To amend sections 101.27, 5747.02, and 5747.056 of the Revised Code and to amend Section 265.10 of Am. Sub. H.B. 1 of the 128th General Assembly to postpone for two years the last of five scheduled income tax rate reductions, to reduce salaries of General Assembly members by five per cent, and to make conforming amendments.

Section 1. That sections 101.27, 5747.02, and 5747.056 of the Revised Code be amended to read as follows:

Sec. 101.27.  (A)(1) Every member of the senate, except the members elected president, president pro tempore, assistant president pro tempore, majority whip, minority leader, assistant minority leader, minority whip, and assistant minority whip, shall receive as compensation a salary of fifty-one thousand six hundred seventy-four dollars a year during the senator's term of office. Every member of the house of representatives, except the members elected speaker, speaker pro tempore, majority floor leader, assistant majority floor leader, majority whip, assistant majority whip, minority leader, assistant minority leader, minority whip, and assistant minority whip, shall receive as compensation a salary of fifty-one thousand six hundred seventy-four dollars a year during the representative's term of office. Such salaries shall be paid in equal monthly installments during such term. All monthly payments shall be made on or before the fifth day of each month. Upon the death of any member of the general assembly during the member's term of office, any unpaid salary due such member for the remainder of the member's term shall be paid to the member's surviving spouse, children, mother, or father, in the order in which the relationship is set forth in this section in monthly installments.

(2) Each member shall receive a travel reimbursement per mile each way, at the same mileage rate allowed for the reimbursement of travel expenses of state agents as provided by rule of the director of budget and management pursuant to division (B) of section 126.31 of the Revised Code, for mileage not more than once a week during the session for travel incurred by a member from and to the member's place of residence, by the most direct highway route of public travel to and from the seat of government, to be paid quarterly on the last day of March, June, September, and December of each year.

(3) The member of the senate elected president and the member of the house of representatives elected speaker shall each receive as compensation a salary of eighty thousand five hundred forty-nine dollars a year during the president's or speaker's term of office.

The member of the senate elected president pro tempore, the member of the senate elected minority leader, the member of the house of representatives elected speaker pro tempore, and the member of the house of representatives elected minority leader shall each receive as compensation a salary of seventy-three thousand four hundred ninety-three dollars a year during the member's term of office. The member of the house of representatives elected majority floor leader and the member of the senate elected assistant president pro tempore shall each receive as compensation a salary of sixty-nine thousand two hundred twenty-seven dollars a year during the member's term of office. The member of the senate elected assistant minority leader and the member of the house of representatives elected assistant minority leader shall each receive as compensation a salary of sixty-seven thousand ninety-nine dollars a year during the member's term of office. The member of the senate elected majority whip and the member of the house of representatives elected assistant majority floor leader shall each receive a salary of sixty-four thousand nine hundred sixty-seven dollars a year during the member's term of office. The member of the senate elected minority whip, the member of the house of representatives elected majority whip, and the member of the house of representatives elected minority whip shall each receive as compensation a salary of sixty thousand seven hundred six dollars a year during the member's term of office. The member of the house of representatives elected assistant majority whip shall receive as compensation a salary of fifty-six thousand four hundred forty-three dollars a year during the member's term of office. The member of the house of representatives elected assistant minority whip and the member of the senate elected assistant minority whip shall each receive a salary of fifty-four thousand sixty dollars a year during the member's term of office.

(4) The chairperson of the finance committee of each house shall receive an additional sum of ten thousand dollars annually. The chairperson of each standing committee of each house other than the finance committee shall receive an additional sum of six thousand five hundred dollars annually. The chairperson of each standing subcommittee of a finance committee shall receive an additional sum of six thousand five hundred dollars annually. The vice-chairperson of the finance committee of each house shall receive an additional sum of five thousand five hundred dollars annually. The ranking minority member of the finance committee of each house shall receive an additional sum of six thousand five hundred dollars annually. The ranking minority member of each standing subcommittee of a finance committee shall receive an additional sum of five thousand dollars annually. The chairperson of each standing subcommittee of each house other than a standing subcommittee of the finance committee shall receive an additional sum of five thousand dollars annually. The vice-chairperson and ranking minority member of each standing committee of each house other than the finance committee shall each receive an additional sum of five thousand dollars annually. Except for the ranking minority member of each standing subcommittee of a finance committee, the ranking minority member of each standing subcommittee of each house shall receive an additional sum of two thousand five hundred dollars annually.

