AGRICULTURAL LAND PRESERVATION EASEMENT PURCHASE PROGRAM

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1 AGRICULTURAL LAND PRESERVATION EASEMENT PURCHASE PROGRAM Montgomery County, Pennsylvania April 2014

2 MONTGOMERY COUNTY BOARD OF COMMISSIONERS Josh D. Shapiro, Chair Leslie S. Richards, Vice Chair Bruce L. Castor, Jr., Commissioner MONTGOMERY COUNTY AGRICULTURAL PRESERVATION BOARD Jonathan E. Rinde, Esq., Chair Arthur C. Bustard John H. Corkum Michael A. Gambone Stephen C. Quigley Prepared by Montgomery County Planning Commission. For further information, contact the Farmland Preservation Office at

3 AGRICULTURAL LAND PRESERVATION EASEMENT PURCHASE PROGRAM Montgomery County Agricultural Land Preservation Board April 2014

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5 TABLE OF CONTENTS Page Introduction... 1 How the Program Works... 3 Statement of Purpose... 5 Minimum Criteria For Applications Receiving Commonwealth Funding... 7 Minimum Criteria for County Funded Applications... 9 Public Information Element Procedures for Purchase of Easement I. Application to the Program Deadline Application Form Soil Conservation Plan Location Maps Soils Report Crop Report Livestock Report II. Evaluation of Application III. Appraisal of Easements IV. Offer of Purchase by County Board Applicant s Response To Board s Offer Applicant s Independent Appraiser County Board Action after Applicant Appraisal Complete V. Acceptance of Offer VI. Review of Application by the State Agricultural Land Preservation Board Summary Report Other Required Documents VII. Settlement and the Agricultural Easement Deed Responsibility of Owner One Permitted Residential Structure 23 Subdivision Change Of Ownership Roadside Signs on Preserved Farms Use of Farmland Part-Time or Off-Season Activities Procedure for Inspecting and Enforcing An Easement Responsibility Inspections Annual Report Enforcement iii-

6 Notification To Owner of Violation Enforcement Actions Appendix A - Board Authorization... A-1 Appendix B - Board Members... B-1 Appendix C Bylaws... C-1 Appendix D - Numerical Ranking System... D-1 Appendix E - Application Form... E-1 Appendix F - Subdivision Guidelines... F-1 Appendix G - Planning Map... G-1 Appendix H Elements Of The Appraisal Report... H-1 Appendix I Sample Deed of Agricultural Easement... I-1 This program was certified by the State Agricultural Land Preservation Board on June 27, 1990, and re-certified on December 17, 1996, December 16, 2004, and October 13, It must be re-certified every seven years thereafter. -iv-

7 INTRODUCTION Traffic congestion, fewer open spaces, and loss of rural character are some of the concerns heard in Montgomery County. Among other things, the diversity of its economy has made the county a desirable place in which to live and work. The result is growth in both population and land development. While it is a reflection of economic strength, this development has a heavy impact on the land and the natural features found on it. Farmland is often seen as very desirable for development. Because of this, the county has seen a great deal of its farmland sold for development or taken out of production. This represents the loss of a productive resource which cannot be replaced. However, the farming economy in Montgomery County has historically been, and still is, strong and visible. There is much active farmland, as well as agricultural businesses which process farm products, or sell products and services to farmers. The dynamic population of the Delaware Valley provides opportunities for farming to thrive. Conventional farms continue to produce commodities like feed corn, wheat, and beef, while newer types of farming have a significant place in the county as well. A Montgomery County resident can find products like organic vegetables, nursery stock, buffalo meat, apples, and more right within the county s borders. The Montgomery County Agricultural Land Preservation Program (Farmland Preservation Program) is an opportunity to preserve farmland by placing it in agricultural security areas and purchasing conservation easements from interested landowners. The Easement Purchase Program contained in the following pages details the policies and procedures used in that effort. The program focuses on the following objectives: Encourage a long-term commitment to agriculture. Protect normal farming operations. Conserve viable agricultural lands. Purchase agricultural conservation easements. Preserve land, a needed resource for future farmers business of production agriculture. -1-

