Decisions announced today by the Ohio Supreme Court will allow landowners to challenge Current Agricultural Use Valuation (CAUV) land values established by Ohio’s tax commissioner by appealing the values to the Board of Tax Appeals.
Twin rulings in cases filed by a group of owners of woodland enrolled in CAUV, Adams v. Testa, clarify that when the tax commissioner develops tables that propose CAUV values for different types of farmland, holds a public hearing on the values and adopts the final values by journal entry, the tax commissioner’s actions constitute a “final determination” that a landowner may immediately appeal to the Board of Tax Appeals. The Board of Tax Appeals had argued that the adoption of values is not a final determination and therefore is not one that a landowner may appeal to the Board.
The tax commissioner forwards the CAUV tables to the county auditors, who must use the values for a three year period. An inability to appeal the values when established by the tax commissioner would mean that a landowner must wait until individual CAUV tax values are calculated by the county auditor, who relies upon the tax commissioner’s values to calculate the county values. As a result of today’s decision, landowners may appeal the values as soon as the tax commissioner releases them.
The landowners also claimed that the process and rules for establishing the CAUV values are unreasonable and not legal. However, the Court rejected those claims.
For an excellent summary of the Adams v. Testa cases by Court News Ohio, follow this link.
We're happy to return to our blog after a short summer recess, but are sad to have lost fellow blogger and Law Fellow Chris Hogan, who has moved to California. Chris is now in private practice with agricultural attorney Tim Kelleher. We are confident that California agriculture is in good hands!
Our first blog post concerns updates to Ohio’s Agricultural Fertilizer Applicator Certification Program. The Ohio Department of Agriculture (ODA) recently revised the rules in order to fine-tune the program established in 2014 by Ohio’s legislature. ODA made several changes to the certification, education, and recordkeeping requirements for those who apply agricultural fertilizers to more than 50 acres of land in agricultural production. The changes go into effect on October 1, 2017.
Updates to the Certification Requirements
Three modifications to the certification requirements will: 1) provide additional clarity about how the certifications apply to employees, 2) adjust the cycle for when the certifications begin and expire, and 3) establish a grace period to obtain a renewal certification after a prior certification has expired.
- The new rule clarifies how the requirements apply to employees of businesses and farms, a provision that was unclear under the old rule. The certification rule requires all persons who apply fertilizer for the purpose of agricultural production on more than 50 acres of land to either personally have a certificate issued by the ODA Director, or to act under the instruction and control of a certificate holder. The person acting under the certificate holder must be either a family member of the certificate holder, or “employed by the same business or farm as the certificate holder.”
- Instead of starting on June 1 of year one and ending on May 31 of the third year, the certification period for an applicator will run from April 1 of year one until March 31of the third year. The new cycle will avoid mid-season headaches by ensuring that certifications will generally be in place prior to planting season.
- The new rule provides a grace period to certificate holders who do not renew their certificates prior to the expiration of their old certificates. If a certificate holder’s certificate expires before they complete a renewal application, the new rule gives the expired certificate holder 180 days after the date of expiration to complete the renewal process. The primary benefit of this grace period is that within the 180 day period, the application will be treated as a renewal application rather than a new application, which requires fewer training hours.
Updates to the Education Requirements
ODA has modified the education requirements in two important ways:
- The rule provides an examination option as opposed to requiring all applicants to attend a certain number of hours of agricultural nutrient training. This allows individuals who know what ODA wants them to know about the topic to bypass the hours of training requirement.
- The new rule differentiates education requirements for new certification applications and renewal applications. Fewer training hours will be required for renewal applications than new applications.
- New applicants have the option of either attending at least three hours of agricultural nutrient training or passing an ODA-approved fertilizer examination that demonstrates an “adequate knowledge of the fertilizer training requirements.” New applicants must successfully complete one of these options within the twelve months prior to applying for certification.
- Those wishing to renew their certifications have the option of either attending one hour of agricultural nutrient training or passing an ODA-approved fertilizer examination. Those who obtain their fertilizer certificate within twelve months of applying for a renewal certificate do not have to complete the renewal education requirements.
