As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 220

Representatives Beck, Baker 

Cosponsors: Representatives Adams, J., Blair, Blessing, Butler, Combs, Thompson, Rosenberger 

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A BILL

To amend sections 5747.01 and 5751.98 and to enact

1

section 5751.54 of the Revised Code to allow a

2

refundable commercial activity tax credit for

3

investment losses recognized by foreign

4

entrepreneur investors who invest in certain

5

projects in Ohio.

6

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

Section 1. That sections 5747.01 and 5751.98 be amended and	7
section 5751.54 of the Revised Code be enacted to read as follows:	8

Sec. 5747.01.  Except as otherwise expressly provided or	9
clearly appearing from the context, any term used in this chapter	10
that is not otherwise defined in this section has the same meaning	11
as when used in a comparable context in the laws of the United	12
States relating to federal income taxes or if not used in a	13
comparable context in those laws, has the same meaning as in	14
section 5733.40 of the Revised Code. Any reference in this chapter	15
to the Internal Revenue Code includes other laws of the United	16
States relating to federal income taxes.	17

As used in this chapter:

18

(A) "Adjusted gross income" or "Ohio adjusted gross income"	19
means federal adjusted gross income, as defined and used in the	20
Internal Revenue Code, adjusted as provided in this section:	21

(1) Add interest or dividends on obligations or securities of	22
any state or of any political subdivision or authority of any	23
state, other than this state and its subdivisions and authorities.	24

(2) Add interest or dividends on obligations of any	25
authority, commission, instrumentality, territory, or possession	26
of the United States to the extent that the interest or dividends	27
are exempt from federal income taxes but not from state income	28
taxes.	29

(3) Deduct interest or dividends on obligations of the United	30
States and its territories and possessions or of any authority,	31
commission, or instrumentality of the United States to the extent	32
that the interest or dividends are included in federal adjusted	33
gross income but exempt from state income taxes under the laws of	34
the United States.	35

(4) Deduct disability and survivor's benefits to the extent	36
included in federal adjusted gross income.	37

(5) Deduct benefits under Title II of the Social Security Act	38
and tier 1 railroad retirement benefits to the extent included in	39
federal adjusted gross income under section 86 of the Internal	40
Revenue Code.	41

(6) In the case of a taxpayer who is a beneficiary of a trust	42
that makes an accumulation distribution as defined in section 665	43
of the Internal Revenue Code, add, for the beneficiary's taxable	44
years beginning before 2002, the portion, if any, of such	45
distribution that does not exceed the undistributed net income of	46
the trust for the three taxable years preceding the taxable year	47
in which the distribution is made to the extent that the portion	48
was not included in the trust's taxable income for any of the	49
trust's taxable years beginning in 2002 or thereafter.	50
"Undistributed net income of a trust" means the taxable income of	51
the trust increased by (a)(i) the additions to adjusted gross	52
income required under division (A) of this section and (ii) the	53
personal exemptions allowed to the trust pursuant to section	54
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	55
deductions to adjusted gross income required under division (A) of	56
this section, (ii) the amount of federal income taxes attributable	57
to such income, and (iii) the amount of taxable income that has	58
been included in the adjusted gross income of a beneficiary by	59
reason of a prior accumulation distribution. Any undistributed net	60
income included in the adjusted gross income of a beneficiary	61
shall reduce the undistributed net income of the trust commencing	62
with the earliest years of the accumulation period.	63

(7) Deduct the amount of wages and salaries, if any, not	64
otherwise allowable as a deduction but that would have been	65
allowable as a deduction in computing federal adjusted gross	66
income for the taxable year, had the targeted jobs credit allowed	67
and determined under sections 38, 51, and 52 of the Internal	68
Revenue Code not been in effect.	69

(8) Deduct any interest or interest equivalent on public	70
obligations and purchase obligations to the extent that the	71
interest or interest equivalent is included in federal adjusted	72
gross income.	73

(9) Add any loss or deduct any gain resulting from the sale,	74
exchange, or other disposition of public obligations to the extent	75
that the loss has been deducted or the gain has been included in	76
computing federal adjusted gross income.	77

(10) Deduct or add amounts, as provided under section 5747.70	78
of the Revised Code, related to contributions to variable college	79
savings program accounts made or tuition units purchased pursuant	80
to Chapter 3334. of the Revised Code.	81

(11)(a) Deduct, to the extent not otherwise allowable as a	82
deduction or exclusion in computing federal or Ohio adjusted gross	83
income for the taxable year, the amount the taxpayer paid during	84
the taxable year for medical care insurance and qualified	85
long-term care insurance for the taxpayer, the taxpayer's spouse,	86
and dependents. No deduction for medical care insurance under	87
division (A)(11) of this section shall be allowed either to any	88
taxpayer who is eligible to participate in any subsidized health	89
plan maintained by any employer of the taxpayer or of the	90
taxpayer's spouse, or to any taxpayer who is entitled to, or on	91
application would be entitled to, benefits under part A of Title	92
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	93
301, as amended. For the purposes of division (A)(11)(a) of this	94
section, "subsidized health plan" means a health plan for which	95
the employer pays any portion of the plan's cost. The deduction	96
allowed under division (A)(11)(a) of this section shall be the net	97
of any related premium refunds, related premium reimbursements, or	98
related insurance premium dividends received during the taxable	99
year.	100

(b) Deduct, to the extent not otherwise deducted or excluded	101
in computing federal or Ohio adjusted gross income during the	102
taxable year, the amount the taxpayer paid during the taxable	103
year, not compensated for by any insurance or otherwise, for	104
medical care of the taxpayer, the taxpayer's spouse, and	105
dependents, to the extent the expenses exceed seven and one-half	106
per cent of the taxpayer's federal adjusted gross income.	107

(c) Deduct, to the extent not otherwise deducted or excluded	108
in computing federal or Ohio adjusted gross income, any amount	109
included in federal adjusted gross income under section 105 or not	110
excluded under section 106 of the Internal Revenue Code solely	111
because it relates to an accident and health plan for a person who	112
otherwise would be a "qualifying relative" and thus a "dependent"	113
under section 152 of the Internal Revenue Code but for the fact	114
that the person fails to meet the income and support limitations	115
under section 152(d)(1)(B) and (C) of the Internal Revenue Code.	116

(d) For purposes of division (A)(11) of this section,	117
"medical care" has the meaning given in section 213 of the	118
Internal Revenue Code, subject to the special rules, limitations,	119
and exclusions set forth therein, and "qualified long-term care"	120
has the same meaning given in section 7702B(c) of the Internal	121
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c)	122
of this section, "dependent" includes a person who otherwise would	123
be a "qualifying relative" and thus a "dependent" under section	124
152 of the Internal Revenue Code but for the fact that the person	125
fails to meet the income and support limitations under section	126
152(d)(1)(B) and (C) of the Internal Revenue Code.	127

