Written by: Evin Bachelor, Law Fellow, and Ellen Essman, Sr. Research Associate
We’re back from the American Agricultural Law Association’s 2018 symposium, which was held in Portland, Oregon this year. We had the chance to hear from lawyers and experts from across the nation on various legal issues facing agriculture. Stay tuned to the Ag Law Blog for an update on what we learned at the symposium, but first, here’s the latest in agricultural law news:
Vote to designate watersheds in distress tabled by Ohio Soil and Water Conservation Commission. As recently reported in the Ag Law Blog, the Ohio Soil and Water Conservation Commission held a meeting this week to discuss whether to designate certain sub-watersheds in the Western Lake Erie Basin as “in distress.” Such designation would trigger additional management and reporting requirements on farmers in affected watersheds. The Commission voted 4-3 to table the discussion and wait for the Joint Committee on Agency Rule Review (JCARR) to examine the Ohio Department of Agriculture’s proposed rule changes next month. This week’s vote maintains the status quo without extending the “in distress” designation to other watersheds.
FDA releases two FSMA draft guidance documents. The Food and Drug Administration recently released draft guidance documents explaining how to follow rules under the Food Safety Modernization Act (FSMA). One document, titled “Guide to Minimize Food Safety Hazards of Fresh-cut Produce,” provides guidance on how to follow the Preventive Controls Rule under FSMA. “Fresh-cut produce,” is defined as “any fresh fruit or vegetable or combination thereof that has been physically altered from its whole state after being harvested from the field without additional processing.” The guidance would affect manufacturers, processors, packers, and holders of fresh-cut produce. The document covers current good manufacturing practices, as well as “new requirements for hazard analysis and risk-based preventive controls.” The draft guidance document, in addition to information on how to submit a comment on the guidance, is available here.
The second draft guidance document is titled “Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption: Guidance for Industry.” This document provides guidance on how to follow FSMA’s Produce Safety Rule. The guidance would affect produce farms. The guidance covers personnel qualifications and training, health and hygiene practices, biological soil amendments, contamination from domesticated and wild animals, suggestions for practices during the growing, harvesting, packing, and holding of produce, sanitation of equipment, recordkeeping on produce farms, and other topics. According to a press release about the two guidance documents, FDA will be holding a series of four public meetings at various places around the U.S. to discuss the second draft guidance document with those affected. FDA will be announcing the details about the meetings in the Federal Register soon.
It is important to remember that these are draft guidance documents. Furthermore, guidance documents are just that—guidance. In other words, the documents are there as suggestions on how to follow rules, and “do not establish legally enforceable responsibilities.”
EPA renews dicamba registration for cotton and soybeans, and updates labels. On October 31, 2018, the United States Environmental Protection Agency (EPA) shared its decision on changes to applying dicamba, the much discussed herbicide. EPA renewed the herbicide’s registration until December 20, 2020 for application to growing (what EPA terms “over-the-top”) dicamba-resistant cotton and soybean plants.
Below is EPA’s list of label alterations to dicamba products for the 2019-2020 growing season:
- Two-year registration (until December 20, 2020)
- Only certified applicators may apply dicamba over the top (those working under the supervision of a certified applicator may no longer make applications)
- Prohibit over-the-top application of dicamba on soybeans 45 days after planting and cotton 60 days after planting
- For cotton, limit the number of over-the-top applications from 4 to 2 (soybeans remain at 2 OTT applications)
- Applications will be allowed only from 1 hour after sunrise to 2 hours before sunset
- In counties where endangered species may exist, the downwind buffer will remain at 110 feet and there will be a new 57-foot buffer around the other sides of the field (the 110-foot downwind buffer applies to all applications, not just in counties where endangered species may exist)
- Clarify training period for 2019 and beyond, ensuring consistency across all three products (Xtendimax with Vapor Grip Technology, Engenia Herbicide, DuPont FeXapan Herbicide)
- Enhanced tank clean out instructions for the entire system
- Enhanced label to improve applicator awareness on the impact of low pH’s on the potential volatility of dicamba
- Label clean up and consistency to improve compliance and enforceability
Judge reduces jury verdict against Bayer’s Monsanto. As we predicted in a previous edition of The Harvest, Bayer’s Monsanto quickly challenged a quarter billion dollar verdict granted by a San Francisco jury to a plaintiff who alleged that Monsanto’s Roundup weed killer caused his cancer. Monsanto asked the judge to reconsider the jury’s verdict, and on Monday, October 22nd, the judge reduced the punitive damages portion of the jury verdict from $250 million to $39.25 million. The judge accepted the jury’s finding that Monsanto acted with malice, but said that the evidence did not justify a quarter billion dollar award. The judge did uphold the $39.25 million compensatory damages verdict. In total, the plaintiff would receive a $78.5 million award. Just this week, the plaintiff accepted the reduction in the award, saying that he will not ask the judge to reconsider the decision on damages. However, the litigation seems likely to continue, so stay tuned to the Ag Law Blog for more updates about the glyphosate and Roundup lawsuits.
