901-2-06 Determination of selected application properties.

(A) Phase one "Application" -

(1) Applications reviewed by the department: Within ninety days of the close of the application period, and after the farmland ranking system evaluation is completed, the department shall determine the top scoring applications, in descending order, and the top scoring applications shall proceed to phase two of the process.

(2) Applications reviewed by certified local sponsors: Within ninety days of the close of the application period, and after the farmland ranking system evaluation is completed, top scoring applications shall be selected by the certified local sponsor and forwarded to the department for phase two.

(B) Phase two "Review" - Within ninety days of the receipt of applications selected by the department and certified local sponsors, the farmland preservation advisory board shall review the selected applications as provided by the director and the certified local sponsors, and shall ensure that the applications are given a score according to the farmland preservation ranking system within the ranges as prescribed by these rules. Once the applications are found compliant, the farmland preservation advisory board shall then ensure that the applications as submitted are in compliance with the director's guidelines as provided for the current funding round. The farmland preservation advisory board shall then advise the director of those applications which are compliant with the ranking system and within the director's guidelines for that funding round. Upon such selection, the director and/or certified local sponsors shall notify the landowners their application has been selected to proceed to phase three of the process. If additional time is required to notify the landowner(s) of their selection to proceed to phase three, the local sponsor shall request a time extension from the director. The granting of such extension of time shall be in the director's sole discretion.

(C) Phase three "Purchase Agreement / Contingency" -

This phase confirms that the application property has been approved for grant funding pending completion of a title search or letter of clear title and review of any contingencies, such as legal boundary, review, appraisal, and signing of the purchase agreement. Once ODA has received a signed purchase agreement from the landowner, the application shall proceed to phase four.

The following documents must be obtained and conditions met at the landowner's sole expense:

(1) A current title search performed by an authorized title insurance agency for the entire application property;

(2) A title insurance commitment naming the Ohio department of agriculture as an insured party;

(3) A property survey, if required in the sole discretion of the director

(4) Interests that limit the title of a property, such as mortgages, leases, liens, restrictions, or legal or equitable interests, must be cleared or subordinated, unless exempted by the director.

If the holder of a lien/mortgage on the property will not sign the subordination agreement prior to the signing of the agricultural easement, the landowner must provide the office of farmland preservation a commitment letter from the lien/mortgage holder which states their obligations to subordinate their interests to ODA once at or prior to landowner receiving any funds from ODA.

(D) At the director's discretion, a comparable land appraisal may be required. The party responsible for incurring the cost of the comparable land appraisal will be determined by the director prior to phase three "Purchase Agreement/Contingency" of the application period.

(E) Costs incurred by ODA or the local sponsor for the above items may be paid directly to ODA or the local sponsor, or may be reimbursed to ODA or the local sponsor at closing. ODA will review the documentation for compliance with the program requirements. The application may proceed if ODA determines that the documentation is satisfactory.

(F) The purchase agreement shall include but not be limited to:

(1) The total amount of the offer per acre, and for the entire application property;

(2) A statement that the grantor has no actual knowledge of hazardous substances or wastes, and that the grantee is held harmless from any and all liability or expense arising from violation of environmental laws and regulations;

(3) Any other provisions the director deems necessary for the landowner to be aware of prior to signing a deed of agricultural easement, and permitted pursuant to section 901.21 or 901.22 or division (D)(2) of section 5301.691 of the Revised Code.

(a) Within thirty days of receipt of the option to purchase from the director, the landowner shall sign and return the document to the director, or advise the director, in writing, of their rejection of the offer. Failure of the applicant or landowner to act within thirty days of the date the offer is postmarked shall constitute a rejection of the director's offer to purchase.

(b) If the option to purchase is signed by all parties, then the application shall proceed to phase five.

(G) Phase four "Final Review" - ODA shall review a title search and conduct a boundary line review, and if necessary obtain an appraisal in order to determine if application property meets the criteria to receive grant money under the program. A final determination as to the award of the grant shall be made in the sole discretion of the director.

The final review phase will consist of, but not be limited to:

(1) A title search or letter of clear title; however, if the title search reveals other third party interests, not previously known, that may not be conducive to keeping the land in agriculture if exercised, a statement of subordination to the terms of the agricultural easement shall be obtained from the third party by the landowner, before proceeding to rule 901-2-08 of the Administrative Code. Otherwise, a statement of no unsubordinated third party interests shall be included in the results of the title search.

(2) A property survey, if required by the director.

(3) A property appraisal on the application property, if required.

(4) The applicant completing a present condition report using a template provided by the director as specified in rule 901-2-08 of the Administrative Code.

(5) Such other information as is necessary and useful to determine that the property is appropriate for inclusion, as requested by the director.

(H) Phase five " Execution of Deed of Easement" upon the review of documents required by this rule, the landowner shall convey a deed of agricultural easement to the state of Ohio where:

(1) ODA shall:

(a) Tender a lump sum payment to title insurance company or the local sponsor, who will obtain a title insurance company or other agent to act, as escrow agent for distribution to:

(i) The landowner and/or landowner's assignee(s) in the proportions directed by the landowner, or

(ii) Through an installment purchase agreement. Such agreement must be pre-approved by the director and shall include:

(a) Any installment payment terms;

(b) Dates and amounts of payments and to whom payable, including without limitation any assignee(s) of landowner; and,

(c) Interest rate on the outstanding balance.

Effective: 02/06/2014
R.C. 119.032 review dates: 10/18/2015
Promulgated Under: 119.03
Statutory Authority: 901.22
Rule Amplifies: 901.22
Prior Effective Dates: 02/01/2002, 02/21/2005, 03/21/2006, 10/28/2010, 01/7/2013