Bill Text: OH HB390 | 2013-2014 | 130th General Assembly | Introduced

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Bill Title: To authorize nonrefundable tax credits for donations to free clinics.

Spectrum: Strong Partisan Bill (Republican 13-1)

Status: (Introduced - Dead) 2013-12-18 - To Ways and Means [HB390 Detail]

Download: Ohio-2013-HB390-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 390

Representatives Brenner, Young 

Cosponsors: Representatives Becker, Derickson, Roegner, Hood, Buchy, Stebelton, Reece, Blessing, Burkley, Retherford, Grossman, Terhar 

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A BILL

To amend sections 5725.98, 5726.98, 5729.98, and

1

5747.98 and to enact section 3701.88 of the

2

Revised Code to authorize nonrefundable tax

3

credits for donations to free clinics.

4

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

Section 1.  That sections 5725.98, 5726.98, 5729.98, and	5
5747.98 be amended and section 3701.88 of the Revised Code be	6
enacted to read as follows:	7

Sec. 3701.88.  (A) As used in this section:

8

(1) "Free clinic" means a nonprofit organization exempt from	9
federal income taxation under section 501(c)(3) of the Internal	10
Revenue Code, or a program component of such a nonprofit	11
organization, whose primary mission is to provide health care	12
services for free or for a minimal administrative fee to	13
individuals with limited resources, and that facilitates the	14
delivery of health care services through the use of volunteer	15
health care professionals and voluntary care networks. A "free	16
clinic" includes only those nonprofit organizations to which each	17
of the following apply:	18

(a) If the organization does request a minimal administrative	19
fee, the organization does not deny an individual access to its	20
health care services based on an individual's ability to pay the	21
fee.	22

(b) The organization does not bill a patient for health care	23
services rendered.	24

(c) The organization does not perform operations, as defined	25
by divisions (A)(9) and (F)(1)(b) of section 2305.234 of the	26
Revised Code.	27

"Free clinic" does not include a clinic that bills medicaid,	28
medicare, or other third-party payers for health care services	29
rendered at the clinic and that receives twenty-five per cent or	30
more of the clinic's annual revenue from such third-party	31
payments.	32

(2) "Certified free clinic" means a free clinic that the	33
department of health certifies meets the requirements of a free	34
clinic under division (E) of this section.	35

(3) "Internal Revenue Code" has the same meaning as in	36
section 5747.01 of the Revised Code.	37

(4) "Pass-through entity" has the same meaning as in section	38
5733.04 of the Revised Code and includes a sole proprietorship.	39

(5) "Authorized donation" means a donation authorized by the	40
department of health and made to a certified free clinic before	41
the first day of January first occurring after the date of	42
authorization by the department.	43

(6) "Annual total credit limit" means the total amount of all	44
credits authorized for a fiscal year under division (D) of this	45
section.	46

(7) "Donation" means an unconditional gift of cash.

47

(8) "Tax period" means:

48

(a) In the case of a domestic insurance company or a foreign	49
insurance company, the calendar year ending on the thirty-first	50
day of December next preceding the day the report or annual	51
statement is required to be returned under section 5725.18 or	52
5729.02 of the Revised Code;	53

(b) In the case of a public utility, electric distribution	54
company, natural gas distribution company, or financial	55
institution subject to taxation under Chapter 5726. of the Revised	56
Code, the calendar year;	57

(c) In the case of a person subject to taxation under Chapter	58
5747. of the Revised Code, the person's taxable year for the	59
purposes of that chapter.	60

(9) "Taxpayer" means a person subject to a tax against which	61
a credit is allowed under this section.	62

(B) A nonrefundable credit is allowed against the tax imposed	63
by section 5725.18, 5726.02, 5727.24, 5727.30, 5727.81, 5727.811,	64
or 5747.02 or the tax assessed under Chapter 5729. of the Revised	65
Code for a taxpayer that makes an authorized donation to a	66
certified free clinic on or after the effective date of the	67
enactment of this section. The credit equals the amount of the	68
authorized donation made during the taxpayer's tax period, subject	69
to the following limits:	70

