BEFORE THE SENATE FINANCE AND FINANCIAL INSTITUTIONS COMMITTEE
Proponent Testimony on SB 206
Presented by Daniel Navin; Director of Legislative Affairs, Ohio Chamber of Commerce
Tuesday – April 27, 2004

Mr. Chairman and Members of the Committee,

My name is Daniel Navin and I am the managing director of legislative affairs for the Ohio Chamber of Commerce. I am here today to testify in support of SB 206, legislation that would allow local communities to increase the term of an enterprise zone agreement beyond the current ten years to 15 years, subject to local school board approval.

As you probably know, the Chamber has long been supportive of the enterprise zone program primarily because it mitigates the burdensome impact of the tangible personal property tax by allowing a reduction in the real and/or tangible personal property tax on new investment or increased valuation by a company in the enterprise zone for a period of up to ten years. Through the enterprise zone program, local communities have the flexibility to design an investment and jobs attraction package that will balance the needs of local governments (in terms of revenue streams and infrastructure commitments), economic development planners, schools and the companies looking for a prime location for a plant or other facility.

SB 206 would make a modest improvement to the current enterprise zone program by permitting a local community to grant a property tax exemption for up to 15 years, compared to the current ten-year maximum. Historically, we have expressed reservations about school districts’ essentially having veto power over economic development projects that commit to increased investments in business machinery, equipment & inventory and create new jobs. However, in 1994 we did not oppose SB 19, which made substantial reforms to the enterprise zone program, including the requirement that any EZ property tax exemption above 75% in an urban zone and 60% in a rural zone must be approved by the local school board. Further, we did not oppose the recent EZ time period expansion to 15 years subject to school board approval in the case of the Piketon facility project in HB 127 that was passed by the General Assembly in November 2003. Consequently, we support the same provision, as it is applied to all EZ projects, in this bill.

As for the proposed $25.8 million appropriation of unclaimed funds, to the extent the Division of Unclaimed Funds can still meet its obligation to return funds to the rightful owner in the event he/she makes a claim, we support the transfer of those dollars to jobs development and training initiatives.

Mr. Chairman, that completes my testimony, and I would be happy to answer any questions the committee wishes to ask.