Rhoades McKee plays large role in MSU Agricultural Exposition

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A giant John Deere tractor drew visitors to the Michigan State University Ag Expo Tuesday, Wednesday and Thursday.

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Rhoades McKee attorney John T. Klees talked about Michigan tax information that would be helpful for farm businesses.

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Attorney Stephanie Myott braved the heat to staff the Rhoades McKee booth Wednesday.

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Scott Steiner presented on property tax law on behalf of Rhoades McKee along with Klees.

LEGAL NEWS PHOTOS BY CYNTHIA PRICE

by Cynthia Price
Legal News

As the recognition that agriculture is a strong economic driver for the state of Michigan increases, farmers are taking the business side of their operations more and more seriously.
And most of the time that necessitates legal services.

The Michigan State University Ag Expo reflects that growth in farmer interest —2012 attendance was the highest in recent history, and it appeared an amazingly large number endured this week’s high temperatures too — as well as law firms’ observation that their presence can be mutually beneficial.

Rhoades McKee Law Firm was ubiquitous all three days (July 16-18), sponsoring an exhibit booth and offering educational seminars each day.

Other legal organizations at the Ag Expo included the Grand Rapids firm of Law Weathers; Fraleigh Law Firm, which seems to specialize in agricultural law; and the Michigan Agricultural Mediation Program.

Rhoades McKee’s three-day booth offered very popular bottled water on ice and the opportunity to chat with a lawyer one-on-one. On Wednesday, associate Stephanie D. Myott cleared her schedule to be there all day.

Despite the sweltering heat, she said, the booth had been busy.

On opening day, in the large College of Agriculture and Natural Resources tent — which had open sides and no air conditioning — Rhoades McKee’s Terry L. Zabel, an agriculture and tax attorney, and Kevan W. Ventura, who specializes in real estate and business/corporate law, discussed the Farm Bill.

The omnibus Farm Bill, which governs the operations of the U.S. Department of Agriculture among other things, is due for review and renewal every five years. The last reauthorization was supposed to be 2007, though it was delayed until 2008, so  the bill came up again in 2012.

Due to complications involving the failed Supercommittee (which was intended to deal with the Federal debt), the Senate, under the guidance of its Agriculture Committee Chair, Michigan’s own Sen. Debbie Stabenow, passed its own version in June 2012, but the House failed to act.  Even though Sen. Stabenow had worked during the Super-committee process with House Agriculture Committee Chair Frank Lucas of Oklahoma and ranking member, former chair, Collin Peterson of Minnesota, both houses could agree at the end of 2012 only on extending the 2008 Farm Bill.

In June of this year, the Senate approved a similar version to last year’s, but when the very different House-generated version came up for a vote, the House voted it down. Many of the representatives felt that proposed cuts to SNAP (the Supplemental Nutrition Assistance Program, often still called “food stamps”), were too deep.

Then the House leadership  started talking about taking the Nutrition Title, which authorizes SNAP, out of the Farm Bill and considering it separately, despite widespread opposition expressed by groups from the Farm Bureau to Feeding America.

As Ventura said Monday, prior to his Ag Expo presentation, “The House leaders basically said, ‘We can’t get the whole thing through but if we segregate the Nutrition Title and treat that as a separate issue, we can pass just the farm piece’ — and by a slim margin, it did pass.”

Because that passage came just last Thursday, Ventura said the presenters were unsure of what exactly to present. “We did do some analysis of what the proposals are — some are the same in both versions — but we didn’t go in depth in light of the fact that things seem to be stalled. We think it’s still premature to speculate on what will happen.”

On Monday, Sen. Stabenow told the press that the House leadership had not yet even forwarded the bill so that conferencing to reconcile the two versions could begin. She commented, “We’re confident that we can put things back together that will be able to get bipartisan support in both houses.” She said that Lucas and Peterson joined her in being anxious to get going.

According to Stabenow’s office, the House did forward the bills Tuesday, but no timeframe is yet set.

For his part, Ventura comments, “The farming industry in Michigan has become very large in the last five years or so, and personally I’ve seen a lot of growth in areas like farmers’ markets. I think a lot of that is made possible by legislation like the Farm Bill.” He added, “I think people should know more about it; it would be short sighted to ignore it. It’s a big bill and a big deal.”

On Wednesday at the Expo, Rhoades McKee attorneys Scott Steiner and John T. Klees gave an update on Michigan Property Tax, focusing on how it affects agricultural properties. A shifting crowd of about 35 people attended,

They discussed the classifications of Michigan property and how to obtain exemptions from property tax, including the Qualified Agricultural Property Exemption. Steiner, an environmental and real estate attorney, emphasized that even if that exemption is granted, it only offers relief from about one-third of taxes owed.

Both attorneys focused on what triggers “uncapping,” which happens as the result of some property transfers. ““Even though the property is increasing in value over the years, the taxable value doesn’t go up more than 5% per year due to the Headlee Amendment unless there’s a transaction,” Steiner told the farm families present. Often, the new property value results in much higher taxable values, with the result that some new owners may owe so much they lose interest in the property.

Klees, based on his expertise as an estate planning and tax attorney, talked about succession planning on farms. Though he offered some strategies for avoiding uncapping, he said that the consequences of may not be worth it, and he emphasized that farmers should seek personalized advice from a legal or tax professional.

Audience members had a good number of individualized questions for Klees and Steiner after the session.

Rhoades McKee attorneys Mary L. Tabin, who specializes in labor and employment, Peter J. Lozicki, who focuses on business and tax law, and Zoe S. Martinez, health care and employment, gave a session Thursday on “Obamacare: A Road Map for Identifying Risks and Avoiding Employer Penalties.”