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H. B. No. 327 As IntroducedAs Introduced
129th General Assembly | Regular Session | 2011-2012 |
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Cosponsors:
Representatives Baker, Brenner, Stebelton
A BILL
To amend sections 122.17 and 122.171 of the Revised
Code to provide for a six-year trial period in
which taxpayers may receive a job creation or job
retention tax credit for the employment of
home-based employees and to require the Director
of Development to issue a report at the end of the
six-year period.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 122.17 and 122.171 of the Revised
Code be amended to read as follows:
Sec. 122.17. (A) As used in this section:
(1) "Income tax revenue" means the total amount withheld
under section 5747.06 of the Revised Code by the taxpayer during
the taxable year, or during the calendar year that includes the
tax period, from the compensation of each employee or each
home-based employee employed in the project to the extent the
employee's withholdings are not used to determine the credit under
section 122.171 of the Revised Code. "Income tax revenue" excludes
amounts withheld before the day the taxpayer becomes eligible for
the credit.
(2) "Baseline income tax revenue" means income tax revenue
except that the applicable withholding period is the twelve months
immediately preceding the date the tax credit authority approves
the taxpayer's application multiplied by the sum of one plus an
annual pay increase factor to be determined by the tax credit
authority. If the taxpayer becomes eligible for the credit after
the first day of the taxpayer's taxable year or after the first
day of the calendar year that includes the tax period, the
taxpayer's baseline income tax revenue for the first such taxable
or calendar year of credit eligibility shall be reduced in
proportion to the number of days during the taxable or calendar
year for which the taxpayer was not eligible for the credit. For
subsequent taxable or calendar years, "baseline income tax
revenue" equals the unreduced baseline income tax revenue for the
preceding taxable or calendar year multiplied by the sum of one
plus the pay increase factor.
(3) "Excess income tax revenue" means income tax revenue
minus baseline income tax revenue.
(4) "Home-based employee" means an employee whose services
are performed primarily from the employee's residence in this
state exclusively for the benefit of the project and whose rate of
pay is at least nine dollars and fifty cents per hour.
(B) The tax credit authority may make grants under this
section to foster job creation in this state. Such a grant shall
take the form of a refundable credit allowed against the tax
imposed by section 5725.18, 5729.03, 5733.06, or 5747.02 or levied
under Chapter 5751. of the Revised Code. The credit shall be
claimed for the taxable years or tax periods specified in the
taxpayer's agreement with the tax credit authority under division
(D) of this section. With respect to taxes imposed under section
5733.06 or 5747.02 or Chapter 5751. of the Revised Code, the
credit shall be claimed in the order required under section
5733.98, 5747.98, or 5751.98 of the Revised Code. The amount of
the credit available for a taxable year or for a calendar year
that includes a tax period equals the excess income tax revenue
for that year multiplied by the percentage specified in the
agreement with the tax credit authority. Any credit granted under
this section against the tax imposed by section 5733.06 or 5747.02
of the Revised Code, to the extent not fully utilized against such
tax for taxable years ending prior to 2008, shall automatically be
converted without any action taken by the tax credit authority to
a credit against the tax levied under Chapter 5751. of the Revised
Code for tax periods beginning on or after July 1, 2008, provided
that the person to whom the credit was granted is subject to such
tax. The converted credit shall apply to those calendar years in
which the remaining taxable years specified in the agreement end.
(C) A taxpayer or potential taxpayer who proposes a project
to create new jobs in this state may apply to the tax credit
authority to enter into an agreement for a tax credit under this
section. The
An application shall not propose to include both home-based
employees and employees who are not home-based employees in the
computation of income tax revenue for the purposes of the same tax
credit agreement. If a taxpayer or potential taxpayer employs both
home-based employees and employees who are not home-based
employees in a project, the taxpayer shall submit separate
applications for separate tax credit agreements for the project,
one of which shall include home-based employees in the computation
of income tax revenue and one of which shall include all other
employees in the computation of income tax revenue.
The director of development shall prescribe the form of the
application. After receipt of an application, the authority may
enter into an agreement with the taxpayer for a credit under this
section if it determines all of the following:
(1) The taxpayer's project will increase payroll and income
tax revenue;
(2) The taxpayer's project is economically sound and will
benefit the people of this state by increasing opportunities for
employment and strengthening the economy of this state;
(3) Receiving the tax credit is a major factor in the
taxpayer's decision to go forward with the project.
