Hickey: Industry Must Be Diligent in D.C.

There’s a new president in town, and a Congress even more dominated by Democrats, but one of the nation’s top lobbyists for equine interests said April 30 that the horse industry must be ever-diligent about protecting and advancing its positions in Washington, D.C.

American Horse Council president Jay Hickey, who was speaking at the 24th National Conference on Equine Law in Lexington, outlined lobbying efforts on three major legislative fronts: gambling, immigration, and taxes. But he warned that it will be difficult to get anything pushed through Congress until challenges in the economy are dealt with first.

“It’s not like we are the stimulus package or bailing out (General Motors) or something like that,” he said during a presentation at the Embassy Suites conference center. “But it’s important that we continue to work. Because what happens in D.C., as you’ve seen in the last couple of months, affects everyone.”

Despite pre-election speeches from President Obama touting plans for sweeping immigration reform, Hickey said that issue, which directly impacts the horse industry, won’t be dealt with anytime soon.

“I don’t see this coming up this year,” said Hickey, whose group represents more than 180 organizations, including those in Thoroughbred horse racing and breeding. “It’s not going to happen before stimulus or energy reform, but we are hopeful it will be looked at before the end of the year.”

The AHC supports comprehensive immigration reform, which would include looks at the H-2A and H-2B programs that allow foreigners to obtain temporary work visas, including many toiling in the horse industry. Hickey said the AHC is looking for ways to legalize existing workers and streamline the process for future employees.

“You can’t all of a sudden send half or 75% of our workers back to a foreign country,” he said. “You can build security fences … you can do all of these things as long as you have a way to bring in workers, and legalize your existing workers.”

Immigration reform was put on the back burner following a troubled attempt at overhaul in 2007 under the Bush administration.

“It turned into a disaster because of that dreaded ‘A’ word: amnesty,” Hickey said. “Anything that would allow undocumented workers to legalize their status is categorized as amnesty by many people.”

But, Hickey wondered aloud, “What are you going to do with 15 million people, half of which are children and already U.S. citizens? I have no idea what you are going to do with that.”

Ready to gamble

On the gambling front, Hickey praised efforts by the racing industry to protect its status in Internet gambling by securing grandfathered language in the 2006 Unlawful Internet Gambling Enforcement Act. But he said Democratic Rep. Barney Frank of Massachusetts is likely to sponsor a bill to license operators of Internet gambling Web sites, and place them under the authority of the Treasury Department and other regulators.

“That bill is going to be introduced shortly,” Hickey said. “And it’s up to the industry to ensure that whatever happens, there is a carve-out, and a grandfather (clause), so that horse racing can continue to do what it has been doing on an interstate basis.

“Internet gambling is going to be a big-ticket item -- not now, not over the next two weeks, but in the future for this Congress as Mr. Frank tries to get his bill passed,” he continued. “There is going to be action on this, and we have to be very careful.”

Hickey also lauded the prospect of the Pari-Mutuel Conformity and Equality Act, which was introduced April 28 by Democratic Rep. John Yarmuth of Kentucky. If passed, the bill would eliminate the automatic 25% withholding by the federal of government on winning wagers of $5,000 or more that feature 300-1 odds or higher.

“If we can keep that money in the betting pool, in the churn … it would be much better for racetracks, for the owners, and for the states,” he said. “We are hopeful that we can get that passed.”

Tax breaks, for now

Hickey also noted that a previously passed law on tax depreciation went into effect at the beginning of the year. All owners are now allowed to depreciate their horses over three years, as opposed to previous mandates that required some to be depreciated over seven years, depending on when they were placed into service.

Due to an extension signed in February by President Obama, in 2009 owners can again expense up to $250,000 of a horse or other business property purchased and placed into service. A cap of $800,000 in purchases is allowed, from where the allowance goes down dollar for dollar. Owners this year can in certain circumstances also utilize an additional 50% bonus on the balance leftover from the $250,000 allowance.

“You would think that the sales would be going crazy, but unfortunately, you need the cash, or borrow it, to take advantage of it,” Hickey said, referencing the current state of economic turmoil.

Hickey also feels horse welfare/slaughter issues will be “big part of this Congress.” He said while there are no slaughter houses operating in the U.S., three or four states are considering opening such facilities. He said the AHC is neutral on the issue of slaughter.

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