Web-based agco-op law library puts valuable resources at fingertips

Web-based agco-op law library puts valuable resources at fingertips

Donald Frederick

It is often said that a person can find almost anything on the Internet, if you just know where to look. Finding information on cooperative and agricultural law is now easier, using the restructured and expanded Web site of the National Agricultural Law Center: www.NationalAgLawCenter.org.

Congress authorized creation of the National Agricultural Law Center in 1987, which is part of the University of Arkansas School of Law in Fayetteville, Ark. The Center has been funded with federal appropriations through the National Agricultural Library, an entity within the USDA Agricultural Research Service. The Center conducts legal research and provides information on agricultural and food law. It is staffed by a team of law and research professors, lawyers, other specialists, and graduate assistants from the University of Arkansas School of Law’s Graduate Program in Agricultural Law.

The Center’s Web site offers a variety of resources that will be useful to both the latter and the non-lawyer looking for information on developments in agricultural and cooperative law. Key components of the library. are described below.

Reading rooms

The heart of the new Web site is a series of subject-based “reading rooms” that provide access to a comprehensive list of electronic resources on agricultural and food law topics. The Cooperatives Reading Room, one of 28 such “rooms,” provides links to 11 major statutes governing cooperatives, the regulations for Subchapter T of the Internal Revenue Service, Federal Register rules open for comment, recent court decisions impacting cooperatives, Center research papers on cooperative law and a variety, of reference resources. Other reading rooms provide similar information on topics important to cooperatives, such as farm credit, food safety, international ag trade and marketing orders.

National AgLaw Reporter

The National AgLaw Reporter is a regularly updated electronic newsletter covering developments of interest to cooperatives and others in the agricultural and food law communities. It currently has four sections:

* In the News contains summaries and analysis of recent developments in agricultural and food law.

* Case Summaries describe recent judicial opinions in agricultural and food law.

* Federal Register Digest provides brief summaries and links to some of the more significant regulator), changes affecting agriculture published in the Federal Register since Jan. 1, 2002.

* Judicial Officer Decisions links the user to all major decisions rendered by the Office of the USDA Judicial Officer since January of 2002.

Other features

The library contains other sections that lead to legal research prepared by both the Center and other scholars working on agricultural and food law issues.

* Reference Desk has links to bibliographies, glossaries, law journals, trade associations, and other law school Web sites. It has a General Ag Resources area with links to additional federal agency and university sites, news sites, publications and sources of statistics.

* Farm Bills provides the text of all United States Farm Bills since 1933, legislative history of Farm Bills since 1973, and other resource links for the 1996 and 2002 Farm Bills.

* Congressional Links offers direct access to Web sites for the U.S. Senate and House of Representatives, the Congressional Record and other Congressional resources, including the Congressional Research Service and the General Accountability Office.

RELATED ARTICLE: Co-op payments to patrons subject to self-employment tax.

Internal Revenue Code section 1401 imposes a self-employment (social security) tax on the net earnings of individuals who are in business for themselves as sole proprietors, partners or independent contractors. The U.S. Tax Court has reaffirmed its position that cooperative member- patrons must pay self-employment taxes on distributions they receive from their cooperative. (Eric Fultz v. Comm’r, T.C. Memo 2005-45 [March 10, 2005); Dennis Fultz v. Comm’r, T.C. Memo 2005-46 (March 10, 2005)).

In these cases, a cooperative made two payments to its member-patrons after the end of its fiscal year. One was categorized as a payment to a patron for the value added to the patron’s product during its processing by the cooperative (a “value-added payment”). The other was called a patronage refund.

Some patrons did not report the value-added payments for self-employment tax purposes. The Internal Revenue Service challenged the patrons’ position and the dispute wound up in court. The patrons argued that the “value-added payments” were investment income not subject to self-employment tax.

However, the court determined that the payments were income derived from business conducted with the cooperative and subject to self-employment tax. The court also rejected an argument by the patrons that since they had assigned the right to the funds received from themselves to a family corporation, they were no longer the recipients of the income for self-employment tax purposes.

Some tax advisers have suggested that similar payments from an LLC to a member are not subject to self-employment taxes. But the courts have looked at the nature of the income (business, not investment income), not the structure of the business, in holding cooperative distributions to patrons are subject to self-employment taxes. So, it seems possible that they would also hold that payments from an LLC to a member, related to product delivered for processing and resale, are subject to self-employment taxes.

Donald Frederick

Program Leader for Law, Policy & Governance

USDA Rural Development

email: donald.frederick@usda.gov

COPYRIGHT 2005 U.S. Department of Agriculture, Rural Business – Cooperative Service

COPYRIGHT 2005 Gale Group