The Water and Agriculture Tax Reform Act of 2013: Senator Bennet introduces legislation to help ditch companies

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Here’s the release from Senator Bennet’s office:

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The bill would reform outdated tax provisions that hinder ditch and irrigation companies’ ability to raise capital to invest in infrastructure.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“Current law is outdated and does not serve the needs of the people of Colorado,” said Gardner.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ditch and irrigation companies to develop and maintain water storage and delivery systems for their land, but due to an outdated provision in our tax code our farmers and ranchers end up being penalized for this very investment.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.”

From The Greeley Tribune (Eric Brown):

Water providers for farmers and ranchers could have more dollars and flexibility to upgrade their aging delivery systems if a pair of Colorado lawmakers push through their respective bills in Washington.

Many in Weld County — the 8th-most agriculturally productive county in the United States, lined with hundreds of miles of irrigation canals, spillways, inlets and diversion structures — are eager for passage, since routine upgrades and repairs to these water-delivery systems can add up into the millions of dollars.

Current law says that mutual ditch and irrigation companies must receive 85 percent of their income from shareholder investments to maintain nonprofit designation. In recent years, though, a number of ditch companies have seen an influx in revenue, mostly from an upswing in oil and gas activity in the region, and that increase in dollars has put some companies past the 85 percent threshold, leaving them to be taxed on the additional revenue.

With aging water infrastructure being a concern in rural Colorado, Sen. Michael Bennet, D-Colo., recently introduced a bill that would reform tax provisions and allow irrigation and ditch companies to receive additional sources of income and still maintain nonprofit status. The legislation requires that the extra revenue be used exclusively for operations and maintenance of the ditch and irrigation company. Bennet, along with Sen. Mike Crapo, R-Idaho, introduced their Water and Agriculture Tax Reform Act of 2013 on Thursday.

Rep. Cory Gardner, R-Colo., introduced companion legislation in the House last fall.

Several farmers and ditch company representatives in Weld met with Gardner last year to help the congressman piece together his legislation.

The U.S. Joint Committee on Taxation estimated last year that Gardner’s bill would take away about $31 million in tax revenue from the federal government between 2012 and 2021 — “definitely worth it,” Gardner said, stressing how important irrigated agriculture is to the economy and to the nation’s food security.

With the effort now receiving bipartisan support, many in Weld County — like Dale Trowbridge, general manager at the New Cache La Poudre Irrigating Co. in Lucerne — are hopeful, adding that the additional dollars and flexibility from such legislation would “certainly be welcome.” Trowbridge and his company alone oversee about 80 miles of ditches and canals for about 350 shareholders — and the system is 134 years old. “When you’re working with something that big and that old, there’s always upgrades or repairs needed,” he said.

However, replacing the nearly 200 head gates along his system can cost $10,000-$15,000 each, Trowbridge noted. Replacing or doing major work on a diversion structure can add up into the hundreds of thousands of dollars. Building new facilities to store more water or repairing reservoirs can cost $10 million-plus. Trowbridge didn’t even want to take a crack at estimating the costs of further water-efficiency measures — such as lining irrigation ditches with concrete, to prevent water lost to ground seepage. “Across the board, we see this as a good thing … if we want to make the most of our water,” Trowbridge said.

Here’s a release from US Representative Cory Gardner’s office:

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.

“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.”

“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.”

“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.”

The latest Middle Colorado Watershed Council newsletter is hot off the presses #ColoradoRiver

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Click here to read the newsletter. Here’s an excerpt:

On August 20st and 22nd, the BLM and Colorado Riparian Association are coming to Carbondale to conduct a free Riparian Assessment Workshop. This gathering is intended for any interested parties included but not limited to land managers, land owners, riverfront property owners, and watershed stakeholders. Check out the flier for more information. As of printing, there were two spaces still available. Contact Jay Thompson, Fish and Riparian Program Lead, BLM Colorado State Office, 303-239-3724, or at jmthomps@blm.gov.

