SENATOR Carnes

To amend sections 5733.04, 5733.05, 5743.02, 5743.05,

1

5743.32, and 5747.01, to enact sections 5733.043,

2

5733.045, and 5747.011, and to repeal sections

3

5743.023 and 5743.322 of the Revised Code and to

4

amend Sections 63.18, 125, and 144 of Am. Sub. H.B.

5

94 of the 124th General Assembly; to amend Section

6

63 of Am. Sub. H.B. 94 of the 124th General

7

Assembly, as subsequently amended; to amend Section

8

29 of Am. Sub. H.B. 405 of the 124th General

9

Assembly; and to repeal Section 31 of Am. Sub. H.B.

10

405 of the 124th General Assembly to increase the

11

rate of tax on cigarettes; to require corporations

12

and individuals, in computing franchise or income

13

tax liability, to add back some of the depreciation

14

bonus permitted under federal law; to make

15

budgetary modifications; and to make an

16

appropriation.

17

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

Section 1. That sections 5733.04, 5733.05, 5743.02, 5743.05,	18
5743.32, and 5747.01 be amended and sections 5733.043, 5733.045,	19
and 5747.011 of the Revised Code be enacted to read as follows:	20

Sec. 5733.04.  As used in this chapter:

21

(A) "Issued and outstanding shares of stock" applies to	22
nonprofit corporations, as provided in section 5733.01 of the	23
Revised Code, and includes, but is not limited to, membership	24
certificates and other instruments evidencing ownership of an	25
interest in such nonprofit corporations, and with respect to a	26
financial institution that does not have capital stock, "issued	27
and outstanding shares of stock" includes, but is not limited to,	28
ownership interests of depositors in the capital employed in such	29
an institution.	30

(B) "Taxpayer" means a corporation subject to the tax	31
imposed by section 5733.06 of the Revised Code.	32

(C) "Resident" means a corporation organized under the laws	33
of this state.	34

(D) "Commercial domicile" means the principal place from	35
which the trade or business of the taxpayer is directed or	36
managed.	37

(E) "Taxable year" means the period prescribed by division	38
(A) of section 5733.031 of the Revised Code upon the net income of	39
which the value of the taxpayer's issued and outstanding shares of	40
stock is determined under division (B) of section 5733.05 of the	41
Revised Code or the period prescribed by division (A) of section	42
5733.031 of the Revised Code that immediately precedes the date as	43
of which the total value of the corporation is determined under	44
division (A) or (C) of section 5733.05 of the Revised Code.	45

(F) "Tax year" means the calendar year in and for which the	46
tax imposed by section 5733.06 of the Revised Code is required to	47
be paid.	48

(G) "Internal Revenue Code" means the "Internal Revenue Code	49
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	50

(H) "Federal income tax" means the income tax imposed by the	51
Internal Revenue Code.	52

(I) Except as provided in section 5733.058 of the Revised	53
Code, "net income" means the taxpayer's taxable income before	54
operating loss deduction and special deductions, as required to be	55
reported for the taxpayer's taxable year under the Internal	56
Revenue Code, subject to the following adjustments:	57

(1)(a) Deduct any net operating loss incurred in any taxable	58
years ending in 1971 or thereafter but exclusive of any net	59
operating loss incurred in taxable years ending prior to January	60
1, 1971. This deduction shall not be allowed in any tax year	61
commencing before December 31, 1973, but shall be carried over and	62
allowed in tax years commencing after December 31, 1973, until	63
fully utilized in the next succeeding taxable year or years in	64
which the taxpayer has net income, but in no case for more than	65
the designated carryover period as described in division (I)(1)(b)	66
of this section. The amount of such net operating loss, as	67
determined under the allocation and apportionment provisions of	68
section 5733.051 and division (B) of section 5733.05 of the	69
Revised Code for the year in which the net operating loss occurs,	70
shall be deducted from net income, as determined under the	71
allocation and apportionment provisions of section 5733.051 and	72
division (B) of section 5733.05 of the Revised Code, to the extent	73
necessary to reduce net income to zero with the remaining unused	74
portion of the deduction, if any, carried forward to the remaining	75
years of the designated carryover period as described in division	76
(I)(1)(b) of this section, or until fully utilized, whichever	77
occurs first.	78

(b) For losses incurred in taxable years ending on or before	79
December 31, 1981, the designated carryover period shall be the	80
five consecutive taxable years after the taxable year in which the	81
net operating loss occurred. For losses incurred in taxable years	82
ending on or after January 1, 1982, the designated carryover	83
period shall be the fifteen consecutive taxable years after the	84
taxable year in which the net operating loss occurs.	85

(c) The tax commissioner may require a taxpayer to furnish	86
any information necessary to support a claim for deduction under	87
division (I)(1)(a) of this section and no deduction shall be	88
allowed unless the information is furnished.	89

(2) Deduct any amount included in net income by application	90
of section 78 or 951 of the Internal Revenue Code, amounts	91
received for royalties, technical or other services derived from	92
sources outside the United States, and dividends received from a	93
subsidiary, associate, or affiliated corporation that neither	94
transacts any substantial portion of its business nor regularly	95
maintains any substantial portion of its assets within the United	96
States. For purposes of determining net foreign source income	97
deductible under division (I)(2) of this section, the amount of	98
gross income from all such sources other than dividend income and	99
income derived by application of section 78 or 951 of the Internal	100
Revenue Code shall be reduced by:	101

(a) The amount of any reimbursed expenses for personal	102
services performed by employees of the taxpayer for the	103
subsidiary, associate, or affiliated corporation;	104

(b) Ten per cent of the amount of royalty income and	105
technical assistance fees;	106

(c) Fifteen per cent of the amount of dividends and all	107
other income.	108

The amounts described in divisions (I)(2)(a) to (c) of this	109
section are deemed to be the expenses attributable to the	110
production of deductible foreign source income unless the taxpayer	111
shows, by clear and convincing evidence, less actual expenses, or	112
the tax commissioner shows, by clear and convincing evidence, more	113
actual expenses.	114

(3) Add any loss or deduct any gain resulting from the sale,	115
exchange, or other disposition of a capital asset, or an asset	116
described in section 1231 of the Internal Revenue Code, to the	117
extent that such loss or gain occurred prior to the first taxable	118
year on which the tax provided for in section 5733.06 of the	119
Revised Code is computed on the corporation's net income. For	120
purposes of division (I)(3) of this section, the amount of the	121
prior loss or gain shall be measured by the difference between the	122
original cost or other basis of the asset and the fair market	123
value as of the beginning of the first taxable year on which the	124
tax provided for in section 5733.06 of the Revised Code is	125
computed on the corporation's net income. At the option of the	126
taxpayer, the amount of the prior loss or gain may be a percentage	127
of the gain or loss, which percentage shall be determined by	128
multiplying the gain or loss by a fraction, the numerator of which	129
is the number of months from the acquisition of the asset to the	130
beginning of the first taxable year on which the fee provided in	131
section 5733.06 of the Revised Code is computed on the	132
corporation's net income, and the denominator of which is the	133
number of months from the acquisition of the asset to the sale,	134
exchange, or other disposition of the asset. The adjustments	135
described in this division do not apply to any gain or loss where	136
the gain or loss is recognized by a qualifying taxpayer, as	137
defined in section 5733.0510 of the Revised Code, with respect to	138
a qualifying taxable event, as defined in that section.	139

(4) Deduct the dividend received deduction provided by	140
section 243 of the Internal Revenue Code.	141

(5) Deduct any interest or interest equivalent on public	142
obligations and purchase obligations to the extent included in	143
federal taxable income. As used in divisions (I)(5) and (6) of	144
this section, "public obligations," "purchase obligations," and	145
"interest or interest equivalent" have the same meanings as in	146
section 5709.76 of the Revised Code.	147

(6) Add any loss or deduct any gain resulting from the sale,	148
exchange, or other disposition of public obligations to the extent	149
included in federal taxable income.	150

(7) To the extent not otherwise allowed, deduct any	151
dividends or distributions received by a taxpayer from a public	152
utility, excluding an electric company, if the taxpayer owns at	153
least eighty per cent of the issued and outstanding common stock	154
of the public utility. As used in division (I)(7) of this	155
section, "public utility" means a public utility as defined in	156
Chapter 5727. of the Revised Code, whether or not the public	157
utility is doing business in the state.	158

(8) To the extent not otherwise allowed, deduct any	159
dividends received by a taxpayer from an insurance company, if the	160
taxpayer owns at least eighty per cent of the issued and	161
outstanding common stock of the insurance company. As used in	162
division (I)(8) of this section, "insurance company" means an	163
insurance company that is taxable under Chapter 5725. or 5729. of	164
the Revised Code.	165

(9) Deduct expenditures for modifying existing buildings or	166
structures to meet American national standards institute standard	167
A-117.1-1961 (R-1971), as amended; provided, that no deduction	168
shall be allowed to the extent that such deduction is not	169
permitted under federal law or under rules of the tax	170
commissioner. Those deductions as are allowed may be taken over a	171
period of five years. The tax commissioner shall adopt rules	172
under Chapter 119. of the Revised Code establishing reasonable	173
limitations on the extent that expenditures for modifying existing	174
buildings or structures are attributable to the purpose of making	175
the buildings or structures accessible to and usable by physically	176
handicapped persons.	177

(10) Deduct the amount of wages and salaries, if any, not	178
otherwise allowable as a deduction but that would have been	179
allowable as a deduction in computing federal taxable income	180
before operating loss deduction and special deductions for the	181
taxable year, had the targeted jobs credit allowed and determined	182
under sections 38, 51, and 52 of the Internal Revenue Code not	183
been in effect.	184

(11) Deduct net interest income on obligations of the United	185
States and its territories and possessions or of any authority,	186
commission, or instrumentality of the United States to the extent	187
the laws of the United States prohibit inclusion of the net	188
interest for purposes of determining the value of the taxpayer's	189
issued and outstanding shares of stock under division (B) of	190
section 5733.05 of the Revised Code. As used in division (I)(11)	191
of this section, "net interest" means interest net of any expenses	192
taken on the federal income tax return that would not have been	193
allowed under section 265 of the Internal Revenue Code if the	194
interest were exempt from federal income tax.	195