Blockchain: the future of information sharing? We keep hearing about Blockchain technology, but what is it? Blockchain is a digital system that allows users to securely transfer information and money without an intermediary to facilitate the transfer. The transfers are recorded and timestamped, and the information contained in the “blocks” cannot be modified without the agreement of a majority of network users. The system is decentralized in nature, meaning that the information is not stored in one location but is rather is stored on servers across the globe. This makes the system more secure and less prone to modification because no single user can control the blockchain. Its early uses were for digital cryptocurrencies like Bitcoin, but its uses have expanded into information. The system has a potential in almost every sector of the economy, agriculture included. For example, Walmart announced plans to utilize blockchain to quickly track products like produce all the way from the ground to the consumer. By tracking information on foods like produce, companies like Walmart hope to be able to quickly determine sources of contamination in its food supply. This would not only be a way to save lives, but to also not have to waste produce that was not contaminated. For more information on Blockchain, here is a webinar from the National Agricultural Law Center that goes more in depth on what blockchain is, how it works, and how it can be utilized to help agriculture.
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 is 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 use an IARC finding for listing determinations, but Monsanto argued that such reliance 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. Monsanto Company v. Office of Environmental Health Hazard Assessment et al, F075362, 231 Cal.Rptr.3d 537 (Cal. Ct. App. April 19, 2018) is here.
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.
The American Agricultural Law Association held its national conference last week in Louisville, Kentucky, and two Ohio law students from OSU Moritz College of Law and Capital University Law School took top honors in the student competitions. Evin Bachelor and Devon Alexander joined forces with U. of Houston law student Sara Luther and finished first in the Student Quiz Bowl competition. The Quiz Bowl requires law students to correctly answer questions about law, agriculture and agricultural law.
Bachelor also entered and won first place in the Student Poster Competition with his research project titled "Ohio: The Midwestern Ag Mediation Holdout." Bachelor discussed the potential for Ohio to become one of the last midwestern states to engage in USDA's Agricultural Mediation Program. Bachelor is a third year law student at OSU's Moritz College of Law and Alexander is a second year law student at Capital University Law School. Both hope to work in the agricultural law arena after law school.
OSU was able to send the students to the conference due to the generous support of the Paul L. Wright Endowment in Agricultural Law at OSU.
For more information about the American Agricultural Law Association, visit https://www.aglaw-assn.org/.
The United States Department of Agriculture (USDA) wants to hear from you. The agency published its “Identifying Regulatory Reform Initiatives” notice in the Federal Register on July 17 seeking “ideas from the public on how we can provide better customer service and remove unintended barriers to participation in our programs in ways that least interfere with our customers and allow us to accomplish our mission.”
The notice derives from the Regulatory Reform Task Force established by President Trump’s February 24, 2017 Executive Order 13777 on "Enforcing the Regulatory Reform Agenda". order requires the heads of federal agencies to evaluate existing regulations and make recommendations to repeal, replace or modify regulations that create unnecessary burdens.
Specifically, the USDA invites the public to evaluate the agency’s existing regulations. The agency poses several questions and encourages commenters to respond in detail to the questions:
- Are there any regulations that should be repealed, replaced or modified?
- For each regulation identified in question one, identify whether the regulation:
- Results in the elimination of jobs, or inhibits job creation;
- Is outdated, unnecessary, or ineffective;
- Imposes costs that exceed benefits;
- Creates a serious inconsistency or otherwise interferes with regulatory reform initiatives and policies;
- Is inconsistent with requirements that agencies maximize the quality, objectivity, and integrity of the information they disseminate;
- Derives from or implements previous presidential directives that have been rescinded or substantially modified.
The comment process offers the agricultural community an opportunity to draw attention to USDA regulations that create unnecessary or unintended negative impacts on agriculture. Considering the wide range of programs and regulations administered by the USDA in areas such as crop and livestock insurance; Farm Service Agency programs; commodity standards, grading and inspections; animal and plant health; and agricultural exports, it’s likely that agricultural producers will have thoughts to share with the agency. To that end, USDA will accept comments for the next year, but will review the comments in four phases. The deadline for the first review is September 15, 2017.
