property tax
With Memorial Day behind us, the unofficial start of summer is here, and we are back to bring you another edition of the Ag Law Harvest. In this Harvest we discuss OSHA’s proposed workplace heat hazard standards, DOL’s new H-2A Farmworker rule, an interesting income tax credit in Colorado, and a proposal to limit Ohio property tax increases.
OSHA Advances Proposed Rule to Mitigate Workplace Heat Hazards.
The U.S. Department of Labor's Occupational Safety and Health Administration (“OSHA”) announced that it is advancing a proposed rule to mitigate workplace heat hazards, following unanimous approval from an advisory committee. The rule aims to protect workers from heat-related illnesses and fatalities, particularly in agriculture. While OSHA works to finalize the proposed rule, OSHA “continues to direct significant existing outreach and enforcement resources to educate employers and workers and hold businesses accountable for violations of the Occupational Safety and Health Act’s general duty clause, 29 U.S.C. § 654(a)(1) and other applicable regulations.” Assistant Secretary for Occupational Safety and Health Doug Parker explained that as OSHA moves through the regulatory process, “OSHA will use all of its existing tools to hold employers responsible when they fail to protect workers from known hazards such as heat. . .” Since 2022, OSHA's National Emphasis Program has conducted nearly 5,000 inspections to proactively address heat-related hazards in workplaces with high heat exposure. The agency prioritizes inspections in agricultural industries employing temporary H-2A workers, who face unique vulnerabilities. Employers are reminded that they are legally required to protect workers from heat exposure by providing cool water, breaks, shade, and acclimatization periods for new or returning workers. Training for both workers and managers on heat illness prevention is also essential.
Department of Labor Finalizes and Publishes Rule Enhancing Protections for H-2A Farmworkers.
The U.S. Department of Labor (“DOL”) announced a final rule to strengthen protections for H-2A farmworkers. The new rule titled “Improving Protections for Workers in Temporary Agricultural Employment in the United States” includes the following provisions:
- Adding new protections for worker self-advocacy: The final rule enhances worker advocacy by expanding anti-retaliation protections and allowing self-organization and concerted activities. Workers can decline attending employer-led meetings that discourage union participation. The rule permits workers to consult legal and other key service providers and meet them in employer-furnished housing. Additionally, workers can invite guests, including labor organizations, to their employer-provided housing.
- Clarifying “for cause” termination: The final rule clarifies that a worker is not “terminated for cause” unless the worker is terminated for failure to comply with an employer’s policies or fails to adequately perform job duties in accordance with reasonable expectations based on criteria listed in the job offer. Additionally, the rule identifies five conditions that must be met in order to ensure that disciplinary and/or termination processes are justified and reasonable: These five conditions are: (1) the worker has been informed, in a language understood by the worker, of the policy, rule, or performance expectation; (2) compliance with the policy, rule, or performance expectation is within the worker’s control; (3) the policy, rule, or performance expectation is reasonable and applied consistently to H-2A workers and workers in corresponding employment; (4) the employer undertakes a fair and objective investigation into the job performance or misconduct; and (5) the employer corrects the worker’s performance or behavior using progressive discipline.
- Seat Belts: Any employer provided transportation must have seat belts if the vehicle was manufactured with seat belts. All passengers and the driver must be wearing seat belts before the vehicle can be driven.
- Ensuring timely wage changes for H-2A workers: The final rule establishes that the effective date of updated adverse effect wage rates is the date of publication in the Federal Register.
- Passport Withholding: The final rule prohibits an employer from holding or confiscating a worker’s passport, visa, or other immigration or government identification documents. An employer may, however, hold a worker’s passport for safekeeping only if: (1) the worker voluntarily requests that the employer keep the documents safe; (2) the employer returns the documents to the worker immediately upon their request; (3) the employer did not direct the worker to submit the request; and (4) the worker states, in writing, that the three conditions listed above have been met.
