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NTRA Provides Updates on Industry Issues

An NTRA legislative briefing held Thursday, Aug. 10 at Fasig-Tipton Sales Paddocks provided updates on a diverse range of topics impacting Thoroughbred breeding, racing, and handicapping.

NTRA President and CEO Alex Waldrop and Greg Means, principal and CFO at The Alpine Group, which represents the NTRA and the industry’s lobbying interests in Washington, D.C., provided updates on a range of topics, including:

Federal Withholding & Reporting – Long-sought Treasury and IRS regulations that modernize federal withholding and reporting of pari-mutuel winnings have resulted in a 90-95% reduction in the filing of IRS Form W-2Gs. The changes have led to a drastic reduction in the reporting and withholding of winning wagers, which in turn has helped fuel handle increases. During the first six months of 2018, overall handle increased 5.5%. Average handle per race day in 2018 has increased 8.7% through June (vs. a 3.7% gain in all of 2017). Overall, U.S. pari-mutuel handle in 2018 is on course to exceed $11 billion for the first time since 2010.

Tax Reform – The Tax Cuts and Jobs Act that became law in December 2017 contains a number of incentives that promote investment in Thoroughbred breeding and racing. Among the many positive changes included in the bill were:

•    An increase in immediate expensing to 100% and expansion of the definition of “new property.” Buyers would be able to write off 100% of all horses purchased, including breeding stock, as long as the asset purchased has not been previously owned by the purchaser.

•    An increase in the Section 179 limit to $1 million from $500,000, and an increase in the cost of property subject to the phase-out to $2.5 million from $2 million, which would be beneficial to industry participants that generate net taxable income.

•    Inclusion of a new 20% deduction for certain pass-through business income. Owners of businesses such as sole proprietorships, partnerships, trusts and S corporations now may be able to deduct 20% of their qualified business income when filing their tax returns. Qualified business income includes domestic income from a trade or business but does not include employee income, capital gains, interest and dividend income. Additionally, business owners can combine their businesses into a single unit to claim the benefit, thereby making the process of filing more efficient and less costly.

Waldrop stressed the importance of each taxpayer consulting with his or her tax advisors to assess how the bill will specifically affect their operations.

Sports Betting – The Monmouth Park/New Jersey Thoroughbred Horsemen’s Association Supreme Court victory put horseracing at the epicenter of sports betting. It also extends the industry’s reach from online wagering under the Interstate Horseracing Act–space it has occupied since 2000–into a vast new area of the American gaming market, where sports betting is estimated to be a $400 billion business. While the primary activity since the Supreme Court decision has been at the state level, Means noted that the major sports leagues, in particular, are already advocating on Capitol Hill for a uniform federal bill aimed at consumer protections, among other issues. Means projected that it is unlikely that Congress will consider any legislation on this topic this year. However, the issue will likely arise in more force in 2019. Both Means and Waldrop noted that Thoroughbred racing must be aggressive in defending its interests relating to Sports Betting and be ready to take advantage of new opportunities on Capitol Hill should they arise.

Credit Card Transactions Involving Advance Deposit Wagering (And, Potentially, Sports Betting) – While many banks permit Visa and MasterCard credit cards to be used in funding an Advance Deposit Wagering (ADW) account, up until this year four of the largest banks that are significant card issuers have refused to allow this legal use. In January, JP Morgan Chase, the nation’s largest issuer of credit cards, began allowing this activity and the NTRA continues to work with the three other large banks to secure a reversal of their exclusions.

The same challenges to ADW wagering may affect those who seek to fund sports betting accounts via credit card, meaning that those in our industry who offer ADW and sports betting will have multiple banking issues.
On the same front, ADW wagering is being blocked by search engines such as Google that do not readily turn up direct links to horseracing betting sites, but simply link to informational stories about wagering or horse races. The advent of sports betting will change this landscape rapidly, again posing potential threats–and opportunities–for the Thoroughbred industry.

Immigration – There is strong disagreement on Capitol Hill over Immigration policy. Efforts earlier this summer to pass immigration bills failed and it is unlikely that Congress will take any major action on Immigration prior to the November elections. Thoroughbred trainers continue to face major labor shortages due to a lack of H-2B visas available to backstretch employees. While comprehensive immigration reform will be necessary if Thoroughbred racing is to receive the relief it needs from the current guest worker program, Waldrop and Means acknowledged that such reform is not likely to occur in the near term due to the current political environment in Washington.

