Conservation easement primer

Here’s a primer on the subject of conservation easements for landholders, from RegisteredRep.com. From the article:

Twelve states currently provide tax credits based on a percentage of the dollar amount of a person’s donation. Some states, such as Colorado, make their credits transferable to other people as a tax incentive. The Colorado tax credit is up to a maximum of $350,000—among the highest credits available in the nation. Iowa has just instituted a state tax credit with a maximum of $100,000 based on 50 percent of the fair market value of a conservation easement donation. Note, though, that states also impose caps and limitations—so please check carefully.

More conservation easement coverage here.

Elkhead Valley: 617 acres put into conservation easement

From the Steamboat Pilot & Today (Brandon Gee):

The Routt County Board of Commissioners on Tuesday approved spending $250,000 to help conserve more than 600 acres in West Routt County’s Elkhead Valley. The money comes from the county’s Purchase of Develop ment Rights program. The Colorado Cattlemen’s Agricul tural Land Trust will hold the conservation easement on 617 acres of the Howe Ranch on Routt County Road 56 north of Hayden…

The Howe Ranch includes irrigated hay meadows, riparian areas along Calf Creek and sage-dominated rangelands, according to a news release, which states that the ranch also provides important habitat for species including elk, deer, pronghorn, black bear, mountain lion, bobcat, fox, sandhill cranes, greater sage grouse and Columbian sharp-tail grouse…

The PDR program is funded by a 1.5-mill property tax approved in 2006, nine years after the program first was approved for a 10-year period. The 2006 renewal is good for 20 years…

To date, the PDR program has completed 24 projects protecting 14,670 acres at a cost of more than $6 million. Six more projects totaling 3,219 acres are under negotiation.

More conservation easement coverage here and here.

Lower Arkansas Valley Water Conservancy District to test conservation easement valuation

From The Pueblo Chieftain (Chris Woodka):

The value of the water used on farms can increase exponentially if its use is changed to municipal or industrial, creating a dilemma for assessors, headaches for property owners and trouble for conservation easement sponsors in the past. So the Lower Arkansas Valley Water Conservancy District will present a test case to the state Division of Real Estate by claiming conservation easements on properties it owns on four ditch systems – the Bessemer Ditch, High Line Canal, Rocky Ford Ditch and Holbrook Canal. The easements are among nine the Lower Ark board voted to complete on Wednesday, bringing the total held by the district to about 60 easements. The district will present the ditch properties with easements that tie the water rights to the land, yet allow part of the water from those rights to be sold on an annual basis – or leased. The concept is central to the Super Ditch, a water leasing program supported by the district. It will also get two appraisals on each property in an attempt to determine the value of the water, and then ask the Division of Real Estate to verify the value of water, said Executive Director Jay Winner.

Because the district owns the properties, there won’t be the same liability a private landowner would face with any tax credits claimed in the transaction. The State Department of Revenue and Internal Revenue Service have raised questions about easements in Colorado in recent years, after many property owners took advantage of state tax laws meant to encourage easements. A state commission was set up and is working to certify trusts and governments that hold easements.

More conservation easement coverage here.

Colorado Water Trust

Here’s a shout out for Amy Beattie and the Colorado Water Trust, from Chris Woodka writing for The Pueblo Chieftain. From the article:

Since state laws differ, trusts in other states operate under slightly different rules. In Colorado, a 1973 change in water law made the CWCB the only agency that could hold an in-stream water right or a right solely to maintain lake levels. Other water rights must be put to a beneficial use like municipal, industrial or agricultural rights. The state can do that by appropriating water, acquiring existing water rights or adopting policies that protect flows. New rights appropriated by the state are junior to most other rights on a stream. Flow protection usually requires court decrees to prevent injury to other rights.

Acquiring rights would yield the best results, but the problem in the past is that valuable senior water rights had to be donated to the state, without compensation, [Colorado Water Trust Director Amy Beattie] said. The trust acquires some rights, although its revenue sources are limited to grants or donations. It also works with land trusts or other conservation agencies to incorporate water rights into planning, Beattie said. “The Colorado Water Trust acts as a broker. It pays for rights to be donated,” she said Last year, the state Legislature set up two CWCB funds as a way to acquire senior rights. One is a $1 million appropriation for general water rights. Another $500,000 was set aside specially in a species conservation trust fund. “We collaborate with the CWCB,” Beattie said. “We pull from a whole menu of approaches to fix critically water-short stream reaches.”

More conservation easement coverage here.

Land Owners United conservation easements meeting October 20

From the La Junta Tribune Democrat:

Land Owners United LLC has been diligently working for resolutions, regarding the assault on conservation easement valuations and will conduct an informative meeting on current status and action plans. The meeting is Tuesday, Oct. 20 at 5 p.m. at Las Animas Elementary School in the cafeteria, 530 Poplar Avenue (Hwy 50 and Poplar Ave), Las Animas. Guest speakers will include Mack Louden, Not 1 More Acre; Mortgage Brokers Coalition, DORA Law Suit; and Mark MacDonnell, Atty (LOU), DORA Open Records Request – Status. For more information, contact J.D. Wright (719)263-5449.

More conservation easement coverage here.

Rio Grande Headwaters Land Trust scores $1 million for Rio Grande corridor conservation easements

From the South Fork Tines:

The newly awarded funds will be used over the coming year to complete two important conservation easements on the Rio Grande river corridor. The federal dollars also serve as matching funds to previous awards from the Great Outdoors Colorado Trust Fund (GOCO), the Colorado Division of Wildlife’s Habitat Partnership Program, The Nature Conservancy, Mineral County, the Rio Grande Water Conservation District, and other local and regional supporters. With generous donations from the participating landowners, the NAWCA award will help achieve more than $12 million in conservation value on critical river ranches. These projects are part of the overall Rio Grande Initiative, a project led by RiGHT, along with key partners The Nature Conservancy and Ducks Unlimited, to conserve the ranches, important wildlife habitat and scenic beauty of the Rio Grande. A portion of the NAWCA award will also fund improved water delivery infrastructure on the Alamosa National Wildlife Refuge, which includes an important reach of the Rio Grande and senior water rights that provide vital habitat for waterfowl and migrating birds.

More conservation easement coverage here.

Great Outdoors Colorado and the San Luis Valley

From the Valley Courier (Ruth Heide):

During the 15-year history of one of the recipients of lottery ticket sales, Great Outdoors Colorado (GOCO), the Valley has received $28 million for a variety of projects ranging from Creede Recreation Park on one end of the Valley to Costilla County open space on the other…

Saguache County’s share of GOCO funds during that time tops the Valley list at more than $8 million followed by more than $5 million each in Alamosa and Rio Grande Counties, $1.3 million in Costilla County, more than $400,000 in Conejos County and nearly $230,000 in Mineral County.

Projects have included: Hooper Park; Zapata Falls; South Side Community Park in Alamosa; King Ranch Preservation Project; Twin Lakes Trail; Manassa Fairgrounds; Antonito Public Park; Sanford Park; Romeo Sports Complex; Will Stegar Project in Costilla County; Sierra Grande Playground Project; El Parque-A Village Park in San Luis; Fort Garland Community Park; Costilla Open Space; Creede Recreation Park; Wright Ranch Preservation Project; Creede Skate Park; Wolf Creek Pass Project; River Valley Ranch; McNeil Ranch; Del Norte Area Trails Master Plan; Natural Wonders of the San Luis Valley Play Park in Monte Vista; South Fork Rio Grande Park; Native Aquatic Species Facility; Saguache County Closed Basin Biological Inventory; Crestone Peak Trail; Irby Ranch; and Center Park.

Some projects such as the Hooper Town Park received less than $10,000 while others like the Costilla County Open Space project topped half a million.

More conservation coverage here.

