SENATORS Schuring, Schuler, Fedor, Dann

To amend sections 165.02, 166.06, 166.07, 166.21,

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3735.68, and 5709.831 and to enact sections 9.661

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and 5709.634 of the Revised Code to create

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statutory liens to secure the performance of

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obligations by recipients of development loans and

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local property tax incentives.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 165.02, 166.06, 166.07, 166.21,	7
3735.68, and 5709.831 be amended and sections 9.661 and 5709.634	8
of the Revised Code be enacted to read as follows:	9

Sec. 9.661.  (A) As used in this section:

10

(1) "Borrower" means any person obligated to repay a	11
development loan pursuant to a development loan agreement or	12
obligated to repay a loan guaranteed pursuant to a loan guarantee	13
agreement.	14

(2) "Development inducement agreement" means an agreement	15
making a grant or inducement under the authority of Section 13 of	16
Article VIII, Ohio Constitution, including an inducement made	17
under section 166.02 of the Revised Code or a grant made under	18
section 184.02 of the Revised Code.	19

(3) "Development loan" means any loan made under the	20
authority of Section 13 of Article VIII, Ohio Constitution,	21
including loans made under the authority of Chapter 122., 165.,	22
166., 184., or 1724. of the Revised Code.	23

(4) "Development loan agreement" means an agreement making a	24
development loan.	25

(5) "Grantee" means any grantee or other recipient of	26
anything of value under a development inducement agreement.	27

(6) "Guaranteed loan" means a loan guaranteed by this state,	28
a state agency, or a political subdivision under the authority of	29
Section 13 of Article VIII, Ohio Constitution, including any loan	30
guarantee authorized under Chapter 166. of the Revised Code.	31

(7) "Loan guarantee agreement" means an agreement providing	32
for the guarantee of a guaranteed loan.	33

(8) "Secured party" means the state, a state agency, or a	34
political subdivision that enters into a development loan	35
agreement, loan guarantee agreement, or development inducement	36
agreement.	37

(B)(1) The obligations of a borrower under each development	38
loan agreement or loan guarantee agreement is secured by a lien of	39
the secured party on the borrower's real property and personal	40
property the acquisition of which was funded in whole or in part	41
by the proceeds of the loan and on any of the borrower's other	42
real or personal property in this state. The lien is for the	43
amount financed under the development loan agreement or for the	44
amount guaranteed under the loan guarantee agreement. The lien	45
attaches when any portion of the loan proceeds is transferred to	46
the borrower, and the lien is perfected when so attached. The lien	47
has priority over all other liens regardless of when acquired,	48
including the interests of transferees of the property that are	49
acquired after the lien attaches, but excluding claims of the	50
United States government having higher priority under federal law.	51
The lien is in addition to any other security required by the	52
development loan agreement or loan guarantee agreement.	53

(2) The obligations of a grantee under each development	54
inducement agreement is secured by a lien of the secured party on	55
the grantee's real property and personal property the acquisition	56
of which was funded in whole or in part by the grant or other	57
thing of value and on any other of the grantee's real or personal	58
property in this state. The lien is for the amount of the grant or	59
other thing of value granted to the grantee under the agreement.	60
The lien attaches when any portion of the grant or other thing of	61
value is transferred to the grantee, and the lien is perfected	62
when so attached. The lien has priority over all other liens	63
regardless of when acquired, including the interests of	64
transferees of the property that are acquired after the lien	65
attaches, but excluding claims of the United States government	66
having higher priority under federal law. The lien is in addition	67
to any other security required by the development inducement	68
agreement.	69

(3) A secured party shall enforce such liens against real	70
property by civil action in the court of common pleas of the	71
county where the real property is located in the same manner as	72
mortgage liens are enforced. A secured party shall enforce such	73
liens against personal property in the manner provided for the	74
enforcement of security interests under Chapter 1309. of the	75
Revised Code, except to the extent the provisions of that chapter	76
regarding priority, attachment, and perfection are inconsistent	77
with this section.	78

(C) Each development loan agreement and loan guarantee	79
agreement shall prohibit the borrower from selling or otherwise	80
transferring to another person real property or personal property,	81
the acquisition of which by the borrower was funded in whole or in	82
part by the development loan, before the borrower has fulfilled	83
the borrower's obligations under the agreement. Each development	84
inducement agreement shall prohibit the grantee from selling or	85
otherwise transferring to another person real property or personal	86
property, the acquisition of which by the borrower was funded in	87
whole or in part by the grant or other thing of value granted	88
under the development inducement agreement, before the grantee has	89
fulfilled the grantee's obligations under the agreement.	90

