Bill Text: OH HB101 | 2011-2012 | 129th General Assembly | Introduced

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Bill Title: To provide for a six-year trial period in which taxpayers may include a limited number of the taxpayer's employees who work from home and whose rate of pay is at least three times the federal minimum wage as employees employed in the project for purposes of the job creation and retention credits if the recipient of the credit provides a specified level of capital investment, and to require the Director of Development to issue a report at the end of the six-year period.

Spectrum: Moderate Partisan Bill (Democrat 9-2)

Status: (Introduced - Dead) 2011-02-15 - To Ways & Means [HB101 Detail]

Download: Ohio-2011-HB101-Introduced.html

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As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 101

Representative Williams 

Cosponsors: Representatives Fende, Pillich, Combs, Derickson, Gentile, Weddington, Goyal, Slesnick, Milkovich, Antonio 

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A BILL

To amend sections 122.17 and 122.171 of the Revised

1

Code to provide for a six-year trial period in

2

which taxpayers may include a limited number of

3

the taxpayer's employees who work from home and

4

whose rate of pay is at least three times the

5

federal minimum wage as employees employed in the

6

project for purposes of the job creation and

7

retention credits if the recipient of the credit

8

provides a specified level of capital investment,

9

and to require the Director of Development to

10

issue a report at the end of the six-year period.

11

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 122.17 and 122.171 of the Revised	12
Code be amended to read as follows:	13

Sec. 122.17.  (A) As used in this section:

14

(1) "Income tax revenue" means the total amount withheld	15
under section 5747.06 of the Revised Code by the taxpayer during	16
the taxable year, or during the calendar year that includes the	17
tax period, from the compensation of each employee employed in the	18
project to the extent the employee's withholdings are not used to	19
determine the credit under section 122.171 of the Revised Code.	20
"Income tax revenue" excludes amounts withheld before the day the	21
taxpayer becomes eligible for the credit. For taxable or calendar	22
years ending before the beginning of the seventh year after the	23
effective date of ....B. .... of the 129th general assembly, an	24
"employee employed in the project" includes an employee whose	25
services are performed primarily from the employee's residence in	26
this state exclusively for the benefit of the project and whose	27
rate of pay is at least three hundred per cent of the minimum	28
hourly rate established by the "Fair Labor Standards Act of 1938,"	29
52 Stat. 1060, 29 U.S.C. 201, et seq., as amended, provided that	30
the number of such employees whose tax withholdings are includable	31
in "income tax revenue" shall not exceed ten per cent of the total	32
number of employees employed by the taxpayer in the project.	33

(2) "Baseline income tax revenue" means income tax revenue	34
except that the applicable withholding period is the twelve months	35
immediately preceding the date the tax credit authority approves	36
the taxpayer's application multiplied by the sum of one plus an	37
annual pay increase factor to be determined by the tax credit	38
authority. If the taxpayer becomes eligible for the credit after	39
the first day of the taxpayer's taxable year or after the first	40
day of the calendar year that includes the tax period, the	41
taxpayer's baseline income tax revenue for the first such taxable	42
or calendar year of credit eligibility shall be reduced in	43
proportion to the number of days during the taxable or calendar	44
year for which the taxpayer was not eligible for the credit. For	45
subsequent taxable or calendar years, "baseline income tax	46
revenue" equals the unreduced baseline income tax revenue for the	47
preceding taxable or calendar year multiplied by the sum of one	48
plus the pay increase factor.	49

(3) "Excess income tax revenue" means income tax revenue	50
minus baseline income tax revenue.	51

