SB 110: Modify tax credits under the rural business growth program

As Introduced

136th General Assembly Regular Session 2025-2026

S. B. No. 110

Senators Cirino, Chavez

To amend sections 122.15, 122.151, 122.152, 1
122.153, 122.154, 122.155, 5725.98, and 5729.98 2
of the Revised Code to modify the availability 3
of and eligibility for tax credits awarded under 4
the rural business growth program. 5

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

Section 1. That sections 122.15, 122.151, 122.152, 6
122.153, 122.154, 122.155, 5725.98, and 5729.98 of the Revised 7
Code be amended to read as follows: 8
Sec. 122.15. As used in this section and sections 122.151 9
to 122.156 of the Revised Code: 10
(A) "Affiliate" means a person that directly, or 11
indirectly through one or more intermediaries, controls, is 12
controlled by, or is under common control with another person. 13
For the purposes of this division, a person is "controlled by" 14
another person if the controlling person holds, directly or 15
indirectly, the majority voting or ownership interest in the 16
controlled person or has control over the day-to-day operations 17
of the controlled person by contract or by law. 18
(B) "Border county" means a county in this state that 19
borders another state. 20

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(C) "Closing date" means the date on which a rural 21
business growth fund has collected all of the amounts specified 22
by divisions (G)(1) and (2) of section 122.151 of the Revised 23
Code. 24
(D) "Credit-eligible capital contribution" means an 25
investment of cash by a person subject to the tax imposed by 26
section 3901.86, 5725.18, 5729.03, or 5729.06 of the Revised 27
Code in a rural business growth fund that equals the amount 28
specified on a notice of tax credit allocation issued by the 29
department of development under division (I)(1) of section 30
122.151 of the Revised Code. The investment shall purchase an 31
equity interest in the fund or purchase, at par value or 32
premium, a debt instrument issued by the fund that meets all of 33
the following criteria: 34
(1) The debt instrument has an original maturity date of 35
at least five years after the date of issuance. 36
(2) The debt instrument has a repayment schedule that is 37
not faster than a level principal amortization over five years. 38
(3) The debt instrument has no interest, distribution, or 39
payment features dependent on the fund's profitability or the 40
success of the fund's growth investments. 41
(E) "Eligible investment authority" means the amount 42
stated on the notice issued under division (F) of section 43
122.151 of the Revised Code certifying the rural business growth 44
fund. Sixty per cent of a fund's eligible investment authority 45
shall be comprised of credit-eligible capital contributions. 46
(F) "Full-time equivalent employee" means the quotient 47
obtained by dividing the total number of hours for which 48
employees were compensated for employment over the preceding 49

S. B. No. 110 As Introduced

welve-month period by two thousand eighty. 50

(G) "Growth investment" means any capital or equity 51
investment in a rural business concern or any loan to a rural 52
business concern with a stated maturity of at least one year, 53
excluding any investment used by a rural business concern or its 54
affiliates to refinance or buy out a prior growth investment. A 55
secured loan or the provision of a revolving line of credit to a 56
rural business concern is a growth investment only if the rural 57
business growth fund obtains an affidavit from the president or 58
chief executive officer of the rural business concern attesting 59
that the rural business concern sought and was denied similar 60
financing from a commercial bank. 61
(H) "Operating company" means any business that has its 62
principal business operations in this state, for program one and 63
program two has fewer than two hundred fifty employees and or 64
for program three has fewer than two hundred ninety-nine 65
employees, has not more than fifteen million dollars in net 66
income for the preceding taxable year, and that is none of the 67
following: 68
(1) A country club; 69
(2) A racetrack or other facility used for gambling; 70
(3) A store the principal purpose of which is the sale of 71
alcoholic beverages for consumption off premises; 72
(4) A massage parlor; 73
(5) A hot tub facility; 74
(6) A suntan facility; 75
(7) A business engaged in the development or holding of 76
intangibles for sale; 77

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(8) A private or commercial golf course; 78

(9) A business that derives or projects to derive fifteen 79
per cent or more of its net income from the rental or sale of 80
real property, except any business that is a special purpose 81
entity principally owned by a principal user of that property 82
formed solely for the purpose of renting, either directly or 83
indirectly, or selling real property back to such principal user 84
if such principal user does not derive fifteen per cent or more 85
of its gross annual revenue from the rental or sale of real 86
property; 87
(10) A publicly traded business. 88
For the purposes of this division, "net income" means 89
federal gross income as required to be reported under the 90
Internal Revenue Code less federal and state taxes imposed on or 91
measured by income. 92
(I) "Population" means that shown by the most recent 93
decennial census or the most recent annual population estimate 94
published or released by the United States census bureau, 95
whichever is more recent. 96
(J) A business's "principal business operations" are in 97
this state if at least eighty per cent of the business's 98
employees reside in this state, the individuals who receive 99
eighty per cent of the business's payroll reside in this state, 100
or the business has agreed to use the proceeds of a growth 101
investment to relocate at least eighty per cent of its employees 102
to this state or pay at least eighty per cent of its payroll to 103
individuals residing in this state. For the purpose of growth 104
investments by a program two or program three rural business 105
growth fund, a business's "principal business operations" are 106

S. B. No. 110 As Introduced

also in this state if it is headquartered in a border county and 107
at least sixty-five per cent of the business's employees reside 108
in this state, the individuals who receive sixty-five per cent 109
of the business's payroll reside in this state, or the business 110
has agreed to use the proceeds of a growth investment to 111
relocate at least sixty-five per cent of its employees to this 112
state or pay at least sixty-five per cent of its payroll to 113
individuals residing in this state. 114
(K) "Program one" refers to rural business growth funds 115
certified by the department of development under section 122.151 116
of the Revised Code before the effective date of this amendment 117
September 30, 2021. 118
(L) "Program two" refers to rural business growth funds 119
certified by the department of development under section 122.151 120
of the Revised Code on or after the effective date of this 121
amendment September 30, 2021, but before the effective date of 122
this amendment. 123
(M) "Program three" refers to rural business growth funds 124
certified by the department of development under section 122.151 125
of the Revised Code on or after the effective date of this 126
amendment. 127
(N) "Rural area" means any county in this state having a 128
population less than two hundred thousand. 129
(N) (O) "Rural business concern" means an operating 130
company that has its principal business operations located in a 131
rural area. 132
(O) (P) "Rural business growth fund" and "fund" mean an 133
entity certified by the department of development under section 134
122.151 of the Revised Code. 135

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(P) (Q) "Taxable year" means the calendar year ending on 136
the thirty-first day of December next preceding the day the 137
annual statement is required to be returned under section 138
5725.18 or 5729.02 of the Revised Code. 139
(Q) (R) "Tier one rural area" means any county in this 140
state having a population less than two hundred thousand and 141
more than one hundred fifty thousand. 142
(R) (S) "Tier two rural area" means any county in this 143
state having a population of more than seventy-five thousand but 144
not more than one hundred fifty thousand. 145
$\leftrightsquigarrow$ (T) "Tier three rural area" means any county in this 146
state having a population of not more than seventy-five 147
thousand. 148
(U) "Tier four rural area" means any county in the 149
Appalachian region, as that term is defined in section 107.21 of 150
the Revised Code. 151
Sec. 122.151. (A) A person that has developed a business 152
plan to invest in rural business concerns in this state and has 153
successfully solicited private investors to make credit-eligible 154
capital contributions in support of the plan may apply to the 155
department of development for certification as a rural business 156
growth fund. The application shall include all of the following: 157
(1) The total eligible investment authority sought by the 158
applicant under the business plan; 159
(2) Documents and other evidence sufficient to prove, to 160
the satisfaction of the agency, that the applicant meets all of 161
the following criteria: 162
(a) The applicant or an affiliate of the applicant is 163

S. B. No. 110 As Introduced

licensed as a rural business investment company under 7 U.S.C. 164
$2009\mathtt{C C}$ , or as a small business investment company under 15 165
U.S.C. 681. 166
(b) As of the date the application is submitted, the 167
applicant has invested more than one hundred million dollars in 168
operating companies, including at least fifty million dollars in 169
operating companies located in rural areas. In computing 170
investments under this division, the applicant may include 171
investments made by affiliates of the applicant and investments 172
made in businesses that are not operating companies but would 173
qualify as operating companies if the principal business 174
operations were located in this state. 175
(3) The industries in which the applicant proposes to make 176
growth investments and the percentage of the growth investments 177
that will be made in each industry. The applicant shall identify 178
each industry by using the codes utilized by the north American 179
industry classification system. 180
(4) An estimate of the number of new full-time equivalent 181
employees and retained full-time equivalent employees that will 182
result from the applicant's growth investments; 183
(5) A revenue impact assessment for the applicant's 184
proposed growth investments prepared by a nationally recognized 185
third-party independent economic forecasting firm using a 186
dynamic economic forecasting model. The revenue impact 187
assessment shall analyze the applicant's business plan over the 188
ten years following the date the application is submitted to the 189
agency. 190
(6) A signed affidavit from each investor successfully 191
solicited by the applicant to make a credit eligible capital 192

