[Congressional Record Volume 156, Number 108 (Wednesday, July 21, 2010)]
[Senate]
[Pages S6079-S6080]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JOHNSON (for himself, Mr. Crapo, Mr. Brownback, Mr. 
        Cochran, Mr. Risch, Mr. Bennet, Ms. Klobuchar, Mr. Franken, Ms. 
        Snowe, Mr. Dorgan, Mr. Johanns, and Mr. Harkin):
  S. 3621. A bill to amend the Internal Revenue Code of 1986 to provide 
for an exclusion for assistance provided to participants in certain 
veterinary student loan repayment or forgiveness programs; to the 
Committee on Finance.
  Mr. JOHNSON. Mr. President, I rise today to introduce legislation 
with my friend, Senator Mike Crapo of Idaho, that will exempt 
Veterinary Medicine Loan Repayment Program, VMLRP, awards from Federal 
income taxation. I drafted this bipartisan bill with the intention of 
increasing veterinary services in underserved shortage areas that lack 
adequate veterinary expertise.
  The United States Department of Agriculture's, USDA, Veterinary 
Medicine Loan Repayment Program was authorized in 2003 by the National 
Veterinary Medical Services Act, NVMSA, to help qualified veterinarians 
offset a significant amount of the debt they accrue while pursuing 
their degrees if they in turn serve in high-priority veterinary 
shortage areas for a certain length of time. It also authorizes 
additional loan repayments for service in Federal emergency situations. 
However, the awards are currently taxed at a rate of 39 percent. This 
taxation is counterproductive and only delays delivery of veterinary 
services to areas that are in desperate need.
  In determining whether an area is eligible for assistance under the 
VMLRP, USDA has the ability to declare ``shortage situations,'' in 
which the Department makes declarations of veterinary shortage areas. 
Currently, there are two circumstances that lead to such designations. 
The first is by geography, when a given geographic area suffers a 
shortage of veterinarians overall. The second occurs when areas suffer 
a shortage of veterinarians who practice in a particular field of 
veterinary specialty. My home State of South Dakota currently has four 
designated shortage situations. Two of these designations are statewide 
designations noting a shortage of practitioners in veterinary 
specialties. On a national scale, there are 1,300 counties in the 
United States that have less than one food animal veterinarian per 
25,000 farm animals. Bear in mind, the demand for veterinarians across 
our country could increase 14 percent by 2016.
  South Dakota is truly a wonderful place to call home, but it is not 
always an easy place to earn a living. This is especially true for 
young people who are just starting out and are saddled with crushing 
levels of school debt. I have long fought for legislation that makes it 
easier for students to pay off their loans and to encourage others who 
may be reluctant to pursue higher education degrees, due to a lack of 
financial resources, especially when it comes to costly professional 
degrees including veterinary medicine. My legislation will help 
students pursue their educational goals, while also providing important 
services to underserved rural areas by enhancing the assistance 
veterinary graduates receive in exchange for meaningful public service.
  Agriculture is the top contributor to our South Dakota economy. For 
those farmers and ranchers who make their living in agriculture, this 
is more than a job; it is a way of life. Our ranchers, many of whom 
operate in very rural areas, rely on the access they have to qualified 
veterinarians to care for their livestock. Adequate access to 
veterinary care in rural areas is critical for both human and animal 
health, as well as animal welfare, disease surveillance, public safety 
and economic development across America. Everyone in America benefits 
from the veterinary services provided in even the most remote areas of 
our nation. As such, I am committed to doing all I can to help bring 
veterinarians to underserved parts of our state.
  I am proud to have fought for the establishment of the VMLRP program, 
and through my seat on the Senate Appropriations Committee. I have 
worked year after year to secure its proper funding. Unfortunately, 
however, the taxes assessed on these benefits prevent us from using 
congressionally appropriated funding to the fullest extent. For every 
three veterinarians selected for the loan repayment awards, an 
additional veterinarian could also

[[Page S6080]]

be selected if the program was made exempt from taxes. Such a tax 
exemption is not without precedent; Congress exempted from taxation the 
assistance received by participants in the National Health Services 
Corps, NHSC, several years ago, and I hope that my colleagues will join 
me in extending this same type of assistance to veterinarians 
participating in the VMLRP program.
