Colorado landowners who say the state wrongly disallowed more than $116 million in conservation-easement tax credits told legislators Tuesday that revenue officials have bullied and harassed them for nearly a
The Department of Revenue, landowners testified, stripped the value of their easements without cause or due-process, needlessly costing them not only their property but tens of thousands of dollars trying to fight back.
"People were bullied, intimidated, harassed, told they will lose everything unless they settle, and that's extortion and intimidation," attorney Dori Richards testified before the Senate's finance committee on SB16-44. "Everything was taken from them, their land was devalued, and there is no money left to fight."
The bill would prevent the state from challenging land appraisals unless the appraiser was convicted of fraud or misrepresentation, and reinstate easement values that were denied without cause.
At issue are tax credits landowners received in return for placing their property into a permanent easement that protects it from future development. In order to encourage Colorado landowners into the program, they were enticed with valuable credits they could either use on their personal tax returns or sell.
But the program was ripe with fraud and overvaluations of property that ultimately enriched prospectors who divvied up swaths of land into chunks, then placed easements on them, often at values multiple times more than what they paid for them, and pocketed the profits.
Officials cracked down, but several landowners, particularly in the southeastern portion of the state, say the state went too far and devalued legitimate easements without any basis, usually years after the tax credits were sold and the money generated from them was spent.
Though the values were dropped and the credits rescinded, the land must remain in the easement forever, which landowners say is also unfair.
"This situation has been undermining the conservation community for over a decade," landowner Alan Gentz said. "My punishment for donating conservation easements in my community is that I'm still fighting the overreaching and hounding of the Department of Revenue and the attorney general."
Officials testified the state has the obligation to collect taxes that were wrongly credited, even if years after the fact.
Lawyers for the Landowners United Advocacy Association say the state used underhanded tactics, including letters that claimed appraisals were suspect long before they actually were so they could avoid statutory deadlines that would nullify their efforts.
Meanwhile, landowners say they've been forced to fight revenue officials in a special court system that was created long after the easement program began, a process they say changed the rules in the state's favor.
"I've spent $250,000 to get to this point today," Gentz said. "It's devastated my farm, cleaned out my children's college funds. Revenue simply doesn't care. They valued my property at zero."
The bill, sponsored by Sen. Jerry Sonnenberg, R-Sterling, was laid over for a vote on a later date.