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Friday, March 23, 2012
Volume 12, Issue 12

The 2012 session of the Indiana General Assembly adjourned as scheduled on Friday, March 9.  (Actually it was well after midnight when the gavel fell in both the Senate and the House declaring the session adjourned sine die.)  Although the session was marked by some controversial, high-profile issues of general interest such as the enactment of right-to-work legislation and the adoption of statewide restrictions on smoking in public places, it provided an opportunity for Farm Bureau to accomplish a significant longtime goal, to successfully address some issues that emerged at the last minute, and to see the passage of several bills that will benefit agriculture in the state.  Gov. Mitch Daniels has signed into law every piece of legislation sent to him by the General Assembly.


While Farm Bureau enjoyed several legislative victories this year, there are a few that truly stand out and are listed below.

INHERITANCE TAX REPEAL  SEA 293 will phase-out Indiana’s inheritance tax over a nine-year period beginning in 2013, and it increases from $100,000 to $250,000 the amount that may be inherited by your children or your children’s surviving spouses before the inheritance tax is assessed.  The increased exemptions will be in effect for the estates of anyone who passed away on or after Jan. 1 of this year.  The elimination of Indiana’s inheritance tax has been a policy objective of Farm Bureau for decades.  We all dream of passing our farms on to our kids, and this bill removes one of the significant barriers that sometimes prevent that.  SEA 293 was authored by Sen. Jim Smith (R-Charlestown) and sponsored in the House by Rep. Eric Turner (R-Cicero).  Sen. Brandt Hershman (R-Buck Creek), who chairs the Senate Committee on Tax & Fiscal Policy, was also instrumental in the success of the bill.  Farm Bureau President Don Villwock and Tax Specialist Katrina Hall joined Gov. Mitch Daniels as he signed the bill into law on March 20.

DELAY OF NEW SOIL PRODUCTIVITY ADJUSTMENTS  In early February, the State’s Department of Local Government Finance announced a new schedule of soil productivity adjustments that it expected assessors to use for the March 1, 2012, reassessment of farmland.  The previous soil productivity factor adjustments had been in place over a quarter of a century, and the introduction of the new factors came as a complete surprise to the assessors, to legislators and to Farm Bureau.  The application of these new factors would have significantly increased the assessed value of farmland and the taxes that farmers would have had to pay.  We worked with a number of concerned legislators and, in the end, were successful in including language in SEA 19 which will delay the implementation of the new factors for a year.  We will be working with DLGF and others during that time to have them justify or revise the proposed soil productivity factors.  We estimate that delaying of the effective date of the soil productivity factors will save the owners of Indiana farmland about $57.4 million over the next year.

SEA 19 also provides for a rolling assessment under which one fourth of all the parcels in a particular category of property will be reassessed every year.  This will even out the workload on assessors and should keep assessments for tax purposes from falling way behind as is frequently the case under the current cyclical reassessment.  The bill was authored by Sen. Phil Boots (D-Crawfordsville) and sponsored by Rep. Kathy Richardson (R-Noblesville).  Again, Tax & Fiscal Policy Chairman Brandt Hershman was instrumental in the success of the bill. 

MUNICIPALITIES DENIED JURISDICTION OVER AQUIFERS  Farm Bureau was successful in its efforts to convince the General Assembly to enact language that will exclude underground aquifers from the definition of “watercourse" as that term is used in several statutes that give cities and towns the authority to regulate “watercourses” 10 miles outside their municipal boundaries.  A Supreme Court decision last fall concluded that municipalities had the authority to regulate aquifers.  This meant that a town could have required a farmer to obtain a permit to pump water from the aquifer with a well on the farmer’s property, or it could have prohibited the withdrawal of water altogether.  It could also have set up a race among municipalities that are within 10 miles of one another to claim the aquifer first.  Farm Bureau was one of the strongest voices calling for the legislative reversal of the Supreme Court’s decision to include aquifers in the definition of “watercourse.”  We are very pleased that this important property right was restored with the passage of SEA 132.  The bill, which also provides for the collection of data regarding water usage, was introduced by Sen. Beverly Gard (R-Greenfield) and carried in the House by Rep. Dave Wolkins (R-Winona Lake). 

