Bill Title: To divide the New Markets Tax Credit program into the New Markets Revitalization Tax Credit program, with an annual credit cap of $15 million, and the New Markets Expansion Tax Credit program, with an annual credit cap of $35 million, and to specify separate standards and application procedures for each program.
Spectrum: Slight Partisan Bill (Republican 18-7)
Status: (Engrossed - Dead) 2012-12-05 - Passed 3rd Consideration House
[SB327 Detail]Download: Ohio-2011-SB327-Engrossed.html
As Passed by the Senate
| 129th General Assembly | | Regular Session | | 2011-2012 |
| |
Cosponsors:
Senators Seitz, Bacon, Balderson, Brown, Eklund, Faber, Hughes, Kearney, LaRose, Lehner, Manning, Niehaus, Obhof, Oelslager, Patton, Peterson, Sawyer, Schaffer, Schiavoni, Smith, Turner, Wagoner, Widener
A BILL
| To amend sections 5725.33, 5725.98, 5729.16, and | 1 |
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5733.58 and to enact section 5725.331 of the | 2 |
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Revised Code to divide the New Markets Tax Credit | 3 |
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program into the New Markets Revitalization Tax | 4 |
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Credit program, with an annual credit cap of $15 | 5 |
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million, and the New Markets Expansion Tax Credit | 6 |
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program, with an annual credit cap of $35 million, | 7 |
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and to specify separate standards and application | 8 |
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procedures for each program. | 9 |
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
| Section 1. That sections 5725.33, 5725.98, 5729.16, and | 10 |
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5733.58 be amended and section 5725.331 of the Revised Code be | 11 |
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enacted to read as follows: | 12 |
| Sec. 5725.33. (A) Except as otherwise provided in this | 13 |
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section, terms used in this section have the same meaning as | 14 |
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section 45D of the Internal Revenue Code, any related proposed, | 15 |
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temporary or final regulations promulgated under the Internal | 16 |
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Revenue Code, any rules or guidance of the internal revenue | 17 |
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service or the United States department of the treasury, and any | 18 |
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related rules or guidance issued by the community development | 19 |
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financial institutions fund of the United States department of the | 20 |
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treasury, as such law, regulations, rules, and guidance exist on | 21 |
the effective date of the enactment of this section by H.B. 1 of | 22 |
the 128th general assemblyOctober 16, 2009. | 23 |
| As used in this section: | 24 |
| (1) "Adjusted purchase price" means the amount paid for | 25 |
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qualified equity investments multiplied by the qualified | 26 |
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low-income community investments made by the issuer in projects | 27 |
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located in this state as a percentage of the total amount of | 28 |
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qualified low-income community investments made by the issuer in | 29 |
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projects located in all states on the credit allowance date during | 30 |
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the applicable tax year, subject to divisions (B)(1) and (2) of | 31 |
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this section. | 32 |
(2) "Applicable percentage" means zerofive per cent for each | 33 |
of the first twothree credit allowance dates, seven per cent for | 34 |
the third credit allowance date, and eightsix per cent for the | 35 |
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four following credit allowance dates. | 36 |
(3) "Credit allowance date" means the date, on or after | 37 |
January 1, 2010, a qualified equity investment is made and each of | 38 |
the six anniversary dates thereafter. For qualified equity | 39 |
investments made after the effective date of this section but | 40 |
before January 1, 2010, the initial credit allowance date is | 41 |
January 1, 2010, and each of the six anniversary dates thereafter | 42 |
is on the first day of January of each year. | 43 |
(4) "Qualified active low-income community business" excludes | 44 |
any business that derives or projects to derive fifteen per cent | 45 |
or more of annual revenue from the rental or sale of real | 46 |
property, except any business that is a special purpose entity | 47 |
principally owned by a principal user of that property formed | 48 |
solely for the purpose of renting, either directly or indirectly, | 49 |
or selling real property back to such principal user if such | 50 |
principal user does not derive fifteen per cent or more of its | 51 |
gross annual revenue from the rental or sale of real property. | 52 |
(5) "Qualified community development entity" includes only | 53 |
entities: | 54 |
(a) Thatthat have entered into, for the current year or for | 55 |
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any prior year, an allocation agreement with the community | 56 |
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development financial institutions fund of the United States | 57 |
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department of the treasury with respect to credits authorized by | 58 |
section 45D of the Internal Revenue Code; | 59 |
(b) Whoseand whose service area includes any portion of this | 60 |
state; and | 61 |
(c) That will designate an equity investment in such entities | 62 |
as a qualified equity investment for purposes of both section 45D | 63 |
of the Internal Revenue Code and this section, or an entity | 64 |
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controlled by or under the common control of such an entity. | 65 |
