Bill Text: OH HB534 | 2011-2012 | 129th General Assembly | Introduced

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Bill Title: To authorize the Third Frontier Commission to award grants related to the establishment and operation of data centers and the development of a high speed fiber optic network in the state, and to authorize a kilowatt-hour excise tax reduction for electric distribution companies supplying such centers at a discounted rate.

Spectrum: Slight Partisan Bill (Republican 6-2)

Status: (Introduced - Dead) 2012-05-03 - To Public Utilities [HB534 Detail]

Download: Ohio-2011-HB534-Introduced.html

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As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 534

Representative Schuring 

Cosponsors: Representatives Henne, Stebelton, Fende, Sprague, Kozlowski, Hagan, C., Yuko 

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A BILL

To amend sections 184.19 and 5727.81 and to enact

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section 184.05 of the Revised Code to authorize

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the Third Frontier Commission to award grants

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related to the establishment and operation of data

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centers and the development of a high speed fiber

5

optic network in the state, and to authorize a

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kilowatt-hour excise tax reduction for electric

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distribution companies supplying such centers at a

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discounted rate.

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

Section 1. That sections 184.19 and 5727.81 be amended and	10
section 184.05 of the Revised Code be enacted to read as follows:	11

Sec. 184.05. (A) As used in this section:

12

(1) "Data center" means a facility that is primarily used to	13
house tangible personal property that is or will be used in	14
providing data center services.	15

(2) "Data center services" means electronic information	16
services as defined in section 5739.01 of the Revised Code or any	17
similar services, as may be further determined by the third	18
frontier commission. "Data center services" does not include	19
electronic publishing as defined in section 5739.01 of the Revised	20
Code.	21

(3) "Eligible partnership" means a partnership between a	22
for-profit business entity and a state institution of higher	23
education.	24

(4) "State institution of higher education" has the same	25
meaning as in section 3345.011 of the Revised Code.	26

(B) The data center development grant program is hereby	27
created to promote the establishment of data centers in the state.	28
The third frontier commission shall award grants on a competitive	29
basis to eligible partnerships for the establishment and operation	30
of data centers. The amount awarded to a single eligible	31
partnership shall not exceed five million dollars. The total	32
amount of grants awarded under the program shall not exceed fifty	33
million dollars. Grants shall be made from the third frontier	34
research and development fund created under section 184.19 of the	35
Revised Code.	36

(C) The data center high speed fiber optic network grant	37
program is hereby created to promote the development of a high	38
speed fiber optic network in the state and to assist in the	39
provision of high speed fiber optics to data centers. The third	40
frontier commission shall award grants to persons that provide	41
high speed fiber optics to a data center that has been or will be	42
established in this state with the assistance of a grant awarded	43
under division (B) of this section. The total amount of grants	44
awarded under the program shall not exceed twenty-five million	45
dollars. Grants shall be made from the third frontier research and	46
development fund created under section 184.19 of the Revised Code.	47

(D) The third frontier commission shall adopt rules under	48
Chapter 119. of the Revised Code that are necessary for the	49
administration of the data center development grant program and	50
the data center high speed fiber optic network grant program. The	51
rules shall establish all of the following:	52

(1) Specific eligibility criteria for grant applicants;

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(2) A definition of what constitutes "high speed fiber	54
optics" for purposes of the data center high speed fiber optic	55
network grant program;	56

(3) Forms and procedures by which eligible applicants may	57
apply for grants under this section;	58

(4) Criteria for reviewing, evaluating, and ranking	59
applications, and for approving applications from eligible	60
applicants that best serve the goals of the data center	61
development grant program and the data center high speed fiber	62
optic network grant program;	63

(5) Reporting requirements and monitoring procedures;

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(6) Any other rules necessary to implement and administer the	65
grant programs.	66

(E) An eligible applicant that receives a grant under the	67
data center development grant program or the data center high	68
speed fiber optic network grant program is not precluded from	69
being considered for or participating in other financial	70
assistance programs offered by the department of development.	71

Sec. 184.19.  The third frontier research and development	72
fund is hereby created in the state treasury. The fund shall	73
consist of the net proceeds of the obligations issued and sold by	74
the issuing authority pursuant to sections 151.01 and 151.10 of	75
the Revised Code. Investment earnings of the fund shall be	76
credited to the fund. Moneys in the fund shall be used in	77
accordance with sections 184.05, 184.10 to 184.18, and 184.20 of	78
the Revised Code and for associated administrative expenses.	79

