SENATORS Mumper, Jordan, Spada, Mead, DiDonato, Amstutz, Austria, Randy Gardner, Robert Gardner, Harris, Hottinger, Jacobson, Oelslager, Wachtmann, White, Carnes, Ryan, Prentiss

To amend sections 3706.01, 5733.98, and 5747.98 and to

1

enact sections 901.13, 5733.46, and 5747.75 of the

2

Revised Code to create the Ethanol Incentive Board,

3

to create a tax credit against corporation

4

franchise or income tax liability for investments

5

in ethanol plants whose business plans have been

6

approved by the Board, and to provide that ethanol

7

plants are air quality facilities eligible for Ohio

8

Air Quality Development Authority financing.

9

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

Section 1. That sections 3706.01, 5733.98, and 5747.98 be	10
amended and sections 901.13, 5733.46, and 5747.75 of the Revised	11
Code be enacted to read as follows:	12

Sec. 901.13. (A) As used in this section:

13

(1) "Ethanol" has the same meaning as in section 5733.46 of	14
the Revised Code.	15

(2) "Facility" means an ethanol production plant that will be	16
located in this state.	17

(B) There is hereby created the ethanol incentive board. The	18
board shall consist of the following five members: the director of	19
agriculture, who shall serve as chairperson of the board, the	20
director of development, the executive director of the Ohio air	21
quality development authority, one member appointed by the speaker	22
of the house of representatives, and one member appointed by the	23
president of the senate. Initial appointments to the board shall	24
be made within thirty days of the effective date of this section.	25
Vacancies shall be filled in the same manner provided for original	26
appointments. Members of the board shall serve without	27
compensation. The board shall meet and conduct its business as	28
directed by the chairperson. The board shall cease to exist	29
January 1, 2012.	30

(C) The board's sole duty is to review any application that	31
is submitted to it under this section. The board shall approve an	32
application only if it determines, by the affirmative vote of all	33
members of the board, that the applicant's business plan for a	34
facility meets the requirements established by division (D) of	35
this section.	36

(D) The owner of a facility may apply to the board, on an	37
application provided by the director of agriculture, for approval	38
of the facility's business plan under this section. Within sixty	39
days of receipt of an application, the board shall determine	40
whether the applicant's business plan meets the following	41
requirements:	42

(1) The business plan is for the construction and operation	43
of a facility;	44

(2) The business plan contains detailed information	45
regarding:	46

(a) The availability and price of corn in the area where the	47
facility will be located;	48

(b) The availability and cost of energy needed for operation	49
of the facility;	50

(c) The availability of water and waste disposal systems in	51
the area where the facility will be located;	52

(d) The availability of labor and a qualified site manager	53
for the facility.	54

(3) The business plan analyzes any proposed marketing	55
agreements for the products produced by the facility;	56

(4) The facility to be constructed and operated under the	57
business plan meets the eligibility requirements of Chapter 3706.	58
of the Revised Code such that application could be made to the	59
Ohio air quality development authority for a loan, grant, or other	60
financing under that chapter;	61

(5) The facility to be constructed and operated under the	62
business plan is majority-owned by Ohio farmers or will be prior	63
to the first day the facility commences production;	64

(6) The business plan meets any other requirements	65
established by the board under rules adopted in accordance with	66
division (G) of this section.	67

The board shall issue a certificate of approval for each	68
application approved under this section, and any taxpayer that	69
invests money in the facility for which a business plan has been	70
approved may claim a tax credit for such investment under section	71
5733.46 or 5747.75 of the Revised Code.	72

(E) Any business plan submitted to the board under this	73
section is not a public record subject to section 149.43 of the	74
Revised Code.	75

(F) The board shall notify the tax commissioner of any	76
certificate of approval issued under this section, within ten days	77
of its issuance.	78

(G) The director of agriculture, in consultation with the	79
director of development and in accordance with Chapter 119. of the	80
Revised Code, shall adopt rules necessary to implement this	81
section, including rules prescribing procedures and forms for	82
administering this section.	83

(H) The ethanol incentive board created by this section is	84
not an agency for purposes of section 101.82 to 101.87 of the	85
Revised Code.	86

Sec. 3706.01.  As used in this chapter:

