HB10-1197 was introduced on January 22, 2010. In its original form, the bill permanently reduced the conservation easement tax credit limit on individual donations from $375,000 to $135,000 effective January 1, 2011. After talking with the staff of numerous land trusts, what was already suspected became clear: this was an unacceptable solution. Not only would the reduced cap effectively eliminate the incentive for landowners to do conservation easements but the permanent nature of the change went against everything we had heard in our negotiations with the Governor's Office and members of the Colorado General Assembly. After being told that we were welcome to come back with an alternative solution, CCLT went over various proposals with our Public Policy Committee and Board of Directors. We also reached out to our membership and asked for input on options available to us.

As a result of the input from the Board of Directors, Public Policy Committee, and CCLT members, we introduced a strike below amendment to the House Finance Committee on Friday, January 29 for HB10-1197. The major changes were threefold: 1) instead of a reduction in the individual credit limit, we proposed an aggregate cap of $26 million (a figure that was chosen after consultation with the Governor's Office) to the program as a whole; 2) the changes would be effective January 1, 2011 but would sunset in 2013, rather than be a permanent change to the program; and 3) the cap would only apply to easements conveyed in 2011, 2012, and 2013. The reason for this last provision was to prevent the cap from being met by "carry forwards" from previous years' transactions.

Other amendments were made in attempts at shaping how the program would be administered and financed.  The program will be run through the Division of Real Estate (Division) and the Department of Revenue. The Division shall issue tax credit certificates in the order in which complete applications are received. A waitlist will be created that cannot exceed $52 million (thus ensuring that the overall "cost" to the State remained at $26 million/year or $78 million/three years). For example, if $78 million in credits were generated in 2011, the limits for 2012 ($26M) and 2013 ($26M) would be met after the initial $26 million was allocated in 2011. The alternative that was proposed was unacceptable in our mind: a strict $26 million cap whereby the first credit in over that amount (and every subsequent easement) would never receive a tax credit. In contrast, the waitlist provides as much of an assurance as might be possible in this economic and legislative climate. HB10-1197 provides authority to the Division of Real Estate to notify the public regarding the aggregate amount of tax credits that have been issued and are on the waitlist. The Division of Real Estate will be promulgating rules to implement this legislation and administer the program.

Additionally, the bill clarifies the legislative intent of HB95-1268 concerning the classification of agricultural land that has a conversation easement placed on it.

HB10-1197 has passed through the General Assembly and will now go to the Governor for his signature.

CCLT will be hosting a webinar on April 22, 2010 at 2:30pm with Hollis Glenn and Jordan Beezley from the Division of Real Estate to provide more information on HB10-1197 and answer questions. We will be sending out more information on this webinar shortly.

Once again, thank you to all of our members who have provided input and support throughout this process.