Sec. 5727.81.  (A) For the purpose of raising revenue for	80
public education and state and local government operations, an	81
excise tax is hereby levied and imposed on an electric	82
distribution company for all electricity distributed by such	83
company at the following rates per kilowatt hour of electricity	84
distributed in a thirty-day period by the company through a meter	85
of an end user in this state:	86

	KILOWATT HOURS DISTRIBUTED		RATE PER		87
	TO AN END USER		KILOWATT HOUR		88
	For the first 2,000		$.00465		89
	For the next 2,001 to 15,000		$.00419		90
	For 15,001 and above		$.00363		91

If no meter is used to measure the kilowatt hours of	92
electricity distributed by the company, the rates shall apply to	93
the estimated kilowatt hours of electricity distributed to an	94
unmetered location in this state.	95

The electric distribution company shall base the monthly tax	96
on the kilowatt hours of electricity distributed to an end user	97
through the meter of the end user that is not measured for a	98
thirty-day period by dividing the days in the measurement period	99
into the total kilowatt hours measured during the measurement	100
period to obtain a daily average usage. TheExcept as provided in	101
division (E) of this section, the tax shall be determined by	102
obtaining the sum of divisions (A)(1), (2), and (3) of this	103
section and multiplying that amount by the number of days in the	104
measurement period:	105

(1) Multiplying $0.00465 per kilowatt hour for the first	106
sixty-seven kilowatt hours distributed using a daily average;	107

(2) Multiplying $0.00419 for the next sixty-eight to five	108
hundred kilowatt hours distributed using a daily average;	109

(3) Multiplying $0.00363 for the remaining kilowatt hours	110
distributed using a daily average.	111

Except as provided in division (C) of this section, the	112
electric distribution company shall pay the tax to the tax	113
commissioner in accordance with section 5727.82 of the Revised	114
Code, unless required to remit each tax payment by electronic	115
funds transfer to the treasurer of state in accordance with	116
section 5727.83 of the Revised Code.	117

Only the distribution of electricity through a meter of an	118
end user in this state shall be used by the electric distribution	119
company to compute the amount or estimated amount of tax due. In	120
the event a meter is not actually read for a measurement period,	121
the estimated kilowatt hours distributed by an electric	122
distribution company to bill for its distribution charges shall be	123
used.	124

(B) Except as provided in division (C) of this section, each	125
electric distribution company shall pay the tax imposed by this	126
section in all of the following circumstances:	127

(1) The electricity is distributed by the company through a	128
meter of an end user in this state;	129

(2) The company is distributing electricity through a meter	130
located in another state, but the electricity is consumed in this	131
state in the manner prescribed by the tax commissioner;	132

(3) The company is distributing electricity in this state	133
without the use of a meter, but the electricity is consumed in	134
this state as estimated and in the manner prescribed by the tax	135
commissioner.	136

(C)(1) As used in division (C) of this section:

137

(a) "Total price of electricity" means the aggregate value in	138
money of anything paid or transferred, or promised to be paid or	139
transferred, to obtain electricity or electric service, including	140
but not limited to the value paid or promised to be paid for the	141
transmission or distribution of electricity and for transition	142
costs as described in Chapter 4928. of the Revised Code.	143

(b) "Package" means the provision or the acquisition, at a	144
combined price, of electricity with other services or products, or	145
any combination thereof, such as natural gas or other fuels;	146
energy management products, software, and services; machinery and	147
equipment acquisition; and financing agreements.	148

(c) "Single location" means a facility located on contiguous	149
property separated only by a roadway, railway, or waterway.	150

