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(128th General Assembly)
(Substitute Senate Bill Number 131)
AN ACT
To amend sections 125.04, 5513.02, and 5747.77 and to
enact sections 125.091, 125.092, 125.093,
3345.691, and 3345.692 of the Revised Code to
require that the Director of Administrative
Services establish a program that ensures that
supplies composed of biobased products are
purchased by the Department of Administrative
Services, other state agencies, and state
institutions of higher education, and to extend
the income tax credit for retail sales of
alternative fuel for two additional years.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1. That sections 125.04, 5513.02, and 5747.77 be
amended and sections 125.091, 125.092, 125.093, 3345.691, and
3345.692 of the Revised Code be enacted to read as follows:
Sec. 125.04. (A) Except as provided in division (D) of this
section, the department of administrative services shall determine
what supplies and services are purchased by or for state agencies.
Whenever the department of administrative services makes any
change or addition to the lists of supplies and services that it
determines to purchase for state agencies, it shall provide a list
to the agencies of the changes or additions. Except for the
requirements of section 125.092 and division (B) of section 125.11
of the Revised Code, sections 125.04 to 125.08 and 125.09 to
125.15 of the Revised Code do not apply to or affect the
educational institutions of the state.
(B)(1) As used in this division:
(a) "Chartered nonpublic school" has the same meaning as in
section 3310.01 of the Revised Code.
(b) "Emergency medical service organization" has the same
meaning as in section 4765.01 of the Revised Code.
(c) "Political subdivision" means any county, township,
municipal corporation, school district, conservancy district,
township park district, park district created under Chapter 1545.
of the Revised Code, regional transit authority, regional airport
authority, regional water and sewer district, or port authority.
"Political subdivision" also includes any other political
subdivision described in the Revised Code that has been approved
by the department to participate in the department's contracts
under this division.
(d) "Private fire company" has the same meaning as in section
9.60 of the Revised Code.
(2) Subject to division (C) of this section, the department
of administrative services may permit a political subdivision,
county board of elections, private fire company, private,
nonprofit emergency medical service organization, or chartered
nonpublic school to participate in contracts into which the
department has entered for the purchase of supplies and services.
The department may charge the entity a reasonable fee to cover the
administrative costs the department incurs as a result of
participation by the entity in such a purchase contract.
A political subdivision desiring to participate in such
purchase contracts shall file with the department a certified copy
of an ordinance or resolution of the legislative authority or
governing board of the political subdivision. The resolution or
ordinance shall request that the political subdivision be
authorized to participate in such contracts and shall agree that
the political subdivision will be bound by such terms and
conditions as the department prescribes and that it will directly
pay the vendor under each purchase contract. A board of elections
desiring to participate in such purchase contracts shall file with
the purchasing authority a written request for inclusion in the
program. A private fire company, private, nonprofit emergency
medical service organization, or chartered nonpublic school
desiring to participate in such purchase contracts shall file with
the department a written request for inclusion in the program
signed by the chief officer of the company, organization, or
chartered nonpublic school. A request for inclusion shall include
an agreement to be bound by such terms and conditions as the
department prescribes and to make direct payments to the vendor
under each purchase contract.
The department shall include in its annual report an estimate
of the cost it incurs by permitting political subdivisions, county
boards of elections, private fire companies, private, nonprofit
emergency medical service organizations, and chartered nonpublic
schools to participate in contracts pursuant to this division. The
department may require such entities to file a report with the
department, as often as it finds necessary, stating how many such
contracts the entities participated in within a specified period
of time, and any other information the department requires.
(3) Purchases made by a political subdivision or a county
board of elections under this division are exempt from any
competitive selection procedures otherwise required by law. No
political subdivision shall make any purchase under this division
when bids have been received for such purchase by the subdivision,
unless such purchase can be made upon the same terms, conditions,
and specifications at a lower price under this division.
(C) A political subdivision as defined in division (B) of
this section or a county board of elections may purchase supplies
or services from another party, including a political subdivision,
instead of through participation in contracts described in
division (B) of this section if the political subdivision or
county board of elections can purchase those supplies or services
from the other party upon equivalent terms, conditions, and
specifications but at a lower price than it can through those
contracts. Purchases that a political subdivision or county board
of elections makes under this division are exempt from any
competitive selection procedures otherwise required by law. A
political subdivision or county board of elections that makes any
purchase under this division shall maintain sufficient information
regarding the purchase to verify that the political subdivision or
county board of elections satisfied the conditions for making a
purchase under this division. Nothing in this division restricts
any action taken by a county or township as authorized by division
(B)(1) of section 9.48 of the Revised Code.
