H. B. No. 133 As Introduced

As Introduced

127th General Assembly

Regular Session

2007-2008

H. B. No. 133

Representative Hughes

Cosponsors: Representatives Bacon, Huffman, Miller, McGregor, R., Flowers, Latta, Yuko, Wagoner, Widener, Adams, Stebelton, DeGeeter

A BILL

To amend sections 5747.98 and 5751.98 and to enact 1
sections 3333.51, 5747.81, 5747.82, 5751.54, and 2
5751.55 of the Revised Code to grant tax credits 3
to businesses that provide internships to students 4
attending Ohio's colleges and universities and 5
that hire former interns. 6

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

       Section 1. That sections 5747.98 and 5751.98 be amended and 7
sections 3333.51, 5747.81, 5747.82, 5751.54, and 5751.55 of the 8
Revised Code be enacted to read as follows: 9

       Sec. 3333.51. (A) As used in this section, "Ohio institution 10
of higher education" means all of the following: 11

       (1) An institution of higher education, as defined in section 12
3345.12 of the Revised Code; 13

       (2) An institution authorized by the Ohio board of regents 14
under Chapter 1713. of the Revised Code to grant degrees and that 15
is accredited by the appropriate regional, and, when appropriate, 16
professional, accrediting associations within whose jurisdiction 17
it falls; 18

       (3) Private career schools holding program authorizations 19
issued by the state board of career colleges and schools under 20
division (C) of section 3332.05 of the Revised Code; 21

       (4) Private institutions exempt from regulation under Chapter 22
3332. of the Revised Code as prescribed in section 3333.046 of the 23
Revised Code. 24

       (B) For the purpose of providing students in Ohio 25
institutions of higher education with practical work experience 26
and for the purpose of fostering long-term relationships between 27
those students and Ohio employers, the Ohio board of regents may 28
certify internships to be conducted between Ohio businesses and 29
students attending Ohio institutions of higher education. The 30
board shall adopt rules establishing criteria for certifying those 31
internships. The rules shall condition certification of an 32
internship on the internship being at least ten consecutive weeks 33
in duration, with each week consisting of at least twenty hours of 34
employment, and the intern receiving from the business total 35
compensation equal to or exceeding two thousand dollars. The rules 36
also shall require that the terms and conditions of an internship 37
between a business and a student be memorialized in a written 38
agreement between the two parties. An agreement shall, at a 39
minimum, include: 40

       (1) Biographical information on the student, including, but 41
not limited to, the student's Ohio institution of higher 42
education, date of birth, major, and expected date of graduation; 43

       (2) A description of the business, including, but not limited 44
to, the business' location, number of Ohio employees, and business 45
activities; 46

       (3) A description of the terms and conditions of the 47
internship, including, but not limited to, a description of the 48
tasks that the student is expected to complete; the amount of 49
compensation to be paid to the student, which shall total at least 50
two thousand dollars; the duration of the internship; and the 51
hours of employment, which shall satisfy the minimum duration and 52
hour requirements specified in this section; 53

       (4) An agreement on the part of both the business and the 54
student to evaluate the internship at the conclusion of the 55
internship and periodically during the term of the internship. 56

       Both the student and a representative of the business shall 57
sign the agreement. 58

       (C) Upon application, the Ohio board of regents shall issue a 59
tax credit certificate to a business that participates in an 60
internship certified by the board that the business successfully 61
completes pursuant to the agreement entered into under this 62
section. The tax credit certificate entitles the business to claim 63
the tax credit allowed under section 5747.81 or 5751.54 of the 64
Revised Code, provided that all the terms and conditions 65
prescribed under this section and those sections for receiving the 66
credit are satisfied. The application shall be in a form 67
prescribed by the board and shall include a copy of the agreement 68
entered into under this section. 69

       Sec. 5747.81. (A) As used in this section: 70

       (1) "Pass-through entity" includes a sole proprietorship. 71

       (2) "State-certified internship" means an internship 72
certified by the Ohio board of regents under section 3333.51 of 73
the Revised Code. 74

