Ohio’s Lame Duck Legislative Session Impacts Economic Development Programs

Spending money was not the only focus of the Ohio General Assembly Lame duck legislative session. Several policy changes were enacted that impact the operation of state authorized economic development programs. 

Low Income Housing and State Historic Preservation Tax Credits. Ohio House Bill 45 was amended to not permit the state of Ohio Historic Preservation Tax Credit Program to be used in tandem with the Low-Income Housing Tax Credit.  Legislators were apparently concerned about the rise in projects using both of these funding sources.

Special Improvement Districts. Ohio House Bill 45 modifies provisions of law that apply to an existing qualified nonprofit corporation that creates a Special Improvement District (SID). It specifies that the corporation is considered a SID only when it acts with respect to a purpose for which the SID is created, and not when it acts with respect to any other purpose for which the corporation is organized. Also, House Bill 45 provides that the following laws, which normally apply to SIDs, apply to the corporation only when it is acting as a SID including the Ohio Ethics Law, Ohio Public Records Law, Ohio Open Meetings Law, Ohio wages and hours on public works, and the Ohio law prohibiting public contracts from being awarded to persons found in contempt for failure to correct an unfair labor practice.  Finally, Ohio House Bill 45 specifies that the corporation’s officers, members, and directors, and their designees or proxies, are subject to the Ethics Law only when they act on SID business, and not when they act on other business of the corporation.

Community Reinvestment Area Reform.  State Representative Mark Frazier’s House Bill 123 which reforms Ohio’s Community Reinvestment Area (CRA) tax abatement program.  The contents of HB 123 were added through an amendment to SB 33 and passed by the Ohio House of Representatives and Ohio Senate in the late hours of the last day of the Lame Duck Legislative Session.  The provisions in SB 33 will make substantial changes to Ohio’s CRA program that include:

  • Eliminates the requirement for the Ohio Department of Development to approve a

proposed CRA;

  • Requires the Ohio Department of Development to prescribe a model CRA exemption agreement between owners of a commercial or industrial project and local authorities;
  • Increases, from 50% to 75%, the percentage of a proposed CRA exemption for a

commercial or industrial project that requires obtaining permission from a school district encompassing the project;

  • Modifies the requirement that municipalities share municipal income tax revenue

generated by new employees at a large CRA commercial or industrial project with the

school district encompassing that project;

  • Reduces, from five to two years, the amount of time required to transpire between the

discontinuation of a CRA commercial or industrial project and when the project’s owner may obtain an enterprise zone tax exemption or another CRA exemption;

  • Removes the requirement that the owner of a CRA commercial or industrial project

notify the local authority in advance of relocating the site of the project to another local

authority’s CRA;

  • Modifies the recipients of and the information appearing in a required annual report

issued by local authorities detailing CRA commercial and industrial projects;

  • Eliminates fees paid by CRA commercial and industrial project owners to the local authority and Ohio Department of Development to cover the cost of administering such projects;
  • Requires the Ohio Department of Development to publish on its website the locations of each CRA, as well as all commercial and industrial project exemption agreements;
  • Extends the authority to designate CRAs to townships that have adopted limited

home rule governments;

  • Increases the amount of payroll of new employees involved with a CRA commercial or industrial project that triggers a requirement under continuing law that a municipality provide annual compensation to the school district from $1 M to $3 M that will be indexed for future growth;
  • Reduces the amount of time required to transpire between the discontinuation of a project and when that party may qualify for another CRA exemption or enterprise zone exemption from five to two years;
  • Modifies requirements for CRA awardee to make annual reporting to the state and local government entities; and
  • Eliminates fees that are currently paid to the Ohio Department of Development by CRA awardees.

Contact the Dave Robinson at the Montrose Group at drobinson@montrosegroupllc.com if you need any assistance with an economic development or lobbying matter.