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Legislators propose “Clean Lake 2020 Plan” funding to reduce Lake Erie phosphorus

A pair of companion bi-partisan bills just introduced in the Ohio Senate and Ohio House of Representatives would provide significant funding to help meet Ohio’s goal of reducing phosphorus loading by 20% in Lake Erie by 2020.  The sponsors of S.B. 299 are Senators Gardner (R-Bowling Green) and O’Brien (D-Bazetta) and Representatives Arndt (R-Port Clinton) and Patterson (D-Jefferson) are the sponsors of H.B. 643.  The legislation is a “targeted funding solution bill,” according to Rep. Arndt, “providing both [general revenue funds] and capital funding for a variety of strategies that scientists, Lake Erie advocates, agriculture leaders, and others believe can help achieve our phosphorus reduction goals.”

The proposed legislation includes the following:

  • A “Soil and Water Conservation Support Fund” of up to $3.5 million to support county soil and water conservation districts in the Western Lake Erie Basin for staffing and to assist in soil testing, nutrient management plan development that would also include manure transformation and manure conversion technologies, enhanced filter strips and water management.
  • A “Soil and Water Phosphorus Program” of up to $20 million, to be established by the Ohio Department of Agriculture to reduce phosphorus in sub-watersheds of the Western Lake Erie Basin. The bill requires that the programs be supported with the purchase of equipment for subsurface placement of nutrients into the soil; nutrient placement based on geographic information system data; soil testing; variable rate technology; manure transformation and manure conversion technologies; tributary monitoring and water management and edge-of-field drainage management.
  • $3.5 million for Ohio State’s Sea Grant—Stone Laboratory on Lake Erie to construct new research lab space and purchase in-lake monitoring equipment.
  • Up to $10 million for the Healthy Lake Erie Initiative to reduce open lake disposal of dredged materials into Lake Erie.

Both bills were immediately referred to committee, with proponent testimony heard before the Senate Finance Committee on May 15 and the House Finance Committee on May 16.  The Lake Erie Foundation, Nature Conservancy, Ohio Environmental Council, Soil and Water Conservation Districts and Ohio Farm Bureau testified in support of the legislation.

The legislators also introduced Senate Joint Resolution 6 and House Joint Resolution 16 on May 9 that propose to submit a constitutional amendment authorizing the issuance of up to $1 billion in general obligation bonds to pay for the Lake Erie clean water improvements for voter approval at the November 6, 2018 general election.  The resolutions were also referred to the respective finance committees but were not on the committees’ recent agendas.

Read S.B. 299 here or H.B. 643 here.

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The Ag Law Harvest

Here’s our gathering of recent agricultural law news you may want to know:

Ohio court upholds conservation easement restriction.  In a battle over the future of a property subject to a conservation easement, the Twelfth District Court of Appeals has determined that   the easement’s restriction on subdivision of the 76-acre property is valid.  The easement requires that the property be retained forever in its natural and agricultural state and prohibits any subdivision of the property.   The lower court determined that the subdivision is an invalid and unreasonable restraint on alienation because it does not contain a reasonable temporal limitation, but the Court of Appeals disagreed, noting that the property could still be sold and that the prohibition on subdividing the property was consistent with the purpose of the conservation easement.  See Taylor v. Taylor here.

