As Introduced

129th General Assembly Regular Session 2011-2012

S. B. No. 322

Senator Gentile 

Cosponsors: Senators Kearney, Tavares, Schiavoni 

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A BILL

To amend sections 122.17, 122.171, and 5747.07 and to

1

enact section 5747.073 of the Revised Code to

2

authorize an income tax withholding credit for a

3

manufacturer that expands production or that

4

restarts production at an idle facility.

5

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

Section 1.  That sections 122.17, 122.171, and 5747.07 be	6
amended and section 5747.073 of the Revised Code be enacted to	7
read as follows:	8

Sec. 122.17.  (A) As used in this section:

9

(1) "Income tax revenue" means the total amount withheld	10
under section 5747.06 of the Revised Code by the taxpayer during	11
the taxable year, or during the calendar year that includes the	12
tax period, from the compensation of each employee employed in the	13
project to the extent the employee's withholdings are not used to	14
determine the credit under section 122.171 or 5747.073 of the	15
Revised Code. "Income tax revenue" excludes amounts withheld	16
before the day the taxpayer becomes eligible for the credit.	17

(2) "Baseline income tax revenue" means income tax revenue	18
except that the applicable withholding period is the twelve months	19
immediately preceding the date the tax credit authority approves	20
the taxpayer's application multiplied by the sum of one plus an	21
annual pay increase factor to be determined by the tax credit	22
authority. If the taxpayer becomes eligible for the credit after	23
the first day of the taxpayer's taxable year or after the first	24
day of the calendar year that includes the tax period, the	25
taxpayer's baseline income tax revenue for the first such taxable	26
or calendar year of credit eligibility shall be reduced in	27
proportion to the number of days during the taxable or calendar	28
year for which the taxpayer was not eligible for the credit. For	29
subsequent taxable or calendar years, "baseline income tax	30
revenue" equals the unreduced baseline income tax revenue for the	31
preceding taxable or calendar year multiplied by the sum of one	32
plus the pay increase factor.	33

(3) "Excess income tax revenue" means income tax revenue	34
minus baseline income tax revenue.	35

(B) The tax credit authority may make grants under this	36
section to foster job creation in this state. Such a grant shall	37
take the form of a refundable credit allowed against the tax	38
imposed by section 5725.18, 5729.03, 5733.06, or 5747.02 or levied	39
under Chapter 5751. of the Revised Code. The credit shall be	40
claimed for the taxable years or tax periods specified in the	41
taxpayer's agreement with the tax credit authority under division	42
(D) of this section. With respect to taxes imposed under section	43
5733.06 or 5747.02 or Chapter 5751. of the Revised Code, the	44
credit shall be claimed in the order required under section	45
5733.98, 5747.98, or 5751.98 of the Revised Code. The amount of	46
the credit available for a taxable year or for a calendar year	47
that includes a tax period equals the excess income tax revenue	48
for that year multiplied by the percentage specified in the	49
agreement with the tax credit authority. Any credit granted under	50
this section against the tax imposed by section 5733.06 or 5747.02	51
of the Revised Code, to the extent not fully utilized against such	52
tax for taxable years ending prior to 2008, shall automatically be	53
converted without any action taken by the tax credit authority to	54
a credit against the tax levied under Chapter 5751. of the Revised	55
Code for tax periods beginning on or after July 1, 2008, provided	56
that the person to whom the credit was granted is subject to such	57
tax. The converted credit shall apply to those calendar years in	58
which the remaining taxable years specified in the agreement end.	59

(C) A taxpayer or potential taxpayer who proposes a project	60
to create new jobs in this state may apply to the tax credit	61
authority to enter into an agreement for a tax credit under this	62
section. The director of development shall prescribe the form of	63
the application. After receipt of an application, the authority	64
may enter into an agreement with the taxpayer for a credit under	65
this section if it determines all of the following:	66

(1) The taxpayer's project will increase payroll and income	67
tax revenue;	68

(2) The taxpayer's project is economically sound and will	69
benefit the people of this state by increasing opportunities for	70
employment and strengthening the economy of this state;	71

(3) Receiving the tax credit is a major factor in the	72
taxpayer's decision to go forward with the project.	73

(D) An agreement under this section shall include all of the	74
following:	75

(1) A detailed description of the project that is the subject	76
of the agreement;	77

(2) The term of the tax credit, which shall not exceed	78
fifteen years, and the first taxable year, or first calendar year	79
that includes a tax period, for which the credit may be claimed;	80

(3) A requirement that the taxpayer shall maintain operations	81
at the project location for at least the greater of seven years or	82
the term of the credit plus three years;	83

(4) The percentage, as determined by the tax credit	84
authority, of excess income tax revenue that will be allowed as	85
the amount of the credit for each taxable year or for each	86
calendar year that includes a tax period;	87

(5) The pay increase factor to be applied to the taxpayer's	88
baseline income tax revenue;	89

(6) A requirement that the taxpayer annually shall report to	90
the director of development employment, tax withholding,	91
investment, and other information the director needs to perform	92
the director's duties under this section;	93

(7) A requirement that the director of development annually	94
review the information reported under division (D)(6) of this	95
section and verify compliance with the agreement; if the taxpayer	96
is in compliance, a requirement that the director issue a	97
certificate to the taxpayer stating that the information has been	98
verified and identifying the amount of the credit that may be	99
claimed for the taxable or calendar year;	100

(8) A provision providing that the taxpayer may not relocate	101
a substantial number of employment positions from elsewhere in	102
this state to the project location unless the director of	103
development determines that the legislative authority of the	104
county, township, or municipal corporation from which the	105
employment positions would be relocated has been notified by the	106
taxpayer of the relocation.	107

For purposes of this section, the movement of an employment	108
position from one political subdivision to another political	109
subdivision shall be considered a relocation of an employment	110
position unless the employment position in the first political	111
subdivision is replaced.	112

(E) If a taxpayer fails to meet or comply with any condition	113
or requirement set forth in a tax credit agreement, the tax credit	114
authority may amend the agreement to reduce the percentage or term	115
of the tax credit. The reduction of the percentage or term may	116
take effect in the current taxable or calendar year.	117

