AMENDING MASSACHUSETTS CONSERVATION RESTRICTIONS: The Legal Perspective
by Jonathan Bockian, Esq.*
1. Goals of Outline: From a legal perspective (i.e., not from a policy or programmatic perspective) —
1.1. What are the areas of Massachusetts law that counsel][1] to the holder of a Massachusetts conservation restriction should be aware of when considering a conservation restriction (“CR”)[2] amendment?
1.2. By law, which government authority (such local or state agencies, the Massachusetts Attorney General’s Office, the court, or the state legislature) must be involved in amending an existing CR other than the CR holder and the property owner? Which government authority is it advisable to consult?
1.3. When drafting a new CR, how might potential future amendment of the CR be addressed?
2. Spectrum of changes to a CR: approval of conditional right (e.g., to build, or conduct activity); correction of error; change of administrative procedure (e.g., dispute resolution; notice); change of land area boundary (increase, decrease, swap); change of forbidden-conditional-allowed activities (increase, decrease, swap); change of purpose; release or extinguishment[3].
3. Massachusetts Laws discussed below: MGL c. 184, §§ 31-33; MA Constitution art. 49 of the Amendments as amended by Article 97; MGL c. 40, various sections, about municipal governance; charitable trust law; Massachusetts Environmental Policy Act (MEPA). Internal Revenue Code and Treasury Regulations not discussed in detail.
4. Individual CR Text:
4.1. The provisions of the CR should first be reviewed to determine if they allow for amendments, or establish limits and/or guidelines for amendments.
4.2. In the words of an Illinois court (working with a different statute)[4]: “[A]lthough the easement sets forth that the conservation values of the property are to be protected in perpetuity, it does not logically follow that the language of the easement could never be amended to allow that to occur. … It is possible that the conservation purposes of the easement could remain the same even if the language of the easement were subsequently altered. … Although … [the amendment provision of the CR[5]] provided that the easement could be amended, that section must be interpreted in harmony with the other provisions of the easement. That is accomplished by interpreting [the amendment provision] to mean that, although the easement allows amendments, no amendment is permissible if it conflicts with other parts of the easement.”
5. MGL c. 184, § 32[6]. Creates procedure for “release, in whole or in part” of conservation, historic preservation or agricultural preservation restriction created under c. 184, § 32. Does not explicitly refer to “amendments”. Requires a public hearing and approval by the municipal[7] and state authority[8] that approved the original CR being amended. I have found no case law interpreting the release and partial release provisions[9].
5.1. Unresolved questions (among many):
5.1.1. When is an amendment a “release… in part”?
5.1.2. Do the requirements of 184/32 paragraph 3rd for release of CRs purchased with state funds or granted in consideration of a loan or grant made with state funds and for APRs apply to partial releases?
5.2. Executive Office of Energy and Environmental Affairs (EOEEA) c. 184, § 32, Amendment Review Policy (not regulations)[10]:
5.2.1. When EOEEA approval is required, in the past, policy has been: “[I]t is strongly suggested that amendments be treated as something less than releases but subject to the approvals of the grantor, grantee, municipality, and the Secretary.”[11] [Emphasis added.] “Note that no provision is made at this time for the amendment of the Conservation Restriction. If amendment, release or termination is under consideration, counsel should examine section 32 of Chapter 184 of the General Laws, Article 97 of the Amendments to the Massachusetts Constitution, EOEEA’s Article 97 Land Disposition Policy, and the common law of charitable uses, and also consult with the Executive Office of Energy and Environmental Affairs for compliance with the Massachusetts Environmental Policy Act and for further information on this issue. (See: 301 CMR 11.26, Clause 5.)”[12]
5.2.2. What amendments will EOEEA approve/disapprove?
5.2.2.1. “The Secretary’s policy shall be to approve amendments to conservation restrictions only if they serve to strengthen the original conservation restriction or will have a neutral effect upon the provisions of the conservation restriction. No amendment will be approved which will affect the qualification of the conservation restriction or status of the grantee under any applicable laws, including Section 170(h) of the Internal Revenue Code, as amended, Article 97 of the Massachusetts Constitution, including EOEEA’s Article 97 Land Disposition Policy, or Sections 31-33 of Chapter 184 of the General Laws of Massachusetts.”[13] [Emphasis added.] [Question: if no tax deduction was taken for the CR, do tax laws matter to EOEEA? Should they?]
5.2.2.2. MGL c. 184, § 32, requires that “the governmental body … releasing” (and presumably, partially releasing, a CR), should determine “whether the restriction or its continuance is in the public interest”, and in doing so “shall take into consideration the public interest in such conservation [sic] … and any national, state, regional and local program in furtherance thereof, and also any public state, regional or local comprehensive land use or development plan affecting the land, and any known proposal by a governmental body for use of the land.” [14]
5.2.3. CR Amendments have been rare. According to EOEEA records shared with the author, approximately 4,400 CRs have been approved by EOEEA between 1970 and 2011. In that time, only 87 “amendments”, partial releases or releases have been approved.
5.3. Municipal approval under c. 184, § 32: When the CR is held by a governmental body, note that the statute requires partial release approval by “the governmental body holding the restriction”. If a conservation commission has acquired a CR in the name of the city or town, as authorized by c. 40, § 8C, it may be the conservation commission that must vote to approve a partial release under c. 184, § 32[15].
5.4. Third Party Standing to challenge EOEEA or municipal amendment decision:
5.4.1. EOEEA: EOEEA decision is not appealable under Administrative Procedures Act[16], and writ of certiorari is not available for a non-judicial or non-quasi-judicial act nor is mandamus available for discretionary acts[17].
5.4.2. Municipality: MGL c. 214, § 3, Paragraph (10) provides, “The Attorney General or ten taxpayers of a county, city, town or other subdivision may bring an action “to enforce the purpose or purposes of any gift or conveyance which has been or shall have been made to and accepted by any county, city, town or other subdivision of the commonwealth for a specific purpose or purposes in trust or otherwise, or the terms of such trust, or, if it shall have become impracticable to observe or carry out such purpose or purposes, or such terms, or, if the occasion therefor shall have terminated, to determine the purposes or uses to which the property involved shall be devoted and enforce the same.”[18]
5.4.3. A Land Court judge has held that a non-abutter does not have standing to enforce a CR that does not name the non-abutter as a party entitled to enforce the CR[19]. A 2011 Mass. Appeals Court decision giving abutters standing to enforce a deed restriction[20] was not about a CR under c. 184, §§ 31-33 and so did not address abutter standing to enforce CRs.
5.4.4. It may be relevant to municipally held CRs how court decisions have interpreted MGL c. 240, § 7A[21]. In the context of the Massachusetts Environmental Policy Act (MEPA)[22] the Supreme Judicial Court has held that if an “agency proposing a project failed to comply with the procedural requirement of a statute or regulation designed to protect the environment, the Superior Court would have subject matter jurisdiction under G. L. c. 214, § 7A”[23]. A subsequent SJC opinion clarified this by saying “we did not suggest that the question turned on the discretionary or nondiscretionary nature of the Secretary’s [of EOEEA] decision. Rather, we reasoned that, even if the Secretary’s … decision [as to whether there was MEPA jurisdiction] was incorrect or arbitrary, the project proponents, and not the Secretary, were the ‘person[s]’ causing environmental damage as the term was used in § 7A”[24]. Arguably, if a governmental entity holding a CR sought to amend it, ten plaintiffs could challenge that effort under MGL c. 240, § 7A. It may be less likely that such a challenge could be brought to the approval by a municipality or EOEEA of an amendment proposed by a private charitable entity and a landowner.
