SENATOR Carnes

To amend sections 131.44, 173.06, 173.40, 2913.40,

1

3721.51, 3721.56, 5101.11, 5111.02, 5111.10,

2

5111.86, 5111.871, 5112.01, 5112.06, 5112.07,

3

5112.11, 5123.041, 5733.04, 5743.02, 5743.03,

4

5743.04, 5743.05, 5743.08, 5743.081, 5743.12,

5

5743.13, 5743.14, 5743.32, 5743.33, 5743.34,

6

5743.35, 5747.01, 5747.02, 5747.05, 5901.02,

7

5901.03, and 5919.34; to amend for purposes of

8

adopting new section numbers as indicated in

9

parentheses sections 5111.10 (5111.90) and 5111.86

10

(5111.91); to enact sections 131.441, 173.061,

11

173.062, 173.07, 173.071, 173.072, 5111.0112,

12

5111.082, 5111.091, 5111.92, 5111.93, 5111.94, and

13

5901.021; and to repeal sections 5743.023 and

14

5743.322 of the Revised Code and to amend Section

15

5.02 of Sub. H.B. 73 of the 124th General Assembly,

16

as subsequently amended; to amend Sections 16,

17

16.02, 44, 44.19, 63.07, 94, 94.02, 94.06, 94.07,

18

125, and 144 of Am. Sub. H.B. 94 of the 124th

19

General Assembly; to amend Section 13 of Am. Sub.

20

H.B. 94 of the 124th General Assembly, as

21

subsequently amended; to amend Sections 63 and

22

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

23

Assembly, as subsequently amended; to amend Section

24

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

25

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

26

405 of the 124th General Assembly to increase the

27

rate of tax on cigarettes; to make other tax

28

modifications; to provide authorization and

29

conditions for the operation of state programs; to

30

make other budgetary and program modifications;

31

and to make operating appropriations for the

32

period ending June 30, 2003, and capital

33

appropriations for the period ending June 30, 2004.

34

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

Section 1. That sections 131.44, 173.06, 173.40, 2913.40,	35
3721.51, 3721.56, 5101.11, 5111.02, 5111.10, 5111.86, 5111.871,	36
5112.01, 5112.06, 5112.07, 5112.11, 5123.041, 5733.04, 5743.02,	37
5743.03, 5743.04, 5743.05, 5743.08, 5743.081, 5743.12, 5743.13,	38
5743.14, 5743.32, 5743.33, 5743.34, 5743.35, 5747.01, 5747.02,	39
5747.05, 5901.02, 5901.03, and 5919.34 be amended; sections	40
5111.10 (5111.90) and 5111.86 (5111.91) be amended for the purpose	41
of adopting new section numbers as indicated in parentheses; and	42
sections 131.441, 173.061, 173.062, 173.07, 173.071, 173.072,	43
5111.0112, 5111.082, 5111.091, 5111.92, 5111.93, 5111.94, and	44
5901.021 of the Revised Code be enacted to read as follows:	45

Sec. 131.44.  (A) As used in this section:

46

(1) "Surplus revenue" means the excess, if any, of the total	47
fund balance over the required year-end balance.	48

(2) "Total fund balance" means the sum of the unencumbered	49
balance in the general revenue fund on the last day of the	50
preceding fiscal year plus, the balance in the excess tax receipts	51
fund created under section 131.441 of the Revised Code on the last	52
day of the preceding fiscal year, and the balance in the budget	53
stabilization fund.	54

(3) "Required year-end balance" means the sum of the	55
following:	56

(a) Five per cent of the general revenue fund revenues for	57
the preceding fiscal year;	58

(b) "Ending fund balance," which means one-half of one per	59
cent of general revenue fund revenues for the preceding fiscal	60
year;	61

(c) "Carryover balance," which means, with respect to a	62
fiscal biennium, the excess, if any, of the estimated general	63
revenue fund appropriation and transfer requirement for the second	64
fiscal year of the biennium over the estimated general revenue	65
fund revenue for that fiscal year;	66

(d) "Capital appropriation reserve," which means the amount,	67
if any, of general revenue fund capital appropriations made for	68
the current biennium that the director of budget and management	69
has determined will be encumbered or disbursed;	70

(e) "Income tax reduction impact reserve," which means an	71
amount equal to the reduction projected by the director of budget	72
and management in income tax revenue in the current fiscal year	73
attributable to the previous reduction in the income tax rate made	74
by the tax commissioner pursuant to division (B) of section	75
5747.02 of the Revised Code.	76

(4) "Estimated general revenue fund appropriation and	77
transfer requirement" means the most recent adjusted	78
appropriations made by the general assembly from the general	79
revenue fund and includes both of the following:	80

(a) Appropriations made and transfers of appropriations from	81
the first fiscal year to the second fiscal year of the biennium in	82
provisions of acts of the general assembly signed by the governor	83
but not yet effective;	84

(b) Transfers of appropriation from the first fiscal year to	85
the second fiscal year of the biennium approved by the controlling	86
board.	87

(5) "Estimated general revenue fund revenue" means the most	88
recent such estimate available to the director of budget and	89
management.	90

(B)(1) Not later than the thirty-first day of July each	91
year, the director of budget and management shall determine the	92
surplus revenue that existed on the preceding thirtieth day of	93
June and transfer from the general revenue fund, to the extent of	94
the unobligated, unencumbered balance on the preceding thirtieth	95
day of June in excess of one-half of one per cent of the general	96
revenue fund revenues in the preceding fiscal year, and from the	97
excess tax receipts fund, the following:	98

(a) First, to the budget stabilization fund, any amount	99
necessary for the balance of the budget stabilization fund to	100
equal five per cent of the general revenue fund revenues of the	101
preceding fiscal year;	102

(b) Then, to the income tax reduction fund, which is hereby	103
created in the state treasury, an amount equal to the surplus	104
revenue.	105

(2) Not later than the thirty-first day of July each year,	106
the director shall determine the percentage that the balance in	107
the income tax reduction fund is of the amount of revenue that the	108
director estimates will be received from the tax levied under	109
section 5747.02 of the Revised Code in the current fiscal year	110
without regard to any reduction under division (B) of that	111
section. If that percentage exceeds thirty-five one hundredths of	112
one per cent, the director shall certify the percentage to the tax	113
commissioner not later than the thirty-first day of July.	114

(C) The director of budget and management shall transfer	115
money in the income tax reduction fund to the general revenue	116
fund, the local government fund, the library and local government	117
support fund, and the local government revenue assistance fund as	118
necessary to offset revenue reductions resulting from the	119
reductions in taxes required under division (B) of section 5747.02	120
of the Revised Code in the respective amounts and percentages	121
prescribed by divisions (A)(1), (2), and (4) of section 5747.03 of	122
the Revised Code as if the amount transferred had been collected	123
as taxes under Chapter 5747. of the Revised Code. If no	124
reductions in taxes are made under that division that affect	125
revenue received in the current fiscal year, the director shall	126
not transfer money from the income tax reduction fund to the	127
general revenue fund, the local government fund, the library and	128
local government support fund, and the local government revenue	129
assistance fund.	130

Sec. 131.441. (A) As used in this section:

131

(1) "Base year revenue" means sixteen billion one hundred	132
ninety-five million eight hundred thousand dollars.	133

(2) "Target revenue" for each fiscal year after fiscal year	134
2002 means the target fiscal year revenue for the preceding fiscal	135
year multiplied by the greater of the following:	136

(a) One hundred three per cent;

137

(b) One hundred per cent plus the percentage increase in the	138
consumer price index prepared by the United States bureau of labor	139
statistics (all urban consumers, all items) for the twelve-month	140
period ending on the thirty-first day of December preceding the	141
determination made under division (C) of this section.	142

For fiscal year 2002, "target revenue" equals the base year	143
revenue multiplied by the greater of the quantities described in	144
divisions (A)(2)(a) and (b) of this section.	145

(3) "Actual revenue" for a fiscal year means the total	146
amount of taxes, nontax receipts, and transfers credited or made	147
to the general revenue fund in the fiscal year.	148

(4) "Excess revenue" for a fiscal year means the excess, if	149
any, of actual revenue for that fiscal year over the target	150
revenue for that fiscal year.	151

(B) There is hereby created in the state treasury the excess	152
tax receipts fund. Money in the fund shall not be transferred or	153
appropriated from the fund except as provided in division (B)(1)	154
of section 131.44 of the Revised Code.	155

(C) On the thirtieth day of June each year, the director of	156
budget and management shall transfer from the general revenue fund	157
to the excess tax receipts fund an amount equal to the excess	158
revenue for the fiscal year ending on that day.	159

Sec. 173.06.  (A) The director of aging shall establish a	160
golden buckeye card program and provide a golden buckeye card to	161
any resident of this state who applies to the director for a card	162
and who is sixty years of age or older or disabled. The director	163
shall devise programs to provide benefits of any kind to card	164
holders, and encourage support and participation in them by all	165
persons, including governmental organizations. Card holders shall	166
be entitled to any benefits granted to them by private persons or	167
organizations, the laws of this state, or ordinances or	168
resolutions of political subdivisions. This section does not	169
require any person or organization to provide benefits to any card	170
holder. The department of aging shall bear all costs of the	171
program, except that the department is not required to bear any	172
costs related to the prescription drug discount programs	173
established pursuant to section 173.061 of the Revised Code.	174

(B) Before issuing a golden buckeye card to any person, the	175
director shall establish the identity of any person who applies	176
for a card and shall ascertain that such person is sixty years of	177
age or older or disabled. The director shall adopt rules under	178
Chapter 119. of the Revised Code to prevent the issuance of cards	179
to persons not qualified to have them. Cards shall contain the	180
signature of the card holder and any other information the	181
director considers necessary to carry out the purposes of the	182
golden buckeye card program under this section. Any card that the	183
director issues shall be held in perpetuity by the original card	184
holder and shall not be transferable to any other person. A	185
person who loses histhe person's card may obtain another card	186
from the director upon providing the same information to the	187
director as was required for the issuance of the original card.	188

(C) No person shall use a golden buckeye card except to	189
obtain a benefit for the holder of the card to which the holder is	190
entitled under the conditions of the offer.	191

(D) As used in this section, "disabled person" means a	192
person who has some impairment of body or mind that makes the	193
person unfit to work at any substantially remunerative employment	194
that he or shethe person is substantially able to perform and	195
that will, with reasonable probability, continue for a period of	196
at least twelve months without any present indication of recovery	197
therefrom, or who has been certified as permanently and totally	198
disabled by an agency of this state or the United States having	199
the function of so classifying persons.	200

Sec. 173.061. (A) As used in this section:

201

(1) "Prescription drug" means a drug that may not be	202
dispensed without a prescription from a licensed health	203
professional authorized to prescribe drugs.	204

(2) "Drug," "licensed health professional authorized to	205
prescribe drugs," "pharmacy," and "prescription" have the same	206
meanings as in section 4729.01 of the Revised Code.	207

(3) "Disabled person" has the same meaning as in section	208
173.06 of the Revised Code.	209

(B) The director of aging shall establish one or more	210
prescription drug discount card programs that enable cardholders	211
to receive discounts on prescription drugs dispensed at	212
participating pharmacies. A card shall be provided to any resident	213
of this state who applies in accordance with rules adopted by the	214
director pursuant to division (F) of this section and is sixty	215
years of age or older or is a disabled person.	216

If the director establishes more than one prescription drug	217
discount card program under this section, an eligible resident may	218
participate in one or more or all of the programs.	219

(C)(1) The director shall solicit and accept proposals from	220
entities separate from the department of aging to provide for	221
administration of a program or programs in accordance with rules	222
adopted under division (F) of this section. Proposals must be	223
submitted not later than a date established by the director. The	224
director shall accept only those proposals that specify all of the	225
following:	226

(a) The estimated amount of the discount based on the	227
entity's previous experience and how the discount is to be	228
achieved;	229

(b) To the extent that discounts on prescription drugs are	230
to be achieved through rebates or discounts in prices that the	231
entity negotiates with drug manufacturers, the proportion of the	232
rebates or discounts to be used to do all of the following:	233

(i) Reduce any costs to cardholders;

234

(ii) Achieve discounts for cardholders;

235

(iii) Cover costs for administering the program.

236

(c) Any other benefits offered to cardholders;

237

(d) If fees are permitted, the fee, if any, to cardholders	238
for participation in the program and whether the fee is to be a	239
one-time or periodic fee;	240

(e) The estimated number and geographic distribution of	241
participating pharmacies and the process for establishing the	242
program's pharmacy network;	243

(f) Financial incentives to be paid to participating	244
pharmacies by the entity;	245

(g) The percentage of prescription drugs to be covered by	246
the program by major drug category;	247

(h) How the entity proposes to improve medication management	248
for cardholders;	249

(i) How cardholders and participating pharmacies will be	250
informed of the discounted price negotiated by the entity;	251

(j) How the entity will handle complaints about the program's	252
operation;	253

(k) The entity's previous experience in managing similar	254
programs;	255

(l) Any additional information requested by the director.

256

(2) The director shall contract with one or more entities to	257
administer a program or programs on the basis of the proposals	258
submitted, but may require an administrator to modify its conduct	259
of a program in accordance with rules adopted under division (F)	260
of this section. Prior to entering into a contract with an entity,	261
the director shall obtain approval of the contract from the	262
controlling board at a public hearing.	263

The director shall adopt rules specifying the period for	264
which a contract will be in effect and may terminate a contract if	265
an administrator fails to conduct a program in accordance with its	266
proposal or with any modifications required by rule. When a	267
contract period ends or a contract is terminated, the director	268
shall enter into a new contract in the manner specified in this	269
section for an original contract. Prior to making a new contract,	270
the director may modify the rules for administration of the	271
program or programs.	272

(D) The rules for administration of a program established	273
under division (C)(2) of this section may permit an administrator	274
to charge a fee for a prescription drug discount card. The fee	275
may be a one-time or periodic fee. If the rules permit a fee to	276
be charged, each entity that submits a proposal under which a fee	277
will be charged shall specify the amount of the fee and the period	278
to which the fee will apply.	279

If an administrator charges a fee for a prescription drug	280
discount card, the rules may require the administrator to issue	281
the cards. If an administrator does not charge a fee, the rules	282
may require the administrator to issue the cards or may include	283
the prescription drug discount information on golden buckeye cards	284
issued under section 173.06 of the Revised Code.	285

(E) As used in this division, "administrator" includes the	286
administrator's parent company and any subsidiary of the parent	287
company.	288

(1) No administrator shall sell any information concerning	289
a person who holds a prescription drug discount card, other than	290
aggregate information that does not identify the cardholder,	291
without the cardholder's written consent.	292

(2) Unless an administrator has the cardholder's written	293
consent, no administrator shall use any personally identifiable	294
information that it obtains concerning a cardholder through the	295
program to promote or sell a program or product offered by the	296
administrator that is not related to the administration of the	297
program. This division does not prohibit an administrator from	298
contacting cardholders concerning participation in or	299
administration of the program, including, but not limited to,	300
mailing a list of pharmacies participating in the program's	301
network.	302

(3) To the extent that a discount is achieved through rebates	303
or discounts in prices that an administrator negotiates with drug	304
manufacturers, an administrator shall use the rebates or discounts	305
to do the following:	306

(a) Reduce any costs to cardholders;

307

(b) Achieve discounts for cardholders;

308

(c) Cover any administrative costs of the program.

309

(F) The director shall adopt rules in accordance with Chapter	310
119. of the Revised Code that do all of the following:	311

(1) Specify how a resident may apply to participate in any	312
one or more prescription drug discount card programs;	313

(2) Provide for the administration of each program;

314

(3) Specify the circumstances under which the director may	315
require an administrator to modify its conduct of a program;	316

(4) Specify the duration of a contract;

317

(5) Specify whether an administrator may charge a fee for a	318
card and whether an administrator is required to issue the cards;	319

(6) Require that an administrator permit any pharmacy willing	320
to comply with the administrator's terms and conditions for	321
participation in the program's network to participate in any	322
network used by the administrator for its program;	323

(7) Prohibit an administrator from requiring a pharmacy or	324
drug manufacturer to participate in the program's network as a	325
condition of participation in another network operated by the	326
administrator;	327

(8) Permit an administrator to negotiate with one or more	328
drug manufacturers for discounts in drug prices or rebates;	329

(9) Permit an administrator to receive any rebate payments	330
from drug manufacturers;	331

(10) Require that an administrator create a financial	332
incentive program for participating pharmacies through which the	333
administrator shall distribute a portion of any rebate payments	334
from drug manufacturers received under division (F)(9) of this	335
section.	336

(G) Not later than one month after the end of each	337
twelve-month period that one or more prescription drug discount	338
card programs are in operation, each administrator shall collect	339
from each of its participating pharmacies and provide to the	340
director of aging the information required by section 173.071 of	341
the Revised Code.	342

Sec. 173.062. Records identifying the recipients of golden	343
buckeye cards issued under section 173.06 of the Revised Code or	344
prescription drug discount cards issued under section 173.061 of	345
the Revised Code are not public records subject to inspection or	346
copying under section 149.43 of the Revised Code and may be	347
disclosed only at the discretion of the director of aging. The	348
director may disclose only information in records identifying the	349
recipients of golden buckeye cards or prescription drug discount	350
cards that does not contain the recipient's medical history or	351
prescription drug utilization history.	352

Sec. 173.07. Not later than four months after the end of each	353
twelve-month period that one or more prescription drug discount	354
card programs established under section 173.061 of the Revised	355
Code are in operation, the director of aging shall issue a report	356
on the operation of each program during that twelve-month period.	357

Sec. 173.071. Each report issued under section 173.07 of the	358
Revised Code shall be based on information received by the	359
director of aging from each administrator under division (G) of	360
section 173.061 of the Revised Code and specify all of the	361
following about each program:	362

(A) The number of prescription drug discount cardholders;

363

(B) The number of cardholders who used the card at least	364
once in the immediately preceding twelve-month period;	365

(C) The total cost savings to all cardholders generated by	366
the program;	367

(D) The average cost savings to a cardholder per	368
prescription;	369

(E) The source and method of cost savings under the program;

370

(F) The drugs that are discounted under the program listed	371
according to major drug category;	372

(G) For each participating pharmacy, the number of times in	373
the twelve-month period that the pharmacy's customary and usual	374
price was lower than the price offered under the prescription drug	375
discount program;	376

(H) The name of the program's administrator;

377

(I) The length of the contract between the director and the	378
program's administrator;	379

(J) The number of pharmacies participating in the program;

380

(K) Other than the cost of prescription drugs, any fees paid	381
by cardholders to participate in the program;	382

(L) Any costs incurred by the state to operate the program;

383

(M) Any costs incurred by participating pharmacies to	384
participate in the program.	385

Sec. 173.072. The director of aging shall submit each report	386
to the governor, the speaker and minority leader of the house of	387
representatives, the president and minority leader of the senate,	388
and the chairpersons and ranking minority members of the	389
committees of the house of representatives and senate that have	390
primary concern with matters pertaining to health care.	391

Sec. 173.40.  There is hereby created a component of the	392
medicaid program established under Chapter 5111. of the Revised	393
Code to be known as the preadmission screening system providing	394
options and resources today program, or PASSPORT. The PASSPORT	395
program shall provide home and community-based services as an	396
alternative to nursing facility placement for aged and disabled	397
medicaid recipients. The program shall be operated pursuant to a	398
home and community-based waiver granted by the United States	399
secretary of health and human services under section 1915 of the	400
"Social Security Act," 49 Stat. 620 (1935), 42 U.S.C. 1396n, as	401
amended. The department of aging shall administer the program	402
through an interagency agreementa contract entered into with the	403
department of job and family services under section 5111.86	404
5111.91 of the Revised Code. The directors of aging and job and	405
family services shall adopt rules in accordance with Chapter 119.	406
of the Revised Code to implement the program.	407

Sec. 2913.40.  (A) As used in this section:

408

(1) "Statement or representation" means any oral, written,	409
electronic, electronic impulse, or magnetic communication that is	410
used to identify an item of goods or a service for which	411
reimbursement may be made under the medical assistance program or	412
that states income and expense and is or may be used to determine	413
a rate of reimbursement under the medical assistance program.	414

(2) "Medical assistance program" means the program	415
established by the department of job and family services to	416
provide medical assistance under section 5111.01 of the Revised	417
Code and the medicaid program of Title XIX of the "Social Security	418
Act," 49 Stat. 620 (1935), 42 U.S.C. 301, as amended.	419

(3) "Provider" means any person who has signed a provider	420
agreement with the department of job and family services to	421
provide goods or services pursuant to the medical assistance	422
program or any person who has signed an agreement with a party to	423
such a provider agreement under which the person agrees to provide	424
goods or services that are reimbursable under the medical	425
assistance program.	426

(4) "Provider agreement" means an oral or written agreement	427
between the department of job and family services and a person in	428
which the person agrees to provide goods or services under the	429
medical assistance program.	430

(5) "Recipient" means any individual who receives goods or	431
services from a provider under the medical assistance program.	432

(6) "Records" means any medical, professional, financial, or	433
business records relating to the treatment or care of any	434
recipient, to goods or services provided to any recipient, or to	435
rates paid for goods or services provided to any recipient and any	436
records that are required by the rules of the director of job and	437
family services to be kept for the medical assistance program.	438

(B) No person shall knowingly make or cause to be made a	439
false or misleading statement or representation for use in	440
obtaining reimbursement from the medical assistance program.	441

(C) No person, with purpose to commit fraud or knowing that	442
the person is facilitating a fraud, shall do either of the	443
following:	444

(1) Contrary to the terms of the person's provider	445
agreement, charge, solicit, accept, or receive for goods or	446
services that the person provides under the medical assistance	447
program any property, money, or other consideration in addition to	448
the amount of reimbursement under the medical assistance program	449
and the person's provider agreement for the goods or services and	450
any deductibles or co-payments authorized by rules adopted under	451
section 5111.025111.0112 of the Revised Code or by any rules	452
adopted pursuant to that section.	453

(2) Solicit, offer, or receive any remuneration, other than	454
any deductibles or co-payments authorized by rules adopted under	455
section 5111.025111.0112 of the Revised Code or by any rules	456
adopted pursuant to that section, in cash or in kind, including,	457
but not limited to, a kickback or rebate, in connection with the	458
furnishing of goods or services for which whole or partial	459
reimbursement is or may be made under the medical assistance	460
program.	461

(D) No person, having submitted a claim for or provided	462
goods or services under the medical assistance program, shall do	463
either of the following for a period of at least six years after a	464
reimbursement pursuant to that claim, or a reimbursement for those	465
goods or services, is received under the medical assistance	466
program:	467

(1) Knowingly alter, falsify, destroy, conceal, or remove	468
any records that are necessary to fully disclose the nature of all	469
goods or services for which the claim was submitted, or for which	470
reimbursement was received, by the person;	471

(2) Knowingly alter, falsify, destroy, conceal, or remove	472
any records that are necessary to disclose fully all income and	473
expenditures upon which rates of reimbursements were based for the	474
person.	475

(E) Whoever violates this section is guilty of medicaid	476
fraud. Except as otherwise provided in this division, medicaid	477
fraud is a misdemeanor of the first degree. If the value of	478
property, services, or funds obtained in violation of this section	479
is five hundred dollars or more and is less than five thousand	480
dollars, medicaid fraud is a felony of the fifth degree. If the	481
value of property, services, or funds obtained in violation of	482
this section is five thousand dollars or more and is less than one	483
hundred thousand dollars, medicaid fraud is a felony of the fourth	484
degree. If the value of the property, services, or funds obtained	485
in violation of this section is one hundred thousand dollars or	486
more, medicaid fraud is a felony of the third degree.	487

(F) Upon application of the governmental agency, office, or	488
other entity that conducted the investigation and prosecution in a	489
case under this section, the court shall order any person who is	490
convicted of a violation of this section for receiving any	491
reimbursement for furnishing goods or services under the medical	492
assistance program to which the person is not entitled to pay to	493
the applicant its cost of investigating and prosecuting the case.	494
The costs of investigation and prosecution that a defendant is	495
ordered to pay pursuant to this division shall be in addition to	496
any other penalties for the receipt of that reimbursement that are	497
provided in this section, section 5111.03 of the Revised Code, or	498
any other provision of law.	499

(G) The provisions of this section are not intended to be	500
exclusive remedies and do not preclude the use of any other	501
criminal or civil remedy for any act that is in violation of this	502
section.	503

Sec. 3721.51.  The department of job and family services	504
shall:	505

(A) For the purposes specified in section 3721.56 of the	506
Revised Code, determine an annual franchise permit fee on each	507
nursing home in an amount equal to three dollars and thirty cents	508
for fiscal yearsyear 2002 and 2003, four dollars and thirty cents	509
for fiscal years 2003 through 2005, and one dollar for each fiscal	510
year thereafter, multiplied by the product of the following:	511

(1) The number of beds licensed as nursing home beds, plus	512
any other beds certified as skilled nursing facility beds under	513
Title XVIII or nursing facility beds under Title XIX of the	514
"Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.A. 301, as	515
amended, on July 1, 1993, and, for each subsequent year, the first	516
day of May of the calendar year in which the fee is determined	517
pursuant to division (A) of section 3721.53 of the Revised Code;	518

(2) The number of days in fiscal year 1994 and, for each	519
subsequent year, the number of days in the fiscal year beginning	520
on the first day of July of the calendar year in which the fee is	521
determined pursuant to division (A) of section 3721.53 of the	522
Revised Code.	523

(B) For the purposes specified in section 3721.56 of the	524
Revised Code, determine an annual franchise permit fee on each	525
hospital in an amount equal to three dollars and thirty cents for	526
fiscal yearsyear 2002 and 2003, four dollars and thirty cents for	527
fiscal years 2003 through 2005, and one dollar for each fiscal	528
year thereafter, multiplied by the product of the following:	529

(1) The number of beds registered pursuant to section	530
3701.07 of the Revised Code as skilled nursing facility beds or	531
long-term care beds, plus any other beds licensed as nursing home	532
beds under section 3721.02 or 3721.09 of the Revised Code, on July	533
1, 1993, and, for each subsequent year, the first day of May of	534
the calendar year in which the fee is determined pursuant to	535
division (A) of section 3721.53 of the Revised Code;	536

(2) The number of days in fiscal year 1994 and, for each	537
subsequent year, the number of days in the fiscal year beginning	538
on the first day of July of the calendar year in which the fee is	539
determined pursuant to division (A) of section 3721.53 of the	540
Revised Code.	541

If the United States health care financing administration	542
centers for medicare and medicaid services determines that the	543
franchise permit fee established by sections 3721.50 throughto	544
3721.58 of the Revised Code would be an impermissible health care	545
related tax under section 1903(w) of the "Social Security Act," 49	546
Stat. 620 (1935), 42 U.S.C. 1396b(w), as amended, the department	547
of job and family services shall take all necessary actions to	548
cease implementation of those sections in accordance with rules	549
adopted under section 3721.58 of the Revised Code.	550