(D) An agreement under this section shall include all of the
following:
(1) A detailed description of the project that is the subject
of the agreement;
(2)(a) The term of the tax credit, which, except as provided
in division (D)(2)(b) of this section, shall not exceed fifteen
years, and the first taxable year, or first calendar year that
includes a tax period, for which the credit may be claimed;
(b) If home-based employees are included in the computation
of income tax revenue for purposes of the credit, the term of the
credit shall expire on or before the last day of the taxable or
calendar year ending before the beginning of the seventh year
after the effective date of ....B. ... of the 129th general
assembly;
(3) A requirement that the taxpayer shall maintain operations
at the project location for at least the greater of seven years or
the term of the credit plus three years;
(4) The percentage, as determined by the tax credit
authority, of excess income tax revenue that will be allowed as
the amount of the credit for each taxable year or for each
calendar year that includes a tax period;
(5) The pay increase factor to be applied to the taxpayer's
baseline income tax revenue;
(6) A requirement that the taxpayer annually shall report to
the director of development employment, tax withholding,
investment, and other information the director needs to perform
the director's duties under this section;
(7) A requirement that the director of development annually
review the information reported under division (D)(6) of this
section and verify compliance with the agreement; if the taxpayer
is in compliance, a requirement that the director issue a
certificate to the taxpayer stating that the information has been
verified and identifying the amount of the credit that may be
claimed for the taxable or calendar year;
(8) A provision providing that the taxpayer may not relocate
a substantial number of employment positions from elsewhere in
this state to the project location unless the director of
development determines that the legislative authority of the
county, township, or municipal corporation from which the
employment positions would be relocated has been notified by the
taxpayer of the relocation.
For purposes of this section, the movement of an employment
position from one political subdivision to another political
subdivision shall be considered a relocation of an employment
position unless the employment position in the first political
subdivision is replaced.
(E) If a taxpayer fails to meet or comply with any condition
or requirement set forth in a tax credit agreement, the tax credit
authority may amend the agreement to reduce the percentage or term
of the tax credit. The reduction of the percentage or term may
take effect in the current taxable or calendar year.
(F) Projects that consist solely of point-of-final-purchase
retail facilities are not eligible for a tax credit under this
section. If a project consists of both point-of-final-purchase
retail facilities and nonretail facilities, only the portion of
the project consisting of the nonretail facilities is eligible for
a tax credit and only the excess income tax revenue from the
nonretail facilities shall be considered when computing the amount
of the tax credit. If a warehouse facility is part of a
point-of-final-purchase retail facility and supplies only that
facility, the warehouse facility is not eligible for a tax credit.
Catalog distribution centers are not considered
point-of-final-purchase retail facilities for the purposes of this
division, and are eligible for tax credits under this section.
(G) Financial statements and other information submitted to
the department of development or the tax credit authority by an
applicant or recipient of a tax credit under this section, and any
information taken for any purpose from such statements or
information, are not public records subject to section 149.43 of
the Revised Code. However, the chairperson of the authority may
make use of the statements and other information for purposes of
issuing public reports or in connection with court proceedings
concerning tax credit agreements under this section. Upon the
request of the tax commissioner or, if the applicant or recipient
is an insurance company, upon the request of the superintendent of
insurance, the chairperson of the authority shall provide to the
commissioner or superintendent any statement or information
submitted by an applicant or recipient of a tax credit in
connection with the credit. The commissioner or superintendent
shall preserve the confidentiality of the statement or
information.
(H) A taxpayer claiming a credit under this section shall
submit to the tax commissioner or, if the taxpayer is an insurance
company, to the superintendent of insurance, a copy of the
director of development's certificate of verification under
division (D)(7) of this section with the taxpayer's tax report or
return for the taxable year or for the calendar year that includes
the tax period. Failure to submit a copy of the certificate with
the report or return does not invalidate a claim for a credit if
the taxpayer submits a copy of the certificate to the commissioner
or superintendent within sixty days after the commissioner or
superintendent requests it.
