HB 335

(136th General Assembly)
  (Substitute House Bill Number 335)
  AN ACT
       To amend section 5705.31 and to enact section 5705.316 of the Revised Code to limit
  revenue increases from inside millage levies occurring due to a reappraisal or
  update.
Be it enacted by the General Assembly of the State of Ohio:
  SECTION 1. That section 5705.31 be amended and section 5705.316 of the Revised Code be
enacted to read as follows:
  Sec. 5705.31. The county auditor shall present to the county budget commission the annual
tax budgets submitted under sections 5705.01 to 5705.47 of the Revised Code, together with an
estimate prepared by the auditor of the amount of any state levy, the rate of any school tax levy as
previously determined, the tax commissioner's estimate of the amount to be received in the county
public library fund, the tax rates provided under section 5705.281 of the Revised Code if adoption of
the tax budget was waived under that section, and such other information as the commission requests
or the tax commissioner prescribes.
  The budget commission shall examine such budget and, if the taxing authority is a board of
education that has elected to include projections pursuant to division (E) of section 5705.391 of the
Revised Code, shall examine such projections. Using the budget and, if applicable, included
projections, the budget commission shall ascertain the total amount proposed to be raised in the
county for the purposes of each subdivision and other taxing units in the county and the need for
those amounts. Except as otherwise provided in this section, the county budget commission may
reduce the amount to be raised by any levy pursuant to section 5705.32 of the Revised Code.
  The commission shall ascertain that the following levies have been properly authorized and,
if so authorized, shall approve them without modification:
  (A) All levies in excess of the ten-mill limitation unless the subdivision or taxing unit
requests an amount requiring a lower rate for the succeeding fiscal year. Such a request for an
amount requiring a lower rate applies only to the succeeding fiscal year unless the subdivision or
taxing unit expressly states that the request is permanent.
  (B) All levies for unsatisfied debt charges, including levies that remain necessary to pay
notes issued for emergency purposes;
  (C) The levies prescribed by division (B) of sections 742.33 and 742.34 of the Revised
Code;
  (D) Except as otherwise provided in this division, a minimum levy within the ten-mill
limitation for the current expense and debt service of each subdivision or taxing unit, which shall
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equal two-thirds of the average levy for current expenses and debt service allotted within the fifteen-
mill limitation to such subdivision or taxing unit during the last five years the fifteen-mill limitation
was in effect unless such subdivision or taxing unit requests an amount requiring a lower rate for the
succeeding fiscal year, or if it expressed its intent to forgo collections from such a levy under
division (E) of section 5705.29 of the Revised Code. Such a request for an amount requiring a lower
rate applies only to the succeeding fiscal year unless the subdivision or taxing unit expressly states
that the request is permanent.
  Except as provided in section 5705.312 of the Revised Code, if the levies required in
divisions (B) and (C) of this section for the subdivision or taxing unit equal or exceed the entire
minimum levy of the subdivision as fixed, the minimum levies of the other subdivisions or taxing
units shall be reduced by the commission to provide for the levies and an operating levy for the
subdivision. Such additional levy shall be deducted from the minimum levies of each of the other
subdivisions or taxing units, but the operating levy for a school district shall not be reduced below a
figure equivalent to forty-five per cent of the millage available within the ten-mill limitation after all
the levies in divisions (B) and (C) of this section have been provided for.
  If a municipal corporation and a township have entered into an annexation agreement under
section 709.192 of the Revised Code in which they agree to reallocate their shares of the minimum
levies established under this division and if that annexation agreement is submitted along with the
annual tax budget of both the township and the municipal corporation, then, when determining the
minimum levy under this division, the auditor shall allocate, to the extent possible, the minimum
levy for that municipal corporation and township in accordance with their annexation agreement.
  Divisions (A) to (D) of this section are mandatory, and commissions shall be without
discretion to reduce such minimum levies except as provided in such divisions or as required in
section 5705.316 of the Revised Code.
  If any debt charge is omitted from the budget, the commission shall include it therein.
  Sec. 5705.316. (A) As used in this section:
  (1) "Taxes charged and payable" means real property taxes, or manufactured home taxes
assessed pursuant to section 4503.06 of the Revised Code, that are charged and payable after
reductions required by sections 319.301, 319.302, 323.152, 323.158, 319.304, 4503.065, and
4503.0610 of the Revised Code.
  (2) "Current taxes charged and payable" means, for a levy, the taxes charged and payable for
the current tax year, in the case of real property, or the following tax year, in the case of
manufactured or mobile homes on the manufactured home tax list, excluding any taxes charged and
payable against property, or any portion of property, that was not taxed by the taxing district in the
most recent tax year to which section 5715.24 of the Revised Code applied in the county, in the case
of real property, or in the following tax year, in the case of manufactured or mobile homes on the
manufactured home tax list.