5.5. APRs: Mass Dept. of Agricultural Resources c. 184, § 32 regulations[25].
5.5.1. An APR may be “released” in whole or part only in “extraordinary circumstances, and where the release clearly yields a substantial benefit to the agricultural resources of the Commonwealth”, only “in accordance with” Art. 97 and EOEEA Land Disposition Policy and MDAR’s “no net loss policies”, and “only where the Commissioner [of MDAR] finds that the land to be released is no longer suitable for agriculture or horticulture”.[26] The No Net Loss Policy requires granting an APR on substitute land or, at the Commissioner’s discretion, a cash payment[27]. An Art. 97 vote is explicitly required[28].
5.5.2. MDAR Regulations do not address “amendment”.
6. MA Constitution, art. 49 of the Amendments as amended by Article 97[29]: In part: “Lands and easements taken or acquired [by purchase or otherwise as provided for by the legislature] for such purposes [i.e., conservation, development and utilization of the agricultural, mineral, forest, water, air and other natural resources] shall not be used for other purposes or otherwise disposed of except by laws enacted by a two thirds vote, taken by yeas and nays, of each branch of the general court.” [Emphasis added.]
6.1. As an easement, a CR held by a state or municipal entity is subject to Art. 97[30]. CR held by non-governmental entity, not acquired using state funds: Art. 97 almost certainly does not apply, but each situation requires examination[31].
6.2. When does a CR amendment “dispose” of the easement?
6.2.1. Courts:
6.2.1.1. “There are opinions of Attorneys General that state that a lease is a disposition for art. 97 purposes. … We did not say, however, that in leasing town property, the town disposed of the property.”[32]
6.2.1.2. “Grant of a one-year seasonal permit, revocable at will, for conducting a program under the supervision of the Department of Environmental Management was not a disposition of land subject to art. 97.”[33]
6.2.2. Attorney General Opinions: AG Opinions assert that “any change of legal or physical control” over Art. 97 land or easement triggers Art. 97.[34]
6.2.2.1. A “. . . ‘disposition’ includes any change of legal or physical control, including but not limited to outright conveyance, eminent domain takings, long and short-term leases of whatever length and the granting or taking of easements.”[35] [Emphasis added.]
6.2.2.2. “[W]here the interest … is as speculative in nature as a permit, revocable … at any time, it should not be considered an acquisition within the terms of Article 97…. Where control … is acquired under circumstances known to be temporary by the acquiring agency and is subject to revocation at any time, it would not in my opinion be an interest acquired ‘to accomplish the purposes’ of Article 97.”[36]
6.2.2.3. “Any relinquishment of physical control over the land would be a disposition and would require a vote of two-thirds of both Legislative branches. The Department [of Environmental Management] cannot, therefore, through these permits [to the abutting property owners for the exclusive use of the perimeter strip of land acquired by DEM abutting their land], surrender its duty to police, conserve, preserve, and care for the reservoir and the perimeter strip. Whether or not these exclusive land use permits transfer such control depends upon their scope.”[37] [Emphasis added.]
6.2.2.4. “[A]n agreement to subject the use of state land to the terms of future ordinances and by-laws of the municipalities in which that land is located is a relinquishment of control of such land and, therefore, a ‘disposition’ within the meaning of Article 97”.[38]
6.2.3. EOEEA Policy re. Art. 97 follows AG Opinions[39]: “[I]t is the opinion of the Secretary [of EOEEA] that once acquired, conservation restrictions become subject to the same restraints on alienation applicable to parkland open spaces”.[40] “… as a general rule, EOEA [sic] and its agencies shall not sell, transfer, lease, relinquish, release, alienate, or change the control or use of any right or interest of the Commonwealth in and to Article 97 land. … An Article 97 land disposition is defined as a) any transfer or conveyance of ownership or other interests; b) any change in physical or legal control; and c) any change in use, in and to Article 97 land or interests in Article 97 land owned or held by the Commonwealth or its political subdivisions, whether by deed, easement, lease or any other instrument effectuating such transfer, conveyance or change…”[41]
6.3. Community Preservation Act[42]: CR[43] acquired by nongovernmental entity using Community Preservation Act (CPA) funds might meet the Art. 97 test of (a) an easement (b) acquired pursuant to an act of the legislature using state funds[44], (c) for a conservation purpose. No court cases or AG Opinion yet.
6.4. Who has standing to raise Art. 97? “There is no private right of action under Article 97”. Chase et al. v. Trust for Public Land et al., Essex Land Ct. Misc. Case No. 329075, 2008, 16 LCR 135; 2008 Mass. LCR LEXIS 27, Lawyers Weekly no. 14-032-08, summarized April 14, 2008. The Court in this case nevertheless opens the possibility that in “the context of” a ten taxpayer lawsuit under MGL c. 214, §3, parag. 10, the plaintiffs may be “able to invoke Article 97 to obtain judicial review” of approval by a state agency that holds a CR of acts of the landowner.
7. Other Municipal Law possibly relevant to amendment of CR held by municipal body:
7.1. MGL c. 40, § 3, 4, 15 and 15A.
7.1.1. If CR is interpreted not to be for “park purposes”: To dispose of land held for a particular municipal purpose other than a park purpose, first the “board or officer having charge of land” must determine the land is no longer needed by the particular board or for the particular purpose, pursuant to MGL c. 40, § 15A[45]. Then the selectmen, city council, or board of aldermen may authorize disposition pursuant to MGL c. 40, § 3[46],[47].
7.1.2. If CR is interpreted to be for “park purposes”: Section 15A does not apply to land held for “park purposes”. Therefore, the selectmen may vote to authorize release or partial release of a CR without a section 15A authorization[48].
7.1.3. As noted above, the selectmen of a town must be “authorized” to “convey” “real estate”[49]. Thus, if an amendment of a CR partially releases a municipal interest in the real estate affected by the CR, in my opinion a town meeting vote is required to authorize a vote by the selectmen to amend,.
7.1.4. A conservation commission has no statutory authority to release, partially release or amend a CR on its own motion, without town authorization. Such authorization would have to come from the municipality acting under c. 40, § 3[50].
7.1.5. CR “taken … other than by purchase”: MGL c. 40, Section 15[51] sets up a different procedure for real estate rights “taken for such city or town, otherwise than by purchase” and requires a 2/3 vote of the municipal legislative body for disposal of such rights, even if Art. 97 did not apply.
7.1.6. These statutes do not supersede the “public trust” common law doctrine.
8. Charitable Trust law
8.1. What is a charitable trust? A trust is a fiduciary relationship about property, created by a manifest intention (not a subjective intention) to create it[52]. A charitable trust is an express trust in which the property is to be devoted to a charitable purpose[53].