Routt County: Board of Commissioners approves $400,000 for Elkhead Ranch conservation easement

From the Steamboat Pilot & Today (Brandon Gee):

The Routt County Board of Commissioners approved spending $400,000 of taxpayer funds to help place 645 acres of the 3,950-acre Elkhead Ranch under a conservation easement to be held by the Colorado Cattlemen’s Agricultural Land Trust. The easement is the third phase of an effort to protect the entire ranch. The easement lands include grazing pastures, hay fields, portions of Elkhead Creek, meadows, trees and wetlands. According to a news release, Elkhead Ranch “provides important habitat for numerous wildlife species including elk, deer, pronghorn, black bear, mountain lion, bobcat, fox, sandhill cranes, Columbian sharp-tail grouse and greater sage grouse.”[...]

[Elkhead Ranch owner Heather Stirling] is contributing about two-thirds of the easement’s value, which means she is not being reimbursed for about 66 percent of the property value lost by placing it in a conservation easement. “This is not only beautiful land and prime agricultural land,” County Commissioner Diane Mitsch Bush told Stirling, “but your contribution is over the top, in my opinion.” Some have criticized the program for spending taxpayer money on remote lands that will remain under private ownership. Roundtree rejected those criticisms and also noted that this project and others are highly visible from public roads and public lands. Visibility is one criteria the PDR board uses to evaluate a project, but not the only one, Roundtree said.

More conservation easements coverage here and here.

Pitkin County: Water rights for instream flow transfer to CWCB delayed by two valley districts

From the Aspen Daily News (Brent Gardner-Smith):

Pitkin County’s effort to place 4.3 cubic-feet-per-second of water into a trust managed by a state agency, for the benefit of the Roaring Fork River, has been challenged and delayed by the Basalt Water Conservancy District and the Starwood Metropolitan District. The two districts have asked for a formal hearing on the county’s proposal before the Colorado Water Conservation Board. “We just had concerns,” said Art Bowles, a board member of the Basalt Water Conservancy District. “We are not at all opposed to them donating water, but we want to just make sure it doesn’t affect us down river.”[...]

“This is the first time that the board has received a request to hold a hearing on a proposed water acquisition,” Linda Bassi, the head of the CWCB’s Stream and Lake Protection section, wrote in a March 9 memo to the CWCB board of trustees. On the other hand, the county’s innovative proposal to place water into a trust agreement administered by CWCB is also the first one the CWCB has received. The proposal was made possible by legislation passed in 2008 which strengthened the state agency’s ability to hold water rights for environmental purposes…

If the trust agreement is approved by the CWCB board, it would set up an arrangement where Pitkin County would be able to easily put under the trust an additional 34 cfs of water rights it owns — primarily from its open space purchases — to the benefit of the river. However, in February, attorneys for the Basalt Water Conservancy District and the Starwood Metropolitan District, sent a letter requesting a formal hearing to review the potential water acquisition. “The Basalt Water Conservancy District supports the minimum stream flow program and it supports instream flows that have designated historical use and are appropriate for that purpose,” said Christopher Geiger, an attorney Balcomb & Green, P.C. in Glenwood Springs…

But [Christopher Geiger, an attorney Balcomb & Green, P.C. in Glenwood Springs], who also represents the Starwood metro district, was critical of the CWCB process to date. “They haven’t provided anyone with the explanation with how the water right is going to be measured or administered in the river for instream flow purposes,” Geiger said. “They haven’t shown that it is going to have any appreciable benefit to the natural environment. At the same time, based on how the CWCB chooses to operate the water right, it might prevent the district from exercising its water rights.”[...]

One of the results of the Basalt and Starwood request for a hearing is an additional physical analysis of the stretch of the Roaring Fork River that the county’s water right would flow through. The analysis is to provide better information about the actual minimum amount of water needed in late summer to “protect the environment to a reasonable degree.” That analysis is best accomplished by looking at the river in late August. Pitkin County has agreed to an extension of the normal CWCB timelines so the data can be gathered and analyzed…

“Administrative agencies are entitled to a significant amount of deference in their decision making process,” said Amy Beatie, the executive director of the Colorado Water Trust, which has worked in support of Pitkin County’s decision. “They are asking for water court-type preparedness in order for a preliminary decision to be made.” Beatie said many of the concerns raised by Basalt and Starwood are typically covered in water court, which is a required next step after a CWCB review and approval.

More Coyote Gulch instream flow coverage here and here.

