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Clean, Drain and Dry

By: Jason D. Reimers, Esq.

Gov. Maggie Hassan has declared June 2016 to be Aquatic Invasive Species Awareness Month.

Just to remind you of how invasive species can harm water quality, property values, tourism, swimming, and boating, milfoil can be spread by just a few-inch piece and then grow up to 15 feet, choking off acres of native species and making it terrible to swim.

The Asian clam is sharp and will cut your feet. Many invasive species, such as the Asian clam, Chinese mystery snail, and the spiny water flea can spread unseen as microscopic larvae in drops of water. This is why it is not enough to simply remove visible vegetation hanging from your boat’s motor or trailer.

Hassan signed into law a bill that prohibits the negligent transport of aquatic plants and aquatic weeds. This law specifically applies to boaters and is applicable to boats on rivers, lakes, and ponds.

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Starting a Home Food Business

Last month I wrote about foods that you can make in your residential kitchen and legally sell to others.  Those foods include baked goods, double-crusted fruit pies, candy and fudge, jams and jellies, packaged dry products, and acid foods such as vinegars and mustards.  Read that article about “homestead food operations” for more details.  This month I want to continue with that topic and talk about what steps you might take in order to actually start a business selling a food you make in your kitchen.

Let’s say that you make a delicious homemade mustard.  Better than French’s.  Better than Grey Poupon.  You satisfy all of the legal requirements to qualify as a homestead food operation to produce the mustard in your home kitchen and sell it to others.  How do you go from making a great product for your family and friends to selling it in stores or at markets?  Well, I don’t know where you can get mustard seeds or turmeric (that is what makes mustard yellow) in bulk.  I can’t tell you where to buy mustard jars.  And I don’t know where to get your labels made.  Those are things you’ll need to figure out.

What I can help you with is establishing a business entity.  Under New Hampshire law, you have several options.  Sole proprietorship.  General partnership.  Limited partnership.  Limited liability partnership.  Limited liability company (LLC).  Corporation.  Non-profit.  Et cetera.

Within each category are more considerations.  For example, do you want to be a sole-member LLC?  Does your investor-friend just want to invest money or does she want to also help run the business?  Are you in business to make a profit or to foster social justice?  Will you have employees?  These and other considerations will inform your decision about what type of business entity you should create.

An important consideration is liability.  You see the word “limited” in many of the names of businesses, such as limited partnership and limited liability company.  For the most part, the word “limited” refers to someone’s personal liability being limited.

Liability for what?  Liability for the debts of the company or for a court judgment against the business, among other liabilities.  You might make great mustard, but if you bought three truckloads of turmeric on credit moments before the market that you sell to goes out of business, you may not be able to pay your turmeric supplier.  You may then find yourself with other bills that you cannot pay.  Maybe the turmeric supplier sues you in superior court and wins a judgment for $20,000.  Maybe you file for bankruptcy or go out of business.  If you are a sole proprietor, for example, there may be nothing protecting you from being personally liable for these business obligations.

If, though, you set up your business in such a way as to separate your personal assets from the business, you would avoid putting your personal assets at risk in the event that the business has liabilities or doesn’t work out as planned.  This is not to say that you can set up an LLC and do whatever you want and never be responsible for anything.  You must treat your business as it is, an entity that is separate from you.  In other words, there are legal formalities that you need to adhere to in order to protect your limited liability status.

There are many other considerations involved with choosing the type of business entity you want to create.  You should consider how you prefer to be taxed, your succession plans for the business, the size of the business, the money and credit available to you, and who else will be involved in running or investing in the business.

Once you decide on the type of business entity, and you’ve come up with a business name, you will have to file certain documents with the New Hampshire Secretary of State (and pay a modest fee).  You may also need to file documents with the Internal Revenue Service if, for example, you want to obtain a tax identification number (TIN), which is also known as an employer identification number (EIN).  You’ll need one of these if you intend to have employees.

There are a lot of other considerations—more than I can address in this article.  But if your mustard is that good, perhaps the hard work is worth it.  However, even the best mustard will not cut the mustard without sound business planning.

