Colorado lawmakers OK conservation easement review
November 9, 2010
DENVER – Colorado lawmakers have approved a limited review of the state’s conservation easement program because of delays in resolving appeals that could result in foreclosures on hundreds of farms and ranches.
The Legislative Audit Committee on Monday said it will consider whether to audit the state Department of Revenue later this year to find out if landowners are being treated fairly and disputes are resolved in a timely manner.
State Rep. Marsha Looper, a Republican from Calhan who requested the audit, says it could take 10 years at the current rate to resolve disputes from 355 landowners who claim over $90 million in tax credits. Those credits have been challenged by the state.
Lawmakers first want to find out how much information is available because it involves confidential state and federal tax records.
“Some of these property owners only have 30 days to protest denial of their appeals that could lead to foreclosure, and they’re not even getting a certified letter. Credit buyers are already getting liens on their loans. The state is going after the credit banks,” Looper said.
Looper wants auditors to look at the denial process, resolution of disputed valuations and the impact on credit buyers.
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Conservation easements were set up in 2000 to guarantee that land would not be developed and tax credits were offered to 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. Lawmakers clamped down on the program in 2008.
The appraisals were based on the economic benefits of open space, wildlife habitat, clean water and other subjective qualities like scenic views.
In 2008, land trust organizations brought the problems to the state’s attention and changes were made, including mandatory reviews of property appraisals.
A report in 2009 by legislative analysts questioned a total of $274 million in credits granted from 2003 to 2008.
Jillane Hixson, a landowner from Lamar, says lawmakers have ruined farmers and ranchers who took advantage of the state program.
“If the state continues to pursue this, I will have to file for bankruptcy,” she said Monday.
“I have to pay people back, and all I got was a $130,000 tax credit,” she said.
Hixson said fighting the state has cost more than the tax credits she received and the cost could be as high as $600,000, counting penalties and interest.
J.D. Wright, president of Land Owners United, which represents 100 landowners fighting the state, asked Gov. Bill Ritter to cease all audits and reevaluate the state tax program after their tax credits were challenged by federal and state authorities over alleged faulty appraisals.
The governor’s office said it needed the money to help cover three years of budget shortfalls.