Howard County, Maryland


Despite collecting $3 million annually in transfer taxes for farmland preservation, Howard County was unable in 1989 to convince its farmers to take cash for development easements on their farmland. Farmers resisted because capital gains tax would consume a significant portion of the sale price. Pat O'Connell devised a program that purchased easements through installment-purchase agreements paying tax-exempt interest for 30 years and principal primarily as a balloon at the end of the period. The program offered farmers tax-exempt interest at attractive rates, deferral of capital gains on the balloon purchase price, liquidity through sale of COPs and charitable deductions. As a result of this program, Howard County has purchased easements worth more than $100 million on 9,600 acres in 89 separate agreements for $56 million. The Government Finance Officers Association gave the program its Award for Excellence in Financial Management.

Reference:
Ms. Joy Levy
Administrator
Agricultural Land Preservation Program
Howard County Department of Planning and Zoning
8401 West Grove Road
Ellicott City, Maryland 21043
T: (410) 313-2350
e-mail: