As Passed by the House

129th General Assembly Regular Session 2011-2012

Sub. H. B. No. 511

Representatives Beck, Gonzales 

Cosponsors: Representatives Amstutz, Antonio, Baker, Barnes, Blair, Brenner, Bubp, Buchy, Carney, Celebrezze, Celeste, Clyde, Combs, Dovilla, Driehaus, Duffey, Fedor, Garland, Goyal, Grossman, Hackett, Hall, Henne, Huffman, Luckie, Mallory, Martin, McClain, Newbold, O'Brien, Phillips, Ruhl, Sears, Sprague, Stautberg, Stinziano, Szollosi, Terhar Speaker Batchelder 

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A BILL

To amend sections 121.22, 122.15, 122.151, 122.152,

1

122.153, 122.154, 122.28, 122.30 to 122.36,

2

150.03, 150.05, 150.07, 150.10, and 184.02 and to

3

repeal section 122.29 of the Revised Code to make

4

various changes to the administration of the

5

investment tax credit and the venture capital loan

6

loss tax credit, including the increase of the

7

maximum amount of the investment tax credit and

8

the venture capital loan loss tax credit and the

9

elimination of the Industrial Technology and

10

Enterprise Advisory Councils.

11

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

Section 1. That sections 121.22, 122.15, 122.151, 122.152,	12
122.153, 122.154, 122.28, 122.30, 122.31, 122.32, 122.33, 122.34,	13
122.35, 122.36, 150.03, 150.05, 150.07, 150.10, and 184.02 of the	14
Revised Code be amended to read as follows:	15

Sec. 121.22.  (A) This section shall be liberally construed	16
to require public officials to take official action and to conduct	17
all deliberations upon official business only in open meetings	18
unless the subject matter is specifically excepted by law.	19

(B) As used in this section:

20

(1) "Public body" means any of the following:

21

(a) Any board, commission, committee, council, or similar	22
decision-making body of a state agency, institution, or authority,	23
and any legislative authority or board, commission, committee,	24
council, agency, authority, or similar decision-making body of any	25
county, township, municipal corporation, school district, or other	26
political subdivision or local public institution;	27

(b) Any committee or subcommittee of a body described in	28
division (B)(1)(a) of this section;	29

(c) A court of jurisdiction of a sanitary district organized	30
wholly for the purpose of providing a water supply for domestic,	31
municipal, and public use when meeting for the purpose of the	32
appointment, removal, or reappointment of a member of the board of	33
directors of such a district pursuant to section 6115.10 of the	34
Revised Code, if applicable, or for any other matter related to	35
such a district other than litigation involving the district. As	36
used in division (B)(1)(c) of this section, "court of	37
jurisdiction" has the same meaning as "court" in section 6115.01	38
of the Revised Code.	39

(2) "Meeting" means any prearranged discussion of the public	40
business of the public body by a majority of its members.	41

(3) "Regulated individual" means either of the following:

42

(a) A student in a state or local public educational	43
institution;	44

(b) A person who is, voluntarily or involuntarily, an inmate,	45
patient, or resident of a state or local institution because of	46
criminal behavior, mental illness or retardation, disease,	47
disability, age, or other condition requiring custodial care.	48

(4) "Public office" has the same meaning as in section	49
149.011 of the Revised Code.	50

(C) All meetings of any public body are declared to be public	51
meetings open to the public at all times. A member of a public	52
body shall be present in person at a meeting open to the public to	53
be considered present or to vote at the meeting and for purposes	54
of determining whether a quorum is present at the meeting.	55

The minutes of a regular or special meeting of any public	56
body shall be promptly prepared, filed, and maintained and shall	57
be open to public inspection. The minutes need only reflect the	58
general subject matter of discussions in executive sessions	59
authorized under division (G) or (J) of this section.	60

(D) This section does not apply to any of the following:

61

(1) A grand jury;

62

(2) An audit conference conducted by the auditor of state or	63
independent certified public accountants with officials of the	64
public office that is the subject of the audit;	65

(3) The adult parole authority when its hearings are	66
conducted at a correctional institution for the sole purpose of	67
interviewing inmates to determine parole or pardon;	68

(4) The organized crime investigations commission established	69
under section 177.01 of the Revised Code;	70

(5) Meetings of a child fatality review board established	71
under section 307.621 of the Revised Code and meetings conducted	72
pursuant to sections 5153.171 to 5153.173 of the Revised Code;	73

(6) The state medical board when determining whether to	74
suspend a certificate without a prior hearing pursuant to division	75
(G) of either section 4730.25 or 4731.22 of the Revised Code;	76

(7) The board of nursing when determining whether to suspend	77
a license or certificate without a prior hearing pursuant to	78
division (B) of section 4723.281 of the Revised Code;	79

(8) The state board of pharmacy when determining whether to	80
suspend a license without a prior hearing pursuant to division (D)	81
of section 4729.16 of the Revised Code;	82

(9) The state chiropractic board when determining whether to	83
suspend a license without a hearing pursuant to section 4734.37 of	84
the Revised Code;	85

(10) The executive committee of the emergency response	86
commission when determining whether to issue an enforcement order	87
or request that a civil action, civil penalty action, or criminal	88
action be brought to enforce Chapter 3750. of the Revised Code;	89

(11) The board of directors of the nonprofit corporation	90
formed under section 187.01 of the Revised Code or any committee	91
thereof, and the board of directors of any subsidiary of that	92
corporation or a committee thereof;	93

(12) An audit conference conducted by the audit staff of the	94
department of job and family services with officials of the public	95
office that is the subject of that audit under section 5101.37 of	96
the Revised Code.	97

(E) The controlling board, the development financing advisory	98
council, the industrial technology and enterprise advisory council	99
third frontier commission, the tax credit authority, or the	100
minority development financing advisory board, when meeting to	101
consider granting assistance pursuant to Chapter 122. or 166. of	102
the Revised Code, in order to protect the interest of the	103
applicant or the possible investment of public funds, by unanimous	104
vote of all board, council, commission, or authority members	105
present, may close the meeting during consideration of the	106
following information confidentially received by the authority,	107
council, commission, or board from the applicant:	108

(1) Marketing plans;

109

(2) Specific business strategy;

110

(3) Production techniques and trade secrets;

111

(4) Financial projections;

112

(5) Personal financial statements of the applicant or members	113
of the applicant's immediate family, including, but not limited	114
to, tax records or other similar information not open to public	115
inspection.	116

The vote by the authority, council, commission, or board to	117
accept or reject the application, as well as all proceedings of	118
the authority, council, commission, or board not subject to this	119
division, shall be open to the public and governed by this	120
section.	121

(F) Every public body, by rule, shall establish a reasonable	122
method whereby any person may determine the time and place of all	123
regularly scheduled meetings and the time, place, and purpose of	124
all special meetings. A public body shall not hold a special	125
meeting unless it gives at least twenty-four hours' advance notice	126
to the news media that have requested notification, except in the	127
event of an emergency requiring immediate official action. In the	128
event of an emergency, the member or members calling the meeting	129
shall notify the news media that have requested notification	130
immediately of the time, place, and purpose of the meeting.	131

The rule shall provide that any person, upon request and	132
payment of a reasonable fee, may obtain reasonable advance	133
notification of all meetings at which any specific type of public	134
business is to be discussed. Provisions for advance notification	135
may include, but are not limited to, mailing the agenda of	136
meetings to all subscribers on a mailing list or mailing notices	137
in self-addressed, stamped envelopes provided by the person.	138

(G) Except as provided in division (J) of this section, the	139
members of a public body may hold an executive session only after	140
a majority of a quorum of the public body determines, by a roll	141
call vote, to hold an executive session and only at a regular or	142
special meeting for the sole purpose of the consideration of any	143
of the following matters:	144

(1) To consider the appointment, employment, dismissal,	145
discipline, promotion, demotion, or compensation of a public	146
employee or official, or the investigation of charges or	147
complaints against a public employee, official, licensee, or	148
regulated individual, unless the public employee, official,	149
licensee, or regulated individual requests a public hearing.	150
Except as otherwise provided by law, no public body shall hold an	151
executive session for the discipline of an elected official for	152
conduct related to the performance of the elected official's	153
official duties or for the elected official's removal from office.	154
If a public body holds an executive session pursuant to division	155
(G)(1) of this section, the motion and vote to hold that executive	156
session shall state which one or more of the approved purposes	157
listed in division (G)(1) of this section are the purposes for	158
which the executive session is to be held, but need not include	159
the name of any person to be considered at the meeting.	160