(6)(5) "Qualified equity investment" is limited to an equity | 66 |
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investment in a qualified community development entity that: | 67 |
(a) Is acquired after the effective date of the enactment of | 68 |
this sectionOctober 16, 2009, at its original issuance solely in | 69 |
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exchange for cash; | 70 |
| (b) Has at least eighty-five per cent of its cash purchase | 71 |
|
price used by the qualified community development entity to make | 72 |
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qualified low-income community investments on or before the first | 73 |
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anniversary of the date the entity and the development services | 74 |
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agency entered into a tax credit allocation agreement with respect | 75 |
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to the qualified equity investment, provided that in the seventh | 76 |
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year after a qualified equity investment is made, only | 77 |
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seventy-five per cent of such cash purchase price must be used by | 78 |
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the qualified community development entity to make qualified | 79 |
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low-income community investments; and | 80 |
| (c) Is designated by the issuer as a qualified equity | 81 |
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investment. | 82 |
| "Qualified equity investment" includes any equity investment | 83 |
that would, but for division (A)(6)(5)(a) of this section, be a | 84 |
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qualified equity investment in the hands of the taxpayer if such | 85 |
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investment was a qualified equity investment in the hands of a | 86 |
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prior holder. | 87 |
(B) There is hereby allowed a nonrefundable credit against | 88 |
the tax imposed by section 5725.18 of the Revised Code for an | 89 |
insurance company holding a qualified equity investmentThere is | 90 |
|
hereby created the new markets revitalization tax credit program. | 91 |
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Under the program, an insurance company may earn a nonrefundable | 92 |
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credit against the tax imposed by section 5725.18 of the Revised | 93 |
|
Code for a qualified equity investment the insurance company holds | 94 |
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on the credit allowance date occurring in the calendar year for | 95 |
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which the tax is due. The credit shall equal the applicable | 96 |
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percentage of the adjusted purchase price of qualified low-income | 97 |
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community investments, subject to divisions (B)(1) and (2) of this | 98 |
|
section: | 99 |
| (1) For the purpose of calculating the amount of qualified | 100 |
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low-income community investments held by a qualified community | 101 |
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development entity, an investment shall be considered held by a | 102 |
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qualified community development entity even if the investment has | 103 |
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been sold or repaid, provided that, at any time before the seventh | 104 |
|
anniversary of the issuance of the qualified equity investment, | 105 |
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the qualified community development entity reinvests an amount | 106 |
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equal to the capital returned to or received or recovered by the | 107 |
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qualified community development entity from the original | 108 |
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investment, exclusive of any profits realized and costs incurred | 109 |
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in the sale or repayment, in another qualified low-income | 110 |
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community investment within twelve months of the receipt of such | 111 |
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capital. If the qualified low-income community investment is sold | 112 |
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or repaid after the sixth anniversary of the issuance of the | 113 |
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qualified equity investment, the qualified low-income community | 114 |
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investment shall be considered held by the qualified community | 115 |
|
development entity through the seventh anniversary of the | 116 |
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qualified equity investment's issuance. | 117 |
| (2) The qualified low-income community investment made in | 118 |
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this state shall equal the sum of the qualified low-income | 119 |
|
community investments in each qualified active low-income | 120 |
community business in this state, not to exceed twofour million | 121 |
five hundred sixty-four thousand dollars, in which the qualified | 122 |
|
community development entity invests, including such investments | 123 |
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in any such businesses in this state related to that qualified | 124 |
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active low-income community business through majority ownership or | 125 |
|
control. | 126 |
| The credit shall be claimed in the order prescribed by | 127 |
|
section 5725.98 of the Revised Code. If the amount of the credit | 128 |
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exceeds the amount of tax otherwise due after deducting all other | 129 |
|
credits in that order, the excess may be carried forward and | 130 |
|
applied to the tax due for not more than four ensuing years. | 131 |
| By claiming a tax credit under this section, an insurance | 132 |
|
