SB 423

As Passed by the Senate
136th General Assembly
   Regular Session  Am. S. B. No. 423
       2025-2026
  Senator Manchester
Cosponsors: Senators Huffman, Antonio, Cirino, Craig, Hicks-Hudson, Johnson,
  Reineke
  To amend sections 4111.03, 4111.14, 4113.15,  1
  4121.01, 4123.01, 4141.01, and 5747.01 and to  2
  enact section 4113.87 of the Revised Code to  3
  specify that a health care worker is not the  4
  employee of a health care worker platform or  5
  health care facility for purposes of specified  6
  laws under certain circumstances.  7
 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
     Section 1. That sections 4111.03, 4111.14, 4113.15,  8
4121.01, 4123.01, 4141.01, and 5747.01 be amended and section  9
4113.87 of the Revised Code be enacted to read as follows:  10
     Sec. 4111.03. (A) Except as provided in section 4111.031  11
of the Revised Code, an employer shall pay an employee for  12
overtime at a wage rate of one and one-half times the employee's  13
wage rate for hours worked in excess of forty hours in one  14
workweek, in the manner and methods provided in and subject to  15
the exemptions of section 7 and section 13 of the "Fair Labor  16
Standards Act of 1938," 52 Stat. 1060, 29 U.S.C.A. 207, 213, as  17
amended, and, effective beginning on the effective date of this  18
amendment July 6, 2022, sections 2 and 4 of the "Portal to  19
Am. S. B. No. 423  Page 2
As Passed by the Senate
Portal Act of 1947," 29 U.S.C. 252 and 254.  20
        Any employee employed in agriculture shall not be covered  21
by the overtime provision of this section.  22
        A motor carrier may elect to apply the overtime provision  23
of this section to an individual who is excluded from the  24
provision under division (D)(3)(i) of this section.  25
        (B) If a county employee or township employee elects to  26
take compensatory time off in lieu of overtime pay, for any  27
overtime worked, compensatory time may be granted by the  28
employee's administrative superior, on a time and one-half  29
basis, at a time mutually convenient to the employee and the  30
administrative superior within one hundred eighty days after the  31
overtime is worked.  32
        (C) A township appointing authority or a county appointing  33
authority with the exception of the county department of job and  34
family services may, by rule or resolution as is appropriate,  35
indicate the authority's intention not to be bound by division  36
(B) of this section, and to adopt a different policy for the  37
calculation and payment of overtime than that established by  38
that division. Upon adoption, the alternative overtime policy  39
prevails. Prior to the adoption of an alternative overtime  40
policy, a township appointing authority or a county appointing  41
authority with the exception of the county department of job and  42
family services shall give a written notice of the alternative  43
policy to each employee at least ten days prior to its effective  44
date.  45
        (D) As used in this section and section 4111.031 of the  46
Revised Code:  47
        (1) "Employ" means to suffer or to permit to work.  48
Am. S. B. No. 423  Page 3
As Passed by the Senate
       (2) "Employer" means the state of Ohio, its  49
instrumentalities, and its political subdivisions and their  50
instrumentalities, any individual, partnership, association,  51
corporation, business trust, or any person or group of persons,  52
acting in the interest of an employer in relation to an  53
employee, but does not include either of the following:  54
       (a) An employer whose annual gross volume of sales made  55
for business done is less than one hundred fifty thousand  56
dollars, exclusive of excise taxes at the retail level which are  57
separately stated;  58
       (b) A franchisor with respect to the franchisor's  59
relationship with a franchisee or an employee of a franchisee,  60
unless the franchisor agrees to assume that role in writing or a  61
court of competent jurisdiction determines that the franchisor  62
exercises a type or degree of control over the franchisee or the  63
franchisee's employees that is not customarily exercised by a  64
franchisor for the purpose of protecting the franchisor's  65
trademark, brand, or both. For purposes of this division,  66
"franchisor" and "franchisee" have the same meanings as in 16  67
C.F.R. 436.1.  68
       (3) "Employee" means any individual employed by an  69
employer but does not include:  70
       (a) Any individual employed by the United States;  71
       (b) Any individual employed as a baby-sitter in the  72
employer's home, or a live-in companion to a sick, convalescing,  73
or elderly person whose principal duties do not include  74
housekeeping;  75
       (c) Any individual engaged in the delivery of newspapers  76
to the consumer;  77
Am. S. B. No. 423  Page 4
As Passed by the Senate
        (d) Any individual employed as an outside salesperson  78
compensated by commissions or employed in a bona fide executive,  79
administrative, or professional capacity as such terms are  80
defined by the "Fair Labor Standards Act of 1938," 52 Stat.  81
1060, 29 U.S.C.A. 201, as amended;  82
        (e) Any individual who works or provides personal services  83
