OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
improper
H.B. 422 Bill Analysis
134th General Assembly
Click here for H.B. 422’s Fiscal Note
Version: As Passed by the House
Primary Sponsors: Reps. Fraizer and West
Effective Date:
Reid J. Fleeson, Attorney
SUMMARY
 Makes changes to municipal corporation laws relating to actions at law for recovery of
unpaid rents and charges for village utility services and for unpaid rates and charges for
sewerage and collection or disposal services.
 Establishes new regulations and authority regarding rates and charges, fees, and other
billing issues for municipal services and provides a complaint process for persons to
make improper billing complaints to municipal services providers.
 Applies the requirement that a contract for sewerage service and collection or disposal
service be made with the owner-occupant of the property served as a prerequisite for
imposing a municipal lien for unpaid amounts for those services.
 Establishes new requirements regarding municipal liens (liens certified for water
services, sewerage services, and collection or disposal services).
 Requires a municipal authority to provide additional verification to the county auditor
and give notice to the property owner before a municipal lien may be placed on a
property.
 Directs the Environmental Review Appeals Commission to hear municipal service
improper billing appeals and municipal lien appeals under procedures and requirements
imposed by the bill.
 Applies the municipal lien appeals process only to municipal liens placed on a property
on or after the effective date of the bill.
 Exempts a county that operates as a municipal services provider from the municipal
services improper billing requirements, the municipal services improper billing appeals
process, and the municipal lien appeals process created by the bill.
May 19, 2022
Office of Research and Drafting LSC Legislative Budget Office
DETAILED ANALYSIS
Introduction
The bill makes changes to Ohio municipal corporation laws relating to actions at law for
recovery of unpaid rates, rents, and charges for village utility services, sewerage services, and
for unpaid rates and charges for collection or disposal services. The bill also provides for other
new regulations and authority regarding rates and charges, fees, and other billing issues for
municipal services. Additionally, the bill establishes a process that a municipal authority must
follow before a municipal lien can be placed on a property. Finally, the bill empowers the
Environmental Review Appeals Commission (ERAC) to address municipal services billing and
payment complaints and municipal services lien appeals. It is not clear how these alterations
might impact Municipal Home Rule authority granted by the Ohio Constitution and how the
courts might address any such impact.1
Under current law, municipal corporations in Ohio are either villages or cities. A village
has a population of less than 5,000; a city has a population of 5,000 or more.2
Terms used in bill
For purposes of this analysis, “village utility service” means water, electricity, gas, and
other similar utility services provided through a village’s board of trustees of public affairs.3
“Collection or disposal service,” under this analysis, refers to the collection or disposal of
garbage, ashes, animal and vegetable refuse, dead animals, or animal offal.4
The bill defines “municipal services” as water services, collection or disposal services,
and sewerage services.5 The bill also defines “municipal authority” to mean a board of trustees
of public affairs (regarding village utility service), director of public service or other official or
body designated by charter (regarding city water service), or the legislative authority of a
municipal corporation (regarding collection or disposal service and sewerage service), as the
context requires.6 “Municipal services provider” is defined in the bill as the entity created or
1 See the LSC Members Brief on Municipal Home Rule (PDF), pp. 2-3 and 7-8, which is available on the
LSC website: lsc.ohio.gov/membersbriefs.
