The Ohio House is debating creating a new economic development tool to help boost redevelopment in the state. Senate Bill 39 would create a new nonrefundable insurance premiums tax credit for transformational mixed-use developments or TMUD’s. The legislation recently saw a number of changes in the Ohio House Economic and Workforce Development Committee expanding the original draft of the legislation to include Ohio’s rural areas in the qualifications for the credit.
Senate Bill 39 would authorize a nonrefundable insurance premiums tax credit for capital contributions to the construction of “transformational mixed-use developments” (TMUDs). The bill sets the credit at 10% of the development costs or 10% of an insurance company’s capital contribution and permits unclaimed credit amounts to be carried forward for up-to five years. The bill allows insurance companies to apply directly for the credit or to purchase the right to claim the credit from the property owner. Total project cost has to exceed $50 million, but can include all phases of a project.
Recent amendments set an overall $100 million per fiscal year cap with no more than $40 million going to a single project and dividing the overall $100 million between large city and small city projects $80 million for large cities and $20 million for small cities.
Also, the committee amended the bill to establish eligibility for both small and large cities; allowing for small city projects which exceed $50 million dollars to qualify for the TMUD credit if the development is not located within ten miles of a major city (100,000 or more) project includes at least one new or previously vacant building; is 4 or more stories; or is at least 250,000 sq ft.
Large City projects qualify if development is located within ten miles of a major city; project includes at least one new or previously vacant building; is 15 stories in height; or is at least 350,000 sq. ft.; or is a project which creates $4 million in annual payroll.
These types of development tools are vital to help boost Ohio’s economic growth both in the state’s urban and rural areas. Ohio is in a unique position to lead the country in these types of investments due to the presence of many of the nation’s leading insurance companies. Senate Bill 39 is currently pending in the Ohio House Economic & Workforce Development Committee and previously passed the Ohio Senate with both bi-partisan support by a vote of 32-1. If you would like to learn more about this legislation contact Tim Biggam at firstname.lastname@example.org at the Montrose Group, LLC.