Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 22-0766.01 Jason Gelender x4330
SENATE BILL 22-119
Senate Committees House Committees
Finance
A BILL FOR AN ACT
C
ONCERNING CONSERVATION EASEMENTS , AND, IN CONNECTION101
THEREWITH, ALLOWING TAXPAYERS WHO WERE PREVIOUSLY102
DENIED A STATE INCOME TAX CREDIT FOR DONATING103
CONSERVATION EASEMENTS TO CLAIM AN INCOME TAX CREDIT104
FOR THOSE DONATIONS IF SP ECIFIED REQUIREMENTS ARE105
SATISFIED.106
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill creates a new state income tax credit (new credit) for
SENATE SPONSORSHIP
Simpson and Winter,
HOUSE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. certain taxpayers who were denied state income tax credits for
conservation easements donated between 2000 and 2013 (original credit)
if the federal internal revenue service allowed a federal income tax
deduction for the same donation. A donation is eligible for the new credit
only if the land subject to the donated conservation easement for which
the original credits were disallowed was owned by the landowner, a
family member of the landowner, or a trust or other legal entity controlled
by the landowner or one or more members of the family of the landowner
for not less than 3 consecutive years prior to the date of the donation.
The amount of the new credit is based upon the amount of the
original credit that could have been claimed at the time of the original
donation based upon the value of the donation accepted by the internal
revenue service; except that the fair market value of the land used to
calculate the value of the new credit cannot exceed 250% of the donor's
cost basis in the land subject to the donated conservation easement. The
amount of the new credit is reduced by any amount that was allowed to
be claimed against Colorado income tax or otherwise reinstated to the
claimant of the original credit. The new credit is not refundable but may
be carried forward or transferred in the same manner as the original
credit. The department of revenue is required to make information about
the new credit available online.
The bill establishes a process for applying to the division of
conservation to claim the new credit. If the original credit that was denied
was transferred to another taxpayer as transferee, the bill provides a
process for all parties to the transaction to submit a mutual application to
claim the new credit or, if there is objection, an ombudsman process to
resolve disputes about the distribution of the credit.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 39-22-522.7 as2
follows:3
39-22-522.7. Conservation easement tax credits - credit for4
previously denied claims - rules - legislative declaration - intent -5
definition. (1) T
HE GENERAL ASSEMBLY HEREBY FINDS AND DECLARES6
THAT:7
(a) I
T IS THE INTENT OF THE GENERAL ASSEMBLY TO PROVIDE8
RELIEF THAT WILL REPAIR THE HARM CAUSED BY THE DEPARTMENT OF9
REVENUE'S DISALLOWANCE OF COLORADO CONSERVATION EASEMENT TAX10
SB22-119-2- CREDITS TO LANDOWNERS WHO IN GOOD FAITH , SUBJECT TO SUBSECTION1