(1) In the case of an individual who is not claiming a	71
distributive share of a credit as an equity owner of a	72
pass-through entity, the credit for a tax period may not exceed	73
one thousand dollars.	74

(2) In the case of an individual and spouse filing a joint	75
return, neither of whom is claiming a distributive share of a	76
credit as equity owners of a pass-through entity, the credit for a	77
tax period may not exceed two thousand five hundred dollars.	78

(3) In the case of all other taxpayers, the credit may not	79
exceed three hundred thousand dollars for a tax period, or the	80
taxpayer's distributive or proportionate share of three hundred	81
thousand dollars if the taxpayer claims the credit as an equity	82
owner of a pass-through entity against the tax imposed by section	83
5747.02 of the Revised Code.	84

The credit shall be claimed for the tax period in which the	85
authorized donation is made and, if applicable to the taxpayer,	86
shall be claimed in the order required under section 5725.98,	87
5726.98, 5729.98, or 5747.98 of the Revised Code, except that an	88
individual claiming a distributive share of a credit as an equity	89
owner of a pass-through entity shall claim the credit for the	90
taxpayer's taxable year that includes the last day of the entity's	91
taxable year in which the donation was made. The amount of the	92
credit may not exceed the tax otherwise due after allowing for all	93
other credits in that order. Excess credit may be carried forward	94
to the next three succeeding tax periods. If the taxpayer is	95
required to pay the tax imposed by section 5727.24 or 5727.30 of	96
the Revised Code more frequently than once per calendar year, or	97
claims the credit against the tax imposed by section 5726.02,	98
5727.81, or 5727.811 of the Revised Code, the amount of the credit	99
allowed for a calendar year shall be claimed in substantially	100
equal amounts against each tax payment required during the year	101
and after the donation is made.	102

(C) The taxpayer shall notify the intended recipient	103
certified free clinic of the amount of the donation. Before	104
delivering the donation, the taxpayer shall apply to the	105
department of health for authorization of the donation in the	106
manner prescribed by the agency. The department shall approve or	107
deny the application and shall issue written notice of the	108
department's decision to the taxpayer and to the intended	109
recipient of the donation within twenty days after receiving the	110
application. The department shall approve applications in the	111
order in which the department receives complete applications. The	112
department shall approve an application if the taxpayer agrees to	113
make a donation to a certified free clinic, and if the annual	114
total credit limit has not been reached. If the application is	115
approved, the department's notice shall indicate the amount of the	116
credit authorized. When the donation is received, the recipient	117
shall issue a receipt to the taxpayer.	118

(D) The annual total credit limit for state fiscal year 2014	119
and each ensuing fiscal year equals twenty million dollars except	120
that, for each fiscal year beginning with fiscal year 2015, if	121
eighty per cent of the annual total credit limit for the preceding	122
fiscal year was reached, the annual total credit limit equals one	123
hundred twenty per cent of the credit limit for the preceding	124
fiscal year.	125

(E)(1)(a) To become a certified free clinic, a free clinic	126
shall apply to the department of health in the manner prescribed	127
by the department and shall submit evidence that the applicant	128
qualifies as a free clinic. The department shall certify an	129
applicant as a certified free clinic if the applicant executes an	130
affidavit certifying the following:	131

(i) The applicant qualifies as a free clinic.

132

(ii) The applicant will not expend more than ten per cent of	133
the authorized donations it receives pursuant to this section for	134
administrative or other expenses other than providing health care	135
services for free or for a minimal administrative fee to	136
individuals with limited resources.	137

(iii) Beginning with the applicant's third fiscal year after	138
its fiscal year that includes the date it was certified as a	139
certified free clinic, and each fiscal year thereafter, the sum of	140
the amounts the applicant spent providing health care services for	141
free or for a minimal administrative fee to individuals with	142
limited resources in its most recently concluded fiscal year and	143
the two fiscal years immediately preceding that year is greater	144
than or equal to ninety per cent of the authorized donations the	145
applicant received in the third most recently concluded fiscal	146
year.	147

The department shall approve or deny the application and	148
shall issue written notice of the department's decision to the	149
applicant within twenty days after receiving the application. The	150
department shall publish a list of certified free clinics on the	151
department's web site. The department shall update the list as	152
necessary. The agency shall also publish annually a copy of that	153
list in paper form.	154

