American Horse Council Efforts to Address ELD Mandate

November 30, 2017

Over the past months the American Horse Council (AHC) has reached out to the equine community to determine the potential impact of the upcoming Electronic Logging Device mandate. Based on the information received, the AHC, in collaboration with the rest of the animal agriculture community, has requested that the Department of Transportation (DOT) grant a one-year enforcement delay followed by a waiver and limited exemptions from compliance with the December 18, 2017 implementation date for the Final Rule on Electronic Logging Devices (ELDs) and Hours of Service (HOS). Additionally, we requested that the DOT address the significant problems with the mandate that will occur if the compliance deadline is not extended. The welfare, safety, and health of the animals in transit, together with the safety of other drivers on the road, are top priorities for the equine industry and its enthusiasts.

The livestock sector has consistently been one of the safest of the commercial hauling sectors. The Large Truck Crash Causation Study, conducted by the Federal Motor Carrier Safety Administration (FMCSA) and the National Highway Traffic Safety Institute, showed that of 1,123 accidents involving trucks hauling cargo, only five involved the transportation of livestock. Similarly, the report titled Trucks Involved in Fatal Accidents Fact-book 2005, conducted by the Transportation Research Institute, shows that livestock transporters accounted for just 0.7 percent of fatal accidents. The ELD mandate itself, which is the subject of this petition, does nothing to improve that record of safety over paper logs.

While this figure is not irrelevant, and any safety improvements should be considered, the trajectory of this rule’s implementation has left much to be desired.  Despite its being issued nearly two years ago, awareness of this rule among livestock haulers and the equine industry is nearly non-existent. For instance, FMCSA’s recent change to include livestock in its interpretation of the 150-air mile exemption for agricultural commodities, a change that the industry strongly supports and appreciates, has raised many additional questions from livestock haulers who are unsure about the mechanics of the new exemption and even if it means they are exempt from the ELD mandate altogether. More time is needed to reach out to the horse industry, and ensure that industry outreach can address ELD compliance and ELD impact.

Many horse operations and competitions are in rural areas, routinely requiring long, and repeated, trips. These animals, when loaded onto trailers, are vulnerable to changes in temperature, humidity, and precipitation. Horse haulers are accustomed to managing these changing conditions through planning, log books and notations in those books. These planning techniques have adapted and evolved over decades as technology has improved. Unfortunately, the quick transition to ELDs does not allow for the natural trial and error process to adequately meet the needs of the horse industry. 

The equine industry and the millions of horse fans who attend equine events rely on safe and effective methods of transportation from every corner of the United States. Domestic transit of our competition and breeding animals is critical to the business continuity of our industry and largely relies on the use of large commercial haulers. These individuals have expressed their concern with the implications of this rule in regards to the negative impacts to standards in welfare, biosecurity and cost.

We are disappointed that the FMCSA did not feel the need to reach out to the larger livestock industry stakeholders prior to finalizing this rule, but specifically for not reaching out to the equine industry considering the constant and repeated travel inherent to the competitive, coast to coast nature of our industry. While horse haulers are able to provide more accommodating shipping conditions compared to other livestock sectors, the issues we have with immediate implementation of the rule mirror those of the larger animal agriculture community.       

The American Horse Council will continue to petition for an enforcement delay, to be followed by a waiver and/or limited exemptions from compliance with the final rule on ELDs, and specifically the expected Hours of Service (HOS). Additionally we will continue to take advantage of any opportunity to collaborate with FMCSA and the DOT during this delay to better meet the needs of the animal agriculture community on future regulatory efforts. 

Please contact Cliff Williamson at the American Horse Council with questions or comments at 202-296-4031 or at cwilliamson@horsecouncil.org .

Senate Unveils Tax Reform Details, Doubles Estate Tax Exemption without Full Repeal

November 10, 2017

On the heels of the House of Representatives’ release of the Tax Cuts and Jobs Act (H.R. 1) last week, the Senate Finance Committee began to roll out details related to its tax reform bill on Thursday afternoon, not releasing text and an official revenue “score” until Thursday night.  There are some major differences between the two bills that both chambers must reconcile prior to presenting legislation to the president’s desk for his signature.   Notably for the equine and broader agriculture sectors, the senate plan would double the exemption for the estate tax without eliminating it altogether, as provided in H.R. 1. The Senate Finance Committee will begin to mark-up the legislation on Monday, November 13. Please see the below highlights, outlining some key provisions that will impact the equine industry: 

Business Provisions

  • Corporate Tax Rate: The senate bill delays reduction of the corporate tax rate from 35 percent to 20 percent until 2019. By contrast, H.R. 1 provides an immediate corporate tax cut, effective in 2018.  
  • Expensing: The senate bill provides “100% bonus depreciation within five years,” which is similar to a provision in H.R. 1.     
  • Business Interest: The plan states that small businesses will be able to deduct interest on loans intended to finance the growth of operations and inventory. 
  • Alternative Minimum Tax (AMT) – Like H.R. 1, the senate bill eliminates the unpopular AMT, which doubles the amount of time taxpayers must spend to calculate their business or individual tax liability within any given year.

