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Bankruptcy reform and family farmers
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 passed the
Senate on March 10; it passed the House of Representatives on April 11; and it was
signed by the President on April 20, 2005. It became Public Law No. 109-8, marking the
conclusion of almost a decade of contentious debate. The Bankruptcy Abuse Preven-
tion and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23 (to be codified
in scattered sections of 11 U.S.C.). Most provisions of the bill will not be effective for
six months from enactment. Id. at § 1501, 119 Stat. at 216.

INSIDE Much of the new law is directed toward consumer bankruptcy reform, and some of the most
controversial aspects of it, e.g., means testing for Chapter 7 relief, have been reported widely
in the media. The important aspects of the law that will directly affect farmers, however, have
received little attention. The main provisions are summarized as follows.
• GAO report on Chapter 12 becomes permanent. When Chapter 12 was first enacted in 1986, it was
agroterrorism a temporary provision of the Bankruptcy Code. Bankruptcy Judges, United States Trustees
and Family Farmer Bankruptcy Act of 1986, Pub. L. No. 99-554, tit. II, § 255, 100 Stat. 3088,
• Recreational use 3105-3113 (1986) (codified at 11 U.S.C. §§ 1201 - 1231). It had a sunset provision that
statutes and E. coli provided for repeal on October 1, 1993. Id. at tit. III, § 302(f), 100 Stat. at 3124. It has
been renewed numerous times, each time as another temporary extension. Renew-
• EPA air quality als, however, sometimes came months after Chapter 12 had sunset, creating frustrat-
consent agreement ing gaps in its availability. Efforts to make Chapter 12 permanent were politically tied
to the bankruptcy reform legislation, as proponents sought the votes of farm state
representatives. Therefore, the various versions of bankruptcy reform over the years
have generally included a provision that would make Chapter 12 a permanent part of
the Bankruptcy Code. Section 1001 of the new law so provides. Id. at § 1001, 119 Stat.
at 185-86. This amendment will take effect on July 1, 2005, the date upon which the
current extension of Chapter 12 would have otherwise expired. Id.

Chapter 12 eligibility expanded. The new law amends Chapter 12 eligibility standards,
Solicitation of articles: All AALA expanding its availability. Four changes are made. First, the statutory maximum for
members are invited to submit articles debts is increased from $1,500,000 to $3,237,000. Id. at § 1004, 119 Stat. at 186. This
to the Update. Please include copies of maximum amount will now increase with the Consumer Price Index. Id. at § 1002, 119
Stat. at 18.
decisions and legislation with the ar-
Second, the new law amends the requirement that at least eighty percent of debt
ticle. To avoid duplication of effort,
come from farming. Under the new law, just fifty percent of the debt must arise out
please notify the Editor of your pro- Cont. on page 2
posed article.

Federal Register summary: April 2 to
May 13, 2005
IN FUTURE BRUCELLOSIS. The APHIS has issued interim regulations that change the classi-
fication of Florida to brucellosis-free. 70 Fed. Reg. 22588 (May 2, 2005).

ISSUES FOOD SAFETY. The (FSIS) is soliciting proposals for cooperative agreement
projects to be funded in fiscal year 2005. Proposals should be made in one or more of
the following cooperative agreement program areas: (1) food animal production,
transportation, and marketing; (2) small and very small inspected meat, poultry, or egg
product establishments; (3) retail stores, food service establishments, and other
• Renewable Energy and inspection-exempt small businesses processing or handling meat, poultry, and egg
products; (4) applications of new technologies that will permit small and very small
Energy Efficiency
meat, poultry, and egg product establishments to produce safer products; and (5)
Program enhancement of laboratory testing capability of the Food Emergency Response
Network for microbiological threat agents. 70 Fed. Reg. 20517 (April 20, 2005).

GENETICALLY MODIFIED ORGANISMS. The APHIS has adopted as final regu-
lations that require permits for the introduction of plants genetically engineered for
the production of compounds for industrial use. 70 Fed. Reg. 23009 (May 4, 2005).
Cont. on page 2