Sec. 3721.56.  (A) Thirty and three-tenths per cent of all	551
payments and penalties paid by nursing homes and hospitals under	552
sections 3721.53 and 3721.54 of the Revised Code for fiscal years	553
year 2002 and 2003, twenty-three and twenty-six-hundredths per	554
cent of such payments and penalties paid for fiscal years 2003	555
through 2005, and all such payments and penalties paid for	556
subsequent fiscal years, shall be deposited into the "home and	557
community-based services for the aged fund," which is hereby	558
created in the state treasury. The departments of job and family	559
services and aging shall use the moneys in the fund to fund the	560
following in accordance with rules adopted under section 3721.58	561
of the Revised Code:	562

(1) The medical assistance program established under Chapter	563
511.5111. of the Revised Code;	564

(2) The PASSPORT program established under section 173.40 of	565
the Revised Code;	566

(3) The residential state supplement program established	567
under section 173.35 of the Revised Code.	568

(B) Sixty-nine and seven-tenths per cent of all payments and	569
penalties paid by nursing homes and hospitals under sections	570
3721.53 and 3721.54 of the Revised Code for fiscal yearsyear 2002	571
and, and seventy-six and seventy-four-hundredths per cent of such	572
payments and penalties paid for fiscal years 2003 through 2005,	573
shall be deposited into the nursing facility stabilization fund,	574
which is hereby created in the state treasury. The department of	575
job and family services shall use the money in the fund in the	576
manner provided by Am. Sub. H.B. 94 and Sub. S.B. 261 of the 124th	577
general assembly.	578

Sec. 5101.11.  This section does not apply to contracts	579
entered into under section 5111.022, 5111.90, or 5111.91 of the	580
Revised Code.	581

(A) As used in this section:

582

(1) "Entity" includes an agency, board, commission, or	583
department of the state or a political subdivision of the state; a	584
private, nonprofit entity; a school district; a private school; or	585
a public or private institution of higher education.	586

(2) "Federal financial participation" means the federal	587
government's share of expenditures made by an entity in	588
implementing a program administered by the department of job and	589
family services.	590

(B) At the request of any public entity having authority to	591
implement a program administered by the department of job and	592
family services or any private entity under contract with a public	593
entity to implement a program administered by the department, the	594
department may seek to obtain federal financial participation for	595
costs incurred by the entity. Federal financial participation may	596
be sought from programs operated pursuant to Title IV-A, Title	597
IV-E, and Title XIX of the "Social Security Act," 49 Stat. 620	598
(1935), 42 U.S.C. 301, as amended; the "Food Stamp Act of 1964,"	599
78 Stat. 703, 7 U.S.C. 2011, as amended; and any other statute or	600
regulation under which federal financial participation may be	601
available, except that federal financial participation may be	602
sought only for expenditures made with funds for which federal	603
financial participation is available under federal law.	604

(C) All funds collected by the department of job and family	605
services pursuant to division (B) of this section shall be	606
distributed to the entities that incurred the costs, except for	607
any amounts retained by the department pursuant to division (D)(3)	608
of this section.	609

(D) In distributing federal financial participation pursuant	610
to this section, the department may either enter into an agreement	611
with the entity that is to receive the funds or distribute the	612
funds in accordance with rules adopted under division (F) of this	613
section. If the department decides to enter into an agreement to	614
distribute the funds, the agreement may include terms that do any	615
of the following:	616

(1) Provide for the whole or partial reimbursement of any	617
cost incurred by the entity in implementing the program;	618

(2) In the event that federal financial participation is	619
disallowed or otherwise unavailable for any expenditure, require	620
the department of job and family services or the entity, whichever	621
party caused the disallowance or unavailability of federal	622
financial participation, to assume responsibility for the	623
expenditures;	624

(3) Permit the department to retain not more than five per	625
cent of the amount of the federal financial participation to be	626
distributed to the entity;	627

(4) Require the public entity to certify the availability of	628
sufficient unencumbered funds to match the federal financial	629
participation it receives under this section;	630

(5) Establish the length of the agreement, which may be for	631
a fixed or a continuing period of time;	632

(6) Establish any other requirements determined by the	633
department to be necessary for the efficient administration of the	634
agreement.	635

(E) An entity that receives federal financial participation	636
pursuant to this section for a program aiding children and their	637
families shall establish a process for collaborative planning with	638
the department of job and family services for the use of the funds	639
to improve and expand the program.	640

(F) The director of job and family services shall adopt	641
rules as necessary to implement this section, including rules for	642
the distribution of federal financial participation pursuant to	643
this section. The rules shall be adopted in accordance with	644
Chapter 119. of the Revised Code. The director may adopt or amend	645
any statewide plan required by the federal government for a	646
program administered by the department, as necessary to implement	647
this section.	648

(G) Federal financial participation received pursuant to	649
this section shall not be included in any calculation made under	650
section 5101.16 or 5101.161 of the Revised Code.	651

Sec. 5111.0112. The director of job and family services shall	652
examine instituting a copayment program under medicaid. As part	653
of the examination, the director shall determine which groups of	654
medicaid recipients may be subjected to a copayment requirement	655
under federal statutes and regulations and which of those groups	656
are appropriate for a copayment program designed to reduce	657
inappropriate and excessive use of medical goods and services. If,	658
on completion of the examination, the director determines that it	659
is feasible to institute such a copayment program, the director	660
may seek approval from the United States secretary of health and	661
human services to institute the copayment program. If necessary,	662
the director may seek approval by applying for a waiver of federal	663
statutes and regulations. If such approval is obtained, the	664
director shall adopt rules in accordance with Chapter 119. of the	665
Revised Code governing the copayment program.	666

Sec. 5111.02.  (A) Under the medical assistance program:

667

(1) ReimbursementExcept as otherwise permitted by federal	668
statute or regulation and at the department's discretion,	669
reimbursement by the department of job and family services to a	670
medical provider for any medical service rendered under the	671
program shall not exceed the authorized reimbursement level for	672
the same service under the medicare program established under	673
Title XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42	674
U.S.C.A. 301, as amended.	675

(2) Reimbursement for freestanding medical laboratory	676
charges shall not exceed the customary and usual fee for	677
laboratory profiles.	678

(3) The department may deduct from payments for services	679
rendered by a medicaid provider under the medical assistance	680
program any amounts the provider owes the state as the result of	681
incorrect medical assistance payments the department has made to	682
the provider.	683

(4) The department may conduct final fiscal audits in	684
accordance with the applicable requirements set forth in federal	685
laws and regulations and determine any amounts the provider may	686
owe the state. When conducting final fiscal audits, the	687
department shall consider generally accepted auditing standards,	688
which include the use of statistical sampling.	689

(5) To the maximum extent that federal laws and regulations	690
permit the implementation of such a policy, the department may	691
institute a copayment program for all services provided under the	692
medical assistance program. The program shall be administered in	693
accordance with the applicable requirements set forth in federal	694
laws and regulations.	695

(6) The number of days of inpatient hospital care for which	696
reimbursement is made on behalf of a recipient of medical	697
assistance to a hospital that is not paid under a	698
diagnostic-related-group prospective payment system shall not	699
exceed thirty days during a period beginning on the day of the	700
recipient's admission to the hospital and ending sixty days after	701
the termination of that hospital stay, except that the department	702
may make exceptions to this limitation. The limitation does not	703
apply to children participating in the program for medically	704
handicapped children established under section 3701.023 of the	705
Revised Code.	706

(B) The director of job and family services may adopt,	707
amend, or rescind rules under Chapter 119. of the Revised Code	708
establishing the amount, duration, and scope of medical services	709
to be included in the medical assistance program. Such rules	710
shall establish the conditions under which services are covered	711
and reimbursed, the method of reimbursement applicable to each	712
covered service, and the amount of reimbursement or, in lieu of	713
such amounts, methods by which such amounts are to be determined	714
for each covered service. Any rules that pertain to nursing	715
facilities or intermediate care facilities for the mentally	716
retarded shall be consistent with sections 5111.20 to 5111.33 of	717
the Revised Code.	718

(C) No health insuring corporation that has a contract to	719
provide health care services to recipients of medical assistance	720
shall restrict the availability to its enrollees of any	721
prescription drugs included in the Ohio medicaid drug formulary as	722
established under rules adopted by the director.	723

(D) The division of any reimbursement between a	724
collaborating physician or podiatrist and a clinical nurse	725
specialist, certified nurse-midwife, or certified nurse	726
practitioner for services performed by the nurse shall be	727
determined and agreed on by the nurse and collaborating physician	728
or podiatrist. In no case shall reimbursement exceed the payment	729
that the physician or podiatrist would have received had the	730
physician or podiatrist provided the entire service.	731

Sec. 5111.082.  The director of job and family services, in	732
rules adopted under section 5111.02 of the Revised Code and	733
subject to parameters established by federal statutes and	734
regulations, may establish and implement a supplemental drug	735
rebate program under which drug manufacturers may be required to	736
provide the department of job and family services a supplemental	737
rebate as a condition of having the drug manufacturers' drug	738
products covered by the medicaid program without prior approval.	739
If the director establishes a supplemental drug rebate program,	740
the director shall consult with drug manufacturers regarding the	741
establishment and implementation of the program.	742

Sec. 5111.091. Every three months, the director of job and	744
family services shall submit a report to the president and	745
minority leader of the senate and speaker and minority leader of	746
the house of representatives on the establishment and	747
implementation of programs designed to control the increase of the	748
cost of the medicaid program.	749

Sec. 5111.871.  The department of job and family services	750
shall enter into an interagency agreementa contract with the	751
department of mental retardation and developmental disabilities	752
under section 5111.865111.91 of the Revised Code with regard to	753
the component of the medicaid program established by the	754
department of job and family services under one or more waivers	755
from the United States secretary of health and human services	756
pursuant to section 1915 of the "Social Security Act," 49 Stat.	757
620 (1935), 42 U.S.C.A. 1396n, as amended, to provide eligible	758
medicaid recipients with home and community-based services as an	759
alternative to placement in an intermediate care facility for the	760
mentally retarded. The agreementcontract shall provide for the	761
department of mental retardation and developmental disabilities to	762
administer the component in accordance with the terms of the	763
waiver. The directors of job and family services and mental	764
retardation and developmental disabilities shall adopt rules in	765
accordance with Chapter 119. of the Revised Code governing the	766
component.	767

If the department of mental retardation and developmental	768
disabilities or the department of job and family services denies	769
an individual's application for home and community-based services	770
provided under this medicaid component, the department that denied	771
the services shall give timely notice to the individual that the	772
individual may request a hearing under section 5101.35 of the	773
Revised Code.	774

The departments of mental retardation and developmental	775
disabilities and job and family services may approve, reduce,	776
deny, or terminate a service included in the individualized	777
service plan developed for a medicaid recipient eligible for home	778
and community-based services provided under this medicaid	779
component. The departments shall consider the recommendations a	780
county board of mental retardation and developmental disabilities	781
makes under division (A)(1)(c) of section 5126.055 of the Revised	782
Code. If either department approves, reduces, denies, or	783
terminates a service, that department shall give timely notice to	784
the medicaid recipient that the recipient may request a hearing	785
under section 5101.35 of the Revised Code.	786

If supported living or residential services, as defined in	787
section 5126.01 of the Revised Code, are to be provided under this	788
component, any person or government entity with a current, valid	789
medicaid provider agreement and a current, valid license under	790
section 5123.19 or certificate under section 5123.045 or 5126.431	791
of the Revised Code may provide the services.	792

Sec. 5111.10.        Sec. 5111.90. To(A) As used in sections 5111.90 to	793
5111.93 of the Revised Code:	794

(1) "Political subdivision" means a municipal corporation,	795
township, county, school district, or other body corporate and	796
politic responsible for governmental activities only in a	797
geographical area smaller than that of the state.	798

(2) "State agency" means every organized body, office, or	799
agency, other than the department of job and family services,	800
established by the laws of the state for the exercise of any	801
function of state government.	802

(B) To the extent permitted by Title XIX of the "Social	803
Security Act," 4979 Stat. 620286 (19351965), 42 U.S.C.A. 301	804
1396, as amended, and regulations adopted under that acttitle,	805
the department of job and family services may enter into	806
agreementscontracts with political subdivisions to use funds of	807
the political subdivision to pay the nonfederal share of	808
expenditures under the medical assistancemedicaid program. The	809
determination and provision of federal financial reimbursement to	810
a subdivision entering into an agreementa contract under this	811
section shall be determined by the department, subject to section	812
5111.92 of the Revised Code, approval by the United States	813
secretary of health and human services, and the availability of	814
federal financial participation.	815

Sec. 5111.86.        Sec. 5111.91. The department of job and family	816
services may enter into interagency agreementscontracts with one	817
or more other state agencies or political subdivisions to have the	818
state agency or political subdivision administer one or more	819
components of the medicaid program, or one or more aspects of a	820
component, under the department's supervision. A state agency or	821
political subdivision that enters into such an interagency	822
agreementa contract shall comply with the terms of the contract	823
and any rules the director of job and family services has adopted	824
governing the component, or aspect of the component, that the	825
state agency or political subdivision is to administer, including	826
any rules establishing review, audit, and corrective action plan	827
requirements. A contract with a state agency shall be in the form	828
of an interagency agreement.	829

A state agency or political subdivision that enters into an	830
interagency agreementa contract with the department under this	831
section shall reimburse the department for the nonfederal share of	832
the cost to the department of performing, or contracting for the	833
performance of, a fiscal audit of the component of the medicaid	834
program, or aspect of the component, that the state agency or	835
political subdivision administers if rules governing the	836
component, or aspect of the component, require that a fiscal audit	837
be conducted.	838

There is hereby created in the state treasury the medicaid	839
administrative reimbursement fund. The department shall use money	840
in the fund to pay for the nonfederal share of the cost of a	841
fiscal audit for which a state agency or political subdivision is	842
required by this section to reimburse the department. The	843
department shall deposit the reimbursements into the fund.	844

Sec. 5111.92.  (A)(1) Except as provided in division (B)	845
of this section, if a state agency or political subdivision	846
administers one or more components of the medicaid program that	847
the United States department of health and human services	848
approved, and for which federal financial participation was	849
initially obtained, prior to January 1, 2002, or administers one	850
or more aspects of such a component, the department of job and	851
family services may retain or collect not more than ten per cent	852
of the federal financial participation the state agency or	853
political subdivision obtains through an approved, administrative	854
claim regarding the component or aspect of the component. If the	855
department retains or collects a percentage of such federal	856
financial participation, the percentage the department retains or	857
collects shall be specified in a contract the department enters	858
into with the state agency or political subdivision under section	859
5111.91 of the Revised Code.	860

(2) Except as provided in division (B) of this section, if	861
a state agency or political subdivision administers one or more	862
components of the medicaid program that the United States	863
department of health and human services approved on or after	864
January 1, 2002, or administers one or more aspects of such a	865
component, the department of job and family services shall retain	866
or collect not less than three and not more than ten per cent of	867
the federal financial participation the state agency or political	868
subdivision obtains through an approved, administrative claim	869
regarding the component or aspect of the component. The	870
percentage the department retains or collects shall be specified	871
in a contract the department enters into with the state agency or	872
political subdivision under section 5111.91 of the Revised Code.	873

(B) The department of job and family services may retain or	874
collect a percentage of federal financial participation under	875
divisions (A)(1) and (2) of this section only to the extent	876
permitted by federal statutes and regulations.	877

(C) All amounts the department retains or collects under	878
this section shall be deposited into the health care services	879
administration fund created under section 5111.94 of the Revised	880
Code.	881

Sec. 5111.93.  The department of job and family services	882
may retain or collect a percentage of the federal financial	883
participation included in a supplemental medicaid payment to one	884
or more medicaid providers owned or operated by a state agency or	885
political subdivision that brings the payment to such provider or	886
providers to the upper payment limit established by 42 C.F.R.	887
447.272. If the department retains or collects a percentage of	888
that federal financial participation, the department shall adopt a	889
rule under Chapter 119. of the Revised Code specifying the	890
percentage the department is to retain or collect. All amounts the	891
department retains or collects under this section shall be	892
deposited into the health care services administration fund	893
created under section 5111.94 of the Revised Code.	894

Sec. 5111.94.  (A) As used in this section, "vendor	895
offset" means a reduction of a medicaid payment to a medicaid	896
provider to correct a previous, incorrect medicaid payment to that	897
provider.	898

(B) There is hereby created in the state treasury the	899
health care services administration fund. Except as provided in	900
division (C) of this section, all the following shall be	901
deposited into the fund:	902

(1) Amounts deposited into the fund pursuant to sections	903
5111.92 and 5111.93 of the Revised Code;	904

(2) The amount of the state share of all money the	905
department of job and family services, in fiscal year 2003 and	906
each fiscal year thereafter, recovers pursuant to a tort action	907
under the department's right of recovery under section 5101.58 of	908
the Revised Code that exceeds the state share of all money the	909
department, in fiscal year 2002, recovers pursuant to a tort	910
action under that right of recovery;	911

(3) Subject to division (D) of this section, the amount of	912
the state share of all money the department of job and family	913
services, in fiscal year 2003 and each fiscal year thereafter,	914
recovers through audits of medicaid providers that exceeds the	915
state share of all money the department, in fiscal year 2002,	916
recovers through such audits;	917

(4) Until October 16, 2003, amounts from assessments on	918
hospitals under section 5112.06 of the Revised Code and	919
intergovernmental transfers by governmental hospitals under	920
section 5112.07 of the Revised Code that are deposited into the	921
fund in accordance with the law.	922

(C) No funds shall be deposited into the health care	923
services administration fund in violation of federal statutes or	924
regulations.	925

(D) In determining under division (B)(3) of this section	926
the amount of money the department, in a fiscal year, recovers	927
through audits of medicaid providers, the amount recovered in the	928
form of vendor offset shall be excluded.	929

(E) The director of job and family services shall use funds	930
available in the health care services administration fund to pay	931
for costs associated with the administration of the medicaid	932
program.	933

Sec. 5112.01.  As used in sections 5112.03 to 5112.21 of the	934
Revised Code:	935

(A)(1) "Hospital" means a nonfederal hospital to which either	936
of the following applies:	937

(a) The hospital is registered under section 3701.07 of the	938
Revised Code as a general medical and surgical hospital or a	939
pediatric general hospital, and provides inpatient hospital	940
services, as defined in 42 C.F.R. 440.10;	941

(b) The hospital is recognized under the medicare program	942
established by Title XVIII of the "Social Security Act," 49 Stat.	943
620 (1935), 42 U.S.C.A. 301, as amended, as a cancer hospital and	944
is exempt from the medicare prospective payment system.	945

"Hospital" does not include a hospital operated by a health	946
insuring corporation that has been issued a certificate of	947
authority under section 1751.05 of the Revised Code or a hospital	948
that does not charge patients for services.	949

(2) "Disproportionate share hospital" means a hospital that	950
meets the definition of a disproportionate share hospital in rules	951
adopted under section 5112.03 of the Revised Code.	952

(B) "Bad debt," "charity care," "courtesy care," and	953
"contractual allowances" have the same meanings given these terms	954
in regulations adopted under Title XVIII of the "Social Security	955
Act."	956

(C) "Cost reporting period" means the twelve-month period	957
used by a hospital in reporting costs for purposes of Title XVIII	958
of the "Social Security Act."	959

(D) "Governmental hospital" means a county hospital with more	960
than five hundred registered beds or a state-owned and -operated	961
hospital with more than five hundred registered beds.	962

(E) "Indigent care pool" means the sum of the following:

963

(1) The total of assessments to be paid in a program year by	964
all hospitals under section 5112.06 of the Revised Code, less the	965
assessments deposited into the legislative budget services fund	966
under section 5112.19 of the Revised Code and into the health care	967
services administration fund created under section 5111.94 of the	968
Revised Code;	969

(2) The total amount of intergovernmental transfers required	970
to be made in the same program year by governmental hospitals	971
under section 5112.07 of the Revised Code, less the amount of	972
transfers deposited into the legislative budget services fund	973
under section 5112.19 of the Revised Code and into the health care	974
services administration fund created under section 5111.94 of the	975
Revised Code;	976

(3) The total amount of federal matching funds that will be	977
made available in the same program year as a result of funds	978
distributed by the department of job and family services to	979
hospitals under section 5112.08 of the Revised Code.	980

(F) "Intergovernmental transfer" means any transfer of money	981
by a governmental hospital under section 5112.07 of the Revised	982
Code.	983

(G) "Medical assistance program" means the program of medical	984
assistance established under section 5111.01 of the Revised Code	985
and Title XIX of the "Social Security Act."	986

(H) "Program year" means a period beginning the first day of	987
October, or a later date designated in rules adopted under section	988
5112.03 of the Revised Code, and ending the thirtieth day of	989
September, or an earlier date designated in rules adopted under	990
that section.	991

(I) "Registered beds" means the total number of hospital beds	992
registered with the department of health, as reported in the most	993
recent "directory of registered hospitals" published by the	994
department of health.	995

(J) "Total facility costs" means the total costs for all	996
services rendered to all patients, including the direct, indirect,	997
and overhead cost to the hospital of all services, supplies,	998
equipment, and capital related to the care of patients, regardless	999
of whether patients are enrolled in a health insuring corporation,	1000
excluding costs associated with providing skilled nursing services	1001
in distinct-part nursing facility units, as shown on the	1002
hospital's cost report filed under section 5112.04 of the Revised	1003
Code. Effective October 1, 1993, if rules adopted under section	1004
5112.03 of the Revised Code so provide, "total facility costs" may	1005
exclude costs associated with providing care to recipients of any	1006
of the governmental programs listed in division (B) of that	1007
section.	1008

(K) "Uncompensated care" means bad debt and charity care.

1009

Sec. 5112.06.  (A) For the purpose of distributing funds to	1010
hospitals under the medical assistance program pursuant to	1011
sections 5112.01 to 5112.21 of the Revised Code and depositing	1012
funds into the legislative budget services fund under section	1013
5112.19 of the Revised Code and into the health care services	1014
administration fund created under section 5111.94 of the Revised	1015
Code, there is hereby imposed an assessment on all hospitals. Each	1016
hospital's assessment shall be based on total facility costs. All	1017
hospitals shall be assessed according to the rate or rates	1018
established each program year by the department of job and family	1019
services in rules adopted under section 5112.03 of the Revised	1020
Code. The department shall assess all hospitals uniformly and in	1021
a manner consistent with federal statutes and regulations. During	1022
any program year, the department shall not assess any hospital	1023
more than two per cent of the hospital's total facility costs.	1024

The department shall establish an assessment rate or rates	1025
each program year that will do both of the following:	1026

(1) Yield funds that, when combined with intergovernmental	1027
transfers and federal matching funds, will produce a program of	1028
sufficient size to pay a substantial portion of the indigent care	1029
provided by hospitals;	1030

(2) Yield funds that, when combined with intergovernmental	1031
transfers and federal matching funds, will produce amounts for	1032
distribution to disproportionate share hospitals that do not	1033
exceed, in the aggregate, the limits prescribed by the United	1034
States health care financing administration under subsection (f)	1035
of section 1923 of the "Social Security Act," 49 Stat. 620 (1935),	1036
42 U.S.C.A. 1396r-4(f), as amended.	1037

(B)(1) Except as provided in division (B)(3) of this	1038
section, each hospital shall pay its assessment in periodic	1039
installments in accordance with a schedule established by the	1040
director of job and family services in rules adopted under section	1041
5112.03 of the Revised Code.	1042

(2) The installments shall be equal in amount, unless either	1043
of the following applies:	1044

(a) The department makes adjustments during a program year	1045
under division (D) of section 5112.09 of the Revised Code in the	1046
total amount of hospitals' assessments;	1047

(b) The director of job and family services determines that	1048
adjustments in the amounts of installments are necessary for the	1049
administration of sections 5112.01 to 5112.21 of the Revised Code	1050
and that unequal installments will not create cash flow	1051
difficulties for hospitals.	1052

(3) The director may adopt rules under section 5112.03 of	1053
the Revised Code establishing alternate schedules for hospitals to	1054
pay assessments under this section in order to reduce hospitals'	1055
cash flow difficulties.	1056

Sec. 5112.07.  (A) The department of job and family services	1057
may require governmental hospitals to make intergovernmental	1058
transfers each program year for the purpose of distributing funds	1059
to hospitals under the medical assistance program pursuant to	1060
sections 5112.01 to 5112.21 of the Revised Code and depositing	1061
funds into the legislative budget services fund under section	1062
5112.19 of the Revised Code and into the health care services	1063
administration fund created under section 5111.94 of the Revised	1064
Code. The department shall not require transfers in an amount	1065
that, when combined with hospital assessments paid under section	1066
5112.06 of the Revised Code and federal matching funds, produce	1067
amounts for distribution to disproportionate share hospitals that,	1068
in the aggregate, exceed limits prescribed by the United States	1069
health care financing administration under subsection (f) of	1070
section 1923 of the "Social Security Act," 49 Stat. 620 (1935), 42	1071
U.S.C.A. 1396r-4(f), as amended.	1072

(B) Before or during each program year, the department shall	1073
notify each governmental hospital of the amount of the	1074
intergovernmental transfer it is required to make during the	1075
program year. Each governmental hospital shall make	1076
intergovernmental transfers as required by the department under	1077
this section in periodic installments, executed by electronic fund	1078
transfer, in accordance with a schedule established in rules	1079
adopted under section 5112.03 of the Revised Code.	1080

Sec. 5112.11. TheExcept for moneys deposited into the	1081
legislative budget services fund under section 5112.19 of the	1082
Revised Code and the health care services administration fund	1083
created under section 5111.94 of the Revised Code, the department	1084
of job and family services shall not use money paid to the	1085
department under sections 5112.06 and 5112.07 of the Revised Code	1086
or money that the department pays to hospitals under section	1087
5112.08 of the Revised Code to replace any funds appropriated by	1088
the general assembly for the medical assistance program.	1089

Sec. 5123.041.  (A) As used in this section, "habilitation	1090
center" means a habilitation center that provides habilitation	1091
center services under section 5111.041 of the Revised Code.	1092

(B) The department of mental retardation and developmental	1093
disabilities shall do all of the following pursuant to an	1094
interagency agreementa contract with the department of job and	1095
family services entered into under section 5111.865111.91 of the	1096
Revised Code:	1097

(1) Certify habilitation centers that meet the certification	1098
requirements established by rules adopted by the director of job	1099
and family services under section 5111.041 of the Revised Code;	1100

(2) Accept and process medicaid reimbursement claims from	1101
habilitation centers providing habilitation center services to	1102
medicaid recipients under section 5111.041 of the Revised Code;	1103

(3) With medicaid funds provided to the department from the	1104
department of job and family services, pay the medicaid	1105
reimbursement claims accepted and processed under division (B)(2)	1106
of this section;	1107

(4) Perform the other duties included in the interagency	1108
agreement.	1109

(C) The director of mental retardation and developmental	1110
disabilities shall adopt rules in accordance with Chapter 119. of	1111
the Revised Code that do all of the following:	1112

(1) Establish procedures for certification of habilitation	1113
centers;	1114

(2) Establish the fee that may be assessed under division (D)	1115
of this section;	1116

