An agritourism bill first introduced over a year ago has finally received approval from the Ohio General Assembly. The Senate passed SB 75 last November, but the bill did not pass the House of Representatives until May 4, 2016. The House had passed a similar bill last May, but the Senate failed to act on that bill. If signed by Governor Kasich, SB 75 will be in effect in time for the fall agritourism season. (Update: Governor Kasich signed the bill, which becomes effective 8/16/16).
The legislation addresses civil liability risk, property taxation and local zoning authority for “farms” that provide “agritourism” activities. It’s important to understand several definitions in the law:
- A "farm" is land that is devoted to commercial agricultural production, either at least 10 acres in size or grossing an average income of $2500 from such production.
- "Agricultural production" means commercial aquaculture, algaculture, apiculture, animal husbandry, poultry husbandry; the production for a commercial purpose of timber, field crops, tobacco, fruits, vegetables, nursery stock, ornamental shrubs, ornamental trees, flowers, or sod; the growth of timber for a noncommercial purpose if the land on which the timber is grown is contiguous to or part of a parcel of land under common ownership that is otherwise devoted exclusively to agricultural use; or any combination of such husbandry, production, or growth; and includes the processing, drying, storage, and marketing of agricultural products when those activities are conducted in conjunction with such husbandry, production, or growth.
- "Agritourism" is an agriculturally related educational, entertainment, historical, cultural, or recreational activity, including you-pick operations or farm markets, conducted on a farm that allows or invites members of the general public to observe, participate in, or enjoy that activity.
- An "agritourism provider" is anyone who owns, operates, provides, or sponsors an agritourism activity, whether or not for a fee, including employees at agritourism activities.
For agritourism providers on farms, the legislation offers the following protections:
Civil liability immunity. The new law protects an agritourism provider from liability for injuries to agritourism participants in certain situations. The law states that a provider does not have a legal duty to remove risks that are “inherent” in agritourism activities and will not be liable for any harm a participant suffers because of such risks. “Inherent risks” are dangers or conditions that are an integral part of an agritourism activity, including surface and subsurface conditions of land; ordinary dangers of structures or equipment ordinarily used in farming; behavior or actions of domestic or wild animals , except for vicious or dangerous dogs; the possibility of contracting illness from physical contact with animals, animal feed, animal waste, or surfaces contaminated by animal waste; and a participant’s failure to follow instructions or exercise reasonable caution while engaging in the agritourism activity.
Warning sign requirement. An agritourism provider must post and maintain warning signs on the farm to receive the law’s civil liability protection, and a provider who fails to post or maintain these signs can be liable for a participant’s harm. At or near each entrance to the agritourism location or at each agritourism activity, a provider must post and maintain a sign that states: "WARNING: Under Ohio law, there is no liability for an injury to or death of a participant in an agritourism activity conducted at this agritourism location if that injury or death results from the inherent risks of that agritourism activity. Inherent risks of agritourism activities include, but are not limited to, the risk of injury inherent to land, equipment, and animals as well as the potential for you as a participant to act in a negligent manner that may contribute to your injury or death. You are assuming the risk of participating in this agritourism activity." This warning must be printed in black letters that are at least one inch in height.
Exceptions to immunity. An agritourism provider will not be immune for harm caused by the provider’s willful or wanton disregard for a participant’s safety; if the provider purposefully caused harm to the participant; if the provider's actions or inactions constituted criminal conduct and caused harm to the participant; or if the provider had or should have had actual knowledge of an existing dangerous condition that is not an inherent risk and the provider did not make the dangerous condition known to the participant.
Property taxation. The new legislation ensures that agritourism parcels are eligible for Ohio’s Current Agricultural Use Valuation (CAUV) program, which provides reduced property taxation on qualifying agricultural lands. According to the new law, the existence of agritourism on a tract, lot, or parcel of land does not disqualify land that otherwise qualifies for the CAUV program.
Local zoning authority. The new legislation expands Ohio’s “agricultural exemption” from local zoning to include agritourism activities. The “agricultural exemption” limits the ability of townships and counties to use zoning to prohibit or regulate certain agricultural land uses in any zoning district. Under the new law, agritourism becomes part of the agricultural exemption and is an agricultural land use that zoning officials cannot prohibit by way of zoning.
The legislation does allow townships and counties to regulate some factors related to agritourism land uses if the regulations are necessary to protect public health and safety, however. These factors include the size of structures used primarily for agritourism and setback lines for such structures, egress or ingress into a parcel, and the size of parking areas. This limited authority does not include the power to require improvements such as drainage or paving for agritourism parking areas.
The legislation also clarifies that county and township zoning may not prohibit the use or construction of structures for vinting and selling wine if located on land where grapes are grown.
Implications of the new legislation
- Not everyone who engages in agritourism will benefit from the new law. The law is designed to address agritourism activities that diversify an existing farm—where the activities occur on land that is otherwise engaged in agricultural production. For example, a person who purchases 10 acres of vacant land with the intent of creating a corn maze and petting farm will not benefit from the law because there is no agricultural production already taking place on the land. If the land is first involved in agricultural production, added agritourism activities will fall under the new law.
- Visitors to agritourism operations must take more responsibility for their own safety. The law recognizes that there are inherent dangers on farms that can be beyond the control of agritourism providers. Visitors who wish to participate in an agritourism experience must be aware of these dangers and be prepared to protect themselves by following directions, paying attention to surface conditions, being cautious around animals and equipment, supervising their children and generally exercising reasonable care while on the farm.
- Agritourism providers must be prepared to meet the law’s signage requirements. When the law becomes effective, agritourism operators should have proper warning signs posted. Providers who fail to post the right sign in the right place will lose the law’s immunity protections.
- Local officials must treat free and fee-based agritourism activities equally. Unlike some agricultural laws, there is no distinction in the new law between commercial agritourism businesses and free agritourism activities like educational farm tours; the law applies in the same way regardless of whether the activity is fee-based or free, as long as it’s conducted on a “farm.”
- Counties and townships must identify public health and safety issues and develop appropriate zoning standards. Counties and townships must be prepared to recognize agritourism situations that pose health and safety concerns due to the size and location of a structure, ingress and egress on the property or the size of a parking area. If a public health or safety issue is identified and the county or township wants to regulate the issue, it must have enacted zoning standards that address the issue.
Read SB 75 on the Ohio General Assembly’s website here.
Post Script: Governor Kasich signed this legislation on May 17, 2016; the new law becomes effective on August 16, 2016.
After much anticipation, the Federal Aviation Administration (FAA) has published proposed regulations that would govern the operation of drones used for agricultural and other activities. The proposal would allow farmers and ranchers to operate drones, referred to in the rule as “unmanned aircraft” and “unmanned aircraft systems” (UAS), subject to requirements intended to address public safety and national security concerns.
Under the proposed small UAS rule, operators must comply with a certification process, register and maintain aircraft, and follow limitations on aircraft operation. Of the proposed limitations, agricultural operators might have concerns about a “visual line-of-sight” rule requiring that operators have visual contact with aircraft, a flight ceiling of 500 feet above ground level and prohibitions against night flights. Additionally, the proposal fails to address privacy issues and the potential use of drones for surveillance activities on another person’s property.
The following provisions are the major components of the proposed rule, which would apply to unmanned aircraft weighing less than 55 pounds that are used for non-hobby and non-recreational purposes:
Operator Certification and Reporting
Certification. An operator of a UAS must have an “unmanned aircraft operator certificate with a small UAS rating,” which requires:
- Meeting eligibility requirements: the applicant is at least 17 years old, speaks English, has no state or federal drug offenses, has no physical or mental condition to prevent safe UAS operation, and the applicant’s identity is verified by the FAA.
- Passing an initial aeronautical knowledge test at an FAA-approved knowledge testing center, which covers: (1) applicable regulations relating to small UAS rating privileges, limitations, and flight operation; (2) airspace classification and operating requirements, obstacle clearance requirements, and flight restrictions affecting small UAS operation; (3) official sources of weather and effects of weather on small UAS performance; (4) small UAS loading and performance; (5) emergency procedures; (6) crew resource management; (7) radio communication procedures; (8) determining the performance of small UAS; (9) physiological effects of drugs and alcohol; (10) aeronautical decision-making and judgment; and (11) airport operations.
- Passing a recurrent aeronautical knowledge test every 24 months.
Reporting. An operator must report an accident to the FAA within 10 days of any operation that results in injury or property damage.
