Subcommittee backs bill seeking compensation when conservation easements are partially taken

The Senate Courts of Justice Civil Law Subcommittee debated Senate Bill 1435, a measure aimed at preventing what the sponsor described as the "targeting" of conservation easements through proportional takings for utilities and other projects.

Senator Perry, the bill’s patron, said the bill would require that if land preserved by a conservation easement is taken (in whole or in part), compensation should reflect the lost value created by preserving the land. "If you're gonna come take them, just understand that the benefits that came from them, the reduction in tax value, you're going to have to pay that back," Perry said. He said stakeholders including the Piedmont Environmental Council (PEC) had worked on edits, and the substitute before the committee clarifies that compensation returned to the Commonwealth or locality must be used in a manner consistent with open-space goals.

Alexander McCauley of the Piedmont Environmental Council testified in favor and said the organization agreed with the bill's intent to address proportional takings. Several utility-company representatives testified in opposition or with concerns. Rob Shin, representing Washington Gas and EQT, said the industry’s primary concern is the proportional-taking valuation problem: "...if you have like a public service company that's trying to fulfill a public service...they'll have already compensated the landowner for the taking. And this there's an added penalty or payment to the state based on the overall the value of that proportional taking," Shin said. He also warned that language referencing value conferred by listing on the Virginia Landmarks or National Register could be ambiguous.

Petrina Jones Reblewski of Columbia Gas of Virginia told the committee the company's costs would be passed through to customers and said the company opposed the bill on that ground. Dylan Bishop of Wilcox Savage Consulting, representing the Virginia Oil and Gas Association, associated with the industry concerns and urged further work. Attorney Kerry Hutcherson, who represents both grantors and grantees of conservation easements, explained that federal tax law and deed language already require compensation to grantees in some termination scenarios; she said Senator Perry’s substitute would direct compensation to the Commonwealth or localities rather than directly to private grantees, and the substitute clarifies the relationship to existing compensation rules.

Committee members pressed the sponsor on how proportional takings would be calculated when only a strip or portion of an easement is taken; Perry said he was working on language and hoped to resolve the partial-taking valuation before the bill reached the full committee. The transcript records a subcommittee vote to report the substitute by a 5-to-3 margin.