As Introduced

129th General Assembly
Regular Session
2011-2012
H. B. No. 10


Representative Sears 

Cosponsors: Representatives Adams, J., Adams, R., Wachtmann 



A BILL
To amend sections 5747.98 and 5751.98 and to enact 1
sections 3746.241, 5747.78, and 5751.54 of the 2
Revised Code to authorize refundable tax credits 3
through 2017 for the completion of a voluntary 4
action to remediate a contaminated site and for 5
the return of such sites to productive use, and to 6
exempt persons through 2017 who have been issued 7
covenants not to sue under the Voluntary Action 8
Program from certain fees and penalties for one 9
year after the issuance of such a covenant.10


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

       Section 1. That sections 5747.98 and 5751.98 be amended and 11
sections 3746.241, 5747.78, and 5751.54 of the Revised Code be 12
enacted to read as follows:13

       Sec. 3746.241. A person to which a covenant not to sue is 14
issued under section 3746.12 of the Revised Code concerning a 15
voluntary action that is initiated not later than December 31, 16
2017, is exempt from any fees or civil or administrative penalties 17
that are authorized to be levied or imposed under any 18
environmental law with respect to the property that is the subject 19
of the covenant not to sue for a period of one year after the 20
issuance of the covenant. The director of environmental protection 21
shall adopt rules in accordance with Chapter 119. of the Revised 22
Code that are necessary to implement this section.23

       For purposes of this section, a voluntary action is initiated 24
upon the commencement of a phase I property assessment under this 25
chapter.26

       As used in this section, "environmental law" means this 27
chapter or Chapter 3704., 3734., 3745., 3750., 3751., 3752., 28
6109., or 6111. of the Revised Code or a rule adopted under any of 29
those chapters.30

       Sec. 5747.78.  (A) As used in this section:31

       (1) "Voluntary action," "remedial activities," "property," 32
and "covenant not to sue" have the same meanings as in section 33
3746.01 of the Revised Code.34

       (2) "Remediation expenditures" means expenditures that are 35
made directly to conduct remedial activities on property that is 36
the subject of a voluntary action for which a covenant not to sue 37
has been issued under Chapter 3746. of the Revised Code. 38
"Remediation expenditures" does not include expenditures for 39
remedial activities derived from grants or other transfers of 40
money from governmental entities to a taxpayer for which there is 41
no repayment obligation.42

       (3) "Pass-through entity" includes a sole proprietorship.43

       (4) Property is used for a "productive use" if it is used by 44
any person to conduct a trade or business or if a certificate of 45
occupancy has been issued for the property by the local authority 46
having jurisdiction to issue such a certificate and the property 47
is suitable for the conduct of a trade or business. For the 48
purposes of this division, the use of property to conduct a trade 49
or business includes a pass-through entity leasing the property to 50
lessees for commercial, industrial, or residential purposes.51

       (5) A voluntary action is "initiated" upon commencement of a 52
phase I property assessment under Chapter 3746. of the Revised 53
Code.54

       (B) There is allowed a refundable credit against the tax 55
imposed by section 5747.02 of the Revised Code for a taxpayer that 56
is an equity owner of a pass-through entity to which a covenant 57
not to sue has been issued under Chapter 3746. of the Revised Code 58
on or after the effective date of this section. The credit equals 59
the taxpayer's distributive or proportionate share of twenty-five 60
per cent of the remediation expenditures paid or incurred by the 61
entity.62

       The credit shall be claimed for the taxpayer's taxable year 63
that ends in the pass-through entity's taxable year in which the 64
covenant not to sue was issued to the entity by the director of 65
environmental protection. The credit may not be claimed for any 66
remediation expenditures paid or incurred for a voluntary action 67
initiated after December 31, 2017.68

       A taxpayer may claim a credit under this division for each 69
voluntary action for which a separate covenant not to sue was 70
issued to a pass-through entity of which the taxpayer is an equity 71
owner.72