- Aircraft registration. A small unmanned aircraft must be registered with the FAA.
- Markings. A small unmanned aircraft must display nationality and registration markings.
- Aircraft condition. An operator must maintain a small unmanned aircraft in a condition for safe operation.
Pre-flight requirements. Before a flight, an operator must conduct a pre-flight inspection and assessment that includes:
- Inspection of the links between the unmanned aircraft and its control station.
- Verification of sufficient power to operate the aircraft at least 5 minutes beyond the intended operational time period.
- Assessment of the operating environment, including local weather conditions, local airspace and flight restrictions, locations of persons and property on the ground and other ground hazards.
- A briefing to all persons involved in the aircraft operation that addresses operating conditions, emergency procedures, contingency procedures, roles and responsibilities and potential hazards.
Visual line of sight requirement. An operator must maintain a “visual line-of-sight” with the unmanned aircraft, using only human vision that is unaided by any device other than glasses or contact lenses.
Use of visual observer. An operator may use “visual observers” to assist with the visual line-of-sight requirement.
- An operator and visual observer must maintain constant communication, which may be made through communication-assisted devices.
- The aircraft must still remain close enough to the operator for the operator to be capable of maintaining the visual line-of-sight.
Operating limitations. An operator must not operate an unmanned aircraft:
- More than 500 feet above ground level.
- More than 100 mph.
- After daylight, which is the time between official sunrise and sunset.
- When there is not minimum weather visibility of 3 miles from the aircraft’s control station.
- No closer than 500 feet below and 2,000 feet horizontally away from any clouds.
- Over any persons not directly involved in the operation and not under a covered structure that would protect them from a falling UAS.
- From a moving aircraft or vehicle, unless the moving vehicle is on water.
- Within Class A airspace; or within Class B, C, or D airspace or certain Class E airspace designated for an airport, without prior authorization from the appropriate Air Traffic Control facility.
- Carelessly or recklessly, including by allowing an object to be dropped from the aircraft in a way that would endanger life or property.
In the proposed rule, the FAA also presents the possibility of including regulations in the final rule for “micro-UAS,” or unmanned aircraft weighing no more than 4.4 pounds that are composed of “frangible” materials that yield on impact and present minimal safety hazards. The micro-UAS category would require operators to self-certify their familiarity with the aeronautical knowledge testing areas; would limit operation to: 1,500 feet within the visual line-of-sight of the operator, no more than 400 feet above ground, only in Class G (uncontrolled) airspace and at least 5 miles from an airport; and would allow flight over people not involved in the operation. The agency invites comments on whether to include a micro-UAS category in the final rule.
What’s not in the Proposed Rule?
Privacy concerns. Many in the agricultural community worry about the potential use of drones for surveillance activities that violate a property owner’s privacy. The FAA states that privacy concerns about unmanned aircraft operations are beyond the scope of this rulemaking and that “state law and other legal protections for individual privacy may provide recourse for a person whose privacy may be affected through another person’s use of a UAS.”
The agency also notes the recent Presidential Memorandum issued by President Obama, Promoting Economic Competitiveness While Safeguarding Privacy, Civil Rights, and Civil Liberties in Domestic Use of Unmanned Aircraft Systems (February 15, 2015), which requires the FAA to participate in a multi-stakeholder engagement process led by the National Telecommunications and Information Administration to develop a framework for privacy, accountability, and transparency issues concerning the commercial and private use of UAS in the NAS. The memorandum also requires agencies to “ensure that policies are in place to prohibit the collection, use, retention, or dissemination of data in any manner that would violate the First Amendment or in any manner that would discriminate against persons based upon their ethnicity, race, gender, national origin, religion, sexual orientation, or gender identity, in violation of law.” Read the Presidential Memorandum here.
External loads and towing operations. The FAA declined to propose new regulations for small unmanned aircraft with towing and external load capabilities. Instead, the agency invites comments, with supporting documentation, on whether external load and towing UAS operations should be permitted and whether their use should require airworthiness certification, higher levels of airman certification or additional operational limitations.
The FAA will accept public comments on the proposed small UAS rule until April 24, 2015. Issuing a final rule could take at least another year after the comment period closes. In the interim, FAA encourages operators to visit http://knowbeforeyoufly.org/ to understand current regulations for the use of small UAS, which remain in place until the FAA issues its final rule.