2 Ohio Constitution, Article 18, Section 1.
3 R.C. 735.29(C) and (D).
4 R.C. 701.10.
5 R.C. 701.20(E).
6 R.C. 701.20(D).
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designated by the municipal authority to provide municipal services.7 “Water services,” as used
in this analysis, refers to water services of a city and village waterworks services.8
Actions at law
Village utility service actions at law
The bill provides that when rents and charges for village utility services consisting of
electricity, gas, or other public utility services have not been paid when due, the village may
collect them by actions at law in the village’s name from an owner, tenant, or other person who
is liable to pay them. Currently, the law says those rents and charges may be collected by
actions at law in the village’s name. Under the bill and continuing law, all unpaid village utility
service rents and charges may also be certified to the county auditor to be collected as other
village taxes.9
Sewerage service actions at law
The bill permits the legislative authority of a municipal corporation that has established
a rate or charge for sewerage services to collect unpaid amounts from an owner, tenant, or
other person who is liable to pay the unpaid amounts using an action at law in the name of the
municipal corporation.10
Collection or disposal service actions at law
The bill provides that the legislative authority of a municipal corporation that has
established a rate or charge for collection or disposal service, which has gone unpaid, may
collect it by actions at law in the name of the municipal corporation from an owner, tenant, or
other person who is liable to pay the rents or charges.11
Municipal services authority
The bill creates various other new regulations and authority regarding municipal
services.
Financial responsibility
The bill provides that any person who contracts to receive municipal services is
financially responsible for paying all rates, fees, charges, and costs associated with the delivery
of that service.12
7 R.C. 701.20(F).
8 R.C. 735.29(D) and 743.04.
9 R.C. 735.29(C).
10 R.C. 729.491.
11 R.C. 701.101.
12 R.C. 701.21.
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Certifying liens or bringing actions at law
If a municipal authority attempts to certify a lien to the county auditor (for water
services, sewerage services, village utility services, or municipal collection or disposal services)13
against a property or brings an action (an action at law to collect for water services, sewerage
services, village utility services, or municipal collection or disposal services)14 due to unpaid
municipal services rates or charges, the bill establishes a rebuttable presumption that amounts
exceeding the termination amount cannot be certified as a lien, or recovered by the action,
against the property owner.
The presumption may be rebutted by any of the following based on a preponderance of
the evidence:
 The property owner agreed to pay all the unpaid rates and charges, after having been
given notice of the delinquent amount;
 The property owner occupies the residence;
 The municipal authority attempted to mitigate any unpaid rates or charges by strictly
adhering to its established protocol for terminating service for delinquent customers;
 Any other evidence demonstrating that the municipal authority mitigated the amount of
unpaid rates and charges before proceeding against the property owner.
These provisions do not abridge or eliminate any cause of action that a municipal
authority may have against the tenant personally, or other persons liable for the unpaid rents
or charges.15
Under the bill, “property owner” means the person who owns the residential property
to which municipal services are provided and to whom all of the following apply:
 The person does not occupy the property;
 The tenant or other occupant is contractually responsible to pay the charges and fees
imposed for the municipal services;
13 R.C. 701.20(B). The definition of “certify a lien” in the bill includes village water, electric, gas, and
other public utility service. But, “municipal services” do not include village electric, gas, and other utility
services. This is ambiguous, but since “certify a lien” includes village water service, which water service
is also a municipal service under the bill, it is likely that service is what is included when the municipal
authority seeks to certify a lien under this provision. The ambiguity could be clarified.
14 R.C. 701.20(A). Similar ambiguity exists for the definition of “bring an action” as for “certify a lien” in
the note above since “municipal services” do not include village electric, gas, or other utility service. But,
it is likely, since “bring an action” includes actions for village water service, that water service is what is
addressed when a municipal authority brings an action. The ambiguity could be clarified.
15 R.C. 701.22.
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 If the residential property consists of two or more dwelling units, both of the following
must be true:
 Each dwelling unit has a separate meter;
 The tenant or other occupant of each dwelling unit is contractually responsible to
pay the charges and fees imposed for the municipal services provided to the unit in
which they reside.16
A “tenant” under the bill is a person entitled under a rental agreement to the use and
occupancy of residential premises17 to the exclusion of others. A “dwelling unit” is a structure
or the part of a structure that is used as a home, residence, or sleeping place by one person
who maintains a household or by two or more persons who maintain a common household.18
The “termination amount” means the amount of rates or charges for municipal services
that when unpaid results in the termination of those services under the municipal authority
regulations.19
Tenant reinstatement fee
A municipal authority may establish a tenant reinstatement fee for municipal services.