(6)
OF THIS SECTION, CONVEYED CONSERVATION EASEMENTS TO2
QUALIFIED CONSERVATION EASEMENT HOLDERS BETWEEN JANUARY 1,3
2000,
AND DECEMBER 31, 2013;4
(b) S
TATE REPRESENTATIVE KIMMI LEWIS FROM HOUSE DISTRICT5
64,
WHO PASSED AWAY IN DECEMBER 2019, WORKED TIRELESSLY DURING6
HER CAREER AS A LEGISLATOR TO PROVIDE HELP TO LANDOWNERS WHO7
HAD CONSERVATION EASEMENT CREDITS ARBITRARILY DISALLOWED ; AND8
(c) R
ESOLUTION OF THIS HARM BY ALLOWING A LANDOWNER TO9
CLAIM A TAX CREDIT, OR PURSUE EXTINGUISHMENT, FOR A CONSERVATION10
EASEMENT DONATION THAT WAS ACCEPTED BY THE FEDERAL INTERNAL11
REVENUE SERVICE AND CONVEYED IN GOOD FAITH SUBJECT TO12
SUBSECTION (5) OF THIS SECTION, BUT ULTIMATELY DENIED BY THE STATE,13
WILL END THE NEARLY TWO-DECADES-LONG CONFLICT OVER COLORADO'S14
CONSERVATION EASEMENT TAX CREDIT PROGRAM , RESTORE THE15
INTEGRITY OF THE PROGRAM , AND ALLOW THE PROGRAM TO MOVE16
FORWARD TO CONTINUE THE GOOD WORK OF CONSERVING COLORADO'S17
INCREASINGLY LIMITED OPEN SPACE AND NATURAL RESOURCES .18
(2) N
OTWITHSTANDING ANY OTHER PROVISION OF LAW AND19
SUBJECT TO THE REQUIREMENTS AND LIMITATIONS SET FORTH IN20
SUBSECTION (3) OF THIS SECTION, A LANDOWNER SHALL BE ALLOWED TO21
CLAIM A TAX CREDIT WITH RESPECT TO THE INCOME TAXES IMPOSED BY22
THIS ARTICLE 22 FOR EACH PERPETUAL CONSERVATION EASEMENT IN23
GROSS DONATED IN GOOD FAITH BETWEEN JANUARY 1, 2000, AND24
D
ECEMBER 31, 2013, FOR WHICH A TAX CREDIT WAS CLAIMED PURSUANT25
TO SECTION 39-22-522 AND WAS DENIED IN WHOLE OR IN PART IF A26
FEDERAL CONSERVATION EASEMENT TAX DEDUCTION WAS ACCEPTED BY27
SB22-119
-3- THE FEDERAL INTERNAL REVENUE SERVICE FOR THE SAME DONATION .1
(3) (a) A
DONATION OF A PERPETUAL CONSERVATION EASEMENT2
IN GROSS IS ELIGIBLE FOR THE CREDIT ALLOWED BY SUBSECTION (2) OF3
THIS SECTION ONLY IF THE LAND SUBJECT TO THE PERPETUAL4
CONSERVATION EASEMENT IN GROSS FOR WHICH THE INITIAL CREDITS5
WERE DISALLOWED WAS OWNED BY THE LANDOWNER , A FAMILY MEMBER6
OF THE LANDOWNER, OR A TRUST OR OTHER LEGAL ENTITY CONTROLLED7
BY THE LANDOWNER OR ONE OR MORE MEMBERS OF THE FAMILY OF THE8
LANDOWNER FOR NOT LESS THAN THREE CONSECUTIVE YEARS PRIOR TO9
THE DATE OF THE DONATION OF THE PERPETUAL CONSERVATION10
EASEMENT IN GROSS.11
(b) T
HE AMOUNT OF THE CREDIT ALLOWED FOR EACH DONATION12
SHALL BE EQUAL TO THE FULL AMOUNT OF THE CREDIT THAT COULD HAVE13
BEEN CLAIMED FOR THE DONATION , BASED ON THE FAIR MARKET VALUE14
DETERMINED PURSUANT TO SUBSECTION (3)(c) OF THIS SECTION,15
PURSUANT TO THE APPLICABLE LAW IN EFFECT AT THE TIME OF THE16
DONATION.17
(c) T
HE FAIR MARKET VALUE OF THE DONATION SHALL BE THE18
LESSER OF:19
(I) T
HE FAIR MARKET VALUE OF THE CONSERVATION EASEMENT20
CONTRIBUTION ACCEPTED BY THE INTERNAL REVENUE SERVICE AS21
REFLECTED ON THE FEDERAL INCOME TAX FORM 8283 OR AMENDED BY A22
SUBSEQUENT FEDERAL APPEAL PROCESS , FEDERAL COURT, OR UNITED23
S
TATES TAX COURT RULING; OR24
(II) I
F THE DONATED REAL PROPERTY WAS PURCHASED BY THE25
DONOR, TWO HUNDRED FIFTY PERCENT OF THE DONOR 'S COST BASIS.26
(d) T