(3) Specify how the department of mental retardation and	1117
developmental disabilities will perform its duties under this	1118
section.	1119

(D) The department of mental retardation and developmental	1120
disabilities may assess the fee established by rule under division	1121
(C)(2) of this section for performing its duties under this	1122
section. The fee may be retained from any payment the department	1123
makes under division (B)(3) of this section.	1124

Sec. 5733.04.  As used in this chapter:

1125

(A) "Issued and outstanding shares of stock" applies to	1126
nonprofit corporations, as provided in section 5733.01 of the	1127
Revised Code, and includes, but is not limited to, membership	1128
certificates and other instruments evidencing ownership of an	1129
interest in such nonprofit corporations, and with respect to a	1130
financial institution that does not have capital stock, "issued	1131
and outstanding shares of stock" includes, but is not limited to,	1132
ownership interests of depositors in the capital employed in such	1133
an institution.	1134

(B) "Taxpayer" means a corporation subject to the tax	1135
imposed by section 5733.06 of the Revised Code.	1136

(C) "Resident" means a corporation organized under the laws	1137
of this state.	1138

(D) "Commercial domicile" means the principal place from	1139
which the trade or business of the taxpayer is directed or	1140
managed.	1141

(E) "Taxable year" means the period prescribed by division	1142
(A) of section 5733.031 of the Revised Code upon the net income of	1143
which the value of the taxpayer's issued and outstanding shares of	1144
stock is determined under division (B) of section 5733.05 of the	1145
Revised Code or the period prescribed by division (A) of section	1146
5733.031 of the Revised Code that immediately precedes the date as	1147
of which the total value of the corporation is determined under	1148
division (A) or (C) of section 5733.05 of the Revised Code.	1149

(F) "Tax year" means the calendar year in and for which the	1150
tax imposed by section 5733.06 of the Revised Code is required to	1151
be paid.	1152

(G) "Internal Revenue Code" means the "Internal Revenue Code	1153
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	1154

(H) "Federal income tax" means the income tax imposed by the	1155
Internal Revenue Code.	1156

(I) Except as provided in section 5733.058 of the Revised	1157
Code, "net income" means the taxpayer's taxable income before	1158
operating loss deduction and special deductions, as required to be	1159
reported for the taxpayer's taxable year under the Internal	1160
Revenue Code, subject to the following adjustments:	1161

(1)(a) Deduct any net operating loss incurred in any taxable	1162
years ending in 1971 or thereafter but exclusive of any net	1163
operating loss incurred in taxable years ending prior to January	1164
1, 1971. This deduction shall not be allowed in any tax year	1165
commencing before December 31, 1973, but shall be carried over and	1166
allowed in tax years commencing after December 31, 1973, until	1167
fully utilized in the next succeeding taxable year or years in	1168
which the taxpayer has net income, but in no case for more than	1169
the designated carryover period as described in division (I)(1)(b)	1170
of this section. The amount of such net operating loss, as	1171
determined under the allocation and apportionment provisions of	1172
section 5733.051 and division (B) of section 5733.05 of the	1173
Revised Code for the year in which the net operating loss occurs,	1174
shall be deducted from net income, as determined under the	1175
allocation and apportionment provisions of section 5733.051 and	1176
division (B) of section 5733.05 of the Revised Code, to the extent	1177
necessary to reduce net income to zero with the remaining unused	1178
portion of the deduction, if any, carried forward to the remaining	1179
years of the designated carryover period as described in division	1180
(I)(1)(b) of this section, or until fully utilized, whichever	1181
occurs first.	1182

(b) For losses incurred in taxable years ending on or before	1183
December 31, 1981, the designated carryover period shall be the	1184
five consecutive taxable years after the taxable year in which the	1185
net operating loss occurred. For losses incurred in taxable years	1186
ending on or after January 1, 1982, the designated carryover	1187
period shall be the fifteen consecutive taxable years after the	1188
taxable year in which the net operating loss occurs.	1189

(c) The tax commissioner may require a taxpayer to furnish	1190
any information necessary to support a claim for deduction under	1191
division (I)(1)(a) of this section and no deduction shall be	1192
allowed unless the information is furnished.	1193

(2) Deduct any amount included in net income by application	1194
of section 78 or 951 of the Internal Revenue Code, amounts	1195
received for royalties, technical or other services derived from	1196
sources outside the United States, and dividends received from a	1197
subsidiary, associate, or affiliated corporation that neither	1198
transacts any substantial portion of its business nor regularly	1199
maintains any substantial portion of its assets within the United	1200
States. For purposes of determining net foreign source income	1201
deductible under division (I)(2) of this section, the amount of	1202
gross income from all such sources other than dividend income and	1203
income derived by application of section 78 or 951 of the Internal	1204
Revenue Code shall be reduced by:	1205

(a) The amount of any reimbursed expenses for personal	1206
services performed by employees of the taxpayer for the	1207
subsidiary, associate, or affiliated corporation;	1208

(b) Ten per cent of the amount of royalty income and	1209
technical assistance fees;	1210

(c) Fifteen per cent of the amount of dividends and all	1211
other income.	1212

The amounts described in divisions (I)(2)(a) to (c) of this	1213
section are deemed to be the expenses attributable to the	1214
production of deductible foreign source income unless the taxpayer	1215
shows, by clear and convincing evidence, less actual expenses, or	1216
the tax commissioner shows, by clear and convincing evidence, more	1217
actual expenses.	1218

(3) Add any loss or deduct any gain resulting from the sale,	1219
exchange, or other disposition of a capital asset, or an asset	1220
described in section 1231 of the Internal Revenue Code, to the	1221
extent that such loss or gain occurred prior to the first taxable	1222
year on which the tax provided for in section 5733.06 of the	1223
Revised Code is computed on the corporation's net income. For	1224
purposes of division (I)(3) of this section, the amount of the	1225
prior loss or gain shall be measured by the difference between the	1226
original cost or other basis of the asset and the fair market	1227
value as of the beginning of the first taxable year on which the	1228
tax provided for in section 5733.06 of the Revised Code is	1229
computed on the corporation's net income. At the option of the	1230
taxpayer, the amount of the prior loss or gain may be a percentage	1231
of the gain or loss, which percentage shall be determined by	1232
multiplying the gain or loss by a fraction, the numerator of which	1233
is the number of months from the acquisition of the asset to the	1234
beginning of the first taxable year on which the fee provided in	1235
section 5733.06 of the Revised Code is computed on the	1236
corporation's net income, and the denominator of which is the	1237
number of months from the acquisition of the asset to the sale,	1238
exchange, or other disposition of the asset. The adjustments	1239
described in this division do not apply to any gain or loss where	1240
the gain or loss is recognized by a qualifying taxpayer, as	1241
defined in section 5733.0510 of the Revised Code, with respect to	1242
a qualifying taxable event, as defined in that section.	1243

(4) Deduct the dividend received deduction provided by	1244
section 243 of the Internal Revenue Code.	1245

(5) Deduct any interest or interest equivalent on public	1246
obligations and purchase obligations to the extent included in	1247
federal taxable income. As used in divisions (I)(5) and (6) of	1248
this section, "public obligations," "purchase obligations," and	1249
"interest or interest equivalent" have the same meanings as in	1250
section 5709.76 of the Revised Code.	1251

(6) Add any loss or deduct any gain resulting from the sale,	1252
exchange, or other disposition of public obligations to the extent	1253
included in federal taxable income.	1254

(7) To the extent not otherwise allowed, deduct any	1255
dividends or distributions received by a taxpayer from a public	1256
utility, excluding an electric company, if the taxpayer owns at	1257
least eighty per cent of the issued and outstanding common stock	1258
of the public utility. As used in division (I)(7) of this	1259
section, "public utility" means a public utility as defined in	1260
Chapter 5727. of the Revised Code, whether or not the public	1261
utility is doing business in the state.	1262

(8) To the extent not otherwise allowed, deduct any	1263
dividends received by a taxpayer from an insurance company, if the	1264
taxpayer owns at least eighty per cent of the issued and	1265
outstanding common stock of the insurance company. As used in	1266
division (I)(8) of this section, "insurance company" means an	1267
insurance company that is taxable under Chapter 5725. or 5729. of	1268
the Revised Code.	1269

(9) Deduct expenditures for modifying existing buildings or	1270
structures to meet American national standards institute standard	1271
A-117.1-1961 (R-1971), as amended; provided, that no deduction	1272
shall be allowed to the extent that such deduction is not	1273
permitted under federal law or under rules of the tax	1274
commissioner. Those deductions as are allowed may be taken over a	1275
period of five years. The tax commissioner shall adopt rules	1276
under Chapter 119. of the Revised Code establishing reasonable	1277
limitations on the extent that expenditures for modifying existing	1278
buildings or structures are attributable to the purpose of making	1279
the buildings or structures accessible to and usable by physically	1280
handicapped persons.	1281

(10) Deduct the amount of wages and salaries, if any, not	1282
otherwise allowable as a deduction but that would have been	1283
allowable as a deduction in computing federal taxable income	1284
before operating loss deduction and special deductions for the	1285
taxable year, had the targeted jobs credit allowed and determined	1286
under sections 38, 51, and 52 of the Internal Revenue Code not	1287
been in effect.	1288

(11) Deduct net interest income on obligations of the United	1289
States and its territories and possessions or of any authority,	1290
commission, or instrumentality of the United States to the extent	1291
the laws of the United States prohibit inclusion of the net	1292
interest for purposes of determining the value of the taxpayer's	1293
issued and outstanding shares of stock under division (B) of	1294
section 5733.05 of the Revised Code. As used in division (I)(11)	1295
of this section, "net interest" means interest net of any expenses	1296
taken on the federal income tax return that would not have been	1297
allowed under section 265 of the Internal Revenue Code if the	1298
interest were exempt from federal income tax.	1299

(12)(a) Except as set forth in division (I)(12)(d) of this	1300
section, to the extent not included in computing the taxpayer's	1301
federal taxable income before operating loss deduction and special	1302
deductions, add gains and deduct losses from direct or indirect	1303
sales, exchanges, or other dispositions, made by a related entity	1304
who is not a taxpayer, of the taxpayer's indirect, beneficial, or	1305
constructive investment in the stock or debt of another entity,	1306
unless the gain or loss has been included in computing the federal	1307
taxable income before operating loss deduction and special	1308
deductions of another taxpayer with a more closely related	1309
investment in the stock or debt of the other entity. The amount	1310
of gain added or loss deducted shall not exceed the product	1311
obtained by multiplying such gain or loss by the taxpayer's	1312
proportionate share, directly, indirectly, beneficially, or	1313
constructively, of the outstanding stock of the related entity	1314
immediately prior to the direct or indirect sale, exchange, or	1315
other disposition.	1316

(b) Except as set forth in division (I)(12)(e) of this	1317
section, to the extent not included in computing the taxpayer's	1318
federal taxable income before operating loss deduction and special	1319
deductions, add gains and deduct losses from direct or indirect	1320
sales, exchanges, or other dispositions made by a related entity	1321
who is not a taxpayer, of intangible property other than stock,	1322
securities, and debt, if such property was owned, or used in whole	1323
or in part, at any time prior to or at the time of the sale,	1324
exchange, or disposition by either the taxpayer or by a related	1325
entity that was a taxpayer at any time during the related entity's	1326
ownership or use of such property, unless the gain or loss has	1327
been included in computing the federal taxable income before	1328
operating loss deduction and special deductions of another	1329
taxpayer with a more closely related ownership or use of such	1330
intangible property. The amount of gain added or loss deducted	1331
shall not exceed the product obtained by multiplying such gain or	1332
loss by the taxpayer's proportionate share, directly, indirectly,	1333
beneficially, or constructively, of the outstanding stock of the	1334
related entity immediately prior to the direct or indirect sale,	1335
exchange, or other disposition.	1336

(c) As used in division (I)(12) of this section, "related	1337
entity" means those entities described in divisions (I)(12)(c)(i)	1338
to (iii) of this section:	1339

(i) An individual stockholder, or a member of the	1340
stockholder's family enumerated in section 318 of the Internal	1341
Revenue Code, if the stockholder and the members of the	1342
stockholder's family own, directly, indirectly, beneficially, or	1343
constructively, in the aggregate, at least fifty per cent of the	1344
value of the taxpayer's outstanding stock;	1345

(ii) A stockholder, or a stockholder's partnership, estate,	1346
trust, or corporation, if the stockholder and the stockholder's	1347
partnerships, estates, trusts, and corporations own directly,	1348
indirectly, beneficially, or constructively, in the aggregate, at	1349
least fifty per cent of the value of the taxpayer's outstanding	1350
stock;	1351

(iii) A corporation, or a party related to the corporation	1352
in a manner that would require an attribution of stock from the	1353
corporation to the party or from the party to the corporation	1354
under division (I)(12)(c)(iv) of this section, if the taxpayer	1355
owns, directly, indirectly, beneficially, or constructively, at	1356
least fifty per cent of the value of the corporation's outstanding	1357
stock.	1358

(iv) The attribution rules of section 318 of the Internal	1359
Revenue Code apply for purposes of determining whether the	1360
ownership requirements in divisions (I)(12)(c)(i) to (iii) of this	1361
section have been met.	1362

(d) For purposes of the adjustments required by division	1363
(I)(12)(a) of this section, the term "investment in the stock or	1364
debt of another entity" means only those investments where the	1365
taxpayer and the taxpayer's related entities directly, indirectly,	1366
beneficially, or constructively own, in the aggregate, at any time	1367
during the twenty-four month period commencing one year prior to	1368
the direct or indirect sale, exchange, or other disposition of	1369
such investment at least fifty per cent or more of the value of	1370
either the outstanding stock or such debt of such other entity.	1371

(e) For purposes of the adjustments required by division	1372
(I)(12)(b) of this section, the term "related entity" excludes all	1373
of the following:	1374

(i) Foreign corporations as defined in section 7701 of the	1375
Internal Revenue Code;	1376

(ii) Foreign partnerships as defined in section 7701 of the	1377
Internal Revenue Code;	1378

(iii) Corporations, partnerships, estates, and trusts	1379
created or organized in or under the laws of the Commonwealth of	1380
Puerto Rico or any possession of the United States;	1381

(iv) Foreign estates and foreign trusts as defined in	1382
section 7701 of the Internal Revenue Code.	1383

The exclusions described in divisions (I)(12)(e)(i) to (iv)	1384
of this section do not apply if the corporation, partnership,	1385
estate, or trust is described in any one of divisions (C)(1) to	1386
(5) of section 5733.042 of the Revised Code.	1387

(f) Nothing in division (I)(12) of this section shall	1388
require or permit a taxpayer to add any gains or deduct any losses	1389
described in divisions (I)(12)(f)(i) and (ii) of this section:	1390

(i) Gains or losses recognized for federal income tax	1391
purposes by an individual, estate, or trust without regard to the	1392
attribution rules described in division (I)(12)(c) of this	1393
section;	1394

(ii) A related entity's gains or losses described in	1395
division (I)(12)(b) of this section if the taxpayer's ownership of	1396
or use of such intangible property was limited to a period not	1397
exceeding nine months and was attributable to a transaction or a	1398
series of transactions executed in accordance with the election or	1399
elections made by the taxpayer or a related entity pursuant to	1400
section 338 of the Internal Revenue Code.	1401

(13) Any adjustment required by section 5733.042 of the	1402
Revised Code.	1403

(14) Add any amount claimed as a credit under section	1404
5733.0611 of the Revised Code to the extent that such amount	1405
satisfies either of the following:	1406

(a) It was deducted or excluded from the computation of the	1407
corporation's taxable income before operating loss deduction and	1408
special deductions as required to be reported for the	1409
corporation's taxable year under the Internal Revenue Code;	1410

(b) It resulted in a reduction of the corporation's taxable	1411
income before operating loss deduction and special deductions as	1412
required to be reported for any of the corporation's taxable years	1413
under the Internal Revenue Code.	1414

(15) Deduct the amount contributed by the taxpayer to an	1415
individual development account program established by a county	1416
department of job and family services pursuant to sections 329.11	1417
to 329.14 of the Revised Code for the purpose of matching funds	1418
deposited by program participants. On request of the tax	1419
commissioner, the taxpayer shall provide any information that, in	1420
the tax commissioner's opinion, is necessary to establish the	1421
amount deducted under division (I)(15) of this section.	1422

(16) Any adjustment required by section 5733.0510 of the	1423
Revised Code.	1424

(17)(a) Add five-sixths of the amount of depreciation	1425
expense allowed under subsection (k) of section 168 of the	1426
Internal Revenue Code, including a person's proportionate or	1427
distributive share of the amount of depreciation expense allowed	1428
by that subsection to any pass-through entity in which the person	1429
has direct or indirect ownership. The tax commissioner, under	1430
procedures established by the commissioner, may waive the add-back	1431
related to a pass-through entity if the person owns, directly or	1432
indirectly, less than five per cent of the pass-through entity.	1433

(b) Nothing in division (I)(17) of this section shall be	1434
construed to adjust or modify the adjusted basis of any asset.	1435

(c) To the extent the add-back is attributable to property	1436
generating income or loss allocable under section 5733.051 of the	1437
Revised Code, the add-back shall be allocated to the same location	1438
as the income or loss generated by that property. Otherwise, the	1439
add-back shall be apportioned, subject to division (B)(2)(d) of	1440
section 5733.05 of the Revised Code.	1441

(18)(a) If a person is required to make the add-back under	1442
division (I)(17)(a) of this section for a tax year, the person	1443
shall deduct one-fifth of the amount added back for each of the	1444
succeeding five tax years.	1445

(b) If the amount deducted under division (I)(18)(a) of	1446
this section is attributable to an add-back allocated under	1447
division (I)(17)(c) of this section, the amount deducted shall be	1448
allocated to the same location. Otherwise, the amount shall be	1449
apportioned using the apportionment factors for the taxable year	1450
in which the deduction is taken, subject to division (B)(2)(d) of	1451
section 5733.05 of the Revised Code.	1452

(J) Any term used in this chapter has the same meaning as	1453
when used in comparable context in the laws of the United States	1454
relating to federal income taxes unless a different meaning is	1455
clearly required. Any reference in this chapter to the Internal	1456
Revenue Code includes other laws of the United States relating to	1457
federal income taxes.	1458

(K) "Financial institution" has the meaning given by section	1459
5725.01 of the Revised Code but does not include a production	1460
credit association as described in 85 Stat. 597, 12 U.S.C.A. 2091.	1461

(L)(1) A "qualifying holding company" is any corporation	1462
satisfying all of the following requirements:	1463

(a) Subject to divisions (L)(2) and (3) of this section, the	1464
net book value of the corporation's intangible assets is greater	1465
than or equal to ninety per cent of the net book value of all of	1466
its assets and at least fifty per cent of the net book value of	1467
all of its assets represents direct or indirect investments in the	1468
equity of, loans and advances to, and accounts receivable due from	1469
related members;	1470

(b) At least ninety per cent of the corporation's gross	1471
income for the taxable year is attributable to the following:	1472

(i) The maintenance, management, ownership, acquisition,	1473
use, and disposition of its intangible property, its aircraft the	1474
use of which is not subject to regulation under 14 C.F.R. part 121	1475
or part 135, and any real property described in division (L)(2)(c)	1476
of this section;	1477

(ii) The collection and distribution of income from such	1478
property.	1479

(c) The corporation is not a financial institution on the	1480
last day of the taxable year ending prior to the first day of the	1481
tax year;	1482

(d) The corporation's related members make a good faith and	1483
reasonable effort to make timely and fully the adjustments	1484
required by division (C)(2) of section 5733.05 of the Revised Code	1485
and to pay timely and fully all uncontested taxes, interest,	1486
penalties, and other fees and charges imposed under this chapter;	1487

(e) Subject to division (L)(4) of this section, the	1488
corporation elects to be treated as a qualifying holding company	1489
for the tax year.	1490

A corporation otherwise satisfying divisions (L)(1)(a) to (e)	1491
of this section that does not elect to be a qualifying holding	1492
company is not a qualifying holding company for the purposes of	1493
this chapter.	1494

(2)(a)(i) For purposes of making the ninety per cent	1495
computation under division (L)(1)(a) of this section, the net book	1496
value of the corporation's assets shall not include the net book	1497
value of aircraft or real property described in division	1498
(L)(1)(b)(i) of this section.	1499

(ii) For purposes of making the fifty per cent computation	1500
under division (L)(1)(a) of this section, the net book value of	1501
assets shall include the net book value of aircraft or real	1502
property described in division (L)(1)(b)(i) of this section.	1503

(b)(i) As used in division (L) of this section, "intangible	1504
asset" includes, but is not limited to, the corporation's direct	1505
interest in each pass-through entity only if at all times during	1506
the corporation's taxable year ending prior to the first day of	1507
the tax year the corporation's and the corporation's related	1508
members' combined direct and indirect interests in the capital or	1509
profits of such pass-through entity do not exceed fifty per cent.	1510
If the corporation's interest in the pass-through entity is an	1511
intangible asset for that taxable year, then the distributive	1512
share of any income from the pass-through entity shall be income	1513
from an intangible asset for that taxable year.	1514

(ii) If a corporation's and the corporation's related	1515
members' combined direct and indirect interests in the capital or	1516
profits of a pass-through entity exceed fifty per cent at any time	1517
during the corporation's taxable year ending prior to the first	1518
day of the tax year, "intangible asset" does not include the	1519
corporation's direct interest in the pass-through entity, and the	1520
corporation shall include in its assets its proportionate share of	1521
the assets of any such pass-through entity and shall include in	1522
its gross income its distributive share of the gross income of	1523
such pass-through entity in the same form as was earned by the	1524
pass-through entity.	1525

(iii) A pass-through entity's direct or indirect	1526
proportionate share of any other pass-through entity's assets	1527
shall be included for the purpose of computing the corporation's	1528
proportionate share of the pass-through entity's assets under	1529
division (L)(2)(b)(ii) of this section, and such pass-through	1530
entity's distributive share of any other pass-through entity's	1531
gross income shall be included for purposes of computing the	1532
corporation's distributive share of the pass-through entity's	1533
gross income under division (L)(2)(b)(ii) of this section.	1534

(c) For the purposes of divisions (L)(1)(b)(i), (1)(b)(ii),	1535
(2)(a)(i), and (2)(a)(ii) of this section, real property is	1536
described in division (L)(2)(c) of this section only if all of the	1537
following conditions are present at all times during the taxable	1538
year ending prior to the first day of the tax year:	1539

(i) The real property serves as the headquarters of the	1540
corporation's trade or business, or is the place from which the	1541
corporation's trade or business is principally managed or	1542
directed;	1543

(ii) Not more than ten per cent of the value of the real	1544
property and not more than ten per cent of the square footage of	1545
the building or buildings that are part of the real property is	1546
used, made available, or occupied for the purpose of providing,	1547
acquiring, transferring, selling, or disposing of tangible	1548
property or services in the normal course of business to persons	1549
other than related members, the corporation's employees and their	1550
families, and such related members' employees and their families.	1551

(d) As used in division (L) of this section, "related	1552
member" has the same meaning as in division (A)(6) of section	1553
5733.042 of the Revised Code without regard to division (B) of	1554
that section.	1555

(3) The percentages described in division (L)(1)(a) of this	1556
section shall be equal to the quarterly average of those	1557
percentages as calculated during the corporation's taxable year	1558
ending prior to the first day of the tax year.	1559

(4) With respect to the election described in division	1560
(L)(1)(e) of this section:	1561

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

1562

(b) The election need not accompany the report; rather, the	1563
election may accompany a subsequently filed but timely application	1564
for refund and timely amended report, or a subsequently filed but	1565
timely petition for reassessment;	1566

(c) The election is not irrevocable;

1567

(d) The election applies only to the tax year specified by	1568
the corporation;	1569

(e) The corporation's related members comply with division	1570
(L)(1)(d) of this section.	1571

Nothing in division (L)(4) of this section shall be construed	1572
to extend any statute of limitations set forth in this chapter.	1573

(M) "Qualifying controlled group" means two or more	1574
corporations that satisfy the ownership and control requirements	1575
of division (A) of section 5733.052 of the Revised Code.	1576

(N) "Limited liability company" means any limited liability	1577
company formed under Chapter 1705. of the Revised Code or under	1578
the laws of any other state.	1579

(O) "Pass-through entity" means a corporation that has made	1580
an election under subchapter S of Chapter 1 of Subtitle A of the	1581
Internal Revenue Code for its taxable year under that code, or a	1582
partnership, limited liability company, or any other person, other	1583
than an individual, trust, or estate, if the partnership, limited	1584
liability company, or other person is not classified for federal	1585
income tax purposes as an association taxed as a corporation.	1586

(P) "Electric company" and "combined company" have the same	1587
meanings as in section 5727.01 of the Revised Code.	1588

Sec. 5743.02.  To provide revenues for the general revenue	1589
fund, an excise tax on sales of cigarettes is hereby levied at the	1590
rate of eleven and one-halfthirty-seven mills on each cigarette.	1591

Only one sale of the same article shall be used in computing	1592
the amount of tax due.	1593

The treasurer of state shall place to the credit of the tax	1594
refund fund created by section 5703.052 of the Revised Code, out	1595
of receipts from the tax levied by this section, amounts equal to	1596
the refunds certified by the tax commissioner pursuant to section	1597
5743.05 of the Revised Code. The balance of taxes collected under	1598
such section, after the credits to the tax refund fund, shall be	1599
paid into the general revenue fund.	1600

Sec. 5743.03.  Except as provided in section 5743.04 of the	1601
Revised Code, the taxes imposed under sections 5743.02, 5743.023,	1602
5743.024, and 5743.026 of the Revised Code shall be paid by the	1603
purchase of stamps. A stamp shall be affixed to each package of	1604
an aggregate denomination not less than the amount of the tax upon	1605
the contents thereof. The stamp, so affixed, shall be prima-facie	1606
evidence of payment of the tax. Except as is provided in the	1607
rules prescribed by the tax commissioner under authority of	1608
sections 5743.01 to 5743.20 of the Revised Code, and unless such	1609
stamps have been previously affixed, they shall be so affixed by	1610
each wholesale dealer, and canceled by writing or stamping across	1611
the face thereof the number assigned to such wholesale dealer by	1612
the tax commissioner for that purpose, prior to the delivery of	1613
any cigarettes to any person in this state, or in the case of a	1614
tax levied pursuant to section 5743.024 or 5743.026 of the Revised	1615
Code, prior to the delivery of cigarettes to any person in the	1616
county in which the tax is levied.	1617

Except as provided in the rules prescribed by the	1618
commissioner under authority of sections 5743.01 to 5743.20 of the	1619
Revised Code, and unless such stamps have been previously affixed,	1620
each retail dealer shall within twenty-four hours after the	1621
receipt of any cigarettes at the retail dealer's place of business	1622
and prior to the delivery thereof to any person in this state, or	1623
in the case of a tax levied pursuant to section 5743.024 or	1624
5743.026 of the Revised Code prior to the delivery thereof to any	1625
person in the county in which the tax is levied, so affix such	1626
stamps and cancel same by writing or stamping across the face	1627
thereof the number assigned to such retail dealer by the	1628
commissioner for that purpose.	1629