(D) This section does not apply to supplies or services
required by the legislative or judicial branches, the capitol
square review and advisory board, the adjutant general for
military supplies and services, to supplies or services purchased
by a state agency directly as provided in division (A), (B), or
(F) of section 125.05 of the Revised Code, or to purchases of
supplies or services for the emergency management agency as
provided in section 125.023 of the Revised Code.
Sec. 125.091. As used in this section and sections 125.092
and 125.093 of the Revised Code:
(A) "Agricultural materials" means agricultural-based
materials or residues, including plant, animal, and marine
materials or residues, used in the manufacture of commercial or
industrial nonfood products.
(B) "Biobased product" means a product determined by the
United States secretary of agriculture to be a commercial or
industrial product, other than food or feed, that is composed, in
whole or significant part, of biological products, renewable
domestic agricultural materials, or forestry material, or is an
intermediate ingredient or feedstock.
(C) "Biological products" means products derived from living
materials other than agricultural or forestry materials.
(D) "Designated item" means a generic grouping of biobased
products identified in subpart B, 7 C.F.R. 2902.10 to 2902.42.
(E) "Forest thinnings" means woody materials removed from a
dense forest to improve growth, enhance forest health, or remove
trees to recover potential mortality.
(F) "Forestry materials" means materials derived from the
practice of planting and caring for forests and the management of
growing timber where such materials come from short-rotation woody
crops that are less than ten years old, sustainably managed
forests, wood residues, or forest thinnings.
(G) "Intermediate ingredient or feedstock" means a material
or compound made, in whole or in significant part, from biological
products, renewable agricultural materials, or forestry materials
that are subsequently used to make a more complex compound or
product.
(H) "Sustainably managed forests" means the practice of land
stewardship that integrates the reforestation, management,
growing, nurturing, and harvesting of trees for useful products
while conserving soil and improving air and water quality,
wildlife, fish habitat, and aesthetics.
Sec. 125.092. (A) Except as provided in divisions (G) and
(H) of this section, when purchasing equipment, material, or
supplies, the department of administrative services, other state
agencies, and state institutions of higher education shall
purchase biobased products in accordance with the biobased product
preference program established by the director of administrative
services under this section.
(B) Not later than one hundred eighty days after the
effective date of this section, the director shall establish a
biobased product preference program, which shall ensure that the
department of administrative services, other state agencies, and
state institutions of higher education purchase biobased products
by giving a preference to those designated items that are composed
of the highest percentage of biobased content practicable or that
comply with regulations adopted under 42 U.S.C. 6914b-1 by the
administrator of the United States environmental protection
agency. The purchase of biobased products under the program shall
be consistent with sections 125.01 to 125.11 of the Revised Code.
As part of the program, the director shall adopt a policy of
setting minimum biobased content specifications for awarding
contracts in a manner that ensures that the biobased content of
biobased products is consistent with the guidelines issued under 7
U.S.C. 8102, except when the director determines that division
(C)(1), (2), or (3) of this section applies.
(C) The director may determine that it is not possible for a
biobased product to be purchased in accordance with the biobased
product preference program if the director determines that any of
the following applies to the product:
(1) The product is not available within a reasonable period
of time.
(2) The product fails to meet the performance standards set
forth in the applicable specifications for the product.
(3) The price of the product is an unreasonable price. As
used in division (C)(3) of this section, "unreasonable price"
means either of the following:
(a) The price of the biobased product exceeds the price of a
substantially equivalent nonbiobased product.
(b) The price of the biobased product exceeds the fair market
value of a substantially equivalent nonbiobased product.
In accordance with rules adopted under this section, the
director may determine a percentage that is up to five per cent by
which the price of a biobased product may exceed the price or fair
market value of a substantially equivalent nonbiobased product
without being considered an unreasonable price for the purpose of
division (C)(3)(a) or (b) of this section, as applicable. In doing
so, the director shall give consideration to the benefits of
expanding the use of biobased products.
(D) For any biobased product offered under the biobased
product preference program, a vendor shall certify that the
product meets the biobased content requirements for the designated
item of which the product is an exemplar. Upon request, a vendor
shall provide to the director information to verify the biobased
content of a biobased product qualifying for purchase in
accordance with the program.
(E) The director shall adopt rules in accordance with Chapter
119. of the Revised Code that prescribe all of the following:
(1) The procedures the department of administrative services
and other state agencies shall use to give preference to and
purchase biobased products in accordance with the program;
(2) The purchasing policy the director adopts under division
(B) of this section;
(3) Procedures and guidelines to be used by the director in
determining percentages for purposes of division (C) of this
section;
(4) Other requirements or procedures that are necessary to
implement the biobased product preference program.
(F) The director shall maintain a list of products that
qualify as designated items under the biobased product preference
program.
