Chapter 5709 | Taxable Property - Exemptions

Section 5709.01 | Taxable property entered on general tax list and duplicate.

• Effective: July 1, 1997
• Latest Legislation: Senate Bill 162 - 121st General Assembly

(A) All real property in this state is subject to taxation, except only such as is expressly exempted therefrom.

(B) Except as provided by division (C) of this section or otherwise expressly exempted from taxation:

(1) All personal property located and used in business in this state, and all domestic animals kept in this state and not used in agriculture are subject to taxation, regardless of the residence of the owners thereof.

(2) All ships, vessels, and boats, and all shares and interests therein, defined in section 5701.03 of the Revised Code as personal property and belonging to persons residing in this state, and aircraft belonging to persons residing in this state and not used in business wholly in another state, other than aircraft licensed in accordance with sections 4561.17 to 4561.21 of the Revised Code, are subject to taxation.

(C) The following property of the kinds mentioned in division (B) of this section shall be exempt from taxation:

(1) Unmanufactured tobacco to the extent of the value, or amounts, of any unpaid nonrecourse loans thereon granted by the United States government or any agency thereof.

(2) Spirituous liquor, as defined in division (B)(5) of section 4301.01 of the Revised Code, that is stored in warehouses in this state pursuant to an agreement with the division of liquor control.

(3) Except as otherwise provided in section 5711.27 of the Revised Code, all other such property if the aggregate taxable value thereof required to be listed by the taxpayer under Chapter 5711. of the Revised Code does not exceed ten thousand dollars.

(a) If the taxable value of such property exceeds ten thousand dollars only such property having an aggregate taxable value of ten thousand dollars shall be exempt.

(b) If such property is located in more than one taxing district as defined in section 5711.01 of the Revised Code, the exemption of ten thousand dollars shall be applied as follows:

(i) The taxable value of such property in the district having the greatest amount of such value shall be reduced until the exemption has been fully utilized or the value has been reduced to zero, whichever occurs first;

(ii) If the exemption has not been fully utilized under division (C)(3)(b)(i) of this section, the value in the district having the second greatest value shall be reduced until the exemption has been fully utilized or the value has been reduced to zero, whichever occurs first;

(iii) If the exemption has not been fully utilized under division (C)(3)(b)(ii) of this section, further reductions shall be made, in repeated steps which include property in districts having declining values, until the exemption has been fully utilized.

(D) All property mentioned as taxable in this section shall be entered on the general tax list and duplicate of taxable property.

Section 5709.02 | Taxable property to be entered on classified tax list and duplicate.

• Effective: July 1, 1985
• Latest Legislation: House Bill 201 - 116th General Assembly

All money, credits, investments, deposits, and other intangible property of persons residing in this state shall be subject to taxation, except as provided in this section or as otherwise provided or exempted in Title LVII of the Revised Code, but the good will, license, or franchise of a business, whether granted by governmental authority or otherwise, shall not be considered property separate from the other property used in or growing out of such business. Property of the kinds mentioned in section 5709.03 of the Revised Code used in and arising out of business transacted in this state by or on behalf of a nonresident person, other than a foreign insurance company as defined in section 5725.01 of the Revised Code, and nonwithdrawable shares of stock of dealers in intangibles located in this state shall be subject to taxation; and all such property of persons residing in this state used in and arising out of business transacted outside this state by or on behalf of such persons shall not be subject to taxation. Such property subject to taxation shall be entered on the classified tax list and duplicate of taxable property, or on the intangible property tax list in the office of the treasurer of state.

A corporation shall not be required to list any of its investments in the stocks of any other corporation or in its own treasury stock.

Other taxable intangibles and other intangible property, as defined in section 5701.09 of the Revised Code, arising from a sales agreement for grain or soybeans entered into by a person engaged in agriculture are not subject to taxation.

An unincorporated mutual fund, as defined in section 5711.01 of the Revised Code, shall not be required to list any of its investments in the stocks of any corporation.

Section 5709.03 | Fixing situs of certain classes of property within or without this state.

• Effective: October 1, 1953
• Latest Legislation: Senate Bill 361 - 100th General Assembly

Property of the kinds mentioned in this section, when used in business, shall be considered to arise out of business transacted in a state other than that in which the owner resides, under the circumstances following:

(A) Accounts receivable resulting from the sale of property by an agent having an office in such other state or from a stock of goods maintained therein, or from services performed by an officer, agent, or employee connected with, sent from, or reporting to any officer or at any office located in such other state;

(B) Prepaid items, when the right acquired thereby relates exclusively to the business transacted in such other state, or to property used in such business;

(C) In the case of accounts payable, the proportion of the entire amount of accounts receivable, wherever arising, represented by those arising out of business transacted in such other state ascertained as provided in this section, shall be taken to represent the proportion of the entire amount of accounts payable arising out of the business transacted in such other state;

(D) Deposits, other than those used in business outside of such other state, when withdrawable in the course of such business by an officer or agent having an office in such other state; but deposits representing general reserves or balances of the owner thereof maintained for the purpose of his entire business wherever transacted, shall be considered located in the state in which the owner resides, if an individual, or in which its actual principal executive office is situated, if a partnership or association, or under whose laws it is organized, if a corporation, by whomsoever they may be withdrawable;

(E) Money kept on hand at an office or place of business in such other state;

(F) Investments not held in trust, when made, created, or acquired in the course of repeated transactions of the same kind, conducted from an office of the owner in such other state, when either:

(1) Such investments represent obligations of persons residing in such other state or secured by property located therein;

(2) An officer or agent of the owner at the owner's office in such other state has authority, in the course of the owner's business, to receive or collect the income thereon, the principal, or both, when due, or to sell and dispose of the same.

This section shall be reciprocally applied, so that all property of the kinds mentioned in this section having a business situs in this state shall be taxed in this state, and no such property belonging to a person residing in this state and having a business situs outside of this state shall be taxed. The assignment of a business situs outside of this state to property of a person residing in this state, in any case and under any circumstances mentioned in this section, is inseparable from the assignment of such situs in this state to property of a person residing outside of this state in a like case and under similar circumstances. If any provision of this section is held invalid as applied to property of a nonresident person, such decision shall be deemed also to affect such provision as applied to property of a resident, but shall not affect any other provision hereof.

Section 5709.04 | Exemption of intangible property.

• Effective: May 31, 1968
• Latest Legislation: Senate Bill 207 - 107th General Assembly

Money, credits, investments, deposits, and other intangible property belonging, either legally or beneficially, to corporations, trusts, associations, funds, foundations, or community chests, organized and operated exclusively for religious, charitable, scientific, literary, health, hospital, educational, or public purposes, exclusively for the prevention of cruelty to children or animals, exclusively for a home for the aged, as defined in section 5701.13 of the Revised Code, or exclusively for contributing financial support to any such purposes, no part of the net earnings of which inures to the benefit of any private shareholder member or other individual, and no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation, shall not be subject to taxation.

Section 5709.041 | Exemption of certain deposits.

• Effective: September 29, 1955
• Latest Legislation: Senate Bill 374 - 101st General Assembly

Deposits to the extent they represent funds required to be collected or withheld as taxes levied upon persons other than the depositor by federal, state or local governmental authority, and deposits not used in business to the extent they represent funds belonging beneficially to non-residents of Ohio, whether or not any such funds are on deposit in or outside of Ohio, are not subject to taxation.

Section 5709.05 | When former public lands become taxable.

• Effective: September 21, 1982
• Latest Legislation: House Bill 379 - 114th General Assembly

All tracts of land appropriated by congress for the support of schools or for ministerial purposes and sold by and under authority of law, and all lands which are sold by the United States shall be subject to taxation, immediately after such sale, as are other lands in this state. Lands appropriated by congress for the support of schools or for ministerial purposes shall not be sold for taxes until the purchase money therefor is fully paid, but shall be returned as delinquent and continue on the duplicate with the taxes of each year charged thereon and added to the tax, penalty, and interest due when they became delinquent, until payment is made by the purchaser or his assigns of such purchase money with the tax, penalty, and interest, or the lands are resold by the county auditor pursuant to the laws provided for the sale of such lands.

Section 5709.06 | Valuation, special assessment, and issuance of notes relative to public land under lease renewable forever.

• Effective: July 1, 1985
• Latest Legislation: House Bill 201 - 116th General Assembly

Whenever lands belonging to the state, a municipal corporation, religious, scientific, or benevolent society or institution, whether incorporated or unincorporated, or trustees for free education only, or held by the state in trust, are held under a lease for a term of years renewable forever and not subject to revaluation, such lands shall be considered for taxation purposes as the property of the lessees and shall be assessed in their names. Whenever lands appropriated by congress for the support of schools or for ministerial purposes are held under a perpetual lease subject to revaluation, the interest of such lessees in such lands shall be subject to taxation. In determining the value for taxation purposes of such leasehold interest, the true value in money of the land shall be ascertained, the annual rent reserved in the lease shall be capitalized on a six per cent basis, and the resulting sum shall be deducted from the true value of the land in money. The percentage of the result so obtained established by the tax commissioner as taxable value plus the taxable value of all the improvements upon such land shall be the taxable value of such leasehold interest.

Whenever such lands appropriated by congress for the support of schools or for ministerial purposes are held under a lease for a term of years renewable forever, whether subject to revaluation or not, such lands shall, for all purposes of a special assessment for improvements benefiting such land, be considered as the property of the lessee. Whenever such lands are held under a lease for a term not renewable forever, such lands shall be subject to special assessments for improvements benefiting such lands, which shall be paid out of the annual rents accruing to the trust.

Whenever it appears that the net annual rents or earnings accruing from such lands will be insufficient to pay the sum of such assessment as the assessment becomes payable, the trustees in local charge of such lands shall issue and sell notes for the sum so required, payable in such number of years as will be required for the net rents to meet the whole sum of such assessment, and bearing interest at not more than the rate provided in section 9.95 of the Revised Code as the tax commissioner determines. Such notes shall not be sold for less than par. Such notes and interest thereon shall be a lien upon the rents, earnings, or proceeds of any sale of such lands so assessed, and the sum of the notes and interest shall be paid out of the rents, earnings, or proceeds of such sale by the tax commissioner.

Section 5709.07 | Exemption of schools, churches, and colleges.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The following property shall be exempt from taxation:

(1) Real property used by a school for primary or secondary educational purposes, including only so much of the land as is necessary for the proper occupancy, use, and enjoyment of such real property by the school for primary or secondary educational purposes. The exemption under division (A)(1) of this section does not apply to any portion of the real property not used for primary or secondary educational purposes.

For purposes of division (A)(1) of this section:

(a) "School" means a public or nonpublic school. "School" excludes home education as authorized under section 3321.042 of the Revised Code.

(b) "Public school" includes schools of a school district, STEM schools established under Chapter 3326. of the Revised Code, community schools established under Chapter 3314. of the Revised Code, and educational service centers established under section 3311.05 of the Revised Code.

(c) "Nonpublic school" means a nonpublic school for which the director of education and workforce has issued a charter pursuant to section 3301.16 of the Revised Code and prescribes minimum standards under division (D)(2) of section 3301.07 of the Revised Code.

(2) Houses used exclusively for public worship, the books and furniture in them, and the ground attached to them that is not leased or otherwise used with a view to profit and that is necessary for their proper occupancy, use, and enjoyment;

(3) Real property owned and operated by a church that is used primarily for church retreats or church camping, and that is not used as a permanent residence. Real property exempted under division (A)(3) of this section may be made available by the church on a limited basis to charitable and educational institutions if the property is not leased or otherwise made available with a view to profit.

(4) Public colleges and academies and all buildings connected with them, and all lands connected with public institutions of learning, not used with a view to profit, including those buildings and lands that satisfy all of the following:

(a) The buildings are used for housing for full-time students or housing-related facilities for students, faculty, or employees of a state university, or for other purposes related to the state university's educational purpose, and the lands are underneath the buildings or are used for common space, walkways, and green spaces for the state university's students, faculty, or employees. As used in this division, "housing-related facilities" includes both parking facilities related to the buildings and common buildings made available to students, faculty, or employees of a state university. The leasing of space in housing-related facilities shall not be considered an activity with a view to profit for purposes of division (A)(4) of this section.

(b) The buildings and lands are supervised or otherwise under the control, directly or indirectly, of an organization that is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended, and the state university has entered into a qualifying joint use agreement with the organization that entitles the students, faculty, or employees of the state university to use the lands or buildings;

(c) The state university has agreed, under the terms of the qualifying joint use agreement with the organization described in division (A)(4)(b) of this section, that the state university, to the extent applicable under the agreement, will make payments to the organization in amounts sufficient to maintain agreed-upon debt service coverage ratios on bonds related to the lands or buildings.

(B) This section shall not extend to leasehold estates or real property held under the authority of a college or university of learning in this state; but leaseholds, or other estates or property, real or personal, the rents, issues, profits, and income of which is given to a municipal corporation, school district, or subdistrict in this state exclusively for the use, endowment, or support of schools for the free education of youth without charge shall be exempt from taxation as long as such property, or the rents, issues, profits, or income of the property is used and exclusively applied for the support of free education by such municipal corporation, district, or subdistrict. Division (B) of this section shall not apply with respect to buildings and lands that satisfy all of the requirements specified in divisions (A)(4)(a) to (c) of this section.

(C) For purposes of this section, if the requirements specified in divisions (A)(4)(a) to (c) of this section are satisfied, the buildings and lands with respect to which exemption is claimed under division (A)(4) of this section shall be deemed to be used with reasonable certainty in furthering or carrying out the necessary objects and purposes of a state university.

(D) As used in this section:

(1) "Church" means a fellowship of believers, congregation, society, corporation, convention, or association that is formed primarily or exclusively for religious purposes and that is not formed for the private profit of any person.

(2) "State university" has the same meaning as in section 3345.011 of the Revised Code.

(3) "Qualifying joint use agreement" means an agreement that satisfies all of the following:

(a) The agreement was entered into before June 30, 2004;

(b) The agreement is between a state university and an organization that is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended; and

(c) The state university that is a party to the agreement reported to the chancellor of higher education that the university maintained a headcount of at least twenty-five thousand students on its main campus during the academic school year that began in calendar year 2003 and ended in calendar year 2004.

Last updated September 21, 2023 at 9:44 AM

Section 5709.08 | Exemption of government and public property.

• Effective: March 30, 2006
• Latest Legislation: House Bill 530 - 126th General Assembly

(A)(1) Real or personal property belonging to the state or United States used exclusively for a public purpose, and public property used exclusively for a public purpose, shall be exempt from taxation.

(2) For purposes of division (A)(1) of this section, real and personal property owned by the state, even when the property is leased or otherwise operated by a private party, and used as public service facilities described in section 1501.07 of the Revised Code, as concessions or other special projects described in division (F) of section 1531.06 of the Revised Code, as refuge harbors or marine recreational facilities described in section 1547.72 of the Revised Code, or areas described in section 1503.03 of the Revised Code, is hereby declared to be public property "used exclusively for a public purpose."

(B) Real and personal property, when devoted to public use and not held for pecuniary profit, owned by an adjoining state or any political subdivision or agency of such adjoining state, which would be exempt from taxation if owned by the state of Ohio or a political subdivision or agency thereof, shall be exempt from taxation providing that such adjoining state exempts from taxation real and personal property devoted to public use and not held for pecuniary profit, owned by the state of Ohio or any political subdivision or agency thereof, which would be exempt from taxation if owned by the adjoining state or political subdivision or agency thereof.

Section 5709.081 | Exempting public recreational facility used for athletic events.

• Effective: September 15, 2011
• Latest Legislation: Senate Bill 71 - 129th General Assembly

(A) Real and tangible personal property owned by a political subdivision that is a public recreational facility for athletic events shall be exempt from taxation if all of the following apply:

(1) The property is controlled and managed by a political subdivision or a county-related corporation or by a similar corporation under the direct control of a political subdivision and whose members and trustees are chosen or appointed by the subdivision;

(2) All revenues and receipts derived by the subdivision or corporation that controls and manages the property, after deducting amounts needed to pay necessary expenses for the operation and management of the property, accrue to the political subdivision owning the property;

(3) The property is not occupied and used for more than seven days in any calendar month by any private entity for profit or for more than a total of fifteen days in any calendar month by all such private entities for profit;

(4) The property is under the direction and control of the political subdivision or managing corporation whenever it is being used by a private entity for profit;

(5) The primary user or users of the property, if such a primary user exists, are controlled and managed by the political subdivision or corporation that controls and manages the property.

(B) Tangible personal property, and all buildings, structures, fixtures, and improvements of any kind to the land, that are constructed or, in the case of personal property, acquired after March 2, 1992, and are part of or used in a public recreational facility used by a major league professional athletic team or a class A to class AAA minor league affiliate of a major league baseball team for a significant portion of its home schedule, and land acquired by a political subdivision in 1999 for such purposes or originally leased from a political subdivision, such political subdivision qualifying as such pursuant to division (H) of this section, in 1998 for such purposes, are declared to be public property used for a public purpose and are exempt from taxation, if all of the following apply:

(1) Such property, or the land upon which such property is located if such land was originally leased in 1998 from a political subdivision that qualifies as such pursuant to division (H) of this section, is owned by one or more political subdivisions or by a corporation controlled by such subdivisions;

(2) Such property was or is any of the following:

(a) Constructed or, in the case of personal property, acquired pursuant to an agreement with a municipal corporation to implement a development, redevelopment, or renewal plan for an area declared by the municipal corporation to be a slum or blighted area, as those terms are defined in section 725.01 of the Revised Code;

(b) Financed in whole or in part with public obligations as defined in section 5709.76 of the Revised Code or otherwise paid for in whole or in part by one or more political subdivisions;

(c) An improvement or addition to property defined in division (B)(2)(a) or (b) of this section.

(3) Such property is controlled and managed by either of the following:

(a) One or more of the political subdivisions or the corporation that owns it;

(b) A designee, tenant, or agent of such political subdivision or subdivisions or corporation pursuant to a management, lease, or similar written agreement.

(4) The primary user or users of such property, if a primary user or primary users exist, either:

(a) Are controlled and managed by one or more of the political subdivisions or the corporation that owns the property; or

(b) Operate under leases, licenses, management agreements, or similar arrangements with, and providing for the payment of rents, revenues, or other remuneration to, one or more of the political subdivisions or the corporation that owns the property.

(5) Any residual cash accrues to the political subdivision or subdivisions that own the property or that control the corporation that owns the property, and is used for the public purposes of the subdivision or subdivisions. As used in division (B)(5) of this section, "residual cash" means any revenue and receipts derived from the property by the political subdivision or subdivisions or corporation that owns the property and that are available for unencumbered use by the political subdivision or subdivisions or corporation, after deducting amounts needed to make necessary expenditures, pay debt service, and provide for working capital related to the ownership, management, operation, and use of the property, including payments of taxes on the taxable part of the public recreational facility, contractually obligated payments or deposits into reserves or otherwise, and service payments under section 307.699 of the Revised Code.

(C) The exemption provided in division (B) of this section also applies to both of the following:

(1) The property during its construction or, in the case of tangible personal property, acquisition during the construction period, if the owner meets the condition of division (B)(1) of this section and has agreements that provide for the satisfaction of all other conditions of division (B) of this section upon the completion of the construction;

(2) Any improvement or addition made after March 2, 1992, to a public recreational facility that was constructed before March 2, 1992, as long as all other conditions in division (B) of this section are met.

(D) A corporation that owns property exempt from taxation under division (B) of this section is a public body for the purposes of section 121.22 of the Revised Code. The corporation's records are public records for the purposes of section 149.43 of the Revised Code, except records related to matters set forth in division (G) of section 121.22 of the Revised Code and records related to negotiations that are not yet completed for financing, leases, or other agreements.

(E) The exemption under division (B) of this section applies to property that is owned by the political subdivision or subdivisions or the corporation that owns the public recreational facility. Tangible personal property owned by users, managers, or lessees of the facility is taxable when used in the public recreational facility.

(F) All real property constituting a public recreational facility, including the land on which the facility is situated, that is owned by a municipal corporation and used primarily by an independent professional minor league baseball team for a significant portion of its home schedule is declared to be public property used for a public purpose, and is exempt from taxation, if the facility is constructed in 2008 or thereafter, the team operates at the facility under a lease, license, management agreement, or similar arrangement with the municipal corporation that requires the team to pay rent, revenue, or other remuneration to the municipal corporation, and any residual cash, as defined in division (B)(5) of this section, that accrues to the municipal corporation is used for the public purposes of the municipal corporation.

For the purposes of this division, an independent professional minor league baseball team is a baseball team that employs professional players and that is a member of an established league composed of teams that are not affiliated with a constituent member club of the association known as major league baseball.

(G) Nothing in this section or in any other section of the Revised Code prohibits or otherwise precludes an agreement between a political subdivision, or a corporation controlled by a political subdivision, that owns or operates a public recreational facility that is exempted from taxation under division (A), (B), or (F) of this section and the board of education of a school district or the legislative authority of a municipal corporation, or both, in which all or a part of that facility is located, providing for payments to the school district or municipal corporation, or both, in lieu of taxes that otherwise would be charged against real and tangible personal property exempted from taxation under this section, for a period of time and under such terms and conditions as the legislative authority of the political subdivision and the board of education or municipal legislative authority, or both, may agree, which agreements are hereby specifically authorized.

(H) As used in this section, "political subdivision" includes the state or an agency of the state if the city, local, or exempted village school district in which the property is situated expressly consents to exempting the property from taxation.

Section 5709.082 | Distribution of municipal income tax revenues from new employees at major league facilities.

• Effective: March 2, 1992
• Latest Legislation: House Bill 228 - 119th General Assembly

(A) As used in this section, "new employee" means both of the following:

(1) Every person employed in the construction of property exempt from taxation under division (C)(1) of section 5709.081 of the Revised Code;

(2) A person to whom division (A)(1) of this section does not apply, who works at the site of real property exempt from taxation under division (B) or (C)(1) of section 5709.081 of the Revised Code, and who has not been subject, prior to working at that site, unless he was first employed for the purpose of working at that site, to income taxes within the previous two years to the municipal corporation in which the site is located on income derived from employment with his current employer. However, a replacement for a person who is not a "new employee" is also not a "new employee."

(B) A municipal corporation in which is located property exempt from taxation under division (B) or (C)(1) of section 5709.081 of the Revised Code and that is the political subdivision, or one of the political subdivisions, in control of a corporation controlled pursuant to division (B)(1) of that section, shall pay from its general fund or a special fund established for the purposes of this section to the county auditor an amount equal to fifty per cent of any municipal income tax revenue it derives from new employees. The payment for the tax year for which the municipal income taxes were collected shall be made on or before the date that the first payment of real property taxes for that same tax year are due without penalty under section 323.12 of the Revised Code. The municipal corporation shall adjust its payment for a tax year to reflect additional tax revenue received or refunds given during that year for previous tax years for which payments under this section were made. The county auditor shall distribute payments under this section to the taxing districts that would have received property tax revenue from the exempt property if it was not tax exempt, in the same proportions as property taxes are distributed for the tax year for which a payment is made.

Payments under this section shall be made to compensate the taxing districts for the loss of property tax revenue resulting from the tax exemption.

Section 5709.083 | Exemption for eligible county projects.

• Effective: December 28, 2006
• Latest Legislation: House Bill 699 - 126th General Assembly

Real and personal property comprising a project undertaken, financed, operated, or maintained by an eligible county under section 307.695 of the Revised Code is exempt from taxation so long as the project remains owned by the eligible county.

As used in this section, "eligible county" and "project" have the same meanings as in section 307.695 of the Revised Code.

Section 5709.084 | Exemption of convention centers.

• Effective: October 24, 2024
• Latest Legislation: Senate Bill 98 - 135th General Assembly

Real and personal property comprising a convention center that is constructed or, in the case of personal property, acquired, after January 1, 2010, are exempt from taxation if the convention center is located in a county having a population, when construction of the convention center commences, of more than one million two hundred thousand according to the most recent federal decennial census, and if the convention center, or the land upon which the convention center is situated, is owned or leased by the county. For the purposes of this section, construction of the convention center commences upon the earlier of issuance of debt to finance all or a portion of the convention center, demolition of existing structures on the site, or grading of the site in preparation for construction.

Real and personal property comprising a convention center owned by the largest city in a county having a population greater than seven hundred thousand but less than nine hundred thousand according to the most recent federal decennial census is exempt from taxation, regardless of whether the property is leased to or otherwise operated or managed by a person other than the city.

Real and personal property comprising a convention center or arena owned by a convention facilities authority in a county having a population greater than seven hundred fifty thousand according to the most recent federal decennial census is exempt from taxation, regardless of whether the property is leased to or otherwise operated or managed by a person other than the convention facilities authority, notwithstanding section 351.12 of the Revised Code.

Real and personal property comprising a convention center or arena owned by the largest city in a county having a population greater than two hundred thirty-five thousand but less than three hundred thousand according to the most recent federal decennial census at the time of the construction or acquisition of the convention center or arena is exempt from taxation, regardless of whether the property is leased to or otherwise operated or managed by a person other than the city.

Real and personal property comprising a convention center or arena owned by the city in which the convention center or arena is located, and located in a county having a population greater than five hundred thousand but less than six hundred thousand according to the most recent federal decennial census at the time of the construction of the convention center or arena, is exempt from taxation, regardless of whether the property is leased to or otherwise operated or managed by a person other than the city.

As used in this section, "convention center" and "arena" have the same meanings as in section 307.695 of the Revised Code.

Last updated August 28, 2024 at 4:44 PM

Section 5709.09 | Exemption of nature preserves and environmental projects.

• Effective: July 21, 2022
• Latest Legislation: House Bill 175 - 134th General Assembly

(A) Real property or any estate, interest, or right therein dedicated in accordance with section 1517.05 of the Revised Code is exempt from taxation.

(B) Real property is exempt from taxation if the property is owned or held by an organization that is organized for the purpose of natural resources protection, preservation, restoration, or enhancement or water quality improvement and that is described under section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the Internal Revenue Code and if either of the following apply:

(1) The property is subject to an environmental response project described in division (E)(2) of section 5301.80 of the Revised Code.

(2) The property is subject to a nature water project that receives funding from the H2Ohio fund established in section 126.60 of the Revised Code.

Last updated May 11, 2022 at 3:59 PM

Section 5709.10 | Exemption of public property.

• Effective: April 12, 2021
• Latest Legislation: House Bill 665 - 133rd General Assembly

Market houses and other houses or halls, public squares, or other public grounds of a municipal corporation or township used exclusively for public purposes or erected by taxation for such purposes, land and multi-level parking structures used exclusively for a public purpose and owned and operated by a municipal corporation under section 717.05 of the Revised Code or by an urban township that has adopted a limited home rule form of government under section 504.02 of the Revised Code that charges no fee for the privilege of parking thereon, property used as a county fairgrounds that is owned by the board of county commissioners, property owned by a county agricultural society that is used in furtherance of the purposes of the society, and property of housing authorities created and organized under and for the purposes of sections 3735.27 to 3735.50 of the Revised Code, which property is hereby declared to be public property used exclusively for a public purpose, notwithstanding that parts thereof may be lawfully leased, shall be exempt from taxation.

Section 5709.101 | Exemptions for certain real property.

• Effective: September 29, 2017
• Latest Legislation: House Bill 49 - 132nd General Assembly

Real property satisfying all of the following conditions shall be exempt from taxation:

(A) If any part of the property is held out for rent to tenants, less than seventy-five per cent of the square footage of that part is leased by one or more tenants.

(B) On the tax lien date, it is owned by a municipal corporation to which the property was conveyed by a community improvement corporation as defined in section 1724.01 of the Revised Code.

(C) It was conveyed to that community improvement corporation by the United States government or any of its agencies.

(D) It is subject to an agreement under which that municipal corporation is required to convey the property to that community improvement corporation before the property may be developed.

Section 5709.11 | Exemption of municipal utility works.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

Works, machinery, pipe lines, and fixtures belonging to a municipal corporation and used exclusively for conveying water to it, or for heating or lighting it, shall be exempt from taxation.

Section 5709.111 | Exemption of property used exclusively in treatment, distribution, and sale of water to consumers.

• Effective: September 3, 1986
• Latest Legislation: House Bill 720 - 116th General Assembly

All real and personal property belonging to a political subdivision or to a nonprofit corporation as defined in division (C) of section 1702.01 of the Revised Code is exempt from taxation if it is used exclusively in the treatment, distribution, and sale of water to consumers.

Section 5709.112 | Exemption of tangible personal property used in oil or gas recovery.

• Effective: June 30, 2005
• Latest Legislation: House Bill 66 - 126th General Assembly

For tax year 2006 and each tax year thereafter, all tangible personal property used in the recovery of oil or gas, when installed and located on the premises or leased premises of the owner, shall be exempt from taxation. Such tangible personal property shall be subject to taxation if it is not installed on the premises or leased premises of the owner, or if it is used for the transmission, transportation, or distribution of oil or gas, as provided in section 5711.22 of the Revised Code. The tax commissioner may adopt rules governing the administration of the exemption provided by this section.

This section does not apply to any taxpayer that is required to file a report under section 5727.08 of the Revised Code.

Section 5709.12 | Exemption of property used for public or charitable purposes.

• Effective: September 29, 2017
• Latest Legislation: House Bill 49 - 132nd General Assembly

(A) As used in this section, "independent living facilities" means any residential housing facilities and related property that are not a nursing home, residential care facility, or residential facility as defined in division (A) of section 5701.13 of the Revised Code.

(B) Lands, houses, and other buildings belonging to a county, township, or municipal corporation and used exclusively for the accommodation or support of the poor, or leased to the state or any political subdivision for public purposes shall be exempt from taxation. Real and tangible personal property belonging to institutions that is used exclusively for charitable purposes shall be exempt from taxation, including real property belonging to an institution that is a nonprofit corporation that receives a grant under the Thomas Alva Edison grant program authorized by division (C) of section 122.33 of the Revised Code at any time during the tax year and being held for leasing or resale to others. If, at any time during a tax year for which such property is exempted from taxation, the corporation ceases to qualify for such a grant, the director of development shall notify the tax commissioner, and the tax commissioner shall cause the property to be restored to the tax list beginning with the following tax year. All property owned and used by a nonprofit organization exclusively for a home for the aged, as defined in section 5701.13 of the Revised Code, also shall be exempt from taxation.

(C)(1) If a home for the aged described in division (B)(1) of section 5701.13 of the Revised Code is operated in conjunction with or at the same site as independent living facilities, the exemption granted in division (B) of this section shall include kitchen, dining room, clinic, entry ways, maintenance and storage areas, and land necessary for access commonly used by both residents of the home for the aged and residents of the independent living facilities. Other facilities commonly used by both residents of the home for the aged and residents of independent living units shall be exempt from taxation only if the other facilities are used primarily by the residents of the home for the aged. Vacant land currently unused by the home, and independent living facilities and the lands connected with them are not exempt from taxation. Except as provided in division (A)(1) of section 5709.121 of the Revised Code, property of a home leased for nonresidential purposes is not exempt from taxation.

(2) Independent living facilities are exempt from taxation if they are operated in conjunction with or at the same site as a home for the aged described in division (B)(2) of section 5701.13 of the Revised Code; operated by a corporation, association, or trust described in division (B)(1)(b) of that section; operated exclusively for the benefit of members of the corporation, association, or trust who are retired, aged, or infirm; and provided to those members without charge in consideration of their service, without compensation, to a charitable, religious, fraternal, or educational institution. For the purposes of division (C)(2) of this section, "compensation" does not include furnishing room and board, clothing, health care, or other necessities, or stipends or other de minimis payments to defray the cost thereof.

(D)(1) A private corporation established under federal law, as defined in 36 U.S.C. 1101, Pub. L. No. 102-199, 105 Stat. 1629, as amended, the objects of which include encouraging the advancement of science generally, or of a particular branch of science, the promotion of scientific research, the improvement of the qualifications and usefulness of scientists, or the increase and diffusion of scientific knowledge is conclusively presumed to be a charitable or educational institution. A private corporation established as a nonprofit corporation under the laws of a state that is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C.A. 1, as amended, and that has as its principal purpose one or more of the foregoing objects also is conclusively presumed to be a charitable or educational institution.

The fact that an organization described in this division operates in a manner that results in an excess of revenues over expenses shall not be used to deny the exemption granted by this section, provided such excess is used, or is held for use, for exempt purposes or to establish a reserve against future contingencies; and, provided further, that such excess may not be distributed to individual persons or to entities that would not be entitled to the tax exemptions provided by this chapter. Nor shall the fact that any scientific information diffused by the organization is of particular interest or benefit to any of its individual members be used to deny the exemption granted by this section, provided that such scientific information is available to the public for purchase or otherwise.

(2) Division (D)(2) of this section does not apply to real property exempted from taxation under this section and division (A)(3) of section 5709.121 of the Revised Code and belonging to a nonprofit corporation described in division (D)(1) of this section that has received a grant under the Thomas Alva Edison grant program authorized by division (C) of section 122.33 of the Revised Code during any of the tax years the property was exempted from taxation.

When a private corporation described in division (D)(1) of this section sells all or any portion of a tract, lot, or parcel of real estate that has been exempt from taxation under this section and section 5709.121 of the Revised Code, the portion sold shall be restored to the tax list for the year following the year of the sale and, except in connection with a sale and transfer of such a tract, lot, or parcel to a county land reutilization corporation organized under Chapter 1724. of the Revised Code, a charge shall be levied against the sold property in an amount equal to the tax savings on such property during the four tax years preceding the year the property is placed on the tax list. The tax savings equals the amount of the additional taxes that would have been levied if such property had not been exempt from taxation.

The charge constitutes a lien of the state upon such property as of the first day of January of the tax year in which the charge is levied and continues until discharged as provided by law. The charge may also be remitted for all or any portion of such property that the tax commissioner determines is entitled to exemption from real property taxation for the year such property is restored to the tax list under any provision of the Revised Code, other than sections 725.02, 1728.10, 3735.67, 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.71, 5709.73, 5709.78, and 5709.84, upon an application for exemption covering the year such property is restored to the tax list filed under section 5715.27 of the Revised Code.

(E)(1) Real property held by an organization organized and operated exclusively for charitable purposes as described under section 501(c)(3) of the Internal Revenue Code and exempt from federal taxation under section 501(a) of the Internal Revenue Code, 26 U.S.C.A. 501(a) and (c)(3), as amended, for the purpose of constructing or rehabilitating residences for eventual transfer to qualified low-income families through sale, lease, or land installment contract, shall be exempt from taxation.

The exemption shall commence on the day title to the property is transferred to the organization and shall continue to the end of the tax year in which the organization transfers title to the property to a qualified low-income family. In no case shall the exemption extend beyond the second succeeding tax year following the year in which the title was transferred to the organization. If the title is transferred to the organization and from the organization to a qualified low-income family in the same tax year, the exemption shall continue to the end of that tax year. The proportionate amount of taxes that are a lien but not yet determined, assessed, and levied for the tax year in which title is transferred to the organization shall be remitted by the county auditor for each day of the year that title is held by the organization.

Upon transferring the title to another person, the organization shall file with the county auditor an affidavit affirming that the title was transferred to a qualified low-income family or that the title was not transferred to a qualified low-income family, as the case may be; if the title was transferred to a qualified low-income family, the affidavit shall identify the transferee by name. If the organization transfers title to the property to anyone other than a qualified low-income family, the exemption, if it has not previously expired, shall terminate, and the property shall be restored to the tax list for the year following the year of the transfer and a charge shall be levied against the property in an amount equal to the amount of additional taxes that would have been levied if such property had not been exempt from taxation. The charge constitutes a lien of the state upon such property as of the first day of January of the tax year in which the charge is levied and continues until discharged as provided by law.

The application for exemption shall be filed as otherwise required under section 5715.27 of the Revised Code, except that the organization holding the property shall file with its application documentation substantiating its status as an organization organized and operated exclusively for charitable purposes under section 501(c)(3) of the Internal Revenue Code and its qualification for exemption from federal taxation under section 501(a) of the Internal Revenue Code, and affirming its intention to construct or rehabilitate the property for the eventual transfer to qualified low-income families.

As used in this division, "qualified low-income family" means a family whose income does not exceed two hundred per cent of the official federal poverty guidelines as revised annually in accordance with section 673(2) of the "Omnibus Budget Reconciliation Act of 1981," 95 Stat. 511, 42 U.S.C.A. 9902, as amended, for a family size equal to the size of the family whose income is being determined.

(2) Real property constituting a retail store, including the land on which the retail store is located, that is owned and operated by an organization described in division (E)(1) of this section shall be exempt from taxation if the retail store sells primarily donated items suitable for residential housing purposes and if the proceeds of such sales are used solely for the purposes of the organization.

(F)(1) Real property that is acquired and held by a county land reutilization corporation organized under Chapter 1724. of the Revised Code and that is not exempt from taxation under Chapter 5722. of the Revised Code shall be deemed real property used for a public purpose and shall be exempt from taxation until sold or transferred by the corporation. Notwithstanding section 5715.27 of the Revised Code, a county land reutilization corporation is not required to apply to any county or state agency in order to qualify for the exemption.

(2) Real property that is acquired and held by an electing subdivision other than a county land reutilization corporation on or after April 9, 2009, for the public purpose of implementing an effective land reutilization program or for a related public purpose, and that is not exempt from taxation under Chapter 5722. of the Revised Code, shall be exempt from taxation until sold or transferred by the electing subdivision. Notwithstanding section 5715.27 of the Revised Code, an electing subdivision is not required to apply to any county or state agency in order to qualify for an exemption with respect to property acquired or held for such purposes on or after such date, regardless of how the electing subdivision acquires the property.

As used in this section, "electing subdivision" and "land reutilization program" have the same meanings as in section 5722.01 of the Revised Code, and "county land reutilization corporation" means a county land reutilization corporation organized under Chapter 1724. of the Revised Code and any subsidiary wholly owned by such a county land reutilization corporation that is identified as "a wholly owned subsidiary of a county land reutilization corporation" in the deed of conveyance transferring title to the subsidiary.

In lieu of the application for exemption otherwise required to be filed as required under section 5715.27 of the Revised Code, a county land reutilization corporation holding the property shall, upon the request of any county or state agency, submit its articles of incorporation substantiating its status as a county land reutilization corporation.

(G) Real property that is owned by an organization described under section 501(c)(3) of the Internal Revenue Code and exempt from federal income taxation under section 501(a) of the Internal Revenue Code and that is used by that organization exclusively for receiving, processing, or distributing human blood, tissues, eyes, or organs or for research and development thereof shall be exempt from taxation.

(H) Real property that is owned by an organization described under section 501(c)(3) of the Internal Revenue Code and exempt from federal income taxation under section 501(a) of the Internal Revenue Code and that received a loan from the federal small business administration as a participating intermediary in the federal microloan program under 15 U.S.C. 636(m) shall be exempt from taxation if the property is used by that organization primarily for small business lending, economic development, job training, entrepreneur education, or associated administrative purposes as such a participating intermediary.

Section 5709.121 | Exclusive charitable or public purposes defined.

• Effective: October 24, 2024
• Latest Legislation: Senate Bill 98 - 135th General Assembly

(A) Real property and tangible personal property belonging to a charitable, religious, or educational institution or to the state or a political subdivision, shall be considered as used exclusively for charitable or public purposes by such institution, the state, or political subdivision, if it meets one of the following requirements:

(1) It is used by such institution, the state, or political subdivision, or by one or more other charitable, religious, or educational institutions, the state, or political subdivisions under a lease, sublease, or other contractual arrangement:

(a) As a community or area center in which presentations in music, dramatics, the arts, and related fields are made in order to foster public interest and education therein;

(b) As a children's, science, history, or natural history museum that is open to the general public;

(c) For other charitable, educational, or public purposes or used for public worship.

(2) It is made available under the direction or control of such institution, the state, or political subdivision for use in furtherance of or incidental to its charitable, educational, or public purposes or for public worship and not with the view to profit.

(3) It is used by an organization described in division (D) of section 5709.12 of the Revised Code. If the organization is a corporation that receives a grant under the Thomas Alva Edison grant program authorized by division (C) of section 122.33 of the Revised Code at any time during the tax year, "used," for the purposes of this division, includes holding property for lease or resale to others.

(B)(1) Property described in division (A)(1)(a) or (b) of this section shall continue to be considered as used exclusively for charitable or public purposes even if the property is conveyed through one conveyance or a series of conveyances to an entity that is not a charitable or educational institution and is not the state or a political subdivision, provided that all of the following conditions apply with respect to that property:

(a) The property was listed as exempt on the county auditor's tax list and duplicate for the county in which it is located for the tax year immediately preceding the year in which the property is conveyed through one conveyance or a series of conveyances;

(b) The property is conveyed through one conveyance or a series of conveyances to an entity that does any of the following:

(i) Leases at least forty-five per cent of the property, through one lease or a series of leases, to the entity that owned or occupied the property for the tax year immediately preceding the year in which the property is conveyed or to an affiliate of that entity;

(ii) Contracts, directly or indirectly to have renovations performed as described in division (B)(1)(d) of this section and is at least partially owned by a nonprofit organization described in section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of that code.

(c) The property includes improvements that are at least fifty years old;

(d) The property is being renovated in connection with a claim for historic preservation tax credits available under federal law;

(e) All or a portion of the property continues to be used for the purposes described in division (A)(1)(a) or (b) of this section after its conveyance; and

(f) The property is certified by the United States secretary of the interior as a "certified historic structure" or certified as part of a certified historic structure.

(2) Notwithstanding section 5715.27 of the Revised Code, an application for exemption from taxation of property described in division (B)(1) of this section may be filed by either the owner of the property or an occupant.

(C) For purposes of this section, an institution that meets all of the following requirements is conclusively presumed to be a charitable institution:

(1) The institution is a nonprofit corporation or association, no part of the net earnings of which inures to the benefit of any private shareholder or individual;

(2) The institution is exempt from federal income taxation under section 501(a) of the Internal Revenue Code;

(3) The majority of the institution's board of directors are appointed by the mayor or legislative authority of a municipal corporation or a board of county commissioners, or a combination thereof;

(4) The primary purpose of the institution is to assist in the development and revitalization of downtown urban areas.

(D) For purposes of division (A)(1)(b) of this section, the status of a museum as open to the general public shall be conclusive if the museum is accredited by the American alliance of museums or a successor organization.

(E)(1) Qualifying real property owned by an institution that meets the following requirements shall be considered as used exclusively for charitable purposes, and the institution shall be considered a charitable institution for purposes of this section and section 5709.12 of the Revised Code:

(a) The institution is an organization described under section 501(c)(3) of the Internal Revenue Code and exempt from federal income taxation under section 501(a) of the Internal Revenue Code.

(b) The institution's primary purpose is to acquire, develop, lease, or otherwise provide suitable housing to individuals with developmental disabilities.

(c) Unless otherwise provided by division (E)(3) of this section, the institution receives at least a portion of its funding from one or more county boards of developmental disabilities to assist in the institution's primary purpose described in division (E)(1)(b) of this section.

(2) As used in division (E) of this section, "qualifying real property" means real property that is used primarily in one of the following manners:

(a) The property is used by the institution described in division (E)(1) of this section for the purpose described in division (E)(1)(b) of this section.

(b) The property is leased or otherwise provided by the institution described in division (E)(1) of this section to individuals with developmental disabilities and used by those individuals as housing.

(c) The property is leased or otherwise provided by the institution described in division (E)(1) of this section to another charitable institution, and that charitable institution uses the property exclusively for charitable purposes.

(3) The requirement prescribed by division (E)(1)(c) of this section shall be considered to be met if: (a) the institution contracts with an entity that receives at least a portion of its funding from one or more county boards of developmental disabilities; (b) the contracted entity performs services for individuals who lease the property for use as housing; and (c) those services assist in the institution's primary purpose described in division (E)(1)(b) of this section.

If the property owner qualifies as a charitable institution under the alternative requirements prescribed by division (E)(3) of this section, only the portion of the property that, as of the first day of January of the tax year, is either leased for use as housing by residents who are eligible to receive home and community-based services, as that term is defined in section 5123.01 of the Revised Code, or is a common area used by all residents of the property is qualifying real property and only those portions qualify for exemption from taxation.

(F)(1) Qualifying real property owned by an institution that meets all of the following requirements shall be considered as used exclusively for charitable purposes, and the institution shall be considered a charitable institution for purposes of this section and section 5709.12 of the Revised Code:

(a) The institution is either (i) an organization described under section 501(c)(3) of the Internal Revenue Code and exempt from federal income taxation under section 501(a) of the Internal Revenue Code that has as a primary purpose to acquire, develop, lease, or otherwise provide suitable supportive housing to individuals diagnosed with mental illness or substance use disorder and to families residing with such individuals or (ii) a limited liability company or limited partnership whose controlling or managing member or partner either is an organization described in division (F)(1)(a)(i) of this section or is wholly owned by one or more such organizations.

(b) One or more of the tax-exempt organizations identified in division (F)(1)(a) of this section receives at least a portion of its funding to assist in the organization's primary purpose described in division (F)(1)(a)(i) of this section from the department of mental health and addiction services; one or more county boards of alcohol, drug addiction, and mental health services; or a local continuum of care program governed by 42 U.S.C. 11381, et seq. and 24 C.F.R. part 578.

(2) As used in division (F) of this section, "qualifying real property" means real property that is used primarily in one of the following manners:

(a) The property is used by the institution described in division (F)(1) of this section for the purpose described in division (F)(1)(a)(i) of this section.

(b) The institution (i) leases or otherwise provides the property to individuals diagnosed with mental illness or substance use disorder and to the families residing with such individuals and (ii) makes supportive services available to such individuals and families.

(c) The property is leased or otherwise provided by that institution to another charitable institution, and that charitable institution uses the property exclusively for charitable purposes.

(G)(1) For tax years 2020 to 2024, a qualifying parking garage shall be considered as used exclusively for charitable purposes for the purpose of section 5709.12 of the Revised Code if all taxes, interest, and penalties levied and assessed against any property owned by the owner and operator of the qualifying parking garage, as described in division (G)(2)(b)(i) or (ii) of this section, have been paid in full for all of the tax years preceding the tax year for which the application for exemption is filed.

(2) As used in division (G) of this section:

(a) "Nonprofit arts institution" means an institution that is exempt from federal income taxation under section 501(a) of the Internal Revenue Code and whose primary purpose is to host or present performances in music, dramatics, the arts, and related fields in order to foster public interest and education therein.

(b) "Qualifying parking garage" means any real property that is used primarily for parking motor vehicles within or on a structure and that is either (i) owned and operated by a nonprofit arts institution or (ii) owned and operated by a limited liability company whose sole member is a nonprofit arts institution.

Last updated August 28, 2024 at 4:44 PM

Section 5709.13 | Exemption of property used as children's homes.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

The net income of any property which is used solely for the support of institutions used exclusively as homes for poor children, the real estate on which said institutions are located, and the buildings connected therewith, shall be exempt from taxation.

Section 5709.14 | Exemption of graveyards.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

Lands used exclusively as graveyards, or grounds for burying the dead, except such as are held by a person, company, or corporation with a view to profit, or for the purpose of speculating in the sale thereof, shall be exempt from taxation.

Section 5709.15 | Exemption of veterans funds and monuments.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

Funds raised and set apart for the purpose of building monuments to the veterans of this state, and monuments and monumental buildings shall be exempt from taxation.

Section 5709.16 | Exemption of monuments and memorials.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

Lands held and used as the place of interment of a distinguished deceased person and as the place of a monument or memorial to such person, together with funds raised or held for the purpose of maintaining such monument or memorial, and its place of erection, so long as they are held and used for such purpose, shall be exempt from taxation or assessment for any purpose.

Section 5709.17 | Exemption of property of memorial or cemetery associations or veterans' organizations.

• Effective: September 30, 2021
• Latest Legislation: House Bill 110 - 134th General Assembly

The following property shall be exempted from taxation:

(A) Real estate held or occupied by an association or corporation, organized or incorporated under the laws of this state relative to soldiers' memorial associations or monumental building associations and that, in the opinion of the trustees, directors, or managers thereof, is necessary and proper to carry out the object intended for such association or corporation;

(B) Real estate and tangible personal property held or occupied by a qualifying veterans' organization and used primarily for meetings and administration of the qualifying veterans' organization or for providing, on a not-for-profit basis, programs and supportive services to past or present members of the armed forces of the United States and their families, except real estate held by such an organization for the production of rental income in excess of thirty-six thousand dollars in a tax year, before accounting for any cost or expense incurred in the production of such income. For the purposes of this division, rental income includes only income arising directly from renting the real estate to others for consideration, but does not include income arising from renting the real estate to a qualifying veterans' organization.

As used in this division, "qualifying veterans' organization" means an organization that is incorporated under the laws of this state or the United States and that meets either of the following requirements:

(1) The organization qualifies for exemption from taxation under section 501(c)(19) or 501(c)(23) of the Internal Revenue Code.

(2) The organization meets the criteria for exemption under section 501(c)(19) of the Internal Revenue Code and regulations adopted pursuant thereto, but is exempt from taxation under section 501(c)(4) of the Internal Revenue Code.

(C) Tangible personal property held by a corporation chartered under 112 Stat. 1335, 36 U.S.C. 40701, described in section 501(c)(3) of the Internal Revenue Code, and exempt from taxation under section 501(a) of the Internal Revenue Code shall be exempt from taxation if it is property obtained as described in 112 Stat. 1335-1341, 36 U.S.C.A. Chapter 407.

(D) Real estate held or occupied by a fraternal organization and used primarily for meetings of and the administration of the fraternal organization or for providing, on a not-for-profit basis, educational or health services, except real estate held by such an organization for the production of rental income in excess of thirty-six thousand dollars in a tax year before accounting for any cost or expense incurred in the production of such income. For the purposes of this division, rental income includes only income arising directly from renting the real estate to others for consideration, but does not include income arising from renting the real estate to any fraternal organization for use primarily for meetings of and the administration of such fraternal organization or for providing, on a not-for-profit basis, educational or health services. As used in this division, "fraternal organization" means a domestic fraternal society, order, or association operating under the lodge, council, or grange system that qualifies for exemption from taxation under section 501(c)(5), 501(c)(8), or 501(c)(10) of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C. 1, as amended; that provides financial support for charitable purposes, as defined in division (B)(12) of section 5739.02 of the Revised Code; and that operates under either a state or national governing body that has been operating in this state for at least eighty-five years.

Last updated August 4, 2021 at 11:06 AM

Section 5709.18 | Exemption of prehistoric earthworks or historic buildings.

• Effective: August 24, 1976
• Latest Legislation: House Bill 418 - 111th General Assembly

Lands on which are situated prehistoric earthworks, or upon which stands an historic building which is preserved in commemoration of historic events in the settlement and development of the state, and which are purchased by any person, association, or company for the purpose of the preservation of such earthworks or historic building and are not held for profit but dedicated to public uses as prehistoric parks or as historic grounds, or which are dedicated under section 149.52 of the Revised Code, shall be exempt from taxation. The owners of such prehistoric parks or historic grounds may establish reasonable rules governing access thereto.

Section 5709.19 | Deduction for domestic animals.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

An individual resident of this state may deduct a sum not exceeding one hundred dollars, from the aggregate listed value of his domestic animals, whether used in business or not, as an exemption from taxation.

Section 5709.20 | Air or noise pollution control certificate - definitions.

• Effective: April 3, 2023
• Latest Legislation: House Bill 66 - 134th General Assembly

As used in sections 5709.20 to 5709.27 of the Revised Code:

(A) "Air contaminant" means particulate matter, dust, fumes, gas, mist, smoke, vapor, or odorous substances, or any combination thereof.

