As Passed by the Senate 1
123rd General Assembly 4
Regular Session Sub. S. B. No. 265 5
1999-2000 6
SENATORS HORN-HAGAN-SPADA-WATTS-ARMBRUSTER-BRADY-LATELL-GARDNER 8
_________________________________________________________________ 10
A B I L L
To amend sections 1724.05, 1724.06, 1726.11, 12
1726.12, 5709.67, and 5709.68 of the Revised Code 13
to modify requirements concerning the Department 14
of Development's annual enterprise zone report, 15
to increase the penalty assessed against 16
municipal corporations and counties that fail to
meet annual enterprise zone agreement reporting 17
requirements from $500 to $5,000, and to transfer 18
the oversight of community improvement 19
corporations and development corporations from
the Director of Development to the Auditor of 20
State.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 22
Section 1. That sections 1724.05, 1724.06, 1726.11, 24
1726.12, 5709.67, and 5709.68 of the Revised Code be amended to 25
read as follows: 26
Sec. 1724.05. Annually, before the thirty-first day of 35
January, each community improvement corporation shall submit a 36
report to the director of development AUDITOR OF STATE. The 37
director AUDITOR OF STATE ALSO, by rule, shall establish 39
guidelines governing the scope and frequency of audits of such 40
THOSE corporations. Each corporation, when required by the 42
director AUDITOR OF STATE, shall submit TO THE AUDITOR OF STATE A 43
REPORT OF an audit by a certified public accountant. The 44
director AUDITOR OF STATE is hereby authorized to receive and 45
file THOSE annual reports and REPORTS OF THOSE audits. Annual 46
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reports shall cover all financial and other transactions of the 48
corporation for the preceding year. Audits AND REPORTS OF THOSE 49
AUDITS shall cover such THE period of time as THAT the director 51
AUDITOR OF STATE specifies. The director AUDITOR OF STATE shall 52
analyze the annual reports and THE REPORTS OF THOSE audits to 53
determine whether or not the activities of the corporation are in 55
accordance with Chapter 1724. of the Revised Code THIS CHAPTER. 56
Sec. 1724.06. If any corporation required by section 65
1724.05 of the Revised Code to submit ANNUAL reports or REPORTS 66
OF audits TO THE AUDITOR OF STATE fails or neglects to make the 68
AN annual report to the director of development as required by 70
law AUDITOR OF STATE for ninety days after the time prescribed by 71
law for making such THAT report, or fails to submit the results 73
REPORT of an audit within ninety days of the date for ITS 74
submission of the audit as specified by the director AUDITOR OF 76
STATE, the director AUDITOR OF STATE shall certify such THAT fact 78
to the secretary of state. The secretary of state THEN shall
thereupon cancel the articles of the corporation by filing and 79
recording the certificate of the director AUDITOR OF STATE or a 80
true copy thereof OF IT. Thereupon all ALL of the rights, 83
privileges, and franchises conferred upon such THE corporation by 85
such THOSE articles of incorporation THEN shall cease. The 87
secretary of state shall immediately notify the corporation of 88
the action taken. Reinstatement may be accomplished within two 89
years after such THAT cancellation upon proper filing of all 91
delinquent ANNUAL reports and REPORTS OF audits to the
satisfaction of the director AUDITOR OF STATE and THE filing his 93
OF THE AUDITOR OF STATE'S certificate thereof REFLECTING THAT 95
SATISFACTION with the secretary of state, who shall be entitled 96
to a fee of ten dollars for recording the same CERTIFICATE in the 98
corporate records. Such THAT filing may be made by any officer, 100
member, creditor, receiver, lessee, or sublessee of the
corporation, and any such person or his agent OF ANY SUCH PERSON 101
shall be granted access to the books and records of the 102
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corporation for such THAT purpose. The rights, privileges, and 104
franchises of a corporation whose articles have been reinstated 105
are subject to section 1702.60 of the Revised Code. 106
Sec. 1726.11. Annually before the thirty-first day of 115
January, a corporation incorporated under Chapter 1726. of the 116
Revised Code THIS CHAPTER shall submit a report to the director 118
of development AUDITOR OF STATE, together with A REPORT OF an 119
audit by a certified public accountant and the director of 120
development. THE AUDITOR OF STATE is hereby authorized to 121
receive and file the same THAT ANNUAL REPORT AND AUDIT REPORT. 122
Such THOSE reports and audits shall cover all financial and other 125
transactions of said THE corporation for the preceding year. 126
Said director of development THE AUDITOR OF STATE shall analyze 127
said THOSE reports and audits to determine whether or not the 129
activities of such corporations THE CORPORATION are in accordance 130
