To enact sections 730.01 to 730.12, 3310.70 to 3310.79, and 5709.45 of the Revised Code to permit the creation of urban homestead zones in cities to encourage the repopulation of certain city cores, to create a state urban homestead scholarship program, and to require tax increment financing in urban homestead zones that participate in the scholarship program to help fund the program.

Section 1. That sections 730.01, 730.02, 730.03, 730.04, 730.05, 730.06, 730.07, 730.08, 730.09, 730.10, 730.11, 730.12, 3310.70, 3310.71, 3310.72, 3310.73, 3310.74, 3310.75, 3310.76, 3310.77, 3310.78, 3310.79, and 5709.45 of the Revised Code be enacted to read as follows:

Sec. 730.01.  As used in this chapter, "property owner" means an owner of a single parcel of real property, and refers collectively to all persons with a joint or common ownership interest in a single parcel of real property.

Sec. 730.02.  (A) An urban homestead zone may be created within the boundaries of a city for the purpose of encouraging repopulation of the area within the city's urban core.

(B) An "urban homestead zone" shall meet all the following criteria:

(1) The zone is contiguous and its shape cannot be characterized as being merely a strip or corridor or as resembling in shape a shoestring or a balloon on a string;

(2) The size of the zone is at least ten acres but not more than one hundred fifty acres;

(3) The zone does not divide any voting precincts;

(4) At least eighty-five per cent of the area in the zone is zoned for residential use;

(5) The zone includes at least sixteen parcels of real property; and

(6) At the time the zone is proposed, all the following apply to the zone:

(a) Its population has decreased by at least ten per cent in the period between the two most recent federal decennial censuses, as reflected in data gathered for those censuses;

(b) Its rate of poverty exceeds the rate of poverty of the city in which the zone is located by at least ten per cent, as reflected in data gathered for the most recent federal decennial census; and

(c) Its homeownership rate has decreased by at least ten per cent in the period between the two most recent federal decennial censuses, as reflected in data gathered for those censuses.

(C) More than one urban homestead zone may be created within a city so long as not more than one hundred fifty acres of the city in total are within an urban homestead zone at any time. A parcel of real property may not be included within more than one urban homestead zone at a time.

(D) Urban homestead zones are not political subdivisions of the state or state agencies, but are subject to sections 121.22 and 121.23 of the Revised Code as if they were political subdivisions or state agencies.

Sec. 730.03.  (A) An urban homestead zone shall be organized as a nonprofit corporation under Chapter 1702. of the Revised Code, except as otherwise provided in this chapter. In addition to meeting the requirements for articles of incorporation set forth in Chapter 1702. of the Revised Code, the articles of incorporation of an urban homestead zone shall include all the following:

(1) The name of the zone, which shall include the phrase "of the city of" immediately followed by the name of the city in which the zone is located;

(2) A description of the boundaries of, and of the area within, the zone that is sufficiently specific to enable real property owners to determine if their property is located within the zone;

(3) A description of the procedure by which the articles of incorporation may be amended;

(4) The method by which notice of meetings of the membership of the zone is to be given and the method by which the membership of the zone may vote; and

(5) The purposes for which the zone is being created, which, for zones located within a big eight school district, shall include an opportunity for qualified homeowners to participate in the urban homestead scholarship program under sections 3310.70 to 3310.79 of the Revised Code.

The procedure by which the articles of incorporation may be amended shall require that the amendment be approved by the city's legislative authority by resolution, and that the approved amendment and resolution be filed with the secretary of state and the department of development.

(B)(1) The articles of incorporation shall be submitted to the legislative authority of the city in which the proposed urban homestead zone is to be located, and shall be accompanied by a petition signed by at least fifty per cent of the property owners within the proposed urban homestead zone, including at least twenty-five per cent of the property owners in the proposed urban homestead zone who also are electors in the proposed zone. A petition is not valid unless it has at least eight petitioners.

(2) The legislative authority shall send the petition and the articles of incorporation to the department of development. The director of development, within sixty days after receiving the petition and articles, shall determine whether the proposed urban homestead zone meets the criteria to be an urban homestead zone and shall return to the city's legislative authority the petition, the articles of incorporation, and the director's written determination that the area meets those criteria or, if it does not, which of the criteria are not met.