Selling Food That You Make In Your Kitchen

Over the holidays, a friend gave us nicely jarred strawberry jam that she made at home.  Another friend spent a Sunday in our kitchen pickling various vegetables, including cauliflower, golden beets, candy cane beets (that was the first I ever heard of those), and radishes.  I heard someone tell each of these people that they should sell their creations.  I bit my tongue each time.   I didn’t want to be the lawyer in the room saying, “Well, you know, you can’t really do that, blah, blah, blah, blah, blah.”  Some retail food can legally be produced in a residential kitchen and some cannot.

There are numerous state and federal laws governing the production and distribution of food.  This article focuses on a small segment of food that can be legally prepared in a New Hampshire residential kitchen and sold to the public.  These foods are called “homestead food products,” and the relevant statute is RSA 143-A.  The New Hampshire Department of Health and Human Services (DHHS) has promulgated administrative rules that flesh out RSA 143-A.

According to the administrative rules, the term “homestead food products” includes the following foods:  baked items; double-crusted fruit pies; candy and fudge; jams and jellies; packaged dry products; and acid foods such as vinegars and mustards.  I love when the law gets this specific.  Generally, these foods can be prepared in a residential kitchen and sold to the public, though if you make jam or jelly from a recipe that is not from the National Center for Home Food Preservation, there are additional requirements that you must meet.

Depending on where you sell the food and how much business you do in a year, you may need a license from DHHS to set up your business as a “homestead food operation.”  There are fifteen municipalities, including Keene, that have their own licensing requirements that are often similar to those of DHHS.

If you produce one or more “homestead food products” and your annual gross sales are less than $20,000 and the food products are sold from the homestead residence, the owner’s own farm stand, farmer’s markets, or retail food stores, then no license is required.

There are two circumstances under which you need a license.  One depends on the volume of sales, and the other depends on where the food is sold.  If your gross sales of homestead food products exceed $20,000, a license is required.  Period.  Next, even if your gross annual sales are less than $20,000, you need a license if you plan to sell your food to restaurants or other retail food establishments, over the Internet, by mail order, or to wholesalers, brokers, or other food distributors that will resell the food.  The license fee is $150 a year and the application is available at the DHHS website.

There are labeling requirements for packaged food that differ depending on whether the food operation is licensed.  Be aware that even homestead food operations that are not required to be licensed must follow the labeling requirements.  The exact wording that must be used is in the statute.  As a consumer of locally produced packaged foods, keep an eye out for labels.  You may see one of the following statements: “This product is made in a residential kitchen licensed by the New Hampshire Department of Health and Human Services”; or “This product is exempt from New Hampshire licensing and inspection.”

There are certain foods that cannot be produced by a homestead food operation.  These are called “potentially hazardous food,” and include cheesecakes, pumpkin pies, custards, soups, sandwiches, pickles, and relish.  This list is put out by DHHS and is not exhaustive.  When I was in law school, I got food poisoning from a homemade custard dessert, so I am happy to see that custards made the “hazardous” list.  Since then, I haven’t been tempted even by a licensed custard.

“Potentially hazardous foods” are foods that require temperature control to prevent such pathogens as botulism and also include low-acid canned foods.  If you want to produce these foods for sale to the public, you are not eligible to be a homestead food operation—licensed or not—and must comply with other food laws that are beyond the scope of this article.

For licensed homestead food operations, there are some requirements in the administrative regulations regarding kitchen set-up.  For example, if your bathroom opens into the kitchen, the bathroom must have self-closing doors and mechanical ventilation.  (And please wash your hands!)  And if you have a laundry machine in the kitchen, you are not allowed to run it during food production.  That seems reasonable.  You might as well wait to do the laundry until you are done making your double-crusted fruit pies so that you can include your amateur chef uniform in the wash.

Permits: Know the law before you work on your property

Attorney Jason Reimers writes a column for the Monadnock Ledger-Transcript. Read his article entitled “Permits: Know the law before you work on your property” published on October 27, 2015.

The Law of Nuisance

By: Jason Reimers, Esq.

