As Reported by the House Finance and Appropriations Committee

126th General Assembly Regular Session 2005-2006

Sub. H. B. No. 293

Representatives Kilbane, Miller, Trakas, McGregor, J., Wolpert, Evans, C., Reidelbach, Gilb, Faber, Cassell, Kearns, Hartnett, Carano, Boccieri, Healy, Buehrer 

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A BILL

To amend section 135.353 and to enact sections

1

135.804, 135.805, 135.806, and 135.807 of the

2

Revised Code to authorize boards of county

3

commissioners to establish property tax payment

4

linked deposit programs to assist senior citizens

5

and permanently and totally disabled citizens in

6

paying property taxes on their homesteads.

7

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

Section 1. That section 135.353 be amended and sections	8
135.804, 135.805, 135.806, and 135.807 of the Revised Code be	9
enacted to read as follows:	10

Sec. 135.353. (A) In addition to the investments specified	11
in section 135.35 of the Revised Code, the investing authority of	12
a county may do bothall of the following:	13

(A)(1) Invest inactive or public moneys in linked deposits as	14
authorized by resolution adopted pursuant to section 135.80 or	15
135.801 of the Revised Code;	16

(B)(2) Invest inactive or public moneys in linked deposits as	17
authorized by resolution adopted pursuant to section 135.805 of	18
the Revised Code for a term considered appropriate by the	19
investing authority, but not exceeding fifteen years, which	20
investment may be renewed for up to two additional terms with each	21
additional term not exceeding fifteen years.	22

(3) Invest inactive moneys in certificates of deposit in	23
accordance with all of the following:	24

(1)(a) The inactive moneys initially are deposited with an	25
eligible public depository described in section 135.32 of the	26
Revised Code and selected by the investing authority.	27

(2)(b) For the investing authority depositing the inactive	28
moneys pursuant to division (B)(1)(A)(3)(a) of this section, the	29
eligible public depository selected pursuant to that division	30
invests the inactive moneys in certificates of deposit of one or	31
more federally insured banks or savings and loan associations,	32
wherever located. The full amount of principal and any accrued	33
interest of each certificate of deposit invested in pursuant to	34
division (B)(2)(A)(3)(b) of this section shall be insured by	35
federal deposit insurance.	36

(3)(c) For the investing authority depositing the inactive	37
moneys pursuant to division (B)(1)(A)(3)(a) of this section, the	38
eligible public depository selected pursuant to that division acts	39
as custodian of the certificates of deposit described in division	40
(B)(2)(A)(3)(b) of this section.	41

(4)(d) At the same time that the eligible public depository	42
selected in accordance with division (B)(1)(A)(3)(a) of this	43
section invests the deposit received pursuant to that division in	44
the certificates of deposit described in division (B)(2)(A)(3)(b)	45
of this section, and the certificates of deposit are issued by the	46
bank or savings and loan association, the eligible public	47
depository receives an amount of deposits from customers of other	48
federally insured financial institutions, wherever located, that	49
are equal to or greater than the amount initially deposited by the	50
investing authority pursuant to division (B)(1)(A)(3)(a) of this	51
section.	52

(C)(B) Inactive moneys deposited or invested in accordance	53
with division (B)(A)(3) of this section are not subject to any	54
pledging requirements described in section 135.181 or 135.37 of	55
the Revised Code.	56

Sec. 135.804.  As used in sections 135.804 to 135.807 of the	57
Revised Code:	58

(A) "Taxes" has the same meaning as in section 323.01 of the	59
Revised Code.	60

(B) "Eligible borrower" means a person meeting all of the	61
following:	62

(1) The person is the owner of a homestead that is not	63
charged with more than two years worth of certified delinquent	64
taxes.	65

(2) The person had total income in the year prior to	66
submitting an application for a reduced rate loan under a property	67
tax payment linked deposit program the lesser of fifty thousand	68
dollars or the total income limit established pursuant to section	69
135.805 of the Revised Code by the board of county commissioners	70
as an eligibility requirement for participation in a property tax	71
payment linked deposit program.	72

(3) The person meets all other eligibility requirements	73
established pursuant to section 135.805 of the Revised Code by the	74
board of county commissioners for participation in a property tax	75
payment linked deposit program.	76

(C) "Eligible lending institution" means a financial	77
institution that meets all of the following:	78

(1) The financial institution is eligible to make loans to	79
individuals that are secured by mortgages, including mortgages	80
commonly known as reverse mortgages.	81

(2) The financial institution has an office located within	82
the territorial limits of the county.	83

