OH HB602

Establishes penalties for "noncompliant municipal corporations" that provide water and sewer services outside their territory and charge excessive rates or fail to publish rate equalization plans by required deadlines.

Establishes penalties for "predatory municipal corporations" that impose conditions on out-of-territory water/sewer service including mandatory annexation, excessive payments, unreasonable requirements, or service withdrawal threats.

Reduces Local Government Fund payments by 20% for noncompliant municipalities and withholds all payments for predatory municipalities until they comply and join a qualifying areawide waste treatment management plan.

Renders noncompliant and predatory municipalities ineligible for state water and sewer development funds from environmental protection, public works, water development authority, and development services agencies.

Directs withheld payments be distributed to affected subdivisions based on population proportions for use in current operating expenses.