Environmental
Written by: Ellen Essman, Law Fellow, and Peggy Hall, Asst. Professor, OSU Agricultural & Resource Law Program
The controversial “Waters of the United States” (WOTUS) Rule suffered three governmental assaults this week. We reported earlier this year about litigation over the Rule and a Senate Resolution urging withdrawal of the Rule. Actions this week in the House of Representatives, the White House and the EPA echo the Senate’s sentiments and push the Rule further towards its demise.
The House Resolution
In the U.S. House of Representatives, Ohio’s Representative Bob Gibbs introduced a resolution on February 27, 2017 stating that the Rule should be vacated. House Resolution 152 declares that the Clean Water Act (from which the Rule derives) is one of the nation’s most important laws whose success requires cooperative federalism, under which federal, state and local governments have a role in protecting water resources. Based upon the foundation of cooperative federalism, “Congress left to the States their traditional authority over land and water, including farmers’ field, non-navigable, wholly intrastate water (including puddles and ponds), and the allocation of water supplies.” The Resolution asserts that the latest revision to the Rule, however, claimed broad federal jurisdiction over water that encroaches upon the authority of the States and undermines the Clean Water Act’s historical exemptions from federal regulation. The Resolution also claims that the EPA failed to follow proper processes when issuing the Rule.
The Executive Order
President Trump’s executive order (EO) issued on February 28, 2017 calls for the EPA and the Army for Civil Works (“Civil Works”, a part of the Army Corps of Engineers) to “rescind or revise” the WOTUS Rule. It is important to note, however, that the EO does not abolish the Rule; it simply orders the two agencies to review the Rule and try to adapt it to the Trump administration’s policies. The EO includes a policy statement explaining that it is in the best interest of the United States to keep “navigable waters… free from pollution,” but there is also a strong interest in promoting economic growth, so any changes to the Rule must balance both of those interests. The EO also gives the Attorney General the discretion to communicate any potential changes to the WOTUS Rule to federal courts with pending WOTUS litigation.
The EO further directs the EPA and Civil Works, when revising or rescinding the WOTUS Rule, to construe “navigable waters” as Justice Scalia did in the Supreme Court case Rapanos v. U.S. Under the Clean Water Act, “navigable waters” are defined as “waters of the United States, including territorial seas.” This means that the terms “navigable waters” and “waters of the United States” are interchangeable. In Rapanos, Justice Scalia, who wrote the decision for a plurality of the Court, asserted that navigable waters/WOTUS cannot be “ordinarily dry channels through which water occasionally or intermittently flows.” Instead, they must be “relatively permanent, standing or flowing bodies of water,” or wetlands with a “continuous surface connection” to permanent water bodies. Scalia’s interpretation is at odds with the interpretation contained in the Obama administration’s WOTUS Rule.
Agency Response to the Executive Order
EPA Administrator Scott Pruitt and Civil Works acting Secretary Douglas Lamont didn’t waste any time responding to Trump’s EO. On the same day Trump signed the Order, the agencies filed a Notice of Intention to Review and Rescind or Revise the Clean Water Rule. In the notice, the agencies explain their intentions to follow the EO, review the Rule and consider adopting Justice Scalia’s interpretation of navigable waters. The agencies state that they will utilize new rulemaking to “provide greater clarity and regulatory certainty concerning the definition of ‘waters of the United States.’”
Refresher: What’s in the WOTUS Rule?
The Obama Administration’s WOTUS Rule was released in the Federal Register on June 29th, 2015, and went into effect on August 28th, 2015. According to the EPA and the Army Corps of Engineers at the time, the rule was meant to “clarify the scope of ‘waters of the United States’...protected under the Clean Water Act.” In particular, the Rule states that a number of bodies of water qualify as WOTUS, such as: “tributaries to interstate waters, waters adjacent to interstate waters, waters adjacent to tributaries of interstate waters, and other waters that have a significant nexus to interstate waters.” The Rule elaborates on the definition of “tributaries,” which are WOTUS if they flow “to a traditional navigable water, an interstate water, or the territorial seas,” regardless of whether the flow is year-round, seasonal, or due to precipitation. Tributaries flowing into navigable and interstate waters that have “a bed and banks,” as well as “an indicator of ordinary high water mark” qualify as WOTUS under the Rule. “Adjacent waters” means “all waters located in whole or in part within 100 feet of the ordinary high water mark” of WOTUS, as well as “all waters within the 100-year floodplain” of WOTUS. Numerous different kinds of water can be “adjacent,” such as “wetlands, ponds, lakes, oxbows,” and “impoundments.” More information about the WOTUS Rule is available here.
Tags: waters of the United States, WOTUS, WOTUS executive order
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Written by: Ellen Essman, Law Fellow, OSU Agricultural & Resource Law Program
The Parties
The Board of Trustees of the Des Moines Water Works (DMWW) brought a lawsuit against thirteen Iowa drainage districts. DMWW is the biggest water provider in Iowa, serving the largest city, Des Moines, and the surrounding area. Drainage districts were first created in Iowa in the 1800s to drain wetlands and allow for agriculture in those areas. In Iowa, the counties are in charge of drainage districts. Individual landowners can tile their land so that it drains water to the ditches, pipes, etc. that make up the counties’ drainage districts. Eventually, that water ends up in Iowa’s rivers. The thirteen drainage districts being sued by DMWW are located in the Raccoon River watershed in Buena Vista, Sac, and Calhoun counties. DMWW is located downstream from the drainage districts in question.
Background of the Lawsuit
On March 16, 2015, the Board of Trustees for the DMWW filed a complaint against the thirteen drainage districts in the U.S. District Court for the Northern District of Iowa, Western Division. DMWW alleged that the drainage districts did not act in accordance with the federal Clean Water Act (CWA) and provisions of the Iowa Code because they did not secure the applicable permits to discharge nitrates into the Raccoon River. In order to serve its customers, DMWW uses the Raccoon River as part of its water supply.