of the farming operation. Id. at § 1004, 119 Major Developments in Chapter 12 Bankruptcy, provides specific rules for how this obliga-
Stat. at 186. 16 Agricultural Law Digest 57 (Apr. 22, tion can be modified, providing that modi-
Third, the income requirement that pro- 2005). This provision took effect on the fication can only apply prospectively, i.e.,
vided that fifty percent of income from the date of the enactment, but will not apply it cannot increase the amount of pay-
preceding taxable year must come from with respect to cases commenced before ments that were due prior to the date of
farming is expanded to allow for a consid- that date. Id. at § 1003(c), 119 Stat. at 186. the order modifying the plan. Unless the
eration of either the taxable year preced- debtor proposes modification, an increase
ing the bankruptcy or each of the second The retroactive assessment of disposable may not require payments to unsecured
and third years preceding. Id. at § 1005, 119 income is prohibited. In the past, courts creditors in any particular month that are
Stat. at 186-87. have interpreted the Chapter 12 “pro- greater than the debtor’s disposable in-
Fourth, family fisherman are defined jected disposable income” requirement come for that month. And, a modification
and afforded Chapter 12 eligibility, sub- as allowing an unsecured creditor or the of the plan in the last year of the plan
ject generally to the pre-reform income trustee to object to discharge on the cannot require payments that would leave
and debt standards. Id. at § 1007, 119 Stat. grounds that all “actual” disposable in- the debtor with “insufficient funds to carry
at 187-88. Although maximum aggregate come had not been paid to unsecured on the farming operation after the plan is
debts are set at $1,500,000.00, this amount creditors, even though the projected completed.” Id. at § 1006, 119 Stat. at 187.
will be indexed. Id. at § 1202, 119 Stat. at 193. amount was paid. See, e.g., Rowley v. Yarnall, Summaries of the overall bankruptcy
22 F.3d 190 (8th Cir. 1994). This objection reform bill are available on the American
Priority of certain tax obligations modi- forced farm debtors to go back and ac- Bankruptcy Institute website, http://
fied. Under the new law, claims owed to count for all income and expenses through- and from Congress
any government unit as a result the dispo- out the plan term, running the risk of being at its Thomas website, http://
sition of a farm asset may no longer be assessed a final amount due in order to Careful analysis of the
afforded § 507 priority. Provided that the receive a discharge. Moreover, it fre- entire bill will be required in order to deter-
debtor receives a discharge, these claims quently prohibited farmers from having mine how the general provisions such as
can be treated as unsecured debt. Id. at § liquid assets remaining that could be car- means testing, homestead exemption limi-
1003, 119 Stat. at 186.; see, Neil E. Harl, ried over to keep the farm operating after tations and required credit counseling will
Joseph E. Peiffer, and Roger McEowen, discharge. apply in the context of farm bankruptcy.
Section 1006 of the new law, “Prohibition —Susan A. Schneider, Assoc. Prof. and
of retroactive assessment of disposable Director, Graduate Program in
income,” reaffirms the requirement that a Agricultural Law,
Chapter 12 plan can be confirmed based University of Arkansas School of Law
on “projected” disposable income. It then

Federal Register/Cont. from page 1
VOL. 22, NO. 5, WHOLE NO. 258 April 2005
AALA Editor..........................Linda Grim McCormick ORGANIC FOODS. The USDA has TOBACCO. The CCC has adopted as
announced that six positions are open on final regulations governing the Tobacco
2816 C.R. 163, Alvin, TX 77511
Phone: (281) 388-0155
the National Organic Standards Board Transition Payment Program enacted by
E-mail: (NOSB): organic producer (2 positions), Title VI of the American Jobs Creation Act
consumer/public interest (3 positions), and of 2004, ending the tobacco marketing
Contributing Editors: Roger A. McEowen, Ames, IA; Robert
Achenbach, Eugene, OR; David Cook, Rochester, NY; USDA accredited certifying agent (1 posi- quota and price support loan programs.
Matthew Cole, Rochester, NY; Curt Gooch, Ithaca, NY; tion). The Secretary will make the appoint- The TTPP will provide payments over a
Karl Czymmek, Ithaca, NY; Phillip B.C. Jones, Spokane,
WA; Susan A. Schneider, Fayetteville, AR. ments for the 5-year terms. Nominations ten-year period to quota holders and pro-
should be sent to Ms. Katherine E. Benham, ducers of quota tobacco to help them
For AALA membership information, contact Robert
Achenbach, Interim Executive Director, AALA, P.O. Box
Advisory Board Specialist, USDA-AMS- make the transition from the federally-
2025, Eugene, OR 97405. Phone 541-485-1090. E-mail TMP-NOP, 1400 Independence Avenue, regulated program. The final regulations SW., Room 4008-So., Ag Stop 0268, Wash- also remove obsolete tobacco program
Agricultural Law Update is published by the American ington, D.C. 20250. 70 Fed. Reg. 20346 (April provisions at 7 CFR parts 723 and 1464. 70
Agricultural Law Association, Publication office: County 19, 2005). Fed. Reg. 17149 (April 4, 2005).
Line Printing, Inc. 6292 NE 14th St, Des Moines, IA 50313.
All rights reserved. First class postage paid at Des Moines,
This publication is designed to provide accurate and
FCIC, through the Risk Management sued interim regulations which change
authoritative information in regard to the subject matter Agency, has announced the availability of the designation of California from modi-
covered. It is sold with the understanding that the approximately $5 million in fiscal year fied accredited advance to accredited free
publisher is not engaged in rendering legal, accounting, or
other professional service. If legal advice or other expert 2005 for collaborative outreach and assis- under the cattle and bison tuberculosis
assistance is required, the services of a competent tance programs for women, limited re- regulations. 70 Fed. Reg. 19877 (April 15,
professional should be sought.
source, socially disadvantaged and other 2005).
Views expressed herein are those of the individual traditionally under-served farmers and
authors and should not be interpreted as statements of
policy by the American Agricultural Law Association.
ranchers, who produce priority commodi- WITHHOLDING TAXES. The IRS has
ties. 70 Fed. Reg. 23963 (May 6, 2005). issued proposed regulations that provide
Letters and editorial contributions are welcome and The FCIC, through the Risk Manage- guidance for employers and employees
should be directed to Linda Grim McCormick, Editor, 2816
C.R. 163, Alvin, TX 77511. ment Agency, has announced the avail- with regard to Form W-4, Employee’s
ability of approximately $4 million in fiscal Withholding Allowance Certificate. Guid-
Copyright 2005 by American Agricultural Law
Association. No part of this newsletter may be reproduced year 2005 for Risk Management Research ance is provided concerning the submis-
or transmitted in any form or by any means, electronic or Partnerships for the development of non- sion of copies of certain withholding ex-
mechanical, including photocopying, recording, or by any
information storage or retrieval system, without permission
insurance risk management tools that can emption certificates to the IRS, IRS notifi-
in writing from the publisher. be utilized by agricultural producers to cation to employers and employees of the
assist them in mitigating the risks inherent maximum number of withholding exemp-
in agricultural production. 70 Fed. Reg. tions permitted and the use of substitute
23969 (May 6, 2005). Cont. on p. 6

