The close of the summer term has sparked renewed discussion of the Prevent All Soring Tactics Act (PAST Act) HR, 1518, sponsored by Rep. Ed Whitfield, R-Ky., and 303 other House members. It was referred to the Subcommittee on Commerce, Manufacturing, and Trade, where it has remained stalled since April 12, 2013. With nearly 70 percent of the House in support of this Bill, outcries from supporters challenge legislators to pass the legislation before the end of this session.
“Citizen Science” and the New World of EPA Regulatory Enforcement
In March, 2013, the Environmental Protection Agency delivered a presentation at an Air Monitoring Workshop describing what it termed “Next Generation Air Monitoring”. The goal was to spur development of new air monitoring technologies, primarily localized and low-cost alternatives to the more expensive method of traditional, stationary lab analysis. More specifically, the presentation emphasized the promise of active citizen involvement via “citizen science”.
SCOTUS Opinion Allows EPA More Regulatory Power
The Supreme Court took away some of the Environmental Protection Agency’s (EPA) power on Monday June 23, 2014. In an opinion written by Justice Scalia in Utility Air Regulatory Group v. Environmental Protection Agency, the Court took away some of the EPA’s power to impose harsher emission standards. However, the Court simultaneously protected a majority of the EPA’s power to regulate greenhouse gases.
A ‘Vicious’ Animal Named Scuppy
The horse industry in Connecticut was thrown into turmoil in May of 2006 at the hooves of a horse named Scuppy. In Vendrella v. Astriab Family Limited Partnership, the Supreme Court of Connecticut recently released its 6-0 decision in April, affirming the Appellate Court’s ruling that a horse belongs to “a species naturally inclined to do mischief or be vicious.”
Taking a Stride Back: Dirt Track Changes Coming to the Bluegrass
By: Eric Finke, Staff Member
Horse racing returns to the Bluegrass as Lexington once again becomes the horse capital of the world.[i] This spring will offer the last meet on the current synthetic track as the President of Keeneland, Bill Thomson, announced last week that “a state of the art dirt track” will once again become the racing surface. [ii] Keeneland has long been the final tune-up for many horses that have hopes of running in the Oaks and the Derby at Churchill Downs.[iii]
In 2006, Keeneland introduced its current synthetic track to increase the safety of horses under the stress of racing on dirt.[iv] This safety trend was seen nationwide as the California Horse Racing Board went so far as to require tracks, including the famous Santa Anita Park, to lay down a synthetic surface by 2007.[v] A surface switch proved to be a success based on studies of the Equine Injury Database.[vi] As recent as 2013, there were only 0.43 breakdowns per 1000 starts at Keeneland on the synthetic track surface, while the overall breakdown rate across the nation on dirt surfaces was 2.11 per 1000 starts.[vii] In the midst of all this change, Churchill Downs continued using a dirt surface, causing many owners to begin bypassing tracks like Keeneland, in favor of dirt.[viii] Horse owners that once eyed the Blue Grass Stakes as the premier event for testing the Derby waters have begun to stay away in recent years.[ix] World famous horse trainer Todd Pletcher has refused to run on a synthetic surface with a true frontrunner in his stable, preferring to run on a consistent dirt surface that would be comparable to what Churchill Downs has to offer.[x]
It is not surprising, albeit unfortunate, that courses including Keeneland are now reverting to the original dirt despite statistic proof of synthetic’s beneficial health results. Weather conditions in the United States are not as ideal some say, as compared to other continents like Europe where synthetic has been a great success.[xi] Expensive maintenance costs of synthetic tracks are cited as a reason to change back to dirt for others.[xii] New York Times sports columnist Joe Drape writes about the Keeneland announcement and who it is really serving, “Who’s more important: the equine athletes who put on the show, or the commercial breeders and captains of industry who sit on boards and in the box seats? We got the answer, and it’s sad.”[xiii] Contrary to these sentiments surrounding the reversion to dirt, Josh Rubenstein, Vice President of Del Mar Surfside Race Place, said, “We want absolutely the safest surface possible and feel returning to dirt will allow us to do that.”[xiv]
It is no secret that the culmination of the horseracing season, the Breeders Cup, has been held on the dirt tracks of Santa Anita Park and Churchill Downs the last four years straight.[xv] Thomason made reference to this unofficial dirt expectation, “It hasn't been laid down as a condition ... but we also know one of the things it does impact is our horsemen who have their horses going through those traditional dirt races coming to the Breeders' Cup."[xvi]
With so much potential being left out of both the starting and ticket gates, Keeneland is presumably under pressure to revert back to a surface that will draw the best competition once again. Avid fans of Keeneland horse racing and sports are left with an unsettling question after these various arguments: Is this most recent change to horse racing being done for the love of the sport, or purely for the love of money?