       (B) For taxable years beginning in 2007 or thereafter, there 75
is hereby allowed a refundable credit against the tax imposed by 76
section 5747.02 of the Revised Code for a taxpayer that is an 77
equity investor in a pass-through entity that obtains a tax credit 78
certificate issued by the Ohio board of regents under section 79
3333.51 of the Revised Code for completing a state-certified 80
internship. The amount of the credit shall equal the taxpayer's 81
distributive or proportionate share of five hundred dollars for 82
each tax credit certificate issued to the pass-through entity 83
during the taxable year. A taxpayer shall not be entitled to claim 84
the credit allowed under this section unless the pass-through 85
entity in which the taxpayer is an equity investor has obtained 86
the tax credit certificate. The credit shall be claimed for the 87
taxable year in which the certificate was issued and in the order 88
required under section 5747.98 of the Revised Code. 89

       (C) The tax commissioner may require that a taxpayer furnish 90
information as is necessary to support a claim for a credit under 91
this section, including, but not limited to, a copy of the tax 92
credit certificate issued by the Ohio board of regents under 93
section 3333.51 of the Revised Code and a copy of the internship 94
agreement entered into under that section. No credit shall be 95
allowed unless the information required by the commissioner is 96
provided. 97

       (D) A taxpayer that claims the credit allowed under this 98
section shall not claim the credit allowed under section 5751.54 99
of the Revised Code. 100

       Sec. 5747.82. (A) As used in this section: 101

       (1) "Full-time employment position" means a position of 102
employment for consideration for at least thirty-five hours per 103
week, or the rendering of any other standard of service generally 104
accepted by custom or specified by contract as full-time 105
employment. 106

       (2) "Pass-through entity" includes a sole proprietorship. 107

       (3) "State-certified internship" means an internship 108
certified by the Ohio board of regents under section 3333.51 of 109
the Revised Code. 110

       (B) There is hereby allowed a refundable credit against the 111
tax imposed by section 5747.02 of the Revised Code for a taxpayer 112
that is an equity investor in a pass-through entity that employs 113
in a full-time employment position for thirty-six consecutive 114
months a person whom the pass-through entity formerly employed as 115
an intern under a state-certified internship. The credit may be 116
claimed for each of the first two taxable years immediately 117
following the thirty-six consecutive months during which the 118
former intern was employed by the pass-through entity in a 119
full-time employment position. If the former intern was employed 120
by the pass-through entity for less than thirty-six consecutive 121
months, a taxpayer may claim the credit allowed under this section 122
only if the former intern voluntarily terminated employment or was 123
terminated by the pass-through entity for cause. The amount of the 124
credit shall equal one thousand dollars for each of the two 125
taxable years for each former intern employed in a full-time 126
employment position. A taxpayer shall claim the taxpayer's 127
proportionate or distributive share of the credit. The credit 128
shall be claimed in the order required under section 5747.98 of 129
the Revised Code. 130

       (C) A taxpayer that claims the credit allowed under this 131
section shall not claim the credit allowed under section 5751.55 132
of the Revised Code. 133

       Sec. 5747.98. (A) To provide a uniform procedure for 134
calculating the amount of tax due under section 5747.02 of the 135
Revised Code, a taxpayer shall claim any credits to which the 136
taxpayer is entitled in the following order: 137

       (1) The retirement income credit under division (B) of 138
section 5747.055 of the Revised Code; 139

       (2) The senior citizen credit under division (C) of section 140
5747.05 of the Revised Code; 141

       (3) The lump sum distribution credit under division (D) of 142
section 5747.05 of the Revised Code; 143

       (4) The dependent care credit under section 5747.054 of the 144
Revised Code; 145

       (5) The lump sum retirement income credit under division (C) 146
of section 5747.055 of the Revised Code; 147

       (6) The lump sum retirement income credit under division (D) 148
of section 5747.055 of the Revised Code; 149