Fountain Creek watershed: Conservation easements key to protecting the riparian environment

Here’s a recap of an event last week sponsored by conservation groups on Fountain Creek, from Chris Woodka writing for The Pueblo Chieftain. From the article:

Unfortunately, development in Colorado is heaviest along the sides of those streams, called riparian areas, and is putting pressure on the most productive wild environments in the state. “Whatever you’ve been doing here is great,” Rondeau told Ann Hanna, who like her late husband, Kirk, has continued to put the environment first in running the ranch on Fountain Creek. “It is a lot different than the river looks in Colorado Springs.” Despite a few invasive salt cedars, there are both large and small cottonwoods and a thick mix of undergrowth near the creek on the Hanna Ranch. On the ground were signs of all sorts of wildlife moving through the area. Bugs were everywhere. Those are all good signs, since species diversity in Colorado is highest among riparian corridors…

“These riparian zones face the greatest pressure,” Rondeau said. That is amply illustrated on the Hanna Ranch, located halfway between Colorado Springs and Pueblo in El Paso County. Once it was a sprawling spread that stretched from the foothills of Pikes Peak to the short-grass prairie and Tepee Buttes – volcanic vents that were part of the ocean floor in the ancient past. In the 1960s, the ranch was split by Interstate 25. Much of it was sold to Colorado Springs, which uses some of the land for the Ray Nixon Power Plant. The Clear Springs Ranch, on the west side of Fountain Creek, was a wildlife viewing area badly damaged by the 1999 flood and Colorado Springs Utilities plans to rejuvenate it as part of the corridor master plan with a fish diversion, trail, wetlands. camping areas and ponds. Hanna has kept the ranch going and continues to train hunter and jumper horses. She is working on a conservation easement that will set aside about 460 acres along Fountain Creek with Great Outdoors Colorado purchasing the development rights. “It was a struggle just to keep the ranch,” Hanna said. Her relatives, Jay Frost and Ferris Frost, own an adjacent ranch, which already has a 900-acre conservation easement.

Meanwhile, development edges ever closer. Pikes Peak International Raceway is due west. Trains barrel through several times a day. Power corridors, toll roads, extensions of city streets, more power plants, gravel pits and wastewater treatment plants have all been proposed for the area in recent years. The Southern Delivery System pipeline will cut through the ranch at some point, although no one’s quite sure where yet, and that’s the least of worries for Hanna. “At least it will be underground when it’s done,” she said…

“The Hannas and the Frosts, like a lot of families, have worked with conservation trusts very fiercely trying to protect their ranches,” said Dan Pike, executive director of Colorado Open Lands, which has obtained a $4.7 million legacy grant from GOCo for its Peak to Prairie program. Its partners include the Nature Conservancy, the Conservation Fund, Colorado Conservation Trust, the Trust for Public Land and Conserving Land for People, which collectively have formed Keep it Colorado. Pike said the public funds available for protecting ranches pale when compared to the money available for development…

Overall, about 114,000 acres in a 2.2 million-acre area have been preserved at a cost of $32.69 million, about two-thirds funded by public funds. The goal of the project is not to stop or even curtail development, but to preserve enough land to maintain wildlife corridors and encourage strategic planning, Pike said. The short-grass prairie, like most riparian environments, is not greatly respected by the public, Rondeau said. “It’s under-known, under-conserved and under-appreciated. No other ecosystem is as converted to other uses as our grassland,” Rondeau said. “Ninety percent is privately owned. You can’t buy it all; that would be ridiculous. We want to work with the people who own it to preserve it.”

More coverage from R. Scott Rappold writing for The Colorado Springs Gazette:

…the Peak to Prairie program, which uses lottery funds and private donations to buy easements, has preserved 114,773 acres of prairie in the Pikes Peak region. That now includes 460 acres of the Hanna Ranch, which county property records show covers more than 4,200 acres.

More Coyote Gulch coverage here.

