Tuesday, December 28, 2021

Livestock Indemnity Payments – What Are They? What Are the Tax Reporting Options?

Overview

The mid-December wildfire in Kansas resulted in loss of livestock along with damage to farm/ranch buildings and structures.  The wind damage was more widespread than just Kansas, and I wrote about the tax issues associated with demolishing farm buildings and structures that are no longer usable as a result of the storm here:   https://lawprofessors.typepad.com/agriculturallaw/2021/12/inland-hurricane-2021-version-is-there-any-tax-benefit-to-demolishing-farm-buildings-and-structures.html.

What I didn’t address in that article are the tax issues associated with the receipt of USDA Livestock Indemnity Program (LIP) payments for livestock deaths and the tax issues associated with the receipt of those payments.

USDA LIP payments and the associated tax reporting – it’s the topic of today’s post.

The LIP Program

The LIP program, administered by USDA’s Farm Service Agency (FSA), was created under the 2014 Farm Bill to provide benefits to livestock producers for livestock deaths that exceed normal mortality caused by adverse weather and other events such as attacks by animals that have been reintroduced into the wild, as well as death caused by certain diseases.  The 2018 Farm Bill expanded eligibility for LIP payments to contract growers.  LIP payments are also available to livestock owners that sell livestock at a reduced price due to an eligible loss condition.  Eligibility for LIP payments turns on the livestock owner providing sufficient evidence of an eligible cause of loss that was a direct cause of loss or death. 

Note:  Livestock deaths due to extreme cold are eligible losses (whether the livestock were vaccinated or not), as are livestock deaths due to disease as a result of particular causes. 

Payment amount.  The amount of a LIP payment is set at 75 percent of the market value of the livestock (as the USDA determines) on the day before the date of death.  For contract growers of poultry or swine, LIP payments are capped at the rate for owners, but are based on 75 percent of the national average input costs for the livestock at issue. 

Note:   Eligible livestock are those that were used as part of a farming operation as of the day of death.  This rule excludes animals such as those that are wild and free-roaming; pets; or animals used for recreational purposes (e.g., hunting, roping or for show). 

The market value of the livestock is tied to a “national payment rate” for each eligible livestock category as published by the USDA.  LIP payments are adjusted for normal mortality.  If LIP payments are issued for injured livestock that are sold at a reduced price, the payments are reduced by the amount the owner received on sale.  If the livestock are sold for more than the national payment rate there is no LIP payment.  

For contract growers, the LIP national payment rate is based on 75 percent of the average income loss sustained by the contract grower with respect to the livestock that died.  Any LIP payment that a contract grower is set to receive will be reduced by the amount of monetary compensation that the grower received from the grower’s contractor for the loss of income sustained from the death of the livestock grown under contract. 

Eligibility.  To be eligible for a LIP payment (for other than contract growers of poultry or swine), the livestock owner must have owned the livestock on the day the livestock died or were injured by an eligible loss condition.  The owner must have suffered a death loss that exceeded normal mortality as a direct result of an eligible loss condition, or sold the livestock at a reduced price as a result of an injury incurred as a direct result of an eligible loss condition.  Contract growers of poultry and swine must have had possession and control of the animals and a written agreement with the owner establishing the specific terms, conditions and obligations of the parties regarding the production of the livestock. 

Note:   Contract growers are not eligible for LIP payments based on injured livestock being sold at a reduced price due to an eligible loss condition. 

Eligible livestock and poultry.  Eligible livestock include beef bulls and cows, buffalo, beefalo and dairy cows and bulls.  Non-adult beef cattle, beefalo and buffalo are also eligible livestock.  Eligible poultry include chickens, broilers, pullets, layers, chicks, Cornish hens, roasters, super roasters, ducks, ducklings, geese, goslings, and turkeys. Swine is also eligible and includes nursery pigs, lightweight barrows and gilts, as well as sows and boars. Other eligible animals include alpacas, deer, elk, emus, equine, goats, llamas, ostriches, reindeer, caribou and sheep. 

Eligible loss condition.  An “eligible loss condition” includes an adverse weather event that was extreme and not expected to occur during the loss period for which it actually occurred.  The weather event must be a direct cause of the livestock losses.  An eligible disease is one that is made worse by an eligible adverse weather event that directly results in livestock losses.  It also includes diseases caused or transmitted by vectors where vaccination or acceptable management practices are not available.  An eligible loss condition may also be based on an attack by animals that have been reintroduced into the wild by the Federal Government.  The attack must have resulted in either death of livestock in excess or normal mortality rates, or the sale of the livestock at below market value. 

Note:   The livestock must have died within 60 calendar days from the ending date of the “applicable adverse weather event” and in the calendar year for which benefits are requested. 

Payment limitation.  The general $125,000 per person payment limitation does not apply to LIP payments.  But to be eligible for LIP payments, the applicant must have average adjusted gross income (AGI) over a three-year period that is less than or equal to $900,000.  For 2021, the applicable three-year period is 2017-2019. 

Note:   For a particular producer, the application of the AGI limitation could mean that tax planning strategies to keep average AGI at or under $900,000 need to be implemented.  That might include the use of deferral strategies, income averaging and/or amending returns to make or revoke an I.R.C. §179 election.

Direct attribution rules apply to LIP payments.  That means that the AGI limitation applies to the person or legal entity that requesting payment as well as to those persons or entities with an interest in the entity or sub-entity.   

Applying for payment.  An eligible producer (owner or contract grower) must submit a notice of loss and an application for LIP payments with the local FSA office.  A notice of loss must be submitted within the earlier of 30 days of when the loss occurred or became apparent.  In addition, an application for payment must be filed within 60 calendar days after the end of the calendar year in which the loss occurred.  Application for LIP payments is to be made with the local USDA/FSA office that serves the county in which the loss occurred.  For contract growers, a copy of the grower contract must also be provided.  For all producers, it is important to submit evident of the loss supporting the claim for payment via Form CCC-852.  Photographs, veterinarian records, purchase records, loan documentation, tax records, and similar data can be helpful in documenting losses.  Of course, the weather event triggering the livestock losses must also be documented.  If the livestock owner/grower is not able to provide acceptable records to prove death or loss of value due to injury, the owner/grower is to use a third-party certification via Form CCC-854.  The third party must be an independent source who is not affiliated with the farming/ranching operation, and cannot be a hired hand or family member. 

Tax Reporting

Given that the Kansas wildfire occurred mid-December, it is likely that any LIP payments will not be received until 2022.  For LIP payments that are paid out, the FSA will issue a 1099G for the full amount of the payment. That could create an issue for some livestock producers.

Death of breeding livestock.  While the 1099G simply reports the gross amount of any LIP payment to a producer for the year, there may be situations where a portion of the payment is compensation for the death loss of breeding livestock.  If the producer would have sold the breeding livestock, the sale might have triggered an I.R.C. §1231 gain that would have been reported on Form 4797.  If LIP payments were received for cattle or horses that the owner had held for 24 months or more from the acquisition date and the animals were held for draft, breeding, dairy or sporting purposes (assuming the LIP payment applies to animals held for a sporting purpose), then the LIP payment would constitute I.R.C. §1231 gain.  The holding period is 12 months or more for other livestock.  I.R.C. §1231 gain is reported on Form 4797 rather than Schedule F.  By being reported on Form 4797, self-employment tax will not apply.  However, the IRS will look for Form 1099G amounts paid for livestock losses to show up on Schedule F – most likely on line 4a (Agricultural Program Payments).  This raises a question as to whether it is possible to allocate the portion of the LIP payments allocable to breeding livestock from Schedule F to Form 4797. 

Income inclusion and deferral.  The general rule is that any indemnity payments (or feed assistance) are reported in income in the tax year that they are received.  That would mean, for example, that payments received in 2021 for livestock losses occurring in 2021 will get reported on the 2021 return.  Payments for livestock losses occurring in 2021 that were received in 2022 will be reported in 2022.

The receipt and inclusion in income of LIP payments could also put a livestock producer in a higher income tax bracket for 2021/2022.  In that instance, there might be other tax rules that can be used to defer the income associated with the livestock losses.  Under I.R.C. §451(f), the proceeds of livestock that are sold on account of weather-related conditions can be deferred for one year.  Under another provision, I.R.C. §1033(e), the income from livestock (not poultry) sales where the livestock are held for draft, dairy or breeding purposes that are involuntarily converted due to weather can be deferred if the livestock are replaced with like-kind livestock within four years.  The provision applies to the excess amount of livestock sold over sales that would occur in the course of normal business practices. 

While I.R.C. §451(f) requires that a sale or exchange of the livestock must have occurred, that is not the case with the receipt of indemnity payments for livestock losses.  So, that rule doesn’t provide any deferral possibility.  The involuntary conversion rule of I.R.C. §1033(e) is structured differently.  It doesn’t require a sale or exchange of the livestock, but allows a deferral opportunity until animals are acquired to replace the (excess) ones lost in the weather-related event   Thus, only the general involuntary conversion rule of I.R.C. §1033(a) applies rather than the special one for livestock when a producer receives indemnity (or insurance) payments due to livestock deaths.  Thus, for LIP payments received in 2022, they will have to be reported on the 2022 return unless the recipient acquires replacement livestock within the next two years – by the end of 2024.  Any associated gain would then be deferred until the replacement livestock are sold.  At that time, any gain associated gain would be reported and the gain in the replacement animals attributable to breeding stock would be reported on Form 4797.

Conclusion

Livestock losses due to weather-related events can be difficult to sustain.  LIP payments can help ease the burden.  Having the farming or ranching operation structured properly to receive the maximum benefits possible is helpful, as is understanding the tax rules and opportunities for reporting the payments.

December 28, 2021 in Income Tax, Regulatory Law | Permalink | Comments (0)

Friday, December 3, 2021

Recent Court Decisions of Interest

Overview

I always find it amazing how often legal issues present themselves for farmers and ranchers.  In 30 years of being involved in issues involving agricultural law and taxation, I have never had a shortage of client issues to deal with or matters to write or speak about.  It literally has been non-stop. 

As usual, the courts continue to issue opinions involving farmers and ranchers and tax matters of importance to an even broader set of taxpayers.  In today’s post, I highlight just a few of the recent ones.

Recent court opinions involving agricultural law and taxation – it’s the topic of today’s post.

Farmer’s Marijuana and Firearm Conviction Upheld

United States v. Lundy, No. 20-6323, 2021 U.S. App. LEXIS 33551 (6th Cir. Nov. 9, 2021)

After receiving a complaint that the defendant was growing cannabis on his property, state police officers investigated the property and found a large crop of cannabis plants, growing equipment, hundreds of pounds of processed cannabis with levels of THC meeting the standard for a controlled substance.  The defendant had a past criminal history and unauthorized firearms were also found in his possession.  The defendant had also been denied an application for a hemp license the previous year due to his criminal history involving marijuana and drug paraphernalia. 

While being interviewed by police, the defendant emphasized that the marijuana on the property was for personal use and not for sale, though he admitted to giving marijuana away.  He claimed that the firearms were for protecting his farm from nuisance animals and self-protection.  Also at this interview, the defendant offered to smoke marijuana with the police officer conducting the interview.  The defendant was arrested, charged with possession of a firearm by a user of controlled substances and ultimately sentenced to 46 months imprisonment. 

The defendant appealed his conviction, claiming that the government failed to prove that he knew he was prohibited from possessing a firearm, and that the government failed to prove that he knew he was possessing and manufacturing marijuana.  To sustain a conviction, the government bears the burden to prove that the defendant took drugs with regularity, over an extended period of time, and contemporaneously with his purchase or possession of a firearm.  The defendant claimed that because he thought he was using hemp, the government failed to prove that he knew he used a controlled substance.  In refuting the defendant’s claim, the government presented evidence of the defendant’s substance use, including prior testimony by the defendant about his use of marijuana throughout his entire adult life, testimony that he smokes pounds of marijuana a year, findings from the search of his property, testimony that the marijuana found was for personal use, the man’s offer to smoke marijuana with the police officer, and urine and hair samples that tested positive for high levels of THC.  The court upheld the defendant’s conviction on the basis that there was overwhelming evidence that the defendant used marijuana with regularity and at the same time as his possession of firearms.

Note:   Lundy clearly went, as the songwriter in the 1970s put it, “one toke over the line…”.

Rerouting of Irrigation Ditches Not a Taking

Ministerio Roca Solida_ Inc. v. United States, No. 16-826L, 2021 U.S. Claims LEXIS 2277 (Fed. Cl.  Oct. 25, 2021)

The federal government has the right of eminent domain.  In other words, it can take your property if it wants to.  But, under the Constitution, a taking must be for a public purpose and the government must pay “just compensation” for what it takes. 

In this case, a ministry owned a forty-acre parcel of land, which included a church camp, located within the boundaries of a national refuge.  The refuge is home to many native plants and animals, including certain endemic species of fish that the United States Fish and Wildlife Service (USFWS) committed to protecting beginning in 1995.  The USFWS’s protection plan included filling in irrigation ditches to return spring waters back to their historic paths.  As a result of this plan, the ministry’s church camp was washed away in a series of floods caused by heavy rainfall.  Camp buildings, access ways, and other improvements were swept away.  The ministry alleged that construction of the spring water restoration channel caused the destructive flooding and constituted a total physical taking of its property, for which it was entitled to just compensation.  Repairs were estimated at a cost of over $200.000. 

While it is well-established that government-induced flooding of property can constitute a compensable taking for purposes of the Fifth Amendment, the court found that the ministry did not meet its burden of proving that the government’s construction of the restoration channel caused the flooding that occurred.  The refuge had a long history of flooding, which was demonstrated by historical satellite images and expert testimony.  Additionally, the Federal Emergency Management Agency had designated the ministry’s property as a high-risk flood zone, and informed it of floodplain ordinances requiring that buildings in flood zones be elevated or flood-proofed and anchored.  Upon receiving this information, the ministry took no actions to bring itself into compliance with the ordinances.  Consequently, the weight of the evidence showed that the flooding of the church camp would have occurred regardless of whether the restoration channel was built. 

Farmers Detrimentally Relied on Crop Supply Salesman to Check Crops

Dettenhaim Farms, Inc. v. Greenpoint Ag, LLC, et al., No. 54,162-CA, 2021 La. App. LEXIS 1729 (La. Ct. App. Nov. 17, 2021)

The plaintiff corporation is a tenant farmer.  Over a period of at least 25 years, a close friend would check the corporation’s crops for stinkbugs.  The friend became employed by the defendant and continued checking the plaintiff’s crops for stinkbugs.  Eventually, confusion over the corporation’s credit account arose and the defendant’s location manager told the friend that he should tell the plaintiff’s owner and his father that they probably needed to find somewhere else to do business.  The manager also told the friend that the friend might not need to go back to the plaintiff’s fields.  The friend never communicated this to farmers, and neither did anyone with the defendant.  The manager did have a phone conversation with the farmers and thought they knew what he meant, but never told the farmers that the friend would no longer be checking their fields.  In late summer, the farmers discovered that their soybean fields had not been checked and that, by then, stinkbugs had caused major damage to the crop. 

Upon harvest, yield was dramatically reduced. The plaintiff sued the defendants after harvest for lost profit and also alleged that a different crop consultant could have been found if the friend and/or the defendants had given timely notice that crop consulting services had stopped.  The plaintiff’s petition was later amended to add an allegation that the reduced soybean yield caused a premature sale of a cattle herd in order to compensate for the lack of revenue from the sale of harvested crops.  The trial court heard testimony from various experts as to economic loss, and concluded that the plaintiff justifiably relied to its detriment on the defendants to advise concerning the products to use on the plaintiff’s fields and when to apply them.  That justifiable reliance, the trial court concluded, caused the plaintiff to change position to its detriment.  The trial court also determined that the defendants owed a duty to the plaintiff and failed to conform to that duty resulting in substantial crop damage which could have been avoided if the defendants had inspected the crops. 

As to damages, the trial court accepted the methodology of a CPA that examined yield on nearby farms and concluded that the plaintiff sustained damages of $246,334,  The trial court rejected the defendants’ argument that the plaintiff failed to mitigate damages by waiting at least two weeks to spray for stinkbugs after discovering the infestation.  At the time of discovery of the stinkbug problem, the trial court determined, the crop damage had already occurred and the second wave of bugs didn’t arrive until two weeks later.  However, the trial court, rejected the plaintiff’s claim that it was forced to sell 600 head of cattle to pay down debt because of the lost crop revenue.  The trial court also rejected an emotional distress claim. 

On appeal, the appellate court upheld the trial court’s finding of causation of damages to the soybean crop by the defendants.  On the damages issue, the appellate court reduced the award to $148,946 based on the best historical yields over a five-year span rather than the yield from nearby field in 2016 (the year of the crop loss) based on the standard for calculating damages set forth in Aultman v. Rinicker, 416 So. 2d 641 (La. Ct. App. 1982).  The appellate court also determined that, based on the evidence, the plaintiff failed to mitigate damages and, as a result, reduced the damage award further to $134,051. 

No Deduction For Excess Rent – Bad Valuation

Plentywood Drug, Inc., et al. v. Comr., T.C. Memo. 2021-45

The petitioner, a drug store in a rural town in northeast Montana, claimed rent deduction for the main floor of the building it rented.  The petitioner estimated the value of the main floor at $25 per square foot.  Upon audit, the IRS rejected the petitioner’s valuation and pegged the value at $7.17 per square foot.  The Tax Court rejected both valuations and determined that the rental value was $15.90 per square foot.  As a result, the petitioner couldn’t claim approximately $40,000 in deductions attributable to “excess” rent.  In addition, the rents paid exceeding the $15.90 per square foot threshold were non-deductible constructive dividends to the building owners.  The Tax Court also rejected the IRS imposition of penalties under I.R.C. §6662.  The Tax Court noted that real estate data are not publicly available in Montana which complicates efforts to appraise property values and reasonable rents. 

EIP Not Exempt From Garnishment 

United States v. Ruiz, No. EP-19-CR-03035(1)-DCG, 2021 U.S. Dist. LEXIS 217327 (W.D. Tex. Nov. 10, 2021)

The plaintiff was sentenced to five years in prison with five years of supervised release and ordered to pay restitution in early 2021.  As of August of 2021, the plaintiff still owed the full amount.  The government moved to garnish his bank account containing $3,982.23.  The plaintiff claimed that $1,700 contained in the bank account was from a stimulus payment (“Economic Impact Payment”) paid under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and was exempt from garnishment as an unemployment benefit to provide relief from “economic challenges” faced as a result of the virus.  The court noted that the statutory language providing for the payment classified it as a “recovery rebate” taking the form of a tax credit, and did not refer to it as an “unemployment” benefit.  It was not conditioned on the lack of employment.  The court held that the payment was also not properly classified as unemployment insurance, but was separate and distinct from unemployment insurance.  Accordingly, the payment was not protected from garnishment under 18 U.S.C. §3613(a)(1) and 26 U.S.C. §6334. 

December 3, 2021 in Contracts, Criminal Liabilities, Income Tax, Regulatory Law | Permalink | Comments (0)

Monday, October 11, 2021

Caselaw Update

Overview

It’s been a while since I highlighted a few recent cases for the blog.  Today is that day.  Recently, the court have decided cases about a packing plant’s potential liability exposure to employee claims about the virus; a legal challenge to the beef checkoff; C corporation distributions; and whether a trade or business existed in a rather unique setting.

Caselaw update – it’s the topic of today’s post.

Meat-Packing Plant Employees Can’t Sue Over Virus Claims 

Fields v. Tyson Foods, Inc., No. 6:20-cv-00475, 2021 U.S. Dist. LEXIS 181083 (E.D. Tex. Sept. 22, 2021).

The plaintiffs were defendant’s employees. They sued for negligence and gross negligence, alleging that the defendant failed to take adequate safety measures, such as not providing personal protective equipment and not implementing social-distancing guidelines, which caused them to contract COVID-19. The plaintiffs argued that the defendant failed to satisfy a duty of care to keep its premises in a reasonably safe condition, and that it failed to exercise ordinary care to reduce or eliminate the risk of employees being exposed to COVID-19. The defendant filed a motion to dismiss for a failure to state a claim upon which relief can be granted. The defendant argued that the Poultry Products Inspection Act (PPIA) as promulgated by the Food Safety and Inspection Service (FSIS) of the Department of Agriculture contained an express-preemption clause that foreclosed the plaintiffs’ claims. Additionally, the defendant argued that the recently passed Pandemic Liability Protection Act (PLPA) provided the defendant retroactive protection against damages lawsuits that alleged exposure to COVID-19. The trial court agreed and noted that the PPIA’s express-preemption clause overrode state requirements that are different than the regulations. The trial court noted that although the plaintiffs argued that the defendant failed to impose adequate safety measures to reduce the spread of COVID-19 in its facility, the FSIS promulgated a number of regulations under the PPIA that directly addressed the spread of disease. The trial court held that the duty of care alleged by the plaintiffs’ negligence claim would require the defendant to utilize additional equipment, therefore the plaintiffs’ claims were preempted by federal law. The trial court next addressed the PLPA, which generally shields corporations from liability if an individual suffers injury or death as a result of exposure to COVID-19. The trial court noted that the plaintiffs needed to allege that the defendant either knowingly failed to warn them or remedy some condition at the facility that the defendant knew would expose the plaintiffs to COVID- 19, or that the defendant knowingly contravened government-promulgated COVID-19 guidance. Further, the plaintiffs must allege reliable scientific evidence that shows that the defendant’s conduct was the cause-in-fact of the plaintiffs’ contracting COVID-19. The trial court noted that the plaintiffs failed to provide any reliable scientific evidence that showed that the defendant was the cause-in-fact of the plaintiffs’ contracting COVID-19. Because the plaintiffs merely made conclusory statements that they contracted COVID-19 due to unsafe working conditions, without alleging how or when they contracted COVID-19, the trial court held the plaintiffs’ complaint failed to satisfy the PLPA. Upon granting the defendant’s motion to dismiss, the trial court noted that even if the plaintiffs amended their complaint to satisfy the causation prong, the PPIA preemption clause would still foreclose the plaintiffs’ claims. 

Lawsuit Challenging Changes to Beef Checkoff Continues

Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America v. United States Department of Agriculture, et al., NO. 20-2552 (RDM), 2021 U.S. DIST. LEXIS 187182 (D. D.C. Sept. 29, 2021).

The plaintiff, a cattle grower association, sued the United States Department of Agriculture (USDA) claiming that the USDA made substantive changes to the Beef Checkoff Program in violation of the Administrative Procedure Act (APA) by entering into memorandums of understanding (MOUs) with various state beef councils. The plaintiff asserted that such amendments should have been subject to public notice-and-comment rulemaking. The MOUs gave the USDA more oversight authority over how the state beef councils could use the funds received from the checkoff. In other litigation, the USDA has been claiming oversight authority (even though not exercised) over state beef councils to argue that the beef checkoff is government speech rather than private speech in order to defeat First Amendment claims. In the present litigation, the USDA motioned to dismiss the case for lack of standing. The court denied the USDA’s motion on the basis that the plaintiff, on the face of its claim, had established sufficient elements of associational standing – that at least one of the plaintiff’s members had suffered a diminished return on investment as a result of the MOUs. The court did not address the factual question of the plaintiff’s standing. The USDA’s had also asserted a defense of claim preclusion but the court postponed examining that issue until additional evidence was submitted allowing the court to fully address the issue of jurisdiction.

Lack of Documentation Leads to Receipt of Constructive Dividends

Combs v. Comr., No. 20-70262, 2021 U.S. App. LEXIS 28875 (9th Cir. Sept. 23, 2021), aff’g., T.C. Memo. 2019-96.

The petitioner was the sole shareholder of a C corporation in which he housed his motivational speaking business. The fees he earned were paid to the corporation. The corporation paid him a small salary which he instructed the corporation not to report as income to him. In addition, he also paid many personal expenses from a corporate account. The IRS claimed that the distributions from the corporation to the petitioner constituted dividends that the petitioner should have included in gross income. The Tax Court noted that if the corporation has sufficient earnings and profits that the distribution is a dividend to the shareholder receiving the distribution, but that if the distribution exceeds the corporation’s earnings and profits, the excess is generally a nontaxable return of capital to the extent of the shareholder’s basis in the corporation with any remaining amount taxed to the shareholder as gain from the sale or exchange of property. The Tax Court noted that the petitioner’s records did not distinguish personal living expenses from legitimate business expenses and did not provide any way for the court to estimate or determine if any of the expenses at issue were ordinary and necessary business expenses. Thus, the court upheld the IRS determination that the petitioner received and failed to report constructive dividends. The appellate court affirmed noting that there was ample evidence to support the Tax Court’s constructive dividend finding and that the petitioner had failed to rebut any of that evidence. 

Suing Ex-Wife Not a Trade or Business

Ray v. Comr., No. 20-6004, 2021 U.S. App. LEXIS 27614 (5th Cir. Sept. 14, 2021).