First decision out in North Carolina nuisance lawsuits.  On April 26, 2018, a federal jury found that Murphy-Brown LLC created a nuisance for neighbors living near Kinlaw Farms in North Carolina, where Murphy-Brown raises up 14,688 hogs.   A subsidiary of Smithfield, the largest producer of pork in the world, owns Murphy-Brown LLC.   Neighbors of Kinley Farms brought the lawsuit in 2014, asserting that the concentrated animal feeding operation (CAFO), with its open air lagoon, spraying of manure on nearby fields, and truck traffic, created “odor, annoyance, dust, noise and loss of use and enjoyment” of their properties.  The neighbors also claimed that boxes of deceased hogs and hog waste on the farm attracted buzzards, insects and vermin.  The jury found that Murphy-Brown substantially and unreasonably interfered with each of the ten plaintiffs’ use and enjoyment of their property and as a result, awarded each plaintiff $75,000 in compensatory damages and $5 million in punitive damages.  Since the initial jury decision, the amount of punitive damages awarded to each plaintiff has been diminished to $250,000 due to a state law limiting such awards in North Carolina.  Smithfield/Murphy-Brown LLC plans to appeal the decision.  Similar lawsuits brought by neighbors against hog operations in eastern North Carolina will be heard in the near future.  Several questions remain to be answered; one is whether Smithfield will be successful in their appeal.  Another question is whether this case and the other lawsuits will inspire similar lawsuits against large livestock operations in other states.

Monsanto loses challenge of California glyphosate listing.  A California Court of Appeals has held that the state may list glyphosate, the active ingredient in Monsanto’s Roundup product, as a probable carcinogen under California’s Proposition 65, which requires the California Office of Environmental Health Hazard Assessment (OEHHA) to list all chemical agents with a known association to cancer.  OEHHA based its listing on a 2015 report from the International Agency for Research on Cancer (IARC) which stated that glyphosate was a “probable” human carcinogen.   Proposition 65 allows OEHHA to rely upon an IARC finding, but Monsanto argued that represented an unconstitutional delegation of authority to a foreign agency.  The court disagreed, ruling that OEHHA acted appropriately by relying on the IARC conclusion that glyphosate is a possible carcinogen.

National GMO Standard proposed.  On May 4, the Agricultural Marketing Service (AMS) released the administrative rule it proposes to meet the 2016 Congressional mandate to develop a National Bioengineered Food Disclosure Standard.  The rule would require that genetically modified or “bioengineered” food be labeled as such.  According to the AMS, “[t]he proposed rule is intended to provide a mandatory uniform national standard for disclosure of information to consumers about the [bioengineered] status of foods.”  The AMS is asking for interested parties to submit their comments about the proposed rule by July 3, 2018.

Industrial hemp bill on the move.  Senate Majority Leader Mitch McConnell’s federal legislation to allow states to regulate industrial hemp is gaining traction.  The National Association of State Departments of Agriculture is supporting the bill and encouraging Congress to “provide an opportunity toward full commercialization of this new crop opportunity for farmers.”

More on Arkansas dicamba ban.  In Arkansas, where the fight over the use of dicamba has raged for the past few years, the state Supreme Court has overruled several lower court judges’ rulings that certain farmers be exempted from the statewide ban on applying the volatile herbicide.  The Arkansas State Plant Board has banned the use of dicamba in the state from April 16 through October 31 of this year.

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The Ag Law Harvest

Here’s our gathering of recent agricultural law news you may want to know:

  • The Ohio Department of Agriculture will hold a hearing on April 5, 2018 at 9 a.m. to receive testimony on proposed amendments to the Agricultural Pollution Abatement Program rules. The amendments are largely alterations of the format and structure of the rule to allow for easier reading, and do not impact the substance of the rule in many situations.  Two changes to the substance of the rules is the addition of a duty to prevent pollution from “residual farm products,” which means bedding, wash waters, waste feed, silage drainage and some mortality composting, and clarification of the investigation and enforcement process.  Read the ODA’s summary of the changes here.  Hearing information is here.
  • Considering solar leasing on your farm? If so, sit in on the Solar Leasing for Agricultural Landowners webinar on April 4 at Noon. The free webinar features our colleague Prof. Shannon Ferrell of Oklahoma State, who will remove some of the mystery of solar leasing for landowners.  More information is here.
  • Several groups have filed a lawsuit against the USDA for its March 12 withdrawal of the Organic Livestock and Poultry Practices rule finalized during President Obama’s tenure. The rule would have established animal welfare standards for organic producers. Read more about the organizations’ claims in this post by our Ag & Food Law Consortium partner, the National Sea Grant Law Center.
  • Another Consortium partner of ours, Penn State Law, has prepared a comprehensive summary of the current status and legal developments for the problematic Rover Pipeline that is affecting many landowners in Ohio and other states. The summary is here.
  • Ohio legislative activity:
    • The Apiary Immunity bill, H.B. 392, passed the Ohio House on March 21 and was introduced in the Ohio Senate on March 26.  The bill proposes limited liability for registered apiary owners.
    • Fedor (D-Toledo) and Rep. Sheehy (D-Toledo) introduced HCR 25, a resolution encouraging the U.S. EPA Administrator to declare the open waters of Western Lake Erie as impaired, consistent with the Ohio EPA’s recent water quality report we reported on earlier this week.