The final rule is effective on June 28, 2024. However, the DOL has made it clear that H-2A applications filed before August 28, 2024, will be subject to the current applicable federal regulations. Applications submitted on or after August 29, 2024, will be subject to the new rule. For more information, visit the DOL’s “H-2A Employer’s Guide to the Final Rule ‘Improving Protections for Workers in Temporary Agricultural Employment in the United States.’”
Colorado Establishes State Income Tax Credit for Qualified Agricultural Stewardship Practices.
Beginning in 2026 Colorado farmers and ranchers will be able to qualify for an income tax credit for actively engaging in conversation stewardship practices. The newly enacted legislation creates three different tiers of income tax credits.
- Tier 1: A state income tax credit equal to at least $5 and no more than $75 per acre of land covered by one qualified stewardship practice, up to a maximum of $150,000 per tax year.
- Tier 2: A state income tax credit equal to at least $10 and no more than $100 per acre of land covered by two qualified stewardship practices, up to a maximum of $200,000 per tax year.
- Tier 3: A state income tax credit equal to at least $15 and no more than $150 per acre of land covered by at least three qualified stewardship practices, up to a maximum of $300,000 per tax year.
However, only $3 million worth of tax credits can be issued in one tax year. Any claims for the tax credit beyond the $3 million dollars are placed on a waitlist in the order submitted and a certificate will be issued for use of the agricultural stewardship credit in the next income tax year. No more than $2 million in claims shall be placed on the waitlist in any given calendar year. Additionally, only one tax credit certificate may be issued per qualified taxpayer in a calendar year, and the taxpayer can only claim the credit for up to three income tax years.
Ohio House of Representatives Proposes Joint Resolution to Limit Property Tax Increases for Ohio Property Owners.
The Ohio House of Representatives have proposed to enact a new section in Article I of Ohio’s Constitution. Section 23 would limit property tax increases on Ohioans. Under the proposed change, the amount of real property taxes levied on a parcel of property cannot exceed the amount of tax levied on that parcel in the preceding year plus the rate of inflation or four percent, whichever is lower. There are some exceptions that allow a one-time increase in property tax liability in excess of the four percent limit. The exceptions include: (1) when a parcel is divided; (2) the expiration of a tax exemption, abatement, or credit that applied to the parcel in the preceding year; or (3) when a building is completed or significantly improved and is added to the tax list on the parcel. We will continue to closely monitor how the proposed resolution fares in committee and beyond. If the resolution passes both chambers of the Ohio Legislature, the proposed change would be voted on in the November 5, 2024, election.
Tags: OSHA, Department of Labor, H-2A, Income Tax, Colorado, Ohio, property tax
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The Ohio General Assembly is back in Columbus after the March 19th primary election, and committee schedules are already filling up. Given the increased activity in recent weeks, we thought it was a good time to examine what has happened legislatively this year up until this point.
H.B. 64—Eminent Domain. This bill was first introduced by Representatives Kick (R-Loudonville) and Creech (R-West Alexandria) in February of 2023. The bill’s purpose is to make it more difficult for governmental agencies or private entities to take private property through eminent domain. On February 6, 2024, the bill was updated with a Substitute House Bill 64 in the House Civil Justice Committee.
The previous version of the bill excluded recreational trails from the definition of “public use,” meaning that property could not be taken by a government agency for recreational trails. The current version of the bill narrows this language, allowing for a taking for the purpose of creating recreational trails, but not in cases where the property is not adjacent to a public road and where the property’s primary use will be for a recreational trail.
Another substantial change between the versions involves compensation offers from the government entity to the landowner. In the original version of the bill, a government entity would not have been allowed to reduce an offer made to purchase property before proceedings commenced if the reduction was based on hard-to-discover issues with the property. The current version would exclude this provision, restoring an agency’s authority to reduce offers.
Substitute House Bill 64 would also make changes to compensation and awards landowners could receive if the issue goes to court.