The petitioner divorced his wife in 1977 and then sued her in state court in 1998 over debts she owed associated with two real estate purchases and credit cards, as well as penalties she owed the petitioner for not providing him with financial statements in a timely manner. During the pendency of the lawsuit in 2020, he sued her two more times in state court and sued her attorneys in federal court. The federal litigation involved losses from trading agreements the petitioner entered into with her involving a futures and options trading method she created. Ultimately, she owed the petitioner about $384,000 for trading losses incurred with funds he deposited into a commodities brokerage account. The petitioner deducted $267,000 in legal fees on his 2014 return and the IRS rejected the deduction, tacking on an accuracy-related penalty. In 2019, the Tax Court disallowed the legal expenses under I.R.C. §162(a), but allowed a deduction for legal costs incurred that were associated with trading agreement losses as production of income expenses under I.R.C. §212(1). The Tax Court also upheld the accuracy-related penalties. On appeal the appellate court largely affirmed the Tax Court, find that the petitioner didn’t prove that his lawsuit to recover the trading agreement losses was related to his work with a trade or business. Also, the appellate court upheld the Tax Court finding that the petitioner didn’t have a profit motive in suing his ex-wife which was required for a deduction under I.R.C. §212(1). However, the appellate court held that the Tax Court erred in concluding that the petitioner lacked some justification for claiming deductions under I.R.C. §162(a) for legal fees relating to the trading agreement losses. As such, the appellate court remanded the penalty issue to the Tax Court. 

Conclusion

Expect challenges to the beef checkoff to continue.  Many livestock ranchers and farmers that also have cattle and pay the checkoff have been irritated about the use of their checkoff dollars and the conduct of state beef councils for many years.  Also, the constructive dividend issue is a big one.  Compensation arrangements for corporate officers/shareholders must be structured properly to avoid the constructive dividend issue.  The IRS does examine that issue.  In addition, the trade or business issue often arises in the context of agricultural activities – particularly when rental arrangements are involved.  Remember, under IRS rules a cash lease is not a farming trade or business – it’s a rental activity.  That can have implications in numerous settings.  But, I have never seen the argument come up before the Ray case in the context of suing an ex-spouse!  That’s an interesting twist.    

October 11, 2021 in Business Planning, Income Tax, Regulatory Law | Permalink | Comments (0)

Tuesday, August 31, 2021

Is There a Constitutional Way To Protect Animal Ag Facilities?

Overview

In response to attempts by activist groups opposed to animal agriculture, legislatures in several states over the last 30 years have enacted laws designed to protect specified livestock facilities from certain types of interference.  Some of the laws have been challenged on free speech and equal protection grounds with a few courts issuing opinions that have largely found the laws constitutionally suspect.  Most recently, the statutes in Iowa and Kansas were construed by two different U.S. Circuit Courts of Appeals. 

Recent court developments involving legislative attempts to protect confinement animal agriculture – it’s the topic of today’s article.

General Statutory Construct

The basic idea of state legislatures that have attempted to provide a level of protection to livestock facilities is to bar access to an animal production facility under false pretenses.  At their core, the laws attempt to prohibit a person having the intent to harm a livestock production facility from gaining access to the facility (such as via employment) to then commit illegal acts on the premises.  See, e.g., Iowa Code §717A.3A.  Laws that bar lying and trespass coupled with the intent to do physical harm to an animal production facility likely are not constitutionally deficient.  Laws that go beyond those confines may be. 

Recent Court Opinions

2017 developments.  2017 saw several courts issue opinions on various state provisions.  In North Carolina, a challenge to the North Carolina statutory provision was dismissed for lack of standing. People for the Ethical Treatment of Animals v. Stein, 259 F. Supp. 3d 369 (M.D. N.C. 2017). The plaintiffs, numerous animal rights activist groups, brought a pre-enforcement challenge to the North Carolina Property Protection Act.  They claimed that the law unconstitutionally stifled their ability to investigate North Carolina employers for illegal or unethical conduct and restricted the flow of information those investigations provide.  As noted, the court dismissed the case for lack of standing. On appeal, however, the appellate court reversed.  PETA, Inc. v. Stein, 737 Fed. Appx. 122 (4th Cir. 2018).  The appellate court determined that the plaintiffs had standing to challenge the law through its “chilling effect” on their First Amendment rights to investigate and publicize actions on private property.  They also alleged a reasonable fear that the law would be enforced against them. 

The Utah law, however, was deemed unconstitutional. Animal Legal Defense Fund v. Herbert, 263 F. Supp. 3d 1193 (D. Utah 2017). At issue was Utah Code §76-6-112 which criminalizes the entering of a private agricultural livestock facility under false pretenses or via trespass to photograph, audiotape or videotape practices inside the facility.  While the state claimed that lying, which the statute regulates, is not protected free speech, the court determined that only lying that causes “legally cognizable harm” falls outside First Amendment protection. The state also argued that the act of recording is not speech that is protected by the First Amendment. However, the court determined that the act of recording is protectable First Amendment speech. The court also concluded that the fact that the speech occurred on a private agricultural facility did not render it outside First Amendment protection. The court determined that both the lying and the recording provisions of the Act were content-based provisions subject to strict scrutiny. To survive strict scrutiny the state had to demonstrate that the restriction furthered a compelling state interest. The court determined that “the state has provided no evidence that animal and employee safety were the actual reasons for enacting the Act, nor that animal and employee safety are endangered by those targeted by the Act, nor that the Act would actually do anything to remedy those dangers to the extent that they exist.”  For those reasons, the court determined that the Act was unconstitutional. 

A Wyoming law experienced a similar fate. Western Watersheds Project v. Michael, 869 F.3d 1189 (10th Cir. 2017), rev’g., 196 F. Supp. 3d 1231 (D. Wyo. 2016).  In 2015, two new Wyoming laws went into effect that imposed civil and criminal liability upon any person who "[c]rosses private land to access adjacent or proximate land where he collects resource data." Wyo. Stat. §§6-3-414(c); 40-27-101(c). The appellate court, reversing the trial court, determined that because of the broad definitions provided in the statutes, the phrase "collects resource data" included numerous activities on public lands (such as writing notes on habitat conditions, photographing wildlife, or taking water samples), so long as an individual also records the location from which the data was collected. Accordingly, the court held that the statutes regulated protected speech in spite of the fact that they also governed access to private property. While trespassing is not protected by the First Amendment, the court determined that the statutes targeted the “creation” of speech by penalizing the collection of resource data. 

Ninth Circuit.  In early 2018, the U.S. Circuit Court of Appeals for the Ninth Circuit issued a detailed opinion involving the Idaho statutory provision.  Animal Legal Defense Fund v. Wasden, 878 F.3d 1184 (9th Cir. 2018)The Ninth Circuit’s opinion provides a roadmap for state lawmakers to follow to provide at least a minimal level of protection to animal production facilities from those that would intend to do them economic harm.  According to the Ninth Circuit, state legislation can bar entry to a facility by force, threat or trespass.  Likewise, the acquisition of economic data by misrepresentation can be prohibited.  Similarly, criminalizing the obtaining of employment by false pretenses coupled with the intent to cause harm to the animal production facility is not constitutionally deficient.  However, provisions that criminalize audiovisual recordings are suspect. 

Eighth Circuit.  In 2021, the U.S. Court of Appeals for the Eighth Circuit construed the Iowa law and upheld the portion of it providing for criminal penalties for gaining access to a covered facility by false pretenses.  Animal Legal Defense Fund v. Reynolds, No. 19-1364, 2021 U.S. App. LEXIS 23643 (8th Cir. Aug. 10, 2021).  This is the first time that any federal circuit court of appeals has upheld a provision that makes illegal the gaining of access to a covered facility by lying.   

Conversely, the court held that the employment provision of the law (knowingly making a false statement to obtain employment) violated the First Amendment because the law was not limited to false claims that were made to gain an offer of employment.  Instead, the provision provided for prosecution of persons who made false statements that were incapable of influencing an offer of employment.  A prohibition on immaterial falsehoods was not necessary to protect the State’s interest – such as false exaggerations made to impress the job interviewer.  The court determined that barring only false statements that were material to a hiring decision was a less restrictive means to achieve the State’s interest. 

Note.  The day before the Eighth Circuit issued its opinion concerning the Iowa law, it determined that plaintiffs challenging a comparable Arkansas law had standing the bring the case.  Animal Legal Defense Fund v. Vaught, No. 20-1538, 2021 U.S. App. LEXIS 23502 (8th Cir. Aug. 9, 2021). 

Tenth Circuit.  In Animal Legal Defense Fund, et al. v. Kelly, No. 20-3082, 2021 U.S. App. LEXIS 24817 (10th Cir. Aug. 19, 2021), the court construed the Kansas provision that makes it a crime to take pictures or record videos at a covered facility “without the effective consent of the owner and with the intent to damage the enterprise.”  The plaintiffs claimed that the law violated their First Amendment free speech rights.  The State claimed that what was being barred was conduct rather than speech and that, therefore, the First Amendment didn’t apply.  But, the court tied conduct together with speech to find a constitutional violation – it was necessary to lie to gain access to a covered facility and consent to film activities.  As such, the law regulated protected speech (lying with intent to cause harm to a business) and was unconstitutional.  The court determined that the State failed to prove that the law narrowly tailored to a compelling state interest in suppressing the “speech” involved.  The dissent pointed out (correctly and consistently with the Eighth Circuit) that “lies uttered to obtain consent to enter the premises of an agricultural facility are not protected speech.” The First Amendment does not protect a fraudulently obtained consent to enter someone else’s property. 

Conclusion

There presently is a split between the Eighth and Tenth Circuits on the constitutionality of the Iowa and Kansas laws with respect to the issue of gaining access to a covered facility by lying.  That’s a key point.  If access can be barred by sifting out liars with intent to do a covered facility harm, then the video issue is largely mooted.  The issues will likely continue in the courts for the foreseeable future.

August 31, 2021 in Regulatory Law | Permalink | Comments (0)

Sunday, August 29, 2021

Checkoffs and Government Speech – The Merry-Go-Round Revolves Again

Overview

The research and promotion of numerous ag products is funded by the producers that raise the commodities via “checkoff” programs.  Sometimes producers object to the content and manner of various promotions and claim that being compelled to fund the offensive advertising is private speech that they cannot be compelled to fund.  But, is a mandatory checkoff private speech or is it constitutionally protected government speech?  Recently the U.S. Court of Appeals addressed the question again in the context of the beef checkoff. 

Checkoff programs and the Constitution – it’s the topic of today post.

Background

Legislation has established mandatory assessments for promotion of particular agricultural products.  An assessment (or “checkoff”) is typically levied on handlers or producers of commodities with the collected funds to be used to support research promotion and information concerning the product.  Such checkoff programs have been challenged on First Amendment free-speech grounds.  For example, in United States v. United Foods, Inc., 533 U.S. 405 (2001), the U.S. Supreme Court held that mandatory assessments for mushroom promotion under the Mushroom Promotion, Research, and Consumer Identification Act violated the First Amendment.  The assessments were directed into generic advertising, and some handlers objected to the ideas being advertised.  In an earlier decision, the Court had upheld a marketing order that was part of a greater regulatory scheme with respect to California tree fruits.  Glickman v. Wileman Brothers & Elliott, Inc., 521 U.S. 457, rev’g, 58 F. 3d 1367 (9th Cir. 1995).  In that case, producers were compelled to contribute funds for cooperative advertising and were required to market their products according to cooperative rules.  In addition, the marketing orders had received an antitrust exemption.  None of those facts was present in the United Foods case, where the producers were entirely free to make their own marketing decisions and the assessments were not tied to a marketing order. The Supreme Court did not address, however, whether the checkoffs at issue were government speech and, therefore, not subject to challenge as an unconstitutional proscription of private speech.

The Government Speech Issue

In Livestock Marketing Association v. United States Department of Agriculture, 335 F.3d 711 (8th Cir. 2003), the Eighth Circuit held unconstitutional the beef checkoff authorized under the Beef Promotion and Research Act of 1985.  The court ruled that the mandatory assessment of one dollar per-head violated the free-speech rights of those who objected to the generic advertising of beef funded by the check-off because cattle producers and sellers were not regulated nearly to the extent the California tree fruit industry was regulated in Wileman Brothers.  As such, the beef industry was similar to the mushroom industry, and United Foods controlled. The court also ruled that the beef checkoff did not constitute government speech. 

The Supreme Court agreed to hear the Livestock Marketing Association case on the narrow grounds of whether the beef checkoff was government speech.  The Court reversed the Eighth Circuit and upheld the check-off as government speech. Johanns v. Livestock Marketing Association, 544 U.S. 550 (2005).  The case involved (in the majority’s view) a narrow facial attack on whether the statutory language of the Act created an advertising program that could be classified as government speech. That was the only issue before the Court.

Elements of constitutionality.  While the government speech doctrine is relatively new and is not well-developed, prior Supreme Court opinions not involving agricultural commodity checkoffs indicated that to constitute government speech, a checkoff must clear three hurdles: (1) the government must exercise sufficient control over the content of the check-off to be deemed ultimately responsible for the message; (2) the source of the checkoff assessments must come from a large, non-discrete group; and (3) the central purpose of the checkoff must be identified as the government’s. Based on that analysis, it was believed that the beef checkoff would clear only the first and (perhaps) the third hurdle, but that the program would fail to clear the second hurdle. Indeed, the source of funding for the beef check-off comes from a discrete identifiable source (cattle producers) rather than a large, non-discrete group. The point is that if the government can compel a targeted group of individuals to fund speech with which they do not agree, greater care is required to ensure political accountability as a democratic check against the compelled speech. That is less of a concern if the funding source is the taxpaying public which has access to the ballot box as a means of neutralizing the government program at issue and/or the politicians in support of the program. While the dissent focused on this point, arguing that the Act does not establish sufficient democratic checks, Justice Scalia, writing for the majority, opined that the compelled-subsidy analysis is unaffected by whether the funds for the promotions are raised by general taxes or through a targeted assessment. That effectively eliminates the second prong of the government speech test. The Court held that the other two requirements were satisfied because the Act vests substantial control over the administration of the checkoff and the content of the ads in the USDA Secretary.

The Supreme Court, in Johanns, did not address (indeed, the issue was not before the Court) whether the advertisements, most of which are credited to “America’s Beef Producers,” give the impression that the objecting cattlemen (or their organizations) endorse the message. Because the case only involved a facial challenge to the statutory language of the Act, the majority examined only the Act’s language and concluded that neither the statute nor the accompanying Order required attribution of the ads to “America’s Beef Producers” or to anyone else. Thus, neither the statute nor the Order could be facially invalid on this theory. However, the Court noted that the record did not contain evidence from which the Court could determine whether the actual application of the checkoff program resulted in the message of the ads being associated with the plaintiffs. Indeed, Justice Thomas, in his concurring opinion, noted that the government may not associate individuals or organizations involuntarily with speech by attributing an unwanted message to them whether or not those individuals fund the speech and whether or not the message is under the government’s control. Justice Thomas specifically noted that, on remand, the plaintiffs could possibly amend their complaint to assert an attribution claim which ultimately could result in the beef checkoff being held unconstitutional. If that occurred, and the ads were found to be attributable to the complaining ranchers or their associated groups, the beef checkoff could still be held to be unconstitutional.

In the first check-off opinion rendered by a federal court after the U.S. Supreme Court’s opinion in the beef check-off case, the Federal District Court for the Central District of California issued a preliminary injunction against enforcement of the California Pistachio check-off on the basis that the plaintiffs were likely to succeed on the merits of their claim that the program was unconstitutional.  Paramount Land Co., et al. v. California Pistachio Comm’n, No. 2:05-cv-05-07156-mmm-pjw (C.D. Cal. Dec. 12, 2005). The court reasoned, based on Johanns, that the check-off was not government speech and that the industry regulation of the marketing aspects of pistachios was more like the regulatory aspects of the Mushroom industry at issue in United Foods than the regulatory aspects of the California tree fruit industry at issue in Glickman. However, on appeal, the district court’s opinion was reversed. Paramount Land Company, LP v. California Pistachio Commission, 491 F.3d 1003 (9th Cir. 2007). The appellate court determined that the First Amendment was not implicated because, consistent with Johanns, the Secretary of the California Department of Food and Agriculture retained sufficient authority to control both the activities and the message under the Pistachio Act.  The court reasoned that the fact that the Secretary had not actually played an active role in controlling pistachio advertising could not be equated with the Secretary abdicating his regulatory role. In another California case, a court held that milk producer assessments used for generic advertising to stimulate milk sales were constitutional under the Johanns rationale. Gallo Cattle Co. v. A.G. Kawamura, 159 Cal. App. 4th 948, 72 Cal. Rptr. 3d 1 (2008).

Recent Case

The government speech issue came up again in the context of the beef checkoff in Ranchers Cattlemen Action Legal Fund United Stockgrowers of America v. Vilsack, No. 20-35453, 2021 U.S. App. LEXIS 22189 (9th Cir. Jul. 27, 2021).  The plaintiff represents cattlemen that are subject to the $1 per head of cattle sold in the United States federal beef checkoff created under the Beef Promotion and Research Act of 1985.  The checkoff funds promotions to “maintain and expand domestic and foreign markets and uses for beef and beef products.”  The USDA Secretary, the defendant in the case, oversees the checkoff through the Cattlemen’s Beef Promotion and Research Board that consists of members the Secretary appoints.  A qualified state beef council typically collects the checkoff, retains half of the amount collected to fund state marketing efforts and forwards the balance to the federal program.  A cattle producer may opt out of funding their state beef council and direct the entire assessment to the federal program. 

The plaintiff’s members object to their states’ advertising campaigns, and claim in particular that the distribution of funds to the Montana Beef Council under the federal program is an unconstitutional compelled subsidy of private speech. Later, the plaintiff amended its complaint to include numerous other states where it had members.  The trial court entered a preliminary injunction preventing the use of checkoff funds for promotional campaigns absent the producers' consent.  On the merits, the trial court determined that by virtue of a memorandum of understanding that the Montana Beef Council and the other state beef councils had entered into with the defendant, the defendant had sufficient control over the promotional program to make the speech of the various state beef councils effectively government speech. 

On appeal, the appellate court affirmed.  The appellate court noted that the critical question in determining whether speech is public or private is whether the speech is “effectively controlled” by the government.  The appellate court determined that the challenged speech was.  Under the memorandums of understanding, the state beef councils had to submit for the defendant’s pre-approval “any and all promotion advertising, research, and consumer information plans and projects" and "any and all potential contracts or agreements to be entered into by state beef councils for the implementation and conduct of plans or projects funded by checkoff funds." The state beef councils also had to submit "an annual budget outlining and explaining . . . anticipated expenses and disbursements" and a "general description of the proposed promotion, research, consumer information, and industry information programs contemplated.”  Failure to comply could lead to the defendant’s de-certification of a state beef council.  The appellate court noted that this established "final approval authority over every word used in every promotional campaign,” and constituted government speech.   In addition, all private contracted third parties that were not subject to pre-approval were “effectively controlled” by the government.  The appellate court noted that the Congress expressly contemplated the participation of third parties in the beef checkoff program, designating several "established national nonprofit industry-governed organizations" with whom the Operating Committee could contract to "implement programs of promotion." 

In addition, the appellate also pointed out that the state beef councils had to give the defendant notice of all board meetings and allow the defendant or his designees to participate in any discussions about payment to third parties.  It was this ability to control speech that was the key rather than whether the defendant exercised final pre-approval authority over some third-party speech. On that point, the appellate court noted it had previously ruled similarly in 2007 in the Paramount Land Company, LP case.

Conclusion

If by use of a memorandum of understanding the USDA is able to create sufficient theoretical control over a checkoff to transform the program into government speech, there isn’t much of a viable path forward for claiming that a checkoff isn’t government speech.  Any future challenge, as Justice Thomas pointed out in Johanns, would have to clearly and convincingly posit that an unwanted message is being attributed to particular producers. 

August 29, 2021 in Regulatory Law | Permalink | Comments (0)

Monday, August 9, 2021

California’s Regulation of U.S. Agriculture

Overview

In a huge blow to pork producers (and consumers of pork products) nationwide, the U.S. Court of Appeals for the Ninth Circuit has upheld California’s Proposition 12.  Proposition 12 requires any pork sold in California to be raised in accordance with California’s housing requirements for hogs.  This means that any U.S. hog producer, by January 1, 2022, will need to upgrade existing facilities to satisfy California’s requirements if desiring to market pork products in California. 

Each state sets its own rules concerning the regulation of agricultural production activities.  So, how can one state override other states’ rules?  Involved is a judicially-created doctrine known as the dormant Commerce Clause.

California Proposition 12, the dormant Commerce Clause and the ability of a state to dictate ag practices in other states – it’s the topic of today’s post.

Background

The Commerce Clause.  Article I Section 8 of the U.S. Constitution provides in part, “the Congress shall have Power...To regulate Commerce with foreign Nations and among the several states, and with the Indian Tribes.”  The Commerce Clause, on its face, does not impose any restrictions on states in the absence of congressional action.  However, the U.S. Supreme Court has interpreted the Commerce Clause as implicitly preempting state laws that regulate commerce in a manner that disrupts the national economy.  This is the judicially-created doctrine known as the “dormant” Commerce Clause. 

The “dormant” Commerce Clause.  The dormant Commerce Clause is a constitutional law doctrine that says Congress's power to "regulate Commerce ... among the several States" implicitly restricts state power over the same area.  In general, the Commerce Clause places two main restrictions on state power – (1) Congress can preempt state law merely by exercising its Commerce Clause power by means of the Supremacy Clause of Article VI, Clause 2 of the Constitution; and (2) the Commerce Clause itself--absent action by Congress--restricts state power.  In other words, the grant of federal power implies a corresponding restriction of state power.  This second limitation has come to be known as the "dormant" Commerce Clause because it restricts state power even though Congress's commerce power lies dormant. Willson v. Black Bird Creek Marsh Co., 27 U.S. 245 (1829).  The label of “dormant Commerce Clause” is really not accurate – the doctrine applies when the Congress is dormant, not the Commerce Clause itself.

Rationale.  The rationale behind the Commerce Clause is to protect the national economic market from opportunistic behavior by the states - to identify protectionist actions by state governments that are hostile to other states.  Generally, the dormant Commerce Clause doctrine prohibits states from unduly interfering with interstate commerce.  State regulations cannot discriminate against interstate commerce.  If they do, the regulations are per se invalid.  See, e.g., City of Philadelphia v. New Jersey, 437 U.S. 617 (1978).  Also, state regulations cannot impose undue burdens on interstate commerce.  See, e.g., Kassel v. Consolidated Freightways Corp., 450 U.S. 662 (1981).  Under the “undue burden” test, state laws that regulate evenhandedly to effectuate a local public interest are upheld unless the burden imposed on commerce is clearly excessive in relation to the local benefits.     

The Court has never held that discrimination between in-state and out-of-state commerce, without more, violates the dormant Commerce Clause.  Instead, the Court has explained that the dormant Commerce Clause is concerned with state laws that both discriminate between in-state and out-of-state actors that compete with one another, and harm the welfare of the national economy.  Thus, a discriminatory state law that harms the national economy is permissible if in-state and out-of-state commerce do not compete.  See, e.g., General Motors Corp. v. Tracy, 117 S. Ct. 811, 824-26 (1997).  Conversely, a state law that discriminates between in-state and out-of-state competitors is permissible if it does not harm the national economy. H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525 (1949). 

California Proposition 12 Litigation

In 2018, California voters passed Proposition 12.  Proposition 12 bans the sale of whole pork meat (no matter where produced) from animals confined in a manner inconsistent with California’s regulatory standards.  Proposition 12 established minimum requirements on farmers to provide more space for egg-laying hens, breeding pigs, and calves raised for veal. Specifically, the law requires that covered animals be housed in confinement systems that comply with specific standards for freedom of movement, cage-free design and minimum floor space. The law identifies covered animals to include veal calves, breeding pigs and egg-laying hens. The implementing regulations prohibit a farm owner or operator from knowingly causing any covered animal to be confined in a cruel manner, as specified, and prohibits a business owner or operator from knowingly engaging in the sale within the state of shell eggs, liquid eggs, whole pork meat or whole veal meat, as defined, from animals housed in a “cruel manner.”  In addition to general requirements that prohibit animals from being confined in a manner that prevents lying down, standing up, fully extending limbs or turning around freely, the measure added detailed confinement space standards for farms subject to the law. The alleged reason for the law was to protect the health and safety of California consumers and decrease the risk of foodborne illness and the negative fiscal impact on California. 

In late 2019, several national farm organizations challenged Proposition 12 and sought a declaratory judgment that the law was unconstitutional under the dormant Commerce Clause.  The plaintiffs also sought a permanent injunction preventing Proposition 12 from taking effect.  The plaintiffs claimed that Proposition 12 impermissibly regulated out-of-state conduct by compelling non-California producers to change their operations to meet California’s standards.  The plaintiffs also alleged that Proposition 12 imposed excessive burdens on interstate commerce without advancing any legitimate local interest by significantly increasing operation costs without any connection to human health or foodborne illness.  The trial court dismissed the plaintiffs’ complaint.  National Pork Producers Council, et al. v. Ross, No. 3:19-cv-02324-W-AHG (S.D. Cal. Apr. 27, 2020). 