Additional Recordkeeping Requirements
The final change to the program rules adds two new recordkeeping requirements. For each application of fertilizer, the fertilizer certificate holder must record:
- The number of acres on which fertilizer is applied, and
- The total amount of fertilizer applied, by either weight or volume.
These are in addition to the current requirements, which include maintaining records of:
- The date, place, and rate of the application of fertilizer,
- An analysis of the fertilizer applied,
- The name of the individual who applied the fertilizer,
- The name of the certificate holder,
- The type of application method used,
- The soil and weather conditions at the time of application,
- The weather forecast for the day following the fertilizer application, and
- For surface applications, whether the land was frozen and/or snow covered during the fertilizer application.
Each of these must be documented within 24 hours of the application. The existing timing requirements, such as how long the applicator has to submit the information to the certificate holder, have not changed.
For more information, visit ODA’s Agricultural Fertilizer Applicator Certification web page and OSU’s Nutrient Education and Management website. The program rules in Chapter 901:5-4 of the Ohio Administrative Code are here.
Written by Chris Hogan, Law Fellow, OSU Agricultural & Resource Law Program
Several pipeline projects are crisscrossing the state. While some landowners are just seeing equipment and workers show up on their property, others are seeing pipelines be buried and the land being reclaimed. Some Ohio landowners question whether pipelines on their property and reclamation of the land are being carried out properly.
Safety Issues Related to Construction of Pipelines
In certain circumstances, landowners with completed pipelines on their property can contact the Public Utilities Commission of Ohio (PUCO) with their concerns. PUCO has the authority to oversee safety issues on completed pipelines in Ohio. If a landowner is concerned that an existing pipeline on their property has a legitimate safety issue, that landowner should contact PUCO to report suspected safety issues. PUCO inspectors may issue a noncompliance letter to pipeline companies, if a violation is discovered.
If the landowner specifically suspects that the pipeline company is not following recommended standards and construction specifications, local Soil and Water Conservation Districts or the Ohio Department of Agriculture (ODA) may be able to assist. By law ODA must cooperate with other agencies to protect the agricultural status of rural lands adjacent to projects such as pipelines. ODA publishes model pipeline standard and construction specifications intended to limit the impact of construction of a pipeline on agricultural productivity.
Contract Disagreement Issues (Non-Safety Issues)
If a landowner has an issue that is not related to safety, that issue may be addressed in the easement agreement between the landowner and the pipeline company. A pipeline easement is a contract. Both parties agree to uphold their obligations under the contract. Essentially, the landowner agrees to provide subsurface land and access rights to a pipeline company in return for monetary compensation.
Of course, an easement is much more complicated than that. As part of this contractual relationship, a landowner has the right to request that the pipeline company uphold their duties under the contract. If a landowner doesn’t believe that a pipeline company is following the terms of an easement, the landowner has the right to enforce the agreement. While the landowner may seek an attorney to do this, it may be best to work with the pipeline company first.
Landowners should consider keeping detailed notes of issues as they arise. For example, a landowner may wish to take written notes on and photographs of the property after noticing a construction issue. This may be helpful in presenting the issue to the pipeline company. It may be cheaper and faster to raise the issue with the pipeline company first, before speaking with an attorney. However, if a landowner’s complaints aren’t resolved in a timely manner after speaking with the company, the landowner will want to speak with an attorney to enforce the contract.
What to Remember When Speaking with a Pipeline Company Representative
As a practical note, it is important for a landowner to realize that the workers on a pipeline might not be from the pipeline company itself. For example, if a landowner has an issue with the way that the easement is re-soiled and re-planted, it could be a third party that did the work. Landowner’s should re-read their easement to ensure that sub-contracting is allowed. When a landowner calls a company, he or she should realize that the company may not have done the work, but rather a subcontractor completed the work. Therefore, the landowner should fully describe the issue to the pipeline company so that the company understands the issue. Any evidence, such as photographs or written notes may be very helpful in resolving an issue with the pipeline company.
