OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 596 Bill Analysis
135th General Assembly
Click here for H.B. 596’s Fiscal Note
Version: As Introduced
Primary Sponsor: Rep. Robinson
Effective date:
Andrew Little, Attorney
SUMMARY
▪ Requires a municipal corporation to obtain the approval of an affected school district
before designating a tax increment financing (TIF) property tax exemption that applies
throughout an incentive district, regardless of the amount or term of the TIF.
DETAILED ANALYSIS
Municipal incentive district TIF
TIF background
Continuing law allows municipalities, townships, and counties to create tax increment
financing (TIF) arrangements to finance public infrastructure improvements. Through a TIF, a
political subdivision grants a property tax exemption for the increase in the assessed value of
designated parcels resulting from later improvements to the parcels. The exemption may apply
to specific parcels or to entire areas, which are called “incentive districts.” In TIF arrangements,
the affected property owners make payments in lieu of taxes to the subdivision equal to the
amount of taxes that would otherwise have been paid with respect to the exempted
improvements. TIFs thereby create a flow of revenue back to the subdivision, which can use those
payments to pay the public infrastructure costs necessitated by the development project, but
reduce tax revenue that would have gone to other purposes.
School district approval
The bill expands the circumstances under which a school board must approve an incentive
district TIF proposed by a municipal corporation. In essence, the bill requires school board
approval in all instances, no matter the specific terms and attributes of the TIF. The bill does not
affect incentive district TIFs designated by townships or counties or single parcel TIFs.
Under continuing law, a municipal incentive district TIF may exempt up to 100% of the
value of new improvements constructed within the district for up to 30 years. However, under
current law, a municipal corporation may only designate an incentive district TIF that exempts
December 2, 2024
Office of Research and Drafting LSC Legislative Budget Office
over 75% of the value of new improvements or that would last more than ten years if it first
obtains the permission of the local, city, or exempted village school district with territory in the
proposed incentive district. School district permission is not required if the municipality agrees
to compensate the school district for its full revenue losses or if the school board adopts a
resolution waiving its approval rights.
The bill requires school district approval for every municipal incentive district TIF,
regardless of its exemption percentage or term, unless either the municipality fully compensates
the school district or the school board waives its approval rights. The notice requirements,
timeline, and procedures of obtaining permission are the same as required under current law for
incentive district TIFs that exempt more than 75% of increased value or last more than ten years.
For example, the municipality must give the school district notice at least 45 business days before
designating the incentive district, the school board may approve or disapprove of the TIF or
negotiate a compensation agreement, and a joint vocational school district that covers the
incentive district must be compensated at the same rate and under the same terms of any such
agreement.1
The bill’s expanded school district permission requirements apply to TIF ordinances
adopted by a municipality 45 or more days after the bill’s 90-day effective date.2
HISTORY
Action Date
Introduced 05-15-24
ANHB0596IN-135/ar
1
R.C. 5709.40(C) and (D).
2
Section 3.
P a g e |2 H.B. 596
As Introduced


Statutes affected:
As Introduced: 5709.40