By Blair Fitzsimons, CEO
On June 25th, the House Natural Resources Committee will hear testimony on the Texas Farm & Ranch Lands Conservation Program (TFRLCP) and its role in conserving water resources. Created by the Legislature in 2005 and housed today at the General Land Office, TFRLCP is a state program that makes grants to non-profit land trusts to buy conservation easements from willing landowners. This type of transaction is commonly known as a “Purchase of Development Rights,” or PDR.
Public Benefits of Private Land Conservation
A broad coalition of agricultural organizations and conservation groups supported the creation of TFCLP back in 2005 for the simple reason that, if done right, the conservation easement can be a win-win for private landowners and for the public, for rural and for urban dwellers, for agriculture and for municipal interests. Easement programs have been used in other states with great success. New York City, for example, avoided the need for a $6 billion water filtration plant by buying conservation easements from dairy farmers in the highland lakes district. In Dakota County, MN, the purchase of conservation easements from farmers helps to protect the source of drinking water for the Twin Cities. And closer to home, sales tax proceeds fund the purchase of conservation easements west of San Antonio in order to protect recharge zones over the Edwards Aquifer, the city’s sole source of drinking water.
For the public and municipal interests, the conservation easement likewise holds value. Private lands provide essential public benefits, such as food, fiber, and drinking water. A conservation easement ensures that these benefits will be protected at a fraction of the cost of buying land outright. For cities looking to provide water for future populations or corporations concerned about having ample water to meet operational needs, the conservation easement can provide a low-cost alternative to acquiring a fee simple interest in land.
Purchase of Development Rights (PDR) Helps Conserve Ag Land
For landowners, the conservation easement enables those who never intend to sell for development to monetize the land’s market value. The conservation easement restricts all commercial development and essentially ties the value of the land to its agricultural or open space value. In the case of the Texas Farm & Ranch Lands Conservation Program, the landowner is paid for this development value (which can be characterized as the difference between market and ag value).
This reduction in value also has estate tax benefits. A farm or ranch is often a family’s primary asset. With today’s tax rates, many families are forced to sell all or a portion of the property just to pay Uncle Sam. If a family’s goal is to transfer the property to the next generation so that they can keep farming or ranching, the conservation easement – by lowering the appraised value of the property – can help facilitate that transfer.
The Texas Farm & Ranch Lands Conservation Program
The Texas Farm & Ranch Lands Conservation Program has been slow to ramp up. Nine years since its enactment, the program has yet to receive a legislative appropriation (It has used some federal funds for grants in coastal counties.) This is largely due to the fact that the conservation easement in general has been slow to gain acceptance in the farming, ranching and hunting communities, primarily because it was used in the past as a tool for environmental rather than working lands protection. With the advent of TFRLCP in 2005, and my organization, the Texas Agricultural Land Trust in 2007, the dialogue changed. Landowners began to realize that a conservation easement doesn’t have to interfere with agricultural operations; that like all real estate transactions, it is negotiated; and that it can work with oil and gas development.
Conservation Easements Can be a Win-Win Solution
In spite of this progress, many landowners still have concerns about conservation easements, especially with the fact that the restrictions are perpetual. The bottom line is that it is up to the landowner to decide whether a conservation easement works for his or her family. Our job as the conservation and policy community is to ensure that landowners have the opportunity to exercise this right, that programs like the Texas Farm & Ranch Lands Conservation Program do meet the needs of working farms and ranches.
With a burgeoning population, our state faces enormous water and other natural resource challenges. We need programs that incentivize the conservation of our natural resources while enabling families to keep working the land. The conservation easement not only does that, but also helps satisfy the urban and corporate interests. It truly is a win-win solution. And the Texas Farm & Ranch Lands Conservation Program, with a viable source of funding, can help to ensure open space and vibrant natural resources for future generations of Texans.
Blair Fitzsimons is CEO of the Texas Agricultural Land Trust, found in 2007 by leaders from Texas & Southwestern Cattle Raisers, Texas Farm Bureau and Texas Wildlife Association. www.txaglandtrust.org