(2) To consider the purchase of property for public purposes,	161
or for the sale of property at competitive bidding, if premature	162
disclosure of information would give an unfair competitive or	163
bargaining advantage to a person whose personal, private interest	164
is adverse to the general public interest. No member of a public	165
body shall use division (G)(2) of this section as a subterfuge for	166
providing covert information to prospective buyers or sellers. A	167
purchase or sale of public property is void if the seller or buyer	168
of the public property has received covert information from a	169
member of a public body that has not been disclosed to the general	170
public in sufficient time for other prospective buyers and sellers	171
to prepare and submit offers.	172

If the minutes of the public body show that all meetings and	173
deliberations of the public body have been conducted in compliance	174
with this section, any instrument executed by the public body	175
purporting to convey, lease, or otherwise dispose of any right,	176
title, or interest in any public property shall be conclusively	177
presumed to have been executed in compliance with this section	178
insofar as title or other interest of any bona fide purchasers,	179
lessees, or transferees of the property is concerned.	180

(3) Conferences with an attorney for the public body	181
concerning disputes involving the public body that are the subject	182
of pending or imminent court action;	183

(4) Preparing for, conducting, or reviewing negotiations or	184
bargaining sessions with public employees concerning their	185
compensation or other terms and conditions of their employment;	186

(5) Matters required to be kept confidential by federal law	187
or regulations or state statutes;	188

(6) Details relative to the security arrangements and	189
emergency response protocols for a public body or a public office,	190
if disclosure of the matters discussed could reasonably be	191
expected to jeopardize the security of the public body or public	192
office;	193

(7) In the case of a county hospital operated pursuant to	194
Chapter 339. of the Revised Code, a joint township hospital	195
operated pursuant to Chapter 513. of the Revised Code, or a	196
municipal hospital operated pursuant to Chapter 749. of the	197
Revised Code, to consider trade secrets, as defined in section	198
1333.61 of the Revised Code.	199

If a public body holds an executive session to consider any	200
of the matters listed in divisions (G)(2) to (7) of this section,	201
the motion and vote to hold that executive session shall state	202
which one or more of the approved matters listed in those	203
divisions are to be considered at the executive session.	204

A public body specified in division (B)(1)(c) of this section	205
shall not hold an executive session when meeting for the purposes	206
specified in that division.	207

(H) A resolution, rule, or formal action of any kind is	208
invalid unless adopted in an open meeting of the public body. A	209
resolution, rule, or formal action adopted in an open meeting that	210
results from deliberations in a meeting not open to the public is	211
invalid unless the deliberations were for a purpose specifically	212
authorized in division (G) or (J) of this section and conducted at	213
an executive session held in compliance with this section. A	214
resolution, rule, or formal action adopted in an open meeting is	215
invalid if the public body that adopted the resolution, rule, or	216
formal action violated division (F) of this section.	217

(I)(1) Any person may bring an action to enforce this	218
section. An action under division (I)(1) of this section shall be	219
brought within two years after the date of the alleged violation	220
or threatened violation. Upon proof of a violation or threatened	221
violation of this section in an action brought by any person, the	222
court of common pleas shall issue an injunction to compel the	223
members of the public body to comply with its provisions.	224

(2)(a) If the court of common pleas issues an injunction	225
pursuant to division (I)(1) of this section, the court shall order	226
the public body that it enjoins to pay a civil forfeiture of five	227
hundred dollars to the party that sought the injunction and shall	228
award to that party all court costs and, subject to reduction as	229
described in division (I)(2) of this section, reasonable	230
attorney's fees. The court, in its discretion, may reduce an award	231
of attorney's fees to the party that sought the injunction or not	232
award attorney's fees to that party if the court determines both	233
of the following:	234

(i) That, based on the ordinary application of statutory law	235
and case law as it existed at the time of violation or threatened	236
violation that was the basis of the injunction, a well-informed	237
public body reasonably would believe that the public body was not	238
violating or threatening to violate this section;	239

(ii) That a well-informed public body reasonably would	240
believe that the conduct or threatened conduct that was the basis	241
of the injunction would serve the public policy that underlies the	242
authority that is asserted as permitting that conduct or	243
threatened conduct.	244

(b) If the court of common pleas does not issue an injunction	245
pursuant to division (I)(1) of this section and the court	246
determines at that time that the bringing of the action was	247
frivolous conduct, as defined in division (A) of section 2323.51	248
of the Revised Code, the court shall award to the public body all	249
court costs and reasonable attorney's fees, as determined by the	250
court.	251

(3) Irreparable harm and prejudice to the party that sought	252
the injunction shall be conclusively and irrebuttably presumed	253
upon proof of a violation or threatened violation of this section.	254

(4) A member of a public body who knowingly violates an	255
injunction issued pursuant to division (I)(1) of this section may	256
be removed from office by an action brought in the court of common	257
pleas for that purpose by the prosecuting attorney or the attorney	258
general.	259

(J)(1) Pursuant to division (C) of section 5901.09 of the	260
Revised Code, a veterans service commission shall hold an	261
executive session for one or more of the following purposes unless	262
an applicant requests a public hearing:	263

(a) Interviewing an applicant for financial assistance under	264
sections 5901.01 to 5901.15 of the Revised Code;	265

(b) Discussing applications, statements, and other documents	266
described in division (B) of section 5901.09 of the Revised Code;	267

(c) Reviewing matters relating to an applicant's request for	268
financial assistance under sections 5901.01 to 5901.15 of the	269
Revised Code.	270

(2) A veterans service commission shall not exclude an	271
applicant for, recipient of, or former recipient of financial	272
assistance under sections 5901.01 to 5901.15 of the Revised Code,	273
and shall not exclude representatives selected by the applicant,	274
recipient, or former recipient, from a meeting that the commission	275
conducts as an executive session that pertains to the applicant's,	276
recipient's, or former recipient's application for financial	277
assistance.	278

(3) A veterans service commission shall vote on the grant or	279
denial of financial assistance under sections 5901.01 to 5901.15	280
of the Revised Code only in an open meeting of the commission. The	281
minutes of the meeting shall indicate the name, address, and	282
occupation of the applicant, whether the assistance was granted or	283
denied, the amount of the assistance if assistance is granted, and	284
the votes for and against the granting of assistance.	285

Sec. 122.15.  As used in sections 122.15 to 122.154 of the	286
Revised Code:	287

(A) "Edison centerDirector" means a cooperative research and	288
development facility that receives funding through the Thomas Alva	289
Edison grant program under division (C) of section 122.33director	290
of the Revised Codedevelopment.	291

(B) "Ohio entity" means any corporation, limited liability	292
company, or unincorporated business organization, including a	293
general or limited partnership, that has its principal place of	294
business located in this state and has at least fifty per cent of	295
its gross assets and fifty per cent of its employees located in	296
this state. If a corporation, limited liability company, or	297
unincorporated business organization is a member of an affiliated	298
group, the gross assets and the number of employees of all of the	299
members of that affiliated group, wherever those assets and	300
employees are located, shall be included for the purpose of	301
determining the percentage of the corporation's, company's, or	302
organization's gross assets and employees that are located in this	303
state.	304

(C) "Qualified trade or business" means any trade or business	305
that primarily involves research and development, technology	306
transfer, bio-technology, information technology, or the	307
application of new technology developed through research and	308
development or acquired through technology transfer. "Qualified	309
trade or business" does not include any of the following:	310

(1) Any trade or business involving the performance of	311
services in the field of law, engineering, architecture,	312
accounting, actuarial science, performing arts, consulting,	313
athletics, financial services, or brokerage services, or any trade	314
or business where the principal asset of the trade or business is	315
the reputation or skill of one or more of its employees;	316

(2) Any banking, insurance, financing, leasing, rental,	317
investing, or similar business;	318

(3) Any farming business, including the business of raising	319
or harvesting trees;	320

(4) Any business involving the production or extraction of	321
products of a character with respect to which a deduction is	322
allowable under section 611, 613, or 613A of the "Internal Revenue	323
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 611, 613, or 613A;	324

(5) Any business of operating a hotel, motel, restaurant, or	325
similar business;	326

(6) Any trade or business involving a hospital, a private	327
office of a licensed health care professional, a group practice of	328
licensed health care professionals, or a nursing home. As used in	329
division (C)(6) of this section:	330

(a) "Nursing home" has the same meaning as in section 3721.50	331
of the Revised Code.	332

(b) "Hospital" has the same meaning as in section 3727.01 of	333
the Revised Code.	334

(D) "Information technology" means the branch of technology	335
devoted to the study and application of data and the processing	336
thereof; the automatic acquisition, storage, manipulation or	337
transformation, management, movement, control, display, switching,	338
interchange, transmission or reception of data, and the	339
development or use of hardware, software, firmware, and procedures	340
associated with this processing. Information technology includes	341
matters concerned with the furtherance of computer science and	342
technology, design, development, installation and implementation	343
of information systems and applications that in turn will be	344
licensed or sold to a specific target market. Information	345
technology does not include the creation of a distribution method	346
for existing products and services.	347

