Public Act 490 Guide - CT.gov

THE CREATION OF PA 490
PA
490
SECTION 2: THE CREATION OF PA 490
In the late 1950's and early 1960's, there was a great
deal of pressure to convert open and undeveloped land to
more intensive uses as Connecticut’s population and
business industry grew. As land prices soared, prohibitively
high “fair market value” property assessments made it
increasingly difficult for landowners to continue lowintensity
uses of their land. At the same time, farmland was
being rezoned for residential, commercial, and industrial
development. As a result, land was being appraised and
assessed at much higher values than for how the land was
being used. As a result, many farmers and landowners had
to sell their family lands to pay their real estate tax bills.
Pressure to develop did not stop with farmland.
Sportsmen and other conservationists were alarmed at
the loss of wildlife habitat as well as degradation of water
quality. Forest land, watersheds, and other natural habitat
areas were being purchased and developed into incompatible
uses at an alarming rate.
In 1962, William H. Whyte was retained by the then
Connecticut Department of Agriculture and Natural
Resources to prepare a report on Connecticut’s natural
resources. The Whyte Report recommended that farmland
be given preferential taxation treatment. An Open Space
Task Force then was established by Governor John N.
Dempsey, and among other recommendations, it proposed
that a new preferential taxation law be enacted for
farm, forest, and open space land. Connecticut was one of
the first states to enact current land use assessment
legislation. Today all states have programs to reduce local
real estate property taxes on farmland, forestland and
undeveloped open space.
In 1963, the Connecticut Legislature enacted Public Act
63-490, an act concerning the taxation and preservation
of farm, forest and open space. Commonly referred to
as “PA 490,” this act has become one of the most important
laws to help preserve an agricultural, forest, and natural
resource land base in Connecticut. It is included in the
Connecticut General Statutes as Section 12-107. The
purpose of this act must be understood and implemented
in accordance with the intent of CGS Section 12-107a
Declaration of Policy.
PA 490 provides for four major types of land use
classification: farmland, forest land, open space, and
maritime heritage land. Land classified under PA 490 as
farm, forest, open space, or maritime heritage is assessed
based on the current “use value” of the land. “Use value”
refers to what the land is actually used for rather than what
it might be worth on the open market, i.e. its highest and
best use.
Farmland, forest land, open space and maritime
heritage land require few if any public services such as
education. Use value taxation is therefore warranted for
these lands that have limited impact on local government
expenditures. Use value taxation also reflects the concern
that market value taxation would result in forced conversion
of valuable farmland, forest land, and open space into
incompatible uses. This conversion can cost municipalities
far more in the long run than the presumed loss of a percentage
of current tax revenues.
There have been few changes to PA 490 since its
enactment in 1963. In 1972, a recapture conveyance tax
penalty was enacted on the removal of land from PA 490
classification. The conveyance section also defined a series
of exceptions that would not be subject to the recapture.
In 2005, Public Act 05-190 put forth changes to the
Conveyance tax section of PA 490. In 2007, CGS Section 12-
107b was amended and defined waterfront land, known as
Maritime Heritage Land for commercial lobster fishermen,
as being eligible for classification under PA 490, with the
assessor being responsible for determining eligibility.
The act works best if it receives consistent interpretation
throughout the state. There are often different opinions
regarding the interpretation of PA 490 and it is the intention
of this practical guide to clarify some of those issues.
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Public Act 490: A Practical Guide and Overview • http://www.cfba.org/pa490guide.htm • Connecticut Farm Bureau Association