(2) Division (C) of this section applies to any commercial or	151
industrial purchaser's receipt of electricity through a meter of	152
an end user in this state or through more than one meter at a	153
single location in this state in a quantity that exceeds	154
forty-five million kilowatt hours of electricity over the course	155
of the preceding calendar year, or any commercial or industrial	156
purchaser that will consume more than forty-five million kilowatt	157
hours of electricity over the course of the succeeding twelve	158
months as estimated by the tax commissioner. The tax commissioner	159
shall make such an estimate upon the written request by an	160
applicant for registration as a self-assessing purchaser under	161
this division. For the meter reading period including July 1,	162
2008, through the meter reading period including December 31,	163
2010, such a purchaser may elect to self-assess the excise tax	164
imposed by this section at the rate of $.00075 per kilowatt hour	165
on the first five hundred four million kilowatt hours distributed	166
to that meter or location during the registration year, and a	167
percentage of the total price of all electricity distributed to	168
that meter or location equal to three and one-half per cent. For	169
the meter reading period including January 1, 2011, and	170
thereafter, such a purchaser may elect to self-assess the excise	171
tax imposed by this section at the rate of $.00257 per kilowatt	172
hour for the first five hundred million kilowatt hours, and	173
$.001832 per kilowatt hour for each kilowatt hour in excess of	174
five hundred million kilowatt hours, distributed to that meter or	175
location during the registration year.	176

A qualified end user that receives electricity through a	177
meter of an end user in this state or through more than one meter	178
at a single location in this state and that consumes, over the	179
course of the previous calendar year, more than forty-five million	180
kilowatt hours in other than its qualifying manufacturing process,	181
may elect to self-assess the tax as allowed by this division with	182
respect to the electricity used in other than its qualifying	183
manufacturing process.	184

Payment of the tax shall be made directly to the tax	185
commissioner in accordance with divisions (A)(4) and (5) of	186
section 5727.82 of the Revised Code, or the treasurer of state in	187
accordance with section 5727.83 of the Revised Code. If the	188
electric distribution company serving the self-assessing purchaser	189
is a municipal electric utility and the purchaser is within the	190
municipal corporation's corporate limits, payment shall be made to	191
such municipal corporation's general fund and reports shall be	192
filed in accordance with divisions (A)(4) and (5) of section	193
5727.82 of the Revised Code, except that "municipal corporation"	194
shall be substituted for "treasurer of state" and "tax	195
commissioner." A self-assessing purchaser that pays the excise tax	196
as provided in this division shall not be required to pay the tax	197
to the electric distribution company from which its electricity is	198
distributed. If a self-assessing purchaser's receipt of	199
electricity is not subject to the tax as measured under this	200
division, the tax on the receipt of such electricity shall be	201
measured and paid as provided in division (A) of this section.	202

(3) In the case of the acquisition of a package, unless the	203
elements of the package are separately stated isolating the total	204
price of electricity from the price of the remaining elements of	205
the package, the tax imposed under this section applies to the	206
entire price of the package. If the elements of the package are	207
separately stated, the tax imposed under this section applies to	208
the total price of the electricity.	209

(4) Any electric supplier that sells electricity as part of a	210
package shall separately state to the purchaser the total price of	211
the electricity and, upon request by the tax commissioner, the	212
total price of each of the other elements of the package.	213

(5) The tax commissioner may adopt rules relating to the	214
computation of the total price of electricity with respect to	215
self-assessing purchasers, which may include rules to establish	216
the total price of electricity purchased as part of a package.	217

(6) An annual application for registration as a	218
self-assessing purchaser shall be made for each qualifying meter	219
or location on a form prescribed by the tax commissioner. The	220
registration year begins on the first day of May and ends on the	221
following thirtieth day of April. Persons may apply after the	222
first day of May for the remainder of the registration year. In	223
the case of an applicant applying on the basis of an estimated	224
consumption of forty-five million kilowatt hours over the course	225
of the succeeding twelve months, the applicant shall provide such	226
information as the tax commissioner considers to be necessary to	227
estimate such consumption. At the time of making the application	228
and by the first day of May of each year, a self-assessing	229
purchaser shall pay a fee of five hundred dollars to the tax	230
commissioner, or to the treasurer of state as provided in section	231
5727.83 of the Revised Code, for each qualifying meter or	232
location. The tax commissioner shall immediately pay to the	233
treasurer of state all amounts that the tax commissioner receives	234
under this section. The treasurer of state shall deposit such	235
amounts into the kilowatt hour excise tax administration fund,	236
which is hereby created in the state treasury. Money in the fund	237
shall be used to defray the tax commissioner's cost in	238
administering the tax owed under section 5727.81 of the Revised	239
Code by self-assessing purchasers. After the application is	240
approved by the tax commissioner, the registration shall remain in	241
effect for the current registration year, or until canceled by the	242
registrant upon written notification to the commissioner of the	243
election to pay the tax in accordance with division (A) of this	244
section, or until canceled by the tax commissioner for not paying	245
the tax or fee under division (C) of this section or for not	246
meeting the qualifications in division (C)(2) of this section. The	247
tax commissioner shall give written notice to the electric	248
distribution company from which electricity is delivered to a	249
self-assessing purchaser of the purchaser's self-assessing status,	250
and the electric distribution company is relieved of the	251
obligation to pay the tax imposed by division (A) of this section	252
for electricity distributed to that self-assessing purchaser until	253
it is notified by the tax commissioner that the self-assessing	254
purchaser's registration is canceled. Within fifteen days of	255
notification of the canceled registration, the electric	256
distribution company shall be responsible for payment of the tax	257
imposed by division (A) of this section on electricity distributed	258
to a purchaser that is no longer registered as a self-assessing	259
purchaser. A self-assessing purchaser with a canceled registration	260
must file a report and remit the tax imposed by division (A) of	261
this section on all electricity it receives for any measurement	262
period prior to the tax being reported and paid by the electric	263
distribution company. A self-assessing purchaser whose	264
registration is canceled by the tax commissioner is not eligible	265
to register as a self-assessing purchaser for two years after the	266
registration is canceled.	267

