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As Reported by the Senate Ways and Means Committee
123rd General Assembly
Regular Session
1999-2000 | Sub. H. B. No. 27 |
REPRESENTATIVES GRENDELL-METELSKY-BRITTON-HARTNETT-PETERSON-
HOLLISTER-JOLIVETTE-HAINES-BEATTY-OLMAN-DePIERO-SCHULER-
BARRETT-PRINGLE-BUCHY-ROBERTS-BARNES-
SENATOR BLESSING
A BILL
To amend sections
5709.61, 5709.62, 5709.63, 5709.631, and 5723.06 of the Revised Code to
specify that certain places of business where electricity is
generated are facilities eligible for tax abatements under the
enterprise zone program, to prohibit sales of forfeited lands to delinquent
property taxpayers, and to
permit, for a limited time, the abatement of unpaid property taxes,
penalties, and interest owed
on property that would have been tax exempt except for a failure
to comply with certain tax exemption
procedures.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5709.61,
5709.62, 5709.63, 5709.631, and 5723.06 of the Revised Code be amended to
read as follows:
Sec. 5709.61. As used in sections 5709.61 to 5709.69 of
the Revised Code:
(A) "Enterprise zone" or "zone" means any of the
following:
(1) An area with a single continuous boundary designated
in the manner set forth in section 5709.62 or 5709.63 of the
Revised Code and certified by the director of development as
having a population of at least four thousand according to the
best and most recent data available to the director and having at
least two of the following characteristics:
(a) It is located in a municipal corporation defined by
the United States office of management and budget as a central
city of a metropolitan statistical area;
(b) It is located in a county designated as being in the
"Appalachian region" under the "Appalachian Regional Development
Act of 1965," 79 Stat. 5, 40 App. U.S.C.A. 403, as amended;
(c) Its average rate of unemployment, during the most
recent twelve-month period for which data are available, is equal
to at least one hundred twenty-five per cent of the average rate
of unemployment for the state of Ohio for the same period;
(d) There is a prevalence of commercial or industrial
structures in the area that are vacant or demolished, or are
vacant and the taxes charged thereon are delinquent, and
certification of the area as an enterprise zone would likely
result in the reduction of the rate of vacant or demolished
structures or the rate of tax delinquency in the area;
(e) The population of all census tracts in the area,
according to the federal census of 1990, decreased by at least
ten per cent between the years 1970 and 1990;
(f) At least fifty-one per cent of the residents of the
area have incomes of less than eighty per cent of the median
income of residents of the municipal corporation or municipal
corporations in which the area is located, as determined in the
same manner specified under section 119(b) of the "Housing and
Community Development Act of 1974," 88 Stat. 633, 42 U.S.C. 5318,
as amended;
(g) The area contains structures previously used for
industrial purposes but currently not so used due to age,
obsolescence, deterioration, relocation of the former occupant's
operations, or cessation of operations resulting from unfavorable
economic conditions either generally or in a specific economic
sector;
(h) An area IT IS located within one or more adjacent city,
local, or exempted village school districts, the income-weighted
tax capacity of each of which is less than seventy per cent of
the average of the income-weighted tax capacity of all city,
local, or exempted village school districts in the state
according to the most recent data available to the director from
the department of taxation.
The director of development shall adopt rules in accordance
with Chapter 119. of the Revised Code establishing conditions
constituting the characteristics described in divisions
(A)(1)(d), (g), and (h) of this section.
If an area could not be certified as an enterprise zone
unless it satisfied division (A)(1)(g) of this section, the
legislative authority may enter into agreements in that zone
under section 5709.62, 5709.63, or 5709.632 of the Revised Code
only if such agreements result in the development of the
facilities described in that division, the parcel of land on
which such facilities are situated, or adjacent parcels. The
director of development annually shall review all agreements in
such zones to determine whether the agreements have resulted in
such development; if the director determines that the agreements
have not resulted in such development, the director immediately
shall revoke certification of the zone and notify the legislative
authority of such revocation. Any agreements entered into prior
to revocation under this paragraph shall continue in effect for
the period provided in the agreement.
(2) An area with a single continuous boundary designated
in the manner set forth in section 5709.63 of the Revised Code
and certified by the director of development as:
(a) Being located within a county that contains a
population of three hundred thousand or less;
(b) Having a population of at least one thousand according
to the best and most recent data available to the director;
(c) Having at least two of the characteristics described
in divisions (A)(1)(b) to (h) of this section.
(3) An area with a single continuous boundary designated
in the manner set forth under division (A)(1) of section 5709.632
of the Revised Code and certified by the director of development
as having a population of at least four thousand, or under
division (A)(2) of that section and certified as having a
population of at least one thousand, according to the best and
most recent data available to the director.
(B) "Enterprise" means any form of business organization
including, but not limited to, any partnership, sole
proprietorship, or corporation, including an S corporation as
defined in section 1361 of the Internal Revenue Code and any
corporation that is majority work-owned either directly through
the ownership of stock or indirectly through participation in an
employee stock ownership plan.
(C) "Facility" means an enterprise's place of business in
a zone, including land, buildings, machinery, equipment, and
other materials, except inventory, used in business. "Facility"
INCLUDES LAND, BUILDINGS, MACHINERY, PRODUCTION AND STATION EQUIPMENT,
OTHER EQUIPMENT, AND OTHER
MATERIALS, EXCEPT INVENTORY, USED IN BUSINESS TO GENERATE ELECTRICITY
THAT IS DESIGNED AND INTENDED TO OPERATE DURING PEAK LOAD PERIODS AND TO
GENERATE ELECTRICITY DURING NO MORE THAN FOUR THOUSAND THREE HUNDRED FIFTY
HOURS IN A CALENDAR YEAR, PROVIDED THAT, FOR PURPOSES OF SECTIONS
5709.61 TO 5709.69 OF THE REVISED CODE, THE VALUE OF THE
PROPERTY
AT SUCH A FACILITY SHALL BE REDUCED BY THE VALUE, IF ANY, THAT IS
NOT APPORTIONED UNDER SECTION 5727.15 OF THE REVISED CODE TO
THE TAXING DISTRICT IN WHICH THE FACILITY IS
PHYSICALLY LOCATED. IN THE CASE OF SUCH A FACILITY THAT IS
PHYSICALLY LOCATED IN TWO ADJACENT TAXING DISTRICTS, THE PROPERTY LOCATED IN
EACH
TAXING DISTRICT CONSTITUTES A SEPARATE FACILITY.
