Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
REVISED
This Version Includes All Amendments Adopted
on Second Reading in the Second House
LLS NO. 24-0505.01 Jed Franklin x5484
SENATE BILL 24-126
Senate Committees House Committees
Agriculture & Natural Resources Agri culture, Water & Natural Resources
Finance Finance
Appropriations Appropriations
A BILL FOR AN ACT
C
ONCERNING THE CONSERVATION EASEMENT INCOME TAX CREDIT ,101
AND, IN CONNECTION THEREWITH , EXTENDING THE102
CONSERVATION EASEMENT OV ERSIGHT COMMISSION AND THE103
CERTIFIED HOLDER PROGRAM INDEFINITELY , INCREASING THE104
LIMIT ON CONSERVATION EA SEMENT INCOME TAX CREDITS105
AVAILABLE TO DONORS IN ONE CALENDAR YEAR ,
ALLOWING106
MULTIPLE TRANSFERS OF CONSERVATION EASEMENT INCOME107
TAX CREDITS, AND MAKING AN APPROPRIATION .108
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
HOUSE
Amended 2nd Reading
May 6, 2024
SENATE
3rd Reading Unamended
April 17, 2024
SENATE
Amended 2nd Reading
April 16, 2024
SENATE SPONSORSHIP
Will and Winter F., Pelton R., Roberts, Bridges, Cutter, Fenberg, Fields, Hansen, Kolker,
Marchman, Priola, Rodriguez
HOUSE SPONSORSHIP
Lukens and Lynch, Armagost, Hartsook, Martinez, Velasco
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. http://leg.colorado.gov.)
Under current law, the conservation easement oversight
commission (commission) and the certified holder program (program) are
repealed on July 1, 2026. The bill eliminates the repeal dates to extend the
commission and program indefinitely.
There is currently a cap of $45 million for the total value of
conservation easement income tax credits (credits) that may be claimed
by and credited to donors of a conservation easement in one calendar
year. Credits filed after the cap is reached are placed on a wait list for the
next calendar year. The bill increases the cap to $75 million beginning in
calendar year 2025.
Current law provides that partnerships, S corporations, or other
similar entities (pass-through entities) may not be transferees of a credit.
The bill allows pass-through entities to be transferees of a credit
beginning on January 1, 2025. The bill also allows insurance companies
to purchase credits to offset insurance premium taxes.
Currently, a credit may be transferred once, in whole or in part,
from a donor to a transferee. The bill allows a transferee to transfer a
credit to a subsequent transferee beginning with the income tax year
starting on January 1, 2025.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. Legislative declaration. (1) The general assembly
2
hereby finds and declares that: 3
(a) Over the last sixty years, Colorado families have conserved4
over three million three hundred thousand acres of working farms,5
ranches, and private lands across the state; 6
(b) Since 2000, Colorado has proactively invested in conservation7
through the conservation easement tax credit program;8
(c) The conservation easement tax credit program incentivizes9
private landowners to voluntarily protect their properties, which creates10
public benefits to Colorado's lands, waters, wildlife, and people. 11
(d) The benefits of conservation are unique and wide-ranging.12
Conservation has contributed significantly to the protection of wildlife13
126-2- habitat, critical wetlands, urban open space, and working farms and1
ranches.2
(e) The conservation easement tax credit program has aided3
Colorado in reducing its carbon emissions and accomplishing its4
biodiversity goals, while supporting rural economic resiliency, benefiting5
all Coloradans;6
(f) In pursuit of greater equity in conservation, it is crucial to7
enhance programs that promote public benefits for all Coloradans; and8