Sec. 165.02.  Section 13 of Article VIII, Ohio Constitution,	91
is in part implemented by this chapter in furtherance of the	92
public purposes of the state to create or preserve jobs and	93
employment opportunities and to improve the economic welfare of	94
the people of the state. An issuer acting through its issuing	95
authority may in accordance with Section 13 of Article VIII, Ohio	96
Constitution:	97

(A) Acquire by gift or purchase and hold and mortgage real	98
estate and interests therein and personal property to be used as a	99
project or a part thereof;	100

(B) Purchase, construct, reconstruct, enlarge, improve,	101
furnish, and equip and lease, sell, exchange, and otherwise	102
dispose of projects or parts thereof for those of the purposes set	103
forth in Section 13 of Article VIII, Ohio Constitution, that are	104
specified in the first sentence of this section, including,	105
without limitation thereto, the sale of projects by conditional or	106
installment sale, under which title may pass prior to or after	107
completion of construction of a project or payment or provision	108
for payment of all principal of, premium, if any, and interest on	109
the bonds, or at any other time provided in the agreement	110
pertaining to such sale, and including sale under an option to	111
purchase upon agreed terms which may include a price which may be	112
a nominal amount or less than true value at the time of purchase;	113

(C) Issue its bonds to provide funds, by loans or otherwise,	114
for acquiring, constructing, reconstructing, enlarging, improving,	115
furnishing, or equipping one or more projects or parts thereof;	116

(D) Make loans for the acquisition, construction,	117
reconstruction, enlargement, improvement, furnishing, or equipping	118
of projects or parts thereof upon such terms as the issuing	119
authority may determine or authorize, includingbut secured or	120
unsecured loansby the lien imposed under section 9.661 of the	121
Revised Code, and, in connection therewith, enter into loan	122
agreements and other agreements, accept notes or other forms of	123
obligation to evidence such indebtedness and security interests to	124
secure such indebtedness, and take such action as may be	125
considered by it appropriate to protect such security and	126
safeguard against losses, including, without limitation thereto,	127
foreclosure and the bidding upon and purchase of property upon	128
foreclosure or other sale;	129

(E) Enter into contracts and execute all instruments	130
necessary or appropriate to carry out the purposes of Chapter 165.	131
of the Revised Code;	132

(F) Fix, alter, and collect rentals and other charges for the	133
use and occupancy of a project and lease the project to others,	134
including a contract with, or the granting of an option to the	135
lessee to purchase the project for such price as the issuing	136
authority in its sole discretion determines to be appropriate,	137
after retirement or redemption, or provision therefor, of all the	138
bonds of the issuer issued to provide funds for the project;	139

(G) Retain, contract with, or employ and fix the compensation	140
of financial consultants, appraisers, accounting experts,	141
architects, engineers, attorneys at law, and other employees,	142
agents, and independent contractors as are necessary in the	143
judgment of the issuing authority to carry out the provisions of	144
Chapter 165. of the Revised Code;	145

(H) Pledge, assign, hypothecate, or otherwise encumber as	146
security for the bonds, the rentals, revenues, and other income,	147
charges, and moneys realized from the use, lease, sale, or other	148
disposition of one or more projects or parts thereof as may be	149
designated in the bond proceedings and enter into trust agreements	150
or indentures of mortgage for the benefit of bondholders;	151

(I) Enter into appropriate arrangements with any federal or	152
state department or agency, county, township, municipal	153
corporation, or other political subdivision, taxing district, or	154
public body or agency for the planning and installation of	155
streets, roads, alleys, water supply and distribution facilities,	156
storm and sanitary sewage collection and disposal facilities, and	157
other necessary appurtenances to a project;	158

(J) Purchase fire and extended coverage and liability	159
insurance for a project, insurance protecting the issuer and its	160
officers and employees against liability for damage to property or	161
injury to or death of persons arising from the project, and any	162
other insurance the issuer may agree to provide under the bond	163
proceedings;	164