of a charitable nature in a hospital or health institution for  84
which compensation is not sought or contemplated;  85
        (f) A member of a police or fire protection agency or  86
student employed on a part-time or seasonal basis by a political  87
subdivision of this state;  88
        (g) Any individual in the employ of a camp or recreational  89
area for children under eighteen years of age and owned and  90
operated by a nonprofit organization or group of organizations  91
described in Section 501(c)(3) of the "Internal Revenue Code of  92
1954," and exempt from income tax under Section 501(a) of that  93
code;  94
        (h) Any individual employed directly by the house of  95
representatives or directly by the senate;  96
        (i) An individual who operates a vehicle or vessel in the  97
performance of services for or on behalf of a motor carrier  98
transporting property and to whom all of the following factors  99
apply:  100
        (i) The individual owns the vehicle or vessel that is used  101
in performing the services for or on behalf of the carrier, or  102
the individual leases the vehicle or vessel under a bona fide  103
lease agreement that is not a temporary replacement lease  104
agreement. For purposes of this division, a bona fide lease  105
agreement does not include an agreement between the individual  106
Am. S. B. No. 423  Page 5
As Passed by the Senate
and the motor carrier transporting property for which, or on  107
whose behalf, the individual provides services.  108
       (ii) The individual is responsible for supplying the  109
necessary personal services to operate the vehicle or vessel  110
used to provide the service.  111
       (iii) The compensation paid to the individual is based on  112
factors related to work performed, including on a mileage-based  113
rate or a percentage of any schedule of rates, and not solely on  114
the basis of the hours or time expended.  115
       (iv) The individual substantially controls the means and  116
manner of performing the services, in conformance with  117
regulatory requirements and specifications of the shipper.  118
       (v) The individual enters into a written contract with the  119
carrier for whom the individual is performing the services that  120
describes the relationship between the individual and the  121
carrier to be that of an independent contractor and not that of  122
an employee.  123
       (vi) The individual is responsible for substantially all  124
of the principal operating costs of the vehicle or vessel and  125
equipment used to provide the services, including maintenance,  126
fuel, repairs, supplies, vehicle or vessel insurance, and  127
personal expenses, except that the individual may be paid by the  128
carrier the carrier's fuel surcharge and incidental costs,  129
including tolls, permits, and lumper fees.  130
       (vii) The individual is responsible for any economic loss  131
or economic gain from the arrangement with the carrier.  132
       (j) A health care worker, with respect to a health care  133
worker platform or health care facility for work booked through  134
a health care worker platform, in accordance with section  135
Am. S. B. No. 423  Page 6
As Passed by the Senate
4113.87 of the Revised Code.  136
       (4) "Motor carrier" has the same meaning as in section  137
4923.01 of the Revised Code.  138
       Sec. 4111.14. (A) Pursuant to the general assembly's  139
authority to establish a minimum wage under Section 34 of  140
Article II, Ohio Constitution, this section is in implementation  141
of Section 34a of Article II, Ohio Constitution. In implementing  142
Section 34a of Article II, Ohio Constitution, the general  143
assembly hereby finds that the purpose of Section 34a of Article  144
II, Ohio Constitution, is to:  145
       (1) Ensure that Ohio employees, as defined in division (B)  146
(1) of this section, are paid the wage rate required by Section  147
34a of Article II, Ohio Constitution;  148
       (2) Ensure that covered Ohio employers maintain certain  149
records that are directly related to the enforcement of the wage  150
rate requirements in Section 34a of Article II, Ohio  151
Constitution;  152
       (3) Ensure that Ohio employees who are paid the wage rate  153
required by Section 34a of Article II, Ohio Constitution, may  154
enforce their right to receive that wage rate in the manner set  155
forth in Section 34a of Article II, Ohio Constitution; and  156
       (4) Protect the privacy of Ohio employees' pay and  157
personal information specified in Section 34a of Article II,  158
Ohio Constitution, by restricting an employee's access, and  159
access by a person acting on behalf of that employee, to the  160
employee's own pay and personal information.  161
       (B) In accordance with Section 34a of Article II, Ohio  162
Constitution, the terms "employer," "employee," "employ,"  163
"person," and "independent contractor" have the same meanings as  164
Am. S. B. No. 423  Page 7
As Passed by the Senate
in the "Fair Labor Standards Act of 1938," 52 Stat. 1060, 29  165
U.S.C. 203, as amended. In construing the meaning of these  166
terms, due consideration and great weight shall be given to the  167
United States department of labor's and federal courts'  168
