SENATORS Spada, Amstutz, Austria, Carey, Harris

To amend sections 321.45, 323.152, 323.25, 718.01,

1

4503.065, 5705.19, 5709.61, 5709.62, 5709.63,

2

5709.631, 5709.633, 5709.85, 5709.883, 5721.25,

3

5722.01, 5722.02, 5733.05, 5733.33, 5735.01,

4

5747.01, and 5747.03 and to enact sections 5722.21

5

and 5747.013 of the Revised Code and to amend

6

Sections 3.18 and 89.07 of Am. Sub. H.B. 95 of the

7

125th General Assembly to permit counties,

8

municipal corporations, and townships to acquire

9

tax-delinquent land for redevelopment free from

10

liens for the unpaid taxes, to revise municipal

11

taxation of S corporation income, to change the

12

inflation adjustment rounding for homestead

13

exemption tax reductions, to revise the method of

14

computing the sales factor and situsing property

15

to this state under the corporation franchise tax

16

law, to clarify that the sales tax does not apply

17

to public transit buses that seat 10 or fewer

18

persons, to permit persons operating such buses

19

with that seating capacity to apply for motor fuel

20

tax refunds, to extend from 2005 to 2015 the tax

21

credit on the purchase of new manufacturing

22

machinery and equipment, to revise the land

23

reutilization program, to update enterprise zone

24

city and population eligibility criteria, to

25

revise the requirements for redeeming delinquent

26

land after a foreclosure proceeding has been

27

instituted, to permit excess General Revenue Fund

28

moneys to be used to support economic development

29

projects, to require that interest earned on the

30

School District Income Tax Fund be credited to the

31

fund, to make changes to the law regarding the

32

prepayment of real property or manufactured or

33

mobile home taxes, to revise the manner in which

34

the homestead exemption is adjusted for inflation,

35

to limit the Tax Commissioner's authority to

36

enforce certain components of enterprise zone

37

agreements, to revise the information that is

38

required to be in an enterprise zone agreement, to

39

authorize tax incentive review councils to request

40

information from owners of property exempted under

41

urban renewal and community urban redevelopment

42

projects, community reinvestment area programs,

43

enterprise zone agreements, or tax increment

44

financing ordinances or resolutions, to permit

45

subdivisions to specify that revenue from a

46

property tax levied for various police purposes

47

may also be used to pay for police department

48

buildings, to revise the method for computing the

49

property, payroll, and sales factors used in

50

calculating a trust's modified Ohio taxable

51

income, to delay the effective date of new sales

52

tax situsing provisions, to change the recipients

53

of earmarked appropriations to the Air Force

54

Institute of Technology, and to make an

55

appropriation.

56

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

Section 1. That sections 321.45, 323.152, 323.25, 718.01,	57
4503.065, 5705.19, 5709.61, 5709.62, 5709.63, 5709.631, 5709.633,	58
5709.85, 5709.883, 5721.25, 5722.01, 5722.02, 5733.05, 5733.33,	59
5735.01, 5747.01, and 5747.03 be amended and sections 5722.21 and	60
5747.013 of the Revised Code be enacted to read as follows:	61

Sec. 321.45.  (A) As used in this section:

62

(1) "Taxpayer" means any person in whose name a parcel of	63
property or manufactured or mobile home is listed on the tax	64
duplicate or a vendee of such property under a purchase agreement	65
or land contract.	66

(2) "Prepayment" means any amount given to the county	67
treasurer by a taxpayer under this section for the treasurer to	68
apply as payment of the taxpayer's total taxes due in accordance	69
with this section.	70

(3) In the case of a parcel of property or a manufactured or	71
mobile home listed on the real property tax list, "taxes,"	72
"delinquent taxes," and "current taxes" have the same meanings as	73
in section 323.01 of the Revised Code. In the case of a	74
manufactured or mobile home listed on the manufactured home tax	75
list, "taxes" means manufactured home taxes levied pursuant to	76
section 4503.06 of the Revised Code.	77

(4) "Duplicate" means the treasurer's duplicate of real and	78
public utility property and the manufactured home tax list.	79

(B)(1)(a) A county treasurer may enter into a written	80
agreement with any taxpayer for the payment of current taxes, upon	81
mutually agreed on terms and conditions, under which both of the	82
following occur:	83

(i) The taxpayer agrees to tender prepayments of taxes on a	84
parcel of property or a manufactured or mobile home listed on the	85
tax duplicate in the name of the taxpayer;	86

(ii) The treasurer agrees to accept the prepayments and hold	87
them either in an escrow fund or a separate depository account	88
until the last day that an installment of current taxes may be	89
paid without penalty, at which time the treasurer further agrees	90
to apply, toward the payment of the current taxes due on the	91
parcel or the manufactured or mobile home, the amount of the	92
prepayments collected on the parcel or the manufactured or mobile	93
home. If a discount is not given under division (B)(2) of this	94
section, any earnings on prepayments in an escrow fund or	95
depository account shall be paid to the credit of a special	96
interest account to be used by the treasurer only for the payment	97
of the expenses incurred in establishing and administering the	98
system for collecting prepayments under division (B)(1) of this	99
section.	100

(b) A county treasurer and a taxpayer may enter into both a	101
written agreement for the payment of current taxes under division	102
(B)(1)(a) of this section and a written contract for the payment	103
of delinquent taxes under section 323.31 of the Revised Code.	104

(2) In addition to providing for the items enumerated in	105
division (B)(1) of this section, the agreement may provide for the	106
treasurer to invest prepayments held in the escrow fund or	107
depository account, subject to Chapter 135. of the Revised Code,	108
and apply the investment earnings thereon, after deducting an	109
amount to pay the expenses incurred by the treasurer in	110
establishing and administering the prepayment system, as a	111
discount against the total taxes due of each taxpayer entering	112
into such an agreement. The balance applied to the discounts shall	113
be apportioned among taxpayers in such a manner that the discount	114
credited to a taxpayer for each parcel of property or manufactured	115
or mobile home for which taxes are prepaid is commensurate with	116
the amount of current taxes due and, the length of time current	117
taxes are held in escrow, and the expenses incurred by the	118
treasurer to process the prepayments. Discounts accruing to	119
prepayments made for a tax year shall be applied against total	120
taxes due for the ensuing tax year. No discount shall be	121
apportioned to a taxpayer who fails to pay the total taxes due or	122
fails to make prepayments pursuant to the terms of the agreement.	123

(C) A prepayment accepted by a treasurer under an agreement	124
under division (B) of this section does not constitute a payment	125
of taxes until it is applied toward the payment of taxes as	126
provided in this section. A separate prepayment agreement is	127
required for each parcel of property or manufactured or mobile	128
home, except that a taxpayer who makes prepayments on more than	129
one parcel or manufactured or mobile home may enter into a single	130
agreement covering all of the parcels or manufactured or mobile	131
homes. The single agreement shall specify the manner in which each	132
prepayment shall be apportioned among the parcels or manufactured	133
or mobile homes. The treasurer shall keep either a separate record	134
for each parcel or manufactured or mobile home showing the date	135
and amount of each prepayment or a single record for all of the	136
parcels or manufactured or mobile homes owned by a taxpayer	137
showing the date and amount of each prepayment.	138

(D) No treasurer shall fail to apply prepayments toward the	139
payment of taxes as required pursuant to an agreement entered into	140
under division (B) of this section.	141

(E) The treasurer shall give each person who makes a tax	142
prepayment in person at the office of the county treasurer a	143
receipt in the form that the prepayment agreement requires. The	144
treasurer shall give a receipt to a person who makes a tax	145
prepayment to the treasurer by mail only if the taxpayer encloses	146
with the prepayment an addressed envelope with sufficient postage,	147
in which case the treasurer shall insert a receipt for the	148
prepayment in that envelope and deposit it in the mail. The	149
treasurer may refund any amount tendered as a prepayment, if the	150
taxpayer so requests and files with the treasurer an affidavit and	151
the supporting documents the treasurer requires providing that the	152
taxpayer no longer owns the property. The request for the refund	153
shall be made prior to the date of the mailing of a tax bill and	154
escrow statement to the taxpayer. If a taxpayer who has entered	155
into a prepayment agreement pursuant to this section dies before	156
the last day on which an installment of current taxes may be paid	157
without penalty, the treasurer may refund the amount of any	158
prepayments made by that taxpayer to the executor or administrator	159
of the taxpayer's estate.	160

(F) If the treasurer has received any prepayments from a	161
taxpayer, the treasurer shall add to the tax bill required by	162
section 323.13 of the Revised Code a tax escrow statement that	163
shall specify the total amount of prepayments received by the	164
treasurer on or before the date the statement was prepared, the	165
balance of total taxes due for which no prepayment has been	166
received, the amount of any discount to be applied to total taxes	167
due, and the date the statement was prepared.	168

(G) If the total amount of a taxpayer's prepayments to the	169
treasurer made on or before the final date an installment of taxes	170
may be paid without penalty do not equal or exceed the current	171
taxes due on that date, any late penalty or interest due pursuant	172
to section 323.121 of the Revised Code shall be assessed on the	173
balance due after the treasurer has applied the prepayments. If	174
the treasurer fails to apply prepayments received by the	175
treasurer's office in accordance with the terms of an agreement	176
and the total amount of the taxpayer's prepayments equals or	177
exceeds the total taxes due, the taxpayer is relieved of any late	178
penalty or interest imposed under section 323.121 of the Revised	179
Code.	180

(H) The office of the county treasurer shall bear all of the	181
costs of establishing and administering a system for collecting	182
prepayments as permitted by this section.	183

(I) Before the county treasurer commences a prepayment	184
system, the tax commissioner shall approve all procedures and	185
forms to be used in the system.	186

(J) The treasurer may enter into any agreements necessary to	187
enable the taxpayer to make prepayments of taxes to the office of	188
the treasurer through the electronic transfer of funds from an	189
account in the name of the taxpayer at a financial institution, or	190
by credit card.	191

Sec. 323.152.  In addition to the reduction in taxes required	192
under section 319.302 of the Revised Code, taxes shall be reduced	193
as provided in divisions (A) and (B) of this section.	194

(A)(1) Division (A) of this section applies to any of the	195
following:	196

(a) A person who is permanently and totally disabled;

197

(b) A person who is sixty-five years of age or older;

198

(c) A person who is the surviving spouse of a deceased person	199
who was permanently and totally disabled or sixty-five years of	200
age or older and who applied and qualified for a reduction in	201
taxes under this division in the year of death, provided the	202
surviving spouse is at least fifty-nine but not sixty-five or more	203
years of age on the date the deceased spouse dies.	204

(2) Real property taxes on a homestead owned and occupied, or	205
a homestead in a housing cooperative occupied, by a person to whom	206
division (A) of this section applies shall be reduced for each	207
year for which the owner obtains a certificate of reduction from	208
the county auditor under section 323.154 of the Revised Code or	209
for which the occupant obtains a certificate of reduction in	210
accordance with section 323.159 of the Revised Code. The reduction	211
shall equal the amount obtained by multiplying the tax rate for	212
the tax year for which the certificate is issued by the reduction	213
in taxable value shown in the following schedule:	214

(3) Each calendar year, the tax commissioner shall adjust the	221
foregoing schedule by completing the following calculations in	222
September of each year:	223

(a) Determine the percentage increase in the gross domestic	224
product deflator determined by the bureau of economic analysis of	225
the United States department of commerce from the first day of	226
January of the preceding calendar year to the last day of December	227
of the preceding calendar year;	228

(b) Multiply that percentage increase by each of the total	229
income amounts, and by each dollar amount by which taxable value	230
is reduced, for the current tax year;	231

(c) Add the resulting product to each of the total income	232
amounts, and to each of the dollar amounts by which taxable value	233
is reduced, for the current tax year;	234

(d) Round(i) Except as provided in division (A)(3)(d)(ii) of	235
this section, round the resulting sum to the nearest multiple of	236
one hundred dollars;	237

(ii) If rounding the resulting sum to the nearest multiple of	238
one hundred dollars under division (A)(3)(d)(i) of this section	239
does not increase the dollar amounts by which taxable value is	240
reduced, the resulting sum instead shall be rounded to the nearest	241
multiple of ten dollars.	242

The commissioner shall certify the amounts resulting from the	243
adjustment to each county auditor not later than the first day of	244
December each year. The certified amounts apply to the following	245
tax year. The commissioner shall not make the adjustment in any	246
calendar year in which the amounts resulting from the adjustment	247
would be less than the total income amounts, or less than the	248
dollar amounts by which taxable value is reduced, for the current	249
tax year.	250

(B) Real property taxes on any homestead, and manufactured	251
home taxes on any manufactured or mobile home on which a	252
manufactured home tax is assessed pursuant to division (D)(2) of	253
section 4503.06 of the Revised Code, shall be reduced for each	254
year for which the owner obtains a certificate of reduction from	255
the county auditor under section 323.154 of the Revised Code. The	256
amount of the reduction shall equal one-fourth of the amount by	257
which the taxes charged and payable on the homestead or the	258
manufactured or mobile home are reduced for such year under	259
section 319.302 of the Revised Code.	260

(C) The reductions granted by this section do not apply to	261
special assessments or respread of assessments levied against the	262
homestead, and if there is a transfer of ownership subsequent to	263
the filing of an application for a reduction in taxes, such	264
reductions are not forfeited for such year by virtue of such	265
transfer.	266

(D) The reductions in taxable value referred to in this	267
section shall be applied solely as a factor for the purpose of	268
computing the reduction of taxes under this section and shall not	269
affect the total value of property in any subdivision or taxing	270
district as listed and assessed for taxation on the tax lists and	271
duplicates, or any direct or indirect limitations on indebtedness	272
of a subdivision or taxing district. If after application of	273
sections 5705.31 and 5705.32 of the Revised Code, including the	274
allocation of all levies within the ten-mill limitation to debt	275
charges to the extent therein provided, there would be	276
insufficient funds for payment of debt charges not provided for by	277
levies in excess of the ten-mill limitation, the reduction of	278
taxes provided for in sections 323.151 to 323.159 of the Revised	279
Code shall be proportionately adjusted to the extent necessary to	280
provide such funds from levies within the ten-mill limitation.	281

(E) No reduction shall be made on the taxes due on the	282
homestead of any person convicted of violating division (C) or (D)	283
of section 323.153 of the Revised Code for a period of three years	284
following the conviction.	285

Sec. 323.25.  When taxes charged against an entry on the tax	286
duplicate, or any part of such taxes, are not paid within sixty	287
days after delivery of the delinquent land duplicate to the county	288
treasurer as prescribed by section 5721.011 of the Revised Code,	289
the county treasurer shall enforce the lien for such taxes by	290
civil action in the treasurer's official capacity as treasurer,	291
for the sale of such premises, in the court of common pleas of the	292
county in the same way mortgage liens are enforced. IfAfter the	293
civil action has been instituted, but before the filing of an	294
entry of confirmation of sale pursuant to the action, any person	295
entitled to redeem the land may do so by tendering to the county	296
treasurer an amount sufficient, as determined by the court, to pay	297
the taxes, assessments, penalties, interest, and charges then due	298
and unpaid, and the costs incurred in the civil action, and by	299
demonstrating that the property is in compliance with all	300
applicable zoning regulations, land use restrictions, and	301
building, health, and safety codes.	302

If the delinquent land duplicate lists minerals or rights to	303
minerals listed pursuant to sections 5713.04, 5713.05, and 5713.06	304
of the Revised Code, the county treasurer may enforce the lien for	305
taxes against such minerals or rights to minerals by civil action,	306
in the treasurer's official capacity as treasurer, in the manner	307
prescribed by this section, or proceed as provided under section	308
5721.46 of the Revised Code.	309

If service by publication is necessary, such publication	310
shall be made once a week for three consecutive weeks instead of	311
as provided by the Rules of Civil Procedure, and the service shall	312
be complete at the expiration of three weeks after the date of the	313
first publication. If the prosecuting attorney determines that	314
service upon a defendant may be obtained ultimately only by	315
publication, the prosecuting attorney may cause service to be made	316
simultaneously by certified mail, return receipt requested,	317
ordinary mail, and publication. The county treasurer shall not	318
enforce the lien for taxes against real property to which any of	319
the following applies:	320

(A) The real property is the subject of an application for	321
exemption from taxation under section 5715.27 of the Revised Code	322
and does not appear on the delinquent land duplicate;	323

(B) The real property is the subject of a valid delinquent	324
tax contract under section 323.31 of the Revised Code for which	325
the county treasurer has not made certification to the county	326
auditor that the delinquent tax contract has become void in	327
accordance with that section;	328

(C) A tax certificate respecting that property has been sold	329
under section 5721.32 or 5721.33 of the Revised Code; provided,	330
however, that nothing in this division shall prohibit the county	331
treasurer or the county prosecuting attorney from enforcing the	332
lien of the state and its political subdivisions for taxes against	333
a certificate parcel with respect to any or all of such taxes that	334
at the time of enforcement of such lien are not the subject of a	335
tax certificate.	336

Upon application of the plaintiff, the court shall advance	337
such cause on the docket, so that it may be first heard.	338

Sec. 718.01.  (A) As used in this chapter:

339

(1) "Adjusted federal taxable income" means a C corporation's	340
federal taxable income before net operating losses and special	341
deductions as determined under the Internal Revenue Code, adjusted	342
as follows:	343

(a) Deduct intangible income to the extent included in	344
federal taxable income. The deduction shall be allowed regardless	345
of whether the intangible income relates to assets used in a trade	346
or business or assets held for the production of income.	347

(b) Add an amount equal to five per cent of intangible income	348
deducted under division (A)(1)(a) of this section, but excluding	349
that portion of intangible income directly related to the sale,	350
exchange, or other disposition of property described in section	351
1221 of the Internal Revenue Code;	352

(c) Add any losses allowed as a deduction in the computation	353
of federal taxable income if the losses directly relate to the	354
sale, exchange, or other disposition of an asset described in	355
section 1221 or 1231 of the Internal Revenue Code;	356

(d)(i) Except as provided in division (A)(1)(d)(ii) of this	357
section, deduct income and gain included in federal taxable income	358
to the extent the income and gain directly relate to the sale,	359
exchange, or other disposition of an asset described in section	360
1221 or 1231 of the Internal Revenue Code;	361

(ii) Division (A)(1)(d)(i) of this section does not apply to	362
the extent the income or gain is income or gain described in	363
section 1245 or 1250 of the Internal Revenue Code.	364

(e) Add taxes on or measured by net income allowed as a	365
deduction in the computation of federal taxable income;	366

(f) In the case of a real estate investment trust and	367
regulated investment company, add all amounts with respect to	368
dividends to, distributions to, or amounts set aside for or	369
credited to the benefit of investors and allowed as a deduction in	370
the computation of federal taxable income;	371

(g) If the taxpayer is not a C corporation and is not an	372
individual, the taxpayer shall compute adjusted federal taxable	373
income as if the taxpayer were a C corporation, except:	374

(i) Guaranteed payments and other similar amounts paid or	375
accrued to a partner, former partner, member, or former member	376
shall not be allowed as a deductible expense; and	377

(ii) Amounts paid or accrued to a qualified self-employed	378
retirement plan with respect to an owner or owner-employee of the	379
taxpayer, amounts paid or accrued to or for health insurance for	380
an owner or owner-employee, and amounts paid or accrued to or for	381
life insurance for an owner or owner-employee shall not be allowed	382
as a deduction.	383

Nothing in division (A)(1) of this section shall be construed	384
as allowing the taxpayer to add or deduct any amount more than	385
once or shall be construed as allowing any taxpayer to deduct any	386
amount paid to or accrued for purposes of federal self-employment	387
tax.	388

Nothing in this chapter shall be construed as limiting or	389
removing the ability of any municipal corporation to administer,	390
audit, and enforce the provisions of its municipal income tax.	391

(2) "Internal Revenue Code" means the Internal Revenue Code	392
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended.	393

(3) "Schedule C" means internal revenue service schedule C	394
filed by a taxpayer pursuant to the Internal Revenue Code.	395

(4) "Form 2106" means internal revenue service form 2106	396
filed by a taxpayer pursuant to the Internal Revenue Code.	397

(5) "Intangible income" means income of any of the following	398
types: income yield, interest, capital gains, dividends, or other	399
income arising from the ownership, sale, exchange, or other	400
disposition of intangible property including, but not limited to,	401
investments, deposits, money, or credits as those terms are	402
defined in Chapter 5701. of the Revised Code, and patents,	403
copyrights, trademarks, tradenames, investments in real estate	404
investment trusts, investments in regulated investment companies,	405
and appreciation on deferred compensation. "Intangible income"	406
does not include prizes, awards, or other income associated with	407
any lottery winnings or other similar games of chance.	408

(6) "S corporation" means a corporation that has made an	409
election under subchapter S of Chapter 1 of Subtitle A of the	410
Internal Revenue Code for its taxable year.	411

(7) For taxable years beginning on or after January 1, 2004,	412
"net profit" for a taxpayer other than an individual means	413
adjusted federal taxable income and "net profit" for a taxpayer	414
who is an individual means the individual's profit, other than	415
amounts described in division (F) of this section, required to be	416
reported on schedule C, schedule E, or schedule F.	417

(8) "Taxpayer" means a person subject to a tax on income	418
levied by a municipal corporation. "Taxpayer" does not include any	419
person that is a disregarded entity or a qualifying subchapter S	420
subsidiary for federal income tax purposes, but "taxpayer"	421
includes any other person who owns the disregarded entity or	422
qualifying subchapter S subsidiary.	423

(9) "Taxable year" means the corresponding tax reporting	424
period as prescribed for the taxpayer under the Internal Revenue	425
Code.	426

(10) "Tax administrator" means the individual charged with	427
direct responsibility for administration of a tax on income levied	428
by a municipal corporation and includes:	429

(a) The central collection agency and the regional income tax	430
agency and their successors in interest, and other entities	431
organized to perform functions similar to those performed by the	432
central collection agency and the regional income tax agency;	433

(b) A municipal corporation acting as the agent of another	434
municipal corporation; and	435

(c) Persons retained by a municipal corporation to administer	436
a tax levied by the municipal corporation, but only if the	437
municipal corporation does not compensate the person in whole or	438
in part on a contingency basis.	439

(11) "Person" includes individuals, firms, companies,	440
business trusts, estates, trusts, partnerships, limited liability	441
companies, associations, corporations, governmental entities, and	442
any other entity.	443

(12) "Schedule E" means internal revenue service schedule E	444
filed by a taxpayer pursuant to the Internal Revenue Code.	445

(13) "Schedule F" means internal revenue service schedule F	446
filed by a taxpayer pursuant to the Internal Revenue Code.	447

(B) No municipal corporation shall tax income at other than a	448
uniform rate.	449

(C) No municipal corporation shall levy a tax on income at a	450
rate in excess of one per cent without having obtained the	451
approval of the excess by a majority of the electors of the	452
municipality voting on the question at a general, primary, or	453
special election. The legislative authority of the municipal	454
corporation shall file with the board of elections at least	455
seventy-five days before the day of the election a copy of the	456
ordinance together with a resolution specifying the date the	457
election is to be held and directing the board of elections to	458
conduct the election. The ballot shall be in the following form:	459
"Shall the Ordinance providing for a ... per cent levy on income	460
for (Brief description of the purpose of the proposed levy) be	461
passed?	462

463

466

In the event of an affirmative vote, the proceeds of the levy	467
may be used only for the specified purpose.	468

(D)(1) Except as provided in division (E) or (F) of this	469
section, no municipal corporation shall exempt from a tax on	470
income compensation for personal services of individuals over	471
eighteen years of age or the net profit from a business or	472
profession.	473

(2)(a) For taxable years beginning on or after January 1,	474
2004, no municipal corporation shall tax the net profit from a	475
business or profession using any base other than the taxpayer's	476
adjusted federal taxable income.	477

(b) Division (D)(2)(a) of this section does not apply to any	478
taxpayer required to file a return under section 5745.03 of the	479
Revised Code or to the net profit from a sole proprietorship.	480

(E) The legislative authority of a municipal corporation may,	481
by ordinance or resolution, exempt from withholding and from a tax	482
on income the following:	483

(1) Compensation arising from the sale, exchange, or other	484
disposition of a stock option, the exercise of a stock option, or	485
the sale, exchange, or other disposition of stock purchased under	486
a stock option; or	487

(2) Compensation attributable to a nonqualified deferred	488
compensation plan or program described in section 3121(v)(2)(C) of	489
the Internal Revenue Code.	490

If an individual's taxable income includes income against	491
which the taxpayer has taken a deduction for federal income tax	492
purposes as reportable on the taxpayer's form 2106, and against	493
which a like deduction has not been allowed by the municipal	494
corporation, the municipal corporation shall deduct from the	495
taxpayer's taxable income an amount equal to the deduction shown	496
on such form allowable against such income, to the extent not	497
otherwise so allowed as a deduction by the municipal corporation.	498

In the case of a taxpayer who has a net profit from a	499
business or profession that is operated as a sole proprietorship,	500
no municipal corporation may tax or use as the base for	501
determining the amount of the net profit that shall be considered	502
as having a taxable situs in the municipal corporation, an amount	503
other than the net profit required to be reported by the taxpayer	504
on schedule C or F from such sole proprietorship for the taxable	505
year.	506

In the case of a taxpayer who has a net profit from rental	507
activity required to be reported on schedule E, no municipal	508
corporation may tax or use as the base for determining the amount	509
of the net profit that shall be considered as having a taxable	510
situs in the municipal corporation, an amount other than the net	511
profit from rental activities required to be reported by the	512
taxpayer on schedule E for the taxable year.	513

(F) A municipal corporation shall not tax any of the	514
following:	515

(1) The military pay or allowances of members of the armed	516
forces of the United States and of members of their reserve	517
components, including the Ohio national guard;	518

(2) The income of religious, fraternal, charitable,	519
scientific, literary, or educational institutions to the extent	520
that such income is derived from tax-exempt real estate,	521
tax-exempt tangible or intangible property, or tax-exempt	522
activities;	523

(3) Except as otherwise provided in division (G) of this	524
section, intangible income;	525

(4) Compensation paid under section 3501.28 or 3501.36 of the	526
Revised Code to a person serving as a precinct election official,	527
to the extent that such compensation does not exceed one thousand	528
dollars annually. Such compensation in excess of one thousand	529
dollars may be subjected to taxation by a municipal corporation. A	530
municipal corporation shall not require the payer of such	531
compensation to withhold any tax from that compensation.	532

(5) Compensation paid to an employee of a transit authority,	533
regional transit authority, or regional transit commission created	534
under Chapter 306. of the Revised Code for operating a transit bus	535
or other motor vehicle for the authority or commission in or	536
through the municipal corporation, unless the bus or vehicle is	537
operated on a regularly scheduled route, the operator is subject	538
to such a tax by reason of residence or domicile in the municipal	539
corporation, or the headquarters of the authority or commission is	540
located within the municipal corporation;	541

(6) The income of a public utility, when that public utility	542
is subject to the tax levied under section 5727.24 or 5727.30 of	543
the Revised Code, except a municipal corporation may tax the	544
following, subject to Chapter 5745. of the Revised Code:	545

(a) Beginning January 1, 2002, the income of an electric	546
company or combined company;	547

(b) Beginning January 1, 2004, the income of a telephone	548
company.	549

As used in division (F)(6) of this section, "combined	550
company," "electric company," and "telephone company" have the	551
same meanings as in section 5727.01 of the Revised Code.	552

(7) On and after January 1, 2003, items excluded from federal	553
gross income pursuant to section 107 of the Internal Revenue Code;	554

(8) On and after January 1, 2001, compensation paid to a	555
nonresident individual to the extent prohibited under section	556
718.011 of the Revised Code;	557

(9)(a) Except as provided in division (H)(F)(9)(b) and (c) of	558
this section, an S corporation shareholder's distributive share of	559
net profits of the S corporation, other than any part of the	560
distributive share of net profits that represents wages as defined	561
in section 3121(a) of the Internal Revenue Code or net earnings	562
from self-employment as defined in section 1402(a) of the Internal	563
Revenue Code, to the extent such distributive share would not be	564
allocated or apportioned to this state under division (B)(1) and	565
(2) of section 5733.05 of the Revised Code if the S corporation	566
were a corporation subject to the taxes imposed under Chapter	567
5733. of the Revised Code;.	568

(b) If, pursuant to division (H) of former section 718.01 of	569
the Revised Code as it existed before the effective date of the	570
amendment of that section by H.B. 127 of the 125th General	571
Assembly, a majority of the electors of a municipal corporation	572
voted in favor of the question at an election held on November 4,	573
2003, the municipal corporation may continue after 2002 to tax an	574
S corporation shareholder's distributive share of net profits of	575
an S corporation.	576

