REPRESENTATIVES Peterson, Schmidt, Clancy

To amend sections 183.02, 1309.528, 5111.872,

1

5123.043, 5123.046, 5123.048, 5123.049, 5123.0411,

2

5126.01, 5126.02, 5126.021, 5126.033, 5126.035,

3

5126.036, 5126.042, 5126.046, 5126.05, 5126.054,

4

5126.055, 5126.06, 5126.14, 5126.15, 5126.17,

5

5126.18, 5126.19, 5126.221, 5126.357, 5705.44,

6

5733.04, 5733.042, 5733.055, 5739.01, 5739.02,

7

5741.01, 5743.05, 5747.01, and 5747.02; to amend,

8

for the purpose of adopting a new section number as

9

indicated in parentheses, section 5126.056

10

(5126.057); and to enact new section 5126.056 and

11

section 5733.043 of the Revised Code and to amend

12

Sections 63.25, 74.01, 74.02, 104, and 140 of Am.

13

Sub. H.B. 94 of the 124th General Assembly, to

14

amend Section 41.10 of Am. Sub. H.B. 94 of the

15

124th General Assembly, as subsequently amended, to

16

amend Section 10 of Am. Sub. S.B. 192 of the 123rd

17

General Assembly, and to amend Section 9 of Am.

18

Sub. S.B. 192 of the 123rd General Assembly, as

19

subsequently amended, to revise provisions of Am.

20

Sub. H.B. 94 of the 124th General Assembly

21

regarding services for persons with mental

22

retardation or other developmental disabilities, to

23

revise the law governing membership of county

24

boards of mental retardation and developmental

25

disabilities, to suspend the net operating loss

26

deduction and expand the add-back of certain

27

expenses paid to related members under the

28

corporate franchise tax, to eliminate certain

29

exemptions under the sales tax, to tax certain

30

trust income, to modify Local Government Fund and

31

Tobacco Master Settlement Agreement Fund

32

distributions, to expand the uses of the Corporate

33

and Uniform Commercial Code Filing Fund, to revise

34

provisions of the TANF Housing Program within the

35

Department of Development, to authorize transfers

36

from the Budget Stabilization fund to the General

37

Revenue Fund, to make corrections, and to make

38

appropriations.

39

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

Section 1. That sections 183.02, 1309.528, 5111.872,	40
5123.043, 5123.046, 5123.048, 5123.049, 5123.0411, 5126.01,	41
5126.02, 5126.021, 5126.033, 5126.035, 5126.036, 5126.042,	42
5126.046, 5126.05, 5126.054, 5126.055, 5126.06, 5126.14, 5126.15,	43
5126.17, 5126.18, 5126.19, 5126.221, 5126.357, 5705.44, 5733.04,	44
5733.042, 5733.055, 5739.01, 5739.02, 5741.01, 5743.05, 5747.01,	45
and 5747.02 be amended, section 5126.056 (5126.057) be amended	46
for the purpose of adopting a new section number as indicated in	47
parentheses, and new section 5126.056 and section 5733.043 of the	48
Revised Code be enacted to read as follows:	49

Sec. 183.02.  This section's references to years mean state	50
fiscal years.	51

All payments received by the state pursuant to the tobacco	52
master settlement agreement shall be deposited into the state	53
treasury to the credit of the tobacco master settlement agreement	54
fund, which is hereby created. All investment earnings of the	55
fund shall also be credited to the fund. Except as provided in	56
division (I) of this section, payments and interest credited to	57
the fund shall be transferred by the director of budget and	58
management as follows:	59

(A)(1) Of the first payment credited to the tobacco master	60
settlement agreement fund in 2000 and the net amounts credited to	61
the fund annually from 2000 to 2006 and in 2012, the following	62
amount or percentage shall be transferred to the tobacco use	63
prevention and cessation trust fund, created in section 183.03 of	64
the Revised Code:	65

(2) Of the net amounts credited to the tobacco master	76
settlement agreement fund in 2013, the director shall transfer to	77
the tobacco use prevention and cessation trust fund the amount not	78
transferred to the tobacco use prevention and cessation trust fund	79
from the net amounts credited to the tobacco master settlement	80
agreement fund in 2002 due to H.B. No. 405 of the 124th general	81
assembly. Of the net amounts credited to the tobacco master	82
settlement agreement fund in 2014, the director shall transfer to	83
the tobacco use prevention and cessation trust fund the amount not	84
transferred to the tobacco use prevention and cessation trust fund	85
from the net amounts credited to the tobacco master settlement	86
agreement fund in 2003 due to H.B. No. 405 of the 124th general	87
assembly.	88

(B) Of the first payment credited to the tobacco master	89
settlement agreement fund in 2000 and the net amounts credited to	90
the fund annually in 2000 and 2001, the following amount or	91
percentage shall be transferred to the law enforcement	92
improvements trust fund, created in section 183.10 of the Revised	93
Code:	94

(C) Of the first payment credited to the tobacco master	99
settlement agreement fund in 2000 and the net amounts credited to	100
the fund annually from 2000 to 2011, the following percentages	101
shall be transferred to the southern Ohio agricultural and	102
community development trust fund, created in section 183.11 of the	103
Revised Code:	104

(D) The following percentages of the net amounts credited to	116
the tobacco master settlement agreement fund annually shall be	117
transferred to Ohio's public health priorities trust fund, created	118
in section 183.18 of the Revised Code:	119

(E) The following percentages of the net amounts credited to	134
the tobacco master settlement agreement fund annually shall be	135
transferred to the biomedical research and technology transfer	136
trust fund, created in section 183.19 of the Revised Code:	137

(F) Of the amounts credited to the tobacco master settlement	149
agreement fund annually, the following amounts shall be	150
transferred to the education facilities trust fund, created in	151
section 183.26 of the Revised Code:	152

(G) Of the amounts credited to the tobacco master settlement	164
agreement fund annually, from 2000 to 2012 five million dollars	165
per year shall be transferred to the education facilities	166
endowment fund, created in section 183.27 of the Revised Code.	167
From 2013 to 2025, the following percentages of the amounts	168
credited to the tobacco master settlement agreement fund annually	169
shall be transferred to the endowment fund:	170

(H) The following percentages of the net amounts credited to	175
the tobacco master settlement agreement fund annually shall be	176
transferred to the education technology trust fund, created in	177
section 183.28 of the Revised Code:	178

(I) If in any year from 2001 to 2012 the payments and	193
interest credited to the tobacco master settlement agreement fund	194
during the year amount to less than the amounts required to be	195
transferred to the education facilities trust fund and the	196
education facilities endowment fund that year, the director of	197
budget and management shall make none of the transfers required by	198
divisions (A) to (H) of this section.	199

(J) If in any year from 2000 to 2025 the payments credited	200
to the tobacco master settlement agreement fund during the year	201
exceed the following amounts, the director of budget and	202
management shall transfer the excess to the income tax reduction	203
fund, created in section 131.44 of the Revised Code:	204

Sec. 1309.401.        Sec.  1309.528.  (A) All fees collected by the	216
secretary of state for filings under Title XIII or XVII of the	217
Revised Code shall be deposited into the state treasury to the	218
credit of the corporate and uniform commercial code filing fund,	219
which is hereby created. All moneys credited to the fund,	220
subject to division (B) of this section, shall be used only for	221
the purpose of paying for the operations of the office of the	222
secretary of state, other than the division of elections, and for	223
the purpose of paying for expenses relating to the processing of	224
filings under Title XIII or XVII of the Revised Code.	225

(B) The secretary of state business technology fund There is	226
hereby created in the state treasury the secretary of state	227
business technology fund. One per cent of the money credited to	228
the corporate and uniform commercial code filing fund created in	229
division (A) of this section shall be transferred to the credit of	230
this fund. All moneys credited to this fund shall be used only	231
for the upkeep, improvement, or replacement of equipment, or for	232
the purpose of training employees in the use of equipment, used to	233
conduct business of the secretary of state's office under Title	234
XIII or XVII of the Revised Code.	235

Sec. 5111.872. When the department of mental retardation and	236
developmental disabilities allocates enrollment numbers to a	237
county board of mental retardation and developmental disabilities	238
for home and community-based services provided under the component	239
of the medicaid program that the department administers under	240
section 5111.871 of the Revised Code, the department shall	241
consider all of the following:	242

(A) The number of individuals with mental retardation or	243
other developmental disability who are on a waiting list the	244
county board establishes under division (C) of section 5126.042 of	245
the Revised Code for those services and are given priority on the	246
waiting list pursuant to division (D) of that section;	247

(B) The implementation component required by division	248
(A)(3)(4) of section 5126.054 of the Revised Code of the county	249
board's plan approved under section 5123.046 of the Revised Code;	250

(C) Anything else the department considers necessary to	251
enable county boards to provide those services to individuals in	252
accordance with the priority requirements of divisiondivisions	253
(D) and (E) of section 5126.042 of the Revised Code.	254

Sec. 5123.043.  (A) The director of mental retardation and	255
developmental disabilities shall adopt rules establishing	256
procedures for administrative resolution of complaints filed under	257
division (B) of this section and section 5126.06 of the Revised	258
Code. The rules shall be adopted in accordance with Chapter 119.	259
of the Revised Code.	260

(B) Except as provided in division (C) of this section, any	261
person whoor county board of mental retardation and developmental	262
disabilities that has a complaint involving any of the programs,	263
services, policies, or administrative practices of the department	264
of mental retardation and developmental disabilities or any of the	265
entities under contract with the department, may file a complaint	266
with the department. Prior to commencing a civil action regarding	267
the complaint, a person or county board shall attempt to have the	268
complaint resolved through the administrative resolution process	269
established in the rules adopted under this section. After	270
exhausting the administrative resolution process, the person or	271
county board may commence a civil action if the complaint is not	272
settled to the person's or county board's satisfaction.	273

(C) An employee of the department may not file under this	274
section a complaint related to the terms and conditions of	275
employment for the employee.	276

(D) This section does not apply to a conflict between a	277
county board of mental retardation and developmental disabilities	278
and a person or government entity that provides or seeks to	279
provide services to an individual with mental retardation or other	280
developmental disability. Section 5126.036 of the Revised Code	281
applies to such a conflict.	282

Sec. 5123.046. The department of mental retardation and	283
developmental disabilities shall review each component of the	284
three-calendar year plan it receives from a county board of mental	285
retardation and developmental disabilities under section 5126.054	286
of the Revised Code and, in consultation with the department of	287
job and family services and office of budget and management,	288
approve each plancomponent that includes all the information and	289
conditions specified in that section. AThe fourth component of	290
the plan shall be approved or disapproved not later than	291
forty-five days after the last of the plan's components arefourth	292
component is submitted to the department under division (B)(3) of	293
section 5126.054 of the Revised Code. If the department approves	294
all four components of the plan, the plan is approved. Otherwise,	295
the plan is disapproved. If the plan is disapproved, the	296
department shall take action against the county board under	297
division (B) of section 5126.056 of the Revised Code.	298

In approving plans under this section, the department shall	299
ensure that the aggregate of all plans provide for the increased	300
enrollment into home and community-based services during each	301
state fiscal year of at least five hundred individuals who did not	302
receive residential services, supported living, or home and	303
community-based services the prior state fiscal year if the	304
department has enough additional enrollment available for this	305
purpose.	306

If a county board fails to submit all the components of the	307
plan to the department within the time required by division (B) of	308
section 5126.054 of the Revised Code or the department disapproves	309
a county board's plan, the department may withhold all or part of	310
any funds the department would otherwise allocate to the county	311
board. The department may not withhold any funds the department	312
allocates to the county board prior to the date the last of the	313
plan's components are due or the department disapproves the plan.	314

The department shall establish protocols that the department	315
shall use to determine whether a county board is complying with	316
the programmatic and financial accountability mechanisms and	317
achieving outcomes specified in its approved plan. If the	318
department determines that a county board is not in compliance	319
with the mechanisms or achieving the outcomes specified in its	320
approved plan, the department may take action under division (G)	321
of section 5126.055 of the Revised Code.	322

Sec. 5123.048. (A) For state fiscal year 2002, the	323
department of mental retardation and developmental disabilities	324
shall assign to a county board of mental retardation and	325
developmental disabilities the nonfederal share of medicaid	326
expenditures for habilitation center services that a private	327
habilitation center provides if all of the following apply:	328

(1) The individuals who receive the services also received	329
the services from the center pursuant to a contract the center had	330
with the department in state fiscal year 2001;	331

(2) The county board determined under section 5126.041 of	332
the Revised Code that the individuals who receive the services are	333
eligible for county board services;	334

(3) The county board contracts with the center to provide	335
the services after the center's contract with the department ends.	336

(B) The department shall also make the assignment under	337
division (A) of this section for each successive state fiscal year	338
that the county board contracts with the private habilitation	339
center to provide the habilitation center services to the	340
individuals who received the services pursuant to the contract the	341
department had with the center in state fiscal year 2001.	342

(C) The amount the department shall assign under divisions	343
(A) and (B) of this section shall be adequate to ensure that the	344
habilitation center services the individuals receive are	345
comparable in scope to the habilitation center services they	346
received when the private habilitation center was under contract	347
with the department. The amount that the department assigns shall	348
not be less than the amount the department paid the private	349
habilitation center for the individuals undereach individual who	350
received the habilitation center services pursuant to the contract	351
the department had with the center in fiscal year 2001. If the	352
contract the department had with the private habilitation center	353
in fiscal year 2001 was for less than the entire fiscal year, the	354
amount the department shall assign shall be not less than the	355
amount the department would have paid the center for each	356
individual who received the services pursuant to the contract had	357
the contract been for the entire fiscal year.	358

(D) A county board shall use the assignment it receives	359
under divisions (A) and (B) of this section to pay the nonfederal	360
share of the medicaid expenditures for the habilitation center	361
services the county board is required by division (D) of section	362
5111.041 of the Revised Code to pay.	363

Sec. 5123.049. The director of mental retardation and	364
developmental disabilities shall adopt rules in accordance with	365
Chapter 119. of the Revised Code governing the authorization and	366
payment of home and community-based services, medicaid case	367
management services, and habilitation center services. The rules	368
shall provide for private providers of the services to receive one	369
hundred per cent of the medicaid allowable payment amount and for	370
government providers of the services to receive the federal share	371
of the medicaid allowable payment, less the amount withheld as a	372
fee under section 5123.0412 of the Revised Code and any amount	373
that may be required by rules adopted under section 5123.0413 of	374
the Revised Code to be deposited into the state MR/DD risk fund.	375
The rules shall establish the process by which county boards of	376
mental retardation and developmental disabilities shall certify	377
and provide the nonfederal share of medicaid expenditures that the	378
county board is required by division (A) of section 5126.056	379
5126.057 of the Revised Code to pay. The process shall require a	380
county board to certify that the county board has funding	381
available at one time for two months costs for those expenditures.	382
The process may permit a county board to certify that the county	383
board has funding available at one time for more than two months	384
costs for those expenditures.	385

Sec. 5123.0411. The department of mental retardation and	386
developmental disabilities may bring a mandamus action against a	387
county board of mental retardation and developmental disabilities	388
that fails to pay the nonfederal share of medicaid expenditures	389
that the county board is required by division (A) of section	390
5126.0565126.057 of the Revised Code to pay. The department may	391
bring the mandamus action in the court of common pleas of the	392
county served by the county board or in the Franklin county court	393
of common pleas.	394

Sec. 5126.01.  As used in this chapter:

395

(A) As used in this division, "adult" means an individual	396
who is eighteen years of age or over and not enrolled in a	397
program or service under Chapter 3323. of the Revised Code and an	398
individual sixteen or seventeen years of age who is eligible for	399
adult services under rules adopted by the director of mental	400
retardation and developmental disabilities pursuant to Chapter	401
119. of the Revised Code.	402

(1) "Adult services" means services provided to an adult	403
outside the home, except when they are provided within the home	404
according to an individual's assessed needs and identified in an	405
individual service plan, that support learning and assistance in	406
the area of self-care, sensory and motor development,	407
socialization, daily living skills, communication, community	408
living, social skills, or vocational skills.	409

(2) "Adult services" includes all of the following:

410

(a) Adult day habilitation services;

411

(b) Adult day care;

412

(c) Prevocational services;

413

(d) Sheltered employment;

414

(e) Educational experiences and training obtained through	415
entities and activities that are not expressly intended for	416
individuals with mental retardation and developmental	417
disabilities, including trade schools, vocational or technical	418
schools, adult education, job exploration and sampling, unpaid	419
work experience in the community, volunteer activities, and	420
spectator sports.	421

(3) "Adult services" does not include community or;

422

(f) Community employment services and supported employment	423
services.	424

(B)(1) "Adult day habilitation services" means adult	425
services that do the following:	426

(a) Provide access to and participation in typical	427
activities and functions of community life that are desired and	428
chosen by the general population, including such activities and	429
functions as opportunities to experience and participate in	430
community exploration, companionship with friends and peers,	431
leisure activities, hobbies, maintaining family contacts,	432
community events, and activities where individuals without	433
disabilities are involved;	434

(b) Provide supports or a combination of training and	435
supports that afford an individual a wide variety of opportunities	436
to facilitate and build relationships and social supports in the	437
community.	438

(2) "Adult day habilitation services" includes all of the	439
following:	440

(a) Personal care services needed to ensure an individual's	441
ability to experience and participate in vocational services,	442
educational services, community activities, and any other adult	443
day habilitation services;	444

(b) Skilled services provided while receiving adult day	445
habilitation services, including such skilled services as behavior	446
management intervention, occupational therapy, speech and language	447
therapy, physical therapy, and nursing services;	448

(c) Training and education in self-determination designed to	449
help the individual do one or more of the following: develop	450
self-advocacy skills, exercise the individual's civil rights,	451
acquire skills that enable the individual to exercise control and	452
responsibility over the services received, and acquire skills that	453
enable the individual to become more independent, integrated, or	454
productive in the community;	455

(d) Recreational and leisure activities identified in the	456
individual's service plan as therapeutic in nature or assistive in	457
developing or maintaining social supports;	458

(e) Counseling and assistance provided to obtain housing,	459
including such counseling as identifying options for either rental	460
or purchase, identifying financial resources, assessing needs for	461
environmental modifications, locating housing, and planning for	462
ongoing management and maintenance of the housing selected;	463

(f) Transportation necessary to access adult day	464
habilitation services;	465

(g) Habilitation management, as described in section 5126.14	466
of the Revised Code.	467

(3) "Adult day habilitation services" does not include	468
activities that are components of the provision of residential	469
services, family support services, or supported living services.	470

(C) "Community employment services" or "supported employment	471
services" means job training and other services related to	472
employment outside a sheltered workshop. "Community employment	473
services" or "supported employment services" include all of the	474
following:	475

(1) Job training resulting in the attainment of competitive	476
work, supported work in a typical work environment, or	477
self-employment;	478

(2) Supervised work experience through an employer paid to	479
provide the supervised work experience;	480

(3) Ongoing work in a competitive work environment at a wage	481
commensurate with workers without disabilities;	482

(4) Ongoing supervision by an employer paid to provide the	483
supervision.	484

(D) As used in this division, "substantial functional	485
limitation," "developmental delay," and "established risk" have	486
the meanings established pursuant to section 5123.011 of the	487
Revised Code.	488

"Developmental disability" means a severe, chronic disability	489
that is characterized by all of the following:	490

(1) It is attributable to a mental or physical impairment or	491
a combination of mental and physical impairments, other than a	492
mental or physical impairment solely caused by mental illness as	493
defined in division (A) of section 5122.01 of the Revised Code;	494

(2) It is manifested before age twenty-two;

495

(3) It is likely to continue indefinitely;

496

(4) It results in one of the following:

497

(a) In the case of a person under age three, at least one	498
developmental delay or an established risk;	499

(b) In the case of a person at least age three but under age	500
six, at least two developmental delays or an established risk;	501

(c) In the case of a person age six or older, a substantial	502
functional limitation in at least three of the following areas of	503
major life activity, as appropriate for the person's age:	504
self-care, receptive and expressive language, learning, mobility,	505
self-direction, capacity for independent living, and, if the	506
person is at least age sixteen, capacity for economic	507
self-sufficiency.	508

(5) It causes the person to need a combination and sequence	509
of special, interdisciplinary, or other type of care, treatment,	510
or provision of services for an extended period of time that is	511
individually planned and coordinated for the person.	512

(E) "Early childhood services" means a planned program of	513
habilitation designed to meet the needs of individuals with mental	514
retardation or other developmental disabilities who have not	515
attained compulsory school age.	516

(F)(1) "Environmental modifications" means the physical	517
adaptations to an individual's home, specified in the individual's	518
service plan, that are necessary to ensure the individual's	519
health, safety, and welfare or that enable the individual to	520
function with greater independence in the home, and without which	521
the individual would require institutionalization.	522

(2) "Environmental modifications" includes such adaptations	523
as installation of ramps and grab-bars, widening of doorways,	524
modification of bathroom facilities, and installation of	525
specialized electric and plumbing systems necessary to accommodate	526
the individual's medical equipment and supplies.	527

(3) "Environmental modifications" does not include physical	528
adaptations or improvements to the home that are of general	529
utility or not of direct medical or remedial benefit to the	530
individual, including such adaptations or improvements as	531
carpeting, roof repair, and central air conditioning.	532

(G) "Family support services" means the services provided	533
under a family support services program operated under section	534
5126.11 of the Revised Code.	535

(H) "Habilitation" means the process by which the staff of	536
the facility or agency assists an individual with mental	537
retardation or other developmental disability in acquiring and	538
maintaining those life skills that enable the individual to cope	539
more effectively with the demands of the individual's own person	540
and environment, and in raising the level of the individual's	541
personal, physical, mental, social, and vocational efficiency.	542
Habilitation includes, but is not limited to, programs of formal,	543
structured education and training.	544

(I) "Habilitation center services" means services provided	545
by a habilitation center certified by the department of mental	546
retardation and developmental disabilities under section 5123.041	547
of the Revised Code and covered by the medicaid program pursuant	548
to rules adopted under section 5111.041 of the Revised Code.	549

(J) "Home and community-based services" means	550
medicaid-funded home and community-based services provided under a	551
medicaid component the department of mental retardation and	552
developmental disabilities administers pursuant to section	553
5111.871 of the Revised Code.	554

(K) "Medicaid" has the same meaning as in section 5111.01 of	555
the Revised Code.	556

(L) "Medicaid case management services" means case	557
management services provided to an individual with mental	558
retardation or other developmental disability that the state	559
medicaid plan requires.	560

(M) "Mental retardation" means a mental impairment	561
manifested during the developmental period characterized by	562
significantly subaverage general intellectual functioning existing	563
concurrently with deficiencies in the effectiveness or degree with	564
which an individual meets the standards of personal independence	565
and social responsibility expected of the individual's age and	566
cultural group.	567

(N) "Residential services" means services to individuals	568
with mental retardation or other developmental disabilities to	569
provide housing, food, clothing, habilitation, staff support, and	570
related support services necessary for the health, safety, and	571
welfare of the individuals and the advancement of their quality of	572
life. "Residential services" includes program management, as	573
described in section 5126.14 of the Revised Code.	574

(O) "Resources" means available capital and other assets,	575
including moneys received from the federal, state, and local	576
governments, private grants, and donations; appropriately	577
qualified personnel; and appropriate capital facilities and	578
equipment.	579

(P) "Service and support administration" means the duties	580
performed by a service and support administrator pursuant to	581
section 5126.15 of the Revised Code.	582

(Q)(1) "Specialized medical, adaptive, and assistive	583
equipment, supplies, and supports" means equipment, supplies, and	584
supports that enable an individual to increase the ability to	585
perform activities of daily living or to perceive, control, or	586
communicate within the environment.	587

(2) "Specialized medical, adaptive, and assistive equipment,	588
supplies, and supports" includes the following:	589

(a) Eating utensils, adaptive feeding dishes, plate guards,	590
mylatex straps, hand splints, reaches, feeder seats, adjustable	591
pointer sticks, interpreter services, telecommunication devices	592
for the deaf, computerized communications boards, other	593
communication devices, support animals, veterinary care for	594
support animals, adaptive beds, supine boards, prone boards,	595
wedges, sand bags, sidelayers, bolsters, adaptive electrical	596
switches, hand-held shower heads, air conditioners, humidifiers,	597
emergency response systems, folding shopping carts, vehicle lifts,	598
vehicle hand controls, other adaptations of vehicles for	599
accessibility, and repair of the equipment received.	600

(b) Nondisposable items not covered by medicaid that are	601
intended to assist an individual in activities of daily living or	602
instrumental activities of daily living.	603

(R) "Supportive home services" means a range of services to	604
families of individuals with mental retardation or other	605
developmental disabilities to develop and maintain increased	606
acceptance and understanding of such persons, increased ability of	607
family members to teach the person, better coordination between	608
school and home, skills in performing specific therapeutic and	609
management techniques, and ability to cope with specific	610
situations.	611

(S)(1) "Supported living" means services provided for as	612
long as twenty-four hours a day to an individual with mental	613
retardation or other developmental disability through any public	614
or private resources, including moneys from the individual, that	615
enhance the individual's reputation in community life and advance	616
the individual's quality of life by doing the following:	617

(a) Providing the support necessary to enable an individual	618
to live in a residence of the individual's choice, with any number	619
of individuals who are not disabled, or with not more than three	620
individuals with mental retardation and developmental disabilities	621
unless the individuals are related by blood or marriage;	622

(b) Encouraging the individual's participation in the	623
community;	624

(c) Promoting the individual's rights and autonomy;

625

(d) Assisting the individual in acquiring, retaining, and	626
improving the skills and competence necessary to live successfully	627
in the individual's residence.	628

(2) "Supported living" includes the provision of all of the	629
following:	630

(a) Housing, food, clothing, habilitation, staff support,	631
professional services, and any related support services necessary	632
to ensure the health, safety, and welfare of the individual	633
receiving the services;	634

(b) A combination of life-long or extended-duration	635
supervision, training, and other services essential to daily	636
living, including assessment and evaluation and assistance with	637
the cost of training materials, transportation, fees, and	638
supplies;	639

(c) Personal care services and homemaker services;

640

(d) Household maintenance that does not include	641
modifications to the physical structure of the residence;	642

(e) Respite care services;

643

(f) Program management, as described in section 5126.14 of	644
the Revised Code.	645

Sec. 5126.02.  (A) As used in this section, "relative" means	646
a spouse, parent, parent-in-law, sibling, sibling-in-law, child,	647
child-in-law, grandparent, aunt, or uncle.	648

(B)(1) There is hereby created in each county a county	649
board of mental retardation and developmental disabilities	650
consisting of seven members, five of whom shall be appointed by	651
the board of county commissioners of the county, and two of whom	652
shall be appointed by the probate judge of the county. Each	653
member shall be a resident of the county. The membership of the	654
board shall, as nearly as possible, reflect the composition of the	655
population of the county.	656

All board members shall be persons interested and	657
knowledgeable in the field of mental retardation and other allied	658
fields. All board members shall be citizens of the United States.	659
Of the members appointed by the board of county commissioners, at	660
least two shall be relatives by blood or marriage of persons	661
eligible for and currently receiving services provided by the	662
county board of mental retardation and developmental disabilities,	663
and, whenever possible, one shall be a relative of a person	664
eligible for and currently receiving adult services, and the other	665
shall be a relative of a person eligible for and currently	666
receivingearly intervention services or services for pre-school	667
or school-age children. Of the two members appointed by the	668
probate judge, at least one shall be a relative by blood or	669
marriage of a person eligible for or currently receiving	670
residential services in a public or private residential facility	671
subject to regulation or licensure by the director of mental	672
retardation and developmental disabilities under sections 5123.19	673
and 5123.20 of the Revised Codeor supported living.	674

Both the board of county commissioners and the probate judge	675
shall appoint under this section, to the maximum extent possible,	676
members who fulfill any applicable requirements of this section	677
for appointment and who also have professional training and	678
experience in business management, finance, law, health care	679
practice, personnel administration, or government service.	680

(2) All appointments shall be for terms of four years. The	681
membership of a person appointed as a relative of a recipient of	682
services shall not be terminated because the services are no	683
longer received.	684

Members may be reappointed, except as provided in division	685
(A)(B)(3) of this section and section 5126.022 of the Revised	686
Code. Prior to making a reappointment, the appointing authority	687
shall ascertain, through written communication with the board,	688
that the member being considered for reappointment meets the	689
requirements of this section and section 5126.022 of the Revised	690
Code.	691

(3) A member who has served during each of twothree	692
consecutive terms shall not be reappointed for a subsequent term	693
until one yeartwo years after ceasing to be a member of the	694
board, except that a member who has served for sixten years or	695
less within twothree consecutive terms may be reappointed for a	696
subsequent term before becoming ineligible for reappointment for	697
one yeartwo years.	698

(4) Within sixty days after a vacancy occurs, it shall be	699
filled by the appointing authority for the unexpired term. Any	700
member appointed to fill a vacancy occurring prior to the	701
expiration of the term for which the member's predecessor was	702
appointed shall hold office for the remainder of that term.	703
Appointment other than appointment to fill a vacancy shall be made	704
no later than the last day of November of each year, and the term	705
of office shall commence on the date of the stated annual	706
organizational meeting in January.	707

(5) Board members shall serve without compensation, but	708
shall be reimbursed for necessary expenses incurred in the conduct	709
of board business, including those incurred within the county of	710
residence.	711

(B)(C) Each year each board member shall attend at least one	712
in-service training session provided by or approved by the	713
department of mental retardation and developmental disabilities.	714
These training sessions shall not be considered regularly	715
scheduled meetings of the board.	716

(C)(D) A county board of mental retardation and	717
developmental disabilities shall be operated as a separate	718
administrative and service entity. The board's functions shall	719
not be combined with the functions of any other entity of county	720
government.	721

Sec. 5126.021.  As used in this section, "immediate family"	722
means parents, brothers, sisters, spouses, sons, daughters,	723
mothers-in-law, fathers-in-law, brothers-in-law, sisters-in-law,	724
sons-in-law, and daughters-in-law.	725

(A) The following individuals shall not serve as members of	726
county boards of mental retardation and developmental	727
disabilities:	728

(1) Elected public officials, except for township trustees,	729
township clerks, and those excluded from the definition of public	730
official or employee in division (B) of section 102.01 of the	731
Revised Code;	732

(2) Members of the immediate family of another board member;

733

(3) Board employees and members of the immediate family of	734
board employees;	735

(4) Former board employees within one calendar year of the	736
termination of employment with the board on which the former	737
employee would serve.	738

(B) A person may not serve as a member of a county board of	739
mental retardation and developmental disabilities when either the	740
person or a member of the person's immediate family is a board	741
member of a contract agency of that county board unless there is	742
no conflict of interest. In no circumstance shall a member of a	743
county board vote on any matter before the board concerning a	744
contract agency of which the member or a member of the member's	745
immediate family is also a board member or an employee. All	746
questions relating to the existence of a conflict of interest	747
shall be submitted to the local prosecuting attorney and the Ohio	748
ethics commission for resolution.	749

(C) No employee of an agency contracting with a county board	750
of mental retardation and developmental disabilities or member of	751
the immediate family of such an employee shall serve as a board	752
member or an employee of the county board except that a county	753
board may, pursuant to a resolution adopted by the board, employ a	754
member of the immediate family of an employee of an agency	755
contracting with the board.	756

(D) No person shall serve as a member or employee of a	757
county board of mental retardation and developmental disabilities	758
if a member of the person's immediate family serves as a county	759
commissioner of the county served by the board unless the person	760
was a member or employee prior to October 31, 1980.	761

(E) A county board of mental retardation and developmental	762
disabilities shall not contract with an agency whose board	763
includes a county commissioner of the county served by the county	764
board or an employee of the same county board.	765

Sec. 5126.033.  (A) A county board of mental retardation and	766
developmental disabilities shall not enter into a direct services	767
contract unless the contract is limited either to the actual	768
amount of the expenses or to a reasonable and allowable amount	769
projected by the board.	770

(B) A county board shall not enter into a direct services	771
contract that would result in payment to a board member, former	772
board member, employee, former employee, or member of the	773
immediate family of a board member, former board member, employee,	774
or former employee if the person who would receive services under	775
the contract stands to receive any preferential treatment or any	776
unfair advantage over other eligible persons.	777

(C) A county board shall not enter into a direct services	778
contract for services provided in accordance with section 5126.11	779
or sections 5126.40 to 5126.46 of the Revised Code under which an	780
individual, agency, or other entity will employ a professional or	781
service employee, as defined in section 5126.20 of the Revised	782
Code, who is also an employee of that board unless all of the	783
following conditions are met:	784

(1) The employee is not in a capacity to influence the award	785
of the contract.	786

(2) The employee has not attempted in any manner to secure	787
the contract on behalf of the individual, agency, or other entity.	788

(3) The employee is in management level two or three	789
according to rules adopted by the director of mental retardation	790
and developmental disabilities.	791

(4) The employee doesis not hold any administrative or	792
supervisory position in the employ ofemployed by the board, did	793
not hold such a position during the period when the contract was	794
is developed,as an administrator or supervisor responsible for	795
approving or supervising services to be provided under the	796
contract and agrees not to take such a position while the contract	797
is in effect, regardless of whether the position is related to the	798
services provided under the contract.	799

(4)(5) The employee has not taken any actions that create	800
the need for the services to be provided under the contract.	801

(5)(6) The individual, agency, or other entity seeks the	802
services of the employee because of the employee's expertise and	803
familiarity with the care and condition of one or more eligible	804
persons and other individuals with such expertise and familiarity	805
are unavailable, or an eligible person has requested to have the	806
services provided by that employee.	807

The superintendent of the county board shall notify the	808
employee and the individual, agency, or other entity that seeks	809
the employee's services of the ethics council's determination	810
under section 5126.032 of the Revised Code regarding the contract.	811
The council's determination shall be binding on all parties.	812

The employee who is the subject of the contract shall inform	813
the superintendent of the county board of any employment the	814
employee has outside the county board that is with any individual,	815
agency, or other entity that has a contract with the county board.	816

Sec. 5126.035. (A) As used in this section:

817

(1) "Provider" means a person or government entity that	818
provides services to an individual with mental retardation or	819
other developmental disability pursuant to a service contract.	820

(2) "Service contract" means a contract between a county	821
board of mental retardation and developmental disabilities and a	822
provider under which the provider is to provide services to an	823
individual with mental retardation or other developmental	824
disability.	825

(B) Each service contract that a county board of mental	826
retardation and developmental disabilities enters into with a	827
provider shall do all of the following:	828

(1) Comply with rules adopted under division (E) of this	829
section;	830

(2) If the provider is to provide home and community-based	831
services, medicaid case management services, or habilitation	832
center services, comply with all applicable statewide medicaid	833
requirements;	834

(3) Include a general operating agreement component and an	835
individual service needs addendum.	836

(C) The general operating agreement component shall include	837
all of the following:	838

(1) The roles and responsibilities of the county board	839
regarding services for individuals with mental retardation or	840
other developmental disability who reside in the county the county	841
board serves;	842

(2) The roles and responsibilities of the provider as	843
specified in the individual service needs addendum;	844

(3) Procedures for the county board to monitor the	845
provider's services;	846

(4) Procedures for the county board to evaluate the quality	847
of care and cost effectiveness of the provider's services;	848

(5) Procedures for payment of eligible claims;

849

(6) If the provider is to provide home and community-based	850
services, medicaid case management services, or habilitation	851
center services, both of the following:	852

(a) Procedures for reimbursement that conform to the	853
statewide reimbursement process and the county board's plan	854
submitted under section 5126.054 of the Revised Code;	855

(b) Procedures that ensure that the county board pays the	856
nonfederal share of the medicaid expenditures that the county	857
board is required by division (A) of section 5126.0565126.057 of	858
the Revised Code to pay.	859

(7) Procedures for the county board to perform service	860
utilization reviews and the implementation of required corrective	861
actions;	862

(8) Procedures for the provider to submit claims for payment	863
for a service no later than three hundred thirty days after the	864
date the service is provided;	865

(9) Procedures for rejecting claims for payment that are	866
submitted after the time required by division (B)(9) of this	867
section;	868

(10) Procedures for developing, modifying, and executing	869
initial and subsequent service plans. The procedures shall	870
provide for the provider's participation.	871

(11) Procedures for affording individuals due process	872
protections;	873

(12) General staffing, training, and certification	874
requirements that are consistent with state requirements and	875
compensation arrangements that are necessary to attract, train,	876
and retain competent personnel to deliver the services pursuant to	877
the individual service needs addendum;	878

(13) Methods to be used to document services provided and	879
procedures for submitting reports the county board requires;	880

(14) Methods for authorizing and documenting within	881
seventy-two hours changes to the individual service needs	882
addendum. The methods shall allow for changes to be initially	883
authorized verbally and subsequently in writing.	884

(15) Procedures for modifying the individual service needs	885
addendum in accordance with changes to the recipient's	886
individualized service plan;	887

(16) Procedures for terminating the individual service needs	888
addendum within thirty days of a request made by the recipient;	889

(17) A requirement that all parties to the contract accept	890
the contract's terms and conditions;	891

(18) A designated contact person and the method of	892
contacting the designated person to respond to medical or	893
behavioral problems and allegations of major unusual incidents or	894
unusual incidents;	895

(19) Procedures for ensuring the health and welfare of the	896
recipient;	897

(20) Procedures for ensuring fiscal accountability and the	898
collection and reporting of programmatic data;	899

(21) Procedures for implementing the mediation and	900
arbitration process under section 5126.036 of the Revised Code;	901