87

(A) "Governmental agency" means a department, division, or	88
other unit of state government, a municipal corporation, county,	89
township, and other political subdivision, or any other public	90
corporation or agency having the power to acquire, construct, or	91
operate air quality facilities, the United States or any agency	92
thereof, and any agency, commission, or authority established	93
pursuant to an interstate compact or agreement.	94

(B) "Person" means any individual, firm, partnership,	95
association, or corporation, or any combination thereof.	96

(C) "Air contaminant" means particulate matter, dust, fumes,	97
gas, mist, smoke, noise, vapor, heat, radioactivity, radiation, or	98
odorous substance, or any combination thereof.	99

(D) "Air pollution" means the presence in the ambient air of	100
one or more air contaminants in sufficient quantity and of such	101
characteristics and duration as to injure human health or welfare,	102
plant or animal life, or property, or that unreasonably interferes	103
with the comfortable enjoyment of life or property.	104

(E) "Ambient air" means that portion of the atmosphere	105
outside of buildings and other enclosures, stacks, or ducts that	106
surrounds human, plant, or animal life, or property.	107

(F) "Emission" means the release into the outdoor atmosphere	108
of an air contaminant.	109

(G) "Air quality facility" means any of the following:

110

(1) Any method, modification or replacement of property,	111
process, device, structure, or equipment that removes, reduces,	112
prevents, contains, alters, conveys, stores, disperses, or	113
disposes of air contaminants or substances containing air	114
contaminants, or that renders less noxious or reduces the	115
concentration of air contaminants in the ambient air, including,	116
without limitation, facilities and expenditures that qualify as	117
air pollution control facilities under section 103 (C)(4)(F) of	118
the Internal Revenue Code of 1954, as amended, and regulations	119
adopted thereunder, motor;	120

(2) Motor vehicle inspection stations operated in accordance	121
with, and any equipment used for motor vehicle inspections	122
conducted under, section 3704.14 of the Revised Code and rules	123
adopted under it, any;	124

(3) Ethanol facilities, including any equipment used at the	125
ethanol facility for the production of ethanol;	126

(4) Any property or portion thereof used for the collection,	127
storage, treatment, utilization, processing, or final disposal of	128
solid waste resulting from any method, process, device, structure,	129
or equipment that removes, reduces, prevents, contains, alters,	130
conveys, stores, disperses, or disposes of air contaminants, or	131
that renders less noxious or reduces the concentration of air	132
contaminants in the ambient air, and any;	133

(5) Any property, device, or equipment that promotes the	134
reduction of emissions of air contaminants into the ambient air	135
through improvements in the efficiency of energy utilization or	136
energy conservation, and.	137

"Air quality facility" further includingincludes any	138
property or system to be used in whole or in part for any of such	139
the purposes in divisions (G)(1) to (5) of this section, whether	140
another purpose is also served, and any property or system	141
incidental to or whichthat has to do with, or the end purpose of	142
which is, any of the foregoing. Air quality facilities that are	143
defined in this division for industry, commerce, distribution, or	144
research, including public utility companies, are hereby	145
determined to be those whichthat qualify as facilities for the	146
control of air pollution and thermal pollution related to air	147
under Section 13 of Article VIII, Ohio Constitution.	148

(H) "Project" or "air quality project" means any air quality	149
facility, including undivided or other interests therein, acquired	150
or to be acquired or constructed or to be constructed by the Ohio	151
air quality development authority under this chapter, or acquired	152
or to be acquired or constructed or to be constructed by a	153
governmental agency or person with all or a part of the cost	154
thereof being paid from a loan or grant from the authority under	155
this chapter, including all buildings and facilities that the	156
authority determines necessary for the operation of the project,	157
together with all property, rights, easements, and interests that	158
may be required for the operation of the project.	159

