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H. B. No. 536 As IntroducedAs Introduced
129th General Assembly | Regular Session | 2011-2012 |
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Cosponsors:
Representatives Ashford, Fende, Hagan, R.
A BILL
To amend section 5709.73 of the Revised Code to allow
a board of township trustees to reduce the
percentage or term of a property tax exemption
granted to a business under a tax increment
financing agreement if the business fails to
create the number of new jobs the business agreed
to create in the agreement.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 5709.73 of the Revised Code be
amended to read as follows:
Sec. 5709.73. (A) As used in this section and section
5709.74 of the Revised Code:
(1) "Business day" means a day of the week excluding
Saturday, Sunday, and a legal holiday as defined in section 1.14
of the Revised Code.
(2) "Further improvements" or "improvements" means the
increase in the assessed value of real property that would first
appear on the tax list and duplicate of real and public utility
property after the effective date of a resolution adopted under
this section were it not for the exemption granted by that
resolution. For purposes of division (B) of this section,
"improvements" do not include any property used or to be used for
residential purposes.
(3) "Housing renovation" means a project carried out for
residential purposes.
(4) "Incentive district" has the same meaning as in section
5709.40 of the Revised Code, except that a blighted area is in the
unincorporated area of a township.
(5) "Project" and "public infrastructure improvement" have
the same meanings as in section 5709.40 of the Revised Code.
(B) A board of township trustees may, by unanimous vote,
adopt a resolution that declares to be a public purpose any public
infrastructure improvements made that are necessary for the
development of certain parcels of land located in the
unincorporated area of the township. Except with the approval
under division (D) of this section of the board of education of
each city, local, or exempted village school district within which
the improvements are located, the resolution may exempt from real
property taxation not more than seventy-five per cent of further
improvements to a parcel of land that directly benefits from the
public infrastructure improvements, for a period of not more than
ten years. The resolution shall specify the percentage of the
further improvements to be exempted and the life of the exemption.
(C)(1) A board of township trustees may adopt, by unanimous
vote, a resolution creating an incentive district and declaring
improvements to parcels within the district to be a public purpose
and, except as provided in division (F) of this section, exempt
from taxation as provided in this section, but no board of
township trustees of a township that has a population that exceeds
twenty-five thousand, as shown by the most recent federal
decennial census, shall adopt a resolution that creates an
incentive district if the sum of the taxable value of real
property in the proposed district for the preceding tax year and
the taxable value of all real property in the township that would
have been taxable in the preceding year were it not for the fact
that the property was in an existing incentive district and
therefore exempt from taxation exceeds twenty-five per cent of the
taxable value of real property in the township for the preceding
tax year. The district shall be located within the unincorporated
area of the township and shall not include any territory that is
included within a district created under division (B) of section
5709.78 of the Revised Code. The resolution shall delineate the
boundary of the district and specifically identify each parcel
within the district. A district may not include any parcel that is
or has been exempted from taxation under division (B) of this
section or that is or has been within another district created
under this division. A resolution may create more than one
district, and more than one resolution may be adopted under
division (C)(1) of this section.
(2) Not later than thirty days prior to adopting a resolution
under division (C)(1) of this section, if the township intends to
apply for exemptions from taxation under section 5709.911 of the
Revised Code on behalf of owners of real property located within
the proposed incentive district, the board shall conduct a public
hearing on the proposed resolution. Not later than thirty days
prior to the public hearing, the board shall give notice of the
public hearing and the proposed resolution by first class mail to
every real property owner whose property is located within the
boundaries of the proposed incentive district that is the subject
of the proposed resolution.
(3)(a) A resolution adopted under division (C)(1) of this
section shall specify the life of the incentive district and the
percentage of the improvements to be exempted, shall designate the
public infrastructure improvements made, to be made, or in the
process of being made, that benefit or serve, or, once made, will
benefit or serve parcels in the district. The resolution also
shall identify one or more specific projects being, or to be,
undertaken in the district that place additional demand on the
public infrastructure improvements designated in the resolution.