(F) Projects that consist solely of point-of-final-purchase	118
retail facilities are not eligible for a tax credit under this	119
section. If a project consists of both point-of-final-purchase	120
retail facilities and nonretail facilities, only the portion of	121
the project consisting of the nonretail facilities is eligible for	122
a tax credit and only the excess income tax revenue from the	123
nonretail facilities shall be considered when computing the amount	124
of the tax credit. If a warehouse facility is part of a	125
point-of-final-purchase retail facility and supplies only that	126
facility, the warehouse facility is not eligible for a tax credit.	127
Catalog distribution centers are not considered	128
point-of-final-purchase retail facilities for the purposes of this	129
division, and are eligible for tax credits under this section.	130

(G) Financial statements and other information submitted to	131
the department of development or the tax credit authority by an	132
applicant or recipient of a tax credit under this section, and any	133
information taken for any purpose from such statements or	134
information, are not public records subject to section 149.43 of	135
the Revised Code. However, the chairperson of the authority may	136
make use of the statements and other information for purposes of	137
issuing public reports or in connection with court proceedings	138
concerning tax credit agreements under this section. Upon the	139
request of the tax commissioner or, if the applicant or recipient	140
is an insurance company, upon the request of the superintendent of	141
insurance, the chairperson of the authority shall provide to the	142
commissioner or superintendent any statement or information	143
submitted by an applicant or recipient of a tax credit in	144
connection with the credit. The commissioner or superintendent	145
shall preserve the confidentiality of the statement or	146
information.	147

(H) A taxpayer claiming a credit under this section shall	148
submit to the tax commissioner or, if the taxpayer is an insurance	149
company, to the superintendent of insurance, a copy of the	150
director of development's certificate of verification under	151
division (D)(7) of this section with the taxpayer's tax report or	152
return for the taxable year or for the calendar year that includes	153
the tax period. Failure to submit a copy of the certificate with	154
the report or return does not invalidate a claim for a credit if	155
the taxpayer submits a copy of the certificate to the commissioner	156
or superintendent within sixty days after the commissioner or	157
superintendent requests it.	158

(I) The director of development, after consultation with the	159
tax commissioner and the superintendent of insurance and in	160
accordance with Chapter 119. of the Revised Code, shall adopt	161
rules necessary to implement this section. The rules may provide	162
for recipients of tax credits under this section to be charged	163
fees to cover administrative costs of the tax credit program. The	164
fees collected shall be credited to the tax incentive programs	165
operating fund created in section 122.174 of the Revised Code. At	166
the time the director gives public notice under division (A) of	167
section 119.03 of the Revised Code of the adoption of the rules,	168
the director shall submit copies of the proposed rules to the	169
chairpersons of the standing committees on economic development in	170
the senate and the house of representatives.	171

(J) For the purposes of this section, a taxpayer may include	172
a partnership, a corporation that has made an election under	173
subchapter S of chapter one of subtitle A of the Internal Revenue	174
Code, or any other business entity through which income flows as a	175
distributive share to its owners. A partnership, S-corporation, or	176
other such business entity may elect to pass the credit received	177
under this section through to the persons to whom the income or	178
profit of the partnership, S-corporation, or other entity is	179
distributed. The election shall be made on the annual report	180
required under division (D)(6) of this section. The election	181
applies to and is irrevocable for the credit for which the report	182
is submitted. If the election is made, the credit shall be	183
apportioned among those persons in the same proportions as those	184
in which the income or profit is distributed.	185

(K) If the director of development determines that a taxpayer	186
who has received a credit under this section is not complying with	187
the requirement under division (D)(3) of this section, the	188
director shall notify the tax credit authority of the	189
noncompliance. After receiving such a notice, and after giving the	190
taxpayer an opportunity to explain the noncompliance, the tax	191
credit authority may require the taxpayer to refund to this state	192
a portion of the credit in accordance with the following:	193

(1) If the taxpayer maintained operations at the project	194
location for a period less than or equal to the term of the	195
credit, an amount not exceeding one hundred per cent of the sum of	196
any credits allowed and received under this section;	197

(2) If the taxpayer maintained operations at the project	198
location for a period longer than the term of the credit, but less	199
than the greater of seven years or the term of the credit plus	200
three years, an amount not exceeding seventy-five per cent of the	201
sum of any credits allowed and received under this section.	202

In determining the portion of the tax credit to be refunded	203
to this state, the tax credit authority shall consider the effect	204
of market conditions on the taxpayer's project and whether the	205
taxpayer continues to maintain other operations in this state.	206
After making the determination, the authority shall certify the	207
amount to be refunded to the tax commissioner or superintendent of	208
insurance, as appropriate. If the amount is certified to the	209
commissioner, the commissioner shall make an assessment for that	210
amount against the taxpayer under Chapter 5733., 5747., or 5751.	211
of the Revised Code. If the amount is certified to the	212
superintendent, the superintendent shall make an assessment for	213
that amount against the taxpayer under Chapter 5725. or 5729. of	214
the Revised Code. The time limitations on assessments under those	215
chapters do not apply to an assessment under this division, but	216
the commissioner or superintendent, as appropriate, shall make the	217
assessment within one year after the date the authority certifies	218
to the commissioner or superintendent the amount to be refunded.	219

(L) On or before the first day of August each year, the	220
director of development shall submit a report to the governor, the	221
president of the senate, and the speaker of the house of	222
representatives on the tax credit program under this section. The	223
report shall include information on the number of agreements that	224
were entered into under this section during the preceding calendar	225
year, a description of the project that is the subject of each	226
such agreement, and an update on the status of projects under	227
agreements entered into before the preceding calendar year.	228

