"Easement, as used in terms of real estate, is associated with the right to use land for a specific purpose. It gives a person, agency or other entity (such as the government or utility company) the right to use a portion of your property. Most common easements are used for public utilities, storm water, sanitary sewer, or drainage.
There is also another type of easement, known as a "conservation easement." The loss of farmland and open space throughout the country has become a very important issue in recent years. The debate currently surrounding the possible expansion of the urban service boundary for development as opposed to preservation and protection of rural land for agricultural, equine, and tourism purposes brings this version of easement to center stage.
By definition, a conservation easement is a voluntary legal agreement between a landowner and a conservation organization. The easement permanently protects productive agricultural land, historic sites, scenic views and natural resources. They may cover an entire parcel or portion of a property, and are individually tailored to each property and the needs of individual landowners.
Landowners are compensated for their donation of land by receiving tax benefits, including income, estate, and property tax reductions. The benefit amount is dependent upon the value of the easement as determined by comparing the property value prior to and after the easement restrictions are put in place. Donated easements must be perpetual in duration in order to qualify for the tax benefit. The property does remain in private ownership and the landowner does retain the title to the property and may continue utilizing it for agricultural operations. While easements do not guarantee that the land will continue to be actively farmed, they do ensure that the land will remain undeveloped. Also, the land can be used as collateral for a loan, and does still remain on the tax rolls. Conservation easements are generally more suitable for the large agricultural/equine operations, and may not be a viable option for all landowners.
The Bluegrass Conservancy holds conservation easements in Fayette, Bourbon, Clark, Jessamine and Woodford counties, currently protecting 2,827 acres. The Land Trust Alliance, a federal organization that promotes voluntary private land conservation has been instrumental in lobbying for additional tax benefits for conservation easements.
On August 6, 2006, Congress approved and expanded federal tax incentives for conservation easement donations. The new law raises the deduction a landowner can take for donating a conservation easement from 30 percent to 50 percent of their income. It also qualifies farmers and ranchers to deduct up to 100 percent of their income, and it extends the carry-over period for donations for a voluntary conservation easement from 5 to 15 years. However, this only applies to easements donated in 2006-2007. Hopefully, this incentive will induce more easement donations.
The Kentucky Horse Park announced on November 3 that the Equestrian Land Conservation Group would move its national headquarters to the Kentucky Horse Park. ECLG is dedicated to promoting access to and conservation of land for equestrian usage. "These changes will increase the ELCG's effectiveness in helping horse owners, equestrian organizations and conservation partners protect equine access all around the United States," said ECLG President Georgiana McCabe.
Another tool that exists and has been created specifically for protection of farmland is the purchase of development rights (PDR). Currently 18 states have active PDR programs, including Kentucky, exclusively Fayette County.
PDR is a completely voluntary program where a land trust or some other agency usually linked to local government makes an offer to a landowner to buy the development rights on the parcel. In Lexington, the program is specifically funded by the general fund and is subject to matching grants from state and federal agencies.
Once such an agreement has been made, a permanent deed restriction is placed on the property, which restricts the types of activities that may take place on the land in perpetuity. It is a legally binding guarantee that ensures that the parcel will remain agricultural or open space forever. This helps the farmer that is typically cash poor and land rich, and gives him or her the option of continuing to own and operate a valuable piece of land while realizing some financial benefits, while not feeling pressured to sell the land for development.
So why should a community consider farmland preservation programs? According to the Bluegrass Conservancy Web site, The World Monument Fund has named the Bluegrass Cultural Landscape of Central Kentucky to its 2006 list of 100 Most Endangered Sites in the World.
The Lexington Fayette Urban County Web site shows, as of October 31, 147 farms totaling more than 16,883 acres are now permanently protected by conservation easements. The types of farms in the program include 54 general agriculture farms, 80 equine and other (sod, wooded, etc). The total includes 13 farms that donated conservation easements on 464 acres. The PDR program and Rural Service Area Land Management Plan expect to exercise conservation easements to protect 50,000 acres of rural Fayette County over the next 20 years, and also provide funding of $140 million over 20 years in order to protect our world-famous landscape.
The LFUCG has also been a recipient of the 2004 James C. Howland Municipal Enrichment Gold Award from the National League of Cities in recognition of the contributions made through the PDR program.
We are so blessed to live in a community that has such a unique landscape and equine heritage, and also one that recognizes the importance of preserving, maintaining, and promoting our land.
We all agree that there is no other place like Lexington and realize that we need to protect the environment that makes us so distinct. Using conservation easements is certainly one way to facilitate that goal. "