Considering carbon farming? Take time to understand carbon agreements

“Carbon farming” is a term that came and went about a decade ago, but it’s back and gaining traction.  Ohio farmers now have opportunities to engage in the carbon farming market and receive payments for generating “carbon credits” through farming practices that reduce carbon emissions or capture atmospheric carbon.   As with any emerging market, there are many uncertainties about the carbon market that require a cautious approach.  And as we’d expect, there are legal issues that arise with carbon farming.

Some of those legal issues center on carbon agreements–the legal instruments that document the terms of a carbon farming relationship.  Each carbon market program has its own carbon agreement, so the terms of those agreements vary from program to program.  Even so, understanding the basics of this unique legal agreement is a necessity. 

Here’s what we know at this point about carbon agreements and the legal issues they may raise.

New terminology.  Carbon markets and carbon agreements speak a new language, containing many terms we don’t ordinarily use in the agricultural arena.  The terms are not fully standardized, and their meanings may differ from one program to another.  Understanding these new terms and their legal significance to the carbon agreement relationship is important.  Common terms to know are below but check each program to clarify its definitions for these terms.

  • Carbon practices.  Farming practices that have the potential to reduce carbon emissions or sequester carbon.
  • Carbon sequestration.  The process of capturing and storing atmospheric carbon.
  • Carbon credit.  A measurable, quantifiable unit representing a reduction of carbon dioxide emissions that can be transferred from one entity to another.  A credit typically represents one metric ton of “carbon dioxide equivalent, which is a metric that standardizes the global warming potential of all greenhouse gases by converting methane, nitrous oxide and fluorinated gases to the equivalent global warming potential of carbon dioxide.
  • Carbon offset.  Using a carbon credit generated by another entity to offset the emissions of an entity that emits carbon elsewhere.
  • Carbon inset.  A reduction of carbon within a specific supply chain that emits carbon, accomplished by adopting practices within that supply chain.
  • Carbon registry.  An entity that oversees the registration and verification of carbon credits and offsets.
  • Verification.  The process of confirming carbon reduction benefits, typically performed by a third-party that reviews the carbon practices and the accounting of carbon credits generated by the practices.
  • Additionality.  Carbon reduction that results from carbon practices incentivized by the carbon agreement and that would not have occurred in the absence of the incentive.
  • Permanence.  The longevity of a carbon reduction, which may be enhanced by arequirement that carbon practices remain in place over a long period of time and steps are taken to reduce the risk of reversal of the carbon reduction.
  • Reversal risk.  Risk that a carbon reduction will be reversed by future actions such as changing tillage or harvesting the trees or vegetation planted to generate the carbon reduction.

Initial eligibility criteriaEach carbon program has specific requirements for participating in the program.  Two common eligibility criteria are:

  • Location.  The program may be open only to farmers in a particular geographic location, such as within a specified watershed, region, or state.
  • Acreage.  A minimum acreage requirement often exists, although that can vary from 10 acres to 1,000 or more acres.  Some projects may allow adjacent landowners to aggregate to meet the minimum acreage requirement, but that can raise questions of ineligibility should one landowner leave the program.
  • Land control.  If the farmer doesn’t own the land on which carbon practices will occur, an initial requirement may be to offer proof that the farmer will have legal control over the land for the period of the agreement, such as a written lease agreement or certification by the tenant farmer.

Payment.  While the goal of a carbon agreement is often to generate carbon credits to be traded in the carbon market, there are varied ways of paying a farmer for adopting the practices that create those credits.  One is a per-acre payment for the practices adopted, with the payment amount tied to the reduction of carbon resulting from the adopted practices.   Another approach incorporates the carbon market—a guaranteed payment that can increase according to market conditions.  Concerns about market transparency abound here.  Yet another method is to calculate the payment after verification and quantification by a third-party.  For each of these different approaches, the amount could be based upon a model, actual soil sampling, or a combination of the two.  Payments may be annual or every several years.  Another consideration is the form of payment, which could be cash, company credits, or “cryptocurrency”—digital money that can be used for certain purposes.  Also be aware that some carbon agreements prohibit “payment stacking,” or receiving payments for the same carbon practices from multiple private or public sources.

Acceptable carbon practices.   Carbon practices are the foundation for generating carbon credits.  An agreement might outline acceptable carbon practices a farmer must adopt as the basis for the carbon credit, such as NRCS Conservation Practices.  Alternatively, an agreement might allow flexibility in determining which carbon practices to use or could state practices that are not acceptable.  Typical carbon practices include planting cover crops, using no-till or reduced tillage practices, changing fertilizer use, rotating or diversifying crops, planting trees, and retiring land from production. 

Additionality.  Many agreements require “additionality,” which means there must be new or “additional” carbon reductions that occur because of the carbon agreement, which would not have occurred in the absence of the agreement.  On the other hand, some agreements accept past carbon practices up to a certain period of time, such as within the past two years.  This is a tricky term to navigate for farmers who have engaged in acceptable practices in the past.  An agreement may address whether those practices count toward the generation of a carbon credit or for payment purposes.

Time periods.  Two time periods might exist in an agreement.  The first is the required length of time for participation in the program, which may vary from one year to ten or more years.  The second relates to the concept of “permanence,” or long-term carbon reductions.  To ensure permanence and reduce the risk that gains in one year could be lost by changes in the next year, the agreement may require continuation of the carbon practices for a certain time period after the agreement ends, such as five or ten years.

Verification and certification.  Here’s an important question—how do we know whether the carbon practices do generate carbon reductions that translate into actual carbon credits?  Verification and certification help provide an answer.  But verification is a testy topic because there is uncertainty about how to identify and measure carbon reductions resulting from different practices on different soils in different settings.   Predictions that are based upon models are common, but there is disagreement over appropriate and accurate methodology for the models.   Some programs may also verify practices with data acquisition and on-the-ground monitoring activities and soil tests.  And it’s common to require that an independent third party verify and certify the practices and carbon credits, raising additional questions of which verifiers are acceptable.  A final concern:  who pays the costs of verification and certification?

Data rights and ownership.  The verification question naturally leads us to a host of data questions.  Data is critical to understanding and verifying carbon practices, and every agreement should include data sharing and ownership provisions.  What data must be shared, who has access to the data, how will data be used, and who owns the data are questions in need of clear answers in the agreement.

Legal remedies.  There’s always the risk that a contract will go bad in some way, whether due to non-performance, non-payment, or disputes about performance and payment.  A carbon agreement could include provisions that outline how the parties will remedy these problems.  An agreement might define circumstances that constitute a breach and the actions one party may take if breach conditions occur.  An agreement could also list reasons for withholding payment from a farmer; one concern is that insufficient data or proof of carbon reductions or carbon credit generation could be a basis for withholding payment.  There could also be penalties for early withdrawal from the program or early termination of the agreement.   It’s important to decipher any legal remedies that are contained within a carbon agreement.

We’ve heard of carbon farming before, but today it raises new uncertainties.  Caution and careful consideration of a carbon agreement should address some of those uncertainties.  Our list offers a starting point, but it’s not yet a complete list.  As we learn more about the developing carbon farming market, we’ll continue to raise and hopefully resolve the legal issues it can present.

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Ohio New and Small Farm Colleges Set for 2021

“Bringing small farms in Ohio to life” is the theme of the 2021 New and Small Farm College program.  The program focuses on the increasing number of new and small farm landowners that have a need for comprehensive farm ownership and management programming.  OSU Extension has offered the college to farm families since 2005. Its mission  is to enhance understanding of production practices, the economics of land use choices, legal issues, marketing alternatives, and sources of assistance. Since the program began, the New and Small Farm College has reached over 1175 participants from 57 Ohio Counties representing almost 900 farms, sharing its three educational objectives:

  1. Improve the economic development of small familly owned farms in Ohio.
  2. Help small farm landowners and families diversify their opportunities into successful new enterprises and new markets.
  3. Improve agricultural literacy among small farm landowners not actively involved in agricultural production.

