Written by Evin Bachelor, Law Fellow, OSU Extension Agricultural & Resource Law Program
Ten of Ohio’s thirty-three state senators have introduced and sponsored legislation that would decriminalize licensed hemp cultivation and production in the state of Ohio. These senators represent a bipartisan mix of seven Republicans and three Democrats. After the passage of the Farm Bill, we sent out a blog post that explained how current Ohio law does not distinguish hemp from marijuana, meaning that hemp is currently just as illegal under Ohio law as marijuana. Senate Bill 57 would change that, if passed.
What Senate Bill 57 would change.
Senate Bill 57, if passed in its current form, would effectively decriminalize hemp cultivation and the production and sale of hemp products, so long as the activities are conducted under a license. The bill establishes definitions for cannabidiol and hemp under Ohio law. Specially, hemp would be defined as:
“the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, sales, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than three-tenths per cent on a dry weight basis.”
Importantly for hemp cultivators and producers, this bill would remove hemp from Ohio’s Controlled Substances Act. We previously noted in a blog post that Senate Bill 229 from the last General Assembly was set to remove Ohio’s controlled substances schedules from the Ohio Revised Code, and instead would allow the Ohio Board of Pharmacy to create the schedules by rule. That bill passed, and would have allowed sales of CBD oils that had obtained approval from the U.S. Food and Drug Administration. However, if Senate Bill 57 passes the Ohio General Assembly, the Ohio Board of Pharmacy would no longer be able to adopt rules designating hemp and hemp products as controlled substances.
The (potential) Ohio Hemp Cultivation Program.
The Director of the Ohio Department of Agriculture (ODA) would be required to establish a program to monitor and regulate hemp cultivation consistent with the requirements of the Farm Bill that Congress passed last year. The Farm Bill authorizes the cultivation of hemp and the production of hemp products through state licensing programs. Ohio’s program would include a licensing program. Licenses will be valid for five years. ODA and universities would not be required to obtain a license, but their activities would be limited to certain activities listed in the bill. Hemp cultivation would still be illegal without a license, and could result in criminal misdemeanor charges.
The bill authorizes ODA to adopt regulations regarding:
- What the license application looks like
- What information the license application requires
- How much a license costs
- How background check will be conducted, and what they will examine
- How ODA will issue, renew, deny, suspend, and revoke hemp cultivation licenses
- How ODA will keep track of the lands where hemp is grown
- How ODA will test for delta-9 tetrahydrocannabinol concentration
- How hemp products must be labeled
- How ODA will enforce the rules and conduct inspections
- “Any other requirements or procedures necessary to administer and enforce” Ohio’s hemp cultivation program
The bill would deny licenses to any person who has pleaded guilty to or been convicted of a felony relating to controlled substances in the ten years before submitting their application, along with any person found to have falsified information on their application.
To administer the program, the bill would create a Hemp Cultivation Fund in the Ohio Treasury. Application fees, fees collected from program operations, money appropriated to the program by the General Assembly or ODA, and any gifts or grants may be deposited into the fund for use in program administration.
At this time, the bill has only been introduced and referred to the Ohio Senate Agriculture Committee. Bills are often subject to amendment, so stay tuned to the Ag Law Blog for updates on Senate Bill 57. For the text of the bill, click HERE, or visit the Ohio General Assembly’s Senate Bill 57 webpage HERE.
We are full steam ahead in 2019, and so far we have held to our new year’s resolutions. However, we want to take a quick look in the rearview mirror. Ohio legislators passed a number of bills in 2018 that affect Ohio agriculture. They range from multi-parcel auction laws to broadband grants, and oil & gas tax exemptions to hunting licenses. Here are some highlights of bills that the Ohio General Assembly passed and former Governor Kasich signed in 2018.
- House Bill 500, titled “Change township law.” As mentioned in a previous blog post, the Ohio General Assembly made a number of generally minor changes to Ohio’s township laws with House Bill 500. The changes included, among other things, requiring a board of township trustees to select a chairperson annually, modifying how vacating township roads and name changes are carried out, allowing fees for appealing a zoning board decision, clarifying how a board can suspend a member of a zoning commission or board of appeals, and removing the requirement for limited home rule townships to submit a zoning amendment or resolution to a planning commission. To learn about more of the changes that were made, visit the Ohio General Assembly’s H.B. 500 webpage here.
- House Bill 480, titled “Establish requirements for multi-parcel auctions.” The Ohio Department of Agriculture regulates auctions, and H.B. 480 gave ODA authority to regulate a new classification of auctions: the multi-parcel auction. Revised Code § 4707.01(Q) will define these as “any auction of real or personal property in which multiple parcels or lots are offered for sale in various amalgamations, including as individual parcels or lots, combinations of parcels or lots, and all parcels or lots as a whole.” For more information, visit the Ohio General Assembly’s H.B. 480 webpage here.
- House Bill 522, titled “Allow outdoor refreshment area to include F permit holders.” A municipality or township may create a “designated outdoor refreshment area” where people may walk around the area with their opened beer or liquor. Previously, only holders of certain D-class permits (bars, restaurants, and clubs) and A-class permits (alcohol manufacturers) could allow their patrons to partake in a designated open area. H.B. 522 will allow holders of an F-class liquor permit to also allow their patrons to roam in the designated area with an open container. F-class liquor permits are for festival-type events of a short duration. However, holders of either permits D-6 (allowing Sunday sales) or D-8 (allowing sales of growlers of beer or of tasting samples) will no longer be eligible for the open container exception. For more information, visit the Ohio General Assembly’s H.B. 522 webpage, here.
- Senate Bill 51, titled “Facilitate Lake Erie shoreline improvement.” As mentioned in a previous blog post, the primary purpose of Senate Bill 51 was to add projects for Lake Erie shoreline improvement to the list of public improvements that may be financed by a special improvement district. S.B. 51 also instructed the Ohio Department of Agriculture (“ODA”) to establish programs to assist in phosphorous reduction in the Western Lake Erie Basin. This adds to the previous instructions given to ODA in S.B. 299 regarding the Soil and Water Phosphorous Program. S.B. 51 further provided funding for a number of projects, ranging from flood mitigation to MLS stadium construction. For more information, visit the Ohio General Assembly’s S.B. 51 webpage here.
- Senate Bill 299, titled “Finance projects for protection of Lake Erie and its basin.” Largely an appropriations bill to fund projects, S.B. 299 primarily targeted water quality projects and research. ODA received an additional $3.5 million to support county soil and water conservation districts in the Western Lake Erie Basin, plus $20 million to establish water quality programs under a Soil and Water Phosphorous Program. Further, the Ohio Department of Natural Resources (“ODNR”) received an additional $10 million to support projects that divert dredging materials from Lake Erie. Stone Laboratory, a sea grant research program, received an additional $2.65 million. The bill also created a mentorship program called OhioCorps, and set aside money for grants to promote broadband internet access. For more information, visit the Ohio General Assembly’s S.B. 299 webpage here.
- Senate Bill 257, titled “Changes to hunting and fishing laws.” ODNR may now offer multi-year and lifetime hunting and fishing licenses to Ohio residents under S.B. 257. Further, the bill creates a resident apprentice senior hunting license and an apprentice senior fur taker permit, and removes the statutory limits on the number of these permits a person may purchase. The bill also creates a permit for a Lake Erie Sport Fishing District, which may be issued to nonresidents to fish in the portions of Lake Erie and connected waters under Ohio’s control. For more information, visit the Ohio General Assembly’s S.B. 257 webpage here.
- House Bill 225, titled “Regards plugging idle or orphaned wells.” H.B. 225 creates a reporting system where a landowner may notify ODNR’s Division of Oil and Gas Resources about idle and orphaned oil or gas wells. Upon notification, the Division must inspect the well within 30 days. After the inspection, the Division must determine the priority for plugging the well, and may contract with a third party to plug the well. To fund this, the bill increases appropriations to the Oil and Gas Well Fund, and increases the portion of the fund that must go to plugging oil and gas wells. For more information, visit the Ohio General Assembly’s H.B. 225 webpage here.
- House Bill 430, titled “Expand sales tax exemption for oil and gas production property.” Certain goods and services directly used for oil and gas production have been exempted from sales and use taxes, and H.B. 430 clarifies what does and does not qualify for the exemption. Additionally, property used to control water pollution may qualify for the property, sales, and use tax exemptions if approved by ODNR as a qualifying property. H.B. 430 also extends the moratorium on licenses and transfers of licenses for fireworks manufacturers and wholesalers. For more information, visit the Ohio General Assembly’s H.B. 430 webpage here.
- Senate Bill 229, titled “Modify Board of Pharmacy and controlled substances laws.” The Farm Bill’s opening the door for industrial hemp at the federal level has led to a lot of conversations about controlled substances, which we addressed in a previous blog post. Once its changes take effect, Ohio’s S.B. 229 will remove the controlled substances schedules from the Ohio Revised Code, which involve the well-known numbering system of schedules I, II, III, IV, and V. Instead, the Ohio Board of Pharmacy will have rulemaking authority to create schedules and classify drugs and compounds. Prior to the removal of the schedules from the Revised Code, the Board of Pharmacy must create the new schedules by rule. S.B. 229 also mentions cannabidiols, and lists them as schedule V under the current system if the specific cannabidiol drug has approval from the Food and Drug Administration. For more information, visit the Ohio General Assembly’s S.B. 229 webpage here.
The end of 2018 effectively marked the end of the 132nd Ohio General Assembly, and 2019 marks the start of the 133rd Ohio General Assembly. Any pending bills from the 132nd General Assembly that were not passed will have to be reintroduced if legislators wish to proceed with those bills. Stay tuned to the Ag Law Blog for legal updates affecting agriculture from the Ohio General Assembly.
Here’s our gathering of ag law news you may want to know:
We have a Farm Bill. After months of waiting, the United States Congress has passed the Agriculture Improvement Act of 2018, known as the Farm Bill. Members of Congress have been working for months trying to reconcile a House version and a Senate version in what is known as a Conference Committee. On Monday, December 10th, the Conference Committee submitted a report to members of Congress. Both the House of Representatives and the Senate approved the report by bipartisan majorities within a matter of days. The bill will become law once signed by President Trump, which analysts expect him to do by the end of this week.
The Ohio Ag Law Blog will explore some of the major provisions that will affect Ohio from a legal perspective, rather than restate what other news outlets and other sources have already said about the Farm Bill. First up will be a blog post about what the Farm Bill means for hemp in Ohio, so stay tuned for an in-depth analysis.
Syngenta settlement approved by federal judge. As previously reported in the Ohio Ag Law Blog here and here, the major multi-year class action lawsuit against Syngenta for failing to receive import approval from China before selling its Viptera and Duracade seeds in the United States has been settled for $1.51 billion. On December 7th, Judge John Lungstrum of the U.S. District Court for the District Kansas issued a final order granting the settlement. In the order, the court overruled a number of objections from class members who opposed the settlement. It also awarded one third of the settlement amount to the plaintiffs’ attorneys as attorney fees, valued at $503,333,333.33. The next step could involve appeals by those opposed to the settlement. According to a statement posted by one of the co-lead counsels for the plaintiffs, payments to eligible parties could begin as early as the second quarter of 2019, depending upon whether any appeals are filed.
Lawsuit centered on definition of “natural” allowed to proceed in California. Sanderson Farms labels its chicken products as “100% Natural.” However, the environmental groups Friends of the Earth and the Center for Food Safety have alleged that Sanderson Farms’ labeling is misleading, false, and unfair to competition. The lawsuit hinges around Sanderson Farms’ use of antibiotics in light of its “100% natural claims,” as the plaintiffs have argued that the reasonable consumer would believe “100% natural” to mean that the chickens were antibiotic free. Sanderson Farms has repeatedly countered that its chickens were cleared of any antibiotics before processing.
Sanderson Farms has asked Judge Richard Seeborg of the U.S. District Court for the Northern District of California to dismiss the case multiple times. Each time the court has either allowed the plaintiffs to amend their complaint or rejected Sanderson Farms’ motions. The most recent denial came days after Sanderson Farms issued a press release announcing that it would no longer routinely use antibiotics considered medically important for humans by March 1, 2019. The judge’s denial of the motion to dismiss does not mean that the plaintiffs are correct, it only means that the plaintiffs have presented enough facts for the case to continue.
The controversy stems from labeling and consumer expectations. We previously talked about the “what is meat” and “what is milk” debates in a previous blog post, and this issue is not much different. Again there is a word that has not been thoroughly regulated by a governing entity such that companies have used it to mean different things. As more labeling questions arise, the Ohio Ag Law Blog will keep you posted on trends and updates.
Ohio legislation on the move:
Lake Erie shoreline improvement bill passes. Last Thursday, the Ohio Senate and House of Representatives agreed to modifications to Senate Bill 51, which addresses Lake Erie shoreline improvements, along with multiple amendments. The primary purpose of the bill is to add projects for Lake Erie shoreline improvement to the list of public improvements that may be financed by a special improvement district (SID). According to the Legislative Service Commission’s analysis when the bill was introduced, a SID is “an economic development tool” that facilitates improvements and services in the district “through a special assessment levied against property in the district.”
The bill as passed also would remove a requirement, previously included in Senate Bill 299, for the Ohio Department of Agriculture to establish rules regarding the Soil and Water Phosphorous Program. Instead, the department would now be instructed to “establish programs to assist in reducing” phosphorous in the Western Lake Erie Basin.
Further, the House added amendments that change a previously passed spending bill, House Bill 529. The bill would authorize $15 million for a flood mitigation project in the Eagle Creek Watershed. The Columbus Crew would also receive $15 million for construction of a new stadium in Columbus. The Armstrong Air & Space Museum in Wapakoneta would receive $250,000 for improvements. A few other tax items were addressed.
The bill as passed is available for download from the Ohio General Assembly’s website here. An analysis of the bill as most recently referred from the House Finance Committee is available here. As of the time of posting, the Governor still has to sign Senate Bill 51 for it to take effect.
Ohio township bill passes. Last Thursday, the Ohio House of Representatives and Senate agreed to modifications to House Bill 500, which would make a number of changes to Ohio’s township laws. Some of the highlights of the most recent version include:
- A boards of township trustees must select a chairperson annually.
- Petitions to change the name of township roads will result in an automatic name change if the county commissioners do not adopt a resolution regarding the petition within 60 days.
- County commissioners will not be able to vacate township roads unless the applicable board of township trustees have adopted a resolution approving the vacation.
- A board of township trustees will have the authority to charge a fee against a person who appeals a zoning decision to the board of zoning appeals in order to defray costs associated with advertising, mailing, and the like.
- A board of township trustees may suspend a member of a township zoning commission or township board of zoning appeals after charges are filed against a member, but must provide a hearing for removal no later than 60 days after the charges are filed.
- In limited home rule townships, the current requirement that a township must submit a proposed zoning amendment or resolution to a planning commission will be optional.
This list comes from the Ohio Legislative Service Commission’s bill analysis as of the bill’s re-reporting by the Senate Finance Committee. The bill analysis has a full list of the changes that House Bill 500 would make. For more information on the bill, visit the bill’s webpage on the Ohio General Assembly website.
Importantly for agriculture, the Ohio Senate removed language from the bill that would have changed Ohio Revised Code § 519.21(B), which limits the authority of townships to restrict agricultural uses via zoning. Currently, townships may only regulate agricultural uses in platted subdivisions created under certain statutory procedures, and only if certain conditions are met. The House had passed a version that would have allowed townships to regulate agricultural uses in any platted subdivision, but the language would not have changed the certain conditions that would have to be met.
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.