Property

With Memorial Day behind us, the unofficial start of summer is here, and we are back to bring you another edition of the Ag Law Harvest. In this Harvest we discuss OSHA’s proposed workplace heat hazard standards, DOL’s new H-2A Farmworker rule, an interesting income tax credit in Colorado, and a proposal to limit Ohio property tax increases. 

OSHA Advances Proposed Rule to Mitigate Workplace Heat Hazards.  
The U.S. Department of Labor's Occupational Safety and Health Administration (“OSHA”) announced that it is advancing a proposed rule to mitigate workplace heat hazards, following unanimous approval from an advisory committee. The rule aims to protect workers from heat-related illnesses and fatalities, particularly in agriculture. While OSHA works to finalize the proposed rule, OSHA “continues to direct significant existing outreach and enforcement resources to educate employers and workers and hold businesses accountable for violations of the Occupational Safety and Health Act’s general duty clause, 29 U.S.C. § 654(a)(1) and other applicable regulations.” Assistant Secretary for Occupational Safety and Health Doug Parker explained that as OSHA moves through the regulatory process, “OSHA will use all of its existing tools to hold employers responsible when they fail to protect workers from known hazards such as heat. . .” Since 2022, OSHA's National Emphasis Program has conducted nearly 5,000 inspections to proactively address heat-related hazards in workplaces with high heat exposure. The agency prioritizes inspections in agricultural industries employing temporary H-2A workers, who face unique vulnerabilities. Employers are reminded that they are legally required to protect workers from heat exposure by providing cool water, breaks, shade, and acclimatization periods for new or returning workers. Training for both workers and managers on heat illness prevention is also essential.

Department of Labor Finalizes and Publishes Rule Enhancing Protections for H-2A Farmworkers. 
The U.S. Department of Labor (“DOL”) announced a final rule to strengthen protections for H-2A farmworkers. The new rule titled “Improving Protections for Workers in Temporary Agricultural Employment in the United States” includes the following provisions: 

• Adding new protections for worker self-advocacy: The final rule enhances worker advocacy by expanding anti-retaliation protections and allowing self-organization and concerted activities. Workers can decline attending employer-led meetings that discourage union participation. The rule permits workers to consult legal and other key service providers and meet them in employer-furnished housing. Additionally, workers can invite guests, including labor organizations, to their employer-provided housing.
• Clarifying “for cause” termination: The final rule clarifies that a worker is not “terminated for cause” unless the worker is terminated for failure to comply with an employer’s policies or fails to adequately perform job duties in accordance with reasonable expectations based on criteria listed in the job offer. Additionally, the rule identifies five conditions that must be met in order to ensure that disciplinary and/or termination processes are justified and reasonable: These five conditions are: (1) the worker has been informed, in a language understood by the worker, of the policy, rule, or performance expectation; (2) compliance with the policy, rule, or performance expectation is within the worker’s control; (3) the policy, rule, or performance expectation is reasonable and applied consistently to H-2A workers and workers in corresponding employment; (4) the employer undertakes a fair and objective investigation into the job performance or misconduct; and (5) the employer corrects the worker’s performance or behavior using progressive discipline. 
• Seat Belts: Any employer provided transportation must have seat belts if the vehicle was manufactured with seat belts. All passengers and the driver must be wearing seat belts before the vehicle can be driven. 
• Ensuring timely wage changes for H-2A workers:  The final rule establishes that the effective date of updated adverse effect wage rates is the date of publication in the Federal Register. 
• Passport Withholding: The final rule prohibits an employer from holding or confiscating a worker’s passport, visa, or other immigration or government identification documents. An employer may, however, hold a worker’s passport for safekeeping only if: (1) the worker voluntarily requests that the employer keep the documents safe; (2) the employer returns the documents to the worker immediately upon their request; (3) the employer did not direct the worker to submit the request; and (4) the worker states, in writing, that the three conditions listed above have been met. 

The final rule is effective on June 28, 2024. However, the DOL has made it clear that H-2A applications filed before August 28, 2024, will be subject to the current applicable federal regulations. Applications submitted on or after August 29, 2024, will be subject to the new rule. For more information, visit the DOL’s “H-2A Employer’s Guide to the Final Rule ‘Improving Protections for Workers in Temporary Agricultural Employment in the United States.’”

