As Introduced

128th General Assembly
Regular Session
2009-2010
S. B. No. 177


Senators Seitz, Cates 

Cosponsors: Senators Grendell, Hughes, Patton, Goodman, Niehaus, Smith, Turner, Sawyer 

A BILL
To amend section 5747.01 of the Revised Code and to 1
amend Section 265.10 of Am. Sub. H.B. 1 of the 2
128th General Assembly to partially decouple Ohio 3
law from recent federal tax law changes, and to 4
amend the version of section 5747.01 of the 5
Revised Code that is scheduled to take effect 6
January 1, 2010, to continue the provisions of 7
this act on and after that effective date, and to 8
make appropriations.9


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

       Section 1. That section 5747.01 of the Revised Code be 10
amended to read as follows:11

       Sec. 5747.01.  Except as otherwise expressly provided or12
clearly appearing from the context, any term used in this chapter 13
that is not otherwise defined in this section has the same meaning 14
as when used in a comparable context in the laws of the United15
States relating to federal income taxes or if not used in a 16
comparable context in those laws, has the same meaning as in 17
section 5733.40 of the Revised Code. Any reference in this chapter 18
to the Internal Revenue Code includes other laws of the United 19
States relating to federal income taxes.20

       As used in this chapter:21

       (A) "Adjusted gross income" or "Ohio adjusted gross income"22
means federal adjusted gross income, as defined and used in the23
Internal Revenue Code, adjusted as provided in this section:24

       (1) Add interest or dividends on obligations or securities of 25
any state or of any political subdivision or authority of any26
state, other than this state and its subdivisions and authorities.27

       (2) Add interest or dividends on obligations of any28
authority, commission, instrumentality, territory, or possession29
of the United States to the extent that the interest or dividends30
are exempt from federal income taxes but not from state income31
taxes.32

       (3) Deduct interest or dividends on obligations of the United 33
States and its territories and possessions or of any authority, 34
commission, or instrumentality of the United States to the extent35
that the interest or dividends are included in federal adjusted 36
gross income but exempt from state income taxes under the laws of 37
the United States.38

       (4) Deduct disability and survivor's benefits to the extent39
included in federal adjusted gross income.40

       (5) Deduct benefits under Title II of the Social Security Act 41
and tier 1 railroad retirement benefits to the extent included in 42
federal adjusted gross income under section 86 of the Internal43
Revenue Code.44

       (6) In the case of a taxpayer who is a beneficiary of a trust 45
that makes an accumulation distribution as defined in section 665 46
of the Internal Revenue Code, add, for the beneficiary's taxable 47
years beginning before 2002, the portion, if any, of such 48
distribution that does not exceed the undistributed net income of 49
the trust for the three taxable years preceding the taxable year 50
in which the distribution is made to the extent that the portion 51
was not included in the trust's taxable income for any of the 52
trust's taxable years beginning in 2002 or thereafter.53
"Undistributed net income of a trust" means the taxable income of54
the trust increased by (a)(i) the additions to adjusted gross55
income required under division (A) of this section and (ii) the56
personal exemptions allowed to the trust pursuant to section57
642(b) of the Internal Revenue Code, and decreased by (b)(i) the58
deductions to adjusted gross income required under division (A) of59
this section, (ii) the amount of federal income taxes attributable60
to such income, and (iii) the amount of taxable income that has61
been included in the adjusted gross income of a beneficiary by62
reason of a prior accumulation distribution. Any undistributed net63
income included in the adjusted gross income of a beneficiary64
shall reduce the undistributed net income of the trust commencing65
with the earliest years of the accumulation period.66

       (7) Deduct the amount of wages and salaries, if any, not67
otherwise allowable as a deduction but that would have been68
allowable as a deduction in computing federal adjusted gross69
income for the taxable year, had the targeted jobs credit allowed70
and determined under sections 38, 51, and 52 of the Internal71
Revenue Code not been in effect.72

       (8) Deduct any interest or interest equivalent on public73
obligations and purchase obligations to the extent that the74
interest or interest equivalent is included in federal adjusted75
gross income.76

       (9) Add any loss or deduct any gain resulting from the sale,77
exchange, or other disposition of public obligations to the extent78
that the loss has been deducted or the gain has been included in79
computing federal adjusted gross income.80

       (10) Deduct or add amounts, as provided under section81
5747.70 of the Revised Code, related to contributions to variable82
college savings program accounts made or tuition units purchased83
pursuant to Chapter 3334. of the Revised Code.84

       (11)(a) Deduct, to the extent not otherwise allowable as a85
deduction or exclusion in computing federal or Ohio adjusted gross86
income for the taxable year, the amount the taxpayer paid during87
the taxable year for medical care insurance and qualified88
long-term care insurance for the taxpayer, the taxpayer's spouse,89
and dependents. No deduction for medical care insurance under90
division (A)(11) of this section shall be allowed either to any91
taxpayer who is eligible to participate in any subsidized health92
plan maintained by any employer of the taxpayer or of the93
taxpayer's spouse, or to any taxpayer who is entitled to, or on94
application would be entitled to, benefits under part A of Title95
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.96
301, as amended. For the purposes of division (A)(11)(a) of this97
section, "subsidized health plan" means a health plan for which98
the employer pays any portion of the plan's cost. The deduction99
allowed under division (A)(11)(a) of this section shall be the net100
of any related premium refunds, related premium reimbursements, or101
related insurance premium dividends received during the taxable102
year.103

       (b) Deduct, to the extent not otherwise deducted or excluded104
in computing federal or Ohio adjusted gross income during the105
taxable year, the amount the taxpayer paid during the taxable106
year, not compensated for by any insurance or otherwise, for107
medical care of the taxpayer, the taxpayer's spouse, and108
dependents, to the extent the expenses exceed seven and one-half109
per cent of the taxpayer's federal adjusted gross income.110

       (c) For purposes of division (A)(11) of this section,111
"medical care" has the meaning given in section 213 of the112
Internal Revenue Code, subject to the special rules, limitations,113
and exclusions set forth therein, and "qualified long-term care"114
has the same meaning given in section 7702B(c) of the Internal115
Revenue Code.116

       (12)(a) Deduct any amount included in federal adjusted gross117
income solely because the amount represents a reimbursement or118
refund of expenses that in any year the taxpayer had deducted as119
an itemized deduction pursuant to section 63 of the Internal120
Revenue Code and applicable United States department of the121
treasury regulations. The deduction otherwise allowed under122
division (A)(12)(a) of this section shall be reduced to the extent123
the reimbursement is attributable to an amount the taxpayer124
deducted under this section in any taxable year.125

       (b) Add any amount not otherwise included in Ohio adjusted126
gross income for any taxable year to the extent that the amount is127
attributable to the recovery during the taxable year of any amount128
deducted or excluded in computing federal or Ohio adjusted gross129
income in any taxable year.130

       (13) Deduct any portion of the deduction described in section 131
1341(a)(2) of the Internal Revenue Code, for repaying previously 132
reported income received under a claim of right, that meets both 133
of the following requirements:134

       (a) It is allowable for repayment of an item that was135
included in the taxpayer's adjusted gross income for a prior136
taxable year and did not qualify for a credit under division (A)137
or (B) of section 5747.05 of the Revised Code for that year;138

       (b) It does not otherwise reduce the taxpayer's adjusted139
gross income for the current or any other taxable year.140

       (14) Deduct an amount equal to the deposits made to, and net141
investment earnings of, a medical savings account during the142
taxable year, in accordance with section 3924.66 of the Revised143
Code. The deduction allowed by division (A)(14) of this section144
does not apply to medical savings account deposits and earnings145
otherwise deducted or excluded for the current or any other146
taxable year from the taxpayer's federal adjusted gross income.147

       (15)(a) Add an amount equal to the funds withdrawn from a148
medical savings account during the taxable year, and the net149
investment earnings on those funds, when the funds withdrawn were150
used for any purpose other than to reimburse an account holder151
for, or to pay, eligible medical expenses, in accordance with152
section 3924.66 of the Revised Code;153

       (b) Add the amounts distributed from a medical savings154
account under division (A)(2) of section 3924.68 of the Revised155
Code during the taxable year.156

       (16) Add any amount claimed as a credit under section157
5747.059 of the Revised Code to the extent that such amount158
satisfies either of the following:159

       (a) The amount was deducted or excluded from the computation160
of the taxpayer's federal adjusted gross income as required to be161
reported for the taxpayer's taxable year under the Internal162
Revenue Code;163

       (b) The amount resulted in a reduction of the taxpayer's164
federal adjusted gross income as required to be reported for any165
of the taxpayer's taxable years under the Internal Revenue Code.166

       (17) Deduct the amount contributed by the taxpayer to an167
individual development account program established by a county168
department of job and family services pursuant to sections 329.11169
to 329.14 of the Revised Code for the purpose of matching funds170
deposited by program participants. On request of the tax171
commissioner, the taxpayer shall provide any information that, in172
the tax commissioner's opinion, is necessary to establish the173
amount deducted under division (A)(17) of this section.174

       (18) Beginning in taxable year 2001 but not for any taxable 175
year beginning after December 31, 2005, if the taxpayer is married176
and files a joint return and the combined federal adjusted gross 177
income of the taxpayer and the taxpayer's spouse for the taxable 178
year does not exceed one hundred thousand dollars, or if the 179
taxpayer is single and has a federal adjusted gross income for the180
taxable year not exceeding fifty thousand dollars, deduct amounts 181
paid during the taxable year for qualified tuition and fees paid 182
to an eligible institution for the taxpayer, the taxpayer's 183
spouse, or any dependent of the taxpayer, who is a resident of 184
this state and is enrolled in or attending a program that185
culminates in a degree or diploma at an eligible institution. The 186
deduction may be claimed only to the extent that qualified tuition 187
and fees are not otherwise deducted or excluded for any taxable 188
year from federal or Ohio adjusted gross income. The deduction may 189
not be claimed for educational expenses for which the taxpayer 190
claims a credit under section 5747.27 of the Revised Code.191

       (19) Add any reimbursement received during the taxable year192
of any amount the taxpayer deducted under division (A)(18) of this193
section in any previous taxable year to the extent the amount is194
not otherwise included in Ohio adjusted gross income.195

       (20)(a)(i) Add five-sixths of the amount of depreciation196
expense allowed by subsection (k) of section 168 of the Internal197
Revenue Code, including the taxpayer's proportionate or198
distributive share of the amount of depreciation expense allowed199
by that subsection to a pass-through entity in which the taxpayer200
has a direct or indirect ownership interest.201

       (ii) Add five-sixths of the amount of qualifying section 179 202
depreciation expense, including a person's proportionate or 203
distributive share of the amount of qualifying section 179 204
depreciation expense allowed to any pass-through entity in which 205
the person has a direct or indirect ownership. For the purposes of 206
this division, "qualifying section 179 depreciation expense" means 207
the difference between (I) the amount of depreciation expense 208
directly or indirectly allowed to the taxpayer under section 179 209
of the Internal Revenue Code, and (II) the amount of depreciation 210
expense directly or indirectly allowed to the taxpayer under 211
section 179 of the Internal Revenue Code as that section existed 212
on December 31, 2002.213

       The tax commissioner, under procedures established by the 214
commissioner, may waive the add-backs related to a pass-through 215
entity if the taxpayer owns, directly or indirectly, less than 216
five per cent of the pass-through entity.217

       (b) Nothing in division (A)(20) of this section shall be218
construed to adjust or modify the adjusted basis of any asset.219

       (c) To the extent the add-back required under division220
(A)(20)(a) of this section is attributable to property generating221
nonbusiness income or loss allocated under section 5747.20 of the222
Revised Code, the add-back shall be sitused to the same location223
as the nonbusiness income or loss generated by the property for224
the purpose of determining the credit under division (A) of225
section 5747.05 of the Revised Code. Otherwise, the add-back shall 226
be apportioned, subject to one or more of the four alternative 227
methods of apportionment enumerated in section 5747.21 of the 228
Revised Code.229

       (d) For the purposes of division (A) of this section, net 230
operating loss carryback and carryforward shall not include 231
five-sixths of the allowance of any net operating loss deduction 232
carryback or carryforward to the taxable year to the extent such 233
loss resulted from depreciation allowed by section 168(k) of the 234
Internal Revenue Code and by the qualifying section 179 235
depreciation expense amount.236

       (21)(a) If the taxpayer was required to add an amount under237
division (A)(20)(a) of this section for a taxable year, deduct238
one-fifth of the amount so added for each of the five succeeding239
taxable years.240

       (b) If the amount deducted under division (A)(21)(a) of this241
section is attributable to an add-back allocated under division242
(A)(20)(c) of this section, the amount deducted shall be sitused243
to the same location. Otherwise, the add-back shall be apportioned 244
using the apportionment factors for the taxable year in which the 245
deduction is taken, subject to one or more of the four alternative 246
methods of apportionment enumerated in section 5747.21 of the 247
Revised Code.248

       (c) No deduction is available under division (A)(21)(a) of 249
this section with regard to any depreciation allowed by section 250
168(k) of the Internal Revenue Code and by the qualifying section 251
179 depreciation expense amount to the extent that such 252
depreciation resulted in or increased a federal net operating loss 253
carryback or carryforward to a taxable year to which division 254
(A)(20)(d) of this section does not apply.255