(I) "Cost" as applied to an air quality project means the	160
cost of acquisition and construction, the cost of acquisition of	161
all land, rights-of-way, property rights, easements, franchise	162
rights, and interests required for such acquisition and	163
construction, the cost of demolishing or removing any buildings or	164
structures on land so acquired, including the cost of acquiring	165
any lands to which such buildings or structures may be moved, the	166
cost of acquiring or constructing and equipping a principal office	167
and sub-offices of the authority, the cost of diverting highways,	168
interchange of highways, and access roads to private property,	169
including the cost of land or easements for such access roads, the	170
cost of public utility and common carrier relocation or	171
duplication, the cost of all machinery, furnishings, and	172
equipment, financing charges, interest prior to and during	173
construction and for no more than eighteen months after completion	174
of construction, engineering, expenses of research and development	175
with respect to air quality facilities, legal expenses, plans,	176
specifications, surveys, studies, estimates of cost and revenues,	177
working capital, other expenses necessary or incident to	178
determining the feasibility or practicability of acquiring or	179
constructing such project, administrative expense, and such other	180
expense as may be necessary or incident to the acquisition or	181
construction of the project, the financing of such acquisition or	182
construction, including the amount authorized in the resolution of	183
the authority providing for the issuance of air quality revenue	184
bonds to be paid into any special funds from the proceeds of such	185
bonds, and the financing of the placing of such project in	186
operation. Any obligation, cost, or expense incurred by any	187
governmental agency or person for surveys, borings, preparation of	188
plans and specifications, and other engineering services, or any	189
other cost described above, in connection with the acquisition or	190
construction of a project may be regarded as a part of the cost of	191
that project and may be reimbursed out of the proceeds of air	192
quality revenue bonds as authorized by this chapter.	193

(J) "Owner" includes an individual, copartnership,	194
association, or corporation having any title or interest in any	195
property, rights, easements, or interests authorized to be	196
acquired by this chapter.	197

(K) "Revenues" means all rentals and other charges received	198
by the authority for the use or services of any air quality	199
project, any gift or grant received with respect to any air	200
quality project, any moneys received with respect to the lease,	201
sublease, sale, including installment sale or conditional sale, or	202
other disposition of an air quality project, moneys received in	203
repayment of and for interest on any loans made by the authority	204
to a person or governmental agency, whether from the United States	205
or any department, administration, or agency thereof, or	206
otherwise, proceeds of such bonds to the extent that use thereof	207
for payment of principal of, premium, if any, or interest on the	208
bonds is authorized by the authority, proceeds from any insurance,	209
condemnation, or guaranty pertaining to a project or property	210
mortgaged to secure bonds or pertaining to the financing of the	211
project, and income and profit from the investment of the proceeds	212
of air quality revenue bonds or of any revenues.	213

(L) "Public roads" includes all public highways, roads, and	214
streets in the state, whether maintained by the state, county,	215
city, township, or other political subdivision.	216

(M) "Public utility facilities" includes tracks, pipes,	217
mains, conduits, cables, wires, towers, poles, and other equipment	218
and appliances of any public utility.	219

(N) "Construction," unless the context indicates a different	220
meaning or intent, includes reconstruction, enlargement,	221
improvement, or providing furnishings or equipment.	222

(O) "Air quality revenue bonds," unless the context	223
indicates a different meaning or intent, includes air quality	224
revenue notes, air quality revenue renewal notes, and air quality	225
revenue refunding bonds, except that notes issued in anticipation	226
of the issuance of bonds shall have a maximum maturity of five	227
years as provided in section 3706.05 of the Revised Code and notes	228
or renewal notes issued as the definitive obligation may be issued	229
maturing at such time or times with a maximum maturity of forty	230
years from the date of issuance of the original note.	231

(P) "Solid waste" means any garbage; refuse; sludge from a	232
waste water treatment plant, water supply treatment plant, or air	233
pollution control facility; and other discarded material,	234
including solid, liquid, semisolid, or contained gaseous material	235
resulting from industrial, commercial, mining, and agricultural	236
operations, and from community activities, but not including solid	237
or dissolved material in domestic sewage, or solid or dissolved	238
material in irrigation return flows or industrial discharges that	239
are point sources subject to permits under section 402 of the	240
"Federal Water Pollution Control Act Amendments of 1972," 86 Stat.	241
880, 33 U.S.C.A. 1342, as amended, or source, special nuclear, or	242
byproduct material as defined by the "Atomic Energy Act of 1954,"	243
68 Stat. 921, 42 U.S.C.A. 2011, as amended.	244