(12)(a) Except as set forth in division (I)(12)(d) of this	196
section, to the extent not included in computing the taxpayer's	197
federal taxable income before operating loss deduction and special	198
deductions, add gains and deduct losses from direct or indirect	199
sales, exchanges, or other dispositions, made by a related entity	200
who is not a taxpayer, of the taxpayer's indirect, beneficial, or	201
constructive investment in the stock or debt of another entity,	202
unless the gain or loss has been included in computing the federal	203
taxable income before operating loss deduction and special	204
deductions of another taxpayer with a more closely related	205
investment in the stock or debt of the other entity. The amount	206
of gain added or loss deducted shall not exceed the product	207
obtained by multiplying such gain or loss by the taxpayer's	208
proportionate share, directly, indirectly, beneficially, or	209
constructively, of the outstanding stock of the related entity	210
immediately prior to the direct or indirect sale, exchange, or	211
other disposition.	212

(b) Except as set forth in division (I)(12)(e) of this	213
section, to the extent not included in computing the taxpayer's	214
federal taxable income before operating loss deduction and special	215
deductions, add gains and deduct losses from direct or indirect	216
sales, exchanges, or other dispositions made by a related entity	217
who is not a taxpayer, of intangible property other than stock,	218
securities, and debt, if such property was owned, or used in whole	219
or in part, at any time prior to or at the time of the sale,	220
exchange, or disposition by either the taxpayer or by a related	221
entity that was a taxpayer at any time during the related entity's	222
ownership or use of such property, unless the gain or loss has	223
been included in computing the federal taxable income before	224
operating loss deduction and special deductions of another	225
taxpayer with a more closely related ownership or use of such	226
intangible property. The amount of gain added or loss deducted	227
shall not exceed the product obtained by multiplying such gain or	228
loss by the taxpayer's proportionate share, directly, indirectly,	229
beneficially, or constructively, of the outstanding stock of the	230
related entity immediately prior to the direct or indirect sale,	231
exchange, or other disposition.	232

(c) As used in division (I)(12) of this section, "related	233
entity" means those entities described in divisions (I)(12)(c)(i)	234
to (iii) of this section:	235

(i) An individual stockholder, or a member of the	236
stockholder's family enumerated in section 318 of the Internal	237
Revenue Code, if the stockholder and the members of the	238
stockholder's family own, directly, indirectly, beneficially, or	239
constructively, in the aggregate, at least fifty per cent of the	240
value of the taxpayer's outstanding stock;	241

(ii) A stockholder, or a stockholder's partnership, estate,	242
trust, or corporation, if the stockholder and the stockholder's	243
partnerships, estates, trusts, and corporations own directly,	244
indirectly, beneficially, or constructively, in the aggregate, at	245
least fifty per cent of the value of the taxpayer's outstanding	246
stock;	247

(iii) A corporation, or a party related to the corporation	248
in a manner that would require an attribution of stock from the	249
corporation to the party or from the party to the corporation	250
under division (I)(12)(c)(iv) of this section, if the taxpayer	251
owns, directly, indirectly, beneficially, or constructively, at	252
least fifty per cent of the value of the corporation's outstanding	253
stock.	254

(iv) The attribution rules of section 318 of the Internal	255
Revenue Code apply for purposes of determining whether the	256
ownership requirements in divisions (I)(12)(c)(i) to (iii) of this	257
section have been met.	258

(d) For purposes of the adjustments required by division	259
(I)(12)(a) of this section, the term "investment in the stock or	260
debt of another entity" means only those investments where the	261
taxpayer and the taxpayer's related entities directly, indirectly,	262
beneficially, or constructively own, in the aggregate, at any time	263
during the twenty-four month period commencing one year prior to	264
the direct or indirect sale, exchange, or other disposition of	265
such investment at least fifty per cent or more of the value of	266
either the outstanding stock or such debt of such other entity.	267

(e) For purposes of the adjustments required by division	268
(I)(12)(b) of this section, the term "related entity" excludes all	269
of the following:	270

(i) Foreign corporations as defined in section 7701 of the	271
Internal Revenue Code;	272

(ii) Foreign partnerships as defined in section 7701 of the	273
Internal Revenue Code;	274

(iii) Corporations, partnerships, estates, and trusts	275
created or organized in or under the laws of the Commonwealth of	276
Puerto Rico or any possession of the United States;	277

(iv) Foreign estates and foreign trusts as defined in	278
section 7701 of the Internal Revenue Code.	279

The exclusions described in divisions (I)(12)(e)(i) to (iv)	280
of this section do not apply if the corporation, partnership,	281
estate, or trust is described in any one of divisions (C)(1) to	282
(5) of section 5733.042 of the Revised Code.	283

(f) Nothing in division (I)(12) of this section shall	284
require or permit a taxpayer to add any gains or deduct any losses	285
described in divisions (I)(12)(f)(i) and (ii) of this section:	286

(i) Gains or losses recognized for federal income tax	287
purposes by an individual, estate, or trust without regard to the	288
attribution rules described in division (I)(12)(c) of this	289
section;	290

(ii) A related entity's gains or losses described in	291
division (I)(12)(b) if the taxpayer's ownership of or use of such	292
intangible property was limited to a period not exceeding nine	293
months and was attributable to a transaction or a series of	294
transactions executed in accordance with the election or elections	295
made by the taxpayer or a related entity pursuant to section 338	296
of the Internal Revenue Code.	297

(13) Any adjustment required by section 5733.042 of the	298
Revised Code.	299

(14) Add any amount claimed as a credit under section	300
5733.0611 of the Revised Code to the extent that such amount	301
satisfies either of the following:	302

(a) It was deducted or excluded from the computation of the	303
corporation's taxable income before operating loss deduction and	304
special deductions as required to be reported for the	305
corporation's taxable year under the Internal Revenue Code;	306

(b) It resulted in a reduction of the corporation's taxable	307
income before operating loss deduction and special deductions as	308
required to be reported for any of the corporation's taxable years	309
under the Internal Revenue Code.	310

(15) Deduct the amount contributed by the taxpayer to an	311
individual development account program established by a county	312
department of job and family services pursuant to sections 329.11	313
to 329.14 of the Revised Code for the purpose of matching funds	314
deposited by program participants. On request of the tax	315
commissioner, the taxpayer shall provide any information that, in	316
the tax commissioner's opinion, is necessary to establish the	317
amount deducted under division (I)(15) of this section.	318

(16) Any adjustment required by section 5733.0510 of the	319
Revised Code.	320

(17)(a) Add five-sixths of the amount of depreciation	321
expense allowed under subsection (k) of section 168 of the	322
Internal Revenue Code. Nothing in division (I)(17) of this	323
section shall be construed to exclude from the add-back required	324
by that division five-sixths of a person's proportionate or	325
distributive share of the amount of depreciation expense allowed	326
by subsection (k) of section 168 of the Internal Revenue Code to	327
any pass-through entity in which the person has direct or indirect	328
ownership.	329

(b) Nothing in division (I)(17) of this section shall be	330
construed to adjust or modify the adjusted basis of any asset.	331

(c) To the extent the add-back is attributable to property	332
generating allocable income enumerated in section 5733.051 of the	333
Revised Code, the add-back shall be considered to be allocable	334
income for the purposes of that section.	335

(J) Any term used in this chapter has the same meaning as	336
when used in comparable context in the laws of the United States	337
relating to federal income taxes unless a different meaning is	338
clearly required. Any reference in this chapter to the Internal	339
Revenue Code includes other laws of the United States relating to	340
federal income taxes.	341

(K) "Financial institution" has the meaning given by section	342
5725.01 of the Revised Code but does not include a production	343
credit association as described in 85 Stat. 597, 12 U.S.C.A. 2091.	344

(L)(1) A "qualifying holding company" is any corporation	345
satisfying all of the following requirements:	346

(a) Subject to divisions (L)(2) and (3) of this section, the	347
net book value of the corporation's intangible assets is greater	348
than or equal to ninety per cent of the net book value of all of	349
its assets and at least fifty per cent of the net book value of	350
all of its assets represents direct or indirect investments in the	351
equity of, loans and advances to, and accounts receivable due from	352
related members;	353

(b) At least ninety per cent of the corporation's gross	354
income for the taxable year is attributable to the following:	355

(i) The maintenance, management, ownership, acquisition,	356
use, and disposition of its intangible property, its aircraft the	357
use of which is not subject to regulation under 14 C.F.R. part 121	358
or part 135, and any real property described in division (L)(2)(c)	359
of this section;	360

(ii) The collection and distribution of income from such	361
property.	362

(c) The corporation is not a financial institution on the	363
last day of the taxable year ending prior to the first day of the	364
tax year;	365

(d) The corporation's related members make a good faith and	366
reasonable effort to make timely and fully the adjustments	367
required by division (C)(2) of section 5733.05 of the Revised Code	368
and to pay timely and fully all uncontested taxes, interest,	369
penalties, and other fees and charges imposed under this chapter;	370

(e) Subject to division (L)(4) of this section, the	371
corporation elects to be treated as a qualifying holding company	372
for the tax year.	373

A corporation otherwise satisfying divisions (L)(1)(a) to (e)	374
of this section that does not elect to be a qualifying holding	375
company is not a qualifying holding company for the purposes of	376
this chapter.	377

(2)(a)(i) For purposes of making the ninety per cent	378
computation under division (L)(1)(a) of this section, the net book	379
value of the corporation's assets shall not include the net book	380
value of aircraft or real property described in division	381
(L)(1)(b)(i) of this section.	382

(ii) For purposes of making the fifty per cent computation	383
under division (L)(1)(a) of this section, the net book value of	384
assets shall include the net book value of aircraft or real	385
property described in division (L)(1)(b)(i) of this section.	386

