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Farmland Information Center Fact Sheet | The Farmland Protection Toolbox | The American Farmland Trust

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This fact sheet provides a brief description of the tools and techniques that state and local governments are using to protect farmland and support the economic viability of agriculture. Some of the techniques result in programs that are enacted and administered at the state level, others are used primarily by local governments. Sometimes, municipal governments adapt and strengthen state laws to meet unique local needs. Som

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Farmland Information Center Fact Sheet | The Farmland Protection Toolbox | The American Farmland Trust

  1. 1. AMERICAN FARMLAND TRUST · FARMLAND INFORMATION CENTER DESCRIPTION This fact sheet provides a brief description of the assessment or property tax credits to farmers tools and techniques that state and local govern- who enroll. ments are using to protect farmland and support Some states encourage local planning by limiting the economic viability of agriculture. Some of the district authorization to jurisdictions with techniques result in programs that are enacted comprehensive or farmland protection plans, and administered at the state level, others are requiring the adoption of land use regulations to used primarily by local governments. Sometimes, protect farmland, involving planning bodies in FARMLAND municipal governments adapt and strengthen state laws to meet unique local needs. Some of the development and approval of districts, and INFORMATION limiting non-farm development in and around the most effective farmland protection programs agricultural districts. combine regulatory and incentive-based strategies. CENTER AGRICULTURAL DISTRICT PROGRAMS AGRICULTURAL PROTECTION ZONING (APZ) Agricultural district programs allow farmers to FACT form special areas where commercial agriculture is encouraged and protected. Typically, programs Agricultural protection zoning refers to county and municipal zoning ordinances that support and protect farming by stabilizing the agricul- are authorized by state law and implemented at SHEET the local level. Enrollment in agricultural districts is voluntary. In exchange for enrollment, farmers tural land base. They designate areas where farming is the primary land use and discourage other land uses in those areas. APZ limits the receive a package of benefits, which varies from activities that are permitted in agricultural state to state. zones. The most restrictive regulations prohibit THE There are 19 agricultural district programs in any uses that might be incompatible with com- 16 states. California, New Jersey and North mercial farming. Carolina offer farmers two levels of benefits. APZ ordinances restrict the density of residen- Minnesota and Virginia have statewide and local FARMLAND agricultural district programs. Ohio has two tial development in agricultural zones. Maximum densities range from one house per 20 acres in statewide programs. the eastern United States to one house per Agricultural district programs are intended to 640 acres in the West. Exclusive agricultural use PROTECTION be comprehensive responses to the challenges APZ prohibits non-farm residential development. facing farmers in developing communities. To Non-exclusive APZ ordinances use different maintain the land base for agriculture, some approaches to limit density. Large minimum lot TOOLBOX agricultural district programs protect farmland size APZ sets a minimum lot size for each resi- from annexation and eminent domain. Many dence. For example, some ordinances require also require that state agencies limit construction 40 acres per dwelling unit. Area-based of infrastructure, such as roads and sewers, in allowance APZ uses a formula to achieve a agricultural districts. A few offer participants desired density on the parent tract but allows or eligibility for purchase of agricultural conserva- requires houses to be situated on small lots of 1 FARMLAND INFORMATION CENTER tion easement programs, and two states include or 2 acres. The ratio may be fixed or based on a One Short Street, Suite 2 a right of first refusal in district agreements to sliding scale that requires more acreage per Northampton, MA 01060 ensure that land will continue to be available dwelling for larger parcels. Tel: (413) 586-4593 for agriculture. Fax: (413) 586-9332 In addition to limits on residential development, Web: www.farmlandinfo.org Agricultural district programs help create a more some APZ ordinances also contain limits on sub- secure climate for agriculture by preventing local division, site design criteria and right-to-farm NATIONAL OFFICE governments from passing laws that restrict farm provisions. They may also authorize commercial 1200 18th Street, NW, Suite 800 practices and by providing enhanced protection agricultural activities, such as farmstands, that Washington, DC 20036 from private nuisance lawsuits. enhance farm profitability. Occasionally, farmers Tel: (202) 331-7300 in an agricultural zone are required to prepare To reduce farm operating expenses, some pro- Fax: (202) 659-8339 farm management plans. grams offer automatic eligibility for differential Web: www.farmland.org The FARMLAND INFORMATION CENTER (FIC) is a clearinghouse for information about farmland protection and stewardship. © February 2008 The FIC is a public/private partnership between the USDA Natural Resources Conservation Service and American Farmland Trust.