with Chapter 1726. of the Revised Code THIS CHAPTER. 131
Sec. 1726.12. If any corporation required by section 140
1726.11 of the Revised Code TO SUBMIT AN ANNUAL REPORT TOGETHER 141
WITH A REPORT OF AN AUDIT TO THE AUDITOR OF STATE fails or 142
neglects to make SUBMIT the annual report OR THE REPORT OF THE 143
AUDIT to the director of development as required by law AUDITOR 145
OF STATE for ninety days after the time prescribed by law for 147
making such report THEIR SUBMISSION, or if any such report 148
discloses that the corporation has failed to begin business for a 149
period of three years from the effective date of the filing of 150
its articles of incorporation, the director of development 152
AUDITOR OF STATE shall certify such THAT fact to the secretary of 153
state. The secretary of state THEN shall thereupon cancel the 154
articles of the corporation by appropriate entry upon the margin 156
of the record thereof OF THE ARTICLES. Thereupon, all ALL the 157
powers, privileges, and franchises conferred upon such THE 158
corporation by such THOSE articles of incorporation THEN shall 160
cease. The secretary of state shall immediately notify the 162
corporation of the action taken. 163
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Sec. 5709.67. (A) Except as otherwise provided in 172
sections 5709.61 to 5709.69 of the Revised Code, the director of 173
development shall administer those sections and shall adopt such 174
rules as are necessary to ensure that no zone is certified or 175
remains certified unless it meets any applicable requirements of 176
division (A) of section 5709.61 of the Revised Code, and to 177
determine the number of positions attributable to an enterprise 178
for the purposes of division (A)(3) of section 5709.64 of the 179
Revised Code. The director shall assign to each zone currently 180
certified a unique designation by which the zone shall be 181
identified for purposes of administering sections 5709.61 to 182
5709.69 of the Revised Code. The tax commissioner shall 183
administer all other tax incentives provided under sections 184
5709.61 to 5709.69 of the Revised Code and shall adopt such rules 185
as are necessary to carry out that duty. No tax incentive 186
qualification certificate or employee tax credit certificate 187
shall be issued or remain in effect unless the enterprise 188
applying for or holding the certificate complies with all such 189
rules. The director of job and family services shall administer 191
the incentive provided under division (B)(1) of section 5709.66 192
of the Revised Code and shall adopt such rules as are necessary 193
to carry out that duty. No extension of benefits certificate 194
shall be issued or remain in effect unless the enterprise 195
applying for or holding the certificate complies with all such 196
rules.
(B) Annually NOT LATER THAN THE FIRST DAY OF AUGUST EACH 198
YEAR, the director of development shall report to the general 200
assembly the ON ALL OF THE FOLLOWING FOR THE PRECEDING CALENDAR 201
YEAR:
(1) THE cost to the state of the tax and other incentives 204
provided under sections 5709.61 to 5709.69 of the Revised Code, 205
the;
(2) THE number of tax incentive qualification 207
certificates, employee tax credit certificates, and extension of 208
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benefits certificates issued, the; 209
(3) THE names of the municipal corporations and counties 212
that have entered agreements under sections 5709.62, 5709.63, and 213
5709.632 of the Revised Code, and the; 214
(4) THE number of new employees hired as a result of the 216
tax and other incentives provided under sections 5709.61 to 217
5709.69 of the Revised Code; 218
(5) INFORMATION ON AGREEMENT TERMS CONCERNING SCHOOL 220
DISTRICT REVENUE THAT ARE NOT PROVIDED FOR IN SECTION 5709.631 OF 221
THE REVISED CODE AND THAT ARE FORWARDED TO THE DIRECTOR UNDER 224
DIVISION (H) OF SECTION 5709.62, DIVISION (H) OF SECTION 5709.63, 225
OR DIVISION (G) OF SECTION 5709.632 OF THE REVISED CODE. The 227
THE report shall include a finding by the director as to 230
whether the incentives provided under sections 5709.61 to 5709.69 231
of the Revised Code have resulted in the creation of more 232
positions in the state than would have been created without the 233
incentives. THE DIRECTOR SHALL SEND A COPY OF THE REPORT TO EACH 234
MEMBER OF THE GENERAL ASSEMBLY AND TO THE DIRECTOR OF THE 235
LEGISLATIVE SERVICE COMMISSION. 236
(C) All forms used in connection with the administration 238
of sections 5709.61 to 5709.69 of the Revised Code, except forms 239
administered directly by the tax commissioner, by the director of 241
job and family services, or by a county or municipal corporation, 243
are subject to review and approval by the state forms management 244
control center under sections 125.91 to 125.98 of the Revised 245
Code.