(b)(i) As used in division (L) of this section, "intangible	387
asset" includes, but is not limited to, the corporation's direct	388
interest in each pass-through entity only if at all times during	389
the corporation's taxable year ending prior to the first day of	390
the tax year the corporation's and the corporation's related	391
members' combined direct and indirect interests in the capital or	392
profits of such pass-through entity do not exceed fifty per cent.	393
If the corporation's interest in the pass-through entity is an	394
intangible asset for that taxable year, then the distributive	395
share of any income from the pass-through entity shall be income	396
from an intangible asset for that taxable year.	397

(ii) If a corporation's and the corporation's related	398
members' combined direct and indirect interests in the capital or	399
profits of a pass-through entity exceed fifty per cent at any time	400
during the corporation's taxable year ending prior to the first	401
day of the tax year, "intangible asset" does not include the	402
corporation's direct interest in the pass-through entity, and the	403
corporation shall include in its assets its proportionate share of	404
the assets of any such pass-through entity and shall include in	405
its gross income its distributive share of the gross income of	406
such pass-through entity in the same form as was earned by the	407
pass-through entity.	408

(iii) A pass-through entity's direct or indirect	409
proportionate share of any other pass-through entity's assets	410
shall be included for the purpose of computing the corporation's	411
proportionate share of the pass-through entity's assets under	412
division (L)(2)(b)(ii) of this section, and such pass-through	413
entity's distributive share of any other pass-through entity's	414
gross income shall be included for purposes of computing the	415
corporation's distributive share of the pass-through entity's	416
gross income under division (L)(2)(b)(ii) of this section.	417

(c) For the purposes of divisions (L)(1)(b)(i), (1)(b)(ii),	418
(2)(a)(i), and (2)(a)(ii) of this section, real property is	419
described in division (L)(2)(c) of this section only if all of the	420
following conditions are present at all times during the taxable	421
year ending prior to the first day of the tax year:	422

(i) The real property serves as the headquarters of the	423
corporation's trade or business, or is the place from which the	424
corporation's trade or business is principally managed or	425
directed;	426

(ii) Not more than ten per cent of the value of the real	427
property and not more than ten per cent of the square footage of	428
the building or buildings that are part of the real property is	429
used, made available, or occupied for the purpose of providing,	430
acquiring, transferring, selling, or disposing of tangible	431
property or services in the normal course of business to persons	432
other than related members, the corporation's employees and their	433
families, and such related members' employees and their families.	434

(d) As used in division (L) of this section, "related	435
member" has the same meaning as in division (A)(6) of section	436
5733.042 of the Revised Code without regard to division (B) of	437
that section.	438

(3) The percentages described in division (L)(1)(a) of this	439
section shall be equal to the quarterly average of those	440
percentages as calculated during the corporation's taxable year	441
ending prior to the first day of the tax year.	442

(4) With respect to the election described in division	443
(L)(1)(e) of this section:	444

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

445

(b) The election need not accompany the report; rather, the	446
election may accompany a subsequently filed but timely application	447
for refund and timely amended report, or a subsequently filed but	448
timely petition for reassessment;	449

(c) The election is not irrevocable;

450

(d) The election applies only to the tax year specified by	451
the corporation;	452

(e) The corporation's related members comply with division	453
(L)(1)(d) of this section.	454

Nothing in division (L)(4) of this section shall be construed	455
to extend any statute of limitations set forth in this chapter.	456

(M) "Qualifying controlled group" means two or more	457
corporations that satisfy the ownership and control requirements	458
of division (A) of section 5733.052 of the Revised Code.	459

(N) "Limited liability company" means any limited liability	460
company formed under Chapter 1705. of the Revised Code or under	461
the laws of any other state.	462

(O) "Pass-through entity" means a corporation that has made	463
an election under subchapter S of Chapter 1 of Subtitle A of the	464
Internal Revenue Code for its taxable year under that code, or a	465
partnership, limited liability company, or any other person, other	466
than an individual, trust, or estate, if the partnership, limited	467
liability company, or other person is not classified for federal	468
income tax purposes as an association taxed as a corporation.	469

(P) "Electric company" and "combined company" have the same	470
meanings as in section 5727.01 of the Revised Code.	471

Sec. 5733.043.  (A)(1) If the tax computed under division	472
(C) of section 5733.06 of the Revised Code is greater than the tax	473
computed under divisions (A) and (B) of that section, and if the	474
amount described in division (B) of section 5733.05 of the Revised	475
Code without the application of division (C) of this section and	476
division (I)(17)(a) of section 5733.04 of the Revised Code, is	477
greater than zero, then the "suspended tax benefit portion of the	478
depreciation expense deduction" is zero.	479

(2) If the tax computed under division (C) of section	480
5733.06 of the Revised Code is greater than the tax computed under	481
divisions (A) and (B) of that section, the amount described in	482
division (B) of section 5733.05 of the Revised Code is equal to or	483
greater that zero, and the amount described in division (B) of	484
section 5733.05 of the Revised Code without the application of	485
division (C) of this section and division (I)(17)(a) of section	486
5733.04 of the Revised Code is less than zero, the "suspended tax	487
benefit portion of the depreciation expense deduction" is the	488
absolute value of the difference between zero and what the amount	489
described in division (B) of section 5733.05 of the Revised Code	490
would be without the application of division (C) of this section	491
and division (I)(17)(a) of section 5733.04 of the Revised Code.	492

(3) If the tax computed under division (C) of section	493
5733.06 of the Revised Code is greater than the tax computed under	494
divisions (A) and (B) of that section, and the amount described in	495
division (B) of section 5733.05 of the Revised Code without the	496
application of division (C) of this section and division	497
(I)(17)(a) of section 5733.04 of the Revised Code is less than	498
zero, the "suspended tax benefit portion of the depreciation	499
expense deduction" is the absolute value of the difference between	500
the amount described in division (B) of section 5733.05 of the	501
Revised Code and what that amount would be without the application	502
of division (C) of this section and division (I)(17)(a) of section	503
5733.04 of the Revised Code.	504

(4) If the tax computed under divisions (A) and (B) of	505
section 5733.06 of the Revised Code is greater than the tax	506
computed under division (C) of that section, and the tax computed	507
under divisions (A) and (B) of that section without the	508
application of division (C) of this section and division	509
(I)(17)(a) of section 5733.04 of the Revised Code is greater than	510
the tax computed under division (C) of section 5733.06 of the	511
Revised Code, the "suspended tax benefit portion of the	512
depreciation expense deduction" is the difference between the	513
amount described in division (B) of section 5733.05 of the Revised	514
Code and what that amount would be without the application of	515
division (C) of this section and division (I)(17)(a) of section	516
5733.04 of the Revised Code.	517

(5) If the tax computed under divisions (A) and (B) of	518
section 5733.06 of the Revised Code is greater than the tax	519
computed under division (C) of that section, and the tax computed	520
under divisions (A) and (B) of section 5733.06 of the Revised Code	521
without the application of division (C) of this section and	522
division (I)(17)(a) of section 5733.04 of the Revised Code is less	523
than the tax computed under division (C) of section 5733.06 of the	524
Revised Code, the "suspended tax benefit portion of the	525
depreciation expense deduction" is the amount which, if subtracted	526
from taxable income, would result in a reduced taxable income, the	527
tax computed on the basis of which under divisions (A) and (B) of	528
section 5733.06 of the Revised Code would equal the tax computed	529
under division (C) of section 5733.06 of the Revised Code.	530

(B)(1) If the taxpayer is a member of a combined group of	531
corporations filing a combined report for the tax year, the	532
"amount described in division (B) of section 5733.05 of the	533
Revised Code," as used in division (A) of this section, shall be	534
computed with respect to that tax year in accordance with section	535
5733.052 of the Revised Code.	536

(2) The "tax computed under divisions (A) and (B) of section	537
5733.06 of the Revised Code" and the "tax computed under division	538
(C) of section 5733.06 of the Revised Code," as used in division	539
(A) of this section, includes all surtaxes and additional tax	540
attributable to additional rates applicable to the tax year with	541
respect to which the tax computation is made.	542

(C)(1) If, for a tax year, a taxpayer is required to make	543
the adjustment described in division (I)(17)(a) of section 5733.04	544
of the Revised Code, the taxpayer shall deduct one-fifth of that	545
tax year's suspended tax benefit portion of the depreciation	546
expense deduction as defined in division (A) of this section from	547
income apportioned and allocated to this state for each of the	548
next five consecutive tax years.	549

(2) To the extent the amount described in division (C)(1) of	550
this section is attributable to property generating allocable	551
income enumerated in section 5733.051 of the Revised Code, the	552
amount shall also be deducted from the related allocable income.	553

Sec. 5733.045. (A)(1) Subject to division (A)(2) of this	554
section, for the purposes of this section "deferred bonus	555
depreciation amount" means the amount described in division	556
(I)(17)(a) of section 5733.04 of the Revised Code with respect to	557
each asset, less the sum of the yearly adjustments with respect to	558
the asset that the taxpayer was required to deduct under division	559
(C) of section 5733.043 for each taxable year prior to the taxable	560
year in which the taxpayer disposed of the asset and recognized	561
gain or loss in connection with that disposition.	562

(2) If, in connection with a disposition of an asset, the	563
recognized gain is less than the realized gain, the deferred bonus	564
depreciation amount with respect to that asset shall be	565
proportionately reduced.	566

(B) Divisions (B)(1) and (2) of this section apply if a	567
taxpayer disposes of an asset and recognizes a gain or loss from	568
that disposition.	569

(1)(a) For the taxable year in which the taxpayer recognizes	570
the gain or loss, the taxpayer shall deduct from the amount	571
described in division (B) of section 5733.05 of the Revised Code	572
the deferred bonus depreciation amount, if any, with respect to	573
that asset.	574

(b) To the extent the amount described in division (B)(1)(a)	575
of this section is attributable to property generating allocable	576
income enumerated in section 5733.051 of the Revised Code, the	577
amount also shall be deducted from the related allocable income.	578

(2)(a) Except as set forth in division (B)(2)(b) of this	579
section, with respect to that asset the deduction otherwise	580
provided by section 5733.043 of the Revised Code shall not apply	581
to the taxable year in which the taxpayer recognizes the gain or	582
loss and shall not apply to any subsequent taxable year.	583

