CFAES Give Today
Farm Office

Ohio State University Extension

CFAES

Property

First page of House Bill 64
By: Peggy Kirk Hall, Friday, June 16th, 2023

Eminent domain is one of those topics that always generates concern among farmland owners. That may be part of the reason behind an eminent domain bill sponsored by Representatives Darrell Kick (R-Loudonville) and Rodney Creech (R-W Alexandria), who introduced House Bill 64 in February.  According to the sponsors, the bill would “reform current eminent domain laws to provide landowners with more rights and support.” But HB 64 now faces significant resistance and uncertainty.

What HB 64 proposes

Ohio’s Legislative Service Commission summarizes the procedural changes HB 64 proposes as follows:

  • Voids appropriations (the taking of property through eminent domain) that do not follow statutorily mandated procedures.
  • Increases the taking agency’s (the government or private entity appropriating property) burden of proof in appropriation proceedings.
  • Narrows factual presumptions made in favor of taking agencies in appropriations
    proceedings.
  • Prohibits a taking agency from reducing any offer it makes in an effort to acquire
    property, if the attempts may result in appropriations proceedings, or subsequently arguing for a lower valuation in an appropriation proceeding.
  • Expands required attorney fee, cost, and expense awards due to property owners in appropriation actions.
  • Allows property owners who allege their property has been appropriated outside of the required judicial process to sue for inverse condemnation.
  • Requires courts hearing inverse condemnation cases to award successful property owners’ attorneys’ fees, costs, and expenses.
  • Requires court hearing appropriations cases to award property owner damages if the taking agency uses coercive actions.
  • Lengthens certain appropriation proceeding deadlines.

In addition to revising eminent domain procedures, HB 64 would also prohibit the use of eminent domain to obtain property for recreational trails and to maintain recreational trails—a controversial issue tracing back to the Mill Creek Metroparks bike trail project in Mahoning County.   

Committee hearings on HB 64

HB 64 has yet to pass out of the House Civil Justice Committee since being referred to the committee on February 28.  Three parties testified in favor of the bill a hearing on March 14—Ohio Farm Bureau, Ohio Dairy Producers, and Ohio Council of Retail Merchants.  The parties commended the additional protections given to landowners facing eminent domain proceedings and stated that the reforms in the bill would “prevent excess and unnecessary use of eminent domain.”  Committee members raised several questions about the proposal at that time, and the bill then stalled for two months. 

On May 16, the committee accepted a substitute bill that changed several provisions regarding recreational trails, compensation offers and awards, and relocation assistance—all questions raised in the earlier committee hearing.  Changes in the substitute bill include:

  • A limit the prohibition on using eminent domain for recreational trails, stating that eminent domain could not be used to take property if the primary use of the property would be for a recreational trail and the property is not adjacent to a public road and within a road right of way.
  • Restoration of an agency’s authority to reduce a compensation offer amount if it discovers conditions that it could not have discovered when it make the original compensation offer.
  • Revised amounts that would be awarded to a landowner if a jury’s award of compensation is higher than an agency’s most recent good faith offer and removes a percentage limit on mandatory cost and expense awards.

Despite the substitute bill revisions, 37 parties representing a wide variety of interests submitted opponent testimony at the fourth hearing for the bill on May 23. Local governments and associations such as the County Commissioners Association of Ohio, County Engineers Association of Ohio, Ohio Municipal League, and Ohio Mayors Alliance testified against the bill.  Business interests such as American Electric Power, Ohio Oil and Gas Association, and Ohio Chamber of Commerce also opposed the bill, as did transportation and recreational interests such as Central Ohio Transit Authority, Mid-Ohio Regional Planning Commission, Rails-to-Trails Conservancy, and Ohio Parks and Recreation Association. Several common themes appear in the opponent testimony: that Ohio’s current eminent domain laws are not “broken” but instead effectively balance landowner rights against public needs, that the bill would create negative financial and taxpayer impacts, and that it would hamper economic development and infrastructure and public works projects in Ohio.

What happens next with the eminent domain bill?

The strong resistance to HB 64 certainly signals problems for its adoption and highlights a need for agreement on whether Ohio’s eminent domain law effectively balances public needs and private property rights.  Even so, there are several routes the bill could take from this point:  the committee chair could schedule a committee vote on the bill, the sponsors could hold further “interested party” meetings with the intent to further revise the bill, a Senate sponsor could introduce a similar bill and try to move it through the Senate, or the bill could simply die an early death.

 Civil Justice Committee Chair Brett Hillyer (R-Uhrichsville) did not schedule the bill for a fifth hearing and potential vote for the committee meetings held on June 6 and June 13.  Several opponents encouraged additional “interested party” negotiations and further changes to the proposal.  Based on the resistance to the bill in its current form, if such discussions don’t take place or are not successful, the bill will likely die that early death or arise in a different form in the future.

Read more about and follow HB 64 on the Ohio Legislature’s website.

Posted In: Property
Tags: eminent domain, House Bill 64
Comments: 0
Entrance to OSU Agricultural Administration building
By: Peggy Kirk Hall, Tuesday, April 25th, 2023

Sixty-six undergraduate students just completed our Agribusiness Law class in the College of Food, Agricultural, and Environmental Sciences at OSU yesterday.  It’s always a challenge to teach students all I want them to know about agricultural law in the short time I have with them. And it always generates excitement and relief when I can see that they have learned.

In one assignment this semester, students had to consider the property laws we studied and devise three “real life” questions about the laws.  Next, they had to write the answers to the questions they drafted.  The legal accuracy of their answers is important, of course, and illustrates their comprehension of the laws we studied.  But selecting and writing the questions is equally important, as students must predict when and how the law would apply in a “real world” situation they might encounter.

Many of the student works showed that learning had certainly taken place this semester.  And some of their questions were so insightful and relevant that they should also be useful in the “real world.”  Below are excellent questions and answers from four students.  They illustrate what the students learned, but they will likely be helpful for our readers, too.  Take a look at what our students  are asking and answering about agricultural property laws!

Question 1 comes from Katie Anderholm, a senior from Medina, Ohio majoring in Agribusiness and Applied Economics.

