As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 494

Representative Pillich 

Cosponsors: Representatives Fende, Lundy, Murray, Phillips, Garland, Antonio, Ashford, Reece 

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A BILL

To amend sections 125.01, 125.09, 125.11, 3772.033,

1

5747.98, and 5751.98 and to enact sections 5747.61

2

and 5751.55 of the Revised Code to provide a five

3

per cent bid preference for state contracts to a

4

business owned by veterans and to authorize a

5

personal income and commercial activity tax credit

6

for a business that hires and employs a veteran

7

for at least one year.

8

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

Section 1.  That sections 125.01, 125.09, 125.11, 3772.033,	9
5747.98, and 5751.98 be amended and sections 5747.61 and 5751.55	10
of the Revised Code be enacted to read as follows:	11

Sec. 125.01.  As used in this chapter:

12

(A) "Order" means a copy of a contract or a statement of the	13
nature of a contemplated expenditure, a description of the	14
property or supplies to be purchased or service to be performed,	15
other than a service performed by officers and regular employees	16
of the state, and per diem of the national guard, and the total	17
sum of the expenditure to be made therefor, if the sum is fixed	18
and ascertained, otherwise the estimated sum thereof, and an	19
authorization to pay for the contemplated expenditure, signed by	20
the person instructed and authorized to pay upon receipt of a	21
proper invoice.	22

(B) "Invoice" means an itemized listing showing delivery of	23
the supplies or performance of the service described in the order,	24
and the date of the purchase or rendering of the service, or an	25
itemization of the things done, material supplied, or labor	26
furnished, and the sum due pursuant to the contract or obligation.	27

(C) "Products" means materials, manufacturer's supplies,	28
merchandise, goods, wares, and foodstuffs.	29

(D) "Produced" means the manufacturing, processing, mining,	30
developing, and making of a thing into a new article with a	31
distinct character in use through the application of input, within	32
the state, of Ohio products, labor, skill, or other services.	33
"Produced" does not include the mere assembling or putting	34
together of non-Ohio products or materials.	35

(E) "Ohio products" means products that are mined, excavated,	36
produced, manufactured, raised, or grown in the state by a person	37
where the input of Ohio products, labor, skill, or other services	38
constitutes no less than twenty-five per cent of the manufactured	39
cost. With respect to mined products, such products shall be mined	40
or excavated in this state.	41

(F) "Purchase" means to buy, rent, lease, lease purchase, or	42
otherwise acquire supplies or services. "Purchase" also includes	43
all functions that pertain to the obtaining of supplies or	44
services, including description of requirements, selection and	45
solicitation of sources, preparation and award of contracts, all	46
phases of contract administration, and receipt and acceptance of	47
the supplies and services and payment for them.	48

(G) "Services" means the furnishing of labor, time, or effort	49
by a person, not involving the delivery of a specific end product	50
other than a report which, if provided, is merely incidental to	51
the required performance. "Services" does not include services	52
furnished pursuant to employment agreements or collective	53
bargaining agreements.	54

(H) "Supplies" means all property, including, but not limited	55
to, equipment, materials, other tangible assets, and insurance,	56
but excluding real property or an interest in real property.	57

(I) "Competitive selection" means any of the following	58
procedures for making purchases:	59

(1) Competitive sealed bidding under section 125.07 of the	60
Revised Code;	61

(2) Competitive sealed proposals under section 125.071 of the	62
Revised Code;	63

(3) Reverse auctions under section 125.072 of the Revised	64
Code.	65

(J) "Veteran" means a person who served in the armed forces	66
of the United States on active military duty and was discharged	67
from the service under honorable conditions, and who either served	68
on active duty for reasons other than training or, while serving	69
on active duty for training, incurred a disability recognized by	70
the United States department of veterans affairs or department of	71
defense as service-connected.	72

(K) "Qualifying veteran-owned business" means one of the	73
following that is also eligible for the Ohio products preference	74
allowed under section 125.09 of the Revised Code:	75

(1) A sole proprietorship owned by a veteran;

76

(2) A partnership in which a majority of the partnership is	77
owned by veterans;	78

