To amend sections 319.302, 5711.22, 5727.111, and 5727.12 and to enact sections 5739.029 and 5747.37 of the Revised Code to levy an additional one-half per cent sales and use tax, the proceeds of which must be used for schools and to provide property tax relief; to reduce from 10% to 5% the property tax reduction for nonresidential, nonagricultural real property; to reduce the assessment rate on business inventory for property tax purposes; to authorize taxpayers to claim a refundable income tax credit for a portion of their residential property tax payments; to make an appropriation; and to provide that the act take effect only after being approved by the electors.

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

Sec. 319.302. After complying with section 319.301 of the Revised Code, the county auditor shall reduce the remaining sums to be levied against each parcel of real property listed on the general tax list and duplicate of real and public utility property for the current tax year by ten per cent FOR EACH PARCEL CLASSIFIED UNDER SECTION 5713.041 of the Revised Code AS RESIDENTIAL/AGRICULTURAL REAL PROPERTY, AND BY FIVE PER CENT FOR EACH PARCEL SO CLASSIFIED AS NONRESIDENTIAL/AGRICULTURAL REAL PROPERTY. Except as otherwise provided in sections 323.152, and 323.158, 505.06, and 715.263 of the Revised Code, the amount of the taxes remaining after such reduction shall be the real and public utility property taxes charged and payable on such property and shall be the amounts certified to the county treasurer for collection. Upon receipt of the tax duplicate, the treasurer shall certify to the tax commissioner the total amount by which such taxes were reduced under this section, as shown on the duplicate. Such reduction shall not directly or indirectly affect the determination of the principal amount of notes that may be issued in anticipation of any tax levies or the amount of bonds or notes for any planned improvements. If after application of sections 5705.31 and 5705.32 of the Revised Code and other applicable provisions of law, including division (F) of section 321.24 of the Revised Code, there would be insufficient funds for payment of debt charges on bonds or notes payable from taxes reduced by this section, the reduction of taxes provided for in this section shall be adjusted to the extent necessary to provide funds from such taxes.

Sec. 5711.22. (A) Deposits not taxed at the source shall be listed and assessed at their amount in dollars on the day they are required to be listed. Moneys shall be listed and assessed at the amount thereof in dollars on hand on the day that they are required to be listed. In listing investments, the amount of the income yield of each for the calendar year next preceding the date of listing shall, except as otherwise provided in this chapter, be stated in dollars and cents and the assessment thereof shall be at the amount of such income yield; but any property defined as investments in either division (A) or (B) of section 5701.06 of the Revised Code that has not been outstanding for the full calendar year next preceding the date of listing, except shares of stock of like kind as other shares of the same corporation outstanding for the full calendar year next preceding the date of listing, or which has yielded no income during such calendar year shall be listed and assessed as unproductive investments, at their true value in money on the day that such investments are required to be listed.

Credits and other taxable intangibles shall be listed and assessed at their true value in money on the day as of which the same are required to be listed.

Shares of stock of a bank holding company, as defined in Title 12 U.S.C.A., section 1841, which are required to be listed for taxation under this division and upon which dividends were paid during the year of their issuance, which dividends are subject to taxation under the provisions of Chapter 5747. of the Revised Code, shall be exempt from the intangibles tax for the year immediately succeeding their issuance. If such shares bear dividends the first calendar year after their issuance, which dividends are subject to taxation under the provisions of Chapter 5747. of the Revised Code, it shall be deemed that the nondelinquent intangible property tax pursuant to division (A) of section 5707.04 of the Revised Code was paid on those dividends paid that first calendar year after the issuance of the shares.

(B)(1) Boilers, machinery, equipment, and personal property the true value of which is determined under division (B) of section 5711.21 of the Revised Code shall be listed and assessed at an amount equal to the sum of the products determined under divisions (B)(1)(a), (b), and (c) of this section.

(a) Multiply the portion of the true value determined under division (B)(1) of section 5711.21 of the Revised Code by the assessment rate for the appropriate year in division (D)(E) of this section;

(b) Multiply the portion of the true value determined under division (B)(2) of section 5711.21 of the Revised Code by the assessment rate in section 5727.111 of the Revised Code that is applicable to the production equipment of an electric company;

(c) Multiply the portion of the true value determined under division (B)(3) of section 5711.21 of the Revised Code by the assessment rate in section 5727.111 of the Revised Code that is applicable to the property of an electric company that is not production equipment.

