Colorado's state certification of conservation easement holders is required under HB08-1353 singed into law by Governor Ritter on June 5, 2008.
The program is administered by the Division of Real Estate in consultation with the Conservation Easement Oversight Commission.
- The Division of Real Estate and the newly formed Conservation Easement Oversight Commission are in the process of developing a certification program for entities that hold conservation easements. The program will examine an entity's process for approving an easement and its system of monitoring those easements, as well as its governance and financial stability. An application fee (up to $5,810.00) must be submitted at the time of an application. Beginning one year after the division commences accepting applications to certify a particular type of entity (the types being land trusts, state and local government programs, and historic preservation groups), that entity must be certified in order for the donor to receive a state tax credit for any donation.
Land trusts may submit applications for certification beginning January 1, 2009. The certification process will be established by emergency rulemaking in Fall 2008 and the formal rulemaking process will be designed with a March or April 2009 completion date in mind. CCLT will continue to provide updates on this front, including notices of any public hearings and the opportunity for comments. As the notes from the Conservation Easement Oversight Commission meetings suggest, we have been working closely with Division staff and expect the process to be based on key Standards and Practices. This matter will be discussed at the October 27, 2008 Commission meeting (details above).
State and local government entities and historic preservation groups may submit applications for certification beginning January 1, 2010. The certification process for these entities will be determined by rulemaking starting in 2009.
The information provided below is not meant to act as legal or professional advice. Please consult an attorney or other professional for advice on the implementation of the provisions of HB08-1353.
January 1, 2009
- Appraisers must begin submitting conservation easement appraisals, affidavit and fee to the Division of Real Estate.
- Non-profit easement holders (land trusts) can begin applying for certification.
April 15, 2009 (repeats yearly)
- All easement holders must submit the form required under C.R.S. 39-22-522 to the Department of Revenue and the Division of Real Estate by this date.
January 1, 2010
- All non-profit easement holders (land trusts) must be certified by this date in order for donors to receive the state tax credit.
- Government entities and historic preservation groups may begin to apply for certification
January 1, 2011
- All government entity and historic preservation easement holders must be certified by this date in order for donors to receive the state tax credit.
Beginning July 1, 2008, all completed conservation easement appraisals (defined in HB08-1353 as including a certification page signed and delivered to client) must be submitted to the Division of Real Estate within 30 days of completion along with a $600 fee and an affidavit signed by the appraiser noting certain requirements have been met. The initial affidavit, effective by emergency rule on August 8, 2008, is available here. The Division will review the information in the affidavit and the Board of Real Estate Appraisers will impose suspensions or other penalties on the appraiser if the Division finds wrongdoing. Please note that this is not a pre-screening process and that the Division will not necessarily notify the landowner if it finds a problem with an appraisal. This was designed to have a deterrent effect on unscrupulous appraisers, so if the Division determines there is a serious problem with an appraisal it will send a complaint to the Board of Real Estate Appraisers.
Additional classroom education and experience requirements will be set by the Board of Real Estate Appraisers for all appraisers who seek to complete a conservation easement appraisal for a state income tax credit.
The staff of CCLT recently attended a meeting of the Colorado chapter of the American Society of Farm Managers and Rural Appraisers and heard some confusion related to how the bill has changed the process for appraisers. CCLT is committed to working with appraisers, state agencies, and other informed and concerned stakeholders to make sure that the intent of the legislation is matched by its implementation. It is CCLT's current understanding that the language of the bill is clear: an appraiser need only submit a completed appraisal to the Division of Real Estate. A completed appraisal is defined by the legislation as an appraisal with a signed certification page that has been delivered to the client. Any other form of appraisal, such as verbal, or corrections made to appraisals, were not intended to constitute a "completed appraisal" under the bill.
The Division is currently working on rules for this issue and CCLT will work hard to ensure that the rules match the intent of HB08-1353 and do not result in an undue burden on appraisers or the appraisal process.
- The certification program will begin accepting applications no later than January 1, 2009 for land trusts.
- The certification program will begin accepting applications no later than January 1, 2010 for government entities and historical preservation groups.
- The application fee must be submitted at the time of an application.
- Beginning one year after the division commences accepting applications to certify a particular type of entity; that entity must be certified in order for the donor to receive a state tax credit for any donation.
- The division will maintain an online list of all entities that have applied for certification and their status.
- The provisions of the act do not apply to any tax credit that was claimed prior to the time certification is required by a particular entity.
- Beginning January 1, 2009 and no later than April 15, 2009 and repeating yearly the form submitted by easement holders under C.R.S. 39-22-522 must be submitted to the department of revenue and the division of real estate.
- Beginning January 1, 2009 taxpayers must submit information about the donation of a conservation easement that receives state tax credits in a form to be created by the department of revenue at the time the credit is claimed.
- In order to receive the state tax credit an easement must be donated to a certified organization once that specific type of entity is required to be certified.
- If an easement is donated to a certified holder (at the time of donation) which subsequently loses certification the tax credit will remain valid. It is the responsibility of the landowner to check the certification status of an easement holder with the Division of Real Estate (an online status list will be maintained).