Colorado 2022 Regular Session

Colorado Senate Bill SB119 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Second Regular Session
2	2	Seventy-third General Assembly
3	3	STATE OF COLORADO
4	4	INTRODUCED
5	5
6	6
7	7	LLS NO. 22-0766.01 Jason Gelender x4330
8	8	SENATE BILL 22-119
9	9	Senate Committees House Committees
10	10	Finance
11	11	A BILL FOR AN ACT
12	12	C
13	13	ONCERNING CONSERVATION EASEMENTS , AND, IN CONNECTION101
14	14	THEREWITH, ALLOWING TAXPAYERS WHO WERE PREVIOUSLY102
15	15	DENIED A STATE INCOME TAX CREDIT FOR DONATING103
16	16	CONSERVATION EASEMENTS TO CLAIM AN INCOME TAX CREDIT104
17	17	FOR THOSE DONATIONS IF SP ECIFIED REQUIREMENTS ARE105
18	18	SATISFIED.106
19	19	Bill Summary
20	20	(Note: This summary applies to this bill as introduced and does
21	21	not reflect any amendments that may be subsequently adopted. If this bill
22	22	passes third reading in the house of introduction, a bill summary that
23	23	applies to the reengrossed version of this bill will be available at
24	24	http://leg.colorado.gov
25	25	.)
26	26	The bill creates a new state income tax credit (new credit) for
27	27	SENATE SPONSORSHIP
28	28	Simpson and Winter,
29	29	HOUSE SPONSORSHIP
30	30	(None),
31	31	Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
32	32	Capital letters or bold & italic numbers indicate new material to be added to existing statute.
33	33	Dashes through the words indicate deletions from existing statute. certain taxpayers who were denied state income tax credits for
34	34	conservation easements donated between 2000 and 2013 (original credit)
35	35	if the federal internal revenue service allowed a federal income tax
36	36	deduction for the same donation. A donation is eligible for the new credit
37	37	only if the land subject to the donated conservation easement for which
38	38	the original credits were disallowed was owned by the landowner, a
39	39	family member of the landowner, or a trust or other legal entity controlled
40	40	by the landowner or one or more members of the family of the landowner
41	41	for not less than 3 consecutive years prior to the date of the donation.
42	42	The amount of the new credit is based upon the amount of the
43	43	original credit that could have been claimed at the time of the original
44	44	donation based upon the value of the donation accepted by the internal
45	45	revenue service; except that the fair market value of the land used to
46	46	calculate the value of the new credit cannot exceed 250% of the donor's
47	47	cost basis in the land subject to the donated conservation easement. The
48	48	amount of the new credit is reduced by any amount that was allowed to
49	49	be claimed against Colorado income tax or otherwise reinstated to the
50	50	claimant of the original credit. The new credit is not refundable but may
51	51	be carried forward or transferred in the same manner as the original
52	52	credit. The department of revenue is required to make information about
53	53	the new credit available online.
54	54	The bill establishes a process for applying to the division of
55	55	conservation to claim the new credit. If the original credit that was denied
56	56	was transferred to another taxpayer as transferee, the bill provides a
57	57	process for all parties to the transaction to submit a mutual application to
58	58	claim the new credit or, if there is objection, an ombudsman process to
59	59	resolve disputes about the distribution of the credit.
60	60	Be it enacted by the General Assembly of the State of Colorado:1
61	61	SECTION 1. In Colorado Revised Statutes, add 39-22-522.7 as2
62	62	follows:3
63	63	39-22-522.7. Conservation easement tax credits - credit for4
64	64	previously denied claims - rules - legislative declaration - intent -5
65	65	definition. (1) T
66	66	HE GENERAL ASSEMBLY HEREBY FINDS AND DECLARES6
67	67	THAT:7
68	68	(a) I
69	69	T IS THE INTENT OF THE GENERAL ASSEMBLY TO PROVIDE8
70	70	RELIEF THAT WILL REPAIR THE HARM CAUSED BY THE DEPARTMENT OF9
71	71	REVENUE'S DISALLOWANCE OF COLORADO CONSERVATION EASEMENT TAX10
72	72	SB22-119-2- CREDITS TO LANDOWNERS WHO IN GOOD FAITH , SUBJECT TO SUBSECTION1
73	73	(6)
74	74	OF THIS SECTION, CONVEYED CONSERVATION EASEMENTS TO2
75	75	QUALIFIED CONSERVATION EASEMENT HOLDERS BETWEEN JANUARY 1,3
76	76	2000,
77	77	AND DECEMBER 31, 2013;4
78	78	(b) S
79	79	TATE REPRESENTATIVE KIMMI LEWIS FROM HOUSE DISTRICT5
80	80	64,
81	81	WHO PASSED AWAY IN DECEMBER 2019, WORKED TIRELESSLY DURING6
82	82	HER CAREER AS A LEGISLATOR TO PROVIDE HELP TO LANDOWNERS WHO7
83	83	HAD CONSERVATION EASEMENT CREDITS ARBITRARILY DISALLOWED ; AND8
84	84	(c) R
85	85	ESOLUTION OF THIS HARM BY ALLOWING A LANDOWNER TO9
86	86	CLAIM A TAX CREDIT, OR PURSUE EXTINGUISHMENT, FOR A CONSERVATION10
87	87	EASEMENT DONATION THAT WAS ACCEPTED BY THE FEDERAL INTERNAL11
88	88	REVENUE SERVICE AND CONVEYED IN GOOD FAITH SUBJECT TO12
89	89	SUBSECTION (5) OF THIS SECTION, BUT ULTIMATELY DENIED BY THE STATE,13
90	90	WILL END THE NEARLY TWO-DECADES-LONG CONFLICT OVER COLORADO'S14
91	91	CONSERVATION EASEMENT TAX CREDIT PROGRAM , RESTORE THE15
92	92	INTEGRITY OF THE PROGRAM , AND ALLOW THE PROGRAM TO MOVE16
93	93	FORWARD TO CONTINUE THE GOOD WORK OF CONSERVING COLORADO'S17
94	94	INCREASINGLY LIMITED OPEN SPACE AND NATURAL RESOURCES .18
95	95	(2) N
96	96	OTWITHSTANDING ANY OTHER PROVISION OF LAW AND19
97	97	SUBJECT TO THE REQUIREMENTS AND LIMITATIONS SET FORTH IN20
98	98	SUBSECTION (3) OF THIS SECTION, A LANDOWNER SHALL BE ALLOWED TO21
99	99	CLAIM A TAX CREDIT WITH RESPECT TO THE INCOME TAXES IMPOSED BY22
100	100	THIS ARTICLE 22 FOR EACH PERPETUAL CONSERVATION EASEMENT IN23
101	101	GROSS DONATED IN GOOD FAITH BETWEEN JANUARY 1, 2000, AND24
102	102	D
103	103	ECEMBER 31, 2013, FOR WHICH A TAX CREDIT WAS CLAIMED PURSUANT25
104	104	TO SECTION 39-22-522 AND WAS DENIED IN WHOLE OR IN PART IF A26
105	105	FEDERAL CONSERVATION EASEMENT TAX DEDUCTION WAS ACCEPTED BY27
106	106	SB22-119
107	107	-3- THE FEDERAL INTERNAL REVENUE SERVICE FOR THE SAME DONATION .1
108	108	(3) (a) A
109	109	DONATION OF A PERPETUAL CONSERVATION EASEMENT2
110	110	IN GROSS IS ELIGIBLE FOR THE CREDIT ALLOWED BY SUBSECTION (2) OF3
111	111	THIS SECTION ONLY IF THE LAND SUBJECT TO THE PERPETUAL4
112	112	CONSERVATION EASEMENT IN GROSS FOR WHICH THE INITIAL CREDITS5