(12)(a) Deduct any amount included in federal adjusted gross	128
income solely because the amount represents a reimbursement or	129
refund of expenses that in any year the taxpayer had deducted as	130
an itemized deduction pursuant to section 63 of the Internal	131
Revenue Code and applicable United States department of the	132
treasury regulations. The deduction otherwise allowed under	133
division (A)(12)(a) of this section shall be reduced to the extent	134
the reimbursement is attributable to an amount the taxpayer	135
deducted under this section in any taxable year.	136

(b) Add any amount not otherwise included in Ohio adjusted	137
gross income for any taxable year to the extent that the amount is	138
attributable to the recovery during the taxable year of any amount	139
deducted or excluded in computing federal or Ohio adjusted gross	140
income in any taxable year.	141

(13) Deduct any portion of the deduction described in section	142
1341(a)(2) of the Internal Revenue Code, for repaying previously	143
reported income received under a claim of right, that meets both	144
of the following requirements:	145

(a) It is allowable for repayment of an item that was	146
included in the taxpayer's adjusted gross income for a prior	147
taxable year and did not qualify for a credit under division (A)	148
or (B) of section 5747.05 of the Revised Code for that year;	149

(b) It does not otherwise reduce the taxpayer's adjusted	150
gross income for the current or any other taxable year.	151

(14) Deduct an amount equal to the deposits made to, and net	152
investment earnings of, a medical savings account during the	153
taxable year, in accordance with section 3924.66 of the Revised	154
Code. The deduction allowed by division (A)(14) of this section	155
does not apply to medical savings account deposits and earnings	156
otherwise deducted or excluded for the current or any other	157
taxable year from the taxpayer's federal adjusted gross income.	158

(15)(a) Add an amount equal to the funds withdrawn from a	159
medical savings account during the taxable year, and the net	160
investment earnings on those funds, when the funds withdrawn were	161
used for any purpose other than to reimburse an account holder	162
for, or to pay, eligible medical expenses, in accordance with	163
section 3924.66 of the Revised Code;	164

(b) Add the amounts distributed from a medical savings	165
account under division (A)(2) of section 3924.68 of the Revised	166
Code during the taxable year.	167

(16) Add any amount claimed as a credit under section	168
5747.059 of the Revised Code to the extent that such amount	169
satisfies either of the following:	170

(a) The amount was deducted or excluded from the computation	171
of the taxpayer's federal adjusted gross income as required to be	172
reported for the taxpayer's taxable year under the Internal	173
Revenue Code;	174

(b) The amount resulted in a reduction of the taxpayer's	175
federal adjusted gross income as required to be reported for any	176
of the taxpayer's taxable years under the Internal Revenue Code.	177

(17) Deduct the amount contributed by the taxpayer to an	178
individual development account program established by a county	179
department of job and family services pursuant to sections 329.11	180
to 329.14 of the Revised Code for the purpose of matching funds	181
deposited by program participants. On request of the tax	182
commissioner, the taxpayer shall provide any information that, in	183
the tax commissioner's opinion, is necessary to establish the	184
amount deducted under division (A)(17) of this section.	185

(18) Beginning in taxable year 2001 but not for any taxable	186
year beginning after December 31, 2005, if the taxpayer is married	187
and files a joint return and the combined federal adjusted gross	188
income of the taxpayer and the taxpayer's spouse for the taxable	189
year does not exceed one hundred thousand dollars, or if the	190
taxpayer is single and has a federal adjusted gross income for the	191
taxable year not exceeding fifty thousand dollars, deduct amounts	192
paid during the taxable year for qualified tuition and fees paid	193
to an eligible institution for the taxpayer, the taxpayer's	194
spouse, or any dependent of the taxpayer, who is a resident of	195
this state and is enrolled in or attending a program that	196
culminates in a degree or diploma at an eligible institution. The	197
deduction may be claimed only to the extent that qualified tuition	198
and fees are not otherwise deducted or excluded for any taxable	199
year from federal or Ohio adjusted gross income. The deduction may	200
not be claimed for educational expenses for which the taxpayer	201
claims a credit under section 5747.27 of the Revised Code.	202

(19) Add any reimbursement received during the taxable year	203
of any amount the taxpayer deducted under division (A)(18) of this	204
section in any previous taxable year to the extent the amount is	205
not otherwise included in Ohio adjusted gross income.	206

(20)(a)(i) Add five-sixths of the amount of depreciation	207
expense allowed by subsection (k) of section 168 of the Internal	208
Revenue Code, including the taxpayer's proportionate or	209
distributive share of the amount of depreciation expense allowed	210
by that subsection to a pass-through entity in which the taxpayer	211
has a direct or indirect ownership interest.	212

(ii) Add five-sixths of the amount of qualifying section 179	213
depreciation expense, including a person's proportionate or	214
distributive share of the amount of qualifying section 179	215
depreciation expense allowed to any pass-through entity in which	216
the person has a direct or indirect ownership. For the purposes of	217
this division, "qualifying section 179 depreciation expense" means	218
the difference between (I) the amount of depreciation expense	219
directly or indirectly allowed to the taxpayer under section 179	220
of the Internal Revenue Code, and (II) the amount of depreciation	221
expense directly or indirectly allowed to the taxpayer under	222
section 179 of the Internal Revenue Code as that section existed	223
on December 31, 2002.	224

The tax commissioner, under procedures established by the	225
commissioner, may waive the add-backs related to a pass-through	226
entity if the taxpayer owns, directly or indirectly, less than	227
five per cent of the pass-through entity.	228

(b) Nothing in division (A)(20) of this section shall be	229
construed to adjust or modify the adjusted basis of any asset.	230

(c) To the extent the add-back required under division	231
(A)(20)(a) of this section is attributable to property generating	232
nonbusiness income or loss allocated under section 5747.20 of the	233
Revised Code, the add-back shall be sitused to the same location	234
as the nonbusiness income or loss generated by the property for	235
the purpose of determining the credit under division (A) of	236
section 5747.05 of the Revised Code. Otherwise, the add-back shall	237
be apportioned, subject to one or more of the four alternative	238
methods of apportionment enumerated in section 5747.21 of the	239
Revised Code.	240

(d) For the purposes of division (A) of this section, net	241
operating loss carryback and carryforward shall not include	242
five-sixths of the allowance of any net operating loss deduction	243
carryback or carryforward to the taxable year to the extent such	244
loss resulted from depreciation allowed by section 168(k) of the	245
Internal Revenue Code and by the qualifying section 179	246
depreciation expense amount.	247

(21)(a) If the taxpayer was required to add an amount under	248
division (A)(20)(a) of this section for a taxable year, deduct	249
one-fifth of the amount so added for each of the five succeeding	250
taxable years.	251

