To amend sections 5726.98, 5747.98, and 5751.98 and to enact sections 5726.58, 5747.391, and 5751.55 of the Revised Code to create a tax credit for the employment of individuals who have been convicted of criminal offenses.

Section 1. That sections 5726.98, 5747.98, and 5751.98 be amended and sections 5726.58, 5747.391, and 5751.55 of the Revised Code be enacted to read as follows:

Sec. 5726.58.  (A) As used in this section:

(1) "Qualified reforming offender" means an individual who:

(a) Has been convicted of a felony or misdemeanor under any statute of the United States or any state;

(b) Was hired by a taxpayer within one year after the conviction or, if sentenced to a term of incarceration, was hired within one year after being released from incarceration; and

(c) Is a member of a family that, in the six months immediately preceding the date of hiring, had an income that, on an annual basis, would be seventy per cent or less of the most recent lower living standard calculated by the federal bureau of labor statistics.

(2) "Family" means an individual, an individual's spouse, and children.

(3) "Wages" has the same meaning as in section 3306 of the Internal Revenue Code.

(B)(1) A nonrefundable credit is allowed against the tax imposed by section 5726.02 of the Revised Code for the wages paid by a taxpayer to a qualified reforming offender who works at least one hundred twenty hours for the taxpayer during the taxpayer's taxable year. The amount of the credit shall be calculated as follows:

(a) For each qualified reforming offender who works at least four hundred hours during the taxable year, the credit equals forty per cent of the wages paid to the qualified reforming offender, but shall not exceed two thousand four hundred dollars per qualified reforming offender.

(b) For each qualified reforming offender who works less than four hundred hours but at least one hundred twenty hours during the taxable year, the credit equals twenty-five per cent of the wages paid to the qualified reforming offender, but shall not exceed one thousand five hundred dollars per qualified reforming offender.

The credit shall be claimed in the order required under section 5726.98 of the Revised Code. The credit, to the extent it exceeds the taxpayer's tax liability for the tax year after allowance for any other credits that precede the credit under that section in that order, may be carried forward for the next five succeeding tax years, but the amount of any excess credit allowed in any such year shall be deducted from the balance carried forward to the succeeding year.

(2) A taxpayer who received federally funded payments for on-the-job training of a qualified reforming offender may not claim the credit allowed under this section for any portion of the wages paid to that qualified reforming offender.

(3) A taxpayer may not claim the credit allowed under this section for any portion of the wages paid to a qualified reforming offender for services that were the same as, or substantially similar to, services that, but for a strike or lockout, would have been performed by another employee.

(4) If a qualified reforming offender's employment is terminated during the taxable year and the qualified reforming offender was employed by the taxpayer for less than twelve months, the taxpayer may not claim the full amount of the credit allowed under this section unless the qualified reforming offender voluntarily terminated employment; was unable to continue employment due to a disability or death; or was terminated for cause. If a qualified reforming offender's employment is terminated for any other reason, the amount of the credit to which the taxpayer is entitled under this section is reduced by a percentage equal to the percentage of the taxable year that the qualified reforming offender was not employed by the taxpayer.

(C) All files, statements, returns, reports, papers, or documents of any kind relating to qualified reforming offenders or their families are not public records under section 149.43 of the Revised Code.

(D) A taxpayer that claims a credit under this section may not claim the credit allowed under section 5747.391 or 5751.55 of the Revised Code on the basis of the same qualified reforming offender.

Sec. 5726.98. (A) To provide a uniform procedure for calculating the amount of tax due under section 5726.02 of the Revised Code, a taxpayer shall claim any credits to which the taxpayer is entitled under this chapter in the following order:

(1) The bank organization assessment credit under section 5726.51 of the Revised Code;

(2) The nonrefundable job retention credit under division (B) of section 5726.50 of the Revised Code;

(3) The nonrefundable credit for purchases of qualified low-income community investments under section 5726.54 of the Revised Code;

(4) The nonrefundable credit for employers that employ qualified reforming offenders under section 5726.58 of the Revised Code;

(5) The nonrefundable credit for qualified research expenses under section 5726.56 of the Revised Code;

(5)(6) The nonrefundable credit for qualifying dealer in intangibles taxes under section 5726.57 of the Revised Code.;

(6)(7) The refundable credit for rehabilitating an historic building under section 5726.52 of the Revised Code;

(7)(8) The refundable job retention or job creation credit under division (A) of section 5726.50 of the Revised Code;

(8)(9) The refundable credit under section 5726.53 of the Revised Code for losses on loans made under the Ohio venture capital program under sections 150.01 to 150.10 of the Revised Code;

(9)(10) The refundable motion picture production credit under section 5726.55 of the Revised Code.

(B) For any credit except the refundable credits enumerated in this section, 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.

Sec. 5747.391.  (A) As used in this section:

(1) "Pass-through entity" includes a sole proprietorship.