Recreational use statutes and E. coli contamination
In Kautz v. Ozaukee County Agricultural So- because the injury was caused from the viewed past cases where plaintiffs had
ciety, 688 N.W.2d 771 (Wis. Ct. App. 2004), condition of the lawn equipment and not a recreational and nonrecreational pur-
the plaintiff was a two year old child who condition of the land. The plaintiff argued poses for being on the property and noted
accompanied parents to a county fair or- that the term “property” in the statute that where a recreational use was made of
ganized and operated by the defendant. referred only to the real property and not the property, even though the main pur-
While at the fair, the plaintiff spent much to movable property such as the lawn pose was nonrecreational, the recreation
of the time in a backpack carried by the tractors. use statute applied to injuries sustained
parent. However, when the parent visited The court held that the recreational use during the recreational use. The court
the lawn tractor displays, the plaintiff was statute did apply to the cause of action held that, because the plaintiff child made
allowed to climb on the tractors. The because the focus of the negligence claim use of the recreational aspects of the
parent was an employee of a manufac- was on the defendant’s improper control county fair, the injuries suffered were
turer of lawn tractors and was visiting the of animal waste on the property and not excepted from liability of the defendant by
fair, in part, to see what products were the negligent handling of the lawn trac- the recreational use statute. The court
being offered by competitors. After visit- tors. went so far as to state “As long as one of
ing the tractors, the plaintiff had an ice The plaintiff also argued that the recre- the purposes for engaging in the activity
cream cone, although the parent wiped ational use statute did not apply because is recreation, as it concededly was here,
the child’s hands before the child ate the the parent’s main purpose in visiting the the statute attaches and bars their claim.”
ice cream cone. The plaintiff suffered E. fair was not recreational but was related —Roger A. McEowen, reprinted by
coli poisoning and was hospitalized. to the parent’s business. The court re- permission from 16 Agric. L. Dig. 22 (2005).
The plaintiff, through, the parent, sued
the defendant for failure to control the
animal waste at the fair, which the plaintiff
claimed was carried to the lawn tractors GAO sees deficiencies in efforts to guard
by employees and other fair attendees
from the animal barns. The defendant agriculture from terrorism
pled immunity from the suit under the In October 1999, Dr. Floyd P. Horn, Admin- Office finds that these efforts fall short.
Wisconsin Recreational Use statute, Wis. istrator of the U.S. Department of
Stat. § 895.52. The plaintiff argued that the Agriculture’s Agricultural Research Ser- Reshaping government agencies to
recreational use statute did not apply vice warned a U.S. Senate subcommittee protect against agroterrorism
about the vulnerability of American agri- The legislative and executive branches
culture in a terrorist attack. Other experts have altered the roles of federal agencies
Drake to Offer Summer Ag Law have also emphasized the susceptibility with the objective of protecting U.S. agri-
Institute Classes of agriculture to a deliberate introduction culture from assault. The Homeland Secu-
of animal and plant pathogens at the farm rity Act of 2002 established the Depart-
The Agricultural Law Center at Drake level. Natural barriers that could slow ment of Homeland Security and charged
is offering five summer courses which pathogenic dissemination have been the department with coordinating efforts
are available for attorneys to take as thwarted by the concentrated and inten- to guard against agroterrorism. The Act
CLE credit. Topics to be covered in- sive nature of modern farming practices also transferred most of the USDA’s re-
clude the new Bankruptcy Reform Act with highly genetically homogeneous live- sponsibility for conducting agricultural
as applied to farmers, rural develop- stock and crops. import inspections to DHS. In this way, the
ment, food traceability, and tax and Livestock offer an especially attractive DHS should have the capability to recog-
estate planning for farmers. The target. Terrorists can pick an economi- nize and prevent the entry of organisms
courses, instructors and dates for this cally valuable livestock, match the target that might be exploited for agroterrorism.
year’s institute are: against a published list of diseases, and Along with this shift of responsibility for
select the most accessible pathogen. Many preventing the introduction of plant or
Estate Planning for Farmers - Prof. Roger of these organisms are endemic outside animal diseases, the DHS acquired the
McEowen, Iowa State, May 16 - 20 the United States and can be isolated from USDA’s authority to inspect cargo mani-
Taxation of Agricultural Businesses (Law common materials with very little train- fests, international passengers, baggage
422), Prof. Jim Monroe, Drake - June 6 ing. And unlike the weapons of and cargo, and to hold suspect articles for
- 9th bioterrorism, lethal and highly contagious quarantine. The DHS also obtained most
Agricultural Bankruptcy, Prof Susan A. biological agents that affect animals usu- of the USDA’s Plant Protection and Quar-
Schneider, Graduate Program in Agri- ally do not harm humans. antine Unit inspectors.
cultural Law, Univ. of Arkansas - June In fact, experts suggest that the The Bioterrorism Act of 2002 expanded
13 - 160 economy, not human health, would expe- the duties of the USDA and the Depart-
Law and Rural Development, Prof. Neil D. rience the greatest impact of an ment of Health and Human Services for
Hamilton, Drake July 11 - 14 agroterrorism attack. An assault on agri- ensuring agriculture security. The depart-
Traceability of Food and Agricultural Prod- culture would cause direct losses from ments gained responsibility for requiring
ucts, Prof. Michael Roberts, National containment measures and eradication companies, laboratories, and other enti-
Center for Agricultural Law, Univ. of of diseased animals, compensation paid ties to register materials that could pose
Arkansas, July 18 - 21 to farmers for destruction of agricultural a threat to agriculture and human health.
commodities, and a decrease in interna- The Act also required the USDA and HHS
The tuition for CLE credits (each semi- tional trade as export partners impose to develop an inventory of potentially
nar is 14 hours) is $400. To register protective embargoes. dangerous agents and toxins that cause
please contact Prof. Neil Hamilton at Following years of warning punctuated animal, plant, or human diseases. Indi- For more in- by the September 11 terrorist attacks, the viduals who possess or use these materi-
formation about the courses please federal government has attempted to se- als must register with the Secretary of
visit the Drake web site at cure U.S. agriculture. Yet in its March 2005 Agriculture or HHS and submit to a back- report, the Government Accountability Cont. on page 7

