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Written by: Evin Bachelor, Law Fellow, and Ellen Essman, Sr. Research Associate
The end of the year is here, and there is a flurry of news coming across our desks. We wish you a prosperous 2019 and look forward to keeping you up to date on what is happening in the agricultural law world.
Here’s our latest gathering of agricultural law news that you may want to know:
GMO labeling rule released by USDA. The Agricultural Marketing Service posted the National Bioengineered Food Disclosure Standard rule on the Federal Register, located here, on Friday, December 21, 2018. According to the rule page, the rule “establishes the new national mandatory bioengineered (BE) food disclosure standard (NDFDS or Standard).” The standards require foods labeled for retail sale to disclose certain information either through a new symbol, inclusion of a QR code that provides a link to a website, including a phone number to text for more information, or including the term “bioengineered” on the label. The rule defines bioengineered food as food that contains genetic material modified through changing DNA or other modifications that could not be done through conventional breeding or otherwise found in nature. Exemptions for foods served in restaurants and very small food manufacturers with gross receipts of less than $2.5 million limit the rule’s applicability. The rule will take effect on February 19, 2019, with compliance becoming mandatory by January 1, 2022. For more information, or to see the new label, visit the USDA Agricultural Marketing Service’s BE Disclosure webpage here.
Farm Bill provides good news for dairy farmers. Under the 2018 Farm Bill Conference Report, available here, the Margin Protection Program (MPP) was renamed the Dairy Margin Coverage (DMC). The name was not the only change made to the program. Per the USDA, the program “is a voluntary risk management program… offer[ing] protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.” The Farm Bill lowers the premium rates for risk coverage. Furthermore, the bill adds coverage levels of $8.50, $9.00 and $9.50 for a dairy operation’s “first five million pounds of participating production.” If a farmer covers his first five million pounds at $8.50, $9.00, or $9.50, he then has the option to cover anything in excess of five million pounds at coverage levels of $4.00-$8.00 (in fifty cent increments). Another notable change—the Farm Bill allows farmers who maintain “their coverage decisions, including coverage level and covered production, through 2023,” to “receive a 25% discount on their premiums each year.” The DMC language can be found in section 1401 of the Farm Bill.
Missouri farmer pleads guilty to wire fraud for falsely marketing grains as organic. Federal prosecutors charged Mr. Randy Constant with wire fraud, alleging that since 2008 he and his associates improperly marketed millions of dollars worth of grain as certified organic while knowing that it was not. Mr. Constant operated certified organic farms as part of his larger operation, but “at least 90% of the grain being sold was actually either entirely non-organic or a mix,” according to the information filed by the federal prosecutors. Federal prosecutors sought full restitution of approximately $128 million for victims/purchasers, in addition to the forfeiture of 70 pieces of equipment, ranging from pickup trucks to combines and semi-trucks to GPS yield mapping systems.
On December 20, 2018, Mr. Constant entered a plea of guilty. The magistrate filed a report indicating that Mr. Constant understood what his plea meant, and that the one count of wire fraud is punishable by (1) a maximum of 20 years in prison, (2) a maximum of 3 years of supervised release following prison, and (3) a maximum fine of $250,000. Further, Mr. Constant will be barred from receiving USDA benefits, including those from USDA Farm Service Agency, Agricultural Marketing Service National Organic Program, and Federal Crop Insurance Program. Additionally, Mr. Constant could face restitution to all victims/purchasers of approximately $128 million. For more information, search for United States v. Constant, 6:18-cr-02034-CJW-MAR (N.D. Iowa 2018).
Japan set to lower tariffs on agricultural commodities from TPP members and the EU. The United States exports a significant share of the beef, pork, wheat, and other farm products imported by Japan. However, two major trade agreements set to take effect early in 2019 will result in reduced tariffs for imports into Japan from a number of other countries. The United States withdrew from the Trans-Pacific Partnership negotiations, but 11 other nations continued to pursue the agreement, which is set to begin taking effect at the start of 2019. On February 1st, the Japan-EU Economic Partnership Agreement takes effect, and will result in lowered tariffs for a number of agricultural products, especially for beef. Under the new agreements, chilled or frozen beef from EU and TPP exporters will face a 26.6% tariff, while tariffs on American beef will remain at 38.5%. Prepared pork from EU and TPP exporters will face a 13.3% tariff, while tariffs on American pork will remain at 20%. For more information on Japan’s participation in the Trans-Pacific Partnership, visit the Ministry of Foreign Affairs of Japan’s TPP webpage here. For more information on Japan’s agreement with the European Union, visit the Ministry of Foreign Affairs of Japan’s EU agreement webpage here.
Ohio Case Law Update
- Signing a mortgage is enough to bind signatory despite not being named in the mortgage if the signature demonstrates an intent to be bound by the mortgage. The Bankruptcy Appellate Panel for the United States Sixth Circuit Court of Appeals asked the Ohio Supreme Court to clarify “whether a mortgage is invalid and unenforceable against the interest of a person who has initialed, signed, and acknowledged the mortgage agreement but who is not identified by name in the body of the agreement.” In this case, Vodrick and Marcy Perry filed for bankruptcy. At issue was a piece of property subject to a promissory note and mortgage. The bank held the promissory note, which was signed and initialed by Mr. Perry only, while the mortgage was signed by both Mr. and Mrs. Perry. The Ohio Supreme Court held that “the failure to identify a signatory by name in the body of a mortgage agreement does not render the agreement unenforceable as a matter of law against that signatory.” The focus is on the signor’s intent to be bound by the mortgage, even if the mortgage itself does not mention the signor by name. The case is cited as Bank of New York Mellon v. Rhiel, Slip Opinion No. 2018-Ohio-5087, and the Ohio Supreme Court’s opinion is available here.
