SD8 - Long-Term Funding Sources for the Purchase of Development Rights to Preserve Open-Space Land and Farmlands


    Executive Summary:
    [The Executive Summary was replaced, in its entirety, by the Division of Legislative Services on May 8, 2008.]

    Joint Subcommittee Studying Long-Term Funding Sources for the Purchase of Development Rights to Preserve Open-Space Land and Farmlands (SJR 94/HJR 133 - 2006); (SJR 401/HJR 692 – 2007)

    During the 2007 Session of the General Assembly, the General Assembly passed SJR 401 and HJR 692. The Senate and House resolutions continued for an additional year the 2006 joint subcommittee studying funding sources for purchase of development rights programs to preserve open-space land and farmlands. The 2007 resolutions also directed the joint subcommittee to expand the scope of its study to include funding for additional parks to serve Northern Virginia.

    Senator Emmett W. Hanger served as chairman of the joint subcommittee, and Delegate Edward T. Scott (2007) and Delegate Lynwood W. Lewis, Jr. (2006) served as vice-chairmen of the joint subcommittee. Other members of the subcommittee were Senators John Watkins and Mark R. Herring and Delegates Robert D. Orrock, Sr., Thomas C. Wright, Jr., Benjamin L. Cline, Lynwood W. Lewis, Jr., and Albert C. Eisenberg. The joint subcommittee met four times during 2007 and three times during 2006.

    The joint subcommittee was instructed to review (i) recent funding for the preservation of open-space and other conservation land; (ii) the future needs of the Commonwealth for open-space and other conservation land; (iii) the mix of programs best suited to meet such needs; (iv) the cost of such needs; (v) long-term funding to pay the costs; and (vi) strategies for increasing land preservation, water supply protection, and the availability of large parks to serve Northern Virginia.

    In furtherance of the resolutions' aims, the joint subcommittee reviewed the progress that has been made in preserving 20 percent of the Commonwealth’s portion of the Chesapeake Bay watershed by January 1, 2010, which was an objective set forth under the Chesapeake 2000 Agreement. It was estimated that it would cost an additional $167.4 to $278.9 million to reach the 20 percent goal. This was the estimated cost of preserving an additional 232,565 acres. The Department of Conservation and Recreation reported that a total of 359,931 acres need to be preserved by 2010 in order to meet the 20 percent goal. Staff estimated that 127,366 acres could be expected to be preserved under existing tax credit programs and general fund appropriations, leaving a balance of 232,565 acres to be preserved.

    The joint subcommittee was apprised of the lack of parklands in Northern Virginia. Using 10 acres per 1,000 persons as a measure for parkland sufficiency, projections by the Northern Virginia Regional Park Authority show that by 2010 there will be a shortfall of 19,420 acres in Planning District 8 under this standard.

    The joint subcommittee was also informed that $4.25 million in state matching funds for local purchase of development rights programs has been made available in the 2006-2008 biennium. Matching funds are distributed equally amongst certified purchase of development rights programs with a required match of $1 for each $1 received in state funds.

    The joint subcommittee received testimony from persons and groups interested in land conservation. One common theme was the support for a three-pronged approach to preserve land: appropriations to the Virginia Land Conservation Foundation for land preservation, a state and local partnership to make funds available for local purchase of development rights programs, and continued use of the Virginia land preservation tax credit. In this regard, the joint subcommittee was asked to support funding of local purchase of development rights programs at a level of $30 million in state funds per year over the next 10 years, or a total of $300 million. Additionally, the joint subcommittee was asked to support funding to the Virginia Land Conservation Foundation at the same level, $30 million in state funds per year over the next 10 years.

    Alternatives for the funding of land preservation and parklands were presented to the joint subcommittee. Options for dedicating existing revenue sources and new sources of revenues were reviewed. State recordation, insurance license premium, and sales taxes were discussed as potential sources of existing revenue that could be dedicated for the funding of land preservation and parklands. An additional option for funding would be to capture the unsubscribed or unallocated portion of the $100 million in tax credits set aside on an annual basis under the land preservation tax credit program. Specifically, in regard to funding for parklands, the joint subcommittee was asked to consider (i) a higher land preservation tax credit (60% in lieu of the current 40%) for land donations, such as parks, that grant public access, and (ii) authorizing local water and sewer authorities to charge a “watershed protection” fee or premium, the proceeds of which could be used to acquire parks abutting public drinking water sources. Finally, tipping fees for the disposal of municipal solid waste and surcharges on homeowner, farmowner, and commercial multi-peril insurance policies were two options for new revenue that were discussed.

    The joint subcommittee formally agreed to the following recommendations:

    1. The Virginia Resources Authority should be authorized to issue bonds and other debt to provide funds for the acquisition of parks and parks facilities. This recommendation was enacted into law by the 2008 Session of the General Assembly (SB 473, Senator Hanger; HB 723, Delegate Scott).

    2. Grants provided by the Commonwealth to fund local purchase of development rights programs should require a $1 for $1 match from the recipient local governments. However, those localities that rely heavily on use value assessment should be provided a “credit” against the local matching funds required, which would reduce the $1 match required from such localities to something less than $1. Localities that rely heavily on use value assessment should encompass those localities with 70% or less of the total fair market value of all land in the locality taxed, because of use value assessment. This recommendation was adopted with modifications by the 2008 Session of the General Assembly (SB 477, Senator Hanger).

    The joint subcommittee does not intend to submit to the General Assembly and the Governor a report of its findings and recommendations for publication as a House or Senate document. This executive summary is in lieu of such report.

    The joint subcommittee's Internet web page can be found at: http://dls.state.va.us/land.htm.