interpretations of those terms under the Fair Labor Standards  169
Act and its regulations. As used in division (B) of this  170
section:  171
       (1) "Employee" means individuals employed in Ohio, but  172
does not mean individuals who are excluded from the definition  173
of "employee" under 29 U.S.C. 203(e) or individuals who are  174
exempted from the minimum wage requirements in 29 U.S.C. 213 and  175
from the definition of "employee" in this chapter.  176
       (2) "Employ" and "employee" do not include any either of  177
the following:  178
       (a) Any person acting as a volunteer. In construing who is  179
a volunteer, "volunteer" shall have the same meaning as in  180
sections 553.101 to 553.106 of Title 29 of the Code of Federal  181
Regulations, as amended, and due consideration and great weight  182
shall be given to the United States department of labor's and  183
federal courts' interpretations of the term "volunteer" under  184
the Fair Labor Standards Act and its regulations.  185
       (b) A health care worker, with respect to a health care  186
worker platform or health care facility for work booked through  187
a health care worker platform, in accordance with section  188
4113.87 of the Revised Code.  189
       (3) "Employer" does not include a franchisor with respect  190
to the franchisor's relationship with a franchisee or an  191
employee of a franchisee, unless the franchisor agrees to assume  192
that role in writing or a court of competent jurisdiction  193
Am. S. B. No. 423  Page 8
As Passed by the Senate
determines that the franchisor exercises a type or degree of  194
control over the franchisee or the franchisee's employees that  195
is not customarily exercised by a franchisor for the purpose of  196
protecting the franchisor's trademark, brand, or both. For  197
purposes of this division, "franchisor" and "franchisee" have  198
the same meanings as in 16 C.F.R. 436.1.  199
       (4) Subject to division (B)(5) of this section, "employee"  200
does not include an individual who operates a vehicle or vessel  201
in the performance of services for or on behalf of a motor  202
carrier transporting property and to whom all of the following  203
factors apply:  204
       (a) The individual owns the vehicle or vessel that is used  205
in performing the services for or on behalf of the carrier, or  206
the individual leases the vehicle or vessel under a bona fide  207
lease agreement that is not a temporary replacement lease  208
agreement. For purposes of this division, a bona fide lease  209
agreement does not include an agreement between the individual  210
and the motor carrier transporting property for which, or on  211
whose behalf, the individual provides services.  212
       (b) The individual is responsible for supplying the  213
necessary personal services to operate the vehicle or vessel  214
used to provide the service.  215
       (c) The compensation paid to the individual is based on  216
factors related to work performed, including on a mileage-based  217
rate or a percentage of any schedule of rates, and not solely on  218
the basis of the hours or time expended.  219
       (d) The individual substantially controls the means and  220
manner of performing the services, in conformance with  221
regulatory requirements and specifications of the shipper.  222
Am. S. B. No. 423  Page 9
As Passed by the Senate
       (e) The individual enters into a written contract with the  223
carrier for whom the individual is performing the services that  224
describes the relationship between the individual and the  225
carrier to be that of an independent contractor and not that of  226
an employee.  227
       (f) The individual is responsible for substantially all of  228
the principal operating costs of the vehicle or vessel and  229
equipment used to provide the services, including maintenance,  230
fuel, repairs, supplies, vehicle or vessel insurance, and  231
personal expenses, except that the individual may be paid by the  232
carrier the carrier's fuel surcharge and incidental costs,  233
including tolls, permits, and lumper fees.  234
       (g) The individual is responsible for any economic loss or  235
economic gain from the arrangement with the carrier.  236
       (5) A motor carrier may elect to consider an individual  237
described in division (B)(4) of this section as an employee for  238
purposes of this section.  239
       (6) "Motor carrier" has the same meaning as in section  240
4923.01 of the Revised Code.  241
       (C) In accordance with Section 34a of Article II, Ohio  242
Constitution, the state may issue licenses to employers  243
authorizing payment of a wage below that required by Section 34a  244
of Article II, Ohio Constitution, to individuals with mental or  245
physical disabilities that may otherwise adversely affect their  246
opportunity for employment. In issuing such licenses, the state  247
shall abide by the rules adopted pursuant to section 4111.06 of  248
the Revised Code.  249
       (D)(1) In accordance with Section 34a of Article II, Ohio  250
Constitution, individuals employed in or about the property of  251
Am. S. B. No. 423  Page 10
As Passed by the Senate
an employer or an individual's residence on a casual basis are  252