(g) Equity in conservation requires ongoing collaboration with9
private landowners, state and federal public land managers, and counties10
and municipalities. Underscoring and investing in the inclusion of11
underserved communities, tribes, and historically marginalized land12
interests will further amplify these efforts.13
(2) Therefore, it is in the best interests of Coloradans to enhance14
the conservation easement tax credit program.15
SECTION 2. In Colorado Revised Statutes, 12-15-103, amend16
(1) introductory portion, (1)(a), (1)(d) introductory portion, and (1)(d)(I);17
repeal (8); and add (1)(d)(III) as follows:18
12-15-103. Conservation easement oversight commission -19
created. (1) There is created in the division a conservation easement20
oversight commission, referred to in this article 15 as the "commission".21
The commission is a type 2 entity, as defined in section 24-1-105, and22
exercises its powers and performs its duties and functions under the23
division. The commission consists of eight NINE members as follows:24
(a) One member representing the great outdoors Colorado25
program, appointed by and serving as an advisory, nonvoting member at26
the pleasure of the state board of the great outdoors Colorado trust fund27
126
-3- established in article XXVII of the state constitution; ONE VOTING1
MEMBER REPRESENTING THE GREAT OUTDOORS COLORADO TRUST FUND,2
APPOINTED BY AND SERVING AT THE PLEASURE OF THE EXECUTIVE3
DIRECTOR OF THE STATE BOARD OF THE GREAT OUTDOORS COLORADO4
TRUST FUND;5
(d) Three FOUR voting members appointed by the governor as6
follows:7
(I) Two voting representatives of certified conservation easement8
holders; and9
(III) A
VOTING INDIVIDUAL WHO MEETS THE DEFINITION OF
10
"
SOCIALLY DISADVANTAGED FARMER OR RANCHER " IN 7 U.S.C. SEC. 2279.
11
(8) This section is repealed, effective July 1, 2026.12
SECTION 3. In Colorado Revised Statutes, 12-15-104, repeal13
(13) as follows:14
12-15-104. Certification of conservation easement holders -15
rules - definition. (13) This section is repealed, effective July 1, 2026.16
SECTION 4. In Colorado Revised Statutes, 12-15-105, amend17
(1)(c) and (3) as follows:18
12-15-105. Conservation easement tax credit certificates -19
rules. (1) The division shall receive tax credit certificate applications20
from and issue certificates to landowners for income tax credits for21
conservation easements donated on or after January 1, 2011, in22
accordance with section 39-22-522 (2.5) and this article 15. Nothing in23
this section restricts or limits the authority of the division to enforce this24
article 15. The division may promulgate rules in accordance with article25
4 of title 24 for the issuance of the certificates. In promulgating rules, the26
division may include provisions governing:27
126
-4- (c) The notification to the public regarding the aggregate amount1
of tax credit certificates that have been issued and that are on the wait list2
pursuant to section 39-25-522 (2.5);3
(3) The division shall not issue tax credit certificates that in4
aggregate exceed the limit set forth in section 39-22-522 (2.5) during a5
particular calendar year. T
HE DIVISION MAY ISSUE MULTIPLE TAX CREDIT
6
CERTIFICATES FOR A SINGLE CONSERVATION EASEMENT AS REQUIRED BY7
SECTION 39-22-522.8
SECTION 5. In Colorado Revised Statutes, 12-15-106, amend9
(10) as follows:10
12-15-106. Conservation easement tax credit certificate11
application process - definitions - rules. (10) If the director and the12
commission do not identify any potential deficiencies with an application,13
the director and the commission shall approve the application, and the14
division shall issue a tax credit certificate to the landowner pursuant to15