House Appropriators Score Win for Horse Industry, Advance H-2B Visa Cap Relief!

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July 26, 2018

House Appropriators Score Win for Horse Industry, Advance H-2B Visa Cap Relief!

On July 25, the House Appropriations Committee convened a mark-up for the Fiscal Year (FY) 2019 Appropriations for the Department of Homeland Security (DHS).  By voice vote, the committee approved an amendment that exempts returning workers from the 66,000 statutory cap imposed on the H-2B guest worker visa program, providing much needed H-2B visa cap relief advocated by the horse industry and its allies.  The amendment, offered by Congressional Horse Caucus Members Rep. Andy Harris, MD (R-MD) and Rep. Dutch Ruppersberger (D-MD), among others, applies to workers who have received guest worker visas during the previous two years.  Additionally, the provision also establishes a visa allocation system that disburses work permits on a quarterly basis.  Lawmakers believe that the quarterly system will create more flexibility for employers whose labor demands do not align with the semi-annual allocation system, whereby DHS awards permits on April 1 and October 1.  The horse industry and its allies in the H-2B Coalition fight for a variety of flexibility measures, including a straight-forward increase in the visa cap, or generous exemptions from the statutory cap, such as those for returning workers.

Pointing to another flexibility measure, Rep. Harris (R-MD) released a statement explaining the importance of a provision that allocates visas on a “proportional” rather than a “winner take all” basis.  Under this provision, DHS would award a portion of all timely, requested visas to all applicants, even in the event that “the higher limits authorized by [the] amendment are not enough to satisfy all the needs in a given year.”  To view a copy of Rep. Harris’s statement, please click here:  https://harris.house.gov/media/press-releases/house-appropriations-committee-approves-harris-language-repairing-h-2b-visa.

While the House spending bill advances the goal of effectively raising the H-2B visa cap, the Senate version of the bill doesn’t address the H-2B visa issue, setting up an item to be negotiated during a House and Senate conference.  Although lawmakers intend to finalize their spending measures before the current FY ends on September 30, this is a deadline that Congress rarely meets.   As in years past, Congress may pass a series of “continuing resolutions” to fund the federal government.  AHC will keep you posted on developments related to the H-2B measure as the FY2019 appropriations process moves forward.  To view a copy of the three-page amendment, please click here:  http://www.horsecouncil.org/wpcontent/uploads/2018/07/HARRMD_037_xml-offered-2-1.pdf.

If you’d like more information related to the guest worker issue, including ongoing grassroots outreach from the horse industry, please contact Bryan Brendle at bbrendle@horsecouncil.org or 202-296-4031.

View Article on AHC Website

DHS Authorizes Additional 15,000 H-2B VIsas for FY2018

Considerations for filing an H-2B petition per the new regulation.

 

Following several weeks of tense discussions between Congress and the Trump administration, the Department of Homeland Security published a final rule May 31 in the Federal Register authorizing issuance of 15,000 additional H-2B visas for the remainder of fiscal year 2018.

As reported this spring, Congress authorized the DHS to raise its cap on H-2B temporary worker visas from the current cap of 66,000 to 129,500 visas for FY2018 within the context of the omnibus appropriations law passed in late March. DHS states that by issuing 15,000 extra H-2B visas—significantly below the additional 63,500 authorized by the FY2018 omnibus—the agency will prioritize employers who demonstrate that they would suffer “irreparable harm” to their business unless they are able to hire additional seasonal workers during the summer and fall 2018 seasons. DHS further states that it seeks to avoid possible abuse of the H-2B program by limiting the pool of extra visas to 15,000.

According to the rule, DHS punted the broader temporary worker shortage issue to Congress, urging lawmakers to reform the Immigration and Nationality Act, which establishes the H-2B visa program. During the course of the extended back-and-forth discussions between the legislative and executive branches this spring, DHS claims that only congressional action can provide long-term certainty with respect to the issuance of more guest worker visas. According to federal regulators, addressing worker shortages through the annual appropriations process fails to create certainty, undercutting the ability of the business community to plan long-term.

