STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
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By Mr. McCONNELL (for himself, Mrs. LINCOLN, and Mr. BUNNING):
S. 1528. A bill to amend the Internal Revenue Code of 1986 to provide for the tax treatment of horses, and for other purposes; to the Committee on Finance.
Mr. McCONNELL. Mr. President, I rise today to introduce the Equine Equity Act of 2005 with my colleague from Arkansas, Mrs. Lincoln, and my colleague from Kentucky, Mr. Bunning.
Each spring on the first Saturday of May, the sporting world turns its attention to my hometown of Louisville for the annual running of the Kentucky Derby. It has been appropriately called ``the most exciting two minutes in sports,'' and has given us such great champions as Secretariat, Seattle Slew, and Smarty Jones.
The activities surrounding the Derby also allow Kentucky to show off one of its signature industries, the horse industry. Long after the pageantry and festivities of Derby day, the horse industry remains a vital part of Kentucky's economy and cultural heritage. Horses are Kentucky's largest agricultural product. The horse industry contributes $3.5 billion to Kentucky's economy, and directly employs more than 50,000 Kentuckians.
While many Americans appropriately identify the horse industry as one of Kentucky's signature industries, the industry's economic impact extends well beyond the borders of the Commonwealth. A recent economic impact study by the firm of Deloitte Touche Tohmatsu found that the horse industry contributes approximately $39 billion in direct economic impacts to the U.S. economy each year. The industry sustains 1.4 million full-time equivalent jobs each year, with over 460,000 of those jobs created from direct spending within the industry.
Nearly 2 million Americans own horses, either for racing, showing, or recreational purposes. While the popular image of horse owners might focus on Millionaire's Row at Churchill Downs on Derby Day, the facts tell a different story. Only about one-quarter, 28 percent, of U.S. horse owners have incomes greater than $100,000. More than one in every three, 34 percent, horse owners has an income of less than $50,000.
Like many businesses, outside investments are essential to the operation and growth of the horse industry. Without investors willing to buy and breed horses, it is impossible for the industry to thrive. Unfortunately, there are several unfair, unwise provisions in Federal law that discourage investment in the horse industry.
In an effort to address these concerns, today I introduce the Equine Equity Act with my colleague from Arkansas, Mrs. Lincoln, and my good friend from Kentucky, Mr. Bunning. The Equine Equity Act includes three key provisions.
First, it will provide capital gains treatment for horses that is equal to other investments. Nearly all capital assets are eligible to receive more favorable capital gains tax treatment once they are held for 12 months. However, horses and cattle must be held for 2 years to receive capital gains treatment. This legislation would reduce the capital gains holding period for horses from 24 months to 12 months.
Second, it will apply equal depreciation standards for all racehorses. Current law states that racehorses that begin training when older than 24 months of age are depreciated over 3 years, while those horses that begin training before reaching 24 months of age are depreciated over 7 years.
Most horses begin training before they reach 24 months, but their racing careers do not last 7 years. This legislation would reduce the depreciation period for racehorses to 3 years to more accurately reflect the racing life of horses.
Finally, the Equine Equity Act would establish equity in eligibility for disaster assistance between horses and other livestock. Most livestock, beef, dairy, sheep, and goats, are eligible for Federal disaster assistance during a drought, but horses are not. This legislation would make horses eligible for disaster-assistance programs offered by the U.S. Department of Agriculture.
I appreciate the willingness of my colleagues from Arkansas and Kentucky to join me in introducing this legislation of tremendous importance to our States. I look forward to working with them and our colleagues in the Senate to enact this bipartisan bill into law.
Mr. MCCONNELL. Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows: