Legal Aspects of Conservation Easements: A Primer for Transportation Agencies (2013)

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8 works. For example, state, regional, and local authori- ties have long used transferable development rights (TDR) and purchase of development rights (PDR) pro- grams to manage growth. TDR programs enable prop- erty owners in designated conservation areas to sell their development rights to parties in designated urban areas, in order to reallocate development rights consis- tent with adopted growth management policies. In real- ity, of course, this transfer occurs by the placement of a conservation easement over the property to be pre- served, which restricts that property’s use and severs its development rights. Through the enablement of local law, those same development rights become part of an- other property in an area designated for higher density. The Pinelands TDR Program in New Jersey has pro- tected more than 58,600 acres of land and serves as an example of a successful program.46 With PDR programs, the governmental entity pur- chases the development rights by execution of a conser- vation easement and oftentimes simply extinguishes the development rights instead of transferring the den- sity to other areas, as would be the case with TDR pro- grams. Each year, voters around the country approve measures designed to raise funds for land preservation efforts like PDR programs.47 Land Use Planning.—Beyond general growth man- agement, conservation easements are also used to pro- tect specific land uses of great public importance. In the face of rapid suburbanization over the last several dec- ades, a number of agricultural land preservation efforts have been established by private and public entities. For example, in western Marin County, California, the Marin Agricultural Land Trust has protected more than 46,000 acres of farmland through both conservation easement donation and purchase.48 In addition, the De- partment of Defense, as part of its Sustainable Ranges Initiative, has identified conservation easements as an important tool for use in protecting land around mili- tary installations and training routes.49 Working with regional and local governments as well as private land trusts, conservation easements enable the Department of Defense to leverage scarce financial resources in the protection of critical buffer zones around military bases. Conservation easements are also used in site-specific development projects. Local land development codes often require or encourage “conservation subdivisions,” which enable a developer to cluster smaller lots than may have otherwise been preferred, often at bonus den- sities, while preserving onsite habitat or open space 46 http://www.nj.gov/pinelands/infor/fact/PDCfacts. pdf (Accessed July 7, 2012). 47 https://www.quickbase.com/db/bbqna2qct?a=dbpage& pageID=10 (Accessed July 10, 2012). 48 http://www.malt.org/MALT-map (Accessed July 7, 2012). 49 http://www.denix.osd.mil/sri/index.cfm (Accessed July 10, 2012). through conservation easements.50 In essence, develop- ment is focused or “clustered” on one section of the property with the remainder retaining its natural char- acter, which is protected by conservation easement. Similarly, conservation easements may also be used in planned development zoning districts, which afford de- velopers the opportunity to tailor the land development regulations to suit a particular development. They may also be used in conjunction with new urbanism, such as traditional neighborhood design or form-based code, both of which rely in various degrees on protected, natural public realms.51 Though conservation easement requirements are not without controversy,52 they commonly are used to re- solve disputes between neighbors.53 For example, a party’s apprehension over a proposed development’s impact on his or her views may be minimized by the developer’s execution of a conservation easement pre- serving scenic views and restricting aesthetically un- pleasing design elements.54 Despite the occasional con- troversy, conservation easements remain a flexible, powerful tool for local governments to use and reference in conjunction with development approval processes. III. HOW CONSERVATION EASEMENTS ARE USED BY TRANSPORTATION AGENCIES Conservation easements relate to the work of trans- portation agencies specifically in two major ways. First, they are used by transportation agencies to satisfy regu- latory requirements, to complement transportation pro- jects, and to achieve policy objectives. Second, transpor- 50 See ROBERT FREILICH & MARK S. WHITE, 21ST CENTURY LAND DEVELOPMENT CODE 39-43 (American Planning Association 2008). 51 See DANIEL K. SLONE & DORIS S. GOLDSTEIN, A LEGAL GUIDE TO URBAN AND SUSTAINABLE DEVELOPMENT FOR PLANNERS, DEVELOPERS, AND ARCHITECTS (Wiley 2008). 52 Smith v. Town of Mendon, 4 N.Y.3d 1, 822 N.E.2d 1214, 789 N.Y.S.2d 696 (2004) (holding the condition was not an “exaction” subject to analysis under Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 107 S. Ct. 3141, 97 L. Ed. 2d 677 (1987) and Dolan v. City of Tigard, 512 U.S. 374, 114 S. Ct. 2309, 129 L. Ed. 2d 304 (1994), because the conservation restriction did not amount to a full relinquishment of property rights, but rather only a development restriction). Nollan v. California Coastal Commission, a landmark U.S. Supreme Court case on exactions, involved a challenge to the Commission’s requirement that the Nollans grant a public, beach-access easement in exchange for a coastal development permit. Though the easement in Nollan was not a conservation easement, this case illustrates how conservation easements can be utilized in conjunction with development approval. 53 See, e.g., Murphy v. Long, 170 S.W.3d 621, 623 (2005), where a conservation easement between neighbors and a na- ture conservatory became the basis for a fight between neighbors concerning the color of an access road. 54 See also Coastside Habitat Coalition v. Prime Props., 1998 U.S. Dist. LEXIS 6367 (1998), where developers created a conservation easement and rerouted a road to provide pro- tected habitat for snakes and frogs.