Since moving forward with a limited cap increase, DHS’s United States Citizenship and Immigration Service has outlined some practical considerations for filing an H-2B petition per the new regulation:

  • An employer “must meet all existing H-2B eligibility requirements,” which includes receipt of “an approved Temporary Labor Certification from the Department of Labor that is valid for the entire employment period stated on the petition.” DHS reminds employers that “the employment start date on the petition must match the employment start date on the TLC, even if that date has passed.”
  • Employers must also “conduct a fresh round of recruitment for U.S. workers if the TLC contains a start date of work before April 15, 2018.”
  • A business must “submit an attestation on Form ETA 9142-B-CAA-2 in which the petitioner affirms, under penalty of perjury, its business will likely suffer irreparable harm if it cannot hire all the requested H-2B workers before the end of the fiscal year.” The agency provides Form ETA 9142-B-CAA-2 Instructions to properly complete the attestation.
  • DHS further states that it “will not accept” an “expired ETA 9142-B-CAA from fiscal year 2017.”  The agency will reject any “petition that does not include the new ETA 9142-B-CAA-2 attestation form for fiscal year 2018.”

Recognizing the time constraints associated with the application process, DHS states that it will “adjudicate” applications within 15 calendar days for employers opting for “premium processing,” and 30 days for standard applications. To learn more about how to fast-track an H-2B visa application, please go to: https://www.uscis.gov/forms/how-do-i-use-premium-processing-service.

The unprecedented demand for guest worker visas this year will create a narrow time frame in which to submit an application.

As details unfold related to practical considerations associated with the new rule, American Horse Council will continue to inform members about developments and helpful notes for members who are considering moving forward with summer applications.

As a reminder, AHC will be conducting a panel discussion featuring congressional and industry experts June 12 in Washington as part of the association’s annual meeting. To view a copy of the final rule, go to: https://www.gpo.gov/fdsys/pkg/FR-2018-05-31/pdf/2018-11732.pdf.

Homeland Security Announces 15,000 Additional H-2B Visas For 2018

Saturday, Secretary of Homeland Security Kirstjen M. Nielsen announced that an additional 15,000 H-2B temporary nonagricultural worker visas will be available for Fiscal Year 2018. In this determination, Secretary Nielsen determined there are not sufficient, qualified, U.S. workers available to perform temporary non-agriculture labor to satisfy the needs of American businesses in FY18. This allocation is in addition to the 66,000 visas already issued this year. Secretary Nielsen made this decision after consulting with Secretary of Labor Alexander Acosta, members of Congress, and business owners.

“The limitations on H-2B visas were originally meant to protect American workers, but when we enter a situation where the program unintentionally harms American businesses it needs to be reformed,” said Secretary Nielsen. “I call on Congress to pass much needed reforms of the program and to expressly set the number of H-2B visas in statute.  We are once again in a situation where Congress has passed the buck and turned a decision over to DHS that would be better situated with Congress, who knows the needs of the program.  As Secretary, I remain committed to protecting U.S. workers and strengthening the integrity of our lawful immigration system and look forward to working with Congress to do so.”

The H-2B temporary nonagricultural worker program was designed to serve U.S. businesses unable to find a sufficient number of qualified U.S. workers to perform nonagricultural work of a temporary nature. Congress set the annual H-2B visa cap at 66,000. A maximum of 33,000 H-2B visas are available during the first half of the fiscal year, and the remainder, including any unused H-2B visas from the first half of that fiscal year, is available starting April 1 through September 30.

On February 27, 2018, USCIS determined that it had received sufficient H-2B petitions to meet the full FY 2018 statutory cap of 66,000.

In the FY 2018 Omnibus, Congress delegated its authority to the Secretary to increase the number of temporary nonagricultural worker visas available to U.S. employers through September 30, just as it did in the FY 2017 Omnibus. In the intervening time since enactment of the FY 2018 Omnibus, the Secretary consulted with the Secretary of Labor on the issue, in accordance with Congressional requirements, and developed this rule.

Starting this week, eligible petitioners for H-2B visas can file Form I-129, Petition for a Nonimmigrant Worker.  Eligible petitioners must submit a supplemental attestation on Form ETA 9142-B-CAA-2 with their petition.

Details on eligibility and filing requirements will be available in the final temporary rule and on the Increase in H-2B Nonimmigrant Visas for FY 2018 webpage to be published on uscis.gov when the final temporary rule is posted for public inspection.

DHS is committed to ensuring that our immigration system is implemented lawfully and that American workers are protected. If members of the public have information that a participating employer may be abusing this program, DHS invites them to submit information to ReportH2BAbuse@uscis.dhs.gov and include information identifying the H-2B petitioning employer and relevant information that leads them to believe that the H-2B petitioning employer is abusing the H-2B program.

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