H.B. 197—Solar Development. Sponsored by Representatives Hoops (R-Napoleon) and Ray (R-Wadsworth), H.B. 197 would establish a the community solar pilot program and the solar development program. Under the language of the bill, a “community solar facility” is defined as a single facility with at least three subscribers and a nameplate capacity of 10 megawatts or less, or 20 megawatts or less if on a distressed site. Furthermore, the bill would require The Public Utilities Commission of Ohio (PUCO) to establish a Community Solar Pilot Program of 250 megawatts on sites in the Appalachian region of the state. The bill would also amend the state competitive retail electric service policy to encourage community solar facilities in the state and allow subscribers to community solar facilities to receive monthly electric bill offsets.
H.B. 324—Motor Fuel. Introduced by Representatives McClain (R-Upper Sandusky) and Klopfenstein (R-Haviland) in November of 2023, H.B. 324 passed the House on February 7, 2024 and was referred to the Senate Ways and Means Committee on February 27.
If passed, the bill would authorize a temporary, nonrefundable income or CAT tax credit of 5 cents per gallon for retail dealers who sell high-ethanol blend motor fuel containing between 15-85% ethanol. The tax credit would be limited to five years or to a total of $10 million, whichever occurs first.
H.B. 327—Employee Verification. H.B. 327, introduced by Representatives Wiggam (R-Wayne County), and Swearingen (R-Huron), had its first committee hearing in House Commerce & Labor on February 13, 2024. The bill would require political subdivisions, private employers employing 75 individuals within the state of Ohio, and nonresidential construction contractors to verify each new employee’s work eligibility through the federal E-verify program. E-Verify is an online program that helps employers verify employees’ eligibility for employment. If the bill were to pass, the employer would be required to keep a record of the verification for the duration of the employee’s employment, or three years, whichever is longer. During testimony on the bill, Representatives Wiggam and Swearingen indicated an interest in possibly lowering the employee threshold, citing Florida’s 25 employee threshold.
H.B. 347—Farming Equipment Taxes. This bill was introduced by Representative Don Jones (R-Freeport) and referred to the House Ways and Means Committee in early December of 2023. Since then, the bill has been heard in committee twice, once in January, and once in February, both times without testimony. The bill would change the way farmers claim a tax exemption on certain purchases.
Currently, when an Ohioan engaged in farming, agriculture, horticulture, or floriculture is buying a product for “agricultural use,” they must provide the seller with an exemption certificate. This certificate comes from the Ohio Department of Taxation and relieves the seller of the obligation to collect the sales tax on behalf of the state. However, the Department of Taxation can later determine that the purchase does not qualify for exemption, and then the farmer would be expected to pay the tax.
H.B. 347 would slightly alter this current way of doing things when it comes to the purchase of certain vehicles and trailers. Under the bill, the purchaser could receive an agricultural use exemption for taxes on these vehicles if the purchaser shows the seller copies of the purchaser’s Schedule F—the federal income tax profit of loss from farming form—for three most recent preceding years. Alternatively, a farmer could obtain a certificate from the Department of Taxation verifying that they have filed a Schedule F for three years in lieu of providing the forms directly to the seller. Notably, the bill states that “no other documentation or explanation shall be required by the vendor or the tax commissioner” to prove that the purchase qualifies for the agricultural use exemption.
The following vehicles and trailers would be included under the bill:
- Trailers, excluding watercraft trailers;
- Utility vehicles, (vehicles with a bed, principally for the purpose of transporting material or cargo in connection with construction, agricultural, forestry, grounds maintenance, land and garden, materials handling, or similar activities);
- All-purpose vehicles, (vehicles designed primarily for cross-country travel on land and water, or on multiple types of terrain, but excluding golf carts);
- Compact tractors (garden tractors, small utility tractors, and riding mowers).
H.B. 364—Seed Labeling; Noxious Weeds. Sponsored by Representatives Dobos (R-Columbus), and Klopfenstein (R-Haviland), H.B. 364 had its first hearing in the House Agriculture Committee on February 6, 2024. Specifically, the bill would allow the Ohio Prairie Association and other noncommercial entities sharing seeds to distribute milkweed seeds non-commercially to i members, with the intent of promoting habitats for pollinators like monarch butterflies.