(3) A limited liability company in which a majority of the	79
membership interests of the company are owned by veterans; or	80

(4) A corporation owned wholly by individuals in which a	81
majority of the common stock of the corporation is owned by	82
veterans.	83

Sec. 125.09.  (A) Pursuant to section 125.07 of the Revised	84
Code, the department of administrative services may prescribe such	85
conditions under which competitive sealed bids will be received	86
and terms of the proposed purchase as it considers necessary;	87
provided, that all such conditions and terms shall be reasonable	88
and shall not unreasonably restrict competition, and bidders may	89
bid upon all or any item of the supplies or services listed in	90
such notice. Those bidders claiming the preference for United	91
States and, Ohio, and qualifying veteran-owned business products	92
outlined in this chapter shall designate in their bids either that	93
the product to be supplied is an Ohio product or produced or mined	94
by a qualifying veteran-owned business, or that, under the rules	95
established by the director of administrative services, they	96
qualify as having a significant Ohio economic presence.	97

(B) The department may require that each bidder provide	98
sufficient information about the energy efficiency or energy usage	99
of the bidder's product or service.	100

(C) The director of administrative services shall, by rule	101
adopted pursuant to Chapter 119. of the Revised Code, prescribe	102
criteria and procedures for use by all state agencies in giving	103
preference to United States and, Ohio, and qualifying	104
veteran-owned business products as required by division (B) of	105
section 125.11 of the Revised Code. The rules shall extend to:	106

(1) Criteria for determining that a product is produced or	107
mined in the United States rather than in another country or	108
territory;	109

(2) Criteria for determining that a product is produced or	110
mined in Ohio;	111

(3) Subject to division (D) of this section, criteria for	112
determining whether a product is produced or mined by a qualifying	113
veteran-owned business;	114

(4) Information to be submitted by bidders as to the nature	115
of a product and the location where it is produced or mined;	116

(4)(5) Criteria and procedures to be used by the director to	117
qualify bidders located in states bordering Ohio who might	118
otherwise be excluded from being awarded a contract by operation	119
of this section and section 125.11 of the Revised Code. The	120
criteria and procedures shall recognize the level and regularity	121
of interstate commerce between Ohio and the border states and	122
provide that the non-Ohio businesses may qualify for award of a	123
contract as long as they are located in a state that imposes no	124
greater restrictions than are contained in this section and	125
section 125.11 of the Revised Code upon persons located in Ohio	126
selling products or services to agencies of that state. The	127
criteria and procedures shall also provide that a non-Ohio	128
business shall not bid on a contract for state printing in this	129
state if the business is located in a state that excludes Ohio	130
businesses from bidding on state printing contracts in that state.	131

(5)(6) Criteria and procedures to be used to qualify bidders	132
whose manufactured products, except for mined products, are	133
produced in other states or in North America, but the bidders have	134
a significant Ohio economic presence in terms of the number of	135
employees or capital investment a bidder has in this state.	136
Bidders with a significant Ohio economic presence shall qualify	137
for award of a contract on the same basis as if their products	138
were produced in this state.	139

(6)(7) Criteria and procedures for the director to grant	140
waivers of the requirements of division (B) of section 125.11 of	141
the Revised Code on a contract-by-contract basis where compliance	142
with those requirements would result in the state agency paying an	143
excessive price for the product or acquiring a disproportionately	144
inferior product;	145

(7)(8) Such other requirements or procedures reasonably	146
necessary to implement the system of preferences established	147
pursuant to division (B) of section 125.11 of the Revised Code.	148

In adopting the rules required under this divisiondivisions	149
(C)(1), (2), (4), (5), (6), (7), and (8) of this section, the	150
director shall, to the maximum extent possible, conform to the	151
requirements of the federal "Buy America Act," 47 Stat. 1520,	152
(1933), 41 U.S.C.A. 10a-10d, as amended, and to the regulations	153
adopted thereunder.	154