Wet Mountain Valley: Vickerman family ranch to be preserved

From The Pueblo Chieftain (Tracy Harmon):

Thanks to a recently awarded $484,200 Great Outdoors Colorado grant, the San Isabel Land Protection Trust will be able to preserve the 720-acre ranch. It will stay as it always has been, a working cattle and hay ranch that also is home to wildlife on the valley floor. “We grow native hay that requires just one cutting usually in mid July to the end of July. Since my husband passed, we’ve taken in cattle for pasture,” Mrs. Vickerman said. “We have a lot of deer and antelope. They like the alfalfa and when we are haying we see where they’ve made beds to stay in the meadow then they move on when it is cut low and not as protective.”

The $1.3 million Vickerman Ranch project consists of a $400,000 contribution from the Vickerman family through the donation of development rights to the property, $450,000 in matching funds being sought through the U.S. Department of Agriculture’s Farm and Ranch Protection Program and the GOCo funds.

More Coyote Gulch coverage here and here.

Ouray County: Regional water boards seek county cooperation to keep water on the land

From OurayNews.com (Christopher Pike):

In early May, representatives from several regional water boards in and around Ouray County met with the Board of County Commissioners to begin a water summit with a mission to develop a plan to meet the county’s future water needs. The meeting is expected to continue in September with work sessions that will consider how to preserve and keep water rights in Ouray County and the surrounding region. “We would like to find ways to provide incentives to land owners to tie their water rights to their property,” said Commission Chair Heidi Albritton recently. “I think that’s what we’d all like to work to.”

The commissioners wish to evaluate all of the challenges which now crowd a sizable game board, in an input process that will comprise the members of the BOCC, the Ouray County Planning Commis-sion, the Tri-County Water Conservancy District, the Colorado River District, the Gunnison Basin Roundtable, the Shavano Conser-vation District, the Uncompahgre Watershed Partnership and likely San Miguel and Montrose County elected officials and their staffs.

More Coyote Gulch coverage here and here.

San Juan Skyway land and water projects

From The Durango Herald (Dale Rodebaugh):

The 16 projects started in 2005 with a $5.7 million challenge grant from Great Outdoors Colorado. More than 30 partners, including cities, counties, private foundations, individuals and landowners who contributed part of the value of their conservation easements found $11.8 million to supplement the GOCO grant. “We’re very pleased we exceeded our own expectations,” said Ken Francis of the Fort Lewis College Office of Community Services, who coordinated efforts. “We raised more money, got more work done and preserved more land than anticipated.”[...]

Nina Williams, executive director of the Montezuma Land Conservancy, which acquired conservation easements on 3,100 acres of 10 working ranches along the Mancos and Dolores rivers, spoke of the relationship between people and the landscape in Southwest Colorado. “The San Juan Skyway and Southwest Colorado is defined by the relationship that people – ranchers, farmers, sightseers and hunters and fishermen – have with the land,” Williams said. “The vision of the Skyway coalition has been to preserve the intrinsic quality of the region so people can continue to maintain that relationship and their way of life.” The San Juan Skyway is a 236-mile highway loop that takes the traveler from Durango and back via Silverton, Ouray, Ridgway, Telluride, Rico, Dolores, Cortez and Mancos.

More Coyote Gulch coverage here.

Gunnison County: Conservation easement win for rancher

Gunnison County rancher Nick Hughes sued the IRS over their devaluation of his conservation easement and has won, mostly. He still will have to pay an additional $437,153 since the value of his land was determined to be less than the $3 million originally determined. Here’s a report from Seth Mensing writing for the Crested Butte News. From the article:

The IRS had audited Hughes after he filed his 2000 taxes with a $3.1 million charitable contribution for 2,413 acres he had donated to Black Canyon Land Trust Inc. The land was placed in a conservation easement to protect it from future development.
The IRS countered that the donated land was worth between $0 and $238,135, and not more than $3 million as claimed by Hughes, according to expert testimony from the IRS included in the ruling. But Judge Wherry disagreed and overruled the IRS, placing a value of $2 million on the land. Hughes will now have to pay taxes on the remaining $1.1 million. Hughes’ attorney Joseph Thibodeau told the Denver Post, “It was a given that the contribution was allowable. The only issue was the amount [the land was worth].”[...]