An overview of United States Environmental Protection Agency air quality
consent agreement for animal feeding operations
By David L. Cook, Matthew A. Cole, Curt
Gooch, and Karl Czymmek

An earlier version of the article below was not be the subject of environmental en- pollutants. 42 U.S.C.S. §§ 7401 et seq. (2005).
prepared to assist dairy farmer members of the forcement actions by the Federal Govern- The CAA requires that producers ob-
Northeast Dairy Producers Association ment for certain violations of existing laws tain operating permits if emissions from
(NEDPA) evaluate potential participation in protecting the environment. In return, the their farms are greater than specified
EPA’s Air Quality Consent Agreement for Agreement requires that participating limits based on the overall air quality in
Animal Feeding Operations. EPA announced producers pay a civil penalty and contrib- their region. Title I, 42 U.S.C.S. §§ 7401 et
an extension of the public comment period to ute a share toward funding an air emis- seq. (2005); Title V, 42 U.S.C.S. §§ 7661 et seq.
May 1, 2005 and sign-up to July 1, 2005. The sions monitoring study. Participating pro- (2005). Penalties apply to producers who
authors thank NEDPA for permission to share ducers must also be willing to allow col- fail to obtain permits when required to do
this document with AALA members. laborating scientists to use their farm site so. 42 U.S.C.S. § 7413 (2005).
for measuring emissions, if selected. The Agreement offers protection from
In 2003, the National Academy of Sciences fines for current and past violations of
indicated that there is insufficient data to Benefits to dairy producers from CAA permitting requirements, as de-
determine whether air emissions from participation in the agreement scribed above.
dairy and livestock farms require compli- Dairy producers will have the opportu-
ance with the Clean Air Act (“CAA”), the nity for input in the collection of accurate Comprehensive Environmental Re-
Comprehensive Environmental Re- emissions data from farms, and the devel- sponse, Compensation, and Liability Act -
sponse, Compensation and Liability Act opment of regulatory requirements to CERCLA, also known as Superfund, pro-
(“CERCLA”) or the Emergency Planning help producers comply with applicable vides the Federal government with the
and Community Right-to-Know Act environmental laws. Without the agree- power to deal with actual or threatened
(“EPCRA”). Therefore the United States ment, data could be obtained and used releases of hazardous substances.
Environmental Protection Agency (“EPA”) with little or no input from the dairy indus- CERCLA provides for the clean up of haz-
plans to develop methods for estimating try. Partnering with EPA provides an op- ardous waste sites and for the liability of
the emissions of certain regulated air portunity to acquire meaningful and sound those responsible for releases of hazard-
pollutants from dairy and livestock farms. data resulting in a regulatory framework ous substances. 42 U.S.C.S. §§ 9601 et seq.
EPA seeks to partner with animal agricul- that is potentially more reflective of the (2005). Releases of hazardous substances
ture to obtain accurate data so that sound, needs of the dairy industry. can occur as either emergencies (i.e. a
consistent methods to estimate the emis- By signing the Agreement, EPA will pro- tank failure) or on a continuous basis. A
sions from various sources found on farms vide a “covenant not to sue” to producers continuous release would be considered a
can be employed. EPA wants to develop who may have unknowingly violated clean regular and steady rate of emission from
Emission Estimating Methodologies air laws. This covenant not to sue covers a barn or manure storage. CERCLA re-
(“EEMs”) to help both farmers and EPA past emissions and will run through the quires a producer to immediately notify
make sure that farms are meeting exist- period of the Agreement. Therefore un- the National Response Center when the
ing air pollution control laws. knowing violations of the laws discussed producer knows that more than 100 pounds
The Air Quality Consent Agreement below which occurred before a dairy pro- of ammonia or hydrogen sulfide has been
(“Agreement”) is one mechanism by which ducer signed the Agreement will not sub- released from their farm within any 24-
EPA can obtain the necessary data to ject that dairy producer to fines. While hour period. 42 U.S.C.S. § 9603 (2005); 40
develop the EEMs. The Agreement prom- data collection efforts undertaken without C.F.R. 302.4 (2005).
ises participating producers that they will the protections of the Agreement may CERCLA also provides for high penal-
assist dairy producers in their efforts to ties if a producer fails to meet the notifica-
comply with the environmental laws in the tion requirements. The penalties are
future, such efforts will not offer any pro- $25,000 or $75,000 per violation depending
David Cook, Esq is a Partner with Nixon Peabody tection for past violations discovered by on whether the producer has failed to
LLP in Rochester NY and practices in the areas EPA after the EEM’s are published. The report violations in the past. 42 U.S.C.S. §
of business and environmental litigation and Agreement provides the following pro- 9609 (2005). Also, the fines can be cumula-
real estate. He is counsel to the Northeast Dairy tections to participating producers: tive for each day that a producer fails to
Producers Association and has represented sev- report the release. Id. The Agreement
eral dairies in environmental compliance mat- Clean Air Act - The CAA was developed offers protection from fines for current
ters. to improve the nation’s air quality be- and past violations of the CERCLA haz-
cause of increasing concerns about ozone ardous substance release notification re-
Matthew Cole, Esq is an associate with Nixon deterioration, acid rain, smog, and the quirements for emissions of ammonia
Peabody LLP in Rochester, NY and practices in release of large quantities of hazardous (NH3) and hydrogen sulfide (H2S) from
the areas of energy and environmental law. substances into the air. Under the CAA animal agricultural barns and waste stor-
state governments and the federal gov- age.
Curt Gooch, PE, is a dairy facilities and waste ernment work together to protect public
management engineer with the PRO-DAIRY health, welfare, and property from harm Emergency Planning and Community
Program at Cornell University, Ithaca, NY. that can be caused by air pollution. The Right-To-Know Act - EPCRA addresses
CAA provides permitting requirements the environmental and safety hazards
Karl Czymmek, JD, is a non-practicing attorney that establish limits on the release of regu- that arise from the storage and handling
and serves as a nutrient management and CAFO lated air pollutants, require monitoring of of toxic chemicals. EPCRA is designed to
specialist with the PRO-DAIRY Program at the releases of those pollutants, and re- increase the public knowledge and access
Cornell University, Ithaca, NY. quire the reduction of releases of those to information regarding toxic chemicals

