Environment Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-6263

Title:

AN ACT CONCERNING THE TRANSITION FROM THE TEN MILL PROGRAM.

Vote Date:

3/18/2011

Vote Action:

Joint Favorable

PH Date:

3/7/2011

File No.:

SPONSORS OF BILL:

Environment Committee

REASONS FOR BILL:

Once landowners in the 10 mill program reach their 50th anniversary date their property could be reassessed at the current “developable” rate. This bill would cap off property tax rates when landowners reach their 50th anniversary for those who are willing to place a conservation easement on their properties with flexibility to keep their lands in the 10 mill program or transition to the PA 490 rate.

RESPONSE FROM ADMINISTRATION/AGENCY:

Susan Frechette, Acting Commissioner, Department of Environmental Protection: The 10 mill program has been a successful method for conserving forest lands, however significant increases in valuation may leave some landowners who want to conserve their forests no choice but to convert part or all of their property into a non-forest use to offset the increased tax burden. This bill would allow forest landowners who are in the 10 mill program under Connecticut General Statues Property Tax Assessment sections 12-96 through 12-98 and option to convert to 12-107d without penalty. Those woodlands that retain a 10 mill classification after their fiftieth year revaluation under section 12-97 would be assessed at a rate not to exceed like properties classified as “forestland” under section 12-107d. Parity between 10 mill property owners and PA forestland owners achieves the legislative intent of current-use valuation.

NATURE AND SOURCES OF SUPPORT:

Amy Blaymore Patterson, Esq., Executive Director, Connecticut Land Conservation Council: This bill will make it easier for landowners to maintain their long-term commitment

to forest conservation by capping their property taxes at the P.A. 490 rate upon their 50th anniversary in the 10 Mill program and provide 10 mill landowners who are willing to place a conservation easement on their properties with the flexibility to keep their lands in 10 mill or transition into P.A. 490 without a financial penalty.

Eric Hammerling, Executive Director, Connecticut Forest and Park Association: Many 10 mill landowners did not realize that on their 50 year anniversary both their land and timber could be reassessed at their current “developable” values. Re-assessing the land and timber at their current developable values will result in property taxes increasing by an estimated 20 times or more. The Department of Environmental Protection, Forestry Division estimated that property taxes would increase from $1.00 and acre to $24.50 an acre while those in the Public Act 490 Program are paying the equivalent of only $2.73 an acre. HB 6263 will cap off the property axes of 10 mill landowners at the P.A. 490 rate when they reach their 50 year anniversary, provide 10 mill landowners who are willing to place a conservation easement on their properties with the flexibility to keep their lands in the 10 mill or transition into the P.A. 490 without a penalty. It is imperative that this bill pass this year because all of the 10 mill properties will realize their 50 year anniversary this year.

Donald Tuller, President, Connecticut Farm Bureau Association: Connecticut Forest Land comprises over 50% of the states land base and over 80% of that land base is in

Private ownership. Working lands generate more in tax revenues than the towns expend in supporting the land. Forest land provides wildlife habitat, open space and clean water and air to all residents of Connecticut. This bill is good public policy and will help protect 14,000 acres of Connecticut forest land from an overly burdensome tax assessment.

Joan Nichols, President, Connecticut Professional Timber Producers Association: Approximately 14,000 acres of private forest land are coming up for reassessment under the 10 mill program. Working forest land is the resource base for the Connecticut forest products industry which contributed $131.5 million dollars to the states economy in 2007 and 10,000 jobs. This land should not be jeopardized by an archaic tax law that will saddle private forest land owners with a tax bill they can not afford.

Sandy Breslin, Director of Government Affairs, Audubon Connecticut: Connecticut's core forest lands are fast disappearing, primarily as a result of fragmentation due to development. This bill would help to protect the important habitat, timber resources and scenic beauty of historic forests areas.