Lucy Goehl, executive director of Gunnison Ranchland Conservation Legacy, said there have been several audits of conservation easements conducted by the IRS in Gunnison County, “but they’re all over the state and Gunnison County is not exempt from that.”
The ruling pointed out that the IRS engineers evaluating conservation easements are not certified appraisers, who are the only professionals able to place a value on property donated as a conservation easement. “I think the fact that the court gave very little weight to the matrix the IRS was using in valuing the land makes this an encouraging decision,” said Goehl. In response to that part of the ruling, the IRS asked the Colorado Division of Real Estate to grant their engineers certified appraiser status.

Ann Johnston, executive director of Crested Butte Land Trust, thinks the ruling will have an indirect affect on the trust’s efforts to preserve open space by giving legitimacy to the idea that land held in a conservation easement still has value. “What I’m hoping will happen here is that when these programs in Colorado go through cases like this, it’s showing that the programs are valuable and it could encourage people to donate land,” she said.

More Coyote Gulch coverage here and here.

Bessemer Ditch: Bylaws changes

Here’s a look at one Bessemer Ditch shareholder’s view on the proposed bylaw changes coming up for a vote soon along with the Pueblo Board of Water Works plans to buy shares, from Chris Woodka writing for the Pueblo Chieftain. From the article:

Mike Bartolo is proposing a different path that would keep water rights in the hands of irrigators while guaranteeing Pueblo the ability to use some of the water when it was needed. His idea – which he admits is sketchy – is for the Pueblo Board of Works to buy the development rights shares in the Bessemer Ditch rather than purchasing shares outright. That would ensure that the water would stay in the ditch, while a portion of it would be available to Pueblo as it is needed. “The city would have to dish out less, maybe about $4,000-$5,000 an acre, rather than $10,000 to purchase rights,” Bartolo said. “The grower would retain the rights and the city could lease up to 30 percent when they need it.”[...]

Bartolo is also aware of Pueblo’s track record on past sales of the Booth-Orchard and Twin Lakes that left behind wastelands in Pueblo and Crowley counties and doesn’t trust the Pueblo water board’s promises that the same thing wouldn’t happen on the Bessemer Ditch. “I think the Board of Water Works has failed miserably to understand that they are not buying a chunk of a ditch, but are destroying the autonomy of it,” Bartolo said. “They are destroying the value of the Bessemer Ditch.”[...]

Bartolo is not opposing the right of anyone along the Bessemer Ditch to sell, and said he understands the reasons some of his friends and neighbors want to sell at this time. He believes more time investigating the potential impacts of the sale and the alternatives is needed, however. The Bessemer Ditch has been a target for urban water sales since the 1980s, when other ditches in the valley sold. Because there is not one large block of shares immediately available, as there were on the Rocky Ford Ditch and Colorado Canal, no sales ever materialized. The current sale was born from a failed effort in 2007-08 that happened in a very public way. The second time around, the water board lined up sellers through a broker at a higher price that lured more takers. While some shareholders met in the 1980s to prevent sales at that time, there has been little public discussion in the past 20 years about whether water rights should be sold or what other options are available.

Bartolo recently joined Super Ditch – a land fallowing, water management program – in an effort to share in the research into the value of ditch rights by the Lower Arkansas Valley Water Conservancy District. He doesn’t know if the idea of selling water while while keeping the water rights through long-term lease contracts is practical, but said the idea needs to be investigated. Bartolo’s own idea is taken from practices used in some conservation easements, where the future development rights are purchased to maintain a property’s character. The price is the difference between the current worth and the value of developing the property – in this case, water rights. “It preserves the rights of guys who have worked hard and want to cash in their chips,” Bartolo said. While he’s pitched the idea to shareholders through a handout at this year’s annual meeting, to the Lower Ark board, to The Pueblo Chieftain editorial board and at an informal meeting with some members of the water board, Bartolo has found few takers so far…

The water board’s proposal amounts to a “pig in a dress,” that would buy and dry farmland, Bartolo said. “They would lease it back for 20 years, but that’s pathetic,” he said. “When it comes time, the water board will make a business decision with the goal of providing cheap water for Pueblo. The water they are leasing to Aurora could generate five to six times the revenue in agriculture. They haven’t been a good partner to the valley.” Not all of the consequences of what could happen to the Bessemer Ditch’s water rights have been explained, Bartolo added.