Q:   Am I at risk to be sued from my new neighbors who keep complaining about my cows?
A:  A farmer is not as risk to be sued, or at least rightfully sued, by their new neighbors because of the Ohio Revised Code 929.04 and 3767.13. Both codes, the Right to Farm defense to civil action for nuisance and Ohio’s “Statutory Nuisance” Law, protect farmers and their operations from complaints regarding farming. The farmer’s neighbors who have been complaining about his cows do not have a strong argument for legal action because the agricultural activities were established before they moved adjacent to the farm. If the farmer is following proper animal care and manure handling and the neighbors moved after the farming began, then the neighbors will not have merit for a civil action. I would advise the farmer to have a conversation with the neighbors to ease tensions and explain that they knowingly moved next to a cattle operation and that there are certain things that come with that. I have learned that people who are not involved in agriculture in their everyday life to not understand the fundamentals, and sometimes education and consideration can go a long way.

Question 2 is from Cori Lee, a senior from Marysville, Ohio, graduating this May with a major in Sustainable Plant Systems Agronomy and a minor in Agribusiness.

Q:  Two siblings own ground that was passed on to them by their parents, where one farms, and the other one has no interest in farming. Can one sibling sell the land, even if the other one does not want to? What can be done to prevent losing the ground?
Yes, as co-owners, one sibling can sell their share of the land, even if the other sibling disagrees and is actively using the land for income and farming. This would force the other sibling to either also sell their share of the land or buy the other sibling out. This is explained in Section 5307.01 of the Ohio Revised Code, the partition law. Whether it is considered a “Tenancy in Common” or “Survivorship Tenancy”, they are both subject to partition. The partition process is also explained in Chapter 5307, and is often lengthy and can ultimately result in both owners being forced to sell the land. However, placing the land in an LLC can prevent this situation, as it would remove partition rights completely and the LLC would be treated as the sole owner of the land. This also provides other opportunities to have more control over how the land could be sold and allow terms to be set to buy out other LLC members. In order to avoid a scenario like this, landowners should carefully plan the transition of  their estate to avoid any costly mistakes for the next generation. 

Question 3 is by Kole Vollrath, a senior from South Charleston, Ohio majoring in Construction Systems Management.

Q:  I own a field and the state has contacted me seeking eminent domain for a roadway that they are planning to build cutting directly through my field. I am new to this sort of action and I am wondering what the proper actions will be in this case?
A:  Ohio Revised Code Chapter 163 is the eminent domain law that contains the four required procedures the taking entity (the state in this situation) must provide to the landowner. The first is the notice which you have already received, followed by a “just compensation” offer for the land in question, then appraisal of the property, and then finally a hearing in court to decide on or stop the taking if you don't agree to the offer. In the situation of a road as in this case, it is hard to stop the taking, so the fourth option will likely be more about getting fair money out of the deal rather than stopping construction completely. The reason that it will be hard to stop a road construction is because of Ohio Constitution Article 1 Section 19. This explains that eminent domain is allowed to happen when it is for a valid public use of the property, and since this is a road, it will be hard to argue that is not valid. However, it can still be beneficial to the landowner to hold strong in steps 2 and 3 and get an appraisal, then go to court and try to extract fair money for yourself out of the situation.

Question 4 is from Lyndie Williams, a senior from Bucyrus, Ohio majoring in Agribusiness and Applied Economics.

Q:  Can I be held accountable for damage to a neighbor’s property that they claim is due to water drainage from my property?
A:  In short, yes it is possible to be held accountable for damage to a neighbor’s property if it was caused by water drainage from your property, but not always. While every property owner has the right to reasonably use their land, including water flow and drainage, there can be consequences of this if harm is caused to others. First, determining what is “reasonable” for water drainage when evaluating harm to another is necessary. Courts will look at four factors when determining reasonable drainage: utility of the use, gravity of the harm, practicality of avoiding the harm, and justice. If your purpose for drainage is valid, the harm caused by drainage use is not overly detrimental to others, it is impractical to use an alternative form of drainage, and it is not unfair to require other landowners to bear losses caused by your drainage, then you would not likely be held accountable for damage to their property due to water drainage from your property. However, if some or all of these “reasonable”  requirements are not met, then you would need to look into drainage problem resolutions, as you could be accountable for their damages. Drainage problem resolutions include voluntary fix, drainage improvement projects, drainage easements, and litigation. For example, one drainage problem resolution is a drainage easement which is in writing, recorded, and involves an attorney. In a drainage easement you would pay the neighboring landowner for the right to drain your water onto their property for the damages they will incur as a result. Drainage easements are usually perpetual but can be termed and include access and maintenance rights and responsibilities for the easement holder.

Eminent domain bill page of Ohio General Assembly website
By: Peggy Kirk Hall, Thursday, March 30th, 2023

An eminent domain revisions bill appears to be on hold after its removal from the committee agenda that would have provided the bill a third hearing. House Bill 64 was introduced by sponsors Rep. Darrell Kick (R-Loudonville) and Rep. Rodney Creech (R-W. Alexandria) on February 21.  The bill had two hearings before the House Civil Justice Committee on March 7 and 14, but was removed from the committee’s March 21 meeting agenda. 

House Bill 64 proposes quite a few major changes to Ohio eminent domain law:

