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and end of the inquiry into the fair market value of the
easement, notwithstanding evidence to support a finding that
sales of development rights in Howard County occur in an
inhibited market. Respondent, thus, seeks to preclude
petitioners from using appraisal evidence to establish a greater
value. We believe that respondent's interpretation of the
regulation is misguided.
The first substantive sentence of the PCR valuation
regulation, see supra sec. II., establishes the general rule that
the value of the contribution under section 170 of a perpetual
conservation restriction is the fair market value of the
restriction at the time of contribution. When there is evidence
to support a finding that marketplace sales of such restrictions
are unreliable, blind application of the second substantive
sentence, which provides a method for determining the amount
required by the rule of the first substantive sentence, would
ignore the purpose of the regulation.4 Essentially, respondent's
4 Respondent's interpretation of the PCR valuation regulation
would produce indefensible results in the context of an easement
market consisting only of bargain sales (such as a governmental
program with a price limitation). For example, assume that
petitioners' assertions are correct and that Howard County pays
no more than 50 to 80 percent of the fair market value of
easements pursuant to the Program. Respondent's interpretation
of the regulation would lead to the conclusion that the first
participant in the Program, assuming the absence of any other
similar governmental programs and of evidentiary problems, may
employ before and after valuation to establish the fair market
(continued...)
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