As Introduced

126th General Assembly Regular Session 2005-2006

H. B. No. 359

Representative Martin 

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A BILL

To amend section 5747.98 and to enact sections

1

3333.51 and 5747.81 of the Revised Code to grant

2

an income tax credit to individuals who earn

3

degrees in certain science and technology-based

4

fields of study.

5

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

Section 1. That section 5747.98 be amended and sections	6
3333.51 and 5747.81 of the Revised Code be enacted to read as	7
follows:	8

Sec. 3333.51. (A) As used in this section:

9

(1) "Approved field of study" means a field of study in	10
engineering, the natural sciences, or mathematics that the Ohio	11
board of regents determines is associated with job creation and	12
retention in Ohio.	13

(2) "Institution of higher education" means all of the	14
following:	15

(a) An institution of higher education, as defined in section	16
3345.12 of the Revised Code;	17

(b) An institution authorized by the Ohio board of regents	18
under Chapter 1713. of the Revised Code to grant degrees and that	19
is accredited by the appropriate regional, and when appropriate,	20
professional accrediting associations within whose jurisdiction it	21
falls;	22

(c) Private career schools holding program authorizations	23
issued by the state board of career colleges and schools under	24
division (C) of section 3332.05 of the Revised Code;	25

(d) Private institutions exempt from regulation under Chapter	26
3332. of the Revised Code as prescribed in section 3333.046 of the	27
Revised Code;	28

(e) Institutions similar to those described in divisions	29
(A)(2)(a) to (d) of this section that are located outside Ohio and	30
that the Ohio board of regents determines qualify as "institutions	31
of higher education" for purposes of this section.	32

(B)(1) For the purpose of encouraging students to accept	33
employment in Ohio following graduation from an institution of	34
higher education with a degree in an approved field of study, the	35
Ohio board of regents, or an entity designated by the board under	36
division (F) of this section, may authorize any such individual	37
who graduates on or after the effective date of this section to	38
claim a nonrefundable tax credit against the tax imposed by	39
section 5747.02 of the Revised Code. Except as provided in	40
division (E) of this section, the total amount of the credit shall	41
depend upon the specific type of degree earned by the individual	42
as follows:	43

(a) In the case of a baccalaureate degree, the total amount	44
of the credit shall equal twenty thousand dollars;	45

(b) In the case of a master's degree or doctoral degree, the	46
total amount of the credit shall equal thirty thousand dollars;	47

(c) In the case of an associate degree, the total amount of	48
the credit shall equal five thousand dollars.	49

(2) Unless an individual is subject to division (B)(3) of	50
this section or obtains a credit deferment pursuant to division	51
(E)(2) of this section, an individual who is approved for a credit	52
under this section shall claim one-tenth of the total credit	53
amount for the taxable year during which the individual receives	54
approval for the credit from the Ohio board of regents or the	55
board's designee and shall claim one-tenth of the total credit	56
amount for each of the succeeding nine taxable years. If the	57
individual is subject to division (B)(3) of this section, the	58
individual shall claim one-tenth of the total credit amount for	59
the taxable year during which the individual receives approval for	60
the credit from the Ohio board of regents or the board's designee	61
and shall claim one-tenth of the total credit amount in each	62
succeeding taxable year up to and including the taxable year	63
during which the individual reaches the applicable age limitation	64
specified in division (B)(3) of this section for that individual.	65

(3) The Ohio board of regents shall not authorize any	66
individual to claim a tax credit for a degree in an approved field	67
of study for any taxable year after the taxable year that includes	68
the date on which the individual attains:	69

(a) Thirty-three years of age in the case of a tax credit	70
granted with respect to an associate degree, baccalaureate degree,	71
or master's degree; and	72

(b) Thirty-five years of age in the case of a tax credit	73
granted with respect to a doctoral degree.	74

Division (B)(3) of this section applies notwithstanding any	75
credit deferment granted to an individual pursuant to division	76
(E)(2) of this section.	77

(C) To obtain the tax credit authorized under this section,	78
an individual shall submit an application to the Ohio board of	79
regents, or to any entity designated by the board under division	80
(F) of this section to receive and review applications, that	81
demonstrates that the individual graduated from an institution of	82
higher education with a degree in an approved field of study and	83
that includes any other information required by the Ohio board of	84
regents.	85

(D) After reviewing an application submitted under division	86
(C) of this section, the Ohio board of regents or the board's	87
designee shall issue a tax credit certificate to an applicant who	88
qualifies for a credit under this section. The certificate shall	89
state the total amount of the credit, the taxable years for which	90
the credit may be claimed, and the maximum amount of credit that	91
may be claimed for each taxable year, without regard to any credit	92
carry forward allowed under section 5747.81 of the Revised Code.	93

(E)(1) An individual who is issued a tax credit certificate	94
under this section may be issued additional certificates in the	95
future for additional degrees in approved fields of study granted	96
to the individual by institutions of higher education, provided	97
that an individual who is issued a tax credit certificate for a	98
master's degree or doctoral degree may not be issued additional	99
certificates for any additional degrees earned by the individual.	100