company waives its rights under section 5725.222 of the Revised | 133 |
|
Code with respect to the time limitation for the assessment of | 134 |
|
taxes as it relates to credits claimed that later become subject | 135 |
to recapture under division (E)(D) of this section. | 136 |
| (C) The amount of qualified equity investments on the basis | 137 |
of which credits may be claimedearned under this section and | 138 |
sections, division (B)(1) of section 5729.16, and division (B)(1) | 139 |
|
of section 5733.58 of the Revised Code shall not exceed the | 140 |
|
amount, estimated by the director of development services, that | 141 |
|
would cause the total amount of credits allowed to be claimed in | 142 |
each fiscal year to exceed tenfifteen million dollars, computed | 143 |
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without regard to the potential for taxpayers to carry tax credits | 144 |
|
forward to later years. | 145 |
(D) If any amount of the federal tax credit allowed for a | 146 |
qualified equity investment for which a credit was received under | 147 |
this section is recaptured under section 45D of the Internal | 148 |
Revenue Code, or if the director of development determines that an | 149 |
investment for which a tax credit is claimed under this section is | 150 |
not a qualified equity investment or that the proceeds of an | 151 |
investment for which a tax credit is claimed under this section | 152 |
are used to make qualified low-income community investments other | 153 |
than in a qualified active low-income community business, all or a | 154 |
portion of the credit received on account of that investment shall | 155 |
be paid by the insurance company that received the credit to the | 156 |
superintendent of insuranceAll or a portion of any credit | 157 |
|
received on account of a qualified equity investment under this | 158 |
|
section or section 5725.331 of the Revised Code shall be paid by | 159 |
|
the insurance company that received the credit to the | 160 |
|
superintendent of insurance if any of the following situations | 161 |
|
apply: | 162 |
| (1) Any amount of a federal tax credit allowed for that | 163 |
|
qualified equity investment is recaptured under section 45D of the | 164 |
|
Internal Revenue Code; | 165 |
| (2) All or a portion of that qualified equity investment is | 166 |
|
redeemed before the final credit allowance date for the qualified | 167 |
|
equity investment; | 168 |
| (3) At least eighty-five per cent of the proceeds of that | 169 |
|
qualified equity investment are not used by the qualified | 170 |
|
community development entity to make qualified low-income | 171 |
|
community investments in qualified active low-income community | 172 |
|
businesses located in this state on or before the deadline | 173 |
|
specified in division (A)(5)(b) of this section or division | 174 |
|
(A)(5)(c) of section 5725.331 of the Revised Code, as applicable; | 175 |
| (4) The level of investment required under division (D)(3) of | 176 |
|
this section is not maintained until the final credit allowance | 177 |
|
date, subject to the exception in division (A)(5)(b) of this | 178 |
|
section or division (A)(5)(c) of section 5725.331 of the Revised | 179 |
Code. The | 180 |
| The director of development services shall provide written | 181 |
|
notice to a qualified community development entity of the entity's | 182 |
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noncompliance with this section. The director shall allow the | 183 |
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entity the opportunity to cure its noncompliance within six months | 184 |
|
following the date the director gives notice before commencing | 185 |
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recovery under this division. Following this six-month period, the | 186 |
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amount to be recovered shall be determined by the director of | 187 |
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development services pursuant to rules adopted under division (E) | 188 |
of this section. The | 189 |
| The director shall certify any amount due under this division | 190 |
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to the superintendent of insurance, and the superintendent shall | 191 |
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notify the treasurer of state of the amount due. Upon | 192 |
|
notification, the treasurer shall invoice the insurance company | 193 |
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for the amount due. The amount due is payable not later than | 194 |
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thirty days after the date the treasurer invoices the insurance | 195 |
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company. The amount due shall be considered to be tax due under | 196 |
|
section 5725.18 of the Revised Code, and may be collected by | 197 |
|
assessment without regard to the time limitations imposed under | 198 |
|
section 5725.222 of the Revised Code for the assessment of taxes | 199 |
|
by the superintendent. All amounts collected under this division | 200 |
|
shall be credited as revenue from the tax levied under section | 201 |
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5725.18 of the Revised Code. | 202 |
| (E) The tax credits authorized under this section and | 203 |
|
sections 5725.331, 5729.16, and 5733.58 of the Revised Code shall | 204 |
be administered by the department of development services agency. | 205 |
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The director of development services, in consultation with the tax | 206 |
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commissioner and the superintendent of insurance, pursuant to | 207 |
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Chapter 119. of the Revised Code, shall adopt rules for the | 208 |
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administration of this section and sections 5725.331, 5729.16, and | 209 |
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5733.58 of the Revised Code. The rules shall provide for | 210 |
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determining the recovery of credits under division (D) of this | 211 |
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section, division (D) of section 5729.16, and division (D) of | 212 |
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section 5733.58 of the Revised Code, including prorating the | 213 |
