[Congressional Record Volume 157, Number 35 (Wednesday, March 9, 2011)]
[Senate]
[Pages S1504-S1505]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JOHNSON of South Dakota (for himself, Mr. Crapo, Mr. 
        Harkin, Mr. Moran, Mr. Bennet, Mr. Cochran, Mr. Merkley, Mr. 
        Roberts, Mrs. Gillibrand, Mr. Barrasso, Ms. Landrieu, Mr. 
        Risch, Ms. Klobuchar, and Mr. Isakson):
  S. 518. 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 of South Dakota. Mr. President, I rise today to 
reintroduce 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. 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. Additionally, there are 500 counties that have at 
least 5,000 farm animals and not a single veterinarian. 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 be selected to serve in an 
underserved shortage area 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, in 2004, 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 nearly 140 organizations from across the 
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 Association, the National 
Farmers Union, and the South Dakota Veterinary Medical Association, 
South Dakota Farm Bureau, South Dakota Farmers Union, South Dakota 
Cattlemen's Association, South Dakota Stockgrowers Association and 
many, 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'' (PL 108-161) on Dec. 6, 2003, it has 
     appropriated $9.6 million for awards. About $3.75 million of 
     this amount will be used by the Agriculture Secretary to pay 
     taxes on the awards. Every dollar spent on taxes is one less 
     available for loan repayment awards. If awards are made tax 
     exempt, one additional veterinarian can be selected for every 
     three awarded under current law.
       The first 62 veterinarians were selected for VMLRP awards 
     in September 2010. These veterinarians will practice food 
     supply medicine and veterinary public health in federally 
     designated shortage situations across the country. The 
     selected group of veterinarians will receive up to $25,000 
     annually for three years to repay student loans. Each VMLRP 
     award including taxes for three years costs approximately 
     $104,250 per veterinarian ($75,000 for loan repayment and 
     $29,250 for taxes).
       Congress set a precedent for tax exemption. The National 
     Health Service Corps (NHSC) loan repayment program 
     (counterpart program for human medicine) was exempted by 
     ``The American Jobs Creation Act of 2004'' (H.R. 4520, P.L. 
     108-357), enacted on Oct. 22, 2004. Prior to this legislative 
     change, NHSC loan repayment awards were treated as taxable 
     income.
       Veterinarians selected for VMLRP provide a wide array of 
     necessary veterinary services for farmers' and ranchers' 
     livestock including beef and dairy cows, poultry, swine, 
     goats, sheep, and farm horses. VMLRP veterinarians ensure 
     animal health and welfare while protecting the nation's food 
     supply. They provide veterinarian-accredited medical 
     procedures including routine services (vaccination, 
     castration and dehorning) and emergency services (for acute 
     illness, trauma, dystocia or obstetrical difficulties). Other 
     services performed include those required for interstate 
     movement of livestock, including commuter agreements and 
     animal health testing requirements needed to ship livestock. 
     VMLRP veterinarians perform tuberculosis checks and 
     accredited blood sample services for Brucellosis, Bluetongue, 
     and Bovine Viral Diarrhea. Additionally, they may provide 
     reproduction management consultation services and 
     consultation in health care programs and nutrition, disease 
     surveillance and diagnostics for state and federal disease 
     programs and foreign animal diseases. They may also play a 
     role in a state's

[[Page S1505]]

     veterinary emergency response team and take part in disease 
     control and eradication programs.
       Exempting veterinary medicine loan repayment and 
     forgiveness program awards from federal income taxation will 
     lead to more communities having needed veterinary services 
     sooner than they may otherwise. We strongly support Congress' 
     efforts to ensure that our nation's livestock 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 Dairy 
     Science Association, American Farm Bureau 
     Federation,' American Feed Industry Association.
       American Horse Council, American Meat Institute, American 
     Rabbit Breeders Association, Inc., American Sheep Industry 
     Association, American Society of Animal Science, American 
     Society of Laboratory Animal Practitioners, American Veal 
     Association, American Veterinary Medical Foundation, 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 
     Veterinary Biologics Companies, 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 Bioscience Authority, 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 Departments of Agriculture, 
     National Association of State Public Health Veterinarians, 
     National Chicken Council, National Council of Farmer 
     Cooperatives, National Dairy Herd Information Association, 
     National Farmers Union, National Institute for Animal 
     Agriculture, 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, New York State Veterinary Medical Society, 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, 
     Pfizer Animal Health, Puerto Rico Veterinary Medical 
     Association (Colegio de Medicos Veterinarios de Puerto Rico), 
     Pennsylvania Veterinary Medical Association, Poultry Science 
     Association, Rhode Island Veterinary Medical Association, 
     Rocky Mountain Farmers Union, Silliker, Inc., Society for 
     Theriogenology, South Carolina Association of Veterinarians, 
     South Dakota Cattlemen's Association, South Dakota Farmers 
     Union, South Dakota Pork Producers Council, South Dakota 
     Stockgrowers Association.
       South Dakota Veterinary Medical Association, South Dakota 
     Farm Bureau, State Agriculture and Rural Leaders, Student 
     American Veterinary Medical Association, Synbiotics 
     Corporation, Tennessee Veterinary Medical Association, Texas 
     Veterinary Medical Association, United Egg Producers, United 
     States Animal Health Association, U.S. Cattlemen's 
     Association, Utah Veterinary Medical Association, Vermont 
     Veterinary Medical Association, Virginia Veterinary Medical 
     Association, Washington State Veterinary Medical Association, 
     Wisconsin Veterinary Medical Association, Wyoming Veterinary 
     Medical Association.
                                 ______