Sept. 1, 2014

This Week's SFR Picks

Newsletters

Choose your newsletter(s):
* indicates required

SFR Events

Special Issues

 

 
Home / Articles / News / Local News /  CONSERVATION EASE
Peter Wirth
State Rep. Peter Wirth’s House bill allows conservation-minded landowners to trade tax credits for cash.

CONSERVATION EASE

Landowners lured by new benefits.

June 25, 2008, 12:00 am
Mike Strugar has witnessed some sketchy land deals go down in the name of earth-friendliness—such as  landowners donating acres of development rights to the state of Colorado at hyperinflated prices in return for generous tax credits.
Strugar, a Boulder-based lawyer, is in Santa Fe this week to discuss changes to New Mexico’s law governing such conservation easements.

Conservation easements allow landowners to donate the development rights of their property, preserving land from future subdivisions and the like.

The changes to the state’s conservation easement law, sponsored by state Rep. Peter Wirth, D-Santa Fe, increase the tax credits for such easements from $100,000 to $250,000. And, significantly, those tax credits are now transferable so that land owners can sell them for 80 cents on the dollar.

“What’s really exciting,” Wirth says, “is that it really broadens the benefits that come along with this tool and offers it to folks who otherwise wouldn’t have an opportunity to take advantage of the easement.”

The changes went into effect this month and already have prompted increased interest. The Santa Fe Conservation Trust has received 12 inquiries, versus none last year. Of those 12, Conservation Programs Director Daniel Claussen says he expects six are likely to receive approval.

The Taos Land Trust has seen a similar surge in business. “I can say we’ll do a record number of easements this year,” Office Manager Sandra LeBrun says, adding, “Business will double.”

New Mexico is one of three states that allows such transfers. Colorado is another; Strugar runs a company that pairs up land donors with tax-credit buyers.

His concern is that some may try to cash in on the new system, especially now that real money—as opposed to tax credits—is involved. For example, Claussen refers to uncertified appraisers in Colorado who valued middle-of-nowhere properties at Denver-area real estate prices and landowners who claimed multiple conservation easements on the same chunk of land.

For most of the eight years that Colorado’s conservation easement laws have been in effect, such fraud has gone unchecked. Strugar points to a lack of accountability on the state’s part.
“These events on someone’s tax return are simply claimed—there’s no state certification of them,” he says. “People could get very aggressive in what they were doing.”

Last week, Colorado Attorney General John Suthers requested an investigation by a statewide grand jury to look into scam transactions between landowners and the state that may have cost the government millions.
This week, Strugar will spend part of his time contrasting the weaknesses of Colorado’s programs with the perceived strengths of New Mexico’s. A public forum is scheduled for 5:30 pm June 25 at the Santa Fe Conservation Trust, 316 E. Marcy St.

Under New Mexico’s program, the state’s Energy, Minerals and Natural Resources Department reviews every application, Strugar says, and each property must be looked at both by a state-certified property appraiser (in Colorado, notably, many of the appraisers involved with bunk easement deals were unlicensed) as well as a land trust.
“Your system has very little room for abuse,” he says.

The Nature Conservancy’s Bob Findling agrees. As the nonprofit’s director of conservation projects, Findling worked with Wirth to get the new conservation easement legislation enacted. He says that New Mexico will not repeat its northern neighbor’s mistakes.

Wirth’s bill, Findling says, “is really cutting edge, and it represents the best review process.”

“It’s the obligation of the land trusts to police,” he says.

 

comments powered by Disqus
 
Close
Close
Close