(b) If, in connection with the disposition of the asset, the	584
recognized gain is less than the realized gain, the deduction	585
provided by section 5733.043 of the Revised Code shall continue to	586
apply to the difference between the amount described in division	587
(A)(1) of this section and the amount described in division (A)(2)	588
of this section.	589

Sec. 5733.05.  As used in this section, "qualified research"	590
means laboratory research, experimental research, and other	591
similar types of research; research in developing or improving a	592
product; or research in developing or improving the means of	593
producing a product. It does not include market research,	594
consumer surveys, efficiency surveys, management studies, ordinary	595
testing or inspection of materials or products for quality	596
control, historical research, or literary research. "Product" as	597
used in this paragraph does not include services or intangible	598
property.	599

The annual report determines the value of the issued and	600
outstanding shares of stock of the taxpayer, which under division	601
(A) or divisions (B) and (C) of this section is the base or	602
measure of the franchise tax liability. Such determination shall	603
be made as of the date shown by the report to have been the	604
beginning of the corporation's annual accounting period that	605
includes the first day of January of the tax year. For the	606
purposes of this chapter, the value of the issued and outstanding	607
shares of stock of any corporation that is a financial institution	608
shall be deemed to be the value as calculated in accordance with	609
division (A) of this section. For the purposes of this chapter,	610
the value of the issued and outstanding shares of stock of any	611
corporation that is not a financial institution shall be deemed to	612
be the values as calculated in accordance with divisions (B) and	613
(C) of this section.	614

(A) The total value, as shown by the books of the financial	615
institution, of its capital, surplus, whether earned or unearned,	616
undivided profits, and reserves shall be determined as prescribed	617
by section 5733.056 of the Revised Code for tax years 1998 and	618
thereafter.	619

(B) The sum of the corporation's net income during the	620
corporation's taxable year, allocated or apportioned to this state	621
as prescribed in divisions (B)(1) and (2) of this section, and	622
subject to sections 5733.043, 5733.045, 5733.052, 5733.053,	623
5733.057, 5733.058, 5733.059, and 5733.0510 of the Revised Code:	624

(1) The net income allocated to this state as provided by	625
section 5733.051 of the Revised Code.	626

(2) The amount of Ohio apportioned net income from sources	627
other than those allocated under section 5733.051 of the Revised	628
Code, which shall be determined by multiplying the corporation's	629
net income by a fraction. The numerator of the fraction is the	630
sum of the following products: the property factor multiplied by	631
twenty, the payroll factor multiplied by twenty, and the sales	632
factor multiplied by sixty. The denominator of the fraction is	633
one hundred, provided that the denominator shall be reduced by	634
twenty if the property factor has a denominator of zero, by twenty	635
if the payroll factor has a denominator of zero, and by sixty if	636
the sales factor has a denominator of zero.	637

The property, payroll, and sales factors shall be determined	638
as follows:	639

(a) The property factor is a fraction the numerator of which	640
is the average value of the corporation's real and tangible	641
personal property owned or rented, and used in the trade or	642
business in this state during the taxable year, and the	643
denominator of which is the average value of all the corporation's	644
real and tangible personal property owned or rented, and used in	645
the trade or business everywhere during such year. There shall be	646
excluded from the numerator and denominator of the property factor	647
the original cost of all of the following property within Ohio:	648
property with respect to which a "pollution control facility"	649
certificate has been issued pursuant to section 5709.21 of the	650
Revised Code; property with respect to which an "industrial water	651
pollution control certificate" has been issued pursuant to section	652
6111.31 of the Revised Code; and property used exclusively during	653
the taxable year for qualified research.	654

(i) Property owned by the corporation is valued at its	655
original cost. Property rented by the corporation is valued at	656
eight times the net annual rental rate. "Net annual rental rate"	657
means the annual rental rate paid by the corporation less any	658
annual rental rate received by the corporation from subrentals.	659

(ii) The average value of property shall be determined by	660
averaging the values at the beginning and the end of the taxable	661
year, but the tax commissioner may require the averaging of	662
monthly values during the taxable year, if reasonably required to	663
reflect properly the average value of the corporation's property.	664

(b) The payroll factor is a fraction the numerator of which	665
is the total amount paid in this state during the taxable year by	666
the corporation for compensation, and the denominator of which is	667
the total compensation paid everywhere by the corporation during	668
such year. There shall be excluded from the numerator and the	669
denominator of the payroll factor the total compensation paid in	670
this state to employees who are primarily engaged in qualified	671
research.	672

(i) Compensation means any form of remuneration paid to an	673
employee for personal services.	674

(ii) Compensation is paid in this state if: (1) the	675
recipient's service is performed entirely within this state, (2)	676
the recipient's service is performed both within and without this	677
state, but the service performed without this state is incidental	678
to the recipient's service within this state, (3) some of the	679
service is performed within this state and either the base of	680
operations, or if there is no base of operations, the place from	681
which the service is directed or controlled is within this state,	682
or the base of operations or the place from which the service is	683
directed or controlled is not in any state in which some part of	684
the service is performed, but the recipient's residence is in this	685
state.	686

(iii) Compensation is paid in this state to any employee of	687
a common or contract motor carrier corporation, who performs the	688
employee's regularly assigned duties on a motor vehicle in more	689
than one state, in the same ratio by which the mileage traveled by	690
such employee within the state bears to the total mileage traveled	691
by such employee everywhere during the taxable year.	692

(c) Except as provided in section 5733.059 of the Revised	693
Code, the sales factor is a fraction the numerator of which is the	694
total sales in this state by the corporation during the taxable	695
year, and the denominator of which is the total sales by the	696
corporation everywhere during such year. In determining the	697
numerator and denominator of the sales factor, receipts from the	698
sale or other disposal of a capital asset or an asset described in	699
section 1231 of the Internal Revenue Code shall be eliminated.	700
Also, in determining the numerator and denominator of the sales	701
factor, in the case of a reporting corporation owning at least	702
eighty per cent of the issued and outstanding common stock of one	703
or more insurance companies or public utilities, except an	704
electric company, or owning at least twenty-five per cent of the	705
issued and outstanding common stock of one or more financial	706
institutions, receipts received by the reporting corporation from	707
such utilities, insurance companies, and financial institutions	708
shall be eliminated.	709

For the purpose of this section and section 5733.03 of the	710
Revised Code, sales of tangible personal property are in this	711
state where such property is received in this state by the	712
purchaser. In the case of delivery of tangible personal property	713
by common carrier or by other means of transportation, the place	714
at which such property is ultimately received after all	715
transportation has been completed shall be considered as the place	716
at which such property is received by the purchaser. Direct	717
delivery in this state, other than for purposes of transportation,	718
to a person or firm designated by a purchaser constitutes delivery	719
to the purchaser in this state, and direct delivery outside this	720
state to a person or firm designated by a purchaser does not	721
constitute delivery to the purchaser in this state, regardless of	722
where title passes or other conditions of sale.	723

Except as provided in section 5733.059 of the Revised Code,	724
sales, other than sales of tangible personal property, are in this	725
state if either:	726

(i) The income-producing activity is performed solely in	727
this state;	728

(ii) The income-producing activity is performed both within	729
and without this state and a greater proportion of the	730
income-producing activity is performed within this state than in	731
any other state, based on costs of performance.	732

(d) If the allocation and apportionment provisions of	733
division (B) of this section do not fairly represent the extent of	734
the taxpayer's business activity in this state, the taxpayer may	735
request, which request must be in writing and must accompany the	736
report, timely filed petition for reassessment, or timely filed	737
amended report, or the tax commissioner may require, in respect to	738
all or any part of the taxpayer's allocated or apportioned base,	739
if reasonable, any one or more of the following:	740

(i) Separate accounting;

741

(ii) The exclusion of any one or more of the factors;

742

(iii) The inclusion of one or more additional factors that	743
will fairly represent the taxpayer's allocated or apportioned base	744
in this state.	745

An alternative method will be effective only with approval by	746
the tax commissioner.	747

Nothing in this section shall be construed to extend any	748
statute of limitations set forth in this chapter.	749

(C)(1) Subject to divisions (C)(2) and (3) of this section,	750
the total value, as shown on the books of each corporation that is	751
not a qualified holding company, of the net book value of a	752
corporation's assets less the net carrying value of its	753
liabilities, and excluding from the corporation's assets land	754
devoted exclusively to agricultural use as of the first Monday of	755
June in the corporation's taxable year as determined by the county	756
auditor of the county in which the land is located pursuant to	757
section 5713.31 of the Revised Code. For the purposes of	758
determining that total value, any reserves shown on the	759
corporation's books shall be considered liabilities or contra	760
assets, except for any reserves that are deemed appropriations of	761
retained earnings under generally accepted accounting principles.	762

(2)(a) If, on the last day of the taxpayer's taxable year	763
preceding the tax year, the taxpayer is a related member to a	764
corporation that elects to be a qualifying holding company for the	765
tax year beginning after the last day of the taxpayer's taxable	766
year, or if, on the last day of the taxpayer's taxable year	767
preceding the tax year, a corporation that elects to be a	768
qualifying holding company for the tax year beginning after the	769
last day of the taxpayer's taxable year is a related member to the	770
taxpayer, then the taxpayer's total value shall be adjusted by the	771
qualifying amount. Except as otherwise provided under division	772
(C)(2)(b) of this section, "qualifying amount" means the amount	773
that, when added to the taxpayer's total value, and when	774
subtracted from the net carrying value of the taxpayer's	775
liabilities computed without regard to division (C)(2) of this	776
section, or when subtracted from the taxpayer's total value and	777
when added to the net carrying value of the taxpayer's liabilities	778
computed without regard to division (C)(2) of this section,	779
results in the taxpayer's debt-to-equity ratio equaling the	780
debt-to-equity ratio of the qualifying controlled group on the	781
last day of the taxable year ending prior to the first day of the	782
tax year computed on a consolidated basis in accordance with	783
general accepted accounting principles. For the purposes of	784
division (C)(2)(a) of this section, the corporation's total value,	785
after the adjustment required by that division, shall not exceed	786
the net book value of the corporation's assets.	787