(2) Personal property leased to a public utility or interexchange telecommunications company as defined in section 5727.01 of the Revised Code and used directly in the rendition of a public utility service as defined in division (P) of section 5739.01 of the Revised Code shall be listed and assessed at the same percentage of true value in money that such property is required to be assessed by section 5727.111 of the Revised Code if owned by the public utility or interexchange telecommunications company.

(C)(1) Merchandise or an agricultural product shipped from outside this state and held in this state in a warehouse or a place of storage without further manufacturing or processing and for storage only and for shipment outside this state, but that is taxable because it does not qualify as "not used in business in this state" under division (B)(1) or (2) of section 5701.08 of the Revised Code, shall be listed and assessed at a rate of twenty-five one-hundredths of its true value in money until reduced in accordance with the following schedule:

(a) For any year, subtract five one-hundredths from the rate at which such property was required to be listed and assessed in the preceding year, if the total statewide collection of all real and tangible personal property taxes for the second preceding year exceeded the total statewide collection of all real and tangible personal property taxes for the third preceding year by more than the greater of four per cent or the rate of increase from the third to the second preceding years in the average consumer price index (all urban consumers, all items) prepared by the bureau of labor statistics of the United States department of labor;

(b) If no reduction in the assessment rate is made for a year, the rate is the same as for the preceding year.

(2) Each year until the year the assessment rate equals zero, the tax commissioner shall determine the assessment rate required under this division and shall notify all county auditors of that rate.

(3) Notwithstanding provisions to the contrary in division (B) of section 5701.08 of the Revised Code, during and after the year for which the assessment rate as calculated under this division equals zero, any merchandise or agricultural product shipped from outside this state and held in this state in any warehouse or place of storage, whether public or private, without further manufacturing or processing and for storage only and for shipment outside this state to any person for any purpose is not used in business in this state for property tax purposes.

(D)(1) Merchandise or an agricultural product owned by a qualified out-of-state person shipped from outside this state and held in this state in a public warehouse without further manufacturing or processing and for temporary storage only and for shipment inside this state, but that is taxable because it does not qualify as "not used in business in this state" under division (B)(1) or (2) of section 5701.08 of the Revised Code, shall be listed and assessed at a rate of twenty-five one-hundredths of its true value in money until reduced in accordance with the following schedule:

(a) For any year, subtract five one-hundredths from the rate at which such property was required to be listed and assessed in the preceding year, if the total statewide collection of all real and tangible personal property taxes for the second preceding year exceeded the total statewide collection of all real and tangible personal property taxes for the third preceding year by more than the greater of four per cent or the rate of increase from the third to the second preceding years in the average consumer price index (all urban consumers, all items) prepared by the bureau of labor statistics of the United States department of labor;

(b) If no reduction in the assessment rate is made for a year, the rate is the same as for the preceding year.

(2) Each year until the year the assessment rate equals zero, the tax commissioner shall determine the assessment rate required under this division and shall notify all county auditors of that rate.

(3) Notwithstanding provisions to the contrary in division (B) of section 5701.08 of the Revised Code, during and after the year for which the assessment rate as calculated under this division equals zero, any merchandise or agricultural product described in division (D)(1) of this section is not used in business in this state for property tax purposes.

(4) As used in division (D) of this section:

(a) "Qualified out-of-state person" means a person that does not own, lease, or use property, other than merchandise or an agricultural product described in this division, in this state, and does not have employees, agents, or representatives in this state;

(b) "Public warehouse" means a warehouse in this state that is not subject to the control of or under the supervision of the owner of the merchandise or agricultural product stored in it, or staffed by the owner's employees, and from which the property is to be shipped inside this state.

(E) PERSONAL PROPERTY VALUED PURSUANT TO SECTIONS 5711.15 AND 5711.16 of the Revised Code, EXCEPT PROPERTY DESCRIBED IN DIVISION (C) OR (D) OF THIS SECTION AND ENGINES, MACHINERY, TOOLS, AND IMPLEMENTS OF EVERY KIND USED OR DESIGNED TO BE USED IN REFINING AND MANUFACTURING, AND OWNED OR USED BY A MANUFACTURER, SHALL BE LISTED AND ASSESSED AT THE PERCENTAGE OF TRUE VALUE FOR EACH TAX YEAR AS SHOWN IN THE FOLLOWING TABLE:

TAX YEAR	ASSESSMENT RATE
1999	24%
2000	23%
2001	22%
2002	21%
2003	20%
2004	19%
2005	18%
2006	17%
2007	16%
2008 and thereafter	15%

(F) Unless otherwise provided by law, all other personal property used in business that has not been legally regarded as an improvement on land and considered in arriving at the value of the real property assessed for taxation shall be listed and assessed at the rate of twenty-five per cent of its true value in money.

