Bill Text: OH HB464 | 2009-2010 | 128th General Assembly | Introduced

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Bill Title: To exempt qualifying wind and solar energy facilities from property taxation for up to 20 years and to require payments in lieu of taxes on the basis of each megawatt of production capacity of such facilities.

Spectrum: Strong Partisan Bill (Democrat 12-1)

Status: (Introduced - Dead) 2010-03-15 - To Ways & Means [HB464 Detail]

Download: Ohio-2009-HB464-Introduced.html

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As Introduced

128th General Assembly Regular Session 2009-2010

H. B. No. 464

Representatives Winburn, Phillips 

Cosponsors: Representatives Letson, Murray, Mallory, Domenick, Fende, Lundy, Yuko, Williams, S., Garland, Brown, Hagan 

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A BILL

To amend sections 5727.01, 5727.02, 5727.06, 5727.11,

1

5727.111, and 5727.15 and to enact section 5727.75

2

of the Revised Code to exempt qualifying wind and

3

solar energy facilities from property taxation for

4

up to 20 years and to require payments in lieu of

5

taxes on the basis of each megawatt of production

6

capacity of such facilities.

7

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

Section 1.  That sections 5727.01, 5727.02, 5727.06, 5727.11,	8
5727.111, and 5727.15 be amended and section 5727.75 of the	9
Revised Code be enacted to read as follows:	10

Sec. 5727.01.  As used in this chapter:

11

(A) "Public utility" means each person referred to as a	12
telephone company, telegraph company, electric company, natural	13
gas company, pipe-line company, water-works company, water	14
transportation company, heating company, rural electric company,	15
railroad company, or combined company, wind energy company, or	16
solar energy company.	17

(B) "Gross receipts" means the entire receipts for business	18
done by any person from operations as a public utility, or	19
incidental thereto, or in connection therewith, including any	20
receipts received under Chapter 4928. of the Revised Code. The	21
gross receipts for business done by an incorporated company	22
engaged in operation as a public utility includes the entire	23
receipts for business done by such company under the exercise of	24
its corporate powers, whether from the operation as a public	25
utility or from any other business.	26

(C) "Rural electric company" means any nonprofit corporation,	27
organization, association, or cooperative engaged in the business	28
of supplying electricity to its members or persons owning an	29
interest therein in an area the major portion of which is rural.	30

(D) Any person:

31

(1) Is a telegraph company when engaged in the business of	32
transmitting telegraphic messages to, from, through, or in this	33
state;	34

(2) Is a telephone company when primarily engaged in the	35
business of providing local exchange telephone service, excluding	36
cellular radio service, in this state;	37

(3) Is an electric company when engaged in the business of	38
generating, transmitting, or distributing electricity within this	39
state for use by others, but excludes a rural electric company;	40

(4) Is a natural gas company when engaged in the business of	41
supplying or distributing natural gas for lighting, power, or	42
heating purposes to consumers within this state, excluding a	43
person that is a governmental aggregator or retail natural gas	44
supplier as defined in section 4929.01 of the Revised Code;	45

(5) Is a pipe-line company when engaged in the business of	46
transporting natural gas, oil, or coal or its derivatives through	47
pipes or tubing, either wholly or partially within this state;	48

(6) Is a water-works company when engaged in the business of	49
supplying water through pipes or tubing, or in a similar manner,	50
to consumers within this state;	51

(7) Is a water transportation company when engaged in the	52
transportation of passengers or property, by boat or other	53
watercraft, over any waterway, whether natural or artificial, from	54
one point within this state to another point within this state, or	55
between points within this state and points without this state;	56

(8) Is a heating company when engaged in the business of	57
supplying water, steam, or air through pipes or tubing to	58
consumers within this state for heating purposes;	59

(9) Is a railroad company when engaged in the business of	60
owning or operating a railroad either wholly or partially within	61
this state on rights-of-way acquired and held exclusively by such	62
company, or otherwise, and includes a passenger, street, suburban,	63
or interurban railroad company;	64

(10) Is a wind energy company when engaged in the business of	65
generating, transmitting, or distributing electricity within this	66
state for use by others through means of a wind turbine or wind	67
turbines with an aggregate nameplate capacity in excess of two	68
hundred fifty kilowatts;	69

(11) Is a solar energy company when engaged in the business	70
of generating, transmitting, or distributing electricity within	71
this state for use by others through means of equipment located at	72
a solar energy facility and designed to capture the radiant light	73
and heat from the sun with a nameplate capacity in excess of two	74
hundred fifty kilowatts.	75

As used in division (D)(2) of this section, "local exchange	76
telephone service" means making available or furnishing access and	77
a dial tone to all persons within a local calling area for use in	78
originating and receiving voice grade communications over a	79
switched network operated by the provider of the service within	80
the area and for gaining access to other telecommunication	81
services.	82

