Sen. Jerry Sonnenberg’s conservation easement bill held over for vote at a later date, Rep. Jon Becker’s bill to be heard Wednesday
Colorado legislators took steps Feb. 9 to address landowner complaints that the Colorado Department of Revenue rejected their conservation easement tax credits without cause.
Landowners testified the state wrongly disallowed more than $116 million in conservation easement tax credits and stripped the value of their easements without cause or due process.
Sen. Jerry Sonnenberg, R-Sterling, sponsored SB 16-44, a bill that would stop the Department of Revenue from rejecting easement credit claims unless the easement’s appraiser was convicted of fraud in connection with that appraisal. The bill would also reinstate easement values that were rejected without cause.
The bill would cover conservation easements through Jan. 1, 2014.
The bill’s fiscal note is $117.6 million for 2016-2017.
“That equates to the number of dollars we have screwed the citizens of Colorado out of over the past 10 years,” Sonnenberg said.
The Colorado Senate Finance Committee voted to hold over the bill for more research and possible amendment.
Some of the possible amendments include putting a moratorium on new easements and working on a way to address the costs associated with bond hearings.
A Logan County judge in Sept. 2015 dismissed a $1.4 million bond requirement for the Gentz family, eliminating a huge hurdle in their lawsuit against the Colorado Department of Revenue.
“To me, this isn’t whether or not you believe conservation easements are good or bad,” Sonnenberg said. “This is to make right a contract between the state of Colorado and the people of Colorado.”
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.
Officials testified Feb. 9 that even years after the incident, it’s the state’s duty to collect taxes that were wrongly credited.
In 2007, the conservation easement program needed adjusting.
Fraudulently overvalued claims, benefitting landowner and appraiser, surfaced. Officials recognized a problem and moved to change the rules to prevent such fraud.
However, many landowners claim legitimate easements were revoked by the Department of Revenue with instances of ex post facto law violations and disregard for the statute of limitations.
Sonnenberg isn’t confident he changed votes at the hearing.
“If I can’t get the votes, I will try and have a conversation to see if we can’t fix part of the process,” Sonnenberg said.
Rep. Jon Becker, R-Fort Morgan, is working on HB 1174, titled Conservation Easement Tax Credit Landowner Relief. This bill is also aimed at making the state honor its contract. It will involve landowners who donated easements prior to 2008 and who have not yet settled with the state, including families like the Gentzes.
Becker’s bill is scheduled to be heard in the State, Veterans and Military Affairs committee Feb. 17. If HB 1174 doesn’t go through, Becker won’t give up.
“There’s plenty more I’d like to do with conservation easements to get these people back to normal life,” Becker said. “If we have to, we can start by taking smaller bites of the apple.” ❖
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I want to address a couple of issues in this week’s editor’s note.