Legal Resources
2007
Index to
38-30.5-102. Conservation easement in gross
38-30.5-103. Nature of conservation
easements in gross.
38-30.5-104. Creation of
conservation easements in gross.
38-30.5-105. Residual estate.
38-30.5-106. Recordation upon public
records.
38-30.5-107. Release - termination.
38-30.5-108. Enforcement - remedies.
38-30.5-109. Taxation.
38-30.5-110. Other interests not impaired.
38-30.5-111. Validation.
39-1-102. Taxation
-General Provisions
39-1-103. Valuation Determination
39-22-522. Credit against tax -conservation easements.
38-30.5-102
- Conservation easement in gross.
"Conservation easement in gross", for the purposes of this article, means a
right in the owner of the easement to prohibit or
require a limitation upon or an obligation to perform
acts on or with respect to a land or water area or airspace above the land or water owned by the grantor appropriate to the
retaining or maintaining of such land, water, or
airspace, including improvements, predominantly in a natural,
scenic, or open condition, or for wildlife habitat, or for agricultural,
horticultural, recreational, forest, or other use or condition consistent
with the protection of open land having wholesome environmental quality
or life-sustaining ecological diversity, or appropriate to the conservation
and preservation of buildings, sites, or structures having historical,
architectural, or cultural interest or value.
38-30.5-103
- Nature of conservation easements in gross.
(1) A conservation easement in gross is an interest in real property freely transferable
in whole or in part for the purposes stated in section
38-30.5-102 and transferable by any lawful
method for the transfer of interests in real property
in this state.
(2) A conservation easement in gross shall not be deemed personal in nature and shall
constitute an interest in real property
notwithstanding that it may be negative in character.
(3) A conservation easement in gross shall be perpetual unless otherwise stated in the
instrument creating it.
(4) The particular characteristics of a conservation
easement in gross shall be those granted
or specified in the instrument creating the easement.
38-30.5-104
- Creation of conservation easements in gross.
(1) A conservation easement in gross may only be created by the record owners of the
surface of the land by a deed or other instrument of
(2) A conservation easement in gross may only be created through a grant to a
governmental entity or to a charitable organization
exempt under section 501 (c) (3) of the "Internal Revenue
Code of 1986", as amended, which organization was created at least two years prior to receipt of the conservation easement.
(3) Repealed effective July 1,1985.
(4) Conservation easements
relating to historical, architectural, or cultural
significance may only be applied to buildings, sites,
or structures which have been listed in the national register of
historic places or the state register of historic properties, which have been designated as a landmark by a local government or
landmarks commission under the provisions of the
ordinances of the locality involved, or which are listed
as contributing building sites or structures within a national, state, or locally designated historic district.
38-30.5-106
- Recordation upon public records. Instruments creating, assigning, or
otherwise transferring conservation easements in gross must be recorded upon the public records affecting
the ownership of real property in order to be valid
and shall be subject in all respects to the laws
relating to such recordation. conveyance specifically
stating the intention of the grantor to create such an
easement under this article.
38-30.5-107
- Release -termination.
Conservation easements in gross may, in whole or in part, be released, terminated,
extinguished, or abandoned by merger with the underlying fee interest
in the servient land or in any other manner in which
easements may be lawfully terminated, released,
extinguished, or abandoned.
38-30.5-108
- Enforcement -remedies.
(1) No conservation easement in gross shall be unenforceable by reason of lack of privity of contract or lack of
benefit to particular land or because not expressed as running with the land.
(2) Actual or threatened injury to or impairment of a conservation
easement in gross or the interest intended
for protection by such easement may be prohibited or
restrained by injunctive relief granted by any court
of competent jurisdiction in a proceeding initiated by the grantor or by an owner of the easement.
(3) In addition to the remedy of injunctive relief, the holder of a conservation easement in gross shall be entitled to recover
money damages for injury thereto or to the interest to be protected thereby.
In assessing such damages, there may be taken into account, in addition
to the cost of restoration and other usual rules of the law of damages,
the loss of scenic, aesthetic, and environmental values.
38-30.5-109
- Taxation.
Conservation easements in gross shall be subject to assessment, taxation, or exemption from taxation in accordance with general laws
applicable to the assessment and taxation of interests
in real property. Real property subject to one or more
conservation easements in gross shall be assessed, however, with due regard to the restricted uses to which the property may be devoted.