(E) "Insider" means an individual who owns, controls, or	348
holds power to vote five per cent or more of the outstanding	349
securities of a business. For purposes of determining whether an	350
investor is an insider, the percentage of voting power in the Ohio	351
entity held by a person related to the investor shall be added to	352
the investor's percentage of voting power in the same Ohio entity,	353
if the investor claimed the person related to the investor as a	354
dependent or a spouse on the investor's federal income tax return	355
for the previous tax year.	356

(F) "Related to" means being the spouse, parent, child, or	357
sibling of an individual.	358

(G) "Research and development" means designing, creating, or	359
formulating new or enhanced products, equipment, or processes, and	360
conducting scientific or technological inquiry and experimentation	361
in the physical sciences with the goal of increasing scientific	362
knowledge that may reveal the bases for new or enhanced products,	363
equipment, or processes.	364

(H) "State tax liability" means any tax liability incurred	365
under division (D) of section 5707.03, section 5727.24, 5727.38,	366
or 5747.02, or Chapter 5733. of the Revised Code.	367

(I) "Technology transfer" means the transfer of technology	368
from one sector of the economy to another, including the transfer	369
of military technology to civilian applications, civilian	370
technology to military applications, or technology from public or	371
private research laboratories to military or civilian	372
applications.	373

(J) "Affiliated group" means two or more persons related in	374
such a way that one of the persons owns or controls the business	375
operations of another of those persons. In the case of a	376
corporation issuing capital stock, one corporation owns or	377
controls the business operations of another corporation if it owns	378
more than fifty per cent of the other corporation's capital stock	379
with voting rights. In the case of a limited liability company,	380
one person owns or controls the business operations of the company	381
if that person's membership interest, as defined in section	382
1705.01 of the Revised Code, is greater than fifty per cent of	383
combined membership interest of all persons owning such interests	384
in the company. In the case of an unincorporated business	385
organization, one person owns or controls the business operations	386
of the organization if, under the articles of organization or	387
other instrument governing the affairs of the organization, that	388
person has a beneficial interest in the organization's profits,	389
surpluses, losses, or other distributions greater than fifty per	390
cent of the combined beneficial interests of all persons having	391
such an interest in the organization.	392

(K) "Money" means United States currency, or a check, draft,	393
or cashier's check for United States currency, payable on demand	394
and drawn on a bank.	395

(L) "EDGE business enterprise" means an Ohio entity certified	396
by the director of administrative services as a participant in the	397
encouraging diversity, growth, and equity program established by	398
the governor's executive order 2002-17T.	399

(M) "Distressed area" has the same meaning as in section	400
122.23 of the Revised Code.	401

Sec. 122.151.  (A) An investor who proposes to make an	402
investment of money in an Ohio entity may apply to an Edison	403
centerthe director for a tax credit under this section. The	404
Edison centerdirector shall prescribe the form of the application	405
and any information that the investor must submit with the	406
application. The investor shall include with the application a fee	407
of two hundred dollars. The centerdirector, within threefour	408
weeks after receiving the application, shall review it, determine	409
whether the investor should be recommended for the tax credit, and	410
send written notice of itsthe director's initial determination to	411
the industrial technology and enterprise advisory councilthird	412
frontier commission established under section 184.01 of the	413
Revised Code and to the investor. If the centerdirector	414
determines the investor should not be recommended for the tax	415
credit, itthe director shall include in the notice the reasons	416
for the determination. Subject to divisions (C) and (D) of this	417
section, an investor is eligible for a tax credit if all of the	418
following requirements are met:	419

(1) The investor's investment of money is in an Ohio entity	420
engaged in a qualified trade or business.	421

(2) The Ohio entity had less than two million five hundred	422
thousand dollars of gross revenue during its most recently	423
completed fiscal year or had a net book value of less than two	424
million five hundred thousand dollars at the end of that fiscal	425
year.	426

(3) The investment takes the form of the purchase of common	427
or preferred stock, a membership interest, a partnership interest,	428
or any other ownership interest.	429

(4) The amount of the investment for which the credit is	430
being claimed does not exceed three hundred thousand dollars in	431
the case of an investment in an EDGE business enterprise or in an	432
Ohio entity located in a distressed area, or two hundred fifty	433
thousand dollars in the case of an investment in any other Ohio	434
entity.	435

(5) The money invested is entirely at risk of loss, where	436
repayment depends upon the success of the business operations of	437
the Ohio entity.	438

(6) No repayment of principal invested will be made for at	439
least three years from the date the investment is made.	440

(7) The annual combined amount of any dividend and interest	441
payments to be made to the investor will not exceed ten per cent	442
of the amount of the investment for at least three years from the	443
date the investment is made.	444

(8) The investor is not an employee with proprietary	445
decision-making authority of the Ohio entity in which the	446
investment of money is proposed, or related to such an individual.	447
The Ohio entity is not an individual related to the investor. For	448
purposes of this division, the industrial technology and	449
enterprise advisory councildirector shall define "an employee	450
with proprietary decision-making authority."	451

(9) The investor is not an insider.

452

For the purposes of determining the net book value of an Ohio	453
entity under division (A)(1) or (2) of this section, if the entity	454
is a member of an affiliated group, the combined net book values	455
of all of the members of that affiliated group shall be used.	456

Nothing in division (A)(6) or (7) of this section limits or	457
disallows the distribution to an investor in a pass-through entity	458
of a portion of the entity's profits equal to the investor's	459
federal, state, and local income tax obligations attributable to	460
the investor's allocable share of the entity's profits. Nothing in	461
division (A)(6) or (7) of this section limits or disallows the	462
sale by an investor of part or all of the investor's interests in	463
an Ohio entity by way of a public offering of shares in the Ohio	464
entity.	465

(B) A group of two but not more than twenty investors, each	466
of whom proposes to make an investment of money in the same Ohio	467
entity, may submit an application for tax credits under division	468
(A) of this section. The group shall include with the application	469
a fee of eight hundred dollars. The application shall identify	470
each investor in the group and the amount of money each investor	471
proposes to invest in the Ohio entity, and shall name a contact	472
person for the group. The Edison centerdirector, within three	473
four weeks after receiving the application, shall review it,	474
determine whether each investor of the group should be recommended	475
for a tax credit under the conditions set forth in division (A) of	476
this section, and send written notice of itsthe director's	477
determination to the industrial technology and enterprise	478
advisory councilcommission and to the contact person. The center	479
director shall not recommend that a group of investors receive a	480
tax credit unless each investor is eligible under those	481
conditions. The centerdirector may disqualify from a group any	482
investor who is not eligible under the conditions and recommend	483
that the remaining group of investors receive the tax credit. If	484
the centerdirector determines the group should not be recommended	485
for the tax credit, itthe director shall include in the notice	486
the reasons for the determination.	487

(C) The industrial technology and enterprise advisory council	488
shall establish from among its members a three-person committee.	489
Within four weeks after the councilcommission receives a notice	490
of recommendation from an Edison centerthe director, the	491
committeecommission shall review the recommendation and issue a	492
final determination of whether the investor or group is eligible	493
for a tax credit under the conditions set forth in division (A) of	494
this section. The committeecommission may require the investor	495
or group to submit additional information to support the	496
application. The vote of at least two members of the committee is	497
necessary for the issuance of a final determination or any other	498
action of the committee. Upon making the final determination, the	499
committeecommission shall send written notice of approval or	500
disapproval of the tax credit to the investor or group contact	501
person,and the director of development, and the Edison center. If	502
the committeecommission disapproves the tax credit, it shall	503
include in the notice the reasons for the disapproval.	504

(D)(1) The industrial technology and enterprise advisory	505
council committeecommission shall not approve more than one	506
million five hundred thousand dollars of investments in any one	507
Ohio entity. However, if a proposed investment of money in an Ohio	508
entity has been approved but the investor does not actually make	509
the investment, the committeecommission may reassign the amount	510
of that investment to another investor, as long as the total	511
amount invested in the entity under this section does not exceed	512
one million five hundred thousand dollars.	513

If the one-million-five-hundred-thousand-dollar limit for an	514
Ohio entity has not yet been reached and an application proposes	515
an investment of money that would exceed the limit for that	516
entity, the committeecommission shall send written notice to the	517
investor, or for a group, the contact person, that the investment	518
cannot be approved as requested. Upon receipt of the notice, the	519
investor or group may amend the application to propose an	520
investment of money that does not exceed the limit.	521

(2) Not more than forty-fivefifty-one million dollars of tax	522
credits shall be issued under sections 122.15 to 122.154 of the	523
Revised Code.	524