(I) The director of development, after consultation with the
tax commissioner and the superintendent of insurance and in
accordance with Chapter 119. of the Revised Code, shall adopt
rules necessary to implement this section. The rules may provide
for recipients of tax credits under this section to be charged
fees to cover administrative costs of the tax credit program. The
fees collected shall be credited to the tax incentive programs
operating fund created in section 122.174 of the Revised Code. At
the time the director gives public notice under division (A) of
section 119.03 of the Revised Code of the adoption of the rules,
the director shall submit copies of the proposed rules to the
chairpersons of the standing committees on economic development in
the senate and the house of representatives.
(J) For the purposes of this section, a taxpayer may include
a partnership, a corporation that has made an election under
subchapter S of chapter one of subtitle A of the Internal Revenue
Code, or any other business entity through which income flows as a
distributive share to its owners. A partnership, S-corporation, or
other such business entity may elect to pass the credit received
under this section through to the persons to whom the income or
profit of the partnership, S-corporation, or other entity is
distributed. The election shall be made on the annual report
required under division (D)(6) of this section. The election
applies to and is irrevocable for the credit for which the report
is submitted. If the election is made, the credit shall be
apportioned among those persons in the same proportions as those
in which the income or profit is distributed.
(K) If the director of development determines that a taxpayer
who has received a credit under this section is not complying with
the requirement under division (D)(3) of this section, the
director shall notify the tax credit authority of the
noncompliance. After receiving such a notice, and after giving the
taxpayer an opportunity to explain the noncompliance, the tax
credit authority may require the taxpayer to refund to this state
a portion of the credit in accordance with the following:
(1) If the taxpayer maintained operations at the project
location for a period less than or equal to the term of the
credit, an amount not exceeding one hundred per cent of the sum of
any credits allowed and received under this section;
(2) If the taxpayer maintained operations at the project
location for a period longer than the term of the credit, but less
than the greater of seven years or the term of the credit plus
three years, an amount not exceeding seventy-five per cent of the
sum of any credits allowed and received under this section.
In determining the portion of the tax credit to be refunded
to this state, the tax credit authority shall consider the effect
of market conditions on the taxpayer's project and whether the
taxpayer continues to maintain other operations in this state.
After making the determination, the authority shall certify the
amount to be refunded to the tax commissioner or superintendent of
insurance, as appropriate. If the amount is certified to the
commissioner, the commissioner shall make an assessment for that
amount against the taxpayer under Chapter 5733., 5747., or 5751.
of the Revised Code. If the amount is certified to the
superintendent, the superintendent shall make an assessment for
that amount against the taxpayer under Chapter 5725. or 5729. of
the Revised Code. The time limitations on assessments under those
chapters do not apply to an assessment under this division, but
the commissioner or superintendent, as appropriate, shall make the
assessment within one year after the date the authority certifies
to the commissioner or superintendent the amount to be refunded.
(L) On or before the first day of August each year, the
director of development shall submit a report to the governor, the
president of the senate, and the speaker of the house of
representatives on the tax credit program under this section. The
report shall include information on the number of agreements that
were entered into under this section during the preceding calendar
year, a description of the project that is the subject of each
such agreement, and an update on the status of projects under
agreements entered into before the preceding calendar year.
(M) There is hereby created the tax credit authority, which
consists of the director of development and four other members
appointed as follows: the governor, the president of the senate,
and the speaker of the house of representatives each shall appoint
one member who shall be a specialist in economic development; the
governor also shall appoint a member who is a specialist in
taxation. Of the initial appointees, the members appointed by the
governor shall serve a term of two years; the members appointed by
the president of the senate and the speaker of the house of
representatives shall serve a term of four years. Thereafter,
terms of office shall be for four years. Initial appointments to
the authority shall be made within thirty days after January 13,
1993. Each member shall serve on the authority until the end of
the term for which the member was appointed. Vacancies shall be
filled in the same manner provided for original appointments. Any
member appointed to fill a vacancy occurring prior to the
expiration of the term for which the member's predecessor was
appointed shall hold office for the remainder of that term.
Members may be reappointed to the authority. Members of the
authority shall receive their necessary and actual expenses while
engaged in the business of the authority. The director of
development shall serve as chairperson of the authority, and the
members annually shall elect a vice-chairperson from among
themselves. Three members of the authority constitute a quorum to
transact and vote on the business of the authority. The majority
vote of the membership of the authority is necessary to approve
any such business, including the election of the vice-chairperson.
The director of development may appoint a professional
employee of the department of development to serve as the
director's substitute at a meeting of the authority. The director
shall make the appointment in writing. In the absence of the
director from a meeting of the authority, the appointed substitute
shall serve as chairperson. In the absence of both the director
and the director's substitute from a meeting, the vice-chairperson
shall serve as chairperson.
(N) For purposes of the credits granted by this section
against the taxes imposed under sections 5725.18 and 5729.03 of
the Revised Code, "taxable year" means the period covered by the
taxpayer's annual statement to the superintendent of insurance.
(O) On or before the first day of January of the seventh
calendar year following the year in which ....B. ... of the 129th
general assembly became effective, the director of development
shall submit a report to the governor, the president of the
senate, and the speaker of the house of representatives on the
effect of agreements entered into under this section by the tax
credit authority in which the taxpayer included home-based
employees in the computation of income tax revenue. The report
shall include information on the number of such agreements that
were entered into in the preceding six years and a description of
the projects that were the subjects of such agreements.
Sec. 122.171. (A) As used in this section:
(1) "Capital investment project" means a plan of investment
at a project site for the acquisition, construction, renovation,
or repair of buildings, machinery, or equipment, or for
capitalized costs of basic research and new product development
determined in accordance with generally accepted accounting
principles, but does not include any of the following:
(a) Payments made for the acquisition of personal property
through operating leases;
(b) Project costs paid before January 1, 2002;
(c) Payments made to a related member as defined in section
5733.042 of the Revised Code or to a consolidated elected taxpayer
or a combined taxpayer as defined in section 5751.01 of the
Revised Code.
(2) "Eligible business" means a taxpayer and its related
members with Ohio operations satisfying all of the following:
(a) The taxpayer employs at least five hundred full-time
equivalent employees at the time the tax credit authority grants
the tax credit under this section;
(b) The taxpayer makes or causes to be made payments for the
capital investment project of either of the following:
(i) If the taxpayer is engaged at the project site primarily
as a manufacturer, at least fifty million dollars in the aggregate
at the project site during a period of three consecutive calendar
years, including the calendar year that includes a day of the
taxpayer's taxable year or tax period with respect to which the
credit is granted;
(ii) If the taxpayer is engaged at the project site primarily
in significant corporate administrative functions, as defined by
the director of development by rule, at least twenty million
dollars in the aggregate at the project site during a period of
three consecutive calendar years including the calendar year that
includes a day of the taxpayer's taxable year or tax period with
respect to which the credit is granted.
(c) The taxpayer had a capital investment project reviewed
and approved by the tax credit authority as provided in divisions
(C), (D), and (E) of this section.
(3) "Full-time equivalent employees" means the quotient
obtained by dividing the total number of hours for which employees
or home-based employees were compensated for employment in the
project by two thousand eighty. "Full-time equivalent employees"
shall exclude hours that are counted for a credit under section
122.17 of the Revised Code.
(4) "Income tax revenue" means the total amount withheld
under section 5747.06 of the Revised Code by the taxpayer during
the taxable year, or during the calendar year that includes the
tax period, from the compensation of all employees each employee
or home-based employee employed in the project whose hours of
compensation are included in calculating the number of full-time
equivalent employees.
(5) "Manufacturer" has the same meaning as in section
5739.011 of the Revised Code.
(6) "Project site" means an integrated complex of facilities
in this state, as specified by the tax credit authority under this
section, within a fifteen-mile radius where a taxpayer is
primarily operating as an eligible business.
(7) "Related member" has the same meaning as in section
5733.042 of the Revised Code as that section existed on the
effective date of its amendment by Am. Sub. H.B. 215 of the 122nd
general assembly, September 29, 1997.
(8) "Taxable year" includes, in the case of a domestic or
foreign insurance company, the calendar year ending on the
thirty-first day of December preceding the day the superintendent
of insurance is required to certify to the treasurer of state
under section 5725.20 or 5729.05 of the Revised Code the amount of
taxes due from insurance companies.
(9) "Home-based employee" has the same meaning as in section
122.17 of the Revised Code.