House Committee Sets Out to Address Water Quality
The 131st session of the Ohio General Assembly is underway with a few changes to the structure and leadership of the committees that address agriculture. In the House of Representatives, the previous Agriculture and Natural Resources Committee has been renamed as the Agriculture and Rural Development Committee. Natural resource issues, previously handled with agriculture under the old committee structure, will now go to a newly formed Energy and Natural Resources Committee. The committee modifications echo similar changes made last session in the Senate.
Brian Hill (R-Zanesville) will serve as the new chair of the House Agriculture and Rural Development Committee, with Tony Burkley (R-Payne) as vice chair and John Patterson (D-Jefferson) as the ranking minority member. Other committee members are Terry Boose (R-Clarksville), Jim Buchy (R-Greenville), Jack Cera (D-Bellaire), Christina Hagan (R-Marlboro Township), Steve Kraus (R-Sandusky), Sarah LaTourette (R-Bainbridge Township), Michael O’Brien (D-Warren), Sean J. O’Brien (D-Bazetta), Bill Patmon (D-Cleveland), Debbie Phillips (D-Albany), Wes Retherford (R-Hamilton ), Jeff Rezabek (R-Clayton), Margaret Ann Ruhl (R-Mt. Vernon), Tim Schaffer (R-Lancaster), Michael Sheehy (D-Oregon), Andy Thompson (R-Marietta), A. Nino Vitale (R-Urbana) and Paul Zeltwanger (R-Mason).
The House Agriculture and Rural Development committee will kick off its work with a prominent issue: water quality. Speaker Cliff Rosenberger has stated that water quality will be a priority issue that the House "needs to address and address quickly." Late last session, the House attemped to mitigate algal issues in Ohio lakes by passing legislation that would have affected applications of livestock manure and chemical fertilizers (HB 490). The legislation failed to pass the Ohio Senate and expired on December 31, 2014 with the end of the legislative session. This week, the House Agriculture and Rural Development Committee will revisit those issues when it meets off-site for a hearing at Cooper Farms in Van Wert to discuss water quality, nutrient management and agriculture. Expert witnesses in agriculture and watershed management will present testimony and address questions from the committee.
On the Senate side of the new legislative session, the Senate Agriculture Committee will continue under the leadership of Cliff Hite (R-Findlay), with vice chair Joe Uecker ((R–Miami Township) and ranking minority leader Lou Gentile (D-Steubenville). Other committee members are Bill Beagle (R–Tipp City), Dave Burke (R-Marysville), Capri S. Cafaro (D-Hubbard), Randy Gardner (R-Bowling Green), Gayle Manning (R-North Ridgeville), Bob Peterson (R-Sabina) and Michael J. Skindell (D-Lakewood). The Senate Agriculture Committee does not currently have any hearings on its schedule.
The Occupational Safety & Health Administration (OSHA) faced harsh criticism recently when the agency inspected and issued fines to small farms engaged in grain storage activities. The farms argued that OSHA had no authority to do so because of the "small farm exemption" that limits OSHA’s authority to enforce safety regulations on small farms. This week, OSHA released a guidance memorandum that attempts to clarify how its regional administrators should interpret the small farm exemption. The agency's new guidance focuses on whether an activity on a small farm is “not related to farming operations and not necessary to gain economic value from products produced on the farm.”
The small farm exemption and OSHA's earlier interpretation
Since 1976, Congress has prohibited OSHA from using any of its funds to enforce safety regulations on "small farms," those farm operations that employ 10 or fewer employees and do not maintain a temporary labor camp. In recent years, however, the agency turned its regulatory attention to grain operations on small farms. OSHA justified its inspections and enforcement actions for grain storage activities by arguing that “post-harvest” grain storage and processing activities differ from “farming operations” and “core agricultural operations” and thus do not fit within the small farm exemption (see our earlier post). The agency withdrew this interpretation of the small farm exemption earlier this year.
OSHA’s new guidance memorandum
In its July 29, 2014 memorandum to OSHA regional administrators, the agency now states that a small farm would not be subject to OSHA enforcement if it simply stores its own grain on the farm, sells grain from the farm or grows, stores and grinds grain on the farm to feed its own livestock. These activities fit within the definition of a "farming operation" because the activities are "necessary to gain economic value from grain grown on the farm."