(B) The tax credit authority may make grants under this	52
section to foster job creation in this state. Such a grant shall	53
take the form of a refundable credit allowed against the tax	54
imposed by section 5725.18, 5729.03, 5733.06, or 5747.02 or levied	55
under Chapter 5751. of the Revised Code. The credit shall be	56
claimed for the taxable years or tax periods specified in the	57
taxpayer's agreement with the tax credit authority under division	58
(D) of this section. With respect to taxes imposed under section	59
5733.06 or 5747.02 or Chapter 5751. of the Revised Code, the	60
credit shall be claimed in the order required under section	61
5733.98, 5747.98, or 5751.98 of the Revised Code. The amount of	62
the credit available for a taxable year or for a calendar year	63
that includes a tax period equals the excess income tax revenue	64
for that year multiplied by the percentage specified in the	65
agreement with the tax credit authority. Any credit granted under	66
this section against the tax imposed by section 5733.06 or 5747.02	67
of the Revised Code, to the extent not fully utilized against such	68
tax for taxable years ending prior to 2008, shall automatically be	69
converted without any action taken by the tax credit authority to	70
a credit against the tax levied under Chapter 5751. of the Revised	71
Code for tax periods beginning on or after July 1, 2008, provided	72
that the person to whom the credit was granted is subject to such	73
tax. The converted credit shall apply to those calendar years in	74
which the remaining taxable years specified in the agreement end.	75

(C) A taxpayer or potential taxpayer who proposes a project	76
to create new jobs in this state may apply to the tax credit	77
authority to enter into an agreement for a tax credit under this	78
section. The director of development shall prescribe the form of	79
the application. After receipt of an application, the authority	80
may enter into an agreement with the taxpayer for a credit under	81
this section if it determines all of the following:	82

(1) The taxpayer's project will increase payroll and income	83
tax revenue;	84

(2) The taxpayer's project is economically sound and will	85
benefit the people of this state by increasing opportunities for	86
employment and strengthening the economy of this state;	87

(3) Receiving the tax credit is a major factor in the	88
taxpayer's decision to go forward with the project;	89

(4) If the taxpayer intends to include employees whose	90
services are performed primarily at the employee's residence in	91
the computation of income tax revenue, the taxpayer meets one of	92
the capital investment project requirements described under	93
division (A)(2)(b) of section 122.171 of the Revised Code as	94
applicable to the taxpayer.	95

(D) An agreement under this section shall include all of the	96
following:	97

(1) A detailed description of the project that is the subject	98
of the agreement;	99

(2) The term of the tax credit, which shall not exceed	100
fifteen years, and the first taxable year, or first calendar year	101
that includes a tax period, for which the credit may be claimed;	102

(3) A requirement that the taxpayer shall maintain operations	103
at the project location for at least the greater of seven years or	104
the term of the credit plus three years;	105

(4) The percentage, as determined by the tax credit	106
authority, of excess income tax revenue that will be allowed as	107
the amount of the credit for each taxable year or for each	108
calendar year that includes a tax period;	109

(5) The pay increase factor to be applied to the taxpayer's	110
baseline income tax revenue;	111

(6) A requirement that the taxpayer annually shall report to	112
the director of development employment, tax withholding,	113
investment, and other information the director needs to perform	114
the director's duties under this section;	115

(7) A requirement that the director of development annually	116
review the information reported under division (D)(6) of this	117
section and verify compliance with the agreement; if the taxpayer	118
is in compliance, a requirement that the director issue a	119
certificate to the taxpayer stating that the information has been	120
verified and identifying the amount of the credit that may be	121
claimed for the taxable or calendar year;	122

(8) A provision providing that the taxpayer may not relocate	123
a substantial number of employment positions from elsewhere in	124
this state to the project location unless the director of	125
development determines that the legislative authority of the	126
county, township, or municipal corporation from which the	127
employment positions would be relocated has been notified by the	128
taxpayer of the relocation.	129

For purposes of this section, the movement of an employment	130
position from one political subdivision to another political	131
subdivision shall be considered a relocation of an employment	132
position unless the employment position in the first political	133
subdivision is replaced.	134

(E) If a taxpayer fails to meet or comply with any condition	135
or requirement set forth in a tax credit agreement, the tax credit	136
authority may amend the agreement to reduce the percentage or term	137
of the tax credit. The reduction of the percentage or term may	138
take effect in the current taxable or calendar year.	139