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9 HOW THE PROGRAM WORKS The Montgomery County Farmland Preservation Program is a state program administered at the county level. Preserving farmland through this program is a twostep process. The first step is to join an Agricultural Security Area (ASA), and the second step is to submit an application for easement purchase. Joining an ASA does not obligate the landowner to apply for easement purchase, but any farm applying for the easement purchase must first be in an ASA. An ASA is acreage formally designated by the appropriate municipality(ies) for the production of crops, livestock, and livestock products. There is no fee to join an ASA, and there is no financial, zoning, or other such penalty for the change of land use in an ASA. Farms in ASAs are protected from new ordinances which would restrict normal farming operations or define farms as nuisances. In addition, an ASA farm receives another level of protection from taking by eminent domain, through additional approvals needed before condemnation. The process for forming ASAs begins with landowners. ASAs have already been established in Douglass, Franconia, Horsham, Limerick, Lower Frederick, Lower Pottsgrove, Lower Salford, Marlborough, New Hanover, Perkiomen, Plymouth, Salford, Skippack, Towamencin Townships, Trappe Borough, Upper Frederick, Upper Gwynedd, Upper Hanover, Upper Pottsgrove, Upper Providence, Upper Salford, West Norriton, Whitpain, and Worcester Townships. Land preserved through the Agricultural Conservation Easement Program must be located in an ASA containing at least 500 acres. Landowners should contact their municipality for more information. Next, a landowner can apply to sell his development rights (establish a conservation easement) to the County and/or State Agricultural Land Preservation Boards. A municipality may also participate in the purchase of a farm s development rights. Under an agricultural conservation easement, the owner retains ownership of the property but permanently gives up the right to use it for anything other than farming. Once established, the easement restrictions apply to anyone purchasing or inheriting the land in the future. Through the program, landowners are compensated financially for giving up the right to develop their property. Landowners initiate the conservation easement process by filling out an application for the program. The County Agricultural Land Preservation Board (hereafter called the Farm Board) must evaluate all applications which meet the program s minimum criteria. To evaluate and rank applications, the Farm Board uses a Numerical Ranking System. This system awards points to farms based on quality of the farmland, stewardship of the land, threat of development, and proximity to other preserved land. A farm containing land in more than one county may be preserved in one agricultural easement purchase application. The process for a cross-county easement is further described starting on page 7, Minimum Criteria. The Farm Board will order real estate appraisals for the eligible farms scoring highest in the ranking system each year. The purpose of the appraisal is to determine the value of the land and the value of the conservation easement. -3-

10 After easement values are determined, the Farm Board discusses whether to purchase the development rights (place conservation easements) on any of the appraised farms. If the board elects to purchase the development rights on a farm, it will make an offer to the landowner. If the landowner accepts the offer, the county and/or state and/or municipality, and landowner enter into a legally binding agreement of sale when approved at a public meeting. The agreement of sale specifies that the landowner agrees to sell the development rights on the property to the county and/or state and/or municipality. When the easement purchase will be made using any state funds, the Farm Board will submit completed contracts of sale along with a summary report and other supporting documentation, to the State Agricultural Land Preservation Board for its approval. Following its own review, the State Agricultural Land Preservation Board must approve or deny the purchase of an agricultural easement on each farm. See pages 18-21, Section VI of this book for further description. Upon approval, a real estate settlement is held. At the settlement, the landowner signs the deed of easement and receives payment for putting the easement in place. A more complete description of the program can be found in the Procedures for Easement Purchase Section (pages 13-22). In addition, copies of the application form and the evaluation form can be found in the Appendices. Below is an abbreviated overview of the steps to sell an agricultural conservation easement. The entire process generally takes about a year and a half for approved farms to complete. 1. The landowner joins an Agricultural Security Area (ASA). 2. The owner submits an application to the Montgomery County Farmland Preservation Office by the yearly deadline. 3. The easement application is evaluated by the Farmland Preservation Office and given a score based on factors listed in Appendix D of this program booklet. 4. The County Farm Board selects the highest-scoring farms for appraisal. 5. Following the appraisal, the Farm Board may negotiate an easement price with the landowner. If an agreement is reached, the owner signs an agreement of sale. 6. For easements receiving state funding, a report is prepared for State Agricultural Land Preservation Board approval 7. After State Board approval, settlement is held. The owner signs the deed of easement and receives payment for the easement. 8. Yearly inspections are conducted to ensure compliance with the provisions of the easement deed. -4-

11 STATEMENT OF PURPOSE OF MONTGOMERY COUNTY AGRICULTURAL LAND PRESERVATION BOARD It is the purpose of this program to protect viable agricultural lands by acquiring agricultural conservation easements that prevent the development or improvement of the land for any purpose other than agricultural production or a commercial equine activity. Further, it is the purpose of this program to: Encourage landowners to make a long-term commitment to agriculture by offering them financial incentives and security of land use. Protect farming operations in agricultural security areas from incompatible nonfarm uses that may render farming impracticable. Protect farming operations from complaints of public nuisance against normal farming procedures. Assure conservation of viable agricultural lands in order to protect the agricultural areas of this county. Provide compensation to landowners in exchange for their relinquishment of the right to develop their private property for a non-agricultural use. Maximize agricultural conservation easement purchase funds and protect the investment of taxpayers in agricultural conservation easements. Purchase agricultural conservation easements in perpetuity. -5-

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13 MINIMUM CRITERIA FOR APPLICATIONS RECEIVING COMMONWEALTH FUNDING Any landowners applying for easement purchase must first meet certain eligibility criteria before continuing the process. Landowners who may receive funding from the commonwealth must meet the criteria as required by Section 138e.16 of the state regulations and described on page 7. Easements purchased using Commonwealth funding may be acquired jointly with county funds or as multi-funded easements with state, county and municipal funding or with state and municipal funding. Landowners not meeting these minimum criteria may still be eligible if they meet the criteria listed on page 9, criteria for county-funded applications. Any easement qualifying for Act 43 funding may also be purchased using county-only or county and municipal funding. Before a site is ranked under the numerical ranking system, it will first be evaluated for the following minimum criteria to be eligible for state funding, as required by Section 138e.16 of the state regulations: The farmland easement area shall: A. Be one or more of the following: 1. Located in an agricultural security area consisting of 500 acres or more. 2. Bisected by the dividing line between two local government units, having the majority of its viable agricultural land within an agricultural security area of 500 acres or more and the remainder in another local government unit outside of an agricultural security area. 3. Bisected by the dividing line between the purchasing county and an adjoining county, having the land located in the purchasing county within an agricultural security area of 500 acres or more and the remainder in another county outside of an agricultural security area, and with respect to which one of the following applies: a. A mansion house on the tract is located within the purchasing county. b. When the mansion house on the tract is bisected by the dividing line between the two counties, the landowner has chosen the purchasing county as the situs of assessment for tax purposes. c. When there is no mansion house on the farmland tract, the majority of the tract s viable agricultural land is located in the purchasing county. B. Contain at least 50% of soils which are available for agricultural production or a commercial equine activity and are of Land Capability Classes I through IV, as defined by the USDA-NRCS. C. Contain the greater of 50% or 10 acres of harvested cropland, pasture, or grazing land. -7-

14 D. Be contiguous acreage of at least 35 acres in size unless the tract is at least 10 acres in size and is either utilized for a crop unique to the area or is contiguous to a property which has a perpetual conservation easement in place which is held by a qualified conservation organization as that term is defined in Section 170[h][3] of the Internal Revenue Code. Contiguous acreage is defined as all portions of one operational unit as described in the deed or deeds, whether or not the portions are divided by streams, public roads, bridges or railroads, and whether or not described as multiple tax parcels, tracts, purports, or other property identifiers. It includes supportive lands such as unpaved field access roads, drainage areas, border strips, hedgerows, submerged lands, marshes, ponds, and streams. State funds used for the purchase of an agricultural conservation easement less than 50 acres in size may include costs incidental to the purchase and shall not exceed 50% of the purchase price per acre, unless it is at least ten acres in size and is either utilized for a crop unique to the area or is contiguous to a property which has a perpetual conservation easement in place held by a qualified conservation organization as defined in section 170(h)(3) of the Internal Revenue Code of For these farms to be eligible for state funding, the county program shall require a minimum weighted value of 20% in the clustering potential section for prioritizing applications for agricultural conservation easement purchase. When a farm fails to meet Criterion B, C, or D, it may still be considered for preservation, using county funds (see page 9). Owners of these farms are encouraged to apply for preservation, but with the understanding that available funding may be limited. -8-

15 MINIMUM CRITERIA FOR COUNTY FUNDED APPLICATIONS At the discretion of the County Farm Board, an easement may be purchased using county funding only or county and municipal funding. In this case, the farmland easement area: A. Shall be located within a duly recorded ASA comprised of at least 500 acres. B. May contain less than 50% of soils which are available for agricultural production or a commercial equine activity and may contain less than 50% of soils in Land Capability Classes I through IV, as defined by the USDA-NRCS. C. Shall contain the greater of 50% or 10 acres of harvested cropland, pasture, or grazing land except as described below in Section D(i). D. May contain less than 35 contiguous acres of land but must contain at least 10 acres as required to join an ASA. Please note: (i) An easement may be purchased on a farm situated in more than one county. The county processing the application is the county containing the farm s mansion house. In the absence of a mansion house, the county containing the greater portion of land in crops, pasture, or grazing land is the one to process the application. That county program s minimum eligibility criteria will apply to the entire applicant tract. Act 14 of 2001 establishes this option; the provisions of Act 14 apply to Montgomery County applicants. If the easement purchase is not eligible for state funding and is to be made using non-state funds, the County Farm Board is not required to appraise that farm in the order of its ranking. When a landowner intends to donate an agricultural easement, the County Board may accept this donation by using county-only funds to purchase the agricultural easement via payment of $1.00 to the landowner. A farm which initially is not eligible for state funding because of its size may become eligible when adjacent land is permanently preserved through a conservation easement, including an agricultural conservation easement. CRP (Conservation Reserve Program) land may not be counted as part of the cropland, pasture, or grazing land for meeting the minimum criteria when using state or county funding under Act

