Is North Dakota For Sale To Conservation Groups?

Over the Memorial Day weekend my family and I stopped off at the Lewis and Clark Interpretive Center in Washburn (often derided as the world’s most expensive highway rest area by our legislators). The exhibits were underwhelming, to say the least, certainly not worth the more than $20 it cost my family to get in nor the millions in legislative appropriations. But something did catch my eye.

There was a display commemorating the leadership of former North Dakota Governor Art Link, who gained notoriety for fighting fossil fuel development in North Dakota. His “when the land is quiet again” speech was cited as inspiration by 2012 gubernatorial candidate Ryan Taylor who ran on slowing down oil development in the state.

One of Link’s famous quotes is, “North Dakota is not for sale.” He was, of course, directing that at fossil fuel energy companies, but I wonder if that term takes on new meaning today.

Back during the legislative session one of the most controversial pieces of legislation to pass was the creation of an Outdoor Heritage Fund which would see tens of millions of dollars appropriated every biennium to pursue conservation goals.

Among those goals is the buying up of conservation easements which prevent a given piece of land from being developed even after it is sold. Reporter Dustin Hurst explains how it works in the Washington Examiner, noting that the use of taxpayer dollars to buy up conservation easements is becoming a national problem:

Here’s how it works: Private property owners, either interested in preserving trails, wetlands, scenic views or open spaces or looking for generous tax benefits, donate or sell off their development rights — including resource extraction — to government organizations or qualified nonprofit groups like Ducks Unlimited or The Nature Conservancy.

The arrangement, known as a conservation easement, forever encumbers the property. Even if the property owners sells the land or gifts it to heirs, the agreement legally blocks development.

The landowner can still hunt on the land or use it for farming and ranching, but cannot build, subdivide or perform any activity incompatible with conservation values.

The federal government and some states encourage the practice with generous tax deductions and credits. The federal income tax deduction only applies, however, to donors who agree to restrict development into perpetuity, as opposed to signing term-limited deals.

Roger Colinvaux, associate professor at the Columbus School of Law, notes the deductions cost $1.22 billion in 2008 and $2.18 billion in 2007, the latest figures available.

Several analysts and the Internal Revenue Service say the federal income tax deduction is vulnerable to abuse, particularly because donors can inflate land values, thereby reaping heftier tax credits.

The State of North Dakota, thanks to the actions of Governor Jack Dalrymple and the legislature, has set itself up for this very same sort of abuse.

The Outdoor Heritage Fund is allowed to make grants to non-profit conservation groups like Ducks Unlimited and others, and monies from the fund are also allowed to purchase easements.

We can be glad that the legislation caps the term of those easements at twenty years, but legislators I’ve spoken to aren’t so sure those easements won’t exist perpetually anyway. “There is a 20 year cap on the length of time which they can encumber the land, however it still is a horrible idea,” one House member emailed to me this morning. “I can foresee a scenario where it is written in an agreement that on the 2nd day after the 20 year period has passed, the land is once again tied up for an additional 20 years.”

It’s one thing for a private property owner to sell his or her land to another private person or group for the purposes of conservation, or enter into some sort of an easement agreement to restrict the use of the land, but it’s quite another for groups like Ducks Unlimited to be armed with taxpayer dollars to pursue that agenda.

“North Dakota is not for sale,” said Governor Link. He’s right. North Dakota shouldn’t be for sale. Not to coal companies. Not to oil companies. And not to special interest groups like Ducks Unlimited.