(E) If an investor makes an approved investment of less than	525
two hundred fifty thousand dollars in any Ohio entity other than	526
an EDGE business enterprise or in an Ohio entity located in a	527
distressed area, the investor may apply for approval of another	528
investment of money in that entity, as long as the total amount	529
invested in that entity by the investor under this section does	530
not exceed two hundred fifty thousand dollars. If an investor	531
makes an approved investment of less than three hundred thousand	532
dollars in an EDGE business enterprise or in an Ohio entity	533
located in a distressed area, the investor may apply for approval	534
of another investment of money in that entity, as long as the	535
total amount invested in that entity by the investor under this	536
section does not exceed three hundred thousand dollars. An	537
investor who receives approval of an investment of money as part	538
of a group may subsequently apply on an individual basis for	539
approval of an additional investment of money in the Ohio entity.	540

(F) The industrial technology and enterprise advisory council	541
committeecommission shall approve or disapprove tax credit	542
applications under this section in the order in which they are	543
received by the councilcommission.	544

(G) The director of development may disapprove any	545
application recommended by an Edison center and approved by the	546
industrial technology and enterprise advisory council committee,	547
or may disapprove a credit for which a tax credit certificate has	548
been issued under section 122.152 of the Revised Code, if the	549
director determines that the entity in which the applicant	550
proposes to invest or has invested is not an Ohio entity eligible	551
to receive investments that qualify for the credit. If the	552
director disapproves an application, the director shall certify	553
the action to the investor, the Edison center that recommended the	554
application, the industrial technology and enterprise advisory	555
council, and the tax commissioner, together with a written	556
explanation of the reasons for the disapproval. If the director	557
disapproves a tax credit after a tax credit certificate is issued,	558
the investor shall not claim the credit for the taxable year that	559
includes the day the director disapproves the credit, or for any	560
subsequent taxable year.	561

The director of development, in accordance with section	562
111.15 of the Revised Code and with the advice of the industrial	563
technology and enterprise advisory councilcommission, may adopt,	564
amend, and rescind rules necessary to implement sections 122.15 to	565
122.154 of the Revised Code.	566

(H) An Edison centerThe director shall use application fees	567
received under this section only for the costs of administering	568
sections 122.15 to 122.154 of the Revised Code.	569

Sec. 122.152.  (A) After receiving notice of approval for an	570
investment of money from the industrial technology and enterprise	571
advisory council committeethird frontier commission under section	572
122.151 of the Revised Code, an investor, within a period of time	573
determined by the committeecommission, may make the investment	574
and apply to the councilcommission for a tax credit certificate.	575
If the committeecommission is satisfied the investor has made	576
the investment in the proper form, it shall issue to the investor	577
a tax credit certificate signed by the chairperson of the	578
committee commission and the director of development indicating	579
that the investor is allowed a tax credit equal to one of the	580
following amounts:	581

(1) Thirty per cent of the investment if the investment was	582
made in an EDGE business enterprise or in an Ohio entity located	583
in a distressed area;	584

(2) Twenty-five per cent of the investment if the investment	585
was made in an Ohio entity other than an EDGE business enterprise.	586

An investor who receives approval of a proposed investment of	587
money through a group application, after making the investment,	588
shall apply for a tax credit certificate on an individual basis.	589

(B) An investor who is issued a tax credit certificate under	590
this section may claim a nonrefundable credit equal to the amount	591
indicated on the certificate against any state tax liability. The	592
investor shall claim the credit for the taxable year in which the	593
certificate is issued.	594

(1) If the credit to which a taxpayer otherwise would be	595
entitled under this section for any taxable year is greater than	596
the tax otherwise due under division (D) of section 5707.03 or	597
section 5727.24 or 5727.38 of the Revised Code, the excess shall	598
be allowed as a credit in each of the ensuing fifteen taxable	599
years, but the amount of any excess credit allowed in an ensuing	600
taxable year shall be deducted from the balance carried forward to	601
the next taxable year.	602

(2) If the credit to which a taxpayer otherwise would be	603
entitled under this section for any taxable year is greater than	604
the tax otherwise due under section 5747.02 or Chapter 5733. of	605
the Revised Code, after allowing for any other credits that	606
precede the credit allowed under this section in the order	607
required under section 5733.98 or 5747.98 of the Revised Code, the	608
excess shall be allowed as a credit in each of the ensuing fifteen	609
taxable years, but the amount of any excess credit allowed in an	610
ensuing taxable year shall be deducted from the balance carried	611
forward to the next taxable year.	612

(C) Any portion of a credit allowed under this section that	613
is utilized by an investor to reduce the investor's state tax	614
liability shall not be utilized by any other person.	615

(D) To claim a tax credit allowed under this section, an	616
investor shall attach to the appropriate return a copy of the	617
certificate issued to the investor under this section.	618

(E) Nothing in this section shall limit or disallow	619
pass-through treatment of a pass-through entity's income,	620
deductions, or credits, or other amounts necessary to compute a	621
state tax liability.	622

(F) A tax credit certificate issued to an investor under this	623
section may not be transferred by that investor to any other	624
person.	625

(G)(1) The director of development shall develop the form of	626
the tax credit certificate and the industrial technology and	627
enterprise advisory council committeecommission shall use that	628
form when issuing a tax credit certificate under this section.	629

(2) The director of development shall report to the tax	630
commissioner any information requested by the commissioner	631
concerning tax credit certificates issued under this section.	632

(H) An investment made by an investor or group of investors	633
who enter into a contractual agreement with an Ohio entity to	634
invest money in the Ohio entity is an acceptable investment if all	635
of the following conditions are met:	636

(1) The investment is made pursuant to a subscription	637
agreement providing that the investor or group of investors is	638
entitled to receive a refund of funds if the investment is not	639
approved by the industrial technology and enterprise advisory	640
council committeecommission.	641

(2) The investment is placed in escrow until the investment	642
is approved by the industrial technology and enterprise advisory	643
council committeecommission.	644

(3) The investor or group of investors shows proof of the	645
withdrawal of the funds by the Ohio entity after the investment is	646
approved by the industrial technology and enterprise advisory	647
council committeecommission.	648

Sec. 122.153.  If the industrial technology and enterprise	649
advisory council committeethird frontier commission receives	650
information alleging that an investor that was issued a tax credit	651
certificate presented false information to an Edison centerthe	652
director or the committeecommission in connection with obtaining	653
the certificate, it shall send written notice to the investor that	654
if the allegation is found to be true the investor may be	655
penalized as provided in this section. After giving the investor	656
an opportunity to be heard on the allegation, the committee	657
commission shall determine if the investor presented false	658
information in connection with obtaining a tax credit certificate.	659

If the committeecommission determines the investor submitted	660
false information, it may revoke any remaining tax credit	661
available to the investor. The committeecommission shall send	662
written notice of the revocation to the investor and the tax	663
commissioner. The tax commissioner may make an assessment against	664
the investor to recapture any amount of tax credit that the	665
investor already has claimed. The time limitations on assessments	666
under the laws of the particular tax against which the investor	667
claimed the credit do not apply to an assessment under this	668
section.	669

Sec. 122.154.  (A) A business may apply to an Edison center	670
the director for a determination as to whether the business is an	671
Ohio entity eligible to receive investments of money under section	672
122.151 of the Revised Code that qualify the investor for a tax	673
credit under section 122.152 of the Revised Code. The business	674
shall include with the application a fee of one hundred fifty	675
dollars and a business plan. The Edison centerdirector shall	676
prescribe any other information the business must submit with the	677
application and the form of the application. The centerdirector,	678
within threefour weeks after receiving the application, shall	679
review it, determine whether the business is an Ohio entity	680
eligible to receive investments of money that qualify for the tax	681
credit, and send written notice to the industrial technology and	682
enterprise advisory councilthird frontier commission and the	683
business of itsthe director's initial determination. If the	684
centerdirector determines that the business is not an Ohio	685
entity eligible to receive investments of money that qualify for	686
the tax credit, itthe director shall include in the notice the	687
reasons for the determination.	688

Within four weeks after the councilcommission receives a	689
notice of recommendation from an Edison centerthe director, the	690
industrial technology and enterprise advisory council committee	691
established under section 122.152 of the Revised Codecommission	692
shall review the recommendation and issue a final determination of	693
whether the business is an Ohio entity eligible to receive	694
investments of money under section 122.151 of the Revised Code	695
that qualify an investor for a tax credit under section 122.152 of	696
the Revised Code. The committeecommission may require the	697
business to submit additional information to support the	698
application. The vote of at least two members of the committee is	699
necessary for the issuance of a final determination. On making the	700
final determination, the committeecommission shall send written	701
notice of approval or disapproval to the business,and the	702
director of development, and the Edison center. If the committee	703
commission determines that the business is not an Ohio entity	704
eligible to receive investments of money that qualify for the tax	705
credit, it shall include in the notice the reasons for the	706
determination.	707

(B) The department of development shall maintain a list of	708
the businesses that have been determined to be Ohio entities	709
eligible to receive investments of money that qualify for the tax	710
credit. The department shall furnish copies of the list to the	711
public upon request.	712

