Ken Buck wins House passage of ditch bill for rural communities
Author: Marianne Goodland - July 24, 2018 - Updated: August 9, 2018
A bill that will make it easier for irrigation and ditch companies to invest dollars without jeopardizing their non-profit status cleared the U.S. House Tuesday on a unanimous vote.
U.S. Rep. Ken Buck, R-Windsor, is the sponsor of the Water and Agriculture Tax Reform (WATER) Act of 2017. The bill would amend the Internal Revenue Service code to “facilitate water leasing and water transfers to promote conservation and efficiency.”
According to a Tuesday statement, the bill would make water resources more affordable for farmers and ranchers.
Under current law, many mutual ditch and irrigation companies are non-profits, with farmers and ranchers owning shares in the ditches. As a non-profit, and under the IRS code, the ditch and/or irrigation companies can receive no more than 15 percent of their income from what’s known as non-member sources. That could be oil and gas companies that need to obtain water for fracking, or recreational water use, for example.
The WATER Act allows ditch and irrigation cooperatives to raise more than 15 percent of their revenue from non-member sources and still maintain their non-profit status. The caveat is that the revenue must be reinvested in maintenance, operations or ditch infrastructure. But the upside is that those costs will no longer be passed along to the farmers and ranchers, which will save them money in the long run.
“By empowering nonprofit mutual irrigation and ditch companies to raise revenue from non-member sources, H.R. 519 will reduce the cost of water for cash-strapped farmers,” Buck said on the House floor Tuesday. “It offers farmers and ranchers an affordable water supply. And, in doing so, it supports not only our agricultural communities but everyone in America who relies on farms and ranches for food.”
The bill, HR 519, was cosponsored by the entire Colorado delegation to the U.S. House. According to the Congressional Budget Office, the bill will cost the government about $39 billion in tax revenues between 2018 and 2028.
The WATER Act now goes on to the Senate.