As Introduced 1
122nd General Assembly 4
Regular Session H. B. No. 697 5
1997-1998 6
REPRESENTATIVE JOHNSON 8
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A B I L L
To amend sections 319.302, 5711.22, 5727.111, and 12
5727.12 and to enact sections 5739.029 and 13
5747.37 of the Revised Code to levy an additional 14
one-half per cent sales and use tax, the proceeds 15
of which must be used for schools and to provide 16
property tax relief; to reduce from 10% to 5% the 18
property tax reduction for nonresidential,
nonagricultural real property; to reduce the 20
assessment rate on business inventory for
property tax purposes; to authorize taxpayers to 21
claim a refundable income tax credit for a 22
portion of their residential property tax 23
payments; to make an appropriation; and to
provide that the act take effect only after being 24
approved by the electors. 26
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 28
Section 1. That sections 319.302, 5711.22, 5727.111, and 30
5727.12 be amended and sections 5739.029 and 5747.37 of the 32
Revised Code be enacted to read as follows:
Sec. 319.302. After complying with section 319.301 of the 41
Revised Code, the county auditor shall reduce the remaining sums 42
to be levied against each parcel of real property listed on the 43
general tax list and duplicate of real and public utility 44
property for the current tax year by ten per cent FOR EACH PARCEL 45
CLASSIFIED UNDER SECTION 5713.041 OF THE REVISED CODE AS 46
RESIDENTIAL/AGRICULTURAL REAL PROPERTY, AND BY FIVE PER CENT FOR 47
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EACH PARCEL SO CLASSIFIED AS NONRESIDENTIAL/AGRICULTURAL REAL 48
PROPERTY. Except as otherwise provided in sections 323.152, and 49
323.158, 505.06, and 715.263 of the Revised Code, the amount of 51
the taxes remaining after such reduction shall be the real and 52
public utility property taxes charged and payable on such 53
property and shall be the amounts certified to the county
treasurer for collection. Upon receipt of the tax duplicate, the 54
treasurer shall certify to the tax commissioner the total amount 55
by which such taxes were reduced under this section, as shown on 56
the duplicate. Such reduction shall not directly or indirectly 57
affect the determination of the principal amount of notes that 58
may be issued in anticipation of any tax levies or the amount of 59
bonds or notes for any planned improvements. If after 60
application of sections 5705.31 and 5705.32 of the Revised Code 61
and other applicable provisions of law, including division (F) of 62
section 321.24 of the Revised Code, there would be insufficient 63
funds for payment of debt charges on bonds or notes payable from 64
taxes reduced by this section, the reduction of taxes provided 65
for in this section shall be adjusted to the extent necessary to 66
provide funds from such taxes. 67
Sec. 5711.22. (A) Deposits not taxed at the source shall 76
be listed and assessed at their amount in dollars on the day they 77
are required to be listed. Moneys shall be listed and assessed 78
at the amount thereof in dollars on hand on the day that they are 79
required to be listed. In listing investments, the amount of the 80
income yield of each for the calendar year next preceding the 81
date of listing shall, except as otherwise provided in this 82
chapter, be stated in dollars and cents and the assessment 83
thereof shall be at the amount of such income yield; but any 84
property defined as investments in either division (A) or (B) of 85
section 5701.06 of the Revised Code that has not been outstanding 87
for the full calendar year next preceding the date of listing, 88
except shares of stock of like kind as other shares of the same 89
corporation outstanding for the full calendar year next preceding 90
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the date of listing, or which has yielded no income during such 91
calendar year shall be listed and assessed as unproductive 92
investments, at their true value in money on the day that such 93
investments are required to be listed.