On appeal, the plaintiffs focused their argument on the allegation that Proposition 12 has an impermissible extraterritorial effect of regulating prices in other states and, as such, is per se unconstitutional.  This was a tactical mistake for the plaintiffs.  The appellate court noted that existing Supreme Court precedent on the extraterritorial principle applied only to state laws that are “price control or price affirmation statutes.”  National Pork Producers Council, et al. v. Ross, No. 20-55631, 2021 U.S. App. LEXIS 22337 (9th Cir. Jul. 28, 2021).  Thus, the extraterritorial principle does not apply to a state law that does not dictate the price of a product and does not tie the price of its in-state products to out-of-state prices.  Because Proposition 12 was neither a price control nor a price-affirmation statute (it didn’t dictate the price of pork products or tie the price of pork products sold in California to out-of-state prices) the law didn’t have the extraterritorial effect of regulating prices in other states. 

The appellate court likewise rejected the plaintiffs’ claim that Proposition 12 has an impermissible indirect “practical effect” on how pork is produced and sold outside California.  Id.  Upstream effects (e.g., higher production costs in other states) the appellate court concluded, do not violate the dormant Commerce Clause.   The appellate court pointed out that a state law is not impermissibly extraterritorial unless it regulates conduct that is wholly out of state.  Id.  Because Proposition 12 applied to California and non-California pork production the higher cost of production was not an impermissible effect on interstate commerce.

The appellate court also concluded that inconsistent regulation from state-to-state was permissible because the plaintiffs had failed to show a compelling need for national uniformity in regulation at the state level.  Id.  In addition, the appellate court noted that the plaintiffs had not alleged that Proposition 12 had a discriminatory effect on interstate commerce. 

Simply put, the appellate court rejected the plaintiffs’ challenge to Proposition 12 because a law that increases compliance costs (projected at a 9.2 percent increase in production costs that would e passed on to consumers) is not a substantial burden on interstate commerce in violation of the dormant Commerce Clause. 

On to the Supreme Court?

Earlier this summer, the U.S. Supreme Court declined to review Proposition 12.  North American Meat Institute v. Bonta, No. 20-1215, 2021 U.S. LEXIS 3405 (S. Ct. Jun. 28, 2021).  Will the Court now take up the decision of the Ninth Circuit if requested?  That remains to be seen.  Unfortunately, the Supreme Court has been careless in applying the anti-discrimination test, and in many cases, neither of the two requirements--interstate competition or harm to the national economy--is ever mentioned.  See, e.g., Hughes v. Oklahoma, 441 U.S. 322 (1979). The reason interstate competition goes unstated is obvious – in most cases the in-state and out-of-state actors compete in the same market.  But, the reason that the second requirement, harm to the national economy, goes unstated is because the Court simply assumes the issue away.

Conclusion

The dormant Commerce Clause is something to watch for in court opinions involving agriculture.  As states enact legislation designed to protect the economic interests of agricultural producers in their states, those opposed to such laws could challenge them on dormant Commerce Clause grounds.  But, such cases must be plead carefully to show an impermissible regulation of extraterritorial conduct. 

In the present case, practically doubling the cost of creating hog barns to comply with the California standards was not enough, nor was the interconnected nature of the pork industry.  California gets to call the shots concerning the manner of U.S. pork production for pork marketed in the state.  This, in spite of overarching federal food, health and safety regulations that address California’s purported rationale for Proposition 12.

The dormant commerce clause is one of those legal theories “floating” around out there that can have a real impact in the lives of farmers, ranchers and consumers, and how economic activity is conducted.  

August 9, 2021 in Regulatory Law | Permalink | Comments (0)

Thursday, July 15, 2021

Montana Conference and Ag Law Summit (Nebraska)

Overview

The second of the two national conferences on Farm/Ranch Income Tax and Farm/Ranch Estate and Business Planning is coming up on August 2 and 3 in Missoula, Montana.  A month later, on September 3, I will be conducting an “Ag Law Summit” at Mahoney State Park located between Omaha and Lincoln, NE.

Upcoming conferences on agricultural taxation, estate and business planning, and agricultural law – it’s the topic of today’s post.

Montana

The second of my two 2021 summer conferences on agricultural taxation and estate/business planning will be held in beautiful Missoula, Montana.  Day 1 on August 2 is devoted to farm income taxation, with sessions involving an update of farm income tax developments; lingering PPP and ERC issues (as well as an issue that has recently arisen with respect to EIDLs); NOLs (including the most recent IRS Rev. Proc. and its implications); timber farming; oil and gas taxation; handling business interest; QBID/DPAD planning; FSA tax and planning issues; and the prospects for tax legislation and implications.  There will also be a presentation on Day 1 by IRS Criminal Investigation Division on how tax practitioners can protect against cyber criminals and other theft schemes. 

On Day 2, the focus turns to estate and business planning with an update of relevant court and IRS developments; a presentation on the farm economy and what it means for ag clients and their businesses; special use valuation; corporate reorganizations; the use of entities in farm succession planning; property law issues associated with transferring the farm/ranch to the next generation; and an ethics session focusing on end-of life decisions.

If you have ag clients that you do tax or estate/business planning work for, this is a “must attend” conference – either in-person or online.

For more information about the Montana conference and how to register, click here:  https://www.washburnlaw.edu/employers/cle/farmandranchtaxaugust.html

Nebraska

On September 3, I will be holding an “Ag Law Summit” at Mahoney St. Park, near Ashland, NE.  The Park is about mid-way between Omaha and Lincoln, NE on the adjacent to the Platte River and just north of I-80.  The Summit will be at the Lodge at the Park.  On-site attendance is limited to 100.  However, the conference will also be broadcast live over the web for those that would prefer to or need to attend online.

I will be joined at the Summit by Prof. Ed Morse of Creighton Law School who, along with Colten Venteicher of the Bacon, Vinton, et al., firm in Gothenburg, NE, will open up their “Ag Entreprenuer’s Toolkit” to discuss the common business and tax issues associated with LLCs.  Also on the program will be Dan Waters of the Lamson, et al. firm in Omaha.  Dan will address how to successfully transition the farming business to the next generation of owners in the family. 

Katie Zulkoski and Jeffrey Jarecki will provide a survey of state laws impacting agriculture in Nebraska and key federal legislation (such as the “30 x 30” matter being discussed).  The I will address special use valuation – a technique that will increase in popularity if the federal estate tax exemption declines from its present level.  I will also provide an update on tax legislation (income and transfer taxes) and what it could mean for clients. 

The luncheon speaker for the day is Janet Bailey.  Janet has been deeply involved in Kansas agriculture for many years and will discuss how to create and maintain a vibrant rural practice. 

If you have a rural practice, I encourage you to attend.  It will be worth your time. 

For more information about the conference, click here:   https://www.washburnlaw.edu/employers/cle/aglawsummit.html

Conclusion

The Montana and Nebraska conferences are great opportunities to glean some valuable information for your practices.  As noted, both conferences will also be broadcast live over the web if you can’t attend in person.   

July 15, 2021 in Bankruptcy, Business Planning, Environmental Law, Estate Planning, Income Tax, Real Property, Regulatory Law, Water Law | Permalink | Comments (0)

Sunday, July 11, 2021

Mailboxes and Farm Equipment

Overview

Farmers use the public roadways to move farm machinery and equipment.  Sometimes, mailboxes present issues.  What are the rules for placement of mailboxes along rural roads?  What if a mailbox is hit?  The resolution of the matter will be fact based.  Was the mailbox intentionally damaged or destroyed?  Was the mailbox located in the proper place?  Was the mailbox at the proper height and of the correct size?  Was the farm machinery and equipment operating on the public roadway within applicable size and weight limitations?  These are all relevant questions.

Moving farm machinery and equipment along a public roadway and the potential hazard presented by mailboxes- it’s the topic of today’s post.

Postal Service Rules

If a mailbox is struck with farm equipment, one issue to check is whether the mailbox was in the proper location and was of the proper height and size.  The United States Postal Service (USPS) has rules for the placement of mailboxes.  But, the matter is also a mixture of state law.  Generally, a mailbox must be 41-45 inches above the road surface and 6-8 inches from the edge of the road. See, e.g., Mailbox Installation, USPS.COM; Section 632, USPS Postal Operations Manual.  The meaning of “edge of the road” depends on state law – “shoulder” is defined differently from state-to-state.  For rural postal routes, all mailboxes are to be on the right side of the road in the carrier’s direction of travel and be placed in conformity with state laws and highway regulations.  If state law is more restrictive than the USPS Operations Manual, state law controls.    

The posts for a mailbox are to be made from wood no larger than 4” x 4,” but can also be made out of steel or aluminum no larger than 2” in diameter.  However, the posts should be designed to easily bend or fall away in the event of a collision.  USPS Operations Manual.  The mailbox cannot be constructed in a manner that it is a fixed object that won’t break away when it is struck. 

The USPS also has specific mailbox size limitations.  All dimensions and designs must be in accordance with USPS rules before a mailbox can be sold to the public at retail.  For those that wish to build their own, the mailbox must be approved by the local postmaster.  This can be a key point when it comes to large farm equipment utilizing rural roads. 

A mailbox that is not in compliance with USPS rules could be creating a “traffic” hazard.  The hazard issue not only involves size and height restrictions but can also instruct the issue of where a mailbox is placed.  Each state has its own set of regulations on this issue.  In some states, a mailbox cannot be placed within a certain distance of an intersection.  The distance requirement might expand if the daily traffic is of a particular volume.

If farm equipment accidentally strikes a mailbox that is out of compliance with either federal or state requirements, that fact could absolve the farmer from responsibility for replacing the mailbox.

Roadway Size and Weight Limitations

On the other side of the coin, each state also has regulations governing the weight and size of farm equipment that can travel public roads. A farmer utilizing the public roadways with equipment and machinery exceeding applicable size and/or weight limitations that strikes a mailbox has little defense.  The size and weight limitations have come into greater relevance in recent years as farm machinery and equipment have enlarged (in size and weight) along with the size of farming operations.  Public roads have not correspondingly widened.  Weight limitations are often tied to the number of axles and the distance between the axles.  See, e.g., Kan. Stat. Ann. §8-1908.  Vehicles exceeding the limitations are not to be driven on public roads.  But, in states where the agricultural industry predominates, agricultural equipment and machinery is often exempted.  See., e.g., Kan. Stat. Ann. §8-1908.  Civil damages to the road are possible for violations.  See, e.g., Kan. Stat. Ann. §8-1913.      

As for size limitations, the maximum width permitted is generally eight and one-half feet under federal law.  But, that limit is inapplicable to “special mobile equipment” including farm equipment or instruments of husbandry.  See Federal Size Regulations for Commercial Motor Vehicles, U.S. Department of Transportation:  Federal Highway Administration (Oct. 9, 2019); Kan. Stat. Ann. §8-1902(b).  However, a state may require a permit for “over-width” farm equipment to be operated on a public roadway in the state, and may adopt additional requirements for width and height than the federal rules.  Common rules apply to the transporting of hay loads and combine headers.  See, e.g., Kan. Stat. Ann. §§8-1902(d)(2)-(3); 8-1902(e).

Sometimes, existing size and weight limitations are lifted for farm equipment (including farm trucks) during planting and harvesting seasons, and other unique exemptions might apply in certain situations.  It’s important to pay attention to a particular state’s rules as well as administrative notices concerning any modification (whether permanent or temporary) to existing rules.

If the operator of farm equipment on a public road is not in compliance with those regulations and strikes a non-compliant mailbox, sorting out the legal liability gets murkier.    

Colliding With A Mailbox

A mailbox is federal property.  Under federal law, it is unlawful to intentionally destroy a mailbox.  Doing so could result in a substantial fine and/or imprisonment of up to three years.  18 U.S.C. §1705.  Unintentional damage or destruction to a mailbox will typically require the notification of the property owner and the local police.  In addition, local regulations may impose other requirements. 

But, for those operating farm equipment and machinery on public roads within the applicable rules that happen to strike a mailbox, being required to pay for the damage caused is probably the worst that will happen.

Conclusion

Farmers often must use the public roads to move farm equipment from field-to-field, to get harvested crops to a local elevator, or for other reasons.  The increased size of farm equipment and natural limitations to the width of roads (particularly in the eastern third of the U.S.) present challenges to avoiding mailboxes.  It’s good to know the rules that can apply in such situations. 

July 11, 2021 in Civil Liabilities, Regulatory Law | Permalink | Comments (0)

Thursday, July 1, 2021

Reimbursement Claims in Estates; Drainage District Assessments

Overview

Two interesting issues that sometimes come up in the agricultural setting are those involving claims in a decedent’s estate as well as those involving drainage district assessments.  Matters involving ag estates are often difficult because family members tend to be involved.  Drainage issues can also become contentious and can become tangled in numerous ways.

Reimbursement claims in an estate and drainage district assessments – it’s the topic of today’s post.

Former Trustee Fails to Establish Claims for Reimbursement

In Re Estate of Bronner, No. 20-0747, 2021 Iowa App. LEXIS 488 (Iowa Ct. App. Jun. 16, 2021)

A married couple as operated a 276-acre family farm.  Upon the husband’s death, his one-half interest in the farm passed to a family trust for his wife for life, and named a son as trustee.  Upon the surviving spouse’s death, the trust would terminate with the remaining assets distributed to the couple’s then surviving children.  The surviving spouse and trustee son continued to operate the trust’s farmland.  In addition, the trustee rented other land from his mother for his own farming operation, and he paid his annual farm rent by depositing into his mother’s account the amount necessary to cover the loan payment and real estate taxes on the trust’s farmland.  The trustee also made insurance premium payments. 

Ultimately, the surviving spouse’s cognitive function declined, and she was no longer competent to enter into contracts.  The trustee then arranged for the sale of a 76.11-acre parcel of trust farm property to an adjoining landowner through a private sale for $275,000.  The net sale proceeds were paid to reduce the amount owed on the existing farm loan.  Shortly before the surviving spouse’s death, another son sued the trustee for elder abuse, but later agreed to dismiss his claim in exchange for a court-appointed guardian and conservator for his mother.  When the surviving spouse died, the trustee was appointed executor of her estate.  The other son sued to remove the trustee son as executor, alleging that he breached his fiduciary duties as trustee by paying farm rent at less than market value and in selling the 76.11-acre parcel of land for less than its market value. 

The trial court found that the trustee had breached his fiduciary duties and removed him as trustee.  He was not compensated for his services.  He was also removed as executor.  He then sued to recover for expenditures he made on behalf of his mother and the family trust totaling over $199,000 for farm maintenance/capital improvements; taxes and insurance; appraisal costs; costs associated with prior litigation; and funeral and nursing home/medical expenses.  The trial court denied the claims for maintenance and capital improvements, and the appellate court affirmed noting that most of the expenses went to improve his own farming operations or to benefit himself personally, and the invoices he submitted did not establish that he paid the expenses.  The appellate court also affirmed the trial court’s denial of reimbursement for taxes and insurance as they were considered part of his farm rent payments and the evidence showed that some were paid by the estate.  The appellate court also affirmed the trial court’s denial of appraisal costs because the costs didn’t benefit the trust, and the trial court’s refusal to allow reimbursement for legal expenses because the expenses were court-ordered as part of prior litigation.  The former trustee/executor also failed to substantiate that he had paid funeral expenses, and the appellate court affirmed the trial court’s decision to he was not entitled to reimbursement of these costs. 

Observation:  Keeping good records of transactions personally entered into on behalf of an estate or trust is an essential part of successfully being reimbursed for expenses incurred. 

Drainage District Incorrectly Makes Improper Assessment

Union Pacific Railroad Co., et al. v.  v. Drainage District 67 Board of Trustees, No. 20-0814, 2021 Iowa App. LEXIS 458 (Iowa Ct. App. Jun. 16, 2021).

In 1913, a wholly owned subsidiary of the plaintiff built a railway within its right-of-way.  The right-of-way became included in the defendant’s drainage district that was established in 1915.  State law requires drainage districts to keep any improvements in good condition and to pay for repairs, and when a drainage district has insufficient funds to pay for a repair, it must assess the costs of repairs to the property located within it in proportion to the benefit the land receives from the improvement.  A classification of benefit remains the same unless the drainage district reclassifies the land. A reclassification commission determines the percentage of actual benefits received by each tract of land and makes an equitable apportionment of the costs of repairs.  Apportionment of costs must be made strictly in accordance with the benefits reasonably expected or actually enjoyed. 

The defendant constructed an artificial tile to drain the agricultural lands in the district with the main tile crossing the railroad’s right of way.  The railroad had been originally assessed 5.81 percent for its share of the drainage benefits in the district.  In 2018, the defendant discovered that tile needed repaired or replaced, including a collapse in the tile under the plaintiff’s tracks that, if not repaired, would cause soil to enter the main tile.  To comply with federal safety requirements, the portion of the repair running under the right-of-way required steel casing and mechanical restrained leak resistant joints.  Use of these materials approximately doubled the cost of using just corrugated plastic pipe.  The drainage district received a base bid price of $200,891 for the project.  Of that figure, $98,343 was for items necessary to prevent erosion at the railroad crossing – about 49 percent of the project cost.  The reclassification commission found that about one-half of the construction costs resulted from federal regulations and determined that the railroad would receive 100 percent of the benefit of compliance.  Thus, the reclassification commission recommended that the railroad be assessed one-half of the total cost of repair. 

At a public hearing, the railroad objected to the assessment, but the defendant approved it.  The plaintiff sued, and the trial court noted that the defendant had the authority to modify an assessment if there was evidence of an erroneous assessment or inequitable apportionment.  However, the trial court determined that the plaintiff had satisfied its burden to show that the cost had not been properly assessed.  Specifically, the trial court found that the defendant had reclassified the land based on “extra costs” driven by compliance with federal requirements that were not a benefit to the plaintiff so as to lower the assessments to other lands in the district.  The appellate court affirmed the trial court’s award of summary judgment for the plaintiff, noting that construction costs are not benefits that may be considered in a reclassification, nor are the costs of federal compliance.

Conclusion

The law intersects with agriculture in many ways.  Sometimes production activities are involved, sometimes the two meet at the point of family relationships and transactions, and other times it’s a matter of only tangential connections that can ultimately have an impact on production activities.  Often, state law is involved.  The two cases discussed in today’s post are an illustration of the myriad of ways that the law can touch agriculture and those involved in it.

July 1, 2021 in Estate Planning, Regulatory Law | Permalink | Comments (0)

Thursday, June 24, 2021

Key “Takings” Decision from SCOTUS Involving Ag Businesses

Overview

The power to “take” private property for public use (or for a public purpose) without the owner's consent is an inherent power of the federal and state governments.  However, the United States Constitution limits the government's eminent domain power by requiring federal and state governments to pay for what is “taken.”  The Fifth Amendment states in part “...nor shall private property be taken for public use without just compensation.” 

Whether a taking has occurred is not an issue when the government physically takes the property, with the only issue being whether the taking is compensable and the amount of compensation due to the landowner.  However, for non-physical (regulatory) takings, the issue is murkier.  At what point does government regulation of private property amount to a compensable taking?

Earlier this week, the U.S. Supreme Court addressed the issue of physical/non-physical takings in a case involving a California strawberry growing operation.

Takings and the constitution – it’s the topic of today’s post.

Background

The power to “take” private property for public use (or for a public purpose) without the owner's consent is an inherent power of the federal and state government. However, the United States Constitution limits the government's eminent domain power by requiring federal and state governments to pay for what is “taken.”  The Fifth Amendment states in part “...nor shall private property be taken for public use without just compensation.”  The clause has two prohibitions: (1) all takings must be for public use, and (2) even takings that are for public use must be accompanied by compensation.  Historically, the “public use” requirement operated as a major constraint on government action. For many years, the requirement was understood to mean that if property was to be taken, it was necessary that it be used by the public – the fact that the taking was “beneficial” was not enough. Eventually, however, courts concluded that a wide range of uses could serve the public even if the public did not, in fact, have possession. Indeed, so many exceptions were eventually built into the general rule of “use by the public” that the rule itself was abandoned.

Actual physical takings of property by the government are easy to identify.  When a non-physical taking has occurred is not as easy to spot.

Regulatory (Non-Physical) Takings

A non-physical taking may involve the governmental condemnation of air space rights, water rights, subjacent or lateral support rights, or the regulation of property use through environmental restrictions.  How is the existence of a regulatory taking determined?  There are several approaches that the Supreme Court has utilized.

Multi-factor balancing test.  In a key case decided in 1978, the U.S. Supreme Court set forth a multi-factored balancing test for determining when governmental regulation of private property effects a taking requiring compensation.  In Penn Central Transportation Co. et al. v. New York City, 438 U.S. 104 (1978), the Court held that a landowner cannot establish a “taking” simply by being denied the ability to exploit a property interest believed to be available for development.  Instead, the Court ruled that in deciding whether particular governmental action effects a taking, the character, nature and extent of the interference with property rights as a whole are the proper focus rather than discrete segments of the owner’s property rights.  In 2005, the Court confirmed the multi-factor test and noted that the touchstone for deciding when a regulation is a taking is whether the restriction on property usage is functionally equivalent to a physical taking of the property.  Lingle, et al. v. Chevron U.S.A., Inc., 544 U.S. 528 (2005).  

Total regulatory taking.  In Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), the landowner purchased two residential lots with an intent to build single-family homes.  Two years later, the state legislature passed a law prohibiting the erection of any permanent habitable structures on the Lucas property.  The law's purpose was to prevent beachfront erosion and to protect the property as a storm barrier, a plant and wildlife habitat, a tourist attraction, and a “natural health environment” which aided the physical and mental well-being of South Carolina's citizens.  The law effectively rendered the Lucas property valueless.  Lucas sued the Coastal Council claiming that, although the act may be a valid exercise of the state's police power, it deprived him of the use of his property and thus, resulted in a taking without just compensation.  The Coastal Council argued that the state had the authority to prevent harmful uses of land without having to compensate the owner for the restriction.

The Supreme Court ruled for Lucas and opined that the state's interest in the regulation was irrelevant since the trial court determined that Lucas was deprived of any economically viable alternative use of his land.  The Lucas case has two important implications for environmental regulation of agricultural activities.  First, the Lucas court focused solely on the economic viability of the land and made no recognition of potential noneconomic objectives of land ownership.  However, in the agricultural sector land ownership is typically associated with many noneconomic objectives and serves important sociological and psychological functions.  Under the Lucas approach, these noneconomic objectives are not recognized.  Second, under the Lucas rationale, environmental regulations do not invoke automatic compensation unless the regulations deprive the property owner of all beneficial use.

Under the Lucas approach, an important legal issue is whether compensation is required when the landowner has economic use remaining on other portions of the property that are not subject to regulation.

Unconstitutional conditions.  In Nollan v. California Coastal Commission,483 U.S. 825 (1987), the plaintiff owned a small, dilapidated beach house and wanted to tear it down and replace it with a larger home.  However, the defendant was concerned about preserving the public's viewing access over the plaintiff's land from the public highway to the waterfront.  Rather than preventing the construction outright, the defendant conditioned the plaintiff's right to build on the land upon the plaintiff giving the defendant a permanent, lateral beachfront easement over the plaintiff's land for the benefit of the public.  Thus, the issue was whether the state could force the plaintiffs to choose between their construction permit and their lateral easement.  The Court held that this particular bargain was impermissible because the condition imposed (surrender of the easement) lacked a “nexus” with, or was unrelated to the legitimate interest used by the state to justify its actions - preserving the view.  The Court later ruled similarly in Dolan v. Tigard, 512 U.S. 374 (1994).  These cases hold that the government may not require a person to give up the constitutional right to receive just compensation when property is taken for a public use in exchange for a discretionary benefit that has little or no relationship to the property. The rule of the cases does not apply to situations involving impact fees and other permit conditions that do not involve physical invasions, but it would apply to monetary exactions where none of the plaintiff’s property is actually taken.  See, e.g., Koontz v. St. Johns River Water Management District133 S. Ct. 2586 (2013).

State/Local Takings – Seeking a Remedy

For a landowner that has sustained a state/local regulatory (or physical) taking, can compensation be sought initially in federal court or must legal procedures be first pursued in state court with federal courts only available if compensation is denied at the state level?  The U.S. Supreme Court answered this question in 1985.  In Williamson Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), the Court held that if a state provides an adequate procedure for seeking just compensation, there is no Fifth Amendment violation until the landowner has used the state procedure and has been denied just compensation.  However, 28 U.S.C. §1738, would then be applied with the resulting effect that the failure to receive compensation at the state level generally meant that there was no recourse in the federal courts because of the preclusive effect of the landowner having already litigated the same issue(s) in the state courts.  See, e.g., San Remo Hotel L.P., v. City and County of San Francisco, 545 U.S. 323 (2005). 

The Court dealt with this “catch-22” in 2019 in Knick v. Township of Scott, 139 S. Ct. 2162 (2019, pointing out that there is a distinction between the substance of a right and the remedy for the violation of that right.  It’s the takings clause of the Fifth Amendment that establishes that the government can only take (either physically or via regulation) private property by paying for it. The government’s infringement on private property is what triggers possible compensation.  The Constitutional violation has occurred and a state court decision that makes the landowner financially whole simply remedies that violation.  It doesn’t redefine the property right.  Thus, the majority opinion reasoned, laws confer legal rights and when those rights are violated there must be legal recourse.  See, e.g., Marbury v. Madison, 5 U.S. 137 (1803).  As the majority noted, “a government violates the Takings Clause when it takes property without compensation, and…a property owner may bring a Fifth Amendment claim [in federal court]… at that time.”

