Article

Current Agricultural Use Value is often discussed as a farmland preservation tool, but there are some other tools in the law that landowners can consider. Ohio Farm Bureau Associate General Counsel Leah Curtis shares what benefits ag districts can have for Ohio landowners.

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Listen to Legal with Leah, a podcast featuring Ohio Farm Bureau Associate General Counsel Leah Curtis discussing topics impacting farmers and landowners.

Transcript

Ty Higgins [00:00:00] We talk a lot about CAUV as a farmland preservation tool, but there are other tools in the law that landowners can consider. For this Legal with Leah, we bring in Leah Curtis, Associate General Counsel with Ohio Farm Bureau. Always great to see you, Leah. Very good to see, you too. As I mentioned, lots of people know about CAUV and its tax benefits, but there are related programs that land owners can also benefit from, right?

Leah Curtis [00:00:23] The agricultural district program is another program under the law that creates some specific protections for farmland and farmers. Much like CAUV, to enroll in an ag district, you do have to have 10 acres of farmland or at least $2,500 of gross annual income from farming, and the farming has to be present on the land for at least three years.

Ty Higgins [00:00:42] There are multiple benefits. Let’s start though with nuisance lawsuit protection with the ag districts and what that can provide.

Leah Curtis [00:00:50] The ag district provides what we call an affirmative defense to certain nuisance lawsuits over agricultural activities. So there are some requirements that the case has to meet. It can’t be another farmer that’s bringing the lawsuit. You have to have been enrolled in the ag district prior to the incident happening. But these are suits that might be related to things like odor or noise or dust from the farm and your agricultural activities that maybe nonfarm neighbors might bring a lawsuit over. And we always get questions about, well, let’s just prevent people from filing lawsuits. So we can’t do that under the law. It’s your constitutional right to file a lawsuit, but what we can have is an affirmative defense, which means you are able to typically end that lawsuit more quickly and efficiently, and then reduce the cost that it takes to get through that litigation.

Ty Higgins [00:01:41] Another benefit landowners can get is assessment deferral. What types of assessment does this apply to and how does it all work?

Leah Curtis [00:01:49] If your land is enrolled in an ag district, the law does state that any assessments for sewer, water, or electrical service that are charged on the land will be deferred. So this means that you are going be charged if you’re accessing those services, for example, for your house, but if you have open land, pastureland, cropland that is not using those services those are not going to have those assessments charged immediately. They are deferred, so that means they will be charged if the land is later taken out of the ag production or out of the ag district program, but you will not have to pay them while you’re in that program.

Ty Higgins [00:02:24] We’ve talked about the benefits of ag districts. There are some limitations. What should we be aware of as we’re signing up for these districts?

Leah Curtis [00:02:31] So an ag district is for a five-year enrollment. So this is different than your CAUV, which you enroll every year. Ag district is a five-year term. If you do convert the land from agriculture during that five- year term, there is going to be a financial penalty. That penalty is based on what your CAUV recoupment is. But if at the end of the five-year term you don’t want to renew, you want to take it out of the ag district, you can choose not to renew and not pay a penalty. So that’s different than CAUV, where you would pay recoupment if you don’t renew. Now the other thing to remember is of course that assessment deferral we talked about. If you would come out of the ag district, you may then have assessments due at that time.

Ty Higgins [00:03:10] One of the things we talk about quite a bit, in fact, one of our priority issues is farmland preservation. So explain to us how the ag district can have a more general effect on farmland preservation.

Leah Curtis [00:03:22] So the ag district law actually came about as a part of a push for farmland preservation. And so it also can be used as sort of a land use planning and identification tool. There are a lot of permits through the state government that they have to do a farmland review for. And one of the ways that many of those agencies do that is they look at farmland in ag districts. And so they will do a review of the impact, they will look at how many acres are in an ag district and as used for farmland. And so having that ag district enrollment can help with that kind of overall land use planning aspect as well.