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amount of the credit to be recovered on any reasonable basis, the | 214 |
|
manner in which credits may be allocated among claimants, and the | 215 |
|
amount of any application or other fees to be charged in | 216 |
|
connection with a recovery. | 217 |
| (F) There is hereby created in the state treasury the new | 218 |
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markets tax credit operating fund. The director of development | 219 |
| services is authorized to charge reasonable application and other | 220 |
|
fees in connection with the administration of tax credits | 221 |
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authorized by this section and sections 5725.331, 5729.16, and | 222 |
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5733.58 of the Revised Code. Any such fees collected shall be | 223 |
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credited to the fund. The director of development services shall | 224 |
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use money in the fund to pay expenses related to the | 225 |
|
administration of tax credits authorized under sections 5725.33, | 226 |
| 5725.331, 5729.16, and 5733.58 of the Revised Code. | 227 |
| (G) Tax credits earned by a pass-through entity under | 228 |
|
sections 5725.33, 5729.16, and 5733.58 of the Revised Code may be | 229 |
|
allocated to persons having a direct or indirect ownership | 230 |
|
interest in the pass-through entity for such persons' direct use | 231 |
|
in proportion to such persons' ownership interest in the | 232 |
|
pass-through entity or in accordance with the provisions of any | 233 |
|
mutual agreement between such persons. | 234 |
| Sec. 5725.331. (A) Except as otherwise provided in this | 235 |
|
section, terms used in this section have the same meaning as | 236 |
|
section 45D of the Internal Revenue Code, any related proposed, | 237 |
|
temporary or final regulations promulgated under the Internal | 238 |
|
Revenue Code, any rules or guidance of the internal revenue | 239 |
|
service or the United States department of the treasury, and any | 240 |
|
related rules or guidance issued by the community development | 241 |
|
financial institutions fund of the United States department of the | 242 |
|
treasury, as such law, regulations, rules, and guidance exist on | 243 |
|
October 16, 2009. | 244 |
| As used in this section: | 245 |
| (1) "Purchase price" means the amount of cash paid for a | 246 |
|
qualified equity investment at its issuance. | 247 |
| (2) "Qualified community development entity" and "credit | 248 |
|
allowance date" have the same meanings as in section 5725.33 of | 249 |
|
the Revised Code. | 250 |
| (3) "Applicable percentage" means zero per cent for each of | 251 |
|
the first two credit allowance dates, seven per cent for the third | 252 |
|
credit allowance date, and eight per cent for the four following | 253 |
|
credit allowance dates. | 254 |
| (4) "Qualified active low-income community business" excludes | 255 |
|
any business that derives or projects to derive fifteen per cent | 256 |
|
or more of annual revenue from the rental or sale of real | 257 |
|
property, except any business that is a special purpose entity | 258 |
|
controlled by or under the common control of the principal user of | 259 |
|
that property and that is formed solely for the purpose of | 260 |
|
renting, either directly or indirectly, or selling real property | 261 |
|
back to such principal user if such principal user does not derive | 262 |
|
fifteen per cent or more of its gross annual revenue from the | 263 |
|
rental or sale of real property. | 264 |
| (5) "Qualified equity investment" is limited to an equity | 265 |
|
investment that: | 266 |
| (a) Is acquired after October 16, 2009, at its original | 267 |
|
issuance solely in exchange for cash; | 268 |
| (b) Is made in a qualified community development entity; | 269 |
| (c) Has at least eighty-five per cent of its cash purchase | 270 |
|
price used by the qualified community development entity to make | 271 |
|
qualified low-income community investments in this state on or | 272 |
|
before the first anniversary of the date the entity receives | 273 |
|
notice of the approval of the entity's application for | 274 |
|
certification of the qualified equity investment, provided that in | 275 |
|
the seventh year after a qualified equity investment is made, only | 276 |
|
seventy-five per cent of such cash purchase price must be used by | 277 |
|
the qualified community development entity to make qualified | 278 |
|
low-income community investments; and | 279 |
| (d) Is certified by the director of development services as a | 280 |
|
qualified equity investment. | 281 |
| "Qualified equity investment" includes any equity investment | 282 |
|
that would, but for division (A)(5)(a) of this section, be a | 283 |
|
qualified equity investment in the hands of the taxpayer if such | 284 |
|
investment was a qualified equity investment in the hands of a | 285 |
|
prior holder. | 286 |
| (B) There is hereby created the new markets expansion tax | 287 |
|
credit program. Under the program, an insurance company that makes | 288 |
|
a qualified equity investment or that purchases a qualified equity | 289 |
|
investment from a prior holder may earn a nonrefundable credit | 290 |
|
against the tax imposed by section 5725.18 of the Revised Code. | 291 |
|
The insurance company may claim the credit for each calendar year | 292 |
|
that includes a credit allowance date for the qualified equity | 293 |
|
investment. The credit shall equal the applicable percentage of | 294 |
|
the purchase price of qualified low-income community investments. | 295 |
|
When calculating the amount of qualified low-income community | 296 |
|
investments held by a qualified community development entity for | 297 |
|
purposes of this section, the following limitations shall apply: | 298 |
| (1) An investment shall be considered held by a qualified | 299 |
|
community development entity even if the investment has been sold | 300 |
|
or repaid, provided that the qualified community development | 301 |
|
entity reinvests an amount equal to the capital returned to or | 302 |
|
received or recovered by the qualified community development | 303 |
|
entity from the original investment, exclusive of any profits | 304 |
|
realized and costs incurred in the sale or repayment, in another | 305 |
|