(Q) "Sludge" means any solid, semisolid, or liquid waste,	245
other than a recyclable byproduct, generated from a municipal,	246
commercial, or industrial waste water treatment plant, water	247
supply plant, or air pollution control facility or any other such	248
wastes having similar characteristics and effects.	249

(R) "Ethanol facility" means a plant at which ethanol is	250
produced.	251

(S) "Ethanol" means fermentation ethyl alcohol derived from	252
agricultural products, including potatoes, cereal, grains, cheese	253
whey, and sugar beets; forest products; or other renewable	254
resources, including residue and waste generated from the	255
production, processing, and marketing of agricultural products,	256
forest products, and other renewable resources, that meets all of	257
the specifications in the American society for testing and	258
materials (ASTM) specification D 4806-88 and is denatured as	259
specified in Parts 20 and 21 of Title 27 of the Code of Federal	260
Regulations.	261

Sec. 5733.46. (A) As used in this section:

262

(1) "Ethanol" means fermentation ethyl alcohol derived from	263
agricultural products, including potatoes, cereal, grains, cheese	264
whey, and sugar beets; forest products; or other renewable	265
resources, including residue and waste generated from the	266
production, processing, and marketing of agricultural products,	267
forest products, and other renewable resources that meet all of	268
the specifications in the American society for testing and	269
materials (ASTM) specification D 4806-88 and is denatured as	270
specified in Parts 20 and 21 of Title 27 of the Code of Federal	271
Regulations.	272

(2) "Certified ethanol plant" means a facility at which	273
ethanol is produced and for which a certificate has been issued	274
under section 901.13 of the Revised Code.	275

(3) "Money" means United States currency, or a check, draft,	276
or cashier's check for United States currency, payable on demand	277
and drawn on a bank.	278

(B) Beginning in tax year 2001 and ending in tax year 2011,	279
there is hereby allowed a nonrefundable credit against the tax	280
imposed by section 5733.06 of the Revised Code for a taxpayer that	281
invests money in a certified ethanol plant. The amount of the	282
credit equals fifty per cent of the money the taxpayer invests in	283
the plant, but the credit amount shall not exceed five thousand	284
dollars. The credit shall be claimed in the tax year in which the	285
investment was made.	286

(C) The taxpayer shall claim the credit in the order	287
required by section 5733.98 of the Revised Code. Any credit	288
amount in excess of the tax due under section 5733.06 of the	289
Revised Code, after allowing for any other credits preceding the	290
credit in that order, may be carried forward for three tax years,	291
but the amount of the excess credit allowed in any such year shall	292
be deducted from the balance carried forward to the next year.	293

(D) The tax commissioner may require that the taxpayer	294
furnish information as is necessary to support the claim for the	295
credit under this section, and no credit shall be allowed unless	296
the information is provided.	297

Sec. 5733.98.  (A) To provide a uniform procedure for	299
calculating the amount of tax imposed by section 5733.06 of the	300
Revised Code that is due under this chapter, a taxpayer shall	301
claim any credits to which it is entitled in the following order,	302
except as otherwise provided in section 5733.058 of the Revised	303
Code:	304

(1) The credit for taxes paid by a qualifying pass-through	305
entity allowed under section 5733.0611 of the Revised Code;	306

(2) The credit allowed for financial institutions under	307
section 5733.45 of the Revised Code;	308

(3) The credit for qualifying affiliated groups under section	309
5733.068 of the Revised Code;	310

(4) The subsidiary corporation credit under section 5733.067	311
of the Revised Code;	312

(5) The savings and loan assessment credit under section	313
5733.063 of the Revised Code;	314

(6) The credit for recycling and litter prevention donations	315
under section 5733.064 of the Revised Code;	316

(7) The credit for employers that enter into agreements with	317
child day-care centers under section 5733.36 of the Revised Code;	318

(8) The credit for employers that reimburse employee child	319
day-care expenses under section 5733.38 of the Revised Code;	320

(9) The credit for maintaining railroad active grade crossing	321
warning devices under section 5733.43 of the Revised Code;	322

(10) The credit for purchases of lights and reflectors under	323
section 5733.44 of the Revised Code;	324