  It should be noted that 122 organizations from across our Nation have 
announced their support for a tax exemption for VMLRP, including the 
American Veterinary Medical Association, American Association of Equine 
Practitioners, the American Farm Bureau Federation, the American Sheep 
Industry, the National Farmers Union, and the South Dakota Veterinary 
Medical Association, South Dakota Farm Bureau, South Dakota Cattlemen's 
Association, South Dakota Stockgrowers Association and many others.
  Agriculture is the economic engine that drives our rural communities, 
and without viable family farms and ranchers, our small towns and Main 
Street businesses throughout South Dakota and our nation would face 
significant hardships. It is absolutely essential that our agricultural 
producers have access to the services they need to be successful and 
responsible, and the Veterinary Medicine Loan Repayment Program 
Enhancement Act will help make that possible.
  Mr. President, I ask unanimous consent that a letter of support be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         American Veterinary Medical Association Governmental 
           Relations Division,
                                                   Washington, DC.

Statement of Support for the Veterinary Medicine Loan Repayment Program 
                            Enhancement Act

       The undersigned organizations urge Congress to pass the 
     Veterinary Medicine Loan Repayment Program Enhancement Act, 
     which will provide a federal income tax exemption for 
     payments received under the Veterinary Medicine Loan 
     Repayment Program (VMLRP) and similar state programs.
       Since Congress passed the ``National Veterinary Medical 
     Services Act'' (H.R. 1397, P.L. 108-161) on December 6, 2003, 
     it has appropriated $9.6 million for awards. About $3.75 
     million will be used to pay taxes on the awards. Every dollar 
     spent on taxes is one less available for loan repayment 
     awards.
       The first VMLRP awards to veterinarians practicing food 
     supply medicine and veterinary public health in federally 
     designated shortage areas across the country will be granted 
     by the end of fiscal year 2010. Veterinarians selected for 
     participation will receive up to $25,000 annually to repay 
     eligible student loans in exchange for three years of 
     practice in an approved shortage area.
       Legislation amending the Internal Revenue Code to make loan 
     repayment awards tax exempt should take effect for taxable 
     years beginning after December 31, 2009. Each VMLRP award 
     including taxes for three years will cost approximately 
     $104,250 per veterinarian ($75,000 for loan repayment and 
     $29,250 for taxes). If VMLRP were tax exempt, one additional 
     veterinarian could be selected for every three awarded under 
     current law.
       There is precedent for tax exemption. The VMLRP's 
     counterpart program for human medicine, the National Health 
     Service Corps (NHSC) which provides loan repayment for 
     primary care medical, dental and mental health clinicians, 
     was made tax exempt by the ``American Jobs Creation Act of 
     2004'' (H.R. 4520, P.L. 108-357), enacted on October 22, 
     2004. Prior to that NHSC awards were treated as taxable 
     income.
       Exempting veterinary medical loan repayment and forgiveness 
     program awards from federal income taxation will lead to more 
     communities having access to needed veterinary care sooner 
     than they may otherwise. We strongly support Congress' 
     efforts to ensure that our nation's food animals are healthy, 
     that our food supply is safe and secure, and our public 
     health is protected.
           Sincerely,
         American Veterinary Medical Association, Academy of Rural 
           Veterinarians, Alabama Veterinary Medical Association, 
           Alaska Veterinary Medical Association, American Animal 
           Hospital Association, American Academy of Veterinary 
           Nutrition, American Association for Laboratory Animal 
           Science, American Association of Avian Pathologists, 
           American Association of Bovine Practitioners, American 
           Association of Corporate and Public Practice 
           Veterinarians, American Association of Equine 
           Practitioners, American Association of Feline 
           Practitioners, American Association of Food Hygiene 
           Veterinarians, American Association of Public Health 
           Veterinarians, American Association of Small Ruminant 
           Practitioners, American Association of Swine 
           Veterinarians, American Association of Veterinary 
           Clinicians, American Association of Veterinary 
           Laboratory Diagnosticians, American Association of Zoo 
           Veterinarians, American Board of Veterinary 
           Practitioners,
         American Board of Veterinary Toxicology, American College 
           of Laboratory Animal Medicine, American College of 
           Poultry Veterinarians, American College of 
           Theriogenologists, American College of Veterinary 
           Dermatology, American College of Veterinary 
           Pathologists, American College of Veterinary Radiology, 
           American Farm Bureau Federation ', American 
           Feed Industry Association, American Horse Council, 
           American Meat Institute, American Rabbit Breeders 
           Association, Inc., American Sheep Industry, American 
           Society of Animal Science, American Society of 
           Laboratory Animal Practitioners, American Veal 
           Association, Animal Agriculture Alliance's, Animal 
           Health Institute, Animal Welfare Institute, Arizona 
           Veterinary Medical Association, Arkansas Veterinary 
           Medical Association.