       (7) The lump sum retirement income credit under division (E) 150
of section 5747.055 of the Revised Code; 151

       (8) The low-income credit under section 5747.056 of the 152
Revised Code; 153

       (9) The credit for displaced workers who pay for job training 154
under section 5747.27 of the Revised Code; 155

       (10) The campaign contribution credit under section 5747.29 156
of the Revised Code; 157

       (11) The twenty-dollar personal exemption credit under 158
section 5747.022 of the Revised Code; 159

       (12) The joint filing credit under division (G) of section 160
5747.05 of the Revised Code; 161

       (13) The nonresident credit under division (A) of section 162
5747.05 of the Revised Code; 163

       (14) The credit for a resident's out-of-state income under 164
division (B) of section 5747.05 of the Revised Code; 165

       (15) The credit for employers that enter into agreements with 166
child day-care centers under section 5747.34 of the Revised Code; 167

       (16) The credit for employers that reimburse employee child 168
care expenses under section 5747.36 of the Revised Code; 169

       (17) The credit for adoption of a minor child under section 170
5747.37 of the Revised Code; 171

       (18) The credit for purchases of lights and reflectors under 172
section 5747.38 of the Revised Code; 173

       (19) The job retention credit under division (B) of section 174
5747.058 of the Revised Code; 175

       (20) The credit for purchases of new manufacturing machinery 176
and equipment under section 5747.26 or section 5747.261 of the 177
Revised Code; 178

       (21) The second credit for purchases of new manufacturing 179
machinery and equipment and the credit for using Ohio coal under 180
section 5747.31 of the Revised Code; 181

       (22) The job training credit under section 5747.39 of the 182
Revised Code; 183

       (23) The enterprise zone credit under section 5709.66 of the 184
Revised Code; 185

       (24) The credit for the eligible costs associated with a 186
voluntary action under section 5747.32 of the Revised Code; 187

       (25) The credit for employers that establish on-site child 188
day-care centers under section 5747.35 of the Revised Code; 189

       (26) The ethanol plant investment credit under section 190
5747.75 of the Revised Code; 191

       (27) The credit for purchases of qualifying grape production 192
property under section 5747.28 of the Revised Code; 193

       (28) The export sales credit under section 5747.057 of the 194
Revised Code; 195

       (29) The credit for research and development and technology 196
transfer investors under section 5747.33 of the Revised Code; 197

       (30) The enterprise zone credits under section 5709.65 of the 198
Revised Code; 199

       (31) The research and development credit under section 200
5747.331 of the Revised Code; 201

       (32) The refundable credit for rehabilitating a historic 202
building under section 5747.76 of the Revised Code; 203

       (33) The refundable jobs creation credit under division (A) 204
of section 5747.058 of the Revised Code; 205

       (34) The refundable credit for taxes paid by a qualifying 206
entity granted under section 5747.059 of the Revised Code; 207

       (35) The refundable credits for taxes paid by a qualifying 208
pass-through entity granted under division (J) of section 5747.08 209
of the Revised Code; 210

       (36) The refundable credit for tax withheld under division 211
(B)(1) of section 5747.062 of the Revised Code; 212

       (37) The refundable credit under section 5747.80 of the 213
Revised Code for losses on loans made to the Ohio venture capital 214
program under sections 150.01 to 150.10 of the Revised Code; 215

       (38) The refundable credit for a state-certified internship 216
under section 5747.81 of the Revised Code; 217

       (39) The refundable credit for employing former interns under 218
section 5747.82 of the Revised Code. 219

       (B) For any credit, except the credits enumerated in 220
divisions (A)(32) to ~~(37)~~(39) of this section and the credit 221
granted under division (I) of section 5747.08 of the Revised Code, 222
the amount of the credit for a taxable year shall not exceed the 223
tax due after allowing for any other credit that precedes it in 224
the order required under this section. Any excess amount of a 225
particular credit may be carried forward if authorized under the 226
section creating that credit. Nothing in this chapter shall be 227
construed to allow a taxpayer to claim, directly or indirectly, a 228
credit more than once for a taxable year. 229