(b) If the amount deducted under division (A)(21)(a) of this	252
section is attributable to an add-back allocated under division	253
(A)(20)(c) of this section, the amount deducted shall be sitused	254
to the same location. Otherwise, the add-back shall be apportioned	255
using the apportionment factors for the taxable year in which the	256
deduction is taken, subject to one or more of the four alternative	257
methods of apportionment enumerated in section 5747.21 of the	258
Revised Code.	259

(c) No deduction is available under division (A)(21)(a) of	260
this section with regard to any depreciation allowed by section	261
168(k) of the Internal Revenue Code and by the qualifying section	262
179 depreciation expense amount to the extent that such	263
depreciation resulted in or increased a federal net operating loss	264
carryback or carryforward to a taxable year to which division	265
(A)(20)(d) of this section does not apply.	266

(22) Deduct, to the extent not otherwise deducted or excluded	267
in computing federal or Ohio adjusted gross income for the taxable	268
year, the amount the taxpayer received during the taxable year as	269
reimbursement for life insurance premiums under section 5919.31 of	270
the Revised Code.	271

(23) Deduct, to the extent not otherwise deducted or excluded	272
in computing federal or Ohio adjusted gross income for the taxable	273
year, the amount the taxpayer received during the taxable year as	274
a death benefit paid by the adjutant general under section 5919.33	275
of the Revised Code.	276

(24) Deduct, to the extent included in federal adjusted gross	277
income and not otherwise allowable as a deduction or exclusion in	278
computing federal or Ohio adjusted gross income for the taxable	279
year, military pay and allowances received by the taxpayer during	280
the taxable year for active duty service in the United States	281
army, air force, navy, marine corps, or coast guard or reserve	282
components thereof or the national guard. The deduction may not be	283
claimed for military pay and allowances received by the taxpayer	284
while the taxpayer is stationed in this state.	285

(25) Deduct, to the extent not otherwise allowable as a	286
deduction or exclusion in computing federal or Ohio adjusted gross	287
income for the taxable year and not otherwise compensated for by	288
any other source, the amount of qualified organ donation expenses	289
incurred by the taxpayer during the taxable year, not to exceed	290
ten thousand dollars. A taxpayer may deduct qualified organ	291
donation expenses only once for all taxable years beginning with	292
taxable years beginning in 2007.	293

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

294

(a) "Human organ" means all or any portion of a human liver,	295
pancreas, kidney, intestine, or lung, and any portion of human	296
bone marrow.	297

(b) "Qualified organ donation expenses" means travel	298
expenses, lodging expenses, and wages and salary forgone by a	299
taxpayer in connection with the taxpayer's donation, while living,	300
of one or more of the taxpayer's human organs to another human	301
being.	302

(26) Deduct, to the extent not otherwise deducted or excluded	303
in computing federal or Ohio adjusted gross income for the taxable	304
year, amounts received by the taxpayer as retired military	305
personnel pay for service in the United States army, navy, air	306
force, coast guard, or marine corps or reserve components thereof,	307
or the national guard, or received by the surviving spouse or	308
former spouse of such a taxpayer under the survivor benefit plan	309
on account of such a taxpayer's death. If the taxpayer receives	310
income on account of retirement paid under the federal civil	311
service retirement system or federal employees retirement system,	312
or under any successor retirement program enacted by the congress	313
of the United States that is established and maintained for	314
retired employees of the United States government, and such	315
retirement income is based, in whole or in part, on credit for the	316
taxpayer's military service, the deduction allowed under this	317
division shall include only that portion of such retirement income	318
that is attributable to the taxpayer's military service, to the	319
extent that portion of such retirement income is otherwise	320
included in federal adjusted gross income and is not otherwise	321
deducted under this section. Any amount deducted under division	322
(A)(26) of this section is not included in a taxpayer's adjusted	323
gross income for the purposes of section 5747.055 of the Revised	324
Code. No amount may be deducted under division (A)(26) of this	325
section on the basis of which a credit was claimed under section	326
5747.055 of the Revised Code.	327

(27) Deduct, to the extent not otherwise deducted or excluded	328
in computing federal or Ohio adjusted gross income for the taxable	329
year, the amount the taxpayer received during the taxable year	330
from the military injury relief fund created in section 5101.98 of	331
the Revised Code.	332

(28) Deduct, to the extent not otherwise deducted or excluded	333
in computing federal or Ohio adjusted gross income for the taxable	334
year, the amount the taxpayer received as a veterans bonus during	335
the taxable year from the Ohio department of veterans services as	336
authorized by Section 2r of Article VIII, Ohio Constitution.	337

(29) Deduct, to the extent not otherwise deducted or excluded	338
in computing federal or Ohio adjusted gross income for the taxable	339
year, any loss from wagering transactions that is allowed as an	340
itemized deduction under section 165 of the Internal Revenue Code	341
and that the taxpayer deducted in computing federal taxable	342
income.	343

(30) If the taxpayer will receive any proceeds of a	344
refundable tax credit for losses on eligible EB-5 projects under	345
section 5751.54 of the Revised Code, add any amounts deducted in	346
the computation of federal adjusted gross income for any taxable	347
year for the project's capital loss as reported under section 1211	348
of the Internal Revenue Code.	349

(B) "Business income" means income, including gain or loss,	350
arising from transactions, activities, and sources in the regular	351
course of a trade or business and includes income, gain, or loss	352
from real property, tangible property, and intangible property if	353
the acquisition, rental, management, and disposition of the	354
property constitute integral parts of the regular course of a	355
trade or business operation. "Business income" includes income,	356
including gain or loss, from a partial or complete liquidation of	357
a business, including, but not limited to, gain or loss from the	358
sale or other disposition of goodwill.	359

(C) "Nonbusiness income" means all income other than business	360
income and may include, but is not limited to, compensation, rents	361
and royalties from real or tangible personal property, capital	362
gains, interest, dividends and distributions, patent or copyright	363
royalties, or lottery winnings, prizes, and awards.	364

(D) "Compensation" means any form of remuneration paid to an	365
employee for personal services.	366

(E) "Fiduciary" means a guardian, trustee, executor,	367
administrator, receiver, conservator, or any other person acting	368
in any fiduciary capacity for any individual, trust, or estate.	369

(F) "Fiscal year" means an accounting period of twelve months	370
ending on the last day of any month other than December.	371

(G) "Individual" means any natural person.

372

(H) "Internal Revenue Code" means the "Internal Revenue Code	373
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	374

(I) "Resident" means any of the following, provided that	375
division (I)(3) of this section applies only to taxable years of a	376
trust beginning in 2002 or thereafter:	377

(1) An individual who is domiciled in this state, subject to	378
section 5747.24 of the Revised Code;	379

(2) The estate of a decedent who at the time of death was	380
domiciled in this state. The domicile tests of section 5747.24 of	381
the Revised Code are not controlling for purposes of division	382
(I)(2) of this section.	383

(3) A trust that, in whole or part, resides in this state. If	384
only part of a trust resides in this state, the trust is a	385
resident only with respect to that part.	386

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

387

(a) A trust resides in this state for the trust's current	388
taxable year to the extent, as described in division (I)(3)(d) of	389
this section, that the trust consists directly or indirectly, in	390
whole or in part, of assets, net of any related liabilities, that	391
were transferred, or caused to be transferred, directly or	392
indirectly, to the trust by any of the following:	393

(i) A person, a court, or a governmental entity or	394
instrumentality on account of the death of a decedent, but only if	395
the trust is described in division (I)(3)(e)(i) or (ii) of this	396
section;	397

(ii) A person who was domiciled in this state for the	398
purposes of this chapter when the person directly or indirectly	399
transferred assets to an irrevocable trust, but only if at least	400
one of the trust's qualifying beneficiaries is domiciled in this	401
state for the purposes of this chapter during all or some portion	402
of the trust's current taxable year;	403

(iii) A person who was domiciled in this state for the	404
purposes of this chapter when the trust document or instrument or	405
part of the trust document or instrument became irrevocable, but	406
only if at least one of the trust's qualifying beneficiaries is a	407
resident domiciled in this state for the purposes of this chapter	408
during all or some portion of the trust's current taxable year. If	409
a trust document or instrument became irrevocable upon the death	410
of a person who at the time of death was domiciled in this state	411
for purposes of this chapter, that person is a person described in	412
division (I)(3)(a)(iii) of this section.	413

(b) A trust is irrevocable to the extent that the transferor	414
is not considered to be the owner of the net assets of the trust	415
under sections 671 to 678 of the Internal Revenue Code.	416

(c) With respect to a trust other than a charitable lead	417
trust, "qualifying beneficiary" has the same meaning as "potential	418
current beneficiary" as defined in section 1361(e)(2) of the	419
Internal Revenue Code, and with respect to a charitable lead trust	420
"qualifying beneficiary" is any current, future, or contingent	421
beneficiary, but with respect to any trust "qualifying	422
beneficiary" excludes a person or a governmental entity or	423
instrumentality to any of which a contribution would qualify for	424
the charitable deduction under section 170 of the Internal Revenue	425
Code.	426

(d) For the purposes of division (I)(3)(a) of this section,	427
the extent to which a trust consists directly or indirectly, in	428
whole or in part, of assets, net of any related liabilities, that	429
were transferred directly or indirectly, in whole or part, to the	430
trust by any of the sources enumerated in that division shall be	431
ascertained by multiplying the fair market value of the trust's	432
assets, net of related liabilities, by the qualifying ratio, which	433
shall be computed as follows:	434

(i) The first time the trust receives assets, the numerator	435
of the qualifying ratio is the fair market value of those assets	436
at that time, net of any related liabilities, from sources	437
enumerated in division (I)(3)(a) of this section. The denominator	438
of the qualifying ratio is the fair market value of all the	439
trust's assets at that time, net of any related liabilities.	440

(ii) Each subsequent time the trust receives assets, a	441
revised qualifying ratio shall be computed. The numerator of the	442
revised qualifying ratio is the sum of (1) the fair market value	443
of the trust's assets immediately prior to the subsequent	444
transfer, net of any related liabilities, multiplied by the	445
qualifying ratio last computed without regard to the subsequent	446
transfer, and (2) the fair market value of the subsequently	447
transferred assets at the time transferred, net of any related	448
liabilities, from sources enumerated in division (I)(3)(a) of this	449
section. The denominator of the revised qualifying ratio is the	450
fair market value of all the trust's assets immediately after the	451
subsequent transfer, net of any related liabilities.	452

(iii) Whether a transfer to the trust is by or from any of	453
the sources enumerated in division (I)(3)(a) of this section shall	454
be ascertained without regard to the domicile of the trust's	455
beneficiaries.	456

(e) For the purposes of division (I)(3)(a)(i) of this	457
section:	458

(i) A trust is described in division (I)(3)(e)(i) of this	459
section if the trust is a testamentary trust and the testator of	460
that testamentary trust was domiciled in this state at the time of	461
the testator's death for purposes of the taxes levied under	462
Chapter 5731. of the Revised Code.	463

(ii) A trust is described in division (I)(3)(e)(ii) of this	464
section if the transfer is a qualifying transfer described in any	465
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	466
irrevocable inter vivos trust, and at least one of the trust's	467
qualifying beneficiaries is domiciled in this state for purposes	468
of this chapter during all or some portion of the trust's current	469
taxable year.	470

(f) For the purposes of division (I)(3)(e)(ii) of this	471
section, a "qualifying transfer" is a transfer of assets, net of	472
any related liabilities, directly or indirectly to a trust, if the	473
transfer is described in any of the following:	474

(i) The transfer is made to a trust, created by the decedent	475
before the decedent's death and while the decedent was domiciled	476
in this state for the purposes of this chapter, and, prior to the	477
death of the decedent, the trust became irrevocable while the	478
decedent was domiciled in this state for the purposes of this	479
chapter.	480

(ii) The transfer is made to a trust to which the decedent,	481
prior to the decedent's death, had directly or indirectly	482
transferred assets, net of any related liabilities, while the	483
decedent was domiciled in this state for the purposes of this	484
chapter, and prior to the death of the decedent the trust became	485
irrevocable while the decedent was domiciled in this state for the	486
purposes of this chapter.	487

(iii) The transfer is made on account of a contractual	488
relationship existing directly or indirectly between the	489
transferor and either the decedent or the estate of the decedent	490
at any time prior to the date of the decedent's death, and the	491
decedent was domiciled in this state at the time of death for	492
purposes of the taxes levied under Chapter 5731. of the Revised	493
Code.	494

(iv) The transfer is made to a trust on account of a	495
contractual relationship existing directly or indirectly between	496
the transferor and another person who at the time of the	497
decedent's death was domiciled in this state for purposes of this	498
chapter.	499

(v) The transfer is made to a trust on account of the will of	500
a testator who was domiciled in this state at the time of the	501
testator's death for purposes of the taxes levied under Chapter	502
5731. of the Revised Code.	503

(vi) The transfer is made to a trust created by or caused to	504
be created by a court, and the trust was directly or indirectly	505
created in connection with or as a result of the death of an	506
individual who, for purposes of the taxes levied under Chapter	507
5731. of the Revised Code, was domiciled in this state at the time	508
of the individual's death.	509

(g) The tax commissioner may adopt rules to ascertain the	510
part of a trust residing in this state.	511

(J) "Nonresident" means an individual or estate that is not a	512
resident. An individual who is a resident for only part of a	513
taxable year is a nonresident for the remainder of that taxable	514
year.	515

(K) "Pass-through entity" has the same meaning as in section	516
5733.04 of the Revised Code.	517

(L) "Return" means the notifications and reports required to	518
be filed pursuant to this chapter for the purpose of reporting the	519
tax due and includes declarations of estimated tax when so	520
required.	521

