In December 2018, the Ohio General Assembly passed Sub. House Bill 500 (the bill) which makes a significant change to the manner in which New Community Authorities (NCAs) can be established in unincorporated areas of Ohio.

An NCA is an area that is established by a petition filed by a person or entity that owns or controls the property within that area, and allows for the levying of a community development charge within the NCA to help finance certain community facilities and other improvements. Under current law, an NCA established by a private entity (i.e., not a governmental area) must contain at least 1,000 acres, unless the NCA is located entirely within a municipal corporation or at least 50% of the NCA is located within a joint economic development district (“JEDD”). This acreage limitation makes it difficult to use the NCA tool in an unincorporated area like a township, unless the township wants to go through the additional time and expense of establishing a JEDD prior to the establishment of an NCA.

The bill eliminates this 1,000-acre limitation and allows for the establishment of an NCA by a private entity in an unincorporated area regardless of the total number of acres within the NCA. This change will remove a significant hurdle to the use of this important economic development tool in unincorporated areas, which is beneficial to townships, counties and private developers.

Interestingly, the bill leaves in place language that would appear to eliminate certain requirements of NCAs established by private entities in a way that is inconsistent with the remaining NCA statutes. Specifically, under the bill, it appears that a private developer need not own or control the entire area within the NCA if the entirety of the NCA is located within a municipal corporation or at least 50% of the NCA is located within a JEDD. This, however, is inconsistent with the definition of “developer” in the NCA statutes, which requires ownership or control regardless of whether the entity filing the petition is a private entity or a governmental entity. This interpretation is unlikely to have been the intent of the General Assembly in passing the bill, and it is likely that the language will be fixed by further legislation.

The bill goes into effect in March 2019. If you have any questions about how the bill might affect your business, please contact Chris Connelly at (614) 334-7108 or cconnelly@taftlaw.com.