Virginia Law for Farmers and Landowners: What's New from the 2005 Legislative Session
Farm Business Management Update, June/July 2005
By L. Leon Geyer, (firstname.lastname@example.org), Professor, Agricultural Law, Agricultural and Applied Economics, Virginia Tech
The legislature was active in passing laws that impact upon farmers and other landowners. Several of these important laws are summarized below.
1. Fence Law - Fence law and its application are often the subject of neighborly disagreement. Under current law, owners of subdivided (homeowners and small lot owners), commercial, or industrial property which border farms could be forced to pay for half of the boundary fence in Virginia. Farmers who owned un-subdivided land such as 400 acre apple orchard or 200 acre soybean farm were not required to pay for half of a fence between them and a livestock farmer. A new law, embodied in HB1648, modifies Virginia's fence law governing the construction of division fences. The new law allows all adjoining landowners to a livestock farmer to let their land lay open and thereby avoid having to contribute half of the cost of a boundary fence. The revised fence law is effective July 1, 2005.
Important points about the revised fence law include
A. Adjoining property owners can agree among themselves to share the cost. Some property owners may have such agreements already recorded with land records. Prior recorded agreements as well as current agreements to share the cost are enforceable.
B. Homeowners; developers; golf courses; commercial; industrial; timber; and fruit, vegetable, and crop farms are not required to pay for half of the fences for adjoining livestock producers beginning July 1, 2005
C. By implication, adjoining livestock farmers or landowners whose land is used for livestock production must share in the erection of fences that enclose the land for agricultural purpose.
D. The cost of fencing to a farmer is recovered under the tax code as a Section 179 expense or on the farmer's depreciation schedule.
E. Under current law, homeowners added the cost of the fence to the property basis and recovered it, if at all, upon the sale of the property. Since most homeowners do not pay capital gains taxes upon the sale of the house, it had no tax benefit.
Selected sections of the current fence law are outlined below.
Virginia Code ¤55-317. Obligation to provide division fences.
Adjoining landowners shall build and maintain, at their joint and equal expense, division fences between their lands, unless one of them shall choose to let his land lie open as hereinafter provided for, or unless they shall otherwise agree between themselves. No owner of land used for industrial or commercial purposes, or subdivided into lots or parcels, adjoining lands used for agricultural purposes, when given notice by the owner of such adjoining lands under ¤55-318 shall have the option of choosing to let his land lie open, but shall build one half of such fence or be liable therefore.
Proceedings for the erection and repair of such fences shall be as set forth in the following sections.
[Material lined out was removed from the statute by H 1648]
Virginia Code ¤ 55-318. When no division fence has been built.
When no division fence has been built, either one of the adjoining owners may give notice in writing of his desire and intention to build such fence to the owner of the adjoining land, or to his agent, and require him to come forward and build his half thereof. The owner so notified may, within ten days after receiving such notice, give notice in writing to the person so desiring to build such fence, or to his agent, of his intention to let his land lie open, in which event, and if the one giving the original notice shall build such division fence and the one who has so chosen to let his land lie open, or his successors in title, shall afterwards enclose it, he, or they, as the case may be, shall be liable to the one who built such fence, or to his successors in title, for one-half of the value of such fence at the time such land shall be so enclosed, and such fence shall thereafter be deemed a division fence between such lands.
If, however, the person so notified shall fail to give notice of his intention to let his land lie open, as hereinabove provided, and shall fail to come forward within thirty days after being so notified, and build his half of such fence, he shall be liable to the person who builds the same for one-half of the expense thereof, and such fence shall thereafter be deemed a division fence between such lands.
Notwithstanding the provisions of this section, no successor in title shall be liable for any amount prior to the recordation and proper indexing of the original notice in the clerk's office of the county in which the land is located.
The other legislative enactments are likely to have a lesser impact on farmers and landowners.
2. Pesticide Control Board Ð Current law required one member of the Board to represent commercial applicators. Under new legislation, at least one of the two appointees representing the commercial sale or application sector must be a structural commercial applicator. (HB 1644)
3. Referendum on whether to levy excise tax or assessments were enacted for Apples, Horse and Cotton industries.
a. Apple industry. Board of Agriculture and Consumer Services is authorized to hold a referendum on the levy of an excise tax of 2.5 cents per tree run bushel of ungraded apples grown in the Commonwealth for sale by producers of at least 5,000 tree run bushels per calendar year. The bill defines "tree run bushel" as a bushel of harvested apples that have not yet been graded or sized. HB 1746
b. Horse industry. Board of Agriculture and Consumer Services, upon petition, is authorized to conduct a referendum of horse owners in the Commonwealth on the question of whether or not an assessment of $3 per ton or 7.5 cents per 50-pound bag of manufactured horse feed should be established to support additional market development, education, publicity, research, and promotion of the equine industry. HB 2423
c. Cotton industry. Board of Agriculture and Consumer Services, upon petition, is authorized to conduct a referendum of cotton producers in the Commonwealth on the question of whether or not the Cotton Board should be authorized to increase the current assessment of $0.85 per bale of ginned cotton by a maximum of $0.15 to support education, research, and promotion of the growth and use of cotton. HB 2737
4. Agricultural Enterprise Act of 2005 directs the Department of Agriculture and Consumer Services (VDACS) to establish, as an element of the Office of Farmland Preservation, agricultural enterprise districts upon application by localities with established agricultural or forestal districts, locally designed agricultural enterprise districts, or purchase of development rights programs.
"Qualified agricultural businesses" and "qualified farm businesses" located in such districts may apply to VDACS for assistance in developing a new business plan and grant funding for up to 50 percent of the associated costs of implementing that plan, up to a maximum $500,000. "Qualified agricultural businesses" are agricultural businesses that establish a new business operation or plan to expand and improve an existing operation within a designated agricultural enterprise district. "Qualified farm businesses" are farm businesses that establish a new agricultural or forestall production operation or plan to expand or improve an existing operation within an agricultural enterprise district. This bill contains a delayed enactment clause of January 1, 2007, which is conditioned upon funding for the program being included in the appropriations act for fiscal years 2006-2008. HB 1947
5. Animal Laws
a. Animal Laws in Towns. Towns have the option of adopting by reference any ordinance of the surrounding county to be applied within its town limits, instead of adopting an ordinance of its own. HB 2221.
b. Sale of Companion Animals. Localities that adopt an ordinance to require permits for pet shops or companion animal dealers may provide either a criminal penalty not to exceed a Class 3 misdemeanor or a civil penalty not to exceed $500 for any violation of the ordinance. HB 2338
6. Right to consume farm products.
The legislature affirmed that a person, his immediate family, or his guest has a right to consume products or commodities grown or processed on his property provided that the products of commodities are not offered for sale. HB 2295
A bill to allow producers with 3 or less dairy cows or 12 or less milking goats to sell milk exempt from VDACS dairy sanitation regulations was defeated. With the affirmation of HB2295, some producers will sell a cow and services to Connie Consumer and then have Connie pick up her milk. The issue of right to sell without compliance with VDACS regulations has been a hot one for the legislature.
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