Growing pains.

• Author: Morandi, Larry
• Position: State economic growth in relation to state legislation

As states grapple with ways to manage growth, incentives are replacing regulation at the top of legislative agendas.

The Colorado Cattlemen's Association would not find a place on most people's top 10 list of environmental groups. So when Jay Fetcher, a rancher and president of the association's Routt County chapter, received the American Land Conservation Award at the National Land Trust Rally last year, more than a few eyebrows were raised.

Fetcher is co-founder and board president of the Colorado Cattlemen's Agricultural Land Trust, a nonprofit organization set up to ensure the preservation of productive agricultural land. Not open space per se, but sweat-equity ranchland. Ranchers in Colorado don't put much stock in environmental groups, but they do trust the cattlemen's association. They're card-carrying members. If one of them thought a land trust was OK, the rest would listen.

Here's how it works. If a rancher donates a conservation easement to the land trust, his income taxes and estate taxes may be reduced significantly. A conservation easement cuts the market value of land by restricting its future development. Federal law allows the market value of an easement to be deducted from a person's income tax if it is donated to a qualifying tax-exempt organization (such as the land trust), which monitors the landowner's compliance with the terms of the easement. Reduced market value also lowers the estate value when land is passed on to a rancher's heirs. A smaller inheritance tax bill may help the family keep the land in agriculture without having to sell off a large portion to cover taxes.

Lynne Sherrod, a Steamboat Springs rancher who became the land trust's executive director last year, acknowledges that "there are a lot of people in Colorado who couldn't care less about preserving agricultural land." Open space, yes, farm and ranchland, no. So a big part of her job is educating people about the open space values inherent in agriculture.

Land in the trust does not come with public access. That could scare many ranchers concerned with losing their property rights from making donations. "But you don't have to put your hands and feet on the land," Sherrod argues, "to realize its value." She points to open space assets such as protecting wildlife habitat and preserving sightlines of some of the country's most spectacular scenery as reasons to support her group's efforts.

Formed in 1995, the land trust had received 1,500 acres in conservation easements through August 1997. By the end of the year, just four months later, it had more than 20,000 acres preserved in perpetuity as productive agricultural land. It expected to close on another 3,500 acres before this summer's end. Sherrod hopes to find a way to purchase the development rights to additional land, which restricts its use in the same way as a conservation easement, but provides the rancher with immediate cash. She points out that "the average landowner may need more than a tax break" to make the tough decision to donate land instead of selling it.

SHAPING SPRAWL

The cattlemen's land trust activities illustrate a trend toward incentives to manage sprawl, the type of spillover development that chews up rural land in increments. Richard Moe, president of the National Trust for Historic Preservation, has defined...