9 tation agencies may encounter land subject to conserva- tion easements during the infrastructure expansion planning and acquisition processes. The purpose of this section is to provide greater detail regarding these two general categories using specific examples of particular relevance. First, the use of con- servation easements in the context of environmental mitigation will be discussed. Second, conservation easements will be discussed as they relate to the vari- ous public and private programs designed to provide incentives for and facilitate scenic beautification and historic preservation. Each of these subsections will focus on how conservation easements typically are used by transportation agencies, noting the key, specific, legal requirements governing their use in each in- stance. Third, this section concludes with a discussion of the key legal and political issues implicated in the process of acquiring land subject to conservation ease- ments by eminent domain or otherwise. A. Environmental Mitigation Transportation agencies must comply with a myriad of federal and state environmental laws and regula- tions, which may be achieved by use of a conservation easement. The two primary examples of this are com- pensatory mitigation for aquatic resource impacts un- der the Clean Water Act (CWA) and the National Envi- ronmental Policy Act (NEPA). Under these laws, the adverse ecological effects of development may be less- ened or “mitigated” by the improvement and protection of resources similar to those impacted by development activities.55 Compensatory Mitigation Under the Clean Water Act The CWA was promulgated in 1972 for the purpose of improving and protecting the nation’s waters.56 Sec- tion 404 of the CWA establishes a program, adminis- tered by the U.S. Environmental Protection Agency (EPA), the U.S. Army Corps of Engineers (ACOE), and several states, designed to regulate the discharge of dredged or fill materials into federal waters, which in- clude wetlands, streams, and other waters of the United States.57 The CWA requires any entity that cannot avoid impacts to jurisdictional waters to minimize the impact to the extent possible and then compensate for the lost resource.58 The Federal Compensatory Mitigation Rule of 2008 provided a much-needed regulatory framework for this process of avoidance, minimization, and mitigation.59 55 See, e.g., Sierra Club v. U.S. Corps of Engineers, 464 F. Supp. 2d 1171 (development of mitigation banks for wetlands). 56 See Dubois v. U.S. Dep’t of Agriculture, 102 F.3d 1273, 1294 (1996). 57 See 33 U.S.C. 1344. 58 Compensatory Mitigation Rule, EPA, available at http://water.epa.gov/lawsregs/guidance/wetlands/wetlands mitigation_index.cfm; see also Nw. ByPass Group v. U.S. Army Corps of Engineers 470 F. Supp. 2d 30 (2007). 59 See 33 C.F.R. pts. 325 and 332 and 40 C.F.R. pt. 230. The Mitigation Rule requires entities (both public and private, individual and corporate) that impact aquatic resources to replace lost functions of the systems through the restoration, enhancement, or preservation of like-kind resources. A permittee has three primary mitigation methods that may be used. The Mitigation Rule sets a priority for the choice as follows: 1. The purchase of mitigation bank credits. 2. Payment to an in lieu fee program. 3. Undertaking permittee-responsible mitigation.60 When seeking permits under the CWA, transporta- tion agencies will use each of these mitigation meth- ods.61 The Role of Conservation Easements.—With each mitigation methodology, the Mitigation Rule requires that land comprising the compensatory mitigation be protected. Specifically, the Rule provides that: The aquatic habitats, riparian areas, buffers, and uplands that comprise the overall compensatory mitigation project must be provided long-term protection through real estate instruments or other available mechanisms, as appropri- ate. Long-term protection may be provided through real estate instruments such as conservation easements held by entities such as federal, tribal, state, or local resource agencies, non-profit conservation organizations, or pri- vate land managers; the transfer of title to such entities; or by restrictive covenants.62 The permitting and regulatory agencies that oversee compensatory mitigation prefer conservation easements to other land protection mechanisms because of their perpetual duration and third-party oversight. The Mitigation Rule also includes conditions for the use of conservation easements. For example, recogniz- ing that state law governs conservation easements and may vary considerably from jurisdiction to jurisdiction, the regulations provide that “when approving a method for long-term protection of nongovernment property other than transfer of title, the district engineer shall consider relevant legal constraints on the use of conser- vation easements and/or restrictive covenants in deter- mining whether such mechanisms provide sufficient site protection.”63 Another feature of the Rule concerns the role of third parties in regards to enforcement and monitoring of easements once they are established. Specifically, the regulations provide that “to provide sufficient site pro- tection, a conservation easement or restrictive covenant should, where practicable, establish in an appropriate third party (e.g., governmental or non-profit resource 60 33 C.F.R. 332.3(b)(1)-(3). 61 Georgia DOT has made extensive use of the purchase of “banked” credits; North Carolina DOT is the primary user of a statewide in lieu fee program known as the Ecosystem Enhancement Program; both of these states also carry out project specific mitigation through their own agency personnel. 62 33 C.F.R. 332.7(a)(1). 63 Id.

10 management agency) the right to enforce site protec- tions and provide the third party the resources neces- sary to monitor and enforce these site protections.”64 The parties involved in the conservation easement negotiation will vary depending on how the mitigation is being provided. In-lieu fee programs and private mitigation banks are generally wholly separate from transportation agencies. In these transactions, the agency will pay a fee or purchase credits in exchange for the transfer of liability for mitigation from the per- mittee (transportation agency) to the mitigation pro- vider (in-lieu fee program or banker). For permittee- responsible or project-specific mitigation, the transpor- tation agency will be directly involved in the full miti- gation process, including the land protection. Mitigation Banks.—Because of the legal preference expressed in the Rule and for purposes of convenience, transportation agencies increasingly have relied on the use of mitigation banks rather than permittee- responsible onsite and single-project offsite mitigation.65 Private companies and public agencies develop mitiga- tion banks throughout the country. The owner of a mitigation bank is the “sponsor.” Private banks are usually developed to sell credits to permittees on an as- needed basis, whereas transportation agencies (or other public agencies) most often develop banks to meet their own permit needs. The regulations define “mitigation bank” as: a site, or suite of sites, where resources (e.g., wetlands, streams, riparian areas) are restored, established, en- hanced, and/or preserved for the purpose of providing compensatory mitigation for impacts authorized by ACOE permits. In general, a mitigation bank sells compensatory mitigation credits to permittees whose obligation to pro- vide compensatory mitigation is then transferred to the mitigation bank sponsor. The operation and use of a miti- gation bank are governed by a mitigation banking in- strument [(MBI)].66 The credits referred to in the above definition are the “currency” of a mitigation bank. Each credit represents a unit of compensation (for permitted impacts to wet- lands and streams). Credits are generally based on acreage for wetlands and linear feet for streams. While the MBI is the legal instrument governing how the bank will operate and how and when the credits will be released, a mitigation plan is developed to fully describe the project property and how it will be restored, en- 64 Id. 65 Mitigation Banking Factsheet, EPA, available at www.epa.gov/owow/wetlands/facts/fact16.html#three (citing WENDY ELIOT, IMPLEMENTING MITIGATION POLICIES IN SAN FRANCISCO BAY: A CRITIQUE (The Conservancy 1985); Margaret Seluk Race, Critique of Present Wetlands Mitigation Policies in the United States Based on an Analysis of Past Restoration Projects in San Francisco Bay. ENVIRONMENTAL MANAGEMENT 9 (1), 71–82 (Jan. 1985); KEVIN L. ERWIN, WETLAND EVALUATION FOR RESTORATION AND CREATION: THE STATUS OF THE SCIENCE (J. A. Kusler & M. E. Kentula eds., Island Press 1990). 66 33 C.F.R. 332.2. hanced, or preserved to provide mitigation (i.e., how the credits will be generated). Before any credits are re- leased from a bank, the MBI and mitigation plan must be completed and approved by the district engineer af- ter considerable review and coordination with other agencies through the Interagency Review Team (IRT), financial assurances must be provided, and long-term protection of the mitigation bank property must be es- tablished.67 The regulations addressing site protection requirements for mitigation banks refer to “real estate instruments…or other long-term mechanisms used for site protection,” which as previously discussed have been defined to include (and, in fact, to prefer) conser- vation easements.68 To illustrate how the mitigation banking process works, two case studies are presented below.69 One is a bank established by a transportation agency (South Carolina Department of Transportation (SCDOT)). Res- toration Systems, LLC (a private mitigation provider), established the other bank to mitigate impacts from a transportation agency’s (North Carolina Department of Transportation) (NCDOT) permitted actions. 67 See 33 C.F.R. 332.8. 68 33 C.F.R. 332.7(a)(1), 332.8(t)(1). 69 The U.S. Army Corps of Engineers maintains a comprehensive database of mitigation banks and in lieu fee programs within each of the 39 Corps districts across the United States. The Regulatory In lieu fee and Bank Information Tracking System (RIBITS) may be accessed at http://geo.usace.army.mil/ribits/index.html. In addition to site- specific information, RIBITs provides templates for mitigation documents, including conservation easements.