(C) The department of development may prescribe a schedule	713
under which businesses periodically must submit information to	714
enable the centerdepartment to maintain the accuracy of the list.	715
At the times required in the schedule, each business on the list	716
shall submit any information the centerdepartment requires to	717
determine if the business continues to be an Ohio entity eligible	718
to receive investments of money that qualify for the tax credit.	719

(D) An Edison centerThe director shall use fees received	720
under this section only for the costs of administering sections	721
122.15 to 122.154 of the Revised Code.	722

(E) The Edison centersdirector and the industrial technology	723
and enterprise advisory council and its committeecommission do	724
not assume any responsibility for the accuracy or truthfulness of	725
information furnished by an Ohio entity or its agents.	726

An investor in an Ohio entity is solely responsible for due	727
diligence in verifying information submitted by an Ohio entity. An	728
Edison centerThe department is not liable for any action	729
resulting from its provision of such information to investors in	730
accordance with sections 122.15 to 122.154 of the Revised Code.	731

Sec. 122.28.  As used in sections 122.28 and 122.30 to 122.36	732
of the Revised Code:	733

(A) "New technology" means the development through science or	734
research of methods, processes, and procedures, including but not	735
limited to those involving the processing and utilization of coal,	736
for practical application in industrial or agribusiness	737
situations.	738

(B) "Industrial research" means study and investigation in	739
giving new shapes, new qualities or new combinations to matter or	740
material products by the application of labor thereto or the	741
rehabilitation of an existing matter or material product.	742

(C) "Enterprise" means a business with its principal place of	743
business in this state or which proposes to be engaged in this	744
state in research and development or in the provision of products	745
or services involving a significant amount of new technology.	746

(D) "Educational institutions" means nonprofit public and	747
private colleges and universities, incorporated or unincorporated,	748
in the state.	749

(E) "Small business" means an enterprise with less than four	750
hundred employees, including corporations, partnerships,	751
unincorporated entities, proprietorships, and joint enterprises.	752

(F) "Applied research" means the application of basic	753
research for the development of new technology.	754

Sec. 122.30.  The industrial technology and enterprise	755
advisory councilthird frontier commission established in section	756
184.01 of the Revised Code and the director of development are	757
vested with the powers and duties provided in sections 122.28 and	758
122.30 to 122.36 of the Revised Code, to promote the welfare of	759
the people of the state through the interaction of the business	760
and industrial community and educational institutions in the	761
development of new technology and enterprise.	762

(A) It is necessary for the state to establish the industrial	763
technology and enterprise advisory council and the programs	764
created pursuant to sections 122.28 and 122.30 to 122.36 of the	765
Revised Code to accomplish the following purposes which are	766
determined to be essential:	767

(1) Improve the existing industrial and agricultural base of	768
the state;	769

(2) Improve the economy of the state by providing employment,	770
increasing productivity, and slowing the rate of inflation;	771

(3) Develop markets worldwide for the products of the state's	772
natural resources and agricultural and manufacturing industries;	773

(4) Maintain a high standard of living for the people of the	774
state.	775

(B) The industrial technology and enterprise advisory council	776
commission shall do allboth of the following:	777

(1) Make recommendations to the director of development as to	778
applications for assistance pursuant to sections 122.28 and 122.30	779
to 122.36 of the Revised Code. The councilcommission may revise	780
its recommendations to reflect any changes in the proposed	781
assistance made by the director.	782

(2) Advise the director in the administration of sections	783
122.28 and 122.30 to 122.36 of the Revised Code;	784

(3) Adopt bylaws to govern the conduct of the council's	785
business.	786

(C) The director of development shall do all of the	787
following:	788

(1) Receive applications for assistance under sections 122.28	789
and 122.30 to 122.36 of the Revised Code and, after processing,	790
forward them to the councilcommission together with necessary	791
supporting information;	792

(2) Receive the recommendations of the councilcommission and	793
make a final determination whether to approve the application for	794
assistance;	795

(3) Transmit determinations to approve assistance exceeding	796
forty thousand dollars to the controlling board, together with any	797
information the controlling board requires, for the board's review	798
and decision as to whether to approve the assistance;	799

(4) Gather and disseminate information and conduct hearings,	800
conferences, seminars, investigations, and special studies on	801
problems and programs concerning industrial research and new	802
technology and their commercial applications in the state;	803

(5) Establish an annual program to recognize the	804
accomplishments and contributions of individuals and organizations	805
in the development of industrial research and new technology in	806
the state;	807

(6) Stimulate both public and industrial awareness and	808
interest in industrial research and development of new technology	809
primarily in the areas of industrial processes, implementation,	810
energy, agribusiness, medical technology, avionics, and food	811
processing;	812

(7) Develop and implement comprehensive and coordinated	813
policies, programs, and procedures promoting industrial research	814
and new technology;	815

(8) Propose appropriate legislation or executive actions to	816
stimulate the development of industrial research and new	817
technology by enterprises and individuals;	818

(9) Encourage and facilitate contracts between industry,	819
agriculture, educational institutions, federal agencies, and state	820
agencies, with special emphasis on industrial research and new	821
technology by small businesses and agribusiness;	822

(10) Participate with any state agency in developing specific	823
programs and goals to assist in the development of industrial	824
research and new technology and monitor performance;	825

(11) Assist enterprises in obtaining alternative forms of	826
governmental or commercial financing for industrial research and	827
new technology;	828

(12) Assist enterprises or individuals in the implementation	829
of new programs and policies and the expansion of existing	830
programs to provide an atmosphere conducive to increased	831
cooperation among and participation by individuals, enterprises,	832
and educational institutions engaged in industrial research and	833
the development of new technology;	834

(13) Advertise, prepare, print, and distribute books, maps,	835
pamphlets, and other information which in the judgment of the	836
director will further its purposes;	837

(14) Include in the director's annual report to the governor	838
and the general assembly a report on the activities for the	839
preceding calendar year under sections 122.28 and 122.30 to 122.36	840
of the Revised Code;	841

(15) Approve the expenditure of money appropriated by the	842
general assembly for the purpose of sections 122.28 and 122.30 to	843
122.36 of the Revised Code;	844

(16) Identify and implement federal research and development	845
programs which would link Ohio's industrial base, research	846
facilities, and natural resources;	847

(17) Employ and fix the compensation of technical and	848
professional personnel, who shall be in the unclassified civil	849
service, and employ other personnel, who shall be in the	850
classified civil service, as necessary to carry out the provisions	851
of sections 122.28 and 122.30 to 122.36 of the Revised Code.	852

Sec. 122.31.  All expenses and obligations incurred by the	853
director of development and the industrial technology and	854
enterprise advisory councilthird frontier commission in carrying	855
out their powers and in exercising their duties under sections	856
122.28 and 122.30 to 122.36 of the Revised Code, are payable from	857
revenues or other receipts or income from grants, gifts,	858
contributions, compensation, reimbursement, and funds established	859
in accordance with those sections or general revenue funds	860
appropriated by the general assembly for operating expenses of the	861
director or councilcommission.	862

Sec. 122.32.  The director of development, on behalf of the	863
programs authorized pursuant to sections 122.28 and 122.30 to	864
122.36 of the Revised Code, may receive and accept grants, gifts,	865
and contributions of money, property, labor, and other things of	866
value to be held, used, and applied only for the purpose for which	867
the grants, gifts, and contributions are made, from individuals,	868
private and public corporations, from the United States or any	869
agency of the United States, and from any political subdivision of	870
the state. The director may agree to repay any contribution of	871
money or to return any property contributed or its value at times,	872
in amounts, and on terms and conditions excluding the payment of	873
interest as the director determines at the time the contribution	874
is made. The director may evidence the obligation by written	875
contracts, subject to section 122.31 of the Revised Code, provided	876
that the director shall not thereby incur indebtedness of or	877
impose liability upon the state or any political subdivision.	878

Sec. 122.33.  The director of development shall administer	879
the following programs:	880

(A) The industrial technology and enterprise development	881
grant program, to provide capital to acquire, construct, enlarge,	882
improve, or equip and to sell, lease, exchange, and otherwise	883
dispose of property, structures, equipment, and facilities within	884
the state.	885

Such funding may be made to enterprises that propose to	886
develop new products or technologies when the director finds all	887
of the following factors to be present:	888

(1) The undertaking will benefit the people of the state by	889
creating or preserving jobs and employment opportunities or	890
improving the economic welfare of the people of the state, and	891
promoting the development of new technology.	892

(2) There is reasonable assurance that the potential	893
royalties to be derived from the sale of the product or process	894
described in the proposal will be sufficient to repay the funding	895
pursuant to sections 122.28 and 122.30 to 122.36 of the Revised	896
Code and that, in making the agreement, as it relates to patents,	897
copyrights, and other ownership rights, there is reasonable	898
assurance that the resulting new technology will be utilized to	899
the maximum extent possible in facilities located in Ohio.	900

