Land trusts must pass state muster under new easement rules
By Jerd Smith, Rocky Mountain News
Published October 27, 2008 at 5:34 p.m.
Updated October 27, 2008 at 5:34 p.m.
Nonprofit land trusts charged with overseeing thousands of acres of scenic lands will have to be state certified next year in order to continue accepting lands, under a new review process.
Beginning Jan. 1, 2009, the Colorado Conservation Easement Oversight Commission will begin reviewing dozens of nonprofit trusts to ensure they are qualified to monitor lands and have the financial resources to defend the easements against development or misuse.
The commission was formed by lawmakers this year after numerous abuses of the landmark easement program were uncovered.
The program was designed to offer private landowners lucrative state income tax credits in exchange for agreeing to permanently prohibit development on their lands by placing them under protective easements.
Some 3,000 easements have been put in place since the program began in 2000, but hundreds have been called into question by the IRS, the state department of revenue and the Colorado Division of Real Estate.
Abuses include: use of inflated appraisals designed to boost the value of tax credits; protection of tiny parcels of land instead of the large-scale ranches and legacy landscapes the law was intended to protect; and protection of lands that also allowed for such things oil and gas development.
More than $274 million in state income tax credits have been claimed, far more than the state initially planned.
Land trusts were supposed to function as gatekeepers, ensuring appropriate lands were being protected and fairly valued. But some were apparently formed fraudulently and others simply weren't clear on their obligations under the law and the IRS code governing donations of scenic lands.
After years of trying to fix the program, this year the legislature decided to create an oversight commission to ensure the trusts were functioning properly.
Guidelines for the certification are to be finished in December.
"We want to make sure that we can weed out some of the problems we saw this year," said Erin Toll, director of the Division of Real Estate.
The certification process will be conducted by the Colorado Division of Real Estate. Trusts that aren't certified by the end of 2009 will no longer be able to accept easements beginning in 2010, according to Hollis Glenn, conservation easement program manager at the Division of Real Estate.
Next month the new commission will hold a special meeting in southeastern Colorado to hear from dozens of landowners whose tax credits have been denied because the appraisals were deemed to high. The landowners have threatened to sue the state over the issue.
At the same time, the state is seeking millions of dollars in repayment on questionable deals, and Colorado Attorney General John Suthers has launched a grand jury investigation of land trusts, appraisers and attorneys who structured questionable deals.
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October 27, 2008
10:36 p.m.
Suggest removal
Outside_the_Box writes:
Jerd, I appreciate youre close attention to the conservation easement issues. I think Colorado people need to be educated about conservation efforts in our state. I feel, however, that your articles often come across as kind of cynical about the conservation easement effort that is going on. I dont know if thats your intent or not but there doesnt seem be enough credit given for the great things that land trusts are doing. For every 1 bad land trust out there trying to skirt the law and make a buck, you have like a hundred committed, honest land trusts protecting scenic open space from development. I had the privilege of working for San Isabel Land Protection Trust in Westcliffe the past few years and they have done a lot of great things. Maybe you could write an article that focuses on the great things that land trusts are doing.