113	113	WERE DISALLOWED WAS OWNED BY THE LANDOWNER , A FAMILY MEMBER6
114	114	OF THE LANDOWNER, OR A TRUST OR OTHER LEGAL ENTITY CONTROLLED7
115	115	BY THE LANDOWNER OR ONE OR MORE MEMBERS OF THE FAMILY OF THE8
116	116	LANDOWNER FOR NOT LESS THAN THREE CONSECUTIVE YEARS PRIOR TO9
117	117	THE DATE OF THE DONATION OF THE PERPETUAL CONSERVATION10
118	118	EASEMENT IN GROSS.11
119	119	(b) T
120	120	HE AMOUNT OF THE CREDIT ALLOWED FOR EACH DONATION12
121	121	SHALL BE EQUAL TO THE FULL AMOUNT OF THE CREDIT THAT COULD HAVE13
122	122	BEEN CLAIMED FOR THE DONATION , BASED ON THE FAIR MARKET VALUE14
123	123	DETERMINED PURSUANT TO SUBSECTION (3)(c) OF THIS SECTION,15
124	124	PURSUANT TO THE APPLICABLE LAW IN EFFECT AT THE TIME OF THE16
125	125	DONATION.17
126	126	(c) T
127	127	HE FAIR MARKET VALUE OF THE DONATION SHALL BE THE18
128	128	LESSER OF:19
129	129	(I) T
130	130	HE FAIR MARKET VALUE OF THE CONSERVATION EASEMENT20
131	131	CONTRIBUTION ACCEPTED BY THE INTERNAL REVENUE SERVICE AS21
132	132	REFLECTED ON THE FEDERAL INCOME TAX FORM 8283 OR AMENDED BY A22
133	133	SUBSEQUENT FEDERAL APPEAL PROCESS , FEDERAL COURT, OR UNITED23
134	134	S
135	135	TATES TAX COURT RULING; OR24
136	136	(II) I
137	137	F THE DONATED REAL PROPERTY WAS PURCHASED BY THE25
138	138	DONOR, TWO HUNDRED FIFTY PERCENT OF THE DONOR 'S COST BASIS.26
139	139	(d) T
140	140	HE AMOUNT OF ANY CREDIT ALLOWED PURSUANT TO THIS27
141	141	SB22-119
142	142	-4- SECTION SHALL BE DECREASED BY ANY AMOUNT OF CREDIT THAT WAS1
143	143	OTHERWISE ALLOWED TO BE CLAIMED AGAINST THE TAXES IMPOSED BY2
144	144	THIS ARTICLE 22 OR OTHERWISE REINSTATED, AND BY ANY AMOUNT THAT3
145	145	WAS REIMBURSED OR OTHERWISE ALLOWED TO THE TRANSFEREE AS A4
146	146	RESULT OF A SETTLEMENT, LITIGATION, OR OTHER MEANS THAT PROVIDED5
147	147	COMPENSATION TO THE TRANSFEREE .6
148	148	(4) B
149	149	Y AUGUST 15, 2022, THE DEPARTMENT OF REVENUE SHALL7
150	150	MAKE READILY AVAILABLE ONLINE FOR ANY TAXPAYER WHO HAD A TAX8
151	151	CREDIT DENIED IN WHOLE OR IN PART FOR A CONSERVATION EASEMENT9
152	152	DONATED BETWEEN JANUARY 1, 2000, AND DECEMBER 31, 2013,10
153	153	INFORMATION THAT THE TAXPAYER MAY BE ELIGIBLE TO APPLY FOR A11
154	154	CREDIT PURSUANT TO THIS SECTION . THE INFORMATION MUST INCLUDE12
155	155	THE APPLICATION FORM AND PROCESS CREATED BY THE DIVISION13
156	156	PURSUANT TO SUBSECTION (5) OF THIS SECTION . THE ONLINE14
157	157	INFORMATION MUST OUTLINE THE PROCESS FOR APPLYING FOR A CREDIT15
158	158	AND THE CRITERIA USED TO DETERMI NE THE AMOUNT OF THE CREDIT .16
159	159	(5) A
160	160	TAXPAYER MUST SUBMIT A CLAIM FOR A CREDIT TO THE17
161	161	DIVISION OF CONSERVATION IN THE DEPARTMENT OF REGULATORY18
162	162	AGENCIES NO LATER THAN SEPTEMBER 30, 2023. THE CLAIM MUST BE19
163	163	SUBMITTED USING A FORM AND PROCESS CREATED BY THE DIVISION AND20
