The Colorado legislature is considering a bill that would impose a cap on the aggregate amount of state income tax credits available annually to taxpayers for the donation of a conservation easement.  Currently, Section 39-22-522(2.5), C.R.S., provides that the Colorado Division of Real Estate may not issue state income tax credit certificates for conservation easement donations that exceed $22 million in each of the calendar years 2011 and 2012 and $34 million in the calendar year 2013.  Introduced on January 31, 2013, House Bill 13-1183 provides for an extension of the aggregate calendar-year income tax credit cap, limiting the total income tax credits that may be claimed by all taxpayers to $45 million in the calendar year 2014 and in each calendar year thereafter.  While the cap amount has been increased from the amount provided for in the prior calendar years 2011, 2012 and 2013, the legislation does not provide for any increase in the cap amount on a going forward basis—the calendar-year cap will remain at $45 million unless Section 39-22-522(2.5), C.R.S., is further amended by the legislature in the future.  If a cap is reached in any given calendar year, any additional income tax credit certificate applications received by the Division for the applicable year will be placed on a wait list for consideration the next available calendar year for which the Division has not issued income tax credit certificates in excess of the cap for such year.  Currently, there is no limit on the dollar amount of income tax credit certificate applications that may be waitlisted.  However, this bill introduces a $15 million wait list cap in any given calendar year.  Because the calendar year 2012 cap was reached, certain income tax credit certificate applications received by the Division in 2012 were waitlisted to the calendar year 2013, and, as of March 22, 2013, the Division has issued a total of $5,439,729 in income tax credit certificates for conservation easement donations.  Because income tax credit certificate applications are considered by the Division in the order received, it is advantageous for taxpayers to apply for such certificates sooner rather than later in the applicable calendar year if possible.  This bill passed on third reading on March 18, 2013 by vote of 51 to 13, and has been introduced in the Senate and assigned to the Senate Finance Committee.

It is well-established under Colorado water law that a water right owner is entitled to a right-of-way to build facilities on the private and public lands of others to transport water from its source to its place of use.  Colorado Constitution, Article XVI, § 7; C.R.S. § 37-86-102.

In 2012, the United States Forest Service issued Interim Directive 2709.11-2012-2, which requires that ski resorts with special use permits to operate their resorts on federal lands transfer their water rights to the Forest Service without compensation as a condition to the special use permit.  The National Ski Areas Association, Inc. filed a lawsuit against the Forest Service arguing that the directive constituted a taking of private property without due compensation.  In December 2012, the United States District Court for the District of Colorado vacated the Forest Service directive and ruled that the Forest Service violated federal law by not providing for public input prior to issuing the directive.  The Court did not rule on the takings claim.

In response to this directive, Colorado Representative Jerry Sonnenberg (R-Sterling) is sponsoring House Joint Resolution 13-1004 and Colorado House of Representatives Bill 13-1013.  Unanimously approved by the House Agriculture, Livestock and Natural Resources Committee, HJR 13-1004 encourages the Forest Service to withdraw the 2012 directive stating that it is unconstitutional under Colorado water law’s doctrine of prior appropriation.  HJR 13-1004 also states that, in addition to imposing conditions on ski resort permits, the Forest Service has delayed issuing permits in connection with ranching activities in Colorado in order to pursue obtaining water rights.  At a March Committee hearing, the Forest Service’s Daniel Jirion told the Committee that the Forest Service would begin a public process to develop a directive regarding water rights on federal lands this spring and that the Forest Service “fully supports” the ski industry and Colorado water laws.

HB 13-1013 would amend C.R.S. 37-86-102 to prohibit the federal government from demanding that a water right owner transfer to the government a partial or joint ownership interest in a water right as a condition to the government’s granting of right-of-way or special use permit.  HB 13-1013, as currently amended, has support from the Colorado Farm Bureau, Colorado Water Congress and Colorado Counties, Inc.  The Agriculture, Livestock and Natural Resources Committee has referred the bill to the House Committee on Appropriations.

6629120915_556a318093_m.jpgThe Colorado legislature recently passed HB-13-1113, which was signed into law on March 8, 2013. This act creates a pilot program for an alternative property tax valuation protest and appeal procedure for the City and County of Denver. Though the bill has been signed into law, the pilot program will not actually go into effect unless the governing body of the City and County of Denver elects to use the pilot program. This election must be made prior to May 1st of the year in which the program is to take effect. If the election is made, property owners in Denver can expect several changes to the protest and appeal procedures.

First, the pilot program expands the timeframe within which property owners can file their objections. Traditionally, the Assessor mails property valuations by May 1st and the deadline to file a protest is June 1st. Under the pilot program, property owners in Denver will have until November 15th to file a protest.

Second, the pilot program eliminates the first step in the standard protest and appeal process. Under standard procedures, property owners must submit their initial protest to the Assessor. If the Assessor denies the protest, then property owners must appeal the decision to the Board of Equalization. The Denver pilot program requires landowners to file the initial protest directly with the Board of Equalization (referred to in the act as the Board of County Commissioners), which is then required to hold hearing. In most cases, the Board of Equalization will ppoint a qualified referee (likely an appraiser) to conduct the hearing. However, the Assessor is not entirely eliminated from the process. Under the pilot program, the Board of Equalization can give the Assessor authority to settle protests directly with property owners through mutual agreements prior to the hearing.

Upon first blush, these changes appear to provide property owners with additional time and a more streamlined process that encourages settlement. However, upon closer reading, the additional grant of time to file a protest might be misleading. The pilot program requires the Board of Equalization to make a determination on a tax protest within six months of its filing. The pilot program further provides that all protests that are not determined prior to December 1st will be treated as petitions for an abatement and will be governed by Colorado Revised Statutes, § 39-10-114. Therefore, to avoid having their tax protest treated as an abatement petition, property owners still have to file their objection prior to June 1st. Otherwise, the Board of Equalization can delay issuing a ruling until after December 1st of that year and treat the protest as an abatement petition.

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Earlier this month I wrote about a proposed bill that would increase the threshold amount in C.R.S. § 13-1-127(2) (the statute that allows non-attorneys to represent closely held companies in court) from $10,000 to $15,000.  HB-13-1052 has passed and was signed into law by the Governor on March 15, 2013.

 

Colorado law currently gives local governments (including counties, municipalities and special districts) the power to negotiate business incentive agreements with new or expanding businesses, giving local governments a valuable tool to attract and keep businesses and stimulate economic growth and job creation within their respective jurisdiction.  These incentive agreements may provide for a rebate of up to 100% of the business personal property tax for a new or expanding business for a period not to exceed 10 years.  C.R.S. §§ 30-11-123 (counties), 31-115-903 (municipalities) and 32-1-1702 (special districts).

HB 13-1206, introduced in the Colorado House of Representatives this session, seeks to expand the power of local governments to negotiate such business incentive agreements with businesses that are considering relocating to another state.  The bill requires that the local government has “verifiable documentation” that there is a substantial risk that the business will relocate out of the state.  “Verifiable documentation” must include information that the business could “reasonably and efficiently relocate” out of the state and that at least one other state is being considered by the business.

This bill fits squarely within the goals of current law to stimulate economic growth and job creation and gives local governments another valuable tool to keep jobs in Colorado.  The bill recently passed the Colorado House of Representatives.