       (C) There is allowed an additional refundable credit against 73
the tax imposed by section 5747.02 of the Revised Code for a 74
taxpayer that qualifies for the credit under division (B) of this 75
section if the property that was the subject of the covenant not 76
to sue is used for a productive use. The credit equals the sum of 77
twenty-five per cent of the remediation expenditures paid or 78
incurred by the pass-through entity to which the covenant was 79
issued. A credit may be claimed under this division regardless of 80
whether a credit was claimed under division (B) of this section.81

       The credit shall be claimed for the taxpayer's taxable year 82
that ends in the pass-through entity's taxable year in which the 83
property is first used for a productive use after the covenant not 84
to sue was issued. The credit may not be claimed for any 85
remediation expenditures paid or incurred for a voluntary action 86
initiated after December 31, 2017.87

       A taxpayer may claim a credit under this division for each 88
property that is the subject of a voluntary action for which a 89
separate covenant not to sue was issued to a pass-through entity 90
of which the taxpayer is an equity owner. A taxpayer may not claim 91
the credit allowed under this division more than once for each 92
property for which a covenant not to sue was issued.93

       (D) The credits allowed by this section shall be claimed in 94
the order prescribed by section 5747.98 of the Revised Code. If 95
the amount of the credits exceeds the amount of tax otherwise due 96
after deducting all other credits claimed in that order, the 97
excess shall be refunded to the taxpayer.98

       (E) A credit may not be claimed under this section on the 99
basis of a voluntary action on the basis of which a credit was 100
claimed under section 5751.54 of the Revised Code.101

       Sec. 5747.98.  (A) To provide a uniform procedure for 102
calculating the amount of tax due under section 5747.02 of the 103
Revised Code, a taxpayer shall claim any credits to which the 104
taxpayer is entitled in the following order:105

       (1) The retirement income credit under division (B) of 106
section 5747.055 of the Revised Code;107

       (2) The senior citizen credit under division (C) of section 108
5747.05 of the Revised Code;109

       (3) The lump sum distribution credit under division (D) of 110
section 5747.05 of the Revised Code;111

       (4) The dependent care credit under section 5747.054 of the 112
Revised Code;113

       (5) The lump sum retirement income credit under division (C) 114
of section 5747.055 of the Revised Code;115

       (6) The lump sum retirement income credit under division (D) 116
of section 5747.055 of the Revised Code;117

       (7) The lump sum retirement income credit under division (E) 118
of section 5747.055 of the Revised Code;119

       (8) The low-income credit under section 5747.056 of the 120
Revised Code;121

       (9) The credit for displaced workers who pay for job training 122
under section 5747.27 of the Revised Code;123

       (10) The campaign contribution credit under section 5747.29 124
of the Revised Code;125

       (11) The twenty-dollar personal exemption credit under 126
section 5747.022 of the Revised Code;127

       (12) The joint filing credit under division (G) of section 128
5747.05 of the Revised Code;129

       (13) The nonresident credit under division (A) of section 130
5747.05 of the Revised Code;131

       (14) The credit for a resident's out-of-state income under 132
division (B) of section 5747.05 of the Revised Code;133

       (15) The credit for employers that enter into agreements with 134
child day-care centers under section 5747.34 of the Revised Code;135

       (16) The credit for employers that reimburse employee child 136
care expenses under section 5747.36 of the Revised Code;137

       (17) The credit for adoption of a minor child under section 138
5747.37 of the Revised Code;139

       (18) The credit for purchases of lights and reflectors under 140
section 5747.38 of the Revised Code;141

       (19) The job retention credit under division (B) of section 142
5747.058 of the Revised Code;143

       (20) The credit for selling alternative fuel under section 144
5747.77 of the Revised Code;145

       (21) The second credit for purchases of new manufacturing 146
machinery and equipment and the credit for using Ohio coal under 147
section 5747.31 of the Revised Code;148

       (22) The job training credit under section 5747.39 of the 149
Revised Code;150

       (23) The enterprise zone credit under section 5709.66 of the 151
Revised Code;152

