As Introduced
135th General Assembly
Regular Session S. B. No. 3
2023-2024
Senator Schuring
A BILL
To amend sections 107.036 and 5747.98 and to enact 1
section 122.97 of the Revised Code to create the 2
Ohio Community Revitalization Program, 3
authorizing nonrefundable income tax credits for 4
undertaking community projects. 5
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 107.036 and 5747.98 be amended 6
and section 122.97 of the Revised Code be enacted to read as 7
follows: 8
Sec. 107.036. (A) For each business incentive tax credit, 9
the main operating appropriations act shall contain a detailed 10
estimate of the total amount of credits that may be authorized 11
in each year, an estimate of the amount of credits expected to 12
be claimed in each year, and an estimate of the amount of 13
credits expected to remain outstanding at the end of the 14
biennium. The governor shall include such estimates in the state 15
budget submitted to the general assembly pursuant to section 16
107.03 of the Revised Code. 17
(B) As used in this section, "business incentive tax 18
credit" means all of the following: 19
S. B. No. 3 Page 2
As Introduced
(1) The job creation tax credit under section 122.17 of 20
the Revised Code; 21
(2) The job retention tax credit under section 122.171 of 22
the Revised Code; 23
(3) The historic preservation tax credit under section 24
149.311 of the Revised Code; 25
(4) The motion picture and broadway theatrical production 26
tax credit under section 122.85 of the Revised Code; 27
(5) The new markets tax credit under section 5725.33 of 28
the Revised Code; 29
(6) The research and development credit under section 30
166.21 of the Revised Code; 31
(7) The small business investment credit under section 32
122.86 of the Revised Code; 33
(8) The rural growth investment credit under section 34
122.152 of the Revised Code; 35
(9) The opportunity zone investment credit under section 36
122.84 of the Revised Code; 37
(10) The transformational mixed use development credit 38
under section 122.09 of the Revised Code; 39
(11) The community revitalization credit under section 40
122.97 of the Revised Code. 41
Sec. 122.97. (A) For purposes of this section: 42
(1) "Business day" means a day of the week excluding 43
Saturday, Sunday, and a legal holiday as defined under section 44
1.14 of the Revised Code. 45
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As Introduced
(2) "Economically disadvantaged community" means a low- 46
income community as defined in section 45D of the Internal 47
Revenue Code. 48
(3) "Taxpayer," "taxable year," and "Internal Revenue 49
Code" have the same meanings as in section 5747.01 of the 50
Revised Code. 51
(4) "Community revitalization project" and "project" mean 52
a community project designed to incentivize the revitalization 53
of the state's communities. This may include a complete project 54
or a distinct phase of a larger project. 55
(5) A project is located in a township only if it is 56
located in the unincorporated area of the township. 57
(B) There is hereby created the Ohio community 58
revitalization program. Under the program, a person undertaking 59
a community revitalization project may apply to the director of 60
development for the right to claim or transfer a nonrefundable 61
credit against the tax levied under section 5747.02 of the 62
Revised Code. 63
The application shall be made on forms prescribed by the 64
director. The director shall accept and review applications 65
submitted under this section during two periods in a fiscal 66
year, the first of which begins on the first day of July and 67
ends after the thirtieth day of September, and the second of 68
which begins on the first day of January and ends after the 69
thirty-first day of March. If any of those dates fall on a day 70
that is not a business day, then the application period begins 71
on or ends after the next business day, as applicable. 72
The person shall include the following information with 73
the person's application: 74
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As Introduced
(1) A description of the proposed community revitalization 75
project and project site, and whether the application is made on 76
the basis of a distinct phase of a larger project; 77
(2) Documentation demonstrating the availability of the 78
proposed project site; 79
(3) The applicant's construction and development cost 80
estimates for the project, bearing certification from a person 81
qualified to provide such assessments, such as an architect or 82
engineer. Such estimates may include all the costs listed in 83
division (D)(1)(a) of this section, but shall not include 84
estimates of costs incurred or expected to be incurred before 85
the applicant receives a credit allocation under division (C)(2) 86
of this section. 87
(4) Financial statements with estimates demonstrating the 88
project's financial solvency, which may be demonstrated, in 89
part, by assuming the receipt of a credit allocation under 90
division (C) of this section; 91
(5) Project renderings or images demonstrating the final 92
outcome of the project through a visual depiction thereof. 93
The application shall be accompanied by a five hundred 94
dollar application fee and an ordinance or resolution expressing 95
support for the project adopted by the legislative authority of 96
the municipal corporation or board of trustees of the township 97
in which the proposed project will be located. The application 98
fee shall be credited to the tax incentives operating fund 99
created under section 122.174 of the Revised Code. 100
(C)(1) The director shall evaluate and rank each complete 101
application timely submitted under division (B) of this section 102
based on the following factors: 103
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As Introduced
(a) Project feasibility, such as by demonstrating an 104
amount of financing secured or committed, existing end user 105
agreements, and cost estimates from architects, engineers, and 106
contractors; 107
(b) Economic impact of the project with a preference 108
towards projects in low-income or high-unemployment areas; 109
(c) Social impact the project will have on the surrounding 110
community such as by bringing assets to the community that are 111
otherwise lacking, including critical infrastructure such as 112
health or food access points; 113
(d) Physical scope of the project with a preference for 114
larger projects that will maximize the economic stimulus effect 115
on a community by creating more construction jobs and providing 116
