by Jane Seigler, MHC Government Relations Committee Co-Chair (first published in the December 2024 Equiery)

Corporate Transparency Act has Important Deadlines & Potentially Severe Penalties
On January 1, 2024, a sweeping new federal law went into effect that requires many small businesses, including farms, to disclose detailed information about their ownership and control. The Corporate Transparency Act (CTA), is intended to combat money laundering, financial fraud, and terrorist financing, by requiring businesses to submit a report about their “beneficial owners,” i.e., those who own or control the business. The CTA creates a national database that law enforcement and financial institutions can use to distinguish legitimate businesses from those operating as “shell” companies. It has significant implications for a broad range of U.S. small businesses, including farms and agricultural operations.

The CTA applies to most U.S. businesses formally created as separate entities from the people who own and run them, including corporations, limited liability companies (LLCs), and similar entities. This includes both new businesses and those already in operation. There are some exemptions, including sole proprietorships, general partnerships, and nonprofits, as well as banks, insurance companies, and others believed to already be sufficiently regulated by state or federal government. Interestingly, large companies – with more than twenty employees, five million dollars in gross revenue, and a physical office in the United States – are also exempt.

Under the CTA, businesses must report specific information about their “beneficial owners.” A beneficial owner is someone who directly or indirectly exercises substantial control over the company.

Covered businesses must submit:

  1. “Entity Information” – Legal name of the company, any trade names, business address, and Taxpayer Identification Number (TIN) or Employee Identification Number (EIN).
  2. “Beneficial Owner Information” – Full legal name, date of birth, address, and identification number (e.g., driver’s license, passport, or similar). For businesses established after January 1, 2024, additional information is required. This information must be updated whenever there are significant changes. The filing deadline for most businesses is January 1, 2025. However, there are exceptions based on when a business was formed. Businesses formed between January 1, 2024, and January 1, 2025, must file within 90 days of formation; businesses formed on or after January 1, 2025, must file within 30 days of formation.

There are significant penalties for failure to comply with the CTA, including:

  • Civil penalties of up to $591 per day for continued non-compliance.
  • Fines of up to $10,000.
  • Possible two-year imprisonment for willfully failing to report or for providing false information. The U.S. Treasury Department has set up an online portal at https://boiefiling.fincen.gov/fileboir where businesses can file their reports securely. There are no fees associated with filing.

For more details on reporting and a complete list of exceptions, see the Small Entity Compliance Guide at https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide_FINAL_Sept_508C.pdf on the FinCEN’s Beneficial Ownership Information website https://www.fincen.gov/boi.

USDA Proposes Increased User Fees for Animal Import/Export Services
The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) is seeking public comment on proposed changes to user fees for veterinary diagnostic goods and services, along with veterinary services for imports and exports of live animals and animal products.

APHIS charges user fees because the animal health import and export services occur significant costs around the country, costs for which the U.S. Congress appropriates no funding. According to APHIS’s notice, the “animal health import and export user fees cover significant activities across the country, including at border locations and quarantine facilities. These fees support personnel, facilities, and information technology systems. They also recover the costs of inspection and certification services for imports and exports of live animals, animal products, and animal byproducts as well as provide for veterinary diagnostic goods and services.”

The portal in the Federal Register will accept public comments on this proposal until December 9. You can read more, and submit a comment, at https://www.federalregister.gov/documents/2024/11/08/2024-25826/veterinary-services-user-fees#:~:text=APHIS%20will%20round%20calculated%20fees,all%20fees%20greater%20than%20%2410

New Maryland Environmental Regulations
Locally, emergency regulations regarding a new permit program for food processing residuals have been issued by the Maryland Department of Agriculture.

Per MDA: “Food processing residuals are generated during the production and processing of food products such as milk and poultry. New legislation, which took effect July 1, 2024, requires the department to oversee the transport, storage, and land application of food processing residuals on Maryland farms as a nutrient source. People who engage in these activities must first obtain a permit from the department. The new rules are designed to ensure that FPRs are managed to protect air and water quality.”

If you are a Maryland farmer who uses FPRs, here’s what you need to know and do.

  • A Food Processing Residuals Utilization Permit is required if you plan to transport, store, or land apply FPRs on Maryland farmland.
  • A separate permit is required for each activity (transport, storage or spreading).
  • Permit holders are required to post a bond to ensure compliance.
  • Applications for transport and storage received by November 15 to be issued by January 1.
  • Farmers who have submitted their applications by November 15 may continue to transport or store FPRs until the permit determination has been made
  • Applications for land application of FPRs are due to the department by January 15. Permits will be issued by March 1, when land application of nutrient sources resumes.
  • All FPRs must be applied to fields following Maryland’s nutrient management regulations. Nutrient management staff will be making site and field inspections to ensure compliance.

For more information on the new regulations, please visit mda.maryland.gov/conservation. To request a permit application, please contact: Dwight Dotterer, Administrator, Nutrient Management Program, Maryland Department of Agriculture at 410-841-5877 or dwight.dotterer@maryland.gov.