Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
|
CONTENTS: |
Provides new
and expanded incentives for economic development and job creation, and makes
capital and operating appropriations |
The bill provides new and
expanded incentives for economic development and job creation, and makes
capital and operating appropriations for these purposes. Because the bill contains provisions
affecting a number of subjects, this fiscal note is divided into the following
five sections:
1.
Summary
of Appropriations
2.
Development
and Advanced Energy
3.
Transportation
and Public Works
4.
Ohio
Innovation Partnership Co-op/Internship Program
5.
Historical
Rehabilitation Tax Credit
Summary
of Capital Appropriations
|
STATE FUND |
FY 2009-FY 2010 Biennium |
FY 2011-FY 2012 Biennium |
|
Advanced Energy R&D Taxable Fund (Fund 7004) |
$9,000,000 |
Up to $56,000,000 subject to General Assembly
appropriations |
|
Advanced Energy R&D Fund (Fund 7005) |
$19,000,000 |
|
|
State Capital Improvements Fund (Fund 7038) |
$120,000,000 |
-
0 - |
|
Local Infrastructure Development Fund (Fund 7039) |
-
0 - |
$80,000,000
subject to General Assembly appropriations |
|
TOTAL |
$148,000,000 |
$136,000,000 |
·
The
bill makes capital appropriations of $148 million for the
FY 2009-FY 2010 biennium through the proceeds of bonds issued by the
Public Works Commission and the Treasurer of State for local infrastructure
projects, state capital improvements, and advanced energy projects.
·
The
bill declares the intent of the Governor to propose and the intent of the
General Assembly to make future capital appropriations of up to
$56 million in FY 2011 and FY 2012 from the Advanced Energy
Research & Development Fund (Fund 7004) and the Advanced Energy Research
& Development Taxable Fund (Fund 7005).
·
The
bill declares the intent of the Governor to propose and the intent of the
General Assembly to make a future capital appropriation of $80 million in
FY 2012 from the Local Infrastructure Development Fund (Fund 7039). This appropriation is to be supported by a
cash transfer of $80.0 million from the Jobs Fund (Fund 5Z30).
|
STATE FUND |
FY 2009 |
FY 2010 |
FY 2011 |
|
Coal
Research & Development Fund (Fund 7046) |
$66,000,000 |
- 0 - |
- 0 - |
|
Jobs
Fund (Fund 5Z30) |
$60,000,000 |
$60,000,000 subject to General Assembly appropriations |
$30,000,000 subject to General Assembly appropriations |
|
Logistics
and Distribution Infrastructure Fund (Fund 7008) |
$50,000,000 |
$25,000,000 subject to General Assembly appropriations
|
$25,000,000 subject to General Assembly appropriations |
|
TOTAL |
$176,000,000 |
$85,000,000 |
$55,000,000 |
·
The
bill makes supplemental operating appropriations of $176 million in
FY 2009 using the proceeds of bonds issued by the Public Facilities
Commission and the Treasurer of State to fund the activities of the Coal
Research & Development Fund (Fund 7046) and the Logistics and Distribution
Infrastructure Fund (Fund 7008), and cash from the liquidation of the Ohio
Tobacco Prevention Foundation Endowment Fund to support the Jobs Fund (Fund
5Z30).
·
The
bill declares the intent of the Governor to propose and the intent of the
General Assembly to make operating appropriations totaling $85 million in
FY 2010 and $55 million in FY 2011 from the Jobs Fund and the
Logistics and Distribution Infrastructure Fund.
|
STATE FUND |
FY 2009 |
FY 2010 |
FUTURE YEARS |
|
General Revenue Fund |
|||
|
Revenues |
- 0 - |
Potential loss of
$7.2 million from reduced liquor profit transfers |
Potential loss of
$12.2 million in FY 2011 and up to $17.1 million annually
thereafter from reduced liquor profit transfers |
|
Expenditures |
- 0 - |
- 0 - |
- 0 - |
|
Liquor Control Fund (Fund
7043) – Department of Commerce |
|||
|
Revenues |
- 0 - |
- 0 - |
- 0 - |
|
Expenditures |
- 0 - |
Potential increase of
$7.2 million for debt service |
Potential increase of
$12.2 million in FY 2011 and up to $17.1 million annually
thereafter for debt service |
|
Jobs
Fund (Fund 5Z30) – Department of Development |
|||
|
Revenues |
- 0 - |
- 0 - |
- 0 - |
|
Expenditures |
$60 million for
bioproducts and biomedical development |
Potential increase of
$60 million, subject to General Assembly appropriations |
Potential increase of
$30 million in FY 2011, subject to General Assembly appropriations |
|
|
|
|
Transfer-out of
$80 million to the Local Infrastructure Development Fund in FY 2011 |
|
Logistics and Distribution
Infrastructure Fund (Fund 7008 – New Fund) – Department of Development |
|||
|
Revenues |
Gain of $50 million |
Potential gain of
$25 million or more, subject to General Assembly appropriations and loan
repayments |
Potential gain of
$25 million or more in FY 2011, subject to General Assembly
appropriations and loan repayments |
|
Expenditures |
Increase for loans to
eligible projects |
Potential increase of
$25 million or more, subject to General Assembly appropriations |
Potential increase of
$25 million or more in FY 2011, subject to General Assembly
appropriations |
|
Economic
Development Financing Operating Fund (Fund 4510) – Department of Development Third
Frontier Research and Development Fund (Fund 7011) |
|||
|
Revenues |
- 0 - |
- 0 - |
- 0 - |
|
Expenditures |
Potential minimal increase
in administrative costs |
Potential minimal increase
|
Potential minimal increase
|
|
Facilities Establishment Fund (Fund 7037) –
Department of Development |
|||
|
Revenues |
Gain from
advanced energy loan repayments |
Gain from
advanced energy loan repayments |
Gain from
advanced energy loan repayments through FY 2011 |
|
Expenditures |
- 0 - |
- 0 - |
- 0 - |
|
Coal
Research and Development Fund (Fund 7046) – Air Quality Development Authority
(OAQDA) |
|||
|
Revenues |
Gain of up to
$66 million |
- 0 - |
- 0 - |
|
Expenditures |
Increase of up to
$66 million |
- 0 - |
- 0 - |
|
Advanced
Energy Research & Development Taxable Fund (Fund 7004 – New Fund) – OAQDA |
|||
|
Revenues |
Gain of up to
$9 million |
Potential gain, subject to
General Assembly appropriations |
|
|
Expenditures |
Increase of up to
$9 million |
Potential gain, subject to
General Assembly appropriations |
|
|
Advanced
Energy Research & Development Fund (Fund 7005 – New Fund) – OAQDA |
|||
|
Revenues |
Gain of up to
$19 million |
Potential gain, subject to
General Assembly appropriations |
|
|
Expenditures |
Increase of up to
$19 million |
Potential gain, subject to
General Assembly appropriations |
|
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2009 is July 1, 2008 – June 30, 2009.
Department of Development
Logistics and Distribution
Infrastructure Fund (Fund 7008)
·
The
bill establishes the Logistics and Distribution Infrastructure Fund (Fund 7008)
with an appropriation of $50 million in FY 2009 from proceeds of
bonds issued by the Treasurer of State.
·
The
Logistics and Distribution Infrastructure Fund will provide loans and loan
guarantees to eligible transportation logistics and distribution infrastructure
projects.
·
The
bill declares the intent of the Governor to propose and the General Assembly to
approve appropriations of $25 million each in FY 2010 and
FY 2011 to the Logistics and Distribution Infrastructure Fund.
Jobs Fund (Fund 5Z30)
·
The
bill appropriates $60 million in FY 2009 for the Ohio Bioproducts
Development Program and the Ohio Biomedical Development Program.
·
The
bill declares the intent of the Governor to propose and the General Assembly to
approve appropriations of $60 million in FY 2010 and $30 million
in FY 2011 for the bioproducts and biomedical development programs.
·
The
bill declares the intent of the Governor to propose and the General Assembly to
approve the requirement of a cash transfer of $80 million to the Local
Infrastructure Development Fund (Fund 7039).
·
The
bill abolishes the Jobs Fund by requiring a transfer of any remaining cash
balance to the GRF at the end of FY 2011.
Other Department of
Development funds
·
The
Economic Development Financing Operating Fund (Fund 4510) may incur minimal
additional administrative costs related to the Logistics and Distribution
Infrastructure Fund loan program.
·
The
Third Frontier Research and Development Fund (Fund 7011) may incur minimal
additional administrative costs related to the Third Frontier Economic Stimulus
Advisory Board, the Ohio Bioproducts Development Program, and the Ohio
Biomedical Development Program.
·
The
Facilities Establishment Fund (Fund 7037) may gain revenues from repayment of
loans issued under the Advanced Energy Research and Development Taxable Fund
(Fund 7004).
Ohio Air Quality Development
Authority (OAQDA)
·
The
bill authorizes the Ohio Public Facilities Commission (OPFC) to issue up to
$66 million of general obligation bonds with the proceeds appropriated to
the Coal Research and Development Fund (Fund 7046).
·
The
bill creates the Advanced Energy Research & Development Taxable Fund (Fund
7004) with an appropriation of $9 million for the
FY 2009-FY 2010 capital biennium, and the Advanced Energy Research
& Development Fund (Fund 7005) with an appropriation of $19 million
for the FY 2009-FY 2010 capital biennium.
·
The
bill states the intent of the Governor to propose and the General Assembly to
approve up to $56 million across both Fund 7004 and Fund 7005 for the
FY 2011-FY 2012 capital biennium.
Debt Service—Liquor Profits
·
Backing
the bonds issued for advanced energy and logistics distribution infrastructure
projects using liquor profits will reduce the amounts available for transfer to
the GRF by an estimated $7.2 million in FY 2010, $12.2 million
in FY 2011, and up to $17.1 million annually thereafter. The increased debt service will be paid from
the Liquor Control Fund (Fund 7043).
|
|
Department of Development
Logistics and Distribution Infrastructure
Fund (Fund 7008)
The bill adds eligible
logistics and distribution projects to the list of activities qualified for
funding using the proceeds from bonds issued by the Treasurer of State under
Chapter 166. of the Revised Code.
Eligible projects are defined as those that involve establishing,
expanding, or making certain improvements to the logistics and distribution
infrastructure for ground, air, and water transportation systems. The bill creates the Logistics and
Distribution Infrastructure Fund (Fund 7008) to receive these bond proceeds and
provide loans and loan guarantees to eligible entities. The bill also specifies that loan repayments
and recovery of loan guarantees are to be credited to the fund.
The bill grants the
Department of Development (DOD) the authority to issue loans from the Logistics
and Distribution Infrastructure Fund to entities for allowable logistics and
distribution infrastructure costs. The
bill requires the Director of Development to submit the terms of proposed loans
to the Development Financing Advisory Council (DFAC) for recommendations, and
requires Controlling Board approval before the loans are issued.
Of the $184 million in
Chapter 166. bond proceeds contemplated under the bill, the bill limits the
amount to be used for eligible logistics and distribution infrastructure
projects to $100 million between FY 2009 and FY 2011. The bill establishes appropriation item
195698, Logistics and Distribution Infrastructure, in Fund 7008 with an
appropriation of $50 million in FY 2009 for the purposes of the
Logistics and Distribution Infrastructure loan program. The bill also states the intent of the
Governor to propose, and the General Assembly to enact, future appropriations
to the Logistics and Distribution Infrastructure Fund of $25 million in
FY 2010 and $25 million in FY 2011.
DOD may incur some new costs
for administering the Logistics and Distribution Infrastructure loan
program. These expenses are paid from
the Economic Development Financing Operating Fund (Fund 4510). Moneys are placed in this fund through transfers
from the Facilities Establishment Fund (Fund 7037) and are used for the administrative
costs of all Chapter 166. programs. The
FY 2009 appropriation for this purpose is approximately $2.5 million.
Third Frontier Commission
Third Frontier Economic
Stimulus Advisory Board
The bill creates the Third
Frontier Economic Stimulus Advisory Board to provide advice to the Third
Frontier Commission on issues of bioproducts and biomedical technology. The Board is to consist of experts in the
bioproduct and biomedical fields to be appointed by the Governor and the
leadership of the General Assembly. The
bill requires the members of the Board to serve without compensation, but
provides for them to be reimbursed for expenses incurred in their capacity as
Board members. The bill also requires
DOD to provide office space for the Board.