HE AMOUNT OF ANY CREDIT ALLOWED PURSUANT TO THIS27
SB22-119
-4- SECTION SHALL BE DECREASED BY ANY AMOUNT OF CREDIT THAT WAS1
OTHERWISE ALLOWED TO BE CLAIMED AGAINST THE TAXES IMPOSED BY2
THIS ARTICLE 22 OR OTHERWISE REINSTATED, AND BY ANY AMOUNT THAT3
WAS REIMBURSED OR OTHERWISE ALLOWED TO THE TRANSFEREE AS A4
RESULT OF A SETTLEMENT, LITIGATION, OR OTHER MEANS THAT PROVIDED5
COMPENSATION TO THE TRANSFEREE .6
(4) B
Y AUGUST 15, 2022, THE DEPARTMENT OF REVENUE SHALL7
MAKE READILY AVAILABLE ONLINE FOR ANY TAXPAYER WHO HAD A TAX8
CREDIT DENIED IN WHOLE OR IN PART FOR A CONSERVATION EASEMENT9
DONATED BETWEEN JANUARY 1, 2000, AND DECEMBER 31, 2013,10
INFORMATION THAT THE TAXPAYER MAY BE ELIGIBLE TO APPLY FOR A11
CREDIT PURSUANT TO THIS SECTION . THE INFORMATION MUST INCLUDE12
THE APPLICATION FORM AND PROCESS CREATED BY THE DIVISION13
PURSUANT TO SUBSECTION (5) OF THIS SECTION . THE ONLINE14
INFORMATION MUST OUTLINE THE PROCESS FOR APPLYING FOR A CREDIT15
AND THE CRITERIA USED TO DETERMI NE THE AMOUNT OF THE CREDIT .16
(5) A
TAXPAYER MUST SUBMIT A CLAIM FOR A CREDIT TO THE17
DIVISION OF CONSERVATION IN THE DEPARTMENT OF REGULATORY18
AGENCIES NO LATER THAN SEPTEMBER 30, 2023. THE CLAIM MUST BE19
SUBMITTED USING A FORM AND PROCESS CREATED BY THE DIVISION AND20
IN COORDINATION WITH THE WORKING GROUP CONVENED IN ACCOR DANCE21
WITH SECTION 12-15-106 (14.5). THE CLAIM MUST BE ACCOMPANIED BY22
THE FOLLOWING:23
(a) A
COPY OF THE FEDERAL INCOME TAX FORM 8283 USED TO24
SUBSTANTIATE A FEDERAL DEDUCTION FOR THE DONATED CONSERVATION25
EASEMENT;26
(b) I
F THE ORIGINAL AMOUNT OF DEDUCTION CLAIMED ON THE27
SB22-119
-5- FEDERAL INCOME TAX FORM 8283 WAS ADJUSTED, DOCUMENTATION1
CONFIRMING THE AMOUNT ULTIMATELY ALLOWED BY THE INTERNAL2
REVENUE SERVICE, A FEDERAL COURT, OR THE UNITED STATES TAX COURT3
AND CLAIMED BY MEANS OF AN ADJUSTED FEDERAL TAX RETURN4
ACCEPTED BY THE INTERNAL REVENUE SERVICE ; AND5
(c) D
OCUMENTATION CONFIRMING SETTLEMENT OF THE CREDIT6
AMOUNT ALLOWED BY THE DEPARTMENT OF REVENUE .7
(6) A
S USED IN THIS SECTION, "GOOD FAITH" MEANS THAT A8
PERSON OR ENTITY HONESTLY RELIED UPON A LICENSED PROFESSIONAL TO9
ESTABLISH THE VALUE OF A CONSERVATION EASEMENT , DID NOT10
KNOWINGLY MISREPRESENT THE VALUE OF THE CONSERVATION11
EASEMENT, AND FOLLOWED THE APPLICABLE LAWS AND REGULATIONS SET12
FORTH IN STATUTE, DEPARTMENT OF REVENUE RULES , AND THE FEDERAL13
INTERNAL REVENUE CODE AND FEDERAL DEPARTMENT OF TREASURY14
REGULATIONS IN EFFECT AT THE TIME OF THE CONVEYANCE OF THE15
CONSERVATION EASEMENT .16
(7) I
F A PERSON ELIGIBLE TO RECEIVE A CREDIT PURSUANT TO THIS17
SECTION IS NO LONGER LIVING, THE CREDIT MAY BE CLAIMED BY THE18
APPROPRIATE ESTATE, HEIR, SUCCESSOR, OR ASSIGNEE.19
(8) I
F MORE THAN ONE PERSON OR ENTITY HAS A CLAIM TO A20
CREDIT RELATED TO A PARTICULAR DONATION OF A CONSERVATION21
EASEMENT, CLAIMANTS MAY WORK TOGETHER TO COORDINATE THE22
APPROPRIATE DISTRIBUTION OF CREDITS.23
(9) I
F A TAXPAYER TRANSFERRED ALL OR A PORTION OF A TAX24
CREDIT FOR A CONSERVATION EASEMENT DONATION THAT QUALIFIES FOR25
