To aid its efforts consistent with this policy, make the best use of its resources, and best be ready to act upon opportunities when they arise, ABC shall compile a strategic analysis of properties for potential acquisition as fee or easement holdings. Such analysis may involve inventories of natural resources and local and regional public policy, where aligned with ABC’s mission, priorities and guidelines outlined herein. [A copy of ABC’s current Strategic Conservation Plan is attached hereto as Appendix 1.]

II.Project SelectionCRITERIA

A.Geographic Area/Region of Practice

ABC will seek to protect land through acquisition of real property and conservation easements within the [town of xxx and surrounding area]. [If organization has a specific mission to protect a certain natural resource (e.g., working agricultural lands, coastal lands) this may be specified herein.]

  1. Consistency with ABC Mission

ABC’s real property and conservation easement acquisitions must be consistent with its organizational mission.

  1. Public Benefit

ABC’s real property and conservation easement acquisitions must confer public benefit. Public benefits may include, by way of example:

  1. Public access – the opportunity for the general public to use the property for recreation, or to appreciate its scenic values;
  2. Water protection - Irrigation or water supply protection, water quality maintenance or enhancement;
  3. Flood prevention and control;
  4. Erosion control, shoreline protection;
  5. Protection of land areas included in, or related to, a government approved master plan or land management area, or with a legislatively mandated program identifying particular parcels of land for future protection;
  6. Consistency or contiguity with existing private conservation land;
  7. Likelihood that development will lead to or contribute to degradation of the scenic, natural or historic character of the area;
  8. Importance of the property in preserving a local or regional landscape or resource that attracts tourism or commerce to the area; and
  9. Relief from intense development.
  1. Consistency with Tax Code and Regulations

In addition to meeting ABC’s specific Selection Criteria listed in Section IIE below, if a landowner intends to seek a charitable deduction in connection with a qualified conservation contribution, under the Internal Revenue Code §170(h) and accompanying Treasury Department Regulations the property must be contributed exclusively for one or more of the following conservation purposes:

  1. The preservation of land areas for outdoor recreation by, or the education of, the general public,
  2. The protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem,
  3. The preservation of open space (including farmland and forest land) where such preservation is -
  4. for the scenic enjoyment of the general public, or
  5. pursuant to a clearly delineated Federal, State, or local governmental conservation policy, and will yield a significant public benefit, or
  6. The preservation of an historically important land area or a certified historic structure.

The terms of conservation easements must furthermore be enforceable in perpetuity, and cannot permit the retention of certainqualified mineral interests that would permit the extraction or removal of minerals by any surface mining method.

E.Selection Criteria Specific to ABC

[Below are the criteria used by the Kent Land Trust in Kent, CT. This section is meant to be specific to the mission, goals, area of operations, and opportunities available to individual land trusts and should be modified as appropriate]

[Example - In selecting lands for protection by conservation easement donation or acquisition, each project shall be evaluated on its own merits. No one criterion shall be dispositive, nor shall the failure of a proposed property to meet one or more of the criteria preclude it from consideration by KLT if other criteria are met:

1.Land located within the 20 areas identified in the 1990 Kent POCD.

2.Land which offers significant relief from potential development and which helps to define the rural character of the community.

3.Land which provides scenic views from public roads or trail corridors.

4.Land which provides trail corridors or public recreational opportunities consistent with the conservation values of the property.

5.Land which provides a buffer or is in close proximity to existing protected areas, the protection of which would broaden an area of protected land and enhance trail corridors, recreational opportunities or habitat for plants and wildlife.

6.Land which is important for preserving the quality and quantity of surface or underground waters, or for providing the natural control of flooding (such as wetlands, alluvial and high water table soils, and riparian buffers).

7.Land which contains habitat for plant or animal species classified as rare, endangered or threatened by the state or federal government.

8.Land which contains exemplary or critical habitat for plant or animal species not classified as rare, endangered or threatened.

9.Land which contains prime or important agricultural soil or land in active agricultural production, where the proposed project preserves agricultural use.

10.Land of sufficient size that the resources being protected are likely to remain intact even if adjacent unprotected properties are developed. While properties of at least 10 acres are preferred, KLT may consider smaller parcels where its criteria are met and the project will not involve excessive effort or expense.