  • Voids an appropriation of property if the agency does not follow statutory procedures for the appropriation, such as procedures for appraisal of value, good faith offers of compensation, and negotiation with the landowner.  Under the proposal, a landowner could bring a claim against the agency for violating any of these procedures and the appropriation would be invalid. The proposal is the opposite of current law, which states that procedural violations do not affect the validity of an appropriation of property.
  • Increases an agency’s burden of proof in showing that a taking is for a public use and is necessary, that the agency has authority to appropriate the property, and that the parties are unable to agree on a voluntary purchase of the property. The agency would have to meet the “clear and convincing evidence” burden of proof rather than the “preponderance of evidence” standard stated in current law.
  • Removes two presumptions the law currently makes in favor of an agency.  The first is that an appropriation is necessary if the agency adopts a resolution or ordinance declaring its necessity and the second is that an appropriation for a public utility or common carrier is necessary upon the offering of evidence supporting the necessity.  Removing these presumptions also affects the burden of proof the agency must meet regarding the necessity of a taking.
  • Revises an irrebuttable presumption in current law that an appropriation is necessary if the agency is a common carrier or public utility and a state or federal regulatory authority has approved the appropriation.   The proposal would allow a landowner to rebut this presumption and would limit the presumption only to the specific interests reviewed by the regulatory authority.
  • Prohibits an agency from reducing or revoking the compensation made in an initial offer to a landowner or from later arguing or presenting evidence for a lower amount.  Current law allows an agency to revise an offer if they discover new conditions after making an initial offer.
  • Expands attorney fee, cost, and expense awards for landowners. Current law allows attorney fee and cost awards if an agency challenges a landowner’s appraisal and the final compensation awarded is less than 125% of the agency’s first offer.  The bill would require reasonable attorney fees, expenses, and costs if an agency appeals and does not prevail, in whole or in part.  It also removes a provision requiring a landowner to pay court costs if the landowner denies an agency’s offer and is later awarded less than the offer amount.
  • Awards “coercive damages” to landowners who prove by a preponderance of evidence that an agency used coercive actions during the appropriation process.  Coercive actions include, but are not limited to, advancing the time of a taking, deferring negotiations, deferring the deposit of funds with the court, and attempting to force an agreement on the compensation award.
  • Provides landowners the right to an “inverse condemnation” action, which is a claim that an agency has taken property without filing a court proceeding.  In that case, a landowner may file an inverse condemnation lawsuit in the court of common pleas.  If the landowner proves by a preponderance of evidence that the agency has taken the property, the court can award the landowner compensation and damages for the taking as well as attorney fees, costs, and expenses.  Currently, a landowner must file a “mandamus” action asking the court to order the agency to initiate an eminent domain proceeding and must offer clear and convincing evidence to the court that the agency has taken the property.
  • Extends case timelines.  The bill increases the minimum number of days for the court to set hearing dates.  If a landowner files an answer denying an agency’s authority, the necessity of the taking, or that the parties were unable to agree, the hearing date on those issues would extend from 15 to 30 days after the answer was filed and the compensation hearing date, if the court settles in favor of the agency, would change from at least 60 to at least 90 days after the court settles the issue.  If a landowner could have but failed to file an answer to an eminent domain action, the compensation hearing date would be at least 90 days rather than 20 days from the date the answer was due.  If an owner appeals a court’s determination on authority, necessity, or inability to agree on an appropriation, the bill prohibits the court from setting a compensation hearing until the appeal is final.
  • Removes recreational trails from eminent domain authority.  The proposal states that the use of property for a recreational trail is not a valid “public use” for eminent domain purposes.  Recreational trails, according to the proposal, are trails used for hiking, bicycling, horseback riding, ski touring, canoeing, or other nonmotorized forms of recreational travel. The proposal also excludes the making or repairing of or access management to shared-use paths, bike paths, or recreational trails from the use of eminent domain for making and repairing roads.

In the March 14 committee hearing, the Ohio Farm Bureau Federation testified in support of the bill. Committee members raised questions about the bill’s recreational trail prohibition, initial offer minimum, coercive action awards, and attorney fee awards.  Although the committee chair suggested that a third hearing for opponent testimony would take place in the following week, the bill was later removed from that committee hearing agenda.

Read and follow House Bill 64 on the Ohio General Assembly’s webpage for the bill.

Ohio farm and rural road
By: Peggy Kirk Hall, Friday, February 17th, 2023

It’s the time of year when farmers are cleaning up fence rows and boundary lines to prepare fields for planting season.  Tree law questions pop up a lot during this time.  Here are answers to the most commonly asked questions we receive about trees along boundary lines in Ohio’s rural areas.  Note that there can be different laws addressing trees within a city or village.

Who owns a tree that’s on the property line?

When a tree is on the boundary line between two properties, both neighbors have ownership interests in the tree.  However, if only the branches or roots of a tree extend past the property line and into a neighbor’s property, the branches and roots do not give that neighbor an ownership interest in the tree. 

Can I cut down a tree on the boundary line?

No, not if your neighbor doesn’t agree to the removal.  Because both you and your neighbor jointly own the tree, you must both agree to cutting down the tree.  If you remove the tree without the neighbor’s approval, you could be liable to the neighbor or the neighbor’s share of the value of the tree, or for three times the value of the tree if you behaved “recklessly,” explained further on.

Can I trim the branches of the neighbor’s tree that hang over my property?

Yes, even if the tree isn’t on the boundary line and you don’t have an ownership interest in it, you still have the legal right to trim branches that hang over your property. However, you must take “reasonable care” in trimming the branches.  Failing to act with reasonable care and causing harm such as disease or death of the tree could result in liability.

How does the law determine liability for harming or cutting down a tree?

Ohio Revised Code 901.51 addresses injury to vines, bushes, trees, or crops on land of another, referred to as the “reckless destruction of vegetation law."  The law states that a person shall notrecklessly cut down, destroy, girdle, or otherwise injure a vine, bush, shrub, sapling, tree, or crop standing or growing on the land of another or upon public land.”  The word “recklessly” means the action occurred with complete disregard to the rights of the landowner.  Violations of the reckless destruction law can result in criminal misdemeanor charges or a civil negligence lawsuit by the tree owner.  The law provides potential punitive “treble damages” that make the violator liable for three times the value of the damaged tree, crop, or vegetation.

If my neighbor’s tree falls onto my property, is the neighbor liable for the damage?

Possibly, if the neighbor had knowledge that the tree was diseased, weak, or “patently dangerous.”  If the tree was not in a weakened or damaged condition or the neighbor had no knowledge of its condition, the law would not likely create liability for the damage. You'd have to take action against the neighbor to establish liability, however.  If there is harm to a structure, your insurance provider might be involved and take the lead on establishing responsibility under the neighbor's insurance coverage.   Even so, there is no law that creates an affirmative duty for the neighbor to clean up the tree.  Landowners are expected to use the remedy of “self-help,” i.e., to clean up natural and ordinary tree debris on their property, even if from a neighbor’s tree.  Likewise, the neighbor is expected to clean up debris from your trees that fall onto the neighbor’s property.

Can I keep the timber or firewood from the neighbor’s tree or a boundary tree that fell on my property?