(G) When purchasing equipment, material, or supplies, a state
institution of higher education shall purchase designated items in
accordance with procedures established by the institution.
(H) If, after assessing the functions of designated items, a
state agency determines that none of the designated items are
functionally capable of meeting a specific need of the agency, the
agency shall notify the director of administrative services. If,
after assessing the functions of designated items, a state
institution of higher education determines that none of the
designated items are functionally capable of meeting a specific
need of the institution, the institution shall notify both the
director of administrative services and the chancellor of the
board of regents. The agency or institution then may purchase a
nonbiobased product that is functionally capable of meeting that
specific need of the agency or institution, as applicable. Such a
purchase does not constitute failure to comply with the biobased
product preference program or preclude the agency or institution
from otherwise participating in the program.
(I) This section does not apply to the purchase of motor
vehicle fuel, heating oil, or electricity.
(J) As used in this section, "state institution of higher
education" has the same meaning as in section 3345.011 of the
Revised Code.
Sec. 125.093. Not later than September 30, 2010, and the
thirtieth day of September each year thereafter, the director of
administrative services shall prepare and submit to the governor,
the president of the senate, and the speaker of the house of
representatives a report that describes the number and types of
biobased products purchased under section 125.092 of the Revised
Code and the amount of money spent by the department of
administrative services and other state agencies for those
biobased products.
Sec. 3345.691. A state institution of higher education, as
defined in section 3345.011 of the Revised Code, shall comply with
section 125.092 of the Revised Code regarding the purchase of
biobased products.
Sec. 3345.692. (A) Not later than September 15, 2010, and
the fifteenth day of September each year thereafter, a state
institution of higher education shall prepare and submit to the
chancellor of the board of regents a report that describes the
number and types of biobased products purchased under section
125.092 of the Revised Code and the amount of money spent by the
state institution of higher education for those biobased products.
(B) Not later than September 30, 2010, and the thirtieth day
of September each year thereafter, the chancellor of the board of
regents shall prepare and submit to the governor, the president of
the senate, and the speaker of the house of representatives a
report that describes the number and types of biobased products
purchased under section 125.092 of the Revised Code and the amount
of money spent by state institutions of higher education for those
biobased products as that information is provided to the
chancellor under division (A) of this section.
(C) As used in this section, "state institution of higher
education" has the same meaning as in section 3345.011 of the
Revised Code.
Sec. 5513.02. (A) Specifications describing the character of
the articles that the department of transportation is proposing to
purchase, and the conditions governing shipment and delivery,
shall be kept on file at the department and open to public
inspection throughout the time during which an invitation to
bidders is required to be posted. The director of transportation
may require bids to be accompanied by a certified check payable to
the director in an amount fixed by the director and stated in the
invitation to bidders. Persons, firms, or corporations desiring to
bid on more than one invitation shall be relieved from furnishing
certified checks with their bids provided they first furnish a
bond payable to the state, in an amount and with surety approved
by the director, conditioned for the faithful performances of all
contracts that may be awarded to them, and otherwise conditioned
as the director requires. All bids shall be publicly opened and
read at the time and place mentioned in the notice. All purchases
shall be made by the director from the lowest responsive and
responsible bidder for each item in accordance with section 9.312
of the Revised Code, except where the director has established in
the bidding documents a provision for multiple awards for the
purchase of items such as asphalt, aggregates, machinery parts,
and others as the director determines necessary, and except that
in the purchase of machinery, equipment, or supplies for which
fixed and definite specifications cannot be prepared, the director
may purchase the articles meeting the general specifications
prescribed and which the director finds are most suitable for the
uses intended. Sections 5513.01 to 5513.04 of the Revised Code
shall apply to the exchange of machinery and equipment and in
force account operations where the director desires to combine in
one order the furnishing, hauling, and placing of material. The
director may purchase or authorize the purchase without notice, or
upon such notice as the director prescribes, of materials that in
the director's judgment may be required for the immediate repair
of roads or bridges destroyed or damaged by flood, landslide, or
other casualty. No person shall place separate orders for the
purpose of defeating such sections, and contracts of purchase
shall not be valid unless made in conformity with this section.
(B) Division Section 125.092 and division (B) of section
125.11 of the Revised Code
applies apply to the purchase of
products by the director pursuant to sections 5513.01 to 5513.04
of the Revised Code.
Sec. 5747.77. (A) As used in this section:
(1) "Alternative fuel" means E85 blend fuel or blended
biodiesel.
(2) "Biodiesel" means a mono-alkyl ester combustible liquid
fuel that is derived from vegetable oils or animal fats, or any
combination of those reagents that meets the American society for
testing and materials specification for biodiesel fuel (B100)
blend stock distillate fuels.