(D) Where the director of administrative services determines	155
that selection of the lowest qualifying veteran-owned business	156
bid, if any, will not result in an excessive price or a	157
disproportionately inferior product or service, the director shall	158
propose a contract award to the low qualifying veteran-owned	159
business bid at the bid price quoted. As used in this division,	160
"excessive price" means a price that exceeds the lowest price	161
submitted by a bidder that is not a qualifying veteran-owned	162
business by the lesser of five thousand dollars or five per cent	163
of that lowest price, after accounting for all other preferences	164
allowed to bidders under this section.	165

Sec. 125.11.  (A) Subject to division (B) of this section,	166
contracts awarded pursuant to a reverse auction under section	167
125.072 of the Revised Code or pursuant to competitive sealed	168
bidding, including contracts awarded under section 125.081 of the	169
Revised Code, shall be awarded to the lowest responsive and	170
responsible bidder on each item in accordance with section 9.312	171
of the Revised Code. When the contract is for meat products as	172
defined in section 918.01 of the Revised Code or poultry products	173
as defined in section 918.21 of the Revised Code, only those bids	174
received from vendors offering products from establishments on the	175
current list of meat and poultry vendors established and	176
maintained by the director of administrative services under	177
section 125.17 of the Revised Code shall be eligible for	178
acceptance. The department of administrative services may accept	179
or reject any or all bids in whole or by items, except that when	180
the contract is for services or products available from a	181
qualified nonprofit agency pursuant to sections 125.60 to 125.6012	182
or 4115.31 to 4115.35 of the Revised Code, the contract shall be	183
awarded to that agency.	184

(B) Prior to awarding a contract under division (A) of this	185
section, the department of administrative services or the state	186
agency responsible for evaluating a contract for the purchase of	187
products shall evaluate the bids received according to the	188
criteria and procedures established pursuant to divisions (C)(1)	189
and, (2), and (3) of section 125.09 of the Revised Code for	190
determining if a product is produced or mined in the United States	191
and, if a product is produced or mined in this state, and if a	192
product is produced or mined by a qualifying veteran-owned	193
business. The department or other state agency shall first remove	194
bids that offer products that have not been or that will not be	195
produced or mined in the United States. From among the remaining	196
bids, the department or other state agency shall select the lowest	197
responsive and responsible bid, in accordance with section 9.312	198
of the Revised Code, from among the bids that offer products that	199
have been produced or mined in this state or from bids, if any,	200
that offer products that have been produced or mined by qualifying	201
veteran-owned businesses in accordance with division (D) of	202
section 125.09 of the Revised Code, where sufficient competition	203
can be generated within this state to ensure that compliance with	204
these requirements will not result in an excessive price for the	205
product or acquiring a disproportionately inferior product.	206

(C) Division (B) of this section applies to contracts for	207
which competitive bidding is waived by the controlling board.	208

(D) Division (B) of this section does not apply to the	209
purchase by the division of liquor control of spirituous liquor.	210

(E) The director of administrative services shall publish in	211
the form of a model act for use by counties, townships, municipal	212
corporations, or any other political subdivision described in	213
division (B) of section 125.04 of the Revised Code, a system of	214
preferences for products mined and produced in this state and in	215
the United States and for Ohio-based contractors. The model act	216
shall reflect substantial equivalence to the system of preferences	217
in purchasing and public improvement contracting procedures under	218
which the state operates pursuant to this chapter and section	219
153.012 of the Revised Code. To the maximum extent possible,	220
consistent with the Ohio system of preferences in purchasing and	221
public improvement contracting procedures, the model act shall	222
incorporate all of the requirements of the federal "Buy America	223
Act," 47 Stat. 1520 (1933), 41 U.S.C. 10a to 10d, as amended, and	224
the rules adopted under that act.	225

Before and during the development and promulgation of the	226
model act, the director shall consult with appropriate statewide	227
organizations representing counties, townships, and municipal	228
corporations so as to identify the special requirements and	229
concerns these political subdivisions have in their purchasing and	230
public improvement contracting procedures. The director shall	231
promulgate the model act by rule adopted pursuant to Chapter 119.	232
of the Revised Code and shall revise the act as necessary to	233
reflect changes in this chapter or section 153.012 of the Revised	234
Code.	235