"FACILITY" does not include any portion of an enterprise's place
of business
used primarily for making retail sales unless the place of
business is located in an impacted city as defined in section
1728.01 of the Revised Code.
(D) "Vacant facility" means a facility that has been
vacant for at least ninety days immediately preceding the date on
which an agreement is entered INTO under section 5709.62 or 5709.63 of
the Revised Code.
(E) "Expand" means to make expenditures to add land,
buildings, machinery, equipment, or other materials, except
inventory, to a facility that equal at least ten per cent of the
market value of the facility prior to such expenditures, as
determined for the purposes of local property taxation.
(F) "Renovate" means to make expenditures to alter or
repair a facility that equal at least fifty per cent of the
market value of the facility prior to such expenditures, as
determined for the purposes of local property taxation.
(G) "Occupy" means to make expenditures to alter or repair
a vacant facility equal to at least twenty per cent of the market
value of the facility prior to such expenditures, as determined
for the purposes of local property taxation.
(H) "Project site" means all or any part of a facility
that is newly constructed, expanded, renovated, or occupied by an
enterprise.
(I) "Project" means any undertaking by an enterprise to
establish a facility or to improve a project site by expansion,
renovation, or occupancy.
(J) "Position" means the position of one full-time
employee performing a particular set of tasks and duties.
(K) "Full-time employee" means an individual who is
employed for consideration by an enterprise for at least
thirty-five hours a week, or who renders any other standard of
service generally accepted by custom or specified by contract as
full-time employment.
(L) "New employee" means a full-time employee first
employed by an enterprise at a facility that is a project site
after the enterprise enters an agreement under section 5709.62 or
5709.63 of the Revised Code. "New employee" does not include an
employee if, immediately prior to being employed by the
enterprise, the employee was employed by an enterprise that is a
related member or predecessor enterprise of that enterprise.
(M) "Unemployed person" means any person who is totally
unemployed in this state, as that term is defined in division (M)
of section 4141.01 of the Revised Code, for at least ten
consecutive weeks immediately preceding that person's
employment at a
facility that is a project site, or who is so unemployed for at
least twenty-six of the fifty-two weeks immediately preceding
that person's
employment at such a facility.
(N) "JTPA eligible employee" means any individual who is
eligible for employment or training under the "Job Training
Partnership Act," 96 Stat. 1324 (1982), 29 U.S.C. 1501, as amended.
(O) "First used in business" means that the property
referred to has not been used in business in this state by the
enterprise that owns it, or by an enterprise that is a related
member or predecessor enterprise of such an enterprise, other
than as inventory, prior to being used in business at a facility
as the result of a project.
(P) "Training program" means any noncredit training
program or course of study that is offered by any state college
or university; university branch district; community college;
technical college; nonprofit college or university certified
under section 1713.02 of the Revised Code; school district; joint
vocational school district; school registered and authorized to
offer programs under section 3332.05 of the Revised Code; an
entity administering any federal, state, or local adult education
and training program; or any enterprise; and that meets all of
the following requirements:
(1) It is approved by the director of development;
(2) It is established or operated to satisfy the need of a
particular industry or enterprise for skilled or semi-skilled
employees;
(3) An individual is required to complete the course or
program before filling a position at a project site.
(Q) "Development" means to engage in the process of
clearing and grading land, making, installing, or constructing
water distribution systems, sewers, sewage collection systems,
steam, gas, and electric lines, roads, curbs, gutters, sidewalks,
storm drainage facilities, and construction of other facilities
or buildings equal to at least fifty per cent of the market value
of the facility prior to the expenditures, as determined for the
purposes of local property taxation.
(R) "Large manufacturing facility" means a single Ohio
facility that employed an average of at least one thousand
individuals during the five calendar years preceding an
agreement authorized under division (C)(3) of section 5709.62 or
division (B)(2) of section 5709.63 of the Revised Code. For purposes of this
division, both of the following apply:
(1) A single Ohio
manufacturing facility employed an average of at least one
thousand individuals during the five calendar years preceding
entering into such an agreement if one-fifth of the sum of the
number of employees employed on the highest employment day
during each of the five calendar years equals or exceeds one
thousand.
(2) The highest employment day is the day or days during
a calendar year on which the number of employees employed at a
single Ohio manufacturing facility was
greater than on any other day during the calendar year.
(S) "Business cycle" means the cycle of business activity
usually regarded as passing through alternating stages of
prosperity and depression.
(T) "Making retail sales" means the effecting of
transactions wherein one party is obligated to pay the price and
the other party is obligated to provide a service or to transfer
title to or possession of the item sold.
(U) "Environmentally contaminated" means that hazardous
substances exist at a facility under conditions that have caused
or would cause the facility to be identified as contaminated by
the state or federal environmental protection agency. These may
include facilities located at sites identified in the master
sites list or similar database maintained by the state
environmental protection agency if the sites have been
investigated by the agency and found to be contaminated.
(V) "Remediate" means to make expenditures to clean up an
environmentally contaminated facility so that it is no longer
environmentally contaminated that equal at least ten per cent of
the real property market value of the facility prior to such
expenditures as determined for the purposes of property taxation.
(W) "Related member" has the same meaning as defined in
section 5733.042 of the Revised Code without regard to division
(B) of that section, except that it is used with respect to an
enterprise rather than a taxpayer.
(X) "Predecessor enterprise" means an enterprise from
which the assets or equity of another enterprise has been
transferred, which transfer resulted in the full or partial
nonrecognition of gain or loss, or resulted in a carryover basis,
both as determined by rule adopted by the tax commissioner.
(Y) "Successor enterprise" means an enterprise to which
the assets or equity of another enterprise has been transferred,
which transfer resulted in the full or partial nonrecognition of
gain or loss, or resulted in a carryover basis, both as
determined by rule adopted by the tax commissioner.
