As Introduced
135th General Assembly
Regular Session S. B. No. 120
2023-2024
Senator Schuring
A BILL
To amend sections 5709.40, 5709.41, 5709.43, 1
5709.73, 5709.75, 5709.77, 5709.78, and 5709.80 2
of the Revised Code to allow a portion of tax 3
increment financing service payments to be 4
designated for use by land banks. 5
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5709.40, 5709.41, 5709.43, 6
5709.73, 5709.75, 5709.77, 5709.78, and 5709.80 of the Revised 7
Code be amended to read as follows: 8
Sec. 5709.40. (A) As used in this section: 9
(1) "Blighted area" and "impacted city" have the same 10
meanings as in section 1728.01 of the Revised Code. 11
(2) "Business day" means a day of the week excluding 12
Saturday, Sunday, and a legal holiday as defined under section 13
1.14 of the Revised Code. 14
(3) "Housing renovation" means a project carried out for 15
residential purposes. 16
(4) "Improvement" means the increase in the assessed value 17
of any real property that would first appear on the tax list and 18
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As Introduced
duplicate of real and public utility property after the 19
effective date of an ordinance adopted under this section were 20
it not for the exemption granted by that ordinance. 21
(5) "Incentive district" means an area not more than three 22
hundred acres in size enclosed by a continuous boundary in which 23
a project is being, or will be, undertaken and having one or 24
more of the following distress characteristics: 25
(a) At least fifty-one per cent of the residents of the 26
district have incomes of less than eighty per cent of the median 27
income of residents of the political subdivision in which the 28
district is located, as determined in the same manner specified 29
under section 119(b) of the "Housing and Community Development 30
Act of 1974," 88 Stat. 633, 42 U.S.C. 5318, as amended; 31
(b) The average rate of unemployment in the district 32
during the most recent twelve-month period for which data are 33
available is equal to at least one hundred fifty per cent of the 34
average rate of unemployment for this state for the same period. 35
(c) At least twenty per cent of the people residing in the 36
district live at or below the poverty level as defined in the 37
federal Housing and Community Development Act of 1974, 42 U.S.C. 38
5301, as amended, and regulations adopted pursuant to that act. 39
(d) The district is a blighted area. 40
(e) The district is in a situational distress area as 41
designated by the director of development under division (F) of 42
section 122.23 of the Revised Code. 43
(f) As certified by the engineer for the political 44
subdivision, the public infrastructure serving the district is 45
inadequate to meet the development needs of the district as 46
evidenced by a written economic development plan or urban 47
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As Introduced
renewal plan for the district that has been adopted by the 48
legislative authority of the subdivision. 49
(g) The district is comprised entirely of unimproved land 50
that is located in a distressed area as defined in section 51
122.23 of the Revised Code. 52
(6) "Overlay" means an area of not more than three hundred 53
acres that is a square, or that is a rectangle having two longer 54
sides that are not more than twice the length of the two shorter 55
sides, that the legislative authority of a municipal corporation 56
delineates on a map of a proposed incentive district. 57
(7) "Project" means development activities undertaken on 58
one or more parcels, including, but not limited to, 59
construction, expansion, and alteration of buildings or 60
structures, demolition, remediation, and site development, and 61
any building or structure that results from those activities. 62
(8) "Public infrastructure improvement" includes, but is 63
not limited to, public roads and highways; water and sewer 64
lines; the continued maintenance of those public roads and 65
highways and water and sewer lines; environmental remediation; 66
land acquisition, including acquisition in aid of industry, 67
commerce, distribution, or research; demolition, including 68
demolition on private property when determined to be necessary 69
for economic development purposes; stormwater and flood 70
remediation projects, including such projects on private 71
property when determined to be necessary for public health, 72
safety, and welfare; the provision of gas, electric, and 73
communications service facilities, including the provision of 74
gas or electric service facilities owned by nongovernmental 75
entities when such improvements are determined to be necessary 76
for economic development purposes; the enhancement of public 77
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As Introduced
waterways through improvements that allow for greater public 78
access; and off-street parking facilities, including those in 79
which all or a portion of the parking spaces are reserved for 80
specific uses when determined to be necessary for economic 81
development purposes. 82
(9) "Electing subdivision," "land reutilization program," 83
and "county land reutilization corporation" have the same 84
meanings as in section 5722.01 of the Revised Code. 85
(10) "Qualifying nonprofit organization" means a 86
charitable organization that is exempt from federal income 87
taxation under subsection 501(a) of the Internal Revenue Code, 88
as described in subsection 501(c)(3) of the Internal Revenue 89
Code, and whose sole purpose is to acquire and dispose of 90
property to facilitate economic development. 91
(B) The legislative authority of a municipal corporation, 92
by ordinance, may declare improvements to certain parcels of 93
real property located in the municipal corporation to be a 94
public purpose. Improvements with respect to a parcel that is 95
used or to be used for residential purposes may be declared a 96
public purpose under this division only if the parcel is located 97
in a blighted area of an impacted city. For this purpose, 98
"parcel that is used or to be used for residential purposes" 99
means a parcel that, as improved, is used or to be used for 100
purposes that would cause the tax commissioner to classify the 101
parcel as residential property in accordance with rules adopted 102
by the commissioner under section 5713.041 of the Revised Code. 103
Except as otherwise provided under division (D) of this section 104
or section 5709.51 of the Revised Code, not more than seventy- 105
five per cent of an improvement thus declared to be a public 106
purpose may be exempted from real property taxation for a period 107
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of not more than ten years. The ordinance shall specify the 108
percentage of the improvement to be exempted from taxation and 109
the life of the exemption. 110
An ordinance adopted or amended under this division shall 111
designate the specific public infrastructure improvements made, 112
to be made, or in the process of being made by the municipal 113