Jobs Fund (Fund 5Z30) –
bioproduct and biomedical development programs
The bill lays out the
allowable uses for the Jobs Fund (Fund 5Z30), created in Sub. H.B. 544 of
the 127th General Assembly. H.B. 544
requires the Treasurer of State to liquidate the Tobacco Prevention Foundation
Endowment Fund and deposit the proceeds of approximately $230 million from
the liquidation into the newly established Jobs Fund. Of this total, the bill appropriates $60 million in
FY 2009 and states the intent of the General Assembly to appropriate an
additional $60 million in FY 2010 and $30 million in
FY 2011 for the Ohio Bioproducts Development Program and the Ohio
Biomedical Development Program, both of which will be administered by the Third
Frontier Commission within the Department of Development. These programs will provide loans, loan
guarantees, and grants to nonprofit or for-profit entities to develop and
commercialize products in their respective sectors through their own efforts or
by collaborating with other entities.
The bill requires Controlling Board approval of all awards under these
programs.
The bill provides funding
for the Ohio Bioproducts Development Program by establishing appropriation item
195694, JF Bioproducts, in the Jobs Fund at a level of $20 million in
FY 2009. These funds will provide
financial assistance to eligible entities for the innovation, development, and
commercialization of products such as biopolymers, chemicals, and advanced
materials that use biomaterials and renewable agricultural resources. The bill declares the intent of the Governor
to propose and the General Assembly to approve appropriations of an additional
$20.0 million in FY 2010 and $10 million in FY 2011 for the
Bioproducts Development Program.
The bill provides funding for
the Ohio Biomedical Development Program by establishing appropriation item
195695, JF Biomedical, in the Jobs Fund at a level of $40 million in
FY 2009. These funds will provide
financial assistance to eligible entities for the innovation, development, and
commercialization in the biomedical and biotechnological arena, including
developing medical devices, diagnostics and informatics applications, and new
therapies and drugs. The bill declares
the intent of the Governor to propose and the General Assembly to approve
appropriations of an additional $40.0 million in FY 2010 and
$20 million in FY 2011 for the Biomedical Development Program.
The bill requires that the
Jobs Fund be abolished by June 30, 2011, and requires the Director of Budget
and Management to transfer any remaining cash balance to the GRF at that time.
Administrative costs
As the Ohio Bioproducts
Development Program, the Ohio Biomedical Development Program, and the Economic
Stimulus Advisory Board are under the control of the Third Frontier Commission,
their associated administrative costs will presumably be paid out of the Third
Frontier Research and Development Fund (Fund 7011), through DOD appropriation
item 195686, Third Frontier Operating. This
line item currently provides funding for the costs of administering the various
Third Frontier programs using a portion of the proceeds of nontaxable bonds
issued by the Ohio Public Facilities Commission. The FY 2009 appropriation for line item 195686 is
approximately $1.9 million.
Ohio Air Quality Development
Authority
Advanced energy research and
development funds
The bill creates two new
funds, the Advanced Energy Research and Development Taxable Fund (Fund 7004)
and the Advanced Energy Research and Development Fund (Fund 7005), to receive
the proceeds of obligations issued pursuant to section 166.08 of the Revised
Code. Appropriation amounts for the
FY 2009-FY 2010 biennium are $9 million for Fund 7004 and
$19 million for Fund 7005. Moneys
in these two funds are to be used by the Ohio Air Quality Development Authority
(OAQDA) to provide loans and grants for purposes of paying allowable costs of
eligible advanced energy projects. Any
repayment of loans made from Fund 7004 is to be credited to the Facilities
Establishment Fund (Fund 7037) in the Department of Development. The bill also includes intent language
declaring the intent to appropriate up to $56 million for the
FY 2011-FY 2012 biennium for advanced energy projects and projects
that use sustainable energy resources.
The bill limits the total principal amount of obligations to be issued
for eligible advanced energy projects to $84 million.