(E) "Taxable property" means the property required by section	83
5727.06 of the Revised Code to be assessed by the tax	84
commissioner, but does not include either of the following:	85

(1) An item of tangible personal property that for the period	86
subsequent to the effective date of an air, water, or noise	87
pollution control certificate and continuing so long as the	88
certificate is in force, has been certified as part of the	89
pollution control facility with respect to which the certificate	90
has been issued;	91

(2) An item of tangible personal property that during the	92
construction of a plant or facility and until the item is first	93
capable of operation, whether actually used in operation or not,	94
is incorporated in or being held exclusively for incorporation in	95
that plant or facility.	96

Notwithstanding section 5701.03 of the Revised Code, for tax	97
year 2006 and thereafter, "taxable property" includes patterns,	98
jigs, dies, and drawings of an electric company or a combined	99
company for use in the activity of an electric company.	100

(F) "Taxing district" means a municipal corporation ofor	101
township, or part thereof, in which the aggregate rate of taxation	102
is uniform.	103

(G) "Telecommunications service" has the same meaning as in	104
division (AA) of section 5739.01 of the Revised Code.	105

(H) "Interexchange telecommunications company" means a person	106
that is engaged in the business of transmitting telephonic	107
messages to, from, through, or in this state, but that is not a	108
telephone company.	109

(I) "Sale and leaseback transaction" means a transaction in	110
which a public utility or interexchange telecommunications company	111
sells any tangible personal property to a person other than a	112
public utility or interexchange telecommunications company and	113
leases that property back from the buyer.	114

(J) "Production equipment" means all taxable steam, nuclear,	115
hydraulic, and other production plant equipment used to generate	116
electricity. For tax years prior to 2001, "production equipment"	117
includes taxable station equipment that is located at a production	118
plant.	119

(K) "Tax year" means the year for which property or gross	120
receipts are subject to assessment under this chapter. This	121
division does not limit the tax commissioner's ability to assess	122
and value property or gross receipts outside the tax year.	123

(L) "Combined company" means any person engaged in the	124
activity of an electric company or rural electric company that is	125
also engaged in the activity of a heating company or a natural gas	126
company, or any combination thereof.	127

(M) "Public utility property lessor" means any person, other	128
than a public utility or an interexchange telecommunications	129
company, that leases personal property, other than in a sale and	130
leaseback transaction, to a public utility, other than a railroad,	131
water transportation, telephone, or telegraph company if the	132
property would be taxable property if owned by the public utility.	133
A public utility property lessor is subject to this chapter only	134
for the purposes of reporting and paying tax on taxable property	135
it leases to a public utility other than a telephone or telegraph	136
company. A public utility property lessor that leases property to	137
a public utility other than a telephone or telegraph company is	138
not a public utility, but it shall report its property and be	139
assessed in the same manner as the utility to which it leases the	140
property.	141

(N) "Wind energy conversion equipment" means tangible	142
personal property connected to a wind turbine tower and through	143
which electricity is transferred from the turbine generator to	144
controls, transformers, or power electronics and to the	145
transmission interconnection point. "Wind energy conversion	146
equipment" includes, but is not limited to, collection lines,	147
ancillary tangible personal property, substations, and any lines	148
and associated tangible personal property located between	149
substations and the transmission interconnection point.	150

(O) "Solar energy conversion equipment" means tangible	151
personal property that is connected to and behind solar radiation	152
collector areas and that is designed to convert the radiant energy	153
of the sun into electricity or heat. "Solar energy conversion	154
equipment" includes, but is not limited to, inverters, batteries,	155
switch gears, wiring, collection lines, substations, ancillary	156
tangible personal property necessary for radiant energy conversion	157
or storage, or any lines and associated tangible personal property	158
located between substations and the transmission interconnection	159
point that operate on direct current or generate direct current.	160

(P) "Wind energy facility" means one or more interconnected	161
wind turbines owned by the same person, including:	162

(1) All interconnection equipment, devices, and related	163
apparatus connected to the wind turbine generators;	164

(2) All cables, equipment, devices, and related apparatus	165
that connect the wind turbine generators to an electricity grid or	166
to a building or facility that directly consumes the electricity	167
produced, that facilitate the transmission of electrical energy	168
from the generators to the grid, building, or facility, and, where	169
applicable, that transform voltage before ultimate delivery of	170
electricity to the grid, building, or facility.	171

(Q) "Solar energy facility" means one or more interconnected	172
solar panels owned by the same person, including:	173

(1) All interconnection equipment, devices, and related	174
apparatus connected to the solar panels;	175

(2) All cables, equipment, devices, and related apparatus	176
that connect the solar panels to an electricity grid or to a	177
building or facility that directly consumes the electricity	178
produced, that facilitate the transmission of electrical energy	179
from the solar panels to the grid, building, or facility, and,	180
where applicable, that transform voltage before ultimate delivery	181
of electricity to the grid, building, or facility.	182

