Jeffry D. Harris
Bricker Graydon LLP
135TH GENERAL ASSEMBLY – PROPOSED & ENACTED LEGISLATION
(Changes from last month are noted in italics):
SENATE BILLS:
SB 2 PROPERTY TAX (Schuring, K.) Introduced on January 12, 2023, this bill seeks to authorize certain subdivisions to designate areas within which certain residential property is wholly or partially exempted from property taxation. (Note this bill continues from SB 329, as was introduced in the 134th General Assembly.)
Specifically, this bill makes changes to CRA law to authorize political subdivisions to establish up to 300-acre-sized Neighborhood Development Areas within their boundaries within which certain residential property is wholly or partially exempted from property taxation. The NDA property tax exemptions would be 100% with local school board approval (75% without such approval); existing owner-occupied dwellings would receive 10-year exemptions for improvements ≥$5,000; in new home construction, the homebuilder would receive an exemption during the period from commencement of construction until the new home is sold, with the new home owner subsequently receiving a 10-year exemption.
SB 3 COMMUNITY REVITALIZATION (Schuring, K.) Introduced on January 11, 2023, this bill seeks to create the Ohio Community Revitalization Program, authorizing nonrefundable income tax credits for undertaking community projects. (Note this bill continues from SB 344, as was introduced in the 134th General Assembly.)
SB 4 FILM & THEATER (Schuring, K.) Introduced on January 11, 2023, this bill modifies the film and theater tax credit and authorizes a tax credit for capital improvement projects relating to the film and theater industries. (Note this bill continues from SB 341, as was introduced in the 134th General Assembly.)
On May 24, 2023, the Senate Ways & Means Committee held its third hearing, after having accepted a substitute version of the bill at the Committee’s first hearing on May 9.
The substitute bill establishes a four-year pilot demonstration, with the following components:
- 30% transferrable tax credit, uncapped and non-refundable;
- Rolling, year-round application process;
- 25% capital tax credit for brick-and-mortar projects; and,
- 5-year carry-forward of unused tax credits.
SB 5 WORKFORCE VOUCHER PROGRAM (Schuring, K.) Introduced on January 11, 2023, this bill establishes the Workforce Voucher Program, which sunsets two years after the bill’s effective date, and authorizes tax credits for graduates of the Voucher Program.
SB 25 REAL PROPERTY FORECLOSURES (Hackett, R.) Introduced on January 23, 2023, this bill addresses procedural matters in tax foreclosures of real property under R.C. Chapter 2329. Specifically, the bill allows for the use of private selling officers, or PSOs, to sell foreclosed property, rather than county sheriffs, and it reduces the number of appraisals that must be obtained. (Note the companion bill in the lower chamber (HB 632).)
On June 26, 2024, the Senate Judiciary Committee held its fifth hearing on the measure.
SB 36 PROPERTY FORECLOSURES-TENANT RIGHTS (Blessing III, L.) Introduced on January 31, 2023, this bill grants to tenants and certain other eligible bidders rights relating to the purchase of residential property sold at foreclosure. (Note this bill continues from SB 334 during the 134th General Assembly.)
The Senate Community Revitalization Committee held its third hearing on the measure on March 22. During earlier sponsor testimony, Sen. Louis Blessing (R-Colerain Twp.) stated the bill provides a first right of refusal in the foreclosure auction bidding process to purchasers who would sign an affidavit stating they would live in the property for at least one year before turning a property into a rental; this measure mirrors current law in California. The impetus for the bill is to prevent institutional housing investors from mass purchasing foreclosed properties and making them permanent rentals.
SB 75 ECONOMIC DEVELOPMENT (Blessing, L.) Introduced on February 28, 2023, this bill makes changes to JEDD law to allow two or more municipalities to create a joint economic development district without involving a township.
During initial sponsor testimony, Sen. Louis Blessing (R-Cincinnati) said the bill has a specific transaction in mind: allowing a JEDD between Evendale and Lincoln Heights in Hamilton County (former Senate President Richard Finan now is the mayor of Evandale).
To allow multiple municipalities to establish a JEDD, without also involving a township, the bill requires at least one of the cities to meet two of the following “distressed area” criteria: (i) reaching 125% of the state average unemployment during the most recent 12 months; (ii) having at least 10% population loss between 1980 and 2000; (iii) having a prevalence of vacant or demolished commercial or industrial facilities; (iv) having 51% of the population is below 80% of the area’s median income; and (v) having income weighted tax capacity of the school district is below 70% of the state average. Note these distress criteria are taken from the Ohio Enterprise Zone program’s distressed zone designations.
