Bill Text: OH HB136 | 2013-2014 | 130th General Assembly | Introduced

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Bill Title: To authorize the Third Frontier Commission to award grants related to the establishment and operation of data centers and the development of a high speed fiber optic network in the state, and to authorize a kilowatt-hour excise tax reduction for electric distribution companies supplying such centers at a discounted rate.

Sponsorship: Slight Partisan Bill (Republican 12-7)

Status: (Introduced - Dead) 2013-04-18 - To Public Utilities [HB136 Detail]

Download: Ohio-2013-HB136-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 136

Representative Schuring 

Cosponsors: Representatives Grossman, Cera, Duffey, Fedor, Lynch, Henne, Clyde, Stinziano, Adams, J., Smith, Antonio, Rosenberger, Hagan, C., Gonzales, O'Brien, Butler, Romanchuk, Celebrezze 

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A BILL

To amend sections 184.19 and 5727.81 and to enact

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section 184.05 of the Revised Code to authorize

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the Third Frontier Commission to award grants

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related to the establishment and operation of data

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centers and the development of a high speed fiber

5

optic network in the state, and to authorize a

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kilowatt-hour excise tax reduction for electric

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distribution companies supplying such centers at a

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discounted rate.

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

Section 1. That sections 184.19 and 5727.81 be amended and	10
section 184.05 of the Revised Code be enacted to read as follows:	11

Sec. 184.05. (A) As used in this section:

12

(1) "Data center" means a facility that is primarily used to	13
house tangible personal property that is or will be used in	14
providing data center services.	15

(2) "Data center services" means electronic information	16
services as defined in section 5739.01 of the Revised Code or any	17
similar services, as may be further determined by the third	18
frontier commission. "Data center services" does not include	19
electronic publishing as defined in section 5739.01 of the Revised	20
Code.	21

(3) "Eligible partnership" means a partnership between a	22
for-profit business entity and a state institution of higher	23
education or a nonpublic university or college.	24

(4) "Nonpublic university or college" has the same meaning as	25
in section 3333.71 of the Revised Code.	26

(5) "State institution of higher education" has the same	27
meaning as in section 3345.011 of the Revised Code.	28

(B) The data center development grant program is hereby	29
created to promote the establishment of data centers in the state.	30
The third frontier commission shall award grants on a competitive	31
basis to eligible partnerships for the establishment and operation	32
of data centers. The amount awarded to a single eligible	33
partnership shall not exceed five million dollars. The total	34
amount of grants awarded under the program shall not exceed fifty	35
million dollars. Grants shall be made from the third frontier	36
research and development fund created under section 184.19 of the	37
Revised Code.	38

(C) The data center high speed fiber optic network grant	39
program is hereby created to promote the development of a high	40
speed fiber optic network in the state and to assist in the	41
provision of high speed fiber optics to data centers. The third	42
frontier commission shall award grants to persons that provide	43
high speed fiber optics to a data center that has been or will be	44
established in this state with the assistance of a grant awarded	45
under division (B) of this section. The total amount of grants	46
awarded under the program shall not exceed twenty-five million	47
dollars. Grants shall be made from the third frontier research and	48
development fund created under section 184.19 of the Revised Code.	49

(D) The third frontier commission shall adopt rules under	50
Chapter 119. of the Revised Code that are necessary for the	51
administration of the data center development grant program and	52
the data center high speed fiber optic network grant program. The	53
rules shall establish all of the following:	54

(1) Specific eligibility criteria for grant applicants;

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(2) A definition of what constitutes "high speed fiber	56
optics" for purposes of the data center high speed fiber optic	57
network grant program;	58

(3) Forms and procedures by which eligible applicants may	59
apply for grants under this section;	60

(4) Criteria for reviewing, evaluating, and ranking	61
applications, and for approving applications from eligible	62
applicants that best serve the goals of the data center	63
development grant program and the data center high speed fiber	64
optic network grant program;	65

(5) Reporting requirements and monitoring procedures;

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(6) Any other rules necessary to implement and administer the	67
grant programs.	68

(E) An eligible applicant that receives a grant under the	69
data center development grant program or the data center high	70
speed fiber optic network grant program is not precluded from	71
being considered for or participating in other financial	72
assistance programs offered by the department of development.	73