  2. 2. A m e r i c a n f a r m l a n d t r u s t · F a r m l a n d i n f o r m a t i o n c e n t e r In most states, APZ is implemented at the county ranchers because of the noise, dust and odors level, although towns and townships may also associated with commercial agricultural produc- have APZ ordinances. Zoning can be modified tion. Even if the owners are willing to let the through the local political process. Generally, the land be used for agriculture, undeveloped por- enactment of an APZ ordinance results in a tions of cluster subdivisions may not be large reduction of permitted residential densities in the enough for farmers to operate efficiently, and new zone. This reduction in density, also called access can also be a problem. For these reasons, downzoning, may be controversial because it can cluster zoning has been used more successfully THE reduce the market value of land. A change in to preserve open space or to create transitional zoning that increases permitted residential areas between farms and residential areas than densities is known as upzoning. A change in the to protect farmland. zoning designation of an area—from agricultural FARMLAND to commercial, for example—is known as re- COMPREHENSIVE PLANNING zoning. Successful petitions for upzoning and Comprehensive planning allows counties, cities, rezoning in agricultural protection zones often towns and townships to create a vision for their PROTECTION result in farmland conversion. joint future. Comprehensive plans, which are also APZ stabilizes the agricultural land base by known as master or general plans, outline local keeping large tracts of land relatively free of government policies, objectives and decision TOOLBOX non-farm development. This can reduce the like- guidelines, and serve as blueprints for develop- lihood of conflicts between farmers and their ment. They typically identify areas targeted for a non-farming neighbors. Communities can use variety of different land uses, including agricul- APZ to conserve a “critical mass” of agricul- ture, forestry, residential, commercial, industrial tural land, enough to keep individual farms and recreational activities. Comprehensive plans from becoming isolated islands in a sea of resi- provide a rationale for zoning and promote the dential neighborhoods. Maintaining a critical orderly development of public services. mass of agricultural land can ensure that there A comprehensive plan can form the foundation will be enough farms to support local agricul- of a local farmland protection strategy by identi- tural service businesses. By restricting the devel- fying areas to be protected for agricultural use opment potential of large properties, APZ limits and areas where growth will be encouraged. It land speculation and helps keep land affordable may include policies designed to conserve natural to farmers and ranchers. Finally, APZ helps pro- resources and provide affordable housing and mote orderly growth by preventing sprawl into adequate public services. Some counties have rural areas, and benefits farmers and non-farmers used the comprehensive planning process to alike by protecting scenic landscapes and main- encourage their cities and towns to develop desig- taining open space. nated urban growth areas or boundaries (UGBs) and adopt APZ. Others have incorporated the CLUSTER ZONING use of purchase of agricultural conservation ease- Cluster zoning ordinances allow or require ments (PACE) and transfer of development rights houses to be grouped together on small lots to (TDR) into their master plans. protect open land. The portion of the parcel that is not developed may be restricted by a conser- CONSERVATION EASEMENTS vation easement. Cluster developments are also Conservation easements are deed restrictions known as cluster subdivisions, open space or that landowners voluntarily place on their land open land subdivisions. to protect important resources. They are used Cluster subdivisions can keep land available for by landowners (“grantors”) to authorize a qual- agricultural use, but generally they are not ified conservation organization or public agency designed to support commercial agriculture. The (“grantee”) to monitor and enforce the restric- protected land is typically owned by developers tions set forth in the agreement. or homeowners’ associations. Homeowners may Forty-nine states have a law pertaining to con- object to renting their property to farmers and servation easements. The National Conference 2