It is always best to identify potential issues early. Landowners may want to check the progress of pipeline construction on their property as it occurs. If there is an issue, landowners should promptly contact the company. Landowners should check their easement agreement to see if the easement outlines a process to dispute terms of the agreement.
If the contract does not outline a process to dispute terms of the agreement, it would be best for landowners to speak with the construction foreman first, then moving up the management chain if the company doesn’t react favorably. If the company and the landowner can’t come to a resolution, the landowner may need an attorney at some point.
Reclamation of the Land
After a pipeline is buried, the soil and the surface of the land is ideally placed back in its original condition. This process is sometimes referred to as reclamation. The pipeline easement agreement between a landowner and a pipeline company usually discusses how this process will be completed. Landowners and pipeline companies often agree beforehand how the land will be reclaimed after the pipeline is constructed. Pipelines may disturb trees, soil, and waterways during the construction process. These disturbances may impact crop yields and grazing habits in future years. For this reason, landowners may wish to carefully monitor the reclamation process and enforce the terms of the easement.
Living with a Pipeline Easement
When landowners have concerns or questions regarding a pipeline on their property, the best place to start is the pipeline easement. Landowners may have recently signed an easement, or landowners may be subject to a pre-existing easement signed by a previous owner of the property. Current landowners are subject to pre-existing easements, because easements “run with the land.” Old easements don’t typically expire, unless the original easement language provides for extinguishment of the easement under certain circumstances (for example, abandonment the easement).
Pipelines are a common tool for the transportation of natural resources. Many Ohio landowners have pipelines crisscrossing their property. Landowners should raise any pipeline safety or construction issues with the appropriate state agency, and any contractual issues should be brought to the pipeline company. As always, a landowner should pay careful attention to the language of the pipeline easement in determining how to approach a potential problem.
More information on pipeline easements is here.
Noxious weed law questions are common in the midst of the growing season and this year is no different. Below is a sampling of frequently asked questions we've received about noxious weed law. Learn more about the laws in our new law bulletin, Ohio's Noxious Weed Laws, available here.
My neighbor doesn’t keep his fence row clear of noxious weeds. What can I do about it?
First, talk to the neighbor. If your neighbor doesn’t respond favorably, the second step is to provide a written notice to the neighbor stating that he has ten days to clear the fence row of the noxious weeds. Third, if the neighbor still doesn’t take action, provide a written notice of the situation to the township trustees, which will initiate a process that could result in the trustees determining that there is a valid need to clear the fence row and hiring some to do the work. Your neighbor will be legally obligated to pay for the costs on his property tax bill.
I’ve been notified by my township trustees that I have noxious weeds on my property. What should I do?
Be aware that you must respond within five days of the date the trustees notified you about the weeds or the trustees will have the authority to destroy. Your options are to destroy or cut the weeds or to provide information to the township trustees showing that there is no need to take action. For example, such information might include showing that noxious weeds don’t exist on the property or showing that plants were incorrectly identified as noxious weeds.
Do I have to destroy my crop if noxious weeds are on my land?
No, Ohio law states that you must only “cut or destroy the weeds” if you have been notified by the township trustees that noxious weeds are on your property.
Noxious weeds are growing in the road right-of-way. Can I remove them myself and charge the township for my costs?
You may remove the noxious weeds, but you will probably not receive reimbursement for your costs unless the township trustees violated their duty to cut the weeds even after you followed the proper legal process for demanding their action. Ohio law requires the township trustees to cut road right-of-way weeds in early June and August, in early September if necessary, and at other times if public safety is at issue. If they fail to do so, you should formally complain to the township trustees in writing or by speaking at a township meeting. If the trustees still fail to take action, the next step is to file a “writ of mandamus” action that asks the court to order the clearing. Seeking reimbursement for your work prior to following this legal process is not the proper method for enforcing the township’s duty, according to the Second District Court of Appeals in Mezger v. Horton, 2013 Ohio 2964.
How do I know which weeds are “noxious”?
The director of the Ohio Department of Agriculture conducts rulemaking to designate a plant as a prohibited noxious weed. The list of plants that the director has formally designated as noxious weeds is in the Ohio Administrative Code and is available at http://codes.ohio.gov/oac/901:5-37-01.