If you are a small farm landowner wondering what to do with your acreage, ask yourself these questions:

  • Are you interested in exploring options for land uses but not sure where to turn or how to begin?
  • Have you considered adding an agricultural or horticultural enterprise, but you just aren’t sure of what is required, from an equipment, labor, and/or a management perspective?
  • Are you looking for someplace to get some basic farm information? 

If you or someone you know answered yes to any of these questions, then the Ohio State University New and Small Farm College program may be just what you are looking for.  Consider how these topics that we cover in the college can help you with your small farm goals:

  • Getting Started (goal setting, family matters, resource inventory, business planning)
  • Appropriate Land Use -Walking the Farm
  • Where to Get Assistance, (identifying various agencies, organizations, and groups)
  • Financial and Business Mgmt.: Strategies for decision makers
  • Farm Insurance
  • Soils
  • Legal Issues
  • Marketing Alternatives

The Ohio State University New and Small Farm College is held one night a week for seven weeks.  The 2021 Ohio New and Small Farm College program occur in three locations across the state: 

  • Pike County area, to be held at theOSU South Centers facility, 1864 Shyville Road, Piketon, Ohio 45661, (Located off US 32 – Appalachian Hwy). Classes will be held on Wednesday evenings beginning August 18 and concluding September 29, 2021. For more information contact Pike County Extension Office at 740-289-4837.
  • Fayette county area, Fayette County Extension Office, 1415 US Route 22 SW, Washington Court House, Ohio 43160. Classes will be held on Thursday evenings beginning August 19 and concluding on September 30, 2021. For more information contact the Fayette County Extension Office at 740-335-1150.
  • Wayne County area, to be held at the OSU Wooster Campus, The Shisler Conference Center, 1680 Madison Avenue, Wooster, Ohio 44961. Classes will be held on Tuesday evenings beginning August 31 and concluding October 12, 2021. For more information, contact Wayne County Extension at 330-264-8722.

All colleges begin at 6:00 pm with a light dinner followed by presentations at 6:30 pm and concluding at 9:00 pm.

In addition to the classroom instruction, participants will receive tickets to attend the 2021 Farm Science Review (www.fsr.osu.edu ), September 21, 22, & 23 Located at the Molly Caren Farm, London, Ohio. A soil sample analysis will also be provided to each participating farm.

The cost of the course is $125 per person, $100 for an additional family member.  Each participating family will receive a small farm college notebook full of the information presented in each class session plus additional materials.

Registrations are now being accepted. For more details about the course and a registration form, contact Tony Nye, Small Farm Program Coordinator 937-382-0901 or email at nye.1@osu.edu.

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The Ag Law Harvest

By: Jeffrey K. Lewis, Attorney and Research Specialist, Ohio State University Agricultural & Resource Law 

Did you know that Giant Panda Cubs can be as small as a stick of butter?  A panda mother is approximately 900 times bigger than her newborn cub, which can weigh less than 5 ounces.  This is like an 8-pound human baby having a mother that weighed 7,200 pounds – this size difference may explain why so many panda cubs die from accidentally being crushed by their mothers.  However, not everything is doom and gloom for the Giant Panda.  Chinese officials have officially downgraded pandas from “endangered” to “vulnerable.”  Although the International Union for Conservation of Nature re-labelled, the Panda as “vulnerable” in 2016, China wanted to make sure that the population of its national treasure continued to grow before downgrading the panda’s classification.  

Although it seems as though pandas are thriving thanks to conservation efforts in China, not all animal species in China are so lucky.  This week’s Ag Law Harvest takes a trip around the world to bring you domestic and international agricultural and resource issues.  We take a look at court decisions, Congress’ latest actions, China’s struggle with African Swine Fever, and President Biden’s latest executive order. 

Iowa Supreme Court Dismisses Raccoon River Lawsuit.  Environmental organizations (“Plaintiffs”) filed a lawsuit against the state of Iowa and its agencies (“Defendants”) asking the court to compel Defendants to adopt legislation that would require Iowa farmers to implement practices that would help reduce the levels of nitrogen and phosphorus in Raccoon River.  The Plaintiffs argued that Defendants violated their duty under the Public Trust Doctrine (“PTD”), which is a legal doctrine that requires states to hold certain natural resources in trust for the benefit of the state’s citizens.  Defendants argued that Plaintiffs lacked standing to bring the lawsuit.  The Iowa Supreme Court agreed with Defendants and found that a ruling in Plaintiffs’ favor would not necessarily remediate Plaintiffs’ alleged injuries, and therefore the Plaintiffs lacked standing to bring the lawsuit.  The Iowa Supreme Court also found that Plaintiffs’ issue was a nonjusticiable political question.  The political question doctrine is a principle that helps prevent upsetting the balance of power between the branches of government.  Under the doctrine, courts will not decide certain issues because they are better suited to be decided by another branch of government.  In this case, the court reasoned that Plaintiffs’ issue was better suited to be resolved through the legislative branch of government, not the judicial branch.  The Iowa Supreme Court decision is significant because, as it stands, agricultural producers in the Raccoon River Watershed will not be required to adopt any new practices but the decision leaves it up to Iowa’s legislature to determine whether farmers should be required to adopt new practices under the PTD to help reduce nitrogen and phosphorus in Raccoon River.  

U.S. House of Representatives’ spending bill increases focuses on climate action and environmental protection.  Before the July 4th break, the United States House Appropriations Committee approved the first of its Fiscal Year 2022 (“FY22”) funding bills.  Included in these bills is the agriculture funding bill, which will be sent to the House floor for full consideration.  The bill provides $26.55 billion in the discretionary funding of agencies and programs within the USDA, FDA, the Commodity Futures Trading Commission, and the Farm Credit Administration – an increase of $2.851 billion from 2021.  In total, the agriculture funding bill includes $196.7 billion for both mandatory and discretionary programs.  The bill focuses on: (1) rural development and infrastructure – including rural broadband; (2) food and nutrition programs to help combat hunger and food insecurity; (3) international food assistance to promote U.S. agricultural exports; (4) conservation programs to help farmers, ranchers, and other landowners protect their land; (5) ag lending; (6) climate-related work to help research and remedy the climate crisis; and (7) enforcement of environmental programs.  The agriculture spending bill will, however, have to be reconciled with any spending bill produced by the U.S. Senate.  

U.S. House Agriculture Committee advances rural broadband bill.  The House Agriculture Committee (the “Committee”) unanimously voted to advance the Broadband Internet Connections for Rural America Act(the “Act”), which would authorize $4.5 billion in annual funding, starting in fiscal year 2022, for the Broadband ReConnect Program (the “Program”) through fiscal year 2029.  The existing Program is set to expire on June 30, 2022.  To demonstrate Congress’ commitment to expanding rural broadband, the Program was only given $742 million in 2021.  It is unclear whether the Act will be included in the infrastructure package that is currently being negotiated between Congress and the White House.  Under the Act, the USDA must give the highest priority to projects that seek to provide broadband service to unserved communities that do not have any residential broadband service with speeds of at least 10/1 Mbps.  The USDA will then prioritize communities with less than 10,000 permanent residents and areas with a high percentage of low-income families.

