Eric Brown | Fence Post Editorial Director

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July 22, 2014
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'Critical' irrigation-infrastructure measure makes Senate's highway bill, but not House's

Western farmers got a big boost Tuesday when a measure aimed at upgrading irrigation infrastructure — one they’ve been pushing hard for in recent years — was included in the Highway Trust Fund bill passed by the Senate Finance Committee.

The only problem is that measure wasn’t included in a similar highway-spending package passed by the House on the same day.

The situation leaves some uncertainty for ag producers and ag water providers, who’ve been supporting the measure, which would provide more dollars and flexibility to upgrade aging water-delivery systems.

They stress that irrigation-infrastructure upgrades are critical to the future of agriculture.

“This legislation is critical,” said Lynn Fagerberg, a northern Colorado farmer and president of the Larimer and Weld Reservoir and Irrigation Co., who provided input on the measure, and has pushed it in recent years. “We need this to make the most of our limited water.”

Colorado farmers, in particular, are scrambling for ways to make the most of their water.

Facing rapid population growth, combined with increased oil and gas activity and an already large ag industry, Colorado’s municipal and industrial users are forecast to face an annual water shortfall of as many as 1 million acre feet by 2050.

The state could also see as many as 700,000 acres of irrigated farmground dry up by that same year, according to the Statewide Water Supply Initiative study, released in 2010.

Despite farmers long calling for help, the irrigation-infrastructure measure had yet to find a legislative home until it recently made its way into the Senate Finance Committee’s version of the Highway Trust Fund bill.

But without being a part of the House’s highway bill on Tuesday, the measure’s future is unknown.

“It certainly creates some uncertainty,” said Adam Bozzi, a spokesman for Sen. Michael Bennet, D-Colo.

Last year, Bennet helped introduce the irrigation-infrastructure legislation — the Water and Agriculture Tax Reform Act of 2013 — and was a member of the Senate Finance Committee that passed it on Tuesday as part of the highway bill.

What Does The Irrigation-Infrastructure Measure Do?

Many areas of the dry West are lined with hundreds of miles of irrigation canals, spillways, inlets and diversion structures, needed to get water — often in the form of mountain snowmelt — to farmers’ and ranchers’ fields.

Routine upgrades and repairs to these water-delivery systems, needed to make them more efficient, 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 on land they own, and that increase in dollars has put many companies past the 85 percent threshold, leaving them to be taxed on the additional revenue.

With aging water infrastructure being a concern in the rural West, Bennet introduced a bill in 2013 that would reform tax provisions and allow irrigation and ditch companies to receive additional sources of income and still maintain nonprofit status.

However, the legislation requires that the extra revenue be used exclusively for operations and maintenance of the ditch and irrigation company.

Gardner Pushing Similar Legislation

Bennet’s efforts to introduce legislation came after Rep. Cory Gardner, R-Colo., introduced a similar measure in the House in 2012.

Several farmers and ditch company representatives in Colorado met with Bennet and Gardner to help piece together the legislation.

But Gardner’s measure wasn’t included in the House’s Highway Trust Fund bill on Tuesday.

Emily Hytha, Gardner’s communications director, said that although the language wasn’t included in the House version of the highway bill, Gardner is adamant about getting it into a final version.

She added that Gardner worked with senators to get this language in the Senate’s version of the Highway Trust Fund bill.

“He’s very glad that effort was successful, and looks forward to it passing out of the Senate, as well as the House,” she said. “There are several options available to make sure this measure passes out of the House, and Congressman Gardner will be pursuing those options to ensure that this language is signed into law.”

Bozzi said Tuesday that the Senate version of the bill, which is expected to go before the entire Senate for a vote next week could be later approved by the House to move forward with the irrigation-infrastructure language intact.

Also, he said, a House-Senate preconference committee could be formed to combine the two versions of the bill, and potentially include the irrigation-infrastructure measure as part of a final Highway Trust Fund bill.

However, the Senate could also approve the current House version instead of voting on its own, meaning the irrigation-infrastructure legislation would be left out — which Western farmers hope isn’t the final outcome. ❖

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The Fence Post Updated Jul 18, 2014 12:06PM Published Jul 22, 2014 01:14PM Copyright 2014 The Fence Post. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.