Ohio land banks could claim more tax delinquency cash

In Ohio, county land banks could soon have a larger and steadier source of money to deal with abandoned property. The proposal would let counties direct part of delinquent-tax collections, along with certain fees and penalties, into land-bank funds. That matters because land banks are often the ones left holding the cost of cleanup when a house or lot has fallen too far behind on taxes and too far into neglect.

County land reutilization corporations, usually called land banks, are the local entities that step in when a property has become a problem for a neighborhood and for the tax rolls. They can hold title, maintain the parcel, clear away legal issues and work toward reuse. The bill is built around that reality. If counties want land banks to keep dealing with distressed property, the proposal gives them more ways to pay for the work.

A bigger share for delinquent collections

The central funding change would let a board of county commissioners, after a request from the county treasurer, a county commissioner or the land bank itself, set aside an additional amount of delinquent collections for the land-bank fund. The amount could not exceed five percent of collections of delinquent real property, personal property, and manufactured and mobile home taxes and assessments.

That is a meaningful shift for counties with a long list of neglected properties. Delinquent taxes are usually a sign that a parcel has already been hard to collect from. The bill does not treat that money as a general county windfall. Instead, it channels a portion of it back toward the local entity doing the work of stabilizing or clearing the property.

In plain terms, the idea is to connect the cleanup money to the cleanup task. Land banks spend money on things that do not always look dramatic from the outside, but are expensive all the same. They may have to secure a building, mow a lot, carry insurance, pay for demolition or wait for the right buyer. The new funding stream is meant to help cover that carrying cost.

The cap keeps the tool contained

The proposal does put a ceiling on the new spending. Even with the added authority, the combined amount spent each year in a county could not exceed five million dollars. That limit keeps the program aimed at local problem properties instead of turning it into an open-ended source of general revenue.

The cap also says something about how the bill sees land banks. These entities are not meant to replace a county budget. They are meant to handle a narrow but stubborn problem, parcels that sit empty, drag down nearby blocks and keep generating administrative work. By tying the money to a ceiling, the bill tries to make sure the new dollars stay close to that mission.

For counties with only a small backlog, the cap may never matter much. For counties with a bigger pile of distressed property, it could still provide real help without swallowing other needs. The balance is important because the bill is trying to create a practical tool, not a broad new spending program.

Fees and penalties would feed the same fund

The proposal would also route more money into the county land reutilization corporation fund from the property-transfer process. Fees charged on a transfer of real property to a land bank would be credited to that fund. Penalties and interest tied to current-year unpaid taxes and current-year delinquent taxes advanced to the fund would also be credited there as the money is collected.

That part of the bill recognizes that the financial burden around a bad property does not stop when the property changes hands. There are still transfer steps, collection steps and legal steps. The proposal sends some of those dollars back to the entity that has to manage the parcel afterward.

The bill also includes a related redevelopment incentive. A county land bank could hold property as public-purpose property and keep it exempt from taxation until it is sold or transferred. After a land bank conveys property, a county could adopt a resolution exempting part of the value of that parcel from real-property tax for a limited period, with the exempted amount still paid to the land bank that conveyed it. That kind of structure is meant to make reuse more workable without stripping the local land bank of all the financial benefit.

A different way to show hopeless parcels

One quieter change would affect how county auditors record the most distressed parcels. For properties placed on the real property tax suspension list, the auditor would enter only the current taxes and mark the parcel, instead of listing the delinquent taxes, penalties and interest in the same way. The suspension list is for parcels that county officials have already determined are most likely uncollectible except through foreclosure or foreclosure and forfeiture.

That change is mostly about the paper trail, but paper matters in local tax work. If a parcel is already deep in delinquency, a cleaner listing can make it easier for counties to track the problem without pretending it is still a normal tax account. It may also make the tax records easier to read for the officials who have to decide what to do next.

The bill does not erase the debt. It changes how the worst cases are presented once a county has already concluded that collection is unlikely. For local governments, that can matter because a cluttered record can slow down attention that ought to be aimed at the foreclosure side of the process or at the eventual reuse of the land.

Moving abandoned land through the system

The proposal also touches the auction and foreclosure side of abandoned property. It would establish a single statewide sheriff sale website and integrated auction management system for county sheriffs. Sales on that site would stay open for bidding for at least seven days.

The bill also adds rules for abandoned land at public auction. If a required statement is filed, no one could later contest the requested public auction of the property. If no statement is filed, that would be treated as prima facie evidence and a rebuttable presumption that the fair market value of the property is less than the amount of delinquent taxes and costs owed to the county treasurer in the foreclosure decree.

There are also consequences for bidders who default. If a sale is rejected because of default, the sheriff would keep the deposit. A bidder who defaults could be barred from bidding on abandoned land at future public auctions for five years. The bill also says a parcel sold at public auction cannot go for less than the required amount when the high bidder is the former owner or certain close-related parties. Taken together, those provisions are designed to keep the process moving and to prevent repeat problems around the same property.

What this means for counties and neighborhoods

For county officials, the bill is mostly about leverage. It gives treasurers, commissioners and land banks more ways to direct money toward parcels that have already become hard cases. For land banks, it creates a clearer path to funding the work they do every day, from carrying troubled property to getting it ready for reuse.

For neighborhoods, the stakes are practical. Empty houses and neglected lots do not just sit there. They can depress nearby property values, invite nuisance problems and make it harder for a block to recover. The proposal does not solve those problems by itself. But it does try to make sure the local agency handling them is not left without the money to do the job.

The bill is built around a simple idea: if counties want land banks to keep turning dead-end property into usable land again, the funding has to follow the work. The proposal would send more of the money connected to delinquent and abandoned property back to the people trying to fix it.