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Ag issues in the federal spending bill

Amidst a great deal of controversy, President Trump signed the “Consolidated Appropriations Act, 2018” on March 23.  The omnibus $1.3 trillion spending package includes a number of provisions that affect agriculture, not all spending related.  One glaring omission from the bill that agriculture wanted, however, was language allowing the EPA to withdraw the Waters of the United States (WOTUS) rule.  Otherwise, the new law contains fixes and clarifications for several key legal issues agriculture has faced in the past year and funding for important agricultural programs.

Section 199A tax deduction revised

Sellers of grain who were hoping to capitalize on the IRC § 199A 20% gross sales deduction when selling grain to their cooperative will be disappointed that the spending bill has removed the deduction and that the removal is retroactive to January 1, 2018.  Congress enacted new provisions that will address sales to cooperatives.  According to my colleague and tax expert Kristine Tidgren at Iowa State, “the cooperative patron is subject to a new bifurcated calculation and a hybrid 199A deduction. Essentially, the fix gives the cooperative patron a deduction that blends the new 199A deduction with the old 199 DPAD deduction (all within the new 199A). Depending upon their individual situations, cooperative patrons may be advantaged, disadvantaged, or essentially treated the same by selling to a cooperative rather than selling to a non-cooperative.”  Read more of Kristine’s analysis here.

CERCLA emissions reporting for livestock goes away

The spending bill incorporates provisions of the “Fair Agricultural Reporting Methods Act” proposed earlier by a bi-partisan group of Senators concerned about a court ruling that subjected farms to air emissions reporting under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (explained in our previous post).  The EPA had delayed the reporting requirement to May 1, 2018.  The reporting mandate is removed under the new law, however, which states that air emissions from animal waste at a farm are not subject to CERCLA reporting requirements, nor are emissions from the application, handling or storage of registered pesticides.  A “farm” is an area used to produce crops or livestock that have a total value of $1,000 or more.

Electronic logging device rule further delayed

We’ve reported several times on the Electronic Logging Device (ELD) rule that would require commercial agricultural haulers to utilize electronic technology that automatically records hours-of-service data.  The Federal Motor Carrier Safety Administration (FMCSA) issued several waivers that delayed the requirement.  The new spending bill effectively voids the ELD rule until September 30, 2018, by prohibiting the FMCSA from using its funds during that time to implement, administer, or enforce provisions regarding the use of electronic logging devices by operators of commercial motor vehicles transporting livestock or insects.

County-level ACRE pilot program to be established

The spending bill directs USDA to create a 2018 pilot program for county-level agriculture risk coverage (ARC) payments for the 2017 crop year.   Farm Service Agency offices in each State will have the opportunity to provide agricultural producers a supplemental payment to ensure that there are not significant yield calculation disparities between comparable counties in the State.

Rural broadband grant program funded

The law allocates $600,000,000 for the USDA to conduct a new broadband loan and grant pilot program under the Rural Electrification Act.  At least 90 percent of the households to be served by the project receiving a loan or grant under the pilot program must be in a rural area currently without sufficient access to broadband.