(b) The department of health is authorized to charge a fee	155
for the filing of an application under division (E)(1)(a) of this	156
section to defray the costs of processing the application and	157
administering this section. The fee may not exceed the	158
department's reasonable costs associated with processing the	159
application and administering this section.	160

(c) The department of health may revoke its certification of	161
a certified free clinic if the clinic fails to satisfy any of the	162
criteria in division (E)(1)(a) of this section for certification	163
or if the clinic fails to submit the information required in	164
division (E)(2) of this section.	165

(2)(a) On or before the first day of February of each year	166
beginning in 2015, each certified free clinic shall report the	167
total amount of authorized donations received in the preceding	168
year to the department of health in the manner required by the	169
department.	170

(b) Each year, the Ohio association of free clinics shall	171
submit to the department of health a financial information report	172
for each certified free clinic. The report shall comply with	173
uniform financial accounting standards established by the	174
department and shall be conducted by a certified public	175
accountant. If appropriate, the accountant shall certify that the	176
report is free of material misstatements.	177

(3) For the purposes of this section, the department of	178
health may not require the Ohio association of free clinics to	179
report any information other than that prescribed in division	180
(E)(2) of this section.	181

(F) The director of health shall adopt rules under Chapter	182
119. of the Revised Code to implement division (E) of this	183
section.	184

(G)(1) The Ohio association of free clinics shall perform a	185
financial audit of each certified clinic at least once every year.	186

(2) Upon reasonable suspicion that donated funds have been	187
mishandled or misappropriated, a donor or the tax commissioner may	188
request the auditor of state to select an independent certified	189
public accountant to audit the books and records of a certified	190
free clinic. The request shall be in writing and shall include	191
evidence supporting the reasonable suspicion. If the auditor	192
determines that a reasonable suspicion exists, the auditor shall	193
so notify the certified free clinic and select a certified public	194
accountant to perform the audit. The certified public accountant's	195
fees for performing the audit shall be approved by the auditor of	196
state and, once approved, paid by the certified free clinic.	197

Not more than one audit per certified free clinic may be	198
performed per year under division (G)(2) of this section.	199

Sec. 5725.98. (A) To provide a uniform procedure for	200
calculating the amount of tax imposed by section 5725.18 of the	201
Revised Code that is due under this chapter, a taxpayer shall	202
claim any credits and offsets against tax liability to which it is	203
entitled in the following order:	204

(1) The credit for an insurance company or insurance company	205
group under section 5729.031 of the Revised Code;	206

(2) The credit for eligible employee training costs	207
authorized donations to certified free clinics under section	208
5725.313701.88 of the Revised Code;	209

(3) The credit for purchasers of qualified low-income	210
community investments under section 5725.33 of the Revised Code;	211

(4) The nonrefundable job retention credit under division	212
(B)(1) of section 122.171 of the Revised Code;	213

(5) The offset of assessments by the Ohio life and health	214
insurance guaranty association permitted by section 3956.20 of the	215
Revised Code;	216

(6) The refundable credit for rehabilitating a historic	217
building under section 5725.34 of the Revised Code.	218

(7) The refundable credit for Ohio job retention under	219
division (B)(2) or (3) of section 122.171 of the Revised Code;	220

(8) The refundable credit for Ohio job creation under section	221
5725.32 of the Revised Code;	222

(9) The refundable credit under section 5725.19 of the	223
Revised Code for losses on loans made under the Ohio venture	224
capital program under sections 150.01 to 150.10 of the Revised	225
Code.	226

(B) For any credit except the refundable credits enumerated	227
in this section, the amount of the credit for a taxable year shall	228
not exceed the tax due after allowing for any other credit that	229
precedes it in the order required under this section. Any excess	230
amount of a particular credit may be carried forward if authorized	231
under the section creating that credit. Nothing in this chapter	232
shall be construed to allow a taxpayer to claim, directly or	233
indirectly, a credit more than once for a taxable year.	234

Sec. 5726.98. (A) To provide a uniform procedure for	235
calculating the amount of tax due under section 5726.02 of the	236
Revised Code, a taxpayer shall claim any credits to which the	237
taxpayer is entitled under this chapter in the following order:	238

