As Reported by the Senate Ways and Means and Economic Development Committee

125th General Assembly
Regular Session
2003-2004
Sub. H. B. No. 362


Representatives Hoops, Allen, Calvert, C. Evans, D. Evans, Flowers, Hartnett, Jerse, Martin, Miller, T. Patton, Peterson, Schmidt, Strahorn, Aslanides, Barrett, Brown, Callender, Chandler, Cirelli, Collier, DeBose, Domenick, Gilb, Hollister, McGregor, Niehaus, Olman, Otterman, Price, Schlichter, Seaver, Seitz, Slaby, D. Stewart, J. Stewart, Walcher 

Senator Amstutz 



A BILL
To amend sections 718.01, 718.02, 3318.05, 3318.052, 1
3318.08, 3318.44, 3770.07, 3770.10, 3770.12, 2
5705.192, 5705.21, 5733.04, 5733.42, and 5747.01 3
and to enact section 3770.121 of the Revised Code 4
to permit school district permanent improvements 5
levies imposed for a limited period of time to be 6
renewed for a continuing period of time; to allow 7
certain single member limited liability companies 8
to elect to be separate taxpayers from their 9
single members for purposes of municipal income 10
taxation; to require under the municipal income 11
tax law that a business add-back tax exempt stock 12
options in the apportionment of its net profit 13
among municipal corporations; to create an amnesty 14
period for re-filing applications for exemption of 15
real property that were dismissed due to case law; 16
to change references regarding federal income tax 17
law in the corporation franchise tax and income 18
tax laws; to require the State Lottery Commission 19
to allow a lottery prize winner who is being paid 20
the prize award in installments to transfer, 21
subject to certain restrictions, all or portions 22
of the prize winner's outstanding prize award and 23
to make other changes in the Lottery Law and the 24
Lottery Prize Award Transfer Law; and to make 25
changes to the distribution of the job training 26
tax credit.27


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

       Section 1. That sections 718.01, 718.02, 3318.05, 3318.052, 28
3318.08, 3318.44, 3770.07, 3770.10, 3770.12, 5705.192, 5705.21, 29
5733.04, 5733.42, and 5747.01 be amended and section 3770.121 of 30
the Revised Code be enacted to read as follows:31

       Sec. 718.01.  (A) As used in this chapter:32

       (1) "Adjusted federal taxable income" means a C corporation's 33
federal taxable income before net operating losses and special 34
deductions as determined under the Internal Revenue Code, adjusted 35
as follows:36

       (a) Deduct intangible income to the extent included in 37
federal taxable income. The deduction shall be allowed regardless 38
of whether the intangible income relates to assets used in a trade 39
or business or assets held for the production of income.40

       (b) Add an amount equal to five per cent of intangible income 41
deducted under division (A)(1)(a) of this section, but excluding 42
that portion of intangible income directly related to the sale, 43
exchange, or other disposition of property described in section 44
1221 of the Internal Revenue Code;45

       (c) Add any losses allowed as a deduction in the computation 46
of federal taxable income if the losses directly relate to the 47
sale, exchange, or other disposition of an asset described in 48
section 1221 or 1231 of the Internal Revenue Code;49

       (d)(i) Except as provided in division (A)(1)(d)(ii) of this 50
section, deduct income and gain included in federal taxable income 51
to the extent the income and gain directly relate to the sale, 52
exchange, or other disposition of an asset described in section 53
1221 or 1231 of the Internal Revenue Code;54

        (ii) Division (A)(1)(d)(i) of this section does not apply to 55
the extent the income or gain is income or gain described in 56
section 1245 or 1250 of the Internal Revenue Code.57

        (e) Add taxes on or measured by net income allowed as a 58
deduction in the computation of federal taxable income;59

        (f) In the case of a real estate investment trust and 60
regulated investment company, add all amounts with respect to 61
dividends to, distributions to, or amounts set aside for or 62
credited to the benefit of investors and allowed as a deduction in 63
the computation of federal taxable income;64

        (g) If the taxpayer is not a C corporation and is not an 65
individual, the taxpayer shall compute adjusted federal taxable 66
income as if the taxpayer were a C corporation, except:67

        (i) Guaranteed payments and other similar amounts paid or 68
accrued to a partner, former partner, member, or former member 69
shall not be allowed as a deductible expense; and70

        (ii) Amounts paid or accrued to a qualified self-employed 71
retirement plan with respect to an owner or owner-employee of the 72
taxpayer, amounts paid or accrued to or for health insurance for 73
an owner or owner-employee, and amounts paid or accrued to or for 74
life insurance for an owner or owner-employee shall not be allowed 75
as a deduction.76

        Nothing in division (A)(1) of this section shall be construed 77
as allowing the taxpayer to add or deduct any amount more than 78
once or shall be construed as allowing any taxpayer to deduct any 79
amount paid to or accrued for purposes of federal self-employment 80
tax.81

        Nothing in this chapter shall be construed as limiting or 82
removing the ability of any municipal corporation to administer, 83
audit, and enforce the provisions of its municipal income tax.84

       (2) "Internal Revenue Code" means the Internal Revenue Code85
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended.86

       (3) "Schedule C" means internal revenue service schedule C87
filed by a taxpayer pursuant to the Internal Revenue Code.88

       (4) "Form 2106" means internal revenue service form 210689
filed by a taxpayer pursuant to the Internal Revenue Code.90

       (5) "Intangible income" means income of any of the following91
types: income yield, interest, capital gains, dividends, or other 92
income arising from the ownership, sale, exchange, or other 93
disposition of intangible property including, but not limited to, 94
investments, deposits, money, or credits as those terms are95
defined in Chapter 5701. of the Revised Code, and patents, 96
copyrights, trademarks, tradenames, investments in real estate 97
investment trusts, investments in regulated investment companies, 98
and appreciation on deferred compensation. "Intangible income" 99
does not include prizes, awards, or other income associated with 100
any lottery winnings or other similar games of chance.101

       (6) "S corporation" means a corporation that has made an102
election under subchapter S of Chapter 1 of Subtitle A of the103
Internal Revenue Code for its taxable year.104

       (7) For taxable years beginning on or after January 1, 2004, 105
"net profit" for a taxpayer other than an individual means 106
adjusted federal taxable income and "net profit" for a taxpayer 107
who is an individual means the individual's profit, other than 108
amounts described in division (F) of this section, required to be 109
reported on schedule C, schedule E, or schedule F.110

       (8) "Taxpayer" means a person subject to a tax on income 111
levied by a municipal corporation. "TaxpayerExcept as provided in 112
division (J) of this section, "taxpayer" does not include any 113
person that is a disregarded entity or a qualifying subchapter S 114
subsidiary for federal income tax purposes, but "taxpayer" 115
includes any other person who owns the disregarded entity or 116
qualifying subchapter S subsidiary.117

       (9) "Taxable year" means the corresponding tax reporting 118
period as prescribed for the taxpayer under the Internal Revenue 119
Code.120

       (10) "Tax administrator" means the individual charged with 121
direct responsibility for administration of a tax on income levied 122
by a municipal corporation and includes:123

        (a) The central collection agency and the regional income tax 124
agency and their successors in interest, and other entities 125
organized to perform functions similar to those performed by the 126
central collection agency and the regional income tax agency;127

        (b) A municipal corporation acting as the agent of another 128
municipal corporation; and129

        (c) Persons retained by a municipal corporation to administer 130
a tax levied by the municipal corporation, but only if the 131
municipal corporation does not compensate the person in whole or 132
in part on a contingency basis.133

        (11) "Person" includes individuals, firms, companies, 134
business trusts, estates, trusts, partnerships, limited liability 135
companies, associations, corporations, governmental entities, and 136
any other entity.137

        (12) "Schedule E" means internal revenue service schedule E 138
filed by a taxpayer pursuant to the Internal Revenue Code.139

        (13) "Schedule F" means internal revenue service schedule F 140
filed by a taxpayer pursuant to the Internal Revenue Code.141

       (B) No municipal corporation shall tax income at other than a 142
uniform rate.143

       (C) No municipal corporation shall levy a tax on income at a144
rate in excess of one per cent without having obtained the145
approval of the excess by a majority of the electors of the146
municipality voting on the question at a general, primary, or147
special election. The legislative authority of the municipal148
corporation shall file with the board of elections at least149
seventy-five days before the day of the election a copy of the150
ordinance together with a resolution specifying the date the151
election is to be held and directing the board of elections to152
conduct the election. The ballot shall be in the following form:153
"Shall the Ordinance providing for a ... per cent levy on income154
for (Brief description of the purpose of the proposed levy) be155
passed?156

        157

 FOR THE INCOME TAX 158
 AGAINST THE INCOME TAX  " 159

        160

       In the event of an affirmative vote, the proceeds of the levy161
may be used only for the specified purpose.162

       (D)(1) Except as provided in division (E) or (F) of this 163
section, no municipal corporation shall exempt from a tax on164
income compensation for personal services of individuals over165
eighteen years of age or the net profit from a business or166
profession.167

       (2)(a) For taxable years beginning on or after January 1, 168
2004, no municipal corporation shall tax the net profit from a 169
business or profession using any base other than the taxpayer's 170
adjusted federal taxable income.171

       (b) Division (D)(2)(a) of this section does not apply to any 172
taxpayer required to file a return under section 5745.03 of the 173
Revised Code or to the net profit from a sole proprietorship.174

       (E) The legislative authority of a municipal corporation may, 175
by ordinance or resolution, exempt from withholding and from a tax 176
on income the following:177

        (1) Compensation arising from the sale, exchange, or other 178
disposition of a stock option, the exercise of a stock option, or 179
the sale, exchange, or other disposition of stock purchased under 180
a stock option; or181

        (2) Compensation attributable to a nonqualified deferred 182
compensation plan or program described in section 3121(v)(2)(C) of 183
the Internal Revenue Code.184

        If an individual's taxable income includes income against185
which the taxpayer has taken a deduction for federal income tax186
purposes as reportable on the taxpayer's form 2106, and against187
which a like deduction has not been allowed by the municipal188
corporation, the municipal corporation shall deduct from the189
taxpayer's taxable income an amount equal to the deduction shown190
on such form allowable against such income, to the extent not191
otherwise so allowed as a deduction by the municipal corporation.192

       In the case of a taxpayer who has a net profit from a 193
business or profession that is operated as a sole proprietorship, 194
no municipal corporation may tax or use as the base for 195
determining the amount of the net profit that shall be considered 196
as having a taxable situs in the municipal corporation, an amount 197
other than the net profit required to be reported by the taxpayer 198
on schedule C or F from such sole proprietorship for the taxable 199
year.200

       In the case of a taxpayer who has a net profit from rental 201
activity required to be reported on schedule E, no municipal 202
corporation may tax or use as the base for determining the amount 203
of the net profit that shall be considered as having a taxable 204
situs in the municipal corporation, an amount other than the net 205
profit from rental activities required to be reported by the 206
taxpayer on schedule E for the taxable year.207

       (F) A municipal corporation shall not tax any of the208
following:209

       (1) The military pay or allowances of members of the armed210
forces of the United States and of members of their reserve211
components, including the Ohio national guard;212

       (2) The income of religious, fraternal, charitable,213
scientific, literary, or educational institutions to the extent214
that such income is derived from tax-exempt real estate,215
tax-exempt tangible or intangible property, or tax-exempt216
activities;217

       (3) Except as otherwise provided in division (G) of this218
section, intangible income;219

       (4) Compensation paid under section 3501.28 or 3501.36 of the 220
Revised Code to a person serving as a precinct election official, 221
to the extent that such compensation does not exceed one thousand 222
dollars annually. Such compensation in excess of one thousand 223
dollars may be subjected to taxation by a municipal corporation. A 224
municipal corporation shall not require the payer of such225
compensation to withhold any tax from that compensation.226

       (5) Compensation paid to an employee of a transit authority,227
regional transit authority, or regional transit commission created228
under Chapter 306. of the Revised Code for operating a transit bus229
or other motor vehicle for the authority or commission in or230
through the municipal corporation, unless the bus or vehicle is231
operated on a regularly scheduled route, the operator is subject232
to such a tax by reason of residence or domicile in the municipal233
corporation, or the headquarters of the authority or commission is234
located within the municipal corporation;235

       (6) The income of a public utility, when that public utility236
is subject to the tax levied under section 5727.24 or 5727.30 of237
the Revised Code, except a municipal corporation may tax the 238
following, subject to Chapter 5745. of the Revised Code:239

       (a) Beginning January 1, 2002, the income of an electric240
company or combined company;241

        (b) Beginning January 1, 2004, the income of a telephone242
company.243

       As used in division (F)(6) of this section, "combined 244
company," "electric company," and "telephone company" have the 245
same meanings as in section 5727.01 of the Revised Code.246

       (7) On and after January 1, 2003, items excluded from federal 247
gross income pursuant to section 107 of the Internal Revenue Code;248

       (8) On and after January 1, 2001, compensation paid to a249
nonresident individual to the extent prohibited under section250
718.011 of the Revised Code;251

       (9)(a) Except as provided in division (F)(9)(b) and (c) of 252
this section, an S corporation shareholder's distributive share of 253
net profits of the S corporation, other than any part of the254
distributive share of net profits that represents wages as defined 255
in section 3121(a) of the Internal Revenue Code or net earnings 256
from self-employment as defined in section 1402(a) of the Internal 257
Revenue Code.258

       (b) If, pursuant to division (H) of former section 718.01 of 259
the Revised Code as it existed before the effective date of the 260
amendment of that section by H.B. 127 of the 125th General 261
AssemblyMarch 11,2004, a majority of the electors of a municipal 262
corporation voted in favor of the question at an election held on 263
November 4, 2003, the municipal corporation may continue after 264
2002 to tax an S corporation shareholder's distributive share of 265
net profits of an S corporation.266

        (c) If, on December 6, 2002, a municipal corporation was 267
imposing, assessing, and collecting a tax on an S corporation 268
shareholder's distributive share of net profits of the S 269
corporation to the extent the distributive share would be 270
allocated or apportioned to this state under divisions (B)(1) and 271
(2) of section 5733.05 of the Revised Code if the S corporation 272
were a corporation subject to taxes imposed under Chapter 5733. of 273
the Revised Code, the municipal corporation may continue to impose 274
the tax on such distributive shares to the extent such shares 275
would be so allocated or apportioned to this state only until 276
December 31, 2004, unless a majority of the electors of the 277
municipal corporation voting on the question of continuing to tax 278
such shares after that date vote in favor of that question at an 279
election held November 2, 2004. If a majority of those electors 280
vote in favor of the question, the municipal corporation may 281
continue after December 31, 2004, to impose the tax on such 282
distributive shares only to the extent such shares would be so 283
allocated or apportioned to this state.284

       (d) For the purposes of division (D) of section 718.14 of the 285
Revised Code, a municipal corporation shall be deemed to have 286
elected to tax S corporation shareholders' distributive shares of 287
net profits of the S corporation in the hands of the shareholders 288
if a majority of the electors of a municipal corporation vote in 289
favor of a question at an election held under division (F)(9)(b) 290
or (c) of this section. The municipal corporation shall specify by 291
ordinance or rule that the tax applies to the distributive share 292
of a shareholder of an S corporation in the hands of the 293
shareholder of the S corporation.294

       (10) Employee compensation that is not "qualifying wages" as 295
defined in section 718.03 of the Revised Code.296

       (G) Any municipal corporation that taxes any type of297
intangible income on March 29, 1988, pursuant to Section 3 of298
Amended Substitute Senate Bill No. 238 of the 116th general299
assembly, may continue to tax that type of income after 1988 if a300
majority of the electors of the municipal corporation voting on301
the question of whether to permit the taxation of that type of302
intangible income after 1988 vote in favor thereof at an election303
held on November 8, 1988.304

       (H) Nothing in this section or section 718.02 of the Revised305
Code shall authorize the levy of any tax on income that a306
municipal corporation is not authorized to levy under existing307
laws or shall require a municipal corporation to allow a deduction308
from taxable income for losses incurred from a sole proprietorship309
or partnership.310

       (I)(1) Nothing in this chapter prohibits a municipal 311
corporation from allowing, by resolution or ordinance, a net 312
operating loss carryforward.313

        (2) Nothing in this chapter requires a municipal corporation 314
to allow a net operating loss carryforward.315

       (J)(1) A single member limited liability company that is a 316
disregarded entity for federal tax purposes may elect to be a 317
separate taxpayer from its single member in all Ohio municipal 318
corporations in which it either filed as a separate taxpayer or 319
did not file for its taxable year ending in 2003, if all of the 320
following conditions are met:321

       (a) The limited liability company's single member is also a 322
limited liability company;323

       (b) The limited liability company and its single member were 324
formed and doing business in one or more Ohio municipal 325
corporations for at least five years before January 1, 2004;326

       (c) Not later than December 31, 2004, the limited liability 327
company and its single member each make an election to be treated 328
as a separate taxpayer under division (J) of this section;329

       (d) The limited liability company was not formed for the 330
purpose of evading or reducing Ohio municipal corporation income 331
tax liability of the limited liability company or its single 332
member;333

       (e) The Ohio municipal corporation that is the primary place 334
of business of the sole member of the limited liability company 335
consents to the election.336

       (2) For purposes of division (J)(1)(e) of this section, a 337
municipal corporation is the primary place of business of a 338
limited liability company if, for the limited liability company's 339
taxable year ending in 2003, its income tax liability is greater 340
in that municipal corporation than in any other municipal 341
corporation in Ohio, and that tax liability to that municipal 342
corporation for its taxable year ending in 2003 is at least four 343
hundred thousand dollars.344

       Sec. 718.02.  This section does not apply to taxpayers that 345
are subject to and required to file reports under Chapter 5745. of 346
the Revised Code.347

       (A) Except as otherwise provided in division (D) of this 348
section, net profit from a business or profession conducted both349
within and without the boundaries of a municipal corporation shall350
be considered as having a taxable situs in such municipal351
corporation for purposes of municipal income taxation in the same352
proportion as the average ratio of the following:353

       (1) The average original cost of the real and tangible354
personal property owned or used by the taxpayer in the business or355
profession in such municipal corporation during the taxable period356
to the average original cost of all of the real and tangible357
personal property owned or used by the taxpayer in the business or358
profession during the same period, wherever situated.359

       As used in the preceding paragraph, real property shall360
include property rented or leased by the taxpayer and the value of361
such property shall be determined by multiplying the annual rental362
thereon by eight;363

       (2) Wages, salaries, and other compensation paid during the364
taxable period to persons employed in the business or profession365
for services performed in such municipal corporation to wages,366
salaries, and other compensation paid during the same period to367
persons employed in the business or profession, wherever their368
services are performed, excluding compensation that is not taxable369
by the municipal corporation under section 718.011 of the Revised370
Code;371