and to protect fire fighters, police officers, quirements or CERCLA or EPCRA report- an acknowledgment of wrongdoing. The
and emergency medical technicians that ing requirements. This certification must civil penalty provisions are included in the
respond to emergencies at facilities that occur within 60 days after EPA has pub- Agreement to provide a legal resolution
store toxic chemicals on-site. EPCRA’s lished the applicable Emission Estimating between producers and EPA for possible
four major provisions address emergency Methodologies. The certification will not past violations of the CAA, CERCLA, and
planning, emergency release notifica- be required, at a minimum, for approxi- EPCRA and allow the Agreement’s pro-
tions, hazardous chemical storage report- mately three and one half years, or some- tections to take effect.
ing, and a toxic chemical release inven- time during 2008. When a producer is completing Attach-
tory. EPCRA requires that producers im- Producers whose farms have emissions ment A of the Agreement, if two farms are
mediately notify the state and local emer- in excess of the thresholds stated under on contiguous property then the farms
gency planning bodies for the areas or the Clean Air Act must also apply for and should be listed as one farm. Any farms
states likely to be affected if their farm obtain applicable CAA permits, and if owned by a producer that are on non-
emits more than 100 pounds of ammonia appropriate install Best Available Control contiguous parcels should be treated sepa-
or hydrogen sulfide within a 24-hour pe- Technology (“BACT”) in an attainment rately when completing Attachment A of
riod. 42 U.S.C.S. § 11004(a)(1) (2005); 40 area (locations where air quality is good) the Agreement.
C.F.R. 302.4 (2005). EPCRA requires this or technology meeting the Lowest Achiev-
communication so the local community is able Emission Rate (“LAER”) in a non- The amount of the assessed civil pen-
properly notified if a release of ammonia attainment area (locations where air qual- alty can be calculated using the following
or hydrogen sulfide occurs. ity is not good, typically around large guide:
EPCRA provides for penalties of $25,000 metropolitan areas). BACT and LAER are $200 – If 1 Farm < 700 cows or 1,000
for a first violation of the laws require- general categories for air emission miti- heifers.
ments and the penalty can be cumulative gation techniques. The appropriate tech- $500 per farm - If 1 Farm > 700 cows or
for each day that the violation continues. nique, if available, must be installed within 1,000 heifers, but < 7,000 cows or 10,000
42 U.S.C.S. § 11045(b) (2005). For a second 120 days after EPA has published appli- heifers or , if multiple farms < 7000 cows or
or subsequent violation the penalty can cable EEMs. 10,000 heifers.
be $75,000 which can also be cumulative Additionally, all producers must report $1,000 per farm – If 1+ Farm > 7000 cows
for each day that the violation continues. all releases of hydrogen sulfide and am- or 10,000 heifers.
Id. The Agreement offers protection from monia that trigger the reporting require-
fines for current and past violations of ments of CERCLA or EPCRA. The report The assessed civil penalty will be due
EPCRA emergency notification require- must be made within 120 days after EPA 30-days after the producer receives an
ments to report emissions of ammonia publishes applicable EEMs. executed copy of the agreement back
and hydrogen sulfide caused by agricul- EPA’s covenants not to sue under the from EPA. EPA will not sign the Agree-
tural wastes. Agreement covers past violations for in- ment if they find that dairy industry par-
dividual emission units and violations that ticipation is insufficient based on the funds
Additional requirements to maintain occur before the producer either submits needed to support an adequate monitor-
applicability of EPA covenants not to sue the last required certification for an emis- ing program. Dairy industry representa-
If a dairy producer’s operation qualifies sion unit, or two years after the producer tives will need to work with scientists in-
as 10 times the large CAFO threshold (the submits any required permit applications. volved in the National Air Emissions Moni-
operation houses more than 7,000 dairy The covenants not to sue end on the ear- toring Study (NAEMS) to design the moni-
cows or 10,000 dairy heifers), then within lier of the two dates. The period of protec- toring program and a producer commit-
120 days from receiving an executed copy tion from the covenants not to sue could tee under the auspices of the National Milk
of the Agreement back from EPA that last as long as eight years. The Producers Federation has been formed to
producer must send written notice to the Agreement’s protection from fines for explore this issue.
National Response Center that they raise unknowing violations due to past emis- In addition to paying a civil penalty,
cows that may generate ammonia in quan- sions should be a powerful incentive to participating producers are also required
tities above 100 pounds in a 24-hour pe- enter the Agreement for those dairy pro- to contribute to the monitoring study fund.
riod. The written notice must also contain ducers that believe the collection of emis- Funds will be paid by each producer who
a rough estimate of the releases, acknowl- sions data will lead to increased scrutiny signs the Agreement. Alternatively, it is
edge participation in the monitoring study, of emissions from their farms. It is impor- possible for other sponsor(s) to contribute
and indicate the producer’s intent to com- tant to remember that without the protec- all or some of the monitoring study fund
ply with release notification requirements tions of the Agreement, any data col- although, thus far, no alternative sponsor-
at the end of the study. The same notifica- lected could be used in actions against ship has been confirmed. Also the funds
tion must also be provided to relevant dairy operations for past emissions, even for the monitoring study will be delivered
state and local emergency response au- when those operations comply going for- to an as yet unidentified US dairy industry
thorities. ward. entity and not to EPA. This entity will collect
At the end of the study and after the the money and turn it over to a non-profit
EEMs are published by EPA, participating Requirements for producer participation board that has been set up to administer
producers must use the EEMs and certify Participating producers must pay a civil the NAEMS effort on behalf of animal
to EPA that they are not subject to the penalty based on the number of farms agriculture. The monitoring study fund
requirements of the applicable environ- that they list on Attachment A of the Agree- will provide the money necessary for in-
mental laws if emissions from their farms ment. Even though producers must pay a dependent scientists to collect data from
have not triggered CAA permitting re- civil penalty, signing the Agreement is not dairy farms around the country. The data
Cont. on p. 6