(B) "Air pollution control facility" means any property designed, constructed, or installed for the primary purpose of eliminating or reducing the emission of, or ground level concentration of, air contaminants generated at an industrial or commercial plant or site that renders air harmful or inimical to the public health or to property within this state, or such property installed on or after November 1, 1993, at a petroleum refinery for the primary purpose of eliminating or reducing substances within fuel that otherwise would create the emission of air contaminants upon the combustion of fuel.

(C) "Energy conversion" means the conversion of fuel or power usage and consumption from natural gas to an alternate fuel or power source other than propane, butane, naphtha, or fuel oil; or the conversion of fuel or power usage and consumption from fuel oil to an alternate fuel or power source other than natural gas, propane, butane, or naphtha.

(D) "Energy conversion facility" means any additional property or equipment designed, constructed, or installed after December 31, 1974, for use at an industrial or commercial plant or site for the primary purpose of energy conversion.

(E) "Exempt facility" means any of the facilities defined in division (B), (D), (F), (I), (K), or (L) of this section for which an exempt facility certificate is issued pursuant to section 5709.21 or for which a certificate remains valid under section 5709.201 of the Revised Code. "Exempt facility" includes both property that is owned and property that is leased by the holder of the exempt facility certificate or the person to which the certificate is issued.

(F) "Noise pollution control facility" means any property designed, constructed, or installed for use at an industrial or commercial plant or site for the primary purpose of eliminating or reducing, at that plant or site, the emission of sound which is harmful or inimical to persons or property, or materially reduces the quality of the environment, as shall be determined by the director of environmental protection within such standards for noise pollution control facilities and standards for environmental noise necessary to protect public health and welfare as may be promulgated by the United States environmental protection agency. In the absence of such United States environmental protection agency standards, the determination shall be made in accordance with generally accepted current standards of good engineering practice in environmental noise control.

(G) "Solid waste" means such unwanted residual solid or semi-solid material as results from industrial operations, including those of public utility companies, and commercial, distribution, research, agricultural, and community operations, including garbage, combustible or noncombustible, street dirt, and debris.

(H) "Solid waste energy conversion" means the conversion of solid waste into energy and the utilization of such energy for some useful purpose.

(I) "Solid waste energy conversion facility" means any property or equipment designed, constructed, or installed after December 31, 1974, for use at an industrial or a commercial plant or site for the primary purpose of solid waste energy conversion.

(J) "Thermal efficiency improvement" means the recovery and use of waste heat or waste steam produced incidental to electric power generation, industrial process heat generation, lighting, refrigeration, or space heating.

(K) "Thermal efficiency improvement facility" means any property or equipment designed, constructed, or installed after December 31, 1974, for use at an industrial or a commercial plant or site for the primary purpose of thermal efficiency improvement.

(L) "Industrial water pollution control facility" means any property designed, constructed, or installed for the primary purpose of collecting, hauling, or conducting industrial waste to a point of disposal or treatment; storing, filtering, processing, or disposing of industrial waste; reducing, controlling, or eliminating water pollution caused by industrial waste; or reducing, controlling, or eliminating the discharge into a disposal system of industrial waste or what would be industrial waste if discharged into the waters of this state. This division applies only to property related to an industrial water pollution control facility placed into operation or initially capable of operation after December 31, 1965, and installed pursuant to the approval of the environmental protection agency, department of natural resources, or any other governmental agency having authority to approve the installation of industrial water pollution control facilities. The definitions in section 6111.01 of the Revised Code, as applicable, apply to the terms used in this division.

(M) Property designed, constructed, installed, used, or placed in operation primarily for the safety, health, protection, or benefit, or any combination thereof, of personnel of a business, or primarily for a business purpose other than a purpose described in division (B), (D), (F), (I), (K), or (L) of this section, as applicable, is not an "exempt facility."

Last updated March 21, 2023 at 3:15 PM

Section 5709.201 | Continuation of certificates.

• Effective: March 27, 2020
• Latest Legislation: House Bill 197 - 133rd General Assembly

(A) Except as provided in divisions (C)(4)(a) and (c) of section 5709.22 and division (F) of section 5709.25 of the Revised Code, a certificate issued under section 5709.21, 5709.31, 5709.46, or 6111.31 of the Revised Code that was valid and in effect on June 26, 2003, shall continue in effect subject to the law as it existed before that date. Division (C)(4)(b) of section 5709.22 of the Revised Code does not apply to any certificate issued by the tax commissioner before July 1, 2003.

(B) Any applications pending on June 26, 2003, for which a certificate had not been issued on or before that date under section 6111.31 of the Revised Code shall be transferred to the tax commissioner for further administering. Sections 5709.20 to 5709.27 of the Revised Code apply to such pending applications, excluding the requirement of section 5709.212 of the Revised Code that applicants must pay the fee.

(C) For applications pending on June 26, 2003, division (D) of section 5709.25 of the Revised Code allowing the commissioner to assess any additional tax notwithstanding any other time limitations imposed by law on the denied portion of the applicant's claim applies only to tax periods that would otherwise be open to assessment on that date.

Section 5709.21 | Air or noise pollution control certificate.

• Effective: June 26, 2003
• Latest Legislation: House Bill 95 - 125th General Assembly

(A) As used in this section:

(1) "Exclusive property" means real and personal property that is installed, used, and necessary for the operation of an exempt facility, and that is not auxiliary property unless the auxiliary property exempt cost equals or exceeds eighty-five per cent of the total cost of the property.

(2) "Auxiliary property" means personal property installed, used, and necessary for the operation of an exempt facility that is also used in other operations of the business other than an exempt facility purpose described in section 5709.20 of the Revised Code. "Auxiliary property" does not include property with an auxiliary property exempt cost that is less than or equal to fifteen per cent of the total cost of such property.

(3) "Auxiliary property exempt cost" means the cost of auxiliary property calculated as follows:

(a) If the auxiliary property is used for an exempt facility purpose for discrete periods of time, the exempt cost shall be determined by the ratio of time the auxiliary property is in use in such exempt capacity to the total time it is in use. Division (A)(3)(a) of this section does not apply if the property is concurrently used for an exempt facility purpose and a nonexempt facility purpose.

(b) The applicant has the burden of proving the exempt cost of all auxiliary property not described in division (A)(3)(a) of this section.

(c) Any cost related to an expansion of the commercial or industrial site that is not related to the operation of the exempt facility shall not be included as an auxiliary exempt cost under division (A)(3) of this section.

(B) Application for an exempt facility certificate shall be filed with the tax commissioner in such manner and in such form as prescribed by the tax commissioner. The application shall contain plans and specifications of the property, including all materials incorporated or to be incorporated therein and their associated costs, and a descriptive list of all equipment acquired or to be acquired by the applicant for the exempt facility and its associated cost. If the commissioner finds that the property was designed primarily as an exempt facility and is suitable and reasonably adequate for such purpose and is intended for such purpose, the commissioner shall enter a finding and issue a certificate to that effect. The effective date of the certificate shall be the date the application was made for such certificate or the date of the construction of the facility, whichever is earlier.

Nothing in this section shall be construed to extend the time period to file, to keep the time period to file open, or supersede the requirement of filing a tax refund or other tax reduction request in the manner and within the time prescribed by law.

(C)(1) Except as provided in division (C)(2) of this section, the certificate shall permit tax exemption pursuant to section 5709.25 of the Revised Code only for that portion of such exempt facility that is exclusive property used for a purpose enumerated in section 5709.20 of the Revised Code.

(2) Auxiliary property shall be permitted a partial tax exemption under section 5709.25 of the Revised Code, but only to the extent allowed pursuant to division (A)(3) of this section.

(D) The tax commissioner may allow an applicant to file one application that applies to more than one exempt facility that are the same or substantially similar, so long as such facilities are located within the same county.

Section 5709.211 | Opinion of a director required before issuance of exempt facility certificate.

• Effective: September 13, 2018
• Latest Legislation: House Bill 430 - 132nd General Assembly

(A) Before issuing an exempt facility certificate pursuant to section 5709.21 of the Revised Code, the tax commissioner shall provide a copy of a properly completed application to, and obtain the opinion of, one of the following persons:

(1) The director of environmental protection in the case of an exempt facility described in division (B) or (F) of section 5709.20 of the Revised Code or, when applicable, division (L) of that section;

(2) The director of natural resources in the case of an exempt facility described in division (L) of section 5709.20 of the Revised Code, when applicable;

(3) The director of development in the case of an application for an exempt facility described in division (D), (I), or (K) of section 5709.20 of the Revised Code.

The opinion shall provide the commissioner with a recommendation of whether the property is primarily designed, constructed, installed, and used as an exempt facility. The applicant shall provide additional information upon request by the tax commissioner, the director of environmental protection, the director of natural resources, or the director of development, and allow them to inspect the property listed in the application for the purposes of sections 5709.20 to 5709.27 of the Revised Code. The tax commissioner shall provide to the applicant a copy of the opinion issued by the director of environmental protection, director of natural resources, or director of the department of development, as applicable.

(B) The opinions of the director of the environmental protection agency, the director of natural resources, and the director of development under division (A) of this section or division (C)(4) of section 5709.22 of the Revised Code are not final actions or orders subject to appeal.

Section 5709.212 | Fees for exempt facility certificate.

• Effective: September 13, 2018
• Latest Legislation: House Bill 430 - 132nd General Assembly

(A) With every application for an exempt facility certificate filed pursuant to section 5709.21 of the Revised Code, the applicant shall pay a fee equal to one-half of one per cent of the total exempt facility project cost, not to exceed two thousand dollars. If the director of environmental protection is required to provide the opinion for an application, the fee shall be credited to the non-Title V clean air fund created in section 3704.035 of the Revised Code for use in administering section 5709.211 of the Revised Code, unless the application is for an industrial water pollution control facility. In such a case, the fee shall be credited to the surface water protection fund created in section 6111.038 of the Revised Code for use in administering section 5709.211 of the Revised Code. If the director of development or director of natural resources is required to provide the opinion for an application, the fee for each exempt facility application shall be credited to the exempt facility inspection fund, which is hereby created in the state treasury, for appropriation to the development services agency or department of natural resources, as applicable, for use in administering section 5709.211 of the Revised Code.

An applicant is not entitled to any tax exemption under section 5709.25 of the Revised Code until the fee required by this section is paid. The fee required by this section is not refundable, and is due with the application for an exempt facility certificate even if an exempt facility certificate ultimately is not issued or is withdrawn. Any application submitted without payment of the fee shall be deemed incomplete until the fee is paid.

(B) The application fee imposed under division (A) of this section for a jointly owned facility shall be equal to one-half of one per cent of the total exempt facility project cost, not to exceed two thousand dollars for each facility that is the subject of the application.

Section 5709.22 | Tax commissioner - powers and duties.

• Effective: September 13, 2018
• Latest Legislation: House Bill 430 - 132nd General Assembly

(A) After receiving an opinion from the director of environmental protection, the director of natural resources, or the director of development, the tax commissioner shall promptly ascertain if an application filed under section 5709.21 of the Revised Code shall be allowed or disallowed in whole or in part. The commissioner shall give written notice of the proposed finding to the applicant and the county auditor of the county in which the facility described in the application is located. Within sixty days after sending written notice of the proposed finding, the applicant or the county auditor may file a request for reconsideration, in writing, to the commissioner and may request that the commissioner conduct a hearing on the application. If no request for reconsideration is filed, the commissioner's proposed findings shall be final and, if applicable, the commissioner shall issue an exempt facility certificate, which shall not be subject to appeal pursuant to section 5717.02 of the Revised Code.

(B) If a reconsideration of the tax commissioner's proposed finding is requested by the applicant or the county auditor, the commissioner shall notify the applicant and the auditor of the time and place of the hearing, which the commissioner may continue from time to time as the commissioner finds necessary. The commissioner also shall notify the environmental protection agency, department of natural resources, or department of development, as applicable, of the hearing. The environmental protection agency, department of natural resources, or department of development shall participate in the hearing if requested in writing by the commissioner, the applicant, or the county auditor. After conducting the hearing, the commissioner shall issue a final determination, with a copy of it served on the applicant and applicable county auditors in the manner prescribed by section 5703.37 of the Revised Code. The final determination is subject to appeal pursuant to section 5717.02 of the Revised Code. Once all appeals are exhausted, the commissioner shall issue, if applicable, the exempt facility certificate based on the outcome of the appeal.

(C) The tax commissioner, on the commissioner's own initiative or on complaint by the county auditor of any county in which property to which the exempt facility certificate relates is located, shall revoke the certificate, or modify it by restricting its operation, if it appears to the commissioner that any of the following has occurred:

(1) The certificate was obtained by fraud or misrepresentation;

(2) The holder of the certificate has failed substantially to proceed with the construction, reconstruction, installation, or acquisition of an exempt facility;

(3) The property to which the certificate relates has ceased to be used as an exempt facility;

(4) The tax commissioner issued the certificate in error. As used in this section, "error" means any of the following:

(a) A clerical or mathematical mistake;

(b) When the commissioner agrees with an opinion from the director of environmental protection, the director of natural resources, or the director of development that a certificate should not have been issued;

(c) When the tax commissioner determines that the issuance of the certificate may have been improper as the result of a final adjudication by the board of tax appeals, or by a court with jurisdiction on appeal from that board, that is adverse to the original exempt status of the facility, regardless of whether the holder of the certificate was a party to such adjudication.

(D) If the revocation or modification of a certificate under division (C)(4) of this section is an action found to be frivolous for the purposes of section 5703.54 of the Revised Code the certificate holder may claim damages as provided under division (B) of that section.

(E) Upon service of notice to the holder of an exempt facility certificate, in the manner provided in section 5703.37 of the Revised Code, of the tax commissioner's revocation or modification of the certificate under division (C) of this section, the certificate shall cease to be in force or shall remain in force only as modified, as the case may require. The notice is subject to appeal under section 5717.02 of the Revised Code. Once all appeals are exhausted, the commissioner shall issue a modified certificate, if applicable, and the holder of the certificate shall be allowed to claim a refund within one hundred eighty days, notwithstanding any other time limitation provided by law of the taxes paid as a result of the certificate being revoked or modified.

Section 5709.24 | Tax commissioner to adopt rules.

• Effective: June 26, 2003
• Latest Legislation: House Bill 95 - 125th General Assembly

The tax commissioner may adopt rules to administer sections 5709.20 to 5709.27 of the Revised Code.

Section 5709.25 | Exemption of pollution control facilities.

• Effective: June 26, 2003
• Latest Legislation: House Bill 95 - 125th General Assembly

(A) Whenever an exempt facility certificate is issued, the transfer of tangible personal property to the holder of the certificate, whether such transfer takes place before or after the issuance of the certificate, shall not be considered a "sale" of such tangible personal property for the purpose of the sales tax, or a "use" for the purpose of the use tax, if the tangible personal property is to be or was a material or part to be incorporated into an exempt facility.

(B) For the period subsequent to the effective date of an exempt facility certificate and continuing for so long as the certificate is in force, no exempt facility or certified portion thereof shall be considered to be either of the following:

(1) An improvement on the land on which the exempt facility is located for the purpose of real property taxation;

(2) As "used in business" for the purpose of personal property taxation.

(C)(1) The tax commissioner, upon receiving a properly completed application for an exempt facility certificate, may allow the applicant to claim the exemption provided by this section before the commissioner issues the certificate. The applicant is entitled to the exemption unless the commissioner notifies the applicant otherwise by serving notice upon the applicant in the manner prescribed by section 5703.37 of the Revised Code.

(2) A taxpayer whose tangible personal property is subject to taxation under Chapter 5727. of the Revised Code shall notify the commissioner in writing of any property the applicant does not want the commissioner to exclude from assessment. The notice shall be provided before the date the commissioner issues the preliminary assessment under section 5727.23 of the Revised Code.

(D)(1) Notwithstanding any other time limitations imposed by law, the commissioner may assess any additional tax or may assess any additional taxable property, including any applicable interest, on the denied portion of the applicant's claim for an exempt facility that the applicant claimed prior to the exempt facility certificate being issued or the application being denied. No assessment shall be made pursuant to this division after one hundred eighty days from the date the commissioner mails the exempt facility certificate or notice of the denial of the exempt facility certificate pursuant to section 5709.22 of the Revised Code. Nothing in this section shall prohibit an assessment that otherwise may be timely made by law.

(2) Assessments issued pursuant to division (D)(1) of this section shall be issued as amended preliminary assessment certificates under section 5711.31 of the Revised Code for personal property tax, as amended preliminary assessment certificates under section 5727.23 of the Revised Code for public utility tax, and as assessments under section 5733.11 of the Revised Code for corporation franchise tax, section 5739.13 of the Revised Code for sales tax, and section 5741.11 of the Revised Code for use tax, and are subject to the same appeal requirements as defined in those sections.

(3) Nothing in division (D) of this section allows the tax commissioner, after the expiration of the time limitation, to issue an assessment referenced in division (D)(2) of this section that increases any tax beyond the amount claimed by the applicant as an exempt facility.

(4) If an assessment is issued for only the denied portion of the application for an exempt facility, the only issue the applicant is permitted to raise on appeal of the assessment referenced in division (D)(2) of this section is that of the taxable property or transaction constituting the denied portion of the applicant's claim for an exempt facility.

(E) Except as otherwise provided in this division, no exemption for additional property shall be claimed under this section after an exempt facility certificate has been issued for that facility unless the applicant files a new application under section 5709.21 of the Revised Code. The tax commissioner shall waive the requirement to file a new application under section 5709.21 of the Revised Code if the cost of the additional property, net of retirements for similar property, does not exceed five hundred thousand dollars during any calendar year. The fee imposed under section 5709.212 of the Revised Code for applications filed as a result of this division shall be five hundred dollars.

(F) If, as the result of a revaluation due to sale or bankruptcy or any other reason, the book value of property that is the subject of an exempt facility certificate is changed from the book value at the time of the original issuance of the certificate, the amount of exemption available to the owner is limited to the percentage resulting from the ratio of the historical cost of the property that is the subject of the exempt facility certificate to the historic cost of all tangible personal property and real property of the owner located at the same location as the property subject to the exempt facility certificate. If the result of using this ratio is greater than the original cost, then acceptable reasons for allowing such greater cost must be established with supporting documentation in order to qualify for the exemption above the original cost.

(G) After two years from the date the tax commissioner receives an application, the applicant may request in writing that the tax commissioner take final action on the pending application. Within ten days after receiving such a request, the tax commissioner shall issue a proposed finding, under section 5709.22 of the Revised Code, if the application is allowed in whole or in part. Otherwise, the tax commissioner shall issue a final determination denying the issuance of the certificate, which is a final determination appealable under section 5717.02 of the Revised Code.

Section 5709.26 | Revocation of certificate due to fraud or misrepresentation - penalties.

• Effective: June 26, 2003
• Latest Legislation: House Bill 95 - 125th General Assembly

When an exempt facility certificate is revoked or modified for the reason stated in division (C)(1) of section 5709.22 of the Revised Code, all taxes that would have been payable had no certificate been issued shall be assessed with penalties and interest prescribed by law applicable thereto dating to when the exemption was first allowed. Notwithstanding any other time limitations imposed by law, if the certificate is revoked or modified under division (C)(2), (3), or (4) of section 5709.22 of the Revised Code, all taxes that would have been payable had no certificate existed as of the first day of January of the calendar year in which the certificate was revoked or modified are subject to assessment.

Section 5709.27 | Transfer of exemption certificate.

• Effective: June 26, 2003
• Latest Legislation: House Bill 95 - 125th General Assembly

In the event of the sale, lease, or other transfer of an exempt facility, not involving a different location or use, the holder of the exempt facility certificate shall transfer the certificate by written instrument to the person who, except for the transfer of the certificate, would be obligated to pay taxes on the facility. The transferee shall become the holder of the certificate and shall have all the rights to exemption from taxes granted to the former holder or holders, effective as of the date of transfer of the facility or the date of transfer of the certificate, whichever is earlier. The transferee shall promptly give written notice of the effective date of the transfer, together with a copy of the instrument of transfer, to the tax commissioner and the county auditor of the county in which the facility is located. Upon request, the commissioner may provide the transferee with any information the commissioner possesses related to the issuance of the exempt facility certificate.

Section 5709.28 | Percentage of taxable value of agricultural security area land may be exempt.

• Effective: July 18, 2008
• Latest Legislation: House Bill 289 - 127th General Assembly

As used in this section, "qualifying agricultural real property" means a building, structure, improvement, or fixture that is used exclusively for agricultural purposes, that is located on land enrolled in an agricultural security area established under Chapter 931. of the Revised Code, and for which the aggregate new investment has a true value in money of twenty-five thousand dollars or more.

At the time of the establishment or renewal of an agricultural security area or at any time during which land is enrolled in an agricultural security area, a percentage of the taxable value of qualifying agricultural real property first appearing on the real and public utility property tax list in a tax year during the enrollment may be exempted from taxation. The board of township trustees of each township in which the land that is enrolled in the agricultural security area is located and the board of county commissioners of each county in which the land is located shall confer with each other and reach an agreement concerning the tax exemption. At the time the agreement is reached, the boards shall send written notice of the agreement to the superintendent of each school district within the agricultural security area. After the agreement is reached and the tax exemption is granted, the qualifying agricultural real property shall become exempt in the tax year following the year in which the construction of the property is completed.

The agreement shall establish the percentage of the taxable value of qualifying agricultural real property that is to be exempted from taxation and the number of years that the tax exemption will apply to that property. The agreement may specify that the tax years during which the exemption will apply to the property may extend past the scheduled expiration date of the period of enrollment in the agricultural security area, provided that the enrollment is renewed and otherwise continues during the tax years that the exemption applies. The agreement shall not exempt from taxation more than seventy-five per cent of the taxable value of the qualifying agricultural real property. In addition, the agreement may establish the maximum amount of the value of the qualifying agricultural real property to which the tax exemption may apply. Subsequent to the agreement establishing that maximum amount, the owner of the property may request the applicable boards to alter the agreement and increase the maximum value of the property to which the tax exemption applies. The agreement shall be reviewed annually by the tax incentive review council in accordance with section 5709.85 of the Revised Code.

Each time that a renewal application is filed for an agricultural security area that involves qualifying agricultural real property that has been the subject of an exemption that expired on or before the date on which the previous period of enrollment in an agricultural security area expired, the applicable boards shall reach a new agreement concerning the exemption before any of the boards adopts a resolution either approving or rejecting the renewal application.

The county auditor shall enter on the list of property described in section 5713.07 of the Revised Code that is exempt from taxation any qualifying agricultural real property that is the subject of an exemption under this section. An application shall not be required to be filed under section 5715.27 of the Revised Code with respect to the exemption. The county auditor shall remove the qualifying agricultural real property from the list at the time that the county auditor discovers or is notified under section 931.07 of the Revised Code that a withdrawal, removal, or conversion of land from an agricultural security area has occurred in a way that makes the qualifying agricultural real property no longer eligible for the exemption.

If the county auditor removes qualifying agricultural real property from the list of property that is exempt from taxation and the owner of the removed property claimed a tax exemption established under this section for a prior tax year, the amount of tax otherwise imposed on the qualifying agricultural real property that was the subject of the exemption shall be increased. The amount of the increase shall equal the aggregate value of the tax exemption received by the taxpayer under this section since the agricultural security area was most recently approved for establishment or renewal, as applicable, plus interest on that amount at the average bank prime rate, as determined under section 929.02 of the Revised Code, at the time that the county auditor removes the property from the list of property that is exempt from taxation. The tax year in which the increase shall occur is dependent upon the date on which the county auditor makes a discovery or is notified under section 931.07 of the Revised Code that a withdrawal, removal, or conversion of land from an agricultural security area has occurred. If the discovery or notification occurs prior to the date in a tax year on which the county auditor delivers a copy of the general tax list to the county treasurer under section 319.28 of the Revised Code, the increase shall occur in the same tax year that the discovery or notification occurred. If the discovery or notification occurs on or after the date in a tax year on which the copy of the general tax list is delivered to the county treasurer, the increase shall occur in the tax year that immediately follows the year in which the discovery or notification occurred.

Section 5709.40 | Declaration that improvements constitute public purpose - blighted areas.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) As used in this section:

(1) "Blighted area" and "impacted city" have the same meanings as in section 1728.01 of the Revised Code.

(2) "Business day" means a day of the week excluding Saturday, Sunday, and a legal holiday as defined under section 1.14 of the Revised Code.

(3) "Housing renovation" means a project carried out for residential purposes.

(4) "Improvement" means the increase in the assessed value of any real property that would first appear on the tax list and duplicate of real and public utility property after the effective date of an ordinance adopted under this section were it not for the exemption granted by that ordinance.

(5) "Incentive district" means an area not more than three hundred acres in size enclosed by a continuous boundary in which a project is being, or will be, undertaken and having one or more of the following distress characteristics:

(a) At least fifty-one per cent of the residents of the district have incomes of less than eighty per cent of the median income of residents of the political subdivision in which the district is located, as determined in the same manner specified under section 119(b) of the "Housing and Community Development Act of 1974," 88 Stat. 633, 42 U.S.C. 5318, as amended;

(b) The average rate of unemployment in the district during the most recent twelve-month period for which data are available is equal to at least one hundred fifty per cent of the average rate of unemployment for this state for the same period.

(c) At least twenty per cent of the people residing in the district live at or below the poverty level as defined in the federal Housing and Community Development Act of 1974, 42 U.S.C. 5301, as amended, and regulations adopted pursuant to that act.

(d) The district is a blighted area.

(e) The district is in a situational distress area as designated by the director of development under division (F) of section 122.23 of the Revised Code.

(f) As certified by the engineer for the political subdivision, the public infrastructure serving the district is inadequate to meet the development needs of the district as evidenced by a written economic development plan or urban renewal plan for the district that has been adopted by the legislative authority of the subdivision.

(g) The district is comprised entirely of unimproved land that is located in a distressed area as defined in section 122.23 of the Revised Code.

(6) "Overlay" means an area of not more than three hundred acres that is a square, or that is a rectangle having two longer sides that are not more than twice the length of the two shorter sides, that the legislative authority of a municipal corporation delineates on a map of a proposed incentive district.

(7) "Project" means development activities undertaken on one or more parcels, including, but not limited to, construction, expansion, and alteration of buildings or structures, demolition, remediation, and site development, and any building or structure that results from those activities.

(8) "Public infrastructure improvement" includes, but is not limited to, public roads and highways; water and sewer lines; the continued maintenance of those public roads and highways and water and sewer lines; environmental remediation; land acquisition, including acquisition in aid of industry, commerce, distribution, or research; demolition, including demolition on private property when determined to be necessary for economic development purposes; stormwater and flood remediation projects, including such projects on private property when determined to be necessary for public health, safety, and welfare; the provision of gas, electric, and communications service facilities, including the provision of gas or electric service facilities owned by nongovernmental entities when such improvements are determined to be necessary for economic development purposes; the enhancement of public waterways through improvements that allow for greater public access; and off-street parking facilities, including those in which all or a portion of the parking spaces are reserved for specific uses when determined to be necessary for economic development purposes.

(9) "Nonperforming parcel" means a parcel to which all of the following apply:

(a) The parcel is exempted from taxation under division (B) of this section or has been included in a district created under division (C) of this section.

(b) The parcel's owner is required to make payments in lieu of taxes in accordance with section 5709.42 of the Revised Code.

(c) No such payments have been remitted to the county treasurer since the inception of the exemption or district.

(B) The legislative authority of a municipal corporation, by ordinance, may declare improvements to certain parcels of real property located in the municipal corporation to be a public purpose. Improvements with respect to a parcel that is used or to be used for residential purposes may be declared a public purpose under this division only if the parcel is located in a blighted area of an impacted city. For this purpose, "parcel that is used or to be used for residential purposes" means a parcel that, as improved, is used or to be used for purposes that would cause the tax commissioner to classify the parcel as residential property in accordance with rules adopted by the commissioner under section 5713.041 of the Revised Code. Except as otherwise provided under division (D) of this section or section 5709.51 of the Revised Code, not more than seventy-five per cent of an improvement thus declared to be a public purpose may be exempted from real property taxation for a period of not more than ten years. The ordinance shall specify the percentage of the improvement to be exempted from taxation and the life of the exemption.

An ordinance adopted or amended under this division shall designate the specific public infrastructure improvements made, to be made, or in the process of being made by the municipal corporation that directly benefit, or that once made will directly benefit, the parcels for which improvements are declared to be a public purpose. The service payments provided for in section 5709.42 of the Revised Code shall be used to finance the public infrastructure improvements designated in the ordinance, for the purpose described in division (D)(1) of this section or as provided in section 5709.43 of the Revised Code.

(C)(1) The legislative authority of a municipal corporation may adopt an ordinance creating an incentive district and declaring improvements to parcels within the district to be a public purpose and, except as provided in division (C)(2) of this section, exempt from taxation as provided in this section, but no legislative authority of a municipal corporation that has a population that exceeds twenty-five thousand, as shown by the most recent federal decennial census, shall adopt an ordinance that creates an incentive district if the sum of the taxable value of real property in the proposed district for the preceding tax year and the taxable value of all real property in the municipal corporation that would have been taxable in the preceding year were it not for the fact that the property was in an existing incentive district and therefore exempt from taxation exceeds twenty-five per cent of the taxable value of real property in the municipal corporation for the preceding tax year. The ordinance shall delineate the boundary of the proposed district and specifically identify each parcel within the district. A proposed district may not include any parcel, other than a nonperforming parcel, that is or has been exempted from taxation under division (B) of this section or that is or has been within another district created under this division. On and after the effective date of the district, a nonperforming parcel within the district is no longer exempted from taxation under division (B) of this section or included within an incentive district under any previous ordinance, and the parcel's owner is no longer required to make payments in lieu of taxes under such a previous ordinance in accordance with section 5709.42 of the Revised Code. Any exemption application filed with the tax commissioner under section 5715.27 of the Revised Code under the second ordinance shall identify the nonperforming parcels included in the second district, the original ordinance under which the nonperforming parcels were originally exempted, and the value history of each nonperforming parcel since the enactment of the original ordinance. An ordinance may create more than one such district, and more than one ordinance may be adopted under division (C)(1) of this section.

(2)(a) Not later than thirty days prior to adopting an ordinance under division (C)(1) of this section, if the municipal corporation intends to apply for exemptions from taxation under section 5709.911 of the Revised Code on behalf of owners of real property located within the proposed incentive district, the legislative authority of the municipal corporation shall conduct a public hearing on the proposed ordinance. Not later than thirty days prior to the public hearing, the legislative authority shall give notice of the public hearing and the proposed ordinance by first class mail to every real property owner whose property is located within the boundaries of the proposed incentive district that is the subject of the proposed ordinance. The notice shall include a map of the proposed incentive district on which the legislative authority of the municipal corporation shall have delineated an overlay. The notice shall inform the property owner of the owner's right to exclude the owner's property from the incentive district if the owner's entire parcel of property will not be located within the overlay, by submitting a written response in accordance with division (C)(2)(b) of this section. The notice also shall include information detailing the required contents of the response, the address to which the response may be mailed, and the deadline for submitting the response.

(b) Any owner of real property located within the boundaries of an incentive district proposed under division (C)(1) of this section whose entire parcel of property is not located within the overlay may exclude the property from the proposed incentive district by submitting a written response to the legislative authority of the municipal corporation not later than forty-five days after the postmark date on the notice required under division (C)(2)(a) of this section. The response shall be sent by first class mail or delivered in person at a public hearing held by the legislative authority under division (C)(2)(a) of this section. The response shall conform to any content requirements that may be established by the municipal corporation and included in the notice provided under division (C)(2)(a) of this section. In the response, property owners may identify a parcel by street address, by the manner in which it is identified in the ordinance, or by other means allowing the identity of the parcel to be ascertained.

(c) Before adopting an ordinance under division (C)(1) of this section, the legislative authority of a municipal corporation shall amend the ordinance to exclude any parcel located wholly or partly outside the overlay for which a written response has been submitted under division (C)(2)(b) of this section. A municipal corporation shall not apply for exemptions from taxation under section 5709.911 of the Revised Code for any such parcel, and service payments may not be required from the owner of the parcel. Improvements to a parcel excluded from an incentive district under this division may be exempted from taxation under division (B) of this section pursuant to an ordinance adopted under that division or under any other section of the Revised Code under which the parcel qualifies.

(3)(a) An ordinance adopted under division (C)(1) of this section shall specify the life of the incentive district and the percentage of the improvements to be exempted, shall designate the public infrastructure improvements made, to be made, or in the process of being made, that benefit or serve, or, once made, will benefit or serve parcels in the district. The ordinance also shall identify one or more specific projects being, or to be, undertaken in the district that place additional demand on the public infrastructure improvements designated in the ordinance. The project identified may, but need not be, the project under division (C)(3)(b) of this section that places real property in use for commercial or industrial purposes. Except as otherwise permitted under that division, the service payments provided for in section 5709.42 of the Revised Code shall be used to finance the designated public infrastructure improvements, for the purpose described in division (D)(1), (E), or (F) of this section, or as provided in section 5709.43 of the Revised Code.

An ordinance adopted under division (C)(1) of this section on or after March 30, 2006, shall not designate police or fire equipment as public infrastructure improvements, and no service payment provided for in section 5709.42 of the Revised Code and received by the municipal corporation under the ordinance shall be used for police or fire equipment.

(b) An ordinance adopted under division (C)(1) of this section may authorize the use of service payments provided for in section 5709.42 of the Revised Code for the purpose of housing renovations within the incentive district, provided that the ordinance also designates public infrastructure improvements that benefit or serve the district, and that a project within the district places real property in use for commercial or industrial purposes. Service payments may be used to finance or support loans, deferred loans, and grants to persons for the purpose of housing renovations within the district. The ordinance shall designate the parcels within the district that are eligible for housing renovation. The ordinance shall state separately the amounts or the percentages of the expected aggregate service payments that are designated for each public infrastructure improvement and for the general purpose of housing renovations.

(4) Except with the approval of the board of education of each city, local, or exempted village school district within the territory of which the incentive district is or will be located, and subject to division (E) of this section, the life of an incentive district shall not exceed ten years, and the percentage of improvements to be exempted shall not exceed seventy-five per cent. With approval of the board of education, the life of a district may be not more than thirty years, and the percentage of improvements to be exempted may be not more than one hundred per cent. The approval of a board of education shall be obtained in the manner provided in division (D) of this section.

(D)(1) If the ordinance declaring improvements to a parcel to be a public purpose or creating an incentive district specifies that payments in lieu of taxes provided for in section 5709.42 of the Revised Code shall be paid to the city, local, or exempted village, and joint vocational school district in which the parcel or incentive district is located in the amount of the taxes that would have been payable to the school district if the improvements had not been exempted from taxation, the percentage of the improvement that may be exempted from taxation may exceed seventy-five per cent, and the exemption may be granted for up to thirty years, without the approval of the board of education as otherwise required under division (D)(2) of this section.

(2) Improvements with respect to a parcel may be exempted from taxation under division (B) of this section, and improvements to parcels within an incentive district may be exempted from taxation under division (C) of this section, for up to ten years or, with the approval under this paragraph of the board of education of the city, local, or exempted village school district within which the parcel or district is located, for up to thirty years. The percentage of the improvement exempted from taxation may, with such approval, exceed seventy-five per cent, but shall not exceed one hundred per cent. Not later than forty-five business days prior to adopting an ordinance under this section declaring improvements to be a public purpose that is subject to approval by a board of education under this division, the legislative authority shall deliver to the board of education a notice stating its intent to adopt an ordinance making that declaration. The notice regarding improvements with respect to a parcel under division (B) of this section shall identify the parcels for which improvements are to be exempted from taxation, provide an estimate of the true value in money of the improvements, specify the period for which the improvements would be exempted from taxation and the percentage of the improvement that would be exempted, and indicate the date on which the legislative authority intends to adopt the ordinance. The notice regarding improvements to parcels within an incentive district under division (C) of this section shall delineate the boundaries of the district, specifically identify each parcel within the district, identify each anticipated improvement in the district, provide an estimate of the true value in money of each such improvement, specify the life of the district and the percentage of improvements that would be exempted, and indicate the date on which the legislative authority intends to adopt the ordinance. The board of education, by resolution adopted by a majority of the board, may approve the exemption for the period or for the exemption percentage specified in the notice; may disapprove the exemption for the number of years in excess of ten, may disapprove the exemption for the percentage of the improvement to be exempted in excess of seventy-five per cent, or both; or may approve the exemption on the condition that the legislative authority and the board negotiate an agreement providing for compensation to the school district equal in value to a percentage of the amount of taxes exempted in the eleventh and subsequent years of the exemption period or, in the case of exemption percentages in excess of seventy-five per cent, compensation equal in value to a percentage of the taxes that would be payable on the portion of the improvement in excess of seventy-five per cent were that portion to be subject to taxation, or other mutually agreeable compensation. If an agreement is negotiated between the legislative authority and the board to compensate the school district for all or part of the taxes exempted, including agreements for payments in lieu of taxes under section 5709.42 of the Revised Code, the legislative authority shall compensate the joint vocational school district within which the parcel or district is located at the same rate and under the same terms received by the city, local, or exempted village school district.

(3) The board of education shall certify its resolution to the legislative authority not later than fourteen days prior to the date the legislative authority intends to adopt the ordinance as indicated in the notice. If the board of education and the legislative authority negotiate a mutually acceptable compensation agreement, the ordinance may declare the improvements a public purpose for the number of years specified in the ordinance or, in the case of exemption percentages in excess of seventy-five per cent, for the exemption percentage specified in the ordinance. In either case, if the board and the legislative authority fail to negotiate a mutually acceptable compensation agreement, the ordinance may declare the improvements a public purpose for not more than ten years, and shall not exempt more than seventy-five per cent of the improvements from taxation. If the board fails to certify a resolution to the legislative authority within the time prescribed by this division, the legislative authority thereupon may adopt the ordinance and may declare the improvements a public purpose for up to thirty years, or, in the case of exemption percentages proposed in excess of seventy-five per cent, for the exemption percentage specified in the ordinance. The legislative authority may adopt the ordinance at any time after the board of education certifies its resolution approving the exemption to the legislative authority, or, if the board approves the exemption on the condition that a mutually acceptable compensation agreement be negotiated, at any time after the compensation agreement is agreed to by the board and the legislative authority.

(4) If a board of education has adopted a resolution waiving its right to approve exemptions from taxation under this section and the resolution remains in effect, approval of exemptions by the board is not required under division (D) of this section. If a board of education has adopted a resolution allowing a legislative authority to deliver the notice required under division (D) of this section fewer than forty-five business days prior to the legislative authority's adoption of the ordinance, the legislative authority shall deliver the notice to the board not later than the number of days prior to such adoption as prescribed by the board in its resolution. If a board of education adopts a resolution waiving its right to approve agreements or shortening the notification period, the board shall certify a copy of the resolution to the legislative authority. If the board of education rescinds such a resolution, it shall certify notice of the rescission to the legislative authority.

(5) If the legislative authority is not required by division (D) of this section to notify the board of education of the legislative authority's intent to declare improvements to be a public purpose, the legislative authority shall comply with the notice requirements imposed under section 5709.83 of the Revised Code, unless the board has adopted a resolution under that section waiving its right to receive such a notice.

(6) Nothing in division (D) of this section prohibits the legislative authority of a municipal corporation from amending the ordinance or resolution under section 5709.51 of the Revised Code to extend the term of the exemption.

(E)(1) If a proposed ordinance under division (C)(1) of this section exempts improvements with respect to a parcel within an incentive district for more than ten years, or the percentage of the improvement exempted from taxation exceeds seventy-five per cent, not later than forty-five business days prior to adopting the ordinance the legislative authority of the municipal corporation shall deliver to the board of county commissioners of the county within which the incentive district will be located a notice that states its intent to adopt an ordinance creating an incentive district. The notice shall include a copy of the proposed ordinance, identify the parcels for which improvements are to be exempted from taxation, provide an estimate of the true value in money of the improvements, specify the period of time for which the improvements would be exempted from taxation, specify the percentage of the improvements that would be exempted from taxation, and indicate the date on which the legislative authority intends to adopt the ordinance.

(2) The board of county commissioners, by resolution adopted by a majority of the board, may object to the exemption for the number of years in excess of ten, may object to the exemption for the percentage of the improvement to be exempted in excess of seventy-five per cent, or both. If the board of county commissioners objects, the board may negotiate a mutually acceptable compensation agreement with the legislative authority. In no case shall the compensation provided to the board exceed the property taxes forgone due to the exemption. If the board of county commissioners objects, and the board and legislative authority fail to negotiate a mutually acceptable compensation agreement, the ordinance adopted under division (C)(1) of this section shall provide to the board compensation in the eleventh and subsequent years of the exemption period equal in value to not more than fifty per cent of the taxes that would be payable to the county or, if the board's objection includes an objection to an exemption percentage in excess of seventy-five per cent, compensation equal in value to not more than fifty per cent of the taxes that would be payable to the county, on the portion of the improvement in excess of seventy-five per cent, were that portion to be subject to taxation. The board of county commissioners shall certify its resolution to the legislative authority not later than thirty days after receipt of the notice.

(3) If the board of county commissioners does not object or fails to certify its resolution objecting to an exemption within thirty days after receipt of the notice, the legislative authority may adopt the ordinance, and no compensation shall be provided to the board of county commissioners. If the board timely certifies its resolution objecting to the ordinance, the legislative authority may adopt the ordinance at any time after a mutually acceptable compensation agreement is agreed to by the board and the legislative authority, or, if no compensation agreement is negotiated, at any time after the legislative authority agrees in the proposed ordinance to provide compensation to the board of fifty per cent of the taxes that would be payable to the county in the eleventh and subsequent years of the exemption period or on the portion of the improvement in excess of seventy-five per cent, were that portion to be subject to taxation.

(F) Service payments in lieu of taxes that are attributable to any amount by which the effective tax rate of either a renewal levy with an increase or a replacement levy exceeds the effective tax rate of the levy renewed or replaced, or that are attributable to an additional levy, for a levy authorized by the voters for any of the following purposes on or after January 1, 2006, and which are provided pursuant to an ordinance creating an incentive district under division (C)(1) of this section that is adopted on or after January 1, 2006, or a later date as specified in this division, shall be distributed to the appropriate taxing authority as required under division (C) of section 5709.42 of the Revised Code in an amount equal to the amount of taxes from that additional levy or from the increase in the effective tax rate of such renewal or replacement levy that would have been payable to that taxing authority from the following levies were it not for the exemption authorized under division (C) of this section:

(1) A tax levied under division (L) of section 5705.19 or section 5705.191 or 5705.222 of the Revised Code for community developmental disabilities programs and services pursuant to Chapter 5126. of the Revised Code;

(2) A tax levied under division (Y) of section 5705.19 of the Revised Code for providing or maintaining senior citizens services or facilities;

(3) A tax levied under section 5705.22 of the Revised Code for county hospitals;

(4) A tax levied by a joint-county district or by a county under section 5705.19, 5705.191, or 5705.221 of the Revised Code for alcohol, drug addiction, and mental health services or facilities;

(5) A tax levied under section 5705.23 of the Revised Code for library purposes;

(6) A tax levied under section 5705.24 of the Revised Code for the support of children services and the placement and care of children;

(7) A tax levied under division (Z) of section 5705.19 of the Revised Code for the provision and maintenance of zoological park services and facilities under section 307.76 of the Revised Code;

(8) A tax levied under section 511.27 or division (H) of section 5705.19 of the Revised Code for the support of township park districts;

(9) A tax levied under division (A), (F), or (H) of section 5705.19 of the Revised Code for parks and recreational purposes of a joint recreation district organized pursuant to division (B) of section 755.14 of the Revised Code;

(10) A tax levied under section 1545.20 or 1545.21 of the Revised Code for park district purposes;

(11) A tax levied under section 5705.191 of the Revised Code for the purpose of making appropriations for public assistance; human or social services; public relief; public welfare; public health and hospitalization; and support of general hospitals;

(12) A tax levied under section 3709.29 of the Revised Code for a general health district program.

(13) A tax levied by a township under section 505.39, division (I) of section 5705.19, or division (JJ) of section 5705.19 of the Revised Code to the extent the proceeds are used for the purposes described in division (I) of that section, for the purpose of funding fire, emergency medical, and ambulance services as described in that section and those divisions. Division (F)(13) of this section applies only if the township levying the tax provides fire, emergency medical, or ambulance services in the incentive district, and only to incentive districts created by an ordinance adopted on or after the effective date of the amendment of this section by H.B. 69 of the 132nd general assembly, March 23, 2018. The board of township trustees may, by resolution, waive the application of this division or negotiate with the municipal corporation that created the district for a lesser amount of payments in lieu of taxes.

(G) An exemption from taxation granted under this section commences with the tax year specified in the ordinance so long as the year specified in the ordinance commences after the effective date of the ordinance. If the ordinance specifies a year commencing before the effective date of the resolution or specifies no year whatsoever, the exemption commences with the tax year in which an exempted improvement first appears on the tax list and duplicate of real and public utility property and that commences after the effective date of the ordinance. In lieu of stating a specific year, the ordinance may provide that the exemption commences in the tax year in which the value of an improvement exceeds a specified amount or in which the construction of one or more improvements is completed, provided that such tax year commences after the effective date of the ordinance. With respect to the exemption of improvements to parcels under division (B) of this section, the ordinance may allow for the exemption to commence in different tax years on a parcel-by-parcel basis, with a separate exemption term specified for each parcel.

Except as otherwise provided in this division or section 5709.51 of the Revised Code, the exemption ends on the date specified in the ordinance as the date the improvement ceases to be a public purpose or the incentive district expires, or ends on the date on which the public infrastructure improvements and housing renovations are paid in full from the municipal public improvement tax increment equivalent fund established under division (A) of section 5709.43 of the Revised Code, whichever occurs first. The exemption of an improvement with respect to a parcel or within an incentive district may end on a later date, as specified in the ordinance, if the legislative authority and the board of education of the city, local, or exempted village school district within which the parcel or district is located have entered into a compensation agreement under section 5709.82 of the Revised Code with respect to the improvement, and the board of education has approved the term of the exemption under division (D)(2) of this section, but in no case shall the improvement be exempted from taxation for more than thirty years. Exemptions shall be claimed and allowed in the same manner as in the case of other real property exemptions. If an exemption status changes during a year, the procedure for the apportionment of the taxes for that year is the same as in the case of other changes in tax exemption status during the year.

(H) Additional municipal financing of public infrastructure improvements and housing renovations may be provided by any methods that the municipal corporation may otherwise use for financing such improvements or renovations. If the municipal corporation issues bonds or notes to finance the public infrastructure improvements and housing renovations and pledges money from the municipal public improvement tax increment equivalent fund to pay the interest on and principal of the bonds or notes, the bonds or notes are not subject to Chapter 133. of the Revised Code.

(I) The municipal corporation, not later than fifteen days after the adoption of an ordinance under this section, shall submit to the director of development a copy of the ordinance. On or before the thirty-first day of March of each year, the municipal corporation shall submit a status report to the director. The report shall indicate, in the manner prescribed by the director, the progress of the project during each year that an exemption remains in effect, including a summary of the receipts from service payments in lieu of taxes; expenditures of money from the funds created under section 5709.43 of the Revised Code; a description of the public infrastructure improvements and housing renovations financed with such expenditures; and a quantitative summary of changes in employment and private investment resulting from each project.

(J) Nothing in this section shall be construed to prohibit a legislative authority from declaring to be a public purpose improvements with respect to more than one parcel.

(K) If a parcel is located in a new community district in which the new community authority imposes a community development charge on the basis of rentals received from leases of real property as described in division (L)(2) of section 349.01 of the Revised Code, the parcel may not be exempted from taxation under this section.

(L)(1) Notwithstanding the limitations on the life of an incentive district and the number of years that improvements to a parcel or parcels within an incentive district may be exempted from taxation prescribed by divisions (C) and (D) of this section, the legislative authority of a municipal corporation may amend an ordinance originally adopted under division (C) of this section before January 1, 2006, to extend the life of an incentive district created by that ordinance. The extension shall be for a period not to exceed fifteen years and shall not increase the percentage of the value of improvements exempted from taxation.

(2) Before adopting an amendment authorized by division (L)(1) of this section, the legislative authority of the municipal corporation shall provide notice of the amendment to each board of education of the city, local, or exempted village school district in which the incentive district is located, in the same manner as provided under division (D) of this section, and shall obtain the approval of each such board in the manner required under that division, except both of the following apply:

(a) The board of education may approve the exemption on the condition that the legislative authority and the board negotiate an agreement providing for mutually agreeable compensation to the school district.

(b) If the board of education fails to certify a resolution approving the amendment to the legislative authority within the time prescribed by division (D) of this section, the legislative authority shall not adopt the amendment authorized under division (L) of this section.

(3) No approval otherwise required by division (L)(2) of this section shall be required from a board of education if either of the following apply:

(a) The amendment provides for compensation to the city, local, or exempted village school district in which the incentive district is located equal in value to the amount of taxes that would be payable to the school district if the improvements exempted from taxation had not been exempted for the additional period.

(b) The board of education has adopted a resolution waiving its right to approve exemptions from taxation pursuant to division (D)(4) of this section. If the board has adopted such a resolution, the municipal corporation shall comply with the notice requirements imposed by section 5709.83 of the Revised Code before taking formal action to adopt an amendment authorized under division (L)(1) of this section unless the board has adopted a resolution under that section waiving its right to receive that notice.

(4) Not later than fourteen days before adopting an amendment authorized by division (L)(1) of this section, the legislative authority of the municipal corporation shall deliver a notice identical to a notice required under section 5709.83 of the Revised Code to the board of county commissioners of each county in which the incentive district is located.

Last updated September 12, 2023 at 10:42 AM

Section 5709.41 | Declaration that improvements constitute public purpose.

• Effective: April 6, 2023
• Latest Legislation: House Bill 501 - 134th General Assembly

(A) As used in this section:

(1) "Business day" means a day of the week excluding Saturday, Sunday, and a legal holiday as defined under section 1.14 of the Revised Code.

(2) "Improvement" means the increase in assessed value of any parcel of property subsequent to the acquisition of the parcel by a municipal corporation engaged in urban redevelopment or by a township engaged in redevelopment.

(B) The legislative authority of a municipal corporation or township, by ordinance or resolution, may declare to be a public purpose any improvement to a parcel of real property if both of the following apply:

(1) The municipal corporation or township held fee title to the parcel prior to the adoption of the ordinance or resolution;

(2) The parcel is leased, or the fee of the parcel is conveyed, to any person either before or after adoption of the ordinance or resolution.

Improvements used or to be used for residential purposes may be declared a public purpose under this section only if the parcel is located in a blighted area of an impacted city, in the case of a municipal corporation, or in a blighted area, in the case of a township, as those terms are defined in section 1728.01 of the Revised Code. For this purpose, "parcel that is used or to be used for residential purposes" means a parcel that, as improved, is used or to be used for purposes that would cause the tax commissioner to classify the parcel as residential property in accordance with rules adopted by the commissioner under section 5713.041 of the Revised Code.

(C) Except as otherwise provided in division (C)(1), (2), or (3) of this section, not more than seventy-five per cent of an improvement thus declared to be a public purpose may be exempted from real property taxation. The ordinance or resolution shall specify the percentage of the improvement to be exempted from taxation. If a parcel is located in a new community district in which the new community authority imposes a community development charge on the basis of rentals received from leases of real property as described in division (L)(2) of section 349.01 of the Revised Code, the parcel may not be exempted from taxation under this section.