not included within the coverage of Section 34a of Article II,  253
Ohio Constitution. As used in division (D) of this section:  254
       (a) "Casual basis" means employment that is irregular or  255
intermittent and that is not performed by an individual whose  256
vocation is to be employed in or about the property of the  257
employer or individual's residence. In construing who is  258
employed on a "casual basis," due consideration and great weight  259
shall be given to the United States department of labor's and  260
federal courts' interpretations of the term "casual basis" under  261
the Fair Labor Standards Act and its regulations.  262
       (b) "An individual employed in or about the property of an  263
employer or individual's residence" means an individual employed  264
on a casual basis or an individual employed in or about a  265
residence on a casual basis, respectively.  266
       (2) In accordance with Section 34a of Article II, Ohio  267
Constitution, employees of a solely family-owned and operated  268
business who are family members of an owner are not included  269
within the coverage of Section 34a of Article II, Ohio  270
Constitution. As used in division (D)(2) of this section,  271
"family member" means a parent, spouse, child, stepchild,  272
sibling, grandparent, grandchild, or other member of an owner's  273
immediate family.  274
       (E) In accordance with Section 34a of Article II, Ohio  275
Constitution, an employer shall at the time of hire provide an  276
employee with the employer's name, address, telephone number,  277
and other contact information and update such information when  278
it changes. As used in division (E) of this section:  279
       (1) "Other contact information" may include, where  280
Am. S. B. No. 423  Page 11
As Passed by the Senate
applicable, the address of the employer's internet site on the  281
world wide web, the employer's electronic mail address, fax  282
number, or the name, address, and telephone number of the  283
employer's statutory agent. "Other contact information" does not  284
include the name, address, telephone number, fax number,  285
internet site address, or electronic mail address of any  286
employee, shareholder, officer, director, supervisor, manager,  287
or other individual employed by or associated with an employer.  288
       (2) "When it changes" means that the employer shall  289
provide its employees with the change in its name, address,  290
telephone number, or other contact information within sixty  291
business days after the change occurs. The employer shall  292
provide the changed information by using any of its usual  293
methods of communicating with its employees, including, but not  294
limited to, listing the change on the employer's internet site  295
on the world wide web, internal computer network, or a bulletin  296
board where it commonly posts employee communications or by  297
insertion or inclusion with employees' paychecks or pay stubs.  298
       (F) In accordance with Section 34a of Article II, Ohio  299
Constitution, an employer shall maintain a record of the name,  300
address, occupation, pay rate, hours worked for each day worked,  301
and each amount paid an employee for a period of not less than  302
three years following the last date the employee was employed by  303
that employer. As used in division (F) of this section:  304
       (1) "Address" means an employee's home address as  305
maintained in the employer's personnel file or personnel  306
database for that employee.  307
       (2)(a) With respect to employees who are not exempt from  308
the overtime pay requirements of the Fair Labor Standards Act or  309
this chapter, "pay rate" means an employee's base rate of pay.  310
Am. S. B. No. 423  Page 12
As Passed by the Senate
       (b) With respect to employees who are exempt from the  311
overtime pay requirements of the Fair Labor Standards Act or  312
this chapter, "pay rate" means an employee's annual base salary  313
or other rate of pay by which the particular employee qualifies  314
for that exemption under the Fair Labor Standards Act or this  315
chapter, but does not include bonuses, stock options,  316
incentives, deferred compensation, or any other similar form of  317
compensation.  318
       (3) "Record" means the name, address, occupation, pay  319
rate, hours worked for each day worked, and each amount paid an  320
employee in one or more documents, databases, or other paper or  321
electronic forms of record-keeping maintained by an employer. No  322
one particular method or form of maintaining such a record or  323
records is required under this division. An employer is not  324
required to create or maintain a single record containing only  325
the employee's name, address, occupation, pay rate, hours worked  326
for each day worked, and each amount paid an employee. An  327
employer shall maintain a record or records from which the  328
employee or person acting on behalf of that employee could  329
reasonably review the information requested by the employee or  330
person.  331
       An employer is not required to maintain the records  332
specified in division (F)(3) of this section for any period  333
before January 1, 2007. On and after January 1, 2007, the  334
