The United States House of Representatives and Senate have passed the Farm Bill, and it appears there will be enough votes to override an expected veto by President Bush.
The Farm Bill, the official name for which is the Food, Conservation, and Energy Act of 2008, passed the House May 14 by a vote of 318-106. The Senate passed it May 15 by a vote of 81-15.
Bush has announced he will veto the bill because of the overall cost, which approaches $300 billion. Congress can override the veto by a two-thirds vote of both chambers, the American Horse Council reported, and based on votes in support of the measure, the override could prove successful.
The tax portion of the bill will amend the current depreciation schedule for racehorses to make it uniform at three years. Effective Jan. 1, 2009, through 2013, all racehorses will be depreciated over three years regardless of their age when placed in service. Before the new provisions take effect, they will continue to be depreciated over seven years if they are placed in service before they turn 2 years of age.
Last year, Republican Sens. Mitch McConnell and Jim Bunning of Kentucky, and Democratic Sen. Blanche Lincoln of Arkansas, introduced the Equine Equity Act, which proposed to put all racehorses in the three-year category for depreciation purposes and make horses eligible for capital-gains tax treatment after being held for 12 months.
“The (Equine Equity Act) was included in the Senate version of the Farm Bill by an amendment offered by Sen. McConnell,” AHC president Jay Hickey said. “Although the Equity Act was not in the House-passed Farm Bill, the depreciation provision was included in the final bill through the efforts of Sen. McConnell.”
Another tax provision, which would have shortened the capital-gains holding period for horses from two years to one year, wasn’t included in the final conference version of the Farm Bill.
The Farm Bill includes a provision that makes horse breeders eligible for emergency federal loans following a disaster, the AHC said. The change will include “equine farmers and ranchers” within the group of producers eligible for federal emergency loans.
“Horse breeders have not been eligible for these loans, which have been available to other livestock producers for some time,” Hickey said. “Horse breeders suffer losses from hurricanes, drought, ice, floods, and other natural disasters just like other livestock producers do. This provision will end the disparate treatment of horses and horse breeders by making them eligible for emergency loans under the same conditions and limits as other livestock producers.”
The Farm Bill also includes a new permanent disaster assistance program that will provide relief funds to farmers and ranchers who suffer losses in areas that are declared disaster areas by the United States Department of Agriculture.