Login | March 28, 2025
Bill would reauthorize state’s Rural Business Growth Program
KEITH ARNOLD
Special to the Legal News
Published: March 20, 2025
A bill that would reauthorize the Ohio Rural Business Growth Program and create a distinct category for businesses in the Appalachian region of the state debuted recently during a Senate Ways and Means Committee hearing.
The program, established in 2018, awards non-refundable tax credits to insurance companies that invest in growth funds, which either loan or invest those funds in small businesses that operate in rural counties with populations of 200,000 or less.
According to one of the sponsors of Senate Bill 110, Sen. Jerry Cirino, R-Kirtland, the program has been responsible for investment exceeding $188 million in 52 rural Ohio companies in 29 counties since its enactment.
The program had only required investment of $150 million to be leveraged and invested in rural enterprises, he said.
SB 110 would authorize an additional $90 million in tax credits for insurance companies that invest in certain rural business, according to analysis by the Ohio Legislative Service Commission.
The legislation would allow for investments in rural businesses with up to 299 employees––an increase from current law’s 250 employees––and require 50 percent of a fund’s loans or investments be directed to Appalachian-based businesses and 75 percent in businesses principally located in a county with a population no greater than 150,000.
“In today’s economy, small businesses do not have adequate financing options if they are not venture capital or private equity firms,” said SB 110 joint sponsor Sen. Brian Chavez, R-Marietta. “The Ohio Rural Business Growth Program has proven to be one solution to bridging this gap, as evidenced by the success of the program’s previous funds.”
According to the bill, rural businesses would be prohibited from using a fund’s investment to refinance or buy out a previous credit-eligible investment.
Cirino said the bill would require funds be invested within three years or the tax credits would be recaptured by the state.
“The state does not issue tax credits until year three of the program and $22.5 million is issued annually in years three, four, five and six,” he said. “Finally, if job creation and retention metrics are not met, which investors must annually report, fund managers are required to pay a penalty to the state.”
Chavez said the bill should result in critical investment in the Appalachian region.
“Appalachia offers an abundance of resources that can be favorably utilized by businesses if they have the capabilities to do so,” he said. “Most counties within the region have annual budgets under $10 million. With the potential investment of at least $75 million into the area, the benefits to the region are meaningful.”
SB 110 awaits further consideration by the committee.
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