Physical Takings

California case.  Earlier this week, the Court again dealt with the takings issue in Cedar Point Nursery, et al. v. Hassid, et al., No. 20-107, 2021 U.S. LEXIS 3394 (U.S. Sup. Ct. Jun. 23, 2021).  The lead plaintiff is a large strawberry growing operation in California, employing over 400 seasonal workers and about 100 full-time workers.  A California labor regulation, based on the California Agricultural Labor Relations Act of 1975 that gives ag employees a right to self-organize, grants labor organizations a “right to take access” to an ag employer’s property in order to solicit support for unionization.  Cal Code Regs., tit. 8, §20900(e)(1)(C).  Under the regulation, an ag employer must allow union organizers onto their property for up to three hours daily, 120 days per year.  In the fall of 2015, at 5 a.m., members of the United Farm Workers entered the plaintiff’s property without any prior notice being given.  They entered the plaintiff’s trim shed where hundreds of workers were preparing strawberry plants.  The organizers used bullhorns to stir up the workers and encourage them to join in a protest.  Other workers left the worksite.  The plaintiff filed charges against the union for taking access without notice.  In return, the union claimed that the plaintiff had committed an unfair labor practice similar to the claim it had made during the summer of 2015 against a California grower and shipper of table grapes and citrus. 

The ag businesses believed that the union would try to enter their properties again in the future, they sued claiming that the access regulation was an unconstitutional per se physical taking of an easement that was given, without compensation, to union organizers.  The trial court held that the regulation did not amount to a per se physical taking because it did not “allow the public to access their property in a permanent and continuous manner for whatever reason.”  Instead, the trial court held that the regulation was a non-physical taking to be evaluated under the muti-factor balancing test of Penn Central.  A majority of the appellate court affirmed, identifying the various types of non-physical takings discussed above and again determining that the balancing test of Penn Central applied.  The U.S. Supreme Court agreed to hear the case and reversed.

The Supreme Court determined that an actual physical appropriation of private property was involved.  It was a per se governmental taking.  The Court noted that the regulation didn’t merely restrict the use of private property, it appropriated it for the use and enjoyment of third parties.  One aspect of property ownership is the right to exclude others, and the Court determined that the ability of the union to take access of a part of an ag operation’s private property took that right away.  In addition, the right of access, even though temporary, still constitutes a taking.  There was no benefit of the loss of a property right flowing back to the ag businesses. 

Conclusion

The distinction between outright physical and non-physical takings is not always clear.  But, the Court’s decision in Cedar Point Nursery is a clear indication that the loss of the right to exclude others, even on a temporary basis, when no benefit inures to the property owner, is a fundamental property right that will be classified and protected as a physical taking with no balancing test required.

June 24, 2021 in Environmental Law, Regulatory Law | Permalink | Comments (0)

Wednesday, June 23, 2021

No Expansion of Public Trust Doctrine in Iowa – Big Implications for Agriculture

Overview

I wrote last fall about a legal theory that could have significant negative implications for private property rights in general and agricultural production activities in particular.  I was writing about the “public trust” doctrine and you can read last fall’s article here:  https://lawprofessors.typepad.com/agriculturallaw/2020/10/the-public-trust-doctrine-a-camels-nose-under-agricultures-tent.html.

I mentioned in last fall’s article that some activist groups and academics are pushing the courts to expand the public trust doctrine beyond its historic application to accomplish certain environmental and conservation objectives.  But as I mentioned then, any judicial expansion of the public trust doctrine will result in curtailing vested property rights.  That’s a big deal for agriculture because of agriculture’s use of natural resources such as land, air, water, minerals and the like.  Expanding the public trust doctrine also takes the power away from citizens and their elected officials to determine environmental and conservation policy. 

Recently, the Iowa Supreme Court refused to expand the doctrine to apply to farming practices in the state concluding that the issues involved were political ones that should be left up to the legislature. 

The public trust doctrine and a recent Iowa Supreme Court decision – it’s the topic of today’s post.

Background

As I noted last fall, the public trust doctrine is not new.  It derives from the seas being viewed as the common property of the public that cannot be privately used or owned.    They are held in “public trust.”  This concept from England ultimately became part of the U.S. common law and has its primary application to the access of the seashore and intertidal waters. 

The U.S. Supreme Court’s first application of the public trust doctrine was in 1842 in Martin v. Lessee of Waddell, 41 U.S.367 (1842). In the case, the issue was who had the right to submerged land and oyster harvesting off the coast of New Jersey.  The Court, largely based on the language in the charter granted by the King to a Duke to establish a colony and for policy and economic reasons, determined that the land area in issue belonged to the state of New Jersey for the benefit of the people of the state.  The Court dealt with the issue again in 1892 in a case involving a railroad that had been granted a large amount of the Chicago harbor. Illinois Central Railroad Company v. Illinois, 146 U.S. 387 (1892).  The Court determined that the government cannot alienate (interfere with) the public’s right to access land under waters that are navigable in fact except for situations where the land involved wouldn’t interfere with the public’s ability to access the water or impair navigation. 

As generally applied in the United States (although there are differences among the states), an oceanfront property owner can exclude the public below the mean high tide (water) line.  See e.g., Gunderson v. State, 90 N.E. 3d 1171 (Ind. 2018)That’s the line of intersection of the land with the water's surface at the maximum height reached by a rising tide (e.g., high water mark).  Basically, it’s the debris line or the line where you would find fine shells.  However, traceable to the mid-1600s, Massachusetts and Maine recognize private property rights to the mean low tide line even though they do allow the public to have access to the shore between the low and high tide lines for "fishing, fowling and navigation.”  In addition, in Maine, the public can cross private shoreline property for scuba diving purposes.  McGarvey v. Whittredge, 28 A.3d 620 (Me. 2011). 

Other applications of the public trust doctrine involve the preservation of oil resources, fish stocks and crustacean beds.  Also, many lakes and navigable streams are maintained via the public trust doctrine for purposes of drinking water and recreation.  But, whether the doctrine applies in such situations is a matter of state law.  That’s where the recent Iowa Supreme Court decision comes into play.

Iowa Citizens for Community Improvement, et al. v. State

A long-standing battle in Iowa over the level of nitrates and phosphorous in an Iowa waterway and farm filed runoff came to a head in Iowa Citizens for Community Improvement, et al. v. State,

No. 19-1644, 2021 Iowa Sup. LEXIS 84 (Jun. 18, 2021).  For approximately the past decade activist groups and certain academics have sought more regulatory control over farming practices that they deem contribute to excessive nutrients in an Iowa river and higher drinking water prices in Des Moines and elsewhere.  They have sought to remove from the state legislature the power to make these decisions and have also sought more federal control.

The plaintiffs, two social justice organizations, sued the State of Iowa and state officials and agencies associated with agriculture and the environment claiming that the public trust doctrine required them to enact legislation and rules forcing farmers to adopt farming practices that would significantly reduce levels of nitrogen and phosphorous runoff into the Raccoon River. The plaintiffs claimed that such a requirement would improve members’ feelings by enhancing aesthetics and recreational uses of the river and by reducing members’ water bills (at least in the Des Moines area).  They sought declaratory and injunctive relief.

In response, the State argued that the plaintiffs lacked standing to sue and that the issue was nonjusticiable (i.e., not capable of being decided by a court). After the trial court denied the defendants’ motion to dismiss, the defendants sought an interlocutory appeal (i.e., an appeal of the trial court’s ruling while other aspects of the case proceeded).

On review, the state Supreme Court first noted that the scope of the public trust doctrine in Iowa is narrow, and that the doctrine should not be overextended. The Supreme Court noted that for a party to have standing to sue, they must have a specific personal or legal interest in the litigation and be “injuriously affected.”  For a party to be injuriously affected, the Supreme Court stated that the injury complained of must be likely to be redressed by the court’s favorable decision. On that point, the Supreme Court determined that it would be speculative that a favorable court decision would result in a more aesthetically pleasing river or lower water rates.   

Further, the Supreme Court determined the injunctive relief was not appropriate and that what the plaintiffs were seeking could only be accomplished through legislation. The Supreme Court pointed out that the plaintiffs admitted that the defendants lacked authority to require limits for nitrogen and phosphorous from agricultural nonpoint sources – the matter was up to the legislature. As a result, the Supreme Court determined the plaintiffs’ claims must be dismissed due to lack of standing.

The plaintiffs also claimed that constitutional due process rights were at stake and the Court should address them.  The Supreme Court disagreed, pointing out that the plaintiffs’ own arguments cut against the Court being able to address such a claim.  Because the plaintiffs were asking the Court to broaden the application of the public trust doctrine, the plaintiffs were essentially asking the Court to inject itself into political matters where there would be a lack of judicially discoverable and manageable standards.  As the Supreme Court pointed out, “different uses matter in different degrees to different people.” Publicly elected policy makers decide these matters.  Not the courts.

Consequently, the Court determined that granting any meaningful relief to the plaintiffs would result in the judicial branch asserting superiority over the legislature.  An impermissible outcome under the co-equal system of government. 

Conclusion

The push for an expansion of the public trust doctrine is not likely to subside. Activists that are unable to win at the ballot box have long tried to use the judicial system to do their policy work for them.  Many agricultural activities and uses of natural resources on private property remain at risk of an expanded doctrine.  State legislators and all citizens should be aware of the court battles going on over the public use doctrine and what an expansion of the doctrine would do to limit property rights (without compensation).

June 23, 2021 in Environmental Law, Regulatory Law | Permalink | Comments (0)

Sunday, June 20, 2021

Trouble With ARPA

Overview

The American Rescue Plan Act of 2021 (ARPA) allocated approximately $29 billion to a “Restaurant Revitalization Fund” for grants to help restaurant owners meet payroll and other expenses.  ARPA, §5003(b)(2)(A).  Another section of ARPA, §1005, is a USDA loan “pay-off” program.  But, priority is given to certain restaurants and only certain people can get their ag loans paid off.  There’s the rub.  If you’re in the select group, all is well.  If you’re not, then you are out of luck.  But, are the programs constitutional?

The constitutionality of parts of ARPA – that’s the focus of today’s blog post.

Restaurant Revitalization Fund (RRF)

As noted above, ARPA creates a fund for grants to help restaurant owners meet payroll and other expenses.  The funded grants are to aid small, privately owned restaurants rather than large chain restaurants.  ARPA, §5003(a)(4)(C).  The Small Business Administration (SBA) processes the applications and distributes the funds.  During the application process, restaurant owners must certify to the SBA that the grant is necessary to support ongoing operations.  ARPA, §5003(c)(2)(A). 

The fund is not unlimited – the SBA distributes the money from the fund on a first-come, first-served basis, with a catch.  The catch is that fund distributions during the first 21 days are restricted to applicants that are at least 51 percent owned and controlled by women, veterans, or the “socially and economically disadvantaged.”  ARPA §5003(c)(3)(A).  Non-priority restaurants may apply during the initial 21-day period, but they will not receive a grant until the initial period expires.  Id.  If the fund is depleted by then, the non-priority restaurants will not receive any funds – the fund will not be replenished. 

The Vitolo case.  In Vitolo v. Guzman, Nos. 21-5517/5528, 2021 U.S. App. LEXIS 16101 (6th Cir. May 27, 2021), the plaintiffs, a married couple, owned a restaurant.  The husband is white and his wife is Hispanic, and they each owned 50 percent of the restaurant.  They submitted an application on May 3, the first day the RRF became available.  That’s when they learned that restaurants that are majority owned by women and minorities would be prioritized and that they weren’t eligible for any grant funds during the priority period.  They were notified that they would be eligible for $104,590 from the RRF if money remained in the fund after the priority distribution period.  Because the restaurant was not at least 51 percent owned by a woman or veteran, the plaintiffs had to qualify as “socially and economically disadvantaged” to get priority status. ARPA defines social and economic disadvantage by reference to the Small Business Act.  Under that legislation, “socially disadvantaged” is defined as a person having been “subjected to racial or ethnic prejudice” or “cultural bias” based solely on immutable characteristics.  15 U.S.C. §637(a)(5); 13 C.F.R. §124.103(a).  A person is considered “economically disadvantaged” if (1) he is socially disadvantaged; and (2) he faces “diminished capital and credit opportunities” compared to non-socially disadvantaged people who operate in the same industry15 U.S.C. §637(a)(6)(A).  If a person falls into one of the racial or ethnic groups, the SBA simply presumes that the person qualifies as socially disadvantaged.  If the presumption doesn’t apply, an applicant must prove that they have experienced racial or ethnic discrimination or cultural bias by a preponderance of the evidence. 

The plaintiffs sued to end the explicit racial and sex/ethnic priority preferences in the RRF’s grant funding process (13 C.F.R. §124.103) on the basis that the funding was unconstitutionally discriminatory.  The trial court did not issue a restraining order or injunction.  On appeal, the appellate court granted the plaintiff’s motion for an expedited appeal.  The court concluded that the government had no compelling interest in giving some races of people priority access to the RRF, and that the SBA was engaged in nothing less than “racial gerrymandering.”  In addition, the appellate court concluded that granting priority to RRF funds to women constituted sex-based discrimination that was presumptively invalid, and that the government failed to provide any “exceedingly persuasive justification” for such discrimination.  Indeed, the appellate court pointed out that all women-owned restaurants were prioritized even if they were are not economically disadvantaged.  Thus, the government failed to carry its burden of showing that its discriminatory policy passed the substantial-relation test. 

Accordingly, the appellate court granted the plaintiff an injunction pending appeal, noting that the plaintiffs will win on the merits of their constitutional claim.  The appellate court ordered the government to fund the plaintiff’s grant application upon approval before all later-filed applications without regard to processing time or the applicant’s race or sex.  Veteran-owned restaurants can continue to receive priority funding.  The preliminary injunction is to remain in place until the case is resolved on the merits, or all appeals are exhausted. 

USDA Loan Forgiveness

Section 1005 of ARPA directs the U.S. Secretary of Agriculture to pay up to 120 percent of the outstanding debt in existence as of January 1, 2021, of a “socially disadvantaged farmer or rancher.” H.R. 1319, §1005(a)(2).   A “socially disadvantaged farmer or rancher” is defined as a person that is a member of a “socially disadvantaged group” which is defined, in turn, as a group whose members have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities.  H.R. 1319, §1005(b)(3), referencing 7 U.S.C. 2279(a).  In short, the loan forgiveness program is based entirely on the race of the farm or ranch borrower. 

The payment is to either be a direct pay-off of the borrower’s loan or be paid to the borrower with respect to any of the borrower’s USDA direct farm loans and any USDA-guaranteed farm loan.  H.R. 1319, §§1005(a)(2)(A)-(B).  Also included is a Commodity Credit Corporation Farm Storage Facility Loan. 

On it’s website (https://www.farmers.gov /americanrescueplan), the USDA stated that, “Eligible Direct Loan borrowers will begin receiving debt relief letters from FSA in the mail on a rolling basis, beginning the week of May 24. . . . After reviewing closely, eligible borrowers should sign the letter when they receive it and return to FSA.” It advises that, in June 2021, the FSA will begin to process signed letters for payments, and “about three weeks after a signed letter is received, socially disadvantaged borrowers who qualify will have their eligible loan balances paid and receive a payment of 20% of their total qualified debt by direct deposit, which may be used for tax liabilities and other fees associated with payment of the debt.”  Id. $3.8 billion was allocated to the program. 

The Foust case.  In May the loan forgiveness program was challenged on constitutional grounds as being racially discriminatory. In Foust, et al. v. Vilsack, No. 21-C-548, 2021 U.S. Dist. LEXIS 108719 (E.D. Wisc. Jun. 10, 2021), the court entered a universal temporary restraining order barring the USDA from forgiving any loans pursuant to ARPA §1005 until the court rules on the plaintiffs’ motion for a preliminary injunction.  The court noted that the plaintiffs’, twelve white farmers from nine states, would suffer irreparable harm without the issuance of the restraining order; did not have adequate traditional legal remedies; and had likelihood of success on the merits.  The court concluded that the USDA lacked a compelling interest for the racial classifications of the loan forgiveness program and failed to target any specific episode of past or present discrimination.  The court also determined that the USDA had no evidence of intentional discrimination by the USDA in the implementation of recent ag subsidies and pandemic relief efforts.  As such, the USDA failed to establish that it had a compelling interest in remedying the effects of past and present discrimination through the distribution of benefits on the basis of racial classifications. 

The court also determined that the plaintiffs were likely to succeed on the merits of their claim that the USDA’s use of race-based criteria in the administration of the program violates their right to equal protection under the law.  The court further determined that if it did not issue the injunction, the USDA would spend the allocated funds for the loan forgiveness program and forgive the loans of minority farmers while the case is pending and would have no incentive to provide similar relief on an equitable basis to others. The court stated, “Plaintiffs are excluded from the program based on their race and are thus experiencing discrimination at the hands of their government.”  Accordingly, the court held that the plaintiffs had established a strong likelihood that Section 1005 of the ARPA is unconstitutional and that the public interest favored the issuance of a temporary restraining order. 

The court’s order bars the USDA from forgiving any loans pursuant to Section 1005 of ARPA until the court rules on the plaintiffs’ motion for a preliminary injunction. 

Conclusion

One would think that in 2021, the U.S. government would not be discriminating in its programs based on immutable characteristics.  I guess not.

June 20, 2021 in Regulatory Law | Permalink | Comments (0)

Friday, June 11, 2021

The “Dormant” Commerce Clause and Agriculture

Overview

Much environmental legislation and regulation restricting private land use activities is created pursuant to the commerce clause of the United States Constitution.  Article I Section 8 of the U.S. Constitution provides in part, “the Congress shall have Power...To regulate Commerce with foreign Nations and among the several states, and with the Indian Tribes.”  But, there’s also something known as the “Dormant” Commerce Clause.  What is it and how is it relevant to agricultural law and policy?

The Dormant Commerce Clause – it’s the topic of today’s post.

Background

The Dormant Commerce Clause cannot be found in the Constitution. It is a judicially-created doctrine that several U.S. Supreme Court Justices don’t believe in and that special interests groups have utilized to achieve an outcome in the courts that they could not obtain in state legislatures.  In essence, the doctrine has been used to create law where there is none with the result of a further expansion of the federal government into what should be purely a state matter.  The outcome is that elected state legislators are stripped from establishing policy for their own citizens.  For example, with respect to agriculture, this has been evident in the past couple of decades with respect to agricultural “checkoff” programs and anti-corporate farming laws 

So what is the “Dormant Commerce Clause”?  It is a constitutional law doctrine that says Congress's power to "regulate Commerce ... among the several States" implicitly restricts state power over the same area.  In general, the Commerce Clause places two main restrictions on state power – (1) Congress can preempt state law merely by exercising its Commerce Clause power by means of the Supremacy Clause of Article VI, Clause 2 of the Constitution; and (2) the Commerce Clause itself--absent action by Congress--restricts state power.  In other words, the grant of federal power implies a corresponding restriction of state power.  This second limitation has come to be known as the "Dormant" Commerce Clause because it restricts state power even though Congress's commerce power lies dormant. Willson v. Black Bird Creek Marsh Co., 27 U.S. 245 (1829).  The label of “Dormant Commerce Clause” is really not accurate – the doctrine applies when the Congress is dormant, not the Commerce Clause itself.

Rationale.  The rationale behind the Commerce Clause is to protect the national economic market from opportunistic behavior by the states - to identify protectionist actions by state governments that are hostile to other states.  Generally, the dormant Commerce Clause doctrine prohibits states from unduly interfering with interstate commerce.  A recent example on this point is the California legislature enacting Proposition 12 specifying how laying hens are to be raised in other states if those producers want access to the California market. 

The U.S. Supreme Court has developed two tests to determine when state regulation has gone too far.  Under the first test, states are generally prohibited from enacting laws that discriminate against interstate commerce.  City of Philadelphia v. New Jersey, 437 U.S. 617 (1978).  Under the second test, the Court balances the burden on interstate commerce against the state's interest in its regulation. Kassel v. Consolidated Freightways Corp., 450 U.S. 662 (1981).

The Court has never held that discrimination between in-state and out-of-state commerce, without more, violates the Dormant Commerce Clause.  Instead, the Court has explained that the Dormant Commerce Clause is concerned with state laws that both discriminate between in-state and out-of-state actors that compete with one another, and harm the welfare of the national economy.  Thus, a discriminatory state law that harms the national economy is permissible if in-state and out-of-state commerce do not compete.  See, e.g., General Motors Corp. v. Tracy, 117 S. Ct. 811, 824-26 (1997). 

Conversely, a state law that discriminates between in-state and out-of-state competitors is permissible if it does not harm the national economy. H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525 (1949).  That was the basis for the court’s decision in the California Proposition 12 case mentioned above.  In that case, National Animal Meat Institute v. Becerra, 825 Fed. Appx. 518 (9th Cir. 2020), aff’g. sub. nom., National Animal Meat Institute v. Becerra, 420 F. Supp. 3d 1014 (C.D. Cal. 2019), Proposition 12 established minimum requirements on farmers to provide more space for egg-laying hens, breeding pigs, and calves raised for veal. Specifically, the law requires that covered animals be housed in confinement systems that comply with specific standards for freedom of movement, cage-free design and minimum floor space. The law identifies covered animals to include veal calves, breeding pigs and egg-laying hens. The implementing regulations prohibit a farm owner or operator from knowingly causing any covered animal to be confined in a cruel manner, as specified, and prohibits a business owner or operator from knowingly engaging in the sale within the state of shell eggs, liquid eggs, whole pork meat or whole veal meat, as defined, from animals housed in a cruel manner. In addition to general requirements that prohibit animals from being confined in a manner that prevents lying down, standing up, fully extending limbs or turning around freely, the measure added detailed confinement space standards for farms subject to the law.

Under Proposition 12, effective January 1, 2022, all pork producers selling in the California market must raise sows in conditions where the sow has 24 square feet per sow. The law also applies to meat processors – whole cuts of veal and pork must be from animals that were housed in accordance with the space requirements of Proposition 12. The plaintiff challenged Proposition 12 as an unconstitutional violation of the Dormant Commerce Clause by imposing substantial burdens on interstate commerce “that clearly outweigh any valid state interest.” The trial court rejected the challenge, finding that the plaintiff failed to establish that the law discriminated against out-of-state commerce for the purpose of economic protectionism. On appeal, the appellate court affirmed. The appellate court determined that the trial court did not abuse its discretion in finding that the plaintiff was not likely to succeed on the merits of its Dormant Commerce Clause claim. The appellate court also stated that the plaintiff acknowledged that Proposition 12 was not facially discriminatory, and had failed to produce sufficient evidence that California had a protectionist intent in enacting the law. The appellate court noted the trial court’s finding that the law was not a price control or price affirmation statute. Similarly, the appellate court held that the trial court did not abuse its discretion in holding that Proposition 12 did not substantially burden interstate commerce because it did not impact an industry that is inherently national or requires a uniform system of regulation. The appellate court noted that the law merely precluded the sale of meat products produced by a specific method rather than burdening producers based on their geographic location. 

Unfortunately, the Supreme Court has been careless in applying the anti-discrimination test, and in many cases, neither of the two requirements--interstate competition or harm to the national economy--is ever mentioned.  See, e.g., Hughes v. Oklahoma, 441 U.S. 322 (1979). The reason interstate competition goes unstated is obvious – in most cases the in-state and out-of-state actors compete in the same market.  But, the reason that the second requirement, harm to the national economy, goes unstated is because the Court simply assumes the issue away.  Specifically, the Court assumes that discrimination between in-state and out-of-state competitors necessarily harms the welfare of the national economy, making the second requirement superfluous.  The Court simply assumes that free competition among rational economic actors will necessarily improve the national economy.  In other words, the Court assumes that individuals can have no impact on the results of the market, and that the rational pursuit of individual self-interest will result in society being better off.  But, this is an incorrect assumption – and it’s the primary reason for the existence of anti-trust laws, including the Packers and Stockyards Act, and the real reason behind why, historically, some states have taken action to enact corporate farming laws. 

For example, assume that Mary goes to the grocery store to buy steak for Sunday dinner.  Mary will evaluate the information that is available in the marketplace by comparing the prices of the different brands along with her perception of their various qualities.  Based on her analysis, she will decide which steak product to buy.  Price and quality are set by the market, and Mary does not act strategically – she does not take into account any future behavior of the meat department manager or the supplier.  However, the purchasing agent for the grocery store who buys meat from suppliers not only considers price and quality, but also the supplier’s future behavior.  The purchasing agent will want to know whether the supplier is likely to breach a contract with the grocery store which would result in empty shelves and lost sales.  If a breach is anticipated, the purchasing agent may refuse to deal with the supplier regardless of price and quality.  So, the purchasing agent will act strategically by considering how the supplier is anticipated to behave.  The outcome is that Mary may not actually be getting the best deal that she otherwise could. 

Economic theory has a blind spot for strategic behavior – it does not address situations in which people anticipate another’s future conduct.  It simply assumes that free competition among rational actors will be efficient.  But, the presence of strategic behavior undermines that assumption.  That’s where the legal system comes in - to establish appropriate legal rules to provide incentives or disincentives for appropriate economic conduct.   