(M) There is hereby created the tax credit authority, which	229
consists of the director of development and four other members	230
appointed as follows: the governor, the president of the senate,	231
and the speaker of the house of representatives each shall appoint	232
one member who shall be a specialist in economic development; the	233
governor also shall appoint a member who is a specialist in	234
taxation. Of the initial appointees, the members appointed by the	235
governor shall serve a term of two years; the members appointed by	236
the president of the senate and the speaker of the house of	237
representatives shall serve a term of four years. Thereafter,	238
terms of office shall be for four years. Initial appointments to	239
the authority shall be made within thirty days after January 13,	240
1993. Each member shall serve on the authority until the end of	241
the term for which the member was appointed. Vacancies shall be	242
filled in the same manner provided for original appointments. Any	243
member appointed to fill a vacancy occurring prior to the	244
expiration of the term for which the member's predecessor was	245
appointed shall hold office for the remainder of that term.	246
Members may be reappointed to the authority. Members of the	247
authority shall receive their necessary and actual expenses while	248
engaged in the business of the authority. The director of	249
development shall serve as chairperson of the authority, and the	250
members annually shall elect a vice-chairperson from among	251
themselves. Three members of the authority constitute a quorum to	252
transact and vote on the business of the authority. The majority	253
vote of the membership of the authority is necessary to approve	254
any such business, including the election of the vice-chairperson.	255

The director of development may appoint a professional	256
employee of the department of development to serve as the	257
director's substitute at a meeting of the authority. The director	258
shall make the appointment in writing. In the absence of the	259
director from a meeting of the authority, the appointed substitute	260
shall serve as chairperson. In the absence of both the director	261
and the director's substitute from a meeting, the vice-chairperson	262
shall serve as chairperson.	263

(N) For purposes of the credits granted by this section	264
against the taxes imposed under sections 5725.18 and 5729.03 of	265
the Revised Code, "taxable year" means the period covered by the	266
taxpayer's annual statement to the superintendent of insurance.	267

Sec. 122.171. (A) As used in this section:

268

(1) "Capital investment project" means a plan of investment	269
at a project site for the acquisition, construction, renovation,	270
or repair of buildings, machinery, or equipment, or for	271
capitalized costs of basic research and new product development	272
determined in accordance with generally accepted accounting	273
principles, but does not include any of the following:	274

(a) Payments made for the acquisition of personal property	275
through operating leases;	276

(b) Project costs paid before January 1, 2002;

277

(c) Payments made to a related member as defined in section	278
5733.042 of the Revised Code or to a consolidated elected taxpayer	279
or a combined taxpayer as defined in section 5751.01 of the	280
Revised Code.	281

(2) "Eligible business" means a taxpayer and its related	282
members with Ohio operations satisfying all of the following:	283

(a) The taxpayer employs at least five hundred full-time	284
equivalent employees or has an annual payroll of at least	285
thirty-five million dollars at the time the tax credit authority	286
grants the tax credit under this section;	287

(b) The taxpayer makes or causes to be made payments for the	288
capital investment project of one of the following:	289

(i) If the taxpayer is engaged at the project site primarily	290
as a manufacturer, at least fifty million dollars in the aggregate	291
at the project site during a period of three consecutive calendar	292
years, including the calendar year that includes a day of the	293
taxpayer's taxable year or tax period with respect to which the	294
credit is granted;	295

(ii) If the taxpayer is engaged at the project site primarily	296
in significant corporate administrative functions, as defined by	297
the director of development by rule, at least twenty million	298
dollars in the aggregate at the project site during a period of	299
three consecutive calendar years including the calendar year that	300
includes a day of the taxpayer's taxable year or tax period with	301
respect to which the credit is granted;	302

(iii) If the taxpayer is applying to enter into an agreement	303
for a tax credit authorized under division (B)(3) of this section,	304
at least five million dollars in the aggregate at the project site	305
during a period of three consecutive calendar years, including the	306
calendar year that includes a day of the taxpayer's taxable year	307
or tax period with respect to which the credit is granted.	308

(c) The taxpayer had a capital investment project reviewed	309
and approved by the tax credit authority as provided in divisions	310
(C), (D), and (E) of this section.	311

(3) "Full-time equivalent employees" means the quotient	312
obtained by dividing the total number of hours for which employees	313
were compensated for employment in the project by two thousand	314
eighty. "Full-time equivalent employees" shall exclude hours that	315
are counted for a credit under section 122.17 of the Revised Code.	316

(4) "Income tax revenue" means the total amount withheld	317
under section 5747.06 of the Revised Code by the taxpayer during	318
the taxable year, or during the calendar year that includes the	319
tax period, from the compensation of all employees employed in the	320
project whose hours of compensation are included in calculating	321
the number of full-time equivalent employees but excluding any	322
withholding claimed as a credit under section 5747.073 of the	323
Revised Code.	324

(5) "Manufacturer" has the same meaning as in section	325
5739.011 of the Revised Code.	326

(6) "Project site" means an integrated complex of facilities	327
in this state, as specified by the tax credit authority under this	328
section, within a fifteen-mile radius where a taxpayer is	329
primarily operating as an eligible business.	330

(7) "Related member" has the same meaning as in section	331
5733.042 of the Revised Code as that section existed on the	332
effective date of its amendment by Am. Sub. H.B. 215 of the 122nd	333
general assembly, September 29, 1997.	334

(8) "Taxable year" includes, in the case of a domestic or	335
foreign insurance company, the calendar year ending on the	336
thirty-first day of December preceding the day the superintendent	337
of insurance is required to certify to the treasurer of state	338
under section 5725.20 or 5729.05 of the Revised Code the amount of	339
taxes due from insurance companies.	340

(B) The tax credit authority created under section 122.17 of	341
the Revised Code may grant tax credits under this section for the	342
purpose of fostering job retention in this state. Upon application	343
by an eligible business and upon consideration of the	344
recommendation of the director of budget and management, tax	345
commissioner, the superintendent of insurance in the case of an	346
insurance company, and director of development under division (C)	347
of this section, the tax credit authority may grant the following	348
credits against the tax imposed by section 5725.18, 5729.03,	349
5733.06, 5747.02, or 5751.02 of the Revised Code:	350

(1) A nonrefundable credit to an eligible business;

