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County invigorated the Program by removing the purchase price
limitation and by adopting a new financing mechanism involving
installment purchase agreements. The installment purchase
agreements were to have a term of approximately 30 years, which
the county believed allowed it to leverage its accumulated funds
over an extended period. The county’s obligation to make
installment payments was described by the county as a general
obligation of the county. The county advised interested
landowners that potential benefits of a sale to the county
included tax-exempt interest on the installment obligation, the
deferral of taxes on capital gains, and a charitable contribution
deduction.
Although, after 1988, Howard County was not limited by law
in what it could pay for development rights, the county initially
adopted a policy of paying no more than $6,500 an acre (later
increased to $6,600) (the limitation). The maximum price was
paid for the best qualified farmland as determined by a formula
adopted by the county, and lesser amounts were paid for lesser
qualified farmland. The limitation was adopted as a budgetary
constraint because the county had limited funds to purchase
development rights to the 20,000 to 30,000 acres it wished to
encumber. Given Howard County’s knowledge of the value of
farmland in the county, the limitation was fixed so as to produce
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Last modified: May 25, 2011