Ohio law doesn’t address this issue.  The “self-help” remedy for tree debris that falls on the property suggests that you are responsible for removing the debris, which could logically allow you to do as you wish with the debris.  But if the tree is valuable or was a jointly owned boundary tree—might the neighbor have rights to the tree or its value?  Because Ohio law doesn’t clearly answer this question, it’s wise to talk with the neighbor and provide a reasonable amount of time for the neighbor to claim ownership and remove their share of the tree.  Document the notice given to the neighbor as well as the timber or firewood resulting from the tree in case the neighbor fails to respond until after tree removal and claims an ownership interest at that time.

United States Department of Agriculture
By: Peggy Kirk Hall, Tuesday, February 07th, 2023

Sometimes a legislative proposal stalls, appears dead, then emerges in another piece of legislation in a slightly different form.  That’s exactly what happened with the Growing Climate Solutions Act and its plan to help farmers with carbon and environmental credit markets.  First introduced in 2020, the bill gained some momentum and passed the U.S. Senate before coming to a standstill in the House. But Congress added the bill, with some negotiated changes, into the Consolidated Appropriations Act it passed in the final days of 2022. The USDA is now charged with implementing its provisions.

Purpose of the bill

The bill aims to reduce barriers for farmers, ranchers, and foresters who want to enter into voluntary markets that establish environmental credits for greenhouse gas emission reductions resulting from agricultural or forestry practices (also known as carbon credits).  It allows the USDA to create the “Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program” if it appears, after an initial assessment, that the program would accomplish these purposes for farmers, ranchers, and private forest landowners:   

  • Facilitate participation in environmental credit markets
  • Ensure fair distribution of revenues
  • Increase access to resources and information on environmental credit markets

Advisory Council

If the USDA determines that the program would meet the above purposes, it must establish an Advisory Council to help guide the program.  At least 51% of the Advisory Council must be farmers, ranchers, and private forest landowners, including beginning, socially disadvantaged, limited resource, and veteran members.  Other members on the Advisory Council would include representatives from agencies, the agricultural and forestry industries, the scientific research community, non-governmental organizations,  and professionals and private sector entities involved in credit markets.

Protocols

A primary concern with the environmental credit market is uncertainty and variations in how to establish, quantify, and value environmental credits.  An important component of the new program is for USDA to publish lists of widely accepted protocols that are designed to ensure consistency, reliability, effectiveness, efficiency, and transparency of the markets along with documents relating to the protocols.  The act directs the USDA to include protocol documents and details on calculations; sampling methodologies; accounting principles; systems for verification, monitoring, measurement, and reporting; and methods to account for issues such as additionality, permanence, leakage, and double counting of credits.

Vendor registry

Another concern for landowners who want to participate in environmental credit markets is knowing who to turn to for technical assistance.  To address this issue, the program would require the USDA to create a registry of third-party vendors of environmental credits who can help farmers, ranchers, and forest landowners measure the carbon reduction benefits of different types of practices.  Unlike an earlier version of the bill, the USDA would not establish a certification program for these vendors, although the agency must ensure that the vendors possess demonstrated expertise in practices that prevent, reduce, or mitigate greenhouse gas emissions. 

Assessments

The USDA, in concert with the Advisory Council, must submit an initial and ongoing assessments to the agricultural committees in the Senate and House.  The initial assessment must examine ways to ensure certainly for farmers, ranchers and forest landowners in the marketplace.  Ongoing assessments would examine the environmental credit market itself, including actors in the market, participation, credits generated and sold, barriers to entry, opportunities for other voluntary markets, and more.

Program funding

The act provides an appropriation of at least $1 million per year to fund the program through 2027 and another $4.1 million of potential unobligated American Rescue Plan Act funds.  It specifically prohibits the USDA from using funds from the Commodity Credit Corporation for the program, a demand of the House Agriculture Committee Chairman Glenn Thompson, who states that those funds are obligated for Farm Bill program payments.

What’s next?

Farm Bill negotiations this year and other climate initiatives recently undertaken by the Biden administration, such as the USDA’s Partnerships for Climate-Smart Commodities, could reduce the focus the Growing Climate Solutions Act would have received if it had passed when first introduced back in 2020.  Even so, the timeclock has started for the USDA to make its initial determination of whether the program would meet the intended purposes. Secretary Vilsack must make that determination by late September, and the expectation is that the program will proceed.  We should then see the Advisory Council established by fall and and can expect program outputs such as protocols and the third-party registry as early as 2024. 

Read the provisions of the new law beginning on page 1,512 of the Consolidated Appropriations Act of 2023, H.R. 2617.

Grain bin on country road with sign opposing solar development
By: Peggy Kirk Hall, Friday, January 20th, 2023

The solar energy “boom” in Ohio continues to encounter opposition from local communities that would be home to large-scale solar developments.  Yesterday, the Ohio Power Siting Board (OPSB) denied a solar project application in Defiance County due to “general opposition by local citizens and governmental bodies.”  Just before the holidays, a project in Greene County met the same fate.  The cases now bring the number of solar project rejections in Ohio to three. Each one highlights the role community opposition can play in project denial, particularly when local governments are part of that opposition.  

How does OPSB review a proposed solar project?

The OPSB is responsible for reviewing applications for solar energy projects that are over 50 MW in capacity.  Currently, the members of the OPSB include the chair of the Public Utilities Commission of Ohio, directors of the EPA and departments of Agriculture, Development, Health, and Natural Resources, and a public member, along with four non-voting legislators.  In the future, a county commissioner and township trustee will also join in the OPSB review process.

Ohio law requires the OPSB to analyze eight criteria when reviewing an application and deciding whether to grant a certificate to construct a major utility facility.  The law states in Ohio Revised Code 4906.10(A) that OPSB shall not grant a certificate unless it finds and determines all of the following:

(1) The basis of the need for the facility if the facility is an electric transmission line or gas pipeline;

(2) The nature of the probable environmental impact;

(3) That the facility represents the minimum adverse environmental impact, considering the state of available technology and the nature and economics of the various alternatives, and other pertinent considerations;

(4) In the case of an electric transmission line or generating facility, that the facility is consistent with regional plans for expansion of the electric power grid of the electric systems serving this state and interconnected utility systems and that the facility will serve the interests of electric system economy and reliability;

(5) That the facility will comply with Chapters 3704., 3734., and 6111. of the Revised Code and all rules and standards adopted under those chapters and under section 4561.32 of the Revised Code. In determining whether the facility will comply with all rules and standards adopted under section 4561.32 of the Revised Code, the board shall consult with the office of aviation of the division of multi-modal planning and programs of the department of transportation under section 4561.341 of the Revised Code.