Sec. 5727.111. The taxable property of each public utility, except a railroad company, and of each interexchange telecommunications company shall be assessed at the following percentages of true value:

(A) Fifty per cent in the case of a rural electric company;

(B) In the case of a telephone or telegraph company, the percentage provided under division (E)(F) of section 5711.22 of the Revised Code for taxable property first subject to taxation in this state for tax year 1995 or thereafter, and eighty-eight per cent for all other taxable property;

(C) Eighty-eight per cent in the case of a natural gas or pipe-line company;

(D) Eighty-eight per cent in the case of a water-works or heating company;

(E) One hundred per cent in the case of the taxable production equipment of an electric company;

(F) Eighty-eight per cent in the case of all taxable personal property of an electric company, other than its production equipment;

(G) The percentage provided under division (E)(F) of section 5711.22 of the Revised Code in the case of an interexchange telecommunications company;

(H) Twenty-five per cent in the case of a water transportation company.

Sec. 5727.12. As used in this chapter, "property used in railroad operations" means property used in or determined by the tax commissioner to be held by a railroad for use in railroad operations. In determining the true value of all real and personal property owned or leased by each railroad company and used in railroad operations, the commissioner shall use the unitary method and value all of the property of the company's railroad system as a whole, considering the factors generally used in that method, and weighing each factor appropriately. The true value of the property used in railroad operations shall be apportioned to this state as provided in section 5727.14 of the Revised Code. The commissioner shall separately determine the true value of property owned by the company that the commissioner determines is not used in railroad operations. The commissioner may require the advice of county auditors concerning such values.

All property of a railroad shall be assessed for taxation at the same percentage of true value at which all other real property in this state is assessed, in the case of real property, and at the percentage of true value provided under division (E) OR (F) of section 5711.22 of the Revised Code, in the case of personal property.

A determination of the value of each tract, lot, or parcel of real property or each item of personal property not used in railroad operations shall be considered a separate determination with respect to which a separate petition for reassessment may be filed under section 5727.47 of the Revised Code.

Where a line of railroad is subsidized under the terms of the federal regional rail reorganization act or the federal rail revitalization and regulatory reform act, the real and other fixed property shall be assessed solely in the name of its owner.

Sec. 5739.029. THERE IS HEREBY LEVIED, BEGINNING JULY 1, 1998, AN EXCISE TAX OF ONE-HALF PER CENT ON EACH RETAIL SALE MADE IN THIS STATE AND ON THE STORAGE, USE, OR OTHER CONSUMPTION IN THIS STATE OF TANGIBLE PERSONAL PROPERTY OR THE BENEFIT REALIZED IN THIS STATE OF ANY SERVICE PROVIDED. ALL PROCEEDS OF THE TAX SHALL BE CREDITED TO THE SCHOOL TRUST FUND, WHICH IS HEREBY CREATED IN THE STATE TREASURY, AND SHALL BE USED SOLELY FOR THE PURPOSES OF PAYING COSTS OF SCHOOL OPERATIONS, SCHOOL FACILITIES AND DEBT SERVICE FOR SCHOOL FACILITIES, EDUCATION TECHNOLOGY, AND PROPERTY TAX RELIEF. THE TAXES HEREBY LEVIED ARE IN ADDITION TO THE SALES AND USE TAXES LEVIED BY OR PURSUANT TO LAW AND ARE SUBJECT TO THE SAME EXEMPTIONS AND EXCEPTIONS, AND SHALL BE IMPOSED AND COLLECTED PURSUANT TO THE SAME PROCEDURES, PROVIDED BY LAW AS IT EXISTS ON JULY 1, 1998, FOR OTHER STATE SALES AND USE TAXES, AND AS SUCH LAW MAY BE AMENDED FROM TIME TO TIME BY THE GENERAL ASSEMBLY.

Sec. 5747.37.(A) AS USED IN THIS SECTION:

(1) "HOMESTEAD" HAS THE SAME MEANING AS IN SECTION 323.151 OF THE REVISED CODE. FOR THE PURPOSES OF THIS SECTION, A TAXPAYER CLAIMING THE CREDIT UNDER THIS SECTION MUST BE THE INDIVIDUAL REFERRED TO IN THE DEFINITION OF "HOMESTEAD" UNDER SECTION 323.151 OF THE REVISED CODE, OR THE SPOUSE OF THAT INDIVIDUAL.

(2) "RESIDENTIAL PROPERTY TAXES" MEANS TAXES CHARGED AGAINST A HOMESTEAD.

(B) THERE IS HEREBY GRANTED A REFUNDABLE CREDIT AGAINST THE TAX IMPOSED BY SECTION 5747.02 OF THE REVISED CODE FOR RESIDENTIAL PROPERTY TAXES PAID BY A TAXPAYER DURING THE TAXABLE YEAR. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 1998, BUT PRIOR TO JANUARY 1, 1999, THE AMOUNT OF THE CREDIT SHALL EQUAL THE LESSER OF FIFTY DOLLARS OR FIVE PER CENT OF THE RESIDENTIAL PROPERTY TAXES PAID BY THE TAXPAYER DURING THE TAXABLE YEAR. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 1999, THE AMOUNT OF THE CREDIT SHALL EQUAL THE LESSER OF ONE HUNDRED DOLLARS OR TEN PER CENT OF THE RESIDENTIAL PROPERTY TAXES PAID BY THE TAXPAYER DURING THE TAXABLE YEAR. IF A TAXPAYER CLAIMS A CREDIT UNDER THIS SECTION, NO OTHER PERSON MAY CLAIM THE CREDIT FOR RESIDENTIAL PROPERTY TAXES PAID ON THAT TAXPAYER'S HOMESTEAD DURING THE TAXPAYER'S TAXABLE YEAR.

THE TAXPAYER SHALL CLAIM THE CREDIT AFTER ALL OTHER CREDITS CLAIMED BY THE TAXPAYER IN THE ORDER PRESCRIBED BY SECTION 5747.98 OF THE REVISED CODE. IF THE AMOUNT OF THE CREDIT EXCEEDS THE AMOUNT OF TAX OTHERWISE DUE UNDER SECTION 5747.02 OF THE REVISED CODE AFTER DEDUCTION OF ALL OTHER CREDITS CLAIMED BY THE TAXPAYER, THE TAXPAYER IS ENTITLED TO A REFUND OF THE EXCESS.

THE TAX COMMISSIONER MAY REQUIRE TAXPAYERS CLAIMING THE CREDIT UNDER THIS SECTION TO FURNISH THE TAX COMMISSIONER WITH DOCUMENTATION SUBSTANTIATING THE TAXPAYER'S CLAIM FOR THE CREDIT, AND, IF SUCH DOCUMENTATION IS REQUIRED, THE CREDIT SHALL NOT BE GRANTED UNLESS THE TAXPAYER FURNISHES THE DOCUMENTATION.

The Ohio Ballot Board, by majority vote, shall prescribe ballot language for the proposal. The ballot language shall properly identify the substance of the proposal to be voted upon. The ballot need not contain the full text of the proposal. The board shall prepare an explanation of the proposal, which may include its purposes and effects, and shall certify the ballot language and explanation to the Secretary of State. The ballot language and the explanations shall be available for public inspection in the Office of the Secretary of State. The board also may prepare arguments for and against the proposal.

The Supreme Court of Ohio has exclusive, original jurisdiction in all cases challenging the adoption or submission of the proposal. The ballot language shall not be held invalid unless it is such as to mislead, deceive, or defraud the voters.

The proposal, the ballot language, the explanations, and the arguments, if any, shall be published at least one, but not more than three, times preceding the election, in at least one newspaper of general circulation in each county of the state where a newspaper is published.

No court, except the Supreme Court of Ohio, is authorized to enjoin or invalidate the election on the adoption or submission of the proposal contained in this act. Nor shall such election be enjoined or invalidated because the explanation, arguments, or other information is faulty in any way.

General Revenue Fund

GRF	050-XXX	Special Election Costs	$	1,000,000	$	0
TOTAL GRF			$	1,000,000	$	0
TOTAL ALL BUDGET FUND GROUPS			$	1,000,000	$	0

Special Elections Costs

The foregoing appropriation item 050-XXX, Special Elections Costs, shall be used by the Secretary of State for the special election required by this act.

Within the limits set forth in this act, the Director of Budget and Management shall establish accounts indicating source and amount of funds for each appropriation made in this act, and shall determine the form and manner in which appropriation accounts shall be maintained. Expenditures from appropriations contained in this act shall be accounted for as though made in Am. Sub. H.B. 215 of the 122nd General Assembly.

The appropriations made in this act are subject to all provisions of Am. Sub. H.B. 215 of the 122nd General Assembly that are generally applicable to such appropriations.