Colorado Establishes State Income Tax Credit for Qualified Agricultural Stewardship Practices. 
Beginning in 2026 Colorado farmers and ranchers will be able to qualify for an income tax credit for actively engaging in conversation stewardship practices. The newly enacted legislation creates three different tiers of income tax credits. 

• Tier 1: A state income tax credit equal to at least $5 and no more than $75 per acre of land covered by one qualified stewardship practice, up to a maximum of $150,000 per tax year. 
• Tier 2: A state income tax credit equal to at least $10 and no more than $100 per acre of land covered by two qualified stewardship practices, up to a maximum of $200,000 per tax year.
• Tier 3: A state income tax credit equal to at least $15 and no more than $150 per acre of land covered by at least three qualified stewardship practices, up to a maximum of $300,000 per tax year. 

However, only $3 million worth of tax credits can be issued in one tax year. Any claims for the tax credit beyond the $3 million dollars are placed on a waitlist in the order submitted and a certificate will be issued for use of the agricultural stewardship credit in the next income tax year. No more than $2 million in claims shall be placed on the waitlist in any given calendar year. Additionally, only one tax credit certificate may be issued per qualified taxpayer in a calendar year, and the taxpayer can only claim the credit for up to three income tax years. 

Ohio House of Representatives Proposes Joint Resolution to Limit Property Tax Increases for Ohio Property Owners. 
The Ohio House of Representatives have proposed to enact a new section in Article I of Ohio’s Constitution. Section 23 would limit property tax increases on Ohioans. Under the proposed change, the amount of real property taxes levied on a parcel of property cannot exceed the amount of tax levied on that parcel in the preceding year plus the rate of inflation or four percent, whichever is lower. There are some exceptions that allow a one-time increase in property tax liability in excess of the four percent limit. The exceptions include: (1) when a parcel is divided; (2) the expiration of a tax exemption, abatement, or credit that applied to the parcel in the preceding year; or (3) when a building is completed or significantly improved and is added to the tax list on the parcel. We will continue to closely monitor how the proposed resolution fares in committee and beyond. If the resolution passes both chambers of the Ohio Legislature, the proposed change would be voted on in the November 5, 2024, election.  

The Ohio General Assembly is back in Columbus after the March 19^th primary election, and committee schedules are already filling up. Given the increased activity in recent weeks, we thought it was a good time to examine what has happened legislatively this year up until this point.

H.B. 64—Eminent Domain. This bill was first introduced by Representatives Kick (R-Loudonville) and Creech (R-West Alexandria) in February of 2023. The bill’s purpose is to make it more difficult for governmental agencies or private entities to take private property through eminent domain. On February 6, 2024, the bill was updated with a Substitute House Bill 64 in the House Civil Justice Committee.

The previous version of the bill excluded recreational trails from the definition of “public use,” meaning that property could not be taken by a government agency for recreational trails. The current version of the bill narrows this language, allowing for a taking for the purpose of creating recreational trails, but not in cases where the property is not adjacent to a public road and where the property’s primary use will be for a recreational trail.

Another substantial change between the versions involves compensation offers from the government entity to the landowner. In the original version of the bill, a government entity would not have been allowed to reduce an offer made to purchase property before proceedings commenced if the reduction was based on hard-to-discover issues with the property. The current version would exclude this provision, restoring an agency’s authority to reduce offers.

Substitute House Bill 64 would also make changes to compensation and awards landowners could receive if the issue goes to court.

H.B. 197—Solar Development. Sponsored by Representatives Hoops (R-Napoleon) and Ray (R-Wadsworth), H.B. 197 would establish a the community solar pilot program and the solar development program. Under the language of the bill, a “community solar facility” is defined as a single facility with at least three subscribers and a nameplate capacity of 10 megawatts or less, or 20 megawatts or less if on a distressed site. Furthermore, the bill would require The Public Utilities Commission of Ohio (PUCO) to establish a Community Solar Pilot Program of 250 megawatts on sites in the Appalachian region of the state. The bill would also amend the state competitive retail electric service policy to encourage community solar facilities in the state and allow subscribers to community solar facilities to receive monthly electric bill offsets.