In October 2023, the Senate Local Government Committee reported out the measure; the entire Senate approved the bill on October 11 (28-1). The Senate-passed version included an amendment to require municipal corporations seeking to form a JEDD, composed only of municipal corporations, to be wholly or partially located in the same county. This measure had first hearing in the House Economic & Workforce Development Committee on April 16, 2024.
SB 94 COUNTY RECORDER DOCUMENTS (Brenner, A. Landis, A.) Introduced on March 23, 2023, this bill ostensibly dealt with recorded instruments, powers of attorney, judgment liens, mortgage subrogation, and law enforcement towing laws. The bill, in its initial form, had passed the entire Senate in May 2024; the measure then was referred to the House.
During June 2024, in the run-up to the legislature’s summer recess, the House Finance Committee dropped-in a number of provisions that had been introduced in other bills. The rewritten bill was approved by the entire House on June 26 (80-13), and the Senate concurred in the House’s amendments that same day (30-1).
The bill has been delivered to Governor DeWine for his signature.
Relevant for economic developers, this bill includes a change to the CRA program’s “model CRA agreement” provisions related to clawback (see R.C. 3735. 671) Specifically, the bill clarifies that clawbacks of CRA benefits are discretionary and not required. If imposed, a clawback may be enforced in multiple ways, and if the clawback is enforced as a lien on property it will be enforced as a mortgage lien. Clawback enforcement may now require additional “bells and whistles” such as cross-defaults with TIF or other incentive offerings, corporate guarantees of clawback payments, or mortgage lien filings at CRA agreement execution (which occurs up front before construction and possibly before a construction mortgage is recorded).
SB 118 INCOME TAX CREDIT (Schuring, K.) Introduced on May 4, 2023, this bill authorizes a nonrefundable, transferable income tax credit for the construction of new, or conversion of rental housing into, owner-occupied single family homes.
On May 24, the Senate Ways & Means Committee, held its third hearing on the measure that would establish the Home Ownership Potential Energized (HOPE) tax credit program.
Specifically, this tax credit would comprise the following:
- 50% tax credit to entities for expenses used to rehabilitate single-family rental dwellings into owner-occupied single-family homes within certain municipalities;
- 50% tax credit to entities for expenses used to build new single family dwellings to be used for owner occupied single family homes within certain municipalities;
- Defines those certain municipalities as having + 50% renters, according to most recent US Census Bureau Community Survey data;
- Enables those certain municipalities to pick the specific neighborhoods to be eligible for the HOPE credits; and,
- Caps HOPE credits at $50,000/applicant and $100MM/state fiscal year.
County land banks and CICs could offer to dispose of property accompanied by a HOPE tax credit certificate, of up to $50,000, that the buyer could use against his/her state income taxes. Such entities are empowered to apply to ODOD for a HOPE credit certificate prior to selling the property, and then pass it along (i.e., transfer) to the eventual buyer (owner-occupant): “if the person is the applicant to which the certificate was initially issued, the person may transfer the right to claim the credit under division (F) of this section.” And under (F) of the new HOPE credit statute, such entities would be fully authorized to “transfer the right to claim all or part of the remaining credit to any other person.”
SB 120 LAND BANKS (Schuring, K.) Introduced on May 11, 2023, this bill allows a portion of TIF annual service payments in lieu of taxes (PILOTs) to be designated for use by land banks.
Specifically, the bill allows for up to 10% of TIF revenues in a project to be directed to “electing subdivisions” under R.C. Chapter 5722, which are municipal and county land banks, for their respective land reutilization programs. The municipality, county, or township creating a TIF that specifies land banking-related uses of TIF revenues is required to establish a stand-alone “land reutilization TIF fund” to hold those specified TIF revenues for purposes of economic development.
SB 121 NATURAL GAS INFRASTRUCTURE (Romanchuk, M.) Introduced on May 16, 2023, this bill makes changes to the natural gas infrastructure development rider included in customers’ bills.
SB 166 BUSINESS LOANS (Sykes, V., Reynolds, M.) Introduced on October 3, 2023, this bill seeks to allow a limited amount of ODOD’s Minority Business Direct Loans to be used for borrowers’ working capital needs (e.g., payroll and other business operating expenses).