The project identified may, but need not be, the project under
division (C)(3)(b) of this section that places real property in
use for commercial or industrial purposes.
A resolution adopted under division (C)(1) of this section on
or after March 30, 2006, shall not designate police or fire
equipment as public infrastructure improvements, and no service
payment provided for in section 5709.74 of the Revised Code and
received by the township under the resolution shall be used for
police or fire equipment.
(b) A resolution adopted under division (C)(1) of this
section may authorize the use of service payments provided for in
section 5709.74 of the Revised Code for the purpose of housing
renovations within the incentive district, provided that the
resolution also designates public infrastructure improvements that
benefit or serve the district, and that a project within the
district places real property in use for commercial or industrial
purposes. Service payments may be used to finance or support
loans, deferred loans, and grants to persons for the purpose of
housing renovations within the district. The resolution shall
designate the parcels within the district that are eligible for
housing renovations. The resolution shall state separately the
amount or the percentages of the expected aggregate service
payments that are designated for each public infrastructure
improvement and for the purpose of housing renovations.
(4) Except with the approval of the board of education of
each city, local, or exempted village school district within the
territory of which the incentive district is or will be located,
and subject to division (E) of this section, the life of an
incentive district shall not exceed ten years, and the percentage
of improvements to be exempted shall not exceed seventy-five per
cent. With approval of the board of education, the life of a
district may be not more than thirty years, and the percentage of
improvements to be exempted may be not more than one hundred per
cent. The approval of a board of education shall be obtained in
the manner provided in division (D) of this section.
(D) Improvements with respect to a parcel may be exempted
from taxation under division (B) of this section, and improvements
to parcels within an incentive district may be exempted from
taxation under division (C) of this section, for up to ten years
or, with the approval of the board of education of the city,
local, or exempted village school district within which the parcel
or district is located, for up to thirty years. The percentage of
the improvements exempted from taxation may, with such approval,
exceed seventy-five per cent, but shall not exceed one hundred per
cent. Not later than forty-five business days prior to adopting a
resolution under this section declaring improvements to be a
public purpose that is subject to approval by a board of education
under this division, the board of township trustees shall deliver
to the board of education a notice stating its intent to adopt a
resolution making that declaration. The notice regarding
improvements with respect to a parcel under division (B) of this
section shall identify the parcels for which improvements are to
be exempted from taxation, provide an estimate of the true value
in money of the improvements, specify the period for which the
improvements would be exempted from taxation and the percentage of
the improvements that would be exempted, and indicate the date on
which the board of township trustees intends to adopt the
resolution. The notice regarding improvements made under division
(C) of this section to parcels within an incentive district shall
delineate the boundaries of the district, specifically identify
each parcel within the district, identify each anticipated
improvement in the district, provide an estimate of the true value
in money of each such improvement, specify the life of the
district and the percentage of improvements that would be
exempted, and indicate the date on which the board of township
trustees intends to adopt the resolution. The board of education,
by resolution adopted by a majority of the board, may approve the
exemption for the period or for the exemption percentage specified
in the notice; may disapprove the exemption for the number of
years in excess of ten, may disapprove the exemption for the
percentage of the improvements to be exempted in excess of
seventy-five per cent, or both; or may approve the exemption on
the condition that the board of township trustees and the board of
education negotiate an agreement providing for compensation to the
school district equal in value to a percentage of the amount of
taxes exempted in the eleventh and subsequent years of the
exemption period or, in the case of exemption percentages in
excess of seventy-five per cent, compensation equal in value to a
percentage of the taxes that would be payable on the portion of
the improvements in excess of seventy-five per cent were that
portion to be subject to taxation, or other mutually agreeable
compensation.