The director shall make available copies of the model act,	236
supporting information, and technical assistance to any township,	237
county, or municipal corporation wishing to incorporate the	238
provisions of the act into its purchasing or public improvement	239
contracting procedure.	240

Sec. 3772.033. In carrying out the responsibilities vested in	241
the commission by this chapter, the commission may do all the	242
following and may designate any such responsibilities to the	243
executive director, to the commission's employees, or to the	244
gaming agents:	245

(A) Inspect and examine all premises where casino gaming is	246
conducted or gaming supplies, devices, or equipment are	247
manufactured, sold, or distributed;	248

(B) Inspect all gaming supplies, devices, and equipment in or	249
about a casino facility;	250

(C) Summarily impound and seize and remove from the casino	251
facility premises gaming supplies, devices, and equipment for the	252
purpose of examination and inspection;	253

(D) Determine any facts, or any conditions, practices, or	254
other matters, as the commission considers necessary or proper to	255
aid in the enforcement of this chapter or of a rule adopted	256
thereunder;	257

(E) Audit gaming operations, including those that have ceased	258
operation;	259

(F) Investigate, for the purpose of prosecution, any	260
suspected violation of this chapter or rules adopted thereunder;	261

(G) Investigate as appropriate to aid the commission and to	262
seek the executive director's advice in adopting rules;	263

(H) Secure information as is necessary to provide a basis for	264
recommending legislation for the improvement of this chapter;	265

(I) Make, execute, and otherwise effectuate all contracts and	266
other agreements, including contracts for necessary purchases of	267
goods and services. Except for any contract entered into with	268
independent testing laboratories under section 3772.31 of the	269
Revised Code, the commission shall ensure use of Ohio or	270
qualifying veteran-owned business products or services in	271
compliance with sections 125.09 and 125.11 of the Revised Code and	272
all rules adopted thereunder.	273

(J) Employ the services of persons the commission considers	274
necessary for the purposes of consultation or investigation, and	275
fix the salaries of, or contract for the services of, legal,	276
accounting, technical, operational, and other personnel and	277
consultants;	278

(K) Secure, by agreement, information and services as the	279
commission considers necessary from any state agency or other unit	280
of state government;	281

(L) Acquire furnishings, equipment, supplies, stationery,	282
books, and all other things the commission considers necessary or	283
desirable to successfully and efficiently carry out the	284
commission's duties and functions; and	285

(M) Perform all other things the commission considers	286
necessary to effectuate the intents and purposes of this chapter.	287
This section shall not prohibit the commission from imposing	288
administrative discipline, including fines and suspension or	289
revocation of licenses, on licensees under this chapter if the	290
licensee is found to be in violation of the commission's rules.	291

Sec. 5747.61.  (A) As used in this section, "veteran" means a	292
person subject to the tax imposed by section 5747.02 of the	293
Revised Code who served in the armed forces of the United States	294
on active military duty and was discharged from the service under	295
honorable conditions, and who either served on active duty for	296
reasons other than training or, while serving on active duty for	297
training, incurred a disability recognized by the United States	298
department of veterans affairs or department of defense as	299
service-connected.	300

(B) There is hereby allowed a nonrefundable credit against	301
the tax imposed by section 5747.02 of the Revised Code for a	302
taxpayer that is an employer required to deduct and withhold	303
income tax from an employee's compensation and remit such amounts	304
under sections 5747.06 and 5747.07 of the Revised Code and that	305
employs a veteran for a period of twelve consecutive months,	306
provided the veteran is employed by the employer for at least one	307
thousand five hundred sixty hours during that period. The amount	308
of the credit shall equal two thousand dollars for each veteran so	309
employed.	310

The credit shall be claimed for the taxable year immediately	311
following the taxable year that includes the date that is one year	312
following the date on which the veteran was hired. The credit	313
shall be claimed in the order required under section 5747.98 of	314
the Revised Code. Any credit amount in excess of the tax due after	315
allowing for credits that precede the credit under this section in	316
that order may be carried forward to any ensuing taxable year, but	317
the amount of any excess credit allowed in any such year shall be	318
deducted from the balance carried forward to the next year.	319

