House Bill 1174 moves forward in Colorado legislature, closer to helping landowners with easement troubles
Rep. Jon Becker’s, R-Fort Morgan, Conservation Easement Tax Credit Landowner Relief bill passed the State, Veterans and MIlitary Affairs Committee of the Colorado House of Representatives Feb. 17 with a 5-4 vote.
The bill will now move to the Finance Committee. This is the latest in a string of attempted legislative action to address what some legislators and landowners see as unfair dealings form the Department of Revenue.
If passed, the bill would make it so that any conservation easement donated prior to Jan. 1, 2008, for which a credit is claimed and a final settlement has not been reached on or before July 1, 2016, would stand.
As of Jan. 20, there were 50 ongoing disputes between landowners and the Department of Revenue. Six cases are expected to settle by July 1.
If passed, open cases, like Alan Gentz’s, would be resolved.
Alan and Julie Gentz, of Sterling, Colo., filed a lawsuit against the Department of Revenue last year and filed another suit against Mark Weston, appraiser and Conservation Easement Oversight Committee member, Jan. 13.
In 2008, Alan Gentz received a letter from the Department of Revenue saying his easement, already in effect, was denied. He petitioned for a hearing in 2008. Seven years later, the Department of Revenue had not responded to that petition.
Furthermore, the Department of Revenue is demanding the Gentz family, along with over 700 others who put their land into conservation, repay the tax credits awarded to them plus penalties and interest through 2015.
For the Gentz family, that comes to $700,000.
At the hearing, Becker said there was some fraud in the conservation easement program — that’s why the Department of Revenue started denying easements. But the cases left are not fraudulent.
“We should be able to find the fraud,” Becker said. “We should be able to point it out and say ‘here it is, this is what we need to move forward with.’”
If passed, the fiscal note for this year would be $947,857, for 2016-2017 it would be $730,000. For subsequent years, the big number emerges at $1.2 million.
“Ask [the Department of Revenue] what has been going on for the last 10 years,” Becker said. “What do we have? What proof is sitting there that says there are problems with each one of these cases?”
If the Department of Revenue can’t prove there are problems by July 1, the bill would ensure the state honors the deals it made with landowners unless there is clear and convincing evidence of overvaluation or the appraiser has been convicted of fraud.
The bill would also allow landowners to terminate the easement if the state rejects the claim for the credit, the land has been appraised at no value or if the easement holder either doesn’t provide compensation to the landowner or has been reimbursed in whole for any compensation provided to the landowner.
“If you’re not going to give these landowners any value for their land, it’s not fair the state also gets to say ‘I get to keep your land,’” Becker said. “That shouldn’t happen.”
It will cost the Department of Revenue about $8,000 per appraisal, as well as legal representation for each easement, to double check the accuracy of the appraisals. ❖
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