_________________[i] VisitLex: About Lexington, http://www.visitlex.com/about/, (last visited Apr. 9, 2014).
[ii] Alicia Wincze Hughes, Keeneland to replace synthetic racing surface with return to dirt track, Kentucky.com (Apr. 2, 2014), http://www.kentucky.com/2014/04/02/3174914/keeneland-to-replace-synthetic.html.
[iii] Keeneland spring meet offers Derby, Oaks preps, Washington Times (Apr. 3, 2014), http://www.washingtontimes.com/news/2014/apr/3/keeneland-spring-meet-offers-derby-oaks-preps/.
[iv] Natalie Voss, Keeneland’s Switch Back to Dirt Track Could Appeal to Breeder’s Cup and Derby Contenders, Business Lexington (Apr. 7, 2014), http://bizlex.com/2014/04/keeneland-switch-back-to-dirt-track-could-appeal-to-breeders-cup-and-derby-contenders/.
[v] Hughes, supra note 2.
[vi] Equine Fatality Summary: Keeneland, Equine Injury Database, http://www.jockeyclub.com/pdfs/eid/Keeneland.pdf (last visited Apr. 9, 2014).
[vii] Supplemental Tables of Equine Injury Database Statistics for Thoroughbreds, The Jockey Club, http://jockeyclub.com/pdfs/eid_5_year_tables.pdf (last visited Apr. 9, 2014).
[viii] Voss, supra note 4.
[ix] Hughes, supra note 2.
[x] Don Agriss, Up the Backstretch: A back-to-nature movement in racing, The Island Packet (April 3, 2014), http://www.islandpacket.com/2014/04/03/3039209/up-the-backstretch-a-back-to-nature.html.
[xi] Voss, supra note 4.
[xii] Andrew Beyer, Keeneland reluctantly will be digging the dirt once again, Washington Post (Apr. 9, 2014), http://www.washingtonpost.com/sports/othersports/keeneland-reluctantly-will-be-digging-the-dirt-once-again/2014/04/09/080dbb3a-bfff-11e3-b574-f8748871856a_story.html.
[xiii] Joe Drape, A Track’s Shift to Dirt Adds to Horses’ Risks, The New York Times (Apr. 3, 2014), http://www.nytimes.com/2014/04/04/sports/in-a-tracks-decision-horses-are-the-losers.html?hpw&rref=sports.
[xiv] Joe Tash, Del Mar Fairgrounds to replace synthetic track with dirt, Del Mar Times (Apr. 9, 2014), http://www.delmartimes.net/2014/04/09/del-mar-fairgrounds-to-replace-synthetic-track-with-dirt/.
[xv] Breeder’s Cup, http://www.breederscup.com/history/event-year (last visited Apr. 9, 2014).
[xvi] Hughes, supra note 2.
EPA Proposal Takes Great Steps to Broaden Clean Water Act Jurisdiction
By: Connor Egan, Editor-in-Chief
On March 25, 2014, the Environmental Protection Agency and Army Corps of Engineers released a proposed rule amending the Clean Water Act.
The proposal is a response to a near decade of demand by state and federal legislators and environmental groups to clarify the extent of the Act’s jurisdiction.
The proposed rule clarifies the Act’s jurisdiction over the nation’s streams and wetlands by amending its definition of “water.”
Today, Supreme Court decisions in 2001 and 2006
have left many uncertain as to the actual breadth of the Act’s coverage.
The proposed rule remedies this uncertainty by explicitly listing wetlands and intermittent streams as protected waters.
The EPA and Corps of Engineers are currently engaged in a 90-day outreach effort to solicit comment before the final rule making.
In an op-ed released in conjunction with the proposed rule, EPA Administrator Gina McCarthy explained, “[w]e are clarifying protection for the upstream waters that are absolutely vital to downstream communities.”
In a coordinate press release, the EPA stressed that the amendments would be consistent with the recent Supreme Court decisions, which seemingly narrowed the scope of Clean Water Act jurisdiction.
Since the proposal’s release, is has been hailed as the “biggest step forward for clean water in more than a decade.”
While the rule will not be finalized until early summer, its ratification would bring approximately 20 million acres of wetlands and 2 million miles of streams under EPA protection.
_________________
EPA and Army Corps of Engineers Clarify Protection for Nation’s Streams and Wetlands: Agriculture’s Exemptions and Exclusions from Clean Water Act Expanded By Proposal, EPA, Mar. 25, 2014,
[hereinafter Press Release] (publication in Federal Register still pending).