11 Case Study: SCDOT Big Pine Tree Creek Mitigation Bank The SCDOT, in partnership with the South Carolina Depart- ment of Natural Resources (SCDNR), has developed the Big Pine Tree Creek Mitigation Bank in Kershaw County to mitigate the impacts of ongoing and future transportation projects in the Sand Hills ecoregion of South Carolina. The Big Pine Tree property includes approximately 440 acres of wetlands and stream buffer mitigation to be used by the Department for compensatory mitiga- tion for its own transportation projects. The property was and remains privately owned. SCDOT, how- ever, purchased a conservation easement over the property, which it transferred to the SCDNR. The conservation easement is held, monitored, and enforced by the SCDNR. Beyond the land restrictions and obligations of the conservation easement, mitiga- tion banks are expressly governed by the terms of the MBI. An interagency review team, led by the ACOE, is responsible for overseeing and enforcing the conditions of the MBI. The Big Pine Tree Creek Mitigation Bank is a “variable credits” mitigation bank, meaning that credits are calculated according to total land area and the functions of the restored lands. In this case, there were 540 to 804.8 wetland credits and 7,666.4 to 12,845.1 stream buffer enhancement credits. Wetland restoration on the site was accomplished by plugging existing agricultural drainage ditches to restore wetland hydrology and by planting native wetland woody vegetation. The restoration focused on reestablishing a plant community of Atlantic white cedar. Preestablished success criteria, management guidelines, and long-term monitoring will ensure that the construction activities restore a natural system. The management plan is designed to achieve the primary goal of protecting and restoring portions of the Big Pine Tree Creek watershed, thereby providing ecosystem benefits such as unaltered flow regimes, nutrient transfer, en- hanced water quality, and reduced erosion due to substrate scouring. The SCDNR will provide long-term stewardship of the site and enforcement of the conservation easement terms.70 In addition to single-user banks, like the one the SCDOT maintains for Big Pine Tree Creek, private en- tities have established what are known as entrepreneu- rial banks. With these banks, instead of the permit- seeking entity establishing its own mitigation bank, a private entity is the bank sponsor that acquires the conservation easements, obtains approval from the ACOE and all other necessary agencies, and then sells mitigation credits to those needing mitigation to comply with Section 404 permit requirements. Through the purchase of credits from a mitigation bank, the respon- sibility for mitigation (including legal liability) transfers from the permittee to the mitigation bank sponsor. For many transportation agencies, the purchase of credits from private mitigation banks represents an attractive 70 South Carolina Department of Transportation Environmental Stewardship Program information can be found at http://www.scdot.org/doing/stewardship.aspx (Accessed Jan. 2, 2013). alternative to requiring the agency to restore habitat and establish the mitigation project. Case Study: Bear Creek Wetland Mitigation Bank— Restoration Systems, LLC Restoration Systems, LLC, based in Raleigh, NC, provides private-sector compensatory mitigation to transportation agencies and other permittees. Each project is comprised of a tract or sev- eral tracts of land, ranging from 5 to more than 500 acres that are held in private ownership. Restoration Systems restores the acre- age so that it provides significant ecological benefits to the water- shed in which it is located. The company oversees all project entitlement, design, construction, monitoring, maintenance, and credit sales. Credits and the restored lands are protected by a permanent conservation easement. One of Restoration Systems’ early projects was the Bear Creek Wetland Mitigation Bank, which was developed to compen- sate for wetland impacts created by NCDOT’s roadway projects. The Bear Creek property is located adjacent to a large tributary to the Neuse River. Restoration Systems purchased the land in fee simple and then placed a conservation easement over the prop- erty. For this project, approximately 115 acres of ditched and drained farm fields were restored to their natural wetland condi- tion. An additional 303 acres of existing wetland also were in- cluded in the bank as preservation. This made 418 acres avail- able as offsite mitigation to the NCDOT. The NCDOT purchased all of the mitigation credits (through one contract) from the Bear Creek Mitigation Bank. NCDOT will use the mitigation to compensate for permitted impacts in the Neuse River Basin. The North Carolina Coastal Land Trust is the conservation easement holder. Restoration Systems paid the Coastal Land Trust a one-time endowment for the costs associ- ated with performing their duties as the easement holder. The National Environmental Policy Act Conservation Banking.—Federal transportation agencies (and any project receiving federal funding or a federal permit) may be required to mitigate impacts under NEPA,71 which also may be addressed through offsite mitigation and the use of conservation ease- ments.72 While the CWA requires mitigation of trans- portation project impacts to aquatic resources, NEPA requires public agencies to take a “hard look” at a myr- iad of social and environmental considerations.73 If a proposed project will have a significant effect on the environment, mitigation for that impact may be re- quired. One of the most common areas of impact that will require mitigation through the NEPA process is 71 42 U.S.C. § 4331 (1969). 72 Sierra Club v. Flowers, 423 F. Supp. 2d 1273 (S.D. Fla. 2006) (Mitigation plays an important role in the discharge by federal agencies of their procedural duty under NEPA to pre- pare an environmental impact statement). 73 See Kleppe v. Sierra Club, 427 U.S. 390, 96 S. Ct. 2718, 49 L. Ed. 2d 576 (1976).