Coal Research and Development Fund (Fund
7046)
The bill authorizes the Ohio
Public Facilities Commission to sell up to $66 million in general
obligation bonds. The proceeds of the
bond sale are to be credited to the Coal Research and Development Fund (Fund
7046). The funds are to be used by the
Director of the Ohio Coal Development Office to make loans, guarantee loans,
and grants for coal research and development projects.
Debt service – reduced GRF transfers from
excess liquor profits
The debt service for the
bonds issued to fund the advanced energy and logistics and distribution
infrastructure projects will be paid for by excess liquor profits. Liquor profits currently pay for state
liquor law enforcement, alcoholism treatment, alcohol testing, and the
retirement of economic development and Clean Ohio revitalization bonds. After these expenses have been paid, the
excess is transferred to the GRF. Such
GRF transfers are estimated to total $165 million for FY 2008. The debt service, which will be paid out of
the Department of Commerce's Liquor Control Fund (Fund 7043), will reduce the
amounts available for transfer to the GRF.
According to Office of
Budget and Management (OBM) estimates, the added debt service costs for bonds
issued for advanced energy and logistics and distribution infrastructure
projects will be approximately $7.2 million in FY 2010,
$12.2 million in FY 2011, and up to $17.1 million annually
thereafter, reducing the annual GRF transfers by these amounts. Because of the additional debt that will be
incurred and retired using liquor profits, the bill increases the amount of
liquor profits that may be used for such purposes each fiscal year from
$45 million to $63 million.
Current debt service appropriations for economic development loan
programs are $33.7 million for FY 2008 and $38.6 million for FY 2009.
|
STATE FUND |
FY 2009 |
FY 2010 |
FUTURE YEARS |
|
Highway Capital
Improvement Fund (Fund 7042) – Department of Transportation |
|||
|
Revenues |
- 0 - |
Potential gain of
$100 million from bond proceeds |
Potential gain of
$100 million from bond proceeds in FY 2011 |
|
Expenditures |
- 0 - |
Potential increase of
$100 million, subject to General Assembly appropriations |
Potential increase of
$100 million in FY 2011, subject to General Assembly appropriations |
|
Highway Operating Fund
(Fund 7002) – Department of Transportation |
|||
|
Revenues |
- 0 - |
Potential gain of up to
$20 million from the cash deposit made by the Ohio Turnpike Commission |
Potential gain of up to
$20 million annually from the cash deposits made by the Ohio Turnpike
Commission |
|
Expenditures |
- 0 - |
Potential increase of
$100 million for transfers to PWC, subject to General Assembly
appropriations |
Potential increase of
$100 million for transfers to PWC in FY 2011, subject to General
Assembly appropriations |
|
Ohio Turnpike Commission |
|||
|
Revenues |
- 0 - |
- 0 - |
- 0 - |
|
Expenditures |
- 0 - |
Potential increase of up
to $20 million for deposit to the state treasury to the credit of
Highway Operating Fund (Fund 7002) |
Potential increase of up
to $20 million annually for deposits to the state treasury to the credit
of Highway Operating Fund (Fund 7002) |
|
Local Transportation
Improvement Program Fund (Fund 7052) – Public Works Commission |
|||
|
Revenues |
- 0 - |
Potential gain of
$100 million from ODOT transfers, subject to General Assembly
appropriations |
Potential gain of
$100 million from ODOT transfers in FY 2011, subject to General
Assembly appropriations |
|
Expenditures |
- 0 - |
Potential increase of
$100 million for local road and bridge costs, subject to General
Assembly appropriations |
Potential increase of $100 million
for local road and bridge costs in FY 2011, subject to General Assembly
appropriations |
|
Local
Infrastructure Development Fund (Fund 7039 – New Fund) – Public Works
Commission |
|||
|
Revenues |
- 0 - |
- 0 - |
Potential
gain of $80 million in FY 2012, subject to General Assembly
appropriations |
|
Expenditures |
- 0 - |
- 0 - |
Potential
increase of $80 million in FY 2012 for local infrastructure
projects, subject to General Assembly appropriations |
|
State
Capital Improvements Fund (Fund 7038) – Public Works Commission |
|||
|
Revenues |
Gain of up to
$120 million |
- 0 - |
|
|
Expenditures |
Increase of up to
$120 million |
- 0 - |
|
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2009 is July 1, 2008 – June 30, 2009.