(1) If the ordinance or resolution declaring improvements to a parcel to be a public purpose specifies that payments in lieu of taxes provided for in section 5709.42 or 5709.74 of the Revised Code shall be paid to the city, local, or exempted village school district in which the parcel is located in the amount of the taxes that would have been payable to the school district if the improvements had not been exempted from taxation, the percentage of the improvement that may be exempted from taxation may exceed seventy-five per cent, and the exemption may be granted for up to thirty years, without the approval of the board of education as otherwise required under division (C)(2) of this section.

(2) Improvements may be exempted from taxation for up to ten years or, with the approval of the board of education of the city, local, or exempted village school district within the territory of which the improvements are or will be located, for up to thirty years. The percentage of the improvement exempted from taxation may, with such approval, exceed seventy-five per cent, but shall not exceed one hundred per cent. Not later than forty-five business days prior to adopting an ordinance or resolution under this section, the legislative authority shall deliver to the board of education a notice stating its intent to declare improvements to be a public purpose under this section. The notice shall describe the parcel and the improvements, provide an estimate of the true value in money of the improvements, specify the period for which the improvements would be exempted from taxation and the percentage of the improvements that would be exempted, and indicate the date on which the legislative authority intends to adopt the ordinance or resolution. The board of education, by resolution adopted by a majority of the board, may approve the exemption for the period or for the exemption percentage specified in the notice, may disapprove the exemption for the number of years in excess of ten, may disapprove the exemption for the percentage of the improvements to be exempted in excess of seventy-five per cent, or both, or may approve the exemption on the condition that the legislative authority and the board negotiate an agreement providing for compensation to the school district equal in value to a percentage of the amount of taxes exempted in the eleventh and subsequent years of the exemption period, or, in the case of exemption percentages in excess of seventy-five per cent, compensation equal in value to a percentage of the taxes that would be payable on the portion of the improvement in excess of seventy-five per cent were that portion to be subject to taxation. The board of education shall certify its resolution to the legislative authority not later than fourteen days prior to the date the legislative authority intends to adopt the ordinance or resolution as indicated in the notice. If the board of education approves the exemption on the condition that a compensation agreement be negotiated, the board in its resolution shall propose a compensation percentage. If the board of education and the legislative authority negotiate a mutually acceptable compensation agreement, the ordinance or resolution may declare the improvements a public purpose for the number of years specified in the ordinance or resolution or, in the case of exemption percentages in excess of seventy-five per cent, for the exemption percentage specified in the ordinance or resolution. In either case, if the board and the legislative authority fail to negotiate a mutually acceptable compensation agreement, the ordinance or resolution may declare the improvements a public purpose for not more than ten years, but shall not exempt more than seventy-five per cent of the improvements from taxation. If the board fails to certify a resolution to the legislative authority within the time prescribed by this division, the legislative authority thereupon may adopt the ordinance or resolution and may declare the improvements a public purpose for up to thirty years. The legislative authority may adopt the ordinance or resolution at any time after the board of education certifies its resolution approving the exemption to the legislative authority, or, if the board approves the exemption on the condition that a mutually acceptable compensation agreement be negotiated, at any time after the compensation agreement is agreed to by the board and the legislative authority. If a mutually acceptable compensation agreement is negotiated between the legislative authority and the board, including agreements for payments in lieu of taxes under section 5709.42 or 5709.74 of the Revised Code, the legislative authority shall compensate the joint vocational school district within the territory of which the improvements are or will be located at the same rate and under the same terms received by the city, local, or exempted village school district.

(3) If a board of education has adopted a resolution waiving its right to approve exemptions from taxation and the resolution remains in effect, approval of exemptions by the board is not required under this division. If a board of education has adopted a resolution allowing a legislative authority to deliver the notice required under this division fewer than forty-five business days prior to the legislative authority's adoption of the ordinance or resolution, the legislative authority shall deliver the notice to the board not later than the number of days prior to such adoption as prescribed by the board in its resolution. If a board of education adopts a resolution waiving its right to approve exemptions or shortening the notification period, the board shall certify a copy of the resolution to the legislative authority. If the board of education rescinds such a resolution, it shall certify notice of the rescission to the legislative authority.

(4) If the legislative authority is not required by division (C)(1), (2), or (3) of this section to notify the board of education of the legislative authority's intent to declare improvements to be a public purpose, the legislative authority shall comply with the notice requirements imposed under section 5709.83 of the Revised Code, unless the board has adopted a resolution under that section waiving its right to receive such a notice.

(5) Nothing in division (C) of this section prohibits the legislative authority of a municipal corporation or township from amending the ordinance or resolution under section 5709.51 of the Revised Code to extend the term of the exemption.

(D) An exemption granted under this section commences with the tax year specified in the ordinance or resolution so long as the year specified in the ordinance or resolution commences after the effective date of the ordinance or resolution. If the ordinance or resolution specifies a year commencing before the effective date of the ordinance or resolution or specifies no year, the exemption commences with the tax year in which an exempted improvement first appears on the tax list and that commences after the effective date of the ordinance or resolution. In lieu of stating a specific year, the ordinance or resolution may provide that the exemption commences in the tax year in which the value of an improvement exceeds a specified amount or in which the construction of one or more improvements is completed, provided that such tax year commences after the effective date of the ordinance or resolution. In lieu of stating a specific year, the ordinance or resolution may allow for the exemption to commence in different tax years on a parcel-by-parcel basis, with a separate exemption term specified for each parcel. The exemption ends on the date specified in the ordinance or resolution as the date the improvement ceases to be a public purpose. The exemption shall be claimed and allowed in the same or a similar manner as in the case of other real property exemptions. If an exemption status changes during a tax year, the procedure for the apportionment of the taxes for that year is the same as in the case of other changes in tax exemption status during the year.

(E) A municipal corporation or township, not later than fifteen days after the adoption of an ordinance or resolution granting a tax exemption under this section, shall submit to the director of development a copy of the ordinance or resolution. On or before the thirty-first day of March each year, the municipal corporation or township shall submit a status report to the director of development outlining the progress of the project during each year that the exemption remains in effect.

Last updated January 24, 2023 at 12:32 PM

Section 5709.411 | Declaration that improvements constitute public purpose - detached areas.

• Effective: December 13, 2001
• Latest Legislation: House Bill 405 - 124th General Assembly

(A) As used in this section, "detached improvement" means an improvement as defined in section 5709.41 of the Revised Code that satisfies all of the following:

(1) The ordinance declaring the improvement to be a public purpose was adopted under section 5709.41 of the Revised Code by a municipal corporation that is a party to a contract creating a joint economic development district under section 715.70 or 715.71 of the Revised Code.

(2) The improvement relates to a parcel of property located in territory that is detached by that municipal corporation to a township that is a party to the same contract creating the joint economic development district, pursuant to that contract and section 709.38 of the Revised Code.

(3) The ordinance declaring the improvements to be a public purpose is adopted prior to the detachment of that territory.

(B) The exemption from taxation for detached improvements under section 5709.41 of the Revised Code shall continue for the period prescribed in that section and the ordinance under which the improvements are declared to be a public purpose, or any amendments to the ordinance, even if the detachment occurs prior to the end of that period.

(C)(1) The municipal corporation may require the owner of any building or structure located on a parcel to which the detached improvement relates to pay service payments in lieu of taxes under section 5709.42 of the Revised Code after the territory including the detached improvement is detached. The service payments shall be distributed to the municipal corporation as provided in that section.

(2) The municipal corporation may use the service payments received under division (C)(1) of this section as prescribed by section 5709.43 of the Revised Code and the ordinance declaring the detached improvements to be a public purpose. The legislative authority of the municipal corporation may amend the ordinance to permit the service payments to be used to pay the cost of streets, roads, water lines, sewers, and other public infrastructure improvements as defined in section 5709.40 of the Revised Code extending from the municipal corporation to the detached territory or to the joint economic development district, or located on the detached territory or in the joint economic development district, or to pay debt service charges on securities issued by the municipal corporation to finance those public infrastructure improvements.

Section 5709.42 | Annual service payments in lieu of taxes.

• Effective: March 30, 2006
• Latest Legislation: House Bill 530 - 126th General Assembly

(A) A municipal corporation that has declared an improvement to be a public purpose under section 5709.40 or 5709.41 of the Revised Code may require the owner of any structure located on the parcel to make annual service payments in lieu of taxes to the county treasurer on or before the final dates for payment of real property taxes. Each such payment shall be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and payable against the improvement if it were not exempt from taxation. If any reduction in the levies otherwise applicable to such exempt property is made by the county budget commission under section 5705.31 of the Revised Code, the amount of the service payment in lieu of taxes shall be calculated as if such reduction in levies had not been made.

(B) Moneys collected as service payments in lieu of taxes shall be distributed at the same time and in the same manner as real property tax payments. However, subject to division (C) of this section or section 5709.913 of the Revised Code, the entire amount so collected shall be distributed to the municipal corporation in which the improvement is located. If an ordinance adopted under section 5709.40 or 5709.41 of the Revised Code specifies that service payments shall be paid to the city, local, or exempted village school district in which the improvements are located, the county treasurer shall distribute the portion of the service payments to that school district in an amount equal to the property tax payments the school district would have received from the portion of the improvements exempted from taxation had the improvements not been exempted, as directed in the ordinance. The treasurer shall maintain a record of the service payments in lieu of taxes made from property in each municipal corporation.

(C) If annual service payments in lieu of taxes are required under this section, the county treasurer shall distribute to the appropriate taxing authorities the portion of the service payments that represents payments required under division (F) of section 5709.40 of the Revised Code.

(D) Nothing in this section or section 5709.40 or 5709.41 of the Revised Code affects the taxes levied against that portion of the value of any parcel of property that is not exempt from taxation.

Section 5709.43 | Municipal public improvement tax increment equivalent fund - urban redevelopment tax increment equivalent fund.

• Effective: March 27, 2020
• Latest Legislation: House Bill 197 - 133rd General Assembly

(A) A municipal corporation that grants a tax exemption under section 5709.40 of the Revised Code shall establish a municipal public improvement tax increment equivalent fund into which shall be deposited service payments in lieu of taxes distributed to the municipal corporation under section 5709.42 of the Revised Code. If the legislative authority of the municipal corporation has adopted an ordinance under division (C) of section 5709.40 of the Revised Code, the municipal corporation shall establish at least one account in that fund with respect to ordinances adopted under division (B) of that section, and one account with respect to each incentive district created in an ordinance adopted under division (C) of that section. If an ordinance adopted under division (C) of section 5709.40 of the Revised Code also authorizes the use of service payments for housing renovations within the district, the municipal corporation shall establish separate accounts for the service payments designated for public infrastructure improvements and for the service payments authorized for the purpose of housing renovations. Money in an account of the municipal public improvement tax increment equivalent fund shall be used to finance the public infrastructure improvements designated in, or the housing renovations authorized by, the ordinance with respect to which the account is established; in the case of an account established with respect to an ordinance adopted under division (C) of that section, money in the account shall be used to finance the public infrastructure improvements designated, or the housing renovations authorized, for each incentive district created in the ordinance. Money in an account shall not be used to finance or support housing renovations that take place after the incentive district has expired. The municipal corporation also may deposit into any of those accounts municipal income tax revenue that has been designated by ordinance to finance the public infrastructure improvements and housing renovations.

(B) A municipal corporation may establish an urban redevelopment tax increment equivalent fund, by resolution or ordinance of its legislative authority, into which shall be deposited service payments in lieu of taxes distributed to the municipal corporation by the county treasurer as provided in section 5709.42 of the Revised Code for improvements exempt from taxation pursuant to an ordinance adopted under section 5709.41 of the Revised Code. Moneys deposited in the urban redevelopment tax increment equivalent fund shall be used for such purposes as are authorized in the resolution or ordinance establishing the fund. The municipal corporation also may deposit into the urban redevelopment tax increment equivalent fund municipal income tax revenue that has been dedicated to fund any of the purposes for which the fund is established.

(C)(1)(a) A municipal corporation may distribute money in the municipal public improvement tax increment equivalent fund or the urban redevelopment tax increment equivalent fund to any school district in which the exempt property is located, in an amount not to exceed the amount of real property taxes that such school district would have received from the improvement if it were not exempt from taxation, or use money in either or both funds to finance specific public improvements benefiting the school district. The resolution or ordinance establishing the fund shall set forth the percentage of such maximum amount that will be distributed to any affected school district or used to finance specific public improvements benefiting the school district.

(b) A municipal corporation also may distribute money in the municipal public improvement tax increment equivalent fund or the urban redevelopment tax increment equivalent fund as follows:

(i) To a board of county commissioners, in the amount that is owed to the board pursuant to division (E) of section 5709.40 of the Revised Code;

(ii) To a county in accordance with section 5709.913 of the Revised Code.

(2) Money from an account in a municipal public improvement tax increment equivalent fund or from an urban redevelopment tax increment equivalent fund may be distributed under division (C)(1)(b) of this section, regardless of the date a resolution or an ordinance was adopted under section 5709.40 or 5709.41 of the Revised Code that prompted the establishment of the account or the establishment of the urban redevelopment tax increment equivalent fund, even if the resolution or ordinance was adopted prior to March 30, 2006.

(D) Any incidental surplus remaining in the municipal public improvement tax increment equivalent fund or an account of that fund, or in the urban redevelopment tax increment equivalent fund, upon dissolution of the account or fund shall be transferred to the general fund of the municipal corporation.

Section 5709.431 | [Former Section 803.210 of H.B. 110, 134th General Assembly, amended by S.B. 225, 134th General Assembly, and codified as R.C. 5709.431 pursuant to R.C. 103.131] Applicability of R.C. 5709.40 and 5709.41.

• Effective: September 13, 2022
• Latest Legislation: Senate Bill 225 - 134th General Assembly

The amendment by H.B. 110 of the 134th General Assembly of section 5709.40 of the Revised Code applies to any projects commenced or completed, or ordinances adopted, on, before, or after September 30, 2021, provided that, with respect to projects commenced or completed, or ordinances adopted, before September 30, 2021, the legislative authority of the municipal corporation adopts an ordinance after September 30, 2021, to confirm the applicability of the amendment to the project or ordinance. The amendment by that act of section 5709.41 of the Revised Code applies to ordinances adopted after September 30, 2021, and also to ordinances adopted on or before that date if, and to the extent that, the ordinance either specifies the tax year in which the exemption commences, provides that the exemption commences in the tax year in which the value of an improvement exceeds a specified amount or in which the construction of one or more improvements is completed, or allows for the exemption to commence in different tax years on a parcel-by-parcel basis.

Last updated October 17, 2022 at 12:00 PM

Section 5709.44 | Foreign trade zone exemption.

• Effective: March 16, 1993
• Latest Legislation: Senate Bill 5 - 120th General Assembly

(A) As used in this section:

(1) "Tangible personal property" means the personal property of a merchant that is required to be returned on the average basis as provided in section 5711.15 of the Revised Code, and the average value of all articles purchased, received, or otherwise held by a manufacturer for the purpose of being used in manufacturing, combining, rectifying, or refining, and the average value of all articles that were at any time manufactured or changed in any way by the taxpayer, either by combining, rectifying, or refining, or adding thereto;

(2) "Foreign trade zone" means a general purpose foreign trade zone or a special purpose subzone for which, pursuant to the "Act of June 18, 1934," 48 Stat. 998, 19 U.S.C.A. 81a, as amended, a permit for foreign trade zone status was granted before January 1, 1992, including expansions of and additions to such a zone that are adjacent to the zone as it existed on January 1, 1992, but excluding special purpose subzones for which a permit is granted on or after such date.

(B) Tangible personal property, including such property when used solely for display or demonstration purposes, shall be considered to be in the stream of foreign commerce and shall be exempt from personal property taxation while held in a foreign trade zone.

Section 5709.45 | Downtown redevelopment districts.

• Effective: April 6, 2023
• Latest Legislation: House Bill 281 - 134th General Assembly

(A) As used in sections 5709.45 to 5709.47 of the Revised Code:

(1) "Downtown redevelopment district" or "district" means an area not more than ten acres enclosed by a continuous boundary in which at least one historic building is being, or will be, rehabilitated.

(2) "Historic building" and "rehabilitation" have the same meanings as in section 149.311 of the Revised Code.

(3) "Public infrastructure improvement" has the same meaning as in section 5709.40 of the Revised Code.

(4) "Improvement" means the increase in the assessed value of real property that would first appear on the tax list after the effective date of an ordinance adopted under this section were it not for the exemption granted by the ordinance.

(5) "Innovation district" means an area located entirely within a downtown redevelopment district, enclosed by a continuous boundary, and equipped with a high-speed broadband network capable of download speeds of at least one hundred gigabits per second.

(6) "Qualified business" means a business primarily engaged, or primarily organized to engage, in a trade or business that involves research and development, technology transfer, bio-technology, information technology, or the application of new technology developed through research and development or acquired through technology transfer.

(7) "Information technology" means the branch of technology devoted to the study and application of data and the processing thereof; the automatic acquisition, storage, manipulation or transformation, management, movement, control, display, switching, interchange, transmission or reception of data, and the development or use of hardware, software, firmware, and procedures associated with this processing. "Information technology" includes matters concerned with the furtherance of computer science and technology, design, development, installation, and implementation of information systems and applications that in turn will be licensed or sold to a specific target market. "Information technology" does not include the creation of a distribution method for existing products and services.

(8) "Research and development" means designing, creating, or formulating new or enhanced products, equipment, or processes, and conducting scientific or technological inquiry and experimentation in the physical sciences with the goal of increasing scientific knowledge that may reveal the bases for new or enhanced products, equipment, or processes.

(9) "Technology transfer" means the transfer of technology from one sector of the economy to another, including the transfer of military technology to civilian applications, civilian technology to military applications, or technology from public or private research laboratories to military or civilian applications.

(B) For the purposes of promoting rehabilitation of historic buildings, creating jobs, and encouraging economic development in commercial and mixed-use commercial and residential areas, and for the purpose of funding transportation improvements that will benefit such areas, the legislative authority of a municipal corporation may adopt an ordinance creating a downtown redevelopment district and declaring improvements to parcels within the district to be a public purpose and exempt from taxation. Downtown redevelopment districts shall not be created in areas used exclusively for residential purposes and shall not be utilized for development or redevelopment of residential areas.

The ordinance shall specify all of the following:

(1) The boundary of the district;

(2) The county treasurer's permanent parcel number associated with each parcel included in the district;

(3) The parcel or parcels within the district that include a historic building that is being or will be rehabilitated;

(4) The proposed life of the district;

(5) An economic development plan for the district that includes all of the following:

(a) A statement describing the principal purposes and goals to be served by creating the district;

(b) An explanation of how the municipal corporation will collaborate with businesses and property owners within the district to develop strategies for achieving such purposes and goals;

(c) A plan for using the service payments provided for in section 5709.46 of the Revised Code to promote economic development and job creation within the district.

Not more than seventy per cent of improvements to parcels within a downtown redevelopment district may be exempted from taxation under this section. A district may not include a parcel that is exempted from taxation under this section or section 5709.40 or 5709.41 of the Revised Code on the effective date of the ordinance. Except as provided in division (F) of this section, the life of a downtown redevelopment district shall not exceed ten years.

A municipal corporation may adopt more than one ordinance under division (B) of this section. A single such ordinance may create more than one downtown redevelopment district.

(C) For the purposes of attracting and facilitating growth of qualified businesses and supporting the economic development efforts of business incubators and accelerators, the legislative authority of a municipal corporation may designate an innovation district within a proposed or existing downtown redevelopment district. The life of the innovation district shall be identical to the downtown redevelopment district in which the innovation district is located. In addition to the requirements in division (B) of this section, an ordinance creating a downtown redevelopment district that includes an innovation district shall specify all of the following:

(1) The boundary of the innovation district;

(2) The permanent parcel number associated with each parcel included in the innovation district;

(3) An economic development plan for the innovation district that meets the criteria prescribed by division (B)(5) of this section.

(D) At least thirty days before adopting an ordinance under division (B) of this section, the legislative authority of the municipal corporation shall conduct a public hearing on the proposed ordinance and the accompanying economic development plan. At least thirty days before the public hearing, the legislative authority shall give notice of the public hearing and the proposed ordinance by first class mail to every real property owner whose property is located within the boundaries of the proposed district that is the subject of the proposed ordinance.

(E) Revenue derived from downtown redevelopment district service payments may be used by the municipal corporation for any of the following purposes:

(1) To finance or support loans, deferred loans, or grants to owners of historic buildings within the downtown redevelopment district. Such loans or grants shall be awarded upon the condition that the loan or grant amount may be used by the owner only to rehabilitate the historic building. A municipal corporation that awards a loan or grant under this division shall develop a plan for tracking the loan or grant recipient's use of the loan or grant and monitoring the progress of the recipient's rehabilitation project.

(2) To make contributions to a special improvement district for use under section 1710.14 of the Revised Code, to a community improvement corporation for use under section 1724.12 of the Revised Code, or to a nonprofit corporation, as defined in section 1702.01 of the Revised Code, the primary purpose of which is redeveloping historic buildings and historic districts for use by the corporation to rehabilitate a historic building within the downtown redevelopment district or to otherwise promote or enhance the district. Amounts contributed under division (E)(2) of this section shall not exceed the property tax revenue that would have been generated by twenty per cent of the assessed value of the exempted improvements within the downtown redevelopment district.

(3) To finance or support loans to owners of one or more buildings located within the district that do not qualify as historic buildings. Such loans shall be awarded upon the condition that the loan amount may be used by the owner only to make repairs and improvements to the building or buildings. A municipal corporation that awards a loan under this division shall develop a plan for tracking the loan recipient's use of the loan and monitoring the progress of the recipient's repairs or improvements.

(4) To finance public infrastructure improvements within the downtown redevelopment district. If revenue generated by the downtown redevelopment district will be used to finance public infrastructure improvements, the economic development plan described by division (B)(5) of this section shall identify specific projects that are being or will be undertaken within the district and describe how such infrastructure improvements will accommodate additional demands on the existing infrastructure within the district. A municipal corporation shall not use service payments derived from a downtown redevelopment district to repair or replace police or fire equipment.

(5) To finance or support loans, deferred loans, or grants to qualified businesses or to incubators and accelerators that provide services and capital to qualified businesses within an innovation district. Such loans or grants shall be awarded upon the condition that the loan or grant shall be used by the recipient to start or develop one or more qualified businesses within the innovation district. A municipal corporation that awards a loan or grant under this division shall develop a plan for tracking the loan or grant recipient's use of the loan or grant and monitoring the establishment and growth of the qualified business.

(F) Notwithstanding division (B) of this section, improvements to parcels located within a downtown redevelopment district may be exempted from taxation under this section for up to thirty years if either of the following apply:

(1) The ordinance creating the redevelopment district specifies that payments in lieu of taxes shall be paid to the city, local, or exempted village, and joint vocational school district or districts in which the redevelopment district is located in the amount of the taxes that would have been payable to the school district or districts if the improvements had not been exempted from taxation.

(2) The municipal corporation creating the district obtains the approval under division (G) of this section of the board of education of each city, local, and exempted village school district within which the district will be located.

(G)(1) The legislative authority of a municipal corporation seeking the approval of a school district for the purpose of division (G)(2) of this section shall send notice of the proposed ordinance to the school district not later than forty-five business days before it intends to adopt the ordinance. The notice shall include a copy of the proposed ordinance and shall indicate the date on which the legislative authority intends to adopt the ordinance. The board of education of the school district, by resolution adopted by a majority of the board, may do any of the following:

(a) Approve the exemption for the number of years specified in the proposed ordinance;

(b) Disapprove the exemption for the number of years in excess of ten;

(c) Approve the exemption on the condition that the legislative authority and the board negotiate an agreement providing for compensation to the school district equal in value to a percentage of the amount of taxes exempted in the eleventh and subsequent years of the exemption period or other mutually agreeable compensation. If an agreement is negotiated under this division, the legislative authority shall compensate all joint vocational school districts within which the downtown redevelopment district is located at the same rate and under the same terms received by the city, local, or exempted village school district.

(2) The board of education shall certify a resolution adopted under division (G)(1) of this section to the legislative authority of the municipal corporation not later than fourteen days before the date the legislative authority intends to adopt the ordinance as indicated in the notice. If the board of education approves the ordinance or negotiates a mutually acceptable compensation agreement with the legislative authority, the legislative authority may enact the ordinance in its current form. If the board disapproves of the ordinance and fails to negotiate a mutually acceptable compensation agreement with the legislative authority, the legislative authority may exempt improvements to parcels within the downtown redevelopment district for not more than ten years. If the board fails to certify a resolution to the legislative authority within the time prescribed by this division, the legislative authority may adopt the ordinance and may exempt improvements to parcels within the downtown redevelopment district for the period of time specified in the notice delivered to the board of education. The legislative authority may adopt the ordinance at any time after the board of education certifies its resolution approving the exemption to the legislative authority or, if the board approves the exemption on the condition that a mutually acceptable compensation agreement be negotiated, at any time after the compensation agreement is agreed to by the board and the legislative authority.

(3) If a board of education has adopted a resolution waiving its right to approve exemptions from taxation under this section and the resolution remains in effect, approval of exemptions by the board is not required under division (G) of this section. If a board of education has adopted a resolution allowing a legislative authority to deliver the notice required under division (G)(1) of this section fewer than forty-five business days before the legislative authority's adoption of the ordinance, the legislative authority shall deliver the notice to the board not later than the number of days before such adoption as prescribed by the board in its resolution. If a board of education adopts a resolution waiving its right to approve agreements or shortening the notification period, the board shall certify a copy of the resolution to the legislative authority. If the board of education rescinds such a resolution, it shall certify notice of the rescission to the legislative authority.

(4) If the legislative authority is not required by division (G) of this section to notify the board of education of the legislative authority's intent to create a downtown redevelopment district, the legislative authority shall comply with the notice requirements imposed under section 5709.83 of the Revised Code, unless the board has adopted a resolution under that section waiving its right to receive such a notice.

(H) Service payments in lieu of taxes that are attributable to any amount by which the effective tax rate of either a renewal levy with an increase or a replacement levy exceeds the effective tax rate of the levy renewed or replaced, or that are attributable to an additional levy, for a levy authorized by the voters for any of the following purposes on or after January 1, 2006, and which are provided pursuant to an ordinance creating a downtown redevelopment district under division (B) of this section shall be distributed to the appropriate taxing authority as required under division (C) of section 5709.46 of the Revised Code in an amount equal to the amount of taxes from that additional levy or from the increase in the effective tax rate of such renewal or replacement levy that would have been payable to that taxing authority from the following levies were it not for the exemption authorized under division (B) of this section:

(1) A tax levied under division (L) of section 5705.19 or section 5705.191 of the Revised Code for community developmental disabilities programs and services pursuant to Chapter 5126. of the Revised Code;

(2) A tax levied under division (Y) of section 5705.19 of the Revised Code for providing or maintaining senior citizens services or facilities;

(3) A tax levied under section 5705.22 of the Revised Code for county hospitals;

(4) A tax levied by a joint-county district or by a county under section 5705.19, 5705.191, or 5705.221 of the Revised Code for alcohol, drug addiction, and mental health services or facilities;

(5) A tax levied under section 5705.23 of the Revised Code for library purposes;

(6) A tax levied under section 5705.24 of the Revised Code for the support of children services and the placement and care of children;

(7) A tax levied under division (Z) of section 5705.19 of the Revised Code for the provision and maintenance of zoological park services and facilities under section 307.76 of the Revised Code;

(8) A tax levied under section 511.27 or division (H) of section 5705.19 of the Revised Code for the support of township park districts;

(9) A tax levied under division (A), (F), or (H) of section 5705.19 of the Revised Code for parks and recreational purposes of a joint recreation district organized pursuant to division (B) of section 755.14 of the Revised Code;

(10) A tax levied under section 1545.20 or 1545.21 of the Revised Code for park district purposes;

(11) A tax levied under section 5705.191 of the Revised Code for the purpose of making appropriations for public assistance; human or social services; public relief; public welfare; public health and hospitalization; and support of general hospitals;

(12) A tax levied under section 3709.29 of the Revised Code for a general health district program.

(I) An exemption from taxation granted under this section commences with the tax year specified in the ordinance so long as the year specified in the ordinance commences after the effective date of the ordinance. If the ordinance specifies a year commencing before the effective date of the ordinance or specifies no year whatsoever, the exemption commences with the tax year in which an exempted improvement first appears on the tax list and that commences after the effective date of the ordinance. In lieu of stating a specific year, the ordinance may provide that the exemption commences in the tax year in which the value of an improvement exceeds a specified amount or in which the construction of one or more improvements is completed, provided that such tax year commences after the effective date of the ordinance.

Except as otherwise provided in this division, the exemption ends on the date specified in the ordinance as the date the improvement ceases to be a public purpose or the downtown redevelopment district expires, whichever occurs first. The exemption of an improvement within a downtown redevelopment district may end on a later date, as specified in the ordinance, if the legislative authority and the board of education of the city, local, or exempted village school district within which the parcel or district is located have entered into a compensation agreement under section 5709.82 of the Revised Code with respect to the improvement, and the board of education has approved the term of the exemption under division (G) of this section, but in no case shall the improvement be exempted from taxation for more than thirty years. Exemptions shall be claimed and allowed in the same manner as in the case of other real property exemptions. If an exemption status changes during a year, the procedure for the apportionment of the taxes for that year is the same as in the case of other changes in tax exemption status during the year.

(J) Additional municipal financing of the projects and services described in division (E) of this section may be provided by any methods that the municipal corporation may otherwise use for financing such projects and services. If the municipal corporation issues bonds or notes to finance such projects and services and pledges money from the municipal downtown redevelopment district fund to pay the interest on and principal of the bonds or notes, the bonds or notes are not subject to Chapter 133. of the Revised Code.

(K) The municipal corporation, not later than fifteen days after the adoption of an ordinance under this section, shall submit to the director of development services a copy of the ordinance. On or before the thirty-first day of March of each year, the municipal corporation shall submit a status report to the director of development services. The report shall indicate, in the manner prescribed by the director, the progress of the projects and services during each year that an exemption remains in effect, including a summary of the receipts from service payments in lieu of taxes; expenditures of money from the funds created under section 5709.47 of the Revised Code; a description of the projects and services financed with such expenditures; and a quantitative summary of changes in employment and private investment resulting from each project and service.

(L) Nothing in this section shall be construed to prohibit a legislative authority from declaring to be a public purpose improvements with respect to more than one parcel.

(M)(1) The owner of real property located in a downtown redevelopment district may enter into an agreement with the municipal corporation that created the district to impose a redevelopment charge on the property to cover all or part of the cost of services, facilities, and improvements provided within the district under division (E) of this section. The agreement shall include the following:

(a) The amount of the redevelopment charge. The redevelopment charge may be a fixed dollar amount or an amount determined on the basis of the assessed valuation of the property or all or part of the profits, gross receipts, or other revenues of a business operating on the property, including rentals received from leases of the property. If the property is leased to one or more tenants, the redevelopment charge may be itemized as part of the lease rate.

(b) The termination date of the redevelopment charge. The redevelopment charge shall not be charged after the expiration or termination of the downtown redevelopment district.

(c) The terms by which the municipal corporation shall collect the redevelopment charge.

(d) The purposes for which the redevelopment charge may be used by the municipal corporation. The redevelopment charge shall be used only for those purposes described by division (E) of this section. The agreement may specify any or all of such purposes.

(2) Redevelopment charges collected by a municipal corporation under division (M) of this section shall be deposited to the municipal downtown redevelopment district fund created under section 5709.47 of the Revised Code.

(3) An agreement by a property owner under division (M) of this section is hereby deemed to be a covenant running with the land. The covenant is fully binding on behalf of and enforceable by the municipal corporation against any person acquiring an interest in the land and all of that person's successors and assigns.

(4) No purchase agreement for real estate or any interest in real estate upon which a redevelopment charge is levied shall be enforceable by the seller or binding upon the purchaser unless the purchase agreement specifically refers to the redevelopment charge. If a conveyance of such real estate or interest in such real estate is made pursuant to a purchase agreement that does not make such reference, the redevelopment charge shall continue to be a covenant running with the land fully binding on behalf of and enforceable by the municipal corporation against the person accepting the conveyance pursuant to the purchase agreement.

(5) If a redevelopment charge is not paid when due, the overdue amount shall be collected according to the terms of the agreement. If the agreement does not specify a procedure for collecting overdue redevelopment charges, the municipal corporation may certify the charge to the county auditor. The county auditor shall enter the unpaid charge on the tax list and duplicate of real property opposite the parcel against which it is charged and certify the charge to the county treasurer. The unpaid redevelopment charge is a lien on property against which it is charged from the date the charge is entered on the tax list, and shall be collected in the manner provided for the collection of real property taxes. Once the charge is collected, it shall be paid immediately to the municipal corporation.

Last updated February 9, 2023 at 11:03 AM

Section 5709.46 | Annual service payments in lieu of taxes.

• Effective: August 5, 2016
• Latest Legislation: House Bill 233 - 131st General Assembly

(A) A municipal corporation that has declared an improvement to be a public purpose under section 5709.45 of the Revised Code may require the owner of any structure located on the parcel to make annual service payments in lieu of taxes to the county treasurer on or before the final dates for payment of real property taxes. Each such payment shall be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and payable against the improvement if it were not exempt from taxation. If any reduction in the levies otherwise applicable to such exempt property is made by the county budget commission under section 5705.31 of the Revised Code, the amount of the service payment in lieu of taxes shall be calculated as if such reduction in levies had not been made.

(B) Moneys collected as service payments in lieu of taxes from a parcel shall be distributed at the same time and in the same manner as real property tax payments. However, subject to division (C) of this section or section 5709.913 of the Revised Code, the entire amount so collected shall be distributed to the municipal corporation in which the parcel is located. If an ordinance adopted under section 5709.45 of the Revised Code specifies that service payments shall be paid to the city, local, or exempted village school district in which the parcel is located, the county treasurer shall distribute the portion of the service payments to that school district in an amount equal to the property tax payments the school district would have received from the portion of the parcel's improvement exempted from taxation had the improvement not been exempted, as directed in the ordinance. The treasurer shall maintain a record of the service payments in lieu of taxes made from property in each municipal corporation.

(C) If annual service payments in lieu of taxes are required under this section, the county treasurer shall distribute to the appropriate taxing authorities the portion of the service payments that represents payments required under division (H) of section 5709.45 of the Revised Code.

(D) Nothing in this section or section 5709.45 of the Revised Code affects the taxes levied against that portion of the value of any parcel of property that is not exempt from taxation.

Section 5709.47 | Municipal downtown redevelopment district fund.

• Effective: August 5, 2016
• Latest Legislation: House Bill 233 - 131st General Assembly

(A) A municipal corporation that grants a tax exemption or enters into a redevelopment charge agreement under section 5709.45 of the Revised Code shall establish a municipal downtown redevelopment district fund into which shall be deposited service payments in lieu of taxes distributed to the municipal corporation under section 5709.46 of the Revised Code and redevelopment charges collected pursuant to division (M) of section 5709.45 of the Revised Code. If an ordinance adopted under division (B) of section 5709.45 of the Revised Code or an agreement under division (M) of that section authorizes the use of service payments or redevelopment charges for more than one of the purposes described in division (E) of that section, the municipal corporation shall establish separate accounts for the service payments and redevelopment charges designated for each such purpose. Money in an account of the municipal downtown redevelopment district fund shall be used for the purposes described in the ordinance creating the downtown redevelopment district and the redevelopment charge agreements. The municipal corporation also may deposit into any of those accounts municipal income tax revenue that has been designated by ordinance to finance the public infrastructure improvements.

(B)(1) A municipal corporation may distribute money in the municipal downtown redevelopment district fund to any school district in which the exempt property is located in an amount not to exceed the amount of real property taxes that such school district would have received from the improvement if it were not exempt from taxation, or use money in the fund to finance specific public improvements benefiting the school district. The resolution or ordinance establishing the fund shall set forth the percentage of such maximum amount that will be distributed to any affected school district or used to finance specific public improvements benefiting the school district.

(2) A municipal corporation also may distribute money in the municipal downtown redevelopment district fund to a county in accordance with section 5709.913 of the Revised Code.

(C) Any incidental surplus remaining in the municipal downtown redevelopment district fund or an account of that fund upon dissolution of the fund or account shall be transferred to the general fund of the municipal corporation.

Section 5709.48 | Transportation financing districts; creation.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) As used in this section and sections 5709.481, 5709.49, and 5709.50 of the Revised Code:

(1) "Regional transportation improvement project" has the same meaning as in section 5595.01 of the Revised Code.

(2) "Improvements" means the increase in the assessed value of any real property that would first appear on the tax list and duplicate of real and public utility property after the effective date of the resolution adopted under this section were it not for the exemption granted by that resolution.

(B) For the purposes described in division (A) of section 5595.06 of the Revised Code, the governing board of a regional transportation improvement project that was undertaken pursuant to section 5595.02 of the Revised Code before March 23, 2018, may, by resolution, create a transportation financing district and declare improvements to parcels within the district to be a public purpose and exempt from taxation.

(C) A transportation financing district shall consist of all territory of all counties that are participants in the regional transportation improvement project funded by the district, except that the district shall not include parcels used primarily for residential purposes, parcels that are currently exempt from taxation under this section or section 5709.40, 5709.41, 5709.45, 5709.73, or 5709.77 of the Revised Code, or parcels excluded from the district under division (G) of this section.

(D) A resolution creating a transportation financing district shall specify all of the following:

(1) The county treasurer's permanent parcel number associated with each parcel included in the district;

(2)(a) The percentage of improvements to be exempted from taxation and the duration of the exemption.

(b) Except as provided in division (E) of this section, the percentage of improvements to be exempted shall not exceed seventy-five per cent, and the duration of the exemption shall not exceed ten years.

(c) In no case may the life of the exemption exceed the remaining number of years the cooperative agreement for the regional transportation improvement district, described under section 5595.03 of the Revised Code, is in effect.

(3) A plan for the district that describes the principal purposes and goals to be served by the district and explains how the use of service payments provided for by section 5709.49 of the Revised Code will economically benefit owners of property within the district.

(E) Subject to division (D)(2)(c) of this section, improvements to parcels located in a transportation financing district may be exempted from taxation for up to thirty years, and the percentage of improvements that may be exempted may equal up to one hundred per cent, if either of the following apply:

(1) The governing board, before adopting a resolution under division (B) of this section, obtains the approval under division (F) of section of the board of education of each city, local, and exempted village school district within the territory of the proposed transportation financing district.

(2) In the resolution creating the transportation financing district, the governing board agrees to compensate each city, local, or exempted village, and joint vocational school district or districts in which the transportation financing district is located for the full amount of taxes that would have been payable to the school district or districts if the improvements had not been exempted from taxation.

(F)(1) A governing board seeking the approval of a school district for the purpose of division (E)(1) of this section shall send notice of the proposed resolution to the school district not later than forty-five business days before it intends to adopt the resolution. The notice shall include a copy of the proposed resolution and shall indicate the date on which the governing board intends to adopt the resolution.

The board of education, by resolution adopted by a majority of the board, may approve the exemption for the period or for the exemption percentage specified in the notice; may disapprove the exemption for the number of years in excess of ten, may disapprove the exemption for the percentage of the improvements to be exempted in excess of seventy-five per cent, or both; or may approve the exemption on the condition that the governing board and the board of education negotiate an agreement providing for compensation equal in value to a percentage of the amount of taxes exempted or some other mutually agreeable compensation. If a mutually acceptable compensation agreement is negotiated between the governing board and the board of education, the governing board shall compensate the joint vocational school district within which the district is located at the same rate and under the same terms received by the city, local, or exempted village school district.

(2) The board of education shall certify a resolution adopted under division (F)(1) of this section to the governing board not later than fourteen days before the date the governing board intends to adopt the resolution as indicated in the notice. If the board of education approves the ordinance or negotiates a mutually acceptable compensation agreement, the governing board may enact the resolution in its current form. If the board of education disapproves of the ordinance and fails to negotiate a mutually acceptable compensation agreement, the resolution is subject to the limitations prescribed by divisions (D)(2)(b) and (c) of this section. If the board of education fails to certify a resolution within the time prescribed by this division, the governing board may adopt the resolution and declare the improvements a public purpose for the period of time specified in the resolution, or, in the case of exemption percentages proposed in excess of seventy-five per cent, for the exemption percentage specified in the resolution.

The governing board may adopt the resolution at any time after the board of education certifies its resolution approving the exemption, or, if the board of education approves the exemption on the condition that a mutually acceptable compensation agreement be negotiated, at any time after the compensation agreement is agreed to by the board of education and the governing board.

(3) A board of education may adopt a resolution waiving its right to approve or receive notice of transportation financing districts proposed under this section. If a board of education has adopted such a resolution, the terms of that resolution supersede the requirements of division (F)(1) of this section. The governing board may negotiate an agreement with a board of education providing for some mutually agreeable compensation in exchange for the board of education adopting such a resolution. If a board of education has adopted such an ordinance or resolution, it shall certify a copy to the governing board. If the board of education rescinds such a resolution, it shall certify notice of the rescission to the governing board.

(4) If the governing board is not required by division (F) of this section to notify the board of education of the governing board's intent to create a transportation financing district, the governing board shall comply with the notice requirements imposed under section 5709.83 of the Revised Code, unless the board of education has adopted a resolution under that section waiving its right to receive such a notice.

(G) The governing board shall notify and obtain the approval of every real property owner whose property is included in the proposed transportation financing district. The approval shall include a signed agreement between the property owner and the governing board that specifies the projects and purposes for which the service payments made by the owner under section 5709.49 of the Revised Code will be used. Such an agreement does not supersede any compensation agreement between the governing board and a school district under division (F) of this section. If the property owner and the governing board do not reach an agreement under this division, the parcel shall be excluded from the district.

(H)(1) Upon adopting a resolution creating a transportation financing district, the governing board shall send a copy of the resolution and documentation sufficient to prove that the requirements of divisions (F) and (G) of this section have been met to the director of development. The director shall evaluate the resolution and documentation to determine if the governing board has fully complied with the requirements of this section. If the director approves the resolution, the director shall send notice of approval to the governing board. If the director does not approve the resolution, the director shall send a notice of denial to the governing board that includes the reason or reasons for the denial. If the director does not make a determination within ninety days after receiving a resolution under this section, the director is deemed to have approved the resolution. No resolution creating a transportation financing district is effective without actual or constructive approval by the director under this section.

(2) An exemption from taxation granted under this section commences with the tax year specified in the resolution so long as the year specified in the resolution commences after the effective date of the resolution. If the resolution specifies a year commencing before the effective date of the resolution or specifies no year whatsoever, the exemption commences with the tax year in which an exempted improvement first appears on the tax list and that commences after the effective date of the resolution.

(3) Except as otherwise provided in this division, the exemption ends on the date specified in the resolution as the date the improvement ceases to be a public purpose or the regional transportation improvement project funded by the service payments dissolves under section 5595.13 of the Revised Code, whichever occurs first. Exemptions shall be claimed and allowed in the same manner as in the case of other real property exemptions. If an exemption status changes during a year, the procedure for the apportionment of the taxes for that year is the same as in the case of other changes in tax exemption status during the year.

(I) The resolution creating a transportation financing district may be amended at any time by majority vote of the governing board and with the approval of the director of development obtained in the same manner as approval of the original resolution. Such an amendment may include adding a parcel to the district that was previously excluded under division (G) of this section, so long as the governing board and the owner of the parcel reach an agreement on the use of service payments as provided under that division.

Last updated October 10, 2023 at 4:01 PM

Section 5709.481 | Voluntary assessments.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The governing board of a regional transportation improvement project may negotiate and enter into a voluntary agreement with the owner or owners of any parcel located in a transportation financing district created by the board whereby the owner or owners agree to subject the parcel to an assessment levied by the governing board and the governing board agrees to use the proceeds of that assessment for the purposes described in division (A) of section 5595.06 of the Revised Code.

(B) The agreement shall specify the amount and duration of the assessment. The assessment may not be collected after the dissolution of the associated regional transportation improvement project under section 5595.13 of the Revised Code.

(C) The governing board shall annually compute the amount of each assessment imposed by an agreement under this section and certify the amount to the owner or owners of the parcel and to the county auditor of the county in which the parcel is located. The county auditor shall enter the assessment on the tax list of real property opposite against which it is charged, and certify the assessment to the county treasurer. The assessment shall be charged and collected in the same manner as real property taxes and shall be treated in the same manner as real property taxes for all purposes of the lien described in section 323.11 of the Revised Code, including the priority and enforcement of the lien. Money collected from the assessment shall be paid immediately to the governing board. The county treasurer shall maintain a record of all payments of assessments under this section.

(D) The governing board may negotiate and enter into as many agreements under this section as are necessary or useful in serving the principal purposes and goals described in the resolution creating the district. One agreement may impose an assessment on more than one parcel only if the owner or owners of all such parcels have approved the agreement.

(E) An agreement may be amended for the purposes of subjecting additional parcels to the assessment by resolution adopted by the governing board and approved by the owner or owners of the additional parcels. An agreement may be rescinded or may be amended for any purpose other than subjecting additional parcels to the assessment by resolution adopted by the governing board and approved by the owner or owners of every parcel that is subject to the assessment imposed under the agreement.

(F) An agreement under this section is hereby deemed to be a covenant running with each parcel of land that is subject to the agreement. The covenant is fully binding on behalf of and enforceable by the governing board against any person who subsequently acquires an interest in the land and all of that person's successors and assigns. No purchase agreement for real estate or any interest in real estate that is subject to such an agreement shall be enforceable by the seller or binding upon the purchaser unless the purchase agreement specifically refers to the agreement. If a conveyance of such real estate or interest in such real estate is made pursuant to a purchase agreement that does not make such a reference, the agreement shall continue to be a covenant running with the land fully binding on behalf of and enforceable by the governing board against the person accepting the conveyance pursuant to the purchase agreement.

Last updated October 10, 2023 at 4:02 PM

Section 5709.49 | Service payments.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The governing board of a regional transportation improvement project that has declared an improvement to be a public purpose under section 5709.48 of the Revised Code shall require the owner of any parcel located in the transportation financing district to make annual service payments in lieu of taxes to the county treasurer on or before the final dates for payment of real property taxes. Each such payment shall be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and payable against the improvement if it were not exempt from taxation. If any reduction in the levies otherwise applicable to such exempt property is made by the county budget commission under section 5705.31 of the Revised Code, the amount of the service payment in lieu of taxes shall be calculated as if such reduction in levies had not been made.

(B) Moneys collected as service payments in lieu of taxes from a parcel shall be distributed at the same time and in the same manner as real property tax payments. If a resolution adopted under section 5709.48 of the Revised Code specifies that service payments shall be paid to any city, local, or exempted village, and joint vocational school district or districts in which the parcel is located, the county treasurer shall distribute the portion of the service payments to the district or districts in an amount equal to the property tax payments each such district would have received from the portion of the parcel's improvement exempted from taxation had the improvement not been exempted, or some other amount as directed in the resolution. The treasurer shall maintain a record of the service payments in lieu of taxes made from property in each transportation financing district.

(C) Nothing in this section or section 5709.48 of the Revised Code affects the taxes levied against that portion of the value of any parcel of property that is not exempt from taxation.

Last updated October 10, 2023 at 4:04 PM

Section 5709.50 | Regional transportation improvement project fund.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The governing board of a regional transportation improvement project that grants a tax exemption under section 5709.48 of the Revised Code or enters into one or more voluntary agreements imposing assessments under section 5709.481 of the Revised Code shall establish a regional transportation improvement project fund into which shall be deposited service payments in lieu of taxes distributed under section 5709.49 of the Revised Code and assessments collected pursuant to such agreements. Money in the regional transportation improvement project fund shall be used by the governing board for the purposes described in division (A) of section 5595.06 of the Revised Code and in accordance with the agreements between the governing board and property owners under division (G) of section 5709.48 of the Revised Code. Money in the regional transportation improvement project fund shall be administered by the governing board in accordance with the requirements of section 5595.08 of the Revised Code and may be invested as provided in section 5595.09 of the Revised Code.

(B) The regional transportation improvement project fund is dissolved by operation of law upon the dissolution of the associated regional transportation improvement project under section 5595.13 of the Revised Code. Any incidental surplus remaining in the fund, to the extent unencumbered, shall be divided and distributed by the county treasurer of the most populous county in which the district is located as follows:

(1) To the general funds of the subdivisions and taxing units in which the district is located, an amount equal to the surplus revenue multiplied by a fraction, the numerator of which is the amount of service payment revenue deposited to the fund after the most recent collection of property taxes and payments in lieu of taxes, and the denominator of which is the total amount deposited to the fund after the most recent collection of property taxes and payments in lieu of taxes. This amount shall be divided proportionally based on the property tax levy revenue foregone by each such subdivision and taxing unit due to the exemption of improvements to property within the district at the most recent collection of service payments in lieu of taxes. The division of revenue shall account for amounts returned to city, local, or exempted village, and joint vocational school districts through compensation arrangements entered into under division (E) of section 5709.48 of the Revised Code. The amount distributed to each subdivision or taxing unit shall be apportioned among its funds as if that amount had been levied and collected as taxes and distributed in the most recent settlement of taxes.

(2) To the owners of parcels subject to a special assessment under section 5709.481 of the Revised Code, all remaining surplus revenue. This amount shall be divided proportionally based on the amount of the assessment levied against each such parcel at the most recent collection of such assessments. Owners of parcels that are delinquent in paying an assessment imposed by an agreement under section 5709.481 of the Revised Code may not receive surplus revenue under this division. The share of surplus revenue that such owner or owners would have otherwise received shall be divided proportionally among the owners of nondelinquent parcels.

Last updated September 12, 2023 at 10:58 AM

Section 5709.51 | Extension of exemption from taxation of improvements.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The legislative authority of a municipal corporation, a board of township trustees, or a board of county commissioners may amend or provide in an ordinance or resolution adopted in accordance with division (B) of section 5709.40, section 5709.41, division (B) of section 5709.73, or division (A) of section 5709.78 of the Revised Code, as applicable, to extend the exemption from taxation of improvements to the parcel or parcels designated in the ordinance or resolution for an additional period of not more than thirty years if all of the following conditions are met:

(1) Either (a) the service payments made pursuant to section 5709.42, 5709.74, or 5709.79 of the Revised Code by the owner or owners of the parcel or parcels designated in the ordinance or resolution exceeded one million five hundred thousand dollars in the calendar year preceding the adoption of the amendment or (b) the legislative authority of the municipal corporation, a board of township trustees, or a board of county commissioners determines that the service payments to be made pursuant to section 5709.42, 5709.74, or 5709.79 of the Revised Code by the owner or owners of the parcel or parcels designated in the ordinance or resolution will exceed one million five hundred thousand dollars in any future year.

(2) The service payments described in division (A)(1) of this section did not exceed one million five hundred thousand dollars in any calendar year before the calendar year immediately preceding the adoption of the amendment. This condition applies only to amendments adopted under this section on or after January 1, 2024.

(3) The amendment extending or the ordinance or resolution approving the exemption provides for compensation to the city, local, or exempted village school district in which the parcel or parcels are located equal in value to the amount of taxes that would be payable to the school district if the improvements had not been exempted from taxation for the additional period.

(B) Not later than fifteen days after adopting or amending an ordinance or resolution under this section, the legislative authority of the municipal corporation, board of township trustees, or board of county commissioners shall send a copy of the amendment to the director of development.