A credit may be claimed under this section by a taxpayer only	320
once for each individual veteran. A person that claims the credit	321
under section 5751.55 of the Revised Code may not claim the credit	322
under this section for the same veteran.	323

Nothing in this section limits or disallows pass-through	324
treatment of the credit.	325

Sec. 5747.98.  (A) To provide a uniform procedure for	326
calculating the amount of tax due under section 5747.02 of the	327
Revised Code, a taxpayer shall claim any credits to which the	328
taxpayer is entitled in the following order:	329

(1) The retirement income credit under division (B) of	330
section 5747.055 of the Revised Code;	331

(2) The senior citizen credit under division (C) of section	332
5747.05 of the Revised Code;	333

(3) The lump sum distribution credit under division (D) of	334
section 5747.05 of the Revised Code;	335

(4) The dependent care credit under section 5747.054 of the	336
Revised Code;	337

(5) The lump sum retirement income credit under division (C)	338
of section 5747.055 of the Revised Code;	339

(6) The lump sum retirement income credit under division (D)	340
of section 5747.055 of the Revised Code;	341

(7) The lump sum retirement income credit under division (E)	342
of section 5747.055 of the Revised Code;	343

(8) The low-income credit under section 5747.056 of the	344
Revised Code;	345

(9) The credit for displaced workers who pay for job training	346
under section 5747.27 of the Revised Code;	347

(10) The campaign contribution credit under section 5747.29	348
of the Revised Code;	349

(11) The twenty-dollar personal exemption credit under	350
section 5747.022 of the Revised Code;	351

(12) The joint filing credit under division (G) of section	352
5747.05 of the Revised Code;	353

(13) The nonresident credit under division (A) of section	354
5747.05 of the Revised Code;	355

(14) The credit for a resident's out-of-state income under	356
division (B) of section 5747.05 of the Revised Code;	357

(15) The credit for employers that enter into agreements with	358
child day-care centers under section 5747.34 of the Revised Code;	359

(16) The credit for employers that reimburse employee child	360
care expenses under section 5747.36 of the Revised Code;	361

(17) The credit for adoption of a minor child under section	362
5747.37 of the Revised Code;	363

(18) The credit for purchases of lights and reflectors under	364
section 5747.38 of the Revised Code;	365

(19) The nonrefundable job retention credit under division	366
(B) of section 5747.058 of the Revised Code;	367

(20) The credit for selling alternative fuel under section	368
5747.77 of the Revised Code;	369

(21) The nonrefundable credit for employing veterans under	370
section 5747.61 of the Revised Code;	371

(22) The second credit for purchases of new manufacturing	372
machinery and equipment and the credit for using Ohio coal under	373
section 5747.31 of the Revised Code;	374

(22)(23) The job training credit under section 5747.39 of the	375
Revised Code;	376

(23)(24) The enterprise zone credit under section 5709.66 of	377
the Revised Code;	378

(24)(25) The credit for the eligible costs associated with a	379
voluntary action under section 5747.32 of the Revised Code;	380

(25)(26) The credit for employers that establish on-site	381
child day-care centers under section 5747.35 of the Revised Code;	382

(26)(27) The ethanol plant investment credit under section	383
5747.75 of the Revised Code;	384

(27)(28) The credit for purchases of qualifying grape	385
production property under section 5747.28 of the Revised Code;	386

(28)(29) The small business investment credit under section	387
5747.81 of the Revised Code;	388

(29)(30) The credit for research and development and	389
technology transfer investors under section 5747.33 of the Revised	390
Code;	391

(30)(31) The enterprise zone credits under section 5709.65 of	392
the Revised Code;	393

(31)(32) The research and development credit under section	394
5747.331 of the Revised Code;	395

(32)(33) The credit for rehabilitating a historic building	396
under section 5747.76 of the Revised Code;	397

(33)(34) The refundable credit for rehabilitating a historic	398
building under section 5747.76 of the Revised Code;	399

(34)(35) The refundable jobs creation credit or job retention	400
credit under division (A) of section 5747.058 of the Revised Code;	401

(35)(36) The refundable credit for taxes paid by a qualifying	402
entity granted under section 5747.059 of the Revised Code;	403