- Specific reference in a deed to a mineral interest preserves the interest despite Marketable Title Act when the reference includes the type of interest created and to whom the interest was granted. Generally, Ohio’s Marketable Title Act allows a landowner with an unbroken chain of title for forty years or more to take an interest in the land free and clear of other claims that arose before the “root of title.” However, there is an exception where prior interests will still apply if there is a specific identification of a recorded title transaction, rather than a general reference to an interest. In this case, Nick and Flora Kuhn conveyed a 60-acre tract of land in 1915, but retained an interest in royalties from any oil and gas extracted from the parcel, specifically naming Nick and Flora Kuhn and their heirs and assigns. Then in 1969, the Blackstone family purchased the 60-acre parcel, and received a deed that included language “[e]xcepting the one-half interest in oil and gas royalty previously excepted by Nick Kuhn, their [sic] heirs and assigns in the above described sixty acres.” The Blackstone family sought to quiet title and have the Kuhn heirs’ interest extinguished or deemed abandoned in 2012. The Ohio Supreme Court interpreted the language in the deed as sufficient to survive Ohio’s Marketable Title Act, which preserves the Kuhn heirs’ oil and gas interest that dates back to 1915. The case is cited as Blackstone v. Moore, Slip Opinion No. 2018-Ohio-4959, and the Ohio Supreme Court’s opinion is available here.
Hemp is one of the most talked-about provisions of the new Farm Bill passed earlier this month by Congress and signed by the President on December 20. There’s a lot of excitement about the removal of federal restrictions on hemp production and the economic opportunities for growing hemp. But what exactly does the Farm Bill say about hemp? Can Ohioans now grow, use and sell hemp and hemp products? We dove into the 807 pages of the Farm Bill Conference Report (available here for your reading pleasure) to find answers to your questions about the new legal status of hemp and hemp cultivation.
What is hemp?
Before we go much further in this discussion, it’s important to understand that both hemp and marijuana are species of cannabis, but they have different properties. Of particular note is the fact that marijuana contains much more tetrahydrocannabinol (THC) than hemp. THC is the part of a cannabis plant that can cause a psychoactive effect in certain concentrations, but hemp plants generally do not contain enough THC to produce a “high.” Hemp has many uses— it can be used for construction materials, fabrics and clothing, and animal bedding. It has even been discussed as a potential cover crop. Cannabidiol, or CBD, is a very popular extract of the hemp plant that is alleged to help those with anxiety, pain, inflammation, and other ailments, but not much research has been done to verify its effectiveness for medical use. Note that CBD is also an extract of the higher THC marijuana plant.
Hemp is removed from the federal list of controlled substances—but only if it meets certain requirements
First and foremost, the Farm Bill removes hemp from the federal list of controlled substances. Section 12619 of the bill removes hemp from the definition of marijuana, which is still an illegal drug under federal law. In the same section, the bill federally decriminalizes tetrahydrocannabinols (THC) in hemp. Not all hemp, however, is subject to this exemption. Only hemp and THC as defined in the Farm Bill and as grown under the conditions set forth in the Farm Bill are accorded the exemption.
So, how does the Farm Bill change the definition of hemp? The main hemp provision of the bill, Section 10113, separates hemp from the definition of marijuana and redefines hemp as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
Coming soon: state and federal hemp production plans
The new law doesn’t allow a producer to start growing hemp today. Instead, Section 10113 of the Farm Bill describes the two situations under which a producer will be able to engage in legal hemp production in the future. In the first situation, the States or Indian tribes may take charge of the regulation of hemp production within their boundaries. To do this, a State must first submit a plan to the USDA through their state department of agriculture. A State plan must include:
- A way to keep track of land where hemp is produced within the state;
- Methods the state will use to test how much THC is in hemp plants;
- A way to dispose of plants or products that have a higher THC concentration than is legally allowed;
- A procedure for inspecting hemp producers;
- A plan for enforcing the law;
- A system for dissemination of a hemp producer’s information to the USDA; and
- Assurances that the state has the resources to carry out the plan.
A producer who wants to cultivate hemp in a State that has an approved hemp production plan must first comply with the State’s plan before beginning to grow hemp. Predictions are that it may take a State about a year to create its hemp production plan and obtain the required USDA approval for the plan.
The second situation for growing hemp comes into play if a State or Tribe does not submit a hemp plan to USDA. In this case, as long as the State has not limited the regulation or production of hemp under state law, the Secretary of Agriculture for the USDA may establish a plan “to monitor and regulate” hemp production within that State. A plan established by the USDA must meet the same criteria as a plan written by a State, and the law also requires the USDA to establish a licensing procedure for producers. Thus, a producer in a State that doesn’t have a hemp plan could legally grow hemp by obtaining a USDA hemp license through the hemp regulations that the USDA will develop, unless the State has prohibited hemp cultivation. Section 10113 specifically states that it does not preempt or limit any state law that “regulates the production of hemp” as well as any state law that is “more stringent” than federal law in regulating hemp production. Thus, a State can outlaw hemp production within its boundaries or include additional restrictions and requirements in its State plan as long as the plan complies with the federal law requirements.
Handling producer violations
What if a hemp producer doesn’t comply with the new law or with the State or USDA hemp production plan? Section 10113 also describes how violations of the law will be handled. If a hemp producer negligently violates a State or USDA hemp production plan, the producer could be subject to enforcement. One negligent violation of the plan would not trigger criminal punishment, but the violator would have to comply with a corrective action plan prescribed by the State or USDA. However, if a producer negligently violates a plan three times in five years, the producer will be banned from producing hemp for five years. Examples of negligent violations in the law include: not providing a legal description of the land where hemp is produced, growing hemp without obtaining a license “or other required authorization” from the State, Tribe, or USDA, or producing hemp with a THC concentration higher than 0.3 percent. If a producer violates a State or USDA plan “with a culpable mental state greater than negligence” (that is, purposely, knowingly, or recklessly), then the State or USDA must report the violation to law enforcement authorities. Furthermore, persons convicted of a felony relating to a controlled substance under state or federal law are generally barred from hemp production for ten years following the date of their conviction, with the exception of persons convicted of a controlled substances felony but lawfully participating in a pilot program under the 2014 Farm Bill. Finally, if a person falsifies an application to participate in hemp production, that person will be totally barred from producing hemp.