(K) Sell, lease, release, or otherwise dispose of real and	165
personal property or interests therein, or a combination thereof,	166
acquired by the issuer under authority of Chapter 165. of the	167
Revised Code and no longer needed for the purposes of such chapter	168
or of the issuer, and grant such easements and other rights in,	169
over, under, or across a project as will not interfere with its	170
use of such property. Such sale, lease, release, disposition, or	171
grant may be made without competitive bidding and in such manner	172
and for such consideration as the issuing authority in its	173
judgment deems appropriate.	174

(L) Do all other acts necessary or appropriate to carry out	175
those of the purposes of Section 13 of Article VIII, Ohio	176
Constitution, that are specified in the first sentence of this	177
section, and the purposes of this chapter.	178

Any instrument by which real property is acquired pursuant to	179
this section shall identify the agency of the state that has the	180
use and benefit of the real property as specified in section	181
5301.012 of the Revised Code.	182

Sec. 166.06.  (A) Subject to any limitations as to aggregate	183
amounts thereof that may from time to time be prescribed by the	184
general assembly and to other applicable provisions of this	185
chapter, the director of development may, on behalf of the state,	186
enter into contracts to guarantee the repayment or payment of not	187
more than ninety per cent of the unpaid principal amount of loans	188
made, including bonds, notes, or other certificates issued or	189
given to provide funds, to pay allowable costs of eligible	190
projects. Such guarantees shall be secured solely by and payable	191
solely from the loan guarantee fund created by this section and	192
unencumbered and available moneys in the facilities establishment	193
fund in the manner and to the extent provided in such guarantee	194
contracts consistent with this section. Such guarantees shall not	195
constitute general obligations of the state or of any political	196
subdivision, and moneys raised by taxation shall not be obligated	197
or pledged for the payment of such guarantees.	198

(B) Before guaranteeing any such repayments or payments the	199
director shall determine that:	200

(1) The project is an eligible project and is economically	201
sound;	202

(2) The principal amount to be guaranteed does not exceed	203
ninety per cent of the allowable costs of the eligible project as	204
determined by the director. To assist the director in making this	205
determination, the director may, in the director's discretion,	206
engage an independent engineer, architect, appraiser, or other	207
professional pursuant to a contract to be paid solely from the	208
facilities establishment fund, subject to controlling board	209
approval.	210

(3) The principal amount to be guaranteed has a satisfactory	211
maturity date or dates, which in no case shall be later than	212
twenty years from the effective date of the guarantee;	213

(4) The rate of interest on the loan to be guaranteed and on	214
any other loan made by the same parties or related persons for the	215
eligible project is not excessive;	216

(5) The principal obligor, or primary guarantor, is	217
responsible and is reasonably expected to be able to meet the	218
payments under the loan, bonds, notes, or other certificates;	219

(6) The loan or documents pertaining to the bonds, notes, or	220
other certificates to be guaranteed contains provisions for	221
payment by the principal obligor, and is in such form and contains	222
such terms and provisions for the protection of the lenders as are	223
generally consistent with commercial practice, including, where	224
applicable, provisions with respect to property insurance,	225
repairs, alterations, payment of taxes and assessments,	226
delinquency charges, default remedies, acceleration of maturity,	227
prior, additional and secondary liens, and other matters as the	228
director may approve.	229

(C) The contract of guarantee may make provision for the	230
conditions of, time for and manner of fulfillment of the guarantee	231
commitment, subrogation of the state to the rights of the parties	232
guaranteed and exercise of such parties' rights by the state,	233
giving the state the options of making payment of the principal	234
amount guaranteed in one or more installments and, if deferred, to	235
pay interest thereon from the loan guarantee fund and the	236
facilities establishment fund, any other terms or conditions	237
customary to such guarantees and as the director may approve, and	238
mayshall contain provisions for securing the guarantee in the	239
manner consistent with this section, including the lien imposed by	240
section 9.661 of the Revised Code, and may contain covenants on	241
behalf of the state for the maintenance of the loan guarantee fund	242
created by this section and of receipts to it permitted by this	243
chapter, including covenants on behalf of the state to issue	244
obligations under section 166.08 of the Revised Code to provide	245
moneys to the loan guarantee fund to fulfill such guarantees and	246
covenants authorized by division (R)(1) of section 166.08 of the	247
Revised Code, and covenants restricting the aggregate amount of	248
guarantees that may be contracted under this section and	249
obligations that may be issued under section 166.08 of the Revised	250
Code, and terms pertinent to either, to better secure the parties	251
guaranteed.	252