A bill in Ohio’s House of Representatives proposes amending Ohio’s hunting and fishing laws to expand exemptions from hunting, fishing and trapping licenses for grandchildren of landowners.
House Bill 272, sponsored by Rep. Householder (R—Glenford) and Rep. Kick (R—Loudonville) proposes a change to current law, which permits grandchildren to hunt, fish or trap on their grandparent’s land without a license only up to the age of 18. The proposal revises the law to allow grandchildren “of any age” to be exempt from licensing requirements when hunting, fishing or trapping on their grandparent’s land.
The bill also extends hunting and fishing privileges to veterans. The proposed legislation would provide a partially disabled veteran the same free hunting and fishing license privilege currently afforded to a veteran with a total disability.
“Hunting and fishing are family activities,” said Rep. Householder upon introducing the bill. “They should be enjoyed without government intrusion.”
H.B. 272 is currently before the House Energy and Natural Resources Committee and is available for viewing here.
Written by Chris Hogan, Law Fellow, OSU Agricultural & Resource Law Program
Update: The House passed H.B. 49 on May 2, 2017.
The Ohio legislature continues to consider revising the Current Agricultural Use Valuation (CAUV) law that affects taxation of agricultural land. However, the latest legislative discussions are not about Senate Bill 36, introduced by Senator Cliff Hite on February 7, 2017 (read more about that bill here). Instead, current debate centers on a new proposal in House Bill 49, Ohio’s “budget bill.” The House Finance Committee is currently considering that bill.
The budget bill proposal would require the equity yield rate used in the CAUV capitalization rate to equal the greater of either the 25 year average of the total rate of return on farm equity published by the USDA or the loan interest rate. The capitalization rate is used to calculate a valuation from an annual profit for an average Ohio farm, considering only agricultural factors. The proposal would establish a holding period of 25 years for calculating equity build-up and land value appreciation in the formula. Addressing concerns about taxation amounts on land in conservation programs, the bill also would place a ceiling on the taxable value of CAUV land used for conservation purposes by requiring the land to be valued as though it included the least productive soil.
The proposed changes to the CAUV program would be phased in over two reassessment update cycles. The bill would also reconcile the proposed changes with the current formula by specifying that during the first three-year cycle in each county (beginning with tax year 2017), the tax value of CAUV land would include one half of the difference between its value under the new versus the old formula.
Time may soon tell whether Ohio lawmakers will address the agricultural community’s concerns about property tax increases under the current CAUV formula and if so, whether it will prefer the House’s budget bill or the Senate’s proposal. The budget bill is available here--see page 652 of that document for the suggested changes to CAUV. The Senate’s bill, which has received four hearings before the Senate Ways and Means Committee but still remains in committee, is available here.
Written by: Chris Hogan, Law Fellow, OSU Agricultural & Resource Law Program
Farmers are gearing up for spring and preparing to plant crops and graze livestock. Part of spring-cleaning may involve clearing partition fence rows at the edge of fields and trimming back overhanging branches above the fence. Overgrown tree branches can affect crops and pose a hazard to agricultural equipment. Removing trees that obstruct the fence row, noxious weeds tangled in the fence, and other unwanted vegetation is a serious matter for Ohio farmers. Ohio law provides for ways to clear a partition fence shared between two neighboring properties. Ohio law also cautions against damaging trees when trimming overhanging branches.
Clearing the fence row
This section only applies to the removal of vegetation in the fence row. Clearing overhanging trees above the fence is a separate matter discussed further below.
A partition fence is a fence that follows the division line between adjoining properties of two owners. The term “fence row” refers to the strip of land that is on either side of the fence. In order to keep a fence in good condition, owners should occasionally clear the fence row of obstructions caused by vegetation. Clearing a fence row keeps noxious weeds, brush, briers, and other vegetation from spreading onto a neighbor’s property. Ohio law provides several methods for a landowner to clear the fence row legally.