No member may receive more than one additional sum for serving as chairperson, vice-chairperson, or ranking minority member of a standing committee or standing subcommittee, regardless of the number of standing committees or standing subcommittees on which the member serves as chairperson, vice-chairperson, or ranking minority member.

(5) If a member is absent without leave, or is not excused on the member's return, there shall be deducted from the member's compensation twenty dollars for each day's absence.

(B) Each calendar year from 2002 through 2008, the salary amounts under divisions (A)(1) and (3) of this section shall be increased by the lesser of the following:

(1) Three per cent;

(2) The percentage increase, if any, in the consumer price index over the twelve-month period that ends on the thirtieth day of September of the immediately preceding year, rounded to the nearest one-tenth of one per cent.

(C) The salary amounts specified in divisions (A)(1) and (3) of this section as they have been increased under division (B) of this section and the additional sums specified in division (A)(4) of this section shall be reduced by five per cent.

(D) As used in this section:

(1) "Consumer price index" means the consumer price index prepared by the United States bureau of labor statistics (U.S. city average for urban wage earners and clerical workers: all items, 1982-1984=100), or, if that index is no longer published, a generally available comparable index.

(2) "Finance committee" means the finance committee of the senate and the finance-appropriations committee of the house of representatives.

Sec. 5747.02.  (A) For the purpose of providing revenue for the support of schools and local government functions, to provide relief to property taxpayers, to provide revenue for the general revenue fund, and to meet the expenses of administering the tax levied by this chapter, there is hereby levied on every individual, trust, and estate residing in or earning or receiving income in this state, on every individual, trust, and estate earning or receiving lottery winnings, prizes, or awards pursuant to Chapter 3770. of the Revised Code, and on every individual, trust, and estate otherwise having nexus with or in this state under the Constitution of the United States, an annual tax measured in the case of individuals by Ohio adjusted gross income less an exemption for the taxpayer, the taxpayer's spouse, and each dependent as provided in section 5747.025 of the Revised Code; measured in the case of trusts by modified Ohio taxable income under division (D) of this section; and measured in the case of estates by Ohio taxable income. The tax imposed by this section on the balance thus obtained is hereby levied as follows:

(1) For taxable years beginning in 2004:

(2) For taxable years beginning in 2005:

(3) For taxable years beginning in 2006:

(4) For taxable years beginning in 2007:

(5) For taxable years beginning in 2008, 2009, or 2010:

(6) For taxable years beginning in 2009 2011 or thereafter:

In July of each year, beginning in 2010, the tax commissioner shall adjust the income amounts prescribed in this division by multiplying the percentage increase in the gross domestic product deflator computed that year under section 5747.025 of the Revised Code by each of the income amounts resulting from the adjustment under this division in the preceding year, adding the resulting product to the corresponding income amount resulting from the adjustment in the preceding year, and rounding the resulting sum to the nearest multiple of fifty dollars. The tax commissioner also shall recompute each of the tax dollar amounts to the extent necessary to reflect the adjustment of the income amounts. The rates of taxation shall not be adjusted.

The adjusted amounts apply to taxable years beginning in the calendar year in which the adjustments are made. The tax commissioner shall not make such adjustments in any year in which the amount resulting from the adjustment would be less than the amount resulting from the adjustment in the preceding year.

(B) If the director of budget and management makes a certification to the tax commissioner under division (B) of section 131.44 of the Revised Code, the amount of tax as determined under division (A) of this section shall be reduced by the percentage prescribed in that certification for taxable years beginning in the calendar year in which that certification is made.

