State ordered to disclose appraiser investigations in conservation easements
Associated Press Writer
Vail, CO Colorado
DENVER – A group of landowners fighting to get records of alleged misdeeds by appraisers involved in conservation easements has won a lawsuit against the state after a judge ordered the Division of Real Estate to turn over its files.
The landowners told the judge the Colorado Department of Revenue unfairly challenged tax credits and deductions they took after donating conservation easements.
Property owners said the easements were valued by appraisers who were disciplined by the state. They said appraisers who falsely inflated appraisals should have been held responsible. They also said some of the appraisals may have been justified, but there is no way to find out without the files.
Denver District Court Judge Sheila A. Rappaport said the Board of Real Estate, which investigates complaints against appraisers, is not a law enforcement agency and that land owners suffered serious consequences as a result of their appraisals being challenged.
She gave the state 30 days to hand over files of appraisers William Milenski and John Stroh, who were disciplined by the board over allegations they inflated land values. Milenski was allowed to surrender his license in 2008 and avoid punishment and Stroh was given probation and a fine, according to state records.
J.D. Wright, president of Land Owners United, which represents 80 landowners fighting the state, asked Gov. Bill Ritter to cease all audits and reevaluate the state tax program after their tax credits were challenged by federal and state authorities because of faulty appraisals.
“We’ll at least get to see the charges brought against our appraisers,” Wright said after the ruling was issued.
The Division of Real Estate fought disclosure, claiming they were investigative files and background information used in the investigation.
Chris Lines, spokesman for the Department of Regulatory Agencies that oversees the division, said the agency is reviewing its options.
The governor’s office says the disputed credits total $100 million – money the state needs with a $1.5 billion budget deficit.
The administration wants to settle each case individually, which property owners said would require an admission of guilt.
Conservation easements guarantee that land will not be developed. They allow struggling farmers and ranchers to keep land in agricultural production. Property owners can write off easements as charitable contributions, and they keep title to the land.
State tax credits under the program jumped from $2.3 million in 2001 to $98 million in 2008, fueled in part by a change in 2003 that allowed the credits to be transferred and sold.
A report last year by legislative analysts put total credits from 2000 to 2007 that are in question at $274 million.
The Colorado Department of Revenue has notified 295 landowners and easement credit buyers that their credits were being disallowed because the easements were overvalued by state-licensed appraisers. It ordered them to pay the credits along with penalties and interest.