RD10 - 2007 and 2008 Biennial Report of the Virginia Land Conservation Foundation (With Calendar Year 2007 Land Preservation Tax Credit Conservation Value Summary)


Executive Summary:
The Virginia Land Conservation Foundation (Foundation) serves an important land conservation mission in the Commonwealth. It leverages limited state funds through matching grants and partnerships to protect working farms and forests, historic lands, open space and parks, and natural areas. The Foundation’s distinctive features include requirements for public utilization and access on most properties conserved with Foundation monies, cross-cutting grant review criteria to maximize conservation values of funded projects, an inter-agency staff review team that involves expertise from multiple state agencies, and a final review by a unique Board of Trustees whose membership includes appointees from the Governor, Speaker of the House of Delegates, and the Senate of Virginia.

The Virginia Land Preservation Tax Credit (LPTC) Program has proven to be a valuable incentive for landowners interested in voluntarily conserving their property through perpetual conservation easements or fee-simple donations. The LPTC’s transferability feature is especially important to persons with little or no state income tax liability. Responsibilities for oversight of the program are shared by the Virginia Department of Taxation and the Department of Conservation and Recreation.

Virginia Land Conservation Foundation

Since its inception in 1992, the Foundation has experienced a name change from the Virginia Conservation and Recreation Foundation to the Virginia Land Conservation Foundation, a significant expansion and improvement to its Code authority, and has sustained a successful grants program. In 2000, the Foundation’s Board of Trustees grew from 9 members to 18 members. In 2006, the Secretary of Agriculture and Forestry also was added to the Board.

Total funds appropriated to the Foundation have exceeded $40.5 million since FY2000 (see Table 1 in full report). Of this amount, approximately $26.3 million has been allocated to VLCF matching grant program with an additional $4.3 million pending distribution at a January 2009 Board meeting. An additional $8.8 million has been allocated to the Virginia Outdoors Foundation in accordance with state law.

Since first receiving funding in FY2000, the Foundation has held five grant rounds with a sixth scheduled for January 7, 2009. As part of the six grant rounds, the Foundation received 189 applications requesting approximately $87.4 million in state funding, or twice the available amount (see Table 2 in full report). To date, the Foundation in the first five rounds awarded funding to 84 of the 189 grant projects and contributed over $26 million to land conservation projects and helped protect over 30,000 acres.

The Foundation has also met its charge to develop a strategic plan for the expenditure of moneys received from the Fund. The strategic plan governing fiscal expenditures has been incorporated into successive VLCF grant manuals, beginning in 1999 and has been updated regularly. The most recent revision of the grant manual was undertaken in November 2007, when the Virginia Land Conservation Foundation Board voted to adjust project scoring in order to fund more worthy projects in densely populated areas of the Commonwealth and to integrate increased emphasis on public access in consideration of grant projects. The grant manual may be found at http://www.dcr.virginia.gov/virginia_land_conservation_foundation/ with the scoring criteria outlined in Table 17 and the accompanying discussion.

The Foundation, if properly funded, will continue to be one of the primary tools through which Virginia will achieve its conservation targets, especially the Chesapeake Bay 2010 goal and the Governor’s 400,000-acre preservation goal by 2010. The multi-state Chesapeake Bay commitment aims to permanently preserve from development 20 percent of the land in the watershed by 2010, while Governor Kaine’s 400,000 acre goal represents a nearly doubling of effort annually.

The Virginia Land Conservation Foundation also serves as a coordinating mechanism for bringing together a number of state agencies’ land conservation efforts and priorities. A coordinating agency task force made up of the Director of the Department of Conservation and Recreation, the Commissioner of Agriculture and Consumer Services, the State Forester, the Director of the Department of Historic Resources, the Director of the Department of Game and Inland Fisheries and the Executive Director of the Virginia Outdoors Foundation, or their designees, provide the VLCF Board with assistance on such matters as grant criteria, grant priorities, and grant selection. The Virginia Department of Conservation and Recreation serves as the lead staff for the Foundation.

The Virginia Department of Conservation and Recreation’s Office of Land Conservation serves as a statewide, central contact, repository, and clearinghouse for land conservation in Virginia. During Foundation grant rounds, this Office serves as an important source of information for potential Foundation grant applicants and acts as the grant manager for projects funded. The Office’s website ( http://www.dcr.virginia.gov/land_conservation/) , which was reorganized in 2007, includes a wide variety of land conservation materials and contact information that assists landowners, conservation organizations, and managers with their conservation planning. In addition, the website provides a link to the state’s first comprehensive statewide public lands resource mapping tool which was developed by the Department of Conservation and Recreation. This important land conservation planning tool is regularly updated and is accessible at http://www.dcr.virginia.gov/land_conservation/tools02a.shtml.

The Department of Conservation and Recreation also has developed other databases that assist in the Foundation’s work. For example, the Department’s Natural Heritage “Conservation Sites Database” is based upon more than 20 years of data collection and is Virginia’s most comprehensive information management system on rare, threatened and endangered plants and animals and their natural habitats. DCR also has produced several statewide tools such as the Conservation Lands Database (which provides a dynamic parcel-level tracking tool for all conservation lands in the Commonwealth) and the Virginia Conservation Lands Needs Assessment (which provides statewide models to display lands ranked in conservation importance based on their recreational, cultural, agricultural, forest economics and watershed integrity assets). These tools, as well as others described below, are utilized to help assess grant applications submitted to the Foundation for funding consideration.