More Coyote Gulch coverage here and here.

Conservation easements

Here’s an update on the state’s efforts to plug the leaky conservation easement program, from the Associated Press (Steven K. Paulson) via the Aurora Sentinel. From the article:

Erin Toll, director of Colorado’s Division of Real Estate, told lawmakers Wednesday the program is the target of a grand jury investigation that involves millions of dollars in questionable tax breaks. State lawmakers want to suspend the program and use the money to restore a property tax break for seniors, but Toll warned that could jeopardize hundreds of landowners who have taken advantage of tax credits who were told the easements would continue forever. She said tax benefits continue for up to 20 years, and some property owners have already sold those tax credits. “There’s a rollover for people who took that credit,” she told legislators. Toll said a grand jury is looking into $24 million that may have been fraudulently claimed with the help of unscrupulous appraisers who overvalued the land. Toll said three appraisers have been suspended and two of them are believed to be in Mexico. “We discovered millions of dollars in suspect credits,” Toll told legislators…

Toll said state regulators were hamstrung because of state laws that kept tax records private. She said new laws passed over the past two years will help investigators unravel what happened. Lawmakers were outraged when they were told they may not be able to cancel the program because of contracts that have already been signed to sell the easements.

More Coyote Gulch coverage here and here.

Prowers County: Conservation easement valuation still hot topic

Local residents crowded a recent meeting of the Prowers County Commissioners where conservation easements were being discussed. Here’s a report from Aaron Burnett writing for the Lamar Ledger. From the article:

[Roxy Huber, executive director of the Colorado Department of Revenue], who was accompanied by Commissioner of Agriculture John Stulp was on hand to address issues surrounding conservation easements. Easements across the state have come under scrutiny in recent years as tax values assigned to many easements have been called into question by the Internal Revenue Service and the state’s department of revenue…

There are several types of easements including ones that restrict gravel or other mineral mining as well as easements that restrict construction or development on property. The current audits being performed on existing easements call into question the amount of tax credit that should be awarded for each individual easement. As the audit process has progressed, some appraisals have been deemed fraudulent even though they were performed by state licensed appraisers. Locally, some land owners have been dealing with easements under audit for close to five years. Some landowners have been told by tax officials that their easements have no value.

“Part of the reason we’re here today is rumor control,” said Commissioner Gene Millbrand about the meeting. He noted that several county landowners have been affected by the issue and have raised concerns to all three members of the board…

Huber told the commissioners that even though there appears to be a disproportionate number of easements in the area being examined, the state is more interested in broad trends than individual regions. “We’re not targeting any particular part of the state. We are targeting systems of corruption,” Huber said. “We understand people feel like they’ve been defrauded,” Huber said. She added that actions of several appraisers have been called into question, but that ultimately the responsibility for an easement’s accuracy in its valuation falls to the individual landowner who places the easement. “While they’re licensed through the state, we can’t stop them from doing shenanigans,” Huber said concerning the auditors whose work has been called into question…

Huber said the state is attempting to resolve issues surrounding easements, but until recently hadn’t all the necessary tools at its disposal. She added that with the passage in 2008 of House Bill 1353 the department of revenue was finally able to discuss easement issues with other state agencies, a practice which has allowed the department of revenue to draw on the expertise of other state departments for such things as valuation of property. Huber noted that prior to the bill’s passage, her department was not able to discuss the easement issue with individuals not directly employed by the department.

Huber said the best option for landowners to take if they have received notification from the state concerning an audit of their easement is to file an objection within the alloted time period. She said this is an important step because it ensures due process for the landowner concerning any issues in question.

The revenue department head said the common timeline for easement reviews begins at the federal level, then is reviewed at the state level following the completion of the federal audit. She added that the state is currently suspending any audits that are currently under federal review pending that outcome. “If you’ve protested, you’re just sitting in the queue,” Huber said.

More Coyote Gulch coverage here.