The Haxtun-Fleming Herald - What can we reason but from what we know? -Alexander Pope

The fragile peace between land trusts that hold conservation easements and landowners cheated out of State tax credits is teetering on the brink, after a second bill not authorized by a 2019 working committee surfaced in the State House.

Conservation easements have been a tool for preserving undeveloped lands that the State believes should be left wild. The State has granted more than 4,000 such easements over the last 20 years. An easement basically goes under a land trust or a county for preservation. The property owner retains title to the land, in exchange for tax credits.

But tax credits for about 800 of those easements were denied by the Department of Revenue. Frequently, the department claimed the land had no value, despite numerous real estate appraisals to the contrary. About $149 million in tax credits were denied, forcing some landowners into bankruptcy and foreclosure. Most of the 800 denied credits were for farmland in southeastern Colorado.

Even though the tax credits were denied, the easements still became the property of the land trusts and counties that accepted them, meaning the landowners got no tax credits and lost the right to develop their lands in perpetuity.

The 2019 working group, led by Erik Glenn, executive director of the Colorado Cattlemen's Agricultural Land Trust and Alan Gentz of Sterling, recommended reparations, to be paid for with the annual tax credits held by the Colorado Department of Revenue. Two other issues, on how to deal with “orphan” easements that have been abandoned by land trusts and a new way to value those easements, also were part of the recommendations.

The first bill to be introduced was Senate Bill 33, sponsored by Senator Jerry Sonnenberg, R-Sterling and the working group. 

Under Senate Bill 33, a landowner can claim a tax credit for each conservation easement donated between Jan. 1, 2000 and Dec. 31, 2013, that was denied by the Department of Revenue. The rejected donation must have qualified for the federal tax deduction as allowed by the Internal Revenue Service.

Under the bill, the Department of Revenue has until August 15 of this year to post information online that those denied tax credits may be eligible to apply for a new one. Taxpayers then have until Sept. 30, 2022 to submit a claim to the Division of Conservation in the Department of Regulatory Agencies.

The revenue department, under existing State law, has about $45 million per year to award in tax credits. The bill’s fiscal analysis estimates that about $8 million of that would be claimed in 2020-21, with $17 million per year claimed in the next two years.

The bill went through its first hearing on March 8 in the Senate Finance Committee, and all appeared to be going well. Sen. Pete Lee, D-Colorado Springs, hearing about the conservation easement issue for the first time, said he was appalled by the way landowners had been treated by the State, and pledged his support. 

But near the end of the hearing, Democratic lawmakers began talking about a second bill in the works. That bill was an attempt to find a reparations solution with a dollar figure more palatable to Democratic lawmakers. 

The hearing ended without a vote, to allow Sonnenberg, who was furious and said he was unaware of the second bill, time to work with the sponsors of the other bill. 

That bill has led to a rift among the working group, as evidenced by emails in the past two weeks, with accusations of bad faith flying back and forth.

House Bill 1233 is backed by Keep It Colorado, formerly the Colorado Coalition of Land Trusts. The measure is sponsored by Representatives. Dylan Roberts, D-Eagle and Perry Will, R-New Castle; and Sens. Faith Winter, D-Westminster and Kerry Donovan, D-Vail. Roberts and Sonnenberg sponsored the 2020 legislation that failed to make it out of the pandemic-shortened session.

The bill does not propose reparations for those denied State tax credits and deals primarily with sweetening the deal for landowners who enter into conservation easements after Jan. 1, 2021. Current law caps the state tax credit to 50 percent of the land’s value; under HB 1233, that cap is raised to 90 percent.

Land trusts have claimed that years of lawsuits, complaints and bad publicity over the conservation easement program have led Coloradans to avoid donating land to easements.

HB 1233 is scheduled for its first hearing on April 5. As to the reparations bill, SB 33, it’s on hold with no follow-up hearing yet on the calendar.

One committee hearing is all that stands between a bill putting into law the practice of selling shares of livestock directly to consumers. 

Senate Bill 79, sponsored by Sonnenberg and Rep. Rod Pelton, R-Cheyenne Wells won unanimous approval on March 24 from the House . But an amendment tacked on by the bill’s Democratic co-sponsor, Rep. Jeni Arndt of Fort Collins, meant the bill had to head back to the Senate. The amendment required that a consumer signed a disclaimer at the point of sale. 

Sonnenberg said that could require a consumer to make an extra trip to the producer that shouldn’t be necessary and he won approval to reject the amendment and work out the differences in a conference committee. Sonnenberg told this reporter that Arndt is willing to drop the amendment; once that happens, the bill will be reconfirmed by both chambers and then should head to the Governor for signing.

This week, the House Health & Insurance Committee will begin work on the most significant health care legislation expected in the 2021 session. The Colorado Option Health Benefit Plan, House Bill 1232, is a two-phased approach to lowering health insurance premiums for about 23 percent of the insured market in Colorado.

Under phase one, which begins Jan. 1, 2023, the health industry — health insurance providers, hospitals and pharmaceutical companies — must work together to lower premiums by 10 percent in the individual and small group markets. The individual market, about eight percent of the insured market, is people who buy their own health insurance. The small group market, about 15 percent, is businesses with 50 employees or fewer. By Jan. 1, 2024, the health industry must reduce premiums by another 10 percent.

If those reductions don’t take place, a state-run plan, developed by the Commissioner of Insurance, would take over on Jan. 1, 2025. 

The bill’s sponsors, Roberts and Donovan, claim the program will reduce the cost of health insurance and help the State provide equity to underserved populations, including rural Colorado, underrepresented minorities and undocumented residents.

The health industry, however, counters that the bill will drive up costs and that the measure is setting them up to fail. They point to inclusion of the small group market in the premium reductions, which they did not agree to in a draft version of the bill released in February and costly health benefit mandates that will continue to drive up costs while at the same time they’re trying to reduce costs in order to lower premiums. 

Over the past several years, lawmakers have added a slew of services that health insurers must cover, including infertility treatments, noninvasive breast cancer screenings, reductions in the cost of insulin and requirements that insurers spend more premiums on health services. The Colorado Association of Health Plans said those services drove up costs by $75 million per year. 

In the past year, lawmakers have proposed adding an annual mental health exam, colorectal cancer screenings beginning at age 45, osteoporosis screening, urinary incontinence screening, and screening and treatment of a sexually transmitted infection. Those bills are back in 2021. 

Gov. Jared Polis made it clear in an April 2020 letter to lawmakers that he did not favor any more health benefit mandates, pointing to the impact it has on premium costs. However, House Bill 1232 allows for continued additions of benefit mandates throughout the two-year period, in effect requiring health insurers to add services while simultaneously trying to lower the cost of premiums.

HB1232 gets its first hearing on Wednesday, March 31.

Colorado Ag Day at the state Capitol took on a decidedly subdued look on March 24. Instead of the traditional Farm to Fork Culinary Competition, which draws hundreds of the Capitol to salute the ag industry, COVID restrictions meant no competition and hand-crafted lunches only to lawmakers.

In the Senate’s salute to Ag Day on March 25, Sonnenberg had the numbers. Ag exports $2 billion annually, every farmer feeds about 167 people, and the ag’s contribution to wildlife habitat is valued at $67.5 million, he told the Senate. That’s despite roads that are not always the best and hospitals that are sometimes 60 or 70 miles away, he explained. 

“Even though you may not have ties to rural Colorado or ag, please keep in mind how your bills impact people in rural areas,” Sonnenberg asked.