Conservation funding maintained

The spending bill maintains full funding levels for farm bill conservation programs and exempts farms participating in conservation programs from obtaining System for Award Management (SAM) and Data Universal Numbering System (DUNS) numbers.   The Great Lakes Restoration Initiative received $300 million to carry out activities that would support the Initiative and the Great Lakes Water Quality Agreement, including grants for research, monitoring, outreach, and implementation.

Research funding increased

In stark contrast to significant cuts proposed by the White House, the spending bill contains the largest increase in research funding in over a decade.  Research programs at the USDA would grow by $33 million, to $1.2 billion.  The funding includes a $25 million increase to a $400 million budget for the Agriculture and Food Research Initiative (AFRI) established by the 2008 Farm Bill, surprisingly still $300 million shy of the 2008 Farm Bill’s proposed funding level.

Readers can dig into the 2,232 pages of the Consolidated Appropriations Act of 2018 here.

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March 18 might be new date for complying with Electronic Logging Device rule

Late last year, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) issued a 90-day waiver to the Electronic Logging Device (ELD) rule for livestock and agricultural commodity haulers in response to a multi-party petition by agricultural groups.  The waiver is set to expire on March 18, 2018.   Agricultural groups are now awaiting the agency’s response to a second petition they’ve filed, which seeks another waiver and limited exemption from the ELD rule for agriculture before the March 18 waiver expiration date.  There is also talk that Congress will delay the ELD rule for agriculture, as proposed by H.R. 3282, but time is running out for a legislative fix.

The ELD rule, which became effective last December 18, requires commercial haulers to utilize electronic technology that automatically records hours-of-service (HOS) data rather than using the current practice of recording data on paper logs.  Congress directed the Secretary of Transportation to adopt regulations requiring ELD use in commercial motor vehicles that are involved in interstate commerce and operated by drivers who are required to keep records of duty status (RODS).  The purpose of the rule is to create a safer work environment for drivers by making it easier and faster to accurately track, manage, and share the data.

The intent of the 90-day waiver for agriculture was to provide the agency more time to clarify the rule’s applicability to agriculture, which included considering agricultural exemptions from the rule.  Agricultural groups also asked the agency to review and clarify the HOS, RODS and Commercial Driver’s License (CDL) exemptions for agriculture.   While it hasn’t yet responded to the second petition to extend the ELD waiver, the FMSCA did recently provide additional explanations of the ELD rule’s application to agriculture, along with clarifications of HOS and CDL requirements.   The information is available on the agency’s website.

How does the ELD rule apply to agriculture?

Here’s a summary of the FMSCA’s explanation of how the ELD rule applies to agricultural situations:

  1. The following are “agricultural exemptions” from HOS regulations, which would also remove the vehicle or driver from the ELD rule:
    • “Covered farm vehicles,” which means vehicles that are:
      • Registered in a state with a license plate or other designation that allows law enforcement to identify it as a farm vehicle;
      • Operated by the owner or operator of a farm, or an employee or family member of the owner or operator;
      • Used to transport agricultural commodities, livestock, machinery, or supplies to or from a farm;
      • Not used in for-hire motor carrier operations;
      • 26,000 pounds or less and operating anywhere in the country, or 26,001 pounds or more and operated anywhere in the state of registration or operated across state lines within a 150-air mile radius of the farm.
    • Drivers who transport agricultural commodities, including livestock, live fish and bees, within a 150-air mile radius of the farm.
      • Once a driver operates beyond the 150-air mile radius, HOS regulations apply and the driver must use an ELD for movement beyond the 150-air mile mark.
      • Note that FMCSA has recently published proposed guidance on this exemption for vehicles traveling to pick up an agricultural commodity or returning from a delivery point and for trips beyond 150 air-miles from the source of the agricultural commodity. The proposed guidance is here.
      • Also note that drivers transporting commercial bees or livestock in interstate commerce are exempt from the HOS 30-minute break requirement when bees or livestock are on the vehicle.
  2. If a vehicle or a combination of vehicles (truck and trailer) has a gross vehicle weight rating (GVWR), a gross combination weight rating (GCWR), a gross vehicle weight (GVW), or a gross combination weight (GCW) of 10,001 pounds  or more and the operation is not otherwise excepted as described above, FMCSA regulations generally apply to the driver but the driver is not subject to the ELD rule in the following situations:
    • A driver operates within a 100-air mile radius of the normal work reporting location and works no longer than 12 hours per day. This is the same exception that applies to preparation of a logbook.
    • A driver uses paper RODS no more than 8 days in any 30-day period.
    • A vehicle is older than model year 2000.
  3. Non-business related transportation of horses and other animals:
    • The ELD rule does not apply to the transportation of horses and other animals to shows and events, as long as the transportation is not business related or for-hire (even if prize and scholarship money is offered).
    • Note that FMCSA has recently updated its guidance for non-business related transportation of horses, available here.

