Frequently Asked Questions
Frequently Asked Questions about Agricultural Conservation Easements in West Virginia
Where do I start to find out about placing agricultural conservation easement on my property?
When you have decided you are interested in placing a conservation easement on your property, visit the website at www.wvfarmland.org and click on the drop-down counties tab to find the farmland protection board in your county. Your local USDA office will also have contact information.
If your county does not have a farmland protection board, contact the Agricultural Lands Protection Authority. The Authority is empowered to accept conservation easements from anywhere in the state, including from landowners in those counties that also have Farmland Protection Boards. The Authority is intended to provide a state-level entity as a dual system in parallel with the county Farmland Protection Boards. The Authority also serves to assist those landowners in counties that do not have Farmland Protection Boards.
Next, make an appointment with the Board representative to review the application process and receive forms to complete the application.
What West Virginia organizations are involved with farmland protection?
There are 19 West Virginia counties with a farmland protection boards, and the state-wide West Virginia Agricultural Lands Protection Authority. The state’s Outdoor Heritage Conservation Fund also will consider farmland, but prioritizes other natural resources. The West Virginia Natural Resources Conservation Service (NRCS) is a federal partner that offers matching funding to the county boards.
Agricultural properties that contain other valuable conservation features, such as rare habitat, forest lands, water resources or historical importance may be eligible for protection by other conservation organizations that partner with the farmland protection boards. Local boards have partnered with private conservation groups such as The Nature Conservancy, The Potomac Conservancy, and the West Virginia Land Trust and federal organizations such as the National Park Service/ American Battlefield Protection Program and the Forest Legacy Program.
What is an agricultural conservation easement?
An agricultural conservation easement is a set of restrictions a landowner voluntarily places on his or her property in order to preserve its agricultural values. The goal of the easement is to maintain agricultural land available for production by removing the development pressures from the land. Such an easement prohibits practices which would damage or interfere with the agricultural use of the land.
The conservation values of the property and the restrictions created to preserve those values, along with the rights reserved by the landowner, are detailed in a legal document known as a conservation easement. This document is attached to the deed and filed with the local county land records. Because the easement is a restriction on the deed of the property, the easement remains in effect when the land changes ownership.
How are agricultural conservation easements different from other types of conservation easements?
Agricultural conservation easements are created specifically to support agriculture and prevent development on the subject parcels. While other benefits may accrue because the land is not developed (scenic and habitat values, for example), the primary use of the land is agricultural. To be considered, properties must be of a size and nature suitable for viable commercial agriculture.
What are the size requirements for a property?
Properties less than 20 acres usually will not be considered eligible for the program. However, Farmland Protection Boards do have the discretion to consider a small property if it has high quality soils and abuts an already protected farm, or if the owner offers a donation of the easement.
Questions About Process/Time
How does the easement process work?
Donating development rights to land – often a farm or ranch family’s most valuable asset – requires careful planning and consideration. It often takes years from the initial conversations with a landowner before a conservation easement is completed.
Questions About Time
How long do you have to own the property to be eligible for the program?
For the Federal programs there is no requirement for length of ownership.
When do applications need to be submitted?
Applications can be submitted to the counties at any time. However, counties typically accept applications until October 31st of each year in order to submit them for federal matching funds. If a landowner is donating an easement on their property, this deadline would not apply. Counties in some cases may decide to fund an application entirely, which would remove the processing time involved with seeking federal matching funds.
What is the estimated timeframe from acceptance to closing on the easement?
Approximately 18 months to two years.
How do I qualify for the program?
Land is eligible for the Farmland Preservation Program if it qualifies for farmland tax assessment and meets the minimum eligibility criteria.
The value of a farm or development easement is established through an independent appraisal that is reviewed by a qualified third-party appraisal reviewer. Once a value has been determined and agreed upon, and an application has been approved, the sale can proceed.
The County Boards and the state WVALPA is responsible for approving applications to the Farmland Preservation Program and is the starting point for most interested landowners. At the county level the Boards review and approve applications, and then forward them to NRCS and the County Commission for approval. A funding offer sent to applicants when the JCFPB and the agency with matching funds agree to jointly fund the application.
How is the program funded?
Currently the farmland protection programs are funded on the County level by a portion of the Real Estate Transfer Tax collected by the County Clerk. Funds used to purchase conservation easements from this source are matched by the Natural Resources Conservation Service (NRCS), a division of the US Department of Agriculture. Other matching funding sources may be applicable for your easement from other conservation organizations, which will be determined in the initial assessment of your property.
In counties with recognized battlefields on farmland, funds are available for battlefield protection through the National Park Service/ Battlefield Protection Program. Two state entities, the Outdoor Heritage Conservation Fund (OHCF), and the West Virginia Agricultural Lands Protection Authority (WVALPA), which are funded by state recording fees, fund select conservation easements in partnership with local farmland protection boards and private land trusts.
