OH HB163

Establishes a declaratory judgment process allowing townships or municipal corporations to challenge municipalities charging higher water and sewer rates to customers outside their borders, or requiring direct payments as a condition of service.

Declares a municipality "noncompliant" if it charges out-of-district customers more than 125% of in-district rates (unless rates follow standard industry practices) or requires direct payments unrelated to service costs.

Withholds local government funds and state water/sewer assistance from noncompliant municipalities, with withheld amounts redistributed to affected subdivisions based on population.

Allows noncompliant municipalities to file subsequent actions seeking removal of noncompliant status by proving they no longer engage in the challenged practices.

Exempts water and sewer rates and direct payments established under contracts in effect before the bill's enactment from the noncompliance provisions.