Sod As Agriculture Preview

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Federal Recognition

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TURFGRASS SOD AS AGRICULTURE

HOW (AND WHY) FEDERAL AND STATE POLICY APPLIES FARM PROTECTIONS TO SOD PRODUCTION

Federal Recognition

Introduction Advocacy Considerations Judicial Interpretation

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Turfgrass Sod as a Crop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Federal Recognition

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Federal Farm Support Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Federal Transportation Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Federal Tax Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Federal Labor Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Chapter 12 (Farm) Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

State Statutory Definitions References

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Information presented in this guide with regard to legal rulings on turfgrass sod’s status as agriculture were gathered through a search of various federal, state, and local guidelines.

It is not intended to be presented as an exhaustive list and there may be additional instances in various legal rulings not presented in this text. If you have additional instances of legal rulings on turfgrass sod and would like them included in future revisions of this guide, please contact Dr. Casey Reynolds at creynolds@TurfgrassSod.org.

Advocacy Considerations Across the U.S. many states by legislation have defined agriculture

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with varying specificity to type of production. When generic, generalized production such as “crops,” “livestock,” “poultry,” and dairy,” are offered. When specified, often a longer list of products are listed following the catch-all “including.” In disputes between individuals and government regulators, or between individuals, courts are challenged to interpret the meaning of terms and phrases in statutes and administrative codes as binding expressions of public policy. When guided by definition of words expressed in the statute, the court’s matching of a particular activity to its broad category exemption or exclusion is simple. However, when a particular definition does not expressly include a target agricultural product, the court must look to the “intent” of the legislature to find an implication that the target commodity be included in the definition of “agriculture” or “farming.”

In a regulatory dispute, courts strive to discern the public policy intent of the legislature who drafted the statute which authorizes the regulation. The courts must decide if a certain type of business, land use or product belongs in a list – often beginning with “including”– of arguably similar items. When a statute or regulation specifically identifies a certain type of business, this is not difficult. Where statutes and their regulations are vague, a solid advocacy approach should focus on how sod/turfgrass production has all the characteristics of farming other agricultural products. As the 6th Circuit Court of Appeals1 stated in Barks v. Silver Bait, LLC (802 F.3d 856 [2015]), a case concerning worm farming in the agricultural labor context: “’Agriculture’” is an expansive concept, and “farming” is only marginally more precise. Dictionaries provide useful insight into their common usage.”

Definitions of agriculture and farming in dictionaries are helpful in expressing the “plain meaning” of a word or phrase because such definitions include the production components which apply to

Judicial Interpretation All federal and state courts follow what are known as “canons of

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construction” when reviewing statutes to discern “legislative intent,” which is paramount in applying the public exercise of policy through codified law.

One such cannon is the maxim expressio unius est exclusio alterius (“the inclusion of one thing implies the exclusion of another”) which courts apply to assist in determining actual legislative intent which is not otherwise manifest (i.e. where “sod” or “turfgrass” are not specifically mentioned). Where used, courts are quick to note that this maxim should not be employed to override or defeat a clearly contrary legislative intention. Under this rule, when legislative intent is in question, an appellate court may be persuaded to presume “the contrary legislative intent” to include sod is arguably found when it is not singled out for exclusion in statute or regulation. In other words, when the legislature expressly includes descriptive terms, it intends to exclude any items not expressly included in the descriptive list.

General terms defined by dictionary (above) should not be considered exclusionary but inclusive. In addition, such a rule should also be defeated by the term “including” next to a list of like items.

Generally, courts will only look past the language of a statute when the language in the statute is ambiguous.2 At that point, courts will generally allow consideration of the legislative history of the statute, and will exclude a particular item from inclusion in a statute only upon a finding that a particular item was discussed for exclusion in the legislative record (or rulemaking process). However, arguably the words “agriculture” and “horticulture” are not ambiguous terms as courts have stated. For example, as the Kansas Supreme Court stated: “the phrase ‘encouragement of agriculture and horticulture’ is composed of words of ordinary and approved usage, not technical in any sense; that it is not ambiguous, and therefore no resort should be had to any administrative construction that might have been placed upon it.”3

From time to time, courts must apply basic logic to the question of whether a farm element is personal property or real property. This question arises in various farm contexts – for example, for tax purposes classification of a greenhouse as a fixture to real property rather than a moveable item of personal property. Another example is when land is sold with growing (cultivated) sod, a court must determine whether the sod is normal growing grass (“fructus naturales”) and part of the realty, or whether a commercial product that may be severed and retained by the seller (“fructus industriales”). One court case provides illumination of the logic applied to the argument that sod is a crop and not a natural part of real estate.

In the Michigan case of Barron v. Edwards (45 Mich.App.210, 1973), a court of appeals noted the distinction between fructus naturales and fructus industrials: Apart from statutes or peculiar circumstances requiring a contrary conclusion, it is stated in many cases that those products of the earth which are annual, raised by yearly manurance and labor, and which owe their annual existence to cultivation by man, may be treated as personal chattels, for some purposes at least, even while still annexed to the soil and irrespective of their maturity. Conversely, and also in the absence of statutory provisions or peculiar circumstances requiring a contrary conclusion, fructus naturales — grasses growing from perennial roots and, according to some courts, the fruit or other products of trees, bushes, and plants growing from perennial roots — are regarded as realty while they are unsevered from the soil.” (Barron at 214)

The court concluded that, on the facts of the case (but consistent with all sod production): Here the sod owed its existence to yearly fertilizing and cultivation by man. It is also significant that plaintiff raised this sod on several prior occasions and apparently treated it as a commercial product. Thus, this sod cannot be considered “growing grass” as the plaintiff contends.