(3) The financial institution is an eligible public	84
depository described in section 135.32 of the Revised Code into	85
which the county's investing authority may deposit the public	86
moneys of the county.	87

(4) The financial institution has entered into an agreement	88
described in division (B)(4) of section 135.805 of the Revised	89
Code with the investing authority of the county to participate in	90
the property tax payment linked deposit program.	91

(D) "Homestead" means either of the following:

92

(1) A dwelling, including a unit in a multiple-unit dwelling	93
and a manufactured home or mobile home taxed as real property	94
pursuant to division (B) of section 4503.06 of the Revised Code,	95
owned and occupied as a home by an individual whose domicile is in	96
this state and who has not acquired ownership from a person, other	97
than the individual's spouse, related by consanguinity or affinity	98
for the purpose of qualifying for a property tax payment linked	99
deposit program.	100

(2) A unit in a housing cooperative that is occupied as a	101
home, but not owned, by an individual whose domicile is in this	102
state.	103

The homestead shall include so much of the land surrounding	104
it, not exceeding one acre, that is reasonably necessary for the	105
use of the dwelling or unit as a home. An owner includes a holder	106
of one of the several estates in fee, a vendee in possession under	107
a purchase agreement or a land contract, a mortgagor, a life	108
tenant, one or more tenants with a right of survivorship, tenants	109
in common, and a settlor of a revocable inter vivos trust holding	110
the title to a homestead occupied by the settlor as of right under	111
the trust. The tax commissioner shall adopt rules for the uniform	112
classification and valuation of real property or portions of real	113
property as homesteads.	114

(E) "Housing cooperative" means a housing complex of at least	115
two hundred fifty units that is owned and operated by a nonprofit	116
corporation that issues a share of the corporation's stock to an	117
individual, entitling the individual to live in a unit of the	118
complex, and collects a monthly maintenance fee from the	119
individual to maintain, operate, and pay the taxes of the complex.	120

(F) "Investing authority" and "public moneys" have the same	121
meanings as in section 135.31 of the Revised Code.	122

(G) "Lien certificate" means the certificate described in	123
section 135.807 of the Revised Code.	124

(H) "Old age and survivors benefits received pursuant to the	125
'Social Security Act'" or "tier I railroad retirement benefits	126
received pursuant to the 'Railroad Retirement Act'" means:	127

(1) Old age benefits payable under the social security or	128
railroad retirement laws in effect on the last day of the calendar	129
year prior to the year for which a reduced rate loan under a	130
property tax payment linked deposit program is applied for, or, if	131
no such benefits are payable that year, old age benefits payable	132
the first succeeding year in which old age benefits under the	133
social security or railroad retirement laws are payable, except in	134
those cases where a change in social security or railroad	135
retirement benefits results in a reduction in income.	136

(2) The less of:

137

(a) Survivors benefits payable under the social security or	138
railroad retirement laws in effect on the last day of the calendar	139
year prior to the year for which a reduced rate loan under a	140
property tax payment linked deposit program is applied for, or, if	141
no such benefits are payable that year, survivors benefits payable	142
the first succeeding year in which survivors benefits are payable;	143
or	144

(b) Old age benefits of the deceased spouse, as determined	145
under division (H)(1) of this section, upon which the surviving	146
spouse's survivors benefits are based under the social security or	147
railroad retirement laws, except in those cases where a change in	148
benefits would cause a reduction in income.	149

Survivors benefits are those described in division (H)(2)(b)	150
of this section only if the deceased spouse received old age	151
benefits in the year in which the deceased spouse died. If the	152
deceased spouse did not receive old age benefits in the year in	153
which the deceased spouse died, then survivors benefits are those	154
described in division (H)(2)(a) of this section.	155

(I) "Permanently and totally disabled" means a person who, on	156
the first day of January of the year that a reduced rate loan	157
under a property tax payment linked deposit program is applied	158
for, has some impairment in body or mind that makes the person	159
unable to work at any substantially remunerative employment that	160
the person reasonably is able to perform and that will, with	161
reasonable probability, continue for an indefinite period of at	162
least twelve months without any present indication of recovery	163
therefrom or has been certified as permanently and totally	164
disabled by a state or federal agency having the function of so	165
classifying persons.	166

(J) "Property tax payment linked deposit program" means a	167
county-wide program authorized under section 135.805 of the	168
Revised Code and established by the board of county commissioners	169
of a county pursuant to that section.	170

(K) "Sixty-five years of age or older" means a person who has	171
attained age sixty-four prior to the first day of January of the	172
year of application for a reduced rate loan under a property tax	173
payment linked deposit program.	174