Sec. 184.19.  The third frontier research and development	74
fund is hereby created in the state treasury. The fund shall	75
consist of the net proceeds of the obligations issued and sold by	76
the issuing authority pursuant to sections 151.01 and 151.10 of	77
the Revised Code. Investment earnings of the fund shall be	78
credited to the fund. Moneys in the fund shall be used in	79
accordance with sections 184.05, 184.10 to 184.18, and 184.20 of	80
the Revised Code and for associated administrative expenses.	81

Sec. 5727.81.  (A) For the purpose of raising revenue for	82
public education and state and local government operations, an	83
excise tax is hereby levied and imposed on an electric	84
distribution company for all electricity distributed by such	85
company at the following rates per kilowatt hour of electricity	86
distributed in a thirty-day period by the company through a meter	87
of an end user in this state:	88

	KILOWATT HOURS DISTRIBUTED		RATE PER		89
	TO AN END USER		KILOWATT HOUR		90
	For the first 2,000		$.00465		91
	For the next 2,001 to 15,000		$.00419		92
	For 15,001 and above		$.00363		93

If no meter is used to measure the kilowatt hours of	94
electricity distributed by the company, the rates shall apply to	95
the estimated kilowatt hours of electricity distributed to an	96
unmetered location in this state.	97

The electric distribution company shall base the monthly tax	98
on the kilowatt hours of electricity distributed to an end user	99
through the meter of the end user that is not measured for a	100
thirty-day period by dividing the days in the measurement period	101
into the total kilowatt hours measured during the measurement	102
period to obtain a daily average usage. TheExcept as provided in	103
division (E) of this section, the tax shall be determined by	104
obtaining the sum of divisions (A)(1), (2), and (3) of this	105
section and multiplying that amount by the number of days in the	106
measurement period:	107

(1) Multiplying $0.00465 per kilowatt hour for the first	108
sixty-seven kilowatt hours distributed using a daily average;	109

(2) Multiplying $0.00419 for the next sixty-eight to five	110
hundred kilowatt hours distributed using a daily average;	111

(3) Multiplying $0.00363 for the remaining kilowatt hours	112
distributed using a daily average.	113

Except as provided in division (C) of this section, the	114
electric distribution company shall pay the tax to the tax	115
commissioner in accordance with section 5727.82 of the Revised	116
Code, unless required to remit each tax payment by electronic	117
funds transfer to the treasurer of state in accordance with	118
section 5727.83 of the Revised Code.	119

Only the distribution of electricity through a meter of an	120
end user in this state shall be used by the electric distribution	121
company to compute the amount or estimated amount of tax due. In	122
the event a meter is not actually read for a measurement period,	123
the estimated kilowatt hours distributed by an electric	124
distribution company to bill for its distribution charges shall be	125
used.	126

(B) Except as provided in division (C) of this section, each	127
electric distribution company shall pay the tax imposed by this	128
section in all of the following circumstances:	129

(1) The electricity is distributed by the company through a	130
meter of an end user in this state;	131

(2) The company is distributing electricity through a meter	132
located in another state, but the electricity is consumed in this	133
state in the manner prescribed by the tax commissioner;	134

(3) The company is distributing electricity in this state	135
without the use of a meter, but the electricity is consumed in	136
this state as estimated and in the manner prescribed by the tax	137
commissioner.	138

(C)(1) As used in division (C) of this section:

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(a) "Total price of electricity" means the aggregate value in	140
money of anything paid or transferred, or promised to be paid or	141
transferred, to obtain electricity or electric service, including	142
but not limited to the value paid or promised to be paid for the	143
transmission or distribution of electricity and for transition	144
costs as described in Chapter 4928. of the Revised Code.	145

(b) "Package" means the provision or the acquisition, at a	146
combined price, of electricity with other services or products, or	147
any combination thereof, such as natural gas or other fuels;	148
energy management products, software, and services; machinery and	149
equipment acquisition; and financing agreements.	150

(c) "Single location" means a facility located on contiguous	151
property separated only by a roadway, railway, or waterway.	152