H.B. 324—Motor Fuel. Introduced by Representatives McClain (R-Upper Sandusky) and Klopfenstein (R-Haviland) in November of 2023, H.B. 324 passed the House on February 7, 2024 and was referred to the Senate Ways and Means Committee on February 27. 

If passed, the bill would authorize a temporary, nonrefundable income or CAT tax credit of 5 cents per gallon for retail dealers who sell high-ethanol blend motor fuel containing between 15-85% ethanol. The tax credit would be limited to five years or to a total of $10 million, whichever occurs first.

H.B. 327—Employee Verification. H.B. 327, introduced by Representatives Wiggam (R-Wayne County), and Swearingen (R-Huron), had its first committee hearing in House Commerce & Labor on February 13, 2024. The bill would require political subdivisions, private employers employing 75 individuals within the state of Ohio, and nonresidential construction contractors to verify each new employee’s work eligibility through the federal E-verify program. E-Verify is an online program that helps employers verify employees’ eligibility for employment. If the bill were to pass, the employer would be required to keep a record of the verification for the duration of the employee’s employment, or three years, whichever is longer. During testimony on the bill, Representatives Wiggam and Swearingen indicated an interest in possibly lowering the employee threshold, citing Florida’s 25 employee threshold.

H.B. 347—Farming Equipment Taxes. This bill was introduced by Representative Don Jones (R-Freeport) and referred to the House Ways and Means Committee in early December of 2023. Since then, the bill has been heard in committee twice, once in January, and once in February, both times without testimony. The bill would change the way farmers claim a tax exemption on certain purchases.

Currently, when an Ohioan engaged in farming, agriculture, horticulture, or floriculture is buying a product for “agricultural use,” they must provide the seller with an exemption certificate. This certificate comes from the Ohio Department of Taxation and relieves the seller of the obligation to collect the sales tax on behalf of the state. However, the Department of Taxation can later determine that the purchase does not qualify for exemption, and then the farmer would be expected to pay the tax.

H.B. 347 would slightly alter this current way of doing things when it comes to the purchase of certain vehicles and trailers. Under the bill, the purchaser could receive an agricultural use exemption for taxes on these vehicles if the purchaser shows the seller copies of the purchaser’s Schedule F—the federal income tax profit of loss from farming form—for three most recent preceding years. Alternatively, a farmer could obtain a certificate from the Department of Taxation verifying that they have filed a Schedule F for three years in lieu of providing the forms directly to the seller. Notably, the bill states that “no other documentation or explanation shall be required by the vendor or the tax commissioner” to prove that the purchase qualifies for the agricultural use exemption.

The following vehicles and trailers would be included under the bill:

• Trailers, excluding watercraft trailers;
• Utility vehicles, (vehicles with a bed, principally for the purpose of transporting material or cargo in connection with construction, agricultural, forestry, grounds maintenance, land and garden, materials handling, or similar activities);
• All-purpose vehicles, (vehicles designed primarily for cross-country travel on land and water, or on multiple types of terrain, but excluding golf carts);
• Compact tractors (garden tractors, small utility tractors, and riding mowers).

H.B. 364—Seed Labeling; Noxious Weeds. Sponsored by Representatives Dobos (R-Columbus), and Klopfenstein (R-Haviland), H.B. 364 had its first hearing in the House Agriculture Committee on February 6, 2024.  Specifically, the bill would allow the Ohio Prairie Association and other noncommercial entities sharing seeds to distribute milkweed seeds non-commercially to i members, with the intent of promoting habitats for pollinators like monarch butterflies.

The bill would legally define “non-commercial seed sharing” as the distribution or transfer of ownership of seeds with no compensation or remuneration. Also included in the definition are a list of situations that are not considered “non-commercial seed sharing,” including when:

• The seeds are given as compensation of work or services rendered;

• The seeds are collected outside of Ohio;
• The seeds are patented, treated, or contain noxious weed species or invasive plants.

H.B. 364 also includes a definition of “seed library,” which it defines as a non-profit, governmental, or cooperative organization or association to which both of the following apply:

• It is established for the purpose of facilitating the donation, exchange, preservation, and dissemination of seeds among the seed library’s members or the general public.

• The use, exchange, transfer, or possession of seeds acquired by or from the non-profit governmental, or cooperative organization or association are obtained free of charge.

