As Passed by the House 1
123rd General Assembly 4
Regular Session Am. Sub. S. B. No. 265 5
1999-2000 6
SENATORS HORN-HAGAN-SPADA-WATTS-ARMBRUSTER-BRADY-LATELL-GARDNER 7
REPRESENTATIVES KREBS-HARTNETT-BENDER-PATTON-AUSTRIA-HOLLISTER- 8
VAN VYVEN-MOTTLEY-WILSON 9
_________________________________________________________________ 11
A B I L L
To amend sections 1724.05, 1724.06, 1726.11, 13
1726.12, 5709.67, and 5709.68 of the Revised Code 14
to modify requirements concerning the Department 15
of Development's annual enterprise zone report, 16
to increase the penalty assessed against 17
municipal corporations and counties that fail to
meet annual enterprise zone agreement reporting 18
requirements from $500 to $1,000, and to transfer 19
the oversight of community improvement 20
corporations and development corporations from
the Director of Development to the Auditor of 21
State.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 23
Section 1. That sections 1724.05, 1724.06, 1726.11, 25
1726.12, 5709.67, and 5709.68 of the Revised Code be amended to 26
read as follows: 27
Sec. 1724.05. Annually, before the thirty-first day of 36
January, each EACH community improvement corporation shall submit 38
a PREPARE AN ANNUAL FINANCIAL report THAT CONFORMS to RULES 40
PRESCRIBED BY THE AUDITOR OF STATE PURSUANT TO SECTION 117.20 OF 41
THE REVISED CODE, THAT IS PREPARED ACCORDING TO GENERALLY 43
ACCEPTED ACCOUNTING PRINCIPLES, AND THAT IS CERTIFIED BY THE
BOARD OF TRUSTEES OF THE CORPORATION OR ITS TREASURER OR OTHER 45
CHIEF FISCAL OFFICER. THE FINANCIAL REPORT SHALL BE FILED WITH 46
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THE AUDITOR OF STATE WITHIN ONE HUNDRED TWENTY DAYS FOLLOWING THE 47
LAST DAY OF THE CORPORATION'S FISCAL YEAR, UNLESS the director of 49
development AUDITOR OF STATE EXTENDS THAT DEADLINE. THE AUDITOR 51
OF STATE MAY ESTABLISH TERMS AND CONDITIONS FOR GRANTING ANY 52
EXTENSION OF THAT DEADLINE. The director, by rule, shall 53
establish guidelines governing the scope and frequency of audits 55
of such corporations. Each
EACH COMMUNITY IMPROVEMENT corporation, when required SHALL 59
SUBMIT TO AUDITS by the director AUDITOR OF STATE, shall submit 60
an audit THE SCOPE AND FREQUENCY OF WHICH SHALL BE IN ACCORDANCE 61
WITH SECTION 117.11 OF THE REVISED CODE AS IF THE CORPORATION 63
WERE A PUBLIC OFFICE SUBJECT TO THAT SECTION. HOWEVER, A 64
COMMUNITY IMPROVEMENT CORPORATION MAY REQUEST IN ACCORDANCE WITH 66
SECTION 115.56 OF THE REVISED CODE, AS IF THE CORPORATION WERE A 68
PUBLIC OFFICE SUBJECT TO THAT SECTION, THE PERFORMANCE OF ANY OF 70
THOSE AUDITS by a AN INDEPENDENT certified public accountant. 72
The director
THE AUDITOR OF STATE is hereby authorized to receive and 75
file THE annual FINANCIAL reports REQUIRED BY THIS SECTION and 76
THE REPORTS OF ALL audits PERFORMED IN ACCORDANCE WITH THIS 77
SECTION. Annual reports shall cover all financial and other 79
transactions of the corporation for the preceding year. Audits 80
shall cover such period of time as the director specifies. The 82
director AUDITOR OF STATE shall analyze the THOSE annual 84
FINANCIAL reports and THE REPORTS OF THOSE audits to determine 85
whether or not the activities of the COMMUNITY IMPROVEMENT 86
corporation INVOLVED are in accordance with Chapter 1724. of the 87
Revised Code THIS CHAPTER. 89
Sec. 1724.06. If any COMMUNITY IMPROVEMENT corporation 98