       (3) Gross receipts of the business or profession from sales372
made and services performed during the taxable period in such373
municipal corporation to gross receipts of the business or374
profession during the same period from sales and services,375
wherever made or performed.376

       If the foregoing apportionment formula does not produce an377
equitable result, another basis may be substituted, under uniform378
regulations, so as to produce an equitable result.379

       (B) As used in division (A) of this section, "sales made in a 380
municipal corporation" mean:381

       (1) All sales of tangible personal property delivered within382
such municipal corporation regardless of where title passes if383
shipped or delivered from a stock of goods within such municipal384
corporation;385

       (2) All sales of tangible personal property delivered within386
such municipal corporation regardless of where title passes even387
though transported from a point outside such municipal corporation388
if the taxpayer is regularly engaged through its own employees in389
the solicitation or promotion of sales within such municipal390
corporation and the sales result from such solicitation or391
promotion;392

       (3) All sales of tangible personal property shipped from a393
place within such municipal corporation to purchasers outside such394
municipal corporation regardless of where title passes if the395
taxpayer is not, through its own employees, regularly engaged in396
the solicitation or promotion of sales at the place where delivery397
is made.398

       (C) Except as otherwise provided in division (D) of this 399
section, net profit from rental activity not constituting a 400
business or profession shall be subject to tax only by the 401
municipal corporation in which the property generating the net 402
profit is located.403

        (D) This section does not apply to individuals who are 404
residents of the municipal corporation and, except as otherwise 405
provided in section 718.01 of the Revised Code, a municipal 406
corporation may impose a tax on all income earned by residents of 407
the municipal corporation to the extent allowed by the United 408
States Constitution.409

       (E) If, in computing the taxpayer's adjusted federal taxable 410
income, the taxpayer deducted any amount with respect to a stock 411
option granted to an employee, and if the employee is not required 412
to include in income any amount or any portion thereof because it 413
is exempted from taxation under division (F)(10) of section 718.01 414
of the Revised Code and division (A)(2)(d) of section 718.03 of 415
the Revised Code by a municipal corporation to which the taxpayer 416
has apportioned a portion of its net profit, the taxpayer shall 417
add the amount that is exempt from taxation to the taxpayer's net 418
profit that was apportioned to that municipal corporation. In no 419
case shall a taxpayer be required to add to its net profit that 420
was apportioned to that municipal corporation any amount other 421
than the amount upon which the employee would be required to pay 422
tax were the amount related to the stock option not exempted from 423
taxation.424

       This division applies solely for the purpose of making an 425
adjustment to the amount of a taxpayer's net profit that was 426
apportioned to a municipal corporation under divisions (A) and (B) 427
of this section.428

       Sec. 3318.05.  The conditional approval of the Ohio school429
facilities commission for a project shall lapse and the amount430
reserved and encumbered for such project shall be released unless431
the school district board accepts such conditional approval within432
one hundred twenty days following the date of certification of the433
conditional approval to the school district board and the electors434
of the school district vote favorably on both of the propositions435
described in divisions (A) and (B) of this section within one year436
of the date of such certification, except that a school district437
described in division (C) of this section does not need to submit438
the proposition described in division (B) of this section. The439
propositions described in divisions (A) and (B) of this section440
shall be combined in a single proposal. If the district board or441
the district's electors fail to meet such requirements and the442
amount reserved and encumbered for the district's project is443
released, the district shall be given first priority for project444
funding as such funds become available.445

       (A) On the question of issuing bonds of the school district446
board, for the school district's portion of the basic project447
cost, in an amount equal to the school district's portion of the448
basic project cost less the amount of the proceeds of any449
securities authorized or to be authorized under division (J) of450
section 133.06 of the Revised Code and dedicated by the school451
district board to payment of the district's portion of the basic452
project cost; and453

       (B) On the question of levying a tax the proceeds of which454
shall be used to pay the cost of maintaining the classroom455
facilities included in the project. Such tax shall be at the rate456
of not less than one-half mill for each dollar of valuation for a457
period of twenty-three years, subject to any extension approved458
under section 3318.061 of the Revised Code.459

       (C) If a school district has in place a tax levied under460
section 5705.21 of the Revised Code for general ongoing permanent461
improvements for a continuing period of time and the proceeds of 462
such tax can be used for maintenance, the school district need not463
levy the additional tax required under division (B) of this 464
section, provided the school district board includes in the 465
agreement entered into under section 3318.08 of the Revised Code 466
provisions earmarking an amount from the proceeds of that467
permanent improvement tax for maintenance of classroom facilities468
equivalent to the amount of the additional tax and for the469
equivalent number of years otherwise required under this section.470

       (D) Proceeds of the tax to be used for maintenance of the471
classroom facilities under either division (B) or (C) of this472
section shall be deposited into a separate fund established by the473
school district for such purpose.474

       Sec. 3318.052. At any time after the electors of a school475
district have approved either or both a property tax levied under476
section 5705.21 or 5705.218 of the Revised Code for the purpose of 477
permanent improvements, including general ongoing permanent 478
improvements, or a school district income tax levied under Chapter 479
5748. of the Revised Code, the proceeds of either of which, 480
pursuant to the ballot measures approved by the electors, are not 481
so restricted that they cannot be used to pay the costs of a 482
project or maintaining classroom facilities, the school district 483
board may:484

       (A) Within one year following the date of the certification485
of the conditional approval of the school district's classroom486
facilities project by the Ohio school facilities commission, enter487
into a written agreement with the commission, which may be part of488
an agreement entered into under section 3318.08 of the Revised489
Code, and in which the school district board covenants and agrees490
to do one or both of the following:491

       (1) Apply a specified amount of available proceeds of that 492
property tax levy, of that school district income tax, or of 493
securities issued under this section, or of proceeds from any two 494
or more of those sources, to pay all or part of the district's495
portion of the basic project cost of its classroom facilities496
project;497

       (2) Apply available proceeds of either or both a property tax 498
levied under section 5705.21 or 5705.218 of the Revised Code in 499
effect for a continuing period of time, or of a school district 500
income tax levied under Chapter 5748. of the Revised Code in 501
effect for a continuing period of time to the payment of costs of 502
maintaining the classroom facilities.503

       (B) Receive, as a credit against the amount of bonds required 504
under sections 3318.05 and 3318.06 of the Revised Code, to be 505
approved by the electors of the district and issued by the506
district board for the district's portion of the basic project507
cost of its classroom facilities project in order for the district508
to receive state assistance for the project, an amount equal to509
the specified amount that the district board covenants and agrees510
with the commission to apply as set forth in division (A)(1) of511
this section;512

       (C) Receive, as a credit against the amount of the tax levy513
required under sections 3318.05 and 3318.06 of the Revised Code,514
to be approved by the electors of the district to pay the costs of515
maintaining the classroom facilities in order to receive state516
assistance for the classroom facilities project, an amount517
equivalent to the specified amount of proceeds the school district518
board covenants and agrees with the commission to apply as519
referred to in division (A)(2) of this section;520

       (D) Apply proceeds of either or both a school district income 521
tax levied under Chapter 5748. of the Revised Code that may522
lawfully be used to pay the costs of a classroom facilities523
project or of a tax levied under section 5705.21 or 5705.218 of524
the Revised Code to the payment of debt charges on and financing525
costs related to securities issued under this section;526

       (E) Issue securities to provide moneys to pay all or part of527
the district's portion of the basic project cost of its classroom528
facilities project in accordance with an agreement entered into529
under division (A) of this section. Securities issued under this530
section shall be Chapter 133. securities and may be issued as531
general obligation securities or issued in anticipation of a532
school district income tax or as property tax anticipation notes533
under section 133.24 of the Revised Code. The district board's534
resolution authorizing the issuance and sale of general obligation535
securities under this section shall conform to the applicable536
requirements of section 133.22 or 133.23 of the Revised Code.537
Securities issued under this section shall have principal payments538
during each year after the year of issuance over a period of not539
more than twenty-three years and, if so determined by the district540
board, during the year of issuance. Securities issued under this541
section shall not be included in the calculation of net542
indebtedness of the district under section 133.06 of the Revised543
Code, if the resolution of the district board authorizing their544
issuance and sale includes covenants to appropriate annually from545
lawfully available proceeds of a property tax levied under section546
5705.21 or 5705.218 of the Revised Code or of a school district547
income tax levied under Chapter 5748. of the Revised Code and to548
continue to levy and collect the tax in amounts necessary to pay549
the debt charges on and financing costs related to the securities550
as they become due. No property tax levied under section 5705.21551
or 5705.218 of the Revised Code and no school district income tax552
levied under Chapter 5748. of the Revised Code that is pledged, or553
that the school district board has covenanted to levy, collect,554
and appropriate annually, to pay the debt charges on and financing555
costs related to securities issued under this section shall be556
repealed while those securities are outstanding. If such a tax is557
reduced by the electors of the district or by the district board558
while those securities are outstanding, the school district board559
shall continue to levy and collect the tax under the authority of560
the original election authorizing the tax at a rate in each year561
that the board reasonably estimates will produce an amount in that562
year equal to the debt charges on the securities in that year, 563
except that in the case of a school district income tax that 564
amount shall be rounded up to the nearest one-fourth of one per 565
cent.566

       No state moneys shall be released for a project to which this567
section applies until the proceeds of the tax securities issued568
under this section that are dedicated for the payment of the569
district portion of the basic project cost of its classroom570
facilities project are first deposited into the district's project571
construction fund.572

       Sec. 3318.08.  Except in the case of a joint vocational573
school district that receives assistance under sections 3318.40 to574
3318.45 of the Revised Code, if the requisite favorable vote on575
the election is obtained, or if the school district board has576
resolved to apply the proceeds of a property tax levy or the577
proceeds of an income tax, or a combination of proceeds from such578
taxes, as authorized in section 3318.052 of the Revised Code, the579
Ohio school facilities commission, upon certification to it of580
either the results of the election or the resolution under section581
3318.052 of the Revised Code, shall enter into a written agreement582
with the school district board for the construction and sale of583
the project. In the case of a joint vocational school district 584
that receives assistance under sections 3318.40 to 3318.45 of the 585
Revised Code, if the school district board of education and the 586
school district electors have satisfied the conditions prescribed 587
in division (D)(1) of section 3318.41 of the Revised Code, the 588
commission shall enter into an agreement with the school district 589
board for the construction and sale of the project. In either 590
case, the agreement shall include, but need not be limited to, the 591
following provisions:592

       (A) The sale and issuance of bonds or notes in anticipation593
thereof, as soon as practicable after the execution of the594
agreement, in an amount equal to the school district's portion of595
the basic project cost, including any securities authorized under 596
division (J) of section 133.06 of the Revised Code and dedicated 597
by the school district board to payment of the district's portion 598
of the basic project cost of the project; provided, that if at 599
that time the county treasurer of each county in which the school 600
district is located has not commenced the collection of taxes on 601
the general duplicate of real and public utility property for the 602
year in which the controlling board approved the project, the 603
school district board shall authorize the issuance of a first 604
installment of bond anticipation notes in an amount specified by 605
the agreement, which amount shall not exceed an amount necessary 606
to raise the net bonded indebtedness of the school district as of 607
the date of the controlling board's approval to within five 608
thousand dollars of the required level of indebtedness for the 609
preceding year. In the event that a first installment of bond 610
anticipation notes is issued, the school district board shall, as 611
soon as practicable after the county treasurer of each county in 612
which the school district is located has commenced the collection 613
of taxes on the general duplicate of real and public utility 614
property for the year in which the controlling board approved the 615
project, authorize the issuance of a second and final installment 616
of bond anticipation notes or a first and final issue of bonds.617

       The combined value of the first and second installment of618
bond anticipation notes or the value of the first and final issue619
of bonds shall be equal to the school district's portion of the620
basic project cost. The proceeds of any such bonds shall be used621
first to retire any bond anticipation notes. Otherwise, the622
proceeds of such bonds and of any bond anticipation notes, except623
the premium and accrued interest thereon, shall be deposited in624
the school district's project construction fund. In determining625
the amount of net bonded indebtedness for the purpose of fixing626
the amount of an issue of either bonds or bond anticipation notes,627
gross indebtedness shall be reduced by moneys in the bond628
retirement fund only to the extent of the moneys therein on the629
first day of the year preceding the year in which the controlling630
board approved the project. Should there be a decrease in the tax631
valuation of the school district so that the amount of632
indebtedness that can be incurred on the tax duplicates for the633
year in which the controlling board approved the project is less634
than the amount of the first installment of bond anticipation635
notes, there shall be paid from the school district's project636
construction fund to the school district's bond retirement fund to637
be applied against such notes an amount sufficient to cause the638
net bonded indebtedness of the school district, as of the first639
day of the year following the year in which the controlling board640
approved the project, to be within five thousand dollars of the641
required level of indebtedness for the year in which the642
controlling board approved the project. The maximum amount of643
indebtedness to be incurred by any school district board as its644
share of the cost of the project is either an amount that will645
cause its net bonded indebtedness, as of the first day of the year646
following the year in which the controlling board approved the647
project, to be within five thousand dollars of the required level648
of indebtedness, or an amount equal to the required percentage of649
the basic project costs, whichever is greater. All bonds and bond650
anticipation notes shall be issued in accordance with Chapter 133.651
of the Revised Code, and notes may be renewed as provided in652
section 133.22 of the Revised Code.653

       (B) The transfer of such funds of the school district board654
available for the project, together with the proceeds of the sale655
of the bonds or notes, except premium, accrued interest, and656
interest included in the amount of the issue, to the school657
district's project construction fund;658

       (C) For all school districts except joint vocational school659
districts that receive assistance under sections 3318.40 to660
3318.45 of the Revised Code, the following provisions as661
applicable:662

       (1) If section 3318.052 of the Revised Code applies, the663
earmarking of the proceeds of a tax levied under section 5705.21664
of the Revised Code for general ongoing permanent improvements or665
under section 5705.218 of the Revised Code for the purpose of666
permanent improvements, or the proceeds of a school district667
income tax levied under Chapter 5748. of the Revised Code, or the668
proceeds from a combination of those two taxes, in an amount to669
pay all or part of the service charges on bonds issued to pay the670
school district portion of the project and an amount equivalent to 671
all or part of the tax required under division (B) of section 672
3318.05 of the Revised Code;673

       (2) If section 3318.052 of the Revised Code does not apply,674
either of the following:675

       (a) The levy of the tax authorized at the election for the676
payment of maintenance costs, as specified in division (B) of677
section 3318.05 of the Revised Code;678

       (b) If the school district electors have approved a679
continuing tax for general ongoing permanent improvements under680
section 5705.21 of the Revised Code and that tax can be used for 681
maintenance, the earmarking of an amount of the proceeds from such 682
tax for maintenance of classroom facilities as specified in 683
division (B) of section 3318.05 of the Revised Code.684

       (D) For joint vocational school districts that receive685
assistance under sections 3318.40 to 3318.45 of the Revised Code,686
provision for deposit of school district moneys dedicated to687
maintenance of the classroom facilities acquired under those688
sections as prescribed in section 3318.43 of the Revised Code;689

       (E) Dedication of any local donated contribution as provided690
for under section 3318.084 of the Revised Code, including a691
schedule for depositing such moneys applied as an offset of the692
district's obligation to levy the tax described in division (B) of693
section 3318.05 of the Revised Code as required under division694
(D)(2) of section 3318.084 of the Revised Code;695

       (F) Ownership of or interest in the project during the period 696
of construction, which shall be divided between the commission and 697
the school district board in proportion to their respective698
contributions to the school district's project construction fund;699

       (G) Maintenance of the state's interest in the project until700
any obligations issued for the project under section 3318.26 of701
the Revised Code are no longer outstanding;702

       (H) The insurance of the project by the school district from703
the time there is an insurable interest therein and so long as the704
state retains any ownership or interest in the project pursuant to705
division (F) of this section, in such amounts and against such706
risks as the commission shall require; provided, that the cost of707
any required insurance until the project is completed shall be a708
part of the basic project cost;709

       (I) The certification by the director of budget and710
management that funds are available and have been set aside to711
meet the state's share of the basic project cost as approved by712
the controlling board pursuant to either section 3318.04 or713
division (B)(1) of section 3318.41 of the Revised Code;714

       (J) Authorization of the school district board to advertise715
for and receive construction bids for the project, for and on716
behalf of the commission, and to award contracts in the name of717
the state subject to approval by the commission;718

       (K) Provisions for the disbursement of moneys from the school 719
district's project account upon issuance by the commission or the 720
commission's designated representative of vouchers for work done 721
to be certified to the commission by the treasurer of the school 722
district board;723

       (L) Disposal of any balance left in the school district's724
project construction fund upon completion of the project;725

       (M) Limitations upon use of the project or any part of it so726
long as any obligations issued to finance the project under727
section 3318.26 of the Revised Code are outstanding;728

       (N) Provision for vesting the state's interest in the project729
to the school district board when the obligations issued to 730
finance the project under section 3318.26 of the Revised Code are 731
outstanding;732

       (O) Provision for deposit of an executed copy of the733
agreement in the office of the commission;734

       (P) Provision for termination of the contract and release of735
the funds encumbered at the time of the conditional approval, if736
the proceeds of the sale of the bonds of the school district board737
are not paid into the school district's project construction fund738
and if bids for the construction of the project have not been739
taken within such period after the execution of the agreement as740
may be fixed by the commission;741

       (Q) Provision for the school district to maintain the project 742
in accordance with a plan approved by the commission;743

       (R)(1) For all school districts except a district undertaking 744
a project under section 3318.38 of the Revised Code or a joint 745
vocational school district undertaking a project under sections 746
3318.40 to 3318.45 of the Revised Code, provision that all state 747
funds reserved and encumbered to pay the state share of the cost 748
of the project pursuant to section 3318.03 of the Revised Code be 749
spent on the construction or acquisition of the project prior to 750
the expenditure of any funds provided by the school district to 751
pay for its share of the project cost, unless the school district752
certifies to the commission that expenditure by the school753
district is necessary to maintain the tax-exempt status of notes754
or bonds issued by the school district to pay for its share of the755
project cost or to comply with applicable temporary investment756
periods or spending exceptions to rebate as provided for under757
federal law in regard to those notes or bonds, in which cases, the758
school district may commit to spend, or spend, a portion of the 759
funds it provides;760

       (2) For a school district undertaking a project under section761
3318.38 of the Revised Code or a joint vocational school district 762
undertaking a project under sections 3318.40 to 3318.45 of the 763
Revised Code, provision that the state funds reserved and 764
encumbered and the funds provided by the school district to pay 765
the basic project cost of any segment of the project, or of the 766
entire project if it is not divided into segments, be spent on the 767
construction and acquisition of the project simultaneously in 768
proportion to the state's and the school district's respective 769
shares of that basic project cost as determined under section 770
3318.032 of the Revised Code or, if the district is a joint 771
vocational school district, under section 3318.42 of the Revised 772
Code.773

