Conservation Easement Program
HOUSE COMMITTEE ON AGRICULTURE, LIVESTOCK, & NATURAL RESOURCES
12:10 PM -- Conservation Easement Tax Credit Briefing
Representative Curry called to order this optional briefing on the conservation easement tax credit program. Roll was not called, but the following members were in attendance: Hullinghorst, Vigil, Solano, Looper, Fischer, Curry, Labuda, McKinley, J. Kerr, McNulty and Pace.
12:11 PM -- Jill Ozarski, Executive Director of the Colorado Coalition of Land Trusts, discussed the mission and members of the Colorado Coalition of Land Trusts and distributed information about the coalition (Attachment A). Ms. Ozarski explained the purpose of the conservation easement tax credit and discussed how the tax credit benefits agricultural and rural communities. She acknowledged past abuse of the tax credit program and described how problems were addressed in part through the creation of the Conservation Easement Oversight Commission. She distributed a booklet titled "Ranches of Colorado" with photographs by John Fielder (information about the project is available at http://www.johnfielder.com/ranches.php and the booklet is filed at State Archives with a copy of this Committee Summary). Ms. Ozarski answered questions from the committee about the number of acres under easements in the state.
12:20 PM -- Erin Toll, Director of the Division of Real Estate in the Department of Regulatory Agencies (DORA), explained that the Division's Conservation Easement Program helps the Department of Revenue investigate and recover money that was fraudulently claimed through the tax credit program. She distributed a fact sheet from DORA about the tax credit program (Attachment B). Director Toll discussed the oversight role the Division of Real Estate plays by reviewing conservation easement appraisals. She indicated that there was a lot of confusion over the tax credit claim amounts and clarified that in 2008 the conservation easement credit is equal to $45.2 million that could be taken as conservation easement tax credits over a 20 year period. She answered questions from the committee and explained that the Division was helping Department of Revenue look at a backlog of cases to evaluate appraisals and determine the actual value of easements. She also explained the requirements necessary to be a conservation easement appraiser.
The committee continued to ask Director Toll questions and to discuss the competing statewide budgetary issues. Director Toll explained that the Division of Real Estate is cash funded through appraisals and that the program would be impacted if a moratorium was placed on new conservation easements. The committee and Director Toll also discussed the role of the Attorney General in recovering fraudulent claims. The committee discussed the consequences of the illegal appraisals and legal remedies for fraudulent contracts.
12:52 PM -- Roxy Huber, Executive Director of the Colorado Department of Revenue, discussed a handout on the tax returns in the Department of Revenue's system (Attachment C). She explained how the department works with the Division of Real Estate and why their assistance and expertise is necessary to ensure that accurate tax credits are provided for easements. She answered questions from the committee about federal tax deductions and some possible implications of making changes to easement contracts.
01:04 PM -- Chris West, Executive Director of the Colorado Cattlemen's Agricultural Land Trust, responded to questions from the committee about why the conservation easement program is needed in agricultural communities despite some of the past abuses. He distributed a booklet about conservation easements titled "Crossroads in Conservation" (this booklet is filed at State Archives with a copy of this Committee Summary.)
Representative Curry discussed how easements on lands with sage grouse habitat helps to prevent the species from being listed under the Endangered Species Act and the large economic impact a listing would have for the ranching the community.
The committee discussed actions that the legislature is able to take in the face of the grand jury investigations.
Mr. West discussed conservation easements as an economic development tool for agricultural communities.
Representative Looper asked if the committee would be interested in a legal opinion from the Attorney General about moving forward with any legislation that may conflict with federal law. Representative Fischer suggested that the Office of Legislative Legal Services may be able to provide a more timely opinion.
The committee adjourned.