Air quality consent agreement/Cont. from p. 5
collected will be provided to EPA for their does not have the authority to prevent even without good data from which to
use to create the EEMs. Producers and/or members of the community from filing estimate emissions, and some of these
the industry share financial responsibility citizen suits. farms have been forced to gather data at
to assure that the study is sufficiently Also, dairy producers should be aware their own substantial expense. EPA has
funded. that signing the Agreement only protects indicated that if dairy producers choose
Because the emissions from farms vary participants from enforcement actions for not to participate in the Agreement, then
from region to region, the data collection civil violations of the environmental laws, they will develop EEMs based on current
should take place in several areas of the it does not protect a participating pro- data, emission data collected from other
country. If the dairy industry decides ducer from conduct considered criminal. animal species, and/or by forcing indi-
against participation in the Agreement, For example, criminal penalties can apply vidual dairy operations to monitor emis-
EPA has indicated that EEMs will still be if producers are aware of a release that sions at their own cost. None of these
established for dairy source emissions must be reported and do not report or that options are good for the dairy industry.
based on the limited existing data, studies their farms do not comply with applicable Even though there continues to be con-
from other animal industries, or by acquir- permitting requirements and do not ob- cerns with the Agreement, the NEDPA
ing data through other means. If a pro- tain the necessary permits. Board of Directors has endorsed partici-
ducer signs the Agreement, that producer Additionally, even though EPA is offer- pation by individual farmers as a way for
is bound to participate in the study and ing limited covenants not to sue, it re- the dairy industry to proactively address
contribute to the study fund, so long as serves the right to pursue legal action environmental concerns of sustainable
EPA also signs the Agreement. against farms that are believed to be farming operations.
The amount that each producer must imminently and substantially endanger- Participation in the agreement should
contribute to the monitoring fund is based ing human health, human welfare, or the be viewed as a type of insurance policy or
on the number of farms that the producer environment. Furthermore, while signing as peace of mind during the duration of the
lists on Attachment A of the Agreement the Agreement protects participants from Agreement. This is especially true for
and the number of farms of the same enforcement of federal environmental large farms that could be targeted by EPA
species that participate in the study. The laws it does not prevent a state from for enforcement actions to prove to envi-
actual amount each producer will be re- bringing an action for the violation of state ronmental groups that they are serious
quired to contribute per farm will not be environmental laws. about the problem of emissions from ani-
known until sometime after the sign up Beyond the above requirements, pro- mal feeding operations. The foregoing is
period closes, now set for July 1, 2005. A ducers must also comply with the proto- not intended as an exhaustive analysis of
producer cannot be required to contribute cols used or the data developed during the the Agreement. All producers are en-
more than $2,500 to the study for each monitoring study. Challenging the proto- couraged to thoroughly review the Agree-
farm listed on Attachment A of the Agree- cols will result in a loss of protection from ment. If producers have individual ques-
ment. suit. tions regarding participation they should
EPA has indicated that before the Agree- It is important to note that it is possible seek competent legal counsel. Copies of
ment becomes effective and the study that even if EPA signs the Agreement that the Agreement and other supporting in-
takes place certain minimum require- EEMs for certain types of sources will not formation can be obtained at http://
ments should be met. EPA will enter into be able to be developed.
the Agreement if sufficient farms are Finally, dairy producers should be cau- agreements/caa/cafo-agr-0501.html. Pro-
monitored; discussions have centered tioned that a significant addition to a farm ducers have until July 1, 2005 to make a
around at least one farm each in the North- after entering the Agreement could trig- decision on the Agreement and file the
east, Mid-west, West, and South. Many ger permitting requirements. The CAA appropriate paperwork with EPA. Materi-
producers and organizations are justifi- requires specific permits if the level of air als relating to the Agreement including a
ably concerned that enough farms are emissions from a farm exceed the thresh- timeline and flow chart for implementa-
monitored to provide scientifically sound olds. If an increase in the size of a farm tion can be found at
data. EPA indicates that additional farms after entering the Agreement causes that –click
can be monitored at the discretion and farm’s total air emissions to trigger per- on “air emissions.”
financial support of the dairy industry to mitting requirements, the Agreement’s
improve the completeness of the EEMs. covenants not to sue will not cover pro- Federal Register/Cont. from p. 2
A few participating producers will be ducers who fail to obtain a permit for the forms. The proposed regulations also pro-
required to allow the study to take place on addition. While this does not mean that a vide that, if the IRS determines that a
their farms. Producers will be required to producer cannot increase the size of their withholding exemption certificate contains
allow the scientists carrying out the study farm at all, it does mean that producers a materially incorrect statement or if an
to enter their premises to decide whether should obtain the necessary permits if an employee fails to provide an adequate
that farm would be a good representative expansion will cause emissions from their response to a request for verification of
of other farms in the region. It is antici- farm to exceed permitting requirements. the statements on a certificate, the IRS
pated that the selection of farms will be a There are no good estimates, at this time, may issue a notice to the employer that
cooperative effort between the farm op- of the size of an expansion that would specifies the maximum number of with-
erator, local dairy industry leaders, the trigger these requirements and it may be holding exemptions the employee may
Principal Investigator and Project Direc- useful to work with state agencies to clarify claim. Employees who want to claim com-
tor. the issue. plete exemption from withholding or a
number of withholding exemptions more
Important additional considerations Summary and conclusion than the maximum specified by the IRS
In addition to the threat of enforcement EPA has indicated its need to regulate must submit new withholding exemption
action dairy producers are also likely con- animal agriculture air emissions; how- certificates and written statements sup-
cerned with the threat of citizen suits. ever there is little data available for pro- porting their claims directly to the IRS.
While signing the Agreement may pre- ducers to determine if they need to com- T.D. 9196, 70 Fed. Reg. 19694 (April 14, 2005)
vent the ultimate success of a citizen suit ply with existing laws and for EPA to en-
against a participating producer, it will not force those laws. Lawsuits against swine KARNAL BUNT. The APHIS has
prevent a citizen suit from being filed. EPA and poultry operations have proceeded Continued on page 7