Id.
Id.
See Rapanos v. United States, 547 U.S. 715 (2006); Solid Waste Agency of N. Cook Cnty. v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001).
Neela Banerjee, Clean Water Act proposal would protect more water sources in West, L.A. Times, Mar. 25, 2014, available at
http://www.latimes.com/nation/la-na-epa-waters-20140326,0,1080552.story#axzz2yznfcabq
.
Press Release, supra note 2.
Id.
Gina McCarthy, Clearer Protections for Clean Water, The Huffington Post, Mar. 25, 2014, available at
http://www.huffingtonpost.com/gina-mccarthy/clearer-protections-for-c_b_5029328.html
.
Press Release, supra note 2.
Environment America, EPA Rule Would Close Loopholes in Clean Water Act, Restore Protections for Streams and Wetlands, EcoWatch, Mar. 25, 2014,
http://ecowatch.com/2014/03/25/epa-clean-water-act-restore-protections-wetlands/
.
Kate Bissell, Proposed Rule to Clarify Clean Water Act Coverage, The Wildlife Society, Mar. 31, 2014,
http://news.wildlife.org/featured/proposed-rule-to-clarify-clean-water-act-coverage/
; Juliet Eilperin and Darryl Fears, EPA proposes greater protections for streams, wetlands under Clean Water Act, Wash. Post, Mar. 25, 2014, available at
.
UK College of Law: KLJ & KJEANRL Hold Annual Banquet
The University of Kentucky College of Law recently reported: The Kentucky Law Journal (KLJ) and the Kentucky Journal of Equine, Agriculture, and Natural Resources Law (KJEANRL) held their annual banquet on Wednesday, March 26, at the Boone Center. There were roughly 140 attendees, including faculty and members of both journals.
Rachel King, Editor-in-Chief of the KJEANRL, and Sarah Lawson, Editor-in-Chief of the KLJ, each gave a short “State of the Journal Address.” Then Judge Jennifer Coffman delivered the keynote address to the banquet attendees, highlighting the importance of developing leadership skills. She was introduced by Dean Brennen, who also said a few words. Awards were presented by each Editor-in-Chief of the respective journals.
A Horse Owner’s Tax Checklist
By: Matthew Doane, Staff Member
With tax day upon us, horse owners must be cautious if they are attempting to deduct business expenses related to their horse activity. Section 183(a) of the Internal Revenue Code states, “[i]n the case of an activity engaged in by an individual or an S corporation, if such activity is not engaged in for profit, no deduction attributable to such activity shall be allowed under this chapter except as provided in this section.”[i] If an activity is not “engaged in for profit,” provision (b) of section 183 allows deductions only to the extent of gross income derived from the activity.[ii] Deemed the “hobby loss rules,”[iii] this means that if an individual’s horse activity does not rise to the level of “engaged in for profit,” but is simply a hobby, then that individual will only be able to deduct allowable expenses up to the threshold of income they have received relating to the activity.[iv] This can lead to serious tax implications if a taxpayer was planning on horse-related expenses being deductible, primarily larger tax liability, or in the case of previous tax year where a taxpayer included the deductions, an audit by the IRS. In 2011, this exact situation occurred, leading to a Tax Court opinion that provides some guidance to horse owners and the deductibility of horse-related expenses. [v]
In Blackwell v. Comm’r., the petitioners, Mark and Patti Blackwell, were seeking a redetermination of tax deficiencies on their 2005 and 2006 federal income tax returns, relating to the deductibility of business expenses related to their horse-breeding operation, Fresh Horses Farm.[vi] The main issue in the case, as laid out by Judge Swift, was “whether petitioners’ horse breeding activity constituted an activity carried on for profit under section 183.”[vii] The court relied upon Section 1.183-2(b) of the Income Tax Regulations, which sets forth a nonexclusive list of nine factors that are to be considered when deciding whether an activity has an “actual and honest profit objective.”[viii] The nine factors considered in the case include: 1) Manner in Which the Activity Is Carried On; 2) Expertise of the Taxpayer; 3) Time and Effort Expended in Carrying On the Activity; 4) Expectation That the Horses May Appreciate in Value; 5) Success in Other Activities; 6) History of Income or Losses; 7) Amount of Occasional Profits; 8) Financial Status; and 9) Elements of Personal Pleasure.[ix]
In Blackwell, the court, after examining all nine factors, held that the “petitioners’ motive, efforts, and investment in carrying on their FHF horse activity during the years in issue” was indicative of a “profit objective.”[x] The court’s holding centered around such facts as the petitioners’ substantial preparation and education associated with entering the horse business, the considerable amount of time and energy invested in the horse activity, and their dedication to proper business planning and book keeping procedures related to their horse activity.[xi] While the outcome in Blackwell was a positive one for Mark and Patti Blackwell, horse owners this tax season must still be mindful of the nine factor checklist set out in 1.183-2(b) of the Income Tax Regulations and examined in Blackwell v. Comm’r. to properly deduct expenses relating to their horse activity.