8.2. If a Mass CR were to create a charitable trust, what would be the effect of that on amendments?
8.2.1. When it becomes impossible or impractical to carry out the purposes or required administrative provision of a charitable trust is impossible or impractical, court approval is required to change the purpose and use of the trust asset – a cy pres proceeding – or to change administrative provisions of the trust – an administrative (or equitable) deviation proceeding. An amendment that does not do those things could be done without court involvement. If a charitable trust includes a provision to allow for the amendment of the trust in matters other than the trust’s purpose, presumably such an amendment could be made without court approval.[54]
8.2.2. How do you know when an amendment makes a change that requires court approval? Judgment call.
8.2.3. While a legislative vote may authorize a change of use of land subject to the public trust doctrine[55] or MA constitution Art. 97, a legislative vote alone cannot authorize a change of use of property subject to a charitable trust[56]. The difference between charitable trust law and the “public trust doctrine” in Massachusetts: “[T]he legal mechanism inhibiting change in the use of land subject to a charitable trust is the law of contract, whereas the method of enforcing the public trust is explicit legislative action.”[57]
8.3. Nationwide in general, do CRs create charitable trusts? See the debate about whether CEs generally create a charitable trust (spurred by the attempted termination of a Wyoming conservation easement in Hicks v. Dowd) between C. Timothy Lindstrom (doubting the application of charitable trust doctrine) and Nancy A. McLaughlin and W. William Weeks (advocating the application of charitable trust doctrine)[58].
8.4. What creates a charitable trust in Massachusetts? Not clear. (Note: none of the cases cited below are about a CR; all but one case is about land conveyed to a municipality and the creation of a public trust.)
8.4.1. Manifest intent that land be used for a particular, not general, purpose.[59]
8.4.2. Recitation of “in trust” not required.[60].
8.4.3. Totality of particular instrument and circumstances must be evaluated.[61]
8.4.4. Whether a CR is purchased or granted as mitigation required for a municipal permit may not matter as to whether a CR creates a charitable trust[62].
8.5. Some Pros and Cons of whether a “standard” Massachusetts CR[63] creates a charitable trust (in addition to the national debate arguments as expressed by McLaughlin-Weeks and Lindstrom):
8.5.1. No charitable trust: The Massachusetts statutory language governing the creation and release or partial release of CRs shows legislative intent that CRs aren’t to be treated as charitable trust. No statute would be needed to make CRs enforceable in perpetuity if they created charitable trusts[64]. MGL 184, § 31, defines a CR as “a right,” not a trust. Further, by specifying certain methods to release a CR other than the cy pres petition that would be required if a CR were a charitable trust, the statute places CRs outside the charitable trust context. MGL c. 184, § 32, says, “The restriction may be released, in whole or in part, by the holder … in the same manner as the holder may dispose of land or other interests in land, but only after” the required non-judicial hearing and approval procedures [emphasis added]. “Applying cy pres to modify [a conservation restriction] by giving a new party the ability to step in and enforce them, would run counter to public policy, enunciated in the statutes governing restrictions, requiring that the beneficiaries of restrictions be stated with specificity[65].” If the only difference between release of a CR and disposition of other interests in land is the approval process required by § 32, and if no mention is made of a cy pres petition or other judicial involvement, this suggests the intent to treat CRs as something other than charitable trusts (unless the CR expressly creates a trust). CRs under Massachusetts law are not significantly distinguishable from the Colorado conservation easement that a U.S. Tax Court judge found did not create a charitable trust[66].
8.5.2. Yes charitable trust: The Massachusetts statutory framework of CRs does not preclude creation of a charitable trust. The statute’s requirements for release of a CR are merely in addition to any other procedure that may be required by the express or implied terms of each CR instrument, including the cy pres procedure required to extinguish a charitable trust. The statute only addresses the real estate aspect of CRs, not the trust aspect, and does not thereby eliminate the trust aspect, just as it does not eliminate the requirement, if any, of the Massachusetts Constitution art. 97. If the CR says it may be extinguished only by judicial proceedings (as the IRC and Treasury Regulations have been understood to require) it must mean that the release procedure required by c. 184, §§ 32, are insufficient and that the instrument intends to create a trust that requires court approval to be released or extinguished. As Prof. McLaughlin has written[67], “If land trusts and government entities wish to be able to modify or terminate the easements they acquire upon satisfaction of only the requirements in the state conservation easement enabling statute, they should negotiate with the easement grantor for that discretion and memorialize that grant of discretion in the conservation easement deed, thus avoiding any question or confusion as to what restrictions apply. They may not be entitled to federal tax incentives, because federal law has its own set of rules, and some landowners may decline to convey ostensibly ‘perpetual’ conservation easements on those terms, but all parties would be on notice of the terms of the conveyance and could not be accused of subterfuge.”
8.5.3. Statement by an Assistant AG in 2006: “While the Attorney General’s authority to oversee public charitable trusts may provide an important weapon in enforcing conservation easements, we often rely on the Massachusetts easement enabling statute (which requires a public hearing and approval by a public official to release a conservation easement in whole or in part), coupled with the Attorney General’s statutory authority to prevent damage to the environment, to ensure that restricted land remains protected.”[68] [Emphasis added.]
8.6. Language of individual CRs differs.
8.7. Standing for cy pres: Land owner and CR holder may ask court to approve amendment, but only AG may intervene.[69]
8.8. Practice: Keep in mind the possibility that CR might create a charitable trust but evaluate each amendment on its own.
9. UPMIFA[70]: Does not apply to “Program-related asset”, i.e., “an asset held by an institution primarily to accomplish a charitable purpose of the institution and not primarily for investment”.
10. MEPA[71]:
10.1. “MEPA review is required when one or more review thresholds are met or exceeded and the subject matter of at least one review threshold is within MEPA jurisdiction.”[72]
10.2. Jurisdiction:
10.2.1. MEPA has jurisdiction over a “Project” undertaken by an “Agency”, or those aspects of a Project within the subject matter of any required “Permit”, or a Project involving “Financial Assistance”; and those aspects of a Project within the area of any “Land Transfer” [73].
10.2.2. “Project” is any “work or activity that is undertaken by: (a) an Agency; or (b) a Person and requires a Permit or involves Financial Assistance or a Land Transfer”. Thus, if a CR change requires a Permit, the change presumably is a “Project”. EOEEA and MDAR are “Agencies”. “Permit” includes any approval by an Agency “for or by reason of a Project”. Despite or because of the circularity of definitions, approval by EOEEA or MDAR of a release, partial release, or amendment is presumably a Permit, and MEPA jurisdiction is established.
10.3. Thresholds requiring filing an environmental notification form (“ENF”) and other MEPA review if the Secretary so requires (partial list): “Release of an interest in land held for conservation, preservation or agricultural or watershed preservation purposes”[74]. Note that this regulation does not refer to “partial release” or “amendment”. “Conversion of land held for natural resources purposes in accordance with Article 97 of the Amendments to the Constitution of the Commonwealth to any purpose not in accordance with Article 97”[75]. “Alteration of designated significant habitat”[76]. “At the initiative of the Secretary … provided that the Secretary finds … the potential Damage to the Environment … would be caused by a circumstance or combination of circumstances that individually would not ordinarily cause Damage to the Environment … [or] requiring the filing of an ENF … is essential to avoid or minimize Damage to the Environment and will not result in an undue hardship for the Proponent”[77].