The easiest way to clear the fence row is to ask a neighbor to clear his or her side of the partition fence. Ohio law creates a duty for owners on either side of a partition fence to clear brush, briers, thistles and other noxious weeds in a strip four feet wide along the line of the fence, after a landowner gives notice to a neighbor asking them to do so. It is best to be polite, patient, and clear when speaking with a neighbor about when you would each like to clear the fence row. A landowner and a neighboring owner should try to establish a timeline to clear each side of the fence row.
What if a landowner asks a neighbor to clear the fence row on their side of a partition fence and they refuse? Once a landowner asks a neighbor to clear a fence row, that neighbor has ten days to do so. If a neighbor does not clear it within ten days, the landowner can ask the local board of township trustees to arrange for the fence row to be cleared.
After a landowner notifies the trustees that a neighbor refused to clear the fence row within ten days, the township trustees must view the property to determine if there is just cause for the complaint. Next, if there is a cause for the complaint, the trustees will enter into a contract with a third party to clear the fence row and certify the associated costs to the county auditor. The county auditor will bill the neighboring landowner for the work to clear the fence row. The auditor will assess these costs against the neighboring landowner by adding these costs to his or her property tax bill.
Trimming back overhanging branches
Landowners have the right to trim vertically and remove overhanging obstructions from above their side of the fence. Ohio courts recognize this privilege to remove obstructions, but not without limitations. Ohio courts do not permit landowners to cause harm to the other side of the property line. A landowner should be careful not to damage the neighbor’s trees or trespass on to the neighbor’s property when trimming overhanging branches. Landowners may be liable to a neighbor if they recklessly damage a neighbor’s tree when removing overhanging branches.
Landowners should review their rights and responsibilities to maintain fences prior to clearing the fence row this spring. For more information on line fence law, visit the Ag Law Library here.
Written by: Chris Hogan, Law Fellow, OSU Agricultural & Resource Law Program
If you are an agritourism provider or are interested in learning more about agritourism, sign up for our AgritourismReady event on April 5th! Details of the event are here.
Spring has sprung and many agritourism providers are busy gearing up for spring agritourism activities such as maple syrup production, school tours, and berry picking. Agritourism providers should take time this spring to review the key elements of Ohio’s new agritourism law and understand how the law affects the agritourism operation.
Ohio’s new agritourism law applies to qualifying farms, including you-pick operations and farm markets, when an agritourism activity is conducted on that farm. A qualifying farm under the law is either at least 10 acres in size or a farm under 10 acres that grosses an average income of $2500 from production (the same requirements for qualifying for Ohio’s CAUV property tax program). Agritourism activities include agriculturally related educational, entertainment, historical, cultural, or recreational activities. Below are two important benefits of Ohio’s agritourism law that agritourism providers should review this spring: liability protection and zoning protection.
One of the main benefits of the law is liability protection for agritourism providers against claims by participants injured as a result of an inherent risk of an agritourism activity. The law defines inherent risks to be dangers and conditions that are an integral part of the activity, including surface and subsurface land conditions, actions of wild animals and domestic animals other than vicious or dangerous dogs, dangers of farm structures and equipment, illness from contacting animals, feed or waste, and the participant’s failure to follow instructions or use reasonable caution.
There are several limitations and requirements under the law that impact this liability protection. Most importantly, agritourism providers must post signs either at the entrance to the farm or at each agritourism activity in order to receive liability protection under the law. The signs must meet the specifications of the law. For more information about posting signs and the law’s liability protection, our previous post on agritourism is here.
Ohio’s agritourism law also provides some zoning protections to agritourism providers. Under the law, township and county zoning authorities cannot prohibit agritourism activities on farms. But, townships and counties can regulate some factors related to agritourism to protect public health and safety. These factors include the size of structures used primarily for agritourism, setbacks for structures, ingress and egress from the parcel, and the size of parking areas. A township or county that wants to regulate these limited factors must have provisions addressing the factors in the local zoning code. We explain the zoning provisions of the agritourism law in more detail in our law bulletin, here.