Sec. 5709.62. (A) In any municipal corporation that is
defined by the United States office of management and budget as a
central city of a metropolitan statistical area, the legislative
authority of the municipal corporation may designate one or more
areas within its municipal corporation as proposed enterprise
zones. Upon designating an area, the legislative authority shall
petition the director of development for certification of the
area as having the characteristics set forth in division (A)(1)
of section 5709.61 of the Revised Code as amended by Substitute
Senate Bill No. 19 of the 120th general assembly. Except as
otherwise provided in division (E) of this section, on and after
July 1, 1994, legislative authorities shall not enter into
agreements under this section unless the legislative authority
has petitioned the director and the director has certified the
zone under this section as amended by that act; however, all
agreements entered into under this section as it existed prior to
July 1, 1994, and the incentives granted under those agreements
shall remain in effect for the period agreed to under those
agreements. Within sixty days after receiving such a petition,
the director shall determine whether the area has the
characteristics set forth in division (A)(1) of section 5709.61
of the Revised Code, and shall forward the findings to
the
legislative authority of the municipal corporation. If the
director certifies the area as having those characteristics, and
thereby certifies it as a zone, the legislative authority may
enter into an agreement with an enterprise under division (C) of
this section.
(B) Any enterprise that wishes to enter into an agreement
with a municipal corporation under division (C) of this section
shall submit a proposal to the legislative authority of the
municipal corporation on a form prescribed by the director of
development, together with the application fee established under
section 5709.68 of the Revised Code. The form shall require the
following information:
(1) An estimate of the number of new employees whom the
enterprise intends to hire, or of the number of employees whom
the enterprise intends to retain, within the zone at a facility
that is a project site, and an estimate of the amount of payroll
of the enterprise attributable to these employees;
(2) An estimate of the amount to be invested by the
enterprise to establish, expand, renovate, or occupy a facility,
including investment in new buildings, additions or improvements
to existing buildings, machinery, equipment, furniture, fixtures,
and inventory;
(3) A listing of the enterprise's current investment, if
any, in a facility as of the date of the proposal's submission.
The enterprise shall review and update the listings
required under this division to reflect material changes, and any
agreement entered into under division (C) of this section shall
set forth final estimates and listings as of the time the
agreement is entered into. The legislative authority may, on a
separate form and at any time, require any additional information
necessary to determine whether an enterprise is in compliance
with an agreement and to collect the information required to be
reported under section 5709.68 of the Revised Code.
(C) Upon receipt and investigation of a proposal under
division (B) of this section, if the legislative authority finds
that the enterprise submitting the proposal is qualified by
financial responsibility and business experience to create and
preserve employment opportunities in the zone and improve the
economic climate of the municipal corporation, the legislative
authority, on or before June 30,
1999, may do one
of the following:
(1) Enter into an agreement with the enterprise under
which the enterprise agrees to establish, expand, renovate, or
occupy a facility and hire new employees, or preserve employment
opportunities for existing employees, in return for one or more
of the following incentives:
(a) Exemption for a specified number of years, not to
exceed ten, of a specified portion, up to seventy-five per cent,
of the assessed value of tangible personal property first used in
business at the project site as a result of the agreement. An
exemption granted pursuant to this division applies to inventory
required to be listed pursuant to sections 5711.15 and 5711.16 of
the Revised Code, except that, in the instance of an expansion or
other situations in which an enterprise was in business at the
facility prior to the establishment of the zone, the inventory
which THAT is exempt is that amount or value of inventory in
excess of
the amount or value of inventory required to be listed in the
personal property tax return of the enterprise in the return for
the tax year in which the agreement is entered into.
(b) Exemption for a specified number of years, not to
exceed ten, of a specified portion, up to seventy-five per cent,
of the increase in the assessed valuation of real property
constituting the project site subsequent to formal approval of
the agreement by the legislative authority;
(c) Provision for a specified number of years, not to
exceed ten, of any optional services or assistance that the
municipal corporation is authorized to provide with regard to the
project site.
(2) An ENTER INTO AN agreement under which the enterprise
agrees to
remediate an environmentally contaminated facility, to spend an
amount equal to at least two hundred fifty per cent of the true
value in money of the real property of the facility prior to
remediation as determined for the purposes of property taxation
to establish, expand, renovate, or occupy the remediated
facility, and to hire new employees or preserve employment
opportunities for existing employees at the remediated facility,
in return for one or more of the following incentives:
(a) Exemption for a specified number of years, not to
exceed ten, of a specified portion, not to exceed fifty per cent,
of the assessed valuation of the real property of the facility
prior to remediation;
(b) Exemption for a specified number of years, not to
exceed ten, of a specified portion, not to exceed one hundred per
cent, of the increase in the assessed valuation of the real
property of the facility during or after remediation;
(c) The incentive under division (C)(1)(a) of this
section, except that the percentage of the assessed value of such
property exempted from taxation shall not exceed one hundred per
cent;
(d) The incentive under division (C)(1)(c) of this
section.
(3) Enter into an agreement with an enterprise that plans
to purchase and operate a large manufacturing facility that has
ceased operation or announced its intention to cease operation,
in return for exemption for a specified number of years, not to
exceed ten, of a specified portion, up to one hundred per cent,
of the assessed value of tangible personal property used in
business at the project site as a result of the agreement, or of
the assessed valuation of real property constituting the project
site, or both.
