Zoning - Oil and Gas issues

Regulating oil and gas via zoningThe last twenty years oil and gas drilling for Clinton Sandstone wells has moved into urban areas, as drilling locations in rural areas have been used up.  Under the concept of “home rule” enjoyed by municipalities, cities and villages enjoy broad police powers to regulate health, safety and public welfare.   As a result, a number of Ohio communities attempted to “zone-out” or otherwise regulate away drilling activity.  In State ex rel. Morrison v. Beck Energy Corp., Slip Opinion No. 2015-Ohio-485, the Ohio Supreme Court ruled that a municipality could not impose its own stringent well permitting requirements on top of the state’s system of regulation.  The court found that under O.R.C. 1509, the Ohio Department of Natural Resources is given the sole authority “to regulate the permitting, location, and spacing of oil and gas wells and production operations.”  Under Section 1509.02 local governments have limited regulatory powers, so long as those powers are not exercised “in a manner that discriminates against, unfairly impedes, or obstructs oil and gas activities and operations regulated under [Chapter 1509].”

Zoning - Open Spaces

Open space preservationModern zoning planning has recognized the virtue of preserving open spaces, not only by establishing parks and recreation areas, but also by preserving the rural character of certain parts of communities and restraining urban sprawl.  This can be accomplished in several ways.  Agricultural zoning prohibits the use of land for commercial, industrial and residential purposes.  Cluster zoning assigns a given amount of land a certain amount of open space, but allows the developer flexibility in arranging the density of his buildings.  One portion of the project would be intensely developed, with open space aggregated to better effect elsewhere.The last several decades have seen increasing use of Planned Unit Developments (“PUD’s”).  A PUD allows mixed use (residential and commercial, along with public spaces) as part of a large, over-all development.  Under O.R.C. Sec. 519.021, a board of trustees may set standards for planned unit developments in its zoning code that do not apply to any particular property, but which can be invoked by a developer in his or her application for a zone change under O.R.C. 519.12.

Flexibility in Zoning Laws

Non-conforming usesA nonconforming use is a use of property that predates the zoning code or, after enactment, was initially permitted, only to have the code subsequently changed.  The nonconforming use is allowed (O.R.C. 713.15) to continue because of the unfairness in forcing one who has invested in building in reliance on former law to be forced to cease operation and due to the fact that enforcing the new code against the “grandfathered” use may not be legal for constitutional reasons.  A nonconforming use may not be expanded.  Additionally, zoning codes typically provide that a use discontinued for a period of time acts as conclusive proof of the intention to abandon the use.Conditional usesA landowner may apply for an exception to an established zoning classification and this is called a “conditional use.”   One example might be permitting the construction of a church is an area zoned residential.  The proposed use most people would say is not out of character with a neighborhood.  The applicant petitions the local zoning board or planning commission and argues that his/her proposed use should be allowed and will not adversely affect nearby landowners.  Notice is given to neighbors and public hearings are held on the application.  Conditional use permits provide flexibility to what would otherwise be a rigid system of land use planning.VariancesA second “relief valve” from rigid planning requirements is the zoning variance.  An area variance might be applied for, for instance, where the configuration of a lot, or its unusual slope, would otherwise prevent or make exceedingly difficult the construction of a residence without a change in the set-back requirements.A use variance is similar to a conditional use permit in that the applicant requests a change in the permitted use in the zone in question.  The use should not be totally out of character with the neighborhood and should not benefit unfairly the applicant, otherwise a charge of “spot zoning” might arise.  Spot zoning is the improper allowance of a use at variance with the original planning for the zone in question that harms existing rights of established landowners, while manifestly benefiting the applicant.Zoning amendmentsAmendments to zoning ordinances may be initiated on motion of a township zoning commission, upon a resolution of the township trustees, or upon an application filed by a property owner (O.R.C. Sec. 519.12).  Public hearings are to be held after notice to affected property owners.  If the trustees adopt a proposed amendment, it goes into effect, unless within 30 days after adoption, a petition, signed by 8% of the number of voters who voted in the most recent general election for governor, is filed requesting the matter be put on the ballot for referendum.  Zoning amendments need be judiciously considered so as not to compromise over-all land use plans in a community.

Township Zoning in Ohio

OverviewIn Ohio over four million people live in unincorporated townships, the majority of which have enacted zoning ordinances.  Reasons include controlling what are, in the eyes of the community, inappropriate uses, dealing with growth pressures, and promoting economic development.Governing LawThe authority for townships to enact zoning codes is found in Ohio Revised Code Sec. 519.02, which authorizes the regulation of the:•    location, height, bulk, number of stories, and size of buildings and other structures;•    percentages of lot areas that may be occupied, set back building lines, sizes of yards, courts, and other open spaces, the density of population, the uses of buildings and other structures;•    uses of land for trade, industry, residence, recreation, or other purposes; and•    landscaping and architectural standards.Zoning boards are authorized to “divide all or any part of the unincorporated territory of the township into districts or zones of such number, shape, and area as the board determines.”To assist zoning boards and provide advice to local township officials who may lack land-use expertise, county and regional planning commissions are authorized by O.R.C. Sec. 713.22 and 713.23.  They are charged (with the county engineer) with preparing studies, maps and recommendations touching on such things as:•    Regional objectives, opportunities, and needs and priorities;•    Economic and social conditions;•    Pattern and intensity of land use and open space;•    The general land, water, and air transportation systems, and utility and communication systems;•    Locations and extent of public and private works, facilities, and services;•    Locations and extent of areas for conservation and development of natural resources and the control of the environment;•    Long-range programming and financing of capital projects and facilities;•    Contracting with and providing planning assistance to other units of local government;•    Coordinating the planning with neighboring planning areas; cooperating with the state and federal governments in coordinating planning activities and programs in the region;•    Reviewing, evaluating, and making comments and recommendations on the planning, programming, location, financing, and scheduling of public facility projects; and•    Carrying out all of the functions and duties of a director of economic development.County OversightA board of county commissioners may formally adopt and record a plan and thereafter “no public building, roadway, bridge, viaduct, or other public improvement or utility, publicly or privately owned, whose construction or location would constitute a departure from the plan, shall be constructed or authorized by the board except by unanimous vote”.If a township proposes to adopt zoning, the county or regional planning commission is to be given a copy of the plan for comment and approval that it is consonant with over-all county planning.  Thereafter, the plan must first be approved by the township trustees and then must be adopted by majority vote of the township voters.

Zoning in Ohio - Overview

HistoryZoning codes grew out of the limitations inherent in using the legal theory of nuisance as the sole tool for regulation of growth in American cities at the turn of the 19th century.  In that era, if a neighbor, for instance, was affected by the operation of a smelly slaughterhouse, he or she had to file a nuisance complaint in court and let a judge decide whether the noxious activity was appropriate for the neighborhood.  No planning was involved.  Issues relating to building uses, heights and location were handled by courts on an ad hoc basis.Toward the end of the 19th century, new construction techniques (the first passenger elevators were installed in New York in the 1870’s) allowed construction of ever taller buildings, which permitted increased population density.  At the same time, developing public transportation systems (street cars and subways) allowed workers to live at a distance from the factories and businesses that employed them.  This suggested changes to the character of neighborhoods.  It seemed to make sense in these circumstances to separate the areas where people lived from the factories in which they worked.  It followed that reconciling land uses through litigation, as opposed to planning, became problematic.PresentlyZoning, as we experience it today, developed in the U.S. as the result of a Supreme Court case arising in Ohio in the 1920’s, Euclid v. Amber.  In the little suburb of Euclid a comprehensive zoning ordinance was enacted in an effort to avoid being overwhelmed and absorbed by its big industrial neighbor, Cleveland.  That town enacted a code that divided its territory into areas in which building sizes and uses were regulated according to zone.  A land developer, Ambler Realty, sued claiming that the new laws substantially diminished the value of its 68 acres and that Euclid had “taken” value from it in derogation of the due process clause of the 5th Amendment, made applicable to the states by the 14th amendment.At this point in time “takings” cases had involved situations where governments had physically appropriated whole parcels of land, as in the case where a City condemns property in order to build a road.  Ambler Realty argued for the recognition of a “regulatory taking” where the imposition of a regulatory scheme—in this case zoning—so burdened land as to meaningfully deprive a property owner of significant value.Euclid argued its zoning scheme was a fair and reasonable application of its inherent police powers as a necessary measure to prevent nuisances.  The U.S. Supreme Court held that, in order to show a due process violation, the developer would have to have demonstrated that the zoning ordinance was discriminatory and lacked any rational basis.  Failing that showing, the court allowed zoning as a proper exercise of police power asserted for a legitimate public purpose—preventing obnoxious nuisances and furthering the public welfare.LimitationsThe Court did not give carte blanche to regulators, however.  Two years later it was presented with a Massachusetts case, Nectow v. the City of Cambridge and an even more restrictive zoning ordinance, which this time clearly deprived a landowner of the value of his land.  In Nectow the Court found that the zoning code in question was, “serious and highly injurious.”  It said, “The governmental power to interfere by zoning regulations with the general rights of the land owner by restricting the character of his use, is not unlimited, and, other questions aside, such restriction cannot be imposed if it does not bear a substantial relation to the public health, safety, morals, or general welfare.”Since then, a large number of cases have been litigated between the bookends of Euclid and Nectow.  The regulating community of planners and government-centric folks push to expand zoning initiatives, while property owners and the business community push back.  An example is the case of Lucas v. South Carolina Coastal Commission where in 1992 a landowner purchased beachfront land for a million dollars and was refused permission by the regulators to build upon it.  The government’s position was it this was for the public good of preserving the beach front view (of course it did not want to pay for the preservation…).  The Supreme Court recognized what has been characterized as a “regulatory taking,” essentially saying, “if you have identified a public good of critical importance, which substantially deprives a landowner of the value of property—pay for it, as required by the Fifth Amendment.”How do I invalidate a zoning rule/regulation?The constitutionality of a zoning provision can be challenged in Ohio by filing a declaratory judgment (O.R.C. Sec. 2701) or by administrative appeal (O.R.C. 2506).  In addition to the protections of the U.S. constitution, that of Ohio affords protects property right protections as well:•    Article 1:  “All men… have certain inalienable rights, among which are those of … acquiring, possessing and protecting property…”•    Article 16:  “All courts shall be open, and every person, for an injury done him in his land … shall have remedy by due course of law, and shall have justice administered without denial or delay. Suits may be brought against the state, in such courts and in such manner, as may be provided by law.”•    Article 19:  “Private property shall ever be held inviolate, but subservient to the public welfare….  [W]here private property shall be taken for public use, a compensation therefore shall first be made in money, or first secured by a deposit of money; and such compensation shall be assessed by a jury, without deduction for benefits to any property of the owner.”It goes without saying that there will ever be tension between regulators eager to expand their authority and individuals straining to protect property rights.

Frequently Asked Divorce Questions

How long does divorce take in Ohio?

The length of a divorce proceeding depends on the type of divorce being pursued, and how agreeable the spouses are.  The fastest route is a dissolution of marriage.  Dissolutions require fully cooperative spouses, and can be finalized about 30 days after court filing.  The longest route is likely a contested divorce, which might not be resolved for years.These time-frames are from filing date to court decree.  If a spouse wishes to modify the divorce decree (or appeal it), the spouses will find themselves in court again.  In this way, some divorces have several rounds, especially those involving child custody or property division disputes.

What type of divorce is right for me?

The divorce procedure you select should give your marriage the most efficient path to termination.   Many attorneys suggest starting with a dissolution, which may end the marriage on good terms with a grand bargain.   If the spouses cannot agree to a dissolution, mediation may help them find agreeable ground.  If the spouses still can't agree, your attorney may suggest converting the dissolution to a divorce.  This way, the divorce is nudged along by court imposed deadlines.Divorce, like relationships,  are dynamic.  Be prepared for the process to change.

How much does divorce cost?

The cost of a divorce proceeding depends primarily on how long it lasts.  Short, inexpensive divorces require cooperative spouses and will likely cost a few thousand dollars.  Long, expensive divorces involve angry spouses who disagree on custody allocation, property division, or spousal support.  These divorces can cost tens of thousands of dollars, sometimes more.

What costs are involved in a simple divorce?