(11) The job retention credit under division (B) of section	325
5733.0610 of the Revised Code;	326

(12) The credit for manufacturing investments under section	327
5733.061 of the Revised Code;	328

(13) The credit for purchases of new manufacturing machinery	329
and equipment under section 5733.31 or section 5733.311 of the	330
Revised Code;	331

(14) The second credit for purchases of new manufacturing	332
machinery and equipment under section 5733.33 of the Revised Code;	333

(15) The job training credit under section 5733.42 of the	334
Revised Code;	335

(16) The credit for qualified research expenses under	336
section 5733.351 of the Revised Code;	337

(17) The enterprise zone credit under section 5709.66 of the	338
Revised Code;	339

(18) The credit for the eligible costs associated with a	340
voluntary action under section 5733.34 of the Revised Code;	341

(19) The credit for employers that establish on-site child	342
day-care under section 5733.37 of the Revised Code;	343

(20) The ethanol plant investment credit under section	344
5733.46 of the Revised Code;	345

(21) The credit for purchases of qualifying grape production	346
property under section 5733.32 of the Revised Code;	347

(21)(22) The export sales credit under section 5733.069 of	348
the Revised Code;	349

(22)(23) The credit for research and development and	350
technology transfer investors under section 5733.35 of the Revised	351
Code;	352

(23)(24) The enterprise zone credits under section 5709.65 of	353
the Revised Code;	354

(24)(25) The credit for using Ohio coal under section	355
5733.39 of the Revised Code;	356

(25)(26) The refundable jobs creation credit under division	357
(A) of section 5733.0610 of the Revised Code.	358

(B) For any credit except the refundable jobs creation	359
credit, the amount of the credit for a tax year shall not exceed	360
the tax due after allowing for any other credit that precedes it	361
in the order required under this section. Any excess amount of a	362
particular credit may be carried forward if authorized under the	363
section creating that credit.	364

Sec. 5747.75. (A) As used in this section:

365

(1) "Ethanol" means fermentation ethyl alcohol derived from	366
agricultural products, including potatoes, cereal, grains, cheese	367
whey, and sugar beets; forest products; or other renewable	368
resources, including residue and waste generated from the	369
production, processing, and marketing of agricultural products,	370
forest products, and other renewable resources that meet all of	371
the specifications in the American society for testing and	372
materials (ASTM) specification D 4806-88 and is denatured as	373
specified in Parts 20 and 21 of Title 27 of the Code of Federal	374
Regulations.	375

(2) "Certified ethanol plant" means a facility at which	376
ethanol is produced and for which a certificate has been issued	377
under section 901.13 of the Revised Code.	378

(3) "Money" means United States currency, or a check, draft,	379
or cashier's check for United States currency, payable on demand	380
and drawn on a bank.	381

(B) Beginning in taxable year 2001 and ending in taxable	382
year 2011, there is hereby allowed a nonrefundable credit against	383
the tax imposed by section 5747.02 of the Revised Code for a	384
taxpayer that invests money in a certified ethanol plant. The	385
amount of the credit equals fifty per cent of the money the	386
taxpayer invests in the plant, but the credit amount shall not	387
exceed five thousand dollars. The credit shall be claimed in the	388
taxable year in which the investment was made.	389

(C) The taxpayer shall claim the credit in the order	390
required by section 5747.98 of the Revised Code. Any credit	391
amount in excess of the tax due under section 5747.02 of the	392
Revised Code, after allowing for any other credits preceding the	393
credit in that order, may be carried forward for three taxable	394
years, but the amount of the excess credit allowed in any such	395
year shall be deducted from the balance carried forward to the	396
next year.	397

(D) If the taxpayer is a direct or indirect investor in a	398
pass-through entity that has made an investment under this	399
section, the taxpayer may claim its proportionate or distributive	400
share of the credit allowed under this section.	401

(E) The tax commissioner may require that the taxpayer	402
furnish information as is necessary to support the claim for the	403
credit under this section, and no credit shall be allowed unless	404
the information is provided.	405

Sec. 5747.98.  (A) To provide a uniform procedure for	406
calculating the amount of tax due under section 5747.02 of the	407
Revised Code, a taxpayer shall claim any credits to which the	408
taxpayer is entitled in the following order:	409