(D)(1) Notwithstanding divisions (C)(1)(a) and (b) of this
section, the portion of the assessed value of tangible personal
property or of the increase in the assessed valuation of real
property exempted from taxation under those divisions may exceed
seventy-five per cent in any year for which that portion is
exempted if the average percentage exempted for all years in
which the agreement is in effect does not exceed sixty per cent,
or if the board of education of the city, local, or exempted
village school district within the territory of which the
property is or will be located approves a percentage in excess of
seventy-five per cent. For the purpose of obtaining such
approval, the legislative authority shall deliver to the board of
education a notice not later than forty-five days prior to
approving the agreement, excluding Saturdays, Sundays, and
legal holidays as defined in section 1.14 of the Revised Code. The notice shall state
the percentage to be exempted, an
estimate of the true value of the property to be exempted, and
the number of years the property is to be exempted. The board of
education, by resolution adopted by a majority of the board,
shall approve or disapprove the agreement and certify a copy of
the resolution to the legislative authority not later than
fourteen days prior to the date stipulated by the legislative
authority as the date upon which approval of the agreement is to
be formally considered by the legislative authority. The board
of education may include in the resolution conditions under which
the board would approve the agreement, including the execution of
an agreement to compensate the school district under division (B)
of section 5709.82 of the Revised Code. The legislative
authority may approve the agreement at any time after the board
of education certifies its resolution approving the agreement to
the legislative authority, or, if the board approves the
agreement conditionally, at any time after the conditions are
agreed to by the board and the legislative authority.
If a board of education has adopted a resolution waiving
its right to approve agreements and the resolution
remains in effect, approval of an agreement by the
board is not required under this division. If a board of
education has adopted a resolution allowing a legislative
authority to deliver the notice required under this division
fewer than forty-five business days prior to the legislative
authority's approval of the agreement, the legislative
authority shall deliver the notice to the board not later than
the number of days prior to such approval as prescribed by the
board in its resolution. If a board of education adopts a
resolution waiving its right to approve agreements or shortening
the notification period, the board shall certify a copy of the
resolution to the legislative authority. If the board of
education rescinds such a resolution, it shall certify notice of
the rescission to the legislative authority.
(2) The legislative authority shall comply with section
5709.83 of the Revised
Code unless the board of
education has adopted a resolution under that section waiving
its right to receive such notice.
(E) This division applies to zones certified by the
director of development under this section prior to July
22,
1994.
On or before June 30, 1999,
the legislative authority
that designated a zone to which this division applies may enter
into an agreement with an enterprise if the legislative authority
makes the finding required under that division and determines
that the enterprise satisfies one of the criteria described in
divisions (E)(1) to (5) of this section:
(1) The enterprise currently has no operations in this
state and, subject to approval of the agreement, intends to
establish operations in the zone;
(2) The enterprise currently has operations in this state
and, subject to approval of the agreement, intends to establish
operations at a new location in the zone that would not result in
a reduction in the number of employee positions at any of the
enterprise's other locations in this state;
(3) The enterprise, subject to approval of the agreement,
intends to relocate operations, currently located in another
state, to the zone;
(4) The enterprise, subject to approval of the agreement,
intends to expand operations at an existing site in the zone that
the enterprise currently operates;
(5) The enterprise, subject to approval of the agreement,
intends to relocate operations, currently located in this state,
to the zone, and the director of development has issued a waiver
for the enterprise under division (B) of section 5709.633 of the
Revised Code.
The agreement shall require the enterprise to agree to
establish, expand, renovate, or occupy a facility in the zone and
hire new employees, or preserve employment opportunities for
existing employees, in return for one or more of the incentives
described in division (C) of this section.
(F) All agreements entered into under this section shall
be in the form prescribed under section 5709.631 of the Revised
Code. After an agreement is entered into under this division, if
the legislative authority revokes its designation of a zone, or
if the director of development revokes the zone's certification,
any entitlements granted under the agreement shall continue for
the number of years specified in the agreement.
(G) Except as otherwise provided in this division, an
agreement entered into under this section shall require that the
enterprise pay an annual fee equal to the greater of one per cent
of the dollar value of incentives offered under the agreement or
five hundred dollars; provided, however, that if the value of the
incentives exceeds two hundred fifty thousand dollars, the fee
shall not exceed two thousand five hundred dollars. The fee
shall be payable to the legislative authority once per year for
each year the agreement is effective on the days and in the form
specified in the agreement. Fees paid shall be deposited in a
special fund created for such purpose by the legislative
authority and shall be used by the legislative authority
exclusively for the purpose of complying with section 5709.68 of
the Revised Code and by the tax incentive review council created
under section 5709.85 of the Revised Code exclusively for the
purposes of performing the duties prescribed under that section.
The legislative authority may waive or reduce the amount of the
fee charged against an enterprise, but such a waiver or reduction
does not affect the obligations of the legislative authority or
the tax incentive review council to comply with section 5709.68
or 5709.85 of the Revised Code.
(H) When an agreement is entered into pursuant to this
section, the legislative authority authorizing the agreement
shall forward a copy of the agreement to the director of
development and to the tax commissioner within fifteen days after
the agreement is entered into.
(I) After an agreement is entered into, the enterprise
shall file with each personal property tax return required to be
filed, OR ANNUAL REPORT REQUIRED TO BE FILED UNDER SECTION 5727.08
OF THE REVISED CODE, while the agreement is in
effect, an informational return,
on a form prescribed by the tax commissioner for that purpose,
setting forth separately the property, and related costs and
values, exempted from taxation under the agreement.
(J) Enterprises may agree to give preference to residents
of the zone within which the agreement applies relative to
residents of this state who do not reside in the zone when hiring
new employees under the agreement.
(K) An agreement entered into under this section may
include a provision requiring the enterprise to create one or
more temporary internship positions for students enrolled in a
course of study at a school or other educational institution in
the vicinity, and to create a scholarship or provide another form
of educational financial assistance for students holding such a
position in exchange for the student's commitment to work for the
enterprise at the completion of the internship.
Sec. 5709.63. (A) With the consent of the legislative
authority of each affected municipal corporation or of a board of
township trustees, a board of county commissioners may, in the
manner set forth in section 5709.62 of the Revised Code,
designate one or more areas in one or more municipal corporations
or in unincorporated areas of the county as proposed
enterprise zones. A board of county commissioners
may designate no more than one area within a township, or within
adjacent townships, as a proposed enterprise zone. The board shall
petition the director of development for certification of the
area as having the characteristics set forth in division (A)(1) or (2) of
section 5709.61 of the Revised Code as amended by Substitute Senate Bill No.
