10. Court shuts down EPA’s emission cap program. In 2009, the EPA began promulgating new pollution rules designed to diminish U.S. coal production. The rules were known as the Cross-State Air Pollution Rule, the Mercury and Air Toxics Standards for Utilities, the Cooling Water Intake Structures regulations, and the Disposal of Coal Combustion Residuals rule. In 2012, however, a federal court invalidated the EPA’s authority to implement the Cross-State Air Pollution rule. The EPA rule imposed a cap and trade style program that expanded existing limitations on sulfur dioxide and nitrogen oxide emissions from coal-fired power plants in 28 “upwind” states. EPA claimed to have the authority to cap emissions that supposedly traveled across state lines. While the Clean Air Act grants the EPA authority to require upwind states to reduce their own significant contributions to a downwind state’s non-attainment, the court noted that the rule could impermissibly require upwind states to reduce emissions by more than their own significant contributions to a downwind state’s non-attainment. The court also held that the EPA failed to allow states the initial chance (as required by statute) to implement any required reductions with respect to in-state sources by quantifying a state’s obligations and establishing federal implementation plans. The EPA admitted that the rule would cost the private sector $2.7 billion and force numerous coal-fired power plants to shut down. EME Homer City Generation, L.P. v. Environmental Protection Agency, et al., No. 11-1302, 2012 U.S. App. LEXIS 17535 (D.C. Cir. Aug. 21, 2012).

* Leonard Dolezal Professor in Agricultural Law, Iowa State University, Ames, Iowa; Director of the ISU Center for Agricultural Law and Taxation.  Member of the Iowa and Kansas Bar Associations and Licensed to Practice in Nebraska.

1 The employer insurance mandate specifies that, for months beginning after 2013, a “large” employer (with at least 50 full-time employees) must make an “assessable payment to the IRS if any full-time employee is certified to the employer as having purchased health insurance through a state Exchange with respect to which a tax credit or cost-sharing reduction is allowed or paid to the employee, if the employer either (1) does not offer health care coverage for its full-time employees, or (2) offers minimum essential coverage that either is unaffordable or fails the “60 percent test” (i.e., the plan’s share of the total allowed cost of benefits is less than 60 percent).

2 Liberty University, et al. v. Geithner, No. 11-438, 2012 U.S. LEXIS 8942 (U.S. Sup. Ct. Nov. 26, 2012), pet. for rehearing granted, initial Fourth Cir. opinion vacated, and case remanded to the Fourth Circuit.

3 Sissel v. United States Department of Health and Human Services, et al., No. 1:10-cv-01263 (BAH) (D. D.C. Sept. 11, 2012).

4 The “takings” clause of the Fifth Amendment has been held to apply to the states since 1897. (See Chicago, Burlington and Quincy Railroad Co., v. Chicago, 166 U.S. 226 (1897). In addition, the state constitutions of 47 states expressly prohibit the taking of private property for public use without just compensation (the exceptions are Kansas, North Carolina, and Virginia).

5 “Just compensation” equals fair market value, generally in cash. For partial takings, “severance damages” may be awarded in addition to compensation for the part taken. See, e.g., Sharp v. United States, 191 U.S. 341 (1903).

6 In re Knudsen, et al. v. Internal Revenue Service, 581 F.3d 696 (8th Cir. 2009).

7 See also In re Schilke, No. 4:07CV3283, 2008 U.S. Dist. LEXIS 68176 (D. Neb. Sept. 9, 2008), aff’g, 379 B.R. 899 (Bankr. D. Neb. 2007) (11 U.S.C. §1222(a)(2)(A) applicable to post-petition taxes; to construe statute otherwise would render statute meaningless); In re Dawes, 382 B.R. 509 (Bankr. D. Kan. 2008) (post-petition taxes may be treated as an administrative claim; fact that Chapter 12 did not create a separate taxable entity from the debtor not relevant); see also In re Hall, 393 B.R. 857 (D. Ariz. 2008), rev’g, 376 B.R. 741 (Bankr. D. Ariz. 2007) (11 U.S.C. §1222(a)(2)(A) applicable to post-petition taxes on basis that legislative history showed that it was intended to apply to taxes generated during the bankruptcy reorganization from the sale of assets used in a farming business); In re Gartner, No. BK06-40422, 2008 Bankr. LEXIS 3525 (Bankr. D. Neb. Dec. 29, 2008) (statute applicable to post-petition taxes); In re Rickert, No. BK06-40253-TLS, 2009 Bankr. LEXIS 17 (Bankr. D. Neb. Jan. 9, 2009) (statute applicable to post-petition taxes, but IRS proportional method used to compute allocation of taxes entitled to priority and non-priority treatment); In re Uhrenholdt, No. BK-06-40787-TLS, 2009 Bankr. LEXIS 144 (Bankr. D. Neb. Jan. 26, 2009) (statute applicable to post-petition taxes; taxes generated by sale of corn entitled to non-priority treatment as a farm asset used in farming because of its sale to debtors’ cattle farming operation); but see In re Ficken, No. 05-52940-HRT, 2009 Bankr. LEXIS 3008 (Bankr. D. Colo. Jul. 30, 2009), aff’d, No. CO-09-042 (B.A.P. 10th Cir. May 7, 2010) (statute applicable to post-petition taxes; taxes triggered by sales of both calf inventory and breeding livestock qualified for non-priority treatment — provision not limited to taxes triggered by sale of capital assets, and calf inventory and breeding livestock were used in the debtors’ farming business; marginal approach to be utilized in determining amount of tax entitled to non-priority treatment); Smith, et ux. v. United States, et al., 447 B.R. 435 (Bankr. W.D. Pa. 2011) (statute inapplicable to post-confirmation sale of farm assets; court noted that case involved post-confirmation sale rather than post-petition sale; while court not entirely persuaded by Hall or Knudsen approach, court noted it would side with Hall).