(b)(i) The amount added to the taxpayer's total value and	788
subtracted from the net carrying value of the taxpayer's	789
liabilities shall not exceed the amount of the net carrying value	790
of the taxpayer's liabilities owed to the taxpayer's related	791
members.	792

(ii) A liability owed to the taxpayer's related members	793
includes, but is not limited to, any amount that the corporation	794
owes to a person that is not a related member if the corporation's	795
related member or related members in whole or in part guarantee	796
any portion or all of that amount, or pledge, hypothecate,	797
mortgage, or carry out any similar transactions to secure any	798
portion or all of that amount.	799

(3) The base upon which the tax is levied under division (C)	800
of section 5733.06 of the Revised Code shall be computed by	801
multiplying the amount determined under divisions (C)(1) and (2)	802
of this section by the fraction determined under divisions	803
(B)(2)(a) to (c) of this section and, if applicable, divisions	804
(B)(2)(d)(ii) to (iv) of this section but without regard to	805
section 5733.052 of the Revised Code.	806

(4) For purposes of division (C) of this section, "related	807
member" has the same meaning as in division (A)(6) of section	808
5733.042 of the Revised Code without regard to division (B) of	809
that section.	810

Sec. 5743.02.  To provide revenues for the general revenue	811
fund, an excise tax on sales of cigarettes is hereby levied at the	812
rate of eleven and one-halfthirty-seven mills on each cigarette.	813

Only one sale of the same article shall be used in computing	814
the amount of tax due.	815

The treasurer of state shall place to the credit of the tax	816
refund fund created by section 5703.052 of the Revised Code, out	817
of receipts from the tax levied by this section, amounts equal to	818
the refunds certified by the tax commissioner pursuant to section	819
5743.05 of the Revised Code. The balance of taxes collected under	820
such section, after the credits to the tax refund fund, shall be	821
paid into the general revenue fund.	822

Sec. 5743.05.  All stamps provided for by section 5743.03 of	823
the Revised Code, when procured by the tax commissioner, shall be	824
immediately delivered to the treasurer of state, who shall execute	825
a receipt therefor showing the number and aggregate face value of	826
each denomination received by the treasurer of state and any other	827
information that the commissioner requires to enforce the	828
collection and distribution of all taxes imposed under section	829
5743.024 or 5743.026 of the Revised Code, and deliver the receipt	830
to the commissioner. The treasurer of state shall sell the stamps	831
and, on the fifth day of each month, make a report showing all	832
sales made during the preceding month, with the names of	833
purchasers, the number of each denomination, the aggregate face	834
value purchased by each, and any other information as the	835
commissioner requires to enforce the collection and distribution	836
of all taxes imposed under section 5743.024 of the Revised Code,	837
and deliver it to the commissioner. The treasurer of state shall	838
be accountable for all stamps received and unsold. The stamps	839
shall be sold and accounted for at their face value, except the	840
commissioner shall, by rule certified to the treasurer of state,	841
authorize the sale of stamps and meter impressions to wholesale or	842
retail dealers in this state, or to wholesale dealers outside this	843
state, at a discount of not less than one and eight-tenths per	844
cent or more than ten per cent of their face value, as a	845
commission for affixing and canceling the stamps or meter	846
impressions.	847

The tax commissioner, by rule certified to the treasurer of	848
state, shall authorize the delivery of stamps and meter	849
impressions to wholesale and retail dealers in this state and to	850
wholesale dealers outside this state on credit when the purchaser	851
files with the commissioner a bond to the state in the amount and	852
in the form prescribed by the commissioner, and with surety to the	853
satisfaction of the treasurer of state, conditioned on payment to	854
the treasurer of state within thirty days for stamps or meter	855
impressions delivered within that time. The tax commissioner shall	856
limit delivery of stamps and meter impressions on credit to the	857
period running from the first day of July of the fiscal year until	858
the first day of the following May. Any discount allowed as a	859
commission for affixing and canceling stamps or meter impressions	860
shall be allowed with respect to sales of stamps and meter	861
impressions on credit.	862

The treasurer of state shall redeem and pay for any	863
destroyed, unused, or spoiled tax stamps and any unused meter	864
impressions at their net value, and shall refund to wholesale	865
dealers the net amount of state and county taxes paid erroneously	866
or paid on cigarettes which have been sold in interstate or	867
foreign commerce or which have become unsalable, and the net	868
amount of county taxes that were paid on cigarettes that have been	869
sold at retail or for retail sale outside a taxing county. An	870
application for a refund of tax shall be filed with the tax	871
commissioner, on the form prescribed by the commissioner for that	872
purpose, within three years from the date the tax stamps are	873
destroyed or spoiled, from the date of the erroneous payment, or	874
from the date that cigarettes on which taxes have been paid have	875
been sold in interstate or foreign commerce or have become	876
unsalable. On the filing of the application the commissioner	877
shall determine the amount of refund due payable from receipts of	878
the state tax, and, if applicable, payable from receipts of a	879
county tax and certify such amounts to the director of budget and	880
management and treasurer of state for payment from the tax refund	881
fund created by section 5703.052 of the Revised Code. When a	882
refund is granted for payment of an illegal or erroneous	883
assessment issued by the department, the refund shall include	884
interest on the amount of the refund from the date of the	885
overpayment. The interest shall be computed at the rate per annum	886
prescribed by section 5703.47 of the Revised Code.	887

Sec. 5743.32.  To provide revenue for the general revenue	888
fund of the state, an excise tax is hereby levied on the use,	889
consumption, or storage for consumption of cigarettes by consumers	890
in this state at the rate of eleven and one-halfthirty-seven	891
mills on each cigarette. The tax shall not apply if the tax	892
levied by section 5743.02 of the Revised Code has been paid.	893

The money received into the state treasury from the excise	894
tax levied by this section shall be credited to the general	895
revenue fund.	896

Sec. 5747.01.  Except as otherwise expressly provided or	897
clearly appearing from the context, any term used in this chapter	898
has the same meaning as when used in a comparable context in the	899
Internal Revenue Code, and all other statutes of the United States	900
relating to federal income taxes.	901

As used in this chapter:

902

(A) "Adjusted gross income" or "Ohio adjusted gross income"	903
means adjusted gross income as defined and used in the Internal	904
Revenue Code, adjusted as provided in this section and section	905
5747.011 of the Revised Code:	906

(1) Add interest or dividends on obligations or securities	907
of any state or of any political subdivision or authority of any	908
state, other than this state and its subdivisions and authorities.	909

(2) Add interest or dividends on obligations of any	910
authority, commission, instrumentality, territory, or possession	911
of the United States that are exempt from federal income taxes but	912
not from state income taxes.	913

(3) Deduct interest or dividends on obligations of the	914
United States and its territories and possessions or of any	915
authority, commission, or instrumentality of the United States to	916
the extent included in federal adjusted gross income but exempt	917
from state income taxes under the laws of the United States.	918

(4) Deduct disability and survivor's benefits to the extent	919
included in federal adjusted gross income.	920

(5) Deduct benefits under Title II of the Social Security	921
Act and tier 1 railroad retirement benefits to the extent included	922
in federal adjusted gross income under section 86 of the Internal	923
Revenue Code.	924

(6) Add, in the case of a taxpayer who is a beneficiary of a	925
trust that makes an accumulation distribution as defined in	926
section 665 of the Internal Revenue Code, the portion, if any, of	927
such distribution that does not exceed the undistributed net	928
income of the trust for the three taxable years preceding the	929
taxable year in which the distribution is made. "Undistributed	930
net income of a trust" means the taxable income of the trust	931
increased by (a)(i) the additions to adjusted gross income	932
required under division (A) of this section and (ii) the personal	933
exemptions allowed to the trust pursuant to section 642(b) of the	934
Internal Revenue Code, and decreased by (b)(i) the deductions to	935
adjusted gross income required under division (A) of this section,	936
(ii) the amount of federal income taxes attributable to such	937
income, and (iii) the amount of taxable income that has been	938
included in the adjusted gross income of a beneficiary by reason	939
of a prior accumulation distribution. Any undistributed net	940
income included in the adjusted gross income of a beneficiary	941
shall reduce the undistributed net income of the trust commencing	942
with the earliest years of the accumulation period.	943

(7) Deduct the amount of wages and salaries, if any, not	944
otherwise allowable as a deduction but that would have been	945
allowable as a deduction in computing federal adjusted gross	946
income for the taxable year, had the targeted jobs credit allowed	947
and determined under sections 38, 51, and 52 of the Internal	948
Revenue Code not been in effect.	949

(8) Deduct any interest or interest equivalent on public	950
obligations and purchase obligations to the extent included in	951
federal adjusted gross income.	952

(9) Add any loss or deduct any gain resulting from the sale,	953
exchange, or other disposition of public obligations to the extent	954
included in federal adjusted gross income.	955

(10) Deduct or add amounts, as provided under section	956
5747.70 of the Revised Code, related to contributions to variable	957
college savings program accounts made or tuition credits purchased	958
pursuant to Chapter 3334. of the Revised Code.	959

(11)(a) Deduct, to the extent not otherwise allowable as a	960
deduction or exclusion in computing federal or Ohio adjusted gross	961
income for the taxable year, the amount the taxpayer paid during	962
the taxable year for medical care insurance and qualified	963
long-term care insurance for the taxpayer, the taxpayer's spouse,	964
and dependents. No deduction for medical care insurance under	965
division (A)(11) of this section shall be allowed either to any	966
taxpayer who is eligible to participate in any subsidized health	967
plan maintained by any employer of the taxpayer or of the	968
taxpayer's spouse, or to any taxpayer who is entitled to, or on	969
application would be entitled to, benefits under part A of Title	970
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	971
301, as amended. For the purposes of division (A)(11)(a) of this	972
section, "subsidized health plan" means a health plan for which	973
the employer pays any portion of the plan's cost. The deduction	974
allowed under division (A)(11)(a) of this section shall be the net	975
of any related premium refunds, related premium reimbursements, or	976
related insurance premium dividends received during the taxable	977
year.	978