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17 PUBLIC INFORMATION ELEMENT This element of the program is intended to keep the public aware of the county program so that all interested parties have an opportunity to participate. It is a required element of the program. The County Board shall do the following: Provide status reports and updates on program implementation through Cooperative Extension newsletters, through the Farmland Preservation in Montgomery County newsletter, and the Pennsylvania Farm Bureau. Hold public informational meetings in townships that have formed agricultural security areas in order to inform interested landowners of application deadlines and procedures. Continue to provide information packets to all interested landowners. Places where applications are available throughout the county must be designated and their locations published. Provide information on preserved farmland to the public upon request. This may be a list of owners of preserved farms by municipality, a map showing the location of agricultural easements, or similar information. Publish any easement purchases and continue to make the public aware of funding that is available as the state, county, and local funding are allocated through the years. -11-

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19 PROCEDURES FOR PURCHASE OF EASEMENT I. APPLICATION TO THE PROGRAM Owners of land within agricultural security areas may voluntarily consider applying to sell a conservation easement by applying to the county board. This procedure will take place in accordance with Subchapter D. Sections 138e.61 through 138e.73 of the state regulations and in accordance with the model formats set forth in the state guidebook, including any revisions thereto. A separate application shall be required for each tract offered for easement purchase. The application shall consist of a completed application form, location map, a summary of how many of the applicant farm s total acres are used for cropland or pasture or other land which is needed for our soils report, a crop and/or livestock report, and a copy of a soil conservation plan meeting NRCS standards or a demonstration that the plan has been started. Deadline: The deadline for submitting applications is February 1 st each year. You may request assistance from the Farmland Preservation Office ( ) in completing the application form. An application form can be found in Appendix E. Application Form The county board has developed and made available an application form that requires the following information: A. The name, address, telephone number, and signature of the owner(s) of the farmland tract. B. The street location of the farm. C. The county, municipality, and agricultural security area in which the farmland tract is located. D. If the farm is bisected by a government unit boundary, the name of the other municipality or county. E. The total acreage of the farm, and the number of acres in the farmland tract proposed for easement purchase. F. An ownership deed book and page reference in the Montgomery County Recorder of Deeds. G. County tax map records, including tax parcel number, or account number of each parcel. -13-

20 H. The name, address, and telephone number of the person to be contacted to view the farmland tract. I. The names of any mortgage or lien holders, and the amounts of the liens or mortgages. J. Information regarding any current agreements, verbal or written, to sell the property. K. The number of years the family has farmed the tract. Soil Conservation Plan Every farmland preservation applicant must submit a current Soil Conservation Plan meeting NRCS standards before going to settlement on the easement sale. A Resources Management System (RMS) plan is required for the farmland preservation program. This type of plan addresses all areas of the farm including stream banks, woodlands, farm lanes, and the homestead, as well as cropland and pasture. Location Maps The applicant shall be required to provide a tax map of the farmland tract with map reference and tax parcel number clearly indicated. Staff of the Farmland Preservation Program can provide materials to the landowner upon request. An aerial photo of the farm is acceptable. Soils Report The applicant is required to fill in the top row of the soils report or draw on a map of the property, showing how much land is in cropland, how much in pasture, and how much in other (buildings, creeks, woodlands, etc.). The applicant is also requested to provide the rest of the soils report and soils map for the farmland tract proposed for easement purchase and a table showing the Land Capability Classes as follows. Note: Completing the last five rows is optional. However, applicant must fill in totals in the top row. TOTAL Class I Class II Class III Class IV Other Acres of Acres of Acres of Total Cropland Pasture Other Land Acres The soils map may color code soil types as follows: -14-

21 Class I = Green Class II = Red Class II = Yellow Class IV = Blue Wetlands = Cross-Hatch (or show on a separate map) Crop Report The applicant shall provide crop production information for the farmland tract for the most recent three crop year(s) that yields are available: YEAR A B C D Commodity Acres Grown Yield/Acre Income in Dollars Livestock Report The applicant shall provide a livestock report for the farmland tract for the most recent three calendar year(s) that numbers are available: YEAR Livestock Average Numbers Product Sold Amount Sold Income in Dollars A B C D II. EVALUATION OF APPLICATION The County Board shall evaluate all timely applications which meet the minimum criteria (see Pages 7-9) and rank them according to the county numerical ranking system. The evaluation shall comply with Section 914.1(d)(1)[i-iv] of the Act regarding soil quality, likelihood of conversion, proximity to other eased lands, land stewardship and fair and equitable procedures. The County Board shall then determine whether to appraise the farmland tract. The Board may rank farms not meeting state minimum criteria, for consideration in non-state funded preservation. Appendix D contains more information on the ranking system. III. APPRAISAL OF EASEMENTS Those farms that score well in the numerical ranking system will be appraised. The county will pay for the first appraisal done on these selected farms. The completion of an appraisal report does not guarantee that an easement will be purchased. -15-