Small hog farmers in China no longer required to seek environmental approval.  China is the world’s largest pork producer and over the past few years, its hog herds have been decimated.  A deadly African Swine Fever (“ASF”) has wiped out about half of China’s hog herds, especially affecting small farmers.  According to Reuters, China relies heavily on small farmers for its pork output, but because of ASF, small farmers have been left with little to no product and mass amounts of debts.  Further, Chinese farmers are hesitant to rebuild their herds because ASF is an ongoing risk and farmers stand to lose everything if they continue to raise diseased hogs.  Addressing these concerns, China’s agriculture ministry will no longer require small hog farmers to get environmental approval from the government before breeding their hogs.  China hopes to reduce the costs and red tape for small farmers as China tries to incentivize small farmers to rebuild their hog herds.  African Swine Fever is a highly contagious and deadly viral disease affecting both domestic and feral swine.  The ASF poses no threat to human health but can decimate domestic hog populations.  Germany has recently reported its first two cases of ASF in domestic hogs.  Currently, ASF has not been found within the United States, and the USDA hopes to keep it that way.  To learn more about ASF, visit the USDA’s Animal and Plant Health Inspection Service website.  

President Biden signs executive order to reduce consolidation in agriculture.  President Biden’s recent Executive Order on Promoting Competition in the American Economy seeks to address inadequate competition within the U.S. economy that the administration believes holds back economic growth and innovation.  The Order includes more than 70 initiatives by more than a dozen federal agencies to promote competition.  With respect to agriculture, the Order seeks to break up agricultural markets “that have become more concentrated and less competitive.”  The Biden Administration believes that the markets for seeds, equipment, feed, and fertilizer are dominated by a few large companies which negatively impacts family farmers and ranchers.  The Biden Administration believes that the lack of competition increases the costs of inputs for family farmers all while decreasing the revenue a family farmer receives.  The Order directs the USDA to consider issuing new rules: (1) making it easier for farmers to bring and win lawsuits under the Packers and Stockyards Act; (2) prohibiting chicken processors from exploiting and underpaying chicken farmers; (3) adopting anti-retaliation protections for farmers who speak out about a company’s bad practices; and (4) defining when meat producers can promote and label their products as a “Product of the USA.”  The Order also requires the USDA to develop a plan to increase opportunities for small farmers to access markets and receive a fair return and encourages the Federal Trade Commission to limit when equipment companies can restrict farmers from repairing their own farm machinery.  Follow this link to learn more about President Biden’s recent Executive Order.

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Ohio legislation on the move

Following a flurry of activity before its break, the Ohio General Assembly can now enjoy a few lazy days of summer.  While the legislature spent much of its energy passing the state budget, it also moved several bills affecting agriculture.  Here’s the latest update on legislation that’s moving down at the capitol.

Enacted bills

Solar and wind facilities.  We wrote earlier about S.B. 52, the wind and solar facility siting bill the legislature passed in late June.  Despite pressure to veto the bill, Governor DeWine signed the legislation on July 12; its effective date is October 9, 2021.  The new law requires developers to hold a public meeting in a community at least 90 days prior to applying for project approval, allows counties to designate restricted areas where wind and solar projects may not locate, sets up a referendum process for county residents to have a voice in restricted area designations, adds two community officials to the project review process at the Power Siting Board, and establishes rules for decommissioning of projects, including performance bonds.

Natural gas services.  While communities will have a say in siting wind and solar facilities after S.B. 52’s passage, the opposite will be true for natural gas services.  H.B. 201 guarantees that persons have a right to obtain natural gas and propane services, subject to municipal home rule authority and regulatory oversight.  The bill prohibits political subdivisions from limiting or preventing gas and propane services within its boundaries.  Governor DeWine signed the bill on July 1 and it becomes effective on September 28, 2021.

State budget.  It took a good while, but the governor signed the state budget bill, H.B. 110, on June 30 and it took effect on July 1.  Highlights of agricultural provisions in the bill include:

  • H2Ohio.  Requires state agencies that prepare the already mandated annual report on the H2Ohio fund to present the report to the Senate and House finance committees each year.  ORC 126.60(D).
  • Ohio Proud.  Allows the Ohio Department of Agriculture (ODA) to sell merchandise that promotes the Ohio Proud program, and to use proceeds for the Ohio proud, international, and domestic market development fund.  ORC 901.171(B) and (C).
  • Liming inspections.  Allows the ODA director to enter into agreements with private parties for the inspection, sampling, and analysis of liming material and allows those parties to enter onto private and public land for inspections.  ORC 905.59.
  • OSU Extension.  Establishes a farm production, policy, and financial management institute in OSU Extension to address the integration of farm production practices, agricultural marketing, farm policy, and financial management challenges for farm owners and managers, lending agencies, ag teachers, and OSU professionals and provides the institute $250,000 each year for two years. ORC 3335.38.
  • Farmers market inspections.  Removes the option for a farmers market to register and be inspected as a farm market with ODA.  ORC 3717.221(A) and (B).
  • Wine taxes.  Makes the 2 cents per gallon wine tax revenue credited to the Ohio Grape Industries Fund permanent.  R.C. 4301.43.
  • Southern Ohio Agricultural and Community Development Foundation.  At the end of 2021, abolishes the foundation and its board, which was established in 1998 through the Tobacco Master Settlement Agreement with tobacco manufacturers.  Any remaining funds will transfer to the Ohio Proud Marketing Fund. 
  • H2Ohio.  Appropriates $49.3 million each year to the H2Ohio program for 2022 and 2023.
  • Farmland preservation.  Allocates $500,000 for the purchase of agricultural easements in 2022 and 2023.
  • Soil and water phosphorus program.  Allocates $10.7 million in 2022 and 2023 for programs to assist in reducing phosphorus in the Western Lake Erie Basin.
  • SWCDs in Western Lake Erie Basin.  Allocates $3.85 million to support Soil and Water Districts in the Western Lake Erie Basin in complying with former S.B. 1 and assisting with soil testing, nutrient management plan development, manure management technologies, filter strips and water management.

Bills on the move

Beginning farmers.  H.B. 95 finally passed the House on June 28, 2021—it was introduced in February and lagged in the last legislative session.  The proposal allows individuals to be certified as beginning farmers either through USDA or a certification program by ODA, Ohio State or Central State.  Certification criteria includes: farming in Ohio less than 10 years, having a net worth of less than $800,000, providing a majority of labor and management for the farm, demonstrating adequate knowledge of farming, submitting projected earning and profits, demonstrating that farming will be a significant source of income, and participation in an approved financial management program.  The bill would establish two income tax credits, one for owners who sell land and agricultural assets to certified beginning farmers and another for beginning farmers that attend a financial management program.  The bill now requires Senate approval.

Slow-moving vehiclesH.B. 30 had its first hearing before the Senate Transportation committee on June 23.  The proposal passed the House in April.  The bill aims to increase visibility of animal-drawn vehicles by changing marking and lighting requirements.  The vehicles would have to display either an SMV emblem or reflective micro prism tape rather than reflective tape on the rear, a flashing yellow lamp at the top and rear, in addition to current lighting requirements.

Earning statements.  A bill passed by the House on June 16 has been referred to the Senate Small Business and Economic Opportunity Committee.  H.B. 187 would require all employers to provide employee with a written or electronic statement of the employee’s earnings and deductions for each pay period, to include total hours worked and hourly rate, total gross wages, amounts and purposes of addition or deductions from wages, and total net wages.  The bill also establishes a request and violation reporting system for employers who fail to provide the statements. 

