Ohio Senate Committee chefs baking economic development morsels into their version of the state budget bill

Jeffry D. Harris
Bricker & Eckler LLP  

On June 1, 2021, the Ohio Senate Finance Committee released its version of the state’s biennial operating budget (HB 110), which must be signed into law by June 30, 2021. As often happens, there are millions of dollars in appropriated funds across state government, and then there are actual, no-kidding changes to unrelated elements of Ohio law also inserted into the bill. There are two such changes that should be noted by Ohio’s economic development practitioners.

First, the means of creating a new Joint Economic Development District (JEDD), or amending an existing JEDD to add area, would be altered. Under the Senate’s inserted changes, practitioners would have to issue new notices and employ new JEDD agreement terms.

Most importantly, JEDDs would have to exclude land that is in close proximity to, or subject to water/sanitary sewer service agreements by, a municipality which is not party to the JEDD agreement. Specifically, new subdivisions (E)(1)(d) and (J)(2) in Ohio Revised Code Section 715.72 would require excluding from a JEDD any land within one half mile of a municipality (which is not part of the JEDD agreement), or is subject to a water/sanitary sewer agreement under which such non-party municipality will be the future provider of water or sewer services to all or part of the proposed JEDD. An exception: the land’s property owner signs the JEDD petition.

The cudgel of excluding land nearby a non-party municipality, or that is served by a non-party municipality’s water/sewer service, may prove troublesome to certain facts-specific JEDD formations. This represents an additional needle to carefully thread in forming such JEDDs. There would be some effort involved to confirm which parcels of a proposed JEDD lie within a measured distance to a neighboring city.

Second, and likely more useful to economic development practitioners, the use of tax increment financing (TIF) funds would include off-street parking facilities, including those with reserved spaces (i.e., nonpublic). Further, the Senate Committee inserted clean-up language into the so-called urban redevelopment TIF (Ohio Revised Code Section 5709.41) to specify that exemptions commence after the effective date of the municipality’s enabling ordinance, as well as to make explicit that TIF exemptions commence upon certain value being created or on a parcel-by-parcel basis, once improvements are made (rather than an entire urban redevelopment TIF’s exemption commencing based on improvements to a singular parcel).

Bricker’s Public Finance team tracks legislation pending at the federal and state levels related to economic development for our public and private sector clients.

This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.