(L) "Total income" means the adjusted gross income of the	175
owner and the owner's spouse for the year preceding the year in	176
which application for a reduced rate loan under a property tax	177
payment linked deposit program is made, as determined under the	178
"Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as	179
amended, adjusted as follows:	180

(1) Subtract the amount of disability benefits included in	181
adjusted gross income, but not to exceed fifty-two hundred	182
dollars;	183

(2) Add old age and survivors benefits received pursuant to	184
the "Social Security Act" that are not included in adjusted gross	185
income;	186

(3) Add retirement, pension, annuity, or other retirement	187
payments or benefits not included in adjusted gross income;	188

(4) Add tier I and tier II railroad retirement benefits	189
received pursuant to the "Railroad Retirement Act," 50 Stat. 307,	190
45 U.S.C.A. 228;	191

(5) Add interest on federal, state, and local government	192
obligations;	193

(6) For a person who received a reduced rate loan under a	194
property tax payment linked deposit program for a prior year on	195
the basis of being permanently and totally disabled and whose	196
current application for a reduced rate loan is made on the basis	197
of age, subtract the following amount:	198

(a) If the person received disability benefits that were not	199
included in adjusted gross income in the year preceding the first	200
year in which the person applied for a reduced rate loan on the	201
basis of age, subtract an amount equal to the disability benefits	202
the person received in that preceding year, to the extent included	203
in total income in the current year and not subtracted under	204
division (L)(1) of this section in the current year;	205

(b) If the person received disability benefits that were	206
included in adjusted gross income in the year preceding the first	207
year in which the person applied for a reduced rate loan on the	208
basis of age, subtract an amount equal to the amount of disability	209
benefits that were subtracted pursuant to division (L)(1) of this	210
section in that preceding year, to the extent included in total	211
income in the current year and not subtracted under division	212
(L)(1) of this section in the current year.	213

Disability benefits that are paid by the department of	214
veterans affairs or a branch of the armed forces of the United	215
States on account of an injury or disability shall not be included	216
in total income.	217

Sec. 135.805.  (A) The general assembly finds that many low	218
to moderate income senior citizens and permanently and totally	219
disabled citizens face financial hardship and find it difficult to	220
timely pay property taxes on their homesteads which can lead to	221
delinquencies, penalties, declines in tax receipts, foreclosures,	222
a loss of stable and affordable housing, a loss of neighborhoods	223
and communities, and a decline in property values. Accordingly, it	224
is declared to be the public policy of the state through property	225
tax payment linked deposit programs established by counties to	226
provide a source of low-cost funds for lending purposes to assist	227
these citizens in timely paying property taxes on their	228
homesteads.	229

(B) The board of county commissioners, by resolution, may	230
establish for the benefit of persons sixty-five years of age or	231
older, or persons who are permanently and totally disabled, or	232
both groups of persons, a property tax payment linked deposit	233
program. The program shall authorize the investing authority of	234
the county, in accordance with division (A)(2) of section 135.353	235
of the Revised Code, to place certificates of deposit at up to	236
three per cent below market rates with an eligible lending	237
institution, provided that the eligible lending institution agrees	238
to lend the value of such deposit to eligible borrowers at up to	239
three per cent below the present borrowing rate applicable to each	240
eligible borrower. The resolution shall include requirements,	241
parameters, limitations, and other provisions that are consistent	242
with sections 135.804 to 135.807 of the Revised Code and are	243
necessary to establish and carry out the property tax payment	244
linked deposit program, including, but not limited to, all of the	245
following:	246

(1) Eligibility requirements for borrowers who may receive	247
reduced rate loans under the property tax payment linked deposit	248
program, including both of the following:	249

(a) A total income limit for a borrower to be eligible for	250
such a loan;	251

(b) An indebtedness limit that a borrower may not exceed to	252
be eligible for such a loan, under which the sum of all recorded	253
liens on the homestead plus the amount of the reduced rate loan	254
cannot exceed eighty per cent of the homestead's true value as	255
most recently determined by the county auditor.	256

(2) Application procedures for eligible borrowers and	257
eligible lending institutions wishing to participate in the	258
property tax payment linked deposit program;	259

(3) Review procedures for applications and criteria for	260
acceptance or rejection of applications for reduced rate loans	261
under the property tax payment linked deposit program;	262

(4) Necessary agreements between the eligible lending	263
institution and the investing authority of the county to carry out	264
the purposes of the property tax payment linked deposit program,	265
including procedures for the payment directly to the county	266
treasurer by the eligible lending institution of the property	267
taxes due on the homestead and delivery by the county treasurer to	268
the eligible lending institution of the lien certificate as	269
provided in section 135.807 of the Revised Code;	270