New bills

Moratorium on animal feeding facilities.  A bill introduced by two representatives from northwestern Ohio would affect new and expanding animal feeding facilities in the Maumee watershed.  H.B. 349 would not allow the Ohio Department of Agriculture to approve a permit for a new construction or expansion of a “regulated animal feeding facility” if it is in the Maumee watershed and the director of ODA has determined that the spring load of total phosphorus for the Maumee River exceeded 860 metric tons and total dissolved reactive phosphorus exceeded 186 metric tons in the preceding calendar year. Regulated animal feeding facilities are those housing over 250 dairy cattle; 300 beef cattle; 3,000 piglets; 750 hogs; 25,000 egg layers; 37,500 meat chickens; 9,000 egg layers and meat chickens if on liquid manure handling system; 16,500 turkeys; 3,000 sheep and 150 horses.  H.B. 349 was referred to the House Agriculture and Conservation committee on June 16, 2021.

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Tyler’s Law Impacting Ohio Fairs

By:Jeffrey K. Lewis, Attorney and Research Specialist, Ohio State University Agricultural & Resource Law

Fair season is in full swing, and after a year off, fair goers are eager to indulge in fair food, games, and rides.  Additionally, thanks to a new law, Ohio is hoping to make this the safest fair season yet.  This comes after the tragic death of Tyler Jarrell at the 2017 Ohio State Fair.  The 18-year-old fair goer passed away when the Fire Ball ride broke apart.  Tyler and seven others were injured in the accident, which was later blamed on excessive corrosion.  To help prevent another tragedy, Governor DeWine signed House Bill 189, also known as “Tyler’s Law” into action last November.  Tyler’s Law, which is enforced by the Ohio Department of Agriculture (“ODA”), strengthens Ohio’s existing laws on amusement rides, adds additional safety inspection standards, defines specific qualifications for ride inspectors, and outlines additional owner responsibilities.  

Tyler’s Legacy on Ohio’s Amusement Ride Laws

It may come as a surprise, but the ODA is not only responsible for safe food, meat, dairy, and protecting Ohio’s livestock, crops, and plants; it is also responsible for ensuring the safety and wellbeing of Ohioans and visitors from across the world when they visit Ohio’s fairs, festivals, and amusement parks.  Specifically, the ODA is responsible for ensuring that all amusement rides are safe for ride enthusiasts.  Below is a brief overview of Ohio’s current amusement ride laws and the ODA’s new requirements enacted by Tyler’s Law. 

Amusement Ride Permits.  Owners of amusement rides must apply for a yearly permit through the ODA.  The ODA will only issue a permit if the owner has submitted a completed application with inspection fees, provided proof of insurance, provided an itinerary of where the amusement ride will be operating, and proof that the ride has undergone and passed an initial inspection.  

Initial inspection, midseason inspection, and additional safety inspections.  Ohio law requires that all amusement rides complete an initial inspection and requires certain amusement rides to undergo a midseason inspection.  All inspections must be completed by authorized inspectors and the ODA may require additional safety inspections of any amusement ride throughout the year.  

Fatigue and Corrosion Review.  One of the key changes implemented by Tyler’s law is an owner’s obligation to complete a fatigue and corrosion review. These reviews are additional safety inspections to help prevent another tragedy like the one in 2017.  A ride owner’s obligations are determined by how their ride is categorized.  Ohio has categorized amusement rides as follows: 

  • “Low Intensity Rides” – includes all kiddie rides, carousels, go karts, and inflatable devises.  A kiddie ride is a ride that is primarily designed for children 48 inches and under. 
  • “Intermediate Rides” – all rides that are not Low Intensity Rides, Towers, or Rollercoasters. 
  • “Towers” – any amusement ride, other than a roller coaster, whose main body components reach a height of twenty feet or more. 
  • “Roller Coasters” – any ride licensed under Ohio law and whose main body components reach a height of fifty feet or more.  

Owners of any type of amusement ride must ensure that that their ride meets the manufacturer’s minimum requirements for inspection and testing.  If there are no manufacturer specifications, then an owner must ensure that the ride conforms to generally accepted engineering standards and practices. 

In addition to meeting a manufacturer’s specifications or accepted engineering standards, owners of Intermediate Rides, Towers, and Roller Coasters must also conduct a visual inspection of their ride looking for signs of fatigue and corrosion.  If fatigue or corrosion are found, the owner must discuss the findings with the ride’s manufacturer or a registered engineer and implement any suggested mitigation strategies.  Once an owner has completed their visual fatigue and corrosion review, the owner must document the findings and provide the ODA with a copy.  All documents must be maintained for the life of the ride and provided to any subsequent owner.  If an owner fails to implement and follow the suggested mitigation strategies, the ODA can immediately shut down the ride.   

As it stands, owners of Low Intensity Rides and Intermediate Rides are the only category of owners obligated to follow the new fatigue and corrosion review rules.  Owners of Towers will be required to follow the new rules starting in April of 2022 and Owners of Roller Coasters will have to comply starting in April of 2023. 

Records of storage and/or out state operation.  Tyler’s law also requires owners of portable amusement rides to provide documentation providing all locations and dates where the ride was stored for 30 days or more.  Additionally, an owner is required to provide documentation identifying all locations and dates where the ride was operated, if it was operated outside of Ohio.  

Ride Inspections. Ohio law also establishes the minimum number of times a ride must be inspected each year as well as the number of inspectors that must be at each inspection.  

Ride Category Number of Inspections Number of Inspectors for Initial InspectionNumber of Inspectors for Additional Inspections
Low Intensity 111
Intermediate 221
Towers222
Roller Coasters222

Maintenance requirements.  Owners are required to maintain maintenance, repair, pre-opening inspection, and any additional inspection records for each amusement ride.  An owner is required to keep these records for at least two years.  Owners must also provide checklists and training to any person who is to be performing ride maintenance throughout the ride’s operational cycle.  

Valid decals.  Owners of amusement rides are required to display a decal issued by the ODA representing that the owner and ride have complied with Ohio’s laws and are allowed to operate within the state.  If no decal appears, a ride should be prevented from operating until a valid permit is furnished by the owner.  

Rider Obligations.  Owners are not the only party with responsibilities when it comes to amusement rides.  Riders are prohibited from engaging in certain conduct that create an increased risk of danger for a rider and others around them.  A rider must: 

  • Heed all warnings and directions of an amusement ride; and
  • Not behave in any way that might cause injury or contribute to injuring self or other riders while occupying an amusement ride.

Conclusion. Although amusement parks like King’s Island and Cedar Point are already subject to some of the additional safety measures of Tyler’s Law, this will be the first fair season with the new regulations.  Fair has provided generations of Ohioans with fond memories, joy, and reasons to celebrate, and through Tyler’s legacy, Ohio seeks to take all the steps necessary to try and ensure that fair is nothing but a happy occasion for all. To learn more about Ohio’s laws regarding amusement rides visit the Ohio Revised Code and the Ohio Administrative Code.  

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Agriculture loses more cases than it wins in recent federal decisions

Perhaps it’s an overused phrase but “sometimes you win, sometimes you lose” has relevance to agriculture lately.  It’s a fitting response to several new decisions from the federal courts.  Some of the decisions align with positions advocated by agricultural interests but others do not.  We wrote last week about a case in the “sometimes you lose” category–the Court’s ruling in favor of small refineries claiming exemptions from renewable fuels mandates.  Several members of Congress have already proposed legislation that would nullify the Court’s decision in that case.  A second loss came with a challenge to California’s animal welfare standards and a third with the court striking down a waiver of E15 ethanol blends.  The sole win came with a challenge to a California statute allowing union organizing activities on private property.  Here’s a summary.

California Proposition 12 – North American Meat Institute v. Bonta

The U.S. Supreme Court announced that it would not grant certiorari and review a decision by the Ninth Circuit Court of Appeals’ on California Proposition 12.  Voters approved Proposition 12, the “Prevention of Cruelty to Farm Animals Act,” in 2018.  The Act establishes housing standards for egg-laying hens, breeding hogs and veal calves and prohibits the confinement of animals in spaces that don’t meet the standards.  Business owners and operators in California may not sell meat or egg products from animals that are not confined according to the standards.  Standards for calves (43 square feet) and egg laying hens (1 square foot) became effective in 2020 while standards for breeding pigs and their offspring (24 square feet) and cage-free provisions for egg laying hens are to be effective beginning January 1, 2022.