Whenever any cigarettes are found in the place of business of	1630
any retail dealer without proper tax stamps affixed thereto and	1631
canceled, it is presumed that such cigarettes are kept therein in	1632
violation of sections 5743.01 to 5743.20 of the Revised Code.	1633

Each wholesale dealer and each retail dealer who purchases	1634
cigarettes without proper tax stamps affixed thereto shall, on or	1635
before the thirty-first day of the month following the close of	1636
each semiannual period, which period shall end on the thirtieth	1637
day of June and the thirty-first day of December of each year,	1638
make and file a return of the preceding semiannual period, on such	1639
form as is prescribed by the tax commissioner, showing the	1640
dealer's entire purchases and sales of cigarettes and stamps or	1641
impressions for such semiannual period and accurate inventories as	1642
of the beginning and end of each semiannual period of cigarettes,	1643
stamped or unstamped; cigarette tax stamps affixed or unaffixed	1644
and unused meter impressions; and such other information as the	1645
commissioner finds necessary to the proper administration of	1646
sections 5743.01 to 5743.20 of the Revised Code. The commissioner	1647
may extend the time for making and filing returns and may remit	1648
all or any part of amounts of penalties which may become due under	1649
sections 5743.01 to 5743.20 of the Revised Code. The wholesale or	1650
retail dealer shall deliver the return together with a remittance	1651
of the tax deficiency reported thereon to the treasurer of state.	1652
The treasurer of state shall stamp or otherwise mark on the return	1653
the date it was received and shall also show thereon by stamp or	1654
otherwise a payment or nonpayment of the deficiency shown by the	1655
return. Thereafter, the treasurer of state shall immediately	1656
transmit all returns filed under this section to the commissioner.	1657
Any wholesale or retail dealer who fails to file a return under	1658
this section and the rules of the commissioner may be required,	1659
for each day the dealer so fails, to forfeit and pay into the	1660
state treasury the sum of one dollar as revenue arising from the	1661
tax imposed by sections 5743.01 to 5743.20 of the Revised Code and	1662
such sum may be collected by assessment in the manner provided in	1663
section 5743.081 of the Revised Code. If the commissioner finds	1664
it necessary in order to insure the payment of the tax imposed by	1665
sections 5743.01 to 5743.20 of the Revised Code, the commissioner	1666
may require returns and payments to be made other than	1667
semiannually. The returns shall be signed by the wholesale or	1668
retail dealer or an authorized agent thereof.	1669

Sec. 5743.04.  The tax commissioner shall design and procure	1670
the stamps provided for in section 5743.03 of the Revised Code and	1671
shall enforce and administer sections 5743.01 to 5743.44 of the	1672
Revised Code. With respect to packages containing any number of	1673
cigarettes other than twenty, if the commissioner finds that it is	1674
practicable to collect the taxes levied under sections 5743.02,	1675
5743.023, 5743.024, and 5743.026 of the Revised Code by any method	1676
other than that provided in this section and section 5743.03 of	1677
the Revised Code, hethe commissioner may by rule prescribe such	1678
other method for payment of the taxes upon such packages of	1679
cigarettes as will adequately protect the revenue; provided, that	1680
in any case where the commissioner prescribes that the taxes upon	1681
such packages of cigarettes shall be paid on the basis of returns	1682
filed by a wholesale or retail dealer, said returns, together with	1683
a remittance of all taxes due as shown thereon, shall be filed	1684
with the treasurer of state not later than the tenth day of the	1685
month following the month in which such cigarettes are sold in	1686
this state. The commissioner may promulgate rules in accordance	1687
with sections 119.01 to 119.13 of the Revised Code as hethe	1688
commissioner deems necessary to carry out sections 5743.01 to	1689
5743.44 of the Revised Code and may adopt different detailed rules	1690
applicable to diverse methods and conditions of sale of	1691
cigarettes, prescribing, in each class of cases, upon whom, as	1692
between the wholesale dealer and the retail dealer, the primary	1693
duty of affixing stamps shall rest, and the manner in which stamps	1694
shall be affixed. A copy of such rules shall be furnished to	1695
every licensed dealer as provided in sections 119.01 to 119.13 of	1696
the Revised Code. Any such rule so furnished which excuses a	1697
wholesale dealer from affixing stamps under the circumstances of	1698
the particular case shall be a defense in the prosecution of such	1699
dealer for violation of section 5743.03 of the Revised Code.	1700

The commissioner, if he determinesafter determining that it	1701
is practicable to evidence payment of the taxes levied under	1702
sections 5743.02, 5743.023, 5743.024, and 5743.026 of the Revised	1703
Code by impression made by a metering device, shall by resolution	1704
provide that such metering device may be used in lieu of the	1705
stamps otherwise provided for in section 5743.03 of the Revised	1706
Code. The commissioner may authorize any wholesale or retail	1707
dealer to use the metering device approved by himthe	1708
commissioner. Such device before being used shall be sealed by	1709
the treasurer of state, and shall be used only in accordance with	1710
the rules prescribed by the commissioner.	1711

Wholesale and retail dealers authorized to use said device	1712
shall prepay the tax represented by meter impressions and shall	1713
deliver the metering device to the treasurer of state or county	1714
treasurer in the county in which the place of business of any	1715
wholesaler or retailer is located if such treasurer is designated	1716
by the treasurer of state, who shall seal the meter in accordance	1717
with the prepayments so made.	1718

Sec. 5743.05.  All stamps provided for by section 5743.03 of	1719
the Revised Code, when procured by the tax commissioner, shall be	1720
immediately delivered to the treasurer of state, who shall execute	1721
a receipt therefor showing the number and aggregate face value of	1722
each denomination received by the treasurer of state and any other	1723
information that the commissioner requires to enforce the	1724
collection and distribution of all taxes imposed under section	1725
5743.024 or 5743.026 of the Revised Code, and deliver the receipt	1726
to the commissioner. The treasurer of state shall sell the stamps	1727
and, on the fifth day of each month, make a report showing all	1728
sales made during the preceding month, with the names of	1729
purchasers, the number of each denomination, the aggregate face	1730
value purchased by each, and any other information as the	1731
commissioner requires to enforce the collection and distribution	1732
of all taxes imposed under section 5743.024 of the Revised Code,	1733
and deliver it to the commissioner. The treasurer of state shall	1734
be accountable for all stamps received and unsold. The stamps	1735
shall be sold and accounted for at their face value, except the	1736
commissioner shall, by rule certified to the treasurer of state,	1737
authorize the sale of stamps and meter impressions to wholesale or	1738
retail dealers in this state, or to wholesale dealers outside this	1739
state, at a discount of not less than one and eight-tenths per	1740
cent or more than ten per cent of their face value, as a	1741
commission for affixing and canceling the stamps or meter	1742
impressions.	1743

The tax commissioner, by rule certified to the treasurer of	1744
state, shall authorize the delivery of stamps and meter	1745
impressions to wholesale and retail dealers in this state and to	1746
wholesale dealers outside this state on credit when the purchaser	1747
files with the commissioner a bond to the state, or an irrevocable	1748
letter of credit naming the state as beneficiary, in the amount	1749
and in the form prescribed by the commissioner, and with surety to	1750
the satisfaction of the treasurer of state, conditioned on payment	1751
to the treasurer of state within thirty days for stamps or meter	1752
impressions delivered within that time. The tax commissioner shall	1753
limit delivery of stamps and meter impressions on credit to the	1754
period running from the first day of July of the fiscal year until	1755
the first day of the following May. Any discount allowed as a	1756
commission for affixing and canceling stamps or meter impressions	1757
shall be allowed with respect to sales of stamps and meter	1758
impressions on credit.	1759

The treasurer of state shall redeem and pay for any	1760
destroyed, unused, or spoiled tax stamps and any unused meter	1761
impressions at their net value, and shall refund to wholesale	1762
dealers the net amount of state and county taxes paid erroneously	1763
or paid on cigarettes which have been sold in interstate or	1764
foreign commerce or which have become unsalable, and the net	1765
amount of county taxes that were paid on cigarettes that have been	1766
sold at retail or for retail sale outside a taxing county. An	1767
application for a refund of tax shall be filed with the tax	1768
commissioner, on the form prescribed by the commissioner for that	1769
purpose, within three years from the date the tax stamps are	1770
destroyed or spoiled, from the date of the erroneous payment, or	1771
from the date that cigarettes on which taxes have been paid have	1772
been sold in interstate or foreign commerce or have become	1773
unsalable. On the filing of the application the commissioner	1774
shall determine the amount of refund due payable from receipts of	1775
the state tax, and, if applicable, payable from receipts of a	1776
county tax and certify such amounts to the director of budget and	1777
management and treasurer of state for payment from the tax refund	1778
fund created by section 5703.052 of the Revised Code. When a	1779
refund is granted for payment of an illegal or erroneous	1780
assessment issued by the department, the refund shall include	1781
interest on the amount of the refund from the date of the	1782
overpayment. The interest shall be computed at the rate per annum	1783
prescribed by section 5703.47 of the Revised Code.	1784

Sec. 5743.08.  Whenever the tax commissioner discovers any	1785
cigarettes, subject to the taxes levied under section 5743.02,	1786
5743.023, 5743.024, or 5743.026 of the Revised Code, and upon	1787
which the taxes have not been paid, the commissioner may seize and	1788
take possession of such cigarettes, which shall thereupon be	1789
forfeited to the state, and the commissioner may within a	1790
reasonable time thereafter sell the forfeited cigarettes. From	1791
the proceeds of the sale, the tax commissioner shall pay the costs	1792
incurred in such proceedings, and any proceeds remaining after the	1793
costs are paid shall be considered as revenue arising from the	1794
tax; provided that the seizure and sale shall not be deemed to	1795
relieve any person from the fine or imprisonment provided for	1796
violation of sections 5743.01 to 5743.20 of the Revised Code. The	1797
sale shall be made where it is most convenient and economical. The	1798
tax commissioner may order the destruction of the forfeited	1799
cigarettes if the quantity or quality of the cigarettes is not	1800
sufficient to warrant their sale.	1801

Sec. 5743.081.  (A) If any wholesale dealer or retail dealer	1802
fails to pay the tax levied under sectionssection 5743.02,	1803
5743.023, 5743.024, or 5743.026 of the Revised Code as required by	1804
sections 5743.01 to 5743.20 of the Revised Code, and by the rules	1805
of the tax commissioner, or fails to collect the tax from the	1806
purchaser or consumer, the commissioner may make an assessment	1807
against the wholesale or retail dealer based upon any information	1808
in the commissioner's possession.	1809

The commissioner may make an assessment against any wholesale	1810
or retail dealer who fails to file a return required by section	1811
5743.03 or 5743.025 of the Revised Code.	1812

No assessment shall be made against any wholesale or retail	1813
dealer for any taxes imposed under sectionssection 5743.02,	1814
5743.023, 5743.024, or 5743.026 of the Revised Code more than	1815
three years after the last day of the calendar month which	1816
immediately follows the semiannual period prescribed in section	1817
5743.03 of the Revised Code in which the sale was made, or more	1818
than three years after the semiannual return for such period is	1819
filed, whichever is later. This section does not bar an	1820
assessment against any wholesale or retail dealer who fails to	1821
file a return as required by section 5743.03 or 5743.025 of the	1822
Revised Code, or who files a fraudulent return.	1823

A penalty of up to thirty per cent may be added to the amount	1824
of every assessment made under this section. The commissioner may	1825
adopt rules providing for the imposition and remission of	1826
penalties added to assessments made under this section.	1827

The commissioner shall give the party assessed written notice	1828
of the assessment as provided in section 5703.37 of the Revised	1829
Code. The notice shall specify separately any portion of the	1830
assessment that represents a county tax.	1831

(B) Unless the party to whom the notice of assessment is	1832
directed files with the commissioner within sixty days after	1833
service of the notice of assessment, either personally or by	1834
certified mail, a petition for reassessment in writing, signed by	1835
the party assessed, or by the party's authorized agent having	1836
knowledge of the facts, the assessment shall become final and the	1837
amount of the assessment shall be due and payable from the party	1838
assessed to the treasurer of state. The petition shall indicate	1839
the objections of the party assessed, but additional objections	1840
may be raised in writing if received prior to the date shown on	1841
the final determination by the commissioner.	1842

Unless the petitioner waives a hearing, the commissioner	1843
shall assign a time and place for the hearing on the petition and	1844
notify the petitioner of the time and place of the hearing by	1845
personal service or certified mail, but the commissioner may	1846
continue the hearing from time to time if necessary.	1847

The commissioner may make such correction to an assessment as	1848
the commissioner finds proper. The commissioner shall serve a	1849
copy of the final determination on the petitioner by personal	1850
service or certified mail, and the commissioner's decision in the	1851
matter shall be final, subject to appeal as provided in section	1852
5717.02 of the Revised Code. Only objections decided on the	1853
merits by the board of tax appeals or a court shall be given	1854
collateral estoppel or res judicata effect in considering an	1855
application for refund of amounts paid pursuant to the assessment.	1856

(C) After an assessment becomes final, if any portion of the	1857
assessment remains unpaid, including accrued interest, a certified	1858
copy of the commissioner's entry making the assessment final may	1859
be filed in the office of the clerk of the court of common pleas	1860
in the county in which the wholesale or retail dealer's place of	1861
business is located or the county in which the party assessed	1862
resides. If the party assessed maintains no place of business in	1863
this state and is not a resident of this state, the certified copy	1864
of the entry may be filed in the office of the clerk of the court	1865
of common pleas of Franklin county.	1866

The clerk, immediately upon the filing of the commissioner's	1867
entry, shall enter a judgment for the state against the party	1868
assessed in the amount shown on the entry. The judgment may be	1869
filed by the clerk in a loose-leaf book entitled "special	1870
judgments for state cigarette sales tax," and shall have the same	1871
effect as other judgments. Execution shall issue upon the	1872
judgment upon the request of the tax commissioner, and all laws	1873
applicable to sales on execution shall apply to sales made under	1874
the judgment except as otherwise provided in sections 5743.01 to	1875
5743.20 of the Revised Code.	1876

The portion of the assessment not paid within sixty days	1877
after the assessment was issued shall bear interest at the rate	1878
per annum prescribed by section 5703.47 of the Revised Code from	1879
the day the tax commissioner issues the assessment until it is	1880
paid. Interest shall be paid in the same manner as the tax and	1881
may be collected by the issuance of an assessment under this	1882
section.	1883

(D) All money collected by the commissioner under this	1884
section shall be paid to the treasurer of state, and when paid	1885
shall be considered as revenue arising from the taxes imposed by	1886
sections 5743.01 to 5743.20 of the Revised Code.	1887

Sec. 5743.12.  No person shall make a false entry upon an	1888
invoice, package, or container of cigarettes upon which an entry	1889
is required by sections 5743.01 to 5743.20 of the Revised Code,	1890
nor shall any person present any such false entry for the	1891
inspection of the tax commissioner with intent to evade the tax	1892
levied under section 5743.02, 5743.023, 5743.024, or 5743.026 of	1893
the Revised Code.	1894

Sec. 5743.13.  No person shall falsely or fraudulently make,	1895
forge, alter, or counterfeit any stamp prescribed by the tax	1896
commissioner under section 5743.03 of the Revised Code, or cause	1897
to be falsely or fraudulently made, forged, altered, or	1898
counterfeited any such stamp, or possess any counterfeiting	1899
device, or knowingly and willfully utter, publish, pass, or tender	1900
as true, any such false, altered, forged, or counterfeited stamp,	1901
or use more than once any such stamp for the purpose of evading	1902
the tax levied under section 5743.02, 5743.023, 5743.024, or	1903
5743.026 of the Revised Code.	1904

Sec. 5743.14.  (A) The tax commissioner may inspect any	1905
place where cigarettes subject to the tax levied under section	1906
5743.02, 5743.023, 5743.024, or 5743.026 of the Revised Code are	1907
sold or stored.	1908

(B) No person shall prevent or hinder the tax commissioner	1909
from making a full inspection of any place where cigarettes	1910
subject to the tax levied under section 5743.02, 5743.023,	1911
5743.024, or 5743.026 of the Revised Code are sold or stored, or	1912
prevent or hinder the full inspection of invoices, books, records,	1913
or papers required to be kept by sections 5743.01 to 5743.20 of	1914
the Revised Code.	1915

Sec. 5743.32.  To provide revenue for the general revenue	1916
fund of the state, an excise tax is hereby levied on the use,	1917
consumption, or storage for consumption of cigarettes by consumers	1918
in this state at the rate of eleven and one-halfthirty-seven	1919
mills on each cigarette. The tax shall not apply if the tax	1920
levied by section 5743.02 of the Revised Code has been paid.	1921

The money received into the state treasury from the excise	1922
tax levied by this section shall be credited to the general	1923
revenue fund.	1924

Sec. 5743.33.  Every person who has acquired cigarettes for	1925
use, storage, or other consumption subject to the tax levied under	1926
section 5743.32, 5743.322, 5743.323, or 5743.324 of the Revised	1927
Code, shall, on or before the fifteenth day of the month following	1928
receipt of such cigarettes, file with the tax commissioner a	1929
return showing the amount of cigarettes acquired, together with	1930
remittance of the tax thereon. No such person shall transport	1931
within this state, cigarettes that have a wholesale value in	1932
excess of sixty dollars, unless hethat person has obtained	1933
consent to transport the cigarettes from the department of	1934
taxation prior to such transportation. Such consent shall not be	1935
required if the applicable taxes levied under sections 5743.02,	1936
5743.023, 5743.024, and 5743.026 of the Revised Code have been	1937
paid. Application for the consent shall be in the form prescribed	1938
by the tax commissioner.	1939

Every person transporting such cigarettes shall possess the	1940
consent while transporting or possessing the cigarettes within	1941
this state and shall produce the consent upon request of any law	1942
enforcement officer or authorized agent of the tax commissioner.	1943

Any person transporting such cigarettes without the consent	1944
required by this section, shall be subject to the provisions of	1945
this chapter, including the applicable taxes imposed by sections	1946
5743.02, 5743.023, 5743.024, and 5743.026 of the Revised Code.	1947

Sec. 5743.34.  If any person required to pay the tax levied	1948
under section 5743.32, 5743.322, 5743.323, or 5743.324 of the	1949
Revised Code, fails to make remittance, the tax commissioner may	1950
issue an assessment against that person based on any information	1951
in the commissioner's possession.	1952

Sections 5743.081 and 5743.082 of the Revised Code relating	1953
to the assessments or findings, appeals from assessments or	1954
findings, the effect of assessments or findings before or after	1955
hearing and before or after filing the same in the office of the	1956
clerk of the court of common pleas, and all sections relating to	1957
the procedure, authority, duties, liabilities, powers, and	1958
privileges of the person assessed, the commissioner, the clerk,	1959
and all other public officials, shall be applicable to assessments	1960
made pursuant to this section.	1961

Sec. 5743.35.  No person required by section 5743.33 of the	1962
Revised Code to file a return with the tax commissioner shall fail	1963
to make such return, or fail to pay the applicable taxes levied	1964
under section 5743.32, 5743.322, 5743.323, or 5743.324 of the	1965
Revised Code, or fail to pay any lawful assessment issued by the	1966
commissioner.	1967

Sec. 5747.01.  Except as otherwise expressly provided or	1968
clearly appearing from the context, any term used in this chapter	1969
has the same meaning as when used in a comparable context in the	1970
Internal Revenue Code, and all other statutes of the United States	1971
relating to federal income taxes.	1972

As used in this chapter:

1973

(A) "Adjusted gross income" or "Ohio adjusted gross income"	1974
means adjusted gross income as defined and used in the Internal	1975
Revenue Code, adjusted as provided in this section:	1976

(1) Add interest or dividends on obligations or securities	1977
of any state or of any political subdivision or authority of any	1978
state, other than this state and its subdivisions and authorities.	1979

(2) Add interest or dividends on obligations of any	1980
authority, commission, instrumentality, territory, or possession	1981
of the United States that are exempt from federal income taxes but	1982
not from state income taxes.	1983

(3) Deduct interest or dividends on obligations of the	1984
United States and its territories and possessions or of any	1985
authority, commission, or instrumentality of the United States to	1986
the extent included in federal adjusted gross income but exempt	1987
from state income taxes under the laws of the United States.	1988

(4) Deduct disability and survivor's benefits to the extent	1989
included in federal adjusted gross income.	1990

(5) Deduct benefits under Title II of the Social Security	1991
Act and tier 1 railroad retirement benefits to the extent included	1992
in federal adjusted gross income under section 86 of the Internal	1993
Revenue Code.	1994

(6) Add, inIn the case of a taxpayer who is a beneficiary of	1995
a trust that makes an accumulation distribution as defined in	1996
section 665 of the Internal Revenue Code, add, for the	1997
beneficiary's taxable years beginning before 2002, the portion, if	1998
any, of such distribution that does not exceed the undistributed	1999
net income of the trust for the three taxable years preceding the	2000
taxable year in which the distribution is made. "Undistributed net	2001
income of a trust" means the taxable income of the trust increased	2002
by (a)(i) the additions to adjusted gross income required under	2003
division (A) of this section and (ii) the personal exemptions	2004
allowed to the trust pursuant to section 642(b) of the Internal	2005
Revenue Code, and decreased by (b)(i) the deductions to adjusted	2006
gross income required under division (A) of this section, (ii) the	2007
amount of federal income taxes attributable to such income, and	2008
(iii) the amount of taxable income that has been included in the	2009
adjusted gross income of a beneficiary by reason of a prior	2010
accumulation distribution. Any undistributed net income included	2011
in the adjusted gross income of a beneficiary shall reduce the	2012
undistributed net income of the trust commencing with the earliest	2013
years of the accumulation period.	2014

(7) Deduct the amount of wages and salaries, if any, not	2015
otherwise allowable as a deduction but that would have been	2016
allowable as a deduction in computing federal adjusted gross	2017
income for the taxable year, had the targeted jobs credit allowed	2018
and determined under sections 38, 51, and 52 of the Internal	2019
Revenue Code not been in effect.	2020

(8) Deduct any interest or interest equivalent on public	2021
obligations and purchase obligations to the extent included in	2022
federal adjusted gross income.	2023

(9) Add any loss or deduct any gain resulting from the sale,	2024
exchange, or other disposition of public obligations to the extent	2025
included in federal adjusted gross income.	2026

(10) Deduct or add amounts, as provided under section	2027
5747.70 of the Revised Code, related to contributions to variable	2028
college savings program accounts made or tuition credits purchased	2029
pursuant to Chapter 3334. of the Revised Code.	2030

(11)(a) Deduct, to the extent not otherwise allowable as a	2031
deduction or exclusion in computing federal or Ohio adjusted gross	2032
income for the taxable year, the amount the taxpayer paid during	2033
the taxable year for medical care insurance and qualified	2034
long-term care insurance for the taxpayer, the taxpayer's spouse,	2035
and dependents. No deduction for medical care insurance under	2036
division (A)(11) of this section shall be allowed either to any	2037
taxpayer who is eligible to participate in any subsidized health	2038
plan maintained by any employer of the taxpayer or of the	2039
taxpayer's spouse, or to any taxpayer who is entitled to, or on	2040
application would be entitled to, benefits under part A of Title	2041
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	2042
301, as amended. For the purposes of division (A)(11)(a) of this	2043
section, "subsidized health plan" means a health plan for which	2044
the employer pays any portion of the plan's cost. The deduction	2045
allowed under division (A)(11)(a) of this section shall be the net	2046
of any related premium refunds, related premium reimbursements, or	2047
related insurance premium dividends received during the taxable	2048
year.	2049

(b) Deduct, to the extent not otherwise deducted or excluded	2050
in computing federal or Ohio adjusted gross income during the	2051
taxable year, the amount the taxpayer paid during the taxable	2052
year, not compensated for by any insurance or otherwise, for	2053
medical care of the taxpayer, the taxpayer's spouse, and	2054
dependents, to the extent the expenses exceed seven and one-half	2055
per cent of the taxpayer's federal adjusted gross income.	2056

(c) For purposes of division (A)(11) of this section,	2057
"medical care" has the meaning given in section 213 of the	2058
Internal Revenue Code, subject to the special rules, limitations,	2059
and exclusions set forth therein, and "qualified long-term care"	2060
has the same meaning given in section 7702(B)(b) of the Internal	2061
Revenue Code.	2062

(12)(a) Deduct any amount included in federal adjusted gross	2063
income solely because the amount represents a reimbursement or	2064
refund of expenses that in any year the taxpayer had deducted as	2065
an itemized deduction pursuant to section 63 of the Internal	2066
Revenue Code and applicable United States department of the	2067
treasury regulations. The deduction otherwise allowed under	2068
division (A)(12)(a) of this section shall be reduced to the extent	2069
the reimbursement is attributable to an amount the taxpayer	2070
deducted under this section in any taxable year.	2071

(b) Add any amount not otherwise included in Ohio adjusted	2072
gross income for any taxable year to the extent that the amount is	2073
attributable to the recovery during the taxable year of any amount	2074
deducted or excluded in computing federal or Ohio adjusted gross	2075
income in any taxable year.	2076

(13) Deduct any portion of the deduction described in	2077
section 1341(a)(2) of the Internal Revenue Code, for repaying	2078
previously reported income received under a claim of right, that	2079
meets both of the following requirements:	2080

(a) It is allowable for repayment of an item that was	2081
included in the taxpayer's adjusted gross income for a prior	2082
taxable year and did not qualify for a credit under division (A)	2083
or (B) of section 5747.05 of the Revised Code for that year;	2084

(b) It does not otherwise reduce the taxpayer's adjusted	2085
gross income for the current or any other taxable year.	2086

(14) Deduct an amount equal to the deposits made to, and net	2087
investment earnings of, a medical savings account during the	2088
taxable year, in accordance with section 3924.66 of the Revised	2089
Code. The deduction allowed by division (A)(14) of this section	2090
does not apply to medical savings account deposits and earnings	2091
otherwise deducted or excluded for the current or any other	2092
taxable year from the taxpayer's federal adjusted gross income.	2093

(15)(a) Add an amount equal to the funds withdrawn from a	2094
medical savings account during the taxable year, and the net	2095
investment earnings on those funds, when the funds withdrawn were	2096
used for any purpose other than to reimburse an account holder	2097
for, or to pay, eligible medical expenses, in accordance with	2098
section 3924.66 of the Revised Code;	2099

(b) Add the amounts distributed from a medical savings	2100
account under division (A)(2) of section 3924.68 of the Revised	2101
Code during the taxable year.	2102

(16) Add any amount claimed as a credit under section	2103
5747.059 of the Revised Code to the extent that such amount	2104
satisfies either of the following:	2105

(a) The amount was deducted or excluded from the computation	2106
of the taxpayer's federal adjusted gross income as required to be	2107
reported for the taxpayer's taxable year under the Internal	2108
Revenue Code;	2109

