Source: United States House of Representatives – Congressman Ken Buck (4th District of Colorado)
WASHINGTON – Today, Rep. Ken Buck (R-Colo.) and Rep. Joe Neguse (D-Colo.) reintroduced the Water and Agriculture Tax Reform (WATER) Act, bipartisan legislation passed unanimously by the U.S. House of Representatives in the 115th Congress. Sen. Michael Bennet (D-Colo.) and Sen. Mike Crapo (R-Ind.) reintroduced companion legislation in the Senate.
The WATER Act would reduce the cost of water and support the economic vitality of rural communities by providing mutual irrigation, reservoir, and water companies the ability to make important infrastructure advances without raising prices or losing their tax-exempt status.
“Mutual irrigation, reservoir, and water companies play a critical role in the agriculture industry in Colorado and throughout the nation,” said Rep. Buck. “Farmers and ranchers should be able to maintain and develop their water infrastructure without being penalized for it. The WATER Act will replace a burdensome restriction with a beneficial solution that will support America’s rural communities.”
“Across Colorado, access to clean water and maintenance of water resources is a top concern for our communities,” said Rep. Neguse. “Today, I’m glad to partner with Congressman Buck on the bipartisan WATER Act to reduce the cost of water and support our rural communities. This legislation will cut red tape and is a commonsense measure to support Colorado ranchers and farmers.”
“Facing intense drought, farmers and ranchers in the West are relying on water infrastructure now more than ever to keep their land productive,” said Sen. Bennet. “Our bipartisan legislation helps ensure ditch and irrigation companies in Colorado and across the West are able to keep critical water infrastructure in good, working condition.”
“The cost of maintaining and operating aging water infrastructure has skyrocketed in recent years, forcing higher price tags on Idaho’s farmers and ranchers,” said Sen. Crapo. “Existing tax law penalizes mutual ditch and irrigation companies’ investments in much-needed water infrastructure projects necessary for maintaining a thriving agriculture sector. The WATER Act would update and reduce these current burdensome restrictions.”
This legislation is cosponsored by Reps. John Curtis (R-Utah), David Schweikert (R-Ariz.), Jason Crow (D-Colo.), Dan Newhouse (R-Wash.), and Liz Cheney (R-Wyo.).
Under current law, mutual irrigation, reservoir, and water companies may qualify for tax-exempt status if 85 percent of the entity’s income comes from member shareholders, which include farmers, ranchers, and rural water users.
However, if more than 15 percent of their income originates from non-member sources, such as recreational leases or crossing fees, these companies could lose their tax-exempt status. As a result, farmers, ranchers, and rural communities are forced to cover operations and maintenance costs in the form of higher water assessments.
This legislation would exclude certain revenue streams, such as recreational leases or crossing fees, from the 85 percent threshold to maintain tax-exempt status if the revenue is used exclusively for operations and maintenance costs. This solution would support local economies, assist farmers and ranchers, and ensure funds are invested in rural water infrastructure improvements.
The WATER Act bill text can be viewed here.