DMWW has to meet maximum contaminant levels prescribed under the federal Safe Drinking Water Act. Nitrate is a contaminant with a maximum allowable level of 10 mg/L. In its complaint, DMWW cited record levels of nitrate in water from the Raccoon River watershed in recent years. DMWW alleged that the nitrate problem is exacerbated by the “artificial subsurface drainage system infrastructure…created, managed, maintained, owned and operated by” the thirteen drainage districts. DMWW alleged that the drainage district infrastructure—“pipes, ditches, and other conduits”—are point sources. DMWW points to agriculture—row crops, livestock production, and spreading of manure, as a major source of nitrate pollution.
DMWW also cited a number of costs associated with dealing with nitrates, including the construction of facilities that remove nitrates, the operation of those facilities, and the cost associated with acquiring permits to discharge the removed waste. In their complaint, they generally asked the court to make the drainage districts reimburse them for their cleanup costs, and to make the drainage districts stop discharging pollutants without permits.
All together, DMWW filed ten counts against the drainage districts. In addition to their claim that the drainage districts had violated the CWA and similarly, Iowa’s Chapter 455B, DMWW also alleged that the continued nitrate pollution violated a number of other state and federal laws. DMWW maintained that the pollution was a public, statutory, and private nuisance, trespassing, negligence, a taking without just compensation, and a violation of due process and equal protection under the U.S. and Iowa Constitutions. Finally, DMWW sought injunctive relief from the court to enjoin the drainage districts to lessen the amount of nitrates in the water. In many of the counts, DMWW asked the court for damages to reimburse them for their costs of dealing with the pollution.
On May 22, 2015, the defendants, the thirteen drainage districts, filed their amended answer with the court. On January 11, 2016, the district court filed an order certifying questions to the Iowa Supreme Court. In other words, the district court judge submitted four questions of state law to the Iowa Supreme Court to be answered before commencing the federal trial. The idea behind this move was that the highest court in Iowa would be better equipped to answer questions of state law than the district court.
Iowa Supreme Court Decision
The Iowa Supreme Court filed its opinion containing the answers to the four state law questions on January 27, 2017. All of the questions were decided in favor of the drainage districts. The court answered two questions related to whether the drainage districts had unqualified immunity (complete protection) from the money damages and equitable remedies (actions ordered by the court to be taken or avoided in order to make amends for the harm caused) requested by DMWW. Both were answered in the affirmative—the court said that Iowa legislation and court decisions have, throughout history, given drainage districts immunity. Iowa law has long found the service drainage districts provide—draining swampy land so that it could be farmed—to be of great value to the citizens of the state. To that end, the law has been “liberally construed” to promote the actions of drainage districts. What is more, judicial precedent in the state has repeatedly found that drainage districts are not entities that can be sued for money damages because they are not corporations, and they have such a limited purpose—to drain land and provide upkeep for that drainage. The law has further prohibited receiving injunctive relief (obtaining a court order to require an action to be taken or stopped), from drainage districts. Instead, the only remedy available to those “claim[ing] that a drainage district is violating a duty imposed by an Iowa statute” is mandamus. Mandamus allows the court to compel a party to carry out actions that are required by the law. In this case, those requirements would be draining land and the upkeep of the drainage system.
The second two questions considered by the court dealt with the Iowa Constitution. The court determined whether or not DMWW could claim the constitutional protections of due process, equal protection, and takings. They also answered whether DMWW’s property interest in the water could even be “the subject of a claim under...[the] takings clause.” The court answered “no” to both questions, and therefore against DMWW. Their reasoning was that both DMWW and the drainage districts are subdivisions of state government, and based on numerous decisions in Iowa courts, “one subdivision of state government cannot sue another…under these clauses.” Additionally, the court found that “political subdivisions, as creatures of statute, cannot sue to challenge the constitutionality of state statutes.” Consequently, they reasoned that the pollution of the water and the resulting need to remove that pollution did “not amount to a constitutional violation” under Iowa law. The court also found that since the water in question was not private property, the takings claim was not valid. A takings claim only applies to when the government takes private property. What is more, the court added that regardless of its status as a public or private body, DMWW was not actually deprived of any property—they still had the ability to use the water. Therefore, the Iowa Supreme Court answered all four state law questions in the drainage districts’ favor, and against DMWW.
What’s next?
The Iowa Supreme Court found that the questions of state law favored the drainage districts, but that is not necessarily the end of this lawsuit. Now that the questions of state law are answered, the U.S. District Court for the Northern District of Iowa, Western Division, can decide the questions of federal law. If any of the numerous motions for summary judgment are not granted to the drainage districts, a trial to decide the remaining questions is set for June 26, 2017. The questions left for the district court to decide include a number of U.S. Constitutional issues.
One of these issues is whether the drainage districts’ discharge of nitrates into the water constitutes a “taking” of DMWW’s private property for a public use under the Fifth and Fourteenth Amendments. Another issue is whether the drainage districts’ state-given immunity infringes upon DMWW’s constitutional rights of due process, equal protection, and just compensation. An important federal law question that also remains to be decided is whether the drainage districts are “point sources” that require a permit to discharge pollutants under the CWA.
How will the outcome affect other states?
Either outcome in this lawsuit will have implications for the rest of the country. For example, if the district court sides with DMWW on all of the questions, it could open the floodgates to potential lawsuits against drainage districts and other similar entities around the country for polluting water. Municipal and other users of the water could assert an infringement of their constitutional rights, including taking without just compensation. Furthermore, if drainage districts are found to be “point sources,” it could mean greater costs of permitting and cleanup for drainage districts and other state drainage entities. Those costs and additional regulations could be passed onto farmers within the watershed. As a result, farmers and water suppliers around the country will closely follow the district court’s decisions on the remaining questions in the case.
All of the court documents and decisions concerning this lawsuit, as well as additional articles and blog posts on the topic can be found here. Additional reading on the subject from the Des Moines Register can be found here and here.
Update: The final rule concerning the listing of the rusty patched bumble bee as endangered was originally slated to go into effect on February 10, 2017, as is described below. On February 9, the Fish and Wildlife Service published a notice in the Federal Register explaining that they would abide by the Trump Administration’s 60-day regulatory freeze and delay the effective date until March 21, 2017. The Federal Register entry is available here.
Will the bee's ESA listing stand, and how might it affect agriculture?
