Recent Blog Posts
We're preparing for another edition of our monthly webinar, Farm Office Live, on Friday, April 25 at 10 a.m. Our featured guest this month is Dr. Margaret Jodlowski, Asst. Professor in the Dept. of Agricultural Environmental and Development Economics, who will discuss farm labor issues with us. Our remaining agenda features the Farm Office team addressing these topics:
- Strategies for Developing the Next Leader of Your Farm Operation - David Marrison, Farm Management Field Specialist
- Crop Profit Outlook - Barry Ward, Production Business Management Leader
- Farm Business Analysis Update - Clint Schroeder, Farm Business Analysis Program Manager
- State and Federal Legislative Update - Peggy Hall, Agricultural & Resource Law Program Director
- New Laws: Paystub Protection Act and Operation of Drones - Jeff Lewis, Agricultural & Resource Law/Tax Schools Attorney
- Tax Update: Are Avian Flu Indemnifications Exempt? - Barry Ward and Jeff Lewis
- Upcoming Events and Deadlines - David Marrison
Join in for this free webinar by registering at farmoffice.osu.edu/farmofficelive, where replays of previous webinars are also available. We hope to see you there!
On April 9, 2025, Ohio enacted House Bill 106, known as the Pay Stub Protection Act. This bipartisan legislation marks a meaningful step forward in promoting wage transparency and safeguarding worker rights across the state. Prior to this law, Ohio stood out as one of the few states without a mandate for employers to issue pay stubs. With its passage, the Act now ensures employees are provided with comprehensive earnings statements, bringing Ohio in line with the practices of most other states.
What the Law Requires
Under the Pay Stub Protection Act (codified in Ohio Revised Code Section 4113.14), employers are now mandated to provide each employee with a written or electronic pay statement on every regular payday. These statements must include:
- Employee’s name and address;
- Employer’s name;
- Total gross wages earned by the employee during the pay period;
- Total net wages paid to employee for the pay period;
- An itemized list of additions to or deductions from wages paid to the employee, with explanations; and
- The date the employee was paid and the pay period covered by that payment.
For hourly employees, the following three additional items are also required:
- Total hours worked during the pay period;
- Hourly wage rate; and
- Total number of hours worked beyond 40 hours in a workweek.
Enforcement
While the Pay Stub Protection Act brings Ohio in line with the majority of states regarding wage transparency, it differs from some by not granting employees the right to sue or seek monetary compensation for an employer’s noncompliance. If an employee does not receive a pay stub that meets the Act’s requirements, they must first submit a written request to their employer for a compliant pay stub. The employer then has 10 days to provide the required statement.
If the employer fails to respond within that timeframe, the employee may report the violation to the Ohio Department of Commerce. Should the Department find a violation, it will issue a written notice to the employer. The employer is then required to post the notice in a conspicuous location on the premises for a period of 10 days.
Implications for Employers
Although many employers already issue pay stubs as a matter of best practice, Ohio law now makes it a legal requirement. This change presents an opportunity for employers to review their payroll systems and make any necessary updates to ensure compliance. Employers should confirm that their pay statements contain all required information and that any third-party payroll providers are also adhering to the new standards.
A Step Toward Greater Transparency
The Pay Stub Protection Act marks a meaningful step forward for worker rights in Ohio. By requiring detailed pay statements, the law equips employees with the information necessary to confirm their earnings and promotes greater transparency and fairness in the workplace.
For additional details about the Pay Stub Protection Act and its requirements, refer to the official legislative text of House Bill 106 or visit the Ohio Department of Commerce’s website.
Tags: Ohio Law, Pay Stub Protection Act, Agricultural Labor, Ag Labor, Farm Labor
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I recently received this question from a farm family. It’s one of the most common — and important — questions farm families ask when thinking about the future. Long-term care (LTC) is expensive, unpredictable, and often not covered by programs like Medicare. For farmers who’ve spent a lifetime building an operation and want to pass it on, the rising costs of LTC present a real financial risk to the land, the farm business, and the legacy. The following is a brief discussion on LTC costs and strategies.
The Growing Risk of Long-Term Care
Once upon a time, estate taxes were the biggest financial threat to the family farm. Today, that’s no longer the case. With higher federal estate tax exemptions, few farms owe estate taxes anymore. The real financial threat now? LTC costs.
LTC includes a wide range of services — from home-based personal care to skilled nursing facility stays — and most of it isn’t covered by Medicare. These services help people with chronic illness, disability, or aging-related conditions. For example, assistance with dressing, bathing, eating, or even just getting around. Care might start at home and eventually move to a facility. Costs vary by setting and service, but they add up quickly.
Here are a few important facts to help understand the implications of LTC on farming operations:
- 69% of people over 65 will need some form of LTC.
- Average LTC lasts 3 about years, with women needing slightly more (3.7 years) than men (2.2 years).