Martin Mador, Legislative Chairman for the Sierra Club- Connecticut Chapter and director of Rivers Alliance: Conversion of the 10 mill properties to the 490 program should have happened in the 2010 legislative session. It is good public policy and is recommended.

Ben Bowell, Acting Project Director, Working Lands Alliance: This bill will cap the property taxes of 10 mill owners at the 490 rate. The bill also provides 10 mill landowners who are willing to place a conservation easement on their properties with the flexibility to keep their lands in 10 mill or transition into PA 490 without a financial penalty. It is important to act now as all remaining 10 mill properties will hit their 50 year anniversaries between 2011 and 2022.

David Sutherland, Director of Government Relations, The Nature Conservancy: Most forest and farmland owners now use the PA 490 program to gain “current use” assessments, which enable them to be taxed based not on what the land would be worth if it was developed, but rather on what it is currently being used for. This bill would cap the property taxes of 10 mill landowners at the P.A. 490 rate at their 50 year anniversary, provide 10 mill landowners who place a conservation easement on their properties with the flexibility to keep their lands in 10 mill or transition into P.A. 490 without a financial penalty and maintain the penalties associated with changing use, out of forestry to both protect the forest values of the 10 mill lands and ensure that towns benefit financially if the landowners decided to develop.

Gordon F. Gibson, Legislative Liaison, Connecticut State Grange: 14,000 acres of privately owned woodland will reach the 50 year reassessment during the next 10 years. This bill will allow the owners of 14,000 acres of forest land currently under the 10 mill program to convert their land to the 490 program. Without the option of conversion many forest land owners will be forced to sell their land for development to raise the cash needed to pay the taxes which will be levied on its current highest and best use value.

Glen M. Wolyner, President, Preston Mountain Club: Is a resident and 10 mill landowner in Kent, Ct: HB 6263 is a common sense compromise that would allow taxes to increase upon our 50th anniversary, but property taxes would be capped sensibly at the same per acre paid by other forest landowners in the Public Act 490 program. The property is a haven for wildlife, both endangered and otherwise. The forest lands provide multiple benefits to the community by providing habitat, cleansing air and water and maintaining the town's rural character. HB 6263 would make it easier for us to maintain our commitment to forest conservation by capping property taxes at the P.A. 490 rate upon our 50th anniversary and will provide 10 mill landowners who are willing to place a conservation easement on their properties with the flexibility to keep their lands in 10 mill or transition into P.A. 490 without a financial penalty.

Nick D. Yanick, Preston Mountain Club: The club has spent a substantial amount of money in habitat and forestry to protect wildlife. The 10 mill program does not make sense and the proposed tax increase will devastate the club and ruin all progress it has made.

Richard J. and Mary M. Soltes, Cornwall, Ct: The Soltes own 55 acres of woodland in Cornwall, Ct. They were not aware that putting their entire property in forest land under C.G.S. 12-93 that they were committing the entire property to forest for 100 years. They did not receive the information during the time in which property owners could convert from the 10 mill list to P.A. 490 forest land without penalty. The proposed bill is a step in the right direction. Mr. and Mrs. Soltes asked if it is possible to include a provision which would allow the property owner the option of one building site (which in Cornwall is 5 acres) subject to the PA 490 penalty, provided that the rest of the property was put into a conservation easement. This would allow one home to be built on the property, with a penalty to be paid, but would include a conservation easement as a trade-off.

Joshua Holcombe, and Matthew T. Holcombe, land owners in Marlborough and Hebron, Ct: The Holcombe family has owned land in the state for over 100 years preserving the lands natural condition, providing an environment for the propagation of flora and fauna and providing clean, oxygenated air for the residents of Connecticut. Additional taxation would be an extreme financial burden and potentially could force the sale of some acreage in order to pay additional taxes. HB 6263 would allow property owners to maintain a forest/open space tax advantage and would continue protection of the land and the passive advantage residents are enjoying.