Simple divorces involve court costs and - unless you proceed without an attorney - attorney fees.  Court costs are fixed and unavoidable. Attorneys often request a deposit of a few thousand dollars, called a retainer.  The lawyer sets aside the retainer, and draws their hourly fee from that amount.  If the divorce concludes, and the retainer has not been exhausted,  the balance is typically returned to the client. Ask your attorney for an engagement letter, which will detail their fees.In some circumstances, a judge will require one spouse to pay the other's attorney fees.

What costs are involved in a long divorce?

Complex divorces involve court costs, attorneys fees, and possibly many others.  Custody disputes can incur guardian ad litem fees.  Property division disputes can require lengthy negotiation. Spousal support may also require lengthy negotiation.  Business interests may need valued.  Retirement accounts (IRA's, or 401k's) may need divided.  The court, or a spouse may request mediation to help resolve any of these disputes.

Are flat rates available?

Flat rates may be available for those pursuing a dissolution, or other circumstances where the divorce's length is very predictable. Ask your attorney if a flat rate is suitable for your divorce.

What happens to my property in a divorce?

Your property will first be classified as either marital property or separate property.  Separate property will be kept by its owner.  Marital property will be divided between the spouses according to Ohio law.  Ohio law requires the division of marital property to be "equitable."

What's the difference between spousal support and alimony?

Spousal support means a support payment made by one spouse to another, regardless of their gender.  Alimony refers specifically to payments paid by the husband to the wife.

Will I have to pay spousal support?

Yes, if the court thinks it's appropriate and reasonable for you to pay spousal support.In deciding if it's appropriate and reasonable for a spouse to pay spousal support, the court weighs all of the following factors, which have been paraphrased from Ohio law:

• The income of the parties, from all sources, including property obtained from a divorce decree;
• The relative earning abilities of the parties;
• The ages and the physical, mental, and emotional conditions of the parties;
• The retirement benefits of the parties;
• The duration of the marriage;
• The extent to which it would be inappropriate for a party to seek employment outside the home because that party will be custodian of a minor child of the marriage;
• The standard of living of the parties established during the marriage;
• The relative extent of education of the parties;
• The relative assets and liabilities of the parties, including but not limited to any court-ordered payments by the parties;
• The contribution of each party to the education, training, or earning ability of the other party, including, but not limited to, any party's contribution to a spouse's obtaining a professional degree;
• The time and expense necessary for the spouse seeking spousal support to obtain skills necessary to obtain appropriate employment;
• The tax consequences, for each party, of an award of spousal support;
• The lost income production capacity of either party resulting from that party's marital responsibilities;
• Any other factor that the court expressly finds to be relevant and equitable;

Note: this underlined provision gives judges broad authority to look beyond the points bulleted above.  

Will I receive spousal support?

You will receive spousal support if the court finds it reasonable and appropriate for your spouse to pay it.  See the paragraph immediately above.

Will I have to go to court?

Yes, both spouses must appear in court for either a dissolution or a divorce.  Dissolutions typically require the spouses appear in court only once. Depending on the nature of your divorce, spouses may find themselves in court more regularly.

How do I get my maiden name back?  (How do I get my old last name back?)

Your attorney must include this request in the relevant court filings. The court generally grants it freely. If you forget to ask for this provision before the divorce is finalized, there are other methods of changing your name.

Do I need an attorney for my dissolution or divorce?

Yes. Your attorney not only contributes legal knowledge, but also procedural tactics, and negotiating skills. Attorneys also provide their clients with objective, practical advice in an otherwise very emotionally difficult period.

Can I obtain a divorce by myself?

Yes, though you may be at a significant disadvantage, especially if your spouse has retained an attorney. See the paragraph immediately above.

Pipeline Installation and Current Use Taxation in New Hampshire

Would the installation of a pipeline pull the affected land out of the favorable “current use” valuation regime and cause it to be taxed more heavily?

Background

Northeast Energy Direct (NED) has applied to the Federal Energy Regulatory Commission for a license to install a natural gas pipeline across southern New Hampshire.  The question has arisen as to the tax effect on an affected landowner under RSA 79-A, Current Use Taxation.  The issue: Would the installation of a pipeline pull the affected land out of the favorable “current use” valuation regime and cause it to be taxed more heavily?

