30-Year Tax Increment Financing Exemptions Now Available For Certain Large TIFs

Starting October 3, 2023, Amended Substitute House Bill 33 (“HB 33”) provides Ohio municipal corporations, counties, and townships the opportunity to extend certain tax increment financing exemption (“TIF”) provided in Sections 5709.41(B), 5709.41, 5709.73(B), and 5709.78(A) of the Ohio Revised Code for an additional period of up to 30 years.

As a result of HB 33, Section 5709.51 of the Ohio Revised Code now permits the following TIF extensions:

1. Between October 3, 2023 and December 31, 2023, TIF extensions if service payments in lieu of taxes by the owner(s) of the TIF property exceeded $1.5 million in 2022.
2. On or after January 1, 2024, TIF extensions if service payments received in the calendar year preceding the adoption of the amendment to the TIF legislation exceeded $1.5 million, but did not exceed $1.5 million in any previous calendar year.    
3. Extensions if the legislative authority of the applicable political subdivision determines that the service payments in lieu of taxes by the owner(s) of the TIF property have not yet reached $1.5 million, but will exceed $1.5 million in any future year. While legislative discretion is generally not subject to judicial review in the absence of bad faith, abuse of power or arbitrary action, in making its determination, we recommend that the legislative authority should include information supporting its determination in the amendment to the TIF legislation.

If the extension is adopted by the legislative authority of the applicable political subdivision, the extended duration of the TIF must be a “non-school TIF” – that is, the city, local, or exempted village school district must be compensated in an amount equal in value to the amount of taxes that would be payable to such school district if the improvements had not been exempted from taxation of the additional period.