Sunset the sale of delinquent property tax certificates

As Introduced

136th
General Assembly

Regular
Session
H. B. No. 493

2025-2026

Representatives Thomas, D., Troy

Cosponsors: Representatives Brennan,
Brewer, Daniels, Glassburn, Gross, Hall, T., King, Lett

To
amend sections 5721.32, 5721.33, and 5721.42 of the Revised Code
to
sunset the sale of delinquent property tax certificates on January 1,
2027.

BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section
1.
That
sections 5721.32, 5721.33, and 5721.42 of the Revised Code be amended
to read as follows:

Sec.
5721.32.
(A)
The sale of tax certificates by public auction may be conducted at
any time after completion of the advertising of the sale under
section 5721.31 of the Revised Code, on the date and at the time and
place designated in the advertisements, and may be continued from
time to time as the county treasurer directs.
The

But,
in no case shall the sale of tax certificates by public auction be
conducted on or after January 1, 2027.

The

county
treasurer may offer the tax certificates for sale in blocks of tax
certificates, consisting of any number of tax certificates as
determined by the county treasurer, and may specify a certificate
period of not less than three years and not more than six years.

(B)(1)

All
sales or transfers of tax certificates under this section shall be
complete, in all respects, on or before December 31, 2026. No payment
shall be required or accepted under division (D)(1) of this section
and no transfer of certificates shall occur under division (E) of
this section after December 31, 2026. Any certificates sold or
transferred under this section after that date are void.

(2)

The
sale of tax certificates under this section shall be conducted at a
public auction by the county treasurer or a designee of the county
treasurer.

(2)
(3)

No person shall be permitted to bid without completing a bidder
registration form, in the form prescribed by the tax commissioner,
and without filing the form with the county treasurer prior to the
start of the auction, together with remittance of a registration fee,
in cash, of five hundred dollars. The bidder registration form shall
include a tax identification number of the registrant. The
registration fee is refundable at the end of bidding on the day of
the auction, unless the registrant is the winning bidder for one or
more tax certificates or one or more blocks of tax certificates, in
which case the fee may be applied toward the deposit required by this
section.

(3)
(4)

The county treasurer may require a person who wishes to bid on one or
more parcels to submit a letter from a financial institution stating
that the bidder has sufficient funds available to pay the purchase
price of the parcels and a written authorization for the treasurer to
verify such information with the financial institution. The county
treasurer may require submission of the letter and authorization
sufficiently in advance of the auction to allow for verification. No
person who fails to submit the required letter and authorization, or
whose financial institution fails to provide the requested
verification, shall be permitted to bid.

(C)
At the public auction, the county treasurer or the treasurer's
designee or agent shall begin the bidding at eighteen per cent per
year simple interest, and accept lower bids in even increments of
one-fourth of one per cent to the rate of zero per cent. The county
treasurer, designee, or agent shall award the tax certificate to the
person bidding the lowest certificate rate of interest. The county
treasurer shall decide which person is the winning bidder in the
event of a tie for the lowest bid offered, or if a person contests
the lowest bid offered. The county treasurer's decision is not
appealable.

(D)(1)
The winning bidder shall pay the county treasurer a cash deposit of
at least ten per cent of the certificate purchase price not later
than the close of business on the day of the sale. The winning bidder
shall pay the balance and the fee required under division (H) of this
section not later than five business days after the day on which the
certificate is sold. Except as provided under division (D)(2) of this
section, if the winning bidder fails to pay the balance and fee
within the prescribed time, the bidder forfeits the deposit, and the
county treasurer shall retain the tax certificate and may attempt to
sell it at any auction conducted at a later date.

(2)
At the request of a winning bidder, the county treasurer may release
the bidder from the bidder's tax certificate purchase obligation. The
county treasurer may retain all or any portion of the deposit of a
bidder granted a release. After granting a release under this
division, the county treasurer may award the tax certificate to the
person that submitted the second lowest bid at the auction.

(3)
The county treasurer shall deposit the deposit forfeited or retained
under division (D)(1) or (2) of this section in the county treasury
to the credit of the tax certificate administration fund.