(3) If the director of development determines that one or more of the criteria have not been met, the city's legislative authority shall inform the petitioners. If the director determines that the criteria have been met, the legislative authority shall determine if the proposed urban homestead zone meets the criterion to be an urban homestead zone stated in division (B)(6)(c) of section 730.02 of the Revised Code and if, with its creation, not more than one hundred fifty acres of the city would be within an urban homestead zone. If the legislative authority determines that that criterion has been met and that that limitation has been satisfied, the legislative authority, by resolution, shall approve or deny the petition, including the associated articles of incorporation. If the zone is approved and located within a big eight school district as described in section 3314.02 of the Revised Code, the legislative authority also shall provide for payments in lieu of taxes as provided in section 5709.45 of the Revised Code. If the zone is approved, a copy of the resolution approving the zone and the articles of incorporation shall be filed with the secretary of state and the department of development.

Sec. 730.04.  The governing body of an urban homestead zone is the board of directors of the nonprofit corporation. The board shall consist of at least five directors. One director shall be appointed by the city's legislative authority. The other directors shall be elected at a meeting of the entire membership of the urban homestead zone. All subsequent elections of these directors shall be held at a November meeting of the membership.

Membership on the board of directors shall not be considered holding a public office. The directors and their proxies are entitled to the immunities provided by Chapter 1702. of the Revised Code for directors of a nonprofit corporation, unless a director or proxy is an employee or official of the city and is acting on the board within the scope of the employee's or official's employment or official responsibilities. Such a director or proxy is entitled to the same immunity as an employee under division (A)(6) of section 2744.03 of the Revised Code.

The board shall elect its chairperson, vice-chairperson, secretary, and treasurer. These officers serve at the board's pleasure. A director may be elected to more than one office, except that the director elected as treasurer shall not be elected to any other office.

Sec. 730.05. At its first meeting, the board of directors shall prepare and adopt a general plan for the urban homestead zone, which may include any or all of the following:

(A) Adoption of a security guard force as provided in section 730.09 of the Revised Code;

(B) Election of an ombudsperson to act as a liaison between the city's zoning inspector and the residents and property owners in the zone on issues related to zoning, building, and other related regulations in the zone;

(C) Organization of festivals, concerts, or other community-related events to promote the zone and provide activities that benefit the zone's residents; or

(D) Within the zone, if applicable, promotion of and support for the urban homestead scholarship program established in sections 3310.70 to 3310.79 of the Revised Code, including application assistance for qualified homeowners of the zone.

The board of directors may amend the general plan.

Sec. 730.06.  (A) All records of an urban homestead zone are, and shall be treated as, public records under section 149.43 of the Revised Code, except that records of organizations contracting with a zone shall not be considered to be public records under section 149.43 or 149.431 of the Revised Code solely because of the contract with the zone.

(B) The board of directors of an urban homestead zone shall adopt rules prescribing competitive bidding procedures for contracts it awards. The rules shall require advertising for bids and specify the bidding procedures to be followed, and may specify conditions under which competitive bidding is not required and other conditions, such as establishing a dollar limit per contract or specifying particular parties to a contract. The procedures may differ from competitive bidding procedures applicable to the city in which the zone is located.

Sec. 730.07.  By the first day of March each year, the treasurer of the board of directors of an urban homestead zone shall submit a report of the zone's activities and financial condition for the previous year to each member of the zone and to the legislative authority of the city.

Sec. 730.08.  (A) Each property owner within an urban homestead zone is a member of the zone. The identity and address of the owners shall be determined for any particular action of the nonprofit corporation that governs the zone, including notice of meetings of the entire membership of the zone, not more than sixty days before the date of the action, from the most current records available at the county auditor's office.

(B) Notice of the time, date, and place, and of the agenda for, any meeting of the board of directors of an urban homestead zone shall be given to each director by written notice sent by certified mail or personal service, or by text message transmitted by electronic device. If possible, the notice shall be transmitted at least one week before the meeting.

The board shall act by a majority vote of those present at any meeting of which proper notice has been transmitted.

(C) A director or a member of the zone may appoint a proxy to carry out the director's or member's rights and responsibilities under this chapter at a meeting of the entire membership of the urban homestead zone by filing a written proxy form with the secretary of the board of directors at least three days before the meeting. The form shall include the name and address of the director or member, the name and address of the proxy, and the date of the meeting at which the proxy may carry out the rights and responsibilities of the director or member.

A member of the zone also may appoint a designee to carry out the member's rights and responsibilities under this chapter by filing a written designation form with the secretary of the board of directors. The designation form shall include the name and address of the member, the name and address of the designee, and the expiration date, if any, of the designation, and may authorize the designee to vote at any zone meeting.