(1) The retirement income credit under division (B) of	410
section 5747.055 of the Revised Code;	411

(2) The senior citizen credit under division (C) of section	412
5747.05 of the Revised Code;	413

(3) The lump sum distribution credit under division (D) of	414
section 5747.05 of the Revised Code;	415

(4) The dependent care credit under section 5747.054 of the	416
Revised Code;	417

(5) The lump sum retirement income credit under division (C)	418
of section 5747.055 of the Revised Code;	419

(6) The lump sum retirement income credit under division (D)	420
of section 5747.055 of the Revised Code;	421

(7) The lump sum retirement income credit under division (E)	422
of section 5747.055 of the Revised Code;	423

(8) The credit for displaced workers who pay for job	424
training under section 5747.27 of the Revised Code;	425

(9) The campaign contribution credit under section 5747.29	426
of the Revised Code;	427

(10) The twenty-dollar personal exemption credit under	428
section 5747.022 of the Revised Code;	429

(11) The joint filing credit under division (G) of section	430
5747.05 of the Revised Code;	431

(12) The nonresident credit under division (A) of section	432
5747.05 of the Revised Code;	433

(13) The credit for a resident's out-of-state income under	434
division (B) of section 5747.05 of the Revised Code;	435

(14) The credit for employers that enter into agreements	436
with child day-care centers under section 5747.34 of the Revised	437
Code;	438

(15) The credit for employers that reimburse employee child	439
day-care expenses under section 5747.36 of the Revised Code;	440

(16) The credit for adoption of a minor child under section	441
5747.37 of the Revised Code;	442

(17) The credit for purchases of lights and reflectors under	443
section 5747.38 of the Revised Code;	444

(18) The job retention credit under division (B) of section	445
5747.058 of the Revised Code;	446

(19) The credit for manufacturing investments under section	447
5747.051 of the Revised Code;	448

(20) The credit for purchases of new manufacturing machinery	449
and equipment under section 5747.26 or section 5747.261 of the	450
Revised Code;	451

(21) The second credit for purchases of new manufacturing	452
machinery and equipment and the credit for using Ohio coal under	453
section 5747.31 of the Revised Code;	454

(22) The job training credit under section 5747.39 of the	455
Revised Code;	456

(23) The enterprise zone credit under section 5709.66 of the	457
Revised Code;	458

(24) The credit for the eligible costs associated with a	459
voluntary action under section 5747.32 of the Revised Code;	460

(25) The credit for employers that establish on-site child	461
day-care centers under section 5747.35 of the Revised Code;	462

(26) The ethanol plant investment credit under section	463
5747.75 of the Revised Code;	464

(27) The credit for purchases of qualifying grape production	465
property under section 5747.28 of the Revised Code;	466

(27)(28) The export sales credit under section 5747.057 of	467
the Revised Code;	468

(28)(29) The credit for research and development and	469
technology transfer investors under section 5747.33 of the Revised	470
Code;	471

(29)(30) The enterprise zone credits under section 5709.65	472
of the Revised Code;	473

(30)(31) The refundable jobs creation credit under division	474
(A) of section 5747.058 of the Revised Code;	475

(31)(32) The refundable credit for taxes paid by a	476
qualifying entity granted under section 5747.059 of the Revised	477
Code;	478

(32)(33) The refundable credits for taxes paid by a	479
qualifying pass-through entity granted under division (J) of	480
section 5747.08 of the Revised Code.	481

(B) For any credit, except the refundable credits enumerated	482
in divisions (A)(30), (31), and (32), and (33) of this section	483
and the credit granted under division (I) of section 5747.08 of	484
the Revised Code, the amount of the credit for a taxable year	485
shall not exceed the tax due after allowing for any other credit	486
that precedes it in the order required under this section. Any	487
excess amount of a particular credit may be carried forward if	488
authorized under the section creating that credit. Nothing in this	489
chapter shall be construed to allow a taxpayer to claim, directly	490
or indirectly, a credit more than once for a taxable year.	491

Section 2. That existing sections 3706.01, 5733.98, and	492
5747.98 of the Revised Code are hereby repealed.	493