11.Land which is reasonably determined to be free from any hazardous wastes, or other contamination which could expose KLT to liability.

12.Land which is reasonably determined to allow physical access for inspection and will not present difficulties in monitoring and stewardship.]

F.Feasibility and Stewardship Concerns

As part of its project selection process, ABC evaluates the feasibility of the project as well as its capacity to perform any perpetual stewardship responsibilities.

A project may otherwise fit ABC’s selection criteria but the costs and level of effort required to monitor, defend and manage the property in perpetuity may be unreasonable or outweigh the overall benefit of its protection. For each project, ABC shall determine if it has the resources to take on the project and if any specific issues exist that detract from the merits of the project. Projects where the risks or costs outweigh the benefits shall be modified or turned down.

Factors for consideration may include:

  • The risk that adjacent properties may be developed in a manner that would significantly diminish the conservation values of the property.
  • Proposed provisions in a conservation easement would seriously diminish the property’s primary conservation values.
  • There is inadequate access to property for management or monitoring.
  • Stewardship responsibilities would be inordinatelydifficult or expensive.
  • Ethical, public image or conflict of interest problems exist in association with the acceptance of the project.
  • The property is found to be irreparably contaminated or the cost of clean-up is too high.

  1. PROJECT PLANNING AND DUE DILIGENCE

ABC’s [Acquisition Committee] is responsible for coordinating project planning, ensuring full investigation of property characteristics and risks, conducting due diligence and negotiations, overseeing legal review and technical expertise, ensuring proper notifications to landowners and/or donors, collecting necessary documentation, and presenting project information to the Board of Directors for its review and determinations. The [Acquisitions Committee] is made up of members of the Board of Directors. [The Committee meets regularly to discuss potential and pending projects, and reports to the Board at each regular meeting.]

ABC’s project planning process generally proceeds through the following steps. ABC uses a project planning checklist to help guide its progress and ensure completion of all steps (see Appendix 2)

  1. Initial Information

Potential acquisitions come to the attention of ABC through contact by interested property owners, outreach by ABC, and with the assistance of other persons or organizations. As a first step in connection with prospective projects, ABC conducts preliminary research, collecting tax and other maps and land ownership records including recorded deeds.

  1. Landowner Contact

ABC contacts the landowner to collect additional information about the property and the landowner’s preliminary interest and thoughts, and to make an appointment for a site visit.Generally ABC will meet in person with the landowner, to discuss goals for property, property history, conservation tools, timing, requirements, etc. The landowner may join for the site visit as part of this meeting.

  1. Site visit

ABC conducts one or more site visits to determine if the property meets its selection criteria, collect information about the property’s conservation values, conduct environmental risk review, identify any management-related issues, and plan the project. Key features are evaluated including, e.g.: site access, type and condition of conservation resources, on and offsite threats to conservation resources, existing land use and intensity of activity, existing improvements and their condition, visible rights-of-way and encumbrances, safety and environmental hazards, adjacent land use, and property boundaries.

Site visits may include any or all of [the committee Chair(s), ABC’s Board and staff]. Site visits are documented within a narrative report and photographs (see Site Visit Report form, Appendix 3).

  1. Evaluating Conservation Options

ABC works with the landowner to evaluate and select the best conservation tool for the property. ABC will consider all feasible protection models (i.e., conservation easement or fee ownership transactions), as well as project structuring models that ensure protection while meeting both ABC’s and the landowner’s objectives and needs, including considerations of donation vs. purchase, co-held projects and other partnership arrangements. Whatever the ultimate strategy, the approach shall reasonably ensure long-term protection for the property’s important conservation values.

  1. [Acquisition Committee Review] and Board Approval for further Project Development

Prior to incurring substantial expense in connection with project planning and due diligence, ABC’s board makes a preliminary review and authorizes further pursuit of the project.

