Every July at the Southern Extension Committee Meetings, Southern Ag Today likes to take the opportunity to recognize our authors for all their hard work. We look at all the articles written over the past year May 2022 – April 2023 and decide which were read, viewed, and shared the most using our analytics. We are pleased to announce our 2022-2023 winners.
Last week, the United States Supreme Court issued its Opinion in National Pork Producers Council v. Ross. The National Pork Producers Council (NPPC) challenged California’s Proposition 12, a law imposing certain animal welfare requirements such as pen size and space on pork sold in California, alleging that it violated the Dormant Commerce Clause.
The Dormant Commerce Clause essentially implies that because the United States Constitution expressly grants power to regulate interstate commerce to Congress, that, by implication, means such power is not vested with the states. Here, NPPC argued that the California law had extraterritorial impacts on pork producers in other states, thereby violating the Dormant Commerce Clause.
The Court issued a fractured Opinion affirming the lower courts’ grant of California’s Motions to Dismiss, with some portions agreed upon by each of the 9 Justices, and others garnering support from far fewer.
The Justices unanimously agreed on two points. First, the “antidiscrimination principle lies at the very core of” Dormant Commerce Clause jurisprudence. Here, NPPC did not allege that Proposition 12 was facially discriminatory statute, admitting it applied equally to in-state and out-of-state pork producers. Second, all Justices rejected NPPC’s argument that there is an “almost per se” rule that forbids state laws that have a “practical effect of controlling commerce outside the state.” This was too broad a reading of the Dormant Commerce Clause for all of the Justices. As the Court explained, “In our interconnected national marketplace, many (maybe most) state laws have the ‘practical effect of controlling’ extraterritorial behavior.”
Where the Justices disagreed, however, was the proper scope and analysis under the Pike balancing test. When a law has a substantial burden on interstate commerce, the Pike balancing test requires a court to balance the burden on interstate commerce against the local benefits from the law. Some Justices held that the Court was not intended to, or able to, weigh such burdens. Other Justices held that there was no proof of a substantial burden on interstate commerce, which means the Court should not reach the balancing test at all in this case. Still others found that a substantial burden was alleged, but that the US Court of Appeals for the Ninth Circuit improperly applied the balancing test and would have remanded the case with instructions to correctly balance the interests.
Where does this leave producers? Currently, the regulations surrounding Proposition 12 are not set to go into effect until July 1, 2023. Another challenge alleging additional facts seeking to prove that Proposition 12 does impose a substantial burden could potentially be filed. A similar law was passed in Massachusetts, and a lawsuit is currently pending challenging that law. It is certainly possible that additional laws related to animal husbandry practices could be passed in other states as a result of this ruling.
Many cattle producers utilize a custom-exempt processing facility in their direct-to-consumer businesses. In this scenario, the producer sells a live calf (or fractional share thereof) to the consumer and then delivers the live animal to the custom-exempt facility, where it will be processed for the purchaser.
Anyone using this approach should have a custom harvest agreement to memorialize the contractual agreement between the producer and purchaser.
The following topics should be considered when drafting a custom harvest agreement:
Description of product being sold. Be clear in the agreement that it is the live animal being sold to the consumer, not the processed beef. Be clear on what percentage of the animal the customer is purchasing. If selling a specific animal, be sure to include the ear tag number or other description of the animal.
Educational information. Include information a purchaser may not realize, such as the difference between the live animal weight and boxed beef weight, the amount of freezer space needed for a full, half, or quarter beef, and a sample cut sheet.
How will payment be calculated? Describe how the price for the animal will be calculated, such as a flat fee or price per pound. If per-pound, will it be calculated on the live weight or hanging weight of the animal?
When and how will payment be due? Detail any required deposit amount. Set payment deadlines. Identify allowable payment methods.
Processing fees. Typically, the purchaser pays the processor directly, and this should be spelled out in the agreement.
Reselling/donating meat from the animal isprohibited. Make clear in the custom harvest agreement that due to federal law, the beef from this animal may not be resold or donated.
Point at which animal is property of the buyer. Make clear at which point in time the animal officially becomes the property of the buyer. Certainly, this has to be done at least by the point in time when it is delivered to the custom processing facility but could be as early as when the initial deposit is made. This is important in the event of the death of an animal prior to delivery to a processing facility.
A custom harvest agreement provides important information to the purchaser and ensures both parties are on the same page about the sales transaction. For more information on direct-to-consumer beef sales, click here.
Disclaimer: This article is provided for purely educational purposes, and the reader should check to see if state policy has changed since its posting.
The question often asked by landowners considering leasing a portion of their property for solar development is, what happens at the end of the lease? The answer to this question often depends on current state policy and the decommissioning clause negotiated in the lease. While this is a rapidly developing topic, we provide a current synopsis of both in the paragraphs that follow.
Based on a cursory review of state law – and as summarized in Table 1 – there is a considerable amount of variability across the South. For example, 6 states require some form of decommissioning plan, with 4 of those also requiring assurance that funds will be available to decommission the solar project at the end of its life. Another 3 states have legislative action pending and/or have developed a model ordinance for local government (e.g. Georgia). Finally, 4 states have no statewide decommissioning regulations.
With respect to decommissioning clauses negotiated into leases, lease terms often state that the facility will be removed and potentially include a bonding requirement. Landowners should often consider negotiating a decommissioning clause that considers current state policy plus how to restore the land in the future once the solar facility is removed.