But the agency also explains that other types of activities on a small farm could be subject to OSHA authority. According to the agency, if a small farm engages in activities that “are not related to farming operations and are not necessary to gain economic value from products produced on the farm, those activities are not exempt from OSHA enforcement.”
The agency provides a few examples of activities on small farms that would not be exempt because they are not related to farming operations or are not necessary to gain economic value from farm products. The list includes grain-based activities, but also addresses food processing examples:
- A grain handling operation that stores and sells grain grown on other farms.
- A food processing facility for making cider from apples grown on the farm or for processing large carrots into "baby" carrots.
- Milling of grain into flour used to make baked goods.
- The agency also explains that food manufacturing operations are not exempt from OSHA enforcement activities under the appropriations rider, even if they take place on a small farm.
OSHA's new guidance memorandum on the small farm exemption is available here.
The federal Occupational Safety & Health Administration (OSHA) generated controversy recently when several of its enforcement actions against farms with grain bin storage hit the news headlines. The enforcement actions are contrary to a general understanding in the agricultural community that OSHA does not have authority to enforce its regulations against farms with ten or fewer employees, referred to as the “small farms rider.” While claiming that it does not intend to enforce beyond its authority, OSHA justifies its actions in an internal agency memorandum that interprets the small farms rider. Is OSHA’s justification reasonable or contrary to law? Here’s the language of the small farms rider and OSHA’s explanation of its authority:
- The Small Farms Rider. The 2014 Consolidated Appropriations Act passed by Congress, like every previous appropriations bill since 1976, states that none of the funds appropriated by Congress to OSHA “shall be obligated or expended to prescribe, issue, administer, or enforce any standard, rule, regulation, or order under the Act which is applicable to any person who is engaged in a farming operation which does not maintain a temporary labor camp and employs 10 or fewer employees.” (emphasis added)
- OSHA's Memorandum. In its standard interpretation memorandum titled “Authority to Perform Enforcement Activities at Small Farms with Grain Storage Structures Involved in Postharvest Crop Activities” dated June 28, 2011, OSHA begins by acknowledging the small farms rider but then lays out several reasons why grain storage facilities, even if located on farms, do not fall under the rider and are not exempt from OSHA enforcement:
- The agency focuses on the small farm rider’s use of the term “farming operation” which, according to the agency’s prior interpretation, means “any operation involved in the growing or harvesting of crops, the raising of livestock or poultry, or related activities conducted by a farmer on sites such as farms, ranches, orchards, dairy farms or similar farming operations.”
- Not included in the definition of “farming operations,” according to the agency, are those establishments engaged in performing services on crops subsequent to their harvest with the intent of preparing them for market or further processing, including activities such as crop cleaning, sun drying, shelling, fumigating, curing, sorting, grading, packing and cooling, corn drying and shelling, grain drying, cleaning, and fumigating. Why are these not considered farming operations? Because the North American Industrial Classification System (NAICS) and Standard Industrial Codes (SIC) differentiate agricultural businesses that conduct crop and livestock production from those that conduct post-production activities. Small farms with grain storage structures where grain is fumigated, dried, or processed subsequent to harvest and sold into the market would fall under the post-harvest NAICS codes rather than the agricultural production codes and therefore are not “farming operations” exempted by the small farms rider, states OSHA.
- The agency also notes that grain handling operations are not “core agricultural operations” according to OSHA’s federal regulations. These regulations state that “core agricultural operations” include activities such as growing and harvesting crops, plants, vines, fruit trees, nut trees, ornamental plants, egg production, the raising of livestock, poultry, fish and livestock products.
Ohio farms that complement their agritourism activities with inflatable "bounce houses" and slides for kids to play on will soon be subject to new safety standards proposed by the Ohio Department of Agriculture (ODA). Based on its authority to inspect "amusement rides," ODA is proposing the regulations to ensure public safety through minimum standards for the operation and use of inflatable devices.
Inflatables haven't always been subject to ODA's "amusement ride" oversight. The Ohio legislature amended the definition of "amusement rides" in 2011 to include "inflatable devices," which gave ODA the added responsibility of inspecting and permitting the bounce houses. The regulations now proposed by ODA will provide safety standards that operators must meet before receiving a permit to operate an inflatable.
According to the proposal, owners or operators of inflatable amusement devices:
- Shall have the manufacturer's specifications on hand and available for ODA at the time of an inspection.
- Shall not inflate a device with flammable gases.
- May vary from the manufacturer's operating instructions or make alterations to the inflatable's design, only by doing the following:
1) Obtaining written permission for the variance or alteration from the manufacturer;
2) Submitting the written permission from the manufacturer to the department for approval; and
3) Being reinspected by ODA to ensure compliance with the revised manufacturing instructions or specifications.
ODA seeks comments on the proposed safety standards by February 18, 2014; learn more by visiting here.
What is your biggest legal concern for your farm? That's the question we posed to farmers who visited our Agricultural & Resource Law Program booth at OSU's Farm Science Review this fall. The results of our informal survey are both expected and surprising. We've listed the responses below, beginning with the most common answers.
1. Farm transition and estate planning. It's no surprise that many farmers shared concerns about whether the family would do any estate planning, how to transition the farm business and assets to the next generation, understanding estate tax implications and planning for long-term health care needs. Given the high percentage of farmland and farm wealth that will change hands in the next ten years, we're relieved to know that farm families are thinking about these issues. Readers with these concerns should consider attending OSU Extension's Farm Transition, Estate and Retirement Planning Seminar on December 10, 2013 in New Philadelphia, Ohio; more information is available here.
2. Premises liability. Whether for trespassers, hunters or customers, landowners worry about liability for injuries to people who come onto the farm property. We receive the most speaking requests on this topic, so we expected its popularity.
3. Regulation of farm food sales. The regulation of farm food products came up frequently. There is confusion about the division between state and local authority over cottage foods and home baked goods. Regulations affecting whether a farmer can sell eggs and fresh or frozen meat is also a concern.
4. Oil and gas leases and hydro-fracturing. Common questions on this topic included "will development come my way?", "can I get out of an old oil and gas lease?" and "is hydro-fracturing dangerous?"
5. Water rights. This one caught us off guard because it wasn't related to oil and gas development, as we had guessed. The concern: will there be enough water in Ohio to go around?
6. Current Agricultural Use Valuation. The calculation of agriculture's differential property tax assessment is an ongoing issue for farmers.
7. Neighbor issues. In the words of one farmer, "how do I deal with difficult neighbors?" Many farmers have particular concerns about co-existing with non-farm neighbors.
8. Animal rights activists. Even with the implementation of Ohio's Livestock Care Standards, some farmers worry about being targeted by animal rights activists.
Catharine Daniels, Attorney, OSUE Agricultural & Resource Law Program
If you already produce and sell home-based food products, or are considering starting, it is very important to label your products correctly. All home-based food products, whether sold as a cottage food or sold under a home bakery license, must be properly labeled to sell legally. If you are not familiar with the difference between cottage foods and foods produced under a home bakery license, check out our recent post on the requirements for selling your home-based food products at farmer’s markets here. The food labeling and packaging requirements for both cottage foods and foods produced under a home bakery license are very similar with a few differences that will be highlighted below.
All cottage food products must contain a label that includes the following information:
- The name and address of the cottage food production operation.
- The name of the food product – Ex: “Chocolate Chip Cookies”
- The ingredients of the food product, in descending order of predominance by weight. This means your heaviest ingredient will be listed first and the least heavy ingredient listed last. Also, ingredients must be broken down completely if the ingredient itself contains two or more ingredients. For example, if unsalted butter is one of your ingredients, then you would list it as follows: Butter (Sweet Cream, Natural Flavor).
- The net quantity of contents in both the U.S. Customary System (inch/pound) and International System of Units (metric system). This must be placed within the bottom 30% of the label in a line parallel to the bottom of the package. An example of what this would look like in both the U.S. Customary System and International System is: Net Wt 8 oz (227 g)
- The following statement in ten-point type: “This product is home produced.” This statement is required because it gives notice to the purchaser of the food product that the product was produced in a private home that is not required to be inspected by a food regulatory authority.
Allergen Statement. There are 8 foods considered a major food allergen under the Food Allergen Labeling and Consumer Protection Act that must be declared on your label if they are contained in your food product. They include:
- Fish – For fish, the specific species must be declared – Ex: Bass
- Crustacean Shellfish – For shellfish, the specific species must be declared – Ex: crab
- Tree Nuts - For tree nuts, the specific type of nut must be declared – Ex: Almond
If any of these major allergens are contained in your food product, then you may declare them in either of two different ways.
First, you can list the allergens in a “Contains” statement. The “Contains” statement would follow the ingredients list and look like this: “Contains: Wheat, Egg.”
The second way to declare an allergen is in your ingredients list. An example would be: “Enriched flour (wheat flour, malted barley, niacin, reduced iron, thiamin monotrate, riboflavin, folic acid), Egg.” In this example, wheat and egg are specifically stated within the ingredients so you would not need to put an additional “Contains” statement.
Nutritional information is not required for cottage foods unless a nutrient content claim or health claim is made. An example of a nutrient content claim would be “low fat.” An example of a health claim would be “may reduce heart disease.” If either or both of these claims are made, then you are required to include a Nutrition Facts panel on your cottage food product. More information on the Nutrition Facts Panel can be found on the U.S. Food and Drug Administration’s website.
Cottage foods may be sold in any packaging that is appropriate for the food product with one exception. Cottage foods may not be packaged using reduced oxygen packaging methods. Reduced oxygen packaging is defined as removing oxygen from a package, displacing and replacing oxygen with another gas or combination of gases, or controlling the oxygen content to a level that is below what is normally found in the surrounding atmosphere. Reduced oxygen packaging includes vacuum packaging and modified atmosphere packaging:
- Vacuum Packaging
When air is removed from a package of food and the package is hermetically sealed so that a vacuum remains inside the package.
- Modified Atmosphere Packaging
When the proportion of air in a package is reduced, the oxygen is totally replaced, or when the proportion of other gases such as carbon dioxide or nitrogen are increased.
Foods Produced Under a Home Bakery License
For foods produced under a home bakery license, you will follow the same guidelines for labeling as explained above with a few exceptions.
- The statement, “this product is home produced” is not required to be on your label. The statement is not required because your home kitchen must be inspected by the Ohio Department of Agriculture to obtain a home bakery license.
- If your home bakery product requires refrigeration, then you must include the language “Keep Refrigerated,” or a similar statement, on your label.
The same guidelines also apply here.
There is no restriction against using reduced oxygen packing methods if you have a home bakery license. You may sell your baked goods in any package that is appropriate for the food product.
Why is labeling so important?
Properly labeling your food products will allow you to legally sell them. It is essential to make sure your labels are accurate or else you could be found guilty of a fourth degree misdemeanor for selling a misbranded food product. For additional resources, see the following:
An example label can be found on the Ohio Department of Agriculture’s website under the Food Safety Division at: http://www.agri.ohio.gov/divs/FoodSafety/docs/CottageFoodLabelExample.pdf
Also, the U.S. Food and Drug Administration website provides great resources for guidance on food labeling: http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/LabelingNutrition/ucm064880.htm
Larry Gearhardt, Asst. Professor, OSU Extension
Much of Ohio’s forestland has been plagued by, first, the emerald ash borer, and more recently, the Asian longhorn beetle. Can you deduct the loss on your tax form when a major portion of your forest land is destroyed by these insects? You can if the timber or forest land is held to produce income. If the timber is held merely for personal use, the loss is not deductible. A tax deduction is available to owners who hold timber or forest land to produce income, as opposed to personal use.
Casualty Versus Non-Casualty Loss
Where to deduct a loss on your tax forms depends upon whether the loss is a casualty loss or a non-casualty loss. A “casualty” is defined as the damage, destruction, or loss of property from an identifiable event that is sudden, unexpected, and unusual. Disease, insect infestation, drought, or combinations of factors seldom qualify as a casualty because these types of damage tend to be gradual or progressive rather than sudden. However, Revenue Ruling 79-174 provides that a massive southern pine beetle infestation that killed residential shade trees in 5 to 10 days did qualify as a casualty. Whether or not it is a casualty depends upon the facts of the situation.
A “non-casualty” loss is defined as the damage, destruction beyond use, or loss of property from an identifiable event. Like a casualty, the precipitating event for a non-casualty loss must be unusual and unexpected, but unlike a casualty, it does not have to be sudden. For example, insect attacks have resulted in deductible non-casualty losses of timber according to Revenue Ruling 87-59.
Deduction of a Non-Casualty Loss
A non-casualty loss is a business deduction. With one exception, owners who hold their timber as an investment, as opposed to managing timber as a business, cannot deduct a non-casualty loss. The exception is unusual and unexpected drought.
To calculate the amount of a non-casualty loss, the owner must first calculate the basis of the timber lost as you would for a sale. You then divide the adjusted basis in the affected block of timber by the basis of the total volume of timber in the block, updated to immediately before the loss. The result is multiplied by the volume of timber lost.
As an example, assume that the fair market value of the timber lost was $9,000. The basis of the timber lost was $3,500. If you held the timber as part of a trade or business, you could deduct $3,500 allowable basis in the timber lost on IRS Form 4797. Start on IRS Form 4797, Part II, for timber held one year or less, or Part I for timber held more than one year. The loss will be netted with other gains and losses from the disposal of other business property. If you are holding the timber as an investment, you cannot deduct a non-casualty loss unless it was from drought.
In contrast with casualty losses, which are deducted first from ordinary income, non-casualty losses are first deducted from capital gains. This treatment of non-casualty loss is a disadvantage, since capital gains receive more favorable tax treatment.
A loss frequently gives rise to related expenses, such as the cost of a cruise or appraisal to determine the extent of the loss, that cannot be included as part of the loss. Such expenses are often deductible, but where you take the deduction differs according to the type of loss.
If you hold your timber or forest land as part of a trade or business, these expenses are deducted on IRS Form 1040, Schedule C, or Schedule F if you qualify as a farmer. If you hold your timber or forest land as an investment, an owner can deduct expenses related to a non-casualty loss to the extent that they qualify as “ordinary and necessary” expenses, even if you cannot deduct the loss itself. However, an owner holding timber as an investment will report expenses on IRS Form 1040, Schedule A, in the “Miscellaneous deductions” section. This deduction will be subject to the 2% of adjusted gross income floor.
What If There Is a Gain?
If timber or forest land is damaged or destroyed and the owner receives payment in the form of a damage claim, salvage proceeds, insurance recovery, or other compensation, the transaction is called an involuntary conversion or involuntary exchange. If the payment that the owner receives is greater than the basis of the timber lost, there will be a gain rather than a deductible loss. Unless the owner elects to defer the gain by replacing the property within specified time limits, the gain must be reported.
For more information, see the USDA Forest Landowners' Guide to the Federal Income Tax here.
The second Ohio Oil and Gas Law Symposium will take place on Friday, May 25 at Longaberger Golf Club in Nashport, Ohio. The day long program, hosted by OSU Extension's Agricultural & Resource Law Program, aims at enhancing legal education for attorneys--particularly attorneys working with landowners. The agenda addresses current legal issues in shale energy development and consists of:
- Preemption of Authority over Oil and Gas Development John K. Keller; Vorys, Sater, Seymour and Pease LLP, Columbus
- Water Law Considerations for Oil and Gas Development Brian P. Barger; Brady, Coyle and Schmidt, Ltd., Toledo
- Accommodation of Split Estates William J. Taylor; Kincaid, Taylor and Geyer, Zanesville Alan Wenger; Harrington, Hoppe and Mitchell, Ltd., Youngstown
- Negotiating Pipeline Easements and Managing the Threat of Eminent Domain Craig Vandervoort, Sitterley and Vandervoort Ltd , Lancaster Steven A. Davis; Crabbe, Brown and James LLP, Lancaster
- Recent Changes in Oil and Gas Leases and Leasing Richard Emens; Emens and Wolper Law Firm, Columbus
- The Current State of Ohio Injection Well Regulation Tom Tomastik, Ohio Dept. of Natural Resources
- Panel Discussion: Emerging Issues in Ohio Oil and Gas Law Eric Johnson; Johnson and Johnson Law Firm, Canfield Matt Warnock; Bricker and Eckler LLP, Columbus Jonathan Airey; Vorys, Sater, Seymour and Pease LLP, Columbus
To register and learn more about the Symposium, visit http://regonline.com/OilandGasLaw2012.