The valuation for assessment of a conservation easement
which is subject to assessment and taxation, plus the valuation
for assessment of lands subject to such easement, shall equal the valuation for assessment which would have been
determined as to such lands if there were no conservation easement.
38-30.5-110 - Other interests not impaired.
No interest in real property cognizable under the statutes, common law, or
custom in effect in this state prior to July 1, 1976,
nor any lease or sublease thereof at any time, nor any transfer
of a water right or any change of a point of diversion at any time shall be impaired, invalidated, or in any way adversely
affected by reason of any provision of this article.
No provision of this article shall be construed to
mean that conservation easements in gross were not lawful estates in land prior to July 1,1976. Nothing in this article shall be construed so as to
impair the rights of a public utility, as that term is
defined by section 40-1-103, C.R.S., with
respect to rights-of-way, easements, or other property
rights upon which facilities, plants, or systems of a public utility
are located or are to be located.
38-30.5-111
- Validation.
Any conservation easement in
gross created on or after July 1, 1976, but before
July 1, 1985, that would have been valid under this
article except for section 38-30.5-104 (3) is
valid and shall be a binding, legal, and enforceable
obligation.
39-1-102 -
Definitions.
As used in articles 1 to 13 of this title, unless the context otherwise requires:
(1) "Administrator" means
the property tax administrator.
(1.1) "Agricultural and livestock products" means plant or animal products
in a raw or unprocessed state that are derived from
the science and art of agriculture, regardless of the
use of the product after its sale and regardless of the entity that purchases the product. "Agriculture", for the
purposes of this subsection(1.1), means farming,
ranching, animal husbandry, and horticulture.
(1.3) "Agricultural equipment which is used on the farm or ranch in the
production of agricultural products" means any
personal property used on a farm or ranch, as defined in
subsections (3.5) and (13.5) of this section, for planting, growing, and harvesting agricultural products or for raising or
breeding livestock for the primary purpose of
obtaining a monetary profit and includes any mechanical system
used on the farm or ranch for the conveyance and storage of animal products
in a raw or unprocessed state, regardless of whether or not such mechanical
system is affixed to real property.
(1.6) (a) "Agricultural land", whether used by the owner of the
land or a lessee, means one of the following:
(I) A parcel of land, whether located in an incorporated or unincorporated area
and regardless of the uses for which such land is
zoned, that was used the previous two years and presently
is used as a farm or ranch, as defined in subsections (3.5) and(13.5) of this
section, or that is in the process of being restored through conservation
practices. Such land must have been classified or eligible for classification
as "agricultural land", consistent with this subsection
(1.6), during the ten years preceding the year of
assessment. Such land must continue to have actual
agricultural use. "Agricultural land" under
this subparagraph (I) includes land underlying any residential improvement
located on such agricultural land and also includes the land underlying
other improvements if such improvements are an integral part of the farm or ranch and if such other improvements and the
land area dedicated to such other improvements are
typically used as an ancillary part of the operation.
The use of a portion of such land for hunting, fishing, or other wildlife
purposes, for monetary profit or otherwise, shall not affect the classification of agricultural land. For purposes of
this subparagraph (I), a parcel of land shall be
"in the process of being restored through conservation
practices" if: The land has been placed in a conservation reserve
program established by the natural resource conservation service pursuant
to 7 U.S.C. secs. 1 to 5506; or a conservation plan
approved by the appropriate conservation district has been
implemented for the land for up to a period of ten
crop years as if the land has been placed in such a conservation reserve
program.
(II) A parcel of land that consists of at least forty acres, that is forest land, that
is used to produce tangible wood products that
originate from the productivity of such land for the primary purpose
of obtaining a monetary profit, that is subject to a forest management plan,
and that is not a farm or ranch, as defined in subsections (3.5) and(13.5) of this section. "Agricultural land"
under this subparagraph (II) includes land underlying
any residential improvement located on such agricultural
land.
(III) A parcel of land that consists of at least eighty acres, or of less than
eighty acres if such parcel does not contain any
residential improvements, and that is subject to a perpetual
conservation easement, if such land was classified by the assessor as agricultural land under subparagraph (I) or (II) of this
paragraph (a) at the time such easement was granted,
if the grant of the easement was to a qualified organization,
if the easement was granted exclusively for conservation purposes,
and if all current and contemplated future uses of the land are described
in the conservation easement. "Agricultural land" under this subparagraph (III) does not include any portion of such land
that is actually used for nonagricultural commercial
or residential purposes.
