Colorado introduced a new Water and Agriculture Tax Reform Act. The act preserves tax-exempt status for the mutual ditch, irrigation, and water companies that invest in maintenance and infrastructure improvements.
According to Ark Valley Voice, the cost of maintaining and operating an aging water infrastructure has skyrocketed. This has made it impossible for many mutual ditch, irrigation, or water companies in Colorado and across the country to operate solely on member income.
The aftermath of wildfires and the flooding that can follow can also cause major financial hardship. Federal recovery funds can be used for new infrastructure, but there is no funding available for ranchers and farmers to repair their existing infrastructure, including what is often extensive ditch repairs.
As companies have been unable to meet the 85-percent source requirement, many have been forced to put off critical infrastructure improvements, while several others have lost their tax-exempt status.
This legislation would allow mutual water storage and delivery companies to maintain their tax-exempt status, even if they receive more than 15 percent of their revenue from non-member sources, as long as the monies are reinvested into maintenance, operations, and infrastructure improvements.