Local capital improvement projects
·
The
bill provides $120 million in capital bond funding for the
FY 2009-FY 2010 biennium in the State Capital Improvements Fund (Fund
7038) for the Public Works Commission (PWC) for the State Capital Improvement
Program, which finances or assists in the financing of local subdivision
capital improvement projects.
Local infrastructure
development
·
The
bill creates the Local Infrastructure Development Fund (Fund 7039) to be used
by PWC to provide grants for local infrastructure development and local
subdivision capital improvement projects.
Revenue for the fund is intended to come from cash transfers from the
Jobs Fund (Fund 5Z30) totaling $80 million, subject to appropriation by
the General Assembly in FY 2012.
Road and bridge projects
·
The
bill declares the intent of the Governor to propose and the intent of the
General Assembly to appropriate $100 million in FY 2010 and another
$100 million in FY 2011 for PWC's Local Transportation Improvement
Program, which provides direct grants from the Local Transportation Improvement
Program Fund (Fund 7042) for local road and bridge projects. These appropriations are to be supported by
periodic transfers of cash from the Highway Operating Fund (Fund 7002).
ODOT highway capital
facilities and projects
·
To
replace the funding lost through the transfers to PWC, the bill declares the
intent of the Governor to propose and the intent of the General Assembly to
appropriate $100 million in FY 2010 and $100 million in
FY 2012 from the Highway Capital Improvement Fund (Fund 7042) for ODOT
highway capital facilities and projects.
These appropriations are supported by the proceeds of general obligation
bonds issued under Article VIII, section 2m of the Ohio Constitution.
Turnpike payments
·
The
bill requires the Ohio Turnpike Commission (OTC) to deposit up to
$20 million annually to the state treasury to the credit of the Highway
Operating Fund via an agreement between OTC, OBM, and ODOT that must be entered
into by September 30, 2008 and must terminate by December 31, 2030.
|
|
Additional State Capital Improvement Program bonding authority
The bill authorizes the issuance of an
additional $120 million in bonds for the Public Works Commission (PWC) to
finance or assist in the financing of local subdivision capital improvement
projects through the State Capital Improvement Program (SCIP) in the
FY 2009-FY 2010 biennium.
SCIP uses infrastructure bond proceeds to provide grants and loans to
local governments for improvement of their infrastructure systems. Each year approximately $120 million in
bonds are issued to provide funding for the grants and loans. Eligible projects include improvements to
roads, bridges, culverts, water supply systems, wastewater systems, storm water
collection systems, and solid waste disposal systems.
Bond issuing authority for
SCIP had been provided in Section 2m, Article VIII of the Ohio
Constitution. The last issuance in the
fall of 2007 exhausted all the bonding authority under that section. The bill provides additional SCIP funding by
designating unused bonding authority under Section 2p of Article VIII, Ohio
Constitution, which was passed by voters in November 2005. Section 2p allows for the issuance of
obligations that could have been issued in prior fiscal years, but were
not.
Local Infrastructure Development Fund
The bill creates the Local
Infrastructure Development Fund (Fund 7039) to be used by PWC to provide grants
for local infrastructure development as well as for eligible local capital
improvement projects under SCIP, which are outlined above. The bill declares the intent of the Governor
to propose and the intent of the General Assembly to appropriate
$80 million in FY 2012 from Fund 7039. Revenue for the fund is intended to come from cash transfers totaling
$80.0 million from the Jobs Fund (Fund 5Z30). By the end of FY 2013, or as soon as possible thereafter,
the Director of the Public Works Commission must notify the Director of
Budget and Management that all projects funded by the Local Infrastructure
Development Fund have been completed.
Once this notification has occurred, the Director of Budget and
Management is to transfer the cash balance remaining in the Local
Infrastructure Development Fund to the GRF, after which the Local
Infrastructure Development Fund is abolished.