(B) The tax credit authority created under section 122.17 of
the Revised Code may grant tax credits under this section for the
purpose of fostering job retention in this state. Upon application
by an eligible business and upon consideration of the
recommendation of the director of budget and management, tax
commissioner, the superintendent of insurance in the case of an
insurance company, and director of development under division (C)
of this section, the tax credit authority may grant the following
credits against the tax imposed by section 5725.18, 5729.03,
5733.06, 5747.02, or 5751.02 of the Revised Code:
(1) A nonrefundable credit to an eligible business;
(2) A refundable credit to an eligible business meeting the
following conditions, provided that the director of budget and
management, tax commissioner, superintendent of insurance in the
case of an insurance company, and director of development have
recommended the granting of the credit to the tax credit authority
before July 1, 2011:
(a) The business retains at least one thousand full-time
equivalent employees at the project site.
(b) The business makes or causes to be made payments for a
capital investment project of at least twenty-five million dollars
in the aggregate at the project site during a period of three
consecutive calendar years, including the calendar year that
includes a day of the business' taxable year or tax period with
respect to which the credit is granted.
(c) In 2010, the business received a written offer of
financial incentives from another state of the United States that
the director determines to be sufficient inducement for the
business to relocate the business' operations from this state to
that state.
The credits authorized in divisions (B)(1) and (2) of this
section may be granted for a period up to fifteen taxable years
or, in the case of the tax levied by section 5751.02 of the
Revised Code, for a period of up to fifteen calendar years, except
that if home-based employees are included in the computation of
income tax revenue for purposes of the credit, the term of the
credit shall expire on or before the last day of the taxable or
calendar year ending before the beginning of the seventh year
after the effective date of ....B. ... of the 129th general
assembly. The credit amount for a taxable year or a calendar year
that includes the tax period for which a credit may be claimed
equals the income tax revenue for that year multiplied by the
percentage specified in the agreement with the tax credit
authority. The percentage may not exceed seventy-five per cent.
The credit shall be claimed in the order required under section
5725.98, 5729.98, 5733.98, 5747.98, or 5751.98 of the Revised
Code. In determining the percentage and term of the credit, the
tax credit authority shall consider both the number of full-time
equivalent employees and the value of the capital investment
project. The credit amount may not be based on the income tax
revenue for a calendar year before the calendar year in which the
tax credit authority specifies the tax credit is to begin, and the
credit shall be claimed only for the taxable years or tax periods
specified in the eligible business' agreement with the tax credit
authority. In no event shall the credit be claimed for a taxable
year or tax period terminating before the date specified in the
agreement. Any credit granted under this section against the tax
imposed by section 5733.06 or 5747.02 of the Revised Code, to the
extent not fully utilized against such tax for taxable years
ending prior to 2008, shall automatically be converted without any
action taken by the tax credit authority to a credit against the
tax levied under Chapter 5751. of the Revised Code for tax periods
beginning on or after July 1, 2008, provided that the person to
whom the credit was granted is subject to such tax. The converted
credit shall apply to those calendar years in which the remaining
taxable years specified in the agreement end.
If a nonrefundable credit allowed under division (B)(1) of
this section for a taxable year or tax period exceeds the
taxpayer's tax liability for that year or period, the excess may
be carried forward for the three succeeding taxable or calendar
years, but the amount of any excess credit allowed in any taxable
year or tax period shall be deducted from the balance carried
forward to the succeeding year or period.
(C) A taxpayer that proposes a capital investment project to
retain jobs in this state may apply to the tax credit authority to
enter into an agreement for a tax credit under this section. The
An application shall not propose to include both home-based
employees and employees who are not home-based employees in the
computation of income tax revenue or in the determination of the
number of full-time equivalent employees retained for the purposes
of the same tax credit agreement. If a taxpayer employs both
home-based employees and employees who are not home-based
employees in a project, the taxpayer shall submit separate
applications for separate tax credit agreements, one of which
shall include home-based employees in the computation of income
tax revenue and the determination of the number of full-time
equivalent employees retained, and one of which shall include all
other employees in the computation of income tax revenue and the
determination of the number of full-time equivalent employees
retained.
The director of development shall prescribe the form of the
application. After receipt of an application, the authority shall
forward copies of the application to the director of budget and
management, the tax commissioner, the superintendent of insurance
in the case of an insurance company, and the director of
development, each of whom shall review the application to
determine the economic impact the proposed project would have on
the state and the affected political subdivisions and shall submit
a summary of their determinations and recommendations to the
authority.
(D) Upon review and consideration of the determinations and
recommendations described in division (C) of this section, the tax
credit authority may enter into an agreement with the taxpayer for
a credit under this section if the authority determines all of the
following:
(1) The taxpayer's capital investment project will result in
the retention of employment in this state.