What is the Current Use Tax rule?

New Hampshire has declared in RSA 79-A that it is the public purpose of the state to encourage the preservation of open spaces as a means of promoting an “attractive outdoor environment for work and recreation” and to conserve “land, water, forest, agricultural and wildlife resources.”  To that end the state has determined not to tax land at values “incompatible with open space usage” and to assess land at its “current” (open space) use, as opposed to its theoretical “highest and best” use.  The value of land, as such, is assessed at the property’s value based upon its “income-producing capability” in its current use for growing forest or crops, not upon its fair market value.

What types of Land Uses are there?

For valuation purposes under the statute, a distinction is made between “farm land,” “forest land, “unproductive land” and “wetlands.”  “Farm land” means cleared land capable of growing crops.  “Forest land” means land growing trees.  “Unproductive land” means land incapable of growing crops or forest because of poor soil or because it is rocky, steep, etc.“Open space lands” can mean farm, forest or unproductive land. “Wetlands” are those areas of forest, unproductive or crop land that are inundated or saturated by surface water such they that support hydric vegetation.  If land is deemed “unproductive” it is valued and taxed at the lowest current use value.

Who classifies the land?  What values do they use?

The Selectmen or assessing officials are to appraise open space land—excluding buildings or other improvements— at valuations based upon current use values established by the Current Use Board established under RSA 79-A3.  Farmland values flow from a board-established soil potential index.

What happens when the land use changes?

When the usage of land that had been classified as “open space land” changes, it is subject to a “land use change tax.”  Pursuant to RSA 79-A:7, I, the LUCT is assessed "at the rate of 10 percent of the full and true value determined without regard to the current use value of the land which is subject to a non-qualifying use."  The tax is in addition to the annual real estate tax imposed on the property and is due upon the land use change.  Once land has come out of current use valuation, it is taxed at its full fair market value under RSA 75:1.

What triggers a land use change?

A land use is considered “changed” when actual construction begins causing physical changes in the earth, such as building a road to service a new home or subdivision, or excavating a construction site.  (It is noted that a land use is changed if excavated materials from the property are sold.  Thus, where ledge is involved in the installation of a pipeline and it must be shot by dynamite, it should be specified in the right-of-way agreement with the pipeline company that it is the obligation of the company to dispose of shattered rock off premises—the landowner probably does not want to try to sell the debris for road fill….)  Only land that is specifically affected is subject to the change tax.  Under RSA 79A VI there are exceptions, however.Land use is not considered changed if:•    Land under current use is taken by eminent domain or any other type of governmental taking which would cause the use change penalty to be invoked.•    Land abutting a site taken by eminent domain…upon which construction is in progress is used to stockpile earth taken from the construction site.•    Land accorded current use assessment in one category is changed in use to any other qualifying category.•    Land under current use assessment is eligible for conservation restriction assessment pursuant to RSA 79-B.

Does the installation of a pipeline trigger a land use change?

It would seem clear that where land (in this case an easement) is taken by eminent domain, no change in use occurs.  The Natural Gas Act regulates interstate natural gas pipelines.  Section 717f (h) of the Act provides:When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for the necessary right-of-way to construct, operate, and maintain a pipe line or pipe lines for the transportation of natural gas, and the necessary land or other property, in addition to right-of-way, for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of such pipe line or pipe lines, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States…, or in the State courts….

What if the land was seized by eminent domain?

