Land Use & Planning - Farmland Preservation

Agricultural Preservation Districts
A district is a voluntary agreement to use land only for agricultural purposes for at least a ten year period. Land must yield a minimum farm income, satisfy a scoring system standard, and undergo a review and approval process. Almost any size farm anywhere in the state can qualify. There is no payment to the landowner for creating the district. However, there are several benefits to landowners in an agricultural district. The unimproved land in the district is exempt from real estate transfer, county, and school taxes. There are significant protections against nuisance suits for land in the district. Landowners are permitted limited residential uses. Permitted agricultural used include but are not limited to: crop production, herd animal and poultry operations, horse operations, forest production, non-commercial hunting, trapping and fishing, and agricultural eco-tourism operations, as well as farm markets and roadside stands.

Agricultural Conservation Easements

In order to permanently preserve farmland, the Foundation purchases development rights from landowners and imposes a permanent agricultural conservation easement on the land. Land must first be in an Agricultural Preservation District before the owner can apply to sell the development rights. The sale of development rights is a three-step process. Tax Payer Benefits   Congress has entacted laws that may benefit owners of perserved farmland. an easement either sold or donated to the Foundation may qualify the owner for a deduction for income, gift or estate tax purposes. Rules governing taxes are complex; owners should consult competent tax advisors on these matters. Selecting Farms   All farms applying for purchase of development rights will be appraised.

Appraising Farms

In order to set the market value of the development rights for each farm, the Foundation pays for an appraisal, with two parts. the first is the full, fair market value fo the farmland. This standard approach is based on real estate sales data for caparable farms in the area. The second part sets the "agriculture only" value of the farm based on the agricultural rent values and current rates of return on investments. The difference between fair market value and agriculture only value is the appraised value of the development rights.

Final Price for Farms
The Foundation delivers final appraisals to farmland owners. An owner can choose to have a second appraisal completed at his own expense. Once there is an agreement on the appraised value, the owner then makes an offer to the Foundation. Using the Funds available, the Foundation selects from those offers based on the percentage discount by the owner below the appraised development rights value. In effect, owners compete against each other to determine which farms are preserved. This approach encourages the permanent perservation of more farmland than would have been possible otherwise. Upon selection, the Foundation pays for a complete survey of the farms for permanent preservation. Owners pay no taxes, fees or charges at settlement. Owners can accept lump sum payment, take payment over time, or use the proceeds to purchase an interest in other property.