(b) The amount resulted in a reduction of the taxpayer's	2110
federal adjusted gross income as required to be reported for any	2111
of the taxpayer's taxable years under the Internal Revenue Code.	2112

(17) Deduct the amount contributed by the taxpayer to an	2113
individual development account program established by a county	2114
department of job and family services pursuant to sections 329.11	2115
to 329.14 of the Revised Code for the purpose of matching funds	2116
deposited by program participants. On request of the tax	2117
commissioner, the taxpayer shall provide any information that, in	2118
the tax commissioner's opinion, is necessary to establish the	2119
amount deducted under division (A)(17) of this section.	2120

(18) Beginning in taxable year 2001, if the taxpayer is	2121
married and files a joint return and the combined federal adjusted	2122
gross income of the taxpayer and the taxpayer's spouse for the	2123
taxable year does not exceed one hundred thousand dollars, or if	2124
the taxpayer is single and has a federal adjusted gross income for	2125
the taxable year not exceeding fifty thousand dollars, deduct	2126
amounts paid during the taxable year for qualified tuition and	2127
fees paid to an eligible institution for the taxpayer, the	2128
taxpayer's spouse, or any dependent of the taxpayer, who is a	2129
resident of this state and is enrolled in or attending a program	2130
that culminates in a degree or diploma at an eligible institution.	2131
The deduction may be claimed only to the extent that qualified	2132
tuition and fees are not otherwise deducted or excluded for any	2133
taxable year from federal or Ohio adjusted gross income. The	2134
deduction may not be claimed for educational expenses for which	2135
the taxpayer claims a credit under section 5747.27 of the Revised	2136
Code.	2137

(19) Add any reimbursement received during the taxable year	2138
of any amount the taxpayer deducted under division (A)(18) of this	2139
section in any previous taxable year to the extent the amount is	2140
not otherwise included in Ohio adjusted gross income.	2141

(20)(a) Add five-sixths of the amount of depreciation	2142
expense allowed by subsection (k) of section 168 of the Internal	2143
Revenue Code, including the taxpayer's proportionate or	2144
distributive share of the amount of depreciation expense allowed	2145
by that subsection to a pass-through entity in which the taxpayer	2146
has a direct or indirect ownership interest. The tax	2147
commissioner, under procedures established by the commissioner,	2148
may waive the add-back related to a pass-through entity if the	2149
taxpayer owns, directly or indirectly, less than five per cent of	2150
the pass-through entity.	2151

(b) Nothing in division (A)(20) of this section shall be	2152
construed to adjust or modify the adjusted basis of any asset.	2153

(c) To the extent the add-back required under division	2154
(A)(20)(a) of this section is attributable to property generating	2155
nonbusiness income or loss allocated under section 5747.20 of the	2156
Revised Code, the add-back shall be sitused to the same location	2157
as the nonbusiness income or loss generated by the property for	2158
the purpose of determining the credit under division (A) of	2159
section 5747.05 of the Revised Code. Otherwise, the add-back	2160
shall be apportioned, subject to one or more of the four	2161
alternative methods of apportionment enumerated in section 5747.21	2162
of the Revised Code.	2163

(21)(a) If the taxpayer was required to add an amount under	2164
division (A)(20)(a) of this section for a taxable year, deduct	2165
one-fifth of the amount so added for each of the five succeeding	2166
taxable years.	2167

(b) If the amount deducted under division (A)(21)(a) of	2168
this section is attributable to an add-back allocated under	2169
division (A)(20)(c) of this section, the amount deducted shall be	2170
sitused to the same location. Otherwise, the add-back shall be	2171
apportioned using the apportionment factors for the taxable year	2172
in which the deduction is taken, subject to one or more of the	2173
four alternative methods of apportionment enumerated in section	2174
5747.21 of the Revised Code.	2175

(B) "Business income" means income arising from	2176
transactions, activities, and sources in the regular course of a	2177
trade or business and includes income from tangible and intangible	2178
property if the acquisition, rental, management, and disposition	2179
of the property constitute integral parts of the regular course of	2180
a trade or business operation.	2181

(C) "Nonbusiness income" means all income other than	2182
business income and may include, but is not limited to,	2183
compensation, rents and royalties from real or tangible personal	2184
property, capital gains, interest, dividends and distributions,	2185
patent or copyright royalties, or lottery winnings, prizes, and	2186
awards.	2187

(D) "Compensation" means any form of remuneration paid to an	2188
employee for personal services.	2189

(E) "Fiduciary" means a guardian, trustee, executor,	2190
administrator, receiver, conservator, or any other person acting	2191
in any fiduciary capacity for any individual, trust, or estate.	2192

(F) "Fiscal year" means an accounting period of twelve	2193
months ending on the last day of any month other than December.	2194

(G) "Individual" means any natural person.

2195

(H) "Internal Revenue Code" means the "Internal Revenue Code	2196
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	2197

(I) "Resident" means:

2198

(1) An individual who is domiciled in this state, subject to	2199
section 5747.24 of the Revised Code;	2200

(2) The estate of a decedent who at the time of death was	2201
domiciled in this state. The domicile tests of section 5747.24 of	2202
the Revised Code and any election under section 5747.25 of the	2203
Revised Code are not controlling for purposes of division (I)(2)	2204
of this section.	2205

(3) A trust that, in whole or part, resides in this state.	2206
If only part of a trust resides in this state, the trust is a	2207
resident only with respect to that part. For the purposes of	2208
division (I)(3) of this section, a trust resides in this state to	2209
the extent that it consists of the net current value, adjusted for	2210
any profits, gains, or losses, of assets or liabilities that were	2211
transferred to the trust by any of the following:	2212

(a) The will of a decedent who was domiciled in this state	2213
at the time of the decedent's death;	2214

(b) A person who is domiciled in this state if the trust or	2215
part of the trust is not irrevocable;	2216

(c) A person who was domiciled in this state when the trust	2217
or part of the trust became irrevocable, but only if, for all or	2218
some portion of the current taxable year of the trust, at least	2219
one beneficiary of the trust is a resident for the purposes of	2220
this chapter.	2221

For the purpose of divisions (I)(3)(b) and (c) of this	2222
section, the transfer of net assets to a trust is irrevocable to	2223
the extent that the transferor is not considered to be the owner	2224
of the net assets under sections 671 to 678 of the Internal	2225
Revenue Code.	2226

The tax commissioner may adopt rules to ascertain the part	2227
of a trust residing in this state under this division.	2228

(J) "Nonresident" means an individual or estate that is not	2229
a resident. An individual who is a resident for only part of a	2230
taxable year is a nonresident for the remainder of that taxable	2231
year.	2232

(K) "Pass-through entity" has the same meaning as in section	2233
5733.04 of the Revised Code.	2234

(L) "Return" means the notifications and reports required to	2235
be filed pursuant to this chapter for the purpose of reporting the	2236
tax due and includes declarations of estimated tax when so	2237
required.	2238

(M) "Taxable year" means the calendar year or the taxpayer's	2239
fiscal year ending during the calendar year, or fractional part	2240
thereof, upon which the adjusted gross income is calculated	2241
pursuant to this chapter.	2242

(N) "Taxpayer" means any person subject to the tax imposed	2243
by section 5747.02 of the Revised Code or any pass-through entity	2244
that makes the election under division (D) of section 5747.08 of	2245
the Revised Code.	2246

(O) "Dependents" means dependents as defined in the Internal	2247
Revenue Code and as claimed in the taxpayer's federal income tax	2248
return for the taxable year or which the taxpayer would have been	2249
permitted to claim had the taxpayer filed a federal income tax	2250
return.	2251

(P) "Principal county of employment" means, in the case of a	2252
nonresident, the county within the state in which a taxpayer	2253
performs services for an employer or, if those services are	2254
performed in more than one county, the county in which the major	2255
portion of the services are performed.	2256

(Q) As used in sections 5747.50 to 5747.55 of the Revised	2257
Code:	2258

(1) "Subdivision" means any county, municipal corporation,	2259
park district, or township.	2260

(2) "Essential local government purposes" includes all	2261
functions that any subdivision is required by general law to	2262
exercise, including like functions that are exercised under a	2263
charter adopted pursuant to the Ohio Constitution.	2264

(R) "Overpayment" means any amount already paid that exceeds	2265
the figure determined to be the correct amount of the tax.	2266

(S) "Taxable income" applies only to estates onlyand	2267
trusts, and means taxable income as defined and used in the	2268
Internal Revenue Code adjusted as follows:	2269

(1) Add interest or dividends on obligations or securities	2270
of any state or of any political subdivision or authority of any	2271
state, other than this state and its subdivisions and authorities;	2272

(2) Add interest or dividends on obligations of any	2273
authority, commission, instrumentality, territory, or possession	2274
of the United States that are exempt from federal income taxes but	2275
not from state income taxes;	2276

(3) Add the amount of personal exemption allowed to the	2277
estate pursuant to section 642(b) of the Internal Revenue Code;	2278

(4) Deduct interest or dividends on obligations of the	2279
United States and its territories and possessions or of any	2280
authority, commission, or instrumentality of the United States	2281
that are exempt from state taxes under the laws of the United	2282
States;	2283

(5) Deduct the amount of wages and salaries, if any, not	2284
otherwise allowable as a deduction but that would have been	2285
allowable as a deduction in computing federal taxable income for	2286
the taxable year, had the targeted jobs credit allowed under	2287
sections 38, 51, and 52 of the Internal Revenue Code not been in	2288
effect;	2289

(6) Deduct any interest or interest equivalent on public	2290
obligations and purchase obligations to the extent included in	2291
federal taxable income;	2292

(7) Add any loss or deduct any gain resulting from sale,	2293
exchange, or other disposition of public obligations to the extent	2294
included in federal taxable income;	2295

(8) Except in the case of the final return of an estate, add	2296
any amount deducted by the taxpayer on both its Ohio estate tax	2297
return pursuant to section 5731.14 of the Revised Code, and on its	2298
federal income tax return in determining either federal adjusted	2299
gross income or federal taxable income;	2300

(9)(a) Deduct any amount included in federal taxable income	2301
solely because the amount represents a reimbursement or refund of	2302
expenses that in a previous year the decedent had deducted as an	2303
itemized deduction pursuant to section 63 of the Internal Revenue	2304
Code and applicable treasury regulations. The deduction otherwise	2305
allowed under division (S)(9)(a) of this section shall be reduced	2306
to the extent the reimbursement is attributable to an amount the	2307
taxpayer or decedent deducted under this section in any taxable	2308
year.	2309

(b) Add any amount not otherwise included in Ohio taxable	2310
income for any taxable year to the extent that the amount is	2311
attributable to the recovery during the taxable year of any amount	2312
deducted or excluded in computing federal or Ohio taxable income	2313
in any taxable year.	2314

(10) Deduct any portion of the deduction described in	2315
section 1341(a)(2) of the Internal Revenue Code, for repaying	2316
previously reported income received under a claim of right, that	2317
meets both of the following requirements:	2318

(a) It is allowable for repayment of an item that was	2319
included in the taxpayer's taxable income or the decedent's	2320
adjusted gross income for a prior taxable year and did not qualify	2321
for a credit under division (A) or (B) of section 5747.05 of the	2322
Revised Code for that year.	2323

(b) It does not otherwise reduce the taxpayer's taxable	2324
income or the decedent's adjusted gross income for the current or	2325
any other taxable year.	2326

(11) Add any amount claimed as a credit under section	2327
5747.059 of the Revised Code to the extent that the amount	2328
satisfies either of the following:	2329

(a) The amount was deducted or excluded from the computation	2330
of the taxpayer's federal taxable income as required to be	2331
reported for the taxpayer's taxable year under the Internal	2332
Revenue Code;	2333

(b) The amount resulted in a reduction in the taxpayer's	2334
federal taxable income as required to be reported for any of the	2335
taxpayer's taxable years under the Internal Revenue Code.	2336

(12) Deduct any amount that a trust is required to report as	2337
farm income on its federal income tax return, but only if the	2338
assets of the trust include at least ten acres of land satisfying	2339
the definition of "land devoted exclusively to agricultural use"	2340
under section 5713.30 of the Revised Code, regardless of whether	2341
the land is valued for tax purposes as such land under sections	2342
5713.30 to 5713.38 of the Revised Code.	2343

(T) "School district income" and "school district income	2344
tax" have the same meanings as in section 5748.01 of the Revised	2345
Code.	2346

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	2347
of this section, "public obligations," "purchase obligations," and	2348
"interest or interest equivalent" have the same meanings as in	2349
section 5709.76 of the Revised Code.	2350

(V) "Limited liability company" means any limited liability	2351
company formed under Chapter 1705. of the Revised Code or under	2352
the laws of any other state.	2353

(W) "Pass-through entity investor" means any person who,	2354
during any portion of a taxable year of a pass-through entity, is	2355
a partner, member, shareholder, or investor in that pass-through	2356
entity.	2357

(X) "Banking day" has the same meaning as in section 1304.01	2358
of the Revised Code.	2359

(Y) "Month" means a calendar month.

2360

(Z) "Quarter" means the first three months, the second three	2361
months, the third three months, or the last three months of the	2362
taxpayer's taxable year.	2363

(AA)(1) "Eligible institution" means a state university or	2364
state institution of higher education as defined in section	2365
3345.011 of the Revised Code, or a private, nonprofit college,	2366
university, or other post-secondary institution located in this	2367
state that possesses a certificate of authorization issued by the	2368
Ohio board of regents pursuant to Chapter 1713. of the Revised	2369
Code or a certificate of registration issued by the state board of	2370
proprietary school registration under Chapter 3332. of the Revised	2371
Code.	2372

(2) "Qualified tuition and fees" means tuition and fees	2373
imposed by an eligible institution as a condition of enrollment or	2374
attendance, not exceeding two thousand five hundred dollars in	2375
each of the individual's first two years of post-secondary	2376
education. If the individual is a part-time student, "qualified	2377
tuition and fees" includes tuition and fees paid for the academic	2378
equivalent of the first two years of post-secondary education	2379
during a maximum of five taxable years, not exceeding a total of	2380
five thousand dollars. "Qualified tuition and fees" does not	2381
include:	2382

(a) Expenses for any course or activity involving sports,	2383
games, or hobbies unless the course or activity is part of the	2384
individual's degree or diploma program;	2385

(b) The cost of books, room and board, student activity	2386
fees, athletic fees, insurance expenses, or other expenses	2387
unrelated to the individual's academic course of instruction;	2388

(c) Tuition, fees, or other expenses paid or reimbursed	2389
through an employer, scholarship, grant in aid, or other	2390
educational benefit program.	2391

(BB) Any term used in this chapter that is not otherwise	2392
defined in this section and that is not used in a comparable	2393
context in the Internal Revenue Code and other statutes of the	2394
United States relating to federal income taxes has the same	2395
meaning as in section 5733.40 of the Revised Code.	2396

Sec. 5747.02.  (A) For the purpose of providing revenue for	2397
the support of schools and local government functions, to provide	2398
relief to property taxpayers, to provide revenue for the general	2399
revenue fund, and to meet the expenses of administering the tax	2400
levied by this chapter, there is hereby levied on every	2401
individual, trust, and every estate residing in or earning or	2402
receiving income in this state, on every individual, trust, and	2403
estate earning or receiving lottery winnings, prizes, or awards	2404
pursuant to Chapter 3770. of the Revised Code, and on every	2405
individual, trust, and estate otherwise having nexus with or in	2406
this state under the Constitution of the United States, an annual	2407
tax measured in the case of individuals by adjusted gross income	2408
less an exemption for the taxpayer, the taxpayer's spouse, and	2409
each dependent as provided in section 5747.025 of the Revised	2410
Code,; measured in the case of trusts by the sum of the taxable	2411
income allocated or apportioned to this state under division	2412
(D)(1) of this section; and measured in the case of estates by	2413
taxable income. The tax imposed by this section on the balance	2414
thus obtained is hereby levied as follows:	2415

(B) If the director of budget and management makes a	2431
certification to the tax commissioner under division (B) of	2432
section 131.44 of the Revised Code, the amount of tax as	2433
determined under division (A) of this section shall be reduced by	2434
the percentage prescribed in that certification for taxable years	2435
beginning in the calendar year in which that certification is	2436
made.	2437

(C) The levy of this tax on income does not prevent a	2438
municipal corporation, a joint economic development zone created	2439
under section 715.691, or a joint economic development district	2440
created under section 715.70 or 715.71 or sections 715.72 to	2441
715.81 of the Revised Code from levying a tax on income.	2442

(D) For the purpose of determining the tax imposed against a	2443
trust under this section:	2444

(1)(a) Except as provided in division (D)(1)(b) of this	2445
section, the taxable income of the trust shall be allocated and	2446
apportioned to this state in the same manner as the net income of	2447
a corporation is allocated and apportioned to this state under	2448
sections 5733.05 and 5733.051 of the Revised Code.	2449

(b) Notwithstanding divisions (E) and (F) of section	2450
5733.051 of the Revised Code, capital gains and losses from the	2451
sale or other disposition of intangible property that may produce	2452
income enumerated in division (F) of that section and dividends	2453
and distributions from a domestic international sales corporation,	2454
or from a payor the location of whose physical assets is	2455
unavailable to the trust, are allocable to this state to the	2456
extent the capital gains and losses or dividends and distributions	2457
are attributable to assets held by a trust or portion of a trust	2458
that is a resident for the purposes of this chapter.	2459

(c) Notwithstanding division (D)(1)(a) of this section,	2460
income from intangible assets not described in division (D)(1)(b)	2461
of this section and capital gains and losses from the sale or	2462
disposition of intangible assets not described in division	2463
(D)(1)(b) of this section are allocable to this state to the	2464
extent those assets are held by a trust or portion of a trust that	2465
is a resident for the purposes of this chapter.	2466

(2) The tax shall be the sum of the taxable income	2467
allocated and apportioned to this state under division (D)(1) of	2468
this section multiplied by the rates prescribed by division (A) of	2469
this section.	2470

(3) Only credits enumerated in divisions (A)(14) to (33) of	2471
section 5747.98 of the Revised Code are applicable against the	2472
tax.	2473

(E) For the purposes of this section, "trust" means any	2474
trust described in Subchapter J of the Internal Revenue Code,	2475
excluding a trust exempted from taxation under section 501(c)(3)	2476
of Internal Revenue Code.	2477

Sec. 5747.05.  As used in this section, "income tax" includes	2478
both a tax on net income and a tax measured by net income.	2479

The following credits shall be allowed against the income tax	2480
imposed by section 5747.02 of the Revised Code on individuals and	2481
estates:	2482

(A)(1) The amount of tax otherwise due under section 5747.02	2483
of the Revised Code on such portion of the adjusted gross income	2484
of any nonresident taxpayer that is not allocable to this state	2485
pursuant to sections 5747.20 to 5747.23 of the Revised Code;	2486

(2) The credit provided under this division shall not exceed	2487
the portion of the total tax due under section 5747.02 of the	2488
Revised Code that the amount of the nonresident taxpayer's	2489
adjusted gross income not allocated to this state pursuant to	2490
sections 5747.20 to 5747.23 of the Revised Code bears to the total	2491
adjusted gross income of the nonresident taxpayer derived from all	2492
sources everywhere.	2493

(3) The tax commissioner may enter into an agreement with	2494
the taxing authorities of any state or of the District of Columbia	2495
that imposes an income tax to provide that compensation paid in	2496
this state to a nonresident taxpayer shall not be subject to the	2497
tax levied in section 5747.02 of the Revised Code so long as	2498
compensation paid in such other state or in the District of	2499
Columbia to a resident taxpayer shall likewise not be subject to	2500
the income tax of such other state or of the District of Columbia.	2501

(B) The lesser of division (B)(1) or (2) of this section:

2502

(1) The amount of tax otherwise due under section 5747.02 of	2503
the Revised Code on such portion of the adjusted gross income of a	2504
resident taxpayer that in another state or in the District of	2505
Columbia is subjected to an income tax. The credit provided under	2506
division (B)(1) of this section shall not exceed the portion of	2507
the total tax due under section 5747.02 of the Revised Code that	2508
the amount of the resident taxpayer's adjusted gross income	2509
subjected to an income tax in the other state or in the District	2510
of Columbia bears to the total adjusted gross income of the	2511
resident taxpayer derived from all sources everywhere.	2512

(2) The amount of income tax liability to another state or	2513
the District of Columbia on the portion of the adjusted gross	2514
income of a resident taxpayer that in another state or in the	2515
District of Columbia is subjected to an income tax. The credit	2516
provided under division (B)(2) of this section shall not exceed	2517
the amount of tax otherwise due under section 5747.02 of the	2518
Revised Code.	2519

(3) If the credit provided under division (B) of this	2520
section is affected by a change in either the portion of adjusted	2521
gross income of a resident taxpayer subjected to an income tax in	2522
another state or the District of Columbia or the amount of income	2523
tax liability that has been paid to another state or the District	2524
of Columbia, the taxpayer shall report the change to the tax	2525
commissioner within sixty days of the change in such form as the	2526
commissioner requires.	2527

(a) In the case of an underpayment, the report shall be	2528
accompanied by payment of any additional tax due as a result of	2529
the reduction in credit together with interest on the additional	2530
tax and is a return subject to assessment under section 5747.13 of	2531
the Revised Code solely for the purpose of assessing any	2532
additional tax due under this division, together with any	2533
applicable penalty and interest. It shall not reopen the	2534
computation of the taxpayer's tax liability under this chapter	2535
from a previously filed return no longer subject to assessment	2536
except to the extent that such liability is affected by an	2537
adjustment to the credit allowed by division (B) of this section.	2538

(b) In the case of an overpayment, an application for refund	2539
may be filed under this division within the sixty day period	2540
prescribed for filing the report even if it is beyond the period	2541
prescribed in section 5747.11 of the Revised Code if it otherwise	2542
conforms to the requirements of such section. An application	2543
filed under this division shall only claim refund of overpayments	2544
resulting from an adjustment to the credit allowed by division (B)	2545
of this section unless it is also filed within the time prescribed	2546
in section 5747.11 of the Revised Code. It shall not reopen the	2547
computation of the taxpayer's tax liability except to the extent	2548
that such liability is affected by an adjustment to the credit	2549
allowed by division (B) of this section.	2550

(C) For a taxpayer sixty-five years of age or older during	2551
the taxable year, a credit for such year equal to fifty dollars	2552
for each return required to be filed under section 5747.08 of the	2553
Revised Code.	2554

(D) A taxpayer sixty-five years of age or older during the	2555
taxable year who has received a lump-sum distribution from a	2556
pension, retirement, or profit-sharing plan in the taxable year	2557
may elect to receive a credit under this division in lieu of the	2558
credit to which hethe taxpayer is entitled under division (C) of	2559
this section. A taxpayer making such election shall receive a	2560
credit for the taxable year equal to fifty dollars times the	2561
taxpayer's expected remaining life as shown by annuity tables	2562
issued under the provisions of the Internal Revenue Code and in	2563
effect for the calendar year which includes the last day of the	2564
taxable year. A taxpayer making an election under this division	2565
is not entitled to the credit authorized under division (C) of	2566
this section in subsequent taxable years except that if such	2567
election was made prior to July 1, 1983, the taxpayer is entitled	2568
to one-half the credit authorized under such division in	2569
subsequent taxable years but may not make another election under	2570
this division.	2571

(E) A taxpayer who is not sixty-five years of age or older	2572
during the taxable year who has received a lump-sum distribution	2573
from a pension, retirement, or profit-sharing plan in a taxable	2574
year ending on or before July 31, 1991, may elect to take a credit	2575
against the tax otherwise due under this chapter for such year	2576
equal to fifty dollars times the expected remaining life of a	2577
taxpayer sixty-five years of age as shown by annuity tables issued	2578
under the provisions of the Internal Revenue Code and in effect	2579
for the calendar year which includes the last day of the taxable	2580
year. A taxpayer making an election under this division is not	2581
entitled to a credit under division (C) or (D) of this section in	2582
any subsequent year except that if such election was made prior to	2583
July 1, 1983, the taxpayer is entitled to one-half the credit	2584
authorized under division (C) of this section in subsequent years	2585
but may not make another election under this division. No	2586
taxpayer may make an election under this division for a taxable	2587
year ending on or after August 1, 1991.	2588

(F) A taxpayer making an election under either division (D)	2589
or (E) of this section may make only one such election in the	2590
taxpayer's lifetime.	2591

(G)(1) On a joint return filed by a husband and wife, each	2592
of whom had adjusted gross income of at least five hundred	2593
dollars, exclusive of interest, dividends and distributions,	2594
royalties, rent, and capital gains, a credit equal to the	2595
percentage shown in the table contained in this division of the	2596
amount of tax due after allowing for any other credit that	2597
precedes the credit under this division in the order required	2598
under section 5747.98 of the Revised Code.	2599

(2) The credit to which a taxpayer is entitled under this	2600
division in any taxable year is the percentage shown in column B	2601
that corresponds with the taxpayer's adjusted gross income, less	2602
exemptions for the taxable year:	2603

(3) The credit allowed under this division shall not exceed	2610
six hundred fifty dollars in any taxable year.	2611

(H) No claim for credit under this section shall be allowed	2612
unless the claimant furnishes such supporting information as the	2613
tax commissioner prescribes by rules. Each credit under this	2614
section shall be claimed in the order required under section	2615
5747.98 of the Revised Code.	2616

(I) An individual who is a resident for part of a taxable	2617
year and a nonresident for the remainder of the taxable year is	2618
allowed the credits under divisions (A) and (B) of this section in	2619
accordance with rules prescribed by the tax commissioner. In no	2620
event shall the same income be subject to both credits.	2621

(J) The credit allowed under division (A) of this section	2622
shall be calculated based upon the amount of tax due under section	2623
5747.02 of the Revised Code after subtracting any other credits	2624
that precede the credit under that division in the order required	2625
under section 5747.98 of the Revised Code. The credit allowed	2626
under division (B) of this section shall be calculated based upon	2627
the amount of tax due under section 5747.02 of the Revised Code	2628
after subtracting any other credits that precede the credit under	2629
that division in the order required under section 5747.98 of the	2630
Revised Code.	2631

(K) No credit shall be allowed under division (B) of this	2632
section unless the taxpayer furnishes such proof as the tax	2633
commissioner shall require that the income tax liability has been	2634
paid to another state or the District of Columbia.	2635

(L) No credit shall be allowed under division (B) of this	2636
section for compensation that is not subject to the income tax of	2637
another state or the District of Columbia as the result of an	2638
agreement entered into by the tax commissioner under division	2639
(A)(3) of this section.	2640

Sec. 5901.02.  In each county there shall be a commission	2641
known as "the veterans service commission." Except as provided in	2642
section 5901.021 of the Revised Code, the commission shall be	2643
composed of five persons. Those persons shall be residents of the	2644
county and shall be appointed to five-year terms by a judge of the	2645
court of common pleas. At the time of appointment or	2646
reappointment to the commission, no commission member appointed	2647
under this section shall be an employee of the commission or hold	2648
an elective or other appointive office of the county served by the	2649
commission.	2650