       (22) Deduct, to the extent not otherwise deducted or excluded 256
in computing federal or Ohio adjusted gross income for the taxable 257
year, the amount the taxpayer received during the taxable year as 258
reimbursement for life insurance premiums under section 5919.31 of 259
the Revised Code.260

        (23) Deduct, to the extent not otherwise deducted or excluded 261
in computing federal or Ohio adjusted gross income for the taxable 262
year, the amount the taxpayer received during the taxable year as 263
a death benefit paid by the adjutant general under section 5919.33 264
of the Revised Code.265

       (24) Deduct, to the extent included in federal adjusted gross 266
income and not otherwise allowable as a deduction or exclusion in 267
computing federal or Ohio adjusted gross income for the taxable 268
year, military pay and allowances received by the taxpayer during 269
the taxable year for active duty service in the United States 270
army, air force, navy, marine corps, or coast guard or reserve 271
components thereof or the national guard. The deduction may not be 272
claimed for military pay and allowances received by the taxpayer 273
while the taxpayer is stationed in this state.274

       (25) Deduct, to the extent not otherwise allowable as a 275
deduction or exclusion in computing federal or Ohio adjusted gross 276
income for the taxable year and not otherwise compensated for by 277
any other source, the amount of qualified organ donation expenses 278
incurred by the taxpayer during the taxable year, not to exceed 279
ten thousand dollars. A taxpayer may deduct qualified organ 280
donation expenses only once for all taxable years beginning with 281
taxable years beginning in 2007.282

       For the purposes of division (A)(25) of this section:283

        (a) "Human organ" means all or any portion of a human liver, 284
pancreas, kidney, intestine, or lung, and any portion of human 285
bone marrow.286

        (b) "Qualified organ donation expenses" means travel 287
expenses, lodging expenses, and wages and salary forgone by a 288
taxpayer in connection with the taxpayer's donation, while living, 289
of one or more of the taxpayer's human organs to another human 290
being.291

       (26) Deduct, to the extent not otherwise deducted or excluded 292
in computing federal or Ohio adjusted gross income for the taxable 293
year, amounts received by the taxpayer as retired military 294
personnel pay for service in the United States army, navy, air 295
force, coast guard, or marine corps or reserve components thereof, 296
or the national guard, or received by the surviving spouse or 297
former spouse of such a taxpayer under the survivor benefit plan 298
on account of such a taxpayer's death. If the taxpayer receives 299
income on account of retirement paid under the federal civil 300
service retirement system or federal employees retirement system, 301
or under any successor retirement program enacted by the congress 302
of the United States that is established and maintained for 303
retired employees of the United States government, and such 304
retirement income is based, in whole or in part, on credit for 305
the taxpayer's military service, the deduction allowed under this 306
division shall include only that portion of such retirement 307
income that is attributable to the taxpayer's military service, 308
to the extent that portion of such retirement income is otherwise 309
included in federal adjusted gross income and is not otherwise 310
deducted under this section. Any amount deducted under division 311
(A)(26) of this section is not included in a taxpayer's 312
adjusted gross income for the purposes of section 5747.055 of 313
the Revised Code. No amount may be deducted under division 314
(A)(26) of this section on the basis of which a credit was 315
claimed under section 5747.055 of the Revised Code.316

       (27) Deduct, to the extent not otherwise deducted or excluded 317
in computing federal or Ohio adjusted gross income for the taxable 318
year, the amount the taxpayer received during the taxable year 319
from the military injury relief fund created in section 5101.98 of 320
the Revised Code.321

       (28) For the taxpayer's taxable year beginning in 2009, add 322
any amount excluded from federal adjusted gross income pursuant to 323
section 85(c) of the Internal Revenue Code.324

       (29) Add any amount by which federal adjusted gross income is 325
reduced because of an election under section 172(b)(1)(H) of the 326
Internal Revenue Code as amended by the "American Recovery and 327
Reinvestment Act of 2009," 123 Stat. 115.328

       (30)(a) Add any amount not included in federal adjusted 329
gross income for the taxable year because of an election under 330
section 108(i) of the Internal Revenue Code.331

        (b) Deduct any amount included in federal adjusted gross 332
income for the taxable year because of an election under section 333
108(i) of the Internal Revenue Code. 334

       (B) "Business income" means income, including gain or loss,335
arising from transactions, activities, and sources in the regular336
course of a trade or business and includes income, gain, or loss337
from real property, tangible property, and intangible property if338
the acquisition, rental, management, and disposition of the339
property constitute integral parts of the regular course of a340
trade or business operation. "Business income" includes income,341
including gain or loss, from a partial or complete liquidation of342
a business, including, but not limited to, gain or loss from the343
sale or other disposition of goodwill.344

       (C) "Nonbusiness income" means all income other than business 345
income and may include, but is not limited to, compensation, rents 346
and royalties from real or tangible personal property, capital 347
gains, interest, dividends and distributions, patent or copyright 348
royalties, or lottery winnings, prizes, and awards.349

       (D) "Compensation" means any form of remuneration paid to an350
employee for personal services.351

       (E) "Fiduciary" means a guardian, trustee, executor,352
administrator, receiver, conservator, or any other person acting353
in any fiduciary capacity for any individual, trust, or estate.354

       (F) "Fiscal year" means an accounting period of twelve months 355
ending on the last day of any month other than December.356

       (G) "Individual" means any natural person.357

       (H) "Internal Revenue Code" means the "Internal Revenue Code358
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.359

       (I) "Resident" means any of the following, provided that360
division (I)(3) of this section applies only to taxable years of a361
trust beginning in 2002 or thereafter:362

       (1) An individual who is domiciled in this state, subject to363
section 5747.24 of the Revised Code;364

       (2) The estate of a decedent who at the time of death was365
domiciled in this state. The domicile tests of section 5747.24 of366
the Revised Code are not controlling for purposes of division 367
(I)(2) of this section.368

       (3) A trust that, in whole or part, resides in this state. If369
only part of a trust resides in this state, the trust is a370
resident only with respect to that part.371

       For the purposes of division (I)(3) of this section:372

       (a) A trust resides in this state for the trust's current373
taxable year to the extent, as described in division (I)(3)(d) of374
this section, that the trust consists directly or indirectly, in 375
whole or in part, of assets, net of any related liabilities, that 376
were transferred, or caused to be transferred, directly or 377
indirectly, to the trust by any of the following:378

        (i) A person, a court, or a governmental entity or 379
instrumentality on account of the death of a decedent, but only if 380
the trust is described in division (I)(3)(e)(i) or (ii) of this 381
section;382

       (ii) A person who was domiciled in this state for the 383
purposes of this chapter when the person directly or indirectly 384
transferred assets to an irrevocable trust, but only if at least 385
one of the trust's qualifying beneficiaries is domiciled in this 386
state for the purposes of this chapter during all or some portion 387
of the trust's current taxable year;388

       (iii) A person who was domiciled in this state for the389
purposes of this chapter when the trust document or instrument or390
part of the trust document or instrument became irrevocable, but391
only if at least one of the trust's qualifying beneficiaries is a 392
resident domiciled in this state for the purposes of this chapter393
during all or some portion of the trust's current taxable year. If 394
a trust document or instrument became irrevocable upon the death 395
of a person who at the time of death was domiciled in this state 396
for purposes of this chapter, that person is a person described in 397
division (I)(3)(a)(iii) of this section.398

        (b) A trust is irrevocable to the extent that the transferor 399
is not considered to be the owner of the net assets of the trust 400
under sections 671 to 678 of the Internal Revenue Code.401

       (c) With respect to a trust other than a charitable lead402
trust, "qualifying beneficiary" has the same meaning as "potential403
current beneficiary" as defined in section 1361(e)(2) of the404
Internal Revenue Code, and with respect to a charitable lead trust405
"qualifying beneficiary" is any current, future, or contingent406
beneficiary, but with respect to any trust "qualifying407
beneficiary" excludes a person or a governmental entity or408
instrumentality to any of which a contribution would qualify for409
the charitable deduction under section 170 of the Internal Revenue410
Code.411

        (d) For the purposes of division (I)(3)(a) of this section,412
the extent to which a trust consists directly or indirectly, in413
whole or in part, of assets, net of any related liabilities, that414
were transferred directly or indirectly, in whole or part, to the415
trust by any of the sources enumerated in that division shall be416
ascertained by multiplying the fair market value of the trust's417
assets, net of related liabilities, by the qualifying ratio, which418
shall be computed as follows:419

        (i) The first time the trust receives assets, the numerator420
of the qualifying ratio is the fair market value of those assets421
at that time, net of any related liabilities, from sources422
enumerated in division (I)(3)(a) of this section. The denominator423
of the qualifying ratio is the fair market value of all the424
trust's assets at that time, net of any related liabilities.425

        (ii) Each subsequent time the trust receives assets, a426
revised qualifying ratio shall be computed. The numerator of the427
revised qualifying ratio is the sum of (1) the fair market value428
of the trust's assets immediately prior to the subsequent429
transfer, net of any related liabilities, multiplied by the430
qualifying ratio last computed without regard to the subsequent431
transfer, and (2) the fair market value of the subsequently432
transferred assets at the time transferred, net of any related433
liabilities, from sources enumerated in division (I)(3)(a) of this434
section. The denominator of the revised qualifying ratio is the435
fair market value of all the trust's assets immediately after the436
subsequent transfer, net of any related liabilities.437

       (iii) Whether a transfer to the trust is by or from any of 438
the sources enumerated in division (I)(3)(a) of this section shall 439
be ascertained without regard to the domicile of the trust's 440
beneficiaries.441

        (e) For the purposes of division (I)(3)(a)(i) of this442
section:443

        (i) A trust is described in division (I)(3)(e)(i) of this444
section if the trust is a testamentary trust and the testator of445
that testamentary trust was domiciled in this state at the time of446
the testator's death for purposes of the taxes levied under447
Chapter 5731. of the Revised Code.448

        (ii) A trust is described in division (I)(3)(e)(ii) of this449
section if the transfer is a qualifying transfer described in any450
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an451
irrevocable inter vivos trust, and at least one of the trust's452
qualifying beneficiaries is domiciled in this state for purposes453
of this chapter during all or some portion of the trust's current454
taxable year.455

        (f) For the purposes of division (I)(3)(e)(ii) of this456
section, a "qualifying transfer" is a transfer of assets, net of457
any related liabilities, directly or indirectly to a trust, if the458
transfer is described in any of the following:459

        (i) The transfer is made to a trust, created by the decedent 460
before the decedent's death and while the decedent was domiciled 461
in this state for the purposes of this chapter, and, prior to the 462
death of the decedent, the trust became irrevocable while the 463
decedent was domiciled in this state for the purposes of this 464
chapter.465

        (ii) The transfer is made to a trust to which the decedent,466
prior to the decedent's death, had directly or indirectly467
transferred assets, net of any related liabilities, while the468
decedent was domiciled in this state for the purposes of this469
chapter, and prior to the death of the decedent the trust became470
irrevocable while the decedent was domiciled in this state for the471
purposes of this chapter.472

        (iii) The transfer is made on account of a contractual473
relationship existing directly or indirectly between the474
transferor and either the decedent or the estate of the decedent475
at any time prior to the date of the decedent's death, and the476
decedent was domiciled in this state at the time of death for477
purposes of the taxes levied under Chapter 5731. of the Revised478
Code.479

        (iv) The transfer is made to a trust on account of a480
contractual relationship existing directly or indirectly between481
the transferor and another person who at the time of the482
decedent's death was domiciled in this state for purposes of this483
chapter.484

        (v) The transfer is made to a trust on account of the will of 485
a testator.486

        (vi) The transfer is made to a trust created by or caused to 487
be created by a court, and the trust was directly or indirectly488
created in connection with or as a result of the death of an489
individual who, for purposes of the taxes levied under Chapter490
5731. of the Revised Code, was domiciled in this state at the time491
of the individual's death.492

       (g) The tax commissioner may adopt rules to ascertain the493
part of a trust residing in this state.494

       (J) "Nonresident" means an individual or estate that is not a 495
resident. An individual who is a resident for only part of a496
taxable year is a nonresident for the remainder of that taxable497
year.498

       (K) "Pass-through entity" has the same meaning as in section499
5733.04 of the Revised Code.500

       (L) "Return" means the notifications and reports required to501
be filed pursuant to this chapter for the purpose of reporting the502
tax due and includes declarations of estimated tax when so503
required.504

       (M) "Taxable year" means the calendar year or the taxpayer's505
fiscal year ending during the calendar year, or fractional part506
thereof, upon which the adjusted gross income is calculated507
pursuant to this chapter.508

       (N) "Taxpayer" means any person subject to the tax imposed by 509
section 5747.02 of the Revised Code or any pass-through entity510
that makes the election under division (D) of section 5747.08 of511
the Revised Code.512

       (O) "Dependents" means dependents as defined in the Internal513
Revenue Code and as claimed in the taxpayer's federal income tax514
return for the taxable year or which the taxpayer would have been515
permitted to claim had the taxpayer filed a federal income tax516
return.517

       (P) "Principal county of employment" means, in the case of a518
nonresident, the county within the state in which a taxpayer519
performs services for an employer or, if those services are520
performed in more than one county, the county in which the major521
portion of the services are performed.522

