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Purchase of Development Rights (PDR)
The PDR Program in Hunterdon County has been offered to landowners for the past 15 years. It was developed in accordance with the enabling legislation - the State Agriculture Retention and Development Act of 1983. The program involves the sell of development rights on a farm in exchange for a permanent restriction on the land that requires it to be available for agriculture in perpetuity. Hunterdon County has been a leader statewide in this program in terms of the number of farms and acreage preserved. Funding for the PDR program had been severely limited until recently resulting in a competitive program statewide. Now, with the passage of the Garden State Trust Fund, a stable source of funding for open space and farmland preservation programs, the program continues to be popular but the competition is not as severe. PDR applications are reviewed on an annual basis, unless otherwise noted. Application forms for the 2008 Round are now available at: www.co.hunterdon.nj.us/cadb/apps.htm.
The minimum eligibility requirements for the PDR program is that the farm is located in an Agricultural Development Area (ADA) and an agricultural district, is a minimum of 40 acres and is predominantly tillable farmland - farms with more than 50% woodlands are ineligible.
What is an Agricultural Development Area?
Agricultural Development Areas (ADA) are land areas identified by the County Agriculture Development Board where agricultural operations are likely to continue in the future and therefore be eligible for the farmland preservation program. The delineation of ADAs is a State requirement to receive funding for the farmland preservation program. In Hunterdon County, the ADA criteria and map were based on a study of agriculture in the County prepared by the Middlesex-Somerset-Mercer Regional Study Council. Key components of the study were the mapping of productive agricultural operations and the location of prime and statewide important soils. Based upon the study, the CADB adopted criteria for the designation of ADAs and mapped them along physical boundaries or property lines. A copy of the ADA map is available from the CADB office.
What is an agricultural district?
n agricultural district is an area of farms that have either enrolled or have applied to the farmland preservation program and are located within 1 mile of each other. The minimum size of a district is 250 acres. The purpose of the districting is to encourage the preservation of a core area, or "critical mass", of farms, rather than isolated farms throughout the County.
What is a development easement?
A development easement is a property owner's legal right to develop a piece of land for non-agricultural purposes. If the development easement, or development "rights", are sold the land cannot be developed for any purpose other than what is specifically permitted by the easement restrictions.
How does a person apply to this program?
The Hunterdon County Agriculture Development Board (CADB) accepts applications on an annual basis pending the availability of State and County funds. The application period is typically open from January 1st of each year to the end of February.
Is this a County or State program?
It is a State program that requires municipal, County and State approvals, but the program is administered locally by the CADB. The initial selection of applications is made by the County and final approvals are sought from the municipality and the State.
How are the applications evaluated?
Applications are evaluated by both the CADB and the SADC using adopted easement purchase criteria. Both County and State criteria emphasize the quality of soils, the municipality's commitment to agriculture and the proximity of the farm to other farms enrolled in the farmland preservation program. If the farm adjoins another preserved farm, there is no minimum farm size for an application, otherwise the minimum size is 40 acres.
How long does the application process take?
Applicants will know if they have been selected by the CADB within 4 to 6 months from the date of the application. The farm is then appraised for its development easement value and final approval is granted by the municipality, County and State the following year. The entire process takes about 24 months.
How is a farm restricted after the development easement has been sold?
The deed of easement sets forth the specific restrictions on the farm. In general, the farm must either be actively farmed or regularly mowed so that it can be farmed at any given time. Non-agricultural uses are not permitted unless approved prior to the preservation of the farms.
Is the land still privately owned after the development easement is sold?
Yes. The land remains privately owned and can be sold to anyone after it is preserved subject to the easement restrictions. The land remains on the tax rolls and does not become open to the public at any time.
How much money is offered for the easement?
The value of the easement is the difference between the appraised "market" value of the farm and the value of the farm deed-restricted under this program. For example, if a farm is worth $8,000 per acre to a developer, and, based on comparable sales, the farm has been determined to be valued at $3,000 per acre after it is deed-restricted, the value of the development easement would be $5,000 per acre. The value is determined by the State Agriculture Development Committee (SADC) based upon two independent appraisal reports.
It is a competitive process?
Nearly 100 PDR applications are reviewed every year by the County. There is currently funding available for approximately 20-30% of the applications. Applications are ranked and the top scoring applications are selected for approval. (See "How are applications evaluated?")
How are the applications funded?
Applications are cost-shared by the State, County and municipality. The State typically funds up to 70% of applications using monies from the recently passed Garden State Trust Fund. The local share is typically split by the County and the municipality equally using government bonds, dedicated taxes and/or other sources of funding.