(E)
Upon receipt of the full payment of the certificate purchase price
from the purchaser, the county treasurer shall issue the tax
certificate and record the tax certificate sale by entering into a
tax certificate register the certificate purchase price, the
certificate rate of interest, the date the certificate was sold, the
certificate period, the name and address of the certificate holder,
and any other information the county treasurer considers necessary.
The county treasurer may keep the tax certificate register in a
hard-copy format or in an electronic format. The name and address of
the certificate holder may be, upon receipt of instructions from the
purchaser, that of the secured party of the actual purchaser, or an
agent or custodian for the purchaser or secured party. The county
treasurer also shall transfer the tax certificate to the certificate
holder. The county treasurer shall apportion the part of the proceeds
from the sale representing taxes, penalties, and interest among the
several taxing districts in the same proportion that the amount of
taxes levied by each district against the certificate parcel in the
preceding tax year bears to the taxes levied by all such districts
against the certificate parcel in the preceding tax year, and credit
the part of the proceeds representing assessments and other charges
to the items of assessments and charges in the order in which those
items became due. Upon issuing a tax certificate, the delinquent
taxes that make up the certificate purchase price are transferred,
and the superior lien of the state and its taxing districts for those
delinquent taxes is conveyed intact to the certificate holder.

(F)
If a tax certificate is offered for sale under this section but is
not sold, the county treasurer may sell the certificate in a
negotiated sale authorized under section 5721.33 of the Revised Code,
or may strike the corresponding certificate parcel from the list of
parcels selected for tax certificate sales. The lien for taxes,
assessments, charges, penalties, and interest against a parcel
stricken from the list thereafter may be foreclosed in the manner
prescribed by section 323.25, sections 323.65 to 323.79, or section
5721.14 or 5721.18 of the Revised Code unless, prior to the
institution of such proceedings against the parcel, the county
treasurer restores the parcel to the list of parcels selected for tax
certificate sales.

(G)
A certificate holder shall not be liable for damages arising from a
violation of sections 3737.87 to
3737.891

3737.89

or
Chapter 3704., 3734., 3745., 3746., 3750., 3751., 3752., 6109., or
6111. of the Revised Code, or a rule adopted or order, permit,
license, variance, or plan approval issued under any of those
chapters, that is or was committed by another person in connection
with the parcel for which the tax certificate is held.

(H)
When selling a tax certificate under this section, the county
treasurer shall charge a fee to the purchaser of the certificate. The
county treasurer shall set the fee at a reasonable amount that covers
the treasurer's costs of administering the sale of the tax
certificate. The county treasurer shall deposit the fee in the county
treasury to the credit of the tax certificate administration fund.

(I)
After selling a tax certificate under this section, the county
treasurer shall send written notice to the owner of the certificate
parcel by certified mail or, if the treasurer has record of an
internet identifier of record associated with the owner, by ordinary
mail and by that internet identifier of record. A mailed notice shall
be sent to the owner's last known tax-mailing address. The notice
shall inform the owner that the tax certificate was sold, shall
describe the owner's options to redeem the parcel, including entering
into a redemption payment plan under division (C)(1) of section
5721.38 of the Revised Code, and shall name the certificate holder
and its secured party, if any. However, the county treasurer is not
required to send a notice under this division if the treasurer
previously has attempted to send a notice to the owner of the parcel
at the owner's last known tax-mailing address, and the postal service
has returned the notice as undeliverable.

(J)
A tax certificate shall not be sold to the owner of the certificate
parcel.

Sec.
5721.33.
(A)
A county treasurer may,
on
or before December 31, 2026,
in
the treasurer's discretion, negotiate the sale or transfer of any
number of tax certificates with one or more persons, including a
county land reutilization corporation. Terms that may be negotiated
include, without limitation, any of the following:

(1)
A premium to be added to or discount to be subtracted from the
certificate purchase price for the tax certificates;

(2)
Different time frames under which the certificate holder may initiate
a foreclosure action than are otherwise allowed under sections
5721.30 to 5721.43 of the Revised Code, not to exceed six years after
the date the tax certificate was sold or transferred;

(3)
The amount to be paid in private attorney's fees related to tax
certificate foreclosures, subject to section 5721.371 of the Revised
Code;

(4)
Any other terms of the sale or transfer that the county treasurer, in
the treasurer's discretion, determines appropriate or necessary for
the sale or transfer.

(B)
(B)(1)

The sale or transfer of tax certificates under this section shall be
governed by the criteria established by the county treasurer pursuant
to division (E) of this section.

(2)
All sales or transfers of tax certificates under this section shall
be complete, in all respects, on or before December 31, 2026. No
payment shall be required or accepted under division (F) of this
section and no transfer of certificates shall occur under division
(G) of this section after December 31, 2026. Any certificates sold or
transferred under this section after that date are void.

(C)
The county treasurer may execute a tax certificate sale/purchase
agreement and other necessary agreements with a designated purchaser
or purchasers to complete a negotiated sale or transfer of tax
certificates.

(D)
The tax certificate may be sold at a premium to or discount from the
certificate purchase price. The county treasurer may establish as one
of the terms of the negotiated sale the portion of the certificate
purchase price, plus any applicable premium or less any applicable
discount, that the purchaser or purchasers shall pay in cash on the
date the tax certificates are sold and the portion, if any, of the
certificate purchase price, plus any applicable premium or less any
applicable discount, that the purchaser or purchasers shall pay in
noncash consideration and the nature of that consideration.

