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3 PURCHASE OF AGRICULTURAL CONSERVATION EASEMENTS (PACE) PROGRAM: QUESTIONS AND ANSWERS What is a Purchase of Agricultural Conservation Easement program? A purchase of agricultural conservation easements program (PACE), commonly referred as a purchase of development rights program, is a voluntary farmland protection technique that compensates landowners for restricting future development on their land. Landowners hold a bundle of rights in their property, including the right to build on the property in accordance with local zoning regulations and the right to farm. An easement separates certain rights from the bundle and conveys them to another party. PACE programs enable landowners to sell the right to develop their land to a government agency while retaining full ownership. The right to develop the property is subsequently retired, preventing conversion to non - agricultural uses. How many PACE programs are found in the United States? As of July 1996, State programs are authorized in 12 States: Connecticut, Delaware, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, Pennsylvania, Rhode Island, and Vermont. The Maryland, Pennsylvania, and New Jersey State programs are augmented by county participation. In addition, free - standing local programs exist in California, Colorado, New York, North Carolina, Michigan, Virginia, and Washington. The availability of Federal funding through the 1996 Farm Bill's Farmland Protection Program is expected to encourage the formation of additional State and local easement acquisition programs. How do the PACE programs determine which land to protect? In general, the PACE program places highest priority on protecting the highest quality farmland. A set of criteria are used to rank applications and allow administrators to emphasize attributes that are consistent with the program's conservation goals. A primary concern is land productivity based on NRCS's Soil Capability Classifications. Other considerations include jeopardy or the threat of development, and proximity to other protected farms and farm services. Finally, programs factor in the acquisition price and the existence of historic, scenic, or environmentally significant resources on the site. The USDA's Land Evaluation and Site Assessment System (LESA) has served as a useful framework for identifying which parcels to protect. A modified versions of LESA would be employed by Orange County's PACE program. How is the value of a conservation easement determined? The value of the conservation easement is usually determined by conducting a professional appraisal. A qualified, professional appraiser assesses the difference between the fair - market value, often using comparable sales, and its restricted value. In some jurisdictions restricted value, or its value for agricultural use, is based on comparable sales, while other programs employ a formula incorporating land rents and soil productivity, Easement values vary as a proportion of the full -market value, depending on the degree of development pressure and market demand. For example, intense development pressure inflates market value above the land's value for agricultural use, increasing the price of the conservation easement. As an alternative to the appraisal process, one local farmland protection program employs a point system for valuing development rights, assigning a cash value to points earned based on the land meeting certain program goals and objectives. What are the terms or restrictions found in a typical easement, how do they protect farmland? The easements generally restrict non -farm development and subdivision. Some allowances for farm- related housing may be allowed but these are stipulated in the easement. Generally there are few restrictions on improvements and construction related to the farming operation. The easements become part of the land deed and are recorded in the local land records. Therefore, the easements will govern any future use of the land and will legally bind any future owners.