(3) "Blended biodiesel" means a blend of biodiesel with
petroleum-based diesel fuel in which the resultant product
contains not less than twenty per cent biodiesel and meets the
American society for testing and materials specification for
blended diesel fuel.
For taxable years ending in 2010 or 2011,
"six per cent" shall be substituted for "twenty per cent."
(4) "Diesel fuel" means any liquid fuel that is capable of
use in discrete form or as a blend component in the operation of
engines of the diesel type.
(5) "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.
(6) "E85 blend fuel" means fuel containing eighty-five per
cent or more ethanol, or containing any other percentage of not
less than seventy per cent ethanol if the United States department
of energy determines, by rule, that the lower percentage is
necessary to provide for the requirements of cold start, safety,
or other vehicle functions, and that meets the American society
for testing and materials specification for E85 blend fuel.
(7) "Retail dealer" means any person that is a taxpayer under
this chapter that owns or operates a retail service station
located in this state.
(8) "Retail service station" means a location in this state
from which alternative fuel is sold to the general public and is
dispensed or pumped directly into motor vehicle fuel tanks for
consumption.
(B) For taxable years ending in 2008 and 2009, there is
hereby allowed a nonrefundable credit against the tax imposed by
section 5747.02 of the Revised Code for a retail dealer that sells
alternative fuel. The credit for a dealer's taxable year ending in
2008 shall equal fifteen cents per gallon of alternative fuel sold
and dispensed through a metered pump at the retail dealer's retail
service station during any part of calendar year 2007 or 2008
included in that taxable year. The credit for a dealer's taxable
year ending in 2009 shall equal fifteen cents per gallon of
alternative fuel sold and dispensed through a metered pump at the
retail dealer's retail service station during any part of calendar
year 2008 included in that taxable year, plus thirteen cents per
gallon of alternative fuel sold and dispensed in that manner
during any part of calendar year 2009 included in that taxable
year.
(C)(1) For taxable years ending in 2010 or 2011, there is
hereby allowed a nonrefundable credit against the tax imposed by
section 5747.02 of the Revised Code for a retail dealer that sells
alternative fuel. Except as otherwise provided in division (C)(2)
of this section, the credit for a dealer's taxable year ending in
2010 shall equal fifteen cents per gallon of alternative fuel sold
and dispensed through a metered pump at the retail dealer's retail
service station during any part of calendar year 2009 or 2010
included in that taxable year. Except as otherwise provided in
division (C)(2) of this section, the credit for a dealer's taxable
year ending in 2011 shall equal fifteen cents per gallon of
alternative fuel sold and dispensed through a metered pump at the
retail dealer's retail service station during any part of calendar
year 2010 included in that taxable year, plus thirteen cents per
gallon of alternative fuel sold and dispensed in that manner
during any part of calendar year 2011 included in that taxable
year.
(2) In the case of blended biodiesel containing at least ten
per cent but less than twenty per cent biodiesel as sold and
dispensed through such metered pump, the credit otherwise allowed
under division (C)(1) of this section shall equal seven and
one-half cents per gallon. In the case of blended biodiesel
containing at least six per cent but less than ten per cent
biodiesel as sold and dispensed through such metered pump, the
credit otherwise allowed under division (C)(1) of this section
shall equal three and three-fourths cents per gallon.
(D) The credit shall be calculated separately for each retail
service station owned or operated by the retail dealer. The credit
allowed under this section may not be claimed for alternative fuel
sold or dispensed before January 1, 2008, or on or after January
1, 2010 2012.
(C)(E) The retail dealer shall claim the credit under this
section in the order prescribed in section 5747.98 of the Revised
Code. The credit shall not exceed the amount of tax otherwise due
under section 5747.02 of the Revised Code after deducting any
other credits that precede the credit claimed under this section
in that order.
(D)(F) Nothing in this section limits or disallows
pass-through treatment of the credit if the retail dealer is a
pass-through entity. If the retail dealer is a pass-through
entity, references in other divisions of this section to "taxable
year" refer to the dealer's taxable year; an equity owner of the
retail dealer that is a pass-through entity may claim the owner's
distributive or proportionate share of the credit for the equity
owner's taxable year that includes the last day of the entity's
taxable year.
SECTION 2. That existing sections 125.04, 5513.02, and
5747.77 of the Revised Code are hereby repealed.
SECTION 3. Section 125.04 of the Revised Code is presented
in this act as a composite of the section as amended by both Am.
Sub. H.B. 562 and Am. Sub. S.B. 268 of the 127th General Assembly.
The General Assembly, applying the principle stated in division
(B) of section 1.52 of the Revised Code that amendments are to be
harmonized if reasonably capable of simultaneous operation, finds
that the composite is the resulting version of the section in
effect prior to the effective date of the section as presented in
this act.
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