The bill would legally define “non-commercial seed sharing” as the distribution or transfer of ownership of seeds with no compensation or remuneration. Also included in the definition are a list of situations that are not considered “non-commercial seed sharing,” including when:
- The seeds are given as compensation of work or services rendered;
- The seeds are collected outside of Ohio;
- The seeds are patented, treated, or contain noxious weed species or invasive plants.
H.B. 364 also includes a definition of “seed library,” which it defines as a non-profit, governmental, or cooperative organization or association to which both of the following apply:
- It is established for the purpose of facilitating the donation, exchange, preservation, and dissemination of seeds among the seed library’s members or the general public.
- The use, exchange, transfer, or possession of seeds acquired by or from the non-profit governmental, or cooperative organization or association are obtained free of charge.
The bill would further exempt non-commercial seed sharers and seed libraries from labeling, advertising, handling, and sales restrictions under Ohio law.
To further the goal of promoting pollinators and habitats, H.B. 364 would make changes to the requirements for maintaining toll roads, railroads, or electric railways. Current law requires managers of such thoroughfares to destroy a number of noxious weeds along the roadway or in right of ways. The bill would no longer require the destruction of Russian thistle, Canadian thistle, common thistle, wild lettuce, wild mustard, wild parsnip, ragweed, milkweed, or ironweed.
H.B. 447—Property Tax. Introduced on March 12, 2024 by Representative Loychik (R-Cortland), H.B. 447 was referred to the House Ways & Means Committee on April 2, 2024. The bill would modify and expand property tax homestead exemptions, gradually reduce school districts’ 20-mill floor for tax levies and modify the formula for determining farmland’s current agricultural use value (CAUV). The change to CAUV would involve the calculation of the overall capitalization rate for agricultural land. Current law does not establish a minimum rate, but the bill would do so by stating that overall capitalization rate plus additur shall not be less than 10 percent. Since a higher capitalization rate results in a lower CAUV value and because the current capitalization rate is around 8%, the change would likely lower CAUV values.
S.B. 156—Scenic Rivers. This bill, sponsored by Senators Reineke (R-Tiffin) and Hackett (R-London) passed the Ohio Senate on January 24, 2024, and was referred in the House to the Energy and Natural Resources Committee on February 6, 2024. The bill would transfer the Wild, Scenic, and Recreational Rivers Program from the Division of Parks and Watercraft to the Division of Natural Areas and Preserves (DNAP) in ODNR. The bill would narrow the scope DNAP’s authority to watercourses designated as wild, scenic, and recreational rivers. Currently, the law is written so that the regulatory agency has authority over areas. “Areas” encompass not just the water, but also the land surrounding rivers. On the other hand, “watercourses” are defined as “substantially natural channel[s] that [are] at least five miles in length with recognized banks and a bottom in which the flow or water occurs.” Thus, agency oversight would be diminished from the river and its surrounding area to just confines of the river itself.
The bill also clarifies that a watercourse designation does not affect private property rights adjacent to a designated river.
Finally, the bill would require DNAP to adopt rules for the use, visitation, and protection of scenic river lands and provide for the establishment of facilities and improvements that are necessary for their visitation, use, restoration, and protection, but do not impair their natural character.
S.B. 226—Agricultural Land. S.B. 226 was introduced by Senator Terry Johnson (R-McDermott) in late February and referred to the Veterans & Public Safety Committee on February 27, 2024. The bill would create the Ohio Property Protection Act, which would include protection of:
- Agricultural land, defined as “land suitable for use in agriculture,” including the water on the land, airspace above the land, and natural products and products from the land;
- Any land located within a twenty-five-mile radius of any installation under the jurisdiction of the United States Armed Forces;
- Any land located within a twenty-five radius of a critical infrastructure facility.