S. B. No. 110 As Introduced

contribution in support of the business plan. Each affidavit 193
shall include information sufficient for the agency and the 194
superintendent of insurance to identify the investor and shall 195
state the amount of the investor's credit-eligible capital 196
contribution. 197
(7) A nonrefundable application fee of five thousand 198
dollars. 199
(B)(1) Except as provided in division (B)(2) of this 200
section, the agency shall review and make a determination with 201
respect to each application submitted under division (A) of this 202
section within sixty days of receipt. The agency shall review 203
and make determinations on the applications in the order in 204
which the applications are received by the agency. Applications 205
received by the agency on the same day shall be deemed to have 206
been received simultaneously. The agency shall approve not more 207
than seventy-five million dollars in eligible investment 208
authority and not more than forty-five million dollars in 209
credit-eligible capital contributions under this section for 210
program one rural business growth funds. The agency shall 211
approve not more than seventy-five million dollars in eligible 212
investment authority and not more than forty-five million 213
dollars in credit-eligible contributions under this section for 214
program two rural business growth funds. The agency shall 215
approve not more than one hundred fifty million dollars in 216
eligible investment authority and not more than ninety million 217
dollars in credit-eligible contributions under this section for 218
program three rural business growth funds. 219

(2) If the agency denies an application for certification as a fund, and approving a subsequently submitted application would result in exceeding the dollar limitation on eligible

S. B. No. 110 As Introduced

investment authority or credit-eligible contributions prescribed 223
by division (B)(1) of this section assuming the previously 224
denied application were completed, clarified, or cured under 225
division (D) of this section, the agency shall refrain from 226
making a determination on the subsequently submitted application 227
until the previously denied application is reconsidered or the 228
fifteen-day period for submitting additional information 229
respecting that application has passed, whichever comes first. 230
(C) The agency shall deny an application submitted under 231
this section if any of the following are true: 232
(1) The application is incomplete. 233
(2) The application fee is not paid in full. 234
(3) The applicant does not satisfy all the criteria 235
described in division (A)(2) of this section. 236
(4) The revenue impact assessment submitted under division 237
(A)(5) of this section does not demonstrate that the applicant's 238
business plan will result in a positive economic impact on this 239
state over a ten-year period that exceeds the cumulative amount 240
of tax credits that would be issued under section 122.152 of the 241
Revised Code if the application were approved. 242
(5) The credit-eligible capital contributions described in 243
affidavits submitted under division (A)(6) of this section do 244
not equal sixty per cent of the total amount of eligible 245
investment authority sought under the applicant's business plan. 246
(6) The agency has already approved the maximum total 247
eligible investment authority and credit-eligible capital 248
contributions allowed under division (B) of this section. 249
(D) If the agency denies an application under division (C) 250

S. B. No. 110 As Introduced

of this section, the agency shall send notice of its 251
determination to the applicant. The notice shall include the 252
reason or reasons that the application was denied. If the 253
application was denied for any reason other than the reason 254
specified in division (C)(6) of this section, the applicant may 255
provide additional information to the agency to complete, 256
clarify, or cure defects in the application. The additional 257
information must be submitted within fifteen days after the date 258
the notice of denial was dispatched by the agency. If the person 259
submits additional information within fifteen days, the agency 260
shall reconsider the application within thirty days after 261
receiving the additional information. The application shall be 262
reviewed and considered before any pending application submitted 263
after the original submission date of the reconsidered 264
application. If the person does not submit additional 265
information within fifteen days after dispatch of the notice of 266
denial, the person may submit a new application with a new 267
submission date at any time. 268
(E) If approving multiple simultaneously submitted 269
applications would result in exceeding the overall eligible 270
investment limit prescribed by division (B) of this section, the 271
agency shall proportionally reduce the eligible investment 272
authority and the credit-eligible capital contributions for each 273
approved application as necessary to avoid exceeding the limit. 274
(F) The agency shall not deny a rural business growth fund 275
application or reduce the requested eligible investment 276
authority for reasons other than those described in divisions 277
(C) and (E) of this section. If the agency approves such an 278
application, the agency shall issue a written notice to the 279
applicant certifying that the applicant qualifies as a rural 280
business growth fund and specifying the amount of the 281