Sec. 5709.68. (A) On or before the thirty-first day of 254
March each year, a municipal corporation or county that has 255
entered into an agreement with an enterprise under section 256
5709.62, 5709.63, or 5709.632 of the Revised Code shall submit to 257
the director of development and the board of education of each 258
school district of which a municipal corporation or township to 259
which such an agreement applies is a part a report on all such OF 260
THOSE agreements in effect during the preceding calendar year. 262
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The report shall include ALL OF the FOLLOWING information 263
described in divisions (A)(1) to (7) of this section.: 265
(1) The designation, assigned by the director of 267
development, of each urban jobs and enterprise zone within the 268
municipal corporation or county, the date each zone was 269
certified, the name of each municipal corporation or township 270
within each zone, and the total population of each zone according 271
to the most recent data available.; 272
(2) The number of enterprises that are subject to such 274
THOSE agreements and the number of full-time employees subject to 275
those agreements within each zone, each according to the most 276
recent data available and identified and categorized by the 277
appropriate standard industrial code, and the rate of 278
unemployment in the municipal corporation or county in which the 279
zone is located for each year since each zone was certified.; 280
(3) The number of agreements approved and executed during 282
the calendar year for which the report is submitted, the total 283
number of agreements in effect on the thirty-first day of 284
December of the preceding calendar year, the number of agreements 285
that expired during the calendar year for which the report is 286
submitted, and the number of agreements scheduled to expire 287
during the calendar year in which the report is submitted. For 288
each agreement that expired during the calendar year for which 289
the report is submitted, the municipal corporation or county 290
shall include the amount of taxes exempted and the estimated 291
dollar value of any other incentives provided under the 292
agreement. 293
(4) The number of agreements receiving compliance reviews 295
by the tax incentive review council in the municipal corporation 296
or county during the calendar year for which the report is 297
submitted, including all of the following information: 298
(a) The number of agreements the terms of which an 300
enterprise has complied with, indicating separately for each such 301
agreement the value of the real and personal property exempted 302
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pursuant to the agreement and a comparison of the stipulated and 303
actual schedules for hiring new employees, for retaining existing 304
employees, for the amount of payroll of the enterprise 305
attributable to these employees, and for investing in 306
establishing, expanding, renovating, or occupying a facility; 307
(b) The number of agreements the terms of which an 309
enterprise has failed to comply with, indicating separately for 310
each such agreement the value of the real and personal property 311
exempted pursuant to the agreement and a comparison of the 312
stipulated and actual schedules for hiring new employees, for 313
retaining existing employees, for the amount of payroll of the 314
enterprise attributable to these employees, and for investing in 315
establishing, expanding, renovating, or occupying a facility; 316
(c) The number of agreements about which the tax incentive 318
review council made recommendations to the legislative authority 319
of the municipal corporation or county, and the number of such 320
THOSE recommendations that have not been followed; 322
(d) The number of agreements rescinded during the calendar 324
year for which the report is submitted. 325
(5) The number of enterprises that are subject to 327
agreements that expanded within each zone, including the number 328
of new employees hired and existing employees retained by each 329
such enterprise, and the number of new enterprises that are 330
subject to agreements and that established within each zone, 331
including the number of new employees hired by each such 332
enterprise.; 333
(6)(a) The number of enterprises that are subject to 335
agreements and that closed or reduced employment at any place of 336
business within the state for the primary purpose of 337
establishing, expanding, renovating, or occupying a facility, 338
indicating separately for each such enterprise the political 339
subdivision in which the enterprise closed or reduced employment 340
at a place of business and the number of full-time employees 341
transferred and retained by each such place of business.; 342
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(b) The number of enterprises that are subject to 344
agreements and that closed or reduced employment at any place of 345
business outside the state for the primary purpose of 346
establishing, expanding, renovating, or occupying a facility. 347
(7) For each agreement in effect during any part of the 349
preceding year, the number of employees employed by the 350