(IV) A parcel of land, whether located in an incorporated or unincorporated area
and regardless of the uses for which such land is zoned,
used as a farm or ranch, as defined in subsections
(3.5) and (13.5) of this section, if the owner of the land has a decreed right to appropriated water granted in accordance
with article 92 of title 37, C.R.S., or a final permit
to appropriated ground water granted in accordance
with article 90 of title 37, C.R.S., for purposes other than residential
purposes, and water appropriated under such right or permit shall be
and is used for the production of agricultural or livestock products on such land;
(V) A parcel of land, whether located in an incorporated or unincorporated area
and regardless of the uses for which such land is
zoned, that has been reclassified from agricultural land to
a classification other than agricultural land and that met the definition of agricultural land as set forth in subparagraphs (I) to
(IV) of this paragraph (a) during the three years
before the year of assessment. For purposes of this subparagraph
(V), the parcel of land need not have been classified or eligible for
classification as agricultural land during the ten years preceding the year of assessment as required by subparagraph (I) of this
paragraph (a).
(b) All other agricultural property
that does not meet the definition set forth in paragraph (a) of this subsection (1.6) shall be classified as all other
property and shall be valued using appropriate
consideration of the three approaches to appraisal based on its
actual use on the assessment date.
(c) An assessor must determine, based on sufficient
evidence, that a parcel of land does not qualify as agricultural
land, as defined in subparagraph (IV) of paragraph (a) of this subsection
(1.6), before land may be changed from agricultural land to any other
classification.
(2) "Assessor" means the elected assessor of a county, or his appointed
successor, and, in the case of the city and
(Editor's note: This
version of subsection (2) is effective until November15, 2001.)
(2) "Assessor" means the elected assessor of a county, or his or her appointed
successor, and, in the case of the city and
(Editor's note: This
version of subsection (2) is effective November 15,2001.)
(3) "Board" means the board of assessment appeals.
(3.2) "Conservation purpose"
means any of the following purposes as set forth in section 170(h) of the
federal "Internal Revenue Code of 1986", as amended:
(a) The preservation of land areas for outdoor recreation, the education of the public,
or the protection of a relatively natural habitat for
fish, wildlife, plants, or similar ecosystems; or
(b) The preservation of open space, including farmland and forest land, where such
preservation is for the scenic enjoyment of the public
or is pursuant to a clearly delineated federal, state, or
local government conservation policy and where such preservation will yield a significant public benefit.
(3.5) "Farm" means a parcel of land which is used to produce agricultural
products that originate from the land's productivity
for the primary purpose of obtaining a monetary profit.
(4) "Fixtures" means those articles which, although once movable chattels, have become an accessory to
and a part of real property by having been physically incorporated therein or annexed or affixed thereto. "Fixtures"
includes systems for the heating, air conditioning,
ventilation, sanitation, lighting, and plumbing of such
building. "Fixtures" does not include machinery, equipment,
or other articles related to a commercial or
industrial operation which are affixed to the real property
for proper utilization of such articles. In addition,
for property tax purposes only, "fixtures" does not include security devices and systems affixed to any
residential improvements, including but not limited to
security doors, security bars, and alarm systems.
(4.3) "Forest land" means land of which at least ten percent is
stocked by forest trees of any size and includes land
that formerly had such tree cover and that will be naturally or
artificially regenerated. "
(4.4) "Forest management plan" means an agreement which includes a
plan to aid the owner of forestland in increasing the health, vigor, and beauty
of such forest land through use of forest management
practices and which has been either executed between the owner
of forest land and the Colorado state forest service or executed between the owner of forest land and a professional forester
and has been reviewed and has received a favorable
recommendation from the Colorado state forest service. The
Colorado forest service shall annually inspect each parcel of land subject to a forest management plan to determine if the
terms and conditions of such plan are being complied
with and shall report by March 1 of each year to the assessor
in each affected county the legal descriptions of the properties and the names of their owners that are eligible for the agricultural classification. The report shall also contain
the legal descriptions of those properties and the
names of their owners that no longer qualify for the agricultural
classification because of noncompliance with their forest management
plans. No property shall be entitled to the agricultural classification
unless the legal description and the name of the owner appear on the report submitted by the
(4.5) "Forest management practices" means practices accepted by
professional foresters which control forest
establishment, composition, density, and growth for the purpose of
producing forest products and associated amenities following sound business methods and technical forestry principles.
(4.6) "Forest trees" means woody plants which have a well-developed
stem or stems, which are usually more than twelve feet
in height at maturity, and which have a generally well-defined
crown.
