Contact: Molly Dall'Erta	For Immediate Release
Phone: 202.296.4031	December 29, 1999
Email: AHC@horsecouncil.org

1999 Year-End Review

Legislative Issues

Racing
In August of 1999, Congressman John LaFalce (D-NY) introduced "The Gambling ATM and Credit/Debit Card Reform Act" (H.R. 2811). The bill would impose a federal prohibition on the location of automatic teller machines, credit card terminals, debit card point-of-sale machines and other electronic terminal-type cash dispensing devices in the immediate areas where gambling takes place, including racetracks.

The bill was introduced in response to the recommendation contained in the National Gambling Impact Study Commission Report that such machines be banned from areas where gambling takes place. However, the Commission called on the individual states, tribal governments or gambling establishments to take it upon themselves to deal with this situation. There was no recommendation for action by the federal government.

The AHC opposes this legislation.

In November of 1999, The U.S. Senate passed the Internet Gambling Prohibition Act of 1999 (S. 692) by unanimous consent. The bill is a federal prohibition on gambling on the Internet, but includes language permitting interstate wagering on horse racing on a closed-loop system under specific restrictions. See article below.

Taxes
In August 1999, Congress passed "The Financial Freedom Act of 1999", a $792 billion tax bill. There were several provisions in the bill that benefited horse owners and breeders, such as a reduction in the maximum capital gains tax rate from the present 20% to 18%, an increase in the Section 179 expense deduction to $30,000, and a phase-out of the estate tax.

President Clinton vetoed the bill in September, calling it "bloated" with "special interest" provisions and characterizing the tax cuts as ill-conceived.

Congressmen Jerry Weller (R-IL), Ron Lewis (R-KY) and Jim McCrery (R-LA), and Senators Mitch McConnell (R-KY) and Jim Bunning (R-KY) had lobbied hard for the inclusion in the final bill of a provisionshortening the capital gains holding period for horses from two years to one. Horses are the only capital assets that must be held for 24 months to recognize capital gains treatment on any profit realized when the horse is sold. While this provision was in the bill passed by the Senate, it was not in the House bill. The final version of the bill passed by Congress, and subsequently vetoed by the President, did not include this change in the holding period for horses.

"The Senate recognized the unfairness of the tax code with respect to horses and capital gains," said Jay Hickey, AHC President. "This will be very helpful in our efforts to have the provision included in any tax bill considered by Congress in the Second Session of Congress."

Regulatory Issues

Public Sector Gaming Study Commission
In May of 1999, the National Council of Legislators from Gaming States began its own study into the social and economic impacts of gaming and the role of state and local governments in making public policy in regard to gaming. The study is being done by the Public Sector Gaming Study Commission (PSGSC) which consists of 11 members - one governor; one attorney general; three regulators, including a pari-mutuel representative, a lottery official, and a casino regulator; one mayor; one representative of Indian Tribal government; one law enforcement representative and three state legislators.

Representatives of the horse industry testified before the PSGSC in July in San Francisco, California. In addition to the testimony provided in July, the AHC has submitted a series of proposed findings, policy statements and recommendations.

The PSGSC has tentatively adopted several policy positions that could affect horse racing. These include:

• Racing and breeding have a significant economic impact on the U.S. economy, providing benefits unique to this form of gambling, such as the preservation of open space;
• Racing and breeding provide benefits to the entire horse industry in the U.S.;
• The introduction of alternative forms of gambling at racetracks is a state question that should be decided based upon the particular circumstances of each situation;
• Racing has undertaken extensive efforts to build its fan base;
• Racing has committed itself to implementing responsible wagering programs; and
• Congress should require that interstate account wagering be allowed where it is expressly legal.

The PSGSC is expected to release its final report and recommendations in January of 2000.

National Gambling Impact Study Commission
In June of 1999, the National Gambling Impact Study Commission concluded its two-year review of the economic and social effects of gambling and forwarded its final report to the President, Congress, the States and Native American Tribes.

