130th Ohio General Assembly
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S. B. No. 144As Introduced
As Introduced

124th General Assembly
Regular Session
2001-2002
S. B. No. 144


SENATOR Mumper



A BILL
To amend sections 5733.98 and 5747.98 and to enact sections 122.84, 122.841, 5733.46, and 5747.75 of the Revised Code to create the Ethanol Production Grant Program and to create a tax credit against corporation franchise or income tax liability for investments in ethanol plants.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5733.98 and 5747.98 be amended and sections 122.84, 122.841, 5733.46, and 5747.75 of the Revised Code be enacted to read as follows:
Sec. 122.84. (A) As used in this section:
(1) "Eligible facility" means an ethanol production plant located in this state.
(2) "Ethanol" has the same meaning as in section 5733.46 of the Revised Code.
(3) "Qualifying period" means the period that begins on the date an eligible facility begins the production of ethanol and ends ten calendar years after that date.
(B) Beginning January 1, 2004, the ethanol production grant program is hereby created to encourage ethanol production in this state, promote economic development, and improve the economic welfare of the people of this state. For purposes of this program, the department of development shall make grants of money from the ethanol production incentive fund created by section 122.841 of the Revised Code to eligible facilities that meet the criteria in division (D) of this section. The amount of a grant for a fiscal year shall be an amount equal to twenty cents per gallon of ethanol produced at an eligible facility during the previous calendar year, but shall not exceed three million dollars.
(C) Beginning in 2004, not later than the first day of February each year, the owner or operator of an eligible facility may submit to the department of development an application for a grant on a form furnished by the department. The application shall contain such information as the director of development prescribes under division (E) of this section. Not later than the first day of April each year, the director shall notify each applicant in writing whether it will be awarded a grant for the ensuing fiscal year. If, for any fiscal year, the amount of grant moneys for which applicants qualify exceeds the amount appropriated from the ethanol production incentive fund for that fiscal year, the director shall reduce each grant by the proportion that the amount appropriated bears to the total amount of grants for which applicants would otherwise qualify.
(D) The director of development shall award an applicant a grant only after finding that all of the following criteria are met:
(1) The applicant is an eligible facility.
(2) The eligible facility produced the amount of ethanol reflected on its application for a grant.
(3) The eligible facility's net profits for the previous calendar year did not exceed three million dollars.
(4) The eligible facility's qualifying period has not expired.
If, after a grant has been awarded, the director of development determines that an eligible facility fails to meet the criteria established by this division or did not produce the amount of ethanol reflected on the application, the director may require that the facility refund all or a portion of the grant.
(E) In administering the program created under this section, the director of development shall adopt rules in accordance with Chapter 119. of the Revised Code necessary to implement this section. The rules shall establish procedures and forms by which applicants may apply for a grant, standards and procedures for reviewing applications and awarding a grant, and procedures for distributing the grant.
Sec. 122.841. There is hereby created in the state treasury the ethanol production incentive fund for the purposes of the ethanol production program established under section 122.84 of the Revised Code. The fund shall consist of all appropriations, grants, gifts, and contributions of money made to the department of development from any source for the fund. All investment earnings of the fund shall be credited to the fund. The department shall administer the fund and use all money in it to make grants under section 122.84 of the Revised Code and administer the program.
Sec. 5733.46. (A) As used in this section:
(1) "Ethanol" means fermentation ethyl alcohol derived from agricultural products, including potatoes, cereal, grains, cheese whey, and sugar beets; forest products; or other renewable resources, including residue and waste generated from the production, processing, and marketing of agricultural products, forest products, and other renewable resources that meet all of the specifications in the American society for testing and materials (ASTM) specification D 4806-88 and is denatured as specified in Parts 20 and 21 of Title 27 of the Code of Federal Regulations.
(2) "Ethanol plant" means a facility at which ethanol is produced.
(3) "Money" means United States currency, or a check, draft, or cashier's check for United States currency, payable on demand and drawn on a bank.
(B) Beginning in tax year 2001 and ending in tax year 2011, there is hereby allowed a refundable credit against the tax imposed by section 5733.06 of the Revised Code for a taxpayer that invests money in an ethanol plant. The amount of the credit equals fifty per cent of the money the taxpayer invests in the ethanol plant, but the credit amount shall not exceed fifty thousand dollars. The credit shall be claimed in the tax year in which the investment was made. For purposes of making tax payments under this chapter, taxes equal to the amount of the refundable credit shall be considered to be paid to this state on the first day of the tax year.
(C) The taxpayer shall claim the credit in the order required by section 5733.98 of the Revised Code. If the amount of the credit under this section exceeds the amount of tax otherwise due under section 5733.06 of the Revised Code after the deduction of all other credits in that order, the taxpayer is entitled to a refund of the excess.
