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Senate Bill 39 Allows Up to $100 Million in Business Incentive Credits for Transformational Mixed-Use Development in the State of Ohio

Client Alert

Ohio Governor Mike DeWine signed Senate Bill 39 on December 29, 2020, which created a new tax credit applicable to insurance premium taxes. This tax credit is designed to provide funding for a transformational mixed-use development or “TMUD” in the state of Ohio.

Effective as of March 31, 2021, Senate Bill 39 authorizes the Ohio Tax Credit Authority (“OTCA”), within the Ohio Development Services Agency (“ODSA”), to award up to $100 million of total business incentive credits in each of the fiscal years 2020-2023, which will then be applied against insurance premium taxes. Individual projects are capped at $40 million. Of the $100 million, there remains a reserved amount of $20 million of such credits each fiscal year for projects not located within a “Major City”, which is within ten miles of a municipality with more than 100,000 people.           

What Qualifies as a TMUD Project?

According to O.R.C. 122.09, the development project may be certified as a TMUD by meeting the following requirements:

  1. Must consist of new construction or redevelopment, rehabilitation, or expansion of an existing vacant structure, or a combination of the two; and
  2. Must have a “transformational economic impact” on the site and surrounding area. Transformational economic impact can be measured through the estimated increased tax collections resulting from the increased activity of the development, which must exceed 10% of the development costs within five (5) years of certification (as measured by a preliminary economic impact study, although not yet defined); and
  3. Must be mixed-use (integrating some combination of retail, office, residential, recreation, structured parking, or other similar uses); and
  4. Must include a structure or structures that meet certain height, square footage, or increased payroll requirements (urban projects must include at least one new or previously vacant building that is a) at least 15 stories high, or b) has a floor area of at least 350,000 square feet, or c) after completion will be the site of employment accounting for at least $4 million in annual payroll, or d) includes two or more connected buildings that collectively have a floor area exceeding 350,000 square feet); and
  5. Cannot be completed unless the applicant receives the credit; and
  6. Must have estimated development costs exceeding $50 million if the project is located within ten miles of a Major City.

Who Can Apply?

Those who may apply for these TMUDs include either a) property owners, or b) insurance companies that contribute capital which is then used in the planning or construction of this type of eligible development. Insurance companies may ultimately claim this credit, as it is a credit against an entity’s Ohio insurance premium taxes. A property owner who originally applies and receives the TMUD credit may either transfer it to an insurance company or sell or transfer the rights to that credit to others in order to raise project capital.

What’s Next?

The state is currently undertaking rulemaking for this new incentive and developing program guidelines. These guidelines, as defined by the Director of ODSA, are expected to be released within the next 30 days. All TMUD projects must be certified by the OTCA by June 30, 2023.

For additional questions on this tax credit, please contact BMD Member Jason Butterworth at jabutterworth@bmdllc.com or (330) 374-3216.


The Ohio Chemical Dependency Professionals Board’s Latest Batch of Rules: What Providers Should Know

The Ohio Chemical Dependency Professionals Board has introduced new rules and amendments, covering various aspects such as CDCA certificate requirements, expanded services for LCDCs and CDCAs, remote supervision, and reciprocity application requirements. Notable changes include revised criteria for obtaining a CDCA certification, expanded services for LCDCs and CDCAs, and updated ethical obligations for licensees and certificate holders, including non-discrimination, confidentiality, and anti-sexual harassment measures.

Governor Mike DeWine and The Ohio State University Introduce the SOAR Study on Ohio Mental Illness

On January 19, Ohio Gov. Mike DeWine and The Ohio State University announced a new research initiative, the State of Ohio Adversity and Resilience (“SOAR”) study, which will investigate all factors influencing Ohio’s mental illness and addiction epidemic.

CHANGING TIDES: Summary and Effects of Burnett et. al. v. National Ass’n of Realtors, et. al.

In April 2019, a class-action Complaint was filed in federal court for the Western District Court for Missouri arguing that the traditional payment agreements employed by many across the United States amounted to conspiracy resulting in the artificial increase in brokerage commissions. Plaintiffs, a class-action group comprised of sellers, argued that they paid excessive brokerage commissions upon the sale of their home as a result of the customary payment structure where Sellers agree to pay the full commission on the sale of their property, with Seller’s agent notating the portion of commission they are willing to pay to a Buyer’s agent at closing on the MLS or other similar system.

The Ohio Board of Pharmacy’s Latest Batch of Rules: What Providers Should Know

The Ohio Board of Pharmacy released several new rules and proposed amendments to existing rules over the past month that will significantly impact pharmacy operations. Topics range from updates to the Terminal Distributor of Dangerous Drugs license to mobile clinics to mandatory rest breaks for pharmacists of outpatient pharmacies. A summary of the proposed changes is below, along with instructions for commenting on the rules. Your BMD healthcare attorney can help write comment letters and submit the comments on your behalf as well.

Employee or Independent Contractor? New Guidance Issued by the Department of Labor

On January 9, 2024, the U.S. Department of Labor (DOL) issued its long-awaited final rule — effective March 11, 2024 — revising its prior interpretation of worker classifications under the federal Fair Labor Standards Act (FLSA). The new final rule rescinds the standard previously established in 2021, in turn, shifting the analysis of whether a worker is an employee (versus an independent contractor) of a business from a more streamlined “economic reality” test to a more complex “totality of the circumstances” standard.