a larger area of physical improvement. Physical scope may 117
include rehabilitated historic buildings, with or without the 118
tax credit authorized by section 149.311 of the Revised Code, 119
and other buildings, building additions, and new construction 120
that is part of the project scope identified in the application. 121
(e) Alignment with state priorities, which may include the 122
creation of low-income and middle-income housing, the purchase 123
and revitalization of existing structures for mixed-use 124
commercial and residential development, and the development of 125
job-creating commercial or industrial facilities. 126
(2) The director shall review applications under division 127
(C)(2) of this section and issue credit allocations for approved 128
projects, in accordance with the director's ranking and subject 129
to the limitations in division (C)(3) of this section, not later 130
than the thirty-first day of December for applications submitted 131
during the first funding period and not later than the thirtieth 132
S. B. No. 3 Page 6
As Introduced
day of June for applications submitted during the second funding 133
period in each fiscal year. If either of those dates fall on a 134
day that is not a business day, then the director must review 135
and rank applications and issue credit allocations not later 136
than the next business day. A project's credit allocation shall 137
equal the lesser of five million dollars or either fifteen per 138
cent of the amount of the applicant's estimated costs reported 139
under division (B)(3) of this section or twenty per cent of such 140
costs if the project is located in an economically disadvantaged 141
community. The director may award a credit allocation for each 142
distinct phase of a larger community revitalization project, and 143
the five-million-dollar limitation described in division (C)(2) 144
of this section applies to each phase of such a project. 145
The director shall notify an applicant, in writing, 146
whether or not the applicant's project has been awarded a credit 147
allocation under division (C)(2) of this section and, if 148
approved, the amount of the allocation and the date by which a 149
project must be completed, which shall be two years after the 150
date the notification is sent. An applicant whose application is 151
denied may file an application under division (B) of this 152
section for a subsequent funding period. 153
(3) The director shall not approve credit allocations in a 154
fiscal year in a total amount that exceeds one hundred million 155
dollars. 156
(D)(1) Subject to division (D)(2) of this section, within 157
fourteen days after completion of a community revitalization 158
project that has received a credit allocation under division (C) 159
of this section, the applicant for that allocation shall submit 160
an application to the director of development for a tax credit 161
certificate authorizing the applicant to claim a credit under 162
S. B. No. 3 Page 7
As Introduced
division (E) or transfer a credit under division (F) of this 163
section. The applicant shall include the following information 164
with this application: 165
(a) An itemized cost breakdown of the project with third- 166
party verification of all costs incurred. Only expenses incurred 167
by the applicant following receipt of the credit allocation 168
shall be included, including those costs for site acquisition; 169
architectural, design, planning, and engineering costs; local, 170
state, and federal tax and legal compliance consulting fees; 171
legal fees associated with project formation; and costs of 172
establishing connections to public utilities and infrastructure. 173
(b) Proof that the project is complete and of the date of 174
its completion, including visual proof of the completed project. 175
The application shall be accompanied by an ordinance or 176
resolution of support for the completed project adopted by the 177
legislative authority of the municipal corporation or board of 178
trustees of the township in which the completed project is 179
located. The ordinance or resolution shall not be the same 180
ordinance or resolution submitted under division (B) of this 181
section. 182
If the director determines that the project that is the 183
subject of the application has been completed, the director 184
shall issue, within sixty days after receipt of a complete 185
application, a tax credit certificate to the applicant that 186
shall include a unique number and list the amount of the tax 187
credit the applicant may claim or transfer, which shall equal 188
the lesser of the amount of the credit allocation or either 189
fifteen per cent or, if the project is located in an 190
economically disadvantaged community, twenty per cent of the 191
amount of costs reported under division (D)(1)(a) of this 192
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As Introduced
section. 193
(2) No tax credit certificate may be issued under division 194
(D)(1) of this section on the basis of a project that is not 195
completed within two years after the applicant is sent notice of 196
a credit allocation under division (C) of this section. 197
(E) There is hereby allowed a nonrefundable credit against 198
a taxpayer's aggregate tax liability under section 5747.02 of 199
the Revised Code for a taxpayer that holds a tax credit 200
certificate issued under division (D) of this section or that 201
has been transferred the right to claim such a credit pursuant 202
to division (F) of this section. The credit shall equal the 203
credit amount authorized on the certificate. The credit shall be 204
claimed for the taxable year in which the certificate is issued 205
and in the order required under section 5747.98 of the Revised 206
Code. Any unused amount may be carried forward for the following 207
five taxable years. 208
If the certificate is issued to a pass-through entity for 209
an investment by the entity, any taxpayer that is a direct or 210
indirect investor in the pass-through entity may claim the 211
taxpayer's proportionate or distributive share of the credit 212
against the taxpayer's aggregate amount of tax levied under 213
section 5747.02 of the Revised Code. A person that is not a 214
taxpayer shall not claim the credit, but if the person is the 215
applicant to which the certificate is issued, the person may 216
transfer the right to claim the credit under division (F) of 217
this section. 218
A taxpayer claiming a credit under this section shall 219
submit a copy of the certificate with the taxpayer's return or 220
report.