f F A R MANAGEMENT AGRICULTURAL CONSERVATION EASEMENTS Alan W. Strock Farm Management Agent (Third in a series on farmland preservation.) The 1988 Amendment to the Pennsylvania Agricultural Securi ty Area Law (Act 43 of 1981) authorized a statewide program to purchase agricultural conservation easements from landowners who had joined an Agricultural Securi ty Area (ASA). The purchase of an agricultural conservation easement (ACE) pro vides an option to farmers who want to continue farming, but whose farm’s property values have risen because of development pressure. Chosen applicants for the ACE program will be paid the difference between fair market value and “farmland value.” The land must then be maintained in farming. The ACE program aims to pre- serve thousands of acres of prime Pennsylvania farmland, while making it easier to transfer the property to the next generation. What is an agricultural conservation easement? Property ownership is often compared to a “bundle of legal rights” with each “stick” in the bundle representing a separate, divisible right Included in this “bundle” are the rights to sell, will, lease, mortgage, and cultivate; along with the sur face, mineral, air, and water rights; and easements of access and deve lopment rights. As divisible rights, they can be disposed of separately. In Pennsylvania it is common for landowners to separate and sell cool and other mineral rights. Similarly, ACE’s are purchased by the county and/or the state who then have the right to prevent deve lopment or improvement of land for any purpose, except agricultur al production. Selling one’s ACE would not prevent the construction of new buildings used for agricultural pro auction, including structures for housing seasonal or full-time workers. ’ \ ACE Program administration Under provisions of the Agri cultural Security Area Law, many county governments have already established a county program to purchase, in conjunction with the state, ACEs from farmers in AS As. The program’s goal is the long term preservation of farmland, so easements are purchased either for 25 years or forever. Participating counties must set up county Agricultural Land Pre servation Boards which consist of 5,7, or 9 members. Boards must have representation from agricul ture, development, local govern ment, and citizens. One less than the majority of the board shall be resident farmers of the county. The county’s governing body, usually the county commissioners, will appoint the board, whose role is to establish local priorities for buying easements through a rank ing system fra objectively evaluat ing farms, select competent appraiser(s), and administer purchases. The 17-member State Agricul tural Land Preservation Board has been created to oversee the ACE Program. This board has adopted guidelines fra administering the statewide effort and standards for certifying county boards. Annual ly, the board will determine the funding level, distribute funds to the counties, and monitor the prog ram by approving state-funded casement purchases. Who is eligible? The land must be located in an ASA to be eligible to sell the ACE. Additional requirements for purchase include consideration of quality and quantity of the farm land, stewardship of the land, and likelihood of conversion to non farm use. To meet the minimum state guideline for easement purchase, the farms must be capable of generating gross receipts of $25,000 annually. At least half of the tract must be either harvested cropland, pasture, or grazing land, and it must contain at least SO percent of soils in the Soil Conservation Service identi fied capability classes of I-IV. Applicants must also have demonstrated conservation and best management practices. County rating system Each county must develop a detailed list of rating factors to score and select farms from which easementswill be purchased. Location and site factors, and agricultural productivity factors, are the two classifications of the ranking system. Location and site factors in the ranking system may include the extent of non agricultural development in the area, proximity to planned deve lopment, proximity to farmland protected by perpetual easements or restrictive covenants, buffering of parks, environmentally sensi tive areas, historical structures or districts, soil and water conserva tion practices, size of the farm par cel, proximity to sewer service, and cost (or percent donation of appraised easement value). Agricultural productivity fac tors relate to the productivity of the soil types and crops grown on the farm. m MORTON BUILDINGS, INC. 'S®* Excellence Since 1903 3368 York Rd. P.O. Box 126, P.O. Box 361 Gettysburg, PA 17325 Phltllpaburg, NJ 08865 Centra Hall, PA 16826 717/624-3331 201/454-7900 814/364-9500 Call or writ* today lor mot* Information In selecting farm* for easement purchase, county boards may decide to consider easement costs (Bucks County has placed a SIO,OOQ/acre limit on easement purchases), and whether to target purchases in keeping with the county comprehensive land use map. Some counties may elect to target funds to areas of most intense development pressure while others may place higher priority on locations with less development pressure where large farm acreage blocks can be protected. Determining the value of the easement The difference between the fair market value and the “farmland use’’ value is the ACE value, as in the example below. Example; $5,000 Market Value/ Acre • $1,400 “Eased Value” or “Farmland Value’Vacre • $3,600 Agriculture Conser vation Easement Value/acre Fair market value as defined by the act is the price as of an evalua tion date for the highest and best use of a property. The “farmland use” value, also called the “agri cultural value” in the act, must be determined by appraisal. A seller who disagrees with the county board’s approved apprai sals may retain another licensed appraiser. Any differences in the two valuations arc resolved by a simple formula contained in the act. Landowners who sell peipetual easements receive full conserva tion easement value. Easements for 25 years pay only 1/1 Olh of the full easement value, or in the example above, $360/acre. (Next week: The complex issues of “agricultural value") CONTACT: 1-800-447-7436 r » IHinok only, call 1-800-6686
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