(M) "Taxable year" means the calendar year or the taxpayer's	522
fiscal year ending during the calendar year, or fractional part	523
thereof, upon which the adjusted gross income is calculated	524
pursuant to this chapter.	525

(N) "Taxpayer" means any person subject to the tax imposed by	526
section 5747.02 of the Revised Code or any pass-through entity	527
that makes the election under division (D) of section 5747.08 of	528
the Revised Code.	529

(O) "Dependents" means dependents as defined in the Internal	530
Revenue Code and as claimed in the taxpayer's federal income tax	531
return for the taxable year or which the taxpayer would have been	532
permitted to claim had the taxpayer filed a federal income tax	533
return.	534

(P) "Principal county of employment" means, in the case of a	535
nonresident, the county within the state in which a taxpayer	536
performs services for an employer or, if those services are	537
performed in more than one county, the county in which the major	538
portion of the services are performed.	539

(Q) As used in sections 5747.50 to 5747.55 of the Revised	540
Code:	541

(1) "Subdivision" means any county, municipal corporation,	542
park district, or township.	543

(2) "Essential local government purposes" includes all	544
functions that any subdivision is required by general law to	545
exercise, including like functions that are exercised under a	546
charter adopted pursuant to the Ohio Constitution.	547

(R) "Overpayment" means any amount already paid that exceeds	548
the figure determined to be the correct amount of the tax.	549

(S) "Taxable income" or "Ohio taxable income" applies only to	550
estates and trusts, and means federal taxable income, as defined	551
and used in the Internal Revenue Code, adjusted as follows:	552

(1) Add interest or dividends, net of ordinary, necessary,	553
and reasonable expenses not deducted in computing federal taxable	554
income, on obligations or securities of any state or of any	555
political subdivision or authority of any state, other than this	556
state and its subdivisions and authorities, but only to the extent	557
that such net amount is not otherwise includible in Ohio taxable	558
income and is described in either division (S)(1)(a) or (b) of	559
this section:	560

(a) The net amount is not attributable to the S portion of an	561
electing small business trust and has not been distributed to	562
beneficiaries for the taxable year;	563

(b) The net amount is attributable to the S portion of an	564
electing small business trust for the taxable year.	565

(2) Add interest or dividends, net of ordinary, necessary,	566
and reasonable expenses not deducted in computing federal taxable	567
income, on obligations of any authority, commission,	568
instrumentality, territory, or possession of the United States to	569
the extent that the interest or dividends are exempt from federal	570
income taxes but not from state income taxes, but only to the	571
extent that such net amount is not otherwise includible in Ohio	572
taxable income and is described in either division (S)(1)(a) or	573
(b) of this section;	574

(3) Add the amount of personal exemption allowed to the	575
estate pursuant to section 642(b) of the Internal Revenue Code;	576

(4) Deduct interest or dividends, net of related expenses	577
deducted in computing federal taxable income, on obligations of	578
the United States and its territories and possessions or of any	579
authority, commission, or instrumentality of the United States to	580
the extent that the interest or dividends are exempt from state	581
taxes under the laws of the United States, but only to the extent	582
that such amount is included in federal taxable income and is	583
described in either division (S)(1)(a) or (b) of this section;	584

(5) Deduct the amount of wages and salaries, if any, not	585
otherwise allowable as a deduction but that would have been	586
allowable as a deduction in computing federal taxable income for	587
the taxable year, had the targeted jobs credit allowed under	588
sections 38, 51, and 52 of the Internal Revenue Code not been in	589
effect, but only to the extent such amount relates either to	590
income included in federal taxable income for the taxable year or	591
to income of the S portion of an electing small business trust for	592
the taxable year;	593

(6) Deduct any interest or interest equivalent, net of	594
related expenses deducted in computing federal taxable income, on	595
public obligations and purchase obligations, but only to the	596
extent that such net amount relates either to income included in	597
federal taxable income for the taxable year or to income of the S	598
portion of an electing small business trust for the taxable year;	599

(7) Add any loss or deduct any gain resulting from sale,	600
exchange, or other disposition of public obligations to the extent	601
that such loss has been deducted or such gain has been included in	602
computing either federal taxable income or income of the S portion	603
of an electing small business trust for the taxable year;	604

(8) Except in the case of the final return of an estate, add	605
any amount deducted by the taxpayer on both its Ohio estate tax	606
return pursuant to section 5731.14 of the Revised Code, and on its	607
federal income tax return in determining federal taxable income;	608

(9)(a) Deduct any amount included in federal taxable income	609
solely because the amount represents a reimbursement or refund of	610
expenses that in a previous year the decedent had deducted as an	611
itemized deduction pursuant to section 63 of the Internal Revenue	612
Code and applicable treasury regulations. The deduction otherwise	613
allowed under division (S)(9)(a) of this section shall be reduced	614
to the extent the reimbursement is attributable to an amount the	615
taxpayer or decedent deducted under this section in any taxable	616
year.	617

(b) Add any amount not otherwise included in Ohio taxable	618
income for any taxable year to the extent that the amount is	619
attributable to the recovery during the taxable year of any amount	620
deducted or excluded in computing federal or Ohio taxable income	621
in any taxable year, but only to the extent such amount has not	622
been distributed to beneficiaries for the taxable year.	623

(10) Deduct any portion of the deduction described in section	624
1341(a)(2) of the Internal Revenue Code, for repaying previously	625
reported income received under a claim of right, that meets both	626
of the following requirements:	627

(a) It is allowable for repayment of an item that was	628
included in the taxpayer's taxable income or the decedent's	629
adjusted gross income for a prior taxable year and did not qualify	630
for a credit under division (A) or (B) of section 5747.05 of the	631
Revised Code for that year.	632

(b) It does not otherwise reduce the taxpayer's taxable	633
income or the decedent's adjusted gross income for the current or	634
any other taxable year.	635

(11) Add any amount claimed as a credit under section	636
5747.059 of the Revised Code to the extent that the amount	637
satisfies either of the following:	638

(a) The amount was deducted or excluded from the computation	639
of the taxpayer's federal taxable income as required to be	640
reported for the taxpayer's taxable year under the Internal	641
Revenue Code;	642

(b) The amount resulted in a reduction in the taxpayer's	643
federal taxable income as required to be reported for any of the	644
taxpayer's taxable years under the Internal Revenue Code.	645

(12) Deduct any amount, net of related expenses deducted in	646
computing federal taxable income, that a trust is required to	647
report as farm income on its federal income tax return, but only	648
if the assets of the trust include at least ten acres of land	649
satisfying the definition of "land devoted exclusively to	650
agricultural use" under section 5713.30 of the Revised Code,	651
regardless of whether the land is valued for tax purposes as such	652
land under sections 5713.30 to 5713.38 of the Revised Code. If the	653
trust is a pass-through entity investor, section 5747.231 of the	654
Revised Code applies in ascertaining if the trust is eligible to	655
claim the deduction provided by division (S)(12) of this section	656
in connection with the pass-through entity's farm income.	657

