While Gov. John Hickenlooper was in Southwest Colorado 10 days ago for the celebrations that surrounded the ribbon cutting at Mesa Verde National Park’s new visitor center, he also took time to sign legislation that will further encourage rural landowners to choose land protection over development.
The new Conservation Easement Tax Credit increases by $11 million the amount that can be applied annually against state tax obligations, and is open ended in terms of duration. It goes into effect July 1. A three-year annual cap of $22 million, $22 million and $34 million had been in place, reflecting the concern about the state’s reduced tax revenue intake during the recession. It was due to expire.
Previous to that, there had been no maximum, which unfairly benefited the easement program in contrast to other programs and understandably made budgeting difficult for the state.
It is estimated that the $11 million increase could mean that an additional 20,000 to 40,000 acres annually will enter into conservation-easement protections, and that amount can be managed efficiently by the state’s numerous land-conservancy organizations.
Hickenlooper signed the legislation on the Kevin and Diana Towan acreage in the Dolores River Valley at the confluence with Bear Creek. According to Juniper Katz, executive director of the Montezuma Land Conservancy who arranged the signing location, the Towan property is very visible and “absolutely gorgeous.”
Katz is full of praise for the increased annual cap and the opportunities it will give her organization and others statewide, and for the thoughtful and effective land conservation-easement tax-credit program it has become.
During the last three years, she said, the annual tax credit amount was spoken for by August, and a waiting list created uncertainty all around.
The ability to apply a portion of the value of land placed in a conservation easement against a tax bill began in 1999 under Gov. Bill Owens, according to John Swartout, who headed Great Outdoors Colorado between 2002 and 2008 and then the Colorado Coalition of Land Trusts and who now consults with nonprofits involved in land- and water-resource issues.
In about 2002, according to Swartout, it became possible for those tax credits to be sold, which was critical for the program to appeal to landowners who had little or no tax obligation because of limited profits from their operations. Think ranchers. Tax credit purchasers, who do have a tax obligation, might pay in the marketplace 85 or 90 cents for a dollar of credit.
Then state Sen. Jim Dyer, Durango, recognized the wisdom of making the sale of credits possible and was a leader in advocating for it.
A few years ago, there was an attempt, particularly in Southeast Colorado, to game the program’s benefits with inflated land values. That led to the state stepping in to affirm transaction values. Now, according to Swartout, the state’s Division of Real Estate gives its relatively quick approval to values, affirming legitimacy and doing away with what had been the possibility of a challenge, years later, by the Department of Revenue.
In 2013, Colorado has in place all the parts to help fairly protect its privately owned open spaces, if a landowner so chooses, an extraordinary asset that appeals to natives, longtime residents and new arrivals alike. Landowners forgo development in exchange for compensation, there is professional arms-length oversight by the state, and there is a predictable maximum impact on the state’s budget that roughly aligns with demand. Ideal.
And, as a rare bonus, the conservation-easement tax credit program has been an effort shaped by both political parties. It has had enthusiastic bipartisan support.
As the state’s population grows, as it will, ensuring the existence of open space becomes even more important. Coloradans are fortunate to have such an effective land-conservation tax credit program.