- 20% of people will need care for more than 5 years — these are the “outliers” most likely to face LTC costs that can jeopardize the farm.
- In Ohio, a year in a nursing home will cost around $100,000 or more.
For a farm couple, those numbers can double — and the risk of outliving income and savings increases.
Can the Farm Handle It?
If you’re wondering whether your operation could survive those costs, it depends on a few things:
- Do you have income (from Social Security, retirement accounts, rent, etc.) that could help cover LTC?
- Do you have non-farm assets, like savings or investments, to use before touching the farm?
- Would you be considered an “outlier”, needing care for many years — and would your current planning handle that?
In most cases, a farm family can survive average LTC costs, around $180,000, without needing to sell land and other critical assets. But it’s the outliers — the 5-to-10-year nursing home stays — that pose the greatest risk. That’s where planning becomes essential.
Planning Ahead: Options for Managing LTC Risk
There’s no one-size-fits-all solution. But there are strategies that can help reduce LTC risks and protect the farm. Here's a breakdown of the most common options:
- Do Nothing
For some, doing nothing is a valid strategy — if you have enough income and assets to cover even the worst-case LTC costs without risking the farm. But that’s rare. Most families should at least consider other options.
- Gifting Assets
Giving land or assets to heirs (usually children) more than five years before applying for Medicaid can protect those assets from LTC costs. But gifting comes with trade-offs:
- You lose control over the assets.
- The heir receives your original tax basis, which could trigger big capital gains taxes later.
- If you need LTC during the five-year look-back period, the gift can cause Medicaid penalties.
Gifting can be effective — but it needs to be done carefully, and early.
- Irrevocable Trusts
An irrevocable trust can protect assets while allowing some flexibility. You give up ownership and control, but the trust (managed by a trustee) holds the asset for your beneficiaries. If structured correctly and established early enough, the trust assets are shielded from LTC costs — and sometimes still qualify for a stepped-up tax basis at death.
But be warned: these trusts are complex, expensive to set up, and must be carefully maintained.
- Wait-and-See Approach
This strategy avoids doing anything upfront but relies on having enough income and savings to cover five years of LTC if needed. If care becomes necessary, assets are transferred and the clock starts. The gamble? If you can’t make it through the five-year penalty period, your assets might still be at risk.
- Self-Insurance
Some families choose to earmark a piece of the operation (a less productive farm, a savings account, etc.) to pay for care if needed. It gives flexibility and control, but it also requires discipline — and can lead to one spouse living more frugally out of fear the money won’t last.
- Long-Term Care Insurance
LTC insurance can cover all or part of the costs — and newer “hybrid” policies can include a life insurance component so the money isn’t lost if care isn’t needed. But these policies can be expensive and hard to qualify for, especially if you already have health issues. Still, they’re worth exploring with a good advisor.
So, What’s the Best Strategy?
The truth is, there’s no “best” option — just the best fit for your family’s goals, resources, health, and timing. Some families will mix and match strategies. Others will lean heavily on one. The important part is that you understand your risk and make intentional decisions, not default to inaction.
Talk to an Attorney and Plan Ahead
LTC is complicated. Medicaid rules, tax law, trusts, and gifting penalties are full of pitfalls. One wrong move — even with good intentions — can backfire. That’s why it’s so important to work with an attorney who understands long-term care planning and farm operations. Also, start the conversation now. Don’t wait until a crisis hits. Planning ahead can make all the difference — for your peace of mind today, and for your farm’s future tomorrow.
For more information on LTC and the risks to farms, see Long-Term Care and the Farm, a bulletin available at farmoffice.osu.edu.
Tags: Long-term care planning
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Proposals that would formally designate several “ag-related days” in Ohio, allow Ohio Farm Bureau to provide healthcare benefit coverage to its members, regulate imitation meat and egg products, and expand homemade food production opportunities are receiving attention in the Ohio legislature. Here’s a summary of the bills and where they stand in the legislative process.
H.B. 65 – Agriculture Appreciation Act
The Ohio House of Representatives passed H.B. 65 on April 2, and the bill was introduced in the Senate on April 8. Sponsored by Rep. Roy Klopfenstein (R-Haviland) and Rep. Bob Peterson (R-Sabina), the act proposes the following official designations:
- “FFA Week” as the week ending with the last Saturday in February.
- “4-H Week” as the week ending with the second Saturday of March.
- “Agriculture Day” on March 21.
- "National Farmers Market Week" as the first full week of August.
- “Ohio Stormwater Awareness Week” as the first week of October.
- “Farmer’s Day” on October 12.
- “Ohio Soil Health Week” as the second full week of November, to celebrate and raise awareness for the importance of soil health and in honor of the birthday of soil pioneer and advocate David Brandt.
