Changes proposed for Colo. conservation easements
DENVER – A Colorado lawmaker wants to change the way the state handles its conservation easements program because of delays hearing appeals that could result in foreclosures on hundreds of farms and ranches.
At issue are tax credits that were granted to property owners in exchange for not developing their land. Some of those credits were later denied.
Rep. Marsha Looper, a Republican from Calhan, wants to allow property owners challenging those decisions to be able to take their appeals straight to court. Currently they’re required to appeal to the state Department of Revenue and the attorney general.
“This way, they would be able to bypass some of the delays and get their cases settled in two or three years instead of 10 years it will take to get these cases resolved,” Looper said.
She planned to meet with property owners and judges Friday to discuss the plan.
Looper says it could take a decade at the current rate to resolve disputes from 355 landowners who claim over $90 million in tax credits.
J.D. Wright is president of Land Owners United, which represents 80 landowners fighting the state. He asked Gov. Bill Ritter to cease all audits and reevaluate the state tax program after the landowners’ tax credits were challenged by federal and state authorities because of faulty appraisals.
Ritter refused, saying the state needed the money to deal with a $1.1 billion budget deficit.
The administration wanted to settle each case individually, which property owners said would require an admission of guilt.
Gov. John Hickenlooper has not said what he plans to do about the issue. Hickenlooper paid $52,486 to the Internal Revenue Service in 2008 after it denied some claims for tax credits on easements he held in Park County after he received $1.1 million in federal tax write-offs. Hickenlooper said it would have been too expensive to otherwise contest IRS claims that the land was overvalued.
Conservation easements guarantee that land will not be developed. They allow struggling farmers and ranchers to keep land in agricultural production. Property owners can write off easements as charitable contributions, and they keep title to the land.
State tax credits under the program jumped from $2.3 million in 2001 to $98 million in 2008, fueled in part by a change in 2003 that allowed the credits to be transferred and sold.
The Colorado Department of Revenue has notified the landowners and easement credit buyers that their credits were being disallowed because the easements were overvalued by state-licensed appraisers. It ordered them to pay the credits along with penalties and interest.
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