(5) Repealed.
(5.5) "Hotels and motels" means establishments which are primarily
engaged in providing lodging, camping, or personal
care or health care facilities and which are predominantly
used on an overnight or weekly basis.
(6) "Household furnishings"
means that personal property, other than fixtures, in residential
structures and buildings which is not used for the production of income at any time.
(7) "Improvements" means
all structures, buildings, fixtures, fences, and water rights erected upon or affixed
to land, whether or not title to such land has been acquired.
(7.2) "Inventories of merchandise
and materials and supplies which are held for consumption by a business or are
held primarily for sale" means those classes of personal property which
are held primarily for sale by a business, farm, or ranch, including components
of personal property to be held for sale, or which are held for consumption by
a business, farm, or ranch, or which are rented for thirty days or less. For
the purposes of this subsection (7.2), "personal property rented for
thirty days or less" means personal property rented for thirty days or
less which can be returned at the option of the person renting the property, in
a transaction on which the sales or use tax is actually collected before being
finally sold, whether or not such personal property is subject to depreciation.
It is the purpose of the general assembly to exempt "personal property
rented for thirty days or less" from property tax because of the
similarity of such property to inventories of merchandise held by retail
stores. Further, the general assembly intends this exemption to encompass a
transaction under a rental agreement in which the customer pays rent in order
to use an item for a brief period of time; it is not intended to encompass an
equipment lease contract covering a specific period of time and which includes
financial penalties for early cancellation. Except for "personal property
rented for thirty days or less", the term "inventories of merchandise
and materials and supplies which are held for consumption by a business or are
held primarily for sale" does not include personal property which is held
for rent or lease or is subject to an allowance for depreciation. For property
tax years commencing on or after January1, 1984, the term does include
inventory which is owned by and which is in the possession of the manufacturer
of such inventory unless:
(a) Such inventory is in the possession
of the manufacturer after having previously been leased by the manufacturer to
a customer; and
(b) Such manufacturer has not designated
such inventory for scrapping, substantial reconditioning, renovating, or
remanufacturing in accordance with its customary practices. For the purposes of
this paragraph (b), normal maintenance shall not constitute substantial
reconditioning, renovating, or remanufacturing.
(7.5) Repealed.
(7.8) "Livestock" includes
all animals.
(7.9) "Minerals in place"
means, without exception, metallic and nonmetallic mineral substances of every
kind while in the ground.
(8) "Mobile home" means a
manufactured home as defined in section 42-1-102
(106) (b), C.R.S.
(8.5) "Not for private gain or
corporate profit" means the ownership and use of property whereby no person
with any connection to the owner thereof shall receive any pecuniary benefit
except for reasonable compensation for services rendered and any excess income
over expenses derived from the operation or use of the property and all proceeds
from the sale of the property of the owner shall be devoted to the furthering
of any exempt purpose.
(8.7) "Perpetual conservation easement"
means a conservation easement in gross, as described in article 30.5 of title 38,C.R.S.,
that qualifies as a perpetual conservation restriction pursuant to section 170
(h) of the federal "Internal Revenue Code of 1986", as amended, and
any regulations issued there under.
(9) "Person" means natural
persons, corporations, partnerships, limited liability companies, associations,
and other legal entities which are or may become taxpayers by reason of the
ownership of taxable real or personal property.
(10) "Personal effects" means
such personal property as is or may be worn or carried on or about the person,
and such personal property as is usually associated with the person or customarily
used in personal hobby, sporting, or recreational activities and which is not
used for the production of income at any time.
(11) "Personal property"
means everything that is the subject of ownership and that is not included within
the term "real property". "Personal property" includes
machinery, equipment, and other articles related to a commercial or industrial
operation that are either affixed or not affixed to the real property for
proper utilization of such articles. Except as otherwise specified in articles
1 to 13 of this title, any pipeline, telecommunications line, utility line,
cable television line, or other similar business asset or article installed
through an easement, right-of-way, or leasehold for the purpose of commercial
or industrial operation and not for the enhancement of real property shall be
deemed to be personal property, including, without limitation, oil and gas
distribution and transmission pipelines, gathering system pipelines, flow lines,
process lines, and related water pipeline collection, transportation, and
distribution systems. Structures and other buildings installed on an easement,
right-of-way, or leasehold that are not specifically referenced in this subsection
(11) shall be deemed to be improvements pursuant to subsection(7)
of this section.
(12) "Political subdivision"
means any entity of government authorized by law to impose ad valorem taxes on
taxable property located within its territorial limits.