Local Transportation Improvement Program
The bill declares the intent
of the Governor to propose and the intent of the General Assembly to
appropriate $100 million in FY 2010 and another $100 million in
FY 2011 for use by PWC for the Local Transportation Improvement Program
(LTIP), which provides direct grants for local road and bridge costs. The
normal source of funding for LTIP is one cent of the motor fuel tax, which
generates approximately $65 million to $67 million per year. Periodic transfers of cash from the Highway
Operating Fund (Fund 7002) to the Local Transportation Improvement Program Fund
(Fund 7052) support the new intended appropriations.
In order to prevent Ohio
Department of Transportation (ODOT) operations from being impacted by the
transfer of funds out of the Highway Operating Fund, the bill declares the
intent of the Governor to propose and the intent of the General Assembly to
appropriate $100 million in FY 2010 and $100 million in FY 2011
for highway capital facilities and projects from the Highway Capital
Improvement Fund (Fund 7042). These
intended appropriations are to be supported by the issuance of general
obligation bonds, which are retired with state motor fuel tax revenues.
To offset ODOT's debt
service cost increases for these bonds, the bill requires the Ohio Turnpike
Commission (OTC) to deposit into the state treasury to the credit of the
Highway Operating Fund an annual amount to be determined by OBM, but not
exceeding $20 million in each calendar year. The obligation to make those payments is to be established by an
agreement between OTC, OBM, and ODOT.
The agreement must be entered into by September 30, 2008 and must
terminate no later than December 31, 2030.
|
STATE FUND |
FY 2009 |
FY 2010 |
FUTURE YEARS |
|
General Revenue Fund |
|||
|
Revenues |
- 0 - |
- 0 - |
|
|
Expenditures |
- 0 - |
Potential increase of
$50 million per fiscal year from |
|
|
General Funds of State
Institutions of Higher Education |
|||
|
Revenues |
- 0 - |
Potential gain of
$50 million per fiscal year from |
|
|
Expenditures |
- 0 - |
- 0 - |
- 0 - |
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2008 is July 1, 2007 – June 30, 2008.
·
The
bill states the intent of the Governor to propose and the intent of the General
Assembly to appropriate a minimum of $50 million in each fiscal year from
FY 2010 through FY 2014 for the Ohio Innovation Partnership
Co-op/Internship Program. The Program
awards grants to higher education institutions for cooperative education and
internship programs. Establishment and
administration of the Program as well as support of the Co-op/Internship
Program Advisory Committee, created by the bill, may increase the Board of
Regents' administrative costs.
|
|
Ohio Innovation Partnership Co-op/Internship
Program
The bill requires that the
Chancellor of the Board of Regents (BOR) establish and administer the
Co-op/Internship Program as part of the Ohio Innovation Partnership. Under this program, the Chancellor awards
grants to Ohio higher education institutions to support cooperative (co-op)
education and internship programs, which are partnerships between students,
higher education institutions, and employers that include both academic and
work or community service experiences.
As part of the establishment and administration of the Program, the bill
requires the Chancellor to adopt rules; establish a competitive process for making
awards; determine, subject to approval of the Controlling Board, which
proposals receive awards and the amount of each award each fiscal year; monitor
each awardee for fiscal accountability, operating progress, and desired
outcomes; and report to the General Assembly annually beginning on December 31,
2010, on the academic and economic impact of the Program. These requirements may increase BOR's
administrative costs.
The bill requires that state
institutions of higher education wishing to participate in the Program submit
proposals to the Chancellor. Proposed
programs may be implemented in collaboration with other higher education
institutions, both public and nonpublic.
The bill requires a 100% match of private funds for undergraduate
programs and a 150% match for graduate programs, although the Chancellor may
waive this requirement under certain conditions. Program awardees must enter into agreements with the Chancellor
and the Chancellor may require the awardees to repay the award plus interest if
it violates the agreement.
The bill creates the
Co-op/Internship Program Advisory Committee, consisting of 16 members. The committee is responsible for advising
the Chancellor on various aspects of the Program. Under the bill, committee members serve without compensation, the
Chancellor provides meeting space for the committee, and the Chancellor's staff
assists the committee in its duties.
This provision of the bill may increase BOR's administrative costs.
The bill states the intent
of the Governor to propose and the intent of the General Assembly to
appropriate a minimum of $50 million in each fiscal year from FY 2010
through FY 2014 for the program.