(2) "Qualified reforming offender" means an individual who:

(a) Has been convicted of a misdemeanor or felony under any statute of the United States or any state;

(b) Was hired by a pass-through entity within one year after the conviction or, if sentenced to a term of incarceration, was hired within one year after being released from incarceration; and

(c) Is a member of a family that, in the six months immediately preceding the date of hiring, had an income that, on an annual basis, would be seventy per cent or less of the most recent lower living standard calculated by the federal bureau of labor statistics.

(3) "Family" means an individual, an individual's spouse, and children.

(4) "Wages" has the same meaning as in section 3306 of the Internal Revenue Code.

(B)(1) For taxable years beginning in 2013 or thereafter, a nonrefundable credit is allowed against the tax imposed by section 5747.02 of the Revised Code for the wages paid by a pass-through entity to a qualified reforming offender who works at least one hundred twenty hours for the pass-through entity during the entity's taxable year ending in or with the taxpayer's taxable year. The amount of the credit shall be calculated as follows:

(a) For each qualified reforming offender who works at least four hundred hours during the entity's taxable year, the credit equals forty per cent of the wages paid to the qualified reforming offender, but shall not exceed two thousand four hundred dollars per qualified reforming offender.

(b) For each qualified reforming offender who works less than four hundred hours but at least one hundred twenty hours during the entity's taxable year, the credit equals twenty-five per cent of the wages paid to the qualified reforming offender, but shall not exceed one thousand five hundred dollars per qualified reforming offender.

The amount of a taxpayer's credit is the taxpayer's proportionate share of the credit distributed by the pass-through entity. The credit shall be claimed in the order required under section 5747.98 of the Revised Code. The credit, to the extent it exceeds the taxpayer's tax liability for the taxable year after allowance for any other credits that precede the credit under that section in that order, may be carried forward for the next five succeeding taxable years, but the amount of any excess credit allowed in any such year shall be deducted from the balance carried forward to the succeeding year.

(2) A taxpayer may not claim the credit allowed under this section for any portion of the wages paid to a qualified reforming offender for whom the pass-through entity received federally funded payments for on-the-job training.

(3) A taxpayer may not claim the credit allowed under this section for any portion of the wages paid to a qualified reforming offender for services that were the same as, or substantially similar to, services that, but for a strike or lockout, would have been performed by another employee.

(4) If a qualified reforming offender's employment is terminated during the pass-through entity's taxable year ending in or with the taxpayer's taxable year and the qualified reforming offender was employed by the pass-through entity for less than twelve months, a taxpayer may not claim the full amount of the credit allowed under this section unless the qualified reforming offender voluntarily terminated employment; was unable to continue employment due to a disability or death; or was terminated for cause. If a qualified reforming offender's employment is terminated for any other reason, the amount of the credit to which the taxpayer is entitled under this section is reduced by a percentage equal to the percentage of the taxable year that the qualified reforming offender was not employed by the pass-through entity.

(C) All files, statements, returns, reports, papers, or documents of any kind relating to qualified reforming offenders or their families are not public records under section 149.43 of the Revised Code.

(D) A taxpayer who claims a credit under this section may not directly or indirectly claim the credit allowed under section 5726.58 or 5751.55 of the Revised Code on the basis of the same qualified reforming offender.

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 low-income credit under section 5747.056 of the Revised Code;

(9) The credit for displaced workers who pay for job training under section 5747.27 of the Revised Code;

(10) The campaign contribution credit under section 5747.29 of the Revised Code;

(11) The twenty-dollar personal exemption credit under section 5747.022 of the Revised Code;

(12) The joint filing credit under division (G) of section 5747.05 of the Revised Code;

(13) The nonresident credit under division (A) of section 5747.05 of the Revised Code;

(14) The credit for a resident's out-of-state income under division (B) of section 5747.05 of the Revised Code;

(15) The credit for employers that enter into agreements with child day-care centers under section 5747.34 of the Revised Code;

(16) The credit for employers that reimburse employee child care expenses under section 5747.36 of the Revised Code;

(17) The credit for adoption of a minor child under section 5747.37 of the Revised Code;

(18) The credit for purchases of lights and reflectors under section 5747.38 of the Revised Code;

(19) The nonrefundable job retention credit under division (B) of section 5747.058 of the Revised Code;

(20) The credit for selling alternative fuel under section 5747.77 of the Revised Code;

(21) 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;

(22) The job training credit under section 5747.39 of the Revised Code;

(23) The enterprise zone credit under section 5709.66 of the Revised Code;

(24) The credit for the eligible costs associated with a voluntary action under section 5747.32 of the Revised Code;

(25) The credit for employers that establish on-site child day-care centers under section 5747.35 of the Revised Code;

(26) The ethanol plant investment credit under section 5747.75 of the Revised Code;

(27) The nonrefundable credit for employers that employ qualified reforming offenders under section 5747.391 of the Revised Code;

(28) The credit for purchases of qualifying grape production property under section 5747.28 of the Revised Code;

(28)(29) The small business investment credit under section 5747.81 of the Revised Code;