The board of education shall certify its resolution to the
board of township trustees not later than fourteen days prior to
the date the board of township trustees intends to adopt the
resolution as indicated in the notice. If the board of education
and the board of township trustees negotiate a mutually acceptable
compensation agreement, the resolution may declare the
improvements a public purpose for the number of years specified in
the resolution or, in the case of exemption percentages in excess
of seventy-five per cent, for the exemption percentage specified
in the resolution. In either case, if the board of education and
the board of township trustees fail to negotiate a mutually
acceptable compensation agreement, the resolution may declare the
improvements a public purpose for not more than ten years, and
shall not exempt more than seventy-five per cent of the
improvements from taxation. If the board of education fails to
certify a resolution to the board of township trustees within the
time prescribed by this section, the board of township trustees
thereupon may adopt the resolution and may declare the
improvements a public purpose for up to thirty years or, in the
case of exemption percentages proposed in excess of seventy-five
per cent, for the exemption percentage specified in the
resolution. The board of township trustees may adopt the
resolution at any time after the board of education certifies its
resolution approving the exemption to the board of township
trustees, or, if the board of education approves the exemption on
the condition that a mutually acceptable compensation agreement be
negotiated, at any time after the compensation agreement is agreed
to by the board of education and the board of township trustees.
If a mutually acceptable compensation agreement is negotiated
between the board of township trustees and the board of education,
including agreements for payments in lieu of taxes under section
5709.74 of the Revised Code, the board of township trustees shall
compensate the joint vocational school district within which the
parcel or district is located at the same rate and under the same
terms received by the city, local, or exempted village school
district.
If a board of education has adopted a resolution waiving its
right to approve exemptions from taxation under this section and
the resolution remains in effect, approval of such exemptions by
the board of education is not required under division (D) of this
section. If a board of education has adopted a resolution allowing
a board of township trustees to deliver the notice required under
division (D) of this section fewer than forty-five business days
prior to adoption of the resolution by the board of township
trustees, the board of township trustees shall deliver the notice
to the board of education not later than the number of days prior
to the adoption as prescribed by the board of education in its
resolution. If a board of education adopts a resolution waiving
its right to approve exemptions or shortening the notification
period, the board of education shall certify a copy of the
resolution to the board of township trustees. If the board of
education rescinds the resolution, it shall certify notice of the
rescission to the board of township trustees.
If the board of township trustees is not required by division
(D) of this section to notify the board of education of the board
of township trustees' intent to declare improvements to be a
public purpose, the board of township trustees shall comply with
the notice requirements imposed under section 5709.83 of the
Revised Code before taking formal action to adopt the resolution
making that declaration, unless the board of education has adopted
a resolution under that section waiving its right to receive the
notice.
(E)(1) If a proposed resolution under division (C)(1) of this
section exempts improvements with respect to a parcel within an
incentive district for more than ten years, or the percentage of
the improvement exempted from taxation exceeds seventy-five per
cent, not later than forty-five business days prior to adopting
the resolution the board of township trustees shall deliver to the
board of county commissioners of the county within which the
incentive district is or will be located a notice that states its
intent to adopt a resolution creating an incentive district. The
notice shall include a copy of the proposed resolution, identify
the parcels for which improvements are to be exempted from
taxation, provide an estimate of the true value in money of the
improvements, specify the period of time for which the
improvements would be exempted from taxation, specify the
percentage of the improvements that would be exempted from
taxation, and indicate the date on which the board of township
trustees intends to adopt the resolution.
(2) The board of county commissioners, by resolution adopted
by a majority of the board, may object to the exemption for the
number of years in excess of ten, may object to the exemption for
the percentage of the improvement to be exempted in excess of
seventy-five per cent, or both. If the board of county
commissioners objects, the board may negotiate a mutually
acceptable compensation agreement with the board of township
trustees. In no case shall the compensation provided to the board
of county commissioners exceed the property taxes foregone due to
the exemption. If the board of county commissioners objects, and
the board of county commissioners and board of township trustees
fail to negotiate a mutually acceptable compensation agreement,
the resolution adopted under division (C)(1) of this section shall
provide to the board of county commissioners compensation in the
eleventh and subsequent years of the exemption period equal in
value to not more than fifty per cent of the taxes that would be
payable to the county or, if the board of county commissioner's
objection includes an objection to an exemption percentage in
excess of seventy-five per cent, compensation equal in value to
not more than fifty per cent of the taxes that would be payable to
the county, on the portion of the improvement in excess of
seventy-five per cent, were that portion to be subject to
taxation. The board of county commissioners shall certify its
resolution to the board of township trustees not later than thirty
days after receipt of the notice.