  3. 3. AMERICAN FARMLAND TRUST · FARMLAND INFORMATION CENTER of Commissioners on Uniform State Laws purposes. They may be advisory or carry the full adopted the Uniform Conservation Easement Act force and effect of law, depending on the state. in 1981. The Act was designed to serve as a Governors from at least nine states have issued model for state legislation to allow qualified executive orders directing state agencies to avoid public agencies and private conservation organi- contributing to the conversion of agricultural zations to accept, acquire and hold less-than-fee- land. These state-level policies mirror the federal simple interests in land for the purposes of Farmland Protection Policy Act (FPPA), which conservation and preservation. Since the Uniform was enacted as a subtitle of the 1981 Farm Bill Act was approved, 23 states have adopted con- servation easement-enabling legislation based to “…minimize the extent to which Federal THE programs contribute to the unnecessary conver- on this model and 26 states have drafted and sion of farmland to non-agricultural uses….” enacted their own conservation easement- Some orders identify a lead agency, typically enabling laws. the state department of agriculture, to review FARMLAND Agricultural conservation easements are designed state agency activities that may result in farm- to keep land available for agriculture. Grantors land conversion. These policies may help head retain the right to use their land for farming, off condemnation and/or may be used to justify PROTECTION ranching and other purposes that do not interfere mitigation. with or reduce agricultural viability. They hold Massachusetts Executive Order 193, for title to their properties and may restrict public example, issued in 1991, has been used by the TOOLBOX access, sell, give or transfer their property, as Department of Agricultural Resources (DAR) they desire. Producers also remain eligible for to negotiate mitigation for farmland loss. The any state or federal farm program for which DAR seeks mitigation for projects involving they qualified before entering into the conserva- state funds and privately funded development tion agreement. projects subject to the state’s environmental Easements may apply to entire parcels of land or permitting process. Mitigation options include to specific parts of a property. Most easements permanently protecting equivalent agricultural are permanent; term easements impose restric- land by granting an agricultural preservation tions for a limited number of years. All conser- restriction to the Commonwealth or by making vation easements legally bind future landowners. a financial contribution to its farmland protec- Land protected by conservation easements re- tion program, a municipality or a qualified con- mains on the tax rolls and is privately owned servation organization. and managed. While conservation easements Other executive orders have created task forces to limit development, they do not affect other investigate farmland conversion and recommend private property rights. possible solutions. For example, Ohio’s executive Agricultural conservation easements are a flexible order created a state-level farmland preservation farmland protection tool. Private land trusts and task force and ultimately led to the creation of the other conservation organizations educate farmers state’s easement acquisition program. about the tax benefits of donating easements, State executive orders have the potential to build and state and local governments have developed public and institutional support for other farm- programs to purchase agricultural conservation land protection programs. By restricting the use easements from landowners. In addition, agricul- of state funds for projects that would result in tural conservation easements can be designed to the loss of agricultural land, executive orders protect other natural resources, such as wetlands also can influence the actions of local govern- and wildlife habitat. ments. To the extent that they call attention to the problem of farmland conversion and facilitate EXECUTIVE ORDERS discussion about solutions, orders can serve as a State executive orders are policy statements building block of a comprehensive farmland pro- issued by governors to accomplish specific tection program. 3
  4. 4. A m e r i c a n f a r m l a n d t r u s t · F a r m l a n d i n f o r m a t i o n c e n t e r FARM VIABILITY PROGRAMS require that public services such as water and sewer lines, roads and schools be in place before Farm viability programs provide technical assis- new development is approved. Others direct tance and, in some cases, small grants to local governments to make decisions in accor- improve the profitability of farm operations. dance with comprehensive plans that are consis- These programs are administered by departments tent with plans for adjoining areas. of agriculture, extension and/or nonprofit orga- nizations. Typically, teams of experts work with Oregon has one of the nation’s strongest growth operators to evaluate the current operation and management laws. As a result of the state’s 1972 THE develop individualized plans. Funds may also be Land Conservation and Development Act, every available to implement practices or undertake county in Oregon has implemented agricultural capital projects identified in the planning protection zoning, protecting more than 16 mil- FARMLAND process. Some of the programs include farmland lion acres of agricultural land. Washington’s protection and resource conservation compo- Growth Management Act (GMA), passed in nents. The Massachusetts Farm Viability 1990 and strengthened in 1991, also is proving Enhancement program, for