Senate bill would lift tax on veterinary loan repayment program

Published on September 01, 2010
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Bipartisan legislation introduced in the Senate July 21 proposes to eliminate taxes on government programs that encourage veterinarians to practice in underserved areas.

The Veterinary Medicine Loan Repayment Program Enhancement Act (S. 3621) aims to alleviate a shortage of veterinarians working in rural areas by making the Veterinary Medicine Loan Repayment Program tax exempt, thereby increasing the number of veterinarians who can participate in the program.

Introduced by Democrat Tim Johnson of South Dakota and Republican Mike Crapo of Idaho, S. 3621 would also apply to similar state programs that encourage veterinarians to practice in underserved communities.

Nationwide, 500 counties have at least 5,000 farm animals but no veterinarians in the area to treat them, according to the AVMA, which is supporting the bill. This shortage could have dire consequences for human and animal health, public safety, animal welfare, disease surveillance, and economic development.

Unlike the counterpart program in human medicine, Veterinary Medicine Loan Repayment Program awards are currently subject to 39 percent federal taxation. The Department of Agriculture pays these taxes to the U.S. Treasury out of the money Congress appropriates for the program, decreasing the amount of funds available to award to participants enrolled in the program.

The Johnson-Crapo bill would remove this levy on the premise that the number of veterinarians selected to participate in the VMLPR would increase by a third.

"Communities in rural America depend on the health of their livestock for their livelihood, but many have no practicing veterinarian," Johnson said. "This bill will make it easier to bring more veterinarians to these underserved areas and meet this demand."

Crapo said the veterinary shortage affects not only animal agriculture but also disease surveillance and animal welfare. "In Idaho alone, nearly half of our counties are in designated shortage areas," he said. "This legislation will help alleviate the shortage of veterinarians and maximize the program through addressing the tax treatment of program assistance."

AVMA CEO Ron DeHaven agreed, saying S. 3621 would remove the program's tax burden and allow enough additional funds to provide one additional veterinarian for every three veterinarians currently scheduled to receive awards. "These additional veterinarians in underserved areas would go a long way to further protect our nation's food supply and public health," Dr. DeHaven said.

As of early August, the Veterinary Medicine Loan Repayment Program Enhancement Act had the support of more than 125 animal, agricultural, and veterinary medical organizations nationwide. It had been referred to the Senate Finance Committee.