Ongoing Holder Requirements

(1) Any holder who owns an easement purchased with program funds will be required to enter renewable contracts with the department for the resulting easement’s inspection, maintenance, and other items, which may include: (a) Renewal of contract obligations every five years; (b) Annual proof of active registration with the Tennessee Secretary of State as a charitable organization; (c) Annual proof of accreditation through the Land Trust Accreditation Commission or proof of existing coverage under a conservation defense insurance policy issued by a captive insurance body authorized to issue policies in this state; (d) Proof of title insurance for the easement; (e) Recordkeeping requirements; (f) Annual requirements for easement monitoring and reporting; (g) Requirements for enforcement of easement provisions and remedy of violations; (h) Requirements for notification to the department of any conveyance, extinguishment, or loss of the easement; and (i) Payment to the state of its proportionate value relative to funds received for extinguishment or loss of the easement interest. (2) Any holder who possesses an easement purchased with program funds but who does not enter into a renewable contract with the department for the easement’s inspection, maintenance, and other items, and any holder who allows ownership transfer of a program easement to a non-holder, shall within 90 days of written notice from the department: (a) Cause to be conducted a current appraisal of the parcel by a licensed real estate appraiser, as if the parcel were otherwise unencumbered. FARMLAND PRESERVATION CHAPTER 0080-01-04 (b) Submit to the state payment of its proportionate value for the easement calculated as the amount of funds supplied by the department for purchase of the program easement, divided by the value of parcel before the easement was enrolled, and multiplied by the current appraisal value of the parcel as if it were unencumbered. E.g. if at the time of enrollment the department funded the purchase of an easement at $400,000 on a parcel valued at $500,000, a violation of this rule triggers payment to the state of the proportionate value, and the current appraisal of the parcel is $3,000,000, the last holder under contract relative to the easement shall pay to the department $2,400,000: $400,000/$500,000 = 0.8 x $3,000,000 = $2,400,000. (c) After the 90-day notice, if a holder has failed to submit the proportionate value for the easement, the department may revoke the holder’s eligibility to receive funding under the program for a period of five years and may collect civil penalties from the holder in the amount of $500 for each day the proportionate value is not paid to the department.