Supports National Disaster Tax Relief Act to Help Farmers, Ranchers Rebuild Vital Infrastructure
WASHINGTON, DC -- Today, Longmont resident Sean Cronin testified before the Senate Committee on Finance, Subcommittee on Taxation and IRS Oversight's hearing entitled "Tax Relief after Disaster: How Individuals, Small Businesses, and Communities Recover."
Cronin, the Executive Director for the St. Vrain and Left Hand Water Conservancy District, was introduced by Finance Committee member Colorado Senator Michael Bennet and discussed the important role the National Disaster Tax Relief Act of 2014 will play in easing the burden on mutual ditch and reservoir companies rebuilding from 2013 flooding. Cronin has over 19 years of experience in water resource planning and policy and guided the St. Vrain and Left Hand Water conservancy District's recovery efforts following unprecedented 2013 flooding.
"Our agricultural community was hit hard by the floods and we need to ensure that it has every resource available to rebuild," Bennet said. "There are several changes we can make to help, including updating a law that is hindering farmers' and ranchers' ability to finance water irrigation infrastructure repairs. We are grateful that Director Cronin came and shared his expertise on behalf of Colorado's ditch and reservoir companies and we will continue working on bills to strengthen and streamline recovery efforts."
Mutual ditch and reservoir companies install, operate, and maintain critical water infrastructure necessary for agricultural production - Colorado's fourth largest industry. Current law dictates that these companies must receive 85 percent of their income from shareholder assessments in order to maintain a tax exempt designation. Unfortunately, aging water infrastructure and 2013's devastating floods have made it extremely difficult for ditch and irrigation companies to afford to maintain and rebuild infrastructure without receiving income from other sources like land sales or federal disaster relief funding. The National Disaster Tax Relief Act of 2014 would allow companies operating in disaster areas to raise money from other sources and still maintain their tax exempt status.
Following major disasters such as floods, hurricanes and tornadoes that result in devastating financial losses and infrastructure destruction, the federal government can provide recovery assistance in the form of targeted tax relief. Local experiences with disaster tax relief provisions show that these tools have been effective in relieving financial burdens on individuals, businesses, and municipalities and have helped speed recovery efforts.
Today's hearing examined current and past law as well as recent proposals for providing tax relief for natural disaster victims. It specifically focused on the effectiveness of various forms of tax relief, the pros and cons of temporary and permanent relief provisions, challenges faced by families, businesses, and municipalities, and ways to improve the tax code to better help taxpayers confront major disasters.
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