S. B. No. 110 As Introduced

applicant's eligible investment authority. 282

(G) A fund shall do all of the following within sixty days 283
after receiving the certification issued under division (F) of 284
this section: 285
(1) Collect the credit-eligible capital contributions from 286
each investor whose affidavit was included in the application. 287
If the rural business growth fund's requested eligible 288
investment authority is proportionally reduced under division 289
(E) of this section, the investor's required credit-eligible 290
capital contribution shall be reduced by the same proportion. 291

(2) Collect one or more investments of cash that, when added to the contributions collected under division (G)(1) of this section, equal the fund's eligible investment authority. At least ten per cent of the fund's eligible investment authority shall be comprised of equity investments contributed directly or indirectly by affiliates of the fund, including employees, officers, and directors of such affiliates.

(H) Within sixty-five days after receiving the certification issued under division (F)(1) of this section, the fund shall send to the agency documentation sufficient to prove that the amounts described in divisions (G)(1) and (2) of this section have been collected. The fund shall identify any affiliate of an investor described in division (G)(1) of this section that will seek to claim the credit allowed by section 122.152 of the Revised Code. If the fund fails to fully comply with division (G) of this section, the fund's certification shall lapse.

Eligible investment authority and corresponding crediteligible capital contributions that lapse under this division do

S. B. No. 110 As Introduced

not count toward limits on total eligible investment authority 311
and credit-eligible capital contributions prescribed by division 312
(B) of this section. Once eligible investment authority has 313
lapsed, the agency shall first award lapsed authority pro rata 314
to each fund that was awarded less than the requested eligible 315
investment authority because of the operation of division (E) of 316
this section. Any remaining eligible investment authority may be 317
awarded by the agency to new applicants. 318
(I) After receiving documentation sufficient to prove that 319
the amounts described in divisions (G)(1) and (2) of this 320
section have been collected, the agency shall issue the 321
following notices: 322
(1) To each investor or affiliate identified in division 323
(H) of this section, a notice of the amount and utilization 324
schedule of the tax credits allocated to that investor or 325
affiliate as a result of its credit-eligible capital 326
contribution; 327
(2) To the superintendent of insurance, a notice of the 328
amount and utilization schedule of the tax credits allocated to 329
each investor described in division (G)(1) of this section and 330
any affiliate of such investor who will seek to claim the credit 331
allowed by section 122.152 of the Revised Code. 332
(J) Application fees submitted to the agency pursuant to 333
division (A)(7) of this section shall be credited to the tax 334
incentives operating fund created under section 122.174 of the 335
Revised Code, and shall be used by the agency to administer 336
sections 122.15 to 122.156 of the Revised Code. 337
Sec. 122.152. (A) There is hereby allowed a nonrefundable 338
tax credit for owners of tax credit certificates issued by the 339

S. B. No. 110 As Introduced

development services agency under division (B) of this section. 340
The credit may be claimed against the tax imposed by section 341
3901.86, 5725.18, 5729.03, or 5729.06 of the Revised Code. 342

(B) On the closing date, a taxpayer that made a crediteligible capital contribution to a rural business growth fund shall be eligible for a credit equal to the amount specified in the notice issued under division (I)(1) of section 122.151 of the Revised Code. On or before the third, fourth, fifth, and sixth anniversary dates of the closing date, the agency shall issue a tax credit certificate to the taxpayer specifying the corresponding anniversary date and a credit amount equal to onefourth of the total credit authorized under this section. The taxpayer or its identified affiliate may claim the credit amount for the taxable year that includes the date specified on the certificate. The taxpayer making a credit-eligible capital contribution and the issuance of a tax credit certificate by the agency does not represent a verification or certification by the agency of compliance with the recapture provisions of section 122.153 of the Revised Code. The tax credit issued under this division is subject to recapture under section 122.153 of the Revised Code.