(3) The technology and research to be undertaken will allow	901
enterprises to compete more effectively in the marketplace. Grants	902
of capital may be in such form and conditioned upon such terms as	903
the boarddirector deems appropriate.	904

(B) The industrial technology and enterprise resources	905
program to provide for the collection, dissemination, and exchange	906
of information regarding equipment, facilities, and business	907
planning consultation resources available in business, industry,	908
and educational institutions and to establish methods by which	909
small businesses may use available facilities and resources. The	910
methods may include, but need not be limited to, leases	911
reimbursing the educational institutions for their actual costs	912
incurred in maintaining the facilities and agreements assigning	913
royalties from development of successful products or processes	914
through the use of the facilities and resources. The director	915
shall operate this program in conjunction with the board of	916
regents.	917

(C) The Thomas Alva Edison grant program to provide grants to	918
foster research, development, or technology transfer efforts	919
involving enterprises and educational institutions that will lead	920
to the creation of jobs.	921

(1) Grants may be made to a nonprofit organization or a	922
public or private educational institution, department, college,	923
institute, faculty member, or other administrative subdivision or	924
related entity of an educational institution when the director	925
finds that the undertaking will benefit the people of the state by	926
supporting research in advanced technology areas likely to improve	927
the economic welfare of the people of the state through promoting	928
the development of new commercial technology.	929

(2) Grants may be made in a form and conditioned upon terms	930
as the director considers appropriate.	931

(3) Grants made under this program shall in all instances be	932
in conjunction with a contribution to the project by a cooperating	933
enterprise which maintains or proposes to maintain a relevant	934
research, development, or manufacturing facility in the state, by	935
a nonprofit organization, or by an educational institution or	936
related entity; however, funding provided by an educational	937
institution or related entity shall not be from general revenue	938
funds appropriated by the Ohio general assembly. No grant made	939
under this program shall exceed the contribution made by the	940
cooperating enterprise, nonprofit organization, or educational	941
institution or related entity. The director may consider	942
cooperating contributions in the form of state of the art new	943
equipment or in other forms provided the director determines that	944
the contribution is essential to the successful implementation of	945
the project. The director may adopt rules or guidelines for the	946
valuation of contributions of equipment or other property.	947

(4) The director may determine fields of research from which	948
grant applications will be accepted under this program.	949

Sec. 122.34.  The exercise of the powers granted by sections	950
122.28 and 122.30 to 122.36 of the Revised Code will be in all	951
respects for the benefit of the people of the state, for the	952
improvement of commerce and prosperity, improvement of employment	953
conditions, and will constitute the performance of essential	954
governmental functions.	955

Sec. 122.35.  All moneys received under sections 122.28 and	956
122.30 to 122.36 of the Revised Code are trust funds to be held	957
and applied solely as provided in those sections and section	958
166.03 of the Revised Code. All moneys, except when deposited with	959
the treasurer of the state, shall be kept and secured in	960
depositories as selected by the director of development in the	961
manner provided in sections 135.01 to 135.21 of the Revised Code,	962
insofar as those sections are applicable. All moneys held by the	963
director in trust to carry out the purposes of sections 122.28 and	964
122.30 to 122.36 of the Revised Code shall be used as provided in	965
sections 122.28 and 122.30 to 122.36 of the Revised Code and at no	966
time be part of other public funds.	967

Sec. 122.36.  Any materials or data submitted to, made	968
available to, or received by the director of development, the	969
industrial technology and enterprise advisory councilthird	970
frontier commission, or the controlling board, to the extent that	971
the material or data consist of trade secrets, as defined in	972
section 1333.61 of the Revised Code, or commercial or financial	973
information, regarding projects are not public records for the	974
purposes of section 149.43 of the Revised Code.	975

Sec. 150.03. Within ninety days after April 9, 2003, the	976
authority shall establish, and subsequently may modify as it	977
considers necessary, a written investment policy governing the	978
investment of money from the program fund, which is hereby	979
created. The program fund shall consist of the proceeds of loans	980
acquired by a program administrator. The authority is subject to	981
Chapter 119. of the Revised Code with respect to the establishment	982
or modification of the policy. The policy shall meet all the	983
following requirements:	984

(A) It is consistent with the purpose of the program stated	985
in section 150.01 of the Revised Code.	986

(B) Subject to divisions (C), (D), and (E) of this section,	987
it permits the investment of money from the program fund in	988
private, for-profit venture capital funds, including funds of	989
funds, that invest in enterprises in the seed or early stage of	990
business development or established business enterprises	991
developing new methods or technologies, and that demonstrate	992
potential to generate high levels of successful investment	993
performance.	994

(C) It specifies that a program administrator or fund manager	995
employed by the program administrator shall invest not less than	996
seventy-five per cent of program fund money under its investment	997
authority in Ohio-based venture capital funds.	998

(D) It specifies both of the following:

999

(1) That not less than an amount equal to fifty per cent of	1000
program fund money invested in any venture capital fund be	1001
invested by the venture capital fund in Ohio-based business	1002
enterprises;	1003

(2) That, commencing with the first program fund commitment	1004
to each venture capital fund, the aggregate amount funded into	1005
Ohio-based business enterprises by all venture capital funds to	1006
which the program fund has committed be not less than the	1007
aggregate amount of all program fund money funded into those	1008
venture capital funds.	1009

(E) It specifies that a program administrator or fund manager	1010
employed by the program administrator shall not invest money from	1011
the program fund in a venture capital fund to the extent that the	1012
total amount of program fund money invested in the venture capital	1013
fund, when combined with any program fund money invested in a	1014
venture capital fund under the same management as, and formed	1015
within two years before or after the formation of, that venture	1016
capital fund, exceeds the lesser of the following:	1017

(1) Ten million dollars;

1018

(2)(a) In the case of an Ohio-based venture capital fund,	1019
fifty per cent of the total amount of capital committed to the	1020
fund from all sources, after accounting for capital committed from	1021
the program fund;	1022

(b) In the case of any other venture capital fund, twenty per	1023
cent of the total amount of capital committed to the fund from all	1024
sources, after accounting for capital committed from the program	1025
fund.	1026

(F) It specifies that a program administrator or fund manager	1027
employed by the program administrator shall not commit capital	1028
from the program fund to a venture capital fund until the venture	1029
capital fund receives commitment of at least the same amount from	1030
other investors in the fund.	1031

(G) It specifies the general conditions a private, for-profit	1032
investment fund must meet to be selected as a program	1033
administrator under section 150.05 of the Revised Code, including,	1034
as a significant selection standard, direct experience managing	1035
external or nonproprietary capital in private equity fund of funds	1036
formats.	1037

(H) It specifies the criteria the authority must consider	1038
when making a determination under division (B)(1) of section	1039
150.04 of the Revised Code.	1040

(I) It includes investment standards and general limitations	1041
on allowable investments that the authority considers reasonable	1042
and necessary to achieve the purposes of this chapter as stated in	1043
division (B) of section 150.01 of the Revised Code, minimize the	1044
need for the authority to grant tax credits under section 150.07	1045
of the Revised Code, ensure compliance of the program	1046
administrators with all applicable laws of this state and the	1047
United States, and ensure the safety and soundness of investments	1048
of money from the program fund.	1049

(J) It prohibits the investment of money from the program	1050
fund directly in persons other than venture capital funds, except	1051
for temporary investment in investment grade debt securities or	1052
temporary deposit in interest-bearing accounts or funds pending	1053
permanent investment in venture capital funds.	1054

Sec. 150.05.  (A) The authority shall select, as program	1055
administrators, not more than two private, for-profit investment	1056
funds to acquire loans for the program fund and to invest money in	1057
the program fund as prescribed in the investment policy	1058
established or modified by the authority in accordance with	1059
sections 150.03 and 150.04 of the Revised Code. The authority	1060
shall give equal consideration, in selecting these program	1061
administrators, to minority owned and controlled investment funds,	1062
to funds owned and controlled by women, to ventures involving	1063
minority owned and controlled funds, and to ventures involving	1064
funds owned and controlled by women that otherwise meet the	1065
policies and criteria established by the authority. To be eligible	1066
for selection, an investment fund must be incorporated or	1067
organized under Chapter 1701., 1705., 1775., 1776., 1782., or	1068
1783. of the Revised Code, must have an established business	1069
presence in this state, and must be capitalized in accordance with	1070
any state and federal laws applicable to the issuance or sale of	1071
securities.	1072

The authority shall select program administrators only after	1073
soliciting and evaluating requests for proposals as prescribed in	1074
this section. The authority shall publish a notice of a request	1075
for proposals in newspapers of general circulation in this state	1076
once each week for two consecutive weeks before a date specified	1077
by the authority as the date on which it will begin accepting	1078
proposals. The notices shall contain a general description of the	1079
subject of the proposed agreement and the location where the	1080
request for proposals may be obtained. The request for proposals	1081
shall include all the following:	1082