(2) Division (C) of this section applies to any commercial or	153
industrial purchaser's receipt of electricity through a meter of	154
an end user in this state or through more than one meter at a	155
single location in this state in a quantity that exceeds	156
forty-five million kilowatt hours of electricity over the course	157
of the preceding calendar year, or any commercial or industrial	158
purchaser that will consume more than forty-five million kilowatt	159
hours of electricity over the course of the succeeding twelve	160
months as estimated by the tax commissioner. The tax commissioner	161
shall make such an estimate upon the written request by an	162
applicant for registration as a self-assessing purchaser under	163
this division. For the meter reading period including July 1,	164
2008, through the meter reading period including December 31,	165
2010, such a purchaser may elect to self-assess the excise tax	166
imposed by this section at the rate of $.00075 per kilowatt hour	167
on the first five hundred four million kilowatt hours distributed	168
to that meter or location during the registration year, and a	169
percentage of the total price of all electricity distributed to	170
that meter or location equal to three and one-half per cent. For	171
the meter reading period including January 1, 2011, and	172
thereafter, such a purchaser may elect to self-assess the excise	173
tax imposed by this section at the rate of $.00257 per kilowatt	174
hour for the first five hundred million kilowatt hours, and	175
$.001832 per kilowatt hour for each kilowatt hour in excess of	176
five hundred million kilowatt hours, distributed to that meter or	177
location during the registration year.	178

A qualified end user that receives electricity through a	179
meter of an end user in this state or through more than one meter	180
at a single location in this state and that consumes, over the	181
course of the previous calendar year, more than forty-five million	182
kilowatt hours in other than its qualifying manufacturing process,	183
may elect to self-assess the tax as allowed by this division with	184
respect to the electricity used in other than its qualifying	185
manufacturing process.	186

Payment of the tax shall be made directly to the tax	187
commissioner in accordance with divisions (A)(4) and (5) of	188
section 5727.82 of the Revised Code, or the treasurer of state in	189
accordance with section 5727.83 of the Revised Code. If the	190
electric distribution company serving the self-assessing purchaser	191
is a municipal electric utility and the purchaser is within the	192
municipal corporation's corporate limits, payment shall be made to	193
such municipal corporation's general fund and reports shall be	194
filed in accordance with divisions (A)(4) and (5) of section	195
5727.82 of the Revised Code, except that "municipal corporation"	196
shall be substituted for "treasurer of state" and "tax	197
commissioner." A self-assessing purchaser that pays the excise tax	198
as provided in this division shall not be required to pay the tax	199
to the electric distribution company from which its electricity is	200
distributed. If a self-assessing purchaser's receipt of	201
electricity is not subject to the tax as measured under this	202
division, the tax on the receipt of such electricity shall be	203
measured and paid as provided in division (A) of this section.	204

(3) In the case of the acquisition of a package, unless the	205
elements of the package are separately stated isolating the total	206
price of electricity from the price of the remaining elements of	207
the package, the tax imposed under this section applies to the	208
entire price of the package. If the elements of the package are	209
separately stated, the tax imposed under this section applies to	210
the total price of the electricity.	211

(4) Any electric supplier that sells electricity as part of a	212
package shall separately state to the purchaser the total price of	213
the electricity and, upon request by the tax commissioner, the	214
total price of each of the other elements of the package.	215

(5) The tax commissioner may adopt rules relating to the	216
computation of the total price of electricity with respect to	217
self-assessing purchasers, which may include rules to establish	218
the total price of electricity purchased as part of a package.	219

(6) An annual application for registration as a	220
self-assessing purchaser shall be made for each qualifying meter	221
or location on a form prescribed by the tax commissioner. The	222
registration year begins on the first day of May and ends on the	223
following thirtieth day of April. Persons may apply after the	224
first day of May for the remainder of the registration year. In	225
the case of an applicant applying on the basis of an estimated	226
consumption of forty-five million kilowatt hours over the course	227
of the succeeding twelve months, the applicant shall provide such	228
information as the tax commissioner considers to be necessary to	229
estimate such consumption. At the time of making the application	230
and by the first day of May of each year, a self-assessing	231
purchaser shall pay a fee of five hundred dollars to the tax	232
commissioner, or to the treasurer of state as provided in section	233
5727.83 of the Revised Code, for each qualifying meter or	234
location. The tax commissioner shall immediately pay to the	235
treasurer of state all amounts that the tax commissioner receives	236
under this section. The treasurer of state shall deposit such	237
amounts into the kilowatt hour excise tax administration fund,	238
which is hereby created in the state treasury. Money in the fund	239
shall be used to defray the tax commissioner's cost in	240
administering the tax owed under section 5727.81 of the Revised	241
Code by self-assessing purchasers. After the application is	242
approved by the tax commissioner, the registration shall remain in	243
effect for the current registration year, or until canceled by the	244
registrant upon written notification to the commissioner of the	245
election to pay the tax in accordance with division (A) of this	246
section, or until canceled by the tax commissioner for not paying	247
the tax or fee under division (C) of this section or for not	248
meeting the qualifications in division (C)(2) of this section. The	249
tax commissioner shall give written notice to the electric	250
distribution company from which electricity is delivered to a	251
self-assessing purchaser of the purchaser's self-assessing status,	252
and the electric distribution company is relieved of the	253
obligation to pay the tax imposed by division (A) of this section	254
for electricity distributed to that self-assessing purchaser until	255
it is notified by the tax commissioner that the self-assessing	256
purchaser's registration is canceled. Within fifteen days of	257
notification of the canceled registration, the electric	258
distribution company shall be responsible for payment of the tax	259
imposed by division (A) of this section on electricity distributed	260
to a purchaser that is no longer registered as a self-assessing	261
purchaser. A self-assessing purchaser with a canceled registration	262
must file a report and remit the tax imposed by division (A) of	263
this section on all electricity it receives for any measurement	264
period prior to the tax being reported and paid by the electric	265
distribution company. A self-assessing purchaser whose	266
registration is canceled by the tax commissioner is not eligible	267
to register as a self-assessing purchaser for two years after the	268
registration is canceled.	269