22 The appraiser chosen shall be a State Certified General Real Estate Appraiser who is qualified to appraise a property for easement purchase. An appraiser shall be selected by the county on the basis of experience, expertise, and professional designation. The appraisal reports shall estimate both the market value and the farmland value of the proposed farmland easement area, and shall be based primarily on an analysis of comparable sales. The value of a building or other improvement on the farmland easement area may not be considered in determining the easement value. The value of buildings or other improvements should appear separately in the appraisal report. All appraisals must be done in accordance with the standards set forth in Act 43. Appraisers should consult the Appraiser s Guide provided by the staff of the State Bureau of Farmland Preservation. Elements of The Appraisal Report can be seen in Appendix H. IV. OFFER OF PURCHASE BY COUNTY BOARD After the appraisal reports are completed, the County Board may elect to make offers to place conservation easements on some or all of the appraised farms. Municipal funding may also be used, in accordance with Section 914.1(b.1) of the Pennsylvania Agricultural Area Security Law. The purchase price of an easement shall not exceed, but may be less than, the easement value. In determining whether to offer to purchase an easement, the County Board shall consider the following: A. Evaluation according to the numerical ranking system. B. Consistency with county map of priority agricultural areas. C. Cost relative to total allocations and appropriations. D. Proximity to other lands subject to easements. The County Board shall decide whether the purchase will be made with county funds, state funds, or a combination of county and state funding. Municipal funding may also be used, in accordance with Section 914.1(b.1) of the Pennsylvania Agricultural Area Security Law. If the County Board determines to offer to purchase an easement on the farmland tract, the County Board, or a representative of the County Board, may meet with the applicant to review the county appraisal report. An offer to purchase an easement shall be submitted to the applicant in writing and be accompanied by the county appraisal report. This offer is known as the original offer. The offer letter will indicate a total offer and the corresponding value per acre. If a survey reveals acreage more or less than originally indicated, the total offer changes, but the offer per acre does not. Applicant s Response to Board s Offer Within 30 days of receipt of the written offer from the County Board, an applicant may do one of the following: -16-

23 A. Accept the offer in which case the County Board and the applicant shall enter into an agreement of sale. When state funds are being used, the agreement of sale shall be in a form provided by the State Board, and shall be conditioned upon the approval of the State Board. All agreements shall be subject to the ability of the applicant to provide good title to the premises, free of any encumbrances such as liens, mortgages, options, rights of others in surface minable coal, land use restrictions, adverse ownership interest and other encumbrances that would adversely impact the county and commonwealth s interest in the farmland tract. A mortgage subordination release, or letter from the mortgagee, lien holder, or owner of rights in surface mineable coal, approving the purchase of the conservation easement may be required. B. Reject the offer and advise the County Board that the application is withdrawn. C. Advise the County Board that the applicant is retaining, at applicant s expense, an independent state-certified general real estate appraiser to determine the easement value. The appraisal shall be completed in accordance with Subchapter D of the State Regulations. The appraisal shall be submitted to the County Board within 120 days of receipt of the County Board s offer to purchase. Upon completion, three copies of the applicant s appraisal shall be submitted to the County Board. The applicant s decision to obtain an independent appraisal under this paragraph shall not constitute a rejection of the County Board s offer. The County Board s offer shall remain open unless increased by the County Board or rejected by the applicant. (See County Board Action on the following page.) The failure of the applicant to act within 30 days of the receipt of the original written offer from the County Board shall constitute rejection of the offer. Applicant s Independent Appraiser If the applicant retains an independent state-certified general real estate appraiser, the easement value shall be the difference between the agricultural value and the nonagricultural value, determined as follows: A. The agricultural value shall equal the sum of: 1. The farmland value determined by the applicant s appraiser; and 2. One-half of the difference between the farmland value determined by the County Board s appraiser and the farmland value determined by the applicant s appraiser, if the farmland value determined by the County Board s appraiser exceeds the farmland value determined by the applicant s appraiser. B. The nonagricultural value shall equal the sum of: 1. The market value determined by the County Board s appraiser; and 2. One-half of the difference between the market value determined by the applicant s appraiser and the market value determined by the County Board s appraiser, if the market value determined by the applicant s -17-