(1) The bank organization assessment credit under section	239
5726.51 of the Revised Code;	240

(2) The credit for authorized donations to certified free	241
clinics under section 3701.88 of the Revised Code;	242

(3) The nonrefundable job retention credit under division (B)	243
of section 5726.50 of the Revised Code;	244

(3)(4) The nonrefundable credit for purchases of qualified	245
low-income community investments under section 5726.54 of the	246
Revised Code;	247

(4)(5) The nonrefundable credit for qualified research	248
expenses under section 5726.56 of the Revised Code;	249

(5)(6) The nonrefundable credit for qualifying dealer in	250
intangibles taxes under section 5726.57 of the Revised Code.;	251

(6)(7) The refundable credit for rehabilitating an historic	252
building under section 5726.52 of the Revised Code;	253

(7)(8) The refundable job retention or job creation credit	254
under division (A) of section 5726.50 of the Revised Code;	255

(8)(9) The refundable credit under section 5726.53 of the	256
Revised Code for losses on loans made under the Ohio venture	257
capital program under sections 150.01 to 150.10 of the Revised	258
Code;	259

(9)(10) The refundable motion picture production credit under	260
section 5726.55 of the Revised Code.	261

(B) For any credit except the refundable credits enumerated	262
in this section, the amount of the credit for a taxable year shall	263
not exceed the tax due after allowing for any other credit that	264
precedes it in the order required under this section. Any excess	265
amount of a particular credit may be carried forward if authorized	266
under the section creating that credit. Nothing in this chapter	267
shall be construed to allow a taxpayer to claim, directly or	268
indirectly, a credit more than once for a taxable year.	269

Sec. 5729.98. (A) To provide a uniform procedure for	270
calculating the amount of tax due under this chapter, a taxpayer	271
shall claim any credits and offsets against tax liability to which	272
it is entitled in the following order:	273

(1) The credit for an insurance company or insurance company	274
group under section 5729.031 of the Revised Code;	275

(2) The credit for eligible employee training costs	276
authorized donations to certified free clinics under section	277
5729.073701.88 of the Revised Code;	278

(3) The credit for purchases of qualified low-income	279
community investments under section 5729.16 of the Revised Code;	280

(4) The nonrefundable job retention credit under division	281
(B)(1) of section 122.171 of the Revised Code;	282

(5) The offset of assessments by the Ohio life and health	283
insurance guaranty association against tax liability permitted by	284
section 3956.20 of the Revised Code;	285

(6) The refundable credit for rehabilitating a historic	286
building under section 5729.17 of the Revised Code.	287

(7) The refundable credit for Ohio job retention under	288
division (B)(2) or (3) of section 122.171 of the Revised Code;	289

(8) The refundable credit for Ohio job creation under section	290
5729.032 of the Revised Code;	291

(9) The refundable credit under section 5729.08 of the	292
Revised Code for losses on loans made under the Ohio venture	293
capital program under sections 150.01 to 150.10 of the Revised	294
Code.	295

(B) For any credit except the refundable credits enumerated	296
in this section, the amount of the credit for a taxable year shall	297
not exceed the tax due after allowing for any other credit that	298
precedes it in the order required under this section. Any excess	299
amount of a particular credit may be carried forward if authorized	300
under the section creating that credit. Nothing in this chapter	301
shall be construed to allow a taxpayer to claim, directly or	302
indirectly, a credit more than once for a taxable year.	303

Sec. 5747.98.  (A) To provide a uniform procedure for	304
calculating the amount of tax due under section 5747.02 of the	305
Revised Code, a taxpayer shall claim any credits to which the	306
taxpayer is entitled in the following order:	307

(1) The retirement income credit under division (B) of	308
section 5747.055 of the Revised Code;	309

(2) The senior citizen credit under division (C) of section	310
5747.05 of the Revised Code;	311

(3) The lump sum distribution credit under division (D) of	312
section 5747.05 of the Revised Code;	313

(4) The dependent care credit under section 5747.054 of the	314
Revised Code;	315