(2) An individual who is issued a tax credit certificate	101
under this section and who, during the term of the credit, enrolls	102
full time in an institution of higher education for the purpose of	103
pursuing an additional degree in an approved field of study may	104
elect to defer the claiming of the credit for the taxable years	105
during any portion of which the individual is enrolled full time.	106
An individual who elects to defer a tax credit shall apply to the	107
Ohio board of regents or the board's designee for a deferral in	108
the form and manner prescribed by the board.	109

(3) In the case of an individual who obtains an additional	110
degree in an approved field of study, the total amount of credit	111
granted to the individual with respect to every preceding degree	112
shall be deducted from the total credit amount specified in	113
division (B) of this section for degrees of the type of the	114
additional degree. The remainder is the total amount of credit	115
authorized with respect to the additional degree. The total amount	116
of credits authorized for any individual under this section with	117
respect to all degrees earned by that individual shall not exceed	118
thirty thousand dollars.	119

(4) Subject to division (B)(3) of this section, an individual	120
who is authorized to claim a credit for an additional degree in an	121
approved field of study shall claim one-tenth of the total credit	122
amount authorized with respect to the additional degree for the	123
taxable year during which the individual receives approval for the	124
additional credit from the Ohio board of regents or the board's	125
designee and shall claim one-tenth of the total credit amount for	126
each of the succeeding nine taxable years. The total amount of	127
credit that may be claimed by an individual for any taxable year	128
for all degrees earned by that individual shall not exceed three	129
thousand dollars, unless the individual has a credit carry forward	130
under section 5747.81 of the Revised Code.	131

(5) Regardless of whether or not an individual obtained a	132
deferment under division (E)(2) of this section, to apply for a	133
credit with respect to an additional degree in an approved field	134
of study and to request that such credit be added to the total	135
amount remaining with respect to a tax credit previously granted	136
under this section, an individual shall file an application in	137
accordance with division (C) of this section. The Ohio board of	138
regents or the board's designee shall issue an amended tax credit	139
certificate to an individual who qualifies for the additional	140
credit. The amended certificate shall state the total amount of	141
the credit after the new credit is added to any pre-existing	142
credit, the taxable years for which the credit may be claimed, and	143
the maximum amount of credit that may be claimed for each of those	144
taxable years, without regard to any credit carry forward allowed	145
under section 5747.81 of the Revised Code.	146

(F) The Ohio board of regents may designate an entity,	147
including, but not limited to, a nonprofit private organization,	148
to perform the duties conferred upon the board by this section. An	149
entity designated by the board shall perform those duties in	150
accordance with the requirements of this section and rules adopted	151
by the board pursuant to division (G) of this section.	152

(G) The Ohio board of regents, under Chapter 119. of the	153
Revised Code, shall adopt rules necessary to implement and	154
administer this section, including rules:	155

(1) Identifying fields of study that constitute "approved	156
fields of study";	157

(2) Specifying information to be included on applications for	158
a tax credit under division (C) of this section, for applications	159
for deferral of a tax credit under division (E)(2) of this	160
section, and applications for addition of a new credit to a	161
pre-existing credit under division (E)(5) of this section; and	162

(3) Identifying institutions located outside Ohio that	163
constitute "institutions of higher education."	164

In identifying those fields of study that constitute	165
"approved fields of study," the board shall give priority to those	166
related to information technology, power and propulsion, advanced	167
materials, instruments and controls, electronics, and	168
biotechnology and biosciences.	169

Sec. 5747.81. Upon the issuance of a tax credit certificate	170
under section 3333.51 of the Revised Code, a nonrefundable credit	171
may be claimed against the tax imposed by section 5747.02 of the	172
Revised Code. The credit shall be claimed for the taxable years	173
specified in the certificate in the order required under section	174
5747.98 of the Revised Code. The amount of the credit for any	175
taxable year, claimed in that order, shall not exceed the tax	176
otherwise due under section 5747.02 of the Revised Code after all	177
of the taxpayer's credits are deducted in that order. If the	178
credit to which a taxpayer would otherwise be entitled under this	179
section for any taxable year is greater than the tax otherwise	180
due, after allowing for any other credits that precede the credit	181
allowed under this section, the excess shall be allowed as a	182
credit in each ensuing taxable year for which the taxpayer's tax	183
credit certificate authorizes the taxpayer to claim a credit. The	184
amount of any excess credit allowed in an ensuing taxable year	185
shall be deducted from the balance carried forward to the next	186
taxable year. No credit carry forward may be claimed under this	187
section for any taxable year after the last taxable year for which	188
the taxpayer is authorized to claim a credit under the	189
certificate.	190

Sec. 5747.98.  (A) To provide a uniform procedure for	191
calculating the amount of tax due under section 5747.02 of the	192
Revised Code, a taxpayer shall claim any credits to which the	193
taxpayer is entitled in the following order:	194