24 appraiser exceeds the market value determined by the County Board s appraiser. County Board Action after Applicant Appraisal Complete Within 30 days of receipt of the applicant s appraisal report the County Board shall: A. Submit a written offer to purchase in an amount in excess of the original offer; or B. Notify the applicant in writing that the original offer remains open and will not be modified. The applicant shall, within 15 days of receipt of the County Board s written offer under Paragraph (A) or (B) of County Board Action above, notify the County Board in writing that the applicant either: A. Accepts or rejects the amount in excess of the original offer; or B. Accepts or rejects the original offer. The failure of the applicant to notify the County Board within the 15-day period and in the manner prescribed shall constitute a rejection of the County Board s offer. V. ACCEPTANCE OF OFFER If an offer is accepted, the County Board and the applicant shall enter into an agreement of sale containing the requirements and subject to the conditions as set forth in Applicant s Response to Board s Offer on Page 16. If the landowner accepts an offer lower than the appraised value, this is known as a bargain sale, and may offer tax advantages. Payments for the conservation easement can be received in a lump sum, in installments for up to five years at an interest rate determined by the Farm Board, or via a like-kind exchange transaction. The Agricultural Land Preservation Board shall determine the method of payment, lump sum or installments up to five years, after considering the preference of the owner. Another option to consider is the like-kind exchange (Internal Revenue Code 1031), which permits the proceeds from the easement sale to be used to buy another property and potentially defer capital gains. The County Board advises all landowners accepting offers to consult financial advisors regarding tax obligations and estate planning issues. VI. REVIEW OF APPLICATION BY THE STATE AGRICULTURAL LAND PRESERVATION BOARD When the easement purchase will use state funds, the County Board recommends the easement purchase to the State Board. According to Section -18-

25 138e.91 of the State Regulations, the County Board s application to the State Board must include a summary report and various other documents. Following its review of the County Board s recommendation the State Board will approve or deny the easement purchase within 60 days of receipt of the completed recommendation. Summary Report The County Board staff shall prepare a report for the State Board, and submit 25 copies of a farm summary report. The summary report must be prepared in accordance with Section 138e.69 of the state regulations, and include: A. A narrative, which includes: 1. A description of the farm, including the name, location, number of acres, and type of farm. 2. Discussion of quality of the farmland tract, including soils classification. 3. Mention of the manner in which preservation will contribute to the agricultural productivity of the county. 4. The farmland ranking score, including a statement of the relative ranking of the farmland tract among other tracts considered by the county in the same round of applications. 5. Projection of the likelihood of conversion to other uses if the easement is not purchased. This should include discussion of the nature and scope of development pressure in the municipality or area. 6. Description of the nature and scope of conservation practices and best land management practices on the farm. 7. Discussion of the purchase price, summarizing the appraisal(s) and including mention of the agricultural and nonagricultural value of the farm and negotiations for purchase. 8. Certification by the County Board that the information presented to the State Board is true and correct. B. A legible United States Geological Survey (USGS) topographic map showing the location and boundaries of the subject property, the location and boundaries of neighboring easements, and any exclusions withheld from the subject property. C. A soils report (Form C provided by the PA Department of Agriculture). D. A list of soils on the subject property including their mapping unit names, symbols, and Land Capability Classes. E. A legible, uncolored, soil map of the subject property. -19-

26 F. A tax map showing the subject property location and boundaries, any exclusions withheld from the subject property, any utility rights-of-way, and any access road rights-of-way. G. A summary table showing the individual ranking scores by category for applications selected for county appraisal, including an indication of the easement purchase status of higher-ranking applicants. H. A copy of Exhibit B, the Statement of Costs from the Agreement of Sale, modified to include interest, total acres, and per acre easement cost. The 25 copies submitted shall be individually collated and three-hole punched, but not stapled. Other Required Documents In addition, the county must submit the following documents: A. The appraisal report or reports. B. The signed agreement of sale, including the following exhibits: Exhibit A: Proposed legal description. Exhibit B: Statement of costs prepared in accordance with Section 138e.69 of the State Regulations. Exhibit C: Proposed deed of agricultural conservation easement. Exhibit D: Contractor integrity clause. Exhibit E: Nondiscrimination/sexual harassment clause. Exhibit F: IRS form W-9 for each farm owner. C. The title insurance commitment. (The cost of such title insurance shall be a cost incidental to the easement purchase and payable or reimbursable from the county s allocation under the Act.) D. A letter certifying that all adjoining landowners were provided with notice and opportunity to be heard in a manner consistent with administrative agency law with respect to the proposed easement purchase, including one copy of the notification letter and a list of all adjoining landowners. E. A completed and signed IRS Form W-9, Request for Taxpayer Identification Number and Certification for individual grantors. F. A letter from the grantors stating the percent of ownership of each grantor for the purpose of issuing IRS Form G. A copy of the approved soil conservation plan that is required to be in place on the farmland. -20-