(5) The lump sum retirement income credit under division (C)	316
of section 5747.055 of the Revised Code;	317

(6) The lump sum retirement income credit under division (D)	318
of section 5747.055 of the Revised Code;	319

(7) The lump sum retirement income credit under division (E)	320
of section 5747.055 of the Revised Code;	321

(8) The low-income credit under section 5747.056 of the	322
Revised Code;	323

(9) The credit for displaced workers who pay for job training	324
under section 5747.27 of the Revised Code;	325

(10) The campaign contribution credit under section 5747.29	326
of the Revised Code;	327

(11) The twenty-dollar personal exemption credit under	328
section 5747.022 of the Revised Code;	329

(12) The joint filing credit under division (G) of section	330
5747.05 of the Revised Code;	331

(13) The nonresident credit under division (A) of section	332
5747.05 of the Revised Code;	333

(14) The credit for a resident's out-of-state income under	334
division (B) of section 5747.05 of the Revised Code;	335

(15) The earned income credit under section 5747.71 of the	336
Revised Code;	337

(16) The credit for employers that reimburse employee child	338
care expenses under section 5747.36 of the Revised Code;	339

(17) The credit for adoption of a minor child under section	340
5747.37 of the Revised Code;	341

(18) The credit for purchases of lights and reflectors under	342
section 5747.38 of the Revised Code;	343

(19) The nonrefundable job retention credit under division	344
(B) of section 5747.058 of the Revised Code;	345

(20) The credit for selling alternative fuel under section	346
5747.77 of the Revised Code;	347

(21) The second credit for purchases of new manufacturing	348
machinery and equipment and the credit for using Ohio coal under	349
section 5747.31 of the Revised Code;	350

(22) The job training credit under section 5747.39 of the	351
Revised Code;	352

(23) The enterprise zone credit under section 5709.66 of the	353
Revised Code;	354

(24) The credit for the eligible costs associated with a	355
voluntary action under section 5747.32 of the Revised Code;	356

(25) The credit for employers that establish on-site child	357
day-care centersauthorized donations to certified free clinics	358
under section 5747.353701.88 of the Revised Code;	359

(26) The ethanol plant investment credit under section	360
5747.75 of the Revised Code;	361

(27) The credit for purchases of qualifying grape production	362
property under section 5747.28 of the Revised Code;	363

(28) The small business investment credit under section	364
5747.81 of the Revised Code;	365

(29) The enterprise zone credits under section 5709.65 of the	366
Revised Code;	367

(30) The research and development credit under section	368
5747.331 of the Revised Code;	369

(31) The credit for rehabilitating a historic building under	370
section 5747.76 of the Revised Code;	371

(32) The refundable credit for rehabilitating a historic	372
building under section 5747.76 of the Revised Code;	373

(33) The refundable jobs creation credit or job retention	374
credit under division (A) of section 5747.058 of the Revised Code;	375

(34) The refundable credit for taxes paid by a qualifying	376
entity granted under section 5747.059 of the Revised Code;	377

(35) The refundable credits for taxes paid by a qualifying	378
pass-through entity granted under division (J) of section 5747.08	379
of the Revised Code;	380

(36) The refundable credit under section 5747.80 of the	381
Revised Code for losses on loans made to the Ohio venture capital	382
program under sections 150.01 to 150.10 of the Revised Code;	383

(37) The refundable motion picture production credit under	384
section 5747.66 of the Revised Code.;	385

(38) The refundable credit for financial institution taxes	386
paid by a pass-through entity granted under section 5747.65 of the	387
Revised Code.	388

(B) For any credit, except the refundable credits enumerated	389
in this section and the credit granted under division (I) of	390
section 5747.08 of the Revised Code, the amount of the credit for	391
a taxable year shall not exceed the tax due after allowing for any	392
other credit that precedes it in the order required under this	393
section. Any excess amount of a particular credit may be carried	394
forward if authorized under the section creating that credit.	395
Nothing in this chapter shall be construed to allow a taxpayer to	396
claim, directly or indirectly, a credit more than once for a	397
taxable year.	398

Section 2.  That existing sections 5725.98, 5726.98, 5729.98,	399
and 5747.98 of the Revised Code are hereby repealed.	400