(6) That the facility will serve the public interest, convenience, and necessity;

(7) In addition to the provisions contained in divisions (A)(1) to (6) of this section and rules adopted under those divisions, what its impact will be on the viability as agricultural land of any land in an existing agricultural district established under Chapter 929 of the Revised Code that is located within the site and alternative site of the proposed major utility facility. Rules adopted to evaluate impact under division (A)(7) of this section shall not require the compilation, creation, submission, or production of any information, document, or other data pertaining to land not located within the site and alternative site.

(8) That the facility incorporates maximum feasible water conservation practices as determined by the board, considering available technology and the nature and economics of the various alternatives.

Once all required elements of an application for a certificate are submitted and the application is complete, which can take many months, the OPSB staff and board begins its evaluation of the application to decide whether to grant the certificate.  The review process, which might include intervening parties and multiple hearings, can last for many months or even a year or more.  During that time, the OPSB must examine the application to determine if it meets the criteria in ORC 4906.10(A), relying on the expertise and recommendations of OPSB technical staff. 

Recently approved solar projects

In December, the OPSB approved the application of Springwater Solar, a 155 MW solar project proposed to be built on 1,085 acres in Madison and Franklin counties, holding that the project met all of the criteria in ORC 4906.10(A).  The decision brings the total of approved solar projects in Ohio to 34, representing 6,175 MW to be built on 63,554 acres, as illustrated on the map below.  The map also displays additional pending applications totaling 3,139 MW and 29,076 acres.

Map

Description automatically generated

A picture containing table

Description automatically generated

Source:  Ohio Power Siting Board, available at https://opsb.ohio.gov/about-us/resources/solar-farm-map-and-statistics.

Recently denied solar projects

Two solar project applications recently reviewed by OPSB did not receive a green light from the board.  In December, the OPSB denied an application by Kingwood Solar that proposed to construct a 175 MW solar facility on 1,200 acres in Greene County.   And on January 18, the OPSB denied a Cepheus Energy proposal to construct a 68 MW solar project on 649 acres in Defiance County.  Before those two rejections, the OPSB had only previously denied one solar project application—the Birch Solar application rejected last October.  In all three instances, the OPSB based its denial on ORC 4906.10(A)(6), stating that the projects would fail to serve the “public interest, convenience, and necessity” due to general opposition.

In the Cepheus application, the board focused on local public interaction and participation, reviewing public testimony and 600 pages of public comments on the project.  The board also noted that seven local governments had expressed concern or opposition to the project, including the Defiance Soil and Water Conservation District, Delaware and Sherwood Township trustees, Defiance County Economic Development Office, Defiance County Board of Commissioners, Delaware Township Fire Department, and Sherwood Area Economic Development Corporation.

The interests of these impacted local government bodies was “especially compelling” given that the organizations have the responsibility for preserving the health, safety, and welfare of their citizens, OPSB noted.  Stating that there was “general opposition from local citizens and governmental bodies” and that local impacts would outweigh the project’s benefits, the board concluded that the project would not serve the public interest, convenience, and necessity.

The Cepheus rejection is similar to the Kingwood Solar project denied by OPSB in December.  In that case, the board reviewed Kingwood’s assertions of the positive economic impacts and renewable energy choices the project would bring the community, then focused on local responses to the project.  About 76% of those testifying during a 6.5-hour hearing were opposed to the projects and expressed an overarching concern that the project was not compatible with local land use plans and would “unalterably change the rural nature of the community.”  The board also noted concerns by the Citizens for Greene Acres, a local group that intervened in the case, regarding the unique characteristics of the wildlife, parks, recreation, cultural, and historic areas that would be affected and the high density of residents that would reside within 500 feet of the project.

But once again, a critical concern for OPSB was the clear opposition of local governments impacted by the project.  Cedarville Township, Xenia Township, Miami Township, and the Greene County Commissioners had all intervened in the case and adopted resolutions opposing the project.  Although Kingwood Solar had agreed to address 39 conditions of development that it had offered in a Stipulation agreement, none of the local governments agreed to the Stipulation and instead opposed approval of the project.  OPSB concluded that local opposition, “especially as demonstrated by Greene County and the three townships affected by the project,” warranted a conclusion that the project would not serve the public interest, convenience, and necessity.

Now what happens?

It’s typical in a rejection of a utility application for the developer applicant to exercise the right to request a rehearing. That has already occurred for the Birch Solar and Kingwood Solar projects, and we can expect a rehearing request for the Cepheus denial that just occurred on January 19.  Interestingly, it was not just the solar developer that requested a rehearing of the Kingwood project application—Greene County, the affected townships, and the Citizens for Greene Acres also requested a rehearing.   While those parties stated support for the decision of the OPSB that denied the certificate, they argue that in its findings, OPSB failed to determine that there were many other grounds for denying the certificate such as incompatibility with local land use planning, incapacitation of 1,025 acres of productive farmland, and negative local economic impacts. 

Now we await the determinations by OPSB on the rehearing applications.  The projects are each on hold, and construction cannot move forward unless the OPSB reverses its decision and approves the applications. 

More questions

The recent decisions by OPSB leaves us asking a few questions.  Does three rejections establish a trend in solar project denials due to community opposition?  Did the communities involved in the 34 solar projects approved by OPSB oppose those projects?  Do the local communities in the projects that are still pending before the OPSB oppose or support the projects, and how will community voices affect the review of those projects?  While we don’t have the answers, we’ll keep monitoring developments in large-scale solar development as we consider these important questions.

By: Robert Moore, Thursday, December 01st, 2022

Legal Groundwork

It is well known among Ohio farmers that installing subsurface drainage in poorly drained soil is a good investment.  However, some landowners are not aware of the value of drainage or may not share the same level of commitment to improve the land.  Furthermore, even if landowners do understand the benefit of subsurface drainage, they may not be willing to pay the substantial cost of installing drainage.  To overcome this obstacle, tenant farmers will sometimes offer to install and/or pay for the drainage tile rather than imposing the cost on the landowner.  This strategy can be a good way to improve the land without burdening the landowner with the entire cost.  If this strategy is used, the lease between the landowner and tenant becomes critical to protect the interests of both parties.