Credits and other taxable intangibles shall be listed and 95
assessed at their true value in money on the day as of which the 96
same are required to be listed. 97
Shares of stock of a bank holding company, as defined in 99
Title 12 U.S.C.A., section 1841, which are required to be listed 100
for taxation under this division and upon which dividends were 101
paid during the year of their issuance, which dividends are 102
subject to taxation under the provisions of Chapter 5747. of the 103
Revised Code, shall be exempt from the intangibles tax for the 104
year immediately succeeding their issuance. If such shares bear 106
dividends the first calendar year after their issuance, which 107
dividends are subject to taxation under the provisions of Chapter 108
5747. of the Revised Code, it shall be deemed that the 109
nondelinquent intangible property tax pursuant to division (A) of 110
section 5707.04 of the Revised Code was paid on those dividends 111
paid that first calendar year after the issuance of the shares. 112
(B)(1) Boilers, machinery, equipment, and personal 114
property the true value of which is determined under division (B) 115
of section 5711.21 of the Revised Code shall be listed and 116
assessed at an amount equal to the sum of the products determined 117
under divisions (B)(1)(a), (b), and (c) of this section. 118
(a) Multiply the portion of the true value determined 120
under division (B)(1) of section 5711.21 of the Revised Code by 121
the assessment rate for the appropriate year in division (D)(E) 123
of this section;
(b) Multiply the portion of the true value determined 125
under division (B)(2) of section 5711.21 of the Revised Code by 126
the assessment rate in section 5727.111 of the Revised Code that 127
is applicable to the production equipment of an electric company; 128
(c) Multiply the portion of the true value determined 130
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under division (B)(3) of section 5711.21 of the Revised Code by 131
the assessment rate in section 5727.111 of the Revised Code that 132
is applicable to the property of an electric company that is not 133
production equipment. 134
(2) Personal property leased to a public utility or 136
interexchange telecommunications company as defined in section 137
5727.01 of the Revised Code and used directly in the rendition of 138
a public utility service as defined in division (P) of section 139
5739.01 of the Revised Code shall be listed and assessed at the 140
same percentage of true value in money that such property is 141
required to be assessed by section 5727.111 of the Revised Code 142
if owned by the public utility or interexchange 143
telecommunications company. 144
(C)(1) Merchandise or an agricultural product shipped from 146
outside this state and held in this state in a warehouse or a 147
place of storage without further manufacturing or processing and 148
for storage only and for shipment outside this state, but that is 150
taxable because it does not qualify as "not used in business in 152
this state" under division (B)(1) or (2) of section 5701.08 of
the Revised Code, shall be listed and assessed at a rate of 153
twenty-five one-hundredths of its true value in money until 154
reduced in accordance with the following schedule: 155
(a) For any year, subtract five one-hundredths from the 157
rate at which such property was required to be listed and 158
assessed in the preceding year, if the total statewide collection 159
of all real and tangible personal property taxes for the second 161
preceding year exceeded the total statewide collection of all
real and tangible personal property taxes for the third preceding 162
year by more than the greater of four per cent or the rate of 163
increase from the third to the second preceding years in the 164
average consumer price index (all urban consumers, all items) 165
prepared by the bureau of labor statistics of the United States 166
department of labor;
(b) If no reduction in the assessment rate is made for a 168
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year, the rate is the same as for the preceding year. 169
(2) Each year until the year the assessment rate equals 171
zero, the tax commissioner shall determine the assessment rate 172
required under this division and shall notify all county auditors 173
of that rate.
(3) Notwithstanding provisions to the contrary in division 175
(B) of section 5701.08 of the Revised Code, during and after the 176
year for which the assessment rate as calculated under this 177
division equals zero, any merchandise or agricultural product 178
shipped from outside this state and held in this state in any 179
warehouse or place of storage, whether public or private, without
further manufacturing or processing and for storage only and for 180
shipment outside this state to any person for any purpose is not 181
used in business in this state for property tax purposes. 183
(D)(1) Merchandise or an agricultural product owned by a 185
qualified out-of-state person shipped from outside this state and 187
held in this state in a public warehouse without further
manufacturing or processing and for temporary storage only and 188
for shipment inside this state, but that is taxable because it 189
does not qualify as "not used in business in this state" under 190
division (B)(1) or (2) of section 5701.08 of the Revised Code, 193
shall be listed and assessed at a rate of twenty-five 194
one-hundredths of its true value in money until reduced in 195
accordance with the following schedule: 196
(a) For any year, subtract five one-hundredths from the 199
rate at which such property was required to be listed and 200
assessed in the preceding year, if the total statewide collection 201
of all real and tangible personal property taxes for the second 202
preceding year exceeded the total statewide collection of all 203
real and tangible personal property taxes for the third preceding 204
year by more than the greater of four per cent or the rate of 205
increase from the third to the second preceding years in the 206
average consumer price index (all urban consumers, all items) 207
prepared by the bureau of labor statistics of the United States 209
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department of labor; 210
(b) If no reduction in the assessment rate is made for a 213
year, the rate is the same as for the preceding year. 214
(2) Each year until the year the assessment rate equals 216
zero, the tax commissioner shall determine the assessment rate 217
required under this division and shall notify all county auditors 219
of that rate.