Written by: Ellen Essman, Law Fellow, OSU Agricultural & Resource Law Program
On January 11, 2017, the U.S. Fish and Wildlife Service (FWS) published a final rule designating the rusty patched bumble bee (scientific name Bombus affinis) as an endangered species, the first bee in the continental U.S. to receive this status. The rule was originally slated to go into effect on February 10, 2017. If the rule is allowed to stand, it will have a number of implications for federal agencies, farmers, and other private entities.
The final rule, found in the Federal Register at 50 CFR Part 17, includes a lengthy description of the rusty patched bumble bee. The bees have black heads, and the worker bees, as well as the male bees, have a “rusty reddish patch centrally located on the abdomen,” giving them their common name. Necessities for the species include “areas that support sufficient food (nectar and pollen from diverse and abundant flowers), undisturbed nesting sites in proximity to floral resources, and overwintering sights for hibernating queens.” Additionally, the bees prefer temperate areas. The rusty patched bumble bee was found in 31 states and provinces in the 1990s. From the year 2000 and on, the bumble bee has only been found in a diminished range of 14 states and provinces. The bumble bee has been found in Ohio since 2000, but following the overall trend, at much lower rates.
Possible reversal of the rule
Since the publishing of the final rule, the Trump Administration has instituted a regulatory freeze on administrative agencies which could push back effective dates for those regulations that have not yet gone into effect by at least 60 days. In the meantime, the Congressional Review Act (CRA) may also affect the final rule. The CRA gives Congress 60 legislative days from either the date a rule is published in the Federal Register, or the date Congress receives a report on the rule, to pass a joint resolution disapproving the rule. A signature by the President is the final step required to invalidate the rule. What is more, an agency cannot submit a rule after these steps are taken that is “substantially in the same form” as the overturned rule. Historically, the CRA has not been frequently used, as success is typically only possible when a number of events align:
- There is a new presidential administration;
- Congress and the President are members of the same party;
- The previous President was a member of the opposing party; and
- The timing of rule publication or rule reporting and Congressional calendars allow for a joint resolution within the 60-day limit.
The text of the CRA is available here. With the regulatory freeze and the possible use of the CRA, it is not clear when or even if the new rule will actually go into effect.
Importance of the rusty patched bumble bee
The rusty patched bumble bee is a pollinator species, meaning they, along with other pollinators, assist with the reproduction of flowers, crops, and grasses. According to a FWS fact sheet, in the United States, the rusty patched bumble bee and other insects’ pollination is worth $3 billion annually.
The Endangered Species Act
What exactly is the process for listing a species as “endangered?” The Endangered Species Act’s (ESA) definition of an endangered species is: “any species which is in danger of extinction throughout all or a significant portion of its range.” Accordingly, the ESA allows the FWS to designate species as endangered or threatened as long as one (or more) of five factors apply:
- (A) The present or threatened destruction, modification or curtailment of its habitat or range;
- (B) Overutilization for commercial, recreational, scientific, or educational purposes;
- (C) Disease or predation;
- (D) The inadequacy of existing regulatory mechanisms; or
- (E) Other natural or manmade factors affecting its continued existence. 16 USC 1533.
In the case of the rusty patched bumble bee, the FWS found that factors (A), (C), and (E) applied. For factor (A), which concerns loss of habitat and range, the FWS cited past encroachment by residential, commercial, and agricultural development. Additionally, agriculture has contributed to the replacement of plant diversity with monocultures, which has resulted in loss of food for the bees. What is more, the range of the rusty patched bumble bee has faced an 87% reduction, as well as an 88% drop in the number of recognized populations.
Concerning factor (C), FWS pointed to a number of diseases and parasites that have afflicted the rusty patched bumble bee. Finally, for factor (E), the FWS identified more numerous hot and dry periods, pesticide and herbicide use, and reproductive issues that have contributed to the reduction of the species. Due to its findings and the factors discussed, the FWS determined that the rusty patched bumble bee is “in danger of extinction throughout its range,” and therefore designated it as endangered.
Significance of ESA listing
After a species is labeled “endangered,” what happens next? In order to facilitate recovery of a species, the ESA also calls for, to the “maximum extent prudent and determinable,” a critical habitat designation to be made for the species. The term “critical habitat” does not apply to everywhere the species is found. Instead, “critical habitat” can be certain places both inside and outside the overall “geographical area occupied by the species” that are found to be “essential” to its preservation. In the case of the rusty patched bumble bee, the FWS has not yet determined its critical habitat.
Implications for agriculture
Under the ESA, federal agencies and private entities have different responsibilities. Federal agencies generally must make sure that any action they are involved in will not do harm to an endangered species or its critical habitat. For the most part, private entities are not affected by critical habitat unless financial aid or approval is sought from a federal agency.
Even though critical habitat concerns do not explicitly apply to private entities, the ESA does contain provisions that prohibit the importing, exporting, possession, sale, delivery, transport, shipping, receiving, or carrying of an endangered species in the United States or in foreign commerce. What is more, the ESA prohibits the “taking” of endangered species within the United States or in the ocean. “Take” is defined as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect,” an endangered species, or to attempt to do so (emphasis added). It is important to note that “harm” is defined as “an act which actually kills or injures fish or wildlife…includ[ing] significant habitat modification or degradation which actually kills or injures fish or wildlife by significantly impairing essential behavior patterns, including, breeding, spawning, rearing, migrating, feeding or sheltering.” Thus, even though the designation of an endangered species and its critical habitat does not explicitly affect private entities, the definitions of “take” and “harm,” when read together, implicitly prohibit actions that are damaging to the species or its habitat. The FWS rule defining “harm” can be found here. The government can assess penalties against those who violate these provisions.
Farmers and other private entities should be aware of the designation of a species as endangered. In the case of the rusty patched bumble bee, if the rule is allowed to stand, private landowners, including farmers, would not be allowed to “take” or “harm” the bee or destroy its critical habitat. Given the important role pollinators like the rusty patched bumble bee play in making agriculture possible, we can assume that agriculture will want to protect the species. But due to the nature of this species, it will be difficult to ascertain when a farmer’s actions do “take” or “harm” a rusty patched bumble bee. The nature of the species and the future status of the rule create much uncertainty on how agriculture will address the rusty patched bumble bee going forward.
