OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 19 Bill Analysis
134th General Assembly
Click here for S.B. 19’s Fiscal Note
Version: As Passed by the House
Primary Sponsor: Sen. Schaffer
Effective Date:
Michael Hinel, Attorney
Prince Senayah, LSC Fellow
SUMMARY
 Authorizes a property tax exemption for certain property used for wetland conservation
or water quality improvement projects.
 Removes a requirement that community schools file an annual statement with the Tax
Commissioner after an initial property tax exemption application is approved as a
condition of retaining a property tax exemption.
 Requires the Tax Commissioner, in coordination with county auditors, to periodically
assess and report on the continued eligibility of real property and manufactured homes
that receive one or more homestead tax incentives.
 Allows a county auditor to initiate the property valuation adjustment process for
destroyed or damaged property.
 Requires the Department of Taxation to prescribe a form to be used to request a
valuation adjustment.
 Modifies the content and format of property tax rate statements required annually to
be published in the newspaper or enclosed with each tax bill.
 Delays the effective date new territory may be added to certain regional transit
authorities (RTAs) after the approval of such inclusion by voters, resulting in the addition
of that territory no earlier than 12 months after such approval.
 Limits, from 1.5% to 0.3%, the maximum sales and use tax rate that may be levied by
such an RTA as part of a combined question to expand the RTA and convert its property
taxes to a sales and use tax.
July 16, 2021
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 Authorizes, in any other context, such an RTA to levy sales and use tax above 0.3% if
each local government with territory in the RTA, except nonmember counties, approves
the higher rate.
 Prohibits such an RTA from levying any property tax in any year in which it levies and
collects sales and use tax.
 Exempts from state and local use tax the following watercraft that are seasonally stored
or repaired in Ohio:
 Watercraft purchased outside the state;
 Watercraft purchased in Ohio but titled, registered, or used outside the state, even if
the jurisdiction of titling or registration does not tax the sale, use, or ownership of
the watercraft;
 Watercraft purchased by a nonresident who paid a portion of Ohio sales tax at the
time of purchase.
 Specifies that the exemption does not apply to watercraft storage, repair, or installation
services.
 Purports to expand an existing property tax exemption for fraternal organizations to
include the property of such organizations with national governing bodies. (H.B. 110 of
the 134th General Assembly enacted an identical expansion.)
DETAILED ANALYSIS
Private wetlands property tax exemption
The bill authorizes a property tax exemption for certain property used for wetland
conservation or water quality improvement projects. To qualify, the property must be owned or
held by a 501(c)(3) organization that is dedicated to the conservation of natural resources or
improving water quality. Additionally, the property must either be subject to (a) a federal or
state environmental response plan for wetland conservation or mitigation or (b) a project to
improve the quality of the state’s natural waters that receives funding through the H2Ohio
program.1
The exemption applies to tax years ending on or after the provision’s effective date.2
1 R.C. 5709.09(B). The H2Ohio program provides funding for water quality improvement projects. The
bill applies to “nature water projects,” which are projects that will help reduce the levels of phosphorus,
nitrogen, or sediment in the state’s natural waters. R.C. 126.60, not in the bill.
2 Section 3.
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As Passed by the House
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Community school property tax exemption applications
Under current law, recently enacted in H.B. 166 of the 133rd General Assembly, a
community school seeking a tax exemption for its property is excused from the requirement to
file an exemption application with the Tax Commissioner as a condition of obtaining the
exemption after its initial application is approved, but must instead file an annual statement
with the Commissioner affirming that it continues to qualify for the exemption. This bill
discontinues this provision.
Under continuing law, property used for an educational purpose, including property
used as a community school, qualifies for a property tax exemption.3 To obtain a property tax
exemption, a property owner, including a community school, is required to apply to the Tax
Commissioner, by the last day of the taxable year for which the exemption is sought, to obtain
the exemption, with only a few exceptions. The Commissioner evaluates each application and
decides whether to approve the exemption. If approved, the Commissioner will order the
county auditor to remove the property from the tax list.