FRIVOLOUS NUISANCE ACTIONS AGAINST FARMERS  HEA 1091 provides that if a court determines either the complaint or defense in a nuisance action brought against an agricultural operation is frivolous, the court must award court costs and reasonable attorney's fees to the prevailing party.  The bill specifies that reasonable attorney's fees may only include the fees for one attorney and must be calculated on the basis of the reasonable and customary hourly rates charged in the county in which the action was brought.  The determination that an action was frivolous may not be based on the mere fact that a party did not prevail.  The bill also requires a court to order a person who manufactures methamphetamine or marijuana on property owned by another to pay certain damages as restitution to the property owner.  Farm Bureau supported this bill because the state has seen actions brought against agricultural operations that appear to be frivolous, and we hope this legislation will discourage frivolous lawsuits.  Rep. Bill Friend (R-Macy) was the author of HEA 1091.  It was sponsored in the Senate by Sen. Brent Steele (R-Bedford).


The legislature passed, and the Governor has signed, a number of other bills that Farm Bureau testified in support of and lobbied for during the session.  These bills are all important to some Farm Bureau members –  the order in which they are listed reflects the sequence of their numbers not any order of importance or priority.  Senate bills are listed first.  Note:  Once both houses have agreed on a piece of legislation, it becomes an “Enrolled Act” rather than a “Bill.”  When this happens, the legislation’s designation changes from Senate Bill (SB) to Senate Enrolled Act (SEA) or from House Bill (HB) to House Enrolled Act (HEA).  The number assigned to the legislation does not change.

COUNTY HIGHWAY MAINTENANCE FUNDING  SEA 98 will allow greater flexibility in using property tax funds and miscellaneous revenue deposited in county general revenue funds to help pay for the maintenance of county highways. To the extent that more money is spent for the maintenance of county highways from these sources of revenue than under current law, fewer funds from these sources would be available for other uses.  The bill’s author was Sen. Luke Kenley (R-Noblesville), and its sponsor was Rep. Jeff Espich (R-Uniondale).

GOLF CARTS IN UNINCORPORATED AREAS  SEA 113 authorizes counties to allow the use of golf carts on county roads in rural Indiana.  It also provides that a golf cart may be driven at a right angle across a state highway if it can be done safely.  The bill was authored by Sen. Travis Holdman (R-Markle) and sponsored by Rep. Matt Lehman (R-Berne).

PARTITION  SEA 156 establishes a new procedure for partitioning real and personal property that: (1) requires a court to refer the matter to mediation; and (2) requires the court to order that the property be sold using a method the parties agree upon, or if the parties are not able to reach an agreement, at auction.  It also addresses the procedures and guidelines to be followed when it is necessary to divide real property among heirs.  Sen. Brent Steele (R-Bedford) and Rep. Eric Koch (R-Bedford) were the author and House sponsor of the bill.

REGULATION OF OUTDOOR STAGE EQUIPMENT SEA 273 requires the state’s Fire Prevention & Building Safety Commission (FPBSC) to adopt rules to regulate outdoor stage equipment used in connection with an outdoor performance.  It allows the FPBSC to exempt small assemblies of outdoor stage equipment and specifically allows the adoption of local ordinances that are not inconsistent with the state rules.  These rules, and local ordinances incorporating them, will apply to stages at many county fairs.

The state’s authority over outdoor stage equipment under SEA 273 will expire at the end of 2013.  By that time, it is hoped that a study committee, which the bill calls for, will consider the issues related to the regulation of outdoor stage equipment and recommend permanent legislation to the General Assembly to regulate the use of outdoor stage equipment in Indiana for the purpose of protecting the safety of persons at an outdoor performance.  The bill was authored by Sen. Tim Lanane (D-Anderson) and sponsored by Rep. Bob Cherry (R-Greenfield). 

FIRE PROTECTION TERRITORIES  SEA 307 makes permanent some temporary provisions that were enacted in 2011 regarding public hearing and information requirements that must be satisfied before the legislative body of a local unit can adopt an ordinance or a resolution to form a fire protection territory.  This will benefit rural residents who are often asked to pick up a share of the costs incurred by municipal fire departments before the fire territory was formed.  SEA 307 was introduced by Sen. Brandt Hershman (R-Buck Creek) in the Senate and sponsored in the House by Rep. Heath VanNatter (R-Kokomo).