Tags: rusty patched bumble bee, endangered species act, congressional review act
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Written by: Chris Hogan, Law Fellow, OSU Agricultural & Resource Law Program
Update: On January 25, 2017, the Sixth Circuit Court of Appeals granted a motion to hold the WOTUS litigation in the Sixth Circuit in abeyance (putting an issue on hold) while the Supreme Court reviews whether the Sixth Circuit has proper jurisdiction to hear the WOTUS litigation.
The Supreme Court of the United States has accepted a petition to hear an appeal from a Waters of the United States (WOTUS) ruling from the Sixth Circuit Court of Appeals. As discussed in our February 2016 blog post (available here), the Sixth Circuit Court of Appeals ruled that it had jurisdiction to hear challenges to the Clean Water Rule (WOTUS Rule). Proposed by the U.S. EPA and the Army Corps of Engineers, the controversial WOTUS Rule attempts to expand the geographic extent of waterways considered to be “waters of the United States” that are subject to the Clean Water Act.
A background on the WOTUS Rule in the Sixth Circuit
On April 21, 2016, the Cincinnati-based Sixth Circuit Court of Appeals determined that federal courts of appeal, and not federal district courts, have proper jurisdiction to hear cases involving the WOTUS Rule. In that case, numerous states argued that federal district courts should have jurisdiction to hear WOTUS Rule cases. However, the Sixth Circuit Court of Appeals held that federal appeals courts had exclusive jurisdiction over the review of the WOTUS Rule. Now that ruling is being challenged before the Supreme Court of the United States.
Challenging the ruling by the Sixth Circuit Court of Appeals
A private manufacturing association—the National Association of Manufacturers, is bringing the case before the Supreme Court. The association previously challenged the WOTUS Rule in federal district court and in the court of appeals. The question presented to the Supreme Court by the National Association of Manufacturers is whether the Sixth Circuit incorrectly decided that the federal courts of appeal have the exclusive jurisdiction under federal law to review the WOTUS Rule. The Supreme Court could decide that the federal appeals courts do not have exclusive jurisdiction to hear cases involving the WOTUS Rule, in which case the WOTUS Rule could be challenged in federal district courts instead of only in federal courts of appeal.
Implications
The upcoming change of administration may lead to uncertainty for the future of the WOTUS Rule. The incoming Trump Administration has proposed eliminating the WOTUS Rule altogether. The U.S. EPA and U.S Army Corps of Engineers may be directed to dismantle the WOTUS Rule if the executive branch chooses to eliminate it. That would cause the question before the Supreme Court to become a moot point. The Supreme Court may not even rule on the jurisdictional issue brought by the National Association of Manufacturers, if the incoming administration eliminates the WOTUS Rule quickly.
Some legislators in Washington agree with the incoming Trump administration’s position on the WOTUS Rule. Members of the Senate introduced Senate Resolution 12 (SR 12) on January 12, 2017. SR 12 expresses the position that the U.S. Senate formally requests that the Administrator of the EPA and the Chief of Engineers of the Army Corps of Engineers eliminate the WOTUS Rule altogether. However, SR 12 has not passed in the U.S. Senate and is currently pending. While SR 12 may not force any official action to repeal the WOTUS Rule, it shows support for the incoming administration’s plans to repeal the rule. We can expect WOTUS issues to remain hotly debated in 2017 as either the executive or the judicial branch addresses the WOTUS Rule.
U.S. Senate Resolution 12 is available here. Read the Sixth Circuit’s opinion issued February 22, 2016: U.S. Dep’t of Defense & U.S. Envtl. Protection Agency Final Rule: Clean Water Rule at http://www.ca6.uscourts.gov/opinions.pdf/16a0045p-06.pdf.
Written by: Ellen Essman and Chris Hogan, Law Fellows, OSU Agricultural & Resource Law Program
Part Two
Below is the second of our two-part series regarding bills related to agriculture that failed to pass during Ohio’s 2015-2016 legislative session.
Animal Welfare
Requirements for Humane Society Agents and House Bill 45
House Bill 45 was introduced February 10, 2015 and would have amended existing law to impose additional requirements upon those people hoping to be appointed as humane society agents. A number of changes and additions would have been implemented through the passage of HB 45. The bulk of the proposed legislation concerned training for humane society agents and filing evidence of completing that training with the county recorder. HB 45 would have required county recorders to record “[p]roof of successful completion of training by humane society agents,” as well as “notices of revocation of agents’ appointment” in the official records (emphasis added). According to the bill, proof of completion of training would have had to been signed by the CEO of the organization that provided training, the chief officer of the county humane society, and either the mayor or probate judge in the county.
House Bill 45 was referred to the Local Government Committee on February 11, 2015. No further action was taken, rendering the proposed legislation dead when the 131st General Assembly ended.
To read HB 45, visit this page. The Ohio Legislative Service Commission’s analysis of HB 45 is available here.
Tethering Animals and House Bill 94
House Bill 94 was introduced March 2, 2015 and would have enacted language that would have made it illegal to negligently tether an animal outside in certain situations. The bill would have imposed time limits on tethering and a prohibition on tethering animals in certain weather conditions. Furthermore, a prohibition on tethering would have been imposed if the tethers were unsafe, under a certain length, allowed the animal to touch fences or cross property lines, or were inappropriate for the animal’s size. HB 94 also would have prohibited tethering if the surrounding area was unsanitary, or if the owner of the premises was not present. Finally, the bill would have amended the current law to include punishment for violating the proposed tethering language. The bill, however, was referred to the House Agriculture and Rural Development Committee and afterwards, no action was taken on it.
To read HB 94, visit this page. The Ohio Legislative Service Commission’s analysis of HB 94 is available here.
Animal Abusers and House Bill 177
House Bill 177 was introduced on April 28, 2015. HB 177 would have required people who either were “convicted of or pleaded guilty to” a number of animal abuse violations to submit certain information, along with a fee, to the Attorney General within 30 days of “being convicted or pleading guilty.” HB 177 also tasked the Attorney General with creating and keeping a registry of animal abuse violators.