11. Internal Revenue Code[78] and Regulations[79]: This subject is too broad to address in detail in these materials, which focus on Massachusetts specific laws, but in general:
11.1. IRS view: “An easement is not enforceable in perpetuity if it allows amendments that change the nature of the restrictions imposed on the property,”[80] but “In Kaufman v. Commissioner, 136 T.C. 294 (2011), we declined to rule that a conservation deed must require a judicial proceeding to extinguish an easement for the easement to be perpetual. … We once again decline to create an absolute rule. Rather, we find that the extinguishment regulation provides taxpayers with a guide, a safe harbor, by which to create the necessary restrictions to guarantee protection of the conservation purpose in perpetuity.”[81]
11.2. Owner who took tax deduction may not want to amend if amendment causes CR to no longer be a “qualified conservation contribution”[82].
11.3. Holder of CR may not want to amend if benefit to owner or insider created impermissible “private benefit” or “private inurement”[83] or other effect of amendment (e.g., change in purpose) would cause IRS to question grantee’s charitable status or status as a “qualified organization” to hold deductible CRs[84]. IRS requires exempt organizations to report and explain the “number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during the tax year”[85] and notes, “Tax exemption may be undermined by the modification, transfer, release, extinguishment, or termination of an easement.”[86]
11.4. EOEEA may not approve amendment if holder’s status adversely affected under tax law, per EOEEA approvals policy[87].
12. Mass Tax statute: MGL c. 62, § 6(p) and c. 63, § 38AA[88]: Be aware of, in tandem with federal tax law.
13. Amendments and conveyancing:
13.1. A CR amendment should be recorded to put 3rd parties (e.g., future buyers, mortgagees) on notice of its existence.
13.2. Obtain subordination to amendment from mortgage holder and holders of other superior liens. Do not assume mortgagee named on mortgage is current mortgage holder. Failure to obtain subordination may create non-compliance with Internal Revenue code and Regulations, and will result in extinguishment of amendment upon foreclosure.
13.3. Unrecorded amendment:
13.3.1. CR holder concern: a party taking title to land subject to a CR (buyer, mortgagee) who does not know of an unrecorded amendment may claim to be not subject to the amendment.
13.3.2. Owner concern: a party about to take title to land subject to a CR (buyer, mortgagee) who finds a property alteration that was forbidden pre-amendment (e.g., does a plot plan or survey) or who learns of an unrecorded easement may refuse to proceed until the amendment is recorded.
13.4. Buyer concern: If Buyer is depending on amendment to allow certain structure or use, will the absence of a court approval (under charitable trust law for privately held CR) or Art. 97 vote or c. 40, § 15A vote (for state or municipally held CR) be a problem?[89]
15. Amendments Guidelines: see
14.1. Model Conservation Restriction Amendment Policy Guidelines, Massachusetts Easement Defense Subcommittee, March 6, 2007[90].
14.2. Wealth of materials available to Land Trust Alliance members, at http://learningcenter.lta.org/, including Legal Risk Spectrum table in Amending Conservation Easements: Evolving Practices & Legal Land Trust Standards and Practices Guidebook, Land Trust Alliance, (2007) pp. 55-56, and an interesting recent (Feb. 2012) discussion on the listserv LANDTRUST-L@LISTSERV.INDIANA.EDU about amending a CR (including the baseline documentation) to add land vs. creating a second, new CR
15. New CRs & anticipating unknowns:
15.1. Amendment provision: requires policy decision by CR Grantee of whether to allow any amendments, whether to restrict what other provisions of the CR may be amended, and what (if any) internal amendment review procedures to write into the CR.
15.2. Recitation that charitable trust is/is not created?
15.3. Conditional vs. prohibited activities. After a CR is granted, changing what activities are allowed or forbidden requires an amendment. If the CR conditionally allows an activity subject to the approval of the Grantee (i.e., a conditional reserved right), the approval is not an amendment. Caveat: provision for overbroad conditional reserved rights may not comply with Internal Revenue requirements or be approved by EOEEA in a new CR.
16. Recap:
16.1. Key general points:
16.1.1. Some level of government approval – at minimum, municipal and EOEEA approval – is required for an amendment that “releases” in whole or part a CR created under MGL c. 184, §§ 31-33.
16.1.2. An amendment of a CR for which an income tax deduction was taken may cause significant problems with the IRS for the landowner and/or the CR holder if the amendment would make the CR disqualified for the deduction, and could cause significant problems with the IRS for the CR holder even if no tax deduction was taken.
16.1.3. A 2/3rd majority roll-call legislative vote is required for an amendment of a CR held by a state or local government is the amendment “disposes” in whole or in part of the government entity’s interest in CR.
16.1.4. Court approval would be required for an amendment to a CR that is a charitable trust held by a charitable entity if the amendment releases the CR in whole or part, changes a conservation purpose of the CR, allows activity that conflicts with a conservation purpose of the CR, or alters administrative provisions of the CR.
16.2. Open legal questions: When does an amendment become a partial release under MGL c. 184, § 32? If state or local funds paid for a CR, when does an amendment become a “disposition” of an easement or land for Art. 97 purposes? When does an amendment cause a CR to become one that wouldn’t qualify for a federal tax deduction? Does a CR create a charitable trust?
16.3. Which amendments fall into these categories and which don’t is not always clear, so the decision for a CR holder about whether and how to amend requires policy decisions and practical judgment, pursuant to careful guidelines, about the need for, effect of, and risk created by each proposed amendment.
* Jonathan Bockian is an attorney in practice in Watertown, Massachusetts, as Law Office of Jonathan M. Bockian, and writes Preservation Law Digest on the Web at http://preservationlawdigest.com. I appreciate the assistance of Andrew Goldberg, Assistant Attorney General in the Massachusetts Attorney General’s Environmental Protection Division, and Irene Del Bono, Director of the EOEEA Conservation Restriction Review Program, while preparing the 2011 version of this outline. Robert H. Levin, Esq.’s case law summaries for the Land Trust Alliance were also of assistance for cases on standing. The editorial views expressed and any errors contained are entirely my own.
© 2012 Jonathan Bockian. This material (“Material”) does not create an attorney-client relationship with Jonathan Bockian. Recipients should not construe any information in this Material as a legal opinion on any specific facts or circumstances, and should not act on such information without seeking legal or other professional counsel. Any information pertaining to federal taxation in this Material is neither intended, nor provided, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein, and cannot be used for such purposes.
[1]This outline may raise as many questions as it answers, and a CR holder should always consult counsel about any particular CR amendment being contemplated.
[2] This outline focuses on conservation restrictions, which are one of the family of restrictions that may be created pursuant to MGL c. 184, §§ 31-33. Other than a brief mention of agricultural preservation restrictions, the commonality and differences in the law regarding each type of restriction are outside the scope of this outline.