FAILS TO PREPARE AN ANNUAL FINANCIAL REPORT AS required by 99
SECTION 1724.05 OF THE REVISED CODE AND TO FILE THAT REPORT WITH 101
THE AUDITOR OF STATE WITHIN NINETY DAYS OF THE TIME PRESCRIBED 102
FOR THAT FILING BY THAT section 1724.05 of the Revised Code to 105
submit reports or audits fails or neglects to make the annual 107
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report to the director of development as required by law for 109
ninety days after the time prescribed by law for making such 111
report, or fails to submit the results of an audit within ninety 113
days of the date for submission of the audit as specified by the 115
director, OR IF THE AUDITOR OF STATE DETERMINES BY APPLYING THE 117
STANDARDS APPLICABLE TO A PUBLIC OFFICE UNDER SECTION 117.41 OF 118
THE REVISED CODE THAT ANY COMMUNITY IMPROVEMENT CORPORATION 119
CANNOT BE AUDITED AND DECLARES IT TO BE UNAUDITABLE AND THE 120
CORPORATION FAILS TO THEN PREPARE AN ANNUAL FINANCIAL REPORT AS 121
REQUIRED BY SECTION 1724.05 OF THE REVISED CODE AND TO FILE THAT 122
REPORT WITH THE AUDITOR OF STATE WITHIN NINETY DAYS OF THE TIME 124
THAT THE AUDITOR OF STATE DECLARED THE CORPORATION TO BE 125
UNAUDITABLE, the director AUDITOR OF STATE shall certify such 127
THAT fact to the secretary of state. The secretary of state THEN 128
shall thereupon cancel the articles of the COMMUNITY IMPROVEMENT 129
corporation INVOLVED by filing and recording the certificate of 131
the director AUDITOR OF STATE or a true copy thereof OF IT. 133
Thereupon all ALL of the rights, privileges, and franchises 134
conferred upon such THAT COMMUNITY IMPROVEMENT corporation by 136
such THOSE articles of incorporation THEN shall cease. The 139
secretary of state shall immediately notify the THAT COMMUNITY 140
IMPROVEMENT corporation of the action taken. Reinstatement may 141
be accomplished within two years after such THAT cancellation 142
upon proper filing of all delinquent ANNUAL FINANCIAL reports and 144
audits to the satisfaction of the director AUDITOR OF STATE and 146
THE filing his OF THE AUDITOR OF STATE'S certificate thereof 148
REFLECTING THAT SATISFACTION with the secretary of state, who 149
shall be entitled to a fee of ten dollars for recording the same 151
CERTIFICATE in the corporate records. Such THAT filing may be 152
made by any officer, member, creditor, receiver, lessee, or 153
sublessee of the COMMUNITY IMPROVEMENT corporation INVOLVED, and 154
any such person or his agent OF ANY SUCH PERSON shall be granted 156
access to the books and records of the corporation for such THAT 157
purpose. The rights, privileges, and franchises of a COMMUNITY 158
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IMPROVEMENT corporation whose articles have been reinstated are 160
subject to section 1702.60 of the Revised Code. 161
Sec. 1726.11. Annually before the thirty-first day of 170
January, a EACH DEVELOPMENT corporation incorporated under 172
Chapter 1726. of the Revised Code THIS CHAPTER shall submit a 173
PREPARE AN ANNUAL FINANCIAL report THAT CONFORMS to RULES 175
PRESCRIBED BY THE AUDITOR OF STATE PURSUANT TO SECTION 117.20 OF 176
THE REVISED CODE, THAT IS PREPARED ACCORDING TO GENERALLY 178
ACCEPTED ACCOUNTING PRINCIPLES, AND THAT IS CERTIFIED BY THE
BOARD OF TRUSTEES OF THE CORPORATION OR ITS TREASURER OR OTHER 180
CHIEF FISCAL OFFICER. THE FINANCIAL REPORT SHALL BE FILED WITH 181