A proxy or designee need not be an elector or resident of the urban homestead zone or the city. The appointment of a proxy or designee may be changed by filing a new form with the secretary of the board of directors. The most current form filed with the secretary is the valid appointment. Transmittal of any notice to a proxy or designee at the proxy's or designee's address as shown on that form satisfies any requirements for notification of the director or member of the zone.

Sec. 730.09.  (A) The board of directors of an urban homestead zone may adopt a written plan for a security guard force for the zone. Each plan shall include all of the following:

(1) Specific requirements for and functions of the force;

(2) A method of assessment to be used to pay for the force and the period of time the assessments are to be levied; and

(3) The period of time that the force is to provide services.

(B) When the board of directors adopts a security guard plan, it shall submit the plan to the legislative authority of the city for review. Within sixty days after the date the plan is submitted to the legislative authority, the legislative authority may submit to the board of directors its comments and recommendations on the plan. After reviewing the comments and recommendations, the board of directors may amend the plan.

The board of directors next shall submit the plan, whether amended or not, in the form of a petition to the members of the urban homestead zone. Once the petition is signed by a majority of the members, it shall be submitted to the legislative authority for approval.

The legislative authority, by resolution, shall approve or reject a submitted petition within sixty days after receiving it. If the petition is approved, the plan shall be effective at the earliest date on which a nonemergency resolution or ordinance of the legislative authority may become effective.

(C) When a security guard plan is in effect, the city's legislative authority shall levy, by special assessment upon all members of the urban homestead zone, the costs of the plan in accordance with the procedures set forth in Chapter 727. of the Revised Code, except that the assessment may be levied only by one or both of the methods listed in divisions (A) and (B) of section 727.01 of the Revised Code. Property owners assessed under this section are entitled to all the rights and privileges of property owners assessed under Chapter 727. of the Revised Code, including the rights and privileges specified in sections 727.15 to 727.17 and 727.18 to 727.22 of the Revised Code and the right to notice of the resolution of necessity and the filing of the estimated assessment under section 727.13 of the Revised Code. The legislative authority shall notify the tax commissioner of any assessments.

The costs of a security guard plan may include any or all of the following:

(1) The cost of creating and operating the urban homestead zone under this chapter, including creating and operating the nonprofit corporation governing the zone, hiring employees and professional services, contracting for insurance, and purchasing or leasing office space or office equipment;

(2) The cost of planning and implementing the plan, including payment of legal, insurance, and planning fees and expenses;

(3) Court costs incurred by the zone in implementing the plan; and

(4) Damages resulting from implementing the plan.

Sec. 730.10.  An owner of a fee interest in real property located within an urban homestead zone who enters into a contract to transfer the interest shall give to the transferee within the specified period of time all of the following:

(A) Within five days after entering into the contract, any notice for special assessments under this chapter that the owner received within ninety days before entering into the contract;

(B) Within five days after its receipt, each notice for special assessments under this chapter that the owner receives after entering into the contract and until it is completely performed or terminates; and

(C) Within five days after entering into the contract, when applicable, notice that resident owners may qualify to participate in the urban homestead scholarship program.

Sec. 730.11. (A) After twenty years of existence, an urban homestead zone is dissolved.

(B) An urban homestead zone may be dissolved before twenty years have expired. The dissolution shall be initiated by a petition that is signed by members of the urban homestead zone who own at least twenty per cent of the real property located in the zone. The petition shall be filed with the legislative authority of the city. Not later than forty-five days after the petition is filed, the members of the zone shall meet to consider the petition. Notice of the meeting shall be given as provided in division (B) of section 730.08 of the Revised Code. Upon the affirmative vote at the meeting of members who collectively own more than fifty per cent of the taxable value established by the county auditor for purposes of real estate taxation of the real property in the zone, the zone shall be dissolved. The results of the vote shall be certified to the legislative authority. If the vote is to dissolve the zone, the legislative authority, by resolution, shall dissolve the zone. The legislative authority shall send a certified copy of the resolution to the secretary of state, the department of development, and the department of education.

(C) No rights or obligations of any person under any contract, or in relation to any assessments made under this chapter, are affected by the dissolution of an urban homestead zone, except with the consent of that person or by order of a court with jurisdiction over the matter. Upon a zone's dissolution, any assets or rights of the zone, after payment of all obligations of the zone, shall be deposited in a special account of the city.