(C) The amendment to this section by H.B. 33 of the 135th general assembly applies to any proceedings commenced after the effective date of that amendment , and, insofar as the amendment supports the actions taken, also applies to proceedings that, on that date, are pending, in progress, or completed, notwithstanding the applicable law previously in effect or any provision to the contrary in a prior resolution, ordinance, order, advertisement, notice, or other proceeding. Any proceedings pending or in progress on the effective date of that amendment , shall be deemed to have been taken in conformity with that amendment.

Last updated September 12, 2023 at 2:24 PM

Section 5709.52 | Exemption from taxation for increase in value for newly developable or redevelopment property.

• Effective: March 28, 2017
• Latest Legislation: Senate Bill 235 - 131st General Assembly

(A) As used in this section:

(1) "Newly developable property" means a parcel of real property on which no commercial, agricultural, or industrial operations are currently being conducted and on which construction of one or more commercial or industrial buildings or structures is planned but for which a certificate of occupancy has not yet been issued.

(2) "Redevelopment property" means a parcel of real property on which one or more commercial or industrial buildings or structures are or were situated, no commercial, agricultural, or industrial operations are currently being conducted, and construction or reconstruction of new commercial or industrial buildings or structures is planned but for which a certificate of occupancy following completion of the construction or reconstruction has not yet been issued.

(3) "Commercial or industrial building or structure" means a building or structure classified as to use for tax purposes as commercial or industrial that, prior to its use or occupation, requires a certificate of occupancy. "Commercial or industrial building or structure" does not include a building or structure any part of which is to be used as a dwelling.

(4) "Remnant parcel" means a parcel resulting from a subdividing plat that includes original property.

(5) "Original property" means newly developable property or redevelopment property subject to an exemption under division (C) of this section for a tax year.

(6) "Unexempted value" means the taxable value of original property for the tax year preceding the first tax year for which the property is subject to an exemption under division (C) of this section.

(7) "Subdividing plat" means a plat subdividing land that is approved by the board of county commissioners, municipal corporation legislative authority, or municipal, county, or regional planning or platting commission having authority to approve plats in the territory in which newly developable property or redevelopment property is situated.

(8) "Certificate of occupancy" means a valid certificate of occupancy issued for a commercial or industrial building or structure by the building official having jurisdiction over that building or structure.

(9) "Increase in the taxable value" or "increase in value" means the amount by which the taxable value of a parcel as it would have appeared on the tax list and duplicate of real and public utility property for a tax year exceeds the unexempted value of that parcel.

(10) "Political subdivision" means a municipal corporation, township, or county.

(11) "Legislative body" means the legislative authority of a municipal corporation, a board of township trustees, or a board of county commissioners.

(B)(1)(a) The owner of newly developable property or redevelopment property may submit an application to exempt the increase in value of such property from taxation under this section to one of the following:

(i) Except as provided in division (B)(1)(a)(iii) of this section, if the property is located in a municipal corporation, to the municipal corporation;

(ii) Except as provided in division (B)(1)(a)(iii) of this section, if the property is located in the unincorporated area of a township, to the township or the county;

(iii) If any portion of the value of the property is exempted from taxation under section 5709.40, 5709.41, 5709.73, or 5709.78 of the Revised Code, to the municipal corporation, township, or county that authorized that exemption.

(b) An application filed under division (B)(1) of this section shall include both of the following:

(i) A statement attesting to each of the following:

(I) That the parcel is newly developable property or redevelopment property;

(II) If the parcel is newly developable property, that either the parcel is zoned to permit construction of a new commercial or industrial building or structure or no applicable zoning regulation prohibits construction of a new commercial or industrial building or structure on that parcel;

(III) If the parcel is redevelopment property, that either the property is zoned to permit construction or reconstruction of a new commercial or industrial building or structure or no applicable zoning regulation prohibits construction or reconstruction of a new commercial or industrial building or structure on that parcel.

(ii) A certificate obtained from the county treasurer stating that there are no outstanding real property taxes, assessments, penalties, or charges that are due and unpaid with respect to the property on the date the certificate is issued. For the purposes of this division, taxes and assessments are due and unpaid if they remain unpaid on the date they are required to be paid as prescribed by section 323.12 of the Revised Code.

(2) If an application submitted under division (B)(1) of this section is complete, the legislative body of a political subdivision receiving the application, by resolution or ordinance, may declare that the development or redevelopment of a parcel that is the subject of the application is a public purpose and that increases in the taxable value of the parcel shall be exempted from taxation as provided in this section. A board of township trustees or board of county commissioners shall not adopt a resolution under this section with respect to a parcel that is the subject of a resolution that has been adopted by a board of county commissioners or board of township trustees, respectively, under division (B)(2) of this section. A resolution or ordinance adopted under division (B)(2) of this section shall specify the tax year for which the exemption from taxation shall commence, which shall be the tax year in which the application is filed or the ensuing tax year, and the term of the exemption, which shall be for six tax years except as provided in division (C) of this section.

Before adopting an ordinance or resolution under division (B)(2) of this section, a legislative body shall do both of the following:

(a) Notify the board of education of each city, local, exempted village, or joint vocational school district in which the parcel is located of the legislative body's intent to adopt such an ordinance or resolution with respect to that parcel;

(b) If the legislative body is a board of township trustees or board of county commissioners, notify the board of commissioners of the county or the board of trustees of the township, respectively, in which the parcel is located of the legislative body's intent to adopt such a resolution with respect to that parcel.

(C) Any increase in the taxable value of newly developable property or redevelopment property is exempted from taxation beginning with the tax year specified in the ordinance or resolution adopted under division (B)(2) of this section and for the five ensuing tax years, except that the exemption shall not apply to any tax year in which one of the following occurs or any ensuing year:

(1) The owner obtains a certificate of occupancy for a commercial or industrial building or structure located on the property.

(2) The owner transfers title to the property to another person.

(3) Applicable zoning regulations change in such a manner that construction of a new commercial or industrial building or structure is no longer permitted.

(4) Subject to division (D) of this section, a subdividing plat that includes the property is presented to the county auditor under section 5713.18 of the Revised Code.

(5) Any commercial, agricultural, or industrial operations are conducted on the property.

(D)(1) If the event described in division (C)(4) of this section occurs, any increase in the taxable value of remnant parcels is exempted from taxation beginning with the tax year in which the subdividing plat is presented to the county auditor. The taxable value of each remnant parcel for that tax year shall equal the same proportion of the unexempted value that the true value in money of the remnant parcel for that tax year bears to the aggregate true value in money of all remnant parcels for that tax year. Remnant parcels remain subject to the exemption authorized under division (D) of this section until the earlier of the last tax year for which the exemption applies or the tax year immediately preceding the tax year in which one of the events described in divisions (C)(1) to (5) of this section occurs with respect to any remnant parcel, subject to division (D)(2) of this section.

(2) If the event described in division (C)(4) of this section occurs with respect to a remnant parcel for which a portion of the remnant parcel's value is exempted for the preceding tax year under this section, the taxable value of each parcel resulting from the subdivision of the remnant parcel for the tax year in which the subdividing plat is presented to the county auditor shall equal the same proportion of the taxable value attributable to the remnant parcel under division (D)(1) of this section that the true value in money of the resultant parcel for that tax year bears to the aggregate true value in money of all such resultant parcels for that tax year.

(3) Nothing in division (D) of this section authorizes an exemption from taxation for parcels that do not include original property.

(E) No exemption from taxation is authorized under this section for the increase in value of newly developable property or redevelopment property unless the owner of the property files an application for exemption as required by section 5715.27 of the Revised Code.

(F) A recoupment charge shall be levied on a parcel the increase in value of which was exempted from taxation under this section if either of the following events occurs:

(1) The owner transfers title to the parcel to another person, provided that owner made no improvements to the parcel from the date the owner filed an application under division (B) of this section to the date of that transfer.

(2) Commercial, agricultural, or industrial operations are conducted on the parcel before the owner obtains a certificate of occupancy for the commercial or industrial building or structure located on the parcel.

The charge shall equal the difference between the amount of real property taxes paid with respect to the parcel for the three tax years immediately preceding the year in which the event occurs and the amount of such taxes that would have been due for those three years if no portion of the value of the parcel was exempted under this section for those years.

The county auditor shall place the charge as a separate item on the tax list for the tax year in which the event occurs or the occurrence of the event is discovered. The charge shall constitute a lien of the state upon the parcel as of the first day of January of the tax year in which the charge is levied and shall continue until discharged. The charge shall be collected by the county treasurer in the same manner and at the same time as real property taxes levied against the parcel.

Upon the collection of any charge levied under this division and any penalties and interest arising thereon, the auditor, after deducting all fees allowed on the collection of money on the tax list and duplicate, shall distribute the full amount thereof among taxing units in proportion to the per cent of the total real property taxes levied upon the parcel in the preceding tax year by each taxing unit. Money distributed under this division to a taxing unit shall be allocated among its various funds in the same proportion that the real property taxes levied during the preceding tax year that are required to be paid into each fund bear to the total real property taxes levied during that year.

Section 5709.53 | Exemption of solar, wind or hydrothermal energy system and of certain energy facilities.

• Effective: March 27, 2020
• Latest Legislation: House Bill 197 - 133rd General Assembly

(A) A solar, wind, or hydrothermal energy system on which construction or installation is completed during the period from August 14, 1979, through December 31, 1985, that meets the guidelines established under division (B) of section 1551.20 of the Revised Code is exempt from real property taxation.

(B) Any fixture or other real property included in an energy facility with an aggregate nameplate capacity of two hundred fifty kilowatts or less is exempt from taxation if construction or installation is completed on or after January 1, 2010.

As used in division (B) of this section, "energy facility" and "nameplate capacity" have the same meanings as in section 5727.01 of the Revised Code.

Section 5709.55 | Grape products - personal property exemption.

• Effective: September 28, 2016
• Latest Legislation: House Bill 342 - 131st General Assembly

Personal property used exclusively to transport, store, crush, press, process, ferment, or age grape agricultural products in the production of grape juice or grape wine, and grape juice or grape wine held in the course of business, but not held in labeled containers in which it will be sold, are exempt from personal property taxation if either of the following apply:

(A) The property is used or held by the holder of a liquor permit issued under section 4303.03 or 4303.031 of the Revised Code whose primary business is the production of wine.

(B) The production is used or held by a person or enterprise engaged in agriculture that sells the grape agricultural products or juice or wine to a holder of a liquor permit issued under section 4303.03 or 4303.031 of the Revised Code if the primary business of the permittee is the production of wine.

Section 5709.56 | Residential development land exemption.

• Effective: September 20, 2024
• Latest Legislation: House Bill 50 - 135th General Assembly

(A) As used in this section:

(1) "Pre-residential development property" means a subdivided parcel of unimproved real property on which construction of one or more residential buildings is planned but has not yet commenced. The construction of streets, sidewalks, curbs, or driveways or the installation of water, sewer, or other utility lines on a subdivided parcel does not cause construction of a residential building to commence for purposes of division (A)(1) or (B) of this section. "Pre-residential development property" does not include a parcel, any portion of the value of which is exempted from taxation under section 5709.40, 5709.41, 5709.73, or 5709.78 of the Revised Code.

(2) "Residential building" means a building or structure any part of which is to be used as a dwelling.

(3) "Unexempted value" means, for any subdivided parcel, one of the following:

(a) Except as provided in division (A)(3)(b) of this section, the purchase price of the original property multiplied by a fraction, the numerator of which is the true value in money of the subdivided parcel for the tax year the subdivided parcel first appears on the tax list and the denominator of which is the true value in money of all subdivided parcels subdivided from that original parcel for that tax year.

(b) If a subdivided parcel exempted under this section is itself subdivided, the "unexempted value" of the newly subdivided parcel equals the unexempted value, as defined in division (A)(3)(a) of this section, of the parcel from which the newly subdivided parcel was subdivided for the tax year preceding the tax year the newly subdivided parcel first appears on the tax list multiplied by a fraction, the numerator of which is the true value in money of the newly subdivided parcel for the tax year it first appears on the tax list and the denominator of which is the true value in money for that year of all newly subdivided parcels resulting from the most recent subdivision.

(4) "Subdivided parcel" means a parcel resulting from the subdivision of original property pursuant to a plat subdividing that property presented to the county auditor under section 5713.18 of the Revised Code.

(5) "Original property" means the parcel from which a subdivided parcel is subdivided.

(6) "Qualifying owner" means the owner of pre-residential development property for any portion of a tax year ending on or after October 3, 2023, that includes the date a plat subdividing land including such property is presented to the county auditor under section 5713.18 of the Revised Code, or any other person to which title to the property is transferred, without consideration, by another qualifying owner.

(7) "Purchase price" means the price at which the property was most recently sold in an arm's length transaction, as described in section 5713.03 of the Revised Code.

(B) Subject to section 5715.27 of the Revised Code, any increase in taxable value above the unexempted value of pre-residential development property owned by a qualifying owner is exempted from taxation beginning with the first tax year the pre-residential development property appears on the tax list after a plat subdividing land including that property is presented to the county auditor under section 5713.18 of the Revised Code and for each of the seven ensuing tax years, except that the exemption shall not apply beginning with the tax year that begins after the tax year in which the earliest of the following occurs:

(1) Construction of a residential building on that property commences;

(2) Title to the property is transferred for consideration by a qualifying owner to another person;

(3) Any portion of the value of that property is exempted from taxation under section 5709.40, 5709.41, 5709.73, or 5709.78 of the Revised Code.

(C) A county auditor shall not approve an application for an exemption authorized under this section unless the qualifying owner certifies that the parcel that is the subject of the exemption satisfies the requirements of division (A)(1) of this section for pre-residential development property.

(D)(1) If a parcel subject to the partial exemption authorized by this section is valued at its current value for agricultural use under section 5713.31 of the Revised Code, the county auditor shall regularly inspect the parcel to determine whether a conversion of land devoted exclusively to agricultural use, as defined in section 5713.30 of the Revised Code, has occurred. Nothing in this section shall be construed to limit the authority of a county auditor to levy any recoupment charge pursuant to sections 5713.34 and 5713.35 of the Revised Code.

(2) Nothing in this section shall be construed to allow a parcel that is not land devoted exclusively to agricultural use, as defined in section 5713.30 of the Revised Code, to be valued at its current value for agricultural use under section 5713.31 of the Revised Code.

(3) Nothing in this section shall be construed to authorize a parcel subject to the partial exemption authorized by this section to be valued and assessed for taxation in any manner other than in accordance with Section 36 of Article II or Section 2 of Article XII, Ohio Constitution, as applicable to the parcel.

Last updated July 8, 2024 at 12:50 PM

Section 5709.57 | Agreements with qualifying athletic complexes.

• Effective: September 13, 2018
• Latest Legislation: House Bill 292 - 132nd General Assembly

(A) As used in this section, "qualifying athletic complex" means real property that is an athletic complex or upon which an athletic complex is situated, provided the complex is or was designated, on or after January 1, 2013, as a United States olympic or paralympic training site by the United States olympic committee. "Qualifying athletic complex" does not include any of the following real property if the real property does not appear on the tax year 2017 tax list:

(1) A building or structure situated on land comprising the complex;

(2) An improvement to a building or structure comprising the complex;

(3) A fixture attached or affixed to the land or a building, structure, or improvement comprising the complex.

(B) Within sixty days after the effective date of this section, a board of county commissioners shall enter into an agreement with the owner of a qualifying athletic complex if the owner agrees to do so. The agreement shall require the owner to make annual payments to one or more subdivisions levying property tax in the territory that includes the qualifying athletic complex in return for the board declaring the complex to be a public purpose and shall authorize the exemption of up to one hundred per cent of the taxable value of that complex from property taxation. The payments to a subdivision shall be made in the amount or proportion, at the times, and in the manner specified in the agreement. The agreement may be for a specified number of years not to exceed seventeen. The board shall not enter into such an agreement unless the board obtains the consent of the city, local, or exempted village school district in whose territory the complex is located in accordance with division (C) of this section.

The agreement shall prescribe the circumstances under which and the manner in which the agreement may be canceled for noncompliance with the agreement.

An agreement entered into under this section may specify whether and under what conditions the agreement may continue if title to any property exempted from taxation pursuant to that agreement is transferred.

The agreement shall provide that any penalty, interest, or other charge imposed under the agreement be charged against the property exempted from taxation pursuant to that agreement.

(C) For the purpose of obtaining the approval of a city, local, or exempted village school district under division (B) of this section, the board of county commissioners shall deliver to the board of education a copy of the proposed agreement not later than forty-five days before approving the agreement. The board of education, by resolution adopted by a majority of the board, shall approve or disapprove the agreement and certify a copy of the resolution to the board of county commissioners not later than fourteen days before the date stipulated by the board of county commissioners as the date upon which approval of the agreement is to be formally considered by the board of county commissioners. The board of education may include in the resolution conditions under which the board of education would approve the agreement. Subject to the limitation on the time to enter into such an agreement under division (B) of this section, the board of county commissioners may approve the agreement at any time after the board of education certifies its resolution approving the agreement to the board of county commissioners, or, if the board of education approves the agreement conditionally, at any time after the conditions are agreed to by the board of education and the board of county commissioners.

(D) Payments described in division (B) of this section that are received by a subdivision shall be deposited in the subdivision's general fund and may be used by the subdivision for any lawful purpose.

(E) If an agreement entered into under division (B) of this section is canceled for noncompliance with the agreement, the county auditor shall levy a charge on the property that had been subject to that agreement equal to the amount of delinquent and current real property taxes assessed against the property on the date the agreement was entered into. If any other penalty, interest, or charge becomes chargeable against the property pursuant to the agreement, the county auditor shall levy the amount of the penalty, interest, or charge against the property.

The auditor shall enter any such penalty, interest, or charge as a separate item on the tax list for the current tax year to be collected by the county treasurer in the same manner and at the same time as real property taxes levied against the property for the current year are collected. The penalty, interest, or charge is a lien of the state upon the property as of the first day of the tax year in which the penalty, interest, or other charge is levied as provided in section 323.11 of the Revised Code.

(F) An agreement entered into under this section may authorize an exemption described in division (B) of this section beginning for tax year 2010, except as otherwise provided in this division. An exemption application for any tax year for which the time period described in division (F) of section 5715.27 of the Revised Code has expired before the date the agreement is entered into shall be filed with the tax commissioner on or before the ninetieth day after that date, notwithstanding that division. The commissioner shall remit unpaid tax, penalties, and interest for that property for a tax year for which the application is approved, notwithstanding section 5713.081 of the Revised Code, except that any taxes paid for any such tax year shall not be refunded and shall be regarded as a payment of taxes for the tax year and credited and distributed by the county treasurer as would other taxes paid for that tax year.

Section 5709.61 | Enterprise zone definitions.

• Effective: September 30, 2021
• Latest Legislation: House Bill 110 - 134th General Assembly

As used in sections 5709.61 to 5709.69 of the Revised Code:

(A) "Enterprise zone" or "zone" means any of the following:

(1) An area with a single continuous boundary designated in the manner set forth in section 5709.62 or 5709.63 of the Revised Code and certified by the director of development as having a population of at least four thousand according to the best and most recent data available to the director and having at least two of the following characteristics:

(a) It is located in a municipal corporation defined by the United States office of management and budget as a principal city of a metropolitan statistical area;

(b) It is located in a county designated as being in the "Appalachian region" under the "Appalachian Regional Development Act of 1965," 79 Stat. 5, 40 App. U.S.C.A. 403, as amended;

(c) Its average rate of unemployment, during the most recent twelve-month period for which data are available, is equal to at least one hundred twenty-five per cent of the average rate of unemployment for the state of Ohio for the same period;

(d) There is a prevalence of commercial or industrial structures in the area that are vacant or demolished, or are vacant and the taxes charged thereon are delinquent, and certification of the area as an enterprise zone would likely result in the reduction of the rate of vacant or demolished structures or the rate of tax delinquency in the area;

(e) The population of all census tracts in the area, according to the federal census of 2000, decreased by at least ten per cent between the years 1980 and 2000;

(f) At least fifty-one per cent of the residents of the area have incomes of less than eighty per cent of the median income of residents of the municipal corporation or municipal corporations in which the area is located, as determined in the same manner specified under section 119(b) of the "Housing and Community Development Act of 1974," 88 Stat. 633, 42 U.S.C. 5318, as amended;

(g) The area contains structures previously used for industrial purposes, but currently not so used due to age, obsolescence, deterioration, relocation of the former occupant's operations, or cessation of operations resulting from unfavorable economic conditions either generally or in a specific economic sector;

(h) It is located within one or more adjacent city, local, or exempted village school districts, the income-weighted tax capacity of each of which is less than seventy per cent of the average of the income-weighted tax capacity of all city, local, or exempted village school districts in the state according to the most recent data available to the director from the department of taxation.

The director of development shall adopt rules in accordance with Chapter 119. of the Revised Code establishing conditions constituting the characteristics described in divisions (A)(1)(d), (g), and (h) of this section.

If an area could not be certified as an enterprise zone unless it satisfied division (A)(1)(g) of this section, the legislative authority may enter into agreements in that zone under section 5709.62, 5709.63, or 5709.632 of the Revised Code only if such agreements result in the development of the facilities described in that division, the parcel of land on which such facilities are situated, or adjacent parcels. The director of development annually shall review all agreements in such zones to determine whether the agreements have resulted in such development; if the director determines that the agreements have not resulted in such development, the director immediately shall revoke certification of the zone and notify the legislative authority of such revocation. Any agreements entered into prior to revocation under this paragraph shall continue in effect for the period provided in the agreement.

(2) An area with a single continuous boundary designated in the manner set forth in section 5709.63 of the Revised Code and certified by the director of development as having all of the following characteristics:

(a) Being located within a county that contains a population of three hundred thousand or less;

(b) Having a population of at least one thousand according to the best and most recent data available to the director;

(c) Having at least two of the characteristics described in divisions (A)(1)(b) to (h) of this section.

(3) An area with a single continuous boundary designated in the manner set forth under division (A)(1) of section 5709.632 of the Revised Code and certified by the director of development as having a population of at least four thousand, or under division (A)(2) of that section and certified as having a population of at least one thousand, according to the best and most recent data available to the director.

(B) "Enterprise" means any form of business organization including, but not limited to, any partnership, sole proprietorship, or corporation, including an S corporation as defined in section 1361 of the Internal Revenue Code and any corporation that is majority worker-owned either directly through the ownership of stock or indirectly through participation in an employee stock ownership plan.

(C) "Facility" means an enterprise's place of business in a zone, including land, buildings, machinery, equipment, and other materials, except inventory, used in business. "Facility" includes land, buildings, machinery, production and station equipment, other equipment, and other materials, except inventory, used in business to generate electricity, provided that, for purposes of sections 5709.61 to 5709.69 of the Revised Code, the value of the property at such a facility shall be reduced by the value, if any, that is not apportioned under section 5727.15 of the Revised Code to the taxing district in which the facility is physically located. In the case of such a facility that is physically located in two adjacent taxing districts, the property located in each taxing district constitutes a separate facility.

"Facility" does not include any portion of an enterprise's place of business used primarily for making retail sales unless the place of business is located in an impacted city as defined in section 1728.01 of the Revised Code or the board of education of the city, local, or exempted village school district within the territory of which the place of business is located adopts a resolution waiving the exclusion of retail facilities under section 5709.634 of the Revised Code.

(D) "Vacant facility" means a facility that has been vacant for at least ninety days immediately preceding the date on which an agreement is entered into under section 5709.62 or 5709.63 of the Revised Code.

(E) "Expand" means to make expenditures to add land, buildings, machinery, equipment, or other materials, except inventory, to a facility that equal at least ten per cent of the market value of the facility prior to such expenditures, as determined for the purposes of local property taxation.

(F) "Renovate" means to make expenditures to alter or repair a facility that equal at least fifty per cent of the market value of the facility prior to such expenditures, as determined for the purposes of local property taxation.

(G) "Occupy" means to make expenditures to alter or repair a vacant facility equal to at least twenty per cent of the market value of the facility prior to such expenditures, as determined for the purposes of local property taxation.

(H) "Project site" means all or any part of a facility that is newly constructed, expanded, renovated, or occupied by an enterprise.

(I) "Project" means any undertaking by an enterprise to establish a facility or to improve a project site by expansion, renovation, or occupancy.

(J) "Position" means the position of one full-time employee performing a particular set of tasks and duties.

(K) "Full-time employee" means an individual who is employed for consideration by an enterprise for at least thirty-five hours a week, or who renders any other standard of service generally accepted by custom or specified by contract as full-time employment.

(L) "New employee" means a full-time employee first employed by an enterprise at a facility that is a project site after the enterprise enters an agreement under section 5709.62 or 5709.63 of the Revised Code. "New employee" does not include an employee if, immediately prior to being employed by the enterprise, the employee was employed by an enterprise that is a related member or predecessor enterprise of that enterprise.

(M) "Unemployed person" means any person who is totally unemployed in this state, as that term is defined in division (M) of section 4141.01 of the Revised Code, for at least ten consecutive weeks immediately preceding that person's employment at a facility that is a project site, or who is so unemployed for at least twenty-six of the fifty-two weeks immediately preceding that person's employment at such a facility.

(N) "JTPA eligible employee" means any individual who is eligible for employment or training under the "Job Training Partnership Act," 96 Stat. 1324 (1982), 29 U.S.C. 1501, as amended.

(O) "First used in business" means that the property referred to has not been used in business in this state by the enterprise that owns it, or by an enterprise that is a related member or predecessor enterprise of such an enterprise, other than as inventory, prior to being used in business at a facility as the result of a project.

(P) "Training program" means any noncredit training program or course of study that is offered by any state college or university; university branch district; community college; technical college; nonprofit college or university certified under section 1713.02 of the Revised Code; school district; joint vocational school district; school registered and authorized to offer programs under section 3332.05 of the Revised Code; an entity administering any federal, state, or local adult education and training program; or any enterprise; and that meets all of the following requirements:

(1) It is approved by the director of development;

(2) It is established or operated to satisfy the need of a particular industry or enterprise for skilled or semi-skilled employees;

(3) An individual is required to complete the course or program before filling a position at a project site.

(Q) "Development" means to engage in the process of clearing and grading land, making, installing, or constructing water distribution systems, sewers, sewage collection systems, steam, gas, and electric lines, roads, curbs, gutters, sidewalks, storm drainage facilities, and construction of other facilities or buildings equal to at least fifty per cent of the market value of the facility prior to the expenditures, as determined for the purposes of local property taxation.

(R) "Large manufacturing facility" means a single Ohio facility that employed an average of at least one thousand individuals during the five calendar years preceding an agreement authorized under division (C)(3) of section 5709.62 or division (B)(2) of section 5709.63 of the Revised Code. For purposes of this division, both of the following apply:

(1) A single Ohio manufacturing facility employed an average of at least one thousand individuals during the five calendar years preceding entering into such an agreement if one-fifth of the sum of the number of employees employed on the highest employment day during each of the five calendar years equals or exceeds one thousand.

(2) The highest employment day is the day or days during a calendar year on which the number of employees employed at a single Ohio manufacturing facility was greater than on any other day during the calendar year.

(S) "Business cycle" means the cycle of business activity usually regarded as passing through alternating stages of prosperity and depression.

(T) "Making retail sales" means the effecting of point-of-final-purchase transactions at a facility open to the consuming public, wherein one party is obligated to pay the price and the other party is obligated to provide a service or to transfer title to or possession of the item sold.

(U) "Environmentally contaminated" means that hazardous substances exist at a facility under conditions that have caused or would cause the facility to be identified as contaminated by the state or federal environmental protection agency. These may include facilities located at sites identified in the master sites list or similar database maintained by the state environmental protection agency if the sites have been investigated by the agency and found to be contaminated.

(V) "Remediate" means to make expenditures to clean up an environmentally contaminated facility so that it is no longer environmentally contaminated that equal at least ten per cent of the real property market value of the facility prior to such expenditures as determined for the purposes of property taxation.

(W) "Related member" has the same meaning as defined in section 5733.042 of the Revised Code without regard to division (B) of that section, except that it is used with respect to an enterprise rather than a taxpayer.

(X) "Predecessor enterprise" means an enterprise from which the assets or equity of another enterprise has been transferred, which transfer resulted in the full or partial nonrecognition of gain or loss, or resulted in a carryover basis, both as determined by rule adopted by the tax commissioner.

(Y) "Successor enterprise" means an enterprise to which the assets or equity of another enterprise has been transferred, which transfer resulted in the full or partial nonrecognition of gain or loss, or resulted in a carryover basis, both as determined by rule adopted by the tax commissioner.

(Z) "Megaproject," "megaproject operator," and "megaproject supplier" have the same meanings as in section 122.17 of the Revised Code.

Last updated August 4, 2021 at 11:08 AM

Section 5709.62 | Designation of enterprise zones by municipal corporations.

• Effective: September 30, 2021
• Latest Legislation: House Bill 110 - 134th General Assembly

(A) In any municipal corporation that is defined by the United States office of management and budget as a principal city of a metropolitan statistical area, the legislative authority of the municipal corporation may designate one or more areas within its municipal corporation as proposed enterprise zones. Upon designating an area, the legislative authority shall petition the director of development services for certification of the area as having the characteristics set forth in division (A)(1) of section 5709.61 of the Revised Code as amended by Substitute Senate Bill No. 19 of the 120th general assembly. Except as otherwise provided in division (E) of this section, on and after July 1, 1994, legislative authorities shall not enter into agreements under this section unless the legislative authority has petitioned the director and the director has certified the zone under this section as amended by that act; however, all agreements entered into under this section as it existed prior to July 1, 1994, and the incentives granted under those agreements shall remain in effect for the period agreed to under those agreements. Within sixty days after receiving such a petition, the director shall determine whether the area has the characteristics set forth in division (A)(1) of section 5709.61 of the Revised Code, and shall forward the findings to the legislative authority of the municipal corporation. If the director certifies the area as having those characteristics, and thereby certifies it as a zone, the legislative authority may enter into an agreement with an enterprise under division (C) of this section.

(B) Any enterprise that wishes to enter into an agreement with a municipal corporation under division (C) of this section shall submit a proposal to the legislative authority of the municipal corporation on a form prescribed by the director of development services, together with the application fee established under section 5709.68 of the Revised Code. The form shall require the following information:

(1) An estimate of the number of new employees whom the enterprise intends to hire, or of the number of employees whom the enterprise intends to retain, within the zone at a facility that is a project site, and an estimate of the amount of payroll of the enterprise attributable to these employees;

(2) An estimate of the amount to be invested by the enterprise to establish, expand, renovate, or occupy a facility, including investment in new buildings, additions or improvements to existing buildings, machinery, equipment, furniture, fixtures, and inventory;

(3) A listing of the enterprise's current investment, if any, in a facility as of the date of the proposal's submission.

The enterprise shall review and update the listings required under this division to reflect material changes, and any agreement entered into under division (C) of this section shall set forth final estimates and listings as of the time the agreement is entered into. The legislative authority may, on a separate form and at any time, require any additional information necessary to determine whether an enterprise is in compliance with an agreement and to collect the information required to be reported under section 5709.68 of the Revised Code.

(C) Upon receipt and investigation of a proposal under division (B) of this section, if the legislative authority finds that the enterprise submitting the proposal is qualified by financial responsibility and business experience to create and preserve employment opportunities in the zone and improve the economic climate of the municipal corporation, the legislative authority may do one of the following:

(1) Enter into an agreement with the enterprise under which the enterprise agrees to establish, expand, renovate, or occupy a facility and hire new employees, or preserve employment opportunities for existing employees, in return for one or more of the following incentives:

(a) Exemption for a specified number of years, not to exceed fifteen, of a specified portion, up to seventy-five per cent, of the assessed value of tangible personal property first used in business at the project site as a result of the agreement. If an exemption for inventory is specifically granted in the agreement pursuant to this division, the exemption applies to inventory required to be listed pursuant to sections 5711.15 and 5711.16 of the Revised Code, except that, in the instance of an expansion or other situations in which an enterprise was in business at the facility prior to the establishment of the zone, the inventory that is exempt is that amount or value of inventory in excess of the amount or value of inventory required to be listed in the personal property tax return of the enterprise in the return for the tax year in which the agreement is entered into.

(b) Exemption for a specified number of years, not to exceed fifteen, of a specified portion, up to seventy-five per cent, of the increase in the assessed valuation of real property constituting the project site subsequent to formal approval of the agreement by the legislative authority;

(c) Provision for a specified number of years, not to exceed fifteen, of any optional services or assistance that the municipal corporation is authorized to provide with regard to the project site.

(2) Enter into an agreement under which the enterprise agrees to remediate an environmentally contaminated facility, to spend an amount equal to at least two hundred fifty per cent of the true value in money of the real property of the facility prior to remediation as determined for the purposes of property taxation to establish, expand, renovate, or occupy the remediated facility, and to hire new employees or preserve employment opportunities for existing employees at the remediated facility, in return for one or more of the following incentives:

(a) Exemption for a specified number of years, not to exceed fifteen, of a specified portion, not to exceed fifty per cent, of the assessed valuation of the real property of the facility prior to remediation;

(b) Exemption for a specified number of years, not to exceed fifteen, of a specified portion, not to exceed one hundred per cent, of the increase in the assessed valuation of the real property of the facility during or after remediation;

(c) The incentive under division (C)(1)(a) of this section, except that the percentage of the assessed value of such property exempted from taxation shall not exceed one hundred per cent;

(d) The incentive under division (C)(1)(c) of this section.

(3) Enter into an agreement with an enterprise that plans to purchase and operate a large manufacturing facility that has ceased operation or announced its intention to cease operation, in return for exemption for a specified number of years, not to exceed fifteen, of a specified portion, up to one hundred per cent, of the assessed value of tangible personal property used in business at the project site as a result of the agreement, or of the assessed valuation of real property constituting the project site, or both;

(4) Enter into an agreement with an enterprise that either is the owner of real property constituting the site of a megaproject or is a megaproject supplier in return for an exemption for a specified number of years, not to exceed thirty, of a specified portion, up to one hundred per cent, of the increase in the assessed value of real property constituting the site of a megaproject or real property owned and occupied by the megaproject supplier, respectively, beginning after the tax year in which the agreement is formally approved by the legislative authority.

(D)(1) Notwithstanding divisions (C)(1)(a) and (b) of this section, the portion of the assessed value of tangible personal property or of the increase in the assessed valuation of real property exempted from taxation under those divisions may exceed seventy-five per cent in any year for which that portion is exempted if the average percentage exempted for all years in which the agreement is in effect does not exceed sixty per cent, or if the board of education of the city, local, or exempted village school district within the territory of which the property is or will be located approves a percentage in excess of seventy-five per cent.

(2) Notwithstanding any provision of the Revised Code to the contrary, the exemptions described in divisions (C)(1)(a), (b), and (c), (C)(2)(a), (b), and (c), and (C)(3) of this section may be for up to fifteen years and the exemption described in division (C)(4) of this section may be for up to thirty years if the board of education of the city, local, or exempted village school district within the territory of which the property is or will be located approves a number of years in excess of ten.

(3) For the purpose of obtaining the approval of a city, local, or exempted village school district under division (D)(1) or (2) of this section, the legislative authority shall deliver to the board of education a notice not later than forty-five days prior to approving the agreement, excluding Saturdays, Sundays, and legal holidays as defined in section 1.14 of the Revised Code. The notice shall state the percentage to be exempted, an estimate of the true value of the property to be exempted, and the number of years the property is to be exempted. The board of education, by resolution adopted by a majority of the board, shall approve or disapprove the agreement and certify a copy of the resolution to the legislative authority not later than fourteen days prior to the date stipulated by the legislative authority as the date upon which approval of the agreement is to be formally considered by the legislative authority. The board of education may include in the resolution conditions under which the board would approve the agreement, including the execution of an agreement to compensate the school district under division (B) of section 5709.82 of the Revised Code. The legislative authority may approve the agreement at any time after the board of education certifies its resolution approving the agreement to the legislative authority, or, if the board approves the agreement conditionally, at any time after the conditions are agreed to by the board and the legislative authority. If an agreement is negotiated between the legislative authority and the board to compensate the school district for all or part of the taxes exempted, the legislative authority shall compensate the joint vocational school district within which the property is located at the same rate and under the same terms received by the city, local, or exempted village school district.

If a board of education has adopted a resolution waiving its right to approve agreements and the resolution remains in effect, approval of an agreement by the board is not required under this division. If a board of education has adopted a resolution allowing a legislative authority to deliver the notice required under this division fewer than forty-five business days prior to the legislative authority's approval of the agreement, the legislative authority shall deliver the notice to the board not later than the number of days prior to such approval as prescribed by the board in its resolution. If a board of education adopts a resolution waiving its right to approve agreements or shortening the notification period, the board shall certify a copy of the resolution to the legislative authority. If the board of education rescinds such a resolution, it shall certify notice of the rescission to the legislative authority.

(4) The legislative authority shall comply with section 5709.83 of the Revised Code unless the board of education has adopted a resolution under that section waiving its right to receive such notice.

(E) This division applies to zones certified by the director of development services under this section prior to July 22, 1994.

The legislative authority that designated a zone to which this division applies may enter into an agreement with an enterprise if the legislative authority finds that the enterprise satisfies one of the criteria described in divisions (E)(1) to (5) of this section:

(1) The enterprise currently has no operations in this state and, subject to approval of the agreement, intends to establish operations in the zone;

(2) The enterprise currently has operations in this state and, subject to approval of the agreement, intends to establish operations at a new location in the zone that would not result in a reduction in the number of employee positions at any of the enterprise's other locations in this state;

(3) The enterprise, subject to approval of the agreement, intends to relocate operations, currently located in another state, to the zone;

(4) The enterprise, subject to approval of the agreement, intends to expand operations at an existing site in the zone that the enterprise currently operates;

(5) The enterprise, subject to approval of the agreement, intends to relocate operations, currently located in this state, to the zone, and the director of development services has issued a waiver for the enterprise under division (B) of section 5709.633 of the Revised Code.

The agreement shall require the enterprise to agree to establish, expand, renovate, or occupy a facility in the zone and hire new employees, or preserve employment opportunities for existing employees, in return for one or more of the incentives described in division (C) of this section.

(F) All agreements entered into under this section shall be in the form prescribed under section 5709.631 of the Revised Code. After an agreement is entered into under this section, if the legislative authority revokes its designation of a zone, or if the director of development services revokes a zone's certification, any entitlements granted under the agreement shall continue for the number of years specified in the agreement.

(G) Except as otherwise provided in this division, an agreement entered into under this section shall require that the enterprise pay an annual fee equal to the greater of one per cent of the dollar value of incentives offered under the agreement or five hundred dollars; provided, however, that if the value of the incentives exceeds two hundred fifty thousand dollars, the fee shall not exceed two thousand five hundred dollars. The fee shall be payable to the legislative authority once per year for each year the agreement is effective on the days and in the form specified in the agreement. Fees paid shall be deposited in a special fund created for such purpose by the legislative authority and shall be used by the legislative authority exclusively for the purpose of complying with section 5709.68 of the Revised Code and by the tax incentive review council created under section 5709.85 of the Revised Code exclusively for the purposes of performing the duties prescribed under that section. The legislative authority may waive or reduce the amount of the fee charged against an enterprise, but such a waiver or reduction does not affect the obligations of the legislative authority or the tax incentive review council to comply with section 5709.68 or 5709.85 of the Revised Code.

(H) When an agreement is entered into pursuant to this section, the legislative authority authorizing the agreement shall forward a copy of the agreement to the director of development services and to the tax commissioner within fifteen days after the agreement is entered into. If any agreement includes terms not provided for in section 5709.631 of the Revised Code affecting the revenue of a city, local, exempted village, or joint vocational school district or causing revenue to be forgone by the district, including any compensation to be paid to the school district pursuant to section 5709.82 of the Revised Code, those terms also shall be forwarded in writing to the director of development services along with the copy of the agreement forwarded under this division.

(I) After an agreement is entered into, the enterprise shall file with each personal property tax return required to be filed, or annual report required to be filed under section 5727.08 of the Revised Code, while the agreement is in effect, an informational return, on a form prescribed by the tax commissioner for that purpose, setting forth separately the property, and related costs and values, exempted from taxation under the agreement.

(J) Enterprises may agree to give preference to residents of the zone within which the agreement applies relative to residents of this state who do not reside in the zone when hiring new employees under the agreement.

(K) An agreement entered into under this section may include a provision requiring the enterprise to create one or more temporary internship positions for students enrolled in a course of study at a school or other educational institution in the vicinity, and to create a scholarship or provide another form of educational financial assistance for students holding such a position in exchange for the student's commitment to work for the enterprise at the completion of the internship.

(L) The tax commissioner's authority in determining the accuracy of any exemption granted by an agreement entered into under this section is limited to divisions (C)(1)(a) and (b), (C)(2)(a), (b), and (c), (C)(3) and (4), (D), and (I) of this section and divisions (B)(1) to (10) of section 5709.631 of the Revised Code and, as authorized by law, to enforcing any modification to, or revocation of, that agreement by the legislative authority of a municipal corporation or the director of development services.

Last updated August 4, 2021 at 11:09 AM

Section 5709.63 | Designation of enterprise zones by counties.

• Effective: September 30, 2021
• Latest Legislation: House Bill 110 - 134th General Assembly

(A) With the consent of the legislative authority of each affected municipal corporation or of a board of township trustees, a board of county commissioners may, in the manner set forth in section 5709.62 of the Revised Code, designate one or more areas in one or more municipal corporations or in unincorporated areas of the county as proposed enterprise zones. A board of county commissioners may designate no more than one area within a township, or within adjacent townships, as a proposed enterprise zone. The board shall petition the director of development services for certification of the area as having the characteristics set forth in division (A)(1) or (2) of section 5709.61 of the Revised Code as amended by Substitute Senate Bill No. 19 of the 120th general assembly. Except as otherwise provided in division (D) of this section, on and after July 1, 1994, boards of county commissioners shall not enter into agreements under this section unless the board has petitioned the director and the director has certified the zone under this section as amended by that act; however, all agreements entered into under this section as it existed prior to July 1, 1994, and the incentives granted under those agreements shall remain in effect for the period agreed to under those agreements. The director shall make the determination in the manner provided under section 5709.62 of the Revised Code.

Any enterprise wishing to enter into an agreement with the board under division (B) or (D) of this section shall submit a proposal to the board on the form and accompanied by the application fee prescribed under division (B) of section 5709.62 of the Revised Code. The enterprise shall review and update the estimates and listings required by the form in the manner required under that division. The board may, on a separate form and at any time, require any additional information necessary to determine whether an enterprise is in compliance with an agreement and to collect the information required to be reported under section 5709.68 of the Revised Code.

(B) If the board of county commissioners finds that an enterprise submitting a proposal is qualified by financial responsibility and business experience to create and preserve employment opportunities in the zone and to improve the economic climate of the municipal corporation or municipal corporations or the unincorporated areas in which the zone is located and to which the proposal applies, the board, with the consent of the legislative authority of each affected municipal corporation or of the board of township trustees, may do one of the following:

(1) Enter into an agreement with the enterprise under which the enterprise agrees to establish, expand, renovate, or occupy a facility in the zone and hire new employees, or preserve employment opportunities for existing employees, in return for the following incentives:

(a) When the facility is located in a municipal corporation, the board may enter into an agreement for one or more of the incentives provided in division (C) of section 5709.62 of the Revised Code, subject to division (D) of that section;

(b) When the facility is located in an unincorporated area, the board may enter into an agreement for one or more of the following incentives:

(i) Exemption for a specified number of years, not to exceed fifteen, of a specified portion, up to sixty per cent, of the assessed value of tangible personal property first used in business at a project site as a result of the agreement. If an exemption for inventory is specifically granted in the agreement pursuant to this division, the exemption applies to inventory required to be listed pursuant to sections 5711.15 and 5711.16 of the Revised Code, except, in the instance of an expansion or other situations in which an enterprise was in business at the facility prior to the establishment of the zone, the inventory that is exempt is that amount or value of inventory in excess of the amount or value of inventory required to be listed in the personal property tax return of the enterprise in the return for the tax year in which the agreement is entered into.

(ii) Exemption for a specified number of years, not to exceed fifteen, of a specified portion, up to sixty per cent, of the increase in the assessed valuation of real property constituting the project site subsequent to formal approval of the agreement by the board;

(iii) Provision for a specified number of years, not to exceed fifteen, of any optional services or assistance the board is authorized to provide with regard to the project site;

(iv) The incentive described in division (C)(2) of section 5709.62 of the Revised Code.

(2) Enter into an agreement with an enterprise that plans to purchase and operate a large manufacturing facility that has ceased operation or has announced its intention to cease operation, in return for exemption for a specified number of years, not to exceed fifteen, of a specified portion, up to one hundred per cent, of tangible personal property used in business at the project site as a result of the agreement, or of real property constituting the project site, or both;

(3) Enter into an agreement with an enterprise that either is the owner of real property constituting the site of a megaproject or is a megaproject supplier in return for an exemption for a specified number of years, not to exceed thirty, of a specified portion, up to one hundred per cent, of the increase in the assessed value of real property constituting the site of a megaproject or real property owned and occupied by the megaproject supplier, respectively, beginning after the tax year in which the agreement is formally approved by the legislative authority.

(C)(1)(a) Notwithstanding divisions (B)(1)(b)(i) and (ii) of this section, the portion of the assessed value of tangible personal property or of the increase in the assessed valuation of real property exempted from taxation under those divisions may exceed sixty per cent in any year for which that portion is exempted if the average percentage exempted for all years in which the agreement is in effect does not exceed fifty per cent, or if the board of education of the city, local, or exempted village school district within the territory of which the property is or will be located approves a percentage in excess of sixty per cent.

(b) Notwithstanding any provision of the Revised Code to the contrary, the exemptions described in divisions (B)(1)(b)(i), (ii), (iii), and (iv) and (B)(2) of this section may be for up to fifteen years and the exemption described in division (B)(3) of this section may be for up to thirty years if the board of education of the city, local, or exempted village school district within the territory of which the property is or will be located approves a number of years in excess of ten.

(c) For the purpose of obtaining the approval of a city, local, or exempted village school district under division (C)(1)(a) or (b) of this section, the board of county commissioners shall deliver to the board of education a notice not later than forty-five days prior to approving the agreement, excluding Saturdays, Sundays, and legal holidays as defined in section 1.14 of the Revised Code. The notice shall state the percentage to be exempted, an estimate of the true value of the property to be exempted, and the number of years the property is to be exempted. The board of education, by resolution adopted by a majority of the board, shall approve or disapprove the agreement and certify a copy of the resolution to the board of county commissioners not later than fourteen days prior to the date stipulated by the board of county commissioners as the date upon which approval of the agreement is to be formally considered by the board of county commissioners. The board of education may include in the resolution conditions under which the board would approve the agreement, including the execution of an agreement to compensate the school district under division (B) of section 5709.82 of the Revised Code. The board of county commissioners may approve the agreement at any time after the board of education certifies its resolution approving the agreement to the board of county commissioners, or, if the board of education approves the agreement conditionally, at any time after the conditions are agreed to by the board of education and the board of county commissioners. If an agreement is negotiated between the legislative authority and the board to compensate the school district for all or part of the taxes exempted, the legislative authority shall compensate the joint vocational school district within which the property is located at the same rate and under the same terms received by the city, local, or exempted village school district.

If a board of education has adopted a resolution waiving its right to approve agreements and the resolution remains in effect, approval of an agreement by the board of education is not required under division (C) of this section. If a board of education has adopted a resolution allowing a board of county commissioners to deliver the notice required under this division fewer than forty-five business days prior to approval of the agreement by the board of county commissioners, the board of county commissioners shall deliver the notice to the board of education not later than the number of days prior to such approval as prescribed by the board of education in its resolution. If a board of education adopts a resolution waiving its right to approve agreements or shortening the notification period, the board of education shall certify a copy of the resolution to the board of county commissioners. If the board of education rescinds such a resolution, it shall certify notice of the rescission to the board of county commissioners.

(2) The board of county commissioners shall comply with section 5709.83 of the Revised Code unless the board of education has adopted a resolution under that section waiving its right to receive such notice.

(D) This division applies to zones certified by the director of development services under this section prior to July 22, 1994.

With the consent of the legislative authority of each affected municipal corporation or board of township trustees of each affected township, the board of county commissioners that designated a zone to which this division applies may enter into an agreement with an enterprise if the board finds that the enterprise satisfies one of the criteria described in divisions (D)(1) to (5) of this section:

(1) The enterprise currently has no operations in this state and, subject to approval of the agreement, intends to establish operations in the zone;

(2) The enterprise currently has operations in this state and, subject to approval of the agreement, intends to establish operations at a new location in the zone that would not result in a reduction in the number of employee positions at any of the enterprise's other locations in this state;

(3) The enterprise, subject to approval of the agreement, intends to relocate operations, currently located in another state, to the zone;

(4) The enterprise, subject to approval of the agreement, intends to expand operations at an existing site in the zone that the enterprise currently operates;

(5) The enterprise, subject to approval of the agreement, intends to relocate operations, currently located in this state, to the zone, and the director of development services has issued a waiver for the enterprise under division (B) of section 5709.633 of the Revised Code.

The agreement shall require the enterprise to agree to establish, expand, renovate, or occupy a facility in the zone and hire new employees, or preserve employment opportunities for existing employees, in return for one or more of the incentives described in division (B) of this section.

(E) All agreements entered into under this section shall be in the form prescribed under section 5709.631 of the Revised Code. After an agreement under this section is entered into, if the board of county commissioners revokes its designation of a zone, or if the director of development services revokes a zone's certification, any entitlements granted under the agreement shall continue for the number of years specified in the agreement.

(F) Except as otherwise provided in this division, an agreement entered into under this section shall require that the enterprise pay an annual fee equal to the greater of one per cent of the dollar value of incentives offered under the agreement or five hundred dollars; provided, however, that if the value of the incentives exceeds two hundred fifty thousand dollars, the fee shall not exceed two thousand five hundred dollars. The fee shall be payable to the board of county commissioners once per year for each year the agreement is effective on the days and in the form specified in the agreement. Fees paid shall be deposited in a special fund created for such purpose by the board and shall be used by the board exclusively for the purpose of complying with section 5709.68 of the Revised Code and by the tax incentive review council created under section 5709.85 of the Revised Code exclusively for the purposes of performing the duties prescribed under that section. The board may waive or reduce the amount of the fee charged against an enterprise, but such waiver or reduction does not affect the obligations of the board or the tax incentive review council to comply with section 5709.68 or 5709.85 of the Revised Code, respectively.

(G) With the approval of the legislative authority of a municipal corporation or the board of township trustees of a township in which a zone is designated under division (A) of this section, the board of county commissioners may delegate to that legislative authority or board any powers and duties of the board of county commissioners to negotiate and administer agreements with regard to that zone under this section.

(H) When an agreement is entered into pursuant to this section, the board of county commissioners authorizing the agreement or the legislative authority or board of township trustees that negotiates and administers the agreement shall forward a copy of the agreement to the director of development services and to the tax commissioner within fifteen days after the agreement is entered into. If any agreement includes terms not provided for in section 5709.631 of the Revised Code affecting the revenue of a city, local, exempted village, or joint vocational school district or causing revenue to be foregone by the district, including any compensation to be paid to the school district pursuant to section 5709.82 of the Revised Code, those terms also shall be forwarded in writing to the director of development services along with the copy of the agreement forwarded under this division.

(I) After an agreement is entered into, the enterprise shall file with each personal property tax return required to be filed, or annual report that is required to be filed under section 5727.08 of the Revised Code, while the agreement is in effect, an informational return, on a form prescribed by the tax commissioner for that purpose, setting forth separately the property, and related costs and values, exempted from taxation under the agreement.