example, awards to be an effective farmland protection tool. Since PROTECTION implementation grants in exchange for term the enactment of the GMA, most of Washington’s easements. All viability programs assume that counties have developed inventories of important changes at the farm level—be it better manage- agricultural land, and several have adopted agri- TOOLBOX ment of existing resources or a new direction in cultural protection zoning and/or created pur- marketing and/or products offered—can lead to chase of agricultural conservation easement and enhanced farm profitability. transfer of development rights programs. Growth management laws in Hawaii, Vermont, The first two agricultural viability programs New Jersey and Maryland have been somewhat were developed in Massachusetts and Minnesota less effective in preventing farmland conversion in the mid 1990s. Subsequent programs have and promoting the development of local farm- been adopted by Connecticut, Maine, New land protection programs. Jersey, New York and Vermont. In the 2002 Farm Bill, a federal Farm Viability Program was MITIGATION lawS AND POLICIES created, authorizing the Secretary of Agriculture to provide grants to eligible entities with Farmland mitigation laws and policies attempt to approved farm viability programs. The federal compensate for the conversion of agricultural program has not yet been implemented. land to another use by requiring permanent protection of “comparable” agricultural land. In GROWTH MANAGEMENT LAWS 1995, city officials in Davis, Calif., enacted an ordinance that requires developers to perma- Growth management laws are designed to con- nently protect one acre of farmland for every trol the timing and phasing of urban growth acre of agricultural land they convert to other and to determine the types of land use that will uses. Developers can place an agricultural conser- be permitted at the local and regional levels. At vation easement on farmland in another part of least 12 states have laws that control develop- the city or pay a fee in lieu of direct protection. ment or set planning standards for local govern- ments. Of these, several address the issue of King County, Wash., has a “no net loss of farm- farmland conversion. land” policy in its comprehensive plan. The policy prohibits the conversion of land subject to Growth management laws take a comprehensive APZ unless an equal amount of agricultural land approach to regulating the pattern and rate of of the same or better quality is added to the development and set policies to ensure that most county’s agricultural production zones. new construction is concentrated within UGBs. They direct local governments to identify lands In 2004, Connecticut lawmakers adopted Public with high resource value and protect them from Act No. 04-222, which requires municipalities, development. Some growth management laws towns, cities, boroughs and districts to mitigate 4
  5. 5. A m e r i c a n f a r m l a n d t r u s t · F a r m l a n d i n f o r m a t i o n c e n t e r the loss of active agricultural land taken by programs. Cooperative programs allow states to eminent domain. Local governments may either set broad policies and criteria for protecting purchase an agricultural conservation easement agricultural land, while county or township gov- on comparable land within its jurisdiction OR ernments select the farms that they believe are pay a mitigation fee to the state’s farmland pro- most critical to the viability of local agricultural tection program to protect similar land elsewhere economies and monitor the land once the ease- in the state subject to the approval of the state’s ments are in place. Involving two levels of farmland preservation program and the government generally increases the funding Commissioner of Agriculture. available for PACE. Finally, cooperative pro- THE grams increase local government investment in PURCHASE OF AGRICULTURAL farmland protection. CONSERVATION EASEMENT PROGRAMS (PACE) PACE programs allow farmers to cash in a fair FARMLAND percentage of the equity in their land, thus cre- Purchase of agricultural conservation easement ating a financially competitive alternative to programs pay farmers to protect their land from selling land for non-agricultural uses. Permanent development. PACE is known by a variety of easements prevent development that would PROTECTION other terms, the most common being purchase effectively foreclose the possibility of farming. of development rights (PDR). Removing the development potential from farm- Landowners voluntarily sell agricultural conser- land generally reduces its future market value. TOOLBOX vation easements to a government agency or This may help facilitate farm transfer to the private conservation organization. The agency or children of farmers and make the land more organization usually pays them the difference affordable to beginning farmers and others who between the value of the land for agriculture and want to buy it for agricultural purposes. PACE the value of the land for its “highest and best provides landowners with liquid