(7) If the tax commissioner cancels the self-assessing	270
registration of a purchaser registered on the basis of its	271
estimated consumption because the purchaser does not consume at	272
least forty-five million kilowatt hours of electricity over the	273
course of the twelve-month period for which the estimate was made,	274
the tax commissioner shall assess and collect from the purchaser	275
the difference between (a) the amount of tax that would have been	276
payable under division (A) of this section on the electricity	277
distributed to the purchaser during that period and (b) the amount	278
of tax paid by the purchaser on such electricity pursuant to	279
division (C)(2) of this section. The assessment shall be paid	280
within sixty days after the tax commissioner issues it, regardless	281
of whether the purchaser files a petition for reassessment under	282
section 5727.89 of the Revised Code covering that period. If the	283
purchaser does not pay the assessment within the time prescribed,	284
the amount assessed is subject to the additional charge and the	285
interest prescribed by divisions (B) and (C) of section 5727.82 of	286
the Revised Code, and is subject to assessment under section	287
5727.89 of the Revised Code. If the purchaser is a qualified end	288
user, division (C)(7) of this section applies only to electricity	289
it consumes in other than its qualifying manufacturing process.	290

(D) The tax imposed by this section does not apply to the	291
distribution of any kilowatt hours of electricity to the federal	292
government, to an end user located at a federal facility that uses	293
electricity for the enrichment of uranium, to a qualified	294
regeneration meter, or to an end user for any day the end user is	295
a qualified end user. The exemption under this division for a	296
qualified end user only applies to the manufacturing location	297
where the qualified end user uses more than three million kilowatt	298
hours per day in a qualifying manufacturing process.	299

(E)(1) As used in this division:

300

(a) "Qualified data center" means a data center established	301
with the assistance of a grant awarded under the data center	302
development grant program authorized by section 184.05 of the	303
Revised Code.	304

(b) "Discounted rate" means a rate charged to a qualified	305
data center for retail electric service, as defined in section	306
4928.01 of the Revised Code, pursuant to a reasonable arrangement	307
between the electric distribution company and the qualified data	308
center under section 4905.31 of the Revised Code that is less than	309
the unvaried rate.	310

(c) "Unvaried rate" means the rate that would be charged a	311
qualified data center for retail electric service in the absence	312
of a reasonable arrangement.	313

(d) "Discount ratio" means the amount obtained by dividing	314
the discounted rate by the unvaried rate.	315

(2) The monthly tax on the kilowatt hours of electricity	316
distributed at a discounted rate to a qualified data center shall	317
be determined by obtaining the sum of divisions (A)(1), (2), and	318
(3) of this section and multiplying that sum by the discount ratio	319
and by the number of days in the measurement period.	320

On request of the tax commissioner, an electric distribution	321
company that charges a discounted rate to a qualified data center	322
shall provide any information that, in the tax commissioner's	323
opinion, is necessary to establish the discount ratio or the	324
amount of tax due under this division.	325

Section 2. That existing sections 184.19 and 5727.81 of the	326
Revised Code are hereby repealed.	327

Section 3. The amendment by this act of section 5727.81 of	328
the Revised Code applies to measurement periods beginning on or	329
after the effective date of this act.	330