(D) A taxpayer may transfer to another taxpayer all or a portion of the credit to which the initial taxpayer is entitled under this section by providing written notice of the transfer to the tax commissioner, in such form as the commissioner prescribes, at any time prior to the use of the credit. The taxpayer to which the credit is transferred may apply it against the tax imposed by section 5733.06 of the Revised Code and is entitled to any refund amount, to the same extent as the initial taxpayer.
(E) The tax commissioner may require that the taxpayer furnish information as is necessary to support the claim for the credit under this section, and no credit shall be allowed unless the information is provided.
Sec. 5733.98.  (A) To provide a uniform procedure for calculating the amount of tax imposed by section 5733.06 of the Revised Code that is due under this chapter, a taxpayer shall claim any credits to which it is entitled in the following order, except as otherwise provided in section 5733.058 of the Revised Code:
(1) The credit for taxes paid by a qualifying pass-through entity allowed under section 5733.0611 of the Revised Code;
(2) The credit for qualifying affiliated groups under section 5733.068 of the Revised Code;
(3) The subsidiary corporation credit under section 5733.067 of the Revised Code;
(4) The savings and loan assessment credit under section 5733.063 of the Revised Code;
(5) The credit for recycling and litter prevention donations under section 5733.064 of the Revised Code;
(6) The credit for employers that enter into agreements with child day-care centers under section 5733.36 of the Revised Code;
(7) The credit for employers that reimburse employee child day-care expenses under section 5733.38 of the Revised Code;
(8) The credit for maintaining railroad active grade crossing warning devices under section 5733.43 of the Revised Code;
(9) The credit for purchases of lights and reflectors under section 5733.44 of the Revised Code;
(10) The credit for manufacturing investments under section 5733.061 of the Revised Code;
(11) The credit for purchases of new manufacturing machinery and equipment under section 5733.31 or section 5733.311 of the Revised Code;
(12) The second credit for purchases of new manufacturing machinery and equipment under section 5733.33 of the Revised Code;
(13) The job training credit under section 5733.42 of the Revised Code;
(14) The credit for qualified research expenses under section 5733.351 of the Revised Code;
(15) The enterprise zone credit under section 5709.66 of the Revised Code;
(16) The credit for the eligible costs associated with a voluntary action under section 5733.34 of the Revised Code;
(17) The credit for employers that establish on-site child day-care under section 5733.37 of the Revised Code;
(18) The credit for purchases of qualifying grape production property under section 5733.32 of the Revised Code;
(19) The export sales credit under section 5733.069 of the Revised Code;
(20) The credit for research and development and technology transfer investors under section 5733.35 of the Revised Code;
(21) The enterprise zone credits under section 5709.65 of the Revised Code;
(22) The credit for using Ohio coal under section 5733.39 of the Revised Code;
(23) The refundable jobs creation credit under section 5733.0610 of the Revised Code;
(24) The refundable ethanol plant investment credit under section 5733.46 of the Revised Code.
(B) For any credit except the refundable jobs creation credit and the refundable ethanol investment credit, the amount of the credit for a tax year shall not exceed the tax due after allowing for any other credit that precedes it in the order required under this section. Any excess amount of a particular credit may be carried forward if authorized under the section creating that credit.
Sec. 5747.75. (A) As used in this section:
(1) "Ethanol" means fermentation ethyl alcohol derived from agricultural products, including potatoes, cereal, grains, cheese whey, and sugar beets; forest products; or other renewable resources, including residue and waste generated from the production, processing, and marketing of agricultural products, forest products, and other renewable resources that meet all of the specifications in the American society for testing and materials (ASTM) specification D 4806-88 and is denatured as specified in Parts 20 and 21 of Title 27 of the Code of Federal Regulations.
(2) "Ethanol plant" means a facility at which ethanol is produced.
(3) "Money" means United States currency, or a check, draft, or cashier's check for United States currency, payable on demand and drawn on a bank.
(B) Beginning in taxable year 2001 and ending in taxable year 2011, there is hereby allowed a refundable credit against the tax imposed by section 5747.02 of the Revised Code for a taxpayer that invests money in an ethanol plant. The amount of the credit equals fifty per cent of the money the taxpayer invests in the ethanol plant, but the credit amount shall not exceed fifty thousand dollars. The credit shall be claimed in the taxable year in which the investment was made. For purposes of making tax payments under this chapter, taxes equal to the amount of the refundable credit shall be considered to be paid to this state on the first day of the taxable year.
(C) The taxpayer shall claim the credit in the order required by section 5747.98 of the Revised Code. If the amount of the credit under this section exceeds the amount of tax otherwise due under section 5747.02 of the Revised Code after the deduction of all other credits in that order, the taxpayer is entitled to a refund of the excess.