The Commission's primary recommendation called for a moratorium or pause on the expansion of all forms of gambling, including lottery games, casinos, riverboats, Native American Gaming and gambling on the Internet. Other recommendations important to racing include:

• That states not permit the introduction of casino-style games, such as slot machines or video lottery terminals, at racetracks if the "primary" purpose is to save the track or enable it to compete with other existing gambling.
• A call for a federal ban on gambling on the Internet due to the lack of research on the effects of in-home gambling, the difficulty in regulating it, its ready availability to minors and those with gambling problems, the potential to manipulate games and the possibility of using such wagering to launder money.
• That states allow only those 21 or over to wager. The minimum age for betting on horses or playing the lottery is 18 in some states.
• The elimination of credit card cash advance machines and other devices activated by debit or credit cards from areas where gambling takes place.

It remains to be seen how influential this report will be in the future.

Transportation Regulations for Horses Bound for Slaughter
In May of 1999, the United States Department of Agriculture (USDA) proposed rules to regulate the commercial transportation of horses to processing facilities. These proposed rules do not apply to the regular transport of other horses.

As proposed, the regulations would require adequate headroom for horses being transported. The proposed rule also requires that horses be provided potable water, food and the opportunity to rest at least 6 hours before being loaded for transport. Horses could not be shipped for longer than 28 hours without being unloaded for six hours to rest, eat and drink. Horses must be checked every six hours to ensure their safety while being transported. The proposed rules also call for a five-year phase out of all double-decker trucks used to transport horses.

The AHC submitted comments to USDA regarding the proposed rules. The main thrust of the AHC's comments revolved around the "vagueness" of many of the terms contained in the proposed rule. The AHC believes that for any rule to be effective, the terms used must be clear and precise in their meanings. The AHC also applauded the USDA for their use of scientific studies to provide support for several of the provisions contained in the proposed rule, such as the length of time an equine may be transported before being off-loaded.

The USDA expects to release final regulations sometime in early 2000.

American Horse Council Annual Convention

The 1999 American Horse Council Annual Convention was held in late September at the Hyatt Regency on Capitol Hill in Washington, D.C. and celebrated the 30th Anniversary of the AHC. The four-day meeting included informative seminars on current industry issues and focused on the horse industry's role in the nation's Capitol in 2000 and beyond.

American Horse Council Congressional Dinner

During the 1999 convention, the American Horse Council hosted its second Congressional Dinner. The AHC believes that this sit-down dinner with our Congressional friends provides a terrific opportunity for horse owners, breeders and industry leaders to really visit informally with their elected officials while in Washington. Inspired by the attendance, which included representatives of the horse industry, convention attendees, sixteen Members of Congress and Australian Ambassador, and horse owner, Andrew Peacock, the AHC plans to make this Congressional dinner a focal point of the convention in the future.

The AHC presented Congresswoman Karen Thurman of Florida with the 1999 Rolapp Award during the dinner for her outstanding support of the horse industry through her Congressional work and leadership.

AHC Welcomes new Trustees

Anthony Abbatiello, Chairman of the Board of the U.S. Trotting Association was elected Chairman of the Board of Trustees of the American Horse Council, replacing Will Farish. Mr. Farish will remain as an AHC Trustee. Alan Balch, President, American Horse Shows Association; Robert Clay, Trustee of the Thoroughbred Owners and Breeders Association and member of the Board of Directors of the National Thoroughbred Racing Association; and D.G. Van Clief, President of the Breeders' Cup and Chairman of the Board of Fasig Tipton Sales Company, were also named to the AHC Board of Trustees.

Former AHC Treasurer James Barton was named Vice-Chairman of the Board and Don Burt was appointed Treasurer. Both Barton and Burt are members of the American Quarter Horse Association's Executive Committee.

The AHC Board also elected Ogden Mills Phipps, Chairman of The Jockey Club, and former Chairman of the AHC, Trustee Emeritus for his long-standing support of the AHC. Mr. Phipps had been a Trustee for 16 years.