(2) The taxpayer is economically sound and has the ability to
complete the proposed capital investment project.
(3) The taxpayer intends to and has the ability to maintain
operations at the project site for at least the greater of (a) the
term of the credit plus three years, or (b) seven years.
(4) Receiving the credit is a major factor in the taxpayer's
decision to begin, continue with, or complete the project.
(E) An agreement under this section shall include all of the
following:
(1) A detailed description of the project that is the subject
of the agreement, including the amount of the investment, the
period over which the investment has been or is being made, the
number of full-time equivalent employees at the project site, and
the anticipated income tax revenue to be generated.
(2) The term of the credit, the percentage of the tax credit,
the maximum annual value of tax credits that may be allowed each
year, and the first year for which the credit may be claimed.
(3) A requirement that the taxpayer maintain operations at
the project site for at least the greater of (a) the term of the
credit plus three years, or (b) seven years.
(4) A requirement that the taxpayer retain a specified number
of full-time equivalent employees at the project site and within
this state for the term of the credit, including a requirement
that the taxpayer continue to employ at least five hundred
full-time equivalent employees during the entire term of the
agreement in the case of a credit granted under division (B)(1) of
this section, and one thousand full-time equivalent employees in
the case of a credit granted under division (B)(2) of this
section.
(5) A requirement that the taxpayer annually report to the
director of development employment, tax withholding, capital
investment, and other information the director needs to perform
the director's duties under this section.
(6) A requirement that the director of development annually
review the annual reports of the taxpayer to verify the
information reported under division (E)(5) of this section and
compliance with the agreement. Upon verification, the director
shall issue a certificate to the taxpayer stating that the
information has been verified and identifying the amount of the
credit for the taxable year or calendar year that includes the tax
period. In determining the number of full-time equivalent
employees, no position shall be counted that is filled by an
employee who is included in the calculation of a tax credit under
section 122.17 of the Revised Code.
(7) A provision providing that the taxpayer may not relocate
a substantial number of employment positions from elsewhere in
this state to the project site unless the director of development
determines that the taxpayer notified the legislative authority of
the county, township, or municipal corporation from which the
employment positions would be relocated.
For purposes of this section, the movement of an employment
position from one political subdivision to another political
subdivision shall be considered a relocation of an employment
position unless the movement is confined to the project site. The
transfer of an employment position from one political subdivision
to another political subdivision shall not be considered a
relocation of an employment position if the employment position in
the first political subdivision is replaced by another employment
position.
(8) A waiver by the taxpayer of any limitations periods
relating to assessments or adjustments resulting from the
taxpayer's failure to comply with the agreement.
(F) If a taxpayer fails to meet or comply with any condition
or requirement set forth in a tax credit agreement, the tax credit
authority may amend the agreement to reduce the percentage or term
of the credit. The reduction of the percentage or term may take
effect in the current taxable or calendar year.
(G) Financial statements and other information submitted to
the department of development or the tax credit authority by an
applicant for or recipient of a tax credit under this section, and
any information taken for any purpose from such statements or
information, are not public records subject to section 149.43 of
the Revised Code. However, the chairperson of the authority may
make use of the statements and other information for purposes of
issuing public reports or in connection with court proceedings
concerning tax credit agreements under this section. Upon the
request of the tax commissioner, or the superintendent of
insurance in the case of an insurance company, the chairperson of
the authority shall provide to the commissioner or superintendent
any statement or other information submitted by an applicant for
or recipient of a tax credit in connection with the credit. The
commissioner or superintendent shall preserve the confidentiality
of the statement or other information.
(H) A taxpayer claiming a tax credit under this section shall
submit to the tax commissioner or, in the case of an insurance
company, to the superintendent of insurance, a copy of the
director of development's certificate of verification under
division (E)(6) of this section with the taxpayer's tax report or
return for the taxable year or for the calendar year that includes
the tax period. Failure to submit a copy of the certificate with
the report or return does not invalidate a claim for a credit if
the taxpayer submits a copy of the certificate to the commissioner
or superintendent within sixty days after the commissioner or
superintendent requests it.