Application

So what does all of this mean?  Why is this relevant?  The application is that, in some cases, states act strategically.  That is, they act in response to the anticipated behavior of other states.  In these situations, it is incorrect for any court to build economic assumptions about free competition into its Dormant Commerce Clause anti-discrimination test.  In these cases, state discrimination between in-state and out-of-state competitors may actually improve national welfare.

With that much said, in recent years, the most conservative Justices on the Supreme Court have argued for the complete elimination of the dormant Commerce Clause.  Former Chief Justice Rehnquist, and former Justice Scalia as well as the most senior member of the current Supreme Court, Justice Thomas, believe that not only is there no textual basis for the Dormant Commerce Clause, but that it actually contradicts, and therefore directly undermines, the Constitution's carefully established textual structure for allocating power between federal and state governments. In a dissent joined by Rehnquist and Scalia, Justice Thomas concluded: "The negative Commerce Clause has no basis in the text of the Constitution, makes little sense, and has proved virtually unworkable in application.”  Camps Newfound/Owatonna, Inc. v. Town of Harrison, 117 S. Ct. 1590, 1615 (1997).

How would the Court rule on a Dormant Commerce Clause case if it were to have one?  Who knows?  But, using the Dormant Commerce Clause to strike down state legislation impacting agriculture, would lead to an expansion of the federal government, a reduction of the role of state legislatures to set policy for their citizens and a further push down the path of globalization.  See McEowen, Roger A., South Dakota Amendment E Ruled Unconstitutional – Is There a Future for Legislative Involvement in Shaping the Structure of Agriculture?, 37 Creighton Law Review, 285 (2004).  The recent inclusion by the current Administration of including a provision in federal legislation purporting to provide economic relief from the virus barring states from using the funds to enact tax breaks at the state level is an example of the expansion of the power of the federal government over states. 

In a 1932 dissenting opinion, Justice Brandeis sounded a warning that remains true today.

“To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the nation. It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country. This Court has the power to prevent an experiment.  We may strike down the statute which embodies it on the ground that, in our opinion, the measure is arbitrary, capricious, or unreasonable…. But, in the exercise of this high power, we must be ever on our guard, lest we erect our prejudices into legal principles…”.  New State Ice Co. v. Liebmann, 285 U.S. 262 (1932)

Conclusion

The Dormant Commerce Clause is something to watch for in court opinions involving agriculture.  As states, enact legislation designed to protect the economic interests of agricultural producers in those states, those opposed to such laws could challenge them on Dormant Commerce Clause grounds. This is one of those legal theory issues that is “floating” around out there that can have a real impact in the lives of farmers and ranchers and how economic activity is conducted.  

June 11, 2021 in Regulatory Law | Permalink | Comments (0)

Saturday, June 5, 2021

The FLSA and Ag’s Exemption From Paying Overtime Wages

Overview

Agricultural law is often “law by the exception.”  One of those areas of exception involves the exemption from paying overtime wages to workers engaged in agricultural employment.  Recently, a federal court issued a decision involving the issue of whether transporting field workers for non-work related activities was within the exemption. 

The scope of the exemption for paying overtime for agricultural employment – it’s the topic of today’s post.

Fair Labor Standards Act (FLSA)

The FLSA (29 U.S.C. §§ 201 et seq.) requires that agricultural employers who use 500 man-days or more of agricultural labor in any calendar quarter of a particular year must pay the agricultural minimum wage to certain agricultural employees in the following calendar year. Man-days are those days during which an employee performs any agricultural labor for not less than one hour.  The man-days of all agricultural employees count in the 500 man-days test, except those generated by members of an incorporated employer's immediate family.  29 U.S.C. § 203(e)(3).  Five hundred man-days is roughly equivalent to seven workers working five and one-half days per week for thirteen weeks (5.5 x 7 x 13 = 501 man-days). 

Under the FLSA, “agriculture” is defined to include “among other things (1) the cultivation and tillage of the soil, dairying, the production, cultivation, growing and harvesting of any agricultural or horticultural commodities; (2) the raising of livestock, bees, fur-bearing animals, or poultry; and (3) any practices (including any forestry or lumbering operations) performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market.”  29 U.S.C. § 203(f). For related entities, where not all of the entities involve an agricultural trade or business, the question is whether the business operations are so intertwined that they constitute a single agricultural enterprise exempt from the overtime rules.  See, e.g., Ares v. Manuel Diaz Farms, Inc., 318 F.3d 1054 (11th Cir. 2003).

Wage Requirement

The minimum wage must be paid to all agricultural employees except: (1) members of the employer's immediate family, unless the farm is incorporated; (2) local hand-harvest, piece-rate workers who come to the farm from their permanent residences each day, but only if such workers were employed less than 13 weeks in agriculture in the preceding year; (3) children, age 16 and under, whose parents are migrant workers, and who are employed as hand-harvest piece-rate workers on the same farm as their parents, provided that they receive the same piece-rate as other workers; and (4) employees engaged in range production of livestock. 29 U.S.C. § 213(a)(6).  Where the agricultural minimum wage must be paid to piece-rate employees, the rate of pay for piece-rate  work must be sufficient to allow a worker reasonably to generate that rate of hourly income.

The FLSA requires covered employers to compensate employees for activities performed during the workday.  But, the FLSA does not require that compensation be paid to employees for activities performed outside the workday such as walking, riding or traveling to and from the actual place of performance of the employee’s principal activity, and for activities which occur before and after the employee’s principal activity.  On the question of whether an employee is entitled to compensation for time spent waiting at stations where required safety and health equipment is distributed, donned and doffed, and traveling to and from these stations to work sites at the beginning and end of each workday, the U.S. Supreme Court has ruled that such activities are indispensable to an employee’s principal activity and are, therefore, a principal activity itself. However, the Court ruled that unless an employee is required to report at a specific time and wait to don required gear, the time spent waiting to don gear is preliminary to the first principal activity of the workday and is not compensable unless compensation is required by the employment agreement or industry custom and practice. See, e.g., IBP, Inc. v. Alvarez, et al., 546 U.S. 21 (2005). See also De Asencio v. Tyson Foods, Inc., 500 F.3d 361 (3d Cir. 2007), cert. den., sub nom. Tyson Foods, Inc., v. De Asencio, 128 S. Ct. 2902 (2008).

Overtime.  The FLSA requires payment of an enhanced rate of at least one and one-half times an employee’s regular rate for work over 40 hours in a week.  However, an exemption denies persons employed in agriculture the benefit of mandatory overtime payment.  29 U.S.C. §213(b)(12).  The 500 man-days test is irrelevant in this context. In addition, there are specific FLSA hour exemptions for certain employment that is not within the FLSA definition of agriculture.

The 1977 “strawberry” amendment allows an agricultural employer who is required to pay the federal agricultural minimum wage to apply for an administrative waiver permitting the employment of children of others, ages 10 and 11, outside of school hours and for not more than eight weeks in the calendar year. 29 U.S.C. § 213(c)(4). Applicants for the waiver must submit objective data showing a crop with a short harvesting season, unavailability of employees ages 12 and above, a past tradition of employing younger children, and the potential of severe economic disruption if this work force is not available.  In addition, the applicant must demonstrate that the level and type of pesticides and other chemicals used will not have an adverse effect on the health or well-being of the individuals to whom the waiver would apply.  Compliance with adult field worker standards will not necessarily satisfy this requirement.

Recent Case

In Ramirez v. Statewide Harvesting & Hauling, No. 20-11995, 2021 U.S. App. LEXIS 15215 (11th Cir. May 21, 2021), aff’g., 2019 U.S. Dist. LEXIS 235412 (M.D. Fla., Sept. 30, 2019), the defendant, a fruit-harvesting company, employed primarily temporary foreign guest workers as H-2A harvest workers.  As such, the defendant was required to provide housing (and housing amenities) and meals (or free access to a kitchen).  The defendant provided cooking facilities rather than meals and contracted for crew leaders to transport the harvest workers to such places as grocery stores, laundromats and banks on a weekly basis.  Each trip took four hours, and the crew leaders were not paid overtime when they worked over forty hours in a week.  The defendant acknowledged that the crew leaders worked over 40 hours per week on occasion, but claimed that the crew leaders were engaged in “agricultural” employment and, as such, the defendant was exempt from paying overtime wages.  Both parties motioned for summary judgment. 

The federal trial court referred the motions to a magistrate.  The magistrate concluded that the defendant did not fall within the definition of a “farmer.”  The magistrate also determined that the transportation of the field workers did not involve work performed on a farm and that the trips were more than just a minor part of the workers job responsibilities.  While this indicated that that exemption would not apply, the magistrate recommended that time spent transporting the workers was exempt from the requirement to pay overtime wages because the defendant provided the transportation to be compliant with the H-2A program. 

The trial court determined that the activities of the crew leaders were not performed by a farmer.  As such, the transportation activities that occurred wholly off of the farm were not exempt from the requirement to pay the overtime wage rate of time and a half for the hours worked exceeding 40 hours per week.  29 U.S.C. §207((a)(1).   

The appellate court affirmed, finding that the transportation of the workers did not involve “farming.”  The appellate court also determined that the transportation activity did not constitute “secondary agriculture” because it wasn’t performed by a farmer or performed on the farm.  In addition, the appellate court concluded that the defendant was not a “farmer” because it did not “own, lease, or control” the farms or crops that the workers harvested.  See 29 C.F.R. §780.131The appellate court also determined that the defendant could not utilize the primary and secondary definition of “agriculture.”  The activity at issue did not occur on a “farm.” Thus, because the activity of the crew leaders in transporting the field workers to town and back was not performed on a farm or by a farmer, the appellate court affirmed the plaintiff’s motion for summary judgment. 

Conclusion

Agriculture often has special rules that apply in the context of the law, including tax law.  The overtime exemption under the FLSA is just one of those unique areas.  But, to use the rule for agriculture, one must satisfy the applicable definitions. 

June 5, 2021 in Regulatory Law | Permalink | Comments (0)

Saturday, May 1, 2021

The Agricultural Law and Tax Report

Overview
 
Starting Monday May 3, I am hosting a daily 2-minute program, The Agricultural Law and Tax Report on farm radio stations nationwide and on SiriusXM 147.  The purpose of each report is to educate farmers and ranchers and rural landowners on the unique legal and tax issues that they are often faced with.  Each program explains what the law is on a particular topic, and how actual court cases and IRS rulings have been decided based on that law, and what the application is to a farming or ranching operation.
 
Topical Coverage
 
Some of the topics that I will address include:
 
Contract Issues - (auction sales; farm leases; hunting leases; grain and livestock sale contracts; types of clauses to protect the farmer-seller; remedies if there is a breach).
 
Ag Financing Issues - (collateral issues; rules governing lenders and farm borrowers; foreclosure issues and Farmers’ Home (FSA); redemption rights for farmland; agricultural liens).
 
Agricultural Bankruptcy - (Chapter 12 farm bankruptcy issues).
 
Farm Income Tax - (handling USDA/CCC loans; government payments; crop insurance proceeds; pre-paying expenses; deferred payment contracts; commodity trading income; easement payments; crop and livestock share rental income).
 
Real Property Issues - (fences and boundaries; buying and selling farmland; recoveries from settlements and court judgments (such as the Roundup litigation, etc.)).
 
Farm Estate Planning - (types of title ownership; disruption of family farm if there is no will or trust; planning approaches to facilitate keeping the farm in the family; federal estate tax planning; gifting of farm assets; treating off-farm and on-farm heirs fairly).
 
Liability Issues - (food product liability issues (labeling and disparagement laws); liability for trespassers and others on the property; trespassing dog laws; nuisance law; employer's responsibility for farm employees; animal diseases; fence laws).
 
Criminal Law Issues - (what can the government search without a warrant; cruelty to animal laws; government programs and criminal liability; environmental liability for farmers and ranchers).
 
Water Law Issues - (types of water law systems; use of surface water for crops and livestock; use of subsurface water; boundary disputes).
 
The initial sponsor is First State Bank headquartered in Lincoln, NE.  If you are interested in also becoming a sponsor, please let me know.
 
Many thanks to John Mellencamp and Sony Music Publishing Co. for the "bumper" music that accompanies each show. And...special thanks to Donn Teske.
 
Check with your local farm radio station to see if they are carrying The Agricultural Law and Tax Report. If not, please call your local station and request it, and let me know
 
My hope is that you find the show profitable for your farming business, rural practice, and your local rural community.

May 1, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Monday, April 19, 2021

Ag Law and Taxation - 2016 Bibliography

Overview

Today's post is a bibliography of my ag law and tax blog articles of 2016.  Earlier this year I have provided bibliographies for you of my blog articles for 2020, 2019, 2018 and 2017.  This now completes the bibliographies since I began the blog in July of 2016.  At the end of 2021, I will post a lengthy blog article of all of the articles published through that timeframe. 

The 2016 bibliography of articles – it’s the subject matter of today’s post.

BUSINESS PLANNING

Treasury Attacks Estate and Entity Planning Techniques With Proposed Valuation Regulations

https://lawprofessors.typepad.com/agriculturallaw/2016/08/treasury-attacks-estate-and-entity-planning-techniques-with-proposed-valuation-regulations.html

Using an LLC to Reduce S.E Tax and the NIIT

https://lawprofessors.typepad.com/agriculturallaw/2016/09/using-an-llc-to-reduce-se-tax-and-the-niit.html

IRS Audit Issue – S Corporation Reasonable Compensation

https://lawprofessors.typepad.com/agriculturallaw/2016/10/irs-audit-issue-s-corporation-reasonable-compensation.html

Rents Are Passive, But They Can Be Recharacterized - And Grouped (Sometimes)

https://lawprofessors.typepad.com/agriculturallaw/2016/11/rents-are-passive-but-they-can-be-recharacterized-and-grouped-sometimes.html

Tribute To Orville Bloethe

https://lawprofessors.typepad.com/agriculturallaw/2016/12/tribute-to-orville-bloethe.html

CIVIL LIABILITIES

Registration of a Pesticide Doesn't Mean It Might Not Be Misbranded

https://lawprofessors.typepad.com/agriculturallaw/2016/07/registration-of-a-pesticide-doesnt-mean-it-might-not-be-misbranded-.html

Death of Livestock In Blizzard Was a Covered Loss by “Drowning”

https://lawprofessors.typepad.com/agriculturallaw/2016/08/death-of-livestock-in-blizzard-was-a-covered-loss-by-drowning.html

FIFRA Pre-Emption of Pesticide Damage Claims

https://lawprofessors.typepad.com/agriculturallaw/2016/08/fifra-pre-emption-of-pesticide-damage-claims.html

Agritourism Acts, Zoning Issues and Landowner Liability

https://lawprofessors.typepad.com/agriculturallaw/2016/09/agritourism-acts-zoning-issues-and-landowner-liability.html

The “Agriculture” Exemption From The Requirement To Pay Overtime Wages

https://lawprofessors.typepad.com/agriculturallaw/2016/09/the-agriculture-exemption-from-the-requirement-to-pay-overtime-wages.html

The Scope and Effect of Equine Liability Acts

https://lawprofessors.typepad.com/agriculturallaw/2016/09/the-scope-and-effect-of-equine-liability-acts.html

What’s a Rural Landowner’s Responsibility Concerning Crops, Trees and Vegetation Near an Intersection?

https://lawprofessors.typepad.com/agriculturallaw/2016/12/whats-a-rural-landowners-responsibility-concerning-crops-trees-and-vegetation-near-an-intersection.html

CONTRACTS

Some Thoughts on Production Contracts

https://lawprofessors.typepad.com/agriculturallaw/2016/10/some-thoughts-on-production-contracts.html

CRIMINAL LIABILITIES

Prison Sentences Upheld For Egg Company Executives Even Though Government Conceded They Had No Knowledge of Salmonella Contamination.

https://lawprofessors.typepad.com/agriculturallaw/2016/07/prison-sentences-upheld-for-egg-company-executives-even-though-government-conceded-they-had-no-knowledge-of-salmonella-contam.html

ENVIRONMENTAL LAW

Registration of a Pesticide Doesn't Mean It Might Not Be Misbranded

https://lawprofessors.typepad.com/agriculturallaw/2016/07/registration-of-a-pesticide-doesnt-mean-it-might-not-be-misbranded-.html

FIFRA Pre-Emption of Pesticide Damage Claims

https://lawprofessors.typepad.com/agriculturallaw/2016/08/fifra-pre-emption-of-pesticide-damage-claims.html

Air Emissions, CWA and CERCLA

https://lawprofessors.typepad.com/agriculturallaw/2016/08/air-emissions-cwa-and-cercla.html

Are Seeds Coated With Insecticides Exempt From FIFRA Regulation?

https://lawprofessors.typepad.com/agriculturallaw/2016/12/are-seeds-coated-with-insecticides-exempt-from-fifra-regulation.html

ESTATE PLANNING

The Situs of a Trust Can Make a Tax Difference

https://lawprofessors.typepad.com/agriculturallaw/2016/07/the-situs-of-a-trust-can-make-a-tax-difference.html

Treasury Attacks Estate and Entity Planning Techniques With Proposed Valuation Regulations

https://lawprofessors.typepad.com/agriculturallaw/2016/08/treasury-attacks-estate-and-entity-planning-techniques-with-proposed-valuation-regulations.html

Common Estate Planning Mistakes of Farmers

https://lawprofessors.typepad.com/agriculturallaw/2016/09/common-estate-planning-mistakes-of-farmers.html

Staying on the Farm With the Help of In-Home Care

https://lawprofessors.typepad.com/agriculturallaw/2016/10/staying-on-the-farm-with-the-help-of-in-home-care.html

Including Property in the Gross Estate to Get a Basis Step-Up

https://lawprofessors.typepad.com/agriculturallaw/2016/10/including-property-in-the-gross-estate-to-get-a-basis-step-up.html

Farm Valuation Issues

https://lawprofessors.typepad.com/agriculturallaw/2016/10/farm-valuation-issues.html

The Future of the Federal Estate Tax and Implications for Estate Planning

https://lawprofessors.typepad.com/agriculturallaw/2016/11/the-future-of-the-federal-estate-tax-and-implications-for-estate-planning.html

Tribute To Orville Bloethe

https://lawprofessors.typepad.com/agriculturallaw/2016/12/tribute-to-orville-bloethe.html

INCOME TAX

House Ways and Means Committee Has A Blueprint For Tax Proposals - Implications For Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2016/07/house-ways-and-means-committee-has-a-blueprint-for-tax-proposals-implications-for-agriculture.html

In Attempt To Deny Oil and Gas-Related Deductions, IRS Reads Language Into the Code That Isn’t There – Tax Court Not Biting

https://lawprofessors.typepad.com/agriculturallaw/2016/07/in-attempt-to-deny-oil-and-gas-related-deductions-irs-reads-language-into-the-code-that-isnt-there-tax-court-not-biti.html

IRS Does Double-Back Layout on Self-Employment Tax

https://lawprofessors.typepad.com/agriculturallaw/2016/08/irs-does-double-back-layout-on-self-employment-tax.html

S.E. Tax on Passive Investment Income; Election Out of Subchapter K Doesn’t Change Entity’s Nature; and IRS Can Change Its Mind

https://lawprofessors.typepad.com/agriculturallaw/2016/08/se-tax-on-passive-investment-income-election-out-of-subchapter-k-doesnt-change-entitys-nature-and-irs-can-change-it.html

Handling Depreciation on Asset Trades

https://lawprofessors.typepad.com/agriculturallaw/2016/08/handling-depreciation-on-asset-trades.html

Claiming “Bonus” Depreciation on Plants

https://lawprofessors.typepad.com/agriculturallaw/2016/08/claiming-bonus-depreciation-on-plants.html

Proper Reporting of Crop Insurance Proceeds

https://lawprofessors.typepad.com/agriculturallaw/2016/08/proper-reporting-of-crop-insurance-proceeds.html

Permanent Conservation Easement Donation Opportunities and Perils

https://lawprofessors.typepad.com/agriculturallaw/2016/09/permanent-conservation-easement-donation-opportunities-and-perils.html

Sales By Farmers/Rural Landowners Generate Common Questions

https://lawprofessors.typepad.com/agriculturallaw/2016/09/sales-by-farmersrural-landowners-generate-common-questions-.html

Expense Method Depreciation - Great Tax Planning Opportunities On Amended Returns

https://lawprofessors.typepad.com/agriculturallaw/2016/09/expense-method-depreciation-great-tax-planning-opportunities-on-amended-returns.html

The DPAD and Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2016/10/the-dpad-and-agriculture.html

Donating Food Inventory to a Qualified Charity - New Opportunity for Farmers

https://lawprofessors.typepad.com/agriculturallaw/2016/10/donating-food-inventory-to-a-qualified-charity-new-opportunity-for-farmers.html

Farm Valuation Issues

https://lawprofessors.typepad.com/agriculturallaw/2016/10/farm-valuation-issues.html

Treatment of Farming Casualty and Theft Losses

https://lawprofessors.typepad.com/agriculturallaw/2016/10/treatment-of-farming-casualty-and-theft-losses.html

More on Handling Farm Losses

https://lawprofessors.typepad.com/agriculturallaw/2016/11/more-on-handling-farm-losses.html

Selected Tax Issues For Rural Landowners Associated With Easement Payments

https://lawprofessors.typepad.com/agriculturallaw/2016/11/selected-tax-issues-for-rural-landowners-associated-with-easement-payments.html

Are You A Farmer? It Depends!

https://lawprofessors.typepad.com/agriculturallaw/2016/11/are-you-a-farmer-it-depends.html

Rents Are Passive, But They Can Be Recharacterized - And Grouped (Sometimes)

https://lawprofessors.typepad.com/agriculturallaw/2016/11/rents-are-passive-but-they-can-be-recharacterized-and-grouped-sometimes.html

It’s Fall and Time to “Hoop it Up”!

https://lawprofessors.typepad.com/agriculturallaw/2016/11/its-fall-and-time-to-hoop-it-up.html

Utilizing the Home Sale Exclusion When Selling the Farm

https://lawprofessors.typepad.com/agriculturallaw/2016/12/utilizing-the-home-sale-exclusion-when-selling-the-farm.html

Farmland Acquisition – Allocation of Value to Depreciable Items

https://lawprofessors.typepad.com/agriculturallaw/2016/12/farmland-acquisition-allocation-of-value-to-depreciable-items.html

Tribute To Orville Bloethe

https://lawprofessors.typepad.com/agriculturallaw/2016/12/tribute-to-orville-bloethe.html

IRS Continues (Unsuccessfully) Attack on Cash Accounting By Farmers

https://lawprofessors.typepad.com/agriculturallaw/2016/12/irs-continues-unsuccessfully-attack-on-cash-accounting-by-farmers.html

The Uniform Capitalization Rules and Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2016/12/the-uniform-capitalization-rules-and-agriculture.html

The Non-Corporate Lessor Rule – A Potential Trap In Expense Method Depreciation

https://lawprofessors.typepad.com/agriculturallaw/2016/12/the-non-corporate-lessor-rule-a-potential-trap-in-expense-method-depreciation.html

REAL PROPERTY

Texas Mineral Estates, Groundwater Rights, Surface Usage and the “Accommodation Doctrine”

https://lawprofessors.typepad.com/agriculturallaw/2016/08/texas-mineral-estates-groundwater-rights-surface-usage-and-the-accommodation-doctrine.html

So You Want To Buy Farmland? Things to Consider

https://lawprofessors.typepad.com/agriculturallaw/2016/09/so-you-want-to-buy-farmland-things-to-consider.html

What’s the Character of the Gain From the Sale of Farm or Ranch Land?

https://lawprofessors.typepad.com/agriculturallaw/2016/09/whats-the-character-of-the-gain-from-the-sale-of-farm-or-ranch-land.html

Utilizing the Home Sale Exclusion When Selling the Farm

https://lawprofessors.typepad.com/agriculturallaw/2016/12/utilizing-the-home-sale-exclusion-when-selling-the-farm.html

REGULATORY LAW

New Food Safety Rules Soon to Apply to Farmers and Others In the Food Production Chain

https://lawprofessors.typepad.com/agriculturallaw/2016/10/new-food-safety-rules-soon-to-apply-to-farmers-and-others-in-the-food-production-chain.html

New Regulations on Marketing of Livestock and Poultry

https://lawprofessors.typepad.com/agriculturallaw/2016/11/new-regulations-on-marketing-of-livestock-and-poultry.html

The Future of Ag Policy Under Trump

https://lawprofessors.typepad.com/agriculturallaw/2016/11/the-future-of-ag-policy-under-trump.html

Verifying Employment – New Form I-9; The Requirements and Potential Problem Areas

https://lawprofessors.typepad.com/agriculturallaw/2016/11/verifying-employment-new-form-i-9-the-requirements-and-potential-problem-areas.html

SECURED TRANSACTIONS

Feedlot Has Superior Rights to Cattle Sale Proceeds

https://lawprofessors.typepad.com/agriculturallaw/2016/08/feedlot-has-superior-rights-to-cattle-sale-proceeds.html

WATER LAW

Watercourses and Boundary Lines

https://lawprofessors.typepad.com/agriculturallaw/2016/11/watercourses-and-boundary-lines.html

April 19, 2021 in Business Planning, Civil Liabilities, Contracts, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Thursday, April 15, 2021

Regulation of Agriculture – Food Products, Slaughterhouse Line Speeds and CAFOs

Overview

Agriculture is one of the most heavily regulated industries in the United States.  Almost every activity of a farmer or rancher is somehow regulated by federal or state government.  For example, federal and state governments regulate the marketing and quality standards of various ag products; animal and plant health is regulated; farm programs are numerous and are often tied to crop insurance and/or soil conservation; water use is regulated; and ag products are subject to various export and import programs.  This just names a few ways that ag is regulated.  Such regulation can also lead a producer into tangled administrative battles with various regulatory agencies and which can end up in court.