Preparing for the 2017 Season
As agritourism providers prepare for the 2017 season, providers should take a few actions to ensure the benefits of the agritourism law for their operations:
- Post the required signs at the entrance to the agritourism operation or at each agritourism activity. Also, consider adding your own signs to give instructions, guide visitors safely around the property or warn visitors of potential hazards.
- Even with the law’s liability protection, make sure the property is as safe and clean as possible. Spring is a good time to walk the property to identify any dangerous conditions that might put a visitor at risk and fix those conditions before inviting guests on the property.
- Farms under 10 acres in size should take time to brush up on good recordkeeping practices. Farms that are under 10 acres may be required to prove that they qualify as a farm under the agritourism law by showing $2500 in gross receipts. Be sure to maintain all records of farm income.
- If starting a new agritourism activity, check the local zoning code to see if the township or county has zoning requirements for the few agritourism factors it can regulate. Be prepared for a visit by the local zoning inspector and be ready to show the inspector that the activity falls under the new agritourism law’s zoning protections because it is “agritourism” conducted on a “farm.”
A full description of the Ohio Agritourism Law is available via our law bulletin here.
Tags: agritourism liability; agritourism; agritourism zoning; agritourism taxation; premises liability
The Senate Judiciary today heard sponsor testimony for a proposed change to Ohio’s criminal trespass laws. The “purple paint law” proposed by Sen. Bill Coley (R-Liberty Twp.) allows landowners to use purple paint to alert potential trespassers of property boundary lines. The purple paint would serve the same purpose as a “No Trespassing” sign by indicating that a person does not have permission to enter the property.
“It is often difficult for landowners, particularly owners who have large pieces of real estate, to maintain and replace their “No Trespassing” signs on a regular basis,” states Rep. Coley. “This legislation amends Ohio’s criminal trespass law to allow purple paint to be a warning sign for trespassers.”
Ohio’s criminal trespass law establishes misdemeanor penalties for persons who knowingly or recklessly enter or remain on land of another without authorization from the landowner. The law allows several ways for a landowner to notify a potential intruder that access is prohibited: by actual communication, by fencing designed to restrict access, or by signage or posting in a manner reasonably calculated to come to the attention of potential intruders. The proposed bill would clarify that “posting in a manner reasonably calculated to come to the attention of potential intruders” would include placing identifying purple paint marks on trees or posts around the property. The purple marks would have to be readily visible vertical lines at least eight inches long, with the bottom of the mark being at least three feet but no more than five feet from the base of the tree or post and no more than 25 yards from the next paint mark.
Today’s committee hearing is the first for the bill. If the legislation eventually passes through the House and Senate, Ohio would join a dozen other states around the country in allowing purple paint to mark property boundary lines for trespassing purposes. Similar laws exist in West Virginia, Kansas, Arizona, Montana, Arkansas, Idaho, Florida, Maine, North Carolina, Missouri, Illinois and Texas.
Follow the proposed purple paint law, SB 76, here.
Written by: Chris Hogan, Law Fellow, OSU Agricultural & Resource Law Program
Several major pipeline projects, which plan to crisscross the state, are in the final stages of preparation. As part of the planning process for a project, pipeline builders plot the path that the pipeline will travel across the state. That path inevitably crosses private landowners’ property. Some landowners may feel overwhelmed trying to understand the rights of private pipeline companies to cross private property in Ohio. The frequently asked questions discussed below should help answer some of the common questions about pipeline projects in Ohio.
Can a pipeline company come on to my property to conduct a survey?
Yes. Prior to building a pipeline, pipeline companies must select a route where the pipeline is to be constructed. A pipeline project usually crosses private property along a proposed route. When a pipeline must cross private property along the project’s route, the pipeline company will ask the landowner for an easement that allows for pipeline construction on the property. However, even before signing an easement, a survey of the property may be necessary to determine the feasibility of constructing a pipeline on the property. Therefore, a pipeline company may need to enter a landowner’s private property to conduct a survey.
In Ohio, the law allows private companies that are organized “for transporting natural or artificial gas, petroleum, coal or its derivatives . . . through tubing, pipes or conduits” to enter upon private land to examine or survey for pipelines. This means that a pipeline company organized for these specific purposes does have the right in Ohio to enter onto a landowner’s property to conduct a private survey for the purpose of pipeline construction.