Except for farm income attributable to the S portion of an	658
electing small business trust, the deduction provided by division	659
(S)(12) of this section is allowed only to the extent that the	660
trust has not distributed such farm income. Division (S)(12) of	661
this section applies only to taxable years of a trust beginning in	662
2002 or thereafter.	663

(13) Add the net amount of income described in section 641(c)	664
of the Internal Revenue Code to the extent that amount is not	665
included in federal taxable income.	666

(14) Add or deduct the amount the taxpayer would be required	667
to add or deduct under division (A)(20) or (21) of this section if	668
the taxpayer's Ohio taxable income were computed in the same	669
manner as an individual's Ohio adjusted gross income is computed	670
under this section. In the case of a trust, division (S)(14) of	671
this section applies only to any of the trust's taxable years	672
beginning in 2002 or thereafter.	673

(T) "School district income" and "school district income tax"	674
have the same meanings as in section 5748.01 of the Revised Code.	675

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	676
of this section, "public obligations," "purchase obligations," and	677
"interest or interest equivalent" have the same meanings as in	678
section 5709.76 of the Revised Code.	679

(V) "Limited liability company" means any limited liability	680
company formed under Chapter 1705. of the Revised Code or under	681
the laws of any other state.	682

(W) "Pass-through entity investor" means any person who,	683
during any portion of a taxable year of a pass-through entity, is	684
a partner, member, shareholder, or equity investor in that	685
pass-through entity.	686

(X) "Banking day" has the same meaning as in section 1304.01	687
of the Revised Code.	688

(Y) "Month" means a calendar month.

689

(Z) "Quarter" means the first three months, the second three	690
months, the third three months, or the last three months of the	691
taxpayer's taxable year.	692

(AA)(1) "Eligible institution" means a state university or	693
state institution of higher education as defined in section	694
3345.011 of the Revised Code, or a private, nonprofit college,	695
university, or other post-secondary institution located in this	696
state that possesses a certificate of authorization issued by the	697
Ohio board of regents pursuant to Chapter 1713. of the Revised	698
Code or a certificate of registration issued by the state board of	699
career colleges and schools under Chapter 3332. of the Revised	700
Code.	701

(2) "Qualified tuition and fees" means tuition and fees	702
imposed by an eligible institution as a condition of enrollment or	703
attendance, not exceeding two thousand five hundred dollars in	704
each of the individual's first two years of post-secondary	705
education. If the individual is a part-time student, "qualified	706
tuition and fees" includes tuition and fees paid for the academic	707
equivalent of the first two years of post-secondary education	708
during a maximum of five taxable years, not exceeding a total of	709
five thousand dollars. "Qualified tuition and fees" does not	710
include:	711

(a) Expenses for any course or activity involving sports,	712
games, or hobbies unless the course or activity is part of the	713
individual's degree or diploma program;	714

(b) The cost of books, room and board, student activity fees,	715
athletic fees, insurance expenses, or other expenses unrelated to	716
the individual's academic course of instruction;	717

(c) Tuition, fees, or other expenses paid or reimbursed	718
through an employer, scholarship, grant in aid, or other	719
educational benefit program.	720

(BB)(1) "Modified business income" means the business income	721
included in a trust's Ohio taxable income after such taxable	722
income is first reduced by the qualifying trust amount, if any.	723

(2) "Qualifying trust amount" of a trust means capital gains	724
and losses from the sale, exchange, or other disposition of equity	725
or ownership interests in, or debt obligations of, a qualifying	726
investee to the extent included in the trust's Ohio taxable	727
income, but only if the following requirements are satisfied:	728

(a) The book value of the qualifying investee's physical	729
assets in this state and everywhere, as of the last day of the	730
qualifying investee's fiscal or calendar year ending immediately	731
prior to the date on which the trust recognizes the gain or loss,	732
is available to the trust.	733

(b) The requirements of section 5747.011 of the Revised Code	734
are satisfied for the trust's taxable year in which the trust	735
recognizes the gain or loss.	736

Any gain or loss that is not a qualifying trust amount is	737
modified business income, qualifying investment income, or	738
modified nonbusiness income, as the case may be.	739

(3) "Modified nonbusiness income" means a trust's Ohio	740
taxable income other than modified business income, other than the	741
qualifying trust amount, and other than qualifying investment	742
income, as defined in section 5747.012 of the Revised Code, to the	743
extent such qualifying investment income is not otherwise part of	744
modified business income.	745

(4) "Modified Ohio taxable income" applies only to trusts,	746
and means the sum of the amounts described in divisions (BB)(4)(a)	747
to (c) of this section:	748

(a) The fraction, calculated under section 5747.013, and	749
applying section 5747.231 of the Revised Code, multiplied by the	750
sum of the following amounts:	751

(i) The trust's modified business income;

752

(ii) The trust's qualifying investment income, as defined in	753
section 5747.012 of the Revised Code, but only to the extent the	754
qualifying investment income does not otherwise constitute	755
modified business income and does not otherwise constitute a	756
qualifying trust amount.	757

(b) The qualifying trust amount multiplied by a fraction, the	758
numerator of which is the sum of the book value of the qualifying	759
investee's physical assets in this state on the last day of the	760
qualifying investee's fiscal or calendar year ending immediately	761
prior to the day on which the trust recognizes the qualifying	762
trust amount, and the denominator of which is the sum of the book	763
value of the qualifying investee's total physical assets	764
everywhere on the last day of the qualifying investee's fiscal or	765
calendar year ending immediately prior to the day on which the	766
trust recognizes the qualifying trust amount. If, for a taxable	767
year, the trust recognizes a qualifying trust amount with respect	768
to more than one qualifying investee, the amount described in	769
division (BB)(4)(b) of this section shall equal the sum of the	770
products so computed for each such qualifying investee.	771

(c)(i) With respect to a trust or portion of a trust that is	772
a resident as ascertained in accordance with division (I)(3)(d) of	773
this section, its modified nonbusiness income.	774

(ii) With respect to a trust or portion of a trust that is	775
not a resident as ascertained in accordance with division	776
(I)(3)(d) of this section, the amount of its modified nonbusiness	777
income satisfying the descriptions in divisions (B)(2) to (5) of	778
section 5747.20 of the Revised Code, except as otherwise provided	779
in division (BB)(4)(c)(ii) of this section. With respect to a	780
trust or portion of a trust that is not a resident as ascertained	781
in accordance with division (I)(3)(d) of this section, the trust's	782
portion of modified nonbusiness income recognized from the sale,	783
exchange, or other disposition of a debt interest in or equity	784
interest in a section 5747.212 entity, as defined in section	785
5747.212 of the Revised Code, without regard to division (A) of	786
that section, shall not be allocated to this state in accordance	787
with section 5747.20 of the Revised Code but shall be apportioned	788
to this state in accordance with division (B) of section 5747.212	789
of the Revised Code without regard to division (A) of that	790
section.	791