Each member of the commission appointed under this section	2651
shall be an honorably discharged or honorably separated veteran.	2652
Within sixty days after the date of appointment, each such member	2653
of the commission shall file the member's form DD214 with the	2654
governor's office of veterans affairs in accordance with	2655
guidelines established by the director of that office.	2656
Appointments to the commissionSuch appointments shall be made	2657
from lists of recommended persons, in the manner specified in the	2658
following paragraph. One person shall be a representative	2659
recommended by the American Legion; one person shall be a	2660
representative recommended by the Veterans of Foreign Wars; one	2661
person shall be a representative recommended by the Disabled	2662
American Veterans; one person shall be a representative	2663
recommended by the AMVETS; and one person shall be a	2664
representative recommended by the Military Order of the Purple	2665
Heart of the U.S.A., the Vietnam Veterans of America, or the	2666
Korean War Veterans Association. If any such organization has no	2667
post or chapter located in the county, the appointment shall be	2668
made from lists of recommended persons submitted by posts or	2669
chapters of any other congressionally chartered veterans	2670
organizations located in the county. If no such other	2671
organizations have posts or chapters located in the county, the	2672
judge described in the following paragraphresponsible for making	2673
appointments under this section may appoint any qualified veteran	2674
to represent the veteran community.	2675

On or before the fifteenth day of October of each year, the	2676
appointing judge of the court of common pleas who is responsible	2677
for making appointments to the commission shall notify each post	2678
or chapter of each organization within the county from which the	2679
member may or must be appointed that it may submit a list	2680
containing three recommendations of persons who are eligible for	2681
appointment. If the judge does not receive any recommendations	2682
within sixty days after providing the required notification, the	2683
judge may appoint any qualified veteran to represent the veteran	2684
community. The judge shall make the appointment on or before the	2685
fifteenth day of January of each year. Vacancies occurring on the	2686
commissionAny vacancy in a membership appointed under this	2687
section shall be filled in the same manner as the original	2688
appointments.	2689

Beginning in the year 2000, appointmentsappointment of	2690
members to the commission under this section shall be made as	2691
follows:	2692

(A) Appointments for members to represent the American	2693
Legion shall be made for terms to commence in years ending in zero	2694
and five.	2695

(B) Appointments for members to represent the Veterans of	2696
Foreign Wars shall be made for terms to commence in years ending	2697
in one and six.	2698

(C) Appointments for members to represent the Disabled	2699
American Veterans shall be made for terms to commence in years	2700
ending in two and seven.	2701

(D) Appointments for members to represent the AMVETS shall	2702
be made for terms to commence in years ending in three and eight.	2703

(E) Appointments for members to represent the Military Order	2704
of the Purple Heart of the U.S.A., the Vietnam Veterans of	2705
America, or the Korean War Veterans Association shall be made for	2706
terms to commence in years ending in four and nine.	2707

The terms immediately preceding the initial appointments made	2708
under divisions (A) to (E) of this section may be for periods of	2709
less than five years.	2710

Sec. 5901.021. This section applies only to counties having a	2711
population, according to the most recent decennial census, of more	2712
than four hundred thousand. In any such county in which the	2713
veterans service commission submits a budget request under section	2714
5901.11 of the Revised Code for the ensuing fiscal year that	2715
exceeds (1) twenty-five-thousandths of one per cent of the	2716
assessed value of property in the county or (2) the amount	2717
appropriated to the commission from the county general fund in the	2718
current fiscal year by more than ten per cent of that	2719
appropriation, the board of county commissioners, by resolution,	2720
may create not more than six memberships on the veterans service	2721
commission in addition to the memberships provided for by section	2722
5901.02 of the Revised Code. The board shall prescribe the number	2723
of years such memberships shall exist, which shall not exceed five	2724
years. Once a board of county commissioners creates such	2725
memberships, it may not create additional memberships under this	2726
section if the total number of such memberships would exceed six.	2727
The board shall appoint residents of the county to each of the	2728
additional memberships for terms prescribed by the board and	2729
commencing on a date fixed by the board.	2730

If the board of county commissioners appoints such additional	2731
members, the board may permit the commission to submit an original	2732
or revised budget request for the ensuing fiscal year later than	2733
the last Monday in May, as otherwise required under section	2734
5901.11 of the Revised Code.	2735

The board of county commissioners may remove, for cause, any	2736
member appointed under this section; shall provide for whether	2737
such members may be reappointed upon the expiration of their	2738
terms; and shall fill any vacancy in a membership appointed under	2739
this section for the unexpired term in the manner provided for the	2740
original appointment.	2741

Sec. 5901.03.  The veterans service commission shall select	2742
one of its members as president, one as vice-president, and one as	2743
secretary. The commission shall meet at least once each month. A	2744
judge of the court of common pleas may remove, for cause, any	2745
member of the commission for causeappointed under section 5901.02	2746
of the Revised Code, and shall fill vacancies occuring on the	2747
commissionoccurring among memberships appointed under that	2748
section for the unexpired terms, in the manner provided in section	2749
5901.02 of the Revised Codefor the original appointments.	2750

The commission's duties shall include but are not limited to	2751
the following:	2752

(A) Employing such staff as are necessary to carry out the	2753
commission's duties, and fixing their compensation;	2754

(B) Establishing policies and procedures for the	2755
administration of the commission and the veterans service office;	2756

(C) Establishing policies and procedures for the	2757
administration of assistance as provided under this chapter;	2758

(D) Causing the budgets of the veterans service commission	2759
and veterans service office to be presented to the board of county	2760
commissioners for approval;	2761

(E) Establishing programs of outreach and coordination with	2762
other agencies to enhance available services to veterans within	2763
the county;	2764

(F) Promoting, monitoring, and providing funding for ongoing	2765
education and training for veterans service commissioners and	2766
staff;	2767

(G) Making reports to the organizations represented on the	2768
commission, as provided in section 5901.02 of the Revised Code,	2769
and to others, upon request;	2770

(H) Establishing regularly scheduled transportation for	2771
veterans to and from veterans administration medical centers whose	2772
districts the county is within, through contractual agreements or	2773
through other arrangements determined by the commission to be most	2774
cost-effective;	2775

(I) Participating in appropriate memorial and commemorative	2776
activities to help promote patriotism and veterans services;	2777

(J) Taking any other actions required by this chapter.

2778

Sec. 5919.34.  (A) As used in this section:

2779

(1) "Academic term" means any one of the following:

2780

(a) Fall term, which consists of fall semester or fall	2781
quarter, as appropriate;	2782

(b) Winter term, which consists of winter semester, winter	2783
quarter, or spring semester, as appropriate;	2784

(c) Spring term, which consists of spring quarter;

2785

(d) Summer term, which consists of summer semester or summer	2786
quarter, as appropriate.	2787

(2) "Eligible applicant" means any individual to whom all of	2788
the following apply:	2789

(a) The individual does not possess a baccalaureate degree.

2790

(b) The individual has enlisted, re-enlisted, or extended	2791
current enlistment in the Ohio national guard or is an individual	2792
to which division (F) of this section applies.	2793

(c) The individual is actively enrolled as a full-time or	2794
part-time student for at least six credit hours of course work in	2795
a semester or quarter in a two-year or four-year degree-granting	2796
program at an institution of higher education or in a	2797
diploma-granting program at an institution of higher education	2798
that is a school of nursing.	2799

(d) The individual has not accumulated ninety-six	2800
eligibility units under division (E) of this section.	2801

(3) "Institution of higher education" means an Ohio	2802
institution of higher education that is state-assisted, that is	2803
nonprofit and has received a certificate of authorization from the	2804
Ohio board of regents pursuant to Chapter 1713. of the Revised	2805
Code, that is a private institution exempt from regulation under	2806
Chapter 3332. of the Revised Code as prescribed in section	2807
3333.046 of the Revised Code, or that holds a certificate of	2808
registration and program authorization issued by the state board	2809
of proprietary school registration pursuant to section 3332.05 of	2810
the Revised Code.	2811

(4) "State university" has the same meaning as in section	2812
3345.011 of the Revised Code.	2813

(B)(1) There is hereby created a scholarship program to be	2814
known as the Ohio national guard scholarship program. For the	2815
fiscal year 2000, the number of participants in the program for	2816
the fall term is limited to the equivalent of two thousand five	2817
hundred full-time participants; the number of participants in the	2818
program for the winter term is limited to the equivalent of two	2819
thousand five hundred full-time participants; the number of	2820
participants in the program for the spring term is limited to the	2821
equivalent of one thousand six hundred seventy-five full-time	2822
participants; and the number of participants in the program for	2823
the summer term is limited to the equivalent of six hundred	2824
full-time participants. Except as provided in division (B)(2) of	2825
this section for the fiscal year 2001 and succeeding fiscal years,	2826
the number of participants in the program for the fall term is	2827
limited to the equivalent of three thousand five hundred full-time	2828
participants; the number of participants in the program for the	2829
winter term is limited to the equivalent of three thousand five	2830
hundred full-time participants; the number of participants in the	2831
program for the spring term is limited to the equivalent of two	2832
thousand three hundred forty-five full-time participants; and the	2833
number of participants in the program for the summer term is	2834
limited to the equivalent of eight hundred full-time participants.	2835

(2) After the application deadline for any academic term in	2836
fiscal year 2001, the adjutant general may request the controlling	2837
board, if sufficient appropriated funds are available, to approve	2838
the following number of additional participants for that term:	2839

(a) For the fall or winter academic term, up to the	2840
equivalent of five hundred additional full-time participants;	2841

(b) For the spring academic term, up to the equivalent of	2842
three hundred seventy-five additional full-time participants;	2843

(c) For the summer academic term, up to the equivalent of	2844
one hundred twenty-five additional full-time participants.	2845

(C) If the adjutant general estimates that appropriations	2846
for all scholarships applied for under this section and likely to	2847
be used during an academic term are inadequate for all eligible	2848
applicants for that academic term to receive scholarships, the	2849
adjutant general shall promptly inform all applicants not	2850
receiving scholarships for that academic term of the next academic	2851
term that appropriations will be adequate for the scholarships.	2852
Any such eligible applicant may again apply for a scholarship	2853
beginning that academic term if the applicant is in compliance	2854
with all requirements established by this section and the adjutant	2855
general for the program. The adjutant general shall process all	2856
applications for scholarships for each academic term in the order	2857
in which they are received. The scholarships shall be made	2858
without regard to financial need. At no time shall one person be	2859
placed in priority over another because of sex, race, or religion.	2860

(D)(1) Except as provided in division (H)(I) of this	2861
section, for each academic term that an eligible applicant is	2862
approved for a scholarship under this section and either remains a	2863
current member in good standing of the Ohio national guard or is	2864
eligible for a scholarship under division (F)(1) of this section,	2865
the institution of higher education in which the applicant is	2866
enrolled shall, if the applicant's enlistment obligation extends	2867
beyond the end of that academic term or if division (F)(1) of this	2868
section applies, be paid on the applicant's behalf the applicable	2869
one of the following amounts:	2870

(1)(a) If the institution is state-assisted, an amount equal	2871
to one hundred per cent of the institution's tuition charges;	2872

(2)(b) If the institution is a nonprofit private institution	2873
or a private institution exempt from regulation under Chapter	2874
3332. of the Revised Code as prescribed in section 3333.046 of the	2875
Revised Code, an amount equal to one hundred per cent of the	2876
average tuition charges of all state universities;	2877

(3)(c) If the institution is an institution that holds a	2878
certificate of registration from the state board of proprietary	2879
school registration, the lesser of the following:	2880

(a)(i) An amount equal to one hundred per cent of the total	2881
instructional and general charges of the institution;	2882

(b)(ii) An amount equal to one hundred per cent of the	2883
average tuition charges of all state universities.	2884

(4)(2) An eligible applicant's scholarship shall not be	2885
reduced by the amount of that applicant's benefits under "the	2886
Montgomery G.I. Bill Act of 1984," Pub. L. No. 98-525, 98 Stat.	2887
2553 (1984).	2888

(E) A scholarship recipient under this section shall be	2889
entitled to receive scholarships under this section for the number	2890
of quarters or semesters it takes the recipient to accumulate	2891
ninety-six eligibility units as determined under divisions (E)(1)	2892
to (3) of this section.	2893

(1) To determine the maximum number of semesters or quarters	2894
for which a recipient is entitled to a scholarship under this	2895
section, the adjutant general shall convert a recipient's credit	2896
hours of enrollment for each academic term into eligibility units	2897
in accordance with the following table:	2898

(2) A scholarship recipient under this section may continue	2907
to apply for scholarships under this section until the recipient	2908
has accumulated ninety-six eligibility units.	2909

(3) If a scholarship recipient withdraws from courses prior	2910
to the end of an academic term so that the recipient's enrollment	2911
for that academic term is less than six credit hours, no	2912
scholarship shall be paid on behalf of that person for that	2913
academic term except that. Except as provided in division (F)(3)	2914
of this section, if a scholarship has already been paid on behalf	2915
of the person for that academic term, the adjutant general shall	2916
add to that person's accumulated eligibility units the number of	2917
eligibility units for which the scholarship was paid.	2918

(F) This division applies to any eligible applicant called	2919
into active duty on or after September 11, 2001. As used in this	2920
division, "active duty" means active duty pursuant to an executive	2921
order of the president of the United States, an act of the	2922
congress of the United States, or section 5919.29 or 5923.21 of	2923
the Revised Code.	2924

(1) An individual to whom this division applies is eligible	2925
for scholarships under this section for those academic terms that	2926
were missed or could have been missed as a result of the	2927
individual's call into active duty. Scholarships shall not be	2928
paid for the academic term in which an eligible applicant's	2929
enlistment obligation ends unless an applicant is eligible under	2930
this division for a scholarship for such academic term due to	2931
previous active duty.	2932

(2) When an individual to whom this division applies	2933
withdraws or otherwise fails to complete courses, for which	2934
scholarships have been awarded under this section, because the	2935
individual was called into active duty, the institution of higher	2936
education shall grant the individual a leave of absence from the	2937
individual's education program and shall not impose any academic	2938
penalty for such withdrawal or failure to complete courses.	2939
Division (F)(2) of this section applies regardless of whether or	2940
not the scholarship amount was paid to the institution of higher	2941
education.	2942

(3) If an individual to whom this division applies	2943
withdraws or otherwise fails to complete courses because the	2944
individual was called into active duty, and if scholarships for	2945
those courses have already been paid, either:	2946

(a) The adjutant general shall not add to that person's	2947
accumulated eligibility units calculated under division (E) of	2948
this section the number of eligibility units for the academic	2949
courses or term for which the scholarship was paid and the	2950
institution of higher education shall repay the scholarship amount	2951
to the state.	2952

(b) The adjutant general shall add to that individual's	2953
accumulated eligibility units calculated under division (E) of	2954
this section the number of eligibility units for the academic	2955
courses or term for which the scholarship was paid if the	2956
institution of higher education agrees to permit the individual to	2957
complete the remainder of the academic courses in which the	2958
individual was enrolled at the time the individual was called into	2959
active duty.	2960

(G) A scholarship recipient under this section who fails	2961
to complete the term of enlistment, re-enlistment, or extension of	2962
current enlistment the recipient was serving at the time a	2963
scholarship was paid on behalf of the recipient under this section	2964
is liable to the state for repayment of a percentage of all Ohio	2965
national guard scholarships paid on behalf of the recipient under	2966
this section, plus interest at the rate of ten per cent per annum	2967
calculated from the dates the scholarships were paid. This	2968
percentage shall equal the percentage of the current term of	2969
enlistment, re-enlistment, or extension of enlistment a recipient	2970
has not completed as of the date the recipient is discharged from	2971
the Ohio national guard.	2972

The attorney general may commence a civil action on behalf of	2973
the adjutant general to recover the amount of the scholarships and	2974
the interest provided for in this division and the expenses	2975
incurred in prosecuting the action, including court costs and	2976
reasonable attorney's fees. A scholarship recipient is not liable	2977
under this division if the recipient's failure to complete the	2978
term of enlistment being served at the time a scholarship was paid	2979
on behalf of the recipient under this section is due to the	2980
recipient's death; discharge from the national guard due to	2981
disability; or the recipient's enlistment, for a term not less	2982
than the recipient's remaining term in the national guard, in the	2983
active component of the United States armed forces or the active	2984
reserve component of the United States armed forces.	2985

(G)(H) On or before the first day of each academic term, the	2986
adjutant general shall provide an eligibility roster to each	2987
institution of higher education at which one or more scholarship	2988
recipients have applied for enrollment. The institution shall use	2989
the roster to certify the actual full-time or part-time enrollment	2990
of each scholarship recipient listed as enrolled at the	2991
institution and return the roster to the adjutant general within	2992
thirty days after the first day of the academic term. The	2993
adjutant general shall report to the Ohio board of regents the	2994
number of students in the Ohio national guard scholarship program	2995
at each institution of higher education. The Ohio board of	2996
regents shall provide for payment of the appropriate number and	2997
amount of scholarships to each institution of higher education	2998
pursuant to division (D) of this section. The adjutant general	2999
shall report on a quarterly basis to the director of budget and	3000
management, the speaker of the house of representatives, and the	3001
president of the senate the number of Ohio national guard	3002
scholarship recipients and a projection of the cost of the program	3003
for the remainder of the biennium.	3004

(H)(I) The chancellor of the Ohio board of regents and the	3005
adjutant general may adopt rules pursuant to Chapter 119. of the	3006
Revised Code governing the administration and fiscal management of	3007
the Ohio national guard scholarship program and the procedure by	3008
which the Ohio board of regents and the department of the adjutant	3009
general may modify the amount of scholarships a member receives	3010
based on the amount of other state financial aid a member	3011
receives.	3012

(I)(J) Notwithstanding division (A) of section 127.14 of the	3013
Revised Code, the controlling board shall not transfer all or part	3014
of any appropriation for the Ohio national guard scholarship	3015
program.	3016

Section 2. That existing sections 131.44, 173.06, 173.40,	3017
2913.40, 3721.51, 3721.56, 5101.11, 5111.02, 5111.10, 5111.86,	3018
5111.871, 5112.01, 5112.06, 5112.07, 5112.11, 5123.041, 5733.04,	3019
5743.02, 5743.03, 5743.04, 5743.05, 5743.08, 5743.081, 5743.12,	3020
5743.13, 5743.14, 5743.32, 5743.33, 5743.34, 5743.35, 5747.01,	3021
5747.02, 5747.05, 5901.02, 5901.03, and 5919.34 and sections	3022
5743.023 and 5743.322 of the Revised Code are hereby repealed.	3023

Section 3. (A) As used in this section, "net additional tax"	3024
means the net additional amount of tax due on all packages of Ohio	3025
stamped cigarettes and on all unaffixed Ohio cigarette tax stamps	3026
that a wholesale or retail dealer has on hand as of the beginning	3027
of business on July 1, 2002, as a result of the amendment of	3028
section 5743.02 and the repeal of section 5743.023 of the Revised	3029
Code by this act.	3030

(B) The amendment by this act of sections 5743.02, 5743.03,	3031
5743.04, 5743.05, 5743.08, 5743.081, 5743.12, 5743.13, 5743.14,	3032
5743.32, 5743.33, 5743.34, and 5743.35 and the repeal by this act	3033
of sections 5743.023 and 5743.322 of the Revised Code take effect	3034
July 1, 2002.	3035

(C) In addition to the return required by section 5743.03 of	3036
the Revised Code, each wholesale dealer and each retail dealer	3037
shall make and file a return on forms prescribed by the Tax	3038
Commissioner, showing the net additional tax due and any other	3039
information that the Commissioner considers necessary for the	3040
administration of sections 5743.01 to 5743.20 of the Revised Code.	3041
Not later than July 31, 2002, each wholesale dealer and each	3042
retail dealer shall deliver the return to the Treasurer of State,	3043
together with a remittance of an amount equal to one-third of the	3044
net additional tax. The Treasurer of State shall stamp or	3045
otherwise mark on the return the date it was received and also	3046
shall show on the return by stamp or otherwise the tax payment	3047
remitted with the return. The Treasurer of State immediately shall	3048
transmit all returns filed under this section to the Tax	3049
Commissioner. Not later than August 31, 2002, and also not later	3050
than September 30, 2002, each such dealer shall remit to the	3051
Treasurer of State an amount equal to one-third of the net	3052
additional tax. Any wholesale or retail dealer who fails to file a	3053
return or remit the net additional tax as prescribed by this	3054
section, for each day the dealer fails to do so, shall forfeit and	3055
pay into the state treasury, as revenue arising from the tax	3056
imposed by this section, a late charge equal to the greater of	3057
fifty dollars or ten per cent of the tax due. Any unpaid or	3058
unreported tax liability or late charge levied by this section may	3059
be collected by assessment in the manner provided in section	3060
5743.081 or 5743.082 of the Revised Code.	3061

Section 4. (A) Notwithstanding sections 5743.02 and 5743.32	3062
of the Revised Code, as amended by this act, the rate of the tax	3063
imposed by those sections shall be thirty-four and one-half mills	3064
on each cigarette from the first day of the first month after the	3065
month in which the Director of Budget and Management makes the	3066
certification to the Tax Commissioner under division (B) of this	3067
section.	3068

(B) In the first month beginning after fiscal year 2002 in	3069
which the balance in the Budget Stabilization Fund created under	3070
section 131.43 of the Revised Code equals or exceeds five per cent	3071
of the General Revenue Fund revenues for the preceding fiscal	3072
year, the Director of Budget and Management shall certify such	3073
fact to the Tax Commissioner. The Tax Commissioner shall notify	3074
wholesale and retail dealers of the reduction in the rate of such	3075
taxes.	3076

Section 5. To ease taxpayer compliance burdens, each taxpayer	3077
having a taxable year ending after September 10, 2001, and before	3078
the effective date of this section, may elect to apply to that	3079
taxable year the amendment by this act of section 5733.04 of the	3080
Revised Code, by the addition of divisions (I)(17) and (18) of	3081
that section, and of section 5747.01 of the Revised Code by the	3082
addition of divisions (A)(20) and (21) of that section. If the	3083
taxpayer has more than one taxable year ending during that period	3084
and makes that election, the election applies to all those taxable	3085
years. The election shall accompany or be reflected in the report	3086
or return when filed, or shall accompany or be reflected in an	3087
amended report. The election is revocable at the option of the	3088
person making the election, but no revocation is effective if it	3089
is made after the ninetieth day before the last day of the	3090
applicable period of time described in division (B) of section	3091
5733.12 or division (B) of section 5747.11 of the Revised Code, as	3092
applicable.	3093

Section 6. (A) The Committee to Study State and Local Taxes	3094
is hereby created. The committee shall consist of nine members.	3095
The Speaker of the House of Representatives shall appoint three	3096
members of the House of Representatives to the committee, not more	3097
than two of whom shall be from the majority party. The President	3098
of the Senate shall appoint three members of the Senate to the	3099
committee, not more than two of whom shall be from the majority	3100
party. One member shall be the Tax Commissioner, one shall be the	3101
Director of Budget and Management, and one shall be the Director	3102
of Development. Vacancies shall be filled in the same manner as	3103
original appointments. The members of the committee shall be	3104
appointed within thirty days after the effective date of this	3105
section. The members shall select a chairperson of the committee	3106
from among themselves. A majority of the committee constitutes a	3107
quorum for the conduct of official business.	3108

(B) The committee may request staff assistance from the	3109
Legislative Service Commission as well as the participating	3110
agencies. The committee may meet during periods when the General	3111
Assembly has adjourned, and may solicit and take testimony from	3112
experts on public finance and taxation as well as from interested	3113
parties. All state agencies and local governments shall comply	3114
promptly with any requests by the committee for data or other	3115
information the committee requires to properly complete its	3116
research.	3117

(C) The committee shall:

3118

(1) Make a study of the current state and local tax	3119
structure, including a determination of how the current tax	3120
structure affects various sectors of the economy, such as	3121
business, industry, and individuals;	3122

(2) Examine the current state and local tax structure with	3123
attention to its equity, simplicity, stability, neutrality, and	3124
competitiveness. The committee shall take ease of administration	3125
and compliance into consideration as an aspect of "simplicity."	3126
The committee shall take long term revenues into consideration as	3127
an aspect of "stability."	3128

(3) Identify aspects of the tax structure that present	3129
particular obstacles to equity, simplicity, stability, neutrality,	3130
and competitiveness;	3131

(4) Analyze who bears the ultimate tax burden with respect	3132
to any particular tax;	3133

(5) Evaluate priorities in the tax structure.