[3] “Amendment” in this outline does not mean approval of a conditional right or complete release of a CR.
[4] Bjork v. Draper, 381 Ill. App. 3d 528, 886 N.E.2d 563, 572 (Ill. App. Ct. 2008); appeal denied, 229 Ill. 2d 618, 897 N.E.2d 249 (Ill. 2008); subsequent appeals denied, 2010 Ill. App. 1040, 936 N.E.2d 763 (2010), 943 N.E.2d 1099, 239 Ill.2d 550 (2011).
[5] The provision was, “No alteration or variation of this instrument shall be valid or binding unless contained in a written amendment first executed by Grantors and Grantee, or their successors”. Ibid.
[6] C. 184, § 32, Second paragraph, “The restriction may be released, in whole or in part [emphasis added], by the holder … in the same manner as the holder may dispose of land or other interests in land, but only after a public hearing upon reasonable public notice, by the governmental body holding the restriction or if held by a charitable corporation or trust, by the mayor, or in cities having a city manager the city manager, the city council of the city or the selectmen of the town, whose approval shall be required, and in case of a restriction requiring approval by the secretary of environmental affairs, the Massachusetts historical commission, the director of the division of water supply protection of the department of conservation and recreation, the commissioner of food and agriculture, or the director of housing and community development, only with like approval of the release.”
Third paragraph, “No restriction that has been purchased with state funds or which has been granted in consideration of a loan or grant made with state funds shall be released [emphasis added] unless it is repurchased by the land owner at its then current fair market value. … Agricultural preservation restrictions shall be released by the holder only if the land is no longer deemed suitable for agricultural or horticultural purposes or unless two-thirds of both branches of the general court, by a vote taken by yeas and nays, vote that the restrictions shall be released for the public good. …”
[7] The mayor, or in cities having a city manager the city manager, the city council of the city or the selectmen of the town.
[8] The secretary of environmental affairs for a CR; the commissioner of food and agriculture for an APR.
[9] There are court decisions involving restrictions under MGL c. 184, §§ 31-33, but not that interpret the statute’s release requirements.
[10] EOEEA policy had been set out in The Massachusetts Conservation Restriction Handbook, The Commonwealth of Massachusetts Executive Office of Energy and Environmental Affairs Division of Conservation Services, 1991 ed. rev. 2008, (“EOEEA CR Handbook”) which as of March 2012 could no longer be found at the EOEEA website. A model CR that is available as of March 2012 at http://www.mass.gov/eea/docs/eea/dcs/model-cr-may08.doc (“DCR Model CR 2008”) includes an amendment provision with commentary.
[11] EOEEA CR Handbook.
[12] Comment in EOEEA CR Handbook re. extinguishment provision of model CR.
[13] EOEEA CR Handbook. This standard is similar to that recommended by the Massachusetts Land Trust Coalition’s Easement Defense Subcommittee, Model Conservation Restriction Amendment Policy Guideline, and the Land Trust Alliance’s Standards and Practices, Standard 11 I. “Amendments”.
[14] This language was in the original Act 666 of 1969 that created perpetually enforceable CRs.
[15] See the portion of this outline regarding required votes under various sections of MGL c. 40.
[16] MGL c. 30A. The EOEEA hearing is not an adjudicatory hearing.
[17] McClure v. Epsilon Group, LLC et al., Misc. No. 10 MISC 438570, 2011 Mass. LCR LEXIS 80 (Mass. Land Ct. July 28, 2011) citing Massachusetts Outdoor Advertising Council v. Outdoor Advertising Bd., 9 Mass. App. Ct. 775, 789 (1980) and Warren v. Hazardous Waste Facility Site Safety Council, 392 Mass. 107 , 118 (1983). Cf. Long Green Valley Ass’n v Bellevale Farms, Inc., Maryland Court of Special Appeals, No. 0228, November 30, 2011.
[18] This statute cited in Daly et al. v. McCarthy et al., 11 LCR 367 (Mass. Land Ct. 2003), affd. 823 N.E. 2d 434, 63 Mass.App.Ct. 1103 (Mass. App. Ct. 2005) (allowing standing to taxpayers bringing suit to enforce subdivision approval condition requiring agricultural preservation restriction; not granting standing to the taxpayers to enforce the APR directly). But see McClure v. Epsilon Group (supra, note 18) (“The Restriction is clear that the power to enforce it resides in the Selectmen and only in the Selectmen. Nothing about the Restriction lends itself plausibly to the conclusion that the Restriction was intended to vest in each citizen of Chelmsford an independent right to enforce the restrictive covenants of the Restriction, should one or more of those citizens, acting in their own names and interest, conclude that it was an appropriate occasion to have a court enjoin one violation of the Restriction or another.” Emphasis added.)
[19] McClure v. Epsilon Group (supra, note 18), citing the Land Court decision in Wolfe v. Gormally, 14 LCR 629, 633-34 (2006) (Misc. Case No. 274368); see also footnote 4 in Spencer v. Slavin, 19 LCR 17 (2011), Misc. Case No. 09-397931. (All these decisions are by the same Land Court judge.) See also Chase v Trust for Public Land (citation below in section 6.4), also citing Wolfe v. Gormally.
[20] Jon Rosenfeld & others vs. Zoning Board of Appeals of Mendon, 78 Mass. App. Ct. 677 (2011); Further appellate review denied, 459 Mass. 1109 (2011). Note that pursuant to MGL c. 184, § 26, a CR is exempt from the provisions of MGL c. 184, §§ 27-30 if “if the instrument imposing such conservation, preservation, agricultural preservation, affordable housing or other restriction” is properly recorded and indexed and “describes the land by metes and bounds or by reference to a recorded or registered plan showing its boundaries.”
[21] MGL c. 240, § 7A provides in part, “The superior court for the county in which damage to the environment is occurring or is about to occur may, upon a civil action in which equitable or declaratory relief is sought in which not less than ten persons domiciled within the commonwealth are joined as plaintiffs, or upon such an action by any political subdivision of the commonwealth, determine whether such damage is occurring or is about to occur and may, before the final determination of the action, restrain the person causing or about to cause such damage; provided, however, that the damage caused or about to be caused by such person constitutes a violation of a statute, ordinance, by-law or regulation the major purpose of which is to prevent or minimize damage to the environment.” [Emphasis added.]
[22] MGL c. 30, §§ 61-62H, and regulations at 301 CMR § 11.00 (1998).
[23] Cummings v. Secretary of the Executive Office of Envtl. Affairs, 402 Mass. 611, 615 (1988).
[24] Ten Persons of The Commonwealth vs. Fellsway Development LLC, 460 Mass. 366 (2011).
[25] 330 CMR 22.00 et seq.
[26] 330 CMR 22.12.
[27] 330 CMR 22.12(5).
[28] 330 CMR 22.12(7).
[29] Ratified on November 7, 1972.
