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The year is still fairly new, and 2020 has brought with it some newly-introduced legislation in the Ohio General Assembly. That being said, in 2020 the General Assembly also continues to consider legislation first introduced in 2019. From tax exemptions to CAUV changes, to watershed programs and local referendums on wind turbines, here is some notable ag-related legislation making its way through the state house.
- House Bill 400 “To authorize a nonrefundable income tax credit for the retail sale of high-ethanol blend motor fuel”
HB 400 was introduced after our last legislative update in November, so while it was first introduced in 2019, it still technically qualifies as “new” to us. Since its introduction, the bill has been discussed in two hearings in the House Ways & Means Committee. The bill would give owners and operators of gas stations a tax rebate of five cents per gallon for sales of ethanol. To apply, the fuel would have to be between 15% and 85% ethanol (E15). If passed, the tax credit would be available for four years. The bill is meant to encourage gas station owners in Ohio to sell E15, which is much more readily available in other states. The bill is available here.
- House Bill 485 “To remove a requirement that owners of farmland enrolled in the CAUV program must file a renewal application each year in order to remain in the program”
Introduced on January 29, 2020, HB 485 would make it easier for farmers to stay enrolled in the Current Agricultural Use Valuation (CAUV) program. CAUV allows agricultural land to be taxed at a much lower rate than other types of land. If HB 485 were to pass, the initial application for CAUV on land more than 10 acres would automatically renew each year but the landowner must notify the auditor if the land ceases to be devoted exclusively for agricultural use. Owners of agricultural land less than 10 acres in size, who can qualify for CAUV if gross income from the land exceeds $2,500, would have to submit documentation on the annual gross income of the land to the county auditor each year rather than filing the renewal application. The CAUV bill can be found here.
Legislation from 2019 still being considered
- House Bill 24 “Revise Humane Society law”
In November, we reported that HB 24 passed the House unanimously and was subsequently referred to the Senate Committee on Agriculture & Natural Resources. Since that time, the committee has held two hearings on the bill. The hearings included testimony from the bill’s House sponsors, who touted how the bill would improve humane societies’ public accountability. The bill would revise procedures for humane society operations, require humane society agents to successfully complete training in order to serve, and would establish procedures for seizing and impounding animals. It would also remove humane societies’ current jurisdiction over child abuse cases and make agents subject to bribery laws. Importantly, HB 24 would allow law enforcement officers to seize and impound any animal the officer has probable cause to believe is the subject of an animal cruelty offense. Currently, the ability to seize and impound only applies to companion animals such as dogs and cats. You can read HB 24 here.
- House Bill 109 “To authorize a property tax exemption for land used for commercial maple sap extraction”
HB 109 was first introduced in February of 2019, but has recently seen some action in the House Ways & Means Committee, where it was discussed in a hearing on January 28, 2020. The bill would give owners of “maple forest land” a property tax exemption if they: (1) Drill an average of 30 taps during the tax year into at least 15 maple trees per acre; (2) use sap in commercially sold maple products; and (3) manage the land under a plan that complies with the standards of reasonable care in the protection and maintenance of forest land. In addition, the land must be 10 contiguous acres. Maple forest land that does not meet that acreage threshold can still receive a tax exemption if the sap produces an average yearly gross income of $2,500 or more in the three preceding years, or if evidence shows that the gross income during the current tax year will be at least $2,500. You can find the text of the proposed bill here.
- House Bill 160 “Revise alcoholic ice cream law”
Have you ever thought, “Gee, this ice cream is great, but what could make it even better?” Well this is the bill for you! At present, those wishing to sell ice cream containing alcohol in Ohio must obtain an A-5 liquor permit and can only sell the ice cream at the site of manufacture, and that site must be in an election precinct that allows for on- and off-premises consumption of alcohol. This bill would allow the ice cream maker to sell to consumers for off-premises enjoyment and to retailers who are authorized to sell alcohol. HB 160 passed the House last year and is currently in Agriculture & Natural Resources Committee in the Senate. Since our last legislative update, the committee has had three hearings on the bill. In the hearings, proponents testified in support of the bill, arguing that it would allow their businesses to grow and compete with out of state businesses. Senators asked questions about how the ice cream would be kept away from children, how the bill would help business, and about other states with similar laws. To read the bill, click here.