(D) The "loan guarantee fund" of the economic development	253
program is hereby created as a special revenue fund and a trust	254
fund which shall be in the custody of the treasurer of state but	255
shall be separate and apart from and not a part of the state	256
treasury to consist of all grants, gifts, and contributions of	257
moneys or rights to moneys lawfully designated for or deposited in	258
such fund, all moneys and rights to moneys lawfully appropriated	259
and transferred to such fund, including moneys received from the	260
issuance of obligations under section 166.08 of the Revised Code,	261
and moneys deposited to such fund pursuant to division (F) of this	262
section; provided that the loan guarantee fund shall not be	263
comprised, in any part, of moneys raised by taxation.	264

(E) The director may fix service charges for making a	265
guarantee. Such charges shall be payable at such times and place	266
and in such amounts and manner as may be prescribed by the	267
director.	268

(F) The treasurer of state shall serve as agent for the	269
director in the making of deposits and withdrawals and maintenance	270
of records pertaining to the loan guarantee fund. Prior to the	271
director's entry into a contract providing for the making of a	272
guarantee payable from the loan guarantee fund, the treasurer of	273
state shall cause to be transferred from the facilities	274
establishment fund to the loan guarantee fund an amount sufficient	275
to make the aggregate balance therein, taking into account the	276
proposed loan guarantee, equal to the loan guarantee reserve	277
requirement. Thereafter, the treasurer of state shall cause the	278
balance in the loan guarantee fund to be at least equal to the	279
loan guarantee reserve requirement. Funds from the loan guarantee	280
fund shall be disbursed under a guarantee made pursuant to this	281
section to satisfy a guaranteed repayment or payment which is in	282
default. The treasurer of state shall first withdraw and transfer	283
moneys then on deposit in the loan guarantee fund. Whenever these	284
moneys are inadequate to meet the requirements of a guarantee, the	285
treasurer of state shall, without need of appropriation or further	286
action by the director, provide for a withdrawal and transfer to	287
the loan guarantee fund and then to the guaranteed party of moneys	288
in such amount as is necessary to meet the guarantee from	289
unencumbered and available moneys in the facilities establishment	290
fund. Such disbursements shall be made in the manner and at the	291
times provided in such guarantees. Within ninety days following a	292
disbursement of moneys from the loan guarantee fund, the treasurer	293
of state, without need of appropriation or further action by the	294
director, shall provide for a withdrawal and transfer to the loan	295
guarantee fund from unencumbered and available moneys in the	296
facilities establishment fund, including moneys from the repayment	297
of loans made from that fund, of an amount sufficient to cause the	298
balance in the loan guarantee fund to be at least equal to the	299
loan guarantee reserve requirement.	300

(G) Any guaranteed parties under this section, except to the	301
extent that their rights are restricted by the guarantee	302
documents, may by any suitable form of legal proceedings, protect	303
and enforce any rights under the laws of this state or granted by	304
such guarantee or guarantee documents. Such rights include the	305
right to compel the performance of all duties of the director and	306
the treasurer of state required by this section or the guarantee	307
or guarantee documents; and in the event of default with respect	308
to the payment of any guarantees, to apply to a court having	309
jurisdiction of the cause to appoint a receiver to receive and	310
administer the moneys pledged to such guarantee with full power to	311
pay, and to provide for payment of, such guarantee, and with such	312
powers, subject to the direction of the court, as are accorded	313
receivers in general equity cases, excluding any power to pledge	314
or apply additional revenues or receipts or other income or moneys	315
of the state or governmental agencies of the state to the payment	316
of such guarantee. Each duty of the director and the treasurer of	317
state and their officers and employees, and of each governmental	318
agency and its officers, members, or employees, required or	319
undertaken pursuant to this section or a guarantee made under	320
authority of this section, is hereby established as a duty of the	321
director and the treasurer of state, and of each such officer,	322
member, or employee having authority to perform such duty,	323
specifically enjoined by the law resulting from an office, trust,	324
or station within the meaning of section 2731.01 of the Revised	325
Code. The persons who are at the time the director and treasurer	326
of state, or their officers or employees, are not liable in their	327
personal capacities on any guarantees or contracts to make	328
guarantees by the director.	329