What if I have a loan on the property?
Your lender must be willing to agree to subordinate the loan to the interests of the conservation easement. This means that the lender agrees to abide by the terms of the Deed of Conservation Easement in the event of foreclosure of the property.
Are there income limits?
Landowners with an average adjusted gross income limitation exceeding $1 million for the 3 tax years immediately preceding the authorization of NRCS funding for the state are not eligible to receive program benefits or payments. However, an exemption is provided in cases where two-thirds of the adjusted gross income limitation is derived from farming, ranching, or forestry operations. There are no limits on income for the state or local programs.
What Organizations are involved with placing the easement on the land?
Co-holder Policy: The Deed of Conservation Easement is held and administered locally, at the county level. In addition, with the approval of the County Farmland Protection Board, a landowner shall designate a co-holder under the Deed of Conservation Easement. Typically, private land trusts may be utilized to co-hold easements with governmental and quasi-governmental entities as desired by the landowner. For instance, The Land Trust of the Eastern Panhandle and The Nature Conservancy are examples of private land trusts. To ensure the ability of the co-holder to maintain, protect and enforce the rights, responsibilities and actions pursuant of the Deed of Conservation Easement, the private land trust organization appreciates a voluntary stewardship payment. The landowner may also grant the easement to a private land trust as the grantee and apply to have the County Farmland Protection Board act as co-holder.
Questions About Restrictions
A conservation easement is forever… Can an easement be removed and by what authority?
If circumstances arise in the future that render the purpose of the easement impossible to accomplish, the easement can only be terminated or extinguished, whether in whole or in part, upon approval by the farmland protection board, its co-holder, USDA-NRCS or its successors and by judicial proceedings in a court of competent jurisdiction.
The removal of trees is forbidden on a conservation easement… but what happens if you plant trees to be harvested?
Trees may be harvested for farm use, but may not be sold commercially. Is this going to change when the AG finally speaks?
Will any type of farming be prohibited?
There are no particular restrictions on farming as long as they do not damage the agricultural quality of the land. Landowners are required to have a conservation plan in place on their property that is established with the local NRCS office.
Who owns the mineral rights on lands contained in a conservation easement?
The mineral rights may be held by the landowner or a third party. However, surface mining will be prohibited by the easement. Properties where the subsurface mineral rights are owned by a third party are subject to special requirements.
County Farmland Protection Boards will accept easements on such properties only if:
- The third party mineral owner agrees to prohibit any surface mining; and
- The third party oil and gas owner agrees to construct a maximum number of wellheads as determined by the Board; or
- The probability of surface mining is considered to be extremely unlikely as determined by the Board after consideration of all facts and circumstances. Such considerations shall include, but shall not be limited to:
- Past or current surface mining in the vicinity
- The identity of the third part owner and whether they are still in existence
- The probable extent of such minerals and the resultant financial attractiveness
Can one or two family dwellings be added to the property once the farm is in the program?
If not, how can this be done? Once the landowner has closed on a conservation easement, the property may not be subdivided. A landowner may choose to create exception parcels separate from the property before a conservation easement is placed on the remainder, or create a limited number of residential parcels on the property that are part of the easement. The removal of agricultural land from the total acreage may reduce the eligibility of the property. Exception parcels that are not part of the easement may be created, but the program strongly discourages “doughnut holes” that increase impervious surface and reduce agricultural use.
Is land placed under an agricultural conservation easement open to the public?
No. The sale of development rights does not make farmland public property. The public has no right to access or use a deed-restricted farm without the landowner’s consent. Land protected with a conservation easement under the National Park Service/ American Battlefield Protection Program must be visible from a public road. In both programs, public access to a protected property is not permitted.
Who will oversee the easement?
The County Farmland Protection Board is responsible for conducting annual inspections of properties on which it holds an easement to ensure that the property remains protected. It may complete the easement monitoring through its staff, or may subcontract this work through an appropriate agent. Typically the Board schedules a visit convenient for the landowner, and if possible, the landowner accompanies the monitoring staff on the visit.
Where the conservation easement is jointly held by a private land trust (also called the co-holder), the responsibility for the easement monitoring and coordinated enforcement efforts shall be clearly delineated.
What happens if an easement violation is discovered?
In the event of an easement violation, the County Farmland Protection Board would make every attempt to work with the landowner to rectify the problem. In the event that a satisfactory resolution cannot occur, the Board may work through its County Attorney or through private attorneys to meet its perpetual obligation to protect the property.
Easement violations typically occur with owners subsequent to the original owner of the property who enacted the easement. Even though the original landowner enacting the easement has sold or bequeathed the land, subsequent owners are bound by the terms of the easement. The easement is said to “run with the land.”
Questions About Value
How much money can a landowner expect to receive from selling a conservation easement?