(c) If, on December 6, 2002, a municipal corporation was	577
imposing, assessing, and collecting a tax on an S corporation	578
shareholder's distributive share of net profits of the S	579
corporation to the extent the distributive share would be	580
allocated or apportioned to this state under divisions (B)(1) and	581
(2) of section 5733.05 of the Revised Code if the S corporation	582
were a corporation subject to taxes imposed under Chapter 5733. of	583
the Revised Code, the municipal corporation may continue to impose	584
the tax on such distributive shares to the extent such shares	585
would be so allocated or apportioned to this state only until	586
December 31, 2004, unless a majority of the electors of the	587
municipal corporation voting on the question of continuing to tax	588
such shares after that date vote in favor of that question at an	589
election held November 2, 2004. If a majority of those electors	590
vote in favor of the question, the municipal corporation may	591
continue after December 31, 2004, to impose the tax on such	592
distributive shares only to the extent such shares would be so	593
allocated or apportioned to this state.	594

(d) For the purposes of division (D) of section 718.14 of the	595
Revised Code, a municipal corporation shall be deemed to have	596
elected to tax S corporation shareholders' distributive shares of	597
net profits of the S corporation in the hands of the shareholders	598
if a majority of the electors of a municipal corporation vote in	599
favor of a question at an election held under division (F)(9)(b)	600
or (c) of this section. The municipal corporation shall specify by	601
ordinance or rule that the tax applies to the distributive share	602
of a shareholder of an S corporation in the hands of the	603
shareholder of the S corporation.	604

(10) Employee compensation that is not "qualifying wages" as	605
defined in section 718.03 of the Revised Code.	606

(G) Any municipal corporation that taxes any type of	607
intangible income on March 29, 1988, pursuant to Section 3 of	608
Amended Substitute Senate Bill No. 238 of the 116th general	609
assembly, may continue to tax that type of income after 1988 if a	610
majority of the electors of the municipal corporation voting on	611
the question of whether to permit the taxation of that type of	612
intangible income after 1988 vote in favor thereof at an election	613
held on November 8, 1988.	614

(H) Any municipal corporation that, on December 6, 2002,	615
taxes an S corporation shareholder's distributive share of net	616
profits of the S corporation to any greater extent than that	617
permitted under division (F)(9) of this section may continue after	618
2002 to tax such distributive shares to such greater extent only	619
if a majority of the electors of the municipal corporation voting	620
on the question of such continuation vote in favor thereof at an	621
election held on November 4, 2003.	622

(I)(H) Nothing in this section or section 718.02 of the	623
Revised Code shall authorize the levy of any tax on income that a	624
municipal corporation is not authorized to levy under existing	625
laws or shall require a municipal corporation to allow a deduction	626
from taxable income for losses incurred from a sole proprietorship	627
or partnership.	628

(J)(I)(1) Nothing in this chapter prohibits a municipal	629
corporation from allowing, by resolution or ordinance, a net	630
operating loss carryforward.	631

(2) Nothing in this chapter requires a municipal corporation	632
to allow a net operating loss carryforward.	633

Sec. 4503.065.  (A) This section applies to any of the	634
following:	635

(1) An individual who is permanently and totally disabled;

636

(2) An individual who is sixty-five years of age or older;

637

(3) An individual who is the surviving spouse of a deceased	638
person who was permanently and totally disabled or sixty-five	639
years of age or older and who applied and qualified for a	640
reduction in assessable value under this section in the year of	641
death, provided the surviving spouse is at least fifty-nine but	642
not sixty-five or more years of age on the date the deceased	643
spouse dies.	644

(B)(1) The manufactured home tax on a manufactured or mobile	645
home that is paid pursuant to division (C) of section 4503.06 of	646
the Revised Code and that is owned and occupied as a home by an	647
individual whose domicile is in this state and to whom this	648
section applies, shall be reduced for any tax year for which the	649
owner obtains a certificate of reduction from the county auditor	650
under section 4503.067 of the Revised Code, provided the	651
individual did not acquire ownership from a person, other than the	652
individual's spouse, related by consanguinity or affinity for the	653
purpose of qualifying for the reduction in assessable value. An	654
owner includes a settlor of a revocable inter vivos trust holding	655
the title to a manufactured or mobile home occupied by the settlor	656
as of right under the trust. The reduction shall equal the amount	657
obtained by multiplying the tax rate for the tax year for which	658
the certificate is issued by the reduction in assessable value	659
shown in the following schedule.	660

(2) Each calendar year, the tax commissioner shall adjust the	668
foregoing schedule by completing the following calculations in	669
September of each year:	670

(a) Determine the percentage increase in the gross domestic	671
product deflator determined by the bureau of economic analysis of	672
the United States department of commerce from the first day of	673
January of the preceding calendar year to the last day of December	674
of the preceding calendar year;	675

(b) Multiply that percentage increase by each of the total	676
income amounts, and by each dollar amount by which assessable	677
value is reduced, for the ensuing tax year;	678

(c) Add the resulting product to each of the total income	679
amounts, and to each of the dollar amounts by which assessable	680
value is reduced, for the ensuing tax year;	681

(d) Round(i) Except as provided in division (B)(2)(d)(ii) of	682
this section, round the resulting sum to the nearest multiple of	683
one hundred dollars;	684

(ii) If rounding the resulting sum to the nearest multiple of	685
one hundred dollars under division (B)(2)(d)(i) of this section	686
does not increase the dollar amounts by which assessable value is	687
reduced, the resulting sum instead shall be rounded to the nearest	688
multiple of ten dollars.	689

The commissioner shall certify the amounts resulting from the	690
adjustment to each county auditor not later than the first day of	691
December each year. The certified amounts apply to the second	692
ensuing tax year. The commissioner shall not make the adjustment	693
in any calendar year in which the amounts resulting from the	694
adjustment would be less than the total income amounts, or less	695
than the dollar amounts by which assessable value is reduced, for	696
the ensuing tax year.	697

(C) If the owner or the spouse of the owner of a manufactured	698
or mobile home is eligible for a homestead exemption on the land	699
upon which the home is located, the reduction in assessable value	700
to which the owner or spouse is entitled under this section shall	701
not exceed the difference between the reduction in assessable	702
value to which the owner or spouse is entitled under column A of	703
the above schedule and the amount of the reduction in taxable	704
value that was used to compute the homestead exemption.	705

(D) No reduction shall be made on the assessable value of the	706
home of any person convicted of violating division (C) or (D) of	707
section 4503.066 of the Revised Code for a period of three years	708
following the conviction.	709

Sec. 5705.19.  This section does not apply to school	710
districts or county school financing districts.	711

The taxing authority of any subdivision at any time and in	712
any year, by vote of two-thirds of all the members of the taxing	713
authority, may declare by resolution and certify the resolution to	714
the board of elections not less than seventy-five days before the	715
election upon which it will be voted that the amount of taxes that	716
may be raised within the ten-mill limitation will be insufficient	717
to provide for the necessary requirements of the subdivision and	718
that it is necessary to levy a tax in excess of that limitation	719
for any of the following purposes:	720

(A) For current expenses of the subdivision, except that the	721
total levy for current expenses of a detention facility district	722
or district organized under section 2151.65 of the Revised Code	723
shall not exceed two mills and that the total levy for current	724
expenses of a combined district organized under sections 2152.41	725
2151.65 and 2151.652152.41 of the Revised Code shall not exceed	726
four mills;	727

(B) For the payment of debt charges on certain described	728
bonds, notes, or certificates of indebtedness of the subdivision	729
issued subsequent to January 1, 1925;	730

(C) For the debt charges on all bonds, notes, and	731
certificates of indebtedness issued and authorized to be issued	732
prior to January 1, 1925;	733

(D) For a public library of, or supported by, the subdivision	734
under whatever law organized or authorized to be supported;	735

(E) For a municipal university, not to exceed two mills over	736
the limitation of one mill prescribed in section 3349.13 of the	737
Revised Code;	738

(F) For the construction or acquisition of any specific	739
permanent improvement or class of improvements that the taxing	740
authority of the subdivision may include in a single bond issue;	741

(G) For the general construction, reconstruction,	742
resurfacing, and repair of streets, roads, and bridges in	743
municipal corporations, counties, or townships;	744

(H) For parks and recreational purposes;

745

(I) For the purpose of providing and maintaining fire	746
apparatus, appliances, buildings, or sites therefor, or sources of	747
water supply and materials therefor, or the establishment and	748
maintenance of lines of fire alarm telegraph, or the payment of	749
permanent, part-time, or volunteer firefighters or firefighting	750
companies to operate the same, including the payment of the	751
firefighter employers' contribution required under section 742.34	752
of the Revised Code, or the purchase of ambulance equipment, or	753
the provision of ambulance, paramedic, or other emergency medical	754
services operated by a fire department or firefighting company;	755

(J) For the purpose of providing and maintaining motor	756
vehicles, communications, and other equipment, buildings, and	757
sites for such buildings used directly in the operation of a	758
police department, or the payment of salaries of permanent police	759
personnel, including the payment of the police officer employers'	760
contribution required under section 742.33 of the Revised Code, or	761
the payment of the costs incurred by townships as a result of	762
contracts made with other political subdivisions in order to	763
obtain police protection, or the provision of ambulance or	764
emergency medical services operated by a police department;	765

(K) For the maintenance and operation of a county home or	766
detention facility;	767

(L) For community mental retardation and developmental	768
disabilities programs and services pursuant to Chapter 5126. of	769
the Revised Code, except that the procedure for such levies shall	770
be as provided in section 5705.222 of the Revised Code;	771

(M) For regional planning;

772

(N) For a county's share of the cost of maintaining and	773
operating schools, district detention facilities, forestry camps,	774
or other facilities, or any combination thereof, established under	775
section 2152.412151.65 or 2151.652152.41 of the Revised Code or	776
both of those sections;	777

(O) For providing for flood defense, providing and	778
maintaining a flood wall or pumps, and other purposes to prevent	779
floods;	780

(P) For maintaining and operating sewage disposal plants and	781
facilities;	782

(Q) For the purpose of purchasing, acquiring, constructing,	783
enlarging, improving, equipping, repairing, maintaining, or	784
operating, or any combination of the foregoing, a county transit	785
system pursuant to sections 306.01 to 306.13 of the Revised Code,	786
or of making any payment to a board of county commissioners	787
operating a transit system or a county transit board pursuant to	788
section 306.06 of the Revised Code;	789

(R) For the subdivision's share of the cost of acquiring or	790
constructing any schools, forestry camps, detention facilities, or	791
other facilities, or any combination thereof, under section	792
2152.412151.65 or 2151.652152.41 of the Revised Code or both of	793
those sections;	794

(S) For the prevention, control, and abatement of air	795
pollution;	796

(T) For maintaining and operating cemeteries;

797

(U) For providing ambulance service, emergency medical	798
service, or both;	799

(V) For providing for the collection and disposal of garbage	800
or refuse, including yard waste;	801

(W) For the payment of the police officer employers'	802
contribution or the firefighter employers' contribution required	803
under sections 742.33 and 742.34 of the Revised Code;	804

(X) For the construction and maintenance of a drainage	805
improvement pursuant to section 6131.52 of the Revised Code;	806

(Y) For providing or maintaining senior citizens services or	807
facilities as authorized by section 307.694, 307.85, 505.70, or	808
505.706 or division (EE) of section 717.01 of the Revised Code;	809

(Z) For the provision and maintenance of zoological park	810
services and facilities as authorized under section 307.76 of the	811
Revised Code;	812

(AA) For the maintenance and operation of a free public	813
museum of art, science, or history;	814

(BB) For the establishment and operation of a 9-1-1 system,	815
as defined in section 4931.40 of the Revised Code;	816

(CC) For the purpose of acquiring, rehabilitating, or	817
developing rail property or rail service. As used in this	818
division, "rail property" and "rail service" have the same	819
meanings as in section 4981.01 of the Revised Code. This division	820
applies only to a county, township, or municipal corporation.	821

(DD) For the purpose of acquiring property for, constructing,	822
operating, and maintaining community centers as provided for in	823
section 755.16 of the Revised Code;	824

(EE) For the creation and operation of an office or joint	825
office of economic development, for any economic development	826
purpose of the office, and to otherwise provide for the	827
establishment and operation of a program of economic development	828
pursuant to sections 307.07 and 307.64 of the Revised Code;	829

(FF) For the purpose of acquiring, establishing,	830
constructing, improving, equipping, maintaining, or operating, or	831
any combination of the foregoing, a township airport, landing	832
field, or other air navigation facility pursuant to section 505.15	833
of the Revised Code;	834

(GG) For the payment of costs incurred by a township as a	835
result of a contract made with a county pursuant to section	836
505.263 of the Revised Code in order to pay all or any part of the	837
cost of constructing, maintaining, repairing, or operating a water	838
supply improvement;	839

(HH) For a board of township trustees to acquire, other than	840
by appropriation, an ownership interest in land, water, or	841
wetlands, or to restore or maintain land, water, or wetlands in	842
which the board has an ownership interest, not for purposes of	843
recreation, but for the purposes of protecting and preserving the	844
natural, scenic, open, or wooded condition of the land, water, or	845
wetlands against modification or encroachment resulting from	846
occupation, development, or other use, which may be styled as	847
protecting or preserving "greenspace" in the resolution, notice of	848
election, or ballot form;	849

(II) For the support by a county of a crime victim assistance	850
program that is provided and maintained by a county agency or a	851
private, nonprofit corporation or association under section 307.62	852
of the Revised Code;	853

(JJ) For any or all of the purposes set forth in divisions	854
(I) and (J) of this section. This division applies only to a	855
township.	856

(KK) For a countywide public safety communications system	857
under section 307.63 of the Revised Code. This division applies	858
only to counties.	859

(LL) For the support by a county of criminal justice services	860
under section 307.45 of the Revised Code;	861

(MM) For the purpose of maintaining and operating a jail or	862
other detention facility as defined in section 2921.01 of the	863
Revised Code;	864

(NN) For purchasing, maintaining, or improving, or any	865
combination of the foregoing, real estate on which to hold	866
agricultural fairs. This division applies only to a county.	867

(OO) For constructing, rehabilitating, repairing, or	868
maintaining sidewalks, walkways, trails, bicycle pathways, or	869
similar improvements, or acquiring ownership interests in land	870
necessary for the foregoing improvements;	871

(PP) For both of the purposes set forth in divisions (G) and	872
(OO) of this section.	873

(QQ) For both of the purposes set forth in divisions (H) and	874
(HH) of this section. This division applies only to a township.	875

(RR) For the legislative authority of a municipal	876
corporation, board of county commissioners of a county, or board	877
of township trustees of a township to acquire agricultural	878
easements, as defined in section 5301.67 of the Revised Code, and	879
to supervise and enforce the easements.	880

(SS) For both of the purposes set forth in divisions (BB) and	881
(KK) of this section. This division applies only to a county.	882

The resolution shall be confined to the purpose or purposes	883
described in one division of this section, to which the revenue	884
derived therefrom shall be applied. The existence in any other	885
division of this section of authority to levy a tax for any part	886
or all of the same purpose or purposes does not preclude the use	887
of such revenues for any part of the purpose or purposes of the	888
division under which the resolution is adopted.	889

The resolution shall specify the amount of the increase in	890
rate that it is necessary to levy, the purpose of that increase in	891
rate, and the number of years during which the increase in rate	892
shall be in effect, which may or may not include a levy upon the	893
duplicate of the current year. The number of years may be any	894
number not exceeding five, except as follows:	895

(1) When the additional rate is for the payment of debt	896
charges, the increased rate shall be for the life of the	897
indebtedness.	898

(2) When the additional rate is for any of the following, the	899
increased rate shall be for a continuing period of time:	900

(a) For the current expenses for a detention facility	901
district, a district organized under section 2151.65 of the	902
Revised Code, or a combined district organized under sections	903
2152.412151.65 and 2151.652152.41 of the Revised Code;	904

(b) For providing a county's share of the cost of maintaining	905
and operating schools, district detention facilities, forestry	906
camps, or other facilities, or any combination thereof,	907
established under section 2152.412151.65 or 2151.652152.41 of	908
the Revised Code or under both of those sections.	909

(3) When the additional rate is for either of the following,	910
the increased rate may be for a continuing period of time:	911

(a) For the purposes set forth in division (I), (J), (U), or	912
(KK) of this section;	913

(b) For the maintenance and operation of a joint recreation	914
district.	915

(4) When the increase is for the purpose or purposes set	916
forth in division (D), (G), (H), (CC), or (PP) of this section,	917
the tax levy may be for any specified number of years or for a	918
continuing period of time, as set forth in the resolution.	919

(5) When the additional rate is for the purpose described in	920
division (Z) of this section, the increased rate shall be for any	921
number of years not exceeding ten.	922

A levy for one of the purposes set forth in division (G),	923
(I), (J), or (U) of this section may be reduced pursuant to	924
section 5705.261 or 5705.31 of the Revised Code. A levy for one of	925
the purposes set forth in division (G), (I), (J), or (U) of this	926
section may also be terminated or permanently reduced by the	927
taxing authority if it adopts a resolution stating that the	928
continuance of the levy is unnecessary and the levy shall be	929
terminated or that the millage is excessive and the levy shall be	930
decreased by a designated amount.	931

A resolution of a detention facility district, a district	932
organized under section 2151.65 of the Revised Code, or a combined	933
district organized under both sections 2152.412151.65 and 2151.65	934
2152.41 of the Revised Code may include both current expenses and	935
other purposes, provided that the resolution shall apportion the	936
annual rate of levy between the current expenses and the other	937
purpose or purposes. The apportionment need not be the same for	938
each year of the levy, but the respective portions of the rate	939
actually levied each year for the current expenses and the other	940
purpose or purposes shall be limited by the apportionment.	941

Whenever a board of county commissioners, acting either as	942
the taxing authority of its county or as the taxing authority of a	943
sewer district or subdistrict created under Chapter 6117. of the	944
Revised Code, by resolution declares it necessary to levy a tax in	945
excess of the ten-mill limitation for the purpose of constructing,	946
improving, or extending sewage disposal plants or sewage systems,	947
the tax may be in effect for any number of years not exceeding	948
twenty, and the proceeds of the tax, notwithstanding the general	949
provisions of this section, may be used to pay debt charges on any	950
obligations issued and outstanding on behalf of the subdivision	951
for the purposes enumerated in this paragraph, provided that any	952
such obligations have been specifically described in the	953
resolution.	954

The resolution shall go into immediate effect upon its	955
passage, and no publication of the resolution is necessary other	956
than that provided for in the notice of election.	957

When the electors of a subdivision have approved a tax levy	958
under this section, the taxing authority of the subdivision may	959
anticipate a fraction of the proceeds of the levy and issue	960
anticipation notes in accordance with section 5705.191 or 5705.193	961
of the Revised Code.	962

Sec. 5709.61.  As used in sections 5709.61 to 5709.69 of the	963
Revised Code:	964

(A) "Enterprise zone" or "zone" means any of the following:

965

(1) An area with a single continuous boundary designated in	966
the manner set forth in section 5709.62 or 5709.63 of the Revised	967
Code and certified by the director of development as having a	968
population of at least four thousand according to the best and	969
most recent data available to the director and having at least two	970
of the following characteristics:	971

(a) It is located in a municipal corporation defined by the	972
United States office of management and budget as a central	973
principal city of a metropolitan statistical area or in a city	974
designated as an urban cluster in a rural statistical area;	975

(b) It is located in a county designated as being in the	976
"Appalachian region" under the "Appalachian Regional Development	977
Act of 1965," 79 Stat. 5, 40 App. U.S.C.A. 403, as amended;	978

(c) Its average rate of unemployment, during the most recent	979
twelve-month period for which data are available, is equal to at	980
least one hundred twenty-five per cent of the average rate of	981
unemployment for the state of Ohio for the same period;	982

(d) There is a prevalence of commercial or industrial	983
structures in the area that are vacant or demolished, or are	984
vacant and the taxes charged thereon are delinquent, and	985
certification of the area as an enterprise zone would likely	986
result in the reduction of the rate of vacant or demolished	987
structures or the rate of tax delinquency in the area;	988

(e) The population of all census tracts in the area,	989
according to the federal census of 19902000, decreased by at	990
least ten per cent between the years 19701980 and 19902000;	991

(f) At least fifty-one per cent of the residents of the area	992
have incomes of less than eighty per cent of the median income of	993
residents of the municipal corporation or municipal corporations	994
in which the area is located, as determined in the same manner	995
specified under section 119(b) of the "Housing and Community	996
Development Act of 1974," 88 Stat. 633, 42 U.S.C. 5318, as	997
amended;	998

(g) The area contains structures previously used for	999
industrial purposes, but currently not so used due to age,	1000
obsolescence, deterioration, relocation of the former occupant's	1001
operations, or cessation of operations resulting from unfavorable	1002
economic conditions either generally or in a specific economic	1003
sector;	1004

(h) It is located within one or more adjacent city, local, or	1005
exempted village school districts, the income-weighted tax	1006
capacity of each of which is less than seventy per cent of the	1007
average of the income-weighted tax capacity of all city, local, or	1008
exempted village school districts in the state according to the	1009
most recent data available to the director from the department of	1010
taxation.	1011

The director of development shall adopt rules in accordance	1012
with Chapter 119. of the Revised Code establishing conditions	1013
constituting the characteristics described in divisions (A)(1)(d),	1014
(g), and (h) of this section.	1015

If an area could not be certified as an enterprise zone	1016
unless it satisfied division (A)(1)(g) of this section, the	1017
legislative authority may enter into agreements in that zone under	1018
section 5709.62, 5709.63, or 5709.632 of the Revised Code only if	1019
such agreements result in the development of the facilities	1020
described in that division, the parcel of land on which such	1021
facilities are situated, or adjacent parcels. The director of	1022
development annually shall review all agreements in such zones to	1023
determine whether the agreements have resulted in such	1024
development; if the director determines that the agreements have	1025
not resulted in such development, the director immediately shall	1026
revoke certification of the zone and notify the legislative	1027
authority of such revocation. Any agreements entered into prior to	1028
revocation under this paragraph shall continue in effect for the	1029
period provided in the agreement.	1030

(2) An area with a single continuous boundary designated in	1031
the manner set forth in section 5709.63 of the Revised Code and	1032
certified by the director of development as:	1033

(a) Being located within a county that contains a population	1034
of three hundred thousand or less;	1035

(b) Having a population of at least one thousand according to	1036
the best and most recent data available to the director;	1037

(c) Having at least two of the characteristics described in	1038
divisions (A)(1)(b) to (h) of this section.	1039

(3) An area with a single continuous boundary designated in	1040
the manner set forth under division (A)(1) of section 5709.632 of	1041
the Revised Code and certified by the director of development as	1042
having a population of at least four thousand, or under division	1043
(A)(2) of that section and certified as having a population of at	1044
least one thousand, according to the best and most recent data	1045
available to the director.	1046

(B) "Enterprise" means any form of business organization	1047
including, but not limited to, any partnership, sole	1048
proprietorship, or corporation, including an S corporation as	1049
defined in section 1361 of the Internal Revenue Code and any	1050
corporation that is majority work-owned either directly through	1051
the ownership of stock or indirectly through participation in an	1052
employee stock ownership plan.	1053

(C) "Facility" means an enterprise's place of business in a	1054
zone, including land, buildings, machinery, equipment, and other	1055
materials, except inventory, used in business. "Facility" includes	1056
land, buildings, machinery, production and station equipment,	1057
other equipment, and other materials, except inventory, used in	1058
business to generate electricity, provided that, for purposes of	1059
sections 5709.61 to 5709.69 of the Revised Code, the value of the	1060
property at such a facility shall be reduced by the value, if any,	1061
that is not apportioned under section 5727.15 of the Revised Code	1062
to the taxing district in which the facility is physically	1063
located. In the case of such a facility that is physically located	1064
in two adjacent taxing districts, the property located in each	1065
taxing district constitutes a separate facility.	1066

"Facility" does not include any portion of an enterprise's	1067
place of business used primarily for making retail sales, unless	1068
the place of business is located in an impacted city as defined in	1069
section 1728.01 of the Revised Code.	1070

(D) "Vacant facility" means a facility that has been vacant	1071
for at least ninety days immediately preceding the date on which	1072
an agreement is entered into under section 5709.62 or 5709.63 of	1073
the Revised Code.	1074

(E) "Expand" means to make expenditures to add land,	1075
buildings, machinery, equipment, or other materials, except	1076
inventory, to a facility that equal at least ten per cent of the	1077
market value of the facility prior to such expenditures, as	1078
determined for the purposes of local property taxation.	1079

(F) "Renovate" means to make expenditures to alter or repair	1080
a facility that equal at least fifty per cent of the market value	1081
of the facility prior to such expenditures, as determined for the	1082
purposes of local property taxation.	1083

(G) "Occupy" means to make expenditures to alter or repair a	1084
vacant facility equal to at least twenty per cent of the market	1085
value of the facility prior to such expenditures, as determined	1086
for the purposes of local property taxation.	1087

(H) "Project site" means all or any part of a facility that	1088
is newly constructed, expanded, renovated, or occupied by an	1089
enterprise.	1090

(I) "Project" means any undertaking by an enterprise to	1091
establish a facility or to improve a project site by expansion,	1092
renovation, or occupancy.	1093

(J) "Position" means the position of one full-time employee	1094
performing a particular set of tasks and duties.	1095

(K) "Full-time employee" means an individual who is employed	1096
for consideration by an enterprise for at least thirty-five hours	1097
a week, or who renders any other standard of service generally	1098
accepted by custom or specified by contract as full-time	1099
employment.	1100

(L) "New employee" means a full-time employee first employed	1101
by an enterprise at a facility that is a project site after the	1102
enterprise enters an agreement under section 5709.62 or 5709.63 of	1103
the Revised Code. "New employee" does not include an employee if,	1104
immediately prior to being employed by the enterprise, the	1105
employee was employed by an enterprise that is a related member or	1106
predecessor enterprise of that enterprise.	1107

(M) "Unemployed person" means any person who is totally	1108
unemployed in this state, as that term is defined in division (M)	1109
of section 4141.01 of the Revised Code, for at least ten	1110
consecutive weeks immediately preceding that person's employment	1111
at a facility that is a project site, or who is so unemployed for	1112
at least twenty-six of the fifty-two weeks immediately preceding	1113
that person's employment at such a facility.	1114

(N) "JTPA eligible employee" means any individual who is	1115
eligible for employment or training under the "Job Training	1116
Partnership Act," 96 Stat. 1324 (1982), 29 U.S.C. 1501, as	1117
amended.	1118

(O) "First used in business" means that the property referred	1119
to has not been used in business in this state by the enterprise	1120
that owns it, or by an enterprise that is a related member or	1121
predecessor enterprise of such an enterprise, other than as	1122
inventory, prior to being used in business at a facility as the	1123
result of a project.	1124

(P) "Training program" means any noncredit training program	1125
or course of study that is offered by any state college or	1126
university; university branch district; community college;	1127
technical college; nonprofit college or university certified under	1128
section 1713.02 of the Revised Code; school district; joint	1129
vocational school district; school registered and authorized to	1130
offer programs under section 3332.05 of the Revised Code; an	1131
entity administering any federal, state, or local adult education	1132
and training program; or any enterprise; and that meets all of the	1133
following requirements:	1134

(1) It is approved by the director of development;

1135

(2) It is established or operated to satisfy the need of a	1136
particular industry or enterprise for skilled or semi-skilled	1137
employees;	1138

(3) An individual is required to complete the course or	1139
program before filling a position at a project site.	1140

(Q) "Development" means to engage in the process of clearing	1141
and grading land, making, installing, or constructing water	1142
distribution systems, sewers, sewage collection systems, steam,	1143
gas, and electric lines, roads, curbs, gutters, sidewalks, storm	1144
drainage facilities, and construction of other facilities or	1145
buildings equal to at least fifty per cent of the market value of	1146
the facility prior to the expenditures, as determined for the	1147
purposes of local property taxation.	1148

(R) "Large manufacturing facility" means a single Ohio	1149
facility that employed an average of at least one thousand	1150
individuals during the five calendar years preceding an agreement	1151
authorized under division (C)(3) of section 5709.62 or division	1152
(B)(2) of section 5709.63 of the Revised Code. For purposes of	1153
this division, both of the following apply:	1154

(1) A single Ohio manufacturing facility employed an average	1155
of at least one thousand individuals during the five calendar	1156
years preceding entering into such an agreement if one-fifth of	1157
the sum of the number of employees employed on the highest	1158
employment day during each of the five calendar years equals or	1159
exceeds one thousand.	1160

(2) The highest employment day is the day or days during a	1161
calendar year on which the number of employees employed at a	1162
single Ohio manufacturing facility was greater than on any other	1163
day during the calendar year.	1164

(S) "Business cycle" means the cycle of business activity	1165
usually regarded as passing through alternating stages of	1166
prosperity and depression.	1167

(T) "Making retail sales" means the effecting of	1168
point-of-final-purchase transactions at a facility open to the	1169
consuming public, wherein one party is obligated to pay the price	1170
and the other party is obligated to provide a service or to	1171
transfer title to or possession of the item sold.	1172

(U) "Environmentally contaminated" means that hazardous	1173
substances exist at a facility under conditions that have caused	1174
or would cause the facility to be identified as contaminated by	1175
the state or federal environmental protection agency. These may	1176
include facilities located at sites identified in the master sites	1177
list or similar database maintained by the state environmental	1178
protection agency if the sites have been investigated by the	1179
agency and found to be contaminated.	1180

(V) "Remediate" means to make expenditures to clean up an	1181
environmentally contaminated facility so that it is no longer	1182
environmentally contaminated that equal at least ten per cent of	1183
the real property market value of the facility prior to such	1184
expenditures as determined for the purposes of property taxation.	1185

(W) "Related member" has the same meaning as defined in	1186
section 5733.042 of the Revised Code without regard to division	1187
(B) of that section, except that it is used with respect to an	1188
enterprise rather than a taxpayer.	1189

(X) "Predecessor enterprise" means an enterprise from which	1190
the assets or equity of another enterprise has been transferred,	1191
which transfer resulted in the full or partial nonrecognition of	1192
gain or loss, or resulted in a carryover basis, both as determined	1193
by rule adopted by the tax commissioner.	1194

(Y) "Successor enterprise" means an enterprise to which the	1195
assets or equity of another enterprise has been transferred, which	1196
transfer resulted in the full or partial nonrecognition of gain or	1197
loss, or resulted in a carryover basis, both as determined by rule	1198
adopted by the tax commissioner.	1199

Sec. 5709.62.  (A) In any municipal corporation that is	1200
defined by the United States office of management and budget as a	1201
central city of a metropolitan statistical area, or in a city	1202
designated as an urban cluster in a rural statistical area, the	1203
legislative authority of the municipal corporation may designate	1204
one or more areas within its municipal corporation as proposed	1205
enterprise zones. Upon designating an area, the legislative	1206
authority shall petition the director of development for	1207
certification of the area as having the characteristics set forth	1208
in division (A)(1) of section 5709.61 of the Revised Code as	1209
amended by Substitute Senate Bill No. 19 of the 120th general	1210
assembly. Except as otherwise provided in division (E) of this	1211
section, on and after July 1, 1994, legislative authorities shall	1212
not enter into agreements under this section unless the	1213
legislative authority has petitioned the director and the director	1214
has certified the zone under this section as amended by that act;	1215
however, all agreements entered into under this section as it	1216
existed prior to July 1, 1994, and the incentives granted under	1217
those agreements shall remain in effect for the period agreed to	1218
under those agreements. Within sixty days after receiving such a	1219
petition, the director shall determine whether the area has the	1220
characteristics set forth in division (A)(1) of section 5709.61 of	1221
the Revised Code, and shall forward the findings to the	1222
legislative authority of the municipal corporation. If the	1223
director certifies the area as having those characteristics, and	1224
thereby certifies it as a zone, the legislative authority may	1225
enter into an agreement with an enterprise under division (C) of	1226
this section.	1227

(B) Any enterprise that wishes to enter into an agreement	1228
with a municipal corporation under division (C) of this section	1229
shall submit a proposal to the legislative authority of the	1230
municipal corporation on a form prescribed by the director of	1231
development, together with the application fee established under	1232
section 5709.68 of the Revised Code. The form shall require the	1233
following information:	1234

(1) An estimate of the number of new employees whom the	1235
enterprise intends to hire, or of the number of employees whom the	1236
enterprise intends to retain, within the zone at a facility that	1237
is a project site, and an estimate of the amount of payroll of the	1238
enterprise attributable to these employees;	1239

(2) An estimate of the amount to be invested by the	1240
enterprise to establish, expand, renovate, or occupy a facility,	1241
including investment in new buildings, additions or improvements	1242
to existing buildings, machinery, equipment, furniture, fixtures,	1243
and inventory;	1244

(3) A listing of the enterprise's current investment, if any,	1245
in a facility as of the date of the proposal's submission.	1246

The enterprise shall review and update the listings required	1247
under this division to reflect material changes, and any agreement	1248
entered into under division (C) of this section shall set forth	1249
final estimates and listings as of the time the agreement is	1250
entered into. The legislative authority may, on a separate form	1251
and at any time, require any additional information necessary to	1252
determine whether an enterprise is in compliance with an agreement	1253
and to collect the information required to be reported under	1254
section 5709.68 of the Revised Code.	1255

(C) Upon receipt and investigation of a proposal under	1256
division (B) of this section, if the legislative authority finds	1257
that the enterprise submitting the proposal is qualified by	1258
financial responsibility and business experience to create and	1259
preserve employment opportunities in the zone and improve the	1260
economic climate of the municipal corporation, the legislative	1261
authority, on or before October 15, 2009, may do one of the	1262
following:	1263

(1) Enter into an agreement with the enterprise under which	1264
the enterprise agrees to establish, expand, renovate, or occupy a	1265
facility and hire new employees, or preserve employment	1266
opportunities for existing employees, in return for one or more of	1267
the following incentives:	1268

(a) Exemption for a specified number of years, not to exceed	1269
ten, of a specified portion, up to seventy-five per cent, of the	1270
assessed value of tangible personal property first used in	1271
business at the project site as a result of the agreement. AnIf	1272
an exemption for inventory is specifically granted in the	1273
agreement pursuant to this division, the exemption applies to	1274
inventory required to be listed pursuant to sections 5711.15 and	1275
5711.16 of the Revised Code, except that, in the instance of an	1276
expansion or other situations in which an enterprise was in	1277
business at the facility prior to the establishment of the zone,	1278
the inventory that is exempt is that amount or value of inventory	1279
in excess of the amount or value of inventory required to be	1280
listed in the personal property tax return of the enterprise in	1281
the return for the tax year in which the agreement is entered	1282
into.	1283

(b) Exemption for a specified number of years, not to exceed	1284
ten, of a specified portion, up to seventy-five per cent, of the	1285
increase in the assessed valuation of real property constituting	1286
the project site subsequent to formal approval of the agreement by	1287
the legislative authority;	1288

(c) Provision for a specified number of years, not to exceed	1289
ten, of any optional services or assistance that the municipal	1290
corporation is authorized to provide with regard to the project	1291
site.	1292

(2) Enter into an agreement under which the enterprise agrees	1293
to remediate an environmentally contaminated facility, to spend an	1294
amount equal to at least two hundred fifty per cent of the true	1295
value in money of the real property of the facility prior to	1296
remediation as determined for the purposes of property taxation to	1297
establish, expand, renovate, or occupy the remediated facility,	1298
and to hire new employees or preserve employment opportunities for	1299
existing employees at the remediated facility, in return for one	1300
or more of the following incentives:	1301

(a) Exemption for a specified number of years, not to exceed	1302
ten, of a specified portion, not to exceed fifty per cent, of the	1303
assessed valuation of the real property of the facility prior to	1304
remediation;	1305

(b) Exemption for a specified number of years, not to exceed	1306
ten, of a specified portion, not to exceed one hundred per cent,	1307
of the increase in the assessed valuation of the real property of	1308
the facility during or after remediation;	1309

(c) The incentive under division (C)(1)(a) of this section,	1310
except that the percentage of the assessed value of such property	1311
exempted from taxation shall not exceed one hundred per cent;	1312

(d) The incentive under division (C)(1)(c) of this section.

1313

(3) Enter into an agreement with an enterprise that plans to	1314
purchase and operate a large manufacturing facility that has	1315
ceased operation or announced its intention to cease operation, in	1316
return for exemption for a specified number of years, not to	1317
exceed ten, of a specified portion, up to one hundred per cent, of	1318
the assessed value of tangible personal property used in business	1319
at the project site as a result of the agreement, or of the	1320
assessed valuation of real property constituting the project site,	1321
or both.	1322

(D)(1) Notwithstanding divisions (C)(1)(a) and (b) of this	1323
section, the portion of the assessed value of tangible personal	1324
property or of the increase in the assessed valuation of real	1325
property exempted from taxation under those divisions may exceed	1326
seventy-five per cent in any year for which that portion is	1327
exempted if the average percentage exempted for all years in which	1328
the agreement is in effect does not exceed sixty per cent, or if	1329
the board of education of the city, local, or exempted village	1330
school district within the territory of which the property is or	1331
will be located approves a percentage in excess of seventy-five	1332
per cent. For the purpose of obtaining such approval, the	1333
legislative authority shall deliver to the board of education a	1334
notice not later than forty-five days prior to approving the	1335
agreement, excluding Saturdays, Sundays, and legal holidays as	1336
defined in section 1.14 of the Revised Code. The notice shall	1337
state the percentage to be exempted, an estimate of the true value	1338
of the property to be exempted, and the number of years the	1339
property is to be exempted. The board of education, by resolution	1340
adopted by a majority of the board, shall approve or disapprove	1341
the agreement and certify a copy of the resolution to the	1342
legislative authority not later than fourteen days prior to the	1343
date stipulated by the legislative authority as the date upon	1344
which approval of the agreement is to be formally considered by	1345
the legislative authority. The board of education may include in	1346
the resolution conditions under which the board would approve the	1347
agreement, including the execution of an agreement to compensate	1348
the school district under division (B) of section 5709.82 of the	1349
Revised Code. The legislative authority may approve the agreement	1350
at any time after the board of education certifies its resolution	1351
approving the agreement to the legislative authority, or, if the	1352
board approves the agreement conditionally, at any time after the	1353
conditions are agreed to by the board and the legislative	1354
authority.	1355

If a board of education has adopted a resolution waiving its	1356
right to approve agreements and the resolution remains in effect,	1357
approval of an agreement by the board is not required under this	1358
division. If a board of education has adopted a resolution	1359
allowing a legislative authority to deliver the notice required	1360
under this division fewer than forty-five business days prior to	1361
the legislative authority's approval of the agreement, the	1362
legislative authority shall deliver the notice to the board not	1363
later than the number of days prior to such approval as prescribed	1364
by the board in its resolution. If a board of education adopts a	1365
resolution waiving its right to approve agreements or shortening	1366
the notification period, the board shall certify a copy of the	1367
resolution to the legislative authority. If the board of education	1368
rescinds such a resolution, it shall certify notice of the	1369
rescission to the legislative authority.	1370

(2) The legislative authority shall comply with section	1371
5709.83 of the Revised Code unless the board of education has	1372
adopted a resolution under that section waiving its right to	1373
receive such notice.	1374

(E) This division applies to zones certified by the director	1375
of development under this section prior to July 22, 1994.	1376

On or before October 15, 2009, the legislative authority that	1377
designated a zone to which this division applies may enter into an	1378
agreement with an enterprise if the legislative authority makes	1379
the finding required under that division and determines that the	1380
enterprise satisfies one of the criteria described in divisions	1381
(E)(1) to (5) of this section:	1382

(1) The enterprise currently has no operations in this state	1383
and, subject to approval of the agreement, intends to establish	1384
operations in the zone;	1385

(2) The enterprise currently has operations in this state	1386
and, subject to approval of the agreement, intends to establish	1387
operations at a new location in the zone that would not result in	1388
a reduction in the number of employee positions at any of the	1389
enterprise's other locations in this state;	1390

(3) The enterprise, subject to approval of the agreement,	1391
intends to relocate operations, currently located in another	1392
state, to the zone;	1393

(4) The enterprise, subject to approval of the agreement,	1394
intends to expand operations at an existing site in the zone that	1395
the enterprise currently operates;	1396

(5) The enterprise, subject to approval of the agreement,	1397
intends to relocate operations, currently located in this state,	1398
to the zone, and the director of development has issued a waiver	1399
for the enterprise under division (B) of section 5709.633 of the	1400
Revised Code.	1401

The agreement shall require the enterprise to agree to	1402
establish, expand, renovate, or occupy a facility in the zone and	1403
hire new employees, or preserve employment opportunities for	1404
existing employees, in return for one or more of the incentives	1405
described in division (C) of this section.	1406

(F) All agreements entered into under this section shall be	1407
in the form prescribed under section 5709.631 of the Revised Code.	1408
After an agreement is entered into under this division, if the	1409
legislative authority revokes its designation of a zone, or if the	1410
director of development revokes the zone's certification, any	1411
entitlements granted under the agreement shall continue for the	1412
number of years specified in the agreement.	1413

(G) Except as otherwise provided in this division, an	1414
agreement entered into under this section shall require that the	1415
enterprise pay an annual fee equal to the greater of one per cent	1416
of the dollar value of incentives offered under the agreement or	1417
five hundred dollars; provided, however, that if the value of the	1418
incentives exceeds two hundred fifty thousand dollars, the fee	1419
shall not exceed two thousand five hundred dollars. The fee shall	1420
be payable to the legislative authority once per year for each	1421
year the agreement is effective on the days and in the form	1422
specified in the agreement. Fees paid shall be deposited in a	1423
special fund created for such purpose by the legislative authority	1424
and shall be used by the legislative authority exclusively for the	1425
purpose of complying with section 5709.68 of the Revised Code and	1426
by the tax incentive review council created under section 5709.85	1427
of the Revised Code exclusively for the purposes of performing the	1428
duties prescribed under that section. The legislative authority	1429
may waive or reduce the amount of the fee charged against an	1430
enterprise, but such a waiver or reduction does not affect the	1431
obligations of the legislative authority or the tax incentive	1432
review council to comply with section 5709.68 or 5709.85 of the	1433
Revised Code.	1434

(H) When an agreement is entered into pursuant to this	1435
section, the legislative authority authorizing the agreement shall	1436
forward a copy of the agreement to the director of development and	1437
to the tax commissioner within fifteen days after the agreement is	1438
entered into. If any agreement includes terms not provided for in	1439
section 5709.631 of the Revised Code affecting the revenue of a	1440
city, local, or exempted village school district or causing	1441
revenue to be foregone by the district, including any compensation	1442
to be paid to the school district pursuant to section 5709.82 of	1443
the Revised Code, those terms also shall be forwarded in writing	1444
to the director of development along with the copy of the	1445
agreement forwarded under this division.	1446

(I) After an agreement is entered into, the enterprise shall	1447
file with each personal property tax return required to be filed,	1448
or annual report required to be filed under section 5727.08 of the	1449
Revised Code, while the agreement is in effect, an informational	1450
return, on a form prescribed by the tax commissioner for that	1451
purpose, setting forth separately the property, and related costs	1452
and values, exempted from taxation under the agreement.	1453

(J) Enterprises may agree to give preference to residents of	1454
the zone within which the agreement applies relative to residents	1455
of this state who do not reside in the zone when hiring new	1456
employees under the agreement.	1457

(K) An agreement entered into under this section may include	1458
a provision requiring the enterprise to create one or more	1459
temporary internship positions for students enrolled in a course	1460
of study at a school or other educational institution in the	1461
vicinity, and to create a scholarship or provide another form of	1462
educational financial assistance for students holding such a	1463
position in exchange for the student's commitment to work for the	1464
enterprise at the completion of the internship.	1465

(L) The tax commissioner's authority in determining the	1466
accuracy of any exemption granted by an agreement entered into	1467
under this section is limited to divisions (C)(1)(a) and (b),	1468
(C)(2)(a), (b), and (c), (C)(3), (D), and (I) of this section and	1469
divisions (B)(1) to (10) of section 5709.631 of the Revised Code	1470
and, as authorized by law, to enforcing any modification to, or	1471
revocation of, that agreement by the municipal corporation or	1472
director of development.	1473

Sec. 5709.63.  (A) With the consent of the legislative	1474
authority of each affected municipal corporation or of a board of	1475
township trustees, a board of county commissioners may, in the	1476
manner set forth in section 5709.62 of the Revised Code, designate	1477
one or more areas in one or more municipal corporations or in	1478
unincorporated areas of the county as proposed enterprise zones. A	1479
board of county commissioners may designate no more than one area	1480
within a township, or within adjacent townships, as a proposed	1481
enterprise zone. The board shall petition the director of	1482
development for certification of the area as having the	1483
characteristics set forth in division (A)(1) or (2) of section	1484
5709.61 of the Revised Code as amended by Substitute Senate Bill	1485
No. 19 of the 120th general assembly. Except as otherwise provided	1486
in division (D) of this section, on and after July 1, 1994, boards	1487
of county commissioners shall not enter into agreements under this	1488
section unless the board has petitioned the director and the	1489
director has certified the zone under this section as amended by	1490
that act; however, all agreements entered into under this section	1491
as it existed prior to July 1, 1994, and the incentives granted	1492
under those agreements shall remain in effect for the period	1493
agreed to under those agreements. The director shall make the	1494
determination in the manner provided under section 5709.62 of the	1495
Revised Code. Any enterprise wishing to enter into an agreement	1496
with the board under division (B) or (D) of this section shall	1497
submit a proposal to the board on the form and accompanied by the	1498
application fee prescribed under division (B) of section 5709.62	1499
of the Revised Code. The enterprise shall review and update the	1500
estimates and listings required by the form in the manner required	1501
under that division. The board may, on a separate form and at any	1502
time, require any additional information necessary to determine	1503
whether an enterprise is in compliance with an agreement and to	1504
collect the information required to be reported under section	1505
5709.68 of the Revised Code.	1506

(B) If the board of county commissioners finds that an	1507
enterprise submitting a proposal is qualified by financial	1508
responsibility and business experience to create and preserve	1509
employment opportunities in the zone and to improve the economic	1510
climate of the municipal corporation or municipal corporations or	1511
the unincorporated areas in which the zone is located and to which	1512
the proposal applies, the board, on or before October 15, 2009,	1513
and with the consent of the legislative authority of each affected	1514
municipal corporation or of the board of township trustees may do	1515
either of the following:	1516

(1) Enter into an agreement with the enterprise under which	1517
the enterprise agrees to establish, expand, renovate, or occupy a	1518
facility in the zone and hire new employees, or preserve	1519
employment opportunities for existing employees, in return for the	1520
following incentives:	1521

(a) When the facility is located in a municipal corporation,	1522
the board may enter into an agreement for one or more of the	1523
incentives provided in division (C) of section 5709.62 of the	1524
Revised Code, subject to division (D) of that section;	1525

(b) When the facility is located in an unincorporated area,	1526
the board may enter into an agreement for one or more of the	1527
following incentives:	1528

(i) Exemption for a specified number of years, not to exceed	1529
ten, of a specified portion, up to sixty per cent, of the assessed	1530
value of tangible personal property first used in business at a	1531
project site as a result of the agreement. AnIf an exemption for	1532
inventory is specifically granted in the agreement pursuant to	1533
this division, the exemption applies to inventory required to be	1534
listed pursuant to sections 5711.15 and 5711.16 of the Revised	1535
Code, except, in the instance of an expansion or other situations	1536
in which an enterprise was in business at the facility prior to	1537
the establishment of the zone, the inventory that is exempt is	1538
that amount or value of inventory in excess of the amount or value	1539
of inventory required to be listed in the personal property tax	1540
return of the enterprise in the return for the tax year in which	1541
the agreement is entered into.	1542

(ii) Exemption for a specified number of years, not to exceed	1543
ten, of a specified portion, up to sixty per cent, of the increase	1544
in the assessed valuation of real property constituting the	1545
project site subsequent to formal approval of the agreement by the	1546
board;	1547

(iii) Provision for a specified number of years, not to	1548
exceed ten, of any optional services or assistance the board is	1549
authorized to provide with regard to the project site;	1550

(iv) The incentive described in division (C)(2) of section	1551
5709.62 of the Revised Code.	1552

(2) Enter into an agreement with an enterprise that plans to	1553
purchase and operate a large manufacturing facility that has	1554
ceased operation or has announced its intention to cease	1555
operation, in return for exemption for a specified number of	1556
years, not to exceed ten, of a specified portion, up to one	1557
hundred per cent, of tangible personal property used in business	1558
at the project site as a result of the agreement, or of real	1559
property constituting the project site, or both.	1560

(C)(1) Notwithstanding divisions (B)(1)(b)(i) and (ii) of	1561
this section, the portion of the assessed value of tangible	1562
personal property or of the increase in the assessed valuation of	1563
real property exempted from taxation under those divisions may	1564
exceed sixty per cent in any year for which that portion is	1565
exempted if the average percentage exempted for all years in which	1566
the agreement is in effect does not exceed fifty per cent, or if	1567
the board of education of the city, local, or exempted village	1568
school district within the territory of which the property is or	1569
will be located approves a percentage in excess of sixty per cent.	1570
For the purpose of obtaining such approval, the board of	1571
commissioners shall deliver to the board of education a notice not	1572
later than forty-five days prior to approving the agreement,	1573
excluding Saturdays, Sundays, and legal holidays as defined in	1574
section 1.14 of the Revised Code. The notice shall state the	1575
percentage to be exempted, an estimate of the true value of the	1576
property to be exempted, and the number of years the property is	1577
to be exempted. The board of education, by resolution adopted by a	1578
majority of the board, shall approve or disapprove the agreement	1579
and certify a copy of the resolution to the board of commissioners	1580
not later than fourteen days prior to the date stipulated by the	1581
board of commissioners as the date upon which approval of the	1582
agreement is to be formally considered by the board of	1583
commissioners. The board of education may include in the	1584
resolution conditions under which the board would approve the	1585
agreement, including the execution of an agreement to compensate	1586
the school district under division (B) of section 5709.82 of the	1587
Revised Code. The board of county commissioners may approve the	1588
agreement at any time after the board of education certifies its	1589
resolution approving the agreement to the board of county	1590
commissioners, or, if the board of education approves the	1591
agreement conditionally, at any time after the conditions are	1592
agreed to by the board of education and the board of county	1593
commissioners.	1594

If a board of education has adopted a resolution waiving its	1595
right to approve agreements and the resolution remains in effect,	1596
approval of an agreement by the board of education is not required	1597
under division (C) of this section. If a board of education has	1598
adopted a resolution allowing a board of county commissioners to	1599
deliver the notice required under this division fewer than	1600
forty-five business days prior to approval of the agreement by the	1601
board of county commissioners, the board of county commissioners	1602
shall deliver the notice to the board of education not later than	1603
the number of days prior to such approval as prescribed by the	1604
board of education in its resolution. If a board of education	1605
adopts a resolution waiving its right to approve agreements or	1606
shortening the notification period, the board of education shall	1607
certify a copy of the resolution to the board of county	1608
commissioners. If the board of education rescinds such a	1609
resolution, it shall certify notice of the rescission to the board	1610
of county commissioners.	1611

(2) The board of county commissioners shall comply with	1612
section 5709.83 of the Revised Code unless the board of education	1613
has adopted a resolution under that section waiving its right to	1614
receive such notice.	1615

(D) This division applies to zones certified by the director	1616
of development under this section prior to July 22, 1994.	1617

On or before October 15, 2009, and with the consent of the	1618
legislative authority of each affected municipal corporation or	1619
board of township trustees of each affected township, the board of	1620
commissioners that designated a zone to which this division	1621
applies may enter into an agreement with an enterprise if the	1622
board makes the finding required under that division and	1623
determines that the enterprise satisfies one of the criteria	1624
described in divisions (D)(1) to (5) of this section:	1625

(1) The enterprise currently has no operations in this state	1626
and, subject to approval of the agreement, intends to establish	1627
operations in the zone;	1628

(2) The enterprise currently has operations in this state	1629
and, subject to approval of the agreement, intends to establish	1630
operations at a new location in the zone that would not result in	1631
a reduction in the number of employee positions at any of the	1632
enterprise's other locations in this state;	1633

(3) The enterprise, subject to approval of the agreement,	1634
intends to relocate operations, currently located in another	1635
state, to the zone;	1636

(4) The enterprise, subject to approval of the agreement,	1637
intends to expand operations at an existing site in the zone that	1638
the enterprise currently operates;	1639

(5) The enterprise, subject to approval of the agreement,	1640
intends to relocate operations, currently located in this state,	1641
to the zone, and the director of development has issued a waiver	1642
for the enterprise under division (B) of section 5709.633 of the	1643
Revised Code.	1644

The agreement shall require the enterprise to agree to	1645
establish, expand, renovate, or occupy a facility in the zone and	1646
hire new employees, or preserve employment opportunities for	1647
existing employees, in return for one or more of the incentives	1648
described in division (B) of this section.	1649

(E) All agreements entered into under this section shall be	1650
in the form prescribed under section 5709.631 of the Revised Code.	1651
After an agreement under this section is entered into, if the	1652
board of county commissioners revokes its designation of the zone,	1653
or if the director of development revokes the zone's	1654
certification, any entitlements granted under the agreement shall	1655
continue for the number of years specified in the agreement.	1656

(F) Except as otherwise provided in this paragraph, an	1657
agreement entered into under this section shall require that the	1658
enterprise pay an annual fee equal to the greater of one per cent	1659
of the dollar value of incentives offered under the agreement or	1660
five hundred dollars; provided, however, that if the value of the	1661
incentives exceeds two hundred fifty thousand dollars, the fee	1662
shall not exceed two thousand five hundred dollars. The fee shall	1663
be payable to the board of commissioners once per year for each	1664
year the agreement is effective on the days and in the form	1665
specified in the agreement. Fees paid shall be deposited in a	1666
special fund created for such purpose by the board and shall be	1667
used by the board exclusively for the purpose of complying with	1668
section 5709.68 of the Revised Code and by the tax incentive	1669
review council created under section 5709.85 of the Revised Code	1670
exclusively for the purposes of performing the duties prescribed	1671
under that section. The board may waive or reduce the amount of	1672
the fee charged against an enterprise, but such waiver or	1673
reduction does not affect the obligations of the board or the tax	1674
incentive review council to comply with section 5709.68 or 5709.85	1675
of the Revised Code, respectively.	1676

(G) With the approval of the legislative authority of a	1677
municipal corporation or the board of township trustees of a	1678
township in which a zone is designated under division (A) of this	1679
section, the board of county commissioners may delegate to that	1680
legislative authority or board any powers and duties of the board	1681
to negotiate and administer agreements with regard to that zone	1682
under this section.	1683

(H) When an agreement is entered into pursuant to this	1684
section, the legislative authority authorizing the agreement shall	1685
forward a copy of the agreement to the director of development and	1686
to the tax commissioner within fifteen days after the agreement is	1687
entered into. If any agreement includes terms not provided for in	1688
section 5709.631 of the Revised Code affecting the revenue of a	1689
city, local, or exempted village school district or causing	1690
revenue to be foregone by the district, including any compensation	1691
to be paid to the school district pursuant to section 5709.82 of	1692
the Revised Code, those terms also shall be forwarded in writing	1693
to the director of development along with the copy of the	1694
agreement forwarded under this division.	1695

(I) After an agreement is entered into, the enterprise shall	1696
file with each personal property tax return required to be filed,	1697
or annual report that is required to be filed under section	1698
5727.08 of the Revised Code, while the agreement is in effect, an	1699
informational return, on a form prescribed by the tax commissioner	1700
for that purpose, setting forth separately the property, and	1701
related costs and values, exempted from taxation under the	1702
agreement.	1703

(J) Enterprises may agree to give preference to residents of	1704
the zone within which the agreement applies relative to residents	1705
of this state who do not reside in the zone when hiring new	1706
employees under the agreement.	1707

(K) An agreement entered into under this section may include	1708
a provision requiring the enterprise to create one or more	1709
temporary internship positions for students enrolled in a course	1710
of study at a school or other educational institution in the	1711
vicinity, and to create a scholarship or provide another form of	1712
educational financial assistance for students holding such a	1713
position in exchange for the student's commitment to work for the	1714
enterprise at the completion of the internship.	1715

(L) The tax commissioner's authority in determining the	1716
accuracy of any exemption granted by an agreement entered into	1717
under this section is limited to divisions (B)(1)(b)(i) and (ii),	1718
(B)(2), (C), and (I) of this section, division (B)(1)(b)(iv) of	1719
this section as it pertains to divisions (C)(2)(a), (b), and (c)	1720
of section 5709.62 of the Revised Code, and divisions (B)(1) to	1721
(10) of section 5709.631 of the Revised Code and, as authorized by	1722
law, to enforcing any modification to, or revocation of, that	1723
agreement by the board of county commissioners or the director of	1724
development or, if the board's powers and duties are delegated	1725
under division (G) of this section, by the legislative authority	1726
of a municipal corporation or board of township trustees.	1727

Sec. 5709.631.  Each agreement entered into under sections	1728
5709.62, 5709.63, and 5709.632 of the Revised Code on or after	1729
April 1, 1994, shall be in writing and shall include all of the	1730
information and statements prescribed by this section. Agreements	1731
may include terms not prescribed by this section, but such terms	1732
shall in no way derogate from the information and statements	1733
prescribed by this section.	1734

(A) Each agreement shall include the following information:

1735

(1) The names of all parties to the agreement;

1736

(2) A description of the investments to be made by the	1737
applicant enterprise or by another party at the facility whether	1738
or not the investments are exempted from taxation, including	1739
existing or new building size and cost thereof; the value of	1740
machinery, equipment, furniture, and fixtures, including an	1741
itemization of the value of machinery, equipment, furniture, and	1742
fixtures used at another location in this state prior to the	1743
agreement and relocated or to be relocated from that location to	1744
the facility and the value of machinery, equipment, furniture, and	1745
fixtures at the facility prior to the execution of the agreement	1746
that will not be exempted from taxation; the value of inventory at	1747
the facility, including an itemization of the value of inventory	1748
held at another location in this state prior to the agreement and	1749
relocated or to be relocated from that location to the facility,	1750
and the value of inventory held at the facility prior to the	1751
execution of the agreement that will not be exempted from	1752
taxation;	1753

(3) The scheduled starting and completion dates of	1754
investments made in building, machinery, equipment, furniture,	1755
fixtures, and inventory;	1756

(4) Estimates of the number of employee positions to be	1757
created each year of the agreement and of the number of employee	1758
positions retained by the applicant enterprise due to the project,	1759
itemized as to the number of full-time, part-time, permanent, and	1760
temporary positions;	1761

(5) Estimates of the dollar amount of payroll attributable to	1762
the positions set forth in division (A)(4) of this section,	1763
similarly itemized;	1764

(6) The number of employee positions, if any, at the project	1765
site and at any other location in the state at the time the	1766
agreement is executed, itemized as to the number of full-time,	1767
part-time, permanent, and temporary positions.	1768

(B) Each agreement shall set forth the following information	1769
and incorporate the following statements:	1770

(1) A description of real property to be exempted from	1771
taxation under the agreement, the percentage of the assessed	1772
valuation of the real property exempted from taxation, and the	1773
period for which the exemption is granted, accompanied by the	1774
statement: "The exemption commences the first year for which the	1775
real property would first be taxable were that property not	1776
exempted from taxation. No exemption shall commence after	1777
.......... (insert date) nor extend beyond .......... (insert	1778
date)." The tax commissioner shall adopt rules prescribing the	1779
form the description of such property shall assume to ensure that	1780
the property to be exempted from taxation under the agreement is	1781
distinguishable from property that is not to be exempted under	1782
that agreement.	1783

(2) A description of tangible personal property to be	1784
exempted from taxation under the agreement, the percentage of the	1785
assessed value of the tangible personal property exempted from	1786
taxation, and the period for which the exemption is granted,	1787
accompanied by the statement: "The minimum investment for tangible	1788
personal property to qualify for the exemption is $..........	1789
(insert dollar amount) to purchase machinery and equipment first	1790
used in business at the facility as a result of the project,	1791
$.......... (insert dollar amount) for furniture and fixtures and	1792
other noninventory personal property first used in business at the	1793
facility as a result of the project, and $.......... (insert	1794
dollar amount) for new inventory. The maximum investment for	1795
tangible personal property to qualify for the exemption is	1796
$.......... (insert dollar amount) to purchase machinery and	1797
equipment first used in business at the facility as a result of	1798
the project, $.......... (insert dollar amount) for furniture and	1799
fixtures and other noninventory personal property first used in	1800
business at the facility as a result of the project, and	1801
$.......... (insert dollar amount) for new inventory. The	1802
exemption commences the first year for which the tangible personal	1803
property would first be taxable were that property not exempted	1804
from taxation. No exemption shall commence after tax return year	1805
.......... (insert dateyear) nor extend beyond tax return year	1806
.......... (insert dateyear). In no instance shall any tangible	1807
personal property be exempted from taxation for more than ten	1808
return years unless the project that is part of the agreement	1809
involves the enrichment and commercialization of uranium or	1810
uranium products or the research and development activities	1811
related to that enrichment or commercialization, in which case the	1812
tangible personal property may be exempted from taxation for up to	1813
fifteen return years." No exemption shall be allowed for any type	1814
of tangible personal property if the total investment is less than	1815
the minimum dollar amount specified for that type of property. If,	1816
for a type of tangible personal property, there are no minimum or	1817
maximum investment dollar amounts specified in the statement or	1818
the dollar amounts are designated in the statement as not	1819
applicable, the exemption shall apply to the total cost of that	1820
type of tangible personal property first used in business at the	1821
facility as a result of the project. The tax commissioner shall	1822
adopt rules prescribing the form the description of such property	1823
shall assume to ensure that the property to be exempted from	1824
taxation under the agreement is distinguishable from property that	1825
is not to be exempted under that agreement.	1826

(3) ".......... (insert name of enterprise) shall pay such	1827
real and tangible personal property taxes as are not exempted	1828
under this agreement and are charged against such property and	1829
shall file all tax reports and returns as required by law. If	1830
.......... (insert name of enterprise) fails to pay such taxes or	1831
file such returns and reports, all incentives granted under this	1832
agreement are rescinded beginning with the year for which such	1833
taxes are charged or such reports or returns are required to be	1834
filed and thereafter."	1835

(4) ".......... (insert name of enterprise) hereby certifies	1836
that at the time this agreement is executed, .......... (insert	1837
name of enterprise) does not owe any delinquent real or tangible	1838
personal property taxes to any taxing authority of the State of	1839
Ohio, and does not owe delinquent taxes for which ..........	1840
(insert name of enterprise) is liable under Chapter 5727., 5733.,	1841
5735., 5739., 5741., 5743., 5747., or 5753. of the Revised Code,	1842
or, if such delinquent taxes are owed, .......... (insert name of	1843
enterprise) currently is paying the delinquent taxes pursuant to a	1844
delinquent tax contract enforceable by the State of Ohio or an	1845
agent or instrumentality thereof, has filed a petition in	1846
bankruptcy under 11 U.S.C.A. 101, et seq., or such a petition has	1847
been filed against .......... (insert name of enterprise). For the	1848
purposes of the certification, delinquent taxes are taxes that	1849
remain unpaid on the latest day prescribed for payment without	1850
penalty under the chapter of the Revised Code governing payment of	1851
those taxes."	1852

(5) ".......... (insert name of municipal corporation or	1853
county) shall perform such acts as are reasonably necessary or	1854
appropriate to effect, claim, reserve, and maintain exemptions	1855
from taxation granted under this agreement including, without	1856
limitation, joining in the execution of all documentation and	1857
providing any necessary certificates required in connection with	1858
such exemptions."	1859

(6) "If for any reason the enterprise zone designation	1860
expires, the Director of the Ohio Department of Development	1861
revokes certification of the zone, or .......... (insert name of	1862
municipal corporation or county) revokes the designation of the	1863
zone, entitlements granted under this agreement shall continue for	1864
the number of years specified under this agreement, unless	1865
.......... (insert name of enterprise) materially fails to fulfill	1866
its obligations under this agreement and .......... (insert name	1867
of municipal corporation or county) terminates or modifies the	1868
exemptions from taxation granted under this agreement."	1869

(7) "If .......... (insert name of enterprise) materially	1870
fails to fulfill its obligations under this agreement, or if	1871
.......... (insert name of municipal corporation or county)	1872
determines that the certification as to delinquent taxes required	1873
by this agreement is fraudulent, .......... (insert name of	1874
municipal corporation or county) may terminate or modify the	1875
exemptions from taxation granted under this agreement."	1876

(8) ".......... (insert name of enterprise) shall provide to	1877
the proper tax incentive review council any information reasonably	1878
required by the council to evaluate the enterprise's compliance	1879
with the agreement, including returns or annual reports filed	1880
pursuant to section 5711.02 or 5727.08 of the Ohio Revised Code if	1881
requested by the council."	1882

(9) ".......... (insert name of enterprise) and ..........	1883
(insert name of municipal corporation or county) acknowledge that	1884
this agreement must be approved by formal action of the	1885
legislative authority of .......... (insert name of municipal	1886
corporation or county) as a condition for the agreement to take	1887
effect. This agreement takes effect upon such approval."	1888

(10) "This agreement is not transferable or assignable	1889
without the express, written approval of .......... (insert name	1890
of municipal corporation or county)."	1891

(11) "Exemptions from taxation granted under this agreement	1892
shall be revoked if it is determined that ............... (insert	1893
name of enterprise), any successor enterprise, or any related	1894
member (as those terms are defined in section 5709.61 of the Ohio	1895
Revised Code) has violated the prohibition against entering into	1896
this agreement under division (E) of section 3735.671 or section	1897
5709.62, 5709.63, or 5709.632 of the Ohio Revised Code prior to	1898
the time prescribed by that division or either of those sections."	1899

The statement described in division (B)(7) of this section	1900
may include the following statement, appended at the end of the	1901
statement: "and may require the repayment of the amount of taxes	1902
that would have been payable had the property not been exempted	1903
from taxation under this agreement."	1904

(C) If the director of development had to issue a waiver	1905
under section 5709.633 of the Revised Code as a condition for the	1906
agreement to be executed, the agreement shall include the	1907
following statement:	1908

"Continuation of this agreement is subject to the validity of	1909
the circumstance upon which .......... (insert name of enterprise)	1910
applied for, and the Director of the Ohio Department of	1911
Development issued, the waiver pursuant to section 5709.633 of the	1912
Ohio Revised Code. If, after formal approval of this agreement by	1913
.......... (insert name of municipal corporation or county), the	1914
Director or ............. (insert name of municipal corporation or	1915
county) discovers that such a circumstance did not exist,	1916
........... (insert name of enterprise) shall be deemed to have	1917
materially failed to comply with this agreement."	1918

If the director issued a waiver on the basis of the	1919
circumstance described in division (B)(3) of section 5709.633 of	1920
the Ohio Revised Code, the conditions enumerated in divisions	1921
(B)(3)(a)(i) and (ii) or divisions (B)(3)(b)(i) and (ii) of that	1922
section shall be incorporated in the information described in	1923
divisions (A)(2), (3), and (4) of this section.	1924

Sec. 5709.633.  (A)(1) Except as otherwise provided in	1925
division (B) of this section, no legislative authority or board of	1926
county commissioners shall enter into an agreement with an	1927
enterprise under division (E) of section 5709.62, division (D) of	1928
section 5709.63, or section 5709.632 of the Revised Code if that	1929
enterprise or a successor enterprise currently has operations at	1930
another location in this state and those operations will be	1931
relocated to an enterprise zone upon or as a result of that	1932
agreement.	1933

(2) Except as otherwise provided in division (B) of this	1934
section, if an enterprise subject to an agreement granting an	1935
exemption from taxation under section 5709.62, 5709.63, or	1936
5709.632 of the Revised Code expands its operations or relocates	1937
its operations to another location in this state that results in a	1938
reduction of its operations at any Ohio location, or discontinues	1939
operations at the project site to which that exemption applies	1940
prior to the expiration of the term of the agreement, no	1941
legislative authority shall enter into an agreement with such an	1942
enterprise, a related member, or a successor enterprise under	1943
section 5709.62, 5709.63, or 5709.632 of the Revised Code prior to	1944
five years after thesuch expansion, relocation, or	1945
discontinuation of operations. The director of development shall	1946
review all agreements entered into under those sections to	1947
determine whether there has been a violation of this paragraph and	1948
whether the requirements to be a facility have been met. If the	1949
director discovers there has been a violation of this paragraph or	1950
the requirements to be a facility have not been met, the agreement	1951
is void, and all incentives granted under the agreement shall	1952
cease immediately. The director shall certify to the legislative	1953
authority and to the board of education of the city, local, or	1954
exempted village school district to which operations were	1955
relocated that the agreement is void.	1956

(B) Divisions (A)(1) and (2) of this section do not apply if	1957
the director of development waives application of those divisions.	1958
The director may waive application of division (A)(1) of this	1959
section if the enterprise or successor enterprise demonstrates, by	1960
documentation satisfactory to the director, that the relocation	1961
was necessitated by or results from one of the circumstances	1962
described in divisions (B)(1) to (3) of this section, and the	1963
director determines that under the circumstance claimed and in	1964
light of the possible relocation issuance of a waiver is	1965
absolutely necessary to attract or retain employment opportunities	1966
in this state. The director may waive application of division	1967
(A)(2) of this section, except for the provision that the	1968
requirements to be a facility must be met, if the enterprise,	1969
related member, or successor enterprise demonstrates, by	1970
documentation satisfactory to the director, that the	1971
discontinuation of operations was necessitated by or resulted from	1972
one of the circumstances described in divisions (B)(1) to (3) of	1973
this section, and the director determines that under the	1974
circumstance claimed and in light of the possible relocation	1975
issuance of a waiver is absolutely necessary to attract or retain	1976
employment opportunities in this state.	1977

The circumstance that may be claimed shall be one of the	1978
following:	1979

(1) The project site at which operations are or will be	1980
discontinued cannot accommodate expansion plans of the enterprise	1981
due to inadequate land suitable for such expansion.	1982

(2) Conditions in the markets in which the enterprise	1983
participates require that the enterprise relocate operations in	1984
order for the enterprise to become or remain competitive in that	1985
market. These conditions include, but are not limited to, any of	1986
the following:	1987

(a) New or modified contracts with customers or suppliers,	1988
such as "just-in-time" supply or similar arrangements;	1989

(b) Changes in the enterprise's production methods;

1990

(c) Loss or impending loss of an existing contract requires	1991
expansion into another market in order to maintain production	1992
levels;	1993

(d) Changes in ownership or other changes in control of the	1994
enterprise, or of a controlled group of corporations of which the	1995
enterprise is a subsidiary, that result from a decision on the	1996
part of owners or officers located outside this state.	1997

(3) The enterprise currently is subject to a consolidation of	1998
its operations, or such a consolidation is imminent. For purposes	1999
of division (B)(3) of this section, "consolidation" means an	2000
enterprise combines the operations of two or more existing	2001
facilities and one of the following conditions is satisfied:	2002

(a) At least one of the facilities currently is not located	2003
in this state, and the relocation of the operations of that	2004
facility would result in both of the following during the term of	2005
the agreement:	2006

(i) The number of employees employed by the enterprise at its	2007
existing facilities in this state to which operations are	2008
relocated increases by not less than twenty-five per cent after	2009
the date the agreement is formally approved by the legislative	2010
authority;	2011

(ii) The assessed value of tangible personal property first	2012
used in business at the project site, or the assessed value of	2013
real property constituting the project site, increases by not less	2014
than twenty-five per cent after the date the agreement is formally	2015
approved by the legislative authority.	2016

(b) All of the facilities currently are in this state, and	2017
the relocation of the operations of any of those facilities would	2018
result in both of the following during the term of the agreement:	2019

(i) The number of employees employed by the enterprise at its	2020
existing facilities in this state to which operations are	2021
relocated increases by not less than twenty-five per cent after	2022
the date the agreement is formally approved by the legislative	2023
authority;	2024

(ii) The assessed value of tangible personal property first	2025
used in business at the project site, or the assessed value of	2026
real property constituting the project site, increases by not less	2027
than fifty per cent over the assessed value, determined at the	2028
time of relocation, of tangible personal property located at, and	2029
of real property constituting, the facilities in this state from	2030
which operations would be relocated.	2031

For purposes of divisions (B)(3)(a) and (b) of this section,	2032
"assessed value of tangible personal property" and "assessed value	2033
of real property" mean the value of such property as assessed for	2034
purposes of property taxation and entered on the tax lists and	2035
duplicates of the county.	2036

(C) To apply for a waiver under division (B) of this section,	2037
the enterprise and the legislative authority intending to enter	2038
into an agreement under section 5709.62, 5709.63, or 5709.632 of	2039
the Revised Code shall petition the director of development in a	2040
form acceptable to the director. The petition shall be accompanied	2041
by documentation demonstrating one or more of the circumstances	2042
described in divisions (B)(1), (2), or (3) of this section. Not	2043
later than thirty days after receiving such a petition, the	2044
director shall investigate the petition and accompanying	2045
documentation to determine the validity of the circumstance	2046
claimed therein, and shall issue to the enterprise and to the	2047
legislative authority histhe determination, in writing, waiving,	2048
or refusing to waive application of division (A) of this section.	2049

Sec. 5709.85.  (A) The legislative authority of a county,	2050
township, or municipal corporation that grants an exemption from	2051
taxation under Chapter 725. or 1728. or under section 3735.67,	2052
5709.40, 5709.41, 5709.62, 5709.63, 5709.632, 5709.73, or 5709.78	2053
of the Revised Code shall create a tax incentive review council.	2054
The council shall consist of the following members:	2055

(1) In the case of a municipal corporation eligible to	2056
designate a zone under section 5709.62 of the Revised Code, the	2057
chief executive officer or histhat officer's designee; a member	2058
of the legislative authority of the municipal corporation,	2059
appointed by the president of the legislative authority or, if the	2060
chief executive officer of the municipal corporation is the	2061
president, appointed by the president pro tempore of the	2062
legislative authority; the county auditor or histhe county	2063
auditor's designee; the chief financial officer of the municipal	2064
corporation or histhat officer's designee; an individual	2065
appointed by the board of education of each city, local, exempted	2066
village, and joint vocational school district to which the	2067
instrument granting the exemption applies; and two members of the	2068
public appointed by the chief executive officer of the municipal	2069
corporation with the concurrence of the legislative authority. At	2070
least four members of the council shall be residents of the	2071
municipal corporation, and at least one of the two public members	2072
appointed by the chief executive officer shall be a minority. As	2073
used in division (A)(1) of this section, a "minority" is an	2074
individual who is African-American, Hispanic, or Native American.	2075

(2) In the case of a county or a municipal corporation that	2076
is not eligible to designate a zone under section 5709.62 or	2077
5709.632 of the Revised Code, three members appointed by the board	2078
of county commissioners; two members from each municipal	2079
corporation to which the instrument granting the tax exemption	2080
applies, appointed by the chief executive officer with the	2081
concurrence of the legislative authority of the respective	2082
municipal corporations; two members of each township to which the	2083
instrument granting the tax exemption applies, appointed by the	2084
board of township trustees of the respective townships; the county	2085
auditor or histhe county auditor's designee; and an individual	2086
appointed by the board of education of each city, local, exempted	2087
village, and joint vocational school district to which the	2088
instrument granting the tax exemption applies. At least two	2089
members of the council shall be residents of the municipal	2090
corporations or townships to which the instrument granting the tax	2091
exemption applies.	2092

(3) In the case of a township in which improvements are	2093
declared a public purpose under section 5709.73 of the Revised	2094
Code, the board of township trustees; the county auditor or his	2095
the county auditor's designee; and an individual appointed by the	2096
board of education of each city, local, exempted village, and	2097
joint vocational school district to which the instrument granting	2098
the exemption applies.	2099

(B) The legislative authority shall call the first meeting	2100
county auditor or the county auditor's designee shall serve as the	2101
chairperson of the council, and at that meeting the council shall	2102
select a chairman and vice-chairman. Thereafter, the. The council	2103
shall meet at the call of the chairmanchairperson. At the first	2104
meeting of the council, the council shall select a	2105
vice-chairperson. Attendance by a majority of the members of the	2106
council constitutes a quorum to conduct the business of the	2107
council.	2108

(C)(1) Annually, the tax incentive review council shall	2109
review all agreements granting exemptions from property taxation	2110
under Chapter 725. or 1728. or under section 3735.671, 5709.62,	2111
5709.63, or 5709.632 of the Revised Code, and any performance or	2112
audit reports required to be submitted pursuant to those	2113
agreements. The review shall include agreements granting such	2114
exemptions that were entered into prior to July 22, 1994, that	2115
continue to be in force and applicable to the current year's	2116
property taxes. With respect to each agreement, the council shall	2117
determine whether the owner of the exempted property has complied	2118
with the agreement, takingand may take into consideration any	2119
fluctuations in the business cycle unique to the owner's business,	2120
and, on. On the basis of such determinationsthat determination,	2121
on or before the first day of September of each year, the council	2122
shall submit to the legislative authority written recommendations	2123
for continuation, modification, or cancellation of theeach	2124
agreement.	2125

(2) Annually, the tax incentive review council shall review	2126
all exemptions from property taxation resulting from the	2127
declaration of public purpose improvements pursuant to section	2128
5709.40, 5709.41, 5709.73, or 5709.78 of the Revised Code. The	2129
review shall include such exemptions that were granted prior to	2130
July 22, 1994, that continue to be in force and applicable to the	2131
current year's property taxes. With respect to each improvement	2132
for which an exemption is granted, the council shall determine the	2133
increase in the true value of parcels of real property on which	2134
improvements have been undertaken as a result of the exemption;	2135
the value of improvements exempted from taxation as a result of	2136
the exemption; and the number of new employees or employees	2137
retained on the site of the improvement as a result of the	2138
exemption.	2139

Upon the request of a tax incentive review council, the	2140
county auditor, the housing officer appointed pursuant to section	2141
3735.66 of the Revised Code, the owner of a new or remodeled	2142
structure or improvement, and the legislative authority of the	2143
county, township, or municipal corporation granting the exemption	2144
shall supply the council with any information reasonably necessary	2145
for the council to make the determinations required under division	2146
(C) of this section, including returns or reports filed pursuant	2147
to sectionsections 5711.02, 5711.13, and 5727.08 of the Revised	2148
Code.	2149

(D) Annually, the tax incentive review council shall review	2150
the compliance of each recipient of a tax exemption under Chapter	2151
725. or 1728. or section 3735.67, 5709.40, 5709.41, 5709.62,	2152
5709.63, 5709.632, 5709.73, or 5709.78 of the Revised Code with	2153
the nondiscriminatory hiring policies developed by the county,	2154
township, or municipal corporation under section 5709.832 of the	2155
Revised Code. Upon the request of the council, the recipient shall	2156
provide the council any information necessary to perform its	2157
review. On the basis of its review, the council may submit to the	2158
legislative authority written recommendations for enhancing	2159
compliance with the nondiscriminatory hiring policies.	2160

(E) A legislative authority that receives from a tax	2161
incentive review council written recommendations under division	2162
(C)(1) or (D) of this section shall, within sixty days after	2163
receipt, hold a meeting and vote to accept, reject, or modify all	2164
or any portion of the recommendations.	2165

(F) A tax incentive review council may request from the	2166
recipient of a tax exemption under Chapter 725. or 1728., or	2167
section 3735.67, 5709.40, 5709.41, 5709.62, 5709.63, 5709.632,	2168
5709.73, or 5709.78 of the Revised Code any information reasonably	2169
necessary for the council to perform its review under this	2170
section. The request shall be in writing and shall be sent to the	2171
recipient by certified mail. Within ten days after receipt of the	2172
request, the recipient shall provide to the council the	2173
information requested.	2174

Sec. 5709.883.  (A) The legislative authority of a county or	2175
municipal corporation that grants an exemption from taxation under	2176
section 5709.88 of the Revised Code shall create a tax incentive	2177
review council unless the county has created such a council under	2178
section 5709.85 of the Revised Code. If a council has been created	2179
under that section, that council shall perform the functions	2180
prescribed by this section. TheA council created under this	2181
section shall consist of the following members:	2182

(1) In the case ofFor a municipal corporation, the chief	2183
executive officer or histhat officer's designee; a member of the	2184
legislative authority of the municipal corporation, appointed by	2185
the president of the legislative authority or, if the chief	2186
executive officer of the municipal corporation is the president,	2187
appointed by the president pro tempore of the legislative	2188
authority; the county auditor or histhe county auditor's	2189
designee; the chief financial officer of the municipal corporation	2190
or histhat officer's designee; an individual appointed by the	2191
board of education of each city, local, exempted village, and	2192
joint vocational school district to which the instrument granting	2193
the exemption applies; and two members of the public appointed by	2194
the chief executive officer of the municipal corporation with the	2195
concurrence of the legislative authority. At least four members of	2196
the council shall be residents of the municipal corporation.	2197

(2) In the caseFor unincorporated areas of a county, three	2198
members appointed by the board of county commissioners; two	2199
members of each township to which the instrument granting the tax	2200
exemption applies, appointed by the board of township trustees of	2201
the respective townships; the county auditor or histhe county	2202
auditor's designee; and an individual appointed by the board of	2203
education of each city, local, exempted village, and joint	2204
vocational school district to which the instrument granting the	2205
tax exemption applies.	2206

(B) The legislative authority shall call the first meeting	2207
county auditor or the county auditor's designee shall serve as the	2208
chairperson of the council, and at that meeting the council shall	2209
select a chairman and vice-chairman. Thereafter, the. The council	2210
shall meet at the call of the chairmanchairperson. At the first	2211
meeting of the council, the council shall select a	2212
vice-chairperson. Attendance by a majority of the members of the	2213
council constitutes a quorum to conduct the business of the	2214
council.	2215

(C) Annually, the tax incentive review council shall review	2216
all agreements granting exemptions from property taxation under	2217
section 5709.88 of the Revised Code and any performance or audit	2218
reports required to be submitted pursuant to those agreements.	2219
With respect to each agreement, the council shall determine	2220
whether the owner of the exempted property has complied with the	2221
agreement, takingand may take into consideration any fluctuations	2222
in the business cycle unique to the owner's business, and, on. On	2223
the basis of those determinationsthat determination, on or before	2224
the first day of September of each year, the council shall submit	2225
to the legislative authority written recommendations for	2226
continuation, modification, or cancellation of the agreement.	2227

Upon the request of a tax incentive review council, the	2228
county auditor and the legislative authority of the county or	2229
municipal corporation granting the exemption shall supply the	2230
council with any information reasonably necessary for the council	2231
to make the determinations required under this division, including	2232
returns or reports filed pursuant to sectionsections 5711.02,	2233
5711.13, and 5727.08 of the Revised Code.	2234

(D) A legislative authority that receives from a tax	2235
incentive review council written recommendations under division	2236
(C) of this section shall, within sixty days after receipt, hold a	2237
meeting and vote to accept, reject, or modify all or any portion	2238
of the recommendations.	2239

(E) A tax incentive review council may request from the	2240
recipient of a tax exemption under this section any information	2241
reasonably necessary for the council to perform its review under	2242
this section. The request shall be in writing and shall be sent to	2243
the recipient by certified mail. Within ten days after receipt of	2244
the request, the recipient shall provide to the council the	2245
information requested.	2246

Sec. 5721.25.  All delinquent land upon which the taxes,	2247
assessments, penalties, interest, or charges have become	2248
delinquent may be redeemed before foreclosure proceedings have	2249
been instituted or, if proceedings have been instituted, before	2250
the filing of an entry of confirmation of sale pursuant to such	2251
proceedings, by tendering to the county treasurer an amount	2252
sufficient, as determined by the court, to pay the taxes,	2253
assessments, penalties, interest, and charges then due and unpaid,	2254
and the costs incurred in any proceeding instituted against such	2255
land under section 5721.18Chapter 323. or this chapter of the	2256
Revised Code as determined by the court.	2257

After a foreclosure proceeding has been instituted but before	2258
a judgment of foreclosure has been renderedunder Chapter 323. or	2259
this chapter of the Revised Code with respect to delinquent land,	2260
but before the filing of an entry of confirmation of sale pursuant	2261
to the proceeding, any person entitled to redeem the land may do	2262
so by tendering to the county treasurer an amount sufficient, as	2263
determined by the court, to pay the taxes, assessments, penalties,	2264
interest, and charges then due and unpaid, and the costs incurred	2265
in any proceeding instituted against such land under Chapter 323.	2266
or this chapter of the Revised Code, and by demonstrating that the	2267
property is in compliance with all applicable zoning regulations,	2268
land use restrictions, and building, health, and safety codes.	2269

In addition, after a foreclosure proceeding has been	2270
instituted, but before the filing of an entry of confirmation of	2271
sale pursuant to the proceeding, any person entitled to redeem the	2272
land who has not previously defaulted on a delinquent tax contract	2273
under section 323.31 of the Revised Code with respect to that	2274
delinquent land may enter into a delinquent tax contract with the	2275
county treasurer for the payment of the taxes, assessments,	2276
penalties, interest, and charges found to be due and unpaid on	2277
such land, together with the costs incurred in the proceeding as	2278
determined by the court, upon demonstrating that the property is	2279
in compliance with all applicable zoning regulations, land use	2280
restrictions, and building, health, and safety codes. The	2281
execution of a delinquent tax contract shall not stop the	2282
prosecution of a proceeding to judgment. The delinquent tax	2283
contract shall be paid as prescribed by section 323.31 of the	2284
Revised Code over a period not to exceed five years after the date	2285
of the first payment made under the contract. The delinquent tax	2286
contract may be terminated if the court determines that the	2287
property is not in compliance with all applicable zoning	2288
regulations, land use restrictions, and building, health, and	2289
safety codes during the term of the contract. The court shall	2290
retain jurisdiction over the delinquent land until the total	2291
amount set forth in the delinquent tax contract is paid,	2292
notwithstanding any conveyance of the land to another owner during	2293
the period that the delinquent tax contract is outstanding.	2294

If any payment under a delinquent tax contract is not paid	2295
when due, or if the contract is terminated because the property is	2296
not in compliance with all applicable zoning regulations, land use	2297
restrictions, and building, health, and safety codes, the county	2298
treasurer shall, at the time the payment is due and unpaid or the	2299
contract is terminated, advise the court rendering the judgment of	2300
foreclosure, and the court shall order such land sold for the	2301
amount of taxes, assessments, penalties, interest, and charges	2302
then due and owing on such land in the manner provided in section	2303
5721.19 of the Revised Code.	2304

Upon the receipt of each payment pursuant to any delinquent	2305
tax contract, the county treasurer shall enter the amount of such	2306
payment on the tax duplicate, and, upon request, shall give a	2307
receipt for the amount paid to the person paying it. The receipt	2308
shall be in the form prescribed by the tax commissioner.	2309

The portion of the amount tendered under this section	2310
representing taxes, and penalties and interest thereon, shall be	2311
apportioned among the several taxing districts in the same	2312
proportion that the amount of taxes levied by each district	2313
against the delinquent property in the preceding tax year bears to	2314
the taxes levied by all such districts against the property in the	2315
preceding tax year. The portion of the payment representing	2316
assessments and other charges shall be credited to those items in	2317
the order in which they became due.	2318

Sec. 5722.01.  As used in this chapter:

2319

(A) "Electing subdivision" means a municipal corporation that	2320
has enacted an ordinance or a township or county that has adopted	2321
a resolution pursuant to section 5722.02 of the Revised Code for	2322
purposes of adopting and implementing the procedures set forth in	2323
this chaptersections 5722.02 to 5722.15 of the Revised Code.	2324

(B) "Delinquent lands" and "delinquent vacant lands" havehas	2325
the same meaningsmeaning as in section 5721.01 of the Revised	2326
Code, and "delinquent vacant lands" are delinquent lands that are	2327
unimproved by any dwelling.	2328

(C) "Land reutilization program" means the procedures and	2329
activities concerning the acquisition, management, and disposition	2330
of affected delinquent lands set forth in this chaptersections	2331
5722.02 to 5722.15 of the Revised Code.	2332

(D) "Minimum bid," in the case of a sale of property	2333
foreclosed pursuant to section 323.25 or 5721.18 or foreclosed and	2334
forfeited pursuant to section 5721.14 of the Revised Code, means a	2335
bid in an amount equal to the sum of the taxes, assessments,	2336
charges, penalties, and interest due and payable on the parcel	2337
subsequent to the delivery to the county prosecuting attorney of	2338
the delinquent land or delinquent vacant land tax certificate or	2339
master list of delinquent or delinquent vacant tracts containing	2340
the parcel, and prior to the transfer of the deed of the parcel to	2341
the purchaser following confirmation of sale, plus the costs of	2342
foreclosure or foreclosure and forfeiture proceedings against the	2343
property.	2344

(E) "Nonproductive land" means any parcel of delinquent	2345
vacant land with respect to which a foreclosure proceeding	2346
pursuant to section 323.25, a foreclosure proceeding pursuant to	2347
division (A) or (B) of section 5721.18, or a foreclosure and	2348
forfeiture proceeding pursuant to section 5721.14 of the Revised	2349
Code has been instituted; and any parcel of delinquent land with	2350
respect to which a foreclosure proceeding pursuant to section	2351
323.25 or division (A) or (B) of section 5721.18 of the Revised	2352
Code has been instituted, and upon which there are no buildings or	2353
other structures, or upon which there are either:	2354

(1) Buildings or other structures that are not in the	2355
occupancy of any person and as to which the township or municipal	2356
corporation within whose boundaries the parcel is situated has	2357
instituted proceedings under section 505.86 or 715.26 of the	2358
Revised Code, or Section 3 of Article XVIII, Ohio Constitution,	2359
for the removal or demolition of such buildings or other	2360
structures by the township or municipal corporation because of	2361
their insecure, unsafe, or structurally defective condition;	2362

(2) Buildings or structures that are not in the occupancy of	2363
any person at the time the foreclosure proceeding is initiated and	2364
whose acquisition the municipal corporation, county, or township	2365
determines to be necessary for the implementation of an effective	2366
land reutilization program.	2367

(F) "Occupancy" means the actual, continuous, and exclusive	2368
use and possession of a parcel by a person having a lawful right	2369
to such use and possession.	2370

(G) "Land within an electing subdivision's boundaries" does	2371
not include land within the boundaries of a municipal corporation,	2372
unless the electing subdivision is the municipal corporation or	2373
the municipal corporation adopts an ordinance that gives consent	2374
to the electing subdivision to include such land.	2375

Sec. 5722.02.  Any municipal corporation, county, or township	2376
may elect to adopt and implement the procedures set forth in this	2377
chaptersections 5722.02 to 5722.15 of the Revised Code to	2378
facilitate the effective reutilization of nonproductive land	2379
situated within its boundaries. Such election shall be made by	2380
ordinance in the case of a municipal corporation, and by	2381
resolution in the case of a county or township. The ordinance or	2382
resolution shall state that the existence of nonproductive land	2383
within its boundaries is such as to necessitate the implementation	2384
of a land reutilization program to foster either the return of	2385
such nonproductive land to tax revenue generating status or the	2386
devotion thereof to public use.	2387

An electing subdivision shall promptly deliver certified	2388
copies of such ordinance or resolution to the auditor, treasurer,	2389
and the prosecutor of each county in which the electing	2390
subdivision is situated. On and after the effective date of such	2391
ordinance or resolution, the foreclosure, sale, management, and	2392
disposition of all nonproductive land situated within the electing	2393
subdivision's boundaries shall be governed by the procedures set	2394
forth in this chaptersections 5722.02 to 5722.15 of the Revised	2395
Code.	2396

Sec. 5722.21. (A) As used in this section:

2397

(1) "Eligible delinquent land" means delinquent land or	2398
delinquent vacant land, as defined in section 5721.01 of the	2399
Revised Code, included in a delinquent tax list or delinquent	2400
vacant land tax list that has been certified delinquent within the	2401
meaning of section 5721.03 of the Revised Code, excluding any	2402
certificate parcel as defined in section 5721.30 of the Revised	2403
Code.	2404

(2) "Delinquent taxes" means the cumulative amount of unpaid	2405
taxes, assessments, recoupment charges, penalties, and interest	2406
charged against eligible delinquent land that became delinquent	2407
before transfer of title to a county, municipal corporation, or	2408
township under this section.	2409

(3) "Foreclosure costs" means the sum of all costs or other	2410
charges of publication, service of notice, prosecution, or other	2411
proceedings against the land under sections 323.25 to 323.28 or	2412
Chapter 5721. of the Revised Code as may pertain to delinquent	2413
land or be fairly apportioned to it by the county treasurer.	2414

(4) "Tax foreclosure sale" means a sale of delinquent land	2415
pursuant to foreclosure proceedings under sections 323.25 to	2416
323.28 or section 5721.14 or 5721.18 of the Revised Code.	2417

(5) "Taxing authority" means the legislative authority of any	2418
taxing unit, as defined in section 5705.01 of the Revised Code, in	2419
which is located a parcel of eligible delinquent land acquired or	2420
to be acquired by a county, municipal corporation, or township in	2421
which a declaration under division (B) of this section is in	2422
effect.	2423

(B) The legislative authority of a municipal corporation may	2424
declare by ordinance, or a board of county commissioners or board	2425
of township trustees may declare by resolution, that it is in the	2426
public interest for the county, municipal corporation, or township	2427
to acquire tax-delinquent real property within the county,	2428
municipal corporation, or township for the public purpose of	2429
redeveloping the property or otherwise rendering it suitable for	2430
productive, tax-paying use. In any county, municipal corporation,	2431
or township in which such a declaration is in effect, the county,	2432
municipal corporation, or township may purchase or otherwise	2433
acquire title to eligible delinquent land, other than by	2434
appropriation, and the title shall pass free and clear of the lien	2435
for delinquent taxes as provided in division (D) of this section.	2436
The authority granted by this section is supplemental to the	2437
authority granted under sections 5722.01 to 5722.15 of the Revised	2438
Code.	2439

(C) With respect to any parcel of eligible delinquent land	2440
purchased or acquired by a county, municipal corporation, or	2441
township in which a declaration is in effect under this section,	2442
the county, municipal corporation, or township may obtain the	2443
consent of each taxing authority for release of any claim on the	2444
delinquent taxes and associated costs attaching to that property	2445
at the time of conveyance to the county, municipal corporation, or	2446
township. Consent shall be obtained in writing, and shall be	2447
certified by the taxing authority granting consent or by the	2448
fiscal officer or other person authorized by the taxing authority	2449
to provide such consent. Consent may be obtained before or after	2450
title to the eligible delinquent land is transferred to the	2451
county, municipal corporation, or township.	2452

The taxing authority of a taxing unit and a county, municipal	2453
corporation, or township in which a declaration is in effect under	2454
this section may enter into an agreement whereby the taxing	2455
authority consents in advance to release of the taxing authority's	2456
claim on delinquent taxes and associated costs with respect to all	2457
or a specified number of parcels of eligible delinquent land that	2458
may be purchased or acquired by the county, municipal corporation,	2459
or township for the purposes of this section. The agreement shall	2460
provide for any terms and conditions on the release of such claim	2461
as are mutually agreeable to the taxing authority and county,	2462
municipal corporation, or township, including any notice to be	2463
provided by the county, municipal corporation, or township to the	2464
taxing authority of the purchase or acquisition of eligible	2465
delinquent land situated in the taxing unit; any option vesting in	2466
the taxing authority to revoke its release with respect to any	2467
parcel of eligible delinquent land before the release becomes	2468
effective; and the manner in which notice of such revocation shall	2469
be effected. Nothing in this section or in such an agreement shall	2470
be construed to bar a taxing authority from revoking its advance	2471
consent with respect to any parcels of eligible delinquent land	2472
purchased or acquired by the county, municipal corporation, or	2473
township before the county, municipal corporation, or township	2474
enters into a purchase or other agreement for acquisition of the	2475
parcels.	2476

(D) The lien for the delinquent taxes and associated costs	2477
for which all of the taxing authorities have consented to release	2478
their claims under this section is hereby extinguished, and the	2479
transfer of title to such delinquent land to the county, municipal	2480
corporation, or township shall be transferred free and clear of	2481
the lien for such taxes and costs. If a taxing authority does not	2482
consent to the release of its claim on delinquent taxes and	2483
associated costs, the entire amount of the lien for such taxes and	2484
costs shall continue as otherwise provided by law until paid or	2485
otherwise discharged according to law.	2486

(E) All eligible delinquent land acquired by a county,	2487
municipal corporation, or township under this section is real	2488
property held for a public purpose and is exempted from taxation	2489
until the county, municipal corporation, or township sells or	2490
otherwise disposes of property.	2491

(F) If a county, municipal corporation, or township sells or	2492
otherwise disposes of delinquent land it purchased or acquired and	2493
for which all or a portion of a taxing authority's claim for	2494
delinquent taxes was released under this section, the net proceeds	2495
from such sale or disposition shall be used for such redevelopment	2496
purposes the board of county commissioners, the legislative	2497
authority of the municipal corporation, or the board of township	2498
trustees considers necessary or appropriate.	2499

Sec. 5733.05.  As used in this section, "qualified research"	2500
means laboratory research, experimental research, and other	2501
similar types of research; research in developing or improving a	2502
product; or research in developing or improving the means of	2503
producing a product. It does not include market research, consumer	2504
surveys, efficiency surveys, management studies, ordinary testing	2505
or inspection of materials or products for quality control,	2506
historical research, or literary research. "Product" as used in	2507
this paragraph does not include services or intangible property.	2508

The annual report determines the value of the issued and	2509
outstanding shares of stock of the taxpayer, which under division	2510
(A) or divisions (B) and (C) of this section is the base or	2511
measure of the franchise tax liability. Such determination shall	2512
be made as of the date shown by the report to have been the	2513
beginning of the corporation's annual accounting period that	2514
includes the first day of January of the tax year. For the	2515
purposes of this chapter, the value of the issued and outstanding	2516
shares of stock of any corporation that is a financial institution	2517
shall be deemed to be the value as calculated in accordance with	2518
division (A) of this section. For the purposes of this chapter,	2519
the value of the issued and outstanding shares of stock of any	2520
corporation that is not a financial institution shall be deemed to	2521
be the values as calculated in accordance with divisions (B) and	2522
(C) of this section. Except as otherwise required by this section	2523
or section 5733.056 of the Revised Code, the value of a taxpayer's	2524
issued and outstanding shares of stock under division (A) or (C)	2525
of this section does not include any amount that is treated as a	2526
liability under generally accepted accounting principles.	2527

(A) The total value, as shown by the books of the financial	2528
institution, of its capital, surplus, whether earned or unearned,	2529
undivided profits, and reserves shall be determined as prescribed	2530
by section 5733.056 of the Revised Code for tax years 1998 and	2531
thereafter.	2532

(B) The sum of the corporation's net income during the	2533
corporation's taxable year, allocated or apportioned to this state	2534
as prescribed in divisions (B)(1) and (2) of this section, and	2535
subject to sections 5733.052, 5733.053, 5733.057, 5733.058,	2536
5733.059, and 5733.0510 of the Revised Code:	2537

(1) The net nonbusiness income allocated or apportioned to	2538
this state as provided by section 5733.051 of the Revised Code.	2539

(2) The amount of Ohio apportioned net business income, which	2540
shall be calculated by multiplying the corporation's net business	2541
income by a fraction. The numerator of the fraction is the sum of	2542
the following products: the property factor multiplied by twenty,	2543
the payroll factor multiplied by twenty, and the sales factor	2544
multiplied by sixty. The denominator of the fraction is one	2545
hundred, provided that the denominator shall be reduced by twenty	2546
if the property factor has a denominator of zero, by twenty if the	2547
payroll factor has a denominator of zero, and by sixty if the	2548
sales factor has a denominator of zero.	2549

The property, payroll, and sales factors shall be determined	2550
as follows, but the numerator and the denominator of the factors	2551
shall not include the portion of any property, payroll, and sales	2552
otherwise includible in the factors to the extent that the portion	2553
relates to, or is used in connection, with, the production of	2554
nonbusiness income allocated under section 5733.051 of the Revised	2555
Code:	2556

(a) The property factor is a fraction computed as follows:

2557

The numerator of the fraction is the average value of the	2558
corporation's real and tangible personal property owned or rented,	2559
and used in the trade or business in this state during the taxable	2560
year, and the denominator of the fraction is the average value of	2561
all the corporation's real and tangible personal property owned or	2562
rented, and used in the trade or business everywhere during such	2563
year. Real and tangible personal property used in the trade or	2564
business includes, but is not limited to, real and tangible	2565
personal property that the corporation rents, subrents, leases, or	2566
subleases to others if the income or loss from such rentals,	2567
subrentals, leases, or subleases is business income. There shall	2568
be excluded from the numerator and denominator of the fraction the	2569
original cost of all of the following property within Ohio:	2570
property with respect to which a "pollution control facility"	2571
certificate has been issued pursuant to section 5709.21 of the	2572
Revised Code; property with respect to which an "industrial water	2573
pollution control certificate" has been issued pursuant to that	2574
section or former section 6111.31 of the Revised Code; and	2575
property used exclusively during the taxable year for qualified	2576
research.	2577

(i) Property owned by the corporation is valued at its	2578
original cost. Property rented by the corporation is valued at	2579
eight times the net annual rental rate. "Net annual rental rate"	2580
means the annual rental rate paid by the corporation less any	2581
annual rental rate received by the corporation from subrentals.	2582

(ii) The average value of property shall be determined by	2583
averaging the values at the beginning and the end of the taxable	2584
year, but the tax commissioner may require the averaging of	2585
monthly values during the taxable year, if reasonably required to	2586
reflect properly the average value of the corporation's property.	2587

(b) The payroll factor is a fraction computed as follows:

2588

The numerator of the fraction is the total amount paid in	2589
this state during the taxable year by the corporation for	2590
compensation, and the denominator of the fraction is the total	2591
compensation paid everywhere by the corporation during such year.	2592
There shall be excluded from the numerator and the denominator of	2593
the payroll factor the total compensation paid in this state to	2594
employees who are primarily engaged in qualified research.	2595

(i) Compensation means any form of remuneration paid to an	2596
employee for personal services.	2597

(ii) Compensation is paid in this state if: (1)(I) the	2598
recipient's service is performed entirely within this state,	2599
(2)(II) the recipient's service is performed both within and	2600
without this state, but the service performed without this state	2601
is incidental to the recipient's service within this state,	2602
(3)(III) some of the service is performed within this state and	2603
either the base of operations, or if there is no base of	2604
operations, the place from which the service is directed or	2605
controlled is within this state, or the base of operations or the	2606
place from which the service is directed or controlled is not in	2607
any state in which some part of the service is performed, but the	2608
recipient's residence is in this state.	2609

(iii) Compensation is paid in this state to any employee of a	2610
common or contract motor carrier corporation, who performs the	2611
employee's regularly assigned duties on a motor vehicle in more	2612
than one state, in the same ratio by which the mileage traveled by	2613
such employee within the state bears to the total mileage traveled	2614
by such employee everywhere during the taxable year.	2615

(c) Except as provided in section 5733.059 of the Revised	2616
Code, theThe sales factor is a fraction computed as follows:	2617

TheExcept as provided in this section, the numerator of the	2618
fraction is the total sales in this state by the corporation	2619
during the taxable year or part thereof, and the denominator of	2620
the fraction is the total sales by the corporation everywhere	2621
during such year or part thereof. In determiningcomputing the	2622
numerator and denominator of the fraction, the following shall be	2623
eliminated from the fraction: receipts and any related gains or	2624
losses from the sale or other disposal of a capital asset or an	2625
asset described in section 1231 of the Internal Revenue Code shall	2626
be eliminatedexcluded assets; dividends or distributions; and	2627
interest or other similar amounts received for the use of, or for	2628
the forbearance of the use of, money. Also, in determining	2629
computing the numerator and denominator of the sales factor, in	2630
the case of a reporting corporation owning at least eighty per	2631
cent of the issued and outstanding common stock of one or more	2632
insurance companies or public utilities, except an electric	2633
company and a combined company, and, for tax years 2005 and	2634
thereafter, a telephone company, or owning at least twenty-five	2635
per cent of the issued and outstanding common stock of one or more	2636
financial institutions, receipts received by the reporting	2637
corporation from such utilities, insurance companies, and	2638
financial institutions shall be eliminated. As used in this	2639
division, "excluded assets" means property that is either:	2640
intangible property, other than trademarks, trade names, patents,	2641
copyrights, and similar intellectual property; or tangible	2642
personal property or real property where that property is a	2643
capital asset or an asset described in section 1231 of the	2644
Internal Revenue Code, without regard to the holding period	2645
specified therein.	2646

(i) For the purpose of this section and section 5733.03 of	2647
the Revised Code, salesreceipts not eliminated or excluded from	2648
the fraction shall be sitused as follows:	2649

Receipts from rents and royalties from real property located	2650
in this state shall be sitused to this state.	2651

Receipts from rents and royalties of tangible personal	2652
property, to the extent the tangible personal property is used in	2653
this state, shall be sitused to this state.	2654

Receipts from the sale of electricity and of electric	2655
transmission and distribution services shall be sitused to this	2656
state in the manner provided under section 5733.059 of the Revised	2657
Code.	2658

Receipts from the sale of real property located in this state	2659
shall be sitused to this state.	2660

Receipts from the sale of tangible personal property are in	2661
shall be sitused to this state whereif such property is received	2662
in this state by the purchaser. In the case of delivery of	2663
tangible personal property by common carrier or by other means of	2664
transportation, the place at which such property is ultimately	2665
received after all transportation has been completed shall be	2666
considered as the place at which such property is received by the	2667
purchaser. Direct delivery in this state, other than for purposes	2668
of transportation, to a person or firm designated by a purchaser	2669
constitutes delivery to the purchaser in this state, and direct	2670
delivery outside this state to a person or firm designated by a	2671
purchaser does not constitute delivery to the purchaser in this	2672
state, regardless of where title passes or other conditions of	2673
sale.	2674

Except as provided in section 5733.059 of the Revised Code,	2675
sales,(ii) Receipts from all other than sales of tangible	2676
personal property, are in this state if either:	2677

(i) The income-producing activity is performed solely in this	2678
state;	2679

(ii) The income-producing activity is performed both within	2680
and without this state and a greater proportion of the seller's	2681
income-producing activity is performed within this state than in	2682
any other state, based on costs of performancenot eliminated or	2683
excluded from the fraction shall be sitused to this state as	2684
follows:	2685

Receipts from the sale, exchange, disposition, or other grant	2686
of the right to use trademarks, trade names, patents, copyrights,	2687
and similar intellectual property shall be sitused to this state	2688
to the extent that the receipts are based on the amount of use of	2689
that property in this state. If the receipts are not based on the	2690
amount of use of that property, but rather on the right to use the	2691
property and the payor has the right to use the property in this	2692
state, then the receipts from the sale, exchange, disposition, or	2693
other grant of the right to use such property shall be sitused to	2694
this state to the extent the receipts are based on the right to	2695
use the property in this state.	2696

Receipts from the sale of services, and receipts from any	2697
other sales not eliminated or excluded from the sales factor and	2698
not otherwise sitused under division (B)(2)(c) of this section,	2699
shall be sitused to this state in the proportion to the	2700
purchaser's benefit, with respect to the sale, in this state to	2701
the purchaser's benefit, with respect to the sale, everywhere. The	2702
physical location where the purchaser ultimately uses or receives	2703
the benefit of what was purchased shall be paramount in	2704
determining the proportion of the benefit in this state to the	2705
benefit everywhere.	2706

(iii) Income from receipts eliminated or excluded from the	2707
sales factor under division (B)(2)(c) of this section shall not be	2708
presumed to be nonbusiness income.	2709

(d) If the allocation and apportionment provisions of	2710
division (B) of this section do not fairly represent the extent of	2711
the taxpayer's business activity in this state, the taxpayer may	2712
request, which request must be in writing and must accompany the	2713
report, a timely filed petition for reassessment, or a timely	2714
filed amended report, or the tax commissioner may require, in	2715
respect to all or any part of the taxpayer's allocated or	2716
apportioned base, if reasonable, any one or more of the following:	2717

(i) Separate accounting;

2718

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

2719

(iii) The inclusion of one or more additional factors that	2720
will fairly represent the taxpayer's allocated or apportioned base	2721
in this state.	2722

An alternative method will be effective only with approval by	2723
the tax commissioner.	2724

Nothing in this section shall be construed to extend any	2725
statute of limitations set forth in this chapter.	2726

(e) The tax commissioner may adopt rules providing for	2727
alternative allocation and apportionment methods, and alternative	2728
calculations of a corporation's base, that apply to corporations	2729
engaged in telecommunications.	2730

(C)(1) The total value, as shown on the books of each	2731
corporation that is not a qualified holding company, of the net	2732
book value of the corporation's assets less the net carrying value	2733
of its liabilities, and excluding from the corporation's assets	2734
land devoted exclusively to agricultural use as of the first	2735
Monday of June in the corporation's taxable year as determined by	2736
the county auditor of the county in which the land is located	2737
pursuant to section 5713.31 of the Revised Code, and making any	2738
adjustment required by division (D) of this section. For the	2739
purposes of determining that total value, any reserves shown on	2740
the corporation's books shall be considered liabilities or contra	2741
assets, as the case may be, except for any reserves that are	2742
deemed appropriations of retained earnings under generally	2743
accepted accounting principles.	2744

(2) The base upon which the tax is levied under division (C)	2745
of section 5733.06 of the Revised Code shall be computed by	2746
multiplying the amount determined under division (C)(1) of this	2747
section by the fraction determined under divisions (B)(2)(a) to	2748
(c) of this section and, if applicable, divisions (B)(2)(d)(ii)	2749
and (iii) of this section, and withwithout regard to section	2750
5733.052 of the Revised Code, but substituting "net worth" for	2751
"net income" wherever "net income" appears in division (B)(2)(c)	2752
in this section. For purposes of division (C)(2) of this section,	2753
the numerator and denominator of each of the fractions shall	2754
include the portion of any real and tangible personal property,	2755
payroll, and sales, respectively, relating to, or used in	2756
connection with the production of, net nonbusiness income	2757
allocated under section 5733.051 of the Revised Code. Nothing in	2758
this division shall allow any amount to be included in the	2759
numerator or denominator more than once.	2760

(D)(1) If, on the last day of the taxpayer's taxable year	2761
preceding the tax year, the taxpayer is a related member to a	2762
corporation that elects to be a qualifying holding company for the	2763
tax year beginning after the last day of the taxpayer's taxable	2764
year, or if, on the last day of the taxpayer's taxable year	2765
preceding the tax year, a corporation that elects to be a	2766
qualifying holding company for the tax year beginning after the	2767
last day of the taxpayer's taxable year is a related member to the	2768
taxpayer, then the taxpayer's total value for the purposes of	2769
division (C) of this section shall be adjusted by the qualifying	2770
amount. Except as otherwise provided under division (D)(2) of this	2771
section, "qualifying amount" means the amount that, when added to	2772
the taxpayer's total value, and when subtracted from the net	2773
carrying value of the taxpayer's liabilities computed without	2774
regard to division (C)(2) of this section, or when subtracted from	2775
the taxpayer's total value and when added to the net carrying	2776
value of the taxpayer's liabilities computed without regard to	2777
division (D) of this section, results in the taxpayer's	2778
debt-to-equity ratio equaling the debt-to-equity ratio of the	2779
qualifying controlled group on the last day of the taxable year	2780
ending prior to the first day of the tax year computed on a	2781
consolidated basis in accordance with general accepted accounting	2782
principles. For the purposes of division (D)(1) of this section,	2783
the corporation's total value, after the adjustment required by	2784
that division, shall not exceed the net book value of the	2785
corporation's assets.	2786

(2)(a) The amount added to the taxpayer's total value and	2787
subtracted from the net carrying value of the taxpayer's	2788
liabilities shall not exceed the amount of the net carrying value	2789
of the taxpayer's liabilities owed to the taxpayer's related	2790
members.	2791

(b) A liability owed to the taxpayer's related members	2792
includes, but is not limited to, any amount that the corporation	2793
owes to a person that is not a related member if the corporation's	2794
related member or related members in whole or in part guarantee	2795
any portion or all of that amount, or pledge, hypothecate,	2796
mortgage, or carry out any similar transactions to secure any	2797
portion or all of that amount.	2798

(3) The base upon which the tax is levied under division (C)	2799
of section 5733.06 of the Revised Code shall be computed by	2800
multiplying the amount determined under divisions (C) and (D) of	2801
this section but without regard to section 5733.052 of the Revised	2802
Code.	2803

(4) For purposes of division (D) of this section, "related	2804
member" has the same meaning as in section 5733.042 of the Revised	2805
Code.	2806

Sec. 5733.33.  (A) As used in this section:

2807

(1) "Manufacturing machinery and equipment" means engines and	2808
machinery, and tools and implements, of every kind used, or	2809
designed to be used, in refining and manufacturing. "Manufacturing	2810
machinery and equipment" does not include property acquired after	2811
December 31, 1999, that is used:	2812

(a) For the transmission and distribution of electricity;

2813

(b) For the generation of electricity, if fifty per cent or	2814
more of the electricity that the property generates is consumed,	2815
during the one-hundred-twenty-month period commencing with the	2816
date the property is placed in service, by persons that are not	2817
related members to the person who generates the electricity.	2818

(2) "New manufacturing machinery and equipment" means	2819
manufacturing machinery and equipment, the original use in this	2820
state of which commences with the taxpayer or with a partnership	2821
of which the taxpayer is a partner. "New manufacturing machinery	2822
and equipment" does not include property acquired after December	2823
31, 1999, that is used:	2824

(a) For the transmission and distribution of electricity;

2825

(b) For the generation of electricity, if fifty per cent or	2826
more of the electricity that the property generates is consumed,	2827
during the one-hundred-twenty-month period commencing with the	2828
date the property is placed in service, by persons that are not	2829
related members to the person who generates the electricity.	2830

(3)(a) "Purchase" has the same meaning as in section	2831
179(d)(2) of the Internal Revenue Code.	2832

(b) For purposes of this section, any property that is not	2833
manufactured or assembled primarily by the taxpayer is considered	2834
purchased at the time the agreement to acquire the property	2835
becomes binding. Any property that is manufactured or assembled	2836
primarily by the taxpayer is considered purchased at the time the	2837
taxpayer places the property in service in the county for which	2838
the taxpayer will calculate the county excess amount.	2839

(c) Notwithstanding section 179(d) of the Internal Revenue	2840
Code, a taxpayer's direct or indirect acquisition of new	2841
manufacturing machinery and equipment is not purchased on or after	2842
July 1, 1995, if the taxpayer, or a person whose relationship to	2843
the taxpayer is described in subparagraphs (A), (B), or (C) of	2844
section 179(d)(2) of the Internal Revenue Code, had directly or	2845
indirectly entered into a binding agreement to acquire the	2846
property at any time prior to July 1, 1995.	2847

(4) "Qualifying period" means the period that begins July 1,	2848
1995, and ends December 31, 20052015.	2849

(5) "County average new manufacturing machinery and equipment	2850
investment" means either of the following:	2851

(a) The average annual cost of new manufacturing machinery	2852
and equipment purchased for use in the county during baseline	2853
years, in the case of a taxpayer that was in existence for more	2854
than one year during baseline years.	2855

(b) Zero, in the case of a taxpayer that was not in existence	2856
for more than one year during baseline years.	2857

(6) "Partnership" includes a limited liability company formed	2858
under Chapter 1705. of the Revised Code or under the laws of any	2859
other state, provided that the company is not classified for	2860
federal income tax purposes as an association taxable as a	2861
corporation.	2862

(7) "Partner" includes a member of a limited liability	2863
company formed under Chapter 1705. of the Revised Code or under	2864
the laws of any other state, provided that the company is not	2865
classified for federal income tax purposes as an association	2866
taxable as a corporation.	2867

(8) "Distressed area" means either a municipal corporation	2868
that has a population of at least fifty thousand or a county that	2869
meets two of the following criteria of economic distress, or a	2870
municipal corporation the majority of the population of which is	2871
situated in such a county:	2872

(a) Its average rate of unemployment, during the most recent	2873
five-year period for which data are available, is equal to at	2874
least one hundred twenty-five per cent of the average rate of	2875
unemployment for the United States for the same period;	2876

(b) It has a per capita income equal to or below eighty per	2877
cent of the median county per capita income of the United States	2878
as determined by the most recently available figures from the	2879
United States census bureau;	2880

(c)(i) In the case of a municipal corporation, at least	2881
twenty per cent of the residents have a total income for the most	2882
recent census year that is below the official poverty line;	2883

(ii) In the case of a county, in intercensal years, the	2884
county has a ratio of transfer payment income to total county	2885
income equal to or greater than twenty-five per cent.	2886

(9) "Eligible area" means a distressed area, a labor surplus	2887
area, an inner city area, or a situational distress area.	2888

(10) "Inner city area" means, in a municipal corporation that	2889
has a population of at least one hundred thousand and does not	2890
meet the criteria of a labor surplus area or a distressed area,	2891
targeted investment areas established by the municipal corporation	2892
within its boundaries that are comprised of the most recent census	2893
block tracts that individually have at least twenty per cent of	2894
their population at or below the state poverty level or other	2895
census block tracts contiguous to such census block tracts.	2896

(11) "Labor surplus area" means an area designated as a labor	2897
surplus area by the United States department of labor.	2898

(12) "Official poverty line" has the same meaning as in	2899
division (A) of section 3923.51 of the Revised Code.	2900

(13) "Situational distress area" means a county or a	2901
municipal corporation that has experienced or is experiencing a	2902
closing or downsizing of a major employer, that will adversely	2903
affect the county's or municipal corporation's economy. In order	2904
to be designated as a situational distress area for a period not	2905
to exceed thirty-six months, the county or municipal corporation	2906
may petition the director of development. The petition shall	2907
include written documentation that demonstrates all of the	2908
following adverse effects on the local economy:	2909

(a) The number of jobs lost by the closing or downsizing;

2910

(b) The impact that the job loss has on the county's or	2911
municipal corporation's unemployment rate as measured by the state	2912
director of job and family services;	2913

(c) The annual payroll associated with the job loss;

2914

(d) The amount of state and local taxes associated with the	2915
job loss;	2916

(e) The impact that the closing or downsizing has on the	2917
suppliers located in the county or municipal corporation.	2918

(14) "Cost" has the same meaning and limitation as in section	2919
179(d)(3) of the Internal Revenue Code.	2920

(15) "Baseline years" means:

2921

(a) Calendar years 1992, 1993, and 1994, with regard to a	2922
credit claimed for the purchase during calendar year 1995, 1996,	2923
1997, or 1998 of new manufacturing machinery and equipment;	2924

(b) Calendar years 1993, 1994, and 1995, with regard to a	2925
credit claimed for the purchase during calendar year 1999 of new	2926
manufacturing machinery and equipment;	2927

(c) Calendar years 1994, 1995, and 1996, with regard to a	2928
credit claimed for the purchase during calendar year 2000 of new	2929
manufacturing machinery and equipment;	2930

(d) Calendar years 1995, 1996, and 1997, with regard to a	2931
credit claimed for the purchase during calendar year 2001 of new	2932
manufacturing machinery and equipment;	2933

(e) Calendar years 1996, 1997, and 1998, with regard to a	2934
credit claimed for the purchase during calendar year 2002 of new	2935
manufacturing machinery and equipment;	2936

(f) Calendar years 1997, 1998, and 1999, with regard to a	2937
credit claimed for the purchase during calendar year 2003 of new	2938
manufacturing machinery and equipment;	2939

(g) Calendar years 1998, 1999, and 2000, with regard to a	2940
credit claimed for the purchase during calendar year 2004 of new	2941
manufacturing machinery and equipment;	2942

(h) Calendar years 1999, 2000, and 2001, with regard to a	2943
credit claimed for the purchase during calendar year 2005 of new	2944
manufacturing machinery and equipment;	2945

(i) Calendar years 2000, 2001, and 2002, with regard to a	2946
credit claimed for the purchase during calendar year 2006 of new	2947
manufacturing machinery and equipment;	2948

(j) Calendar years 2001, 2002, and 2003, with regard to a	2949
credit claimed for the purchase during calendar year 2007 of new	2950
manufacturing machinery and equipment;	2951

(k) Calendar years 2002, 2003, and 2004, with regard to a	2952
credit claimed for the purchase during calendar year 2008 of new	2953
manufacturing machinery and equipment;	2954

(l) Calendar years 2003, 2004, and 2005, with regard to a	2955
credit claimed for the purchase during calendar year 2009 of new	2956
manufacturing machinery and equipment;	2957

(m) Calendar years 2004, 2005, and 2006, with regard to a	2958
credit claimed for the purchase during calendar year 2010 of new	2959
manufacturing machinery and equipment;	2960

(n) Calendar years 2005, 2006, and 2007, with regard to a	2961
credit claimed for the purchase during calendar year 2011 of new	2962
manufacturing machinery and equipment;	2963

(o) Calendar years 2006, 2007, and 2008, with regard to a	2964
credit claimed for the purchase during calendar year 2012 of new	2965
manufacturing machinery and equipment;	2966

(p) Calendar years 2007, 2008, and 2009, with regard to a	2967
credit claimed for the purchase during calendar year 2013 of new	2968
manufacturing machinery and equipment;	2969

(q) Calendar years 2008, 2009, and 2010, with regard to a	2970
credit claimed for the purchase during calendar year 2014 of new	2971
manufacturing machinery and equipment;	2972

(r) Calendar years 2009, 2010, and 2011, with regard to a	2973
credit claimed for the purchase during calendar year 2015 of new	2974
manufacturing machinery and equipment.	2975

(16) "Related member" has the same meaning as in section	2976
5733.042 of the Revised Code.	2977

(B)(1) Subject to division (I) of this section, a	2978
nonrefundable credit is allowed against the tax imposed by section	2979
5733.06 of the Revised Code for a taxpayer that purchases new	2980
manufacturing machinery and equipment during the qualifying	2981
period, provided that the new manufacturing machinery and	2982
equipment are installed in this state no later than December 31,	2983
20062016.	2984

(2)(a) Except as otherwise provided in division (B)(2)(b) of	2985
this section, a credit may be claimed under this section in excess	2986
of one million dollars only if the cost of all manufacturing	2987
machinery and equipment owned in this state by the taxpayer	2988
claiming the credit on the last day of the calendar year exceeds	2989
the cost of all manufacturing machinery and equipment owned in	2990
this state by the taxpayer on the first day of that calendar year.	2991

As used in division (B)(2)(a) of this section, "calendar	2992
year" means the calendar year in which the machinery and equipment	2993
for which the credit is claimed was purchased.	2994

(b) Division (B)(2)(a) of this section does not apply if the	2995
taxpayer claiming the credit applies for and is issued a waiver of	2996
the requirement of that division. A taxpayer may apply to the	2997
director of development for such a waiver in the manner prescribed	2998
by the director, and the director may issue such a waiver if the	2999
director determines that granting the credit is necessary to	3000
increase or retain employees in this state, and that the credit	3001
has not caused relocation of manufacturing machinery and equipment	3002
among counties within this state for the primary purpose of	3003
qualifying for the credit.	3004

(C)(1) Except as otherwise provided in division (C)(2) and	3005
division (I) of this section, the credit amount is equal to seven	3006
and one-half per cent of the excess of the cost of the new	3007
manufacturing machinery and equipment purchased during the	3008
calendar year for use in a county over the county average new	3009
manufacturing machinery and equipment investment for that county.	3010

(2) Subject to division (I) of this section, as used in	3011
division (C)(2) of this section "county excess" means the	3012
taxpayer's excess cost for a county as computed under division	3013
(C)(1) of this section.	3014

Subject to division (I) of this section, a taxpayer with a	3015
county excess, whose purchases included purchases for use in any	3016
eligible area in the county, the credit amount is equal to	3017
thirteen and one-half per cent of the cost of the new	3018
manufacturing machinery and equipment purchased during the	3019
calendar year for use in the eligible areas in the county,	3020
provided that the cost subject to the thirteen and one-half per	3021
cent rate shall not exceed the county excess. If the county excess	3022
is greater than the cost of the new manufacturing machinery and	3023
equipment purchased during the calendar year for use in eligible	3024
areas in the county, the credit amount also shall include an	3025
amount equal to seven and one-half per cent of the amount of the	3026
difference.	3027

(3) If a taxpayer is allowed a credit for purchases of new	3028
manufacturing machinery and equipment in more than one county or	3029
eligible area, it shall aggregate the amount of those credits each	3030
year.	3031

(4) The taxpayer shall claim one-seventh of the credit amount	3032
for the tax year immediately following the calendar year in which	3033
the new manufacturing machinery and equipment is purchased for use	3034
in the county by the taxpayer or partnership. One-seventh of the	3035
taxpayer credit amount is allowed for each of the six ensuing tax	3036
years. Except for carried-forward amounts, the taxpayer is not	3037
allowed any credit amount remaining if the new manufacturing	3038
machinery and equipment is sold by the taxpayer or partnership or	3039
is transferred by the taxpayer or partnership out of the county	3040
before the end of the seven-year period unless, at the time of the	3041
sale or transfer, the new manufacturing machinery and equipment	3042
has been fully depreciated for federal income tax purposes.	3043

(5)(a) A taxpayer that acquires manufacturing machinery and	3044
equipment as a result of a merger with the taxpayer with whom	3045
commenced the original use in this state of the manufacturing	3046
machinery and equipment, or with a taxpayer that was a partner in	3047
a partnership with whom commenced the original use in this state	3048
of the manufacturing machinery and equipment, is entitled to any	3049
remaining or carried-forward credit amounts to which the taxpayer	3050
was entitled.	3051

(b) A taxpayer that enters into an agreement under division	3052
(C)(3) of section 5709.62 of the Revised Code and that acquires	3053
manufacturing machinery or equipment as a result of purchasing a	3054
large manufacturing facility, as defined in section 5709.61 of the	3055
Revised Code, from another taxpayer with whom commenced the	3056
original use in this state of the manufacturing machinery or	3057
equipment, and that operates the large manufacturing facility so	3058
purchased, is entitled to any remaining or carried-forward credit	3059
amounts to which the other taxpayer who sold the facility would	3060
have been entitled under this section had the other taxpayer not	3061
sold the manufacturing facility or equipment.	3062

(c) New manufacturing machinery and equipment is not	3063
considered sold if a pass-through entity transfers to another	3064
pass-through entity substantially all of its assets as part of a	3065
plan of reorganization under which substantially all gain and loss	3066
is not recognized by the pass-through entity that is transferring	3067
the new manufacturing machinery and equipment to the transferee	3068
and under which the transferee's basis in the new manufacturing	3069
machinery and equipment is determined, in whole or in part, by	3070
reference to the basis of the pass-through entity which	3071
transferred the new manufacturing machinery and equipment to the	3072
transferee.	3073

(d) Division (C)(5) of this section shall apply only if the	3074
acquiring taxpayer or transferee does not sell the new	3075
manufacturing machinery and equipment or transfer the new	3076
manufacturing machinery and equipment out of the county before the	3077
end of the seven-year period to which division (C)(4) of this	3078
section refers.	3079

(e) Division (C)(5)(b) of this section applies only to the	3080
extent that the taxpayer that sold the manufacturing machinery or	3081
equipment, upon request, timely provides to the tax commissioner	3082
any information that the tax commissioner considers to be	3083
necessary to ascertain any remaining or carried-forward amounts to	3084
which the taxpayer that sold the facility would have been entitled	3085
under this section had the taxpayer not sold the manufacturing	3086
machinery or equipment. Nothing in division (C)(5)(b) or (e) of	3087
this section shall be construed to allow a taxpayer to claim any	3088
credit amount with respect to the acquired manufacturing machinery	3089
or equipment that is greater than the amount that would have been	3090
available to the other taxpayer that sold the manufacturing	3091
machinery or equipment had the other taxpayer not sold the	3092
manufacturing machinery or equipment.	3093

(D) The taxpayer shall claim the credit in the order required	3094
under section 5733.98 of the Revised Code. Each year, any credit	3095
amount in excess of the tax due under section 5733.06 of the	3096
Revised Code after allowing for any other credits that precede the	3097
credit under this section in that order may be carried forward for	3098
three tax years.	3099

(E) A taxpayer purchasing new manufacturing machinery and	3100
equipment and intending to claim the credit shall file, with the	3101
department of development, a notice of intent to claim the credit	3102
on a form prescribed by the department of development. The	3103
department of development shall inform the tax commissioner of the	3104
notice of intent to claim the credit.	3105

(F) The director of development shall annually certify, by	3106
the first day of January of each year during the qualifying	3107
period, the eligible areas for the tax credit for the calendar	3108
year that includes that first day of January. The director shall	3109
send a copy of the certification to the tax commissioner.	3110

(G) New manufacturing machinery and equipment for which a	3111
taxpayer claims the credit under section 5733.31, 5733.311,	3112
5747.26, or 5747.261 of the Revised Code shall not be considered	3113
new manufacturing machinery and equipment for purposes of the	3114
credit under this section.	3115

(H)(1) Notwithstanding sections 5733.11 and 5747.13 of the	3116
Revised Code, but subject to division (H)(2) of this section, the	3117
tax commissioner may issue an assessment against a person with	3118
respect to a credit claimed under this section for new	3119
manufacturing machinery and equipment described in division	3120
(A)(1)(b) or (2)(b) of this section, if the machinery or equipment	3121
subsequently does not qualify for the credit.	3122

(2) Division (H)(1) of this section shall not apply after the	3123
twenty-fourth month following the last day of the period described	3124
in divisions (A)(1)(b) and (2)(b) of this section.	3125

(I) Notwithstanding any other provision of this section to	3126
the contrary, in the case of a qualifying controlled group, the	3127
credit available under this section to a taxpayer or taxpayers in	3128
the qualifying controlled group shall be computed as if all	3129
corporations in the group were a single corporation. The credit	3130
shall be allocated to such a taxpayer or taxpayers in the group in	3131
any amount elected for the taxable year by the group. Such	3132
election shall be revocable and amendable during the period	3133
described in division (B) of section 5733.12 of the Revised Code.	3134

This division applies to all purchases of new manufacturing	3135
machinery and equipment made on or after January 1, 2001, and to	3136
all baseline years used to compute any credit attributable to such	3137
purchases; provided, that this division may be applied solely at	3138
the election of the qualifying controlled group with respect to	3139
all purchases of new manufacturing machinery and equipment made	3140
before that date, and to all baseline years used to compute any	3141
credit attributable to such purchases. The qualifying controlled	3142
group at any time may elect to apply this division to purchases	3143
made prior to January 1, 2001, subject to the following:	3144

(1) The election is irrevocable;

3145

(2) The election need not accompany a timely filed report,	3146
but the election may accompany a subsequently filed but timely	3147
application for refund, a subsequently filed but timely amended	3148
report, or a subsequently filed but timely petition for	3149
reassessment.	3150

Sec. 5735.01.  As used in this chapter:

3151

(A) "Motor vehicles" includes all vehicles, vessels,	3152
watercraft, engines, machines, or mechanical contrivances which	3153
are powered by internal combustion engines or motors.	3154

(B) "Motor fuel" means gasoline, diesel fuel, K-1 kerosene,	3155
or any other liquid motor fuel, including, but not limited to,	3156
liquid petroleum gas or liquid natural gas, but excluding	3157
substances prepackaged and sold in containers of five gallons or	3158
less.	3159

(C) "K-1 Kerosene" means fuel that conforms to the chemical	3160
and physical standards for kerosene no. 1-K as set forth in the	3161
american society for testing and materials (ASTM) designated	3162
D-3699 "standard for specification for kerosene," as that standard	3163
may be modified from time to time. For purposes of inspection and	3164
testing, laboratory analysis shall be conducted using methods	3165
recognized by the ASTM designation D-3699.	3166

(D) "Diesel fuel" means any liquid fuel capable of use in	3167
discrete form or as a blend component in the operation of engines	3168
of the diesel type, including transmix when mixed with diesel	3169
fuel.	3170

(E) "Gasoline" means any of the following:

3171

(1) All products, commonly or commercially known or sold as	3172
gasoline;	3173

(2) Any blend stocks or additives, including alcohol, that	3174
are sold for blending with gasoline, other than products typically	3175
sold in containers of five gallons or less;	3176

(3) Transmix when mixed with gasoline, unless certified, as	3177
required by the tax commissioner, for withdrawal from terminals	3178
for reprocessing at refineries;	3179

(4) Alcohol that is offered for sale or sold for use as, or	3180
commonly and commercially used as, a fuel for internal combustion	3181
engines.	3182

Gasoline does not include diesel fuel, commercial or	3183
industrial napthas or solvents manufactured, imported, received,	3184
stored, distributed, sold, or used exclusively for purposes other	3185
than as a motor fuel for a motor vehicle or vessel. The blending	3186
of any of the products listed in the preceding sentence,	3187
regardless of name or characteristics, is conclusively presumed to	3188
have been done to produce gasoline, unless the product obtained by	3189
the blending is entirely incapable for use as fuel to operate a	3190
motor vehicle. An additive, blend stock, or alcohol is presumed to	3191
be sold for blending unless a certification is obtained as	3192
required by the tax commissioner.	3193

(F) "Public highways" means lands and lots over which the	3194
public, either as user or owner, generally has a right to pass,	3195
even though the same are closed temporarily by the authorities for	3196
the purpose of construction, reconstruction, maintenance, or	3197
repair.	3198

(G) "Waters within the boundaries of this state" means all	3199
streams, lakes, ponds, marshes, water courses, and all other	3200
bodies of surface water, natural or artificial, which are situated	3201
wholly or partially within this state or within its jurisdiction,	3202
except private impounded bodies of water.	3203

(H) "Person" includes individuals, partnerships, firms,	3204
associations, corporations, receivers, trustees in bankruptcy,	3205
estates, joint-stock companies, joint ventures, the state and its	3206
political subdivisions, and any combination of persons of any	3207
form.	3208

(I)(1) "Motor fuel dealer" means any person who satisfies any	3209
of the following:	3210

(a) The person imports from another state or foreign country	3211
or acquires motor fuel by any means into a terminal in this state;	3212

(b) The person imports motor fuel from another state or	3213
foreign country in bulk lot vehicles for subsequent sale and	3214
distribution in this state from bulk lot vehicles;	3215

(c) The person refines motor fuel in this state;

3216

(d) The person acquires motor fuel from a motor fuel dealer	3217
for subsequent sale and distribution by that person in this state	3218
from bulk lot vehicles;	3219

(e) The person possesses an unrevoked permissive motor fuel	3220
dealer's license.	3221

(2) Any person who obtains dyed diesel fuel for use other	3222
than the operation of motor vehicles upon the public highways or	3223
upon waters within the boundaries of this state, but later uses	3224
that motor fuel for the operation of motor vehicles upon the	3225
public highways or upon waters within the boundaries of this	3226
state, is deemed a motor fuel dealer as regards any unpaid motor	3227
fuel taxes levied on the motor fuel so used.	3228

(J) As used in sections 5735.05, 5735.25, 5735.29, and	3229
5735.30 of the Revised Code only:	3230

(1) With respect to gasoline, "received" or "receipt" shall	3231
be construed as follows:	3232

(a) Gasoline produced at a refinery in this state or	3233
delivered to a terminal in this state is deemed received when it	3234
is disbursed through a loading rack at that refinery or terminal;	3235

(b) Except as provided in division (J)(1)(a) of this section,	3236
gasoline imported into this state or purchased or otherwise	3237
acquired in this state by any person is deemed received within	3238
this state by that person when the gasoline is withdrawn from the	3239
container in which it was transported;	3240

(c) Gasoline delivered or disbursed by any means from a	3241
terminal directly to another terminal is not deemed received.	3242

(2) With respect to motor fuel other than gasoline,	3243
"received" or "receipt" means distributed or sold for use or used	3244
to generate power for the operation of motor vehicles upon the	3245
public highways or upon waters within the boundaries of this	3246
state. All diesel fuel that is not dyed diesel fuel, regardless of	3247
its use, shall be considered as used to generate power for the	3248
operation of motor vehicles upon the public highways or upon	3249
waters within the boundaries of this state when the fuel is sold	3250
or distributed to a person other than a licensed motor fuel dealer	3251
or to a person licensed under section 5735.026 of the Revised	3252
Code.	3253

(K) Motor fuel used for the operation of licensed motor	3254
vehicles employed in the maintenance, construction, or repair of	3255
public highways is deemed to be used for the operation of motor	3256
vehicles upon the public highways.	3257

(L) "Licensed motor fuel dealer" means any dealer possessing	3258
an unrevoked motor fuel dealer's license issued by the tax	3259
commissioner as provided in section 5735.02 of the Revised Code.	3260

(M) "Licensed retail dealer" means any retail dealer	3261
possessing an unrevoked retail dealer's license issued by the tax	3262
commissioner as provided in section 5735.022 of the Revised Code.	3263

(N) "Cents per gallon rate" means the amount computed by the	3264
tax commissioner under section 5735.011 of the Revised Code that	3265
is used to determine that portion of the tax levied by section	3266
5735.05 of the Revised Code that is computed in the manner	3267
prescribed by division (B)(2) of section 5735.06 of the Revised	3268
Code and that is applicable for the period that begins on the	3269
first day of July following the date on which the commissioner	3270
makes the computation.	3271

(O) "Retail dealer" means any person that sells or	3272
distributes motor fuel at a retail service station located in this	3273
state.	3274

(P) "Retail service station" means a location from which	3275
motor fuel is sold to the general public and is dispensed or	3276
pumped directly into motor vehicle fuel tanks for consumption.	3277

(Q) "Transit bus" means a motor vehicle having a seating	3278
capacity of more than ten persons whichthat is operated for	3279
public transit or paratransit service on a regular and continuing	3280
basis within the state by or for a county, a municipal	3281
corporation, a county transit board pursuant to sections 306.01 to	3282
306.13 of the Revised Code, a regional transit authority pursuant	3283
to sections 306.30 to 306.54 of the Revised Code, or a regional	3284
transit commission pursuant to sections 306.80 to 306.90 of the	3285
Revised Code. Public transit or paratransit service may include	3286
fixed route, demand-responsive, or subscription bus service	3287
transportation, but does not include shared-ride taxi service,	3288
carpools, vanpools, jitney service, school bus transportation, or	3289
charter or sightseeing services.	3290

(R) "Export" means motor fuel delivered outside this state.	3291
Motor fuel delivered outside this state by or for the seller	3292
constitutes an export by the seller. Motor fuel delivered outside	3293
this state by or for the purchaser constitutes an export by the	3294
purchaser.	3295

(S) "Import" means motor fuel delivered into this state from	3296
outside this state. Motor fuel delivered into this state from	3297
outside this state by or for the seller constitutes an import by	3298
the seller. Motor fuel delivered into this state from outside this	3299
state by or for the purchaser constitutes an import by the	3300
purchaser.	3301

(T) "Terminal" means a motor fuel storage or distribution	3302
facility that is supplied by pipeline or marine vessel.	3303

(U) "Consumer" means a buyer of motor fuel for purposes other	3304
than resale in any form.	3305

(V) "Bulk lot vehicle" means railroad tank cars, transport	3306
tank trucks and tank wagons with a capacity of at least 1,400	3307
gallons.	3308

(W) "Licensed permissive motor fuel dealer" means any person	3309
possessing an unrevoked permissive motor fuel dealer's license	3310
issued by the tax commissioner under section 5735.021 of the	3311
Revised Code.	3312

(X) "Licensed terminal operator" means any person possessing	3313
an unrevoked terminal operator's license issued by the tax	3314
commissioner under section 5735.026 of the Revised Code.	3315

(Y) "Licensed exporter" means any person possessing an	3316
unrevoked exporter's license issued by the tax commissioner under	3317
section 5735.026 of the Revised Code.	3318

(Z) "Dyed diesel fuel" means any diesel fuel dyed pursuant to	3319
regulations issued by the internal revenue service or a rule	3320
promulgated by the tax commissioner.	3321

(AA) "Gross gallons" means U.S. gallons without temperature	3322
or barometric adjustments.	3323

(BB) "Net gallons" means U.S. gallons with a temperature	3324
adjustment to sixty degrees fahrenheit.	3325

Sec. 5747.01.  Except as otherwise expressly provided or	3326
clearly appearing from the context, any term used in this chapter	3327
has the same meaning as when used in a comparable context in the	3328
Internal Revenue Code, and all other statutes of the United States	3329
relating to federal income taxes.	3330

As used in this chapter:

3331

(A) "Adjusted gross income" or "Ohio adjusted gross income"	3332
means federal adjusted gross income, as defined and used in the	3333
Internal Revenue Code, adjusted as provided in this section:	3334

(1) Add interest or dividends on obligations or securities of	3335
any state or of any political subdivision or authority of any	3336
state, other than this state and its subdivisions and authorities.	3337

(2) Add interest or dividends on obligations of any	3338
authority, commission, instrumentality, territory, or possession	3339
of the United States to the extent that the interest or dividends	3340
are exempt from federal income taxes but not from state income	3341
taxes.	3342

(3) Deduct interest or dividends on obligations of the United	3343
States and its territories and possessions or of any authority,	3344
commission, or instrumentality of the United States to the extent	3345
that the interest or dividends are included in federal adjusted	3346
gross income but exempt from state income taxes under the laws of	3347
the United States.	3348

(4) Deduct disability and survivor's benefits to the extent	3349
included in federal adjusted gross income.	3350

(5) Deduct benefits under Title II of the Social Security Act	3351
and tier 1 railroad retirement benefits to the extent included in	3352
federal adjusted gross income under section 86 of the Internal	3353
Revenue Code.	3354

(6) In the case of a taxpayer who is a beneficiary of a trust	3355
that makes an accumulation distribution as defined in section 665	3356
of the Internal Revenue Code, add, for the beneficiary's taxable	3357
years beginning before 2002 or after 2004, the portion, if any, of	3358
such distribution that does not exceed the undistributed net	3359
income of the trust for the three taxable years preceding the	3360
taxable year in which the distribution is made to the extent that	3361
the portion was not included in the trust's taxable income for any	3362
of the trust's taxable years beginning in 2002, 2003, or 2004.	3363
"Undistributed net income of a trust" means the taxable income of	3364
the trust increased by (a)(i) the additions to adjusted gross	3365
income required under division (A) of this section and (ii) the	3366
personal exemptions allowed to the trust pursuant to section	3367
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	3368
deductions to adjusted gross income required under division (A) of	3369
this section, (ii) the amount of federal income taxes attributable	3370
to such income, and (iii) the amount of taxable income that has	3371
been included in the adjusted gross income of a beneficiary by	3372
reason of a prior accumulation distribution. Any undistributed net	3373
income included in the adjusted gross income of a beneficiary	3374
shall reduce the undistributed net income of the trust commencing	3375
with the earliest years of the accumulation period.	3376

(7) Deduct the amount of wages and salaries, if any, not	3377
otherwise allowable as a deduction but that would have been	3378
allowable as a deduction in computing federal adjusted gross	3379
income for the taxable year, had the targeted jobs credit allowed	3380
and determined under sections 38, 51, and 52 of the Internal	3381
Revenue Code not been in effect.	3382

(8) Deduct any interest or interest equivalent on public	3383
obligations and purchase obligations to the extent that the	3384
interest or interest equivalent is included in federal adjusted	3385
gross income.	3386

(9) Add any loss or deduct any gain resulting from the sale,	3387
exchange, or other disposition of public obligations to the extent	3388
that the loss has been deducted or the gain has been included in	3389
computing federal adjusted gross income.	3390

(10) Deduct or add amounts, as provided under section 5747.70	3391
of the Revised Code, related to contributions to variable college	3392
savings program accounts made or tuition credits purchased	3393
pursuant to Chapter 3334. of the Revised Code.	3394

(11)(a) Deduct, to the extent not otherwise allowable as a	3395
deduction or exclusion in computing federal or Ohio adjusted gross	3396
income for the taxable year, the amount the taxpayer paid during	3397
the taxable year for medical care insurance and qualified	3398
long-term care insurance for the taxpayer, the taxpayer's spouse,	3399
and dependents. No deduction for medical care insurance under	3400
division (A)(11) of this section shall be allowed either to any	3401
taxpayer who is eligible to participate in any subsidized health	3402
plan maintained by any employer of the taxpayer or of the	3403
taxpayer's spouse, or to any taxpayer who is entitled to, or on	3404
application would be entitled to, benefits under part A of Title	3405
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	3406
301, as amended. For the purposes of division (A)(11)(a) of this	3407
section, "subsidized health plan" means a health plan for which	3408
the employer pays any portion of the plan's cost. The deduction	3409
allowed under division (A)(11)(a) of this section shall be the net	3410
of any related premium refunds, related premium reimbursements, or	3411
related insurance premium dividends received during the taxable	3412
year.	3413

(b) Deduct, to the extent not otherwise deducted or excluded	3414
in computing federal or Ohio adjusted gross income during the	3415
taxable year, the amount the taxpayer paid during the taxable	3416
year, not compensated for by any insurance or otherwise, for	3417
medical care of the taxpayer, the taxpayer's spouse, and	3418
dependents, to the extent the expenses exceed seven and one-half	3419
per cent of the taxpayer's federal adjusted gross income.	3420

(c) For purposes of division (A)(11) of this section,	3421
"medical care" has the meaning given in section 213 of the	3422
Internal Revenue Code, subject to the special rules, limitations,	3423
and exclusions set forth therein, and "qualified long-term care"	3424
has the same meaning given in section 7702(B)(b) of the Internal	3425
Revenue Code.	3426

(12)(a) Deduct any amount included in federal adjusted gross	3427
income solely because the amount represents a reimbursement or	3428
refund of expenses that in any year the taxpayer had deducted as	3429
an itemized deduction pursuant to section 63 of the Internal	3430
Revenue Code and applicable United States department of the	3431
treasury regulations. The deduction otherwise allowed under	3432
division (A)(12)(a) of this section shall be reduced to the extent	3433
the reimbursement is attributable to an amount the taxpayer	3434
deducted under this section in any taxable year.	3435

(b) Add any amount not otherwise included in Ohio adjusted	3436
gross income for any taxable year to the extent that the amount is	3437
attributable to the recovery during the taxable year of any amount	3438
deducted or excluded in computing federal or Ohio adjusted gross	3439
income in any taxable year.	3440

(13) Deduct any portion of the deduction described in section	3441
1341(a)(2) of the Internal Revenue Code, for repaying previously	3442
reported income received under a claim of right, that meets both	3443
of the following requirements:	3444

(a) It is allowable for repayment of an item that was	3445
included in the taxpayer's adjusted gross income for a prior	3446
taxable year and did not qualify for a credit under division (A)	3447
or (B) of section 5747.05 of the Revised Code for that year;	3448

(b) It does not otherwise reduce the taxpayer's adjusted	3449
gross income for the current or any other taxable year.	3450

(14) Deduct an amount equal to the deposits made to, and net	3451
investment earnings of, a medical savings account during the	3452
taxable year, in accordance with section 3924.66 of the Revised	3453
Code. The deduction allowed by division (A)(14) of this section	3454
does not apply to medical savings account deposits and earnings	3455
otherwise deducted or excluded for the current or any other	3456
taxable year from the taxpayer's federal adjusted gross income.	3457

(15)(a) Add an amount equal to the funds withdrawn from a	3458
medical savings account during the taxable year, and the net	3459
investment earnings on those funds, when the funds withdrawn were	3460
used for any purpose other than to reimburse an account holder	3461
for, or to pay, eligible medical expenses, in accordance with	3462
section 3924.66 of the Revised Code;	3463

(b) Add the amounts distributed from a medical savings	3464
account under division (A)(2) of section 3924.68 of the Revised	3465
Code during the taxable year.	3466

(16) Add any amount claimed as a credit under section	3467
5747.059 of the Revised Code to the extent that such amount	3468
satisfies either of the following:	3469

(a) The amount was deducted or excluded from the computation	3470
of the taxpayer's federal adjusted gross income as required to be	3471
reported for the taxpayer's taxable year under the Internal	3472
Revenue Code;	3473

(b) The amount resulted in a reduction of the taxpayer's	3474
federal adjusted gross income as required to be reported for any	3475
of the taxpayer's taxable years under the Internal Revenue Code.	3476

(17) Deduct the amount contributed by the taxpayer to an	3477
individual development account program established by a county	3478
department of job and family services pursuant to sections 329.11	3479
to 329.14 of the Revised Code for the purpose of matching funds	3480
deposited by program participants. On request of the tax	3481
commissioner, the taxpayer shall provide any information that, in	3482
the tax commissioner's opinion, is necessary to establish the	3483
amount deducted under division (A)(17) of this section.	3484

(18) Beginning in taxable year 2001, if the taxpayer is	3485
married and files a joint return and the combined federal adjusted	3486
gross income of the taxpayer and the taxpayer's spouse for the	3487
taxable year does not exceed one hundred thousand dollars, or if	3488
the taxpayer is single and has a federal adjusted gross income for	3489
the taxable year not exceeding fifty thousand dollars, deduct	3490
amounts paid during the taxable year for qualified tuition and	3491
fees paid to an eligible institution for the taxpayer, the	3492
taxpayer's spouse, or any dependent of the taxpayer, who is a	3493
resident of this state and is enrolled in or attending a program	3494
that culminates in a degree or diploma at an eligible institution.	3495
The deduction may be claimed only to the extent that qualified	3496
tuition and fees are not otherwise deducted or excluded for any	3497
taxable year from federal or Ohio adjusted gross income. The	3498
deduction may not be claimed for educational expenses for which	3499
the taxpayer claims a credit under section 5747.27 of the Revised	3500
Code.	3501

(19) Add any reimbursement received during the taxable year	3502
of any amount the taxpayer deducted under division (A)(18) of this	3503
section in any previous taxable year to the extent the amount is	3504
not otherwise included in Ohio adjusted gross income.	3505

(20)(a)(i) Add five-sixths of the amount of depreciation	3506
expense allowed by subsection (k) of section 168 of the Internal	3507
Revenue Code, including the taxpayer's proportionate or	3508
distributive share of the amount of depreciation expense allowed	3509
by that subsection to a pass-through entity in which the taxpayer	3510
has a direct or indirect ownership interest.	3511

(ii) Add five-sixths of the amount of qualifying section 179	3512
depreciation expense, including a person's proportionate or	3513
distributive share of the amount of qualifying section 179	3514
depreciation expense allowed to any pass-through entity in which	3515
the person has a direct or indirect ownership. For the purposes of	3516
this division, "qualifying section 179 depreciation expense" means	3517
the difference between (I) the amount of depreciation expense	3518
directly or indirectly allowed to the taxpayer under section 179	3519
of the Internal Revenue Code, and (II) the amount of depreciation	3520
expense directly or indirectly allowed to the taxpayer under	3521
section 179 of the Internal Revenue Code as that section existed	3522
on December 31, 2002.	3523

The tax commissioner, under procedures established by the	3524
commissioner, may waive the add-backs related to a pass-through	3525
entity if the taxpayer owns, directly or indirectly, less than	3526
five per cent of the pass-through entity.	3527

(b) Nothing in division (A)(20) of this section shall be	3528
construed to adjust or modify the adjusted basis of any asset.	3529

(c) To the extent the add-back required under division	3530
(A)(20)(a) of this section is attributable to property generating	3531
nonbusiness income or loss allocated under section 5747.20 of the	3532
Revised Code, the add-back shall be sitused to the same location	3533
as the nonbusiness income or loss generated by the property for	3534
the purpose of determining the credit under division (A) of	3535
section 5747.05 of the Revised Code. Otherwise, the add-back shall	3536
be apportioned, subject to one or more of the four alternative	3537
methods of apportionment enumerated in section 5747.21 of the	3538
Revised Code.	3539

(d) For the purposes of division (A) of this section, net	3540
operating loss carryback and carryforward shall not include	3541
five-sixths of the allowance of any net operating loss deduction	3542
carryback or carryforward to the taxable year to the extent such	3543
loss resulted from depreciation allowed by section 168(k) of the	3544
Internal Revenue Code and by the qualifying section 179	3545
depreciation expense amount.	3546

(21)(a) If the taxpayer was required to add an amount under	3547
division (A)(20)(a) of this section for a taxable year, deduct	3548
one-fifth of the amount so added for each of the five succeeding	3549
taxable years.	3550

(b) If the amount deducted under division (A)(21)(a) of this	3551
section is attributable to an add-back allocated under division	3552
(A)(20)(c) of this section, the amount deducted shall be sitused	3553
to the same location. Otherwise, the add-back shall be apportioned	3554
using the apportionment factors for the taxable year in which the	3555
deduction is taken, subject to one or more of the four alternative	3556
methods of apportionment enumerated in section 5747.21 of the	3557
Revised Code.	3558

(c) No deduction is available under division (A)(21)(a) of	3559
this section with regard to any depreciation allowed by section	3560
168(k) of the Internal Revenue Code and by the qualifying section	3561
179 depreciation expense amount to the extent that such	3562
depreciation resulted in or increased a federal net operating loss	3563
carryback or carryforward to a taxable year to which division	3564
(A)(20)(d) of this section does not apply.	3565

(B) "Business income" means income, including gain or loss,	3566
arising from transactions, activities, and sources in the regular	3567
course of a trade or business and includes income, gain, or loss	3568
from real property, tangible property, and intangible property if	3569
the acquisition, rental, management, and disposition of the	3570
property constitute integral parts of the regular course of a	3571
trade or business operation. "Business income" includes income,	3572
including gain or loss, from a partial or complete liquidation of	3573
a business, including, but not limited to, gain or loss from the	3574
sale or other disposition of goodwill.	3575

(C) "Nonbusiness income" means all income other than business	3576
income and may include, but is not limited to, compensation, rents	3577
and royalties from real or tangible personal property, capital	3578
gains, interest, dividends and distributions, patent or copyright	3579
royalties, or lottery winnings, prizes, and awards.	3580

(D) "Compensation" means any form of remuneration paid to an	3581
employee for personal services.	3582

(E) "Fiduciary" means a guardian, trustee, executor,	3583
administrator, receiver, conservator, or any other person acting	3584
in any fiduciary capacity for any individual, trust, or estate.	3585

(F) "Fiscal year" means an accounting period of twelve months	3586
ending on the last day of any month other than December.	3587

(G) "Individual" means any natural person.

3588

(H) "Internal Revenue Code" means the "Internal Revenue Code	3589
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	3590

(I) "Resident" means any of the following, provided that	3591
division (I)(3) of this section applies only to taxable years of a	3592
trust beginning in 2002, 2003, or 2004:	3593

(1) An individual who is domiciled in this state, subject to	3594
section 5747.24 of the Revised Code;	3595

(2) The estate of a decedent who at the time of death was	3596
domiciled in this state. The domicile tests of section 5747.24 of	3597
the Revised Code and any election under section 5747.25 of the	3598
Revised Code are not controlling for purposes of division (I)(2)	3599
of this section.	3600

(3) A trust that, in whole or part, resides in this state. If	3601
only part of a trust resides in this state, the trust is a	3602
resident only with respect to that part.	3603

For the purposes of division (I)(3) of this section:

3604

(a) A trust resides in this state for the trust's current	3605
taxable year to the extent, as described in division (I)(3)(d) of	3606
this section, that the trust consists directly or indirectly, in	3607
whole or in part, of assets, net of any related liabilities, that	3608
were transferred, or caused to be transferred, directly or	3609
indirectly, to the trust by any of the following:	3610

(i) A person, a court, or a governmental entity or	3611
instrumentality on account of the death of a decedent, but only if	3612
the trust is described in division (I)(3)(e)(i) or (ii) of this	3613
section;	3614

(ii) A person who was domiciled in this state for the	3615
purposes of this chapter when the person directly or indirectly	3616
transferred assets to an irrevocable trust, but only if at least	3617
one of the trust's qualifying beneficiaries is domiciled in this	3618
state for the purposes of this chapter during all or some portion	3619
of the trust's current taxable year;	3620

(iii) A person who was domiciled in this state for the	3621
purposes of this chapter when the trust document or instrument or	3622
part of the trust document or instrument became irrevocable, but	3623
only if at least one of the trust's qualifying beneficiaries is a	3624
resident domiciled in this state for the purposes of this chapter	3625
during all or some portion of the trust's current taxable year.	3626

(b) A trust is irrevocable to the extent that the transferor	3627
is not considered to be the owner of the net assets of the trust	3628
under sections 671 to 678 of the Internal Revenue Code.	3629

(c) With respect to a trust other than a charitable lead	3630
trust, "qualifying beneficiary" has the same meaning as "potential	3631
current beneficiary" as defined in section 1361(e)(2) of the	3632
Internal Revenue Code, and with respect to a charitable lead trust	3633
"qualifying beneficiary" is any current, future, or contingent	3634
beneficiary, but with respect to any trust "qualifying	3635
beneficiary" excludes a person or a governmental entity or	3636
instrumentality to any of which a contribution would qualify for	3637
the charitable deduction under section 170 of the Internal Revenue	3638
Code.	3639

(d) For the purposes of division (I)(3)(a) of this section,	3640
the extent to which a trust consists directly or indirectly, in	3641
whole or in part, of assets, net of any related liabilities, that	3642
were transferred directly or indirectly, in whole or part, to the	3643
trust by any of the sources enumerated in that division shall be	3644
ascertained by multiplying the fair market value of the trust's	3645
assets, net of related liabilities, by the qualifying ratio, which	3646
shall be computed as follows:	3647

(i) The first time the trust receives assets, the numerator	3648
of the qualifying ratio is the fair market value of those assets	3649
at that time, net of any related liabilities, from sources	3650
enumerated in division (I)(3)(a) of this section. The denominator	3651
of the qualifying ratio is the fair market value of all the	3652
trust's assets at that time, net of any related liabilities.	3653

(ii) Each subsequent time the trust receives assets, a	3654
revised qualifying ratio shall be computed. The numerator of the	3655
revised qualifying ratio is the sum of (1) the fair market value	3656
of the trust's assets immediately prior to the subsequent	3657
transfer, net of any related liabilities, multiplied by the	3658
qualifying ratio last computed without regard to the subsequent	3659
transfer, and (2) the fair market value of the subsequently	3660
transferred assets at the time transferred, net of any related	3661
liabilities, from sources enumerated in division (I)(3)(a) of this	3662
section. The denominator of the revised qualifying ratio is the	3663
fair market value of all the trust's assets immediately after the	3664
subsequent transfer, net of any related liabilities.	3665

(e) For the purposes of division (I)(3)(a)(i) of this	3666
section:	3667

(i) A trust is described in division (I)(3)(e)(i) of this	3668
section if the trust is a testamentary trust and the testator of	3669
that testamentary trust was domiciled in this state at the time of	3670
the testator's death for purposes of the taxes levied under	3671
Chapter 5731. of the Revised Code.	3672

(ii) A trust is described in division (I)(3)(e)(ii) of this	3673
section if the transfer is a qualifying transfer described in any	3674
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	3675
irrevocable inter vivos trust, and at least one of the trust's	3676
qualifying beneficiaries is domiciled in this state for purposes	3677
of this chapter during all or some portion of the trust's current	3678
taxable year.	3679

(f) For the purposes of division (I)(3)(e)(ii) of this	3680
section, a "qualifying transfer" is a transfer of assets, net of	3681
any related liabilities, directly or indirectly to a trust, if the	3682
transfer is described in any of the following:	3683

(i) The transfer is made to a trust, created by the decedent	3684
before the decedent's death and while the decedent was domiciled	3685
in this state for the purposes of this chapter, and, prior to the	3686
death of the decedent, the trust became irrevocable while the	3687
decedent was domiciled in this state for the purposes of this	3688
chapter.	3689

(ii) The transfer is made to a trust to which the decedent,	3690
prior to the decedent's death, had directly or indirectly	3691
transferred assets, net of any related liabilities, while the	3692
decedent was domiciled in this state for the purposes of this	3693
chapter, and prior to the death of the decedent the trust became	3694
irrevocable while the decedent was domiciled in this state for the	3695
purposes of this chapter.	3696

(iii) The transfer is made on account of a contractual	3697
relationship existing directly or indirectly between the	3698
transferor and either the decedent or the estate of the decedent	3699
at any time prior to the date of the decedent's death, and the	3700
decedent was domiciled in this state at the time of death for	3701
purposes of the taxes levied under Chapter 5731. of the Revised	3702
Code.	3703

(iv) The transfer is made to a trust on account of a	3704
contractual relationship existing directly or indirectly between	3705
the transferor and another person who at the time of the	3706
decedent's death was domiciled in this state for purposes of this	3707
chapter.	3708

(v) The transfer is made to a trust on account of the will of	3709
a testator.	3710

(vi) The transfer is made to a trust created by or caused to	3711
be created by a court, and the trust was directly or indirectly	3712
created in connection with or as a result of the death of an	3713
individual who, for purposes of the taxes levied under Chapter	3714
5731. of the Revised Code, was domiciled in this state at the time	3715
of the individual's death.	3716

(g) The tax commissioner may adopt rules to ascertain the	3717
part of a trust residing in this state.	3718

(J) "Nonresident" means an individual or estate that is not a	3719
resident. An individual who is a resident for only part of a	3720
taxable year is a nonresident for the remainder of that taxable	3721
year.	3722

(K) "Pass-through entity" has the same meaning as in section	3723
5733.04 of the Revised Code.	3724

(L) "Return" means the notifications and reports required to	3725
be filed pursuant to this chapter for the purpose of reporting the	3726
tax due and includes declarations of estimated tax when so	3727
required.	3728

(M) "Taxable year" means the calendar year or the taxpayer's	3729
fiscal year ending during the calendar year, or fractional part	3730
thereof, upon which the adjusted gross income is calculated	3731
pursuant to this chapter.	3732

(N) "Taxpayer" means any person subject to the tax imposed by	3733
section 5747.02 of the Revised Code or any pass-through entity	3734
that makes the election under division (D) of section 5747.08 of	3735
the Revised Code.	3736

(O) "Dependents" means dependents as defined in the Internal	3737
Revenue Code and as claimed in the taxpayer's federal income tax	3738
return for the taxable year or which the taxpayer would have been	3739
permitted to claim had the taxpayer filed a federal income tax	3740
return.	3741

(P) "Principal county of employment" means, in the case of a	3742
nonresident, the county within the state in which a taxpayer	3743
performs services for an employer or, if those services are	3744
performed in more than one county, the county in which the major	3745
portion of the services are performed.	3746

(Q) As used in sections 5747.50 to 5747.55 of the Revised	3747
Code:	3748

(1) "Subdivision" means any county, municipal corporation,	3749
park district, or township.	3750

(2) "Essential local government purposes" includes all	3751
functions that any subdivision is required by general law to	3752
exercise, including like functions that are exercised under a	3753
charter adopted pursuant to the Ohio Constitution.	3754

(R) "Overpayment" means any amount already paid that exceeds	3755
the figure determined to be the correct amount of the tax.	3756

(S) "Taxable income" or "Ohio taxable income" applies only to	3757
estates and trusts, and means federal taxable income, as defined	3758
and used in the Internal Revenue Code, adjusted as follows:	3759

(1) Add interest or dividends, net of ordinary, necessary,	3760
and reasonable expenses not deducted in computing federal taxable	3761
income, on obligations or securities of any state or of any	3762
political subdivision or authority of any state, other than this	3763
state and its subdivisions and authorities, but only to the extent	3764
that such net amount is not otherwise includible in Ohio taxable	3765
income and is described in either division (S)(1)(a) or (b) of	3766
this section:	3767

(a) The net amount is not attributable to the S portion of an	3768
electing small business trust and has not been distributed to	3769
beneficiaries for the taxable year;	3770

(b) The net amount is attributable to the S portion of an	3771
electing small business trust for the taxable year.	3772

(2) Add interest or dividends, net of ordinary, necessary,	3773
and reasonable expenses not deducted in computing federal taxable	3774
income, on obligations of any authority, commission,	3775
instrumentality, territory, or possession of the United States to	3776
the extent that the interest or dividends are exempt from federal	3777
income taxes but not from state income taxes, but only to the	3778
extent that such net amount is not otherwise includible in Ohio	3779
taxable income and is described in either division (S)(1)(a) or	3780
(b) of this section;	3781

(3) Add the amount of personal exemption allowed to the	3782
estate pursuant to section 642(b) of the Internal Revenue Code;	3783

(4) Deduct interest or dividends, net of related expenses	3784
deducted in computing federal taxable income, on obligations of	3785
the United States and its territories and possessions or of any	3786
authority, commission, or instrumentality of the United States to	3787
the extent that the interest or dividends are exempt from state	3788
taxes under the laws of the United States, but only to the extent	3789
that such amount is included in federal taxable income and is	3790
described in either division (S)(1)(a) or (b) of this section;	3791

(5) Deduct the amount of wages and salaries, if any, not	3792
otherwise allowable as a deduction but that would have been	3793
allowable as a deduction in computing federal taxable income for	3794
the taxable year, had the targeted jobs credit allowed under	3795
sections 38, 51, and 52 of the Internal Revenue Code not been in	3796
effect, but only to the extent such amount relates either to	3797
income included in federal taxable income for the taxable year or	3798
to income of the S portion of an electing small business trust for	3799
the taxable year;	3800

(6) Deduct any interest or interest equivalent, net of	3801
related expenses deducted in computing federal taxable income, on	3802
public obligations and purchase obligations, but only to the	3803
extent that such net amount relates either to income included in	3804
federal taxable income for the taxable year or to income of the S	3805
portion of an electing small business trust for the taxable year;	3806

(7) Add any loss or deduct any gain resulting from sale,	3807
exchange, or other disposition of public obligations to the extent	3808
that such loss has been deducted or such gain has been included in	3809
computing either federal taxable income or income of the S portion	3810
of an electing small business trust for the taxable year;	3811

(8) Except in the case of the final return of an estate, add	3812
any amount deducted by the taxpayer on both its Ohio estate tax	3813
return pursuant to section 5731.14 of the Revised Code, and on its	3814
federal income tax return in determining federal taxable income;	3815

(9)(a) Deduct any amount included in federal taxable income	3816
solely because the amount represents a reimbursement or refund of	3817
expenses that in a previous year the decedent had deducted as an	3818
itemized deduction pursuant to section 63 of the Internal Revenue	3819
Code and applicable treasury regulations. The deduction otherwise	3820
allowed under division (S)(9)(a) of this section shall be reduced	3821
to the extent the reimbursement is attributable to an amount the	3822
taxpayer or decedent deducted under this section in any taxable	3823
year.	3824

(b) Add any amount not otherwise included in Ohio taxable	3825
income for any taxable year to the extent that the amount is	3826
attributable to the recovery during the taxable year of any amount	3827
deducted or excluded in computing federal or Ohio taxable income	3828
in any taxable year, but only to the extent such amount has not	3829
been distributed to beneficiaries for the taxable year.	3830

(10) Deduct any portion of the deduction described in section	3831
1341(a)(2) of the Internal Revenue Code, for repaying previously	3832
reported income received under a claim of right, that meets both	3833
of the following requirements:	3834

(a) It is allowable for repayment of an item that was	3835
included in the taxpayer's taxable income or the decedent's	3836
adjusted gross income for a prior taxable year and did not qualify	3837
for a credit under division (A) or (B) of section 5747.05 of the	3838
Revised Code for that year.	3839

(b) It does not otherwise reduce the taxpayer's taxable	3840
income or the decedent's adjusted gross income for the current or	3841
any other taxable year.	3842

(11) Add any amount claimed as a credit under section	3843
5747.059 of the Revised Code to the extent that the amount	3844
satisfies either of the following:	3845

(a) The amount was deducted or excluded from the computation	3846
of the taxpayer's federal taxable income as required to be	3847
reported for the taxpayer's taxable year under the Internal	3848
Revenue Code;	3849

(b) The amount resulted in a reduction in the taxpayer's	3850
federal taxable income as required to be reported for any of the	3851
taxpayer's taxable years under the Internal Revenue Code.	3852

(12) Deduct any amount, net of related expenses deducted in	3853
computing federal taxable income, that a trust is required to	3854
report as farm income on its federal income tax return, but only	3855
if the assets of the trust include at least ten acres of land	3856
satisfying the definition of "land devoted exclusively to	3857
agricultural use" under section 5713.30 of the Revised Code,	3858
regardless of whether the land is valued for tax purposes as such	3859
land under sections 5713.30 to 5713.38 of the Revised Code. If the	3860
trust is a pass-though entity investor, section 5747.231 of the	3861
Revised Code applies in ascertaining if the trust is eligible to	3862
claim the deduction provided by division (S)(12) of this section	3863
in connection with the pass-through entity's farm income.	3864

Except for farm income attributable to the S portion of an	3865
electing small business trust, the deduction provided by division	3866
(S)(12) of this section is allowed only to the extent that the	3867
trust has not distributed such farm income. Division (S)(12) of	3868
this section applies only to taxable years of a trust beginning in	3869
2002, 2003, or 2004.	3870

(13) Add the net amount of income described in section 641(c)	3871
of the Internal Revenue Code to the extent that amount is not	3872
included in federal taxable income.	3873

(14) Add or deduct the amount the taxpayer would be required	3874
to add or deduct under division (A)(20) or (21) of this section if	3875
the taxpayer's Ohio taxable income were computed in the same	3876
manner as an individual's Ohio adjusted gross income is computed	3877
under this section. In the case of a trust, division (S)(14) of	3878
this section applies only to any of the trust's taxable years	3879
beginning in 2002, 2003, or 2004.	3880

(T) "School district income" and "school district income tax"	3881
have the same meanings as in section 5748.01 of the Revised Code.	3882

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	3883
of this section, "public obligations," "purchase obligations," and	3884
"interest or interest equivalent" have the same meanings as in	3885
section 5709.76 of the Revised Code.	3886

(V) "Limited liability company" means any limited liability	3887
company formed under Chapter 1705. of the Revised Code or under	3888
the laws of any other state.	3889

(W) "Pass-through entity investor" means any person who,	3890
during any portion of a taxable year of a pass-through entity, is	3891
a partner, member, shareholder, or equity investor in that	3892
pass-through entity.	3893

(X) "Banking day" has the same meaning as in section 1304.01	3894
of the Revised Code.	3895

(Y) "Month" means a calendar month.

3896

(Z) "Quarter" means the first three months, the second three	3897
months, the third three months, or the last three months of the	3898
taxpayer's taxable year.	3899

(AA)(1) "Eligible institution" means a state university or	3900
state institution of higher education as defined in section	3901
3345.011 of the Revised Code, or a private, nonprofit college,	3902
university, or other post-secondary institution located in this	3903
state that possesses a certificate of authorization issued by the	3904
Ohio board of regents pursuant to Chapter 1713. of the Revised	3905
Code or a certificate of registration issued by the state board of	3906
career colleges and schools under Chapter 3332. of the Revised	3907
Code.	3908

(2) "Qualified tuition and fees" means tuition and fees	3909
imposed by an eligible institution as a condition of enrollment or	3910
attendance, not exceeding two thousand five hundred dollars in	3911
each of the individual's first two years of post-secondary	3912
education. If the individual is a part-time student, "qualified	3913
tuition and fees" includes tuition and fees paid for the academic	3914
equivalent of the first two years of post-secondary education	3915
during a maximum of five taxable years, not exceeding a total of	3916
five thousand dollars. "Qualified tuition and fees" does not	3917
include:	3918

(a) Expenses for any course or activity involving sports,	3919
games, or hobbies unless the course or activity is part of the	3920
individual's degree or diploma program;	3921

(b) The cost of books, room and board, student activity fees,	3922
athletic fees, insurance expenses, or other expenses unrelated to	3923
the individual's academic course of instruction;	3924

(c) Tuition, fees, or other expenses paid or reimbursed	3925
through an employer, scholarship, grant in aid, or other	3926
educational benefit program.	3927

(BB)(1) "Modified business income" means the business income	3928
included in a trust's Ohio taxable income after such taxable	3929
income is first reduced by the qualifying trust amount, if any.	3930

(2) "Qualifying trust amount" of a trust means capital gains	3931
and losses from the sale, exchange, or other disposition of equity	3932
or ownership interests in, or debt obligations of, a qualifying	3933
investee to the extent included in the trust's Ohio taxable	3934
income, but only if the following requirements are satisfied:	3935

(a) The book value of the qualifying investee's physical	3936
assets in this state and everywhere, as of the last day of the	3937
qualifying investee's fiscal or calendar year ending immediately	3938
prior to the date on which the trust recognizes the gain or loss,	3939
is available to the trust.	3940

(b) The requirements of section 5747.011 of the Revised Code	3941
are satisfied for the trust's taxable year in which the trust	3942
recognizes the gain or loss.	3943

Any gain or loss that is not a qualifying trust amount is	3944
modified business income, qualifying investment income, or	3945
modified nonbusiness income, as the case may be.	3946

(3) "Modified nonbusiness income" means a trust's Ohio	3947
taxable income other than modified business income, other than the	3948
qualifying trust amount, and other than qualifying investment	3949
income, as defined in section 5747.012 of the Revised Code, to the	3950
extent such qualifying investment income is not otherwise part of	3951
modified business income.	3952

(4) "Modified Ohio taxable income" applies only to trusts,	3953
and means the sum of the amounts described in divisions (BB)(4)(a)	3954
to (c) of this section:	3955

(a) The fraction, calculated under division (B)(2) of section	3956
5733.055747.013, and applying section 5733.0575747.231 of the	3957
Revised Code, as if the trust were a corporation subject to the	3958
tax imposed by section 5733.06 of the Revised Code, multiplied by	3959
the sum of the following amounts:	3960

(i) The trust's modified business income;

3961

(ii) The trust's qualifying investment income, as defined in	3962
section 5747.012 of the Revised Code, but only to the extent the	3963
qualifying investment income does not otherwise constitute	3964
modified business income and does not otherwise constitute a	3965
qualifying trust amount.	3966

(b) The qualifying trust amount multiplied by a fraction, the	3967
numerator of which is the sum of the book value of the qualifying	3968
investee's physical assets in this state on the last day of the	3969
qualifying investee's fiscal or calendar year ending immediately	3970
prior to the day on which the trust recognizes the qualifying	3971
trust amount, and the denominator of which is the sum of the book	3972
value of the qualifying investee's total physical assets	3973
everywhere on the last day of the qualifying investee's fiscal or	3974
calendar year ending immediately prior to the day on which the	3975
trust recognizes the qualifying trust amount. If, for a taxable	3976
year, the trust recognizes a qualifying trust amount with respect	3977
to more than one qualifying investee, the amount described in	3978
division (BB)(4)(b) of this section shall equal the sum of the	3979
products so computed for each such qualifying investee.	3980

(c)(i) With respect to a trust or portion of a trust that is	3981
a resident as ascertained in accordance with division (I)(3)(d) of	3982
this section, its modified nonbusiness income.	3983

(ii) With respect to a trust or portion of a trust that is	3984
not a resident as ascertained in accordance with division	3985
(I)(3)(d) of this section, the amount of its modified nonbusiness	3986
income satisfying the descriptions in divisions (B)(2) to (5) of	3987
section 5747.20 of the Revised Code.	3988

If the allocation and apportionment of a trust's income under	3989
divisions (BB)(4)(a) and (c) of this section do not fairly	3990
represent the modified Ohio taxable income of the trust in this	3991
state, the alternative methods described in division (C) of	3992
section 5747.21 of the Revised Code may be applied in the manner	3993
and to the same extent provided in that section.	3994

(5)(a) Except as set forth in division (BB)(5)(b) of this	3995
section, "qualifying investee" means a person in which a trust has	3996
an equity or ownership interest, or a person or unit of government	3997
the debt obligations of either of which are owned by a trust. For	3998
the purposes of division (BB)(2)(a) of this section and for the	3999
purpose of computing the fraction described in division (BB)(4)(b)	4000
of this section, all of the following apply:	4001

(i) If the qualifying investee is a member of a qualifying	4002
controlled group on the last day of the qualifying investee's	4003
fiscal or calendar year ending immediately prior to the date on	4004
which the trust recognizes the gain or loss, then "qualifying	4005
investee" includes all persons in the qualifying controlled group	4006
on such last day.	4007

(ii) If the qualifying investee, or if the qualifying	4008
investee and any members of the qualifying controlled group of	4009
which the qualifying investee is a member on the last day of the	4010
qualifying investee's fiscal or calendar year ending immediately	4011
prior to the date on which the trust recognizes the gain or loss,	4012
separately or cumulatively own, directly or indirectly, on the	4013
last day of the qualifying investee's fiscal or calendar year	4014
ending immediately prior to the date on which the trust recognizes	4015
the qualifying trust amount, more than fifty per cent of the	4016
equity of a pass-through entity, then the qualifying investee and	4017
the other members are deemed to own the proportionate share of the	4018
pass-through entity's physical assets which the pass-through	4019
entity directly or indirectly owns on the last day of the	4020
pass-through entity's calendar or fiscal year ending within or	4021
with the last day of the qualifying investee's fiscal or calendar	4022
year ending immediately prior to the date on which the trust	4023
recognizes the qualifying trust amount.	4024

(iii) For the purposes of division (BB)(5)(a)(iii) of this	4025
section, "upper level pass-through entity" means a pass-through	4026
entity directly or indirectly owning any equity of another	4027
pass-through entity, and "lower level pass-through entity" means	4028
that other pass-through entity.	4029

An upper level pass-through entity, whether or not it is also	4030
a qualifying investee, is deemed to own, on the last day of the	4031
upper level pass-through entity's calendar or fiscal year, the	4032
proportionate share of the lower level pass-through entity's	4033
physical assets that the lower level pass-through entity directly	4034
or indirectly owns on the last day of the lower level pass-through	4035
entity's calendar or fiscal year ending within or with the last	4036
day of the upper level pass-through entity's fiscal or calendar	4037
year. If the upper level pass-through entity directly and	4038
indirectly owns less than fifty per cent of the equity of the	4039
lower level pass-through entity on each day of the upper level	4040
pass-through entity's calendar or fiscal year in which or with	4041
which ends the calendar or fiscal year of the lower level	4042
pass-through entity and if, based upon clear and convincing	4043
evidence, complete information about the location and cost of the	4044
physical assets of the lower pass-through entity is not available	4045
to the upper level pass-through entity, then solely for purposes	4046
of ascertaining if a gain or loss constitutes a qualifying trust	4047
amount, the upper level pass-through entity shall be deemed as	4048
owning no equity of the lower level pass-through entity for each	4049
day during the upper level pass-through entity's calendar or	4050
fiscal year in which or with which ends the lower level	4051
pass-through entity's calendar or fiscal year. Nothing in division	4052
(BB)(5)(a)(iii) of this section shall be construed to provide for	4053
any deduction or exclusion in computing any trust's Ohio taxable	4054
income.	4055

(b) With respect to a trust that is not a resident for the	4056
taxable year and with respect to a part of a trust that is not a	4057
resident for the taxable year, "qualifying investee" for that	4058
taxable year does not include a C corporation if both of the	4059
following apply:	4060

(i) During the taxable year the trust or part of the trust	4061
recognizes a gain or loss from the sale, exchange, or other	4062
disposition of equity or ownership interests in, or debt	4063
obligations of, the C corporation.	4064

(ii) Such gain or loss constitutes nonbusiness income.

4065

(6) "Available" means information is such that a person is	4066
able to learn of the information by the due date plus extensions,	4067
if any, for filing the return for the taxable year in which the	4068
trust recognizes the gain or loss.	4069

(CC) "Qualifying controlled group" has the same meaning as in	4070
section 5733.04 of the Revised Code.	4071

(DD) "Related member" has the same meaning as in section	4072
5733.042 of the Revised Code.	4073

(EE) Any term used in this chapter that is not otherwise	4074
defined in this section and that is not used in a comparable	4075
context in the Internal Revenue Code and other statutes of the	4076
United States relating to federal income taxes has the same	4077
meaning as in section 5733.40 of the Revised Code.	4078

Sec. 5747.013.  (A) As used in this section:

4079

(1) "Electric company," "combined company," and "telephone	4080
company" have the same meanings as in section 5727.01 of the	4081
Revised Code.	4082

(2) "Qualified research" means laboratory research,	4083
experimental research, and other similar types of research;	4084
research in developing or improving a product; or research in	4085
developing or improving the means of producing a product. It does	4086
not include market research, consumer surveys, efficiency surveys,	4087
management studies, ordinary testing or inspection of material or	4088
products for quality control, historical research, or literary	4089
research. "Product," as used in this paragraph, does not include	4090
services or intangible property.	4091

(B) The fraction to be used in calculating a trust's modified	4092
Ohio taxable income under division (BB)(4)(a) of section 5747.01	4093
of the Revised Code shall be determined as follows: The numerator	4094
of the fraction is the sum of the following products: the property	4095
factor multiplied by twenty, the payroll factor multiplied by	4096
twenty, and the sales factor multiplied by sixty. The denominator	4097
of the fraction is one hundred, provided that the denominator	4098
shall be reduced by twenty if the property factor has a	4099
denominator of zero, by twenty if the payroll factor has a	4100
denominator of zero, and by sixty if the sales factor has a	4101
denominator of zero.	4102

The property, payroll, and sales factors shall be determined	4103
as follows:	4104

(1) The property factor is a fraction the numerator of which	4105
is the average value of the trust's real and tangible personal	4106
property owned or rented and used in the trade or business in this	4107
state during the taxable year, and the denominator of which is the	4108
average value of all the trust's real and tangible personal	4109
property owned or rented and used in the trade or business	4110
everywhere during such year. Real and tangible personal property	4111
that is owned but leased to a lessee to be used in the lessee's	4112
trade or business shall not be included in the property factor of	4113
the owner. There shall be excluded from the numerator and	4114
denominator of the fraction the original cost of all of the	4115
following property within Ohio: property with respect to which a	4116
"pollution control facility" certificate has been issued pursuant	4117
to section 5709.21 of the Revised Code; property with respect to	4118
which an "industrial water pollution control certificate" has been	4119
issued pursuant to that section or former section 6111.31 of the	4120
Revised Code; and property used exclusively during the taxable	4121
year for qualified research.	4122

(a) Property owned by the trust is valued at its original	4123
cost. Property rented by the trust is valued at eight times the	4124
net annual rental rate. "Net annual rental rate" means the annual	4125
rental rate paid by the trust less any annual rental rate received	4126
by the trust from subrentals.	4127

(b) The average value of property shall be determined by	4128
averaging the values at the beginning and the end of the taxable	4129
year, but the tax commissioner may require the averaging of	4130
monthly values during the taxable year, if reasonably required to	4131
reflect properly the average value of the trust's property.	4132

(2) The payroll factor is a fraction the numerator of which	4133
is the total amount paid in this state during the taxable year by	4134
the trust for compensation, and the denominator of which is the	4135
total compensation paid everywhere by the trust during such year.	4136
There shall be excluded from the numerator and the denominator of	4137
the payroll factor the total compensation paid in this state to	4138
employees who are primarily engaged in qualified research.	4139

(a) Compensation is paid in this state if: (i) the	4140
recipient's service is performed entirely within this state; (ii)	4141
the recipient's service is performed both within and without this	4142
state, but the service performed without this state is incidental	4143
to the recipient's service within this state; or (iii) some of the	4144
service is performed within this state and either the base of	4145
operations, or if there is no base of operations, the place from	4146
which the service is directed or controlled, is within this state,	4147
or the base of operations or the place from which the service is	4148
directed or controlled is not in any state in which some part of	4149
the service is performed, but the recipient's residence is in this	4150
state.	4151

(b) Compensation is paid in this state to any employee of a	4152
common or contract motor carrier corporation, who performs the	4153
employee's regularly assigned duties on a motor vehicle in more	4154
than one state, in the same ratio by which the mileage traveled by	4155
such employee within the state bears to the total mileage traveled	4156
by such employee everywhere during the taxable year.	4157

(3) The sales factor is a fraction the numerator of which is	4158
the total sales in this state by the trust during the taxable	4159
year, and the denominator of which is the total sales by the trust	4160
everywhere during such year. In determining the numerator and	4161
denominator of the fraction, receipts from the sale or other	4162
disposal of a capital asset or an asset described in section 1231	4163
of the Internal Revenue Code shall be eliminated. Also, in	4164
determining the numerator and denominator of the sales factor, in	4165
the case of a trust owning at least eighty per cent of the issued	4166
and outstanding common stock of one or more insurance companies or	4167
public utilities, except an electric company and a combined	4168
company, and, for tax years 2005 and thereafter, a telephone	4169
company, or owning at least twenty-five per cent of the issued and	4170
outstanding common stock of one or more financial institutions,	4171
receipts received by the trust from such insurance companies,	4172
utilities, and financial institutions shall be eliminated.	4173

For the purpose of this section and section 5747.08 of the	4174
Revised Code, sales of tangible personal property are in this	4175
state where such property is received in this state by the	4176
purchaser. In the case of delivery of tangible personal property	4177
by common carrier or by other means of transportation, the place	4178
at which such property is ultimately received after all	4179
transportation has been completed shall be considered as the place	4180
at which such property is received by the purchaser. Direct	4181
delivery in this state, other than for purposes of transportation,	4182
to a person or firm designated by a purchaser constitutes delivery	4183
to the purchaser in this state, and direct delivery outside this	4184
state to a person or firm designated by a purchaser does not	4185
constitute delivery to the purchaser in this state, regardless of	4186
where title passes or other conditions of sale.	4187

Sales, other than sales of tangible personal property, are in	4188
this state if either:	4189

(a) The income-producing activity is performed solely in this	4190
state; or	4191

(b) The income-producing activity is performed both within	4192
and without this state and a greater proportion of the seller's	4193
income-producing activity is performed within this state than in	4194
any other state, based on costs of performance.	4195

Sec. 5747.03.  (A) All money collected under this chapter	4196
arising from the taxes imposed by section 5747.02 or 5747.41 of	4197
the Revised Code shall be credited to the general revenue fund,	4198
except that the treasurer of state shall:	4199

(1) Credit an amount equal to four and two-tenths per cent of	4200
those taxes collected under this chapter to the local government	4201
fund, which is hereby created in the state treasury, for	4202
distribution in accordance with section 5747.50 of the Revised	4203
Code;	4204

(2) Credit an amount equal to five and seven-tenths per cent	4205
of those taxes collected under this chapter to the library and	4206
local government support fund, which is hereby created in the	4207
state treasury, for distribution in accordance with section	4208
5747.47 of the Revised Code;	4209

(3) At the beginning of each calendar quarter, credit to the	4210
Ohio political party fund, pursuant to section 3517.16 of the	4211
Revised Code, an amount equal to the total dollar value realized	4212
from the taxpayer exercise of the income tax checkoff option on	4213
tax forms processed during the preceding calendar quarter;	4214

(4) Credit an amount equal to six-tenths of one per cent of	4215
those taxes collected under this chapter to the local government	4216
revenue assistance fund for distribution in accordance with	4217
section 5747.61 of the Revised Code.	4218

(B)(1) Following the crediting of moneys pursuant to division	4219
(A) of this section, the remainder deposited in the general	4220
revenue fund shall be distributed pursuant to division (F) of	4221
section 321.24 and section 323.156 of the Revised Code; to make	4222
subsidy payments to institutions of higher education from	4223
appropriations to the Ohio board of regents; to support	4224
expenditures for programs and services for the mentally ill,	4225
mentally retarded, developmentally disabled, and elderly; for	4226
primary and secondary education; for medical assistance; and for	4227
any other purposes authorized by law, subject to the limitation	4228
that at least fifty per cent of the income tax collected by the	4229
state from the tax imposed by section 5747.02 of the Revised Code	4230
shall be returned pursuant to Section 9 of Article XII, Ohio	4231
Constitution.	4232

(2) To ensure that such constitutional requirement is	4233
satisfied the tax commissioner shall, on or before the thirtieth	4234
day of June of each year, from the best information available to	4235
the tax commissioner, determine and certify for each county to the	4236
director of budget and management the amount of taxes collected	4237
under this chapter from the tax imposed under section 5747.02 of	4238
the Revised Code during the preceding calendar year that are	4239
required to be returned to the county by Section 9 of Article XII,	4240
Ohio Constitution. The director shall provide for payment from the	4241
general revenue fund to the county in the amount, if any, that the	4242
sum of the amount so certified for that county exceeds the sum of	4243
the following:	4244

(a) The sum of the payments from the general revenue fund for	4245
the preceding calendar year to the credit of the county's	4246
undivided income tax fund pursuant to division (F) of section	4247
321.24 and section 323.156 of the Revised Code;	4248

(b) The sum of the amounts from the general revenue fund	4249
distributed in the county during the preceding calendar year for	4250
subsidy payments to institutions of higher education from	4251
appropriations to the Ohio board of regents; for programs and	4252
services for mentally ill, mentally retarded, developmentally	4253
disabled, and elderly persons; for primary and secondary	4254
education; and for medical assistance.	4255

(c) The amount distributed to the county during the preceding	4256
calendar year from the local government fund;	4257

(d) The amount distributed to the county during the preceding	4258
calendar year from the library and local government support fund;	4259

(e) The amount distributed to the county during the preceding	4260
calendar year from the local government revenue assistance fund.	4261

Payments under this division shall be credited to the	4262
county's undivided income tax fund, except that, notwithstanding	4263
section 5705.14 of the Revised Code, such payments may be	4264
transferred by the board of county commissioners to the county	4265
general fund by resolution adopted with the affirmative vote of	4266
two-thirds of the members thereof.	4267

(C) All payments received in each month from taxes imposed	4268
under Chapter 5748. of the Revised Code and any penalties or	4269
interest thereon shall be paid into the school district income tax	4270
fund, which is hereby created in the state treasury, except that	4271
an amount equal to the following portion of such payments shall be	4272
paid into the general school district income tax administrative	4273
fund, which is hereby created in the state treasury:	4274

(1) One and three-quarters of one per cent of those received	4275
in fiscal year 1996;	4276

(2) One and one-half per cent of those received in fiscal	4277
year 1997 and thereafter.	4278

Money in the school district income tax administrative fund	4279
shall be used by the tax commissioner to defray costs incurred in	4280
administering the school district's income tax, including the cost	4281
of providing employers with information regarding the rate of tax	4282
imposed by any school district. Any moneys remaining in the fund	4283
after such use shall be deposited in the school district income	4284
tax fund.	4285

All interest earned on moneys in the school district income	4286
tax fund shall be credited to the fund.	4287

(D)(1)(a) Within thirty days of the end of each calendar	4288
quarter ending on the last day of March, June, September, and	4289
December, the director of budget and management shall make a	4290
payment from the school district income tax fund to each school	4291
district for which school district income tax revenue was received	4292
during that quarter. The amount of the payment shall equal the	4293
balance in the school district's account at the end of that	4294
quarter.	4295

(b) After a school district ceases to levy an income tax, the	4296
director of budget and management shall adjust the payments under	4297
division (D)(1)(a) of this section to retain sufficient money in	4298
the school district's account to pay refunds. For the calendar	4299
quarters ending on the last day of March and December of the	4300
calendar year following the last calendar year the tax is levied,	4301
the director shall make the payments in the amount required under	4302
division (D)(1)(a) of this section. For the calendar quarter	4303
ending on the last day of June of the calendar year following the	4304
last calendar year the tax is levied, the director shall make a	4305
payment equal to nine-tenths of the balance in the account at the	4306
end of that quarter. For the calendar quarter ending on the last	4307
day of September of the calendar year following the last calendar	4308
year the tax is levied, the director shall make no payment. For	4309
the second and succeeding calendar years following the last	4310
calendar year the tax is levied, the director shall make one	4311
payment each year, within thirty days of the last day of June, in	4312
an amount equal to the balance in the district's account on the	4313
last day of June.	4314

(2) Moneys paid to a school district under this division	4315
shall be deposited in its school district income tax fund. All	4316
interest earned on moneys in the school district income tax fund	4317
shall be apportioned by the tax commissioner pro rata among the	4318
school districts in the proportions and at the times the districts	4319
are entitled to receive payments under this division.	4320

Section 2. That existing sections 321.45, 323.152, 323.25,	4321
718.01, 4503.065, 5705.19, 5709.61, 5709.62, 5709.63, 5709.631,	4322
5709.633, 5709.85, 5709.883, 5721.25, 5722.01, 5722.02, 5733.05,	4323
5733.33, 5735.01, 5747.01, and 5747.03 of the Revised Code are	4324
hereby repealed.	4325

Section 3. That Section 3.18 of Am. Sub. H.B. 95 of the 125th	4326
General Assembly be amended to read as follows:	4327

Sec. 3.18. The amendments in Sections 3.16 and 3.17 of this	4328
actAm. Sub. H.B. 95 of the 125th General Assembly provide for or	4329
are essential to the implementation of a tax levy. Therefore,	4330
under Ohio Constitution, Article II, Section 1d, those Sections	4331
are not subject to the referendum and go into effect January 1,	4332
20042005.	4333

Section 4. That existing Section 3.18 of Am. Sub. H.B. 95 of	4334
the 125th General Assembly is hereby repealed.	4335

Section 5. This section and the amendments by this act to	4336
Section 3.18 of Am. Sub. H.B. 95 of the 125th General Assembly	4337
provide for or are essential to the implementation of a tax levy.	4338
Therefore, under Ohio Constitution, Article II, Section 1d, this	4339
section and those amendments are not subject to the referendum and	4340
go into immediate effect.	4341

Section 6. That Section 89.07 of Am. Sub. H.B. 95 of the	4342
125th General Assembly be amended to read as follows:	4343

Sec. 89.07. AIR FORCE INSTITUTE OF TECHNOLOGY

4344

The foregoing appropriation item 235-508, Air Force Institute	4345
of Technology, shall be used to strengthen the research and	4346
educational linkages between the Wright Patterson Air Force Base	4347
and institutions of higher education in Ohio. Of the foregoing	4348
appropriation item 235-508, Air Force Institute of Technology,	4349
$1,317,173 in fiscal year 2004 and $1,315,929 in fiscal year 2005	4350
shall be used for research projects that connect the Air Force	4351
Research Laboratories with university partners. The institute	4352
shall provide annual reports to the Third Frontier Commission,	4353
that discuss existing, planned, or possible collaborations between	4354
programs and funding recipients related to technology, research	4355
development, commercialization, and support for Ohio's economic	4356
development.	4357

Of the foregoing appropriation item 235-508, Air Force	4358
Institute of Technology, $477,237 in fiscal year 2004 and $476,786	4359
in fiscal year 2005 shall be used to match federal dollars toby	4360
the University of Dayton to establish and support a chair in Nano	4361
Technology in support of the Wright Brothers Institute. Funds	4362
shall be used by the Wright Brothers Institute to create or expand	4363
Ohio-based technology and commercial development collaborations	4364
between industry, academia, and government in areas which include	4365
carbon nano-tube materials technology, genome-based biotechnology,	4366
knowledge-creation information technology, cognitive systems	4367
modeling and engineering, or other related projects as deemed	4368
appropriate by the institutethrough the Miami Valley Economic	4369
Development Research Corporation.	4370

Of the foregoing appropriation item 235-508, Air Force	4371
Institute of Technology, $302,113 in fiscal year 2004 and $261,145	4372
in fiscal year 2005 shall be used by the Miami Valley Economic	4373
Development Research Corporation to directly support collaborative	4374
research between academia, industry, and the Air Force for the	4375
Wright Brothers Institute Nanomaterials and Advanced Data	4376
Management and Analysisand related initiatives in nanomaterials	4377
and advanced data management and analysis or other technology	4378
projects as determined by the Miami Valley Economic Development	4379
Research Corporation.	4380

OHIO SUPERCOMPUTER CENTER

4381

The foregoing appropriation item 235-510, Ohio Supercomputer	4382
Center, shall be used by the Board of Regents to support the	4383
operation of the center, located at The Ohio State University, as	4384
a statewide resource available to Ohio research universities both	4385
public and private. It is also intended that the center be made	4386
accessible to private industry as appropriate. Policies of the	4387
center shall be established by a governance committee,	4388
representative of Ohio's research universities and private	4389
industry, to be appointed by the Chancellor of the Board of	4390
Regents and established for this purpose.	4391

The Ohio Supercomputer Center shall report on expanding	4392
solutions-oriented, computational science services to industrial	4393
and other customers, including alignment programs and recipients,	4394
and develop a plan for a computational science initiative in	4395
collaboration with the Wright Centers of Innovation program and	4396
the Computer Science Graduate Studies Program.	4397

COOPERATIVE EXTENSION SERVICE

4398

The foregoing appropriation item 235-511, Cooperative	4399
Extension Service, shall be disbursed through the Board of Regents	4400
to The Ohio State University in monthly payments, unless otherwise	4401
determined by the Director of Budget and Management pursuant to	4402
section 126.09 of the Revised Code.	4403

Of the foregoing appropriation item 235-511, Cooperative	4404
Extension Service, $182,842 in fiscal year 2004 and $178,271 in	4405
fiscal year 2005 shall be used for additional staffing for county	4406
agents for expanded 4-H activities. Of the foregoing appropriation	4407
item 235-511, Cooperative Extension Service, $182,842 in fiscal	4408
year 2004 and $178,271 in fiscal year 2005 shall be used by the	4409
Cooperative Extension Service, through the Enterprise Center for	4410
Economic Development in cooperation with other agencies, for a	4411
public-private effort to create and operate a small business	4412
economic development program to enhance the development of	4413
alternatives to the growing of tobacco, and implement, through	4414
applied research and demonstration, the production and marketing	4415
of other high-value crops and value-added products. Of the	4416
foregoing appropriation item 235-511, Cooperative Extension	4417
Service, $56,594 in fiscal year 2004 and $55,179 in fiscal year	4418
2005 shall be used for farm labor mediation and education	4419
programs. Of the foregoing appropriation item 235-511, Cooperative	4420
Extension Service, $187,195 in fiscal year 2004 and $182,515 in	4421
fiscal year 2005 shall be used to support the Ohio State	4422
University Marion Enterprise Center.	4423

Of the foregoing appropriation item 235-511, Cooperative	4424
Extension Service, $792,750 in fiscal year 2004 and $772,931 in	4425
fiscal year 2005 shall be used to support the Ohio Watersheds	4426
Initiative.	4427

CENTRAL STATE SUPPLEMENT

4428

The foregoing appropriation item 235-514, Central State	4429
Supplement, shall be used by Central State University to keep	4430
undergraduate fees below the statewide average, consistent with	4431
its mission of service to many first-generation college students	4432
from groups historically underrepresented in higher education and	4433
from families with limited incomes.	4434

PERFORMANCE STANDARDS FOR MEDICAL EDUCATION

4435

The Board of Regents, in consultation with the state-assisted	4436
medical colleges, shall develop performance standards for medical	4437
education. Special emphasis in the standards shall be placed on	4438
attempting to ensure that at least 50 per cent of the aggregate	4439
number of students enrolled in state-assisted medical colleges	4440
continue to enter residency as primary care physicians. Primary	4441
care physicians are general family practice physicians, general	4442
internal medicine practitioners, and general pediatric care	4443
physicians. The Board of Regents shall monitor medical school	4444
performance in relation to their plans for reaching the 50 per	4445
cent systemwide standard for primary care physicians.	4446

Section 7. That existing Section 89.07 of Am. Sub. H.B. 95 of	4447
the 125th General Assembly is hereby repealed.	4448

Section 8. This section and the amendments by this act to	4449
Section 89.07 of Am. Sub. H.B. 95 of the 125th General Assembly	4450
are not subject to the referendum. Therefore, under Ohio	4451
Constitution, Article II, Section 1d and section 1.471 of the	4452
Revised Code, this section and those amendments go into immediate	4453
effect when this act becomes law.	4454

Section 9. If unspent and unobligated cash balances in the	4455
General Revenue Fund are sufficient, the Director of Budget and	4456
Management, upon receiving a request from the Director of	4457
Development, may increase by up to $5 million over both fiscal	4458
years of the 2004-2005 biennium appropriations in existing General	4459
Revenue Fund appropriation items for, or in new General Revenue	4460
Fund appropriation items created by the Director of Budget and	4461
Management for, the Department of Development, to support economic	4462
development projects for which appropriations otherwise would not	4463
be available. These increases are hereby appropriated.	4464

This section is not subject to the referendum. Therefore,	4465
under Ohio Constitution, Article II, Section 1d and section 1.471	4466
of the Revised Code, this section goes into immediate effect when	4467
this act becomes law.	4468

Section 10. (A) The amendment by this act of section 323.152	4469
of the Revised Code applies to tax year 2004 and thereafter.	4470

(B) The amendment by this act of section 4503.065 of the	4471
Revised Code applies to taxes levied in 2005 and thereafter.	4472

Section 11. The amendment by this act of section 5705.19 of	4473
the Revised Code applies to resolutions adopted under that section	4474
on or after the effective date of this act.	4475

Section 12. Except as otherwise specifically provided in this	4476
act, the sections of law amended or enacted in this act, and the	4477
items of law of which the sections of law amended or enacted in	4478
this act are composed, are subject to the referendum. Therefore,	4479
under Ohio Constitution, Article II, Section 1c and section 1.471	4480
of the Revised Code, the sections of law amended or enacted by	4481
this act, and the items of law of which the sections of law as	4482
amended or enacted by this act are composed, take effect on the	4483
ninety-first day after this act is filed with the Secretary of	4484
State. If, however, a referendum petition is filed against any	4485
such section of law as amended or enacted by this act, or against	4486
any item of law of which any such section of law as amended or	4487
enacted by this act is composed, the section of law as amended or	4488
enacted, or item of law, unless rejected at the referendum, takes	4489
effect at the earliest time permitted by law.	4490

Section 13. The amendment or enactment by this act of	4491
sections 5733.05, 5747.01, and 5747.013 of the Revised Code	4492
provide for or are essential to implementation of a tax levy.	4493
Therefore, under Ohio Constitution, Article II, Section 1d, the	4494
amendments and enactments, and the items of which they are	4495
composed, are not subject to the referendum and go into immediate	4496
effect when this act becomes law.	4497

This section is essential to implementation of a tax levy	4498
and, under Ohio Constitution, Article II, Section 1d, is not	4499
subject to the referendum and goes into immediate effect when this	4500
act becomes law.	4501