Final
BILL SUMMARY for HB05-1244

HOUSE COMMITTEE ON FINANCE

Votes:
Action Taken:
Moved to amend printed bill, page 2, strike lines
Refer HB 05-1244, as amended, to the Committee of 		Pass Without Objection
PASS


02:02 PM -- House Bill 05-1244 - Concerning the Administration of Colorado's Gross Conservation Easement Credit

 Representative Hoppe, prime sponsor, explained that current law allows for taxpayers to claim an income tax credit for the donation of a gross conservation easement. She indicated that HB05-1244 gives power to the Executive Director of the Department of Revenue to review and evaluate the appraisal value of the easement, and the amount and validity of the credit. She stated that under the bill any dispute resolutions regarding a credit are binding on any transferees. Representative Hoppe explained that the bill also requires that any transferee purchase the credit prior to the filing deadline for the transferee's income tax return. For credit holders that pass away prior to fully using all credits, the bill states that any remaining credits be transferred to the estate and may be claimed or transferred by the estate.

The following persons testified:

02:05 PM -- Mr. J. D. Wright, representing 10 conservation districts in the Lower Arkansas Valley, testified in opposition toward the bill. Mr. Wright commented that retroactive provisions in the bill can cause a number of concerns for persons who have claimed or transferred gross conservation easement credits when the legislation was initially enacted in 2000. He also mentioned that the original bill followed the federal standard for determining whether an appraisal was accurate and that under House Bill 05-1244, the Department of Revenue is responsible for reviewing and evaluating the appraised value of a conservation easement as well as the amount and validity of the credit. Mr. Wright closed by questioning whether the department has the expertise to determine the true value of a conservation easement.

The committee discussed the need for the department to have the authority to review and evaluate appraisals for land that are converted to conservation easements.

02:15 PM -- Mr. Vernon Dillon, representing farmers and ranchers of southwestern Colorado, testified in opposition to the bill and commented on his concern about the department's inability to evaluate appraisals for conservation easements as required under House Bill 05-1244.

02:17 PM -- Mr. Larry Kueter, Colorado Coalition of Land Trusts, testified in support of the legislation. Mr. Kueter discussed the impact of Colorado's gross conservation easement on open space in Colorado and pointed out that the credit's transferability is important to the program's success. Mr. Kueter discussed the technical provisions in the bill.

The committee discussed the number of conservation easements that are annually audited by the Internal Revenue Service. Mr. Kueter discussed the need for the department to evaluate appraisals because it is important to the success of the program. Representative Vigil commented on his concern that the department is not required to consult with an expert in the field of appraisals when the department evaluates a conservation easement credit claimed.

The committee discussed the Internal Revenue Service's review of large, highly valued, conservation easements.

02:45 PM -- Mr. Steve Acquafresca, Mesa Land Trust, testified in support of the legislation and distributed a handout (Attachment D) on the Mesa Land Trust to committee members. Mr. Acquafresca discussed the benefits of the conservation easement credit and commented on its ability to preserve valuable ranch lands on the western slope.

The committee discussed how the value of a conservation easement is derived.

02:56 PM -- Mr. Bruce Nelson, Manager of Tax Policy for the Colorado Department of Revenue, responded to technical questions regarding conservation easements. Mr.Nelson commented that Virginia is the only other state that allows transferable gross conservation easement credits in addition to Colorado and that the value of the appraisal drives the value of the credit which is a charitable contribution under federal law.

The committee discussed the statute of limitations as it applies to state income tax filers.
BILL:HB05-1244
TIME: 03:16:38 PM
MOVED:May M.
MOTION:Moved to amend printed bill, page 2, strike lines 15 through 17 and substitute the following "credit, and the validity of the credit". The effect of the amendment is to allow the statute of limitations as it applies to income tax filers to apply in the same way to taxpayers who claim the gross conservation easement credit. The motion passed without objection by those members present.
SECONDED:Vigil
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Jahn
Marshall
Massey
May M.
McCluskey
Witwer
Judd
Vigil
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:HB05-1244
TIME: 03:24:00 PM
MOVED:Cloer
MOTION:Refer HB 05-1244, as amended, to the Committee of the Whole. The motion passed on a 13-0-0 vote.
SECONDED:McCluskey
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS