Did you know that a group of ferrets is called a business? Ironically, we are in the business of ferreting out agricultural and resource law issues and providing you updates. This edition of the Ag Law Harvest provides an update on recent court decisions from across the country that deal with the right to farm, food labeling, and conditional use permits for solar gardens.
Right to Farm Act upheld in North Carolina. Earlier this month, a three-judge panel on the North Carolina Court of Appeals upheld the constitutionality of North Carolina’s right to farm law. In 1979, the North Carolina legislature enacted the Right to Farm Act (the “Act”). In 2017 and 2018 the North Carolina legislature amended the Act by passing House Bill 467 and Senate Bill 711 (collectively referred to as “the Amendments”). The Amendments sought to clarify and strengthen North Carolina’s right to farm law. The Plaintiffs argued that the Amendments violated North Carolina’s equivalent of the U.S. Constitution’s Fourteenth Amendment Due Process Clause and that the Act exceeded the scope of North Carolina’s police power. The Court of Appeals disagreed. The Court recognized North Carolina’s interest in promoting and preserving agriculture and that North Carolina has the authority to regulate such an interest. The Court found that the Act’s limitation on potential nuisance claims against those engaged in agriculture, forestry, and other related operations helps to protect North Carolina’s interest, and encourages North Carolina’s goal to encourage the availability and continued “production of food, fiber, and other products.” The Plaintiffs also argued that the Amendments were “private laws” to specifically protect the swine industry in violation of North Carolina’s Constitution. The Court found, however, that the Act and the Amendments are laws of general applicability that apply to all agricultural and forestry operations, not just swine producers. Lastly, the Plaintiffs argued that because the language in House Bill 467 limited the amount of compensation that can be recovered in a nuisance action against agricultural and forestry operations, the Plaintiffs’ right to a trial by jury had been impaired and/or abolished. The Court ruled, however, that North Carolina has the authority to “define the circumstances under which a remedy is legally cognizable and those under which it is not.” The Court found that there are many examples where compensation and remedies are limited within North Carolina law and that House Bill 467 did not “impair nor abolish the right to a jury trial.”
Where is the cacao? A California man (“Plaintiff”) is suing Costco Wholesale Corporation (“Costco”) for allegedly mislabeling Costco’s “Chocolate Almond Dipped Vanilla Ice Cream Bars” (the “Product”). Plaintiff argues that because of the Product’s packaging and name, he expected the Product’s chocolate would have been predominately derived from cacao beans. Plaintiff asserts that chocolate is defined by the Food and Drug Administration (“FDA”) and California law “as prepared from ground roasted cacao bean” and that it must be “made chiefly from cacao beans with a small amount of optional ingredients.” Based on this definition, Plaintiff claims that Costco’s packaging is misleading because the Product’s chocolate contains mostly vegetable oils and small amounts of ingredients derived from cacao beans. In his Complaint, Plaintiff argues that federal regulations require Costco to label the Product as “milk chocolate and vegetable oil coating” rather than just “chocolate.” However, the court found that neither of Plaintiff’s cited regulations support a viable theory of liability against Costco. First, the court could not find Plaintiff’s definition of chocolate anywhere in the Code of Federal Regulations. Secondly, the court held that there are no federal regulations that require a certain amount of cacao bean ingredients as opposed to vegetable oils to be used in “chocolate” and that there is no language mandating the labeling of Costco’s Product as “milk chocolate and vegetable oil coating almond dipped ice cream bars.” The court also dismissed Plaintiff’s claim that Costco engaged in consumer deception with its Product’s label. The court found that a reasonable consumer would not have been deceived by the Product’s label and that if there were any questions about the ingredients of the Product, a consumer could have resolved those questions by looking for the ingredients list on the back of the Product’s packaging.
Conditional use permits at the center of the Minnesota’s “solar system.” Move over Sun because conditional use permits are at the center of attention in Minnesota, for now. The Minnesota Court of Appeals has recently ruled against a county’s decision to deny two conditional use permits to build solar gardens in McLeod County, Minnesota. Two subsidiary companies of Nokomis Energy LLC (“Plaintiff”) each applied for a conditional use permit (“CUP”) to build separate, one-megawatt solar energy facilities. McLeod County considered the two CUP applications at public hearings. Two neighboring landowners expressed concerns about stray voltage and the number of fetal deaths among their livestock. The landowners claimed that the number of fetal deaths increased after other solar facilities were constructed nearby. Plaintiff did not deny that solar gardens can produce stray voltage but proposed to alleviate those concerns by hiring only licensed professionals and to allow third-party oversight during construction. Plaintiff also offered to conduct stray voltage testing before and after construction and indicated that it would accept any conditions set forth by county officials. The county, however, denied both applications on the basis that the proposed sites are “prime farmland” and because the stray voltage would negatively affect livestock. The court rejected the county’s assessment. First, the court held that preserving prime farmland is not a sufficient legal basis for denying a CUP. Second, the court ruled that the county cannot deny a CUP without first considering whether any proposed conditions would eliminate any concerns about the application. Here, the court found that McLeod County’s failure to address Plaintiff’s proposals to eliminate the stray voltage concerns amounts to an unjust denial of Plaintiff’s CUPs.