(3) Notwithstanding provisions to the contrary in division 222
(B) of section 5701.08 of the Revised Code, during and after the 224
year for which the assessment rate as calculated under this 225
division equals zero, any merchandise or agricultural product 226
described in division (D)(1) of this section is not used in 228
business in this state for property tax purposes. 229
(4) As used in division (D) of this section: 232
(a) "Qualified out-of-state person" means a person that 235
does not own, lease, or use property, other than merchandise or 236
an agricultural product described in this division, in this 237
state, and does not have employees, agents, or representatives in 238
this state;
(b) "Public warehouse" means a warehouse in this state 241
that is not subject to the control of or under the supervision of 242
the owner of the merchandise or agricultural product stored in 243
it, or staffed by the owner's employees, and from which the 244
property is to be shipped inside this state. 245
(E) PERSONAL PROPERTY VALUED PURSUANT TO SECTIONS 5711.15 247
AND 5711.16 OF THE REVISED CODE, EXCEPT PROPERTY DESCRIBED IN 249
DIVISION (C) OR (D) OF THIS SECTION AND ENGINES, MACHINERY, 252
TOOLS, AND IMPLEMENTS OF EVERY KIND USED OR DESIGNED TO BE USED
IN REFINING AND MANUFACTURING, AND OWNED OR USED BY A 253
MANUFACTURER, SHALL BE LISTED AND ASSESSED AT THE PERCENTAGE OF 254
TRUE VALUE FOR EACH TAX YEAR AS SHOWN IN THE FOLLOWING TABLE: 256
TAX YEAR ASSESSMENT RATE 258
1999 24% 259
2000 23% 260
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2001 22% 261
2002 21% 262
2003 20% 263
2004 19% 264
2005 18% 265
2006 17% 266
2007 16% 267
2008 AND THEREAFTER 15% 268
(F) Unless otherwise provided by law, all other personal 271
property used in business that has not been legally regarded as 272
an improvement on land and considered in arriving at the value of 273
the real property assessed for taxation shall be listed and 274
assessed at the rate of twenty-five per cent of its true value in 276
money.
Sec. 5727.111. The taxable property of each public 284
utility, except a railroad company, and of each interexchange 285
telecommunications company shall be assessed at the following 286
percentages of true value: 287
(A) Fifty per cent in the case of a rural electric 289
company; 290
(B) In the case of a telephone or telegraph company, the 293
percentage provided under division (E)(F) of section 5711.22 of 294
the Revised Code for taxable property first subject to taxation 295
in this state for tax year 1995 or thereafter, and eighty-eight 296
per cent for all other taxable property;
(C) Eighty-eight per cent in the case of a natural gas or 298
pipe-line company; 299
(D) Eighty-eight per cent in the case of a water-works or 301
heating company; 302
(E) One hundred per cent in the case of the taxable 304
production equipment of an electric company; 305
(F) Eighty-eight per cent in the case of all taxable 307
personal property of an electric company, other than its 308
production equipment; 309
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(G) The percentage provided under division (E)(F) of 312
section 5711.22 of the Revised Code in the case of an 313
interexchange telecommunications company; 314
(H) Twenty-five per cent in the case of a water 316
transportation company. 317
Sec. 5727.12. As used in this chapter, "property used in 326
railroad operations" means property used in or determined by the 327
tax commissioner to be held by a railroad for use in railroad 328
operations. In determining the true value of all real and 329
personal property owned or leased by each railroad company and 330
used in railroad operations, the commissioner shall use the 331
unitary method and value all of the property of the company's 332
railroad system as a whole, considering the factors generally 333
used in that method, and weighing each factor appropriately. The 334
true value of the property used in railroad operations shall be 335
apportioned to this state as provided in section 5727.14 of the 336
Revised Code. The commissioner shall separately determine the 337
true value of property owned by the company that the commissioner 339
determines is not used in railroad operations. The commissioner 340
may require the advice of county auditors concerning such values. 342
All property of a railroad shall be assessed for taxation 344
at the same percentage of true value at which all other real 345
property in this state is assessed, in the case of real property, 346
and at the percentage of true value provided under division (E) 347