Law enforcement officers, humane society agents, and dog wardens would have been responsible for notifying the Attorney General of animal abuse violations. Animal shelters would have been prohibited from allowing a person on the registry from adopting a dog, cat, or any animal kept in a home.
The bill was referred to the Agriculture and Rural Development Committee on May 5, 2015, where no further action was taken.
To read HB 177, visit this page.
Sale of Dogs and House Bill 573
House Bill 573 was introduced on May 17, 2016. This bill focused on the sale of dogs both from pet stores and from other entities. The bill would have added or changed a number of definitions in the Ohio Revised Code. Most notably, the law would have made it illegal for a pet store to “negligently…offer for sale” or otherwise “transfer” a dog unless it came from an animal rescue, an animal shelter, a humane society, a dog retailer, or a qualified breeder, all of which were defined elsewhere in the bill.
Additionally, according to HB 573, both dog retailers and pet stores would have been forbidden from selling or otherwise transferring a dog under a number of conditions. Under the bill, they could not have sold dogs less than eight weeks old, dogs that had not been inspected by a veterinarian, and dogs without a microchip, among other conditions. However, none of these requirements would have been applicable to a dog sold or otherwise “transferred from the premises where the dog was bred and reared.” Finally, the bill included language stating that it would preempt local laws regulating the sale of dogs. House Bill 573 was referred to the Finance Committee on May 23, 2016 and no further action was taken.
To read HB 573, visit this page. The Ohio Legislative Service Commission’s analysis of HB 573 is available here.
Natural Resources
Invasive Species and House Bill 396
House Bill 396 was introduced on November 16, 2015. This bill dealt with restricting and prohibiting certain species in Ohio. HB 396 would have added a number of definitions to the Ohio Revised Code, including a lengthy list of “prohibited species.” Species of birds, crayfish, fish, insects, and mollusks were included in the list. Additionally, “restricted species” was defined as including the quagga mussel, the zebra mussel, and their eggs. In addition, HB 396 would have given the Chief of the Division of Wildlife, with advice from Ohio Director of Agriculture, the power to designate other restricted and prohibited species subject to a number of considerations. One of these considerations would have been whether or not the species could cause severe harm to agricultural resources. The bill would have made it illegal to possess, introduce, sell, or offer to sell restricted and prohibited species.
The bill was referred to the Agricultural and Rural Development Committee on January 20, 2016 and ultimately did not leave the Committee.
To read HB 396, visit this page. The Ohio Legislative Service Commission’s analysis of HB 396 is available here.
Deer Rehabilitation and House Bill 267
House Bill 267 was introduced on June 22, 2015 and would have changed the Ohio Revised Code to allow licenses to run deer sanctuaries, permits to rehabilitate deer, and training for law enforcement. During the training, law enforcement officers were supposed to learn how to determine whether they needed to humanely euthanize injured deer or transfer them to someone permitted to rehabilitate the deer.
The bill was referred to the House Committee on Energy and Natural Resources on October 1, 2015, and was ultimately stranded there.
To read HB 267, visit this page. The Ohio Legislative Service Commission’s analysis of HB 267 is available here.
Labeling Nursery Stock and House Bill 566
House Bill 566 was introduced on May 12, 2016 and would have made it illegal for a person to “recklessly label or advertise nursery stock as beneficial to pollinators” if the nursery stock had been “treated with a systemic insecticide.” It would also have been illegal for a person to “recklessly label” stock as beneficial if the stock included the U.S. EPA warnings of “pollinator protection box[es]” and “pollinator, bee, or honey bee precautionary statement[s] in the environmental hazard section of an insecticide product label” on its packaging.
The bill was referred to the Agriculture and Rural Development Committee on November 11, 2016 and never made it any further.
To read HB 566, visit this page. The Ohio Legislative Service Commission’s analysis of HB 566 is available here.
Taxation
Adjusting Current Agricultural Use Value formulas: Senate Bill 246 and House Bill 398
During the 131st General Assembly, the Senate considered Senate Bill 246. SB 246 addressed how current agricultural use value, otherwise known as CAUV, is calculated. CAUV permits land to be valued at its agricultural value rather than the land’s market or “highest and best use” value. SB 246 was a companion bill. That means that a version of the bill was introduced in both the Ohio House and the Ohio Senate. The companion house bill to SB 246 was House Bill 398.
Both bills were intended to alter the current formula used to calculate CAUV values across Ohio. According to the Ohio Legislative Service Commission, the changes proposed by the bill would “have a uniformly downward effect on the taxable value of CAUV farmland.” Thus, the likely effect would have been a lower tax bill for farmers who are taxed on a CAUV basis.
The Senate referred its bill, SB 246, to the Senate Ways and Means Committee on December 9, 2015 and HB 398 was referred to the House Government Accountability and Oversight Committee on January 20, 2016. Neither committee acted on its bill. Therefore, neither bill was passed into law during the 131st General Assembly.
To read SB 246, visit this page. The Ohio Legislative Service Commission’s analysis of SB 246 is available here. To read HB 398, visit this page. The Ohio Legislative Service Commission’s analysis of HB 398 is available here.
Nonrefundable Tax Credits for Rural Businesses and Senate Bill 209
The 131st General Assembly considered a nonrefundable tax credit for insurance companies that invest in certain rural business growth funds. According to the Ohio Legislative Service Commission, qualifying rural business growth funds include special purpose rural businesses that contribute capital to certain kinds of businesses with substantial operations in rural areas of Ohio.
SB 209 passed in the Ohio Senate. But, the bill did not pass the Ohio House. Therefore, the bill was not passed into law during the 131st General Assembly.
To read SB 209, visit this page. The Ohio Legislative Service Commission’s analysis of SB 209 is available here.
Written by: Ellen Essman and Chris Hogan, Law Fellows, OSU Agricultural & Resource Law Program
Part One
Ohio’s 131st General Assembly came to a close in December of 2016. In Ohio, a legislative session (also known as a General Assembly) lasts for two years. A bill fails to become law if that bill was introduced during a legislative session but did not pass by the end of the session. Below is a summary of bills related to agriculture that failed to pass during Ohio’s 2015-2016 legislative session. Time will tell whether our legislators will revive and reintroduce any of these proposals in the new 2017-2018 legislative session.