(R) "Nameplate capacity" means the original maximum rated	183
output of a generator or other electric production equipment under	184
specific conditions designated by the manufacturer, expressed in	185
the number of kilowatts or megawatts.	186

Sec. 5727.02.  As used in this chapter, "public utility,"	187
"electric company," "natural gas company," "pipe-line company,"	188
"water-works company," "water transportation company" or "heating	189
company" does not include any of the following:	190

(A)(1) Except as provided in division (A)(2) of this section,	191
any person that is engaged in some other primary business to which	192
the supplying of electricity, heat, natural gas, water, water	193
transportation, steam, or air to others is incidental. As used in	194
division (A) of this section and in section 5727.031 of the	195
Revised Code, "supplying of electricity" means generating,	196
transmitting, or distributing electricity.	197

(2) For tax year 2009 and each tax year thereafter, a person	198
that is engaged in some other primary business to which the	199
supplying of electricity to others is incidental shall be treated	200
as an "electric company" and a "public utility" for purposes of	201
this chapter solely to the extent required by section 5727.031 of	202
the Revised Code.	203

(3) For purposes of division (A) of this section and section	204
5727.031 of the Revised Code:	205

(a) "Supplying of electricity" means generating,	206
transmitting, or distributing electricity.	207

(b) A person that leases to others wind energy facilities or	208
solar energy facilities with an aggregate nameplate capacity in	209
this state of two hundred fifty kilowatts or less per lease is not	210
supplying electricity to others.	211

(c) A person that owns, or leases from another person, wind	212
energy facilities or solar energy facilities with an aggregate	213
nameplate capacity in this state of two hundred fifty kilowatts or	214
less is not supplying electricity to others, regardless of whether	215
the owner or lessee engages in net metering as defined in section	216
4928.01 of the Revised Code.	217

(B) Any person that supplies electricity, natural gas, water,	218
water transportation, steam, or air to its tenants, whether for a	219
separate charge or otherwise;	220

(C) Any person whose primary business in this state consists	221
of producing, refining, or marketing petroleum or its products.	222

(D) Any person whose primary business in this state consists	223
of producing or gathering natural gas rather than supplying or	224
distributing natural gas to consumers.	225

Sec. 5727.06.  (A) Except as otherwise provided by law, the	226
following constitutes the taxable property of a public utility,	227
interexchange telecommunications company, or public utility	228
property lessor that shall be assessed by the tax commissioner:	229

(1) For tax years before tax year 2006:

230

(a) In the case of a railroad company, all real property and	231
tangible personal property owned or operated by the railroad	232
company in this state on the thirty-first day of December of the	233
preceding year;	234

(b) In the case of a water transportation company, all	235
tangible personal property, except watercraft, owned or operated	236
by the water transportation company in this state on the	237
thirty-first day of December of the preceding year and all	238
watercraft owned or operated by the water transportation company	239
in this state during the preceding calendar year;	240

(c) In the case of all other public utilities and	241
interexchange telecommunications companies, all tangible personal	242
property that on the thirty-first day of December of the preceding	243
year was both located in this state and:	244

(i) Owned by the public utility or interexchange	245
telecommunications company; or	246

(ii) Leased by the public utility or interexchange	247
telecommunications company under a sale and leaseback transaction.	248

(2) For tax years 2006, 2007, and 2008:

249

(a) In the case of a railroad company, all real property used	250
in railroad operations and tangible personal property owned or	251
operated by the railroad company in this state on the thirty-first	252
day of December of the preceding year;	253

(b) In the case of a water transportation company, all	254
tangible personal property, except watercraft, owned or operated	255
by the water transportation company in this state on the	256
thirty-first day of December of the preceding year and all	257
watercraft owned or operated by the water transportation company	258
in this state during the preceding calendar year;	259

(c) In the case of all other public utilities except	260
telephone and telegraph companies, all tangible personal property	261
that on the thirty-first day of December of the preceding year was	262
both located in this state and either owned by the public utility	263
or leased by the public utility under a sale and leaseback	264
transaction.	265

(3) For tax year 2009 and each tax year thereafter:

266

(a) In the case of a railroad company, all real property used	267
in railroad operations and tangible personal property owned or	268
operated by the railroad company in this state on the thirty-first	269
day of December of the preceding year;	270

(b) In the case of a water transportation company, all	271
tangible personal property, except watercraft, owned or operated	272
by the water transportation company in this state on the	273
thirty-first day of December of the preceding year and all	274
watercraft owned or operated by the water transportation company	275
in this state during the preceding calendar year;	276

(c) In the case of all other public utilities except	277
telephone and telegraph companies, all tangible personal property	278
that on the thirty-first day of December of the preceding year was	279
both located in this state and either owned by the public utility	280
or leased by the public utility under a sale and leaseback	281
transaction;	282