(1) The retirement income credit under division (B) of	195
section 5747.055 of the Revised Code;	196

(2) The senior citizen credit under division (C) of section	197
5747.05 of the Revised Code;	198

(3) The lump sum distribution credit under division (D) of	199
section 5747.05 of the Revised Code;	200

(4) The dependent care credit under section 5747.054 of the	201
Revised Code;	202

(5) The lump sum retirement income credit under division (C)	203
of section 5747.055 of the Revised Code;	204

(6) The lump sum retirement income credit under division (D)	205
of section 5747.055 of the Revised Code;	206

(7) The lump sum retirement income credit under division (E)	207
of section 5747.055 of the Revised Code;	208

(8) The low-income credit under section 5747.056 of the	209
Revised Code;	210

(9) The credit for displaced workers who pay for job training	211
under section 5747.27 of the Revised Code;	212

(10) The campaign contribution credit under section 5747.29	213
of the Revised Code;	214

(11) The twenty-dollar personal exemption credit under	215
section 5747.022 of the Revised Code;	216

(12) The joint filing credit under division (G) of section	217
5747.05 of the Revised Code;	218

(13) The nonresident credit under division (A) of section	219
5747.05 of the Revised Code;	220

(14) The credit for a resident's out-of-state income under	221
division (B) of section 5747.05 of the Revised Code;	222

(15) The credit for employers that enter into agreements with	223
child day-care centers under section 5747.34 of the Revised Code;	224

(16) The credit for employers that reimburse employee child	225
care expenses under section 5747.36 of the Revised Code;	226

(17) The credit for adoption of a minor child under section	227
5747.37 of the Revised Code;	228

(18) The credit for purchases of lights and reflectors under	229
section 5747.38 of the Revised Code;	230

(19) The job retention credit under division (B) of section	231
5747.058 of the Revised Code;	232

(20) The credit granted under sections 3333.51 and 5747.81 of	233
the Revised Code for obtaining a degree in engineering, the	234
natural sciences, or mathematics from an institution of higher	235
education;	236

(21) The credit for losses on loans made under the Ohio	237
venture capital program under sections 150.01 to 150.10 of the	238
Revised Code if the taxpayer elected a nonrefundable credit under	239
section 150.07 of the Revised Code;	240

(21)(22) The credit for purchases of new manufacturing	241
machinery and equipment under section 5747.26 or section 5747.261	242
of the Revised Code;	243

(22)(23) The second credit for purchases of new manufacturing	244
machinery and equipment and the credit for using Ohio coal under	245
section 5747.31 of the Revised Code;	246

(23)(24) The job training credit under section 5747.39 of the	247
Revised Code;	248

(24)(25) The enterprise zone credit under section 5709.66 of	249
the Revised Code;	250

(25)(26) The credit for the eligible costs associated with a	251
voluntary action under section 5747.32 of the Revised Code;	252

(26)(27) The credit for employers that establish on-site	253
child day-care centers under section 5747.35 of the Revised Code;	254

(27)(28) The ethanol plant investment credit under section	255
5747.75 of the Revised Code;	256

(28)(29) The credit for purchases of qualifying grape	257
production property under section 5747.28 of the Revised Code;	258

(29)(30) The export sales credit under section 5747.057 of	259
the Revised Code;	260

(30)(31) The credit for research and development and	261
technology transfer investors under section 5747.33 of the Revised	262
Code;	263

(31)(32) The enterprise zone credits under section 5709.65 of	264
the Revised Code;	265

(32)(33) The research and development credit under section	266
5747.331 of the Revised Code;	267

(33)(34) The refundable jobs creation credit under division	268
(A) of section 5747.058 of the Revised Code;	269

(34)(35) The refundable credit for taxes paid by a qualifying	270
entity granted under section 5747.059 of the Revised Code;	271

(35)(36) The refundable credits for taxes paid by a	272
qualifying pass-through entity granted under division (J) of	273
section 5747.08 of the Revised Code;	274

(36)(37) The refundable credit for tax withheld under	275
division (B)(1) of section 5747.062 of the Revised Code;	276

(37)(38) The credit for losses on loans made to the Ohio	277
venture capital program under sections 150.01 to 150.10 of the	278
Revised Code if the taxpayer elected a refundable credit under	279
section 150.07 of the Revised Code.	280

(B) For any credit, except the credits enumerated in	281
divisions (A)(33) to (37)(38) of this section and the credit	282
granted under division (I) of section 5747.08 of the Revised Code,	283
the amount of the credit for a taxable year shall not exceed the	284
tax due after allowing for any other credit that precedes it in	285
the order required under this section. Any excess amount of a	286
particular credit may be carried forward if authorized under the	287
section creating that credit. Nothing in this chapter shall be	288
construed to allow a taxpayer to claim, directly or indirectly, a	289
credit more than once for a taxable year.	290

Section 2. That existing section 5747.98 of the Revised Code	291
is hereby repealed.	292