(F) Projects that consist solely of point-of-final-purchase	140
retail facilities are not eligible for a tax credit under this	141
section. If a project consists of both point-of-final-purchase	142
retail facilities and nonretail facilities, only the portion of	143
the project consisting of the nonretail facilities is eligible for	144
a tax credit and only the excess income tax revenue from the	145
nonretail facilities shall be considered when computing the amount	146
of the tax credit. If a warehouse facility is part of a	147
point-of-final-purchase retail facility and supplies only that	148
facility, the warehouse facility is not eligible for a tax credit.	149
Catalog distribution centers are not considered	150
point-of-final-purchase retail facilities for the purposes of this	151
division, and are eligible for tax credits under this section.	152

(G) Financial statements and other information submitted to	153
the department of development or the tax credit authority by an	154
applicant or recipient of a tax credit under this section, and any	155
information taken for any purpose from such statements or	156
information, are not public records subject to section 149.43 of	157
the Revised Code. However, the chairperson of the authority may	158
make use of the statements and other information for purposes of	159
issuing public reports or in connection with court proceedings	160
concerning tax credit agreements under this section. Upon the	161
request of the tax commissioner or, if the applicant or recipient	162
is an insurance company, upon the request of the superintendent of	163
insurance, the chairperson of the authority shall provide to the	164
commissioner or superintendent any statement or information	165
submitted by an applicant or recipient of a tax credit in	166
connection with the credit. The commissioner or superintendent	167
shall preserve the confidentiality of the statement or	168
information.	169

(H) A taxpayer claiming a credit under this section shall	170
submit to the tax commissioner or, if the taxpayer is an insurance	171
company, to the superintendent of insurance, a copy of the	172
director of development's certificate of verification under	173
division (D)(7) of this section with the taxpayer's tax report or	174
return for the taxable year or for the calendar year that includes	175
the tax period. Failure to submit a copy of the certificate with	176
the report or return does not invalidate a claim for a credit if	177
the taxpayer submits a copy of the certificate to the commissioner	178
or superintendent within sixty days after the commissioner or	179
superintendent requests it.	180

(I) The director of development, after consultation with the	181
tax commissioner and the superintendent of insurance and in	182
accordance with Chapter 119. of the Revised Code, shall adopt	183
rules necessary to implement this section. The rules may provide	184
for recipients of tax credits under this section to be charged	185
fees to cover administrative costs of the tax credit program. The	186
fees collected shall be credited to the tax incentive programs	187
operating fund created in section 122.174 of the Revised Code. At	188
the time the director gives public notice under division (A) of	189
section 119.03 of the Revised Code of the adoption of the rules,	190
the director shall submit copies of the proposed rules to the	191
chairpersons of the standing committees on economic development in	192
the senate and the house of representatives.	193

(J) For the purposes of this section, a taxpayer may include	194
a partnership, a corporation that has made an election under	195
subchapter S of chapter one of subtitle A of the Internal Revenue	196
Code, or any other business entity through which income flows as a	197
distributive share to its owners. A partnership, S-corporation, or	198
other such business entity may elect to pass the credit received	199
under this section through to the persons to whom the income or	200
profit of the partnership, S-corporation, or other entity is	201
distributed. The election shall be made on the annual report	202
required under division (D)(6) of this section. The election	203
applies to and is irrevocable for the credit for which the report	204
is submitted. If the election is made, the credit shall be	205
apportioned among those persons in the same proportions as those	206
in which the income or profit is distributed.	207

(K) If the director of development determines that a taxpayer	208
who has received a credit under this section is not complying with	209
the requirement under division (D)(3) of this section, the	210
director shall notify the tax credit authority of the	211
noncompliance. After receiving such a notice, and after giving the	212
taxpayer an opportunity to explain the noncompliance, the tax	213
credit authority may require the taxpayer to refund to this state	214
a portion of the credit in accordance with the following:	215

(1) If the taxpayer maintained operations at the project	216
location for a period less than or equal to the term of the	217
credit, an amount not exceeding one hundred per cent of the sum of	218
any credits allowed and received under this section;	219

(2) If the taxpayer maintained operations at the project	220
location for a period longer than the term of the credit, but less	221
than the greater of seven years or the term of the credit plus	222
three years, an amount not exceeding seventy-five per cent of the	223
sum of any credits allowed and received under this section.	224