THE AUDITOR OF STATE WITHIN ONE HUNDRED TWENTY DAYS FOLLOWING THE 182
LAST DAY OF THE CORPORATION'S FISCAL YEAR, UNLESS the director of 184
development together with an audit by a certified public 185
accountant and the director of development AUDITOR OF STATE 187
EXTENDS THAT DEADLINE. THE AUDITOR OF STATE MAY ESTABLISH TERMS 188
AND CONDITIONS FOR GRANTING ANY EXTENSION OF THAT DEADLINE. 190
EACH DEVELOPMENT CORPORATION SHALL SUBMIT TO AUDITS BY THE 192
AUDITOR OF STATE, THE SCOPE AND FREQUENCY OF WHICH SHALL BE IN 193
ACCORDANCE WITH SECTION 117.11 OF THE REVISED CODE AS IF THE 194
CORPORATION WERE A PUBLIC OFFICE SUBJECT TO THAT SECTION. 196
HOWEVER, A DEVELOPMENT CORPORATION MAY REQUEST IN ACCORDANCE WITH 198
SECTION 115.56 OF THE REVISED CODE, AS IF THE CORPORATION WERE A 200
PUBLIC OFFICE SUBJECT TO THAT SECTION, THE PERFORMANCE OF ANY OF
THOSE AUDITS BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. 202
THE AUDITOR OF STATE is hereby authorized to receive and 206
file the same ANNUAL FINANCIAL REPORTS REQUIRED BY THIS SECTION
AND THE REPORTS OF ALL AUDITS PERFORMED IN ACCORDANCE WITH THIS 207
SECTION. Such reports and audits shall cover all financial and 209
other transactions of said corporation for the preceding year. 211
Said director of development THE AUDITOR OF STATE shall analyze 212
said THOSE ANNUAL FINANCIAL reports and THE REPORTS OF THOSE 213
audits to determine whether or not the activities of such 215
corporations THE DEVELOPMENT CORPORATION INVOLVED are in 216
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accordance with Chapter 1726. of the Revised Code THIS CHAPTER. 218
Sec. 1726.12. If any DEVELOPMENT corporation FAILS TO 227
PREPARE AN ANNUAL FINANCIAL REPORT AS required by SECTION 1726.11 229
OF THE REVISED CODE AND TO FILE THAT REPORT WITH THE AUDITOR OF 230
STATE WITHIN NINETY DAYS OF THE TIME PRESCRIBED FOR THAT FILING 231
BY THAT section 1726.11 of the Revised Code fails or neglects to 233
make the annual report to the director of development as required 236
by law for ninety days after the time prescribed by law for 238
making such report, OR IF THE AUDITOR OF STATE DETERMINES BY 240
APPLYING THE STANDARDS APPLICABLE TO A PUBLIC OFFICE UNDER 241
SECTION 117.41 OF THE REVISED CODE THAT ANY DEVELOPMENT 242
CORPORATION CANNOT BE AUDITED AND DECLARES IT TO BE UNAUDITABLE 243
AND THE CORPORATION FAILS TO THEN PREPARE AN ANNUAL FINANCIAL 244
REPORT AS REQUIRED BY SECTION 1726.11 OF THE REVISED CODE AND TO 245
FILE THAT REPORT WITH THE AUDITOR OF STATE WITHIN NINETY DAYS OF 247
THE TIME THAT THE AUDITOR OF STATE DECLARED THE CORPORATION TO BE 248
UNAUDITABLE, or if any such ANNUAL FINANCIAL report discloses 250
that the ANY DEVELOPMENT corporation has failed to begin business 251
for a period of three years from the effective date of the filing 252
of its articles of incorporation, the director of development 254
AUDITOR OF STATE shall certify such THAT fact to the secretary of 255
state. The secretary of state THEN shall thereupon cancel the 256
articles of the DEVELOPMENT corporation INVOLVED by appropriate 257
entry upon the margin of the record thereof OF THE ARTICLES. 258
Thereupon, all ALL the powers, privileges, and franchises 260
conferred upon such THAT DEVELOPMENT corporation by such THOSE 262
articles of incorporation THEN shall cease. The secretary of 263
state shall immediately notify the THAT DEVELOPMENT corporation 266
of the action taken.