       (Q) As used in sections 5747.50 to 5747.55 of the Revised523
Code:524

       (1) "Subdivision" means any county, municipal corporation,525
park district, or township.526

       (2) "Essential local government purposes" includes all527
functions that any subdivision is required by general law to528
exercise, including like functions that are exercised under a529
charter adopted pursuant to the Ohio Constitution.530

       (R) "Overpayment" means any amount already paid that exceeds531
the figure determined to be the correct amount of the tax.532

       (S) "Taxable income" or "Ohio taxable income" applies only to 533
estates and trusts, and means federal taxable income, as defined 534
and used in the Internal Revenue Code, adjusted as follows:535

       (1) Add interest or dividends, net of ordinary, necessary,536
and reasonable expenses not deducted in computing federal taxable537
income, on obligations or securities of any state or of any538
political subdivision or authority of any state, other than this539
state and its subdivisions and authorities, but only to the extent 540
that such net amount is not otherwise includible in Ohio taxable 541
income and is described in either division (S)(1)(a) or (b) of 542
this section:543

        (a) The net amount is not attributable to the S portion of an 544
electing small business trust and has not been distributed to545
beneficiaries for the taxable year;546

        (b) The net amount is attributable to the S portion of an547
electing small business trust for the taxable year.548

       (2) Add interest or dividends, net of ordinary, necessary,549
and reasonable expenses not deducted in computing federal taxable550
income, on obligations of any authority, commission,551
instrumentality, territory, or possession of the United States to552
the extent that the interest or dividends are exempt from federal553
income taxes but not from state income taxes, but only to the554
extent that such net amount is not otherwise includible in Ohio555
taxable income and is described in either division (S)(1)(a) or556
(b) of this section;557

       (3) Add the amount of personal exemption allowed to the558
estate pursuant to section 642(b) of the Internal Revenue Code;559

       (4) Deduct interest or dividends, net of related expenses560
deducted in computing federal taxable income, on obligations of561
the United States and its territories and possessions or of any562
authority, commission, or instrumentality of the United States to563
the extent that the interest or dividends are exempt from state564
taxes under the laws of the United States, but only to the extent565
that such amount is included in federal taxable income and is566
described in either division (S)(1)(a) or (b) of this section;567

       (5) Deduct the amount of wages and salaries, if any, not568
otherwise allowable as a deduction but that would have been569
allowable as a deduction in computing federal taxable income for570
the taxable year, had the targeted jobs credit allowed under571
sections 38, 51, and 52 of the Internal Revenue Code not been in572
effect, but only to the extent such amount relates either to573
income included in federal taxable income for the taxable year or574
to income of the S portion of an electing small business trust for575
the taxable year;576

       (6) Deduct any interest or interest equivalent, net of577
related expenses deducted in computing federal taxable income, on578
public obligations and purchase obligations, but only to the579
extent that such net amount relates either to income included in580
federal taxable income for the taxable year or to income of the S581
portion of an electing small business trust for the taxable year;582

       (7) Add any loss or deduct any gain resulting from sale,583
exchange, or other disposition of public obligations to the extent584
that such loss has been deducted or such gain has been included in585
computing either federal taxable income or income of the S portion586
of an electing small business trust for the taxable year;587

       (8) Except in the case of the final return of an estate, add588
any amount deducted by the taxpayer on both its Ohio estate tax589
return pursuant to section 5731.14 of the Revised Code, and on its590
federal income tax return in determining federal taxable income;591

       (9)(a) Deduct any amount included in federal taxable income592
solely because the amount represents a reimbursement or refund of593
expenses that in a previous year the decedent had deducted as an594
itemized deduction pursuant to section 63 of the Internal Revenue595
Code and applicable treasury regulations. The deduction otherwise596
allowed under division (S)(9)(a) of this section shall be reduced597
to the extent the reimbursement is attributable to an amount the598
taxpayer or decedent deducted under this section in any taxable599
year.600

       (b) Add any amount not otherwise included in Ohio taxable601
income for any taxable year to the extent that the amount is602
attributable to the recovery during the taxable year of any amount603
deducted or excluded in computing federal or Ohio taxable income604
in any taxable year, but only to the extent such amount has not605
been distributed to beneficiaries for the taxable year.606

       (10) Deduct any portion of the deduction described in section 607
1341(a)(2) of the Internal Revenue Code, for repaying previously 608
reported income received under a claim of right, that meets both 609
of the following requirements:610

       (a) It is allowable for repayment of an item that was611
included in the taxpayer's taxable income or the decedent's612
adjusted gross income for a prior taxable year and did not qualify613
for a credit under division (A) or (B) of section 5747.05 of the614
Revised Code for that year.615

       (b) It does not otherwise reduce the taxpayer's taxable616
income or the decedent's adjusted gross income for the current or617
any other taxable year.618

       (11) Add any amount claimed as a credit under section619
5747.059 of the Revised Code to the extent that the amount620
satisfies either of the following:621

       (a) The amount was deducted or excluded from the computation622
of the taxpayer's federal taxable income as required to be623
reported for the taxpayer's taxable year under the Internal624
Revenue Code;625

       (b) The amount resulted in a reduction in the taxpayer's626
federal taxable income as required to be reported for any of the627
taxpayer's taxable years under the Internal Revenue Code.628

       (12) Deduct any amount, net of related expenses deducted in629
computing federal taxable income, that a trust is required to630
report as farm income on its federal income tax return, but only631
if the assets of the trust include at least ten acres of land632
satisfying the definition of "land devoted exclusively to633
agricultural use" under section 5713.30 of the Revised Code,634
regardless of whether the land is valued for tax purposes as such635
land under sections 5713.30 to 5713.38 of the Revised Code. If the636
trust is a pass-through entity investor, section 5747.231 of the637
Revised Code applies in ascertaining if the trust is eligible to638
claim the deduction provided by division (S)(12) of this section639
in connection with the pass-through entity's farm income.640

        Except for farm income attributable to the S portion of an641
electing small business trust, the deduction provided by division642
(S)(12) of this section is allowed only to the extent that the643
trust has not distributed such farm income. Division (S)(12) of644
this section applies only to taxable years of a trust beginning in645
2002 or thereafter.646

       (13) Add the net amount of income described in section 641(c)647
of the Internal Revenue Code to the extent that amount is not648
included in federal taxable income.649

       (14) Add or deduct the amount the taxpayer would be required650
to add or deduct under division (A)(20) or (21) of this section if651
the taxpayer's Ohio taxable income were computed in the same652
manner as an individual's Ohio adjusted gross income is computed653
under this section. In the case of a trust, division (S)(14) of654
this section applies only to any of the trust's taxable years655
beginning in 2002 or thereafter.656

       (15) Add any amount by which federal taxable income is 657
reduced because of an election under section 172(b)(1)(H) of the 658
Internal Revenue Code as amended by the "American Recovery and 659
Reinvestment Act of 2009," 123 Stat. 115.660

       (16)(a) Add any amount not included in federal taxable income 661
for the taxable year because of an election under section 108(i) 662
of the Internal Revenue Code.663

        (b) Deduct any amount included in federal taxable income for 664
the taxable year because of an election under section 108(i) of 665
the Internal Revenue Code.666

       (T) "School district income" and "school district income tax" 667
have the same meanings as in section 5748.01 of the Revised Code.668

       (U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)669
of this section, "public obligations," "purchase obligations," and670
"interest or interest equivalent" have the same meanings as in671
section 5709.76 of the Revised Code.672

       (V) "Limited liability company" means any limited liability673
company formed under Chapter 1705. of the Revised Code or under674
the laws of any other state.675

       (W) "Pass-through entity investor" means any person who,676
during any portion of a taxable year of a pass-through entity, is677
a partner, member, shareholder, or equity investor in that678
pass-through entity.679

       (X) "Banking day" has the same meaning as in section 1304.01680
of the Revised Code.681

       (Y) "Month" means a calendar month.682

       (Z) "Quarter" means the first three months, the second three683
months, the third three months, or the last three months of the684
taxpayer's taxable year.685

       (AA)(1) "Eligible institution" means a state university or686
state institution of higher education as defined in section687
3345.011 of the Revised Code, or a private, nonprofit college,688
university, or other post-secondary institution located in this689
state that possesses a certificate of authorization issued by the690
Ohio board of regents pursuant to Chapter 1713. of the Revised691
Code or a certificate of registration issued by the state board of692
career colleges and schools under Chapter 3332. of the Revised693
Code.694

       (2) "Qualified tuition and fees" means tuition and fees695
imposed by an eligible institution as a condition of enrollment or696
attendance, not exceeding two thousand five hundred dollars in697
each of the individual's first two years of post-secondary698
education. If the individual is a part-time student, "qualified699
tuition and fees" includes tuition and fees paid for the academic700
equivalent of the first two years of post-secondary education701
during a maximum of five taxable years, not exceeding a total of702
five thousand dollars. "Qualified tuition and fees" does not703
include:704

       (a) Expenses for any course or activity involving sports,705
games, or hobbies unless the course or activity is part of the706
individual's degree or diploma program;707

       (b) The cost of books, room and board, student activity fees,708
athletic fees, insurance expenses, or other expenses unrelated to 709
the individual's academic course of instruction;710

       (c) Tuition, fees, or other expenses paid or reimbursed711
through an employer, scholarship, grant in aid, or other712
educational benefit program.713

       (BB)(1) "Modified business income" means the business income714
included in a trust's Ohio taxable income after such taxable715
income is first reduced by the qualifying trust amount, if any.716

       (2) "Qualifying trust amount" of a trust means capital gains717
and losses from the sale, exchange, or other disposition of equity718
or ownership interests in, or debt obligations of, a qualifying719
investee to the extent included in the trust's Ohio taxable 720
income, but only if the following requirements are satisfied:721

        (a) The book value of the qualifying investee's physical 722
assets in this state and everywhere, as of the last day of the 723
qualifying investee's fiscal or calendar year ending immediately 724
prior to the date on which the trust recognizes the gain or loss, 725
is available to the trust.726

       (b) The requirements of section 5747.011 of the Revised Code727
are satisfied for the trust's taxable year in which the trust728
recognizes the gain or loss.729

        Any gain or loss that is not a qualifying trust amount is730
modified business income, qualifying investment income, or731
modified nonbusiness income, as the case may be.732

       (3) "Modified nonbusiness income" means a trust's Ohio733
taxable income other than modified business income, other than the734
qualifying trust amount, and other than qualifying investment735
income, as defined in section 5747.012 of the Revised Code, to the736
extent such qualifying investment income is not otherwise part of737
modified business income.738

       (4) "Modified Ohio taxable income" applies only to trusts,739
and means the sum of the amounts described in divisions (BB)(4)(a) 740
to (c) of this section:741

       (a) The fraction, calculated under section 5747.013, and 742
applying section 5747.231 of the Revised Code, multiplied by the 743
sum of the following amounts:744

        (i) The trust's modified business income;745

        (ii) The trust's qualifying investment income, as defined in 746
section 5747.012 of the Revised Code, but only to the extent the 747
qualifying investment income does not otherwise constitute748
modified business income and does not otherwise constitute a749
qualifying trust amount.750

       (b) The qualifying trust amount multiplied by a fraction, the 751
numerator of which is the sum of the book value of the qualifying 752
investee's physical assets in this state on the last day of the 753
qualifying investee's fiscal or calendar year ending immediately 754
prior to the day on which the trust recognizes the qualifying 755
trust amount, and the denominator of which is the sum of the book 756
value of the qualifying investee's total physical assets 757
everywhere on the last day of the qualifying investee's fiscal or 758
calendar year ending immediately prior to the day on which the 759
trust recognizes the qualifying trust amount. If, for a taxable 760
year, the trust recognizes a qualifying trust amount with respect 761
to more than one qualifying investee, the amount described in 762
division (BB)(4)(b) of this section shall equal the sum of the763
products so computed for each such qualifying investee.764

       (c)(i) With respect to a trust or portion of a trust that is 765
a resident as ascertained in accordance with division (I)(3)(d) of 766
this section, its modified nonbusiness income.767

        (ii) With respect to a trust or portion of a trust that is768
not a resident as ascertained in accordance with division769
(I)(3)(d) of this section, the amount of its modified nonbusiness770
income satisfying the descriptions in divisions (B)(2) to (5) of771
section 5747.20 of the Revised Code, except as otherwise provided 772
in division (BB)(4)(c)(ii) of this section. With respect to a 773
trust or portion of a trust that is not a resident as ascertained 774
in accordance with division (I)(3)(d) of this section, the trust's 775
portion of modified nonbusiness income recognized from the sale, 776
exchange, or other disposition of a debt interest in or equity 777
interest in a section 5747.212 entity, as defined in section 778
5747.212 of the Revised Code, without regard to division (A) of 779
that section, shall not be allocated to this state in accordance 780
with section 5747.20 of the Revised Code but shall be apportioned 781
to this state in accordance with division (B) of section 5747.212 782
of the Revised Code without regard to division (A) of that 783
section.784

       If the allocation and apportionment of a trust's income under785
divisions (BB)(4)(a) and (c) of this section do not fairly786
represent the modified Ohio taxable income of the trust in this787
state, the alternative methods described in division (C) of788
section 5747.21 of the Revised Code may be applied in the manner789
and to the same extent provided in that section.790