Nutrient Management
Application of Fertilizer and Manure and Senate Bill 16
Nutrient management remained a topic of discussion in Ohio throughout 2015 and 2016. Most notably, in July of 2015, SB 1 passed and became law. SB 1 placed restrictions on the application of nutrients in the Lake Erie Basin. For example, SB 1 placed restrictions on the application of manure under certain weather conditions.
The 131st assembly considered a similar bill, Senate Bill 16, in February of 2015. SB 16 sought to regulate many of the issues that SB 1 now regulates. SB 16 failed to pass and did not become law. Notwithstanding SB 16’s failure to pass, nutrient management was a popular topic for the 131st General Assembly.
To read SB 16, visit this page. The Ohio Legislative Service Commission’s analysis of SB 16 is available here.
House Bill 101 and the Response to Algal Blooms
House Bill 101 was introduced on March 4, 2015. The bill would have enacted a number of sections into the Ohio Revised Code that would have addressed algal blooms in Ohio waterways. First of all, under the language of HB 101, owners or operators of public water systems in areas at risk for harmful algal blooms, together with the directors of the Ohio EPA and ODNR, would have had the ability to develop emergency plans to combat the algal blooms. Secondly, the Directors of the Ohio EPA and the Department of Natural Resources were tasked with developing and circulating an early warning system for harmful algal blooms. Thirdly, the Ohio EPA would have had the responsibility to provide training to publicly owned treatment works and public water systems relating to monitoring and testing for “harmful algae and cyanotoxins in the water.” Finally, under HB 101, the Director of the Ohio Department of Natural resources would have had to study and report on the economic and environmental impacts of Canada geese and zebra mussels on Lake Erie.
The bill was referred to the House Committee on Agriculture and Rural Development on March 4, 2015 and was never acted upon.
To read HB 101, visit this page. The Ohio Legislative Service Commission’s analysis of HB 101 is available here.
Agricultural Operation and Management Plans and Senate Bill 224
Currently, operation and management plans are a voluntary measure for Ohio farmers. In Ohio, an owner or operator of agricultural land or an animal feeding operation may implement a plan which incorporates pollution abatement practices and best management practices for the operation. But, the 131st General Assembly considered a bill which would make such plans mandatory for operators who operate farms of 50 acres or more.
The proposed bill, otherwise known as Senate Bill 224, would have required operation and management plans to include certain standards for applying fertilizer or manure. The bill also gave the Ohio Director of Agriculture authority to enforce corrective actions against farm operations and to assess civil penalties for non-compliance. However, SB 224 did not pass in the Senate and was not signed into law.
To read SB 224, visit this page. The Ohio Legislative Service Commission’s analysis of SB 224 is available here.
Business
Series LLCs and House Bill 581
Ohio permits the formation of Limited Liability Companies, otherwise known as LLCs. LLCs offer many attractive benefits for a farming operation. Namely, LLCs provide liability protection to the members or owners of that LLC.
Some LLC farming operations have become more complex in recent years. As a result, some farming operations choose to have multiple LLCs across an entire farming operation. For example, a farm operation may have one LLC which owns only farm property and a second and entirely separate LLC that owns only farm machinery. But, multiple LLCs create additional complexity which may complicate a farming operation.
One proposed solution is the series LLC. The 131st General Assembly proposed the introduction of series LLCs in House Bill 581. A series LLC would allow a single LLC to create multiple series within the LLC without the need to create an entirely new LLC for each series. Under HB 581, a LLC organized as a series LLC would be able to limit the power of managers or members in different series within the series LLC. A series LLC would also be able to place different assets and obligations into different series within the LLC.
Under HB 581, the debts and obligations of a particular series within an LLC would have been limited to that series only. But, HB 581 did not pass during the 131st General Assembly. Therefore, series LLCs remain non-existent in Ohio.
To read HB 581, visit this page. The Ohio Legislative Service Commission’s analysis of HB 581 is available here.
Food
Donation of Food and House Bill 111
House Bill 111 was introduced on March 10, 2015. This bill would have allowed food service operations to apply for a rebate from the Director of Health if they donated the food to a nonprofit organization. The rebate would have been ten cents per pound of perishable food donated. HB 111 was referred to the House Ways and Means Committee on March 16, 2015 and no further action was taken.
To read HB 111, visit this page. The Ohio Legislative Service Commission’s analysis of HB 111 is available here.
Tags: Ohio legislation, Ohio 131st General Assembly
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A landowner may immediately appeal an agency’s determination that property contains “waters of the United States” that is subject to the federal Clean Water Act, according to a decision issued today by the United States Supreme Court.
The court’s holding in Army Corps of Engineers v. Hawkes Co. centered on a decision by the U.S. Army Corps of Engineers (the Corps) that property in Minnesota owned by the Hawkes Company (Hawkes) contained wetlands that were subject to the Clean Water Act. Hawkes planned to mine peat on the property, and would have to comply with Minnesota regulations. The Corps decided that Hawkes must also comply with federal Clean Water Act regulations, based on its “jurisdictional determination” that the property contained waters of the United States because its wetlands had a “significant nexus” to the Red River of the North, located 120 miles away.
Hawkes challenged the Corps’ jurisdictional determination in federal district court. The Corps requested dismissal of the case, arguing that its jurisdictional determination was not a "final agency action" that Hawkes could appeal in court. Rather, the Corps asserted that Hawkes should apply for a Clean Water Act permit and challenge the results of the permit request if dissatisfied or should proceed without a permit and challenge the jurisdictional determination in a likely enforcement action.
The federal district court agreed with the Corps and dismissed the case. Hawkes then appealed to the Eighth Circuit Court of Appeals, which reversed the district court’s decision. The Corps requested review of the appeal by the United States Supreme Court, which accepted the case.