ELIMINATION OF COMMISSIONS, BOARDS AND COMMITTEES  HEA 1002 is a government streamlining bill that eliminates a number of state boards and commissions that have not met for several years, have been superseded by other entities, or have not received any state funding.  It also eliminates three environmental rulemaking boards (the Water Pollution Control Board, the Air Pollution Control Board and the Solid Waste Management Board) and establishes a new 16-member Environmental Rules Board.  Eleven of the members of the new board will be appointed by the Governor to represent various interests; one will be specifically designated as the agricultural representative.  This bill was authored by Rep. Dave Wolkins (R-Winona Lake) and sponsored by Sen. Connie Lawson (R-Danville).

NEPOTISM, CONFLICTS OF INTEREST  HEA 1005 will place tighter controls on the hiring of family members by public officials and prohibit a public employee from serving the legislative body of the unit that employs him or her.  Specifically, it provides that an employee of a county, city, town or township is considered to have resigned if they are elected to an executive office or to the governmental unit's legislative or fiscal body.  Individuals who were elected before 2013 may finish their current term of office.  HEA 1005 also provides that relatives may not be employed by a unit in positions that result in one person being in the direct line of supervision of a relative.

These changes in the law regarding nepotism and conflict of interest are among the recommendations of the Kernan-Shepard Report that Farm Bureau policy does endorse.  We thank the bill’s author and sponsor, Rep. Kevin Mahan (R-Hartford City) and Sen. Connie Lawson (R-Danville), for addressing this issue.

CEMETERY ACCESS  HEA 1015 grants immunity from civil liability to landowners who grant access to cemeteries that are located on the landowners’ property and allows a family member access to those cemeteries at least three days a year.  Farm Bureau worked with the bill’s author, Rep. Steve Davisson (R-Salem), and its sponsor, Sen. Richard Bray (R-Martinsville), to craft this legislation.

REGIONAL WATER AND SEWER DISTRICTS  HEA 1117 addresses a number of issues and frustrations that rural residents have experienced regarding the operation of the regional sewer districts (RSD) that serve them.  It provides that notice and a hearing must be held before a petition may be filed to establish a district, and it establishes requirements for appointment to the RSD’s board of trustees.  It prohibits a RSD from requiring a property owner to connect to a sewer system if the property has a new septic system.  This prohibition lasts 10 years and may be granted two five-year extensions.  The bill establishes a procedure for ratepayers to object to initial rates and charges established by the RSD.  Farm Bureau worked with interested members of the state Association of Regional Sewer Districts to help develop HEA 1117 over the summer.  Rep. Dave Wolkins (R-Winona Lake) and Sen. Beverly Gard (R-Greenfield) were the author and sponsor of the bill.

EXTRATERRITORIAL WATER AND SEWER RATES  HEA 1126 is intended to require municipal water and sewer districts to justify rates charged to customers outside their municipal boundaries that are more than 15 percent higher than those charged inside the city or town.  When that occurs, the utility’s users who live outside the municipal boundaries may petition the Indiana Utility Regulatory Commission and ask for a determination that the extraterritorial rates are either justified or excessive.  The users must choose between petitioning IURC or filing a lawsuit; they may not do both.  The bill was introduced by Rep. David Frizzell (R-Indianapolis) and sponsored by Sen. Jim Merritt (R-Indianapolis).

CORN MARKETING COUNCIL  HEA 1128 was the legislative priority of the Indiana Corn Marketing Council and was supported by Farm Bureau in both the House and Senate.  The bill repeals a provision that requires the Corn Marketing Council to pay $500,000 a year to the state to fund a tax credit for E85 retailers; it changes the way the 10 percent cap on administrative expenditures is calculated – going forward the cap will be determined by calculating the Olympic average (that is, disregarded in the high and low years) of actual receipts after requested refunds for the past five years; it redefines “producer” for the purpose of the checkoff to more accurately reflect the business structure of today’s farms; it allows the Corn Marketing Council to hold refunds of less than $25 until that amount is reached; and it changes the council’s fiscal year to coincide with the crop year rather than the state’s fiscal year.  Rep. Don Lehe (R-Brookston) and Sen. Beverly Gard (R-Greenfield) were responsible for successfully guiding HEA 1128 through the legislative process.