More Colorado River Basin coverage here and here.

Drought news: Governor Hickenlooper is on tour assessing the impacts of Colorado’s drought #COdrought

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From The Pueblo Chieftain (Chris Woodka):

It was billed as a drought tour, stretching from Sterling to Springfield with six stops along the way. But Gov. John Hickenlooper spent a portion of the time defending some of his fights this year that he conceded might be unpopular in rural areas: gun laws, temporary clemency for a death-row killer and support for a state law setting a renewable energy standard. He also listened to community concerns. “I want to get out to as many people as I can,” Hickenlooper said. “Each meeting there is some problem pointed out that we can do something about.”

In his opening remarks, Hickenlooper said the small fee for a background check for anyone purchasing a gun is worth it. He claimed more than 3,000 people who had been convicted of crimes, had outstanding warrants or restraining orders were identified in background checks in Colorado last year. “And we only checked half of them,” Hickenlooper said.

He fielded a series of questions quickly, promising to look into easing state regulations on farmers and ranchers who have been hit hard by drought. “There are ways to do what’s fair,” he said.

Hickenlooper also pledged to look into improving the climate for agri-tourism, particularly in the area of landowner liability issues.

The meeting wasn’t all about problems.

Otero County Commissioner Keith Goodwin thanked the governor for state support of cantaloupe growers after a scare hurt sales last year. Hickenlooper praised Agriculture Commissioner John Salazar for taking decisive action and growers for acting proactively.

Bent County Commissioner Bill Long thanked Hickenlooper for signing a bill that repurposed Fort Lyon as a center for helping the homeless after it was closed as a prison. Again, the governor deflected the praise: “Bill Long did more work on that issue than I’ve ever seen a citizen do.”

The tour continues today with stops in Trinidad, Alamosa, Salida, Del Norte and Pagosa Springs. It follows a look at drought areas in the Arkansas Valley Monday by a separate group of state officials.

From the Glenwood Springs Post Independent (Hannah Holm):

According to Western Water Assessment at CU-Boulder, the answer is that “short-term drought conditions have eased considerably over the region after a wet July, with lesser improvements in long-term drought conditions.”

Over the past month, it rained more than usual across most of Colorado, Utah and the rest of the Southwest. But it was so dry in June and over the winter that precipitation totals for the 2013 water year, which started in October of 2012, are still well below average for most of the same region. The Colorado River headwaters area is one of the few exceptions.

The longer-term picture is reflected in reservoir storage levels. The Natural Resource Conservation Service (NRCS) reports that end-of-July reservoir levels in Colorado averaged 47% of capacity, which is 70% of average — down from 73% of average at the same time in 2012. Blue Mesa Reservoir, the largest in Colorado, was at 46% of capacity on Aug. 11.

Downstream, Lake Powell is under half full, and the Bureau of Reclamation reports that unregulated inflows to the lake are predicted to be just 41% of average for the 2013 water year. The bureau also reported a slightly more than 50% chance that Lake Powell will fall enough to trigger a reduction in releases to Lake Mead in 2014, under an agreement negotiated between the states that share the Colorado River.

So while this summer’s monsoon rains are bringing much-needed relief for thirsty plants, streams and people, they don’t spell an end to the long-term management challenges faced by our state and the Colorado River Basin as a whole, both of which are looking at a future where projected water demands exceed projected supplies.

From the Cañon City Daily Record (Brandon Hopper):

Fremont County is on pace for a good month of rain totals. So far this month, the area has received 1.47 inches of moisture according to National Weather Service meteorologist Randy Gray. That’s compared to the 2.23 inches of rain that the area averages in August, according to the Weather Channel. The storm that came through on Saturday evening produced enough quick rain to cause a mudslide on Parkdale Hill, which shut down U.S. 50. The Canon City area received between .05 and .15 inches of rain during the storm. Canon City has received just less than three-quarters of an inch of rain in a six-day span last week…

The latest measurement has the vast majority of Fremont County in a severe drought, listed as D2.