12 any effect on threatened and endangered species habi- tat.74 Section 7 of the Endangered Species Act75 requires that a federal agency (or the proponent of a project re- ceiving federal funding or a federal permit) consult with the U.S. Fish and Wildlife Service to ensure that a pro- posed project will not have a detrimental effect on fed- erally listed species or their designated critical habi- tat.76 As with the regulation of aquatic resources discussed above, in certain instances no feasible alter- native exists that would avoid negative impacts on a protected species or its habitat. A primary means of mitigating these unavoidable “losses” is the permanent protection of “like-kind” habitat similar to that of the protected species. The transportation agency may un- dertake this effort itself by locating suitable lands, ac- quiring the appropriate protections (e.g., a conservation easement), and obligating itself to ongoing monitoring of the site. Or, as with wetlands and streams, mitiga- tion credits may be purchased from an established con- servation bank. In 2003, the U.S. Fish and Wildlife Service recog- nized the value of large-scale conservation banks in the protection of endangered species and their habitats and published express guidance for the establishment, use, and operation of such projects.77 This guidance was based on the already established protocol for wetland mitigation banks and incorporated many of the same processes, with a focus on the perpetual protection of the property by a conservation easement.78 The intent of conservation banking is to provide large areas where species may flourish and contribute to the recovery of an endangered population. The conservation bank property will be managed toward this goal and provide required monitoring and maintenance reports to the appropriate government agencies who oversee the proc- ess, which will include the U.S. Fish and Wildlife Ser- vice and also any other federal, state, or local entities with a specific interest in the conservation process. NEPA Review When a Transportation Agency Ac- quires a Conservation Easement.—While NEPA may be the impetus for acquiring a conservation easement as described above, transportation agencies should keep in mind that the acquisition of the easement itself likely implicates the NEPA process and will require some en- vironmental documentation, as was the case in Sabine 74 16 U.S.C. 1531–1544 (1973). 75 16 U.S.C. 1536. 76 50 C.F.R. pt. 402. 77 Guidance for the Use, Establishment and Operation of Conservation Banks, U.S. DEPARTMENT OF THE INTERIOR, FISH & WILDLIFE SERVICE, Washington, D.C., April 2003, http://www.ecosystemmarketplace.com/pages/dynamic/resource s.law_policy.page.php?page_id=194&section=home&eod=1. 78 See Sierra Club v. U.S. Army Corps of Engineers, 295 F.3d 1209 (2002) (protection of birds and snakes, notwithstand- ing the construction of a public parkway). River Authority v. U.S. Department of Interior.79 In most cases, as described below, the acquisition of a con- servation easement will be considered a Categorical Exclusion activity and a concise environmental review may be all that is necessary. “Categorical Exclusion”80 is a category of actions that do not individually or cumulatively have a significant effect on the human environment.81 The acquisitions of scenic easements are specifically contained in this cate- gory.82 Even when a project falls in one of the specific Categorical Exclusion categories, documentation should be completed that clearly demonstrates compliance with the regulatory definition describing a Categorical Ex- clusion project. Such documentation includes evidence that the project will not affect historic structures, regu- lated aquatic resources, floodways, traffic patterns, and a number of the same topics generally addressed in NEPA documentation. This Categorical Exclusion documentation, however, may take the form of a check- list or other shortened form.83 Where a proposed action is not one categorically ex- cluded or where special circumstances exist, an Envi- ronmental Assessment must be prepared. If it is found that no corresponding change in the physical environ- ment will occur, then a Finding of No Significant Im- pact is made. The finding in the Sabine case referenced above was that an Environmental Assessment was the appropriate level of NEPA documentation in the acqui- sition of a conservation easement to protect 3,800 acres of wetland in east Texas. In this case, the size of the easement being acquired by the U.S. Fish and Wildlife Service and the quality of the habitat being protected likely necessitated the preparation of an Environmental Assessment rather than a Categorical Exclusion, but the court concluded that a federal action that did not change the existing environment did not require the preparation of an Environmental Impact Statement (EIS). When a proposed major federal action will signifi- cantly affect the quality of the human environment, then an EIS must be prepared.84 As discussed in Sa- bine, the acquisition of a conservation easement where the property will remain in its original condition is unlikely to require an EIS. 79 745 F. Supp. 388 (1990). See also Sierra Club v. FHWA, 715 F. Supp. 2d 721 (S.D. Tex. 2010). 80 40 C.F.R. 1508.4. 81 23 C.F.R. 771.117. 82 23 C.F.R. 771.117(c)(10). 83 For example, the Washington State Department of Transportation and the Federal Highway Administration have a memorandum of understanding regarding Categorical Exclusion processes and procedures on a programmatic basis that can be found at http://www.wsdot.wa.gov/publications/ manuals/fulltext/M31-11/Agreements/MOU_ProgrammaticCE .pdf (Accessed June 5, 2012). 84 42 U.S.C. § 4332(c).

13 Recent Development The March 15, 2012, Federal Register contained a Notice of Rulemaking on this precise topic. Public comments were due May 14, 2012.85 The purpose of the rulemaking was to streamline envi- ronmental documentation in response to a Presidential Memoran- dum on the subject; ‘‘Speeding Infrastructure Development through More Efficient and Effective Permitting and Environmental Review,’’ issued August 31, 2011. The proposed rule adds a new section to 23 C.F.R. 771.117 that specifically addresses 10 Fed- eral Transit Authority actions that would be considered Categori- cal Exclusions. The new section will be 23 C.F.R. 771.118(c) and will replace 771.117(c). Proposed Section 771.118(c)(3) specifi- cally addresses environmental mitigation activities as being Cate- gorical Exclusions. In this analysis, always consider the list of special circumstances contained in 771.117(d) [proposed 771.118(d)], where an Environmental Assessment may be neces- sary even if the action is one ordinarily contained among the Categorical Exclusions. B. Scenic Beautification and Historic Preservation The first conservation easements were drafted and executed to protect scenic views associated with public infrastructure, mainly parks and roads.86 This tradition continues as transportation agencies at both the federal and state levels find themselves involved in scenic beautification and historic preservation efforts.87 Ex- amples include preserving farmland corridors along a new stretch of highway or preserving a historic train station. Generally, transportation agencies become in- volved in one of two ways on a particular project— either they fund and acquire the conservation easement or they provide grants to nonprofit land trusts or other entities to acquire and hold the conservation easements. This subsection first provides background on the federal and state grant programs that have resulted in transportation enhancements (TEs), which often in- volve the use of conservation easements, and then turns to a discussion of how conservation easements may be structured to best meet the transportation agency’s needs and protect the public’s investment. The two pri- mary types of TEs that were implemented prior to 2012 are corridor enhancement and historic preservation. 88 TEs are activities that “enhance the transportation experience” and have stood as a major driving force behind transportation scenic beautification and historic 85 Fed. Reg., Vol. 77, No. 51, Mar. 15, 2012, Proposed Rules, http://www.gpo.gov/fdsys/pkg/FR-2012-03-15/pdf/2012-6327.pdf (Accessed June 5, 2012). 86 See § II.B of this digest. 87 See Davis v. Slater, 148 F. Supp. 2d 1195 (2001), sup- ported by Jones v. Peters 2007 U.S. LEXIS 70332 (2007) (con- servation easement securing the long-term maintenance of historic property). 