       (S) A provision stipulating that the commission may prohibit774
the district from proceeding with any project if the commission775
determines that the site is not suitable for construction776
purposes. The commission may perform soil tests in its777
determination of whether a site is appropriate for construction778
purposes.779

       (T) A provision stipulating that, unless otherwise authorized 780
by the commission, any contingency reserve portion of the 781
construction budget prescribed by the commission shall be used782
only to pay costs resulting from unforeseen job conditions, to783
comply with rulings regarding building and other codes, to pay784
costs related to design clarifications or corrections to contract785
documents, and to pay the costs of settlements or judgments786
related to the project as provided under section 3318.086 of the787
Revised Code;788

       (U) Provision stipulating that for continued release of 789
project funds the school district board shall comply with section 790
3313.41 of the Revised Code throughout the project and shall 791
notify the department of education and the Ohio community school 792
association when the board plans to dispose of facilities by sale 793
under that section;794

       (V) Provision that the commission shall not approve a 795
contract for demolition of a facility until the school district 796
board has complied with section 3313.41 of the Revised Code 797
relative to that facility, unless demolition of that facility is 798
to clear a site for construction of a replacement facility 799
included in the district's project.800

       Sec. 3318.44. (A) A joint vocational school district board of 801
education may generate the school district's portion of the basic 802
project cost of its project under sections 3318.40 to 3318.45 of 803
the Revised Code using any combination of the following means if 804
lawfully employed for the acquisition of classroom facilities:805

        (1) The issuance of securities in accordance with Chapter806
133. and section 3311.20 of the Revised Code;807

        (2) Local donated contributions as authorized under section808
3318.084 of the Revised Code;809

        (3) A levy for permanent improvements under section 3311.21810
or 5705.21 of the Revised Code;811

        (4) Bonds issued pursuant to division (B) of this section.812

        (B) By resolution adopted by a majority of all its members, a 813
school district board in order to pay all or part of the school814
district's portion of its basic project cost may apply the815
proceeds of a tax levied under section 5705.21 of the Revised Code816
tofor general ongoing permanent improvements if the proceeds of 817
that levy lawfully may be used for general construction, 818
renovation, repair, or maintenance of classroom facilities to 819
leverage bonds adequate to pay all or part of the school district 820
portion of the basic project cost of the school district's project 821
under sections 3318.40 to 3318.45 of the Revised Code or to 822
generate an amount equivalent to all or part of the amount 823
required under section 3318.43 of the Revised Code to be used for 824
maintenance of classroom facilities acquired under the project. 825
Bonds issued under this division shall be Chapter 133. securities, 826
but the issuance of the bonds shall not be subject to a vote of 827
the electors of the school district as long as the tax proceeds828
earmarked for payment of the service charges on the bonds may829
lawfully be used for that purpose.830

        No state moneys shall be released for a project to which this 831
division applies until the proceeds of any bonds issued under this 832
division that are dedicated for payment of the school district's 833
portion of the basic project cost are first deposited into the 834
school district's project construction fund.835

        (C) A school district board of education may adopt a836
resolution proposing that any of the following questions be837
combined with a question specified in section 3318.45 of the838
Revised Code:839

        (1) A bond issue question under section 133.18 of the Revised 840
Code;841

        (2) A tax levy question under section 3311.21 of the Revised 842
Code;843

        (3) A tax levy question under section 5705.21 of the Revised 844
Code.845

        Any question described in divisions (C)(1) to (3) of this846
section that is combined with a question proposed under section847
3318.45 of the Revised Code shall be for the purpose of either848
paying for any permanent improvement, as defined in section 133.01849
of the Revised Code, or generating operating revenue specifically850
for the facilities acquired under the school district's project851
under Chapter 3318. of the Revised Code or for both to the extent852
such purposes are permitted by the sections of law under which853
each is proposed.854

        (D) The board of education of a joint vocational school855
district that receives assistance under this section may enter856
into an agreement for joint issuance of bonds as provided for in857
section 3318.085 of the Revised Code.858

       Sec. 3770.07.  (A)(1) Except as provided in division (A)(2) 859
of this section, lottery prize awards shall be claimed by the 860
holder of the winning lottery ticket, or by the executor or861
administrator, or the trustee of a trust, of the estate of a862
deceased holder of a winning lottery ticket, in a manner to be 863
determined by the state lottery commission, within one hundred 864
eighty days after the date on which the prize award was announced 865
if the lottery game is an on-line game, and within one hundred 866
eighty days after the close of the game if the lottery game is an 867
instant game.868

       (2) An eligible person serving on active military duty in any 869
branch of the United States armed forces during a war or national 870
emergency declared in accordance with federal law may submit a 871
delayed claim for a lottery prize award. The eligible person shall 872
do so by notifying the commission about the claim not later than 873
the five hundred fortieth day after the date on which the prize 874
award was announced if the lottery game is an on-line game or the 875
date on which the lottery game closed if the lottery game is an 876
instant game.877

       (3) If no valid claim to a lottery prize award is made within 878
the prescribed period, the prize money, the cost of goods and879
services awarded as prizes, or, if goods or services awarded as 880
prizes are resold by the commission, the proceeds from their sale 881
shall be returned to the state lottery fund and distributed in 882
accordance with section 3770.06 of the Revised Code.883

       (4) As used in this division:884

       (a) "Eligible person" means a person who is entitled to a 885
lottery prize award and who falls into either of the following 886
categories:887

       (i) While on active military duty in this state, the person, 888
as the result of a war or national emergency declared in 889
accordance with federal law, is transferred out of this state 890
before the one hundred eightieth day after the date on which the 891
winner of the lottery prize award is selected.892

       (ii) While serving in the reserve forces in this state, the 893
person, as the result of a war or national emergency declared in 894
accordance with federal law, is placed on active military duty and 895
is transferred out of this state before the expiration of the one 896
hundred eightieth day after the date on which the prize drawing 897
occurs for an on-line game or before the expiration of the one 898
hundred eightieth day following the close of an instant game as 899
determined by the commission.900

       (b) "Active military duty" means that a person is covered by 901
the "Servicemembers Civil Relief Act," 117 Stat. 2835 (2003), 50 902
U.S.C. 501 et. seq., as amended, or the "Uniformed Services 903
Employment and Reemployment Rights Act of 1994," 108 Stat. 3149, 904
38 U.S.C. 4301 et. seq., as amended.905

       (B) If a prize winner, as defined in section 3770.10 of the906
Revised Code, is under eighteen years of age, or is under some907
other legal disability, and the prize money or the cost of goods908
or services awarded as a prize exceeds one thousand dollars, the909
director of the state lottery commission shall order that payment 910
be made to the order of the legal guardian of that prize winner. 911
If the amount of the prize money or the cost of goods or services 912
awarded as a prize is one thousand dollars or less, the director 913
may order that payment be made to the order of the adult member, 914
if any, of that prize winner's family legally responsible for the 915
care of that prize winner.916

       (C) No right of any prize winner, as defined in section917
3770.10 of the Revised Code, to a prize award shall be the subject918
of a security interest or used as collateral.919

       (D)(1) No right of any prize winner, as defined in section920
3770.10 of the Revised Code, to a prize award shall be assignable,921
or subject to garnishment, attachment, execution, withholding, or922
deduction, except as follows: as provided in sections 3119.80,923
3119.81, 3121.02, 3121.03, and 3123.06 of the Revised Code; when924
the payment is to be made to the executor or administrator, or the925
trustee of a trust, of the estate of a winning ticket holder; when926
the award of a prize is disputed, any person may be awarded a927
prize award to which another has claimed title, pursuant to the928
order of a court of competent jurisdiction; when a person is 929
awarded a prize award to which another has claimed title, pursuant 930
to the order of a federal bankruptcy court under Title 11 of the 931
United States Code; when the director is to make a payment 932
pursuant to section 3770.071 or 3770.073 of the Revised Code; or 933
as provided in sections 3770.10 to 3770.14 of the Revised Code.934

       (2) The commission shall adopt rules pursuant to section935
3770.03 of the Revised Code concerning the payment of prize awards936
upon the death of a prize winner, as defined in section 3770.10 of 937
the Revised Code. Upon the death of a prize winner, the remainder938
of the prize winner's prize award, to the extent it is not subject 939
to a transfer agreement under sections 3770.10 to 3770.14 of the 940
Revised Code, may be paid to the executor, administrator, or 941
trustee in the form of a discounted lump sum cash settlement.942

       (E) No lottery prize award shall be awarded to or for any943
officer or employee of the state lottery commission, any officer944
or employee of the auditor of state actively coordinating and 945
certifying commission drawings, or any blood relative or spouse of946
such an officer or employee of the commission or auditor of state947
living as a member of the officer's or employee's household, nor948
shall any such officer, employee, blood relative, or spouse 949
attempt to claim a lottery prize award.950

       (F) The director may prohibit vendors to the commission and951
their employees from being awarded a lottery prize award.952

       (G) Upon the payment of prize awards pursuant to this953
section, the director and the commission are discharged from all954
further liability for their payment.955

       Sec. 3770.10. As used in sections 3770.07 and 3770.10 to956
3770.14 of the Revised Code:957

       (A) "Court of competent jurisdiction" means either the 958
general division or the probate division of the court of common 959
pleas of the county in which the prize winner or transferor960
resides, or, if the prize winner or transferor is not a resident 961
of this state, either the general division or the probate division 962
of the court of common pleas of Franklin county or a federal court963
having jurisdiction over the lottery prize award.964

       (B) "Discounted present value" means the present value of the 965
future payments of a lottery prize award that is determined by966
discounting those payments to the present, using the most recently967
published applicable federal rate for determining the present968
value of an annuity as issued by the United States internal969
revenue service and assuming daily compounding.970

       (C) "Independent professional advice" means the advice of an971
attorney, a certified public accountant, an actuary, or any other972
licensed professional adviser if all of the following apply:973

       (1) The prize winner has engaged the services of the licensed974
professional adviser to render advice concerning the legal and 975
other implications of a transfer of the lottery prize award.976

       (2) The licensed professional adviser is not affiliated in977
any manner with or compensated in any manner by the transferee of978
the lottery prize award.979

       (3) The compensation of the licensed professional adviser is980
not affected by whether or not a transfer of a lottery prize award981
occurs.982

       (D) "Prize winner" means any person that holds the right to983
receive all or any part of a lottery prize award as a result of984
being any of the following:985

       (1) A person who is a claimant under division (A) of section 986
3770.07 of the Revised Code;987

       (2) A person who is entitled to a prize award and who is988
under a legal disability as described in division (B) of section 989
3770.07 of the Revised Code;990

       (3) A person who was awarded a prize award to which another991
has claimed title by a federal bankruptcy court order or other992
court order underreferred to in division (D)(1) of section 993
3770.07 of the Revised Code;994

       (4) A person who is receiving payments upon the death of a995
prize winner as provided in division (D)(2) of section 3770.07 of 996
the Revised Code.997

       (E) "Transfer" means any form of sale, assignment, or998
redirection of payment of all or any part of a lottery prize award999
for consideration.1000

       (F) "Transfer agreement" means an agreement that is complete1001
and valid, and that provides for the transfer of all or any part1002
of a lottery prize award from a transferor to a transferee. A1003
transfer agreement is incomplete and invalid unless the agreement1004
contains both of the following:1005

       (1) A statement, signed by the transferor under penalties of1006
perjury, that the transferor irrevocably agrees that the1007
transferor is subject to the tax imposed by Chapter 5733. or 5747.1008
of the Revised Code with respect to gain or income which the1009
transferor will recognize in connection with the transfer. If the1010
transferor is a pass-through entity, as defined in section 5733.041011
of the Revised Code, each investor in the pass-through entity1012
shall also sign under penalties of perjury a statement that the1013
investor irrevocably agrees that the investor is subject to the1014
tax imposed by Chapter 5733. or 5747. of the Revised Code with1015
respect to gain or income which the transferor and the investor1016
will recognize in connection with the transfer.1017

       (2) A statement, signed by the transferee, that the1018
transferee irrevocably agrees that the transferee is subject to1019
the withholding requirements imposed by division (C) of section1020
3770.072 of the Revised Code and that the transferee is subject to 1021
the tax imposed by Chapter 5733. or 5747. of the Revised Code with 1022
respect to gain or income which the transferee will recognize in 1023
connection with lottery prize awards to be received as a result of 1024
the transfer. If the transferee is a pass-through entity, as 1025
defined in section 5733.04 of the Revised Code, each investor in 1026
the pass-through entity shall also sign under penalties of perjury 1027
a statement setting forth that the investor irrevocably agrees 1028
that the investor is subject to the withholding requirements 1029
imposed by division (C) of section 3770.072 of the Revised Code 1030
and is subject to the tax imposed by Chapter 5733. or 5747. of the1031
Revised Code with respect to gain or income which the transferee1032
and the investor will recognize in connection with lottery prize1033
awards to be received as a result of the transfer.1034

       (G) "Transferee" means a party acquiring or proposing to1035
acquire all or any part of a lottery prize award through a1036
transfer.1037

       (H) "Transferor" means either a prize winner or a transferee1038
in an earlier transfer whose interest is acquired by or is sought1039
to be acquired by a transferee or a new transferee through a1040
transfer.1041

       Sec. 3770.12.  A court of competent jurisdiction shall 1042
approve a transfer of a lottery prize award only in a final order 1043
that is based on express findings of the court. The court shall 1044
approve the transfer only if each of the following conditions that 1045
applies is met and is included in the court's express findings:1046

       (A) If the transferor is a prize winner, the transferee has1047
provided to the prize winner a disclosure statement that complies1048
with section 3770.11 of the Revised Code, and the prize winner has1049
confirmed the prize winner's receipt of the disclosure statement,1050
as evidenced by the prize winner's notarized signature on a copy1051
of the disclosure statement.1052

       (B) If the transferor is a prize winner, the prize winner has 1053
received independent professional advice regarding the legal and 1054
other implications of the transfer.1055

       (C) The transferee has given written notice of the1056
transferee's name, address, and taxpayer identification number to1057
the state lottery commission and has filed a copy of that notice1058
with the court in which the application for approval of the1059
transfer was filed.1060

       (D) The transferee is a trust, limited partnership, general1061
partnership, corporation, professional association, limited1062
liability company, or other entity that is qualified to do1063
business in this state and meets the registration requirements for1064
that type of entity under Title XVII of the Revised Code.1065

       (E) The transfer complies with all applicable requirements of1066
the Revised Code and does not contravene any applicable law1067
statute or court order.1068

       (F) The transfer does not include or cover the amounts of the 1069
lottery prize award that are required to be withheld or deducted 1070
pursuant to section 3119.80, 3119.81, 3121.02, 3121.03, 3123.06, 1071
3770.071, or 3770.072 of the Revised Code.1072

       (G) Any amounts described in division (F) of this section1073
that are required to be withheld or deducted, as of the date of1074
the court order, will be offset by the commission first against1075
remaining payments due the transferor and then against payments1076
due the transferee.1077

       (H) Except as provided in divisions (F) and (G) of this1078
section, that the transferor's interest in each and all of the1079
future payments from a particular lottery prize award is to be1080
paid to a single transferee, or, if the payments from the lottery1081
prize award are to be directed from the state lottery commission1082
to multiple transferees, the commission has promulgated rules1083
under section 3770.03 of the Revised Code permitting transfers to1084
multiple transferees, and the transfer is consistent with those1085
rules.1086

       (I) If the lottery prize award has been transferred within1087
twelve months immediately preceding the effective date of the1088
proposed transfer, the state lottery commission has not objected1089
to the proposed transfer. The court shall presume that the1090
requirements of this division are met unless the commission1091
notifies the court in writing before the hearing on the1092
application for transfer, or through counsel at that hearing, that1093
a transfer of the same lottery prize award has been made within1094
that twelve-month period and that the commission objects to a1095
subsequent transfer within that twelve-month period. The court1096
shall find that the requirements of this division are not met if1097
the commission provides notice of a prior transfer of the same1098
lottery prize award within that twelve-month period and its1099
objection to the proposed transfer, unless the transferor or1100
transferee shows by clear and convincing evidence that no previous1101
transfer of the same lottery prize award occurred within that1102
twelve-month period. For purposes of this division, any of a 1103
series of transfers of a lottery prize award that occur 1104
simultaneously as part of a single transaction shall not be 1105
considered to be a prior transfer of the lottery prize award 1106
within the twelve-month period immediately preceding the effective 1107
date of the proposed transfer, provided that the condition set 1108
forth in division (C) of this section is met.1109

       If the court determines that all of the conditions in 1110
divisions (A) to (I) of this section that apply are met, the 1111
transfer of the lottery prize award shall be presumed to be fair 1112
and reasonable and in the best interests of the prize winner.1113

       Sec. 3770.121. Any state lottery commission rules allowing 1114
lottery prize awards to be paid in installments also shall allow a 1115
prize winner who is being paid a prize award in that manner to 1116
transfer all or a portion of the remainder of the prize award, 1117
subject to each of the following conditions:1118

       (A) If each transfer is for less than one hundred per cent of 1119
the remainder of the prize award, the remainder of the prize award 1120
for each transfer must be five hundred thousand dollars or greater 1121
at the time of the transfer. If the lottery prize award is a 1122
lifetime prize, for each transfer the remainder of the minimum 1123
guaranteed prize to which the prize winner is entitled must be 1124
five hundred thousand dollars or greater at the time of the 1125
transfer.1126

       (B) Payments of the prize award transferred shall be subject 1127
to the withholding or deduction of any amounts that are required 1128
to be withheld or deducted under section 3119.80, 3119.81, 1129
3121.02, 3121.03, 3123.06, 3770.071, or 5747.062 of the Revised 1130
Code.1131

       (C) The maximum number of transfers under this section with 1132
respect to any single prize award shall not exceed three unless a 1133
greater number has been specified by the commission in the rules.1134

       Sec. 5705.192.  (A) For the purposes of this section only,1135
"taxing authority" includes a township board of park commissioners1136
appointed under section 511.18 of the Revised Code.1137

       (B) A taxing authority may propose to replace an existing 1138
levy that the taxing authority is authorized to levy, regardless 1139
of the section of the Revised Code under which the authority is 1140
granted, except a school district emergency levy proposed pursuant 1141
to sections 5705.194 to 5705.197 of the Revised Code. The taxing1142
authority may propose to replace the existing levy in its entirety1143
at the rate at which it is authorized to be levied; may propose to1144
replace a portion of the existing levy at a lesser rate; or may1145
propose to replace the existing levy in its entirety and increase1146
the rate at which it is levied. If the taxing authority proposes1147
to replace an existing levy, the proposed levy shall be called a1148
replacement levy and shall be so designated on the ballot. A1149
Except as otherwise provided in this division, a replacement levy 1150
shall be limited to the purpose of the existing levy, and shall1151
appear separately on the ballot from, and shall not be conjoined1152
with, the renewal of any other existing levy. TheIn the case of 1153
an existing school district levy imposed under section 5705.21 of 1154
the Revised Code for the purpose specified in division (F) of 1155
section 5705.19 of the Revised Code, the replacement for that 1156
existing levy may be for the same purpose or for the purpose of 1157
general permanent improvements as defined in section 5705.21 of 1158
the Revised Code.1159