(7) If the tax commissioner cancels the self-assessing	268
registration of a purchaser registered on the basis of its	269
estimated consumption because the purchaser does not consume at	270
least forty-five million kilowatt hours of electricity over the	271
course of the twelve-month period for which the estimate was made,	272
the tax commissioner shall assess and collect from the purchaser	273
the difference between (a) the amount of tax that would have been	274
payable under division (A) of this section on the electricity	275
distributed to the purchaser during that period and (b) the amount	276
of tax paid by the purchaser on such electricity pursuant to	277
division (C)(2) of this section. The assessment shall be paid	278
within sixty days after the tax commissioner issues it, regardless	279
of whether the purchaser files a petition for reassessment under	280
section 5727.89 of the Revised Code covering that period. If the	281
purchaser does not pay the assessment within the time prescribed,	282
the amount assessed is subject to the additional charge and the	283
interest prescribed by divisions (B) and (C) of section 5727.82 of	284
the Revised Code, and is subject to assessment under section	285
5727.89 of the Revised Code. If the purchaser is a qualified end	286
user, division (C)(7) of this section applies only to electricity	287
it consumes in other than its qualifying manufacturing process.	288

(D) The tax imposed by this section does not apply to the	289
distribution of any kilowatt hours of electricity to the federal	290
government, to an end user located at a federal facility that uses	291
electricity for the enrichment of uranium, to a qualified	292
regeneration meter, or to an end user for any day the end user is	293
a qualified end user. The exemption under this division for a	294
qualified end user only applies to the manufacturing location	295
where the qualified end user uses more than three million kilowatt	296
hours per day in a qualifying manufacturing process.	297

(E)(1) As used in this division:

298

(a) "Qualified data center" means a data center established	299
with the assistance of a grant awarded under the data center	300
development grant program authorized by section 184.05 of the	301
Revised Code.	302

(b) "Discounted rate" means a rate charged to a qualified	303
data center for retail electric service, as defined in section	304
4928.01 of the Revised Code, pursuant to a reasonable arrangement	305
between the electric distribution company and the qualified data	306
center under section 4905.31 of the Revised Code that is less than	307
the unvaried rate.	308

(c) "Unvaried rate" means the rate that would be charged a	309
qualified data center for retail electric service in the absence	310
of a reasonable arrangement.	311

(d) "Discount ratio" means the amount obtained by dividing	312
the discounted rate by the unvaried rate.	313

(2) The monthly tax on the kilowatt hours of electricity	314
distributed at a discounted rate to a qualified data center shall	315
be determined by obtaining the sum of divisions (A)(1), (2), and	316
(3) of this section and multiplying that sum by the discount ratio	317
and by the number of days in the measurement period.	318

On request of the tax commissioner, an electric distribution	319
company that charges a discounted rate to a qualified data center	320
shall provide any information that, in the tax commissioner's	321
opinion, is necessary to establish the discount ratio or the	322
amount of tax due under this division.	323

Section 2. That existing sections 184.19 and 5727.81 of the	324
Revised Code are hereby repealed.	325

Section 3. The amendment by this act of section 5727.81 of	326
the Revised Code applies to measurement periods beginning on or	327
after the effective date of this act.	328