To read the agency’s notice and instructions for submitting comments on regulatory reform, visit this link.
Farmers are receiving a lot of attention from law firms these days, from video mailers to offers of free consultations, dinners, hats and more. The purpose of these marketing efforts is to entice farmers away from participating in the current class action lawsuit against Syngenta. Law firms want farmers to exclude themselves from the class action litigation and participate in individual lawsuits their firms would bring against Syngenta. With a deadline of April 1 looming, farmers must decide whether to remain in or step away from the class action lawsuit.
The class action lawsuit, known as “In re Syngenta AG MIR162 Corn Litigation,” is pending before the U.S. District Court in Kansas. It is one of two major lawsuits regarding corn rejected by China in 2013 because China had not yet approved Syngenta’s Duracade and Viptera brands of genetically-modified corn. The lawsuit consolidated hundreds of similar federal court cases that all claimed that Syngenta should be liable for the drop in corn prices that followed China’s rejections because Syngenta stated that it had obtained all necessary regulatory approvals for Duracade and Viptera, but instead released the seed before receiving China’s approval.
Last September, the court certified the litigation as a class action lawsuit, which allows the case to commence on behalf of all class members. Any farmer that fits within the class definitions is automatically included in the lawsuit and does not have to pursue individual litigation against Syngenta. The court established a nationwide class of “producers,” defined as any person or entity listed as a producer on an FSA-578 form filed with the USDA who priced corn for sale after November 18, 2013 and who did not purchase Viptera or Duracade corn seed (farmers who used Syngenta’s seed have different legal claims). The nationwide class is for producers bringing claims under federal law. The court also certified eight state classes for producers bringing claims under state laws, including Ohio. Syngenta appealed the class certification, but the Tenth District Court of Appeals denied the appeal.
Ohio farmers who fit the definition of “producers” are now automatically members of both the nationwide and Ohio classes. This means that every Ohio producer can receive a share of any award or settlement that results from the litigation, with required documentation. However, Ohio producers may choose to exclude themselves from or “opt out” of their classes and bring their own individual actions against Syngenta. The district court required attorneys for the class action suit to notify all potential producers of the lawsuit and of a producer’s right to be excluded from the litigation. A producer must send an exclusion request by April 1, 2017, following the process for exclusion stated in the court’s order, available here.
Pros and Cons of Staying in the Class
A major benefit of remaining in the class action lawsuit is convenience. Class members in the lawsuit have no responsibility for the proceedings, which falls upon the attorneys who represent the entire class. However, convenience comes at the cost of deferring decision making authority and losing a share of the award or settlement to court-ordered attorney fees, although class members may file objections to such decisions. Exclusion from the class gives producers freedom to pursue their own actions, which will likely lead to a stronger role in decision making and the ability to negotiate attorney fees. Exclusion also allows a farmer who may not agree with the litigation on principal to dissociate from the lawsuit.
The court has scheduled “bellwether” cases in the lawsuit, which will go to trial in June. Bellwether cases are chosen to be representative of the class. Allowing these cases to go to trial gives an indication of how the litigation will play out—the strength of each side, how juries react and how the law applies to the situation. Upon completion of the bellwether cases, both sides should be better able to decide whether to settle the lawsuit or continue with litigation.
The U.S. District Court’s website for the Syngenta class action lawsuit is http://www.ksd.uscourts.gov/syngenta-ag-mir162-corn-litigation/
Senate President Larry Obhof and Speaker of the House Cliff Rosenberger have made committee assignments for the new session of Ohio’s 132nd General Assembly. While there are no major changes to committee structure or leadership, the committees contain many new members, including several legislators serving their first terms as legislators.
Sen. Cliff Hite (R-Findlay) will again chair the Senate’s Agriculture Committee, with newly elected Sen. Frank Hoagland (R-Mingo Junction) serving as vice chair and first Senate termer Sen. Sean O’Brien (D-Bazetta) appointed as the ranking minority member. O’Brien previously served three terms in the House of Representatives, which included a term on its Agriculture and Rural Development Committee.
- Returning from last session’s Agriculture Committee are Senators Bill Beagle (R-Tipp City), Bob Peterson (R-Washington Court House) and Michael Skindell (D-Lakewood).