Sec. 730.12. Any service provided to an urban homestead zone under this chapter shall be in addition to, and not in lieu of, any public services otherwise provided by the city. A city may not rely on the services provided to an urban homestead zone under a general plan, a security guard plan, or any other plan adopted by the board of directors of the zone when deciding whether to provide public services or whether to reduce or increase public services otherwise provided by the city to the zone.

Sec. 3310.70. As used in sections 3310.70 to 3310.79 of the Revised Code:

(A) "Big eight school district" has the same meaning as in section 3314.02 of the Revised Code.

(B) "Chartered nonpublic school" means a nonpublic school that holds a valid charter issued by the state board of education under section 3301.16 of the Revised Code and that meets the standards established for those schools in rules adopted by the state board.

(C) "Qualified child" means the child of a qualified homeowner who is entitled under section 3313.64 or 3313.65 of the Revised Code to attend school in a big eight school district and who is enrolled in a chartered nonpublic school.

(D) "Qualified homeowner" means the owner and occupant of a qualifying residence.

(E) "Qualifying residence" means a residence for which both of the following conditions are satisfied:

(1) The residence is located in both an urban homestead zone established under Chapter 730. of the Revised Code and a big eight school district; and

(2) The owner and occupant or a predecessor owner and occupant of the residence or a combination of them has spent not less than one hundred twenty thousand dollars in improvements on the residence since the urban homestead zone was established.

(F) "School year" has the same meaning as in section 3313.62 of the Revised Code.

Sec. 3310.71.  The urban homestead scholarship program is hereby established. Under the program, in each school year, the department of education, upon certification from the director of development under section 3310.73 of the Revised Code, shall pay a scholarship to a qualified homeowner for each of the homeowner's qualified children, subject to the maximum number of scholarships prescribed by the general assembly for that school year. If the number of students who apply for a scholarship exceeds the number prescribed by the general assembly, the department first shall award scholarships to qualified children who received scholarships in the prior school year, and then shall select qualified children by lot to receive any remaining scholarships.

Sec. 3310.72.  (A) In order to be considered a qualifying residence for purposes of the urban homestead scholarship program, a person who owns a residence in an urban homestead zone shall file with the director of development all of the following:

(1) A certified copy of the deed to the residence;

(2) Documents or forms as prescribed by the director that indicate both of the following:

(a) The residence is located in both an urban homestead zone established under Chapter 730. of the Revised Code and a big eight school district; and

(b) The person applying for the right, or one or more predecessor owners and occupants, or a combination of them, has spent not less than one hundred twenty thousand dollars in improvements on the residence since the urban homestead zone was established;

(3) A certified copy of all building permits related to the improvements on the residence; and

(4) A certified copy of the occupancy permit for the residence.

(B) Upon satisfaction that all documents required under division (A) of this section have been submitted and are authentic, the director of development shall determine whether the residence is a qualifying residence and provide written notice of that determination to the owner.

(C) Qualifying residence status is a property right that runs with the land on which that residence is located for the duration of the urban homestead zone, beginning on the first day of the school year that first succeeds the date the urban homestead zone in which the residence is located was established.

Sec. 3310.73. (A) An owner of a qualifying residence may apply for a scholarship under the urban homestead scholarship program by submitting to the director of development, in the manner prescribed by and before a deadline established by rules adopted under Chapter 119. of the Revised Code, all of the following:

(1) The name of the owner;

(2) The address and legal description of the qualifying residence;

(3) The name of each child for whom a scholarship is sought;

(4) The name and address of the chartered nonpublic school in which each child has been accepted for enrollment and the amount of tuition charged by the school for the school year; and

(5) Any other information required by the director.

(B) The director shall examine the application to determine if the person seeking a scholarship is a qualified homeowner and the child is a qualified child. Upon satisfaction that the person is a qualified homeowner and the child is a qualified child, the director shall certify to the department of education those findings and the information submitted under division (A) of this section. Upon receipt of that information, the department shall pay a scholarship to each qualified homeowner for each qualified child, subject to the maximum number of scholarships prescribed by the general assembly for that school year.

Sec. 3310.74. (A) The amount paid for each qualified child under the urban homestead scholarship program shall be the lesser of the tuition charged by the chartered nonpublic school in which the child is enrolled or the maximum amount prescribed for an educational choice scholarship for the current school year under section 3310.09 of the Revised Code.

(B) The department of education shall pay to each qualified homeowner for each qualified child awarded a scholarship under the program periodic partial payments of the scholarship during the school year at times prescribed by the department.