(29)(30) The credit for research and development and technology transfer investors under section 5747.33 of the Revised Code;

(30)(31) The enterprise zone credits under section 5709.65 of the Revised Code;

(31)(32) The research and development credit under section 5747.331 of the Revised Code;

(32)(33) The credit for rehabilitating a historic building under section 5747.76 of the Revised Code;

(33)(34) The refundable credit for rehabilitating a historic building under section 5747.76 of the Revised Code;

(34)(35) The refundable jobs creation credit or job retention credit under division (A) of section 5747.058 of the Revised Code;

(35)(36) The refundable credit for taxes paid by a qualifying entity granted under section 5747.059 of the Revised Code;

(36)(37) The refundable credits for taxes paid by a qualifying pass-through entity granted under division (J) of section 5747.08 of the Revised Code;

(37)(38) The refundable credit under section 5747.80 of the Revised Code for losses on loans made to the Ohio venture capital program under sections 150.01 to 150.10 of the Revised Code;

(38)(39) The refundable motion picture production credit under section 5747.66 of the Revised Code.

(39)(40) The refundable credit for financial institution taxes paid by a pass-through entity granted under section 5747.65 of the Revised Code.

(B) For any credit, except the refundable credits enumerated in 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.

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

(1) "Qualified reforming offender" means an individual who:

(a) Has been convicted of a misdemeanor or felony under any statute of the United States or any state;

(b) Was hired by a taxpayer within one year after the conviction or, if sentenced to a term of incarceration, was hired within one year after being released from incarceration; and

(c) Is a member of a family that, in the six months immediately preceding the date of hiring, had an income that, on an annual basis, would be seventy per cent or less of the most recent lower living standard calculated by the federal bureau of labor statistics.

(2) "Family" means an individual, an individual's spouse, and children.

(3) "Wages" has the same meaning as in section 3306 of the Internal Revenue Code.

(B)(1) For tax periods beginning in 2013 and thereafter, a nonrefundable credit is allowed against the tax imposed by section 5751.02 of the Revised Code for the wages paid by a taxpayer to a qualified reforming offender who works at least one hundred twenty hours for the taxpayer during the calendar year. The amount of the credit shall be calculated as follows:

(a) For each qualified reforming offender who works at least four hundred hours during the calendar year, the credit equals forty per cent of the wages paid to the qualified reforming offender, but shall not exceed two thousand four hundred dollars per qualified reforming offender.

(b) For each qualified reforming offender who works less than four hundred hours but at least one hundred twenty hours during the calendar year, the credit equals twenty-five per cent of the wages paid to the qualified reforming offender, but shall not exceed one thousand five hundred dollars per qualified reforming offender.

The credit shall be claimed in the order required under section 5751.98 of the Revised Code. The credit, to the extent it exceeds a calendar year taxpayer's tax liability for the tax period after allowance for any other credits that precede the credit under that section in that order, may be carried forward for the next five succeeding tax periods. A calendar quarter taxpayer shall claim the credit for the tax period ending on the thirty-first day of December. To the extent the credit exceeds the calendar quarter taxpayer's tax liability for the tax period after allowance for any other credits that precede the credit under section 5751.98 of the Revised Code in that order, the excess may be carried forward for the next twenty-three tax periods. For all taxpayers, the amount of any excess credit allowed in any such tax period shall be deducted from the balance carried forward to the succeeding tax period.

(2) A taxpayer who received federally funded payments for on-the-job training of a qualified reforming offender may not claim the credit allowed under this section for any portion of the wages paid to that qualified reforming offender.

(3) A taxpayer may not claim the credit allowed under this section for any portion of the wages paid to a qualified reforming offender for services that were the same as, or substantially similar to, services that, but for a strike or lockout, would have been performed by another employee.

(4) If a qualified reforming offender's employment is terminated during the calendar year and the qualified reforming offender was employed by the taxpayer for less than twelve months, the taxpayer may not claim the full amount of the credit allowed under this section unless the qualified reforming offender voluntarily terminated employment; was unable to continue employment due to a disability or death; or was terminated for cause. If a qualified reforming offender's employment is terminated for any other reason, the amount of the credit to which the taxpayer is entitled under this section is reduced by a percentage equal to the percentage of the calendar year that the qualified reforming offender was not employed by the taxpayer.

(C) All files, statements, returns, reports, papers, or documents of any kind relating to qualified reforming offenders or their families are not public records under section 149.43 of the Revised Code.

(D) A taxpayer that claims a credit under this section may not claim the credit allowed under section 5726.58 or 5747.391 of the Revised Code on the basis of the same qualified reforming offender.

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 employers that employ qualified reforming offenders under section 5751.55 of the Revised Code;

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

(3)(4) 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)(5) 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)(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 sections 5726.98, 5747.98, and 5751.98 of the Revised Code are hereby repealed.

Section 3.  Section 5747.98 of the Revised Code is presented in this act as a composite of the section as amended by both Am. Sub. H.B. 386 and Am. Sub. H.B. 510 of the 129th 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.