       Sec. 5751.54. (A) As used in this section, "state-certified 230
internship" means an internship certified by the Ohio board of 231
regents under section 3333.51 of the Revised Code. 232

       (B) For tax periods beginning on or after January 1, 2008, a 233
refundable credit may be claimed under this chapter by a taxpayer 234
that obtains a tax credit certificate issued by the Ohio board of 235
regents under section 3333.51 of the Revised Code for completing a 236
state-certified internship. The amount of the credit shall equal 237
five hundred dollars for each tax credit certificate issued to the 238
taxpayer during the calendar year. A taxpayer shall not be 239
entitled to claim the credit allowed under this section unless the 240
taxpayer has obtained the tax credit certificate. The credit shall 241
be claimed for the calendar year in which the certificate was 242
issued and in the order required under section 5751.98 of the 243
Revised Code. 244

       (C) The tax commissioner may require that a taxpayer furnish 245
information as is necessary to support a claim for a credit under 246
this section, including, but not limited to, a copy of the tax 247
credit certificate issued by the Ohio board of regents under 248
section 3333.51 of the Revised Code and a copy of the internship 249
agreement entered into under that section. No credit shall be 250
allowed unless the information required by the commissioner is 251
provided. 252

       (D) Equity investors in a taxpayer that claims the credit 253
allowed under this section shall not claim the credit allowed 254
under section 5747.81 of the Revised Code. 255

       Sec. 5751.55. (A) As used in this section: 256

       (1) "Full-time employment position" means a position of 257
employment for consideration for at least thirty-five hours per 258
week, or the rendering of any other standard of service generally 259
accepted by custom or specified by contract as full-time 260
employment. 261

       (2) "State-certified internship" means an internship 262
certified by the Ohio board of regents under section 3333.51 of 263
the Revised Code. 264

       (B) A refundable credit may be claimed under this chapter by 265
a taxpayer that, during the calendar year immediately preceding 266
the tax period, employed in a full-time employment position for 267
thirty-six consecutive months a person whom the taxpayer formerly 268
employed as an intern under a state-certified internship. The 269
credit may be claimed for each of the first two tax periods 270
immediately following the thirty-six consecutive months during 271
which the former intern was employed by the taxpayer in a 272
full-time employment position. If the former intern was employed 273
by the taxpayer for less than thirty-six consecutive months, a 274
taxpayer may claim the credit allowed under this section only if 275
the former intern voluntarily terminated employment or was 276
terminated by the taxpayer for cause. The amount of the credit 277
shall equal one thousand dollars for each of the two tax periods 278
for each former intern employed in a full-time employment 279
position. The credit shall be claimed in the order required under 280
section 5751.98 of the Revised Code. 281

       (C) Equity investors in a taxpayer that claims the credit 282
allowed under this section shall not claim the credit allowed 283
under section 5747.82 of the Revised Code. 284

       Sec. 5751.98. (A) To provide a uniform procedure for 285
calculating the amount of tax due under this chapter, a taxpayer 286
shall claim any credits to which it is entitled in the following 287
order: 288

        (1) The nonrefundable jobs retention credit under division 289
(B) of section 5751.50 of the Revised Code; 290

        (2) The nonrefundable credit for qualified research expenses 291
under division (B) of section 5751.51 of the Revised Code; 292

        (3) The nonrefundable credit for a borrower's qualified 293
research and development loan payments under division (B) of 294
section 5751.52 of the Revised Code; 295

        (4) The nonrefundable credit for calendar years 2010 to 2029 296
for unused net operating losses under division (B) of section 297
5751.53 of the Revised Code; 298

        (5) The refundable credit for calendar year 2030 for unused 299
net operating losses under division (C) of section 5751.53 of the 300
Revised Code; 301