Readers might recognize some of H.B. 65’s proposed designations, and that would be because a similar bill nearly passed the legislature last year. A last minute amendment in the Senate prevented the proposal from making it through the General Assembly before December 31, 2024, however.
S.B. 100 and H.B. 99 – Exemption from insurance regulations for nonprofit agricultural membership organizations
Identical bills that would exempt healthcare benefits offered by “nonprofit agricultural membership organizations” from insurance regulations has passed the Senate and is moving through the House Insurance Committee, despite opposition from a number of health care advocacy groups. H.B. 99, sponsored by Rep. Bob Peterson (R-Sabina) and S.B. 100, sponsored by Sen. Susan Manchester (R-Waynesfield) would define a “nonprofit agricultural membership organization” as an organization that was incorporated in Ohio on or before December 31, 1919 to promote the interests of farms and that provides contractual healthcare benefit coverage exclusively with members of the organization and their families. Healthcare benefit coverage provided by such an organization, according to the proposal, is not “insurance” and is not subject to insurance regulations. The bill would also allow the nonprofit organizations to assume or reinsure the risks arising out of healthcare benefit coverage with a company authorized to provide insurance in Ohio. Opponents who testified in the bill’s third hearing before the House Insurance Committee on April 8 fear the legislation would allow discrimination against persons with pre-existing conditions.
H.B. 10 – Imitation Meat and Egg Products
A bill that would prohibit the sale of foods that are “misbranded” as a meat or egg product has received two hearings before the House Agriculture Committee. Sponsored by Rep. Roy Klopfenstein (R-Haviland) and Rep. Jack Daniels (R-New Franklin), H.B. 10 defines “misbranded” meat and egg products as those that: contain manufactured-protein food products or fabricated-egg products, are offered for sale by a food processing establishment, and have a package label that includes certain “meat” or “egg” terms. A food processing establishment that sells misbranded meat and egg products would be subject to a penalty of up to $10,000 per day. The bill would also require Ohio agencies to request a USDA exemption of cultivated-protein food products and fabricated-egg products from eligibility under SNAP and WIC food programs and would require Ohio school districts and state institutions of higher education to adopt policies preventing the purchase of cultivated-protein food products or foods misbranded as meat or egg products. Several agricultural organizations testified in support of the bill in its second hearing on April 2, 2025.
H.B. 134 - Microenterprise home kitchen operations
A bi-partisan bill would add Ohio to the small but growing list of states that have adopted “food freedom laws” to loosen regulations on the sale of homemade foods. Sponsored by Rep. Jennifer Gross (R-West Chester) and Rep. Latyna Humphrey (D-Columbus), H.B. 134 would create a new “microenterprise home kitchen operation” registration that would broaden the types of foods a person could produce at home and sell directly to customers. Ohio law currently allows a person to sell certain “cottage foods” and “home bakery” foods with minimal regulation but requires producers of other foods to produce the foods in a commercial kitchen and operate under state and local food licenses. H.B. 134 would remove those requirements and allow a registered microenterprise home kitchen operation to produce and sell any homemade foods (except those containing alcohol or drugs), including items such as canned goods and hot meals. The annual $25 registration would require an inspection by the Ohio Department of Agriculture to ensure the microenterprise home kitchen operation meets requirements in the law regarding operations, food safety, storage and preparation, and sales and delivery of the food. H.B. 134 received its second hearing before the House Agriculture Committee today, April 9, with two proponents testifying in support of the bill.
Tags: Ohio legislation, Insurance, imitation food, imitation meat, imitation egg, food freedom bill, cottage foods, microenterprise home kitchen
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Farm transition planning is an essential process for agricultural operations. However, identifying and tracking assets and resources and preparing for transition planning can present significant challenges for farm families. To assist with these tasks, Ohio State University Extension has developed the Farm Asset and Resource Management Spreadsheet (FARMS), designed to provide a structured approach to organizing farm transition information.
What is FARMS?
FARMS is an Excel-based resource designed to support farm families and agricultural professionals in collecting and systematically organizing all necessary information related to farm transition planning. Whether at the preliminary stage or already engaged in detailed succession planning, FARMS enables users to input and manage varying levels of data effectively. See example screenshots below for further explanation.
What Information Does FARMS Collect?
Farms collects all the following information:
- Family and beneficiary names and contact information
- Bank accounts
- Financial Accounts
- Life Insurance
- Business Entities
- Real Estate
- Personal Property
- Farm Property
- Debt information
- Designations for executor, trustee, power of attorney, guardian
What Does Farms Do with the Collected Information?
FARMS uses the information provided by the user to do the following:
- Help ensure assets are titled to avoid probate
- Determine net worth and value of estate
- Calculate estate tax liability
- Allocate assets and net worth between spouses
- Allocate assets among beneficiaries to determine how much each beneficiary will receive from the transition plan
- Provide information that will be needed to complete wills, trusts and power of attorney documents.