The bill would further exempt non-commercial seed sharers and seed libraries from labeling, advertising, handling, and sales restrictions under Ohio law.

To further the goal of promoting pollinators and habitats, H.B. 364 would make changes to the requirements for maintaining toll roads, railroads, or electric railways. Current law requires managers of such thoroughfares to destroy a number of noxious weeds along the roadway or in right of ways. The bill would no longer require the destruction of Russian thistle, Canadian thistle, common thistle, wild lettuce, wild mustard, wild parsnip, ragweed, milkweed, or ironweed. 

H.B. 447—Property Tax. Introduced on March 12, 2024 by Representative Loychik (R-Cortland), H.B. 447 was referred to the House Ways & Means Committee on April 2, 2024. The bill would modify and expand property tax homestead exemptions, gradually reduce school districts’ 20-mill floor for tax levies and modify the formula for determining farmland’s current agricultural use value (CAUV). The change to CAUV would involve the calculation of the overall capitalization rate for agricultural land.  Current law does not establish a minimum rate, but the bill would do so by stating that overall capitalization rate plus additur shall not be less than 10 percent.  Since a higher capitalization rate results in a lower CAUV value and because the current capitalization rate is around 8%, the change would likely lower CAUV values.

S.B. 156—Scenic Rivers. This bill, sponsored by Senators Reineke (R-Tiffin) and Hackett (R-London) passed the Ohio Senate on January 24, 2024, and was referred in the House to the Energy and Natural Resources Committee on February 6, 2024. The bill would transfer the Wild, Scenic, and Recreational Rivers Program from the Division of Parks and Watercraft to the Division of Natural Areas and Preserves (DNAP) in ODNR. The bill would narrow the scope DNAP’s authority to watercourses designated as wild, scenic, and recreational rivers. Currently, the law is written so that the regulatory agency has authority over areas. “Areas” encompass not just the water, but also the land surrounding rivers. On the other hand, “watercourses” are defined as “substantially natural channel[s] that [are] at least five miles in length with recognized banks and a bottom in which the flow or water occurs.” Thus, agency oversight would be diminished from the river and its surrounding area to just confines of the river itself.

The bill also clarifies that a watercourse designation does not affect private property rights adjacent to a designated river.

Finally, the bill would require DNAP to adopt rules for the use, visitation, and protection of scenic river lands and provide for the establishment of facilities and improvements that are necessary for their visitation, use, restoration, and protection, but do not impair their natural character.

S.B. 226—Agricultural Land. S.B. 226 was introduced by Senator Terry Johnson (R-McDermott) in late February and referred to the Veterans & Public Safety Committee on February 27, 2024. The bill would create the Ohio Property Protection Act, which would include protection of:

• Agricultural land, defined as “land suitable for use in agriculture,” including the water on the land, airspace above the land, and natural products and products from the land;
• Any land located within a twenty-five-mile radius of any installation under the jurisdiction of the United States Armed Forces;
• Any land located within a twenty-five radius of a critical infrastructure facility.

To protect property in the above categories, the bill would make it illegal for the following people and entities to acquire or purchase such property:

• Those persons and foreign adversaries listed on a registry compiled by the Ohio Secretary of State;
• A government of a foreign adversary;
• An individual who is a citizen of a foreign adversary;
• A business that is headquartered in a foreign adversary;
• A business that is directly or indirectly owned or controlled by one or more of the above persons and entities; and
• An agent, fiduciary, or trustee of the above persons and entities.

Co-authored with Wayne Dellinger, Extension Educator in Union County and member of the OSU Ag Safety Team.

The upcoming solar eclipse on April 8 is a rare event that could bring a half-million people into the 124-mile eclipse path across Ohio, according to the Ohio Emergency Management Agency.  For months, we’ve been hearing about eclipse issues ranging from eye safety to best viewing locations.  But for farmers and farmland owners within the eclipse viewing area, the solar eclipse raises unique issues and concerns. Should we take steps to secure the farm?   Will it delay our farming activities?  What if we have trespassers or want to invite people to the farm to view the eclipse? 

With the eclipse quickly approaching, now is the time to address the safety and legal questions it creates for the agricultural community.  To provide guidance on these questions, our Agricultural & Resource Law Program partnered with the OSU Ag Safety Team. We offer these five steps farmers and farmland owners can take now to prepare for the solar eclipse:

1. Secure the farm property. 
2. Understand trespass laws.
3. Know responsibilities for invited guests.
4. Plan ahead for farming activities.
5. Be prepared to react to an incident.