employer shall maintain the records required by division (F)(3)  335
of this section for three years from the date the hours were  336
worked by the employee and for three years after the date the  337
employee's employment ends.  338
       (4)(a) Except for individuals specified in division (F)(4)  339
(b) of this section, "hours worked for each day worked" means  340
Am. S. B. No. 423  Page 13
As Passed by the Senate
the total amount of time worked by an employee in whatever  341
increments the employer uses for its payroll purposes during a  342
day worked by the employee. An employer is not required to keep  343
a record of the time of day an employee begins and ends work on  344
any given day. As used in division (F)(4) of this section, "day"  345
means a fixed period of twenty-four consecutive hours during  346
which an employee performs work for an employer.  347
       (b) An employer is not required to keep records of "hours  348
worked for each day worked" for individuals for whom the  349
employer is not required to keep those records under the Fair  350
Labor Standards Act and its regulations or individuals who are  351
not subject to the overtime pay requirements specified in  352
section 4111.03 of the Revised Code.  353
       (5) "Each amount paid an employee" means the total gross  354
wages paid to an employee for each pay period. As used in  355
division (F)(5) of this section, "pay period" means the period  356
of time designated by an employer to pay an employee the  357
employee's gross wages in accordance with the employer's payroll  358
practices under section 4113.15 of the Revised Code.  359
       (G) In accordance with Section 34a of Article II, Ohio  360
Constitution, an employer must provide such information without  361
charge to an employee or person acting on behalf of an employee  362
upon request. As used in division (G) of this section:  363
       (1) "Such information" means the name, address,  364
occupation, pay rate, hours worked for each day worked, and each  365
amount paid for the specific employee who has requested that  366
specific employee's own information and does not include the  367
name, address, occupation, pay rate, hours worked for each day  368
worked, or each amount paid of any other employee of the  369
employer. "Such information" does not include hours worked for  370
Am. S. B. No. 423  Page 14
As Passed by the Senate
each day worked by individuals for whom an employer is not  371
required to keep that information under the Fair Labor Standards  372
Act and its regulations or individuals who are not subject to  373
the overtime pay requirements specified in section 4111.03 of  374
the Revised Code.  375
       (2) "Acting on behalf of an employee" means a person  376
acting on behalf of an employee as any of the following:  377
       (a) The certified or legally recognized collective  378
bargaining representative for that employee under the applicable  379
federal law or Chapter 4117. of the Revised Code;  380
       (b) The employee's attorney;  381
       (c) The employee's parent, guardian, or legal custodian.  382
       A person "acting on behalf of an employee" must be  383
specifically authorized by an employee in order to make a  384
request for that employee's own name, address, occupation, pay  385
rate, hours worked for each day worked, and each amount paid to  386
that employee.  387
       (3) "Provide" means that an employer shall provide the  388
requested information within thirty business days after the date  389
the employer receives the request, unless either of the  390
following occurs:  391
       (a) The employer and the employee or person acting on  392
behalf of the employee agree to some alternative time period for  393
providing the information.  394
       (b) The thirty-day period would cause a hardship on the  395
employer under the circumstances, in which case the employer  396
must provide the requested information as soon as practicable.  397
       (4) A "request" made by an employee or a person acting on  398
Am. S. B. No. 423  Page 15
As Passed by the Senate
behalf of an employee means a request by an employee or a person  399
acting on behalf of an employee for the employee's own  400
information. The employer may require that the employee provide  401
the employer with a written request that has been signed by the  402
employee and notarized and that reasonably specifies the  403
particular information being requested. The employer may require  404
that the person acting on behalf of an employee provide the  405
employer with a written request that has been signed by the  406
employee whose information is being requested and notarized and  407
that reasonably specifies the particular information being  408
requested.  409
       (H) In accordance with Section 34a of Article II, Ohio  410
Constitution, an employee, person acting on behalf of one or  411
more employees, and any other interested party may file a  412
complaint with the state for a violation of any provision of  413
Section 34a of Article II, Ohio Constitution, or any law or  414
regulation implementing its provisions. Such complaint shall be  415
promptly investigated and resolved by the state. The employee's  416
name shall be kept confidential unless disclosure is necessary  417