(22) Procedures for amending or terminating the contract,	902
including as necessary to make the general operating agreement	903
component consistent with any changes made to the individual	904
service needs addendum;	905

(23) Anything else allowable under federal and state law	906
that the county board and provider agree to.	907

(D) The individual service needs addendum shall be	908
consistent with the general operating agreement component and	909
include all of the following:	910

(1) The name of the individual with mental retardation or	911
other developmental disability who is to receive the services from	912
the provider and any information about the recipient that the	913
provider needs to be able to provide the services;	914

(2) A clear and complete description of the services that	915
the recipient is to receive as determined using statewide	916
assessment tools;	917

(3) A copy of the recipient's assessment and individualized	918
service plan;	919

(4) A clear and complete description of the provider's	920
responsibilities to the recipient and county board in providing	921
appropriate services in a coordinated manner with other providers	922
and in a manner that contributes to and ensures the recipient's	923
health, safety, and welfare.	924

(E) The director of mental retardation and developmental	925
disabilities shall adopt rules in accordance with Chapter 119. of	926
the Revised Code governing service contracts. A service contract	927
does not negate the requirement that a provider of home and	928
community-based services, medicaid case management services, or	929
habilitation center services have a medicaid provider agreement	930
with the department of job and family services.	931

Sec. 5126.036. (A) As used in this section:

932

(1) "Aggrieved party" means any of the following:

933

(a) The party to a service contract that is aggrieved by an	934
action the other party has taken or not taken under the service	935
contract;	936

(b) A person or government entity aggrieved by the refusal	937
of a county board of mental retardation and developmental	938
disabilities to enter into a service contract with the person or	939
government entity;	940

(c) A person or government entity aggrieved by termination	941
by a county board of mental retardation and development	942
disabilities of a service contract between the person or	943
government entity and the county board.	944

(2) "Mediator/arbitrator" means either of the following:

945

(a) An attorney at law licensed to practice law in this	946
state who is mutually selected by the parties under division	947
(B)(4) of this section to conduct mediation and arbitration;	948

(b) A retired judge who is selected under division (B)(4) of	949
this section to conduct mediation and arbitration.	950

(3) "Other party" means any of the following:

951

(a) The party to a service contract that has taken or not	952
taken an action under the service contract that causes the	953
aggrieved party to be aggrieved;	954

(b) A county board of mental retardation and developmental	955
disabilities that refuses to enter into a service contract with a	956
person or government entity;	957

(c) A county board of mental retardation and developmental	958
disabilities that terminates a service contract.	959

(4) "Parties" mean either of the following:

960

(a) A county board of mental retardation and developmental	961
disabilities and a provider that have or had a service contract	962
with each other;	963

(b) A person or government entity that seeks a service	964
contract with a county board of mental retardation and	965
developmental disabilities and the county board that refuses to	966
enter into the service contract with the person or government	967
entity.	968

(5) "Provider" means a person or government entity that	969
provides services to an individual with mental retardation or	970
other developmental disability pursuant to a service contract.	971

(6) "Service contract" means a contract between a county	972
board of mental retardation and developmental disabilities and a	973
provider under which the provider is to provide services to an	974
individual with mental retardation or other developmental	975
disability.	976

(B) An aggrieved party that seeks to require the other party	977
to take or cease an action under a service contract that causes	978
the aggrieved party to be aggrieved, a person or government	979
entity aggrieved by the refusal of a county board of mental	980
retardation and developmental disabilities to enter into a service	981
contract with the person or government entity, or a person or	982
government entity aggrieved by a county board's termination of a	983
service contract between the person or government entity and the	984
county board and the other party shall follow the following	985
mediation and arbitration procedures:	986

(1) No later than thirty days after first notifying the	987
other party that the aggrieved party is aggrieved, the aggrieved	988
party shall file a written notice of mediation and arbitration	989
with the department of mental retardation and developmental	990
disabilities and provide a copy of the written notice to the other	991
party. The written notice shall include an explanation of why the	992
aggrieved party is aggrieved. The department of mental	993
retardation and developmental disabilities shall provide the	994
department of job and family services a copy of the notice.	995

(2) In the case of parties that have a current service	996
contract with each other and unless otherwise agreed to by both	997
parties, the parties shall continue to operate under the contract	998
in the manner they have been operating until the mediation and	999
arbitration process, including an appeal under division (B)(9) of	1000
this section, if any, is completed.	1001

(3) During the thirty days following the date the aggrieved	1002
party files the written notice of mediation and arbitration under	1003
division (B)(1) of this section, the parties may attempt to	1004
resolve the conflict informally. If the parties are able to	1005
resolve the conflict informally within this time, the aggrieved	1006
party shall rescind the written notice of mediation and	1007
arbitration filed under division (B)(1) of this section.	1008

(4) No later than thirty days after the date the aggrieved	1009
party files the written notice of mediation and arbitration under	1010
division (B)(1) of this section, the parties shall mutually select	1011
an attorney at law licensed to practice law in this state to	1012
conduct the mediation and arbitration and schedule the first	1013
meeting of the mediation unless the parties informally resolve the	1014
conflict under division (B)(3) of this section. If the parties	1015
fail to select an attorney to conduct the mediation and	1016
arbitration within the required time, the parties shall request	1017
that the chief justice of the supreme court of Ohio provide the	1018
parties a list of five retired judges who are willing to perform	1019
the mediation and arbitration duties. The chief justice shall	1020
create such a list and provide it to the parties. To select the	1021
retired judge to conduct the mediation and arbitration, the	1022
parties shall take turns, beginning with the aggrieved party,	1023
striking retired judges from the list. The retired judge	1024
remaining on the list after both parties have each stricken two	1025
retired judges from the list shall perform the mediation and	1026
arbitration duties, including scheduling the first meeting of	1027
mediation if the parties are unable to agree on a date for the	1028
first meeting.	1029

(5) A stenographic record or tape recording and transcript	1030
of each mediation and arbitration meeting shall be maintained as	1031
part of the mediation and arbitration's official records. The	1032
parties shall share the cost of the mediation and arbitration,	1033
including the cost of the mediator/arbitrator's services but	1034
excluding the cost of representation.	1035

(6) The first mediation meeting shall be held no later than	1036
sixty days after the date the aggrieved party files the written	1037
notice of mediation and arbitration under division (B)(1) of this	1038
section unless the parties informally resolve the conflict under	1039
division (B)(3) of this section or the parties mutually agree to	1040
hold the first meeting at a later time. The mediation shall be	1041
conducted in the manner the parties mutually agree. If the	1042
parties are unable to agree on how the mediation is to be	1043
conducted, the mediator/arbitrator selected under division (B)(4)	1044
of this section shall determine how it is to be conducted. The	1045
rules of evidence may be used. The mediator/arbitrator shall	1046
attempt to resolve the conflict through the mediation process. The	1047
mediator/arbitrator's resolution of the conflict may be applied	1048
retroactively.	1049

(7) If the conflict is not resolved through the mediation	1050
process, the mediator/arbitrator shall arbitrate the conflict.	1051
The parties shall present evidence to the mediator/arbitrator in	1052
the manner the mediator/arbitrator requires. The	1053
mediator/arbitrator shall render a written recommendation within	1054
thirty days of the conclusion of the last arbitration meeting	1055
based on the service contract, applicable law, and the	1056
preponderance of the evidence presented during the arbitration.	1057
The mediator/arbitrator's recommendation may be applied	1058
retroactively. If the parties agree, the mediator/arbitrator may	1059
continue to attempt to resolve the conflict through mediation	1060
while the mediator/arbitrator arbitrates the conflict.	1061

(8) No later than thirty days after the mediator/arbitrator	1062
renders a recommendation in an arbitration, the	1063
mediator/arbitrator shall provide the parties with a written	1064
recommendation and forward a copy of the written recommendation,	1065
transcripts from each arbitration meeting, and a copy of all	1066
evidence presented to the mediator/arbitrator during the	1067
arbitration to the departments of mental retardation and	1068
developmental disabilities and job and family services.	1069

(9) No later than thirty days after the department of mental	1070
retardation and developmental disabilities receives the	1071
mediator/arbitrator's recommendation and the materials required by	1072
division (B)(8) of this section, the department shall adopt,	1073
reject, or modify the mediator/arbitrator's recommendation	1074
consistent with the mediator/arbitrator's findings of fact and	1075
conclusions of law or remand any portion of the recommendation to	1076
the mediator/arbitrator for further findings on a specific factual	1077
or legal issue. The mediator/arbitrator shall complete the	1078
further findings and provide the parties and the department with a	1079
written response to the remand within sixty days of the date the	1080
mediator/arbitrator receives the remand. On receipt of the	1081
mediator/arbitrator's response to the remand, the department,	1082
within thirty days, unless the parties agree otherwise, shall	1083
adopt, reject, or modify the mediator/arbitrator's response. The	1084
department's actions regarding the mediator/arbitrator's	1085
recommendation and response are a final adjudication order subject	1086
to appeal to the court of common pleas of Franklin county under	1087
section 119.12 of the Revised Code, except that the court shall	1088
consider only whether the conclusions of law the department adopts	1089
are in accordance with the law.	1090

(10) If the department of job and family services, in	1091
consultation with the department of mental retardation and	1092
developmental disabilities, determines no later than thirty days	1093
following the date the department of mental retardation and	1094
developmental disabilities receives the mediator/arbitrator's	1095
recommendation and the materials required by division (B)(8) of	1096
this section, or, if the recommendation is remanded under division	1097
(B)(9) of this section, thirty days following the date the	1098
department receives the response to the remand, that any aspect of	1099
the conflict between the parties affects the medicaid program, the	1100
department of mental retardation and developmental disabilities	1101
shall take all actions under division (B)(9) of this section in	1102
consultation with the department of job and family services.	1103

(C) If the department of mental retardation and	1104
developmental disabilities is aware of a conflict between a county	1105
board of mental retardation and developmental disabilities and a	1106
person or government entity that provides or seeks to provide	1107
services to an individual with mental retardation or other	1108
developmental disability to which the mediation and arbitration	1109
procedures established by this section may be applied and that the	1110
aggrieved party has not filed a written notice of mediation and	1111
arbitration within the time required by division (B)(1) of this	1112
section, the department may require that the parties implement the	1113
mediation and arbitration procedures.	1114

(D) Each service contract shall provide for the parties to	1115
follow the mediation and arbitration procedures established by	1116
this section if a party takes or does not take an action under the	1117
service contract that causes the aggrieved party to be aggrieved	1118
or if the provider is aggrieved by the county board's termination	1119
of the service contract.	1120

Sec. 5126.042.  (A) As used in this section:

1121

(1) "Emergency" means any situation that creates for an	1122
individual with mental retardation or developmental disabilities a	1123
risk of substantial self-harm or substantial harm to others if	1124
action is not taken within thirty days. An "emergency" may	1125
include one or more of the following situations:	1126

(a) Loss of present residence for any reason, including	1127
legal action;	1128

(b) Loss of present caretaker for any reason, including	1129
serious illness of the caretaker, change in the caretaker's	1130
status, or inability of the caretaker to perform effectively for	1131
the individual;	1132

(c) Abuse, neglect, or exploitation of the individual;

1133

(d) Health and safety conditions that pose a serious risk to	1134
the individual or others of immediate harm or death;	1135

(e) Change in the emotional or physical condition of the	1136
individual that necessitates substantial accommodation that cannot	1137
be reasonably provided by the individual's existing caretaker.	1138

(2) "Medicaid" has the same meaning as in section 5111.01 of	1139
the Revised Code.	1140

(B) If a county board of mental retardation and	1141
developmental disabilities determines that available resources are	1142
not sufficient to meet the needs of all individuals who request	1143
programs and services and may be offered the programs and	1144
services, it shall establish waiting lists for services. The	1145
board may establish priorities for making placements on its	1146
waiting lists according to an individual's emergency status and	1147
shall establish priorities in accordance with division (D) of this	1148
section.	1149

The individuals who may be placed on a waiting list include	1150
individuals with a need for services on an emergency basis and	1151
individuals who have requested services for which resources are	1152
not available.	1153

Except for an individual who is to receive priority for	1154
services pursuant to division (D)(3) of this section, an	1155
individual who currently receives a service but would like to	1156
change to another service shall not be placed on a waiting list	1157
but shall be placed on a service substitution list. The board	1158
shall work with the individual, service providers, and all	1159
appropriate entities to facilitate the change in service as	1160
expeditiously as possible. The board may establish priorities for	1161
making placements on its service substitution lists according to	1162
an individual's emergency status.	1163

In addition to maintaining waiting lists and service	1164
substitution lists, a board shall maintain a long-term service	1165
planning registry for individuals who wish to record their	1166
intention to request in the future a service they are not	1167
currently receiving. The purpose of the registry is to enable the	1168
board to document requests and to plan appropriately. The board	1169
may not place an individual on the registry who meets the	1170
conditions for receipt of services on an emergency basis.	1171

(C) A county board shall establish a separate waiting list	1172
for each of the following categories of services, and may	1173
establish separate waiting lists within the waiting lists:	1174

(1) Early childhood services;

1175

(2) Educational programs for preschool and school age	1176
children;	1177

(3) Adult services;

1178

(4) serviceService and support administration;

1179

(5) Residential services and supported living;

1180

(6) Transportation services;

1181

(7) Other services determined necessary and appropriate for	1182
persons with mental retardation or a developmental disability	1183
according to their individual habilitation or service plans;	1184

(8) Family support services provided under section 5126.11	1185
of the Revised Code.	1186

(D) Except as provided in division (E)(G) of this section, a	1187
county board shall do, as priorities, all of the following in	1188
accordance with the assessment component, approved under section	1189
5123.046 of the Revised Code, of the county board's plan approved	1190
developed under section 5123.0465126.054 of the Revised Code as	1191
priorities:	1192

(1) For the purpose of obtaining additional federal medicaid	1193
funds for home and community-based services, medicaid case	1194
management services, and habilitation center services, do both of	1195
the following:	1196

(a) Give an individual who is eligible for home and	1197
community-based services and meets both of the following	1198
requirements priority over any other individual on a waiting list	1199
established under division (C) of this section for home and	1200
community-based services that include supported living,	1201
residential services, or family support services:	1202

(i) Is twenty-two years of age or older;

1203

(ii) Receives supported living or family support services.

1204

(b) Give an individual who is eligible for home and	1205
community-based services and meets both of the following	1206
requirements priority over any other individual on a waiting list	1207
established under division (C) of this section for home and	1208
community-based services that include adult services:	1209

(i) Resides in the individual's own home or the home of the	1210
individual's family and will continue to reside in that home after	1211
enrollment in home and community-based services;	1212

(ii) Receives adult services from the county board.

1213

(2) As federal medicaid funds become available pursuant to	1214
division (D)(1) of this section, give an individual who is	1215
eligible for home and community-based services and meets any of	1216
the following requirements priority for such services over any	1217
other individual on a waiting list established under division (C)	1218
of this section other than an individual given priority under	1219
division (D)(1) of this section:	1220

(a) Does not receive residential services or supported	1221
living, either needs services in the individual's current living	1222
arrangement or will need services in a new living arrangement, and	1223
has a primary caregiver who is sixty years of age or older;	1224

(b) Is less than twenty-two years of age, does not receive	1225
residential services or supported living, resides in the home of	1226
the individual's family, and has at least one of the following	1227
service needs that are unusual in scope or intensity:	1228

(i) Severe behavior problems for which a behavior support	1229
plan is needed;	1230

(ii) An emotional disorder for which anti-psychotic	1231
medication is needed;	1232

(iii) A medical condition that leaves the individual	1233
dependent on life-support medical technology;	1234

(iv) A condition affecting multiple body systems for which a	1235
combination of specialized medical, psychological, educational, or	1236
habilitation services are needed;	1237

(v) A condition the county board determines to be comparable	1238
in severity to any condition described in division (D)(1)	1239
(2)(b)(i) to (iv) of this section and places the individual at	1240
significant risk of institutionalization.	1241

(c) Is twenty-two years of age or older, does not receive	1242
residential services or supported living, and is determined by the	1243
county board to have intensive needs for residentialhome and	1244
community-based services on an in-home or out-of-home basis.	1245

(3) In fiscal years 2002 and 2003, give an individual who is	1246
eligible for home and community-based services, resides in an	1247
intermediate care facility for the mentally retarded or nursing	1248
facility, chooses to move to another setting with the help of home	1249
and community-based services, and has been determined by the	1250
department of mental retardation and developmental disabilities to	1251
be capable of residing in the other setting, priority over any	1252
other individual on a waiting list established under division (C)	1253
of this section for home and community-based services who does not	1254
meet these criteria. The department of mental retardation and	1255
developmental disabilities shall identify the individuals to	1256
receive priority under division (D)(3) of this section, assess the	1257
needs of the individuals, and notify the county boards that are to	1258
provide the individuals priority under division (D)(3) of this	1259
section of the individuals identified by the department and the	1260
individuals' assessed needs.	1261

(E)(1) If an individual with mental retardation or other	1262
developmental disability who has priority for home and	1263
community-based services under division (D)(2)(a) or (c) of this	1264
section chooses, instead, to seek admission to an intermediate	1265
care facility for the mentally retarded or nursing facility, is	1266
eligible to have medicaid pay for the services of such a facility,	1267
and is admitted to such a facility, a county board may provide,	1268
except as provided in division (G) of this section, another	1269
individual with mental retardation or other developmental	1270
disability priority over any other individual on a waiting list	1271
established under division (C) of this section for home and	1272
community-based services if the individual meets all of the	1273
following requirements:	1274

(a) Resides in an intermediate care facility for the	1275
mentally retarded or nursing facility at the time of application	1276
for the home and community-based services;	1277

(b) Has intensive needs and is eligible for home and	1278
community-based services;	1279

(c) Is not given priority for the services pursuant to	1280
division (D)(3) of this section.	1281

(2) An individual may receive priority for home and	1282
community-based services pursuant to division (E)(1) of this	1283
section regardless of whether the individual admitted to an	1284
intermediate care facility for the mentally retarded or nursing	1285
facility resides in the same or different county. If the	1286
individuals reside in different counties, the county boards	1287
serving the counties in which the individuals reside shall enter	1288
into a collaborative agreement with each other as necessary to	1289
implement this division. One or more other county boards may also	1290
enter into the collaborative agreement with the two county boards.	1291

(F) If two or more individuals on a waiting list established	1292
under division (C) of this section for home and community-based	1293
services have priority for the services pursuant to division	1294
(D)(1), (D)(2), or (E) of this section, a county board may use,	1295
until December 31, 2003, criteria specified in rules adopted under	1296
division (K)(2) of this section in determining the order in which	1297
the individuals with priority will be offered the services.	1298
Otherwise, the county board shall offer the home and	1299
community-based services to such individuals in the order they are	1300
placed on the waiting list.	1301

(G)(1) No individual may receive priority for services	1302
pursuant to division (D) or (E) of this section over an individual	1303
placed on a waiting list established under division (C) of this	1304
section on an emergency status.	1305

(2) No more than twofour hundred individuals in the state	1306
may receive priority for services during state fiscal yearsthe	1307
2002 and 2003 biennium pursuant to division (D)(2)(b) of this	1308
section.	1309

(3) No more than a total of seventy-five individuals in the	1310
state may receive priority for services during state fiscal years	1311
2002 and 2003 pursuant to division (D)(3) of this section.	1312

(F)(H) Prior to establishing any waiting list under this	1313
section, a county board shall develop and implement a policy for	1314
waiting lists that complies with this section and rules that the	1315
department of mental retardation and developmental disabilities	1316
shall adopt in accordance with Chapter 119. of the Revised Code.	1317
The department's rules shall include procedures to be followed to	1318
ensure that the due process rights of individuals placed on	1319
waiting lists are not violatedadopted under division (K) of this	1320
section.	1321

Prior to placing an individual on a waiting list, the county	1322
board shall assess the service needs of the individual in	1323
accordance with all applicable state and federal laws. The county	1324
board shall place the individual on the appropriate waiting list	1325
and may place the individual on more than one waiting list. The	1326
county board shall notify the individual of the individual's	1327
placement and position on each waiting list on which the	1328
individual is placed.	1329

At least annually, the county board shall reassess the	1330
service needs of each individual on a waiting list. If it	1331
determines that an individual no longer needs a program or	1332
service, the county board shall remove the individual from the	1333
waiting list. If it determines that an individual needs a program	1334
or service other than the one for which the individual is on the	1335
waiting list, the county board shall provide the program or	1336
service to the individual or place the individual on a waiting	1337
list for the program or service in accordance with the board's	1338
policy for waiting lists.	1339

When a program or service for which there is a waiting list	1340
becomes available, the county board shall reassess the service	1341
needs of the individual next scheduled on the waiting list to	1342
receive that program or service. If the reassessment demonstrates	1343
that the individual continues to need the program or service, the	1344
board shall offer the program or service to the individual. If it	1345
determines that an individual no longer needs a program or	1346
service, the county board shall remove the individual from the	1347
waiting list. If it determines that an individual needs a program	1348
or service other than the one for which the individual is on the	1349
waiting list, the county board shall provide the program or	1350
service to the individual or place the individual on a waiting	1351
list for the program or service in accordance with the board's	1352
policy for waiting lists. The county board shall notify the	1353
individual of the individual's placement and position on the	1354
waiting list on which the individual is placed.	1355

(G)(I) A child subject to a determination made pursuant to	1356
section 121.38 of the Revised Code who requires the home and	1357
community-based services provided through the medicaid component	1358
that the department of mental retardation and developmental	1359
disabilities administers under section 5111.871 of the Revised	1360
Code shall receive services through that medicaid component. For	1361
all other services, a child subject to a determination made	1362
pursuant to section 121.38 of the Revised Code shall be treated as	1363
an emergency by the county boards and shall not be subject to a	1364
waiting list.	1365

(H)(J) Not later than the fifteenth day of March of each	1366
even-numbered year, each county board shall prepare and submit to	1367
the director of mental retardation and developmental disabilities	1368
its recommendations for the funding of services for individuals	1369
with mental retardation and developmental disabilities and its	1370
proposals for reducing the waiting lists for services.	1371

(I)(K)(1) The department of mental retardation and	1372
developmental disabilities shall adopt rules in accordance with	1373
Chapter 119. of the Revised Code governing waiting lists	1374
established under this section. The rules shall include procedures	1375
to be followed to ensure that the due process rights of	1376
individuals placed on waiting lists are not violated.	1377

(2) As part of the rules adopted under this division, the	1378
department shall adopt, not later than December 31, 2001, rules	1379
establishing criteria a county board may use under division (F) of	1380
this section in determining the order in which individuals with	1381
priority for home and community-based services will be offered the	1382
services. The rules shall also specify conditions under which a	1383
county board, when there is no individual with priority for home	1384
and community-based services pursuant to division (D)(1), (D)(2),	1385
or (E) of this section available and appropriate for the services,	1386
may offer the services to an individual on a waiting list for the	1387
services but not given such priority for the services. The rules	1388
adopted under division (K)(2) of this section shall cease to have	1389
effect December 31, 2003.	1390

(L) The following shall take precedence over the applicable	1391
provisions of this section:	1392

(1) Medicaid rules and regulations;

1393

(2) Any specific requirements that may be contained within a	1394
medicaid state plan amendment or waiver program that a county	1395
board has authority to administer or with respect to which it has	1396
authority to provide services, programs, or supports.	1397

Sec. 5126.046. (A) Each county board of mental retardation	1398
and developmental disabilities that has medicaid local	1399
administrative authority under division (A) of section 5126.055 of	1400
the Revised Code for habilitation, vocational, or community	1401
employment services provided as part of home and community-based	1402
services shall create a list of all persons and government	1403
entities eligible to provide such habilitation, vocational, or	1404
community employment services. If the county board chooses and is	1405
eligible to provide such habilitation, vocational, or community	1406
employment services, the county board shall include itself on the	1407
list. The county board shall make the list available to each	1408
individual with mental retardation or other developmental	1409
disability who resides in the county and is eligible for such	1410
habilitation, vocational, or community employment services. The	1411
county board shall also make the list available to such	1412
individuals' families.	1413

An individual with mental retardation or other developmental	1414
disability who is eligible for habilitation, vocational, or	1415
community employment services may choose the provider of the	1416
services.	1417

If aA county board that has medicaid local administrative	1418
authority under division (A) of section 5126.055 of the Revised	1419
Code for habilitation, vocational, and community employment	1420
services provided as part of home and community-based services,	1421
the county board shall pay the nonfederal share of the	1422
habilitation, vocational, and community employment services when	1423
required by section 5126.0565126.057 of the Revised Code. The	1424
department of mental retardation and developmental disabilities	1425
shall pay the nonfederal share of such habilitation, vocational,	1426
and community employment services when required by section	1427
5123.047 of the Revised Code.	1428

(B) Each month, the department of mental retardation and	1429
developmental disabilities shall create a list of all persons and	1430
government entities eligible to provide residential services and	1431
supported living. The department shall include on the list all	1432
residential facilities licensed under section 5123.19 of the	1433
Revised Code and all supported living providers certified under	1434
section 5126.431 of the Revised Code. The department shall	1435
distribute the monthly lists to county boards that have local	1436
administrative authority under division (A) of section 5126.055 of	1437
the Revised Code for residential services and supported living	1438
provided as part of home and community-based services. A county	1439
board that receives a list shall make it available to each	1440
individual with mental retardation or other developmental	1441
disability who resides in the county and is eligible for such	1442
residential services or supported living. The county board shall	1443
also make the list available to the families of those individuals.	1444

An individual who is eligible for residential services or	1445
supported living may choose the provider of the residential	1446
services or supported living.	1447

If aA county board that has medicaid local administrative	1448
authority under division (A) of section 5126.055 of the Revised	1449
Code for residential services and supported living provided as	1450
part of home and community-based services, the county board shall	1451
pay the nonfederal share of the residential services and supported	1452
living when required by section 5126.0565126.057 of the Revised	1453
Code. The department shall pay the nonfederal share of the	1454
residential services and supported living when required by section	1455
5123.047 of the Revised Code.	1456

(C) If a county board that has medicaid local administrative	1457
authority under division (A) of section 5126.055 of the Revised	1458
Code for home and community-based services violates the right	1459
established by this section of an individual to choose a provider	1460
that is qualified and willing to provide services to the	1461
individual, the individual shall receive timely notice that the	1462
individual may request a hearing under section 5101.35 of the	1463
Revised Code.	1464

(D) The departments of mental retardation and developmental	1465
disabilities and job and family services shall adopt rules in	1466
accordance with Chapter 119. of the Revised Code governing the	1467
implementation of this section. The rules shall include	1468
procedures for individuals to choose their service providers. The	1469
rules shall not be limited by a provider selection system	1470
established under section 5126.42 of the Revised Code, including	1471
any pool of providers created pursuant to a provider selection	1472
system.	1473

Sec. 5126.05.  (A) Subject to the rules established by the	1474
director of mental retardation and developmental disabilities	1475
pursuant to Chapter 119. of the Revised Code for programs and	1476
services offered pursuant to this chapter, and subject to the	1477
rules established by the state board of education pursuant to	1478
Chapter 119. of the Revised Code for programs and services offered	1479
pursuant to Chapter 3323. of the Revised Code, the county board of	1480
mental retardation and developmental disabilities shall:	1481

(1) Administer and operate facilities, programs, and	1482
services as provided by this chapter and Chapter 3323. of the	1483
Revised Code and establish policies for their administration and	1484
operation;	1485

(2) Coordinate, monitor, and evaluate existing services and	1486
facilities available to individuals with mental retardation and	1487
developmental disabilities;	1488

(3) Provide early childhood services, supportive home	1489
services, and adult services, according to the plan and priorities	1490
developed under section 5126.04 of the Revised Code;	1491

(4) Provide or contract for special education services	1492
pursuant to Chapters 3317. and 3323. of the Revised Code and	1493
ensure that related services, as defined in section 3323.01 of the	1494
Revised Code, are available according to the plan and priorities	1495
developed under section 5126.04 of the Revised Code;	1496

(5) Adopt a budget, authorize expenditures for the purposes	1497
specified in this chapter and do so in accordance with section	1498
319.16 of the Revised Code, approve attendance of board members	1499
and employees at professional meetings and approve expenditures	1500
for attendance, and exercise such powers and duties as are	1501
prescribed by the director;	1502

(6) Submit annual reports of its work and expenditures,	1503
pursuant to sections 3323.09 and 5126.12 of the Revised Code, to	1504
the director, the superintendent of public instruction, and the	1505
board of county commissioners at the close of the fiscal year and	1506
at such other times as may reasonably be requested;	1507

(7) Authorize all positions of employment, establish	1508
compensation, including but not limited to salary schedules and	1509
fringe benefits for all board employees, approve contracts of	1510
employment for management employees that are for a term of more	1511
than one year, employ legal counsel under section 309.10 of the	1512
Revised Code, and contract for employee benefits;	1513

(8) Provide service and support administration in	1514
accordance with section 5126.0465126.15 of the Revised Code;	1515

(9) Certify respite care homes pursuant to rules adopted	1516
under section 5123.171 of the Revised Code by the director of	1517
mental retardation and developmental disabilities.	1518

(B) To the extent that rules adopted under this section	1519
apply to the identification and placement of handicapped children	1520
under Chapter 3323. of the Revised Code, they shall be consistent	1521
with the standards and procedures established under sections	1522
3323.03 to 3323.05 of the Revised Code.	1523

(C) Any county board may enter into contracts with other	1524
such boards and with public or private, nonprofit, or	1525
profit-making agencies or organizations of the same or another	1526
county, to provide the facilities, programs, and services	1527
authorized or required, upon such terms as may be agreeable, and	1528
in accordance with this chapter and Chapter 3323. of the Revised	1529
Code and rules adopted thereunder and in accordance with sections	1530
307.86 and 5126.071 of the Revised Code.	1531

(D) A county board may combine transportation for children	1532
and adults enrolled in programs and services offered under section	1533
5126.12 with transportation for children enrolled in classes	1534
funded under section 3317.20 or units approved under section	1535
3317.05 of the Revised Code.	1536

(E) A county board may purchase all necessary insurance	1537
policies, may purchase equipment and supplies through the	1538
department of administrative services or from other sources, and	1539
may enter into agreements with public agencies or nonprofit	1540
organizations for cooperative purchasing arrangements.	1541

(F) A county board may receive by gift, grant, devise, or	1542
bequest any moneys, lands, or property for the benefit of the	1543
purposes for which the board is established and hold, apply, and	1544
dispose of the moneys, lands, and property according to the terms	1545
of the gift, grant, devise, or bequest. All money received by	1546
gift, grant, bequest, or disposition of lands or property received	1547
by gift, grant, devise, or bequest shall be deposited in the	1548
county treasury to the credit of such board and shall be available	1549
for use by the board for purposes determined or stated by the	1550
donor or grantor, but may not be used for personal expenses of the	1551
board members. Any interest or earnings accruing from such gift,	1552
grant, devise, or bequest shall be treated in the same manner and	1553
subject to the same provisions as such gift, grant, devise, or	1554
bequest.	1555

(G) The board of county commissioners shall levy taxes and	1556
make appropriations sufficient to enable the county board of	1557
mental retardation and developmental disabilities to perform its	1558
functions and duties, and may utilize any available local, state,	1559
and federal funds for such purpose.	1560

Sec. 5126.054.  (A) Each county board of mental retardation	1561
and developmental disabilities shall, by resolution, develop a	1562
three-calendar year plan that includes all of the following four	1563
components:	1564

(1) An assessment component that includes all of the	1565
following:	1566

(a) The number of individuals with mental retardation or	1567
other developmental disability residing in the county who need the	1568
level of care provided by an intermediate care facility for the	1569
mentally retarded, may seek home and community-based services, are	1570
given priority for the services pursuant to division (D) of	1571
section 5126.042 of the Revised Code; the service needs of those	1572
individuals; and the projected annualized cost for services;	1573

(b) The source of funds available to the county board to pay	1574
the nonfederal share of medicaid expenditures that the county	1575
board is required by division (A) of section 5126.0565126.057 of	1576
the Revised Code to pay;	1577

(c) Any other applicable information or conditions that the	1578
department of mental retardation and developmental disabilities	1579
requires as a condition of approving the plancomponent under	1580
section 5123.046 of the Revised Code.	1581

(2) A component that provides for the recruitment, training,	1582
and retention of existing and new direct care staff necessary to	1583
implement services included in individualized service plans,	1584
including behavior management services and health management	1585
services such as delegated nursing and other habilitation center	1586
services, and protect the health and welfare of individuals	1587
receiving services included in the individual's individualized	1588
service plan by complying with safeguards for unusual and major	1589
unusual incidents, day-to-day program management, and other	1590
requirements the department shall identify. A county board shall	1591
develop this component in collaboration with providers of	1592
medicaid-funded services with which the county board contracts. A	1593
county board shall include all of the following in the component:	1594

(a) The source and amount of funds available for the	1595
component;	1596

(b) A plan and timeline for implementing the component with	1597
the medicaid providers under contract with the county board;	1598

(c) The mechanisms the county board shall use to ensure the	1599
financial and program accountability of the medicaid provider's	1600
implementation of the component.	1601

(3) A preliminary implementation component that specifies the	1602
number of individuals to be provided, during the first year that	1603
the plan is in effect, home and community-based services pursuant	1604
to the priority given to them under divisions (D)(1) and (2) of	1605
section 5126.042 of the Revised Code and the types of home and	1606
community-based services the individuals are to receive;	1607

(4) A component that provides for the implementation of	1608
habilitation center services, medicaid case management services,	1609
and home and community-based services for individuals who begin to	1610
receive the services on or after the date the plan is approved	1611
under section 5123.046 of the Revised Code. A county board shall	1612
include all of the following in the component:	1613

(a) If the department of mental retardation and	1614
developmental disabilities or department of job and family	1615
services requires, an agreement to pay the nonfederal share of	1616
medicaid expenditures that the county board is required by	1617
division (A) of section 5126.0565126.057 of the Revised Code to	1618
pay;	1619

(b) How the services are to be phased in over the period the	1620
plan covers, including how the county board will serve individuals	1621
on a waiting list established under division (C) of section	1622
5126.042 who are given priority status under division (D)(1) of	1623
that section;	1624

(c) Any agreement or commitment regarding the county board's	1625
funding of home and community-based services that the county board	1626
has with the department at the time the county board develops the	1627
component;	1628

(d) Assurances adequate to the department that the county	1629
board will comply with all of the following requirements:	1630

(i) To provide the types of home and community-based services	1631
specified in the preliminary implementation component required by	1632
division (A)(3) of this section to at least the number of	1633
individuals specified in that component;	1634

(ii) To use any additional funds the county board receives	1635
for the services to improve the county board's resource	1636
capabilities for supporting such services available in the county	1637
at the time the component is developed and to expand the services	1638
to accommodate the unmet need for those services in the county;	1639

(ii)(iii) To employ a business manager who is either a new	1640
employee who has earned at least a bachelor's degree in business	1641
administration or a current employee who has the equivalent	1642
experience of a bachelor's degree in business administration. If	1643
the county board will employ a new employee, the county board	1644
shall include in the component a timeline for employing the	1645
employee.	1646

(iii)(iv) To employ or contract with a medicaid services	1647
manager who is either a new employee who has earned at least a	1648
bachelor's degree or a current employee who has the equivalent	1649
experience of a bachelor's degree. If the county board will	1650
employ a new employee, the county board shall include in the	1651
component a timeline for employing the employee. Two or three	1652
county boards that have a combined total enrollment in county	1653
board services not exceeding one thousand individuals as	1654
determined pursuant to certifications made under division (B) of	1655
section 5126.12 of the Revised Code may satisfy this requirement	1656
by sharing the services of a medicaid services manager or using	1657
the services of a medicaid services manager employed by or under	1658
contract with a regional council that the county boards establish	1659
under section 5126.13 of the Revised Code.	1660

(e) An agreement to comply with the method, developed by	1661
rules adopted under section 5123.0413 of the Revised Code, of	1662
paying for extraordinary costs, including extraordinary costs for	1663
services to individuals with mental retardation or other	1664
developmental disability, and ensuring the availability of	1665
adequate funds in the event a county property tax levy for	1666
services for individuals with mental retardation or other	1667
developmental disability fails;	1668

(f) Programmatic and financial accountability measures and	1669
projected outcomes expected from the implementation of the plan;	1670

(g) Any other applicable information or conditions that the	1671
department requires as a condition of approving the plancomponent	1672
under section 5123.046 of the Revised Code.	1673

(B) For the purpose of obtaining the department's approval	1674
under section 5123.046 of the Revised Code of the plan the county	1675
board develops under division (A) of this section, a county board	1676
shall do bothall of the following:	1677

(1) Submit the components required by divisions (A)(1) and	1678
(2) of this section to the department not later than August 1,	1679
2001;	1680

(2) Submit the component required by division (A)(3) of this	1681
section to the department not later than January 31, 2002;	1682

(3) Submit the component required by division (A)(3)(4) of	1683
this section to the department not later than NovemberJuly 1,	1684
20012002.	1685

(C) A county board whose plan developed under division (A)	1686
of this section is approved by the department under section	1687
5123.046 of the Revised Code shall update and renew the plan in	1688
accordance with a schedule the department shall develop.	1689

Sec. 5126.055.  (A) Except as provided in division (G) of	1690
this section 5126.056 of the Revised Code, a county board of	1691
mental retardation and developmental disabilities with an approved	1692
plan under section 5123.046 of the Revised Code has medicaid local	1693
administrative authority to, and shall, do all of the following	1694
for an individual with mental retardation or other developmental	1695
disability who resides in the county that the county board serves	1696
and seeks or receives home and community-based services:	1697