capital that can use,” which is generally residential or commer- enhance the economic viability of individual cial development. farming operations and help perpetuate family tenure on the land. Finally, PACE gives commu- Easement value is most often determined by pro- nities a way to share the costs of protecting fessional appraisals, but may also be established agricultural land with farmers. through the use of a numerical scoring system that evaluates the suitability for agriculture of a RIGHT-TO-FARM LAWS piece of property. Twenty-seven states have authorized state-level PACE programs and inde- Every state in the nation has at least one right- pendent local programs operate in 18 states. to-farm law. State right-to-farm laws are State and local governments can play a variety of intended to protect farmers and ranchers from roles in the creation and implementation of PACE nuisance lawsuits. Some statutes protect farms programs. Some states have passed legislation and ranches from lawsuits filed by neighbors that allows local governments to create PACE who moved in after the agricultural operation programs. Others have enacted PACE programs was established. Others protect farmers who use that are implemented, funded and administered generally accepted agricultural and management by state agencies. Several states work coopera- practices and comply with federal and state tively with local governments to purchase ease- laws. Many right-to-farm laws also prohibit ments. A few states have appropriated money local governments from enacting ordinances for use by local governments and private non- that would impose unreasonable restrictions on profit organizations. Finally, some local govern- agriculture. ments have created independent PACE programs State right-to-farm laws are a state policy asser- in the absence of any state action. tion that commercial agriculture is an important Cooperative state–local PACE programs have activity. The statutes also help support the eco- some advantages over independent state or local nomic viability of farming by discouraging 5
  6. 6. A m e r i c a n f a r m l a n d t r u s t · F a r m l a n d i n f o r m a t i o n c e n t e r neighbors from filing lawsuits against agricul- breaker programs are based on farmer income tural operations. Beyond these protections, it is and are funded by state governments. unclear whether right-to-farm laws help main- Differential Assessment tain the land base. Differential assessment laws direct local govern- At the same time, local governments around the ments to assess agricultural land at its value for nation are enacting their own right-to-farm laws agriculture, instead of its full fair market value, to strengthen and clarify language in state laws. which is generally higher. Differential assessment Local activity has been encouraged by model laws are enacted by states and implemented at THE local ordinances developed by state agriculture the local level. With a few exceptions, the cost is agencies (e.g., New Jersey’s State Agriculture borne at the local level. Development Committee) and/or farm advocacy FARMLAND groups (e.g., California Farm Bureau). Differential assessment programs help ensure the economic viability of agriculture. Since high Local right-to-farm ordinances can serve as a taxes reduce profits, and lack of profitability is a formal policy statement that agriculture is a major motivation for farmers to sell land for PROTECTION valuable part of the county or town economy development, differential assessment laws also and culture. Some require that a notice be protect the land base. Finally, these laws help placed on the deed to all properties in agricul- correct inequities in the property tax system. tural areas, cautioning potential buyers that TOOLBOX they may experience noise, dust, odors and Owners of farmland demand fewer local public services than residential landowners, but they pay other inconveniences due to farming and ranch- a disproportionately high share of local property ing operations. At a minimum, local ordinances taxes. Differential assessment helps bring farm- help educate residents about the needs of com- ers’ property taxes in line with what it actually mercial agriculture and reassure farmers that costs local governments to provide services to their communities support them. the land. TAX RELIEF Every state except Michigan has a differential assessment law. Differential assessment is also Circuit Breaker Tax Relief Credits known as current use assessment, current use Circuit breaker tax programs offer tax credits to valuation, farm use valuation, use assessment offset farmers’ property tax bills. Four states and use value assessment. have circuit breaker programs. In Michigan, Wisconsin and New York, farmers may receive TRANSFER OF DEVELOPMENT state income tax credits based on the amount of RIGHTS (TDR) their real property tax bill and their income. In Transfer of development rights programs allow Iowa, farmers receive school tax credits from landowners to transfer the right to develop one their local governments when school taxes parcel of