Legal hemp not to be prohibited in interstate commerce
The new law also allows for the interstate commerce of legally produced hemp and hemp products. Section 10114 says that a State or Indian Tribe cannot prevent the transportation or shipment of legally produced hemp through its state or territory. While a State may ban the sale of hemp or hemp products solely within its borders, it must allow hemp products to move freely through the State. For example, imagine that Pennsylvania allows hemp production but Ohio does not. Producers of legal hemp in Pennsylvania could not sell the hemp within Ohio, but Ohio could not prohibit a truck, train, or other type of transport from carrying the hemp through Ohio to a destination outside of Ohio.
Hemp becomes eligible for crop insurance
Importantly, the Farm Bill also addresses hemp production risk by amending the Federal Crop Insurance Act to include hemp. Section 11119 adds hemp to the definition of “agricultural commodities” that can be insured and section 11106 adds legally produced hemp to the list of crops that can be insured even after harvested. Other provisions in Title XI waive marketability requirements for researching hemp.
Making way for hemp research funding
Several provisions in the Farm Bill ensure that it is legally permissible to fund hemp research. Section 7129 amends the National Agricultural Research, Extension, and Teaching Policy Act to allow the Secretary of Agriculture to award grants for researching hemp and the development of hemp products. In section 7501, the bill amends the Critical Agricultural Materials Act to allow research on hemp, meaning that Congress believes hemp has the “potential of producing critical materials for strategic and industrial purposes.”
Finally, section 7605 amends the hemp pilot program language from the 2014 Farm Bill (for information on the pilot program, see our previous blog post). The Secretary of Agriculture is tasked with conducting a study on the pilot program and submitting a report on the study to Congress within a year. Section 7605 also repeals the hemp pilot programs, but only one year after final regulation on hemp production under section 10113 is published.
How does current Ohio law treat hemp production?
Ohio law defines marijuana as “all parts of a plant of the genus cannabis…” in Ohio Revised Code section 3719.01. Hemp is in the genus cannabis, as discussed earlier in this post. Therefore, under current Ohio law, hemp is the same as marijuana. Marijuana is a controlled substance under Ohio law, and the law states that “[n]o person shall knowingly obtain, possess, or use a controlled substance.”
What about hemp-derived CBD oil? Ohio enacted a medical marijuana law in 2016, although dispensaries in the state have yet to open (so far, only one dispensary in the state has been licensed). In order to obtain medical marijuana in Ohio, it would have to be prescribed by a physician with which the patient has a “bona fide physician-client relationship,” and the patient would have to have a qualifying medical condition. Medical marijuana can be prescribed and used in oil form under the law. Since Ohio law lumps hemp in with marijuana, this means that in order to obtain CBD oil derived from hemp, a person would also have to follow the steps to obtain medical marijuana. Hemp-derived CBD oil also does not fall under any exceptions in Ohio’s definition of marijuana. Ohio’s State Board of Pharmacy specifically stated in a guidance document that CBD oil can only be legally dispensed from a licensed dispensary. In releasing this guidance, the Board of Pharmacy is purporting to act under the rulemaking authority granted under ORC 3796.04.
Note, however, that there are exceptions to Ohio’s definition of marijuana. According to Ohio law, marijuana “does not include the mature stalks of the plant, fiber produced from the stalks, oils or cake made from the seeds of the plant, or any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin extracted from the mature stalks, fiber, oil or cake, or the sterilized seed of the plant that is incapable of germination.” Since hemp falls under the definition of marijuana, it is possible that some of these exceptions could also apply to certain hemp products made from stalks or seeds. Thus, it is plausible that some hemp products could be sold and used in Ohio. The law also states, however, that no person (other than those licensed under the medical marijuana law) “shall knowingly cultivate” marijuana. Again, since hemp is part of the state’s definition of marijuana, under the law, that means that nobody can “knowingly cultivate” hemp, either.
In sum, it appears as though some excepted hemp products could be sold in Ohio, but not CBD oil, as it does not fall under the exception. Even if some hemp products can be sold in Ohio, hemp itself cannot currently be cultivated in Ohio. The new hemp language in the Farm Bill allows states to be more restrictive with hemp than the federal government, so Ohio can continue its ban on certain hemp products even with the new federal law. The State cannot, however, stop the transportation of hemp across the State, as explained above. Conversely, Ohio’s General Assembly could remove hemp from Ohio’s definition of marijuana and redefine hemp according to the Farm Bill’s new definition, which could allow for legal hemp cultivation under the Farm Bill. For the time being, growing hemp in Ohio is not legal, but that is subject to change.
Stay tuned to the Ag Law Blog for continuing updates on hemp laws!
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.
Throughout the month of November, the Ohio Department of Health (ODH) announced proposed amendments to rules, as well as the rescission and replacement of one rule, in the Ohio Administrative Code (OAC) Chapter 3717-1, the Ohio Uniform Food Safety Code. The changes are being recommended due to the required five year review of rules by ODH, as well as to “update the rules to be consistent to the current version of the Food and Drug Administration’s (FDA) Model Food Code,” which is required under Ohio law.