(1) Instructions and information to respondents concerning	1083
the submission of proposals, including the name and address of the	1084
office where proposals are to be submitted;	1085

(2) Instructions regarding the manner in which respondents	1086
may communicate with the authority, including the names, titles,	1087
and telephone numbers of the individuals to whom such	1088
communications shall be directed;	1089

(3) Description of the performance criteria that will be used	1090
to evaluate whether a respondent selected by the authority is	1091
satisfying the authority's investment policy;	1092

(4) Description of the factors and criteria to be considered	1093
in evaluating respondents' proposals, which shall include the past	1094
performance of the respondent in successfully administering	1095
similar programs and achieving positive investment returns, the	1096
relative importance of each factor or criterion, and description	1097
of the authority's evaluation procedure;	1098

(5) Description of any documents that may be incorporated by	1099
reference into the request for proposals, provided that the	1100
request specifies where such documents may be obtained and such	1101
documents are readily available to all interested parties.	1102

After the date specified for receiving proposals, the	1103
authority shall evaluate submitted proposals. The authority may	1104
discuss a respondent's proposal with that respondent to clarify or	1105
revise a proposal or the terms of the agreement.	1106

The authority shall choose for review proposals from at least	1107
three respondents the authority considers qualified to operate the	1108
program in the best interests of the investment policy adopted by	1109
the authority. If three or fewer proposals are submitted, the	1110
authority shall review each proposal. The authority may cancel a	1111
request for proposals at any time before entering into an	1112
agreement with a respondent. The authority shall provide	1113
respondents fair and equal opportunity for such discussions. The	1114
authority may terminate discussions with any respondent upon	1115
written notice to the respondent.	1116

(B) After reviewing the chosen proposals, the authority may	1117
select not more than two such respondents and enter into a written	1118
agreement with each of the selected respondents, provided that at	1119
no time shall there be agreements with more than two persons.	1120

The agreement shall do all of the following:

1121

(1) Specify that borrowing and investing by the program	1122
administrator will be budgeted to guarantee that no tax credits	1123
will be granted during the first four years of the Ohio venture	1124
capital program, and will be structured to ensure that payments of	1125
principal, interest, or interest equivalent due in any fiscal	1126
year, when added to such payments due from any other program	1127
administrator, does not exceed twentytwenty-six million five	1128
hundred thousand dollars;	1129

(2) Require investment by the program administrator or the	1130
fund manager employed by the program administrator to be in	1131
compliance with the investment policy established or modified in	1132
accordance with sections 150.03 and 150.04 of the Revised Code	1133
that is in effect at the time the investment is made, and prohibit	1134
the program administrator or fund manager from engaging in any	1135
investment activities other than activities to carry out that	1136
policy;	1137

(3) Require periodic financial reporting by the program	1138
administrator to the authority, which reporting shall include an	1139
annual audit by an independent auditor and such other financial	1140
reporting as is specified in the agreement or otherwise required	1141
by the authority for the purpose of ensuring that the program	1142
administrator is carrying out the investment policy;	1143

(4) Specify any like standards or general limitations in	1144
addition to or in furtherance of investment standards or	1145
limitations that apply pursuant to division (H) of section 150.03	1146
of the Revised Code;	1147

(5) Require the program administrator to apply program fund	1148
revenue first to the payment of principal borrowed by the program	1149
administrator for investment under the program, then to interest	1150
related to that principal, and then to amounts necessary to cover	1151
the program administrator's pro rata share required under division	1152
(B)(9) of this section; and require the program administrator to	1153
pay the authority not less than ninety per cent of the amount by	1154
which program fund revenue attributable to investments under the	1155
program administrator's investment authority exceeds amounts so	1156
applied;	1157

(6) Specify the procedures by which the program administrator	1158
shall certify immediately to the authority the necessity for the	1159
authority to issue tax credit certificates pursuant to contracts	1160
entered into under section 150.07 of the Revised Code;	1161

(7) Specify any general limitations regarding the employment	1162
of a fund manager by the program administrator, in addition to an	1163
express limitation that the fund manager be a person with	1164
demonstrated, substantial, successful experience in the design and	1165
management of seed and venture capital investment programs and in	1166
capital formation. The fund manager may be, but need not be, an	1167
equity owner or affiliate of the program administrator.	1168

(8) Specify the terms and conditions under which the	1169
authority or the program administrator may terminate the	1170
agreement, including in the circumstance that the program	1171
administrator or fund manager violates the investment policy;	1172

(9) Require the program administrator or fund manager	1173
employed by the program administrator to provide capital in the	1174
form of a loan equal to one per cent of the amount of outstanding	1175
loans by lenders to the program fund. The loan from the program	1176
administrator or fund manager shall be on the same terms and	1177
conditions as loans from other lenders, except that the loan from	1178
the program administrator or fund manager shall not be secured by	1179
the Ohio venture capital fund or tax credits available to other	1180
lenders under division (B) of section 150.04 of the Revised Code.	1181
Such capital shall be placed at the same risk as the proceeds from	1182
such loans. The program administrator shall receive a pro rata	1183
share of the net income, including net loss, from the investment	1184
of money from the program fund, but is not entitled to the	1185
security against losses provided under section 150.04 of the	1186
Revised Code.	1187

(10) Specify that the program administrator and the fund	1188
manager employed by the program administrator must have a	1189
significant presence in this state, and define how a significant	1190
presence in this state shall be determined.	1191

Sec. 150.07.  (A) For the purpose stated in section 150.01 of	1192
the Revised Code, the authority may authorize a lender to claim	1193
one of the refundable tax credits allowed under section 5707.031,	1194
5725.19, 5727.241, 5729.08, 5733.49, or 5747.80 of the Revised	1195
Code. The credits shall be authorized by a written contract with	1196
the lender. The contract shall specify the terms under which the	1197
lender may claim the credit, including the amount of loss, if any,	1198
the lender must incur before the lender may claim the credit;	1199
specify that the credit shall not exceed the amount of the loss;	1200
and specify that the lender may claim the credit only for a loss	1201
certified by a program administrator to the authority under the	1202
procedures prescribed under division (B)(6) of section 150.05 of	1203
the Revised Code. The program administrator shall provide to the	1204
authority an estimate of the amount of tax credits, if any, that	1205
are likely, in the administrator's reasonable judgment, to be	1206
claimed by a lender during the current and next succeeding state	1207
fiscal years. The estimate shall be provided at the same time each	1208
year that the administrator is required to report the annual audit	1209
to the authority under section 150.05 of the Revised Code.	1210

(B) Tax credits may be authorized at any time after the	1211
authority establishes the investment policy under section 150.03	1212
of the Revised Code, but a tax credit so authorized may not be	1213
claimed before July 1, 2007, or after June 30, 2026, except, with	1214
respect to loans made from the proceeds of obligations issued	1215
under section 4582.71 of the Revised Code, a tax credit may not be	1216
claimed before July 1, 2012, or after June 30, 2036.	1217

(C)(1) Upon receiving certification of a lender's loss from a	1218
program administrator pursuant to the procedures in the investment	1219
policy, the authority shall issue a tax credit certificate to the	1220
lender, except as otherwise provided in division (D) of this	1221
section.	1222

(2) If the lender is a pass-through entity, as defined in	1223
section 5733.04 of the Revised Code, then each equity investor in	1224
the lender pass-through entity shall be entitled to claim one of	1225
the tax credits allowed under division (A) of this section for	1226
that equity investor's taxable year in which or with which ends	1227
the taxable year of the lender pass-through entity in an amount	1228
based on the equity investor's distributive or proportionate share	1229
of the credit amount set forth in the certificate issued by the	1230
authority. If all equity investors of the lender pass-through	1231
entity are not eligible to claim a credit against the same tax set	1232
forth in division (A) of this section, then each equity investor	1233
may elect to claim a credit against the tax to which the equity	1234
investor is subject to in an amount based on the equity investor's	1235
distributive or proportionate share of the credit amount set forth	1236
in the certificate issued by the authority.	1237

(3) The certificate shall state the amount of the credit and	1238
the calendar year under section 5707.031, 5725.19, 5727.241, or	1239
5729.08, the tax year under section 5733.49, or the taxable year	1240
under section 5747.80 of the Revised Code for which the credit may	1241
be claimed. The authority, in conjunction with the tax	1242
commissioner, shall develop a system for issuing tax credit	1243
certificates for the purpose of verifying that any credit claimed	1244
is a credit issued under this section and is properly taken in the	1245
year specified in the certificate and in compliance with division	1246
(B) of this section.	1247