(C) The credit shall be claimed in the order required 361
under section 5725.98 or 5729.98 of the Revised Code as 362
applicable. If the amount of the credit for a taxable year 363
exceeds the tax otherwise due for that year, the excess may be 364
carried forward for not more than four ensuing taxable years for 365
tax credits issued under program one and program two, and not 366
more than two ensuing taxable years for tax credits issued under 367
program three. A taxpayer claiming a credit under this section 368
shall submit a copy of the tax credit certificate with the 369
taxpayer's annual statement for each taxable year in which the 370

S. B. No. 110 As Introduced

credit is claimed. 371
Sec. 122.153. (A) The department of development shall not 372
be required to issue a tax credit certificate under section 373
122.152 of the Revised Code if either any of the following 374
applies: 375
(1) The credit-eligible capital contribution was made in a 376
program one rural business growth fund that fails to: 377
(a) Invest fifty per cent of its eligible investment 378
authority in growth investments within one year of the closing 379
date; and 380
(b) Invest one hundred per cent of its eligible investment 381
authority in growth investments in this state within two years 382
of the closing date. 383
(2) The credit eligible contribution was made in a program 384
two rural business growth fund that fails to: 385
(a) Invest twenty-five per cent of its eligible investment 386
authority in growth investments within one year of the closing 387
date; 388
(b) Invest fifty per cent of its eligible investment 389
authority in growth investments within two years of the closing 390
date; and 391
(c) Invest one hundred per cent of its eligible investment 392
authority in growth investments within three years of the 393
closing date, including seventy-five per cent of its eligible 394
investment authority in rural business concerns that have their 395
principal business operations in tier two or tier three rural 396
areas, and twenty-five per cent of its eligible investment 397
authority in rural business concerns that have their principal 398

S. B. No. 110 As Introduced

business operations in tier three rural areas. The amount by 399
which a rural business growth fund's growth investments in rural 400
business concerns that have their principal business operations 401
in tier one rural areas exceeds twenty-five per cent of the 402
fund's eligible investment authority shall not count towards the 403
satisfaction of the requirements prescribed by division (A)(2) 404
(c) of this section. 405
(3) The credit eligible contribution was made in a program 406
three rural business growth fund that fails to: 407
(a) Invest twenty-five per cent of its eligible investment 408
authority in growth investments within one year of the closing 409
date; 410
(b) Invest fifty per cent of its eligible investment 411
authority in growth investments within two years of the closing 412
date; and 413
(c) Invest one hundred per cent of its eligible investment 414
authority in growth investments within three years of the 415
closing date, including not less than fifty per cent of its 416
eligible investment authority in rural business concerns that 417
have their principal business operations in tier four rural 418
areas, and not less than seventy-five per cent of its eligible 419
investment authority in rural business concerns that have their 420
principal business operations in tier two, tier three, or tier 421
four rural areas. The amount by which a rural business growth 422
fund's growth investments in rural business concerns that have 423
their principal business operations in tier one rural areas 424
exceeds twenty-five per cent of the fund's eligible investment 425
authority shall not count towards the satisfaction of the 426
requirements prescribed by division (A)(3)(c) of this section. 427

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(B) The agency shall recapture tax credits claimed under 428
section 122.152 of the Revised Code if any of the following 429
occur with respect to the rural business growth fund: 430

(1) The fund, after investing one hundred per cent of its eligible investment authority in growth investments in this state, fails to maintain that investment until the sixth anniversary of the closing date. For the purposes of this division, an investment is maintained even if the investment is sold or repaid so long as the fund reinvests an amount equal to the capital returned or recovered by the fund from the original investment, exclusive of any profits realized, in other growth investments in this state within one year of the receipt of such capital.

(2) The fund makes a distribution or payment after the fund complies with division (G) of section 122.151 of the Revised Code and before the fund decertifies under division (D) (E) of this section that results in the fund having less than one hundred per cent of its eligible investment authority invested in growth investments in this state.

(3) The fund makes a growth investment in a rural business concern that directly or indirectly through an affiliate owns, has the right to acquire an ownership interest, makes a loan to, or makes an investment in the fund, an affiliate of the fund, or an investor in the fund. Division (A)(3) (B)(3) of this section does not apply to investments in publicly traded securities by a rural business concern or an owner or affiliate of a rural business concern.

Before recapturing one or more tax credits under this 455
division, the agency shall notify the fund of the reasons for 456
the pending recapture. If the fund corrects the violations 457

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outlined in the notice to the satisfaction of the agency within 458
thirty days of the date the notice was dispatched, the agency 459
shall not recapture the tax credits. 460

(C)(1) The amount by which one or more growth investments by a program one rural business growth fund in the same rural business concern exceeds twenty per cent of the fund's eligible investment authority shall not be counted as a growth investment for the purposes of this section. The amount by which one or more growth investments by a program two rural business growth fund in the same business concern exceeds five million dollars shall not be counted as a growth investment for the purposes of this section. The amount by which one or more growth investments by a program three rural business growth fund in the same business concern exceeds seven million five hundred thousand dollars shall not be counted as a growth investment for purposes of this section. A growth investment returned or repaid by a rural business concern to a program one or , program two, or program three rural business growth fund and then reinvested by the fund in the same rural business concern does not count as an investment in the same rural business concern for the purposes of the limitations prescribed by division (C)(1) of this section.

