Ohio Economic Development Manual – 2017 Dear Fellow Ohioans, Economic development is the engine that helps power Ohio’s prosperity. A variety of economic development tools — from tax incentives, loans, and grants, to transportation, zoning, and land-use planning — are useful for retaining and spurring the growth of large and small Ohio businesses. Working with economic development professionals from throughout the state, my office has created the Ohio Economic Development Manual to help current and prospective business owners, local governments, and economic development practitioners better understand the legal landscape of economic development in Ohio. We hope the manual will be a valuable resource for anyone with questions about the legal framework for economic development in Ohio and for those who are looking for innovative ways to use economic development tools to retain established businesses and lure new ones. The manual contains practical examples of how various economic development tools have been used in projects throughout the state. I hope that the Ohio Economic Development Manual is a useful reference as we work together to foster the growth of the state’s high-performance economy in the 21st century. Very respectfully yours, Mike DeWine Ohio Attorney General About this Manual The Ohio Economic Development Manual is a legal primer on economic development in Ohio. It provides readers with the legal foundation for many of the State’s most useful and powerful economic development tools. It was developed as a resource for economic development professionals, business owners, elected officials, and other interested persons. This manual addresses some of the biggest issues in economic development, covering everything from the constitutional authority for economic development to the specific incentives themselves. Each chapter addresses a discrete issue area, which is analyzed through its legal framework. The manual uses footnotes, which can help direct readers to additional resources to further their study. Because economic development is an ever-changing industry, this manual is just a starting point for each reader’s research. It is not a comprehensive resource for every statute, case, or Attorney General opinion relating to economic development. Furthermore, it does not provide all of the specific details or requirements of each program, nor does it say how to apply for them. For helpful links, corrections, updates, and the most recent edition of this manual, visit the Attorney General’s website. To offer feedback, corrections, examples or suggestions, e-mail us. www.OhioAttorneyGeneral.gov/EconomicDevelopment www.OhioAttorneyGeneral.gov/EconomicDevelopment [email protected] The manual should not replace legal advice obtained for a specific situation. The Ohio Attorney General’s Office does not provide legal advice through its publications. This manual covers information through Ohio’s 131st legislative session and is current as of August 2017. OHIO ECONOMIC DEVELOPMENT MANUAL TABLE OF CONTENTS Page Chapter One: Introduction to Ohio Economic Development ............................................... 1 The Ohio Constitution and Economic Development ........................................................................ 2 Separation of Public and Private Enterprise – 1851 to 1964 ................................................ 2 Evolution of Modern Economic Development Principles ....................................................... 3 Current State of the Ohio Constitution: Public Debt ................................................................. 4 Current State of the Ohio Constitution: Lending of Aid or Credit and Economic Development ............................................................................................................................................ 6 Local Government and Home Rule in Ohio ....................................................................................... 10 Municipalities and Home Rule ........................................................................................................ 10 Counties ................................................................................................................................................... 13 Townships .............................................................................................................................................. 15 Chapter Two: Economic Development and Special Purpose Entities ............................. 17 JobsOhio .......................................................................................................................................................... 18 Ohio Development Services Agency .................................................................................................... 20 Port Authorities ........................................................................................................................................... 22 Creation and Organization of a Port Authority ........................................................................ 26 Certain Characteristics of Port Authorities ............................................................................... 27 Special Improvement Districts .............................................................................................................. 28 Community Urban Redevelopment Corporations ......................................................................... 31 Joint Economic Development Options ................................................................................................ 34 Joint Economic Development Districts ........................................................................................ 35 Municipal Utility Districts................................................................................................................. 37 Ohio Attorney General Mike DeWine — Ohio Economic Development Manual 2017 Page i Community Improvement Corporations ........................................................................................... 38 Economic Development Corporation ........................................................................................... 38 County Land Reutilization Corporation (“Land Bank”) ........................................................ 39 Development Corporations ..................................................................................................................... 41 New Community Authorities .................................................................................................................. 41 Community Entertainment District ..................................................................................................... 44 Economic Development Foundations ................................................................................................. 45 Chapter Three: Land Use Regulation and Economic Development ................................. 47 History of Ohio Zoning Law .................................................................................................................... 48 Delegation of Planning and Zoning Powers to Local Governments ........................................ 49 Municipal Planning and Zoning ...................................................................................................... 49 County Planning and Zoning ........................................................................................................... 52 Planned-Unit Development .............................................................................................................. 54 Zoning-Code Enforcement Issues ......................................................................................................... 55 Zoning Applications in Ohio .................................................................................................................... 57 Traditional Zoning in Rural Communities ................................................................................. 58 Urban Overlay Districts ..................................................................................................................... 58 Central Business Districts................................................................................................................. 59 Mixed-Use Districts ............................................................................................................................. 60 Form-Based Zoning Code ................................................................................................................. 60 Eminent Domain.......................................................................................................................................... 61 Annexation .................................................................................................................................................... 64 Chapter Four: State of Ohio Tax System .................................................................................... 67 Legal Foundation for State Taxing Authority ................................................................................... 67 State of Ohio Tax System .......................................................................................................................... 68 Ohio Attorney General Mike DeWine — Ohio Economic Development Manual 2017 Page ii Commercial Activity Tax ..................................................................................................................