Agroterrorism/cont. from page 3 Glitches in the system the U.S. Customs and Border Protection
ground check performed by the U.S. At- According to the GAO, the United States service, as well as a lack of clarity about
torney General. still faces complex challenges that limit responsibilities shared by the USDA and
The Bioterrorism Act of 2002 further the ability to quickly and effectively re- Customs at U.S. ports.
authorized the USDA to conduct and sup- spond to a widespread attack on livestock The GAO’s report suggests many
port research into the development of an and poultry. One deficiency lies in the changes that federal agencies could imple-
agricultural bioterrorism early warning capability to detect such an attack. Many ment to address its concerns. However,
system. Such a network would enhance U.S. veterinarians lack the training re- the organization highlights two recom-
coordination between state veterinary quired to recognize the signs of foreign mendations: the USDA should examine
diagnostic laboratories, federal and state animal diseases. Current regulations do the costs and benefits of developing stock-
agricultural facilities, and public health not even require training in foreign animal piles of ready-to-use vaccines, and the
agencies. To support these efforts, the disease for those most likely to be called DHS and the USDA should investigate the
USDA has the authority to coordinate with upon if livestock were attacked: USDA- reasons for declining agricultural inspec-
the intelligence community for evaluating accredited veterinarians. The USDA has tions.
information about potential threats to U.S. been considering a rule that would compel
agriculture. training in foreign animal diseases for Reinvention, not reshaping
The President issued four directives accreditation, but the proposed require- Experts have voiced an overarching
that further define agencies’ responsibili- ment has been residing on a back burner concern about the current system for
ties in protecting agriculture. The direc- for several years. ensuring the security of agriculture and
tive most relevant to agriculture, Home- The GAO also expressed concern that the food supply—the dispersion of re-
land Security Presidential Directive the USDA uses diagnostic tests to charac- sponsibility among the many federal and
(HSPD)-9, establishes a national policy for terize an outbreak at selected laborato- local organizations. This diffuse structure
defending the country’s agriculture and ries, not at the site of the outbreak. Experts breeds the types of communications prob-
food system against terrorist attacks and consider on-site testing critical for speed- lems that the GAO discovered among
major disasters. Under the Directive, DHS ing diagnosis, containing the disease, and federal agencies and between the federal
serves as the lead agency responsible for minimizing the number of animals that and state governments.
ensuring the adequacy of federal, state, must be slaughtered. In 2004, Peter Chalk of the Rand Corpo-
and local authorities in responding quickly HSPD-9 requires federal and state agen- ration advised that safety measures
to a terrorist attack. HSPD-9 also com- cies to develop a National Veterinary Stock- should be standardized and streamlined
mands the DHS to oversee a national pile that contains sufficient amounts of within the framework of an integrated
biological surveillance system that will animal vaccines and other therapeutic strategy that cuts across the responsibili-
help to differentiate between natural and products for responding to the most dam- ties and capabilities of federal, state, and
intentional outbreaks. The Directive tasks aging animal diseases affecting human local agencies. “Integration of agriculture
the USDA and HHS with developing se- health and the economy. And the Direc- and food safety measures,” he wrote,
cure laboratories to enhance diagnostic tive demands that these therapeutics “would also serve to reduce jurisdictional
capabilities for foreign animal and zoonotic should be available within 24 hours of an conflicts and eliminate unnecessary du-
diseases. If an agroterrorism attack outbreak. Yet the GAO found that vaccine plication of effort.”
should occur, then the DHS, USDA, HHS, supplies are limited; the USDA usually
and Environmental Protection Agency prefers to immediately slaughter diseased Selected Sources
share responsibility for decontamination animals rather than vaccinate. The agency Chalk P. (2002) Hitting America’s soft un-
and stabilization of agricultural produc- maintains vaccines for only one foreign derbelly: The potential threat of deliberate bio-
tion. animal infection: foot and mouth disease. logical attacks against the U.S. agricultural
Federal agencies have responded to Even these vaccines cannot be rapidly and food industry. Rand National Defense
this surge of responsibility and shifting deployed, because they first need to be Research Institute
authority. The FDA and USDA have been sent to the United Kingdom for bottling Edmonson RG (2005) What’s bugging ag
conducting vulnerability assessments to and testing. inspectors. Journal of Commerce, page 44
identify agricultural products most sus- The GAO also uncovered several man- (February 14, 2005)
ceptible to terrorist attacks. The USDA agement problems that reduce the effec- GAO (2005) Homeland security: Much is
and HHS have been forming laboratory tiveness of routine efforts to protect being done to protect agriculture from a
networks to enhance diagnostic and moni- against agroterrorism. Following the terrorist attack, but important challenges
toring capability. The USDA has estab- transfer of most USDA agricultural in- remain. March 8, 2005. Available at: http:/
lished a committee to guide the develop- spectors to DHS, agricultural inspections /
ment of a National Veterinary Stockpile. at ports of entry decreased, even though Segarra AE (2002) Agroterrorism: Op-
And the USDA created sixteen Area and imports increased. DHS points to a large tions in Congress. Congressional Re-
Regional Emergency Coordinator posi- number of unfilled vacancies for agricul- search Service. July 17, 2002. Avaialble at:
tions to help states develop individual tural inspectors, and plans to hire more
emergency response plans. than 500 inspectors by fiscal year 2006. —Phillip B.C. Jones, Spokane, WA.
The GAO found serious shortcomings Others have noted difficulties faced by Reprinted by permission from the May 2005
in these efforts. former APHIS inspectors in the culture of ISB News Report, pp. 10-11.