(C) The levy of this tax on income does not prevent a municipal corporation, a joint economic development zone created under section 715.691, or a joint economic development district created under section 715.70 or 715.71 or sections 715.72 to 715.81 of the Revised Code from levying a tax on income.

(D) This division applies only to taxable years of a trust beginning in 2002 or thereafter.

(1) The tax imposed by this section on a trust shall be computed by multiplying the Ohio modified taxable income of the trust by the rates prescribed by division (A) of this section.

(2) A nonresident trust may claim a credit against the tax computed under division (D) of this section equal to the lesser of (1) the tax paid to another state or the District of Columbia on the nonresident trust's modified nonbusiness income, other than the portion of the nonresident trust's nonbusiness income that is qualifying investment income as defined in section 5747.012 of the Revised Code, or (2) the effective tax rate, based on modified Ohio taxable income, multiplied by the nonresident trust's modified nonbusiness income other than the portion of the nonresident trust's nonbusiness income that is qualifying investment income. The credit applies before any other applicable credits.

(3) The credits enumerated in divisions (A)(1) to (13) of section 5747.98 of the Revised Code do not apply to a trust subject to division (D) of this section. Any credits enumerated in other divisions of section 5747.98 of the Revised Code apply to a trust subject to division (D) of this section. To the extent that the trust distributes income for the taxable year for which a credit is available to the trust, the credit shall be shared by the trust and its beneficiaries. The tax commissioner and the trust shall be guided by applicable regulations of the United States treasury regarding the sharing of credits.

(E) For the purposes of this section, "trust" means any trust described in Subchapter J of Chapter 1 of the Internal Revenue Code, excluding trusts that are not irrevocable as defined in division (I)(3)(b) of section 5747.01 of the Revised Code and that have no modified Ohio taxable income for the taxable year, charitable remainder trusts, qualified funeral trusts and preneed funeral contract trusts established pursuant to sections 4717.31 to 4717.38 of the Revised Code that are not qualified funeral trusts, endowment and perpetual care trusts, qualified settlement trusts and funds, designated settlement trusts and funds, and trusts exempted from taxation under section 501(a) of the Internal Revenue Code.

Sec. 5747.056. For taxable years beginning in 2005 or thereafter, a credit shall be allowed per return against the tax imposed by section 5747.02 of the Revised Code for a return not filed by an estate or trust that indicates Ohio adjusted gross income less exemptions of ten thousand dollars or less. For taxable years beginning in 2005, the credit shall equal one hundred seven dollars. For taxable years beginning in 2006, the credit shall equal one hundred two dollars. For taxable years beginning in 2007, the credit shall equal ninety-eight dollars. For taxable years beginning in 2008, 2009, or 2010, the credit shall equal ninety-three dollars. For taxable years beginning in 2009 2011 or thereafter, the credit shall equal eighty-eight dollars. The credit shall be claimed in the order required under section 5747.98 of the Revised Code.

Section 2.  That existing sections 101.27, 5747.02, and 5747.056 of the Revised Code are hereby repealed.

Section 3.  That Section 265.10 of Am. Sub. H.B. 1 of the 128th General Assembly be amended to read as follows:

Sec. 265.10. EDU DEPARTMENT OF EDUCATION

General Revenue Fund

General Services Fund Group

Federal Special Revenue Fund Group

State Special Revenue Fund Group

Lottery Profits Education Fund Group

Revenue Distribution Fund Group

Section 4.  That existing Section 265.10 of Am. Sub. H.B. 1 of the 128th General Assembly is hereby repealed.

Section 5.  The amendment by this act of sections 5747.02 and 5747.056 of the Revised Code provides for or is essential to the implementation of a tax levy. Therefore, under Ohio Constitution, Article II, Section 1d, the amendment is not subject to the referendum and goes into immediate effect when this act becomes law.

Section 6.  The amendment by this act of Section 265.10 of Am. Sub. H.B. 1 of the 128th General Assembly is exempt from the referendum under Ohio Constitution, Article II, Section 1d and section 1.471 of the Revised Code and therefore goes into immediate effect when this act becomes law.