88 See http://www.fhwa.dot.gov/environment/ transportation_enhancements/ for an overview of Federal TE funding (Accessed Dec. 5, 2012). preservation efforts. Established by the Intermodal Sur- face Transportation Efficiency Act of 199189 (ISTEA), TE programs directed a portion of federal transporta- tion dollars to 12 specific activities. Since 1991, TEs have funded more than 20,000 projects around the country, including beautification and scenic preserva- tion efforts. TEs were subsequently funded by Congress and amended in 1998 under the Transportation Equity Act for the 21st Century90 (TEA-21) and in 2005 by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users91 (SAFETEA-LU). Pro- jects eligible for TE funding include: • Acquisition of scenic easements and scenic or his- toric sites (including historic battlefields). • Scenic or historic highway programs (including the provision of tourist and welcome center facilities). • Historic preservation. • Rehabilitation and operation of historic transpor- tation buildings, structures, or facilities (including his- toric railroad facilities and canals). • Preservation of abandoned railway corridors (in- cluding the conversion and use of the corridors for pe- destrian or bicycle trails).92 Each of these project types is greatly enhanced by the use of conservation easements as a means of pro- tecting the resource in perpetuity. The Moving Ahead for Progress in the 21st Century Act (MAP-21) law, ef- fective October 1, 2012, has replaced the Transportation Enhancement Program with the Transportation Alter- natives Program. Funds apportioned to the states under the Transportation Enhancement Program continue to be available under the same terms and conditions prior to MAP-21 until the funds apportioned to states have been obligated, rescinded, or lapsed.93 Under MAP-21, the acquisition of scenic easements and scenic or his- toric sites is no longer an authorized activity.94 How- ever, community improvement activities, including his- toric preservation and rehabilitation of historic transportation facilities and historic preservation of historic transportation facilities related to a byway, are authorized. Below is a case study of the Hearst Ranch TE project in California, where a conservation easement was ac- quired using federal funding and will protect in perpe- 89 102 P.L. No. 240, 105 Stat. 1914 (1991). 90 105 P.L. No. 178, 112 Stat. 107 (1998). 91 105 P.L. No. 59, 111 Stat. 1268 (1997). 92 23 U.S.C. 101(a)(35). 93 Fed. Reg., Vol. 77, No. 51, Mar. 15, 2012, Proposed Rules, http://www.gpo.gov/fdsys/pkg/FR-2012-03-15/pdf/2012-6327.pdf (Accessed June 5, 2012). 94 Transportation Alternatives Interim Guidance, http://www.fhwa.dot.gov/map21/guidance/guidetap.cfm (Accessed Dec. 5, 2012). See also MAP-21 and Its Effects on Transportation Enhancements, http://www.virginiadot.org/ business/resources/transportation_enhancement/MAP- 21_and_Transportation_Enhancements.pdf.

14 tuity a large and ecologically important piece of prop- erty along a byway. Case Study: Hearst Ranch Scenic Conservation Easement95—San Luis Obispo County, California In 2004, a group of private and public stakeholders worked to place conservation easements on more than 1,445 acres of sce- nic rangeland and coastline property between the Pacific Ocean and Highway 1, using approximately $21 million of TE funds. The Hearst Corporation (the property owner), the California Depart- ment of Transportation (Caltrans), and the American Land Con- servancy all worked together to secure federal TE funding and structure the conservation easements and other land protection mechanisms. After years of failed attempts to develop its property—due pri- marily to objections from environmental regulators and advocacy groups—the Hearst Corporation became eager to reduce property maintenance costs and to realize a return on its holding. At the same time, Caltrans was interested in preserving scenic views along Highway 1, an All American Road, which is the highest ranking under the Federal Highway Administration’s National Scenic Byways Program. During the negotiation process, given the large public expendi- ture for property acquisition (including conservation easements and fee purchases) and significant views to be protected in perpe- tuity, Caltrans insisted on the use of conservation easements over other legal mechanisms to ensure active monitoring and enforce- ment, which the American Land Conservancy could undertake. C. When Transportation Agencies Encounter Conservation Easements In addition to acquiring conservation easements to fulfill regulatory requirements or advance policy objec- tives, transportation agencies also encounter preexist- ing conservation easements on properties sought for right-of-way acquisition. For example, if the transporta- tion agency is planning a road corridor across a pri- vately-held property that contains a conservation ease- ment, which would preclude use of the property as a transportation corridor, the question arises whether the agency’s delegated condemnation powers allow it to extinguish the easement in pursuit of its transportation objectives.96 Not surprisingly, these issues give rise to several le- gal and practical issues of importance to transportation agencies. Addressing both of these, this subsection dis- 95 See California Natural Resources Agency Web site, http://resources.ca.gov/hearst_ranch.html, for extensive information, including legal documents, regarding the Hearst Ranch (Accessed May 17, 2012). 96 See also CUNA Mutual Life Insurance v. L.A. County MTA, 108 Cal. App. 4th 382, Cal. Rptr. 2d 470 (2003) (inverse condemnation action brought by plaintiff who held a conserva- tion easement to maintain historic building against transpor- tation authority planning excavation and construction of new rail station). cusses some fundamental legal issues relevant to ac- quiring property subject to conservation easements, including the rights and obligations of holders, particu- larly as they relate to just compensation. Next, the dis- cussion turns to an examination of some of the major challenges transportation agencies may face during this process, including the previously noted public purpose doctrine (Subsection 4(f) of the 1966 Department of Transportation Act97 review), and political opposition. Detecting Conservation Easements A conservation easement in the path of a planned transportation project will add time and expense to the planning and land acquisition processes, which are of- ten handled by separate departments within the trans- portation agency. Conservation easements may be de- tected either through the property records when examined by right-of-way personnel once the preferred alternative alignment has been chosen or by those car- rying out the environmental review and project plan- ning. Because early detection is better, project planning personnel should examine all available conservation easement databases as part of the environmental screening. While no uniform conservation easement database exists at this time, efforts are underway,98 and local land trusts, state Natural Heritage Programs, and county governments may maintain conservation ease- ment databases. Time spent checking these sources during project planning will result in significant sav- ings during implementation. Analysis Before Acquisition Upon identifying a conservation easement in the path of a planned project, the transportation agency must identify the parties with interest in the land— including the conservation easement holder—and carry out a full analysis of the property and the intended ac- tion before proceeding with the land acquisition. Key concepts that must be considered by the transportation agency are the “Prior Public Use Doctrine,” Subsection 4(f) analysis, and specific state law considerations. Prior Public Use Doctrine.—The common law “prior public use doctrine” prohibits the condemnation of land owned by certain government entities. The Florida Su- preme Court articulated this rule as follows: “[g]enerally, property held by an authority that has the power of condemnation cannot be taken by another au- thority with the same power of condemnation absent specific legislation” (emphasis added).99 The reference to “same power of condemnation” re- fers to the ability for higher levels of government to 97 49 U.S.C. 1653(f) (as of 2008 at 23 C.F.R. 774), requiring specific analysis (including “no feasible and prudent” alternative) before a transportation agency may impact a protected area. 98 See, e.g., National Conservation Easement Database, http://nced.conservationregistry.org/. 99 Fla. E. Coast Ry. Co. v. Miami, 321 So. 2d 545, 547 (Fla. 1975).

