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Lawmakers consider fees to oversee easements program

By Jerd Smith, Rocky Mountain News

Published March 12, 2008 at 12:30 a.m.

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Colorado would charge nearly $1.1 million of fees over a three-year period to oversee an innovative land conservation program now plagued by questions of abuse.

Under House Bill 1353, land appraisers in the program would pay $600 to have their work reviewed, and nonprofit land trusts that grant and monitor conservation easements would pay $5,810 to be certified by the state.

"I think this will decrease fraudulent claims," said House Majority Leader Alice Madden, D-Boulder, the bill's sponsor. HB 1353 got its first hearing before lawmakers Tuesday at a meeting of the House Finance Committee.

Conservation easements placed on private lands prohibit most development, while allowing retention of private ownership. In exchange, the landowners are given state income tax credits that can be sold for cash.

"What we heard is that there is support for this program, but the legislature wants to make sure that we eliminate any fraud or abuse from the system," said Jill Ozarski, executive director of the Colorado Coalition of Land Trusts.

Colorado has one of the most aggressive easement programs in the country, offering tax credits of up to $375,000 per easement. About 1.2 million acres of land have been protected. But there has been criticism of tax credits based on potentially inflated appraisals and because of questionable public value of some protected lands.

The idea was to protect important scenic tracts and working ranches. But an investigation by the Rocky Mountain News found that tax credits have been claimed on lots in pricey gated subdivisions, on golf courses and on small parcels that also allowed for oil and gas development.

The state has issued about $274 million of tax credits in seven years and is now seeking repayment of at least

$15 million of credits.

Lawmakers sharply questioned Madden and others testifying for the reform, saying the program might be too flawed to save and that the state should find ways to collect money lost to fraudulent deals.

Under the reform proposal, a special commission would certify land trusts, review proposed easements and advise the division of real estate and department of revenue.

It would also allow the department of revenue to share confidential information on individual tax returns with the division of real estate.