corporation that directly benefit, or that once made will 114
directly benefit, the parcels for which improvements are 115
declared to be a public purpose. If the municipal corporation is 116
an electing subdivision, if a qualifying nonprofit organization 117
operates exclusively within the municipal corporation, or the 118
municipal corporation has territory in a county that has 119
established a county land reutilization corporation, an 120
ordinance adopted under this division may designate a portion, 121
not to exceed ten per cent, of any service payments required 122
under section 5709.42 of the Revised Code for the use of the 123
applicable land reutilization program, organization, or 124
corporation. The service payments provided for in section 125
5709.42 of the Revised Code shall be used to finance the public 126
infrastructure improvements designated in the ordinance, for the 127
purpose described in division (D)(1) of this section, or as 128
provided in section 5709.43 of the Revised Code. 129
(C)(1) The legislative authority of a municipal 130
corporation may adopt an ordinance creating an incentive 131
district and declaring improvements to parcels within the 132
district to be a public purpose and, except as provided in 133
division (C)(2) of this section, exempt from taxation as 134
provided in this section, but no legislative authority of a 135
municipal corporation that has a population that exceeds twenty- 136
five thousand, as shown by the most recent federal decennial 137
census, shall adopt an ordinance that creates an incentive 138
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As Introduced
district if the sum of the taxable value of real property in the 139
proposed district for the preceding tax year and the taxable 140
value of all real property in the municipal corporation that 141
would have been taxable in the preceding year were it not for 142
the fact that the property was in an existing incentive district 143
and therefore exempt from taxation exceeds twenty-five per cent 144
of the taxable value of real property in the municipal 145
corporation for the preceding tax year. The ordinance shall 146
delineate the boundary of the proposed district and specifically 147
identify each parcel within the district. A proposed district 148
may not include any parcel that is or has been exempted from 149
taxation under division (B) of this section or that is or has 150
been within another district created under this division. An 151
ordinance may create more than one such district, and more than 152
one ordinance may be adopted under division (C)(1) of this 153
section. 154
(2)(a) Not later than thirty days prior to adopting an 155
ordinance under division (C)(1) of this section, if the 156
municipal corporation intends to apply for exemptions from 157
taxation under section 5709.911 of the Revised Code on behalf of 158
owners of real property located within the proposed incentive 159
district, the legislative authority of the municipal corporation 160
shall conduct a public hearing on the proposed ordinance. Not 161
later than thirty days prior to the public hearing, the 162
legislative authority shall give notice of the public hearing 163
and the proposed ordinance by first class mail to every real 164
property owner whose property is located within the boundaries 165
of the proposed incentive district that is the subject of the 166
proposed ordinance. The notice shall include a map of the 167
proposed incentive district on which the legislative authority 168
of the municipal corporation shall have delineated an overlay. 169
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The notice shall inform the property owner of the owner's right 170
to exclude the owner's property from the incentive district if 171
the owner's entire parcel of property will not be located within 172
the overlay, by submitting a written response in accordance with 173
division (C)(2)(b) of this section. The notice also shall 174
include information detailing the required contents of the 175
response, the address to which the response may be mailed, and 176
the deadline for submitting the response. 177
(b) Any owner of real property located within the 178
boundaries of an incentive district proposed under division (C) 179
(1) of this section whose entire parcel of property is not 180
located within the overlay may exclude the property from the 181
proposed incentive district by submitting a written response to 182
the legislative authority of the municipal corporation not later 183
than forty-five days after the postmark date on the notice 184
required under division (C)(2)(a) of this section. The response 185
shall be sent by first class mail or delivered in person at a 186
public hearing held by the legislative authority under division 187
(C)(2)(a) of this section. The response shall conform to any 188
content requirements that may be established by the municipal 189
corporation and included in the notice provided under division 190
(C)(2)(a) of this section. In the response, property owners may 191
identify a parcel by street address, by the manner in which it 192
is identified in the ordinance, or by other means allowing the 193
identity of the parcel to be ascertained. 194
(c) Before adopting an ordinance under division (C)(1) of 195
this section, the legislative authority of a municipal 196
corporation shall amend the ordinance to exclude any parcel 197
located wholly or partly outside the overlay for which a written 198
response has been submitted under division (C)(2)(b) of this 199
section. A municipal corporation shall not apply for exemptions 200
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from taxation under section 5709.911 of the Revised Code for any 201
such parcel, and service payments may not be required from the 202
owner of the parcel. Improvements to a parcel excluded from an 203
incentive district under this division may be exempted from 204
taxation under division (B) of this section pursuant to an 205
ordinance adopted under that division or under any other section 206
of the Revised Code under which the parcel qualifies. 207
(3)(a) An ordinance adopted under division (C)(1) of this 208
section shall specify the life of the incentive district and the 209
percentage of the improvements to be exempted, shall designate 210
the public infrastructure improvements made, to be made, or in 211
the process of being made, that benefit or serve, or, once made, 212
will benefit or serve parcels in the district. The ordinance 213
also shall identify one or more specific projects being, or to 214
be, undertaken in the district that place additional demand on 215
the public infrastructure improvements designated in the 216
ordinance. The project identified may, but need not be, the 217
project under division (C)(3)(b) of this section that places 218
real property in use for commercial or industrial purposes. 219
Except as otherwise permitted under that division, the service 220
payments provided for in section 5709.42 of the Revised Code 221
shall be used to finance the designated public infrastructure