       (5)(a) Except as set forth in division (BB)(5)(b) of this 791
section, "qualifying investee" means a person in which a trust has 792
an equity or ownership interest, or a person or unit of government 793
the debt obligations of either of which are owned by a trust. For 794
the purposes of division (BB)(2)(a) of this section and for the 795
purpose of computing the fraction described in division (BB)(4)(b) 796
of this section, all of the following apply:797

        (i) If the qualifying investee is a member of a qualifying798
controlled group on the last day of the qualifying investee's799
fiscal or calendar year ending immediately prior to the date on800
which the trust recognizes the gain or loss, then "qualifying801
investee" includes all persons in the qualifying controlled group802
on such last day.803

        (ii) If the qualifying investee, or if the qualifying804
investee and any members of the qualifying controlled group of805
which the qualifying investee is a member on the last day of the806
qualifying investee's fiscal or calendar year ending immediately807
prior to the date on which the trust recognizes the gain or loss,808
separately or cumulatively own, directly or indirectly, on the809
last day of the qualifying investee's fiscal or calendar year810
ending immediately prior to the date on which the trust recognizes811
the qualifying trust amount, more than fifty per cent of the812
equity of a pass-through entity, then the qualifying investee and813
the other members are deemed to own the proportionate share of the814
pass-through entity's physical assets which the pass-through815
entity directly or indirectly owns on the last day of the816
pass-through entity's calendar or fiscal year ending within or817
with the last day of the qualifying investee's fiscal or calendar818
year ending immediately prior to the date on which the trust819
recognizes the qualifying trust amount.820

        (iii) For the purposes of division (BB)(5)(a)(iii) of this821
section, "upper level pass-through entity" means a pass-through822
entity directly or indirectly owning any equity of another823
pass-through entity, and "lower level pass-through entity" means824
that other pass-through entity.825

        An upper level pass-through entity, whether or not it is also 826
a qualifying investee, is deemed to own, on the last day of the 827
upper level pass-through entity's calendar or fiscal year, the828
proportionate share of the lower level pass-through entity's829
physical assets that the lower level pass-through entity directly830
or indirectly owns on the last day of the lower level pass-through831
entity's calendar or fiscal year ending within or with the last832
day of the upper level pass-through entity's fiscal or calendar833
year. If the upper level pass-through entity directly and834
indirectly owns less than fifty per cent of the equity of the835
lower level pass-through entity on each day of the upper level836
pass-through entity's calendar or fiscal year in which or with837
which ends the calendar or fiscal year of the lower level838
pass-through entity and if, based upon clear and convincing839
evidence, complete information about the location and cost of the840
physical assets of the lower pass-through entity is not available841
to the upper level pass-through entity, then solely for purposes842
of ascertaining if a gain or loss constitutes a qualifying trust843
amount, the upper level pass-through entity shall be deemed as844
owning no equity of the lower level pass-through entity for each845
day during the upper level pass-through entity's calendar or846
fiscal year in which or with which ends the lower level847
pass-through entity's calendar or fiscal year. Nothing in division 848
(BB)(5)(a)(iii) of this section shall be construed to provide for 849
any deduction or exclusion in computing any trust's Ohio taxable 850
income.851

       (b) With respect to a trust that is not a resident for the852
taxable year and with respect to a part of a trust that is not a853
resident for the taxable year, "qualifying investee" for that854
taxable year does not include a C corporation if both of the855
following apply:856

       (i) During the taxable year the trust or part of the trust857
recognizes a gain or loss from the sale, exchange, or other858
disposition of equity or ownership interests in, or debt859
obligations of, the C corporation.860

       (ii) Such gain or loss constitutes nonbusiness income.861

        (6) "Available" means information is such that a person is 862
able to learn of the information by the due date plus extensions, 863
if any, for filing the return for the taxable year in which the 864
trust recognizes the gain or loss.865

        (CC) "Qualifying controlled group" has the same meaning as in 866
section 5733.04 of the Revised Code.867

        (DD) "Related member" has the same meaning as in section868
5733.042 of the Revised Code.869

       (EE)(1) For the purposes of division (EE) of this section: 870

       (a) "Qualifying person" means any person other than a 871
qualifying corporation.872

       (b) "Qualifying corporation" means any person classified for 873
federal income tax purposes as an association taxable as a 874
corporation, except either of the following:875

       (i) A corporation that has made an election under subchapter 876
S, chapter one, subtitle A, of the Internal Revenue Code for its 877
taxable year ending within, or on the last day of, the investor's 878
taxable year;879

       (ii) A subsidiary that is wholly owned by any corporation 880
that has made an election under subchapter S, chapter one, 881
subtitle A of the Internal Revenue Code for its taxable year 882
ending within, or on the last day of, the investor's taxable year.883

       (2) For the purposes of this chapter, unless expressly stated 884
otherwise, no qualifying person indirectly owns any asset directly 885
or indirectly owned by any qualifying corporation.886

       (FF) For purposes of this chapter and Chapter 5751. of the 887
Revised Code:888

       (1) "Trust" does not include a qualified pre-income tax 889
trust.890

       (2) A "qualified pre-income tax trust" is any pre-income tax 891
trust that makes a qualifying pre-income tax trust election as 892
described in division (FF)(3) of this section.893

       (3) A "qualifying pre-income tax trust election" is an 894
election by a pre-income tax trust to subject to the tax imposed 895
by section 5751.02 of the Revised Code the pre-income tax trust 896
and all pass-through entities of which the trust owns or 897
controls, directly, indirectly, or constructively through related 898
interests, five per cent or more of the ownership or equity 899
interests. The trustee shall notify the tax commissioner in 900
writing of the election on or before April 15, 2006. The 901
election, if timely made, shall be effective on and after January 902
1, 2006, and shall apply for all tax periods and tax years until 903
revoked by the trustee of the trust.904

       (4) A "pre-income tax trust" is a trust that satisfies all of 905
the following requirements:906

       (a) The document or instrument creating the trust was 907
executed by the grantor before January 1, 1972;908

       (b) The trust became irrevocable upon the creation of the 909
trust; and910

       (c) The grantor was domiciled in this state at the time the 911
trust was created.912

       Section 2. That existing section 5747.01 of the Revised Code 913
is hereby repealed.914

       Section 3. That the version of section 5747.01 of the Revised 915
Code that is scheduled to take effect January 1, 2010, be amended 916
to read as follows:917

       Sec. 5747.01.  Except as otherwise expressly provided or918
clearly appearing from the context, any term used in this chapter 919
that is not otherwise defined in this section has the same meaning 920
as when used in a comparable context in the laws of the United921
States relating to federal income taxes or if not used in a 922
comparable context in those laws, has the same meaning as in 923
section 5733.40 of the Revised Code. Any reference in this chapter 924
to the Internal Revenue Code includes other laws of the United 925
States relating to federal income taxes.926

       As used in this chapter:927

       (A) "Adjusted gross income" or "Ohio adjusted gross income"928
means federal adjusted gross income, as defined and used in the929
Internal Revenue Code, adjusted as provided in this section:930

       (1) Add interest or dividends on obligations or securities of 931
any state or of any political subdivision or authority of any932
state, other than this state and its subdivisions and authorities.933

       (2) Add interest or dividends on obligations of any934
authority, commission, instrumentality, territory, or possession935
of the United States to the extent that the interest or dividends936
are exempt from federal income taxes but not from state income937
taxes.938

       (3) Deduct interest or dividends on obligations of the United 939
States and its territories and possessions or of any authority, 940
commission, or instrumentality of the United States to the extent941
that the interest or dividends are included in federal adjusted 942
gross income but exempt from state income taxes under the laws of 943
the United States.944

       (4) Deduct disability and survivor's benefits to the extent945
included in federal adjusted gross income.946

       (5) Deduct benefits under Title II of the Social Security Act 947
and tier 1 railroad retirement benefits to the extent included in 948
federal adjusted gross income under section 86 of the Internal949
Revenue Code.950

       (6) In the case of a taxpayer who is a beneficiary of a trust 951
that makes an accumulation distribution as defined in section 665 952
of the Internal Revenue Code, add, for the beneficiary's taxable 953
years beginning before 2002, the portion, if any, of such 954
distribution that does not exceed the undistributed net income of 955
the trust for the three taxable years preceding the taxable year 956
in which the distribution is made to the extent that the portion 957
was not included in the trust's taxable income for any of the 958
trust's taxable years beginning in 2002 or thereafter.959
"Undistributed net income of a trust" means the taxable income of960
the trust increased by (a)(i) the additions to adjusted gross961
income required under division (A) of this section and (ii) the962
personal exemptions allowed to the trust pursuant to section963
642(b) of the Internal Revenue Code, and decreased by (b)(i) the964
deductions to adjusted gross income required under division (A) of965
this section, (ii) the amount of federal income taxes attributable966
to such income, and (iii) the amount of taxable income that has967
been included in the adjusted gross income of a beneficiary by968
reason of a prior accumulation distribution. Any undistributed net969
income included in the adjusted gross income of a beneficiary970
shall reduce the undistributed net income of the trust commencing971
with the earliest years of the accumulation period.972

       (7) Deduct the amount of wages and salaries, if any, not973
otherwise allowable as a deduction but that would have been974
allowable as a deduction in computing federal adjusted gross975
income for the taxable year, had the targeted jobs credit allowed976
and determined under sections 38, 51, and 52 of the Internal977
Revenue Code not been in effect.978

       (8) Deduct any interest or interest equivalent on public979
obligations and purchase obligations to the extent that the980
interest or interest equivalent is included in federal adjusted981
gross income.982

       (9) Add any loss or deduct any gain resulting from the sale,983
exchange, or other disposition of public obligations to the extent984
that the loss has been deducted or the gain has been included in985
computing federal adjusted gross income.986

       (10) Deduct or add amounts, as provided under section987
5747.70 of the Revised Code, related to contributions to variable988
college savings program accounts made or tuition units purchased989
pursuant to Chapter 3334. of the Revised Code.990

       (11)(a) Deduct, to the extent not otherwise allowable as a991
deduction or exclusion in computing federal or Ohio adjusted gross992
income for the taxable year, the amount the taxpayer paid during993
the taxable year for medical care insurance and qualified994
long-term care insurance for the taxpayer, the taxpayer's spouse,995
and dependents. No deduction for medical care insurance under996
division (A)(11) of this section shall be allowed either to any997
taxpayer who is eligible to participate in any subsidized health998
plan maintained by any employer of the taxpayer or of the999
taxpayer's spouse, or to any taxpayer who is entitled to, or on1000
application would be entitled to, benefits under part A of Title1001
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.1002
301, as amended. For the purposes of division (A)(11)(a) of this1003
section, "subsidized health plan" means a health plan for which1004
the employer pays any portion of the plan's cost. The deduction1005
allowed under division (A)(11)(a) of this section shall be the 1006
net of any related premium refunds, related premium 1007
reimbursements, or related insurance premium dividends received 1008
during the taxable year.1009

       (b) Deduct, to the extent not otherwise deducted or excluded1010
in computing federal or Ohio adjusted gross income during the1011
taxable year, the amount the taxpayer paid during the taxable1012
year, not compensated for by any insurance or otherwise, for1013
medical care of the taxpayer, the taxpayer's spouse, and1014
dependents, to the extent the expenses exceed seven and one-half1015
per cent of the taxpayer's federal adjusted gross income.1016

       (c) Deduct, to the extent not otherwise deducted or excluded 1017
in computing federal or Ohio adjusted gross income, any amount 1018
included in federal adjusted gross income under section 105 or not 1019
excluded under section 106 of the Internal Revenue Code solely 1020
because it relates to an accident and health plan for a person who 1021
otherwise would be a "qualifying relative" and thus a "dependent" 1022
under section 152 of the Internal Revenue Code but for the fact 1023
that the person fails to meet the income and support limitations 1024
under section 152(d)(1)(B) and (C) of the Internal Revenue Code. 1025

       (d) For purposes of division (A)(11) of this section,1026
"medical care" has the meaning given in section 213 of the1027
Internal Revenue Code, subject to the special rules, limitations,1028
and exclusions set forth therein, and "qualified long-term care"1029
has the same meaning given in section 7702B(c) of the Internal1030
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c) 1031
of this section, "dependent" includes a person who otherwise 1032
would be a "qualifying relative" and thus a "dependent" under 1033
section 152 of the Internal Revenue Code but for the fact that 1034
the person fails to meet the income and support limitations under 1035
section 152(d)(1)(B) and (C) of the Internal Revenue Code.1036

       (12)(a) Deduct any amount included in federal adjusted gross1037
income solely because the amount represents a reimbursement or1038
refund of expenses that in any year the taxpayer had deducted as1039
an itemized deduction pursuant to section 63 of the Internal1040
Revenue Code and applicable United States department of the1041
treasury regulations. The deduction otherwise allowed under1042
division (A)(12)(a) of this section shall be reduced to the extent1043
the reimbursement is attributable to an amount the taxpayer1044
deducted under this section in any taxable year.1045

       (b) Add any amount not otherwise included in Ohio adjusted1046
gross income for any taxable year to the extent that the amount is1047
attributable to the recovery during the taxable year of any amount1048
deducted or excluded in computing federal or Ohio adjusted gross1049
income in any taxable year.1050

       (13) Deduct any portion of the deduction described in section 1051
1341(a)(2) of the Internal Revenue Code, for repaying previously 1052
reported income received under a claim of right, that meets both 1053
of the following requirements:1054