(d) In the case of a public utility property lessor, all	283
personal property that on the thirty-first day of December of the	284
preceding year was both located in this state and leased, in other	285
than a sale and leaseback transaction, to a public utility other	286
than a railroad, telephone, telegraph, or water transportation	287
company. The assessment rate used under section 5727.111 of the	288
Revised Code shall be based on the assessment rate that would	289
apply if the public utility owned the property.	290

(4) For tax years 2005 and 2006, in the case of telephone,	291
telegraph, or interexchange telecommunications companies, all	292
tangible personal property that on the thirty-first day of	293
December of the preceding year was both located in this state and	294
either owned by the telephone, telegraph, or interexchange	295
telecommunications company or leased by the telephone, telegraph,	296
or interexchange telecommunications company under a sale and	297
leaseback transaction.	298

(5)(a) For tax year 2007 and thereafter, in the case of	299
telephone, telegraph, or interexchange telecommunications	300
companies, all tangible personal property shall be listed and	301
assessed for taxation under Chapter 5711. of the Revised Code, but	302
the tangible personal property shall be valued in accordance with	303
this chapter using the composite annual allowances and other	304
valuation procedures prescribed under section 5727.11 of the	305
Revised Code by the tax commissioner for such property for tax	306
year 2006, notwithstanding any section of Chapter 5711. of the	307
Revised Code to the contrary.	308

(b) A telephone, telegraph, or interexchange	309
telecommunications company subject to division (A)(5)(a) of this	310
section shall file a combined return with the tax commissioner in	311
accordance with section 5711.13 of the Revised Code even if the	312
company has tangible personal property in only one county. Such a	313
company also is subject to the issuance of a preliminary	314
assessment certificate by the tax commissioner under section	315
5711.25 of the Revised Code. Such a company is not required to	316
file a county supplemental return under section 5711.131 of the	317
Revised Code.	318

(6) In the case of a wind energy company or a solar energy	319
company, for tax year 2011 and each tax year thereafter, all	320
tangible personal property that on the thirty-first day of	321
December of the preceding year was both located in this state and	322
either owned by the wind energy company or solar energy company or	323
leased by the wind energy company or solar energy company under a	324
sale and leaseback transaction, and that is not exempted from	325
taxation under section 5727.75 of the Revised Code.	326

(B) This division applies to tax years before tax year 2007.

327

In the case of an interexchange telecommunications company,	328
all taxable property shall be subject to the provisions of this	329
chapter and shall be valued by the commissioner in accordance with	330
division (A) of section 5727.11 of the Revised Code. A person	331
described by this division shall file the report required by	332
section 5727.08 of the Revised Code. Persons described in this	333
division shall not be considered taxpayers, as defined in division	334
(B) of section 5711.01 of the Revised Code, and shall not be	335
required to file a return and list their taxable property under	336
any provision of Chapter 5711. of the Revised Code.	337

(C) The lien of the state for taxes levied each year on the	338
real and personal property of public utilities and interexchange	339
telecommunications companies and on the personal property of	340
public utility property lessors shall attach thereto on the	341
thirty-first day of December of the preceding year.	342

(D) Property that is required by division (A)(3)(b) of this	343
section to be assessed by the tax commissioner under this chapter	344
shall not be listed by the owner of the property under Chapter	345
5711. of the Revised Code.	346

(E) The ten-thousand-dollar exemption provided for in	347
division (C)(3) of section 5709.01 of the Revised Code does not	348
apply to any personal property that is valued under this chapter.	349

(F) The tax commissioner may adopt rules governing the	350
listing of the taxable property of public utilities and	351
interexchange telecommunications companies and the determination	352
of true value.	353

Sec. 5727.11.  (A) Except as otherwise provided in this	354
section, the true value of all taxable property, except property	355
of a railroad company, required by section 5727.06 of the Revised	356
Code to be assessed by the tax commissioner shall be determined by	357
a method of valuation using cost as capitalized on the public	358
utility's books and records less composite annual allowances as	359
prescribed by the commissioner. If the commissioner finds that	360
application of this method will not result in the determination of	361
true value of the public utility's taxable property, the	362
commissioner may use another method of valuation.	363

(B)(1) Except as provided in division (B)(2) of this section,	364
the true value of current gas stored underground is the cost of	365
that gas shown on the books and records of the public utility on	366
the thirty-first day of December of the preceding year.	367

(2) For tax year 2001 and thereafter, the true value of	368
current gas stored underground is the quotient obtained by	369
dividing (a) the average value of the current gas stored	370
underground, which shall be determined by adding the value of the	371
gas on hand at the end of each calendar month in the calendar year	372
preceding the tax year, or, if applicable, the last day of	373
business of each month for a partial month, divided by (b) the	374
total number of months the natural gas company was in business	375
during the calendar year prior to the beginning of the tax year.	376
with the approval of the tax commissioner, a natural gas company	377
may use a date other than the end of a calendar month to value its	378
current gas stored underground.	379