A landowner may sell an easement for no more than the value determined by the Yellow Book appraisal. The maximum easement value is the difference between the fair market value of the land and the agricultural value of the land.
For example, the hypothetical fair market value of a 100-acre parcel of unrestricted land is $3,000 an acre or $300,000 for the entire parcel. The land is suitable for a housing subdivision and is in an area that is currently being developed. The agricultural value of the land is $1,000 an acre or $100,000 for the entire parcel. The maximum value of the conservation easement on this parcel is $200,000 ($300,000 fair market value less $100,000 agricultural value). Subject to the availability of funds, the owner would be compensated $200,000 for the conservation easement.
The offering price is the amount the landowner is asking to be reimbursed for the sale of the conservation easement to the Farmland Protection Board. The offering price can be the maximum easement value, or it can be some fraction of this value. Landowners gain points in the ranking criteria by offering to sell the easement for less than the maximum value.
What are the tax implications for a landowner placing an agricultural conservation easement on his or her property?
Depending upon each individual landowner’s situation, the placement of an agricultural conservation easement on land may provide income, property, and estate tax benefits. In most cases the degree of benefit is influenced by a landowner’s willingness and ability to make charitable donations on all or a portion of an easement’s value. Rules related to these donations have changed over time, starting with the Federal Taxpayers Relief Act of 1997. Landowners are strongly advised to consult a tax advisor and financial advisor to address these questions.
How the Federal Conservation Tax Incentive Works
Congress approved the incentive, which helps landowners of modest means choose conservation by:
Allowing the maximum federal deduction a donor can take for donating a conservation easement to 30% of their adjusted gross income (AGI) in any year.
A donor can spread the deductions over six years.
Must an applicant have a formal appraisal prepared for the sale or donation of an agricultural conservation easement?
Yes. West Virginia law and NRCS require appraisals to Uniform Appraisal Standards for Federal Land Acquisition (UASFLA or “Yellow Book”) for compliance with the easement program. Each Farmland Protection Board has different requirements for when the appraisal is done.
An appraisal cannot be more than twelve months old at the time of closing, i.e. a “qualifying appraisal” under the WV Code and NRCS rules is less than twelve months old at the time of closing.
If an application is not accepted one year by NRCS and is rolled over to the next year, an updated appraisal will be done, at County expense, prior to closing on the property.
If the proposal is accepted for funding, the county Boards may fund up to the appraised value of the easement, or the accepted estimate provided in the grant application (providing that minimum match requirements are attained).
If the landowner donates all or part of the value of the property, the IRS requires an appraisal to IRS standards to be made within 60 days (before or after) of closing. Make sure the appraiser knows this appraisal is for the IRS and that the appraiser completes and signs the IRS forms. The county board also must approve and sign the form. The NRCS will NOT accept an appraisal done to IRS specifications and vice-versa, even though much of the information is similar.
Will the value of the land placed in a conservation easement be greater or less than land without an easement?
The land placed under easement will be valued at its agricultural value, because the development value has been removed. The value in the future may increase, depending on the demand for agricultural land, or property with acreage.
Will the land bordering the conservation easement be worth more or less than lands bordering land not in an easement?
There are no hard and fast rules about the impact of a protected property’s impact on property values of adjacent property. Studies of the impact of conserved areas on real estate values indicate that residential properties that are near or abutting a protected property will sell for higher prices than similar properties without a protected neighbor.
Can I apply for other USDA/NRCS farmland protection funds while under the farmland protection program?
This may be different in the 2014 farmbill
Yes. Landowners who enroll in FRPP are eligible to participate in USDA’s conservation cost-share programs, including:
(i) Agricultural Management Assistance Program (AMA).
(ii) Agricultural Water Enhancement Program (AWEP).
(iii) Chesapeake Bay Watershed Initiative (CBWI).
(iv) Conservation Reserve Enhancement Program (CREP) (long-term contracts only).
(v) Conservation Reserve Program (CRP).
(vi) Conservation Stewardship Program (CSP).
(vii) Grassland Reserve Program (GRP) (long-term contracts only).
(viii) Environmental Quality Incentives Program (EQIP).
(ix) Wildlife Habitat Incentives Program (WHIP).
(x) Wetlands Reserve Program (WRP) (long-term contracts only).
Is funding available for restoring old barns and farmhouses?
In West Virginia, the State Historic Preservation Office is a source of limited funding. The Office administers both the state and federal historic preservation programs and aids federal and state agencies, local governments and the general public in identifying and preserving the physical historic and prehistoric resources of West Virginia. www.wvculture.org/shpo/ (304)558-0240
Who should I talk with to discuss financial and estate planning questions involved with a placing my property in the farmland protection program?
Seek qualified attorneys and financial advisors with experience in conservation, tax planning and estate planning. The Center for Rural Affairs and other resources provide information on these topics. www.cfra.org