351

(2) A refundable credit to an eligible business meeting the	352
following conditions, provided that the director of budget and	353
management, tax commissioner, superintendent of insurance in the	354
case of an insurance company, and director of development have	355
recommended the granting of the credit to the tax credit authority	356
before July 1, 2011:	357

(a) The business retains at least one thousand full-time	358
equivalent employees at the project site.	359

(b) The business makes or causes to be made payments for a	360
capital investment project of at least twenty-five million dollars	361
in the aggregate at the project site during a period of three	362
consecutive calendar years, including the calendar year that	363
includes a day of the business' taxable year or tax period with	364
respect to which the credit is granted.	365

(c) In 2010, the business received a written offer of	366
financial incentives from another state of the United States that	367
the director determines to be sufficient inducement for the	368
business to relocate the business' operations from this state to	369
that state.	370

(3) A refundable credit to an eligible business with a total	371
annual payroll of at least twenty million dollars, provided that	372
the tax credit authority grants the tax credit on or after July 1,	373
2011, and before January 1, 2014.	374

The credits authorized in divisions (B)(1), (2), and (3) of	375
this section may be granted for a period up to fifteen taxable	376
years or, in the case of the tax levied by section 5751.02 of the	377
Revised Code, for a period of up to fifteen calendar years. The	378
credit amount for a taxable year or a calendar year that includes	379
the tax period for which a credit may be claimed equals the income	380
tax revenue for that year multiplied by the percentage specified	381
in the agreement with the tax credit authority. The percentage may	382
not exceed seventy-five per cent. The credit shall be claimed in	383
the order required under section 5725.98, 5729.98, 5733.98,	384
5747.98, or 5751.98 of the Revised Code. In determining the	385
percentage and term of the credit, the tax credit authority shall	386
consider both the number of full-time equivalent employees and the	387
value of the capital investment project. The credit amount may not	388
be based on the income tax revenue for a calendar year before the	389
calendar year in which the tax credit authority specifies the tax	390
credit is to begin, and the credit shall be claimed only for the	391
taxable years or tax periods specified in the eligible business'	392
agreement with the tax credit authority. In no event shall the	393
credit be claimed for a taxable year or tax period terminating	394
before the date specified in the agreement. Any credit granted	395
under this section against the tax imposed by section 5733.06 or	396
5747.02 of the Revised Code, to the extent not fully utilized	397
against such tax for taxable years ending prior to 2008, shall	398
automatically be converted without any action taken by the tax	399
credit authority to a credit against the tax levied under Chapter	400
5751. of the Revised Code for tax periods beginning on or after	401
July 1, 2008, provided that the person to whom the credit was	402
granted is subject to such tax. The converted credit shall apply	403
to those calendar years in which the remaining taxable years	404
specified in the agreement end.	405

If a nonrefundable credit allowed under division (B)(1) of	406
this section for a taxable year or tax period exceeds the	407
taxpayer's tax liability for that year or period, the excess may	408
be carried forward for the three succeeding taxable or calendar	409
years, but the amount of any excess credit allowed in any taxable	410
year or tax period shall be deducted from the balance carried	411
forward to the succeeding year or period.	412

(C) A taxpayer that proposes a capital investment project to	413
retain jobs in this state may apply to the tax credit authority to	414
enter into an agreement for a tax credit under this section. The	415
director of development shall prescribe the form of the	416
application. After receipt of an application, the authority shall	417
forward copies of the application to the director of budget and	418
management, the tax commissioner, the superintendent of insurance	419
in the case of an insurance company, and the director of	420
development, each of whom shall review the application to	421
determine the economic impact the proposed project would have on	422
the state and the affected political subdivisions and shall submit	423
a summary of their determinations and recommendations to the	424
authority.	425

(D) Upon review and consideration of the determinations and	426
recommendations described in division (C) of this section, the tax	427
credit authority may enter into an agreement with the taxpayer for	428
a credit under this section if the authority determines all of the	429
following:	430

(1) The taxpayer's capital investment project will result in	431
the retention of employment in this state.	432

(2) The taxpayer is economically sound and has the ability to	433
complete the proposed capital investment project.	434

(3) The taxpayer intends to and has the ability to maintain	435
operations at the project site for at least the greater of (a) the	436
term of the credit plus three years, or (b) seven years.	437

(4) Receiving the credit is a major factor in the taxpayer's	438
decision to begin, continue with, or complete the project.	439

(5) If the taxpayer is applying to enter into an agreement	440
for a tax credit authorized under division (B)(3) of this section,	441
the taxpayer's capital investment project will be located in the	442
political subdivision in which the taxpayer maintains its	443
principal place of business.	444

(E) An agreement under this section shall include all of the	445
following:	446

(1) A detailed description of the project that is the subject	447
of the agreement, including the amount of the investment, the	448
period over which the investment has been or is being made, the	449
number of full-time equivalent employees at the project site, and	450
the anticipated income tax revenue to be generated.	451

(2) The term of the credit, the percentage of the tax credit,	452
the maximum annual value of tax credits that may be allowed each	453
year, and the first year for which the credit may be claimed.	454

(3) A requirement that the taxpayer maintain operations at	455
the project site for at least the greater of (a) the term of the	456
credit plus three years, or (b) seven years.	457

(4)(a) In the case of a credit granted under division (B)(1)	458
of this section, a requirement that the taxpayer retain at least	459
five hundred full-time equivalent employees at the project site	460
and within this state for the entire term of the credit, or a	461
requirement that the taxpayer maintain an annual payroll of at	462
least thirty-five million dollars for the entire term of the	463
credit;	464

(b) In the case of a credit granted under division (B)(2) of	465
this section, a requirement that the taxpayer retain at least one	466
thousand full-time equivalent employees at the project site and	467
within this state for the entire term of the credit;	468

(c) In the case of a credit granted under division (B)(3) of	469
this section, either of the following:	470

(i) A requirement that the taxpayer retain at least five	471
hundred full-time equivalent employees at the project site and	472
within this state for the entire term of the credit and a	473
requirement that the taxpayer maintain an annual payroll of at	474
least twenty million dollars for the entire term of the credit;	475