(3) If the board of county commissioners does not object or
fails to certify its resolution objecting to an exemption within
thirty days after receipt of the notice, the board of township
trustees may adopt its resolution, and no compensation shall be
provided to the board of county commissioners. If the board of
county commissioners timely certifies its resolution objecting to
the trustees' resolution, the board of township trustees may adopt
its resolution at any time after a mutually acceptable
compensation agreement is agreed to by the board of county
commissioners and the board of township trustees, or, if no
compensation agreement is negotiated, at any time after the board
of township trustees agrees in the proposed resolution to provide
compensation to the board of county commissioners of fifty per
cent of the taxes that would be payable to the county in the
eleventh and subsequent years of the exemption period or on the
portion of the improvement in excess of seventy-five per cent,
were that portion to be subject to taxation.
(F) Service payments in lieu of taxes that are attributable
to any amount by which the effective tax rate of either a renewal
levy with an increase or a replacement levy exceeds the effective
tax rate of the levy renewed or replaced, or that are attributable
to an additional levy, for a levy authorized by the voters for any
of the following purposes on or after January 1, 2006, and which
are provided pursuant to a resolution creating an incentive
district under division (C)(1) of this section that is adopted on
or after January 1, 2006, shall be distributed to the appropriate
taxing authority as required under division (C) of section 5709.74
of the Revised Code in an amount equal to the amount of taxes from
that additional levy or from the increase in the effective tax
rate of such renewal or replacement levy that would have been
payable to that taxing authority from the following levies were it
not for the exemption authorized under division (C) of this
section:
(1) A tax levied under division (L) of section 5705.19 or
section 5705.191 of the Revised Code for community mental
retardation and developmental disabilities programs and services
pursuant to Chapter 5126. of the Revised Code;
(2) A tax levied under division (Y) of section 5705.19 of the
Revised Code for providing or maintaining senior citizens services
or facilities;
(3) A tax levied under section 5705.22 of the Revised Code
for county hospitals;
(4) A tax levied by a joint-county district or by a county
under section 5705.19, 5705.191, or 5705.221 of the Revised Code
for alcohol, drug addiction, and mental health services or
families;
(5) A tax levied under section 5705.23 of the Revised Code
for library purposes;
(6) A tax levied under section 5705.24 of the Revised Code
for the support of children services and the placement and care of
children;
(7) A tax levied under division (Z) of section 5705.19 of the
Revised Code for the provision and maintenance of zoological park
services and facilities under section 307.76 of the Revised Code;
(8) A tax levied under section 511.27 or division (H) of
section 5705.19 of the Revised Code for the support of township
park districts;
(9) A tax levied under division (A), (F), or (H) of section
5705.19 of the Revised Code for parks and recreational purposes of
a joint recreation district organized pursuant to division (B) of
section 755.14 of the Revised Code;
(10) A tax levied under section 1545.20 or 1545.21 of the
Revised Code for park district purposes;
(11) A tax levied under section 5705.191 of the Revised Code
for the purpose of making appropriations for public assistance;
human or social services; public relief; public welfare; public
health and hospitalization; and support of general hospitals;
(12) A tax levied under section 3709.29 of the Revised Code
for a general health district program.