(C) The true value of noncurrent gas stored underground is	380
thirty-five per cent of the cost of that gas shown on the books	381
and records of the public utility on the thirty-first day of	382
December of the preceding year.	383

(D)(1) Except as provided in division (D)(2) of this section,	384
the true value of the production equipment of an electric company	385
and the true value of all taxable property of a rural electric	386
company is the equipment's or property's cost as capitalized on	387
the company's books and records less fifty per cent of that cost	388
as an allowance for depreciation and obsolescence.	389

(2) The true value of the production equipment, wind energy	390
conversion equipment, or solar energy conversion equipment of an	391
electric company or, rural electric company, wind energy company,	392
or solar energy company purchased, transferred, or placed into	393
service after the effective date of this amendmentOctober 5,	394
1999, is the purchase price of the equipment as capitalized on the	395
company's books and records less composite annual allowances as	396
prescribed by the tax commissioner.	397

(E) The true value of taxable property, except property of a	398
railroad company, required by section 5727.06 of the Revised Code	399
to be assessed by the tax commissioner shall not include the	400
allowance for funds used during construction or interest during	401
construction that has been capitalized on the public utility's	402
books and records as part of the total cost of the taxable	403
property. This division shall not apply to the taxable property of	404
an electric company or a rural electric company, excluding	405
transmission and distribution property, first placed into service	406
after December 31, 2000, or to the taxable property a person	407
purchases, which includes transfers, if that property was used in	408
business by the seller prior to the purchase.	409

(F) The true value of watercraft owned or operated by a water	410
transportation company shall be determined by multiplying the true	411
value of the watercraft as determined under division (A) of this	412
section by a fraction, the numerator of which is the number of	413
revenue-earning miles traveled by the watercraft in the waters of	414
this state and the denominator of which is the number of	415
revenue-earning miles traveled by the watercraft in all waters.	416

(G) The cost of property subject to a sale and leaseback	417
transaction is the cost of the property as capitalized on the	418
books and records of the public utility owning the property	419
immediately prior to the sale and leaseback transaction.	420

(H) The cost as capitalized on the books and records of a	421
public utility includes amounts capitalized that represent	422
regulatory assets, if such amounts previously were included on the	423
company's books and records as capitalized costs of taxable	424
personal property.	425

(I) Any change in the composite annual allowances as	426
prescribed by the commissioner on a prospective basis shall not be	427
admissible in any judicial or administrative action or proceeding	428
as evidence of value with regard to prior years' taxes.	429
Information about the business, property, or transactions of any	430
taxpayer obtained by the commissioner for the purpose of adopting	431
or modifying the composite annual allowances shall not be subject	432
to discovery or disclosure.	433

Sec. 5727.111.  The taxable property of each public utility,	434
except a railroad company, and of each interexchange	435
telecommunications company shall be assessed at the following	436
percentages of true value:	437

(A) FiftyIn the case of a rural electric company, fifty per	438
cent in the case of theits taxable transmission and distribution	439
property of a rural electric company, eighty-five per cent in the	440
case of its wind or solar energy conversion equipment, and	441
twenty-five per cent for all its other taxable property;	442

(B) In the case of a telephone or telegraph company,	443
twenty-five per cent for taxable property first subject to	444
taxation in this state for tax year 1995 or thereafter for tax	445
years before tax year 2007, and pursuant to division (H) of	446
section 5711.22 of the Revised Code for tax year 2007 and	447
thereafter, and the following for all other taxable property:	448

(1) For tax years prior to 2005, eighty-eight per cent;

449

(2) For tax year 2005, sixty-seven per cent;

450

(3) For tax year 2006, forty-six per cent;

451

(4) For tax year 2007 and thereafter, pursuant to division	452
(H) of section 5711.22 of the Revised Code.	453

(C) Twenty-five per cent in the case of a natural gas	454
company.	455

(D) Eighty-eight per cent in the case of a pipe-line,	456
water-works, or heating company;	457

(E)(1) For tax year 2005, eighty-eight per cent in the case	458
of the taxable transmission and distribution property of an	459
electric company, and twenty-five per cent for all its other	460
taxable property;	461

(2) For tax year 2006 and each tax year thereafter,	462
eighty-five per cent in the case of the taxable transmission and	463
distribution property of an electric company, and twenty-four per	464
cent for all its other taxable property.	465

(F)(1) Twenty-five per cent in the case of an interexchange	466
telecommunications company for tax years before tax year 2007;	467

(2) Pursuant to division (H) of section 5711.22 of the	468
Revised Code for tax year 2007 and thereafter.	469

(G) Twenty-five per cent in the case of a water	470
transportation company;	471

(H) For tax year 2011 and each tax year thereafter,	472
twenty-four per cent in the case of the taxable production	473
equipment of a solar energy company or wind energy company, and	474
eighty-five per cent for all other taxable property.	475

