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Bill Summary · HB 882

Overview

HB 882 (136th General Assembly, Ohio) introduces a mechanism for local governments to receive state payments to offset revenue losses from delinquent property taxes. The bill creates a new statutory provision, Sec. 5721.51, enabling county auditors to request funds from a state program that draws on the unclaimed funds process to reimburse local taxing districts for a portion of delinquent taxes that remain uncollected on eligible delinquent land. The appropriation mechanism is set at $150 million plus any repayments, with safeguards to protect the state’s unclaimed funds trust fund.

Purpose and Intent

  • To provide temporary, targeted financial relief to local governments for revenue shortfalls caused by delinquent property taxes.
  • To stabilize local budgets by enabling counties to access funds that mirror uncollected tax revenue, thereby reducing the need for immediate local adjustments (e.g., cuts to services or reliance on reserves).

Key Provisions

  • Definition of eligible delinquent land:
    • Delinquent land whose total delinquent taxes do not exceed 25% of the auditor’s fair market value.
  • Annual application process for county auditors:
    • Applications may be submitted once per year by October 1.
    • Applicants certify the amount requested, limited to uncollected delinquent taxes for eligible land that have not previously been funded under this program.
  • State review and disbursement:
    • The Director of Budget and Management reviews and decides on requests by October 31.
    • Approved payments are transferred from the Unclaimed Funds Trust Fund to the Delinquent Tax Reimbursement Fund, then disbursed to the county auditor to credit a special fund in the county treasury.
  • Distribution to local taxing districts:
    • Funds received are passed through to local taxing districts in the same manner as delinquent tax collections.
  • Recapture and repayment:
    • If delinquent taxes are subsequently recovered by a county treasurer or prosecuting attorney, amounts up to the funded basis are redirected to the state for deposit back into the unclaimed funds trust fund.
    • The county must repay the state, from its general fund, any payment received under this section within six years.
  • Limits and protections:
    • The total payments approved cannot exceed $150 million plus any repayments.
    • The Director cannot approve payments that would deplete the unclaimed funds trust fund below levels needed to pay pending and anticipated claims under Chapter 169.
  • Appropriation and administration:
    • An appropriation of $150 million is established for fiscal years 2026 and 2027 (split across two columns in the act’s table).
    • The Department of Commerce, in coordination with the Office of Budget and Management, will distribute funds to local districts under the new section.
    • Expenditures are to be accounted for as if governed by the provisions of HB 96 (136th G.A.).

Affected Parties

  • Primary beneficiaries: County auditors and local taxing districts (cities, villages, townships, school districts, etc.) that receive delinquent tax distributions.
  • State actors: Director of Budget and Management, Department of Commerce, Treasurer, and Budget and Management Office.
  • Recipients: Local governments and their taxing districts that would receive distributions to offset shortfalls from delinquent property taxes.

Procedural and Timeline Aspects

  • Eligibility window: Each county auditor may apply once per year, by October 1.
  • Review window: Director of Budget and Management must act by October 31.
  • Funding flow: Eligible payments move from unclaimed funds to delinquent tax reimbursement fund, then to county special funds, and finally to local taxing districts.
  • Repayment/recapture: Any recovered delinquent taxes that relate to funded amounts are remitted back to the unclaimed funds trust fund; counties must repay the state within six years.
  • Budgetary controls: Aggregate payments capped at $150 million plus repayments; must maintain sufficient balance in the unclaimed funds trust fund for other claims.

Financials

  • Estimated total appropriation: $150 million for fiscal years 2026 and 2027 (two-year appropriation).
  • Ongoing repayments: Expected repayments from recovered delinquent taxes and required six-year repayment window for counties.
  • Oversight: Expenditure and appropriation accounting aligned with existing HB 96 provisions.

Notes

  • The bill defines specific eligibility criteria tied to the ratio of delinquent taxes to appraised value (≤ 25%) to target only relatively smaller delinquent burdens.
  • The mechanism leverages the state’s unclaimed funds framework to support local revenue while preserving state-level fiscal safeguards.

Compiled from official sources — confirm details with the bill’s official record.

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