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Colorado HB 1086 flys out of committee

Colorado House Ag Committee Endorses Bill for Rural Business Development

HB 1086 seeks to help farmers and ranchers develop new cooperative businesses

DENVER>>Legislation intended to provide Colorado farmers and ranchers with additional marketing tools cleared its first hurdle Wednesday when the Colorado House Agriculture Committee unanimously endorsed the bill.

The committee’s 11-0 support for HB 1086 by State Rep. Kay Alexander, R-Montrose, drew strong praise from the president of the Rocky Mountain Farmers Union and other agricultural organizations engaged in assisting producers to develop cooperative marketing enterprises.

“Farmers and ranchers need marketing alternatives, but too often lack the capital necessary to develop new cooperative enterprises needed to process and market the products. The Colorado House Agriculture Committee took a giant step in addressing that problem by unanimously endorsing Rep. Alexander’s proposal to establish a tax credit for capitalizing new generation cooperatives,” said Carter. The Alexander bill would authorize up to $4 million in tax credits during each year of a budget surplus. Producers investing in new cooperative enterprises would be eligible for a tax credit equal to 50 percent of their investment, up to a maximum of $15,000 per producer. Unused tax credits could be sold to other businesses and individuals to provide a pool of funds for feasibility studies, loans, loan guarantees and grants to support cooperatives and other businesses that add value to agricultural commodities. The concept is patterned after a program now utilized in Missouri.

Alexander told the committee that her proposal would stimulate new locally owned business enterprises in rural Colorado. “Farmers and ranchers know that they must develop new businesses to add value to their commodities. The lack of capital represents the largest barrier to that kind of community-based development. This legislation is an important piece of the solution,” said Alexander.

Jim Rubingh, director of markets for the Colorado Department of Agriculture, noted, “Most of the dollars from Colorado’s economic boom have not flowed more than 35 miles east of I-25. Farmers and ranchers have certainly not been the beneficiaries of this boom.”

Cooperative development is targeted under the Alexander legislation as a means to stimulate the ability of agricultural producers to own businesses that process and market their commodities. A cooperative business is owned either by the producers who supply input products, or by the customers that purchase the finished goods.