qualified low-income community investment within twelve months of | 306 |
|
the receipt of such capital. If the qualified low-income community | 307 |
|
investment is sold or repaid after the sixth anniversary of the | 308 |
|
issuance of the qualified equity investment, the qualified | 309 |
|
low-income community investment shall be considered held by the | 310 |
|
qualified community development entity through the seventh | 311 |
|
anniversary of the qualified equity investment's issuance. | 312 |
| (2) The qualified low-income community investment made in any | 313 |
|
single qualified active low-income community business in this | 314 |
|
state, including such investments in any such businesses in this | 315 |
|
state related to that qualified active low-income community | 316 |
|
business through majority ownership or control, shall not exceed | 317 |
|
ten million dollars. | 318 |
| The credit shall be claimed in the order prescribed by | 319 |
|
section 5725.98 of the Revised Code. If the amount of the credit | 320 |
|
exceeds the amount of tax otherwise due after deducting all other | 321 |
|
credits in that order, the excess may be carried forward and | 322 |
|
applied to the tax due for not more than four ensuing years. | 323 |
| By claiming a tax credit under this section, an insurance | 324 |
|
company waives its rights under section 5725.222 of the Revised | 325 |
|
Code with respect to the time limitation for the assessment of | 326 |
|
taxes as it relates to credits claimed that later become subject | 327 |
|
to recapture under division (D) of section 5725.33 of the Revised | 328 |
|
Code. | 329 |
| (C) The amount of qualified equity investments on the basis | 330 |
|
of which credits may be claimed under this section, division | 331 |
|
(B)(2) of section 5729.16, and division (B)(2) of section 5733.58 | 332 |
|
of the Revised Code shall not exceed the amount, estimated by the | 333 |
|
director of development services, that would cause the total | 334 |
|
amount of credits allowed to be claimed in any fiscal year to | 335 |
|
exceed thirty-five million dollars, computed without regard to the | 336 |
|
potential for taxpayers to carry tax credits forward to later | 337 |
|
years. | 338 |
| (D)(1) Before a credit authorized under this section, | 339 |
|
division (B)(2) of section 5729.16, or division (B)(2) of section | 340 |
|
5733.58 of the Revised Code may be claimed, a qualified community | 341 |
|
development entity shall apply to the director of development | 342 |
|
services for certification of the entity's proposed qualified | 343 |
|
equity investments as eligible for the applicable credit. A | 344 |
|
completed application shall include the following: | 345 |
| (a) Evidence of the entity's certification as a qualified | 346 |
|
community development entity, including evidence that the service | 347 |
|
area of the entity includes this state; | 348 |
| (b) A copy of any current allocation agreement executed by | 349 |
|
the entity, or its controlling entity, with the community | 350 |
|
development financial institutions fund; | 351 |
| (c) A description of the proposed amount, structure, and | 352 |
|
purchaser of the qualified equity investment; | 353 |
| (d) Identifying information for any taxpayer that would be | 354 |
|
eligible to claim a credit under this section, division (B)(2) of | 355 |
|
section 5729.16, or division (B)(2) of section 5733.58 of the | 356 |
|
Revised Code upon certification and issuance of the proposed | 357 |
|
qualified equity investment; | 358 |
| (e) Information on the proposed use of proceeds from the | 359 |
|
issuance of the proposed qualified equity investment provided that | 360 |
|
such information is then available; | 361 |
| (f) A nonrefundable application fee of five thousand dollars, | 362 |
|
payable to the development services agency. | 363 |
| An entity may apply to certify any amount of a proposed | 364 |
|
qualified equity investment, provided that the proposed amount | 365 |
|
would not, upon issuance, independently of all other proposed | 366 |
|
qualified equity investments, cause the credit limit in division | 367 |
|
(C) of this section to be exceeded. The director shall certify | 368 |
|
proposed qualified equity investments up to the total amount of | 369 |
|
credits that would not cause the total amount of credits allowed | 370 |
|
to be claimed in a fiscal year to exceed the dollar amount in | 371 |
|
division (C) of this section. Subject to division (D)(3) of this | 372 |
|
section, if the investment amount in an application would cause | 373 |
|
the total amount of credits allowed to be claimed in any fiscal | 374 |
|
year to exceed such dollar amount, the director shall notify the | 375 |
|
applicant that the director is authorized to certify only the | 376 |
|
portion of the entity's proposed investment up to the allowable | 377 |
|
credit limit. The entity may withdraw its application or accept | 378 |
|
certification of that portion. | 379 |
| (2) The director shall designate a date on which the director | 380 |
|
will begin considering received applications. The director shall | 381 |
|
consider any applications received before the designated date to | 382 |
|
have been received on the designated date. | 383 |
| (3) The director shall consider applications that are | 384 |
|
received on the same day as having been received simultaneously. | 385 |
|
If the certification of the amount of proposed qualified equity | 386 |
|
investments from complete applications received simultaneously | 387 |
|
would cause the total amount of credits awarded to exceed the | 388 |
|
credit limit in division (C) of this section, the director shall | 389 |
|
certify such proposed qualified equity investments in proportion | 390 |
|
to the ratio of the amount of proposed qualified equity | 391 |
|
investments requested in each single complete application received | 392 |
|
simultaneously to the total amount of proposed qualified equity | 393 |
|
investments requested in all complete applications received | 394 |
|
simultaneously. The director shall notify the qualified community | 395 |
|
development entity that the director is authorized to certify only | 396 |
|
the portion of the entity's proposed investment up to the | 397 |
|
allowable credit limit. The entity may withdraw its application or | 398 |
|
accept certification of that portion. If the entity withdraws its | 399 |
|
application, the director shall recalculate the proportion of the | 400 |
|
