Ohio Administrative Code Title 122:9 - Community Reinvestment Area Regulations
📌 Title 122:9 — Community Reinvestment Area (CRA) Regulations
This title contains administrative rules that govern how Community Reinvestment Areas operate in Ohio. These areas are special zones designated by local governments (cities or counties) to encourage real estate investment, property improvements, and economic development by offering property tax exemptions on new or improved property value in return for certain public benefits. CRA regulations are administered through the Ohio Department of Development and are tied to state statutes that define eligibility, exemptions, and compliance.
1. Chapter 122:9‑1 — Tax Exemption Fee and Relocation Provisions
Key Rule: 122:9‑1‑02 – Relocation Provisions
This is the main part of the regulations that remains active and detailed:
A. Definition of Relocation
A “relocation” occurs when a business moves employment positions and/or tangible personal property (like equipment) from one Ohio jurisdiction (city, village, township) to another.
Transfers within the same jurisdiction are generally not considered relocation. Also, temporary moves or short‑term operations are not treated as relocations under the CRA rules.
B. Exceptions to Relocation
The rule identifies important exceptions where a move is not considered relocation:
Backfill Exception:
If a business moves operations but commits to backfill jobs it vacates within a specified period (normally the hiring period or three years), such movement is not considered relocation for CRA purposes.
Replacement Assets Exception:
If equipment is moved but equal or greater value equipment of the same type is installed at the new location, it’s not counted as relocation.
C. Special Circumstances
Temporary Operations:
If a business is temporarily operating at a location (for example, using a leased warehouse or due to an emergency like a fire), these activities are not treated as relocation.
D. Employment Net Increase Calculation
The rule requires careful calculation of net job increases as part of CRA compliance:
Prior to a CRA tax exemption agreement, a baseline employment number is established for the business operations affected by the project.
To count new jobs for qualifying and reporting purposes, the rule subtracts the baseline from the employment total at the reporting date.
Jobs lost to attrition are not subtracted — meaning positions that naturally phase out aren’t counted against net job growth.
E. Notice of Proposed Relocation
If a business plans to relocate operations from one jurisdiction to another, a written notice must be submitted to the Department of Development.
This notice must contain enough detail for the department to determine whether the relocation will affect CRA eligibility or incentives.
2. Purpose and Effect of CRA Regulations
The regulations are intended to:
Encourage reinvestment in under‑utilized or developing areas by offering partial property tax exemptions on the new or increased value of property investment.
Protect local tax bases by ensuring businesses don’t simply relocate for incentives without creating net economic benefits.
Provide uniform standards for administering CRAs across Ohio jurisdictions.
3. Relationship with State Law
While the Administrative Code (OAC) sets out procedural details and definitions, the statutory framework in the Ohio Revised Code provides the legal authority and eligibility criteria for CRA programs, including:
What types of property qualify (residential vs. commercial vs. industrial).
How long exemptions can run.
General criteria for establishing a CRA.
These statutes are implemented and clarified through the OAC rules described here.
4. How CRA Exemptions Work in Practice
A. Local Government Role
A local government (city or county) adopts an ordinance creating a CRA, specifying the boundaries and general terms of the program.
The local legislative authority often must forward documentation to the state development agency for certification before incentives take effect.
B. Business Participation
Property owners or developers apply for CRA exemptions.
Exemptions are generally tied to new construction or qualified improvements to property within the CRA.
Commercial and industrial exemptions usually require job creation or job retention commitments as part of the agreement, which is why the OAC rule about relocation and net employment exists.
C. Employment and Relocation Rules
If a business receiving CRA incentives transfers jobs from one jurisdiction to another, the relocation rules help determine whether those jobs count toward program commitments.
Ensuring that new jobs represent actual “net” employment growth (and not just internal transfers) is a central concern of these rules.
5. Why the Relocation Rule Matters
Without clear regulations on relocation and employment counting, a business could theoretically move jobs around within the state to maximize tax benefits without providing real additional economic value in the community receiving the incentive.
The rule ensures that the CRA benefits are tied to genuine reinvestment and growth, not simply redistribution of existing assets or positions.
Summary
| Section | Topic | Key Focus |
|---|---|---|
| 122:9‑1‑02 | Relocation provisions | Defines relocation, exceptions, net job calculation, written notice requirements |
| CRA Program as a Whole | Tax exemption incentives | Encourages reinvestment in designated areas with job creation/retention standards |
| Implementation | Local/state roles | Local ordinance creation, state certification, and rules administration |
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