Federal Estate Tax and Gift Tax Limits Announced For 2019

Image by Sridhar Sara. Image of barns and farm from road in Maryland

This is not a substitute for legal advice. 

            In November, the IRS announced the revised federal estate tax and gift tax limits for 2019.  The 2019 federal estate tax limit will increase from $11.18 million to $11.4 million.  The federal gift tax limit will remain at $15,000.  In Maryland, state estate tax limits will increase to $5 million, up from $4 million in 2018.

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2018 Farm Bill Makes Hemp Production Legal Only In Certain Situations

The article is not a substitute for legal advice. 

Image of hemp research plots with University of Kentucky. Image by University of Kentucky College of Agriculture, Food and Environment.

            Farmers across the country are looking to begin producing hemp.  The 2014 Farm Bill allowed states to develop hemp research programs, but the 2018 Farm Bill significantly changes the classification of hemp and allows states to begin developing regulations for legal hemp production.  The 2018 Farm Bill removes hemp from the definition of marijuana under the Controlled Substances Act and allows states and tribal governments to begin developing hemp production plans.  Hemp produced under these plans will potentially be eligible for federal crop insurance.  Although the 2018 Farm Bill has made changes to hemp, it is still currently not legal to grow hemp in Maryland until the state develops and has an approved hemp production plan in place.

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Year in Review: 2018 Ag Law Developments

Image of White Fence by Zach Stern via flickr.com

This is not a substitute for legal advice.

With 2018 over and 2019 underway, I want to take a minute to look back at many of the top legal developments impacting agriculture in 2018. Many of these legal developments may seem like repeats from my 2017 update; click here. For those interested embedded above is a join podcast episode I did with Tiffany Lashmet covering the top ag law developments. With those repeated issues, in many cases, we have seen resolutions, and we will probably continue to see litigation further develop with a few problems in 2019. Moving into 2019, we will likely see new issues emerge as a new Farm Bill is implemented and further developments in the international trade area. If you have not already signed up for updates, see the bottom of this post or any post on this site to get email updates sent to you as new content is available. Continue reading

A Word of Warning on Saved Seeds

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Tractor with square baler baying wheat straw.  Image is by Dennis Pennington, Bioenergy Educator, Michigan State University Extension from flickr.com

I recently wrote a column for Progressive Forage discussing saved seed laws and how these laws can impact seed selection in forage operations.  The column highlights patent law and the Plant Variety Protection Act (PVPA) and the penalties associated with each law. Continue reading

Long Term Leases Provide a Valuable Tool In Farm Succession Planning as Recent Court Case Highlights

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Wind turbines on farmland in Iowa.  Image by Mark Hesseltine from flickr.com.

The article is not a substitute for legal advice. 

Developing a farm succession plan that allows the next generation to take over the farm and provides for non-farm heirs is not an easy task. Often you will want to treat your children equally but keeping the farm viable for the next generation may not allow for equal treatment. Dividing the farmland equally may result in one heir getting fewer acres needed to support a family. Your heirs are human and will potentially carry grudges against a sibling. A recent decision out of Iowa highlights what can happen when a farm succession plan fails. In Gent v. Gent, Thomas sought an injunction from the Iowa courts to limit how his brother, John, could utilize family farmland John had leased. John had initially leased the farmland from their parents for twenty-five years. This court decision highlights why families should work to develop plans that work towards their goals. There is no one size fits all approach in this process and families will have to understand that communicating, goal setting, and adopting can be important in this process. Continue reading

Recent Nuisance Suits Involving Farms Highlight Why Farms Should Understand How a Right-to-Farm Defense Operates

Cover Crop Agriculture in Frederick County, Md.

Liquid manure being applied by a tractor a field in Maryland.  Photo by Matt Rath/Chesapeake Bay Program

This article should not be considered legal advice.

Over the course of 2018, you have probably seen the stories involving nuisance suits brought by neighboring landowners against hog farms in North Carolina, leading to large verdicts against Smithfield Foods. Similar lawsuits are going on around the country involving neighbors claiming nearby hog farms are nuisances. In many cases, the state’s right-to-farm law should provide a possible defense to the farm, but the farm needs to meet all the requirements in the right-to-farm law to use the defense. Understanding the requirements can assist in maintaining the right-to-farm defense. Continue reading

Maryland Court Upholds the 2014 CAFO Permit For Complying With EPA’s Requirements

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Dairy cattle eating feed.  Image by Stephanie Schupska, Univ. of Georgia, CAES/Extension.

The article is not a substitute for legal advice.

In 2014, the Maryland Department of the Environment (MDE) issued a new general discharge permit for concentrated animal feeding operations (CAFOs) in Maryland. The 2014 permit was to replace a 2009 permit that was set to expire. This 2014 permit required no effluent monitoring only implementation of best management practices to prevent discharge into waters covered by state law and the Clean Water Act (CWA). The 2014 permit is a zero discharge permit. Food & Water Watch and the Assateague Coastal Trust challenged the permit for not requiring enough monitoring to ensure compliance with the CWA. The Maryland Court of Special Appeals recently upheld the 2014 permit based on substantial evidence to demonstrate MDE had complied with the CWA requirements.

Background

In early 2014, MDE began to prepare for the expiration of the 2009 CAFO permit by developing the 2014 permit to take effect when the 2009 permit expired. MDE was in communication with the Environmental Protection Agency (EPA) informally during the development process and dealt with EPA’s comments. At no point during this informal review process, EPA never mentioned that the 2014 permit would need effluent monitoring. EPA approved the proposed 2014 General Discharge Permit, and MDE began the required public comment period.