(5) Annual reports regarding the operation of the property	271
tax payment linked deposit program to be made by the investing	272
authority to the board of county commissioners.	273

(C) A board of county commissioners may appropriate funds	274
from the general fund of the county or any other lawfully	275
available funds of the county for the purpose of defraying some or	276
all of the closing costs and expenses of reduced rate loans made	277
by eligible lending institutions to eligible borrowers pursuant to	278
the property tax payment linked deposit program.	279

(D) The county and its investing authority and board of	280
county commissioners are not liable to any eligible lending	281
institution in any manner for the payment of the principal or	282
interest on any reduced rate loan made under the property tax	283
payment linked deposit program, and any delay in payment or	284
default on the part of any borrower does not in any manner affect	285
the deposit agreement between the eligible lending institution and	286
the investing authority or board of county commissioners.	287

Sec. 135.806.  Upon placement of a property tax payment	288
linked deposit with an eligible lending institution pursuant to an	289
agreement described in section 135.805 of the Revised Code, the	290
eligible lending institution shall do both of the following:	291

(A) Lend funds pursuant to the agreement to an eligible	292
borrower;	293

(B) Comply fully with the requirements of sections 135.804 to	294
135.807 of the Revised Code.	295

Sec. 135.807.  (A) A property tax payment linked deposit	296
program shall provide for the delivery of a lien certificate to an	297
eligible lending institution making payment to the county	298
treasurer, pursuant to a loan agreement between the eligible	299
lending institution and eligible borrower, of some or all of the	300
taxes then due on the homestead of that eligible borrower.	301

(B)(1) To ensure uniformity among all counties, the tax	302
commissioner shall prescribe the form for a lien certificate	303
delivered pursuant to division (A) of this section, which form	304
shall include the identity of the homestead, the eligible	305
borrower, the eligible lending institution, the amount of taxes	306
paid by that eligible lending institution, and the tax year for	307
which the taxes were paid. The tax commissioner shall distribute	308
the forms to the county treasurers of all counties in which a	309
property tax payment linked deposit program is established.	310

(2) A county treasurer shall use the lien certificate form	311
prescribed by the tax commissioner, except that, prior to the time	312
that a lien certificate form is prescribed and the forms are	313
distributed by the tax commissioner, the form shall be prepared by	314
the county treasurer of the county, contain the information	315
required by division (B)(1) of this section, and include the	316
following sentence: "This lien certificate is delivered pursuant	317
to section 135.807 of the Revised Code and vests in the eligible	318
lending institution the first lien held previously by the state	319
and its taxing districts for the amount of taxes paid by the	320
eligible lending institution, together with any and all unpaid	321
interest thereon."	322

(C)(1) The delivery of the lien certificate pursuant to	323
division (A) of this section vests in the eligible lending	324
institution the first lien held previously by the state and its	325
taxing districts for the amount of the taxes paid by the eligible	326
lending institution, together with any unpaid interest thereon	327
from the date of delivery at the interest rate specified in the	328
loan agreement between the eligible lending institution and the	329
eligible borrower. The lien is superior to any subsequent tax	330
liens.	331

(2) Subject to division (C)(3) of this section, the lien	332
certificate delivered pursuant to division (A) of this section is	333
superior to all other liens and encumbrances upon the homestead	334
described in that lien certificate, and the lien continues in full	335
force and effect until the amount of all taxes paid by the	336
eligible lending institution, together with any unpaid interest	337
thereon, has been repaid to the eligible lending institution.	338

(3) With respect to the priority as among first liens of the	339
state and its taxing districts, the priority is determined by the	340
date that the first liens of the state and its taxing districts	341
attached pursuant to section 323.11 of the Revised Code, with	342
first priority to the earliest attached lien and each immediately	343
subsequent priority based upon the next earliest attached lien.	344

(D) The eligible lending institution may record the lien	345
certificate or memorandum thereof as a mortgage on the land in the	346
office of the county recorder of the county in which the homestead	347
is situated. The county recorder shall record the certificate in	348
the record of mortgages provided in division (B) of section 317.08	349
of the Revised Code and shall index the certificate in the indexes	350
provided for under section 317.18 of the Revised Code. If the lien	351
subsequently is canceled, the cancellation also shall be recorded	352
by the county recorder. When a loan is repaid in full, the	353
eligible financial institution shall promptly record the full	354
payment and cancel or otherwise release the lien. On repayment of	355
the loan in full, the lien certificate shall be null and void.	356

Section 2. That existing section 135.353 of the Revised Code	357
is hereby repealed.	358