TO: City Manager
FROM: Josh Jones, Legal Consultant
DATE: Tuesday, May 18, 2011
RE: Conservation Easements
Dear City Manager,
You asked whether the provisions of T.C.A. Title 7, Chapter 51, Part 9 apply to the execution of one or more conservation easements on certain city-owned property.
In my opinion, no, the aforementioned provisions do not limit the authority of your town to execute conservation easements on the properties in question.
Cumulatively, the provisions of T.C.A. Title 7, Chapter 51, Part 9 authorize local governments to enter into long-term agreements for contracts, leases and lease-purchases of capital improvement property. These provisions limit such agreements to a maximum term of forty (40) years.
Capital improvement property is defined for purposes of these provisions in T.C.A. § 7-51-901(a), which reads:
“Capital improvement property” means any real or tangible property needed for a governmental purpose and having a useful life of one (1) year or more, and any real or tangible personal property with respect to which capital outlay notes can be legally authorized and issued by a municipality; (Emphasis mine).
So to be considered capital improvement property city-owned real property must meet either half of the definition. It is my understanding that the properties in question are all park land, green space or wilderness. The first half of the definition requires the property be needed for a governmental purpose. The statute does not define governmental purpose; however, the Attorney General has opined that property used as a polling place is for a governmental purpose, while an industrial park is not. Tenn. Op. Atty. Gen. No. 91-50; Tenn. Op. Atty. Gen. No. 86-196. The land in question seems more analogous to an industrial park and thus not a governmental purpose under the statute. The second half of the definition requires the property to be that which capital outlay notes can legally be authorized and issued for. Capital outlay notes are discussed at T.C.A. § 9-21-601, which reads:
The governing body of a local government acting by resolution is hereby authorized to issue and sell interest-bearing capital outlay notes for all purposes for which bonds can be legally authorized and issued by a local government for public works projects as defined in this chapter and for property valuation, tax assessment and tax equalization programs. The sale of all interest-bearing capital outlay notes shall first be approved by the comptroller of the treasury or the comptroller's designee.
Again parks and recreational areas seem outside the scope of the definition. I do not believe the properties in question to be capital improvement property.
Even assuming however that these properties were considered capital improvement property the limitations imposed by this part would not apply as the authority to execute conservation easements is explicitly granted to local governments in the Conservation Easement Act of 1981. T.C.A. §§ 66-9-301, et seq. And where a local government is acting pursuant to another law the limitations of T.C.A. Title 7, Chapter 51, Part 9 do not affect the other law’s powers or authorizations. T.C.A. § 7-51-905.
I see no statutory barrier to the execution of conservation easements on recreational property owned by your town. Should you have any questions or wish to further discuss this matter feel free to contact me. Best of luck in all of your endeavors.