In today’s post, I take a look at some recent examples of court cases involving the regulation of agriculture and food production.  It’s just a sample of what a farmer or rancher often encounters.

Recent cases involving the regulation of agriculture – it’s the topic of today’ post.

Background – The Government’s Regulatory Power Authority

Every level of government has certain basic powers. For example, the federal government's power includes the commerce power, exercise of eminent domain, the power to tax, and the power to spend.  The commerce power is the constitutionally-based power to regulate commerce between and among the states and with other countries and regulates goods and transactions “affecting” interstate commerce.  The power of eminent domain is the power to acquire property for the public good.  The power to tax is the power to generate revenue.  While the constitution limits the federal government's exercise of these powers, much of the regulation of agricultural activities occurs in accordance with the Congress' ability to regulate commerce among the states in accordance with the Commerce Clause of Article I, Section 8 of the Constitution.

State-level governmental power to regulate agricultural activities derives largely from the police power.  The states, in accordance with their police power, may regulate activities in order to promote the health, safety, and welfare of its citizens. The police power is limited only by the extent to which the regulations infringe upon constitutional guarantees, such as equal protection of the laws and by the limits on the “taking” of property value through the heavy hand of regulation.  In general, a state's exercise of its police power will only be found improper if it is utilized in an arbitrary, capricious, discriminatory or confiscatory manner or results in a “taking.”  But, of course, the power can be abused, as was evidenced clearly in some states during 2020. 

Thus, the extent and validity of much of federal regulation of agricultural activities is measured by the Commerce Clause while state regulation is made possible by the police power.

Recent Court Decisions

In recent weeks, the courts have decided numerous cases involving the regulation of food and agriculture concerning various matters.  The following is just a sampling of three cases:

Missouri Food Labeling Law Upheld

Turtle Islands Foods, SPC v. Thompson, No. 19-3154, 2021 U.S. App. LEXIS 9037 (8th Cir. Mar. 29, 2021)

 Missouri law (Mo. Rev. Stat. §265.494(7)) makes it a criminal offense to misrepresent a product as meat that is not derived from the harvested production of livestock or poultry. A violation of the law could result in up to a year in prison plus up to a $1,000 fine. The law is directed at businesses that sell “alternative” protein sources such as those that are plant-based or cell-cultured and market such products as a meat-based product. The plaintiff, a maker of a vegetarian turkey substitute, challenged the law as an unconstitutional violation of free speech, due process and the Dormant Commerce Clause. The plaintiff sought a preliminary injunction preventing the state from enforcing the law. The state submitted evidence showing how the plaintiff could comply with the law, noting that a label clearly stating that the product was “plant-based,” “veggie,” “lab grown,” or something similar.

The trial court denied the plaintiff’s request for an injunction on the basis that the law only barred a company from misleading consumers into believing that a product is meat from livestock when it is not. The trial court also determined that the plaintiff had failed to prove an irreparable injury by risk of prosecution because its packaging already contained the necessary disclaimers.

On further review, the appellate court affirmed. The appellate court noted that the plaintiff admitted that its products were labeled in such a way to clearly indicate that the products did not contain meat from slaughtered animals and denoted that they were plant-based, vegan or vegetarian. The appellate court noted that, on remand at the trial court, facts could be discovered that could possibly lead to a different result on appeal. 

USDA Rule Eliminating Line Speeds Vacated

United Food & Commercial Workers Union, Local No. 663 v. United States Department of Agriculture, No. 19-cv-2660, 2021 U.S. Dist. LEXIS 62656 (D. Minn. Mar. 31, 2021)

USDA inspectors, under the Federal Meat Inspection Act (FMIA), monitor port slaughter plants to ensure the safety and wholesomeness of pork products that are sold to the public. To ensure that post-mortem inspections are adequate, the Food Safety Inspection Service (FSIS) regulates the speed of evisceration lines. 9 C.F.R. §310.1(b)(3). In late 2019 the FSIS adopted as a final rule the New Swine Inspection System ("NSIS"), an optional program that implemented several reforms, including the elimination of evisceration line speed limits at pork processing plants. A labor union sued, claiming that the final rule was not properly promulgated under the Administrative Procedure Act (APA). When FSIS proposed the NSIS, it expressly identified worker safety as an important consideration and requested public comment on whether increasing line speeds would harm workers. The FSIS received many comments raising worker safety concerns before finalizing the optional rule. The court vacated the portion of the final rule pertaining to line speed limits concluding that the rule didn’t contain any discussion, analysis or evaluation of the submitted worker safety comments. The court reasoned that such failure violated the APA because worker safety was a key aspect of the rule. Thus, this part of the rule was remanded to the FSIS for review. The balance of the rule was not vacated and remains in effect. The court also stayed its order and entry of judgment for 90 days to give the FSIS time to address the issue. 

Zoning Ordinance Allows for CAFO

Chambers v. Delaware-Muncie Metropolitan Board of Zoning Appeals, 150 N.E.3d 603 (Ind. Ct. App. 2020)

The petitioners owned property located in an area that was zoned as “agricultural.” The petitioners sought and eventually obtained a permit from the county building commissioner to build several hog barns configured as a concentrated animal feeding operation (CAFO) on their property. Neighbors of the petitioners asked the zoning board to review the building commissioner’s decision to issue the permit. The zoning board voided the permit and determined that the farming zone did not recognize industrial agricultural uses, such as the petitioners’ proposed CAFO. The petitioners sought a review of the zoning board’s decision. The trial court noted that the zoning ordinance specifically permitted animal husbandry, as well as raising and selling hogs and the erection of barns and similar farming building. The trial court determined that the zoning ordinance clearly indicated that hog raising operations were a permitted use. The trial court noted that the county could have excluded CAFOs or put other restrictions in place to maintain more traditional farming operations. Additionally, the trial court noted that several CAFOs were located and permitted in other agricultural zones in the county. Thus, the trial court held that the zoning board’s decision was reversed and the building commissioner’s decision to issue the permit to the petitioners was reinstated. On appeal, the neighbors of the petitioners argued that the zoning ordinance was ambiguous because it did not mention CAFOs. The appellate court agreed with the trial court and noted that the zoning ordinance set no limit on the scale of permitted uses in the agricultural zone. The appellate court determined that the plain language of the zoning ordinance was not ambiguous, and the petitioners were permitted to raise any number of hogs, subject to state and federal limitations. 

Conclusion

The federal and state government regulation of agricultural activities seems to grow as the years go on.  The government becomes more and more entangled in the daily life of a farmer or rancher.  Do the benefits outweigh the costs?  Probably not?  Is there hope on the horizon for less governmental regulation?  That tide recently changed.  In any event the matter is just another reason that an experienced ag lawyer is needed more now than ever before.

April 15, 2021 in Regulatory Law | Permalink | Comments (0)

Saturday, April 10, 2021

Federal Farm Programs and the AGI Computation

Overview

Many farmers participate in federal farm programs and receive subsidies on a per-person basis.  There are limits to the amount of subsidies that can be received.  However, to be eligible to participate in most federal farm programs the applicant (individual or entity) must have an average adjusted gross income (AGI) of $900,000 or less. 

What is AGI for farm program eligibility purposes?  How is it computed?  Does it matter if the applicant is an individual or an entity? 

The computation of AGI for farm program eligibility purposes – it’s the topic of today’ post.

In General

A prerequisite to participating in many federal farm programs is annually certifying that average AGI doesn’t exceed a $900,000 threshold. The measuring period is the prior three years, skipping the immediately prior year.  The $900,000 limit applies to most USDA farm programs, but there are some exceptions – particularly those concerning conservation or disasters.  An applicant must provide the IRS with written consent to allow the USDA to verify AGI.  The consent (via USDA Form CCC-941) allows the IRS to verify to the FSA, based on a farm program applicant’s tax return information, whether (for most farm programs) the $900,000 limit is not exceeded.  The consent covers the three tax years that precede the immediately preceding tax year for which farm program benefits are being sought.  Thus, for 2021, the relevant tax years are 2019, 2018 and 2017.  For a farmer or a farming operation that has not been operating for the three-year period before the immediately preceding year, the FSA uses an average of income for the years of operation. FSA 5-PL, Para. 312, subparagraph F

Note:  Worksheets used in determining AGI calculations should be retained for at least three years.

Defining AGI – The FSA Way

As noted, average AGI is measured over the three taxable years preceding the most immediately preceding complete taxable year for which benefits are requested.  FSA 5-PL, Para. 293.  The FSA, in its 5-PL at Paragraph 296, subparagraph B, sets forth the following Table for guidance on AGI determinations using a producer/applicant’s data that has been reported to the IRS:

If determining AGI for….

Then see IRS Form….

AND use the amount entered on….

Corporations

1120 or 1120-S

Either of the following:

·       Line 30 (total taxable income) plus line 19 (charitable contributions)

·       For S corporations, use only Form 1120-S, line 21 (ordinary business income).

Estates or trusts

1041

Line 23 (taxable income) plus line 13 (charitable deductions)

LLCs, LLPs, LP or similar type organization taxed as partnership

1065

Line 22 (total income from trade or business) plus line 10 (guaranteed payments to partners).

Persons

1040

Line 8b (AGI)

Tax-exempt or charitable organizations

990-T

Line 31 (unrelated business taxable income) minus income that CCC determines to be from noncommercial activity.

For a sole proprietor filing a joint return, an exception exists from the need to report the full amount reported as AGI on the final IRS tax return for the applicable year.  Under the exception, a certification may be provided by a CPA or an attorney that specifies what the amounts would have been if separate tax returns would have been filed for the applicable year.  FSA 5-PL, Para. 296, subparagraph A. 

Schedule K Issues

IRS Form 1120-S and Form 1065 do not refer to income or deductions reported on Schedule K-1. A Schedule K-1 is the IRS Form that is used to report amounts that are passed through to each taxpayer that has an interest in a “flow-through” entity such as an S corporation, partnership, trust or an estate.  Consequently, any I.R.C. §179 deduction (i.e., expense method depreciation) would not be factored into the average AGI computation for a farming operation that is a flow-through entity seeking farm program benefits.  But it would be taken into account for a C corporation. Thus, a C corporation and an S corporation with identical taxable incomes may not be treated similarly for farm program eligibility purposes.  This is particularly true for an S corporation farming entity, for example, that has AGI over the $900,000 threshold without factoring in any I.R.C. §179 amount but is under the limitation when the I.R.C. §179 deduction is taken into account. 

Threatened with litigation on this disparate treatment, the FSA backed down and the 5-PL was later amended to reflect the rule change allowing the I.R.C. §179 deduction for flow-through entities as well as sole proprietorships and C corporations.  However, FSA still ignores other K-1 items in the computation of AGI for purposes of the $900,000 AGI computation.  At least this is the position of the national FSA.  There may be variations at the local and state level.  Consistent application of the regulations has never been a staple of the FSA. 

Certifying Income – Form CCC-941

A producer seeking farm program benefits, as noted above, must annually certify income to the FSA to ensure that the $900,000 threshold (in most instances) is not exceeded. The verification process starts with the FSA’s referral of the applicant’s AGI certification and written consent to the IRS to use the applicant’s tax information on file and disclose certain information to the FSA for AGI verification purposes.  FSA 5-PL, Para. 301, Subparagraph A.  Consent for disclosure of tax information is valid only if the IRS receives it within 120 calendar days of the date the Form CCC-941 was signed.  FSA 5-PL, Para. 301, Subparagraph E. 

If an attorney or CPA statement is provided, both the statement and the completed Form CCC-941 must be submitted to the local FSA office before the Form CCC-941 is considered to be complete and AGI is updated in the producer’s file.  The submitted Form CCC-941 is then sent to the IRS and the statement of the attorney/CPA is attached to a copy of the Form that FSA retains.  FSA 5-PL, Para. 302, Subparagraph A.

Form CCC-941 is required to determine payment eligibility for all persons; legal entities; interest holders in a legal entity, including embedded entities to the fourth level of ownership interest, regardless of the level of interest held; and, members of a general partnership or joint venture, regardless of the number of members.  FSA 5-PL, Par. 294.  It is submitted under the same name and TIN as is used for tax filing purposes.  For example, for farm assets and land that have been transferred to a revocable trust, the identification on Form CCC-941 is the grantor’s name and Social Security number.

If Form CCC-941 is not filed for a program year, the producer is not eligible for farm program payments for that year.  Any program payments erroneously paid will have to be returned, with interest. 

Note:  Technically, the FSA rules state that to comply with the AGI requirement for the applicable crop, program or fiscal year, a person or legal entity must provide either a completed Form CCC-941 for that year or a statement from a CPA or attorney that the average AGI does not exceed the applicable limitation.  But, in all cases, the portions of Form CCC-941 pertaining to consent of disclosure of tax information must be completed and signed by the person (or entity) subject to AGI compliance.  FSA 5-PL, Par. 294, subparagraph B.

The form must be personally signed by the applicant – either in their own name or, if the application is on behalf of an entity, by the designated officer(s).  If the applicant is a minor, the Form can be signed by a parent or guardian.  One spouse cannot sign for the other spouse, however, absent a duly executed power-of-attorney (POA).  Likewise, neither IRS Form 2848 nor an FSA POA (Form 211) is acceptable.  FSA 5-PL, Para. 302, Subparagraph C. 

Note:  A Table contained in the FSA 5-PL, Amendment 4, page 6-34 at Para. 302, subparagraph C, sets forth the signature authority for Form CCC-941. 

If the applicant is a grantor trust, the Form must denote the grantor’s name.  For a deceased person, Form CCC-941 may be filed by the surviving spouse, an authorized representative or an entity that is responsible for filing the final Federal income tax return for the decedent.  FSA 5-PL, Para. 302, subparagraph D.  If filing is by an authorized representative, proof of such authorization must be provided by attachment to Form CCC-941. 

If a Form CCC-941, as submitted to the IRS, is incomplete or illegible it will be returned to the FSA along with IRS Notice 1398 containing the reason(s) for the rejection.  FSA 5-PL, Para. 301, Subparagraph H.  The FSA will then contact the person or entity that submitted the Form and explain the reason(s) for the rejection as well as provide assistance to get the Form corrected.  Id., Subparagraph H. 

Form CCC-941 authorizes the FSA to obtain AGI data from the IRS.  When the IRS receives the Form, it matches the identity of the name on the Form with the tax records associated with the name.  The IRS then calculates AGI according to the FSA’s definition of the term and reports to the FSA whether the applicant is within the $900,000 threshold.  If the IRS reports to the FSA that a producer is over the AGI limit, FSA then sends the producer a letter informing them that they have 30 days to provide a third-party verification by a CPA or an attorney that the producer’s average AGI is within the threshold along with associated tax records. If an entity is the farmer, this letter will be required for both the entity and the individual. If, upon review, the FSA still deems the producer to not be eligible for benefits, the producer may file an administrative appeal within 30 days of the determination.

Note:   It’s important for a producer/applicant to respond to the FSA within the 30-day timeframe so as to preserver administrative appeal rights.  However, the FSA 5-PL does state that appeal rights exist even if requested information is not timely provided.  FSA 5-PL, Para. 297, Subparagraph E.

The failure to provide the FSA with correct and accurate information to establish AGI compliance can result in ineligibility for all program payments and benefits that are subject to the AGI limitation for the applicable years.  In addition, the producer/entity will have to refund any benefits already paid due to the incorrect information and face possible civil or criminal prosecution.  FSA 5-PL, Para. 297, Subparagraph D.

A person or entity that lacks tax records or is not required to file tax returns may document AGI by providing to FSA annual budgets and a statement of operations; annual public financial disclosures; financial statements; or any other documentation as FSA deems acceptable. 

Note:  Some farmers have expressed concern about the information the IRS shares with the FSA.  However, the IRS does not report the applicant’s income, AGI (or average AGI), or any determination on the applicant’s eligibility or ineligibility for farm program payments.  The IRS merely computes AGI according to the FSA approach and reports to the FSA whether the producer/applicant is over or under the applicable threshold.  FSA 5-PL, Para. 303, subparagraph B.  FSA maintains the information that the IRS provides to it in a secure database, and the information  is not subject to a Freedom of Information Act request.  Id., subparagraph C. 

Exception for Exceeding the AGI Threshold

The 75 percent test.  There are some farm programs for which the $900,000 AGI limit does not apply if at least 75 percent of AGI is derived from farming, ranching or forestry activities.  For this purpose, “farm AGI” is comparable to net income from farming and may be identical to net farm profit (or loss) on Schedule F.  The FSA definition of “farm AGI” also includes income from the sale of farmland, breeding livestock and ag conservation easements, for example.  However, the term does not include income derived from the sale of farm equipment as well as income derived from the sale of production inputs and services.  However, if at least two-thirds of total AGI from all sources is from farming, the income from the sale of farm equipment and production inputs and services counts as farm AGI.  FSA 5-PL, Para. 312, subparagraph F.    

In recent years, the market facilitation program (MFP) and the Coronavirus Food Assistance Program (CFAP) are examples of farm programs that don’t subject the applicant to a $900,000 AGI limitation.  A producer applying for benefits from such a program must certify that the 75 percent test is satisfied.  For this purpose, the FSA might require the producer to sign Form CCC-942.  Alternatively, a letter from the producer’s professional tax preparer (an attorney of a CPA) can suffice.  For entities that are applying for benefits, a certification letter is required for the entity and for the individual producer. 

Note:  The FSA cannot send certifications with respect to the 75 percent farm AGI test to the IRS for verification.

For purposes of the 75 percent test, the FSA, in a Table in the FSA 5-PL, Amendment 6, Para. 312, subparagraph B, defines income from farming, ranching and forestry.  The Table illustrates that the term is defined broadly.  

Wages paid by a farm employer do not constitute farm income.  Thus, if an applicant’s only income is from wages earned via employment with, for example, a farming C corporation, the wages do not count as farm income for purposes of the 75 percent test.  But, of course, this is only an issue if the producer/applicant’s income is over the $900,000 threshold. 

The FSA regulations and associated guidance do not address whether income from a farmer’s foreign sales that are funneled through an IC-DISC counts as farm income for purposes of the 75 percent test.  An IC-DISC allows a farmer that will be selling into an export market to essentially transfer income from the farmer to the tax-exempt IC-DISC via an export sales commission.  An IC-DISC can be formed and utilized by any taxpayer that manufactures, produces, grows or extracts (MPGE) property in the U.S. that is held primarily for sale, lease or rental in the ordinary course of the taxpayer’s trade or business.  That definition certainly includes farmers.  The property to be exported is transferred to the IC-DISC which then sells the assets into an export market.  While there is no “official” guidance on the issue, it would seem reasonable that such income counts as farm income. 

Conclusion

Farmers participating in federal farm programs are subject to many detailed rules.  In recent years, such payments have made up a substantial portion of total farm income.  That makes compliance with the rules and staying within the average AGI limit critical. 

April 10, 2021 in Income Tax, Regulatory Law | Permalink | Comments (0)

Friday, April 2, 2021

Ag Law and Taxation - 2017 Bibliography

Overview

Today's post is a bibliography of my ag law and tax blog articles of 2017.  This will make it easier to find the articles you are looking for in your research.  In late January I posted the 2020 bibliography of articles.  In late February I posted the bibliography of the 2019 articles.  Last month, I posted the 2018 bibliography of articles.  Today’s posting is the bibliography of my 2017 articles.  Later this month I will post the 2016 bibliography. 

The library of content continues to grow with relevant information for you practice or your farming/ranching business.

The 2017 bibliography of articles – it’s the subject matter of today’s post.

BANKRUPTCY

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html  

Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

Top Ten Agricultural Law Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-developments-of-2016-five-through-one.html

Farm Financial Stress – Debt Restructuring

https://lawprofessors.typepad.com/agriculturallaw/2017/01/farm-financial-stress-debt-restructuring.html

Qualified Farm Indebtedness – A Special Rule for Income Exclusion of Forgiven Debt

https://lawprofessors.typepad.com/agriculturallaw/2017/03/qualified-farm-indebtedness-a-special-rule-for-income-exclusion-of-forgiven-debt.html

What Are a Farmer’s Rights When a Grain Elevator Fails?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/what-are-a-farmers-rights-when-a-grain-elevator-fails.html

Agricultural Law in a Nutshell

https://lawprofessors.typepad.com/agriculturallaw/2017/07/agricultural-law-in-a-nutshell.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Tough Financial Times in Agriculture and Lending Clauses – Peril for the Unwary

https://lawprofessors.typepad.com/agriculturallaw/2017/10/tough-financial-times-in-agriculture-and-lending-clauses-peril-for-the-unwary.html

What Interest Rate Applies to a Secured Creditor’s Claim in a Reorganization Bankruptcy?

https://lawprofessors.typepad.com/agriculturallaw/2017/11/what-interest-rate-applies-to-a-secured-creditors-claim-in-a-reorganization-bankruptcy.html

PACA Trust Does Not Prevent Chapter 11 DIP’s Use of Cash Collateral

https://lawprofessors.typepad.com/agriculturallaw/2017/11/paca-trust-does-not-prevent-chapter-11-dips-use-of-cash-collateral.html

Are Taxes Dischargeable in Bankruptcy?

https://lawprofessors.typepad.com/agriculturallaw/2017/12/are-taxes-dischargeable-in-bankruptcy.html

Christmas Shopping Season Curtailed? – Bankruptcy Venue Shopping, That Is!

https://lawprofessors.typepad.com/agriculturallaw/2017/12/christmas-shopping-season-curtailed-bankruptcy-venue-shopping-that-is.html

BUSINESS PLANNING

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html

Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

Top Ten Agricultural Law Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-developments-of-2016-five-through-one.html

C Corporation Penalty Taxes – Time to Dust-Off and Review?

https://lawprofessors.typepad.com/agriculturallaw/2017/01/c-corporation-penalty-taxes-time-to-dust-off-and-review.html

Divisive Reorganizations of Farming and Ranching Corporations

https://lawprofessors.typepad.com/agriculturallaw/2017/01/divisive-reorganizations-of-farming-and-ranching-corporations.html

The Scope and Effect of the “Small Partnership Exception”

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-scope-and-effect-of-the-small-partnership-exception.html

Using the Right Kind of an Entity to Reduce Self-Employment Tax

https://lawprofessors.typepad.com/agriculturallaw/2017/04/using-the-right-kind-of-an-entity-to-reduce-self-employment-tax.html

Employer-Provided Meals and Lodging

https://lawprofessors.typepad.com/agriculturallaw/2017/05/employer-provided-meals-and-lodging.html

Self-Employment Tax on Farming Activity of Trusts

https://lawprofessors.typepad.com/agriculturallaw/2017/05/self-employment-tax-on-farming-activity-of-trusts.html

Minority Shareholder Oppression Case Raises Several Tax Questions

https://lawprofessors.typepad.com/agriculturallaw/2017/05/minority-shareholder-oppression-case-raises-several-tax-questions.html

Farm Program Payment Limitations and Entity Planning – Part One

https://lawprofessors.typepad.com/agriculturallaw/2017/06/farm-program-payment-limitations-and-entity-planning-part-one.html

Farm Program Payment Limitations and Entity Planning – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2017/06/farm-program-payment-limitations-and-entity-planning-part-two.html

Summer Ag Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2017/06/summer-ag-taxestate-and-business-planning-conference.html

An Installment Sale as Part of an Estate Plan

https://lawprofessors.typepad.com/agriculturallaw/2017/07/an-installment-sale-as-part-of-an-estate-plan.html

The Use of a Buy-Sell Agreement for Transitioning a Business

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-use-of-a-buy-sell-agreement-for-transitioning-a-business.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Forming a Farming/Ranching Corporation Tax-Free

https://lawprofessors.typepad.com/agriculturallaw/2017/08/forming-a-farmingranching-corporation-tax-free.html

Farmers Renting Equipment – Does it Trigger A Self-Employment Tax Liability?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/farmers-renting-equipment-does-it-trigger-a-self-employment-tax-liability.html

New Partnership Audit Rules

https://lawprofessors.typepad.com/agriculturallaw/2017/09/new-partnership-audit-rules.html

Self-Employment Tax on Farm Rental Income – Is the Mizell Veneer Cracking?

https://lawprofessors.typepad.com/agriculturallaw/2017/09/self-employment-tax-on-farm-rental-income-is-the-mizell-veneer-cracking.html

IRS To Finalize Regulations on Tax Status of LLC and LLP Members?