- Senate Bill 2 “Create watershed planning structure”
In 2019, SB 2 passed the Senate and moved on to the House Energy and Natural Resources Committee. If passed, this bill would do four main things. First, it would create the Statewide Watershed Planning and Management Program, which would be tasked with improving and protecting the watersheds in the state, and would be administered by the ODA director. Under this program, the director of ODA would have to categorize watersheds in Ohio and appoint watershed planning and management coordinators in each watershed region. The coordinators would work with soil and water conservation districts to identify water quality impairment, and to gather information on conservation practices. Second, the bill states the General Assembly’s intent to work with agricultural, conservation, and environmental organizations and universities to create a certification program for farmers, where the farmers would use practices meant to minimize negative water quality impacts. Third, SB 2 charges ODA, with help from the Lake Erie Commission and the Ohio Soil and Water Conservation Commission, to start a watershed pilot program that would help farmers, agricultural retailers, and soil and water conservation districts in reducing phosphorus. Finally, the bill would allow regional water and sewer districts to make loans and grants and to enter into cooperative agreements with any person or corporation, and would allow districts to offer discounted rentals or charges to people with low or moderate incomes, as well as to people who qualify for the homestead exemption.
Since SB 2 moved on to the lower chamber, the House Energy and Natural Resources Committee has held multiple hearings on the bill, and has consented to two amendments. The first amendment would keep information about individual nutrient management plans out of the public record. Similarly, the second amendment would keep information about farmers’ agricultural operations and conservation practices out of the public record. The text of SB 2 is available here.
- Senate Bill 234 “Regards regulation of wind farms and wind turbine setbacks”
SB 234 was introduced on November 6, 2019. Since that time, the bill was assigned to the Senate Energy & Public Utilities Committee, and three hearings have been held. The bill would give voters in the unincorporated areas of townships the power to have a referendum vote on certificates or amendments to economically significant and large wind farms issued by the Ohio Power and Siting Board. The voters could approve or reject the certificate for a new wind farm or an amendment to an existing certificate by majority vote. The bill would also change how minimum setback distances for wind farms might be measured. The committee hearings have included testimony from numerous proponents of the bill. SB 234 is available here. A companion bill was also introduced in the House. HB 401 can be found here.
For the last several years, the state of Ohio and the U.S. EPA have been plagued with objections and lawsuits—from states, local governments, and environmental groups—concerning Ohio’s list of impaired waters and development of total maximum daily loads (TMDLs) for the Western Basin of Lake Erie. (Some of our past blog posts on the subject are available here, here, and here.) Under the Clean Water Act (CWA), states are required to submit a list of impaired, or polluted, waters every two years. Typically, designating a water body as impaired triggers a review of pollution sources, determinations of TMDLs for different pollutants, and an action plan for meeting those TMDLs. Ohio repeatedly failed to include the Western Basin in its list of impaired waters, even though the area has been subject to pollution-caused algal blooms in recent years. When the state finally listed the Western Basin waters as impaired in 2018, it still did not develop the accompanying TMDL for the area. However, Ohio’s TMDL drought ended last week.
Ohio EPA announced on February 13, 2020, that it would develop TMDLs for the Western Basin “over the next two to three years.” This decision will ultimately affect farmers in the watershed, as it is likely that the Ohio EPA would create TMDLs for phosphorus, nitrogen, and other fertilizers in the Western Basin. Consequently, farmers may have to reduce the amounts they put on their fields, and/or implement additional measures to keep such inputs from running off into the water.