The
county treasurer shall sell such tax certificates at a certificate
purchase price, plus any applicable premium and less any applicable
discount, and at a certificate rate of interest that, in the
treasurer's determination, are in the best interests of the county.

(E)(1)
The county treasurer shall adopt rules governing the eligibility of
persons to purchase tax certificates or to otherwise participate in a
negotiated sale under this section. The rules may provide for
precertification of such persons, including a requirement for
disclosure of income, assets, and any other financial information the
county treasurer determines appropriate. The rules also may prohibit
any person that is delinquent in the payment of any tax to the county
or to the state, or that is in default in or on any other obligation
to the county or to the state, from purchasing a tax certificate or
otherwise participating in a negotiated sale of tax certificates
under this section. The rules may also authorize the purchase of
certificates by a county land reutilization corporation, and
authorize the county treasurer to receive notes in lieu of cash, with
such notes being payable to the treasurer upon the receipt or
enforcement of such taxes, assessments, charges, costs, penalties,
and interest, and as otherwise further agreed between the corporation
and the treasurer. The eligibility information required shall include
the tax identification number of the purchaser and may include the
tax identification number of the participant. The county treasurer,
upon request, shall provide a copy of the rules adopted under this
section.

(2)
Any person that intends to purchase a tax certificate in a negotiated
sale shall submit an affidavit to the county treasurer that
establishes compliance with the applicable eligibility criteria and
includes any other information required by the treasurer. Any person
that fails to submit such an affidavit is ineligible to purchase a
tax certificate. Any person that knowingly submits a false or
misleading affidavit shall forfeit any tax certificate or
certificates purchased by the person at a sale for which the
affidavit was submitted, shall be liable for payment of the full
certificate purchase price, plus any applicable premium and less any
applicable discount, of the tax certificate or certificates, and
shall be disqualified from participating in any tax certificate sale
conducted in the county during the next five years.

(3)
A tax certificate shall not be sold to the owner of the certificate
parcel or to any corporation, partnership, or association in which
such owner has an interest. No person that purchases a tax
certificate in a negotiated sale shall assign or transfer the tax
certificate to the owner of the certificate parcel or to any
corporation, partnership, or association in which the owner has an
interest. Any person that knowingly or negligently transfers or
assigns a tax certificate to the owner of the certificate parcel or
to any corporation, partnership, or association in which such owner
has an interest shall be liable for payment of the full certificate
purchase price, plus any applicable premium and less any applicable
discount, and shall not be entitled to a refund of any amount paid.
Such tax certificate shall be deemed void and the tax lien sold under
the tax certificate shall revert to the county as if no sale of the
tax certificate had occurred.

(F)
The purchaser in a negotiated sale under this section shall deliver
the certificate purchase price or other consideration, plus any
applicable premium and less any applicable discount and including any
noncash consideration, to the county treasurer not later than the
close of business on the date the tax certificates are delivered to
the purchaser. The certificate purchase price, less any applicable
discount, or portion of the price, that is paid in cash shall be
deposited in the county's general fund to the credit of the account
to which ad valorem real property taxes are credited and further
credited as provided in division (G) of this section. Any applicable
premium that is paid shall be, at the discretion of the county
treasurer, apportioned to and deposited in any authorized county
fund. The purchaser also shall pay on the date the tax certificates
are delivered to the purchaser the fee, if any, negotiated under
division (J) of this section. If the purchaser fails to pay the
certificate purchase price, plus any applicable premium and less any
applicable discount, and any such fee, within the time periods
required by this section, the county treasurer shall retain the tax
certificate and may attempt to sell it at any auction or negotiated
sale conducted at a later date.