(b) Deduct, to the extent not otherwise deducted or excluded	979
in computing federal or Ohio adjusted gross income during the	980
taxable year, the amount the taxpayer paid during the taxable	981
year, not compensated for by any insurance or otherwise, for	982
medical care of the taxpayer, the taxpayer's spouse, and	983
dependents, to the extent the expenses exceed seven and one-half	984
per cent of the taxpayer's federal adjusted gross income.	985

(c) For purposes of division (A)(11) of this section,	986
"medical care" has the meaning given in section 213 of the	987
Internal Revenue Code, subject to the special rules, limitations,	988
and exclusions set forth therein, and "qualified long-term care"	989
has the same meaning given in section 7702(B)(b) of the Internal	990
Revenue Code.	991

(12)(a) Deduct any amount included in federal adjusted gross	992
income solely because the amount represents a reimbursement or	993
refund of expenses that in any year the taxpayer had deducted as	994
an itemized deduction pursuant to section 63 of the Internal	995
Revenue Code and applicable United States department of the	996
treasury regulations. The deduction otherwise allowed under	997
division (A)(12)(a) of this section shall be reduced to the extent	998
the reimbursement is attributable to an amount the taxpayer	999
deducted under this section in any taxable year.	1000

(b) Add any amount not otherwise included in Ohio adjusted	1001
gross income for any taxable year to the extent that the amount is	1002
attributable to the recovery during the taxable year of any amount	1003
deducted or excluded in computing federal or Ohio adjusted gross	1004
income in any taxable year.	1005

(13) Deduct any portion of the deduction described in	1006
section 1341(a)(2) of the Internal Revenue Code, for repaying	1007
previously reported income received under a claim of right, that	1008
meets both of the following requirements:	1009

(a) It is allowable for repayment of an item that was	1010
included in the taxpayer's adjusted gross income for a prior	1011
taxable year and did not qualify for a credit under division (A)	1012
or (B) of section 5747.05 of the Revised Code for that year;	1013

(b) It does not otherwise reduce the taxpayer's adjusted	1014
gross income for the current or any other taxable year.	1015

(14) Deduct an amount equal to the deposits made to, and net	1016
investment earnings of, a medical savings account during the	1017
taxable year, in accordance with section 3924.66 of the Revised	1018
Code. The deduction allowed by division (A)(14) of this section	1019
does not apply to medical savings account deposits and earnings	1020
otherwise deducted or excluded for the current or any other	1021
taxable year from the taxpayer's federal adjusted gross income.	1022

(15)(a) Add an amount equal to the funds withdrawn from a	1023
medical savings account during the taxable year, and the net	1024
investment earnings on those funds, when the funds withdrawn were	1025
used for any purpose other than to reimburse an account holder	1026
for, or to pay, eligible medical expenses, in accordance with	1027
section 3924.66 of the Revised Code;	1028

(b) Add the amounts distributed from a medical savings	1029
account under division (A)(2) of section 3924.68 of the Revised	1030
Code during the taxable year.	1031

(16) Add any amount claimed as a credit under section	1032
5747.059 of the Revised Code to the extent that such amount	1033
satisfies either of the following:	1034

(a) The amount was deducted or excluded from the computation	1035
of the taxpayer's federal adjusted gross income as required to be	1036
reported for the taxpayer's taxable year under the Internal	1037
Revenue Code;	1038

(b) The amount resulted in a reduction of the taxpayer's	1039
federal adjusted gross income as required to be reported for any	1040
of the taxpayer's taxable years under the Internal Revenue Code.	1041

(17) Deduct the amount contributed by the taxpayer to an	1042
individual development account program established by a county	1043
department of job and family services pursuant to sections 329.11	1044
to 329.14 of the Revised Code for the purpose of matching funds	1045
deposited by program participants. On request of the tax	1046
commissioner, the taxpayer shall provide any information that, in	1047
the tax commissioner's opinion, is necessary to establish the	1048
amount deducted under division (A)(17) of this section.	1049

(18) Beginning in taxable year 2001, if the taxpayer is	1050
married and files a joint return and the combined federal adjusted	1051
gross income of the taxpayer and the taxpayer's spouse for the	1052
taxable year does not exceed one hundred thousand dollars, or if	1053
the taxpayer is single and has a federal adjusted gross income for	1054
the taxable year not exceeding fifty thousand dollars, deduct	1055
amounts paid during the taxable year for qualified tuition and	1056
fees paid to an eligible institution for the taxpayer, the	1057
taxpayer's spouse, or any dependent of the taxpayer, who is a	1058
resident of this state and is enrolled in or attending a program	1059
that culminates in a degree or diploma at an eligible institution.	1060
The deduction may be claimed only to the extent that qualified	1061
tuition and fees are not otherwise deducted or excluded for any	1062
taxable year from federal or Ohio adjusted gross income. The	1063
deduction may not be claimed for educational expenses for which	1064
the taxpayer claims a credit under section 5747.27 of the Revised	1065
Code.	1066

(19) Add any reimbursement received during the taxable year	1067
of any amount the taxpayer deducted under division (A)(18) of this	1068
section in any previous taxable year to the extent the amount is	1069
not otherwise included in Ohio adjusted gross income.	1070

(B) "Business income" means income arising from	1071
transactions, activities, and sources in the regular course of a	1072
trade or business and includes income from tangible and intangible	1073
property if the acquisition, rental, management, and disposition	1074
of the property constitute integral parts of the regular course of	1075
a trade or business operation.	1076

(C) "Nonbusiness income" means all income other than	1077
business income and may include, but is not limited to,	1078
compensation, rents and royalties from real or tangible personal	1079
property, capital gains, interest, dividends and distributions,	1080
patent or copyright royalties, or lottery winnings, prizes, and	1081
awards.	1082

(D) "Compensation" means any form of remuneration paid to an	1083
employee for personal services.	1084

(E) "Fiduciary" means a guardian, trustee, executor,	1085
administrator, receiver, conservator, or any other person acting	1086
in any fiduciary capacity for any individual, trust, or estate.	1087

(F) "Fiscal year" means an accounting period of twelve	1088
months ending on the last day of any month other than December.	1089

(G) "Individual" means any natural person.

1090

(H) "Internal Revenue Code" means the "Internal Revenue Code	1091
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	1092

(I) "Resident" means:

1093

(1) An individual who is domiciled in this state, subject to	1094
section 5747.24 of the Revised Code;	1095

(2) The estate of a decedent who at the time of death was	1096
domiciled in this state. The domicile tests of section 5747.24 of	1097
the Revised Code and any election under section 5747.25 of the	1098
Revised Code are not controlling for purposes of division (I)(2)	1099
of this section.	1100

(J) "Nonresident" means an individual or estate that is not	1101
a resident. An individual who is a resident for only part of a	1102
taxable year is a nonresident for the remainder of that taxable	1103
year.	1104

(K) "Pass-through entity" has the same meaning as in section	1105
5733.04 of the Revised Code.	1106

(L) "Return" means the notifications and reports required to	1107
be filed pursuant to this chapter for the purpose of reporting the	1108
tax due and includes declarations of estimated tax when so	1109
required.	1110

(M) "Taxable year" means the calendar year or the taxpayer's	1111
fiscal year ending during the calendar year, or fractional part	1112
thereof, upon which the adjusted gross income is calculated	1113
pursuant to this chapter.	1114

(N) "Taxpayer" means any person subject to the tax imposed	1115
by section 5747.02 of the Revised Code or any pass-through entity	1116
that makes the election under division (D) of section 5747.08 of	1117
the Revised Code.	1118

(O) "Dependents" means dependents as defined in the Internal	1119
Revenue Code and as claimed in the taxpayer's federal income tax	1120
return for the taxable year or which the taxpayer would have been	1121
permitted to claim had the taxpayer filed a federal income tax	1122
return.	1123

(P) "Principal county of employment" means, in the case of a	1124
nonresident, the county within the state in which a taxpayer	1125
performs services for an employer or, if those services are	1126
performed in more than one county, the county in which the major	1127
portion of the services are performed.	1128

(Q) As used in sections 5747.50 to 5747.55 of the Revised	1129
Code:	1130

(1) "Subdivision" means any county, municipal corporation,	1131
park district, or township.	1132

(2) "Essential local government purposes" includes all	1133
functions that any subdivision is required by general law to	1134
exercise, including like functions that are exercised under a	1135
charter adopted pursuant to the Ohio Constitution.	1136

(R) "Overpayment" means any amount already paid that exceeds	1137
the figure determined to be the correct amount of the tax.	1138

(S) "Taxable income" applies to estates only and means	1139
taxable income as defined and used in the Internal Revenue Code	1140
adjusted as follows:	1141

(1) Add interest or dividends on obligations or securities	1142
of any state or of any political subdivision or authority of any	1143
state, other than this state and its subdivisions and authorities;	1144

(2) Add interest or dividends on obligations of any	1145
authority, commission, instrumentality, territory, or possession	1146
of the United States that are exempt from federal income taxes but	1147
not from state income taxes;	1148

(3) Add the amount of personal exemption allowed to the	1149
estate pursuant to section 642(b) of the Internal Revenue Code;	1150

(4) Deduct interest or dividends on obligations of the	1151
United States and its territories and possessions or of any	1152
authority, commission, or instrumentality of the United States	1153
that are exempt from state taxes under the laws of the United	1154
States;	1155

(5) Deduct the amount of wages and salaries, if any, not	1156
otherwise allowable as a deduction but that would have been	1157
allowable as a deduction in computing federal taxable income for	1158
the taxable year, had the targeted jobs credit allowed under	1159
sections 38, 51, and 52 of the Internal Revenue Code not been in	1160
effect;	1161

(6) Deduct any interest or interest equivalent on public	1162
obligations and purchase obligations to the extent included in	1163
federal taxable income;	1164

(7) Add any loss or deduct any gain resulting from sale,	1165
exchange, or other disposition of public obligations to the extent	1166
included in federal taxable income;	1167

(8) Except in the case of the final return of an estate, add	1168
any amount deducted by the taxpayer on both its Ohio estate tax	1169
return pursuant to section 5731.14 of the Revised Code, and on its	1170
federal income tax return in determining either federal adjusted	1171
gross income or federal taxable income;	1172