section 12-15-105 in a timely manner so that the number of days between16
the date a completed application is received by the division and the date17
the tax credit certificate is issued does not exceed one hundred twenty18
days. Once a tax credit certificate is issued, the landowner may claim and19
use the tax credit subject to any other applicable procedures and20
requirements under title 39. T
HE DEADLINE PRESCRIBED BY THIS
21
SUBSECTION (10) MAY BE EXTENDED UPON MUTUAL AGREEMENT OF THE22
DIRECTOR, THE COMMISSION, AND THE LANDOWNER. 23
SECTION 6. In Colorado Revised Statutes, 38-30.5-103, add (7)24
as follows:25
38-30.5-103. Nature of conservation easements in gross. (7) A26
CONSERVATION EASEMENT IN GROSS IS A REAL PROPERTY INTEREST AS27
126
-5- DEFINED IN SECTION 38-30.5-102 THAT IS TO BE CREATED, ADMINISTERED,1
STEWARDED, ENFORCED, MODIFIED, AND TERMINATED PURSUANT TO THIS2
ARTICLE 30.5 AND, AS APPLICABLE, SECTION 39-22-522.3
SECTION 7. In Colorado Revised Statutes, 39-22-522, amend4
(2)(a), (2)(b), (2.5), (4)(a)(II.7), (4)(b)(II)(D), (5)(b)(II), (5)(b)(III), and5
(7.5)(a); and add (4)(a)(II.8), (4)(b)(II)(E), (12), (13), and (14) as6
follows:7
39-22-522. Credit against tax - conservation easements -8
definitions.9
10
(2) (a) For income tax years commencing on or after January 1,11
2000, but prior to January 1, 2014, and, with regard to any credit over the12
amount of one hundred thousand dollars, for income tax years13
commencing on or after January 1, 2003,
BUT BEFORE JANUARY 1, 2032,
14
subject to the provisions of subsections (4) and (6) of this section, there15
shall be allowed a credit with respect to the income taxes imposed by this16
article to each taxpayer who donates during the taxable year all or part of17
the value of a perpetual conservation easement in gross created pursuant18
to article 30.5 of title 38. C.R.S. upon real property the taxpayer owns to19
a governmental entity or a charitable organization described in section20
38-30.5-104 (2). C.R.S. The credit shall only be allowed for a donation21
that is eligible to qualify as a qualified conservation contribution pursuant22
to section 170 (h) of the internal revenue code, as amended, and any23
federal regulations promulgated in connection with such section. The24
amount of the credit shall not include the value of any portion of an25
easement on real property located in another state.26
(b) For income tax years commencing on or after January 1, 2014,27
126
-6- BUT BEFORE JANUARY 1, 2032, and, with regard to any credit over the1
amount of one hundred thousand dollars, for income tax years2
commencing on or after January 1, 2003,
BUT BEFORE JANUARY 1, 2032,
3
subject to the provisions of subsections (4) and (6) of this section, there4
shall be allowed a credit with respect to the income taxes imposed by this5
article to each taxpayer who donates during the taxable year all or part of6
the value of a perpetual conservation easement in gross created pursuant7
to article 30.5 of title 38. C.R.S. upon real property the taxpayer owns to8
a governmental entity or a charitable organization described in section9
38-30.5-104 (2). C.R.S. The credit shall only be allowed for a donation10
that meets the requirements of section 170 of the federal "Internal11
Revenue Code of 1986", as amended, and any federal regulations12
promulgated in accordance with such section. The amount of the credit13
shall not include the value of any portion of an easement on real property14
located in another state.15
(2.5) Notwithstanding any other provision of this section and the16
requirements of section 12-15-106, for income tax years commencing on17
or after January 1, 2011, a taxpayer conveying a conservation18