(H) The determinations of the director under divisions (B)	330
and (C) of this section shall be conclusive for purposes of the	331
validity of a guarantee evidenced by a contract signed by the	332
director, and such guarantee shall be incontestable as to moneys	333
advanced under loans to which such guarantees are by their terms	334
applicable.	335

Sec. 166.07.  (A) The director of development, with the	336
approval of the controlling board and subject to the other	337
applicable provisions of this chapter, may lend moneys in the	338
facilities establishment fund to persons for the purpose of paying	339
allowable costs of an eligible project if the director determines	340
that:	341

(1) The project is an eligible project and is economically	342
sound;	343

(2) The borrower is unable to finance the necessary allowable	344
costs through ordinary financial channels upon comparable terms;	345

(3) The amount to be lent from the facilities establishment	346
fund will not exceed seventy-five per cent of the total allowable	347
costs of the eligible project, except that if any part of the	348
amount to be lent from the facilities establishment fund is	349
derived from the issuance and sale of project financing	350
obligations the amount to be lent will not exceed ninety per cent	351
of the total allowable costs of the eligible project;	352

(4) The eligible project could not be achieved in the local	353
area in which it is to be located if the portion of the project to	354
be financed by the loan instead were to be financed by a loan	355
guaranteed under section 166.06 of the Revised Code;	356

(5) The repayment of the loan from the facilities	357
establishment fund will be adequately secured by a mortgage,the	358
lien,imposed by section 9.661 of the Revised Code and may be	359
further secured by any assignment, or pledge, at such level of	360
priority as the director may require;	361

(6) The borrower will hold at least a ten per cent equity	362
interest in the eligible project at the time the loan is made.	363

(B) The determinations of the director under division (A) of	364
this section shall be conclusive for purposes of the validity of a	365
loan commitment evidenced by a loan agreement signed by the	366
director.	367

(C) Fees, charges, rates of interest, times of payment of	368
interest and principal, and other terms, conditions, and	369
provisions of and security for loans made from the facilities	370
establishment fund pursuant to this section shall be such as the	371
director determines to be appropriate and in furtherance of the	372
purpose for which the loans are made. The moneys used in making	373
such loans shall be disbursed from the facilities establishment	374
fund upon order of the director. The director shall give special	375
consideration in setting the required job creation ratios and	376
interest rates for loans that are for voluntary actions.	377

(D) The director may take actions necessary or appropriate to	378
collect or otherwise deal with any loan made under this section,	379
and shall take any action required by section 9.661 of the Revised	380
Code.	381

(E) The director may fix service charges for the making of a	382
loan. Such charges shall be payable at such times and place and in	383
such amounts and manner as may be prescribed by the director.	384

Sec. 166.21. (A) The director of development, with the	385
approval of the controlling board and subject to other applicable	386
provisions of this chapter, may lend moneys in the research and	387
development loan fund to persons for the purpose of paying	388
allowable costs of eligible research and development projects, if	389
the director determines that all of the following conditions are	390
met:	391

(1) The project is an eligible research and development	392
project and is economically sound;	393

(2) The amount to be lent from the research and development	394
loan fund will not exceed seventy-five per cent of the total costs	395
of the eligible research and development project;	396

(3) The repayment of the loan from the research and	397
development loan fund will be secured by a mortgage,the lien,	398
imposed by section 9.661 of the Revised Code and may be further	399
secured by any assignment, pledge, or other interest in property	400
or other assets of the borrower at such level of priority and	401
value as the director considers necessary, provided that, in	402
making such a determination, the director shall take into account	403
the value of any rights granted by the borrower to the director to	404
control the use of any assets of the borrower under the	405
circumstances described in the loan documents.	406

(B) The determinations of the director under division (A) of	407
this section shall be conclusive for purposes of the validity of a	408
loan commitment evidenced by a loan agreement signed by the	409
director.	410

(C) Fees, charges, rates of interest, times of payment of	411
interest and principal, and other terms and conditions of, and	412
security for, loans made from the research and development loan	413
fund shall be such as the director determines to be appropriate	414
and in furtherance of the purpose for which the loans are made.	415
The moneys used in making loans shall be disbursed from the fund	416
upon order of the director. Unless otherwise specified in any	417
indenture or other instrument securing obligations under division	418
(D) of section 166.08 of the Revised Code, any payments of	419
principal and interest from loans made from the fund shall be paid	420
to the fund and used for the purpose of making loans under this	421
section.	422