The North American Meat Institute (NAMI) sought a preliminary injunction against Proposition 12 in 2019, arguing that it violates the Interstate Commerce Clause of the U.S. Constitution, which grants only Congress the authority to regulate commerce among the states.  NAMI claimed that the Act establishes a “protectionist trade barrier” that would protect California producers from out-of-state competition and control conduct outside of its state borders. 

Both the federal District Court and the Ninth Circuit Court of Appeals disagreed with NAMI.   The appellate court affirmed the District Court’s conclusions that Proposition 12 is not discriminatory on its face and does not have a discriminatory purpose or effect, as there was no evidence that the state had a protectionist intent and the Act treats in-state and out-of-state producers the same.  Nor does the Act try to directly regulate out-of-state conduct or impose burdens on out-of-state producers, but instead only precludes sale of meats resulting from certain practices, the courts concluded.  The federal government and 20 states joined NAMI in a request for a rehearing of the case by the full panel of judges on the Ninth Circuit but were unsuccessful.

NAMI turned to the U.S. Supreme Court, seeking a review of the case on the basis that the Ninth Circuit’s decision conflicts with holdings by other appellate courts and the U.S. Supreme Court.  The Supreme Court denied the request for review on June 28, offering no explanation for its decision.  The legal challenges to Proposition 12 do not end with that denial, however.  A separate case filed by the National Pork Producers Association and American Farm Bureau Federation is pending before the Ninth Circuit Court of Appeals.  It also argues that Proposition 12 negatively impacts interstate commerce and will increase consumer costs for pork and that the federal district court judge who dismissed the case failed to examine the practical effects the law would have on producers.  The Ninth Circuit heard the appeal in April, so we may see a decision in the next few months.

E15 waiver:  American Fuel & Petrochemical Manufacturers v. EPA

The D.C. Circuit Court of Appeals held in favor of a claim by the American Fuel and Petrochemical Manufacturers (AFPM) challenging a Trump Administration rule in 2019 that waived restrictions on summer sales of E15 due to higher fuel volatility in summer temperatures.  The decision could mean that current sales of E15 must end unless further legal challenges follow.

The 2019 Reid Vapor Pressure (RVP) waiver for E15 allowed fuel stations to sell 15% ethanol blends during the summer months rather than limiting those sales to 10% ethanol, a move that would increase ethanol sales.   As expected, the oil and gas refining industry responded to the waiver issuance with a legal challenge, arguing that the administration lacked the authority to grant the RVP waiver for fuels over 10% ethanol. 

The volatility waiver authority derives from the Clean Air Act, which establishes when the EPA may alter volatility limits through the waiver process and specifically allows the EPA to grant an ethanol waiver for “fuel blends containing gasoline and 10 percent denatured anhydrous ethanol” in Section 745(h)(4).  The EPA relied upon the ethanol waiver language in the Clean Air Act back in 1992 to waive volatility standards for E10.  But whether the EPA could use the Clean Air Act language to issue a waiver for ethanol beyond 10 percent is the question at the heart of the dispute.  The EPA and intervenors in the case representing biofuel interests claimed the language was ambiguous enough to allow the EPA to grant waivers for fuel with 10% ethanol or more.

In a unanimous decision, the Court of Appeals concluded that “the text, structure, and legislative history” of the Clean Air Act do not allow EPA to extend a waiver to E15.  The court found the statutory language straightforward, lacking any modifiers that would establish a range of ethanol blends rather than the 10 percent stated in the statute.  Legislative actions at the time also supported an interpretation that the 10 percent language addressed E10 and not ethanol blends in excess of 10 percent. 

The next critical question for this case is what the Biden Administration EPA will do with case and the E15 waiver.  A request for further review of the D.C. Circuit’s opinion is possible.  Or perhaps the EPA will pursue a legislative fix that increases the statutory reference from 10 percent to 15 percent ethanol.  And it’s always possible that no further action will occur and E15 summer sales will no longer be an option.

Union organizer access as a taking – Cedar Point Nursery v Hassid

In the “win” column for agricultural employers is a case that asks whether a state regulation granting access to private property for union activities is a “taking” of property under the Constitution.  The U.S. Supreme Court’s answer to the question is “yes,” although three of the Justices dissented from the majority opinion. 

A regulation formed under the California Agricultural Labor Relations Act of 1975 gives labor organizations a “right to take access” to an agricultural employer’s property “for the purpose of meeting and talking with employees and soliciting their support.”  The regulation requires agricultural employers to allow union organizers to be on the property up to three hours per day and four 30-day periods per year but cannot be “disruptive” and must provide written notice to employers.   An employer who interferes with the organizers can be subject to sanctions. 

After representatives from United Farm Workers accessed Cedar Point Nursery and engaged in disruptive conduct and sought to access Fowler Packing Company, both occasions without notice to the employers, the companies filed a lawsuit seeking an injunction from the federal District Court.  They argued that the regulation was a physical taking of their properties because it granted an easement to the union organizers, which required compensation under the Fifth and Fourteenth amendments of U.S. Constitution.

The District Court did not grant the injunction and held that the regulation is not a physical taking because it doesn’t allow the public a permanent and continuous right of access to the property for any reason.  The Ninth Circuit Court of Appeals affirmed that decision, agreeing that it wasn’t a physical taking, but a strong dissent argued that the union activities were a physical occupation and taking of property.  The agricultural companies sought but were denied a hearing before all of the Ninth Circuit judges, leading to a request for review granted by the U.S. Supreme Court.

The majority of the Justices concluded that the California regulation is a physical taking because it grants union organizers a right to invade an agricultural employer’s property.  Particularly important to the majority was the regulation’s removal of an owner’s right to exclude people from their private property, which is a “fundamental element” of property rights according to the Court.  The Court rejected the argument that the access must be continuous and permanent to be a physical taking and dispensed with claims that the holding could endanger regulations that allow government entries onto private land.  The Court’s holding was clear:  the access regulation amounts to simple appropriation of private property.

Read the court opinions in these three cases here:

Ninth Circuit’s Opinion North American Meat Institute v. Becerra/Bonta

American Fuel & Petrochemical Manufacturers v. EPA

Cedar Point Nursery v. Hassid

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The Ag Law Harvest

Written by Jeffrey K. Lewis, Attorney and Research Specialist, OSU Agricultural & Resource Law Program

Did you know that the Florida Panther is the last subspecies of Mountain Lion found east of the Mississippi River?  The Florida Panther is an endangered species with an estimated population of under 100 panthers.  As bleak as it may seem, things may be looking up for the Florida Panther to make a roaring comeback (which is ironic because Florida Panthers can’t roar). 

Like the Florida Panther, we have prowled agricultural and resource issues from across the country.  Topics include a historic move by Florida to protect its wildlife and natural resources, agritourism getting a boost in Pennsylvania, Colorado’s livestock industry receiving a lifeline, and USDA efforts to expand broadband and water quality initiatives.   

Florida makes conservation history.  Florida has recently enacted a new law known as the Florida Wildlife Corridor Act (the “Act”).  The Act creates a wildlife corridor that will connect Florida’s large national and state parks and create an unbroken area of preserved land that stretches from the Alabama state line all the way down to the Florida Keys.  Specifically, the Act looks to protect about 18 million acres of habitat for Florida’s wildlife.  The Act seeks to prevent wildlife, like the Florida Panther, from being cut off from other members of its species, which is a main driver of extinction.  The Act also aims to protect Florida’s major watersheds and rivers, provide wildlife crossings over and/or under major highways and roads, and establish sustainable practices to help working ranches, farms and, forests that will be vital to ensuring the success and sustainability of the wildlife corridor.  The Act goes into effect July 1 and provides $400 million in initial funding to help purchase land to create the corridor.    