There are three potential strategies for landowners and tenants to implement when installing drainage tile.  The strategies are:

  • Landowner pays entire cost
  • Tenant pays entire cost
  • Landowner and Tenant share costs

In the following discussion, the legal implications of each strategy will be analyzed as well as provisions to include in a written lease to protect both parties’ legal interests.

 

Landowner Pays Entire Cost

As noted above, some landowners are reluctant to pay the entire cost for subsurface drainage. However, there are landowners who will choose to pay for subsurface drainage.  Before deciding upon paying for the tile, the landowner may want to negotiate a higher lease payment with the tenant.  The higher lease payment can be justified by the newly drained farmland being more productive.  The lease should clearly state that the tenant will agree to pay a higher lease payment provided the landowner installs drainage.  An example term to include in the lease could be something similar to:

In the event Landowner installs systematic drainage tile in the leased property, the annual lease rate shall be increased by $______.  The systematic drainage tile shall be installed by a contractor approved by both Landowner and Tenant.

Including a provision like the one above will ensure that the tenant is aware that they will be required to pay a higher lease rate due to the installation of the drainage system.  Also, by having a say in the contractor selected, the tenant can have some assurance that the drainage system will be well designed and properly installed.  Because of the high demand for leased land, it is probably not necessary for the landowner to enter into a long-term lease.  If a tenant opts out of the lease, the landowner will likely have no problem in finding another tenant.

 

Tenant Pays Full Cost of Drainage Improvement

A more common strategy for drainage improvements on leased land is for the tenant to pay the entire cost.  When the tenant pays for the entire drainage improvement, the tenant should insist on including terms in the lease to protect their investment.  These terms should create a long-term lease and provide for a means for the tenant to recoup their investment outlay for the drainage improvement should the landowner terminates the lease early.

The length of the lease should be long enough that the tenant recovers their investment in the drainage.  Lease terms of 10-15 years are often used when the tenants pays the entire cost but the term can be longer or shorter depending on the situation.  The tenant should calculate the increased revenue expected from installation of new drainage to determine the term of lease needed.

For example, Tenant agrees to pay for a new systematic subsurface drainage system.  Tenant expects the new drainage to increase revenue by $100/acre.  The drainage will cost $1,000/acre.  Tenant should be sure to have at least a 10-year lease to recoup their investment.  Perhaps the Tenant should ask for a 12 or 15-year lease to not only recoup costs but to enjoy some of the windfall from the installed drainage.

A provision should be included in the lease that requires the landowner to pay for at least some of the drainage tile in the event the lease is terminated early by the landowner.  An example term could be something similar to:

In the event this Lease is terminated prior to the scheduled termination date, for any reason other than due to Tenant’s breach of terms of this Lease, Landowner shall compensate Tenant the pro-rata cost of the tile paid for by Tenant.  The pro-rata share of the tile cost shall be calculated as follows: (length of lease - number of years installed)/length of lease.

As an example, let’s assume Landowner and Tenant enter into a 10-year lease and the drainage costs $1,000/acre.  Landowner terminates the lease in year 4 to put the land in a solar project.  Using the above formula in the lease provision, Landowner would be required to pay $600/acre to Tenant.

In the example, the Tenant will no doubt be disappointed that the lease is being terminated early, but at least they will recoup their remaining investment in the drainage.  Without such a provision, an early termination of the lease could lead to a Landowner refusing to compensate the Tenant for the drainage or causing a dispute between the parties as to how much is owed the Tenant.

Note:  In this example, Landlord will also likely owe Tenant for lost profits on the remaining 6 years of the lease as well as compensation for fertilizer applied and field operations performed in anticipation of continuing the lease through its full term.

 

Landowner and Tenant Share Cost

It is possible for the tenant and the landowner to share the cost of new drainage.  Sharing the cost might be particularly applicable in a share lease arrangement where the tenant and landowner are already accustomed to sharing costs.  In this scenario, the most important issue for the tenant and landowner to agree upon is how much each party will pay towards the drainage improvement.  The share of the cost is important not only for payment of the initial cost but also to determine what expensing or depreciation is available to the landowner and landowner.

 An example provision to include in this lease could be something similar to:

Tenant and Landlord agree to cooperate on the installation of new subsurface drainage on the Property subject to the following conditions:

  1. Tenant and Landlord shall mutually agree upon the contractor to install the drainage

  2. Tenant and Landowner shall, by mutual consent, determine the placement of the tile, design of the tile system and materials to be installed

  3. The drainage shall be installed on or before (date).

  4. Tenant and Landowner shall share in the costs of the new drainage installation.  Costs shall include all labor, material and any other related costs.

  5. Tenant shall be responsible for ___% and Landlord shall be responsible for ____% of the total costs.

  6. Each party shall be entitled to expense or depreciate their share of the cost

Again, the tenant should require a long-term lease to be sure they gain the benefit of their investment.  The lease should also include a provision to protect the tenant in the event of an early termination as discussed in the previous example.

 

Maintenance and Repair

Regardless of who is responsible for the costs of installing drainage systems, the lease should clearly state who is responsible for maintenance and repair of drainage systems.  There are many ways to address this issue.  In some cases, the landowner may be entirely responsible for maintenance while in other situations the tenant may be solely responsible.  Additionally, the landowner and tenant can agree to share in the maintenance costs.  Establishing who is responsible for maintenance and repair will help alleviate potential conflicts between the landowner and tenant.

 

Seek Legal Counsel

Attorneys with experience in agricultural leases can be a good source of ideas to incorporate into a lease.  Additionally, an attorney can ensure that the lease is drafted and executed properly to protect both tenant and landowner.  A small investment of time and money with an attorney can avoid conflicts and unwanted surprises.