Thanks for reading and Happy New Year!
Large-scale wind and solar energy development has generated both opportunity and conflict across Ohio in recent years. For several months, we monitored the progress of Senate Bill 52, a proposal intended to address community and landowner concerns about wind and solar facilities. This past Monday marked the effective date for Senate Bill 52, passed by the Ohio Legislature in June, and we've been busy developing new resources to help explain the laws that are now effective.
The legislation expands local involvement in the siting and approval of large-scale wind and solar facilities in several ways:
- County commissioners may designate “restricted areas” where such facilities may not locate.
- County citizens may petition for a referendum to approve or reject restricted area designations.
- Developers must hold a public meeting overviewing a proposed facility in the county where it would locate.
- County commissioners may prohibit or limit a proposed wind or solar facility after learning of it at the public meeting.
- County and township representatives must sit on the Ohio Power Siting Board committee that reviews facility applications.
The new laws also require wind and solar developers to submit decommissioning plans and performance bonds to address removal of a facility at the end of its lifetime.
Our two law bulletins and video series on Senate Bill 52 are now available. The resources work through each part of Senate Bill 52 and explain which types of facilities will be subject to the laws. You'll find the new resources in our energy law library on the Farm Office website at https://farmoffice.osu.edu/our-library/energy-law.
The Ohio General Assembly is off and running in its new session. Many bills that affect agriculture in Ohio are already on the move. Here’s a summary of those that are gaining the most momentum or attention.
Tax Conformity Bill – S.B. 18 and H.B. 48. The Senate has already passed its version of this bill, which conforms our state tax code with recent changes to the Internal Revenue Code made in the latest COVID-19 stimulus provisions of the Consolidated Appropriations Act. Both the Senate and the House will also exempt forgiven Paycheck Protection Program second-draw loan proceeds from the Commercial Activity Tax. The Senate version additionally exempts Bureau of Workers Compensation dividend rebates from the Commercial Activity Tax beginning in 2020, but the House bill does not. Both bills include “emergency” language that would make the provisions effective in time for 2020 tax returns.
Beginning farmers tax credits – H.B. 95. A slightly different version of this bill is returning after not passing in the last legislative session. The bi-partisan bill aims to assist beginning farmers through several temporary income tax credits:
- Businesses that sell or rent agricultural assets such as land, animals, facilities or equipment to certified beginning farmers can receive a 5% income tax credit for sales, a 10% of gross rental income credit for cash rents, and 15% of gross rental income for share rents.
- Certified beginning farmers can receive an income tax credit equal to the cost of participating in a certified financial management program.
Beginning farmers, among other requirements, are those in or seeking entry into farming in Ohio within the last ten years who are not a partner, member or shareholder with the owner of the agricultural assets and who have a net worth of less than $800,000 in 2021, which adjusts for inflation in subsequent years. Beginning farmers must be certified by the Ohio Department of Agriculture or a land grant institution. The House Agriculture and Conservation Committee will discuss the bill at its meeting on February 16.
Wind and solar facilities – S.B. 52. In addition to revising setback and safety specifications for wind turbines, this proposal would amend Ohio township zoning law to establish a referendum process for large wind and solar facility certificates. The bill would require a person applying for a certificate for a large wind or solar facility to notify the township trustees and share details of the proposed facility. That notification sets up opportunities for the township trustees or residents of the township to object to the application and submit the proposed application to a vote of township residents. A certificate would not take effect unless approved by a majority of the voters. A first hearing on S.B. 52 will be held on Tuesday, February 16 before the Senate Energy and Public Utilities Committee.
Grants for broadband services – H.B. 2 and S.B. 8. The Senate passed its version of this bill last week, which sets up a $20 million competitive grant program for broadband providers to extend broadband services throughout the state. The proposal would also allow broadband providers to use electric cooperative easements and poles, subject to procedures and restrictions. The bill had its second hearing before the House Finance Committee last week.
Eminent domain – H.B. 63. Based on a similar bill that didn’t pass last session, this bill changes eminent domain law in regard to property taken for the use of recreational trails, which include public trails used for hiking, bicycling, horseback riding, ski touring, canoeing and other non-motorized recreational travel. H.B. 63 would allow a landowner to submit a written request asking a municipality or township to veto the use of eminent domain for a recreational trail within its borders. The bill would also allow a landowner to object to a use of eminent domain for any purpose at any time prior to a court order for the taking, rather than limiting that time period to ten days as in current law. The bill had its first hearing before the House Civil Justice Committee last week.
Minimum wage increases. S. B. 51 and H.B. 69. Bills on each side of the General Assembly propose gradually increasing the state minimum wage to $15, but have different paths for reaching that amount. S.B. 51 proposes increasing the wage to $12/hour in 2022, followed by $1/hour increases each year and reaching $15 by 2025, which is when a federal bill proposes to establish the $15 minimum wage. H.B. 69 begins at $10/hour in 2022 with $1/hour increases annually, reaching $15 in 2027. S.B. 51 was referred last week to the Workforce and Higher Education Committee and H.B. 69 was referred to the Commerce and Labor Committee.