We therefore hold that the sod in the instant case was personalty.

Judicial Interpretation

Turfgrass Sod as a Crop

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Federal Recognition Article Six of the U.S. Constitution proclaims the legal authority

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granted to the federal government – by the words and phrases of that document –to be the “supreme law of the land.” However, the powers granted the federal government are by definition limited: states remain sovereign governments under our federalist system and have authority to regulate many matters concerning agriculture and land use.

Therefore, the federal government’s ability to proclaim the legal status of turfgrass sod as agriculture is limited to those matters in which it has authority to bind the states and chooses to do so. Indeed, Congress often uses its constitutional authority to pre-empt state action on various matters concerning agriculture when it so chooses. Examples include pesticide manufacture and labeling, many aspects of labor, and of course federal tax collection and interstate transportation.

That said, under a practical tradition called “cooperative federalism,” many federal statutes are handed off to the states to implement and enforce. In this scheme, states pass their own statutes and interpretative regulations on how to fulfill their role. Sometimes, the federal statute’s regulation will defer to state definitions on what constitutes agriculture or farming for protections offered by federal law. Where the state has not made a clear definition including turfgrass sod, the federal definition likely controls, and unless the federal law has specifically deferred to the state to determine the legal status of turfgrass sod, the federal determination should be controlling.

There are several legal contexts in which states have sole authority, primarily concerning land use, property taxation and state revenue collection. These are explored later in this document.

Following are several major areas of federal law impacting turfgrass production where federal statutory and regulatory definitions and administrative rulings apply farm protection policy to turfgrass sod production.

State Statutory Definitions State statutory law– the public policy expressed by elected state

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legislatures –is filled with various definitions of terms recognizable to the application of the particular policy. The terms “farming’ and “agriculture” are defined in several types of laws, ranging from sales tax exemptions, reduced property taxes, authorization for farmland preservation programs, and right-to-farm laws meant to defend against nuisance lawsuits. Invariably, one or more of these definitions of agriculture will include “sod” or “turf ” production. Often, state codes contain a title devoted to agricultural policy and regulations, to which a generic definition of agriculture is applicable throughout the statutory title. Such definitions expressed by these laws focus on production in farming, and sod – raised and harvested from land with the accoutrements of farm production –agricultural land, water use exemptions, farm equipment purchased through agricultural finance systems, and labor provided through agricultural exemptions and programs – fits alongside vegetable, grain and other crops traditionally seen as “farming.” Below is a survey of generic state definitions – organized by topic – and how they include turfgrass sod production in the definition of farming and agriculture.

References [1] The 6th Circuit Court of Appeals includes the states of Tennessee, Michigan, Ohio, Kentucky, as well as Puerto Rico and the U.S. Virgin Islands [2] See Bailey Nurseries, Inc. v. Comm’r of Revenue, 2002 Minn. Tax LEXIS 11 (2002) [3] State ex rel. Boynton v. Wheat Farming Co., 137 Kan. 697, 714 (1933) [4] See https://www.uscourts.gov/four-digit-national-associationnaics-codes.

[5] See https://www.naics.com/sic-codes-counts-division/?div=A 52

[6] See https://siccode.com/sic-code/0181/ornamental-floriculturenursery-products [7] See https://www.congress.gov/bill/115th-congress/house-bill/2 [8] See https://www.ams.usda.gov/content/usda-introduces-newnational-quarterly-sod-report [9] For example, see https://www.nass.usda.gov/Publications/ AgCensus/2017/index.php [10] See https://uscode.house.gov/view.xhtml?path=/prelim@title16/ chapter41&edition=prelim

References

[11] See https://www.federalregister.gov/ documents/2020/08/05/2020-17087/hours-of-service-of-driversturfgrass-producers-international-application-for-exemption [12] See https://www.federalregister.gov/ documents/2020/11/24/2020-25971/hours-of-service-of-driversdefinition-of-agricultural-commodity [13] See https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/docs/ Administrative_Ruling_119.pdf [14] NJ Department of Agriculture, Economic Development Strategies (2005). Available at https://www.nj.gov/agriculture/ conventions/2005/economicstrategies.pdf [15] See Bd. of Trs. v. Anderson, 2007-Ohio-1530 (firewood selling); Siebenthaler Co. v. Beavercreek Twp., 2009-Ohio-6595 (growth of plant material, landscaping services, and a retail garden-store business); Terry v. Sperry, 130 Ohio St. 3d 125 (winery) [16] Available at https://revenue.alabama.gov/wp-content/ uploads/2017/10/Alabama_Agricultural_Guide.pdf [17] Farming and New Jersey Sales and Use Tax (NJ Dept. of Agriculture, September 3, 2008). Available at https://njfb.org/ wp-content/uploads/2013/07/farmingsalesandusetaxguide.pdf

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