For each step, we provide explanations of the concerns and issues that might arise, any laws that apply, and actions farmers and farmland owners can take to reduce their safety and legal concerns.  Read the entire article at https://farmoffice.osu.edu/solar-eclipse-2024.

A federal court decision last week vacated the registrations of dicamba products XtendiMax, Engenia, and Tavium for over-the-top applications on soybean and cotton crops, making the use of the products unlawful (see our February 12, 2024 blog post).  The decision raised immediate questions about whether the U.S. EPA would exercise its authority to allow producers and retailers to use "existing stocks" of dicamba products they had already purchased.  Yesterday, the U.S. EPA answered those questions by issuing an Existing Stocks Order that allows the sale and use of existing stocks of the products that were packaged, labeled, and released for shipment prior to the federal court decision on February 6, 2024.  For Ohio, the EPA's order allows the sale and distribution of existing stocks until May 31, 2024 and the use of existing stocks until June 30, 2024.

Here is the EPA's order:

1. Pursuant to FIFRA Section 6(a)(1), EPA hereby issues an existing stocks order for XtendiMax® with VaporGrip® Technology (EPA Reg. No. 264-1210), Engenia® Herbicide (EPA Reg. No. 7969-472), and A21472 Plus VaporGrip® Technology (Tavium® Plus VaporGrip® Technology) (EPA Reg. No. 100-1623). This order will remain in effect unless or until subsequent action is taken. The issuance of this order did not follow a public hearing. This is a final agency action, judicially reviewable under FIFRA § 16(a) (7 U.S.C. §136n). Any sale, distribution, or use of existing stocks of these products inconsistent with this order is prohibited.
2. Existing Stocks. For purposes of this order, “existing stocks” means those stocks of previously registered pesticide products that are currently in the United States and were packaged, labeled, and released for shipment prior to February 6, 2024 (the effective date of the District of Arizona’s vacatur of the dicamba registrations). Pursuant to FIFRA section 6(a)(1), this order includes the following existing stocks provisions:

a.  Sale or Distribution by the Registrants. As of February 6, 2024, sale or distribution by the registrants of these products is prohibited, except for the
purposes of proper disposal or to facilitate lawful export.
b.  Sale or Distribution by Persons other than the Registrants. Persons other than the registrants, including but not limited to co-ops and commercial distributors, who are already in possession of these products as of February 6, 2024, may sell or distribute these products until the end date for sale and distribution of existing stocks identified in Table 1; except that such persons may distribute these products after the date identified in Table 1 solely for purposes of proper disposal, lawful export, or to facilitate return to the manufacturer.
c.  Distribution or Sale by Commercial Applicators. Notwithstanding paragraph 2.b, for the purpose of facilitating use no later than the relevant end date for use of existing stocks identified in Table 1, distribution or sale of existing stocks of these dicamba products that are in the possession of commercial applicators is permitted
until the relevant end date for use in Table 1.
d.  Use of Existing Stocks. As of the date of this order, use of XtendiMax, Engenia, and Tavium is permitted until the relevant date identified in Table 1, provided that such use of existing stocks is consistent in all respects with the previously approved labeling accompanying the product.

What happens next? 

The Existing Stocks Order addresses dicamba over-the-top applications for the current growing season, but it's not the end of the dicamba controversy.  One potential next step could come from the petitioners in the federal case that vacated the dicamba product registrations, Center for Biological Diversity v. EPA.  The petitioners could file a motion asking the Court to review the Existing Stocks Order--an action that took place in the previous dicamba cancellation case, National Family Farm Coaltion v. EPA (Monsanto).  The petitioners in that case unsuccessfully sought an Emergency Motion to enforce the vacatur and hold the EPA Administrator in contempt for issuing an Existing Stocks Order.  A second next step that may yet play out is an appeal of the recent federal decision by the EPA, which has 30 days from the February 6 decision date to file an appeal.  At least one thing is clear at this point:  the long-term future of dicamba over-the-top products will continue to exist in a state of uncertainty.

Read the full text of the EPA's Existing Stocks Order.