During the public comment period, Food & Water Watch and Assateague Coastal Trust filed comments highlighting that the CWA requires NPDES permits to include conditions on collecting data and information. In the view of these two groups, MDE should require more than annually analyzing manure for phosphorous and nitrogen content and every three years collecting soil samples to analyze phosphorous and pH from land application fields. The two groups proposed that MDE should require more regular testing of water for nitrogen, phosphorous, and fecal coliform where wastewater flowed off the CAFO via drain ditches and other locations identified by the nutrient management planner.

In issuing the final permit, MDE rejected these arguments and highlighted its discretion. The CWA provides MDE with the discretion to require monitoring when MDE reasonably determines that monitoring equipment would help carry out the objectives of the CWA.   MDE also maintains authority in the 2014 permit to require additional best management practices when MDE determines additional practices are needed.

Food & Water Watch along with the Assateague Coastal Trust filed a suit against MDE claiming that the 2014 General Discharge Permit for CAFOs did not include chemical, biological, and physical monitoring requirements or effluent monitoring requirements. The circuit court affirmed MDE’s 2014 permit and the two groups filed an appeal with the Court of Special Appeals of Maryland.

Court’s Reasoning

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Image of poultry in house.  Image by Mark Risse, University of Georgia from Livestock and Poultry Environmental Learning Center.

Since this is an appeal involving an administrative agency’s decision, the court will typically defer to the agency’s decision if the agency supported the record with competent and substantial evidence. If the agency did not support a decision with competent and substantial evidence or where the agency draws impermissible or unreasonable inferences and conclusions from the evidence, then a court will remand to the agency for further development.

On appeal, the court rejects the first case Assateague Coastal Trust and Food & Water Watch relies on. In Maryland Dep’t of Env’t v. Anacostia Riverkeeper, the Court of Appeals of Maryland found the stormwater management permit included sufficient biological and physical monitoring. The two groups argue that the 2014 permit failed to included any monitoring of locations where pollutants from CAFOs could be entering bodies of water. This prior decision is focused on stormwater discharges and not a zero discharge permit. For this reason, not being on point, the court rejects this argument and moves on to two federal court decisions involving including monitoring in CWA permits.

Looking at the other decisions the two groups rely on, MDE had approved a zero discharge permit with the 2014 CAFO permit. The first decision, Natural Resource Defense Council, Inc. v. Cnty of Los Angles, the two groups argued stood for the idea that the NPDES permit must require effectively monitored discharges to show permit compliance to be lawful. MDE’s 2014 permit involved no discharges, and if a discharge does happen, the CAFO operator must have implemented the required nutrient management plan and other plans or violate the permit.

The next case, Natural Resource Defense Council, Inc. v. U.S. EPA, the groups argued demonstrated that MDE’s reporting requirements and usage of best management practices were inadequate under the terms of the CWA. The court disagreed with the two groups. This case cited by the two groups demonstrated that best management practices could be used in certain situations to comply with the CWA. The prior case cited CAFOs as one area where best management practices would be appropriate.

When it came to requiring monitoring of discharges by the CAFO operator, the court agreed with the arguments made by MDE. To the court, the 2014 permit was a zero discharge permit and monitoring was not necessary and that implementing best management practices helps ensure zero discharge of waste. When making land applications of manure, the CAFO operator must include the land application in a log book that must be maintained for five years and be made available to MDE for inspection.

The court concludes that based on the administrative record there is substantial evidence to support that MDE’s 2014 permit complied with EPA’s regulations and upheld the circuit court’s ruling.

Why Care?

The 2009 general permit for CAFOs issued by MDE was also upheld by the Court of

Bobby Morgan Poultry Farm

Concentrated Animal Feeding Operation example, a poultry house.  Image by Bob Nichols via USDA.

Special Appeals of Maryland with many of the same groups challenging that permit as challenged the 2014 permit. The 2014 permit will expire at the end of November 2019. MDE will work on the guidelines for issuing a new general CAFO permit to replace the 2014 permit once it expires.

This recent decision, along with the decision in the 2009 permit challenge, highlights that as long as MDE has substantial evidence to document why MDE made the choices it did with the permit, a court will typically uphold the permit. From this case, MDE worked informally with EPA to develop the 2014 permit to ensure that the permit met requirements in the CWA. Hypothetically, if the 2019 permit is challenged (after developing and issuing), then we might expect a similar outcome if MDE continues to work informally with EPA to ensure the next general CAFO permit meets the CWA requirements.

References

Food & Water Watch v. M.D. Dep’t of Envtl., No. 2602, 2018 WL 2203175 (Md. Ct. Spec. App. May 14, 2018).

Webinar Highlighting 2018 Farm Bill Now Available

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Soybean field with grain elevator in the background.  Image by United Soybean Board

In August, the Department of Agricultural and Resource Economics hosted a webinar covering the 2018 Farm Bill debate.  As I write and post this post, the Farm Bill is still being debated by the conference committee and this webinar covers the competing House and Senate versions of the Farm Bill.

The webinar featured Jonathan Coppas, Clinical Assistant Professor, University of Illinois. Mr. Coppas discussed where we are at in the process and changes in policies that producers should be aware of.

For more information on the Farm Bill, I encourage you to check out the Department of Agricultural and Resource Economics’ Farm Bill website. On the site, the AREC faculty cover many of these competing versions of the Farm Bill and potential impacts of the legislation.