4.10.08 PEN

Conservation Easement Tax Credit Bill Sparks Heated Debate between Ranching Advocates and Tax Dogs

Land owners will jump through more hoops when they take advantage of the Conservation Easement Tax Credit offered to protect lands for wildlife and from development. “This bill will put the nail in the coffin of those who have taken advantage of the conservancy program,” said Representative Alice Madden(D), House sponsor of HB08-1353.The conservation easement allows land owners to set aside property in exchange for a tax credit. Controversy occurred when the Internal Revenue Service began to audit tax returns of land owners who may have received inflated appraisals and thus inflated tax credits. HB08-1353 attempts to fix the conservation easement application process to prevent abuses.

Appraisers will be appraised
Appraisers will undergo much stricter oversight with this bill. They will have to provide their appraisals to the state Division of Real Estate rather than the Department of Agriculture. Additional oversight will come from a new commission to monitor the application process and from the Department of Revenue that will take in fees to pay for oversight activities.

If it involves taxes, Representative Doug Bruce(R) is the go-to attack dog
The fix does not satisfy Representative Doug Bruce(R), who stated that the program has produced a $240 million penalty to taxpayers. According to Bruce, “the government is reacting to its own bad program,” and has laid its failure “at the foot of the bogey man and bad actors.” The bill adds a $5000 application fee to cover administration costs. Bruce stated in Thursday’s House session that “the fee is paid by people in the private sector to a program where we’re giving them $80 million in taxes but they have to pay $5000 to get it.”

Bruce also complained about the administrative costs which would add just over10 FTEs in two years and carry a $200,000 technology price tag. “With only 232 land owners entering the program last year, that amounts to $900 per file.”

Conservation and ranching advocates snap back with teeth bared
As often happens with Representative Bruce’s critique, the other side reacted forcefully. Representative Kathleen Curry(D) rejected Bruce’s claim that the program was for rich people. “Ag producers in the Gunnison Valley who have participated in the program are not people who have gotten rich raising cattle in the Valley. They want to produce food for the nation. This bill is not for rich people in Crested Butte, but for ranchers who want to make a living and keep land open for wild life.”

Bruce noted that the average tax credit has been $250,000, “a quarter million dollar average benefit for participants in the program.” He also noted that the conservancy easement is permanent, and it assumes “we’re wise enough to know how this land should be used 500 years from now. We’re doing it forever because government knows best.” He further added that it was not unconstitutional to toss the original law.

Representative Madden retorted, “Representative Bruce knows more about the constitution than the rest of us put together, but I usually ask Legal Council for an opinion and they told us that we needed a vote of the people (to remove the law) and I’m going with them because they’re non partisan and don’t blame Democrats for everything that happens in the capitol.” She then quipped, “We get Bruced everyday, and I’m getting a little tired of it.”

According to the Secretary of State’s site on lobbying, farming interests and conservation interests both support the bill. The bill passed its 2nd reading.

Tags: Alice Madden, Colorado conservation laws, Conservation easements and tax credits, Douglas Bruce, HB08-1353, Kathleen Curry, Ranching in Colorado

This entry was posted on Friday, April 11th, 2008 at 2:14 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.