Sec. 5709.67. (A) Except as otherwise provided in 275
sections 5709.61 to 5709.69 of the Revised Code, the director of 276
development shall administer those sections and shall adopt such 277
rules as are necessary to ensure that no zone is certified or 278
remains certified unless it meets any applicable requirements of 279
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division (A) of section 5709.61 of the Revised Code, and to 280
determine the number of positions attributable to an enterprise 281
for the purposes of division (A)(3) of section 5709.64 of the 282
Revised Code. The director shall assign to each zone currently 283
certified a unique designation by which the zone shall be 284
identified for purposes of administering sections 5709.61 to 285
5709.69 of the Revised Code. The tax commissioner shall 286
administer all other tax incentives provided under sections 287
5709.61 to 5709.69 of the Revised Code and shall adopt such rules 288
as are necessary to carry out that duty. No tax incentive 289
qualification certificate or employee tax credit certificate 290
shall be issued or remain in effect unless the enterprise 291
applying for or holding the certificate complies with all such 292
rules. The director of job and family services shall administer 294
the incentive provided under division (B)(1) of section 5709.66 295
of the Revised Code and shall adopt such rules as are necessary 296
to carry out that duty. No extension of benefits certificate 297
shall be issued or remain in effect unless the enterprise 298
applying for or holding the certificate complies with all such 299
rules.
(B) Annually NOT LATER THAN THE FIRST DAY OF AUGUST EACH 301
YEAR, the director of development shall report to the general 303
assembly the ON ALL OF THE FOLLOWING FOR THE PRECEDING CALENDAR 304
YEAR:
(1) THE cost to the state of the tax and other incentives 307
provided under sections 5709.61 to 5709.69 of the Revised Code, 308
the;
(2) THE number of tax incentive qualification 310
certificates, employee tax credit certificates, and extension of 311
benefits certificates issued, the; 312
(3) THE names of the municipal corporations and counties 315
that have entered agreements under sections 5709.62, 5709.63, and 316
5709.632 of the Revised Code, and the; 317
(4) THE number of new employees hired as a result of the 319
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tax and other incentives provided under sections 5709.61 to 320
5709.69 of the Revised Code; 321
(5) INFORMATION ON AGREEMENT TERMS CONCERNING SCHOOL 323
DISTRICT REVENUE THAT ARE NOT PROVIDED FOR IN SECTION 5709.631 OF 324
THE REVISED CODE AND THAT ARE FORWARDED TO THE DIRECTOR UNDER 327
DIVISION (H) OF SECTION 5709.62, DIVISION (H) OF SECTION 5709.63, 328
OR DIVISION (G) OF SECTION 5709.632 OF THE REVISED CODE. The 330
THE report shall include a finding by the director as to 333
whether the incentives provided under sections 5709.61 to 5709.69 334
of the Revised Code have resulted in the creation of more 335
positions in the state than would have been created without the 336
incentives. THE DIRECTOR SHALL SEND A COPY OF THE REPORT TO EACH 337
MEMBER OF THE GENERAL ASSEMBLY AND TO THE DIRECTOR OF THE 338
LEGISLATIVE SERVICE COMMISSION. 339
(C) All forms used in connection with the administration 341
of sections 5709.61 to 5709.69 of the Revised Code, except forms 342
administered directly by the tax commissioner, by the director of 344
job and family services, or by a county or municipal corporation, 346
are subject to review and approval by the state forms management 347
control center under sections 125.91 to 125.98 of the Revised 348
Code.