How to Use FARMS?
Given its foundation in Excel, users should possess at least a basic familiarity with spreadsheet navigation. Training videos are available on YouTube to assist new users with becoming familiar with FARMS, explaining how to enter data and use the summary and analysis functions. A link to the training videos is provided below. Additionally, OSU Extension occasionally provides training sessions for potential users. It is recommended to review the training videos or attend a training session before using FARMS.
Who Should Use FARMS?
FARMS is suited for anyone involved in the farm transition planning process, from family members beginning their farm transition plan to professional advisors engaged in developing detailed transition strategies for clients.
Accessing FARMS
To begin using FARMS, interested users can download the file at the link provided below. We request users complete an initial, short survey prior to downloading FARMS, as user feedback is important to the ongoing improvement of the spreadsheet. FARMS is available at no cost due to the financial support of key partners including North Central Extension Risk Management Education and the National Agricultural Law Center.
Conclusion
FARMS offers a structured, organized approach to farm transition planning, allowing farm families and professionals to collect comprehensive, accurate information. For additional information and to begin utilizing FARMS, visit Ohiofarmoffice.osu.edu and discover how FARMS can positively impact your farm’s transition planning efforts.
Links for FARMS
Training Videos are available here: https://www.youtube.com/@osufarmoffice
FARMS can be downloaded here: https://farmoffice.osu.edu/farmsspreadsheet
Upcoming FARMS Online Training Courses
Click on registration link to register for the course.
April 7 @ 10:00 am: https://osu.zoom.us/meeting/register/oJmnwm-VQx6XjqvBh7J0aA
April 16 @ 10:00 am: https://osu.zoom.us/meeting/register/iY9cLoJeQwS0rUHkHr3DpA
April 23 @ 1:00 pm: https://osu.zoom.us/meeting/register/vT_-X56FQQqBT63fKUQW4g
May 2 @ 3:00 pm: https://osu.zoom.us/meeting/register/KmbdTjq2SryLkYNOaevp3Q
Example screenshots of FARMS
This worksheet collects family and contact information. This information is used throughout the spreadsheet for beneficiary designations, executor identification and beneficiary allocations.
This worksheet collects all real estate information including parcel identification, value, ownership and probate status. This information is used to avoid probate, and the values are included in the estate tax and beneficiary distribution analysis. Note the use of client and beneficiary names retrieved from contact information worksheet.
This worksheet collects information on up to 10 business entities. The type of entity, tax structure, assets held in the entity, ownership information and probate status is all included.
This is the summary and analysis page. All the information provided in the financial worksheets are pulled into this page and summarized. The user can assess net worth and analyze potential estate tax liability. Additionally, assets can be divided between spouses for additional estate tax analysis. Perhaps most importantly, the assets can be allocated among the beneficiaries to visualize the distribution plan. A running total for each beneficiary is provided.
Tags: FARMS, transition planning
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It's time for another episode of Farm Office Live, our monthly webinar covering agricultural law and farm management updates for Ohio agriculture. Join us this Friday, March 28 at 10 a.m. to hear from our Farm Office team of experts along with guests Eli Earich, attorney with the law firm of Barrett, Easterday, Cunningham & Eselgroth in Dublin, Ohio and Tyler Zimpfer, Law Fellow with the National Agricultural Law Center. The agenda this month covers these topics:
- Grain Contract Law and Legal Considerations - featuring Eli Earich, Barrett, Easterday, Cunningham & Eselgroth
- Legislative Update - Peggy Hall, OSU and featuring Tyler Zimpfer, National Agricultural Law Center Law Fellow
- Enforcement of the Corporate Transparency Act - Peggy Hall, OSU
- Crop Margin Outlook, Ohio Farm Sales Data, and Tax Update - Barry Ward, OSU
- Emergency Commodity Assistance Program (ECAP) - David Marrison, OSU
- Payment Limitation Rules - Robert Moore, OSU
- Farm Asset and Resource Management Spreadsheet (FARMS) - Robert Moore, OSU
- Beginner’s Guide to Farmland Ownership - Robert Moore, OSU
- Upcoming Events and Deadline - David Marrison, OSU
Don't have time to join us this Friday? We record all of the Farm Office Live webinars and post them at https://farmoffice.osu.edu/farmofficelive. If you're not already a Farm Office Live viewer, register for the free webinar at https://farmoffice.osu.edu/farmofficelive.
Today is the day! March 21, 2025, serves as the deadline for most businesses to report their beneficial ownership information (“BOI”) under the Corporate Transparency Act (“CTA”). But not so fast! While the prior statement is technically accurate, the situation has been complicated by statements and assurances from the U.S. Department of Treasury and the Financial Crimes Enforcement Network (“FinCEN”). Here’s why.
