This land is our land

Conservation-easement tax credits offer benefits made for you and me

Everything that sustains our economy and way of life is irrefutably tied to land - farming and ranching, tourism, hunting and fishing and much more. Since 2000, Colorado has provided valuable tax credits to encourage landowners to protect their land with donated conservation easements - permanent agreements whereby landowners keep their land, but give or sell development rights to a land trust or governmental entity in order to conserve specific resources that benefit the public.

Thanks to these transferable credits, more than 1.5 million acres have been saved for future generations of Coloradans. The program's monetary benefits are enormous. A recent study by The Trust for Public Land found that Colorado taxpayers receive $6 in benefits for every $1 used to subsidize land protection.

Initially, there was no state oversight to prevent abuse of the tax credit. A few individuals and organizations committed egregious abuses, leading to passage of House Bill 1353 in 2008. That bill created regulations to hold land trusts and appraisers to higher standards, and has successfully halted the types of abuse - primarily inflated appraisals and easements on lands of questionable conservation value - that were previously seen. The Conservation Easement Oversight Program administered by the Division of Real Estate requires certification of land trusts that accept conservation easements for which a tax credit will be claimed. It also sets forth appraiser and appraisal requirements, and conducts reviews of all easement appraisals.

One illegal transaction was not dissuaded by the new regulations, but fortunately the regulations have teeth. After recently discovering that an unqualified Durango-based organization had collected thousands of dollars in fees from a La Plata County landowner and accepted a conservation easement, the Division of Real Estate undertook its first disciplinary action under HB 1353. The land trust was ordered to cease and desist, and agree not to hold conservation easements or present itself as a qualified holder. The order can be viewed on the division's Web site at www.dora.state.co.us/real-estate/conservation/discipline.htm and the investigative report can be obtained, per Open Records Law, by writing to the division.

Because the easement was not granted to a legally qualified organization, and failed to meet many other federal and state requirements, it is ineligible for the Colorado tax credit.

This is an excellent example of easement oversight at work. Sadly, it is also an example of pitfalls for landowners. Donating a conservation easement is not just a land-use decision. Because easement donations can be worth hundreds of thousands or even millions of dollars, and can generate tax credits of up to $375,000, they are one of the biggest financial decisions that many landowners will ever make. They should be undertaken cautiously, and with expert advice.

A landowner should always start the process by choosing a qualified land trust. A land trust must be a 501(c)(3) nonprofit organization and meet all federal and state requirements to qualify to hold a conservation easement. To generate a Colorado tax credit, an easement must be given to a qualified, Colorado-certified land trust. The Division of Real Estate's Web site - www.dora.state.co.us/real-estate/conservation/applicationstatus.htm - maintains a list of certified land trusts. La Plata Open Space Conservancy in La Plata County, Montezuma Land Conservancy in Montezuma County, and the Southwest Land Alliance in Archuleta County are all certified land trusts that can guide landowners through the easement process, help them find qualified advisors, and create, accept and hold their conservation easements. Certified statewide and regional land trusts may also work in Southwest Colorado.

Because of the rigorous requirements, conservation easements are expensive transactions, and land trusts must pass costs on to landowners if they are to remain viable organizations. However, legitimate land trusts are in business to save land, not to get rich, and a prospective easement donor has every right to know how fees will be used, and to question fees that seem unnecessary or inflated.

Conservation easements are effective and cost-effective tools to conserve the farms and ranches, scenic vistas and natural open lands that make our state a special place. The Legislature agrees. At a time when most tax incentives are being slashed or eliminated to address budget shortfalls, the conservation credit will remain in full effect this year. Then the credit program will likely be capped at a lower level for three years before returning to full effect in 2014.

The Conservation Easement Oversight Program and qualified, responsible land trusts are indispensable in ensuring public confidence in the conservation easements that are conserving Colorado.

Katharine Roser is the executive director of the La Plata Open Space Conservancy in Durango. Reach her at 259-3415 or lposc@gobrainstorm.net.