August 28, 2020 Weekly Round Up

Welcome to another agricultural law weekly round up.  Here are some of the recent ag law stories in the news.

*USDA issues Final Rule modifying eligibility rules to qualify for farm program payments.  The USDA Farm Service Agency issued a Final Rule making changes to eligibility requirements for farm program payments.  One expected change per the 2018 Farm Bill allows first cousins, nieces, and nephews to qualify under the definition of “family member.”  A more unexpected change dealt with modifications of definitions of “active personal management” and “significant contribution.”  The new rule provides additional requirements for those claiming “significant contribution” by farm management activities.  In particular, the rule requires qualifying farm managers to either perform activities on a “regular, continuous, and substantial basis” that are at least 25% of the total management hours required for the farming operation on an annual basis or perform at least 500 hours of management annually for the farming operation.  This requirement is similar to that applied to joint ventures and general partnerships in 2015, but from which family operations had been exempted under the 2014 Farm Bill.  [Read Final Rule here.]

*MT Supreme Court to decide if dinosaur bones are minerals.  In a case we have been following for a couple of years, the question is whether dinosaur bones are considered minerals.  This matters, of course, because these bones are worth significant amounts of money and there has been a dispute over who is entitled to payment–the mineral owner or the surface owner.  Back in 2018, the US Court of Appeals for the Ninth Circuit held that fossils are minerals.  Interestingly, in reaching that decision, the Court relied on a Texas case seeking to delineate between mineral and surface substances and asked whether the substance was “rare and exceptional in character or possessed a peculiar property giving it special value.”  The dissenting judge would have applied the “ordinary and natural meaning test,” which is also found in Texas law, and would have found for the surface owner.  In light of the significant implications this ruling could have, the surface owner and a number of other groups asked the Ninth Circuit to either reconsider or send the question to the Montana Supreme Court.   In what is a bit of an unusual move, the Ninth Circuit granted this request.  They agreed to reconsider, vacated their prior ruling and certified the question to the Montana Supreme Court, where it is now pending.  Meanwhile, in April 2019, Montana passed a statute declaring fossil ownership lies with a surface owner.  That statute, however, does not apply to existing disputes, so the parties will have to wait for a decision from the Montana Supreme Court. [Read article here.]  For the curious Texans in the crowd, I was unable to find any published cases addressing the ownership of fossils in the Lone Star State.

*DEA Interim Final Rule on hemp could lead to potential issues for processors.  The Drug Enforcement Agency issued an Interim Final Rule related to hemp, which contains language related to derivatives that could be problematic for producers.  Specifically, the rule states that “the definition of hemp does not automatically exempt any product derived from a hemp plant, regardless of the THC content of the derivative. In order to meet the definition of ‘hemp,’ and thus qualify for the exemption from schedule I, a derivative must not exceed the 0.3% THC limit…A cannabis derivative, extract, or product that exceeds the 0.3% THC limit is a schedule I controlled substance, even if the plant from which it was derived contains 0.3% or less THC on a dry weight basis.”  This is important for processors to be aware of.  [Read article here.]

*Empathy on the Farm.  My friend and Panhandle-based attorney, Scott Sherwood, sent me this article and I thought it was a great discussion of the need for empathy in estate planning conversations. The author looked at four farm situations that deserve empathy in the estate planning process.  [Read article here.]


Upcoming Presentations

I’ve got a few programs coming up the next couple of weeks.  First, I’ll be doing two webinars hosted by the Dallas County Extension Office on September 3.  We will talk Landowner Liability from 12-1 and Texas Water Law from 1-2.  Anyone is welcome.  To register, click here.  I’ll also be doing a webinar for Ft. Bend County focused on Landowner Liability on September 9.  Contact the Ft. Bend County Extension Office for more info.  Finally, I’ll be speaking a couple of times at the TSCRA Virtual Convention on September 15-16.  Click here for more info!

For a complete list of my upcoming presentations, click here.

Also, don’t forget our Online Ranchers Leasing Workshop is always available for you to take at your own pace.  For more info, click here.

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