Trump signs anti-race horse doping bill & $60 million gift to horse industry

Tax break for Paycheck Protection Program loan/grant recipients appears to have been the dangling carrot that brought horse racing industry support for omnibus funding bill

            WASHINGTON D.C.––U.S. President Donald Trump on December 27,  2020 “signed H.R. 133,  an Act making consolidated appropriations for the fiscal year ending September 30, 2021,  providing coronavirus emergency response and relief,  and for other purposes,”  announced White House spokesperson Judd Deere.

The most publicized part of H.R. 133 was an amendment allocating $900 billion in economic relief to individuals and businesses suffering harm from COVID-19 social distancing and quarantine measures.

Two riders

But the $2.3 trillion omnibus U.S. federal budget bill also included two riders of import to the horse industry.

One was the Horseracing Integrity & Safety Act,  to prohibit race day horse drugging, for the passage of which practically every advocacy group addressing horse issues has already claimed victory,  both on the humane and racing industry sides of the fence.

The Horseracing Integrity & Safety Act authorizes the creation of a new national Horseracing Integrity & Safety Authority.  This agency is to establish uniform national standards for horse medication, track safety and testing to detect use of performance-enhancing drugs.  The national standards––likely to become subjects of intensive lobbying and litigation in coming years––are to replace a hodgepodge of standards set at the state level.

The dangling carrot

The other component of H.R. 133 of particular importance to the horse industry,  especially the horse racing industry in New York state,  was an amendment to the rules pertaining to the use of funds from the federal Paycheck Protection Program.

This appears to have been the dangling carrot that won horse industry support for ratification of H.R. 133 in final form.

Explained New York Times writers Luke Broadwater,  Jesse Drucker,  and Rebecca R. Ruiz on December 22,  2020,  while H.R. 133 was awaiting Trump’s signature and Trump was balking at signing it without changes unrelated to animal issues,  “Tucked away in the 5,593-page spending bill that Congress rushed through is a provision that some tax experts call a $200 billion giveaway to the rich.

Double-dipping deduction

“It involves the tens of thousands of businesses that received loans from the federal government this spring with the promise that the loans would be forgiven, tax free,  if they agreed to keep employees on the payroll through the coronavirus pandemic.

“In passing the law in the spring,”  Broadwater,  Drucker,  and Ruiz detailed, “Congress explicitly said that the Paycheck Protection Program funds should not be included as taxable income — unlike,  say,  unemployment benefits.”

H.R. 133 compounds that tax break by allowing Paycheck Protection Program funding recipients to deduct as a business expense the cost of making payouts to employees.

In other words,  Paycheck Protection Program funding recipients will be able to deduct expenditures made with money they received tax-free,  in effect double-dipping into the U.S. Treasury.

Belmont Park & Aqueduct got $10 million

Small Business Administration data shows,  Broadwater,  Drucker,  and Ruiz continued,  that “Just 1% of the program’s 5.2 million borrowers received more than a quarter of the $523 billion disbursed.

“That 1% included the operator of New York’s biggest horse tracks,”  the New York State Racing Association,  owner of the Belmont Park and Aqueduct thoroughbred tracks near New York City.

The New York State Racing Association “received the maximum loan amount of $10 million,”  Broadwater,  Drucker,  and Ruiz reported.

Hundreds of other horse-related businesses received Paycheck Protection Program funds,  as practically the whole of the horse racing and exhibition industries have been shut down for most of 2020.

Top 43 horse industry recipients got up to $60 million

At least 43 horse-related businesses qualified for $150,000 or more in Paycheck Protection Program money,  for a cumulative maximum of more than $60 million that was expected to keep 4,033 people on the business’s payrolls,  according to data published on July 15,  2020 by Bill Shanklin of Horse Racing Business.