Federal Register/cont. from page 6 2000-2001 crop season. The interim regu- terim rule to indicate that affected parties
adopted as final regulations that amend lations had also amended the regulations may apply for compensation whenever
the Karnal bunt regulations to provide for to provide for the payment of compensa- disinfection was required by an inspector
the payment of compensation to custom tion to owners or lessees of other equip- and to extend the deadline by which claims
harvesters for losses they incurred due to ment that came into contact with karnal for compensation must have been sub-
the requirement that their equipment be bunt-positive host crops in those counties mitted. 70 Fed. Reg. 24297 (May 9, 2005).
cleaned and disinfected after four coun- and was required to be cleaned and disin- —Robert P. Achenbach, Jr., AALA
ties in northern Texas were declared regu- fected during the 2000-2001 crop season. Executive Director
lated areas for Karnal bunt during the These final regulations amend the in-

From the Executive Director:
Membership Directory. The printed 2005 Membership directory has been sent to all members who had renewed their
memberships by April 15. Several renewals and corrections have since come in and I will revise the directory in late May
and put a PDF file of the revised directory on the AALA web site. Remember that the online directory is continually
updated and is available in the “members only” section of the web site. Send me an e-mail if you have forgotten your
username or password.
Annual Conference. President-elect Don Uchtmann is firming up the program for the 2005 Annual Agricultural Law
Symposium on October 7 and 8, 2005 at the Country Club Plaza Marriott in Kansas City, MO. As soon as the program is
substantially complete, I will post the information on the AALA web site. I am open to suggestions for tours or other
outside activities in the KC area. If your firm would like to sponsor one of the food breaks, breakfasts, lunches, or the
Friday evening reception, please let me know.
The AALA Board has chsen Savannah, GA as the location for the 2006 Symposium on October 13-14, 2006. This historic
city will make a splendid environment for the seminars and a great place to bring the family.
Nominations for Annual Scholarship Awards. The Scholarship Awards Committee is seeking nominations of articles by
professionals and students for consideration for the annual scholarship awards presented at the annual conference.
Please contact Jesse Richardson, Associate Professor, Urban Affairs and Planning, Virginia Tech, Blacksburg, VA 24061-
0113, (540) 231-7508 (phone) (540) 231-3367 (fax) email:

Robert Achenbach, AALA Executive Director
P.O. Box 2025
Eugene, OR 97402
Ph 541-485-1090 Fax 541-302-1958