[30] Opinions Of The Justices To The Senate, 383 Mass. 895 (1981). “If any interest which is or might be relinquished pursuant to the proposed act [that the SJC was here opining about] is an easement, a two-thirds vote is required as to the relinquishment of that easement.” See also footnote 30 in Justice Marshall’s dissent in Alliance to Protect Nantucket Sound, Inc. v. Energy Facilities Siting Board, 457 Mass. 663 (2010).
[31] In an email to the author February 10, 2011, Irene Del Bono, Director of the EOEEA Conservation Restriction Review Program, wrote that in her personal opinion (not speaking for the agency) an Art. 97 vote is required only if the CR is held by a governmental entity. Note that the state and municipal power to approve or disapprove of a CR amendment, release or partial release, in itself, is not an easement and therefore is probably not an interest in real estate subject to Art. 97, but this distinction has not been adjudicated or addressed by an opinion of the Attorney General.
[32] Cranberry Growers Service, Inc. v. Duxbury, 613 NE 2d 105 (1993), Fn 2.
[33] Cranberry Growers Service, Inc. vs. Town Of Duxbury, citing Miller v. Commissioner of the Dep’t of Envtl. Management, 23 Mass. App. Ct. 968, 970 (1987).
[34] See below re. EOEEA Art. 97 policy. Debatable question: Is there any type of amendment, partial release or release of a CR held by non-governmental entity that would constitute a loss of physical or legal control by EOEEA that would trigger Art. 97, given that EOEEA does not hold the CR (easement)? I doubt it.
[35] Rep. A.G., Pub. Doc. No. 12, at 139, 143-144 (1973).
[36] Rep. A.G., Pub. Doc. No. 12 at 157, 159 (1976).
[37] Rep. A.G., Pub. Doc. No. 12, at 129, 132-133 (1980).
[38] Rep. A.G., Pub. Doc. No. 12, at 143, 146 (1981).
[39] The EOEEA data referred to in section 5.2.3 of this outline identifies only two CR releases by municipal bodies since 1970 for which there was a legislative vote. I have not tried to determine if there are others. Note that the EOEEA data does not cover agricultural preservation restrictions.
[40] EOEEA CR Handbook.
[41] EOEA [sic] Article 97 Land Disposition Policy, February 19, 1998, available as of March 2012 at http://www.mass.gov/eea/docs/eea/dcs/dcsarticle97.pdf.
[42] MGL c. 44B.
[43] A “permanent deed restriction” in the language of the CPA. MGL c. 44B, § 12.
[44] MGL c. 44B, §§ 9 and 10 establish the Massachusetts Community Preservation Trust Fund on the books of the Commonwealth.
[45] MGL c. 40, §15A “Whenever a board or officer having charge of land… excluding land acquired for park purposes, … for a specific purpose shall determine that such land is no longer needed for such purpose, … whether acquired by eminent domain, purchase, gift, devise or otherwise, such board or officer shall forthwith give notice of such determination to the city council of the city or the board of selectmen of the town. At any time after the receipt of such notice, the city council of the city by a two thirds vote of all its members, in the case of a city having a city manager, with the approval of said city manager, and in the case of other cities, with the approval of the mayor, or the town by a two thirds vote at a regular or special town meeting, may transfer the care, custody, management and control of such land to the same or another board or officer of the city or town for another specific municipal purpose, any provision of general or special law to the contrary notwithstanding; provided, that no such transfer shall be valid if it is in violation of any term or condition of the title of the city or town to such land….” [Emphasis added]
[46] MGL c. 40, § 3, text effective July 27, 2010: “A town may hold real estate for the public use of the inhabitants and may convey the same by a deed of its selectmen thereto duly authorized, or by a deed of a committee or agent thereto duly authorized;… and may make such orders as it may deem necessary or expedient for the disposal or use of its corporate property. All real estate or personal property of the town, not by law or by vote of the town placed in the charge of any particular board, officer or department, shall be under the control of the selectmen, except as is otherwise provided in this section or section nine.” Note that this language of section 3 of does not specify a 2/3 vote, but § 15A does require a 2/3 vote for any land, easement or right of the city or town acquired by eminent domain. MGL c. 39, § 1, gives city council or board of aldermen same powers as selectmen (with exception not relevant here).
[47] Harris v. Wayland, 392 Mass. 237 at 240-243, 466 N.E.2d 822 (1984). “If land is held for a particular municipal purpose, the provisions of G.L. c. 40, § 3, that ‘[a] town … may convey [real estate] by a deed of its selectmen … duly authorized,’ is not applicable until something else has been done: until it has been determined, in accordance with G.L. c. 40, § 15A, that the land is no longer needed by the particular board or for the particular purpose… Once the transfer for the purpose of sale has been authorized pursuant to G.L. c. 40, § 15A, the selectmen, duly authorized, may consummate the sale by a deed, pursuant to G.L. c. 40, § 3. The language of G.L. c. 40, § 15A, makes it clear that this two-step procedure applies even if the land was in the charge of the selectmen rather than another board or officer.”
[48] Note EOEEA’s Article 97 Land Disposition Policy, February 19, 1998 (see note 28 above), “[M]unicipalities that seek to dispose of any Article 97 land must: 1. obtain a unanimous vote of the municipal Conservation Commission that the Article 97 land is surplus to municipal, conservation and open space needs; 2. obtain a unanimous vote of the municipal Park Commission if the land proposed for disposition is parkland; 3. obtain a two-thirds Town Meeting or City Council vote in support of the disposition; 4. obtain two-thirds vote of the legislature in support of the disposition, as required under the state constitution; 5. comply with all requirements of the Self-Help, Urban Self-Help, Land and Water Conservation Fund, and any other applicable funding sources; and 6. comply with EOEA Article 97 Land Disposition Policy [note: the municipality must also file an Environmental Notification Form with EOEA’s MEPA office].” I have not found the statute that requires a vote by the municipal Park Commission for disposing of parkland, but that doesn’t mean there is none.
[49] MGL c. 40, § 3. Thanks to Kathleen M. O’Donnell, Esq., for pointing this out.
[50] Cranberry Growers Service, Inc. v. Duxbury, 613 NE 2d 105, 415 Mass. 354 (1993).
[51] MGL c. 40, §15: First paragraph: “If any officer of a city or town having charge of any land, easement or right taken for such city or town, otherwise than by purchase, notifies the city council or the selectmen that, in his opinion, such land, easement or right, or part thereof, is no longer required for public purposes, and if thereafter the city council or the inhabitants of the town by a two thirds vote authorize the conveyance of such land, or of part thereof, or the abandonment of such easement or right, or part thereof, and specify the minimum amount to be paid for such conveyance or abandonment, the mayor or the selectmen may, for such amount or a larger amount, and upon such other terms as the mayor or selectmen shall consider proper, convey said land, or part thereof, by deed, or declare said easement or right, or part thereof, to be abandoned. Such declaration, being recorded in the registry of deeds for the district where the land is situated, shall extinguish the easement or right, or part thereof.”
[52] Austin Wakeman Scott, William Franklin Fratcher, and Mark L. Ascher, Scott and Ascher on Trusts (Scott), § 2.1.1, (5th ed., 2006).
[53] Ibid., § 37.1.