This presents the question as to whether a negotiated right-of-way under the “threat” of eminent domain—short of a litigated taking-in-court—constitutes a “taking by eminent domain,” or “any other type of governmental taking” within the meaning of the N.H. statute.  It would seem that it does.  Eminent domain is often referred to as an “involuntary conversion,” meaning, once a landowner is in the headlights of the government taking process, he/she is being forced to do something;  taking is involuntary and absolutely beyond the control of the landowner.  The inevitable road to the loss of property interest is straight and clear, though the ultimate process for determining compensation (negotiation or trial) is not yet determined.  Negotiation is obviously favored as saving the resources of condemnor, condemnee and the courts.The public policy of the New Hampshire law is echoed and amplified in I.R.C. Section 1033 (a), which deals with the tax consequences of an involuntary conversion of property into cash or other property.  It reads:(a) General rule: If property (as a result of its destruction in whole or in part, theft, seizure, or requisition or condemnation or threat or imminence thereof) is compulsorily or involuntarily converted….The statute then provides that there is no tax recognition of the proceeds of the involuntary conversion, provided the landowner purchases similar property within a certain time frame.  The point is that the federal statute accords recognition to the practicalities of the taking process.  Most cases are settled short of trial; in fact, most often landowners negotiate a fair settlement with the government without a formal takings case being filed.  It would seem under New Hampshire law that settling with a public utility, short of trial and even short of the utility filing suit should be seen as being in the eminent domain process and should not constitute a change in use.  A practical tip:  It is recommended that certain verbiage be incorporated into the easement agreement that reflects that the parties came to agreement in the face of the appropriation process that otherwise would have been forthcoming.Assuming that a New Hampshire town would interpret this portion of the law otherwise, other relief from the change use tax is available.  RSA 79-A VI provides further:VI. For purposes of this section, land use shall not be considered changed and the land use change tax shall not be assessed when:(c) Land accorded current use assessment in one category is changed in use to any other qualifying category.

What happens when a pipeline is installed in farmland?

In farm country, nothing.  In other words utility easements typically do not forbid growing crops.  Of course, most of New Hampshire is forestry lands. Yes, it is true that trees are not permitted to be grown on pipeline rights-of-way, but there is nothing to say that a landowner could not plant, for instance, blueberries.  In other words the use would be changed from “forest land” to “farm land.”  Again, RSA 79-A defines “farm land” as “cleared land capable of growing crops”—it does not say crops actually have to be grown.Finally, RSA 79-A VI concludes:VI. For purposes of this section, land use shall not be considered changed and the land use change tax shall not be assessed when:(d) Land under current use assessment is eligible for conservation restriction assessment pursuant to RSA 79-B. Such land shall then be allowed to change from current use assessment to conservation restriction assessment with no land use change tax being applied.Under RSA 79-B "conservation restriction'' means a permanent restriction of open space land by deed granted in perpetuity… to a federal, state, county, local or other government body, or to a charitable, educational, or other nonprofit corporation established for the purposes of natural resource conservation….  A landowner contemporaneously with the grant of a pipeline easement in theory could grant to, for instance, a town an appropriate conservation easement co-terminus with the pipeline easement.One final matter of note, a further reduction in the current use value of land is offered under RSA 79-A:4 where land is open 12 months of the year to recreational activity such as skiing or hiking.

Conclusions

In sum, where an affected property owner properly asserts his/her rights under RSA 79-A and 79-B, and where he/she correctly memorializes his/her interactions and agreements with NED the installation of its pipeline should not trigger the land use change tax.

Unresolved Issues with Ohio's Dormant Mineral Statute

Some of the issues discussed below have been clarified by Ohio courts.  Read more here. 

Background

Over the past few years, Ohio’s courts, at all levels, have dealt with a number of issues pertaining to O.R.C. 5301.56, often referred to as Ohio’s dormant mineral statute. At this point in time, several such issues are about to be ruled upon by Ohio’s Supreme Court. One issue of importance, however, has received little mention in court rulings to date. That issue concerns the notice requirements by a landowner seeking to recapture dormant minerals. More particularly, what are those requirements?Notice Requirements(E) Before a mineral interest becomes vested under division (B) of this section in the owner of the surface of the lands subject to the interest, the owner of the surface of the lands subject to the interest shall do both of the following:(1) Serve notice by certified mail, return receipt requested, to each holder or each holder's successors or assignees, at the last known address of each, of the owner's intent to declare the mineral interest abandoned. If service of notice cannot be completed to any holder, the owner shall publish notice of the owner's intent to declare the mineral interest abandoned at least once in a newspaper of general circulation in each county in which the land that is subject to the interest is located. The notice shall contain all of the information specified in division (F) of this section.

So, who must be notified?