(2) The aggregate amount of growth investments by all 480
rural business growth funds in the same rural business concern, 481
including amounts reinvested in a rural business concern 482
following a returned or repayment of a growth investment, shall 483
not exceed fifteen million dollars. 484
(3) A growth investment in an affiliate of a rural 485
business concern shall be treated as a growth investment in that 486
rural business concern for the purposes of division (C) of this 487

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section. 488

(D) If the agency recaptures a tax credit under this 489
section, the agency shall notify the superintendent of insurance 490
of the recapture. The superintendent shall make an assessment 491
under Chapter 5725. or 5729. of the Revised Code for the amount 492
of the credit claimed by each certificate owner associated with 493
the fund before the recapture was finalized. The time 494
limitations on assessments under those chapters do not apply to 495
an assessment under this division, but the superintendent shall 496
make the assessment within one year after the date the agency 497
notifies the superintendent of the recapture. Following the 498
recapture of a tax credit under this section, no tax credit 499
certificate associated with the fund may be utilized. 500
Notwithstanding division (B) of section 122.152 of the Revised 501
Code, if a tax credit is recaptured under this section the 502
agency shall not issue future tax credit certificates to 503
taxpayers that made credit-eligible capital contributions to the 504
fund. 505
(E)(1) On or after the sixth anniversary of the closing 506
date, a fund that has not committed any of the acts described in 507
division (B) of this section may apply to the agency to 508
decertify as a rural business growth fund. The agency shall 509
respond to the application within sixty days after receiving the 510
application. In evaluating the application, the fact that no tax 511
credit has been recaptured with respect to the fund shall be 512
sufficient evidence to prove that the fund is eligible for 513
decertification. The agency shall not unreasonably deny an 514
application submitted under this division. 515
(2) The agency shall send notice of its determination with 516
respect to an application submitted under division (E)(1) of 517

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this section to the fund. If the application is denied, the 518
notice shall include the reason or reasons for the 519
determination. 520
(3) The agency shall not recapture a tax credit due to any 521
actions of a fund that occur after the date the fund's 522
application for decertification is approved. Division (E)(3) of 523
this section does not prohibit the agency from recapturing a tax 524
credit due to the actions of a fund that occur before the date 525
the fund's application for decertification is approved, even if 526
those actions are discovered after that date. 527
Sec. 122.154. (A) Each rural business growth fund shall 528
submit a report to the department of development on or before 529
the first day of each March following the end of the calendar 530
year that includes the closing date until the calendar year 531
after the fund has decertified. The report shall provide an 532
itemization of the fund's growth investments and shall include 533
the following documents and information: 534
(1) A bank statement evidencing each growth investment; 535
(2) The name, location, and industry class of each 536
business that received a growth investment from the fund and 537
evidence that the business qualified as a rural business concern 538
at the time the investment was made. If the fund obtained a 539
written opinion from the agency on the business's status as a 540
rural business concern under section 122.156 of the Revised 541
Code, or if the fund makes a written request for such an opinion 542
and the agency failed to respond within thirty days as required 543
by that section, a copy of the agency's favorable opinion or a 544
dated copy of the fund's unanswered request, as applicable, 545
shall be sufficient evidence that the business qualified as a 546
rural business concern at the time the investment was made. 547

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(3) The number of employment positions that existed at 548
each business described in division (A)(2) of this section on 549
the date the business received the growth investment; 550
(4) The number of new full-time equivalent employees 551
resulting from each of the fund's growth investments made or 552
maintained in the preceding calendar year; 553

(5) Any other information required by the agency.

(B) Each fund shall submit a report to the agency on or before the fifth business day after the first, second, and for program two and program three funds, third anniversaries of the closing date that provides documentation sufficient to prove that the fund has met the investment thresholds described in division (A) of section 122.153 of the Revised Code and has not implicated any of the other recapture provisions described in division (B) of that section.