(C) The department shall proportionately reduce or terminate the payments for any qualified child who withdraws from the chartered nonpublic school in which the child is enrolled before the end of the school year.

Sec. 3310.75. A scholarship awarded and paid under the urban homestead scholarship program shall be used only to pay tuition a qualified homeowner owes to a chartered nonpublic school for the homeowner's qualified children.

Sec. 3310.76. The general assembly shall prescribe for each school year the maximum number of qualified children that may be awarded scholarships under the urban homestead scholarship program.

Sec. 3310.77.  Urban homestead scholarships shall be funded by appropriations of the general assembly and payments collected pursuant to section 5709.45 of the Revised Code. The payments shall be deposited into the state treasury to the credit of the state urban homestead scholarship fund, which is hereby created. Money credited to the fund shall be used solely to pay urban homestead scholarships. The department of education shall adopt procedures for payment of scholarships from the fund.

Sec. 3310.78.  Notwithstanding division (K) of section 3301.0711 of the Revised Code, each chartered nonpublic school that enrolls students awarded and paid scholarships under the urban homestead scholarship program annually shall administer the tests prescribed by section 3301.0710 or 3301.0712 of the Revised Code to each scholarship student under section 3301.0711 of the Revised Code. Each chartered nonpublic school shall report to the department of education the results of each test administered to each scholarship student under this section.

Nothing in this section requires a chartered nonpublic school to administer any achievement test, except for an Ohio graduation test prescribed under division (B) of section 3301.0710 of the Revised Code, as required by section 3313.612 of the Revised Code, to any student enrolled in the school who is not a scholarship student.

Sec. 3310.79. The director of development and the state board of education each shall adopt rules under Chapter 119. of the Revised Code prescribing procedures for the administration of their functions under the urban homestead scholarship program.

Sec. 5709.45.  (A)(1) The legislative authority of a city that has created an urban homestead zone within its boundaries under Chapter 730. of the Revised Code that is located within a big eight school district as defined in section 3314.02 of the Revised Code shall adopt an ordinance for each such zone declaring improvements to parcels within the zone to be a public purpose and exempt from taxation as provided in this section.

(2) The ordinance shall specifically identify each parcel within the zone that is covered by the ordinance and the percentage of the improvements to be exempted, which shall not exceed seventy-five per cent.

(3) The exemption from taxation commences with the tax year in which an improvement first appears on the tax list and duplicate of real and public utility property and ends on the date the urban homestead zone is dissolved, except the ordinance may specify an earlier end date. If an exemption ends during a tax year, the procedure for the apportionment of the taxes for that year is the same as in the case of other changes in tax exemption status during the year.

(B)(1) The legislative authority of the city shall require the owner of a parcel identified in the ordinance to make annual payments in lieu of taxes to the county treasurer on or before the final dates for payment of real property taxes. Each payment shall be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and payable against any improvement made on the parcel if it were not exempt from taxation. The amount of the payments shall not be affected by a reduction in the levies otherwise applicable to the exempt property made by the county budget commission under section 5705.31 of the Revised Code. The legislative authority shall not require an owner to make annual service payments in lieu of taxes pursuant to this section after the date on which the urban homestead zone is dissolved. The county treasurer shall maintain a record of the payments in lieu of taxes made from property in the urban homestead zone.

(2) Moneys collected as payments in lieu of taxes shall be paid over to the treasurer of state to be deposited in the urban homestead scholarship fund and shall be set aside for use as scholarships to be awarded to qualified homeowners in the urban homestead zone from which the moneys were collected, except that any moneys remaining after a zone dissolves are no longer set aside for that zone and may be used to fund any urban homestead scholarship.

(C) Not later than fifteen days after adopting an ordinance under this section, the legislative authority shall submit a copy of the ordinance to the director of development, the department of education, and the tax commissioner. On or before the thirty-first day of March of each year, the director of development shall submit a status report to the legislative authority and the superintendent of public instruction indicating the funds raised for scholarships in the urban homestead zone, including a summary of the receipts for payments in lieu of taxes, and the expenditures of money from the urban homestead scholarship fund in the zone, including both moneys from the state and moneys from payments in lieu of taxes.

(D) Any parcel within the zone that is the subject of an ordinance adopted under section 5709.40 or 5709.41 of the Revised Code shall be excluded from any ordinance adopted under this section, and, if a parcel is subject to an ordinance adopted under this section, it shall not be the subject of an ordinance adopted under either of those sections.

Section 2. Chapter 730. of the Revised Code shall be known as "Urban Homestead Zones."