While most of the amendments to the rules are grammatical, or have to do with formatting or updating language, small, substantive changes are made in several rules. For instance, the proposed changes in OAC 3717-1-01 would change several definitions to be “consistent with FDA’s Model Food Code.” It would further “correct the definition of general use pesticide and restricted use pesticide to be consistent with the Ohio Department of Agriculture’s law,” among other changes. Proposed changes to OAC 3717-1-02.3 to make it mandatory for all food employees to cover or “restrain” their hair in some way. The changes recommended for 3717-1-03.2 would add requirements for the storage of utensils being used during cooking, prohibit the use of latex gloves in food service operations and retail food establishments, and add “nail brushes” to the list of control measures used by “food employees contacting ready-to-eat food with bare hands.” Changes proposed for OAC 3717-1-03.4 would add new requirements for the contents of a HACCP plan. Suggested modifications to 3727-1-08.2 would make it mandatory for the “[c]ustom processing of game animals, migratory waterfowl or game birds in a food service operation or retail food establishment…[to] be done only at the end of the work shift or day to prevent any cross contamination of product for sale or service.”
Finally, ODH proposes that 3717-1-20, which concerns existing facilities and equipment in a food service operation or food service operation, be rescinded and replaced. Although this seems like a major change, there are no real substantive changes between the current rule and the proposed replacement; ODH is simply suggesting a considerable reorganization of the rule’s wording and formatting. The entire rules package is available here.
A hearing on the changes will be held on Thursday, December 20, 2018 at 11:00 a.m. at ODH. The address is: 35 East Chestnut Street Columbus, Ohio 43215. The hearing will take place in ODH Basement Training Room A. Those who may be affected by the rules are invited to attend and participate. Any written comments must be submitted by 5:00 p.m. on December 18, 2018 to ODHrules@odh.ohio.gov. More information about the hearing, as well as a brief description of the changes being made to each rule, can be found in this document.
The legislative Joint Committee on Agency Rule Review (JCARR) has voted to send the "watersheds in distress" rule revisions back to the Ohio Department of Agriculture (ODA). JCARR reviews administrative rules to make sure they follow legal requirements, which we explained in a previous blog post. The "watersheds in distress" rules seek to address agricultural nutrient impacts on water quality, also explained in an earlier post. At its meeting yesterday, JCARR members voted 8 to 1 to recommend that ODA revise and refile the rules for consideration at JCARR's next meeting on January 22, 2019.
The January 22 meeting date efectively removes Governor Kasich's administration from the rules revision. Kasich issued an executive order last July directing his agencies to prepare the controversial rule package. But the incoming DeWine Administration will control the fate of the rules since DeWine takes office on January 14, 2019. JCARR is apparently counting on the new administration to take a different approach on agricultural nutrient pollution reduction.
"There will be a new administration and we'll have maybe more productive talks," stated JCARR's chair, Sen. Joe Uecker (R-Loveland). "The DeWine Administration has demonstrated an interest on working with stakeholders on this issue."
The lack of stakeholder involvement was a common concern voiced by JCARR members, who stated that the rules had been rushed and did not involve all of the interested parties. Several committee members also suggested that the rules are inconsistent with legislative intent and will have a significant adverse impact on farmers. The Ohio Soybean Association, Ohio Corn & Wheat Growers Association, and Ohio Farm Bureau echoed those criticisms to JCARR members while several local residents, local groups and the Ohio Environmental Council testified that the rules would not sufficiently protect water quality.
If ODA fails to refile the rules proposal for the January meeting, JCARR will have 31 days to recomend that the Ohio General Assembly invalidate the rules. That action would allow each chamber five days to pass a resolution invalidating the rules; if the concurrent resolution does not pass within that time period, the rules would stand. Alternatively, ODA could remove the proposal from JCARR's agenda and refile revised rules at a later date, a likely course of action for the incoming DeWine administration.
The Joint Committee on Agency Rule Review (JCARR) plays an important role in Ohio’s government. Its review of new and old rules assists in verifying that administrative rules are not duplicative, overly-burdensome, or costly. Among other things, JCARR also helps to confirm that rules in fact carry out what the legislature had in mind when passing the law. In fact, on Monday, December 10, 2018, JCARR will decide the fate of the controversial watersheds in distress rules (we explained the proposed rules in this blog post) prompted by Governor Kasich’s July 2018 executive order.
The Joint Committee on Agency Rule Review, often referred to by its acronym, JCARR, was enacted by the Ohio General Assembly in 1977, and is codified in section 101.35 of the Ohio Revised Code. JCARR is charged with “review[ing] proposed new, amended, and rescinded rules” from Ohio’s administrative agencies. The state’s administrative agencies are numerous and include the Ohio Department of Agriculture, the Ohio Environmental Protection Agency, and the Ohio Department of Natural Resources, just to name a few. The administrative agencies are responsible for making the administrative rules to help carry out the Ohio General Assembly’s legislation.
Make-up of the committee
JCARR is made up of five members of each house of the Ohio General Assembly, meaning that five members from the house of representatives and five members from the senate make up the full committee. The speaker of the house appoints the five representatives, and the president of the senate appoints the five senators. The appointments must be bipartisan; each house may only appoint three members of the same political party. During the general assembly’s first regular session, the speaker of the house chooses the chairperson of JCARR from their house appointees, and the president of the senate chooses the vice-chair. During the second regular session, the chair and vice-chair are chosen in the reverse.
Conditions that rules must meet
If JCARR reviews an administrative rule and finds that rule to “violates one or more” of six requirements, the committee may “make a recommendation to invalidate the rule.” The six requirements are as follows:
- The rules do not exceed the scope of the rule-making agency’s statutory authority;
- The rules do not conflict with a rule of that agency or another rule-making agency;
- The rules do not conflict with the intent of the legislature in enacting the statute under which the rule is proposed;
- The rule-making agency has prepared a complete and accurate rule summary and fiscal analysis of the proposed rule, amendment, or rescission (Revised Code 127.18);
- The rule-making agency has met the incorporation by reference standards for a text or other material as stated in Revised Code 121.72, Revised Code 121.75, or Revised Code 121.76; and
- If the rule has an adverse impact on business (Revised Code 107.52), the rule-making agency has demonstrated through the business impact analysis, the Common Sense Initiative office recommendations, and the agency’s memorandum of response to the recommendations, that the regulatory intent of the rule justifies its adverse impact on business.