The fee may be applied if the tenant requests to reestablish municipal services after such
services have been terminated by the municipal services provider or the tenant.20
Tracking unpaid rates
A municipal authority may track any unpaid rates or charges owed by a person for any
municipal services between residential properties if:
 The person who contracted for municipal services currently has a debit or credit
regarding the municipal services provided to the person; and
 Municipal services provided to that person have been terminated at one residential
property and established at another residential property.21
16 R.C. 701.20(G).
17 Residential premises are dwelling units, as defined under the bill, but with many notable exclusions,
consisting of, for example, prisons, college dormitories, and hospitals. R.C. 5321.01(A) and (C), not in the
bill.
18 R.C. 701.20(C); R.C. 5321.01(A) and (F), not in the bill.
19 R.C. 701.20(H).
20 R.C. 701.23.
21 R.C. 701.24.
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Billing details and history review
A municipal authority may access and review the billing details and histories of any
person who contracts to receive municipal services in order to identify and track unpaid rates
or charges.22
Improper billing complaints
Right to make complaint
The bill provides that a person believing to have been improperly billed for municipal
services may file a complaint with the municipal services provider.
Complaint process
A municipal services provider must establish a method for persons to make improper
billing complaints. The provider must investigate every complaint received and resolve each
complaint within ten business days. If the provider is unable to timely resolve the complaint, it
must provide the person who filed the complaint a status report every five business days
following the end of the ten-day period.
If a complaint is not resolved to the complaining person’s satisfaction, the person may
appeal the matter to ERAC (see “Improper billing appeals” below) if the amount in dispute
is $300 or more.23
Improper billing appeals
The bill requires ERAC to hear improper municipal services billing complaints. ERAC
must hear improper municipal services billing appeals if all the following applies: (1) the
complainant has previously filed such a complaint with the municipal services provider, (2) the
complaint has not been resolved to the complainant’s satisfaction, and (3) the disputed amount
is $300 or more. ERAC must also hear appeals from property owners in cases where a tenant
who is financially responsible for paying for municipal services failed to pay and the property
owner was held responsible as a result. ERAC cannot hear appeals of the reasonableness of the
rates, charges, or rents set by the municipal authority for municipal services.
In connection with an appeal, ERAC may access and review the billing details and
histories of a person who contracts to receive municipal services in order to identify unpaid
rates or charges.24
Hotline
The bill requires ERAC to create a hotline to do the following:
22 R.C. 701.25.
23 R.C. 701.26.
24 R.C. 3745.151 and 3745.154.
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 Allow a person to file an appeal regarding an improper billing complaint for municipal
services;
 Provide information regarding filing an appeal, the appeals process, and other related
information.25
Rules
ERAC is required to adopt rules (but is not subject to the Administrative Procedure Act,
R.C. Chapter 119 in doing so) regarding improper billing appeals for municipal services,
including the following:
 A procedure by which complaints are evaluated, to determine whether a hearing is
warranted;
 Hearing procedures and processes;
 Standards by which ERAC resolves complaints.26
Municipal liens
The bill makes several changes to existing law regarding the placement of municipal
liens. A “municipal lien” is defined in the bill as a lien certified for unpaid water services,
sewerage services, or collection or disposal services amounts.27
Placement of lien
Before a municipal lien may be placed on a property by the county auditor under the
bill, the auditor must receive both:
 Additional certification (see “Additional certification” below) that the unpaid rents,
rates, or charges have arisen from a service contract made directly with an owner who
occupies the property served;
 Verification from the appropriate municipal authority that the required notice (see
“Notice to property owner” below) was given to the property owner.
Under current law, no requirement for owner-occupation and owner-contracting exists
as a prerequisite to imposition of a lien regarding unpaid amounts for sewerage and collection
or disposal services. Further, additional certification is required under current law only for
water service liens and consists only of certification that the unpaid rents or charges arose
under a service contact with an owner occupying the property.
Pursuant to continuing law, unchanged by the bill, a lien for unpaid collection or
disposal ser