To amend section 5751.98 and to enact section 5751.55 of the Revised Code to establish a nonrefundable commercial activity tax credit for companies involved in horizontal well drilling or related oil and gas production services that hire Ohio residents or dislocated workers who have enrolled in or completed a federally registered apprenticeship program.

Section 1. That section 5751.98 be amended and section 5751.55 of the Revised Code be enacted to read as follows:

Sec. 5751.55.  (A) As used in this section:

(1) "Owner," "horizontal well," "production operation," and "well pad" have the same meanings as in section 1509.01 of the Revised Code.

(2) "Severance" has the same meaning as in section 5749.01 of the Revised Code.

(3) "Qualifying wages" means a rate of pay that is at least two hundred fifty per cent of the federal minimum wage under 29 U.S.C. 206 or is equivalent to such rate of pay for a full-time employee.

(4) "Full-time employee" means an employee employed for at least thirty-five hours per week.

(5) "Horizontal well employer" means the owner of a horizontal well or any other person that performs a horizontal well service.

(6) "Horizontal well service" means any of the following:

(a) Operations involving the severance of natural gas, oil, or other hydrocarbons by a horizontal well, including any production operations;

(b) Preparation of the well pad or the means of access to the well pad;

(c) Transportation of equipment, materials, or supplies to the well site or of the products of the well from the well site. Transportation may include movement of such products through pipes or tubing or by any other means.

(d) Processing the raw products of the horizontal well to produce pipeline quality natural gas by separating impurities, nonmethane hydrocarbons, and fluids at the wellhead or another site;

(e) Operating or servicing equipment utilized in any horizontal well service.

(7) "Horizontal well employee" means a full-time employee of a horizontal well employer who is domiciled in this state for the purposes of Chapter 5747. of the Revised Code or who is a "dislocated worker" as defined in 29 U.S.C. 2801, and who is paid qualifying wages, is primarily employed in a horizontal well service, and is enrolled in or has completed a qualified apprenticeship program that corresponds to the appropriate horizontal well service and that is registered in accordance with 29 C.F.R. 29.3.

(B) Any horizontal well employer may claim a nonrefundable credit against the tax imposed under section 5751.02 of the Revised Code. If the horizontal well employer is a calendar quarter taxpayer, the amount of the credit shall equal two thousand five hundred dollars for each horizontal well employee hired by the horizontal well employer in the tax period preceding the tax period on the basis of which the tax is owed and employed by the horizontal well employer for the duration of the tax period on the basis of which the tax is owed. If the horizontal well employer is a calendar year taxpayer, the credit equals two thousand five hundred dollars for each horizontal well employee hired by the horizontal well employer during the calendar year on the basis of which the tax is owed and employed by the horizontal well employer for at least three consecutive months in that year.

The taxpayer shall claim the credit in the order required by section 5751.98 of the Revised Code. Any credit amount in excess of the tax due under section 5751.03 of the Revised Code, after allowing for any other credits that precede the credit under this section in the order required under that section, may not be carried forward.

Sec. 5751.98.  (A) To provide a uniform procedure for calculating the amount of tax due under this chapter, a taxpayer shall claim any credits to which it is entitled in the following order:

(1) The nonrefundable jobs retention credit under division (B) of section 5751.50 of the Revised Code;

(2) The nonrefundable credit for qualified research expenses under division (B) of section 5751.51 of the Revised Code;

(3) The nonrefundable credit for a borrower's qualified research and development loan payments under division (B) of section 5751.52 of the Revised Code;

(4) The nonrefundable credit for calendar years 2010 to 2029 for unused net operating losses under division (B) of section 5751.53 of the Revised Code;

(5) The nonrefundable credit for horizontal well employers under section 5751.55 of the Revised Code;

(6) The refundable motion picture production credit under section 5751.54 of the Revised Code;

(6)(7) The refundable jobs creation credit or job retention credit under division (A) of section 5751.50 of the Revised Code;

(7)(8) The refundable credit for calendar year 2030 for unused net operating losses under division (C) of section 5751.53 of the Revised Code.

(B) For any credit except the refundable credits enumerated in this section, the amount of the credit for a tax period 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 the credit.

Section 2.  That existing section 5751.98 of the Revised Code is hereby repealed.