So, Ohio listed the Western Basin as impaired and is working on TMDLs for the area—the controversy is over, right? Not so fast. Lucas County, Ohio and the Environmental Law & Policy Center filed a lawsuit against the U.S. EPA that is still ongoing. (We last discussed this lawsuit here.) Basically, the plaintiffs in the suit are arguing that the U.S. EPA violated the CWA when it allowed the Ohio EPA to designate the Western Basin as impaired in 2018, but did not make the state develop TMDLs. Even though Ohio has since promised to implement TMDLs for the area, the outcome of the case will still weigh in on the crucial question of whether the U.S. EPA can make states create TMDLs for impaired waters under the CWA. In addition, the U.S. District Court case applies to Ohio’s 2018 impaired waters list, whereas Ohio EPA’s recent announcement concerns the 2020 list. Finally, it’s doubtful that environmental groups and others will stop their efforts just because Ohio has now promised to create TMDLs—it’s almost a certainty that the debate over pollution in the Western Basin and the best ways to remedy the problem will persist.
Valentine’s Day was indeed a sweet day for Bader Farms, a peach farm in Missouri that claimed that dicamba products by Monsanto/Bayer and BASF drifted onto its property and injured 20,000 of its peach trees over 700 acres. A federal jury agreed and awarded the farm $15 million in compensatory damages. The following day, the jury gave the farm another $250 million in punitive damages against Bayer and BASF, bringing the total award to $265 million.
In 2016, Bader Farms was the first to file a dicamba drift lawsuit against Monsanto. A summary of the lawsuit from our partner, the National Agricultural Law Center, explains that the farm’s claim alleged widespread damage to the peach orchards and a multi-million dollar financial loss. At the center of Bader Farms’ original complaint was Monsanto’s genetically modified Roundup Ready 2 Xtend soybeans and Bollgard II Xtend cotton seeds (“Xtend crops”), dicamba-resistant seeds that Bader Farms alleged were released without an accompanying EPA-approved dicamba herbicide in 2015 and 2016. The farm argued that by selling the Xtend crop seeds without a corresponding herbicide, it was foreseeable to Monsanto that farmers would use old, highly volatile, drift-prone dicamba that had a strong chance of damaging neighboring crops.
Bader Farms later added BASF as a defendant to the case and also added new complaints for dicamba-related damage it suffered during the 2017 growing season. Bader Farms stated that Monsanto and BASF had worked together to manufacture, market, and sell dicamba-based products that they knew would cause harm.
The jury in the federal lawsuit ruled in favor of Bader Farms on all counts. Specifically, the jury concluded that Monsanto was negligent by releasing dicamba-tolerant seeds before releasing the herbicide. The jury also determined that both Monsanto and BASF were negligent because they issued new dicamba products that drifted off-target although the companies claimed that the products were less likely to drift. Important to the punitive damage award, the jury found that Monsanto and BASF had engaged in a “conspiracy to create an ecological disaster to increase profits.”
The Bader Farms case is the first of many dicamba-based cases against Monsanto/Bayer and BASF, combined last year into Multi-District Litigation involving both a Crop Damage Class Action Master Complaint and a Master Antitrust Action Complaint. For an excellent review of the dicamba cases, see the National Agricultural Law Center’s series on “The Deal with Dicamba,” available at https://nationalaglawcenter.org/the-deal-with-dicamba-part-three/.
Last year, we wrote a post on recent developments in ag-gag litigation. In that post, we discussed a few ag-gag laws that had been struck down on First Amendment grounds. Court actions and decisions in recent months show that this trend is continuing. Namely, decisions in Iowa and Kansas have not been favorable to ag-gag laws.
What is an ag-gag law?
“Ag-gag” is the term for state laws that prevent undercover journalists, investigators, animal rights advocates, and other whistleblowers from secretly filming or recording at livestock facilities. “Ag-gag” also describes laws which make it illegal for undercover persons to use deception to obtain employment at livestock facilities. Many times, the laws were actually passed in response to undercover investigations which illuminated conditions for animals raised at large industrial farms. Some of the videos and reports produced were questionable in nature—they either set-up the employees and the farms, or they were released without a broader context of farm operations. The laws were meant to protect the livestock industry from reporting that might be critical of their operations—obtained through deception and without context, or otherwise. The state of Ohio does not have an ag-gag law, but a number of other states have passed such legislation.