[54] “Thus, the holder of a conservation easement should not be permitted to release, extinguish, or otherwise terminate the easement (which would clearly be contrary to its stated purpose), or amend the easement in manners contrary to its stated purpose (such as to permit the subdivision and development of the land), without receiving judicial approval in a cy pres proceeding. The holder could, however, agree to amendments that are consistent with the purpose of the easement pursuant to the holder’s express or implied power to agree to such amendments or, in the absence of such powers, with judicial approval obtained in a more flexible administrative (or equitable) deviation proceeding.” Nancy A. McLaughlin & W. William Weeks, In Defense of Conservation Easements: A Response to The End of Perpetuity, 9 Wyo. L. Rev. 1 (2009) (“Defense I”). Massachusetts cases addressing administrative deviation include Rogers v. Attorney General, 347 Mass. 126 (1964), Trustees of Dartmouth College v. Quincy, 357 Mass. 521 (1970), and Millekin v. Littleton, 361 Mass. 576 (1972).
[55] See, e.g., Gould v. Greylock Reservation Commission, 215 NE 2d 114, 350 Mass. 410, 419 (1966).
[56] Scott, § 39.5.6. Courts sometime refer to a “public charitable trust”. See, e.g., Dunphy v. Commonwealth. It is sometimes (though not in Dunphy) unclear whether this phrase is used to mean a charitable trust in which the trustee is a governmental entity, or to mean land that has become subject to the public trust doctrine but not a charitable trust. The substantive distinction between a charitable use and a public purpose is not clear to me.
[57] Heather J. Wilson, The Public Trust Doctrine In Massachusetts Land Law, 11 Environmental Affairs Law Review 839 (1984), reviewing Dunphy v. Commonwealth, 331 N.E.2d 883, 368 Mass. 376, 383 (1975). See also Opinion of the Justices to the Senate, 369 Mass. 979, 338 N.E.2d 806 (1975).
[58] Their work is not focused on Massachusetts. C. Timothy Lindstrom, Hicks V. Dowd: The End of Perpetuity? 8 Wyo. L. Rev 25 (2008) (“Perpetuity I”); Defense I, ibid.; C. Timothy Lindstrom, Conservation Easements, Common Sense and the Charitable Trust Doctrine, 9 Wyo. L. Rev 397 (2009) (“Perpetuity II”); Nancy A. McLaughlin and W. William Weeks, Hicks v. Dowd, Conservation Easements, and the Charitable Trust Doctrine: Setting the Record Straight (2010). Wyoming Law Review 73 (2010) (“Defense II”).
[59] “If the Grantor’s intent was that the land be used for a particular purpose in perpetuity, ‘it almost necessarily follows that he intended to establish a trust to effect this purpose.’” Salem v. Attorney General, 344 Mass. 626, 630 (1962), involving land devised in 1895 by will to the city “to be used forever as Public Grounds for the benefit and enjoyment of the citizens of said City”. A 1957 legislative act authorized the building of a public school on the land. The conveyance in question and the Court’s decision were both made before the CR statute MGL c.184, § 32 was in effect. “An outright devise or donation to a . . . charitable institution, expressly or impliedly to be used for its general purposes, is charitable but does not create a trust . . . . A disposition to such an institution for a specific purpose, however, such as to support medical research, perhaps on a particular disease, or to establish a scholarship fund in a certain field of study, creates a charitable trust of which the institution is the trustee…” Restatement (Third) of Trusts § 28 comment a. (2003). See also Scott, 39.5.6.
[60] “No magical incantation, e.g., ‘in trust,’ is required to create a trust[60]… To create a charitable trust limited to specific charitable purposes, however, requires a more definite expression of intention in the way of granting language or attendant circumstances than here appears” Hillman v. Roman Catholic Bishop of Fall River, 24 Mass.App.Ct. 241, 243, 508 N.E.2d 118 (1987). The deed granted land “for the use of [one parish in an archdiocese] for educational, religious or recreational purposes” and the Court allowed the archdiocese to sell the land.
[61] “Whether a trust or obligation is imposed is ‘a matter of interpretation of the particular instrument and determination of the particular donors’ intent[,]’ and ‘is to be ascertained from a study of the instrument[s] as a whole in the light of the circumstances attending … [their] execution. Search should be made for a general plan … designed to express a consistent and harmonious purpose.’” Jewett v. Brown, 319 Mass. 243, 248 (1946), quoted in Nickols v. Commissioners of Middlesex County, at 19. See also Opinion of the Justices to the Senate, 369 Mass. 979, 338 N.E.2d 806 (1975). “Property conveyed to a governmental body, a corporation, or trustees for particular public purposes may be subject to an enforceable general public obligation or trust to use the property for those purposes. [cases cited] … [but] Other cases have held that, in particular circumstances, no trust, obligation, restriction, or condition was created, but that the grantor’s intention (or the result of the words he used) was merely to state a motive or precatory direction…. it is apparent that whether a gift, subject to a ‘condition’ or stating a ‘purpose,’ imposes a trust or obligation is a matter of interpretation of the particular instrument and determination of the particular donors’ intent.” Nickols v. Commissioners of Middlesex County, 166 NE 2d 911, 341 Mass. 13 (1960). A “public charitable trust” was created by an 1893 deeds which stated the land was to be used “forever for park purposes,” even with “no precatory language; no mere statement of a use only; no condition or limitation on the use; nor any right of reversion”. “[C]onveyances of land for parks, where the grantors specified the land be used ‘forever’ or ‘in perpetuity,’ without other limitation, have been found to establish a public charitable trust.” Cohen v. City of Lynn, 598 N.E.2d 682, 31 Mass. App. Ct. 271 (1992). Where a 1968 “deed stated that the land and appurtenant rights were granted, released and dedicated to the Town of Mattapoisett in trust” the gift of land to a town by deed was found to create a public trust. Tinkham v. Town of Mattapoisett, 22 Mass. L. Rptr. 635 (2007), affirmed 76 Mass. App. Ct. 1104 (2009).
[62] “We have found no authority, nor is any cited to us, to the effect that the receipt of substantial consideration prevents a grantor from conveying property to a municipality in such manner as to establish a public charitable trust. Generally, the creation of a trust may be supported by consideration in the sense that the beneficiary confers a benefit upon the settlor in order to obtain from him the creation of the trust.” Cohen v Lynn, 33 Mass. App. Ct. at 276. But see Perpetuity I, at 61: “Of course in purchased easement situations, the application of the charitable trust doctrine becomes even more complicated because the easement was not created with exclusively charitable intentions so the existence of the ‘general charitable intent’ necessary to create a charitable trust in a conservation easement is even more dubious.”
[63] E.g., the DCR Model CR 2008, op. cit., or the sample CR in EOEEA CR Handbook, p. 13, and samples published by the Massachusetts Community Preservation Coalition as of March 2012 at http://www.communitypreservation.org/content/deed-restrictions.
[64] Scott, § 37.4. Note also that in Dunphy and similar cases, the courts’ reasoning depends significantly on the idea that to create a restriction enforceable in perpetuity, the only means available to the grantor was the creation of a charitable trust. The enactment of c. 184, §§ 31-33 changed that, and therefore opened the possibility that by submitting the grant to that statute, the intent was to create something other than a charitable trust.