8 ILM 200113027 (Mar. 30, 2001) (Chapter 13 case).

9 Hall v. United States, 617 F.3d 1161 (9th Cir. 2010), cert. granted, 131 S. Ct. 2989 (2011); United States v. Dawes, 652 F.3d 1236 (10th Cir. 2011).

10 16 U.S.C. §3821(b)-(c) (2008).

11 See, e.g., United States v. Dierckman, 201 F.3d 915 (7th Cir. 2000), aff’g, 41 F. Supp. 2d 870 (S.D. Ind. 1998).

12 16 U.S.C. §3821(c) (2008).

13 In its 1996 edition of the National Food Security Act Manual, the USDA’s regulatory definition of a converted wetland (which the statute defines in 16 U.S.C. §3821(c)) to mean any “manipulation which allows or would allow production of an agricultural commodity where such production was not previously possible, or making an area farmable more years than previously possible . . . .”

14 Clark v. United States Department of Agriculture, 537 F.3d 934 (8th Cir. 2008).

15 16 U.S.C. §3822(b)(2)(D) (2008).

16 See Horn Farms, Inc. v. Johanns, 397 F.3d 472 (7th Cir. 2005), rev’g, 319 F. Supp. 2d 902 (N.D. Ind. 2004), cert. den., 126 S. Ct. 1565 (2006); Maple Drive Farms Family Limited Partnership v. Vilsack, No. 1:11-CV-692, 2012 U.S. Dist. LEXIS 176539 (W.D. Mich. Dec. 13, 2012).

17 342 P.2d 790 (Or. 1959).

18 Hall v. DeWeld Mica Corp., 93 S.E.2d 56 (N.C. 1956).

19 Stevenson, et al. v. E.I. DuPont de Nemours & Co., 327 F.3d 400 (5th Cir. 2003) (only showing necessary for trespass claim is entry over land by some “thing”; however, evidence insufficient to support award of damages). The rule is the same in Tennessee. See In re Tennessee Valley Authority Ash Spill Litigation, 2012 U.S. Dist. LEXIS 122231 (E.D. Tenn. Aug. 23, 2012).

20 Johnson, et al. v. Paynesville Farmers Union Cooperative Oil Company, 802 N.W.2d 383 (Minn. Ct. App. 2011).

21 Treas. Reg. §1.170A-1(c)(2) (1990).

22 I.R.C. §2032A.

23 I.R.C. §2032A(b)(1)(B).

24 But the land subject to the election need not exceed 25 percent of the adjusted value of the gross estate. Finfrock v. United States, 860 F. Supp. 2d 651 (C.D. Ill. 2012) (Treas. Reg. Sec. 20.2032A-8(a)(2) invalid insofar as it attempts to impose a non-statutory requirement that 25 percent of the adjusted value of the gross estate must consist of farmland subject to the special use valuation election).

25 Miller v. United States, 680 F. Supp. 1269 (C.D. Ill. 1988).

26 The higher deferential standard is a result of Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984).

27 Swallows Holding, Ltd. v. Comr., 515 F.3d 162 (3d Cir. 2008).

28 McCord v. Comr., 461 F.3d 614 (5th Cir. 2006); Estate of Christiansen v. Comr., 586 F.3d 1061 (8th Cir. 2009).

29 Estate of Petter v. Comr., T.C. Memo. 2009-280; Hendrix v. Comr., T.C. Memo. 2011-133.