Sec. 5727.15.  When all the taxable property of a public	476
utility is located in one taxing district, the tax commissioner	477
shall apportion the total taxable value thereof to that taxing	478
district.	479

When taxable property of a public utility is located in more	480
than one taxing district, the commissioner shall apportion the	481
total taxable value thereof among the taxing districts as follows:	482

(A)(1) In the case of a telegraph, interexchange	483
telecommunications, or telephone company that owns miles of wire	484
in this state, the value apportioned to each taxing district shall	485
be the same percentage of the total value apportioned to all	486
taxing districts as the miles of wire owned by the company within	487
the taxing district are to the total miles of wire owned by the	488
company within this state;	489

(2) In the case of a telegraph, interexchange	490
telecommunications, or telephone company that does not own miles	491
of wire in this state, the value apportioned to each taxing	492
district shall be the same percentage of the total value	493
apportioned to all taxing districts as the cost of the taxable	494
property physically located in the taxing district is of the total	495
cost of all taxable property physically located in this state.	496

(B) In the case of a railroad company:

497

(1) The taxable value of real and personal property not used	498
in railroad operations shall be apportioned according to its	499
situs;	500

(2) The taxable value of personal property used in railroad	501
operations shall be apportioned to each taxing district in	502
proportion to the miles of track and trackage rights, weighted to	503
reflect the relative use of such personal property in each taxing	504
district;	505

(3) The taxable value of real property used in railroad	506
operations shall be apportioned to each taxing district in	507
proportion to its relative value in each taxing district.	508

(C)(1) Prior to tax year 2001, in the case of an electric	509
company:	510

(a) Seventy per cent of the taxable value of all production	511
equipment and of all station equipment that is not production	512
equipment shall be apportioned to the taxing district in which	513
such property is physically located; and	514

(b) The remaining value of such property, together with the	515
value of all other taxable personal property, shall be apportioned	516
to each taxing district in the per cent that the cost of all	517
transmission and distribution property physically located in the	518
taxing district is of the total cost of all transmission and	519
distribution property physically located in this state.	520

(c) If an electric company's taxable value for the current	521
year includes the value of any production equipment at a plant at	522
which the initial cost of the plant's production equipment	523
exceeded one billion dollars, then prior to making the	524
apportionments required for that company by division (C)(1)(a) and	525
(b) of this section, the tax commissioner shall do the following:	526

(i) Subtract four hundred twenty million dollars from the	527
total taxable value of the production equipment at that plant for	528
the current tax year.	529

(ii) Multiply the difference thus obtained by a fraction, the	530
numerator of which is the portion of the taxable value of that	531
plant's production equipment included in the company's total value	532
for the current tax year, and the denominator of which is the	533
total taxable value of such equipment included in the total	534
taxable value of all electric companies for such year;	535

(iii) Apportion the product thus obtained to taxing districts	536
in the manner prescribed in division (C)(1)(b) of this section.	537

(iv) Deduct the amounts so apportioned from the taxable value	538
of the company's production equipment at the plant, prior to	539
making the apportionments required by divisions (C)(1)(a) and (b)	540
of this section.	541

For purposes of division (C)(1)(c) of this section, "initial	542
cost" applies only to production equipment of plants placed in	543
commercial operation on or after January 1, 1987, and means the	544
cost of all production equipment at a plant for the first year the	545
plant's equipment was subject to taxation.	546

(2) For tax year 2001 and thereafter, in the case of an	547
electric company:	548

(a) The taxable value of all production equipment shall be	549
apportioned to the taxing district in which such property is	550
physically located; and	551

(b) The value of taxable personal property, other than	552
including wind and solar energy conversion equipment but excluding	553
production equipment, shall be apportioned to each taxing district	554
in the proportion that the cost of such other taxable personal	555
property physically located in each taxing district is of the	556
total cost of such other taxable personal property physically	557
located in this state.	558

(D) For tax year 2011 and thereafter, in the case of the	559
taxable property of a wind energy company or solar energy company:	560

(1) The taxable value of all production equipment shall be	561
apportioned to the taxing district in which such property is	562
physically located.	563

(2) The taxable value of all other taxable property,	564
including wind or solar energy conversion equipment, shall be	565
apportioned to each taxing district in the proportion that the	566
cost of such other taxable property physically located in each	567
taxing district is of the total cost of such other taxable	568
property physically located in this state.	569

(E) For tax year 2011 and thereafter, in the case of the	570
taxable property of a rural electric company:	571

(1) The taxable value of all production equipment shall be	572
apportioned to the taxing district in which such property is	573
physically located.	574

(2) The taxable value of all its other taxable property,	575
including wind or solar energy conversion equipment and excluding	576
production equipment, shall be apportioned to each taxing district	577
in the proportion that the cost of such other taxable property	578
physically located in each taxing district is of the total cost of	579
such other taxable property physically located in this state.	580

