Conservation easement working group travels to Sterling

    The eight-member working group charged by the General Assembly with coming up with a way to pay back millions of dollars in tax credits traveled to the Sterling farm Tuesday, July 23, owned by Alan and Julie Gentz.
    Alan Gentz, one of the eight appointed members of the working group under House Bill 1264, told those who attended Tuesday’s meeting, some 25 in all, that he wanted them to see what a conservation easement deemed without value by the state Department of Revenue looked like.
    Those in attendance included state Rep. Kimmi Lewis of Kim and state Sen. Larry Crowder of Alamosa, both Republicans. Lewis has said that 80% of the 860 easements deemed worthless by Revenue are in her district.
    The Gentzes tried to set up easements on 20 lots that they originally planned to develop, given that home values near their farm easily top $400,000.
    Tuesday’s working group meeting began discussions on how the state could pay back the tax credits. An early estimate from the department claims the cost of the tax credits alone, not including penalty and interest and attorneys’ fees, would start at $270 million.
    Conservation easements are set up by landowners who want to donate land to a land trust or, like the Gentzes did, to a local government (Logan County holds their easements). In exchange, the state Department of Revenue and the Internal Revenue Service both grant tax credits. In some cases, the tax credits are sold through tax brokers to people who have large tax liabilities. The cash, which goes to the landowner, then gets used to pay mortgages or other farm debts.
    But beginning in the mid-2000s, the state Department of Revenue began rejecting tax credits, claiming the appraisals for the land were fraudulent or that the land had no value for conservation. That’s what happened to the Gentzes, despite five appraisals done by three different appraisers. The IRS has never denied a tax credit on an easement, according to Jilliane Hixson of Lamar, who was also denied tax credits years after her easement was approved.

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