In determining the portion of the tax credit to be refunded	225
to this state, the tax credit authority shall consider the effect	226
of market conditions on the taxpayer's project and whether the	227
taxpayer continues to maintain other operations in this state.	228
After making the determination, the authority shall certify the	229
amount to be refunded to the tax commissioner or superintendent of	230
insurance, as appropriate. If the amount is certified to the	231
commissioner, the commissioner shall make an assessment for that	232
amount against the taxpayer under Chapter 5733., 5747., or 5751.	233
of the Revised Code. If the amount is certified to the	234
superintendent, the superintendent shall make an assessment for	235
that amount against the taxpayer under Chapter 5725. or 5729. of	236
the Revised Code. The time limitations on assessments under those	237
chapters do not apply to an assessment under this division, but	238
the commissioner or superintendent, as appropriate, shall make the	239
assessment within one year after the date the authority certifies	240
to the commissioner or superintendent the amount to be refunded.	241

(L) On or before the first day of August each year, the	242
director of development shall submit a report to the governor, the	243
president of the senate, and the speaker of the house of	244
representatives on the tax credit program under this section. The	245
report shall include information on the number of agreements that	246
were entered into under this section during the preceding calendar	247
year, a description of the project that is the subject of each	248
such agreement, and an update on the status of projects under	249
agreements entered into before the preceding calendar year.	250

(M) There is hereby created the tax credit authority, which	251
consists of the director of development and four other members	252
appointed as follows: the governor, the president of the senate,	253
and the speaker of the house of representatives each shall appoint	254
one member who shall be a specialist in economic development; the	255
governor also shall appoint a member who is a specialist in	256
taxation. Of the initial appointees, the members appointed by the	257
governor shall serve a term of two years; the members appointed by	258
the president of the senate and the speaker of the house of	259
representatives shall serve a term of four years. Thereafter,	260
terms of office shall be for four years. Initial appointments to	261
the authority shall be made within thirty days after January 13,	262
1993. Each member shall serve on the authority until the end of	263
the term for which the member was appointed. Vacancies shall be	264
filled in the same manner provided for original appointments. Any	265
member appointed to fill a vacancy occurring prior to the	266
expiration of the term for which the member's predecessor was	267
appointed shall hold office for the remainder of that term.	268
Members may be reappointed to the authority. Members of the	269
authority shall receive their necessary and actual expenses while	270
engaged in the business of the authority. The director of	271
development shall serve as chairperson of the authority, and the	272
members annually shall elect a vice-chairperson from among	273
themselves. Three members of the authority constitute a quorum to	274
transact and vote on the business of the authority. The majority	275
vote of the membership of the authority is necessary to approve	276
any such business, including the election of the vice-chairperson.	277

The director of development may appoint a professional	278
employee of the department of development to serve as the	279
director's substitute at a meeting of the authority. The director	280
shall make the appointment in writing. In the absence of the	281
director from a meeting of the authority, the appointed substitute	282
shall serve as chairperson. In the absence of both the director	283
and the director's substitute from a meeting, the vice-chairperson	284
shall serve as chairperson.	285

(N) For purposes of the credits granted by this section	286
against the taxes imposed under sections 5725.18 and 5729.03 of	287
the Revised Code, "taxable year" means the period covered by the	288
taxpayer's annual statement to the superintendent of insurance.	289

(O) On or before the first day of January of the seventh	290
calendar year following the year in which ....B. .... of the 129th	291
general assembly became effective, the director of development	292
shall submit a report to the governor, the president of the	293
senate, and the speaker of the house of representatives on the	294
effect of agreements entered into under this section by the tax	295
credit authority in which the taxpayer included employees whose	296
services were performed primarily from the employee's residence in	297
the computation of income tax revenue. The report shall include	298
information on the number of such agreements that were entered	299
into in the preceding six years, the number of employees whose	300
services are performed primarily from the employee's residence	301
compared to the total number of employees covered by such	302
agreements, and a description of the projects that were the	303
subjects of such agreements.	304

Sec. 122.171. (A) As used in this section:

305

(1) "Capital investment project" means a plan of investment	306
at a project site for the acquisition, construction, renovation,	307
or repair of buildings, machinery, or equipment, or for	308
capitalized costs of basic research and new product development	309
determined in accordance with generally accepted accounting	310
principles, but does not include any of the following:	311

(a) Payments made for the acquisition of personal property	312
through operating leases;	313

(b) Project costs paid before January 1, 2002;

314

(c) Payments made to a related member as defined in section	315
5733.042 of the Revised Code or to a consolidated elected taxpayer	316
or a combined taxpayer as defined in section 5751.01 of the	317
Revised Code.	318

(2) "Eligible business" means a taxpayer and its related	319
members with Ohio operations satisfying all of the following:	320

(a) The taxpayer employs at least five hundred full-time	321
equivalent employees at the time the tax credit authority grants	322
the tax credit under this section;	323

(b) The taxpayer makes or causes to be made payments for the	324
capital investment project of either of the following:	325

(i) If the taxpayer is engaged at the project site primarily	326
as a manufacturer, at least fifty million dollars in the aggregate	327
at the project site during a period of three consecutive calendar	328
years, including the calendar year that includes a day of the	329
taxpayer's taxable year or tax period with respect to which the	330
credit is granted;	331

(ii) If the taxpayer is engaged at the project site primarily	332
in significant corporate administrative functions, as defined by	333
the director of development by rule, at least twenty million	334
dollars in the aggregate at the project site during a period of	335
three consecutive calendar years including the calendar year that	336
includes a day of the taxpayer's taxable year or tax period with	337
respect to which the credit is granted.	338

(c) The taxpayer had a capital investment project reviewed	339
and approved by the tax credit authority as provided in divisions	340
(C), (D), and (E) of this section.	341

(3) "Full-time equivalent employees" means the quotient	342
obtained by dividing the total number of hours for which employees	343
were compensated for employment in the project by two thousand	344
eighty. "Full-time equivalent employees" shall exclude hours that	345
are counted for a credit under section 122.17 of the Revised Code.	346

(4) "Income tax revenue" means the total amount withheld	347
under section 5747.06 of the Revised Code by the taxpayer during	348
the taxable year, or during the calendar year that includes the	349
tax period, from the compensation of all employees employed in the	350
project whose hours of compensation are included in calculating	351
the number of full-time equivalent employees. For taxable or	352
calendar years ending before the beginning of the seventh year	353
after the effective date of ....B. .... of the 129th general	354
assembly, an "employee employed in the project" includes an	355
employee whose services are performed primarily from the	356
employee's residence in this state exclusively for the benefit of	357
the project and whose rate of pay is at least three hundred per	358
cent of the minimum hourly rate established by the "Fair Labor	359
Standards Act of 1938," 52 Stat. 1060, 29 U.S.C. 201, et seq., as	360
amended, provided that the number of such employees whose tax	361
withholdings are includable in "income tax revenue" shall not	362
exceed ten per cent of the total number of employees employed by	363
the taxpayer in the project.	364

(5) "Manufacturer" has the same meaning as in section	365
5739.011 of the Revised Code.	366

(6) "Project site" means an integrated complex of facilities	367
in this state, as specified by the tax credit authority under this	368
section, within a fifteen-mile radius where a taxpayer is	369
primarily operating as an eligible business.	370

(7) "Related member" has the same meaning as in section	371
5733.042 of the Revised Code as that section existed on the	372
effective date of its amendment by Am. Sub. H.B. 215 of the 122nd	373
general assembly, September 29, 1997.	374

(8) "Taxable year" includes, in the case of a domestic or	375
foreign insurance company, the calendar year ending on the	376
thirty-first day of December preceding the day the superintendent	377
of insurance is required to certify to the treasurer of state	378
under section 5725.20 or 5729.05 of the Revised Code the amount of	379
taxes due from insurance companies.	380