easement and claiming a credit pursuant to this section shall, in addition19
to any other requirements of this section and the requirements of section20
12-15-106, submit a claim for the credit to the division of conservation21
in the department of regulatory agencies. The division shall issue a22
certificate for the claims received in the order submitted. THE DIVISION23
MUST PRIORITIZE TAX CREDIT APPLICATIONS IN THE ORDER RECEIVED . THE24
DIVISION MUST ASSIGN EACH APPLICATION WITH THE DATE AND TIME25
RECEIVED BASED ON THE ORDER IN WHICH A COMPLETED APPLICATION26
WAS SUBMITTED PURSUANT TO SECTION 12-15-106 (5). INCOMPLETE27
126
-7- APPLICATIONS DO NOT GET PRIORITY IN THE REVIEW PROCESS .1
D
ISAPPROVED APPLICATIONS LOSE THEIR PRIORITY IN THE REVIEW
2
PROCESS. After certificates have been issued for credits that exceed an3
aggregate of twenty-two million dollars for all taxpayers for the 2011 and4
2012 calendar years, thirty-four million dollars for the 2013 calendar year,5
and forty-five million dollars for each OF THE 2014 TO 2024 calendar year6
thereafter YEARS, AND FIFTY MILLION DOLLARS FOR EACH OF THE7
2025
TO 2031 CALENDAR YEARS,
any claims that exceed the amount8
allowed for a specified calendar year shall be placed on a wait list in9
the order submitted and a certificate shall be issued for use of the credit10
in the next year for which the division has not issued credit certificates in11
excess of the amounts specified in this subsection (2.5). except that no12
more than fifteen million dollars in claims shall be placed on the wait list13
in any given calendar year. The division shall not issue credit certificates14
that exceed twenty-two million dollars in each of the 2011 and 201215
calendar years, thirty-four million dollars for the 2013 calendar year, and16
forty-five million dollars for each
OF THE 2014 TO 2024 calendar year
17
thereafter YEARS, AND FIFTY MILLION DOLLARS FOR EACH OF THE 202518
THROUGH 2031 CALENDAR YEARS. No claim for a credit is allowed for any19
income tax year commencing on or after January 1, 2011, unless a20
certificate has been issued by the division. If all other requirements under21
section 12-15-106 and this section are met, the right to claim the credit is22
vested in the taxpayer at the time a THE credit certificate is issued. IN THE23
CASE OF A TAX CREDIT CERTIFICATE ISSUED TO A TAXPAYER WHO FILES AN24
INCOME TAX RETURN FOR A TAX YEAR OTHER THAN A CALENDAR YEAR,25
THE CREDIT MUST BE USED IN THE INCOME TAX YEAR THAT BEGINS DURING26
THE CALENDAR YEAR FOR WHICH THE TAX CREDIT CERTIFICATE IS ISSUED.27
126
-8- (4) (a) (II.7) For a conservation easement in gross created in1
accordance with article 30.5 of title 38 that is donated on or after January2
1, 2021, to a governmental entity or a charitable organization described3
in section 38-30.5-104 (2), the credit provided for in subsection (2) of this4
section is an amount equal to:5
(A) F
OR CONSERVATION EASEMENTS DONATED ON OR AFTER
6
J
ANUARY 1, 2021, BUT BEFORE JANUARY 1, 2027, ninety percent of the fair
7
market value of the donated portion of such conservation easement in8
gross when created; except that in no case shall the credit exceed five9
million dollars per donation; Credits shall be issued in increments of no10
more than one million five hundred thousand dollars per year. Credits for11
easements donated in a prior year are eligible for tax credit certificates in12
subsequent years in order of application and before new applications and13
those credit applications, if any, on the wait list AND14
(B) F
OR CONSERVATION EASEMENTS DONATED ON OR AFTER
15
J
ANUARY 1, 2027,
EIGHTY PERCENT OF THE FAIR MARKET VALUE OF16