        (6) The refundable jobs creation credit under division (A) of 302
section 5751.50 of the Revised Code; 303

       (7) The refundable credit for a state-certified internship 304
under section 5751.54 of the Revised Code; 305

        (8) The refundable credit for employing former interns under 306
section 5751.55 of the Revised Code. 307

        (B) For any credit except the ~~credit~~credits enumerated in 308
~~division~~divisions (A)~~(4)~~(5) to (8) of this section, the amount of 309
the credit for a tax period shall not exceed the tax due after 310
allowing for any other credit that precedes it in the order 311
required under this section. Any excess amount of a particular 312
credit may be carried forward if authorized under the section 313
creating the credit. 314

       Section 2. That existing sections 5747.98 and 5751.98 of the 315
Revised Code are hereby repealed. 316

Section 1. That sections 5747.98 and 5751.98 be amended and	7
sections 3333.51, 5747.81, 5747.82, 5751.54, and 5751.55 of the	8
Revised Code be enacted to read as follows:	9

Sec. 3333.51. (A) As used in this section, "Ohio institution	10
of higher education" means all of the following:	11

(1) An institution of higher education, as defined in section	12
3345.12 of the Revised Code;	13

(2) An institution authorized by the Ohio board of regents	14
under Chapter 1713. of the Revised Code to grant degrees and that	15
is accredited by the appropriate regional, and, when appropriate,	16
professional, accrediting associations within whose jurisdiction	17
it falls;	18

(3) Private career schools holding program authorizations	19
issued by the state board of career colleges and schools under	20
division (C) of section 3332.05 of the Revised Code;	21

(4) Private institutions exempt from regulation under Chapter	22
3332. of the Revised Code as prescribed in section 3333.046 of the	23
Revised Code.	24

(B) For the purpose of providing students in Ohio	25
institutions of higher education with practical work experience	26
and for the purpose of fostering long-term relationships between	27
those students and Ohio employers, the Ohio board of regents may	28
certify internships to be conducted between Ohio businesses and	29
students attending Ohio institutions of higher education. The	30
board shall adopt rules establishing criteria for certifying those	31
internships. The rules shall condition certification of an	32
internship on the internship being at least ten consecutive weeks	33
in duration, with each week consisting of at least twenty hours of	34
employment, and the intern receiving from the business total	35
compensation equal to or exceeding two thousand dollars. The rules	36
also shall require that the terms and conditions of an internship	37
between a business and a student be memorialized in a written	38
agreement between the two parties. An agreement shall, at a	39
minimum, include:	40

(1) Biographical information on the student, including, but	41
not limited to, the student's Ohio institution of higher	42
education, date of birth, major, and expected date of graduation;	43

(2) A description of the business, including, but not limited	44
to, the business' location, number of Ohio employees, and business	45
activities;	46

(3) A description of the terms and conditions of the	47
internship, including, but not limited to, a description of the	48
tasks that the student is expected to complete; the amount of	49
compensation to be paid to the student, which shall total at least	50
two thousand dollars; the duration of the internship; and the	51
hours of employment, which shall satisfy the minimum duration and	52
hour requirements specified in this section;	53

(4) An agreement on the part of both the business and the	54
student to evaluate the internship at the conclusion of the	55
internship and periodically during the term of the internship.	56

Both the student and a representative of the business shall	57
sign the agreement.	58

(C) Upon application, the Ohio board of regents shall issue a	59
tax credit certificate to a business that participates in an	60
internship certified by the board that the business successfully	61
completes pursuant to the agreement entered into under this	62
section. The tax credit certificate entitles the business to claim	63
the tax credit allowed under section 5747.81 or 5751.54 of the	64
Revised Code, provided that all the terms and conditions	65
prescribed under this section and those sections for receiving the	66
credit are satisfied. The application shall be in a form	67
prescribed by the board and shall include a copy of the agreement	68
entered into under this section.	69

(2) "State-certified internship" means an internship	72
certified by the Ohio board of regents under section 3333.51 of	73
the Revised Code.	74