If a rule is found to violate any of the conditions listed above, a member of JCARR can move to recommend a resolution to invalidate the rule. The motion for invalidation must include the reason for the invalidation specifically based on one or more of the above conditions. The motion can be to invalidate the whole rule, or just part of the rule. If the motion for invalidation is seconded by another committee member, the members of JCARR can then vote on the motion. A majority of the committee is required to recommend a resolution for amended, revised, and rescinded rules. A two-thirds super majority is required to recommend a resolution to invalidate a no-change 5 year review.
If a motion for invalidation passes JCARR, the rule is put into suspension, meaning the administrative agency cannot proceed with the rule. A member of the committee then writes a concurrent resolution about invalidating the rule. Then, depending on which house the writer of the resolution comes from, the resolution goes to the house of representatives or senate, where the body has five session days to act on the resolution. If that time lapses, or there is no majority vote within five days, then the resolution dies, meaning the rule would no longer be suspended. If the resolution does pass the first body by majority vote, it then goes to the other house of General Assembly. Again, in the second body, the resolution must be voted on within 5 session days and be passed by a majority vote. If the resolution does not pass or is not voted on, again, the rule comes out of suspension. Finally, if the concurrent resolution for invalidating the rule passes both the house and senate, the rule is invalidated.
5 Year Review of Rules
Administrative agencies in Ohio must review their administrative rules every five years. The first part of the review requires the agency to ascertain whether or not the rule has a harmful effect on business in the state of Ohio. If the agency decides that the rule does have a bad impact on business, then the rule must be sent to the Common Sense Initiative office (CSI). The CSI is charged with finding ways to diminish the effects on business.
After the analysis of the effect on business, the agency decides whether or not the rule needs to be updated or removed. Upon deciding that a rule needs to be changed or removed, the agency must then file the rule with JCARR as a five year amended or rescinded rule. Then, JCARR goes through the process described above—the committee determines whether the amended or rescinded rule violates any of the six requirements, and if it does, the committee follows the process for rule invalidation.
If the agency determines that the rule should remain as it is, then it should file the rule as a five year no-change rule. JCARR then considers the following questions as pertains to the no-change rule:
- Should the rule be continued based on the intent of the statute under which the rule was adopted?
- Should the rule be amended to give more flexibility at the local level?
- Should the rule be rescinded or eliminated because of unnecessary paperwork?
- Does the rule meet the standards for incorporation by reference?
- Does the rule duplicate, overlap, or conflict with other rules?
- Is there a continued need for the rule?
- If the rule has an adverse impact on business, did the rulemaker demonstrate through the business impact analysis, CSI recommendations, and the memorandum of response that the regulatory intent of the rule justifies its adverse impact on business?
If JCARR finds that one of the above questions was violated or not sufficiently addressed by the agency, then the committee can entertain a motion for invalidation of the rule, triggering the rule invalidation process discussed above.
JCARR has an excellent website with informative videos and other information about its purpose and how it carries out the review process, available here. For a deeper dive into JCARR and the review process, the committee’s procedure manual is also very helpful.
The holiday season stands out as one of the most generous times of year as people give gifts to the people they love. What better way to get into the holiday spirit than to talk about the tax implications of your gifts? There are three shopping weekends left until December 25th, so here are three highlights about the federal gift tax that you should know:
1. The federal gift tax is assessed on the person who gives the gift, not the person who receives the gift.
An individual who gives a gift of cash or assets with a fair market value greater than $15,000 to any one person in a given year will have to report the gift(s) using IRS Form 709 when filing taxes for that year. These forms cannot be filed jointly, so if a married couple gives a gift that is worth more than $30,000 to any one person, both of them must file IRS Form 709 and report half of the value of the gift.
Form 709 requires a few pieces of information about the gift and who receives the gift. It asks for things like a description of the gift, the recipient’s name and address, when it was given, and its value. While documentation or receipts do not have to be submitted with Form 709, filers should keep records for themselves about the gift in case the IRS has questions.
The gift tax rates for 2018 range from 18 to 40 percent. The rates depend upon how much in excess of the $15,000 exclusion the gift is valued. For instance, a gift valued at $20,000 would have no taxes on the first $15,000, but the $5,000 over the $15,000 threshold would be subject to an 18 percent tax. The 40 percent rate applies to gifts valued at $1,015,000, or $1,000,000 over the $15,000 exclusion.
Fortunately for the recipient, the gift does not count as income to the recipient because the gift falls under the gift tax rules instead of the income tax rules.
2. Each individual may give up to $15,000 in gifts to any person per year free of federal gift taxes. Because this rule focuses on the individual giver, a married couple could give up to a combined $30,000 in gifts to any one person tax free.
To illustrate, if Bob and Betty Buckeye have a daughter, Bernice, both Bob and Betty can give Bernice $15,000 worth of gifts in 2018, for a total of $30,000, without having to pay taxes on the gift. If Bernice is married to Brutus, then Bob and Betty could also give a combined $30,000 gift to Brutus; however, that money is Brutus’s. The gift to Brutus cannot be used to hide a gift to Bernice.
Importantly, some gifts are excluded from the gift tax and do not count toward the $15,000 exclusion threshold. These include gifts to a spouse, gifts of tuition paid directly to the college or institution, gifts of medical expenses, gifts to certain exempt organizations like charities, and gifts to certain political organizations.
However, things like forgiving a debt, contributing to a 529 education plan, making an interest-free or below market rate loan, transferring the benefits of an insurance policy, or giving up an annuity in exchange for the creation of a survivor annuity do count as gifts. When these gifts exceed the $15,000 exclusion threshold, they are taxable.
The $15,000 threshold is new for 2018. In 2017, it was only $14,000. The IRS now revises the amount based upon inflation, but is expected only to do so periodically in $1,000 increments.