To protect property in the above categories, the bill would make it illegal for the following people and entities to acquire or purchase such property:
- Those persons and foreign adversaries listed on a registry compiled by the Ohio Secretary of State;
- A government of a foreign adversary;
- An individual who is a citizen of a foreign adversary;
- A business that is headquartered in a foreign adversary;
- A business that is directly or indirectly owned or controlled by one or more of the above persons and entities; and
- An agent, fiduciary, or trustee of the above persons and entities.
Tags: Ohio legislation, Ohio legislature, eminent domain, ethanol, solar, sales tax, foreign land ownership, cauv, property tax, scenic rivers
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Responding to concerns about potential increases in Ohio property taxes, the Senate passed House Bill 187 (HB 187) this week to provide some relief from property tax hikes. That relief, however, affects only the Ohio homestead exemption. The Senate removed provisions the House had passed in HB 187 offering relief on other property taxes, including Current Agricultural Use Valuation (CAUV) taxes. The House and Senate differences mean the CAUV adjustments originally in HB 187 are currently at a standstill.
House Bill 187. The House passed its version of HB 187 in October. The House version included provisions that would temporarily adjust CAUV calculations until 2026. When updating the CAUV value, a county auditor would be required to use an average of the CAUV formula value for the current year along with CAUV values that would have been assigned in each of the preceding two years, since the last update. This three year averaging would lower the expected increase in the new CAUV value. But the Senate drafted and passed a substitute of HB 187, and the substitute bill does not contain the CAUV language. The House and Senate must now confer on its differing versions of HB 187 to work out the differences.
Senate Bill 153. The Senate isn’t completely ignoring the CAUV adjustments—they exist in another bill. Senate Bill 153 (SB 153), introduced in the Senate back in September, contains the same CAUV language as HB 187. The Senate Ways and Means Committee held four hearings on SB 153 in September and October. But the committee has not taken any action on the bill since the last hearing on October 11.
What’s next for CAUV relief? There are two avenues to enacting the CAUV three year averaging provisions that could bring some relief from CAUV increases. First is for the Senate to reinsert the provisions in HB 187. The second is for the Senate to pass SB 153 and send it over to the House for consideration. From our view, it’s difficult to gauge if the House and Senate are on the same page for completing either route.
Follow HB 187on the legislature’s website at https://www.legislature.ohio.gov/legislation/135/hb187 and track SB 153 at https://www.legislature.ohio.gov/legislation/135/sb153.
Two separate, but very similar, pieces of legislation are working their way through the Ohio Legislature and could end up affecting your farmland’s current agricultural use value (“CAUV”). House Bill 187 (“HB 187”) and Senate Bill 153 (“SB 153”) both seek to adjust how property values are assessed in Ohio and some of those proposed changes specifically affect CAUV.
Both proposed bills aim to make temporary adjustments to CAUV for farmland. These changes will impact farmland that undergo reappraisal or triennial updates in 2023, 2024, or 2025. The adjustment does not alter the CAUV formula itself but rather calculates a farm's CAUV at its next reappraisal or update as the average between the CAUV for that year and the CAUV it would have if it were in a county that had reappraisals or updates in the two previous years.
The Ohio Legislature has provided the following example: “[C]onsider a farm located in a county that undergoes a reappraisal in 2023. If the formula were applied for that year, the farm’s CAUV would be $200 per acre. However, if the farm had been reappraised in 2022, its value would have been $190 per acre, and if it had been reappraised in 2021, its value would have been $180 per acre. Under the bill, the farm’s reappraisal value will be $190 per acre (the average of $180, $190, and $200).”
Again, these proposals for CAUV adjustments are only temporary, and the current valuation rules will be reinstated starting in 2026. For example, if the farm mentioned above undergoes a triennial update in 2026, its value will be determined without averaging, following the currently existing rules. Furthermore, if the 2023 CAUV tables, which prescribe the per-acre value of each soil type, have already been published before the proposed legislation takes effect, the Ohio Department of Taxation must update these tables within 15 days after the bill becomes effective to reflect the changes introduced by the Legislature.