You have probably heard of the legal concept of “nuisance.” Maybe your neighbor’s rooster seems like a nuisance. Maybe the noise, traffic, and dust from the quarry next door are bothersome. Maybe someone has called your unruly dog a nuisance.

You don’t want to be a nuisance. Being a nuisance can get you sued. Perhaps more importantly, you should want to be a good neighbor. To help keep you in your neighbors’ good graces—and increase the likelihood that they will share their garden’s bounty with you or alert you to suspicious activity at your home while you are away (I’m speaking from experience)—let’s review what a nuisance is.

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See You In Court

By: Jason Reimers, Esq.

If anyone threatens you with the old cliché, “I’ll see you in court!,” you might respond, “Which court?” Even in New Hampshire there are many different courts, and not all of them involve a judge in a black robe.

In a broad sense of the word, a “court” is any place where a decision-maker decides whether legally sufficient evidence has been presented to prove that one party has violated a duty to, or damaged, the other party in a way for which the law provides a remedy.   For example, in a criminal case the court must decide whether the prosecutor has proven beyond a reasonable doubt that someone has committed a crime. In a civil case, a wrongful act such as negligence or a breach of contract must be proven by a preponderance of the evidence, which is a lesser standard.

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Really Small and Good Beer

By: Jason D. Reimers, Esq.

Once known as a “beer wasteland,” New Hampshire is making its mark in the world of good beer. Becoming the first state in the nation to license “nanobreweries” is part of the reason. Smaller than a microbrewery, a nanobrewery produces less than 2,000 barrels of beer annually. That’s equivalent to about 62,000 gallons, or not quite enough to fill one tanker truck. Compared with Anheuser-Busch, which produce more than 3 million barrels annually in Merrimack, 2,000 barrels of beer seems small. But, most nanobreweries actually produce less.

Before the nanobrewery law, the only way home brewers could sell their beers was with a beverage manufacturer’s license that costs $1,200. A nanobrewery license is only $240, and it permits a brewer to sell beer directly to bars, restaurants and stores, at farmers’ markets, and on-site to individuals.

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Mixing It Up With Farmers

By: Jason Reimers, Esq.

Chances are, you’ve bought something directly from a farm in the past year.  Maybe you picked up eggs or soup bones at Sunnyfield Farm, cheese at Boggy Meadow Farm, or your produce through 1780 Farm’s CSA (Community Supported Agriculture) program.

There are more than 4,000 farms in New Hampshire, and the Monadnock Region has an especially bountiful crop of farms.  New Hampshire’s farms are national leaders in a couple of categories.  First, you may be surprised to learn that New Hampshire’s farms are ranked first in the country in the percentage of goods sold directly from the farm to the consumer. 

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Just Passing Through: Fracked Gas, the Northern Pass, and Tar Sands

By: Jason Reimers, Esq.

With no east-west interstate and a wild northern section, New Hampshire has long been more of a destination than a pass-through state for human travelers. However, fossil fuels are passing through all the time. Several existing pipelines already carry natural gas and oil through New Hampshire, and many companies want to increase and diversify the fuels and electricity flowing through New Hampshire, most of which would be passing through on its way to somewhere else. These projects include the Northern Pass, a pipeline carrying Pennsylvanian natural gas, and pipelines carrying Canadian natural gas and tar sands oil.

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Don’t Fertilize the Lake

By: Jason Reimers, Esq.

As I write this, my backyard has not yet come out from under the snow. When it does, it’s going to be brown and matted. It will eventually turn green, though I won’t spend any time fertilizing it. Weeds look as good as grass when mown. However, if you are someone who likes a grassy green lawn, you may be buying fertilizer soon. I have one request: read the instructions on the side of the fertilizer bag and then follow them. By doing that, you could keep dangerous algae blooms out of our favorite places to canoe, fish, and swim.

A couple months ago, I wrote a column about road salt and the harmful effects that road salt has on our wells and waterways. Road salt contains chloride and sodium. Too much chloride in a lake is toxic for aquatic life. Too much sodium in your well is bad for your health. There are parallels between road salt and fertilizer.

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