(12.1) Repealed.
(12.3) and (12.4) Repealed.
(12.5) "Professional forester"
means any person who has received a bachelor's or higher degree from an
accredited school of forestry.
(13) "Property" means both
real and personal property.
(13.2) "Qualified
organization" means a qualified organization as defined in section 170 (h)
(3) of the federal "Internal Revenue Code of 1986", as amended.
(13.5) "Ranch" means a parcel
of land which is used for grazing livestock for the primary purpose of obtaining
a monetary profit. For the purposes of this subsection
(13.5),"livestock" means domestic animals which are used for food for
human or animal consumption, breeding, draft, or profit.
(14) "Real property" means:
(a) All lands or interests in
lands to which title or the right of title has been acquired from the
government of the United States or from sovereign authority ratified by
treaties entered into by the United States, or from the state;
(b) All mines, quarries, and minerals
in and under the land, and all rights and privileges there unto appertaining;
and
(c) Improvements.
(14.3) "Residential improvements"
means a building, or that portion of a building, designed for use predominantly
as a place of residency by a person, a family, or families. The term includes
buildings, structures, fixtures, fences, amenities, and water rights which are
an integral part of the residential use. The term also includes mobile homes as
defined in section 38-29-102 (8) C.R.S., and
manufactured homes as defined in section 42-1-102 (106) (b), C.R.S.
(14.4) "Residential land"
means a parcel or contiguous parcels of land under common ownership upon which
residential improvements are located and which is used as a unit in conjunction
with the residential improvements located thereon. The term includes parcels of
land in a residential subdivision, the exclusive use of which land is
established by the ownership of such residential improvements. The term does
not include any portion of the land which is used for any purpose which would
cause the land to be otherwise classified. The term also does not include land
underlying a residential improvement located on agricultural land.
(14.5) "Residential real property"
means residential land and residential improvements but does not include hotels
and motels as defined in subsection (5.5) of this section.
39-1-103 -
Actual value determined - when.
Land that is valued as agricultural
and that becomes subject to a perpetual conservation
easement shall continue to be valued as agricultural notwithstanding its
dedication for conservation purposes; except that, if any portion of such land
is actually used for nonagricultural commercial or residential purposes, that
portion shall be valued according to such use. The actual value of residential
real property shall be determined solely by consideration of the market
approach to appraisal.
39-22-522 - Credit against tax
- conservation easements.
(1) For purposes of this section, "taxpayer" means a resident individual or a domestic or foreign corporation subject to the provisions of part 3 of this article, a partnership, S corporation, or other similar pass-through entity, estate, or trust that donates a conservation easement as an entity, and a partner, member, and subchapter S shareholder of such pass-through entity.
(2) For income tax years commencing on or after January 1, 2000, and, with regard to any credit over the amount of one hundred thousand dollars, for income tax years commencing on or after January 1, 2003, subject to the provisions of subsections (4) and (6) of this section, there shall be allowed a credit with respect to the income taxes imposed by this article to each taxpayer who donates during the taxable year all or part of the value of a perpetual conservation easement in gross created pursuant to article30.5 of title38, C.R.S., upon real property the taxpayer owns to a governmental entity or a charitable organization described in section 38-30.5-104 (2), C.R.S. The credit shall only be allowed for a donation that is eligible to qualify as a qualified conservation contribution pursuant to section 170 (h) of the internal revenue code, as amended, and any federal regulations promulgated in connection with such section. The amount of the credit shall not include the value of any portion of an easement on real property located in another state.
