The Ohio Supreme Court has cleared the way for a 2022 settlement agreement between Ohio's tax commissioner and the owners of the NEXUS Gas Transmission pipeline to take effect.
The court's recent 4-3 decision determined the Lorain County auditor could not appeal the property tax valuation of the NEXUS pipeline that was set by a 2022 settlement agreement between Ohio’s tax commissioner and the pipeline’s owners, Detroit-based DT Midstream and Enbridge, a Canadian company.
The natural gas transmission pipeline crosses 13 counties – Stark, Columbiana, Erie, Fulton, Henry, Huron, Lorain, Lucas, Medina, Sandusky, Summit, Wayne and Wood – and 37 school districts in northern Ohio.
"Nexus is pleased by the decision which supports the finality of the settlement agreement, providing additional revenue and certainty to local school districts," wrote NEXUS spokesperson Kristen Henson in a statement.
Lorain County Auditor Craig Snodgrass had objected to the tax commissioner’s settlement, which set the taxable value of Ohio’s portion of the 256-mile interstate NEXUS pipeline at $950 million for 2019. The subsequent years’ values would be set by taking the 2019 valuation and subtracting for depreciation.
Snodgrass sought to enforce the commissioner’s 2019 assessment that set the pipeline’s value at more than $1.4 billion before settlement negotiations began. He appealed to the Ohio Supreme Court when the Ohio Board of Tax Appeals denied his request.
Justices Patrick DeWine, Michael Donnelly, Jennifer Brunner and Joseph Deters ruled that county auditors do have a statutory right to appeal tax valuations, but that right does not allow county auditors to void a settlement approved by the tax commissioner who is using his or her authority to compromise tax claims.
Snodgrass has 10 days to file for reconsideration.
Here are four things to know about the supreme court’s decision and how it affects:
1. Stark County opposed the Lorain County auditor's appeal
Stark County Auditor Alan Harold supports moving forward with the settlement.
“This decision by the Ohio Supreme Court reflects what was sought by the majority of county auditors and school districts involved,” Harold said. “We patiently wait its finality, subject to any additional rights of reconsideration by the Lorain County auditor.”
Harold, along with seven other county auditors and two school districts, filed an amicus brief with the Supreme Court asking the court to uphold the settlement agreement reached by the tax commissioner and NEXUS owners.
They said the Lorain County auditor’s appeal has significantly impacted the other 12 counties, as well as the school districts and other local governments located along the pipeline, because it has delayed the payment of millions of dollars in property-tax distributions.
While NEXUS’ valuation was under review, its owners paid taxes based on the value they believed the pipe was worth, not the state’s assigned taxable value, as they were permitted to do. The payments are the difference between the amount the pipeline owners have paid and the amount they should have paid under the settlement terms.
The county auditors told the supreme court that the delay in payments has halted school construction projects and led to budget deficits.
2. Stark County stands to receive nearly $6 million from NEXUS payments
NEXUS owners have paid $23.4 million in property taxes to Stark County and the taxing entities in Washington, Nimishillen, Marlboro and Lake townships, according to the county auditor’s office.
If the court’s decision stands, Stark County would receive an estimated $5.6 million in additional payments from NEXUS owners to cover the five years' worth of payments where NEXUS was paying only the amount it thought the pipeline was worth.
The combined amount still is far less than the projected $41.7 million that Stark County initially expected to receive over the first five years of the pipeline’s operation.
Affected entities include Lake Local Schools, Lake Township, Louisville City Schools, Louisville Public Library, Marlboro Township, Marlington Local Schools, Nimishillen Township, North Canton, North Canton Public Library, Plain Local Schools, R.G. Drage Career & Technical Center, Rodman Public Library, Stark County 911, Stark County Board of Developmental Disabilities, Stark County Mental Health & Addiction Recovery, Stark County Children Services, Stark County government, Stark Parks, Stark County District Library and Washington Township.
Northwest Local Schools also is set to receive money from the settlement for land within its district boundaries that sit in Summit County. Its collections are not included in the Stark County figures.
3. Marlington Local Schools isn’t celebrating yet
Among Stark County entities, Marlington Local Schools stands to gain the most from the settlement, with $2.1 million owed.
Marlington Superintendent Daniel Swisher said he is waiting until the 10-day reconsideration period ends before getting too hopeful.
“I’m going to hold off on the excitement right now to make sure (the court decision) doesn’t get reconsidered and for the state to give us a little more guidance,” said Swisher, recalling previous times when the district began making plans for additional funds only to have the payments delayed again.
Swisher said if the district does receive the additional money, it will be placed into a special capital improvement fund to improve district buildings and grounds.
4. NEXUS court decision does not affect Rover Pipeline's disputed tax payments
Some Stark County schools, libraries and governmental entities still are awaiting a resolution on the taxable value for the Rover Pipeline.
Rover’s parent company, Energy Transfer, has appealed an Ohio Board of Tax Appeals decision to the Ohio Supreme Court that would set the value of the pipeline at $3.7 billion in Ohio. The company believes the value should be $1.792 billion.
Rover’s twin 42-inch-diameter mainlines cross Pike, Bethlehem and Sugar Creek townships in Stark County and traverse Carroll, Tuscarawas, Harrison, Wayne, Ashland and Richland counties.
Reach Canton Repository staff writer Kelli Weir at 330-580-8339 or kelli.weir@cantonrep.com .
NEXUS Settlement Infogram This article originally appeared on The Repository: Ohio Supreme Court clears legal hurdle for NEXUS settlement, Stark to get $5.6 million
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