CEQ: FAQ on a “490 Forever” Pilot Program as proposed by the CEQ
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FAQ on a “490 Forever” Pilot Program as proposed by the CEQ

Prepared by CEQ staff,* December 28, 2015


What is “490 Forever?”

In its draft recommendations for legislation for 2016, the Council on Environmental Quality (CEQ) calls for new land conservation tactics. “490 Forever” is the conceptual name of one new forest land conservation program being recommended. It is only a concept at this time. The term “490” is derived from P.A. 490, the current tax assessment law by which forest land is taxed at rates that reflect forest use value, not market value.

How would it work?

An owner of forest land who wished to see his or her land preserved permanently, and has no need for or expectation of payment, could donate a conservation easement to the Department of Energy and Environmental Protection (or other entity designated by law). The land would be classified under P.A. 490 permanently (ensuring low property tax assessment), and the owner would gain the satisfaction of knowing the land could never be developed. Future owners would see the land assessed and taxed at the low P.A. 490 rate automatically (in contrast to the current practice of having to hire a forester to get the land certified and classified anew when the land is transferred).

A very important element of this program is simplicity. The easement would be a template that the owner (probably through his or her attorney) completes and files on the land records.

How would the land be managed?

The land would be managed by the landowner, not the state. The conservation easement would prohibit building and development, but the landowner could choose how to manage his or her forest. In this regard, the program would be somewhat comparable to the state’s successful farmland preservation program (though farmers usually sell rather than donate their easements (or “development rights”)), which leaves the land in private ownership and management while development is restricted.

Who is it for?

The program would be for owners of land classified as forest land under P.A. 490 who want to see their land preserved permanently.

What criteria would the land have to meet?

If the land is classified as forest land under P.A. 490, that is good enough. In this regard, the program is quite different from DEEP’s traditional land conservation programs, which seek out the very best lands.

Would the landowner gain an income tax deduction for the value of the donated easement?

That would be ideal. In December 2015, the U.S. Congress made such tax incentives permanently available for donations of qualifying easements. The template would have to be drafted carefully to make sure it met IRS requirements.

Who would draft the easement template?

Presumably, the General Assembly would charge DEEP and/or the Office of the Attorney General with this task.

Could the template be customized to allow for, say, temporary mining activities?

Probably not, as the key to the whole concept is simplicity and low cost. A landowner who would like to see his or her land preserved with conditions different from those in the template could choose one of the many opportunities that already exist to donate or sell the land (but that usually takes more time and might result in additional expenses for the landowner, which 490 Forever is intended to avoid).

Why is the CEQ proposing a pilot program?

From reports it has read, the Council has concluded that there are owners of forest land in Connecticut who would donate a conservation easement to protect their land from development permanently if the process were simple, permanent and inexpensive. However, there is no way to tell how many such landowners would take advantage of a 490 Forever program. The Council thought it best to start with a pilot program to see what types of lands (if any) are preserved and what problems might arise. The Council is being cautious; it is not opposed to a permanent program instead of a pilot.

Who would enforce the easement?

If a landowner donates an easement and then proceeds to do something – build houses, for example – that is restricted by the easement, it would be the responsibility of DEEP, as the recipient of the easement, to take action as necessary. More than likely, the landowner’s activities would be noticed by municipal officials (such as assessors or other officials) who would notify DEEP. Some costs might arise for the state, but they are likely to be minimal; the state would not be responsible for managing the lands, but would be responsible for making sure the terms of the easement were not violated.

Would municipalities lose tax revenue?

Under the Council’s proposal, only land currently classified as forest land under P.A. 490 would be eligible, so there would be no reductions in current revenue. Towns might be concerned that they could receive less property tax revenue in the future if they are comparing revenue under P.A. 490 rates to the tax revenue that would be collected if the land were developed. However, because this is a voluntary program that only preservation-minded landowners would enter, it is unlikely that any town would be forgoing much revenue from development. The landowner still would be paying property tax, but at the lower P.A. 490 rate that usually is appropriate given the small burden such land puts on municipal services.

Could municipalities participate more directly?

One interesting idea would be to let municipalities elect to receive the easements instead of the state.

Who would help the landowner with this process?

Ideally, DEEP would be appropriated sufficient funds to have staff available to answer occasional questions. Even more ideally, there would be a small account available to cover any (hopefully small) costs incurred by the landowner.

*Disclaimer: These answers were prepared by staff of the Council on Environmental Quality to help explain the Council’s current draft recommendation for a new land conservation tactic. Because it still is a draft, there likely will be changes made to the recommendation. If the General Assembly elects to act on the recommendation, there probably would be many more changes. Again, the above answers are intended to reflect the Council’s current thinking, and should not be regarded as anything more binding.

 

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