During this past week, Senate Bill 39 (SB 39) emerged from the House Economic and Workforce Development Committee and was reported to the House Rules Committee. Although it has not yet received a floor vote, it is one step closer to passage. The Ohio Chamber offered a letter of support in both the Senate and House and continues to support the passage of the bill.
In the version that passed the Senate, SB 39 would provide an insurance premium tax credit for an investment in a project defined as a transformational mixed-use development. Such projects require an investment of at least $50 million, with a building that has at least 15 floors, a building, or two connected buildings, with at least 350,000 square feet, that contains a combination of retail, office, residential, recreational, structural parking or other similar uses, and has an economic impact on the development site and the surrounding area.
Senator Schuring has worked tirelessly with interested parties, members of the House and others throughout the process, often appearing at the hearings in the House to offer testimony during the eight hearings the bill had in the House Economic and Workforce Development Committee. Those conversations have led to a substitute version of the bill that has broadened the scope of the program. However, it is still, at its heart, an economic development tool that can be used to attract investment that will lead to business expansion and economic development in the area surrounding the project.
The latest version of SB 39 sets aside a pool of the available funds for less populous areas, and for those projects the building only needs to be four floors high with a total square footage of 75,000 sq. ft. For projects near a major city, the building needs to be 10 floors high and contain at least 250,000 square feet. The latest version also caps the credit for single project and credit approvals sunset on June 30, 2022. The Ohio Tax Credit Authority accepts and process applications and administers the tax credit.
A unique feature with this economic development tool is the requirement that the second half of the award (5% of development cost) is not awarded until an increase in taxes in the area of the project exceed 5% of development costs. In other words, the tax credit is paid for by the demonstrated increase in taxes at and near the project site. While such a law will not have a wide application, it will have a dramatic impact when used. As stated in our mission – the Ohio Chamber of Commerce aggressively champions free enterprise, economic competitiveness and growth for the benefit of all Ohioans — SB 39 will assist with this mission, and we support passage of SB 39.