19 of the 120th general assembly. Except as otherwise provided in division
(D) of this section, on and after July 1, 1994, boards of county commissioners
shall not enter into agreements under this section unless the board has
petitioned the director and the director has certified the zone under this
section as amended by that act; however, all agreements entered into under
this section as it existed prior to July 1, 1994, and the incentives granted
under those agreements shall remain in effect for the period agreed to under
those agreements. The director shall make the
determination in the manner provided under section 5709.62 of the
Revised Code. Any enterprise wishing to enter into an agreement
with the board under division (B) or (D) of this section shall submit a
proposal to the
board on the form and accompanied by the application fee prescribed under
division (B) of section
5709.62 of the Revised Code. The enterprise shall review and update the
estimates and listings required by the form in the manner
required under that division. The board may, on a separate form
and at any time, require any additional information necessary to
determine whether an enterprise is in compliance with an
agreement and to collect the information required to be reported under section
5709.68 of the Revised Code.
(B) If the board of county commissioners finds that an
enterprise submitting a proposal is qualified by financial
responsibility and business experience to create and preserve
employment opportunities in the zone and to improve the economic
climate of the municipal corporation or municipal corporations or
the unincorporated areas in which the zone is located and to
which the proposal applies, the board, on or before June 30,
1999, and with the consent of the
legislative authority
of each
affected municipal corporation or of the board of township
trustees may do either of the following:
(1) Enter into an agreement with the enterprise under
which the enterprise agrees to establish, expand, renovate, or
occupy a facility in the zone and hire new employees, or preserve
employment opportunities for existing employees, in return for
the following incentives:
(a) When the facility is located in a municipal
corporation, the board may enter into an agreement for one or
more of the incentives provided in division (C) of section
5709.62 of the Revised Code, subject to division (D) of that section;
(b) When the facility is located in an unincorporated
area, the board may enter into an agreement for one or more of
the following incentives:
(i) Exemption for a specified number of years, not to
exceed ten, of a specified portion, up to sixty per cent,
of the assessed value of tangible personal property first used in business at
a project
site as a result of the agreement. An exemption granted pursuant
to this division applies to inventory required to be listed
pursuant to sections 5711.15 and 5711.16 of the Revised Code,
except, in the instance of an expansion or other situations in
which an enterprise was in business at the facility prior to the
establishment of the zone, the inventory which THAT is exempt is
that
amount or value of inventory in excess of the amount or value of
inventory required to be listed in the personal property tax
return of the enterprise in the return for the tax year in which
the agreement is entered into.
(ii) Exemption for a specified number of years, not to
exceed ten, of a specified portion, up to sixty per cent,
of the increase in the assessed valuation of real property constituting the
project site subsequent to formal approval of the agreement by the board;
(iii) Provision for a specified number of years, not to
exceed ten, of any optional services or assistance the board is
authorized to provide with regard to the project site;
(iv) The incentive described in division (C)(2) of section 5709.62 of the
Revised Code.
(2) Enter into an agreement with an enterprise that plans
to purchase and operate a large manufacturing facility that has
ceased operation or has announced its intention to cease
operation, in return for exemption for a specified number of
years, not to exceed ten, of a specified portion, up to one
hundred per cent, of tangible personal property used in business
at the project site as a result of the agreement, or of real
property constituting the project site, or both.
(C)(1) Notwithstanding divisions (B)(1)(b)(i) and (ii) of this
section,
the
portion of the assessed value of tangible personal property or of the increase
in the assessed valuation of real property exempted from taxation under those
divisions may exceed sixty per cent in any year for which that portion is
exempted if the average percentage exempted for all years in which the
agreement is in effect does not exceed fifty per cent, or if the board of
education of the city, local, or exempted village school district within the
territory of which the property is or will be located approves a percentage in
excess of sixty per cent. For the purpose of obtaining such approval, the
board of commissioners shall deliver to the board of education a notice
not later than forty-five days prior to approving
the
agreement, excluding Saturdays,
Sundays, and legal holidays as defined in
section 1.14 of the Revised
Code. The notice shall
state the
percentage to be exempted, an estimate of the true value of the property to be
exempted, and the number of years the property is to be exempted. The board
of education, by resolution adopted by a majority of the board, shall approve
or disapprove the agreement and certify a copy of the resolution to the board
of commissioners not later than fourteen days prior to the date stipulated by
the board of commissioners as the date upon which approval of the agreement is
to be formally considered by the board of commissioners. The board of
education may include in the resolution conditions under which the board would
approve the agreement, including the execution of an agreement to compensate
the school district under division (B) of section 5709.82 of the Revised Code.
The board of
county commissioners may approve the agreement at any time after
the board of education certifies its resolution approving the
agreement to the board of county commissioners, or, if the board
of education approves the agreement conditionally, at any time
after the conditions are agreed to by the board of education and
the board of county commissioners.
If a board of education has adopted a resolution waiving
its right to approve agreements and the resolution
remains in effect, approval of an agreement by the
board of education is not required under division (C) of this
section. If a board of
education has adopted a resolution allowing a board of county commissioners to
deliver the notice required under this division
fewer than forty-five business days prior to approval
of the agreement by the board of county commissioners, the board of county
commissioners shall deliver the notice to the board of education not later
than
the number of days prior to such approval as prescribed by the
board of education in its resolution. If a board of education adopts a
resolution waiving its right to approve agreements or shortening
the notification period, the board of education shall certify a copy of the
resolution to the board of county commissioners. If the board of
education rescinds such a resolution, it shall certify notice of
the rescission to the board of county commissioners.
(2) The board of county commissioners shall comply with section
5709.83 of the Revised
Code unless the board of
education has adopted a resolution under that section waiving
its right to receive such notice.
(D) This division applies to zones certified by the director of development
under this section prior to
July 22, 1994.
On or before
June 30, 1999, and with the consent of
the legislative
authority of each affected municipal corporation or board of township trustees
of each affected township, the board of commissioners that designated a zone
to which this division applies may enter into an agreement with an enterprise
if the board makes the finding required under that division and determines
that the enterprise satisfies one of the criteria described in divisions
(D)(1) to (5) of this section:
(1) The enterprise currently has no operations in this state and, subject to
approval of the agreement, intends to establish operations in the zone;
(2) The enterprise currently has operations in this state and, subject to
approval of the agreement, intends to establish operations at a new location
in the zone that would not result in a reduction in the number of employee
positions at any of the enterprise's other locations in this state;
(3) The enterprise, subject to approval of the agreement, intends to relocate
operations, currently located in another state, to the zone;
(4) The enterprise, subject to approval of the agreement, intends to expand
operations at an existing site in the zone that the enterprise currently
operates;
(5) The enterprise, subject to approval of the agreement, intends to relocate
operations, currently located in this state, to the zone, and the director of
development has issued a waiver for the enterprise under division (B) of
section 5709.633 of the Revised Code.