Posted In: Property
Tags: farm leases, drainage improvements
Comments: 0
By: Peggy Kirk Hall, Tuesday, November 08th, 2022

It’s a common problem in Ohio: a dispute between two neighbors over connecting to a subsurface drainage tile system that crosses property lines.  Can one neighbor cut off the other neighbor's access to a tile?  Can one go onto the other’s property to maintain the tile?  If one replaces their system, can they still connect to the other’s tile?  Answers to neighbor drainage questions can be, like subsurface water, a little murky.  But a recent appeals court decision on a Licking County drainage dispute provides a few clear answers.

The drainage system at issue.  Landowner Foor’s clay subsurface drainage system had been on his farm for over fifty years.  Foor’s system connected to a larger drainage tile that ran across neighbor Helfrich’s property and eventually emptied into a pond on Helfrich's land. Foor and his predecessors had used and maintained the line on Helfrich’s property prior to Helfrich’s ownership.

The dispute.  Foor planned to replace his old system and also offered to replace the tile he connected to on neighbor Helfrich’s property.  Helfrich refused the replacement.  During installation of Foor’s tile, Helfrich dug up the tile area near the boundary and filled the hole with rocks and refuse, after which water welled up and flowed over the properties rather than through the tile on Helfrich’s property.  Foor installed a standpipe on his side of the boundary.  Helrich filed a complaint against Foor, claiming that Foor’s drainage was excessive and harmful.  Foor responded by asking the court to establish his rights to a drainage easement and irrevocable license to use the property where the tile ran across Helfrich’s property. A jury ruled in favor of Foor, awarding him $30,000 in damages and both an easement and irrevocable license where the tile ran across Helfrich’s property.

The appeal.  The Fifth District Court of Appeals affirmed two conclusions on the drainage rights of the two neighbors:

  • First, the court held that Foor’s replacement of the pre-existing subsurface drainage system was not an "alteration" of the flow of surface water that would trigger Ohio’s “reasonable use” rule for drainage.  The reasonable use rule allows a legal claim when an alteration of surface water flow causes an unreasonable interference with someone’s property.  Because the newly installed tile did not increase the amount of water draining from Foor’s property and maintained the same amount of drainage that had occurred for over fifty years, the court concluded there was no “alteration” of surface water flow. Without an alteration, the reasonable use rule did not apply and Helfrich did not have a claim against Foor based on the reasonable use rule.
  • Second, the court refused to overturn the jury’s award of a drainage easement and irrevocable license across Helfrich’s land to Foor.  Helfrich argued there was not sufficient evidence for the jury’s verdict but the court disagreed. The jury determined that an “easement by estoppel” existed when Helfrich purchased the property, based on evidence that the easement was apparent and not hidden to Helfrich when he purchased the property; that Foor and his predecessors relied on the drainage access and had previously repaired the tile on the neighboring property; and that the prior owners of the Helfrich property had gone along with Foor’s maintenance and use of the drainage tile on their land.  Likewise, the court held there was sufficient evidence to support the jury’s conclusion that the previous owners of the Helfrich property had granted the prior owners of the Foor property a “license” or right to enter their property and maintain the tile.  The jury determined that substantial investment by Foor and his predecessors suggested that the license was intended to be permanent, and the appeals court found that sufficient evidence also existed to support that conclusion.

How does this affect future drainage disputes between neighbors?  The Fifth District decision provides useful precedent for the difficult questions neighbor drainage disputes raise. The case supports the argument that a landowner has a legal right to maintain a subsurface drainage system that crosses property lines.  As long as there is not an “alteration” of surface water flow and history shows prior use, reliance, and maintenance of the connecting tile line on a neighbor’s property, a landowner can be in a strong legal position for continued use and maintenance of the tile.  Will other appellate courts agree with the Fifth District’s analysis, or will Helfrich ask the Ohio Supreme Court to review the decision?  Answers to those questions, like subsurface water, are a little murky.

Read the Fifth Appellate District's decision in Helfrich v. Foor Family Investments.

Mill Creek MetroParks bike trail
By: Peggy Kirk Hall, Wednesday, November 02nd, 2022

A landowner challenging the taking of land for a bikeway has lost in an appeal to the Ohio Supreme Court.  The decision by the state’s highest court doesn’t address whether Mill Creek MetroParks may take the land for the bike trail, but instead gives the Mahoning County Common Pleas Court the go ahead to continue the eminent domain proceeding.

The landowner’s argument.  Mill Creek MetroParks filed a case in 2019 to appropriate land from Edward Schlegel, who would not voluntarily consent to selling some of his land for the park district’s bike trail extension.  Schlegel sought to have the case dismissed when the Ohio General Assembly included a provision in the state’s budget bill in 2021 intended to address landowner opposition to the Mill Creek MetroParks bike trail.  The new provision prevents any park district in a county of between 220,000 and 240,000 people from using eminent domain for a “recreational trail” until July 1, 2026.  Mahoning County falls within the population range.

Schlegel asked the Mahoning Court of Common Pleas to dismiss the Park District’s eminent domain proceeding against him based on the new law. But Common Pleas Court Judge Sweeney denied Schlegel’s request, stating that the new law did not apply because the legislature passed the law after the Park District filed Schlegal’s case.  Schlegal then asked the Ohio Supreme Court for a “writ of prohibition” that would prevent Judge Sweeney from continuing with the eminent domain case.

The Supreme Court’s reasoning.  In seeking a writ of prohibition, Schlegal had to demonstrate that the common pleas court exceeded its authority and that he had no remedy at law other than a writ of prohibition.  The problem with Schlegel’s request, according to the Supreme Court, is that he did have an alternative and adequate remedy:  an appeal.  When the Mahoning County court issues a decision in the eminent domain proceeding, Schlegal has a right to appeal the decision.  At that time, he could challenge the judge’s decision not to dismiss the case due to the new law.

Schlegel argued that the procedures for an eminent domain case prevented him from challenging the common pleas court’s refusal of his request to dismiss the case.  An eminent domain proceeding has two parts:  the first is a determination of whether the agency has the right to make an appropriation of property and if so, the second is to determine the amount of compensation due for the appropriation.  Schlegel argued that because the new law became effective after the common pleas court determined the Park District had eminent domain authority, he lost his right to appeal that issue.  Not so, according to the Supreme Court.  Schlegel still has the right to appeal whether the park district may use eminent domain when the court issues its final judgment in the case regarding compensation.  A writ of prohibition therefore is not warranted, the Court concluded. 