The recipients,  Shanklin reported,  included American Ruidoso Downs,  Bob Baffert Racing, Blood-Horse,  Bluegrass Thoroughbred Services,  California Thoroughbred Horsemen’s Foundation,  Chad C. Brown,  Claiborne Farm,  Colebrook Racing Stable,   Del Mar Thoroughbred Club,  Denali Stud, Ellis Entertainment Company,  Emerald Downs Racing,
Eurton Thoroughbred Racing,  Fasig-Tipton Company, Hill ‘N’ Dale Kentucky,  Kentucky Derby Museum,  Kentucky Downs,  KRM Wagering,  Lexington Trots Breeders Association, Machmer Hall Thoroughbreds,  Millennium Thoroughbreds,  Mott Thoroughbred Stables,  National Museum of Racing, North Metro Harness Initiative,  Ocala Breeders Sales Company,  R. Brisset Thoroughbred Stable,  Ralph Nicks Thoroughbreds,  Richard Mandella Inc.,  Rood, Riddle & Partners,  Rood & Riddle Veterinary Pharmacy,  Sallee Horse Vans,  Stone Farm,  Tampa Bay Downs,  New York Racing Association,  Thoroughbred Daily News,
Thoroughbred Racing Protective Bureau,  Thoroughbred Retirement Foundation,  Todd A. Pletcher Racing Stables, Jockey Club Information Systems,  Three Chimneys Farm,
Tommy Town Thoroughbreds,  West Point Thoroughbreds,  and Winchell Thoroughbreds.

Walking horse regulation

Excluded from H.R. 133 was any version of the Senator Joseph D. Tydings Memorial Prevent All Soring Tactics Act,  abbreviated as the PAST Act,  which would have increased regulation of the walking horse exhibition industry by banning high-stacked horseshoes and other “action devices” to make horses high-step.

The PAST Act,  amending the 1970 Horse Protection Act,  would also have added felony penalties for especially egregious violations.

The PAST Act,  passed by the House of Representatives in July 2019,  but stalled in the U.S. Senate until it died for the fifth consecutive legislative session,  became subject of a last-minute “compromise” amendment attempt led by Lamar Alexander,  80,  the soon-to-retire Republican U.S. Senator from Tennessee since 2002.

(See Will anti-show horse soring bill pull up lame through last-hurdle compromise?)

HSUS vs. Pacelle & Seay

The amendment attempt flushed into the open bitter differences between the Humane Society of the U.S. [HSUS] and Animal Wellness Action,  headed by former HSUS president Wayne Pacelle.

The present HSUS administration favored the PAST Act as written when it cleared the House of Representatives in July 2019,  championed by HSUS senior advisor on equine protection Keith Dane,  an advocate of flat-shod walking horse exhibition for more than 30 years.

Pacelle favored the much weaker amended version endorsed by Senator Alexander and the leading show horse industry groups.

The amended version was also favored by Mississippi attorney Clant M. Seay Jr.,  also known as Billy Goboy,  founder of the Citizens Campaign Against “Big Lick” Animal Cruelty.

Organizing protests and boycotts of walking horse shows throughout the rural South,  the Citizens Campaign Against “Big Lick” Animal Cruelty has since 2014 done more to expose and end the use of soring and “action devices than have all the U.S. national humane organizations combined since the 1970 passage of the Horse Protection Act.

Why Pacelle & Seay favored the Alexander version

The Pacelle/Seay position favoring the Alexander amendment was largely based on anticipating that the PAST Act would––again––not clear the U.S. Senate,  having repeatedly stalled in Senate committees since it was first introduced in 2012.

The Alexander amendment failed,  however,  on December 18,  2020,  and––unlike the Horseracing Integrity & Safety Act––was not added to H.R. 133 as an amendment to the omnibus budget bill.

H.R. 133,  with the Horseracing Integrity & Safety Act included,  but not the PAST Act,  went on to pass through both the House and Senate in final form on December 20,  2020,  winning House approval by a vote of 359 to 53,  and Senate approval by a vote of 92-6.

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