Media Releases, Legislative News, Agricultural Updates
Colorado’s farmers and ranchers may soon have an additional opportunity to develop new businesses to add value to their agricultural commodities, thanks to legislation that easily passed the Colorado House of Representatives today.
On a 58-7 vote, the Colorado House approved HB 1086, the Colorado Agricultural Value-Added Capitalization Act, and sent the measure to the state Senate for further consideration.
Sponsored by State Rep. Kay Alexander, R-Montrose, the legislation would expand the ability of farmers, ranchers, and other rural citizens to finance new businesses known as “value-added.” That term refers to the process of transforming raw agricultural commodities into finished products such as bread, cereal, and jam. Tom Lauridson, a Colorado wheat producer who serves as vice president of the Rocky Mountain Farmers Union, praised the House action, saying, “Farmers and ranchers today are struggling to survive by selling raw commodities into a marketplace dominated by a handful of large processors and retailers. This legislation will provide agricultural producers with an expanded ability to develop new, innovative enterprises that will provide alternative market outlets.”
The Alexander bill creates a tax credit mechanism through which up to $4 million in funds can be allocated to “value-added” enterprise development projects each year. Producers investing in Colorado-based, value-added cooperatives will be eligible to receive a tax credit equal to 50 percent of their investment, up to a total credit of $15,000. The tax credit authorization only applies in years in which the state enjoys a budget surplus in excess of $4 million.
At least 10 percent of the tax credits each year must be targeted to assist projects with capital costs of more than $1 million. And 10 percent of the funds granted must be awarded to grant requests of $50,000 or less.
HB 1086 has gathered the support of almost all of Colorado’s agricultural organizations. During floor debate, Rep. Bill Webster, R-Greeley, noted that ranchers and farmers need additional opportunities to earn the incomes necessary to maintain viable agricultural operations. “This bill can really help,” he said.
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