As of the morning of October 5, 2023, HB 187 has gone through committee and is ready to be voted on by the House. The Ohio Senate had its third hearing on SB 153 on October 3, 2023, but has yet to report the bill to the floor for a vote. Some County Auditors have come out in “indirect opposition” to both bills, arguing that the proposed legislation would create a logistical nightmare for tax billing purposes. Lastly, there are some differences between the two pieces of legislation - unrelated to CAUV - that would have to be worked out between the House and Senate before we have a final bill that could take effect. We will continue to monitor the situation and keep you up to date on any changes.
The year is still fairly new, and 2020 has brought with it some newly-introduced legislation in the Ohio General Assembly. That being said, in 2020 the General Assembly also continues to consider legislation first introduced in 2019. From tax exemptions to CAUV changes, to watershed programs and local referendums on wind turbines, here is some notable ag-related legislation making its way through the state house.
New legislation
- House Bill 400 “To authorize a nonrefundable income tax credit for the retail sale of high-ethanol blend motor fuel”
HB 400 was introduced after our last legislative update in November, so while it was first introduced in 2019, it still technically qualifies as “new” to us. Since its introduction, the bill has been discussed in two hearings in the House Ways & Means Committee. The bill would give owners and operators of gas stations a tax rebate of five cents per gallon for sales of ethanol. To apply, the fuel would have to be between 15% and 85% ethanol (E15). If passed, the tax credit would be available for four years. The bill is meant to encourage gas station owners in Ohio to sell E15, which is much more readily available in other states. The bill is available here.
- House Bill 485 “To remove a requirement that owners of farmland enrolled in the CAUV program must file a renewal application each year in order to remain in the program”
Introduced on January 29, 2020, HB 485 would make it easier for farmers to stay enrolled in the Current Agricultural Use Valuation (CAUV) program. CAUV allows agricultural land to be taxed at a much lower rate than other types of land. If HB 485 were to pass, the initial application for CAUV on land more than 10 acres would automatically renew each year but the landowner must notify the auditor if the land ceases to be devoted exclusively for agricultural use. Owners of agricultural land less than 10 acres in size, who can qualify for CAUV if gross income from the land exceeds $2,500, would have to submit documentation on the annual gross income of the land to the county auditor each year rather than filing the renewal application. The CAUV bill can be found here.
Legislation from 2019 still being considered
- House Bill 24 “Revise Humane Society law”
In November, we reported that HB 24 passed the House unanimously and was subsequently referred to the Senate Committee on Agriculture & Natural Resources. Since that time, the committee has held two hearings on the bill. The hearings included testimony from the bill’s House sponsors, who touted how the bill would improve humane societies’ public accountability. The bill would revise procedures for humane society operations, require humane society agents to successfully complete training in order to serve, and would establish procedures for seizing and impounding animals. It would also remove humane societies’ current jurisdiction over child abuse cases and make agents subject to bribery laws. Importantly, HB 24 would allow law enforcement officers to seize and impound any animal the officer has probable cause to believe is the subject of an animal cruelty offense. Currently, the ability to seize and impound only applies to companion animals such as dogs and cats. You can read HB 24 here.
- House Bill 109 “To authorize a property tax exemption for land used for commercial maple sap extraction”
HB 109 was first introduced in February of 2019, but has recently seen some action in the House Ways & Means Committee, where it was discussed in a hearing on January 28, 2020. The bill would give owners of “maple forest land” a property tax exemption if they: (1) Drill an average of 30 taps during the tax year into at least 15 maple trees per acre; (2) use sap in commercially sold maple products; and (3) manage the land under a plan that complies with the standards of reasonable care in the protection and maintenance of forest land. In addition, the land must be 10 contiguous acres. Maple forest land that does not meet that acreage threshold can still receive a tax exemption if the sap produces an average yearly gross income of $2,500 or more in the three preceding years, or if evidence shows that the gross income during the current tax year will be at least $2,500. You can find the text of the proposed bill here.
