Last Call for Non-School Incentive District TIFs

With Fall almost upon us, the window of opportunity is rapidly closing for Ohio municipalities to establish non-school tax increment financing (TIF) incentive districts before year’s end. This timeline only impacts the ability to capture increases in value that may have occurred after January 1, 2024 to be on time for tax year 2025. An Ohio municipality may create a TIF incentive district by adopting an ordinance to that effect.[1] Incentive districts have the ability to TIF both commercial and residential improvements, as opposed to parcel TIFs, which may only exempt commercial improvements.[2] Due to statutorily required notices and hearings, municipalities need significant lead time to create incentive districts—even if these incentive districts will include completely “Non-School TIFs” (i.e., TIFs that compensate schools 100% of the taxes they would receive absent the TIF’s exemption). Non-School TIFs avoid triggering additional school approvals under the Ohio Revised Code (R.C.).[3] TIFs subject to school approval are beyond the scope of this article.

With this context in mind, we have sketched out the timeframes applicable to the formation of Non-School TIF incentive districts. Before the formation process begins, however, a municipality should prepare the relevant draft documents. In summary, these drafts can include:

• An economic development plan, as described at R.C. 5709.40(A)(5)(f);
• A certification of the economic development plan by the municipal engineer;
• A TIF ordinance; and
• all required notices to county, school district, joint vocational school district, and certain property owners permitted to exclude themselves from the TIF pursuant to R.C. 5709.40. Once drafting is complete, an Ohio municipality should next turn its attention to the statutory steps in the formation process.

Out of the numerous statutory requirements for the formation process, we call attention to several timeframes that have the practical effect of making it impossible for municipalities to create a TIF incentive district beyond a certain date:

• First, a municipality must schedule a public hearing that will allow owners of property located in the proposed incentive district the right to exclude their property from the district (Initial Public Hearing).[4] The municipality must provide at least 30 days’ prior notice of the Initial Public Hearing to all owners of real property located within the proposed incentive district via first class mail.[5]
• Second, the Initial Public Hearing described in the first step must occur at least 30 days prior to the municipality’s adoption date of the applicable TIF ordinance. This second step, in combination with the first, means at least 60 days lead time for creating a TIF incentive district.
• Third, if the TIF incentive district lasts for more than 10 years or exempts more than 75% of real property taxes, a municipality must provide to the county at least 45 business days’ prior notice of the intended adoption of the TIF ordinance (County Notice).[6] The county will then have 30 days after receipt of notice to object via certified resolution to the municipality.[7]

Assuming a municipality could hold a meeting to adopt a TIF ordinance on December 31st, and setting aside, for purposes of illustration, all practical realities related to municipality council schedules, negotiating with stakeholders, and drafting documents, the very latest dates these keys steps can occur this year are:

• Last day to send County Notice: Thursday, October 24, 2024
• Last day to send notice of Initial Public Hearing: Friday, November 1, 2024
• Last day to convene Initial Public Hearing: Sunday, December 1, 2024
• Last day to adopt TIF ordinance: Tuesday, December 31, 2024

Since many Ohio municipal councils only meet twice a month and must work around weekends and holidays, we recommend municipalities interested in forming non-school TIF incentive districts reach out to as soon as possible for consultation.

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[1] R.C. 5709.40(C).

[2] R.C. 5709.40(B).

[3] R.C. 5709.40(D)(1).

[4] R.C. 5709.40(C)(2)(a).

[5] Id.

[6] R.C. 5709.40(E)(1).

[7] R.C. 5709.40(E)(2).