(J) Enterprises may agree to give preference to residents of the zone within which the agreement applies relative to residents of this state who do not reside in the zone when hiring new employees under the agreement.

(K) An agreement entered into under this section may include a provision requiring the enterprise to create one or more temporary internship positions for students enrolled in a course of study at a school or other educational institution in the vicinity, and to create a scholarship or provide another form of educational financial assistance for students holding such a position in exchange for the student's commitment to work for the enterprise at the completion of the internship.

(L) The tax commissioner's authority in determining the accuracy of any exemption granted by an agreement entered into under this section is limited to divisions (B)(1)(b)(i) and (ii), (B)(2) and (3), (C), and (I) of this section, division (B)(1)(b)(iv) of this section as it pertains to divisions (C)(2)(a), (b), and (c) of section 5709.62 of the Revised Code, and divisions (B)(1) to (10) of section 5709.631 of the Revised Code and, as authorized by law, to enforcing any modification to, or revocation of, that agreement by the board of county commissioners or the director of development services or, if the board's powers and duties are delegated under division (G) of this section, by the legislative authority of a municipal corporation or board of township trustees.

Last updated August 4, 2021 at 11:09 AM

Section 5709.631 | Requirements for agreements.

• Effective: April 3, 2023
• Latest Legislation: Senate Bill 33 - 134th General Assembly

Each agreement entered into under sections 5709.62, 5709.63, and 5709.632 of the Revised Code on or after April 1, 1994, shall be in writing and shall include all of the information and statements prescribed by this section. Agreements may include terms not prescribed by this section, but such terms shall in no way derogate from the information and statements prescribed by this section.

(A) Each agreement shall include the following information:

(1) The names of all parties to the agreement;

(2) A description of the investments to be made by the applicant enterprise or by another party at the facility whether or not the investments are exempted from taxation, including existing or new building size and cost thereof; the value of machinery, equipment, furniture, and fixtures, including an itemization of the value of machinery, equipment, furniture, and fixtures used at another location in this state prior to the agreement and relocated or to be relocated from that location to the facility and the value of machinery, equipment, furniture, and fixtures at the facility prior to the execution of the agreement that will not be exempted from taxation; the value of inventory at the facility, including an itemization of the value of inventory held at another location in this state prior to the agreement and relocated or to be relocated from that location to the facility, and the value of inventory held at the facility prior to the execution of the agreement that will not be exempted from taxation;

(3) The scheduled starting and completion dates of investments made in building, machinery, equipment, furniture, fixtures, and inventory;

(4) Estimates of the number of employee positions to be created each year of the agreement and of the number of employee positions retained by the applicant enterprise due to the project, itemized as to the number of full-time, part-time, permanent, and temporary positions;

(5) Estimates of the dollar amount of payroll attributable to the positions set forth in division (A)(4) of this section, similarly itemized;

(6) The number of employee positions, if any, at the project site and at any other location in the state at the time the agreement is executed, itemized as to the number of full-time, part-time, permanent, and temporary positions.

(B) Each agreement shall set forth the following information and incorporate the following statements:

(1) A description of real property to be exempted from taxation under the agreement, the percentage of the assessed valuation of the real property exempted from taxation, and the period for which the exemption is granted, accompanied by the statement: "The exemption commences the first year for which the real property would first be taxable were that property not exempted from taxation. No exemption shall commence after .......... (insert date) nor extend beyond .......... (insert date)." The tax commissioner shall adopt rules prescribing the form the description of such property shall assume to ensure that the property to be exempted from taxation under the agreement is distinguishable from property that is not to be exempted under that agreement.

(2) A description of tangible personal property to be exempted from taxation under the agreement, the percentage of the assessed value of the tangible personal property exempted from taxation, and the period for which the exemption is granted, accompanied by the statement: "The minimum investment for tangible personal property to qualify for the exemption is $.......... (insert dollar amount) to purchase machinery and equipment first used in business at the facility as a result of the project, $.......... (insert dollar amount) for furniture and fixtures and other noninventory personal property first used in business at the facility as a result of the project, and $.......... (insert dollar amount) for new inventory. The maximum investment for tangible personal property to qualify for the exemption is $.......... (insert dollar amount) to purchase machinery and equipment first used in business at the facility as a result of the project, $.......... (insert dollar amount) for furniture and fixtures and other noninventory personal property first used in business at the facility as a result of the project, and $.......... (insert dollar amount) for new inventory. The exemption commences the first year for which the tangible personal property would first be taxable were that property not exempted from taxation. No exemption shall commence after tax return year .......... (insert year) nor extend beyond tax return year .......... (insert year). In no instance shall any tangible personal property be exempted from taxation for more than ten return years unless, under division (D)(2) of section 5709.62 or under division (C)(1)(b) of section 5709.63 of the Revised Code, the board of education approves exemption for a number of years in excess of ten, in which case the tangible personal property may be exempted from taxation for that number of years, not to exceed fifteen return years." No exemption shall be allowed for any type of tangible personal property if the total investment is less than the minimum dollar amount specified for that type of property. If, for a type of tangible personal property, there are no minimum or maximum investment dollar amounts specified in the statement or the dollar amounts are designated in the statement as not applicable, the exemption shall apply to the total cost of that type of tangible personal property first used in business at the facility as a result of the project. The tax commissioner shall adopt rules prescribing the form the description of such property shall assume to ensure that the property to be exempted from taxation under the agreement is distinguishable from property that is not to be exempted under that agreement.

(3) ".......... (insert name of enterprise) shall pay such real and tangible personal property taxes as are not exempted under this agreement and are charged against such property and shall file all tax reports and returns as required by law. If .......... (insert name of enterprise) fails to pay such taxes or file such returns and reports, all incentives granted under this agreement are rescinded beginning with the year for which such taxes are charged or such reports or returns are required to be filed and thereafter."

(4) ".......... (insert name of enterprise) hereby certifies that at the time this agreement is executed, .......... (insert name of enterprise) does not owe any delinquent real or tangible personal property taxes to any taxing authority of the State of Ohio, and does not owe delinquent taxes for which .......... (insert name of enterprise) is liable under Chapter 5727., 5733., 5735., 5739., 5741., 5743., 5747., or 5753. of the Revised Code, or, if such delinquent taxes are owed, .......... (insert name of enterprise) currently is paying the delinquent taxes pursuant to a delinquent tax contract enforceable by the State of Ohio or an agent or instrumentality thereof, has filed a petition in bankruptcy under 11 U.S.C.A. 101, et seq., or such a petition has been filed against .......... (insert name of enterprise). For the purposes of the certification, delinquent taxes are taxes that remain unpaid on the latest day prescribed for payment without penalty under the chapter of the Revised Code governing payment of those taxes."

(5) ".......... (insert name of municipal corporation or county) shall perform such acts as are reasonably necessary or appropriate to effect, claim, reserve, and maintain exemptions from taxation granted under this agreement including, without limitation, joining in the execution of all documentation and providing any necessary certificates required in connection with such exemptions."

(6) "If for any reason the enterprise zone designation expires, the Director of the Ohio Department of Development revokes certification of the zone, or .......... (insert name of municipal corporation or county) revokes the designation of the zone, entitlements granted under this agreement shall continue for the number of years specified under this agreement, unless .......... (insert name of enterprise) materially fails to fulfill its obligations under this agreement and .......... (insert name of municipal corporation or county) terminates or modifies the exemptions from taxation granted under this agreement."

(7) "If .......... (insert name of enterprise) materially fails to fulfill its obligations under this agreement, other than with respect to the number of employee positions estimated to be created or retained under this agreement, or if .......... (insert name of municipal corporation or county) determines that the certification as to delinquent taxes required by this agreement is fraudulent, .......... (insert name of municipal corporation or county) may terminate or modify the exemptions from taxation granted under this agreement."

(8) ".......... (insert name of enterprise) shall provide to the proper tax incentive review council any information reasonably required by the council to evaluate the enterprise's compliance with the agreement, including returns or annual reports filed pursuant to section 5711.02 or 5727.08 of the Ohio Revised Code if requested by the council."

(9) ".......... (insert name of enterprise) and .......... (insert name of municipal corporation or county) acknowledge that this agreement must be approved by formal action of the legislative authority of .......... (insert name of municipal corporation or county) as a condition for the agreement to take effect. This agreement takes effect upon such approval."

(10) "This agreement is not transferable or assignable without the express, written approval of .......... (insert name of municipal corporation or county)."

(11) "Exemptions from taxation granted under this agreement shall be revoked if it is determined that ............... (insert name of enterprise), any successor enterprise, or any related member (as those terms are defined in section 5709.61 of the Ohio Revised Code) has violated the prohibition against entering into this agreement under division (C) of section 3735.671 or section 5709.62, 5709.63, or 5709.632 of the Ohio Revised Code prior to the time prescribed by that division or either of those sections."

(12) "In any three-year period during which this agreement is in effect, if the actual number of employee positions created or retained by........ (insert name of enterprise) is not equal to or greater than seventy-five per cent of the number of employee positions estimated to be created or retained under this agreement during that three-year period,........ (insert name of enterprise) shall repay the amount of taxes on property that would have been payable had the property not been exempted from taxation under this agreement during that three-year period. In addition, the..... (insert name of municipal corporation or county) may terminate or modify the exemptions from taxation granted under this agreement."

(13) If the enterprise is the owner of real property constituting the site of a megaproject or is a megaproject supplier, both of the following:

(a) A requirement that the enterprise annually certify to the legislative authority whether the megaproject operator or megaproject supplier, as applicable, holds a certificate issued under division (D)(7) of section 122.17 of the Revised Code on the first day of the current tax year;

(b) A provision authorizing the legislative authority to terminate the exemption for current and subsequent tax years if the megaproject operator or megaproject supplier, as applicable, does not hold a certificate issued under division (D)(7) of section 122.17 of the Revised Code on the first day of the current tax year.

The statement described in division (B)(7) of this section may include the following statement, appended at the end of the statement: "and may require the repayment of the amount of taxes that would have been payable had the property not been exempted from taxation under this agreement." If the agreement includes a statement requiring repayment of exempted taxes, it also may authorize the legislative authority to secure repayment of such taxes by a lien on the exempted property in the amount required to be repaid. Such a lien on exempted real property shall attach, and may be perfected, collected, and enforced, in the same manner as a mortgage lien on real property, and shall otherwise have the same force and effect as a mortgage lien on real property. Notwithstanding section 5719.01 of the Revised Code, such a lien on exempted tangible personal property shall attach, and may be perfected, collected, and enforced, in the same manner as a security interest in goods under Chapter 1309. of the Revised Code, and shall otherwise have the same force and effect as such a security interest.

(C) If the director of development had to issue a waiver under section 5709.633 of the Revised Code as a condition for the agreement to be executed, the agreement shall include the following statement:

"Continuation of this agreement is subject to the validity of the circumstance upon which .......... (insert name of enterprise) applied for, and the Director of the Ohio Department of Development issued, the waiver pursuant to section 5709.633 of the Ohio Revised Code. If, after formal approval of this agreement by .......... (insert name of municipal corporation or county), the Director or ............. (insert name of municipal corporation or county) discovers that such a circumstance did not exist, ........... (insert name of enterprise) shall be deemed to have materially failed to comply with this agreement."

If the director issued a waiver on the basis of the circumstance described in division (B)(3) of section 5709.633 of the Ohio Revised Code, the conditions enumerated in divisions (B)(3)(a)(i) and (ii) or divisions (B)(3)(b)(i) and (ii) of that section shall be incorporated in the information described in divisions (A)(2), (3), and (4) of this section.

Last updated February 8, 2023 at 3:29 PM

Section 5709.632 | Designation of enterprise zones by central city of metropolitan statistical area.

• Effective: September 30, 2021
• Latest Legislation: House Bill 110 - 134th General Assembly

(A)(1) The legislative authority of a municipal corporation defined by the United States office of management and budget as a principal city of a metropolitan statistical area may, in the manner set forth in section 5709.62 of the Revised Code, designate one or more areas in the municipal corporation as a proposed enterprise zone.

(2) With the consent of the legislative authority of each affected municipal corporation or of a board of township trustees, a board of county commissioners may, in the manner set forth in section 5709.62 of the Revised Code, designate one or more areas in one or more municipal corporations or in unincorporated areas of the county as proposed urban jobs and enterprise zones, except that a board of county commissioners may designate no more than one area within a township, or within adjacent townships, as a proposed urban jobs and enterprise zone.

(3) The legislative authority or board of county commissioners may petition the director of development services for certification of the area as having the characteristics set forth in division (A)(3) of section 5709.61 of the Revised Code. Within sixty days after receiving such a petition, the director shall determine whether the area has the characteristics set forth in that division and forward the findings to the legislative authority or board of county commissioners. If the director certifies the area as having those characteristics and thereby certifies it as a zone, the legislative authority or board may enter into agreements with enterprises under division (B) of this section. Any enterprise wishing to enter into an agreement with a legislative authority or board of county commissioners under this section and satisfying one of the criteria described in divisions (B)(1) to (5) of this section shall submit a proposal to the legislative authority or board on the form prescribed under division (B) of section 5709.62 of the Revised Code and shall review and update the estimates and listings required by the form in the manner required under that division. The legislative authority or board may, on a separate form and at any time, require any additional information necessary to determine whether an enterprise is in compliance with an agreement and to collect the information required to be reported under section 5709.68 of the Revised Code.

(B) Prior to entering into an agreement with an enterprise, the legislative authority or board of county commissioners shall determine whether the enterprise submitting the proposal is qualified by financial responsibility and business experience to create and preserve employment opportunities in the zone and to improve the economic climate of the municipal corporation or municipal corporations or the unincorporated areas in which the zone is located and to which the proposal applies, and whether the enterprise satisfies one of the following criteria:

(1) The enterprise currently has no operations in this state and, subject to approval of the agreement, intends to establish operations in the zone;

(2) The enterprise currently has operations in this state and, subject to approval of the agreement, intends to establish operations at a new location in the zone that would not result in a reduction in the number of employee positions at any of the enterprise's other locations in this state;

(3) The enterprise, subject to approval of the agreement, intends to relocate operations, currently located in another state, to the zone;

(4) The enterprise, subject to approval of the agreement, intends to expand operations at an existing site in the zone that the enterprise currently operates;

(5) The enterprise, subject to approval of the agreement, intends to relocate operations, currently located in this state, to the zone, and the director of development services has issued a waiver for the enterprise under division (B) of section 5709.633 of the Revised Code.

(C) If the legislative authority or board determines that the enterprise is so qualified and satisfies one of the criteria described in divisions (B)(1) to (5) of this section, the legislative authority or board may, after complying with section 5709.83 of the Revised Code and, in the case of a board of commissioners, with the consent of the legislative authority of each affected municipal corporation or of the board of township trustees, enter into an agreement with the enterprise under which the enterprise agrees to establish, expand, renovate, or occupy a facility in the zone and hire new employees, or preserve employment opportunities for existing employees, in return for the following incentives:

(1) When the facility is located in a municipal corporation, a legislative authority or board of commissioners may enter into an agreement for one or more of the incentives provided in divisions (C)(1), (2), and (3) of section 5709.62 of the Revised Code, subject to division (D) of that section, or for the incentive provided in division (C)(4) of that section if the enterprise is the owner of real property constituting the site of a megaproject or is a megaproject supplier ;

(2) When the facility is located in an unincorporated area, a board of commissioners may enter into an agreement for one or more of the incentives provided in divisions (B)(1)(b) and (B)(2) of section 5709.63 of the Revised Code, subject to division (C) of that section, or for the incentive provided in division (B)(3) of that section if the enterprise is the owner of real property constituting the site of a megaproject or is a megaproject supplier.

(D) All agreements entered into under this section shall be in the form prescribed under section 5709.631 of the Revised Code. After an agreement under this section is entered into, if the legislative authority or board of county commissioners revokes its designation of the zone, or if the director of development services revokes the zone's certification, any entitlements granted under the agreement shall continue for the number of years specified in the agreement.

(E) Except as otherwise provided in this division, an agreement entered into under this section shall require that the enterprise pay an annual fee equal to the greater of one per cent of the dollar value of incentives offered under the agreement or five hundred dollars; provided, however, that if the value of the incentives exceeds two hundred fifty thousand dollars, the fee shall not exceed two thousand five hundred dollars. The fee shall be payable to the legislative authority or board of commissioners once per year for each year the agreement is effective on the days and in the form specified in the agreement. Fees paid shall be deposited in a special fund created for such purpose by the legislative authority or board and shall be used by the legislative authority or board exclusively for the purpose of complying with section 5709.68 of the Revised Code and by the tax incentive review council created under section 5709.85 of the Revised Code exclusively for the purposes of performing the duties prescribed under that section. The legislative authority or board may waive or reduce the amount of the fee charged against an enterprise, but such waiver or reduction does not affect the obligations of the legislative authority or board or the tax incentive review council to comply with section 5709.68 or 5709.85 of the Revised Code, respectively.

(F) With the approval of the legislative authority of a municipal corporation or the board of township trustees of a township in which a zone is designated under division (A)(2) of this section, the board of county commissioners may delegate to that legislative authority or board any powers and duties of the board to negotiate and administer agreements with regard to that zone under this section.

(G) When an agreement is entered into pursuant to this section, the legislative authority or board of commissioners authorizing the agreement shall forward a copy of the agreement to the director of development services and to the tax commissioner within fifteen days after the agreement is entered into. If any agreement includes terms not provided for in section 5709.631 of the Revised Code affecting the revenue of a city, local, exempted village, or joint vocational school district or causing revenue to be forgone by the district, including any compensation to be paid to the school district pursuant to section 5709.82 of the Revised Code, those terms also shall be forwarded in writing to the director of development services along with the copy of the agreement forwarded under this division.

(H) After an agreement is entered into, the enterprise shall file with each personal property tax return required to be filed while the agreement is in effect, an informational return, on a form prescribed by the tax commissioner for that purpose, setting forth separately the property, and related costs and values, exempted from taxation under the agreement.

(I) An agreement entered into under this section may include a provision requiring the enterprise to create one or more temporary internship positions for students enrolled in a course of study at a school or other educational institution in the vicinity, and to create a scholarship or provide another form of educational financial assistance for students holding such a position in exchange for the student's commitment to work for the enterprise at the completion of the internship.

Last updated March 22, 2022 at 4:12 PM

Section 5709.633 | Enterprise relocating from another Ohio location.

• Effective: March 11, 2004
• Latest Legislation: House Bill 127 - 125th General Assembly

(A)(1) Except as otherwise provided in division (B) of this section, no legislative authority or board of county commissioners shall enter into an agreement with an enterprise under division (E) of section 5709.62, division (D) of section 5709.63, or section 5709.632 of the Revised Code if that enterprise or a successor enterprise currently has operations at another location in this state and those operations will be relocated to an enterprise zone upon or as a result of that agreement.

(2) Except as otherwise provided in division (B) of this section, if an enterprise subject to an agreement granting an exemption from taxation under section 5709.62, 5709.63, or 5709.632 of the Revised Code expands its operations or relocates its operations to another location in this state that results in a reduction of its operations at any Ohio location, or discontinues operations at the project site to which that exemption applies prior to the expiration of the term of the agreement, no legislative authority shall enter into an agreement with such an enterprise, a related member, or a successor enterprise under section 5709.62, 5709.63, or 5709.632 of the Revised Code prior to five years after such expansion, relocation, or discontinuation of operations. The director of development shall review all agreements entered into under those sections to determine whether there has been a violation of this paragraph and whether the requirements to be a facility have been met. If the director discovers there has been a violation of this paragraph or the requirements to be a facility have not been met, the agreement is void, and all incentives granted under the agreement shall cease immediately. The director shall certify to the legislative authority and to the board of education of the city, local, or exempted village school district to which operations were relocated that the agreement is void.

(B) Divisions (A)(1) and (2) of this section do not apply if the director of development waives application of those divisions. The director may waive application of division (A)(1) of this section if the enterprise or successor enterprise demonstrates, by documentation satisfactory to the director, that the relocation was necessitated by or results from one of the circumstances described in divisions (B)(1) to (3) of this section, and the director determines that under the circumstance claimed and in light of the possible relocation issuance of a waiver is absolutely necessary to attract or retain employment opportunities in this state. The director may waive application of division (A)(2) of this section, except for the provision that the requirements to be a facility must be met, if the enterprise, related member, or successor enterprise demonstrates, by documentation satisfactory to the director, that the discontinuation of operations was necessitated by or resulted from one of the circumstances described in divisions (B)(1) to (3) of this section, and the director determines that under the circumstance claimed and in light of the possible relocation issuance of a waiver is absolutely necessary to attract or retain employment opportunities in this state.

The circumstance that may be claimed shall be one of the following:

(1) The project site at which operations are or will be discontinued cannot accommodate expansion plans of the enterprise due to inadequate land suitable for such expansion.

(2) Conditions in the markets in which the enterprise participates require that the enterprise relocate operations in order for the enterprise to become or remain competitive in that market. These conditions include, but are not limited to, any of the following:

(a) New or modified contracts with customers or suppliers, such as "just-in-time" supply or similar arrangements;

(b) Changes in the enterprise's production methods;

(c) Loss or impending loss of an existing contract requires expansion into another market in order to maintain production levels;

(d) Changes in ownership or other changes in control of the enterprise, or of a controlled group of corporations of which the enterprise is a subsidiary, that result from a decision on the part of owners or officers located outside this state.

(3) The enterprise currently is subject to a consolidation of its operations, or such a consolidation is imminent. For purposes of division (B)(3) of this section, "consolidation" means an enterprise combines the operations of two or more existing facilities and one of the following conditions is satisfied:

(a) At least one of the facilities currently is not located in this state, and the relocation of the operations of that facility would result in both of the following during the term of the agreement:

(i) The number of employees employed by the enterprise at its existing facilities in this state to which operations are relocated increases by not less than twenty-five per cent after the date the agreement is formally approved by the legislative authority;

(ii) The assessed value of tangible personal property first used in business at the project site, or the assessed value of real property constituting the project site, increases by not less than twenty-five per cent after the date the agreement is formally approved by the legislative authority.

(b) All of the facilities currently are in this state, and the relocation of the operations of any of those facilities would result in both of the following during the term of the agreement:

(i) The number of employees employed by the enterprise at its existing facilities in this state to which operations are relocated increases by not less than twenty-five per cent after the date the agreement is formally approved by the legislative authority;

(ii) The assessed value of tangible personal property first used in business at the project site, or the assessed value of real property constituting the project site, increases by not less than fifty per cent over the assessed value, determined at the time of relocation, of tangible personal property located at, and of real property constituting, the facilities in this state from which operations would be relocated.

For purposes of divisions (B)(3)(a) and (b) of this section, "assessed value of tangible personal property" and "assessed value of real property" mean the value of such property as assessed for purposes of property taxation and entered on the tax lists and duplicates of the county.

(C) To apply for a waiver under division (B) of this section, the enterprise and the legislative authority intending to enter into an agreement under section 5709.62, 5709.63, or 5709.632 of the Revised Code shall petition the director of development in a form acceptable to the director. The petition shall be accompanied by documentation demonstrating one or more of the circumstances described in divisions (B)(1), (2), or (3) of this section. Not later than thirty days after receiving such a petition, the director shall investigate the petition and accompanying documentation to determine the validity of the circumstance claimed therein, and shall issue to the enterprise and to the legislative authority the determination, in writing, waiving, or refusing to waive application of division (A) of this section.

Section 5709.634 | Waiver of retail facilities exclusion.

• Effective: March 23, 2018
• Latest Legislation: House Bill 69 - 132nd General Assembly

A municipal corporation or county, or a township to which authority has been delegated under division (G) of section 5709.63 of the Revised Code, may enter an agreement under section 5709.62, 5709.63, or 5709.632 of the Revised Code with an enterprise respecting a place of business used primarily for making retail sales if the board of education of each city, local, or exempted village school district within the territory of which that place of business is located adopts a resolution, approved by the majority of the board members, waiving the retail facilities exclusion under division (C) of section 5709.61 of the Revised Code with respect to that place of business. Unless otherwise provided in its resolution, a board of education does not waive its right to approve or reject agreements or to receive notice under section 5709.62, 5709.63, or 5709.632 of the Revised Code by waiving the retail facilities exclusion under this section.

Section 5709.64 | Applying for tax incentive qualification certificate.

• Effective: December 31, 2017
• Latest Legislation: House Bill 49 - 132nd General Assembly

(A) If an enterprise has been granted an incentive for the current calendar year under an agreement entered pursuant to section 5709.62, 5709.63, or 5709.632 of the Revised Code, it may apply, on or before the thirtieth day of April of that year, to the director of development, on a form prescribed by the director, for a tax incentive qualification certificate. The enterprise qualifies for an initial certificate if, on or before the last day of the calendar year immediately preceding that in which application is made, it satisfies all of the following requirements:

(1) The enterprise has established, expanded, renovated, or occupied a facility pursuant to the agreement under section 5709.62, 5709.63, or 5709.632 of the Revised Code.

(2) The enterprise has hired new employees to fill nonretail positions at the facility, at least twenty-five per cent of whom at the time they were employed were at least one of the following:

(a) Unemployed persons who had resided at least six months in the county in which the enterprise's project site is located;

(b) JPTA eligible employees who had resided at least six months in the county in which the enterprise's project site is located;

(c) Participants of the Ohio works first program under Chapter 5107. of the Revised Code or the prevention, retention, and contingency program under Chapter 5108. of the Revised Code or recipients of general assistance under former Chapter 5113. of the Revised Code, financial assistance under former Chapter 5115. of the Revised Code, or unemployment compensation benefits who had resided at least six months in the county in which the enterprise's project site is located;

(d) Eligible individuals with disabilities, as defined under division (A) of section 3304.11 of the Revised Code, who had resided at least six months in the county in which the enterprise's project site is located;

(e) Residents for at least one year of a zone located in the county in which the enterprise's project site is located.

The director of development shall, by rule, establish criteria for determining what constitutes a nonretail position at a facility.

(3) The average number of positions attributable to the enterprise in the municipal corporation during the calendar year immediately preceding the calendar year in which application is made exceeds the maximum number of positions attributable to the enterprise in the municipal corporation during the calendar year immediately preceding the first year the enterprise satisfies the requirements set forth in divisions (A)(1) and (2) of this section. If the enterprise is engaged in a business which, because of its seasonal nature, customarily enables the enterprise to operate at full capacity only during regularly recurring periods of the year, the average number of positions attributable to the enterprise in the municipal corporation during each period of the calendar year immediately preceding the calendar year in which application is made must exceed only the maximum number of positions attributable to the enterprise in each corresponding period of the calendar year immediately preceding the first year the enterprise satisfies the requirements of divisions (A)(1) and (2) of this section. The director of development shall, by rule, prescribe methods for determining whether an enterprise is engaged in a seasonal business and for determining the length of the corresponding periods to be compared.

(4) The enterprise has not closed or reduced employment at any place of business in the state for the primary purpose of establishing, expanding, renovating, or occupying a facility. The legislative authority of any municipal corporation or the board of county commissioners of any county that concludes that an enterprise has closed or reduced employment at a place of business in that municipal corporation or county for the primary purpose of establishing, expanding, renovating, or occupying a facility in a zone may appeal to the director to determine whether the enterprise has done so. Upon receiving such an appeal, the director shall investigate the allegations and make such a determination before issuing an initial or renewal tax incentive qualification certificate under this section.

Within sixty days after receiving an application under this division, the director shall review, investigate, and verify the application and determine whether the enterprise qualifies for a certificate. The application shall include an affidavit executed by the applicant verifying that the enterprise satisfies the requirements of division (A)(2) of this section, and shall contain such information and documents as the director requires, by rule, to ascertain whether the enterprise qualifies for a certificate. If the director finds the enterprise qualified, the director shall issue a tax incentive qualification certificate, which shall bear as its date of issuance the thirtieth day of June of the year of application, and shall state that the applicant is entitled to receive, for the taxable year that includes the certificate's date of issuance, the tax incentives provided under section 5709.65 of the Revised Code with regard to the facility to which the certificate applies. If an enterprise is issued an initial certificate, it may apply, on or before the thirtieth day of April of each succeeding calendar year for which it has been granted an incentive under an agreement entered pursuant to section 5709.62, 5709.63, or 5709.632 of the Revised Code, for a renewal certificate. Subsequent to its initial certification, the enterprise qualifies for up to three successive renewal certificates if, on or before the last day of the calendar year immediately preceding that in which the application is made, it satisfies all the requirements of divisions (A)(1) to (4) of this section, and neither the zone's designation nor the zone's certification has been revoked prior to the fifteenth day of June of the year in which the application is made. The application shall include an affidavit executed by the applicant verifying that the enterprise satisfies the requirements of division (A)(2) of this section. An enterprise with ten or more supervisory personnel at the facility to which a certificate applies qualifies for any subsequent renewal certificates only if it meets all of the foregoing requirements and, in addition, at least ten per cent of those supervisory personnel are employees who, when first hired by the enterprise, satisfied at least one of the criteria specified in divisions (A)(2)(a) to (e) of this section. If the enterprise qualifies, a renewal certificate shall be issued bearing as its date of issuance the thirtieth day of June of the year of application. The director shall send copies of the initial certificate, and each renewal certificate, by certified mail, to the enterprise, the tax commissioner, the board of county commissioners, and the chief executive of the municipal corporation in which the facility to which the certificate applies is located.

(B) If the director determines that an enterprise is not qualified for an initial or renewal tax incentive qualification certificate, the director shall send notice of this determination, specifying the reasons for it, by certified mail, to the applicant, the tax commissioner, the board of county commissioners, and the chief executive of the municipal corporation in which the facility to which the certificate would have applied is located. Within thirty days after receiving such a notice, an enterprise may request, in writing, a hearing before the director for the purpose of reviewing the application and the reasons for the determination. Within sixty days after receiving a request for a hearing, the director shall afford one and, within thirty days after the hearing, shall issue a redetermination of the enterprise's qualification for a certificate. If the enterprise is found to be qualified, the director shall proceed in the manner provided under division (A) of this section. If the enterprise is found to be unqualified, the director shall send notice of this finding, by certified mail, to the applicant, the tax commissioner, the board of county commissioners, and the chief executive of the municipal corporation in which the facility to which the certificate would have applied is located. The director's redetermination that an enterprise is unqualified may be appealed to the board of tax appeals in the manner provided under section 5717.02 of the Revised Code.

Section 5709.65 | Entitlement to tax incentives.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) An enterprise issued a certificate under section 5709.64 of the Revised Code shall be entitled to the following tax incentives:

(1) With the exception of improvements to land or tangible personal property constituting or used in the retail portion, if any, of a facility, any improvement to land or tangible personal property at a facility for which a certificate is issued, first used in business at the facility as the result of a project, shall not be considered an asset of a corporate enterprise in determining the value of its issued and outstanding stock under division (A) of section 5733.05 of the Revised Code at the end of the taxable year that includes the certificate's date of issuance.

(2) With the exception of the original cost of improvements to land or tangible personal property constituting or used in the retail portion, if any, of a facility, the original cost of any improvement to land or tangible personal property at the facility for which the certificate is issued, first used in business at the facility as a result of a project, shall be excluded from the numerator upon computation of the property factor of a corporate enterprise under division (B)(2)(a) of section 5733.05 of the Revised Code, or of a noncorporate enterprise under division (A) of section 5747.21 of the Revised Code, for the taxable year that includes the certificate's date of issuance.

As used in divisions (A)(1) and (2) of this section, the "retail portion" of a facility is that part of a facility used primarily for making retail sales as defined in division (O) of section 5739.01 of the Revised Code.

(3) Compensation paid to new employees described under divisions (A)(2)(a) to (e) of section 5709.64 of the Revised Code at the facility for which the certificate is issued, who are hired as a result of a project, shall be excluded from the numerator upon computation of the payroll factor of a corporate enterprise under division (B)(2)(b) of section 5733.05 of the Revised Code, or of a noncorporate enterprise under division (B) of section 5747.21 of the Revised Code, for the taxable year that includes the certificate's date of issuance.

(4) An enterprise that reimburses its new employees described under divisions (A)(2)(a) to (e) of section 5709.64 of the Revised Code for all or part of the cost of child care services necessary to enable them to be employed at a facility for which a certificate is issued shall be entitled to a credit equal to the amounts so reimbursed, up to a maximum of three hundred dollars for each child or dependent receiving the services, for the taxable year in which reimbursement is made, against the tax imposed by section 5733.06 of the Revised Code on a corporate enterprise, or against the aggregate amount of tax imposed on the owners of a noncorporate enterprise under section 5747.02 of the Revised Code, for the taxable year that includes the certificate's date of issuance. Only reimbursements of amounts paid by new employees to child care centers licensed by the department of job and family services for child care services provided during the first twenty-four months of employment as a new employee may be applied toward the credit provided under this division. Any enterprise claiming this credit shall maintain records verifying that the credit is claimed only for reimbursement of amounts expended by new employees for such services.

(5) For each new employee described in divisions (A)(2)(a) to (e) of section 5709.64 of the Revised Code who completes a training program and is subsequently employed by an enterprise for at least ninety days, if the enterprise pays or reimburses all or part of the cost of the employee's participation in the training program, it may claim a credit equal to the amount paid or reimbursed or one thousand dollars, whichever is less, in the taxable year in which the employee completes the ninety days of subsequent employment, against the tax imposed on a corporate enterprise by section 5733.06 of the Revised Code, or against the aggregate amount of tax imposed on the owners of a noncorporate enterprise under section 5747.02 of the Revised Code. Only one credit shall be allowed with respect to any individual. Attendance at a qualified training program under this section does not bar an otherwise eligible individual from receipt of benefits under Chapter 4141. of the Revised Code.

(B) None of the items set forth in divisions (A)(2) and (3) of this section shall be considered in making any allocation or apportionment under division (B)(2)(d) of section 5733.05 or division (D) of section 5747.21 of the Revised Code.

(C) All credits provided under this section to a noncorporate enterprise shall be divided pro rata among the owners of the enterprise subject to the tax imposed by section 5747.02 of the Revised Code, based upon their proportionate ownership interests in the enterprise. The enterprise shall file with the tax commissioner, on a form prescribed by the commissioner, a statement showing the total available credit and the portion thereof attributed to each owner. The statement shall identify each owner by name and social security number and shall be filed with the tax commissioner by the date prescribed by the commissioner, which shall be no earlier than the fifteenth day of the month following the close of the enterprise's taxable year for which the credit is claimed.

(D) All state income tax or corporation franchise tax credits provided under this section shall be claimed in the order required under section 5733.98 or 5747.98 of the Revised Code. The credits, to the extent they exceed the taxpayer's aggregate tax liability for the taxable year after allowance for any other credits that precede the credits under this section in that order, shall be carried forward to the next succeeding taxable year or years until fully utilized.

Last updated August 2, 2023 at 4:10 PM

Section 5709.66 | Applying for employee tax credit certificate.

• Effective: November 15, 2015
• Latest Legislation: Senate Bill 208 - 131st General Assembly

(A) If an enterprise has been granted an incentive for the current calendar year under an agreement entered into pursuant to section 5709.62 or 5709.63 of the Revised Code and satisfies both of the requirements described in divisions (A)(1) and (2) of this section at the time of application, it may apply to the director of development, on a form prescribed by the director, for the employee tax credit certificate under division (B) of this section.

(1) The enterprise has established, expanded, renovated, or occupied a facility pursuant to an agreement under section 5709.62 or 5709.63 of the Revised Code in a zone that is certified by the director of development as having one of the characteristics described in divisions (A)(1)(a) or (b) and at least one of the characteristics described in divisions (A)(1)(c) to (h) of section 5709.61 of the Revised Code.

(2) The enterprise or any predecessor enterprise has not closed or reduced employment at any place of business in this state within the twelve months preceding application unless the enterprise, since the date the agreement was formally approved by the legislative authority, has hired new employees equal in number to not less than fifty per cent of the total number of employees employed by the enterprise at other locations in this state on that date. The legislative authority of any municipal corporation or county that concludes that an enterprise or any predecessor enterprise has closed or reduced employment at a place of business in that municipal corporation or county may appeal to the director to determine whether the enterprise or any predecessor enterprise has done so. Upon receiving such an appeal, the director shall investigate the allegations and determine whether the enterprise satisfies the requirement of division (A)(2) of this section before proceeding under division (B) of this section.

Within sixty days after receiving an application under this section, the director shall review, investigate, and verify the application and determine whether the enterprise is eligible for the employee tax credit certificate under division (B) of this section. The application shall contain such information and documents as the director requires, by rule, to ascertain whether the enterprise is eligible for the certificate. On finding that the enterprise is eligible, the director shall proceed under division (B) of this section.

On determining that an enterprise is not eligible for the certificate under division (B) of this section, the director shall send notice of this determination, specifying the reasons for it, by certified mail, to the applicant, the board of county commissioners, and the chief executive of the municipal corporation in which the facility to which the certificate would have been given is located. Within thirty days after receiving such a notice, an enterprise may request, in writing, a hearing before the director for the purpose of reviewing the application and the reasons for the determination. Within sixty days after receiving a request for a hearing, the director shall afford one and, within thirty days after the hearing, shall issue a redetermination of the enterprise's eligibility for the incentives. If the enterprise is found to be eligible, the director shall proceed under division (B) of this section. If the enterprise is found to be ineligible, the director shall send notice of this finding, by certified mail, to the applicant, the board of commissioners of the county or the chief executive of the municipal corporation in which the facility to which the certificate would have been given is located. The director's redetermination that an enterprise is ineligible may be appealed to the board of tax appeals under section 5717.02 of the Revised Code.

(B)(1) If the director determines an enterprise to be eligible under division (A) of this section, the director shall determine if the enterprise is entitled to an employee tax credit certificate. An enterprise is entitled to an employee tax credit certificate for each eligible employee the enterprise hires. A taxpayer who is issued an employee tax credit certificate under this section may claim a nonrefundable credit of one thousand dollars against the taxpayer's aggregate tax liability under either section 5733.06 or 5747.02 of the Revised Code for each taxable year of the agreement entered into under section 5709.62 or 5709.63 of the Revised Code in which an eligible employee is employed for the taxpayer's full taxable year. If the eligible employee is employed for less than the taxpayer's full taxable year, the taxpayer may claim a reduced credit against the aggregate amount of tax due under either section 5733.06 or 5747.02 of the Revised Code. The reduced credit shall be computed by dividing the total number of days in the taxable year into one thousand dollars and multiplying the quotient by the number of days the eligible employee was employed in the taxable year. For purposes of the computation, the eligible employee shall be deemed to have been employed for each day of the taxable year commencing on the date of employment or ending on the date of termination of employment.

The credit provided under this division to a noncorporate enterprise or an enterprise that is an S corporation as defined in section 1361 of the Internal Revenue Code shall be divided pro rata among the owners or shareholders of the enterprise subject to the tax imposed by section 5747.02 of the Revised Code, based on their proportionate ownership interests in the enterprise. The enterprise shall file with the tax commissioner, on a form prescribed by the tax commissioner, a statement showing the total available credit and the portion of that credit attributed to each owner or shareholder. The statement shall identify each owner or shareholder by name and social security number and shall be filed with the tax commissioner by the date prescribed by the tax commissioner, which shall be no earlier than the fifteenth day of the month following the close of the enterprise's taxable year for which the credit is claimed.

The taxpayer shall claim the credit in the order required under section 5733.98 or 5747.98 of the Revised Code. If the credit provided under this division exceeds the taxpayer's tax liability for the taxable year after allowance for any other credits that precede the credit under this section in that order, the credit may be carried forward for the next three succeeding taxable years, but the amount of any excess credit allowed in any such year shall be deducted from the balance carried forward to the succeeding taxable year.

(2) As used in this division:

(a) "Eligible employee" means a new employee at a facility who, at the time the employee was hired to work at the facility, was a participant of the Ohio works first program under Chapter 5107. of the Revised Code or the prevention, retention, and contingency program under Chapter 5108. of the Revised Code or a recipient of general assistance under former Chapter 5113. of the Revised Code and resided for at least one year in the county in which the facility is located. "Eligible employee" does not include any employee of the enterprise who is a new employee, as defined under section 122.17 of the Revised Code, on the basis of whom the enterprise has claimed a credit under that section.

(b) "Taxable year" has the same meaning as in section 5733.04 or 5747.01 of the Revised Code, as applicable to the enterprise claiming the credit.

The Legislative Service Commission presents the text of this section as a composite of the section as amended by multiple acts of the General Assembly. This presentation recognizes the principle stated in R.C. 1.52(B) that amendments are to be harmonized if reasonably capable of simultaneous operation.

Section 5709.67 | Duties of director of development and tax commissioner.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(A) Except as otherwise provided in sections 5709.61 to 5709.69 of the Revised Code, the director of development shall administer those sections and shall adopt rules necessary to implement and administer the enterprise zone program. The director shall assign to each zone currently certified a unique designation by which the zone shall be identified for purposes of administering sections 5709.61 to 5709.69 of the Revised Code. The tax commissioner shall administer all other tax incentives provided under sections 5709.61 to 5709.69 of the Revised Code and shall adopt rules necessary to carry out that duty. No tax incentive qualification certificate or employee tax credit certificate shall be issued or remain in effect unless the enterprise applying for or holding the certificate complies with all such rules. The director of job and family services shall administer the incentive provided under division (B)(1) of section 5709.66 of the Revised Code and shall adopt rules necessary to carry out that duty. No extension of benefits certificate shall be issued or remain in effect unless the enterprise applying for or holding the certificate complies with all such rules.

(B) Not later than the first day of August each year, the director of development shall report to the general assembly on all of the following for the preceding calendar year:

(1) The cost to the state of the tax and other incentives provided under sections 5709.61 to 5709.69 of the Revised Code;

(2) The number of tax incentive qualification certificates, employee tax credit certificates, and extension of benefits certificates issued;

(3) The names of the municipal corporations and counties that have entered agreements under sections 5709.62, 5709.63, and 5709.632 of the Revised Code;

(4) The number of new employees hired as a result of the tax and other incentives provided under sections 5709.61 to 5709.69 of the Revised Code;

(5) Information on agreement terms concerning school district revenue that are not provided for in section 5709.631 of the Revised Code and that are forwarded to the director under division (H) of section 5709.62, division (H) of section 5709.63, or division (G) of section 5709.632 of the Revised Code.

The report shall include a finding by the director as to whether the incentives provided under sections 5709.61 to 5709.69 of the Revised Code have resulted in the creation of more positions in the state than would have been created without the incentives. The director shall send a copy of the report to each member of the general assembly and to the director of the legislative service commission.

Section 5709.671 | Policy of retaining existing or creating new employment opportunities.

• Effective: July 22, 1994
• Latest Legislation: Senate Bill 19 - 120th General Assembly

By enactment of this act, the General Assembly expresses its policy of encouraging political subdivisions of this state to exercise the authority granted under Chapters 725. and 1728. and under sections 3735.67 to 3735.70, 5709.40 to 5709.43, 5709.61 to 5709.69, 5709.73 to 5709.75, and 5709.77 to 5709.81 of the Revised Code for the purposes stated therein, and for the purposes of retaining existing or creating new employment opportunities within the political subdivision to the extent the exercise of such authority is necessary to result in a net increase in employment in this state above that which would prevail in the absence of the use of such authority. Such authority is not intended by the General Assembly to be exercised if not necessary to achieve such a result, nor is it intended to be exercised for the purpose of transferring employment from one political subdivision in this state to another if such exercise does not result in a net increase in or retention of employment in this state.

The Director of Development may adopt such rules as the Director determines will best effect the policy stated under this section. Such rules shall be adopted in accordance with Chapter 119. of the Revised Code, and shall apply only to agreements or actions executed on or after the effective date of such rules.

Section 5709.68 | Report on all agreements in effect.

• Effective: September 29, 2017
• Latest Legislation: House Bill 49 - 132nd General Assembly

(A) On or before the thirty-first day of March each year, a municipal corporation or county that has entered into an agreement with an enterprise under section 5709.62, 5709.63, or 5709.632 of the Revised Code shall submit to the director of development services and the board of education of each school district of which a municipal corporation or township to which such an agreement applies is a part a report on all of those agreements in effect during the preceding calendar year. The report shall include all of the following information:

(1) The designation, assigned by the director of development services, of each urban jobs and enterprise zone within the municipal corporation or county, the date each zone was certified, the name of each municipal corporation or township within each zone, and the total population of each zone according to the most recent data available;

(2) The number of enterprises that are subject to those agreements and the number of full-time employees subject to those agreements within each zone, each according to the most recent data available and identified and categorized by the appropriate standard industrial code, and the rate of unemployment in the municipal corporation or county in which the zone is located for each year since each zone was certified;

(3) The number of agreements approved and executed during the calendar year for which the report is submitted, the total number of agreements in effect on the thirty-first day of December of the preceding calendar year, the number of agreements that expired during the calendar year for which the report is submitted, and the number of agreements scheduled to expire during the calendar year in which the report is submitted. For each agreement that expired during the calendar year for which the report is submitted, the municipal corporation or county shall include the amount of taxes exempted and the estimated dollar value of any other incentives provided under the agreement.

(4) The number of agreements receiving compliance reviews by the tax incentive review council in the municipal corporation or county during the calendar year for which the report is submitted, including all of the following information:

(a) The number of agreements the terms of which an enterprise has complied with, indicating separately for each agreement the value of the real and personal property exempted pursuant to the agreement and a comparison of the stipulated and actual schedules for hiring new employees, for retaining existing employees, for the amount of payroll of the enterprise attributable to these employees, and for investing in establishing, expanding, renovating, or occupying a facility;

(b) The number of agreements the terms of which an enterprise has failed to comply with, indicating separately for each agreement the value of the real and personal property exempted pursuant to the agreement and a comparison of the stipulated and actual schedules for hiring new employees, for retaining existing employees, for the amount of payroll of the enterprise attributable to these employees, and for investing in establishing, expanding, renovating, or occupying a facility;

(c) The number of agreements about which the tax incentive review council made recommendations to the legislative authority of the municipal corporation or county, and the number of those recommendations that have not been followed;

(d) The number of agreements rescinded during the calendar year for which the report is submitted.

(5) The number of enterprises that are subject to agreements that expanded within each zone, including the number of new employees hired and existing employees retained by each enterprise, and the number of new enterprises that are subject to agreements and that established within each zone, including the number of new employees hired by each enterprise;

(6)(a) The number of enterprises that are subject to agreements and that closed or reduced employment at any place of business within the state for the primary purpose of establishing, expanding, renovating, or occupying a facility, indicating separately for each enterprise the political subdivision in which the enterprise closed or reduced employment at a place of business and the number of full-time employees transferred and retained by each such place of business;

(b) The number of enterprises that are subject to agreements and that closed or reduced employment at any place of business outside the state for the primary purpose of establishing, expanding, renovating, or occupying a facility.

(7) For each agreement in effect during any part of the preceding year, the number of employees employed by the enterprise at the project site immediately prior to formal approval of the agreement, the number of employees employed by the enterprise at the project site on the thirty-first day of December of the preceding year, the payroll of the enterprise for the preceding year, the amount of taxes paid on tangible personal property situated at the project site and the amount of those taxes that were not paid because of the exemption granted under the agreement, and the amount of taxes paid on real property constituting the project site and the amount of those taxes that were not paid because of the exemption granted under the agreement. If an agreement was entered into under section 5709.632 of the Revised Code with an enterprise described in division (B)(2) of that section, the report shall include the number of employee positions at all of the enterprise's locations in this state. If an agreement is conditioned on a waiver issued under division (B) of section 5709.633 of the Revised Code on the basis of the circumstance described in division (B)(3)(a) or (b) of that section, the report shall include the number of employees at the facilities referred to in division (B)(3)(a)(i) or (b)(i) of that section, respectively.

(B) Upon the failure of a municipal corporation or county to comply with division (A) of this section:

(1) Beginning on the first day of April of the calendar year in which the municipal corporation or county fails to comply with that division, the municipal corporation or county shall not enter into any agreements with an enterprise under section 5709.62, 5709.63, or 5709.632 of the Revised Code until the municipal corporation or county has complied with division (A) of this section.

(2) On the first day of each ensuing calendar month until the municipal corporation or county complies with division (A) of this section, the director of development services shall either order the proper county auditor to deduct from the next succeeding payment of taxes to the municipal corporation or county under section 321.31, 321.32, 321.33, or 321.34 of the Revised Code an amount equal to one thousand dollars for each calendar month the municipal corporation or county fails to comply with that division, or order the county auditor to deduct that amount from the next succeeding payment to the municipal corporation or county from the undivided local government fund under section 5747.51 of the Revised Code. At the time such a payment is made, the county auditor shall comply with the director's order by issuing a warrant, drawn on the fund from which the money would have been paid, to the director of development services, who shall deposit the warrant into the state enterprise zone program administration fund created in division (C) of this section.

(C) The director, by rule, shall establish the state's application fee for applications submitted to a municipal corporation or county to enter into an agreement under section 5709.62, 5709.63, or 5709.632 of the Revised Code. In establishing the amount of the fee, the director shall consider the state's cost of administering the enterprise zone program, including the cost of reviewing the reports required under division (A) of this section. The director may change the amount of the fee at the times and in the increments the director considers necessary. Any municipal corporation or county that receives an application shall collect the application fee and remit the fee for deposit in the state treasury to the credit of the tax incentives operating fund created in section 122.174 of the Revised Code.

(D) On or before the thirtieth day of June each year, the director of development services shall certify to the tax commissioner the information described under division (A)(7) of this section, derived from the reports submitted to the director under this section.

On the basis of the information certified under this division, the tax commissioner annually shall submit a report to the governor, the speaker of the house of representatives, the president of the senate, and the chairpersons of the ways and means committees of the respective houses of the general assembly, indicating for each enterprise zone the amount of state and local taxes that were not required to be paid because of exemptions granted under agreements entered into under section 5709.62, 5709.63, or 5709.632 of the Revised Code and the amount of additional taxes paid from the payroll of new employees.

Section 5709.69 | Notice of intent to relocate.

• Effective: July 22, 1994
• Latest Legislation: Senate Bill 19 - 120th General Assembly

If an enterprise operating in a county or municipal corporation in this state intends to relocate or relocates part or all of its operations to another county or municipal corporation in this state and has entered into or intends to enter into an agreement under section 5709.62, 5709.63, or 5709.632 of the Revised Code with that county or municipal corporation, the legislative authority or an officer of the county or municipal corporation to which the enterprise intends to relocate or relocates shall serve the legislative authority of the county or municipal corporation from which the enterprise intends to relocate or relocates with notice of the enterprise's intention to relocate, accompanied by a copy of the agreement to be entered into or entered into pursuant to section 5709.62, 5709.63, or 5709.632 of the Revised Code and a statement of the enterprise's reasons for relocation. The legislative authority or officer also shall serve such notice upon the director of development. In both cases, service shall be by personal service or certified mail, return receipt requested, not later than thirty days prior to the day of the first public meeting at which the agreement is deliberated by the legislative authority of the county or municipal corporation to which the enterprise intends to relocate or relocates. With the approval of the director of development, service shall be not later than fifteen days prior to the day of the first public meeting of the legislative authority at which the agreement is deliberated. The legislative authority or officer required to serve notice shall seek such approval by applying to the director at the earliest possible time prior to that meeting. The director may approve the later service if the director determines that earlier notice is not possible or would be likely to jeopardize realization of the project. If approval for a later notice is applied for, the legislative authority or officer need not serve notice to the director as otherwise required by this section.