       (24) The credit for the eligible costs associated with a 153
voluntary action under section 5747.32 of the Revised Code;154

       (25) The credit for employers that establish on-site child 155
day-care centers under section 5747.35 of the Revised Code;156

       (26) The ethanol plant investment credit under section 157
5747.75 of the Revised Code;158

       (27) The credit for purchases of qualifying grape production 159
property under section 5747.28 of the Revised Code;160

       (28) The export sales credit under section 5747.057 of the 161
Revised Code;162

       (29) The credit for research and development and technology 163
transfer investors under section 5747.33 of the Revised Code;164

       (30) The enterprise zone credits under section 5709.65 of the 165
Revised Code;166

       (31) The research and development credit under section 167
5747.331 of the Revised Code;168

       (32) The credit for rehabilitating a historic building under 169
section 5747.76 of the Revised Code;170

       (33) The refundable credit for rehabilitating a historic 171
building under section 5747.76 of the Revised Code;172

       (34) The refundable jobs creation credit under division (A) 173
of section 5747.058 of the Revised Code;174

       (35) The refundable credit for taxes paid by a qualifying 175
entity granted under section 5747.059 of the Revised Code;176

       (36) The refundable credits for taxes paid by a qualifying 177
pass-through entity granted under division (J) of section 5747.08 178
of the Revised Code;179

       (37) The refundable credit for tax withheld under division 180
(B)(1) of section 5747.062 of the Revised Code;181

       (38) The refundable credit for tax withheld under section 182
5747.063 of the Revised Code;183

       (39) The refundable credit under section 5747.80 of the 184
Revised Code for losses on loans made to the Ohio venture capital 185
program under sections 150.01 to 150.10 of the Revised Code;186

       (40) The refundable motion picture production credit under 187
section 5747.66 of the Revised Code;188

       (41) The refundable credits for voluntary actions authorized 189
under section 5747.78 of the Revised Code.190

       (B) For any credit, except the refundable credits enumerated 191
in this section and the credit granted under division (I) of 192
section 5747.08 of the Revised Code, the amount of the credit for 193
a taxable year shall not exceed the tax due after allowing for any 194
other credit that precedes it in the order required under this 195
section. Any excess amount of a particular credit may be carried 196
forward if authorized under the section creating that credit. 197
Nothing in this chapter shall be construed to allow a taxpayer to 198
claim, directly or indirectly, a credit more than once for a 199
taxable year.200

       Sec. 5751.54.  (A) As used in this section:201

       (1) "Voluntary action," "remedial activities," "property," 202
and "covenant not to sue" have the same meanings as in section 203
3746.01 of the Revised Code.204

       (2) "Remediation expenditures" means expenditures that are 205
made directly to conduct remedial activities on property that is 206
the subject of a voluntary action for which a covenant not to sue 207
has been issued under Chapter 3746. of the Revised Code. 208
"Remediation expenditures" does not include expenditures for 209
remedial activities derived from grants or other transfers of 210
money from governmental entities for which there is no repayment 211
obligation.212

       (3) Property is used for a "productive use" if it is used by 213
any person to conduct a trade or business or if a certificate of 214
occupancy has been issued for the property by the local authority 215
having jurisdiction to issue such a certificate and the property 216
is suitable for the conduct of a trade or business. For the 217
purposes of this division, the use of property to conduct a trade 218
or business includes a taxpayer leasing the property to lessees 219
for commercial, industrial, or residential purposes.220

       (4) A voluntary action is "initiated" upon commencement of a 221
phase I property assessment under Chapter 3746. of the Revised 222
Code.223

       (B) There is allowed a refundable credit against the tax 224
imposed by this chapter for a taxpayer to which a covenant not to 225
sue has been issued under Chapter 3746. of the Revised Code on or 226
after the effective date of this section. The credit equals 227
twenty-five per cent of the remediation expenditures paid or 228
incurred by the taxpayer.229