(9)(a) Deduct any amount included in federal taxable income	1173
solely because the amount represents a reimbursement or refund of	1174
expenses that in a previous year the decedent had deducted as an	1175
itemized deduction pursuant to section 63 of the Internal Revenue	1176
Code and applicable treasury regulations. The deduction otherwise	1177
allowed under division (S)(9)(a) of this section shall be reduced	1178
to the extent the reimbursement is attributable to an amount the	1179
taxpayer or decedent deducted under this section in any taxable	1180
year.	1181

(b) Add any amount not otherwise included in Ohio taxable	1182
income for any taxable year to the extent that the amount is	1183
attributable to the recovery during the taxable year of any amount	1184
deducted or excluded in computing federal or Ohio taxable income	1185
in any taxable year.	1186

(10) Deduct any portion of the deduction described in	1187
section 1341(a)(2) of the Internal Revenue Code, for repaying	1188
previously reported income received under a claim of right, that	1189
meets both of the following requirements:	1190

(a) It is allowable for repayment of an item that was	1191
included in the taxpayer's taxable income or the decedent's	1192
adjusted gross income for a prior taxable year and did not qualify	1193
for a credit under division (A) or (B) of section 5747.05 of the	1194
Revised Code for that year.	1195

(b) It does not otherwise reduce the taxpayer's taxable	1196
income or the decedent's adjusted gross income for the current or	1197
any other taxable year.	1198

(11) Add any amount claimed as a credit under section	1199
5747.059 of the Revised Code to the extent that the amount	1200
satisfies either of the following:	1201

(a) The amount was deducted or excluded from the computation	1202
of the taxpayer's federal taxable income as required to be	1203
reported for the taxpayer's taxable year under the Internal	1204
Revenue Code;	1205

(b) The amount resulted in a reduction in the taxpayer's	1206
federal taxable income as required to be reported for any of the	1207
taxpayer's taxable years under the Internal Revenue Code.	1208

(T) "School district income" and "school district income	1209
tax" have the same meanings as in section 5748.01 of the Revised	1210
Code.	1211

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	1212
of this section, "public obligations," "purchase obligations," and	1213
"interest or interest equivalent" have the same meanings as in	1214
section 5709.76 of the Revised Code.	1215

(V) "Limited liability company" means any limited liability	1216
company formed under Chapter 1705. of the Revised Code or under	1217
the laws of any other state.	1218

(W) "Pass-through entity investor" means any person who,	1219
during any portion of a taxable year of a pass-through entity, is	1220
a partner, member, shareholder, or investor in that pass-through	1221
entity.	1222

(X) "Banking day" has the same meaning as in section 1304.01	1223
of the Revised Code.	1224

(Y) "Month" means a calendar month.

1225

(Z) "Quarter" means the first three months, the second three	1226
months, the third three months, or the last three months of the	1227
taxpayer's taxable year.	1228

(AA)(1) "Eligible institution" means a state university or	1229
state institution of higher education as defined in section	1230
3345.011 of the Revised Code, or a private, nonprofit college,	1231
university, or other post-secondary institution located in this	1232
state that possesses a certificate of authorization issued by the	1233
Ohio board of regents pursuant to Chapter 1713. of the Revised	1234
Code or a certificate of registration issued by the state board of	1235
proprietary school registration under Chapter 3332. of the Revised	1236
Code.	1237

(2) "Qualified tuition and fees" means tuition and fees	1238
imposed by an eligible institution as a condition of enrollment or	1239
attendance, not exceeding two thousand five hundred dollars in	1240
each of the individual's first two years of post-secondary	1241
education. If the individual is a part-time student, "qualified	1242
tuition and fees" includes tuition and fees paid for the academic	1243
equivalent of the first two years of post-secondary education	1244
during a maximum of five taxable years, not exceeding a total of	1245
five thousand dollars. "Qualified tuition and fees" does not	1246
include:	1247

(a) Expenses for any course or activity involving sports,	1248
games, or hobbies unless the course or activity is part of the	1249
individual's degree or diploma program;	1250

(b) The cost of books, room and board, student activity	1251
fees, athletic fees, insurance expenses, or other expenses	1252
unrelated to the individual's academic course of instruction;	1253

(c) Tuition, fees, or other expenses paid or reimbursed	1254
through an employer, scholarship, grant in aid, or other	1255
educational benefit program.	1256

(BB) Any term used in this chapter that is not otherwise	1257
defined in this section and that is not used in a comparable	1258
context in the Internal Revenue Code and other statutes of the	1259
United States relating to federal income taxes has the same	1260
meaning as in section 5733.40 of the Revised Code.	1261

Sec. 5747.011. (A)(1) Subject to division (A)(2) of this	1262
section, for the purposes of this section "deferred bonus	1263
depreciation amount" means the amount described in division (B)(1)	1264
of this section, with respect to each asset, less the sum of the	1265
yearly adjustments with respect to the asset that the taxpayer was	1266
required to deduct under division (C) of this section for each	1267
taxable year prior to the taxable year in which the taxpayer	1268
disposed of the asset and recognized gain or loss in connection	1269
with that disposition.	1270

(2) If, in connection with a disposition of an asset the	1271
recognized gain is less than the realized gain, the deferred bonus	1272
depreciation amount with respect to that asset shall be	1273
proportionately reduced.	1274

(B)(1) Subject to division (B)(2) of this section, add to	1275
the taxpayer's federal adjusted gross income five-sixths of the	1276
amount of depreciation expense allowed by subsection (k) of	1277
section 168 of the Internal Revenue Code. Nothing in section	1278
5747.231 of the Revised Code shall be construed to exclude from	1279
the add-back required by this division five-sixths of the	1280
taxpayer's proportionate or distributive share of the amount of	1281
depreciation expense allowed by subsection (k) of section 168 of	1282
the Internal Revenue Code to any pass-through entity which the	1283
taxpayer has a direct or indirect ownership interest.	1284

(2) Nothing in this division shall be construed to adjust or	1285
modify the adjusted basis of any asset.	1286

(3) To the extent the add-back is attributable to property	1287
generating nonbusiness income, the add-back shall be considered to	1288
be nonbusiness income.	1289

(C)(1) Subject to division (D)(2) of this section, beginning	1290
with taxable year 2003, deduct from federal adjusted gross income	1291
one-fifth of the amount described in division (B) of this section	1292
with respect to each preceding taxable year, but such amount shall	1293
be deducted for not more than five consecutive taxable years	1294
commencing with the taxable year immediately following the taxable	1295
year for which the taxpayer made the adjustment required by	1296
division (B) of this section for that taxable year.	1297

(2) To the extent the amount described in division (C)(1) of	1298
this section is attributable to property generating nonbusiness	1299
income, the amount shall also be deducted from the related	1300
nonbusiness income.	1301

(D) Divisions (D)(1) and (2) of this section apply if a	1302
taxpayer disposes of an asset and recognizes a gain or loss from	1303
that disposition.	1304

(1)(a) For the taxable year in which a taxpayer recognizes	1305
the gain or loss, the taxpayer shall deduct from federal adjusted	1306
gross income the deferred bonus depreciation amount, if any, with	1307
respect to that asset.	1308

(b) To the extent the amount described in division (D)(1)(a)	1309
of this section is attributable to property generating nonbusiness	1310
income, the amount also shall be deducted from the related	1311
nonbusiness income.	1312

(2)(a) Except as set forth in division (D)(2)(b) of this	1313
section, with respect to that asset the deduction otherwise	1314
provided by division (C) of this section shall not apply to the	1315
taxable year in which the taxpayer recognizes the gain or loss and	1316
shall not apply to all subsequent taxable years.	1317

(b) If, in connection with the disposition of the asset the	1318
recognized gain is less than the realized gain, the deduction	1319
provided by division (C) of this section shall continue to apply	1320
to the difference between the amount described in division (A)(1)	1321
of this section and the amount described in division (A)(2) of	1322
this section.	1323

Section 2. That existing sections 5733.04, 5733.05, 5743.02,	1324
5743.05, 5743.32, and 5747.01 and sections 5743.023 and 5743.322	1325
of the Revised Code are hereby repealed.	1326

Section 3. In addition to the return required by section	1327
5743.03 of the Revised Code, each wholesale dealer and each retail	1328
dealer shall make and file a return on forms prescribed by the Tax	1329
Commissioner, showing the total number of cigarettes that the	1330
wholesale or retail dealer had on hand as of the beginning of	1331
business on the effective date of the increased rate of tax levied	1332
under section 5743.02 of the Revised Code, as amended by this act,	1333
and any other information that the Commissioner considers	1334
necessary for the administration of sections 5743.01 to 5743.20 of	1335
the Revised Code. Within twenty days after that effective date or	1336
by June 20, 2002, whichever is later, each wholesale dealer and	1337
each retail dealer shall deliver the return together with a	1338
remittance of the additional amount of tax due as a result of the	1339
amendment to section 5743.02 of the Revised Code made by this act,	1340
on all packages of Ohio stamped cigarettes and on all unaffixed	1341
Ohio cigarette tax stamps to the Treasurer of State. The Treasurer	1342
of State shall stamp or otherwise mark on the return the date it	1343
was received and also shall show on the return by stamp or	1344
otherwise the tax payment remitted with the return. The Treasurer	1345
of State immediately shall transmit all returns filed under this	1346
section to the Tax Commissioner. Any wholesale or retail dealer	1347
who fails to file a return as prescribed by this section, for each	1348
day the dealer fails to do so, shall forfeit and pay into the	1349
state treasury the sum of one dollar as revenue arising from the	1350
tax imposed by this section. Any unpaid or unreported tax	1351
liability or one dollar per day charge levied by this section may	1352
be collected by assessment in the manner provided in section	1353
5743.081 or 5743.082 of the Revised Code.	1354