       (a) It is allowable for repayment of an item that was1055
included in the taxpayer's adjusted gross income for a prior1056
taxable year and did not qualify for a credit under division (A)1057
or (B) of section 5747.05 of the Revised Code for that year;1058

       (b) It does not otherwise reduce the taxpayer's adjusted1059
gross income for the current or any other taxable year.1060

       (14) Deduct an amount equal to the deposits made to, and net1061
investment earnings of, a medical savings account during the1062
taxable year, in accordance with section 3924.66 of the Revised1063
Code. The deduction allowed by division (A)(14) of this section1064
does not apply to medical savings account deposits and earnings1065
otherwise deducted or excluded for the current or any other1066
taxable year from the taxpayer's federal adjusted gross income.1067

       (15)(a) Add an amount equal to the funds withdrawn from a1068
medical savings account during the taxable year, and the net1069
investment earnings on those funds, when the funds withdrawn were1070
used for any purpose other than to reimburse an account holder1071
for, or to pay, eligible medical expenses, in accordance with1072
section 3924.66 of the Revised Code;1073

       (b) Add the amounts distributed from a medical savings1074
account under division (A)(2) of section 3924.68 of the Revised1075
Code during the taxable year.1076

       (16) Add any amount claimed as a credit under section1077
5747.059 of the Revised Code to the extent that such amount1078
satisfies either of the following:1079

       (a) The amount was deducted or excluded from the computation1080
of the taxpayer's federal adjusted gross income as required to be1081
reported for the taxpayer's taxable year under the Internal1082
Revenue Code;1083

       (b) The amount resulted in a reduction of the taxpayer's1084
federal adjusted gross income as required to be reported for any1085
of the taxpayer's taxable years under the Internal Revenue Code.1086

       (17) Deduct the amount contributed by the taxpayer to an1087
individual development account program established by a county1088
department of job and family services pursuant to sections 329.111089
to 329.14 of the Revised Code for the purpose of matching funds1090
deposited by program participants. On request of the tax1091
commissioner, the taxpayer shall provide any information that, in1092
the tax commissioner's opinion, is necessary to establish the1093
amount deducted under division (A)(17) of this section.1094

       (18) Beginning in taxable year 2001 but not for any taxable 1095
year beginning after December 31, 2005, if the taxpayer is married1096
and files a joint return and the combined federal adjusted gross 1097
income of the taxpayer and the taxpayer's spouse for the taxable 1098
year does not exceed one hundred thousand dollars, or if the 1099
taxpayer is single and has a federal adjusted gross income for the1100
taxable year not exceeding fifty thousand dollars, deduct amounts 1101
paid during the taxable year for qualified tuition and fees paid 1102
to an eligible institution for the taxpayer, the taxpayer's 1103
spouse, or any dependent of the taxpayer, who is a resident of 1104
this state and is enrolled in or attending a program that1105
culminates in a degree or diploma at an eligible institution. The 1106
deduction may be claimed only to the extent that qualified tuition 1107
and fees are not otherwise deducted or excluded for any taxable 1108
year from federal or Ohio adjusted gross income. The deduction may 1109
not be claimed for educational expenses for which the taxpayer 1110
claims a credit under section 5747.27 of the Revised Code.1111

       (19) Add any reimbursement received during the taxable year1112
of any amount the taxpayer deducted under division (A)(18) of this1113
section in any previous taxable year to the extent the amount is1114
not otherwise included in Ohio adjusted gross income.1115

       (20)(a)(i) Add five-sixths of the amount of depreciation1116
expense allowed by subsection (k) of section 168 of the Internal1117
Revenue Code, including the taxpayer's proportionate or1118
distributive share of the amount of depreciation expense allowed1119
by that subsection to a pass-through entity in which the taxpayer1120
has a direct or indirect ownership interest.1121

       (ii) Add five-sixths of the amount of qualifying section 179 1122
depreciation expense, including a person's proportionate or 1123
distributive share of the amount of qualifying section 179 1124
depreciation expense allowed to any pass-through entity in which 1125
the person has a direct or indirect ownership. For the purposes of 1126
this division, "qualifying section 179 depreciation expense" means 1127
the difference between (I) the amount of depreciation expense 1128
directly or indirectly allowed to the taxpayer under section 179 1129
of the Internal Revenue Code, and (II) the amount of depreciation 1130
expense directly or indirectly allowed to the taxpayer under 1131
section 179 of the Internal Revenue Code as that section existed 1132
on December 31, 2002.1133

       The tax commissioner, under procedures established by the 1134
commissioner, may waive the add-backs related to a pass-through 1135
entity if the taxpayer owns, directly or indirectly, less than 1136
five per cent of the pass-through entity.1137

       (b) Nothing in division (A)(20) of this section shall be1138
construed to adjust or modify the adjusted basis of any asset.1139

       (c) To the extent the add-back required under division1140
(A)(20)(a) of this section is attributable to property generating1141
nonbusiness income or loss allocated under section 5747.20 of the1142
Revised Code, the add-back shall be sitused to the same location1143
as the nonbusiness income or loss generated by the property for1144
the purpose of determining the credit under division (A) of1145
section 5747.05 of the Revised Code. Otherwise, the add-back shall 1146
be apportioned, subject to one or more of the four alternative 1147
methods of apportionment enumerated in section 5747.21 of the 1148
Revised Code.1149

       (d) For the purposes of division (A) of this section, net 1150
operating loss carryback and carryforward shall not include 1151
five-sixths of the allowance of any net operating loss deduction 1152
carryback or carryforward to the taxable year to the extent such 1153
loss resulted from depreciation allowed by section 168(k) of the 1154
Internal Revenue Code and by the qualifying section 179 1155
depreciation expense amount.1156

       (21)(a) If the taxpayer was required to add an amount under1157
division (A)(20)(a) of this section for a taxable year, deduct1158
one-fifth of the amount so added for each of the five succeeding1159
taxable years.1160

       (b) If the amount deducted under division (A)(21)(a) of this1161
section is attributable to an add-back allocated under division1162
(A)(20)(c) of this section, the amount deducted shall be sitused1163
to the same location. Otherwise, the add-back shall be apportioned 1164
using the apportionment factors for the taxable year in which the 1165
deduction is taken, subject to one or more of the four alternative 1166
methods of apportionment enumerated in section 5747.21 of the 1167
Revised Code.1168

       (c) No deduction is available under division (A)(21)(a) of 1169
this section with regard to any depreciation allowed by section 1170
168(k) of the Internal Revenue Code and by the qualifying section 1171
179 depreciation expense amount to the extent that such 1172
depreciation resulted in or increased a federal net operating loss 1173
carryback or carryforward to a taxable year to which division 1174
(A)(20)(d) of this section does not apply.1175

       (22) Deduct, to the extent not otherwise deducted or excluded 1176
in computing federal or Ohio adjusted gross income for the taxable 1177
year, the amount the taxpayer received during the taxable year as 1178
reimbursement for life insurance premiums under section 5919.31 of 1179
the Revised Code.1180

        (23) Deduct, to the extent not otherwise deducted or excluded 1181
in computing federal or Ohio adjusted gross income for the taxable 1182
year, the amount the taxpayer received during the taxable year as 1183
a death benefit paid by the adjutant general under section 5919.33 1184
of the Revised Code.1185

       (24) Deduct, to the extent included in federal adjusted gross 1186
income and not otherwise allowable as a deduction or exclusion in 1187
computing federal or Ohio adjusted gross income for the taxable 1188
year, military pay and allowances received by the taxpayer during 1189
the taxable year for active duty service in the United States 1190
army, air force, navy, marine corps, or coast guard or reserve 1191
components thereof or the national guard. The deduction may not be 1192
claimed for military pay and allowances received by the taxpayer 1193
while the taxpayer is stationed in this state.1194

       (25) Deduct, to the extent not otherwise allowable as a 1195
deduction or exclusion in computing federal or Ohio adjusted gross 1196
income for the taxable year and not otherwise compensated for by 1197
any other source, the amount of qualified organ donation expenses 1198
incurred by the taxpayer during the taxable year, not to exceed 1199
ten thousand dollars. A taxpayer may deduct qualified organ 1200
donation expenses only once for all taxable years beginning with 1201
taxable years beginning in 2007.1202

       For the purposes of division (A)(25) of this section:1203

        (a) "Human organ" means all or any portion of a human liver, 1204
pancreas, kidney, intestine, or lung, and any portion of human 1205
bone marrow.1206

        (b) "Qualified organ donation expenses" means travel 1207
expenses, lodging expenses, and wages and salary forgone by a 1208
taxpayer in connection with the taxpayer's donation, while living, 1209
of one or more of the taxpayer's human organs to another human 1210
being.1211

       (26) Deduct, to the extent not otherwise deducted or excluded 1212
in computing federal or Ohio adjusted gross income for the taxable 1213
year, amounts received by the taxpayer as retired military 1214
personnel pay for service in the United States army, navy, air 1215
force, coast guard, or marine corps or reserve components thereof, 1216
or the national guard, or received by the surviving spouse or 1217
former spouse of such a taxpayer under the survivor benefit plan 1218
on account of such a taxpayer's death. If the taxpayer receives 1219
income on account of retirement paid under the federal civil 1220
service retirement system or federal employees retirement system, 1221
or under any successor retirement program enacted by the congress 1222
of the United States that is established and maintained for 1223
retired employees of the United States government, and such 1224
retirement income is based, in whole or in part, on credit for 1225
the taxpayer's military service, the deduction allowed under this 1226
division shall include only that portion of such retirement 1227
income that is attributable to the taxpayer's military service, 1228
to the extent that portion of such retirement income is otherwise 1229
included in federal adjusted gross income and is not otherwise 1230
deducted under this section. Any amount deducted under division 1231
(A)(26) of this section is not included in a taxpayer's 1232
adjusted gross income for the purposes of section 5747.055 of 1233
the Revised Code. No amount may be deducted under division 1234
(A)(26) of this section on the basis of which a credit was 1235
claimed under section 5747.055 of the Revised Code.1236

       (27) Deduct, to the extent not otherwise deducted or excluded 1237
in computing federal or Ohio adjusted gross income for the taxable 1238
year, the amount the taxpayer received during the taxable year 1239
from the military injury relief fund created in section 5101.98 of 1240
the Revised Code.1241

       (28) For the taxpayer's taxable year beginning in 2009, add 1242
any amount excluded from federal adjusted gross income pursuant to 1243
section 85(c) of the Internal Revenue Code.1244

       (29) Add any amount by which federal adjusted gross income is 1245
reduced because of an election under section 172(b)(1)(H) of the 1246
Internal Revenue Code as amended by the "American Recovery and 1247
Reinvestment Act of 2009," 123 Stat. 115.1248

       (30)(a) Add any amount not included in federal adjusted 1249
gross income for the taxable year because of an election under 1250
section 108(i) of the Internal Revenue Code.1251

        (b) Deduct any amount included in federal adjusted gross 1252
income for the taxable year because of an election under section 1253
108(i) of the Internal Revenue Code. 1254

       (B) "Business income" means income, including gain or loss,1255
arising from transactions, activities, and sources in the regular1256
course of a trade or business and includes income, gain, or loss1257
from real property, tangible property, and intangible property if1258
the acquisition, rental, management, and disposition of the1259
property constitute integral parts of the regular course of a1260
trade or business operation. "Business income" includes income,1261
including gain or loss, from a partial or complete liquidation of1262
a business, including, but not limited to, gain or loss from the1263
sale or other disposition of goodwill.1264

       (C) "Nonbusiness income" means all income other than business 1265
income and may include, but is not limited to, compensation, rents 1266
and royalties from real or tangible personal property, capital 1267
gains, interest, dividends and distributions, patent or copyright 1268
royalties, or lottery winnings, prizes, and awards.1269

       (D) "Compensation" means any form of remuneration paid to an1270
employee for personal services.1271

       (E) "Fiduciary" means a guardian, trustee, executor,1272
administrator, receiver, conservator, or any other person acting1273
in any fiduciary capacity for any individual, trust, or estate.1274

       (F) "Fiscal year" means an accounting period of twelve months 1275
ending on the last day of any month other than December.1276

       (G) "Individual" means any natural person.1277

       (H) "Internal Revenue Code" means the "Internal Revenue Code1278
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.1279

       (I) "Resident" means any of the following, provided that1280
division (I)(3) of this section applies only to taxable years of a1281
trust beginning in 2002 or thereafter:1282

       (1) An individual who is domiciled in this state, subject to1283
section 5747.24 of the Revised Code;1284

       (2) The estate of a decedent who at the time of death was1285
domiciled in this state. The domicile tests of section 5747.24 of1286
the Revised Code are not controlling for purposes of division 1287
(I)(2) of this section.1288

       (3) A trust that, in whole or part, resides in this state. If1289
only part of a trust resides in this state, the trust is a1290
resident only with respect to that part.1291

       For the purposes of division (I)(3) of this section:1292

       (a) A trust resides in this state for the trust's current1293
taxable year to the extent, as described in division (I)(3)(d) of1294
this section, that the trust consists directly or indirectly, in 1295
whole or in part, of assets, net of any related liabilities, that 1296
were transferred, or caused to be transferred, directly or 1297
indirectly, to the trust by any of the following:1298

