Key conservation tool under scrutiny
EAGLE COUNTY ” Proposed changes to federal tax laws could make open space purchases in Eagle County much more difficult, conservation advocates say.
The U.S. Congress’s Joint Committee on Taxation wants to cut down on abuse of conservation easements ” a voluntary agreement that allows private landowners to sell the right to develop their land in exchange for lower property taxes.
The committee has suggested reducing the tax benefit for conservation easements, or forbidding landowners from continuing to live on the land once it has been protected by a conservation easement.
Conservation easements have been used in several open space purchases in Eagle County, including the preservation of the 4,800-acre Bair Ranch property that straddles Eagle and Garfield counties.
Restrictions like those the tax committee suggested probably would have killed the Bair Ranch deal, said Cindy Cohagen, executive director of the Eagle Valley Land Trust. The Bair Family continues to live on part of the property and use it as a working ranch.
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“We support strong reforms to prevent abuse of existing laws,” Cohagen said. “The proposals of the (finance committee) do not do that. Rather, they punish all donors, fail to identify the abusers and they absolutely wreak havoc with voluntary land conservation.”
Much of the property being eyed for open space purchases ” and development ” in Eagle County is ranchland. The Yampa Valley Land Trust in neighboring Routt County also uses conservation easements to convince ranch owners to sell their development rights.
Forbidding ranch owners from continuing to work and live on the land would “certainly diminish the interest, if not eliminate interest, in conservation easements,” Cohagen said.
Some property owners have taken advantage of conservation easements by overvaluing their land and receiving huge tax deductions in return, Cohagen said. In other instances, property owners have received tax deductions for land that doesn’t really have conservation value, like golf courses, said Russell Shay, director of public policy for the Land Trust Alliance, a national coalition of land trusts based in Washington, D.C.
Shay and Cohagen agreed that some reforms to the tax law are a good idea and would curtail these abuses. The finance committee wants land trusts to be monitored by a federal agency, much like hospitals are.
The Land Trust Alliance is trying to create a watchdog group that would ensure land trusts are operating well. That would be preferable to creating a governmental agency to do the job, Shay said.
The committee also wants more scrutiny for appraisals of conservation easements.
“We would go so far as to support legislation that would include penalties for bad appraisals,” Cohagen said.
In June, the Western Governors’ Association passed a resolution opposing the finance committee’s recommendation to reduce or eliminate tax deductions for conservation easements. Colorado Gov. Bill Owens is a member of that association.
The Land Trust Alliance is rallying legislators to support the current tax benefits that come with conservation easements, Shay said.
Congress typically passes several new tax laws in September, when federal officials have a better idea of what the federal deficit for the year will be. The new tax laws are aimed at filling in that deficit, Shay said.
Without conservation easements, the most common way land truss secure open space purchases is by raising money to buy the land at market value. As real estate prices continue to climb in Eagle County, that technique is less successful.
“If all this passes, It will become very difficult to purchase any open space,” Shay said.
Staff Writer Tamara Miller can be reached at 949-0555, ext. 607, or firstname.lastname@example.org.
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