THE DONATED PORTION OF SUCH CONSERVATION EASEMENT IN GROSS17
WHEN CREATED; EXCEPT THAT IN NO CASE SHALL THE CREDIT EXCEED FIVE18
MILLION DOLLARS PER DONATION .19
(II.8) C
REDITS SHALL BE ISSUED IN INCREMENTS OF NO MORE THAN
20
ONE MILLION FIVE HUNDRED THOUSAND DOLLARS PER YEAR . CREDITS FOR21
EASEMENTS DONATED IN A PRIOR YEAR ARE ELIGIBLE FOR TAX CREDIT22
CERTIFICATES IN SUBSEQUENT YEARS IN ORDER OF APPLICATION .23
(b) (II) (D) For income tax years commencing on or after January24
1, 2015,
BUT BEFORE JANUARY 1, 2027, the total aggregate amount of the
25
credit allocated to such owners, partners, members, and shareholders shall26
not exceed five million dollars, and, if any refund is claimed pursuant to27
126
-9- subsection (5)(b)(I) of this section, the aggregate amount of the refund1
and the credit claimed by such owners, partners, members, and2
shareholders shall not exceed fifty thousand dollars for that income tax3
year.4
(E) F
OR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY
5
1,
2027,
THE TOTAL AGGREGATE AMOUNT OF THE CREDIT ALLOCATED6
TO SUCH OWNERS, PARTNERS, MEMBERS, AND SHAREHOLDERS SHALL NOT7
EXCEED FIVE MILLION DOLLARS , AND, IF ANY REFUND IS CLAIMED8
PURSUANT TO SUBSECTION (5)(b)(I) OF THIS SECTION, THE AGGREGATE9
AMOUNT OF THE REFUND AND THE CREDIT CLAIMED BY SUCH OWNERS ,10
PARTNERS, MEMBERS, AND SHAREHOLDERS SHALL NOT EXCEED TWO11
HUNDRED THOUSAND DOLLARS FOR THAT INCOME TAX YEAR .12
(5) (b) (II) (A) BEFORE JANUARY 1, 2027, a taxpayer may elect to13
claim a refund pursuant to subparagraph (I) of this paragraph (b)14
SUBSECTION (5)(b)(I) OF THIS SECTION only if, based on the financial15
report prepared by the controller in accordance with section 24-77-106.5,16
C.R.S., the controller certifies that the amount of state revenues for the17
state fiscal year ending in the income tax year for which the refund is18
claimed exceeds the limitation on state fiscal year spending imposed by19
section 20 (7)(a) of article X of the state constitution and the voters20
statewide either have not authorized the state to retain and spend all of the21
excess state revenues or have authorized the state to retain and spend only22
a portion of the excess state revenues for that fiscal year.23
(B) THIS SUBSECTION (5)(b)(II) IS REPEALED, EFFECTIVE24
DECEMBER 31, 2031.25
(III) If any refund is claimed pursuant to subsection (5)(b)(I) of26
this section, then the aggregate amount of the refund and amount of the27
126
-10- credit used as an offset against income taxes, excluding amounts1
transferred to or used by a transferee, for that income tax year shall not2
exceed fifty thousand dollars for that income tax year
FOR INCOME TAX
3
YEARS COMMENCING BEFORE JANUARY 1, 2027, AND SHALL NOT EXCEED4
TWO HUNDRED THOUSAND DOLLARS FOR THAT INCOME TAX YEAR FOR5
INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2027. In6
the case of a partnership, S corporation, or other similar pass-through7
entity that donates a conservation easement as an entity, if any refund is8
claimed pursuant to subsection (5)(b)(I) of this section, the aggregate9
amount of the refund and the credit claimed by the partners, members, or10
shareholders of the entity shall not exceed the dollar limitation set forth11
in this subsection (5)(b)(III) for that income tax year. Nothing in this12
subsection (5)(b)(III) shall limit a taxpayer's ability to claim a credit13
against taxes due in excess of fifty thousand dollars
FOR TAX YEARS
14
COMMENCING BEFORE JANUARY 1, 2027, AND TWO HUNDRED THOUSAND15
DOLLARS FOR TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2027, 16
in accordance with subsection (4) of this section.17
18
(7.5) (a) For income tax years commencing on or after January 1,19