164	164	IN COORDINATION WITH THE WORKING GROUP CONVENED IN ACCOR DANCE21
165	165	WITH SECTION 12-15-106 (14.5). THE CLAIM MUST BE ACCOMPANIED BY22
166	166	THE FOLLOWING:23
167	167	(a) A
168	168	COPY OF THE FEDERAL INCOME TAX FORM 8283 USED TO24
169	169	SUBSTANTIATE A FEDERAL DEDUCTION FOR THE DONATED CONSERVATION25
170	170	EASEMENT;26
171	171	(b) I
172	172	F THE ORIGINAL AMOUNT OF DEDUCTION CLAIMED ON THE27
173	173	SB22-119
174	174	-5- FEDERAL INCOME TAX FORM 8283 WAS ADJUSTED, DOCUMENTATION1
175	175	CONFIRMING THE AMOUNT ULTIMATELY ALLOWED BY THE INTERNAL2
176	176	REVENUE SERVICE, A FEDERAL COURT, OR THE UNITED STATES TAX COURT3
177	177	AND CLAIMED BY MEANS OF AN ADJUSTED FEDERAL TAX RETURN4
178	178	ACCEPTED BY THE INTERNAL REVENUE SERVICE ; AND5
179	179	(c) D
180	180	OCUMENTATION CONFIRMING SETTLEMENT OF THE CREDIT6
181	181	AMOUNT ALLOWED BY THE DEPARTMENT OF REVENUE .7
182	182	(6) A
183	183	S USED IN THIS SECTION, "GOOD FAITH" MEANS THAT A8
184	184	PERSON OR ENTITY HONESTLY RELIED UPON A LICENSED PROFESSIONAL TO9
185	185	ESTABLISH THE VALUE OF A CONSERVATION EASEMENT , DID NOT10
186	186	KNOWINGLY MISREPRESENT THE VALUE OF THE CONSERVATION11
187	187	EASEMENT, AND FOLLOWED THE APPLICABLE LAWS AND REGULATIONS SET12
188	188	FORTH IN STATUTE, DEPARTMENT OF REVENUE RULES , AND THE FEDERAL13
189	189	INTERNAL REVENUE CODE AND FEDERAL DEPARTMENT OF TREASURY14
190	190	REGULATIONS IN EFFECT AT THE TIME OF THE CONVEYANCE OF THE15
191	191	CONSERVATION EASEMENT .16
192	192	(7) I
193	193	F A PERSON ELIGIBLE TO RECEIVE A CREDIT PURSUANT TO THIS17
194	194	SECTION IS NO LONGER LIVING, THE CREDIT MAY BE CLAIMED BY THE18
195	195	APPROPRIATE ESTATE, HEIR, SUCCESSOR, OR ASSIGNEE.19
196	196	(8) I
197	197	F MORE THAN ONE PERSON OR ENTITY HAS A CLAIM TO A20
198	198	CREDIT RELATED TO A PARTICULAR DONATION OF A CONSERVATION21
199	199	EASEMENT, CLAIMANTS MAY WORK TOGETHER TO COORDINATE THE22
200	200	APPROPRIATE DISTRIBUTION OF CREDITS.23
201	201	(9) I
202	202	F A TAXPAYER TRANSFERRED ALL OR A PORTION OF A TAX24
203	203	CREDIT FOR A CONSERVATION EASEMENT DONATION THAT QUALIFIES FOR25
204	204	A CREDIT PURSUANT TO THIS SECTION TO ANOTHER TAXPAYER AS26
205	205	TRANSFEREE PURSUANT TO SECTION 39-22-522 (7), THEN THE TRANSFEREE27
206	206	SB22-119
207	207	-6- MAY CLAIM A CREDIT PURSUANT TO THIS SECTION . THE TRANSFEROR AND1
208	208	ANY TRANSFEREES MAY SUBMIT CLAIMS FOR CREDITS PURSUANT TO THIS2
209	209	SECTION INDIVIDUALLY OR MUTUALLY AS A GROUP IF THEY AGREE UPON3
210	210	THE TERMS FOR DIVIDING THE CREDIT . APPLICANTS MUST ATTEMPT TO4
211	211	NOTIFY ANY OTHER TAXPAYER OR TRANSFEREE THAT WAS A PARTY TO THE5
212	212	TRANSFER THAT AN APPLICATION IS BEING MADE TO CLAIM A CREDIT6
213	213	PURSUANT TO THIS SECTION. ANY PARTY WHO RECEIVES SUCH NOTICE HAS7
214	214	NINETY DAYS FROM RECEIPT OF THE NOTICE TO FILE AN OBJECTION TO THE8