George M. Camp, land owner in Middletown, Ct: Property taxes will increase dramatically if both the standing timber and property were to be reassessed and taxed based upon current “developable” land values. Our forest lands provide multiple benefits to our community by providing habitat, cleansing air and water and maintaining the town's rural character while maintaining the mission and goals of the Connecticut Forest and Park Association. Supporting this bill will make it easier to maintain our long term commitment to forest conservation by capping our property taxes at the PA. 490 rate upon our 50th anniversary and provide 10 mill land owners who are willing to place a conservation easement on their properties with the flexibility to keep their lands in 10 mill or transition into P.A. 490 without financial penalty.

Allen Herkimer, Cornwall Bridge, Ct, 3rd generation resident of Dark Entry Forest, Inc:

The DEF and its stockholders will be unable to afford the dramatically higher property taxes upon their 50 year commitment in the 10 mill program. If HB 6263 is passed it will allow us to remain in the 10 mill program. I request that additional clarifying language be considered that better defines the parameters of those who wish to remain in the 10 mill program to fulfill their 100 year commitment.

Jean Bouteiller, 10 mill landowner in Cornwall, Ct: HB 6263 provides a compromise that would allow property taxes to increase at the 50 year anniversary, but be capped at the same per acre rate paid by those in the P.A. 490 program, without a penalty, by first placing a conservation easement on the property, further ensuring the preservation of the forest land. If taxes increase beyond the P.A. 490 rate, the tax burden may force many to sell or develop their land in order to pay the bill. Forest lands provide habitat for plants and wildlife, water and air filtration, erosion control and carbon sequestration, all global objectives. Forest conservation is a key element in the climate change in equation. She urged support of HB6263.

Margaret and Louis Chatey of Ashford, Ct: Encouraged the legislature to reward property owners who committed to 100 years of forest preservation with a reasonable 50 year adjustment on the tax rate. They support the proposal to adjust the tax rate on the 10 mill acreage to the recommended value as if it were classified under PA490. According to a story in the Hartford Courant the U.S. Forest Service estimated that New England could lose as much as 63% of its land to development in the next 20 years. Programs that encourage landowners to maintain forestry, farmland and open space should be supported.

Edmund Lamb, Ledyard, Ct; He is a member of the 10 mill program. He would like his property taxes to increase to the rate currently assessed under PA 490. He has no intention of developing his property and would like to be able to move into the PA 490 program.

Anne Holcombe land owner in Marlborough, Ct: She partially supports HB 6263. She and other family members own both 10 mill and PA 490 land in Marlborough, Ct. If property taxes increase beyond the PA 490 rate it would unfairly penalize those who have made a commitment to forest conservation and possibly have the reverse effect of forcing some to either sell or develop land to pay the bill. The proposed section allowing transition to PA 490 contingent on a conservation easement being granted is a good idea, but requiring a permanent easement, would deprive owners of their property rights long term. A previously suggested 50 year easement (or longer at the owners choice) would be in keeping with the original 100 year contract. She would support HB 6263 with the suggested modification and would also support a transition to P.A. 490 that included making up back taxes (to the 490 level) from the 1972-73 exit window.

NATURE AND SOURCES OF OPPOSITION:

Kachina Walsh-Weaver, Senior Legislative Associate, Connecticut Conference of Municipalities (CCM): There is a growing concern the new tax bill on the reassessed values of these properties would create a financial burden that would possibly force some property owners to sell. This proposal would reduce future revenues for local governments. CCM urged proponents of the bill to consider a municipal-option approach and leave the discussions on the local level between municipal chief elected officials and property owners.

The Department of Environmental Protection explained to CCM that this bill would require reassessment of these properties based on PA 490 land values, instead of current and best use, but that properties would continue to stay in the 10 mill program and the commitment for the next fifty years and corresponding penalty would remain intact. CCM requests clarification from the Environment Committee that this is exactly what the bill would do.

Maureen E. O'Reilly

Date: 3/28/11