2025-04-18

Briana Cooper

Pending Legislation

House Bill 113 proposes substantial changes to annexation laws, financial disclosure requirements, and property tax exemptions. The sponsoring legislators argue that the current annexation process allows municipalities to annex land without meaningful input from county commissioners, township trustees, or school districts.

The Bill would empower county commissioners to stop annexations that are not in the county’s best interest and give school districts veto power over residential Community Reinvestment Areas (CRAs).

The Bill is intended to prevent overburdened infrastructure, asserting that high-density housing developments lead to overcrowded schools, with no mechanisms for local authorities to intervene and relieve strain on infrastructure and public services due to lack of service agreements or accountability from annexing municipalities. Below are the specific changes proposed in the Bill that would affect Ohio real estate development:

Annexation Laws

  • Imposes stricter conditions for annexing land into a municipal corporation.
  • Expands minimum contiguous boundary requirements from 5% to 20% of the perimeter.
  • Reduces the maximum land area eligible for annexation from 500 acres to 200 acres.
  • Amends hearing and appeal procedures by limiting appeals in law and requiring municipal corporations and affected townships to file written objections or consents within specific timeframes.
  • Annexed areas will remain part of the township for taxation purposes, preventing the loss of revenue from annexation.

Community Reinvestment Area Property Tax Exemptions

  • Requires school board approval for property tax exemptions granted under CRA agreements, unless:
    • At least 25% of the school district’s potential tax revenue is still collected and remitted through a combination of non-exempt property taxes and payments made to the school district.
  • Ensures that joint vocational school districts receive compensation in the same proportion as local school districts.

 School District Transfers Following Annexation

  • When a municipal corporation annexes land, the territory will be transferred to the school district that primarily serves the annexing municipality.
  • However, high school students (9th grade and above) may continue in their original district until they graduate.

The sponsors assert that the Bill is intended to create balance in growth and development, and that reforms are necessary to prevent overly aggressive annexation while still allowing reasonable housing expansion to support economic development.