What if the ELD rule applies to an agricultural situation?

Drivers who are subject to the new ELD rule must understand and be able to use ELDs by the required deadline, which FMCSA states includes knowing how to annotate and edit RODS, certify RODS, and collect required supporting documents. Drivers must also know how to display and transfer data to safety officials when requested.  For information about meeting the ELD requirements, visit the FMSCA’s ELD page.

For more information on understanding FMCSA regulations

Learn more about the ELD rule and other FMCSA regulations that might apply to agriculture in this excellent publication by our colleagues, Tiffany Dowell Lashmet at Texas A&M and Beth Rumley at the National Agricultural Law Center:   Outline for Analyzing Federal Motor Carrier Safety Administration Regulation: Applicability for Agriculture

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The Ag Law Harvest

Here’s our gathering of recent agricultural law news you may want to know:

Ohio Department of Agriculture to hold hearing on produce safety rules. ODA will have a public meeting on March 8, 2018, to receive testimony on proposed produce safety rules. The proposed regulations closely resemble the federal FSMA regulations that establish standards for production, harvest and handling of fruits and vegetables. ODA is proposing the changes to ensure that Ohio farmers have to meet only one set of standards and that Ohio’s standards will be accepted when Ohio produce is shipped to other states. The ODA’s public notice containing links to the rules package is here.

Report criticizes Ohio’s Beef Checkoff Program. The Organization for Competitive Markets and Ohio Farmer’s Union released a report claiming that Ohio’s Beef Checkoff Program is in need of reform because it lacks adequate oversight of the collection, administration and expenditure of checkoff dollars. The report is available here.

Understanding farm equipment trades under the new tax law. The federal Tax Cuts and Jobs Act eliminated like-kind exchange treatment for personal property, meaning that farm equipment trades will be treated as taxable events and there will be no tax deferral for §1231 gains or §1245 recapture. Our colleague Kristin Tidgren at Iowa State has written an excellent analysis of the impacts of this tax law change, available here.

Plaintiffs ask court to vacate EPA’s XTendiMax registration. In an opening brief filed by the National Family Farm Coalition and others against U.S. EPA and Monsanto, petitioners claim that the EPA violated the Federal Insecticide, Fungicide and Rodenticide Act by: failing to examine if the dicamba-based XTendiMax product’s use would significantly increase the risk of unreasonable adverse effects on the environment and create significant socioeconomic and agronomic costs to farmers; relying solely on label conditions to mitigate product harm even though the label did not address vapor drift by the product; and amending the label without any data or analysis of the new label conditions . The petitioners want the EPA to revoke the product’s registration.

WOTUS battles continue. It’s becoming more difficult to keep up with litigation as we await the Sixth Circuit Court of Appeals’ lift of the nationwide stay on the 2015 WOTUS rule. New York, California, Connecticut, Maryland, Massachusetts, New Jersey, Oregon, Rhode Island, Vermont, Washington and the District of Columbia filed a lawsuit against the U.S. EPA and U.S. Army Corp. of Engineers for suspending the 2015 rule, delaying it for two years, and reinstating the previous rule. Several environmental groups filed a similar lawsuit challenging the agencies’ actions in federal court in South Carolina. The American Farm Bureau and several other agricultural groups and the states of Texas and Louisiana then each filed lawsuits in the Texas, seeking a nationwide injunction to keep the 2015 rule from going into effect. Now we wait. More on the rule here.