(D)(1) As used in this division, "qualified research and	423
development loan payments" means payments of principal and	424
interest on a loan made from the research and development loan	425
fund.	426

(2) Each year, the director may, upon request, issue a	427
certificate to a borrower of moneys from the research and	428
development loan fund indicating the amount of the qualified	429
research and development loan payments made by or on behalf of the	430
borrower during the calendar year immediately preceding the tax	431
year, as defined in section 5733.04 of the Revised Code, or	432
taxable year, as defined in section 5747.01 of the Revised Code,	433
for which the certificate is issued. In addition to indicating the	434
amount of qualified research and development loan payments, the	435
certificate shall include a determination of the director that as	436
of the thirty-first day of December of the calendar year for which	437
the certificate is issued, the borrower is not in default under	438
the loan agreement, lease, or other instrument governing repayment	439
of the loan, including compliance with the job creation and	440
retention commitments that are part of the qualified research and	441
development project. The director shall not issue a certificate in	442
an amount that exceeds one hundred fifty thousand dollars.	443

(E) The director may take actions necessary or appropriate to	444
collect or otherwise deal with any loan made under this section,	445
and shall take any action required by section 9.661 of the Revised	446
Code.	447

(F) The director may fix service charges for the making of a	448
loan. The charges shall be payable at such times and place and in	449
such amounts and manner as may be prescribed by the director.	450

(G)(1) There shall be credited to the research and	451
development loan fund moneys received by this state from the	452
repayment of loans, including interest thereon, made from the	453
fund, and moneys received from the sale, lease, or other	454
disposition of property acquired or constructed with moneys in the	455
fund derived from the proceeds of the sale of obligations under	456
section 166.08 of the Revised Code. Moneys in the fund shall be	457
applied as provided in this chapter pursuant to appropriations	458
made by the general assembly.	459

(2) In addition to the requirements in division (G)(1) of	460
this section, moneys referred to in that division may be deposited	461
to the credit of separate accounts established by the director of	462
development within the research and development loan fund or in	463
the bond service fund and pledged to the security of obligations,	464
applied to the payment of bond service charges without need for	465
appropriation, released from any such pledge and transferred to	466
the research and development loan fund, all as and to the extent	467
provided in the bond proceedings pursuant to written directions of	468
the director of development. Accounts may be established by the	469
director in the research and development loan fund for particular	470
projects or otherwise. The director may withdraw from the fund or,	471
subject to provisions of the applicable bond proceedings, from any	472
special funds established pursuant to the bond proceedings, or	473
from any accounts in such funds, any amounts of investment income	474
required to be rebated and paid to the federal government in order	475
to maintain the exemption from federal income taxation of interest	476
on obligations issued under this chapter, which withdrawal and	477
payment may be made without the necessity for appropriation.	478

Sec. 3735.68. (A) The performance of any obligation of the	479
owner of commercial or industrial property under an agreement	480
entered into under section 3735.671 of the Revised Code is secured	481
by a lien on the property so exempted. The lien is for the amount	482
of taxes that would have been charged against the property if the	483
property had not been so exempted, less any taxes paid on such	484
property. The lien has the same priority as the lien for taxes on	485
property. The county or municipal corporation that enters into the	486
agreement shall enforce the lien in the same manner as mortgage	487
liens are enforced.	488

(B) Any agreement entered into under section 3735.671 of the	489
Revised Code shall prohibit the owner of commercial or industrial	490
property exempted under the agreement from selling or otherwise	491
transferring the property to any person before the owner fulfills	492
the owner's obligations under the agreement.	493

(C) The housing officer shall make annual inspections of the	494
properties within the community reinvestment area upon which are	495
located structures or remodeling for which an exemption has been	496
granted under section 3735.67 of the Revised Code. If the housing	497
officer finds that the property has not been properly maintained	498
or repaired due to the neglect of the owner, the housing officer	499
may revoke the exemption at any time after the first year of	500
exemption. If the owner of commercial or industrial property	501
exempted from taxation under section 3735.67 of the Revised Code	502
has materially failed to fulfill its obligations under the written	503
agreement entered into under section 3735.671 of the Revised Code,	504
or if the owner is determined to have violated division (E) of	505
that section, the legislative authority, subject to the terms of	506
the agreement, may revoke the exemption at any time after the	507
first year of exemption. The housing officer or legislative	508
authority shall notify the county auditor and the owner of the	509
property that the tax exemption no longer applies. If the housing	510
officer or legislative authority revokes a tax exemption, the	511
housing officer shall send a report of the revocation to the	512
community reinvestment area housing council and to the tax	513
incentive review council established pursuant to section 3735.69	514
or 5709.85 of the Revised Code, containing a statement of the	515
findings as to the maintenance and repair of the property, failure	516
to fulfill obligations under the written agreement, or violation	517
of division (E) of section 3735.671 of the Revised Code, and the	518
reason for revoking the exemption.	519