proposed qualified equity investments for all remaining applicants | 401 |
|
filing complete applications simultaneously on that day by | 402 |
|
applying the ratio described in this division. | 403 |
| (4) Within thirty days after the receipt of an application, | 404 |
|
the director shall approve or deny the application in full or in | 405 |
|
part. If the director denies any part of the application because | 406 |
|
the application is found by the director to be incomplete, the | 407 |
|
director shall give the qualified community development entity | 408 |
|
written notice of the reason for the director's denial. If the | 409 |
|
entity provides the information necessary to complete the entity's | 410 |
|
application on or before fifteen days after receiving the notice, | 411 |
|
the director shall consider the application complete as of the | 412 |
|
date the entity first applied for certification. If the entity | 413 |
|
does not provide information necessary to complete its application | 414 |
|
within this fifteen-day period, the application shall remain | 415 |
|
denied, and the entity may submit a new application. | 416 |
| (5) After receiving notice of the director's approval of an | 417 |
|
entity's application, the entity shall issue each certified | 418 |
|
qualified equity investment and receive cash in the amount | 419 |
|
certified and, within ten business days after receipt of the cash, | 420 |
|
provide the director with evidence of the entity's receipt of cash | 421 |
|
in the amount certified. That amount shall be certified by the | 422 |
|
director as a qualified equity investment. | 423 |
| If a qualified community development entity does not issue a | 424 |
|
certified qualified equity investment and receive cash in the | 425 |
|
amount certified within one year after the date the entity | 426 |
|
receives notice of the director's approval of the entity's | 427 |
|
application, the director shall withdraw the director's | 428 |
|
certification of such qualified equity investment and give written | 429 |
|
notice of withdrawal to the entity. An entity whose investment | 430 |
|
certification has been so withdrawn may reapply to the director | 431 |
|
for certification under this division. If the qualified community | 432 |
|
development entity whose certification is withdrawn was subject to | 433 |
|
the limitation in division (D)(3) of this section, the amount of | 434 |
|
any such withdrawn investment shall be awarded to each entity that | 435 |
|
applied simultaneously with the withdrawn entity in proportion to | 436 |
|
the amount of certified qualified equity investments for each | 437 |
|
entity. | 438 |
| (E) Tax credits earned by a pass-through entity under this | 439 |
|
section may be allocated to persons having a direct or indirect | 440 |
|
ownership interest in the pass-through entity for such persons' | 441 |
|
direct use in proportion to such persons' ownership interest in | 442 |
|
the pass-through entity or in accordance with the provisions of | 443 |
|
any mutual agreement between such persons. | 444 |
| Sec. 5725.98. (A) To provide a uniform procedure for | 445 |
|
calculating the amount of tax imposed by section 5725.18 of the | 446 |
|
Revised Code that is due under this chapter, a taxpayer shall | 447 |
|
claim any credits and offsets against tax liability to which it is | 448 |
|
entitled in the following order: | 449 |
| (1) The credit for an insurance company or insurance company | 450 |
|
group under section 5729.031 of the Revised Code; | 451 |
| (2) The credit for eligible employee training costs under | 452 |
|
section 5725.31 of the Revised Code; | 453 |
| (3) The credit for purchasers of qualified low-income | 454 |
|
community investments under section 5725.33 of the Revised Code; | 455 |
| (4) The credit for purchasers of qualified low-income | 456 |
|
community investments under section 5725.331 of the Revised Code; | 457 |
| (5) The nonrefundable job retention credit under division | 458 |
|
(B)(1) of section 122.171 of the Revised Code; | 459 |
(5)(6) The offset of assessments by the Ohio life and health | 460 |
|
insurance guaranty association permitted by section 3956.20 of the | 461 |
|
Revised Code; | 462 |
(6)(7) The refundable credit for rehabilitating a historic | 463 |
|
building under section 5725.34 of the Revised Code. | 464 |
(7)(8) The refundable credit for Ohio job retention under | 465 |
|
division (B)(2) or (3) of section 122.171 of the Revised Code; | 466 |
(8)(9) The refundable credit for Ohio job creation under | 467 |
|
section 5725.32 of the Revised Code; | 468 |
(9)(10) The refundable credit under section 5725.19 of the | 469 |
|
Revised Code for losses on loans made under the Ohio venture | 470 |
|
capital program under sections 150.01 to 150.10 of the Revised | 471 |
|
Code. | 472 |
| (B) For any credit except the refundable credits enumerated | 473 |
|
in this section, the amount of the credit for a taxable year shall | 474 |
|
not exceed the tax due after allowing for any other credit that | 475 |
|
precedes it in the order required under this section. Any excess | 476 |
|
amount of a particular credit may be carried forward if authorized | 477 |
|
under the section creating that credit. Nothing in this chapter | 478 |
|
shall be construed to allow a taxpayer to claim, directly or | 479 |
|
indirectly, a credit more than once for a taxable year. | 480 |
| Sec. 5729.16. (A) Terms used in division (B)(1) of this | 481 |
|
section have the same meaning as in section 5725.33 of the Revised | 482 |
|
Code, and terms used in division (B)(2) of this section have the | 483 |
|
same meaning as in section 5725.331 of the Revised Code. | 484 |
| (B)(1) There is hereby allowed, pursuant to the new markets | 485 |
|
revitalization tax credit program created in section 5725.33 of | 486 |
|
the Revised Code, a nonrefundable credit against the tax imposed | 487 |
|
by section 5729.03 of the Revised Code for a foreign insurance | 488 |
|
company holding a qualified equity investment on the credit | 489 |
|
allowance date occurring in the calendar year for which the tax is | 490 |
|
due. The credit shall be computed in the same manner prescribed | 491 |
|
for the computation of credits allowed under section 5725.33 of | 492 |
|
the Revised Code. | 493 |
The(2) There is hereby allowed, pursuant to the new markets | 494 |
|
expansion tax credit program created in section 5725.331 of the | 495 |
|
Revised Code, a nonrefundable credit against the tax imposed by | 496 |