(3) In order for any taxpayer to qualify for the credit provided for in subsection (2) of this section, the taxpayer shall submit the following in a form approved by the executive director to the department of revenue at the same time as the taxpayer files a return for the taxable year in which the credit is claimed:
(a) A statement indicating whether a deduction was claimed on the taxpayer's federal income tax return for a conservation easement in gross;
(b) A statement that reflects the information included in the noncash charitable contributions form used to claim a deduction for a conservation easement in gross on a federal income tax return;
(c) A statement to be made available to the public by the department of revenue that includes a summary of the conservation purposes as defined in section 170 (h) of the internal revenue code that are protected by the easement; the county, township, and range where the easement is located; the number of acres subject to the easement; the amount of the tax credit claimed; and the name of the organization holding the easement;
(d) A summary of a qualified appraisal that meets the requirements set forth in subsection (3.3) of this section; however, if requested by the department of revenue, the taxpayer shall submit the appraisal itself;
(e) A sworn affidavit from the appraiser that includes:
(I) A statement specifying the value of the unencumbered property and the total value of the conservation easement in gross;
(II) If the appraisal separately allocates the values of sand and gravel, minerals, water, or improvements, a statement of the separate value of the sand and gravel, minerals, water, or improvements before and after the conservation easement in gross is granted;
(III) An acknowledgment specifying whether a subdivision analysis was the primary methodology used in the appraisal; and
(IV) A statement specifying how the appraiser satisfies qualified appraiser and licensing requirements set forth in subsection (3.3) of this section; and
(f) A sworn affidavit from the holder of the conservation easement in gross that includes the following:
(I) A copy of the information filed by the holder with the department of revenue, the department of agriculture, and the department of natural resources in accordance with section24-33-112, C.R.S.;
(II) An acknowledgment of whether the transaction is part of a series of transactions by the same donor; and
(III) An acknowledgment that the holder has reviewed the
completed
(3.3) The appraisal for a conservation easement in gross for which a credit is claimed shall be a qualified appraisal from a qualified appraiser, as those terms are defined in section 170 (f) (11) of the internal revenue code. The appraisal shall be in conformance with the uniform standards for professional appraisal practice promulgated by the appraisal standards board. The appraiser shall hold a valid license as a certified general appraiser in accordance with the provisions of part 7 of article61 of title12, C.R.S. If there is a final determination, other than by settlement of the taxpayer, that an appraisal submitted in connection with a claim for a credit pursuant to this section is a substantial or gross valuation misstatement as such misstatements are defined in section 1219 of the federal "Pension Protection Act of 2006", Pub.L. 109-280, the department shall submit a complaint regarding the misstatement to the board of real estate appraisers for disciplinary action in accordance with the provisions of part 7 of article61 of title12, C.R.S.
(3.5) The executive director shall have the authority, pursuant to subsection (8) of this section, to require additional information from the taxpayer or transferee regarding the appraisal value of the easement, the amount of the credit, and the validity of the credit. In resolving disputes regarding the validity or the amount of a credit allowed pursuant to subsection (2) of this section, including the value of the conservation easement for which the credit is granted, the executive director shall have the authority, for good cause shown, to review and accept or reject, in whole or in part, the appraisal value of the easement, the amount of the credit, and the validity of the credit based upon the internal revenue code and federal regulations in effect at the time of the donation. If the executive director reasonably believes that the appraisal represents a gross valuation misstatement, the executive director shall have the authority to require the taxpayer to provide a second appraisal at the expense of the taxpayer. In the event the executive director rejects, in whole or in part, the appraisal value of the easement, the amount of the credit, or the validity of the credit, the procedures described in sections39-21-103,39-21-104,39-21-104.5, and 39-21-105 shall apply.
(4) (a) (I) For a conservation easement in gross created in accordance with article30.5 of title38, C.R.S., that is donated prior to January 1, 2007, to a governmental entity or a charitable organization described in section 38-30.5-104 (2), C.R.S., the credit provided for in subsection (2) of this section shall be an amount equal to one hundred percent of the first one hundred thousand dollars of the fair market value of the donated portion of such conservation easement in gross when created, and forty percent of all amounts of the donation in excess of one hundred thousand dollars; except that in no case shall the credit exceed two hundred sixty thousand dollars per donation.
(II) For a conservation easement in gross created in accordance with article30.5 of title38, C.R.S., that is donated on or after January 1, 2007, to a governmental entity or a charitable organization described in section 38-30.5-104 (2), C.R.S., the credit provided for in subsection (2) of this section shall be an amount equal to fifty percent of the fair market value of the donated portion of such conservation easement in gross when created; except that in no case shall the credit exceed three hundred seventy-five thousand dollars per donation.
(III) In no event shall a credit claimed by a taxpayer filing a joint federal return, or the sum of the credits claimed by taxpayers filing married separate federal returns, exceed the dollar limitations of this paragraph (a).