(1) Perform assessments and evaluations of the individual.	1698
As part of the assessment and evaluation process, the county board	1699
shall do all of the following:	1700

(a) Make a recommendation to the department of mental	1701
retardation and developmental disabilities on whether the	1702
department should approve or deny the individual's application for	1703
the services, including on the basis of whether the individual	1704
needs the level of care an intermediate care facility for the	1705
mentally retarded provides;	1706

(b) If the individual's application is denied because of the	1707
county board's recommendation and the individual requests a	1708
hearing under section 5101.35 of the Revised Code, present, with	1709
the department of mental retardation and developmental	1710
disabilities or department of job and family services, whichever	1711
denies the application, the reasons for the recommendation and	1712
denial at the hearing;	1713

(c) If the individual's application is approved, recommend	1714
to the departments of mental retardation and developmental	1715
disabilities and job and family services the services that should	1716
be included in the individual's individualized service plan and,	1717
if either department approves, reduces, denies, or terminates a	1718
service included in the individual's individualized service plan	1719
under section 5111.871 of the Revised Code because of the county	1720
board's recommendation, present, with the department that made the	1721
approval, reduction, denial, or termination, the reasons for the	1722
recommendation and approval, reduction, denial, or termination at	1723
a hearing under section 5101.35 of the Revised Code.	1724

(2) If the individual has been identified by the department	1725
of mental retardation and developmental disabilities as an	1726
individual to receive priority for home and community-based	1727
services pursuant to division (D)(3) of section 5126.042 of the	1728
Revised Code, assist the department in expediting the transfer of	1729
the individual from an intermediate care facility for the mentally	1730
retarded or nursing facility to the home and community-based	1731
services;	1732

(3) In accordance with the rules adopted under section	1733
5126.046 of the Revised Code, perform the county board's duties	1734
under that section regarding assisting the individual's right to	1735
choose a qualified and willing provider of the services and, at a	1736
hearing under section 5101.35 of the Revised Code, present	1737
evidence of the process for appropriate assistance in choosing	1738
providers;	1739

(4) Unless the county board provides the services under	1740
division (A)(5) of this section, contract with the person or	1741
government entity the individual chooses in accordance with	1742
section 5126.046 of the Revised Code to provide the services if	1743
the person or government entity is qualified and agrees to provide	1744
the services. The contract shall contain all the provisions	1745
required by section 5126.0575126.035 of the Revised Code and	1746
require the provider to agree to furnish, in accordance with the	1747
provider's medicaid provider agreement and for the authorized	1748
reimbursement rate, the services the individual requires.	1749

(5) If the county board is certified under section 5123.045	1750
of the Revised Code to provide the services and agrees to provide	1751
the services to the individual and the individual chooses the	1752
county board to provide the services, furnish, in accordance with	1753
the county board's medicaid provider agreement and for the	1754
authorized reimbursement rate, the services the individual	1755
requires;	1756

(6) Monitor the services provided to the individual and	1757
ensure the individual's health, safety, and welfare. The	1758
monitoring shall include quality assurance activities. If the	1759
county board provides the services, the department of mental	1760
retardation and developmental disabilities shall also monitor the	1761
services.	1762

(7) Develop, with the individual and the provider of the	1763
individual's services, an effective individualized service plan	1764
that includes coordination of services, recommend that the	1765
departments of mental retardation and developmental disabilities	1766
and job and family services approve the plan, and implement the	1767
plan unless either department disapproves it;	1768

(8) Have an investigative agent conduct investigations under	1769
section 5126.313 of the Revised Code that concern the individual;	1770

(9) Have a service and support administrator perform the	1771
duties under division (B)(9) of section 5126.15 of the Revised	1772
Code that concern the individual.	1773

(B) Except as provided in division (G) of this section	1774
5126.056 of the Revised Code, a county board with an approved plan	1775
under section 5123.046 of the Revised Code has medicaid local	1776
administrative authority to, and shall, do all of the following	1777
for an individual with mental retardation or other developmental	1778
disability who resides in the county that the county board serves	1779
and seeks or receives medicaid case management services or	1780
habilitation center services, other than habilitation center	1781
services for which a school district is required by division (E)	1782
of section 5111.041 of the Revised Code to pay the nonfederal	1783
share:	1784

(1) Perform assessments and evaluations of the individual	1785
for the purpose of recommending to the departments of mental	1786
retardation and developmental disabilities and job and family	1787
services the services that should be included in the individual's	1788
individualized service plan;	1789

(2) If the department of mental retardation and	1790
developmental disabilities or department of job and family	1791
services approves, reduces, denies, or terminates a service	1792
included in the individual's individualized service plan under	1793
section 5111.041 or 5111.042 of the Revised Code because of the	1794
county board's recommendation under division (B)(1) of this	1795
section, present, with the department that made the approval,	1796
reduction, denial, or termination, the reasons for the	1797
recommendation and approval, reduction, denial, or termination at	1798
a hearing under section 5101.35 of the Revised Code and inform the	1799
individual that the individual may file a complaint with the	1800
county board under section 5126.06 of the Revised Code at the same	1801
time the individual pursues an appeal under section 5101.35 of the	1802
Revised Code;	1803

(3) In accordance with rules the departments of mental	1804
retardation and developmental disabilities and job and family	1805
services shall adopt in accordance with Chapter 119. of the	1806
Revised Code governing the process for individuals to choose	1807
providers of medicaid case management services and habilitation	1808
center services, assist the individual in choosing the provider of	1809
the services. The rules shall provide for both of the following:	1810

(a) The county board providing the individual up-to-date	1811
information about qualified providers that the department of	1812
mental retardation and developmental disabilities shall make	1813
available to the county board;	1814

(b) If the individual chooses a provider who is qualified	1815
and willing to provide the services but is denied that provider,	1816
the individual receiving timely notice that the individual may	1817
request a hearing under section 5101.35 of the Revised Code and,	1818
at the hearing, the county board presenting evidence of the	1819
process for appropriate assistance in choosing providers.	1820

(4) Unless the county board provides the services under	1821
division (B)(5) of this section, contract with the person or	1822
government entity that the individual chooses in accordance with	1823
the rules adopted under division (B)(3) of this section to provide	1824
the services if the person or government entity is qualified and	1825
agrees to provide the services. The contract shall contain all	1826
the provisions required by section 5126.0575126.035 of the	1827
Revised Code and require the provider to agree to furnish, in	1828
accordance with the provider's medicaid provider agreement and for	1829
the authorized reimbursement rate, the services the individual	1830
requires.	1831

(5) If the county board is certified under section 5123.041	1832
of the Revised Code to provide the services and agrees to provide	1833
the services to the individual and the individual chooses the	1834
county board to provide the services, furnish, in accordance with	1835
the county board's medicaid provider agreement and for the	1836
authorized reimbursement rate, the services the individual	1837
requires;	1838

(6) Monitor the services provided to the individual. The	1839
monitoring shall include quality assurance activities. If the	1840
county board provides the services, the department of mental	1841
retardation and developmental disabilities shall also monitor the	1842
services.	1843

(7) Develop with the individual and the provider of the	1844
individual's services, and with the approval of the departments of	1845
mental retardation and developmental disabilities and job and	1846
family services, implement an effective plan for coordinating the	1847
services in accordance with the individual's approved	1848
individualized service plan;	1849

(8) Have an investigative agent conduct investigations under	1850
section 5126.313 of the Revised Code that concern the individual;	1851

(9) Have a service and support administrator perform the	1852
duties under division (B)(9) of section 5126.15 of the Revised	1853
Code that concern the individual.	1854

(C) A county board shall perform its medicaid local	1855
administrative authority under this section in accordance with all	1856
of the following:	1857

(1) The county board's plan that the department of mental	1858
retardation and developmental disabilities approves under section	1859
5123.046 of the Revised Code;	1860

(2) All applicable federal and state laws;

1861

(3) All applicable policies of the departments of mental	1862
retardation and developmental disabilities and job and family	1863
services and the United States department of health and human	1864
services;	1865

(4) The department of job and family services' supervision	1866
under its authority under section 5111.01 of the Revised Code to	1867
act as the single state medicaid agency;	1868

(5) The department of mental retardation and developmental	1869
disabilities' oversight.	1870

(D) The departments of mental retardation and developmental	1871
disabilities and job and family services shall communicate with	1872
and provide training to county boards regarding medicaid local	1873
administrative authority granted by this section. The	1874
communication and training shall include issues regarding audit	1875
protocols and other standards established by the United States	1876
department of health and human services that the departments	1877
determine appropriate for communication and training. County	1878
boards shall participate in the training. The departments shall	1879
assess the county board's compliance against uniform standards	1880
that the departments shall establish.	1881

(E) A county board may not delegate its medicaid local	1882
administrative authority granted under this section but may	1883
contract with a person or government entity, including a council	1884
of governments, for assistance with its medicaid local	1885
administrative authority. A county board that enters into such a	1886
contract shall notify the director of mental retardation and	1887
developmental disabilities. The notice shall include the tasks	1888
and responsibilities that the contract gives to the person or	1889
government entity. The person or government entity shall comply	1890
in full with all requirements to which the county board is subject	1891
regarding the person or government entity's tasks and	1892
responsibilities under the contract. The county board remains	1893
ultimately responsible for the tasks and responsibilities.	1894

(F) A county board that has medicaid local administrative	1895
authority under this section shall, through the departments of	1896
mental retardation and developmental disabilities and job and	1897
family services, reply to, and cooperate in arranging compliance	1898
with, a program or fiscal audit or program violation exception	1899
that a state or federal audit or review discovers. The department	1900
of job and family services shall timely notify the department of	1901
mental retardation and developmental disabilities and the county	1902
board of any adverse findings. After receiving the notice, the	1903
county board, in conjunction with the department of mental	1904
retardation and developmental disabilities, shall cooperate fully	1905
with the department of job and family services and timely prepare	1906
and send to the department a written plan of correction or	1907
response to the adverse findings. The county board is liable for	1908
any adverse findings that result from an action it takes or fails	1909
to take in its implementation of medicaid local administrative	1910
authority.	1911

(G)(1) If the department of mental retardation and	1912
developmental disabilities or department of job and family	1913
services determines that a county board's implementation of its	1914
medicaid local administrative authority under this section is	1915
deficient, the department that makes the determination shall	1916
require that county board do the following:	1917

(a)(1) If the deficiency affects the health, safety, or	1918
welfare of an individual with mental retardation or other	1919
developmental disability, correct the deficiency within	1920
twenty-four hours;	1921

(b)(2) If the deficiency does not affect the health, safety,	1922
or welfare of an individual with mental retardation or other	1923
developmental disability, receive technical assistance from the	1924
department or submit a plan of correction to the department that	1925
is acceptable to the department within sixty days and correct the	1926
deficiency within the time required by the plan of correction.	1927

(2) If the county board fails to correct a deficiency within	1928
the time required by division (G)(1) of this section to the	1929
satisfaction of the department, or submit an acceptable plan of	1930
correction within the time required by division (G)(1)(b) of this	1931
section, the department shall issue an order terminating the	1932
county board's medicaid local administrative authority over all or	1933
part of home and community-based services, medicaid managed care	1934
services, habilitation center services, all or part of two of	1935
those services, or all or part of all three of those services. The	1936
department shall provide a copy of the order to the board of	1937
county commissioners, probate judge, county auditor, and president	1938
and superintendent of the county board. The department shall	1939
specify in the order the medicaid local administrative authority	1940
that the department is terminating, the reason for the	1941
termination, and the county board's option and responsibilities	1942
under this division.	1943

A county board whose medicaid local administrative authority	1944
is terminated may, no later than thirty days after the department	1945
issues the termination order, recommend to the department that	1946
another county board that has not had any of its medicaid local	1947
administrative authority terminated or another entity the	1948
department approves administer the services for which the county	1949
board's medicaid local administrative authority is terminated. The	1950
department may contract with the other county board or entity to	1951
administer the services. If the department enters into such a	1952
contract, the county board shall adopt a resolution giving the	1953
other county board or entity full medicaid local administrative	1954
authority over the services that the other county board or entity	1955
is to administer. The other county board or entity shall be known	1956
as the contracting authority.	1957

If the county board does not submit a recommendation to the	1958
department regarding a contracting authority within the required	1959
time or the department rejects the county board's recommendation,	1960
the department shall appoint an administrative receiver to	1961
administer the services for which the county board's medicaid	1962
local administrative authority is terminated. To the extent	1963
necessary for the department to appoint an administrative	1964
authority, the department may utilize employees of the department,	1965
management personnel from another county board, or other	1966
individuals who are not employed by or affiliated with in any	1967
manner a person or government entity that provides home and	1968
community-based services, medicaid case management services, or	1969
habilitation center services pursuant to a contract with any	1970
county board. The administrative receiver shall assume full	1971
administrative responsibility for the county board's services for	1972
which the county board's medicaid local administrative authority	1973
is terminated.	1974

The contracting authority or administrative receiver shall	1975
develop and submit to the department a plan of correction to	1976
remediate the problems that caused the department to issue the	1977
termination order. If, after reviewing the plan, the department	1978
approves it, the contracting authority or administrative receiver	1979
shall implement the plan.	1980

The county board shall transfer control of state and federal	1981
funds it is otherwise eligible to receive for the services for	1982
which the county board's medicaid local administrative authority	1983
is terminated and funds the county board may use under division	1984
(B) of section 5126.056 of the Revised Code to pay the nonfederal	1985
share of the services that the county board is required by	1986
division (A) of that section to pay. The county board shall	1987
transfer control of the funds to the contracting authority or	1988
administrative receiver administering the services. The amount	1989
the county board shall transfer shall be the amount necessary for	1990
the contracting authority or administrative receiver to fulfill	1991
its duties in administering the services, including its duties to	1992
pay its personnel for time worked, travel, and related matters. If	1993
the county board fails to make the transfer, the department may	1994
withhold the state and federal funds from the county board and	1995
bring a mandamus action against the county board in the court of	1996
common pleas of the county served by the county board or in the	1997
Franklin county court of common pleas. The mandamus action may not	1998
require that the county board transfer any funds other than the	1999
funds the county board is required by division (G)(2) of this	2000
section to transfer.	2001

The contracting authority or administrative receiver has the	2002
right to authorize the payment of bills in the same manner that	2003
the county board may authorize payment of bills under this chapter	2004
and section 319.16 of the Revised Code.	2005

Sec. 5126.056. (A) The department of mental retardation and	2006
developmental disabilities shall take action under division (B) of	2007
this section against a county board of mental retardation and	2008
developmental disabilities if any of the following are the case:	2009

(1) The county board fails to submit to the department all	2010
the components of its three-year plan required by section 5126.054	2011
of the Revised Code within the time required by division (B) of	2012
that section.	2013

(2) The department disapproves the county board's	2014
three-year plan under section 5123.046 of the Revised Code.	2015

(3) The county board fails, as required by division (C) of	2016
section 5126.054 of the Revised Code, to update and renew its	2017
three-year plan in accordance with a schedule the department	2018
develops under that section.	2019

(4) The county board fails to implement its initial or	2020
renewed three-year plan approved by the department.	2021

(5) The county board fails to correct a deficiency within	2022
the time required by division (G) of section 5126.055 of the	2023
Revised Code to the satisfaction of the department.	2024

(6) The county board fails to submit an acceptable plan of	2025
correction to the department within the time required by division	2026
(G)(2) of section 5126.055 of the Revised Code.	2027

(B) If required by division (A) of this section to take	2028
action against a county board, the department shall issue an order	2029
terminating the county board's medicaid local administrative	2030
authority over all or part of home and community-based services,	2031
medicaid case management services, habilitation center services,	2032
all or part of two of those services, or all or part of all three	2033
of those services. The department shall provide a copy of the	2034
order to the board of county commissioners, probate judge, county	2035
auditor, and president and superintendent of the county board. The	2036
department shall specify in the order the medicaid local	2037
administrative authority that the department is terminating, the	2038
reason for the termination, and the county board's option and	2039
responsibilities under this division.	2040

A county board whose medicaid local administrative authority	2041
is terminated may, not later than thirty days after the department	2042
issues the termination order, recommend to the department that	2043
another county board that has not had any of its medicaid local	2044
administrative authority terminated or another entity the	2045
department approves administer the services for which the county	2046
board's medicaid local administrative authority is terminated. The	2047
department may contract with the other county board or entity to	2048
administer the services. If the department enters into such a	2049
contract, the county board shall adopt a resolution giving the	2050
other county board or entity full medicaid local administrative	2051
authority over the services that the other county board or entity	2052
is to administer. The other county board or entity shall be known	2053
as the contracting authority.	2054

If the department rejects the county board's recommendation	2055
regarding a contracting authority, the county board may appeal the	2056
rejection under section 5123.043 of the Revised Code.	2057

If the county board does not submit a recommendation to the	2058
department regarding a contracting authority within the required	2059
time or the department rejects the county board's recommendation	2060
and the rejection is upheld pursuant to an appeal, if any, under	2061
section 5123.043 of the Revised Code, the department shall appoint	2062
an administrative receiver to administer the services for which	2063
the county board's medicaid local administrative authority is	2064
terminated. To the extent necessary for the department to appoint	2065
an administrative receiver, the department may utilize employees	2066
of the department, management personnel from another county board,	2067
or other individuals who are not employed by or affiliated with in	2068
any manner a person that provides home and community-based	2069
services, medicaid case management services, or habilitation	2070
center services pursuant to a contract with any county board. The	2071
administrative receiver shall assume full administrative	2072
responsibility for the county board's services for which the	2073
county board's medicaid local administrative authority is	2074
terminated.	2075

The contracting authority or administrative receiver shall	2076
develop and submit to the department a plan of correction to	2077
remediate the problems that caused the department to issue the	2078
termination order. If, after reviewing the plan, the department	2079
approves it, the contracting authority or administrative receiver	2080
shall implement the plan.	2081

The county board shall transfer control of state and federal	2082
funds it is otherwise eligible to receive for the services for	2083
which the county board's medicaid local administrative authority	2084
is terminated and funds the county board may use under division	2085
(B) of section 5126.057 of the Revised Code to pay the nonfederal	2086
share of the services that the county board is required by	2087
division (A) of that section to pay. The county board shall	2088
transfer control of the funds to the contracting authority or	2089
administrative receiver administering the services. The amount	2090
the county board shall transfer shall be the amount necessary for	2091
the contracting authority or administrative receiver to fulfill	2092
its duties in administering the services, including its duties to	2093
pay its personnel for time worked, travel, and related matters. If	2094
the county board fails to make the transfer, the department may	2095
withhold the state and federal funds from the county board and	2096
bring a mandamus action against the county board in the court of	2097
common pleas of the county served by the county board or in the	2098
Franklin county court of common pleas. The mandamus action may	2099
not require that the county board transfer any funds other than	2100
the funds the county board is required by division (B) of this	2101
section to transfer.	2102

The contracting authority or administrative receiver has the	2103
right to authorize the payment of bills in the same manner that	2104
the county board may authorize payment of bills under this chapter	2105
and section 319.16 of the Revised Code.	2106

Sec. 5126.056.        Sec. 5126.057. (A) A county board of mental	2107
retardation and developmental disabilities that has medicaid local	2108
administrative authority under division (A) of section 5126.055 of	2109
the Revised Code for home and community-based services shall pay	2110
the nonfederal share of medicaid expenditures for such services	2111
provided to an individual with mental retardation or other	2112
developmental disability who the county board determines under	2113
section 5126.041 of the Revised Code is eligible for county board	2114
services unless division (C)(2) of section 5123.047 of the Revised	2115
Code requires the department of mental retardation and	2116
developmental disabilities to pay the nonfederal share.	2117

A county board that has medicaid local administrative	2118
authority under division (B) of section 5126.055 of the Revised	2119
Code for medicaid case management services shall pay the	2120
nonfederal share of medicaid expenditures for such services	2121
provided to an individual with mental retardation or other	2122
developmental disability who the county board determines under	2123
section 5126.041 of the Revised Code is eligible for county board	2124
services unless division (B)(2) of section 5123.047 of the Revised	2125
Code requires the department of mental retardation and	2126
developmental disabilities to pay the nonfederal share.	2127

A county board shall pay the nonfederal share of medicaid	2128
expenditures for habilitation center services when required to do	2129
so by division (D) of section 5111.041 of the Revised Code.	2130

(B) A county board may use the following funds to pay the	2131
nonfederal share of the services that the county board is required	2132
by division (A) of this section to pay:	2133

(1) To the extent consistent with the levy that generated	2134
the taxes, the following taxes:	2135

(a) Taxes levied pursuant to division (L) of section 5705.19	2136
of the Revised Code and section 5705.222 of the Revised Code;	2137

(b) Taxes levied under section 5705.191 of the Revised Code	2138
that the board of county commissioners allocates to the county	2139
board to pay the nonfederal share of the services.	2140

(2) Funds that the department of mental retardation and	2141
developmental disabilities distributes to the county board under	2142
sections 5126.11, 5126.12, 5126.15, 5126.18, and 5126.44 of the	2143
Revised Code;	2144

(3) Funds that the department allocates to the county board	2145
for habilitation center services provided under section 5111.041	2146
of the Revised Code;	2147

(4) Earned federal revenue funds the county board receives	2148
for medicaid services the county board provides pursuant to the	2149
county board's valid medicaid provider agreement.	2150

(C) If by December 31, 2001, the United States secretary of	2151
health and human services approves at least five hundred more	2152
slots for home and community-based services for calendar year 2002	2153
than were available for calendar year 2001, each county board	2154
shall provide, by the last day of calendar year 2001, assurances	2155
to the department of mental retardation and developmental	2156
disabilities that the county board will have for calendar year	2157
2002 at least one-third of the value of one-half, effective mill	2158
levied in the county the preceding year available to pay the	2159
nonfederal share of the services that the county board is required	2160
by division (A) of this section to pay.	2161

If by December 31, 2002, the United States secretary approves	2162
at least five hundred more slots for home and community-based	2163
services for calendar year 2003 than were available for calendar	2164
year 2002, each county board shall provide, by the last day of	2165
calendar year 2002, assurances to the department that the county	2166
board will have for calendar year 2003 at least two-thirds of the	2167
value of one-half, effective mill levied in the county the	2168
preceding year available to pay the nonfederal share of the	2169
services that the county board is required by division (A) of this	2170
section to pay.	2171

If by December 31, 2003, the United States secretary approves	2172
at least five hundred more slots for home and community-based	2173
services for calendar year 2004 than were available for calendar	2174
year 2003, each county board shall provide, by the last day of	2175
calendar year 2003 and each calendar year thereafter, assurances	2176
to the department that the county board will have for calendar	2177
year 2004 and each calendar year thereafter at least the value of	2178
one-half, effective mill levied in the county the preceding year	2179
available to pay the nonfederal share of the services that the	2180
county board is required by division (A) of this section to pay.	2181

(D) Each year, each county board shall adopt a resolution	2182
specifying the amount of funds it will use in the next year to pay	2183
the nonfederal share of the services that the county board is	2184
required by division (A) of this section to pay. The amount	2185
specified shall be adequate to assure that the services will be	2186
available in the county in a manner that conforms to all	2187
applicable state and federal laws. A county board shall state in	2188
its resolution that the payment of the nonfederal share represents	2189
an ongoing financial commitment of the county board. A county	2190
board shall adopt the resolution in time for the county auditor to	2191
make the determination required by division (E) of this section.	2192

(E) Each year, a county auditor shall determine whether the	2193
amount of funds a county board specifies in the resolution it	2194
adopts under division (D) of this section will be available in the	2195
following year for the county board to pay the nonfederal share of	2196
the services that the county board is required by division (A) of	2197
this section to pay. The county auditor shall make the	2198
determination not later than the last day of the year before the	2199
year in which the funds are to be used.	2200

Sec. 5126.06.  (A) Except as provided in division (B) of	2201
this section and section 5126.0355126.036 of the Revised Code,	2202
any person who has a complaint involving any of the programs,	2203
services, policies, or administrative practices of a county board	2204
of mental retardation and developmental disabilities or any of the	2205
entities under contract with the county board, may file a	2206
complaint with the board. Prior to commencing a civil action	2207
regarding the complaint, a person shall attempt to have the	2208
complaint resolved through the administrative resolution process	2209
established in the rules adopted under section 5123.043 of the	2210
Revised Code. After exhausting the administrative resolution	2211
process, the person may commence a civil action if the complaint	2212
is not settled to the person's satisfaction.	2213

(B) An employee of a county board may not file under this	2214
section a complaint related to the terms and conditions of	2215
employment of the employee.	2216

Sec. 5126.14. The entity responsible for the habilitation	2217
management included in adult day habilitation services, the	2218
program management included in, residential services, and the	2219
program management included in supported living shall provide	2220
administrative oversight by doing all of the following:	2221

(A) Having available supervisory personnel to monitor and	2222
ensure implementation of all interventions in accordance with	2223
every individual service plan implemented by the staff who work	2224
with the individuals receiving the services;	2225

(B) Providing appropriate training and technical assistance	2226
for all staff who work with the individuals receiving services;	2227

(C) Communicating with service and support administration	2228
staff for the purpose of coordinating activities to ensure that	2229
services are provided to individuals in accordance with individual	2230
service plans and intended outcomes;	2231

(D) Monitoring for unusual and major unusual incidents and	2232
cases of abuse, neglect, or exploitation, or misappropriation of	2233
funds involving the individual under the care of staff who are	2234
providing the services; taking immediate actions as necessary to	2235
maintain the health, safety, and welfare of the individuals	2236
receiving the services; and providing notice of unusual and major	2237
unusual incidents and suspected cases of abuse, neglect, or	2238
exploitation, or misappropriation of funds to the investigative	2239
agent for the county board of mental retardation and developmental	2240
disabilities;	2241

(E) Performing other administrative duties as required by	2242
state or federal law or by the county board of mental retardation	2243
and developmental disabilities through contracts with providers.	2244

Sec. 5126.15.  (A) A county board of mental retardation and	2245
developmental disabilities shall provide service and support	2246
administration to each individual three years of age or older who	2247
is eligible for other services of the boardservice and support	2248
administration if the individual requests, or a person on the	2249
individual's behalf requests, service and support administration.	2250
A board shall provide service and support administration to each	2251
individual receiving home and community-based services. A board	2252
may provide, in accordance with the service coordination	2253
requirements of 34 C.F.R. 303.23, service and support	2254
administration to an individual under three years of age eligible	2255
for early intervention services under 34 C.F.R. part 303. A board	2256
may provide service and support administration to an individual	2257
who is not eligible for other services of the board. Service and	2258
support administration shall be provided in accordance with rules	2259
adopted under section 5126.08 of the Revised Code.	2260

A board may provide service and support administration by	2261
directly employing service and support administrators or by	2262
contracting with entities for the performance of service and	2263
support administration. Individuals employed or under contract as	2264
service and support administrators shall not be in the same	2265
collective bargaining unit as employees who perform duties that	2266
are not administrative.	2267

Individuals employed by a board as service and support	2268
administrators shall not be assigned responsibilities for	2269
implementing other services for individuals and shall not be	2270
employed by or serve in a decision-making or policy-making	2271
capacity for any other entity that provides programs or services	2272
to individuals with mental retardation or developmental	2273
disabilities. An individual employed as a conditional status	2274
service and support administrator shall perform the duties of	2275
service and support administration only under the supervision of a	2276
management employee who is a service and support administration	2277
supervisor or a professional employee who is a service and support	2278
administrator.	2279

(B) The individuals employed by or under contract with a	2280
board to provide service and support administration shall do all	2281
of the following:	2282

(1) Establish an individual's eligibility for the services	2283
of the county board of mental retardation and developmental	2284
disabilities;	2285

(2) Assess individual needs for services;

2286

(3) Develop individual service plans with the active	2287
participation of the individual to be served, other persons	2288
selected by the individual, and, when applicable, the provider	2289
selected by the individual, and recommend the plans for approval	2290
by the department of mental retardation and developmental	2291
disabilities when services included in the plans are funded	2292
through medicaid;	2293

(4) Establish budgets for services based on the individual's	2294
assessed needs and preferred ways of meeting those needs;	2295

(5) Assist individuals in making selections from among the	2296
providers they have chosen;	2297

(6) Ensure that services are effectively coordinated and	2298
provided by appropriate providers;	2299

(7) Establish and implement an ongoing system of monitoring	2300
the implementation of individual service plans to achieve	2301
consistent implementation and the desired outcomes for the	2302
individual;	2303

(8) Perform quality assurance reviews as a distinct function	2304
of service and support administration;	2305

(9) Incorporate the results of quality assurance reviews and	2306
identified trends and patterns of unusual incidents and major	2307
unusual incidents into amendments of an individual's service plan	2308
for the purpose of improving and enhancing the quality and	2309
appropriateness of services rendered to the individual;	2310

(10) Ensure that each individual receiving services has a	2311
designated person who is responsible on a continuing basis for	2312
providing the individual with representation, advocacy, advice,	2313
and assistance related to the day-to-day coordination of services	2314
in accordance with the individual's service plan. The service and	2315
support administrator shall give the individual receiving services	2316
an opportunity to designate the person to provide daily	2317
representation. If the individual declines to make a designation,	2318
the administrator shall make the designation. In either case, the	2319
individual receiving services may change at any time the person	2320
designated to provide daily representation.	2321

(C) Subject to available funds, the department of mental	2322
retardation and developmental disabilities shall pay a county	2323
board an annual subsidy for service and support administration.	2324
The amount of the subsidy shall be equal to the greater of twenty	2325
thousand dollars or two hundred dollars times the board's	2326
certified average daily membership. The payments shall be made in	2327
semiannual installments, which shall be made no later than the	2328
thirty-first day of August and the thirty-first day of January.	2329
Funds received shall be used solely for service and support	2330
administration.	2331

Sec. 5126.17.  (A)(1) Annually, onOn the request of the	2332
director of mental retardation and developmental disabilities, the	2333
tax commissioner shall provide to the department of mental	2334
retardation and developmental disabilities information specifying	2335
each county's taxable value.	2336

(2) On request of the director, each county auditor shall	2337
submit a certified report to the department specifying the	2338
county's taxes and the aggregate rate of tax authorized to be	2339
levied by the board of county commissioners pursuant to division	2340
(L) of section 5705.19 and section 5705.222 of the Revised Code or	2341
the aggregate rate of tax authorized pursuant to that division and	2342
that section and certified to the county auditor under section	2343
319.30 of the Revised Code. Tax information submitted by the	2344
county auditor shall be obtained from the most recent tax year for	2345
which the information is available.	2346

(3) The director may request any other tax information	2347
necessary for purposes of sections 5126.16 to 5126.18 of the	2348
Revised Code.	2349

(B) Using the information obtained under this section and	2350
each board's enrollment, the department shall annually determine	2351
the hypothetical statewide average revenue per enrollee and, for	2352
each county board, the hypothetical local revenue per enrollee.	2353
This division applies only in those years in which the director	2354
determines that the department will implement section 5126.18 of	2355
the Revised Code.	2356

Sec. 5126.18.  (A) The department of mental retardation and	2357
developmental disabilities shall pay to each county board of	2358
mental retardation and developmental disabilities whose	2359
hypothetical local revenue per enrollee is less than the	2360
hypothetical statewide average revenue per enrollee the amount	2361
computed under division (B) of this section. Payments shall be	2362
made on or before the thirtieth day of September.	2363

(B) Except as provided in division (C) of this section, the	2364
amount to be paid to a county board shall be equal to the	2365
following:	2366

(1) If the county board's effective tax rate is equal to or	2367
greater than one mill, the product obtained by multiplying the	2368
following two quantities:	2369

(a) The amount by which the hypothetical statewide average	2370
revenue per enrollee exceeds the county board's hypothetical local	2371
revenue per enrollee;	2372

(b) The county board's infant and adult enrollment.

2373

(2) If the county board's effective tax rate is less than	2374
one mill, the product obtained by multiplying the following three	2375
quantities:	2376

(a) The amount by which the hypothetical statewide average	2377
revenue per enrollee exceeds the county board's hypothetical local	2378
revenue per enrollee;	2379

(b) The county board's infant and adult enrollment;

2380

(c) The quotient obtained by dividing the county board's	2381
effective tax rate by one mill.	2382

(C)(1) For each individual who is enrolled in active	2383
treatment under the community alternative funding system as	2384
defined in section 5126.12 of the Revised Code, the department may	2385
reduce the portion of the payment made under this section for that	2386
individual by fifty per cent or less.	2387

(2) If, in any year, an appropriation by the general	2388
assembly to the department for purposes of this section is less	2389
than the total amount required to make, in full, the payments as	2390
determined under and authorized by this section, the department	2391
shall pay each county board the same percentage of the board's	2392
payment as determined under this section without regard to this	2393
division that the amount of the appropriation available for	2394
purposes of this section is of the total amount of payments as	2395
determined under this section without regard to this division.	2396

(3) Payments made to a county board pursuant to this section	2397
shall not exceed thirty per cent of the payments made to that	2398
board pursuant to section 5126.12 of the Revised Code.	2399

(D) Payments made under this section are supplemental to all	2400
other state or federal funds for which county boards are eligible	2401
and shall be made from funds appropriated for purposes of this	2402
section. A county board shall use the payments solely to pay	2403
the nonfederal share of medicaid expenditures that division (A) of	2404
section 5126.0565126.057 of the Revised Code requires the county	2405
board to pay.	2406

(E) Each county board that receives a payment under this	2407
section shall, for each year it receives a payment, certify to the	2408
department that it will make a good faith effort to obtain	2409
revenues, including federal funds, for services to individuals	2410
included in its infant and adult enrollment.	2411

Sec. 5126.19.  (A) The director of mental retardation and	2412
developmental disabilities may grant temporary funding from the	2413
community mental retardation and developmental disabilities trust	2414
fund based on allocations to a county boardboards of mental	2415
retardation and developmental disabilities. With the consent of	2416
the county board, theThe director may distribute all or part of	2417
the funding directly to a county board, the persons who provide	2418
the services for which the funding is granted, or persons with	2419
mental retardation or developmental disabilities who are to	2420
receive those services.	2421

(B) Funding granted under this section shall be granted	2422
according to the availability of moneys in the fund and priorities	2423
established by the director. Funding may be granted for any of	2424
the following purposes:	2425

(1) Behavioral or short-term interventions for persons with	2426
mental retardation or developmental disabilities that assist them	2427
in remaining in the community by preventing institutionalization;	2428

(2) Emergency respite care services, as defined in section	2429
5126.11 of the Revised Code;	2430

(3) Family support services provided under section 5126.11	2431
of the Revised Code;	2432

(4) Supported living, as defined in section 5126.01 of the	2433
Revised Code;	2434

(5) Staff training for county board employees, employees of	2435
providers of residential services as defined in section 5126.01 of	2436
the Revised Code, and other personnel under contract with a county	2437
board, to provide the staff with necessary training in serving	2438
mentally retarded or developmentally disabled persons in the	2439
community;	2440

(6) Short-term provision of early childhood services	2441
provided under section 5126.05, adult services provided under	2442
sections 5126.05 and 5126.051, and service and support	2443
administration provided under section 5126.15 of the Revised Code,	2444
when local moneys are insufficient to meet the need for such	2445
services due to the successive failure within a two-year period of	2446
three or more proposed levies for the services;	2447

(7) Contracts with providers of residential services to	2448
maintain persons with mental retardation and developmental	2449
disabilities in their programs and avoid institutionalization.	2450

(C) If the trust fund contains more than ten million dollars	2451
on the first day of July the director shall use one million	2452
dollars for payments under section 5126.12 of the Revised Code,	2453
one million dollars for payments under section 5126.18 of the	2454
Revised Code, and two million dollars for payments under section	2455
5126.44 of the Revised Code. Distributions of funds under this	2456
division shall be made prior to August 31 of the state fiscal year	2457
in which the funds are available. The funds shall be distributed	2458
allocated to a county board in an amount equal to the same	2459
percentage of the total amount distributed for the services that	2460
allocated to the county board received in the immediately	2461
preceding state fiscal year.	2462

Sec. 5126.221.  Each county board of mental retardation and	2463
developmental disabilities shall employ at least one investigative	2464
agent or contract with a person or government entity, including	2465
another county board of mental retardation and developmental	2466
disabilities or a regional council established under section	2467
5126.13 of the Revised Code, for the services of an investigative	2468
agent. Neither a county board nor a person or government entity	2469
with which a county board contracts for the services of an	2470
investigative agent shall assign any duties to an investigative	2471
agent other than conducting investigations under section 5126.313	2472
of the Revised Code.	2473

All investigative agents shall be trained in civil and	2474
criminal investigatory practices and. The person responsible for	2475
supervising the work of the investigative agents shall report	2476
directly to a county board's superintendent regarding the	2477
investigative agents. No	2478

No investigative agent shall do anything that interferes with	2479
the investigative agent's objectivity in conducting investigations	2480
under section 5126.313 of the Revised Code.	2481

Sec. 5126.357.  (A) As used in this section:

2482

(1) "In-home care" means the supportive services provided	2483
within the home of an individual who receives funding for the	2484
services as a county board client, including any client who	2485
receives residential services funded through home orand	2486
community-based services, family support services provided under	2487
section 5126.11 of the Revised Code, or supported living provided	2488
in accordance with sections 5126.41 to 5126.47 of the Revised	2489
Code. "In-home care" includes care that is provided outside a	2490
client's home in places incidental to the home, and while	2491
traveling to places incidental to the home, except that "in-home	2492
care" does not include care provided in the facilities of a county	2493
board of mental retardation and developmental disabilities or care	2494
provided in schools.	2495

(2) "Parent" means either parent of a child, including an	2496
adoptive parent but not a foster parent.	2497

(3) "Unlicensed in-home care worker" means an individual who	2498
provides in-home care but is not a health care professional. A	2499
county board worker may be an unlicensed in-home care worker.	2500

(4) "Family member" means a parent, sibling, spouse, son,	2501
daughter, grandparent, aunt, uncle, cousin, or guardian of the	2502
individual with mental retardation or a developmental disability	2503
if the individual with mental retardation or developmental	2504
disabilities lives with the person and is dependent on the person	2505
to the extent that, if the supports were withdrawn, another living	2506
arrangement would have to be found.	2507

(B) Except as provided in division (D) of this section, a	2508
family member of an individual with mental retardation or a	2509
developmental disability may authorize an unlicensed in-home care	2510
worker to give or apply prescribed medication or perform other	2511
health care tasks as part of the in-home care provided to the	2512
individual, if the family member is the primary supervisor of the	2513
care and the unlicensed in-home care worker has been selected by	2514
the family member and is under the direct supervision of the	2515
family member. Sections 4723.62 and 5126.351 to 5126.356 of the	2516
Revised Code do not apply to the in-home care authorized by a	2517
family member under this section. Instead, a family member shall	2518
obtain a prescription, if applicable, and written instructions	2519
from a health care professional for the care to be provided to the	2520
individual. The family member shall authorize the unlicensed	2521
in-home care worker to provide the care by preparing a written	2522
document granting the authority. The family member shall provide	2523
the unlicensed in-home care worker with appropriate training and	2524
written instructions in accordance with the instructions obtained	2525
from the health care professional.	2526

(C) A family member who authorizes an unlicensed in-home	2527
care worker to give or apply prescribed medication or perform	2528
other health care tasks retains full responsibility for the health	2529
and safety of the individual receiving the care and for ensuring	2530
that the worker provides the care appropriately and safely. No	2531
entity that funds or monitors the provision of in-home care may be	2532
held liable for the results of the care provided under this	2533
section by an unlicensed in-home care worker, including such	2534
entities as the county board of mental retardation and	2535
developmental disabilities, any other entity that employs an	2536
unlicensed in-home care worker, and the department of mental	2537
retardation and developmental disabilities.	2538

An unlicensed in-home care worker who is authorized under	2539
this section by a family member to provide care to an individual	2540
may not be held liable for any injury caused in providing the	2541
care, unless the worker provides the care in a manner that is not	2542
in accordance with the training and instructions received or the	2543
worker acts in a manner that constitutes wanton or reckless	2544
misconduct.	2545

(D) A county board of mental retardation and developmental	2546
disabilities may evaluate the authority granted by a family member	2547
under this section to an unlicensed in-home care worker at any	2548
time it considers necessary and shall evaluate the authority on	2549
receipt of a complaint. If the board determines that a family	2550
member has acted in a manner that is inappropriate for the health	2551
and safety of the individual receiving the services, the	2552
authorization granted by the family member to an unlicensed	2553
in-home care worker is void, and the family member may not	2554
authorize other unlicensed in-home care workers to provide the	2555
care. In making such a determination, the board shall use	2556
appropriately licensed health care professionals and shall provide	2557
the family member an opportunity to file a complaint under section	2558
5126.06 of the Revised Code.	2559

Sec. 5705.44.  When contracts or leases run beyond the	2560
termination of the fiscal year in which they are made, the fiscal	2561
officer of the taxing authority shall make a certification for the	2562
amount required to meet the obligation of such contract or lease	2563
maturing in such fiscal year. The amount of the obligation under	2564
such contract or lease remaining unfulfilled at the end of a	2565
fiscal year, and which will become payable during the next fiscal	2566
year, shall be included in the annual appropriation measure for	2567
the next year as a fixed charge.	2568

The certificate required by section 5705.41 of the Revised	2569
Code as to money in the treasury shall not be required for	2570
contracts on which payments are to be made from the earnings of a	2571
publicly operated water works or public utility, but in the case	2572
of any such contract made without such certification, no payment	2573
shall be made on account thereof, and no claim or demand thereon	2574
shall be recoverable, except out of such earnings. That	2575
certificate also shall not be required if requiring the	2576
certificate makes it impossible for a county board of mental	2577
retardation and developmental disabilities to pay the nonfederal	2578
share of medicaid expenditures that the county board is required	2579
by division (A) of section 5126.0565126.057 of the Revised Code	2580
to pay.	2581

Sec. 5733.04.  As used in this chapter:

2582

(A) "Issued and outstanding shares of stock" applies to	2583
nonprofit corporations, as provided in section 5733.01 of the	2584
Revised Code, and includes, but is not limited to, membership	2585
certificates and other instruments evidencing ownership of an	2586
interest in such nonprofit corporations, and with respect to a	2587
financial institution that does not have capital stock, "issued	2588
and outstanding shares of stock" includes, but is not limited to,	2589
ownership interests of depositors in the capital employed in such	2590
an institution.	2591

(B) "Taxpayer" means a corporation subject to the tax	2592
imposed by section 5733.06 of the Revised Code.	2593

(C) "Resident" means a corporation organized under the laws	2594
of this state.	2595

(D) "Commercial domicile" means the principal place from	2596
which the trade or business of the taxpayer is directed or	2597
managed.	2598

(E) "Taxable year" means the period prescribed by division	2599
(A) of section 5733.031 of the Revised Code upon the net income of	2600
which the value of the taxpayer's issued and outstanding shares of	2601
stock is determined under division (B) of section 5733.05 of the	2602
Revised Code or the period prescribed by division (A) of section	2603
5733.031 of the Revised Code that immediately precedes the date as	2604
of which the total value of the corporation is determined under	2605
division (A) or (C) of section 5733.05 of the Revised Code.	2606

(F) "Tax year" means the calendar year in and for which the	2607
tax imposed by section 5733.06 of the Revised Code is required to	2608
be paid.	2609

(G) "Internal Revenue Code" means the "Internal Revenue Code	2610
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	2611

(H) "Federal income tax" means the income tax imposed by the	2612
Internal Revenue Code.	2613

(I) Except as provided in section 5733.058 of the Revised	2614
Code, "net income" means the taxpayer's taxable income before	2615
operating loss deduction and special deductions, as required to be	2616
reported for the taxpayer's taxable year under the Internal	2617
Revenue Code, subject to the following adjustments:	2618

(1)(a) DeductExcept as otherwise provided in division	2619
(I)(1)(d) of this section, deduct any net operating loss incurred	2620
in any taxable years ending in 1971 or thereafter but exclusive of	2621
any net operating loss incurred in taxable years ending prior to	2622
January 1, 1971. This deduction shall not be allowed in any tax	2623
year commencing before December 31, 1973, but shall be carried	2624
over and allowed in tax years commencing after December 31, 1973,	2625
until fully utilized in the next succeeding taxable year or years	2626
in which the taxpayer has net income, but in no case for more than	2627
the designated carryover period as described in division (I)(1)(b)	2628
of this section. The amount of such net operating loss, as	2629
determined under the allocation and apportionment provisions of	2630
section 5733.051 and division (B) of section 5733.05 of the	2631
Revised Code for the year in which the net operating loss occurs,	2632
shall be deducted from net income, as determined under the	2633
allocation and apportionment provisions of section 5733.051 and	2634
division (B) of section 5733.05 of the Revised Code, to the extent	2635
necessary to reduce net income to zero with the remaining unused	2636
portion of the deduction, if any, carried forward to the remaining	2637
years of the designated carryover period as described in division	2638
(I)(1)(b) of this section, or until fully utilized, whichever	2639
occurs first.	2640

(b) For losses incurred in taxable years ending on or before	2641
December 31, 1981, the designated carryover period shall be the	2642
five consecutive taxable years after the taxable year in which the	2643
net operating loss occurred. For losses incurred in taxable years	2644
ending on or after January 1, 1982, the designated carryover	2645
period shall be the fifteen consecutive taxable years after the	2646
taxable year in which the net operating loss occurs.	2647

(c) The tax commissioner may require a taxpayer to furnish	2648
any information necessary to support a claim for deduction under	2649
division (I)(1)(a) of this section and no deduction shall be	2650
allowed unless the information is furnished.	2651

(d)(i) For corporations having a taxable year ending on or	2652
after November 30, 2001, but ending prior to January 8, 2002, the	2653
deduction provided by division (I)(1)(a) of this section shall not	2654
be allowed for tax year 2002, but the amount of the remaining	2655
unused portion of the net operating loss deduction and the	2656
remaining years of the designated carryover period shall be	2657
computed as if the corporation were allowed the deduction for the	2658
tax year without regard to division (I)(1)(d)(i) of this section.	2659

(ii) The deduction provided by division (I)(1)(a) of this	2660
section shall not be allowed for tax year 2003, but the amount of	2661
the remaining unused portion of the net operating loss deduction	2662
and the remaining years of the designated carryover period shall	2663
be computed as if the corporation were allowed the deduction for	2664
the tax year without regard to division (I)(1)(d)(ii) of this	2665
section.	2666

(iii) For corporations not described in division	2667
(I)(1)(d)(i) of this section, the deduction provided by division	2668
(I)(1)(a) of this section shall not be allowed for tax year 2004,	2669
but the amount of the remaining unused portion of the net	2670
operating loss deduction and the remaining years of the designated	2671
carryover period shall be computed as if the corporation were	2672
allowed the deduction for the tax year without regard to division	2673
(I)(1)(d)(iii) of this section.	2674

(2) Deduct any amount included in net income by application	2675
of section 78 or 951 of the Internal Revenue Code, amounts	2676
received for royalties, technical or other services derived from	2677
sources outside the United States, and dividends received from a	2678
subsidiary, associate, or affiliated corporation that neither	2679
transacts any substantial portion of its business nor regularly	2680
maintains any substantial portion of its assets within the United	2681
States. For purposes of determining net foreign source income	2682
deductible under division (I)(2) of this section, the amount of	2683
gross income from all such sources other than income derived by	2684
application of section 78 or 951 of the Internal Revenue Code	2685
shall be reduced by:	2686

(a) The amount of any reimbursed expenses for personal	2687
services performed by employees of the taxpayer for the	2688
subsidiary, associate, or affiliated corporation;	2689

(b) Ten per cent of the amount of royalty income and	2690
technical assistance fees;	2691

(c) Fifteen per cent of the amount of dividends and all	2692
other income.	2693

The amounts described in divisions (I)(2)(a) to (c) of this	2694
section are deemed to be the expenses attributable to the	2695
production of deductible foreign source income unless the taxpayer	2696
shows, by clear and convincing evidence, less actual expenses, or	2697
the tax commissioner shows, by clear and convincing evidence, more	2698
actual expenses.	2699

(3) Add any loss or deduct any gain resulting from the sale,	2700
exchange, or other disposition of a capital asset, or an asset	2701
described in section 1231 of the Internal Revenue Code, to the	2702
extent that such loss or gain occurred prior to the first taxable	2703
year on which the tax provided for in section 5733.06 of the	2704
Revised Code is computed on the corporation's net income. For	2705
purposes of division (I)(3) of this section, the amount of the	2706
prior loss or gain shall be measured by the difference between the	2707
original cost or other basis of the asset and the fair market	2708
value as of the beginning of the first taxable year on which the	2709
tax provided for in section 5733.06 of the Revised Code is	2710
computed on the corporation's net income. At the option of the	2711
taxpayer, the amount of the prior loss or gain may be a percentage	2712
of the gain or loss, which percentage shall be determined by	2713
multiplying the gain or loss by a fraction, the numerator of which	2714
is the number of months from the acquisition of the asset to the	2715
beginning of the first taxable year on which the fee provided in	2716
section 5733.06 of the Revised Code is computed on the	2717
corporation's net income, and the denominator of which is the	2718
number of months from the acquisition of the asset to the sale,	2719
exchange, or other disposition of the asset. The adjustments	2720
described in this division do not apply to any gain or loss where	2721
the gain or loss is recognized by a qualifying taxpayer, as	2722
defined in section 5733.0510 of the Revised Code, with respect to	2723
a qualifying taxable event, as defined in that section.	2724

(4) Deduct the dividend received deduction provided by	2725
section 243 of the Internal Revenue Code.	2726

(5) Deduct any interest or interest equivalent on public	2727
obligations and purchase obligations to the extent included in	2728
federal taxable income. As used in divisions (I)(5) and (6) of	2729
this section, "public obligations," "purchase obligations," and	2730
"interest or interest equivalent" have the same meanings as in	2731
section 5709.76 of the Revised Code.	2732

(6) Add any loss or deduct any gain resulting from the sale,	2733
exchange, or other disposition of public obligations to the extent	2734
included in federal taxable income.	2735

(7) To the extent not otherwise allowed, deduct any	2736
dividends or distributions received by a taxpayer from a public	2737
utility, excluding an electric company, if the taxpayer owns at	2738
least eighty per cent of the issued and outstanding common stock	2739
of the public utility. As used in division (I)(7) of this	2740
section, "public utility" means a public utility as defined in	2741
Chapter 5727. of the Revised Code, whether or not the public	2742
utility is doing business in the state.	2743

(8) To the extent not otherwise allowed, deduct any	2744
dividends received by a taxpayer from an insurance company, if the	2745
taxpayer owns at least eighty per cent of the issued and	2746
outstanding common stock of the insurance company. As used in	2747
division (I)(8) of this section, "insurance company" means an	2748
insurance company that is taxable under Chapter 5725. or 5729. of	2749
the Revised Code.	2750

(9) Deduct expenditures for modifying existing buildings or	2751
structures to meet American national standards institute standard	2752
A-117.1-1961 (R-1971), as amended; provided, that no deduction	2753
shall be allowed to the extent that such deduction is not	2754
permitted under federal law or under rules of the tax	2755
commissioner. Those deductions as are allowed may be taken over a	2756
period of five years. The tax commissioner shall adopt rules	2757
under Chapter 119. of the Revised Code establishing reasonable	2758
limitations on the extent that expenditures for modifying existing	2759
buildings or structures are attributable to the purpose of making	2760
the buildings or structures accessible to and usable by physically	2761
handicapped persons.	2762

(10) Deduct the amount of wages and salaries, if any, not	2763
otherwise allowable as a deduction but that would have been	2764
allowable as a deduction in computing federal taxable income	2765
before operating loss deduction and special deductions for the	2766
taxable year, had the targeted jobs credit allowed and determined	2767
under sections 38, 51, and 52 of the Internal Revenue Code not	2768
been in effect.	2769

(11) Deduct net interest income on obligations of the United	2770
States and its territories and possessions or of any authority,	2771
commission, or instrumentality of the United States to the extent	2772
the laws of the United States prohibit inclusion of the net	2773
interest for purposes of determining the value of the taxpayer's	2774
issued and outstanding shares of stock under division (B) of	2775
section 5733.05 of the Revised Code. As used in division (I)(11)	2776
of this section, "net interest" means interest net of any expenses	2777
taken on the federal income tax return that would not have been	2778
allowed under section 265 of the Internal Revenue Code if the	2779
interest were exempt from federal income tax.	2780

(12)(a) Except as set forth in division (I)(12)(d) of this	2781
section, to the extent not included in computing the taxpayer's	2782
federal taxable income before operating loss deduction and special	2783
deductions, add gains and deduct losses from direct or indirect	2784
sales, exchanges, or other dispositions, made by a related entity	2785
who is not a taxpayer, of the taxpayer's indirect, beneficial, or	2786
constructive investment in the stock or debt of another entity,	2787
unless the gain or loss has been included in computing the federal	2788
taxable income before operating loss deduction and special	2789
deductions of another taxpayer with a more closely related	2790
investment in the stock or debt of the other entity. The amount	2791
of gain added or loss deducted shall not exceed the product	2792
obtained by multiplying such gain or loss by the taxpayer's	2793
proportionate share, directly, indirectly, beneficially, or	2794
constructively, of the outstanding stock of the related entity	2795
immediately prior to the direct or indirect sale, exchange, or	2796
other disposition.	2797

(b) Except as set forth in division (I)(12)(e) of this	2798
section, to the extent not included in computing the taxpayer's	2799
federal taxable income before operating loss deduction and special	2800
deductions, add gains and deduct losses from direct or indirect	2801
sales, exchanges, or other dispositions made by a related entity	2802
who is not a taxpayer, of intangible property other than stock,	2803
securities, and debt, if such property was owned, or used in whole	2804
or in part, at any time prior to or at the time of the sale,	2805
exchange, or disposition by either the taxpayer or by a related	2806
entity that was a taxpayer at any time during the related entity's	2807
ownership or use of such property, unless the gain or loss has	2808
been included in computing the federal taxable income before	2809
operating loss deduction and special deductions of another	2810
taxpayer with a more closely related ownership or use of such	2811
intangible property. The amount of gain added or loss deducted	2812
shall not exceed the product obtained by multiplying such gain or	2813
loss by the taxpayer's proportionate share, directly, indirectly,	2814
beneficially, or constructively, of the outstanding stock of the	2815
related entity immediately prior to the direct or indirect sale,	2816
exchange, or other disposition.	2817

(c) As used in division (I)(12) of this section, "related	2818
entity" means those entities described in divisions (I)(12)(c)(i)	2819
to (iii) of this section:	2820

(i) An individual stockholder, or a member of the	2821
stockholder's family enumerated in section 318 of the Internal	2822
Revenue Code, if the stockholder and the members of the	2823
stockholder's family own, directly, indirectly, beneficially, or	2824
constructively, in the aggregate, at least fifty per cent of the	2825
value of the taxpayer's outstanding stock;	2826

(ii) A stockholder, or a stockholder's partnership, estate,	2827
trust, or corporation, if the stockholder and the stockholder's	2828
partnerships, estates, trusts, and corporations own directly,	2829
indirectly, beneficially, or constructively, in the aggregate, at	2830
least fifty per cent of the value of the taxpayer's outstanding	2831
stock;	2832

(iii) A corporation, or a party related to the corporation	2833
in a manner that would require an attribution of stock from the	2834
corporation to the party or from the party to the corporation	2835
under division (I)(12)(c)(iv) of this section, if the taxpayer	2836
owns, directly, indirectly, beneficially, or constructively, at	2837
least fifty per cent of the value of the corporation's outstanding	2838
stock.	2839

(iv) The attribution rules of section 318 of the Internal	2840
Revenue Code apply for purposes of determining whether the	2841
ownership requirements in divisions (I)(12)(c)(i) to (iii) of this	2842
section have been met.	2843

(d) For purposes of the adjustments required by division	2844
(I)(12)(a) of this section, the term "investment in the stock or	2845
debt of another entity" means only those investments where the	2846
taxpayer and the taxpayer's related entities directly, indirectly,	2847
beneficially, or constructively own, in the aggregate, at any time	2848
during the twenty-four month period commencing one year prior to	2849
the direct or indirect sale, exchange, or other disposition of	2850
such investment at least fifty per cent or more of the value of	2851
either the outstanding stock or such debt of such other entity.	2852

(e) For purposes of the adjustments required by division	2853
(I)(12)(b) of this section, the term "related entity" excludes all	2854
of the following:	2855

(i) Foreign corporations as defined in section 7701 of the	2856
Internal Revenue Code;	2857

(ii) Foreign partnerships as defined in section 7701 of the	2858
Internal Revenue Code;	2859

(iii) Corporations, partnerships, estates, and trusts	2860
created or organized in or under the laws of the Commonwealth of	2861
Puerto Rico or any possession of the United States;	2862

(iv) Foreign estates and foreign trusts as defined in	2863
section 7701 of the Internal Revenue Code.	2864

The exclusions described in divisions (I)(12)(e)(i) to (iv)	2865
of this section do not apply if the corporation, partnership,	2866
estate, or trust is described in any one of divisionsdivision	2867
(C)(1) to (5) of section 5733.042 of the Revised Code.	2868

(f) Nothing in division (I)(12) of this section shall	2869
require or permit a taxpayer to add any gains or deduct any losses	2870
described in divisions (I)(12)(f)(i) and (ii) of this section:	2871

(i) Gains or losses recognized for federal income tax	2872
purposes by an individual, estate, or trust without regard to the	2873
attribution rules described in division (I)(12)(c) of this	2874
section;	2875

(ii) A related entity's gains or losses described in	2876
division (I)(12)(b) if the taxpayer's ownership of or use of such	2877
intangible property was limited to a period not exceeding nine	2878
months and was attributable to a transaction or a series of	2879
transactions executed in accordance with the election or elections	2880
made by the taxpayer or a related entity pursuant to section 338	2881
of the Internal Revenue Code.	2882

(13) Any adjustment required by section 5733.042 of the	2883
Revised Code.	2884

(14) Add any amount claimed as a credit under section	2885
5733.0611 of the Revised Code to the extent that such amount	2886
satisfies either of the following:	2887

(a) It was deducted or excluded from the computation of the	2888
corporation's taxable income before operating loss deduction and	2889
special deductions as required to be reported for the	2890
corporation's taxable year under the Internal Revenue Code;	2891

(b) It resulted in a reduction of the corporation's taxable	2892
income before operating loss deduction and special deductions as	2893
required to be reported for any of the corporation's taxable years	2894
under the Internal Revenue Code.	2895

(15) Deduct the amount contributed by the taxpayer to an	2896
individual development account program established by a county	2897
department of job and family services pursuant to sections 329.11	2898
to 329.14 of the Revised Code for the purpose of matching funds	2899
deposited by program participants. On request of the tax	2900
commissioner, the taxpayer shall provide any information that, in	2901
the tax commissioner's opinion, is necessary to establish the	2902
amount deducted under division (I)(15) of this section.	2903

(16) Any adjustment required by section 5733.0510 of the	2904
Revised Code.	2905

(J) Any term used in this chapter has the same meaning as	2906
when used in comparable context in the laws of the United States	2907
relating to federal income taxes unless a different meaning is	2908
clearly required. Any reference in this chapter to the Internal	2909
Revenue Code includes other laws of the United States relating to	2910
federal income taxes.	2911

(K) "Financial institution" has the meaning given by section	2912
5725.01 of the Revised Code but does not include a production	2913
credit association as described in 85 Stat. 597, 12 U.S.C.A. 2091.	2914

(L)(1) A "qualifying holding company" is any corporation	2915
satisfying all of the following requirements:	2916

(a) Subject to divisions (L)(2) and (3) of this section, the	2917
net book value of the corporation's intangible assets is greater	2918
than or equal to ninety per cent of the net book value of all of	2919
its assets and at least fifty per cent of the net book value of	2920
all of its assets represents direct or indirect investments in the	2921
equity of, loans and advances to, and accounts receivable due from	2922
related members;	2923

(b) At least ninety per cent of the corporation's gross	2924
income for the taxable year is attributable to the following:	2925

(i) The maintenance, management, ownership, acquisition,	2926
use, and disposition of its intangible property, its aircraft the	2927
use of which is not subject to regulation under 14 C.F.R. part 121	2928
or part 135, and any real property described in division (L)(2)(c)	2929
of this section;	2930

(ii) The collection and distribution of income from such	2931
property.	2932

(c) The corporation is not a financial institution on the	2933
last day of the taxable year ending prior to the first day of the	2934
tax year;	2935

(d) The corporation's related members make a good faith and	2936
reasonable effort to make timely and fully the adjustments	2937
required by division (C)(2)(D)(1) of section 5733.05 of the	2938
Revised Code and to pay timely and fully all uncontested taxes,	2939
interest, penalties, and other fees and charges imposed under this	2940
chapter;	2941

(e) Subject to division (L)(4) of this section, the	2942
corporation elects to be treated as a qualifying holding company	2943
for the tax year.	2944

A corporation otherwise satisfying divisions (L)(1)(a) to (e)	2945
of this section that does not elect to be a qualifying holding	2946
company is not a qualifying holding company for the purposes of	2947
this chapter.	2948

(2)(a)(i) For purposes of making the ninety per cent	2949
computation under division (L)(1)(a) of this section, the net book	2950
value of the corporation's assets shall not include the net book	2951
value of aircraft or real property described in division	2952
(L)(1)(b)(i) of this section.	2953

(ii) For purposes of making the fifty per cent computation	2954
under division (L)(1)(a) of this section, the net book value of	2955
assets shall include the net book value of aircraft or real	2956
property described in division (L)(1)(b)(i) of this section.	2957

(b)(i) As used in division (L) of this section, "intangible	2958
asset" includes, but is not limited to, the corporation's direct	2959
interest in each pass-through entity only if at all times during	2960
the corporation's taxable year ending prior to the first day of	2961
the tax year the corporation's and the corporation's related	2962
members' combined direct and indirect interests in the capital or	2963
profits of such pass-through entity do not exceed fifty per cent.	2964
If the corporation's interest in the pass-through entity is an	2965
intangible asset for that taxable year, then the distributive	2966
share of any income from the pass-through entity shall be income	2967
from an intangible asset for that taxable year.	2968

(ii) If a corporation's and the corporation's related	2969
members' combined direct and indirect interests in the capital or	2970
profits of a pass-through entity exceed fifty per cent at any time	2971
during the corporation's taxable year ending prior to the first	2972
day of the tax year, "intangible asset" does not include the	2973
corporation's direct interest in the pass-through entity, and the	2974
corporation shall include in its assets its proportionate share of	2975
the assets of any such pass-through entity and shall include in	2976
its gross income its distributive share of the gross income of	2977
such pass-through entity in the same form as was earned by the	2978
pass-through entity.	2979

(iii) A pass-through entity's direct or indirect	2980
proportionate share of any other pass-through entity's assets	2981
shall be included for the purpose of computing the corporation's	2982
proportionate share of the pass-through entity's assets under	2983
division (L)(2)(b)(ii) of this section, and such pass-through	2984
entity's distributive share of any other pass-through entity's	2985
gross income shall be included for purposes of computing the	2986
corporation's distributive share of the pass-through entity's	2987
gross income under division (L)(2)(b)(ii) of this section.	2988

(c) For the purposes of divisions (L)(1)(b)(i), (1)(b)(ii),	2989
(2)(a)(i), and (2)(a)(ii) of this section, real property is	2990
described in division (L)(2)(c) of this section only if all of the	2991
following conditions are present at all times during the taxable	2992
year ending prior to the first day of the tax year:	2993

(i) The real property serves as the headquarters of the	2994
corporation's trade or business, or is the place from which the	2995
corporation's trade or business is principally managed or	2996
directed;	2997

(ii) Not more than ten per cent of the value of the real	2998
property and not more than ten per cent of the square footage of	2999
the building or buildings that are part of the real property is	3000
used, made available, or occupied for the purpose of providing,	3001
acquiring, transferring, selling, or disposing of tangible	3002
property or services in the normal course of business to persons	3003
other than related members, the corporation's employees and their	3004
families, and such related members' employees and their families.	3005

(d) As used in division (L) of this section, "related	3006
member" has the same meaning as in division (A)(6) of section	3007
5733.042 of the Revised Code without regard to division (B) of	3008
that section.	3009

(3) The percentages described in division (L)(1)(a) of this	3010
section shall be equal to the quarterly average of those	3011
percentages as calculated during the corporation's taxable year	3012
ending prior to the first day of the tax year.	3013

(4) With respect to the election described in division	3014
(L)(1)(e) of this section:	3015

(a) The election need not accompany a timely filed report;

3016

(b) The election need not accompany the report; rather, the	3017
election may accompany a subsequently filed but timely application	3018
for refund and timely amended report, or a subsequently filed but	3019
timely petition for reassessment;	3020

(c) The election is not irrevocable;

3021

(d) The election applies only to the tax year specified by	3022
the corporation;	3023

(e) The corporation's related members comply with division	3024
(L)(1)(d) of this section.	3025

Nothing in division (L)(4) of this section shall be construed	3026
to extend any statute of limitations set forth in this chapter.	3027

(M) "Qualifying controlled group" means two or more	3028
corporations that satisfy the ownership and control requirements	3029
of division (A) of section 5733.052 of the Revised Code.	3030

(N) "Limited liability company" means any limited liability	3031
company formed under Chapter 1705. of the Revised Code or under	3032
the laws of any other state.	3033

(O) "Pass-through entity" means a corporation that has made	3034
an election under subchapter S of Chapter 1 of Subtitle A of the	3035
Internal Revenue Code for its taxable year under that code, or a	3036
partnership, limited liability company, or any other person, other	3037
than an individual, trust, or estate, if the partnership, limited	3038
liability company, or other person is not classified for federal	3039
income tax purposes as an association taxed as a corporation.	3040

(P) "Electric company" and "combined company" have the same	3041
meanings as in section 5727.01 of the Revised Code.	3042

Sec. 5733.042.  (A) As used in this section:

3043

(1) "Affiliated group" has the same meaning as in section	3044
1504 of the Internal Revenue Code.	3045

(2) "Asset value" means the adjusted basis of assets as	3046
determined in accordance with Subchapter O of the Internal Revenue	3047
Code and the Treasury Regulations thereunder.	3048

(3) "Intangible expenses and costs" include expenses,	3049
losses, and costs for, related to, or in connection directly or	3050
indirectly with the direct or indirect acquisition of, the direct	3051
or indirect use of, the direct or indirect maintenance or	3052
management of, the direct or indirect ownership of, the direct or	3053
indirect sale of, the direct or indirect exchange of, or any other	3054
direct or indirect disposition of intangible property to the	3055
extent such amounts are allowed as deductions or costs in	3056
determining taxable income before operating loss deduction and	3057
special deductions for the taxable year under the Internal Revenue	3058
Code. Such expenses and costs include, but are not limited to,	3059
losses related to or incurred in connection directly or indirectly	3060
with factoring transactions, losses related to or incurred in	3061
connection directly or indirectly with discounting transactions,	3062
royalty, patent, technical, and copyright fees, licensing fees,	3063
and other similar expenses and costs.	3064

(4) "Interest expenses and costs" include but are not	3065
limited to amounts directly or indirectly allowed as deductions	3066
under section 163 of the Internal Revenue Code for purposes of	3067
determining taxable income under the Internal Revenue Code.	3068

(5) "Member" has the same meaning as in U.S. Treasury	3069
Regulation section 1.1502-1.	3070

(6) "Related member" means a person that, with respect to	3071
the taxpayer during all or any portion of the taxable year, is a	3072
"related entity" as defined in division (I)(12)(c) of section	3073
5733.04 of the Revised Code, is a component member as defined in	3074
section 1563(b) of the Internal Revenue Code, or is a person to or	3075
from whom there is attribution of stock ownership in accordance	3076
with section 1563(e) of the Internal Revenue Code except, for	3077
purposes of determining whether a person is a related member under	3078
this division, "twenty per cent" shall be substituted for "5 per	3079
cent" wherever "5 per cent" appears in section 1563(e) of the	3080
Internal Revenue Code.	3081

(B) This section applies to all corporations for tax years	3082
1999 and thereafter. For tax years prior to 1999, this section	3083
applies only to a corporation that has, or is a member of an	3084
affiliated group that has, or is a member of an affiliated group	3085
with another member that has, one or more of the following:	3086

(1) Gross sales, including sales to other members of the	3087
affiliated group, during the taxable year of at least fifty	3088
million dollars;	3089

(2) Total assets whose asset value at any time during the	3090
taxable year is at least twenty-five million dollars;	3091

(3) Taxable income before operating loss deduction and	3092
special deductions during the taxable year of at least five	3093
hundred thousand dollars.	3094

(C) For purposes of computing its net income under division	3095
(I) of section 5733.04 of the Revised Code, the corporation shall	3096
add interest expenses and costs and intangible expenses and costs	3097
directly or indirectly paid, accrued, or incurred to, or in	3098
connection directly or indirectly with one or more direct or	3099
indirect transactions with, one or more of the followingany	3100
related members:	3101

(1) Any related member whose activities, in any one state,	3102
are primarily limited to the maintenance and management of	3103
intangible investments or of the intangible investments of	3104
corporations, business trusts, or other entities registered as	3105
investment companies under the "Investment Company Act of 1940,"	3106
15 U.S.C. 80a-1 et seq., as amended, and the collection and	3107
distribution of the income from such investments or from tangible	3108
property physically located outside such state. For purposes of	3109
division (C)(1) of this section, "intangible investments"	3110
includes, without limitation, investments in stocks, bonds, notes,	3111
and other debt obligations, including debt obligations of related	3112
members, interests in partnerships, patents, patent applications,	3113
trademarks, trade names, and similar types of intangible assets.	3114

(2) Any related member that is a personal holding company as	3115
defined in section 542 of the Internal Revenue Code without regard	3116
to the stock ownership requirements set forth in section 542(a)(2)	3117
of the Internal Revenue Code;	3118

(3) Any related member that is not a corporation and is	3119
directly, indirectly, constructively, or beneficially owned in	3120
whole or in part by a personal holding company as defined in	3121
section 542 of the Internal Revenue Code without regard to the	3122
stock ownership requirements set forth in section 542(a)(2) of the	3123
Internal Revenue Code;	3124

(4) Any related member that is a foreign personal holding	3125
company as defined in section 552 of the Internal Revenue Code;	3126

(5) Any related member that is not a corporation and is	3127
directly, indirectly, constructively, or beneficially owned in	3128
whole or in part by a foreign personal holding company as defined	3129
in section 552 of the Internal Revenue Code;	3130

(6) Any related member if that related member or another	3131
related member directly or indirectly paid, accrued, or incurred	3132
to, or in connection directly or indirectly with one or more	3133
direct or indirect transactions with, another related member any	3134
interest expenses and costs or intangible expenses and costs in an	3135
amount less than, equal to, or greater than such amounts received	3136
from the corporation. Division (C)(6) of this section applies	3137
only if, within a one-hundred-twenty-month period commencing three	3138
years prior to the beginning of the tax year, a related member	3139
directly or indirectly paid, accrued, or incurred such amounts or	3140
losses with respect to one or more direct or indirect transactions	3141
with an entity described in divisions (C)(1) to (5) of this	3142
section. A rebuttable presumption exists that a related member	3143
did so pay, accrue, or incur such amounts or losses with respect	3144
to one or more direct or indirect transactions with an entity	3145
described in divisions (C)(1) to (5) of this section. A	3146
corporation can rebut this presumption only with a preponderance	3147
of the evidence to the contrary.	3148

(7) Any related member that, with respect to indebtedness	3149
directly or indirectly owed by the corporation to the related	3150
member, directly or indirectly charged or imposed on the	3151
corporation an excess interest rate. If the related member has	3152
charged or imposed on the corporation an excess interest rate, the	3153
adjustment required by division (C)(7) of this section with	3154
respect to such interest expenses and costs directly or indirectly	3155
paid, accrued, or incurred to the related member in connection	3156
with such indebtedness does not include so much of such interest	3157
expenses and costs that the corporation would have directly or	3158
indirectly paid, accrued, or incurred if the related member had	3159
charged or imposed the highest possible interest rate that would	3160
not have been an excess interest rate. For purposes of division	3161
(C)(7) of this section, an excess interest rate is an annual rate	3162
that exceeds by more than three per cent the greater of the rate	3163
per annum prescribed by section 5703.47 of the Revised Code in	3164
effect at the time of the origination of the indebtedness, or the	3165
rate per annum prescribed by section 5703.47 of the Revised Code	3166
in effect at the time the corporation paid, accrued, or incurred	3167
the interest expense or cost to the related member.	3168

(D)(1) In making the adjustment required by division (C) of	3169
this section, the corporation shall make the adjustment required	3170
by section 5733.057 of the Revised Code. The adjustments required	3171
by division (C) of this section are not required if either of the	3172
following applies:	3173

(a) The corporation establishes by clear and convincing	3174
evidence that the adjustments are unreasonable.	3175

(b) The corporation and the tax commissioner agree in	3176
writing to the application or use of alternative adjustments and	3177
computations to more properly reflect the base required to be	3178
determined in accordance with division (B) of section 5733.05 of	3179
the Revised Code. Nothing in division (D)(1)(b) of this section	3180
shall be construed to limit or negate the tax commissioner's	3181
authority to otherwise enter into agreements and compromises	3182
otherwise allowed by law.	3183

(2) The adjustments required by divisionsdivision (C)(1) to	3184
(5) of this section do not apply to such portion of interest	3185
expenses and costs and intangible expenses and costs that the	3186
corporation can establish by the preponderance of the evidence	3187
meets both of the following:	3188

(a) The related member during the same taxable year directly	3189
or indirectly paid, accrued, or incurred such portion to a person	3190
who is not a related member.	3191

(b) The transaction giving rise to the interest expenses and	3192
costs or the intangible expenses and costs between the corporation	3193
and the related member did not have as a principal purpose the	3194
avoidance of any portion of the tax due under this chapter.	3195

(3) The adjustments required by division (C)(6) of this	3196
section do not apply to such portion of interest expenses and	3197
costs and intangible expenses and costs that the corporation can	3198
establish by the preponderance of the evidence meets both of the	3199
following:	3200

(a) The entity described in any of divisions (C)(1) to (6)	3201
of this section to whom the related member directly or indirectly	3202
paid, accrued, or incurred such portion, in turn during the same	3203
taxable year directly or indirectly paid, accrued or incurred such	3204
portion to a person who is not a related member, and	3205

(b) The transaction or transactions giving rise to the	3206
interest expenses and costs or the intangible expenses and costs	3207
between the corporation, the related member, and the entity	3208
described in any of divisions (C)(1) to (5) did not have as a	3209
principal purpose the avoidance of any portion of the tax due	3210
under this chapter.	3211

(4)(2) The adjustments required by division (C) of this	3212
section apply except to the extent that the increased tax, if any,	3213
attributable to such adjustments would have been avoided if both	3214
the corporation and the related member had been eligible to make	3215
request and had timely made the electionrequested, and the tax	3216
commissioner had approved the request, to combine in accordance	3217
with division (B)(A) of section 5733.052 of the Revised Code.	3218
Nothing in this division shall be construed to require either that	3219
the corporation actually make the request or actually file a	3220
combined report with the related member or that the commissioner	3221
actually approved the request.	3222

(E) Except as otherwise provided in division (F) of this	3223
section, if, on the day that is one year after the day the	3224
corporation files its report, the corporation has not made the	3225
adjustment required by this section or has not fully paid the tax	3226
and interest, if any, imposed by this chapter and attributable to	3227
such adjustment, the corporation is subject to a penalty equal to	3228
twice the interest charged under division (A) of section 5733.26	3229
of the Revised Code for the delinquent payment of such tax and	3230
interest. For the purpose of the computation of the penalty	3231
imposed by this division, such penalty shall be deemed to be part	3232
of the tax due on the dates prescribed by this chapter without	3233
regard to the one-year period set forth in this division. The	3234
penalty imposed by this division is not in lieu of but is in	3235
addition to all other penalties, other similar charges, and	3236
interest imposed by this chapter. The tax commissioner may waive,	3237
abate, modify, or refund, with interest, all or any portion of the	3238
penalty imposed by this division only if the corporation	3239
establishes beyond a reasonable doubt that both the failure to	3240
fully comply with this section and the failure to fully pay such	3241
tax and interest within one year after the date the corporation	3242
files its report were not in any part attributable to the	3243
avoidance of any portion of the tax imposed by section 5733.06 of	3244
the Revised Code.	3245

(F)(1) For purposes of division (F) of this division	3246
section, "tax differentialdifference" means the difference	3247
between the tax that is imposed by section 5733.06 of the Revised	3248
Code and that is attributable to the adjustment required by this	3249
section and the amount paid that is so attributable, prior to the	3250
day that is one year after the day the corporation files its	3251
report.	3252

(2) The penalty imposed by division (E) of this section does	3253
not apply if the tax differentialdifference meets both of the	3254
following requirements:	3255

(a) The tax differentialdifference is less than ten per	3256
cent of the tax imposed by section 5733.06 of the Revised Code;	3257
and	3258

(b) The tax difference is less than fifty thousand dollars.