·
The
bill eliminates the July 1, 2008 through June 30, 2009 application period for
the historic rehabilitation tax credit and adds two additional application
periods: July 1, 2009 through June 30,
2010 and July 1, 2010 through June 30, 2011.
·
The
bill limits the aggregate amount of tax credits approved to $60 million
for each application period, replacing the current limit of 100 applications
per application period.
·
The
bill limits the amount of tax credit allowed for a certificate owner under the
three taxes to $5 million per taxpayer.
It also allows any unused credit under the personal income tax or
dealers in intangibles tax to be carried forward for not more than five years.
·
The
GRF will share 94.1% of any change in revenues from the personal income tax and
corporate franchise tax, 37.5% of any change in revenue from the dealers in
intangibles tax paid by nonqualifying dealers, and all of any change in revenue
from the dealers in intangibles tax paid by qualifying dealers.
·
The
Local Government Fund will share 3.68% of any change in revenues from the
personal income tax and corporate franchise tax and the Library and Local
Government Support Fund will share 2.22% of any change in revenues from the
personal income tax and corporate franchise tax.
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Under current law (Am. Sub.
H.B. 149, 126th General Assembly), a refundable tax credit is available against
the corporate franchise tax, personal income tax, and the dealers in
intangibles tax for rehabilitating historic buildings. In order to qualify for the tax credit
for rehabilitating historic buildings, the building must be either listed on
the national register of historic places, or it must be located in a certified
historic district. Taxpayers may apply
for credits during two credit application periods: from July 1, 2007 through June 30, 2008 and from July 1, 2008
through June 30, 2009. The number of
applications approved is limited to 100 per application period.
The bill eliminates the July
1, 2008 through June 30, 2009 application period for the historic
rehabilitation tax credit and adds two new application periods: July 1, 2009 through June 20, 2010 and July
1, 2010 through June 30, 2011. The
aggregate amount of tax credits approved is limited to $60 million for
each of the two new application periods, replacing the current limit of 100
applications per application period.
The amount of tax credit allowed for a certificate owner under the three
taxes is limited to $5 million per taxpayer.
The bill makes the credits
applied against the personal income tax and the dealers in intangibles tax
nonrefundable, but allows the credits applied against the corporate franchise
tax to remain refundable. Any unused
credit under the personal income tax or dealers in intangibles tax may be carried
forward for not more than five years.
Additionally, the bill requires the Director of Development to consider
the potential economic impact and the regional distributive balance of the
credits throughout the state and specifies that state agencies, political
subdivisions, and nonprofit corporations cannot apply for or receive tax
credits.
Eliminating the tax credit
for the second application period may increase tax revenues compared to current
law and establishing new application periods may decrease tax revenues. Any change in revenue from the personal
income tax and the corporate franchise tax will be shared by the GRF and the
two local government funds supported by the GRF. The GRF will share 94.1% of any change in personal income or
corporate franchise tax revenue, the Local Government Fund (LGF) will share
3.68%, and the Library and Local Government Support Fund (LLGSF) will share
2.22%. The GRF will share 37.5%
(three-eighths) of any change in revenue from the dealers in intangibles tax on
nonqualifying dealers and will bear all of any change in revenue from the
dealers in intangibles tax on qualifying dealers.[1] The dealers in intangibles tax paid by
nonqualifying dealers is distributed to the GRF and the County Undivided Local
Government Fund (CULGF). The CULGF
generally receives 62.5% of revenues from the tax on nonqualifying dealers in
intangibles. However, the tax credits
will not reduce the amounts credited to the CULGF, so the tax credits will only
be applied against amounts credited to the GRF. Thus, local governments will not incur losses from tax credits
applied against the dealers in intangibles tax.
LSC fiscal staff: Brian Hoffmeister, Budget Analyst
Jason Phillips, Budget Analyst
Mary E. Morris, Budget Analyst
Jean J. Botomogno, Senior Economist
SB0335IN.doc/lb
[1] A qualifying dealer is a
dealer in intangibles that is a member of a controlled group of which a
financial institution or insurance company is also a member. The dealers in intangibles tax paid by
qualifying dealers is credited to the General Revenue Fund.