- New to the committee are Senators Bob Hackett (R-London), previous House member Stephanie Kunze (R-Hilliard), Frank Larose (R-Hudson), Charleta Tavares (D-Columbus) and Joe Uecker (R-Miami Township).
Rep. Brian Hill (R-Zanesville) will again lead the House Agriculture and Rural Development Committee with Rep. Kyle Koehler (R-Springfield) serving as vice chair for the first time and Rep. John Patterson (D-Jefferson) returning as the ranking minority member.
- Representatives Jack Cera (D-Bellaire), Christina Hagan (R-Marlboro Township), Michael O’Brien (D-Warren), Bill Patmon (D-Cleveland), Jeff Rezabek (R-Clayton), Michael Sheehy (D-Toledo) and Andy Thompson (R-Marietta) will return to the committee.
- New to both the House of Representatives and the committee are Representatives Rick Carfagna (R-Genoa Township), Jay Edwards (R-Nelsonville), Darrell Kick (R-Loudonville), Scott Lipps (R-Franklin) and Dick Stein (R-Norwalk).
- New to the committee are Representatives Candice Keller (R-Middletown), David Leland (R-Columbus) and Derek Merrin (R-Monclova Township), along with Former Senate President Keith Faber (R-Celina).
Neither committee has a meeting scheduled at this time. Follow the committees' work in the new legislative session at https://www.legislature.ohio.gov/.
Written by: Ellen Essman and Chris Hogan, Law Fellows, OSU Agricultural & Resource Law Program
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.
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.
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.
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.
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.
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.
The Ohio General Assembly has enacted a law that raises the monetary limit for cases handled through Ohio's small claims court system. The new maximum amount of $6,000 for a small claims case will replace the current limit of $3,000 when House Bill 387 becomes effective in late September. Under the new law, a defendant in the case may also file a counterclaim for up to $6,000. Governor Kasich signed the bill on June 28, 2016.
Ohio law requires every county and municipal court in Ohio to establish a small claims division to handle minor disputes involving only the recovery of money. A small claims court cannot hear cases for slander, libel, malicious prosecution, abuse of process, return of personal property, punitive damages or other cases seeking remedies other than money. A person may file a small claims complaint and present the case in court without the assistance of an attorney, but may have legal representation if desired. The court may appoint a magistrate, who must be an attorney, to oversee the case and render a decision. The court also has the authority to enforce a monetary judgment against a party. Because small claims cases tend to be simple, they are resolved in less time and with less expense than cases heard by other courts.
The increased monetary limit for small claims cases will allow farmers and agribusinesses to address more disputes quickly and without the expense of an attorney. Operators and landowners owed money for products or services in excess of the current $3,000 small claims maximum often express frustration that it could be too costly and time consuming to address the matter through municipal or county courts. The new higher limit of $6,000 should capture many of these cases and offer an opportunity to recover such losses through the small claims process. According to the bill's sponsor, Rep. Lou Terhar (R-Cincinnati), the change will "bring Ohio in line with surrounding states and make Ohio a better place to do business and generate jobs."
Governor Kasich has signed legislation to create a new “Ohio Farm Winery Liquor Permit.” While wine makers in Ohio may currently obtain a general liquor permit to make and sell wine on a farm, the general permit does not distinguish the source of the wine. The new Ohio Farm Winery Permit legally designates the wine as being made from grapes grown on the wine maker’s farm. Sponsors and supporters of the legislation claim that the special designation will help consumers know a wine’s localized nature, bring recognition to Ohio’s wine growing regions, keep Ohio competitive with other states that designate farm-produced wines, and ensure that farm wineries continue to receive property tax treatment as agricultural operations. Wineries that qualify for the new permit would "be able to present themselves as true farming operations," according to sponsor Ron Young (R-Leroy Township).
Ohio’s Division of Liquor Control may issue an Ohio Farm Winery Permit only to wine makers who meet two requirements: the manufacturer produces wine from grapes, fruit or other agricultural products grown on the manufacturer’s property, and the property qualifies as “land devoted exclusively to agricultural use” under Ohio’s Current Agricultural Use Valuation (CAUV) program, which requires that the land be used for commercial agricultural production and be at least 10 acres in size or, if less than 10 acres, generates a minimum average of $2500 in gross income.
Under the new law, an Ohio Farm Winery Permit holder may sell its wine products for consumption on the premises where manufactured, for consumption off the premises in sealed containers, or to a wholesale permit holder. An Ohio Farm Winery Permit holder may also manufacture, purchase and import brandy for fortifying wine and may import and purchase wine for blending purposes, but the total amount of wine used for blending cannot exceed 40% of all wine manufactured by the wine maker.