enterprise at the project site immediately prior to formal 351
approval of the agreement, the number of employees employed by 352
the enterprise at the project site on the thirty-first day of 353
December of the preceding year, the payroll of the enterprise for 354
the preceding year, the amount of taxes paid on tangible personal 355
property situated at the project site and the amount of such 356
THOSE taxes that were not paid because of the exemption granted 358
under the agreement, and the amount of taxes paid on real 359
property constituting the project site and the amount of such 360
THOSE taxes that were not paid because of the exemption granted 362
under the agreement. If an agreement was entered into under 363
section 5709.632 of the Revised Code with an enterprise described 364
in division (B)(2) of that section, the report shall include the 365
number of employee positions at all of the enterprise's locations 366
in this state. If an agreement is conditioned on a waiver issued 367
under division (B) of section 5709.633 of the Revised Code on the 368
basis of the circumstance described in division (B)(3)(a) or (b) 369
of that section, the report shall include the number of employees 370
at the facilities referred to in division (B)(3)(a)(i) or (b)(i) 371
of that section, respectively. 372
(B) Upon the failure of a municipal corporation or county 374
to comply with division (A) of this section: 375
(1) Beginning on the first day of April of the calendar 377
year in which the municipal corporation or county fails to comply 378
with that division, the municipal corporation or county shall not 379
enter into any agreements with an enterprise under section 380
5709.62, 5709.63, or 5709.632 of the Revised Code until the 381
municipal corporation or county has complied with division (A) of 382
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this section. 383
(2) On the first day of each ensuing calendar month until 385
the municipal corporation or county complies with that division 386
(A) OF THIS SECTION, the director of development shall either 388
order the proper county auditor to deduct from the next 389
succeeding payment of taxes to the municipal corporation or 390
county under section 321.31, 321.32, 321.33, or 321.34 of the 391
Revised Code an amount equal to five hundred THOUSAND dollars for 392
each calendar month the municipal corporation or county fails to 394
comply with that division, or order the county auditor to deduct 395
such an THAT amount from the next succeeding payment to the 397
municipal corporation or county from the undivided local
government fund under section 5747.51 of the Revised Code. At 398
the time such a payment is made, the county auditor shall comply 399
with the director's order by issuing a warrant, drawn on the fund 400
from which such THE money would have been paid, to the director 402
of development, who shall deposit the warrant into the state 403
urban jobs and enterprise zone program administration fund 404
created in division (C) of this section. 405
(C) The director, by rule, shall establish the state's 407
application fee for applications submitted to a municipal 408
corporation or county to enter into an agreement under section 409
5709.62, 5709.63, or 5709.632 of the Revised Code. In 410
establishing the amount of the fee, the director shall consider 411
the state's cost of administering the enterprise zone program, 412
including the cost of reviewing the reports required under 413
division (A) of this section. The director may change the amount 414
of the fee at such THE times and in such THE increments as he 416
deems THE DIRECTOR CONSIDERS necessary. Any municipal 417
corporation or county that receives an application shall collect 418
the application fee and remit the fee for deposit in the state 419
treasury to the credit of the state enterprise zone program 420
administration fund, which is hereby created. Money credited to 421
the fund shall be used by the department of development to pay 422
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the costs of administering the enterprise zone program, including 423
the cost of reviewing the reports required under division (A) of 424
this section.
(D) On or before the thirtieth day of June each year, the 426
director of development shall certify to the tax commissioner the 427
information described under division (A)(7) of this section, 428
derived from the reports submitted to the director under this 429
section. 430
On the basis of the information certified under this 432
division, the tax commissioner annually shall submit a report to 433
the governor, the speaker of the house of representatives, the 434
president of the senate, and the chairpersons of the ways and 435
means committees of the respective houses of the general 436
assembly, indicating for each enterprise zone the amount of state 437
and local taxes that were not required to be paid because of 438
exemptions granted under agreements entered into under section 439
5709.62, 5709.63, or 5709.632 of the Revised Code and the amount 440
of additional taxes paid from the payroll of new employees. 441
Section 2. That existing sections 1724.05, 1724.06, 443
1726.11, 1726.12, 5709.67, and 5709.68 of the Revised Code are 444
hereby repealed. 445