Background

• Purpose
• Benefits
• Permitted Uses
• Eligibility
• Duration of Conservation Easement
• Valuation of Conservation Easement

Purpose

Nationwide , America is losing farmland. According to the American Farmland Trust, the United States is losing 2.2 million acres of rural lands to urban sprawl every year. This means that, across the United States , over 4 acres of rural lands are consumed every single second.

In an effort to address the loss of farmland, over 35 states have implemented farmland protection programs. In 1996, the U.S. Department of Agriculture funded a farmland protection effort with a 6-year goal of protecting between 170,000 and 340,000 acres of farmland. In 2002, the U. S. Department of Agriculture again funded a farmland protection effort requiring a local match of 25 to 50 percent of the conservation easement cost.

West Virginia has not escaped the loss of farmland. From 1964 to 1997, The U.S. Department of Agriculture reports that West Virginia lost an incredible 17,732 farms and 1,823,060 acres of farmland. From 1982 through 1997, 25 of the most productive counties in West Virginia had a combined loss of 103,519 acres of productive farmland - and 40% of the loss came from the three county Eastern Panhandle area. The U.S. Department of Agriculture also reports that West Virginia lost 21,676 acres of orchard land from 1964 to 1997. To address the loss of agriculture land and woodland as open space, the West Virginia legislature passed into law on March 10, 2000 the Voluntary Farmland Protection Act.

The Farmland Protection Programs established by each county and the State Authority set uniform standards and guidelines for the eligibility of properties and the ranking criteria utilized to prioritize funds allocation to purchase conservation easements, or to pay associated costs for the purchased or donated easements. The guidelines established by the various Programs outline the methods of farmland protection available to prospective participating property owners, and the procedures to be followed in applying for program consideration.

Benefits to the Community

The protection of farmland through conservation easements provides many significant benefits:

• the ability to provide a local source of agriculture products
• the conserving of our most important soils for future generations
• enhancement of tourism
• protection of the landscapes that the community considers important
• preservation of historical, archeological or cultural resources
• providing of open space for rapidly developing areas
• ability to protect natural resources
• ability to protect source waters important to the community

In addition, the Voluntary Farmland Protection Act provides a unique opportunity for each participating county: they have the ability on a local level to design, implement, fund and administer a Farmland Protection Program that is right for their county alone. The Act is broad in its guidelines and criteria, allowing each county to protect agricultural land and woodlands as they see fit.

Permitted Uses

Farmland upon which a conservation or preservation easement has been recorded may be used for the following:

• farm use
• business use directly related to the retail sale of farm products
• any activity performed for religious, charitable or educational purposes or to foster tourism
• any home-based business not requiring a State Division of Environmental Protection permit to operate

Eligibility

Generally, property must meet the following minimum criteria in order to be considered for either a purchased or donated conservation easement:

1. The property must be located in the county in which the Farmland Protection Board operates, or application must be made to the State Authority.
2. The property shall be land which meets one or more of the following criteria, as defined by the Voluntary Farmland Protection Act:
   1. used or usable for agriculture, horticulture or grazing (qualifying property)
   2. wetlands that are part of the qualifying property
   3. woodlands that are part of or appurtenant to a qualifying property tract; or held by common ownership of a person or entity owning qualifying property
3. No commercial or industrial structure shall be located on the parcel
4. Clear title to the property must be established and the application must be signed by the property owner(s).

In addition, the property shall not have any current or past uses that would render the establishment of a conservation easement inconsistent with the intent of the Act or this Program. Such determination is typically made by the county Farmland Protection Board after consideration of all facts and circumstances.

Additional program criteria must be met for acceptance of a donated easement. Purchased easements and expenses on donated easements shall be ranked in accordance with the program criteria.

Duration of Conservation Easement

A conservation easement must be perpetual in order to qualify for potential Federal income tax and estate tax benefits. Easement in West Virginia under the Voluntary Farmland Protection Act must be perpetual. Under a perpetual easement, even though you may sell or bequeath the land, subsequent owners will be bound by the terms of the easement.

Although there is a common law “rule against perpetuities” which otherwise prevents any agreement from being recorded as perpetual, conservation easements have become an exception to this rule. Almost all 50 states have passed state laws to allow for perpetual conservation easements. West Virginia passed its own Conservation and Preservation Easements Act (Article 12, Chapter 20) in 1995. Perpetual easements have been accepted into farmland protection programs and by land trusts all over the United States for over 30 years. To date, the courts have upheld the legitimacy of perpetual conservation easements and have acted against those who would seek to undo them.

Valuation of Conservation Easement

A landowner may make an offer to sell a conservation easement on qualifying property. Under the Voluntary Farmland Protection Act, offers may be made by the landowner from one dollar up to the maximum value of the easement as defined under the Act. The fair market value and the agricultural value of the property are key concepts in determining the maximum value of the easement:

Fair Market Value

The fair market value of the land is the price at the valuation date for the highest and best use of the property which a vendor, willing but not obligated to sell, would accept for the property, and which a purchaser, willing but not obligated to buy, would pay for the property if the property was not subject to any restriction imposed under the Deed of Conservation Easement.

Agricultural Value

The agricultural value of land is the price at the valuation date which a vendor, willing but not obligated to sell, would accept for the property, and which a purchaser, willing but not obligated to buy, would pay for the property subject to the restrictions placed upon it by the Deed of Conservation Easement.

The maximum easement value is the difference between the fair market value of the land and the agricultural value of the land.

These values are determined by a certified appraiser that has experience in the valuation of conservation easements.

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