A pipeline company is telling me that they might use Eminent Domain to acquire my property. Is that legal?
Most likely, yes. A pipeline company may negotiate an easement with landowners which compensates landowners in exchange for the right to build a pipeline. However, landowners may not want to give a pipeline company the right to cross their property. In that scenario, pipeline companies have the option of crossing a landowner’s property by using eminent domain. Eminent domain is the taking of private property for public purposes with compensation.
In Ohio, the same law that allows for companies that are organized “for transporting natural or artificial gas, petroleum, coal or its derivatives . . . through tubing, pipes or conduits” to enter upon private land for survey also allows those same companies to use eminent domain to take private land. The law states that a company organized for the above purpose “may appropriate so much of such land, or any right or interest [to the land], as is deemed necessary for the laying down or building of pipes . . .” This suggests that pipeline companies have the power of eminent domain in Ohio.
Some argue that the law only grants eminent domain rights for transporting gas, and does not extend the right of eminent domain for the transport of gas derivatives such as ethane. While there is not strong legal support for this argument, it is under litigation in Ohio courts.
To use eminent domain, the pipeline company must prove that the landowner and the company were not able to reach an agreement about granting a pipeline easement and that the taking of the pipeline easement is “necessary.” A pipeline company must establish that the taking of property will serve a “public use.” Ohio courts have noted that the term public use is flexible. Accordingly, Ohio courts have held that private pipelines are a public use if those pipelines provide an economic benefit to Ohio. After establishing necessity and public use, the pipeline company must follow the procedures for eminent domain in Ohio Revised Code Chapter 163.
For an interstate pipeline that runs between Ohio and another state, federal law could allow a company to use eminent domain to obtain land from unwilling landowners. Federal law states that a company may acquire property rights for a gas pipeline if the company has obtained a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission and the company and landowner have not been able to agree on compensation for the pipeline easement. See 15 USC §717(F).
What about the pipeline cases that are in court right now, do those affect my rights?
Ohio landowners have probably heard about several high-profile pipeline projects that are planning to cut across the state. Some landowners have challenged the construction of these pipeline projects on their property. These landowners are challenging the right of the pipeline companies to use eminent domain to acquire an easement on their property. Two pipeline projects in Ohio are of particular interest: Kinder Morgan’s Utopia Project and Rover Pipeline LLC.
A court in Wood County, Ohio decided in 2016 that Kinder Morgan’s Utopia Project, which plans to run across Ohio and into Canada, did not have eminent domain authority. The court concluded that the pipeline did not “serve the public of the State of Ohio or any public in the United States.” The court based its conclusion on the fact that Utopia did not provide a benefit to Ohio. However, Kinder Morgan quickly appealed that case to Ohio’s Sixth Circuit Court of Appeals. Therefore, this opinion is on hold while a higher court decides whether it agrees with the lower court’s interpretation of the eminent domain law.
A second high-profile pipeline case involves the right of Rover Pipeline LLC to use eminent domain for an interstate pipeline project. The Federal Energy Regulatory Commission issued this pipeline project a certificate of public convenience and necessity on February 2, 2017. As a result, Rover Pipeline LLC is moving forward with construction on landowners’ property, because a federal court found that the pipeline company has eminent domain authority.
So how do these court cases affect landowners? First, landowners should be aware that other pipeline projects in Ohio likely have eminent domain authority, if they meet the requirements for eminent domain described by Ohio law. Second, landowners should be aware that that the pipeline case that began in Wood County and is currently being appealed is still pending. It is important to note that this case is reviewing the Utopia Project’s right to use eminent domain in Ohio. Therefore, this does not mean that all pipeline companies in Ohio no longer have the right to use eminent domain to acquire private property in Ohio. Instead, this case will determine the fate of that particular pipeline project and whether or not that project has the right to use eminent domain to acquire an easement. In the meantime, pipeline companies continue to have the right to use eminent domain in Ohio.
More information on pipelines in Ohio and resources for landowners considering signing an easement is available here.