        (i) A person, a court, or a governmental entity or 1299
instrumentality on account of the death of a decedent, but only if 1300
the trust is described in division (I)(3)(e)(i) or (ii) of this 1301
section;1302

       (ii) A person who was domiciled in this state for the 1303
purposes of this chapter when the person directly or indirectly 1304
transferred assets to an irrevocable trust, but only if at least 1305
one of the trust's qualifying beneficiaries is domiciled in this 1306
state for the purposes of this chapter during all or some portion 1307
of the trust's current taxable year;1308

       (iii) A person who was domiciled in this state for the1309
purposes of this chapter when the trust document or instrument or1310
part of the trust document or instrument became irrevocable, but1311
only if at least one of the trust's qualifying beneficiaries is a 1312
resident domiciled in this state for the purposes of this chapter1313
during all or some portion of the trust's current taxable year. If 1314
a trust document or instrument became irrevocable upon the death 1315
of a person who at the time of death was domiciled in this state 1316
for purposes of this chapter, that person is a person described in 1317
division (I)(3)(a)(iii) of this section.1318

        (b) A trust is irrevocable to the extent that the transferor 1319
is not considered to be the owner of the net assets of the trust 1320
under sections 671 to 678 of the Internal Revenue Code.1321

       (c) With respect to a trust other than a charitable lead1322
trust, "qualifying beneficiary" has the same meaning as "potential1323
current beneficiary" as defined in section 1361(e)(2) of the1324
Internal Revenue Code, and with respect to a charitable lead trust1325
"qualifying beneficiary" is any current, future, or contingent1326
beneficiary, but with respect to any trust "qualifying1327
beneficiary" excludes a person or a governmental entity or1328
instrumentality to any of which a contribution would qualify for1329
the charitable deduction under section 170 of the Internal Revenue1330
Code.1331

        (d) For the purposes of division (I)(3)(a) of this section,1332
the extent to which a trust consists directly or indirectly, in1333
whole or in part, of assets, net of any related liabilities, that1334
were transferred directly or indirectly, in whole or part, to the1335
trust by any of the sources enumerated in that division shall be1336
ascertained by multiplying the fair market value of the trust's1337
assets, net of related liabilities, by the qualifying ratio, which1338
shall be computed as follows:1339

        (i) The first time the trust receives assets, the numerator1340
of the qualifying ratio is the fair market value of those assets1341
at that time, net of any related liabilities, from sources1342
enumerated in division (I)(3)(a) of this section. The denominator1343
of the qualifying ratio is the fair market value of all the1344
trust's assets at that time, net of any related liabilities.1345

        (ii) Each subsequent time the trust receives assets, a1346
revised qualifying ratio shall be computed. The numerator of the1347
revised qualifying ratio is the sum of (1) the fair market value1348
of the trust's assets immediately prior to the subsequent1349
transfer, net of any related liabilities, multiplied by the1350
qualifying ratio last computed without regard to the subsequent1351
transfer, and (2) the fair market value of the subsequently1352
transferred assets at the time transferred, net of any related1353
liabilities, from sources enumerated in division (I)(3)(a) of this1354
section. The denominator of the revised qualifying ratio is the1355
fair market value of all the trust's assets immediately after the1356
subsequent transfer, net of any related liabilities.1357

       (iii) Whether a transfer to the trust is by or from any of 1358
the sources enumerated in division (I)(3)(a) of this section shall 1359
be ascertained without regard to the domicile of the trust's 1360
beneficiaries.1361

        (e) For the purposes of division (I)(3)(a)(i) of this1362
section:1363

        (i) A trust is described in division (I)(3)(e)(i) of this1364
section if the trust is a testamentary trust and the testator of1365
that testamentary trust was domiciled in this state at the time of1366
the testator's death for purposes of the taxes levied under1367
Chapter 5731. of the Revised Code.1368

        (ii) A trust is described in division (I)(3)(e)(ii) of this1369
section if the transfer is a qualifying transfer described in any1370
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an1371
irrevocable inter vivos trust, and at least one of the trust's1372
qualifying beneficiaries is domiciled in this state for purposes1373
of this chapter during all or some portion of the trust's current1374
taxable year.1375

        (f) For the purposes of division (I)(3)(e)(ii) of this1376
section, a "qualifying transfer" is a transfer of assets, net of1377
any related liabilities, directly or indirectly to a trust, if the1378
transfer is described in any of the following:1379

        (i) The transfer is made to a trust, created by the decedent 1380
before the decedent's death and while the decedent was domiciled 1381
in this state for the purposes of this chapter, and, prior to the 1382
death of the decedent, the trust became irrevocable while the 1383
decedent was domiciled in this state for the purposes of this 1384
chapter.1385

        (ii) The transfer is made to a trust to which the decedent,1386
prior to the decedent's death, had directly or indirectly1387
transferred assets, net of any related liabilities, while the1388
decedent was domiciled in this state for the purposes of this1389
chapter, and prior to the death of the decedent the trust became1390
irrevocable while the decedent was domiciled in this state for the1391
purposes of this chapter.1392

        (iii) The transfer is made on account of a contractual1393
relationship existing directly or indirectly between the1394
transferor and either the decedent or the estate of the decedent1395
at any time prior to the date of the decedent's death, and the1396
decedent was domiciled in this state at the time of death for1397
purposes of the taxes levied under Chapter 5731. of the Revised1398
Code.1399

        (iv) The transfer is made to a trust on account of a1400
contractual relationship existing directly or indirectly between1401
the transferor and another person who at the time of the1402
decedent's death was domiciled in this state for purposes of this1403
chapter.1404

        (v) The transfer is made to a trust on account of the will of 1405
a testator.1406

        (vi) The transfer is made to a trust created by or caused to 1407
be created by a court, and the trust was directly or indirectly1408
created in connection with or as a result of the death of an1409
individual who, for purposes of the taxes levied under Chapter1410
5731. of the Revised Code, was domiciled in this state at the time1411
of the individual's death.1412

       (g) The tax commissioner may adopt rules to ascertain the1413
part of a trust residing in this state.1414

       (J) "Nonresident" means an individual or estate that is not a 1415
resident. An individual who is a resident for only part of a1416
taxable year is a nonresident for the remainder of that taxable1417
year.1418

       (K) "Pass-through entity" has the same meaning as in section1419
5733.04 of the Revised Code.1420

       (L) "Return" means the notifications and reports required to1421
be filed pursuant to this chapter for the purpose of reporting the1422
tax due and includes declarations of estimated tax when so1423
required.1424

       (M) "Taxable year" means the calendar year or the taxpayer's1425
fiscal year ending during the calendar year, or fractional part1426
thereof, upon which the adjusted gross income is calculated1427
pursuant to this chapter.1428

       (N) "Taxpayer" means any person subject to the tax imposed by 1429
section 5747.02 of the Revised Code or any pass-through entity1430
that makes the election under division (D) of section 5747.08 of1431
the Revised Code.1432

       (O) "Dependents" means dependents as defined in the Internal1433
Revenue Code and as claimed in the taxpayer's federal income tax1434
return for the taxable year or which the taxpayer would have been1435
permitted to claim had the taxpayer filed a federal income tax1436
return.1437

       (P) "Principal county of employment" means, in the case of a1438
nonresident, the county within the state in which a taxpayer1439
performs services for an employer or, if those services are1440
performed in more than one county, the county in which the major1441
portion of the services are performed.1442

       (Q) As used in sections 5747.50 to 5747.55 of the Revised1443
Code:1444

       (1) "Subdivision" means any county, municipal corporation,1445
park district, or township.1446

       (2) "Essential local government purposes" includes all1447
functions that any subdivision is required by general law to1448
exercise, including like functions that are exercised under a1449
charter adopted pursuant to the Ohio Constitution.1450

       (R) "Overpayment" means any amount already paid that exceeds1451
the figure determined to be the correct amount of the tax.1452

       (S) "Taxable income" or "Ohio taxable income" applies only to 1453
estates and trusts, and means federal taxable income, as defined 1454
and used in the Internal Revenue Code, adjusted as follows:1455

       (1) Add interest or dividends, net of ordinary, necessary,1456
and reasonable expenses not deducted in computing federal taxable1457
income, on obligations or securities of any state or of any1458
political subdivision or authority of any state, other than this1459
state and its subdivisions and authorities, but only to the extent 1460
that such net amount is not otherwise includible in Ohio taxable 1461
income and is described in either division (S)(1)(a) or (b) of 1462
this section:1463

        (a) The net amount is not attributable to the S portion of an 1464
electing small business trust and has not been distributed to1465
beneficiaries for the taxable year;1466

        (b) The net amount is attributable to the S portion of an1467
electing small business trust for the taxable year.1468

       (2) Add interest or dividends, net of ordinary, necessary,1469
and reasonable expenses not deducted in computing federal taxable1470
income, on obligations of any authority, commission,1471
instrumentality, territory, or possession of the United States to1472
the extent that the interest or dividends are exempt from federal1473
income taxes but not from state income taxes, but only to the1474
extent that such net amount is not otherwise includible in Ohio1475
taxable income and is described in either division (S)(1)(a) or1476
(b) of this section;1477

       (3) Add the amount of personal exemption allowed to the1478
estate pursuant to section 642(b) of the Internal Revenue Code;1479

       (4) Deduct interest or dividends, net of related expenses1480
deducted in computing federal taxable income, on obligations of1481
the United States and its territories and possessions or of any1482
authority, commission, or instrumentality of the United States to1483
the extent that the interest or dividends are exempt from state1484
taxes under the laws of the United States, but only to the extent1485
that such amount is included in federal taxable income and is1486
described in either division (S)(1)(a) or (b) of this section;1487

       (5) Deduct the amount of wages and salaries, if any, not1488
otherwise allowable as a deduction but that would have been1489
allowable as a deduction in computing federal taxable income for1490
the taxable year, had the targeted jobs credit allowed under1491
sections 38, 51, and 52 of the Internal Revenue Code not been in1492
effect, but only to the extent such amount relates either to1493
income included in federal taxable income for the taxable year or1494
to income of the S portion of an electing small business trust for1495
the taxable year;1496

       (6) Deduct any interest or interest equivalent, net of1497
related expenses deducted in computing federal taxable income, on1498
public obligations and purchase obligations, but only to the1499
extent that such net amount relates either to income included in1500
federal taxable income for the taxable year or to income of the S1501
portion of an electing small business trust for the taxable year;1502

       (7) Add any loss or deduct any gain resulting from sale,1503
exchange, or other disposition of public obligations to the extent1504
that such loss has been deducted or such gain has been included in1505
computing either federal taxable income or income of the S portion1506
of an electing small business trust for the taxable year;1507

       (8) Except in the case of the final return of an estate, add1508
any amount deducted by the taxpayer on both its Ohio estate tax1509
return pursuant to section 5731.14 of the Revised Code, and on its1510
federal income tax return in determining federal taxable income;1511

       (9)(a) Deduct any amount included in federal taxable income1512
solely because the amount represents a reimbursement or refund of1513
expenses that in a previous year the decedent had deducted as an1514
itemized deduction pursuant to section 63 of the Internal Revenue1515
Code and applicable treasury regulations. The deduction otherwise1516
allowed under division (S)(9)(a) of this section shall be reduced1517
to the extent the reimbursement is attributable to an amount the1518
taxpayer or decedent deducted under this section in any taxable1519
year.1520

       (b) Add any amount not otherwise included in Ohio taxable1521
income for any taxable year to the extent that the amount is1522
attributable to the recovery during the taxable year of any amount1523
deducted or excluded in computing federal or Ohio taxable income1524
in any taxable year, but only to the extent such amount has not1525
been distributed to beneficiaries for the taxable year.1526

       (10) Deduct any portion of the deduction described in section 1527
1341(a)(2) of the Internal Revenue Code, for repaying previously 1528
reported income received under a claim of right, that meets both 1529
of the following requirements:1530

       (a) It is allowable for repayment of an item that was1531
included in the taxpayer's taxable income or the decedent's1532
adjusted gross income for a prior taxable year and did not qualify1533
for a credit under division (A) or (B) of section 5747.05 of the1534
Revised Code for that year.1535

       (b) It does not otherwise reduce the taxpayer's taxable1536
income or the decedent's adjusted gross income for the current or1537
any other taxable year.1538

       (11) Add any amount claimed as a credit under section1539
5747.059 of the Revised Code to the extent that the amount1540
satisfies either of the following:1541

       (a) The amount was deducted or excluded from the computation1542
of the taxpayer's federal taxable income as required to be1543
reported for the taxpayer's taxable year under the Internal1544
Revenue Code;1545

       (b) The amount resulted in a reduction in the taxpayer's1546
federal taxable income as required to be reported for any of the1547
taxpayer's taxable years under the Internal Revenue Code.1548

       (12) Deduct any amount, net of related expenses deducted in1549
computing federal taxable income, that a trust is required to1550
report as farm income on its federal income tax return, but only1551
if the assets of the trust include at least ten acres of land1552
satisfying the definition of "land devoted exclusively to1553
agricultural use" under section 5713.30 of the Revised Code,1554
regardless of whether the land is valued for tax purposes as such1555
land under sections 5713.30 to 5713.38 of the Revised Code. If the1556
trust is a pass-through entity investor, section 5747.231 of the1557
Revised Code applies in ascertaining if the trust is eligible to1558
claim the deduction provided by division (S)(12) of this section1559
in connection with the pass-through entity's farm income.1560