(B) The tax credit authority created under section 122.17 of	381
the Revised Code may grant tax credits under this section for the	382
purpose of fostering job retention in this state. Upon application	383
by an eligible business and upon consideration of the	384
recommendation of the director of budget and management, tax	385
commissioner, the superintendent of insurance in the case of an	386
insurance company, and director of development under division (C)	387
of this section, the tax credit authority may grant to an eligible	388
business a nonrefundable credit against the tax imposed by section	389
5725.18, 5729.03, 5733.06, or 5747.02 of the Revised Code for a	390
period up to fifteen taxable years and against the tax levied by	391
Chapter 5751. of the Revised Code for a period of up to fifteen	392
calendar years. The credit amount for a taxable year or a calendar	393
year that includes the tax period for which a credit may be	394
claimed equals the income tax revenue for that year multiplied by	395
the percentage specified in the agreement with the tax credit	396
authority. The percentage may not exceed seventy-five per cent.	397
The credit shall be claimed in the order required under section	398
5725.98, 5729.98, 5733.98, or 5747.98 of the Revised Code. In	399
determining the percentage and term of the credit, the tax credit	400
authority shall consider both the number of full-time equivalent	401
employees and the value of the capital investment project. The	402
credit amount may not be based on the income tax revenue for a	403
calendar year before the calendar year in which the tax credit	404
authority specifies the tax credit is to begin, and the credit	405
shall be claimed only for the taxable years or tax periods	406
specified in the eligible business' agreement with the tax credit	407
authority. In no event shall the credit be claimed for a taxable	408
year or tax period terminating before the date specified in the	409
agreement. Any credit granted under this section against the tax	410
imposed by section 5733.06 or 5747.02 of the Revised Code, to the	411
extent not fully utilized against such tax for taxable years	412
ending prior to 2008, shall automatically be converted without any	413
action taken by the tax credit authority to a credit against the	414
tax levied under Chapter 5751. of the Revised Code for tax periods	415
beginning on or after July 1, 2008, provided that the person to	416
whom the credit was granted is subject to such tax. The converted	417
credit shall apply to those calendar years in which the remaining	418
taxable years specified in the agreement end.	419

Any unused portion of a tax credit may be carried forward for	420
not more than three additional years after the year for which the	421
credit is granted.	422

(C) A taxpayer that proposes a capital investment project to	423
retain jobs in this state may apply to the tax credit authority to	424
enter into an agreement for a tax credit under this section. The	425
director of development shall prescribe the form of the	426
application. After receipt of an application, the authority shall	427
forward copies of the application to the director of budget and	428
management, the tax commissioner, the superintendent of insurance	429
in the case of an insurance company, and the director of	430
development, each of whom shall review the application to	431
determine the economic impact the proposed project would have on	432
the state and the affected political subdivisions and shall submit	433
a summary of their determinations and recommendations to the	434
authority.	435

(D) Upon review of the determinations and recommendations	436
described in division (C) of this section, the tax credit	437
authority may enter into an agreement with the taxpayer for a	438
credit under this section if the authority determines all of the	439
following:	440

(1) The taxpayer's capital investment project will result in	441
the retention of employment in this state.	442

(2) The taxpayer is economically sound and has the ability to	443
complete the proposed capital investment project.	444

(3) The taxpayer intends to and has the ability to maintain	445
operations at the project site for at least the greater of (a) the	446
term of the credit plus three years, or (b) seven years.	447

(4) Receiving the credit is a major factor in the taxpayer's	448
decision to begin, continue with, or complete the project.	449

(E) An agreement under this section shall include all of the	450
following:	451

(1) A detailed description of the project that is the subject	452
of the agreement, including the amount of the investment, the	453
period over which the investment has been or is being made, the	454
number of full-time equivalent employees at the project site, and	455
the anticipated income tax revenue to be generated.	456

(2) The term of the credit, the percentage of the tax credit,	457
the maximum annual value of tax credits that may be allowed each	458
year, and the first year for which the credit may be claimed.	459

(3) A requirement that the taxpayer maintain operations at	460
the project site for at least the greater of (a) the term of the	461
credit plus three years, or (b) seven years.	462

(4) A requirement that the taxpayer retain a specified number	463
of full-time equivalent employees at the project site and within	464
this state for the term of the credit, including a requirement	465
that the taxpayer continue to employ at least five hundred	466
full-time equivalent employees during the entire term of the	467
agreement.	468

