Transcript killbuckwatershed.org

Walking the Land with Your Uncle
Public & Private Initiatives for Land Preservation
Presented by:
The Killbuck Watershed Land Trust
Agenda
• Why Preserve Farm Land & Open Space
• Forces Operating Against Land Preservation
• Early Government Conservation Efforts Toward Preservation
• Early Private Initiatives
• Recent Private Initiatives
• Public & Private Partnerships
• Preservation of Ohio’s Farmland
• Ohio's Current Programs for Farmland Preservation
• Preserving Land is NOT a Complete Solution
• Definitions / Examples / Questions
Why Preserve Farm Land & Open Space?
• There is a finite amount of land in the world
• Good stewardship = Sound Public Policy
– Economic Importance
• In Ohio, farming is a major part of the economy
– National Security
• Nations must be able to sustain their own food supply
– Watershed Protection
• Water resources are critical
– Recreation
– Cultural Preservation
Forces Against Land Preservation
• Development / Population Growth
• Disconnect with Farms – Migration to Cities
• Farmland is the Farmer’s Piggy Bank
Early Government Conservation Efforts
• Preserved scenic views / unique habitats
– Yosemite Park
• 1864 Lincoln set aside Yosemite Valley and
Mariposa Giant Sequoia Grove
• 1890 Congress, at urging of John Muir and Robert
Underwood Johnson, set aside Yosemite High
Country
Early Private Initiatives
• 1895 – Vanderbilt family constructed Biltmore
residence near Asheville, NC; acquired 40,000 acres
around mansion; eventually donated land for
National Forest
• 1995 – Rockefeller/Marsh/Billings property (near
Woodstock, VT) was donated as National Park.
Prior to the donation, the owners created a ‘scenic
zone” around the park to protect the scenic vistas
with the use of conservation easements
Recent Private Initiatives
• Ducks Unlimited has preserved 73,175 acres of
wetlands in Ohio. DU operates across North
America to protect wetlands, flyways, and breeding
grounds for waterfowl. (Other areas include the
Great Lakes Region, East Coast and the Mississippi
ecosystem.)
• Others, e.g. The Nature Conservancy, Isaac Walton
League and Pheasants Forever
Public / Private Partnerships
• Various Forms
– Private citizens lobbying governments to set aside
valuable land
– Government incentives through tax deductions
– Private purchases of designated lands
These efforts are driven (typically) by government
grants and/or private income tax deductions
Public / Private Partnerships
• Local Examples
– Wooster Memorial Park began with a private gift to the City
Some adjoining lands were purchased by the City and a recent
acquisition of additional acreage was funded largely through
Clean Ohio Funds.
– The recent acquisition of Noble Park resulted from a Clean
Ohio Fund grant and a large donation from the Noble
Foundation
– The Killbuck Watershed Land Trust owns property in Holmes
County which it acquired through Clean Ohio Fund grant
Preservation of Ohio’s Farm Land
• Original land preservation concepts tended to preserve scenic
beauty or unique habitats or ecosystems
• With huge losses in farmland across the country, caused by
development, preservation initiatives began to include farmland
within the category of lands with “unique or special characteristics”
• IRS tax code recognized that farmland could be included within
federal incentives if preservation of farmland was recognized by the
states under a “clearly delineated conservation policy”
• 1986 Governor Celeste issued Exec Order 86-33 setting forth Ohio’s
policy of farmland preservation. Ohio continues to strengthen
programs
Ohio’s Farmland Preservation Programs
• Ohio has graduated levels of legislation (Handout Chart)
– Current Agricultural Use Valuation (CAUV)
If land has received tax reductions by its CAUV status and is then
converted to nonfarm use, the state will recoup 3 years of past taxes
at the time of conversion
– Agriculture Districts (ORC 929.01-.05)
A designation available to any CAUV landowner to protect him from
nuisance suits arising out of agriculture activities (noise, smells, slow
moving equipment)
– Agriculture Security Areas (ORC 931.01-.99)
Statutes allow farmers holding more than 500 contiguous acres to band
together and, with the permission of the county and their township,
to prevent extension of water, sewer & other development incentives
to keep the land in farming.
Ohio’s Farmland Preservation Programs
– Zoning
• Most of Ohio’s best agricultural/rural counties are lacking zoning
– Conservation Easements
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What is a conservation easement?
How is it valued?
What tax incentives are available?
Who uses conservation easements?
– AEPP Program (state purchases)
• 167 farms to date – 35,500 acres
– Donations to land trusts or governments:
• 4,000+ acres to date in Wayne, Holmes and Ashland
Preserving Land is not a Complete Solution
• Farming represents one of the largest industries in Ohio
• It makes a small demand on services (police, fire, schools)
• Successful farming depends upon having a solid farm
infrastructure
• Wayne County has added a person to it’s economic
development team to help preserve the infrastructure in
order to insure that our farmers will stay here and remain
profitable
Definitions
• Fee Interest: the entire interest in a parcel of real property.
• Easement: A partial interest in real estate represented by a bundle of
rights conveyed by the Fee owner to someone else (usually a government
or tax exempt entity). Easements may typically be acquired by purchase,
eminent domain or by gift.
• Utility Easement: conveys rights to a government or public utility for the
purpose of constructing and maintaining utility lines and services across
privately owned property.
• Conservation Easement: Conveys rights, usually over the entire
property, which are intended to prevent certain uses. The grantee
(government or land trust) is empowered by the easement to enforce the
property restrictions to prevent uses prohibited by the easement.
• Easements have value – usually represented by the rights granted
Example of Easement Valuation
• 100 acre farm adjacent to a city which represents prime development
land
• The appraised value of the farm for development is: $6,000 per acre:
Total $600.000
• The appraised value of the farm as restricted for farm use only is:
$4,000 per acre: Total $200.000
• The value of the easement is $200.000. If the farmer donates the
easement to a tax exempt entity, she can deduct the value of the
easement up to 100% of her farm income over a period of 16 years.
Assuming she has qualifying farm income of $40,000 per year, she
could avoid paying federal taxes for 5 years. At her death, her estate
will receive an additional federal estate tax exclusion & her property,
for estate tax purposes, will be valued at farm land values.
Example of Conservation Easement Deduction
• 100 acre farm adjacent to a city which represents prime
development land
• The appraised value of the farm for development is:
$6,000 per acre: Total $600.000
• The appraised value of the farm as restricted for farm use
only is: $4,000 per acre: Total $200.000
• The Farmer’s federal income is $40,000 per year
Example of Conservation Easement Deduction
A. If more than 50% of the income is from farm activity, the farmer can
complete the deduction of the value of the easement by using 100%
of the farm income over a period of 5 years.
B. If less than 50% of the income is from farm activity, the farmer can
deduct the value of the easement at the rate of 50% of the farmer’s
annual income and completely use the deduction over a period of 10
years.
C. At death, the farmer’s estate gets 2 benefits: 1) the land is valued at
agricultural value for tax purposes; and 2) to the extent federal
estate tax is due, the farmer is entitled to exclude 40% of the value
of the land up to a max of $500,000.
The income tax deduction can be carried forward for a maximum of 16 years
The income tax deduction is only available against federal income tax
Re-Cap
• Why Preserve Farm Land & Open Space
• Forces Operating Against Land Preservation
• Early Government Conservation Efforts Toward Preservation
• Early Private Initiatives
• Recent Private Initiatives
• Public & Private Partnerships
• Preservation of Ohio’s Farmland
• Ohio's Current Programs for Farmland Preservation
• Preserving Land is NOT a Complete Solution
• Definitions / Examples / Questions
Questions?