        Except for farm income attributable to the S portion of an1561
electing small business trust, the deduction provided by division1562
(S)(12) of this section is allowed only to the extent that the1563
trust has not distributed such farm income. Division (S)(12) of1564
this section applies only to taxable years of a trust beginning in1565
2002 or thereafter.1566

       (13) Add the net amount of income described in section 641(c)1567
of the Internal Revenue Code to the extent that amount is not1568
included in federal taxable income.1569

       (14) Add or deduct the amount the taxpayer would be required1570
to add or deduct under division (A)(20) or (21) of this section if1571
the taxpayer's Ohio taxable income were computed in the same1572
manner as an individual's Ohio adjusted gross income is computed1573
under this section. In the case of a trust, division (S)(14) of1574
this section applies only to any of the trust's taxable years1575
beginning in 2002 or thereafter.1576

       (15) Add any amount by which federal taxable income is 1577
reduced because of an election under section 172(b)(1)(H) of the 1578
Internal Revenue Code as amended by the "American Recovery and 1579
Reinvestment Act of 2009," 123 Stat. 115.1580

       (16)(a) Add any amount not included in federal taxable income 1581
for the taxable year because of an election under section 108(i) 1582
of the Internal Revenue Code.1583

        (b) Deduct any amount included in federal taxable income for 1584
the taxable year because of an election under section 108(i) of 1585
the Internal Revenue Code.1586

       (T) "School district income" and "school district income tax" 1587
have the same meanings as in section 5748.01 of the Revised Code.1588

       (U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)1589
of this section, "public obligations," "purchase obligations," and1590
"interest or interest equivalent" have the same meanings as in1591
section 5709.76 of the Revised Code.1592

       (V) "Limited liability company" means any limited liability1593
company formed under Chapter 1705. of the Revised Code or under1594
the laws of any other state.1595

       (W) "Pass-through entity investor" means any person who,1596
during any portion of a taxable year of a pass-through entity, is1597
a partner, member, shareholder, or equity investor in that1598
pass-through entity.1599

       (X) "Banking day" has the same meaning as in section 1304.011600
of the Revised Code.1601

       (Y) "Month" means a calendar month.1602

       (Z) "Quarter" means the first three months, the second three1603
months, the third three months, or the last three months of the1604
taxpayer's taxable year.1605

       (AA)(1) "Eligible institution" means a state university or1606
state institution of higher education as defined in section1607
3345.011 of the Revised Code, or a private, nonprofit college,1608
university, or other post-secondary institution located in this1609
state that possesses a certificate of authorization issued by the1610
Ohio board of regents pursuant to Chapter 1713. of the Revised1611
Code or a certificate of registration issued by the state board of1612
career colleges and schools under Chapter 3332. of the Revised1613
Code.1614

       (2) "Qualified tuition and fees" means tuition and fees1615
imposed by an eligible institution as a condition of enrollment or1616
attendance, not exceeding two thousand five hundred dollars in1617
each of the individual's first two years of post-secondary1618
education. If the individual is a part-time student, "qualified1619
tuition and fees" includes tuition and fees paid for the academic1620
equivalent of the first two years of post-secondary education1621
during a maximum of five taxable years, not exceeding a total of1622
five thousand dollars. "Qualified tuition and fees" does not1623
include:1624

       (a) Expenses for any course or activity involving sports,1625
games, or hobbies unless the course or activity is part of the1626
individual's degree or diploma program;1627

       (b) The cost of books, room and board, student activity fees,1628
athletic fees, insurance expenses, or other expenses unrelated to 1629
the individual's academic course of instruction;1630

       (c) Tuition, fees, or other expenses paid or reimbursed1631
through an employer, scholarship, grant in aid, or other1632
educational benefit program.1633

       (BB)(1) "Modified business income" means the business income1634
included in a trust's Ohio taxable income after such taxable1635
income is first reduced by the qualifying trust amount, if any.1636

       (2) "Qualifying trust amount" of a trust means capital gains1637
and losses from the sale, exchange, or other disposition of equity1638
or ownership interests in, or debt obligations of, a qualifying1639
investee to the extent included in the trust's Ohio taxable 1640
income, but only if the following requirements are satisfied:1641

        (a) The book value of the qualifying investee's physical 1642
assets in this state and everywhere, as of the last day of the 1643
qualifying investee's fiscal or calendar year ending immediately 1644
prior to the date on which the trust recognizes the gain or loss, 1645
is available to the trust.1646

       (b) The requirements of section 5747.011 of the Revised Code1647
are satisfied for the trust's taxable year in which the trust1648
recognizes the gain or loss.1649

        Any gain or loss that is not a qualifying trust amount is1650
modified business income, qualifying investment income, or1651
modified nonbusiness income, as the case may be.1652

       (3) "Modified nonbusiness income" means a trust's Ohio1653
taxable income other than modified business income, other than the1654
qualifying trust amount, and other than qualifying investment1655
income, as defined in section 5747.012 of the Revised Code, to the1656
extent such qualifying investment income is not otherwise part of1657
modified business income.1658

       (4) "Modified Ohio taxable income" applies only to trusts,1659
and means the sum of the amounts described in divisions (BB)(4)(a) 1660
to (c) of this section:1661

       (a) The fraction, calculated under section 5747.013, and 1662
applying section 5747.231 of the Revised Code, multiplied by the 1663
sum of the following amounts:1664

        (i) The trust's modified business income;1665

        (ii) The trust's qualifying investment income, as defined in 1666
section 5747.012 of the Revised Code, but only to the extent the 1667
qualifying investment income does not otherwise constitute1668
modified business income and does not otherwise constitute a1669
qualifying trust amount.1670

       (b) The qualifying trust amount multiplied by a fraction, the 1671
numerator of which is the sum of the book value of the qualifying 1672
investee's physical assets in this state on the last day of the 1673
qualifying investee's fiscal or calendar year ending immediately 1674
prior to the day on which the trust recognizes the qualifying 1675
trust amount, and the denominator of which is the sum of the book 1676
value of the qualifying investee's total physical assets 1677
everywhere on the last day of the qualifying investee's fiscal or 1678
calendar year ending immediately prior to the day on which the 1679
trust recognizes the qualifying trust amount. If, for a taxable 1680
year, the trust recognizes a qualifying trust amount with respect 1681
to more than one qualifying investee, the amount described in 1682
division (BB)(4)(b) of this section shall equal the sum of the1683
products so computed for each such qualifying investee.1684

       (c)(i) With respect to a trust or portion of a trust that is 1685
a resident as ascertained in accordance with division (I)(3)(d) of 1686
this section, its modified nonbusiness income.1687

        (ii) With respect to a trust or portion of a trust that is1688
not a resident as ascertained in accordance with division1689
(I)(3)(d) of this section, the amount of its modified nonbusiness1690
income satisfying the descriptions in divisions (B)(2) to (5) of1691
section 5747.20 of the Revised Code, except as otherwise provided 1692
in division (BB)(4)(c)(ii) of this section. With respect to a 1693
trust or portion of a trust that is not a resident as ascertained 1694
in accordance with division (I)(3)(d) of this section, the trust's 1695
portion of modified nonbusiness income recognized from the sale, 1696
exchange, or other disposition of a debt interest in or equity 1697
interest in a section 5747.212 entity, as defined in section 1698
5747.212 of the Revised Code, without regard to division (A) of 1699
that section, shall not be allocated to this state in accordance 1700
with section 5747.20 of the Revised Code but shall be apportioned 1701
to this state in accordance with division (B) of section 5747.212 1702
of the Revised Code without regard to division (A) of that 1703
section.1704

       If the allocation and apportionment of a trust's income under1705
divisions (BB)(4)(a) and (c) of this section do not fairly1706
represent the modified Ohio taxable income of the trust in this1707
state, the alternative methods described in division (C) of1708
section 5747.21 of the Revised Code may be applied in the manner1709
and to the same extent provided in that section.1710

       (5)(a) Except as set forth in division (BB)(5)(b) of this 1711
section, "qualifying investee" means a person in which a trust has 1712
an equity or ownership interest, or a person or unit of government 1713
the debt obligations of either of which are owned by a trust. For 1714
the purposes of division (BB)(2)(a) of this section and for the 1715
purpose of computing the fraction described in division (BB)(4)(b) 1716
of this section, all of the following apply:1717

        (i) If the qualifying investee is a member of a qualifying1718
controlled group on the last day of the qualifying investee's1719
fiscal or calendar year ending immediately prior to the date on1720
which the trust recognizes the gain or loss, then "qualifying1721
investee" includes all persons in the qualifying controlled group1722
on such last day.1723

        (ii) If the qualifying investee, or if the qualifying1724
investee and any members of the qualifying controlled group of1725
which the qualifying investee is a member on the last day of the1726
qualifying investee's fiscal or calendar year ending immediately1727
prior to the date on which the trust recognizes the gain or loss,1728
separately or cumulatively own, directly or indirectly, on the1729
last day of the qualifying investee's fiscal or calendar year1730
ending immediately prior to the date on which the trust recognizes1731
the qualifying trust amount, more than fifty per cent of the1732
equity of a pass-through entity, then the qualifying investee and1733
the other members are deemed to own the proportionate share of the1734
pass-through entity's physical assets which the pass-through1735
entity directly or indirectly owns on the last day of the1736
pass-through entity's calendar or fiscal year ending within or1737
with the last day of the qualifying investee's fiscal or calendar1738
year ending immediately prior to the date on which the trust1739
recognizes the qualifying trust amount.1740

        (iii) For the purposes of division (BB)(5)(a)(iii) of this1741
section, "upper level pass-through entity" means a pass-through1742
entity directly or indirectly owning any equity of another1743
pass-through entity, and "lower level pass-through entity" means1744
that other pass-through entity.1745

        An upper level pass-through entity, whether or not it is also 1746
a qualifying investee, is deemed to own, on the last day of the 1747
upper level pass-through entity's calendar or fiscal year, the1748
proportionate share of the lower level pass-through entity's1749
physical assets that the lower level pass-through entity directly1750
or indirectly owns on the last day of the lower level pass-through1751
entity's calendar or fiscal year ending within or with the last1752
day of the upper level pass-through entity's fiscal or calendar1753
year. If the upper level pass-through entity directly and1754
indirectly owns less than fifty per cent of the equity of the1755
lower level pass-through entity on each day of the upper level1756
pass-through entity's calendar or fiscal year in which or with1757
which ends the calendar or fiscal year of the lower level1758
pass-through entity and if, based upon clear and convincing1759
evidence, complete information about the location and cost of the1760
physical assets of the lower pass-through entity is not available1761
to the upper level pass-through entity, then solely for purposes1762
of ascertaining if a gain or loss constitutes a qualifying trust1763
amount, the upper level pass-through entity shall be deemed as1764
owning no equity of the lower level pass-through entity for each1765
day during the upper level pass-through entity's calendar or1766
fiscal year in which or with which ends the lower level1767
pass-through entity's calendar or fiscal year. Nothing in division 1768
(BB)(5)(a)(iii) of this section shall be construed to provide for 1769
any deduction or exclusion in computing any trust's Ohio taxable 1770
income.1771

       (b) With respect to a trust that is not a resident for the1772
taxable year and with respect to a part of a trust that is not a1773
resident for the taxable year, "qualifying investee" for that1774
taxable year does not include a C corporation if both of the1775
following apply:1776

       (i) During the taxable year the trust or part of the trust1777
recognizes a gain or loss from the sale, exchange, or other1778
disposition of equity or ownership interests in, or debt1779
obligations of, the C corporation.1780

       (ii) Such gain or loss constitutes nonbusiness income.1781

        (6) "Available" means information is such that a person is 1782
able to learn of the information by the due date plus extensions, 1783
if any, for filing the return for the taxable year in which the 1784
trust recognizes the gain or loss.1785

        (CC) "Qualifying controlled group" has the same meaning as in 1786
section 5733.04 of the Revised Code.1787

        (DD) "Related member" has the same meaning as in section1788
5733.042 of the Revised Code.1789

       (EE)(1) For the purposes of division (EE) of this section: 1790

       (a) "Qualifying person" means any person other than a 1791
qualifying corporation.1792

       (b) "Qualifying corporation" means any person classified for 1793
federal income tax purposes as an association taxable as a 1794
corporation, except either of the following:1795

       (i) A corporation that has made an election under subchapter 1796
S, chapter one, subtitle A, of the Internal Revenue Code for its 1797
taxable year ending within, or on the last day of, the investor's 1798
taxable year;1799

       (ii) A subsidiary that is wholly owned by any corporation 1800
that has made an election under subchapter S, chapter one, 1801
subtitle A of the Internal Revenue Code for its taxable year 1802
ending within, or on the last day of, the investor's taxable year.1803

       (2) For the purposes of this chapter, unless expressly stated 1804
otherwise, no qualifying person indirectly owns any asset directly 1805
or indirectly owned by any qualifying corporation.1806

       (FF) For purposes of this chapter and Chapter 5751. of the 1807
Revised Code:1808

       (1) "Trust" does not include a qualified pre-income tax 1809
trust.1810

       (2) A "qualified pre-income tax trust" is any pre-income tax 1811
trust that makes a qualifying pre-income tax trust election as 1812
described in division (FF)(3) of this section.1813