to resolution of a complaint and the employee consents to  418
disclosure. As used in division (H) of this section:  419
       (1) "Complaint" means a complaint of an alleged violation  420
pertaining to harm suffered by the employee filing the  421
complaint, by a person acting on behalf of one or more  422
employees, or by an interested party.  423
       (2) "Acting on behalf of one or more employees" has the  424
same meaning as "acting on behalf of an employee" in division  425
(G)(2) of this section. Each employee must provide a separate  426
written and notarized authorization before the person acting on  427
that employee's or those employees' behalf may request the name,  428
Am. S. B. No. 423  Page 16
As Passed by the Senate
address, occupation, pay rate, hours worked for each day worked,  429
and each amount paid for the particular employee.  430
       (3) "Interested party" means a party who alleges to be  431
injured by the alleged violation and who has standing to file a  432
complaint under common law principles of standing.  433
       (4) "Resolved by the state" means that the complaint has  434
been resolved to the satisfaction of the state.  435
       (5) "Shall be kept confidential" means that the state  436
shall keep the name of the employee confidential as required by  437
division (H) of this section.  438
       (I) In accordance with Section 34a of Article II, Ohio  439
Constitution, the state may on its own initiative investigate an  440
employer's compliance with Section 34a of Article II, Ohio  441
Constitution, and any law or regulation implementing Section 34a  442
of Article II, Ohio Constitution. The employer shall make  443
available to the state any records related to such investigation  444
and other information required for enforcement of Section 34a of  445
Article II, Ohio Constitution or any law or regulation  446
implementing Section 34a of Article II, Ohio Constitution. The  447
state shall investigate an employer's compliance with this  448
section in accordance with the procedures described in section  449
4111.04 of the Revised Code. All records and information related  450
to investigations by the state are confidential and are not a  451
public record subject to section 149.43 of the Revised Code.  452
This division does not prevent the state from releasing to or  453
exchanging with other state and federal wage and hour regulatory  454
authorities information related to investigations.  455
       (J) In accordance with Section 34a of Article II, Ohio  456
Constitution, damages shall be calculated as an additional two  457
Am. S. B. No. 423  Page 17
As Passed by the Senate
times the amount of the back wages and in the case of a  458
violation of an anti-retaliation provision an amount set by the  459
state or court sufficient to compensate the employee and deter  460
future violations, but not less than one hundred fifty dollars  461
for each day that the violation continued. The "not less than  462
one hundred fifty dollar" penalty specified in division (J) of  463
this section shall be imposed only for violations of the anti-  464
retaliation provision in Section 34a of Article II, Ohio  465
Constitution.  466
       (K) In accordance with Section 34a of Article II, Ohio  467
Constitution, an action for equitable and monetary relief may be  468
brought against an employer by the attorney general and/or an  469
employee or person acting on behalf of an employee or all  470
similarly situated employees in any court of competent  471
jurisdiction, including the court of common pleas of an  472
employee's county of residence, for any violation of Section 34a  473
of Article II, Ohio Constitution, or any law or regulation  474
implementing its provisions within three years of the violation  475
or of when the violation ceased if it was of a continuing  476
nature, or within one year after notification to the employee of  477
final disposition by the state of a complaint for the same  478
violation, whichever is later.  479
       (1) As used in division (K) of this section,  480
"notification" means the date on which the notice was sent to  481
the employee by the state.  482
       (2) No employee shall join as a party plaintiff in any  483
civil action that is brought under division (K) of this section  484
by an employee, person acting on behalf of an employee, or  485
person acting on behalf of all similarly situated employees  486
unless that employee first gives written consent to become such  487
Am. S. B. No. 423  Page 18
As Passed by the Senate
a party plaintiff and that consent is filed with the court in  488
which the action is brought.  489
       (3) A civil action regarding an alleged violation of this  490
section shall be maintained only under division (K) of this  491
section. This division does not preclude the joinder in a single  492
civil action of an action under this division and an action  493
under section 4111.10 of the Revised Code.  494
       (4) Any agreement between an employee and employer to work  495
for less than the wage rate specified in Section 34a of Article  496
II, Ohio Constitution, is no defense to an action under this  497
section.  498
       (L) In accordance with Section 34a of Article II, Ohio  499