27 H. A copy of the nutrient management plan developed in accordance with the most current Nutrient Management Act if a nutrient management plan is required on the property. In accordance with Section 138e.70 of the State Regulations, the county may also be required to supply: A. A mortgage subordination, release, or letter from the mortgagee, lien holder, or owner of rights in surface mineable coal, approving the purchase of the conservation easement. Clear title is required in order to purchase an easement. If there is a mortgage on the property, the owner has the option of paying it off on or before closing, or asking the lender to subordinate the mortgage to the agricultural easement. With subordination, the mortgage would continue as before, but the lender agrees that the agricultural conservation easement has first position in the event of foreclosure. B. A copy of the application form. C. An evaluation of ranking worksheet. D. Other relevant documents and information. E. Survey or plot plan of property under easement. See detail in Section VII (B) below. VII. SETTLEMENT AND THE AGRICULTURAL EASEMENT DEED A. Upon approval of the purchase of a conservation easement, a real estate settlement will be held. At settlement the landowners will sign the agricultural easement deed. The deed shall include the provisions of Sections 138e.67 and 138e.241 of the State Regulations. B. A legal description of the exact area under easement is needed, in accordance with Section 138e.67 of the State Regulations. This may come from a recorded deed meeting the requirements of the Farmland Preservation Program, or in the event that the requirements are not met by the recorded deed(s), a field survey shall be conducted. The survey requirements will follow the provisions of Section 138e.73. The area to come under easement along a public road will extend to the legal right of way, not to the center of the road. The cost of preparing the legal description or the survey will be paid by the county. The deed shall be in recordable form and contain an accurate legal description setting forth the metes and bounds of the farmland tract subject to the easement. However, if the landowner intends to withhold property from the easement after the agreement of sale is signed, the cost of the new survey will be paid by the landowner. C. Grantees shall be those entities which provided funding, in the proportion that they provided the funding, as defined in the Act. D. When state funds are being used, the county shall submit a copy of the deed to the State Board for approval prior to execution and delivery. -21-

28 E. For purchases made entirely with county funds, the county shall be the sole grantee. F. For purchases made using a combination of state, county, and local municipality funds, the grantees shall be the commonwealth, the county, and the local municipality providing the funds under joint or multiple ownership as defined in the act. G. In the event that one application consists of more that one tax parcel, those parcels shall be consolidated under a Deed of Consolidation, if legally feasible as determined by the County Farm Board. All parcels in one application must have the same owner. The Deed of Consolidation will be recorded at or prior to settlement on the agricultural easement. Fees for preparing the Deed of Consolidation will be paid by the county, provided the easement goes to settlement. -22-

29 RESPONSIBILITY OF OWNER Once the easement is in place, it will be the responsibility of the owner of the farmland tract to comply with the requirements of Chapter 138e.241 the State Regulations regarding permitted and required acts, including maintaining a soil conservation plan, the construction of buildings, and part-time or off-season activities listed on Page 27. Activities listed on Page 27 are permitted, but are not to be considered the primary farming activity on the land. The following requirements are set forth in rules & regulations Section 138e , in the deed of easement, in the agreement of sale, and in Appendix F (subdivision guidelines) of this county program. ONE PERMITTED RESIDENTIAL STRUCTURE Before the one permitted residential structure is built, the owner must first receive approval from the County Farm Board for the location of the structure. The County Board will consider the location of the one permitted residential structure based primarily on the economic viability of the land for agriculture. The landowner must first determine whether the municipality requires subdivision in order to build the additional house. If subdivision is required, the Montgomery County Farmland Preservation Subdivision Guidelines shall be followed, as found in Appendix F of this program book. If subdivision is not required, the landowner must submit an application to the Montgomery County Farm Board for location of the one permitted house. This can be done concurrently with any municipal permit applications. The County Board will review the application and approve or disapprove it based upon the impact of the proposed house on the economic viability of the land for agriculture. The proposed house must have as minimal an impact as possible, based on the following criteria: The curtilage shall not exceed two acres, and shall leave the greater of at least 10 acres or 50% of the preserved farmland in cropland, pasture, and/or grazing land. The house is placed on a less productive part of the farm, with poorer agricultural soils. The house location has a minimal effect on agricultural production. Generally, the house should be located on the edge of a field, next to natural features, behind existing buildings, or in corners of the property in order to limit the impact on the efficiency of the farming operation. The house location does not hinder future owners of the property by creating awkwardly shaped farm fields. The house location does not adversely impact soil conservation practices. Municipal guidelines must be followed and are not superseded by farmland preservation guidelines. -23-

30 An application form will be provided to the landowner upon request. The following will be required: A map or sketch of the property s roadways, existing buildings, pertinent features of the farm, and the location of the proposed house. An aerial photo of the property, indicating the property boundary and the location of the proposed house The applicant s name & contact information, and the parcel s tax ID number & deed reference. Written description of who will occupy the house, how the economic viability of the land for farming will be impacted, impact on water rights and water access, and the impact of the house on the farm business. The County Board will review the application and make a decision for or against approval based upon the continued economic viability of the land for agriculture. It will be based upon factors such as the location of the house in relation to productive land, with a preference given to house placement in the least productive part of the farm. The same guidelines which apply to subdivision for the purpose of building one house will be considered in the application to site the house when subdivision is not required. SUBDIVISION Subdivision of eased farms will not be permitted unless the subdivision meets the criteria outlined in Appendix F. When a landowner wishes to subdivide a farm property which is under agricultural conservation easement, the County Farm Board must first determine whether the land will remain economically viable for agriculture after subdivision. To subdivide a farm into smaller farms, or to subdivide off the one building lot, a landowner completes a subdivision application form and submits it to the County Agricultural Land Preservation Board. To obtain a subdivision application form, contact the Montgomery County Farmland Preservation office. CHANGE OF OWNERSHIP If the eased farm is sold, conveyed, or transferred to another person: 1. The deed conveying an interest in the restricted land shall set forth the language of the easement restriction, items 1 to 13, word for word. An electronic copy of this language is available upon request. 2. Within 30 days of a change in ownership of the restricted land, the prior owner shall notify the County Farm Board and the Pennsylvania Department of Agriculture of the name and address of the new owner, the price per acre or portion thereof received for the eased land, and the volume and page in which the transfer has been recorded by the County Recorder of Deeds. -24-

