U.S. Senator Tim Johnson, D-S.D., and U.S. Senator Mike Crapo, R-Idaho, Thursday continued their efforts to end the shortfall of veterinarians in rural areas by reintroducing the Veterinary Medicine Loan Repayment Program Enhancement Act.
The Senators say this bipartisan bill would help meet the growing demand for veterinarians nationwide by eliminating taxes on programs that encourage veterinarians to practice in underserved areas.
This legislation would provide a federal income tax exemption for payments received under the Veterinary Medicine Loan Repayment Program and similar state programs that encourage veterinarians to practice in smaller and rural communities. The VMLRP law makes the federal government responsible for paying taxes on the income to the veterinarian.
Rather than awarding full funding for this program each year, the VMLRP must immediately give back 39% of the money it receives to the U.S. Treasury as a federal tax. The Johnson-Crapo bill simply removes this tax burden so that more veterinarians can be selected and help rural America. This bill would make VMLRP money tax exempt and allow the program to increase the number of veterinarians selected by one third.
"The shortage of veterinarians in our rural communities has a huge impact on our farmers and ranchers whose livelihoods depend on access to animal care," Johnson said. "The Veterinary Medicine Loan Repayment Program is a critical tool to expanding access to veterinary care. Our legislation has the potential to increase the number of veterinarians placed in underserved and shortage areas by more than 30%."
Congress has taken similar action in the past. In 2004, Congress passed the "American Jobs Creation Act of 2004," which exempted award payments under the National Health Service Corps from federal taxes. The NHSC is a similar federal loan repayment program with the intention of increasing medical care in underserved areas.
"The shortage of veterinarians in the U.S. is acute," Crapo said. "Veterinarian shortages raise health and safety issues. This legislation will help alleviate the shortage of veterinarians and maximize the program through addressing the tax treatment of program assistance."
The bill is supported by the American Veterinary Medical Association, National Council of Farmer Cooperatives, National Farmers Union and the American Farm Bureau Federation.