The agreement shall require the enterprise to agree to establish, expand,
renovate, or occupy a facility in the zone and hire new employees, or preserve
employment opportunities for existing employees, in return for one or more of
the incentives described in division (B) of this section.
(E) All agreements entered into under this section shall be in the form
prescribed under section 5709.631 of the Revised Code. After an agreement
under this section is entered into, if the board of county commissioners
revokes its designation of the zone, or if the director of development revokes
the zone's certification, any entitlements granted under the agreement shall
continue for the number of years specified in the agreement.
(F) Except as otherwise provided in this paragraph, an agreement entered into
under this section shall require that the enterprise pay an annual fee equal
to the greater of one per cent of the dollar value of incentives offered under
the agreement or five hundred dollars; provided, however, that if the value of
the incentives exceeds two hundred fifty thousand dollars, the fee shall not
exceed two thousand five hundred dollars. The fee shall be payable to the
board of commissioners once per year for each year the agreement is effective
on the days and in the form specified in the agreement. Fees paid shall be
deposited in a special fund created for such purpose by the board and shall be
used by the board exclusively for the purpose of complying with section
5709.68 of the Revised Code and by the tax incentive review council created
under section 5709.85 of the Revised Code exclusively for the purposes of
performing the duties prescribed under that section. The board may waive or
reduce the amount of the fee charged against an enterprise, but such waiver or
reduction does not affect the obligations of the board or the tax incentive
review council to comply with section 5709.68 or 5709.85 of the Revised Code,
respectively.
(G) With the approval of the legislative authority of a municipal corporation
or the board of township trustees of a township in which a zone is designated
under division (A) of this section, the board of county commissioners may
delegate to that legislative authority or board any powers and duties of the
board to negotiate and administer agreements with regard to that zone under
this section.
(H) When an agreement is entered into pursuant to this section, the
legislative authority authorizing the agreement shall forward a copy of the
agreement to the director of development and to the tax commissioner within
fifteen days after the agreement is entered into.
(I) After an agreement is entered into, the enterprise shall file with each
personal property tax return required to be filed, OR ANNUAL REPORT
THAT IS REQUIRED TO BE FILED UNDER SECTION 5727.08 OF THE REVISED
CODE, while the agreement is in
effect, an informational return, on a form prescribed by the tax commissioner
for that purpose, setting forth separately the property, and related costs and
values, exempted from taxation under the agreement.
(J) Enterprises may agree to give preference to residents of the zone within
which the agreement applies relative to residents of this state who do not
reside in the zone when hiring new employees under the agreement.
(K) An agreement entered into under this section may include a provision
requiring the enterprise to create one or more temporary internship positions
for students enrolled in a course of study at a school or other educational
institution in the vicinity, and to create a scholarship or provide another
form of educational financial assistance for students holding such a position
in exchange for the student's commitment to work for the enterprise at the
completion of the internship.
Sec. 5709.631. Each agreement entered into under sections
5709.62, 5709.63, and 5709.632 of the Revised Code on or after
April 1, 1994, shall be in writing and shall include all of the
information and statements prescribed by this section.
Agreements may include terms not prescribed by this section, but
such terms shall in no way derogate from the information and
statements prescribed by this section.
(A) Each agreement shall include the following
information:
(1) The names of all parties to the agreement;
(2) A description of the investments to be made by the
applicant enterprise or by another party at the facility whether
or not the investments are exempted from taxation, including
existing or new building size and cost thereof; the value of
machinery, equipment, furniture, and fixtures, including an
itemization of the value of machinery, equipment, furniture, and
fixtures used at another location in this state prior to the
agreement and relocated or to be relocated from that location to
the facility and the value of machinery, equipment, furniture,
and fixtures at the facility prior to the execution of the
agreement that will not be exempted from taxation; the value of
inventory at the facility, including an itemization of the value
of inventory held at another location in this state prior to the
agreement and relocated or to be relocated from that location to
the facility, and the value of inventory held at the facility
prior to the execution of the agreement that will not be exempted
from taxation;
(3) The scheduled starting and completion dates of
investments made in building, machinery, equipment, furniture,
fixtures, and inventory;
(4) Estimates of the number of employee positions to be
created each year of the agreement and of the number of employee
positions retained by the applicant enterprise due to the
project, itemized as to the number of full-time, part-time,
permanent, and temporary positions;
(5) Estimates of the dollar amount of payroll attributable
to the positions set forth in division (A)(4) of this section,
similarly itemized;
(6) The number of employee positions, if any, at the
project site and at any other location in the state at the time
the agreement is executed, itemized as to the number of
full-time, part-time, permanent, and temporary positions.
(B) Each agreement shall set forth the following
information and incorporate the following statements:
(1) A description of real property to be exempted from
taxation under the agreement, the percentage of the assessed
valuation of the real property exempted from taxation, and the
period for which the exemption is granted, accompanied by the
statement: "The exemption commences the first year for which the
real property would first be taxable were that property not
exempted from taxation. No exemption shall commence after
.......... (insert date) nor extend beyond .......... (insert
date)." The tax commissioner shall adopt rules prescribing the
form the description of such property shall assume in order to
ensure that the property to be exempted from taxation under the
agreement is distinguishable from property that is not to be
exempted under that agreement.
(2) A description of tangible personal property to be
exempted from taxation under the agreement, the percentage of the
assessed value of the tangible personal property exempted from
taxation, and the period for which the exemption is granted,
accompanied by the statement: "The exemption commences the first
year for which the tangible personal property would first be
taxable were that property not exempted from taxation. No
exemption shall commence after .......... (insert date) nor
extend beyond .......... (insert date)." The tax commissioner
shall adopt rules prescribing the form the description of such
property shall assume in order to ensure that the property to be
exempted from taxation under the agreement is distinguishable
from property that is not to be exempted under that agreement.