(D) The authority shall not, in any fiscal year, issue tax	1248
credit certificates under this section in a total amount exceeding	1249
twentytwenty-six million five hundred thousand dollars. The	1250
authority shall not issue tax credit certificates under this	1251
section in a total amount exceeding threefive hundred eighty	1252
fifty million dollars.	1253

(E) Notwithstanding any other section of this chapter or any	1254
provision of Chapter 5707., 5725., 5727., 5729., 5733., or 5747.	1255
of the Revised Code, if provided by the terms of an agreement	1256
entered into by the issuer and the authority under division (E) of	1257
section 150.02 of the Revised Code, and subject to the limitations	1258
of divisions (B) and (D) of this section, a trustee shall have the	1259
right, for the benefit of the issuer, to receive and claim the	1260
credits authorized under division (A) of this section solely for	1261
the purpose provided for in section 150.04 of the Revised Code,	1262
and the trustee shall be entitled to file a tax return, an amended	1263
tax return, or an estimated tax return at such times as are	1264
permitted or required under the applicable provisions of Chapter	1265
5707., 5725., 5727., 5729., 5733., or 5747. of the Revised Code	1266
for the purpose of claiming credits issued to the trustee. The	1267
trustee shall receive the proceeds of such a tax credit for the	1268
benefit of the issuer, and shall apply the proceeds solely to	1269
satisfy a loss or restore a reserve as provided in section 150.04	1270
of the Revised Code. Nothing in this section shall require a	1271
trustee to file a tax return under any chapter for any purpose	1272
other than claiming such credits if the trustee is not otherwise	1273
required to make such a filing.	1274

The general assembly may from time to time modify or repeal	1275
any of the taxes against which the credits authorized under	1276
division (A) of this section may be claimed, and may authorize	1277
those credits to be claimed for the purposes provided for in	1278
section 150.04 of the Revised Code with respect to any other tax	1279
imposed by this state; provided, that if any obligations issued	1280
under section 4582.71 of the Revised Code are then outstanding and	1281
such modification or repeal would have the effect of impairing any	1282
covenant made in or pursuant to an agreement under division (E) of	1283
section 150.02 of the Revised Code regarding the maintenance or	1284
restoration of reserves established and maintained with a trustee	1285
consistent with division (B)(2) of section 150.04 of the Revised	1286
Code and such agreement, the state shall provide other security to	1287
the extent necessary to avoid or offset the impairment of such	1288
covenant.	1289

Sec. 150.10.  (A) On the first day of January of the second	1290
year after the date of entering into an agreement under section	1291
150.05 of the Revised Code and of each ensuing year, the authority	1292
shall file with the clerk of the house of representatives, the	1293
clerk of the senate, and the chairpersons of the house and senate	1294
standing committees predominantly concerned with economic	1295
development, and the chairpersons of the house and senate standing	1296
committees predominantly concerned with taxation a written report	1297
on the Ohio venture capital program. The report shall include all	1298
the following:	1299

(1) A description of the details of the investment policy	1300
established or modified in accordance with sections 150.03 and	1301
150.04 of the Revised Code;	1302

(2) The authority's assessment of the program's achievement	1303
of its purpose stated in section 150.01 of the Revised Code;	1304

(3) The value of tax credit certificates issued by the	1305
authority under section 150.07 of the Revised Code in each fiscal	1306
year ending on or before the preceding thirtieth day of June;	1307

(4) The amount of tax credits claimed pursuant to section	1308
5707.031, 5725.19, 5727.241, 5729.08, 5733.49, or 5747.80 of the	1309
Revised Code, as to the respective taxes involved;	1310

(5) The financial status of the Ohio venture capital fund;

1311

(6) The names of venture capital funds in which money from	1312
the program fund has been invested and the locations of their	1313
principal offices, and the names of the enterprises in which each	1314
of those venture capital funds has invested such money and the	1315
locations of those enterprises' principal offices, and the amount	1316
of investment by those funds in Ohio-based business enterprises.	1317
For such Ohio-based business enterprises, the report shall	1318
indicate the development stage, as that term is defined by the	1319
authority, of each enterprise on the date a venture capital fund	1320
first invests money from the program fund in the enterprise, the	1321
aggregate amount of program funds invested in such enterprises	1322
from every investment round, and the sources of any funding	1323
secured by such enterprises after a venture capital fund first	1324
invests money from the program fund in the enterprise;	1325

(7) Any recommendations for modifying the program to better	1326
achieve the purpose stated in section 150.01 of the Revised Code;	1327

(8) The geographic distribution of investments from venture	1328
capital funds of money distributed to the funds under the program;	1329

(9) The number of jobs created at Ohio-based enterprises in	1330
which a venture capital fund or funds have invested program fund	1331
money since the date program fund money was first invested in the	1332
enterprise.	1333

(B) During each year that a report is issued under division	1334
(A) of this section, the chairperson of the authority, or another	1335
member of the authority designated by the chairperson as the	1336
authority's representative, shall be required to appear in person	1337
before the standing committees of the house and senate	1338
predominantly concerned with economic development and the standing	1339
committees of the house and senate predominantly concerned with	1340
taxation to give testimony concerning the status of the Ohio	1341
venture capital program.	1342

Sec. 184.02.  (A) In addition to the powers and duties under	1343
sections 121.22, 122.15 to 122.154, 122.28, 122.30 to 122.36,	1344
184.10 to 184.20, and 184.37 of the Revised Code, the third	1345
frontier commission may perform any act to ensure the performance	1346
of any function necessary or appropriate to carry out the purposes	1347
of, and exercise the powers granted under, sections 184.01 and	1348
184.02 of the Revised Code. In addition, the commission may do any	1349
of the following:	1350

(1) Adopt, amend, and rescind rules under section 111.15 of	1351
the Revised Code for the administration of any aspect of its	1352
operations;	1353

(2) Adopt bylaws governing its operations, including bylaws	1354
that establish procedures and set policies as may be necessary to	1355
assist with the furtherance of its purposes;	1356

(3) Appoint and set the compensation of employees needed to	1357
carry out its duties;	1358

(4) Contract with, retain the services of, or designate, and	1359
fix the compensation of, such financial consultants, accountants,	1360
other consultants and advisors, and other independent contractors	1361
as may be necessary or desirable to carry out its duties;	1362

(5) Solicit input and comments from the third frontier	1363
advisory board, and specialized industry, professional, and other	1364
relevant interest groups concerning its purposes;	1365

(6) Facilitate alignment of the state's science and	1366
technology programs and activities;	1367

(7) Make grants and loans to individuals, public agencies,	1368
private companies or organizations, or joint ventures for any of	1369
the broad range of activities related to its purposes.	1370

(B) In addition to the powers and duties under sections	1371
184.10 to 184.20 and 184.37 of the Revised Code, the commission	1372
shall do all of the following:	1373

(1) Establish a competitive process for the award of grants	1374
and loans that is designed to fund the most meritorious proposals	1375
and, when appropriate, provide for peer review of proposals;	1376

(2) Within ninety days after the end of each fiscal year,	1377
submit to the governor and the general assembly a report of the	1378
activities of the commission during the preceding fiscal year;	1379

(3) With specific application to the biomedical research and	1380
technology transfer trust fund, periodically make strategic	1381
assessments of the types of state investments in biomedical	1382
research and biotechnology in the state that would likely create	1383
jobs and business opportunities in the state and produce the most	1384
beneficial long-term improvements to the public health of Ohioans,	1385
including, but not limited to, biomedical research and	1386
biotechnology initiatives that address tobacco-related illnesses	1387
as may be outlined in any master agreement. The commission shall	1388
award grants and loans from the fund pursuant to a process	1389
established under division (B)(1) of this section.	1390

Section 2. That existing sections 121.22, 122.15, 122.151,	1391
122.152, 122.153, 122.154, 122.28, 122.30, 122.31, 122.32, 122.33,	1392
122.34, 122.35, 122.36, 150.03, 150.05, 150.07, 150.10, and 184.02	1393
and section 122.29 of the Revised Code are hereby repealed.	1394

Section 3. Section 122.33 of the Revised Code is presented in	1395
this act as a composite of the section as amended by both Am. Sub.	1396
H.B. 117 and Am. Sub. H.B. 356 of the 121st General Assembly. The	1397
General Assembly, applying the principle stated in division (B) of	1398
section 1.52 of the Revised Code that amendments are to be	1399
harmonized if reasonably capable of simultaneous operation, finds	1400
that the composite is the resulting version of the section in	1401
effect prior to the effective date of the section as presented in	1402
this act.	1403

Section 4. The amendment by this act of sections 121.22,	1404
122.15, 122.151, 122.152, 122.153, 122.154, 122.28, 122.30,	1405
122.31, 122.32, 122.33, 122.34, 122.35, 122.36, and 184.02 of the	1406
Revised Code, and the repeal by this act of section 122.29 of the	1407
Revised Code, take effect on October 1, 2012.	1408