A bipartisan group of lawmakers has introduced legislation that would ensure farmers and ranchers have access to modern and safe water infrastructure.
Senators Michael Bennet (D-CO) and Mike Crapo (R-ID) introduced The Water and Agriculture Tax Reform Act of 2013 on Thursday. Congressman Cory Gardner (R-CO) is leading companion legislation in the House.
The bill would reform outdated tax provisions that hinder ditch and irrigation companies’ ability to raise capital to invest in infrastructure. Current law dictates that mutual ditch and irrigation companies must receive 85 percent of their income from shareholder investment to maintain its non-profit designation. The bill allows these companies to receive other sources of income for operations and maintenance and still maintain its non-profit status. The legislation requires that the extra revenue be used exclusively for operations and maintenance of the ditch and irrigation company.
Currently, when ditch and irrigation companies incur a large capital expense, such as replacing a dam in disrepair, they are severely limited in how they can collect revenue. This legislation eases restrictions while still ensuring that the revenue is used solely for operations and maintenance expenses.
“Water is a precious resource in Colorado, and nobody knows that better than our farmers and ranchers,” Bennet said. “Producers throughout the state face challenges when it comes to distributing water across their land to keep it productive for its agricultural uses. This bill will help give irrigation companies in Colorado greater flexibility to keep this infrastructure in good working condition.”
“Current law is outdated and does not serve the needs of the people of Colorado,” said Gardner. “It’s critical that farmers and ranchers have access to water. This legislation will help prevent the buy and dry-up of farm land and protect agriculture jobs in Colorado.”
“The high cost of maintaining reservoirs, ditches and other irrigation structures comes at great cost to Idaho farmers and ranchers,” said Crapo. “Many in the agriculture community form mutual ditch and irrigation companies to develop and maintain water storage and delivery systems for their land, but due to an outdated provision in our tax code our farmers and ranchers end up being penalized for this very investment. In order to maintain a thriving agriculture sector, we must fix this provision by passing the WATER Act.”