If the allocation and apportionment of a trust's income under	792
divisions (BB)(4)(a) and (c) of this section do not fairly	793
represent the modified Ohio taxable income of the trust in this	794
state, the alternative methods described in division (C) of	795
section 5747.21 of the Revised Code may be applied in the manner	796
and to the same extent provided in that section.	797

(5)(a) Except as set forth in division (BB)(5)(b) of this	798
section, "qualifying investee" means a person in which a trust has	799
an equity or ownership interest, or a person or unit of government	800
the debt obligations of either of which are owned by a trust. For	801
the purposes of division (BB)(2)(a) of this section and for the	802
purpose of computing the fraction described in division (BB)(4)(b)	803
of this section, all of the following apply:	804

(i) If the qualifying investee is a member of a qualifying	805
controlled group on the last day of the qualifying investee's	806
fiscal or calendar year ending immediately prior to the date on	807
which the trust recognizes the gain or loss, then "qualifying	808
investee" includes all persons in the qualifying controlled group	809
on such last day.	810

(ii) If the qualifying investee, or if the qualifying	811
investee and any members of the qualifying controlled group of	812
which the qualifying investee is a member on the last day of the	813
qualifying investee's fiscal or calendar year ending immediately	814
prior to the date on which the trust recognizes the gain or loss,	815
separately or cumulatively own, directly or indirectly, on the	816
last day of the qualifying investee's fiscal or calendar year	817
ending immediately prior to the date on which the trust recognizes	818
the qualifying trust amount, more than fifty per cent of the	819
equity of a pass-through entity, then the qualifying investee and	820
the other members are deemed to own the proportionate share of the	821
pass-through entity's physical assets which the pass-through	822
entity directly or indirectly owns on the last day of the	823
pass-through entity's calendar or fiscal year ending within or	824
with the last day of the qualifying investee's fiscal or calendar	825
year ending immediately prior to the date on which the trust	826
recognizes the qualifying trust amount.	827

(iii) For the purposes of division (BB)(5)(a)(iii) of this	828
section, "upper level pass-through entity" means a pass-through	829
entity directly or indirectly owning any equity of another	830
pass-through entity, and "lower level pass-through entity" means	831
that other pass-through entity.	832

An upper level pass-through entity, whether or not it is also	833
a qualifying investee, is deemed to own, on the last day of the	834
upper level pass-through entity's calendar or fiscal year, the	835
proportionate share of the lower level pass-through entity's	836
physical assets that the lower level pass-through entity directly	837
or indirectly owns on the last day of the lower level pass-through	838
entity's calendar or fiscal year ending within or with the last	839
day of the upper level pass-through entity's fiscal or calendar	840
year. If the upper level pass-through entity directly and	841
indirectly owns less than fifty per cent of the equity of the	842
lower level pass-through entity on each day of the upper level	843
pass-through entity's calendar or fiscal year in which or with	844
which ends the calendar or fiscal year of the lower level	845
pass-through entity and if, based upon clear and convincing	846
evidence, complete information about the location and cost of the	847
physical assets of the lower pass-through entity is not available	848
to the upper level pass-through entity, then solely for purposes	849
of ascertaining if a gain or loss constitutes a qualifying trust	850
amount, the upper level pass-through entity shall be deemed as	851
owning no equity of the lower level pass-through entity for each	852
day during the upper level pass-through entity's calendar or	853
fiscal year in which or with which ends the lower level	854
pass-through entity's calendar or fiscal year. Nothing in division	855
(BB)(5)(a)(iii) of this section shall be construed to provide for	856
any deduction or exclusion in computing any trust's Ohio taxable	857
income.	858

(b) With respect to a trust that is not a resident for the	859
taxable year and with respect to a part of a trust that is not a	860
resident for the taxable year, "qualifying investee" for that	861
taxable year does not include a C corporation if both of the	862
following apply:	863

(i) During the taxable year the trust or part of the trust	864
recognizes a gain or loss from the sale, exchange, or other	865
disposition of equity or ownership interests in, or debt	866
obligations of, the C corporation.	867

(ii) Such gain or loss constitutes nonbusiness income.

868

(6) "Available" means information is such that a person is	869
able to learn of the information by the due date plus extensions,	870
if any, for filing the return for the taxable year in which the	871
trust recognizes the gain or loss.	872

(CC) "Qualifying controlled group" has the same meaning as in	873
section 5733.04 of the Revised Code.	874

(DD) "Related member" has the same meaning as in section	875
5733.042 of the Revised Code.	876

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

877

(a) "Qualifying person" means any person other than a	878
qualifying corporation.	879

(b) "Qualifying corporation" means any person classified for	880
federal income tax purposes as an association taxable as a	881
corporation, except either of the following:	882

(i) A corporation that has made an election under subchapter	883
S, chapter one, subtitle A, of the Internal Revenue Code for its	884
taxable year ending within, or on the last day of, the investor's	885
taxable year;	886

(ii) A subsidiary that is wholly owned by any corporation	887
that has made an election under subchapter S, chapter one,	888
subtitle A of the Internal Revenue Code for its taxable year	889
ending within, or on the last day of, the investor's taxable year.	890

(2) For the purposes of this chapter, unless expressly stated	891
otherwise, no qualifying person indirectly owns any asset directly	892
or indirectly owned by any qualifying corporation.	893

(FF) For purposes of this chapter and Chapter 5751. of the	894
Revised Code:	895

(1) "Trust" does not include a qualified pre-income tax	896
trust.	897

(2) A "qualified pre-income tax trust" is any pre-income tax	898
trust that makes a qualifying pre-income tax trust election as	899
described in division (FF)(3) of this section.	900

(3) A "qualifying pre-income tax trust election" is an	901
election by a pre-income tax trust to subject to the tax imposed	902
by section 5751.02 of the Revised Code the pre-income tax trust	903
and all pass-through entities of which the trust owns or controls,	904
directly, indirectly, or constructively through related interests,	905
five per cent or more of the ownership or equity interests. The	906
trustee shall notify the tax commissioner in writing of the	907
election on or before April 15, 2006. The election, if timely	908
made, shall be effective on and after January 1, 2006, and shall	909
apply for all tax periods and tax years until revoked by the	910
trustee of the trust.	911

(4) A "pre-income tax trust" is a trust that satisfies all of	912
the following requirements:	913

(a) The document or instrument creating the trust was	914
executed by the grantor before January 1, 1972;	915

(b) The trust became irrevocable upon the creation of the	916
trust; and	917

(c) The grantor was domiciled in this state at the time the	918
trust was created.	919