Pennsylvania provides protection for agritourism operators.  Pennsylvania Governor Tom Wolf signed House Bill 101 into law.  Like Ohio’s law, House Bill 101 shields agritourism operators from certain lawsuits that could arise from circumstances beyond their control.  House Bill 101 prevents participants in an agritourism activity from suing the agritourism operator if the operator warns participants of the inherent risks of being on a farm and engaging in an agritourism activity.  An agritourism operator must: (1) have a 3’ x 2’ warning sign posted and notifying participants that an agritourism operator is not liable, except under limited circumstances, for any injury or death of a participant resulting from an agritourism activity; and (2) have a signed written agreement with an agritourism participant acknowledging an agritourism operator’s limited liability or have specific language printed on an admission ticket to an agritourism activity that notifies and warns a participant of an agritourism operator’s limited liability.  House Bill 101, however, does not completely shelter agritourism operators.  An agritourism operator can still be liable for injuries, death, or damages arising from overnight accommodations, weddings, concerts, and food and beverage services.  The enactment of House Bill 101 will help to protect farmers from costly and unnecessary lawsuits and provide additional sustainability to Pennsylvania’s agritourism industry.     

Colorado Supreme Court strikes proposed ballot initiative seeking to hold farmers liable for animal cruelty.  The Colorado Supreme Court issued an opinion removing Initiative 16, also known as the Protect Animals from Unnecessary Suffering and Exploitation Initiative (“PAUSE”) from voter consideration.  Initiative 16 sought to amend Colorado law and remove certain agriculture exemptions from Colorado’s animal cruelty laws.  Initiative 16 intended to set limitations on the slaughter of livestock and to broadly expand the definition of “sexual act with an animal” to include any intrusion or penetration of an animal’s sexual organs, which opponents of the initiative have argued would prohibit artificial insemination and spaying/neutering procedures.  The Colorado Supreme Court found that the initiative violated Colorado’s single-subject requirement for ballot initiatives and therefore, was an illegal ballot initiative.  The court argued that the central theme of the initiative was to incorporate livestock into Colorado’s animal cruelty laws.  However, because the initiative redefined “sexual act with an animal” to include animals other than livestock, the court concluded that the ballot initiative covered two subjects, not one.  The court reasoned that because the initiative addresses two unrelated subjects, voters could be surprised by the consequences of the initiative if it passed, which is why Colorado has single-subject requirement for ballot initiatives. 

USDA announces dates for Conservation Reserve Program (“CRP”) signups.  The USDA set a July 23, 2021, deadline for agricultural producers and landowners to apply for the CRP General signup and will also be accepting applications for CRP Grasslands from July 12 through August 20.  Through the CRP General, producers and landowners establish long-term conservation practices aimed at conserving certain plant species, controlling soil erosion, improving water quality, and enhancing wildlife habitat on cropland.  CRP Grasslands helps landowners and producers protect grasslands including rangeland, pastureland, and certain other lands, while maintaining grazing lands.  To enroll in the CRP, producers and landowners should contact their local USDA Service Center

USDA expands CLEAR30 initiative nationwide.  The USDA announced that landowners and agricultural producers currently enrolled in CRP now have an opportunity to sign a 30-year contract through the Clean Lakes, Estuaries, and Rivers Initiative (“CLEAR30”).  CLEAR30 was created by the 2018 Farm Bill to address water quality concerns and was originally only available in the Great Lakes and Chesapeake Bay watersheds.  Now, producers and landowners across the country can sign up for CLEAR30.  Eligible producers must have certain water quality improvement practices under a continuous CRP or under the Conservation Reserve Enhancement Program (“CREP”) and contracts that are set to expire on September 30, 2021.  The USDA hopes that by expanding the initiative, it will enable more producers to take conservation efforts up a level and create lasting impacts.  CLEAR30’s longer contracts help to ensure that conservation benefits will remain in place longer to help in reducing sediment and nutrient runoff and reducing algal blooms.  To sign up, producers and landowners should contact their local USDA Service Center by August 6, 2021.

Three federal agencies enter into agreement to coordinate broadband funding deployment.  The Federal Communications Commission (“FCC”), the USDA, and the National Telecommunications and Information Administration (“NTIA”) entered into an agreement to coordinate the distribution of federal funds for broadband development in rural and underserved areas.  In an announcement released by the USDA, Secretary Vilsack stressed the importance of broadband in rural and underserved communities.  Lessons learned from the COVID-19 Pandemic have made access to broadband a central issue for local, state, federal and Tribal governments.  The goal is to get 100% of Americans connected to high-speed internet.  As part of the signed agreement, the agencies will share information about existing or planned projects and identify areas that need broadband service in order to reach the 100% connectivity goal.  Visit the USDA’s Rural Development Telecom Programs webpage to learn more about the USDA’s efforts to provide broadband service in rural areas.    

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Ohio legislature passes solar and wind project siting and approval bill

It’s been a long and winding road to the Governor’s desk for Senate Bill 52, the controversial bill on siting and approval of large-scale wind and solar facilities in Ohio.  The bill generated opposition and concern from the outset, requiring a major overhaul early on.  A substitute bill passed the Senate on June 2 after six hearings and hundreds of witnesses testifying for and against the bill.  It took the House five hearings to pass a further revised version of the bill earlier this week, and the Senate agreed to those revisions the same day.  Now the bill awaits Governor DeWine’s action.  If the Governor signs the bill, it would become effective in 90 days.

S.B. 52 generates conflicting opinions on property rights and renewable energy.  It would grant counties and townships a voice in the siting and approval of large-scale wind and solar projects, allowing a community to go so far as to reject facility applications and prohibit facilities in identified restricted areas of the county.  Supporters of the bill say that new local authority would allow local residents to protect their individual property rights as well as the fate of the community.  On the other side, opponents claim that the bill interferes with the property rights of those who want to lease their land for solar and wind development and unfairly subjects renewable energy to stricter controls than other energy projects.

The bill itself is lengthy and a bit tedious but we’ve organized it into the following summary.  An important first step is to understand the types of projects subject to the law, so we begin with the definitions section of the bill.

Definitions – Ohio Revised Code 303.57

The bill defines several key terms used to identify the types of wind and solar projects and applications that would be subject to the new law:

  • “Economically significant wind farm” means wind turbines and associated facilities with a single interconnection to the electrical grid and designed for, or capable of, operation at an aggregate capacity of five or more megawatts but less than fifty megawatts, excluding any such wind farm in operation on June 24, 2008 and one or more wind turbines and associated facilities that are primarily dedicated to providing electricity to a single customer at a single location and that are designed for, or capable of, operation at an aggregate capacity of less than twenty megawatts, as measured at the customer’s point of interconnection to the electrical grid.
  • “Large wind farm” means an electric generating plant that consists of wind turbines and associated facilities with a single interconnection to the electrical grid that is a “major utility facility.”
  • “Large solar facility” means an electric generating plant that consists of solar panels and associated facilities with a single interconnection to the electrical grid that is a major utility facility.
  • “Utility facility” means all of the above.
  • “Major utility facility” means (a) electric generating plant and associated facilities designed for, or capable of, operation at a capacity of fifty megawatts or more, (and also includes certain electric transmission lines and gas pipelines).
  • “Material amendment” means an amendment to an existing utility facility certificate that changes its generation type, increases its nameplate capacity or changes the boundaries outside existing boundaries or that increase the number or height of wind turbines.