(ii) A requirement that the taxpayer maintain an annual	476
payroll of at least thirty-five million dollars for the entire	477
term of the credit.	478

(5) A requirement that the taxpayer annually report to the	479
director of development employment, tax withholding, capital	480
investment, and other information the director needs to perform	481
the director's duties under this section.	482

(6) A requirement that the director of development annually	483
review the annual reports of the taxpayer to verify the	484
information reported under division (E)(5) of this section and	485
compliance with the agreement. Upon verification, the director	486
shall issue a certificate to the taxpayer stating that the	487
information has been verified and identifying the amount of the	488
credit for the taxable year or calendar year that includes the tax	489
period. In determining the number of full-time equivalent	490
employees, no position shall be counted that is filled by an	491
employee who is included in the calculation of a tax credit under	492
section 122.17 of the Revised Code.	493

(7) A provision providing that the taxpayer may not relocate	494
a substantial number of employment positions from elsewhere in	495
this state to the project site unless the director of development	496
determines that the taxpayer notified the legislative authority of	497
the county, township, or municipal corporation from which the	498
employment positions would be relocated.	499

For purposes of this section, the movement of an employment	500
position from one political subdivision to another political	501
subdivision shall be considered a relocation of an employment	502
position unless the movement is confined to the project site. The	503
transfer of an employment position from one political subdivision	504
to another political subdivision shall not be considered a	505
relocation of an employment position if the employment position in	506
the first political subdivision is replaced by another employment	507
position.	508

(8) A waiver by the taxpayer of any limitations periods	509
relating to assessments or adjustments resulting from the	510
taxpayer's failure to comply with the agreement.	511

(F) If a taxpayer fails to meet or comply with any condition	512
or requirement set forth in a tax credit agreement, the tax credit	513
authority may amend the agreement to reduce the percentage or term	514
of the credit. The reduction of the percentage or term may take	515
effect in the current taxable or calendar year.	516

(G) Financial statements and other information submitted to	517
the department of development or the tax credit authority by an	518
applicant for or recipient of a tax credit under this section, and	519
any information taken for any purpose from such statements or	520
information, are not public records subject to section 149.43 of	521
the Revised Code. However, the chairperson of the authority may	522
make use of the statements and other information for purposes of	523
issuing public reports or in connection with court proceedings	524
concerning tax credit agreements under this section. Upon the	525
request of the tax commissioner, or the superintendent of	526
insurance in the case of an insurance company, the chairperson of	527
the authority shall provide to the commissioner or superintendent	528
any statement or other information submitted by an applicant for	529
or recipient of a tax credit in connection with the credit. The	530
commissioner or superintendent shall preserve the confidentiality	531
of the statement or other information.	532

(H) A taxpayer claiming a tax credit under this section shall	533
submit to the tax commissioner or, in the case of an insurance	534
company, to the superintendent of insurance, a copy of the	535
director of development's certificate of verification under	536
division (E)(6) of this section with the taxpayer's tax report or	537
return for the taxable year or for the calendar year that includes	538
the tax period. Failure to submit a copy of the certificate with	539
the report or return does not invalidate a claim for a credit if	540
the taxpayer submits a copy of the certificate to the commissioner	541
or superintendent within sixty days after the commissioner or	542
superintendent requests it.	543

(I) For the purposes of this section, a taxpayer may include	544
a partnership, a corporation that has made an election under	545
subchapter S of chapter one of subtitle A of the Internal Revenue	546
Code, or any other business entity through which income flows as a	547
distributive share to its owners. A partnership, S-corporation, or	548
other such business entity may elect to pass the credit received	549
under this section through to the persons to whom the income or	550
profit of the partnership, S-corporation, or other entity is	551
distributed. The election shall be made on the annual report	552
required under division (E)(5) of this section. The election	553
applies to and is irrevocable for the credit for which the report	554
is submitted. If the election is made, the credit shall be	555
apportioned among those persons in the same proportions as those	556
in which the income or profit is distributed.	557

(J) If the director of development determines that a taxpayer	558
that received a tax credit under this section is not complying	559
with the requirement under division (E)(3) of this section, the	560
director shall notify the tax credit authority of the	561
noncompliance. After receiving such a notice, and after giving the	562
taxpayer an opportunity to explain the noncompliance, the	563
authority may terminate the agreement and require the taxpayer to	564
refund to the state all or a portion of the credit claimed in	565
previous years, as follows:	566

(1) If the taxpayer maintained operations at the project site	567
for less than or equal to the term of the credit, an amount not to	568
exceed one hundred per cent of the sum of any tax credits allowed	569
and received under this section.	570

(2) If the taxpayer maintained operations at the project site	571
longer than the term of the credit, but less than the greater of	572
(a) the term of the credit plus three years, or (b) seven years,	573
the amount required to be refunded shall not exceed seventy-five	574
per cent of the sum of any tax credits allowed and received under	575
this section.	576

In determining the portion of the credit to be refunded to	577
this state, the authority shall consider the effect of market	578
conditions on the taxpayer's project and whether the taxpayer	579
continues to maintain other operations in this state. After making	580
the determination, the authority shall certify the amount to be	581
refunded to the tax commissioner or the superintendent of	582
insurance. If the taxpayer is not an insurance company, the	583
commissioner shall make an assessment for that amount against the	584
taxpayer under Chapter 5733., 5747., or 5751. of the Revised Code.	585
If the taxpayer is an insurance company, the superintendent of	586
insurance shall make an assessment under section 5725.222 or	587
5729.102 of the Revised Code. The time limitations on assessments	588
under those chapters and sections do not apply to an assessment	589
under this division, but the commissioner or superintendent shall	590
make the assessment within one year after the date the authority	591
certifies to the commissioner or superintendent the amount to be	592
refunded.	593

(K) The director of development, after consultation with the	594
tax commissioner and the superintendent of insurance and in	595
accordance with Chapter 119. of the Revised Code, shall adopt	596
rules necessary to implement this section. The rules may provide	597
for recipients of tax credits under this section to be charged	598
fees to cover administrative costs of the tax credit program. The	599
fees collected shall be credited to the tax incentive programs	600
operating fund created in section 122.174 of the Revised Code. At	601
the time the director gives public notice under division (A) of	602
section 119.03 of the Revised Code of the adoption of the rules,	603
the director shall submit copies of the proposed rules to the	604
chairpersons of the standing committees on economic development in	605
the senate and the house of representatives.	606