Ohio legislation on the move:

  • Idle and orphan wells. House Bill 225 revises Ohio’s idle and orphaned well program and increases funding for the program. Sponsored by Thompson (R-Marietta). Approved by the House on January 17, 2018; first hearing before the Senate Energy & Natural Resources Committee held on February 20, 2018.
  • Hunting licenses. House Bill 272 would expand hunting and fishing license exemptions for grandchildren of landowners and partially disabled veterans. More information here. Sponsored by Householder (R-Glenford) and Kick (R-Loudonville). Second hearing proponent testimony heard on February 13 before the House Energy & Natural Resources Committee.
  • Riparian buffers. House Bill 460 would exempt qualifying riparian buffers in the Western Basin of Lake Erie from property taxation, reimburse local taxing units for their consequent loss of income and require soil and water conservation districts to assist landowners with establishing and maintaining riparian buffers. Sponsored by Patterson, (DJefferson) and Sheehy (D-Oregon). Second hearing proponent testimony heard on February 13 before the House Energy & Natural Resources Committee.

Just introduced:

  • Township laws. House Bill 500 proposes several changes to township laws, including allowing limited zoning authority over agriculture in platted subdivision areas and requiring township approval before a county vacates a public township road. Introduced in the House by Cafagna (R-Genoa Township) on February 13 and referred to the State and Local Government Committee on February 20.

For other agricultural and food law updates from around the country, check out the National Agricultural Law Center’s Ag & Food Law Blog.  The Ohio State University Agricultural & Resource Law Program is proud to be a partner in the National Agricultural Law Center’s Agricultural & Food Law Consortium.

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Bill Introduced to Exempt Agriculture from CERCLA Air Emissions Reporting

A bipartisan group of eight U.S. senators have introduced a bill to exempt agricultural producers from reporting requirements under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). We’ve reported previously on the new mandate that would require livestock operations to report air emissions, the result of a U.S. Court of Appeals decision last year that struck down the EPA’s rule that exempted agriculture from the reporting requirements. The U.S. EPA has repeatedly requested the court for a delay of the new reporting mandate, now delayed until after May 1, 2018. The proposed legislation would establish a new exemption that would protect farmers from the upcoming reporting mandate.

Senator Deb Fischer (R-Neb.), a primary sponsor of the legislation, stated that “[t]hese reporting requirements were designed to apply to industrial pollution and toxic chemicals, not animal waste on a farm or ranch.” Co-sponsor Joe Donnelly (D-Ind.) assured farmers that requiring them to “spend their time and money on reports that will go unused by EPA would be burdensome and needless.”

The text of the senators’ proposed Fair Agricultural Reporting Method (FARM) Act, S. 2421, is available here. The proposal includes:

  • A statement that CERCLA reporting does not apply to air emissions from animal waste, including decomposing animal waste, at a farm.
  • A definition for “animal waste,” which means feces, urine, or other excrement, digestive emission, urea, or similar substances emitted by animals (including any form of livestock, poultry or fish), and including animal waste that is mixed or commingled with bedding, compost, feed, soil, or any other material typically found with such waste.
  • A definition of “farm,” which means a site or area (including associated structures) that is used for the production of a crop or the raising or selling of animals (including any form of livestock, poultry, or fish) and under normal conditions, produces during a farm year any agricultural products with a total value equal to not less than $1,000.
  • A statement that maintains the current exemption from CERCLA reporting for applications, storage and handling of registered pesticide products.

Senator Fischer introduced S.2421 on February 13 and the Senate has referred the bill to the Committee on Environment and Public Works.

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