What now?  Schlegel’s eminent domain case will resume in the Mahoning County court.  We can expect an appeal by Schlegel when the court determines the amount of compensation for the taking. 

Another bike trail case is coming.  In the meantime, the Ohio Supreme Court recently decided to review another case challenging the Mill Creek MetroParks bike trail.  The Seventh District Court of Appeals issued a decision earlier this year in favor of a bike trail challenge by landowner Diane Less.   The court held that the Park District lacked authority to use eminent domain against Less, basing its decision on the insufficiency of the resolutions the Park District passed when it decided to acquire land for the bike trail.  Ohio law allows a park district to use eminent domain authority for two specific purposes:  the conversion of forest reserves and the conservation of natural resources, and the appellate court determined that the Park District’s purpose for using eminent domain to extend the bike trail did not meet either of those purposes.  The Park District appealed that decision and on September 14, the Ohio Supreme Court agreed to review the decision.  The Court will likely hear the case in 2023.

Read the Schlegel v. Sweeney opinion and the Mill Creek v Less opinion online in the Opinions section of the Ohio Supreme Court’s website.

Map of portion of Birch Solar 1 project at OPSB
By: Peggy Kirk Hall, Friday, October 28th, 2022

Highlighting a continuing trend in opposition to solar energy development across the state, the Ohio Power Siting Board has for the first time denied the application of a large-scale solar energy project.  After a string of 34 OPSB-approved projects since 2018, the Birch Solar 1 project became the board's first denial when the OPSB determined the project would not serve the public interest.  

The proposed project.  The Birch Solar application proposed a 300 MW facility in Allen and Auglaize counties with solar panels on 1,410 acres and a total project area of 2,345 acres.  Of the total, 2,132 acres are currently in agricultural use. The project would also include 22.5 miles of gravel access roads, an operations and maintenance building, underground and aboveground electric collection lines, meteorological towers, weather stations, inverters and transformers, a collector substation, a point of interconnection switchyard, and a 345-kilovolt generation interconnection electric transmission line. A six-foot cedar post perimeter fence would secure the project, evergreen fencing would limit impacts to neighboring viewsheds, and solar panels would be setback a minimum of 300 feet from adjacent non-participating residences and roadways.

OPSB’s review.  The OPSB had the duty of reviewing the project application to determine whether it satisfied the legal criteria in Ohio Revised Code 4906.10(A) for siting a major utility in Ohio.  For a solar project, the criteria includes parts (A)(2) through (8):

  1. The nature of the probable environmental impact;
  2. That the facility represents the minimum adverse environmental impact, considering the state of available technology and the nature and economics of the various alternatives, and other pertinent considerations;
  3. That the facility is consistent with regional plans for expansion of the electric power grid of the electric systems serving this state and interconnected utility systems and that the facility will serve the interests of electric system economy and reliability;
  4. That the facility will comply with Chapters 3704., 3734., and 6111. of the Revised Code and all rules and standards adopted under those chapters and under section 4561.32 of the Revised Code;
  5. That the facility will serve the public interest, convenience, and necessity;
  6. What its impact will be on the viability as agricultural land of any land in an existing agricultural district established under Chapter 929. of the Revised Code that is located within the site and alternative site;
  7. That the facility incorporates maximum feasible water conservation practices as determined by the board, considering available technology and the nature and economics of the various alternatives.

The “public interest” factor and public opposition.  OPSB focused most of its analysis of the Birch Solar application on part (A)(6), that the facility “will serve the public interest, convenience, and necessity.” The board explained that the question of whether an application serves the public interest “must be examined through a broad lens and in consideration of impacts, local and otherwise, from the Project.”  The OPSB acknowledged that there can be potential public benefits to a proposed solar facility such as energy generation, economic benefits from employment and tax revenues, air quality and climate improvements, protecting landowner rights, and preserving agricultural land use.  But the board stated that it must weigh a project’s benefits against its impacts, especially impacts to those living near it.  To do so, the board reviewed the application, evidence, and comments on Birch Solar and identified a primary concern:  uniform and consistent public opposition to the project. 

The two counties and four townships where Birch Solar would locate all opposed the project.  Acting under new legal authority granted by Ohio’s legislature last year, Auglaize County has restricted large-scale solar development in all incorporated parts of the county and Allen County has established most of the county as restricted from solar development.  The Birch Solar application is unaffected by the designations since it was in process and grandfathered in before the new law, but OPSB noted that had the new law been in place, the county restrictions would have prohibited the project. 

OPSB also reviewed evidence submitted by Allen County officials stating that there would be 1,278 residences, four schools, and six churches within one mile of Birch Solar’s project area, and that the residents shared concerns about the project’s lack of dedicated local power; its impact on land use, property values, drinking water, groundwater, drainage, and roadways; its decommissioning plan; and negotiations on distributing “payment in lieu of taxes” revenue to local governments.

Of the hundreds of public comments submitted on the Birch Solar application, OPSB determined that approximately 80% of the comments were in opposition to the project and that opposition reasons were similar to those raised by the local governments.  Birch Solar argued that it had agreed to 40 stipulated conditions that would address opposition concerns and had offered to make “good neighbor” payments of $10--$50,000 and property value adjustments to adjacent landowners.  Even so, the OPSB concluded that Birch Solar would not serve the public interest, convenience, and necessity requirement because of “unanimous and consistent opposition to the Project by the government entities whose constituents are impacted by the Project.”

What’s next?  The battle may not be over.  Birch Solar has the right to request a rehearing and reconsideration of its application within 30 days of the OPSB decision.  For now, the board’s denial of the project might invigorate opposition groups that have formed in areas where projects are proposed.  But note that on the same day OPSB denied Birch Solar, it approved Pleasant Prairie Solar in Franklin County, a 250 MW facility with a 2,400 acre project area and Harvey Solar, a 350 MW project of 2,630 acres in Licking County.   And 15 more projects totaling 3,266 MW are currently pending before the OPSB.  Whether local opposition will prohibit any of those projects is an issue we’ll be watching.

Read more about the Birch Solar project in the OPSB case docket at https://opsb.ohio.gov/cases/20-1605-el-bgn.

Pages

Subscribe to RSS - Property