(F) In the case of all other public utilities, the value of	581
the property to be apportioned shall be apportioned to each taxing	582
district in proportion to the entire value of such property within	583
this state.	584

Sec. 5727.75.  (A) For purposes of this section:

585

(1) "Full-time employee" means an individual employed at a	586
qualified energy project for services to be performed for not less	587
than two thousand eighty hours per year, including hours for leave	588
granted by contract, law, or custom.	589

(2) "Qualified energy project" means a wind or solar energy	590
project certified by the director of development pursuant to this	591
section.	592

(3) "Wind or solar energy project" means a project to provide	593
electric power through the construction, installation, and use of	594
a wind or solar energy facility.	595

(B)(1) Tangible personal property of a wind energy project	596
that is a qualified energy project is exempt from taxation for tax	597
years 2011 and 2012 if both of the following circumstances exist	598
on December 31, 2010:	599

(a) The owner or a lessee pursuant to a sale and leaseback	600
transaction of the wind energy project has obtained a certificate	601
from the power siting board required under section 4906.20 of the	602
Revised Code, or if that section does not apply, has obtained any	603
approval, consent, permit, or certificate or has satisfied any	604
condition required by a public agency or political subdivision of	605
this state for the construction of a wind energy project.	606

(b) Project construction has commenced.

607

(2) Tangible personal property of a solar energy project that	608
is a qualified energy project is exempt from taxation for tax year	609
2011. Personal property of a solar energy project that is a	610
qualified energy project is exempt from taxation for tax year 2012	611
if both of the following occur:	612

(a) The owner or a lessee pursuant to a sale and leaseback	613
transaction of the solar energy project obtains any approval,	614
consent, permit, or certificate or has satisfied any condition	615
required by a public agency or political subdivision of this state	616
for the construction or initial operation of a solar energy	617
project before January 1, 2011.	618

(b) Project construction commenced before August 1, 2011.

619

(3) If tangible personal property of a qualified energy	620
project was exempt from taxation under this section for tax years	621
2011 and 2012 and the certification under division (C) of this	622
section has not been revoked, the tangible personal property of	623
the qualified energy project is exempt from taxation for tax year	624
2013 and the ensuing seventeen tax years if the property was	625
placed into service before January 1, 2013. Tangible personal	626
property not placed into service on that date is taxable property	627
subject to taxation. A wind or solar energy project for which	628
certification has been revoked is ineligible for further exemption	629
under this section. Revocation does not affect the tax-exempt	630
status of the wind or solar energy project tangible personal	631
property for the tax year in which revocation occurs or any prior	632
tax year.	633

(C) On or before September 30, 2010, a person may apply to	634
the director of development for certification of a wind or solar	635
energy project as a qualified energy project. At the time the	636
application is submitted, the person shall submit an application	637
fee established by the director. The director shall certify a wind	638
or solar energy project if the application and fee have been	639
timely submitted and the director determines that the person, upon	640
placement of the wind or solar energy facility into service, would	641
be a wind or solar energy company. The director shall revoke a	642
certification if the director determines the person, or subsequent	643
owner or lessee pursuant to a sale and leaseback transaction of	644
the qualified energy project, has failed to comply with any	645
requirement under this section. Upon certification or revocation,	646
the director shall notify the person, owner, or lessee, the tax	647
commissioner, and the county auditor of a county in which the wind	648
or solar energy project is located of the certification or	649
revocation. Notice shall be provided in a manner convenient to the	650
director.	651

(D) The owner or a lessee pursuant to a sale and leaseback	652
transaction of a qualified energy project shall do each of the	653
following:	654

(1) Comply with all applicable regulations;

655

(2) With respect to a wind energy project, require in any	656
contract for the construction or installation of the wind energy	657
facility that all laborers and mechanics employed for the	658
construction or installation of the facility shall be paid at the	659
prevailing rates of wages of laborers and mechanics for the class	660
of work called for, which wages shall be determined in accordance	661
with the requirements of Chapter 4115. of the Revised Code for the	662
determination of prevailing wage rates.	663

(3)(a) Establish a procurement goal of five per cent for	664
contracting with minority or EDGE business enterprises in the	665
award of contracts for the construction, installation, or	666
maintenance of a wind or solar energy facility based on the	667
availability of eligible program participants by region or	668
geographic area.	669

(b) Establish a minority workforce goal of ten per cent in	670
the construction, installation, or maintenance of a wind or solar	671
energy facility.	672

If either goal is not attained, the owner or lessee shall	673
show evidence of a good faith effort to attain the goal. For	674
purposes of division (D)(3) of this section, "minority business	675
enterprise" has the same meaning as in section 122.71 of the	676
Revised Code, "EDGE business enterprise" means a business	677
certified as such pursuant to section 123.152 of the Revised Code,	678
and "minority" means African Americans, American Indians,	679
Hispanics or Latinos, and Asians.	680