March 21 Deadline
Over the past few months, we have closely followed and analyzed the ongoing developments surrounding the CTA in our blog posts. This ever-evolving saga has included nationwide injunctions and stays—both imposed and lifted—as well as multiple extensions of the BOI reporting deadline. You can review our previous posts here:
- Corporate Transparency Act reporting deadline remains January 1, 2025
- Federal court puts Corporate Transparency Act ownership reporting on hold
- Federal Appeals Court Reinstates Corporate Transparency Act Reporting Requirements
- Corporate Transparency Act Reporting Requirements Suspended Once Again . . . For Now
- SCOTUS to Decide Fate of Nationwide Injunction Against Corporate Transparency Act
- SCOTUS Allows Corporate Transparency Act Reporting Requirements to Resume
- Corporate Transparency Act Whiplash: Reporting Requirements Still on Hold
- BOI is Back!
In short, after navigating multiple legal challenges, the original BOI reporting deadline for most businesses of January 1, 2025, was extended to March 21, 2025. However, despite this official deadline, statements and assurances from FinCEN and the U.S. Department of Treasury have added further complexity to the situation.
Promises made, promises kept?
On February 27, FinCEN announced that it would not impose fines, penalties, or any other enforcement actions against companies that fail to file or update their BOI reports by the March 21 deadline. FinCEN clarified that this “non-enforcement action” will remain in effect until a forthcoming final rule takes effect. As of this publication, FinCEN has yet to release the proposed final rule that is expected to provide further guidance and clarity on the CTA’s reporting requirements.
But the assurances didn’t stop there. On March 2, the U.S. Department of Treasury announced that the “non-enforcement action” would continue for all domestic reporting companies and beneficial owners even after FinCEN’s forthcoming rule is issued and takes effect. In essence, the Treasury has committed to not enforcing the CTA against domestic companies and owners required to file BOI reports under the Act. However, this relief will not extend to foreign reporting companies, which will be required to comply with the CTA’s reporting requirements. Additionally, the Treasury has pledged to propose a rule that would formally limit the CTA’s scope to foreign reporting companies only.
It’s important to recognize that, until these proposed rules are officially enacted, the promises made remain just that—promises. As of now, no formal rule or regulation prevents the enforcement of the CTA against domestic companies and owners. Until these assurances are solidified into law, businesses should consult with their legal counsel to determine the best course of action regarding CTA compliance.
Additionally, there has been considerable discussion suggesting that these promises and proposed rules effectively eliminate the CTA for domestic companies and owners. However, that is not entirely accurate. If implemented, these proposed rules would be administrative in nature and remain in effect only as long as the current administration permits. As with any administration change, a future administration could introduce new rules that reinstate all aspects of the CTA, including reporting requirements for domestic companies and owners.
For some "light" reading, feel free to check out our blog post on the Principles of Government, where we discuss federal agencies and the powers granted to them.
On the horizon.
Legal Challenges of CTA. The CTA continues to face several legal challenges nationwide questioning its constitutionality. Two of the most notable cases, which introduced the nationwide injunction and stay, are the Texas Top Cop Shop case and the Smith case, both currently before the federal district court in Texas. These cases challenge the constitutionality of the CTA, and the court's ruling could have significant implications for the future of the law. The situation is further complicated by a division among courts across the country regarding the CTA’s constitutionality. While some courts have upheld the CTA as constitutional, others have found it likely unconstitutional and issued more limited injunctions against its enforcement. In summary, the outcome remains uncertain. It appears that this issue is ultimately headed to the Supreme Court of the United States for final determination.
Legislation. There are several legislative proposals that could impact the CTA. One such proposal, the Protect Small Businesses from Excessive Paperwork Act of 2025, aims to extend the BOI filing deadline for most businesses to January 1, 2026. The bill has already passed the House of Representatives and is now in the Senate, where it has been referred to the Committee on Banking, Housing, and Urban Affairs. Additionally, there are bills in both the House and Senate seeking to repeal the CTA entirely. H.R. 425 and S.100, both titled the Repealing Big Brother Overreach Act, aim to fully overturn the CTA, though they have not seen significant progress since their introduction.
Legal Challenges of Promises Made. To further complicate matters, the Treasury Department’s current stance on suspending enforcement of the CTA against domestic reporting companies and owners may face its own set of legal challenges. Given the significance of the CTA, it is likely that the "non-enforcement action" will undergo intense scrutiny, litigation, and could potentially lead to legislative action. Should this occur, it raises the possibility that the CTA could remain fully enforceable, with reporting requirements for domestic companies and owners intact. This ongoing uncertainty underscores the need for businesses to stay informed and proactive about potential changes and developments.
What Should Businesses Do Now?
With enforcement actions in limbo, businesses should:
- Stay informed. Due to the ongoing legal challenges, proposed legislation, and potential future legal disputes, businesses should stay up-to-date on the status of the CTA and its enforcement. The situation appears to be evolving almost daily.
