II 109th CONGRESS 1st Session S. 1528 IN THE SENATE OF THE UNITED STATES July 28, 2005 Mr. McConnell (for himself, Mrs. Lincoln, and Mr. Bunning) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide for the tax treatment of horses, and for other purposes.

1.

Short title

This Act may be cited as the Equine Equity Act of 2005.

2.

3-Year depreciation for all race horses

(a)

In general

Clause (i) of section 168(e)(3)(A) of the Internal Revenue Code of 1986 (defining 3-year property) is amended to read as follows: (i)any race horse, . (b)

Effective date

The amendment made by this section shall apply to property placed in service on or after the date of the enactment of this Act.

3.

Reduction of holding period to 12 months for purposes of determining whether horses are Section 1231 assets

(a)

In general

Subparagraph (A) of section 1231(b)(3) of the Internal Revenue Code of 1986 (relating to definition of property used in the trade or business) is amended by striking and horses. (b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2005.

4.

Livestock assistance

(a)

In general

In carrying out a livestock assistance, compensation, or feed program, the Secretary of Agriculture shall include horses within the definition of livestock covered by the program. (b)

Conforming amendments

(1)Section 602(2) of the Agricultural Act of 1949 (7 U.S.C. 1471(2)) is amended— (A)by inserting horses, after bison,; and (B)by striking equine animals used for food or in the production of food,. (2)Section 806 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (Public Law 106–387; 114 Stat. 1549A–51) is amended by inserting (including losses to elk, reindeer, bison, and horses) after livestock losses. (3)Section 10104(a) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 1472(a)) is amended by striking and bison and inserting bison, and horses. (4)Section 203(d)(2) of the Agricultural Assistance Act of 2003 (Public Law 108–7; 117 Stat. 541) is amended by striking and bison and inserting bison, and horses. (c)

Applicability

(1)

In general

This section and the amendments made by this section apply to losses resulting from a disaster that occurs on or after the date of enactment of this Act. (2)

Prior losses

This section and the amendments made by this section do not apply to losses resulting from a disaster that occurred before the date of enactment of this Act.