Legislators call for more oversight and accountability for conservation easement tax credit

DENVER — Concerns over abuse of a law set up to preserve Colorado’s open spaces through conservation easement tax credits have prompted lawmakers to tighten the legislation.

In the past few years, there have been about 290 investigations into the law’s abuse, said Katie Reinisch, House Majority Office communications director. Roughly 90 of those investigations revealed credible violations, including appraisal fraud.

Late last week a handful of legislators introduced House bill 1353, which has among its main components the requirement that appraisers file conservation easement appraisals with the Colorado Division of Real Estate, which will review the information for wrongdoing. The bill also establishes a state certification program for groups that hold easements.

The measure will build upon changes enacted last year in HB 1361, which aimed at increasing the standards, transparency and accountability for the tax credits.

“Unfortunately, a few bad actors have misused this program,” said House Majority Leader Alice Madden (D-Boulder), one of the legislators who introduced the bill. “This will be the last nail in the coffin of those who would defraud taxpayers through inflated appraisals and slight of hand, chopping up of lands in a way that would impress a chef at Benihana.”

Committee hearings on the bill began Tuesday.

Conservation easements are sold or donated by private landowners to nonprofits or government agencies to guarantee that a parcel of land will never be developed. Property owners may continue using their land as it has been used but give up the rights to sell the land to developers in the future or to develop it themselves.

The conservation community stands firmly behind the law, said Colorado Coalition of Land Trusts Executive Director Jill Ozarski.

“This (law), plus the state enforcement action, which is necessary to deal with abuse that has happened already,” will definitively end conservation easement tax credit abuse, she said.

A diverse stakeholder group formed in 2007 worked hard to ensure the hundreds of good conservation easement deals are not overshadowed by any abusive situations, Ozarski said.

The bill will also create a conservation easement oversight commission to advise the Division of Real Estate and Department of Revenue. The department will be allowed to share information with other state agencies and the commission in order to air concerns about tax credit applicants. The bill would limit conservation contributions for properties held less than one year.

Madden, Rep. Bernie Buescher, (D-Grand Junction) and Rep. Kathleen Curry (D-Gunnison) and Sen. Jim Isgar (D-Hesperus) introduced the legislation Friday.

The new bill is endorsed locally by the Black Canyon Land Trust.

“Conservation easements have allowed (the Trust) to conserve over 36,000 acres in Central Western Colorado. The benefits to the broader community are made possible by the efforts of private landowners, and by the financial incentives of Colorado’s conservation easement tax credit program,” said Barbara Hawke, the land trust’s executive director. “A stronger program helps sustain these benefits over the long term.”

Black Canyon Land Trust serves the counties of Delta and Ouray, much of Montrose County, and a portion of Gunnison County. As a local land trust, they focus on working farms and ranches important to local communities.

They also work with landowners to preserve scenic open space, riparian corridors, wildlife habitat, and natural areas.

Contact Lisa Huynh via email at lisah@montrosepress.com