215	215	CLAIM FOR THE CREDIT. AN OBJECTION SHALL BE SUBMITTED IN THE FORM9
216	216	OF AN APPLICATION FOR A CREDIT AND SHALL SET FORTH THE PROPOSED10
217	217	ALTERNATIVE AMOUNT OR DISTRIBUTION OF THE CREDIT . THE AMOUNT OF11
218	218	COMPENSATION PROVIDED TO A TRANSFEREE SHALL NOT EXCEED THE12
219	219	AMOUNT PAID BY THE TRANSFEREE FOR THE CREDIT , LESS ANY AMOUNT13
220	220	THAT WAS REINSTATED, REIMBURSED, OR OTHERWISE ALLOWED TO THE14
221	221	TRANSFEREE AS A RESULT OF A SETTLEMENT , LITIGATION, OR OTHER15
222	222	MEANS THAT PROVIDED COMPENSATION TO THE TRANSFEREE UNLESS16
223	223	OTHERWISE MUTUALLY AGREED UPON BY THE PARTIES .17
224	224	(10) I
225	225	F AN OBJECTION TO A CLAIM FOR A CREDIT IS FILED18
226	226	PURSUANT TO SUBSECTION (9) OF THIS SECTION, THE DIVISION OF19
227	227	CONSERVATION SHALL REFER THE MATTER TO THE OMBUDSMAN20
228	228	DESIGNATED PURSUANT TO SECTION 12-15-108 FOR FINAL RESOLUTION OF21
229	229	ANY DISPUTES RELATED TO AMOUNTS TO BE ALLOWED PURSUANT TO THIS22
230	230	SECTION.23
231	231	(11) C
232	232	REDITS ALLOWED PURSUANT TO THIS SECTION ARE NOT24
233	233	REFUNDABLE, BUT MAY BE TRANSFERRED OR CARRIED FORWARD IN THE25
234	234	SAME MANNER AS CREDITS ALLOWED PURSUANT TO SECTION 39-22-52226
235	235	(4)(a)
236	236	FOR A PERIOD BEGINNING AT THE TIME OF THE ISSUANCE OF THE27
237	237	SB22-119
238	238	-7- CREDIT.1
239	239	SECTION 2. In Colorado Revised Statutes, add 12-15-108 as2
240	240	follows:3
241	241	12-15-108. Disputed credit claims - ombudsman. T
242	242	HE DIRECTOR4
243	243	OF THE DIVISION SHALL DESIGNATE A PERSON TO SERVE AS AN5
244	244	OMBUDSMAN TO MEDIATE OR OTHERWISE ASSIST CLAIMANTS OF TAX6
245	245	CREDITS IF AN OBJECTION TO A CLAIM FOR A TAX CREDIT HAS BEEN7
246	246	REFERRED TO THE OMBUDSMAN PURSUANT TO SECTION 39-22-522.7 (10).8
247	247	T
248	248	HE OMBUDSMAN MAY BE AN EMPLOYEE OF THE DIVISION OR ANOTHER9
249	249	PROFESSIONAL WITH KNOWLEDGE OF CONSERVATION EASEMENT10
250	250	TRANSACTIONS. IF THE PARTIES ARE UNABLE TO RESOLVE THEIR11
251	251	OBJECTIONS TO A CLAIM FOR A TAX CREDIT WITH THE ASSISTANCE OF THE12
252	252	OMBUDSMAN, THE OMBUDSMAN MAY REFER THE MATTER TO AN13
253	253	ARBITRATOR, AT THE EXPENSE OF THE DEPARTMENT OF REVENUE , TO14
254	254	COME TO A FINAL RESOLUTION OF THE DISPUTE. UPON FINAL RESOLUTION15
255	255	OF THE DISPUTE, THE OMBUDSMAN SHALL NOTIFY THE DEPARTMENT OF16
256	256	REVENUE OF THE TERMS OF THE RESOLUTION AND THE DEPARTMENT OF17
257	257	REVENUE SHALL ALLOW THE TAX CREDIT TO BE CLAIMED IN ACCORDANCE18
258	258	WITH SUCH TERMS AND SECTION 39-22-522.7.19
259	259	SECTION 3. Safety clause. The general assembly hereby finds,20
260	260	determines, and declares that this act is necessary for the immediate21
261	261	preservation of the public peace, health, or safety.22
262	262	SB22-119
263	263	-8-