Constitution, there shall be no exhaustion requirement, no  500
procedural, pleading, or burden of proof requirements beyond  501
those that apply generally to civil suits in order to maintain  502
such action and no liability for costs or attorney's fees on an  503
employee except upon a finding that such action was frivolous in  504
accordance with the same standards that apply generally in civil  505
suits. Nothing in division (L) of this section affects the right  506
of an employer and employee to agree to submit a dispute under  507
this section to alternative dispute resolution, including, but  508
not limited to, arbitration, in lieu of maintaining the civil  509
suit specified in division (K) of this section. Nothing in this  510
division limits the state's ability to investigate or enforce  511
this section.  512
       (M) An employer who provides such information specified in  513
Section 34a of Article II, Ohio Constitution, shall be immune  514
from any civil liability for injury, death, or loss to person or  515
property that otherwise might be incurred or imposed as a result  516
of providing that information to an employee or person acting on  517
Am. S. B. No. 423  Page 19
As Passed by the Senate
behalf of an employee in response to a request by the employee  518
or person, and the employer shall not be subject to the  519
provisions of Chapters 1347. and 1349. of the Revised Code to  520
the extent that such provisions would otherwise apply. As used  521
in division (M) of this section, "such information," "acting on  522
behalf of an employee," and "request" have the same meanings as  523
in division (G) of this section.  524
       (N) As used in this section, "the state" means the  525
director of commerce.  526
       Sec. 4113.15. (A) Every employer doing business in this  527
state shall, on or before the first day of each month, pay all  528
its employees the wages earned by them during the first half of  529
the preceding month ending with the fifteenth day thereof, and  530
shall, on or before the fifteenth day of each month, pay such  531
employees the wages earned by them during the last half of the  532
preceding calendar month. If at any time of payment an employee  533
is absent from the employee's regular place of labor and does  534
not receive payment of wages through an authorized  535
representative, such person shall be entitled to said payment at  536
any time thereafter upon demand upon the proper paymaster at the  537
place where such wages are usually paid and where such pay is  538
due. This section does not prohibit the daily or weekly payment  539
of wages. The use of a longer time lapse that is customary to a  540
given trade, profession or occupation, or establishment of a  541
different time lapse by written contract or by operation of law.  542
       (B) Where wages remain unpaid for thirty days beyond the  543
regularly scheduled payday or, in the case where no regularly  544
scheduled payday is applicable, for sixty days beyond the filing  545
by the employee of a claim or for sixty days beyond the date of  546
the agreement, award, or other act making wages payable and no  547
Am. S. B. No. 423  Page 20
As Passed by the Senate
contest court order or dispute of any wage claim including the  548
assertion of a counterclaim exists accounting for nonpayment,  549
the employer, in addition, as liquidated damages, is liable to  550
the employee in an amount equal to six per cent of the amount of  551
the claim still unpaid and not in contest or disputed or two  552
hundred dollars, whichever is greater.  553
       (C) In the absence of a contest, court order or dispute,  554
an employer who is party to an agreement to pay or provide  555
fringe benefits to an employee or to make any employee  556
authorized deduction becomes a trustee of any funds required by  557
such agreement to be paid to any person, organization, or  558
governmental agency from the time that the duty to make such  559
payment arises. No person shall, without reasonable  560
justification or excuse for such failure, knowingly fail or  561
refuse to pay to the appropriate person, organization, or  562
governmental agency the amount necessary to provide the benefits  563
or accomplish the purpose of any employee authorized deduction,  564
within thirty days after the close of the pay period during  565
which the employee earned or had deducted the amount of money  566
necessary to pay for the fringe benefit or make any employee  567
authorized deduction. A failure or refusal to pay, regardless of  568
the number of employee pay accounts involved, constitutes one  569
offense for the first delinquency of thirty days and a separate  570
offense for each successive delinquency of thirty days.  571
       (D) As used in this section and section 4113.16 of the  572
Revised Code:  573
       (1) "Wage" means the net amount of money payable to an  574
employee, including any guaranteed pay or reimbursement for  575
expenses, less any federal, state, or local taxes withheld; any  576
deductions made pursuant to a written agreement for the purpose  577
Am. S. B. No. 423  Page 21
As Passed by the Senate
of providing the employee with any fringe benefits; and any  578
employee authorized deduction.  579