- Counsel. Businesses should consult with their legal counsel to determine the best course of action regarding the CTA. Taking a risk-averse approach may provide peace of mind, while a wait-and-see strategy could lead to unforeseen consequences.
Conclusion
At this moment, it appears that no fines or penalties will be imposed on businesses that fail to meet the March 21 deadline for BOI reporting. However, given the unpredictable nature of BOI and the CTA, things can change quickly. The CTA has been a dramatic journey, filled with unexpected twists, cliffhangers, and surprising developments. However, the story is far from over. We will continue to keep you updated on the latest changes and progress of the CTA until we reach a final resolution.
Tags: corporate transparency act, BOI, BOI Reporting, CTA, Business, FinCEN, U.S. Department of Treasury
Comments: 0
Written by Tyler Zimpfer, Law Fellow, National Agricultural Law Center
The beginning of a new presidential administration brings heightened awareness to areas of government that Americans don’t always consider, such as federal agencies. Recently, U.S. Senators have been reviewing the President’s nominees in confirmation hearings for leadership roles in federal agencies. These confirmation hearings matter. Nominees – often called a “secretary” or “director” – will oversee federal agencies with billion-dollar budgets and a federal workforce of over three million employees. But why is our government structured this way? Are all federal agencies created the same? What powers do these agencies have? And how might a recent Supreme Court decision impact the future of federal agencies?
These questions are relevant to agriculture, because farmers constantly engage with federal agencies. For example, the USDA administers programs through the Farm Service Agency (FSA) and Natural Resources Conservation Service (NRCS) that provides crop insurance, conservation funding, and financial assistance. The EPA oversees pesticide use, air pollution, and water quality laws that impact chemical use. Food producers and processors comply with health and safety standards set by the Food and Drug Administration and the Food Safety and Inspection Service.
Understanding the laws that establish and guide federal agencies is important for agriculture and is the focus of our third topic in the Principles of Government series.
A Brief History of Federal Agencies
The U.S. Constitution grants Congress the power to establish federal official positions and agencies. The power derives from three sources: the legislative power in Article I §1, the Necessary and Proper Clause in Article I §8, and the Appointments Clause in Article II, § 2. Taken together, these constitutional provisions give Congress authority to create agencies to administer the laws Congress makes. Congress must pass an “organic statute” – a statute that creates the agency and gives it certain responsibilities and power. After the agency is formally created, the Constitution authorizes the President to select and direct the officers that will lead the agency, with the advice and consent of the Senate.
Agencies have therefore been around since the onset of our democracy. The first agency, created in 1789, was called the Department of Foreign Affairs, which estimated debts on any imports into the country. The agency later became what we now know as the State Department. Congress continued to create various agencies including the Department of Treasury, the Department of Justice, and the Department of Agriculture throughout the early to mid-1800s. For the first 150 years of the United States, these agencies had fewer responsibilities and were smaller in size and impact than most modern agencies. The federal government currently maintains a list of agencies, which now number in the hundreds.
Structure of a Federal Agency
Not all agencies are created equal by Congress. The “typical” agency (e.g., USDA, EPA, etc.) is led by a single Presidentially appointed, Senate confirmed official (e.g., Secretary of Agriculture, Administrator of the EPA), who oversees the agency’s programs and employees. These agency officials are removable at-will by the President. In slight contrast, an “independent” agency usually consists of a multi-member body with limits on the number of members from one political party versus another. The members of the independent agency can have reasonable restrictions on their removal from office. The more popular independent agencies are the Securities and Exchange Commission (SEC), the Commodity Future Trading Commission (CFTC), and the Federal Reserve.
The Power of Agency Regulations
The Administrative Procedure Act (APA), passed in 1946, was enacted partially in response to the boom of administrative agencies created during the Great Depression. The purpose of the APA was to promote accountability and transparency of the federal agencies who were beginning to regulate the lives of millions of Americans. The APA established the process by which agencies develop and implement “regulations or rules.”
Regulations are especially important because they have the equal force and effect of a law Congress passes. Agencies cannot simply implement any policy they deem necessary. They must implement rules that carry out laws already passed by Congress and delegated to the agencies. Take the Clean Water Act (CWA) for example. The CWA provides the basic structure for preventing pollution into water sources around the United States. The CWA gave the EPA power to enforce and regulate the law. With the CWA as its legal authority, the EPA uses its technical expertise to write the regulations for the law, such as setting wastewater standards for industries and implementing permit programs for pollution discharges. The CWA is an “enabling statute” – a law that confers new or additional powers on an existing agency. Together with the “organic statute” that creates the agency by law, the EPA has broad authority to enforce the CWA as Congress has delegated.