Designation of utility facility restricted areas in a county – ORC 303.58 and ORC 303.59

The bill would allow the county commissioners to designate “restricted areas” within the unincorporated parts of the county where economically significant wind farms, large wind farms, and large solar facilities may not be constructed.  

  • The commissioners may take this action at a regular or special meeting.
  • The commissioners must give public notice of the meeting and proposed restricted areas at least 30 days prior, including to all townships, school districts and municipalities within the proposed restricted areas.
  • The restricted area designations shall not apply to utility facilities that were not prohibited by the commissioners in the county review under ORC 303.61, described below.
  • The restricted area designations become effective 30 days after the commissioners adopt the resolution unless a petition for referendum, described below, is presented to the commissioners within 30 days of adoption.
  • Once effective, a restricted area designation prohibits anyone from filing an application for a certificate or a material amendment to an existing certificate to construct, operate or maintain a utility facility in the restricted area.

Referendum on designation of utility facility restricted areas – ORC 303.59

If a county approves a restricted area, the bill sets up a referendum procedure to allow voters to have a say in the designation.  Residents may file a petition for referendum and request the county commissioners to submit the designation of a utility facility restricted area to a vote of the electors in the county.

  • At least 8% of the total vote cast for governor in the most recent election must sign the petition.
  • The petition must be presented to the commissioners within 30 days of the resolution adopted to designate the restricted areas.
  • Within two weeks of receiving the petition and no less than 90 days prior to the election, the county commissioners must certify the petition to the county board of elections, who must verify the validity of the petition.
  • The utility facility restricted area designation must be submitted to electors for approval or rejection at a special election on the day of the next primary or general election that occurs at least 120 days after the petition is filed.
  • If a majority of the vote is in favor of the restricted area designation, the designation shall be effective immediately.

County review of proposed wind and solar utility facilities — ORC 303.61

Local residents and officials have expressed concerns that they’re the last to know of a proposed large-scale wind or solar development proposed for their community.  Under the bill, utility facilities must hold a public meeting in each county where the facility will be located within 90 to 300 days prior to applying for or making a material amendment to an application for a certificate from the Ohio Power Siting Board.

  • The facility applicant must give a 14 day advance written notice of the public meeting to the county commissioners and to trustees of townships in which facility would be located.
  • At the meeting, the facility applicant must present in written form the type of utility facility, its maximum nameplate capacity, and a map of its geographic boundaries.
  • Up to 90 days after the public meeting, the county commissioners may adopt a resolution that prohibits the construction of the facility or limits its boundaries to a smaller part of the proposed location.  If the county commissioners do not prohibit or limit the facility, the applicant may proceed with the application.

Ohio Power Siting Board Composition – ORC 4906.021 to ORC 4906.025

The bill also responds to concerns that community members do not have a voice in the facility approval process overseen by Ohio’s Power Siting Board (OPSB).  For every utility facility application or material amendment to an application, the bill would require the OPSB to include two voting “ad hoc” members on the board to represent residents in the area where the facility is proposed.

  • The ad hoc members shall be the chair of the township trustees and the president of the county commissioners in the township and county of the proposed location, or their elected official or resident designees, or a trustee and commissioner chosen by a vote of the trustees and commissioners if the application affects multiple townships and counties.
  • An ad hoc member or the member’s immediate family members cannot have an interest in a lease or easement or any other beneficial interest with the applicant utility facility and cannot be an intervenor or have an immediate family member who is an intervenor in the OPSB proceeding.
  • The ad hoc members must be designated no more than 30 days after the county or township is notified by the OPSB that the application has been submitted and meets statutory requirements.
  • An ad hoc member may not vote on a resolution by its county commissioners or township trustees to intervene in the application proceeding.
  • An ad hoc member is exempt from restrictions on ex parte communications with parties in the case but must disclose the date and participants of ex parte conversations and shall not disclose or use confidential information acquired in the course of official duties.

OPSB Authority – ORC 4901.101; ORC 4906.30

There are parameters in the bill for projects that the OPSB may not approve.  The OPSB may not grant a certificate for the construction, operation, and maintenance of or material amendment to an existing certificate for a utility facility in these situations:

  • If the utility facility is prohibited by a restricted area designation.
  • If the county commissioners have prohibited the utility facility by resolution.
    • Where the utility facility would be in multiple counties, the OPSB must modify a certificate to exclude the area of a county whose commissioners prohibited the facility.
  • For any areas outside the boundaries of the utility facility that were changed by action of the county commissioners.
  • If the facility has a nameplate capacity exceeding the capacity provided to the county commissioners, has a geographic area not completely within the boundaries provided to the county commissioners, or is a different type of generation than that provided to the county commissioners.

Decommissioning Plans for Utility Facilities – ORC 4906.21 to ORC 4906.212

The question of what happens to a facility when its production life ends has been another issue of voiced concern.  The bill establishes decommissioning procedures for facilities.  At least 60 days prior to commencement of construction of a utility facility, an applicant must submit a decommissioning plan for review and approval by the OPSB.

  • A state registered professional engineer must prepare the plan, and the OPSB may reject the selected engineer.
  • The plan must include:
    • A list of parties responsible for decommissioning of the utility facility.
    • A schedule of decommissioning activities, which cannot extend more than 12 months beyond the date the utility facility ceases operation.
    • Estimates of the full cost of decommissioning, including proper disposal of facility components and restoration of the land on which the facility is located to its pre-construction state, but not including salvage value of facility materials.
      • The estimate of the full cost of decommissioning a utility facility must be recalculated every five years by an engineer retained by the applicant.

Performance Bonds – ORC 4906.22 to ORC 4906.222

How to and who pays for facility decommissioning is also addressed in the bill.  Before beginning construction of a utility facility, the applicant must post a performance bond to ensure that funds are available for the decommissioning of the facility.

  • The utility facility must name the OPSB as the bond oblige.
  • The bond shall equal the estimate of decommissioning costs included in the facility’s decommissioning plan.
  • The bond shall be updated every five years according to the most recent costs of decommissioning the facility and shall increase if estimated costs increase but shall not decrease if estimated costs decrease.

OPSB Provision of Approved Application — ORC 4906.31

Under the bill, local governments would formally know if a project receives OPSB approval.  The OPSB must provide a complete copy of an approved application for or material amendment to a certificate to each board of trustees and county commissioners in the townships and counties of the facility location.

  • The copy must be provided within 3 days of the OPSB’s acceptance of the application and filing fee payment by the applicant.
  • The copy may be in electronic or paper form.

Effect on Utility Facility Applications in Process – Sections 3, 4 and 5 of the Act

Many wind and solar facility projects are currently in process, so the bill addresses what happens to those projects should the law go into effect.

  • The new law would apply to all applications for a certificate or a material amendment to an existing certificate for an economically significant wind farm or large wind farm that is not accepted by the OPSB within 30 days after the effective date of the legislation. 
    • An application for an economically significant wind farm or large wind farm that is not approved within 30 days after the effective date would be subject to review by the county commissioners, who would have 90 days after the effective date to review the application and act according to the provisions of the new law.
  • If an application for a certificate or material amendment to a certificate for a utility facility has not been accepted by the OPSB as of the new law’s effective date, the OPSB must include “ad hoc” members in further OPSB proceedings on the application.
  • The new law would not apply to an application for a certificate or material amendment to a certificate for a large solar facility that, as of the effective date of the new law, is in the new services queue of the PJM interconnection and regional transmission organization at the time the application is accepted by OPSB and the applicant has received a completed system impact study from PJM and paid its filing fee.
    • If the facility has multiple positions in the PJM new services queue, all queue position in effect on the law’s effective date are exempt from the new law.
    • If the facility submits a new queue position for an increase in its capacity interconnection rights, the change shall not subject the facility to the new law as long as the facility’s nameplate capacity does not increase.