        The resolution proposing a replacement levy shall specify the 1160
purpose of the levy; its proposed rate expressed in mills; whether 1161
the proposed rate is the same as the rate of the existing levy, a1162
reduction, or an increase; the extent of any reduction or increase1163
expressed in mills; the first calendar year in which the levy will1164
be due; and the term of the levy, expressed in years or, if1165
applicable, that it will be levied for a continuing period of1166
time.1167

       The sections of the Revised Code governing the maximum rate1168
and term of the existing levy, the contents of the resolution that1169
proposed the levy, the adoption of the resolution, the1170
arrangements for the submission of the question of the levy, and1171
notice of the election also govern the respective provisions of1172
the proposal to replace the existing levy, except that theas 1173
provided in division (B)(1) or (2) of this section:1174

        (1) In the case of an existing school district levy imposed 1175
under section 5705.21 of the Revised Code for the purpose 1176
specified in division (F) of section 5705.19 of the Revised Code 1177
that is to be replaced by a levy for general permanent 1178
improvements, the maximum term of the replacement levy is not 1179
limited to the term of the existing levy and may be for a 1180
continuing period of time.1181

       (2) The date on which the election is held shall be as 1182
follows:1183

       (1)(a) For the replacement of a levy with a fixed term of1184
years, the date of the general election held during the last year1185
the existing levy may be extended on the real and public utility1186
property tax list and duplicate, or the date of any election held1187
in the ensuing year;1188

       (2)(b) For the replacement of a levy imposed for a continuing1189
period of time, the date of any election held in any year after1190
the year the levy to be replaced is first approved by the1191
electors, except that only one election on the question of1192
replacing the levy may be held during any calendar year.1193

       The failure by the electors to approve a proposal to replace1194
a levy imposed for a continuing period of time does not terminate1195
the existing continuing levy.1196

       (B)(C) The form of the ballot at the election on the question1197
of a replacement levy shall be as follows:1198

       "A replacement of a tax for the benefit of .......... (name1199
of subdivision or public library) for the purpose of ..........1200
(the purpose stated in the resolution) at a rate not exceeding1201
.......... mills for each one dollar of valuation, which amounts1202
to .......... (rate expressed in dollars and cents) for each one1203
hundred dollars in valuation, for .......... (number of years levy1204
is to run, or that it will be levied for a continuous period of1205
time)1206

        1207

 FOR THE TAX LEVY 1208
 AGAINST THE TAX LEVY  " 1209

        1210

       If the proposal is to replace an existing levy and increase1211
the rate of the existing levy, the form of the ballot shall be1212
changed by adding the words ".......... mills of an existing levy1213
and an increase of .......... mills, to constitute" after the1214
words "a replacement of." If the proposal is to replace only a1215
portion of an existing levy, the form of the ballot shall be1216
changed by adding the words "a portion of an existing levy, being1217
a reduction of .......... mills, to constitute" after the words "a1218
replacement of."1219

       If the tax is to be placed on the tax list of the current tax1220
year, the form of the ballot shall be modified by adding at the1221
end of the form the phrase ", commencing in .......... (first year1222
the replacement tax is to be levied), first due in calendar year1223
.......... (first calendar year in which the tax shall be due)."1224

       The question covered by the resolution shall be submitted as1225
a separate proposition, but may be printed on the same ballot with1226
any other proposition submitted at the same election, other than1227
the election of officers. More than one such question may be1228
submitted at the same election.1229

       (C)(D) Two existing levies, or any portion of those levies,1230
may be combined into one replacement levy, so long as both of the1231
existing levies are for the same purpose and either both are due1232
to expire the same year or both are for a continuing period of1233
time. The question of combining all or portions of the two1234
existing levies into the replacement levy shall appear as one1235
ballot proposition before the electors. If the electors approve1236
the ballot proposition, all or the stated portions of the two1237
existing levies are replaced by one replacement levy.1238

       (D)(E) A levy approved in excess of the ten-mill limitation1239
under this section shall be certified to the tax commissioner. In1240
the first year of a levy approved under this section, the levy1241
shall be extended on the tax lists after the February settlement1242
succeeding the election at which the levy was approved. If the1243
levy is to be placed on the tax lists of the current year, as1244
specified in the resolution providing for its submission, the1245
result of the election shall be certified immediately after the1246
canvass by the board of elections to the taxing authority, which1247
shall forthwith make the necessary levy and certify it to the1248
county auditor, who shall extend it on the tax lists for1249
collection. After the first year, the levy shall be included in1250
the annual tax budget that is certified to the county budget1251
commission.1252

       If notes are authorized to be issued in anticipation of the1253
proceeds of the existing levy, notes may be issued in anticipation1254
of the proceeds of the replacement levy, and such issuance is1255
subject to the terms and limitations governing the issuance of1256
notes in anticipation of the proceeds of the existing levy.1257

       This section does not authorize a tax to be levied in any1258
year after the year in which revenue is not needed for the purpose1259
for which the tax is levied.1260

       Sec. 5705.21.  (A) At any time, the board of education of any 1261
city, local, exempted village, cooperative education, or joint 1262
vocational school district, by a vote of two-thirds of all its 1263
members, may declare by resolution that the amount of taxes which 1264
may be raised within the ten-mill limitation by levies on the 1265
current tax duplicate will be insufficient to provide an adequate 1266
amount for the necessary requirements of the school district, that 1267
it is necessary to levy a tax in excess of such limitation for one 1268
of the purposes specified in division (A), (D), (F), (H), or (DD) 1269
of section 5705.19 of the Revised Code, for general, on-going1270
permanent improvements, for the purpose of operating a cultural 1271
center, or for the purpose of providing education technology, and 1272
that the question of such additional tax levy shall be submitted 1273
to the electors of the school district at a special election on a 1274
day to be specified in the resolution.1275

       As used in this section, "cultural center" means a1276
freestanding building, separate from a public school building,1277
that is open to the public for educational, musical, artistic, and 1278
cultural purposes.1279

       As used in this section,; "education technology" means, but 1280
is not limited to, computer hardware, equipment, materials, and1281
accessories, equipment used for two-way audio or video, and1282
software; and "general permanent improvements" means permanent 1283
improvements without regard to the limitation of division (F) of 1284
section 5705.19 of the Revised Code that the improvements be a 1285
specific improvement or a class of improvements that may be 1286
included in a single bond issue.1287

       The submission of questions to the electors under this1288
section is subject to the limitation on the number of election1289
dates established by section 5705.214 of the Revised Code.1290

       (B) Such resolution shall be confined to a single purpose and 1291
shall specify the amount of the increase in rate that it is1292
necessary to levy, the purpose of the levy, and the number of 1293
years during which the increase in rate shall be in effect. The 1294
number of years may be any number not exceeding five or, if the 1295
levy is for current expenses of the district or for general, 1296
on-going permanent improvements, for a continuing period of time. 1297
The resolution shall specify the date of holding such election, 1298
which shall not be earlier than seventy-five days after the 1299
adoption and certification of the resolution and which shall be1300
consistent with the requirements of section 3501.01 of the Revised 1301
Code. The1302

       The resolution may propose to renew one or more existing1303
levies imposed under this section or to increase or decrease a 1304
single levy imposed under this section. If the board of education 1305
imposes one or more existing levies for the purpose specified in 1306
division (F) of section 5705.19 of the Revised Code, the 1307
resolution may propose to renew one or more of those existing 1308
levies, or to increase or decrease a single such existing levy, 1309
for the purpose of general permanent improvements. If1310

       If the resolution proposes to renew two or more existing 1311
levies, the levies shall be levied for the same purpose. The 1312
resolution shall identify those levies and the rates at which they 1313
are levied. The resolution also shall specify that the existing 1314
levies shall not be extended on the tax lists after the year 1315
preceding the year in which the renewal levy is first imposed, 1316
regardless of the years for which those levies originally were 1317
authorized to be levied.1318

       The resolution shall go into immediate effect upon its 1319
passage, and no publication of the resolution shall be necessary 1320
other than that provided for in the notice of election. A copy of1321
the resolution shall immediately after its passing be certified to 1322
the board of elections of the proper county in the manner provided 1323
by section 5705.25 of the Revised Code, and that section shall 1324
govern the arrangements for the submission of such question and 1325
other matters concerning such election, to which that section 1326
refers, except that such election shall be held on the date 1327
specified in the resolution. Publication of notice of such 1328
election shall be made in one or more newspapers of general1329
circulation in the county once a week for four consecutive weeks.1330
If a majority of the electors voting on the question so submitted1331
in an election vote in favor of the levy, the board of education1332
may make the necessary levy within the school district at the 1333
additional rate, or at any lesser rate in excess of the ten-mill 1334
limitation on the tax list, for the purpose stated in the 1335
resolution. A levy for a continuing period of time may be reduced 1336
pursuant to section 5705.261 of the Revised Code. The tax levy 1337
shall be included in the next tax budget that is certified to the 1338
county budget commission.1339

       (C)(1) After the approval of a levy on the current tax list 1340
and duplicate for current expenses, for recreational purposes, for 1341
community centers provided for in section 755.16 of the Revised 1342
Code, or for a public library of the district and prior to the 1343
time when the first tax collection from the levy can be made, the 1344
board of education may anticipate a fraction of the proceeds of 1345
the levy and issue anticipation notes in a principal amount not 1346
exceeding fifty per cent of the total estimated proceeds of the 1347
levy to be collected during the first year of the levy.1348

       (2) After the approval of a levy for general permanent 1349
improvements for a specified number of years, or for permanent1350
improvements having the purpose specified in division (F) of1351
section 5705.19 of the Revised Code, the board of education may1352
anticipate a fraction of the proceeds of the levy and issue1353
anticipation notes in a principal amount not exceeding fifty per1354
cent of the total estimated proceeds of the levy remaining to be1355
collected in each year over a period of five years after the1356
issuance of the notes.1357

       The notes shall be issued as provided in section 133.24 of1358
the Revised Code, shall have principal payments during each year1359
after the year of their issuance over a period not to exceed five1360
years, and may have a principal payment in the year of their1361
issuance.1362

       (3) After approval of a levy for general, on-going permanent 1363
improvements for a continuing period of time, the board of 1364
education may anticipate a fraction of the proceeds of the levy 1365
and issue anticipation notes in a principal amount not exceeding 1366
fifty per cent of the total estimated proceeds of the levy to be 1367
collected in each year over a specified period of years, not 1368
exceeding ten, after the issuance of the notes.1369

       The notes shall be issued as provided in section 133.24 of1370
the Revised Code, shall have principal payments during each year1371
after the year of their issuance over a period not to exceed ten1372
years, and may have a principal payment in the year of their1373
issuance.1374

       Sec. 5733.04.  As used in this chapter:1375

       (A) "Issued and outstanding shares of stock" applies to1376
nonprofit corporations, as provided in section 5733.01 of the1377
Revised Code, and includes, but is not limited to, membership1378
certificates and other instruments evidencing ownership of an1379
interest in such nonprofit corporations, and with respect to a1380
financial institution that does not have capital stock, "issued1381
and outstanding shares of stock" includes, but is not limited to,1382
ownership interests of depositors in the capital employed in such1383
an institution.1384

       (B) "Taxpayer" means a corporation subject to the tax imposed 1385
by section 5733.06 of the Revised Code.1386

       (C) "Resident" means a corporation organized under the laws1387
of this state.1388

       (D) "Commercial domicile" means the principal place from1389
which the trade or business of the taxpayer is directed or1390
managed.1391

       (E) "Taxable year" means the period prescribed by division1392
(A) of section 5733.031 of the Revised Code upon the net income of1393
which the value of the taxpayer's issued and outstanding shares of1394
stock is determined under division (B) of section 5733.05 of the1395
Revised Code or the period prescribed by division (A) of section1396
5733.031 of the Revised Code that immediately precedes the date as1397
of which the total value of the corporation is determined under1398
division (A) or (C) of section 5733.05 of the Revised Code.1399

       (F) "Tax year" means the calendar year in and for which the1400
tax imposed by section 5733.06 of the Revised Code is required to1401
be paid.1402

       (G) "Internal Revenue Code" means the "Internal Revenue Code1403
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.1404

       (H) "Federal income tax" means the income tax imposed by the1405
Internal Revenue Code.1406

       (I) Except as provided in section 5733.058 of the Revised1407
Code, "net income" means the taxpayer's taxable income before1408
operating loss deduction and special deductions, as required to be1409
reported for the taxpayer's taxable year under the Internal1410
Revenue Code, subject to the following adjustments:1411

       (1)(a) Deduct any net operating loss incurred in any taxable1412
years ending in 1971 or thereafter, but exclusive of any net1413
operating loss incurred in taxable years ending prior to January1414
1, 1971. This deduction shall not be allowed in any tax year1415
commencing before December 31, 1973, but shall be carried over and1416
allowed in tax years commencing after December 31, 1973, until1417
fully utilized in the next succeeding taxable year or years in1418
which the taxpayer has net income, but in no case for more than1419
the designated carryover period as described in division (I)(1)(b)1420
of this section. The amount of such net operating loss, as1421
determined under the allocation and apportionment provisions of1422
section 5733.051 and division (B) of section 5733.05 of the1423
Revised Code for the year in which the net operating loss occurs,1424
shall be deducted from net income, as determined under the1425
allocation and apportionment provisions of section 5733.051 and1426
division (B) of section 5733.05 of the Revised Code, to the extent1427
necessary to reduce net income to zero with the remaining unused1428
portion of the deduction, if any, carried forward to the remaining1429
years of the designated carryover period as described in division1430
(I)(1)(b) of this section, or until fully utilized, whichever1431
occurs first.1432

       (b) For losses incurred in taxable years ending on or before1433
December 31, 1981, the designated carryover period shall be the1434
five consecutive taxable years after the taxable year in which the1435
net operating loss occurred. For losses incurred in taxable years1436
ending on or after January 1, 1982, and beginning before August 6,1437
1997, the designated carryover period shall be the fifteen1438
consecutive taxable years after the taxable year in which the net1439
operating loss occurs. For losses incurred in taxable years1440
beginning on or after August 6, 1997, the designated carryover1441
period shall be the twenty consecutive taxable years after the1442
taxable year in which the net operating loss occurs.1443

       (c) The tax commissioner may require a taxpayer to furnish1444
any information necessary to support a claim for deduction under1445
division (I)(1)(a) of this section and no deduction shall be1446
allowed unless the information is furnished.1447

       (2) Deduct any amount included in net income by application1448
of section 78 or 951 of the Internal Revenue Code, amounts1449
received for royalties, technical or other services derived from1450
sources outside the United States, and dividends received from a1451
subsidiary, associate, or affiliated corporation that neither1452
transacts any substantial portion of its business nor regularly1453
maintains any substantial portion of its assets within the United1454
States. For purposes of determining net foreign source income1455
deductible under division (I)(2) of this section, the amount of1456
gross income from all such sources other than dividend income and1457
income derived by application of section 78 or 951 of the Internal1458
Revenue Code shall be reduced by:1459

       (a) The amount of any reimbursed expenses for personal1460
services performed by employees of the taxpayer for the1461
subsidiary, associate, or affiliated corporation;1462

       (b) Ten per cent of the amount of royalty income and1463
technical assistance fees;1464

       (c) Fifteen per cent of the amount of all other income.1465

       The amounts described in divisions (I)(2)(a) to (c) of this1466
section are deemed to be the expenses attributable to the1467
production of deductible foreign source income unless the taxpayer1468
shows, by clear and convincing evidence, less actual expenses, or1469
the tax commissioner shows, by clear and convincing evidence, more1470
actual expenses.1471

       (3) Add any loss or deduct any gain resulting from the sale,1472
exchange, or other disposition of a capital asset, or an asset1473
described in section 1231 of the Internal Revenue Code, to the1474
extent that such loss or gain occurred prior to the first taxable1475
year on which the tax provided for in section 5733.06 of the1476
Revised Code is computed on the corporation's net income. For1477
purposes of division (I)(3) of this section, the amount of the1478
prior loss or gain shall be measured by the difference between the1479
original cost or other basis of the asset and the fair market1480
value as of the beginning of the first taxable year on which the1481
tax provided for in section 5733.06 of the Revised Code is1482
computed on the corporation's net income. At the option of the1483
taxpayer, the amount of the prior loss or gain may be a percentage1484
of the gain or loss, which percentage shall be determined by1485
multiplying the gain or loss by a fraction, the numerator of which1486
is the number of months from the acquisition of the asset to the1487
beginning of the first taxable year on which the fee provided in1488
section 5733.06 of the Revised Code is computed on the1489
corporation's net income, and the denominator of which is the1490
number of months from the acquisition of the asset to the sale,1491
exchange, or other disposition of the asset. The adjustments1492
described in this division do not apply to any gain or loss where1493
the gain or loss is recognized by a qualifying taxpayer, as1494
defined in section 5733.0510 of the Revised Code, with respect to1495
a qualifying taxable event, as defined in that section.1496

       (4) Deduct the dividend received deduction provided by1497
section 243 of the Internal Revenue Code.1498

       (5) Deduct any interest or interest equivalent on public1499
obligations and purchase obligations to the extent included in1500
federal taxable income. As used in divisions (I)(5) and (6) of1501
this section, "public obligations," "purchase obligations," and1502
"interest or interest equivalent" have the same meanings as in1503
section 5709.76 of the Revised Code.1504

       (6) Add any loss or deduct any gain resulting from the sale,1505
exchange, or other disposition of public obligations to the extent1506
included in federal taxable income.1507

       (7) To the extent not otherwise allowed, deduct any dividends 1508
or distributions received by a taxpayer from a public utility, 1509
excluding an electric company and a combined company, and, for tax 1510
years 2005 and thereafter, a telephone company, if the taxpayer 1511
owns at least eighty per cent of the issued and outstanding common 1512
stock of the public utility. As used in division (I)(7) of this1513
section, "public utility" means a public utility as defined in1514
Chapter 5727. of the Revised Code, whether or not the public1515
utility is doing business in the state.1516

       (8) To the extent not otherwise allowed, deduct any dividends 1517
received by a taxpayer from an insurance company, if the taxpayer 1518
owns at least eighty per cent of the issued and outstanding common 1519
stock of the insurance company. As used in division (I)(8) of this 1520
section, "insurance company" means an insurance company that is 1521
taxable under Chapter 5725. or 5729. of the Revised Code.1522