The Supreme Court concluded that the Corps’ jurisdictional determination is appealable according to the federal Administrative Procedures Act, which allows an aggrieved party to appeal a “final” agency action. An action is final if it determines legal consequences,“marks the consummation of the agency’s decision making process,” and when there are no adequate alternatives for relief other than judicial review. All three circumstances existed in the Hawkes case, said the Court, stating that parties should not have to await enforcement proceedings that carry the risk of criminal and civil penalties before challenging a jurisdictional determination or be forced through a lengthy and costly permitting process before being able to challenge the Corps’ jurisdictional determination.
Read the decision in Army Corps of Engineers v. Hawkes Co. here.
Tags: wetlands determination, Clean Water Act, Hawkes, waters of the United States
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A legislative proposal to address manure infrastructure costs introduced by Rep. Brian Hill (R-Zanesville) is moving once again, receiving its third hearing before the House Ways and Means Committee on Tuesday, April 26. The bill proposes a refundable personal income tax credit for livestock owners in Ohio who invest in facilities or equipment for manure storage, treatment, application, handling or transportation. Rep. Hill introduced the measure last August, but it has not been on the committee's agenda since its second hearing in February. Here are the details of the proposed legislation:
- The tax credit would apply only to taxpayers who own livestock in Ohio on the bill’s effective date and for the entire taxable year in which claiming the credit. The credit would not apply to former livestock owners, those who obtain livestock after the effective date or those who do not own livestock for the entire year in which claiming the credit.
- Eligible investments would include those made between January 1, 2005 and January 1, 2020 for any costs incurred to:
- Acquire manure handling or transportation equipment, which means any machinery, device, equipment, tool, motor vehicle, system or infrastructure improvement used primarily to move manure to or from a manure storage or treatment facility or other location, or to clean or decontaminate land or surfaces on or in which manure is deposited or stored.
- Acquire manure application equipment, which includes any machinery, device, equipment, motor vehicle or system used to apply or inject manure into or onto soil for agricultural purposes;
- Plan, design, excavate, construct or install a manure storage or treatment facility anywhere in Ohio, which includes any excavated, diked or walled structure or combination of structures designed to stabilize, hold or store manure.
- The investments made must assist the taxpayer in complying with NRCS Nutrient Management Code 590 regarding manure application anywhere in the state or complying with state laws regarding the application of manure in Lake Erie’s western basin.
- The amount of the tax credit would be 50% of the total eligible investment, and the taxpayer would be required to spread the credit amount equally over a five year period.
- If the taxpayer’s credit would exceed the income tax due, the taxpayer would be entitled to a refund of the excess amount.
- The tax commissioner would be responsible for adopting rules for the tax credit, which could require the taxpayer to substantiate the amount of the investment, identify the location of the livestock or describe how the investment helps the taxpayer comply with laws regarding manure storage and application.
Several dairy farmers, the Ohio Soybean Association and the Ohio Farm Bureau testified at the April 26 committee hearing in support of the bill, highlighting the financial strains on livestock operators who install new manure storage and separation equipment. Committee members expressed several concerns with the proposal, including the retroactivity to investments made since 2005, its application to owners of Confined Animal Feeding Operations and the Legislative Service Commission’s projected loss of tens of millions of dollars per year in state revenue due to the credit.
Read and follow HB 297 on the Ohio General Assembly website, here.
Update: On April 21, 2016, the Sixth Circuit Court of Appeals denied a request for en banc (full court) review of this decision made by agricultural groups and several states.
In a case successfully argued by Ohio’s Solicitor Eric Murphy, the Sixth Circuit Court of Appeals based in Cincinnati has determined that it has jurisdiction to hear challenges to the Clean Water Rule (WOTUS Rule) proposed by the U.S. EPA and Army Corps of Engineers. The Rule expands the geographic extent of the “waters of the United States” (WOTUS) that are subject to the Clean Water Act.
A brief background
When the agencies published the final WOTUS Rule last summer, dozens of parties and 31 states, including Ohio, filed challenges in nine federal district courts and eight federal courts of appeal. The filings raised an immediate uncertainty about whether federal district courts or federal courts of appeal have jurisdiction to review the Rule. Despite this uncertainty, the U.S. District Court for the District of North Dakota issued a temporary injunction that prevented the Rule’s application in the 13 states that were involved in that district’s litigation. Other district courts in West Virginia and Georgia declined to issue injunctions and instead ruled that they did not have jurisdiction to review the Rule. A federal panel consolidated the cases filed before the Sixth Circuit Court of Appeals, which includes the challenge by the State of Ohio. The Sixth Circuit first issued a nationwide stay of the WOTUS Rule last October before turning to the jurisdictional challenges raised by the EPA and Army Corps.
The Sixth Circuit’s fractured opinion
The decision on jurisdiction issued by the Sixth Circuit’s three judge panel is not harmonious. Judge McKeague wrote the court’s opinion and based jurisdiction on two of seven provisions in the Clean Water Act that grant appellate court jurisdiction to review EPA actions: subsection 1369 (b)(1)(E) for actions “approving or promulgating any effluent limitation or other limitation” under certain sections of the Act and subsection 1369(b)(1)(F), for actions issuing or denying National Pollutant Discharge Elimination System (NPDES) permits. Judge McKeague relies on a U.S. Supreme Court decision that interprets the “other limitations” language in 1369 (b)(1)(E) to include limitations that “indirectly” produce limitations on point source operators and permit issuing authorities. He also cites the Sixth Circuit’s earlier decision in National Cotton Council v. U.S. EPA to conclude that agency actions “issuing or denying” an NPDES permit under 1369(b)(1)(F) include actions creating “regulations governing the issues of permits” and “rules that regulate NPDES permitting procedures,” such as the WOTUS Rule.
A concurring opinion written by Judge Griffin agrees only with the requirement to follow the Sixth Circuit’s previous decision in National Cotton Council. Judge Griffin clarifies that he is bound by but does not agree with the court’s reasoning in that case, and would not otherwise accept jurisdiction under subsections 1369(b)(1)(E) or (F). In a dissenting opinion, Judge Keith agrees with the concurring opinion that neither subsection 1369(b)(1)(E) or (F) grants an appeals court jurisdiction in regards to the WOTUS Rule. Judge Keith also argues that Judge McKeague mistakenly relies upon and overly broadens the National Cotton Council decision, which he believes does not apply to the WOTUS Rule.