In making regulations, agencies must follow what is called the “notice and comment” process established by the APA. The agency issues a notice of rulemaking and then provides an opportunity for interested persons to comment before a final rule is made. The notice and comment period can be quick for smaller, less controversial regulations, but can last for more than a year on more comprehensive rules. On average, agencies issue 18 regulations for every one law Congress passes.
Resolving Disputes and Enforcing Regulations
Agencies also have the unique power to “adjudicate” various claims related to their regulations and programs. A government official follows the mandates of the APA and the agency’s own rules to resolve a dispute between a private party and the government or between two private parties arising out of a government program. Just as regulations mirror legislative functions, adjudications and orders function similar to a court system. Administrative Law Judges (ALJs) preside over hearings and agency disputes. However, they are not part of the judicial branch but are considered executive officers and appointed by the head of an agency. After all internal processes of review are exhausted, an ALJ’s final determinations may be appealed to a federal court for review.
Deference to Agency Expertise: Recent Developments
This past June, the Supreme Court of the United States decided a pivotal administrative law case in Loper Bright Enterprises v. Raimondo. The Court expressly overruled the Chevron doctrine, referring to a case that gave significant deference to federal agencies in interpreting ambiguous statutes they were charged with enforcing and implementing. Under the Chevron doctrine, a court would defer to an agency’s interpretation of an ambiguous law as long as the interpretation was reasonable and even if the court would have interpreted the law differently.
In Loper Bright, the High Court reversed this doctrine and determined that a court could question an agency’s interpretation of an ambiguous law, placing more decision-making power for interpreting ambiguous statutes largely in the hands of the judicial branch.
Agriculture is an industry that interacts constantly with statutes that are interpreted and enforced by federal agencies. Pesticide regulations, wetland determinations, PFAS limits, and crop insurance are all areas soaked with uncertainty after Loper Bright. While the regulations do not automatically change, interested parties may be more willing to challenge regulations in the wake of the Supreme Court’s decision. The potential difference between a judge and agency interpretation of an ambiguous law may create new excitement for agricultural groups (and many other industries for that matter) for an opportunity that a court might overrule what they see as undesirable agency rules. Or will Congress be more incentivized to write unambiguous laws that give agencies clear direction in every situation because of Loper Bright? We will wait and see. Both practical and substantive impacts of the Loper Bright decision are still developing, but it could reduce agency authority to some extent.
To learn more about federal agencies
If you are interested, here are additional educational resources on the topics discussed in this post:
Tags: principles of government, agencies, rulemaking, regulations, federal, administrative law
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Nearly 39% of the 880 million acres of farmland in the United States is leased, and in Ohio, this figure approaches 50%. Many individuals who inherit or purchase farmland have limited experience in agricultural management, creating uncertainty regarding effective land stewardship. To assist these novice farmland owners, Ohio State University's Agricultural and Resource Law Program is pleased to announce the release of our latest publication, "The Beginner’s Guide to Farmland Ownership", authored by Robert Moore, Attorney and Research Specialist at OSU. This practical, user-friendly resource is now available for download at farmoffice.osu.edu.
Owning farmland is not only a rewarding opportunity but also a significant responsibility, particularly for new landowners with limited farming experience. Whether you've inherited farmland or recently purchased it, navigating complex decisions such as leasing, selling, or managing alternative land uses can be challenging. This 48-page, comprehensive guide was developed to help new landowners understand and manage their farmland effectively.
"The Beginner’s Guide to Farmland Ownership" addresses key areas that every new landowner needs to understand. Topics include understanding farmland valuation, exploring leasing arrangements (cash rent, share rent, and flex leases), considerations when selling farmland, managing tax implications, and assessing alternative land uses such as renewable energy or conservation easements. Additionally, the guide explores strategies for protecting farmland through legal instruments and minimizing risk through insurance and business entities.
Visit farmoffice.osu.edu to access this publication.
Part 3 in our series on Carbon Capture and Storage
As expected, proposed legislation to allow for carbon capture and storage wells (CCS) was introduced this week in the Ohio General Assembly. The legislation opens the door for CCS underground injection wells to store captured carbon dioxide in “pore space” or cavities far beneath the land’s surface. As we explained in Part 1 and Part 2 of our CCS series, CCS technology removes carbon dioxide from the atmosphere to reduce greenhouse gas emissions and can also trigger final production in an oil or gas field. If passed, the new law would affect agricultural landowners, who could be asked to lease their “pore space” for CCS projects.
The identical CCS bills introduced in the Ohio House of Representatives and Senate are H.B. 170, sponsored by Rep. Monica Robb Blasdel (R-Columbiana) and Rep. Bob Peterson (R-Sabina) and S.B. 136, sponsored by Sen. Tim Schaffer (R-Lancaster) and Sen. Brian Chavez (R-Marietta). The proposal varies in several places from a bill introduced late last year, the result of “fine tuning” by interested parties over the winter, according to Rep. Blasdel.