(b) For income tax years commencing on or after January 1, 2000, in the case of a joint tenancy, tenancy in common, partnership, S corporation, or other similar entity or ownership group that donates a conservation easement as an entity or group, the amount of the credit allowed pursuant to subsection (2) of this section shall be allocated to the entity's owners, partners, members, or shareholders in proportion to the owners', partners', members', or shareholders' distributive shares of income or ownership percentage from such entity or group. For income tax years commencing on or after January 1, 2000, but prior to January 1, 2003, the total aggregate amount of the credit allocated to such owners, partners, members, and shareholders shall not exceed one hundred thousand dollars, and, if any refund is claimed pursuant to subparagraph (I) of paragraph (b) of subsection (5) of this section, the aggregate amount of the refund and the credit claimed by such partners, members, and shareholders shall not exceed twenty thousand dollars for that income tax year. For income tax years commencing on or after January 1, 2003, but prior to January 1, 2007, the total aggregate amount of the credit allocated to such owners, partners, members, and shareholders shall not exceed two hundred sixty thousand dollars, and, if any refund is claimed pursuant to subparagraph (I) of paragraph (b) of subsection (5) of this section, the aggregate amount of the refund and the credit claimed by such owners, partners, members, and shareholders shall not exceed fifty thousand dollars for that income tax year. For income tax years commencing on or after January 1, 2007, the total aggregate amount of the credit allocated to such owners, partners, members, and shareholders shall not exceed three hundred seventy-five thousand dollars, and, if any refund is claimed pursuant to subparagraph (I) of paragraph (b) of subsection (5) of this section, the aggregate amount of the refund and the credit claimed by such owners, partners, members, and shareholders shall not exceed fifty thousand dollars for that income tax year.
(5) (a) If the tax credit provided in this section exceeds the amount of income tax due on the income of the taxpayer for the taxable year, the amount of the credit not used as an offset against income taxes in said income tax year and not refunded pursuant to paragraph (b) of this subsection (5) may be carried forward and applied against the income tax due in each of the twenty succeeding income tax years but shall be first applied against the income tax due for the earliest of the income tax years possible. Any amount of the credit that is not used after said period shall not be refundable.
(b) (I) Subject to the requirements specified in subparagraphs (II) and (III) of this paragraph (b), for income tax years commencing on or after January 1, 2000, if the amount of the tax credit allowed in or carried forward to any tax year pursuant to this section exceeds the amount of income tax due on the income of the taxpayer for the year, the taxpayer may elect to have the amount of the credit not used as an offset against income taxes in said income tax year refunded to the taxpayer.
(II) A taxpayer may elect to claim a refund pursuant to subparagraph (I) of this paragraph (b) only if, based on the financial report prepared by the controller in accordance with section24-77-106.5, C.R.S., the controller certifies that the amount of state revenues for the state fiscal year ending in the income tax year for which the refund is claimed exceeds the limitation on state fiscal year spending imposed by section 20 (7) (a) of article X of the state constitution and the voters statewide either have not authorized the state to retain and spend all of the excess state revenues or have authorized the state to retain and spend only a portion of the excess state revenues for that fiscal year.
(III) If any refund is claimed pursuant to subparagraph (I) of this paragraph (b), then the aggregate amount of the refund and amount of the credit used as an offset against income taxes for that income tax year shall not exceed fifty thousand dollars for that income tax year. In the case of a partnership, S corporation, or other similar pass-through entity that donates a conservation easement as an entity, if any refund is claimed pursuant to subparagraph (I) of this paragraph (b), the aggregate amount of the refund and the credit claimed by the partners, members, or shareholders of the entity shall not exceed the dollar limitation set forth in this subparagraph (III) for that income tax year. Nothing in this subparagraph (III) shall limit a taxpayer's ability to claim a credit against taxes due in excess of fifty thousand dollars in accordance with subsection (4) of this section.
(6) A taxpayer may claim only one tax credit under this section per income tax year; except that a transferee of a tax credit under subsection (7) of this section may claim an unlimited number of credits. A taxpayer who has carried forward or elected to receive a refund of part of the tax credit in accordance with subsection (5) of this section shall not claim an additional tax credit under this section for any income tax year in which the taxpayer applies the amount carried forward against income tax due or receives a refund. A taxpayer who has transferred a credit to a transferee pursuant to subsection (7) of this section shall not claim an additional tax credit under this section for any income tax year in which the transferee uses such transferred credit.
(7) For income tax years commencing on or after January 1, 2000, a taxpayer may transfer all or a portion of a tax credit granted pursuant to subsection (2) of this section to another taxpayer for such other taxpayer, as transferee, to apply as a credit against the taxes imposed by this article subject to the following limitations:
(a) The taxpayer may only transfer such portion of the tax credit as the taxpayer has neither applied against the income taxes imposed by this article nor used to obtain a refund;
(b) The taxpayer may transfer a pro-rated portion of the tax credit to more than one transferee;
(c) A transferee may not elect to have any transferred credit refunded pursuant to paragraph (b) of subsection (5) of this section;
(d) For any tax year in which a tax credit is transferred pursuant to this subsection (7), both the taxpayer and the transferee shall file written statements with their income tax returns specifying the amount of the tax credit that has been transferred. A transferee may not claim a credit transferred pursuant to this subsection (7) unless the taxpayer's written statement verifies the amount of the tax credit claimed by the transferee.