OR (F) of section 5711.22 of the Revised Code, in the case of 348
personal property. 349
A determination of the value of each tract, lot, or parcel 351
of real property or each item of personal property not used in 352
railroad operations shall be considered a separate determination 353
with respect to which a separate petition for reassessment may be 354
filed under section 5727.47 of the Revised Code. 355
Where a line of railroad is subsidized under the terms of 357
the federal regional rail reorganization act or the federal rail 358
revitalization and regulatory reform act, the real and other 359
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fixed property shall be assessed solely in the name of its owner. 360
Sec. 5739.029. THERE IS HEREBY LEVIED, BEGINNING JULY 1, 363
1998, AN EXCISE TAX OF ONE-HALF PER CENT ON EACH RETAIL SALE MADE 364
IN THIS STATE AND ON THE STORAGE, USE, OR OTHER CONSUMPTION IN
THIS STATE OF TANGIBLE PERSONAL PROPERTY OR THE BENEFIT REALIZED 365
IN THIS STATE OF ANY SERVICE PROVIDED. ALL PROCEEDS OF THE TAX 366
SHALL BE CREDITED TO THE SCHOOL TRUST FUND, WHICH IS HEREBY 367
CREATED IN THE STATE TREASURY, AND SHALL BE USED SOLELY FOR THE 369
PURPOSES OF PAYING COSTS OF SCHOOL OPERATIONS, SCHOOL FACILITIES 370
AND DEBT SERVICE FOR SCHOOL FACILITIES, EDUCATION TECHNOLOGY, AND 371
PROPERTY TAX RELIEF. THE TAXES HEREBY LEVIED ARE IN ADDITION TO 374
THE SALES AND USE TAXES LEVIED BY OR PURSUANT TO LAW AND ARE 375
SUBJECT TO THE SAME EXEMPTIONS AND EXCEPTIONS, AND SHALL BE 377
IMPOSED AND COLLECTED PURSUANT TO THE SAME PROCEDURES, PROVIDED
BY LAW AS IT EXISTS ON JULY 1, 1998, FOR OTHER STATE SALES AND 378
USE TAXES, AND AS SUCH LAW MAY BE AMENDED FROM TIME TO TIME BY 379
THE GENERAL ASSEMBLY. 380
Sec. 5747.37. (A) AS USED IN THIS SECTION: 383
(1) "HOMESTEAD" HAS THE SAME MEANING AS IN SECTION 323.151 386
OF THE REVISED CODE. FOR THE PURPOSES OF THIS SECTION, A 387
TAXPAYER CLAIMING THE CREDIT UNDER THIS SECTION MUST BE THE 388
INDIVIDUAL REFERRED TO IN THE DEFINITION OF "HOMESTEAD" UNDER 389
SECTION 323.151 OF THE REVISED CODE, OR THE SPOUSE OF THAT 390
INDIVIDUAL. 391
(2) "RESIDENTIAL PROPERTY TAXES" MEANS TAXES CHARGED 393
AGAINST A HOMESTEAD. 394
(B) THERE IS HEREBY GRANTED A REFUNDABLE CREDIT AGAINST 397
THE TAX IMPOSED BY SECTION 5747.02 OF THE REVISED CODE FOR 398
RESIDENTIAL PROPERTY TAXES PAID BY A TAXPAYER DURING THE TAXABLE 399
YEAR. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 1998, 401
BUT PRIOR TO JANUARY 1, 1999, THE AMOUNT OF THE CREDIT SHALL 403
EQUAL THE LESSER OF FIFTY DOLLARS OR FIVE PER CENT OF THE 404
RESIDENTIAL PROPERTY TAXES PAID BY THE TAXPAYER DURING THE 405
TAXABLE YEAR. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 406
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1999, THE AMOUNT OF THE CREDIT SHALL EQUAL THE LESSER OF ONE 408
HUNDRED DOLLARS OR TEN PER CENT OF THE RESIDENTIAL PROPERTY TAXES 409
PAID BY THE TAXPAYER DURING THE TAXABLE YEAR. IF A TAXPAYER
CLAIMS A CREDIT UNDER THIS SECTION, NO OTHER PERSON MAY CLAIM THE 410
CREDIT FOR RESIDENTIAL PROPERTY TAXES PAID ON THAT TAXPAYER'S 411
HOMESTEAD DURING THE TAXPAYER'S TAXABLE YEAR. 412
THE TAXPAYER SHALL CLAIM THE CREDIT AFTER ALL OTHER CREDITS 415
CLAIMED BY THE TAXPAYER IN THE ORDER PRESCRIBED BY SECTION 416
5747.98 OF THE REVISED CODE. IF THE AMOUNT OF THE CREDIT EXCEEDS 417
THE AMOUNT OF TAX OTHERWISE DUE UNDER SECTION 5747.02 OF THE 418
REVISED CODE AFTER DEDUCTION OF ALL OTHER CREDITS CLAIMED BY THE 419
TAXPAYER, THE TAXPAYER IS ENTITLED TO A REFUND OF THE EXCESS. 420
THE TAX COMMISSIONER MAY REQUIRE TAXPAYERS CLAIMING THE 422
CREDIT UNDER THIS SECTION TO FURNISH THE TAX COMMISSIONER WITH 423
DOCUMENTATION SUBSTANTIATING THE TAXPAYER'S CLAIM FOR THE CREDIT, 425
AND, IF SUCH DOCUMENTATION IS REQUIRED, THE CREDIT SHALL NOT BE 426
GRANTED UNLESS THE TAXPAYER FURNISHES THE DOCUMENTATION. 427
Section 2. That existing sections 319.302, 5711.22, 429
5727.111, and 5727.12 of the Revised Code are hereby repealed. 431
Section 3. The General Assembly shall enact laws providing 433
reimbursement to school districts for part of their revenue 434
losses resulting from the first four years of reduction in the 435
tangible personal property tax on business inventory pursuant to 436
section 5711.22 of the Revised Code as amended by this act. 437
Section 4. Sections 1, 2, and 3 of this act shall take 439
effect only if approved by a majority of the electors voting 440
thereon, as provided in Section 5 of this act, as permitted by 441
Section 26 of Article II, Ohio Constitution, as it relates to 442
public schools.