15 condemn conservation easements held by lower levels of government, but not vice versa, on preemption grounds.100 One rationale behind the prior public use doctrine is to prevent governmental agencies from con- tinuously condemning and recondemning each other’s property.101 This is an important consideration for transportation agencies because conservation ease- ments are often held by governmental entities at the federal, state, and local level. New Hampshire provides an interesting example of the prior public use doctrine in action to protect conser- vation investments. The state has implemented a pro- gram wherein an independent entity (The Land Con- servation Investment Program) was created by legislation to hold conservation easements on behalf of the state, as either the sole holder or as a coholder with a governmental agency.102 The program’s enabling stat- ute initially required legislative authorization for a state agency, including the New Hampshire Depart- ment of Transportation, to condemn an easement held or coheld by a local government.103 Recognizing the dif- ficulty this presented, the legislature amended the law in 1999 to allow the Department of Transportation to condemn minor slope and drainage easements after providing notice to all interested parties and determin- ing that there were no “reasonable and prudent alter- natives.”104 The impacts and judicial treatment of the public use doctrine vary from state to state. Section 4(f) Review.—Section 4(f) of the Federal De- partment of Transportation Act imposes procedural and substantive requirements on certain protected lands.105 Specifically, the law applies to publicly owned parks, recreational areas, wildlife and waterfowl refuges, and public and private historic sites.106 Should a proposed transportation agency project threaten any of these uses, the law allows the project to go forward only if “(1) there is no prudent and feasible alternative to using that land; and (2) the program or project includes all possible planning to minimize harm to the park, recrea- 100 “Preemption” is derived from the Supremacy Clause of the U.S. Constitution, Article VI, Section 2. 101 McLaughlin, supra note 8, at 1897, 1930 (citing United States v. Acquisition of 0.3114 Cuerdas of Condemnation Land, 753 F. Supp. 50, 54 (D.P.R. 1990) (“Without the prior [public] use doctrine, there could be a free for all of battling entities all equipped with eminent domain power, passing title back and forth.”); JULIUS L. SACKMAN, NICHOLS ON EMINENT DOMAIN § 8.01[2] (3d ed. 2007), hereinafter cited as “Sackman.” (“The underlying rationale is to prevent condemnation back and forth between competing condemnors.”). 102 Robert H. Levin, When Forever Proves Fleeting: The Condemnation and Conversion of Conservation Land, 9 N.Y.U. ENVTL. L.J. 592, 612 (2001), hereinafter cited as “Levin.” 103 Id. 104 Id. n.87 (citing N.H. REV. STAT. ANN. § 162-C:6(IV)). 105 49 U.S.C. § 303. 106 49 U.S.C. § 303(c). tion area, wildlife and waterfowl refuge, or historic site resulting from the use.”107 Conservation easements are relevant to Section 4(f) analysis because many conservation easements are owned or co-owned by public entities at the local, state, and federal level and protect the types of lands identi- fied above. For example, the U.S. Fish and Wildlife Ser- vice holds conservation easements designed to offer endangered species habitat protection pursuant to the Federal Endangered Species Act. When faced with these types of publically held conservation easements, transportation agencies must ensure that Section 4(f) alternatives analysis is performed or otherwise risk inviting a legal challenge. Although Section 4(f) offers some protection to con- servation easements in that a stringent analysis must be undertaken and conclusions made, a few limitations are worth noting as well. First, the law does not apply to privately-held conservation easements; in other words, those held solely by land trusts such as the Na- ture Conservancy. Also, the law does not apply to transportation projects funded entirely with state and local transportation dollars. In addition, it is worth not- ing that a recent amendment to Section 4(f) provides a simplified process for projects having a relatively minor impact on qualifying conservation easements.108 The federal courts have made it more difficult to challenge Section 4(f) determinations. The U.S. Su- preme Court’s 1971 decision in Citizens to Preserve Overton Park v. Volpe clarified the role of district courts in reviewing agency decisionmaking and opened the door for grassroots judicial advocacy pursuant to Sec- tion 4(f).109 Since that time, other federal court decisions have made it more difficult to challenge agency deter- minations, specifically as they relate to Section 4(f).110 Despite these limitations, transportation agencies must still acknowledge Section 4(f) where applicable, adjust planning efforts accordingly, and, where appropriate, avoid impacting land protected by a conservation ease- ment. State Laws.—A few states have imposed statutory planning requirements designed to avoid, where rea- sonable, the condemnation of conservation easements. For example, although Florida’s conservation easement enabling legislation provides that “nor shall this section prohibit the use of eminent domain for [acquiring con- servation easements],” the law goes on to require that 107 Id. 108 In 2005, Section 6009(a) of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) made the first substantive revision to Section 4(f) since its original enactment by simplifying and streamlining the review process for projects having only de minimis effects on uses protected by Section 4(f). 109 401 U.S. 402, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971). 110 See Matthew Singer, The Whittier Road Case: The Demise of Section 4(f) Since Overton Park and Its Implications for Alternatives Analysis in Environmental Law, 28 ENVTL. LAW 729, 731 (1998) (observing just one successful Section 4(f) case between 1985 and 1998).

