CBO Issues Cost Estimate On S. 1406
Tuesday, May 13, 2014

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The Congressional Budget Office recently completed its cost estimate on S. 1406, the PAST Act introduced by Senator Kelly Ayotte (R-NH).  In the report, the CBO estimated the annual cost at $1 million.  The report points out that the inspectors that would be overseen, licensed, trained and assigned by USDA as part of the PAST Act would not be USDA employees and would be paid for by private show management.

The report did not state how much the USDA would charge private show management to hire those licensed inspectors but did point out show management would be fined if they did not pay those inspectors.  The CBO also reported that currently APHIS is spending approximately $700,000 for HPA enforcement.  The basis for the cost estimate was on information provided by APHIS.

The report did not estimate the additional cost on the federal government for prosecution of those violations of the HPA that are currently adjudicated by the private Horse Industry Organizations (HIOs).  Currently the USDA prosecutes less than 2% of the alleged violations of the HPA found by USDA licensed inspectors at horse shows.  HIOs are required to prosecute 100% of the alleged violations found by their inspectors per the HPA and Regulations. 

Current HIO inspectors are licensed and trained by the USDA.  Under the PAST Act, the HIOs are abolished but inspectors are kept and licensed and trained by the USDA, however not becoming USDA employees. 

View the complete CBO report below or Click Here to view a PDF of the report.

S. 1406 would amend the Horse Protection Act of 1970 (HPA) to strengthen and expand
enforcement of current prohibitions on soring horses. Soring refers to the practice of
applying a substance or device to a horse’s limb to cause the horse pain when moving.
Although prohibited, the practice helps to achieve the high stepping gait desired for
Tennessee Walking Horses and other similar breeds. Under current law, inspectors from
the U.S. Department of Agriculture (USDA) are sent to some large horse shows, but the
private managers of each event where such horses compete usually hire their own
inspectors to detect soring and other violations of the HPA.

S. 1406 would require USDA to license, train, assign, and oversee private inspectors
qualified to independently detect and diagnose a horse that has been subjected to soring
and to inspect horses at horse shows, exhibitions, sales, or auctions, for purposes of
enforcing HPA regulations. Those independent inspectors would not be USDA employees
and would continue to be paid by the private managers of each event. The bill also would
prohibit the use of any device placed on a horse’s limb to artificially alter its gait (known as
an action device). In addition, S. 1406 would increase maximum fines and prison terms for
each violation of HPA. Upon any third or subsequent violation, the Secretary of
Agriculture could permanently disqualify a person from having any part in future horse
shows, exhibitions, sales, or auctions. Finally, the bill would impose a fine on event
managers who refuse to pay the USDA licensed horse inspectors.

Based on information from the Animal and Plant Health Inspection Service (APHIS), CBO
estimates that implementing S. 1406 would cost about $1 million per year over the
2015-2019 period, assuming appropriation of the necessary amounts, for licensing,
training, assigning, and monitoring independent inspectors. In 2014, APHIS spent about
$700,000 for HPA enforcement.

Enacting S. 1406 would not affect direct spending. The bill could increase revenues from
penalties; therefore, pay-as-you-go procedures apply. However, CBO estimates that any
additional revenues from those penalties would probably be negligible.
S. 1406 contains no intergovernmental mandates as defined in the Unfunded Mandates
Reform Act (UMRA).

The bill would impose a private-sector mandate, as defined in UMRA, on some owners of
horses by expanding the prohibition on soring horses. The cost of the mandate would be the
net income forgone because of that expansion. Based on information from USDA reports
and industry sources, CBO estimates that the cost of the mandate would fall below the
annual threshold established in UMRA ($152 million in 2014, adjusted annually for
inflation).

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