On December 12, the Senate Financial Institutions & Technology Committee held its second hearing, taking proponent testimony.
SB 171 TAX CREDIT-SOUND RECORDING PRODUCTION (Smith K., Rulli M.) Introduced on October 11, 2023, this bill temporarily authorizes a refundable income tax credit for investing in a sound recording production company.
On November 28, the Senate Ways & Means Committee held its first hearing on the measure, with Sen. Kent Smith (D-Euclid) offering sponsor testimony in which he stated the bill will make Ohio a recording destination for musicians and producers. Qualifying projects would receive a 25% credit on the cost of recording a piece of music or for sound studio improvements (so long as the improvement investments exceeded $10,000); the credit would be capped at $75,000/project.
SB 186 PROPERTY TAXATION (Blessing, L. Ingram, C.) Introduced on November 14, 2023, this bill requires payment of property taxes and assessments when a lot is split or transferred. The bill further generally prohibits tax-delinquent property owners from purchasing tax-foreclosed property.
Specifically, the measure requires that in cases of transferring or subdividing property, all taxes must be paid up-front, or the deed will not be recorded. Further, in order to have a title transferred, the purchaser must furnish an affidavit stating they have no delinquent tax issues in Ohio, or such issues are being resolved. This seeks to prevent tax delinquent persons or entities from bidding on, and winning, properties sold at public auction (e.g., sheriff’s sale) in Ohio. Note this prohibition is applicable in the use of LLCs when transferring property between owners: preventing the selling of forfeited land to delinquent property owners also applies to any individual with at least a 10% ownership interest in a delinquent property.
On June 12, 2024, the entire Senate approved the measure (32-1); the bill has been referred to the House Ways & Means Committee.
SB 195 TRADE COMMISSION – OHIO-IRELAND (Manning, N.) Introduced on November 27, 2023, this bill establishes the nine-member Ohio Ireland Trade Commission. (Note the companion bill in the lower chamber: HB 455.)
The Senate General Government Committee reported out this measure on May 8, 2024; the entire Senate voted to approve the bill that same day (31-0). On June 25, the House Government Oversight Committee held its first hearing on the measure.
SB 200 GEOLOGIC CARBON SEQUESTRATION (Schaffer, T., Landis, A.) Introduced on December 6, 2023, this bill serves as a placeholder legislative vehicle stating the General Assembly’s intent to regulate carbon capture and storage technologies in Ohio. Note the companion measure in the lower chamber, HB 358.
On April 9, 2024, the Senate Energy & Public Utilities Committee held its first hearing on the measure.
SB 216 STATE TAX (Lang, G. Huffman, M.) Introduced on January 23, 2024, this bill seeks to phase-out the state income tax on nonbusiness income over six years and to repeal the CAT tax after 2029.
SB 226 EXTENDING PROPERTY PROTECTION LAWS (Johnson, T.) Introduced on February 21, 2024, this bill prohibits certain foreign countries, businesses, individuals, and organizations from acquiring agricultural land in Ohio. (Note the companion bill in the lower chamber: HB 212.)
Specifically, the bill prevents ownership by governments, businesses, and individuals (including those with dual citizenship) – involving countries deemed foreign adversaries – of any real property near critical infrastructure. The bill defines “critical infrastructure” to include generation facilities, pipelines, and transmission substations; the limitation on ownership is on land within 25 miles of such assets.
On June 12, 2024, the Senate Veterans & Public Safety Committee reported-out the measure, and on June 26, the entire Senate approved the bill (30-1).
SB 243 ZONING REGULATIONS (Reynolds, M. Craig, H.) Introduced on April 17, 2024, this bill is a place-holder declaring the General Assembly’s intent to enact legislation addressing local zoning regulations that impede the development of housing development.
On June 25, 2024, the Senate Select Committee on Housing held its first hearing on the measure.
SB 244, PROPERTY TAX EXEMPTIONS (Reynolds, M. Craig, H.) Introduced on April 17, 2024, this bill authorizes local governments to create “residential stability zones” where homeowners may qualify for a partial property tax exemption.