|
section 5729.03 of the Revised Code for a foreign insurance | 497 |
|
company that holds a qualified equity investment on the credit | 498 |
|
allowance date occurring in the calendar year for which the tax is | 499 |
|
due or that is allocated such a credit as provided in division (G) | 500 |
|
of section 5725.33 of the Revised Code. The credit shall be | 501 |
|
computed in the same manner prescribed for the computation of | 502 |
|
credits allowed under section 5725.331 of the Revised Code. | 503 |
| A reduction in the taxes charged to a foreign insurance | 504 |
|
company under section 5729.03 of the Revised Code to the extent | 505 |
|
obtained through a credit under division (B)(1) or (2) of this | 506 |
|
section does not increase the liability of that company for the | 507 |
|
tax imposed by section 5729.06 of the Revised Code. | 508 |
| A credit earned under division (B)(1) or (2) of this section | 509 |
|
shall be claimed in the order prescribed by section 5729.98 of the | 510 |
|
Revised Code. If the amount of the credit exceeds the amount of | 511 |
|
tax otherwise due after deducting all other credits in that order, | 512 |
|
the excess may be carried forward and applied to the tax due for | 513 |
|
not more than four ensuing years. | 514 |
| By claiming a tax credit under this section, an insurance | 515 |
|
company waives its rights under section 5729.102 of the Revised | 516 |
|
Code with respect to the time limitation for the assessment of | 517 |
|
taxes as it relates to credits claimed that later become subject | 518 |
|
to recapture under division (D) of this section. | 519 |
| (C)(1) The total amount of qualified equity investments on | 520 |
the basis of which credits may be claimedearned under division | 521 |
|
(B)(1) of this section, section 5725.33, and division (B)(1) of | 522 |
|
section 5733.58 of the Revised Code is subject to the limitation | 523 |
|
of division (C) of section 5725.33 of the Revised Code. | 524 |
| (2) The total amount of qualified equity investments on the | 525 |
|
basis of which credits may be earned under section 5725.331, | 526 |
|
division (B)(2) of this section, and division (B)(2) of section | 527 |
|
5733.58 of the Revised Code is subject to the limitation of | 528 |
|
division (C) of section 5725.331 of the Revised Code. | 529 |
(D) If any amount of the federal tax credit allowed for a | 530 |
qualified equity investment for which a credit was received under | 531 |
this section is recaptured under section 45D of the Internal | 532 |
Revenue Code, or if the director of development determines that an | 533 |
investment for which a tax credit is claimed under this section is | 534 |
not a qualified equity investment or that the proceeds of an | 535 |
investment for which a tax credit is claimed under this section | 536 |
are used to make qualified low-income community investments other | 537 |
than in a qualified active low-income community business, all or a | 538 |
portion of the credit received on account of that investment shall | 539 |
be paid by the insurance company that received the credit to the | 540 |
superintendent of insuranceAll or a portion of any credit | 541 |
|
received on account of a qualified equity investment under this | 542 |
|
section shall be paid by the insurance company that received the | 543 |
|
credit to the superintendent of insurance if any of the following | 544 |
|
situations apply: | 545 |
| (1) Any amount of a federal tax credit allowed for that | 546 |
|
qualified equity investment is recaptured under section 45D of the | 547 |
|
Internal Revenue Code; | 548 |
| (2) All or a portion of that qualified equity investment is | 549 |
|
redeemed before the final credit allowance date for the qualified | 550 |
|
equity investment; | 551 |
| (3) At least eighty-five per cent of the proceeds of that | 552 |
|
qualified equity investment are not used by the qualified | 553 |
|
community development entity to make qualified low-income | 554 |
|
community investments in qualified active low-income community | 555 |
|
businesses located in this state on or before the deadline | 556 |
|
specified in division (A)(5)(b) of section 5725.33 or division | 557 |
|
(A)(5)(c) of section 5725.331 of the Revised Code, as applicable; | 558 |
| (4) The level of investment required under division (D)(3) of | 559 |
|
this section is not maintained until the final credit allowance | 560 |
|
date, subject to the exception in division (A)(5)(b) of section | 561 |
|
5725.33 or division (A)(5)(c) of section 5725.331 of the Revised | 562 |
Code. The | 563 |
| The director of development services shall provide written | 564 |
|
notice to a qualified community development entity of the entity's | 565 |
|
noncompliance with this section. The director shall allow the | 566 |
|
entity the opportunity to cure its noncompliance within six months | 567 |
|
following the date the director gives notice before commencing | 568 |
|
recovery under this division. Following this six-month period, the | 569 |
|
amount to be recovered shall be determined by the director of | 570 |
|
development services pursuant to rules adopted under section | 571 |
|
5725.33 of the Revised Code. The director shall certify any amount | 572 |
|
due under this division to the superintendent of insurance, and | 573 |
|
the superintendent shall notify the treasurer of state of the | 574 |
|
amount due. Upon notification, the treasurer shall invoice the | 575 |
|
insurance company for the amount due. The amount due is payable | 576 |
|
not later than thirty days after the date the treasurer invoices | 577 |
|
the insurance company. The amount due shall be considered to be | 578 |
|
tax due under section 5729.03 of the Revised Code, and may be | 579 |
|
collected by assessment without regard to the time limitations | 580 |
|
imposed under section 5729.102 of the Revised Code for the | 581 |
|
assessment of taxes by the superintendent. All amounts collected | 582 |
|
under this division shall be credited as revenue from the tax | 583 |
|
levied under section 5729.03 of the Revised Code. | 584 |
| Sec. 5733.58. (A) Terms used in division (B)(1) of this | 585 |
|
section have the same meaning as in section 5725.33 of the Revised | 586 |
|
Code, and terms used in division (B)(2) of this section have the | 587 |
|
same meaning as in section 5725.331 of the Revised Code. | 588 |
| (B)(1) There is hereby allowed, pursuant to the new markets | 589 |
|
