Durango – The Colorado Forest Service is remaking its list and checking it twice to ensure that property owners claiming a big property-tax reduction on forested lands are following the law.
The closer look comes in the wake of San Juan County’s successful challenge of a ski resort’s attempts to lower its tax bill.
The Board of Assessment Appeals, which is the state arbiter of tax disputes, decided in July that the county was correct in denying Durango Mountain Resort a $50,000 tax reduction on a 153-acre parcel. Since then, the Forest Service has been tightening its oversight of a program intended to slash property taxes for tree farmers and loggers.
In 1990 legislators expanded the definition of agricultural land – and extended the same low tax rate – to forested lands of at least 40 acres that produce wood products for profit and are managed under a plan approved by state foresters.
Critics have said that large property owners could sell a few pine cones and still be eligible.
The program came under harsh criticism this year by San Juan County officials, state Rep. Mark Larson of Cortez and others for having become a corporate tax dodge that wasn’t necessarily promoting logging or improving forest health.
The program, with 631 participants and 400,000 acres, shaved state property-tax revenues by $5.2 million this year. Since 1993, when the state began tracking the reduced revenues, the program has saved landowners more than $31 million.
But the appeals board found that Durango Mountain Resort did not follow its management plan and did not derive income from logging, even though the Forest Service deemed the resort eligible for the tax break.
“The bottom line is that issues developed that made us conclude we need more diligence in all aspects of the program,” Forest Management Division supervisor Joe Duda said.
Division of Property Taxation specialist Judy Kahl said her division and the state Forest Service have been discussing how to enforce the law. “I think we’ve made a lot of progress,” Kahl said.
The forest-agriculture program’s coordinator, Jan Hackett, said foresters will do more to educate landowners and will look closer at documentation of wood sales.
Annual inspections of lands and plans begin this month.
“We still think it’s a good program,” Hackett said. “We’re going to go through a little housecleaning. We have some individuals who might not be recommended again.”
But she said that all landowners, including developers and resorts, are eligible if they meet program requirements – whatever their ultimate plans for the property.
Eligibility for one developer is in dispute in Montrose County. Cornerstone Montrose LLC has taken commissioners and assessor Brad Hughes to District Court over their denial of forest-agriculture status for 1,564 acres the county classifies as vacant land. At stake is a tax reduction of about $68,000.
Staff writer Electa Draper can be reached at 970-385-0917 or edraper@denverpost.com.