31 ROADSIDE SIGNS ON PRESERVED FARMS The Farm Board requires a roadside sign on each farm preserved after September The sign states that the farm is preserved by the Montgomery County Farmland Preservation Program. There is no cost to the landowner for the sign. The sign will be placed near the road, to be seen by those passing the farm. Owners with frontage on more than one road may request one sign on each road. The farm owner owns the sign, and is responsible for its maintenance. The location of the sign will be determined in consultation with the farm owner, the municipality, and the Farm Board staff. Farms preserved before September 2007 are also encouraged to display a roadside sign. USE OF PRESERVED FARMS Preserved farms shall continue to be farmed, in accordance with the Permitted Acts listed in the Deed of Agricultural Easement; shall have 50% of the preserved farm as harvested cropland, pasture, grazing land, other land actively used for agricultural production, or commercial equine activity; and shall contain at least 10 acres of harvested cropland, pasture, grazing land, other land actively used for agricultural production, or commercial equine activity. Preserved farms shall not accept large amounts of non-agricultural fill on the land without getting approvals from the Montgomery County Conservation District and the County Agricultural Land Preservation Board. Preserved farms may not be used to discard non-agricultural waste, such as municipal waste and hazardous waste. This would include but not be limited to farm machinery and implement parts, agricultural plastics (e.g., silage bags, coveralls, hoop house and greenhouse materials), appliances, construction & demolition refuse as noted above, auto parts, excess fuels, excess herbicides and other pesticides. Preserved farms, if used for long-term storage of sewage or other organic waste products, must follow all applicable state regulations. Preserved Farms must be compliant with Title 25 - Environmental Protection, specifically Chapter Erosion and Sediment Control And Stormwater Management, and Chapter 91 General Provisions; under authority of The Clean Streams Law. This includes any land plowed or tilled, plus Animal Heavy Use Areas (AHUAs) and Manure Management Plans. -25-

32 -26-

33 PART-TIME OR OFF-SEASON ACTIVITIES Pursuant to State Regulations Section 138e.241, the County Board intends that agricultural conservation easements shall not prevent customary part-time or offseason minor or rural enterprises and activities. Items listed here are in addition to the main farm enterprise, and are not intended to substitute for the required agricultural production or a commercial equine activity. This section shall apply to all preserved farms in the county program, with any changes or additions applying to all preserved farms at the time of publication of this program book. For purposes of definition, these are limited to the following: A. The direct sale to the public of agricultural products produced principally on the farm, provided that at least 50 percent of such products (measured by income from product sales) are produced by the farm operator. B. The construction of any and all structures contributing to the production, primary processing, direct marketing, and storage of agricultural products produced principally on the farm. C. The construction of structures associated with the production of energy from renewable sources for use principally (at least 50% per year) on the farm including wind, solar, hydroelectric, geothermal, methane, wood, and alcohol fuel systems, and structures and facilities for the storage and treatment of animal wastes. These activities shall be called energy rural enterprises for this program. The landowner must comply with all of the following: 1) The energy rural enterprises remain incidental to the agricultural use and character of the farm. 2) Energy generated by energy rural enterprises shall be available for use on the farm. 3) The retail sale of excess energy generated by energy rural enterprises is permitted. 4) The construction of any permanent equipment or structures associated with the production of energy shall be located within the curtilage of existing farm buildings. 5) The total site coverage of all energy rural enterprise on the property, including all parking, loading or other areas necessary for the energy rural enterprises shall be limited to two percent of the area of the property. D. Structures and facilities associated with irrigation, farm pond improvements, and soil and water conservation practices including but not limited to Wetland Development or Restoration, Wildlife Wetland Habitat Management, Wildlife Upland Habitat Management and Riparian Forest Buffer Resource Management Systems used for erosion and sediment control and/or water quality improvement. E. The provision of services or production and sale, by persons in residence, of incidental agricultural goods, services, supplies, and repairs, and/or the conduct of traditional trades, and the production and sale of home occupation goods, or arts and crafts, so long as these uses remain incidental to the agricultural and open space character of the farm and are limited to occupying residential and/or -27-

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