(G)
Upon receipt of the full payment from the purchaser of the
certificate purchase price or other agreed-upon consideration, plus
any applicable premium and less any applicable discount, and the
negotiated fee, if any, the county treasurer, or a qualified trustee
whom the treasurer has engaged for such purpose, shall issue the tax
certificate and record the tax certificate sale by entering into a
tax certificate register the certificate purchase price, any premium
paid or discount taken, the certificate rate of interest, the date
the certificates were sold, the name and address of the certificate
holder or, in the case of issuance of the tax certificates in a
book-entry system, the name and address of the nominee, and any other
information the county treasurer considers necessary. The county
treasurer may keep the tax certificate register in a hard-copy format
or an electronic format. The name and address of the certificate
holder or nominee may be, upon receipt of instructions from the
purchaser, that of the secured party of the actual purchaser, or an
agent or custodian for the purchaser or secured party. The county
treasurer also shall transfer the tax certificates to the certificate
holder. The county treasurer shall apportion the part of the cash
proceeds from the sale representing taxes, penalties, and interest
among the several taxing districts in the same proportion that the
amount of taxes levied by each district against the certificate
parcels in the preceding tax year bears to the taxes levied by all
such districts against the certificate parcels in the preceding tax
year, and credit the part of the proceeds representing assessments
and other charges to the items of assessments and charges in the
order in which those items became due. If the cash proceeds from the
sale are not sufficient to fully satisfy the items of taxes,
assessments, penalties, interest, and charges on the certificate
parcels against which tax certificates were sold, the county
treasurer shall credit the cash proceeds to such items pro rata based
upon the proportion that each item of taxes, assessments, penalties,
interest, and charges bears to the aggregate of all such items, or by
any other method that the county treasurer, in the treasurer's sole
discretion, determines is equitable. Upon issuing the tax
certificates, the delinquent taxes that make up the certificate
purchase price are transferred, and the superior lien of the state
and its taxing districts for those delinquent taxes is conveyed
intact to the certificate holder or holders.

(H)
If a tax certificate is offered for sale under this section but is
not sold, the county treasurer may strike the corresponding
certificate parcel from the list of parcels selected for tax
certificate sales. The lien for taxes, assessments, charges,
penalties, and interest against a parcel stricken from the list
thereafter may be foreclosed in the manner prescribed by section
323.25, 5721.14, or 5721.18 of the Revised Code unless, prior to the
institution of such proceedings against the parcel, the county
treasurer restores the parcel to the list of parcels selected for tax
certificate sales.

(I)
Neither a certificate holder nor its secured party, if any, shall be
liable for damages arising from a violation of sections 3737.87 to

3737.891

3737.89

or
Chapter 3704., 3734., 3745., 3746., 3750., 3751., 3752., 6109., or
6111. of the Revised Code, or a rule adopted or order, permit,
license, variance, or plan approval issued under any of those
chapters, that is or was committed by another person in connection
with the parcel for which the tax certificate is held.

(J)
When selling or transferring a tax certificate under this section,
the county treasurer may negotiate with the purchaser of the
certificate for fees paid by the purchaser to the county treasurer to
reimburse the treasurer for any part or all of the treasurer's costs
of preparing for and administering the sale of the tax certificate
and any fees set forth by the county treasurer in the tax certificate
sale/purchase agreement. Such fees, if any, shall be added to the
certificate purchase price and shall be paid by the purchaser on the
date of delivery of the tax certificate. The county treasurer shall
deposit the fees in the county treasury to the credit of the tax
certificate administration fund.

(K)
After selling tax certificates under this section, the county
treasurer shall send written notice to the owner of the certificate
parcel by either certified mail or, if the treasurer has record of an
internet identifier of record associated with the owner, by ordinary
mail and by that internet identifier of record. A mailed notice shall
be sent to the owner's last known tax-mailing address. The notice
shall inform the owner that a tax certificate with respect to such
owner's parcel was sold or transferred and shall describe the owner's
options to redeem the parcel, including entering into a redemption
payment plan under division (C)(2) of section 5721.38 of the Revised
Code. However, the county treasurer is not required to send a notice
under this division if the treasurer previously has attempted to send
a notice to the owner of the parcel at the owner's last known
tax-mailing address and the postal service has returned the notice as
undeliverable.

Sec.
5721.42.
After
the settlement required under division (C) of section 321.24 of the
Revised Code, the county treasurer shall notify the certificate
holder of the most recently issued tax certificate, by ordinary first
class or certified mail or by binary means, that the certificate
holder may purchase a subsequent tax certificate by paying all
delinquent taxes on the related certificate parcel the lien against
which has not been transferred by the sale of a tax certificate.
During the thirty days after receiving the notice, the certificate
holder possesses the exclusive right to purchase the subsequent tax
certificate by paying those amounts to the county treasurer. The
amount of the payment shall constitute a separate lien against the
certificate parcel that shall be evidenced by the issuance by the
treasurer to the certificate holder of an additional tax certificate
with respect to the delinquent taxes so paid on the related
certificate parcel. The amount of the payment as set forth in the tax
certificate shall earn interest at the rate of eighteen per cent per
year. The certificate period of each subsequent tax certificate shall
terminate on the expiration date of the certificate period of the
most recent tax certificate for the same certificate parcel.

No
tax certificate shall be sold under this section on or after January
1, 2027.

Section
2.
That
existing sections 5721.32, 5721.33, and 5721.42 of the Revised Code
are hereby repealed.