(D) If the agreement entered into under section 3735.671 of	520
the Revised Code so provides, the legislative authority of a	521
municipal corporation or county may require the owner of property	522
whose exemption has been revoked to reimburse the taxing	523
authorities within whose taxing jurisdiction the exempted property	524
is located for the amount of real property taxes that would have	525
been payable to those authorities had the property not been	526
exempted from taxation.	527

Sec. 5709.634.  (A) The performance of any obligation of an	528
enterprise under an agreement entered into under section 5709.61,	529
5709.62, or 5709.632 of the Revised Code is secured by a lien on	530
the property exempted under the agreement. The lien is for the	531
amount of taxes that would have been charged and payable against	532
the property if the property had not been so exempted, less any	533
taxes paid on such property. The lien has the same priority as the	534
lien for taxes on property. The county, township, or municipal	535
corporation that entered into the agreement shall enforce the lien	536
on exempted real property in the same manner as mortgage liens are	537
enforced and shall enforce the lien on tangible personal property	538
in the manner provided by law for liens for taxes on tangible	539
personal property.	540

(B) Any agreement entered into under section 5709.61,	541
5709.62, or 5709.632 of the Revised Code shall prohibit the	542
enterprise from selling or otherwise transferring property	543
exempted under the agreement to any person before the enterprise	544
fulfills the enterprise's obligations under the agreement.	545

Sec. 5709.831. (A) As used in this section:

546

(1) "Exempted property" means real property exempted from	547
taxation under section 5709.40, 5709.41, 5709.73, or 5709.78 of	548
the Revised Code.	549

(2) "Exemption agreement" means any agreement or set of	550
agreements between an owner of exempted property and a political	551
subdivision under which the owner of exempted property is required	552
to undertake an obligation, including remittance of payments in	553
lieu of taxes, as a condition for the political subdivision to	554
grant an exemption from taxation under section 5709.40, 5709.41,	555
5709.73, or 5709.78 of the Revised Code.	556

(3) "Political subdivision" means the county, township, or	557
municipal corporation granting an exemption from taxation under	558
section 5709.40, 5709.41, 5709.73, or 5709.78 of the Revised Code.	559

(B) The performance of any obligation of the owner of	560
exempted property under any exemption agreement is secured by a	561
lien on the exempted property. The lien is for the amount of taxes	562
that would be charged and payable against the exempted property if	563
the property had not been so exempted, less any taxes paid on such	564
property and any reimbursement paid under division (C) of this	565
section. The lien has the same priority as the lien for taxes on	566
real property. The political subdivision shall enforce the lien in	567
the same manner as mortgage liens are enforced.	568

(C) Any exemption agreement shall prohibit the owner of	569
exempted property subject to the agreement from selling or	570
otherwise transferring the property to any person before the owner	571
fulfills the owner's obligations under the agreement.	572

(D) The legislative authority of a municipal corporation,	573
township, or countypolitical subdivision that grants an exemption	574
from taxation for an improvement under section 5709.40, 5709.41,	575
5709.73, or 5709.78 of the Revised Code may require the owner of	576
the improvement to reimburse the local taxing authorities within	577
whose taxing jurisdiction the exempted improvement is located for	578
the amount of real property taxes that would have been payable to	579
the taxing authorities had the improvement not been exempted from	580
taxation. If the legislative authority requires the owner of the	581
exempted improvements to make payments in lieu of taxes, the	582
legislative authority may require such reimbursement only to the	583
extent that the owner failed to make those payments as required.	584

Section 2. That existing sections 165.02, 166.06, 166.07,	585
166.21, 3735.68, and 5709.831 of the Revised Code are hereby	586
repealed.	587