(D) If the taxpayer is a direct or indirect investor in a pass-through entity that has made an investment under this section, the taxpayer may claim its proportionate or distributive share of the credit allowed under this section.
(E) A taxpayer may transfer to another taxpayer all or a portion of the credit to which the initial taxpayer is entitled under this section by providing written notice of the transfer to the tax commissioner, in such form as the commissioner prescribes, at any time prior to the use of the credit. The taxpayer to which the credit is transferred may apply it against the tax imposed by section 5747.02 of the Revised Code and is entitled to any refund amount, to the same extent as the initial taxpayer.
(F) The tax commissioner may require that the taxpayer furnish information as is necessary to support the claim for the credit under this section, and no credit shall be allowed unless the information is provided.
Sec. 5747.98.  (A) To provide a uniform procedure for calculating the amount of tax due under section 5747.02 of the Revised Code, a taxpayer shall claim any credits to which the taxpayer is entitled in the following order:
(1) The retirement income credit under division (B) of section 5747.055 of the Revised Code;
(2) The senior citizen credit under division (C) of section 5747.05 of the Revised Code;
(3) The lump sum distribution credit under division (D) of section 5747.05 of the Revised Code;
(4) The dependent care credit under section 5747.054 of the Revised Code;
(5) The lump sum retirement income credit under division (C) of section 5747.055 of the Revised Code;
(6) The lump sum retirement income credit under division (D) of section 5747.055 of the Revised Code;
(7) The lump sum retirement income credit under division (E) of section 5747.055 of the Revised Code;
(8) The credit for displaced workers who pay for job training under section 5747.27 of the Revised Code;
(9) The campaign contribution credit under section 5747.29 of the Revised Code;
(10) The twenty-dollar personal exemption credit under section 5747.022 of the Revised Code;
(11) The joint filing credit under division (G) of section 5747.05 of the Revised Code;
(12) The nonresident credit under division (A) of section 5747.05 of the Revised Code;
(13) The credit for a resident's out-of-state income under division (B) of section 5747.05 of the Revised Code;
(14) The credit for employers that enter into agreements with child day-care centers under section 5747.34 of the Revised Code;
(15) The credit for employers that reimburse employee child day-care expenses under section 5747.36 of the Revised Code;
(16) The credit for adoption of a minor child under section 5747.37 of the Revised Code;
(17) The credit for purchases of lights and reflectors under section 5747.38 of the Revised Code;
(18) The credit for manufacturing investments under section 5747.051 of the Revised Code;
(19) The credit for purchases of new manufacturing machinery and equipment under section 5747.26 or section 5747.261 of the Revised Code;
(20) The second credit for purchases of new manufacturing machinery and equipment and the credit for using Ohio coal under section 5747.31 of the Revised Code;
(21) The job training credit under section 5747.39 of the Revised Code;
(22) The enterprise zone credit under section 5709.66 of the Revised Code;
(23) The credit for the eligible costs associated with a voluntary action under section 5747.32 of the Revised Code;
(24) The credit for employers that establish on-site child day-care centers under section 5747.35 of the Revised Code;
(25) The credit for purchases of qualifying grape production property under section 5747.28 of the Revised Code;
(26) The export sales credit under section 5747.057 of the Revised Code;
(27) The credit for research and development and technology transfer investors under section 5747.33 of the Revised Code;
(28) The enterprise zone credits under section 5709.65 of the Revised Code;
(29) The refundable jobs creation credit under section 5747.058 of the Revised Code;
(30) The refundable credit for taxes paid by a qualifying entity granted under section 5747.059 of the Revised Code;
(31) The refundable credits for taxes paid by a qualifying pass-through entity granted under division (J) of section 5747.08 of the Revised Code;
(32) The refundable ethanol plant investment credit under section 5747.75 of the Revised Code.
(B) For any credit, except the refundable credits enumerated in divisions (A)(29), (30), and (31), and (32) of this section and the credit granted under division (I) of section 5747.08 of the Revised Code, the amount of the credit for a taxable year shall not exceed the tax due after allowing for any other credit that precedes it in the order required under this section. Any excess amount of a particular credit may be carried forward if authorized under the section creating that credit. Nothing in this chapter shall be construed to allow a taxpayer to claim, directly or indirectly, a credit more than once for a taxable year.
Section 2. That existing sections 5733.98 and 5747.98 of the Revised Code are hereby repealed.
Section 3. Not later than thirty days after the effective date of this act, the Director of Budget and Management shall transfer ten million dollars from the General Revenue Fund to the Ethanol Production Incentive Fund.
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