3. Under the new tax plan passed by Congress and signed by the President in 2017, the higher estate tax threshold has made gift giving less urgent as a tax planning strategy.
Many individuals used the gift exemption as a way to provide for the next generation while also lessening the risk or burden of federal estate taxes. However, the 2017 tax reform doubled the value of an individual estate that is exempt from the estate tax to $11,180,000. A couple may take advantage of that individual exemption, and, with proper planning, shield $22.4 million in assets from the federal estate tax. Unless an estate is likely to reach the applicable threshold, gifts may not be as important of an estate planning tool solely to avoid estate tax consequences.
Long-term planners may want to keep in mind that the new estate tax exemption is set to expire at the end of 2025. If the $11,180,000 exemption is not extended by the end of 2025, the law will revert back to what it was before the 2017 tax reform, thereby returning the estate tax exemption threshold to around $5.5 million.
Disclaimer: While the estate tax changes may have made gifts less relevant as an estate planning tool for some, this certainly does not mean that gifts should be cancelled this year. The OSU Extension Farm Office cannot take responsibility for that. It only means that more families can focus on giving for love, rather than taxes.
For more information on federal gift taxes, contact an accountant or attorney, or visit the Internal Revenue Service’s “Frequently Asked Questions on Gift Taxes” here. For more general information about how taxes affect agriculture, visit the OSU Extension Farm Office Tax Law Library here.
Written by: Ellen Essman, Sr. Research Associate, and Evin Bachelor, Law Fellow
Here’s our latest gathering of agricultural law news that you may want to know:
GIPSA as we know it is no more. A rule was released November 29, 2018 by the USDA as part of the Trump administration’s ongoing efforts to reorganize the agency. Of particular note, the rule, which was published in the Federal Register, eliminates the Grain Inspection, Packers and Stockyards Administration (GIPSA) as a “stand-alone agency.” According to the GIPSA website (which is currently still available here), the agency “facilitate[d] the marketing of livestock, poultry, meat, cereals, oilseeds, and related agricultural products, and promote[d] fair and competitive trading practices for the overall benefit of consumers and American agriculture.” The new administrative rule relocates GIPSA responsibilities to the Agricultural Marketing Service (AMS) Administrator. The change is not without controversy, as some farmers and agricultural groups argue that the protection of farmers through fair trading practices is antithetical to AMS, an agency responsible for marketing and promoting commodities. The rule is available here.
Supreme Court considers when habitat is “critical habitat” under the Endangered Species Act. The Supreme Court of the United States ruled in favor of private landowners when it recently determined that protected "critical habitat" for an endangered species must be habitat in which the species could actually survive. The Court's decision in Weyerhaeuser Co. v. United States Fish and Wildlife Service et al involved the dusky gopher frog, an endangered species that once lived throughout the coastal regions of Alabama, Louisiana, and Mississippi. Some of the habitat deemed by the U.S. Fish & Wildlife Service to be protected "critical habitat" for the frog was not actually occupied by the frog, and was instead being used for commercial timber production. Weyerhaeuser and other affected landowners brought suit, claiming that the land couldn't be critical habitat because the frog could not survive there without significant human intervention, such as intensive tree planting. The Court agreed that critical habitat "cannot include areas where the species could not currently survive." Weyerhouser and other landowners had also challenged the agency's cost-benefit analysis for the critical habitat designation, but the Fifth Circuit Court of Appeals disagreed and stated that it had no power to review the FWS analysis. The Supreme Court disagreed, stating that federal courts can review an agency's economic impact analysis to determine whether the agency abused its discretion or was arbitrary and capricious. With that guidance, the Supreme Court remanded the case back to the Fifth Circuit for further proceedings. The Supreme Court’s decision is here.
A second judge finds that Trump’s WOTUS repeal was not procedurally sound. Surprise, surprise, the WOTUS, or “waters of the United States” rule is in the news again. In many previous blog posts, we have chronicled decisions on the ever-present WOTUS rule (search “WOTUS” in our search bar for our other posts). Readers will recall that last February, the Trump administration published a new rule which was meant to repeal Obama’s WOTUS rule and replace it with the pre-2015 definition of WOTUS until a new definition could be developed. Trump’s rule was published on February 6, 2018, giving the administration until 2020 to come up with a new definition. On August 16, 2018, a district court judge in South Carolina found that the Trump administration did not comply with the requirements of the Administrative Procedure Act (APA) when it enacted the February 6 rule. Similarly, on November 26, 2018, Judge John Coughenour in the Western District of Washington found that “by restricting the content of the comments solicited and considered [about the February rule], the Agencies deprived the public of a meaningful opportunity to comment on relevant and significant issues in violation of the APA’s notice and comment requirements.” Rulemaking that violates the APA is invalid. Judge Coughenour’s full decision is available here.
Both the South Carolina and the Washington state district court decisions are applicable to the entire country. As a result, one might think that the Obama WOTUS rule should be in effect nationwide. However, it is important to remember that in some states, there are injunctions against carrying out Obama’s WOTUS rule. This means that it cannot be carried out in those states, and that the pre-2015 rule is actually effective in those states. EPA has a map depicting which version of the rule applies where. Uncertainty and WOTUS seem to be synonymous these days. The only thing we know for certain is that the WOTUS saga is not over, meaning things are likely to change again in the future.
