[SAMPLE LETTER TO HOUSE COMMITTEE ON AGRICULTURE]
[DATE]
Members of the House Committee on Agriculture
1301 Longworth House Office Building
Washington, DC 20515
Fax: 202-225-8510
Dear Representatives:
The conference between the House and Senate regarding the Farm Bill will convene
shortly. As a member of the Thoroughbred Owners of California (TOC), I urge you to support
the inclusion of several provisions that are in the Senate version of the Farm Bill and provide
parity to horse owners in the final bill to be considered by Congress.
These include:

Section 901(a)(8)(F) of Section 12101, Subtitle A of Title XII, which would specifically
include “horses” within the definition of livestock eligible for emergency funds from the
Agricultural Disaster Relief Trust Fund.

Section 5404 of Subtitle E of Title V, which would make horse breeders eligible for
emergency federal loans following a disaster just like other livestock producers.

Section 12509 of Subtitle E, Part I of Title XII, which would: (1) place all racehorses in
the three-year category for depreciation purposes; and (2) shorten the capital gains
holding period for horses from 24 months to 12 months.
A fuller explanation is attached. These provisions are supported by all segments of the
horse industry and will end the disparate treatment of horses and horse breeders and ranchers
versus other livestock producers regarding federal loan eligibility and the tax code.
The California Horse Industry generates $7.0 billion of total economic impact on the
State’s economy and supports over 130,000 total jobs annually. Furthermore, California’s Horse
Racing sector provides license fees to support California’s 79 county fairs and expositions,
which generate an additional $2.5 billion of total statewide economic impact.
TOC represents the interests of licensed Thoroughbred owners in California – now
numbering in excess of 10,000 individuals – and has been active in the evaluation of practices
that impact members’ interests, particularly as they relate to the agri-business of breeding,
raising and racing Thoroughbred horses. Our goal is to work with others to improve the overall
health of the business and contribute to the economy.
As you consider the final version of the Farm Bill, please support the inclusion of the
Senate provisions noted above in the Conference Report.
Sincerely,
DISTRIBUTION:
Members of the House Committee on Agriculture
Collin C. Peterson, MN, Chairman
Tim Holden, PA, Vice Chairman
Mike McIntyre, NC
Bob Etheridge, NC
Leonard L. Boswell, IA
Joe Baca, CA
Dennis A. Cardoza, CA
David Scott, GA
Jim Marshall, GA
Stephanie Herseth Sandlin , SD
Henry Cuellar, TX
Jim Costa, CA
John T. Salazar, CO
Brad Ellsworth, IN
Nancy E. Boyda, KS
Zachary T. Space, OH
Timothy J. Walz, MN
Kirsten E. Gillibrand, NY
Steve Kagen, WI
Earl Pomeroy, ND
Lincoln Davis, TN
John Barrow, GA
Nick Lampson, TX
Joe Donnelly, IN
Tim Mahoney, FL
Bob Goodlatte, VA, Ranking Minority
Member
Terry Everett, AL
Frank D. Lucas, OK
Jerry Moran, KS
Robin Hayes, NC
Timothy V. Johnson, IL
Sam Graves, MO
Mike Rogers, AL
Steve King, IA
Marilyn N. Musgrave, CO
Randy Neugebauer, TX
Charles W. Boustany, Jr., LA
John R. "Randy" Kuhl, NY
Virginia Foxx, NC
K. Michael Conaway, TX
Jeff Fortenberry, NE
Jean Schmidt, OH
Adrian Smith, NE
Tim Walberg, MI
Robert E. Latta, OH
Senate Farm Bill Provisions Beneficial to Horses
The Food and Energy Security Act of 2007 (H.R. 2419) passed by the Senate on December 14, 2007
includes several provisions that would benefit the horse industry.
Section 5404. Making Equine Farmers and Ranchers Eligible for Emergency Loans
This provision would make horse breeders eligible for emergency federal loans following a disaster by
including “equine farmers and ranchers” within the class of eligible producers. Horse breeders and horses
have not been eligible in the past for these loans, which have been available to other livestock producers
for some time. But horse breeders suffer losses caused by hurricanes, drought, ice, floods and other
natural disasters just like other livestock producers do. This provision would end the disparate treatment
of horse breeders by making them eligible for emergency loans under the same conditions and limits as