(3) ".......... (insert name of enterprise) shall pay such
real and tangible personal property taxes as are not exempted
under this agreement and are charged against such property and
shall file all tax reports and returns as required by law. If
.......... (insert name of enterprise) fails to pay such taxes or
file such returns and reports, all incentives granted under this
agreement are rescinded beginning with the year for which such
taxes are charged or such reports or returns are required to be
filed and thereafter."
(4) ".......... (insert name of enterprise) hereby
certifies that at the time this agreement is executed, ..........
(insert name of enterprise) does not owe any delinquent real or
tangible personal property taxes to any taxing authority of the
State of Ohio, and does not owe delinquent taxes for which
.......... (insert name of enterprise) is liable under Chapter 5727.,
5733., 5735., 5739., 5741., 5743., 5747., or 5753. of the Revised
Code, or, if such delinquent taxes are owed, .......... (insert
name of enterprise) currently is paying the delinquent taxes
pursuant to an undertaking enforceable by the State of Ohio or an
agent or instrumentality thereof, has filed a petition in
bankruptcy under 11 U.S.C.A. 101, et seq., or such a petition has
been filed against .......... (insert name of enterprise). For
the purposes of the certification, delinquent taxes are taxes
that remain unpaid on the latest day prescribed for payment
without penalty under the chapter of the Revised Code governing
payment of those taxes."
(5) ".......... (insert name of municipal corporation or
county) shall perform such acts as are reasonably necessary or
appropriate to effect, claim, reserve, and maintain exemptions
from taxation granted under this agreement including, without
limitation, joining in the execution of all documentation and
providing any necessary certificates required in connection with
such exemptions."
(6) "If for any reason the enterprise zone designation
expires, the Director of the Ohio Department of Development
revokes certification of the zone, or .......... (insert name of
municipal corporation or county) revokes the designation of the
zone, entitlements granted under this agreement shall continue
for the number of years specified under this agreement, unless
.......... (insert name of enterprise) materially fails to
fulfill its obligations under this agreement and ..........
(insert name of municipal corporation or county) terminates or
modifies the exemptions from taxation granted under this
agreement."
(7) "If .......... (insert name of enterprise) materially
fails to fulfill its obligations under this agreement, or if
.......... (insert name of municipal corporation or county)
determines that the certification as to delinquent taxes required
by this agreement is fraudulent, .......... (insert name of
municipal corporation or county) may terminate or modify the
exemptions from taxation granted under this agreement."
(8) ".......... (insert name of enterprise) shall provide
to the proper tax incentive review council any information
reasonably required by the council to evaluate the enterprise's
compliance with the agreement, including returns OR ANNUAL REPORTS
filed pursuant
to section 5711.02 OR 5727.08 of the Ohio Revised Code if
requested by the
council."
(9) ".......... (insert name of enterprise) and ..........
(insert name of municipal corporation or county) acknowledge that
this agreement must be approved by formal action of the
legislative authority of .......... (insert name of municipal
corporation or county) as a condition for the agreement to take
effect. This agreement takes effect upon such approval."
(10) "This agreement is not transferable or assignable
without the express, written approval of .......... (insert name
of municipal corporation or county)."
(11) "Exemptions from taxation granted under this
agreement shall be revoked if it is determined that
............... (insert name of enterprise), any successor
enterprise, or any related member (as those terms are defined in
section 5709.61 of the Ohio Revised Code) has violated the
prohibition against entering into this agreement under division
(E) of section 3735.671 or section 5709.62, 5709.63, or 5709.632
of the Ohio Revised Code prior to the time prescribed by that
division or either of those sections."
The statement described in division (B)(7) of this section
may include the following statement, appended at the end of the
statement: "and may require the repayment of the amount of taxes
that would have been payable had the property not been exempted
from taxation under this agreement."
(C) If the director of development had to issue a waiver
under section 5709.633 of the Revised Code as a condition for the
agreement to be executed, the agreement shall include the
following statement:
"Continuation of this agreement is subject to the validity
of the circumstance upon which .......... (insert name of
enterprise) applied for, and the Director of the Ohio Department
of Development issued, the waiver pursuant to section 5709.633 of
the Ohio Revised Code. If, after formal approval of this
agreement by .......... (insert name of municipal corporation or
county), the Director or ............. (insert name of municipal
corporation or county) discovers that such a circumstance did not
exist, ........... (insert name of enterprise) shall be deemed to
have materially failed to comply with this agreement."
If the director issued a waiver on the basis of the
circumstance described in division (B)(3) of section 5709.633 of
the Ohio Revised Code, the conditions enumerated in divisions
(B)(3)(a)(i) and (ii) or divisions (B)(3)(b)(i) and (ii) of that
section shall be incorporated in the information described in
divisions (A)(2), (3), and (4) of this section.
Sec. 5723.06. (A)(1) The county auditor, on the day set
for the sale of forfeited lands provided in section 5723.04 of
the Revised Code, shall attend at the courthouse and offer for
sale the whole of each tract of land as contained in the list
provided for in such section, at public auction, to the highest
bidder, for an amount sufficient to pay the lesser of the amounts
described in divisions (A)(1) and (2) of section 5721.16 of the
Revised Code.
The county auditor shall offer each tract separately, beginning with
the
first tract contained in the list.
(2) If no bid is received for any of the tracts in an
amount sufficient to pay the required amount, and no notice is
given under section 5722.04 of the Revised Code or division (B)
of this section, the auditor may offer such tract for sale
forthwith, and sell it for the best price obtainable. The county
auditor shall continue through such list and may adjourn the sale from day to
day until the county auditor has disposed of or offered for sale
each tract of
land specified in the notice. The county auditor may offer a tract
of land two
or more times at the same sale.
