Tracked Senate Bills – November 2023

Jeffry D. Harris
Bricker Graydon, LLP

135^TH 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 134^th 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 134^th 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 134^th General Assembly.)

On May 24, 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.

On May 9, the Senate Judiciary Committee held its third hearing on the measure, during which substantial opposition was voiced by the Buckeye Sheriffs Association, County Treasurers Association of Ohio, and the County Auditors Association of Ohio.

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 134^th 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.

On October 10, the Senate Local Government Committee held its fourth hearing to report out the measure; the entire Senate approved the bill on October 11 by a 28-1 vote.

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.  On October 24, the House referred the measure to its Economic & Workforce Committee.

During earlier sponsor testimony, Sen. Louis Blessing (R-Cincinnati) had 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.

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 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.

 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.