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

920

(1) "EB-5 investor" means an individual who invests money as	921
a condition of eligibility for an EB-5 visa in accordance with the	922
"Immigration Act of 1990," 104 Stat. 4978, 8 U.S.C. 1153, as	923
amended, and "Petitions for employment creation aliens," 8 C.F.R.	924
204.6.	925

(2) "Project" means any entity formed for the ongoing conduct	926
of a lawful business including, but not limited to, a sole	927
proprietorship, partnership, holding company, joint venture,	928
corporation, business trust, or other entity, that is affiliated	929
with an EB-5 regional center under the "Immigration Act of 1990,"	930
104 Stat. 4978, 8 U.S.C. 1153, as amended, and "Petitions for	931
employment creation aliens," 8 C.F.R. 204.6, in which at least one	932
EB-5 investor has invested money.	933

(B) A limited liability company incorporated under the laws	934
of this state that maintains its corporate headquarters and doing	935
business as "Ohio Foreign Investment Authority, LLC," may certify	936
a project, upon written application, as eligible to claim a	937
refundable tax credit allowed under this section against the tax	938
levied under section 5751.02 of the Revised Code. The company	939
shall, not more than ninety days following the enactment of this	940
section, establish, and subsequently may modify as it considers	941
necessary, a written policy governing eligibility to receive tax	942
credits under this section, which shall include the minimum	943
requirements under this division. Before a project may be	944
certified as eligible for a credit under this section, the United	945
States citizenship and immigration services must approve the	946
project's EB-5 investor's I-526 petition in accordance with the	947
"Immigration Act of 1990," 104 Stat. 4978, 8 U.S.C. 1153, as	948
amended, and "Petitions for employment creation aliens," 8 C.F.R.	949
204.6.	950

For a project to be certified as eligible, the project must	951
demonstrate that the project will create the number of jobs that	952
are required to be created by each EB-5 investor under the methods	953
and models allowed by the "Immigration Act of 1990," 104 Stat.	954
4978, 8 U.S.C. 1153, as amended, and "Petitions for employment	955
creation aliens," 8 C.F.R. 204.6. Jobs created by an EB-5 investor	956
that apply toward such federal requirements must be created in	957
this state in order for a project to be certified under this	958
division.	959

The limited liability company, after approving the	960
certification application of a project, shall issue to the project	961
a certificate stating that the project is eligible to receive a	962
tax credit under this section, subject to the limitations of	963
division (C)(2) of this section. The limited liability company	964
shall not approve a project's application for certification on or	965
after January 1, 2017. The limited liability company shall not	966
approve a project's application for certification if the potential	967
value of tax credits to all outstanding certificates would exceed	968
two hundred million dollars.	969

(C)(1) A project holding an eligibility certificate issued	970
under division (B) of this section may claim a refundable credit	971
against the tax imposed by section 5751.02 of the Revised Code. If	972
the project is an excluded person for failure to have not more	973
than one hundred fifty thousand dollars of taxable gross receipts	974
during the calendar year as provided by division (E)(1) of section	975
5751.01 of the Revised Code, then the project shall be treated as	976
though it were a taxpayer, as defined in section 5751.01 of the	977
Revised Code, for the purpose of claiming the credit allowed under	978
this section.	979

The credit shall be claimed for the annual tax period that	980
includes the last day of the project's taxable year in which the	981
project recognizes a capital loss for federal income tax purposes.	982
The amount of the credit shall be equal to the total amount of	983
capital loss recognized by the EB-5 investor or investors from the	984
project for federal income tax purposes before any combination	985
with gains or losses not arising from the project, and	986
notwithstanding any amount deducted in the computation of federal	987
or Ohio adjusted gross income under the Internal Revenue Code or	988
section 5747.01 of the Revised Code. The credit shall be allocated	989
by the project among the EB-5 investors in the project in the	990
proportion that each EB-5 investor's recognized loss from the	991
project bears to the total of such recognized losses of all EB-5	992
investors in the project. No share of any credit granted under	993
this section shall be allocated to a project investor who is not	994
an EB-5 investor.	995

(2) No credit may be granted to a project under this section	996
unless and until the United States citizenship and immigration	997
services approves the project's EB-5 investor's I-829 petition in	998
accordance with the "Immigration Act of 1990," 104 Stat. 4978, 8	999
U.S.C. 1153, as amended, and "Petition by entrepreneur to remove	1000
conditional basis of lawful permanent resident status," 8 C.F.R.	1001
216.6.	1002

(D) On January 1, 2016, the limited liability company	1003
described in division (B) of this section shall file with the	1004
speaker of the house of representatives, the president of the	1005
senate, and the chairpersons of the house and senate standing	1006
committees predominantly concerned with economic development a	1007
written report on the tax credit under this section. The report	1008
shall include all of the following:	1009

(1) The written eligibility policy used by the company to	1010
evaluate applicants for the eligibility certificates under	1011
division (B) of this section;	1012

(2) The number of project eligibility certificates issued	1013
under this section in each fiscal year ending on or before the	1014
preceding thirtieth day of June;	1015

(3) Any recommendations for continuing or modifying the tax	1016
credit.	1017

Sec. 5751.98.  (A) To provide a uniform procedure for	1018
calculating the amount of tax due under this chapter, a taxpayer	1019
shall claim any credits to which it is entitled in the following	1020
order:	1021

(1) The nonrefundable jobs retention credit under division	1022
(B) of section 5751.50 of the Revised Code;	1023

(2) The nonrefundable credit for qualified research expenses	1024
under division (B) of section 5751.51 of the Revised Code;	1025

(3) The nonrefundable credit for a borrower's qualified	1026
research and development loan payments under division (B) of	1027
section 5751.52 of the Revised Code;	1028

(4) The nonrefundable credit for calendar years 2010 to 2029	1029
for unused net operating losses under division (B) of section	1030
5751.53 of the Revised Code;	1031

(5) The refundable credit for calendar year 2030 for unused	1032
net operating losses under division (C) of section 5751.53 of the	1033
Revised Code;	1034

(6) The refundable jobs creation credit or job retention	1035
credit under division (A) of section 5751.50 of the Revised Code;	1036

(7) The refundable credit for investment losses recognized by	1037
an EB-5 investor involved in certain investment projects under	1038
section 5751.54 of the Revised Code.	1039

(B) For any credit except the refundable credits enumerated	1040
in this section, the amount of the credit for a tax period shall	1041
not exceed the tax due after allowing for any other credit that	1042
precedes it in the order required under this section. Any excess	1043
amount of a particular credit may be carried forward if authorized	1044
under the section creating the credit.	1045

Section 2.  That existing sections 5747.01 and 5751.98 of the	1046
Revised Code are hereby repealed.	1047

Section 3. The amendment or enactment by this act of sections	1048
5747.01, 5751.54, and 5751.98 of the Revised Code applies to	1049
taxable years and annual tax periods ending after the effective	1050
date of this act.	1051