H.B. 342, which will be effective in late September, is available here.
Update: For a full explanation of the rule, refer to our new Law Bulletin, The New FAA Rule for Using Drones on the Farm
Part 1: Drone Pilots Must Obtain FAA Certification
The Federal Aviation Administration (FAA) yesterday filed its final rule in the Federal Register for the Operation and Certification of Small Unmanned Aircraft Systems (sUAS). The new rule allows for the non-recreational operation of sUAS less than 55 pounds in the national airspace. Farmers and professionals planning to use UAS or “drones” for agricultural purposes must comply with the rule beginning on August 29, 2016. An important first step toward compliance is to obtain the proper license to operate a sUAS, referred to as “remote pilot certification” by the FAA.
The Remote Pilot Certification Requirement
The Remote Pilot in Command (Remote PIC) is the person who is directly responsible for the operation of the sUAS. The new rule requires the Remote PIC to obtain a remote pilot certificate with a small UAS rating. To do so, an applicant must meet eligibility requirements, pass a knowledge test and complete the application process.
1. Eligibility requirements. An applicant for a Remote PIC must be at least 16 years old, proficient in the English language, and in a physical and mental condition that would not interfere with safe operation of a sUAS.
2. Knowledge test. An applicant must pass the unmanned aircraft general (UAG) knowledge test before applying for the remote pilot certificate. The knowledge test, which will be available beginning August 29, 2016, will contain 60 multiple choice questions on:
- Federal regulations for sUAS.
- Airspace classification and operating requirements.
- Weather sources and effects of weather on sUAS.
- Loading and performance of sUAS.
- Emergency procedures.
- Crew resource management.
- Radio communication procedures.
- Determining performance of sUAS.
- Effects of drugs and alcohol.
- Aeronautical decision-making.
- Airport operations and maintenance.
- Preflight inspection procedures.
The FAA provides a free online learning course for knowledge test preparation, available through www.faasafety.gov or here. The FAA also presents a sample exam on its website, available here. Applicants must take the knowledge test at an FAA-approved Knowledge Testing Center. A list of Ohio’s 23 test centers is available at www.faa.gov/training_testing/testing/media/test_centers.pdf . Passing the test requires a score over 70%; an applicant who fails the test may retake the test after 14 days.
Applicants already holding a pilot certificate, other than a student pilot, must follow a different process that includes completing a two-hour online course. The course, which includes an exam, is available through www.faasafety.gov or here.
3. Application. An applicant who passes the UAG knowledge test must complete the application for a remote pilot certificate, FAA Form 8710-13. The form will be available as a paper application or online through the FAA’s Integrated Airmen Certificate Rating Application System at https://iacra.faa.gov. The Transportation Security Administration (TSA) will then conduct a background security screening of the applicant to determine if the applicant represents a security threat. If the screening is successful, an applicant will receive the remote pilot certificate. An unsuccessful security screening will disqualify the applicant, who would have a right to appeal the security screening decision. Note that an applicant who uses the online application can obtain a temporary certificate online upon successful completion of the security screening, while an applicant who submits a paper application must wait to receive the permanent remote pilot certificate through U.S. mail. The FAA has announced that it hopes to issue a temporary remote pilot certificate within 10 business days after submission of an online application.
What Happens After Certification?
A certified Remote PIC may legally fly a sUAS and may also directly supervise persons who do not hold a remote pilot certificate, as long as the Remote PIC maintains the ability to take control of the sUAS. This provision will allow Remote PICs to teach, demonstrate and train uncertified operators. The Remote PIC has several responsibilities:
- Register the sUAS with the FAA.
- Conduct pre-flight inspections.
- Abide by operational limitations in the new sUAS rule.
- Maintain records on the sUAS and its flights.
- Upon request, make the sUAS and records available to the FAA for inspection or testing.
- Report any operation that results in injury, loss of consciousness or property damage of at least $500 to the FAA within 10 days of occurrence.
Recurrent knowledge test. A person who receives the remote pilot certificate must take a recurrent knowledge test within 24 months to retain the certification.
Part 2 of this Series
In our next post in this series on implications of the new rule for sUAS in agriculture, we’ll explain the operational limitations and requirements for sUAS. To read the new rule or access up-to-date information on sUAS, go to www.faa.gov/uas.