(5) A requirement that the taxpayer annually report to the	469
director of development employment, tax withholding, capital	470
investment, and other information the director needs to perform	471
the director's duties under this section.	472

(6) A requirement that the director of development annually	473
review the annual reports of the taxpayer to verify the	474
information reported under division (E)(5) of this section and	475
compliance with the agreement. Upon verification, the director	476
shall issue a certificate to the taxpayer stating that the	477
information has been verified and identifying the amount of the	478
credit for the taxable year or calendar year that includes the tax	479
period. In determining the number of full-time equivalent	480
employees, no position shall be counted that is filled by an	481
employee who is included in the calculation of a tax credit under	482
section 122.17 of the Revised Code.	483

(7) A provision providing that the taxpayer may not relocate	484
a substantial number of employment positions from elsewhere in	485
this state to the project site unless the director of development	486
determines that the taxpayer notified the legislative authority of	487
the county, township, or municipal corporation from which the	488
employment positions would be relocated.	489

For purposes of this section, the movement of an employment	490
position from one political subdivision to another political	491
subdivision shall be considered a relocation of an employment	492
position unless the movement is confined to the project site. The	493
transfer of an employment position from one political subdivision	494
to another political subdivision shall not be considered a	495
relocation of an employment position if the employment position in	496
the first political subdivision is replaced by another employment	497
position.	498

(8) A waiver by the taxpayer of any limitations periods	499
relating to assessments or adjustments resulting from the	500
taxpayer's failure to comply with the agreement.	501

(F) If a taxpayer fails to meet or comply with any condition	502
or requirement set forth in a tax credit agreement, the tax credit	503
authority may amend the agreement to reduce the percentage or term	504
of the credit. The reduction of the percentage or term may take	505
effect in the current taxable or calendar year.	506

(G) Financial statements and other information submitted to	507
the department of development or the tax credit authority by an	508
applicant for or recipient of a tax credit under this section, and	509
any information taken for any purpose from such statements or	510
information, are not public records subject to section 149.43 of	511
the Revised Code. However, the chairperson of the authority may	512
make use of the statements and other information for purposes of	513
issuing public reports or in connection with court proceedings	514
concerning tax credit agreements under this section. Upon the	515
request of the tax commissioner, or the superintendent of	516
insurance in the case of an insurance company, the chairperson of	517
the authority shall provide to the commissioner or superintendent	518
any statement or other information submitted by an applicant for	519
or recipient of a tax credit in connection with the credit. The	520
commissioner or superintendent shall preserve the confidentiality	521
of the statement or other information.	522

(H) A taxpayer claiming a tax credit under this section shall	523
submit to the tax commissioner or, in the case of an insurance	524
company, to the superintendent of insurance, a copy of the	525
director of development's certificate of verification under	526
division (E)(6) of this section with the taxpayer's tax report or	527
return for the taxable year or for the calendar year that includes	528
the tax period. Failure to submit a copy of the certificate with	529
the report or return does not invalidate a claim for a credit if	530
the taxpayer submits a copy of the certificate to the commissioner	531
or superintendent within sixty days after the commissioner or	532
superintendent requests it.	533

(I) For the purposes of this section, a taxpayer may include	534
a partnership, a corporation that has made an election under	535
subchapter S of chapter one of subtitle A of the Internal Revenue	536
Code, or any other business entity through which income flows as a	537
distributive share to its owners. A partnership, S-corporation, or	538
other such business entity may elect to pass the credit received	539
under this section through to the persons to whom the income or	540
profit of the partnership, S-corporation, or other entity is	541
distributed. The election shall be made on the annual report	542
required under division (E)(5) of this section. The election	543
applies to and is irrevocable for the credit for which the report	544
is submitted. If the election is made, the credit shall be	545
apportioned among those persons in the same proportions as those	546
in which the income or profit is distributed.	547