2021, in lieu of a credit with respect to the income taxes imposed by20
this article 22, there is allowed a transferable expense amount to each21
qualified entity that donates during the taxable year all or part of the value22
of a perpetual conservation easement in gross created pursuant to article23
30.5 of title 38 upon real property the qualified entity owns to a24
governmental entity or a charitable organization described in section25
38-30.5-104 (2). A transferable expense amount shall be treated in all26
manners as a tax credit for purposes of this section, including provisions27
126
-11- governing the amount, valuation, and transfer of a tax credit; except that1
the transferable expense amount may only be transferred to a transferee2
to be claimed by the transferee as a credit pursuant to this section. A3
qualified entity may transfer a transferable expense amount to be claimed4
as a credit by a transferee pursuant to this section regardless of whether5
the qualified entity receives value in exchange for the transfer.6
(12) A
NY TRANSFEREE WHO IS SUBJECT TO THE TAX ON INSURANCE7
PREMIUMS ESTABLISHED BY SECTIONS 10-3-209, 10-5-111, AND 10-6-128,8
AND WHO IS THEREFORE EXEMPT FROM THE PAYMENT OF INCOME TAX AND9
WHO IS OTHERWISE ELIGIBLE TO CLAIM A TAX CREDIT PURSUANT TO THIS10
SECTION MAY CLAIM THE TAX CREDIT AND CARRY THE TAX CREDIT11
FORWARD AGAINST THE INSURANCE PREMIUM TAX
TO THE SAME12
EXTENT AS THE TRANSFEREE WOULD HAVE BEEN ABLE TO CLAIM OR CARRY13
FORWARD THE TAX CREDIT AGAINST INCOME TAX . ALL OTHER PROVISIONS14
OF THIS SECTION WITH RESPECT TO THE TAX CREDIT , INCLUDING THE15
AMOUNT AND ALLOCATION OF THE TAX CREDIT AND THE YEARS FOR WHICH16
THE TAX CREDIT MAY BE CLAIMED SHALL APPLY TO A TAX CREDIT17
CLAIMED PURSUANT TO THIS SECTION .18
(13) FOR ANY CONSERVATION EASEMENT GRANTED ON OR AFTER19
J
ANUARY 1, 2025, THE CONSERVATION EASEMENT
MAY INCLUDE A20
PROVISION PROVIDING THAT IF TECHNOLOGICAL OR LEGAL CHANGES21
ALLOW AN EXPANDED USE OF WIND AND SOLAR POWER GENERATION,22
TRANSMISSION, AND STORAGE TO BE COMPATIBLE WITH THE PROTECTION23
OF CONSERVATION VALUES CONSIDERED AS A WHOLE AND PURSUANT TO24
SECTION 170(h) OF THE INTERNAL REVENUE CODE AND ANY FEDERAL25
REGULATIONS PROMULGATED IN CONNECTION WITH SUCH SECTION , THEN26
THE HOLDER OF THE CONSERVATION EASEMENT MAY, IN ITS SOLE27
126
-12- DISCRETION, APPROVE EXPANDED WIND AND SOLAR POWER GENERATION,1
TRANSMISSION, OR STORAGE THAT IS COMPATIBLE WITH AND DOES NOT2
DIMINISH OR IMPAIR CONSERVATION VALUES .3
(14) T
HIS SECTION IS REPEALED, EFFECTIVE JANUARY 1, 2052.
4
SECTION 8. Appropriation. For the 2024-25 state fiscal year,5
$12,925 is appropriated to the department of regulatory agencies for use6
by the division of conservation. This appropriation is from the7
conservation cash fund created in section 12-15-107, C.R.S., and is based8
on an assumption that the division will require an additional 0.2 FTE. To9
implement this act, the division may use this appropriation for10
conservation easement program costs. 11
SECTION 9. Act subject to petition - effective date. This act12
takes effect at 12:01 a.m. on the day following the expiration of the13
ninety-day period after final adjournment of the general assembly; except14
that, if a referendum petition is filed pursuant to section 1 (3) of article V15
of the state constitution against this act or an item, section, or part of this16
act within such period, then the act, item, section, or part will not take17
effect unless approved by the people at the general election to be held in18
November 2024 and, in such case, will take effect on the date of the19
official declaration of the vote thereon by the governor.20
126
-13-