       (9) Deduct expenditures for modifying existing buildings or1523
structures to meet American national standards institute standard1524
A-117.1-1961 (R-1971), as amended; provided, that no deduction1525
shall be allowed to the extent that such deduction is not1526
permitted under federal law or under rules of the tax1527
commissioner. Those deductions as are allowed may be taken over a1528
period of five years. The tax commissioner shall adopt rules under 1529
Chapter 119. of the Revised Code establishing reasonable1530
limitations on the extent that expenditures for modifying existing1531
buildings or structures are attributable to the purpose of making1532
the buildings or structures accessible to and usable by physically1533
handicapped persons.1534

       (10) Deduct the amount of wages and salaries, if any, not1535
otherwise allowable as a deduction but that would have been1536
allowable as a deduction in computing federal taxable income1537
before operating loss deduction and special deductions for the1538
taxable year, had the targeted jobs credit allowed and determined1539
under sections 38, 51, and 52 of the Internal Revenue Code not1540
been in effect.1541

       (11) Deduct net interest income on obligations of the United1542
States and its territories and possessions or of any authority,1543
commission, or instrumentality of the United States to the extent1544
the laws of the United States prohibit inclusion of the net1545
interest for purposes of determining the value of the taxpayer's1546
issued and outstanding shares of stock under division (B) of1547
section 5733.05 of the Revised Code. As used in division (I)(11)1548
of this section, "net interest" means interest net of any expenses1549
taken on the federal income tax return that would not have been1550
allowed under section 265 of the Internal Revenue Code if the1551
interest were exempt from federal income tax.1552

       (12)(a) Except as set forth in division (I)(12)(d) of this1553
section, to the extent not included in computing the taxpayer's1554
federal taxable income before operating loss deduction and special1555
deductions, add gains and deduct losses from direct or indirect1556
sales, exchanges, or other dispositions, made by a related entity1557
who is not a taxpayer, of the taxpayer's indirect, beneficial, or1558
constructive investment in the stock or debt of another entity,1559
unless the gain or loss has been included in computing the federal1560
taxable income before operating loss deduction and special1561
deductions of another taxpayer with a more closely related1562
investment in the stock or debt of the other entity. The amount of 1563
gain added or loss deducted shall not exceed the product obtained 1564
by multiplying such gain or loss by the taxpayer's proportionate 1565
share, directly, indirectly, beneficially, or constructively, of 1566
the outstanding stock of the related entity immediately prior to 1567
the direct or indirect sale, exchange, or other disposition.1568

       (b) Except as set forth in division (I)(12)(e) of this1569
section, to the extent not included in computing the taxpayer's1570
federal taxable income before operating loss deduction and special1571
deductions, add gains and deduct losses from direct or indirect1572
sales, exchanges, or other dispositions made by a related entity1573
who is not a taxpayer, of intangible property other than stock,1574
securities, and debt, if such property was owned, or used in whole1575
or in part, at any time prior to or at the time of the sale,1576
exchange, or disposition by either the taxpayer or by a related1577
entity that was a taxpayer at any time during the related entity's1578
ownership or use of such property, unless the gain or loss has1579
been included in computing the federal taxable income before1580
operating loss deduction and special deductions of another1581
taxpayer with a more closely related ownership or use of such1582
intangible property. The amount of gain added or loss deducted1583
shall not exceed the product obtained by multiplying such gain or1584
loss by the taxpayer's proportionate share, directly, indirectly,1585
beneficially, or constructively, of the outstanding stock of the1586
related entity immediately prior to the direct or indirect sale,1587
exchange, or other disposition.1588

       (c) As used in division (I)(12) of this section, "related1589
entity" means those entities described in divisions (I)(12)(c)(i)1590
to (iii) of this section:1591

       (i) An individual stockholder, or a member of the1592
stockholder's family enumerated in section 318 of the Internal1593
Revenue Code, if the stockholder and the members of the1594
stockholder's family own, directly, indirectly, beneficially, or1595
constructively, in the aggregate, at least fifty per cent of the1596
value of the taxpayer's outstanding stock;1597

       (ii) A stockholder, or a stockholder's partnership, estate,1598
trust, or corporation, if the stockholder and the stockholder's1599
partnerships, estates, trusts, and corporations own directly,1600
indirectly, beneficially, or constructively, in the aggregate, at1601
least fifty per cent of the value of the taxpayer's outstanding1602
stock;1603

       (iii) A corporation, or a party related to the corporation in 1604
a manner that would require an attribution of stock from the1605
corporation to the party or from the party to the corporation1606
under division (I)(12)(c)(iv) of this section, if the taxpayer1607
owns, directly, indirectly, beneficially, or constructively, at1608
least fifty per cent of the value of the corporation's outstanding1609
stock.1610

       (iv) The attribution rules of section 318 of the Internal1611
Revenue Code apply for purposes of determining whether the1612
ownership requirements in divisions (I)(12)(c)(i) to (iii) of this1613
section have been met.1614

       (d) For purposes of the adjustments required by division1615
(I)(12)(a) of this section, the term "investment in the stock or1616
debt of another entity" means only those investments where the1617
taxpayer and the taxpayer's related entities directly, indirectly,1618
beneficially, or constructively own, in the aggregate, at any time1619
during the twenty-four month period commencing one year prior to1620
the direct or indirect sale, exchange, or other disposition of1621
such investment at least fifty per cent or more of the value of1622
either the outstanding stock or such debt of such other entity.1623

       (e) For purposes of the adjustments required by division1624
(I)(12)(b) of this section, the term "related entity" excludes all1625
of the following:1626

       (i) Foreign corporations as defined in section 7701 of the1627
Internal Revenue Code;1628

       (ii) Foreign partnerships as defined in section 7701 of the1629
Internal Revenue Code;1630

       (iii) Corporations, partnerships, estates, and trusts created 1631
or organized in or under the laws of the Commonwealth of Puerto 1632
Rico or any possession of the United States;1633

       (iv) Foreign estates and foreign trusts as defined in section 1634
7701 of the Internal Revenue Code.1635

       The exclusions described in divisions (I)(12)(e)(i) to (iv)1636
of this section do not apply if the corporation, partnership,1637
estate, or trust is described in any one of divisions (C)(1) to1638
(5) of section 5733.042 of the Revised Code.1639

       (f) Nothing in division (I)(12) of this section shall require 1640
or permit a taxpayer to add any gains or deduct any losses1641
described in divisions (I)(12)(f)(i) and (ii) of this section:1642

       (i) Gains or losses recognized for federal income tax1643
purposes by an individual, estate, or trust without regard to the1644
attribution rules described in division (I)(12)(c) of this1645
section;1646

       (ii) A related entity's gains or losses described in division 1647
(I)(12)(b) of this section if the taxpayer's ownership of or use 1648
of such intangible property was limited to a period not exceeding 1649
nine months and was attributable to a transaction or a series of1650
transactions executed in accordance with the election or elections1651
made by the taxpayer or a related entity pursuant to section 3381652
of the Internal Revenue Code.1653

       (13) Any adjustment required by section 5733.042 of the1654
Revised Code.1655

       (14) Add any amount claimed as a credit under section1656
5733.0611 of the Revised Code to the extent that such amount1657
satisfies either of the following:1658

       (a) It was deducted or excluded from the computation of the1659
corporation's taxable income before operating loss deduction and1660
special deductions as required to be reported for the1661
corporation's taxable year under the Internal Revenue Code;1662

       (b) It resulted in a reduction of the corporation's taxable1663
income before operating loss deduction and special deductions as1664
required to be reported for any of the corporation's taxable years1665
under the Internal Revenue Code.1666

       (15) Deduct the amount contributed by the taxpayer to an1667
individual development account program established by a county1668
department of job and family services pursuant to sections 329.111669
to 329.14 of the Revised Code for the purpose of matching funds1670
deposited by program participants. On request of the tax1671
commissioner, the taxpayer shall provide any information that, in1672
the tax commissioner's opinion, is necessary to establish the1673
amount deducted under division (I)(15) of this section.1674

       (16) Any adjustment required by section 5733.0510 or 1675
5733.0511 of the Revised Code.1676

       (17)(a)(i) Add five-sixths of the amount of depreciation1677
expense allowed under subsection (k) of section 168 of the1678
Internal Revenue Code, including a person's proportionate or1679
distributive share of the amount of depreciation expense allowed1680
by that subsection to any pass-through entity in which the person1681
has direct or indirect ownership.1682

       (ii) Add five-sixths of the amount of qualifying section 179 1683
depreciation expense, including a person's proportionate or 1684
distributive share of the amount of qualifying section 179 1685
depreciation expense allowed to any pass-through entity in which 1686
the person has a direct or indirect ownership. For the purposes of 1687
this division, "qualifying section 179 depreciation expense" means 1688
the difference between (I) the amount of depreciation expense 1689
directly or indirectly allowed to the taxpayer under section 179 1690
of the Internal Revenue Code, and (II) the amount of depreciation 1691
expense directly or indirectly allowed to the taxpayer under 1692
section 179 of the Internal Revenue Code as that section existed 1693
on December 31, 2002.1694

       The tax commissioner, under procedures established by the 1695
commissioner, may waive the add-backs related to a pass-through 1696
entity if the person owns, directly or indirectly, less than five 1697
per cent of the pass-through entity.1698

       (b) Nothing in division (I)(17) of this section shall be1699
construed to adjust or modify the adjusted basis of any asset.1700

       (c) To the extent the add-back is attributable to property1701
generating income or loss allocable under section 5733.051 of the1702
Revised Code, the add-back shall be allocated to the same location1703
as the income or loss generated by that property. Otherwise, the1704
add-back shall be apportioned, subject to division (B)(2)(d) of1705
section 5733.05 of the Revised Code.1706

       (18)(a) If a person is required to make the add-back under1707
division (I)(17)(a) of this section for a tax year, the person1708
shall deduct one-fifth of the amount added back for each of the1709
succeeding five tax years.1710

       (b) If the amount deducted under division (I)(18)(a) of this1711
section is attributable to an add-back allocated under division1712
(I)(17)(c) of this section, the amount deducted shall be allocated1713
to the same location. Otherwise, the amount shall be apportioned1714
using the apportionment factors for the taxable year in which the1715
deduction is taken, subject to division (B)(2)(d) of section1716
5733.05 of the Revised Code.1717

       (J) AnyExcept as otherwise expressly provided or clearly 1718
appearing from the context, any term used in this chapter has the 1719
same meaning as when used in a comparable context in the laws of 1720
the United States relating to federal income taxes unless a 1721
different meaning is clearly required. Any reference in this 1722
chapter to the Internal Revenue Code includes other laws of the 1723
United States relating to federal income taxes.1724

       (K) "Financial institution" has the meaning given by section1725
5725.01 of the Revised Code but does not include a production1726
credit association as described in 85 Stat. 597, 12 U.S.C.A. 2091.1727

       (L)(1) A "qualifying holding company" is any corporation1728
satisfying all of the following requirements:1729

       (a) Subject to divisions (L)(2) and (3) of this section, the1730
net book value of the corporation's intangible assets is greater1731
than or equal to ninety per cent of the net book value of all of1732
its assets and at least fifty per cent of the net book value of1733
all of its assets represents direct or indirect investments in the1734
equity of, loans and advances to, and accounts receivable due from1735
related members;1736

       (b) At least ninety per cent of the corporation's gross1737
income for the taxable year is attributable to the following:1738

       (i) The maintenance, management, ownership, acquisition, use, 1739
and disposition of its intangible property, its aircraft the use 1740
of which is not subject to regulation under 14 C.F.R. part 121 or 1741
part 135, and any real property described in division (L)(2)(c) of 1742
this section;1743

       (ii) The collection and distribution of income from such1744
property.1745

       (c) The corporation is not a financial institution on the1746
last day of the taxable year ending prior to the first day of the1747
tax year;1748

       (d) The corporation's related members make a good faith and1749
reasonable effort to make timely and fully the adjustments1750
required by division (C)(2) of section 5733.05 of the Revised Code1751
and to pay timely and fully all uncontested taxes, interest,1752
penalties, and other fees and charges imposed under this chapter;1753

       (e) Subject to division (L)(4) of this section, the1754
corporation elects to be treated as a qualifying holding company1755
for the tax year.1756

       A corporation otherwise satisfying divisions (L)(1)(a) to (e)1757
of this section that does not elect to be a qualifying holding1758
company is not a qualifying holding company for the purposes of1759
this chapter.1760

       (2)(a)(i) For purposes of making the ninety per cent1761
computation under division (L)(1)(a) of this section, the net book1762
value of the corporation's assets shall not include the net book1763
value of aircraft or real property described in division1764
(L)(1)(b)(i) of this section.1765

       (ii) For purposes of making the fifty per cent computation1766
under division (L)(1)(a) of this section, the net book value of1767
assets shall include the net book value of aircraft or real1768
property described in division (L)(1)(b)(i) of this section.1769

       (b)(i) As used in division (L) of this section, "intangible1770
asset" includes, but is not limited to, the corporation's direct1771
interest in each pass-through entity only if at all times during1772
the corporation's taxable year ending prior to the first day of1773
the tax year the corporation's and the corporation's related1774
members' combined direct and indirect interests in the capital or1775
profits of such pass-through entity do not exceed fifty per cent.1776
If the corporation's interest in the pass-through entity is an1777
intangible asset for that taxable year, then the distributive1778
share of any income from the pass-through entity shall be income1779
from an intangible asset for that taxable year.1780

       (ii) If a corporation's and the corporation's related1781
members' combined direct and indirect interests in the capital or1782
profits of a pass-through entity exceed fifty per cent at any time1783
during the corporation's taxable year ending prior to the first1784
day of the tax year, "intangible asset" does not include the1785
corporation's direct interest in the pass-through entity, and the1786
corporation shall include in its assets its proportionate share of1787
the assets of any such pass-through entity and shall include in1788
its gross income its distributive share of the gross income of1789
such pass-through entity in the same form as was earned by the1790
pass-through entity.1791

       (iii) A pass-through entity's direct or indirect1792
proportionate share of any other pass-through entity's assets1793
shall be included for the purpose of computing the corporation's1794
proportionate share of the pass-through entity's assets under1795
division (L)(2)(b)(ii) of this section, and such pass-through1796
entity's distributive share of any other pass-through entity's1797
gross income shall be included for purposes of computing the1798
corporation's distributive share of the pass-through entity's1799
gross income under division (L)(2)(b)(ii) of this section.1800

       (c) For the purposes of divisions (L)(1)(b)(i), (1)(b)(ii),1801
(2)(a)(i), and (2)(a)(ii) of this section, real property is1802
described in division (L)(2)(c) of this section only if all of the1803
following conditions are present at all times during the taxable1804
year ending prior to the first day of the tax year:1805

       (i) The real property serves as the headquarters of the1806
corporation's trade or business, or is the place from which the1807
corporation's trade or business is principally managed or1808
directed;1809

       (ii) Not more than ten per cent of the value of the real1810
property and not more than ten per cent of the square footage of1811
the building or buildings that are part of the real property is1812
used, made available, or occupied for the purpose of providing,1813
acquiring, transferring, selling, or disposing of tangible1814
property or services in the normal course of business to persons1815
other than related members, the corporation's employees and their1816
families, and such related members' employees and their families.1817

       (d) As used in division (L) of this section, "related member" 1818
has the same meaning as in division (A)(6) of section 5733.042 of 1819
the Revised Code without regard to division (B) of that section.1820

       (3) The percentages described in division (L)(1)(a) of this1821
section shall be equal to the quarterly average of those1822
percentages as calculated during the corporation's taxable year1823
ending prior to the first day of the tax year.1824

       (4) With respect to the election described in division1825
(L)(1)(e) of this section:1826

       (a) The election need not accompany a timely filed report;1827

       (b) The election need not accompany the report; rather, the1828
election may accompany a subsequently filed but timely application1829
for refund and timely amended report, or a subsequently filed but1830
timely petition for reassessment;1831

       (c) The election is not irrevocable;1832

       (d) The election applies only to the tax year specified by1833
the corporation;1834

       (e) The corporation's related members comply with division1835
(L)(1)(d) of this section.1836

       Nothing in division (L)(4) of this section shall be construed1837
to extend any statute of limitations set forth in this chapter.1838

       (M) "Qualifying controlled group" means two or more1839
corporations that satisfy the ownership and control requirements1840
of division (A) of section 5733.052 of the Revised Code.1841

       (N) "Limited liability company" means any limited liability1842
company formed under Chapter 1705. of the Revised Code or under1843
the laws of any other state.1844

       (O) "Pass-through entity" means a corporation that has made1845
an election under subchapter S of Chapter 1 of Subtitle A of the1846
Internal Revenue Code for its taxable year under that code, or a1847
partnership, limited liability company, or any other person, other1848
than an individual, trust, or estate, if the partnership, limited1849
liability company, or other person is not classified for federal1850
income tax purposes as an association taxed as a corporation.1851

       (P) "Electric company," "combined company," and "telephone 1852
company" have the same meanings as in section 5727.01 of the 1853
Revised Code.1854

       (Q) "Business income" means income arising from transactions, 1855
activities, and sources in the regular course of a trade or 1856
business and includes income from real property, tangible personal 1857
property, and intangible personal property if the acquisition, 1858
rental, management, and disposition of the property constitute 1859
integral parts of the regular course of a trade or business 1860
operation. "Business income" includes income, including gain or 1861
loss, from a partial or complete liquidation of a business, 1862
including, but not limited to, gain or loss from the sale or other 1863
disposition of goodwill.1864

       (R) "Nonbusiness income" means all income other than business 1865
income.1866

       Sec. 5733.42.  (A) As used in this section:1867

       (1) "Eligible training program" means a program to provide1868
job skills to eligible employees who are unable effectively to1869
function on the job due to skill deficiencies or who would1870
otherwise be displaced because of their skill deficiencies or1871
inability to use new technology, or to provide job skills to1872
eligible employees that enable them to perform other job duties1873
for the taxpayer. Eligible training programs do not include1874
executive, management, or personal enrichment training programs,1875
or training programs intended exclusively for personal career1876
development.1877

       (2) "Eligible employee" means an individual who is employed1878
in this state by a taxpayer and has been so employed by the same1879
taxpayer for at least one hundred eighty consecutive days before1880
the day an application for the credit is filed under this section.1881
"Eligible employee" does not include any employee for which a1882
credit is claimed pursuant to division (A)(5) of section 5709.651883
of the Revised Code for all or any part of the same year, an1884
employee who is not a full-time employee, or executive or1885
managerial personnel except for the immediate supervisors of1886
nonexecutive, nonmanagerial personnel.1887

