Media Releases, Legislative News, Agricultural Updates
DENVER – Shortly before ending their regular legislative session this week, Colorado lawmakers gave final passage to an innovated program to authorize the use of $4 million in tax credit incentives during each year of a state budget surplus, with the incentives to be targeted for the purpose of stimulating producer-owned and community-based agricultural “value-added” businesses. Governor Bill Owens is expected to sign the legislation.
Final passage of HB 1086, by Rep. Kay Alexander, R-Montrose, and Sen. Jim Dyer, D-Durango, drew strong praise from Dave Carter, the head of the Denver-based Rocky Mountain Farmers Union.
“Lack of capitalization has proven to be the Achilles Heel for to many new cooperatives and other small agricultural based businesses. With the passage of HB 1086, legislators created an innovative approach that will utilize a modest amount of state resources to help leverage the funds needed to capitalize new value-added businesses in rural Colorado,” Carter said. Value-added describes the process of transforming crops and livestock into products that have a higher value than the price of raw commodities. HB 1086 establishes a program in which producers investing in new value-added co-ops can receive a credit against their state income taxes equal to 50 percent of the cost of that investment. If all of the $4 million in allocation is not used by producers during the first nine months of the fiscal year, the remaining funds can be utilized by the state to support feasibility studies, loans, loan guarantees, grants, and other forms of support for new co-ops and other types of community-based agricultural value-added businesses.
Richard Wolf, a Weld County farmer who testified for the bill during legislative debate, noted, “We need to build new business to provide alternative markets for our crops and livestock. HB 1086 will really help.”
The bill will become effective upon signature of the Governor.
As originally introduced, the bill would have provided an additional incentive of up to $15,000 for producers to invest in new value-added cooperatives. That incentive was targeted to assist farmers and ranchers who do not pay significant state income tax because of the persistent low agricultural commodity prices. That provision was removed in an amendment added to the bill by State Sen. Mark Hillman, R-Burlington.
The programs available under HB 1086 will be administered by a board operating in affiliation with the Colorado Department of Agriculture.
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