In 1971, the Virginia General Assembly enacted legislation permitting localities to adopt a program of special assessments for agricultural, horticultural, forest and open space lands. The purpose of the program was:

To encourage the preservation and proper use of such real estate in order to assure a readily available source of agricultural, horticultural and forest products and of open spaces within the reach of concentrations of population,

To conserve natural resources in forms which will prevent erosion and to protect adequate and safe water supplies,

To preserve scenic natural beauty and open spaces,

To promote land-use planning and the orderly development of real estate for the accommodation of an expanding population, and

To promote a balanced economy and ameliorate pressures which force conversion of such real estate to more intensive uses and which are attributable in part to the assessment of such real estate at values incompatible with its use and preservation for agricultural; horticultural, forest or open space purposes.

A rapidly growing population and a reduction in the quantity and quality of real estate devoted to agricultural, horticultural, forest and open space use, and the benefits that accrue to the Commonwealth from such land have caused the Commonwealth to adopt certain programs which will hopefully tend to preserve these types of land. The land use assessment program is one such program and its goal, as previously mentioned, is to assist and to aid the preservation of such real estate. Although there are reasons that have contributed to the reduction in these lands, the rapidly escalating real property tax has been one of the major factors. The intent of the land use assessment law was to provide for the classification, and permit the assessment and taxation, of such real estate in a manner that will promote the preservation of the above type of land for the public benefit. The acceptance and usefulness of land use is demonstrated by the large number of localities which have adopted land use.

Last year, the House Finance Committee heard considerable testimony concerning possible abuses of the present law as well as problems in the administration of land use taxation. To further investigate these areas, the Chairman of the House Finance Committee appointed a subcommittee to examine Virginia's Land Use Assessment law and to determine if there are sufficient abuses of the present law to necessitate modification of its provisions. Moreover, the subcommittee was to recommend changes in other areas, which would improve the administration of the land use law.

The subcommittee has received testimony and information concerning individual landowners who have received land use tax benefits for land which was never properly devoted to agricultural, horticultural, forest, and open space or was held in the above uses in anticipation of a change in use. Most of these instances have involved individuals or owners who hold land for speculative purposes, especially in the fringes of rapidly urbanizing areas, particularly Tidewater and Northern Virginia. These speculators receive tax preferences even when the five year roll back and 6 percent interest rate is applied.

The subcommittee has also heard testimony regarding the propriety of granting land use taxes to 10-acre farmettes which qualify for land use but actually constitute a residence rather than a farming operation.

In order to corroborate the extent of abuses, the subcommittee has heard testimony from a number of members of SLEAC, including W. H. Forst, State Tax Commissioner; S. Mason Carbaugh, Secretary of Agriculture; C. M. Pennock, Department of Conservation and Economic Development; Rob R. Blackmore, Commission on Outdoor Recreation; and Dr. J. Paxton Marshall, VPI & SU. All of the individuals agreed that there were abuses in land use. However, the question remained as to what types of changes were necessary to eliminate the abuses.

To further comprehend the specific problems and concerns of individuals the subcommittee held a public hearing in Leesburg where an unusually large turnout demonstrated the need for the land use program in Virginia. The individuals who appeared addressed a number of the alternatives the subcommittee was considering.