3259

(3) Nothing in division (F) of this section shall be	3260
construed to waive, abate, or modify any other penalties, other	3261
similar charges, or interest imposed by other sections of this	3262
chapter.	3263

(G) Nothing in this section shall require a corporation to	3264
add to its net income more than once any amount of interest	3265
expenses and costs or intangible expenses and costs that the	3266
corporation pays, accrues, or incurs to a related member described	3267
in division (C) of this section.	3268

Sec. 5733.043. (A) For purposes of this section, the	3269
"suspended tax benefit portion of the net operating loss	3270
deduction" is the sum of the amounts described in divisions (A)(1)	3271
to (3) of this section. Division (A)(1) of this section applies	3272
only to corporations described in division (I)(1)(d)(i) of section	3273
5733.04 of the Revised Code. Division (A)(3) of this section	3274
applies only to corporations described in division (I)(1)(d)(iii)	3275
of section 5733.04 of the Revised Code.	3276

(1) The suspended benefit portion of the net operating loss	3277
deduction attributable to tax year 2002 is the following:	3278

(a) If the tax computed under division (C) of section 5733.06	3279
of the Revised Code is greater than the tax computed under	3280
divisions (A) and (B) of section 5733.06 of the Revised Code	3281
without the application of division (I)(1)(d) of section 5733.04	3282
of the Revised Code, the suspended tax benefit portion is zero.	3283

(b) If the tax computed under divisions (A) and (B) of	3284
section 5733.06 of the Revised Code after application of division	3285
(I)(1)(d) of section 5733.04 of the Revised Code is greater than	3286
the tax computed under division (C) of section 5733.06 of the	3287
Revised Code, and if the tax computed under division (C) of	3288
section 5733.06 of the Revised Code is greater than the tax	3289
computed under divisions (A) and (B) of section 5733.06 of the	3290
Revised Code without the application of division (I)(1)(d) of	3291
section 5733.04 of the Revised Code, the suspended tax benefit	3292
portion is the amount that, if subtracted from taxable income	3293
computed after application of division (I)(1)(d) of section	3294
5733.04 of the Revised Code, would result in a reduced taxable	3295
income whose tax computed under divisions (A) and (B) of section	3296
5733.06 of the Revised Code would equal the tax computed under	3297
division (C) of section 5733.06 of the Revised Code.	3298

(c) If the tax computed under divisions (A) and (B) of	3299
section 5733.06 of the Revised Code without the application of	3300
division (I)(1)(d) of section 5733.04 of the Revised Code is	3301
greater than the tax computed under division (C) of section	3302
5733.06 of the Revised Code, the suspended tax benefit portion is	3303
the difference between taxable income computed after application	3304
of division (I)(1)(d) of section 5733.04 of the Revised Code and	3305
taxable income computed without the application of division	3306
(I)(1)(d) of section 5733.04 of the Revised Code.	3307

(2) The suspended benefit portion of the net operating loss	3308
deduction attributable to tax year 2003 is the following:	3309

(a) If the tax computed under division (C) of section 5733.06	3310
of the Revised Code is greater than the tax computed under	3311
divisions (A) and (B) of section 5733.06 of the Revised Code	3312
without the application of division (I)(1)(d) of section 5733.04	3313
of the Revised Code, the suspended tax benefit portion is zero.	3314

(b) If the tax computed under divisions (A) and (B) of	3315
section 5733.06 of the Revised Code after application of division	3316
(I)(1)(d) of section 5733.04 of the Revised Code is greater than	3317
the tax computed under division (C) of section 5733.06 of the	3318
Revised Code, and if the tax computed under division (C) of	3319
section 5733.06 of the Revised Code is greater than the tax	3320
computed under divisions (A) and (B) of section 5733.06 of the	3321
Revised Code without the application of division (I)(1)(d) of	3322
section 5733.04 of the Revised Code, the suspended tax benefit	3323
portion is the amount that, if subtracted from taxable income	3324
computed after application of division (I)(1)(d) of section	3325
5733.04 of the Revised Code, would result in a reduced taxable	3326
income whose tax computed under divisions (A) and (B) of section	3327
5733.06 of the Revised Code would equal the tax computed under	3328
division (C) of section 5733.06 of the Revised Code.	3329

(c) If the tax computed under divisions (A) and (B) of	3330
section 5733.06 of the Revised Code without the application of	3331
division (I)(1)(d) of section 5733.04 of the Revised Code is	3332
greater than the tax computed under division (C) of section	3333
5733.06 of the Revised Code, the suspended tax benefit portion is	3334
the difference between taxable income computed after application	3335
of division (I)(1)(d) of section 5733.04 of the Revised Code and	3336
taxable income computed without the application of division	3337
(I)(1)(d) of section 5733.04 of the Revised Code.	3338

(3) The suspended benefit portion of the net operating loss	3339
deduction attributable to tax year 2004 is the following:	3340

(a) If the tax computed under division (C) of section 5733.06	3341
of the Revised Code is greater than the tax computed under	3342
divisions (A) and (B) of section 5733.06 of the Revised Code	3343
without the application of division (I)(1)(d) of section 5733.04	3344
of the Revised Code, the suspended tax benefit portion is zero.	3345

(b) If the tax computed under divisions (A) and (B) of	3346
section 5733.06 of the Revised Code after application of division	3347
(I)(1)(d) of section 5733.04 of the Revised Code is greater than	3348
the tax computed under division (C) of section 5733.06 of the	3349
Revised Code, and if the tax computed under division (C) of	3350
section 5733.06 of the Revised Code is greater than the tax	3351
computed under divisions (A) and (B) of section 5733.06 of the	3352
Revised Code without the application of division (I)(1)(d) of	3353
section 5733.04 of the Revised Code, the suspended tax benefit	3354
portion is the amount that, if subtracted from taxable income	3355
computed after application of division (I)(1)(d) of section	3356
5733.04 of the Revised Code, would result in a reduced taxable	3357
income whose tax computed under divisions (A) and (B) of section	3358
5733.06 of the Revised Code would equal the tax computed under	3359
division (C) of section 5733.06 of the Revised Code.	3360

(c) If the tax computed under divisions (A) and (B) of	3361
section 5733.06 of the Revised Code without the application of	3362
division (I)(1)(d) of section 5733.04 of the Revised Code is	3363
greater than the tax computed under division (C) of section	3364
5733.06 of the Revised Code, the suspended tax benefit portion is	3365
the difference between taxable income computed after application	3366
of division (I)(1)(d) of section 5733.04 of the Revised Code and	3367
taxable income computed without the application of division	3368
(I)(1)(d) of section 5733.04 of the Revised Code.	3369

(B) Beginning with tax year 2004, a corporation described in	3370
division (I)(1)(d)(i) of section 5733.04 of the Revised Code is	3371
entitled to a deduction from Ohio taxable income for the suspended	3372
tax benefit portion of the net operating loss deduction. The	3373
deduction allowed by this section shall not be available to such	3374
corporations for tax year 2019 and thereafter.	3375

(C) Beginning with tax year 2005, a corporation described in	3376
division (I)(1)(d)(ii) or (I)(1)(d)(iii) of section 5733.04 of the	3377
Revised Code is entitled to a deduction from Ohio taxable income	3378
for the suspended tax benefit portion of the net operating loss	3379
deduction. The deduction allowed by this section shall not be	3380
available to such corporations for tax year 2020 and therafter.	3381

(D)(1) The amount of the deduction for the tax year shall be	3382
the amount, if any, that is necessary, after application of all	3383
other deductions allowed to the corporation for the tax year, to	3384
reduce Ohio taxable income to zero.	3385

(2) Any remaining unused amount of the suspended tax benefit	3386
portion of the net operating loss deduction shall be carried	3387
forward to the next ensuing tax year and deducted in accordance	3388
with the procedure set forth in division (D)(1) of this section.	3389
Any such amount deducted in an ensuing tax year shall reduce the	3390
amount, if any, carried forward to the next ensuing tax year.	3391

(3) All unused amounts of the suspended tax benefit portion	3392
of the net operating loss deduction allowed under this chapter	3393
shall be claimed in the order in which they arose so that any	3394
portion arising in the first of two consecutive tax years shall	3395
be claimed prior to claiming any portion arising in the second of	3396
two consecutive tax years.	3397

(E)(1) For purposes of this section, "Ohio taxable income"	3398
means the value of the corporation's issued and outstanding shares	3399
of stock as determined under division (B) of section 5733.05 of	3400
the Revised Code without regard to the deductions provided by	3401
divisions (B) and (C) of this section.	3402

(2) If a corporation is entitled to a deduction under	3403
division (B) or (C) of this section for a tax year, then for	3404
purposes of sections 5733.06, 5733.065, and 5733.066 of the	3405
Revised Code for that tax year, the "value of the taxpayer's	3406
issued and outstanding shares of stock as determined under	3407
division (B) of section 5733.05 of the Revised Code" means such	3408
value reduced by the deduction provided by this section.	3409

(F) Nothing in this section shall be construed to allow any	3410
amount to be deducted more than once.	3411

Sec. 5733.055.  (A) As used in this section:

3412

(1) "Ceiling amount" means the excess of the amount	3413
described in division (A)(1)(a) of this section over the amount	3414
described in division (A)(1)(b) of this section:	3415

(a) The amount of income allocated and apportioned to this	3416
state in accordance with this chapter but without regard to and	3417
without application of the adjustments required by this section;	3418

(b) The amount of income allocated and apportioned to this	3419
state in accordance with this chapter but without regard to and	3420
without application of the adjustments required by both this	3421
section and division (I)(13) of section 5733.04 of the Revised	3422
Code.	3423

(2) "Income adjustment amount" means the sum of the amounts	3424
described in divisions (A)(2)(a) and (b) of this section:	3425

(a) The related member's net interest income actually	3426
allocated and apportioned to other states that impose a tax on or	3427
measured by income, in accordance with the other states'	3428
allocation and apportionment rules;	3429

(b) The related member's net intangible income actually	3430
allocated and apportioned to other states that impose a tax on or	3431
measured by income, in accordance with the other states'	3432
allocation and apportionment rules.	3433

For purposes of division (A)(2) of this section, "other	3434
states" does not include those states under whose laws the	3435
taxpayer files or could have elected to file with the related	3436
member, or the related member files or could have elected to file	3437
with another related member, a combined income tax report or	3438
return, a consolidated income tax report or return, or any other	3439
report or return where such report or return is due because of the	3440
imposition of a tax measured on or by income and such report or	3441
return results in the elimination of the tax effects from	3442
transactions directly or indirectly between either the taxpayer	3443
and the related member or between the related member and another	3444
corporation if such other corporation, during a	3445
one-hundred-twenty-month period commencing three years prior to	3446
the beginning of the tax year, directly or indirectly paid,	3447
accrued, or incurred intangible expenses and costs or interest	3448
expenses and costs to an entity described in divisionsdivision	3449
(C)(1) to (5) of section 5733.042 of the Revised Code.	3450

(3) "Intangible expenses and costs" has the same meaning as	3451
in division (A)(3) of section 5733.042 of the Revised Code.	3452

(4) "Interest expenses and costs" has the same meaning as in	3453
division (A)(4) of section 5733.042 of the Revised Code.	3454

(5) "Intangible income and revenue" are those amounts earned	3455
or received by a related member from a taxpayer for the taxpayer's	3456
use of intangible property. Such amounts include, but are not	3457
limited to, royalty, patent, technical, and copyright fees,	3458
licensing fees, and other similar income and revenue.	3459

(6) "Interest income and revenue" are those amounts earned	3460
or received by a related member from a taxpayer to the extent such	3461
amounts are allowed as deductions under section 163 of the	3462
Internal Revenue Code for purposes of determining the taxpayer's	3463
taxable income under the Internal Revenue Code.	3464

(7) "Net intangible income" means intangible income and	3465
revenue reduced by intangible expenses and costs paid or accrued	3466
directly or indirectly to a related member described in any of	3467
divisionsdivision (C)(1) to (7) of section 5747.042 of the	3468
Revised Code.	3469

(8) "Net interest income" means interest income and revenue	3470
reduced by interest expenses and costs paid or accrued directly or	3471
indirectly to a related member described in any of divisions	3472
division (C)(1) to (7) of section 5747.042 of the Revised Code.	3473

(B) Except as set forth in division (C) of this section, a	3474
deduction from the corporation's net income allocated and	3475
apportioned to this state shall be allowed in an amount equal to	3476
the income adjustment amount described in division (A)(2) of this	3477
section. However, in no case shall the deduction be greater than	3478
the ceiling amount described in division (A)(1) of this section.	3479

(C) The deduction provided by division (B) of this section	3480
is available to the taxpayer only if the taxpayer establishes with	3481
clear and convincing evidence that the intangible expenses and	3482
costs and the interest expenses and costs paid, accrued, or	3483
incurred by the corporation to a related member did not have as a	3484
principal purpose the avoidance of any portion of the tax imposed	3485
by section 5733.06 of the Revised Code.	3486

Sec. 5739.01.  As used in this chapter:

3487

(A) "Person" includes individuals, receivers, assignees,	3488
trustees in bankruptcy, estates, firms, partnerships,	3489
associations, joint-stock companies, joint ventures, clubs,	3490
societies, corporations, the state and its political subdivisions,	3491
and combinations of individuals of any form.	3492

(B) "Sale" and "selling" include all of the following	3493
transactions for a consideration in any manner, whether absolutely	3494
or conditionally, whether for a price or for lease or rental, in	3495
money or by exchange, and by any means whatsoever:	3496

(1) All transactions by which title or possession, or both,	3497
of tangible personal property, is or is to be transferred, or a	3498
license to use or consume tangible personal property is or is to	3499
be granted;	3500

(2) All transactions by which lodging by a hotel is or is to	3501
be furnished to transient guests;	3502

(3) All transactions by which:

3503

(a) An item of tangible personal property is or is to be	3504
repaired, except property, the purchase of which would be exempt	3505
from the tax imposed by section 5739.02 of the Revised Code;	3506

(b) An item of tangible personal property is or is to be	3507
installed, except property, the purchase of which would be exempt	3508
from the tax imposed by section 5739.02 of the Revised Code or	3509
property that is or is to be incorporated into and will become a	3510
part of a production, transmission, transportation, or	3511
distribution system for the delivery of a public utility service;	3512

(c) The service of washing, cleaning, waxing, polishing, or	3513
painting a motor vehicle is or is to be furnished;	3514

(d) Industrial laundry cleaning services are or are to be	3515
provided;	3516

(e) Automatic data processing, computer services, or	3517
electronic information services are or are to be provided for use	3518
in business when the true object of the transaction is the receipt	3519
by the consumer of automatic data processing, computer services,	3520
or electronic information services rather than the receipt of	3521
personal or professional services to which automatic data	3522
processing, computer services, or electronic information services	3523
are incidental or supplemental. Notwithstanding any other	3524
provision of this chapter, such transactions that occur between	3525
members of an affiliated group are not sales. An affiliated group	3526
means two or more persons related in such a way that one person	3527
owns or controls the business operation of another member of the	3528
group. In the case of corporations with stock, one corporation	3529
owns or controls another if it owns more than fifty per cent of	3530
the other corporation's common stock with voting rights.	3531

(f) Telecommunications service is provided that originates	3532
or terminates in this state and is charged in the records of the	3533
telecommunications service vendor to the consumer's telephone	3534
number or account in this state, or that both originates and	3535
terminates in this state; but does not include transactions by	3536
which telecommunications service is paid for by using a prepaid	3537
authorization number or prepaid telephone calling card, or by	3538
which local telecommunications service is obtained from a	3539
coin-operated telephone and paid for by using coin;	3540

(g) Landscaping and lawn care service is or is to be	3541
provided;	3542

(h) Private investigation and security service is or is to	3543
be provided;	3544

(i) Information services or tangible personal property is	3545
provided or ordered by means of a nine hundred telephone call;	3546

(j) Building maintenance and janitorial service is or is to	3547
be provided;	3548

(k) Employment service is or is to be provided;

3549

(l) Employment placement service is or is to be provided;

3550

(m) Exterminating service is or is to be provided;

3551

(n) Physical fitness facility service is or is to be	3552
provided;	3553

(o) Recreation and sports club service is or is to be	3554
provided.	3555

(4) All transactions by which printed, imprinted,	3556
overprinted, lithographic, multilithic, blueprinted, photostatic,	3557
or other productions or reproductions of written or graphic matter	3558
are or are to be furnished or transferred;	3559

(5) The production or fabrication of tangible personal	3560
property for a consideration for consumers who furnish either	3561
directly or indirectly the materials used in the production of	3562
fabrication work; and include the furnishing, preparing, or	3563
serving for a consideration of any tangible personal property	3564
consumed on the premises of the person furnishing, preparing, or	3565
serving such tangible personal property. Except as provided in	3566
section 5739.03 of the Revised Code, a construction contract	3567
pursuant to which tangible personal property is or is to be	3568
incorporated into a structure or improvement on and becoming a	3569
part of real property is not a sale of such tangible personal	3570
property. The construction contractor is the consumer of such	3571
tangible personal property, provided that the sale and	3572
installation of carpeting, the sale and installation of	3573
agricultural land tile, the sale and erection or installation of	3574
portable grain bins, or the provision of landscaping and lawn care	3575
service and the transfer of property as part of such service is	3576
never a construction contract. The transfer of copyrighted motion	3577
picture films for exhibition purposes is not a sale, except such	3578
films as are used solely for advertising purposes. Other than as	3579
provided in this section, "sale" and "selling" do not include	3580
professional, insurance, or personal service transactions that	3581
involve the transfer of tangible personal property as an	3582
inconsequential element, for which no separate charges are made,	3583
or leases or rentals between members of an affiliated group.	3584

As used in division (B)(5) of this section:

3585

(a) "Agricultural land tile" means fired clay or concrete	3586
tile, or flexible or rigid perforated plastic pipe or tubing,	3587
incorporated or to be incorporated into a subsurface drainage	3588
system appurtenant to land used or to be used directly in	3589
production by farming, agriculture, horticulture, or floriculture.	3590
The term does not include such materials when they are or are to	3591
be incorporated into a drainage system appurtenant to a building	3592
or structure even if the building or structure is used or to be	3593
used in such production.	3594

(b) "Portable grain bin" means a structure that is used or	3595
to be used by a person engaged in farming or agriculture to	3596
shelter the person's grain and that is designed to be disassembled	3597
without significant damage to its component parts.	3598

(6) All transactions in which all of the shares of stock of	3599
a closely held corporation are transferred, if the corporation is	3600
not engaging in business and its entire assets consist of boats,	3601
planes, motor vehicles, or other tangible personal property	3602
operated primarily for the use and enjoyment of the shareholders;	3603

(7) All transactions in which a warranty, maintenance or	3604
service contract, or similar agreement by which the vendor of the	3605
warranty, contract, or agreement agrees to repair or maintain the	3606
tangible personal property of the consumer is or is to be	3607
provided;	3608

(8) All transactions by which a prepaid authorization number	3609
or a prepaid telephone calling card is or is to be transferred.	3610

(C) "Vendor" means the person providing the service or by	3611
whom the transfer effected or license given by a sale is or is to	3612
be made or given and, for sales described in division (B)(3)(i) of	3613
this section, the telecommunications service vendor that provides	3614
the nine hundred telephone service; if two or more persons are	3615
engaged in business at the same place of business under a single	3616
trade name in which all collections on account of sales by each	3617
are made, such persons shall constitute a single vendor.	3618

Physicians, dentists, hospitals, and veterinarians who are	3619
engaged in selling tangible personal property as received from	3620
others, such as eyeglasses, mouthwashes, dentifrices, or similar	3621
articles, are vendors. Veterinarians who are engaged in	3622
transferring to others for a consideration drugs, the dispensing	3623
of which does not require an order of a licensed veterinarian or	3624
physician under federal law, are vendors.	3625

(D)(1) "Consumer" means the person for whom the service is	3626
provided, to whom the transfer effected or license given by a sale	3627
is or is to be made or given, to whom the service described in	3628
division (B)(3)(f) or (i) of this section is charged, or to whom	3629
the admission is granted.	3630

(2) Physicians, dentists, hospitals, and blood banks	3631
operated by nonprofit institutions and persons licensed to	3632
practice veterinary medicine, surgery, and dentistry are consumers	3633
of all tangible personal property and services purchased by them	3634
in connection with the practice of medicine, dentistry, the	3635
rendition of hospital or blood bank service, or the practice of	3636
veterinary medicine, surgery, and dentistry. In addition to being	3637
consumers of drugs administered by them or by their assistants	3638
according to their direction, veterinarians also are consumers of	3639
drugs that under federal law may be dispensed only by or upon the	3640
order of a licensed veterinarian or physician, when transferred by	3641
them to others for a consideration to provide treatment to animals	3642
as directed by the veterinarian.	3643

(3) A person who performs a facility management, or similar	3644
service contract for a contractee is a consumer of all tangible	3645
personal property and services purchased for use in connection	3646
with the performance of such contract, regardless of whether title	3647
to any such property vests in the contractee. The purchase of	3648
such property and services is not subject to the exception for	3649
resale under division (E)(1) of this section.	3650

(4)(a) In the case of a person who purchases printed matter	3651
for the purpose of distributing it or having it distributed to the	3652
public or to a designated segment of the public, free of charge,	3653
that person is the consumer of that printed matter, and the	3654
purchase of that printed matter for that purpose is a sale.	3655

(b) In the case of a person who produces, rather than	3656
purchases, printed matter for the purpose of distributing it or	3657
having it distributed to the public or to a designated segment of	3658
the public, free of charge, that person is the consumer of all	3659
tangible personal property and services purchased for use or	3660
consumption in the production of that printed matter. That person	3661
is not entitled to claim exception under division (E)(8) of this	3662
section for any material incorporated into the printed matter or	3663
any equipment, supplies, or services primarily used to produce the	3664
printed matter.	3665

(c) The distribution of printed matter to the public or to a	3666
designated segment of the public, free of charge, is not a sale to	3667
the members of the public to whom the printed matter is	3668
distributed or to any persons who purchase space in the printed	3669
matter for advertising or other purposes.	3670

(5) A person who makes sales of any of the services listed	3671
in division (B)(3) of this section is the consumer of any tangible	3672
personal property used in performing the service. The purchase of	3673
that property is not subject to the resale exception under	3674
division (E)(1) of this section.	3675

(6) A member of an affiliated group that purchases tangible	3676
personal property for lease or rental to another member of the	3677
same affiliated group is the consumer of any property purchased	3678
for that lease or rental and is not entitled to claim a resale	3679
exception on that purchase. The consumer may claim any exception	3680
or exemption that would be available to the other member of the	3681
affiliated group to whom the property is leased or rented if the	3682
other member had made the purchase of the property.	3683

(E) "Retail sale" and "sales at retail" include all sales	3684
except those in which the purpose of the consumer is:	3685

(1) To resell the thing transferred or benefit of the	3686
service provided, by a person engaging in business, in the form in	3687
which the same is, or is to be, received by the person;	3688

(2) To incorporate the thing transferred as a material or a	3689
part, into tangible personal property to be produced for sale by	3690
manufacturing, assembling, processing, or refining, or to use or	3691
consume the thing transferred directly in producing a product for	3692
sale by mining, including without limitation the extraction from	3693
the earth of all substances that are classed geologically as	3694
minerals, production of crude oil and natural gas, farming,	3695
agriculture, horticulture, or floriculture, and persons engaged in	3696
rendering farming, agricultural, horticultural, or floricultural	3697
services, and services in the exploration for, and production of,	3698
crude oil and natural gas, for others are deemed engaged directly	3699
in farming, agriculture, horticulture, and floriculture, or	3700
exploration for, and production of, crude oil and natural gas;	3701
directly in the rendition of a public utility service, except that	3702
the sales tax levied by section 5739.02 of the Revised Code shall	3703
be collected upon all meals, drinks, and food for human	3704
consumption sold upon Pullman and railroad coaches. This	3705
paragraph does not exempt or except from "retail sale" or "sales	3706
at retail" the sale of tangible personal property that is to be	3707
incorporated into a structure or improvement to real property.	3708

(3) To hold the thing transferred as security for the	3709
performance of an obligation of the vendor;	3710

(4) To use or consume the thing transferred in the process	3711
of reclamation as required by Chapters 1513. and 1514. of the	3712
Revised Code;	3713

(5) To resell, hold, use, or consume the thing transferred	3714
as evidence of a contract of insurance;	3715

(6) To use or consume the thing directly in commercial	3716
fishing;	3717

(7) To incorporate the thing transferred as a material or a	3718
part into, or to use or consume the thing transferred directly in	3719
the production of, magazines distributed as controlled circulation	3720
publications;	3721

(8) To use or consume the thing transferred in the	3722
production and preparation in suitable condition for market and	3723
sale of printed, imprinted, overprinted, lithographic,	3724
multilithic, blueprinted, photostatic, or other productions or	3725
reproductions of written or graphic matter;	3726

(9) To use the thing transferred, as described in section	3727
5739.011 of the Revised Code, primarily in a manufacturing	3728
operation to produce tangible personal property for sale;	3729

(10) To use the benefit of a warranty, maintenance or	3730
service contract, or similar agreement, as defined in division	3731
(B)(7) of this section, to repair or maintain tangible personal	3732
property, if all of the property that is the subject of the	3733
warranty, contract, or agreement would be exempt on its purchase	3734
from the tax imposed by section 5739.02 of the Revised Code;	3735

(11) To use the thing transferred as qualified research and	3736
development equipment;	3737

(12) To use or consume the thing transferred primarily in	3738
storing, transporting, mailing, or otherwise handling purchased	3739
sales inventory in a warehouse, distribution center, or similar	3740
facility when the inventory is primarily distributed outside this	3741
state to retail stores of the person who owns or controls the	3742
warehouse, distribution center, or similar facility, to retail	3743
stores of an affiliated group of which that person is a member, or	3744
by means of direct marketing. Division (E)(12) of this section	3745
does not apply to motor vehicles registered for operation on the	3746
public highways. As used in division (E)(12) of this section,	3747
"affiliated group" has the same meaning as in division (B)(3)(e)	3748
of this section and "direct marketing" has the same meaning as in	3749
division (B)(37)(36) of section 5739.02 of the Revised Code.	3750

(13) To use or consume the thing transferred to fulfill a	3751
contractual obligation incurred by a warrantor pursuant to a	3752
warranty provided as a part of the price of the tangible personal	3753
property sold or by a vendor of a warranty, maintenance or service	3754
contract, or similar agreement the provision of which is defined	3755
as a sale under division (B)(7) of this section;	3756

(14) To use or consume the thing transferred in the	3757
production of a newspaper for distribution to the public;	3758

(15) To use tangible personal property to perform a service	3759
listed in division (B)(3) of this section, if the property is or	3760
is to be permanently transferred to the consumer of the service as	3761
an integral part of the performance of the service.	3762

As used in division (E) of this section, "thing" includes all	3763
transactions included in divisions (B)(3)(a), (b), and (e) of this	3764
section.	3765

Sales conducted through a coin-operated device that activates	3766
vacuum equipment or equipment that dispenses water, whether or not	3767
in combination with soap or other cleaning agents or wax, to the	3768
consumer for the consumer's use on the premises in washing,	3769
cleaning, or waxing a motor vehicle, provided no other personal	3770
property or personal service is provided as part of the	3771
transaction, are not retail sales or sales at retail.	3772

(F) "Business" includes any activity engaged in by any	3773
person with the object of gain, benefit, or advantage, either	3774
direct or indirect. "Business" does not include the activity of a	3775
person in managing and investing the person's own funds.	3776

(G) "Engaging in business" means commencing, conducting, or	3777
continuing in business, and liquidating a business when the	3778
liquidator thereof holds itself out to the public as conducting	3779
such business. Making a casual sale is not engaging in business.	3780

(H)(1) "Price," except as provided in divisions (H)(2), (3),	3781
and (3)(4) of this section, means the aggregate value in money of	3782
anything paid or delivered, or promised to be paid or delivered,	3783
in the complete performance of a retail sale, without any	3784
deduction on account of the cost of the property sold, cost of	3785
materials used, labor or service cost, interest, discount paid or	3786
allowed after the sale is consummated, or any other expense. If	3787
the retail sale consists of the rental or lease of tangible	3788
personal property, "price" means the aggregate value in money of	3789
anything paid or delivered, or promised to be paid or delivered,	3790
in the complete performance of the rental or lease, without any	3791
deduction for tax, interest, labor or service charge, damage	3792
liability waiver, termination or damage charge, discount paid or	3793
allowed after the lease is consummated, or any other expense. The	3794
sales tax shall be calculated and collected by the lessor on each	3795
payment made by the lessee. Price does not include the	3796
consideration received as a deposit refundable to the consumer	3797
upon return of a beverage container, the consideration received as	3798
a deposit on a carton or case that is used for such returnable	3799
containers, or the consideration received as a refundable security	3800
deposit for the use of tangible personal property to the extent	3801
that it actually is refunded, if the consideration for such	3802
refundable deposit is separately stated from the consideration	3803
received or to be received for the tangible personal property	3804
transferred in the retail sale. Such separation must appear in	3805
the sales agreement or on the initial invoice or initial billing	3806
rendered by the vendor to the consumer. Price is the amount	3807
received inclusive of the tax, provided the vendor establishes to	3808
the satisfaction of the tax commissioner that the tax was added to	3809
the price. When the price includes both a charge for tangible	3810
personal property and a charge for providing a service and the	3811
sale of the property and the charge for the service are separately	3812
taxable, or have a separately determinable tax status, the price	3813
shall be separately stated for each such charge so the tax can be	3814
correctly computed and charged.	3815

The tax collected by the vendor from the consumer under this	3816
chapter is not part of the price, but is a tax collection for the	3817
benefit of the state and of counties levying an additional sales	3818
tax pursuant to section 5739.021 or 5739.026 of the Revised Code	3819
and of transit authorities levying an additional sales tax	3820
pursuant to section 5739.023 of the Revised Code. Except for the	3821
discount authorized in section 5739.12 of the Revised Code, no	3822
person other than the state or such a county or transit authority	3823
shall derive any benefit from the collection or payment of such	3824
tax.	3825

(2) In the case of a sale of any new motor vehicle by a new	3826
motor vehicle dealer, as defined in section 4517.01 of the Revised	3827
Code, in which another motor vehicle is accepted by the dealer as	3828
part of the consideration received, "price" has the same meaning	3829
as in division (H)(1) of this section, reduced by the credit	3830
afforded the consumer by the dealer for the motor vehicle received	3831
in trade.	3832

(3) In the case of a sale of any watercraft or outboard	3833
motor by a watercraft dealer licensed in accordance with section	3834
1547.543 of the Revised Code, in which another watercraft,	3835
watercraft and trailer, or outboard motor is accepted by the	3836
dealer as part of the consideration received, "price" has the same	3837
meaning as in division (H)(1) of this section, reduced by the	3838
credit afforded the consumer by the dealer for the watercraft,	3839
watercraft and trailer, or outboard motor received in trade. As	3840
used in division (H)(3) of this section, "watercraft" includes an	3841
outdrive unit attached to the watercraft.	3842

(4) For sales, other than leases or rentals, of tangible	3843
personal property sold by one member of an affiliated group to	3844
another member of the same affiliated group:	3845

(a) If the selling member of the affiliated group purchased	3846
the personal property being sold in the same form in which the	3847
purchasing member is receiving it, "price" means the greater of	3848
the amount the selling member paid to its supplier to acquire the	3849
property and the amount charged by the selling member to the	3850
purchasing member.	3851

(b) If the selling member of the affiliated group produced	3852
the personal property being sold to the purchasing member by	3853
manufacturing, assembling, or refining, "price" means the greater	3854
of the amount the selling member's produced cost of the property	3855
or the amount charged by the selling member to the purchasing	3856
member.	3857

(I) "Receipts" means the total amount of the prices of the	3858
sales of vendors, provided that cash discounts allowed and taken	3859
on sales at the time they are consummated are not included, minus	3860
any amount deducted as a bad debt pursuant to section 5739.121 of	3861
the Revised Code. "Receipts" does not include the sale price of	3862
property returned or services rejected by consumers when the full	3863
sale price and tax are refunded either in cash or by credit.	3864

(J) "Place of business" means any location at which a person	3865
engages in business.	3866

(K) "Premises" includes any real property or portion thereof	3867
upon which any person engages in selling tangible personal	3868
property at retail or making retail sales and also includes any	3869
real property or portion thereof designated for, or devoted to,	3870
use in conjunction with the business engaged in by such person.	3871

(L) "Casual sale" means a sale of an item of tangible	3872
personal property that was obtained by the person making the	3873
sale, through purchase or otherwise, for the person's own use in	3874
this state and was previously subject to any state's taxing	3875
jurisdiction on its sale or use, and includes such items acquired	3876
for the seller's use that are sold by an auctioneer employed	3877
directly by the person for such purpose, provided the location of	3878
such sales is not the auctioneer's permanent place of business. As	3879
used in this division, "permanent place of business" includes any	3880
location where such auctioneer has conducted more than two	3881
auctions during the year.	3882

(M) "Hotel" means every establishment kept, used,	3883
maintained, advertised, or held out to the public to be a place	3884
where sleeping accommodations are offered to guests, in which five	3885
or more rooms are used for the accommodation of such guests,	3886
whether the rooms are in one or several structures.	3887

(N) "Transient guests" means persons occupying a room or	3888
rooms for sleeping accommodations for less than thirty consecutive	3889
days.	3890

(O) "Making retail sales" means the effecting of	3891
transactions wherein one party is obligated to pay the price and	3892
the other party is obligated to provide a service or to transfer	3893
title to or possession of the item sold. "Making retail sales"	3894
does not include the preliminary acts of promoting or soliciting	3895
the retail sales, other than the distribution of printed matter	3896
which displays or describes and prices the item offered for sale,	3897
nor does it include delivery of a predetermined quantity of	3898
tangible personal property or transportation of property or	3899
personnel to or from a place where a service is performed,	3900
regardless of whether the vendor is a delivery vendor.	3901

(P) "Used directly in the rendition of a public utility	3902
service" means that property which is to be incorporated into and	3903
will become a part of the consumer's production, transmission,	3904
transportation, or distribution system and that retains its	3905
classification as tangible personal property after such	3906
incorporation; fuel or power used in the production, transmission,	3907
transportation, or distribution system; and tangible personal	3908
property used in the repair and maintenance of the production,	3909
transmission, transportation, or distribution system, including	3910
only such motor vehicles as are specially designed and equipped	3911
for such use. Tangible personal property and services used	3912
primarily in providing highway transportation for hire are not	3913
used in providing a public utility service as defined in this	3914
division.	3915

(Q) "Refining" means removing or separating a desirable	3916
product from raw or contaminated materials by distillation or	3917
physical, mechanical, or chemical processes.	3918

(R) "Assembly" and "assembling" mean attaching or fitting	3919
together parts to form a product, but do not include packaging a	3920
product.	3921

(S) "Manufacturing operation" means a process in which	3922
materials are changed, converted, or transformed into a different	3923
state or form from which they previously existed and includes	3924
refining materials, assembling parts, and preparing raw materials	3925
and parts by mixing, measuring, blending, or otherwise committing	3926
such materials or parts to the manufacturing process.	3927
"Manufacturing operation" does not include packaging.	3928

(T) "Fiscal officer" means, with respect to a regional	3929
transit authority, the secretary-treasurer thereof, and with	3930
respect to a county that is a transit authority, the fiscal	3931
officer of the county transit board if one is appointed pursuant	3932
to section 306.03 of the Revised Code or the county auditor if the	3933
board of county commissioners operates the county transit system.	3934