(C) Each certified rural business growth fund shall pay 563
the agency an annual fee of twenty thousand dollars. The initial 564
annual fee required of a fund shall be due and payable to the 565
agency along with the submission of documentation required under 566
division (H) of section 122.151 of the Revised Code. Each 567
subsequent annual fee is due and payable on the last day of 568
February following the first and each ensuing anniversary of the 569
closing date. If the fund is required to submit an annual report 570
under division (A) of this section, the annual fee shall be 571
submitted along with the report. No fund shall be required to 572
pay an annual fee after the fund has decertified under section 573
122.153 of the Revised Code. Annual fees paid to the agency 574
under this section shall be credited to the tax incentives 575
operating fund created under section 122.174 of the Revised 576
Code. 577

S. B. No. 110 As Introduced

(D) The director of development, after consultation with 578
the superintendent of insurance and in accordance with Chapter 579
119. of the Revised Code, may adopt rules necessary to implement 580
sections 122.15 to 122.156 of the Revised Code. 581

Sec. 122.155. (A)(1) For each calendar year in which a rural business growth fund makes or maintains a growth investment in a rural business concern in this state, the fund shall determine the number of new full-time equivalent employees produced at the business concern as a result of the investment. New full-time equivalent employees shall be computed by subtracting the number of full-time equivalent employees at the rural business concern on the date of the fund's initial growth investment in the rural business concern from the number of full-time equivalent employees at the rural business concern on the last day of the calendar year. If the computation results in a number less than zero, the number of new full-time equivalent employees, produced by the fund's growth investment for that calendar year period shall be zero. Only employees with an hourly wage rate of at least one hundred fifty per cent of the federal minimum wage may be considered in computing the number of new full-time equivalent employees for the purposes of this section.

(2) A fund may determine and include, for the purposes of 600
this section and section 122.154 of the Revised Code, the number 601
of new full-time equivalent employees produced at a rural 602
business concern after the year in which the fund's growth 603
investment is repaid or redeemed. The new full-time equivalent 604
employees shall be computed in the same manner as in division 605
(A)(1) of this section based on reporting information provided 606
by the rural business concern to the fund. 607

S. B. No. 110 As Introduced

(B) After a fund's application for decertification is approved under section 122.153 of the Revised Code, the fund shall determine the state reimbursement amount. The state reimbursement amount for program one and program two shall equal the amount by which the fund's credit-eligible capital contributions exceed the product obtained by multiplying thirty thousand dollars by the aggregate number of new full-time equivalent employees for the fund. The state reimbursement amount for program three shall equal the amount by which the fund's credit-eligible capital contributions exceed the product obtained by multiplying thirty thousand dollars by the aggregate number of new full-time equivalent employees for the fund for investments located in tier one or tier two rural areas and by multiplying sixty thousand dollars by the aggregate number of new full-time equivalent employees for the fund for investments located in tier three or tier four rural areas. If that product is greater than the fund's credit-eligible capital contributions, the state reimbursement amount shall equal zero. In the absence of additional information provided by the fund or discovered by the agency, the number of new full-time equivalent employees for the purposes of this division equals the sum of all new full-time equivalent employees reported by the fund on the annual reports required under section 122.154 of the Revised Code.

(C) After the state reimbursement amount is computed under division (B) of this section, the fund shall not be permitted to make further any distributions to equity holders of the fund, including investors that are equity holders of the funds without first remitting , in excess of the fund's net earnings or cause the total amount of all distributions to exceed sixty per cent of the fund's eligible investment authority, until the fund