land to a different parcel of land. exceed a statutory limit. The counties and Generally established through local zoning ordi- municipalities are then reimbursed from a state nances, TDR programs can protect farmland fund. In Michigan, landowners who wish to by shifting development from agricultural areas receive circuit breaker credits must sign 10-year to areas planned for growth. When the develop- restrictive agreements with their local govern- ment rights are transferred from a piece of ments to prevent farmland conversion. In property, the land is typically restricted with a Wisconsin, counties and towns must adopt plans permanent agricultural conservation easement. and enact agricultural protection zoning to Buying development rights generally allows ensure that tax credits are targeted to productive landowners to build at a higher density than agricultural land. ordinarily permitted by the base zoning in desig- Like differential assessment laws, circuit breaker nated receiving areas. TDR is known as transfer tax relief credits reduce the amount farmers are of development credits in California and in some required to pay in taxes. The key differences parts of New Jersey. between the programs are that most circuit 6
  7. 7. A m e r i c a n f a r m l a n d t r u s t · F a r m l a n d i n f o r m a t i o n c e n t e r TDR is used by counties, cities, towns and TDR programs are designed to accomplish townships. Two regional TDR programs were the same purposes as publicly funded PACE developed to protect the pine barrens of Long programs. They prevent non-agricultural devel- Island, N.Y., and New Jersey’s Pinelands. TDR opment of farmland, reduce the market value of programs are distinct from PACE programs protected farms and provide farmland owners because they involve the private market. Many with liquid capital that can be used to enhance TDR transactions are between private landowners farm viability. and developers. Local governments approve TDR programs also offer a potential solution to transactions and monitor easements. A few the political and legal problems that many com- THE jurisdictions have created “TDR banks” that munities face when they try to restrict develop- buy development rights with public funds and ment of farmland. Landowners often oppose sell them to developers and other private landowners. agricultural protection zoning and other land use FARMLAND regulations because they can reduce equity. APZ Some states have enacted special legislation can benefit farmers by preventing urbanization, authorizing local governments to create TDR but it may also reduce the fair market value of programs. In 2004 the New Jersey Legislature their land. When more restrictive land use regu- PROTECTION enacted the State Transfer of Development lations are enacted in conjunction with a TDR Rights Act. The State TDR Act enables muni- program, communities can maintain equity for cipalities to develop and participate in intra- landowners. For example, development rights TOOLBOX municipal and inter-municipal programs. This for transfer may be allocated based on the law also formalized the planning process re- “underlying” or prior zoning. quired to enact TDR and mandated a list of For additional information on While dozens of local jurisdictions around the planning documents required prior to adopting a farmland protection and stewardship, country allow the use of TDR, only a few of TDR ordinance. The Act also authorized the contact the Farmland Information them have used the technique successfully to State TDR Bank Board to provide planning protect farmland. TDR programs are complex Center. The FIC offers a staffed grants to communities developing programs. and must be carefully designed to achieve their answer service, online library, Other states have consistently refused to give goal. Communities that have been most success- program monitoring, fact sheets local governments such authorization. Counties ful in using TDR are characterized by steady and other educational materials. and towns have created TDR programs without growth, with the political will to maintain and specific state authorizing legislation; municipal implement strong zoning ordinances and plan- governments must work with their attorneys to www.farmlandinfo.org ning departments that have the time, knowledge determine whether other provisions of state law and resources to administer complex land use (800) 370-4879 allow them to use TDR. regulations. American Farmland Trust works to stop the loss of productive farmland and to promote farming practices that lead to a healthy environment. 7
  8. 8. AMERICAN FARMLAND TRUST · FARMLAND INFORMATION CENTER FARMLAND PROTECTION ACTIVITY BY STATE Agricultural Conservation Circuit Differential PACE Right-to-Farm* TDR State Districts Easements Breaker Assessment Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming TOTAL 16 49 4 49 32 50 24 State level Local level * A number of local jurisdictions also have enacted right-to-farm ordinances. We do not have a complete inventory. 8

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