We’ll keep an eye on the Governor to learn where S.B. 52’s road will end.  Read the full text of S.B. 52 and further information about it on the Ohio General Assembly’s website.

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Hanging on a word: U.S. Supreme Court rules in favor of refineries in renewable fuels case

The meaning of the word “extension” was at the heart of a dispute that made its way to the U.S. Supreme Court over small refinery exemptions under the nation’s Renewable Fuel Program (RFP).  The decision by the Supreme Court came as a bit of a surprise, as questions raised by the Justices during oral arguments on the case last Spring suggested that the Court would interpret “extension” differently than it did in its June 27 decision.

Congress established the RFP in 2005 to require domestic refineries to incorporate specified percentages of renewable fuels like ethanol into the fuels they produce.  Recognizing that meeting RFP obligations could be more difficult and costly for small-scale refineries, Congress included an automatic two-year exemption from RFP obligations in the statute for small refineries producing less than 75,000 barrels per day. 

The law also allowed the Secretary of Energy to extend an exemption for a small refinery an additional two years if blending of renewables would impose a “disproportionate economic hardship” and authorized a small refinery to petition the EPA for an “extension” of an exemption for the same economic hardship reason.  This leads us to the significance of the meaning of the word “extension”:  a small refinery that receives an extension of an exemption need not meet the RFP blending mandate for the period of the extension.

We likely all have opinions on what the word “extension” means, but what matters is what it means in the context of the statute that uses the word.  But the RFP statute doesn’t define the word.  The three small refineries that appealed the case to the Supreme Court argued that an extension is simply an increase in time.  The extension, they claimed, need not be directly connected to and occur just after an exemption.  The refineries had received the initial exemption from RFP blending, had a lapse of the exemption for a period, then later asked for and received an extension of the exemption from the EPA.   

A group of renewable fuel producers led by the Renewable Fuels Association disagreed with the refineries and defined “extension” to mean an increase in time that also requires unbroken continuity with the exemption.  They argued that the EPA could not grant a small refinery an extension if an exemption had already lapsed.  Theirs was the definition adopted by the Tenth Circuit Court of Appeals, which held that the refineries could not receive an extension because their exemptions had lapsed and made them permanently ineligible for an extension.

In its decision, the majority on the Supreme Court held in favor of the definition advanced by the small refineries.  Explaining that the courts must give a term its “ordinary or natural meaning” when Congress doesn’t provide a definition, the majority concluded that “it is entirely natural—and consistent with ordinary usage—to seek an “extension” of time even after some lapse.”  Examples the Court drew upon included a student seeking an extension for a paper after its deadline, a tenant asking for an extension after overstaying a lease, and the negotiation of an extension to a contract after it expires.  Additionally, federal laws such as recent COVID and unemployment legislation allow an extension of benefits following an expiration of those benefits, the Court explained.  The Court also pointed to dictionary meanings of the word and contextual clues within the RFP statute, such as language in the statute stating that a small refinery may “at any time” petition for an extension.

Justice Gorsuch, who wrote the majority opinion, was careful to refute the arguments offered in the dissenting opinion written by Justice Coney-Barrett, joined by Justices Sotomayor and Kagan.  Justice Coney-Barrett argued that a natural and ordinary reading of the RFP’s text and structure clearly indicate that an extension could not occur for an exemption that no longer exists.  Referring to the Tenth Circuit’s earlier holding, the dissent agreed that the “ordinary definitions of ‘extension,’ along with common sense, dictate that the subject of an extension must be in existence before it can be extended.”

Does the future of ethanol markets hang on the meaning of one word?  How will the decision affect the renewable fuels sector?  Many claim that Congress included the exemptions to help small refineries adjust to and adopt the renewable blending mandates, but not to indefinitely avoid those mandates.  Renewable fuel interests state that the exemptions have created a detrimental effect on the renewable fuels market.  On the other hand, small refineries claim that Congress did not intend to drive them out of business by forcing them to comply with renewable blending requirements but instead designed the exemption and extension to protect them from disproportionate economic hardship.   

How long the protection from RFP compliance remains in place for small refineries is a question many in agriculture are asking.  Based on the Court’s recent decision, it could be indefinitely.  Perhaps Congress should step in and clarify the meaning of that one simple word.

Read the Supreme Court decision in HollyFrontier Cheyenne Refining, LLC v Renewable Fuels Assn. here.

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It’s time to talk noxious weeds law

Poison hemlock and Canada thistle are making unwelcome appearances across Ohio, and that raises the need to talk about Ohio’s noxious weeds law.  The law provides mechanisms for dealing with noxious weeds—those weeds that can cause harm to humans, animals, and ecosystems.  Location matters when we talk about noxious weeds.  That’s because Ohio law provides different procedures for dealing with noxious weeds depending upon where we find the weeds.  The law addresses managing the weeds on Ohio’s noxious weeds list in these four locations:

  1. Along roadways and railroads
  2. Along partition fence rows
  3. On private land beyond the fence row
  4. On park lands

Along roadways and railroads.  The first window just closed for mandatory mowing of noxious weeds along county and township roads.  Ohio law requires counties, townships, and municipalities to destroy all noxious weeds, brush, briers, burrs, and vines growing along roads and streets.  There are two mandated time windows for doing so:  between June 1 and 20 and between August 1 and 20.  If necessary, a cutting must also occur between September 1 and 20, or at any other time when necessary to prevent or eliminate a safety hazard.  Railroad and toll road operators have the same legal duty, and if they fail to do so, a township may cause the removal and bring a civil action to recover for removal costs.

Along partition fence rows.  Landowners in unincorporated areas of the state have a duty to cut or destroy noxious weeds and brush within four feet of a partition fence, and the law allows a neighbor to request a clearing of the fence row if a landowner hasn’t done so.  If a landowner doesn’t clear the fence row within ten days of receiving a request to clear from the neighbor, the neighbor may present a complaint to the township trustees.  The trustees must visit the property and determine whether there is a need to remove noxious weeds and if so, may order the removal and charge removal costs against the landowner’s property tax bill. 

On private land beyond the fence row.  A written notice to the township trustees that noxious weeds are growing on private land beyond the fence row will trigger another township trustee process.  The trustees must notify the landowner to destroy the weeds or show why there is no reason to do so.  If the landowner doesn’t comply within five days of receiving the notice, the trustees may arrange for destruction of the weeds.  The township may assess the costs against the landowner’s property tax bill.

On park lands.  If the township receives notice that noxious weeds are growing on park land or land owned by the Ohio Department of Natural Resources, the trustees must notify the OSU Extension Educator in the county.  Within five days, the Educator must meet with a representative of the ODNR or park land, consider ways to deal with the noxious weed issue, and share findings and recommendations with the trustees.

Even with noxious laws in place, we recommend talking before taking legal action.   If you’re worried about a noxious weed problem in your area, have a talk with the responsible party first.  Maybe the party isn’t aware of the noxious weeds, will take steps to address the problem, or has already done so.  But if talking doesn’t work, Ohio law offers a way to ensure removal of the noxious weeds before they become a bigger problem.

We explain the noxious weed laws in more detail in our law bulletin, Ohio’s Noxious Weed Laws.  We’ve also recently illustrated the procedures in a new law bulletin, Legal Procedures for Dealing with Noxious Weeds in Ohio’s Rural Areas.  Also see the OSU Agronomy Team’s recent article about poison hemlock in the latest edition of C.O.R.N.

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