(I) For the purposes of this section, a taxpayer may include
a partnership, a corporation that has made an election under
subchapter S of chapter one of subtitle A of the Internal Revenue
Code, or any other business entity through which income flows as a
distributive share to its owners. A partnership, S-corporation, or
other such business entity may elect to pass the credit received
under this section through to the persons to whom the income or
profit of the partnership, S-corporation, or other entity is
distributed. The election shall be made on the annual report
required under division (E)(5) of this section. The election
applies to and is irrevocable for the credit for which the report
is submitted. If the election is made, the credit shall be
apportioned among those persons in the same proportions as those
in which the income or profit is distributed.
(J) If the director of development determines that a taxpayer
that received a tax credit under this section is not complying
with the requirement under division (E)(3) of this section, the
director shall notify the tax credit authority of the
noncompliance. After receiving such a notice, and after giving the
taxpayer an opportunity to explain the noncompliance, the
authority may terminate the agreement and require the taxpayer to
refund to the state all or a portion of the credit claimed in
previous years, as follows:
(1) If the taxpayer maintained operations at the project site
for less than or equal to the term of the credit, an amount not to
exceed one hundred per cent of the sum of any tax credits allowed
and received under this section.
(2) If the taxpayer maintained operations at the project site
longer than the term of the credit, but less than the greater of
(a) the term of the credit plus three years, or (b) seven years,
the amount required to be refunded shall not exceed seventy-five
per cent of the sum of any tax credits allowed and received under
this section.
In determining the portion of the credit to be refunded to
this state, the authority shall consider the effect of market
conditions on the taxpayer's project and whether the taxpayer
continues to maintain other operations in this state. After making
the determination, the authority shall certify the amount to be
refunded to the tax commissioner or the superintendent of
insurance. If the taxpayer is not an insurance company, the
commissioner shall make an assessment for that amount against the
taxpayer under Chapter 5733., 5747., or 5751. of the Revised Code.
If the taxpayer is an insurance company, the superintendent of
insurance shall make an assessment under section 5725.222 or
5729.102 of the Revised Code. The time limitations on assessments
under those chapters and sections do not apply to an assessment
under this division, but the commissioner or superintendent shall
make the assessment within one year after the date the authority
certifies to the commissioner or superintendent the amount to be
refunded.
(K) The director of development, after consultation with the
tax commissioner and the superintendent of insurance and in
accordance with Chapter 119. of the Revised Code, shall adopt
rules necessary to implement this section. The rules may provide
for recipients of tax credits under this section to be charged
fees to cover administrative costs of the tax credit program. The
fees collected shall be credited to the tax incentive programs
operating fund created in section 122.174 of the Revised Code. At
the time the director gives public notice under division (A) of
section 119.03 of the Revised Code of the adoption of the rules,
the director shall submit copies of the proposed rules to the
chairpersons of the standing committees on economic development in
the senate and the house of representatives.
(L) On or before the first day of August of each year, the
director of development shall submit a report to the governor, the
president of the senate, and the speaker of the house of
representatives on the tax credit program under this section. The
report shall include information on the number of agreements that
were entered into under this section during the preceding calendar
year, a description of the project that is the subject of each
such agreement, and an update on the status of projects under
agreements entered into before the preceding calendar year.
(M)(1) The aggregate amount of tax credits issued under
division (B)(1) of this section during any calendar year for
capital investment projects reviewed and approved by the tax
credit authority may not exceed the following amounts:
(a) For 2010, thirteen million dollars;
(b) For 2011 through 2023, the amount of the limit for the
preceding calendar year plus thirteen million dollars;
(c) For 2024 and each year thereafter, one hundred
ninety-five million dollars.
(2) The aggregate amount of tax credits issued under division
(B)(2) of this section during any calendar year for capital
improvement projects reviewed and approved by the tax credit
authority may not exceed eight million dollars.
The limitations in division (M) of this section do not apply
to credits for capital investment projects approved by the tax
credit authority before July 1, 2009.
(N) On or before the first day of January of the seventh
calendar year following the year in which ....B. ... of the 129th
general assembly became effective, the director of development
shall submit a report to the governor, the president of the
senate, and the speaker of the house of representatives on the
effect of agreements entered into under this section by the tax
credit authority in which the taxpayer included home-based
employees in the computation of income tax revenue. The report
shall include information on the number of such agreements that
were entered into in the preceding six years and a description of
the projects that were the subjects of such agreements.
Section 2. That existing sections 122.17 and 122.171 of the
Revised Code are hereby repealed.
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