(36)(37) The refundable credits for taxes paid by a	404
qualifying pass-through entity granted under division (J) of	405
section 5747.08 of the Revised Code;	406

(37)(38) The refundable credit for tax withheld under	407
division (B)(1) of section 5747.062 of the Revised Code;	408

(38)(39) The refundable credit for tax withheld under section	409
5747.063 of the Revised Code;	410

(39)(40) The refundable credit under section 5747.80 of the	411
Revised Code for losses on loans made to the Ohio venture capital	412
program under sections 150.01 to 150.10 of the Revised Code;	413

(40)(41) The refundable motion picture production credit	414
under section 5747.66 of the Revised Code.	415

(B) For any credit, except the refundable credits enumerated	416
in this section and the credit granted under division (I) of	417
section 5747.08 of the Revised Code, the amount of the credit for	418
a taxable year shall not exceed the tax due after allowing for any	419
other credit that precedes it in the order required under this	420
section. Any excess amount of a particular credit may be carried	421
forward if authorized under the section creating that credit.	422
Nothing in this chapter shall be construed to allow a taxpayer to	423
claim, directly or indirectly, a credit more than once for a	424
taxable year.	425

Sec. 5751.55.  (A) As used in this section, "veteran" has the	426
same meaning as in section 5747.61 of the Revised Code.	427

(B) There is hereby allowed a nonrefundable credit against	428
the tax imposed by section 5751.02 of the Revised Code for a	429
taxpayer that is an employer required to deduct and withhold	430
income tax from an employee's compensation and remit such amounts	431
under sections 5747.06 and 5747.07 of the Revised Code and that	432
employs a veteran for a period of twelve consecutive months,	433
provided the veteran is employed by the employer for at least one	434
thousand five hundred sixty hours during that period. The amount	435
of the credit shall equal two thousand dollars for each veteran so	436
employed.	437

The credit shall be claimed for the first tax period of the	438
calendar year immediately following the calendar year that	439
includes the date that is one year following the date on which the	440
veteran was hired. The credit shall be claimed in the order	441
required under section 5751.98 of the Revised Code. Any credit	442
amount in excess of the tax due after allowing for credits that	443
precede the credit under this section in that order may be carried	444
forward to any ensuing tax period, but the amount of any excess	445
credit allowed in any such period shall be deducted from the	446
balance carried forward to the next period.	447

A credit may be claimed under this section by a taxpayer only	448
once for each individual veteran. A person that claims the credit	449
under section 5747.61 of the Revised Code may not claim the credit	450
under this section for the same veteran.	451

Sec. 5751.98.  (A) To provide a uniform procedure for	452
calculating the amount of tax due under this chapter, a taxpayer	453
shall claim any credits to which it is entitled in the following	454
order:	455

(1) The nonrefundable jobs retention credit under division	456
(B) of section 5751.50 of the Revised Code;	457

(2) The nonrefundable credit for employing veterans under	458
section 5751.55 of the Revised Code;	459

(3) The nonrefundable credit for qualified research expenses	460
under division (B) of section 5751.51 of the Revised Code;	461

(3)(4) The nonrefundable credit for a borrower's qualified	462
research and development loan payments under division (B) of	463
section 5751.52 of the Revised Code;	464

(4)(5) The nonrefundable credit for calendar years 2010 to	465
2029 for unused net operating losses under division (B) of section	466
5751.53 of the Revised Code;	467

(5)(6) The refundable credit for calendar year 2030 for	468
unused net operating losses under division (C) of section 5751.53	469
of the Revised Code;	470

(6)(7) The refundable jobs creation credit or job retention	471
credit under division (A) of section 5751.50 of the Revised Code.	472

(B) For any credit except the refundable credits enumerated	473
in this section, the amount of the credit for a tax period shall	474
not exceed the tax due after allowing for any other credit that	475
precedes it in the order required under this section. Any excess	476
amount of a particular credit may be carried forward if authorized	477
under the section creating the credit.	478

Section 2.  That existing sections 125.01, 125.09, 125.11,	479
3772.033, 5747.98, and 5751.98 of the Revised Code are hereby	480
repealed.	481