When presented with a lease for a solar energy facility, landowners should have a clause that deals with decommissioning and cleanup of the site. Depending on the state, these clauses can either enhance the existing decommissioning policy or dictate how the cleanup process will occur. The typical lease should require the company to remove all its Solar Facility, including the panels, posts, and concrete pads, and typically remove wiring down to plow depth. Some leases may go beyond this clause and require the solar company to put up a bond to cover the necessary cleanup costs. Landowners often request a bond to assist with potential cleanup costs if the solar company defaults on the required cleanup of the facility. Many state policies related to solar decommissioning also require putting up bonds to cover necessary cleanup costs.
As a landowner presented with a solar lease, what should you consider as it relates to decommissioning a solar facility? First, take a moment to consider the location of the facility. What features exist on that piece of property that need to be restored? How do you want to see the site restored? Next, negotiate how the site should be restored to allow the land to return to productive agricultural use. Take photos to demonstrate the current conditions and to give future parties an understanding of what the site initially looked like. Taking the time to document the land’s condition and negotiate a decommissioning clause that considers state policies at the time will allow for the site to be decommissioned in a way that reduces potential conflicts in the future.
Table 1. Summary of State Decommissioning Regulations in the South
State
Decommissioning Regulations
State Code/Legislative Citation
Date Enacted
Alabama
No state-wide decommissioning regulations
Arkansas
No state-wide decommissioning regulations
Florida
No state-wide decommissioning regulations
Georgia
A model ordinance was developed for local governments
Kentucky
Decommissioning plan required with financial assurance.
Ky. H.B. 4 – 2023 Reg. Sess.
30-Mar-23
Louisiana
Decommissioning plan required with financial assurance.
La. Rev. Stat. § 30:1154
2-Aug-22
Maryland
Decommissioning plan required with financial assurance.
Md. Code Regs. 27.01.14.04
8-Mar-21
Mississippi
No state-wide decommissioning regulations
North Carolina
Legislative action pending.
Oklahoma
Decommissioning plan required.
60 Okla. Stat. § 820.1
13-Apr-11
South Carolina
Legislative action pending.
Tennessee
Decommissioning plan required with financial assurance.
Tenn. Code § 66-9-207
1-Jun-22
Texas
Decommissioning plan required with financial assurance.
Tex. Util. Code § 302.0004
1-Sep-21
Virginia
A locality must require a lessee to have a decommissioning plan
Va. Code Ann. § 15.2-2241.2
21-Mar-19
Goeringer’s work is supported by the Agriculture and Food Research Initiative (AFRI) program, grant no. 2020-68006-31182/project accession no. 1022637, from the U.S. Department of Agriculture, National Institute of Food and Agriculture. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author. They should not be construed to represent any official USDA or U.S. Government determination or policy.
States in the South are in their legislative sessions, and several are looking to amend their right to farm statutes. A right to farm statute is a state law intended to protect qualifying agricultural operations from nuisance lawsuits brought by neighbors for noise, dust, odor, or other actions that interfere with the neighbors’ use and enjoyment of their property. State law can vary dramatically across the country and small changes to language can have a major impact on how the law is applied in that state.
Some proposed changes in the South are relatively minor, while others would make substantial changes in how nuisance laws would affect agricultural operations. Below are the links to current bills in the South and a short description of the potential impact of the legislation.
Arkansas – HB 1434 – This bill was enacted into law and specifies that the burden of proof in a nuisance lawsuit is borne by the party that brought the lawsuit against the farming operation.
Florida – HB 1361 and SB 1472 – Both bills are companion bills (bills that are largely the same, but filed in different chambers or by different members in the state legislature) that would allow farm operations to store, process and distribute organic material. Organic material is defined as “vegetative matter resulting from landscaping maintenance or land clearing operations … ” This definition would not include organic material from animal agriculture operations.
Oklahoma – HB 1457 – Nuisance lawsuits involving the cultivation of medical marijuana would be excluded from the protections of the Oklahoma Right to Farm Act under this bill.
South Carolina – H 3432 – This bill would change several things. Importantly for the state right to farm statute, it would define several terms deemed “covered activities”, including composting. It would also require the Commissioner of Agriculture to investigate complaints about agricultural operations and make recommendations about best management practices.
SB 1421 – This bill could significantly strengthen the existing Texas Right to Farm Act by setting one establishment date for the agricultural operation and protecting all activities after one year has passed (unless it is determined to be a “substantial change”). Currently, expansions are not protected until the expansion has been in existence for at least one year. This bill would also extend coverage to veterinary practices, increase the burden of proof to clear and convincing evidence, strengthen the attorney fees provision, limit the power of city governments to regulate farming operations in city limits, and make other small changes.
HB 2308 – Largely a companion bill to SB 1421; however, it does not have language about restricting the powers of city governments to regulate agricultural operations within city limits.
HB 1750 – Also largely a companion bill to SB 1421 and contains the language limiting city governments on how they regulate agricultural operations, but does not include the language on changing the establishment date or the addition of the language about “substantial change.”
Words matter in the legal context. Some changes, like with the Arkansas bill, may have little impact on how the state right to farm act is applied, while the changes to the Texas law, if enacted, could substantially change how nuisance lawsuits and zoning disputes move forward. Even if your state is not on the list for proposed changes for this legislative term, it is common for other state legislatures to copy legislation and try to enact similar bills in their states in subsequent years. To see your state’s current right to farm statute, click here.
