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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.

New York, Kansas, Massachusetts, and Delaware Become the latest States to Adopt Full Practice Authority for Nurse Practitioners

While the COVID-19 pandemic certainly created many obstacles and hardships, it also created many opportunities to try doing things differently. This can be seen in the instant rise of remote work opportunities, telehealth visits, and virtual meetings. Many States took the challenges of the pandemic and turned them into an opportunity to adjust the regulations governing licensed professionals, including for advanced practice registered nurses (APRNs).

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.