Injunction in Iowa lawsuit
You may recall that Iowa’s ag-gag law was overturned in January of last year. The judge found that the speech being implicated by the law, “false statements and misrepresentations,” was protected speech under the First Amendment. The state wasted little time in passing a new ag-gag law that contained slightly different language. (We wrote about the differences between Iowa’s old and new versions of the law here.) After passage of the new law, animal rights and food safety groups quickly filed a new lawsuit against the state, claiming that like the previous law, the new law prohibited their speech based on content and viewpoint. In other words, they argued that the new Iowa law was still discriminatory towards their negative speech about the agricultural industry, while favoring speech depicting the industry in a positive light.
While the new challenge of Iowa’s law has not yet been decided by U.S. District Court for the Southern District of Iowa, the court did grant a preliminary injunction against the law late last year. This means the law cannot be enforced while the case is ongoing, which is certainly a strike against the state. We’ll have to wait and see if the court is persuaded that the new language of the law violates the plaintiff’s First Amendment rights, but for the time being, there is no enforceable ag-gag law in the state of Iowa.
Kansas law overturned
Kansas passed its ag-gag law in 1990, and has the distinction of having the oldest such law in the country. Although the law was long-standing, the U.S. District Court for the District of Kansas still determined that it was unconstitutional.
What exactly did the law say? The Kansas law, among other things, made it illegal, “without the effective consent of the owner,” to “enter an animal facility to take pictures by photograph, video camera or by any other means” with the “intent to damage the animal facility.” The law also made it illegal for someone to conceal themselves in order to record conditions or to damage the facility. “Effective consent” could be obtained by “force, fraud, deception, duress, or threat,” meaning under the law, it was not permissible for an undercover whistleblower to apply for a job at an animal facility and work at the facility if they really intended to record and disseminate the conditions.
In a 39-page opinion, the court explained its reasoning for striking down the law. Following a familiar formula for First Amendment cases, the court found that the law did in fact regulate speech, not just conduct. The court stated that the “prohibition on deception” in the law prohibited what an animal rights investigator could say to an animal facility owner, and that the outlawing of picture taking at animal facilities affected the investigator’s creation and dissemination of information, which the Supreme Court has found to be speech. Next, the court found that the law prohibited speech on the basis of its content; to determine whether someone had violated the law, they would have to look at the content of the investigator’s statement to the animal facility owner. Furthermore, the court pointed out that the law did not prohibit deceiving the facility owner if the investigator intended to disseminate favorable information about the facility. Moving on, the court cited Supreme Court decisions to show that false speech is indeed protected under the First Amendment. Since the court found that the law prohibited speech, on the basis of its content, and that false speech is protected, it had to apply strict scrutiny when considering the constitutionality of the law. Applying this test, the court explained that the law did “not prevent everyone from violating the property and privacy rights of animal facility owners,” instead, it prevented “only those who violate said rights with intent to damage the enterprise conducted at animal facilities.” As such, the law did not stand up to strict scrutiny because it was “underinclusive”—it applied to a small group of people with a certain viewpoint, but nobody else.
Based upon its reasoning above, the court did overturn most of the Kansas ag-gag law. However, it is worth noting that it upheld the part of the law that prohibits physically damaging or destroying property or animals at an animal facility without effective consent from the owner.
What’s on the horizon?
The next two ag-gag decisions will likely be made by courts in Iowa and North Carolina. We discussed the Iowa case above—the court will have to determine whether the slightly different language in the new law passes constitutional muster. We’re also continuing to watch the lawsuit in North Carolina, which has been working its way through the courts for several years now. North Carolina’s “ag-gag” law is interesting in that it doesn’t just prevent secret recording and related actions at livestock facilities, but also prohibits such actions in “nonpublic areas” of a person or company’s premises.