STATE CHEMIST & RAW MILK  HEA 1129 addresses several issues regarding the Office of the State Chemist and directs the State Board of Animal Health to conduct a study regarding the sale of raw milk.  Among the more significant changes in the law is a provision that will allow the State Chemist to impose civil penalties on persons who are found to be in violation of the agricultural ammonia law.  This is important because now the only options the State Chemist has are to ignore violations or suspend or revoke an individual’s license. 

In Indiana, raw milk may only be sold as pet food although it is widely acknowledged that many Hoosiers purchase raw milk for the purpose of drinking it themselves or giving it to their children.  The State Chemist, who regulates pet food in Indiana, requested specific authority to address the inappropriate labeling and marketing of raw milk.  This led to SB 398 an identical version of the bill in the Senate – being amended on the floor to legalize the sale of raw milk for human consumption.  That bill ultimately died when it was not called for a final vote; however, the bill was amended in the Senate Agriculture Committee so that its final version does require the State Board of Animal Health to conduct a study of raw milk over the summer.

Farm Bureau initially supported both bills but withdrew its support for SB 398 when the language legalizing raw milk sales was added on the Senate floor.  The author of SEA 1129 was Rep. Don Lehe (R-Brookston), and its Senate sponsor was Sen. Ryan Mishler (R-Bremen).

SCHOOL CORPORATIONS AND LOCAL GOVERNMENT FINANCE  HEA 1192 addresses a number of complicated issues faced by financially distressed school corporations.  The bill gives school corporations that meet certain criteria and follow the procedures established in the bill until Jan. 1, 2014 to restructure their debt without going through the petition and remonstrance process and referendum requirements that would otherwise apply.  A school corporation that restructures its debt under the bill’s provisions may not extend its new debt more than 10 additional years.  This bill will immediately help a few school corporations in the state and could be used even more over the next year.  The bill also requires school corporations to give a three-year warning to parents and students before it can cancel transportation services.  HEA 1192 was authored by Rep. Bob Cherry (R-Greenfield) and sponsored in the Senate by Sen. Pat Miller (R-Indianapolis).

TRANSPORTATION OF FOOD PRODUCTS  HEA 1298 addresses the problem of food carriers not maintaining sufficiently low enough temperatures to protect the food.  It authorizes a law enforcement officer to inspect, detain and, if appropriate, impound a motor vehicle that does not comply with the health rules.  Rep. Bill Davis (R-Portland) authored the bill, and Sen. Travis Holdman (R-Markle) sponsored it.

SALE OF POULTRY AT FARMERS MARKETS  HEA 1312 will allow the sale of poultry by individuals at farmers markets and roadside facilities if it is grown and processed by the vendor.  The bill requires the Indiana State Department of Health to adopt rules concerning poultry that incorporate and are consistent with federal rules; and that require poultry to be frozen at the point of sale and labeled in compliance with federal requirements.  HEA 1312 also establishes an interim study committee to study obstacles of local food production, processing and distribution.  It was introduced by Rep. Sue Ellspermann (R-Ferdinand) and sponsored by Sen. Richard Young (D-Milltown).

COMPENSATION FOR FAIR VICTIMS, FULL-DAY KINDERGARTEN, AUTOMATIC TAXPAYER REFUND  HEA 1376 spends the $320 million in corporate income taxes that were collected but not properly deposited in the state’s account.  It provides an extra $6 million for victims of the 2011 Indiana State Fair accident; completes funding of full-day kindergarten which was approved in 2006 but has never been fully funded; and establishes a procedure for taxpayers and public retirement funds to split the excess whenever the state’s reserves hit $50 million.  The bill was introduced by Rep. Jeff Espich (R-Uniondale) and sponsored by Sen. Luke Kenley (R-Noblesville).


Farm Bureau’s success at the General Assembly is measured not only by legislation that passed, but also legislation that Farm Bureau was instrumental in stopping.  The support of rural Indiana for retaining our current local government structure led Farm Bureau to successfully oppose the following local government re-organization bills.

SINGLE COUNTY COMMISSIONER  SB 110 would have eliminated the three-member board of county commissioners as the executive unit of county government and replaced it with a single elected county commissioner.  The bill made it out of the Senate Local Government Committee, but its author, Sen. Travis Holdman (R-Markle), knew there were not enough votes on the Senate floor to pass it so he never asked for a final vote.

