Deal eases threat to easement tax credits

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Conservation easements

The Colorado Conservation Easement Program was established by the Legislature in 1999 as a way to set aside private land for open space and protect it from commercial development for up to 20 years. The state offers tax credits of up to $375,000, depending on the value of the land being donated. The tax credits can be claimed by landowners over several years or sold to third parties.



Land trusts on the Western Slope and around the state that help property owners get conservation easements aren’t thrilled with a bill in the Colorado Legislature, but they’re not opposing it anymore, either.

That’s because state lawmakers reached a compromise with them. House Bill 1197 initially was intended to permanently lower by nearly two-thirds a cap on the tax credit allowed for each easement. Instead, the bill would cut by more than half the amount the state would pay, in the way of tax credits, for all easements over the next three years.

And instead of having the measure go into effect March 1, which would have affected easements approved this year, it would become effective Jan. 1.

Bill Prakken, president of the Mesa Land Trust board of directors, said he understands why the Legislature is looking to cut the easement program. At a time when the state has had to cut budgets by billions of dollars, the $63 million it shells out each year in tax credits through the conservation easement program is hard to swallow for legislative budget writers.

“It’s just a revenue measure for the state because they’re in a belt-tightening mode,” he said. “But it’s important to note that anybody who gets an easement this year will get the credit.”

The easement program began more than 10 years ago as a way to promote private open space by giving financially struggling property owners an option other than selling land to developers. Since then, nearly 2 million acres have been set aside statewide, but the cost to the state continues to climb as more land is protected.

Prakken said the program so far has helped landowners in Mesa County set aside 50,000 acres. The trust he oversees manages 130 easements in the county in such places as Glade Park, Orchard Mesa and around Mount Garfield.

“We’d prefer to see it not be capped, because it’s been an extremely useful tool for family ranchers,” he said. “The easements we’ve closed have allowed people to stay on ranches that have been in the same family for two or three generations. Without the tax credit, they couldn’t have done that.”

Under the bill, which cleared the Senate Finance Committee on Tuesday, the state expects to save about $18.7 million next year and $37 million the year after that.

Currently, tax credits for individual easements are capped at $375,000. Initially, the bill would have lowered the cap to $135,000, but that was scrapped in favor of a $26 million cap on tax credits overall.

“We believe it’s critical for this program to survive during this budget crisis, and we also acknowledge the very difficult budget choices that are available to the state,” said Larry Kueter, attorney for the Denver-based Colorado Coalition of Land Trusts. “This accomplishes the savings that are desired, but it does that in a way that the land trust community thinks is most productive for the program surviving.”

Erin Toll, the director of the Colorado Division of Real Estate, which oversees the easement program, said the measure is far better than scrapping the program altogether, something she said lawmakers did consider after the program suffered widespread abuse two years ago.

Toll clamped down on abuse in several cases along the Front Range and southern Colorado in recent years for inflating land appraisals as a way of getting larger tax credits.

She said none of that occurred on the Western Slope.

“Ever since the Legislature enacted new rules, that’s all gone away,” Toll said.

“We’re simply not seeing problems anymore. They’ve evaporated, but we never saw those problems on the West Slope, and that’s to their credit.”


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