If the legislative authority or officer required to serve such notices fails to do so as prescribed by this section, the legislative authority shall not enter into an agreement under those sections with that enterprise.

This section applies only to relocations of operations that result or would result in the reduction of employment or the cessation of operations at a place of business in this state.

Section 5709.71 | Exemption of port authority property leased to railroad - annual payments.

• Effective: March 15, 1984
• Latest Legislation: House Bill 169 - 115th General Assembly

(A) All real and tangible personal property owned by a port authority created prior to the effective date of this section pursuant to section 4582.22 of the Revised Code and leased or otherwise made available to a railroad company, as defined in section 5727.01 of the Revised Code, for use in its railroad operations shall be exempt from taxation for ten years beginning with the first year in which the property is so leased or otherwise made available.

(B) The port authority shall make annual payments in lieu of taxes for all property that is exempt from taxation under division (A) of this section. The payments shall be charged and collected in the same manner as the taxes that would have been charged against the property if it were not exempt from taxation under this section. The sum of the payments for each year shall equal one-tenth of the amount of taxes that would have been charged and payable against the property for the year the payments are due had this section not been in effect multiplied by the number of years for which the property has been exempt from taxation under division (A) of this section. Moneys collected as payments in lieu of taxes shall be distributed at the same time and in the same manner as real and public utility property tax payments in proportion to the taxes levied by the taxing districts within which such payments are made is located.

(C) The exemption provided under division (A) of this section and liability for payments under division (B) of this section shall first apply to property owned and leased by a port authority in tax year 1983.

Section 5709.72 | Exemption for library technology development.

• Effective: September 11, 1985
• Latest Legislation: House Bill 146 - 116th General Assembly

All tangible and intangible personal property shall be exempt from taxation if the following conditions exist in the year for which exemption is sought:

(A) The owner is a nonprofit corporation that is exempt from federal income taxes under the provisions of section 501(c)(3) of the Internal Revenue Code of 1954, as amended, and the owner's primary purposes are conducting research and development in library technology and providing computerized or automated services to public, charitable, or educational libraries;

(B) The property is used in any of the following:

(1) Furnishing services to libraries and to similar information resource agencies or institutions whose activities directly benefit libraries, provided at least eighty per cent of the owner's revenues from furnishing those services are paid by libraries, agencies, and institutions that are public, charitable, or educational;

(2) Conducting research and development in technology specifically for use in libraries, the majority of which are public, charitable, or educational;

(3) Providing products, internal support, or auxiliary services related to activities described in divisions (B)(1) and (2) of this section.

Section 5709.73 | Exemption for increase in property value due to public infrastructure improvement.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) As used in this section and section 5709.74 of the Revised Code:

(1) "Business day" means a day of the week excluding Saturday, Sunday, and a legal holiday as defined in section 1.14 of the Revised Code.

(2) "Further improvements" or "improvements" means the increase in the assessed value of real property that would first appear on the tax list and duplicate of real and public utility property after the effective date of a resolution adopted under this section were it not for the exemption granted by that resolution. For purposes of division (B) of this section, "improvements" do not include any property used or to be used for residential purposes. For this purpose, "property that is used or to be used for residential purposes" means property that, as improved, is used or to be used for purposes that would cause the tax commissioner to classify the property as residential property in accordance with rules adopted by the commissioner under section 5713.041 of the Revised Code.

(3) "Housing renovation" means a project carried out for residential purposes.

(4) "Incentive district" has the same meaning as in section 5709.40 of the Revised Code, except that a blighted area is in the unincorporated area of a township.

(5) "Overlay" has the same meaning as in section 5709.40 of the Revised Code, except that the overlay is delineated by the board of township trustees.

(6) "Project" and "public infrastructure improvement" have the same meanings as in section 5709.40 of the Revised Code.

(7) "Urban township" has the same meaning as in section 504.01 of the Revised Code.

(8) "Nonperforming parcel" means a parcel to which all of the following apply:

(a) The parcel is exempted from taxation under division (B) of this section or has been included in a district created under division (C) of this section.

(b) The parcel's owner is required to make payments in lieu of taxes in accordance with section 5709.74 of the Revised Code.

(c) No such payments have been remitted to the county treasurer since the inception of the exemption or district.

(B) A board of township trustees may adopt a resolution that declares to be a public purpose any public infrastructure improvements made that are necessary for the development of certain parcels of land located in the unincorporated area of the township. Except for a resolution adopted by the board of an urban township, the resolution shall be adopted by a unanimous vote of the board. Except as otherwise provided under division (D) of this section or section 5709.51 of the Revised Code, the resolution may exempt from real property taxation not more than seventy-five per cent of further improvements to a parcel of land that directly benefits from the public infrastructure improvements, for a period of not more than ten years. The resolution shall specify the percentage of the further improvements to be exempted and the life of the exemption.

(C)(1) A board of township trustees may adopt a resolution creating an incentive district and declaring improvements to parcels within the district to be a public purpose and, except as provided in division (C)(2) of this section, exempt from taxation as provided in this section. Except for a resolution adopted by the board of an urban township, the resolution shall be adopted by a unanimous vote of the board. A board of township trustees of a township that has a population that exceeds twenty-five thousand, as shown by the most recent federal decennial census, may not adopt a resolution that creates an incentive district if the sum of the taxable value of real property in the proposed district for the preceding tax year and the taxable value of all real property in the township that would have been taxable in the preceding year were it not for the fact that the property was in an existing incentive district and therefore exempt from taxation exceeds twenty-five per cent of the taxable value of real property in the township for the preceding tax year. The district shall be located within the unincorporated area of the township and shall not include any territory that is included within a district created under division (B) of section 5709.78 of the Revised Code. The resolution shall delineate the boundary of the proposed district and specifically identify each parcel within the district. A proposed district may not include any parcel, other than a nonperforming parcel, that is or has been exempted from taxation under division (B) of this section or that is or has been within another district created under this division. On and after the effective date of the district, a nonperforming parcel within the district is no longer exempted from taxation under division (B) of this section or included within an incentive district under any previous resolution, and the parcel's owner is no longer required to make payments in lieu of taxes under such a previous resolution in accordance with section 5709.74 of the Revised Code. Any exemption application filed with the tax commissioner under section 5715.27 of the Revised Code under the second resolution shall identify the nonperforming parcels included in the second district, the original resolution under which the nonperforming parcels were originally exempted, and the value history of each nonperforming parcel since the enactment of the original resolution. A resolution may create more than one such district, and more than one resolution may be adopted under division (C)(1) of this section.

(2)(a) Not later than thirty days prior to adopting a resolution under division (C)(1) of this section, if the township intends to apply for exemptions from taxation under section 5709.911 of the Revised Code on behalf of owners of real property located within the proposed incentive district, the board shall conduct a public hearing on the proposed resolution. Not later than thirty days prior to the public hearing, the board shall give notice of the public hearing and the proposed resolution by first class mail to every real property owner whose property is located within the boundaries of the proposed incentive district that is the subject of the proposed resolution. The notice shall include a map of the proposed incentive district on which the board of township trustees shall have delineated an overlay. The notice shall inform the property owner of the owner's right to exclude the owner's property from the incentive district if both of the following conditions are met:

(i) The owner's entire parcel of property will not be located within the overlay.

(ii) The owner has submitted a statement to the board of county commissioners of the county in which the parcel is located indicating the owner's intent to seek a tax exemption for improvements to the owner's parcel under division (A) or (B) of section 5709.78 of the Revised Code within the next five years.

When both of the preceding conditions are met, the owner may exclude the owner's property from the incentive district by submitting a written response in accordance with division (C)(2)(b) of this section. The notice also shall include information detailing the required contents of the response, the address to which the response may be mailed, and the deadline for submitting the response.

(b) Any owner of real property located within the boundaries of an incentive district proposed under division (C)(1) of this section who meets the conditions specified in divisions (C)(2)(a)(i) and (ii) of this section may exclude the property from the proposed incentive district by submitting a written response to the board not later than forty-five days after the postmark date on the notice required under division (C)(2)(a) of this section. The response shall include a copy of the statement submitted under division (C)(2)(a)(ii) of this section. The response shall be sent by first class mail or delivered in person at a public hearing held by the board under division (C)(2)(a) of this section. The response shall conform to any content requirements that may be established by the board and included in the notice provided under division (C)(2)(a) of this section. In the response, property owners may identify a parcel by street address, by the manner in which it is identified in the resolution, or by other means allowing the identity of the parcel to be ascertained.

(c) Before adopting a resolution under division (C)(1) of this section, the board shall amend the resolution to exclude any parcel for which a written response has been submitted under division (C)(2)(b) of this section. A township shall not apply for exemptions from taxation under section 5709.911 of the Revised Code for any such parcel, and service payments may not be required from the owner of the parcel. Improvements to a parcel excluded from an incentive district under this division may be exempted from taxation under division (B) of this section pursuant to a resolution adopted under that division or under any other section of the Revised Code under which the parcel qualifies.

(3)(a) A resolution adopted under division (C)(1) of this section shall specify the life of the incentive district and the percentage of the improvements to be exempted, shall designate the public infrastructure improvements made, to be made, or in the process of being made, that benefit or serve, or, once made, will benefit or serve parcels in the district. The resolution also shall identify one or more specific projects being, or to be, undertaken in the district that place additional demand on the public infrastructure improvements designated in the resolution. The project identified may, but need not be, the project under division (C)(3)(b) of this section that places real property in use for commercial or industrial purposes.

A resolution adopted under division (C)(1) of this section on or after March 30, 2006, shall not designate police or fire equipment as public infrastructure improvements, and, except as provided in division (F) of this section, no service payment provided for in section 5709.74 of the Revised Code and received by the township under the resolution shall be used for police or fire equipment.

(b) A resolution adopted under division (C)(1) of this section may authorize the use of service payments provided for in section 5709.74 of the Revised Code for the purpose of housing renovations within the incentive district, provided that the resolution also designates public infrastructure improvements that benefit or serve the district, and that a project within the district places real property in use for commercial or industrial purposes. Service payments may be used to finance or support loans, deferred loans, and grants to persons for the purpose of housing renovations within the district. The resolution shall designate the parcels within the district that are eligible for housing renovations. The resolution shall state separately the amount or the percentages of the expected aggregate service payments that are designated for each public infrastructure improvement and for the purpose of housing renovations.

(4) Except with the approval of the board of education of each city, local, or exempted village school district within the territory of which the incentive district is or will be located, and subject to division (E) of this section, the life of an incentive district shall not exceed ten years, and the percentage of improvements to be exempted shall not exceed seventy-five per cent. With approval of the board of education, the life of a district may be not more than thirty years, and the percentage of improvements to be exempted may be not more than one hundred per cent. The approval of a board of education shall be obtained in the manner provided in division (D) of this section.

(D) Improvements with respect to a parcel may be exempted from taxation under division (B) of this section, and improvements to parcels within an incentive district may be exempted from taxation under division (C) of this section, for up to ten years or, with the approval of the board of education of the city, local, or exempted village school district within which the parcel or district is located, for up to thirty years. The percentage of the improvements exempted from taxation may, with such approval, exceed seventy-five per cent, but shall not exceed one hundred per cent. Not later than forty-five business days prior to adopting a resolution under this section declaring improvements to be a public purpose that is subject to approval by a board of education under this division, the board of township trustees shall deliver to the board of education a notice stating its intent to adopt a resolution making that declaration. The notice regarding improvements with respect to a parcel under division (B) of this section shall identify the parcels for which improvements are to be exempted from taxation, provide an estimate of the true value in money of the improvements, specify the period for which the improvements would be exempted from taxation and the percentage of the improvements that would be exempted, and indicate the date on which the board of township trustees intends to adopt the resolution. The notice regarding improvements made under division (C) of this section to parcels within an incentive district shall delineate the boundaries of the district, specifically identify each parcel within the district, identify each anticipated improvement in the district, provide an estimate of the true value in money of each such improvement, specify the life of the district and the percentage of improvements that would be exempted, and indicate the date on which the board of township trustees intends to adopt the resolution. The board of education, by resolution adopted by a majority of the board, may approve the exemption for the period or for the exemption percentage specified in the notice; may disapprove the exemption for the number of years in excess of ten, may disapprove the exemption for the percentage of the improvements to be exempted in excess of seventy-five per cent, or both; or may approve the exemption on the condition that the board of township trustees and the board of education negotiate an agreement providing for compensation to the school district equal in value to a percentage of the amount of taxes exempted in the eleventh and subsequent years of the exemption period or, in the case of exemption percentages in excess of seventy-five per cent, compensation equal in value to a percentage of the taxes that would be payable on the portion of the improvements in excess of seventy-five per cent were that portion to be subject to taxation, or other mutually agreeable compensation.

The board of education shall certify its resolution to the board of township trustees not later than fourteen days prior to the date the board of township trustees intends to adopt the resolution as indicated in the notice. If the board of education and the board of township trustees negotiate a mutually acceptable compensation agreement, the resolution may declare the improvements a public purpose for the number of years specified in the resolution or, in the case of exemption percentages in excess of seventy-five per cent, for the exemption percentage specified in the resolution. In either case, if the board of education and the board of township trustees fail to negotiate a mutually acceptable compensation agreement, the resolution may declare the improvements a public purpose for not more than ten years, and shall not exempt more than seventy-five per cent of the improvements from taxation. If the board of education fails to certify a resolution to the board of township trustees within the time prescribed by this section, the board of township trustees thereupon may adopt the resolution and may declare the improvements a public purpose for up to thirty years or, in the case of exemption percentages proposed in excess of seventy-five per cent, for the exemption percentage specified in the resolution. The board of township trustees may adopt the resolution at any time after the board of education certifies its resolution approving the exemption to the board of township trustees, or, if the board of education approves the exemption on the condition that a mutually acceptable compensation agreement be negotiated, at any time after the compensation agreement is agreed to by the board of education and the board of township trustees. If a mutually acceptable compensation agreement is negotiated between the board of township trustees and the board of education, including agreements for payments in lieu of taxes under section 5709.74 of the Revised Code, the board of township trustees shall compensate the joint vocational school district within which the parcel or district is located at the same rate and under the same terms received by the city, local, or exempted village school district.

If a board of education has adopted a resolution waiving its right to approve exemptions from taxation under this section and the resolution remains in effect, approval of such exemptions by the board of education is not required under division (D) of this section. If a board of education has adopted a resolution allowing a board of township trustees to deliver the notice required under division (D) of this section fewer than forty-five business days prior to adoption of the resolution by the board of township trustees, the board of township trustees shall deliver the notice to the board of education not later than the number of days prior to the adoption as prescribed by the board of education in its resolution. If a board of education adopts a resolution waiving its right to approve exemptions or shortening the notification period, the board of education shall certify a copy of the resolution to the board of township trustees. If the board of education rescinds the resolution, it shall certify notice of the rescission to the board of township trustees.

If the board of township trustees is not required by division (D) of this section to notify the board of education of the board of township trustees' intent to declare improvements to be a public purpose, the board of township trustees shall comply with the notice requirements imposed under section 5709.83 of the Revised Code before taking formal action to adopt the resolution making that declaration, unless the board of education has adopted a resolution under that section waiving its right to receive the notice.

Nothing in this division prohibits the board of township trustees from amending the resolution under section 5709.51 of the Revised Code to extend the term of the exemption.

(E)(1) If a proposed resolution under division (C)(1) of this section exempts improvements with respect to a parcel within an incentive district for more than ten years, or the percentage of the improvement exempted from taxation exceeds seventy-five per cent, not later than forty-five business days prior to adopting the resolution the board of township trustees shall deliver to the board of county commissioners of the county within which the incentive district is or will be located a notice that states its intent to adopt a resolution creating an incentive district. The notice shall include a copy of the proposed resolution, identify the parcels for which improvements are to be exempted from taxation, provide an estimate of the true value in money of the improvements, specify the period of time for which the improvements would be exempted from taxation, specify the percentage of the improvements that would be exempted from taxation, and indicate the date on which the board of township trustees intends to adopt the resolution.

(2) The board of county commissioners, by resolution adopted by a majority of the board, may object to the exemption for the number of years in excess of ten, may object to the exemption for the percentage of the improvement to be exempted in excess of seventy-five per cent, or both. If the board of county commissioners objects, the board may negotiate a mutually acceptable compensation agreement with the board of township trustees. In no case shall the compensation provided to the board of county commissioners exceed the property taxes foregone due to the exemption. If the board of county commissioners objects, and the board of county commissioners and board of township trustees fail to negotiate a mutually acceptable compensation agreement, the resolution adopted under division (C)(1) of this section shall provide to the board of county commissioners compensation in the eleventh and subsequent years of the exemption period equal in value to not more than fifty per cent of the taxes that would be payable to the county or, if the board of county commissioner's objection includes an objection to an exemption percentage in excess of seventy-five per cent, compensation equal in value to not more than fifty per cent of the taxes that would be payable to the county, on the portion of the improvement in excess of seventy-five per cent, were that portion to be subject to taxation. The board of county commissioners shall certify its resolution to the board of township trustees not later than thirty days after receipt of the notice.

(3) If the board of county commissioners does not object or fails to certify its resolution objecting to an exemption within thirty days after receipt of the notice, the board of township trustees may adopt its resolution, and no compensation shall be provided to the board of county commissioners. If the board of county commissioners timely certifies its resolution objecting to the trustees' resolution, the board of township trustees may adopt its resolution at any time after a mutually acceptable compensation agreement is agreed to by the board of county commissioners and the board of township trustees, or, if no compensation agreement is negotiated, at any time after the board of township trustees agrees in the proposed resolution to provide compensation to the board of county commissioners of fifty per cent of the taxes that would be payable to the county in the eleventh and subsequent years of the exemption period or on the portion of the improvement in excess of seventy-five per cent, were that portion to be subject to taxation.

(F) Service payments in lieu of taxes that are attributable to any amount by which the effective tax rate of either a renewal levy with an increase or a replacement levy exceeds the effective tax rate of the levy renewed or replaced, or that are attributable to an additional levy, for a levy authorized by the voters for any of the following purposes on or after January 1, 2006, and which are provided pursuant to a resolution creating an incentive district under division (C)(1) of this section that is adopted on or after January 1, 2006, or a later date as specified in this division, shall be distributed to the appropriate taxing authority as required under division (C) of section 5709.74 of the Revised Code in an amount equal to the amount of taxes from that additional levy or from the increase in the effective tax rate of such renewal or replacement levy that would have been payable to that taxing authority from the following levies were it not for the exemption authorized under division (C) of this section:

(1) A tax levied under division (L) of section 5705.19 or section 5705.191 or 5705.222 of the Revised Code for community developmental disabilities programs and services pursuant to Chapter 5126. of the Revised Code;

(2) A tax levied under division (Y) of section 5705.19 of the Revised Code for providing or maintaining senior citizens services or facilities;

(3) A tax levied under section 5705.22 of the Revised Code for county hospitals;

(4) A tax levied by a joint-county district or by a county under section 5705.19, 5705.191, or 5705.221 of the Revised Code for alcohol, drug addiction, and mental health services or families;

(5) A tax levied under section 5705.23 of the Revised Code for library purposes;

(6) A tax levied under section 5705.24 of the Revised Code for the support of children services and the placement and care of children;

(7) A tax levied under division (Z) of section 5705.19 of the Revised Code for the provision and maintenance of zoological park services and facilities under section 307.76 of the Revised Code;

(8) A tax levied under section 511.27 or division (H) of section 5705.19 of the Revised Code for the support of township park districts;

(9) A tax levied under division (A), (F), or (H) of section 5705.19 of the Revised Code for parks and recreational purposes of a joint recreation district organized pursuant to division (B) of section 755.14 of the Revised Code;

(10) A tax levied under section 1545.20 or 1545.21 of the Revised Code for park district purposes;

(11) A tax levied under section 5705.191 of the Revised Code for the purpose of making appropriations for public assistance; human or social services; public relief; public welfare; public health and hospitalization; and support of general hospitals;

(12) A tax levied under section 3709.29 of the Revised Code for a general health district program;

(13) A tax levied by a township under section 505.39, 505.51, or division (I), (J), (U), or (JJ) of section 5705.19 of the Revised Code for the purpose of funding fire, police, emergency medical, or ambulance services as described in those sections. Division (F)(13) of this section applies only to incentive districts created by a resolution adopted on or after March 22, 2019, the effective date of the amendment of this section by H.B. 500 of the 132nd general assembly, and only if that resolution specifies that division (F) of this section shall apply to such a tax.

(G) An exemption from taxation granted under this section commences with the tax year specified in the resolution so long as the year specified in the resolution commences after the effective date of the resolution. If the resolution specifies a year commencing before the effective date of the resolution or specifies no year whatsoever, the exemption commences with the tax year in which an exempted improvement first appears on the tax list and duplicate of real and public utility property and that commences after the effective date of the resolution. In lieu of stating a specific year, the resolution may provide that the exemption commences in the tax year in which the value of an improvement exceeds a specified amount or in which the construction of one or more improvements is completed, provided that such tax year commences after the effective date of the resolution. With respect to the exemption of improvements to parcels under division (B) of this section, the resolution may allow for the exemption to commence in different tax years on a parcel-by-parcel basis, with a separate exemption term specified for each parcel.

Except as otherwise provided in this division and section 5709.51 of the Revised Code, the exemption ends on the date specified in the resolution as the date the improvement ceases to be a public purpose or the incentive district expires, or ends on the date on which the public infrastructure improvements and housing renovations are paid in full from the township public improvement tax increment equivalent fund established under section 5709.75 of the Revised Code, whichever occurs first. The exemption of an improvement with respect to a parcel or within an incentive district may end on a later date, as specified in the resolution, if the board of township trustees and the board of education of the city, local, or exempted village school district within which the parcel or district is located have entered into a compensation agreement under section 5709.82 of the Revised Code with respect to the improvement and the board of education has approved the term of the exemption under division (D) of this section, but in no case shall the improvement be exempted from taxation for more than thirty years. The board of township trustees may, by majority vote, adopt a resolution permitting the township to enter into such agreements as the board finds necessary or appropriate to provide for the construction or undertaking of public infrastructure improvements and housing renovations. Any exemption shall be claimed and allowed in the same or a similar manner as in the case of other real property exemptions. If an exemption status changes during a tax year, the procedure for the apportionment of the taxes for that year is the same as in the case of other changes in tax exemption status during the year.

(H) The board of township trustees may issue the notes of the township to finance all costs pertaining to the construction or undertaking of public infrastructure improvements and housing renovations made pursuant to this section. The notes shall be signed by the board and attested by the signature of the township fiscal officer, shall bear interest not to exceed the rate provided in section 9.95 of the Revised Code, and are not subject to Chapter 133. of the Revised Code. The resolution authorizing the issuance of the notes shall pledge the funds of the township public improvement tax increment equivalent fund established pursuant to section 5709.75 of the Revised Code to pay the interest on and principal of the notes. The notes, which may contain a clause permitting prepayment at the option of the board, shall be offered for sale on the open market or given to the vendor or contractor if no sale is made.

(I) The township, not later than fifteen days after the adoption of a resolution under this section, shall submit to the director of development a copy of the resolution. On or before the thirty-first day of March of each year, the township shall submit a status report to the director. The report shall indicate, in the manner prescribed by the director, the progress of the project during each year that the exemption remains in effect, including a summary of the receipts from service payments in lieu of taxes; expenditures of money from the fund created under section 5709.75 of the Revised Code; a description of the public infrastructure improvements and housing renovations financed with the expenditures; and a quantitative summary of changes in private investment resulting from each project.

(J) Nothing in this section shall be construed to prohibit a board of township trustees from declaring to be a public purpose improvements with respect to more than one parcel.

If a parcel is located in a new community district in which the new community authority imposes a community development charge on the basis of rentals received from leases of real property as described in division (L)(2) of section 349.01 of the Revised Code, the parcel may not be exempted from taxation under this section.

(K) A board of township trustees that adopted a resolution under this section prior to July 21, 1994, may amend that resolution to include any additional public infrastructure improvement. A board of township trustees that seeks by the amendment to utilize money from its township public improvement tax increment equivalent fund for land acquisition in aid of industry, commerce, distribution, or research, demolition on private property, or stormwater and flood remediation projects may do so provided that the board currently is a party to a hold-harmless agreement with the board of education of the city, local, or exempted village school district within the territory of which are located the parcels that are subject to an exemption. For the purposes of this division, a "hold-harmless agreement" means an agreement under which the board of township trustees agrees to compensate the school district for one hundred per cent of the tax revenue that the school district would have received from further improvements to parcels designated in the resolution were it not for the exemption granted by the resolution.

(L) Notwithstanding the limitation prescribed by division (D) of this section on the number of years that improvements to a parcel or parcels may be exempted from taxation, a board of trustees of a township with a population of fifteen thousand or more may amend a resolution originally adopted under this section before December 31, 1994, to extend the exemption of improvements to the parcel or parcels included in such resolution for an additional period not to exceed fifteen years. The amendment shall not increase the percentage of improvements to the parcel or parcels exempted from taxation. Before adopting an amendment authorized under this division, the board of township trustees shall obtain the approval of each board of education of the city, local, or exempted village school district within which the exempted parcels are located in the manner required under division (D) of this section, except that (1) the board of education may approve the exemption on the condition that the board of township trustees and the board of education negotiate an agreement providing for compensation to the school district equal in value to the amount of taxes the district forgoes in each year the exemption is extended pursuant to this division or any other mutually agreeable compensation and (2) if the board of education fails to certify a resolution approving the amendment to the board of township trustees within the time prescribed by division (D) of this section, the board of township trustees shall not adopt the amendment authorized under this division.

No approval under this division shall be required from a board of education that has adopted a resolution waiving its right to approve exemptions from taxation pursuant to division (D) of this section. If the board of education has adopted such a resolution, the board of township trustees shall comply with the notice requirements imposed under section 5709.83 of the Revised Code before taking formal action to adopt an amendment authorized under this division unless the board of education has adopted a resolution under that section waiving its right to receive the notice. Not later than fourteen days before adopting an amendment authorized under this division, the board of township trustees shall deliver a notice identical to a notice required under section 5709.83 of the Revised Code to the board of county commissioners of each county in which the exempted parcels are located.

Last updated September 12, 2023 at 10:48 AM

Section 5709.74 | Annual service payments in lieu of taxes.

• Effective: April 6, 2023
• Latest Legislation: House Bill 501 - 134th General Assembly

(A) A township that has declared an improvement to be a public purpose under section 5709.41 or 5709.73 of the Revised Code may require the owner of the parcel to make annual service payments in lieu of taxes to the county treasurer on or before the final dates for payment of real property taxes. Each payment shall be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and payable against any improvement made on the parcel if it were not exempt from taxation. If any reduction in the levies otherwise applicable to the exempt property is made by the county budget commission under section 5705.31 of the Revised Code, the amount of the service payment in lieu of taxes shall be calculated as if a reduction in levies had not been made. A township shall not require an owner to make annual service payments in lieu of taxes pursuant to this section after the date on which the township has been paid back in full for the public infrastructure improvements made pursuant to sections 5709.73 to 5709.75 of the Revised Code.

(B) Moneys collected as service payments in lieu of taxes shall be distributed at the same time and in the same manner as real property tax payments. However, subject to division (C) of this section or section 5709.913 of the Revised Code, the entire amount so collected shall be distributed to the township in which the improvement is located. If a parcel upon which moneys are collected as service payments in lieu of taxes is annexed to a municipal corporation, the service payments shall continue to be collected and distributed to the township in which the parcel was located before its annexation until the township is paid back in full for the cost of any public infrastructure improvements it made on the parcel. The treasurer shall maintain a record of the service payments in lieu of taxes made from property in each township.

(C) If annual service payments in lieu of taxes are required under this section, the county treasurer shall distribute to the appropriate taxing authorities the portion of the service payments that represent payments required under division (F) of section 5709.73 of the Revised Code.

(D) Nothing in this section or section 5709.41 or 5709.73 of the Revised Code affects the taxes levied against that portion of the value of any parcel of property that is not exempt from taxation.

Last updated January 24, 2023 at 12:33 PM

Section 5709.75 | Township public improvement tax increment equivalent fund.

• Effective: April 6, 2023
• Latest Legislation: House Bill 501 - 134th General Assembly

(A) Any township that grants a tax exemption under section 5709.73 of the Revised Code shall establish a township public improvement tax increment equivalent fund into which shall be deposited service payments in lieu of taxes distributed to the township under section 5709.74 of the Revised Code. If the board of township trustees has adopted a resolution under division (C) of section 5709.73 of the Revised Code, the township shall establish at least one account in that fund with respect to resolutions adopted under division (B) of that section, and one account with respect to each incentive district created by a resolution adopted under division (C) of that section. If a resolution adopted under division (C) of section 5709.73 of the Revised Code also authorizes the use of service payments for housing renovations within the incentive district, the township shall establish separate accounts for the service payments designated for public infrastructure improvements and for the service payments authorized for the purpose of housing renovations.

Except as otherwise provided in division (C) or (D) of this section, money deposited in an account of the township public improvement tax increment equivalent fund shall be used by the township to pay the costs of public infrastructure improvements designated in or the housing renovations authorized by the resolution with respect to which the account is established, including any interest on and principal of the notes; in the case of an account established with respect to a resolution adopted under division (C) of that section, money in the account shall be used to finance the public infrastructure improvements designated, or the housing renovations authorized, for each incentive district created in the resolution. Money in an account shall not be used to finance or support housing renovations that take place after the incentive district has expired.

(B) A township may, by resolution, establish a redevelopment tax increment equivalent fund, into which shall be deposited service payments in lieu of taxes distributed to the township by the county treasurer as provided in section 5709.74 of the Revised Code for improvements exempt from taxation pursuant to an ordinance adopted under section 5709.41 of the Revised Code. Moneys deposited in the redevelopment tax increment equivalent fund shall be used for such purposes as are authorized in the resolution establishing the fund.

(C)(1)(a) A township may distribute money in the township public improvement tax increment equivalent fund or redevelopment tax increment equivalent fund to any school district in which the exempt property is located in an amount not to exceed the amount of real property taxes that such school district would have received from the improvement if it were not exempt from taxation. The resolution establishing the fund shall set forth the percentage of such maximum amount that will be distributed to any affected school district.

(b) A township also may distribute money in either fund as follows:

(i) To a board of county commissioners, in the amount that is owed to the board pursuant to division (E) of section 5709.73 of the Revised Code;

(ii) To a county in accordance with section 5709.913 of the Revised Code.

(2) Money from an account in a township public improvement tax increment equivalent fund or from a redevelopment tax increment equivalent fund may be distributed under division (C)(1)(b) of this section, regardless of the date a resolution was adopted under section 5709.73 of the Revised Code that prompted the establishment of the account, even if the resolution was adopted prior to March 30, 2006.

(D) A board of township trustees that adopted a resolution under section 5709.73 of the Revised Code and that, with respect to property exempted under such a resolution, is party to a hold-harmless or service agreement, may appropriate and expend unencumbered money in the fund to pay current public safety expenses of the township. A township appropriating and expending money under this division shall reimburse the fund for the sum so appropriated and expended not later than the day the exemption granted under the resolution expires. For the purposes of this division, a "hold-harmless agreement" is an agreement with the board of education of a city, local, or exempted village school district under which the board of township trustees agrees to compensate the school district for one hundred per cent of the tax revenue the school district would have received from improvements to parcels designated in the resolution were it not for the exemption granted by the resolution.

(E) A board of township trustees that adopted a resolution under section 5709.73 of the Revised Code prior to July 21, 1994, and that, with respect to property exempted under such resolution, is a party to a hold-harmless or service agreement with a board of education of a city, local, or exempted village school district, within the territory of which such property is located, may appropriate and expend unencumbered money in the fund to pay current expenses for the continued maintenance of public improvements or public infrastructure improvements designated in that resolution, as such resolution has been amended under division (K) of section 5709.73 of the Revised Code.

(F) Any unencumbered money remaining in the township public improvement tax increment equivalent fund or an account of that fund, or in the redevelopment tax increment equivalent fund, upon dissolution of the account or fund shall be transferred to the general fund of the township.

Last updated January 24, 2023 at 12:33 PM

Section 5709.76 | Exempting public obligations and purchase obligations.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) All of the following are exempt from taxes levied by the state and its subdivisions:

(1) Public obligations;

(2) Interest or interest equivalent on public obligations and on purchase obligations;

(3) The transfer, and any profit made on the sale, exchange, or other disposition, of public obligations.

(B) The exemptions granted by division (A) of this section apply to public obligations and purchase obligations issued, incurred, or entered into before, on, or after March 29, 1988, but only for taxable years ending on or after the later of July 1, 1988, or March 29, 1988.

(C) This section supplements, and does not restrict, limit, or impair, any exemption from taxation otherwise provided for in the Ohio Constitution, the Revised Code, or other laws.

(D) As used in this section:

(1) "Fractionalized interests in purchase obligations" means participations, shares, or other instruments or agreements, separate from the purchase obligations themselves, evidencing ownership of interests in purchase obligations or of rights to receive payments of, or on account of, principal or interest or their equivalents payable by or on behalf of the state or a subdivision pursuant to purchase obligations, and does not include interests or shares in qualified investment trusts.

(2) "Interest or interest equivalent" means those payments or portions of payments, however denominated, that constitute or represent consideration for forbearing the collection of money, or for deferring the receipt of payment of money to a future time, as determined for federal income tax purposes, and includes those portions of a qualified investment trust's distributions to its shareholders or beneficial owners, whether distributed or deemed distributed in cash or in trust shares or interests, that are attributable to the trust's receipt of interest or interest equivalent.

(3) "Internal Revenue Code" has the same meaning as in division (H) of section 5747.01 of the Revised Code.

(4) "Qualified investment trust" or "trust" means a unit investment trust, grantor trust, or regulated investment company, if at all times at least fifty per cent of the value of the total assets of the trust or company consists of public securities or purchase obligations, or similar obligations of other states or their subdivisions.

(5) "Public obligations" means public securities, fractionalized interests in purchase obligations, and any obligation or evidence of obligation to pay interest or interest equivalent on public securities or on fractionalized interests in purchase obligations, and does not include purchase obligations.

(6) "Public securities" means bonds, notes, certificates of indebtedness, commercial paper, and other instruments in writing issued by the state or a subdivision, or by any nonprofit corporation authorized to issue public securities for or on behalf of the state or a subdivision, to evidence the obligation of the state, subdivision, or nonprofit corporation to repay money borrowed by, or to pay at any future time other money obligations of, the state, subdivision, or nonprofit corporation, and does not include purchase obligations. Public securities may be in the form of either certificated securities or uncertificated securities, as those terms are defined in section 1308.01 of the Revised Code.

(7) "Purchase obligations" means interest-bearing obligations of the state or a subdivision to make payments under installment sale, lease, lease purchase, or similar types of agreements.

(8) "Regulated investment company" means a regulated investment company as defined in section 851 of the Internal Revenue Code.

(9) "State" means the state, state officers, and state agencies, including commissions, institutions, boards, agencies, authorities, or other instrumentalities.

(10) "Subdivision" means any local taxing authority, political or governmental subdivision, body corporate and politic, or other local public or governmental entity in the state, any combination or consortium of two or more of those subdivisions, and any public division, district, commission, authority, department, board, officer, or institution of any one or more of those subdivisions.

(11) "Taxes" means any direct or indirect taxes, including income, ad valorem, transfer, and excise taxes, and including the tax on the net income measure of the issued and outstanding shares of a corporation under Chapter 5733. of the Revised Code. "Taxes" does not mean any of the following:

(a) The tax on the net worth measure of the issued and outstanding shares of corporations and financial institutions under Chapter 5733. of the Revised Code;

(b) The tax on the value of the gross estate under Chapter 5731. of the Revised Code;

(c) The tax on the value of the capital and surplus of a domestic insurance company under Chapter 5725. of the Revised Code;

(d) The tax on the shares of and capital employed by dealers in intangibles under Chapter 5725. and section 5707.03 of the Revised Code;

(e) The tax levied on the basis of the total equity capital of financial institutions under Chapter 5726. of the Revised Code.

Section 5709.77 | County public infrastructure improvement definitions.

• Effective: April 6, 2017
• Latest Legislation: Senate Bill 257 - 131st General Assembly

As used in sections 5709.77 to 5709.81 of the Revised Code:

(A) "Business day" means a day of the week excluding Saturday, Sunday, and a legal holiday as defined in section 1.14 of the Revised Code.

(B) "Fund" means to provide for the payment of the debt service on and the expenses relating to an outstanding obligation of the county.

(C) "Housing renovation" means a project carried out for residential purposes.

(D) "Improvement" means the increase in the assessed value of real property that would first appear on the tax list and duplicate of real and public utility property after the effective date of a resolution adopted under section 5709.78 of the Revised Code were it not for the exemption granted by that resolution. For purposes of division (A) of section 5709.78 of the Revised Code, "improvement" does not include any property used or to be used for residential purposes. For this purpose, "property that is used or to be used for residential purposes" means property that, as improved, is used or to be used for purposes that would cause the tax commissioner to classify the property as residential property in accordance with rules adopted by the commissioner under section 5713.041 of the Revised Code.

(E) "Incentive district" has the same meaning as in section 5709.40 of the Revised Code, except that a blighted area is in the unincorporated territory of a county.

(F) "Refund" means to fund and retire an outstanding obligation of the county.

(G) "Overlay" has the same meaning as in section 5709.40 of the Revised Code, except that the overlay is delineated by the board of county commissioners.

(H) "Project" and "public infrastructure improvement" have the same meanings as in section 5709.40 of the Revised Code.

Last updated November 22, 2024 at 3:54 PM

Section 5709.78 | Exemption for increase in property value due to county public infrastructure improvement.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) A board of county commissioners may, by resolution, declare improvements to certain parcels of real property located in the unincorporated territory of the county to be a public purpose. Except as otherwise provided under division (C) of this section or section 5709.51 of the Revised Code, not more than seventy-five per cent of an improvement thus declared to be a public purpose may be exempted from real property taxation, for a period of not more than ten years. The resolution shall specify the percentage of the improvement to be exempted and the life of the exemption.

A resolution adopted under this division shall designate the specific public infrastructure improvements made, to be made, or in the process of being made by the county that directly benefit, or that once made will directly benefit, the parcels for which improvements are declared to be a public purpose. The service payments provided for in section 5709.79 of the Revised Code shall be used to finance the public infrastructure improvements designated in the resolution, or as provided in section 5709.80 of the Revised Code.

(B)(1) A board of county commissioners may adopt a resolution creating an incentive district and declaring improvements to parcels within the district to be a public purpose and, except as provided in division (B)(2) of this section, exempt from taxation as provided in this section, but no board of county commissioners of a county that has a population that exceeds twenty-five thousand, as shown by the most recent federal decennial census, shall adopt a resolution that creates an incentive district if the sum of the taxable value of real property in the proposed district for the preceding tax year and the taxable value of all real property in the county that would have been taxable in the preceding year were it not for the fact that the property was in an existing incentive district and therefore exempt from taxation exceeds twenty-five per cent of the taxable value of real property in the county for the preceding tax year. The district shall be located within the unincorporated territory of the county and shall not include any territory that is included within a district created under division (C) of section 5709.73 of the Revised Code. The resolution shall delineate the boundary of the proposed district and specifically identify each parcel within the district. A proposed district may not include any parcel that is or has been exempted from taxation under division (A) of this section or that is or has been within another district created under this division. A resolution may create more than one such district, and more than one resolution may be adopted under division (B)(1) of this section.

(2)(a) Not later than thirty days prior to adopting a resolution under division (B)(1) of this section, if the county intends to apply for exemptions from taxation under section 5709.911 of the Revised Code on behalf of owners of real property located within the proposed incentive district, the board of county commissioners shall conduct a public hearing on the proposed resolution. Not later than thirty days prior to the public hearing, the board shall give notice of the public hearing and the proposed resolution by first class mail to every real property owner whose property is located within the boundaries of the proposed incentive district that is the subject of the proposed resolution. The board also shall provide the notice by first class mail to the clerk of each township in which the proposed incentive district will be located. The notice shall include a map of the proposed incentive district on which the board of county commissioners shall have delineated an overlay. The notice shall inform property owners of the owner's right to exclude the owner's property from the incentive district if both of the following conditions are met:

(i) The owner's entire parcel of property will not be located within the overlay.

(ii) The owner has submitted a statement to the board of township trustees of the township in which the parcel is located indicating the owner's intent to seek a tax exemption for improvements to the owner's parcel under section 5709.41 or division (B) or (C) of section 5709.73 of the Revised Code within the next five years.

When both of the preceding conditions are met, the owner may exclude the owner's property from the incentive district by submitting a written response in accordance with division (B)(2)(b) of this section. The notice also shall include information detailing the required contents of the response, the address to which the response may be mailed, and the deadline for submitting the response.

(b) Any owner of real property located within the boundaries of an incentive district proposed under division (B) (1) of this section who meets the conditions specified in divisions (B)(2)(a)(i) and (ii) of this section may exclude the property from the proposed incentive district by submitting a written response to the board not later than forty-five days after the postmark date on the notice required under division (B)(2)(a) of this section. The response shall include a copy of the statement submitted under division (B)(2)(a)(ii) of this section. The response shall be sent by first class mail or delivered in person at a public hearing held by the board under division (B)(2)(a) of this section. The response shall conform to any content requirements that may be established by the board and included in the notice provided under division (B)(2)(a) of this section. In the response, property owners may identify a parcel by street address, by the manner in which it is identified in the resolution, or by other means allowing the identity of the parcel to be ascertained.

(c) Before adopting a resolution under division (B)(1) of this section, the board shall amend the resolution to exclude any parcel for which a written response has been submitted under division (B)(2)(b) of this section. A county shall not apply for exemptions from taxation under section 5709.911 of the Revised Code for any such parcel, and service payments may not be required from the owner of the parcel. Improvements to a parcel excluded from an incentive district under this division may be exempted from taxation under division (A) of this section pursuant to a resolution adopted under that division or under any other section of the Revised Code under which the parcel qualifies.

(3)(a) A resolution adopted under division (B)(1) of this section shall specify the life of the incentive district and the percentage of the improvements to be exempted, shall designate the public infrastructure improvements made, to be made, or in the process of being made, that benefit or serve, or, once made, will benefit or serve parcels in the district. The resolution also shall identify one or more specific projects being, or to be, undertaken in the district that place additional demand on the public infrastructure improvements designated in the resolution. The project identified may, but need not be, the project under division (B)(3)(b) of this section that places real property in use for commercial or industrial purposes.

A resolution adopted under division (B)(1) of this section on or after March 30, 2006, shall not designate police or fire equipment as public infrastructure improvements, and no service payment provided for in section 5709.79 of the Revised Code and received by the county under the resolution shall be used for police or fire equipment.

(b) A resolution adopted under division (B)(1) of this section may authorize the use of service payments provided for in section 5709.79 of the Revised Code for the purpose of housing renovations within the incentive district, provided that the resolution also designates public infrastructure improvements that benefit or serve the district, and that a project within the district places real property in use for commercial or industrial purposes. Service payments may be used to finance or support loans, deferred loans, and grants to persons for the purpose of housing renovations within the district. The resolution shall designate the parcels within the district that are eligible for housing renovations. The resolution shall state separately the amount or the percentages of the expected aggregate service payments that are designated for each public infrastructure improvement and for the purpose of housing renovations.

(4) Except with the approval of the board of education of each city, local, or exempted village school district within the territory of which the incentive district is or will be located, and subject to division (D) of this section, the life of an incentive district shall not exceed ten years, and the percentage of improvements to be exempted shall not exceed seventy-five per cent. With approval of the board of education, the life of a district may be not more than thirty years, and the percentage of improvements to be exempted may be not more than one hundred per cent. The approval of a board of education shall be obtained in the manner provided in division (C) of this section.

(C)(1) Improvements with respect to a parcel may be exempted from taxation under division (A) of this section, and improvements to parcels within an incentive district may be exempted from taxation under division (B) of this section, for up to ten years or, with the approval of the board of education of each city, local, or exempted village school district within which the parcel or district is located, for up to thirty years. The percentage of the improvements exempted from taxation may, with such approval, exceed seventy-five per cent, but shall not exceed one hundred per cent. Not later than forty-five business days prior to adopting a resolution under this section declaring improvements to be a public purpose that is subject to the approval of a board of education under this division, the board of county commissioners shall deliver to the board of education a notice stating its intent to adopt a resolution making that declaration. The notice regarding improvements with respect to a parcel under division (A) of this section shall identify the parcels for which improvements are to be exempted from taxation, provide an estimate of the true value in money of the improvements, specify the period for which the improvements would be exempted from taxation and the percentage of the improvements that would be exempted, and indicate the date on which the board of county commissioners intends to adopt the resolution. The notice regarding improvements to parcels within an incentive district under division (B) of this section shall delineate the boundaries of the district, specifically identify each parcel within the district, identify each anticipated improvement in the district, provide an estimate of the true value in money of each such improvement, specify the life of the district and the percentage of improvements that would be exempted, and indicate the date on which the board of county commissioners intends to adopt the resolution. The board of education, by resolution adopted by a majority of the board, may approve the exemption for the period or for the exemption percentage specified in the notice; may disapprove the exemption for the number of years in excess of ten, may disapprove the exemption for the percentage of the improvements to be exempted in excess of seventy-five per cent, or both; or may approve the exemption on the condition that the board of county commissioners and the board of education negotiate an agreement providing for compensation to the school district equal in value to a percentage of the amount of taxes exempted in the eleventh and subsequent years of the exemption period or, in the case of exemption percentages in excess of seventy-five per cent, compensation equal in value to a percentage of the taxes that would be payable on the portion of the improvements in excess of seventy-five per cent were that portion to be subject to taxation, or other mutually agreeable compensation.

(2) The board of education shall certify its resolution to the board of county commissioners not later than fourteen days prior to the date the board of county commissioners intends to adopt its resolution as indicated in the notice. If the board of education and the board of county commissioners negotiate a mutually acceptable compensation agreement, the resolution of the board of county commissioners may declare the improvements a public purpose for the number of years specified in that resolution or, in the case of exemption percentages in excess of seventy-five per cent, for the exemption percentage specified in the resolution. In either case, if the board of education and the board of county commissioners fail to negotiate a mutually acceptable compensation agreement, the resolution may declare the improvements a public purpose for not more than ten years, and shall not exempt more than seventy-five per cent of the improvements from taxation. If the board of education fails to certify a resolution to the board of county commissioners within the time prescribed by this section, the board of county commissioners thereupon may adopt the resolution and may declare the improvements a public purpose for up to thirty years or, in the case of exemption percentages proposed in excess of seventy-five per cent, for the exemption percentage specified in the resolution. The board of county commissioners may adopt the resolution at any time after the board of education certifies its resolution approving the exemption to the board of county commissioners, or, if the board of education approves the exemption on the condition that a mutually acceptable compensation agreement be negotiated, at any time after the compensation agreement is agreed to by the board of education and the board of county commissioners. If a mutually acceptable compensation agreement is negotiated between the board of county commissioners and the board of education, including agreements for payments in lieu of taxes under section 5709.79 of the Revised Code, the board of county commissioners shall compensate the joint vocational school district within which the parcel or district is located at the same rate and under the same terms received by the city, local, or exempted village school district.

(3) If a board of education has adopted a resolution waiving its right to approve exemptions from taxation under this section and the resolution remains in effect, approval of such exemptions by the board of education is not required under division (C) of this section. If a board of education has adopted a resolution allowing a board of county commissioners to deliver the notice required under division (C) of this section fewer than forty-five business days prior to approval of the resolution by the board of county commissioners, the board of county commissioners shall deliver the notice to the board of education not later than the number of days prior to such approval as prescribed by the board of education in its resolution. If a board of education adopts a resolution waiving its right to approve exemptions or shortening the notification period, the board of education shall certify a copy of the resolution to the board of county commissioners. If the board of education rescinds such a resolution, it shall certify notice of the rescission to the board of county commissioners.

(4) Nothing in division (C) of this section prohibits the board of county commissioners from amending the resolution under section 5709.51 of the Revised Code to extend the term of the exemption.

(D)(1) If a proposed resolution under division (B)(1) of this section exempts improvements with respect to a parcel within an incentive district for more than ten years, or the percentage of the improvement exempted from taxation exceeds seventy-five per cent, not later than forty-five business days prior to adopting the resolution the board of county commissioners shall deliver to the board of township trustees of any township within which the incentive district is or will be located a notice that states its intent to adopt a resolution creating an incentive district. The notice shall include a copy of the proposed resolution, identify the parcels for which improvements are to be exempted from taxation, provide an estimate of the true value in money of the improvements, specify the period of time for which the improvements would be exempted from taxation, specify the percentage of the improvements that would be exempted from taxation, and indicate the date on which the board intends to adopt the resolution.

(2) The board of township trustees, by resolution adopted by a majority of the board, may object to the exemption for the number of years in excess of ten, may object to the exemption for the percentage of the improvement to be exempted in excess of seventy-five per cent, or both. If the board of township trustees objects, the board of township trustees may negotiate a mutually acceptable compensation agreement with the board of county commissioners. In no case shall the compensation provided to the board of township trustees exceed the property taxes forgone due to the exemption. If the board of township trustees objects, and the board of township trustees and the board of county commissioners fail to negotiate a mutually acceptable compensation agreement, the resolution adopted under division (B)(1) of this section shall provide to the board of township trustees compensation in the eleventh and subsequent years of the exemption period equal in value to not more than fifty per cent of the taxes that would be payable to the township or, if the board of township trustee's objection includes an objection to an exemption percentage in excess of seventy-five per cent, compensation equal in value to not more than fifty per cent of the taxes that would be payable to the township on the portion of the improvement in excess of seventy-five per cent, were that portion to be subject to taxation. The board of township trustees shall certify its resolution to the board of county commissioners not later than thirty days after receipt of the notice.

(3) If the board of township trustees does not object or fails to certify a resolution objecting to an exemption within thirty days after receipt of the notice, the board of county commissioners may adopt its resolution, and no compensation shall be provided to the board of township trustees. If the board of township trustees certifies its resolution objecting to the commissioners' resolution, the board of county commissioners may adopt its resolution at any time after a mutually acceptable compensation agreement is agreed to by the board of county commissioners and the board of township trustees. If the board of township trustees certifies a resolution objecting to the commissioners' resolution, the board of county commissioners may adopt its resolution at any time after a mutually acceptable compensation agreement is agreed to by the board of county commissioners and the board of township trustees, or, if no compensation agreement is negotiated, at any time after the board of county commissioners in the proposed resolution to provide compensation to the board of township trustees of fifty per cent of the taxes that would be payable to the township in the eleventh and subsequent years of the exemption period or on the portion of the improvement in excess of seventy-five per cent, were that portion to be subject to taxation.

