Public Utility Property Tax

Loss Reimbursement Amounts

EXPLANATION OF SB 3 AND 287 TAX LOSS REIMBURSEMENT PRINTOUTS

OVERVIEW

Senate Bill 3 (enacted in June 1999) and Senate Bill 287 (enacted in December 2000) made both regulatory and tax changes for electric and gas utilities. Among those changes was the reduction in assessment rates for tangible personal property of these utilities and hold harmless payments for schools and local governments to reimburse them for the local tax losses due to the reductions in property taxes resulting from the assessment rate changes. For more information on the property tax changes and the reimbursement determinations, see the Senate Bills 3 and 287 Question and Answer Guide.

REIMBURSEMENT SPREADSHEETS

The attached spreadsheets show the tax loss reimbursement amounts from Senate Bills 3 and 287 for all jurisdictions in the state sorted by the home county of the jurisdiction. There are eight spreadsheets attached. Six are for fixed-rate levy losses by type of jurisdiction (one each for the county, local schools, municipalities, townships, joint vocational schools, and special districts). Fixed-rate levies include all levies except voted bond and school emergency levies. Second, there are two spreadsheets showing the reimbursement amounts for fixed-sum levies (voted bond and school emergency levies), one for school districts and one for non-school districts. There are only four non-schools that qualify for fixed-sum reimbursements (Jefferson county, Eastlake city, Moscow village, and Carroll township in Ottawa county).

Relatively few jurisdictions (under 50 statewide) qualify for reimbursement on fixed-sum levies because of the 0.25 mill threshold that must be met. For a jurisdiction to receive a fixed-sum levy reimbursement, the total revenue loss must exceed the revenue produced by 0.25 mills applied to total tax year 1999 taxable value (less the tax value losses due to S.B. 3 and S.B. 287).

The reimbursement amounts in the spreadsheets are shown individually for each eligible levy and are split between reimbursements for electric property value losses and gas property value losses. The spreadsheets also include the beginning year for each levy (a value of 0 indicates an inside levy) and the expiration year for each levy (a "." means a continuing levy).

The levies eligible for reimbursement are different for electric and gas property value losses. For electric property, we used the greater of the 1998 rate or the 1999 rate, except that levies passed after June 30, 1999 were not counted. For gas property, we used the higher of the 1999 and 2000 rates. This is not a levy-by-levy comparison. For fixed-rate levies, we used the higher of the total fixed-rate levies for each year. The same was done separately for fixed-sum levies.

A missing value (indicated by a ".") in either the electric reimbursement rate or the gas reimbursement rate means that levy does not qualify for reimbursement. There are generally two circumstances where this occurs. The first is that the levy has been either replaced or renewed and the new levy is being reimbursed for that purpose. For example, if a levy expired in 1998 and was renewed starting in 1999, the original levy would qualify for the electric reimbursement but not the gas reimbursement (since it was not in effect in either 1999 or 2000), while the renewed levy qualifies for gas reimbursement, but not electric (since it was not in effect in 1998). The second is that the levy was enacted in 1999 but is not eligible for the electric reimbursement because it was passed after June 30, 1999.

The valuation changes associated with these tax losses were previously certified. They are available on the Internet by school district and by taxing 
district at http://tax.ohio.gov/channels/government/government_certified_tax_value_losses.html.

Note that the values shown on the Internet are not broken down between electric and gas losses.

The fixed-rate levy reimbursements were calculated by applying qualifying levies against the valuation losses. Fixed-sum levies require a two step calculation. First, the qualified levies were applied against the valuation losses to calculate the tax losses. Second, 0.25 mills was multiplied times the jurisdictions’ total 1999 taxable value after subtracting the valuation losses from Senate Bills 3 and 287. If the sum of the tax losses from all fixed-sum levies was less than the second calculation, no reimbursements are made. Otherwise, the reimbursement is the difference between the first calculation and the second.

Reimbursement of the tax losses will begin in February, 2002. Reimbursements to schools and joint vocational schools will be made directly to those entities by the Department of Education. Reimbursements to other local jurisdictions will be made by the Department of Taxation through the county auditors.

For non-schools, payments will be made twice per year (February and August). Each payment will be for 50 percent of the annual calculated loss. For schools, the February 2002 reimbursement will be for 50 percent of the annual calculated loss. Beginning in August 2002, a portion of the reimbursement may be received through the SF-3 program. This will occur for reimbursement of current expense levies for districts that receive their state aid based on the school foundation formula. Districts that receive state aid based on the guarantee, as well as reimbursements of fixed-sum levies, permanent improvement levies, and formula district current expense levies above 23 mills will continue twice per year in February and August.

If you have any questions or if you think there are any errors in the attached spreadsheets, please contact your county auditor or the Tax Analysis Division at SB3@tax.state.oh.us.

Please note:  Most of our data is available in one of three different formats.  Spreadsheets and downloadable data is offered in either Lotus *wk1 and/or Microsoft *xls and can be used with most recent Lotus SmartSuite or Microsoft Office 97 spreadsheet or database applications.  These files are ideal for use when extracting and merging data.  The Adobe *pdf files provide a nice, clean, printed copy.  Adobe Acrobat Reader is the application required to view the *pdf  files and can be downloaded, if necessary, from adobe.com.  Thanks for your continued interest.