(U) "Transit authority" means a regional transit authority	3935
created pursuant to section 306.31 of the Revised Code or a county	3936
in which a county transit system is created pursuant to section	3937
306.01 of the Revised Code. For the purposes of this chapter, a	3938
transit authority must extend to at least the entire area of a	3939
single county. A transit authority that includes territory in	3940
more than one county must include all the area of the most	3941
populous county that is a part of such transit authority. County	3942
population shall be measured by the most recent census taken by	3943
the United States census bureau.	3944

(V) "Legislative authority" means, with respect to a	3945
regional transit authority, the board of trustees thereof, and	3946
with respect to a county that is a transit authority, the board	3947
of county commissioners.	3948

(W) "Territory of the transit authority" means all of the	3949
area included within the territorial boundaries of a transit	3950
authority as they from time to time exist. Such territorial	3951
boundaries must at all times include all the area of a single	3952
county or all the area of the most populous county that is a part	3953
of such transit authority. County population shall be measured by	3954
the most recent census taken by the United States census bureau.	3955

(X) "Providing a service" means providing or furnishing	3956
anything described in division (B)(3) of this section for	3957
consideration.	3958

(Y)(1)(a) "Automatic data processing" means processing of	3959
others' data, including keypunching or similar data entry services	3960
together with verification thereof, or providing access to	3961
computer equipment for the purpose of processing data.	3962

(b) "Computer services" means providing services consisting	3963
of specifying computer hardware configurations and evaluating	3964
technical processing characteristics, computer programming, and	3965
training of computer programmers and operators, provided in	3966
conjunction with and to support the sale, lease, or operation of	3967
taxable computer equipment or systems.	3968

(c) "Electronic information services" means providing access	3969
to computer equipment by means of telecommunications equipment for	3970
the purpose of either of the following:	3971

(i) Examining or acquiring data stored in or accessible to	3972
the computer equipment;	3973

(ii) Placing data into the computer equipment to be	3974
retrieved by designated recipients with access to the computer	3975
equipment.	3976

(d) "Automatic data processing, computer services, or	3977
electronic information services" shall not include personal or	3978
professional services.	3979

(2) As used in divisions (B)(3)(e) and (Y)(1) of this	3980
section, "personal and professional services" means all services	3981
other than automatic data processing, computer services, or	3982
electronic information services, including but not limited to:	3983

(a) Accounting and legal services such as advice on tax	3984
matters, asset management, budgetary matters, quality control,	3985
information security, and auditing and any other situation where	3986
the service provider receives data or information and studies,	3987
alters, analyzes, interprets, or adjusts such material;	3988

(b) Analyzing business policies and procedures;

3989

(c) Identifying management information needs;

3990

(d) Feasibility studies, including economic and technical	3991
analysis of existing or potential computer hardware or software	3992
needs and alternatives;	3993

(e) Designing policies, procedures, and custom software for	3994
collecting business information, and determining how data should	3995
be summarized, sequenced, formatted, processed, controlled, and	3996
reported so that it will be meaningful to management;	3997

(f) Developing policies and procedures that document how	3998
business events and transactions are to be authorized, executed,	3999
and controlled;	4000

(g) Testing of business procedures;

4001

(h) Training personnel in business procedure applications;

4002

(i) Providing credit information to users of such	4003
information by a consumer reporting agency, as defined in the	4004
"Fair Credit Reporting Act," 84 Stat. 1114, 1129 (1970), 15 U.S.C.	4005
1681a(f), or as hereafter amended, including but not limited to	4006
gathering, organizing, analyzing, recording, and furnishing such	4007
information by any oral, written, graphic, or electronic medium;	4008

(j) Providing debt collection services by any oral, written,	4009
graphic, or electronic means.	4010

The services listed in divisions (Y)(2)(a) to (j) of this	4011
section are not automatic data processing or computer services.	4012

(Z) "Highway transportation for hire" means the	4013
transportation of personal property belonging to others for	4014
consideration by any of the following:	4015

(1) The holder of a permit or certificate issued by this	4016
state or the United States authorizing the holder to engage in	4017
transportation of personal property belonging to others for	4018
consideration over or on highways, roadways, streets, or any	4019
similar public thoroughfare;	4020

(2) A person who engages in the transportation of personal	4021
property belonging to others for consideration over or on	4022
highways, roadways, streets, or any similar public thoroughfare	4023
but who could not have engaged in such transportation on December	4024
11, 1985, unless the person was the holder of a permit or	4025
certificate of the types described in division (Z)(1) of this	4026
section;	4027

(3) A person who leases a motor vehicle to and operates it	4028
for a person described by division (Z)(1) or (2) of this section.	4029

"Highway transportation for hire" does not include	4030
transportation of tangible personal property by one member of an	4031
affiliated group for another member of the same affiliated group.	4032

(AA) "Telecommunications service" means the transmission of	4033
any interactive, two-way electromagnetic communications, including	4034
voice, image, data, and information, through the use of any medium	4035
such as wires, cables, microwaves, cellular radio, radio waves,	4036
light waves, or any combination of those or similar media.	4037
"Telecommunications service" includes message toll service even	4038
though the vendor provides the message toll service by means of	4039
wide area transmission type service or private communications	4040
service purchased from another telecommunications service	4041
provider, but does not include any of the following:	4042

(1) Sales of incoming or outgoing wide area transmission	4043
service or wide area transmission type service, including eight	4044
hundred or eight-hundred-type service, to the person contracting	4045
for the receipt of that service;	4046

(2) Sales of private communications service to the person	4047
contracting for the receipt of that service that entitles the	4048
purchaser to exclusive or priority use of a communications channel	4049
or group of channels between exchanges;	4050

(3) Sales of telecommunications service by companies subject	4051
to the excise tax imposed by Chapter 5727. of the Revised Code;	4052

(4) Sales of telecommunications service to a provider of	4053
telecommunications service, including access services, for use in	4054
providing telecommunications service;	4055

(5) Value-added nonvoice services in which computer	4056
processing applications are used to act on the form, content,	4057
code, or protocol of the information to be transmitted;	4058

(6) Transmission of interactive video programming by a cable	4059
television system as defined in section 505.90 of the Revised	4060
Code.	4061

(BB) "Industrial laundry cleaning services" means removing	4062
soil or dirt from or supplying towels, linens, or articles of	4063
clothing that belong to others and are used in a trade or	4064
business.	4065

(CC) "Magazines distributed as controlled circulation	4066
publications" means magazines containing at least twenty-four	4067
pages, at least twenty-five per cent editorial content, issued at	4068
regular intervals four or more times a year, and circulated	4069
without charge to the recipient, provided that such magazines are	4070
not owned or controlled by individuals or business concerns which	4071
conduct such publications as an auxiliary to, and essentially for	4072
the advancement of the main business or calling of, those who own	4073
or control them.	4074

(DD) "Landscaping and lawn care service" means the services	4075
of planting, seeding, sodding, removing, cutting, trimming,	4076
pruning, mulching, aerating, applying chemicals, watering,	4077
fertilizing, and providing similar services to establish, promote,	4078
or control the growth of trees, shrubs, flowers, grass, ground	4079
cover, and other flora, or otherwise maintaining a lawn or	4080
landscape grown or maintained by the owner for ornamentation or	4081
other nonagricultural purpose. However, "landscaping and lawn	4082
care service" does not include the providing of such services by a	4083
person who has less than five thousand dollars in sales of such	4084
services during the calendar year.	4085

(EE) "Private investigation and security service" means the	4086
performance of any activity for which the provider of such service	4087
is required to be licensed pursuant to Chapter 4749. of the	4088
Revised Code, or would be required to be so licensed in performing	4089
such services in this state, and also includes the services of	4090
conducting polygraph examinations and of monitoring or overseeing	4091
the activities on or in, or the condition of, the consumer's home,	4092
business, or other facility by means of electronic or similar	4093
monitoring devices. "Private investigation and security service"	4094
does not include special duty services provided by off-duty police	4095
officers, deputy sheriffs, and other peace officers regularly	4096
employed by the state or a political subdivision.	4097

(FF) "Information services" means providing conversation,	4098
giving consultation or advice, playing or making a voice or other	4099
recording, making or keeping a record of the number of callers,	4100
and any other service provided to a consumer by means of a nine	4101
hundred telephone call, except when the nine hundred telephone	4102
call is the means by which the consumer makes a contribution to a	4103
recognized charity.	4104

(GG) "Research and development" means designing, creating,	4105
or formulating new or enhanced products, equipment, or	4106
manufacturing processes, and conducting scientific or	4107
technological inquiry and experimentation in the physical sciences	4108
with the goal of increasing scientific knowledge which may reveal	4109
the bases for new or enhanced products, equipment, or	4110
manufacturing processes.	4111

(HH) "Qualified research and development equipment" means	4112
capitalized tangible personal property, and leased personal	4113
property that would be capitalized if purchased, used by a person	4114
primarily to perform research and development. Tangible personal	4115
property primarily used in testing, as defined in division (A)(4)	4116
of section 5739.011 of the Revised Code, or used for recording or	4117
storing test results, is not qualified research and development	4118
equipment unless such property is primarily used by the consumer	4119
in testing the product, equipment, or manufacturing process being	4120
created, designed, or formulated by the consumer in the research	4121
and development activity or in recording or storing such test	4122
results.	4123

(II) "Building maintenance and janitorial service" means	4124
cleaning the interior or exterior of a building and any tangible	4125
personal property located therein or thereon, including any	4126
services incidental to such cleaning for which no separate charge	4127
is made. However, "building maintenance and janitorial service"	4128
does not include the providing of such service by a person who has	4129
less than five thousand dollars in sales of such service during	4130
the calendar year.	4131

(JJ) "Employment service" means providing or supplying	4132
personnel, on a temporary or long-term basis, to perform work or	4133
labor under the supervision or control of another, when the	4134
personnel so supplied receive their wages, salary, or other	4135
compensation from the provider of the service. "Employment	4136
service" does not include:	4137

(1) Acting as a contractor or subcontractor, where the	4138
personnel performing the work are not under the direct control of	4139
the purchaser.	4140

(2) Medical and health care services.

4141

(3) Supplying personnel to a purchaser pursuant to a	4142
contract of at least one year between the service provider and the	4143
purchaser that specifies that each employee covered under the	4144
contract is assigned to the purchaser on a permanent basis.	4145

(4) Transactions between members of an affiliated group, as	4146
defined in division (B)(3)(e) of this section.	4147

(KK) "Employment placement service" means locating or	4148
finding employment for a person or finding or locating an employee	4149
to fill an available position.	4150

(LL) "Exterminating service" means eradicating or attempting	4151
to eradicate vermin infestations from a building or structure, or	4152
the area surrounding a building or structure, and includes	4153
activities to inspect, detect, or prevent vermin infestation of a	4154
building or structure.	4155

(MM) "Physical fitness facility service" means all	4156
transactions by which a membership is granted, maintained, or	4157
renewed, including initiation fees, membership dues, renewal fees,	4158
monthly minimum fees, and other similar fees and dues, by a	4159
physical fitness facility such as an athletic club, health spa, or	4160
gymnasium, which entitles the member to use the facility for	4161
physical exercise.	4162

(NN) "Recreation and sports club service" means all	4163
transactions by which a membership is granted, maintained, or	4164
renewed, including initiation fees, membership dues, renewal fees,	4165
monthly minimum fees, and other similar fees and dues, by a	4166
recreation and sports club, which entitles the member to use the	4167
facilities of the organization. "Recreation and sports club"	4168
means an organization that has ownership of, or controls or leases	4169
on a continuing, long-term basis, the facilities used by its	4170
members and includes an aviation club, gun or shooting club, yacht	4171
club, card club, swimming club, tennis club, golf club, country	4172
club, riding club, amateur sports club, or similar organization.	4173

(OO) "Livestock" means farm animals commonly raised for food	4174
or food production, and includes but is not limited to cattle,	4175
sheep, goats, swine, and poultry. "Livestock" does not include	4176
invertebrates, fish, amphibians, reptiles, horses, domestic pets,	4177
animals for use in laboratories or for exhibition, or other	4178
animals not commonly raised for food or food production.	4179

(PP) "Livestock structure" means a building or structure	4180
used exclusively for the housing, raising, feeding, or sheltering	4181
of livestock, and includes feed storage or handling structures and	4182
structures for livestock waste handling.	4183

(QQ) "Horticulture" means the growing, cultivation, and	4184
production of flowers, fruits, herbs, vegetables, sod, mushrooms,	4185
and nursery stock. As used in this division, "nursery stock" has	4186
the same meaning as in section 927.51 of the Revised Code.	4187

(RR) "Horticulture structure" means a building or structure	4188
used exclusively for the commercial growing, raising, or	4189
overwintering of horticultural products, and includes the area	4190
used for stocking, storing, and packing horticultural products	4191
when done in conjunction with the production of those products.	4192

(SS) "Newspaper" means an unbound publication bearing a	4193
title or name that is regularly published, at least as frequently	4194
as biweekly, and distributed from a fixed place of business to the	4195
public in a specific geographic area, and that contains a	4196
substantial amount of news matter of international, national, or	4197
local events of interest to the general public.	4198

(TT) "Professional racing team" means a person that employs	4199
at least twenty full-time employees for the purpose of conducting	4200
a motor vehicle racing business for profit. The person must	4201
conduct the business with the purpose of racing one or more motor	4202
racing vehicles in at least ten competitive professional racing	4203
events each year that comprise all or part of a motor racing	4204
series sanctioned by one or more motor racing sanctioning	4205
organizations. A "motor racing vehicle" means a vehicle for which	4206
the chassis, engine, and parts are designed exclusively for motor	4207
racing, and does not include a stock or production model vehicle	4208
that may be modified for use in racing. For the purposes of this	4209
division:	4210

(1) A "competitive professional racing event" is a motor	4211
vehicle racing event sanctioned by one or more motor racing	4212
sanctioning organizations, at which aggregate cash prizes in	4213
excess of eight hundred thousand dollars are awarded to the	4214
competitors.	4215

(2) "Full-time employee" means an individual who is employed	4216
for consideration for thirty-five or more hours a week, or who	4217
renders any other standard of service generally accepted by custom	4218
or specified by contract as full-time employment.	4219

(UU)(1) "Prepaid authorization number" means a numeric or	4220
alphanumeric combination that represents a prepaid account that	4221
can be used by the account holder solely to obtain	4222
telecommunications service, and includes any renewals or increases	4223
in the prepaid account.	4224

(2) "Prepaid telephone calling card" means a tangible item	4225
that contains a prepaid authorization number that can be used	4226
solely to obtain telecommunications service, and includes any	4227
renewals or increases in the prepaid account.	4228

(VV) "Affiliated group" means two or more persons related in	4229
such a way that one person, directly or indirectly, owns or	4230
controls the business operation of another member of the group. In	4231
the case of corporations with stock, one corporation owns or	4232
controls another if it owns or controls, directly or indirectly,	4233
fifty per cent or more of the other corporation's common stock	4234
with voting rights.	4235

Sec. 5739.02.  For the purpose of providing revenue with	4236
which to meet the needs of the state, for the use of the general	4237
revenue fund of the state, for the purpose of securing a thorough	4238
and efficient system of common schools throughout the state, for	4239
the purpose of affording revenues, in addition to those from	4240
general property taxes, permitted under constitutional	4241
limitations, and from other sources, for the support of local	4242
governmental functions, and for the purpose of reimbursing the	4243
state for the expense of administering this chapter, an excise tax	4244
is hereby levied on each retail sale made in this state.	4245

(A) The tax shall be collected pursuant to the schedules in	4246
section 5739.025 of the Revised Code.	4247

The tax applies and is collectible when the sale is made,	4248
regardless of the time when the price is paid or delivered.	4249

In the case of a sale, the price of which consists in whole	4250
or in part of rentals for the use of the thing transferred, the	4251
tax, as regards such rentals, shall be measured by the	4252
installments thereof.	4253

In the case of a sale of a service defined under division	4254
(MM) or (NN) of section 5739.01 of the Revised Code, the price of	4255
which consists in whole or in part of a membership for the receipt	4256
of the benefit of the service, the tax applicable to the sale	4257
shall be measured by the installments thereof.	4258

(B) The tax does not apply to the following:

4259

(1) Sales to the state or any of its political subdivisions,	4260
or to any other state or its political subdivisions if the laws of	4261
that state exempt from taxation sales made to this state and its	4262
political subdivisions;	4263

(2) Sales of food for human consumption off the premises	4264
where sold;	4265

(3) Sales of food sold to students only in a cafeteria,	4266
dormitory, fraternity, or sorority maintained in a private,	4267
public, or parochial school, college, or university;	4268

(4) Sales of newspapers, and of magazine subscriptions	4269
shipped by second class mail, and sales or transfers of magazines	4270
distributed as controlled circulation publications;	4271

(5) The furnishing, preparing, or serving of meals without	4272
charge by an employer to an employee provided the employer records	4273
the meals as part compensation for services performed or work	4274
done;	4275

(6) Sales of motor fuel upon receipt, use, distribution, or	4276
sale of which in this state a tax is imposed by the law of this	4277
state, but this exemption shall not apply to the sale of motor	4278
fuel on which a refund of the tax is allowable under section	4279
5735.14 of the Revised Code; and the tax commissioner may deduct	4280
the amount of tax levied by this section applicable to the price	4281
of motor fuel when granting a refund of motor fuel tax pursuant to	4282
section 5735.14 of the Revised Code and shall cause the amount	4283
deducted to be paid into the general revenue fund of this state;	4284

(7) Sales of natural gas by a natural gas company, of water	4285
by a water-works company, or of steam by a heating company, if in	4286
each case the thing sold is delivered to consumers through pipes	4287
or conduits, and all sales of communications services by a	4288
telephone or telegraph company, all terms as defined in section	4289
5727.01 of the Revised Code;	4290

(8) Casual sales by a person, or auctioneer employed	4291
directly by the person to conduct such sales, except as to such	4292
sales of motor vehicles, watercraft or outboard motors required to	4293
be titled under section 1548.06 of the Revised Code, watercraft	4294
documented with the United States coast guard, snowmobiles, and	4295
all-purpose vehicles as defined in section 4519.01 of the Revised	4296
Code;	4297

(9) Sales of services or tangible personal property, other	4298
than motor vehicles, mobile homes, and manufactured homes, by	4299
churches, organizations exempt from taxation under section	4300
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit	4301
organizations operated exclusively for charitable purposes as	4302
defined in division (B)(12) of this section, provided that the	4303
number of days on which such tangible personal property or	4304
services, other than items never subject to the tax, are sold does	4305
not exceed six in any calendar year. If the number of days on	4306
which such sales are made exceeds six in any calendar year, the	4307
church or organization shall be considered to be engaged in	4308
business and all subsequent sales by it shall be subject to the	4309
tax. In counting the number of days, all sales by groups within a	4310
church or within an organization shall be considered to be sales	4311
of that church or organization, except that sales made by separate	4312
student clubs and other groups of students of a primary or	4313
secondary school, and sales made by a parent-teacher association,	4314
booster group, or similar organization that raises money to	4315
support or fund curricular or extracurricular activities of a	4316
primary or secondary school, shall not be considered to be sales	4317
of such school, and sales by each such club, group, association,	4318
or organization shall be counted separately for purposes of the	4319
six-day limitation. This division does not apply to sales by a	4320
noncommercial educational radio or television broadcasting	4321
station.	4322

(10) Sales not within the taxing power of this state under	4323
the Constitution of the United States;	4324

(11) The transportation of persons or property, unless the	4325
transportation is by a private investigation and security service;	4326

(12) Sales of tangible personal property or services to	4327
churches, to organizations exempt from taxation under section	4328
501(c)(3) of the Internal Revenue Code of 1986, and to any other	4329
nonprofit organizations operated exclusively for charitable	4330
purposes in this state, no part of the net income of which inures	4331
to the benefit of any private shareholder or individual, and no	4332
substantial part of the activities of which consists of carrying	4333
on propaganda or otherwise attempting to influence legislation;	4334
sales to offices administering one or more homes for the aged or	4335
one or more hospital facilities exempt under section 140.08 of the	4336
Revised Code; and sales to organizations described in division (D)	4337
of section 5709.12 of the Revised Code.	4338

"Charitable purposes" means the relief of poverty; the	4339
improvement of health through the alleviation of illness, disease,	4340
or injury; the operation of an organization exclusively for the	4341
provision of professional, laundry, printing, and purchasing	4342
services to hospitals or charitable institutions; the operation of	4343
a home for the aged, as defined in section 5701.13 of the Revised	4344
Code; the operation of a radio or television broadcasting station	4345
that is licensed by the federal communications commission as a	4346
noncommercial educational radio or television station; the	4347
operation of a nonprofit animal adoption service or a county	4348
humane society; the promotion of education by an institution of	4349
learning that maintains a faculty of qualified instructors,	4350
teaches regular continuous courses of study, and confers a	4351
recognized diploma upon completion of a specific curriculum; the	4352
operation of a parent-teacher association, booster group, or	4353
similar organization primarily engaged in the promotion and	4354
support of the curricular or extracurricular activities of a	4355
primary or secondary school; the operation of a community or area	4356
center in which presentations in music, dramatics, the arts, and	4357
related fields are made in order to foster public interest and	4358
education therein; the production of performances in music,	4359
dramatics, and the arts; or the promotion of education by an	4360
organization engaged in carrying on research in, or the	4361
dissemination of, scientific and technological knowledge and	4362
information primarily for the public.	4363

Nothing in this division shall be deemed to exempt sales to	4364
any organization for use in the operation or carrying on of a	4365
trade or business, or sales to a home for the aged for use in the	4366
operation of independent living facilities as defined in division	4367
(A) of section 5709.12 of the Revised Code.	4368

(13) Building and construction materials and services sold	4369
to construction contractors for incorporation into a structure or	4370
improvement to real property under a construction contract with	4371
this state or a political subdivision thereof, or with the United	4372
States government or any of its agencies; building and	4373
construction materials and services sold to construction	4374
contractors for incorporation into a structure or improvement to	4375
real property that are accepted for ownership by this state or any	4376
of its political subdivisions, or by the United States government	4377
or any of its agencies at the time of completion of such	4378
structures or improvements; building and construction materials	4379
sold to construction contractors for incorporation into a	4380
horticulture structure or livestock structure for a person engaged	4381
in the business of horticulture or producing livestock; building	4382
materials and services sold to a construction contractor for	4383
incorporation into a house of public worship or religious	4384
education, or a building used exclusively for charitable purposes	4385
under a construction contract with an organization whose purpose	4386
is as described in division (B)(12) of this section; building	4387
materials and services sold to a construction contractor for	4388
incorporation into a building under a construction contract with	4389
an organization exempt from taxation under section 501(c)(3) of	4390
the Internal Revenue Code of 1986 when the building is to be used	4391
exclusively for the organization's exempt purposes; building and	4392
construction materials sold for incorporation into the original	4393
construction of a sports facility under section 307.696 of the	4394
Revised Code; and building and construction materials and services	4395
sold to a construction contractor for incorporation into real	4396
property outside this state if such materials and services, when	4397
sold to a construction contractor in the state in which the real	4398
property is located for incorporation into real property in that	4399
state, would be exempt from a tax on sales levied by that state;	4400

(14) Sales of ships or vessels or rail rolling stock used or	4401
to be used principally in interstate or foreign commerce, and	4402
repairs, alterations, fuel, and lubricants for such ships or	4403
vessels or rail rolling stock;	4404

(15) Sales to persons engaged in any of the activities	4405
mentioned in division (E)(2) or (9) of section 5739.01 of the	4406
Revised Code, to persons engaged in making retail sales, or to	4407
persons who purchase for sale from a manufacturer tangible	4408
personal property that was produced by the manufacturer in	4409
accordance with specific designs provided by the purchaser, of	4410
packages, including material, labels, and parts for packages, and	4411
of machinery, equipment, and material for use primarily in	4412
packaging tangible personal property produced for sale, including	4413
any machinery, equipment, and supplies used to make labels or	4414
packages, to prepare packages or products for labeling, or to	4415
label packages or products, by or on the order of the person doing	4416
the packaging, or sold at retail. "Packages" includes bags,	4417
baskets, cartons, crates, boxes, cans, bottles, bindings,	4418
wrappings, and other similar devices and containers, and	4419
"packaging" means placing therein.	4420

(16) Sales of food to persons using food stamp benefits to	4421
purchase the food. As used in division (B)(16) of this section,	4422
"food" has the same meaning as in the "Food Stamp Act of 1977," 91	4423
Stat. 958, 7 U.S.C. 2012, as amended, and federal regulations	4424
adopted pursuant to that act.	4425

(17) Sales to persons engaged in farming, agriculture,	4426
horticulture, or floriculture, of tangible personal property for	4427
use or consumption directly in the production by farming,	4428
agriculture, horticulture, or floriculture of other tangible	4429
personal property for use or consumption directly in the	4430
production of tangible personal property for sale by farming,	4431
agriculture, horticulture, or floriculture; or material and parts	4432
for incorporation into any such tangible personal property for use	4433
or consumption in production; and of tangible personal property	4434
for such use or consumption in the conditioning or holding of	4435
products produced by and for such use, consumption, or sale by	4436
persons engaged in farming, agriculture, horticulture, or	4437
floriculture, except where such property is incorporated into real	4438
property;	4439

(18) Sales of drugs dispensed by a licensed pharmacist upon	4440
the order of a licensed health professional authorized to	4441
prescribe drugs to a human being, as the term "licensed health	4442
professional authorized to prescribe drugs" is defined in section	4443
4729.01 of the Revised Code; insulin as recognized in the official	4444
United States pharmacopoeia; urine and blood testing materials	4445
when used by diabetics or persons with hypoglycemia to test for	4446
glucose or acetone; hypodermic syringes and needles when used by	4447
diabetics for insulin injections; epoetin alfa when purchased for	4448
use in the treatment of persons with end-stage renal disease;	4449
hospital beds when purchased for use by persons with medical	4450
problems for medical purposes; and oxygen and oxygen-dispensing	4451
equipment when purchased for use by persons with medical problems	4452
for medical purposes;	4453

(19)(a) Sales of artificial limbs or portion thereof, breast	4454
prostheses, and other prosthetic devices for humans; braces or	4455
other devices for supporting weakened or nonfunctioning parts of	4456
the human body; crutches or other devices to aid human	4457
perambulation; and items of tangible personal property used to	4458
supplement impaired functions of the human body such as	4459
respiration, hearing, or elimination;	4460

(b) Sales of wheelchairs; items incorporated into or used in	4461
conjunction with a motor vehicle for the purpose of transporting	4462
wheelchairs, other than transportation conducted in connection	4463
with the sale or delivery of wheelchairs; and items incorporated	4464
into or used in conjunction with a motor vehicle that are	4465
specifically designed to assist a person with a disability to	4466
access or operate the motor vehicle. As used in this division,	4467
"person with a disability" means any person who has lost the use	4468
of one or both legs or one or both arms, who is blind, deaf, or	4469
disabled to the extent that the person is unable to move about	4470
without the aid of crutches or a wheelchair, or whose mobility is	4471
restricted by a permanent cardiovascular, pulmonary, or other	4472
disabling condition.	4473

(c) No exemption under this division shall be allowed for	4474
nonprescription drugs, medicines, or remedies; items or devices	4475
used to supplement vision; items or devices whose function is	4476
solely or primarily cosmetic; or physical fitness equipment. This	4477
division does not apply to sales to a physician or medical	4478
facility for use in the treatment of a patient.	4479

(20) Sales of emergency and fire protection vehicles and	4480
equipment to nonprofit organizations for use solely in providing	4481
fire protection and emergency services, including trauma care and	4482
emergency medical services, for political subdivisions of the	4483
state;	4484

(21) Sales of tangible personal property manufactured in	4485
this state, if sold by the manufacturer in this state to a	4486
retailer for use in the retail business of the retailer outside of	4487
this state and if possession is taken from the manufacturer by the	4488
purchaser within this state for the sole purpose of immediately	4489
removing the same from this state in a vehicle owned by the	4490
purchaser;	4491

(22) Sales of services provided by the state or any of its	4492
political subdivisions, agencies, instrumentalities, institutions,	4493
or authorities, or by governmental entities of the state or any of	4494
its political subdivisions, agencies, instrumentalities,	4495
institutions, or authorities;	4496

(23) Sales of motor vehicles to nonresidents of this state	4497
upon the presentation of an affidavit executed in this state by	4498
the nonresident purchaser affirming that the purchaser is a	4499
nonresident of this state, that possession of the motor vehicle is	4500
taken in this state for the sole purpose of immediately removing	4501
it from this state, that the motor vehicle will be permanently	4502
titled and registered in another state, and that the motor vehicle	4503
will not be used in this state;	4504

(24) Sales to persons engaged in the preparation of eggs for	4505
sale of tangible personal property used or consumed directly in	4506
such preparation, including such tangible personal property used	4507
for cleaning, sanitizing, preserving, grading, sorting, and	4508
classifying by size; packages, including material and parts for	4509
packages, and machinery, equipment, and material for use in	4510
packaging eggs for sale; and handling and transportation equipment	4511
and parts therefor, except motor vehicles licensed to operate on	4512
public highways, used in intraplant or interplant transfers or	4513
shipment of eggs in the process of preparation for sale, when the	4514
plant or plants within or between which such transfers or	4515
shipments occur are operated by the same person. "Packages"	4516
includes containers, cases, baskets, flats, fillers, filler flats,	4517
cartons, closure materials, labels, and labeling materials, and	4518
"packaging" means placing therein.	4519

(25)(a) Sales of water to a consumer for residential use,	4520
except the sale of bottled water, distilled water, mineral water,	4521
carbonated water, or ice;	4522

(b) Sales of water by a nonprofit corporation engaged	4523
exclusively in the treatment, distribution, and sale of water to	4524
consumers, if such water is delivered to consumers through pipes	4525
or tubing.	4526

(26) Fees charged for inspection or reinspection of motor	4527
vehicles under section 3704.14 of the Revised Code;	4528

(27) Sales to persons licensed to conduct a food service	4529
operation pursuant to section 3717.43 of the Revised Code, of	4530
tangible personal property primarily used directly for the	4531
following:	4532

(a) To prepare food for human consumption for sale;

4533

(b) To preserve food that has been or will be prepared for	4534
human consumption for sale by the food service operator, not	4535
including tangible personal property used to display food for	4536
selection by the consumer;	4537

(c) To clean tangible personal property used to prepare or	4538
serve food for human consumption for sale.	4539

(28) Sales of animals by nonprofit animal adoption services	4540
or county humane societies;	4541

(29) Sales of services to a corporation described in	4542
division (A) of section 5709.72 of the Revised Code, and sales of	4543
tangible personal property that qualifies for exemption from	4544
taxation under section 5709.72 of the Revised Code;	4545

(30) Sales and installation of agricultural land tile, as	4546
defined in division (B)(5)(a) of section 5739.01 of the Revised	4547
Code;	4548

(31) Sales and erection or installation of portable grain	4549
bins, as defined in division (B)(5)(b) of section 5739.01 of the	4550
Revised Code;	4551

(32) The sale, lease, repair, and maintenance of, parts for,	4552
or items attached to or incorporated in, motor vehicles that are	4553
primarily used for transporting tangible personal propertyto	4554
provide highway transportation for hire by a person engaged in	4555
highway transportation for hireproviding that service;	4556

(33) Sales to the state headquarters of any veterans'	4557
organization in Ohio that is either incorporated and issued a	4558
charter by the congress of the United States or is recognized by	4559
the United States veterans administration, for use by the	4560
headquarters;	4561

(34) Sales to a telecommunications service vendor of	4562
tangible personal property and services used directly and	4563
primarily in transmitting, receiving, switching, or recording any	4564
interactive, two-way electromagnetic communications, including	4565
voice, image, data, and information, through the use of any	4566
medium, including, but not limited to, poles, wires, cables,	4567
switching equipment, computers, and record storage devices and	4568
media, and component parts for the tangible personal property.	4569
The exemption provided in division (B)(34) of this section shall	4570
be in lieu of all other exceptions under division (E)(2) of	4571
section 5739.01 of the Revised Code to which a telecommunications	4572
service vendor may otherwise be entitled based upon the use of the	4573
thing purchased in providing the telecommunications service.	4574

(35) Sales of investment metal bullion and investment coins.	4575
"Investment metal bullion" means any elementary precious metal	4576
that has been put through a process of smelting or refining,	4577
including, but not limited to, gold, silver, platinum, and	4578
palladium, and which is in such state or condition that its value	4579
depends upon its content and not upon its form. "Investment metal	4580
bullion" does not include fabricated precious metal that has been	4581
processed or manufactured for one or more specific and customary	4582
industrial, professional, or artistic uses. "Investment coins"	4583
means numismatic coins or other forms of money and legal tender	4584
manufactured of gold, silver, platinum, palladium, or other metal	4585
under the laws of the United States or any foreign nation with a	4586
fair market value greater than any statutory or nominal value of	4587
such coins.	4588

(36)(a) Sales where the purpose of the consumer is to use or	4589
consume the things transferred in making retail sales and	4590
consisting of newspaper inserts, catalogues, coupons, flyers, gift	4591
certificates, or other advertising material that prices and	4592
describes tangible personal property offered for retail sale.	4593

(b) Sales to direct marketing vendors of preliminary	4594
materials such as photographs, artwork, and typesetting that will	4595
be used in printing advertising material; of printed matter that	4596
offers free merchandise or chances to win sweepstake prizes and	4597
that is mailed to potential customers with advertising material	4598
described in division (B)(36)(a) of this section; and of equipment	4599
such as telephones, computers, facsimile machines, and similar	4600
tangible personal property primarily used to accept orders for	4601
direct marketing retail sales.	4602

(c) Sales of automatic food vending machines that preserve	4603
food with a shelf life of forty-five days or less by refrigeration	4604
and dispense it to the consumer.	4605

For purposes of division (B)(36) of this section, "direct	4606
marketing" means the method of selling where consumers order	4607
tangible personal property by United States mail, delivery	4608
service, or telecommunication and the vendor delivers or ships the	4609
tangible personal property sold to the consumer from a warehouse,	4610
catalogue distribution center, or similar fulfillment facility by	4611
means of the United States mail, delivery service, or common	4612
carrier.	4613

(37) Sales to a person engaged in the business of	4614
horticulture or producing livestock of materials to be	4615
incorporated into a horticulture structure or livestock structure;	4616

(38) The sale of a motor vehicle that is used exclusively	4617
for a vanpool ridesharing arrangement to persons participating in	4618
the vanpool ridesharing arrangement when the vendor is selling the	4619
vehicle pursuant to a contract between the vendor and the	4620
department of transportation;	4621

(39) Sales of personal computers, computer monitors,	4622
computer keyboards, modems, and other peripheral computer	4623
equipment to an individual who is licensed or certified to teach	4624
in an elementary or a secondary school in this state for use by	4625
that individual in preparation for teaching elementary or	4626
secondary school students;	4627

(40) Sales to a professional racing team of any of the	4628
following:	4629

(a) Motor racing vehicles;

4630

(b) Repair services for motor racing vehicles;

4631

(c) Items of property that are attached to or incorporated	4632
in motor racing vehicles, including engines, chassis, and all	4633
other components of the vehicles, and all spare, replacement, and	4634
rebuilt parts or components of the vehicles; except not including	4635
tires, consumable fluids, paint, and accessories consisting of	4636
instrumentation sensors and related items added to the vehicle to	4637
collect and transmit data by means of telemetry and other forms of	4638
communication.	4639

(41) Sales of used manufactured homes and used mobile homes,	4640
as defined in section 5739.0210 of the Revised Code, made on or	4641
after January 1, 2000;	4642

(42) Sales of tangible personal property and services to a	4643
provider of electricity used or consumed directly and primarily in	4644
generating, transmitting, or distributing electricity for use by	4645
others, including property that is or is to be incorporated into	4646
and will become a part of the consumer's production, transmission,	4647
or distribution system and that retains its classification as	4648
tangible personal property after incorporation; fuel or power used	4649
in the production, transmission, or distribution of electricity;	4650
and tangible personal property and services used in the repair and	4651
maintenance of the production, transmission, or distribution	4652
system, including only those motor vehicles as are specially	4653
designed and equipped for such use. The exemption provided in	4654
this division shall be in lieu of all other exceptions in division	4655
(E)(2) of section 5739.01 of the Revised Code to which a provider	4656
of electricity may otherwise be entitled based on the use of the	4657
tangible personal property or service purchased in generating,	4658
transmitting, or distributing electricity.	4659

For the purpose of the proper administration of this chapter,	4660
and to prevent the evasion of the tax, it is presumed that all	4661
sales made in this state are subject to the tax until the contrary	4662
is established.	4663

As used in this section, except in division (B)(16) of this	4664
section, "food" includes cereals and cereal products, milk and	4665
milk products including ice cream, meat and meat products, fish	4666
and fish products, eggs and egg products, vegetables and vegetable	4667
products, fruits, fruit products, and pure fruit juices,	4668
condiments, sugar and sugar products, coffee and coffee	4669
substitutes, tea, and cocoa and cocoa products. It does not	4670
include: spirituous or malt liquors; soft drinks; sodas and	4671
beverages that are ordinarily dispensed at bars and soda fountains	4672
or in connection therewith, other than coffee, tea, and cocoa;	4673
root beer and root beer extracts; malt and malt extracts; mineral	4674
oils, cod liver oils, and halibut liver oil; medicines, including	4675
tonics, vitamin preparations, and other products sold primarily	4676
for their medicinal properties; and water, including mineral,	4677
bottled, and carbonated waters, and ice.	4678