- House Bill 160 “Revise alcoholic ice cream law”
Have you ever thought, “Gee, this ice cream is great, but what could make it even better?” Well this is the bill for you! At present, those wishing to sell ice cream containing alcohol in Ohio must obtain an A-5 liquor permit and can only sell the ice cream at the site of manufacture, and that site must be in an election precinct that allows for on- and off-premises consumption of alcohol. This bill would allow the ice cream maker to sell to consumers for off-premises enjoyment and to retailers who are authorized to sell alcohol. HB 160 passed the House last year and is currently in Agriculture & Natural Resources Committee in the Senate. Since our last legislative update, the committee has had three hearings on the bill. In the hearings, proponents testified in support of the bill, arguing that it would allow their businesses to grow and compete with out of state businesses. Senators asked questions about how the ice cream would be kept away from children, how the bill would help business, and about other states with similar laws. To read the bill, click here.
- Senate Bill 2 “Create watershed planning structure”
In 2019, SB 2 passed the Senate and moved on to the House Energy and Natural Resources Committee. If passed, this bill would do four main things. First, it would create the Statewide Watershed Planning and Management Program, which would be tasked with improving and protecting the watersheds in the state, and would be administered by the ODA director. Under this program, the director of ODA would have to categorize watersheds in Ohio and appoint watershed planning and management coordinators in each watershed region. The coordinators would work with soil and water conservation districts to identify water quality impairment, and to gather information on conservation practices. Second, the bill states the General Assembly’s intent to work with agricultural, conservation, and environmental organizations and universities to create a certification program for farmers, where the farmers would use practices meant to minimize negative water quality impacts. Third, SB 2 charges ODA, with help from the Lake Erie Commission and the Ohio Soil and Water Conservation Commission, to start a watershed pilot program that would help farmers, agricultural retailers, and soil and water conservation districts in reducing phosphorus. Finally, the bill would allow regional water and sewer districts to make loans and grants and to enter into cooperative agreements with any person or corporation, and would allow districts to offer discounted rentals or charges to people with low or moderate incomes, as well as to people who qualify for the homestead exemption.
Since SB 2 moved on to the lower chamber, the House Energy and Natural Resources Committee has held multiple hearings on the bill, and has consented to two amendments. The first amendment would keep information about individual nutrient management plans out of the public record. Similarly, the second amendment would keep information about farmers’ agricultural operations and conservation practices out of the public record. The text of SB 2 is available here.
- Senate Bill 234 “Regards regulation of wind farms and wind turbine setbacks”
SB 234 was introduced on November 6, 2019. Since that time, the bill was assigned to the Senate Energy & Public Utilities Committee, and three hearings have been held. The bill would give voters in the unincorporated areas of townships the power to have a referendum vote on certificates or amendments to economically significant and large wind farms issued by the Ohio Power and Siting Board. The voters could approve or reject the certificate for a new wind farm or an amendment to an existing certificate by majority vote. The bill would also change how minimum setback distances for wind farms might be measured. The committee hearings have included testimony from numerous proponents of the bill. SB 234 is available here. A companion bill was also introduced in the House. HB 401 can be found here.
Tags: legislation, Ohio legislation, tax credit, ethanol, cauv, humane society, property tax, water quality
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The decision on whether to take prevented planting is a tough one, but don’t let concerns about increased property taxes on idle land enter into the equation. Ohio’s Current Agricultural Use Valuation program allows landowners to retain the benefit of CAUV tax assessment on agricultural land even if the land lies idle or fallow for a period of time.
Ohio’s CAUV program provides differential property tax assessment to parcels of land “devoted exclusively to agricultural use” that are ten acres or more or, if less than ten acres, generated an average gross income for the previous three years of $2,500 or more from commercial agricultural production. Timber lands adjacent to CAUV land, land enrolled in federal conservation programs, and land devoted to agritourism or bio-mass and similar types of energy production on a farm also qualify for CAUV.