(4) File with the director of development a certificate of	681
completion not later than sixty days after completion of the wind	682
or solar energy facility's construction and, if applicable, file a	683
certificate of partial completion on or before March 1, 2013. A	684
certificate of partial completion shall state the nameplate	685
capacity of the facility as of January 1, 2013.	686

(5) File with the director of development, in a manner	687
prescribed by the director, a report of jobs created at the	688
qualified energy project, the total number of full-time employees	689
employed at the project, and the total number of full-time	690
employees employed at the project who are domiciled in Ohio;	691

(6) Repair all roads affected by construction as reasonably	692
required to restore them to their preconstruction condition;	693

(7) Provide or facilitate training for fire and emergency	694
responders for response to emergency situations related to the	695
qualified energy project and, at the person's expense, equip the	696
fire and emergency responders with proper equipment as reasonably	697
required to enable them to respond to such emergency situations;	698

(8) Maintain a ratio of full-time, Ohio-domiciled employees	699
employed in the qualified energy project to total full-time	700
employees employed in the qualified energy project of not less	701
than eighty per cent in the case of a solar energy project and not	702
less than fifty per cent in the case of a wind energy project. In	703
the case of a wind energy project for which certification from the	704
power siting board is required under section 4906.20 of the	705
Revised Code, the number of employees employed in the qualified	706
energy project equals the number actually employed or the number	707
projected to be employed in the certificate application, if such	708
projection is required under regulations adopted pursuant to	709
section 4906.03 of the Revised Code, whichever is greater.	710

(9) In the case of a wind or solar energy project with a	711
nameplate capacity in excess of two megawatts, establish a	712
relationship with a member of the university system of Ohio as	713
defined in section 3345.011 of the Revised Code or with a person	714
offering an apprenticeship program registered with the employment	715
and training administration within the United States department of	716
labor or with the apprenticeship council created by section	717
4139.02 of the Revised Code, to educate and train individuals for	718
careers in the wind or solar energy industry. The relationship may	719
include endowments, cooperative programs, internships,	720
apprenticeships, research and development projects, and curriculum	721
development.	722

(10) Offer to sell power or renewable energy credits from the	723
qualified energy project to electric distribution utilities or	724
electric service companies subject to renewable energy resource	725
requirements under section 4928.64 of the Revised Code that have	726
issued requests for proposal for such power or renewable energy	727
credits. If no electric distribution utility or electric service	728
company issues a request for proposal on or before December 31,	729
2010, or accepts an offer for power or renewable energy credits	730
within forty-five days after the offer is submitted, power or	731
renewable energy credits from the qualified energy project may be	732
sold to other persons. Contracts for the sale of power or	733
renewable energy credits before the effective date of this section	734
as enacted by this act are not subject to division (D)(10) of this	735
section.	736

(11) Make annual service payments as required by division (E)	737
of this section.	738

(E) The owner or a lessee pursuant to a sale and leaseback	739
transaction of a qualified energy project shall make annual	740
service payments in lieu of taxes to the county treasurer on or	741
before the final dates for payments of taxes on public utility	742
personal property on the real and public utility personal property	743
tax list for each tax year for which property of the wind or solar	744
energy project is exempt from taxation under this section. Each	745
payment shall be charged and collected in the same manner as such	746
taxes and in the following amount:	747

(1) In the case of a solar energy project that is a qualified	748
energy project, for tax year 2011, seven dollars per kilowatt of	749
nameplate capacity as of January 1, 2013;	750

(2) In the case of a wind energy project that is a qualified	751
energy project, the following for tax year 2011:	752

(a) If the project maintains a ratio of full-time,	753
Ohio-domiciled employees to total full-time employees of not less	754
than seventy-five per cent, six dollars per kilowatt of nameplate	755
capacity as of January 1, 2013;	756

(b) If the project maintains a ratio of full-time,	757
Ohio-domiciled employees to total full-time employees of less than	758
seventy-five per cent but not less than sixty per cent, seven	759
dollars per kilowatt of nameplate capacity as of January 1, 2013;	760

(c) If the project maintains a ratio of full-time,	761
Ohio-domiciled employees to total full-time employees of less than	762
sixty per cent but not less than fifty per cent, eight dollars per	763
kilowatt of nameplate capacity as of January 1, 2013.	764

(3) For tax year 2012 and each subsequent tax year, the	765
amounts stated in divisions (E)(1) and (2) of this section shall	766
increase by an amount equal to the amount applicable to the prior	767
tax year multiplied by one hundred two per cent.	768

(F) The director of development in consultation with the tax	769
commissioner shall adopt rules pursuant to Chapter 119. of the	770
Revised Code to implement and enforce this section.	771

Section 2.  That existing sections 5727.01, 5727.02, 5727.06,	772
5727.11, 5727.111, and 5727.15 of the Revised Code are hereby	773
repealed.	774