Manchester Water Works owns property in the Town of Auburn used to supply water to residents of the City of Manchester. The Water Works is required by RSA 72:11 to pay an annual charge to the Town of Auburn in lieu of taxes. The amount of the charge is based upon the assessed full and true value of the property. The Water Works granted a conservation easement to the Society for the Protection of New Hampshire Forests that restricts the ability of the Water Works to develop the property. The restriction was not perpetual in nature and could be terminated by the Water Works on 30 years’ notice. The Water Works sought an abatement of the amount it was required to pay the Town of Auburn, arguing that this “conservation restriction” devalued the land under RSA 72:11. RSA 477:45 defines conservation restrictions generally, but RSA Chapter 79-B is the chapter that provides for property tax assessment of conservation restriction land. RSA 79-B:2, IV defines “conservation restriction” as “a permanent restriction of open space land by deed granted in perpetuity and, further, as defined by RSA 477:45, I, to a federal, state, county, local or other government body, or to a charitable, educational, or other nonprofit corporation established for the purposes of natural resource conservation….”
Auburn rejected the petition for abatement and, upon trial in the superior court, that rejection was upheld. The trial court reasoned that because the restriction was self-imposed, and impermanent in nature, it did not comply with the requirements of RSA Chapter 79-B and thus need not be considered in reaching an assessment of the full and true value of the property.
On appeal, the Supreme Court agreed. It found that while the easement was a conservation restriction under RSA 477:45 for purposes of conveyance and enforcement, it did not meet the definition of a “conservation restriction” found at RSA 79-B:2, IV, and thus did not qualify for favorable local tax treatment. Therefore, local assessors should take care when examining documents which purport to create conservation restrictions. Unless the interests conveyed are in strict compliance with RSA Chapter 79-B, they may have no impact on value for property tax assessment purposes.