Bill Summary for Bill Number HB06-1354

Date: 03/21/2006

Final
BILL SUMMARY for HB06-1354

SENATE COMMITTEE ON FINANCE

Votes: View-->	Action Taken:
Motion to adopt L.001 (Attachment E). The motion Motion to refer HB 06-1354, as amended, to the Com	Pass Without Objection PASS

02:43 PM -- House Bill 06-1354

Senator Teck, prime sponsor, explained the provisions and purpose of HB 06-1354 which amends the existing income tax credit for conservation easement donations to 50 percent of the value of the donated easement, with a maximum amount, or cap, of $375,000 for the credit. This cap on the tax credit takes effect with a donation of $750,000. Thus, a donation above $750,000 receives the maximum $375,000 tax credit.

The following people testified on the bill:

02:45 PM -- Mr. Larry Kueter, Colorado Coalition of Land Trusts, spoke in favor of the bill. He provided background on the conservation easement credit program and stated that the bill would change the credit so that it would have a one-tier structure than a two-tier structure. He explained that the change was intended to be revenue neutral. He explained there were two reasons for the change. First, the current structure of the credit could be problematic under the Internal Revenue Service's (IRS) guidelines for federal charitable law, and second, the change would remove the incentive to donate smaller land areas to qualify for the full amount of the credit. Thus, the state would get larger conservation easements for the credit. He discussed whether the change was fair for smaller landowners.

02:53 PM -- Mr. Kris Larsen, Colorado Coalition of Land Trusts, spoke in favor of the bill. He read a letter from Mr. Steven Acquafresca, Land Protection Specialist, in support of the bill (Attachment C). He also discussed the benefits of the conservation easement tax credit program, indicating that the program was primarily for conservation protection. A summary of the bill from the Colorado Coalition of Land Trusts was distributed to the committee (Attachment D).

02:55 PM -- Ms. Lynn Sherrod, Colorado Cattleman's Association and the Colorado Cattlemen's Agricultural Land Trust, spoke in favor of bill. She indicated that because of the donations of ranchers, there is a quarter million acres preserved in Colorado and that the donations also help secure rural economies by preserving open space. She discussed how the bill provides incentives for larger landowners to practice conservation.

03:00 PM -- Ms. K Lynn Cameron, Board of Larimer County Commissioners, spoke in support of the bill. She explained that the tax credit has benefitted both landowners and citizens who want open space and that the bill will encourage larger donations for conservation easements and eliminate the IRS's concerns regarding the program's current structure. The bill will also treat large and small landowners equally and make the tax credit program more simple to implement. She indicated that the Colorado Open Space Alliance also supported the bill.

03:03 PM -- Ms. Garin Bray, Colorado Farm Bureau, spoke in opposition to the bill because of the Bureau's concerns that it would be harmful for smaller landowners. She indicated that she was working with the bill sponsors to come to an agreement and acknowledged the importance of conservation.

Senator Brophy asked about the IRS's concerns regarding current structure of the tax credit program.

03:05 PM -- Mr. Richard Giardini, Department of Revenue, discussed the purpose of amendment L.001 (Attachment E). He indicated that the amendment would clarify the use of the credit for joint tenancy and tenancy in common taxpayers who claim the credit. The amendment would cause these taxpayers to be treated the same as any other group-ownership taxpayers. Thus, the credit would be limited to one credit per donation.

Senator Teck closed by stating that the original intent of the tax credit was for the conservation of land. However, due to the increasing value of land, individuals have been only donating small portions of land to claim the credit which does not help with conservation. He indicated that the bill would make the program more aligned with the original intent of the program.


BILL:	HB06-1354
TIME:	03:09:22 PM
MOVED:	Teck
MOTION:	Motion to adopt L.001 (Attachment E). The motion passed without objection.
SECONDED:
		VOTE
	Brophy
	Shaffer	Excused
	Taylor	Excused
	Teck
	Tupa
	Veiga
	Sandoval
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB06-1354
TIME:	03:09:43 PM
MOVED:	Teck
MOTION:	Motion to refer HB 06-1354, as amended, to the Committee of the Whole. The motion passed on a 5 - 0 vote.
SECONDED:
		VOTE
	Brophy	Yes
	Shaffer	Excused
	Taylor	Excused
	Teck	Yes
	Tupa	Yes
	Veiga	Yes
	Sandoval	Yes
Final YES: 5 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: PASS

03:10 PM

The committee recessed.