3134

(D) On or before March 1, 2003, the committee shall prepare	3135
and submit to the Governor, Speaker of the House of	3136
Representatives, and President of the Senate, and to the Minority	3137
Leaders of the House and Senate, a report summarizing the	3138
committee's review of the state and local tax structure. The	3139
report shall include recommendations for improvements in the tax	3140
structure, which recommendations shall be revenue neutral in the	3141
aggregate.	3142

Section 7. The amendment by this act of section 5747.01 of	3143
the Revised Code by the addition to divisions (A)(6), (I), and (S)	3144
and the addition of division (S)(12) of that section, and the	3145
amendment by this act of sections 5747.02 and 5747.05 of the	3146
Revised Code, apply to taxable years beginning on or after January	3147
1, 2002.	3148

Section 8. That Section 5.02 of Sub. H.B. 73 of the 124th	3149
General Assembly, as amended by Am. Sub. H.B. 405 of the 124th	3150
General Assembly, be amended to read as follows:	3151

"       Sec. 5.02.  ENFORCEMENT

3152

State Highway Safety Fund Group

3153

General Services Fund Group

3172

COLLECTIVE BARGAINING INCREASES

3179

Notwithstanding division (D) of section 127.14 and division	3180
(B) of section 131.35 of the Revised Code, except for the General	3181
Revenue Fund, the Controlling Board may, upon the request of	3182
either the Director of Budget and Management, or the Department of	3183
Public Safety with the approval of the Director of Budget and	3184
Management, increase appropriations for any fund, as necessary for	3185
the Department of Public Safety, to assist in paying the costs of	3186
increases in employee compensation that have occurred pursuant to	3187
collective bargaining agreements under Chapter 4117. of the	3188
Revised Code and, for exempt employees, under section 124.152 of	3189
the Revised Code.	3190

PATROL REIMBURSEMENT FUND CASH TRANSFER

3191

On the effective date of this amendment or as soon as	3192
possible thereafter, the Director of Budget and Management shall	3193
transfer $551,150.59 in cash from the Patrol Reimbursement Fund	3194
(Fund 838) to the Turnpike Policing Fund (Fund 837). This transfer	3195
will correct an inaccurate deposit made at the end of fiscal year	3196
2001.	3197

On the effective date of this amendment or as soon as	3198
possible thereafter, the Director of Budget and Management shall	3199
transfer up to $189,309 in cash in fiscal year 2002 and shall	3200
transfer up to $192,411$2,454,232 in cash in fiscal year 2003	3201
from the Financial Responsibility Compliance (Fund 835) to the	3202
State Highway Safety Fund (Fund 036)."	3203

Section 9. That existing Section 5.02 of Sub. H.B. 73 of the	3204
124th General Assembly, as amended by Am. Sub. H.B. 405 of the	3205
124th General Assembly, is hereby repealed.	3206

Section 10. That Sections 16, 16.02, 44, 44.19, 63.07, 94,	3207
94.02, 94.06, 94.07, 125, and 144 of Am. Sub. H.B. 94 of the 124th	3208
General Assembly be amended to read as follows:	3209

"       Sec. 16.  AGE DEPARTMENT OF AGING

3210

General Revenue Fund

3211

General Services Fund Group

3229

Federal Special Revenue Fund Group

3233

State Special Revenue Fund Group

3241

Sec. 16.02.  PASSPORT

3252

Appropriation item 490-403, PASSPORT, and the amounts set	3253
aside for the PASSPORT Waiver Program in appropriation item	3254
490-610, PASSPORT/Residential State Supplement, may be used to	3255
assess clients regardless of Medicaid eligibility.	3256

The Director of Aging shall adopt rules under section 111.15	3257
of the Revised Code governing the nonwaiver funded PASSPORT	3258
program, including client eligibility.	3259

The Department of Aging shall administer the Medicaid Waiver	3260
funded PASSPORT Home Care program as delegated by the Department	3261
of Job and Family Services in an interagency agreement. The	3262
foregoing appropriation item 490-403, PASSPORT, and the amounts	3263
set aside for the PASSPORT Waiver Program in appropriation item	3264
490-610, PASSPORT/Residential State Supplement, shall be used to	3265
provide the required state match for federal Medicaid funds	3266
supporting the Medicaid Waiver funded PASSPORT Home Care program.	3267
Appropriation item 490-403, PASSPORT, and the amounts set aside	3268
for the PASSPORT Waiver Program in appropriation item 490-610,	3269
PASSPORT/Residential State Supplement, may also be used to support	3270
the Department of Aging's administrative costs associated with	3271
operating the PASSPORT program.	3272

The foregoing appropriation item 490-607, PASSPORT, shall be	3273
used to provide the federal matching share for all PASSPORT	3274
program costs determined by the Department of Job and Family	3275
Services to be eligible for Medicaid reimbursement.	3276

SENIOR COMMUNITY SERVICES

3277

The foregoing appropriation item 490-411, Senior Community	3278
Services, shall be used for services designated by the Department	3279
of Aging, including, but not limited to, home-delivered meals,	3280
transportation services, personal care services, respite services,	3281
home repair, and care coordination. Service priority shall be	3282
given to low income, frail, and cognitively impaired persons 60	3283
years of age and over. The department shall promote cost sharing	3284
by service recipients for those services funded with block grant	3285
funds, including, where possible, sliding-fee scale payment	3286
systems based on the income of service recipients.	3287

ALZHEIMERS RESPITE

3288

The foregoing appropriation item 490-414, Alzheimers Respite,	3289
shall be used only to fund Alzheimer's disease services under	3290
section 173.04 of the Revised Code.	3291

TRANSPORTATION FOR ELDERLY

3292

The foregoing appropriation item 490-416, Transportation for	3293
Elderly, shall be used for non-capital expenses related to	3294
transportation services for the elderly that provide access to	3295
such things as healthcare services, congregate meals,	3296
socialization programs, and grocery shopping. The appropriation	3297
shall be allocated to the following agencies:	3298

(A) $45,000 per fiscal year to the Cincinnati Jewish	3299
Vocational Services;	3300

(B) $45,000 per fiscal year to the Cleveland Jewish	3301
Community Center;	3302

(C) $45,000 per fiscal year to the Columbus Jewish	3303
Federation;	3304

(D) $20,000 per fiscal year to the Dayton Jewish Family	3305
Services;	3306

(E) $10,000 per fiscal year to the Akron Jewish Community	3307
Center;	3308

(F) $5,000 per fiscal year to the Youngstown Jewish	3309
Federation;	3310

(G) $3,000 per fiscal year to the Canton Jewish Federation;

3311

(H) $10,000 per fiscal year to the Toledo Jewish Federation.

3312

Agencies receiving funding from appropriation item 490-416,	3313
Transportation for Elderly, shall coordinate services with other	3314
local service agencies.	3315

RESIDENTIAL STATE SUPPLEMENT

3316

Under the Residential State Supplement Program, the amount	3317
used to determine whether a resident is eligible for payment and	3318
for determining the amount per month the eligible resident will	3319
receive shall be as follows:	3320

(A) $900 for a residential care facility, as defined in	3321
section 3721.01 of the Revised Code;	3322

(B) $900 for an adult group home, as defined in Chapter	3323
3722. of the Revised Code;	3324

(C) $800 for an adult foster home, as defined in Chapter	3325
173. of the Revised Code;	3326

(D) $800 for an adult family home, as defined in Chapter	3327
3722. of the Revised Code;	3328

(E) $800 for an adult community alternative home, as defined	3329
in Chapter 3724. of the Revised Code;	3330

(F) $800 for an adult residential facility, as defined in	3331
Chapter 5119. of the Revised Code;	3332

(G) $600 for adult community mental health housing services,	3333
as defined in division (B)(5) of section 173.35 of the Revised	3334
Code.	3335

The Departments of Aging and Job and Family Services shall	3336
reflect this amount in any applicable rules the departments adopt	3337
under section 173.35 of the Revised Code.	3338

TRANSFER OF RESIDENTIAL STATE SUPPLEMENT APPROPRIATIONS

3339

The Department of Aging may transfer cash by intrastate	3340
transfer vouchers from the foregoing appropriation items 490-412,	3341
Residential State Supplement, and 490-610, PASSPORT/Residential	3342
State Supplement, to the Department of Job and Family Services'	3343
Fund 4J5, Home and Community-Based Services for the Aged Fund.	3344
The funds shall be used to make benefit payments to Residential	3345
State Supplement recipients.	3346

LONG-TERM CARE OMBUDSMAN

3347

The foregoing appropriation item 490-410, Long-Term Care	3348
Ombudsman, shall be used for a program to fund ombudsman program	3349
activities in nursing homes, adult care facilities, boarding	3350
homes, and home and community care services.	3351

PRESCRIPTION DRUG DISCOUNT PROGRAM

3352

The foregoing appropriation item 490-419, Prescription Drug	3353
Discount Program, shall be used to administer a prescription drug	3354
discount program.	3355

SENIOR FACILITIES

3356

Of the foregoing appropriation item 490-504, Senior	3357
Facilities, in fiscal year 2002, $10,000 shall be for the Tri-city	3358
Senior Center, $10,000 shall be for the Westlake Senior Center,	3359
and $10,000 shall be for the Rocky River Senior Center.	3360

Of the foregoing appropriation item 490-504, Senior	3361
Facilities, $10,000 shall be for the Jilliard Senior Center,	3362
$10,000 shall be for the Northwest Stark County Senior Center, and	3363
$10,000 shall be for the North Ridgeville Senior Center.	3364

REGIONAL LONG-TERM CARE OMBUDSMAN PROGRAMS

3365

The foregoing appropriation item 490-609, Regional Long-Term	3366
Care Ombudsman Programs, shall be used solely to pay the costs of	3367
operating the regional long-term care ombudsman programs.	3368

PASSPORT/RESIDENTIAL STATE SUPPLEMENT

3369

Of the foregoing appropriation item 490-610,	3370
PASSPORT/Residential State Supplement, up to $2,835,000 each	3371
fiscal year shall be used to fund the Residential State Supplement	3372
Program. The remaining available funds shall be used to fund the	3373
PASSPORT program.	3374

Sec. 44.  EDU DEPARTMENT OF EDUCATION

3375

General Revenue Fund

3376

General Services Fund Group

3430

Federal Special Revenue Fund Group

3439

State Special Revenue Fund Group

3468

Lottery Profits Education Fund Group

3478

Sec. 44.19.  LOTTERY PROFITS EDUCATION FUND

3487

Appropriation item 200-612, Base Cost Funding (Fund 017),	3488
shall be used in conjunction with appropriation item 200-501, Base	3489
Cost Funding (GRF), to provide payments to school districts	3490
pursuant to Chapter 3317. of the Revised Code.	3491

Of the foregoing appropriation item 200-612, Base Cost	3492
Funding (Fund 017), $25,000,000 in each fiscal year shall be used	3493
from the funds transferred from the Unclaimed Prizes Trust Fund	3494
pursuant to the section entitled "Transfers from the Unclaimed	3495
Prizes Fund" of this actAm. Sub. H.B. 94 of the 124th General	3496
Assembly.	3497

The Department of Education, with the approval of the	3498
Director of Budget and Management, shall determine the monthly	3499
distribution schedules of appropriation item 200-501, Base Cost	3500
Funding (GRF), and appropriation item 200-612, Base Cost Funding	3501
(Fund 017). If adjustments to the monthly distribution schedule	3502
are necessary, the Department of Education shall make such	3503
adjustments with the approval of the Director of Budget and	3504
Management.	3505

Of the foregoing appropriation item 200-682, Lease Rental	3506
Payment Reimbursement (Fund 017), $10,000,000 in fiscal year 2003	3507
shall be used from the funds transferred from the Unclaimed Prizes	3508
Trust Fund pursuant to the paragraph with the heading "Transfers	3509
from the Unclaimed Prizes Fund" in Am. Sub. H.B. 94 of the 124th	3510
General Assembly.	3511

The Director of Budget and Management shall transfer via	3512
intrastate transfer voucher the amount appropriated under the	3513
Lottery Profits Education Fund for appropriation item 200-682,	3514
Lease Rental Payment Reimbursement, to the General Revenue Fund on	3515
a schedule determined by the director. These funds shall support	3516
the appropriation item 230-428, Lease Rental Payments (GRF), of	3517
the School Facilities Commission.	3518

LOTTERY PROFITS TRANSFERS*

3519

On the fifteenth day of May of each fiscal year, the Director	3520
of Budget and Management shall determine if lottery profits	3521
transfers will meet the appropriation amounts from the Lottery	3522
Profits Education Fund.	3523

On or after the date specified in each fiscal year, if the	3524
director determines that lottery profits will not meet	3525
appropriations and if other funds are not available to meet the	3526
shortfall, the Superintendent of Public Instruction shall take the	3527
actions specified under the "Reallocation of Funds" section of	3528
this actAm. Sub. H.B. 94 of the 124th General Assembly.	3529

TRANSFERS FROM THE UNCLAIMED PRIZES FUND

3530

By the fifteenth day of January of fiscal year 2002 and	3531
fiscal year 2003, the Director of Budget and Management shall	3532
respectively transfer $25,000,000 for fiscal year 2002 and	3533
$35,000,000 for fiscal year 2003 from the State Lottery	3534
Commission's Unclaimed Prizes Fund to the Lottery Profits	3535
Education Fund, to be used solely for purposes specified in the	3536
Department of Education's budget. Transfers of unclaimed prizes	3537
under this provision shall not count as lottery profits in the	3538
determination made concerning excess profits titled "Lottery	3539
Profits" under the Department of Education in this actAm. Sub.	3540
H.B. 94 of the 124th General Assembly.	3541

TEACHER CERTIFICATION AND LICENSURE

3542

The foregoing appropriation item 200-681, Teacher	3543
Certification and Licensure, shall be used by the Department of	3544
Education in each year of the biennium to administer teacher	3545
certification and licensure functions pursuant to sections	3546
3301.071, 3301.074, 3301.50, 3301.51, 3319.088, 3319.22, 3319.24	3547
to 3319.28, 3319.281, 3319.282, 3319.29, 3319.301, 3319.31, and	3548
3319.51 of the Revised Code.	3549

Sec. 63.07. MEDICAID PROGRAM SUPPORT FUND - STATE

3550

The foregoing appropriation item 600-671, Medicaid Program	3551
Support, shall be used by the Department of Job and Family	3552
Services to pay for Medicaid services and contracts.	3553

HEALTH CARE SERVICES ADMINISTRATION

3554

The foregoing appropriation item 600-654, Health Care	3555
Services Administration, shall be used by the Department of Job	3556
and Family Services for costs associated with the administration	3557
of the Medicaid program.	3558

HEALTH CARE SERVICES ADMINISTRATION FUND

3559

For fiscal year 2003, the Director of Job and Family	3560
Services may deposit revenue received from federal reimbursement	3561
for allowable Title XIX administrative expenditures made by state	3562
or local entities into the Health Care Services Administration	3563
Fund (Fund 5U3).	3564

Of the amount received by the Department of Job and Family	3565
Services during fiscal year 2003 from the first installment of	3566
assessments paid under section 5112.06 of the Revised Code and	3567
intergovernmental transfers made under section 5112.07 of the	3568
Revised Code, the Director of Job and Family Services shall	3569
deposit $175,000 into the state treasury to the credit of the	3570
Health Care Services Administration Fund (Fund 5U3).	3571

Sec. 94.  BOR BOARD OF REGENTS

3572

General Revenue Fund

3573

General Services Fund Group

3642

Federal Special Revenue Fund Group

3647

State Special Revenue Fund Group

3657

Sec. 94.02. MISSION-BASED CORE FUNDING FOR HIGHER EDUCATION

3666

JOBS CHALLENGE

3667

Funds appropriated to appropriation item 235-415, Jobs	3668
Challenge, shall be distributed to state-assisted community and	3669
technical colleges, regional campuses of state-assisted	3670
universities, and other organizationally distinct and identifiable	3671
member campuses of the EnterpriseOhio Network in support of	3672
noncredit job-related training. In fiscal years 2002 and 2003,	3673
$2,114,673 and $1,981,841, respectively, shall be distributed as	3674
performance grants to EnterpriseOhio Network campuses based upon	3675
each campus's documented performance according to criteria	3676
established by the Board of Regents for increasing training and	3677
related services to businesses, industries, and public sector	3678
organizations.	3679

Of the foregoing appropriation item 235-415, Jobs Challenge,	3680
$3,130,087 in fiscal year 2002 and $2,875,953 in fiscal year 2003	3681
shall be allocated to the Targeted Industries Training Grant	3682
Program to attract, develop, and retain business and industry	3683
strategically important to the state's economy.	3684

Also, in fiscal years 2002 and 2003, $2,991,513 and	3685
$3,629,797, respectively, shall be allocated to the Non-credit	3686
Incentives Grant Program to reward two-year campuses for	3687
increasing the amount of non-credit skill upgrading services	3688
provided to Ohio employers and employees. The funds shall be	3689
distributed to campuses in proportion to each campus's share of	3690
noncredit job-related training revenues received by all campuses	3691
for the previous fiscal year. It is the intent of the General	3692
Assembly that this workforce development incentive component of	3693
the Jobs Challenge Program reward campus noncredit job-related	3694
training efforts in the same manner that the Research Challenge	3695
Program rewards campuses for their ability to obtain sponsored	3696
research revenues.	3697

Of the foregoing appropriation item 235-415, Jobs Challenge,	3698
$1,863,726 in fiscal year 2002 and $1,712,409 in fiscal year 2003	3699
shall be allocated as an incentive to support local EnterpriseOhio	3700
Network Campus/Adult Workforce Education Center Partnerships. The	3701
purpose of the partnerships is to promote and deliver coordinated,	3702
comprehensive training to local employers. Each partnership shall	3703
include a formal agreement between one or more EnterpriseOhio	3704
Network campus and one or more adult workforce education center	3705
for the delivery of training services.	3706

ACCESS CHALLENGE

3707

In each fiscal year, the foregoing appropriation item	3708
235-418, Access Challenge, shall be distributed to Ohio's	3709
state-assisted access colleges and universities. For the	3710
purposes of this allocation, "access campuses" includes	3711
state-assisted community colleges, state community colleges,	3712
technical colleges, Shawnee State University, Central State	3713
University, Cleveland State University, the regional campuses of	3714
state-assisted universities, and, where they are organizationally	3715
distinct and identifiable, the community-technical colleges	3716
located at the University of Cincinnati, Youngstown State	3717
University, and the University of Akron.	3718

In fiscal years 2002 and 2003, Access Challenge subsidies	3719
shall be distributed by the Board of Regents to eligible access	3720
campuses on the basis of each campus's share of fiscal year 1999	3721
all-terms subsidy eligible General Studies FTEs. For the purpose	3722
of these calculations, the average all-terms subsidy eligible	3723
General Studies FTEs for Youngstown State University's eligible	3724
Comm-Tech enrollments shall equal 348.	3725

For the purposes of this calculation, Cleveland State	3726
University's enrollments shall be adjusted by the ratio of the sum	3727
of subsidy-eligible lower-division FTE student enrollments	3728
eligible for access funding to the sum of subsidy-eligible General	3729
Studies FTE student enrollments at Central State University and	3730
Shawnee State University, and for the following universities and	3731
their regional campuses: Ohio State University, Ohio University,	3732
Kent State University, Bowling Green State University, Miami	3733
University, the University of Cincinnati, the University of Akron,	3734
and Wright State University.	3735

SUCCESS CHALLENGE

3736

The foregoing appropriation item 235-420, Success Challenge,	3737
shall be used by the Board of Regents to promote degree	3738
completion by students enrolled at a main campus of a	3739
state-assisted university.	3740

In each fiscal year, two-thirds of the appropriations shall	3741
be distributed to state-assisted university main campuses in	3742
proportion to each campus's share of the total statewide	3743
bachelor's degrees granted by university main campuses to	3744
"at-risk" students. In fiscal years 2002 and 2003, an "at-risk"	3745
student means any undergraduate student who has received an Ohio	3746
Instructional Grant during the past ten years. An eligible	3747
institution shall not receive its share of this distribution until	3748
it has submitted a plan that addresses how the subsidy will be	3749
used to better serve at-risk students and increase their	3750
likelihood of successful completion of a bachelor's degree	3751
program. The Board of Regents shall disseminate to all	3752
state-supported institutions of higher education all such plans	3753
submitted by institutions that received Success Challenge funds.	3754

In each fiscal year, one-third of the appropriations shall be	3755
distributed to university main campuses in proportion to each	3756
campus's share of the total bachelor's degrees granted by	3757
university main campuses to undergraduate students who completed	3758
their bachelor's degrees in a "timely manner" in the previous	3759
fiscal year. For the purposes of this section, "timely manner"	3760
means the normal time it would take for a full-time degree-seeking	3761
undergraduate student to complete the student's degree. Generally,	3762
for such students pursuing a bachelor's degree, "timely manner"	3763
means four years. Exceptions to this general rule shall be	3764
permitted for students enrolled in programs specifically designed	3765
to be completed in a longer time period. The Board of Regents	3766
shall collect base-line data beginning with the 1998-99 academic	3767
year to assess the timely completion statistics by university main	3768
campuses.	3769

EMINENT SCHOLARS

3770

The foregoing appropriation item 235-451, Eminent Scholars,	3771
shall be used by the Ohio Board of Regents to establish an Ohio	3772
Eminent Scholars Program, the purpose of which is to invest	3773
educational resources to address problems that are of vital	3774
statewide significance while fostering the growth in eminence of	3775
Ohio's academic programs. Endowment grants of $750,000 to state	3776
colleges and universities and nonprofit Ohio institutions of	3777
higher education holding certificates of authorization issued	3778
under section 1713.02 of the Revised Code to match endowment gifts	3779
from nonstate sources may be made in accordance with a plan	3780
established by the Ohio Board of Regents. Matching gifts in	3781
science and technology programs shall be $750,000, and in all	3782
other program areas, $500,000. The grants shall have as their	3783
purpose attracting and sustaining in Ohio scholar-leaders of	3784
national or international prominence, each of whom will assist the	3785
state in one of the following three areas: (1) improving the	3786
state's economic development; (2) strengthening the state's	3787
system of K-12 education; or (3) improving public health and	3788
safety. Such scholar-leaders shall, among their duties, share	3789
broadly the benefits and knowledge unique to their fields of	3790
scholarship to the betterment of Ohio and its people.	3791

RESEARCH CHALLENGE

3792

The foregoing appropriation item 235-454, Research Challenge,	3793
shall be used to enhance the basic research capabilities of public	3794
colleges and universities and accredited Ohio institutions of	3795
higher education holding certificates of authorization issued	3796
pursuant to section 1713.02 of the Revised Code, in order to	3797
strengthen academic research for pursuing Ohio's economic	3798
redevelopment goals. The Board of Regents, in consultation with	3799
the colleges and universities, shall administer the Research	3800
Challenge Program and utilize a means of matching, on a fractional	3801
basis, external funds attracted in the previous year by	3802
institutions for basic research. The program may include	3803
incentives for increasing the amount of external research funds	3804
coming to eligible institutions and for focusing research efforts	3805
upon critical state needs. Colleges and universities shall submit	3806
for review and approval to the Board of Regents plans for the	3807
institutional allocation of state dollars received through the	3808
program. The institutional plans shall provide the rationale for	3809
the allocation in terms of the strategic targeting of funds for	3810
academic and state purposes, for strengthening research programs,	3811
and for increasing the amount of external research funds, and	3812
shall include an evaluation process to provide results of the	3813
increased support.	3814

The Board of Regents shall submit a biennial report of	3815
progress to the General Assembly.	3816

COMPUTER SCIENCE GRADUATE EDUCATION

3817

The foregoing appropriation item 235-554, Computer Science	3818
Graduate Education, shall be used by the Board of Regents to	3819
support improvements in graduate programs in computer science at	3820
state-assisted universities. In each fiscal year, up to $200,000	3821
may be used to support collaborative efforts in graduate education	3822
in this program area.	3823

Sec. 94.06. PLEDGE OF FEES*

3824

Any new pledge of fees, or new agreement for adjustment of	3825
fees, made in the 2001-2003 biennium to secure bonds or notes of a	3826
state-assisted institution of higher education for a project for	3827
which bonds or notes were not outstanding on the effective date of	3828
this section shall be effective only after approval by the Board	3829
of Regents, unless approved in a previous biennium.	3830

HIGHER EDUCATION GENERAL OBLIGATION DEBT SERVICE

3831

The foregoing appropriation item 235-909, Higher Education	3832
General Obligation Debt Service, shall be used to pay all debt	3833
service and financing costs at the times they are required to be	3834
made pursuant to sections 151.01 and 151.04 of the Revised Code	3835
during the period from July 1, 2001, to June 30, 2003. The Office	3836
of the Sinking Fund or the Director of Budget and Management shall	3837
effectuate the required payments by an interstate transfer	3838
voucher.	3839

Of the foregoing appropriation item 235-909, Higher Educatoin	3840
General Obligation Debt Service, surplus funds net of encumbrances	3841
from the appropriation for fiscal year 2002 shall be	3842
reappropriated to appropriation item 235-501, State Share of	3843
Instruction, for fiscal year 2003.	3844

LEASE RENTAL PAYMENTS

3845

The foregoing appropriation item 235-401, Lease Rental	3846
Payments, shall be used to meet all payments at the times they are	3847
required to be made during the period from July 1, 2001, to June	3848
30, 2003, by the Board of Regents pursuant to leases and	3849
agreements made under section 154.21 of the Revised Code, but	3850
limited to the aggregate amount of $563,969,000. Nothing in this	3851
actAm. Sub. H.B. 94 of the 124th General Assembly shall be deemed	3852
to contravene the obligation of the state to pay, without	3853
necessity for further appropriation, from the sources pledged	3854
thereto, the bond service charges on obligations issued pursuant	3855
to section 154.21 of the Revised Code.	3856

Of the forgoing appropriation item 235-401, Lease-Rental	3857
Payments, surplus funds net of encumbrances from the appropriation	3858
for fiscal year 2002 shall be reappropriated to appropriation item	3859
235-501, State Share of Instruction, for fiscal year 2003.	3860

Sec. 94.07. OHIO INSTRUCTIONAL GRANTS

3861

Notwithstanding section 3333.12 of the Revised Code, in lieu	3862
of the tables in that section, instructional grants for all	3863
full-time students shall be made for fiscal year 2002 using the	3864
tables under this heading.	3865

The tables under this heading prescribe the maximum grant	3866
amounts covering two semesters, three quarters, or a comparable	3867
portion of one academic year. The grant amount for a full-time	3868
student enrolled in an eligible institution for a semester or	3869
quarter in addition to the portion of the academic year covered by	3870
a grant determined under these tables shall be a percentage of the	3871
maximum prescribed in the applicable table. The maximum grant for	3872
a fourth quarter shall be one-third of the maximum amount	3873
prescribed under the table. The maximum grant for a third semester	3874
shall be one-half of the maximum amount prescribed under the	3875
table.	3876

For a full-time student who is a dependent and enrolled in a	3877
nonprofit educational institution that is not a state-assisted	3878
institution and that has a certificate of authorization issued	3879
pursuant to Chapter 1713. of the Revised Code, the amount of the	3880
instructional grant for two semesters, three quarters, or a	3881
comparable portion of the academic year shall be determined in	3882
accordance with the following table:	3883

Private Institution

3884

Table of Grants

3885

For a full-time student who is financially independent and	3906
enrolled in a nonprofit educational institution that is not a	3907
state-assisted institution and that has a certificate of	3908
authorization issued pursuant to Chapter 1713. of the Revised	3909
Code, the amount of the instructional grant for two semesters,	3910
three quarters, or a comparable portion of the academic year shall	3911
be determined in accordance with the following table:	3912

Private Institution

3913

Table of Grants

3914

For a full-time student who is a dependent and enrolled in an	3936
educational institution that holds a certificate of registration	3937
from the state board of proprietary school registration, the	3938
amount of the instructional grant for two semesters, three	3939
quarters, or a comparable portion of the academic year shall be	3940
determined in accordance with the following table:	3941

Proprietary Institution

3942

Table of Grants

3943

For a full-time student who is financially independent and	3964
enrolled in an educational institution that holds a certificate of	3965
registration from the state board of proprietary school	3966
registration, the amount of the instructional grant for two	3967
semesters, three quarters, or a comparable portion of the academic	3968
year shall be determined in accordance with the following table:	3969

Proprietary Institution

3970

Table of Grants

3971

For a full-time student who is a dependent and enrolled in a	3993
state-assisted educational institution, the amount of the	3994
instructional grant for two semesters, three quarters, or a	3995
comparable portion of the academic year shall be determined in	3996
accordance with the following table:	3997

Public Institution

3998

Table of Grants

3999

For a full-time student who is financially independent and	4020
enrolled in a state-assisted educational institution, the amount	4021
of the instructional grant for two semesters, three quarters, or a	4022
comparable portion of the academic year shall be determined in	4023
accordance with the following table:	4024

Public Institution

4025

Table of Grants

4026

The foregoing appropriation item 235-503, Ohio Instructional	4048
Grants, shall be used to make the payments authorized by division	4049
(C) of section 3333.26 of the Revised Code to the institutions	4050
described in that division. In addition, this appropriation shall	4051
be used to reimburse the institutions described in division (B) of	4052
section 3333.26 of the Revised Code for the cost of the waivers	4053
required by that division.	4054

Of the appropriation item 235-503, Ohio Instructional Grants,	4055
up to $3,800,000 of surplus funds net of encumbrances from the	4056
appropriation for fiscal year 2002 shall be reappropriated to	4057
appropriation item 235-534, Student Workforce Development Grants,	4058
for fiscal year 2003.	4059

WAR ORPHANS SCHOLARSHIPS

4060

The foregoing appropriation item 235-504, War Orphans	4061
Scholarships, shall be used to reimburse state-assisted	4062
institutions of higher education for waivers of instructional fees	4063
and general fees provided by them, to provide grants to	4064
institutions that have received a certificate of authorization	4065
from the Ohio Board of Regents under Chapter 1713. of the Revised	4066
Code, in accordance with the provisions of section 5910.04 of the	4067
Revised Code, and to fund additional scholarship benefits provided	4068
by section 5910.032 of the Revised Code.	4069

PART-TIME STUDENT INSTRUCTIONAL GRANTS

4070

The foregoing appropriation item 235-549, Part-time Student	4071
Instructional Grants, shall be used to support a grant program for	4072
part-time undergraduate students who are Ohio residents and who	4073
are enrolled in degree granting programs.	4074

Eligibility for participation in the program shall include	4075
degree granting educational institutions that hold a certificate	4076
of registration from the State Board of Proprietary School	4077
Registration, and nonprofit institutions that have a certificate	4078
of authorization issued pursuant to Chapter 1713. of the Revised	4079
Code, as well as state-assisted colleges and universities. Grants	4080
shall be given to students on the basis of need, as determined by	4081
the college, which, in making these determinations, shall give	4082
special consideration to single-parent heads-of-household and	4083
displaced homemakers who enroll in an educational degree program	4084
that prepares the individual for a career. In determining need,	4085
the college also shall consider the availability of educational	4086
assistance from a student's employer. It is the intent of the	4087
General Assembly that these grants not supplant such assistance.	4088

Sec. 125. UNCLAIMED FUNDS TRANSERTRANSFER

4089

Notwithstanding division (A) of section 169.05 of the Revised	4090
Code, prior to June 30, 2003, upon the request of the Director of	4091
Budget and Management, the Director of Commerce shall transfer to	4092
the General Revenue Fund up to $30,000,000$80,800,000 of the	4093
unclaimed funds that have been reported by the holder of unclaimed	4094
funds as provided by section 169.05 of the Revised Code,	4095
irrespective of the allocation of the unclaimed funds under that	4096
section.	4097

Sec. 144. TRANSFERS TO THE GENERAL REVENUE FUND

4098

Notwithstanding any other provision of law to the contrary,	4099
including Am. Sub. H.B. 94 and Am. Sub. H.B. 405 of the 124th	4100
General Assembly as subsequently amended, during fiscal years 2002	4101
and 2003, the Director of Budget and Management is hereby	4102
authorized to transfermake such transfers of cash to the General	4103
Revenue Fund from non-federal, non-General Revenue Fund funds that	4104
are not constitutionally restricted to, as are necessary to ensure	4105
that expenditures from the General Revenue Fund do not exceed	4106
amounts credited to it. The Director shall issue any directives to	4107
state agencies that are necessary to accomplish the purposes of	4108
this section. The total amount of cash transfers made pursuant to	4109
this section to the General Revenue Fund during fiscal years 2002	4110
and 2003 shall not exceed $31,794,657."	4111

Section 11. That existing Sections 16, 16.02, 44, 44.19,	4112
63.07, 94, 94.02, 94.06, 94.07, 125, and 144 of Am. Sub. H.B. 94	4113
of the 124th General Assembly are hereby repealed.	4114

Section 12. That Section 13 of Am. Sub. H.B. 94 of the 124th	4115
General Assembly, as amended by Am. Sub. H.B. 524 of the 124th	4116
General Assembly, be amended to read as follows:	4117

"       Sec. 13. DAS DEPARTMENT OF ADMINISTRATIVE SERVICES

4118

General Revenue Fund

4119

General Services Fund Group

4143

Intragovernmental Service Fund Group

4166

Agency Fund Group

4171

Holding Account Redistribution Fund Group

4175

Section 13. That existing Section 13 of Am. Sub. H.B. 94 of	4182
the 124th General Assembly, as amended by Am. Sub. H.B. 524 of the	4183
124th General Assembly, is hereby repealed.	4184

Section 14. That Sections 63 and 63.37 of Am. Sub. H.B. 94 of	4185
the 124th General Assembly, as amended by Am. Sub. H.B. 299 of	4186
the 124th General Assembly, be amended to read as follows:	4187

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

4188

General Revenue Fund

4189

General Services Fund Group

4239

Federal Special Revenue Fund Group

4247

State Special Revenue Fund Group

4277

Agency Fund Group

4304

Holding Account Redistribution Fund Group

4309

Sec. 63.37. NURSING FACILITY STABILIZATION FUND

4316

(A) As used in this section:

4317

(1) "Inpatient days" and "nursing facility" have the same	4318
meanings as in section 5111.20 of the Revised Code.	4319

(2) "Medicaid day" means all days during which a resident	4320
who is a Medicaid recipient occupies a bed in a nursing facility	4321
that is included in the facility's certified capacity under Title	4322
XIX of the "Social Security Act," 79 Stat. 286 (1965), 42 U.S.C.A.	4323
1396, as amended. Therapeutic or hospital leave days for which	4324
payment is made under section 5111.33 of the Revised Code are	4325
considered Medicaid days proportionate to the percentage of the	4326
nursing facility's per resident per day rate paid for those days.	4327

(B) The Department of Job and Family Services shall use	4328
money in the Nursing Facility Stabilization Fund created under	4329
section 3721.56 of the Revised Code to do all of the following:	4330

(1) Make payments to nursing facilities under sections	4331
5111.20 to 5111.32 of the Revised Code;	4332

(2) Beginning with payments made to nursing facilities in	4333
August 2001, make payments to each nursing facility for each	4334
Medicaid day in fiscal years 2002 and 2003 in an amount equal to	4335
sixty-nine and seven-tenths per cent, for fiscal year 2002, and	4336
seventy-six and seventy-four-hundredths per cent, for fiscal year	4337
2003, of the franchise permit fee the nursing facility pays under	4338
section 3721.53 of the Revised Code for the fiscal year the	4339
department makes the payment divided by the nursing facility's	4340
inpatient days for the calendar year preceding the calendar year	4341
in which that fiscal year begins;	4342

(3) Beginning with payments made to nursing facilities in	4343
August 2001, make payments to each nursing facility for fiscal	4344
years 2002 and 2003 in an amount equal to one dollar and fifty	4345
cents per Medicaid day for the purpose of enhancing quality of	4346
care.	4347

(C) Any money remaining in the Nursing Facility	4348
Stabilization Fund after payments specified in division (B) of	4349
this section are made for fiscal years 2002 and 2003 shall be	4350
retained in the fund. Any interest or other investment proceeds	4351
earned on money in the fund shall be credited to the fund and used	4352
to make payments in accordance with division (B) of this section.	4353

(D) Notwithstanding division (N) of section 5111.20 of the	4354
Revised Code, the Department of Job and Family Services, in making	4355
Medicaid payments to a nursing facility under sections 5111.20 to	4356
5111.32 of the Revised Code, shall excludedo both of the	4357
following:	4358

(1) Exclude from a nursing facility's other protected costs	4359
the cost of sixty-nine and seven-tenths per cent of the franchise	4360
permit fee that the nursing facility pays under section 3721.53 of	4361
the Revised Code for fiscal yearsyear 2002 and 2003 if the	4362
nursing facility receives payments under division (B)(2) of this	4363
section for sixty-nine and seven-tenths per cent of those	4364
franchise permit fees;	4365

(2) Exclude from a nursing facility's other protected costs	4366
the cost of seventy-six and seventy-four-hundredths per cent of	4367
the franchise permit fee that the nursing facility pays under	4368
section 3721.53 of the Revised Code for fiscal year 2003 if the	4369
nursing facility receives payments under division (B)(2) of this	4370
section for seventy-six and seventy-four-hundredths per cent of	4371
those franchise permit fees.""	4372

Section 15. That existing Sections 63 and 63.37 of Am. Sub.	4373
H.B. 94 of the 124th General Assembly, as amended by Am. Sub.	4374
H.B. 299 of the 124th General Assembly, are hereby repealed.	4375

Section 16. That Section 29 of Am. Sub. H.B. 405 of the 124th	4376
General Assembly be amended to read as follows:	4377

"       Sec. 29. BUDGET STABILIZATION FUND TRANSFERS

4378

(A) Notwithstanding section 131.43 and division (D) of	4379
section 127.14 of the Revised Code, the Director of Budget and	4380
Management may, with Controlling Board approval, transfer up to	4381
$248 million from the Budget Stabilization Fund to the General	4382
Revenue Fund during the 2002-2003 biennium to help ensure that the	4383
available revenue receipts and balances in the General Revenue	4384
Fund are not less than the appropriations for each fiscal year.	4385

(B) Notwithstanding section 131.43 and division (D) of	4386
section 127.14 of the Revised Code, the Director of Budget and	4387
Management shall transfer, not later than 30 days after the	4388
effective date of this section, $8.0 million from the Budget	4389
Stabilization Fund to the General Revenue Fund. These fundsOf the	4390
amount transferred, $2.0 million shall be used for emergency	4391
purposes, to include, but not be limited to, the Department of	4392
Health and Department of Agriculture for anthrax and bioterrorism	4393
testing, the Adjutant General for costs associated with the	4394
deployment of troops, armory maintenance, equipment costs and	4395
capital needs, the Department of Public Safety, security, and	4396
other emergency purpose expenses. These amounts are hereby	4397
appropriated for General Revenue Fund appropriation line items	4398
established by the Director of Budget and Management.	4399

Prior to utilizing these funds, the appropriate agency must	4400
receive the approval of the Controlling Board. Any of these funds	4401
unspent in fiscal year 2002 shall be transferred to fiscal year	4402
2003 by the Director of Budget and Management for the same purpose	4403
as in fiscal year 2002.	4404

TheOf the $2.0 million transferred for emergency purposes as	4405
specified in this division, the unobligated and unencumbered	4406
balance of these funds as of June 30, 2003, shall be transferred	4407
back to the Budget Stabilization Fund."	4408

Section 17. That existing Section 29 of Am. Sub. H.B. 405 of	4409
the 124th General Assembly is hereby repealed.	4410

Section 18. That Section 31 of Am. Sub. H.B. 405 of the 124th	4411
General Assembly is hereby repealed. This repeal is not subject to	4412
the referendum. Therefore, under Ohio Constitution, Article II,	4413
Section 1d, the repeal goes into immediate effect.	4414

Section 19. In addition to any amounts that have been	4415
authorized for transfer from the Budget Stabilization Fund to the	4416
General Revenue Fund in fiscal year 2002, there is hereby	4417
appropriated in fiscal year 2002 an amount deemed necessary by the	4418
Director of Budget and Management, from the Budget Stabilization	4419
Fund (Fund 013), to appropriation item 001-601, GRF Shortfall	4420
Contingency, for the purpose of overcoming the current shortfall	4421
of revenues to the General Revenue Fund. The Director shall make	4422
disbursements, using an intrastate transfer voucher, from the	4423
foregoing appropriation to the General Revenue Fund, of such	4424
amounts as are necessary to ensure that the unobligated and	4425
unencumbered balance in the General Revenue Fund at the end of	4426
fiscal year 2002 is not more than $100,000,000.	4427

In addition to any amounts that have been authorized for	4428
transfer from the Budget Stabilization Fund to the General Revenue	4429
Fund in fiscal year 2003, there is hereby appropriated in fiscal	4430
year 2003 an amount deemed necessary by the Director of Budget and	4431
Management, from the Budget Stabilization Fund (Fund 013) to	4432
appropriation item 001-601, GRF Shortfall Contingency. The	4433
Director shall make disbursements, using an intrastate transfer	4434
voucher, from the foregoing appropriation to the General Revenue	4435
Fund, of such amounts as are necessary to ensure that the	4436
unobligated and unencumbered balance in the General Revenue Fund	4437
at the end of fiscal year 2003 is not more than $100,000,000.	4438

Section 20. On or before January 1, 2003, the Director of	4439
Budget and Management shall reduce fiscal year 2003 General	4440
Revenue Fund appropriations for the Department of Education by	4441
$30,000,000. The following GRF appropriation items are exempt from	4442
the reduction: 200-406, Head Start; 200-500, School Finance	4443
Equity; 200-501, Base Cost Funding; 200-502, Pupil Transportation;	4444
200-511, Auxillary Services; 200-520, Disadvantaged Pupil Impact	4445
Aid; 200-521, Gifted Pupil Program; 200-525, Parity Aid; 200-532,	4446
Nonpublic Administration Cost Reimbursement; 200-534,	4447
Desegregation Costs; 200-540, Special Education Enhancements;	4448
200-545, Career-Technical Education Enhancements; 200-546,	4449
Charge-Off Supplement; 200-553, County MR/DD Boards Transportation	4450
Operating; 200-901, Property Tax Allocation – Education; and	4451
200-906, Tangible Tax Exemption – Education.	4452

Section 21. Not later than July 10, 2002, the Director of	4453
Budget and Management shall reduce fiscal year 2003 General	4454
Revenue Fund appropriations made to the Department of	4455
Rehabilitation and Correction appropriation item 501-321,	4456
Institutional Operations, by $10,000,000. This appropriations	4457
reduction is in addition to any other General Revenue Fund	4458
appropriations reductions made to the Department of Rehabilitation	4459
and Correction appropriations in fiscal year 2003, including but	4460
not limited to any General Revenue Fund appropriations reductions	4461
imposed by executive order.	4462

Section 22. There is hereby appropriated out of funds made	4463
available to the state under Section 903(d) of the Social Security	4464
Act, as amended, the sum of $51,000,000 to be used under the	4465
direction of the Department of Job and Family Services to pay for	4466
administrative activities for the Unemployment Insurance Program,	4467
employment services, and other allowable expenditures under	4468
Section 903(d) of the Social Security Act, as amended.	4469

The amounts obligated pursuant to this section shall not	4470
exceed at any time the amount by which the aggregate of the	4471
amounts transferred to the account of the state pursuant to	4472
Section 903(d) of the Social Security Act, as amended, exceeds the	4473
aggregate of the amounts obligated for administration and paid out	4474
for benefits and required by law to be charged against the amounts	4475
transferred to the account of the state.	4476

Of the appropriation item 600-678, Federal Unemployment	4477
Programs, in Section 63 of Am. Sub. H.B. 94 of the 124th General	4478
Assembly, as amended, up to $18,000,000 in fiscal year 2003 shall	4479
be used by the Department of Job and Family Services to reimburse	4480
the General Revenue Fund, through state intrastate transfer	4481
vouchers, for expenses incurred on or after the date of enactment	4482
of this section from the General Revenue Fund for the	4483
aforementioned programs as reported to the federal government as	4484
allowable expenditures.	4485

Section 23. All items in this section are hereby appropriated	4486
as designated out of moneys in the state treasury to the credit of	4487
the General Revenue Fund. For all appropriations made in this	4488
section, those in the first column are for fiscal year 2002 and	4489
those in the second column are for fiscal year 2003. The	4490
appropriations made in this section, are in addition to any other	4491
appropriations made for the 2001-2003 biennium.	4492

TAX DEPARTMENT OF TAXATION

4493

General Revenue Fund

4494

AUDIT AND COMPLIANCE DIVISIONS

4498

Of the foregoing appropriation item 110-321, Operating	4499
Expenses, $2,500,000 in fiscal year 2003 shall be used to hire	4500
employees in the Audit Division and the Compliance Division for	4501
the purpose of enhancing enforcement of General Revenue Fund	4502
taxes.	4503

Within the limits set forth in this section, the Director of	4504
Budget and Management shall establish accounts indicating the	4505
source and amount of funds for each appropriation made in this	4506
section, and shall determine the form and manner in which	4507
appropriation accounts shall be maintained. Expenditures from	4508
appropriations contained in this section shall be accounted for as	4509
though made in Am. Sub. H.B. 94 of the 124th General Assembly.	4510

The appropriations made in this section are subject to all	4511
provisions of Am. Sub. H.B. 94 of the 124th General Assembly that	4512
are generally applicable to General Revenue Fund appropriations,	4513
except for the appropriation reduction provision in Section 202 of	4514
that act.	4515

Section 24. There is hereby created the Economic Development	4516
Study Committee consisting of four members appointed by the	4517
President of the Senate and three members appointed by the Speaker	4518
of the House of Representatives. Of the members appointed by the	4519
President, one shall represent retail merchants, one the Ohio	4520
Chamber of Commerce, one the Ohio Manufacturers Association, and	4521
one the Interuniversity Council. Of the members appointed by the	4522
Speaker, one shall represent the Ohio Farm Bureau Federation, one	4523
the labor unions of the state, and one the National Federation of	4524
Independent Businesses. At the first meeting of the committee,	4525
the members shall elect a chairperson and vice chairperson.	4526
Members shall serve without compensation. The committee shall	4527
study the needs of the economy of the state and shall submit a	4528
written report to the President, the Speaker, and the minority	4529
leaders of the House and Senate not later than January 31, 2003.	4530
The report shall address the challenges of the ongoing revenue	4531
shortfall of the state and recommend measures to increase	4532
investment in high technology in the state, encourage economic	4533
growth and the creation of jobs, improve primary, secondary, and	4534
higher education, and achieve other goals important to the	4535
vitality of the state's economy. Upon submitting its report, the	4536
committee shall cease to exist.	4537

Section 25. Notwithstanding section 3702.68 of the Revised	4538
Code, the Director of Health may accept for review under section	4539
3702.52 of the Revised Code an application for a certificate of	4540
need approving the relocation of up to twenty-four existing	4541
nursing home beds in Jackson County to Gallia County.	4542

Section 26. The Ohio Public Facilities Commission, upon	4543
request by the Board of Regents, is hereby authorized to issue and	4544
sell, in accordance with Section 2n of Article VIII, Ohio	4545
Constitution, and sections 151.01 and 151.04 of the Revised Code,	4546
original obligations of the State of Ohio, in an aggregate	4547
principal amount not to exceed $50,000,000. These obligations, in	4548
addition to the original issuance of obligations heretofore	4549
authorized by prior acts of the General Assembly, shall be issued	4550
and sold from time to time and in amounts necessary to ensure	4551
sufficient moneys to the credit of the Higher Education	4552
Improvement Fund (Fund 034) to pay costs charged to that fund	4553
associated with previously authorized capital facilities and the	4554
capital facilities in Section 30 of this act for state-supported	4555
and state-assisted institutions of higher education, as estimated	4556
by the Director of Budget and Management.	4557

Section 27. All items in this section are hereby appropriated	4558
as designated out of moneys in the state treasury to the credit of	4559
the Higher Education Improvement Fund (Fund 034). All	4560
appropriations made in this section are for fiscal years 2003 and	4561
2004. The appropriations made in this section are in addition to	4562
any other capital appropriations made for fiscal years 2003 and	4563
2004.	4564

BOR BOARD OF REGENTS

4566

THIRD FRONTIER PROJECT

4571

The foregoing appropriation item CAP-068, Third Frontier	4572
Project, shall be used to acquire, renovate, or construct	4573
facilities and purchase equipment for research programs technology	4574
development, product development, and commercialization programs	4575
at or involving state-supported and state-assisted institutions of	4576
higher education. The funds shall be used to make grants, awarded	4577
on a competitive basis, and shall be administered by the	4578
Department of Development. Expenditure of these funds shall	4579
comply with Section 2n of Article VIII, Ohio Constitution, and	4580
sections 151.01 and 151.04 of the Revised Code for the period	4581
beginning July 1, 2002, and ending June 30, 2004.	4582

The Department of Development shall develop guidelines	4583
relative to the application for and selection of projects funded	4584
from appropriation item CAP-068, Third Frontier Project. The	4585
guidelines shall be developed in consultation with the Board of	4586
Regents, the Governor's Science and Technology Advisor, and other	4587
interested parties at the discretion of the Department of	4588
Development. The Board of Regents and all state-assisted and	4589
state-supported institutions of higher education shall take all	4590
actions necessary to implement grants awarded by the Department of	4591
Development.	4592

The foregoing capital appropriation item, CAP-068, Third	4593
Frontier Project, for which an appropriation is made from the	4594
Higher Education Improvement Fund (Fund 034) is determined to	4595
consist of capital improvements and capital facilities for	4596
state-supported and state-assisted institutions of higher	4597
education, and is designated for the capital facilities to which	4598
proceeds of obligations in the Higher Education Improvement Fund	4599
(Fund 034) are to be applied.	4600

Within the limits set forth in this section, the Director of	4601
Budget and Management shall establish accounts indicating the	4602
source and amount of funds for each appropriation made in this	4603
section, and shall determine the form and manner in which	4604
appropriation accounts shall be maintained. Expenditures from	4605
appropriations contained in this section shall be accounted for as	4606
though made in the 2002-2004 biennial capital appropriations act	4607
of the 124th General Assembly.	4608

The appropriations made in this section are subject to all	4609
provisions of the 2002-2004 biennial capital appropriations act of	4610
the 124th General Assembly that are generally applicable to such	4611
appropriations.	4612

Section 28. Notwithstanding section 183.02 of the Revised	4613
Code and in addition to any amounts that have been authorized for	4614
transfer from the Tobacco Master Settlement Agreement Fund (Fund	4615
087) to the General Revenue Fund in fiscal year 2002, there is	4616
hereby appropriated in fiscal year 2002, $180,000,000 from the	4617
Tobacco Master Settlement Agreement Fund (Fund 087) to	4618
appropriation item 001-602, GRF Revenue Supplement, for the	4619
purpose of overcoming the current shortfall of revenues to the	4620
General Revenue Fund. The Director shall make disbursements,	4621
using an intrastate transfer voucher, from the foregoing	4622
appropriation to the General Revenue Fund.	4623

Of the tobacco revenue that is credited to the Tobacco Master	4624
Settlement Agreement Fund in fiscal year 2002, the share that is	4625
determined pursuant to section 183.02 of the Revised Code to be	4626
the amount transferred by the Director of Budget and Management	4627
from the Tobacco Master Settlement Agreement Fund to the Education	4628
Facilities Trust Fund (Fund N87) shall be reduced by the amount	4629
that is appropriated from the Tobacco Master Settlement Agreement	4630
Fund to appropriation item 001-602, GRF Revenue Supplement, in	4631
accordance with this section.	4632

Section 29. All items set forth in this section are hereby	4633
appropriated out of any moneys in the state treasury to the credit	4634
of the School Building Program Assistance Fund (Fund 032), created	4635
under section 3318.25 of the Revised Code, derived from the	4636
proceeds of obligations heretofore and herein authorized to pay	4637
the cost of facilities for a system of common schools throughout	4638
the state for the period beginning July 1, 2002, and ending June	4639
30, 2004. The appropriation shall be in addition to any other	4640
appropriation for this purpose.	4641

SCHOOL FACILITIES COMMISSION

4642

SCHOOL BUILDING PROGRAM ASSISTANCE

4646

The foregoing appropriation item CAP-770, School Building	4647
Program Assistance, shall be used by the School Facilities	4648
Commission to provide funding to school districts that receive	4649
conditional approval from the Commission pursuant to Chapter 3318.	4650
of the Revised Code.	4651

Expenditures from appropriations contained in this section	4652
may be accounted for as though made in the main capital	4653
appropriations act for the fiscal year 2003-2004 biennium enacted	4654
by the 124th General Assembly. The School Facilities Commission	4655
shall not commit any of the appropriations made in this section	4656
until after July 1, 2002.	4657

Section 30. The Ohio Public Facilities Commission is hereby	4658
authorized to issue and sell, in accordance with the provisions of	4659
Section 2n of Article VIII, Ohio Constitution, and Chapter 151.	4660
and particularly sections 151.01 and 151.03 of the Revised Code,	4661
original obligations in an aggregate principal amount not to	4662
exceed $180,000,000 to pay the costs associated with previously	4663
authorized capital facilities and the capital facilities	4664
authorized in the immediately preceding section of this act for	4665
the School Building Assistance Program for the School Facilities	4666
Commission to distribute in accordance with their rules and	4667
guidelines pursuant to Chapter 3318. of the Revised Code.	4668

Section 31. The amendment or enactment by this act of	4669
sections 5901.02, 5901.021, and 5901.03 of the Revised Code first	4670
applies to veterans service commission budget requests for the	4671
fiscal year beginning January 1, 2003. Notwithstanding section	4672
5901.11 of the Revised Code to the contrary, if a budget request	4673
for that fiscal year exceeds either of the amounts set forth in	4674
section 5901.021 of the Revised Code as enacted by this act, the	4675
board of county commissioners may exercise the authority granted	4676
under that section with respect to such request regardless of when	4677
the budget request was submitted to the board.	4678

Section 32. Sections 26, 27, 29, 30, and 31 of this act are	4679
subject to the referendum. Therefore, under Ohio Constitution,	4680
Article II, Section 1c and section 1.471 of the Revised Code, the	4681
sections take effect on the ninety-first day after this act is	4682
filed with the Secretary of State. If, however, a referendum	4683
petition is filed against the sections, the sections, unless	4684
rejected at the referendum, take effect at the earliest time	4685
permitted by law.	4686

Section 33. Except as otherwise specifically provided in this	4687
act, the codified and uncodified sections of law amended or	4688
enacted in this act, and the items of law of which the codified	4689
and uncodified sections of law amended or enacted in this act are	4690
composed, are not subject to the referendum. Therefore, under Ohio	4691
Constitution, Article II, Section 1d, the codified and uncodified	4692
sections of law amended or enacted in this act, and the items of	4693
law of which the codified and uncodified sections of law amended	4694
or enacted in this act are composed, except as otherwise	4695
specifically provided in this act, go into immediate effect when	4696
this act becomes law.	4697

Section 34. The repeals by this act of sections 5743.023 and	4698
5743.322 of the Revised Code are not subject to the referendum.	4699
Therefore, under Ohio Constitution, Article II, Section 1d, the	4700
repeals go into effect as prescribed in Section 3 of this act.	4701

Section 35. Sections 173.06, 173.061, 173.062, 173.07,	4702
173.071, 173.072, 5901.02, 5901.021, and 5901.03 of the Revised	4703
Code as amended or enacted by this act, and the items of law of	4704
which such sections as amended or enacted by this act are	4705
composed, are subject to the referendum. Therefore, under Ohio	4706
Constitution, Article II, Section 1c and section 1.471 of the	4707
Revised Code, such sections as amended or enacted by this act, and	4708
the items of law of which such sections as amended or enacted by	4709
this act are composed, take effect on the ninety-first day after	4710
this act is filed with the Secretary of State. If, however, a	4711
referendum petition is filed against any such section as amended	4712
or enacted by this act, or against any item of law of which any	4713
such section as amended or enacted by this act is composed, the	4714
section as amended or enacted, or item of law, unless rejected at	4715
the referendum, takes effect at the earliest time permitted by	4716
law.	4717

Section 36. The amendment of sections 5112.01, 5112.06,	4718
5112.07, and 5112.11 of the Revised Code is not intended to	4719
supersede the earlier repeal, with delayed effective date, of	4720
those sections.	4721