May 2017

May 2017

Landowner Faces Possible $2.8 Million Clean Water Act Fine in Upcoming Trial

Last summer, a federal court found a California landowner liable for violating the Clean Water Act (CWA) because he tilled a 450-acre parcel of his land to plant wheat. He is now preparing for an August 14, 2017, trial. At issue in the trial will be (1) the scope of his CWA violations, (2) the appropriateness of the United States’ requests for restoration and mitigation, and (3) the amount of his civil penalty. The government is asking for a civil penalty of $2.8 million, plus tens of millions more worth of off-site mitigation. The landowner argues that the case raises the larger question of whether the federal government even had jurisdiction to pursue the CWA case against him.  Although he asked the federal court to delay his trial pending resolution of a different Ninth Circuit case addressing the same jurisdictional question, the district court recently denied his motion.  

The debate over the definition of Waters of the United States (WOTUS) has been raging for years. A change in administration has ushered in a change in executive policy. Nonetheless, the question of which waters should be jurisdictional for purposes of the Clean Water Act is far from resolved.  And the prosecution of this case, and others like it, continues.  

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Segregating Fertility Costs

Tax rules require the purchase price of land to be allocated among the land and the various assets that are purchased with the land, such as fences, wells, roads, buildings, and timber. With the increases in the price of farmland and the cost of fertilizer, some buyers of farmland are allocating part of the purchase price of the land to fertilizer that was applied to the land before the purchase. Similarly, some taxpayers are allocating part of the date-of-death FMV of farmland to fertilizer that was applied to the land before the decedent’s death. That allocation allows them to deduct the cost of the fertilizer instead of including that portion of the purchase price or date-of-death basis in the nondepreciable basis of the land.

This issue reviews the tax rules that require buyers and sellers to allocate the purchase price of a group of assets and applies those rules to fertilizer acquired with purchased or inherited farmland. To continue reading, click here.


Federal Court of Appeals Vacates Registration Requirement for Model Aircraft

The U.S. Court of Appeals for the District of Columbia issued a blow to the Federal Aviation Administration (FAA) this month when it vacated the portion of a 2015 FAA Rule requiring registration of model aircraft.

On December 14, 2015, the FAA announced a new Rule requiring registration of small unmanned aircraft systems (UAS) weighing more than 0.55 pounds and less than 55 pounds. Effective December 21, 2015, the Rule required owners of small UAS, including those operated strictly as model aircraft, to complete a registration process. The registration process, which costs $5, assigns a registration number that must be attached to the model aircraft. Those who fail to register are potentially subject to civil and criminal penalties, including up to three years' imprisonment.

Shortly after the Rule was issued, a D.C. model aircraft hobbyist filed an action against the FAA, alleging that the Rule violated § 336(a) of the FAA Modernization and Reform Act (Act). On May 19, 2017, the U.S. Court of Appeals for the District of Columbia agreed.

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