Sec. 5709.68. (A) On or before the thirty-first day of 357
March each year, a municipal corporation or county that has 358
entered into an agreement with an enterprise under section 359
5709.62, 5709.63, or 5709.632 of the Revised Code shall submit to 360
the director of development and the board of education of each 361
school district of which a municipal corporation or township to 362
which such an agreement applies is a part a report on all such OF 363
THOSE agreements in effect during the preceding calendar year. 365
The report shall include ALL OF the FOLLOWING information 366
described in divisions (A)(1) to (7) of this section.: 368
(1) The designation, assigned by the director of 370
development, of each urban jobs and enterprise zone within the 371
municipal corporation or county, the date each zone was 372
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certified, the name of each municipal corporation or township 373
within each zone, and the total population of each zone according 374
to the most recent data available.; 375
(2) The number of enterprises that are subject to such 377
THOSE agreements and the number of full-time employees subject to 378
those agreements within each zone, each according to the most 379
recent data available and identified and categorized by the 380
appropriate standard industrial code, and the rate of 381
unemployment in the municipal corporation or county in which the 382
zone is located for each year since each zone was certified.; 383
(3) The number of agreements approved and executed during 385
the calendar year for which the report is submitted, the total 386
number of agreements in effect on the thirty-first day of 387
December of the preceding calendar year, the number of agreements 388
that expired during the calendar year for which the report is 389
submitted, and the number of agreements scheduled to expire 390
during the calendar year in which the report is submitted. For 391
each agreement that expired during the calendar year for which 392
the report is submitted, the municipal corporation or county 393
shall include the amount of taxes exempted and the estimated 394
dollar value of any other incentives provided under the 395
agreement. 396
(4) The number of agreements receiving compliance reviews 398
by the tax incentive review council in the municipal corporation 399
or county during the calendar year for which the report is 400
submitted, including all of the following information: 401
(a) The number of agreements the terms of which an 403
enterprise has complied with, indicating separately for each such 404
agreement the value of the real and personal property exempted 405
pursuant to the agreement and a comparison of the stipulated and 406
actual schedules for hiring new employees, for retaining existing 407
employees, for the amount of payroll of the enterprise 408
attributable to these employees, and for investing in 409
establishing, expanding, renovating, or occupying a facility; 410
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(b) The number of agreements the terms of which an 412
enterprise has failed to comply with, indicating separately for 413
each such agreement the value of the real and personal property 414
exempted pursuant to the agreement and a comparison of the 415
stipulated and actual schedules for hiring new employees, for 416
retaining existing employees, for the amount of payroll of the 417
enterprise attributable to these employees, and for investing in 418
establishing, expanding, renovating, or occupying a facility; 419
(c) The number of agreements about which the tax incentive 421
review council made recommendations to the legislative authority 422
of the municipal corporation or county, and the number of such 423
THOSE recommendations that have not been followed; 425
(d) The number of agreements rescinded during the calendar 427
year for which the report is submitted. 428
(5) The number of enterprises that are subject to 430
agreements that expanded within each zone, including the number 431
of new employees hired and existing employees retained by each 432
such enterprise, and the number of new enterprises that are 433
subject to agreements and that established within each zone, 434
including the number of new employees hired by each such 435
enterprise.; 436
(6)(a) The number of enterprises that are subject to 438
agreements and that closed or reduced employment at any place of 439
business within the state for the primary purpose of 440
establishing, expanding, renovating, or occupying a facility, 441
indicating separately for each such enterprise the political 442
subdivision in which the enterprise closed or reduced employment 443
at a place of business and the number of full-time employees 444
transferred and retained by each such place of business.; 445
(b) The number of enterprises that are subject to 447
agreements and that closed or reduced employment at any place of 448
business outside the state for the primary purpose of 449
establishing, expanding, renovating, or occupying a facility. 450
(7) For each agreement in effect during any part of the 452
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preceding year, the number of employees employed by the 453