  1. [Committee Determination to Proceed. The [Acquisitions Committee] considers all preliminary information, making a preliminary determination that the project is consistent with ABC’s mission, meets its selection criteria, and that ABC has the capacity and resources required to conduct the project and fulfill its stewardship obligations. The Committee determines to recommend board approval to proceed with the project.]
  1. Board Approval to Proceed. The [Committee recommends the project to the Board, providing a summary of all information gathered and its discussion and preliminary determination. An affirmative vote of [a majority/supermajority? is required to proceed with the transaction].

F.Stewardship Reserve Funds and Stewardship Contribution

In order to ensure the proper, ongoing stewardship of ABC’s preserves and conservation easements, ABC established a Board designated “Stewardship Reserve Fund” which is funded by stewardship contributions from conservation easement and fee land grantors, donors, other fundraising, and other unrestricted on-hand funds.

In connection with each transaction, ABC shall prepare an estimate of expected and potential stewardship costs as part of the project planning process. Such estimate shall include start up, monitoring, enforcement and administration costs as well as likely and possible costs associated with the characteristics and risks particular to the property under consideration. ABC shall use experience-based information from its current and past stewardship program as well as information from peers and publicly available from the Land Trust Alliance through its Stewardship Defense Calculator to inform such estimates, however each property shall be considered on a case-by-case basis.

The stewardship costs estimate is a critically important element in ABC’s determination to accept or reject the project. Prior to approving an acquisition, ABC will either secure funds needed for stewardship or develop a realistic plan for providing for stewardship expenses. In the case of an easement donation ABC’s policy is to request a stewardship contribution from the donor in conjunction with the easement gift. For donated fee parcels and property purchases, fundraising campaigns or other funding requests shall include funds for stewardship.

Stewardship costs associated with easement properties include annual monitoring, landowner relations, administration (e.g., posting, updating baseline information, record maintenance), grantee approvals, and professional and legal services associated with enforcement. Factors

Stewardship costs associated with fee properties include preparation of a management plan, monitoring, maintenance activities specific to the property (e.g., mowing, invasives control, boundary posting and signage, trails, gates, parking areas, storm cleanup), habitat and other restoration work, administration, and enforcement of property rights.

  1. Tax information for Donors who may use Tax Incentives

ABC will not make specific representations about the federal or other tax implication of a proposed donation, will never render legal or tax advice to landowners, and will make clear that landowners should obtain independent professional advice. Absent confirmation from the donor that he/she will not seek a charitable deduction, ABC shall assume that a donor of an easement or fee parcel (including partial donations via bargain sale) intends to claim that the donation qualifies as a “qualified conservation contribution” for purposes of Section 170(h) of the Internal Revenue Code.

Once ABC has made a preliminary determination to take further project planning and due diligence actions, ABC will send the landowner a letter containing general information about the requirements of the IRC Section 170(h) and associated Treasury Regulations, and advising the landowner to seek independent counsel and independent tax advice (See Appendix 4).

The general information include that the IRC (Section 170(h)) and IRS regulations impose the following requirements on donors where the value of the gift exceeds $5,000:

  1. The project must meet the requirements of IRC Section 170 and the accompanying Treasury Department regulations and/or any other federal or state requirements;
  2. The donor is responsible for determining the value of the donation;
  3. The IRC requires a qualified appraisal prepared by a qualified appraiser for gifts of property valued at more than $5,000;
  4. The appraisal must follow Uniform Standards of Professional Appraisal Practice;
  5. The date of valuation in the appraisal must be no earlier than sixty (60) days prior to and no later than date of the gift;
  6. The date of the appraisal must be no earlier than sixty (60) days prior to the date of the gift and no later than the due date for the donor’s tax return on which the deduction is first claimed;

ABC’s letter will also request that it be provided a copy of the completed appraisal prior to its review and signature of the IRS Form 8283, and that the Form 8283 be signed by the appraiser prior to ABC’s review, and state that ABC will not knowingly participate in a project if it has substantial concerns about the tax deduction. (See Form of Tax Information, attached).

  1. Legal and Professional Representation

ABC retains qualified counsel experienced in real estate law to provide legal review of each transaction; legal representation shall be of a scope that is adequate and appropriate to the complexity of the project. Where necessary or desired ABC may seek additional technical expertise including the advice of financial, real estate, tax, scientific, and land and water management professionals.