16 “In any legal proceeding to condemn land for the pur- pose of construction and operation of a linear facil- ity…the court shall consider the public benefit provided by the conservation easement and linear facilities in determining which lands may be taken and the com- pensation paid.”111 Linear facility is defined to include “electric trans- mission and distribution facilities, telecommunications transmission and distribution facilities, pipeline trans- mission and distribution facilities, public transportation corridors, and related appurtenances.”112 As of the date of this writing, no reported cases in Florida have been decided that actually litigated the issue of the merit of the public benefit of a conservation easement as com- pared to the proposed linear facility. Similarly, New York legislation places special proce- dural requirements on condemning government-held conservation easements in that State.113 Beyond conser- vation easement enabling legislation, some states with agricultural lands preservation programs, like Rhode Island, afford added protection for conservation ease- ments acquired with state funds for such purposes.114 Such provisions, where applicable, invite an additional measure of judicial scrutiny and may provide legal grounds for those seeking to defend a conservation easement against eminent domain proceedings. Procedural Requirements of Terminating or Working Within Conservation Easements A transportation agency’s approach toward property subject to a conservation easement often is determined by the nature of the particular transportation project. The project may be entirely compatible with the uses remaining under the conservation easement. In other cases, the project may have a minor incompatible im- pact that the easement holder will accept through a minor amendment to or modification of the easement.115 Most often, however, transportation projects will fundamentally be at odds with the purposes of the con- servation easement,116 or one or more parties to the 111 FLA. STAT. § 704.06(11). 112 Id. (emphasis added). 113 N.Y. ENVTL. CONSERV. LAW § 49-0307. 114 E.g. R.I. GEN. LAWS § 42-82-6 (“[a]ny state or local agency must demonstrate extreme need and the lack of any viable alternative before exercising a right of eminent domain over any farmland to which the development rights have been purchased by the commission on behalf of the state….”). 115 See, e.g., NEB. REV. STAT. § 76-2, 117(4) (“An entity having the power of eminent domain may, through agreement with the owner of the servient estate and the holder of the conservation or preservation easement, acquire an easement over the land for the purpose of providing utility services.”). 116 “Condemning authorities acquiring land frequently also acquire and extinguish any servitudes burdening the land because continuance of the servitude burdens would interfere with the purposes for which the property is acquired.” McLaughlin, supra note 8, at 1897, n.206 (citing RESTATEMENT (THIRD) OF PROP.: SERVITUDES § 7.8 cmt. b). conservation easement will refuse to allow or be prohib- ited from consenting to an amendment. In these situa- tions, some or all of the property may need to be ac- quired either voluntarily through negotiation or by eminent domain. As for any conservation easements on the property, “the condemning authority would need to take both the encumbered land and the conservation easement, and either extinguish or release the ease- ment…thereby freeing the land to be used in manners formerly restricted by the easement.”117 This subsection is concerned with the legal and practical issues that arise when acquisition, commonly through eminent domain, is required. The law in most states allows for the condemnation of property subject to conservation easements. When the condemning authority takes title to the property, the conservation easement holder is a party to the ac- tion and the conservation easement is “taken” (or extin- guished) as well.118 Conservation easement enabling legislation in roughly half of the states expressly pro- vides that conservation easements are subject to, and not somehow specially protected from, eminent do- main.119 For example, South Carolina’s legislation pro- vides that “[a] person or entity empowered to condemn may condemn a conservation easement for other public purposes pursuant to applicable provisions of the 1976 Code or federal law.”120 Illinois’ statute similarly pro- vides that “[n]othing in this Act shall diminish the pow- ers granted in any other law to acquire by…eminent domain or otherwise and to use land for public pur- poses.”121 In these states, transportation agencies and even private entities endowed with eminent domain powers, as a matter of law, are expressly authorized to acquire and extinguish conservation easements by emi- nent domain. Under the common law, conservation easements may be acquired by eminent domain, the general rule being that “[s]ervitude benefits like other interests in prop- erty may be condemned under the power of eminent domain.”122 For example, “if a conservation easement 117 McLaughlin, supra note 8, at 1897, 1945. See also RESTATEMENT (THIRD) OF PROP.: SERVITUDES § 7.8 cmt. a (“[E]xtinguishment [of a servitude] may take place either as a direct result of the condemnation, or as the result of release or merger after the government has acquired the property benefited by the servitude. As the owner of a servitude benefit, a governmental body may use any of the means available to a private owner to extinguish the servitude.”). 118 McLaughlin, supra note 8, at 1897, 1904 (“conservation easements are generally accorded little protection from condemnation); Levin, supra note 102, at 592, 598 (“Privately held conservation easements…offer surprisingly little protection from condemnation.”), http://www.massland.org/ files/When%20Forever%20Proves%20Fleeting.pdf. 119 McLaughlin, supra note 8, at 1897, 1929. 120 S.C. CODE ANN. § 27-8-80. 121 765 ILL. COMP. STAT. § 120-6. 122 RESTATEMENT (THIRD) OF PROP.: SERVITUDES § 7.8 cmt. a. “A ‘servitude’ is a general category that includes a variety of

17 restricts the development of real property that is needed for a school, hospital, or publicly aided housing, eminent domain may be exercised.”123 This power also extends to property condemned for public transporta- tion infrastructure. As a result, conservation easements may be terminated by condemnation either directly or in virtue of condemnation of the underlying subject property.124 The fact that a conservation easement was donated for charitable purposes does not preclude later acquisition of the easement through eminent domain,125 though some have argued otherwise.126 As a result, con- servation easements may be condemned by state trans- portation agencies, whether by express statutory au- thority or under the common law, depending on the state. Just Compensation Under the Fifth Amendment of the United States Constitution and state constitutional provisions, the government must pay “just compensation” for property “taken for public use.”127 Therefore, fee simple owners of property are entitled to compensation for their proper- ties and the conservation easements being condemned. However, in some states, the law is unsettled as to 1) whether the holder of the conservation easement must receive compensation for the property interest that is held through the conservation easement, and 2) how the amount of just compensation should be measured. These issues can be significant ones for a transportation agency acquiring property given the resources invested in conservation easements, either by those purchasing them or benefiting from their dedication.128 Conservation easement enabling legislation may di- rectly address which party is entitled to compensation. Some states expressly require that just compensation non-possessory interests in land, including easements.” Id. § 1.1(2). 123 RICHARD R. POWELL, POWELL ON REAL PROPERTY § 34A.07[2] (Michael Allan Wolf ed., Matthew Bender, Co., Inc., 2009). 124 See JAMES W. ELY, JR. & JON W. BRUCE, THE LAW OF EASEMENTS AND LICENSES IN LAND § 10.42 (Thomson Reuters/West 2007), hereinafter cited as “ELY & BRUCE.” 125 Phillip E. Hassman, Annotation, Eminent Domain: Right to Condemn Property Owned or Used by Private Educational, Charitable, or Religious Organization, 80 A.L.R. 3d 833, § 2[a] (1996) (“The fact that property is owned or used by a private educational, charitable, or religious organization has not ordinarily, in itself, served to protect the property from being taken under an eminent domain power.”). 126 See Zachary Bray, Reconciling Development and Natural Beauty: The Promise and Dilemma of Conservation Easements, 34 HARV. ENVTL. L. REV. 119 (2010). 127 U.S. CONST. amend. V. 128 Josh Eagle, Notional Generosity: Explaining Charitable Donors’ High Willingness to Part with Conservation Easements, 35 HARV. ENVTL. L. REV. 49, Fig. 1 (2011), http://www3.law.harvard.edu/journals/elr/2011/04/01/notional- generosity-explaining-charitable-donors-high-willingness-to- part-with-conservation-easements/. be paid to the holder of the conservation easement be- ing condemned, not to the underlying property owner whose property is being condemned. Virginia’s legisla- tion, for example, provides that “[i]n [an eminent do- main] proceeding the holder of the conservation ease- ment shall be compensated for the value of the easement.”129 Other states, however, provide for the opposite. Arizona’s law, for example, states “the exis- tence of a conservation easement shall not be consid- ered an interest in real property for which compensa- tion or damages may be awarded under the laws pertaining to eminent domain.”130 In Arizona and states with similar laws, neither the property owner nor the easement holder need be compensated for condemna- tion of the easement. Some legal scholars have opined, however, that this approach is unconstitutional because conservation easements are an interest in real property, just like the underlying property itself, and that legisla- tion may not simply remove the just compensation re- quirement for that portion of the rights associated with the property.131 The issue is largely unsettled, so agen- cies should seek counsel in their state, particularly where enabling legislation is silent on who or whether compensation is owed for the easement itself.132 Should compensation be owed in a particular case, a number of principles govern how the amount of com- pensation is determined. The general rule is that just compensation means the property’s fair market value.133 However, conservation easements are most 129 VA. CODE ANN. § 10.1-1010(F). 130 ARIZ. REV. STAT. ANN. § 33-275(3). 131 See McLaughlin, supra note 8, at 1897. 132 Id. at 1933 (“conservation easements should be treated as compensable property for eminent domain purposes in all jurisdictions, whether they are characterized under state property law as restrictive covenants, equitable servitudes, equitable or negative easements, or some statutorily modified amalgam of those interests, and whether they are held in gross or appurtenant to an anchor parcel. Given the considerable public interest and investment in conservation easements, as well as the significant adverse policy ramifications of denying compensation to the holders of conservation easements upon condemnation, it is difficult to imagine a partial interest in land that is more worthy of legal protection in the eminent domain context.”). Some have advanced arguments to the contrary, including the claim that since many conservation easements prohibit or restrict subsequent sales, conservation easements by definition have no value. See id. at 1943. See also Long Green Valley Ass’n v. Bellevale Farms, Inc., 205 Md. App. 636, 46 A.3d 473, 484, citing Hardesty v. Md. SHWA, 276 Md. 25, 343 A.2d 884 (1975) (Negative easements involve the payment to landowner for a termination or extinguishment of a portion of his property rights). 133 Sackman, supra note 101, at § 13.01[9]. The U.S. Supreme Court considers “fair market value” to be “what a willing buyer would pay in cash to a willing seller.” See United States v. Va. Elec. & Power Co., 365 U.S. 624, 633, 81 S. Ct. 784, 790–91, 5 L. Ed. 2d 838, 847 (1961). See also tax deduction related cases, e.g,. Kiva Dunes Conservation v. Commr. T.C. Memo 2009-145 (June 22, 2009), cited in the appendix of this report.