H.B. 166 changed the exemption process for a community school. Instead of being
required to obtain the Tax Commissioner’s approval for any year after the Commissioner
approves the initial application, a community school is excused from refiling an application for
any future year, so long as the community school submits an annual statement to the
Commissioner attesting that its property continues to qualify for the educational purpose
exemption.
By discontinuing this provision, the bill again requires community schools to follow the
same exemption application procedures applicable to other schools and most other property
owners seeking a tax exemption.4
The change begins to apply in tax year 2022.5
Homestead incentive study program
The bill requires the Tax Commissioner to evaluate and report on whether real property
and manufactured homes in a county that receive one or more homestead-related tax
incentives continue to be eligible for those incentives. These studies, executed in coordination
with county auditors, must be conducted for property in each county every three years.
Homestead property tax incentives
Continuing law authorizes two property tax incentives for real property and
manufactured homes that function as a homeowner’s personal residence, i.e., a homestead.
The first is a property tax credit that equals 2.5% of certain property taxes assessed against a
homestead, often referred to as the “2.5% rollback.” The second incentive, often referred to as
3 R.C. 5709.07(A), not in the bill.
4 R.C. 5713.08 and 5715.27.
5 Section 3.
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the “homestead exemption” is an exemption that equals the taxes on a portion of the value
(either $25,000 or $50,000) of a homestead owned by senior citizens, persons and veterans
with a disability, and the spouses of public service officers killed in the line of duty. In some
cases, the owner’s income must be less than a certain amount to qualify. To obtain either
incentive, the homeowner must file an application with the county auditor. If the property no
longer qualifies for the incentive, the owner must notify the county auditor.6
Tax Commissioner’s study
The bill requires the Commissioner to annually study and assess whether properties in a
county that receive a homestead incentive (referred to as a “dwelling tax exemption” by the
bill) continue to qualify for the incentive. The Commissioner initiates the study process in
January of each year by requesting that the county auditor of each county subject to a
reappraisal or update of its property values in that year (see “Valuation reappraisal and
update years,” below) provide a list of properties subject to one or more dwelling tax
exemptions and any other information the Commissioner might require to evaluate such
properties’ eligibility for those exemptions. Within a reasonable amount of time, the auditor
must send this information electronically to the Commissioner, in the form and manner
prescribed by the Commissioner in consultation with the County Auditors Association of Ohio.7
Upon receipt of this property list and information, the Commissioner must compare it to
state and local records, including tax, Bureau of Motor Vehicle, and vital statistics records, to
determine whether the exemptions validly apply to each listed property. The Commissioner
must notify county auditors of any property whose eligibility for a dwelling tax exemption is
inconsistent with these records. Any information conveyed to a county auditor is confidential
and not a public record.8
A county auditor has three years, until the beginning of the next tax year in which the
county is subject to a reappraisal or update, to investigate properties flagged by the Tax
Commissioner and report to the Commissioner those properties for which the auditor is able to
determine dwelling tax exemption eligibility or ineligibility and those for which the auditor is
unable to make a determination. The Commissioner must evaluate the auditors’ findings and,
within three months (by April 1), submit to the General Assembly, Governor, and Auditor of
State a report detailing savings from the discovery and disqualification of ineligible properties,
as well as any data limitations encountered by the Commissioner in the process.9
The bill specifically authorizes the Auditor of State to audit these studies and reports.10
6 R.C. 323.152(A) and (B) and 323.153, not in the bill.
7 R.C. 323.18(B).
8 R.C. 323.18(C) and (D) and 5703.21.
9 R.C. 323.18(E), (F), and (G).
10 R.C. 323.18(H).
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Valuation reappraisal and update years
The bill requires the dwelling tax exemption study to be undertaken in each county
beginning in a year in which it undergoes a property valuation reappraisal or update. Under
continuing law, property is valued, or appraised, by county auditors for property tax purposes
every six years, a process commonly referred to as a “sexennial reappraisal.”11 Every third year
of that cycle, the Tax Commissioner updates property values by comparing recent sales of
comparable properties in the same neighborhood, a process commonly referred to as a
“triennial update.”12 The reappraisal and update cycle is staggered for each county so that
roughly one-third of Ohio counties undergoes a reappraisal or update in any year. Thus, for any
county, the bill’s study will occur every three years, and each study will cover about one-third of
Ohio counties.