(L) On or before the first day of August of each year, the	607
director of development shall submit a report to the governor, the	608
president of the senate, and the speaker of the house of	609
representatives on the tax credit program under this section. The	610
report shall include information on the number of agreements that	611
were entered into under this section during the preceding calendar	612
year, a description of the project that is the subject of each	613
such agreement, and an update on the status of projects under	614
agreements entered into before the preceding calendar year.	615

(M)(1) The aggregate amount of tax credits issued under	616
division (B)(1) of this section during any calendar year for	617
capital investment projects reviewed and approved by the tax	618
credit authority may not exceed the following amounts:	619

(a) For 2010, thirteen million dollars;

620

(b) For 2011 through 2023, the amount of the limit for the	621
preceding calendar year plus thirteen million dollars;	622

(c) For 2024 and each year thereafter, one hundred	623
ninety-five million dollars.	624

(2) The aggregate amount of tax credits authorized under	625
divisions (B)(2) and (3) of this section and allowed to be claimed	626
by taxpayers in any calendar year for capital improvement projects	627
reviewed and approved by the tax credit authority in 2011, 2012,	628
and 2013 combined shall not exceed twenty-five million dollars. An	629
amount equal to the aggregate amount of credits first authorized	630
in calendar year 2011, 2012, and 2013 may be claimed over the	631
ensuing period up to fifteen years, subject to the terms of	632
individual tax credit agreements.	633

The limitations in division (M) of this section do not apply	634
to credits for capital investment projects approved by the tax	635
credit authority before July 1, 2009.	636

Sec. 5747.07.  (A) As used in this section:

637

(1) "Partial weekly withholding period" means a period during	638
which an employer directly, indirectly, or constructively pays	639
compensation to, or credits compensation to the benefit of, an	640
employee, and that consists of a consecutive Saturday, Sunday,	641
Monday, and Tuesday or a consecutive Wednesday, Thursday, and	642
Friday. There are two partial weekly withholding periods each	643
week, except that a partial weekly withholding period cannot	644
extend from one calendar year into the next calendar year; if the	645
first day of January falls on a day other than Saturday or	646
Wednesday, the partial weekly withholding period ends on the	647
thirty-first day of December and there are three partial weekly	648
withholding periods during that week.	649

(2) "Undeposited taxes" means the taxes an employer is	650
required to deduct and withhold from an employee's compensation	651
pursuant to section 5747.06 of the Revised Code that have not been	652
remitted to the tax commissioner pursuant to this section or to	653
the treasurer of state pursuant to section 5747.072 of the Revised	654
Code.	655

(3) A "week" begins on Saturday and concludes at the end of	656
the following Friday.	657

(B) Except as provided in divisions (C) and (D) of this	658
section and in, division (A) of section 5747.072 of the Revised	659
Code, and section 5747.073 of the Revised Code, every employer	660
required to deduct and withhold any amount under section 5747.06	661
of the Revised Code shall file a return and shall pay the amount	662
required by law as follows:	663

(1) An employer who accumulates or is required to accumulate	664
undeposited taxes of one hundred thousand dollars or more during a	665
partial weekly withholding period shall make the payment of the	666
undeposited taxes by the close of the first banking day after the	667
day on which the accumulation reaches one hundred thousand	668
dollars. If required under division (I) of this section, the	669
payment shall be made by electronic funds transfer under section	670
5747.072 of the Revised Code.	671

(2)(a) Except as required by division (B)(1) of this section,	672
an employer described in division (B)(2)(b) of this section shall	673
make the payment of undeposited taxes within three banking days	674
after the close of a partial weekly withholding period during	675
which the employer was required to deduct and withhold any amount	676
under this chapter. If required under division (I) of this	677
section, the payment shall be made by electronic funds transfer	678
under section 5747.072 of the Revised Code.	679

(b) For amounts required to be deducted and withheld during	680
1994, an employer described in division (B)(2)(b) of this section	681
is one whose actual or required payments under this section	682
exceeded one hundred eighty thousand dollars during the	683
twelve-month period ending June 30, 1993. For amounts required to	684
be deducted and withheld during 1995 and each year thereafter, an	685
employer described in division (B)(2)(b) of this section is one	686
whose actual or required payments under this section were at least	687
eighty-four thousand dollars during the twelve-month period ending	688
on the thirtieth day of June of the preceding calendar year.	689

(3) Except as required by divisions (B)(1) and (2) of this	690
section, if an employer's actual or required payments were more	691
than two thousand dollars during the twelve-month period ending on	692
the thirtieth day of June of the preceding calendar year, the	693
employer shall make the payment of undeposited taxes for each	694
month during which they were required to be withheld no later than	695
fifteen days following the last day of that month. The employer	696
shall file the return prescribed by the tax commissioner with the	697
payment.	698

(4) Except as required by divisions (B)(1), (2), and (3) of	699
this section, an employer shall make the payment of undeposited	700
taxes for each calendar quarter during which they were required to	701
be withheld no later than the last day of the month following the	702
last day of March, June, September, and December each year. The	703
employer shall file the return prescribed by the tax commissioner	704
with the payment.	705

(C) The return and payment schedules prescribed by divisions	706
(B)(1) and (2) of this section do not apply to the return and	707
payment of undeposited school district income taxes arising from	708
taxes levied pursuant to Chapter 5748. of the Revised Code.	709
Undeposited school district income taxes shall be returned and	710
paid pursuant to divisions (B)(3) and (4) of this section, as	711
applicable.	712