TOWNSHIP GOVERNMENT REORGANIZATION  HB 1254 would have required a vote at this year’s general election in all counties – except Marion – on whether or not all the functions currently exercised by the trustee (including township assistance, cemetery maintenance, weed control, parks and fence viewing) should be transferred to the county government.  This bill never made it out of the House Local Government Committee.  At the request of the bill’s author, Rep. Ralph Foley (R-Martinsville), the House did recommend – by a vote of 52-40 – that the legislative leadership establish an interim study committee to study township reorganization.


While there were not many bills Farm Bureau strongly supported that did not survive the legislative process, there were a couple which are listed below.

SEPARATE VOTES IN CONSOLIDATION INITIATIVES  SB 74 would have required separate votes by residents who reside inside and outside municipalities in the case of a proposed merger or consolidation.  This bill, which was introduced by Sen. Connie Lawson (R-Danville), passed the Senate.  However, neither its House sponsor, Rep. Jerry Torr (R-Carmel), nor the House Local Government Committee Kevin Mahan (R-Hartford City) was willing to give it a hearing in the House.

CERVIDAE HUNTING PRESERVES  HB 1265 would have established licensing and inspection requirements as well as fees for hunting preserves.  This would have removed the state of uncertainty under which these facilities are currently operating and provide a reliable market for the state’s deer farmers.  The bill, which was introduced by Rep. Matt Ubelhor (R-Bloomfield), passed the House but died when it was assigned to the Senate Rules Committee.  Both Gov. Mitch Daniels and Senate President Pro-Tem David Long (R-Fort Wayne) were quoted in the state’s media as opposing the bill.


TELECOMMUNICATIONS PROVIDER OF LAST RESORT  HEA 1112 will allow telephone companies that have been designated the “provider of last resort” to abdicate that designation in certain circumstances.  A complicated combination of both state and federal laws and rules is intended to assure that all citizens have telephone service available.  The changes in Indiana law allow a telephone company to notify the Indiana Utility Regulatory Commission that it will no longer accept that designation and the responsibilities that go with it because there were at least two other service providers (cell phone service in most cases) available to customers.  Farm Bureau opposed the bill because many Farm Bureau members and other residents of rural Indiana rely upon their landlines for their primary telephone service because cellular service, although available, is so often unreliable.  HEA 1112 was authored by Sen. Brandt Hershman (R-Buck Creek) and sponsored by Rep. Matt Lehman (R-Berne).

FLOOD CONTROL IN LAKE COUNTY  HEA 1264 addresses a very critical problem in the Little Calumet watershed in Lake County by requiring the Little Calumet River Basin Drainage Commission to levy a special assessment on parcels of land within the Little Calumet River and Burns Waterway watershed in Lake County.  Farm Bureau opposed this bill because by directing a local unit to levy a particular assessment it shifts the responsibility for a decision regarding a local expenditure from local officials to the General Assembly.  We feel this removes accountability for a difficult decision from local officials and establishes a dangerous precedent in addressing controversial local issues.  This bill was authored by Rep. Ed Soliday (R-Portage) and sponsored by Sen. Sue Landske (R-Cedar Lake).


Although Farm Bureau did not become involved in the debate on either right-to-work or a statewide smoking ban, these bills did receive a lot of media attention and consumed a considerable amount of the efforts of the General Assembly this year.  The right-to-work issue provoked several extended absences by House Democrats, delaying progress on a number of bills in the first half of the session.  The session was also marked by an unusual interruption during the first week in February as Indianapolis hosted the Super Bowl.  Bills of general interest are listed below.

UNLAWFUL ENTRY BY POLICE  SEA 1 clarifies that citizens have the right to protect themselves, their loved ones and their property from unlawful acts by police.  Sen. Brent Steele (R-Bedford), who chaired the summer study committee that recommended this bill, introduced it in the Senate.  It was sponsored in the House by Rep. Jud McMillin (R-Brookville).  The bill is a legislative reaction to an Indiana Supreme Court decision which held that citizens do not have the right to protect themselves or their property from unlawful acts by law enforcement personnel.

HUMAN TRAFFICKING  SEA 4 increases the penalties for someone convicted of recruiting, harboring or transporting a child less than 16 years of age with the intent of engaging the child in forced labor, involuntary servitude, prostitution or sexual conduct.  This bill was passed early in the session and signed by the Governor so that it was on the books by the time the Super Bowl took place in early February.  It was introduced by Sen. Randy Head (R-Logansport) and sponsored in the House by Rep. Greg Steuerwald (R-Danville).

