As Introduced
135th General Assembly
Regular Session H. B. No. 596
2023-2024
Representative Robinson
Cosponsors: Representatives Brent, Brewer, Liston, McNally, Miller, J., Mohamed,
Somani, Troy, Weinstein
A BILL
To amend section 5709.40 of the Revised Code to 1
require school board approval of municipal tax 2
increment financing incentive district 3
arrangements. 4
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 5709.40 of the Revised Code be 5
amended to read as follows: 6
Sec. 5709.40. (A) As used in this section: 7
(1) "Blighted area" and "impacted city" have the same 8
meanings as in section 1728.01 of the Revised Code. 9
(2) "Business day" means a day of the week excluding 10
Saturday, Sunday, and a legal holiday as defined under section 11
1.14 of the Revised Code. 12
(3) "Housing renovation" means a project carried out for 13
residential purposes. 14
(4) "Improvement" means the increase in the assessed value 15
of any real property that would first appear on the tax list and 16
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As Introduced
duplicate of real and public utility property after the 17
effective date of an ordinance adopted under this section were 18
it not for the exemption granted by that ordinance. 19
(5) "Incentive district" means an area not more than three 20
hundred acres in size enclosed by a continuous boundary in which 21
a project is being, or will be, undertaken and having one or 22
more of the following distress characteristics: 23
(a) At least fifty-one per cent of the residents of the 24
district have incomes of less than eighty per cent of the median 25
income of residents of the political subdivision in which the 26
district is located, as determined in the same manner specified 27
under section 119(b) of the "Housing and Community Development 28
Act of 1974," 88 Stat. 633, 42 U.S.C. 5318, as amended; 29
(b) The average rate of unemployment in the district 30
during the most recent twelve-month period for which data are 31
available is equal to at least one hundred fifty per cent of the 32
average rate of unemployment for this state for the same period. 33
(c) At least twenty per cent of the people residing in the 34
district live at or below the poverty level as defined in the 35
federal Housing and Community Development Act of 1974, 42 U.S.C. 36
5301, as amended, and regulations adopted pursuant to that act. 37
(d) The district is a blighted area. 38
(e) The district is in a situational distress area as 39
designated by the director of development under division (F) of 40
section 122.23 of the Revised Code. 41
(f) As certified by the engineer for the political 42
subdivision, the public infrastructure serving the district is 43
inadequate to meet the development needs of the district as 44
evidenced by a written economic development plan or urban 45
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As Introduced
renewal plan for the district that has been adopted by the 46
legislative authority of the subdivision. 47
(g) The district is comprised entirely of unimproved land 48
that is located in a distressed area as defined in section 49
122.23 of the Revised Code. 50
(6) "Overlay" means an area of not more than three hundred 51
acres that is a square, or that is a rectangle having two longer 52
sides that are not more than twice the length of the two shorter 53
sides, that the legislative authority of a municipal corporation 54
delineates on a map of a proposed incentive district. 55
(7) "Project" means development activities undertaken on 56
one or more parcels, including, but not limited to, 57
construction, expansion, and alteration of buildings or 58
structures, demolition, remediation, and site development, and 59
any building or structure that results from those activities. 60
(8) "Public infrastructure improvement" includes, but is 61
not limited to, public roads and highways; water and sewer 62
lines; the continued maintenance of those public roads and 63
highways and water and sewer lines; environmental remediation; 64
land acquisition, including acquisition in aid of industry, 65
commerce, distribution, or research; demolition, including 66
demolition on private property when determined to be necessary 67
for economic development purposes; stormwater and flood 68
remediation projects, including such projects on private 69
property when determined to be necessary for public health, 70
safety, and welfare; the provision of gas, electric, and 71
communications service facilities, including the provision of 72
gas or electric service facilities owned by nongovernmental 73
entities when such improvements are determined to be necessary 74
for economic development purposes; the enhancement of public 75
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As Introduced
waterways through improvements that allow for greater public 76
access; and off-street parking facilities, including those in 77
which all or a portion of the parking spaces are reserved for 78
specific uses when determined to be necessary for economic 79
development purposes. 80
(9) "Nonperforming parcel" means a parcel to which all of 81
the following apply: 82
(a) The parcel is exempted from taxation under division 83
(B) of this section or has been included in a district created 84
under division (C) of this section. 85
(b) The parcel's owner is required to make payments in 86
lieu of taxes in accordance with section 5709.42 of the Revised 87
Code. 88
(c) No such payments have been remitted to the county 89
treasurer since the inception of the exemption or district. 90
(B) The legislative authority of a municipal corporation, 91
by ordinance, may declare improvements to certain parcels of 92
real property located in the municipal corporation to be a 93
public purpose. Improvements with respect to a parcel that is 94
used or to be used for residential purposes may be declared a 95
public purpose under this division only if the parcel is located 96
in a blighted area of an impacted city. For this purpose, 97
"parcel that is used or to be used for residential purposes" 98
means a parcel that, as improved, is used or to be used for 99
purposes that would cause the tax commissioner to classify the 100
parcel as residential property in accordance with rules adopted 101
by the commissioner under section 5713.041 of the Revised Code. 102
Except as otherwise provided under division (D) of this section 103
or section 5709.51 of the Revised Code, not more than seventy- 104
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As Introduced
five per cent of an improvement thus declared to be a public 105
purpose may be exempted from real property taxation for a period 106
of not more than ten years. The ordinance shall specify the 107
percentage of the improvement to be exempted from taxation and 108
the life of the exemption. 109
An ordinance adopted or amended under this division shall 110
designate the specific public infrastructure improvements made, 111
to be made, or in the process of being made by the municipal 112
corporation that directly benefit, or that once made will 113
directly benefit, the parcels for which improvements are 114
declared to be a public purpose. The service payments provided 115
for in section 5709.42 of the Revised Code shall be used to 116
finance the public infrastructure improvements designated in the 117
ordinance, for the purpose described in division (D)(1) of this 118
section or as provided in section 5709.43 of the Revised Code. 119
(C)(1) The legislative authority of a municipal 120
corporation may adopt an ordinance creating an incentive 121
district and declaring improvements to parcels within the 122
district to be a public purpose and, except as provided in 123
division (C)(2) of this section, exempt from taxation as 124
provided in this section, but no . Before adopting such an 125
ordinance, the legislative authority shall comply with division 126
(D) of this section and obtain the approval of the board of 127
education of the affected school district if such approval is 128
required by that division. The legislative authority of a 129
municipal corporation that has a population that exceeds twenty- 130
five thousand, as shown by the most recent federal decennial 131
census, shall may not adopt such an ordinance that creates an 132
incentive district if the sum of the taxable value of real 133
property in the proposed district for the preceding tax year and 134
the taxable value of all real property in the municipal 135
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As Introduced
corporation that would have been taxable in the preceding year 136
were it not for the fact that the property was in an existing 137
incentive district and therefore exempt from taxation exceeds 138
twenty-five per cent of the taxable value of real property in 139
the municipal corporation for the preceding tax year. The 140
The ordinance shall delineate the boundary of the proposed 141
district and specifically identify each parcel within the 142
district. A proposed district may not include any parcel, other 143
than a nonperforming parcel, that is or has been exempted from 144
taxation under division (B) of this section or that is or has 145
been within another district created under this division. On and 146
after the effective date of the district, a nonperforming parcel 147
within the district is no longer exempted from taxation under 148
division (B) of this section or included within an incentive 149
district under any previous ordinance, and the parcel's owner is 150
no longer required to make payments in lieu of taxes under such 151
a previous ordinance in accordance with section 5709.42 of the 152
Revised Code. Any exemption application filed with the tax 153
commissioner under section 5715.27 of the Revised Code under the 154
second ordinance shall identify the nonperforming parcels 155
included in the second district, the original ordinance under 156
which the nonperforming parcels were originally exempted, and 157
the value history of each nonperforming parcel since the 158
enactment of the original ordinance. An ordinance may create 159
more than one such district, and more than one ordinance may be 160
adopted under division (C)(1) of this section. 161
(2)(a) Not later than thirty days prior to adopting an 162
ordinance under division (C)(1) of this section, if the 163
municipal corporation intends to apply for exemptions from 164
taxation under section 5709.911 of the Revised Code on behalf of 165
owners of real property located within the proposed incentive 166
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As Introduced
district, the legislative authority of the municipal corporation 167
shall conduct a public hearing on the proposed ordinance. Not 168
later than thirty days prior to the public hearing, the 169
legislative authority shall give notice of the public hearing 170
and the proposed ordinance by first class mail to every real 171
property owner whose property is located within the boundaries 172
of the proposed incentive district that is the subject of the 173
proposed ordinance. The notice shall include a map of the 174
proposed incentive district on which the legislative authority 175
of the municipal corporation shall have delineated an overlay. 176
The notice shall inform the property owner of the owner's right 177
to exclude the owner's property from the incentive district if 178
the owner's entire parcel of property will not be located within 179
the overlay, by submitting a written response in accordance with 180
division (C)(2)(b) of this section. The notice also shall 181
include information detailing the required contents of the 182
response, the address to which the response may be mailed, and 183
the deadline for submitting the response. 184
(b) Any owner of real property located within the 185
boundaries of an incentive district proposed under division (C) 186
(1) of this section whose entire parcel of property is not 187
located within the overlay may exclude the property from the 188
proposed incentive district by submitting a written response to 189
the legislative authority of the municipal corporation not later 190
than forty-five days after the postmark date on the notice 191
required under division (C)(2)(a) of this section. The response 192
shall be sent by first class mail or delivered in person at a 193
public hearing held by the legislative authority under division 194
(C)(2)(a) of this section. The response shall conform to any 195
content requirements that may be established by the municipal 196
corporation and included in the notice provided under division 197
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As Introduced
(C)(2)(a) of this section. In the response, property owners may 198
identify a parcel by street address, by the manner in which it 199
is identified in the ordinance, or by other means allowing the 200
identity of the parcel to be ascertained. 201
(c) Before adopting an ordinance under division (C)(1) of 202
this section, the legislative authority of a municipal 203
corporation shall amend the ordinance to exclude any parcel 204
located wholly or partly outside the overlay for which a written 205
response has been submitted under division (C)(2)(b) of this 206
section. A municipal corporation shall not apply for exemptions 207
from taxation under section 5709.911 of the Revised Code for any 208
such parcel, and service payments may not be required from the 209
owner of the parcel. Improvements to a parcel excluded from an 210
incentive district under this division may be exempted from 211
taxation under division (B) of this section pursuant to an 212
ordinance adopted under that division or under any other section 213
of the Revised Code under which the parcel qualifies. 214
(3)(a) An ordinance adopted under division (C)(1) of this 215
section shall specify the life of the incentive district and the 216
percentage of the improvements to be exempted, shall designate 217
the