A CREDIT PURSUANT TO THIS SECTION TO ANOTHER TAXPAYER AS26
TRANSFEREE PURSUANT TO SECTION 39-22-522 (7), THEN THE TRANSFEREE27
SB22-119
-6- MAY CLAIM A CREDIT PURSUANT TO THIS SECTION . THE TRANSFEROR AND1
ANY TRANSFEREES MAY SUBMIT CLAIMS FOR CREDITS PURSUANT TO THIS2
SECTION INDIVIDUALLY OR MUTUALLY AS A GROUP IF THEY AGREE UPON3
THE TERMS FOR DIVIDING THE CREDIT . APPLICANTS MUST ATTEMPT TO4
NOTIFY ANY OTHER TAXPAYER OR TRANSFEREE THAT WAS A PARTY TO THE5
TRANSFER THAT AN APPLICATION IS BEING MADE TO CLAIM A CREDIT6
PURSUANT TO THIS SECTION. ANY PARTY WHO RECEIVES SUCH NOTICE HAS7
NINETY DAYS FROM RECEIPT OF THE NOTICE TO FILE AN OBJECTION TO THE8
CLAIM FOR THE CREDIT. AN OBJECTION SHALL BE SUBMITTED IN THE FORM9
OF AN APPLICATION FOR A CREDIT AND SHALL SET FORTH THE PROPOSED10
ALTERNATIVE AMOUNT OR DISTRIBUTION OF THE CREDIT . THE AMOUNT OF11
COMPENSATION PROVIDED TO A TRANSFEREE SHALL NOT EXCEED THE12
AMOUNT PAID BY THE TRANSFEREE FOR THE CREDIT , LESS ANY AMOUNT13
THAT WAS REINSTATED, REIMBURSED, OR OTHERWISE ALLOWED TO THE14
TRANSFEREE AS A RESULT OF A SETTLEMENT , LITIGATION, OR OTHER15
MEANS THAT PROVIDED COMPENSATION TO THE TRANSFEREE UNLESS16
OTHERWISE MUTUALLY AGREED UPON BY THE PARTIES .17
(10) I
F AN OBJECTION TO A CLAIM FOR A CREDIT IS FILED18
PURSUANT TO SUBSECTION (9) OF THIS SECTION, THE DIVISION OF19
CONSERVATION SHALL REFER THE MATTER TO THE OMBUDSMAN20
DESIGNATED PURSUANT TO SECTION 12-15-108 FOR FINAL RESOLUTION OF21
ANY DISPUTES RELATED TO AMOUNTS TO BE ALLOWED PURSUANT TO THIS22
SECTION.23
(11) C
REDITS ALLOWED PURSUANT TO THIS SECTION ARE NOT24
REFUNDABLE, BUT MAY BE TRANSFERRED OR CARRIED FORWARD IN THE25
SAME MANNER AS CREDITS ALLOWED PURSUANT TO SECTION 39-22-52226
(4)(a)
FOR A PERIOD BEGINNING AT THE TIME OF THE ISSUANCE OF THE27
SB22-119
-7- CREDIT.1
SECTION 2. In Colorado Revised Statutes, add 12-15-108 as2
follows:3
12-15-108. Disputed credit claims - ombudsman. T
HE DIRECTOR4
OF THE DIVISION SHALL DESIGNATE A PERSON TO SERVE AS AN5
OMBUDSMAN TO MEDIATE OR OTHERWISE ASSIST CLAIMANTS OF TAX6
CREDITS IF AN OBJECTION TO A CLAIM FOR A TAX CREDIT HAS BEEN7
REFERRED TO THE OMBUDSMAN PURSUANT TO SECTION 39-22-522.7 (10).8
T
HE OMBUDSMAN MAY BE AN EMPLOYEE OF THE DIVISION OR ANOTHER9
PROFESSIONAL WITH KNOWLEDGE OF CONSERVATION EASEMENT10
TRANSACTIONS. IF THE PARTIES ARE UNABLE TO RESOLVE THEIR11
OBJECTIONS TO A CLAIM FOR A TAX CREDIT WITH THE ASSISTANCE OF THE12
OMBUDSMAN, THE OMBUDSMAN MAY REFER THE MATTER TO AN13
ARBITRATOR, AT THE EXPENSE OF THE DEPARTMENT OF REVENUE , TO14
COME TO A FINAL RESOLUTION OF THE DISPUTE. UPON FINAL RESOLUTION15
OF THE DISPUTE, THE OMBUDSMAN SHALL NOTIFY THE DEPARTMENT OF16
REVENUE OF THE TERMS OF THE RESOLUTION AND THE DEPARTMENT OF17
REVENUE SHALL ALLOW THE TAX CREDIT TO BE CLAIMED IN ACCORDANCE18
WITH SUCH TERMS AND SECTION 39-22-522.7.19
SECTION 3. Safety clause. The general assembly hereby finds,20
determines, and declares that this act is necessary for the immediate21
preservation of the public peace, health, or safety.22
SB22-119
-8-