The proposed legislation includes clarification of the pore space property interest, a regulatory framework and fees for injection wells, consolidation or “pooling” provisions, well closure procedures, and liability provisions for carbon dioxide migration.
Clarification of “pore space” as a real property interest
Currently, Ohio does not have statutory laws that recognize pore space as a real property interest. The proposal would change that by recognizing that the owner of surface lands and water also owns “all pore space in all strata below the surface lands and waters.” The definition of “pore space” is “subsurface cavities and voids, whether natural or artificially created, that are suitable for use as a sequestration space for carbon dioxide.”
The proposal also addresses conveyancing of pore space, stating that a conveyance of surface ownership also conveys the pore space interest unless the pore space is expressly reserved or severed from the surface interest. This means a landowner could sever pore space rights and convey those separate from the surface, as Ohio law currently allows with minerals. A severed pore space interest would have priority over the surface interest. The proposal also addresses the relationship with mineral interests, stating that severed mineral or oil and gas interests would be dominant over pore space rights.
Regulatory framework for CCS injection wells
The proposed legislation would place state regulatory authority over CCS storage facilities in Ohio’s Division of Oil and Gas Resources Management in the Ohio Department of Natural Resources (ODNR). Note that the federal Safe Drinking Water Act also requires CCS injection wells to have a Class VI injection well permit from the U.S. EPA, although with the passage of the proposed bills, Ohio hopes to receive approval from the EPA to administer the state’s Class VI permit program.
The bills directs ODNR to adopt rules for CCS. At a minimum, the rules must include:
(1) Requirements for the operation and monitoring of a carbon dioxide well;
(2) Safety concerning the drilling and operation of a carbon dioxide well;
(3) Spacing, setback, and other provisions to prevent storage facilities and storage operators from impacting the ability of owners of oil and gas interests to develop those interests;
(4) Protection of the public and private water supply, including the amount of water used and the source or sources of the water;
(5) Fencing and screening of surface facilities of a carbon dioxide well;
(6) Containment and disposal of drilling and other wastes related to a carbon sequestration project;
(7) Construction of access roads for purposes of the drilling and operation of a carbon dioxide well;
(8) Noise mitigation for purposes of the drilling of a carbon dioxide well and the operation of such a well, excluding safety and maintenance operations;
(9) Liability insurance to pay damages for injury to persons or property caused by the construction or operation of the storage facility;
(10) Liability insurance coverage of at least fifteen million dollars to cover bodily injury and property damage caused by the construction, drilling, or operation of wells, including environmental coverage.
(11) A surety bond sufficient to cover corrective actions, plugging, post-injection site care prior to receipt of a certificate of project completion, and emergency or remedial response.
The proposed law also states that ODNR may require a CCS storage well operator to deploy a seismicity monitoring system to determine seismic activity in the carbon storage area and requires a well operator to show that owners of oil and gas will not be adversely affected by the well. Both the well operator and the well owner would pay fees to ODNR for the amount of carbon dioxide stored in the well.
Consolidation or “pooling” of pore space
If a well operator can’t obtain the consent of all pore space owners within a proposed storage area, the legislation would allow the operator to apply for “consolidation” if the operator has consent from at least 75% of the pore space owners. The remaining percentage of pore space owners could be “forced” into the project if ODNR determines that the consolidation is “reasonably necessary to facilitate the underground storage of carbon dioxide.” Provisions would also address how to compensate the pore space owners.
Well closure
After carbon injections into a storage facility have ended and a period of 50 years passes, a storage operator may apply for a certificate of closure. If the operator can establish full regulatory compliance and that there is no potential of migration or threat to public health or the environment, the state may issue a certificate of project completion that releases the operator from regulatory requirements and transfers the primary responsibility and liability for the stored carbon dioxide to the state. An operator could remain liable, however, under several circumstances, such as criminal acts, providing deficient or erroneous information, or violating duties.
Liability
The proposal clearly protects owners of pore space and owners of surface or subsurface property interests from liability relating to the injection of carbon dioxide into a storage facility. It also limits any claims for damages against a storage operator to instances where the claimant can prove that the carbon dioxide injection or migration obstructed the free use of property, or caused direct physical injury to an individual, animal, or real or personal property. The bill prohibits awarding of punitive damages if the storage operator acted in compliance with the required permit, and limits damages for personal or real property to the “diminution” or loss of value of the property.
How will the legislation affect agricultural landowners?
Our next article in the Carbon Capture and Storage series will focus on issues agricultural landowners need to consider if the CCS legislation passes. Watch for Part 4 on CCS soon, along with continued updates on the progress of Ohio's CCS legislative proposals.
Tags: carbon capture and storage, CCS, carbon dioxide, pore space
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