[65] Wolfe v. Gormally (supra, note 18).
[66] Carpenter v. Commissioner of Internal Revenue, US Tax Court, T.C. Memo. 2012-1.
[67] Email to the author February 15, 2012. Prof. McLaughlin also wrote that his outline’s focus on whether a conservation easement could be characterized as a charitable trust “is too narrow because in some jurisdictions charitable gifts made for specific purposes are not referred to as technical trusts (for historical reasons relating to the prerogative cy pres power of the King in England), and instead, are treated as restricted gifts (see Carpenter v. Commissioner of Internal Revenue [ibid.]). See also, e.g., Carl J. Herzog Found. v. University of Bridgeport, 699 A.2d 995, 998 n. 2 (Conn. App. Ct. 1997) (explaining that the law governing the enforcement of charitable gifts is derived from the law of charitable trusts and “‘The theory underlying the power of the attorney general to enforce gifts for a stated purpose is that a donor who attaches conditions to his gift has a right to have his intention enforced’”).
[68] E-mail from Andrew Goldberg, Assistant Attorney General in the Massachusetts Attorney General’s Environmental Protection Division, to Nancy McLaughlin (Mar. 22, 2006) (on file with author).” Nancy A. McLaughlin, Amending Perpetual Conservation Easements: A Case Study of the Myrtle Grove Controversy, 40 U of Richmond L Rev 1031 (2006). The statutory referred to is presumably MGL c. 12, § 11D.
[69] Pursuant to MGL c. 12, § 8. That statute reads, “The attorney general shall enforce the due application of funds given or appropriated to public charities within the commonwealth and prevent breaches of trust in the administration thereof.” See, e.g., Ames v. Attorney General, 124 NE 2d 511, 332 Mass. 246 (1955). But member of organization entitled to vote on organization’s action as trustee of charitable trust may have standing re. claim s/he was unlawfully denied membership in the corporation by organization’s action. Weaver v. Wood, 425 Mass. 270, 680 N.E.2d 918 (1997).
[70] MGL c. 180A, § 1, the Uniform Prudent Management of Institutional Funds Act, governing certain restricted assets of charitable organizations.
[71] MGL c. 30, §§ 61-62H, and regulations at 301 CMR 11.00 et seq.
[72] 301CMR 11.01(2)(b)(2).
[73] An “Agency” is “Any agency, department, board, commission, or authority of the Commonwealth.” A “Project” is any “work or activity that is undertaken by: (a) an Agency; or (b) a Person and requires a Permit or involves Financial Assistance or a Land Transfer”. A “Permit” is “Any permit, license, certificate, variance, approval, or other entitlement for use, granted by an Agency for or by reason of a Project.” [Emphasis added.] “Financial Assistance” is “Any direct or indirect financial aid to any Person provided by any Agency including, but not limited to, mortgage assistance, special taxing arrangements, grants, issuance of bonds, loans, loan guarantees, debt or equity assistance, and the allocation of Commonwealth or Federal funds.” A “Land Transfer” is “The execution and delivery by an Agency of any deed, lease, license or other document that transfers real property or an interest in real property” but not including “the execution and delivery of a deed, lease or license to continue a preexisting lawful use on a Project site, or amendments or extensions thereof”. 301CMR 11.02(2).
[74] 301 CMR 11.03(1)(b)(5).
[75] 301 CMR 11.03(1)(b)(3).
[76] 301 CMR 11.03(2)(b)(1).
[77] 301 CMR 11.04(1).
[78] Internal Revenue Code of 1986, as amended, Section 170(h) (26 U.S.C. § 170(h)) (the “Code”).
[79] Treasury Regulations 26 CFR §1.170A–14 (the “Regs”).
[80] IRS online publication “Conservation Easement Audit Techniques Guide”, revision date Jan. 3, 2012, ch. 3. http://www.irs.gov/businesses/small/article/0,,id=249135,00.html#_Toc137.
[81] Carpenter v. Commissioner of Internal Revenue, supra, at 18.
[82] Code 170(h)(1)(C): “the term “qualified conservation contribution” means a contribution … exclusively for conservation purposes.” Regs 1.170A-14(a): “A qualified conservation contribution is the contribution of a qualified real property interest to a qualified organization exclusively for conservation purposes.” Regs 1.170A-14(e): “To meet the requirements of this section, a donation must be exclusively for conservation purposes.” But note that behind these definitions there are many other Code and Regulations requirements. A change of purpose from a purpose that is acceptable under the Code to another purpose that would also have been acceptable as a new qualified conservation contribution may also run afoul of the IRS.
[83] “Private benefit. The doctrine of private benefit generally prohibits a tax-exempt organization from using its assets to benefit any individual or entity impermissibly, not just an insider. broader than (and subsumes) the private inurement prohibition. However, unlike the absolute prohibition against private inurement, incidental private benefit is permissible. Private inurement. The doctrine of private inurement generally prohibits a tax-exempt organization from using its assets to benefit any individual or entity that has a close relationship to the organization, such as a director, officer, key employee, major financial contributor, or other ‘insider.’” Amending Conservation Easements: Evolving Practices and Legal Principles, Land Trust Alliance, August 2007. “The Service intends to assess excise taxes under §4958 against any disqualified person who receives an excess benefit from a conservation easement transaction, and against any organization manager who knowingly participates in the transaction. In appropriate cases, the Service may challenge the tax-exempt status of the organization, based on the organization’s operation for a substantial nonexempt purpose or impermissible private benefit.” Notice 2004-41, I.R.B. 2004-28, June 30, 2004.
[84] Code 170(h)(3). Regs 1.170A-14(c) “Qualified organization—(1) Eligible donee. To be considered an eligible donee under this section, an organization must … have a commitment to protect the conservation purposes of the donation…. A conservation group organized or operated primarily or substantially for one of the conservation purposes specified in section 170(h)(4)(A) will be considered to have the commitment required by the preceding sentence.” The organization must also meet other tax status tests.
[85] IRS 2011 Form 990, Schedule D, Part II, question 3.
[86] IRS 2011 Instructions for Schedule D (Form 990).
[87] See text at footnote 10.
[88] c. 63, § 38AA(a): “‘Qualified donation’, a donation, or the donated portion of a bargain sale, made in perpetuity of a fee interest in real property or a less-than-fee interest in real property, including a conservation restriction, agricultural preservation restriction or watershed preservation restriction, pursuant to chapter 184, provided that such less-than-fee interest meets the requirements of qualified conservation contributions under section 170(h) of the Internal Revenue Code of 1986.”
[89] For a related case, although not about an amendment, see Weston Forest & Trail Association v. Fishman, 66 Mass. App. Ct. 654 (2006). CR holder knew of but did not contest construction in violation of the CR until after construction was complete. The Court wrote, “[e]stoppel is not applied to government acts where to do so would frustrate a policy intended to protect the public interest… for purposes of enforcing a conservation restriction that is in the public interest, there is no difference between a governmental body and a private entity. Accordingly, estoppel does not apply in this case”.