revitalization tax credit program created in section 5725.33 of | 590 |
|
the Revised Code, a nonrefundable credit against the tax imposed | 591 |
|
by section 5733.06 of the Revised Code for a financial institution | 592 |
|
holding a qualified equity investment on the credit allowance date | 593 |
|
occurring in the calendar year immediately preceding the tax year | 594 |
|
for which the tax is due. The credit shall be computed in the same | 595 |
|
manner prescribed for the computation of credits allowed under | 596 |
|
section 5725.33 of the Revised Code. | 597 |
| (2) There is hereby allowed, pursuant to the new markets | 598 |
|
expansion tax credit program created in section 5725.331 of the | 599 |
|
Revised Code, a nonrefundable credit against the tax imposed by | 600 |
|
section 5733.06 of the Revised Code for a taxpayer that holds a | 601 |
|
qualified equity investment on the credit allowance date occurring | 602 |
|
in the calendar year for which the tax is due or that is allocated | 603 |
|
such a credit as provided in division (G) of section 5725.33 of | 604 |
|
the Revised Code. The credit shall be computed in the same manner | 605 |
|
prescribed for the computation of credits allowed under section | 606 |
|
5725.331 of the Revised Code. | 607 |
| By claiming a tax credit under this section, a financial | 608 |
|
institution waives its rights under section 5733.11 of the Revised | 609 |
|
Code with respect to the time limitation for the assessment of | 610 |
|
taxes as it relates to credits claimed that later become subject | 611 |
|
to recapture under division (D) of this section. | 612 |
TheA credit allowed under division (B)(1) or (2) of this | 613 |
|
section shall be claimed in the order prescribed by section | 614 |
|
5733.98 of the Revised Code. If the amount of the credit exceeds | 615 |
|
the amount of tax otherwise due after deducting all other credits | 616 |
|
in that order, the excess may be carried forward and applied to | 617 |
|
the tax due for not more than four ensuing tax years. | 618 |
| (C)(1) The total amount of qualified equity investments on | 619 |
the basis of which credits may be claimedearned under division | 620 |
(B)(1) of this section and sections, section 5725.33, and division | 621 |
|
(B)(1) of section 5729.16 of the Revised Code is subject to the | 622 |
|
limitation of division (C) of section 5725.33 of the Revised Code. | 623 |
| (2) The total amount of qualified equity investments on the | 624 |
|
basis of which credits may be earned under section 5725.331, | 625 |
|
division (B)(2) of this section, and division (B)(2) of section | 626 |
|
5729.16 of the Revised Code is subject to the limitation of | 627 |
|
division (C) of section 5725.331 of the Revised Code. | 628 |
(D) If any amount of the federal tax credit allowed for a | 629 |
qualified equity investment for which a credit was received under | 630 |
this section is recaptured under section 45D of the Internal | 631 |
Revenue Code, or if the director of development determines that an | 632 |
investment for which a tax credit is claimed under this section is | 633 |
not a qualified equity investment or that the proceeds of an | 634 |
investment for which a tax credit is claimed under this section | 635 |
are used to make qualified low-income community investments other | 636 |
than in a qualified active low-income community business, all or a | 637 |
portion of the credit received on account of that investment shall | 638 |
be paid by the financial institution that received the credit to | 639 |
the tax commissionerAll or a portion of any credit received on | 640 |
|
account of a qualified equity investment under this section shall | 641 |
|
be paid by the financial institution that received the credit to | 642 |
|
the tax commissioner if any of the following situations apply: | 643 |
| (1) Any amount of a federal tax credit allowed for such | 644 |
|
qualified equity investment is recaptured under section 45D of the | 645 |
|
Internal Revenue Code; | 646 |
| (2) All or a portion of such qualified equity investment is | 647 |
|
redeemed prior to the final credit allowance date for the | 648 |
|
qualified equity investment; | 649 |
| (3) At least eighty-five per cent of the proceeds of such | 650 |
|
qualified equity investment are not used by the qualified | 651 |
|
community development entity to make qualified low-income | 652 |
|
community investments in qualified active low-income community | 653 |
|
businesses located in this state on or before the deadline | 654 |
|
specified in division (A)(5)(b) of section 5725.33 or division | 655 |
|
(A)(5)(c) of section 5725.331 of the Revised Code, as applicable; | 656 |
| (4) The level of investment required under division (D)(3) of | 657 |
|
this section is not maintained until the final credit allowance | 658 |
|
date, subject to the exception in division (A)(5)(b) of section | 659 |
|
5725.33 or division (A)(5)(c) of section 5725.331 of the Revised | 660 |
Code. The | 661 |
| The director of development services shall provide written | 662 |
|
notice to a qualified community development entity of the entity's | 663 |
|
noncompliance with this section. The director shall allow the | 664 |
|
entity the opportunity to cure its noncompliance within six months | 665 |
|
following the date the director gives notice before commencing | 666 |
|
recovery under this division. Following this six-month period, the | 667 |
|
amount to be recovered shall be determined by the director of | 668 |
|
development services pursuant to rules adopted under section | 669 |
|
5725.33 of the Revised Code. The director shall certify any amount | 670 |
|
due under this division to the tax commissioner, and the | 671 |
|
commissioner shall notify the financial institution of the amount | 672 |
|
due. The amount due is payable not later than thirty days after | 673 |
|
the day the commissioner issues the notice. The amount due shall | 674 |
|
be considered to be tax due under section 5733.06 of the Revised | 675 |
|
Code, and may be collected by assessment without regard to the | 676 |
|
limitations imposed under section 5733.11 of the Revised Code for | 677 |
|
the assessment of taxes by the commissioner. All amounts collected | 678 |
|
under this division shall be credited as revenue from the tax | 679 |
|
levied under section 5733.06 of the Revised Code. | 680 |
| Section 2. That existing sections 5725.33, 5725.98, 5729.16, | 681 |
|
and 5733.58 of the Revised Code are hereby repealed. | 682 |