(D)(1) The requirements of division (B) of this section are	713
met if the amount paid is not less than ninety-five per cent of	714
the actual tax withheld or required to be withheld for the prior	715
quarterly, monthly, or partial weekly withholding period, and the	716
underpayment is not due to willful neglect. Any underpayment of	717
withheld tax shall be paid within thirty days of the date on which	718
the withheld tax was due without regard to division (D)(1) of this	719
section. An employer described in division (B)(1) or (2) of this	720
section shall make the payment by electronic funds transfer under	721
section 5747.072 of the Revised Code.	722

(2) If the tax commissioner believes that quarterly or	723
monthly payments would result in a delay that might jeopardize the	724
remittance of withholding payments, the commissioner may order	725
that the payments be made weekly, or more frequently if necessary,	726
and the payments shall be made no later than three banking days	727
following the close of the period for which the jeopardy order is	728
made. An order requiring weekly or more frequent payments shall be	729
delivered to the employer personally or by certified mail and	730
remains in effect until the commissioner notifies the employer to	731
the contrary.	732

(3) If compelling circumstances exist concerning the	733
remittance of undeposited taxes, the commissioner may order the	734
employer to make payments under any of the payment schedules under	735
division (B) of this section. The order shall be delivered to the	736
employer personally or by certified mail and shall remain in	737
effect until the commissioner notifies the employer to the	738
contrary. For purposes of division (D)(3) of this section,	739
"compelling circumstances" exist if either or both of the	740
following are true:	741

(a) Based upon annualization of payments made or required to	742
be made during the preceding calendar year and during the current	743
calendar year, the employer would be required for the next	744
calendar year to make payments under division (B)(2) of this	745
section.	746

(b) Based upon annualization of payments made or required to	747
be made during the current calendar year, the employer would be	748
required for the next calendar year to make payments under	749
division (B)(2) of this section.	750

(E)(1) An employer described in division (B)(1) or (2) of	751
this section shall file, not later than the last day of the month	752
following the end of each calendar quarter, a return covering, but	753
not limited to, both the actual amount deducted and withheld and	754
the amount required to be deducted and withheld for the tax	755
imposed under section 5747.02 of the Revised Code during each	756
partial weekly withholding period or portion of a partial weekly	757
withholding period during that quarter. The employer shall file	758
the quarterly return even if the aggregate amount required to be	759
deducted and withheld for the quarter is zero dollars. At the time	760
of filing the return, the employer shall pay any amounts of	761
undeposited taxes for the quarter, whether actually deducted and	762
withheld or required to be deducted and withheld, that have not	763
been previously paid. If required under division (I) of this	764
section, the payment shall be made by electronic funds transfer.	765
The tax commissioner shall prescribe the form and other	766
requirements of the quarterly return.	767

(2) In addition to other returns required to be filed and	768
payments required to be made under this section, every employer	769
required to deduct and withhold taxes shall file, not later than	770
the thirty-first day of January of each year, an annual return	771
covering, but not limited to, both the aggregate amount deducted	772
and withheld and the aggregate amount required to be deducted and	773
withheld during the entire preceding year for the tax imposed	774
under section 5747.02 of the Revised Code and for each tax imposed	775
under Chapter 5748. of the Revised Code. At the time of filing	776
that return, the employer shall pay over any amounts of	777
undeposited taxes for the preceding year, whether actually	778
deducted and withheld or required to be deducted and withheld,	779
that have not been previously paid. The employer shall make the	780
annual report, to each employee and to the tax commissioner, of	781
the compensation paid and each tax withheld, as the commissioner	782
by rule may prescribe.	783

Each employer required to deduct and withhold any tax is	784
liable for the payment of that amount required to be deducted and	785
withheld, whether or not the tax has in fact been withheld, unless	786
the failure to withhold was based upon the employer's good faith	787
in reliance upon the statement of the employee as to liability,	788
and the amount shall be deemed to be a special fund in trust for	789
the general revenue fund.	790

(F) Each employer shall file with the employer's annual	791
return the following items of information on employees for whom	792
withholding is required under section 5747.06 of the Revised Code:	793

(1) The full name of each employee, the employee's address,	794
the employee's school district of residence, and in the case of a	795
nonresident employee, the employee's principal county of	796
employment;	797

(2) The social security number of each employee;

798

(3) The total amount of compensation paid before any	799
deductions to each employee for the period for which the annual	800
return is made;	801

(4) The amount of the tax imposed by section 5747.02 of the	802
Revised Code and the amount of each tax imposed under Chapter	803
5748. of the Revised Code withheld from the compensation of the	804
employee for the period for which the annual return is made. The	805
commissioner may extend upon good cause the period for filing any	806
notice or return required to be filed under this section and may	807
adopt rules relating to extensions of time. If the extension	808
results in an extension of time for the payment of the amounts	809
withheld with respect to which the return is filed, the employer	810
shall pay, at the time the amount withheld is paid, an amount of	811
interest computed at the rate per annum prescribed by section	812
5703.47 of the Revised Code on that amount withheld, from the day	813
that amount was originally required to be paid to the day of	814
actual payment or to the day an assessment is issued under section	815
5747.13 of the Revised Code, whichever occurs first.	816

(5) In addition to all other interest charges and penalties	817
imposed, all amounts of taxes withheld or required to be withheld	818
and remaining unpaid after the day the amounts are required to be	819
paid shall bear interest from the date prescribed for payment at	820
the rate per annum prescribed by section 5703.47 of the Revised	821
Code on the amount unpaid, in addition to the amount withheld,	822
until paid or until the day an assessment is issued under section	823
5747.13 of the Revised Code, whichever occurs first.	824

(G) An employee of a corporation, limited liability company,	825
or business trust having control or supervision of or charged with	826
the responsibility of filing the report and making payment, or an	827
officer, member, manager, or trustee of a corporation, limited	828
liability company, or business trust who is responsible for the	829
execution of the corporation's, limited liability company's, or	830
business trust's fiscal responsibilities, shall be personally	831
liable for failure to file the report or pay the tax due as	832
required by this section. The dissolution, termination, or	833
bankruptcy of a corporation, limited liability company, or	834
business trust does not discharge a responsible officer's,	835
member's, manager's, employee's, or trustee's liability for a	836
failure of the corporation, limited liability company, or business	837
trust to file returns or pay tax due.	838

(H) If an employer required to deduct and withhold income tax	839
from compensation and to pay that tax to the state under sections	840
5747.06 and 5747.07 of the Revised Code sells the employer's	841
business or stock of merchandise or quits the employer's business,	842
the taxes required to be deducted and withheld and paid to the	843
state pursuant to those sections prior to that time, together with	844
any interest and penalties imposed on those taxes, become due and	845
payable immediately, and that person shall make a final return	846
within fifteen days after the date of selling or quitting	847
business. The employer's successor shall withhold a sufficient	848
amount of the purchase money to cover the amount of the taxes,	849
interest, and penalties due and unpaid, until the former owner	850
produces a receipt from the tax commissioner showing that the	851
taxes, interest, and penalties have been paid or a certificate	852
indicating that no such taxes are due. If the purchaser of the	853
business or stock of merchandise fails to withhold purchase money,	854
the purchaser shall be personally liable for the payment of the	855
taxes, interest, and penalties accrued and unpaid during the	856
operation of the business by the former owner. If the amount of	857
taxes, interest, and penalties outstanding at the time of the	858
purchase exceeds the total purchase money, the tax commissioner in	859
the commissioner's discretion may adjust the liability of the	860
seller or the responsibility of the purchaser to pay that	861
liability to maximize the collection of withholding tax revenue.	862

(I)(1) An employer described in division (I)(2) of this	863
section shall make all payments required by this section for the	864
year by electronic funds transfer under section 5747.072 of the	865
Revised Code.	866

(2)(a) For 1994, an employer described in division (I)(2) of	867
this section is one whose actual or required payments under this	868
section exceeded five hundred thousand dollars during the	869
twelve-month period ending June 30, 1993.	870

(b) For 1995, an employer described in division (I)(2) of	871
this section is one whose actual or required payments under this	872
section exceeded five hundred thousand dollars during the	873
twelve-month period ending June 30, 1994.	874

(c) For 1996, an employer described in division (I)(2) of	875
this section is one whose actual or required payments under this	876
section exceeded three hundred thousand dollars during the	877
twelve-month period ending June 30, 1995.	878

(d) For 1997 through 2000, an employer described in division	879
(I)(2) of this section is one whose actual or required payments	880
under this section exceeded one hundred eighty thousand dollars	881
during the twelve-month period ending on the thirtieth day of June	882
of the preceding calendar year.	883

(e) For 2001 and thereafter, an employer described in	884
division (I)(2) of this section is one whose actual or required	885
payments under this section exceeded eighty-four thousand dollars	886
during the twelve-month period ending on the thirtieth day of June	887
of the preceding calendar year.	888

Sec. 5747.073.  (A) For purposes of this section:

889

(1) "Manufacturer" and "manufacturing facility" have the same	890
meanings as in section 5711.16 of the Revised Code.	891

(2) "Wages" means wages as defined in section 3121(a) of the	892
Internal Revenue Code without regard to any wage limitations.	893

(3) "Credit period" means the six-month period during which a	894
manufacturer may claim the credit authorized by this section.	895

(4) "Clawback period" means the three years immediately	896
following the credit period, beginning on the first day of the	897
first month after the credit period ends.	898

(5) "Base-month wages" means the wages for personal services	899
performed during the month preceding the month in which production	900
restarted or first expanded.	901

(B) A manufacturer required to deduct and withhold income tax	902
from an employee's compensation under section 5747.06 of the	903
Revised Code and remit such amounts under section 5747.07 of the	904
Revised Code is entitled to a credit against the amount required	905
to be remitted if the manufacturer meets both of the following	906
conditions before January 1, 2016:	907

(1) The manufacturer expands production at a manufacturing	908
facility, or restarts production at a manufacturing facility that	909
has been idle for not less than the twelve immediately preceding	910
months;	911

(2) Within six months after the month in which production	912
restarts or first expands, wages for personal services performed	913
at the manufacturing facility during a month exceed the base-month	914
wages by seven hundred fifty thousand dollars or more.	915

A manufacturer meeting the above conditions may apply to the	916
tax commissioner for authorization to claim the credit. If the	917
above conditions are met, the tax commissioner, within thirty days	918
after receiving the application, shall authorize the credit and	919
inform the manufacturer of the credit period. The credit period	920
shall be six consecutive months. The credit equals the amount of	921
undeposited taxes the manufacturer would otherwise be required to	922
remit to the commissioner during the credit period.	923

With respect to each employee, the amount retained by the	924
manufacturer shall be considered to have been remitted for	925
purposes of reporting the state and school district income tax	926
deducted and withheld from the employee's compensation under	927
section 5747.06 of the Revised Code and for purposes of	928
determining the state and school district income tax paid by the	929
employee.	930

(C) If during any one of the three years comprising the	931
clawback period, the average monthly wages paid for personal	932
services performed at the manufacturing facility is less than one	933
million dollars in excess of the base-month wages, the	934
manufacturer is liable to the state for the sum of the amounts in	935
divisions (C)(1) and (2) of this section:	936

(1) The product of the amount in division (C)(1)(a)	937
multiplied by the amount in division (C)(1)(b) of this section:	938

(a) The total amount of the credit claimed for the credit	939
period;	940

(b) One million dollars divided into the difference between	941
one million dollars and the average of the monthly wages paid for	942
personal services performed at the manufacturing facility during	943
the applicable year of the clawback period.	944

(2) Ten per cent of the amount in division (C)(1) of this	945
section, plus interest on that amount calculated at the rate per	946
annum prescribed by section 5703.47 of the Revised Code from the	947
last day of the applicable year of the clawback period.	948

The amount imposed by this division shall be collected	949
utilizing the assessment procedures provided in section 5747.13 of	950
the Revised Code.	951

(D) During the clawback period, the manufacturer shall submit	952
to the tax commissioner and director of development such	953
information and documents as they request. The commissioner in	954
consultation with the director may adopt rules to administer this	955
section.	956

Section 2. That existing sections 122.17, 122.171, and	957
5747.07 of the Revised Code are hereby repealed.	958