Section 4. If a person's taxable year ending in 2002 ends	1355
before the effective date of this section, that person may elect	1356
to apply to its tax year 2003 corporation franchise tax report the	1357
amendments and enactments by this act of sections 5733.04,	1358
5733.043, 5733.045, and 5733.05 of the Revised Code. The election	1359
shall accompany or be reflected in the report when filed, or shall	1360
accompany or be reflected in an amended report. The election is	1361
revocable at the option of the person making the election, but no	1362
revocation is effective if it is made after the ninetieth day	1363
before the last day of the applicable period of time described in	1364
division (B) of section 5733.12 of the Revised Code.	1365

Section 5. That Sections 63.18, 125, and 144 of Am. Sub. H.B.	1366
94 of the 124th General Assembly be amended to read as follows:	1367

"       Sec. 63.18.  EMPLOYER SURCHARGE

1368

(A) The surcharge and the interest on the surcharge amounts	1369
due for calendar years 1988, 1989, and 1990 as required by Am.	1370
Sub. H.B. 171 of the 117th General Assembly, Am. Sub. H.B. 111 of	1371
the 118th General Assembly, and section 4141.251 of the Revised	1372
Code as it existed prior to Sub. H.B. 478 of the 122nd General	1373
Assembly, again shall be assessed and collected by, accounted for,	1374
and made available to the Department of Job and Family Services in	1375
the same manner as set forth in section 4141.251 of the Revised	1376
Code as it existed prior to Sub. H.B. 478 of the 122nd General	1377
Assembly, notwithstanding the repeal of the surcharge for calendar	1378
years after 1990, pursuant to Sub. H.B. 478 of the 122nd General	1379
Assembly, except that amounts received by the Director on or after	1380
July 1, 2001, shall be deposited into the special administrative	1381
fund established pursuant to section 4141.11 of the Revised Code.	1382

Effective July 1, 2001, the balance of the unemployment	1383
compensation surcharge trust funds created in custody of the	1384
Treasurer of State pursuant to section 4141.251 of the Revised	1385
Code shall be transferred into the special administrative fund	1386
established pursuant to section 4141.11 of the Revised Code.	1387

(B) Of the foregoing appropriation item 600-678, Federal	1388
Unemployment Programs, $51,000,000 in fiscal year 2003 made	1389
available to the state under Section 903 (d) of the Social	1390
Security Act, as amended, shall be used under the direction of the	1391
Department of Job and Family Services to pay for the	1392
administrative activities for the Unemployment Insurance Program,	1393
employment services, and other allowable expenditures under	1394
Section 903 (d) of the Social Security Act, as amended.	1395

The amounts obligated pursuant to this division shall not	1396
exceed at any time the amount by which the aggregate of the	1397
amounts transferred to the account of this state pursuant to	1398
Section 903 (d) of the Social Security Act, as amended, exceeds	1399
the aggregate of the amounts obligated for administration and paid	1400
out for benefits and required by law to be charged against the	1401
amounts transferred to the account of this state.	1402

Of the foregoing appropriation item 600-678, Federal	1403
Unemployment Programs, up to $18,000,000 in fiscal year 2003 shall	1404
be used by the Department of Job and Family Services to reimburse	1405
the General Revenue Fund, through intrastate vouchers, for	1406
expenditures made on or after April 1, 2002, from the General	1407
Revenue Fund for the aforementioned programs as reported to the	1408
federal government as allowable expenditures.	1409

Sec. 125. UNCLAIMED FUNDS TRANSER

1410

Notwithstanding division (A) of section 169.05 of the Revised	1411
Code, prior to June 30, 2003, upon the request of the Director of	1412
Budget and Management, the Director of Commerce shall transfer to	1413
the General Revenue Fund up to $30,000,000$55,000,000 of the	1414
unclaimed funds that have been reported by the holder of unclaimed	1415
funds as provided by section 169.05 of the Revised Code,	1416
irrespective of the allocation of the unclaimed funds under that	1417
section.	1418

Sec. 144. TRANSFERS TO THE GENERAL REVENUE FUND

1419

Notwithstanding any other provision of law to the contrary,	1420
during fiscal years 2002 and 2003, the Director of Budget and	1421
Management is hereby authorized to transfer cash from non-federal,	1422
non-General Revenue Fund funds that are not constitutionally	1423
restricted to the General Revenue Fund. The total amount of cash	1424
transfers made pursuant to this section to the General Revenue	1425
Fund during fiscal years 2002 and 2003 shall not exceed	1426
$31,794,657."	1427

Section 6. That existing Sections 63.18, 125, and 144 of Am.	1428
Sub. H.B. 94 of the 124th General Assembly are hereby repealed.	1429

Section 7. That Section 63 of Am. Sub. H.B. 94 of the 124th	1430
General Assembly, as subsequently amended by Am. Sub. H.B. 299 of	1431
the 124th General Assembly, be amended to read as follows:	1432

"       Sec. 63.  JFS DEPARTMENT OF JOB AND FAMILY SERVICES

1433

General Revenue Fund

1434

General Services Fund Group

1484

Federal Special Revenue Fund Group

1492

State Special Revenue Fund Group

1521

Agency Fund Group

1545

Holding Account Redistribution Fund Group

1550

Section 8. That existing Section 63 of Am. Sub. H.B. 94 of	1557
the 124th General Assembly, as subsequently amended by Am. Sub.	1558
H.B. 299 of the 124th General Assembly, is hereby repealed.	1559

Section 9. That Section 29 of Am. Sub. H.B. 405 of the 124th	1560
General Assembly be amended to read as follows:	1561

"       Sec. 29. BUDGET STABILIZATION FUND TRANSFERS

1562

(A) Notwithstanding section 131.43 and division (D) of	1563
section 127.14 of the Revised Code, the Director of Budget and	1564
Management may, with Controlling Board approval, transfer up to	1565
$248 million from the Budget Stabilization Fund to the General	1566
Revenue Fund during the 2002-2003 biennium to help ensure that the	1567
available revenue receipts and balances in the General Revenue	1568
Fund are not less than the appropriations for each fiscal year.	1569

(B) Notwithstanding section 131.43 and division (D) of	1570
section 127.14 of the Revised Code, the Director of Budget and	1571
Management shall transfer, not later than 30 days after the	1572
effective date of this section, $8.0 million from the Budget	1573
Stabilization Fund to the General Revenue Fund. These fundsOf the	1574
amount transferred, $2.0 million shall be used for emergency	1575
purposes, to include, but not be limited to, the Department of	1576
Health and Department of Agriculture for anthrax and bioterrorism	1577
testing, the Adjutant General for costs associated with the	1578
deployment of troops, armory maintenance, equipment costs and	1579
capital needs, the Department of Public Safety, security, and	1580
other emergency purpose expenses. These amounts are hereby	1581
appropriated for General Revenue Fund appropriation line items	1582
established by the Director of Budget and Management.	1583

Prior to utilizing these funds, the appropriate agency must	1584
receive the approval of the Controlling Board. Any of these funds	1585
unspent in fiscal year 2002 shall be transferred to fiscal year	1586
2003 by the Director of Budget and Management for the same purpose	1587
as in fiscal year 2002.	1588

TheOf the $2.0 million transferred for emergency purposes as	1589
specified in this division, the unobligated and unencumbered	1590
balance of these funds as of June 30, 2003, shall be transferred	1591
back to the Budget Stabilization Fund."	1592

Section 10. That existing Section 29 of Am. Sub. H.B. 405 of	1593
the 124th General Assembly is hereby repealed.	1594

Section 11. In addition to any amounts that have been	1595
authorized for transfer from the Budget Stabilization Fund to the	1596
General Revenue Fund in fiscal year 2002, there is hereby	1597
appropriated in fiscal year 2002, $290,000,000 from the Budget	1598
Stabilization Fund (Fund 013) to the Director of Budget and	1599
Management for the purpose of overcoming the current shortfall of	1600
revenues to the General Revenue Fund. From the amount so	1601
appropriated, the Director shall deposit, into the State Treasury	1602
to the credit of the General Revenue Fund, such amounts as are	1603
necessary to ensure that the available revenue receipts and	1604
balances in the General Revenue Fund are not less than the	1605
appropriations from the fund for fiscal year 2002.	1606

In addition to any amounts that have been authorized for	1607
transfer from the Budget Stabilization Fund to the General Revenue	1608
Fund in fiscal year 2003, there is hereby appropriated in fiscal	1609
year 2003, $170,000,000 from the Budget Stabilization Fund (Fund	1610
013) to the Director of Budget and Management. From the amounts	1611
so appropriated, the Director shall deposit, into the State	1612
Treasury to the credit of the General Revenue Fund, such amounts	1613
as are necessary to ensure that the available revenue receipts and	1614
balances in the General Revenue Fund are not less than the	1615
appropriations from the fund for fiscal year 2003.	1616

Section 12. That Section 31 of Am. Sub. H.B. 405 of the 124th	1617
General Assembly is hereby repealed.	1618

Section 13. The codified and uncodified sections of law	1619
amended or enacted in this act, and the items of law of which the	1620
codified and uncodified sections of law amended or enacted in	1621
this act are composed, are not subject to the referendum.	1622
Therefore, under Ohio Constitution, Article II, Section 1d, the	1623
codified and uncodified sections of law amended or enacted in this	1624
act, and the items of law of which the codified and uncodified	1625
sections of law amended or enacted in this act are composed, go	1626
into immediate effect when this act becomes law.	1627

Section 14. The repeal of Section 31 of Am. Sub. H.B. 405 of	1628
the 124th General Assembly is not subject to the referendum.	1629
Therefore, under Ohio Constitution, Article II, Section 1d, the	1630
repeal of Section 31 of Am. Sub. H.B. 405 of the 124th General	1631
Assembly goes into immediate effect when this act becomes law.	1632

Section 15.  Section 5733.05 of the Revised Code is presented	1633
in this act as a composite of the section as amended by both Am.	1634
Sub. H.B. 283 and Am. Sub. S.B. 3 of the 123rd General Assembly.	1635
The General Assembly, applying the principle stated in division	1636
(B) of section 1.52 of the Revised Code that amendments are to be	1637
harmonized if reasonably capable of simultaneous operation, finds	1638
that the composite is the resulting version of the section in	1639
effect prior to the effective date of the section as presented in	1640
this act.	1641