Much attention has been devoted to two bills moving through the Ohio General Assembly that would limit existing economic development tools. Last week, the Ohio House of Representatives passed House Bill 198, which would enable certain property owners to opt out of Tax Increment Financing (TIF) incentive districts. And this week, the Ohio Senate approved Am. Sub. House Bill 289, legislation eliminating the authority to create new Joint Economic Development Zones after 2014.

Meanwhile, a new economic tool that may prove useful for a number of communities throughout Ohio is quietly advancing through the legislative process. House Bill 494, which the Ohio House approved on May 28, would authorize the creation of Regional Transportation Improvement Projects (RTIPs), a new vehicle to promote economic development and infrastructure improvement.

Under House Bill 494 as currently drafted, any two or more counties could join together to create an RTIP to finance and implement transportation improvements. Eligible projects would include, among other things, the “construction, repair, maintenance, or expansion of streets, highways, parking facilities, rail tracks” and “traffic signs, markers, lights, and signals.” RTIPs could finance these projects by issuing securities backed by certain revenue pledges of the state, the participating counties and political subdivisions within the counties. They also could seek voter approval for a motor vehicle license tax to finance authorized transportation improvements.

This new authority differs in a number of respects from Transportation Improvement Districts (TIDs), which Ohio law already authorizes. Most importantly, TIDs are formed within one county, whereas RTIPs may be formed by multiple counties. This difference may prove valuable to communities undertaking larger projects or seeking additional financing capacity. TIDs are subject to an express exemption from Ohio’s prevailing wage laws, but the current version of House Bill 494 does not contain language providing a similar exemption for RTIPs. Also, TIDs are authorized to specially assess properties benefiting from infrastructure improvements, but they cannot impose a license tax like an RTIP might do. Finally, TIDs must obtain approval of political subdivisions outside TID territory before making infrastructure improvements; RTIPs, by contrast, would not need any such approval for projects involving streets or highways connecting to the interstate system.

Stay tuned to DevelopOhio for more details as House Bill 494 moves on to the Ohio Senate.