       If the taxpayer is a calendar year taxpayer, the credit shall 230
be claimed for the tax period that includes the day on which the 231
covenant not to sue was issued to the taxpayer by the director of 232
environmental protection. If the taxpayer is a calendar quarter 233
taxpayer, one-fourth of the credit amount shall be claimed for the 234
tax period that includes the day on which the covenant not to sue 235
was issued and one-fourth of the credit amount shall be claimed in 236
each of the three ensuing tax periods.237

       A taxpayer may claim a credit under this division for each 238
voluntary action for which a covenant not to sue was issued to the 239
taxpayer. The credit may not be claimed for any remediation 240
expenditures paid or incurred for a voluntary action initiated 241
after December 31, 2017.242

       (C) There is allowed an additional refundable credit against 243
the tax imposed by this chapter for a taxpayer that qualifies for 244
the credit under division (B) of this section if the property that 245
was the subject of the covenant not to sue is owned by the 246
taxpayer and the property is used for a productive use. The credit 247
equals twenty-five per cent of the remediation expenditures paid 248
or incurred by the taxpayer. A credit may be claimed under this 249
division regardless of whether a credit was claimed under division 250
(B) of this section.251

       If the taxpayer is a calendar year taxpayer, the credit shall 252
be claimed for the tax period in which the property is first used 253
for a productive use after the covenant not to sue was issued. If 254
the taxpayer is a calendar quarter taxpayer, one-fourth of the 255
credit amount shall be claimed for the tax period in which the 256
property is first used for a productive use after the covenant not 257
to sue was issued, and one-fourth of the credit amount shall be 258
claimed in each of the three ensuing tax periods. The credit may 259
not be claimed for any remediation expenditures paid or incurred 260
for a voluntary action initiated after December 31, 2017.261

       A taxpayer may claim a credit under this division for each 262
property that is the subject of a voluntary action for which a 263
separate covenant not to sue was issued. The credit may not be 264
claimed more than once for each property for which a covenant not 265
to sue was issued.266

       (D) The credits allowed by this section shall be claimed in 267
the order prescribed by section 5751.98 of the Revised Code. If 268
the amount of the credits exceeds the amount of tax otherwise due 269
after deducting all other credits claimed in that order, the 270
excess shall be refunded to the taxpayer.271

       (E) A credit may not be claimed under this section on the 272
basis of a voluntary action on the basis of which a credit was 273
claimed under section 5747.78 of the Revised Code.274

       Sec. 5751.98.  (A) To provide a uniform procedure for 275
calculating the amount of tax due under this chapter, a taxpayer 276
shall claim any credits to which it is entitled in the following 277
order:278

        (1) The nonrefundable jobs retention credit under division 279
(B) of section 5751.50 of the Revised Code;280

        (2) The nonrefundable credit for qualified research expenses 281
under division (B) of section 5751.51 of the Revised Code;282

        (3) The nonrefundable credit for a borrower's qualified 283
research and development loan payments under division (B) of 284
section 5751.52 of the Revised Code;285

        (4) The nonrefundable credit for calendar years 2010 to 2029 286
for unused net operating losses under division (B) of section 287
5751.53 of the Revised Code;288

        (5) The refundable credit for calendar year 2030 for unused 289
net operating losses under division (C) of section 5751.53 of the 290
Revised Code;291

        (6) The refundable jobs creation credit under division (A) of 292
section 5751.50 of the Revised Code;293

       (7) The refundable credits for voluntary actions authorized 294
under section 5751.54 of the Revised Code.295

        (B) For any credit except the creditrefundable credits296
enumerated in division (A)(4) of this section, the amount of the 297
credit for a tax period shall not exceed the tax due after 298
allowing for any other credit that precedes it in the order 299
required under this section. Any excess amount of a particular 300
credit may be carried forward if authorized under the section 301
creating the credit.302

       Section 2.  That existing sections 5747.98 and 5751.98 of the 303
Revised Code are hereby repealed.304