Walking the Land with Your Uncle Public & Private Initiatives for Land Preservation Presented by: The Killbuck Watershed Land Trust

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 Agenda

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 Why Preserve Farm Land & Open Space?

Development / Population Growth Disconnect with Farms – Migration to Cities Farmland is the Farmer’s Piggy Bank Forces Against Land Preservation

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 Government Conservation Efforts

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 Early 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 Recent Private Initiatives

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 Public / Private Partnerships

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 setting forth Ohio’s policy of farmland preservation. Ohio continues to strengthen programs Preservation of Ohio’s Farm Land

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 ) 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 ) 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 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 Ohio’s Farmland Preservation Programs

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 Preserving Land is not a Complete Solution

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 Definitions

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 $ The appraised value of the farm as restricted for farm use only is: $4,000 per acre: Total $ The value of the easement is $ 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 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 $ The appraised value of the farm as restricted for farm use only is: $4,000 per acre: Total $ 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 Example of Conservation Easement Deduction

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 Re-Cap

Questions?