Ohio Treasurer pioneers paying taxes with Bitcoin. Any business operating in Ohio may now pay certain taxes to the state of Ohio using Bitcoin, as recently announced by outgoing Ohio Treasurer Josh Mandel. The move makes Ohio the first state to accept Bitcoin as a form of tax payment. The official press release expressed hopes that other cryptocurrencies could be used, but at this time only Bitcoin will be accepted. Cryptocurrencies are said to be secure because they use blockchain, which is a digital register of transactions and information that is difficult to modify because changes to the register cannot be done by any single user. The Treasurer’s Office has specified 23 different taxes that can be paid with cryptocurrencies, including: Commercial Activity Taxes (CAT), consumer’s use taxes, Interest on Lawyers Trust Accounts (IOLTA) taxes, Pass-Thru Entity (PTE) taxes, sales taxes, and more. Paying with cryptocurrency is being accepted as an additional form of payment, as businesses can still pay with ACH credit, ACH debit, check, and money order. However, the state will not keep the cryptocurrency, but instead will use a third party to cash out the Bitcoin and convert it into U.S. dollars before depositing them into the state’s account. For more information, visit www.OhioCrypto.com or view the Treasurer’s Frequently Asked Questions page here.
Bayer prepares to bear with multiple jury trials over Monsanto’s glyphosate. Bayer AG continues to battle more and more plaintiffs claiming that their health problems were caused as a direct result of Monsanto’s Roundup and glyphosate. Another 600 plaintiffs have reportedly sued Bayer/Monsanto in the past two months since we last reported the number of lawsuits initiated with this argument. Following the multi-billion dollar verdict in California state court late this summer, more jury trials are set to begin. Over 620 cases have been filed in federal court, and the first case to reach a federal jury is now set for trial in San Francisco in February 2019. Another California state court case has been fast-tracked to be heard in March 2019 because of the condition and age of the plaintiffs. Yet another case is expected to be scheduled in Missouri state court for sometime later in 2019. The cases largely depend upon a plaintiff’s ability to convince a jury that his or her cancer was more likely than not directly caused by glyphosate. This question because controversial in 2015 when the United Nation’s World Health Organization released a report stating that the widely used herbicide is “probably carcinogenic to humans.” However, the U.S. Environmental Protection Agency issued a release in 2017 saying that its own findings demonstrate that glyphosate is unlikely to be carcinogenic in humans.
Is this pumpkin pie made of pumpkin? Thanksgiving dinner conversations often involve at least one debate for many families. Prompted by recent coverage in news outlets like the Wall Street Journal, one of the topics this year was whether grandma’s pumpkin pie is made of pumpkin, and whether it should be. At one end of the debate are those who say that pumpkin pie must be made from pumpkins, while others say that closely related squashes have a better flavor and consistency that make a pie taste the way a “pumpkin pie” should taste. Central to this debate is the status of firm-shelled, golden-fleshed sweet squash, which currently makes up a large portion of the market for “canned pumpkin.” The U.S. Food and Drug Administration (FDA) has a long-standing policy saying that labeling the golden-fleshed, sweet squash as “pumpkin” complies with the Food, Drug, and Cosmetic Act and the Fair Packaging and Labeling Act. Since 1938, the FDA has “consistently advised canners that we would not initiate regulatory action solely because of their using the designation “pumpkin” or “canned pumpkin” on labels for articles prepared from golden-fleshed, sweet squash, or mixtures of such squash with field pumpkins.” The FDA explains that allowing current labeling practice does not seem to mislead or deceive consumers. While the FDA declines to take a stand on the issue, families are free to continue to debate which ingredients make for the best pumpkin pie.
The midterm elections are over, and Thanksgiving is upon us. A lot of activity is expected out of Washington and Columbus as the legislative sessions wind up. The OSU Extension Agricultural and Resource Law team will continue to keep you up to date on the legal issues affecting agriculture as we enter into the holiday season.
Here’s our gathering of ag law news you may want to know:
State of Ohio sued over wind turbine setbacks. Four farmers in Paulding County have joined with The Mid-Atlantic Renewable Energy Coalition to sue the State of Ohio over wind turbine setbacks added to the 2014 biennial budget that some allege curtailed wind energy development in Ohio. In that budget bill, lawmakers included provisions late in the lawmaking process to amend Ohio Revised Code § 4906.20, which establishes the setback requirements for wind turbines. Those provisions more than doubled the distance that wind turbines must be located away from the nearest residential structures. The plaintiffs in this lawsuit allege that including these restrictions in the budget bill violated the single-subject provisions of the Ohio Constitution because the setbacks lack a “common purpose or relationship” to the rest of the budget bill. On this issue, the Ohio Supreme Court said in the case In re Nowak (cited as 2004-Ohio-6777) that the single-subject rule is a requirement that legislators must abide by, but that only a “manifestly gross and fraudulent” violation will result in the law being struck down. The plaintiff’s complaint is available here. Stay tuned to the Harvest for updates.
Department of Labor proposes rule requiring H-2A advertisements be posted online. The U.S. Department of Labor (DOL) published a notice of proposed rulemaking in the Federal Register on November 9th that would change how employers must advertise available positions before they may obtain H-2A worker permits. H-2A permits are work visas for temporary agricultural workers who are non-U.S. citizens. Currently, employers must advertise work in a local newspaper of general circulation for at least two consecutive days, one of which must be a Sunday. This requirement is located in the Code of Federal Regulations at 20 C.F.R. § 655.151. The DOL now proposes to modernize the recruitment advertising rule by requiring employers to post the jobs online instead of in print. The DOL’s notice explained that it believes online postings would more effectively and efficiently give U.S. workers notice of job opportunities. Further, the notice explained that the DOL intends to only require online advertisements, which would render newspaper advertisements unnecessary. U.S. Secretary of Agriculture Sonny Perdue issued a press release in support of the DOL’s proposal. The public may submit comments to the DOL about the proposed rule. Those wishing to comment may do so until December 10th, 2018, by visiting the proposed rule’s webpage in the Federal Register.
