Lee Hancock, conservation easement consultant who manages the conservation easement program for the Lower Arkansas Valley Water Conservancy district, explained the new House Bill 19-1264 at last week's district meeting.
Conservation easements were developed to protect rural land from being subdivided or developed. A landowner enters into an agreement not to subdivide or sell his land. The property is visited annually to make sure the easement is maintained. The ranch remains with the family who sought the easement, but with the goal of protecting open space, water and wildlife habitat forever. The original intent was to contain urbanization of farmland, but in Southeast Colorado, urban encroachment is not so much a problem.
HB19-1264 deals with three categories of problems with conservation easements: orphaned easements, aggrieved landowner payments, and alternative valuation method.
An orphaned easement may be non-functioning but not legally dissolved; functioning but documentation has been submitted to the Division of Conservation that the landowner is are unable to fulfill the required obligation; or the owners have not fulfilled monitoring obligations for three consecutive years. In such cases, the division contracts with certified easement holders to assign the conservation easement to satisfy proper monitoring and stewardship obligations.
“The LAVWCD may consider monitoring these orphaned easements,” said District Director Jay Winner. The funding will be absorbed from the $45 million dollar cap allocated for tax credits through the Division of Conservation.
The aggrieved landowner payments are to landowners who have conveyed a conservation easement in good faith but were denied in part or whole between Jan. 1, 2000, and Dec. 31, 2013. Compensation will be based on the following criteria: fair market value of the easement contribution claimed on the Federal 8283 at the time of the recorded easement, minus any tax credit reinstated and/or allowed as part of a settlement agreement with the Department of Revenue, and plus any interest as calculated using the formula for delinquent taxes owed.
The district favors the alternative valuation method, based on a baseline value derived from a fair market value appraisal. A percentage of the baseline value will be derived based on the conservation practices implemented within the easement. A matrix or point system will be derived to assign a percentage of the baseline value. Data from ecosystem services and the Conservation Reserve Program will be utilized in pilot programs.