(e) To the extent that a transferee paid value for the transfer of a conservation easement tax credit to such transferee, the transferee shall be deemed to have used the credit to pay, in whole or in part, the income tax obligation imposed on the transferee under this article, and to such extent the transferee's use of a tax credit from a transferor under this section to pay taxes owed shall not be deemed a reduction in the amount of income taxes imposed by this article on the transferee.
(f) The transferee shall submit to the department a form approved by the department. The transferee shall also file a copy of the form with the entity to whom the taxpayer donated the conservation easement.
(g) A transferee of a tax credit shall purchase the credit prior to the due date imposed by this article, not including any extensions, for filing the transferee's income tax return.
(h) A tax credit held by an individual either directly or as a result of a donation by a pass-through entity, but not a tax credit held by a transferee unless used by the transferee's estate for taxes owed by the estate, shall survive the death of the individual and may be claimed or transferred by the decedent's estate. This paragraph (h) shall apply to any tax credit from a donation of a conservation easement made on or after January 1, 2000.
(i) The donor of an easement for which a tax credit is claimed or the transferor of a tax credit transferred pursuant to this subsection (7) shall be the tax matters representative in all matters with respect to the credit. The tax matters representative shall be responsible for representing and binding the transferees with respect to all issues affecting the credit, including, but not limited to, the charitable contribution deduction, the appraisal, notifications and correspondence from and with the department of revenue, audit examinations, assessments or refunds, settlement agreements, and the statute of limitations. The transferee shall be subject to the same statute of limitations with respect to the credit as the transferor of the credit.
(j) Final resolution of disputes regarding the tax credit between the department of revenue and the tax matters representative, including final determinations, compromises, payment of additional taxes or refunds due, and administrative and judicial decisions, shall be binding on transferees.
(8) The executive director of the department of revenue may promulgate rules for the implementation of this section. Such rules shall be promulgated in accordance with article4 of title24, C.R.S.
(9) Any taxpayer who claims a credit for the donation of a conservation easement contrary to the provisions of this section shall be liable for such deficiencies, interest, and penalties as may be specified in this article or otherwise provided by law.
(10) On or before July 1, 2008, the department of revenue shall create a report, which shall be made available to the public, on the credits claimed in the previous year in accordance with this section. For each credit claimed for a conservation easement in gross, the report shall summarize by county where the easement is located, the acres under easement, the appraised value of the easement, the donated value of the easement, and the name of any holders of the easement; except that the department shall combine such information for multiple counties where necessary to ensure that the information for no fewer than three easements is summarized for any county or combination of counties in the report. The report shall be updated annually to reflect the same information for any additional credits that have been granted since the previous report.
(11) On or before December 31, 2007, the department of revenue shall create a report, which shall be made available to the public, with as much of the information specified in paragraph (c) of subsection (3) of this section as is available to the department, summarized by county, for each tax credit claimed for a conservation easement in gross for tax years commencing on or after January 1, 2000.
Source: L. 99: Entire section added, p. 976, § 1, effective August 4. L. 2000: (4), (5), and (6) amended and (7) and (8) added, p. 894, § 1, effective August 2. L. 2001: (1), (2), (3), (4), and (5)(b)(III) amended, p. 395, § 6, effective August 8; (1), (2), (3), (4), (5)(b)(III), (6), (7)(a), (7)(b) amended and (7)(e) and (7)(f) added, p. 901, § 1, effective January 1, 2003. L. 2002: (2) amended and (9) added, p. 510, § 1, effective August 7; (2) amended and (9) added, p. 511, § 2, effective January 1, 2003. L. 2005: (3.5), (7)(g), (7)(h), (7)(i), and (7)(j) added, pp. 1472, 1480, §§ 1, 2, effective June 7. L. 2006: (4) amended, p. 822, § 1, effective August 7. L. 2007: (3), (3.5), and (7)(i) amended and (3.3), (10), and (11) added, p. 1228, § 3, effective August 3.
Law reviews. For article, "The Unique Benefits of Conservation Easements in