(C) The levy of an excise tax on transactions by which	4679
lodging by a hotel is or is to be furnished to transient guests	4680
pursuant to this section and division (B) of section 5739.01 of	4681
the Revised Code does not prevent any of the following:	4682

(1) A municipal corporation or township from levying an	4683
excise tax for any lawful purpose not to exceed three per cent on	4684
transactions by which lodging by a hotel is or is to be furnished	4685
to transient guests in addition to the tax levied by this section.	4686
If a municipal corporation or township repeals a tax imposed under	4687
division (C)(1) of this section and a county in which the	4688
municipal corporation or township has territory has a tax imposed	4689
under division (C) of section 5739.024 of the Revised Code in	4690
effect, the municipal corporation or township may not reimpose its	4691
tax as long as that county tax remains in effect. A municipal	4692
corporation or township in which a tax is levied under division	4693
(B)(2) of section 351.021 of the Revised Code may not increase the	4694
rate of its tax levied under division (C)(1) of this section to	4695
any rate that would cause the total taxes levied under both of	4696
those divisions to exceed three per cent on any lodging	4697
transaction within the municipal corporation or township.	4698

(2) A municipal corporation or a township from levying an	4699
additional excise tax not to exceed three per cent on such	4700
transactions pursuant to division (B) of section 5739.024 of the	4701
Revised Code. Such tax is in addition to any tax imposed under	4702
division (C)(1) of this section.	4703

(3) A county from levying an excise tax pursuant to division	4704
(A) of section 5739.024 of the Revised Code.	4705

(4) A county from levying an excise tax not to exceed three	4706
per cent of such transactions pursuant to division (C) of section	4707
5739.024 of the Revised Code. Such a tax is in addition to any	4708
tax imposed under division (C)(3) of this section.	4709

(5) A convention facilities authority, as defined in	4710
division (A) of section 351.01 of the Revised Code, from levying	4711
the excise taxes provided for in division (B) of section 351.021	4712
of the Revised Code.	4713

(6) A county from levying an excise tax not to exceed one	4714
and one-half per cent of such transactions pursuant to division	4715
(D) of section 5739.024 of the Revised Code. Such tax is in	4716
addition to any tax imposed under division (C)(3) or (4) of this	4717
section.	4718

(7) A county from levying an excise tax not to exceed one	4719
and one-half per cent of such transactions pursuant to division	4720
(E) of section 5739.024 of the Revised Code. Such a tax is in	4721
addition to any tax imposed under division (C)(3), (4), or (6) of	4722
this section.	4723

(D) The levy of this tax on retail sales of recreation and	4724
sports club service shall not prevent a municipal corporation from	4725
levying any tax on recreation and sports club dues or on any	4726
income generated by recreation and sports club dues.	4727

Sec. 5741.01.  As used in this chapter:

4728

(A) "Person" includes individuals, receivers, assignees,	4729
trustees in bankruptcy, estates, firms, partnerships,	4730
associations, joint-stock companies, joint ventures, clubs,	4731
societies, corporations, business trusts, governments, and	4732
combinations of individuals of any form.	4733

(B) "Storage" means and includes any keeping or retention in	4734
this state for use or other consumption in this state.	4735

(C) "Use" means and includes the exercise of any right or	4736
power incidental to the ownership of the thing used. A thing is	4737
also "used" in this state if its consumer gives or otherwise	4738
distributes it, without charge, to recipients in this state.	4739

(D) "Purchase" means acquired or received for a	4740
consideration, whether such acquisition or receipt was effected by	4741
a transfer of title, or of possession, or of both, or a license to	4742
use or consume; whether such transfer was absolute or conditional,	4743
and by whatever means the transfer was effected; and whether the	4744
consideration was money, credit, barter, or exchange. Purchase	4745
includes production, even though the article produced was used,	4746
stored, or consumed by the producer. The transfer of copyrighted	4747
motion picture films for exhibition purposes is not a purchase,	4748
except such films as are used solely for advertising purposes.	4749
"Purchase" does not include the lease or rental of tangible	4750
personal property between members of an affiliated group, as	4751
defined in section 5739.01 of the Revised Code.	4752

(E) "Seller" means the person from whom a purchase is made,	4753
and includes every person engaged in this state or elsewhere in	4754
the business of selling tangible personal property or providing a	4755
service for storage, use, or other consumption or benefit in this	4756
state; and when, in the opinion of the tax commissioner, it is	4757
necessary for the efficient administration of this chapter, to	4758
regard any salesman, representative, peddler, or canvasser as the	4759
agent of a dealer, distributor, supervisor, or employer under whom	4760
hethe person operates, or from whom hethe person obtains	4761
tangible personal property, sold by himthe person for storage,	4762
use, or other consumption in this state, irrespective of whether	4763
or not hethe person is making such sales on histhe person's own	4764
behalf, or on behalf of such dealer, distributor, supervisor, or	4765
employer, the commissioner may regard himthe person as such	4766
agent, and may regard such dealer, distributor, supervisor, or	4767
employer as the seller. "Seller" does not include any person to	4768
the extent the person provides a communications medium, such as,	4769
but not limited to, newspapers, magazines, radio, television, or	4770
cable television, by means of which sellers solicit purchases of	4771
their goods or services.	4772

(F) "Consumer" means any person who has purchased tangible	4773
personal property or has been provided a service for storage, use,	4774
or other consumption or benefit in this state. "Consumer" does	4775
not include a person who receives, without charge, tangible	4776
personal property or a service.	4777

A person who performs a facility management or similar	4778
service contract for a contractee is a consumer of all tangible	4779
personal property and services purchased for use in connection	4780
with the performance of such contract, regardless of whether title	4781
to any such property vests in the contractee. The purchase of	4782
such property and services is not subject to the exception for	4783
resale under division (E)(1) of section 5739.01 of the Revised	4784
Code.	4785

A member of an affiliated group, as defined in division (VV)	4786
of section 5739.01 of the Revised Code, that purchases tangible	4787
personal property for lease or rental to another member of the	4788
same affiliated group is the consumer of any property purchased	4789
for that lease or rental and is not entitled to claim a resale	4790
exception on that purchase. The consumer may claim any other	4791
exception or exemption that would be available to the other member	4792
of the affiliated group to whom the property is leased or rented	4793
if the other member had made the purchase of the property.	4794

(G)(1) "Price," except in the case of watercraft, outboard	4795
motors, or new motor vehicles, or where tangible personal property	4796
being stored, used, or consumed in this state is purchased by a	4797
member of an affiliated group from another member of the same	4798
affiliated group, means the aggregate value in money of anything	4799
paid or delivered, or promised to be paid or delivered, by a	4800
consumer to a seller in the complete performance of the	4801
transaction by which tangible personal property has been purchased	4802
or a service has been provided for storage, use, or other	4803
consumption or benefit in this state, without any deduction or	4804
exclusion on account of the cost of the property sold, cost of	4805
materials used, labor or service cost, interest, discount paid or	4806
allowed after the sale is consummated, or any other expense. If	4807
the transaction consists of the rental or lease of tangible	4808
personal property, "price" means the aggregate value in money of	4809
anything paid or delivered, or promised to be paid or delivered by	4810
the lessee to the lessor, in the complete performance of the	4811
rental or lease, without any deduction or exclusion of tax,	4812
interest, labor or service charge, damage liability waiver,	4813
termination or damage charge, discount paid or allowed after the	4814
lease is consummated, or any other expense. The tax shall be	4815
calculated and collected by the lessor on each payment made by the	4816
lessee. If a consumer produces the tangible personal property	4817
used by himthe consumer, the price is the produced cost of such	4818
tangible personal property. The tax collected by the seller from	4819
the consumer under such sections is not a part of the price, but	4820
is a tax collection for the benefit of the state, and of counties	4821
levying an additional use tax pursuant to section 5741.021 or	4822
5741.023 of the Revised Code and of transit authorities levying an	4823
additional use tax pursuant to section 5741.022 of the Revised	4824
Code and, except for the discount authorized under section 5741.12	4825
of the Revised Code, no person other than the state or such a	4826
county or transit authority shall derive any benefit from the	4827
collection or payment of such tax.	4828

(2) In the case of watercraft, outboard motors, or new motor	4829
vehicles, "price" has the same meaning as in division (H) of	4830
section 5739.01 of the Revised Code.	4831

(3) In the case of a nonresident business consumer that	4832
purchases and uses tangible personal property outside this state	4833
and subsequently temporarily stores, uses, or otherwise consumes	4834
such tangible personal property in the conduct of business in this	4835
state, the consumer or the tax commissioner may determine the	4836
price based on the value of the temporary storage, use, or other	4837
consumption, in lieu of determining the price pursuant to division	4838
(G)(1) of this section. A price determination made by the	4839
consumer is subject to review and redetermination by the	4840
commissioner.	4841

(4) In the case of tangible personal property held in this	4842
state as inventory for sale or lease, and that is temporarily	4843
stored, used, or otherwise consumed in a taxable manner, the price	4844
is the value of the temporary use. A price determination made by	4845
the consumer is subject to review and redetermination by the	4846
commissioner.	4847

(5) In the case of tangible personal property originally	4848
purchased and used by the consumer outside this state, and that	4849
becomes permanently stored, used, or otherwise consumed in this	4850
state more than six months after its acquisition by the consumer,	4851
the consumer or the tax commissioner may determine the price based	4852
on the current value of such tangible personal property, in lieu	4853
of determining the price pursuant to division (G)(1) of this	4854
section. A price determination made by the consumer is subject to	4855
review and redetermination by the commissioner.	4856

(6) In the case in which tangible personal property is	4857
stored, used, or consumed in this state by a person that is a	4858
member of an affiliated group, as defined in division (VV) of	4859
section 5739.01 of the Revised Code, that was purchased from	4860
another member of the same affiliated group, "price" has the same	4861
meaning as in division (H)(4) of section 5739.01 of the Revised	4862
Code.	4863

(H) "Nexus with this state" means that the seller engages in	4864
continuous and widespread solicitation of purchases from residents	4865
of this state or otherwise purposefully directs its business	4866
activities at residents of this state.	4867

(I) "Substantial nexus with this state" means that the	4868
seller has sufficient contact with this state, in accordance with	4869
Section 8 of Article I of the Constitution of the United States,	4870
to allow the state to require the seller to collect and remit use	4871
tax on sales of tangible personal property or services made to	4872
consumers in this state. "Substantial nexus with this state"	4873
exists when the seller does any of the following:	4874

(1) Maintains a place of business within this state, whether	4875
operated by employees or agents of the seller, by a member of an	4876
affiliated group, as described in division (B)(3)(e) of section	4877
5739.01 of the Revised Code, of which the seller is a member, or	4878
by a franchisee using a trade name of the seller;	4879

(2) Regularly has employees, agents, representatives,	4880
solicitors, installers, repairmen, salesmen, or other individuals	4881
in this state for the purpose of conducting the business of the	4882
seller;	4883

(3) Uses a person in this state for the purpose of receiving	4884
or processing orders of the seller's goods or services;	4885

(4) Makes regular deliveries of tangible personal property	4886
into this state by means other than common carrier;	4887

(5) Has membership in an affiliated group, as described in	4888
division (B)(3)(e) of section 5739.01 of the Revised Code, at	4889
least one other member of which has substantial nexus with this	4890
state;	4891

(6) Owns tangible personal property that is rented or leased	4892
to a consumer in this state, or offers tangible personal property,	4893
on approval, to consumers in this state;	4894

(7) Is registered with the secretary of state to do business	4895
in this state or is registered or licensed by any state agency,	4896
board, or commission to transact business in this state or to make	4897
sales to persons in this state;	4898

(8) Has any other contact with this state that would allow	4899
this state to require the seller to collect and remit use tax	4900
under Section 8 of Article I of the Constitution of the United	4901
States.	4902

(J) "Fiscal officer" means, with respect to a regional	4903
transit authority, the secretary-treasurer thereof, and with	4904
respect to a county which is a transit authority, the fiscal	4905
officer of the county transit board appointed pursuant to section	4906
306.03 of the Revised Code or, if the board of county	4907
commissioners operates the county transit system, the county	4908
auditor.	4909

(K) "Territory of the transit authority" means all of the	4910
area included within the territorial boundaries of a transit	4911
authority as they from time to time exist. Such territorial	4912
boundaries must at all times include all the area of a single	4913
county or all the area of the most populous county which is a part	4914
of such transit authority. County population shall be measured by	4915
the most recent census taken by the United States census bureau.	4916

(L) "Transit authority" means a regional transit authority	4917
created pursuant to section 306.31 of the Revised Code or a county	4918
in which a county transit system is created pursuant to section	4919
306.01 of the Revised Code. For the purposes of this chapter, a	4920
transit authority must extend to at least the entire area of a	4921
single county. A transit authority which includes territory in	4922
more than one county must include all the area of the most	4923
populous county which is a part of such transit authority. County	4924
population shall be measured by the most recent census taken by	4925
the United States census bureau.	4926

(M) "Providing a service" has the same meaning as in	4927
division (X) of section 5739.01 of the Revised Code.	4928

(N) "Other consumption" includes receiving the benefits of a	4929
service.	4930

Sec. 5743.05.  All stamps provided for by section 5743.03 of	4931
the Revised Code, when procured by the tax commissioner, shall be	4932
immediately delivered to the treasurer of state, who shall execute	4933
a receipt therefor showing the number and aggregate face value of	4934
each denomination received by the treasurer of state and any other	4935
information that the commissioner requires to enforce the	4936
collection and distribution of all taxes imposed under section	4937
5743.024 or 5743.026 of the Revised Code, and deliver the receipt	4938
to the commissioner. The treasurer of state shall sell the stamps	4939
and, on the fifth day of each month, make a report showing all	4940
sales made during the preceding month, with the names of	4941
purchasers, the number of each denomination, the aggregate face	4942
value purchased by each, and any other information as the	4943
commissioner requires to enforce the collection and distribution	4944
of all taxes imposed under section 5743.024 of the Revised Code,	4945
and deliver it to the commissioner. The treasurer of state shall	4946
be accountable for all stamps received and unsold. The stamps	4947
shall be sold and accounted for at their face value, except the	4948
commissioner shall, by rule certified to the treasurer of state,	4949
authorize the sale of stamps and meter impressions to wholesale or	4950
retail dealers in this state, or to wholesale dealers outside this	4951
state, at a discount of not less than threeone and six-tenths	4952
eight-tenths per cent or more than ten per cent of their face	4953
value, as a commission for affixing and canceling the stamps or	4954
meter impressions.	4955

The tax commissioner, by rule certified to the treasurer of	4956
state, shall authorize the delivery of stamps and meter	4957
impressions to wholesale and retail dealers in this state and to	4958
wholesale dealers outside this state on credit when the purchaser	4959
files with the commissioner a bond to the state in the amount and	4960
in the form prescribed by the commissioner, and with surety to the	4961
satisfaction of the treasurer of state, conditioned on payment to	4962
the treasurer of state within thirty days for stamps or meter	4963
impressions delivered within that time. The tax commissioner	4964
shall limit delivery of stamps and meter impressions on credit to	4965
the period running from the first day of July of the fiscal year	4966
until the first day of the following May. Any discount allowed as	4967
a commission for affixing and canceling stamps or meter	4968
impressions shall be allowed with respect to sales of stamps and	4969
meter impressions on credit.	4970

The treasurer of state shall redeem and pay for any	4971
destroyed, unused, or spoiled tax stamps and any unused meter	4972
impressions at their net value, and he shall refund to wholesale	4973
dealers the net amount of state and county taxes paid erroneously	4974
or paid on cigarettes which have been sold in interstate or	4975
foreign commerce or which have become unsalable, and the net	4976
amount of county taxes that were paid on cigarettes that have been	4977
sold at retail or for retail sale outside a taxing county. An	4978
application for a refund of tax shall be filed with the tax	4979
commissioner, on the form prescribed by the commissioner for that	4980
purpose, within three years from the date the tax stamps are	4981
destroyed or spoiled, from the date of the erroneous payment, or	4982
from the date that cigarettes on which taxes have been paid have	4983
been sold in interstate or foreign commerce or have become	4984
unsalable. On the filing of the application the commissioner	4985
shall determine the amount of refund due payable from receipts of	4986
the state tax, and, if applicable, payable from receipts of a	4987
county tax and certify such amounts to the director of budget and	4988
management and treasurer of state for payment from the tax refund	4989
fund created by section 5703.052 of the Revised Code. When a	4990
refund is granted for payment of an illegal or erroneous	4991
assessment issued by the department, the refund shall include	4992
interest on the amount of the refund from the date of the	4993
overpayment. The interest shall be computed at the rate per annum	4994
prescribed by section 5703.47 of the Revised Code.	4995

Sec. 5747.01.  Except as otherwise expressly provided or	4996
clearly appearing from the context, any term used in this chapter	4997
has the same meaning as when used in a comparable context in the	4998
Internal Revenue Code, and all other statutes of the United States	4999
relating to federal income taxes.	5000

As used in this chapter:

5001

(A) "Adjusted gross income" or "Ohio adjusted gross income"	5002
means adjusted gross income as defined and used in the Internal	5003
Revenue Code, adjusted as provided in this section:	5004

(1) Add interest or dividends on obligations or securities	5005
of any state or of any political subdivision or authority of any	5006
state, other than this state and its subdivisions and authorities.	5007

(2) Add interest or dividends on obligations of any	5008
authority, commission, instrumentality, territory, or possession	5009
of the United States that are exempt from federal income taxes but	5010
not from state income taxes.	5011

(3) Deduct interest or dividends on obligations of the	5012
United States and its territories and possessions or of any	5013
authority, commission, or instrumentality of the United States to	5014
the extent included in federal adjusted gross income but exempt	5015
from state income taxes under the laws of the United States.	5016

(4) Deduct disability and survivor's benefits to the extent	5017
included in federal adjusted gross income.	5018

(5) Deduct benefits under Title II of the Social Security	5019
Act and tier 1 railroad retirement benefits to the extent included	5020
in federal adjusted gross income under section 86 of the Internal	5021
Revenue Code.	5022

(6) AddFor taxable years beginning before 2002 and taxable	5023
years beginning after 2003, add, in the case of a taxpayer who is	5024
a beneficiary of a trust that makes an accumulation distribution	5025
as defined in section 665 of the Internal Revenue Code, the	5026
portion, if any, of such distribution that does not exceed the	5027
undistributed net income of the trust for the three taxable years	5028
preceding the taxable year in which the distribution is made.	5029
"Undistributed net income of a trust" means the taxable income of	5030
the trust increased by (a)(i) the additions to adjusted gross	5031
income required under division (A) of this section and (ii) the	5032
personal exemptions allowed to the trust pursuant to section	5033
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	5034
deductions to adjusted gross income required under division (A) of	5035
this section, (ii) the amount of federal income taxes attributable	5036
to such income, and (iii) the amount of taxable income that has	5037
been included in the adjusted gross income of a beneficiary by	5038
reason of a prior accumulation distribution. Any undistributed	5039
net income included in the adjusted gross income of a beneficiary	5040
shall reduce the undistributed net income of the trust commencing	5041
with the earliest years of the accumulation period.	5042

(7) Deduct the amount of wages and salaries, if any, not	5043
otherwise allowable as a deduction but that would have been	5044
allowable as a deduction in computing federal adjusted gross	5045
income for the taxable year, had the targeted jobs credit allowed	5046
and determined under sections 38, 51, and 52 of the Internal	5047
Revenue Code not been in effect.	5048

(8) Deduct any interest or interest equivalent on public	5049
obligations and purchase obligations to the extent included in	5050
federal adjusted gross income.	5051

(9) Add any loss or deduct any gain resulting from the sale,	5052
exchange, or other disposition of public obligations to the extent	5053
included in federal adjusted gross income.	5054

(10) Deduct or add amounts, as provided under section	5055
5747.70 of the Revised Code, related to contributions to variable	5056
college savings program accounts made or tuition credits purchased	5057
pursuant to Chapter 3334. of the Revised Code.	5058

(11)(a) Deduct, to the extent not otherwise allowable as a	5059
deduction or exclusion in computing federal or Ohio adjusted gross	5060
income for the taxable year, the amount the taxpayer paid during	5061
the taxable year for medical care insurance and qualified	5062
long-term care insurance for the taxpayer, the taxpayer's spouse,	5063
and dependents. No deduction for medical care insurance under	5064
division (A)(11) of this section shall be allowed either to any	5065
taxpayer who is eligible to participate in any subsidized health	5066
plan maintained by any employer of the taxpayer or of the	5067
taxpayer's spouse, or to any taxpayer who is entitled to, or on	5068
application would be entitled to, benefits under part A of Title	5069
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	5070
301, as amended. For the purposes of division (A)(11)(a) of this	5071
section, "subsidized health plan" means a health plan for which	5072
the employer pays any portion of the plan's cost. The deduction	5073
allowed under division (A)(11)(a) of this section shall be the net	5074
of any related premium refunds, related premium reimbursements, or	5075
related insurance premium dividends received during the taxable	5076
year.	5077

(b) Deduct, to the extent not otherwise deducted or excluded	5078
in computing federal or Ohio adjusted gross income during the	5079
taxable year, the amount the taxpayer paid during the taxable	5080
year, not compensated for by any insurance or otherwise, for	5081
medical care of the taxpayer, the taxpayer's spouse, and	5082
dependents, to the extent the expenses exceed seven and one-half	5083
per cent of the taxpayer's federal adjusted gross income.	5084

(c) For purposes of division (A)(11) of this section,	5085
"medical care" has the meaning given in section 213 of the	5086
Internal Revenue Code, subject to the special rules, limitations,	5087
and exclusions set forth therein, and "qualified long-term care"	5088
has the same meaning given in section 7702(B)(b) of the Internal	5089
Revenue Code.	5090

(12)(a) Deduct any amount included in federal adjusted gross	5091
income solely because the amount represents a reimbursement or	5092
refund of expenses that in any year the taxpayer had deducted as	5093
an itemized deduction pursuant to section 63 of the Internal	5094
Revenue Code and applicable United States department of the	5095
treasury regulations. The deduction otherwise allowed under	5096
division (A)(12)(a) of this section shall be reduced to the extent	5097
the reimbursement is attributable to an amount the taxpayer	5098
deducted under this section in any taxable year.	5099

(b) Add any amount not otherwise included in Ohio adjusted	5100
gross income for any taxable year to the extent that the amount is	5101
attributable to the recovery during the taxable year of any amount	5102
deducted or excluded in computing federal or Ohio adjusted gross	5103
income in any taxable year.	5104

(13) Deduct any portion of the deduction described in	5105
section 1341(a)(2) of the Internal Revenue Code, for repaying	5106
previously reported income received under a claim of right, that	5107
meets both of the following requirements:	5108

(a) It is allowable for repayment of an item that was	5109
included in the taxpayer's adjusted gross income for a prior	5110
taxable year and did not qualify for a credit under division (A)	5111
or (B) of section 5747.05 of the Revised Code for that year;	5112

(b) It does not otherwise reduce the taxpayer's adjusted	5113
gross income for the current or any other taxable year.	5114

(14) Deduct an amount equal to the deposits made to, and net	5115
investment earnings of, a medical savings account during the	5116
taxable year, in accordance with section 3924.66 of the Revised	5117
Code. The deduction allowed by division (A)(14) of this section	5118
does not apply to medical savings account deposits and earnings	5119
otherwise deducted or excluded for the current or any other	5120
taxable year from the taxpayer's federal adjusted gross income.	5121

(15)(a) Add an amount equal to the funds withdrawn from a	5122
medical savings account during the taxable year, and the net	5123
investment earnings on those funds, when the funds withdrawn were	5124
used for any purpose other than to reimburse an account holder	5125
for, or to pay, eligible medical expenses, in accordance with	5126
section 3924.66 of the Revised Code;	5127

(b) Add the amounts distributed from a medical savings	5128
account under division (A)(2) of section 3924.68 of the Revised	5129
Code during the taxable year.	5130

(16) Add any amount claimed as a credit under section	5131
5747.059 of the Revised Code to the extent that such amount	5132
satisfies either of the following:	5133

(a) The amount was deducted or excluded from the computation	5134
of the taxpayer's federal adjusted gross income as required to be	5135
reported for the taxpayer's taxable year under the Internal	5136
Revenue Code;	5137

(b) The amount resulted in a reduction of the taxpayer's	5138
federal adjusted gross income as required to be reported for any	5139
of the taxpayer's taxable years under the Internal Revenue Code.	5140

(17) Deduct the amount contributed by the taxpayer to an	5141
individual development account program established by a county	5142
department of job and family services pursuant to sections 329.11	5143
to 329.14 of the Revised Code for the purpose of matching funds	5144
deposited by program participants. On request of the tax	5145
commissioner, the taxpayer shall provide any information that, in	5146
the tax commissioner's opinion, is necessary to establish the	5147
amount deducted under division (A)(17) of this section.	5148

(18) Beginning in taxable year 2001, if the taxpayer is	5149
married and files a joint return and the combined federal adjusted	5150
gross income of the taxpayer and the taxpayer's spouse for the	5151
taxable year does not exceed one hundred thousand dollars, or if	5152
the taxpayer is single and has a federal adjusted gross income for	5153
the taxable year not exceeding fifty thousand dollars, deduct	5154
amounts paid during the taxable year for qualified tuition and	5155
fees paid to an eligible institution for the taxpayer, the	5156
taxpayer's spouse, or any dependent of the taxpayer, who is a	5157
resident of this state and is enrolled in or attending a program	5158
that culminates in a degree or diploma at an eligible institution.	5159
The deduction may be claimed only to the extent that qualified	5160
tuition and fees are not otherwise deducted or excluded for any	5161
taxable year from federal or Ohio adjusted gross income. The	5162
deduction may not be claimed for educational expenses for which	5163
the taxpayer claims a credit under section 5747.27 of the Revised	5164
Code.	5165

(19) Add any reimbursement received during the taxable year	5166
of any amount the taxpayer deducted under division (A)(18) of this	5167
section in any previous taxable year to the extent the amount is	5168
not otherwise included in Ohio adjusted gross income.	5169

(B) "Business income" means income arising from	5170
transactions, activities, and sources in the regular course of a	5171
trade or business and includes income from tangible and intangible	5172
property if the acquisition, rental, management, and disposition	5173
of the property constitute integral parts of the regular course of	5174
a trade or business operation.	5175

(C) "Nonbusiness income" means all income other than	5176
business income and may include, but is not limited to,	5177
compensation, rents and royalties from real or tangible personal	5178
property, capital gains, interest, dividends and distributions,	5179
patent or copyright royalties, or lottery winnings, prizes, and	5180
awards.	5181

(D) "Compensation" means any form of remuneration paid to an	5182
employee for personal services.	5183

(E) "Fiduciary" means a guardian, trustee, executor,	5184
administrator, receiver, conservator, or any other person acting	5185
in any fiduciary capacity for any individual, trust, or estate.	5186

(F) "Fiscal year" means an accounting period of twelve	5187
months ending on the last day of any month other than December.	5188

(G) "Individual" means any natural person.

5189

(H) "Internal Revenue Code" means the "Internal Revenue Code	5190
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	5191

(I) "Resident" means:

5192

(1) An individual who is domiciled in this state, subject to	5193
section 5747.24 of the Revised Code;	5194

(2) The estate of a decedent who at the time of death was	5195
domiciled in this state. The domicile tests of section 5747.24 of	5196
the Revised Code and any election under section 5747.25 of the	5197
Revised Code are not controlling for purposes of division (I)(2)	5198
of this section.	5199

(3) A trust that is domiciled in this state. The domicile	5200
tests of section 5747.24 of the Revised Code and any election	5201
under section 5747.25 of the Revised Code are not controlling for	5202
purposes of division (I)(3) of this section.	5203

(J) "Nonresident" means an individual or estate that is not	5204
a resident. An individual who is a resident for only part of a	5205
taxable year is a nonresident for the remainder of that taxable	5206
year.	5207

(K) "Pass-through entity" has the same meaning as in section	5208
5733.04 of the Revised Code.	5209

(L) "Return" means the notifications and reports required to	5210
be filed pursuant to this chapter for the purpose of reporting the	5211
tax due and includes declarations of estimated tax when so	5212
required.	5213

(M) "Taxable year" means the calendar year or the taxpayer's	5214
fiscal year ending during the calendar year, or fractional part	5215
thereof, upon which the adjusted gross income is calculated	5216
pursuant to this chapter.	5217

(N) "Taxpayer" means any person subject to the tax imposed	5218
by section 5747.02 of the Revised Code or any pass-through entity	5219
that makes the election under division (D) of section 5747.08 of	5220
the Revised Code.	5221

(O) "Dependents" means dependents as defined in the Internal	5222
Revenue Code and as claimed in the taxpayer's federal income tax	5223
return for the taxable year or which the taxpayer would have been	5224
permitted to claim had the taxpayer filed a federal income tax	5225
return.	5226

(P) "Principal county of employment" means, in the case of a	5227
nonresident, the county within the state in which a taxpayer	5228
performs services for an employer or, if those services are	5229
performed in more than one county, the county in which the major	5230
portion of the services are performed.	5231

(Q) As used in sections 5747.50 to 5747.55 of the Revised	5232
Code:	5233

(1) "Subdivision" means any county, municipal corporation,	5234
park district, or township.	5235

(2) "Essential local government purposes" includes all	5236
functions that any subdivision is required by general law to	5237
exercise, including like functions that are exercised under a	5238
charter adopted pursuant to the Ohio Constitution.	5239

(R) "Overpayment" means any amount already paid that exceeds	5240
the figure determined to be the correct amount of the tax.	5241

(S) "Taxable income" applies only to estates onlyand trusts	5242
and means taxable income as defined and used in the Internal	5243
Revenue Code adjusted as follows:	5244

(1) Add interest or dividends on obligations or securities	5245
of any state or of any political subdivision or authority of any	5246
state, other than this state and its subdivisions and authorities;	5247

(2) Add interest or dividends on obligations of any	5248
authority, commission, instrumentality, territory, or possession	5249
of the United States that are exempt from federal income taxes but	5250
not from state income taxes;	5251

(3) Add the amount of personal exemption allowed to the	5252
estate pursuant to section 642(b) of the Internal Revenue Code;	5253

(4) Deduct interest or dividends on obligations of the	5254
United States and its territories and possessions or of any	5255
authority, commission, or instrumentality of the United States	5256
that are exempt from state taxes under the laws of the United	5257
States;	5258

(5) Deduct the amount of wages and salaries, if any, not	5259
otherwise allowable as a deduction but that would have been	5260
allowable as a deduction in computing federal taxable income for	5261
the taxable year, had the targeted jobs credit allowed under	5262
sections 38, 51, and 52 of the Internal Revenue Code not been in	5263
effect;	5264

(6) Deduct any interest or interest equivalent on public	5265
obligations and purchase obligations to the extent included in	5266
federal taxable income;	5267

(7) Add any loss or deduct any gain resulting from sale,	5268
exchange, or other disposition of public obligations to the extent	5269
included in federal taxable income;	5270

(8) Except in the case of the final return of an estate, add	5271
any amount deducted by the taxpayer on both its Ohio estate tax	5272
return pursuant to section 5731.14 of the Revised Code, and on its	5273
federal income tax return in determining either federal adjusted	5274
gross income or federal taxable income;	5275

(9)(a) Deduct any amount included in federal taxable income	5276
solely because the amount represents a reimbursement or refund of	5277
expenses that in a previous year the decedent had deducted as an	5278
itemized deduction pursuant to section 63 of the Internal Revenue	5279
Code and applicable treasury regulations. The deduction otherwise	5280
allowed under division (S)(9)(a) of this section shall be reduced	5281
to the extent the reimbursement is attributable to an amount the	5282
taxpayer or decedent deducted under this section in any taxable	5283
year.	5284

(b) Add any amount not otherwise included in Ohio taxable	5285
income for any taxable year to the extent that the amount is	5286
attributable to the recovery during the taxable year of any amount	5287
deducted or excluded in computing federal or Ohio taxable income	5288
in any taxable year.	5289

(10) Deduct any portion of the deduction described in	5290
section 1341(a)(2) of the Internal Revenue Code, for repaying	5291
previously reported income received under a claim of right, that	5292
meets both of the following requirements:	5293

(a) It is allowable for repayment of an item that was	5294
included in the taxpayer's taxable income or the decedent's	5295
adjusted gross income for a prior taxable year and did not qualify	5296
for a credit under division (A) or (B) of section 5747.05 of the	5297
Revised Code for that year.	5298

(b) It does not otherwise reduce the taxpayer's taxable	5299
income or the decedent's adjusted gross income for the current or	5300
any other taxable year.	5301

(11) Add any amount claimed as a credit under section	5302
5747.059 of the Revised Code to the extent that the amount	5303
satisfies either of the following:	5304

(a) The amount was deducted or excluded from the computation	5305
of the taxpayer's federal taxable income as required to be	5306
reported for the taxpayer's taxable year under the Internal	5307
Revenue Code;	5308

(b) The amount resulted in a reduction in the taxpayer's	5309
federal taxable income as required to be reported for any of the	5310
taxpayer's taxable years under the Internal Revenue Code.	5311

(T) "School district income" and "school district income	5312
tax" have the same meanings as in section 5748.01 of the Revised	5313
Code.	5314

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	5315
of this section, "public obligations," "purchase obligations," and	5316
"interest or interest equivalent" have the same meanings as in	5317
section 5709.76 of the Revised Code.	5318

(V) "Limited liability company" means any limited liability	5319
company formed under Chapter 1705. of the Revised Code or under	5320
the laws of any other state.	5321

(W) "Pass-through entity investor" means any person who,	5322
during any portion of a taxable year of a pass-through entity, is	5323
a partner, member, shareholder, or investor in that pass-through	5324
entity.	5325

(X) "Banking day" has the same meaning as in section 1304.01	5326
of the Revised Code.	5327

(Y) "Month" means a calendar month.