The 2007 version of the Virginia Outdoors Plan was expanded to substantially meet the requirements of the Foundation’s comprehensive plan as required under § 10.1-1021 of the Code of Virginia. The Virginia Outdoors Plan, prepared by the Department of Conservation and Recreation every five years, is the state’s official plan for the protection and conservation of Virginia’s important natural, outdoor recreational and open space resources. The 2007 Virginia Outdoors Plan has been nationally recognized for its content. The Outdoors Plan is based on a complete inventory of all publicly held park and open space land. This inventory includes state-owned lands and lands held by federal agencies and localities. This inventory of existing lands and facilities serves as a basis for the needs assessment. In addition to its analysis of existing conditions statewide, the Virginia Outdoors Plan also provides recommendations for each of the State’s Planning Districts in meeting outdoor recreation, conservation, and open space needs. Key areas necessary to protect the Commonwealth’s natural, scenic, open space and cultural resources are identified. Additionally, the Department of Conservation and Recreation has developed a Natural Heritage Plan. This plan identifies key habitats for rare species and significant natural communities that merit preservation.

Land Preservation Tax Credit Program

Virginia’s Land Preservation Tax Credit Program has continued to excel and to advance the preservation of important lands across the Commonwealth. The Virginia Department of Taxation’s records indicate that as of December 15, 2008, 399,078 acres, appraised at slightly over $1.9 billion, had been protected through 1,952 donations represented by $907.2 million in tax credits.

The Department of Conservation and Recreation’s (DCR) review of Land Preservation Tax Credits (LPTC), begun in January of 2007, has served as an important tool utilized by the Commonwealth to ensure that the lands protected for which a tax credit is issued of $1 million or more are worthy of protection and that the natural and historical resources they contain are adequately protected in perpetuity. The tax credit report contained herein summarizes the donations made between January 1, 2007 and December 31, 2007, for which a taxpayer has requested a Land Preservation Tax Credit, within the $100 million cap established by §58.1-512.D.4.a of the Code of Virginia. Based on the information provided to DCR, 254 applications were filed for the $100 million in tax credits available in 2007. The appraised value of these properties was approximately $250 million. These 254 applications requested LPTC for easements and donations on 59,331 total acres, which means that 76% of the total acres protected in 2007 (easement or fee-simple) received a tax credit. Clearly, the LPTC is an important incentive if Virginia is to reach its land conservation goals.

Taxpayers in 62 localities claimed a LPTC in calendar year 2007. The largest number of donations and acreage preserved was in Rockbridge County and the largest amount of tax credit dollars was requested by Loudoun County applicants.

Of the eight conservation purposes that a landowner can apply under, approximately 25% or 38,676 acres were in the Scenic Open Space category. Forestal Use (26,715 acres) and Agricultural Use (25,423 acres) were also prominent categories as each represents approximately 17% of the total. The remaining purposes in rank order were Watershed Preservation, Natural Habitat and Biological Diversity, Lands Designated by a Local Government, Historic Preservation, and Natural Resource Based Outdoor Education and Recreation. Applications may claim more than one conservation purpose, even though it is not necessary in order to request the LPTC.

In addition to the responsibility to prepare an annual report, DCR was also charged beginning in 2007 with conducting reviews of the Conservation Value of LPTC requests of $1 million or more (based on a 40% credit for a donation valued at $2.5 million or greater) and with verifying the conservation value of these donations in advance of the Virginia Department of Taxation issuing the tax credit. This review is in accordance with criteria adopted by the Virginia Land Conservation Foundation for this purpose.

In 2007, DCR reviewed and commented on the conservation value associated with 18 of the 254 LPTC applications. Of the 18 reviews, 14 final applications were filed requesting over $28 million in LPTC for 5,638 acres. Three other final applications were filed in early 2008 and therefore eligible to receive LPTC in calendar year 2008. In addition, one applicant chose not to undertake the pre-filing review and submitted a final application, for a total of 15 donations. These 15 donations represented nearly 6% of total applications and 9.5% of the LPTC acres preserved, but over 28% of the total LPTC credits claimed in 2007.

DCR’s oversight proved to be beneficial in the Commonwealth’s efforts to ensure the conservation value of properties applying for the LPTC. DCR’s review process resolved a number of problems with applications that would have negatively affected the donation’s conservation value if the applicant had completed as submitted. In addition, DCR’s review helped to ensure that persons eligible for $1 million or more in state land preservation tax credits also addressed water quality and forest stewardship issues associated with their conserved lands. Although state law allows DCR 90 days to complete its review, DCR took only 20 business days on average to review a pre-filing application (including a site visit) and 8 business days to verify the conservation value of final applications.

In summary, the Virginia Land Conservation Foundation Program and the LPTC are critical elements in meeting the Commonwealth’s conservation commitments.