  (3) "Base taxes charged and payable" means, for a levy, the taxes charged and payable for
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the tax year immediately preceding the current tax year, in the case of real property, or the current
tax year, in the case of manufactured or mobile homes on the manufactured home tax list, excluding
any taxes charged and payable against property, or any portion of property, that was not taxed by the
taxing district in the most recent tax year to which section 5715.24 of the Revised Code applied in
the county, in the case of real property, or in the following tax year, in the case of manufactured or
mobile homes on the manufactured home tax list.
  (4) "County budget commission" means a joint budget commission in the context of a taxing
unit with territory located in two or more counties.
  (5) "Inflation factor" means, for a tax year, the greater of zero per cent or the percentage
change in the gross domestic product deflator computed over the three preceding tax years, as
determined under division (F) of this section.
  (6) "Reappraisal or triennial update" means a tax year in which section 5715.24 of the
Revised Code applies in the county.
  (B) Notwithstanding division (D) of section 133.25 of the Revised Code and except as
provided in division (D) of this section, in September of each tax year in which a county undergoes a
reappraisal or triennial update, the county budget commission shall adjust the rate of any levy within
the ten-mill limitation so that the increase in current taxes charged and payable for that levy over the
base taxes charged and payable for that levy do not exceed the product of the base taxes charged and
payable and the inflation factor certified under division (F) of this section for that tax year, rounded
to the nearest multiple of one hundred dollars.
  (C) The commission shall certify each rate reduced under division (A) of this section to the
county auditor not later than the first day of December. In the case of property on the real property
tax list, the adjusted rates shall apply to the tax year in which the adjusted rates are certified and to
each ensuing tax year, until the next tax year in which adjusted rates are certified under this section.
In the case of manufactured or mobile homes on the manufactured home tax list, the adjusted rates
shall apply to the tax year following the year in which the adjusted rates are certified and to each
ensuing tax year, until the tax year following the next year in which adjusted rates are certified under
this section. Notwithstanding any other section of the Revised Code to the contrary, a county budget
commission shall not reallocate mills reduced pursuant to this section to any other taxing unit.
  (D) For a taxing unit that elects to forgo revenue from or otherwise voluntarily reduce the
rate of a levy within the ten-mill limitation for one or more tax years, beyond which would be
required under division (B) of this section, the calculation of the limit under division (B) of this
section in subsequent tax years shall be based on the taxes charged and payable for the tax year
preceding such voluntary reduction. Nothing in this section requires increasing the rate of a levy
above what it was before the operation of this section.
  (E) If the current taxes charged and payable for a levy within the ten-mill limitation do not
increase for a tax year to which section 5715.24 of the Revised Code applies in the county compared
to the base taxes charged and payable, then the county auditor, in September of that year, shall
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calculate the increased rate of the levy that would cause the levy's current taxes charged and payable
to be the same as the levy's base taxes charged and payable, rounded to the nearest one hundredths
of one mill, and shall certify to the applicable taxing unit the increased rate. A taxing unit, not later
than the first day of November, may adopt and certify to the county auditor a resolution or ordinance
requesting that the levy be levied up to the rate certified by the county auditor under this division.
The resolution or ordinance shall also be accompanied by information demonstrating the taxing
unit's need for the higher rate. The county auditor, upon receipt of this certification, shall convene
the county budget commission, which shall decide whether to approve, partially approve, or deny
the taxing unit's request for an increased rate based on its evaluation of the taxing unit's need for the
increase. If it wholly or partially approves the increase, the commission shall certify the amount of
the rate of increase to the county auditor not later than the first day of December. The increased rate
shall apply to the current tax year, or the ensuing tax year for manufactured or mobile homes on the
manufactured home tax list, and each ensuing year until the next tax year in which an adjusted rate
for the levy is certified under this section. Nothing in this division allows a county budget
commission or taxing unit to exceed the ten-mill limitation.
  (F) The tax commissioner shall annually determine the percentage change in the gross
domestic product deflator determined by the bureau of economic analysis of the United States
department of commerce from the first day of January of the third preceding calendar year to the last
day of December of the preceding calendar year. The commissioner shall certify the resulting
amount to each county auditor whose county undergoes a reappraisal or triennial update not later
than the first day of September of each year.
        SECTION 2. That existing section 5705.31 of the Revised Code is hereby repealed.
  SECTION 3. The amendment or enactment by this act of sections 5705.31 and 5705.316 of the
Revised Code applies, in the case of property on the real property tax list, to tax year 2026 and every
tax year thereafter and, in the case of manufactured or mobile homes on the manufactured home tax
list, to tax year 2027 and every tax year thereafter.
Sub. H. B. No. 335  136th G.A.
     Speaker ___________________ of the House of Representatives.
  President ___________________ of the Senate.
Passed ________________________, 20____
Approved ________________________, 20____
  Governor.
Sub. H. B. No. 335  136th G.A.
  The section numbering of law of a general and permanent nature is
complete and in conformity with the Revised Code.
  Director, Legislative Service Commission.
Filed in the office of the Secretary of State at Columbus, Ohio, on the ____
day of ___________, A. D. 20____.
  Secretary of State.
File No. _________       Effective Date ___________________