enterprise at the project site immediately prior to formal 454
approval of the agreement, the number of employees employed by 455
the enterprise at the project site on the thirty-first day of 456
December of the preceding year, the payroll of the enterprise for 457
the preceding year, the amount of taxes paid on tangible personal 458
property situated at the project site and the amount of such 459
THOSE taxes that were not paid because of the exemption granted 461
under the agreement, and the amount of taxes paid on real 462
property constituting the project site and the amount of such 463
THOSE taxes that were not paid because of the exemption granted 465
under the agreement. If an agreement was entered into under 466
section 5709.632 of the Revised Code with an enterprise described 467
in division (B)(2) of that section, the report shall include the 468
number of employee positions at all of the enterprise's locations 469
in this state. If an agreement is conditioned on a waiver issued 470
under division (B) of section 5709.633 of the Revised Code on the 471
basis of the circumstance described in division (B)(3)(a) or (b) 472
of that section, the report shall include the number of employees 473
at the facilities referred to in division (B)(3)(a)(i) or (b)(i) 474
of that section, respectively. 475
(B) Upon the failure of a municipal corporation or county 477
to comply with division (A) of this section: 478
(1) Beginning on the first day of April of the calendar 480
year in which the municipal corporation or county fails to comply 481
with that division, the municipal corporation or county shall not 482
enter into any agreements with an enterprise under section 483
5709.62, 5709.63, or 5709.632 of the Revised Code until the 484
municipal corporation or county has complied with division (A) of 485
this section. 486
(2) On the first day of each ensuing calendar month until 488
the municipal corporation or county complies with that division 489
(A) OF THIS SECTION, the director of development shall either 491
order the proper county auditor to deduct from the next 492
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succeeding payment of taxes to the municipal corporation or 493
county under section 321.31, 321.32, 321.33, or 321.34 of the 494
Revised Code an amount equal to five hundred ONE THOUSAND dollars 495
for each calendar month the municipal corporation or county fails 497
to comply with that division, or order the county auditor to 498
deduct such an THAT amount from the next succeeding payment to 500
the municipal corporation or county from the undivided local
government fund under section 5747.51 of the Revised Code. At 501
the time such a payment is made, the county auditor shall comply 502
with the director's order by issuing a warrant, drawn on the fund 503
from which such THE money would have been paid, to the director 505
of development, who shall deposit the warrant into the state 506
urban jobs and enterprise zone program administration fund 507
created in division (C) of this section. 508
(C) The director, by rule, shall establish the state's 510
application fee for applications submitted to a municipal 511
corporation or county to enter into an agreement under section 512
5709.62, 5709.63, or 5709.632 of the Revised Code. In 513
establishing the amount of the fee, the director shall consider 514
the state's cost of administering the enterprise zone program, 515
including the cost of reviewing the reports required under 516
division (A) of this section. The director may change the amount 517
of the fee at such THE times and in such THE increments as he 519
deems THE DIRECTOR CONSIDERS necessary. Any municipal 520
corporation or county that receives an application shall collect 521
the application fee and remit the fee for deposit in the state 522
treasury to the credit of the state enterprise zone program 523
administration fund, which is hereby created. Money credited to 524
the fund shall be used by the department of development to pay 525
the costs of administering the enterprise zone program, including 526
the cost of reviewing the reports required under division (A) of 527
this section.
(D) On or before the thirtieth day of June each year, the 529
director of development shall certify to the tax commissioner the 530
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information described under division (A)(7) of this section, 531
derived from the reports submitted to the director under this 532
section. 533
On the basis of the information certified under this 535
division, the tax commissioner annually shall submit a report to 536
the governor, the speaker of the house of representatives, the 537
president of the senate, and the chairpersons of the ways and 538
means committees of the respective houses of the general 539
assembly, indicating for each enterprise zone the amount of state 540
and local taxes that were not required to be paid because of 541
exemptions granted under agreements entered into under section 542
5709.62, 5709.63, or 5709.632 of the Revised Code and the amount 543
of additional taxes paid from the payroll of new employees. 544
Section 2. That existing sections 1724.05, 1724.06, 546
1726.11, 1726.12, 5709.67, and 5709.68 of the Revised Code are 547
hereby repealed. 548