5328

(Z) "Quarter" means the first three months, the second three	5329
months, the third three months, or the last three months of the	5330
taxpayer's taxable year.	5331

(AA)(1) "Eligible institution" means a state university or	5332
state institution of higher education as defined in section	5333
3345.011 of the Revised Code, or a private, nonprofit college,	5334
university, or other post-secondary institution located in this	5335
state that possesses a certificate of authorization issued by the	5336
Ohio board of regents pursuant to Chapter 1713. of the Revised	5337
Code or a certificate of registration issued by the state board of	5338
proprietary school registration under Chapter 3332. of the Revised	5339
Code.	5340

(2) "Qualified tuition and fees" means tuition and fees	5341
imposed by an eligible institution as a condition of enrollment or	5342
attendance, not exceeding two thousand five hundred dollars in	5343
each of the individual's first two years of post-secondary	5344
education. If the individual is a part-time student, "qualified	5345
tuition and fees" includes tuition and fees paid for the academic	5346
equivalent of the first two years of post-secondary education	5347
during a maximum of five taxable years, not exceeding a total of	5348
five thousand dollars. "Qualified tuition and fees" does not	5349
include:	5350

(a) Expenses for any course or activity involving sports,	5351
games, or hobbies unless the course or activity is part of the	5352
individual's degree or diploma program;	5353

(b) The cost of books, room and board, student activity	5354
fees, athletic fees, insurance expenses, or other expenses	5355
unrelated to the individual's academic course of instruction;	5356

(c) Tuition, fees, or other expenses paid or reimbursed	5357
through an employer, scholarship, grant in aid, or other	5358
educational benefit program.	5359

(BB) Any term used in this chapter that is not otherwise	5360
defined in this section and that is not used in a comparable	5361
context in the Internal Revenue Code and other statutes of the	5362
United States relating to federal income taxes has the same	5363
meaning as in section 5733.40 of the Revised Code.	5364

Sec. 5747.02.  (A) For the purpose of providing revenue for	5365
the support of schools and local government functions, to provide	5366
relief to property taxpayers, to provide revenue for the general	5367
revenue fund, and to meet the expenses of administering the tax	5368
levied by this chapter, there is hereby levied an annual tax. The	5369
tax is levied on every individual and every estate residing in or	5370
earning or receiving income in this state, on every individual and	5371
estate earning or receiving lottery winnings, prizes, or awards	5372
pursuant to Chapter 3770. of the Revised Code, and on every	5373
individual and estate otherwise having nexus with or in this state	5374
under the Constitution of the United States, an annual tax. The	5375
tax also is levied on every trust residing in or earning or	5376
receiving income in this state, earning or receiving such lottery	5377
winnings, prizes, or awards, or otherwise having nexus with or in	5378
this state under the Constitution of the United States for the	5379
trust's taxable years beginning in 2002 or 2003. The tax shall be	5380
measured in the case of individuals by adjusted gross income less	5381
an exemption for the taxpayer, the taxpayer's spouse, and each	5382
dependent as provided in section 5747.025 of the Revised Code, and	5383
measured in the case of trusts and estates by taxable income. The	5384
Except as provided in division (D) of this section, the tax	5385
imposed by this section on the balance thus obtained is hereby	5386
levied as follows:	5387

(B) If the director of budget and management makes a	5401
certification to the tax commissioner under division (B) of	5402
section 131.44 of the Revised Code, the amount of tax as	5403
determined under division (A) of this section shall be reduced by	5404
the percentage prescribed in that certification for taxable years	5405
beginning in the calendar year in which that certification is	5406
made.	5407

(C) The levy of this tax on income does not prevent a	5408
municipal corporation, a joint economic development zone created	5409
under section 715.691, or a joint economic development district	5410
created under section 715.70 or 715.71 or sections 715.72 to	5411
715.81 of the Revised Code from levying a tax on income.	5412

(D) The annual tax measured by taxable income of an electing	5413
small business trust is levied as follows:	5414

(1) On the S corporation portion of the trust's taxable	5415
income, at the highest rate set forth in division (A) of this	5416
section;	5417

(2) On the remaining portion of the trust's taxable income,	5418
at the rates set forth in division (A) of this section. The tax	5419
levied on the remaining portion described in division (D)(2) of	5420
this section applies only for the trust's taxable years beginning	5421
in 2002 or 2003.	5422

(E) For the purposes of this section, "trust" is limited to	5423
a trust described in Subchapter J of the Internal Revenue Code but	5424
does not include a trust exempt from tax under section 501(c)(3)	5425
of the Internal Revenue Code.	5426

Section 2. That existing sections 183.02, 1309.528, 5111.872,	5427
5123.043, 5123.046, 5123.048, 5123.049, 5123.0411, 5126.01,	5428
5126.02, 5126.021, 5126.033, 5126.035, 5126.036, 5126.042,	5429
5126.046, 5126.05, 5126.054, 5126.055, 5126.056, 5126.06, 5126.14,	5430
5126.15, 5126.17, 5126.18, 5126.19, 5126.221, 5126.357, 5705.44,	5431
5733.04, 5733.042, 5733.055, 5739.01, 5739.02, 5741.01, 5743.05,	5432
5747.01, and 5747.02 of the Revised Code are hereby repealed.	5433

Section 3. On the recommendation of the Director of Mental	5434
Retardation and Developmental Disabilities, the Director of Job	5435
and Family Services may seek one or more Medicaid waivers pursuant	5436
to section 5111.87 of the Revised Code including a waiver under	5437
which home and community-based services are provided in the form	5438
of family support services programs established by county boards	5439
of mental retardation and developmental disabilities under section	5440
5126.11 of the Revised Code. Notwithstanding division (A) of	5441
section 5111.873 of the Revised Code, the Director of Job and	5442
Family Services is not required to adopt rules under that section	5443
by the effective date of the waiver under which home and	5444
community-based services are provided in the form of family	5445
support services programs.	5446

Section 4.  As used in this section, "Residential Facility	5447
Waiver transition" means the transition, due to the upcoming	5448
termination of the Residential Facility Waiver, of individuals who	5449
receive services under the Residential Facility Waiver to other	5450
home and community-based services as defined in section 5126.01 of	5451
the Revised Code.	5452

Consistent with the Medicaid redesign plan that the	5453
Department of Job and Family Services submitted to the Centers for	5454
Medicaid and Medicare Services to comply with an audit conducted	5455
by the centers, the Department of Mental Retardation and	5456
Developmental Disabilities shall develop a plan to implement the	5457
Residential Facilities Waiver transition. The plan shall identify	5458
how the needs of the individuals to be transferred are to be met,	5459
including ways that the Residential Facility Waiver's service	5460
capacity can be reconfigured on a statewide, regional, or county	5461
specific basis. The plan shall also specify the date, which shall	5462
not be later than September 1, 2002, that the moratorium	5463
established under Section 5 of this act is to terminate. The	5464
Department of Mental Retardation and Developmental Disabilities	5465
shall complete the plan in time for the Executive Branch Committee	5466
on Medicaid Redesign and Expansion MRDD Services, created by Am.	5467
Sub. H.B. 94 of the 124th General Assembly, to review the plan and	5468
submit recommended changes to the Department by May 31, 2002. The	5469
Committee shall finish its review and submit suggested changes to	5470
the Department of Mental Retardation and Developmental	5471
Disabilities not later than that date. Not later than sixty days	5472
after the Committee submits suggested changes to the Department,	5473
the Department and the Department of Job and Family Services shall	5474
establish protocols for county boards of mental retardation and	5475
developmental disabilities and private and government entities	5476
under contract with a county board to provide services under the	5477
Residential Facility Waiver to follow in implementing the plan.	5478

The Department of Mental Retardation and Developmental	5479
Disabilities shall identify costs associated with the plan	5480
developed under this section and sources of funding available to	5481
pay the costs.	5482

Not later than February 8, 2002, each county board of mental	5483
retardation and developmental disabilities that has a contract	5484
with one or more private or government entities to provide	5485
services under the Residential Facility Waiver shall jointly	5486
develop a plan with the providers for the implementation of the	5487
Residential Facility Waiver transition as concerns individuals who	5488
reside in a residential facility with a license capacity of five	5489
or fewer beds. The boards and providers shall develop the plan in	5490
accordance with a protocol the Departments of Job and Family	5491
Services and Mental Retardation and Developmental Disabilities	5492
shall jointly establish.	5493

Section 5. (A) Notwithstanding Chapter 5111. of the Revised	5494
Code, until the date specified in the plan that the Department of	5495
Mental Retardation and Developmental Disabilities develops under	5496
Section 4 of this act and except as provided in division (B) of	5497
this section, the number of intermediate care facility for the	5498
mentally retarded beds eligible for Medicaid payment shall not be	5499
higher than the number of such beds eligible for such payment on	5500
the effective date of this section.	5501

(B) The Department of Job and Family Services may issue one	5502
or more waivers of division (A) of this section in the event that	5503
an emergency, as determined by the Department, exists. In	5504
determining whether to issue a waiver, the Department of Job and	5505
Family Services shall consider the recommendation of the	5506
Department of Mental Retardation and Developmental Disabilities.	5507

Section 6. Notwithstanding Am. Sub. H.B. 94 of the 124th	5508
General Assembly, the Department of Mental Retardation and	5509
Developmental Disabilities shall not take action against a county	5510
board of mental retardation and developmental disabilities	5511
authorized by that act on the basis that the county board	5512
submitted the last component of the plan required by section	5513
5126.054 of the Revised Code after November 1, 2001. The	5514
Department shall take action against the county board under	5515
division (B) of section 5126.056 of the Revised Code if the county	5516
board fails to submit that component to the Department by July 1,	5517
2002.	5518

Section 7. (A) The Joint Council on Mental Retardation and	5519
Developmental Disabilities created under section 101.37 of the	5520
Revised Code shall do both of the following in meetings open to	5521
the public:	5522

(1) Do all of the following regarding the tax equity	5523
program:	5524

(a) Review documents submitted by the Ohio Superintendents of	5525
County Boards of Mental Retardation and Developmental Disabilities	5526
and Ohio Association of County Boards of Mental Retardation and	5527
Developmental Disabilities to the House Finance and Appropriations	5528
Committee and Senate Finance and Financial Institutions Committee	5529
regarding the issue of a property tax equalization program for	5530
adults only as provided by Am. Sub. H.B. 94 of the 124th General	5531
Assembly;	5532

(b) Review the concept of Medicaid comparability of care,	5533
adult services expenditures within county boards of mental	5534
retardation and developmental disabilities, the concept of tax	5535
capacity and targeting property taxes to adult services, and the	5536
necessity to reduce the disparity in capability of county boards	5537
to provide adult services;	5538

(c) Establish a reasonable methodology to provide tax	5539
equalization for adult services for county boards that are below	5540
the average on property tax yield.	5541

(2) Do both of the following regarding the collective	5542
bargaining unit of service and support administrators:	5543

(a) Review the provision of section 5126.15 of the Revised	5544
Code that prohibits individuals employed or under contract as	5545
service and support administrators from being in the same	5546
collective bargaining unit as employees who perform duties that	5547
are not administrative;	5548

(b) Determine whether the following service and support	5549
administration functions are in conflict or incompatible with the	5550
functions of employees who perform duties that are not	5551
administrative:	5552

(i) Selection of providers of day services, including	5553
employees of county boards of mental retardation and developmental	5554
disabilities;	5555

(ii) Contracting with applicable providers;

5556

(iii) Reviewing and assuring the quality of services;

5557

(iv) Monitoring for major unusual incidents.

5558

(B) The Council shall prepare a report on its	5559
responsibilities under division (A) of this section. The report	5560
shall include the Council's findings and recommended actions. The	5561
Council shall submit the report to the Speaker of the House of	5562
Representatives, Senate President, and Governor not later than	5563
February 1, 2002.	5564

Section 8. Notwithstanding sections 5126.16 to 5126.18 of the	5565
Revised Code and Section 75.02 of Am. Sub. H.B. 94 of the 124th	5566
General Assembly, the Department of Mental Retardation and	5567
Developmental Disabilities shall do both of the following:	5568

(A) Use $6,500,000 in fiscal year 2002 and $13,000,000 in	5569
fiscal year 2003 of the appropriation item 322-501, County Boards	5570
Subsidies, in Section 75.02 of Am. Sub. H.B. 94 of the 124th	5571
General Assembly, to fund the tax equalization program in	5572
accordance with the law governing the program as revised by the	5573
General Assembly following the Joint Council on Mental Retardation	5574
and Developmental Disabilities' submission of the report required	5575
by this act regarding the tax equity program;	5576

(B) Make payments under the tax equity program for fiscal	5577
year 2002 after the General Assembly revises the law governing the	5578
program following the Council's submission of the report rather	5579
than on or before September 30, 2001.	5580

Section 9. That Sections 63.25, 74.01, 74.02, 104, and 140 of	5581
Am. Sub. H.B. 94 of the 124th General Assembly be amended to read	5582
as follows:	5583

"       Sec. 63.25. REFUND OF SETS PENALTY

5584

The Department of Job and Family Services shall notify the	5585
Controlling Board immediately on receipt ofdeposit any refunds	5586
for penalties that were paid directly or indirectly by the state	5587
for the Support Enforcement Tracking System (SETS). Any and all	5588
refunds received for such penalties shall be deposited in their	5589
entirety to the General Revenue Fund 3V6, TANF Block Grant.	5590

Sec. 74.01. DIVISION OF MENTAL HEALTH - HOSPITALS

5591

General Revenue Fund

5592

General Services Fund Group

5598

Federal Special Revenue Fund Group

5603

State Special Revenue Fund Group

5611

COMMUNITY AND HOSPITAL MENTAL HEALTH SERVICES

5618

Of the foregoing appropriation item 334-408, Community and	5619
Hospital Mental Health Services, the appropriation increases made	5620
by the amendment in H.B. 405 of the 124th General Assembly shall	5621
be used by the state mental hospitals for operating purposes.	5622

COMMUNITY MENTAL HEALTH BOARD RISK FUND

5623

The foregoing appropriation item 334-636, Community Mental	5624
Health Board Risk Fund, shall be used to make payments pursuant to	5625
section 5119.62 of the Revised Code.	5626

Sec. 74.02. DIVISION OF MENTAL HEALTH - COMMUNITY SUPPORT	5627
SERVICES	5628

General Revenue Fund

5629

General Services Fund Group

5634

Federal Special Revenue Fund Group

5639

State Special Revenue Fund Group

5644

Sec. 104.  SOS SECRETARY OF STATE

5665

General Revenue Fund

5666

General Services Fund Group

5672

State Special Revenue Fund Group

5678

Holding Account Redistribution Fund Group

5685

BOARD OF VOTING MACHINE EXAMINERS

5692

The foregoing appropriation item 050-610, Board of Voting	5693
Machine Examiners, shall be used to pay for the services and	5694
expenses of the members of the Board of Voting Machine Examiners,	5695
and for other expenses that are authorized to be paid from the	5696
Board of Voting Machine Examiners Fund, which is created in	5697
section 3506.05 of the Revised Code. Moneys not used shall be	5698
returned to the person or entity submitting the equipment for	5699
examination. If it is determined that additional appropriations	5700
are necessary, such amounts are appropriated.	5701

HOLDING ACCOUNT REDISTRIBUTION GROUP

5702

The foregoing appropriation items 050-605 and 050-606,	5703
Holding Account Redistribution Fund Group, shall be used to hold	5704
revenues until they are directed to the appropriate accounts or	5705
until they are refunded. If it is determined that additional	5706
appropriations are necessary, such amounts are appropriated.	5707

Sec. 140. TEMPORARY STABILIZATION OF LOCAL GOVERNMENT	5708
DISTRIBUTIONS	5709

(A) On or before the third day of each month of the period	5710
July 2001 through May 2002, the Tax Commissioner shall determine	5711
the amounts credited under sections 5727.45, 5733.12, 5739.21,	5712
5741.03, and 5747.03 of the Revised Code, respectively, to the	5713
Local Government Fund, to the Library and Local Government Support	5714
Fund, and to the Local Government Revenue Assistance Fund in the	5715
twelfth preceding month. On or before June 3, 2002, the Tax	5716
Commissioner shall determine the amounts credited under sections	5717
5727.45, 5733.12, 5739.21, 5741.03, and 5747.03 of the Revised	5718
Code, respectively, to the Local Government Fund, to the Library	5719
and Local Government Support Fund, and to the Local Government	5720
Revenue Assistance Fund in June 2000. For purposes of this	5721
section, any amount transferred during the period January 1, 2001,	5722
through June 30, 2001 to the Local Government Fund, to the Local	5723
Government Revenue Assistance Fund, or to the Library and Local	5724
Government Support Fund under section 131.44 of the Revised Code	5725
shall be considered to be an amount credited to that respective	5726
fund under section 5747.03 of the Revised Code.	5727

Notwithstanding sections 5727.45, 5733.12, 5739.21, 5741.03,	5728
and 5747.03 of the Revised Code to the contrary, for each month in	5729
the period July 1, 2001, through June 30, 2003, from the public	5730
utility excise, corporate franchise, sales, use, and personal	5731
income taxes collected:	5732

(1) An amount shall first be credited to the Local Government	5733
Fund that equals the amount credited to that fund from that tax	5734
according to the schedule in division (B) of this section.	5735

(2) An amount shall next be credited to the Local Government	5736
Revenue Assistance Fund that equals the amount credited to that	5737
fund from that tax according to the schedule in division (B) of	5738
this section.	5739

(3) An amount shall next be credited to the Library and Local	5740
Government Support Fund that equals the amount credited to that	5741
fund from that tax according to the schedule in division (B) of	5742
this section.	5743

(B) The amounts shall be credited from each tax to each	5744
respective fund as follows:	5745

(1) In July 2001 and July 2002, the amounts credited in July	5746
2000;	5747

(2) In August 2001 and August 2002, the amounts credited in	5748
August 2000;	5749

(3) In September 2001 and September 2002, the amounts	5750
credited in September 2000;	5751

(4) In October 2001 and October 2002, the amounts credited in	5752
October 2000;	5753

(5) In November 2001 and November 2002, the amounts credited	5754
in November 2000;	5755

(6) In December 2001 and December 2002, the amounts credited	5756
in December 2000;	5757

(7) In January 2002 and January 2003, the amounts credited	5758
in January 2001;	5759

(8) In February 2002 and February 2003, the amounts credited	5760
in February 2001;	5761

(9) In March 2002 and March 2003, the amounts credited in	5762
March 2001;	5763

(10) In April 2002 and April 2003, the amounts credited in	5764
April 2001;	5765

(11) In May 2002 and May 2003, the amounts credited in May	5766
2001;	5767

(12) In June 2002 and June 2003, the amounts credited in June	5768
2000.	5769

(C) Notwithstanding section 5727.84 of the Revised Code to	5770
the contrary, for the period July 1, 2001, through June 30, 2003,	5771
no amounts shall be credited to the Local Government Fund or to	5772
the Local Government Revenue Assistance Fund from the kilowatt	5773
hour tax, and such amounts that would have otherwise been required	5774
to be credited to such funds shall instead be credited to the	5775
General Revenue Fund. Notwithstanding section 131.44 of the	5776
Revised Code to the contrary, for the period July 1, 2001, through	5777
June 30, 2003, no amounts shall be transferred to the Local	5778
Government Fund, the Local Government Revenue Assistance Fund, or	5779
the Library and Local Government Support Fund from the Income Tax	5780
Reduction Fund, and such amounts that would have otherwise been	5781
transferred to such funds from the Income Tax Reduction Fund shall	5782
instead be transferred to the General Revenue Fund.	5783

(D) Notwithstanding any other provision of law to the	5784
contrary, the Tax Commissioner shall do each of the following:	5785

(1) By the fourth day of February 2002, the commissioner	5786
shall subtract the amount calculated in division (D)(1)(b) of this	5787
section from the amount calculated in division (D)(1)(a) of this	5788
section. If the amount in division (D)(1)(a) of this section is	5789
greater than the amount in division (D)(1)(b) of this section,	5790
then subtract the difference from the amount of money from the	5791
income tax credited to the Local Government Fund, the Local	5792
Government Revenue Assistance Fund, and the Library and Local	5793
Government Support Fund in February 2002.	5794

(a) Money credited to the Local Government Fund, the Local	5795
Government Revenue Assistance Fund, and the Library and Local	5796
Government Support Fund from July 2001 through January 2002, less	5797
each fund's proportional share of $64,092,000.	5798

(b) The amount of money that would have been credited to the	5799
Local Government Fund, the Local Government Revenue Assistance	5800
Fund, and the Library and Local Government Support Fund from July	5801
2001 through January 2002, if sections 5727.45, 5733.12, 5739.21,	5802
5741.03, and 5747.03 of the Revised Code were in effect during	5803
this period.	5804

(2) By the fourth day of June 2002, the commissioner shall	5805
subtract the amount calculated in division (D)(2)(b) of this	5806
section from the amount calculated in division (D)(2)(a) of this	5807
section. If the amount in division (D)(1)(a) of this section is	5808
greater than the amount in division (D)(1)(b) of this section,	5809
then subtract any positive difference from the amount of money	5810
from the income tax credited to the Local Government Fund, the	5811
Local Government Revenue Assistance Fund, and the Library and	5812
Local Government Support Fund in June 2002.	5813

(a) Money credited to the Local Government Fund, the Local	5814
Government Revenue Assistance Fund, and the Library and Local	5815
Government Support Fund from February 2002 through May 2002, plus	5816
any money subtracted under division (D)(1) of this section.	5817

(b) The amount of money that would have been credited to the	5818
Local Government Fund, the Local Government Revenue Assistance	5819
Fund, and the Library and Local Government Support Fund from	5820
February 2002 through May 2002 if sections 5727.45, 5733.12,	5821
5739.21, 5741.03, and 5747.03 of the Revised Code were in effect	5822
during this period.	5823

(3) By the fourth day of February 2003, the commissioner	5824
shall subtract the amount calculated in division (D)(1)(b) of this	5825
section from the amount calculated in division (D)(1)(a) of this	5826
section. If the amount in division (D)(1)(a) of this section is	5827
greater than the amount in division (D)(1)(b) of this section,	5828
then subtract the difference from the amount of money from the	5829
income tax credited to the Local Government Fund, the Local	5830
Government Revenue Assistance Fund, and the Library and Local	5831
Government Support Fund in February 2003.	5832

(a) Money credited to the Local Government Fund, the Local	5833
Government Revenue Assistance Fund, and the Library and Local	5834
Government Support Fund from June 2002 through January 2003, less	5835
each fund's proportional share of $64,092,000, plus the amount	5836
subtracted under division (D)(2) of this section.	5837

(b) The amount of money that would have been credited to the	5838
Local Government Fund, the Local Government Revenue Assistance	5839
Fund, and the Library and Local Government Support Fund from June	5840
2002 through January 2003, if sections 5727.45, 5733.12, 5739.21,	5841
5741.03, and 5747.03 of the Revised Code were in effect during	5842
this period.	5843

(4) By the fourth day of June 2003, the commissioner shall	5844
subtract the amount calculated in division (D)(2)(b) of this	5845
section from the amount calculated in division (D)(2)(a) of this	5846
section. If the amount in division (D)(1)(a) of this section is	5847
greater than the amount in division (D)(1)(b) of this section,	5848
then subtract any positive difference from the amount of money	5849
from the income tax credited to the Local Government Fund, the	5850
Local Government Revenue Assistance Fund, and the Library and	5851
Local Government Support Fund in June 2003.	5852

(a) Money credited to the Local Government Fund, the Local	5853
Government Revenue Assistance Fund, and the Library and Local	5854
Government Support Fund from February 2003 through May 2003, plus	5855
any money subtracted under division (D)(3) of this section.	5856

(b) The amount of money that would have been credited to the	5857
Local Government Fund, the Local Government Revenue Assistance	5858
Fund, and the Library and Local Government Support Fund from	5859
February 2003 through May 2003, if sections 5727.45, 5733.12,	5860
5739.21, 5741.03, and 5747.03 of the Revised Code were in effect	5861
during this period.	5862

Notwithstanding any other provision of law to the contrary,	5863
the Tax Commissioner shall compute separate adjustments to the	5864
amounts credited from the public utility excise, corporate	5865
franchise, sales, use, and personal income taxes to the Local	5866
Government Fund, the Local Government Revenue Assistance Fund, and	5867
the Library and Local Government Support Fund during July 2001.	5868
The adjustments shall equal the amount credited to each respective	5869
fund from each respective tax during June 2000 minus the amount	5870
credited to that fund from that tax during June 2001. If an	5871
adjustment is a positive amount, during July 2001, such amount	5872
shall be credited to the Local Government Fund, the Local	5873
Government Revenue Assistance Fund, or the Library and Local	5874
Government Support Fund, as appropriate, and shall be deducted	5875
from the General Revenue Fund. If an adjustment is a negative	5876
amount, during July 2001, such amount shall be deducted from the	5877
Local Government Fund, the Local Government Revenue Assistance	5878
Fund, or the Library and Local Government Support Fund, as	5879
appropriate, and shall be credited to the General Revenue Fund.	5880
Any amount remaining in the Local Government Fund, the Local	5881
Government Revenue Assistance Fund, or the Library and Local	5882
Government Support Fund after the distributions from such funds	5883
are made to local governments in August 2001, shall be certified	5884
by the Tax Commissioner to the Director of Budget and Management	5885
by August 15, 2001, and the Director of Budget and Management	5886
shall transfer such amount from each respective fund to the	5887
General Revenue Fund by August 31, 2001.	5888

For purposes of this section, "pro rata share" means the	5889
percentage calculated for each county and used in each month of	5890
the period July 2000 through June 2001 to distribute the amounts	5891
credited to the Library and Local Government Support Fund in	5892
accordance with section 5747.47 of the Revised Code.	5893

Notwithstanding any other provision of law to the contrary,	5894
in July 2001, each county undivided library and local government	5895
support fund shall receive from the Library and Local Government	5896
Support Fund an amount equal to the amount it would have received	5897
pursuant to section 5747.47 of the Revised Code for that month,	5898
minus its pro rata share of any amount that has been or shall be	5899
transferred from the Library and Local Government Support Fund to	5900
the OPLIN Technology Fund in that month. In August 2001, each	5901
county undivided library and local government support fund shall	5902
receive from the Library and Local Government Support Fund an	5903
amount equal to the amount it received from that fund in July 2000	5904
and August 2000 minus the amount it received from that fund in	5905
July 2001 and minus its pro rata share of any amount transferred	5906
from that fund to the OPLIN Technology Fund in July 2001 or August	5907
2001. In August 2001, each county undivided local government fund	5908
shall receive from the Local Government Fund, each municipality	5909
that receives a distribution directly from the Local Government	5910
Fund shall receive from that fund, and each county undivided local	5911
government revenue assistance fund shall receive from the Local	5912
Government Revenue Assistance Fund an amount equal to the amount	5913
it received from that respective fund in July 2000 and August 2000	5914
minus the amount it received from that respective fund in July	5915
2001. In each month of the periods September 1, 2001, through June	5916
30, 2002, and September 1, 2002, through June 30, 2003, each	5917
county undivided local government fund shall receive from the	5918
Local Government Fund, each municipality that receives a	5919
distribution directly from the Local Government Fund shall receive	5920
from that fund, each county undivided local government revenue	5921
assistance fund shall receive from the Local Government Revenue	5922
Assistance Fund, and each county undivided library and local	5923
government support fund shall receive from the Library and Local	5924
Government Support Fund, the same amount it received from that	5925
respective fund in the corresponding month of the period September	5926
1, 2000, through June 2001. In each month of the period July 1,	5927
2002, through August 31, 2002, and in the month of July 2003, each	5928
county undivided local government fund shall receive from the	5929
Local Government Fund, each municipality that receives a	5930
distribution directly from the Local Government Fund shall receive	5931
from that fund, each county undivided local government revenue	5932
assistance fund shall receive from the Local Government Revenue	5933
Assistance Fund, and each county undivided library and local	5934
government support fund shall receive from the Library and Local	5935
Government Support Fund, the same amount it received from that	5936
respective fund in the corresponding month of the period July 1,	5937
2000, through August 31, 2000. If during any month of the period	5938
September 1, 2001, through July 31, 2003, a transfer is made from	5939
the Library and Local Government Support Fund to the OPLIN	5940
Technology Fund, the amount distributed to each county undivided	5941
library and local government support fund shall be reduced by its	5942
pro rata share of the amount transferred.	5943

During the period July 1, 2001, through July 31, 2003, the	5944
Director of Budget and Management shall issue those directives to	5945
state agencies that are necessary to ensure that the appropriate	5946
amounts are distributed to the Local Government Fund, to the Local	5947
Government Revenue Assistance Fund, and to the Library and Local	5948
Government Support Fund to accomplish the purposes of this	5949
section."	5950

Section 10. That existing Sections 63.25, 74.01, 74.02, 104,	5951
and 140 of Am. Sub. H.B. 94 of the 124th General Assembly are	5952
hereby repealed.	5953

Section 11. That Section 41.10 of Am. Sub. H.B. 94 of the	5954
124th General Assembly, as amended by Am. Sub. H.B. 299 of the	5955
124th General Assembly, be amended to read as follows:	5956

"       Sec. 41.10. EMERGENCY SHELTER HOUSING GRANTS

5957

(A) As used in this section, "emergency shelter housing"	5958
means a structure suitable for the temporary housing of the	5959
homeless and the provision of, or referral to, supportive	5960
services. Shelters that restrict admission to victims of domestic	5961
violence, runaways, or alcohol or substance abusers shall not be	5962
considered emergency shelter housing.	5963

(B) The foregoing appropriation item 195-440, Emergency	5964
Shelter Housing Grants, shall be used by the Office of Housing and	5965
Community Partnerships in the Department of Development to make	5966
grants to private, nonprofit organizations to provide emergency	5967
shelter housing for the homeless. The department shall distribute	5968
the grants pursuant to rules adopted by the Director of	5969
Development. The director may amend or rescind the rules and may	5970
adopt other rules necessary to implement this section. In awarding	5971
grants, the department shall give preference to organizations	5972
applying to fund existing emergency shelter housing.	5973

The department shall notify each organization that applied	5974
for a grant under this section of the amount of its grant award,	5975
if any. To receive a grant, the organization shall provide	5976
matching funds equal to 50 per cent of the total grant it was	5977
awarded. The organization shall expend its grant for shelter	5978
operations and supportive services, which include employment	5979
assistance, case management, information and referral services,	5980
transportation, and clothing. In providing employment assistance,	5981
the organization shall, at a minimum, refer persons to the	5982
Department of Job and Family Services.	5983

LOW AND MODERATE INCOME HOUSING

5984

The Director of Budget and Management, after consulting with	5985
the Director of Development, shall transfer up to $19,000,000 from	5986
appropriation item 195-441, Low and Moderate Income Housing, to	5987
appropriation item 195-638, Low and Moderate Income Housing Trust	5988
Fund. This transfer shall be made via an intrastate transfer	5989
voucher.	5990

UTILITY BILL CREDIT

5991

The foregoing appropriation item 195-505, Utility Bill	5992
Credits, shall be used to provide utility and fuel assistance to	5993
eligible low-income Ohio households with elderly and disabled	5994
members.	5995

TANF HOUSING PROGRAM

5996

There is hereby established the TANF Housing Program to be	5997
administered by the Department of Development in accordance with	5998
an interagency agreement entered into with the Department of Job	5999
and Family Services under section 5101.801 of the Revised Code.	6000
The program shall provide benefits and services to TANF eligible	6001
individuals under a Title IV-A program pursuant to the	6002
requirements of section 5101.801 of the Revised Code.	6003

The foregoing appropriation item 195-619, TANF Housing	6004
Program, shall be used to provide supportive services for	6005
low-income families related to housing or homelessness, including	6006
housing counseling; to provide grants to nonprofit organizations	6007
to assist Title IV-A eligible families with incomes at or below	6008
200 per cent of the federal poverty guidelines with down-payment	6009
assistance for homeownership or down-payment assistance toward the	6010
purchase of mobile homes, to provide emergency home repair funding	6011
for Title IV-A eligible families with incomes at or below 200 per	6012
cent of the federal poverty guidelines; to provide operating	6013
support for family emergency shelter programs; and to provide	6014
emergency rent and mortgage assistance for families with incomes	6015
at or below 200 per cent of the federal poverty guidelines. The	6016
funds shall not be used to match federal funds.	6017

To the extent practicable and in order to prevent duplication	6018
of the provision of assistance, the Department of Development	6019
shall require applicants for these funds to provide evidence of	6020
collaboration with other county governmental entities, including,	6021
when appropriate, county job and family services departments.	6022

The Department of Job and Family Services shall transfer into	6023
the TANF Housing Fund (3X3) of the Department of Development,	6024
which is hereby created, funds necessary to reimburse allowable	6025
TANF Housing Program expenditures as reported by the Department of	6026
Development. The transfer of funds shall be made by intrastate	6027
transfer vouchers processed against appropriation item 600-689,	6028
TANF Block Grant, of the Department of Job and Family Services and	6029
shall not exceed $5,200,000 in fiscal year 2002 and $6,500,000 in	6030
fiscal year 2003$11,700,000 for the biennium. Encumbrances shall	6031
be allowed and maintained for agreements meeting provisions of	6032
this section and shall be maintained for a period not to exceed	6033
federal provisions for use of TANF Block Grant funds that have	6034
been committed for any federal TANF Block Grant year for services	6035
that are not considered to be "assistance" as defined in 45 C.F.R.	6036
260.31(a).	6037

No more than five per cent of the transferred funds may be	6038
used by the Department of Development for the administrative	6039
expenses of this program.	6040

The benefits and services provided under the TANF Housing	6041
Program shall not be "assistance" as defined in 45 C.F.R.	6042
260.31(a), and shall be benefits and services that 45 C.F.R.	6043
260.31(b) excludes from the definition of assistance.	6044

As used in this section, "federal poverty guideline" means	6045
the poverty guideline as defined by the United States Office of	6046
Management and Budget and revised by the United States Secretary	6047
of Health and Human Services in accordance with section 673 of the	6048
"Community Services Block Grant Act," 95 Stat. 511 (1981), 42	6049
U.S.C.A. 9902, as amended."	6050

Section 12. That existing Section 41.10 of Am. Sub. H.B. 94	6051
of the 124th General Assembly, as amended by Am. Sub. H.B. 299 of	6052
the 124th General Assembly, is hereby repealed.	6053

Section 13. That Section 10 of Am. Sub. S.B. 192 of the 123rd	6054
General Assembly be amended to read as follows:	6055

"       Sec. 10. SectionsSection 8 and 9 of this actAm. Sub. S.B.	6056
192 of the 123rd General Assembly shall remain in full force and	6057
effect commencing on July 1, 2000, and terminating on June 30,	6058
2002, for the purpose of drawing money from the state treasury in	6059
payment of liabilities lawfully incurred thereunder, and on June	6060
30, 2002, and not before, the moneys appropriated thereby shall	6061
lapse into the funds from which they are severally appropriated.	6062

The appropriations made in SectionsSection 8 and 9 of this	6063
actAm. Sub. S.B. 192 of the 123rd General Assembly are subject to	6064
all provisions of the capital appropriations bill governing the	6065
2000-2002 biennium that are generally applicable to such	6066
appropriations. Expenditures from appropriations contained in	6067
SectionsSection 8 and 9 shall be accounted for as though made in	6068
the capital appropriations bill governing the 2000-2002 biennium."	6069

Section  14.  That existing Section 10 of Am. Sub. S.B. 192	6070
of the 123rd General Assembly is hereby repealed.	6071

Section 15.  That Section 9 of Am. Sub. S.B. 192 of the 123rd	6072
General Assembly, as amended by Am. Sub. H.B. 94 of the 124th	6073
General Assembly, be amended to read as follows:	6074

"       Sec. 9. All items set forth in this section are hereby	6075
appropriated out of any moneys in the state treasury to the credit	6076
of the Law Enforcement Improvements Trust Fund (Fund J87) that are	6077
not otherwise appropriated.	6078

Appropriations

AGO ATTORNEY GENERAL

6079

Tobacco Master Settlement Agreement Fund Group

6080

LAW ENFORCEMENT IMPROVEMENTS TRUST FUND

6085

The foregoing appropriation item 055-635, Law Enforcement	6086
Technology, Training, and Facility Enhancements shall be used in	6087
accordance with section 183.10 of the Revised Code."	6088

Section 16. That existing Section 9 of Am. Sub. S.B. 192 of	6089
the 123rd General Assembly, as amended by Am. Sub. H.B. 94 of the	6090
124th General Assembly, is hereby repealed.	6091

Section 17. On January 26 and 27, 2002, no tax on retail	6092
sales imposed or authorized by Chapter 5739. of the Revised Code	6093
or on use, storage, or consumption imposed or authorized by	6094
Chapter 5741. of the Revised Code shall apply to sales of tangible	6095
personal property for personal, nonbusiness use other than food to	6096
be consumed on the premises, motor vehicles as defined in section	6097
4501.01 of the Revised Code, and watercraft.	6098

The Tax Commissioner, in accordance with section 5703.14 of	6099
the Revised Code, shall adopt rules necessary to implement the	6100
exemption authorized by this section, and shall make available to	6101
vendors informational bulletins explaining the exemption.	6102

Section 18.  Section 5733.042 of the Revised Code, as	6103
amended by this act, first applies in tax year 2003.	6104

Section 19. BUDGET STABILIZATION FUND TRANSFERS

6105

Notwithstanding section 131.43 and division (D) of section	6106
127.14 of the Revised Code, if the Director of Budget and	6107
Management determines that revenues to the General Revenue Fund in	6108
fiscal years 2002 and 2003 are insufficient to cover agency	6109
appropriations for fiscal years 2002 and 2003, the Director of	6110
Budget and Management may, with Controlling Board approval,	6111
transfer up to $279 million over the biennium from the Budget	6112
Stabilization Fund to the General Revenue Fund.	6113

Section 20. TRANSFER FROM THE TOBACCO MASTER SETTLEMENT	6114
AGREEMENT FUND TO THE GENERAL REVENUE FUND	6115

Notwithstanding section 183.02 of the Revised Code, on or	6116
before June 30, 2002, the Director of Budget and Management may	6117
transfer up to $120,000,000 from the Tobacco Master Settlement	6118
Agreement Fund (Fund 087) to the General Revenue Fund.	6119

Notwithstanding section 183.02 of the Revised Code, on or	6120
before June 30, 2003, the Director of Budget and Management may	6121
transfer up to $120,000,000 from the Tobacco Master Settlement	6122
Agreement Fund (Fund 087) to the General Revenue Fund.	6123

Of the tobacco revenue that is credited to the Tobacco Master	6124
Settlement Agreement Fund in fiscal year 2002 and in fiscal year	6125
2003, the share that is determined pursuant to section 183.02 of	6126
the Revised Code to be the amount to be transferred by the	6127
Director of Budget and Management from the Tobacco Master	6128
Settlement Agreement Fund to the Tobacco Use Prevention and	6129
Cessation Trust Fund shall be reduced by the amount that is	6130
transferred from the Tobacco Master Settlement Agreement Fund to	6131
the General Revenue Fund in accordance with this section.	6132

Section 21. APPROPRIATION REDUCTIONS

6133

The General Revenue Fund appropriations contained in Am. Sub.	6134
H.B. 94 of the 124th General Assembly are hereby reduced by six	6135
per cent for each fiscal year of the 2002-2003 biennium for the	6136
following agencies: the Ohio House of Representatives; the Ohio	6137
Senate: the Joint Committee on Agency Rule Review: and the Joint	6138
Legislative Ethics Committee.	6139

Section 22. The General Assembly encourages the Administrator	6140
of Workers' Compensation, notwithstanding sections 4123.35 and	6141
4123.40 of the Revised Code, to apply a seventy-five percent	6142
premium credit for employers, except self-insuring employers, for	6143
the period when employer premiums are next due.	6144

Section 23.  Section 1309.401 (1309.528) of the Revised Code	6145
is presented in this act as a composite of the section as amended	6146
by Am. Sub. H.B. 94 and as amended and renumbered by Am. Sub. S.B.	6147
74, both of the 124th General Assembly. Section 5733.05 of the	6148
Revised Code is presented in this act as a composite of the	6149
section as amended by both Am. Sub. H.B. 283 and Am. Sub. S.B. 3	6150
of the 123rd General Assembly. Section 5739.02 of the Revised Code	6151
is presented in this act as a composite of the section as amended	6152
by both Am. Sub. H.B. 94 and Sub. H.B. 117 of the 124th General	6153
Assembly. The General Assembly, applying the principle stated in	6154
division (B) of section 1.52 of the Revised Code that amendments	6155
are to be harmonized if reasonably capable of simultaneous	6156
operation, finds that the composites are the resulting versions of	6157
the sections in effect prior to the effective date of the sections	6158
as presented in this act.	6159

Section 24. The codified and uncodified sections of law	6160
amended or enacted by this act, and the items of law of which such	6161
sections are composed, are not subject to the referendum.	6162
Therefore, under Ohio Constitution, Article II, Section 1d and	6163
section 1.471 of the Revised Code, the sections as amended or	6164
enacted by this act, and the items of law of which such sections	6165
are composed, are entitled to go into immediate effect when this	6166
act becomes law.	6167