Specifically, the bill proposes the following:
- Cities to create “Residential Stability Zones,” geographic areas where the program would operate;
- Homeowners with household income ≤ 80% AMI could apply for property tax relief for a 6-year period (municipalities could use a lower AMI);
- Tax relief would be tied to the homeowner(s) while they own and live in the home, unlike a tax abatement which can be sold as an asset with the property it is tied to;
- The program and such Stability Zones would be reauthorized at least every 10 years;
- Jurisdictions could require other qualifications for eligibility, such as length of homeownership and age;
- Relief without re-approval could go to eligible homeowners aged 60+, and 6-year relief to those under the age of 60; and,
- The program would not impact a home’s sale price or valuation for county sexennial or triennial reassessment purposes, nor would it require the state to replace foregone, local revenue.
On June 25, 2024, the Senate Ways & Means Committee held its second hearing on the measure.
SB 245, HOUSING (Reynolds, M. Craig, H.) Introduced on April 17, 2024, this bill seeks to revise the law governing eviction, real estate representation agreements, residential building code enforcement, and real property transfers.
Specifically, the bill proposes the following:
- Creates a standardized eviction sealing procedure across the state, mandating that renters facing eviction are mandated to mediation and access to legal counsel prior to eviction filings;
- Requires written agency agreements between real estate brokerages and clients;
- Revises the workforce certification process in the residential construction sector;
- Establishes a third-party system, overseen by ODOD, to review building permit applications to expedite processing of plans when local zoning departments are backed-up; and
- Requires disclosures of limited liability companies’ (LLCs) ownership during property transfers.
On June 25, 2024, the Senate Select Committee on Housing held its third hearing on the measure.
SB 246 HOUSING DEPARTMENT (Reynolds, M. Craig, H.) Introduced on April 17, 2024, this bill would rename ODOD as the Department of Housing and Development and would otherwise modify state law related to housing.
SB 271 TAX CREDITS (Blessing, L. Craig, H.) Introduced on May 15, 2024, this “circuit breaker” bill seeks to authorize a refundable state income tax credit or rebate for homeowners and renters with household incomes ≤ $60,000/year whose property taxes or a portion of their rent exceed five per cent of their total household financial resources for that year.
On June 25, 2024, the Senate Ways & Means Committee held its second hearing on the measure.
SB 276 TAX CREDITS (Cirino, J. Chavez) Introduced on May 22, 2024, this bill modifies the availability of and eligibility for Rural Business Growth Fund tax credits (R.C. 122.151).
Specifically, the bill updates the original program (authorized by SB 8, 132nd General Assembly) that made available a nonrefundable tax credit for insurance companies investing in small businesses operating in counties with a population of 200,000 or less; the program was reauthorized under HB 110 (134th General Assembly).
This bill would provide an additional $150MM of investment authority, to include $90MM in tax credits, and make such financing available in the OhioSE region.
On June 25, 2024, the Senate Ways & Means Committee held its first hearing on the measure.
SB 283 TAX CREDITS (Schuring, K.) Introduced on June 4, 2024, this bill seeks to modify the film and theater production tax credit. Specifically, the bill modifies the production-related tax credit in R.C. 122.85 to increase the annual tax credit allocation to $100MM/year (from $50MM). And the bill seeks to repeal the film and theater capital improvement tax credit (R.C. 122.852).
SB 288 OPERATING APPROPRIATIONS (Dolan, M.) Introduced on June 10, 2024, this
this was the upper chamber’s bill to distribute the $700MM One-Time Strategic Community Investment Fund allocations. These one-time funding amounts were collapsed into HB 2.
SB 291 LOGISTICS BUSINESSES (Wilkin, S. Lang, G.) Introduced on June 11, 2024, this bill seeks to exempt from sales and use tax items purchased by a logistics business to transport manufactured products, general merchandise, and grocery products.
SB 292 CAPITAL APPROPRIATIONS (Dolan, M.) Introduced on June 17, 2024, this was the upper chamber’s capital bill; note the companion bill in the lower chamber (HB 629). These capital appropriations were collapsed into HB 2.
SB 300 HOUSING (Brenner, A. Smith, K.) Introduced on June 24, 2024, this bill raises money for the Ohio Housing Trust Fund via increased county real estate and manufactured home conveyance fees, to be allocated by county commissioners for county-specific housing purposes. Specifically, county treasurers would be required to create county housing funds, with moneys to be used for low-income housing, first-time homebuyer assistance, disability housing, and transitional housing.