https://lawprofessors.typepad.com/agriculturallaw/2017/10/irs-to-finalize-regulations-on-tax-status-of-llc-and-llp-members.html

H.R. 1 – Farmers, Self-Employment Tax and Business Arrangement Structures

https://lawprofessors.typepad.com/agriculturallaw/2017/11/hr-1-farmers-self-employment-tax-and-business-arrangement-structures.html

Summer 2018 – Farm Tax and Farm Business Education

https://lawprofessors.typepad.com/agriculturallaw/2017/11/summer-2018-farm-tax-and-farm-business-education.html

Partnerships and Tax Law – Details Matter

https://lawprofessors.typepad.com/agriculturallaw/2017/11/partnership-and-tax-law-details-matter.html   

CIVIL LIABILITIES

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html

Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

Top Ten Agricultural Law and Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-developments-of-2016-five-through-one.html

Recreational Use Statutes – What is Covered?

https://lawprofessors.typepad.com/agriculturallaw/2017/02/recreational-use-statutes-what-is-covered.html

Is Aesthetic Damage Enough to Make Out a Nuisance Claim?

https://lawprofessors.typepad.com/agriculturallaw/2017/04/is-aesthetic-damage-enough-to-make-out-a-nuisance-claim.html

Liability Associated with a Range of Fires and Controlled Burns

https://lawprofessors.typepad.com/agriculturallaw/2017/04/liability-associated-with-a-range-fires-and-controlled-burns.html

What’s My Liability for Spread of Animal Disease

https://lawprofessors.typepad.com/agriculturallaw/2017/06/whats-my-liability-for-spread-of-animal-disease.html

Dicamba Spray-Drift Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/07/dicamba-spray-drift-issues.html

Agricultural Law in a Nutshell

https://lawprofessors.typepad.com/agriculturallaw/2017/07/agricultural-law-in-a-nutshell.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Right-to-Farm Laws

            https://lawprofessors.typepad.com/agriculturallaw/2017/09/right-to-farm-laws.html

CONTRACTS

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html

Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

Top Ten Agricultural Law Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-developments-of-2016-five-through-one.html

Another Issue With Producing Livestock on Contract – Insurance

https://lawprofessors.typepad.com/agriculturallaw/2017/01/another-issue-with-producing-livestock-on-contract-insurance.html

The Ability of Tenants-in-Common To Bind Co-Tenants to a Farm Lease – and Related Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-ability-of-tenants-in-common-to-bind-co-tenants-to-a-farm-lease-and-related-issues.html

Ag Goods Sold at Auction – When is a Contract Formed?

https://lawprofessors.typepad.com/agriculturallaw/2017/05/ag-goods-sold-at-auction-when-is-a-contract-formed.html

Agricultural Law in a Nutshell

https://lawprofessors.typepad.com/agriculturallaw/2017/07/agricultural-law-in-a-nutshell.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Ag Contracts and Express Warranties

https://lawprofessors.typepad.com/agriculturallaw/2017/09/ag-contracts-and-express-warranties.html

What Remedies Does a Buyer Have When a Seller of Ag Goods Breaches the Contract?           

https://lawprofessors.typepad.com/agriculturallaw/2017/10/what-remedies-does-a-buyer-have-when-a-seller-of-ag-goods-breaches-the-contract.html  

COOPERATIVES

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html

Top Ten Agricultural Law Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

What Is a Cooperative Director’s Liability to Member-Shareholders and Others?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/what-is-a-cooperative-directors-liability-to-member-shareholders-and-others.html

CRIMINAL LIABILITIES

The Necessity Defense to Criminal Liability

https://lawprofessors.typepad.com/agriculturallaw/2017/05/the-necessity-defense-to-criminal-liability.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

What Problems Does The Migratory Bird Treaty Act Pose For Farmers, Ranchers and Rural Landowners?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/what-problems-does-the-migratory-bird-treaty-act-pose-for-farmers-ranchers-and-rural-landowners.html

ENVIRONMENTAL LAW

Drainage Activities on Farmland and the USDA

https://lawprofessors.typepad.com/agriculturallaw/2017/03/drainage-activities-on-farmland-and-the-usda.html

The Application of the Endangered Species Act to Activities on Private Land

https://lawprofessors.typepad.com/agriculturallaw/2017/04/the-application-of-the-endangered-species-act-to-activities-on-private-land.html

Eminent Domain – The Government’s Power to “Take” Private Property

https://lawprofessors.typepad.com/agriculturallaw/2017/06/eminent-domain-the-governments-power-to-take-private-property.html

Spray Drift As Hazardous Waste?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/spray-drift-as-hazardous-waste.html

What Problems Does The Migratory Bird Treaty Act Pose For Farmers, Ranchers and Rural Landowners?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/what-problems-does-the-migratory-bird-treaty-act-pose-for-farmers-ranchers-and-rural-landowners.html

The Prior Converted Cropland Exception From Clean Water Act Jurisdiction

https://lawprofessors.typepad.com/agriculturallaw/2017/09/the-prior-converted-cropland-exception-from-clean-water-act-jurisdiction.html

Air Emission Reporting Requirement For Livestock Operations

https://lawprofessors.typepad.com/agriculturallaw/2017/11/air-emission-reporting-requirement-for-livestock-operations.html

ESTATE PLANNING

Rights of Refusal and the Rule Against Perpetuities

https://lawprofessors.typepad.com/agriculturallaw/2017/01/rights-of-refusal-and-the-rule-against-perpetuities.html

Some Thoughts On Long-Term Care Insurance

https://lawprofessors.typepad.com/agriculturallaw/2017/02/some-thoughts-on-long-term-care-insurance.html

Overview of Gifting Rules and Strategies                                                                 

https://lawprofessors.typepad.com/agriculturallaw/2017/04/overview-of-gifting-rules-and-strategies.html

Disinheriting a Spouse – Can It Be Done?

https://lawprofessors.typepad.com/agriculturallaw/2017/04/disinheriting-a-spouse-can-it-be-done.html

Specific Property Devised in Will (or Trust) That Doesn’t Exist At Death – What Happens?

https://lawprofessors.typepad.com/agriculturallaw/2017/05/specific-property-devised-in-will-that-doesnt-exist-at-death-what-happens.html

Discounting IRAs for Income Tax Liability?

https://lawprofessors.typepad.com/agriculturallaw/2017/05/discounting-iras-for-income-tax-liability.html

Special Use Valuation and Cash Leasing

https://lawprofessors.typepad.com/agriculturallaw/2017/05/special-use-valuation-and-cash-leasing.html

Self-Employment Tax On Farming Activity Of Trusts

https://lawprofessors.typepad.com/agriculturallaw/2017/05/self-employment-tax-on-farming-activity-of-trusts.html

Would an Interest Charge Domestic International Sales Corporation Benefit a Farming Business?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/would-an-interest-charge-domestic-international-sales-corporation-benefit-a-farming-business.html

An Installment Sale as Part of An Estate Plan

https://lawprofessors.typepad.com/agriculturallaw/2017/07/an-installment-sale-as-part-of-an-estate-plan.html

Using An IDGT For Wealth Transfer and Business Succession

https://lawprofessors.typepad.com/agriculturallaw/2017/07/using-an-idgt-for-wealth-transfer-and-business-succession.html

Federal Tax Claims in Decedent’s Estates – What’s the Liability and Priority?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/federal-tax-claims-in-decedents-estates-whats-the-liability-and-priority.html

Estate Tax Portability – The Authority of the IRS To Audit

https://lawprofessors.typepad.com/agriculturallaw/2017/10/estate-tax-portability-the-authority-of-the-irs-to-audit.html

Digital Assets and Estate Planning       

https://lawprofessors.typepad.com/agriculturallaw/2017/10/digital-assets-and-estate-planning.html

INCOME TAX

The Burden of Proof in Tax Cases – What are the Rules?

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-burden-of-proof-in-tax-cases-what-are-the-rules.html

The Home Office Deduction

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-home-office-deduction.html

IRS To Continue Attacking Cash Method For Farmers Via the “Farming Syndicate Rule”

https://lawprofessors.typepad.com/agriculturallaw/2017/02/irs-to-continue-attacking-cash-method-for-farmers-via-the-farming-syndicate-rule.html

Using Schedule J As A Planning Tool For Clients With Farm Income

https://lawprofessors.typepad.com/agriculturallaw/2017/03/using-schedule-j-as-a-planning-tool-for-clients-with-farm-income.html

Deductibility of Soil and Water Conservation Expenses

https://lawprofessors.typepad.com/agriculturallaw/2017/03/deductibility-of-soil-and-water-conservation-expenses.html

Should Purchased Livestock Be Depreciated or Inventoried?

https://lawprofessors.typepad.com/agriculturallaw/2017/03/should-purchased-livestock-be-depreciated-or-inventoried.html

The Changing Structure of Agricultural Production and…the IRS

https://lawprofessors.typepad.com/agriculturallaw/2017/03/the-changing-structure-of-agricultural-production-andthe-irs.html

Farm-Related Casualty Losses and Involuntary Conversions – Helpful Tax Rules in Times of Distress

https://lawprofessors.typepad.com/agriculturallaw/2017/03/farm-related-casualty-losses-and-involuntary-conversions-helpful-tax-rules-in-times-of-distress.html

Charitable Contributions Via Trust

https://lawprofessors.typepad.com/agriculturallaw/2017/03/charitable-contributions-via-trust.html

Ag Tax Policy The Focus in D.C.

https://lawprofessors.typepad.com/agriculturallaw/2017/04/ag-tax-policy-the-focus-in-dc-.html

For Depreciation Purposes, What Does Placed in Service Mean?

https://lawprofessors.typepad.com/agriculturallaw/2017/04/for-depreciation-purposes-what-does-placed-in-service-mean.html

Tax Treatment of Commodity Futures and Options

https://lawprofessors.typepad.com/agriculturallaw/2017/04/tax-treatment-of-commodity-futures-and-options.html

Discounting IRAs for Income Tax Liability?

https://lawprofessors.typepad.com/agriculturallaw/2017/05/discounting-iras-for-income-tax-liability.html

Like-Kind Exchanges, Reverse Exchanges, and the Safe Harbor

https://lawprofessors.typepad.com/agriculturallaw/2017/05/like-kind-exchanges-reverse-exchanges-and-the-safe-harbor.html

Insights Into Handling IRS Disputes

https://lawprofessors.typepad.com/agriculturallaw/2017/05/insights-into-handling-irs-disputes.html

Employer-Provided Meals and Lodging

https://lawprofessors.typepad.com/agriculturallaw/2017/05/employer-provided-meals-and-lodging.html

Self-Employment Tax On Farming Activity Of Trusts

https://lawprofessors.typepad.com/agriculturallaw/2017/05/self-employment-tax-on-farming-activity-of-trusts.html

Minority Shareholder Oppression Case Raises Several Tax Questions

https://lawprofessors.typepad.com/agriculturallaw/2017/05/minority-shareholder-oppression-case-raises-several-tax-questions.html

Input Costs – When Can a Deduction Be Claimed?

https://lawprofessors.typepad.com/agriculturallaw/2017/06/input-costs-when-can-a-deduction-be-claimed.html

Like-Kind Exchange Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/06/like-kind-exchange-issues.html

Tax Issues With Bad Debt Deductions

https://lawprofessors.typepad.com/agriculturallaw/2017/06/tax-issues-with-bad-debt-deductions.html

Like-Kind Exchanges – The Related Party Rule and a Planning Opportunity

https://lawprofessors.typepad.com/agriculturallaw/2017/06/like-kind-exchanges-the-related-party-rule-and-a-planning-opportunity.html

Tax Treatment of Cooperative Value-Added Payments

https://lawprofessors.typepad.com/agriculturallaw/2017/06/tax-treatment-of-cooperative-value-added-payments.html

Would an Interest Charge Domestic International Sales Corporation Benefit a Farming Business?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/would-an-interest-charge-domestic-international-sales-corporation-benefit-a-farming-business.html

Timber Tax Issues – Part One

https://lawprofessors.typepad.com/agriculturallaw/2017/07/timber-tax-issues-part-one.html

Timber Tax Issues – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2017/07/timber-tax-issues-part-two.html

An Installment Sale as Part of An Estate Plan

https://lawprofessors.typepad.com/agriculturallaw/2017/07/an-installment-sale-as-part-of-an-estate-plan.html

Using An IDGT For Wealth Transfer and Business Succession

https://lawprofessors.typepad.com/agriculturallaw/2017/07/using-an-idgt-for-wealth-transfer-and-business-succession.html

Prospects for Tax Legislation

https://lawprofessors.typepad.com/agriculturallaw/2017/08/prospects-for-tax-legislation.html

Deferred Payment Contracts

https://lawprofessors.typepad.com/agriculturallaw/2017/08/deferred-payment-contracts.html

When Is A Farmer Not A “Qualified Farmer” For Conservation Easement Donation Purposes?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/when-is-a-farmer-not-a-qualified-farmer-for-conservation-easement-donation-purposes.html

Substantiating Charitable Contributions

https://lawprofessors.typepad.com/agriculturallaw/2017/08/substantiating-charitable-contributions.html

Forming a Farming/Ranching Corporation Tax-Free

https://lawprofessors.typepad.com/agriculturallaw/2017/08/forming-a-farmingranching-corporation-tax-free.html

Farmers Renting Equipment – Does It Trigger A Self-Employment Tax Liability?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/farmers-renting-equipment-does-it-trigger-a-self-employment-tax-liability.html

Commodity Credit Corporation Loans and Elections

https://lawprofessors.typepad.com/agriculturallaw/2017/09/commodity-credit-corporation-loans-and-elections.html

New Partnership Audit Rules

https://lawprofessors.typepad.com/agriculturallaw/2017/09/new-partnership-audit-rules.html

Alternatives to Like-Kind Exchanges of Farmland

https://lawprofessors.typepad.com/agriculturallaw/2017/09/alternatives-to-like-kind-exchanges-of-farmland.html

South Dakota Attempts To Change Internet Sales Taxation – What Might Be The Impact On Small Businesses?

https://lawprofessors.typepad.com/agriculturallaw/2017/09/south-dakota-attempts-to-change-internet-sales-taxation-what-might-be-the-impact-on-small-businesses.html

Fall Tax Schools

https://lawprofessors.typepad.com/agriculturallaw/2017/09/fall-tax-schools.html

Self-Employment Tax on Farm Rental Income – Is the Mizell Veneer Cracking?

https://lawprofessors.typepad.com/agriculturallaw/2017/09/self-employment-tax-on-farm-rental-income-is-the-mizell-veneer-cracking.html

Tax Treatment of Settlements and Court Judgments

https://lawprofessors.typepad.com/agriculturallaw/2017/10/tax-treatment-of-settlements-and-court-judgments.html

The “Perpetuity” Requirement For Donated Easements

https://lawprofessors.typepad.com/agriculturallaw/2017/10/the-perpetuity-requirement-for-donated-easements.html

The Tax Rules Involving Prepaid Farm Expenses

https://lawprofessors.typepad.com/agriculturallaw/2017/10/the-tax-rules-involving-prepaid-farm-expenses.html

It’s Just About Tax School Time

https://lawprofessors.typepad.com/agriculturallaw/2017/10/its-just-about-tax-school-time.html

IRS To Finalize Regulations On Tax Status of LLC and LLP Members?

https://lawprofessors.typepad.com/agriculturallaw/2017/10/irs-to-finalize-regulations-on-tax-status-of-llc-and-llp-members.html

The Deductibility (Or Non-Deductibility) of Interest

https://lawprofessors.typepad.com/agriculturallaw/2017/10/the-deductibility-or-non-deductibility-of-interest.html

H.R. 1 - Farmers, Self-Employment Tax and Business Arrangement Structures

https://lawprofessors.typepad.com/agriculturallaw/2017/11/hr-1-farmers-self-employment-tax-and-business-arrangement-structures.html

The Broad Reach of the Wash-Sale Rule

https://lawprofessors.typepad.com/agriculturallaw/2017/11/the-broad-reach-of-the-wash-sale-rule.html

Comparison of the House and Senate Tax Bills – Implications for Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2017/11/comparison-of-the-house-and-senate-tax-bills-implications-for-agriculture.html

Partnerships and Tax Law – Details Matter

https://lawprofessors.typepad.com/agriculturallaw/2017/11/partnership-and-tax-law-details-matter.html

Senate Clears Tax Bill - On To Conference

https://lawprofessors.typepad.com/agriculturallaw/2017/12/senate-clears-tax-bill-on-to-conference-committee.html

Are Taxes Dischargeable in Bankruptcy?

https://lawprofessors.typepad.com/agriculturallaw/2017/12/are-taxes-dischargeable-in-bankruptcy.html

Bitcoin Fever and the Tax Man

https://lawprofessors.typepad.com/agriculturallaw/2017/12/bitcoin-fever-and-the-tax-man.html

House and Senate to Vote on Conference Tax Bill This Week

https://lawprofessors.typepad.com/agriculturallaw/2017/12/house-and-senate-to-vote-on-conference-tax-bill-this-week.html

Another Tax Bill Introduced, Year-End Planning, and Jan. 10 Seminar/Webinar

https://lawprofessors.typepad.com/agriculturallaw/2017/12/another-tax-bill-introduced-year-end-planning-and-jan-10-seminarwebinar.html

PUBLICATIONS

Agricultural Law in a Nutshell

https://lawprofessors.typepad.com/agriculturallaw/2017/07/agricultural-law-in-a-nutshell.html

REAL PROPERTY

Another Issue When the Definition of “Agriculture” Matters – Property Tax

https://lawprofessors.typepad.com/agriculturallaw/2017/01/another-issue-when-the-definition-of-agriculture-matters-property-tax.html

The Ability of Tenants-in-Common To Bind Co-Tenants to a Farm Lease – and Related Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-ability-of-tenants-in-common-to-bind-co-tenants-to-a-farm-lease-and-related-issues.html

Like-Kind Exchanges, Reverse Exchanges, and the Safe Harbor

https://lawprofessors.typepad.com/agriculturallaw/2017/05/like-kind-exchanges-reverse-exchanges-and-the-safe-harbor.html

Like-Kind Exchange Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/06/like-kind-exchange-issues.html

Easements on Agricultural Land – Classification and Legal Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/08/easements-on-agricultural-land-classification-and-legal-issues.html

Should I Enter Into An Oil and Gas Lease?

https://lawprofessors.typepad.com/agriculturallaw/2017/12/should-i-enter-into-an-oil-and-gas-lease.html

REGULATORY LAW

Checkoffs, The Courts and Free Speech

https://lawprofessors.typepad.com/agriculturallaw/2017/01/checkoffs-the-courts-and-free-speech.html

Joint Employment Situations In Agriculture – What’s the FLSA Test?

https://lawprofessors.typepad.com/agriculturallaw/2017/02/joint-employment-situations-in-agriculture-whats-the-flsa-test.html

Farmers, Ranchers and Government Administrative Agencies

https://lawprofessors.typepad.com/agriculturallaw/2017/03/farmers-ranchers-and-government-administrative-agencies.html

IRS To Target “Hobby” Farmers

https://lawprofessors.typepad.com/agriculturallaw/2017/03/irs-to-target-hobby-farmers.html

Drainage Activities on Farmland and the USDA

https://lawprofessors.typepad.com/agriculturallaw/2017/03/drainage-activities-on-farmland-and-the-usda.html

What is a “Separate Person” For Payment Limitation Purposes?

https://lawprofessors.typepad.com/agriculturallaw/2017/03/what-is-a-separate-person-for-payment-limitation-purposes.html

Livestock Indemnity Payments – What They Are and Tax Reporting Options

https://lawprofessors.typepad.com/agriculturallaw/2017/03/livestock-indemnity-payments-what-they-are-and-tax-reporting-options.html

Can One State Regulate Agricultural Production Activities in Other States?

https://lawprofessors.typepad.com/agriculturallaw/2017/06/can-one-state-regulate-agricultural-production-activities-in-other-states.html

Farm Program Payment Limitations and Entity Planning – Part One

https://lawprofessors.typepad.com/agriculturallaw/2017/06/farm-program-payment-limitations-and-entity-planning-part-one.html

Farm Program Payment Limitations and Entity Planning – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2017/06/farm-program-payment-limitations-and-entity-planning-part-two.html

Eminent Domain – The Government’s Power to “Take” Private Property

https://lawprofessors.typepad.com/agriculturallaw/2017/06/eminent-domain-the-governments-power-to-take-private-property.html

Department of Labor Overtime Rules Struck Down – What’s the Impact on Ag?

https://lawprofessors.typepad.com/agriculturallaw/2017/09/department-of-labor-overtime-rules-struck-down-whats-the-impact-on-ag.html

The Prior Converted Cropland Exception From Clean Water Act Jurisdiction

https://lawprofessors.typepad.com/agriculturallaw/2017/09/the-prior-converted-cropland-exception-from-clean-water-act-jurisdiction.html

Air Emission Reporting Requirement For Livestock Operations

https://lawprofessors.typepad.com/agriculturallaw/2017/11/air-emission-reporting-requirement-for-livestock-operations.html

Federal Labor Law and Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2017/11/federal-labor-law-and-agriculture.html

 Electronic Logs For Truckers and Implications for Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2017/12/electronic-logs-for-truckers-and-implications-for-agriculture.html

SECURED TRANSACTIONS

Ag Supply Dealer Liens – Important Tool in Tough Financial Times

https://lawprofessors.typepad.com/agriculturallaw/2017/01/ag-supply-dealer-liens-important-tool-in-tough-financial-times.html

“Commercial Reasonableness” of Collateral Sales

https://lawprofessors.typepad.com/agriculturallaw/2017/07/commercial-reasonableness-of-collateral-sales.html

What Are A Farmer’s Rights When a Grain Elevator Fails?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/what-are-a-farmers-rights-when-a-grain-elevator-fails.html

Selling Collateralized Ag Products – The “Farm Products” Rule

https://lawprofessors.typepad.com/agriculturallaw/2017/09/selling-collateralized-ag-products-the-farm-products-rule.html

SEMINARS AND CONFERENCES

Fall Tax Schools

https://lawprofessors.typepad.com/agriculturallaw/2017/09/fall-tax-schools.html

Another Tax Bill Introduced, Year-End Planning, and Jan. 10 Seminar/Webinar

https://lawprofessors.typepad.com/agriculturallaw/2017/12/another-tax-bill-introduced-year-end-planning-and-jan-10-seminarwebinar.html

Summer 2018 - Farm Tax and Farm Business Education

https://lawprofessors.typepad.com/agriculturallaw/2017/11/summer-2018-farm-tax-and-farm-business-education.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Summer Ag Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2017/06/summer-ag-taxestate-and-business-planning-conference.html

WATER LAW

Prior Appropriation – First in Time, First in Right

https://lawprofessors.typepad.com/agriculturallaw/2017/02/prior-appropriation-first-in-time-first-in-right.html

Kansas Water Law - Reactions to and Potential Consequences of the Garetson decision

https://lawprofessors.typepad.com/agriculturallaw/2017/02/kansas-water-law-reactions-to-and-potential-consequences-of-the-garetson-decision.html

Public Access To Private Land Via Water

https://lawprofessors.typepad.com/agriculturallaw/2017/04/public-access-to-private-land-via-water.html

Big Development for Water in the West - Federal Implied Reserved Water Rights Doctrine Applies to Groundwater

https://lawprofessors.typepad.com/agriculturallaw/2017/12/big-development-for-water-in-the-west-federal-implied-reserved-water-rights-doctrine-applies-to-grou.html

April 2, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Sunday, March 21, 2021

Ag Law and Taxation - 2018 Bibliography

Overview

Today's post is a bibliography of my ag law and tax blog articles of 2018.  Many of you have requested that I provide something like this to make it easier to find the articles, and last month I posted the bibliography of the 2020 and 2019 articles.  Soon I will post the bibliography of the 2017 articles and then 2016.  After those are posted.  I will post one long bibliography containing all of the articles up to that point in time.  Then, to close out 2021, I will post the articles of 2021. 

The library of content is piling up.

Cataloging the 2018 ag law and tax blog articles - it's the topic of today's post.