Individual Provisions

  • Estate Tax: The senate bill doubles the amount of the estate tax exemption, currently valued at $5.49 million for individuals, but falls short of an outright repeal.  By contrast, H.R. 1 eliminates the estate tax within six years of enactment.  AHC partners are already reaching out to senators to offer a repeal amendment during the mark up scheduled to begin early next week.                    
  • State and Local Taxes (SALT) – The senate bill includes a full repeal of the SALT deduction for individuals.  The House bill, however, includes a compromise provision allowing limited deductions for state and local property taxes.    
  • Mortgage Interest: Senators state that the provision will cap the deduction for mortgage interest indebtedness at $1 million.  H.R. 1, however, establishes a $500,000 cap on interest from new home purchases, a provision drawing criticism from the homebuilders. 
  • Charitable Contributions:  In cases of individual cash contributions, the senate bill increases the percentage-limit deduction from the current rate of 50% to 60%. 

Next Steps

Because of the major differences between the House and Senate tax bills, the two chambers will likely convene a conference committee to negotiate a final package to send to the president.  The House Ways and Means Committee concluded its four day mark-up of H.R. 1 on Thursday afternoon, and will send the bill to the floor for a vote next week.  This puts the House on track to pass its tax bill prior to the Thanksgiving Holiday.   The Senate, however, will likely vote on its final package after Thanksgiving, according to a statement from Senate Majority Whip John Cornyn (R-TX).     

To keep track of ongoing tax policy developments, AHC is conducting a webinar  featuring congressional and industry presenters on Monday, November 13 at 3:00 PM ET.  To view a copy of an outline of the bill’s key provisions and revenue impacts, please click here: https://www.finance.senate.gov/imo/media/doc/11.9.17%20JCT.pdf. To see a two-page copy of the plan’s “policy highlights,” please click here:  https://www.finance.senate.gov/imo/media/doc/11.9.17%20Policy%20Highlights.pdf 

To view a 253-page description of the bill’s provisions, please click here:

https://www.finance.senate.gov/imo/media/doc/11.9.17%20Chairman’s%20Mark.pdf 

For more information, please contact Bryan Brendle, Director of Legislative Affairs, at bbrendle@horsecouncil.org.  

House Releases Tax Reform Details, Moves Forward with Small Business, Estate Tax Relief

November 2, 2017

The House Ways and Means Committee has shared highlights and text on historic tax reform legislation, the Tax Cuts and Jobs Act of 2017.  While highlights from the bill are outlined below, AHC is currently reviewing the fine print of the 429-page legislation, received from the tax committee shortly after 12:00 PM ET.  Today’s release initiates a long over-due effort to streamline the nation’s 70,000 page tax code.  In a move that is consistent with advocacy from the equine industry and its allies, the House bill will repeal the estate tax after six years, and reduce rates for small business, or so-called “pass through” entities.  Please see the below highlights, focusing on issues that have the most significant impact on the equine industry: 

 

Business Provisions

  • Small Business: The bill sets a maximum tax rate of 25 percent on small business, or “pass through” entities.  Under current law, small businesses can pay federal taxes at rates as high as 39.6 percent. 
  • Corporate Tax Rate: The bill lowers the corporate rate to 20 percent, down from the current 35 percent corporate tax rate.  
  • Expensing: The plan will “allow business to immediately write off the full cost of new equipment.” 
  • Business Interest: The plan also states that small business will be able to deduct interest on loans that allow job creators to “hire workers and increase paychecks.”   

Individual Provisions

  • Estate Tax: The House bill will repeal the estate tax after six years, and double the current exemption on estates valued at $5.49 million.  This is a positive development for family-owned farms and businesses.
  • Charitable Giving: The plan “continues the deduction for charitable contributions.”
  • Mortgage Interest: The bill preserves the deduction for existing mortgage interest, and establishes a $500,000 cap on interest from new home purchases
  • Streamlined Tax Brackets: The plan consolidates the number of individual brackets from seven to four.  Under the House bill, the IRS will create brackets at rates of 12 percent, 25 percent, 35 percent and preserve the 39.6 percent on higher income earners.   
  • Retirement Savings: The plan “retains retirement plan options” including 401(k)s and Individual Retirement Accounts. 
  • Alternative Minimum Tax (AMT) – The plan eliminates the unpopular AMT, which doubles the amount of time taxpayers must spend to calculate their tax liability within any given year.
  • In a compromise that has bogged down negotiations, the House plan will retain the deduction for state and local property taxes at amounts up to $10,000.

Path Forward

According to congressional sources, the Ways and Means Committee will mark up the legislation for four days, beginning the week of Monday, November 6.   The bill will go to the House floor for a vote before Thanksgiving, which falls on Thursday, November 23.  According to Senate Majority Whip John Cornyn (R-TX), the Senate will take up tax reform legislation after Thanksgiving. 

To learn more about up-to-date activity related to tax reform, AHC is conducting a webinar on the issue featuring congressional and industry perspectives on Monday, November 13 at 3:00 PM ET.  To view a copy of a two-page summary of the bill’s highlights, please click here:  Tax Policy Highlights.  To review a copy of the bill, please click here: now available online

For more information, please contact Bryan Brendle, Director of Legislative Affairs, atbbrendle@horsecouncil.org 

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