other livestock producers.
Senate Bill:
Title V - Subtitle E
Section 5404. Eligibility of Equine Farmers and Ranchers for Emergency Loans. [Page 780]
Section 901(a)(8)(F). Inclusion of Horses within Livestock for Permanent Disaster Assistance
Program
The Senate Farm Bill initiates a permanent Agricultural Disaster Relief Trust Fund that would provide
relief funds to farmers and ranchers who suffer losses in areas that are declared disaster areas by USDA.
Section 901(a)(8)(F) of Section 12101 specifically includes “horses” within the definition of livestock
eligible for the program.
Senate Bill:
Title XII – Section 12001 - Subtitle A –Section 12101
Section 901(a)(8)(F) defines eligible livestock to include “horses.” [Page 1589]
Section 12509. Asset Treatment of Horses
This provision would: (1) place all racehorses in the three-year category for depreciation purposes; and
(2) shorten the capital gains holding period for horses from 24 months to 12 months. This change would
end the disparate treatment of the horse industry versus other businesses under the federal tax code.
Senate Bill:
Title XII – Part I of Subtitle E
Section 12509 provides for the asset treatment of horses. [Page 1793]
Background
Federal Emergency Assistance Programs. The horse industry is hurt by floods, droughts, fire, ice storms
and hurricanes just like other industries that produce livestock and crops. If a breeding farm or ranch
loses horses because of floods, tornadoes or other natural disasters, it has lost its “crop” and has nothing
to sell. When grazing lands are lost because of flood or drought, and feed and hay must be purchased for
horses, a breeder might have to sell his horses at distressed prices because he/she could no longer afford
to provide for them.
While other livestock producers are eligible for low-interest loans and other federal assistance following a
disaster, horse breeders are not. The changes in the Senate Farm bill would provide federal emergency
assistance to horse breeders similar to that available to other livestock producers now. These changes
would help them to keep their breeding operations rather than selling them or cutting back on them.
These amendments would treat horse breeders and ranchers like other livestock breeders; no better, but no
worse.
Tax Changes. Under the federal tax code, gains from sales of property used in a trade or business,
including horses, qualify for long-term capital gains. Unfortunately, horses held for breeding, racing,
showing or draft purposes generally qualify for the 15% capital gains rate only if they are held for 24
months. All other business assets qualify if held for 12 months. Passage of this provision would end this
discriminatory treatment of horses under the tax code.
Race horses are depreciated over either three or seven years, depending on their age when “placed in
service.” Current law provides that racehorses that begin training at the end of their yearling year are
depreciated over seven-years, even though most will not actually race for seven years. This provision
recognizes the unreality of this requirement by changing the tax code to allow owners to depreciate all
their race horses over three years, rather than seven, regardless of when they are placed in service. The
change would provide for a more equitable depreciation schedule for race horses, one that better matches
the realities of the situation.
U.S. Horse Industry
The horse industry has a $102 billion economic impact on the U.S. economy, supports 1.4 million fulltime jobs and involves 4 million people in all its segments. All of this relies on the agri-business of
breeding and raising horses.
The industry has been working to make horses eligible for federal emergency programs under the same
circumstances, limits and requirements that producers of other livestock must satisfy. Such federal
treatment under disaster situations would finally rectify the unfair situation facing horse owners and
breeders, as would changes to the tax code.
House-Senate Conference – Support Senate Provisions
The House passed its version of the Farm Bill last summer. The House bill does not include the
provisions described above applicable to horse owners.