(B) For taxable years beginning in 2007 or thereafter, there	75
is hereby allowed a refundable credit against the tax imposed by	76
section 5747.02 of the Revised Code for a taxpayer that is an	77
equity investor in a pass-through entity that obtains a tax credit	78
certificate issued by the Ohio board of regents under section	79
3333.51 of the Revised Code for completing a state-certified	80
internship. The amount of the credit shall equal the taxpayer's	81
distributive or proportionate share of five hundred dollars for	82
each tax credit certificate issued to the pass-through entity	83
during the taxable year. A taxpayer shall not be entitled to claim	84
the credit allowed under this section unless the pass-through	85
entity in which the taxpayer is an equity investor has obtained	86
the tax credit certificate. The credit shall be claimed for the	87
taxable year in which the certificate was issued and in the order	88
required under section 5747.98 of the Revised Code.	89

(C) The tax commissioner may require that a taxpayer furnish	90
information as is necessary to support a claim for a credit under	91
this section, including, but not limited to, a copy of the tax	92
credit certificate issued by the Ohio board of regents under	93
section 3333.51 of the Revised Code and a copy of the internship	94
agreement entered into under that section. No credit shall be	95
allowed unless the information required by the commissioner is	96
provided.	97

(D) A taxpayer that claims the credit allowed under this	98
section shall not claim the credit allowed under section 5751.54	99
of the Revised Code.	100

(1) "Full-time employment position" means a position of	102
employment for consideration for at least thirty-five hours per	103
week, or the rendering of any other standard of service generally	104
accepted by custom or specified by contract as full-time	105
employment.	106

(3) "State-certified internship" means an internship	108
certified by the Ohio board of regents under section 3333.51 of	109
the Revised Code.	110

(B) There is hereby allowed a refundable credit against the	111
tax imposed by section 5747.02 of the Revised Code for a taxpayer	112
that is an equity investor in a pass-through entity that employs	113
in a full-time employment position for thirty-six consecutive	114
months a person whom the pass-through entity formerly employed as	115
an intern under a state-certified internship. The credit may be	116
claimed for each of the first two taxable years immediately	117
following the thirty-six consecutive months during which the	118
former intern was employed by the pass-through entity in a	119
full-time employment position. If the former intern was employed	120
by the pass-through entity for less than thirty-six consecutive	121
months, a taxpayer may claim the credit allowed under this section	122
only if the former intern voluntarily terminated employment or was	123
terminated by the pass-through entity for cause. The amount of the	124
credit shall equal one thousand dollars for each of the two	125
taxable years for each former intern employed in a full-time	126
employment position. A taxpayer shall claim the taxpayer's	127
proportionate or distributive share of the credit. The credit	128
shall be claimed in the order required under section 5747.98 of	129
the Revised Code.	130

(C) A taxpayer that claims the credit allowed under this	131
section shall not claim the credit allowed under section 5751.55	132
of the Revised Code.	133

Sec. 5747.98. (A) To provide a uniform procedure for	134
calculating the amount of tax due under section 5747.02 of the	135
Revised Code, a taxpayer shall claim any credits to which the	136
taxpayer is entitled in the following order:	137

(1) The retirement income credit under division (B) of	138
section 5747.055 of the Revised Code;	139

(2) The senior citizen credit under division (C) of section	140
5747.05 of the Revised Code;	141

(3) The lump sum distribution credit under division (D) of	142
section 5747.05 of the Revised Code;	143

(4) The dependent care credit under section 5747.054 of the	144
Revised Code;	145

(5) The lump sum retirement income credit under division (C)	146
of section 5747.055 of the Revised Code;	147

(6) The lump sum retirement income credit under division (D)	148
of section 5747.055 of the Revised Code;	149

(7) The lump sum retirement income credit under division (E)	150
of section 5747.055 of the Revised Code;	151

(8) The low-income credit under section 5747.056 of the	152
Revised Code;	153