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| To amend section 5751.98 and to enact section 5751.54 | 1 |
| of the Revised Code to establish a nonrefundable | 2 |
| commercial activity tax credit for companies | 3 |
| involved in horizontal well drilling or related | 4 |
| oil and gas production services that hire Ohio | 5 |
| residents who have completed a federally | 6 |
| registered apprenticeship program. | 7 |
| Section 1. That section 5751.98 be amended and section | 8 |
| 5751.54 of the Revised Code be enacted to read as follows: | 9 |
| Sec. 5751.54. (A) As used in this section: | 10 |
| (1) "Owner," "horizontal well," "production operation," and | 11 |
| "well pad" have the same meanings as in section 1509.01 of the | 12 |
| Revised Code. | 13 |
| (2) "Severance" has the same meaning as in section 5749.01 of | 14 |
| the Revised Code. | 15 |
| (3) "Qualifying wages" means a rate of pay that is at least | 16 |
| two hundred fifty per cent of the federal minimum wage under 29 | 17 |
| U.S.C. 206 or is equivalent to such rate of pay for a full-time | 18 |
| employee. | 19 |
| (4) "Full-time employee" means an employee employed for at | 20 |
| least thirty-five hours per week. | 21 |
| (5) "Horizontal well employer" means the owner of a | 22 |
| horizontal well or any other person that performs a horizontal | 23 |
| well service. | 24 |
| (6) "Horizontal well service" means any of the following: | 25 |
| (a) Operations involving the severance of natural gas, oil, | 26 |
| or other hydrocarbons by a horizontal well, including any | 27 |
| production operations; | 28 |
| (b) Preparation of the well pad or the means of access to the | 29 |
| well pad; | 30 |
| (c) Transportation of equipment, materials, or supplies to | 31 |
| the well site or of the products of the well from the well site. | 32 |
| Transportation may include movement of such products through pipes | 33 |
| or tubing or by any other means. | 34 |
| (d) Processing the raw products of the horizontal well to | 35 |
| produce pipeline quality natural gas by separating impurities, | 36 |
| nonmethane hydrocarbons, and fluids at the wellhead or another | 37 |
| site; | 38 |
| (e) Operating or servicing equipment utilized in any | 39 |
| horizontal well service. | 40 |
| (7) "Horizontal well employee" means a full-time employee of | 41 |
| a horizontal well employer who is domiciled in this state for the | 42 |
| purposes of Chapter 5747. of the Revised Code, is paid qualifying | 43 |
| wages, is primarily employed in a horizontal well service, and has | 44 |
| completed a qualified apprenticeship program that corresponds to | 45 |
| the appropriate horizontal well service and that is registered in | 46 |
| accordance with 29 C.F.R. 29.3. | 47 |
| (B) Any horizontal well employer may claim a nonrefundable | 48 |
| credit against the tax imposed under section 5751.02 of the | 49 |
| Revised Code. If the horizontal well employer is a calendar | 50 |
| quarter taxpayer, the amount of the credit shall equal two | 51 |
| thousand five hundred dollars for each horizontal well employee | 52 |
| hired by the horizontal well employer in the tax period preceding | 53 |
| the tax period on the basis of which the tax is owed and employed | 54 |
| by the horizontal well employer for the duration of the tax period | 55 |
| on the basis of which the tax is owed. If the horizontal well | 56 |
| employer is a calendar year taxpayer, the credit equals two | 57 |
| thousand five hundred dollars for each horizontal well employee | 58 |
| hired by the horizontal well employer during the calendar year on | 59 |
| the basis of which the tax is owed and employed by the horizontal | 60 |
| well employer for at least three consecutive months in that year. | 61 |
| The taxpayer shall claim the credit in the order required by | 62 |
| section 5751.98 of the Revised Code. Any credit amount in excess | 63 |
| of the tax due under section 5751.03 of the Revised Code, after | 64 |
| allowing for any other credits that precede the credit under this | 65 |
| section in the order required under that section, may not be | 66 |
| carried forward. | 67 |
| Sec. 5751.98. (A) To provide a uniform procedure for | 68 |
| calculating the amount of tax due under this chapter, a taxpayer | 69 |
| shall claim any credits to which it is entitled in the following | 70 |
| order: | 71 |
| (1) The nonrefundable jobs retention credit under division | 72 |
| (B) of section 5751.50 of the Revised Code; | 73 |
| (2) The nonrefundable credit for qualified research expenses | 74 |
| under division (B) of section 5751.51 of the Revised Code; | 75 |
| (3) The nonrefundable credit for a borrower's qualified | 76 |
| research and development loan payments under division (B) of | 77 |
| section 5751.52 of the Revised Code; | 78 |
| (4) The nonrefundable credit for calendar years 2010 to 2029 | 79 |
| for unused net operating losses under division (B) of section | 80 |
| 5751.53 of the Revised Code; | 81 |
| (5) The nonrefundable credit for horizontal well employers | 82 |
| that hire residents of this state; | 83 |
| (6) The refundable credit for calendar year 2030 for unused | 84 |
| net operating losses under division (C) of section 5751.53 of the | 85 |
| Revised Code; | 86 |
| | 87 |
| credit under division (A) of section 5751.50 of the Revised Code. | 88 |
| (B) For any credit except the refundable credits enumerated | 89 |
| in this section, the amount of the credit for a tax period shall | 90 |
| not exceed the tax due after allowing for any other credit that | 91 |
| precedes it in the order required under this section. Any excess | 92 |
| amount of a particular credit may be carried forward if authorized | 93 |
| under the section creating the credit. | 94 |
| Section 2. That existing section 5751.98 of the Revised Code | 95 |
| is hereby repealed. | 96 |