There must have been some farmers in the legislature when the CAUV law was enacted, because the legislature anticipated the possibility that qualifying CAUV lands would not always be actively engaged in agricultural production. The law allows CAUV land to sit "idle or fallow" for up to one year and remain eligible for CAUV, but only if there's not an activity or use taking place on the land that's inconsistent with returning the land to agricultural production or that converts the land from agricultural production. After one year of lying idle or fallow, a landowner may retain the CAUV status for up to three years by showing good cause to the board of revision for why the land is not actively engaged in agricultural production.
The law would play out as follows. When the auditor sends the next CAUV reenrollment form for a parcel that qualifies for CAUV but was not planted this year due to the weather, a landowner must certify that the land is still devoted to agricultural production and return the CAUV form to the auditor. The auditor must allow the land to retain its CAUV status the first year of lying idle or fallow, as long as the land is not being used or converted to a non-agricultural use. If the land continues to be idle or fallow for the following year or two years, the auditor could ask the landowner to show cause as to why the land is not being used for agricultural production. The landowner would then have an opportunity to prove that the weather has prevented plans to plant field crops, as intended by the landowner. After three years, the landowner would have to change the land to a different type of commercial agricultural production to retain its CAUV status if the weather still prevents the ability to plant field crops on the parcel. Other agricultural uses could include commercial animal or poultry husbandry, aquaculture, algaculture, apiculture, the production for a commercial purpose of timber, tobacco, fruits, vegetables, nursery stock, ornamental trees, sod, or flowers, or the growth of timber for a noncommercial purpose, if the land on which the timber is grown is contiguous to or part of a parcel of land under common ownership that is otherwise devoted exclusively to agricultural use.
Being forced out of the fields due to rain is a frustrating reality for many Ohio farmers today. One positive assurance we can offer in the face of prevented planting is that farmers won't lose agricultural property tax status on those fields this year. Read Ohio’s CAUV law in the Ohio Revised Code at sections 5713.30 and 5713.31.
Tags: cauv, current agricultural use valuation, property tax, prevented planting
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When we are not on the road presenting, in the classroom teaching, or keeping up with the news for the blog, our team is busy working on large scale research projects for the Agricultural & Food Law Consortium. One of our recent projects looked at how states assess farmland for property tax purposes, and we then created a compilation of every state’s laws on this topic. Based upon the research, we found that property taxes are a fact of life for virtually all landowners in the United States, but that each state uses a “differential tax assessment” for agricultural lands.
What exactly is a differential tax assessment? Many Ohio farmers know about and use Ohio’s special property tax assessment known as CAUV, which is short for Current Agricultural Use Valuation. Instead of assessing property taxes on the basis of the market rate for developable land, CAUV uses a different formula that assesses the land on its value for agricultural production. CAUV is a form of differential tax assessment.
While each state utilizes differential tax assessments for agricultural lands, they use different definitions of agriculture, different formulas, and different application processes. Some areas of law utilize model acts that states may adopt in order to make it easier to do business across state lines. Differential tax assessments of agricultural land do not have a model act, so each state’s language reflects the culture, norms, and conditions of the respective state at the time the state adopted or amended its differential tax assessment.
An example close to home illustrates what this means. Under Ohio Revised Code § 5713.30(A), agricultural use means commercial animal or poultry husbandry, aquaculture, algaculture, apiculture, the commercial production of field crops, tobacco, fruits, vegetables, nursery stock, ornamental trees, and sod. Commercial timber qualifies, but non-commercial timber only qualifies if it located on or next to land that otherwise would qualify for CAUV. Exclusive use requires just that: the land is exclusively used for an activity listed as an agricultural use. Lands of more than 10 acres that are exclusively devoted to agricultural uses qualify, but lands of less than 10 acres only qualify if the average yearly gross income exceeds $2,500 over the preceding three years. That is an example of a definition of what qualifies as agriculture for the purposes of the differential tax assessment.
The differential tax assessment project compiled the approaches taken by all fifty states, and the compilations are available on the National Agricultural Law Center website HERE. This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.
Tags: differential tax assessment, cauv, property tax, real property tax, real property law
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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.
Tags: current agricultural use valuation, cauv, tax, property tax, woodland tax
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