         Association for Women Veterinarians Foundation, 
           Association of American Veterinary Medical Colleges, 
           Association of Avian Veterinarians, Association of Zoos 
           & Aquariums, Bayer Animal Health, Boehringer Ingelheim 
           Vetmedica, Inc., California Veterinary Medical 
           Association, Center for Rural Affairs, Colorado 
           Veterinary Medical Association, Connecticut Veterinary 
           Medical Association, Delaware Veterinary Medical 
           Association, District of Columbia Veterinary Medical 
           Association, Elanco Animal Health (A Division of Eli 
           Lilly & Company), Federation for Animal Science 
           Societies, Florida Veterinary Medical Association, 
           Georgia Veterinary Medical Association, Hawaii 
           Veterinary Medical Association, Idaho Veterinary 
           Medical Association, Illinois State Veterinary Medical 
           Association, Indiana Veterinary Medical Association, 
           International Lama Registry.
         Iowa Veterinary Medical Association, Kansas City Animal 
           Health Corridor, Kansas Veterinary Medical Association, 
           Kentucky Veterinary Medical Association, Livestock 
           Marketing Association, Louisiana Veterinary Medical 
           Association, Maine Veterinary Medical Association, 
           Maryland Veterinary Medical Association, Inc., 
           Massachusetts Veterinary Medical Association, Michigan 
           Veterinary Medical Association, Minnesota Veterinary 
           Medical Association, Mississippi Veterinary Medical 
           Association, Missouri Veterinary Medical Association, 
           Montana Veterinary Medical Association, National 
           Aquaculture Association, National Association of 
           Federal Veterinarians, National Association of State 
           Public Health Veterinarians, National Cattlemen's Beef 
           Association, National Chicken Council, National Council 
           of Farmer Cooperatives.
         National Dairy Herd Information Association, National 
           Farmers Union, National Livestock Producers 
           Association, National Milk Producers Federation, 
           National Pork Producers Council, National Renderers 
           Association, National Turkey Federation, Nebraska 
           Veterinary Medical Association, Nevada Veterinary 
           Medical Association, New Hampshire Veterinary Medical 
           Association, New Jersey Veterinary Medical Association, 
           North American Deer Farmers Association, North Carolina 
           Veterinary Medical Association, North Dakota Veterinary 
           Medical Association, Northeast States Association for 
           Agriculture Stewardship, Ohio Veterinary Medical 
           Association, Oklahoma Veterinary Medical Association, 
           Oregon Veterinary Medical Association, Pet Food 
           Institute, Puerto Rico Veterinary Medical Association 
           (Colegio de Medicos Veterinarios de Puerto Rico).
         Pennsylvania Veterinary Medical Association, Rhode Island 
           Veterinary Medical Association, Rocky Mountain Farmers 
           Union, Society for Theriogenology, South Carolina 
           Association of Veterinarians, South Dakota Stockgrowers 
           Association, South Dakota Veterinary Medical 
           Association, State Agriculture and Rural Leaders, 
           Student American Veterinary Medical Association, 
           Synbiotics Corporation, Tennessee Veterinary Medical 
           Association, Texas Veterinary Medical Association, Utah 
           Veterinary Medical Association, United Egg Producers, 
           United States Animal Health Association, Vermont 
           Veterinary Medical Association, Virginia Veterinary 
           Medical Association, Washington State Veterinary 
           Medical Association, Wisconsin Veterinary Medical 
           Association, Wyoming Veterinary Medical Association.
                                 ______