Valuation adjustment for damaged property
Under continuing law, the taxable value of property that is injured or damaged may be
reduced by the county auditor to account for the casualty, either pursuant to a request made
by the property owner or two disinterested residents of the same township or municipal
corporation. The bill adds a third way for obtaining such a valuation adjustment by authorizing
the county auditor to initiate a property valuation adjustment for destroyed or damaged
property without receiving a request from the owner or two disinterested persons.
Additionally, the bill requires the Department of Taxation to prescribe a form for
requesting a valuation adjustment. Current law requires the owner or two disinterested
persons to apply by filing an oath (in the case of the owner) or an affidavit (in the case of the
two disinterested persons). Under the bill, the auditor may initiate the adjustment by filing this
form on behalf of the property owner.13
Calculation of adjustment
Under continuing law, the amount of the valuation adjustment depends not only on the
extent of the damage, which must be at least $100 in order to qualify for an adjustment, but
also the date the damage occurred. Depending on the calendar quarter in which the damage
occurred, the valuation adjustment may range from the full extent of the damage to only 25%
of the total amount of the damage. The table below summarizes the amount of the damage
that may be deducted from the property’s valuation based on the calendar quarter the damage
occurred.
11 R.C. 5713.01, not in the bill.
12 R.C. 5715.24, not in the bill.
13 R.C. 319.38.
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If the injury or destruction Then the county auditor must
occurs during. . . deduct from the
property’s valuation . . .
The first calendar quarter An amount that fairly represents the
extent of the injury or destruction
The second calendar quarter 75% of that amount
The third calendar quarter 50% of that amount
The fourth calendar quarter 25% of that amount
Property tax rate statements
Under continuing law, after the county auditor compiles and certifies to the county
treasurer, no later than the first Monday in August of each year, the real property tax list, the
auditor must provide to the treasurer a statement of property tax rates applicable to each
taxing district in the county.14 The treasurer must then publish the statement in the newspaper
or enclose it with each tax bill. Under current law, the statement must include, for each district,
voted tax rates, effective tax rates, and tax reduction factors.
The bill makes several modifications to the content and format of the statement. First,
the bill makes optional the requirement to list tax reduction factors in the statement. The tax
reduction factor is a tax credit against most levies that generally prevents increases in the tax
due to appreciation in property value, except appreciation resulting from new construction. A
separate reduction factor is calculated for each class of property – residential/agricultural and
commercial/industrial. The tax reduction factor is a property tax credit, so it does not actually
affect the voted rate of a levy. However, it does impact the collections that may otherwise be
generated by a particular levy. These reduced collections may be converted to an effective
property tax rate by dividing them by the total taxable value in the applicable class of property.
In essence, a levy’s voted tax rate minus the tax reduction factor for each class of property
equals each class’s effective tax rate.
Second, the bill requires effective tax rates to be expressed as a percentage of true, or
market, value for each class of property.
Third, both the voted tax rates and effective tax rates must be expressed in mills per one
dollar of taxable value, which is 35% of true value. Under continuing law, both rates must be
expressed in dollars for each $1,000 of taxable value.
14 R.C. 319.28, not in the bill.
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Lastly, the bill removes the requirement that effective tax rates be printed in bold face
type.15
The bill’s changes to the content and format of property tax rate statements apply to tax
year 2022 and every tax year thereafter.16
Transit authority membership and taxation
The bill makes several modifications to the law authorizing the expansion and modifying
the taxing authority of a regional transit authority (RTA) that (1) levies a property tax and (2)
includes in its membership political subdivisions located in a county with a population of at
least 400,000 (referred to in this analysis as a “qualifying RTA”). The Toledo Area RTA appears
to be the only RTA that meets both of these criteria.
Membership expansion
A temporary procedure in continui