18 often purchased by a governmental entity or donated by a private party to a nonprofit organization, not bought and sold in competitive and open markets.134 Therefore, as a practical matter, it is difficult to establish the fair market value of an individual conservation easement. Nonetheless, courts have recognized alternative valua- tion methodologies, which offer some guidance to trans- portation agencies.135 Among the various valuation methodologies, com- mentators view the before and after methodology to be the most appropriate for conservation easements.136 This approach holds that the value of a conservation easement equals the difference between 1) the fair market value of the property without the conservation easement, and 2) the fair market value of the property with the conservation easement in place.137 For exam- ple, if a property without a conservation easement is worth $1 million and with a conservation easement is worth $750,000, the value of the conservation easement would be $250,000. This methodology is relied upon in many cases because the before and after values are as- certainable using recognized appraisal techniques and comparable sales of similar properties. This is the methodology sanctioned by federal regulations and rec- ognized as the norm within the appraisal community for valuing conservation easement donations.138 To see how the before and after methodology works in practice, scenarios involving both total and partial takings need to be considered. The total taking scenario occurs when both the burdened property and the con- servation easement must be acquired in whole to make way for an inconsistent public use, such as an airport or a highway expansion.139 In these situations, the unit 134 McLaughlin, supra note 8, at 1897, 1937. Federal law requires that, for donated conservation easements, “the donee organization, on a subsequent sale, exchange, or involuntary conversion of the subject property, must be entitled to a portion of the proceeds at least equal to that proportionate value of the perpetual conservation restriction, unless state law provides that the donor is entitled to the full proceeds from the conversion without regard to the terms of the prior perpetual conservation restriction.” Treas. Reg. § 1.170A-14(g)(6)(ii); 26 C.F.R. § 1.170A-14(g)(6)(ii). 135 United States v. Miller, 339 U.S. 121, 123-124, 70 S. Ct. 547, 549, 94 L. Ed. 707, 712 (1950) …when market value has been too difficult to find, or when its application would result in manifest injustice to owner or public, courts have fashioned and applied other stan- dards…Whatever the circumstances under which such constitu- tional questions arise, the dominant consideration always re- mains the same: What compensation is “just” both to an owner whose property is taken and to the public that must pay the bill? 136 McLaughlin, supra note 8, at 1897, 1937–1939 (arguing that this approach has regularly been used by courts in valuating nonpossessory interests in land, including easements held in gross). 137 United States v. Miller, 339 U.S. at 138. 138 See THE APPRAISAL OF REAL ESTATE 86–87 (Appraisal Institute, 12th ed. 2001). 139 McLaughlin, supra note 8, at 1897, 1945. rule typically governs, meaning that the total compen- sation is apportioned between parties with interest in land in proportion to each party’s interest.140 Using the preceding example, the just compensation award would be capped at $1 million and the owner of the burdened property would be entitled to $750,000 and the holder of the conservation easement to $250,000. This approach ensures both that the condemning authority does not pay more than the fair market value of the property taken and that the holder of the conservation easement (and the public more generally) receives just compensa- tion for the value of the conservation easement. The partial-taking scenario occurs when only a por- tion of the property is taken for public purposes. This occurs, for example, when the amount of land needed for the right-of-way is relatively small compared to the size of the entire property. As with total takings, the before and after methodology ordinarily governs, but in a way that recognizes that only a portion of the prop- erty (and conservation easement) has been taken and that this has an effect on the residual, untaken portion of the property (and the conservation easement).141 The value of the conservation easement itself may be less- ened if value of the underlying parcel has been dimin- ished, wherein the “value” of the conservation easement is the rights forgone by the landowner as a result of the conservation easement. If a previously attractive, highly developable piece of land became less desirable (and, thus, less valuable) as a result of an adjacent ac- tivity, the conservation easement would be, in essence, removing or protecting a lesser value. It may be appro- priate for the holder of the conservation easement to be compensated for this lost value.142 For partial takings, just compensation equals “the difference between (1) the fair market value of the en- tire parcel immediately before the taking (and as unaf- fected thereby) and (2) the fair market value of the por- tion of the parcel remaining immediately after the taking (and as affected thereby).”143 Using the $1 mil- lion property discussed above, but now taking just a corner (or 10 percent) of it, the value of the condemned portion would be $100,000 if unencumbered by an easement and $75,000 with the easement. Thus, the fair market value of $100,000 would be paid by the con- demning authority, with $75,000 to the fee owner and $25,000 to the easement holder. While the above appraisal methodologies may be ap- plied to determine just compensation, they may not be the best methods and the conservation easement docu- ment itself may address valuation and apportionment of the proceeds.144 At its essence, the conservation 140 Sackman, supra note 101, at § 12.05[1]. 141 Sackman, supra note 101, at §§ 13.01[17], 14.02[1][a]. 142 McLaughlin, supra note 8, at 1897, 1957. 143 Id. at 1951. 144 Id. at 1954 (recognizing this approach as a rational, albeit “somewhat blunt instrument”). “Accordingly, if a credible means of more precisely apportioning the award is available, it should be utilized.”