Legislation. . .In The News

By Pamela Hanover, Esq.

September 29, 2016

The following is a summary of recent General Assembly activity relating to economic development matters through August 31, 2016.

LEGISLATION RECENTLY ENACTED

            House Bill 233 (effective August 5, 2016.)  This Bill authorizes municipal corporations to utilize a new tax increment financing program in a downtown redevelopment district or innovation district for the purpose of rehabilitating historic buildings and promoting economic development.  The exemption may be for up to 70% for up to 10 years, or 30 years with school approval or if the school district is made fully whole.  The district may be enclosed by a continuous boundary consisting of no more than 10 acres and must contain at least one historic building to be rehabilitated.  These districts may not be created in areas used exclusively for residential purposes or used for development of residential areas.  The payments in lieu of taxes (PILOTs) may be used for public infrastructure improvements within the district, for loans or grants to owners of historic buildings for rehabilitation of historic buildings in the district, or to make loans to owners of non-historic buildings in the district for repairs and improvements to the buildings.  A portion may also be used to make contributions to special improvement districts or community improvement districts to promote or enhance the district.

            If the proposed district includes an area equipped with a high speed broadband network, the municipal corporation may designate an “innovation district” within the district to attract technology oriented businesses.  In that event, PILOTs may be used to make grants or loans to technology-oriented businesses, including incubators and accelorators, to start or develop a qualified business.

            The tax levies that are not included in a TIF exemption for incentive districts would be excluded from these districts as well.  Also, a county is entitled to receive 50% of the inside millage it would have received unless it otherwise agrees.  Owners of property in a district may agree to impose a redevelopment charge on the property in addition to the PILOTs.

LEGISLATION PASSED BY HOUSE AND SENATE

            House Bill 182 (Governor signed June 13, 2016; effective September 13, 2016.)  This Bill revises the laws relating to Revised Code Section 715.72 JEDDs, including by permitting the residential portion of mixed-use developments to be included in a JEDD with residents being subject to the JEDD tax, by requiring JEDD contracts to include an economic development plan and by allowing property owners to file a complaint in Common Pleas Court to opt-out of the JEDD under certain circumstances, including if it can prove that implementation of the economic development plan does not materially benefit it or its employees.

The Bill also amends the enterprise zone program by making retail facilities eligible under the program if approved by the overlapping school district.

            House Bill 413 (Governor signed June 28, 2016; effective September 28, 2016).  This Bill makes many changes to township laws, but also includes an amendment to the tax increment financing program definition of “public infrastructure improvement” for municipal corporations, counties and townships to include continued maintenance of public roads and water and sewer lines.

LEGISLATION PASSED BY HOUSE

            House Bill 12 (Introduced January 28, 2015; passed House on May 25, 2016, as amended.)  This Bill provides a procedure for property owners to opt out of county, municipal corporation or township incentive district tax increment financing programs under certain conditions if the owner’s entire parcel is not in the incentive district “overlay” that must be either a square or certain rectangular shape.

            House Bill 134 (Introduced March 25, 2015; passed House November 17, 2015; third hearing in Senate Government Oversight and Reform Committee and Bill amended on May 25, 2016.  A substitute Bill was accepted on May 24, 2016 that incorporated much of House Bill 463.)  This Bill provides for expedited foreclosure proceedings for certain unoccupied residential properties and makes other changes to the residential foreclosure process.

            House Bill 415 (Introduced December 14, 2015; passed House on February 24, 2016; first hearing Senate Ways and Means Committee on May 25, 2016.)  This Bill establishes a new State linked deposit program with credit unions for loans to eligible small businesses.

             House Bill 463 (Introduced February 16, 2016; passed House on May 11, 2016; referred to Senate Civil Justice Committee.)  This Bill changes the State foreclosure process, among other things, by establishing expedited actions to foreclose mortgages on vacant and abandoned residential properties.  See House Bill 134.

LEGISLATION INTRODUCED IN THE HOUSE

            House Bill 13 (Introduced January 28, 2015; first hearing in House Ways and Means Committee on March 17, 2015.)  This Bill would add police and fire levies to the list of levies that are subject to reimbursement in county, municipal corporation or township incentive district tax increment financing programs.

            House Bill 72 (Introduced February 18, 2015, Amended Bill submitted May 6, 2015; fourth hearing in House Public Utilities Committee on May 6, 2015.)  This Bill amends the existing energy special improvement district (ESID) program to enhance the ability of a port authority to facilitate that program.

             House Bill 128 (Introduced March 19, 2015; third hearing in House Ways and Means Committee on June 16, 2015.)  This Bill authorizes an income tax credit for certain donations to a permanent endowment fund of an eligible community foundation.

            House Bill 282 (Introduced July 7, 2015; assigned to House Commerce and Labor Committee.)  This Bill repeals prevailing wage laws.

            House Bill 475 (Introduced February 23, 2016; amended Bill reported out of House Finance Committee on May 24, 2016.)  This Bill makes certain amendments to the motion picture tax credit program.

            House Bill 482 (Introduced March 3, 2016; first hearing in House Ways and Means Committee on May 17, 2016.)  This Bill clarifies the calculation of the exempted value of property remodeled under the CRA program and improved under the brownfield remediation (VAP) program.  This Bill further authorizes a filing of a complaint with the county auditor to challenge the assessed value of exempt property.

            House Bill 506 (Introduced April 4, 2016; referred to House Government Accountability and Oversight Committee.)  This Bill requires all nonprofit economic development corporations that receive or distribute public funds to make annual disclosures related to the receipt and distribution of both their public and private funds.  It further permits the State Auditor to audit JobsOhio and requires JobsOhio to submit quarterly progress reports detailing its active projects.

LEGISLATION INTRODUCED IN THE SENATE

            Senate Bill 40 (Introduced February 10, 2015; first hearing in Senate Ways and Means Committee on June 10, 2015.)  This Bill authorizes tax credits for contributions made to a local government, a CIC designated as an agent, or a 501(c)(3) corporation for a “catalytic project.”

            Senate Bill 41 (Introduced February 10, 2015; first hearing in Senate Ways and Means Committee on June 3, 2015.)  This Bill modifies the necessary requirements and the credit schedule for the State’s new markets tax credit program.

            Senate Bill 109 (Introduced March 3, 2015; assigned to State and Local Government Committee.)  This Bill authorizes townships to levy impact fees on new development to finance capital improvements required by the development.

             Senate Bill 134 (Introduced March 24, 2015; third hearing in Senate Civil Justice Committee on October 7, 2015; substitute bill was accepted that increased civil penalties.)  This Bill exempts certain landlords and home sellers from the housing discrimination provisions of the Civil Rights Law if the landlord lives in the residence, makes certain procedural changes for filing housing discrimination complaints and revises damage recoveries in housing discrimination cases.

            Senate Bill 185 (Introduced June 16, 2015; amended Bill reported out of Senate Energy and Natural Resources Committee on May 25, 2016.)  This Bill modifies the laws governing special improvement districts created for the development of special energy improvement projects (“ESIDs”).

             Senate Bill 198 (Introduced July 20, 2015; first hearing in Senate State and Local Government Committee on September 29, 2015.)  This Bill would prohibit a municipal corporation from levying income taxes on the compensation of nonresidents except for net profits derived from a business other than a sole proprietorship.

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