       (3) "Eligible training costs" means:1888

       (a) Direct instructional costs, such as instructor salaries,1889
materials and supplies, textbooks and manuals, videotapes, and1890
other instructional media and training equipment used exclusively1891
for the purpose of training eligible employees;1892

       (b) Wages paid to eligible employees for time devoted1893
exclusively to an eligible training program during normal paid1894
working hours.1895

       (4) "Full-time employee" means an individual who is employed1896
for consideration for at least thirty-five hours per week, or who1897
renders any other standard of service generally accepted by custom1898
or specified by contract as full-time employment.1899

       (5) "Partnership" includes a limited liability company formed1900
under Chapter 1705. of the Revised Code or under the laws of1901
another state, provided that the company is not classified for1902
federal income tax purposes as an association taxable as a1903
corporation.1904

       (B) There is hereby allowed a nonrefundable credit against1905
the tax imposed by section 5733.06 of the Revised Code for1906
taxpayers for which a tax credit certificate is issued under1907
division (C) of this section. The credit may be claimed for tax 1908
years 2004, 2005, and 2006. The amount of the credit for tax year1909
2004 shall equal one-half of the average of the eligible training 1910
costs paid or incurred by the taxpayer during calendar years 1999, 1911
2000, and 2001, not to exceed one thousand dollars for each1912
eligible employee on account of whom eligible training costs were1913
paid or incurred by the taxpayer during those calendar years. The 1914
amount of the credit for tax year 2005 shall equal one-half of the 1915
average of the eligible training costs paid or incurred by the 1916
taxpayer during calendar years 2002, 2003, and 2004, not to exceed 1917
one thousand dollars for each eligible employee on account of whom1918
eligible training costs were paid or incurred by the taxpayer1919
during those calendar years. The amount of the credit for tax year 1920
2006 shall equal one-half of the average of the eligible training 1921
costs paid or incurred by the taxpayer during calendar years 2003, 1922
2004, and 2005, not to exceed one thousand dollars for each 1923
eligible employee on account of whom eligible training costs were 1924
paid or incurred by the taxpayer during those calendar years. The 1925
credit claimed by a taxpayer each tax year shall not exceed one 1926
hundred thousand dollars.1927

       (C) A taxpayer who proposes to conduct an eligible training1928
program may apply to the director of job and family services for a1929
tax credit certificate under this section. The taxpayer may apply1930
for such a certificate for tax years 2004, 2005, and 2006, subject 1931
to division (L) of this section. The director shall prescribe the 1932
form of the application, which shall require a detailed 1933
description of the proposed training program. The director may 1934
require applicants to remit an application fee with each 1935
application filed with the director. The fee shall not exceed the 1936
reasonable and necessary expenses incurred by the director in1937
receiving, reviewing, and approving such applications and issuing 1938
tax credit certificates. Proceeds from fees shall be used solely 1939
for the purpose of receiving, reviewing, and approving such 1940
applications and issuing such certificates.1941

       After receipt of an application, the director shall authorize1942
a credit under this section by issuing a tax credit certificate,1943
in the form prescribed by the director, if the director determines1944
all of the following:1945

       (1) The proposed training program is an eligible training1946
program under this section;1947

       (2) The proposed training program is economically sound and1948
will benefit the people of this state by improving workforce1949
skills and strengthening the economy of this state;1950

       (3) Receiving the tax credit is a major factor in the1951
taxpayer's decision to go forward with the training program;1952

       (4) Authorization of the credit is consistent with division1953
(H) of this section.1954

       The credit also is allowed for a taxpayer that is a partner1955
in a partnership that pays or incurs eligible training costs. Such1956
a taxpayer shall determine the taxpayer's credit amount in the1957
manner prescribed by division (K) of this section.1958

       (D) If the director of job and family services denies an1959
application for a tax credit certificate, the director shall send1960
notice of the denial and the reason for denial to the applicant by1961
certified mail, return receipt requested. If the director1962
determines that an authorized training program, as actually1963
conducted, fails to meet the requirements of this section or to1964
comply with any condition set forth in the authorization, the1965
director may reduce the amount of the tax credit previously1966
granted. If the director reduces a tax credit, the director shall1967
send notice of the reduction and the reason for the reduction to1968
the taxpayer by certified mail, return receipt requested, and1969
shall certify the reduction to the tax commissioner or, in the1970
case of the reduction of a credit claimed by an insurance company,1971
the superintendent of insurance. The tax commissioner or1972
superintendent of insurance shall reduce the credit that may be1973
claimed by the taxpayer accordingly. Within sixty days after1974
receiving a notice of denial or notice of reduction of the tax1975
credit, an applicant or taxpayer may request, in writing, a1976
hearing before the director to review the denial or reduction.1977
Within sixty days after receiving a request that is filed within1978
the prescribed time, the director shall hold such a hearing at a1979
location to be determined by the director. Within thirty days1980
after the hearing is adjourned, the director shall issue a1981
redetermination affirming, reversing, or modifying the denial or1982
reduction of the tax credit and send notice of the redetermination1983
to the applicant or taxpayer by certified mail, return receipt1984
requested, and shall issue a notice of the redetermination to the1985
tax commissioner or superintendent of insurance. If an applicant1986
or taxpayer is aggrieved by the director's redetermination, the1987
applicant or taxpayer may appeal the redetermination to the board1988
of tax appeals in the manner prescribed by section 5717.02 of the1989
Revised Code.1990

       (E) A taxpayer to which a tax credit certificate is issued1991
shall retain records indicating the eligible training costs it1992
pays or incurs for the eligible training program for which the1993
certificate is issued for four years following the end of the tax1994
year for which the credit is claimed. Such records shall be open1995
to inspection by the director of job and family services upon the1996
director's request during business hours.1997

       Financial statements and other information submitted by an1998
applicant to the director of job and family services for a tax1999
credit under this section, and any information taken for any2000
purpose from such statements or information, are not public2001
records subject to section 149.43 of the Revised Code. However,2002
the director of job and family services, the tax commissioner, or2003
superintendent of insurance may make use of the statements and2004
other information for purposes of issuing public reports or in2005
connection with court proceedings concerning tax credits allowed2006
under this section and sections 5725.31, 5729.07, and 5747.39 of2007
the Revised Code.2008

       (F) The director of job and family services, in accordance2009
with Chapter 119. of the Revised Code, shall adopt rules necessary2010
to implement this section and sections 5725.31, 5729.07, and2011
5747.39 of the Revised Code. The rules shall be adopted after2012
consultation with the tax commissioner and the superintendent of2013
insurance. At the time the director gives public notice under2014
division (A) of section 119.03 of the Revised Code of the adoption2015
of the rules, the director shall submit copies of the proposed2016
rules to the chairpersons and ranking minority members of the2017
standing committees in the senate and the house of representatives2018
to which legislation on economic development matters are2019
customarily referred.2020

       (G) On or before the thirtieth day of September of 2001,2021
2003, 2004, 2005, and 2006, the director of job and family2022
services shall submit a report to the governor, the president of2023
the senate, and the speaker of the house of representatives on the2024
tax credit program under this section and sections 5725.31,2025
5729.07, and 5747.39 of the Revised Code. The report shall include2026
information on the number of training programs that were2027
authorized under those sections during the preceding calendar2028
year, a description of each authorized training program, the2029
dollar amounts of the credits granted, and an estimate of the2030
impact of the credits on the economy of this state.2031

       (H) The aggregate amount of credits authorized under this2032
section and sections 5725.31, 5729.07, and 5747.39 of the Revised2033
Code shall not exceed twenty million dollars per calendar year. No2034
more than ten million dollars in credits per calendar year shall2035
be authorized for persons engaged primarily in manufacturing. No2036
less than five million dollars in credits per calendar year shall2037
be set aside for persons engaged primarily in activities other2038
than manufacturing and having fewer than five hundred employees.2039
Subject to such limits, the director of job and family services 2040
shall adopt a rule under division (F) of this section that 2041
establishes criteria and procedures for distribution of the2042
credits shall be authorized for applicants meeting the 2043
requirements of this section in the order in which they submit 2044
complete and accurate applications.2045

       (I) A nonrefundable credit allowed under this section shall2046
be claimed in the order required under section 5733.98 of the2047
Revised Code.2048

       (J) The taxpayer may carry forward any credit amount in2049
excess of its tax due after allowing for any other credits that2050
precede the credit under this section in the order required under2051
section 5733.98 of the Revised Code. The excess credit may be2052
carried forward for three years following the tax year for which2053
it is first claimed under this section.2054

       (K) A taxpayer that is a partner in a partnership on the last 2055
day of the third calendar year of the three-year period during 2056
which the partnership pays or incurs eligible training costs may 2057
claim a credit under this section for the tax year immediately 2058
following that calendar year. The amount of a partner's credit2059
equals the partner's interest in the partnership on the last day 2060
of such calendar year multiplied by the credit available to the 2061
partnership as computed by the partnership.2062

       (L) The director of job and family services shall not2063
authorize any credits under this section and sections 5725.31,2064
5729.07, and 5747.39 of the Revised Code for eligible training2065
costs paid or incurred after December 31, 2005.2066

       Sec. 5747.01.  Except as otherwise expressly provided or2067
clearly appearing from the context, any term used in this chapter2068
has the same meaning as when used in a comparable context in the2069
Internal Revenue Code, and all other statuteslaws of the United2070
States relating to federal income taxes. Any reference in this 2071
chapter to the Internal Revenue Code includes other laws of the 2072
United States relating to federal income taxes.2073

       As used in this chapter:2074

       (A) "Adjusted gross income" or "Ohio adjusted gross income"2075
means federal adjusted gross income, as defined and used in the2076
Internal Revenue Code, adjusted as provided in this section:2077

       (1) Add interest or dividends on obligations or securities of 2078
any state or of any political subdivision or authority of any2079
state, other than this state and its subdivisions and authorities.2080

       (2) Add interest or dividends on obligations of any2081
authority, commission, instrumentality, territory, or possession2082
of the United States to the extent that the interest or dividends2083
are exempt from federal income taxes but not from state income2084
taxes.2085

       (3) Deduct interest or dividends on obligations of the United 2086
States and its territories and possessions or of any authority, 2087
commission, or instrumentality of the United States to the extent2088
that the interest or dividends are included in federal adjusted 2089
gross income but exempt from state income taxes under the laws of 2090
the United States.2091

       (4) Deduct disability and survivor's benefits to the extent2092
included in federal adjusted gross income.2093

       (5) Deduct benefits under Title II of the Social Security Act 2094
and tier 1 railroad retirement benefits to the extent included in 2095
federal adjusted gross income under section 86 of the Internal2096
Revenue Code.2097

       (6) In the case of a taxpayer who is a beneficiary of a trust 2098
that makes an accumulation distribution as defined in section 665 2099
of the Internal Revenue Code, add, for the beneficiary's taxable 2100
years beginning before 2002 or after 2004, the portion, if any, of2101
such distribution that does not exceed the undistributed net2102
income of the trust for the three taxable years preceding the2103
taxable year in which the distribution is made to the extent that 2104
the portion was not included in the trust's taxable income for any 2105
of the trust's taxable years beginning in 2002, 2003, or 2004.2106
"Undistributed net income of a trust" means the taxable income of2107
the trust increased by (a)(i) the additions to adjusted gross2108
income required under division (A) of this section and (ii) the2109
personal exemptions allowed to the trust pursuant to section2110
642(b) of the Internal Revenue Code, and decreased by (b)(i) the2111
deductions to adjusted gross income required under division (A) of2112
this section, (ii) the amount of federal income taxes attributable2113
to such income, and (iii) the amount of taxable income that has2114
been included in the adjusted gross income of a beneficiary by2115
reason of a prior accumulation distribution. Any undistributed net2116
income included in the adjusted gross income of a beneficiary2117
shall reduce the undistributed net income of the trust commencing2118
with the earliest years of the accumulation period.2119

       (7) Deduct the amount of wages and salaries, if any, not2120
otherwise allowable as a deduction but that would have been2121
allowable as a deduction in computing federal adjusted gross2122
income for the taxable year, had the targeted jobs credit allowed2123
and determined under sections 38, 51, and 52 of the Internal2124
Revenue Code not been in effect.2125

       (8) Deduct any interest or interest equivalent on public2126
obligations and purchase obligations to the extent that the2127
interest or interest equivalent is included in federal adjusted2128
gross income.2129

       (9) Add any loss or deduct any gain resulting from the sale,2130
exchange, or other disposition of public obligations to the extent2131
that the loss has been deducted or the gain has been included in2132
computing federal adjusted gross income.2133

       (10) Deduct or add amounts, as provided under section 5747.70 2134
of the Revised Code, related to contributions to variable college 2135
savings program accounts made or tuition credits purchased2136
pursuant to Chapter 3334. of the Revised Code.2137

       (11)(a) Deduct, to the extent not otherwise allowable as a2138
deduction or exclusion in computing federal or Ohio adjusted gross2139
income for the taxable year, the amount the taxpayer paid during2140
the taxable year for medical care insurance and qualified2141
long-term care insurance for the taxpayer, the taxpayer's spouse,2142
and dependents. No deduction for medical care insurance under2143
division (A)(11) of this section shall be allowed either to any2144
taxpayer who is eligible to participate in any subsidized health2145
plan maintained by any employer of the taxpayer or of the2146
taxpayer's spouse, or to any taxpayer who is entitled to, or on2147
application would be entitled to, benefits under part A of Title2148
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.2149
301, as amended. For the purposes of division (A)(11)(a) of this2150
section, "subsidized health plan" means a health plan for which2151
the employer pays any portion of the plan's cost. The deduction2152
allowed under division (A)(11)(a) of this section shall be the net2153
of any related premium refunds, related premium reimbursements, or2154
related insurance premium dividends received during the taxable2155
year.2156

       (b) Deduct, to the extent not otherwise deducted or excluded2157
in computing federal or Ohio adjusted gross income during the2158
taxable year, the amount the taxpayer paid during the taxable2159
year, not compensated for by any insurance or otherwise, for2160
medical care of the taxpayer, the taxpayer's spouse, and2161
dependents, to the extent the expenses exceed seven and one-half2162
per cent of the taxpayer's federal adjusted gross income.2163

       (c) For purposes of division (A)(11) of this section,2164
"medical care" has the meaning given in section 213 of the2165
Internal Revenue Code, subject to the special rules, limitations,2166
and exclusions set forth therein, and "qualified long-term care"2167
has the same meaning given in section 7702(B)(b) of the Internal2168
Revenue Code.2169

       (12)(a) Deduct any amount included in federal adjusted gross2170
income solely because the amount represents a reimbursement or2171
refund of expenses that in any year the taxpayer had deducted as2172
an itemized deduction pursuant to section 63 of the Internal2173
Revenue Code and applicable United States department of the2174
treasury regulations. The deduction otherwise allowed under2175
division (A)(12)(a) of this section shall be reduced to the extent2176
the reimbursement is attributable to an amount the taxpayer2177
deducted under this section in any taxable year.2178

       (b) Add any amount not otherwise included in Ohio adjusted2179
gross income for any taxable year to the extent that the amount is2180
attributable to the recovery during the taxable year of any amount2181
deducted or excluded in computing federal or Ohio adjusted gross2182
income in any taxable year.2183

       (13) Deduct any portion of the deduction described in section 2184
1341(a)(2) of the Internal Revenue Code, for repaying previously 2185
reported income received under a claim of right, that meets both 2186
of the following requirements:2187

       (a) It is allowable for repayment of an item that was2188
included in the taxpayer's adjusted gross income for a prior2189
taxable year and did not qualify for a credit under division (A)2190
or (B) of section 5747.05 of the Revised Code for that year;2191

       (b) It does not otherwise reduce the taxpayer's adjusted2192
gross income for the current or any other taxable year.2193

       (14) Deduct an amount equal to the deposits made to, and net2194
investment earnings of, a medical savings account during the2195
taxable year, in accordance with section 3924.66 of the Revised2196
Code. The deduction allowed by division (A)(14) of this section2197
does not apply to medical savings account deposits and earnings2198
otherwise deducted or excluded for the current or any other2199
taxable year from the taxpayer's federal adjusted gross income.2200

       (15)(a) Add an amount equal to the funds withdrawn from a2201
medical savings account during the taxable year, and the net2202
investment earnings on those funds, when the funds withdrawn were2203
used for any purpose other than to reimburse an account holder2204
for, or to pay, eligible medical expenses, in accordance with2205
section 3924.66 of the Revised Code;2206

       (b) Add the amounts distributed from a medical savings2207
account under division (A)(2) of section 3924.68 of the Revised2208
Code during the taxable year.2209

       (16) Add any amount claimed as a credit under section2210
5747.059 of the Revised Code to the extent that such amount2211
satisfies either of the following:2212

       (a) The amount was deducted or excluded from the computation2213
of the taxpayer's federal adjusted gross income as required to be2214
reported for the taxpayer's taxable year under the Internal2215
Revenue Code;2216

       (b) The amount resulted in a reduction of the taxpayer's2217
federal adjusted gross income as required to be reported for any2218
of the taxpayer's taxable years under the Internal Revenue Code.2219

       (17) Deduct the amount contributed by the taxpayer to an2220
individual development account program established by a county2221
department of job and family services pursuant to sections 329.112222
to 329.14 of the Revised Code for the purpose of matching funds2223
deposited by program participants. On request of the tax2224
commissioner, the taxpayer shall provide any information that, in2225
the tax commissioner's opinion, is necessary to establish the2226
amount deducted under division (A)(17) of this section.2227

       (18) Beginning in taxable year 2001, if the taxpayer is2228
married and files a joint return and the combined federal adjusted2229
gross income of the taxpayer and the taxpayer's spouse for the2230
taxable year does not exceed one hundred thousand dollars, or if2231
the taxpayer is single and has a federal adjusted gross income for2232
the taxable year not exceeding fifty thousand dollars, deduct2233
amounts paid during the taxable year for qualified tuition and2234
fees paid to an eligible institution for the taxpayer, the2235
taxpayer's spouse, or any dependent of the taxpayer, who is a2236
resident of this state and is enrolled in or attending a program2237
that culminates in a degree or diploma at an eligible institution.2238
The deduction may be claimed only to the extent that qualified2239
tuition and fees are not otherwise deducted or excluded for any2240
taxable year from federal or Ohio adjusted gross income. The2241
deduction may not be claimed for educational expenses for which2242
the taxpayer claims a credit under section 5747.27 of the Revised2243
Code.2244

       (19) Add any reimbursement received during the taxable year2245
of any amount the taxpayer deducted under division (A)(18) of this2246
section in any previous taxable year to the extent the amount is2247
not otherwise included in Ohio adjusted gross income.2248

       (20)(a)(i) Add five-sixths of the amount of depreciation2249
expense allowed by subsection (k) of section 168 of the Internal2250
Revenue Code, including the taxpayer's proportionate or2251
distributive share of the amount of depreciation expense allowed2252
by that subsection to a pass-through entity in which the taxpayer2253
has a direct or indirect ownership interest.2254

       (ii) Add five-sixths of the amount of qualifying section 179 2255
depreciation expense, including a person's proportionate or 2256
distributive share of the amount of qualifying section 179 2257
depreciation expense allowed to any pass-through entity in which 2258
the person has a direct or indirect ownership. For the purposes of 2259
this division, "qualifying section 179 depreciation expense" means 2260
the difference between (I) the amount of depreciation expense 2261
directly or indirectly allowed to the taxpayer under section 179 2262
of the Internal Revenue Code, and (II) the amount of depreciation 2263
expense directly or indirectly allowed to the taxpayer under 2264
section 179 of the Internal Revenue Code as that section existed 2265
on December 31, 2002.2266

       The tax commissioner, under procedures established by the 2267
commissioner, may waive the add-backs related to a pass-through 2268
entity if the taxpayer owns, directly or indirectly, less than 2269
five per cent of the pass-through entity.2270

       (b) Nothing in division (A)(20) of this section shall be2271
construed to adjust or modify the adjusted basis of any asset.2272

       (c) To the extent the add-back required under division2273
(A)(20)(a) of this section is attributable to property generating2274
nonbusiness income or loss allocated under section 5747.20 of the2275
Revised Code, the add-back shall be sitused to the same location2276
as the nonbusiness income or loss generated by the property for2277
the purpose of determining the credit under division (A) of2278
section 5747.05 of the Revised Code. Otherwise, the add-back shall 2279
be apportioned, subject to one or more of the four alternative 2280
methods of apportionment enumerated in section 5747.21 of the 2281
Revised Code.2282

       (d) For the purposes of division (A) of this section, net 2283
operating loss carryback and carryforward shall not include 2284
five-sixths of the allowance of any net operating loss deduction 2285
carryback or carryforward to the taxable year to the extent such 2286
loss resulted from depreciation allowed by section 168(k) of the 2287
Internal Revenue Code and by the qualifying section 179 2288
depreciation expense amount.2289

       (21)(a) If the taxpayer was required to add an amount under2290
division (A)(20)(a) of this section for a taxable year, deduct2291
one-fifth of the amount so added for each of the five succeeding2292
taxable years.2293

       (b) If the amount deducted under division (A)(21)(a) of this2294
section is attributable to an add-back allocated under division2295
(A)(20)(c) of this section, the amount deducted shall be sitused2296
to the same location. Otherwise, the add-back shall be apportioned 2297
using the apportionment factors for the taxable year in which the 2298
deduction is taken, subject to one or more of the four alternative 2299
methods of apportionment enumerated in section 5747.21 of the 2300
Revised Code.2301

       (c) No deduction is available under division (A)(21)(a) of 2302
this section with regard to any depreciation allowed by section 2303
168(k) of the Internal Revenue Code and by the qualifying section 2304
179 depreciation expense amount to the extent that such 2305
depreciation resulted in or increased a federal net operating loss 2306
carryback or carryforward to a taxable year to which division 2307
(A)(20)(d) of this section does not apply.2308

       (B) "Business income" means income, including gain or loss,2309
arising from transactions, activities, and sources in the regular2310
course of a trade or business and includes income, gain, or loss2311
from real property, tangible property, and intangible property if2312
the acquisition, rental, management, and disposition of the2313
property constitute integral parts of the regular course of a2314
trade or business operation. "Business income" includes income,2315
including gain or loss, from a partial or complete liquidation of2316
a business, including, but not limited to, gain or loss from the2317
sale or other disposition of goodwill.2318

       (C) "Nonbusiness income" means all income other than business 2319
income and may include, but is not limited to, compensation, rents 2320
and royalties from real or tangible personal property, capital 2321
gains, interest, dividends and distributions, patent or copyright 2322
royalties, or lottery winnings, prizes, and awards.2323

       (D) "Compensation" means any form of remuneration paid to an2324
employee for personal services.2325

       (E) "Fiduciary" means a guardian, trustee, executor,2326
administrator, receiver, conservator, or any other person acting2327
in any fiduciary capacity for any individual, trust, or estate.2328

       (F) "Fiscal year" means an accounting period of twelve months 2329
ending on the last day of any month other than December.2330

       (G) "Individual" means any natural person.2331

       (H) "Internal Revenue Code" means the "Internal Revenue Code2332
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.2333

       (I) "Resident" means any of the following, provided that2334
division (I)(3) of this section applies only to taxable years of a2335
trust beginning in 2002, 2003, or 2004:2336

       (1) An individual who is domiciled in this state, subject to2337
section 5747.24 of the Revised Code;2338

       (2) The estate of a decedent who at the time of death was2339
domiciled in this state. The domicile tests of section 5747.24 of2340
the Revised Code and any election under section 5747.25 of the2341
Revised Code are not controlling for purposes of division (I)(2)2342
of this section.2343

       (3) A trust that, in whole or part, resides in this state. If2344
only part of a trust resides in this state, the trust is a2345
resident only with respect to that part.2346

       For the purposes of division (I)(3) of this section:2347

       (a) A trust resides in this state for the trust's current2348
taxable year to the extent, as described in division (I)(3)(d) of2349
this section, that the trust consists directly or indirectly, in 2350
whole or in part, of assets, net of any related liabilities, that 2351
were transferred, or caused to be transferred, directly or 2352
indirectly, to the trust by any of the following:2353

        (i) A person, a court, or a governmental entity or 2354
instrumentality on account of the death of a decedent, but only if 2355
the trust is described in division (I)(3)(e)(i) or (ii) of this 2356
section;2357

       (ii) A person who was domiciled in this state for the 2358
purposes of this chapter when the person directly or indirectly 2359
transferred assets to an irrevocable trust, but only if at least 2360
one of the trust's qualifying beneficiaries is domiciled in this 2361
state for the purposes of this chapter during all or some portion 2362
of the trust's current taxable year;2363

       (iii) A person who was domiciled in this state for the2364
purposes of this chapter when the trust document or instrument or2365
part of the trust document or instrument became irrevocable, but2366
only if at least one of the trust's qualifying beneficiaries is a 2367
resident domiciled in this state for the purposes of this chapter2368
during all or some portion of the trust's current taxable year.2369

        (b) A trust is irrevocable to the extent that the transferor 2370
is not considered to be the owner of the net assets of the trust 2371
under sections 671 to 678 of the Internal Revenue Code.2372

       (c) With respect to a trust other than a charitable lead2373
trust, "qualifying beneficiary" has the same meaning as "potential2374
current beneficiary" as defined in section 1361(e)(2) of the2375
Internal Revenue Code, and with respect to a charitable lead trust2376
"qualifying beneficiary" is any current, future, or contingent2377
beneficiary, but with respect to any trust "qualifying2378
beneficiary" excludes a person or a governmental entity or2379
instrumentality to any of which a contribution would qualify for2380
the charitable deduction under section 170 of the Internal Revenue2381
Code.2382

        (d) For the purposes of division (I)(3)(a) of this section,2383
the extent to which a trust consists directly or indirectly, in2384
whole or in part, of assets, net of any related liabilities, that2385
were transferred directly or indirectly, in whole or part, to the2386
trust by any of the sources enumerated in that division shall be2387
ascertained by multiplying the fair market value of the trust's2388
assets, net of related liabilities, by the qualifying ratio, which2389
shall be computed as follows:2390

        (i) The first time the trust receives assets, the numerator2391
of the qualifying ratio is the fair market value of those assets2392
at that time, net of any related liabilities, from sources2393
enumerated in division (I)(3)(a) of this section. The denominator2394
of the qualifying ratio is the fair market value of all the2395
trust's assets at that time, net of any related liabilities.2396

        (ii) Each subsequent time the trust receives assets, a2397
revised qualifying ratio shall be computed. The numerator of the2398
revised qualifying ratio is the sum of (1) the fair market value2399
of the trust's assets immediately prior to the subsequent2400
transfer, net of any related liabilities, multiplied by the2401
qualifying ratio last computed without regard to the subsequent2402
transfer, and (2) the fair market value of the subsequently2403
transferred assets at the time transferred, net of any related2404
liabilities, from sources enumerated in division (I)(3)(a) of this2405
section. The denominator of the revised qualifying ratio is the2406
fair market value of all the trust's assets immediately after the2407
subsequent transfer, net of any related liabilities.2408

        (e) For the purposes of division (I)(3)(a)(i) of this2409
section:2410

        (i) A trust is described in division (I)(3)(e)(i) of this2411
section if the trust is a testamentary trust and the testator of2412
that testamentary trust was domiciled in this state at the time of2413
the testator's death for purposes of the taxes levied under2414
Chapter 5731. of the Revised Code.2415

        (ii) A trust is described in division (I)(3)(e)(ii) of this2416
section if the transfer is a qualifying transfer described in any2417
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an2418
irrevocable inter vivos trust, and at least one of the trust's2419
qualifying beneficiaries is domiciled in this state for purposes2420
of this chapter during all or some portion of the trust's current2421
taxable year.2422

        (f) For the purposes of division (I)(3)(e)(ii) of this2423
section, a "qualifying transfer" is a transfer of assets, net of2424
any related liabilities, directly or indirectly to a trust, if the2425
transfer is described in any of the following:2426

        (i) The transfer is made to a trust, created by the decedent 2427
before the decedent's death and while the decedent was domiciled 2428
in this state for the purposes of this chapter, and, prior to the 2429
death of the decedent, the trust became irrevocable while the 2430
decedent was domiciled in this state for the purposes of this 2431
chapter.2432

        (ii) The transfer is made to a trust to which the decedent,2433
prior to the decedent's death, had directly or indirectly2434
transferred assets, net of any related liabilities, while the2435
decedent was domiciled in this state for the purposes of this2436
chapter, and prior to the death of the decedent the trust became2437
irrevocable while the decedent was domiciled in this state for the2438
purposes of this chapter.2439

        (iii) The transfer is made on account of a contractual2440
relationship existing directly or indirectly between the2441
transferor and either the decedent or the estate of the decedent2442
at any time prior to the date of the decedent's death, and the2443
decedent was domiciled in this state at the time of death for2444
purposes of the taxes levied under Chapter 5731. of the Revised2445
Code.2446

        (iv) The transfer is made to a trust on account of a2447
contractual relationship existing directly or indirectly between2448
the transferor and another person who at the time of the2449
decedent's death was domiciled in this state for purposes of this2450
chapter.2451

        (v) The transfer is made to a trust on account of the will of 2452
a testator.2453

        (vi) The transfer is made to a trust created by or caused to 2454
be created by a court, and the trust was directly or indirectly2455
created in connection with or as a result of the death of an2456
individual who, for purposes of the taxes levied under Chapter2457
5731. of the Revised Code, was domiciled in this state at the time2458
of the individual's death.2459

       (g) The tax commissioner may adopt rules to ascertain the2460
part of a trust residing in this state.2461

       (J) "Nonresident" means an individual or estate that is not a 2462
resident. An individual who is a resident for only part of a2463
taxable year is a nonresident for the remainder of that taxable2464
year.2465

       (K) "Pass-through entity" has the same meaning as in section2466
5733.04 of the Revised Code.2467

       (L) "Return" means the notifications and reports required to2468
be filed pursuant to this chapter for the purpose of reporting the2469
tax due and includes declarations of estimated tax when so2470
required.2471

       (M) "Taxable year" means the calendar year or the taxpayer's2472
fiscal year ending during the calendar year, or fractional part2473
thereof, upon which the adjusted gross income is calculated2474
pursuant to this chapter.2475

       (N) "Taxpayer" means any person subject to the tax imposed by 2476
section 5747.02 of the Revised Code or any pass-through entity2477
that makes the election under division (D) of section 5747.08 of2478
the Revised Code.2479

       (O) "Dependents" means dependents as defined in the Internal2480
Revenue Code and as claimed in the taxpayer's federal income tax2481
return for the taxable year or which the taxpayer would have been2482
permitted to claim had the taxpayer filed a federal income tax2483
return.2484

       (P) "Principal county of employment" means, in the case of a2485
nonresident, the county within the state in which a taxpayer2486
performs services for an employer or, if those services are2487
performed in more than one county, the county in which the major2488
portion of the services are performed.2489

       (Q) As used in sections 5747.50 to 5747.55 of the Revised2490
Code:2491

       (1) "Subdivision" means any county, municipal corporation,2492
park district, or township.2493

       (2) "Essential local government purposes" includes all2494
functions that any subdivision is required by general law to2495
exercise, including like functions that are exercised under a2496
charter adopted pursuant to the Ohio Constitution.2497

       (R) "Overpayment" means any amount already paid that exceeds2498
the figure determined to be the correct amount of the tax.2499

       (S) "Taxable income" or "Ohio taxable income" applies only to 2500
estates and trusts, and means federal taxable income, as defined 2501
and used in the Internal Revenue Code, adjusted as follows:2502

       (1) Add interest or dividends, net of ordinary, necessary,2503
and reasonable expenses not deducted in computing federal taxable2504
income, on obligations or securities of any state or of any2505
political subdivision or authority of any state, other than this2506
state and its subdivisions and authorities, but only to the extent 2507
that such net amount is not otherwise includible in Ohio taxable 2508
income and is described in either division (S)(1)(a) or (b) of 2509
this section:2510

        (a) The net amount is not attributable to the S portion of an 2511
electing small business trust and has not been distributed to2512
beneficiaries for the taxable year;2513

        (b) The net amount is attributable to the S portion of an2514
electing small business trust for the taxable year.2515

       (2) Add interest or dividends, net of ordinary, necessary,2516
and reasonable expenses not deducted in computing federal taxable2517
income, on obligations of any authority, commission,2518
instrumentality, territory, or possession of the United States to2519
the extent that the interest or dividends are exempt from federal2520
income taxes but not from state income taxes, but only to the2521
extent that such net amount is not otherwise includible in Ohio2522
taxable income and is described in either division (S)(1)(a) or2523
(b) of this section;2524

       (3) Add the amount of personal exemption allowed to the2525
estate pursuant to section 642(b) of the Internal Revenue Code;2526

       (4) Deduct interest or dividends, net of related expenses2527
deducted in computing federal taxable income, on obligations of2528
the United States and its territories and possessions or of any2529
authority, commission, or instrumentality of the United States to2530
the extent that the interest or dividends are exempt from state2531
taxes under the laws of the United States, but only to the extent2532
that such amount is included in federal taxable income and is2533
described in either division (S)(1)(a) or (b) of this section;2534

       (5) Deduct the amount of wages and salaries, if any, not2535
otherwise allowable as a deduction but that would have been2536
allowable as a deduction in computing federal taxable income for2537
the taxable year, had the targeted jobs credit allowed under2538
sections 38, 51, and 52 of the Internal Revenue Code not been in2539
effect, but only to the extent such amount relates either to2540
income included in federal taxable income for the taxable year or2541
to income of the S portion of an electing small business trust for2542
the taxable year;2543

       (6) Deduct any interest or interest equivalent, net of2544
related expenses deducted in computing federal taxable income, on2545
public obligations and purchase obligations, but only to the2546
extent that such net amount relates either to income included in2547
federal taxable income for the taxable year or to income of the S2548
portion of an electing small business trust for the taxable year;2549

       (7) Add any loss or deduct any gain resulting from sale,2550
exchange, or other disposition of public obligations to the extent2551
that such loss has been deducted or such gain has been included in2552
computing either federal taxable income or income of the S portion2553
of an electing small business trust for the taxable year;2554

       (8) Except in the case of the final return of an estate, add2555
any amount deducted by the taxpayer on both its Ohio estate tax2556
return pursuant to section 5731.14 of the Revised Code, and on its2557
federal income tax return in determining federal taxable income;2558

       (9)(a) Deduct any amount included in federal taxable income2559
solely because the amount represents a reimbursement or refund of2560
expenses that in a previous year the decedent had deducted as an2561
itemized deduction pursuant to section 63 of the Internal Revenue2562
Code and applicable treasury regulations. The deduction otherwise2563
allowed under division (S)(9)(a) of this section shall be reduced2564
to the extent the reimbursement is attributable to an amount the2565
taxpayer or decedent deducted under this section in any taxable2566
year.2567

       (b) Add any amount not otherwise included in Ohio taxable2568
income for any taxable year to the extent that the amount is2569
attributable to the recovery during the taxable year of any amount2570
deducted or excluded in computing federal or Ohio taxable income2571
in any taxable year, but only to the extent such amount has not2572
been distributed to beneficiaries for the taxable year.2573

       (10) Deduct any portion of the deduction described in section 2574
1341(a)(2) of the Internal Revenue Code, for repaying previously 2575
reported income received under a claim of right, that meets both 2576
of the following requirements:2577

       (a) It is allowable for repayment of an item that was2578
included in the taxpayer's taxable income or the decedent's2579
adjusted gross income for a prior taxable year and did not qualify2580
for a credit under division (A) or (B) of section 5747.05 of the2581
Revised Code for that year.2582

       (b) It does not otherwise reduce the taxpayer's taxable2583
income or the decedent's adjusted gross income for the current or2584
any other taxable year.2585

       (11) Add any amount claimed as a credit under section2586
5747.059 of the Revised Code to the extent that the amount2587
satisfies either of the following:2588

       (a) The amount was deducted or excluded from the computation2589
of the taxpayer's federal taxable income as required to be2590
reported for the taxpayer's taxable year under the Internal2591
Revenue Code;2592

       (b) The amount resulted in a reduction in the taxpayer's2593
federal taxable income as required to be reported for any of the2594
taxpayer's taxable years under the Internal Revenue Code.2595

       (12) Deduct any amount, net of related expenses deducted in2596
computing federal taxable income, that a trust is required to2597
report as farm income on its federal income tax return, but only2598
if the assets of the trust include at least ten acres of land2599
satisfying the definition of "land devoted exclusively to2600
agricultural use" under section 5713.30 of the Revised Code,2601
regardless of whether the land is valued for tax purposes as such2602
land under sections 5713.30 to 5713.38 of the Revised Code. If the2603
trust is a pass-though entity investor, section 5747.231 of the2604
Revised Code applies in ascertaining if the trust is eligible to2605
claim the deduction provided by division (S)(12) of this section2606
in connection with the pass-through entity's farm income.2607

        Except for farm income attributable to the S portion of an2608
electing small business trust, the deduction provided by division2609
(S)(12) of this section is allowed only to the extent that the2610
trust has not distributed such farm income. Division (S)(12) of2611
this section applies only to taxable years of a trust beginning in2612
2002, 2003, or 2004.2613

       (13) Add the net amount of income described in section 641(c)2614
of the Internal Revenue Code to the extent that amount is not2615
included in federal taxable income.2616