To date, it does not appear that any Ohio cases have really fleshed out what the language above means.  A literal reading of the statute is that the holder OR the holder's successors OR assignees can be served by certified mail at the last known address -- that is, not ALL of those parties need to be served.  If all needed to be served "and" would be used in place of "or."   It is noted that mineral reservations are frequently made in a deed and never assigned, so there are no successors or assigns to serve – only holders.Some of the terms used in section (E) are defined by the statute; others are not. The “holder’s successors” is not defined. Successors, when used in a legal context, seems to typically apply to entities other than regular persons, such as corporations or trustees. It is notable that the statute uses this term and fails to include the term “heirs.”The “holder’s … assignees” is also not defined. This term seems more straightforward, and almost certainly includes a party holding a record assignment from the original holder. It would likely also include a subsequent assignee who took record title, not directly from the holder, but from the holder’s assignee. Whether the “holder’s … assignees” would include a party holding an unrecorded assignment is unclear, however.The statute does define “holder” at part (A)(1):(1) "Holder" means the record holder of a mineral interest, and any person who derives the person's rights from, or has a common source with, the record holder and whose claim does not indicate, expressly or by clear implication, that it is adverse to the interest of the record holder.The above definition is certainly broad, and would seem to include successors and assigns. That being the case, one wonders why part (E) of the statute requires certified mail to “each holder or each holder's successors or assignees.” Why not just say “each holder?”

Do heirs need to be notified?

The above definition could also include a holder’s heirs. The Seventh District Court of Appeals, in Dodd v. Croskey, took this position in dicta.  However, the Court further held: "We understand the difficulty in determining, in instances such as these, who are the heirs and assigns.  That said, we do not need to determine whether the actions taken by appellants would be enough to show an attempt at certified mail."  The court went on to explain that, because an heir did see the published notice in the paper and did file a response, it was not necessary for the court to set out what efforts were required by a landowner concerning notification of heirs.If heirs are included within the definition of “holder,” questions continue to linger -- Does any heir of the original holder have derived "rights," notwithstanding the existence of a contrary will?  Does an heir of an heir named in the will have derived "rights" when the estate was closed decades ago, without any transfer of the reserved minerals?How far must the landowner go to locate heirs?Perhaps the biggest question in this regard is - If heirs are included within the definition of “holder,” what efforts must a landowner go to as far as locating them and notifying them of their intent to recapture dormant minerals?Many have argued that the purpose of the dormant mineral statute was to encourage and streamline mineral development on lands where severed minerals have become dormant. In states which have no dormant mineral statutes, such a situation requires an oil and gas developer to track down all heirs and secure leases therefrom (or force pool those who refuse to sign leases).If Ohio’s dormant mineral statute requires that “each holder” be notified by certified mail “at the last known address of each,” and if “holder” includes heirs, then the process in Ohio is not going to be any more streamlined than in states which have no dormant mineral statute. Landowners will be compelled to do thorough research to establish a complete family tree and the locations of all living heirs. Further, probate records will need to be researched to determine situations where a particular will varied from the statutory line of inheritance. If all such persons are notified via mail, it seems likely that at least one would respond to same, and per the holding of Dodd v. Croskey such a response secures the mineral interest for all holders for another 20 years.

Conclusions, and best practices:

So what is a landowner, who desires to recapture dormant minerals, to do in light of the above issues? Certainly title needs to be searched from the date of the mineral severance to the present to see if any transfers were made. Any such transfer would be a savings event that would prohibit a landowner from proceeding with a claim for dormant minerals. Where no transfers can be found, the landowner does not have an option to send mail to the holder’s successors or assigns. In such event, a landowner could use a less stringent interpretation of the statute by sending the original holder certified mail at the last known address and then publish in the paper if service is not made by mail. Such a process will be valid only where the courts determine that “holder” does not include heirs.Alternatively, a landowner could assume that “holder” includes heirs and complete a full determination of the names and addresses of all living heirs, factoring in any probated wills, and notify all such persons via certified mail.It does not appear that any middle ground can logically be applied when interpreting the statute. If a “holder” is an heir, and if “each holder” need be notified by certified mail, a full determination of living heirs is needed with mail going out to all. If a “holder” does not include heirs, or if the particular language of part (E) of the statute is interpreted not to include heirs, but only record holders and their successors and assigns, no determination of heirs is necessary.