_________________
[i] 26 I.R.C. § 183(a) (2014).
[ii] See id. § 183(b).
[iii] Peter Reilly, Horse Breeders Win in Tax Court, Forbes (Aug. 13, 2011), http://www.forbes.com/sites/peterjreilly/2011/08/13/horse-breeders-win-in-tax-court/.
[iv] See 26 I.R.C. § 183(a)-(b) (2014).
[v] See generally Blackwell v. Comm’r., No. 29287-09, T.C. Memo. 2011-188 (2011).
[vi] See id. at *6.
[vii] Id. at *1.
[viii] Id. (citing Dreicer v. Comm’r, 78 T.C. 642, 645 (1982)).
[ix] See id. at *6-*8.
[x] Id. at *8.
[xi] See id. at *6-*8.
[i] 26 I.R.C. § 183(a) (2014).
[ii] See id. § 183(b).
[iii] Peter Reilly, Horse Breeders Win in Tax Court, Forbes (Aug. 13, 2011), http://www.forbes.com/sites/peterjreilly/2011/08/13/horse-breeders-win-in-tax-court/.
[iv] See 26 I.R.C. § 183(a)-(b) (2014).
[v] See generally Blackwell v. Comm’r., No. 29287-09, T.C. Memo. 2011-188 (2011).
[vi] See id. at *6.
[vii] Id. at *1.
[viii] Id. (citing Dreicer v. Comm’r, 78 T.C. 642, 645 (1982)).
[ix] See id. at *6-*8.
[x] Id. at *8.
[xi] See id. at *6-*8.
Defend the Michigan Natural Resources Trust Fund
The Attorney General for the State of Michigan is Bill Schuette and he has been a staunch upholder of the Michigan Constitution.[i] Recently, he spoke about the need to preserve the Michigan Natural Resources Trust Fund (MNRTF) for its intended purpose.[ii] In 1984, the MNRTF began by an amendment to the Michigan Constitution.[iii] The MNRTF “is used to develop public recreation lands and is supported by oil, gas, and other mineral lease and royalty payments.” [iv] Thus, “the trust fund is constitutionally restricted for natural resources improvements and land acquisitions across the state.”[v] Since Michigan passed a constitutional amendment, legislators should not be allowed to reallocate money from the Trust Fund for their own “programs or projects.”[vi] Recent economic troubles in Michigan have led to a desire by lawmakers for the money to go elsewhere despite the constitutional implications involved.[vii] Attorney General Schutte has been clear in his directive through an “official opinion” that the Michigan legislature cannot do that.[viii] Schuette should continue to defend the MNRTF and ensure that the legislature allocates money from the fund properly.
Michigan has some of the most scenic parks and tourist areas in the country, and these areas need the MNRTF funds for both preservation and revitalization.[ix] “The Michigan Senate recently approved legislation allocating $27.6 million from the Natural Resources Trust Fund for 76 projects across the state, including upgrades to Midland’s Emerson Park area along the Pere Marquette Rail-Trail.”[x] It is in the best interest of Michigan residents that the state continues to attract visitors to enjoy the natural beauty of its natural resources. Tourists visiting Michigan from other states will inevitably spend money in the state, which will therefore lessen the state’s financial woes.[xi] Schuette should remain steadfast in protecting the MNRTF to preserve the state’s vast natural resources and defend the Michigan Constitution like he has done with so many other constitutional issues.[xii]
_________________
[i] Ilsa Matthes, Attorney General on Tour of U.P., Escanaba Daily Press (Mar. 28, 2014), http://www.dailypress.net/page/content.detail/id/546803/Attorney-general-on-tour-of-U-P-.html.
[ii] Id.
[iii] Id.
[iv] Id.
[v] Natural Resources Trust Fund Plan Passed by Senate Supports Local Park Improvements, Midland Daily News (Mar. 30, 2014), http://www.ourmidland.com/news/natural-resources-trust-fund-plan-passed-by-senate-supports-local/article_8048c60b-1c77-59bc-8488-56c0ff3c2365.html.
[vi] Matthes, supra note 1.
[vii] Id.
[viii] Id.
[ix] Natural, supra note 4.
[x] Id.
[xi] Matthes, supra note 1.
[xii] Id.