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Published: January 1, 2007
Authors:
Robert Procter and
Charles (Buck) Sweeney
Capital insiders expect the Governor to include a statewide purchase of development rights (PDR) grant program for agricultural in his 2007-2009 budget. While Wisconsin now funds a PDR program for natural areas and open space, no statewide grant program exists to purchase development rights from owners of prime farmland. With recent changes in the legislature, that may change.
A template for a farmland PDR already exists-it was included in the August 17, 2006 Report of the Working Lands Initiative Steering Committee (Committee). Commissioned by Doyle in the summer of 2005, the Committee was composed of representatives from state and local government, agricultural groups, developers, and other organizations, including the Wisconsin Builders Association (represented by Jerry Deschane). The Committee was asked to develop a set of recommendations for the protection of Wisconsin working lands (i.e., agricultural and forestry land) from development.
One of the report's key recommendations was the funding of a statewide PDR program to provide matching grants to local government and non-profit organizations to purchase easements on working farmland, a tool now used in 27 other states. The explicit goals of the PDR program would be to retain prime farmland as a viable, important part of the state's economy.
If you are familiar with the current system of conservation easements, then you understand the basic mechanics of a PDR. The Committee is simply proposing that the state put aside money to fund grants to local governments and land trusts for the purchase of development rights. That said, the Committee's farmland PDR proposal does contain some interesting features, some that differ from a typical conservation easement.
Like the conservation easement program, a farmland PDR would involve the voluntary sale of development rights by a landowner to a local government or private, non-profit land trust. But not to the state. The committee strongly recommended that the state fund the grant program, provide assistance to those involved, and maintain a central registry of easements granted under the program, but not actually purchase the easements.
Once a landowner sells his development rights under the proposed PDR program, an easement would be placed on the land prohibiting development of the property for at least 25 years. However, the landowner would retain all other rights of ownership, including the right to keep farming.
After 25 years, the landowner would have the right, under the Committee's proposal, to buy back his development rights and terminate the easement. If the owner could establish that farming is no longer profitable and conflicts with non-farm neighbors, he could try to purchase the development rights. The report does not describe the process or procedures for such a "buy-back" of development rights; instead, the report states that the process should be "quite onerous" and requires further research.
The Committee's report touts the benefits of an farmland PDR program, including the following: it is voluntary and non-regulatory; it provides permanent "protection" to farmland while keeping the land in private ownership and on the tax roles; it provides cash to farmers to reinvest in their operations, pay off debt, or retire; and it keeps land relatively affordable for farmers.
The Committee's report emphasized that state funds be directed to combat the "impermanence syndrome," which refers to the idling or reduction in productivity of farm land as owners believe their land will be developed in the near future and as a result are less willing to maintain established capital improvements and invest in new improvements. This phenomenon concerned the Committee because it reduces overall agricultural productivity beyond the land taken for development.
The Committee report provides only a broad outline of a farmland PDR program, leaving the details to the legislature and administrative rule making. But of course, the devil is in the details. The bill drafting and rule making processes must be carefully followed to avoid the establishment of a PDR that sets up irrational incentives against the productive development of land.
For more information, please call Buck Sweeney at 608.283.6743, or csweeney@axley.com, or Robert Procter at 608.283.6762 or rprocter@axley.com. The authors thank Ed Lawton, a law clerk at Axley Brynelson, LLP, for his assistance.
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