(E) Service payments in lieu of taxes that are attributable to any amount by which the effective tax rate of either a renewal levy with an increase or a replacement levy exceeds the effective tax rate of the levy renewed or replaced, or that are attributable to an additional levy, for a levy authorized by the voters for any of the following purposes on or after January 1, 2006, and which are provided pursuant to a resolution creating an incentive district under division (B)(1) of this section that is adopted on or after January 1, 2006, shall be distributed to the appropriate taxing authority as required under division (D) of section 5709.79 of the Revised Code in an amount equal to the amount of taxes from that additional levy or from the increase in the effective tax rate of such renewal or replacement levy that would have been payable to that taxing authority from the following levies were it not for the exemption authorized under division (B) of this section:

(1) A tax levied under division (L) of section 5705.19 or section 5705.191 or 5705.222 of the Revised Code for community developmental disabilities programs and services pursuant to Chapter 5126. of the Revised Code;

(2) A tax levied under division (Y) of section 5705.19 of the Revised Code for providing or maintaining senior citizens services or facilities;

(3) A tax levied under section 5705.22 of the Revised Code for county hospitals;

(4) A tax levied by a joint-county district or by a county under section 5705.19, 5705.191, or 5705.221 of the Revised Code for alcohol, drug addiction, and mental health services or facilities;

(5) A tax levied under section 5705.23 of the Revised Code for library purposes;

(6) A tax levied under section 5705.24 of the Revised Code for the support of children services and the placement and care of children;

(7) A tax levied under division (Z) of section 5705.19 of the Revised Code for the provision and maintenance of zoological park services and facilities under section 307.76 of the Revised Code;

(8) A tax levied under section 511.27 or division (H) of section 5705.19 of the Revised Code for the support of township park districts;

(9) A tax levied under division (A), (F), or (H) of section 5705.19 of the Revised Code for parks and recreational purposes of a joint recreation district organized pursuant to division (B) of section 755.14 of the Revised Code;

(10) A tax levied under section 1545.20 or 1545.21 of the Revised Code for park district purposes;

(11) A tax levied under section 5705.191 of the Revised Code for the purpose of making appropriations for public assistance; human or social services; public relief; public welfare; public health and hospitalization; and support of general hospitals;

(12) A tax levied under section 3709.29 of the Revised Code for a general health district program.

(F) An exemption from taxation granted under this section commences with the tax year specified in the resolution so long as the year specified in the resolution commences after the effective date of the resolution. If the resolution specifies a year commencing before the effective date of the resolution or specifies no year whatsoever, the exemption commences with the tax year in which an exempted improvement first appears on the tax list and duplicate of real and public utility property and that commences after the effective date of the resolution. In lieu of stating a specific year, the resolution may provide that the exemption commences in the tax year in which the value of an improvement exceeds a specified amount or in which the construction of one or more improvements is completed, provided that such tax year commences after the effective date of the resolution. With respect to the exemption of improvements to parcels under division (A) of this section, the resolution may allow for the exemption to commence in different tax years on a parcel-by-parcel basis, with a separate exemption term specified for each parcel.

Except as otherwise provided in this division, the exemption ends on the date specified in the resolution as the date the improvement ceases to be a public purpose or the incentive district expires, or ends on the date on which the county can no longer require annual service payments in lieu of taxes under section 5709.79 of the Revised Code, whichever occurs first. The exemption of an improvement with respect to a parcel or within an incentive district may end on a later date, as specified in the resolution, if the board of commissioners and the board of education of the city, local, or exempted village school district within which the parcel or district is located have entered into a compensation agreement under section 5709.82 of the Revised Code with respect to the improvement, and the board of education has approved the term of the exemption under division (C)(1) of this section, but in no case shall the improvement be exempted from taxation for more than thirty years. Exemptions shall be claimed and allowed in the same or a similar manner as in the case of other real property exemptions. If an exemption status changes during a tax year, the procedure for the apportionment of the taxes for that year is the same as in the case of other changes in tax exemption status during the year.

(G) If the board of county commissioners is not required by this section to notify the board of education of the board of county commissioners' intent to declare improvements to be a public purpose, the board of county commissioners shall comply with the notice requirements imposed under section 5709.83 of the Revised Code before taking formal action to adopt the resolution making that declaration, unless the board of education has adopted a resolution under that section waiving its right to receive such a notice.

(H) The county, not later than fifteen days after the adoption of a resolution under this section, shall submit to the director of development a copy of the resolution. On or before the thirty-first day of March of each year, the county shall submit a status report to the director. The report shall indicate, in the manner prescribed by the director, the progress of the project during each year that an exemption remains in effect, including a summary of the receipts from service payments in lieu of taxes; expenditures of money from the fund created under section 5709.80 of the Revised Code; a description of the public infrastructure improvements and housing renovations financed with such expenditures; and a quantitative summary of changes in employment and private investment resulting from each project.

(I) Nothing in this section shall be construed to prohibit a board of county commissioners from declaring to be a public purpose improvements with respect to more than one parcel.

(J) If a parcel is located in a new community district in which the new community authority imposes a community development charge on the basis of rentals received from leases of real property as described in division (L)(2) of section 349.01 of the Revised Code, the parcel may not be exempted from taxation under this section.

Last updated September 12, 2023 at 10:51 AM

Section 5709.79 | Annual service payments in lieu of taxes.

• Effective: March 30, 2006
• Latest Legislation: House Bill 530 - 126th General Assembly

(A) A board of county commissioners that adopts a resolution under section 5709.78 of the Revised Code shall in the resolution require that the owner of the improvement make annual service payments in lieu of taxes to the county treasurer on or before the final dates for payment of real property taxes. Each such payment shall be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and payable against the improvement if its value were not exempt from taxation. If any reduction in the levies otherwise applicable to the improvement is made by the county budget commission under section 5705.31 of the Revised Code, the amount of the service payment in lieu of taxes shall be calculated as if the reduction in levies had not been made.

(B) The county shall not require the owner to make annual service payments in lieu of taxes pursuant to this section after the date on which one of the following occurs:

(1) If bonds or notes were not issued under section 307.082 or 5709.81 of the Revised Code for any public infrastructure improvements benefiting the parcel on which the improvement is located, or for any housing renovations within an incentive district, and if service payments were not pledged pursuant to division (B) of section 5709.81 of the Revised Code, the date the county has collected sufficient money in the applicable account of the redevelopment tax equivalent fund to pay the cost of constructing or repairing the public infrastructure improvements designated in, or the housing renovations authorized by, the resolution adopted under section 5709.78 of the Revised Code;

(2) If service payments were pledged under division (B) of section 5709.81 of the Revised Code to secure payment of any obligation issued to finance the public infrastructure improvement and housing renovations, the date the purposes for which the payments were pledged are paid in full;

(3) If bonds or notes were issued under section 307.082 or 5709.81 of the Revised Code, the date the interest on and principal of such bonds and notes have been paid in full.

(C) Money collected as service payments in lieu of taxes shall be distributed at the same time and in the same manner as real property tax payments. However, subject to division (D) of this section or section 5709.914 of the Revised Code, the entire amount so collected shall be distributed to the county in which the parcel is located. The county treasurer shall maintain a record of the service payments in lieu of taxes made for each parcel. If a parcel upon which moneys are collected as service payments in lieu of taxes is annexed to a municipal corporation, the service payments shall continue to be collected and distributed to the county until the date described in division (B)(1), (2), or (3) of this section.

(D) The county treasurer shall distribute to the appropriate taxing authorities the portion of the annual service payments in lieu of taxes that represents payments required under division (E) of section 5709.78 of the Revised Code.

(E) Nothing in this section or section 5709.78 of the Revised Code affects the taxes levied against that portion of the value of any parcel that is not exempt from taxation.

Section 5709.80 | Redevelopment tax equivalent fund.

• Effective: March 27, 2020
• Latest Legislation: House Bill 197 - 133rd General Assembly

(A) The board of county commissioners of a county that receives service payments in lieu of taxes under section 5709.79 of the Revised Code shall establish a redevelopment tax equivalent fund into which those payments shall be deposited. Separate accounts shall be established in the fund for each resolution adopted by the board of county commissioners under section 5709.78 of the Revised Code. If the board of county commissioners has adopted a resolution under division (B) of that section, the county shall establish an account for each incentive district created in that resolution. If a resolution adopted under division (B) of section 5709.78 of the Revised Code also authorizes the use of service payments for housing renovations within the incentive district, the county shall establish separate accounts for the service payments designated for public infrastructure improvements and for the service payments authorized for the purpose of housing renovations.

(B) Moneys deposited into each account of the fund shall be used by the county to pay the cost of constructing or repairing the public infrastructure improvements designated in, or the housing renovations authorized by, the resolution, or for each incentive district for which the account is established, to pay the interest on and principal of bonds or notes issued under division (B) of section 307.082 or division (A) of section 5709.81 of the Revised Code, or for the purposes pledged under division (B) of section 5709.81 of the Revised Code. Money in an account shall not be used to finance or support housing renovations that take place after the incentive district has expired.

(C)(1)(a) The board of county commissioners may distribute money in an account to any school district in which the exempt property is located in an amount not to exceed the amount of real property taxes that such school district would have received from the improvement if it were not exempt from taxation. The resolution under which an account is established shall set forth the percentage of such maximum amount that will be distributed to any affected school district.

(b) A board of county commissioners also may distribute money in such an account as follows:

(i) To a board of township trustees or legislative authority of a municipal corporation, as applicable, in the amount that is owed to the board of township trustees or legislative authority pursuant to division (D) of section 5709.78 of the Revised Code;

(ii) To a township in accordance with section 5709.914 of the Revised Code.

(2) Money from an account in the redevelopment tax equivalent fund may be distributed under division (C)(1)(b) of this section, regardless of the date a resolution was adopted under section 5709.78 of the Revised Code that prompted the establishment of the account, even if the resolution was adopted prior to March 30, 2006.

(D) An account dissolves upon fulfillment of the purposes for which money in the account may be used. An incidental surplus remaining in an account upon its dissolution shall be transferred to the general fund of the county.

Section 5709.81 | County bonds or notes to finance public infrastructure improvement.

• Effective: December 13, 2001
• Latest Legislation: House Bill 405 - 124th General Assembly

(A) Upon determination by the board of county commissioners that such an issuance will be in the county's best interest, the board may, in the resolution adopted under section 5709.78 of the Revised Code, authorize the issuance of revenue bonds or notes to refund any general obligation bonds or notes, any mortgage revenue bonds or notes, or any revenue bonds issued prior to the effective date of the resolution to finance any public infrastructure improvement designated in, or the housing renovations authorized by, the resolution.

The resolution shall pledge only the funds of the account of the county redevelopment tax equivalent fund established for such public infrastructure improvements and housing renovations, to pay the interest on and principal of the bonds or notes issued pursuant to the resolution. The resolution shall specify the maturity date or dates, the interest payable in accordance with section 9.95 of the Revised Code, and such other terms to be included in the bonds or notes as are necessary for their issuance. The bonds and notes are not subject to Chapter 133. of the Revised Code.

Any bond or note issued under this division shall be deemed to be issued for the same purpose as the bond or note that it is being issued to refund. The proceeds of any bond or note issued under this division shall be used as determined by the board of county commissioners to pay the principal amount of the bond or note being refunded, any redemption premium, and any interest to redemption or maturity, and any expenses related to the outstanding obligations considered necessary by the board of county commissioners for the issuance of the bond or note.

Any bond or note issued to refund any other bond or note under this division may be issued whether or not such refunded bond or note was issued subject to call or redemption prior to maturity.

The authority granted by this division is in addition to and an alternative for, but not a limitation upon, other authorizations granted by or pursuant to law or the constitution for the same or similar purposes.

(B) In lieu of issuing bonds or notes under division (A) of this section, the board of county commissioners may, in a resolution adopted under section 5709.78 of the Revised Code, pledge the service payments collected under section 5709.79 of the Revised Code to secure payment of any obligation of the county issued to finance any public infrastructure improvements designated in the resolution.

Section 5709.82 | Compensating school district for revenues lost due to tax exemptions.

• Effective: April 3, 2023
• Latest Legislation: Senate Bill 33 - 134th General Assembly

(A) As used in this section:

(1) "New employee" means both of the following:

(a) Persons employed in the construction of real property exempted from taxation under the chapters or sections of the Revised Code enumerated in division (B) of this section;

(b) Persons not described by division (A)(1)(a) of this section who are first employed at the site of such property and who within the two previous years have not been subject, prior to being employed at that site, to income taxation by the municipal corporation within whose territory the site is located on income derived from employment for the person's current employer. "New employee" does not include any person who replaces a person who is not a new employee under division (A)(1) of this section.

(2) "Infrastructure costs" means costs incurred by a municipal corporation in a calendar year to acquire, construct, reconstruct, improve, plan, or equip real or tangible personal property that directly benefits or will directly benefit the exempted property. If the municipal corporation finances the acquisition, construction, reconstruction, improvement, planning, or equipping of real or tangible personal property that directly benefits the exempted property by issuing debt, "infrastructure costs" means the annual debt charges incurred by the municipal corporation from the issuance of such debt. Real or tangible personal property directly benefits exempted property only if the exempted property places or will place direct, additional demand on the real or tangible personal property for which such costs were or will be incurred.

(3) "Taxing unit" has the same meaning as in division (H) of section 5705.01 of the Revised Code.

(B)(1) Except as otherwise provided under division (C) of this section, the legislative authority of any political subdivision that has acted under the authority of Chapter 725. or 1728., sections 3735.65 to 3735.70, or section 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.632, 5709.73, 5709.78, 5709.84, or 5709.88 of the Revised Code to grant an exemption from taxation for real or tangible personal property may negotiate with the board of education of each city, local, exempted village, or joint vocational school district or other taxing unit within the territory of which the exempted property is located, and enter into an agreement whereby the school district or taxing unit is compensated for tax revenue foregone by the school district or taxing unit as a result of the exemption. Except as otherwise provided in division (B)(1) of this section, if a political subdivision enters into more than one agreement under this section with respect to a tax exemption, the political subdivision shall provide to each school district or taxing unit with which it contracts the same percentage of tax revenue foregone by the school district or taxing unit, which may be based on a good faith projection made at the time the exemption is granted. Such percentage shall be calculated on the basis of amounts paid by the political subdivision and any amounts paid by an owner under division (B)(2) of this section. A political subdivision may provide a school district or other taxing unit with a smaller percentage of foregone tax revenue than that provided to other school districts or taxing units only if the school district or taxing unit expressly consents in the agreement to receiving a smaller percentage. If a subdivision has acted under the authority of section 3735.671, 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.632, 5709.73, or 5709.78 of the Revised Code and enters into a compensation agreement with a city, local, or exempted village school district, the subdivision shall provide compensation to the joint vocational school district within the territory of which the exempted property is located at the same rate and under the same terms as received by the city, local, or exempted village school district.

(2) An owner of property exempted from taxation under the authority described in division (B)(1) of this section may, by becoming a party to an agreement described in division (B)(1) of this section or by entering into a separate agreement with a school district or other taxing unit, agree to compensate the school district or taxing unit by paying cash or by providing property or services by gift, loan, or otherwise. If the owner's property is exempted under the authority of section 3735.671, 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.632, 5709.73, or 5709.78 of the Revised Code and the owner enters into a compensation agreement with a city, local, or exempted village school district, the owner shall provide compensation to the joint vocational school district within the territory of which the owner's property is located at the same rate and under the same terms as received by the city, local, or exempted village school district.

(C) This division does not apply to the following:

(1) The legislative authority of a municipal corporation that has acted under the authority of division (H) of section 715.70 or division (U) of section 715.72 of the Revised Code to consent to the granting of an exemption from taxation for real or tangible personal property in a joint economic development district.

(2) The legislative authority of a municipal corporation that has specified in an ordinance adopted under section 5709.40, 5709.41, or 5709.45 of the Revised Code that payments in lieu of taxes provided for under section 5709.42 or 5709.46 of the Revised Code shall be paid to the city, local, or exempted village school district in which the improvements are located in the amount of taxes that would have been payable to the school district if the improvements had not been exempted from taxation, as directed in the ordinance.

If the legislative authority of any municipal corporation has acted under the authority of Chapter 725. or 1728. or section 3735.671, 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.632, or 5709.88, or a housing officer under section 3735.67 of the Revised Code, to grant or consent to the granting of an exemption from taxation for real or tangible personal property on or after July 1, 1994, the municipal corporation imposes a tax on incomes, and the payroll of new employees resulting from the exercise of that authority equals or exceeds one million dollars, or two million dollars, as adjusted under division (E) of this section, in the case of the authority exercised under section 3735.67 or 3735.671 of the Revised Code, in any tax year for which such property is exempted, the legislative authority and the board of education of each city, local, or exempted village school district within the territory of which the exempted property is located shall attempt to negotiate an agreement providing for compensation to the school district for all or a portion of the tax revenue the school district would have received had the property not been exempted from taxation. The agreement may include as a party the owner of the property exempted or to be exempted from taxation and may include provisions obligating the owner to compensate the school district by paying cash or providing property or services by gift, loan, or otherwise. Such an obligation is enforceable by the board of education of the school district pursuant to the terms of the agreement.

If the legislative authority and board of education fail to negotiate an agreement that is mutually acceptable within six months of formal approval by the legislative authority of the instrument granting the exemption, the legislative authority shall compensate the school district in the amount and manner prescribed by division (D) of this section.

(D) Annually, the legislative authority of a municipal corporation subject to this division shall pay to the city, local, or exempted village school district within the territory of which the exempted property is located an amount equal to fifty per cent of the difference between the amount of taxes levied and collected by the municipal corporation on the incomes of new employees in the calendar year ending on the day the payment is required to be made, and the amount of any infrastructure costs incurred in that calendar year. For purposes of such computation, the amount of infrastructure costs shall not exceed thirty-five per cent of the amount of those taxes unless the board of education of the school district, by resolution adopted by a majority of the board, approves an amount in excess of that percentage. If the amount of those taxes or infrastructure costs must be estimated at the time the payment is made, payments in subsequent years shall be adjusted to compensate for any departure of those estimates from the actual amount of those taxes.

A municipal corporation required to make a payment under this section shall make the payment from its general fund or a special fund established for the purpose. The payment is payable on the thirty-first day of December of the tax year for or in which the exemption from taxation commences and on that day for each subsequent tax year property is exempted and the legislative authority and board fail to negotiate an acceptable agreement under division (C) of this section.

(E)(1) The director of development shall adjust, in September of each year, the payroll threshold described in division (C)(2) of this section applicable to the exercise of authority under section 3735.67 or 3735.671 of the Revised Code by completing the following computations:

(a) Determine the percentage increase in the gross domestic product deflator determined by the bureau of economic analysis of the United States department of commerce from the first day of January of the preceding calendar year to the last day of December of the preceding calendar year;

(b) Multiply that percentage increase by the threshold applicable for the current year;

(c) Add the resulting product to the threshold applicable for the current year;

(d) Round the resulting sum to the nearest one thousand dollars.

(2) The director shall certify the amount of the adjustment under division (E)(1) of this section to each legislative authority of a municipal corporation and housing officer designated by a municipal corporation exercising authority under section 3735.67 or 3735.671 of the Revised Code not later than the first day of December of the year the director computes the adjustment. The certified amount applies to the ensuing calendar year and each calendar year thereafter until the director makes a new adjustment. The director shall not calculate a new adjustment in any year in which the resulting threshold amount from the adjustment would be less than the threshold for the current year.

Last updated February 8, 2023 at 3:30 PM

Section 5709.83 | Notifying school district of proposed tax exemption.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) Except as otherwise provided in division (B) or (C) of this section, prior to taking formal action to adopt or enter into any instrument granting a tax exemption under section 725.02, 1728.06, 5709.40, 5709.41, 5709.45, 5709.48, 5709.62, 5709.63, 5709.632, 5709.73, 5709.78, 5709.84, or 5709.88 of the Revised Code or formally approving an agreement under section 3735.671 of the Revised Code, or prior to forwarding an application for a tax exemption for residential property under section 3735.67 of the Revised Code to the county auditor, the legislative authority of the political subdivision, governing board of a regional transportation improvement project, or housing officer shall notify the board of education of each city, local, exempted village, or joint vocational school district in which the proposed tax-exempted property is located. The notice shall include a copy of the instrument or application. The notice shall be delivered not later than fourteen days prior to the day the legislative authority or governing board takes formal action to adopt or enter into the instrument, or not later than fourteen days prior to the day the housing officer forwards the application to the county auditor. If the board of education comments on the instrument or application to the legislative authority, governing board, or housing officer, the legislative authority, governing board, or housing officer shall consider the comments. If the board of education of the city, local, exempted village, or joint vocational school district so requests, the legislative authority, governing board, or the housing officer shall meet with a representative designated by the board of education to discuss the terms of the instrument or application.

(B) The notice otherwise required to be provided to boards of education under division (A) of this section is not required if the board has adopted a resolution waiving its right to receive such notices, and that resolution remains in effect. If a board of education adopts such a resolution, the board shall cause a copy of the resolution to be certified to the legislative authority or governing board. If the board of education rescinds such a resolution, it shall certify notice of the rescission to the legislative authority or governing board. A board of education may adopt such a resolution with respect to any one or more counties, townships, or municipal corporations situated in whole or in part within the school district.

(C) If a legislative authority or governing board is required to provide notice to a city, local, or exempted village school district of its intent to adopt or enter into any instrument granting a tax exemption as required by section 3735.671, 5709.40, 5709.41, 5709.45, 5709.48, 5709.62, 5709.63, 5709.632, 5709.73, or 5709.78 of the Revised Code, the legislative authority, before adopting a resolution or ordinance or entering into an agreement under that section, shall notify the board of education of each joint vocational school district in which the property to be exempted is located using the same time requirements for the notice that applies to notices to city, local, and exempted village school districts. The content of the notice and procedures for responding to the notice are the same as required in division (A) of this section.

Last updated September 14, 2023 at 10:08 AM

Section 5709.831 | Reimbursing local taxing authorities.

• Effective: August 5, 2016
• Latest Legislation: House Bill 233 - 131st General Assembly

(A) As used in this section:

(1) "Exempted improvements" means improvements exempted from taxation under section 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code.

(2) "Political subdivision" means the county, township, or municipal corporation granting an exemption from taxation under section 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code.

(B) The legislative authority of a political subdivision that grants an exemption from taxation for an improvement under section 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code may require the owner of the improvement to reimburse the local taxing authorities within whose taxing jurisdiction the exempted improvement is located for the amount of real property taxes that would have been payable to the taxing authorities had the improvement not been exempted from taxation. If the legislative authority requires the owner of the exempted improvements to make payments in lieu of taxes, the legislative authority may require such reimbursement only to the extent that the owner failed to make those payments as required. The legislative authority may secure any reimbursement authorized by this section by a lien on the exempted property, which shall attach, and may be perfected, collected, and enforced, in the same manner as a mortgage lien on real property, and which shall otherwise have the same force and effect as a mortgage lien on real property.

Section 5709.832 | Nondiscriminatory hiring practices in operations of business granted tax exemption.

• Effective: August 5, 2016
• Latest Legislation: House Bill 233 - 131st General Assembly

The legislative authority of a county, township, or municipal corporation that grants an exemption from taxation under Chapter 725. or 1728. or section 3735.67, 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.632, 5709.73, or 5709.78 of the Revised Code shall develop policies to ensure that the recipient of the exemption practices nondiscriminatory hiring in its operations. As used in this section, "nondiscriminatory hiring" means that no individual may be denied employment solely on the basis of race, religion, sex, disability, color, national origin, or ancestry.

Section 5709.84 | Exemption for local railroad operation.

• Effective: December 22, 1992
• Latest Legislation: House Bill 904 - 119th General Assembly

(A) As used in this section:

(1) "Local railroad operations" means the provision of railroad service by a qualified railroad company within the territorial jurisdiction of a county, township, or municipal corporation, which railroad service replaces railroad service that was discontinued in the territorial jurisdiction of the county, township, or municipal corporation on or after January 1, 1980.

(2) "Qualified railroad company" means a railroad company as defined in division (D)(9) of section 5727.01 of the Revised Code that is formed by a person or governmental entity to provide local railroad operations.

(B) The legislative authority of a county, township, or municipal corporation, by resolution or ordinance, may declare any of the following as being used for a public purpose:

(1) Real and tangible personal property owned by the county, township, or municipal corporation that is leased or otherwise made available to a qualified railroad company for use in local railroad operations;

(2) Real and tangible personal property owned by any other public or any private entity that is leased or otherwise made available to a qualified railroad company for use in local railroad operations;

(3) Real and tangible personal property owned by a qualified railroad company that is used in local railroad operations.

Real and tangible personal property declared as being used for a public purpose under division (B)(1), (2), or (3) of this section is exempt from taxation for a period, not to exceed ten years, specified in the resolution or ordinance declaring the property as being used for a public purpose and commencing on the effective date of the resolution or ordinance. The exemption applies to the property only in the proportion it is used in local railroad operations within the territorial jurisdiction of the county, township, or municipal corporation that declared it as being used for a public purpose.

The legislative authority shall not take formal action to adopt a resolution or an ordinance that grants a tax exemption under this section until section 5709.83 of the Revised Code has been complied with. Upon adopting the resolution or ordinance, the legislative authority shall transmit a certified copy to the tax commissioner, the county auditor, and the county treasurer.

(C) At any time during the period of an exemption, the legislative authority, without prior announcement and at such times as it considers appropriate or necessary, may inspect the real and tangible personal property so exempted and the financial records and business activities of the qualified railroad company receiving the exemption to verify that the property so exempted is in use for local railroad operations. A qualified railroad company receiving an exemption shall cooperate with the legislative authority in an inspection, and shall provide any information relevant to the exemption that is requested by the legislative authority.

If the legislative authority determines that exempted property is not in use for local railroad operations, or if a qualified railroad company interferes with an inspection or fails to answer a request for information, the legislative authority, by resolution or ordinance, may suspend its declaration under division (B) of this section until it verifies that the qualified railroad company is using the property for local railroad operations, or may revoke the declaration. The legislative authority shall transmit a certified copy of a resolution or ordinance suspending or revoking its declaration to the tax commissioner, the county auditor, and the county treasurer. The county auditor and county treasurer shall place the property on the tax list and duplicate for the tax year in which the resolution or ordinance of suspension or revocation was adopted. The qualified railroad company may appeal the suspension or revocation to the court of common pleas in the county in which the exemption is granted.

Section 5709.85 | Tax incentive review council.

• Effective: April 6, 2023
• Latest Legislation: Senate Bill 33 (GA 134), House Bill 501 (GA 134)

(A) The legislative authority of a county, township, or municipal corporation that grants an exemption from taxation under Chapter 725. or 1728. or under section 3735.67, 5709.28, 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.632, 5709.73, or 5709.78 of the Revised Code shall create a tax incentive review council. The council shall consist of the following members:

(1) In the case of a municipal corporation eligible to designate a zone under section 5709.62 or 5709.632 of the Revised Code, the chief executive officer or that officer's designee; a member of the legislative authority of the municipal corporation, appointed by the president of the legislative authority or, if the chief executive officer of the municipal corporation is the president, appointed by the president pro tempore of the legislative authority; the county auditor or the county auditor's designee; the chief financial officer of the municipal corporation or that officer's designee; an individual appointed by the board of education of each city, local, exempted village, and joint vocational school district to which the instrument granting the exemption applies; and two members of the public appointed by the chief executive officer of the municipal corporation with the concurrence of the legislative authority. At least four members of the council shall be residents of the municipal corporation, and at least one of the two public members appointed by the chief executive officer shall be a minority. As used in division (A)(1) of this section, a "minority" is an individual who is African-American, Hispanic, or Native American.

(2) In the case of a county or a municipal corporation that is not eligible to designate a zone under section 5709.62 or 5709.632 of the Revised Code, three members appointed by the board of county commissioners; two members from each municipal corporation to which the instrument granting the tax exemption applies, appointed by the chief executive officer with the concurrence of the legislative authority of the respective municipal corporations; two members of each township to which the instrument or agreement granting the tax exemption applies, appointed by the board of township trustees of the respective townships; the county auditor or the county auditor's designee; and an individual appointed by the board of education of each city, local, exempted village, and joint vocational school district to which the instrument or agreement granting the tax exemption applies. At least two members of the council shall be residents of the municipal corporations or townships to which the instrument or agreement granting the tax exemption applies.

(3) In the case of a township, the board of township trustees; the county auditor or the county auditor's designee; and an individual appointed by the board of education of each city, local, exempted village, and joint vocational school district to which the instrument or agreement granting the exemption applies.

(B) The county auditor or the county auditor's designee shall serve as the chairperson of the council. The council shall meet at the call of the chairperson. At the first meeting of the council, the council shall select a vice-chairperson. Attendance by a majority of the members of the council constitutes a quorum to conduct the business of the council.

(C)(1) Annually, the tax incentive review council shall review all agreements granting exemptions from property taxation under Chapter 725. or 1728. or under section 3735.671, 5709.28, 5709.62, 5709.63, or 5709.632 of the Revised Code, and any performance or audit reports required to be submitted pursuant to those agreements. The review shall include agreements granting such exemptions that were entered into prior to July 22, 1994, that continue to be in force and applicable to the current year's property taxes.

With respect to each agreement, other than an agreement entered into under section 5709.28 of the Revised Code, the council shall determine whether the owner of the exempted property has complied with the agreement, and may take into consideration any fluctuations in the business cycle unique to the owner's business.

With respect to an agreement entered into under section 5709.28 of the Revised Code, the council shall consist of the members described in division (A)(2) of this section and shall determine whether the agreement complies with the requirements of section 5709.28 of the Revised Code and whether a withdrawal, removal, or conversion of land from an agricultural security area established under Chapter 931. of the Revised Code has occurred in a manner that makes the exempted property no longer eligible for the exemption.

On the basis of the determinations, on or before the first day of September of each year, the council shall submit to the legislative authority written recommendations for continuation, modification, or cancellation of each agreement.

(2) Annually, the tax incentive review council shall review all exemptions from property taxation resulting from the declaration of public purpose improvements pursuant to section 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code. The review shall include such exemptions that were granted prior to July 22, 1994, that continue to be in force and applicable to the current year's property taxes. With respect to each improvement for which an exemption is granted, the council shall determine the increase in the true value of parcels of real property on which improvements have been undertaken as a result of the exemption; the value of improvements exempted from taxation as a result of the exemption; and the number of new employees or employees retained on the site of the improvement as a result of the exemption.

Upon the request of a tax incentive review council, the county auditor, the housing officer appointed pursuant to section 3735.66 of the Revised Code, the owner of a new or remodeled structure or improvement, and the legislative authority of the county, township, or municipal corporation granting the exemption shall supply the council with any information reasonably necessary for the council to make the determinations required under division (C) of this section, including returns or reports filed pursuant to sections 5711.02, 5711.13, and 5727.08 of the Revised Code.

(D) Annually, the tax incentive review council shall review the compliance of each recipient of a tax exemption under Chapter 725. or 1728. or section 3735.67, 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.632, 5709.73, or 5709.78 of the Revised Code with the nondiscriminatory hiring policies developed by the county, township, or municipal corporation under section 5709.832 of the Revised Code. Upon the request of the council, the recipient shall provide the council any information necessary to perform its review. On the basis of its review, the council may submit to the legislative authority written recommendations for enhancing compliance with the nondiscriminatory hiring policies.

(E) A legislative authority that receives from a tax incentive review council written recommendations under division (C)(1) or (D) of this section shall, within sixty days after receipt, hold a meeting and vote to accept, reject, or modify all or any portion of the recommendations.

(F) A tax incentive review council may request from the recipient of a tax exemption under Chapter 725. or 1728. or section 3735.67, 5709.28, 5709.40, 5709.41, 5709.45, 5709.62, 5709.63, 5709.632, 5709.73, or 5709.78 of the Revised Code any information reasonably necessary for the council to perform its review under this section. The request shall be in writing and shall be sent to the recipient by certified mail. Within ten days after receipt of the request, the recipient shall provide to the council the information requested.

The Legislative Service Commission presents the text of this section as a composite of the section as amended by multiple acts of the General Assembly. This presentation recognizes the principle stated in R.C. 1.52(B) that amendments are to be harmonized if reasonably capable of simultaneous operation.

Last updated January 23, 2023 at 12:09 PM

Section 5709.86 | Exemption for abandoned school property.

• Effective: July 22, 1994
• Latest Legislation: Senate Bill 19 - 120th General Assembly

(A) As used in this section:

(1) "Abandoned school property" means improvements to a parcel of land, the parcel on which such improvements are situated, and adjacent parcels owned, or owned prior to a declaration under this section, by a school district, county, township, or municipal corporation that have been used for school purposes for not less than ten years but that are not currently used for school purposes.

(2) "Qualified tangible personal property" means tangible personal property used in business in or upon abandoned school property by a person to which abandoned school property is sold or leased.

(3) "Legislative authority" means the board of education of a school district, the board of commissioners of a county, the board of trustees of a township, or the legislative authority of a municipal corporation that owns, or owned prior to a declaration under this section, abandoned school property.

(B) A legislative authority, by resolution or ordinance adopted by a majority of the membership thereof, may declare abandoned school property or qualified tangible personal property, or both, as being used for the public purpose of restoring unused public property to productive use. The legislative authority thereafter may sell or lease such abandoned school property to any person. Abandoned school property and qualified tangible personal property declared to be used for a public purpose under this section are exempted from taxation for the number of years specified in the resolution or ordinance, not to exceed ten years from the day the property is purchased from the legislative authority, or, if the property is leased by the legislative authority, from the day the lease agreement takes effect. If only a portion of abandoned school property is purchased or leased, the exemption from taxation for the portion not purchased or leased does not commence until the day that portion is purchased or the day the lease agreement for that portion of the property takes effect.

The legislative authority making a declaration under this section shall certify a copy of the resolution or ordinance to the tax commissioner and to the county auditor of each county within which the abandoned school property is situated. The legislative authority or the person purchasing abandoned school property shall file applications for exemption for the abandoned school property and qualified tangible personal property in the manner prescribed by law.

Section 5709.87 | Exempting increase in assessed value of realty cleaned of contamination.

• Effective: April 6, 2017
• Latest Legislation: House Bill 463 - 131st General Assembly

(A) As used in this section:

(1) "Improvement," "building," "fixture," and "structure" have the same meanings as in section 5701.02 of the Revised Code.

(2) "Property," "remedy," and "remedial activities" have the same meanings as in section 3746.01 of the Revised Code.

(B) The director of environmental protection, after issuing a covenant not to sue for property under section 3746.12 of the Revised Code and determining that remedies or remedial activities have commenced or been completed at that property to the satisfaction of the director, shall certify to the tax commissioner and to the director of development services that such a covenant has been issued, that such remedies or remedial activities have occurred at that property, and the date on which those remedial activities began. The certification shall be in such form as is agreed upon by the directors of environmental protection and development services and the tax commissioner and shall include a description of the property in sufficient detail for the tax commissioner and director of development services to determine the boundaries of the property entitled to exemption from taxation under this section.

(C)(1)(a) Upon receipt by the tax commissioner of a certification for property under division (B) of this section, the commissioner shall issue an order granting an exemption from real property taxation of the increase in the assessed value of land constituting property that is described in the certification and of the increase in the assessed value of improvements, buildings, fixtures, and structures that are situated on that land on the tax lien date of the year in which the remedial activities began. For each tax year of the exemption allowed under this section, this increase in assessed value shall equal the amount by which the assessed value of that land or those improvements, buildings, fixtures, or structures on the tax lien date of that year as indicated on the tax list for that year exceeds the assessed value of that land or those improvements, buildings, fixtures, or structures on the tax lien date of the year in which the remedial activities began as indicated on the tax list for that year. The exemption shall commence on the first day of the tax year including the day on which the order is issued and shall end on the last day of the tenth tax year after issuance of the order. The order shall include a description of the property and the tax years for which the property is to be exempted from taxation. The commissioner shall send copies of the exemption order to the owner of record of the property to which the exemption applies and to the county auditor of each county in which any portion of that property is located.

(b) Within sixty days after receiving the commissioner's order, the owner of record of the property may notify the commissioner in writing that the owner does not want the exemption from real property taxation provided under division (C)(1) of this section to apply. Upon receiving such a notification from the property owner of record, the commissioner shall issue a subsequent order rescinding the previously granted exemption.

(2) The director of development services shall maintain a record of certifications received under this section for purposes of section 5709.88 of the Revised Code.

(D) Any sale or other transfer of the property does not affect an exemption granted under division (C) of this section. The exemption shall continue in effect thereafter for the full period stated in the exemption order.

(E) If at any time the director revokes a covenant not to sue under Chapter 3746. of the Revised Code and rules adopted under it for property concerning which the commissioner has issued an exemption order under division (C) of this section, the director shall so notify the commissioner and the legislative authority of the municipal corporation and county in which the property is located. The commissioner immediately shall rescind the exemption order and shall so notify the owner of record of the property and the county auditor of each county in which any portion of the property is located.

Upon revocation of the covenant not to sue, the owner of record shall pay the amount of taxes that would have been charged against the property had the property not been exempted from taxation for the period beginning with commencement of the exemption and ending with the date of revocation of the covenant not to sue. The county auditor shall return the property to the tax list and enter on the tax list the amount so payable as current taxes charged against the property. Taxes required to be paid pursuant to this section are payable in full on the first succeeding day on which the first one-half of taxes is required to be paid under section 323.12 of the Revised Code. If such taxes are not paid in full when due, a penalty shall be charged, and interest shall accrue on those taxes, as provided in section 323.121 of the Revised Code. In cases of underpayment or nonpayment, the deficiency shall be collected as otherwise provided for the collection of delinquent real property taxes.

Section 5709.88 | Tax incentives to promote employment and improve economic climate.

• Effective: September 28, 1994
• Latest Legislation: Senate Bill 221 - 120th General Assembly

(A) As used in sections 5709.88 through 5709.883 of the Revised Code:

(1) "Enterprise," "expand," "renovate," "project," "project site," "position," "full-time employee," "first used in business," and "making retail sales" have the same meanings as in section 5709.61 of the Revised Code.

(2) "Property," "remedy," and "remedial activities" have the same meanings as in section 3746.01 of the Revised Code.

(3) "Facility" means an enterprise's place of business, including land constituting property that is described in a certification under division (B) of section 5709.87 of the Revised Code, and buildings, improvements, fixtures, structures, machinery, equipment, and other materials, except inventory, used in business and situated on such land. "Facility" does not include any portion of an enterprise's place of business used primarily for making retail sales unless the place of business is located in an impacted city as defined in section 1728.01 of the Revised Code.

(4) "New employee" means a full-time employee first employed by an enterprise at a facility that is a project site after the enterprise enters into an agreement under division (D) of this section.

(5) "Remediate" means to make expenditures for remedies or remedial activities equal to at least ten per cent of the true value in money of the land, buildings, improvements, structures, and fixtures constituting a facility as determined for purposes of property taxation immediately prior to formal approval of an agreement under division (D) of this section.

(6) "Occupy" means to make expenditures to alter or repair a vacant facility equal to at least twenty per cent of the market value of the facility prior to such expenditures, as determined for the purposes of local property taxation.

(7) "Vacant facility" means a facility that has been vacant for at least ninety days immediately preceding the date on which an agreement is entered into under division (D) of this section.

(B) The legislative authority of any county or municipal corporation within which is located property that is the subject of a certification under division (B) of section 5709.87 of the Revised Code may enter into an agreement with an enterprise under division (D) of this section, provided that the legislative authority of a county may enter into such agreements with respect only to property located within the unincorporated territory of the county. Prior to entering into such an agreement, the legislative authority shall petition the director of development for the director's confirmation that the property is the subject of such a certification, and the director, within thirty days after receipt of such a petition, shall confirm whether such a certification has been issued. The petition shall be accompanied by a description of the property in the form and manner prescribed by the director.

(C) Any enterprise that wishes to enter into an agreement with a legislative authority under division (D) of this section shall submit a proposal to the legislative authority on a form prescribed by the director of development together with the application fee established under section 5709.882 of the Revised Code. The form shall require the following information:

(1) An estimate of the number of new employees whom the enterprise intends to hire, or of the number of employees whom the enterprise intends to retain, at a facility that is a project site, and an estimate of the amount of payroll of the enterprise attributable to these employees;

(2) An estimate of the amount to be invested by the enterprise to establish, expand, renovate, or occupy a facility, including investment in new buildings, additions or improvements to existing buildings, machinery, equipment, furniture, fixtures, and inventory;

(3) A listing of the enterprise's current investment, if any, in a facility as of the date of the proposal's submission.

The enterprise shall review and update the listings required under this division to reflect material changes, and any agreement entered into under division (D) of this section shall set forth final estimates and listings as of the time the agreement is entered into. The legislative authority, on a separate form and at any time, may require any additional information necessary to determine whether an enterprise is in compliance with an agreement and to collect the information required to be reported under section 5709.882 of the Revised Code.

(D) Upon receipt and investigation of a proposal under division (C) of this section, if the legislative authority finds that the enterprise submitting the proposal is qualified by financial responsibility and business experience to create and preserve employment opportunities at the project site and improve the economic climate of the county or municipal corporation, the legislative authority, after complying with section 5709.83 of the Revised Code, may enter into, and formally shall approve, an agreement with the enterprise under which the enterprise agrees to remediate a facility and to spend an amount equal to at least two hundred fifty per cent of the true value in money of the land, buildings, improvements, structures, and fixtures constituting the facility, as determined for purposes of property taxation immediately prior to formal approval of the agreement, to establish, expand, renovate, or occupy a facility and hire new employees, or preserve employment opportunities for existing employees, in return for one or more of the following incentives:

(1) Exemption for a specified number of years, not to exceed ten, of a specified portion, up to one hundred per cent, of the assessed value of tangible personal property first used in business at the project site as a result of the agreement. An exemption granted pursuant to division (D)(1) of this section applies to inventory required to be listed pursuant to sections 5711.15 and 5711.16 of the Revised Code, except that, in the instance of an expansion or other situations in which an enterprise was in business at the facility prior to the effective date of the agreement, the inventory that is exempt is that amount or value of inventory in excess of the amount or value of inventory required to be listed in the personal property tax return of the enterprise in the return for the tax year in which the agreement is entered into.

(2) Exemption for a specified number of years, not to exceed ten, of a specified portion, up to one hundred per cent, of the increase, subsequent to formal approval of the agreement by the legislative authority, in the assessed valuation of buildings, improvements, structures, and fixtures constituting the project site;

(3) Provision for a specified number of years, not to exceed ten, of any optional services or assistance that the county or municipal corporation is authorized to provide with regard to the project site.

(E) All agreements entered into under this section shall be in the form prescribed under section 5709.881 of the Revised Code.

(F) Except as otherwise provided in this division, an agreement entered into under this section shall require that the enterprise pay an annual fee equal to the greater of one per cent of the dollar value of incentives offered under the agreement or five hundred dollars, provided that if the value of the incentives exceeds two hundred fifty thousand dollars, the fee shall not exceed two thousand five hundred dollars. The fee shall be payable to the legislative authority once per year for each year the agreement is effective on the days and in the form specified in the agreement. Fees paid shall be deposited in a special fund created for that purpose by the legislative authority and shall be used by the legislative authority exclusively for the purpose of complying with section 5709.882 of the Revised Code and by the tax incentive review council created under section 5709.883 of the Revised Code exclusively for the purposes of performing the duties prescribed under that section. The legislative authority may waive or reduce the amount of the fee charged against an enterprise, but such a waiver or reduction does not affect the obligations of the legislative authority or the tax incentive review council to comply with section 5709.882 or 5709.883 of the Revised Code.

(G) When an agreement is entered into under this section, the legislative authority authorizing the agreement shall forward a copy of the agreement to the director of development and to the tax commissioner within fifteen days after the agreement is entered into.

(H) After an agreement is entered into, the enterprise shall file with each personal property tax return required to be filed while the agreement is in effect, an informational return, on a form prescribed by the tax commissioner for that purpose, setting forth separately the property, and related costs and values, exempted from taxation under the agreement.

(I) The legislative authority may require the owner of record to pay the amount of taxes that, during the period beginning with the commencement of the exemption and ending with the date of revocation of the covenant not to sue under Chapter 3746. of the Revised Code, would have been charged against the property had the property not been exempted from taxation pursuant to an agreement entered into under this section. In the case of real property, the proper county auditor shall determine the taxable value of the property for each of the tax years for which the property had been exempted from taxation, and shall determine the amount of taxes that would have been charged against the property had the property been subject to taxation each of those years. The county treasurer shall issue a tax bill as otherwise required by law, and the taxes shall be payable in full on the first succeeding day on which the first one-half of taxes is required to be paid under section 323.12 of the Revised Code. If such real property taxes are not paid in full when due, a penalty shall be charged, and interest shall accrue on those taxes, as provided in section 323.121 of the Revised Code. In cases of underpayment or nonpayment, the deficiency shall be collected as otherwise provided for the collection of delinquent real property taxes.

In the case of tangible personal property, the tax commissioner shall determine the taxable value of the property for each of the tax years for which the property had been exempted from taxation on the basis of the informational return required to be filed under this section or any further assessment necessary to make such a determination, and certify that determination to the proper county auditor, who shall add the property to the proper tax lists and duplicates. Taxes shall be charged against such property at the rates charged for the respective years for which taxes are charged under this division. The county treasurer shall issue a tax bill as otherwise required by law, and the taxes shall be payable on the next succeeding date for the payment of current taxes. If the taxes are not paid in full when due, a penalty shall be charged, and interest shall accrue, as otherwise provided in sections 5719.03 and 5719.041 of the Revised Code. In cases of underpayment or nonpayment, the deficiency shall be collected as otherwise provided in Chapter 5719. of the Revised Code.

Section 5709.881 | Local agreements.

• Effective: September 28, 1994
• Latest Legislation: Senate Bill 221 - 120th General Assembly

Each agreement entered into under section 5709.88 of the Revised Code shall be in writing and shall include all of the information and statements prescribed by this section. Agreements may include terms not prescribed by this section, but such terms shall in no way derogate from the information and statements prescribed by this section.

(A) Each agreement shall include the following information:

(1) The names of all parties to the agreement;

(2) A description of the investments to be made by the applicant enterprise or by another party at the facility whether or not the investments are exempted from taxation, including existing or new building size and the cost thereof; the value of machinery, equipment, furniture, and fixtures, including an itemization of the value of machinery, equipment, furniture, and fixtures used at another location in this state prior to the agreement and relocated or to be relocated from that location to the facility, and the value of machinery, equipment, furniture, and fixtures at the facility prior to the execution of the agreement that will not be exempted from taxation; the value of inventory at the facility, including an itemization of the value of inventory held at another location in this state prior to the agreement and relocated or to be relocated from that location to the facility, and the value of inventory held at the facility prior to the execution of the agreement that will not be exempted from taxation;

(3) The scheduled starting and completion dates of investments made in building, machinery, equipment, furniture, fixtures, and inventory;

(4) Estimates of the number of employee positions to be created each year of the agreement and of the number of employee positions retained by the applicant enterprise due to the project, itemized as to the number of full-time, part-time, permanent, and temporary positions;

(5) Estimates of the dollar amount of payroll attributable to the positions set forth in division (A)(4) of this section, similarly itemized;

(6) The number of employee positions, if any, at the project site and at any other location in the state at the time the agreement is executed, itemized as to the number of full-time, part-time, permanent, and temporary positions.

(B) Each agreement shall set forth the following information and incorporate the following statements:

(1) A description of real property to be exempted from taxation under the agreement, the percentage of the assessed valuation of the real property exempted from taxation, and the period for which the exemption is granted, accompanied by the statement: "The exemption commences the first year for which the real property would first be taxable were that property not exempted from taxation. No exemption shall commence after __________ (insert date) nor extend beyond __________ (insert date)." The tax commissioner shall adopt rules prescribing the form the description of such property shall assume in order to ensure that the property to be exempted from taxation under the agreement is distinguishable from property that is not to be exempted under that agreement.

(2) A description of tangible personal property to be exempted from taxation under the agreement, the percentage of the assessed value of the tangible personal property exempted from taxation, and the period for which the exemption is granted, accompanied by the statement: "The exemption commences the first year for which the tangible personal property would first be taxable were that property not exempted from taxation. No exemption shall commence after __________ (insert date) nor extend beyond __________ (insert date)." The tax commissioner shall adopt rules prescribing the form the description of such property shall assume in order to ensure that the property to be exempted from taxation under the agreement is distinguishable from property that is not to be exempted under that agreement.

(3) "__________ (insert name of enterprise) shall pay such real and tangible personal property taxes as are not exempted under this agreement and are charged against such property and shall file all tax reports and returns as required by law."

(4) "__________ (insert name of municipal corporation or county) shall perform such acts as are reasonably necessary or appropriate to effect, claim, reserve, and maintain exemptions from taxation granted under this agreement, including, without limitation, joining in the execution of all documentation and providing any necessary certificates required in connection with such exemptions."

(5) "__________ (insert name of enterprise) shall provide to the proper tax incentive review council any information reasonably required by the council to evaluate the enterprise's compliance with the agreement, including returns filed pursuant to section 5711.02 of the Ohio Revised Code if requested by the council."

(6) "__________ (insert name of enterprise) and __________ (insert name of municipal corporation or county) acknowledge that this agreement must be approved by formal action of the legislative authority of __________ (insert name of municipal corporation or county) as a condition for the agreement to take effect. This agreement takes effect upon such approval."

Section 5709.882 | Report of local agreements.

• Effective: September 28, 2012
• Latest Legislation: Senate Bill 314 - 129th General Assembly

(A) On or before the thirty-first day of March each year, a municipal corporation or county that has entered into an agreement with an enterprise under section 5709.88 of the Revised Code shall submit to the directors of development services and environmental protection and the board of education of each school district of which a municipal corporation or county to which such an agreement applies is a part a report on all such agreements in effect during the preceding calendar year. The report shall include all of the following information:

(1) The number of enterprises that are subject to such agreements and the number of full-time employees subject to those agreements in the county or municipal corporation;

(2) The number of agreements approved and executed during the calendar year for which the report is submitted, the total number of agreements in effect on the thirty-first day of December of the preceding calendar year, the number of agreements that expired during the calendar year for which the report is submitted, and the number of agreements scheduled to expire during the calendar year in which the report is submitted. For each agreement that expired during the calendar year for which the report is submitted, the municipal corporation or county shall include the amount of taxes exempted and the estimated dollar value of any other incentives provided under the agreement.

(3) The number of agreements receiving compliance reviews by the tax incentive review council in the municipal corporation or county under section 5709.883 of the Revised Code during the calendar year for which the report is submitted, including all of the following information:

(a) The number of agreements the terms of which an enterprise has complied with, indicating separately for each such agreement the value of the real and personal property exempted pursuant to the agreement and a comparison of the stipulated and actual schedules for hiring new employees, for retaining existing employees, for the amount of payroll of the enterprise attributable to these employees, and for remediating and investing in establishing, expanding, renovating, or occupying a facility;

(b) The number of agreements the terms of which an enterprise has failed to comply with, indicating separately for each such agreement the value of the real and personal property exempted pursuant to the agreement and a comparison of the stipulated and actual schedules for hiring new employees, for retaining existing employees, for the amount of payroll of the enterprise attributable to these employees, and for remediating and investing in establishing, expanding, renovating, or occupying a facility;

(c) The number of agreements about which the tax incentive review council made recommendations to the legislative authority of the municipal corporation or county, and the number of such recommendations that have not been followed;

(d) The number of agreements rescinded during the calendar year for which the report is submitted.

(4) The number of enterprises that are subject to agreements and the number of new employees hired and existing employees retained by each such enterprise;

(5)(a) The number of enterprises that are subject to agreements and that closed or reduced employment at any place of business within the state for the primary purpose of remediating and establishing, expanding, renovating, or occupying a facility, indicating separately for each such enterprise the political subdivision in which the enterprise closed or reduced employment at a place of business and the number of full-time employees transferred and retained by each such place of business;

(b) The number of enterprises that are subject to agreements and that closed or reduced employment at any place of business outside the state for the primary purpose of remediating and establishing, expanding, renovating, or occupying a facility.