RIGHT-TO-WORK  HEA 1001 makes it illegal to require an individual to belong to a labor union (or pay an amount equivalent to union dues) as a condition of employment.  This legislation known as “right-to-work” was authored by Rep. Jerry Torr (R-Carmel) and sponsored by Sen. Carlin Yoder (R-Middlebury).

SMOKING BAN  HEA 1149 establishes a limited statewide smoking ban.  The final bill does not apply to bars and taverns and was not as strong as anti-smoking advocates had hoped for.  The bill does ban smoking in most workplaces and it allows localities to enact more stringent local ordinances.  Although the bill was introduced by Rep. Eric Turner (R-Cicero) and sponsored by Sen. Beverly Gard (R-Greenfield), it represented a victory for the legislature’s long-time anti-smoking crusader Rep. Charlie Brown (D-Gary).


SENATOR LAWSON APPOINTED SECRETARY OF STATE  Following the conviction of former Secretary of State Charlie White of felony voter fraud and the resolution of several issues by the State Supreme Court, Gov. Daniels has appointed Sen. Connie Lawson (R-Danville) to serve the remainder of the term Mr. White was elected to.  Sen. Lawson was currently serving as the Senate’s majority floor leader and as chair of the Local Government Committee.  Previously she had chaired the Senate’s Elections Committee.  Before her election to the Senate in 1996 she served as Hendricks County clerk.  The Republican precinct committee chairs in the Senate District 24 will select Sen. Lawson’s replacement.

FARM BUREAU THANKS RETIRING LEGISLATORS  In addition to Sen. Lawson, there is an unusually large number of legislators who have decided not to seek re-election this year.  Farm Bureau thanks all of them for their service to their constituents and to all the citizens of Indiana.  Serving in the legislature is often a thankless task and all of these individuals deserve the thanks of the entire Farm Bureau organization.  Retiring from the Senate are Richard Bray (R-Martinsville) and Beverly Gard (R-Greenfield).  Retiring from the House of Representatives are Jeb Bardon (D-Indianapolis), Dave Cheatham (D-North Vernon), Bill Crawford (D-Indianapolis), John Day (D-Indianapolis), Nancy Dembowski (D-Knox), Chet Dobis (D-Merrillville), Dick Dodge (R-Pleasant Lake), Jeff Espich (R-Uniondale), Ralph Foley (R-Martinsville), Craig Fry (D-Mishawaka), Dale Grubb (D-Covington), Phil Hinkle (R-Indianapolis), Tom Knollman (R-Liberty), Rich McClain (R-Logansport), Scott Reske (D-Pendleton), Dan Stevenson (D-Highland), Mary Ann Sullivan (D-Indianapolis), Mike White (D-Muncie) and David Yarde (R-Garrett).  Three of the retiring representatives are seeking another office; Rep. Reske is running for the U.S. Congress, and Reps. Sullivan and Yarde are seeking seats in the Indiana Senate.



As we end another legislative session, I would be remiss if I did not acknowledge the efforts of my colleagues on the Farm Bureau lobbying team: Katrina Hall, Kent Yeager, Justin Schneider, Mark Thornburg, Pete Hanebutt, Megan Ritter, Wayne Dillman and of course our President, Don Villwock.  These people all put forth great effort for our lobbying successes as did our assistants BJ Fields and Wanda Hunter.  I also want to thank Farm Bureau’s regional managers who did a great job arranging Statehouse visits and keeping county Farm Bureaus energized throughout the session as well as the many Farm Bureau members who travelled to Indianapolis to visit their legislators at the Statehouse or who contacted them at home.  The high visibility of Farm Bureau and the quality of your visits with senators and representatives contributed significantly to Farm Bureau’s successful session and reinforced our reputation as a truly grassroots organization.

Again this year, Wanda Hunter deserves special recognition for getting the Dispatch produced and distributed every week. Farm Bureau’s Public Affairs team were also most helpful: Kathleen Dutro and Mindy Reef for proofreading the editions, Diane Brewer for posting of the Dispatch on our website, and Mike Anthony for producing a weekly video update on legislative activity and posting it on the Farm Bureau website.

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