LLC agreement to adjust member financial contributions must be in writing. The Ohio Fourth District Court of Appeals recently affirmed a decision finding a verbal agreement to adjust contributions between members of a Limited Liability Company (LLC) to be unenforceable, even if the other party admitted to making the statements. Ohio Revised Code § 1715.09(B) requires a signed writing in order to enforce a “promise by a member to contribute to the limited liability company,” and therefore the court could not enforce an oral agreement to adjust contributions. The Fourth District Court of Appeals heard the case of Gardner v. Paxton, which was originally originally filed in the Washington County Court of Common Pleas. The plaintiff, Mr. Gardener, argued that his business partner breached an agreement to share in LLC profits and losses equally. In order to share equally, both parties would have needed to adjust their contributions, but Mr. Paxton only made verbal offers that were never reduced to writing. Because there was no writing, Mr. Paxton’s statements were not enforceable by his business associate against him.
Ohio legislation on the move:
The Ohio General Assembly has returned from the midterm elections with a potentially busy lame duck session ahead of it. Already a number of bills that we have been monitoring have seen activity in their respective committees.
- Ohio Senate Agriculture Committee held first hearing on multi-parcel auction bill. State senators heard testimony on House Bill 480 last Tuesday, November 13th. The bill would authorize the Ohio Department of Agriculture to regulate multi-parcel auctions, which are currently not specifically addressed in the Ohio Revised Code. The bill also defines “multi-parcel auction,” saying such an auction is one involving real or personal property in which multiple parcels or lots are offered for sale in part or in whole. The bill would also establish certain advertising requirements. The bill’s primary sponsor, Representative Brian Hill of Zanesville, says that he introduced the bill in an effort to recognize by statute what auctioneers are already doing, and to do so without interrupting the industry. The bill passed the Ohio House of Representatives 93-0 in June. For more information on the legislation, visit the House Bill 480 page on Ohio General Assembly’s website or view this bill analysis prepared by the Ohio Legislative Service Commission.
A few weeks ago we attended the American Agricultural Law Association’s (AALA) annual conference, which was held in Portland, Oregon this year. While we were there, we had the opportunity to learn about numerous topics related to agricultural law. One such topic was presented by our colleague from the National Sea Grant Law Center, Amanda Nichols. Nichols presented her research on state “right-to-farm” statutes and their applicability to aquaculture.
What is aquaculture?
For those who don’t know, aquaculture is defined by the National Oceanic and Atmospheric Administration (NOAA) as “the breeding, rearing, and harvesting of fish, shellfish, plants, algae, and other organisms in all types of water environments.” Thus, aquaculture is essentially the farming of aquatic species in freshwater and saltwater, in manmade and natural bodies of water.
What are right-to-farm laws?
Right-to-farm laws are meant to protect agricultural operations against nuisance lawsuits brought by neighboring landowners complaining about smell, dust, noise, or other annoyances. In terms of “traditional,” terrestrial farming, for example, right-to-farm laws could potentially protect against lawsuits claiming the spreading or accumulation of livestock manure is a nuisance to neighbors. Every state in the U.S. has their own right-to-farm statute, and some of the statutes protect farming operations more completely than others do. For example, Ohio’s right-to-farm language provides farmers with a complete defense to civil nuisance lawsuits when certain conditions are met. On the other hand, neighboring Michigan and Pennsylvania’s statutes provide no such defenses.
Where aquaculture and right-to-farm laws overlap
In her research on the topic of which states include protection of aquaculture operations in their right-to-farm laws, Nichols found that twenty-six states, including Ohio, “expressly include fish or aquaculture within the scope of their right-to-farm protections.” As a result, any right-to-farm protections to traditional agriculture, as well as any conditions agricultural operations must meet in order for the right-to-farm language to apply, would also extend to aquaculture in those twenty-six states. Nichols found that one state, New Jersey, did “not mention aquaculture or fish expressly” but has adopted a manual for best management practices (BMPs) for aquaculture within the state, which shows the state’s “intent” to protect aquaculture from nuisance lawsuits.
Ohio’s right-to-farm legislation
As mentioned above, Ohio’s right-to-farm legislation “expressly include[s]” aquaculture. It does so by defining “agricultural production” not only as “animal husbandry” or production of plants for “a commercial purpose,” but also as “commercial aquaculture” and “algaculture meaning the farming of algae.”
Ohio farmers, including those involved in aquaculture, have right-to-farm protection in two parts of the Ohio Revised Code (ORC). ORC Chapter 929 establishes “agricultural districts.” Generally, in order to place land in an agricultural district, the owner of the land must file an application with the county auditor. Certain requirements must be met in order for an application to be accepted. Slightly different rules apply if the land in question is within a municipal corporation or is being annexed by a municipality. If the application is accepted, the land is placed in an agricultural district for five years. The owner may submit a renewal application after that time is up.
Being part of an agricultural district in Ohio can help farmers and landowners to defend against civil lawsuits. ORC 929.04 reads:
In a civil action for nuisances involving agricultural activities, it is a complete defense if:
- The agricultural activities were conducted within an agricultural district;
- Agricultural activities were established within the agricultural district prior to the plaintiff’s activities or interest on which the action is based;
- The plaintiff was not involved in agricultural production; and
- The agricultural activities were not in conflict with federal, state, and local laws and rules relating to the alleged nuisance or were conducted in accordance with generally accepted agriculture practices.
The ORC’s chapter on nuisances provides additional protection for those “engaged in agriculture-related activities.” Under ORC 3767.13, people who are practicing agricultural activities “outside a municipal corporation, in accordance with generally accepted agricultural practices, and in such a manner so as not to have a substantial, adverse effect on public health, safety, or welfare” are typically exempt from claims of nuisance due to farm noise, smells, etc.
Not only is Ohio’s right-to-farm legislation more forceful in its protection of agriculture than many other states, but it also explicitly includes aquaculture under that protection. AALA gave us the chance to learn about this very interesting study of right-to-farm legislation as applies to aquaculture, which is an area of agriculture that many Ohioans might not necessarily think about. If you are interested in learning more about state right-to-farm laws and aquaculture, the National Sea Grant Law Center’s report is available here.