(J) If the director of development determines that a taxpayer	548
that received a tax credit under this section is not complying	549
with the requirement under division (E)(3) of this section, the	550
director shall notify the tax credit authority of the	551
noncompliance. After receiving such a notice, and after giving the	552
taxpayer an opportunity to explain the noncompliance, the	553
authority may terminate the agreement and require the taxpayer to	554
refund to the state all or a portion of the credit claimed in	555
previous years, as follows:	556

(1) If the taxpayer maintained operations at the project site	557
for less than or equal to the term of the credit, an amount not to	558
exceed one hundred per cent of the sum of any tax credits allowed	559
and received under this section.	560

(2) If the taxpayer maintained operations at the project site	561
longer than the term of the credit, but less than the greater of	562
(a) the term of the credit plus three years, or (b) seven years,	563
the amount required to be refunded shall not exceed seventy-five	564
per cent of the sum of any tax credits allowed and received under	565
this section.	566

In determining the portion of the credit to be refunded to	567
this state, the authority shall consider the effect of market	568
conditions on the taxpayer's project and whether the taxpayer	569
continues to maintain other operations in this state. After making	570
the determination, the authority shall certify the amount to be	571
refunded to the tax commissioner or the superintendent of	572
insurance. If the taxpayer is not an insurance company, the	573
commissioner shall make an assessment for that amount against the	574
taxpayer under Chapter 5733., 5747., or 5751. of the Revised Code.	575
If the taxpayer is an insurance company, the superintendent of	576
insurance shall make an assessment under section 5725.222 or	577
5729.102 of the Revised Code. The time limitations on assessments	578
under those chapters and sections do not apply to an assessment	579
under this division, but the commissioner or superintendent shall	580
make the assessment within one year after the date the authority	581
certifies to the commissioner or superintendent the amount to be	582
refunded.	583

(K) The director of development, after consultation with the	584
tax commissioner and the superintendent of insurance and in	585
accordance with Chapter 119. of the Revised Code, shall adopt	586
rules necessary to implement this section. The rules may provide	587
for recipients of tax credits under this section to be charged	588
fees to cover administrative costs of the tax credit program. The	589
fees collected shall be credited to the tax incentive programs	590
operating fund created in section 122.174 of the Revised Code. At	591
the time the director gives public notice under division (A) of	592
section 119.03 of the Revised Code of the adoption of the rules,	593
the director shall submit copies of the proposed rules to the	594
chairpersons of the standing committees on economic development in	595
the senate and the house of representatives.	596

(L) On or before the first day of August of each year, the	597
director of development shall submit a report to the governor, the	598
president of the senate, and the speaker of the house of	599
representatives on the tax credit program under this section. The	600
report shall include information on the number of agreements that	601
were entered into under this section during the preceding calendar	602
year, a description of the project that is the subject of each	603
such agreement, and an update on the status of projects under	604
agreements entered into before the preceding calendar year.	605

(M) The aggregate amount of tax credits issued under this	606
section during any calendar year for capital investment projects	607
reviewed and approved by the tax credit authority may not exceed	608
the following amounts:	609

(1) For 2010, thirteen million dollars;

610

(2) For 2011 through 2023, the amount of the limit for the	611
preceding calendar year plus thirteen million dollars;	612

(3) For 2024 and each year thereafter, one hundred	613
ninety-five million dollars.	614

The foregoing annual limitations do not apply to credits for	615
capital investment projects approved by the tax credit authority	616
before July 1, 2009.	617

(N) On or before the first day of January of the seventh	618
calendar year following the year in which ....B. .... of the 129th	619
general assembly became effective, the director of development	620
shall submit a report to the governor, the president of the	621
senate, and the speaker of the house of representatives on the	622
effect of agreements entered into under this section by the tax	623
credit authority in which the taxpayer included employees whose	624
services were performed primarily from the employee's residence in	625
the computation of income tax revenue. The report shall include	626
information on the number of such agreements that were entered	627
into in the preceding six years, the number of employees whose	628
services are performed primarily from the employee's residence	629
compared to the total number of employees covered by such	630
agreements, and a description of the projects that were the	631
subjects of such agreements.	632

Section 2. That existing sections 122.17 and 122.171 of the	633
Revised Code are hereby repealed.	634