AHC Committees Meet

Once again in 1999, the AHC advisory committees met in various locations in order to visit organizational members and discuss federal issues with various members of the industry. In February the Animal Welfare Advisory Committee and Racing Advisory Committee met in conjunction with the AHC Winter Meeting in Washington, D.C. Also in February, the AHC State Horse Council Advisory Committee met in Albuquerque, New Mexico.

In June, the Health and Regulatory Advisory Committee met in Atlanta, Georgia and visited the quarantine facility, which was built for the 1996 Olympic Equestrian Games, at Atlanta's Hartsfield International Airport.

During the AHC Annual Convention in September, meetings were held by the Animal Welfare Advisory Committee, the Health and Regulatory Advisory Committee, the Horse Show Advisory Committee, the Racing Advisory Committee and the State Horse Council Advisory Committee.

The AHC Racing Advisory Committee also met in December in Phoenix, Arizona, during the University of Arizona's Racetrack Industry Program.

The AHC feels that holding committee meetings at conventions of other organizations or other sites makes attendance more convenient for committee members, keeps us better informed and allows individuals not on our committees to participate.

AHC Activities Outside Washington

The primary function of the American Horse Council is to represent the horse industry before Congress and the federal regulatory agencies in Washington, D.C. However, the AHC also works to ensure the industry itself is aware of the issues currently being dealt with in Washington. To increase the awareness of the impact Washington can have on the horse industry, staff often travels around the country to equine related meetings and symposiums.

February
Jay Hickey was in Bal Harbour, Florida, in February at the Thoroughbred Racing Associations Eclipse Awards, discussing tax issues and Senator Kyl's Internet Gambling Prohibition bill. Steve Ralls spoke on the importance of horses maintaining the legal status of livestock at the International Livestock Congress in Houston, Texas.

March
March was a busy month for the AHC with Jay Hickey attending the Harness Tracks of American Annual Meeting in Orlando, Florida, the American Quarter Horse Association Annual Meeting in Atlanta, Georgia, and the Racing Commissioners International Annual Meeting in New Orleans, Louisiana. In addition, in March, Steve Ralls attended the Kentucky Horse Council's Legislative Summit in Lexington, Kentucky, where he spoke on the importance of grassroots lobbying. Amy Mann traveled to Nashville, Tennessee to speak at the Livestock Conservation Institute's Annual Meeting and National Symposium on Animal Health and International Trade.

April
Amy Mann attended the Animal Air Transport Association Annual Meeting in London, England in April.

August
In August Jay Hickey spoke at the Jockey Club dinner in Saratoga, New York about federal legislation.

October
The October Annual Meeting of the U.S. Animal Health Association in San Diego, California, was attended by Amy Mann.

November
Steve Ralls discussed the importance of recreational riders in November at the Texas Equine Industry Conference in College Station, Texas, and the 1999 Congress on Recreation and Resource Capacity in Aspen, Colorado.

December
Finishing the year, Jay Hickey was at the American Association of Equine Practitioners Annual Meeting in December in Albuquerque, New Mexico.

COLT Update

Again in 1999, the AHC's political action committee, COLT, raised funds to support those members of Congress who understand the importance of the horse industry to the economic, sporting and recreational life of the nation. In a continuing attempt to broaden the number of individuals whom the AHC may solicit, The AHC received permission to solicit the individual members of the American Association of Equine Practitioners, the American Quarter Horse Association, The Jockey Club and the U.S. Trotting Association. The AHC also organized political fundraisers to support the reelection of two Members of Congress at horse events during 1999. This effort is a very important complement to the broader work in Washington, DC and will continue to be expanded.

The American Horse Council, the national legislative representative for the horse industry, works daily with Congress, federal agencies and the industry itself to create an environment that benefits horses and the people who depend on, care about and enjoy them. A non-profit organization, the AHC's activities are funded entirely through membership dues. The AHC represents all breeds, disciplines and activities as well as owners, breeders, veterinarians, farriers, competitors, trainers, jockeys, drivers, breed registries, horsemen's associations, race tracks, horse shows and rodeos, commercial suppliers and state horse councils.

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Copyright © 1999 the American Horse Council.