Implications
Despite the disagreements between the Sixth Circuit Court judges, the decision means that the nationwide stay of the WOTUS Rule remains in effect and the court will proceed to hear the circuit’s consolidated cases that challenge the WOTUS Rule. The court’s decision on jurisdiction applies only to the states within the Sixth Circuit—Ohio, Michigan, Kentucky and Tennessee. Given the range of reasoning in the Sixth Circuit’s decision, other federal courts could reach differing decisions on the question of which court has jurisdiction over the cases. If so, we can expect a request for the United States Supreme Court to review the jurisdictional issue. As we expected, the WOTUS Rule challenges will be with us for quite some time.
Read the Sixth Circuit’s opinion for In re: U.S. Dep’t of Defense & U.S. Envtl. Protection Agency Final Rule: Clean Water Rule at http://www.ca6.uscourts.gov/opinions.pdf/16a0045p-06.pdf.
Ohio's newest legislation addressing water quality concerns became effective on July 3, 2015. The new law, enacted by the Ohio legislature earlier this year as Senate Bill 1, affects Ohio agriculture with the following provisions:
1. Fertilizer application restrictions in the western basin. In the western basin of Lake Erie, a person may not apply fertilizer (defined as nitrogen or phosphorous) under these conditions:
- On snow-covered or frozen soil
- When the top two inches of soil are saturated from precipitation
- In a granular form when the local weather forecast for the application area contains greater than a 50% chance of precipitation exceeding one inch in a twelve-hour period
Exceptions—the above restrictions do not apply if the fertilizer is:
- Injected into the ground
- Incorporated within 24 hours of surface application
- Applied onto a growing crop
2. Manure application restrictions in the western basin. In the western basin of Lake Erie, a person may not surface apply manure (defined as animal excreta) under these conditions:
- On snow-covered or frozen soil
- When the top two inches of soil are saturated from precipitation
- When the local weather forecast for the application area contains greater than a 50% chance of precipitation exceeding 1/2 inch in a 24 hour period
Exceptions—the above restrictions do not apply if the manure is:
- Injected into the ground
- Incorporated within 24 hours of surface application
- Applied onto a growing crop
- Or if, in the event of an emergency, the chief of the division of soil and water resources provides written consent and the application is in accordance with NRCS practice standard code 590.
3. Exemptions for small and medium operations. Small and medium agricultural operations in the western basin, defined by number of species using the same criteria as Ohio Department of Agriculture's (ODA's) livesock environmental permitting program, may apply to the chief of the division of soil and water resources for a temporary exemption from the restrictions on manure applications.
- A medium agricultural operation may be exempt for one year, up to July 3, 2016.
- A small operation may be exempt for two years, up to July 3, 2017.
- An exempt operation will not be subject to civil penalties for violations if working toward compliance and may request technical assistance to reach compliance standards.
4. Certification requirements for any persons using manure from CAFFs anywhere in Ohio. On 50 acres or more used in agricultural production anywhere in Ohio, no person may apply manure from a concentrated animal feeding facility regulated under a permit from ODA's Division of Livestock Environmental Permitting unless:
- The person has obtain Certified Livestock Manager (CLM) certification by ODA.
- The person has been certified by ODA through Ohio's fertilizer applicator certification program.
Complying with the new law
To ensure compliance with Senate Bill 1's fertilizer and manure restrictions that are now effective in Ohio, producers should consider these questions before making an application of manure or fertilizer:
1. Will the application of fertilizer or manure occur in the western basin of Lake Erie? If so, the new restrictions may apply to the application. A map that outlines the 11 watersheds and all or parts of 25 counties that comprise the western basin is available here.
- Does the application involve a restricted nutrient? The new restrictions apply to any application that involves nitrogen, phosphorous or any type of animal manure.
- Will the restricted nutrient be injected into the ground, incorporated within 24 hours, applied onto a growing crop or made with permission of the chief of soil and water resources due to an emergency involving manure applications? If so, the application is permissible as an exception to the restrictions.
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If one of the above exceptions does not apply to the application, do weather conditions prohibit the application?
- Is the ground frozen, snow covered or saturated two inches deep or more? If so, the application is prohibited.
- Is there a greater than 50% chance that precipitation will exceed one inch in the next 12 hours for the area where the application will occur? If so, an application of granular fertilizer is prohibited.
- Is there a greater than 50% chance that precipitation will exceed one-half inch in the next 24 hours for the area where the application will occur? If so, an application of manure is prohibited.
- Refer to OSU Extension's C.O.R.N. newsletter for guidance on how to obtain important precipitation information prior to an application.
2. Is a temporary exemption from the manure restrictions available? If manure applications will be made by a "small" or "medium" animal feeding facility in the western basin, the facility may request the temporary exemption from the restrictions. Refer to ODA's explanation of what qualifies as a small or medium animal feeding facility on its website, here.
3. Is the manure or fertilizer obtained from a confined animal feeding facility regulated by ODA's Division of Livestock Environmental Permitting and to be applied on more than 50 acres of land in agricultural production anywhere in Ohio? If so, the person applying the manure or fertilizer must be certified by ODA as a Certified Livestock Manager or agricultural fertilizer applicator. A tool to search for concentrated animal feeding facilities operating under permit is available on ODA's website, here, as is information about CLM certification and the agricultural fertilizer certification program.
Non-compliance risk
ODA has authority to investigate potential violations of the new fertilizer application restrictions and the Division of Soil and Water Resources has similar authority over potential violations of manure application restrictions. The agencies may investigate upon receiving a complaint from any person or receiving any information that suggests a potential violation. If a violation has occurred or is occurring, the law grants the agencies rulemaking authority to establish penalty amounts for violations, which may not exceed $10,000 per separate violation. To date, the agencies have not yet initiated proposed rules for the penalty amounts. The agencies may not assess penalties until after providing an alleged violator opportunity for a hearing.
Due to the risk of non-compliance with the new law, producers should review insurance policies and determine whether insurance coverage exists or is available for a mishap under the new law.
Tags: fertilizer application, manure application, manure regulation, Lake Erie
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