Section 5. The Secretary of State shall submit to the 444
electors at a special election to be held on May 5, 1998, as a 445
single proposition, approval of the amendment of sections 446
319.302, 5711.22, 5727.111, and 5727.12 and the enactment of 447
sections 5739.029 and 5747.37 of the Revised Code as set forth 448
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within the purview of Sections 1 and 2 of this act, and the 449
enactment of Sections 3 and 4 of this act. 450
The Ohio Ballot Board, by majority vote, shall prescribe 452
ballot language for the proposal. The ballot language shall 453
properly identify the substance of the proposal to be voted upon. 454
The ballot need not contain the full text of the proposal. The 455
board shall prepare an explanation of the proposal, which may 456
include its purposes and effects, and shall certify the ballot
language and explanation to the Secretary of State. The ballot 457
language and the explanations shall be available for public 459
inspection in the Office of the Secretary of State. The board 460
also may prepare arguments for and against the proposal.
The Supreme Court of Ohio has exclusive, original 462
jurisdiction in all cases challenging the adoption or submission 463
of the proposal. The ballot language shall not be held invalid 465
unless it is such as to mislead, deceive, or defraud the voters. 466
The proposal, the ballot language, the explanations, and 468
the arguments, if any, shall be published at least one, but not 469
more than three, times preceding the election, in at least one 471
newspaper of general circulation in each county of the state 472
where a newspaper is published.
No court, except the Supreme Court of Ohio, is authorized 474
to enjoin or invalidate the election on the adoption or 475
submission of the proposal contained in this act. Nor shall such 476
election be enjoined or invalidated because the explanation, 477
arguments, or other information is faulty in any way.
Section 6. All items in this section are hereby 479
appropriated as designated out of any moneys in the state 480
treasury to the credit of the General Revenue Fund. For all 481
appropriations made in this act, those in the first column are
for fiscal year 1998 and those in the second column are for 482
fiscal year 1999. The appropriations made in this act are in 483
addition to any other appropriations made for the 1997-1999 484
biennium.
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SOS SECRETARY OF STATE 486
General Revenue Fund 488
GRF 050-XXX Special Election 490
Costs $ 1,000,000 $ 0 491
TOTAL GRF $ 1,000,000 $ 0 492
TOTAL ALL BUDGET FUND GROUPS $ 1,000,000 $ 0 493
Special Elections Costs 496
The foregoing appropriation item 050-XXX, Special Elections 498
Costs, shall be used by the Secretary of State for the special 499
election required by this act.
Within the limits set forth in this act, the Director of 501
Budget and Management shall establish accounts indicating source 502
and amount of funds for each appropriation made in this act, and 503
shall determine the form and manner in which appropriation 504
accounts shall be maintained. Expenditures from appropriations 505
contained in this act shall be accounted for as though made in
Am. Sub. H.B. 215 of the 122nd General Assembly. 506
The appropriations made in this act are subject to all 507
provisions of Am. Sub. H.B. 215 of the 122nd General Assembly 508
that are generally applicable to such appropriations. 509
Section 7. If any provision of a section of this act or 511
the application thereof to any person or circumstance is held 512
invalid, the invalidity does not affect other provisions or 513
applications of the section or related sections which can be 514
given effect without the invalid provision or application and to
this end the provisions are severable. 515
Section 8. Section 319.302 of the Revised Code is 517
presented in this act as a composite of the section as amended by 518
both Sub. H.B. 462 and Am. Sub. H.B. 517 of the 121st General 519
Assembly, with the new language of neither of the acts shown in 520
capital letters. This is in recognition of the principle stated 521
in division (B) of section 1.52 of the Revised Code that such 522
amendments are to be harmonized where not substantively 523
irreconcilable and constitutes a legislative finding that such is 524
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the resulting version in effect prior to the effective date of 525
this act.