S. B. No. 110 As Introduced

remits the state reimbursement amount to the agency. All amounts

received by the agency under this division shall be credited to

the general revenue fund. 641

(D） The director of development services, upon the request 642

of a fund, may waive all or a portion of the remission required 643

under division (C） of this section if the director determines, 644

based on an affidavit of the chief executive officer or 645

president of a rural business concern, that the growth 646

investments of the fund resulted in the retention of employment 647

positions that would have otherwise been eliminated at rural 648

business concerns in this state. The amount waived shall not 649

exceed the product of thirty thousand dollars multiplied by the 650

number of retained employment positions multiplied by the number 651

of years in which the fund made or maintained a growth 652

653

employment positions. 654

Sec. 5725.98. (A) To provide a uniform procedure for 655

calculating the amount of tax imposed by section 5725.18 of the 656

657

claim any credits and offsets against tax liability to which it 658

is entitled in the following order: 659

The credit for an insurance company or insurance company 099

group under section 5729.031 of the Revised Code; 661

The nonrefundable credit for investments in rural business 662

growth funds issued under program three under section 122.152 of 663

the Revised Code; 664

The credit for eligible employee training costs under 665

section 5725.31 of the Revised Code; 999

The credit for purchasers of qualified low-income 667

S. B. No. 110 As Introduced

community investments under section 5725.33 of the Revised Code; 668
The nonrefundable job retention credit under division (B) 669
of section 122.171 of the Revised Code; 670
The nonrefundable credit for investments in rural business 671
growth funds issued under program one or two under section 672
122.152 of the Revised Code; 673
The nonrefundable Ohio low-income housing tax credit under 674
section 5725.36 of the Revised Code; 675
The nonrefundable affordable single-family home credit 676
under section 5725.37 of the Revised Code; 677
The nonrefundable credit for contributing capital to a 678
transformational mixed use development project under section 679
5725.35 of the Revised Code; 680
The offset of assessments by the Ohio life and health 681
insurance guaranty association permitted by section 3956.20 of 682
the Revised Code; 683
The refundable credit for rehabilitating a historic 684
building under section 5725.34 of the Revised Code; 685
The refundable credit for Ohio job retention under former 686
division (B)(2) or (3) of section 122.171 of the Revised Code as 687
those divisions existed before September 29, 2015, the effective 688
date of the amendment of this section by H.B. 64 of the 131st 689
general assembly; 690
The refundable credit for Ohio job creation under section 691
5725.32 of the Revised Code; 692
The refundable credit under section 5725.19 of the Revised 693
Code for losses on loans made under the Ohio venture capital 694

S. B. No. 110

As Introduced
program under sections 150.01 to 150.10 of the Revised Code. 695
(B) For any credit except the refundable credits 696
enumerated in this section, the amount of the credit for a 697
taxable year shall not exceed the tax due after allowing for any 698
other credit that precedes it in the order required under this 699
section. Any excess amount of a particular credit may be carried 700
forward if authorized under the section creating that credit. 701
Nothing in this chapter shall be construed to allow a taxpayer 702
to claim, directly or indirectly, a credit more than once for a 703
taxable year. 704
Sec. 5729.98. (A) To provide a uniform procedure for 705
calculating the amount of tax due under this chapter, a taxpayer 706
shall claim any credits and offsets against tax liability to 707
which it is entitled in the following order: 708
The credit for an insurance company or insurance company 709
group under section 5729.031 of the Revised Code; 710
The nonrefundable credit for investments in rural business 711
growth funds issued under program three under section 122.152 of 712
the Revised Code; 713
The credit for eligible employee training costs under 714
section 5729.07 of the Revised Code; 715
The credit for purchases of qualified low-income community 716
investments under section 5729.16 of the Revised Code; 717
The nonrefundable job retention credit under division (B) 718
of section 122.171 of the Revised Code; 719
The nonrefundable credit for investments in rural business 720
growth funds issued under program one or two under section 721
122.152 of the Revised Code; 722

S. B. No. 110 As Introduced

The nonrefundable Ohio low-income housing tax credit under 723
section 5729.19 of the Revised Code; 724
The nonrefundable affordable single-family home credit 725
under section 5729.20 of the Revised Code; 726
The nonrefundable credit for contributing capital to a 727
transformational mixed use development project under section 728
5729.18 of the Revised Code; 729
The offset of assessments by the Ohio life and health 730
insurance guaranty association against tax liability permitted 731
by section 3956.20 of the Revised Code; 732
The refundable credit for rehabilitating a historic 733
building under section 5729.17 of the Revised Code; 734
The refundable credit for Ohio job retention under former 735
division (B)(2) or (3) of section 122.171 of the Revised Code as 736
those divisions existed before September 29, 2015, the effective 737
date of the amendment of this section by H.B. 64 of the 131st 738
general assembly; 739
The refundable credit for Ohio job creation under section 740
5729.032 of the Revised Code; 741
The refundable credit under section 5729.08 of the Revised 742
Code for losses on loans made under the Ohio venture capital 743
program under sections 150.01 to 150.10 of the Revised Code. 744
(B) For any credit except the refundable credits 745
enumerated in this section, the amount of the credit for a 746
taxable year shall not exceed the tax due after allowing for any 747
other credit that precedes it in the order required under this 748
section. Any excess amount of a particular credit may be carried 749
forward if authorized under the section creating that credit. 750

S. B. No. 110 As Introduced

Nothing in this chapter shall be construed to allow a taxpayer 751
to claim, directly or indirectly, a credit more than once for a 752
taxable year. 753
Section 2. That existing sections 122.15, 122.151, 754
122.152, 122.153, 122.154, 122.155, 5725.98, and 5729.98 of the 755
Revised Code are hereby repealed. 756