Eight Year Program (MAFPP) Top ^
Officially known as the Municipally Approved Farmland Preservation Program,
the Eight Year Program is a voluntary program where landowners agree to deed-restrict their farms solely to agricultural use for a period of eight years. Landowners, in turn, are eligible for matching grants for soil and water conservation projects and additional protection from eminent domain and energy and water restrictions. There is no minimum farm size for this program. Eight year programs are a good way for municipalities to begin new agricultural districts because there is virtually no competition and it is relatively easy to enroll. Eight year programs also benefit purchase of development rights (PDR) applications because a PDR application will score higher if it is within 1/2 mile of an eight year program.
Fee Simple Top ^
Fee simple literally means the entire rights to a piece of property. Therefore, the fee simple program involves the sale of the entire farm to either the County or State. While the County may purchase farms fee simple on a limited basis, the SADC has a much larger budget for this program. The application must meet the basic requirements of the PDR program. The application process typically takes 6-12 months. After the farm is acquired by the SADC, it is deed-restricted in perpetuity and sold at auction to the highest bidder. The County may or may not deed-restrict land after it is acquired.
Direct Easement and Emergency Easement Purchase Programs Top ^
Both of these programs involve the sale of development rights to the SADC. The emergency easement purchase is offered only under certain conditions, such as a qualifying personal or business emergency. The funding for both programs is limited. Applications are accepted throughout the year.
Planning Incentive Grant (PIG) Top ^
The Planning Incentive Grant (PIG) program is a new tool that is available to municipalities and counties to preserve large areas of farmland. The PIG program seeks to preserve reasonably contiguous farms, preferably funded using innovative financial strategies, including installment payment, option agreements, donations, and bargain sales. The Planning Incentive Grant program provides for the possibility of nearly instantaneous stabilization of an agricultural district. This key aspect of PIGs should make the program particularly attractive to municipalities that are fortunate enough to still retain significantly large concentrations of farmland.
The PIG program is administered by the State Agriculture Development Committee (SADC). Funding is available through the Garden State Preservation Trust. If PIG applications require County funding, the application must first be approved by the County Agriculture Development Board. If County funding is not sought, applications must be sent directly to the SADC.
There are four requirements that must be met before a municipality or county can submit a PIG application. These are:
- Identification of a reasonably contiguous project area
- A dedicated source of funding, or a history of repeated bonding or alternative funding
- A mayorally appointed Agricultural Advisory Committee
- An adopted Farmland Preservation Element of the municipal master plan (or County Comprehensive Farmland Preservation Plan)
The Farmland Preservation Plan Element
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The foundation of a PIG grant is a farmland preservation plan element . The element is an adopted component of the municipal master plan (or CADB plan for the County) that reviews the status of agriculture in the municipality, the past and future goals of farmland preservation and identifies specific project areas. The farmland preservation plan should provide the agricultural history of the area, an overview of local ordinances and policies that support or discourage agriculture, perceived threats to the local agricultural community, and suggested steps and programs to minimize any of these problems and help bolster the agricultural industry. The plan must also include an inventory of all farm parcels in the township, regardless of their status in the preservation effort.
Criteria and Ranking of PIG applications
The PIG program was designed specifically to preserve multiple farms in a single application. The farms are therefore not reviewed individually in the manner that easement purchase applications are reviewed in the PDR program. Reviewing the applications individually would impair the ability to preserve the aggregate of farms, undermining the intent of the program. The SADC applies criteria similar to the PDR program to the entire PIG application - the combination of farms. The County's review of the application is limited to the average farm size, the location of the application with regard to designated Agricultural Development Areas, and available funding
The SADC and the Hunterdon CADB both give preference to applications that seek a long-term payout plan. Multiple year payment plans and creative financing will spread the total cost over a period of time at today's prices, freeing up funding for other applications. While the SADC and municipalities are able to establish yearly payout plans, the SADC still requires annual appropriations from the legislature since no legislature can bind future legislatures. In the event that it becomes evident that the demand for County PIG funds will exceed the amount allocated that year for the PIG program, the County and/or State must rank the farms within each PIG application.
The PIG program is primarily administered by the SADC. While there are no formal application forms for the program, the required elements outlined in the program rules and legislation must be provided. As a new and innovative program, the PIG program can successfully preserve large blocks of farmland within a short time period. Therefore, although rules and policies continued to be developed, municipalities and landowners are encouraged to take advantage of this program now as funding currently exists. CADB staff is available to answer questions and assist in the development of a successful application.
Provided by email@example.com on December 20 , 2005.