       (14) Add or deduct the amount the taxpayer would be required2617
to add or deduct under division (A)(20) or (21) of this section if2618
the taxpayer's Ohio taxable income were computed in the same2619
manner as an individual's Ohio adjusted gross income is computed2620
under this section. In the case of a trust, division (S)(14) of2621
this section applies only to any of the trust's taxable years2622
beginning in 2002, 2003, or 2004.2623

       (T) "School district income" and "school district income tax" 2624
have the same meanings as in section 5748.01 of the Revised Code.2625

       (U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)2626
of this section, "public obligations," "purchase obligations," and2627
"interest or interest equivalent" have the same meanings as in2628
section 5709.76 of the Revised Code.2629

       (V) "Limited liability company" means any limited liability2630
company formed under Chapter 1705. of the Revised Code or under2631
the laws of any other state.2632

       (W) "Pass-through entity investor" means any person who,2633
during any portion of a taxable year of a pass-through entity, is2634
a partner, member, shareholder, or equity investor in that2635
pass-through entity.2636

       (X) "Banking day" has the same meaning as in section 1304.012637
of the Revised Code.2638

       (Y) "Month" means a calendar month.2639

       (Z) "Quarter" means the first three months, the second three2640
months, the third three months, or the last three months of the2641
taxpayer's taxable year.2642

       (AA)(1) "Eligible institution" means a state university or2643
state institution of higher education as defined in section2644
3345.011 of the Revised Code, or a private, nonprofit college,2645
university, or other post-secondary institution located in this2646
state that possesses a certificate of authorization issued by the2647
Ohio board of regents pursuant to Chapter 1713. of the Revised2648
Code or a certificate of registration issued by the state board of2649
career colleges and schools under Chapter 3332. of the Revised2650
Code.2651

       (2) "Qualified tuition and fees" means tuition and fees2652
imposed by an eligible institution as a condition of enrollment or2653
attendance, not exceeding two thousand five hundred dollars in2654
each of the individual's first two years of post-secondary2655
education. If the individual is a part-time student, "qualified2656
tuition and fees" includes tuition and fees paid for the academic2657
equivalent of the first two years of post-secondary education2658
during a maximum of five taxable years, not exceeding a total of2659
five thousand dollars. "Qualified tuition and fees" does not2660
include:2661

       (a) Expenses for any course or activity involving sports,2662
games, or hobbies unless the course or activity is part of the2663
individual's degree or diploma program;2664

       (b) The cost of books, room and board, student activity fees,2665
athletic fees, insurance expenses, or other expenses unrelated to 2666
the individual's academic course of instruction;2667

       (c) Tuition, fees, or other expenses paid or reimbursed2668
through an employer, scholarship, grant in aid, or other2669
educational benefit program.2670

       (BB)(1) "Modified business income" means the business income2671
included in a trust's Ohio taxable income after such taxable2672
income is first reduced by the qualifying trust amount, if any.2673

       (2) "Qualifying trust amount" of a trust means capital gains2674
and losses from the sale, exchange, or other disposition of equity2675
or ownership interests in, or debt obligations of, a qualifying2676
investee to the extent included in the trust's Ohio taxable 2677
income, but only if the following requirements are satisfied:2678

        (a) The book value of the qualifying investee's physical 2679
assets in this state and everywhere, as of the last day of the 2680
qualifying investee's fiscal or calendar year ending immediately 2681
prior to the date on which the trust recognizes the gain or loss, 2682
is available to the trust.2683

       (b) The requirements of section 5747.011 of the Revised Code2684
are satisfied for the trust's taxable year in which the trust2685
recognizes the gain or loss.2686

        Any gain or loss that is not a qualifying trust amount is2687
modified business income, qualifying investment income, or2688
modified nonbusiness income, as the case may be.2689

       (3) "Modified nonbusiness income" means a trust's Ohio2690
taxable income other than modified business income, other than the2691
qualifying trust amount, and other than qualifying investment2692
income, as defined in section 5747.012 of the Revised Code, to the2693
extent such qualifying investment income is not otherwise part of2694
modified business income.2695

       (4) "Modified Ohio taxable income" applies only to trusts,2696
and means the sum of the amounts described in divisions (BB)(4)(a) 2697
to (c) of this section:2698

       (a) The fraction, calculated under section 5747.013, and 2699
applying section 5747.231 of the Revised Code, multiplied by the 2700
sum of the following amounts:2701

        (i) The trust's modified business income;2702

        (ii) The trust's qualifying investment income, as defined in 2703
section 5747.012 of the Revised Code, but only to the extent the 2704
qualifying investment income does not otherwise constitute2705
modified business income and does not otherwise constitute a2706
qualifying trust amount.2707

       (b) The qualifying trust amount multiplied by a fraction, the 2708
numerator of which is the sum of the book value of the qualifying 2709
investee's physical assets in this state on the last day of the 2710
qualifying investee's fiscal or calendar year ending immediately 2711
prior to the day on which the trust recognizes the qualifying 2712
trust amount, and the denominator of which is the sum of the book 2713
value of the qualifying investee's total physical assets 2714
everywhere on the last day of the qualifying investee's fiscal or 2715
calendar year ending immediately prior to the day on which the 2716
trust recognizes the qualifying trust amount. If, for a taxable 2717
year, the trust recognizes a qualifying trust amount with respect 2718
to more than one qualifying investee, the amount described in 2719
division (BB)(4)(b) of this section shall equal the sum of the2720
products so computed for each such qualifying investee.2721

       (c)(i) With respect to a trust or portion of a trust that is 2722
a resident as ascertained in accordance with division (I)(3)(d) of 2723
this section, its modified nonbusiness income.2724

        (ii) With respect to a trust or portion of a trust that is2725
not a resident as ascertained in accordance with division2726
(I)(3)(d) of this section, the amount of its modified nonbusiness2727
income satisfying the descriptions in divisions (B)(2) to (5) of2728
section 5747.20 of the Revised Code.2729

       If the allocation and apportionment of a trust's income under2730
divisions (BB)(4)(a) and (c) of this section do not fairly2731
represent the modified Ohio taxable income of the trust in this2732
state, the alternative methods described in division (C) of2733
section 5747.21 of the Revised Code may be applied in the manner2734
and to the same extent provided in that section.2735

       (5)(a) Except as set forth in division (BB)(5)(b) of this 2736
section, "qualifying investee" means a person in which a trust has 2737
an equity or ownership interest, or a person or unit of government 2738
the debt obligations of either of which are owned by a trust. For 2739
the purposes of division (BB)(2)(a) of this section and for the 2740
purpose of computing the fraction described in division (BB)(4)(b) 2741
of this section, all of the following apply:2742

        (i) If the qualifying investee is a member of a qualifying2743
controlled group on the last day of the qualifying investee's2744
fiscal or calendar year ending immediately prior to the date on2745
which the trust recognizes the gain or loss, then "qualifying2746
investee" includes all persons in the qualifying controlled group2747
on such last day.2748

        (ii) If the qualifying investee, or if the qualifying2749
investee and any members of the qualifying controlled group of2750
which the qualifying investee is a member on the last day of the2751
qualifying investee's fiscal or calendar year ending immediately2752
prior to the date on which the trust recognizes the gain or loss,2753
separately or cumulatively own, directly or indirectly, on the2754
last day of the qualifying investee's fiscal or calendar year2755
ending immediately prior to the date on which the trust recognizes2756
the qualifying trust amount, more than fifty per cent of the2757
equity of a pass-through entity, then the qualifying investee and2758
the other members are deemed to own the proportionate share of the2759
pass-through entity's physical assets which the pass-through2760
entity directly or indirectly owns on the last day of the2761
pass-through entity's calendar or fiscal year ending within or2762
with the last day of the qualifying investee's fiscal or calendar2763
year ending immediately prior to the date on which the trust2764
recognizes the qualifying trust amount.2765

        (iii) For the purposes of division (BB)(5)(a)(iii) of this2766
section, "upper level pass-through entity" means a pass-through2767
entity directly or indirectly owning any equity of another2768
pass-through entity, and "lower level pass-through entity" means2769
that other pass-through entity.2770

        An upper level pass-through entity, whether or not it is also 2771
a qualifying investee, is deemed to own, on the last day of the 2772
upper level pass-through entity's calendar or fiscal year, the2773
proportionate share of the lower level pass-through entity's2774
physical assets that the lower level pass-through entity directly2775
or indirectly owns on the last day of the lower level pass-through2776
entity's calendar or fiscal year ending within or with the last2777
day of the upper level pass-through entity's fiscal or calendar2778
year. If the upper level pass-through entity directly and2779
indirectly owns less than fifty per cent of the equity of the2780
lower level pass-through entity on each day of the upper level2781
pass-through entity's calendar or fiscal year in which or with2782
which ends the calendar or fiscal year of the lower level2783
pass-through entity and if, based upon clear and convincing2784
evidence, complete information about the location and cost of the2785
physical assets of the lower pass-through entity is not available2786
to the upper level pass-through entity, then solely for purposes2787
of ascertaining if a gain or loss constitutes a qualifying trust2788
amount, the upper level pass-through entity shall be deemed as2789
owning no equity of the lower level pass-through entity for each2790
day during the upper level pass-through entity's calendar or2791
fiscal year in which or with which ends the lower level2792
pass-through entity's calendar or fiscal year. Nothing in division 2793
(BB)(5)(a)(iii) of this section shall be construed to provide for 2794
any deduction or exclusion in computing any trust's Ohio taxable 2795
income.2796

       (b) With respect to a trust that is not a resident for the2797
taxable year and with respect to a part of a trust that is not a2798
resident for the taxable year, "qualifying investee" for that2799
taxable year does not include a C corporation if both of the2800
following apply:2801

       (i) During the taxable year the trust or part of the trust2802
recognizes a gain or loss from the sale, exchange, or other2803
disposition of equity or ownership interests in, or debt2804
obligations of, the C corporation.2805

       (ii) Such gain or loss constitutes nonbusiness income.2806

        (6) "Available" means information is such that a person is 2807
able to learn of the information by the due date plus extensions, 2808
if any, for filing the return for the taxable year in which the 2809
trust recognizes the gain or loss.2810

        (CC) "Qualifying controlled group" has the same meaning as in 2811
section 5733.04 of the Revised Code.2812

        (DD) "Related member" has the same meaning as in section2813
5733.042 of the Revised Code.2814

       (EE) Any term used in this chapter that is not otherwise2815
defined in this section and that is not used in a comparable2816
context in the Internal Revenue Code and other statutes of the2817
United States relating to federal income taxes has the same2818
meaning as in section 5733.40 of the Revised Code.2819

       Section 2. That existing sections 718.01, 718.02, 3318.05, 2820
3318.052, 3318.08, 3318.44, 3770.07, 3770.10, 3770.12, 5705.192, 2821
5705.21, 5733.04, 5733.42, and 5747.01 of the Revised Code are 2822
hereby repealed.2823

       Section 3. (A) This section is intended to mitigate the 2824
unintended consequences of Cleveland Clinic Foundation v. Wilkins, 2825
103 Ohio St.3d 382, 816 N.E. 2d 224 (2004), by providing remedial 2826
legislation to address the large volume of applications for 2827
exemption of property that the Tax Commissioner dismissed because 2828
of the decision in that case.2829

        (B) As used in this section:2830

        (1) "Eligible years" means those tax years for which taxes, 2831
penalties, and interest could have been properly remitted or 2832
abated and the property placed on the tax exempt list under a 2833
previous application for exemption of property that was dismissed 2834
as explained in division (A) of this section.2835

        (2) "Qualified property" means real property that satisfies 2836
the qualifications for tax exemption under any section of the 2837
Revised Code and for which an application for exemption of 2838
property was dismissed by the Tax Commissioner as explained in 2839
division (A) of this section.2840

        (3) "Subdivision," "taxing authority," and "taxing unit" have 2841
the same meanings as in section 5705.01 of the Revised Code.2842

        (C) Notwithstanding section 5713.081 of the Revised Code, 2843
when qualified property has not received a tax exemption, 2844
remission, or abatement because of failure to comply with Chapter 2845
5713. or section 5715.27 of the Revised Code, the current owner of 2846
the qualified property at any time on or before July 1, 2005, may 2847
file with the Tax Commissioner an application requesting that the 2848
property be placed on the tax exempt list and that all paid or 2849
unpaid taxes, penalties, and interest on the property be abated or 2850
remitted for the eligible years. The application shall be filed on 2851
the form prescribed by the Commissioner under section 5715.27 of 2852
the Revised Code. The owner shall attach to the application a copy 2853
of the Commissioner's final determination dismissing the previous 2854
application for exemption of the qualified property, along with 2855
the county treasurer's certificate required by division (E) of 2856
this section. Failure to attach the Commissioner's final 2857
determination dismissing the previous application for exemption of 2858
the qualified property and the treasurer's certificate shall 2859
result in dismissal of the application filed under this division.2860

        (D) The county auditor shall notify the county treasurer to 2861
hold any tax payments for eligible years in a special fund pending 2862
a decision by the Commissioner on an application filed under this 2863
section. While such application is pending, no subdivision or 2864
other taxing unit is entitled to an advance payment of such moneys 2865
under section 321.34 of the Revised Code. After the Commissioner 2866
issues a decision, the county auditor shall either refund the 2867
taxes, penalties, and interest to the applicant if remission is 2868
granted, or distribute the taxes, penalties, and interest to the 2869
proper taxing authorities if the remission is denied.2870

        (E) An applicant under this section shall obtain a 2871
certificate from the county treasurer that determines whether all 2872
taxes, penalties, and interest that were levied for all tax years 2873
that are not eligible years and all special assessments charged 2874
against the property have been paid in full. If that is not so, 2875
the county treasurer shall issue a certificate to that effect 2876
listing the tax years for which taxes, penalties, interest, and 2877
special assessments remain unpaid.2878

        (F)(1) Upon receipt of an application under this section, the 2879
Tax Commissioner shall determine if the applicant and the 2880
applicant's qualified property meets the qualifications for tax 2881
exemption and the qualifications set forth in this section. If 2882
these qualifications are met, the Commissioner shall issue an 2883
order directing that the property be placed on the tax exempt list 2884
of the county and that all paid or unpaid taxes, penalties, and 2885
interest for every year the property met the qualifications for 2886
exemption be abated. If the Commissioner finds that the property 2887
is not entitled to tax exemption and to the abatement of paid or 2888
unpaid taxes, penalties, and interest for any of the years for 2889
which the current owner claims an exemption or abatement, the 2890
Commissioner shall order the county treasurer of the county in 2891
which the property is located to collect all taxes, penalties, and 2892
interest due on the property for those years in accordance with 2893
law. If the Commissioner finds that the property is now being used 2894
for a purpose that would foreclose its right to tax exemption, the 2895
Commissioner shall issue an order denying the application.2896

        (2)(a) If the Tax Commissioner determines the qualified 2897
property satisfies the requirements for exemption, the 2898
Commissioner shall remit such taxes, penalties, and interest for 2899
the eligible years, but only with the consent of the taxing 2900
authority of the subdivision or other taxing unit to which such 2901
taxes, penalties, and interest are owed. For purposes of this 2902
section, a taxing authority has given consent if the taxing 2903
authority has not passed a resolution, on a form prescribed by the 2904
Commissioner, and filed it with the county auditor on or before 2905
February 15, 2005, stating its objection to the remission of such 2906
taxes, penalties, and interest. On or before January 15, 2005, the 2907
county auditor of each county shall notify each subdivision or 2908
taxing unit in the county of the enactment of this section and of 2909
the requirement that a taxing authority may file an objection to 2910
the remission of taxes, penalties, and interest with the county 2911
auditor on or before February 15, 2005. If the taxing authority of 2912
a subdivision or taxing unit withholds its consent, the applicant 2913
shall pay all the outstanding taxes, penalties, and interest owed 2914
to that subdivision or taxing unit, except for those taxes, 2915
penalties, and interest that are included in the three-year 2916
remission period under division (A) of section 5713.081 of the 2917
Revised Code. Tax payments for eligible years for which consent 2918
has not been obtained shall not be considered unpaid taxes for 2919
purposes of establishing jurisdiction to consider an application 2920
under this section.2921

        (b) Consent given under division (F)(2)(a) of this section 2922
does not apply to the year an application is filed under this 2923
section and to the three-year remission period under division (A) 2924
of section 5713.081 of the Revised Code. The applicant retains the 2925
right to apply for those years under that section with or without 2926
the consent of the applicable subdivisions or taxing units.2927

        (c) The county auditor shall maintain a record of all taxing 2928
authorities that have withheld consent under this section. After 2929
the Tax Commissioner's decision is issued for each of the eligible 2930
years for which exemption and remission or abatement was 2931
requested, the county auditor shall either refund, remit, or abate 2932
taxes for which consent has been given, and shall distribute to 2933
the appropriate subdivision or other taxing unit those taxes for 2934
which consent was withheld.2935

       Section 4. The amendments by this act of section 5705.21 of 2936
the Revised Code changing the designation of levies for "general, 2937
ongoing permanent improvements" to levies for "general permanent 2938
improvements" and defining "general permanent improvements" do not 2939
change the purpose for which such levies are imposed or may be 2940
imposed. Those amendments are intended only to change the name by 2941
which such levies shall be referred to in the Revised Code and in 2942
resolutions, election notices, and ballot forms.2943

        For the purposes of renewing or replacing an existing levy 2944
for the purpose of "general, ongoing permanent improvements" that 2945
is in effect on the effective date of this act, a renewal or 2946
replacement levy for the purpose of "general permanent 2947
improvements" shall be considered to be a levy for the same 2948
purpose as the existing levy.2949

       Section 5. (A) Except as provided in division (B) of this 2950
section, the amendment by this act of sections 5733.04 and 5747.01 2951
of the Revised Code, which updates references to federal income 2952
tax laws and thereby incorporates recent changes to those laws, 2953
first applies to taxable years ending on or after the effective 2954
date of those sections, as amended by this act.2955

       (B) A taxpayer may irrevocably elect to apply section 5733.04 2956
or 5747.01 of the Revised Code, as amended by this act, to the 2957
taxpayer's taxable year ending in 2004. The filing of a return or 2958
report by the taxpayer for that taxable year that incorporates the 2959
amendments to those sections by this act without adjustments to 2960
reverse the effects of those amendments constitutes the making of 2961
an irrevocable election under this section.2962

       Section 6. The amendment by this act of sections 718.01, 2963
718.02, 5733.04, and 5747.01 of the Revised Code and the enactment 2964
of Sections 3, 5, and 6 of this act provide for or are essential 2965
to implementation of a tax levy. Therefore, under Ohio 2966
Constitution, Article II, Section 1d, those sections as amended or 2967
enacted by this act are not subject to the referendum and go into 2968
immediate effect when this act becomes law.2969