(3) Notwithstanding the minimum sales price provisions of
divisions (A)(1) and (2) of this section to the contrary,
forfeited lands sold pursuant to this section shall not be sold
for IN EITHER OF THE FOLLOWING CIRCUMSTANCES:
(a) TO ANY PERSON THAT IS DELINQUENT ON REAL PROPERTY TAXES IN
THIS STATE;
(b) FOR less than the total amount of the taxes, assessments,
penalties, interest, and costs that stand charged against the
land if the highest bidder is the owner of record of the parcel
immediately prior to the judgment of foreclosure or foreclosure
and forfeiture, or a member of the following class of parties
connected to that owner: a member of that owner's immediate
family, a person with a power of attorney appointed by that owner
who subsequently transfers the parcel to the owner, a sole
proprietorship owned by that owner or a member of that owner's
immediate
family, or a partnership, trust, business trust, corporation, or
association in which the owner or a member of the owner's immediate
family owns or controls directly or indirectly more than fifty
per cent. If
IF a parcel sells for less than the total amount of
the taxes, assessments, penalties, interest, and costs that stand
charged against it, the officer conducting the sale shall require
the buyer to complete an affidavit prepared by the officer stating that the
buyer is not
the owner of record immediately prior to the judgment of
foreclosure or foreclosure and forfeiture, or a member of the
specified class of parties connected to that owner, and the
affidavit shall become part of the court records of the
proceeding. If the county auditor discovers
within three
years
after the date of the sale that a parcel was sold to that owner
or a member of the specified class of parties connected to that
owner for a price less than the amount so described, and if the
parcel is still owned by that owner or a member of the specified
class of parties connected to that owner, the auditor within
thirty days after such discovery shall add the difference between
that amount and the sale price to the amount of taxes that then
stand charged against the parcel and is payable at the next
succeeding date for payment of real property taxes. As used in
this paragraph, "immediate family" means a spouse who resides in
the same household and children.
(B) The director of natural resources may give written
notice to the auditor prior to the time of the sale of the
director's
intention to purchase forfeited land for the state. Such notice
is a legal minimum bid at the time of the sale, and, if no bid is
received in an amount sufficient to pay the lesser of the amounts
described in divisions (A)(1) and (2) of section 5721.16 of the
Revised Code, the land is deemed sold to the state for no
consideration. The director of natural resources shall record
the deed.
(C) The sale of forfeited land under this section conveys
the title to the tract or parcel of land, divested of all
liability for any taxes, assessments, charges, penalties,
interest, and costs due at the time of sale that remain after
applying the amount for which it was sold, except as otherwise
provided in division (D) of this section.
(D) If the parcel is sold for the amount described in
division (A)(2) of section 5721.16 of the Revised Code, and the
county treasurer's estimate of that amount exceeds the amount of
taxes, assessments, interest, penalties, and costs actually
payable when the deed is transferred to the purchaser, the county
auditor shall refund to the purchaser the difference between the
estimate and the amount actually payable. If the amount of taxes,
assessments, interest, penalties, and costs actually payable when
the deed is transferred to the purchaser exceeds the county
treasurer's estimate, the county auditor shall certify the amount
of the excess to the treasurer, who shall enter that amount on
the real and public utility property tax duplicate opposite the
property; the amount of the excess shall be payable at the next
succeeding date prescribed for payment of taxes in section 323.12
of the Revised Code.
Section 2. That existing sections 5709.61, 5709.62, 5709.63,
5709.631, and 5723.06 of the Revised Code are hereby repealed.
Section 3. As used in this section, "qualified property" means
real and tangible personal property that satisfies the
qualifications for tax exemption under the terms of section
3313.44, 5709.07, 5709.08, 5709.10, 5709.12, 5709.121, or 5709.14 of the
Revised Code.
Notwithstanding section 5713.081 of the Revised Code, when qualified property
has not received tax exemption
due to a failure to comply with Chapter 5713. or section
5715.27 of
the
Revised Code, the owner of the property, at any time on or before six months
after the effective date of this section, may file with the Tax Commissioner
an application requesting that the property be placed on the tax exempt list
and that all unpaid taxes, penalties, and interest on the property be abated.
The application shall be made on the form prescribed by the Tax Commissioner
under section 5715.27 of the Revised Code and shall list the name of the
county in which the property is located; the property's legal description; its
taxable value; the amount in dollars of the unpaid taxes, penalties, and
interest; the date of acquisition of title to the property; the use of the
property during any time that the unpaid taxes accrued; and any other
information required by the commissioner. The county auditor shall supply the
required information upon request of the applicant.
Upon request of the applicant, the county treasurer shall
determine if all taxes, penalties, and interest that became a
lien on the qualified property before it first was used for an exempt
purpose and all special assessments charged against the property
have been paid in full. If so, the county treasurer shall issue
a certificate to the applicant stating that all such taxes,
penalties, interest, and assessments have been paid in full.
Prior to filing the application with the Tax Commissioner, the
applicant shall attach the county treasurer's certificate to it.
The commissioner shall not consider an application filed under this
section unless such a certificate is attached to it.
Upon receipt of the application and after consideration of it, the Tax
Commissioner shall determine if the applicant meets the qualifications set
forth in this section, and if so shall issue an order directing that the
property be placed on the tax exempt list of the county and that all unpaid
taxes, penalties, and interest for every year the property met the
qualifications for exemption described in section 3313.44, 5709.07, 5709.08,
5709.10, 5709.12, 5709.121, or 5709.14 of the
Revised Code
be abated. If the commissioner finds that the property is not now being so
used or is being used for a purpose that would foreclose its right to tax
exemption, the commissioner shall issue an order denying the application.
If the Tax Commissioner finds that the property is not entitled to tax
exemption and to the abatement of unpaid taxes, penalties, and interest for
any of the years for which the owner claims an exemption or abatement, the
commissioner shall order the county treasurer of the county in which property
is located to collect all taxes, penalties, and interest due on the property
for those years in accordance with law.
The Tax Commissioner may apply this section to any qualified property that is
the subject of an application for exemption pending before the commissioner on
the effective date of this section, without requiring the property owner to
file an additional application. The commissioner also may apply this
section to any qualified property that is the subject of an application for
exemption filed on or after the effective date of this section and on or
before six months after that effective date, even though the application does
not expressly request abatement of unpaid taxes.
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