BANKRUPTCY

Top Ten Agricultural Law and Tax Developments of 2017 (Ten through Six)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-ten-through-six.html

Chapter 12 Bankruptcy – Feasibility of the Reorganization Plan

https://lawprofessors.typepad.com/agriculturallaw/2018/03/chapter-12-bankruptcy-feasibility-of-the-reorganization-plan.html

Farm Bankruptcy and the Preferential Payment Rule

https://lawprofessors.typepad.com/agriculturallaw/2018/05/farm-bankruptcy-and-the-preferential-payment-rule.html

Can a Bankrupt Farm Debtor Make Plan Payments Directly to Creditors?

https://lawprofessors.typepad.com/agriculturallaw/2018/08/can-a-bankrupt-farm-debtor-make-plan-payments-directly-to-creditors.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Chapter 12 Bankruptcy and the Tools-of-the-Trade Exemption

https://lawprofessors.typepad.com/agriculturallaw/2018/11/chapter-12-bankruptcy-and-the-tools-of-the-trade-exemption.html

Developments in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2018/11/developments-in-ag-law-and-tax.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

BUSINESS PLANNING

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

The Spousal Qualified Joint Venture

https://lawprofessors.typepad.com/agriculturallaw/2018/02/the-spousal-qualified-joint-venture.html

The Spousal Qualified Joint Venture – Implications for Self-Employment Tax and Federal Farm Program Payment Limitations

https://lawprofessors.typepad.com/agriculturallaw/2018/02/the-spousal-qualified-joint-venture-implications-for-self-employment-tax-and-federal-farm-program-payment-limitations.html

Form a C Corporation – The New Vogue in Business Structure?

https://lawprofessors.typepad.com/agriculturallaw/2018/02/form-a-c-corporation-the-new-vogue-in-business-structure.html

Tax Issues When Forming a C Corporation

https://lawprofessors.typepad.com/agriculturallaw/2018/02/tax-issues-when-forming-a-c-corporation.html

End of Tax Preparation Season Means Tax Seminar Season is About to Begin

https://lawprofessors.typepad.com/agriculturallaw/2018/04/end-of-tax-preparation-season-means-tax-seminar-season-is-about-to-begin.html

Converting a C Corporation to an S Corporation – The Problem of Passive Income

https://lawprofessors.typepad.com/agriculturallaw/2018/05/converting-a-c-corporation-to-an-s-corporation-the-problem-of-passive-income.html

Valuation Discounting

              https://lawprofessors.typepad.com/agriculturallaw/2018/05/valuation-discounting.html

Valuation Discounting – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2018/05/valuation-discounting-part-two.html

The Impact of the TCJA on Estates and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/the-impact-of-the-tcja-on-estates-and-trusts.html

Buy-Sell Agreements for Family Businesses

https://lawprofessors.typepad.com/agriculturallaw/2018/06/buy-sell-agreements-for-family-businesses.html

When is an Informal Business Arrangement a Partnership?

https://lawprofessors.typepad.com/agriculturallaw/2018/07/when-is-an-informal-business-arrangement-a-partnership.html

Management Activities and the Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2018/07/management-activities-and-the-passive-loss-rules.html

Expense Method Depreciation and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/08/expense-method-depreciation-and-trusts.html

Qualified Business Income Deduction – Proposed Regulations

  https://lawprofessors.typepad.com/agriculturallaw/2018/08/qualified-business-income-deduction-proposed-regulations.html

Intentionally Defective Grantor Trust – What is it and How Does it Work?

https://lawprofessors.typepad.com/agriculturallaw/2018/08/intentionally-defective-grantor-trust-what-is-it-and-how-does-it-work.html

When Can a Corporate Shareholder be Held Liable for Corporate Debts and Liabilities?

https://lawprofessors.typepad.com/agriculturallaw/2018/09/when-can-a-corporate-shareholder-be-held-liable-for-corporate-debts-and-liabilities.html

Farm Wealth Transfer and Business Succession – The GRAT

https://lawprofessors.typepad.com/agriculturallaw/2018/09/farm-wealth-transfer-and-business-succession-the-grat.html

Social Security Planning for Farmers

https://lawprofessors.typepad.com/agriculturallaw/2018/10/social-security-planning-for-farmers.html

Corporations Post-TCJA and Anti-Corporate Farming Laws

https://lawprofessors.typepad.com/agriculturallaw/2018/10/corporations-post-tcja-and-anti-corporate-farming-laws.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

What Happens When a Partner Dies?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/what-happens-when-a-partner-dies.html

What are the Tax Consequences on Sale or Exchange of a Partnership Interest?

https://lawprofessors.typepad.com/agriculturallaw/2018/12/what-are-the-tax-consequences-on-sale-or-exchange-of-a-partnership-interest.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

CIVIL LIABILITIES

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

Landlord Liability for Injuries Occurring on Leased Premises

https://lawprofessors.typepad.com/agriculturallaw/2018/03/landlord-liability-for-injuries-occurring-on-leased-premises.html

When Does a Rule of Strict Liability Apply on the Farm?

https://lawprofessors.typepad.com/agriculturallaw/2018/03/when-does-a-rule-of-strict-liability-apply-on-the-farm.html

When Can I Shoot My Neighbor’s Dog?

https://lawprofessors.typepad.com/agriculturallaw/2018/05/when-can-i-shoot-my-neighbors-dog.html

Reasonable Foreseeability

https://lawprofessors.typepad.com/agriculturallaw/2018/05/reasonable-foreseeability.html

What is “Agriculture” for Purposes of Agritourism?

https://lawprofessors.typepad.com/agriculturallaw/2018/05/what-is-agriculture-for-purposes-of-agritourism.html

Negligence – Can You Prove Liability?

https://lawprofessors.typepad.com/agriculturallaw/2018/06/negligence-can-you-prove-liability.html

Wind Farm Nuisance Matter Resolved – Buy the Homeowners Out!

https://lawprofessors.typepad.com/agriculturallaw/2018/06/wind-farm-nuisance-matter-resolved-buy-the-homeowners-out.html

Torts Down on the Farm

            https://lawprofessors.typepad.com/agriculturallaw/2018/08/torts-down-on-the-farm.html

Roadkill – It’s What’s for Dinner

https://lawprofessors.typepad.com/agriculturallaw/2018/09/roadkill-its-whats-for-dinner.html

What Difference Does it Make if I Post My Property “No Trespassing”?

https://lawprofessors.typepad.com/agriculturallaw/2018/09/what-difference-does-it-make-if-i-post-my-property-no-trespassing.html

Liability for Injuries Associated with Horses

https://lawprofessors.typepad.com/agriculturallaw/2018/10/liability-for-injuries-associated-with-horses.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Developments in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2018/11/developments-in-ag-law-and-tax.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

CONTRACTS

Is a Farmer a Merchant?  Why it Might Matter

https://lawprofessors.typepad.com/agriculturallaw/2018/02/is-a-farmer-a-merchant-why-it-might-matter.html

Some Thoughts on the Importance of Leasing Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/02/some-thoughts-on-the-importance-of-leasing-farmland.html

Contract Rescission – When Can You Back Out of a Deal?

https://lawprofessors.typepad.com/agriculturallaw/2018/06/contract-rescission-when-can-you-back-out-of-a-deal.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Disclaiming Implied Warranties

https://lawprofessors.typepad.com/agriculturallaw/2018/11/disclaiming-implied-warranties.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

COOPERATIVES

The Qualified Business Income (QBI) Deduction – What a Mess!

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-qualified-business-income-qbi-deduction-what-a-mess.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

CRIMINAL LIABILITIES

Curtilage – How Much Ag Property is Protected from a Warrantless Search?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/curtilage-how-much-ag-property-is-protected-from-a-warrantless-search.html

Establishing the Elements of a Cruelty to Animals Charge

https://lawprofessors.typepad.com/agriculturallaw/2018/07/establishing-the-elements-of-a-cruelty-to-animals-charge.html

What Difference Does it Make if I Post My Property “No Trespassing”?

https://lawprofessors.typepad.com/agriculturallaw/2018/09/what-difference-does-it-make-if-i-post-my-property-no-trespassing.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

ENVIRONMENTAL LAW

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-five-through-one.html

Is a CWA Permit Needed for Pollution Discharges via Groundwater?

https://lawprofessors.typepad.com/agriculturallaw/2018/03/is-a-cwa-permit-needed-for-pollution-discharges-via-groundwater.html

Non-Tax Ag Provisions and the Omnibus Bill

https://lawprofessors.typepad.com/agriculturallaw/2018/04/non-tax-ag-provisions-in-the-omnibus-bill.html

Wetlands and Farm Programs – Does NRCS Understand the Rules?

https://lawprofessors.typepad.com/agriculturallaw/2018/06/wetlands-and-farm-programs-does-nrcs-understand-the-rules.html

Regulation of Wetlands and “Ipse Dixit” Determinations

https://lawprofessors.typepad.com/agriculturallaw/2018/07/regulation-of-wetlands-and-ipse-dixit-determinations.html

WOTUS Developments

            https://lawprofessors.typepad.com/agriculturallaw/2018/08/wotus-developments.html

Does the Migratory Bird Treaty Act Apply to Farmers?

https://lawprofessors.typepad.com/agriculturallaw/2018/08/does-the-migratory-bird-treaty-act-apply-to-farmers.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Is Groundwater a “Point Source” Pollutant?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/is-groundwater-a-point-source-pollutant.html

“Waters of the United States” Means “Frozen Soil”?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/waters-of-the-united-states-means-frozen-soil.html

Developments in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2018/11/developments-in-ag-law-and-tax.html

Can an Endangered Species be Protected in Areas Where it Can’t Survive?

https://lawprofessors.typepad.com/agriculturallaw/2018/12/can-an-endangered-species-be-protected-in-areas-where-it-cant-survive.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

ESTATE PLANNING

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

The Tax Cuts and Job Acts – How Does it Impact Estate Planning?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-tax-cuts-and-jobs-act-how-does-it-impact-estate-planning.html

What’s the Charitable Deduction for Donations From a Trust?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/whats-the-charitable-deduction-for-donations-from-a-trust.html

The Spousal Qualified Joint Venture

https://lawprofessors.typepad.com/agriculturallaw/2018/02/the-spousal-qualified-joint-venture.html

Why Clarity in Will/Trust Language Matters

https://lawprofessors.typepad.com/agriculturallaw/2018/02/why-clarity-in-willtrust-language-matters.html

Some Thoughts on the Importance of Leasing Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/02/some-thoughts-on-the-importance-of-leasing-farmland.html

End of Tax Preparation Season Means Tax Seminar Season is About to Begin

https://lawprofessors.typepad.com/agriculturallaw/2018/04/end-of-tax-preparation-season-means-tax-seminar-season-is-about-to-begin.html

Modifying an Irrevocable Trust – Decanting

https://lawprofessors.typepad.com/agriculturallaw/2018/04/modifying-an-irrevocable-trust-decanting.html

Valuation Discounting – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2018/05/valuation-discounting-part-two.html

The Impact of the TCJA on Estates and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/the-impact-of-the-tcja-on-estates-and-trusts.html

Impact of Post-Death Events on Valuation

https://lawprofessors.typepad.com/agriculturallaw/2018/06/impact-of-post-death-events-on-valuation.html

Beneficiary Designations, Changed Circumstances and the Contracts Clause

https://lawprofessors.typepad.com/agriculturallaw/2018/07/beneficiary-designations-changed-circumstances-and-the-contracts-clause.html

Qualified Business Income Deduction – Proposed Regulations

https://lawprofessors.typepad.com/agriculturallaw/2018/08/qualified-business-income-deduction-proposed-regulations.html

Spousal Joint Tendencies and Income Tax Basis

https://lawprofessors.typepad.com/agriculturallaw/2018/09/spousal-joint-tenancies-and-income-tax-basis.html

Farm and Ranch Estate Planning in 2018 and Forward

https://lawprofessors.typepad.com/agriculturallaw/2018/10/farm-and-ranch-estate-planning-in-2018-and-forward.html

The TCJA, Charitable Giving and a Donor-Advised Fund

https://lawprofessors.typepad.com/agriculturallaw/2018/10/the-tcja-charitable-giving-and-a-donor-advised-fund.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Unpaid Tax at Death – How Long Does IRS Have to Collect?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/unpaid-tax-at-death-how-long-does-irs-have-to-collect.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

INCOME TAX

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-five-through-one.html

The Qualified Business Income (QBI) Deduction – What a Mess!

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-qualified-business-income-qbi-deduction-what-a-mess.html

The Tax Cuts and Jobs Act – How Does it Impact Estate Planning?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-tax-cuts-and-jobs-act-how-does-it-impact-estate-planning.html

What’s the Charitable Deduction for Donations from a Trust?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/whats-the-charitable-deduction-for-donations-from-a-trust.html

Can Farmers Currently Deduct Research Expenditures?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/can-farmers-currently-deduct-research-expenditures.html

Innovation on the Farm – Will the Research and Development Credit Apply?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/innovation-on-the-farm-will-the-research-and-development-credit-apply.html

What Happens When the IRS Deems an Ag Activity to Be a Hobby?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/what-happens-when-the-irs-deems-an-ag-activity-to-be-a-hobby.html

The Spousal Qualified Joint Venture – Implications for Self-Employment Tax and Federal Farm Program Payment Limitations

https://lawprofessors.typepad.com/agriculturallaw/2018/02/the-spousal-qualified-joint-venture-implications-for-self-employment-tax-and-federal-farm-program-payment-limitations.html

Livestock Sold or Destroyed Because of Disease

https://lawprofessors.typepad.com/agriculturallaw/2018/02/livestock-sold-or-destroyed-because-of-disease.html

Form a C Corporation – The New Vogue in Business Structure?

https://lawprofessors.typepad.com/agriculturallaw/2018/02/form-a-c-corporation-the-new-vogue-in-business-structure.html

Deductible Repairs Versus Capitalization

https://lawprofessors.typepad.com/agriculturallaw/2018/03/deductible-repairs-versus-capitalization.html

The Tax Treatment of Farming Net Operating Losses

https://lawprofessors.typepad.com/agriculturallaw/2018/03/the-tax-treatment-of-farming-net-operating-losses.html

Congress Modifies the Qualified Business Income Deduction

https://lawprofessors.typepad.com/agriculturallaw/2018/03/congress-modifies-the-qualified-business-income-deduction.html

IRS Collections – The Basics

https://lawprofessors.typepad.com/agriculturallaw/2018/03/irs-collections-the-basics-.html

Tax Issues Associated with Oil and Gas Production

https://lawprofessors.typepad.com/agriculturallaw/2018/03/tax-issues-associated-with-oil-and-gas-production.html

Refundable Fuel Credits – Following the Rules Matters

https://lawprofessors.typepad.com/agriculturallaw/2018/04/refundable-fuel-credits-following-the-rules-matters.html

Distinguishing Between a Capital Lease and an Operating Lease

https://lawprofessors.typepad.com/agriculturallaw/2018/04/distinguishing-between-a-capital-lease-and-an-operating-lease.html

End of Tax Preparation Season Means Tax Seminar Season is About to Begin

https://lawprofessors.typepad.com/agriculturallaw/2018/04/end-of-tax-preparation-season-means-tax-seminar-season-is-about-to-begin.html

Passive Activities and Grouping

https://lawprofessors.typepad.com/agriculturallaw/2018/04/passive-activities-and-grouping.html

Divorce and the New Tax Law – IRS Grants Some Relief

https://lawprofessors.typepad.com/agriculturallaw/2018/04/divorce-and-the-new-tax-law-irs-grants-some-relief.html

Gifts of Ag Commodities to Children and the New Tax Law

https://lawprofessors.typepad.com/agriculturallaw/2018/04/gifts-of-ag-commodities-to-children-and-the-new-tax-law.html

Post-Death Sale of Crops and Livestock

https://lawprofessors.typepad.com/agriculturallaw/2018/04/post-death-sale-of-crops-and-livestock.html

Is There a Downside Risk to E-Filing Your Taxes?

https://lawprofessors.typepad.com/agriculturallaw/2018/05/is-there-a-downside-risk-to-e-filing-your-taxes.html

Purchase and Sale Allocations to CRP Contracts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/purchase-and-sale-allocations-to-crp-contracts.html

Converting a C Corporation to an S Corporation – The Problem of Passive Income

https://lawprofessors.typepad.com/agriculturallaw/2018/05/converting-a-c-corporation-to-an-s-corporation-the-problem-of-passive-income.html

The Impact of the TCJA on Estates and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/the-impact-of-the-tcja-on-estates-and-trusts.html

The TCJA and I.R.C. 529 Plans

https://lawprofessors.typepad.com/agriculturallaw/2018/05/the-tcja-and-irc-529-plans.html

Farmers, Self-Employment Tax, and Personal Property Leases

https://lawprofessors.typepad.com/agriculturallaw/2018/06/farmers-self-employment-tax-and-personal-property-leases.html

State Taxation of Online Sales

https://lawprofessors.typepad.com/agriculturallaw/2018/06/state-taxation-of-online-sales.html

The Depletion Deduction for Oil and Gas Operations

https://lawprofessors.typepad.com/agriculturallaw/2018/07/the-depletion-deduction-for-oil-and-gas-operations.html

Charitable Giving Post-2017

https://lawprofessors.typepad.com/agriculturallaw/2018/07/charitable-giving-post-2017.html

When is an Informal Business Arrangement a Partnership?

https://lawprofessors.typepad.com/agriculturallaw/2018/07/when-is-an-informal-business-arrangement-a-partnership.html

Management Activities and the Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2018/07/management-activities-and-the-passive-loss-rules.html

Tax Issues on Repossession of Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/07/tax-issues-on-repossession-of-farmland.html

Outline of Tax Proposals Released

https://lawprofessors.typepad.com/agriculturallaw/2018/07/outline-of-tax-proposals-released.html

Life Estate/Remainder Arrangements and Income Tax Basis

https://lawprofessors.typepad.com/agriculturallaw/2018/08/life-estateremainder-arrangements-and-income-tax-basis-.html

Expense Method Depreciation and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/08/expense-method-depreciation-and-trusts.html

Qualified Business Income Deduction – Proposed Regulations

https://lawprofessors.typepad.com/agriculturallaw/2018/08/qualified-business-income-deduction-proposed-regulations.html

The Qualified Business Income Deduction and “W-2 Wages”

https://lawprofessors.typepad.com/agriculturallaw/2018/08/the-qualified-business-income-deduction-and-w-2-wages.html

Tax Consequences on Partition and Sale of Land

https://lawprofessors.typepad.com/agriculturallaw/2018/09/tax-consequences-on-partition-and-sale-of-land.html

Deducting Residual Soil Fertility

https://lawprofessors.typepad.com/agriculturallaw/2018/09/deducting-residual-soil-fertility.html

Social Security Planning for Farmers

https://lawprofessors.typepad.com/agriculturallaw/2018/10/social-security-planning-for-farmers.html

Eliminating Capital Gain Tax – Qualified Opportunity Zones

https://lawprofessors.typepad.com/agriculturallaw/2018/10/eliminating-capital-gain-tax-qualified-opportunity-zones.html

The TCJA, Charitable Giving and a Donor-Advised Fund

https://lawprofessors.typepad.com/agriculturallaw/2018/10/the-tcja-charitable-giving-and-a-donor-advised-fund.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

What is Depreciable Farm Real Property?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/what-is-depreciable-farm-real-property.html

What is “Like-Kind” Real Estate?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/what-is-like-kind-real-estate.html

Developments in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2018/11/developments-in-ag-law-and-tax.html

Trusts and Like-Kind Exchanges

https://lawprofessors.typepad.com/agriculturallaw/2018/11/trusts-and-like-kind-exchanges.html

Unpaid Tax at Death – How Long Does IRS Have to Collect?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/unpaid-tax-at-death-how-long-does-irs-have-to-collect.html

Non-Depreciable Items on the Farm or Ranch

https://lawprofessors.typepad.com/agriculturallaw/2018/11/non-depreciable-items-on-the-farm-or-ranch.html

What are the Tax Consequences on Sale or Exchange of a Partnership Interest?

https://lawprofessors.typepad.com/agriculturallaw/2018/12/what-are-the-tax-consequences-on-sale-or-exchange-of-a-partnership-interest.html

Expense Method Depreciation and Structures on the Farm

https://lawprofessors.typepad.com/agriculturallaw/2018/12/expense-method-depreciation-and-structures-on-the-farm.html

Deduction Costs Associated with Items Purchased for Resale

https://lawprofessors.typepad.com/agriculturallaw/2018/12/sale-of-items-purchased-for-resale.html

Claiming Business Deductions? – Maintain Good Records, and… Hire a Tax Preparer

            https://lawprofessors.typepad.com/agriculturallaw/income-tax/page/7/

Depletion – What is it and When is it Available?

https://lawprofessors.typepad.com/agriculturallaw/2018/12/depletion-what-is-it-and-when-is-it-available.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

INSURANCE

Beneficiary Designations, Changed Circumstances and the Contracts Clause

https://lawprofessors.typepad.com/agriculturallaw/2018/07/beneficiary-designations-changed-circumstances-and-the-contracts-clause.html

Recent Developments Involving Crop Insurance

https://lawprofessors.typepad.com/agriculturallaw/2018/08/recent-developments-involving-crop-insurance.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Farm Liability Policies – Are All Activities on the Farm Covered?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/farm-liability-policies-are-all-activities-on-the-farm-covered.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

REAL PROPERTY

In-Kind Partition and Adverse Possession – Two Important Concepts in Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2018/01/in-kind-partition-and-adverse-possession-two-important-concepts-in-agriculture.html

Some Thoughts on the Importance of Leasing Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/02/some-thoughts-on-the-importance-of-leasing-farmland.html

Prescriptive Easements and Adverse Possession – Obtaining Title to Land Without Paying for It

https://lawprofessors.typepad.com/agriculturallaw/2018/03/prescriptive-easements-and-adverse-possession-obtaining-title-to-land-without-paying-for-it.html

Purchase and Sale Allocations to CRP Contracts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/purchase-and-sale-allocations-to-crp-contracts.html

Tax Issues on Repossession of Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/07/tax-issues-on-repossession-of-farmland.html

The Accommodation Doctrine – Working Out Uses Between Surfaces and Subsurface Owners

https://lawprofessors.typepad.com/agriculturallaw/2018/09/the-accommodation-doctrine-working-out-uses-between-surface-and-subsurface-owners.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

What is “Like-Kind” Real Estate?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/what-is-like-kind-real-estate.html

Negative Easements – Is There a Right to Unobstructed Light, Air, or View?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/negative-easements-is-their-a-right-to-unobstructed-light-air-or-view.html

 The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

REGULATORY LAW

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

Top Ten Agricultural Law and Tax Developments of 2017 (Ten through Six)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-ten-through-six.html

Is There a Constitutional Way to Protect Animal Ag Facilities?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/is-there-a-constitutional-way-to-protect-animal-ag-facilities.html

Trade Issues and Tariffs – Are Agriculture’s Concerns Legitimate?

https://lawprofessors.typepad.com/agriculturallaw/2018/03/trade-issues-and-tariffs-are-agricultures-concerns-legitimate.html

Federal Crop Insurance – Some Recent Case Developments

https://lawprofessors.typepad.com/agriculturallaw/2018/04/federal-crop-insurance-some-recent-case-developments.html

Non-Tax Ag Provisions in the Omnibus Bill

https://lawprofessors.typepad.com/agriculturallaw/2018/04/non-tax-ag-provisions-in-the-omnibus-bill.html

Are Mandatory Assessments for Generic Advertising of Ag Commodities Constitutional?

https://lawprofessors.typepad.com/agriculturallaw/2018/06/are-mandatory-assessments-for-generic-advertising-of-ag-commodities-constitutional.html

Wind Farm Nuisance Matter Resolved – Buy the Homeowners Out!

https://lawprofessors.typepad.com/agriculturallaw/2018/06/wind-farm-nuisance-matter-resolved-buy-the-homeowners-out.html

Regulation of Wetlands and “Ipse Dixit” Determinations

https://lawprofessors.typepad.com/agriculturallaw/2018/07/regulation-of-wetlands-and-ipse-dixit-determinations.html

Ag Employment – Verifying the Legal Status of Employees

https://lawprofessors.typepad.com/agriculturallaw/2018/08/ag-employment-verifying-the-legal-status-of-employees.html

Roadkill – It’s What’s for Dinner

https://lawprofessors.typepad.com/agriculturallaw/2018/09/roadkill-its-whats-for-dinner.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

“Waters of the United States” Means “Frozen Soil”?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/waters-of-the-united-states-means-frozen-soil.html

How Long Can a Train Block a Crossing?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/how-long-can-a-train-block-a-crossing.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html  

SECURED TRANSACTIONS

Ag Finance – Getting the Debtor’s Name Correct on the Financing Statements

https://lawprofessors.typepad.com/agriculturallaw/2018/02/ag-finance-getting-the-debtors-name-correct-on-the-financing-statement.html

What Are “Proceeds” of Crops and Livestock?

https://lawprofessors.typepad.com/agriculturallaw/2018/09/what-are-proceeds-of-crops-and-livestock.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

SEMINARS AND CONFERENCES

Agricultural Law and Economics Conference

https://lawprofessors.typepad.com/agriculturallaw/2018/07/agricultural-law-and-economics-conference.html

Summer Farm Income Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2018/02/summer-farm-income-taxestate-and-business-planning-conference.html

Upcoming Seminars

            https://lawprofessors.typepad.com/agriculturallaw/2018/08/upcoming-seminars.html

Fall Tax Seminars

            https://lawprofessors.typepad.com/agriculturallaw/2018/09/fall-tax-seminars.html

Year-End Ag Tax Seminar/Webinar

https://lawprofessors.typepad.com/agriculturallaw/2018/12/year-end-ag-tax-seminarwebinar.html

WATER LAW

Top Ten Agricultural Law and Tax Developments of 2017 (Ten through Six)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-ten-through-six.html

Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-five-through-one.html

The Accommodation Doctrine – Working on Uses Between Surface and Subsurface Owners

https://lawprofessors.typepad.com/agriculturallaw/2018/09/the-accommodation-doctrine-working-out-uses-between-surface-and-subsurface-owners.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Drainage Issues – Rules for Handling Excess Surface Water

https://lawprofessors.typepad.com/agriculturallaw/2018/12/drainage-issues-rules-for-handling-excess-surface-water.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html  

March 21, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)