(G) An exemption from taxation granted under this section
commences with the tax year specified in the resolution so long as
the year specified in the resolution commences after the effective
date of the resolution. If the resolution specifies a year
commencing before the effective date of the resolution or
specifies no year whatsoever, the exemption commences with the tax
year in which an exempted improvement first appears on the tax
list and duplicate of real and public utility property and that
commences after the effective date of the resolution. Except as
otherwise provided in this division, the exemption ends on the
date specified in the resolution as the date the improvement
ceases to be a public purpose or the incentive district expires,
or ends on the date on which the public infrastructure
improvements and housing renovations are paid in full from the
township public improvement tax increment equivalent fund
established under section 5709.75 of the Revised Code, whichever
occurs first. The exemption of an improvement with respect to a
parcel or within an incentive district may end on a later date, as
specified in the resolution, if the board of township trustees and
the board of education of the city, local, or exempted village
school district within which the parcel or district is located
have entered into a compensation agreement under section 5709.82
of the Revised Code with respect to the improvement and the board
of education has approved the term of the exemption under division
(D) of this section, but in no case shall the improvement be
exempted from taxation for more than thirty years. The board of
township trustees may, by majority vote, adopt a resolution
permitting the township to enter into such agreements as the board
finds necessary or appropriate to provide for the construction or
undertaking of public infrastructure improvements and housing
renovations. Any exemption shall be claimed and allowed in the
same or a similar manner as in the case of other real property
exemptions. If an exemption status changes 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.
(H) The board of township trustees may issue the notes of the
township to finance all costs pertaining to the construction or
undertaking of public infrastructure improvements and housing
renovations made pursuant to this section. The notes shall be
signed by the board and attested by the signature of the township
fiscal officer, shall bear interest not to exceed the rate
provided in section 9.95 of the Revised Code, and are not subject
to Chapter 133. of the Revised Code. The resolution authorizing
the issuance of the notes shall pledge the funds of the township
public improvement tax increment equivalent fund established
pursuant to section 5709.75 of the Revised Code to pay the
interest on and principal of the notes. The notes, which may
contain a clause permitting prepayment at the option of the board,
shall be offered for sale on the open market or given to the
vendor or contractor if no sale is made.
(I) The township, not later than fifteen days after the
adoption of a resolution under this section, shall submit to the
director of development a copy of the resolution. On or before the
thirty-first day of March of each year, the township shall submit
a status report to the director of development. The report shall
indicate, in the manner prescribed by the director, the progress
of the project during each year that the exemption remains in
effect, including a summary of the receipts from service payments
in lieu of taxes; expenditures of money from the fund created
under section 5709.75 of the Revised Code; a description of the
public infrastructure improvements and housing renovations
financed with the expenditures; and a quantitative summary of
changes in private investment resulting from each project.
(J) Nothing in this section shall be construed to prohibit a
board of township trustees from declaring to be a public purpose
improvements with respect to more than one parcel.
(K) A board of township trustees that adopted a resolution
under this section prior to July 21, 1994, may amend that
resolution to include any additional public infrastructure
improvement. A board of township trustees that seeks by the
amendment to utilize money from its township public improvement
tax increment equivalent fund for land acquisition in aid of
industry, commerce, distribution, or research, demolition on
private property, or stormwater and flood remediation projects may
do so provided that the board currently is a party to a
hold-harmless agreement with the board of education of the city,
local, or exempted village school district within the territory of
which are located the parcels that are subject to an exemption.
For the purposes of this division, a "hold-harmless agreement"
means an agreement under which the board of township trustees
agrees to compensate the school district for one hundred per cent
of the tax revenue that the school district would have received
from further improvements to parcels designated in the resolution
were it not for the exemption granted by the resolution.
(L) Before adopting a resolution to exempt improvements to
real property under division (B) or (C) of this section, a board
of township trustees may enter into an agreement with any person
that owns or operates a place of business that is or will be
located on the real property that would benefit from such
improvements under which the person agrees to hire a specified
number of new employees at that place of business as a condition
for approval of the exemption. Such an agreement may include a
provision that allows the board, after adoption of the resolution
that specifies the percentage of the improvements to be exempted
and the number of years of the exemption, to adopt one or more
subsequent resolutions that reduce the percentage of such
improvements to be exempted or the term of the exemption if the
person fails to hire the number of new employees specified in the
agreement. An agreement that includes such a provision may include
additional provisions that detail the circumstances under which
the board may act to reduce the percentage of improvements to be
exempted or the term of an exemption.
Section 2. That existing section 5709.73 of the Revised Code
is hereby repealed.
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