       (3) A "qualifying pre-income tax trust election" is an 1814
election by a pre-income tax trust to subject to the tax imposed 1815
by section 5751.02 of the Revised Code the pre-income tax trust 1816
and all pass-through entities of which the trust owns or 1817
controls, directly, indirectly, or constructively through related 1818
interests, five per cent or more of the ownership or equity 1819
interests. The trustee shall notify the tax commissioner in 1820
writing of the election on or before April 15, 2006. The 1821
election, if timely made, shall be effective on and after January 1822
1, 2006, and shall apply for all tax periods and tax years until 1823
revoked by the trustee of the trust.1824

       (4) A "pre-income tax trust" is a trust that satisfies all of 1825
the following requirements:1826

       (a) The document or instrument creating the trust was 1827
executed by the grantor before January 1, 1972;1828

       (b) The trust became irrevocable upon the creation of the 1829
trust; and1830

       (c) The grantor was domiciled in this state at the time the 1831
trust was created.1832

       Section 4. That the existing version of section 5747.01 of 1833
the Revised Code that is scheduled to take effect January 1, 2010, 1834
is hereby repealed.1835

       Section 5. Sections 3 and 4 of this act shall take effect 1836
January 1, 2010.1837

       Section 6. That Section 265.10 of Am. Sub. H.B. 1 of the 1838
128th General Assembly be amended to read as follows:1839

       Sec. 265.10. EDU DEPARTMENT OF EDUCATION1840

General Revenue Fund1841

GRF 200100 Personal Services $ 10,490,789 $ 10,723,972 1842
GRF 200320 Maintenance and Equipment $ 3,110,071 $ 3,144,897 1843
GRF 200408 Early Childhood Education $ 23,268,341 $ 23,268,341 1844
GRF 200416 Career-Technical Education Match $ 2,233,195 $ 2,233,195 1845
GRF 200420 Computer/Application/ Network Development $ 4,880,871 $ 4,880,871 1846
GRF 200421 Alternative Education Programs $ 7,814,479 $ 7,918,749 1847
GRF 200422 School Management Assistance $ 1,950,521 $ 3,230,469 1848
GRF 200424 Policy Analysis $ 356,311 $ 361,065 1849
GRF 200425 Tech Prep Consortia Support $ 1,243,943 $ 1,260,542 1850
GRF 200426 Ohio Educational Computer Network $ 20,156,602 $ 20,425,556 1851
GRF 200427 Academic Standards $ 5,300,074 $ 5,300,074 1852
GRF 200431 School Improvement Initiatives $ 7,294,175 $ 7,391,503 1853
GRF 200437 Student Assessment $ 55,954,648 $ 56,703,265 1854
GRF 200439 Accountability/Report Cards $ 3,804,673 $ 3,804,673 1855
GRF 200442 Child Care Licensing $ 865,590 $ 877,140 1856
GRF 200446 Education Management Information System $ 13,199,152 $ 11,934,284 1857
GRF 200447 GED Testing $ 975,536 $ 988,553 1858
GRF 200448 Educator Preparation $ 1,310,750 $ 1,328,240 1859
GRF 200455 Community Schools $ 1,000,000 $ 1,000,000 1860
GRF 200457 STEM Initiatives $ 5,000,000 $ 5,000,000 1861
GRF 200458 School Employees Health Care Board $ 800,000 $ 800,000 1862
GRF 200502 Pupil Transportation $ 448,022,619 $ 462,822,619 1863
GRF 200505 School Lunch Match $ 9,100,000 $ 9,100,000 1864
GRF 200511 Auxiliary Services $ 111,979,388 135,963,158 $ 111,979,388 135,963,158 1865
GRF 200532 Nonpublic Administrative Cost Reimbursement $ 50,838,939 61,273,632 $ 50,838,939 61,273,632 1866
GRF 200540 Special Education Enhancements $ 134,150,233 $ 135,820,668 1867
GRF 200545 Career-Technical Education Enhancements $ 7,752,662 $ 7,802,699 1868
GRF 200550 Foundation Funding $ 5,130,669,418 $ 4,746,289,372 1869
GRF 200551 Foundation Funding – Federal Stimulus $ 387,583,913 $ 457,449,362 1870
GRF 200578 Violence Prevention and School Safety $ 200,000 $ 200,000 1871
GRF 200901 Property Tax Allocation - Education $ 1,053,262,363 $ 1,020,655,157 1872
TOTAL GRF General Revenue Fund $ 7,504,569,256 7,538,987,719 $ 7,175,533,593 7,209,952,056 1873

General Services Fund Group1874

1380 200606 Computer Services-Operational Support $ 7,600,091 $ 7,600,091 1875
4520 200638 Miscellaneous Educational Services $ 275,000 $ 275,000 1876
4L20 200681 Teacher Certification and Licensure $ 8,013,206 $ 8,147,756 1877
5960 200656 Ohio Career Information System $ 529,761 $ 529,761 1878
5H30 200687 School District Solvency Assistance $ 18,000,000 $ 18,000,000 1879
TOTAL GSF General Services 1880
Fund Group $ 34,418,058 $ 34,552,608 1881

Federal Special Revenue Fund Group1882

3090 200601 Educationally Disadvantaged Programs $ 8,405,512 $ 8,405,512 1883
3670 200607 School Food Services $ 6,324,707 $ 6,577,695 1884
3680 200614 Veterans' Training $ 778,349 $ 793,846 1885
3690 200616 Career-Technical Education Federal Enhancement $ 5,000,000 $ 5,000,000 1886
3700 200624 Education of Exceptional Children $ 2,664,000 $ 2,755,000 1887
3740 200647 Troops to Teachers $ 100,000 $ 100,000 1888
3780 200660 Learn and Serve $ 619,211 $ 619,211 1889
3AF0 200603 Schools Medicaid Administrative Claims $ 639,000 $ 639,000 1890
3AN0 200671 School Improvement Grants $ 17,909,676 $ 17,936,675 1891
3AX0 200698 Improving Health and Educational Outcomes of Young People $ 630,954 $ 630,954 1892
3BK0 200628 Longitudinal Data Systems $ 100,000 $ 0 1893
3BV0 200636 Character Education $ 700,000 $ 0 1894
3C50 200661 Early Childhood Education $ 14,189,711 $ 14,554,749 1895
3CF0 200644 Foreign Language Assistance $ 25,000 $ 0 1896
3CG0 200646 Teacher Incentive Fund $ 3,007,975 $ 1,157,834 1897
3D10 200664 Drug Free Schools $ 13,347,966 $ 13,347,966 1898
3D20 200667 Honors Scholarship Program $ 6,990,000 $ 6,985,000 1899
3DJ0 200699 IDEA Part B - Federal Stimulus $ 218,868,026 $ 218,868,026 1900
3DK0 200642 Title 1A - Federal Stimulus $ 186,336,737 $ 186,336,737 1901
3DL0 200650 IDEA Preschool - Federal Stimulus $ 6,679,679 $ 6,679,679 1902
3DM0 200651 Title IID Technology - Federal Stimulus $ 11,951,000 $ 11,951,000 1903
3DP0 200652 Title I School Improvement - Federal Stimulus $ 54,221,000 $ 54,221,000 1904
3H90 200605 Head Start Collaboration Project $ 225,000 $ 225,000 1905
3L60 200617 Federal School Lunch $ 295,421,000 $ 310,150,675 1906
3L70 200618 Federal School Breakfast $ 80,850,000 $ 84,892,500 1907
3L80 200619 Child/Adult Food Programs $ 89,250,000 $ 93,712,500 1908
3L90 200621 Career-Technical Education Basic Grant $ 48,029,701 $ 48,029,701 1909
3M00 200623 ESEA Title 1A $ 530,000,000 $ 530,010,000 1910
3M10 200678 Innovative Education $ 1,000,000 $ 0 1911
3M20 200680 Individuals with Disabilities Education Act $ 413,391,594 $ 421,241,163 1912
3S20 200641 Education Technology $ 9,487,397 $ 9,487,397 1913
3T40 200613 Public Charter Schools $ 14,275,618 $ 14,291,353 1914
3Y20 200688 21st Century Community Learning Centers $ 36,000,000 $ 36,000,000 1915
3Y40 200632 Reading First $ 27,366,373 $ 24,455,172 1916
3Y60 200635 Improving Teacher Quality $ 101,778,397 $ 101,778,400 1917
3Y70 200689 English Language Acquisition $ 8,142,299 $ 8,142,299 1918
3Y80 200639 Rural and Low Income Technical Assistance $ 1,500,000 $ 1,500,000 1919
3Z20 200690 State Assessments $ 12,923,799 $ 12,923,799 1920
3Z30 200645 Consolidated Federal Grant Administration $ 8,499,279 $ 8,499,280 1921
3Z70 200697 General Supervisory Enhancement Grant $ 887,319 $ 0 1922
TOTAL FED Federal Special 1923
Revenue Fund Group $ 2,238,516,279 $ 2,262,899,123 1924

State Special Revenue Fund Group1925

4540 200610 Guidance and Testing $ 450,000 $ 450,000 1926
4550 200608 Commodity Foods $ 24,000,000 $ 24,000,000 1927
4R70 200695 Indirect Operational Support $ 6,050,000 $ 6,250,000 1928
4V70 200633 Interagency Operational Support $ 1,111,838 $ 1,117,725 1929
5980 200659 Auxiliary Services Reimbursement $ 1,328,910 $ 1,328,910 1930
5BB0 200696 State Action for Education Leadership $ 1,250,000 $ 600,000 1931
5BJ0 200626 Half-Mill Maintenance Equalization $ 16,100,000 $ 16,600,000 1932
5U20 200685 National Education Statistics $ 300,000 $ 300,000 1933
5W20 200663 Early Learning Initiative $ 2,200,000 $ 2,200,000 1934
5X90 200911 NGA STEM $ 100,000 $ 0 1935
6200 200615 Educational Improvement Grants $ 3,000,000 $ 3,000,000 1936
TOTAL SSR State Special Revenue 1937
Fund Group $ 55,890,748 $ 55,846,635 1938

Lottery Profits Education Fund Group1939

7017 200612 Foundation Funding $ 990,236,905 $ 1,277,271,428 1940
TOTAL LPE Lottery Profits 1941
Education Fund Group $ 990,236,905 $ 1,277,271,428 1942

Revenue Distribution Fund Group1943

7047 200909 School District Property Tax Replacement-Business $ 1,150,207,366 $ 1,150,207,366 1944
7053 200900 School District Property Tax Replacement-Utility $ 91,123,523 $ 91,123,523 1945
TOTAL RDF Revenue Distribution 1946
Fund Group $ 1,241,330,889 $ 1,241,330,889 1947
TOTAL ALL BUDGET FUND GROUPS $ 12,064,962,135 12,099,380,598 $ 12,047,434,276 12,081,852,739 1948


       Section 7.  That existing Section 265.10 of Am. Sub. H.B. 1 1950
of the 128th General Assembly is hereby repealed.1951

       Section 8.  On the effective date of this section, or as soon 1952
as possible thereafter, the Director of Budget and Management 1953
shall transfer the cash balances in the OMVI Enforcement/Education 1954
Fund (Fund 83G0), the Elementary School Seat Belt Program Fund 1955
(Fund 83N0), and the Seat Belt Education Program Fund (Fund 8440), 1956
which are used by the Department of Public Safety, to the General 1957
Revenue Fund. 1958

       Section 9.  Notwithstanding division (G)(5)(a) of section 1959
4511.19 of the Revised Code, in fiscal year 2010 and fiscal year 1960
2011, twenty-five dollars of the fine imposed under division 1961
(G)(1)(a)(iii) of section 4511.19 of the Revised Code, thirty-five 1962
dollars of the fine imposed under division (G)(1)(b)(iii) of 1963
section 4511.19 of the Revised Code, one hundred twenty-three 1964
dollars of the fine imposed under division (G)(1)(c)(iii) of 1965
section 4511.19 of the Revised Code, and two hundred ten dollars 1966
of the fine imposed under division (G)(1)(d)(iii) or (e)(iii) of 1967
section 4511.19 of the Revised Code, shall be paid to the General 1968
Revenue Fund.1969

       Section 10.  Notwithstanding divisions (E)(1) and (2) of 1970
section 4513.263 of the Revised Code, in fiscal year 2010 and 1971
fiscal year 2011, sixteen per cent of all fines collected for 1972
violations of division (B) of section 4513.263 of the Revised 1973
Code, or for violations of any ordinance or resolution of a 1974
political subdivision that is substantively comparable to that 1975
division, shall be deposited into the General Revenue Fund. The 1976
remaining eighty-four per cent shall be distributed as specified 1977
in divisions (E)(3), (4), and (5) of section 4513.263 of the 1978
Revised Code. 1979

       Section 11.  The uncodified sections of law contained in this 1980
act, and the items of law of which the uncodified sections of law 1981
contained in this act are composed, are not subject to the 1982
referendum. Therefore, under Ohio Constitution, Article II, 1983
Section 1d and section 1.471 of the Revised Code, the uncodified 1984
sections of law contained in this act, and the items of law of 1985
which the uncodified sections of law contained in this act are 1986
composed, go into immediate effect when this act becomes law.1987