(B) Upon the failure of a municipal corporation or county to comply with division (A) of this section, both of the following apply:

(1) Beginning on the first day of April of the calendar year in which the municipal corporation or county fails to comply with that division, the municipal corporation or county shall not enter into any agreements with an enterprise under section 5709.88 of the Revised Code until the municipal corporation or county has complied with division (A) of this section;

(2) On the first day of each ensuing calendar month until the municipal corporation or county complies with that division, the director of development services shall either order the proper county auditor to deduct from the next succeeding payment of taxes to the municipal corporation or county under section 321.31, 321.32, 321.33, or 321.34 of the Revised Code an amount equal to five hundred dollars for each calendar month the municipal corporation or county fails to comply with that division, or order the county auditor to deduct such an amount from the next succeeding payment to the municipal corporation or county from the undivided local government fund under section 5747.51 of the Revised Code. At the time such a payment is made, the county auditor shall comply with the director's order by issuing a warrant, drawn on the fund from which such money would have been paid, to the director of development services, who shall deposit the warrant into the contaminated sites development program administration fund created in division (C) of this section.

(C) The director, by rule, shall establish the state's application fee for applications submitted to a municipal corporation or county to enter into an agreement under section 5709.88 of the Revised Code. In establishing the amount of the fee, the director shall consider the state's cost of administering this section and section 5709.88 of the Revised Code. The director may change the amount of the fee at such times and in such increments as the director considers necessary. Any municipal corporation or county that receives an application shall collect the application fee and remit the fee for deposit in the state treasury to the credit of the contaminated sites development program administration fund, which is hereby created. Money credited to the fund shall be used by the development services agency to pay the costs of administering this section and section 5709.88 of the Revised Code.

Section 5709.883 | Tax incentive review council - cleanup of contamination.

• Effective: March 11, 2004
• Latest Legislation: House Bill 127 - 125th General Assembly

(A) The legislative authority of a county or municipal corporation that grants an exemption from taxation under section 5709.88 of the Revised Code shall create a tax incentive review council unless the county has created such a council under section 5709.85 of the Revised Code. If a council has been created under that section, that council shall perform the functions prescribed by this section. A council created under this section shall consist of the following members:

(1) For a municipal corporation, the chief executive officer or that officer's designee; a member of the legislative authority of the municipal corporation, appointed by the president of the legislative authority or, if the chief executive officer of the municipal corporation is the president, appointed by the president pro tempore of the legislative authority; the county auditor or the county auditor's designee; the chief financial officer of the municipal corporation or that officer's designee; an individual appointed by the board of education of each city, local, exempted village, and joint vocational school district to which the instrument granting the exemption applies; and two members of the public appointed by the chief executive officer of the municipal corporation with the concurrence of the legislative authority. At least four members of the council shall be residents of the municipal corporation.

(2) For unincorporated areas of a county, three members appointed by the board of county commissioners; two members of each township to which the instrument granting the tax exemption applies, appointed by the board of township trustees of the respective townships; the county auditor or the county auditor's designee; and an individual appointed by the board of education of each city, local, exempted village, and joint vocational school district to which the instrument granting the tax exemption applies.

(B) The county auditor or the county auditor's designee shall serve as the chairperson of the council. The council shall meet at the call of the chairperson. At the first meeting of the council, the council shall select a vice-chairperson. Attendance by a majority of the members of the council constitutes a quorum to conduct the business of the council.

(C) Annually, the tax incentive review council shall review all agreements granting exemptions from property taxation under section 5709.88 of the Revised Code and any performance or audit reports required to be submitted pursuant to those agreements. With respect to each agreement, the council shall determine whether the owner of the exempted property has complied with the agreement, and may take into consideration any fluctuations in the business cycle unique to the owner's business. On the basis of that determination, on or before the first day of September of each year, the council shall submit to the legislative authority written recommendations for continuation, modification, or cancellation of the agreement.

Upon the request of a tax incentive review council, the county auditor and the legislative authority of the county or municipal corporation granting the exemption shall supply the council with any information reasonably necessary for the council to make the determinations required under this division, including returns or reports filed pursuant to sections 5711.02, 5711.13, and 5727.08 of the Revised Code.

(D) A legislative authority that receives from a tax incentive review council written recommendations under division (C) of this section shall, within sixty days after receipt, hold a meeting and vote to accept, reject, or modify all or any portion of the recommendations.

(E) A tax incentive review council may request from the recipient of a tax exemption under this section any information reasonably necessary for the council to perform its review under this section. The request shall be in writing and shall be sent to the recipient by certified mail. Within ten days after receipt of the request, the recipient shall provide to the council the information requested.

Section 5709.91 | Service payments in lieu of taxes.

• Effective: August 3, 2021
• Latest Legislation: Senate Bill 57 - 134th General Assembly

(A) Service payments in lieu of taxes required under sections 725.04, 5709.42, 5709.46, 5709.74, and 5709.79 of the Revised Code, minimum service payment obligations, and service charges in lieu of taxes required under sections 1728.11 and 1728.111 of the Revised Code shall be treated in the same manner as taxes, as defined in section 323.01 of the Revised Code, for all purposes of the lien described in section 323.11 of the Revised Code, including, but not limited to, the priority and enforcement of the lien and the collection of the service payments, minimum service payment obligations, or service charges secured by the lien.

(B) Any covenant or agreement in an instrument whereby a property owner agrees to a minimum service payment obligation shall be a covenant running with the land. Upon the proper recording of the instrument with the county recorder, the covenant is fully binding on behalf of and enforceable by the county, township, or municipal corporation against the property owner and any person acquiring an interest in the land and all successors and assigns. If any such minimum service payment obligation becomes delinquent according to such covenant or agreement, the county, township, or municipal corporation may enforce the delinquent minimum service payment obligation in the manner provided under division (A) of this section or in the manner otherwise provided in the instrument. A minimum service payment obligation is an insurable interest with respect to title insurance under Chapter 3953. of the Revised Code.

(C) A county, township, or municipal corporation may certify a minimum service payment obligation that is a covenant under division (B) of this section to the county auditor, who shall enter the obligation on the tax list of real property opposite the parcel against which it is charged, and certify the minimum service payment obligation to the county treasurer. An unpaid minimum service payment obligation is a lien on property against which it is charged from the date the obligation is entered on the tax list, and shall be collected in the manner provided for collection of real property taxes. Once the minimum service payment obligation is collected, it shall be paid immediately to the county, township, or municipal corporation.

(D) For the purposes of this section, a "minimum service payment obligation" is an obligation, including a contingent obligation, for a property owner to make a payment to a county, township, or municipal corporation pursuant to an agreement between the property owner and the county, township, or municipal corporation to ensure sufficient funds to finance the expenditures authorized under sections 725.04, 1728.11, 1728.111, 5709.40 to 5709.43, 5709.45 to 5709.47, 5709.73 to 5709.75, or 5709.77 to 5709.81 of the Revised Code. "Minimum service payment obligation" does not include service payments in lieu of taxes required under section 725.04, 5709.42, 5709.46, 5709.74, or 5709.79 of the Revised Code or service charges in lieu of taxes required under section 1728.11 or 1728.111 of the Revised Code.

Last updated May 10, 2021 at 2:49 PM

Section 5709.911 | Exemptions.

• Effective: July 18, 2022
• Latest Legislation: House Bill 95 - 134th General Assembly

(A)(1) A municipal corporation, township, or county that has enacted an ordinance or resolution under section 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code or that has entered into an agreement referred to in section 725.02 or 1728.07 of the Revised Code may file an application for exemption under those sections in the same manner as other real property tax exemptions, notwithstanding the indication in division (A) of section 5715.27 of the Revised Code that the owner of the property may file the application. An application for exemption may not be filed by a municipal corporation, township, or county for an exemption of a parcel under section 5709.40, 5709.73, or 5709.78 of the Revised Code if the property owner excludes the property from such exemption as provided in that section.

(2) Except as provided in division (B) of this section, if the application for exemption under section 725.02, 1728.10, 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code is filed by a municipal corporation, township, or county and more than one real property tax exemption applies by law to the property or a portion of the property, both of the following apply:

(a) An exemption granted under section 725.02, 1728.10, 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code shall be subordinate to an exemption with respect to the property or portion of the property granted under any other provision of the Revised Code.

(b) Neither service payments in lieu of taxes under section 725.04, 5709.42, 5709.46, 5709.74, or 5709.79 of the Revised Code, nor service charges in lieu of taxes under section 1728.11 or 1728.111 of the Revised Code, shall be required with respect to the property or portion of the property that is exempt from real property taxes under that other provision of the Revised Code during the effective period of the exemption.

(B)(1) If the application for exemption under section 725.02, 1728.10, 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code is filed by the owner of the property or by a municipal corporation, township, or county with the owner's written consent attached to the application, and if more than one real property tax exemption applies by law to the property or a portion of the property, no other exemption shall be granted for the portion of the property already exempt under section 725.02, 1728.10, 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code unless the municipal corporation, township, or county that enacted the authorizing ordinance or resolution for the earlier exemption provides its duly authorized written consent to the subsequent exemption by means of a duly enacted ordinance or resolution.

(2) If the application for exemption under section 725.02, 1728.10, 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code is filed by a municipal corporation, township, or county and approved by the tax commissioner, if the owner of the property subsequently provides written consent to the exemption and the consent is filed with the tax commissioner, and if more than one real property tax exemption applies by law to the property or a portion of the property, no other exemption shall be granted for the portion of the property already exempt under section 725.02, 1728.10, 5709.40, 5709.41, 5709.45, 5709.73, or 5709.78 of the Revised Code unless the municipal corporation, township, or county that enacted the authorizing ordinance or resolution for the earlier exemption provides its duly authorized written consent to the subsequent exemption by means of a duly enacted ordinance or resolution.

(C) After the tax commissioner has approved or partially approved an application for exemption filed by or with the consent of a property owner under the circumstances described in division (B)(1) of this section or if a property owner subsequently provides written consent to an exemption under the circumstances described in division (B)(2) of this section, the municipal corporation, township, county, or property owner shall file one of the following with the county recorder for the county in which the property is located:

(1) A notice that clearly identifies the property and the owner of the property and states that the property, regardless of future use or ownership, remains liable for any service payments or service charges required by the exemption until the terms of the exemption have been satisfied, unless the municipal corporation, township, or county consents to the subsequent exemption and relinquishes its right to collect the service payments or service charges as provided in division (B)(1) or (2) of this section, as applicable;

(2) An agreement, declaration, or covenant by which the owner of the property subject to the exemption binds the owner and the property, regardless of future use or ownership, to the obligation to make service payments or service charges in lieu of taxes as required by the exemption until the terms of the exemption have been satisfied, unless the municipal corporation, township, or county consents to the subsequent exemption and relinquishes its right to collect the service payments or service charges as provided in division (B)(1) or (2) of this section, as applicable.

The county recorder's office shall charge a fee of fourteen dollars to record the notice, agreement, declaration, or covenant, the proceeds of which shall be retained by the county.

(D) Upon filing of the notice, agreement, declaration, or covenant with the county recorder, the provisions of division (B) of this section are binding on all future owners of the property or portion of the property, regardless of how the property is used. Failure to file a notice, agreement, declaration, or covenant with the county recorder relieves future owners of the property from the obligation to make service payments in lieu of taxes under section 725.04, 5709.42, 5709.46, 5709.74, or 5709.79 of the Revised Code or service charges in lieu of taxes under section 1728.11 or 1728.111 of the Revised Code, if the property or a portion of the property later qualifies for exemption under any other provision of the Revised Code. Failure to file a notice, agreement, declaration, or covenant does not, however, relieve the owner of the property, at the time the application for exemption is filed, from making those payments or charges.

Last updated April 20, 2022 at 11:16 AM

Section 5709.912 | Administrative rules.

• Effective: June 9, 2004
• Latest Legislation: House Bill 427 - 125th General Assembly

The tax commissioner may, in accordance with section 5703.14 of the Revised Code, adopt rules to implement sections 5709.91 and 5709.911 of the Revised Code.

Section 5709.913 | Increases in assessed value of real property located within a municipal incentive district.

• Effective: August 5, 2016
• Latest Legislation: House Bill 233 - 131st General Assembly

(A) As used in this section:

(1) "Base real property" means the land, structures and buildings, or portions of structures and buildings, that existed, and in the condition in which they existed, for the tax year in which the ordinance or resolution creating the incentive district referred to in division (B) of this section was enacted or adopted, as reflected in the exempt tax list or the general tax list and duplicate of real and public utility property.

(2) "Sexennial reappraisal and triennial update" means the reappraisal and update referred to in section 5715.24 of the Revised Code.

(B) This section applies to any parcel of real property that is located within an incentive district created by a municipal corporation or township under section 5709.40 or 5709.73 of the Revised Code or within a downtown redevelopment district created by a municipal corporation under section 5709.45 of the Revised Code, and concerning which the municipal corporation or township applied for an exemption from taxation on behalf of the property owner under section 5709.911 of the Revised Code.

(C) Each time a county auditor's sexennial reappraisal or triennial update of the assessed value of a parcel of real property to which this section applies results in an increase in such assessed value, the county auditor shall determine the following amounts:

(1) The amount of the increase in assessed value that is attributable to the base real property;

(2) The amount determined under division (C)(1) of this section multiplied by the percentage of improvements in the district to be exempted from taxation under section 5709.40, 5709.45, or 5709.73 of the Revised Code, as applicable;

(3) The product of the amount calculated under division (C)(2) of this section multiplied by the rate of the taxes levied by the county within the ten-mill limitation the proceeds of which are deposited in the county general fund;

(4) The product of the amount calculated under division (C)(3) of this section multiplied by one-half.

(D) For any tax year that the owner of a parcel of real property referred to in division (B) of this section is required to make service payments in lieu of taxes under section 5709.42, 5709.46, or 5709.74 of the Revised Code, a portion of the total amount of payments made for the year equal to the amount calculated under division (C)(4) of this section shall be distributed to the county treasury to the credit of the county general fund in lieu of distribution to the municipal public improvement tax increment equivalent fund, municipal downtown redevelopment district fund, or the township public improvement tax increment equivalent fund, as applicable. If the service payments for the year are paid in two installments, the required distribution to the county treasury also shall be made in two installments.

(E)(1) Division (D) of this section does not apply if the municipal corporation or township enters into an agreement with the county that provides that such division does not apply. The agreement may provide for payments to the county by the municipal corporation or township.

(2) Upon entering into an agreement under division (E)(1) of this section, the municipal corporation or township shall provide written notice of it to the county auditor of the county that is a party to the agreement and the tax commissioner.

(F) With respect to a parcel of real property to which this section applies, the tax commissioner shall notify the county auditor of the county in which the parcel is located when a municipal corporation or township has applied for an exemption from taxation on behalf of the property owner and the exemption has been granted under section 5715.27 of the Revised Code.

Section 5709.914 | Increases in assessed value of real property located within a county incentive district.

• Effective: March 24, 2021
• Latest Legislation: House Bill 427 - 125th General Assembly

(A) As used in this section:

(1) "Base real property" means the land, structures and buildings, or portions of structures and buildings, that existed, and in the condition in which they existed, for the tax year in which the resolution creating the incentive district referred to in division (B) of this section was adopted, as reflected in the exempt tax list or the general tax list and duplicate of real and public utility property.

(2) "Sexennial reappraisal and triennial update" means the reappraisal and update referred to in section 5715.24 of the Revised Code.

(B) This section applies to any parcel of real property that is located within an incentive district created by a county under section 5709.78 of the Revised Code and concerning which the county applied for an exemption from taxation on behalf of the property owner under section 5709.911 of the Revised Code.

(C) Each time a county auditor's sexennial reappraisal or triennial update of the assessed value of a parcel of real property to which this section applies results in an increase in such assessed value, the county auditor shall determine the following amounts:

(1) The amount of the increase in assessed value that is attributable to the base real property;

(2) The amount determined under division (C)(1) of this section multiplied by the percentage of improvements in the incentive district to be exempted from taxation under section 5709.78 of the Revised Code;

(3) The product of the amount calculated under division (C)(2) of this section multiplied by the rate of the taxes levied within the ten-mill limitation by the township in which the parcel is located the proceeds of which are deposited in the general fund of the township;

(4) The product of the amount calculated under division (C)(3) of this section multiplied by one-half.

(D) For any tax year that the owner of a parcel of real property referred to in division (B) of this section is required to make service payments in lieu of taxes under section 5709.79 of the Revised Code, a portion of the total amount of payments made for the year equal to the amount calculated under division (C)(4) of this section shall be distributed to the general fund of the township in which the parcel is located in lieu of distribution to the county redevelopment tax equivalent fund. If the service payments for the year are paid in two installments, the required distribution to the general fund of the township also shall be made in two installments.

(E)(1) Division (D) of this section does not apply if the county enters into an agreement with the township that provides that such division does not apply. The agreement may provide for payments to the township by the county.

(2) Upon entering into an agreement under division (E)(1) of this section, the board of county commissioners of the county shall provide written notice of it to the county auditor and the tax commissioner.

(F) With respect to a parcel of real property to which this section applies, the tax commissioner shall notify the county auditor of the county in which the parcel is located when the county has applied for an exemption from taxation on behalf of the property owner and the exemption has been granted under section 5715.27 of the Revised Code.

Section 5709.915 | Application of amendments to R.C. 5709.91 by S.B. 57 of the 134th General Assembly [codified from Section 6 of S.B. 57, 134th General Assembly].

• Effective: August 3, 2021
• Latest Legislation: Senate Bill 57 - 134th General Assembly

The amendment by this act of section 5709.91 of the Revised Code applies to any proceedings commenced or instruments recorded after the amendment's effective date, and, so far as the amendment supports the actions taken, also applies to proceedings that on its effective date are pending, in progress, or completed, or instruments that have previously been recorded, notwithstanding the applicable law previously in effect or any provision to the contrary in a prior resolution, ordinance, order, advertisement, notice, instrument, or other proceeding. Any proceedings pending or in progress on the effective date of the amendment shall be deemed to have been taken in conformity with the amendment.

The authority provided in the amendment by this act of section 5709.91 of the Revised Code provides additional and supplemental provisions for the subject matter that may also be the subject of other laws, and is supplemental to and not in derogation of any similar authority provided by, derived from, or implied by the Ohio Constitution, or any other law, including laws amended by this act , or any charter, order, resolution, or ordinance, and no inference shall be drawn to negate the authority thereunder by reason of express provisions contained in the amendment by this act of section 5709.91 of the Revised Code.

Last updated October 1, 2021 at 3:39 PM

Section 5709.916 | Concurrent municipal tax increment financing exemptions.

• Effective: July 18, 2022
• Latest Legislation: House Bill 95 - 134th General Assembly

(A) As used in this section, "incentive district ordinance" means an ordinance adopted under division (C) of section 5709.40 of the Revised Code.

(B) Notwithstanding any contrary provision of section 5709.40, 5709.41, 5709.42, 5709.43, or 5709.911 of the Revised Code, divisions (C) and (D) of this section apply to any exemption granted by a municipal corporation by an ordinance adopted under division (B) of section 5709.40 or section 5709.41 of the Revised Code before March 1, 2022, declaring improvements to one or more parcels of real property located within an existing incentive district, created by an incentive district ordinance adopted by the same municipal corporation, to be a public purpose and concurrently exempting a percentage of such improvements from real property taxation.

(C) For the period that the exemptions are concurrent under division (B) of this section:

(1) With respect to improvements exempted under only the incentive district ordinance, the exemption percentage, any payments required to a city, local, or exempted village school district or county, and the purposes for which the remaining service payment revenue is used shall be determined based on that ordinance.

(2) With respect to improvements that are concurrently exempt under both the incentive district ordinance and the subsequent ordinance adopted as specified under division (B) of this section, the exemption percentage equals the sum of the exemption percentages authorized by each such ordinance, not to exceed one hundred per cent. Service payments shall be collected under section 5709.42 of the Revised Code based on that cumulative exemption percentage. The service payment revenue, net of any required payments to city, local, or exempted village school districts or counties, shall first be directed and used in accordance with the ordinance that authorizes the dominant exemption, as determined under division (D) of this section. If the dominant exemption is less than one hundred per cent, the service payment revenue attributed to the remaining portion of the exempt improvements shall be distributed and used in accordance with the ordinance that authorizes the subordinate exemption, as determined under division (D) of this section.

(3) The property owner shall not be required to pay as service payments in lieu of taxes under section 5709.42 of the Revised Code an amount that is greater than the amount of real property taxes the owner would have been required to pay on the improvements exempted by the incentive district ordinance and the subsequent ordinance adopted as specified under division (B) of this section. Division (C)(3) of this section does not apply to "minimum service payment obligations," as defined in section 5709.91 of the Revised Code.

(D) For purposes of division (C) of this section:

(1) If one application for exemption is filed by the municipal corporation, as described in division (A) of section 5709.911 of the Revised Code, without written consent of the property owner and the other application for exemption is filed by the property owner or with the property owner's consent, as described in division (B)(1) or (2) of section 5709.911 of the Revised Code, the exemption granted or sought in the application filed or consented to by the owner is dominant, and the exemption granted or sought in the application filed by the municipal corporation without the owner's consent is subordinate.

(2) If both applications for exemption are filed by the municipal corporation, as described in division (A) of section 5709.911 of the Revised Code, without written consent of the property owner, the most recently authorized exemption is dominant, and the earlier authorized exemption is subordinate.

(3) If both applications for exemption are filed by the property owner or with the property owner's consent, as described in division (B)(1) or (2) of section 5709.911 of the Revised Code, the most recently authorized exemption is dominant, and the earlier authorized exemption is subordinate.

(E) On and after March 1, 2022, an ordinance adopted under division (B) or (C) of section 5709.40 or section 5709.41 of the Revised Code exempting improvements to a parcel from real property taxation terminates and replaces any prior exemption of improvements to the same parcel authorized by a previous ordinance adopted by the same municipal corporation under division (B) or (C) of section 5709.40 or section 5709.41 of the Revised Code, regardless of whether the application for exemption under either or both ordinances was filed by, or with the consent of, the property owner. A municipal ordinance adopted under division (B) or (C) of section 5709.40 or section 5709.41 of the Revised Code before that date may terminate and replace a prior exemption of improvements to the same parcel by the same municipal corporation in the manner prescribed by this division if the ordinance clearly expresses that intent.

Last updated May 11, 2022 at 2:51 PM

Section 5709.92 | Ranking of school districts by capacity.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) As used in this section:

(1) "School district" means a city, local, or exempted village school district.

(2) "Joint vocational school district" means a joint vocational school district created under section 3311.16 of the Revised Code, and includes a cooperative education school district created under section 3311.52 or 3311.521 of the Revised Code and a county school financing district created under section 3311.50 of the Revised Code.

(3) "Total resources" means the sum of the amounts described in divisions (A)(3)(a) to (g) of this section less any reduction required under division (C)(3)(a) of this section.

(a) The state education aid for fiscal year 2015;

(b) The sum of the payments received in fiscal year 2015 for current expense levy losses under division (C)(3) of section 5727.85 and division (C)(12) of section 5751.21 of the Revised Code, as they existed at that time, excluding the portion of such payments attributable to levies for joint vocational school district purposes;

(c) The sum of fixed-sum levy loss payments received by the school district in fiscal year 2015 under division (F)(1) of section 5727.85 and division (E)(1) of section 5751.21 of the Revised Code, as they existed at that time, for fixed-sum levies charged and payable for a purpose other than paying debt charges;

(d) The district's taxes charged and payable against all property on the tax list of real and public utility property for current expense purposes for tax year 2014, including taxes charged and payable from emergency levies charged and payable under sections 5705.194 to 5705.197 of the Revised Code, excluding taxes levied for joint vocational school district purposes or levied under section 5705.23 of the Revised Code;

(e) The amount certified for fiscal year 2015 under division (A)(2) of section 3317.08 of the Revised Code;

(f) Distributions received during calendar year 2014 from taxes levied under section 718.09 of the Revised Code;

(g) Distributions received during fiscal year 2015 from the gross casino revenue county student fund.

(4)(a) "State education aid" for a school district means the sum of state amounts computed for the district under sections 3317.022 and 3317.0212 of the Revised Code after any amounts are added or subtracted under Section 263.240 of Am. Sub. H.B. 59 of the 130th general assembly, entitled "TRANSITIONAL AID FOR CITY, LOCAL, AND EXEMPTED VILLAGE SCHOOL DISTRICTS."

(b) "State education aid" for a joint vocational district means the amount computed for the district under section 3317.16 of the Revised Code after any amounts are added or subtracted under Section 263.250 of Am. Sub. H.B. 59 of the 130th general assembly, entitled "TRANSITIONAL AID FOR JOINT VOCATIONAL SCHOOL DISTRICTS."

(5) "Taxes charged and payable" means taxes charged and payable after the reduction required by section 319.301 of the Revised Code but before the reductions required by sections 319.302 and 323.152 of the Revised Code.

(6) "Capacity quintile" means the capacity measure quintiles determined under division (B) of this section.

(7) "Threshold per cent" means the following:

(a) For a school district in the lowest capacity quintile, one per cent for fiscal year 2016 and two per cent for fiscal year 2017.

(b) For a school district in the second lowest capacity quintile, one and one-fourth per cent for fiscal year 2016 and two and one-half per cent for fiscal year 2017.

(c) For a school district in the third lowest capacity quintile, one and one-half per cent for fiscal year 2016 and three per cent for fiscal year 2017.

(d) For a school district in the second highest capacity quintile, one and three-fourths per cent for fiscal year 2016 and three and one-half per cent for fiscal year 2017.

(e) For a school district in the highest capacity quintile, two per cent for fiscal year 2016 and four per cent for fiscal year 2017.

(f) For a joint vocational school district, two per cent for fiscal year 2016 and four per cent for fiscal year 2017.

(8) "Current expense allocation" means the sum of the payments received by a school district or joint vocational school district in fiscal year 2015 for current expense levy losses under division (C)(3) of section 5727.85 and division (C)(12) of section 5751.21 of the Revised Code as they existed at that time, less any reduction required under division (C)(3)(b) of this section.

(9) "Non-current expense allocation" means the sum of the payments received by a school district or joint vocational school district in fiscal year 2015 for levy losses under division (C)(3)(c) of section 5727.85 and division (C)(12)(c) of section 5751.21 of the Revised Code, as they existed at that time, and levy losses in fiscal year 2015 under division (H) of section 5727.84 of the Revised Code as that section existed at that time attributable to levies for and payments received for losses on levies intended to generate money for maintenance of classroom facilities.

(10) "Operating TPP fixed-sum levy losses" means the sum of payments received by a school district in fiscal year 2015 for levy losses under division (E) of section 5751.21 of the Revised Code, excluding levy losses for debt purposes.

(11) "Operating S.B. 3 fixed-sum levy losses" means the sum of payments received by the school district in fiscal year 2015 for levy losses under division (H) of section 5727.84 of the Revised Code, excluding levy losses for debt purposes.

(12) "TPP fixed-sum debt levy losses" means the sum of payments received by a school district in fiscal year 2015 for levy losses under division (E) of section 5751.21 of the Revised Code for debt purposes.

(13) "S.B. 3 fixed-sum debt levy losses" means the sum of payments received by the school district in fiscal year 2015 for levy losses under division (H) of section 5727.84 of the Revised Code for debt purposes.

(14) "Qualifying levies" means qualifying levies described in section 5751.20 of the Revised Code as that section was in effect before July 1, 2015.

(15) "Total taxable value" has the same meaning as in section 3317.02 of the Revised Code.

(B) The department of education and workforce shall rank all school districts in the order of districts' capacity measures determined under former section 3317.018 of the Revised Code from lowest to highest, and divide such ranking into quintiles, with the first quintile containing the twenty per cent of school districts having the lowest capacity measure and the fifth quintile containing the twenty per cent of school districts having the highest capacity measure. This calculation and ranking shall be performed once, in fiscal year 2016.

(C)(1) In fiscal year 2016, payments shall be made to school districts and joint vocational school districts equal to the sum of the amounts described in divisions (C)(1)(a) or (b) and (C)(1)(c) of this section. In fiscal year 2017, payments shall be made to school districts and joint vocational school districts equal to the amount described in division (C)(1)(a) or (b) of this section.

(a) If the ratio of the current expense allocation to total resources is equal to or less than the district's threshold percent, zero;

(b) If the ratio of the current expense allocation to total resources is greater than the district's threshold per cent, the difference between the current expense allocation and the product of the threshold percentage and total resources;

(c) For fiscal year 2016, the product of the non-current expense allocation multiplied by fifty per cent.

(2) In fiscal year 2018 and subsequent fiscal years, payments shall be made to school districts and joint vocational school districts equal to the difference obtained by subtracting the amount described in division (C)(2)(b) of this section from the amount described in division (C)(2)(a) of this section, provided that such amount is greater than zero.

(a) The sum of the payments received by the district under division (C)(1)(b) or (C)(2) of this section for the immediately preceding fiscal year;

(b) One-sixteenth of one per cent of the average of the total taxable value of the district for tax years 2014, 2015, and 2016.

(3)(a) "Total resources" used to compute payments under division (C)(1) of this section shall be reduced to the extent that payments distributed in fiscal year 2015 were attributable to levies no longer charged and payable for tax year 2014.

(b) "Current expense allocation" used to compute payments under division (C)(1) of this section shall be reduced to the extent that the payments distributed in fiscal year 2015 were attributable to levies no longer charged and payable for tax year 2014.

(4) The department of education and workforce shall report to each school district and joint vocational school district the apportionment of the payments under division (C)(1) of this section among the district's funds based on qualifying levies.

(D)(1) Payments in the following amounts shall be made to school districts and joint vocational school districts in tax years 2016 through 2021:

(a) In tax year 2016, the sum of the district's operating TPP fixed-sum levy losses and operating S.B. 3 fixed-sum levy losses.

(b) In tax year 2017, the sum of the district's operating TPP fixed-sum levy losses and eighty per cent of operating S.B. 3 fixed-sum levy losses.

(c) In tax year 2018, the sum of eighty per cent of the district's operating TPP fixed-sum levy losses and sixty per cent of its operating S.B. 3 fixed-sum levy losses.

(d) In tax year 2019, the sum of sixty per cent of the district's operating TPP fixed-sum levy losses and forty per cent of its operating S.B. 3 fixed-sum levy losses.

(e) In tax year 2020, the sum of forty per cent of the district's operating TPP fixed-sum levy losses and twenty per cent of its operating S.B. 3 fixed-sum levy losses.

(f) In tax year 2021, twenty per cent of the district's operating TPP fixed-sum levy losses.

No payment shall be made under division (D)(1) of this section after tax year 2021.

(2) Amounts are payable under division (D) of this section for fixed-sum levy losses only to the extent of such losses for qualifying levies that remain in effect for the current tax year. For this purpose, a qualifying levy levied under section 5705.194 or 5705.213 of the Revised Code remains in effect for the current tax year only if a tax levied under either of those sections is charged and payable for the current tax year for an annual sum at least equal to the annual sum levied by the board of education for tax year 2004 under those sections less the amount of the payment under this division.

(E)(1) For fixed-sum levies for debt purposes, payments shall be made to school districts and joint vocational school districts equal to one hundred per cent of the district's fixed-sum levy loss determined under division (E) of section 5751.20 and division (H) of section 5727.84 of the Revised Code as in effect before July 1, 2015, and paid in tax year 2014. No payment shall be made for qualifying levies that are no longer charged and payable.

(2) Beginning in 2016, by the thirty-first day of January of each year, the tax commissioner shall review the calculation of fixed-sum levy loss for debt purposes determined under division (E) of section 5751.20 and division (H) of section 5727.84 of the Revised Code as in effect before July 1, 2015. If the commissioner determines that a fixed-sum levy that had been scheduled to be reimbursed in the current year is no longer charged and payable, a revised calculation for that year and all subsequent years shall be made.

(F)(1) For taxes levied within the ten-mill limitation for debt purposes in tax year 1998 in the case of electric company tax value losses, and in tax year 1999 in the case of natural gas company tax value losses, payments shall be made to school districts and joint vocational school districts equal to one hundred per cent of the loss computed under division (D) of section 5727.85 of the Revised Code as in effect before July 1, 2015, as if the tax were a fixed-rate levy, but those payments shall extend through fiscal year 2016.

(2) For taxes levied within the ten-mill limitation for debt purposes in tax year 2005, payments shall be made to school districts and joint vocational school districts equal to one hundred per cent of the loss computed under division (D) of section 5751.21 of the Revised Code as in effect before July 1, 2015, as if the tax were a fixed-rate levy, but those payments shall extend through fiscal year 2018.

(G) If all the territory of a school district or joint vocational school district is merged with another district, or if a part of the territory of a school district or joint vocational school district is transferred to an existing or newly created district, the department of education and workforce, in consultation with the tax commissioner, shall adjust the payments made under this section as follows:

(1) For a merger of two or more districts, fixed-sum levy losses, total resources, current expense allocation, and non-current expense allocation of the successor district shall be the sum of such items for each of the districts involved in the merger.

(2) If property is transferred from one district to a previously existing district, the amount of the total resources, current expense allocation, and non-current expense allocation that shall be transferred to the recipient district shall be an amount equal to the total resources, current expense allocation, and non-current expense allocation of the transferor district times a fraction, the numerator of which is the number of pupils being transferred to the recipient district, measured, in the case of a school district, by formula ADM as defined in section 3317.02of the Revised Code or, in the case of a joint vocational school district, by formula ADM as defined for a joint vocational school district in that section, and the denominator of which is the formula ADM of the transferor district.

(3) After December 31, 2010, if property is transferred from one or more districts to a district that is newly created out of the transferred property, the newly created district shall be deemed not to have any total resources, current expense allocation, total allocation, or non-current expense allocation.

(4) If the recipient district under division (G)(2) of this section or the newly created district under division (G)(3) of this section is assuming debt from one or more of the districts from which the property was transferred and any of the districts losing the property had fixed-sum levy losses, the department of education and workforce, in consultation with the tax commissioner, shall make an equitable division of the reimbursements for those losses.

(H) The payments required by divisions (C), (D), (E), (F), and (I) of this section shall be distributed periodically to each school and joint vocational school district by the department of education and workforce unless otherwise provided for. Except as provided in division (D) of this section, if a levy that is a qualifying levy is not charged and payable in any year after 2014, payments to the school district or joint vocational school district shall be reduced to the extent that the payments distributed in fiscal year 2015 were attributable to the levy loss of that levy.

(I) For fiscal years 2022 through 2026, if the total amount to be received under divisions (C) and (E) of this section by any school district that has a nuclear power plant located within its territory is less than the amount the district received under this section in fiscal year 2017, the district shall receive a supplemental payment equal to the difference between the amount to be received under those divisions for the fiscal year and the amount received under this section in fiscal year 2017.

Last updated September 21, 2023 at 9:47 AM

Section 5709.93 | Computation of payments for operating fixed-rate levy losses of local taxing units and public libraries.

• Effective: September 30, 2021
• Latest Legislation: House Bill 110 - 134th General Assembly

(A) As used in this section:

(1) "Taxes charged and payable" means taxes charged and payable after the reduction required by section 319.301 of the Revised Code but before the reductions required by sections 319.302 and 323.152 of the Revised Code.

(2) "Threshold per cent" means two per cent for fiscal year 2016; and, for fiscal year 2017 and thereafter, the sum of the prior year's threshold per cent plus two percentage points.

(3) "Public library" means a county, municipal, school district, or township public library that receives the proceeds of a tax levied under section 5705.23 of the Revised Code.

(4) "Local taxing unit" means a subdivision or taxing unit, as defined in section 5705.01 of the Revised Code, a park district created under Chapter 1545. of the Revised Code, or a township park district established under section 511.23 of the Revised Code, but excludes school districts and joint vocational school districts.

(5) "Municipal current expense allocation" means the sum of the payments received by a municipal corporation in calendar year 2014 for current expense levy losses under division (A)(1)(e)(ii) of section 5727.86 and division (A)(1)(c)(ii) of section 5751.22 of the Revised Code as they existed at that time.

(6) "Current expense allocation" means the sum of the payments received by a local taxing unit or public library in calendar year 2014 for current expense levy losses under division (A)(1) of section 5727.86 and divisions (A)(1) and (2) of section 5751.22 of the Revised Code as they existed at that time, less any reduction required under division (B)(2) of this section.

(7) "TPP inside millage debt levy loss" means payments made to local taxing units in calendar year 2014 under division (A)(3) of section 5751.22 of the Revised Code as that section existed at that time.

(8) "S.B. 3 inside millage debt levy loss" means payments made to local taxing units in calendar year 2014 under section (A)(4) of section 5727.86 of the Revised Code as that section existed at that time.

(9) "Qualifying levy" means a levy for which payment was made in calendar year 2014 under division (A)(1) of section 5727.86 and divisions (A)(1) and (2) of section 5751.22 of the Revised Code as they existed at that time.

(10) "Total resources," in the case of county mental health and disability related functions, means the sum of the amounts in divisions (A)(10)(a) and (b) of this section less any reduction required under division (B)(1) of this section.

(a) The sum of the payments received by the county for mental health and developmental disability related functions in calendar year 2014 under division (A)(1) of section 5727.86 and division (A)(1) of section 5751.22 of the Revised Code as they existed at that time;

(b) With respect to taxes levied by the county for mental health and developmental disability related purposes, the taxes charged and payable for such purposes against all property on the tax list of real and public utility property for tax year 2014.

(11) "Total resources," in the case of county senior services related functions, means the sum of the amounts in divisions (A)(11)(a) and (b) of this section less any reduction required under division (B)(1) of this section.

(a) The sum of the payments received by the county for senior services related functions in calendar year 2014 under division (A)(1) of section 5727.86 and division (A)(1) of section 5751.22 of the Revised Code as they existed at that time;

(b) With respect to taxes levied by the county for senior services related purposes, the taxes charged and payable for such purposes against all property on the tax list of real and public utility property for tax year 2014.

(12) "Total resources," in the case of county children's services related functions, means the sum of the amounts in divisions (A)(12)(a) and (b) of this section less any reduction required under division (B)(1) of this section.

(a) The sum of the payments received by the county for children's services related functions in calendar year 2014 under division (A)(1) of section 5727.86 and division (A)(1) of section 5751.22 of the Revised Code as they existed at that time;

(b) With respect to taxes levied by the county for children's services related purposes, the taxes charged and payable for such purposes against all property on the tax list of real and public utility property for tax year 2014.

(13) "Total resources," in the case of county public health related functions, means the sum of the amounts in divisions (A)(13)(a) and (b) of this section less any reduction required under division (B)(1) of this section.

(a) The sum of the payments received by the county for public health related functions in calendar year 2014 under division (A)(1) of section 5727.86 and division (A)(1) of section 5751.22 of the Revised Code as they existed at that time;

(b) With respect to taxes levied by the county for public health related purposes, the taxes charged and payable for such purposes against all property on the tax list of real and public utility property for tax year 2014.

(14) "Total resources," in the case of all county functions not included in divisions (A)(10) to (13) of this section, means the sum of the amounts in divisions (A)(14)(a) to (e) of this section less any reduction required under division (B)(1) or (2) of this section.

(a) The sum of the payments received by the county for all other purposes in calendar year 2014 under division (A)(1) of section 5727.86 and division (A)(1) of section 5751.22 of the Revised Code as they existed at that time;

(b) The county's percentage share of county undivided local government fund allocations as certified to the tax commissioner for calendar year 2015 by the county auditor under division (J) of section 5747.51 of the Revised Code or division (F) of section 5747.53 of the Revised Code multiplied by the total amount actually distributed in calendar year 2014 from the county undivided local government fund;

(c) With respect to taxes levied by the county for all other purposes, the taxes charged and payable for such purposes against all property on the tax list of real and public utility property for tax year 2014, excluding taxes charged and payable for the purpose of paying debt charges;

(d) The sum of the amounts distributed to the county in calendar year 2014 for the taxes levied pursuant to sections 5739.021 and 5741.021 of the Revised Code;

(e) The sum of amounts distributed to the county from the gross casino revenue county fund from July 2014 through April 2015.

(15) "Total resources," in the case of a municipal corporation, means the sum of the amounts in divisions (A)(15)(a) to (h) of this section less any reduction required under division (B)(1) or (2) of this section.

(a) The sum of the payments received by the municipal corporation in calendar year 2014 for current expense levy losses under division (A)(1) of section 5727.86 and division (A)(1) of section 5751.22 of the Revised Code as they existed at that time;

(b) The municipal corporation's percentage share of county undivided local government fund allocations as certified to the tax commissioner for calendar year 2015 by the county auditor under division (J) of section 5747.51 of the Revised Code or division (F) of section 5747.53 of the Revised Code multiplied by the total amount actually distributed in calendar year 2014 from the county undivided local government fund;

(c) The sum of the amounts distributed to the municipal corporation in calendar year 2014 pursuant to section 5747.50 of the Revised Code;

(d) With respect to taxes levied by the municipal corporation, the taxes charged and payable against all property on the tax list of real and public utility property for municipal current expenses for tax year 2014;

(e) The amount of admissions tax collected by the municipal corporation in calendar year 2013, or if such information has not yet been reported to the tax commissioner, in the most recent year before 2013 for which the municipal corporation has reported data to the commissioner;

(f) The amount of income taxes collected by the municipal corporation in calendar year 2013 as certified to the tax commissioner under section 5747.50 of the Revised Code in 2013, or if such information has not yet been reported to the commissioner, in the most recent year before 2014 for which the municipal corporation has reported such data to the commissioner;

(g) The sum of the amounts distributed to the municipal corporation from the gross casino revenue host city fund from July 2014 through April 2015;

(h) The sum of the amounts distributed to the municipal corporation from the gross casino revenue county fund from July 2014 through April 2015.

(16) "Total resources," in the case of a township, means the sum of the amounts in divisions (A)(16)(a) to (c) of this section less any reduction required under division (B)(1) or (2) of this section.

(a) The sum of the payments received by the township in calendar year 2014 pursuant to division (A)(1) of section 5727.86 of the Revised Code and division (A)(1) of section 5751.22 of the Revised Code as they existed at that time, excluding payments received for debt purposes;

(b) The township's percentage share of county undivided local government fund allocations as certified to the tax commissioner for calendar year 2015 by the county auditor under division (J) of section 5747.51 of the Revised Code or division (F) of section 5747.53 of the Revised Code multiplied by the total amount actually distributed in calendar year 2014 from the county undivided local government fund;

(c) With respect to taxes levied by the township, the taxes charged and payable against all property on the tax list of real and public utility property for tax year 2014 excluding taxes charged and payable for the purpose of paying debt charges or from levies imposed under section 5705.23 of the Revised Code.

(17) "Total resources," in the case of a local taxing unit that is not a county, municipal corporation, township, or public library means the sum of the amounts in divisions (A)(17)(a) to (e) of this section less any reduction required under division (B)(1) of this section.

(a) The sum of the payments received by the local taxing unit in calendar year 2014 pursuant to division (A)(1) of section 5727.86 of the Revised Code and division (A)(1) of section 5751.22 of the Revised Code as they existed at that time;

(b) The local taxing unit's percentage share of county undivided local government fund allocations as certified to the tax commissioner for calendar year 2015 by the county auditor under division (J) of section 5747.51 of the Revised Code or division (F) of section 5747.53 of the Revised Code multiplied by the total amount actually distributed in calendar year 2014 from the county undivided local government fund;

(c) With respect to taxes levied by the local taxing unit, the taxes charged and payable against all property on the tax list of real and public utility property for tax year 2014 excluding taxes charged and payable for the purpose of paying debt charges or from a levy imposed under section 5705.23 of the Revised Code;

(d) The amount received from the tax commissioner during calendar year 2014 for sales or use taxes authorized under sections 5739.023 and 5741.022 of the Revised Code;

(e) For institutions of higher education receiving tax revenue from a local levy, as identified in section 3358.02 of the Revised Code, the final state share of instruction allocation for fiscal year 2014 as calculated by the chancellor of higher education and reported to the state controlling board.

(18) "Total resources," in the case of a county, municipal corporation, school district, or township public library that receives the proceeds of a tax levied under section 5705.23 of the Revised Code, means the sum of the amounts in divisions (A)(18)(a) to (d) of this section less any reduction required under division (B)(1) of this section.

(a) The sum of the payments received by the county, municipal corporation, school district, or township public library in calendar year 2014 pursuant to sections 5727.86 and 5751.22 of the Revised Code, as they existed at that time, for fixed-rate levy losses attributable to a tax levied under section 5705.23 of the Revised Code for the benefit of the public library;

(b) The public library's percentage share of county undivided local government fund allocations as certified to the tax commissioner for calendar year 2015 by the county auditor under division (J) of section 5747.51 of the Revised Code or division (F) of section 5747.53 of the Revised Code multiplied by the total amount actually distributed in calendar year 2014 from the county undivided local government fund;

(c) With respect to a tax levied pursuant to section 5705.23 of the Revised Code for the benefit of the public library, the amount of such tax that is charged and payable against all property on the tax list of real and public utility property for tax year 2014 excluding any tax that is charged and payable for the purpose of paying debt charges;

(d) The sum of the amounts distributed to the library district from the county public library fund in calendar year 2014, as reported to the tax commissioner by the county auditor.

(19) "Municipal current expense property tax levies" means all property tax levies of a municipality, except those with the following levy names: library; airport resurfacing; bond or any levy name including the word "bond"; capital improvement or any levy name including the word "capital"; debt or any levy name including the word "debt"; equipment or any levy name including the word "equipment," unless the levy is for combined operating and equipment; employee termination fund; fire pension or any levy containing the word "pension," including police pensions; fireman's fund or any practically similar name; sinking fund; road improvements or any levy containing the word "road"; fire truck or apparatus; flood or any levy containing the word "flood"; conservancy district; county health; note retirement; sewage, or any levy containing the words "sewage" or "sewer"; park improvement; parkland acquisition; storm drain; street or any levy name containing the word "street"; lighting, or any levy name containing the word "lighting"; and water.

(20) "Operating fixed-rate levy loss" means, in the case of local taxing units other than municipal corporations, fixed-rate levy losses of levies imposed for purposes other than paying debt charges or, in the case of municipal corporations, fixed-rate levy losses of municipal current expense property tax levies.

(21)(a) "Qualifying municipal corporation" means a municipal corporation in the territory of which a qualifying end user is located.

(b) "Qualifying end user" means an end user of at least seven million qualifying kilowatt hours of electricity annually.

(c) "Qualifying kilowatt hours" means kilowatt hours of electricity generated by a renewable energy resource, as defined in section 5727.01 of the Revised Code, using wind energy and the distribution of which is subject to the tax levied under section 5727.81 of the Revised Code for any measurement period beginning after June 30, 2015.

(22) Any term used in this section has the same meaning as in section 5727.84 or 5751.20 of the Revised Code unless otherwise defined by this section.

(B)(1) "Total resources" used to compute payments to be made under division (C) of this section shall be reduced to the extent that payments distributed in calendar year 2014 were attributable to levies no longer charged and payable.

(2) "Current expense allocation" used to compute payments to be made under division (C) of this section shall be reduced to the extent that payments distributed in calendar year 2014 were attributable to levies no longer charged and payable.

(C)(1) Except as provided in division (D) of this section, the tax commissioner shall compute payments for operating fixed-rate levy losses of local taxing units and public libraries for fiscal year 2016 and each year thereafter as prescribed in divisions (C)(1)(a) and (b) of this section:

(a) For public libraries and local taxing units other than municipal corporations:

(i) If the ratio of current expense allocation to total resources is equal to or less than the threshold per cent, zero;

(ii) If the ratio of current expense allocation to total resources is greater than the threshold per cent, the current expense allocation minus the product of total resources multiplied by the threshold per cent.

(b) For municipal corporations:

(i) If the ratio of the municipal current expense allocation to total resources is equal to or less than the threshold per cent, zero;

(ii) If the ratio of the municipal current expense allocation to total resources is greater than the threshold per cent, the municipal current expense allocation minus the product of total resources multiplied by the threshold per cent.

(2) For any local taxing unit or public library with operating fixed-rate levy losses greater than zero, the operating fixed-rate levy loss shall be allocated among all qualifying operating fixed-rate levies in proportion to each such levy's share of the payments received in tax year 2014. In fiscal year 2016 and thereafter, if a levy to which operating fixed-rate levy loss is allocated is no longer charged and payable, the payment to the local taxing unit or public library shall be reduced by the amount allocated to the levy that is no longer charged and payable.

(D)(1) Except as provided in division (D)(2) of this section, the tax commissioner shall make payments to local taxing units equal to the sum of TPP inside millage debt levy loss and S.B. 3 inside millage debt levy loss. No payment shall be made if the levy for which the levy loss is computed is not charged and payable for debt purposes in fiscal year 2016 or any year thereafter.

(2) No payment shall be made for TPP inside millage debt levy loss in calendar year 2018 or thereafter. No payment shall be made for S.B.3 inside millage debt levy loss in calendar year 2017 or thereafter.

(E) For a qualifying municipal corporation, the tax commissioner shall compute payments for fiscal year 2016 and each ensuing fiscal year in an amount equal to the amount of tax imposed under section 5727.81 of the Revised Code and paid on the basis of qualifying kilowatt hours of electricity distributed through the meter of a qualifying end user located in the municipal corporation for measurement periods ending in the preceding calendar year. The payment shall be computed regardless of whether the qualifying municipal corporation qualifies for a payment under any other division of this section for the fiscal year in which the payment is computed under this division. For the purposes of this division, the commissioner may require an electric distribution company distributing qualifying kilowatt hours or, if the end user is a self-assessing purchaser, the end user, to report to the commissioner the number of qualifying kilowatt hours distributed through the meter of the qualifying end user.

(F)(1) The payments required to be made under divisions (C), (D), and (H) of this section shall be paid from the local government tangible property tax replacement fund to the county undivided income tax fund in the proper county treasury. Beginning in August 2015, one-half of the amount determined under each of those divisions shall be paid on or before the last day of August each year, and one-half shall be paid on or before the last day of February each year. Within thirty days after receipt of such payments, the county treasurer shall distribute amounts determined under this section to the proper local taxing unit or public library as if they had been levied and collected as taxes, and the local taxing unit or public library shall allocate the amounts so received among its funds in the same proportions as if those amounts had been levied and collected as taxes.

(2) On or before the last day of August and of February of each fiscal year that follows a calendar year in which taxes are paid on the basis of qualifying kilowatt hours of electricity distributed through the meter of a qualifying end user located in a qualifying municipal corporation, one-half of the payment computed under division (E) of this section shall be paid from the local government tangible personal property tax replacement fund directly to the qualifying municipal corporation. The municipal corporation shall credit the payments to a special fund created for the purpose of providing grants or other financial assistance to the qualifying end user or to compensate the municipal corporation for municipal income tax or other tax credits or reductions as the legislative authority may grant to the qualifying end user. Such grants or other financial assistance may be provided for by ordinance or resolution of the legislative authority of the qualifying municipal corporation and may continue for as long as is provided by the ordinance or resolution.

(G) If all or a part of the territories of two or more local taxing units are merged, or unincorporated territory of a township is annexed by a municipal corporation, the tax commissioner shall adjust the payments made under this section to each of the local taxing units in proportion to the square mileage of the merged or annexed territory as a percentage of the total square mileage of the jurisdiction from which the territory originated, or as otherwise provided by a written agreement between the legislative authorities of the local taxing units certified to the commissioner not later than the first day of June of the calendar year in which the payment is to be made.

(H) For fiscal years 2022 through 2026, if the total amount to be received under division (C) of this section by a joint fire district that has a nuclear power plant located within its territory is less than the amount the district received under this section in fiscal year 2017, the district shall receive a supplemental payment equal to the difference between the amount to be received under that division for the fiscal year and the amount received under this section in fiscal year 2017.

Last updated August 4, 2021 at 3:33 PM