       (2) "Fringe benefits" includes but is not limited to  580
health, welfare, or retirement benefits, whether paid for  581
entirely by the employer or on the basis of a joint employer-  582
employee contribution, or vacation, separation, or holiday pay.  583
       (3) "Employee authorized deduction" includes but is not  584
limited to deductions for the purpose of any of the following:  585
       (a) Purchase of United States savings bonds or corporate  586
stocks or bonds;  587
       (b) A charitable contribution;  588
       (c) Credit union savings or other regular savings program;  589
       (d) Repayment of a loan or other obligation.  590
       (4) "Employer" means an individual, firm, partnership,  591
association, or corporation, but does not include a franchisor  592
with respect to the franchisor's relationship with a franchisee  593
or an employee of a franchisee, unless either of the following  594
applies:  595
       (a) The franchisor agrees to assume that role in writing.  596
       (b) A court of competent jurisdiction determines that the  597
franchisor exercises a type or degree of control over the  598
franchisee or the franchisee's employees that is not customarily  599
exercised by a franchisor for the purpose of protecting the  600
franchisor's trademark, brand, or both.  601
       (5) "Franchisor" and "franchisee" have the same meanings  602
as in 16 C.F.R. 436.1.  603
       (6) "Employee" does not include a health care worker, with  604
Am. S. B. No. 423  Page 22
As Passed by the Senate
respect to a health care worker platform or health care facility  605
for work booked through a health care worker platform, in  606
accordance with section 4113.87 of the Revised Code.  607
       Sec. 4113.87. (A) As used in this section:  608
       (1) "Health care worker" means any health care  609
professional or worker who provides health care or directly  610
related services to patients through a health care worker  611
platform, including professionals or workers who are providing a  612
service to patients that does not require a license.  613
       (2) "Health care worker platform" means any person that  614
operates or offers an electronic platform, system, or  615
application through which health care workers can accept one or  616
more shifts to perform health care related services at a health  617
care facility.  618
       (3) "Health care facility" means any facility used to  619
provide health care or related services.  620
       (B) Except as provided in division (C) of this section, a  621
health care worker is not the employee of a health care worker  622
platform or health care facility for work booked through a  623
health care worker platform for purposes of sections 4111.03,  624
4111.14, 4113.15, 4121.01, 4123.01, 4141.01, and 5747.01 of the  625
Revised Code if all of the following apply:  626
       (1) The health care worker platform and health care worker  627
agree in writing or electronically that the health care worker  628
is an independent contractor for all work booked through the  629
platform.  630
       (2) The health care worker platform allows each health  631
care worker to decide whether to accept a shift at a health care  632
facility without any requirement that a health care worker  633
Am. S. B. No. 423  Page 23
As Passed by the Senate
accepts a minimum number of shifts.  634
        (3) The health care platform allows each health care  635
worker to agree in writing or electronically to the rates  636
offered or set by the health care facility or the health care  637
worker platform.  638
        (4) The health care worker may accept or reject shifts  639
with any health care facility without being penalized by the  640
health care worker platform.  641
        (5) The health care worker platform does not require the  642
health care worker to be available to accept or fulfill any  643
particular shifts during specific hours or on specific days.  644
        (6) The health care worker platform does not restrict the  645
health care worker from engaging in any other occupation or  646
business, including health care work or health care related  647
work.  648
        (7) The health care worker platform does not require the  649
health care worker to use specific equipment, tools, or other  650
supplies.  651
        (8) The health care worker platform does not prescribe or  652
control the means and methods for the services performed by a  653
health care worker at a health care facility.  654
        (9) The contract or other agreement between the health  655
care worker and the health care worker platform may be  656
terminated by either party with or without cause.  657
        (10) The health care worker is responsible for the payment  658
of all federal, state, and local taxes on the health care  659
worker's earnings derived from all services performed for health  660
care facilities booked through the platform.  661
Am. S. B. No. 423  Page 24
As Passed by the Senate
       (11) The health care worker platform does not require a  662
health care worker to enter into a noncompete agreement with the  663
platform.  664
       (12) The health care worker platform does not require a  665
health care worker or health care facility to pay any fee or  666
compensation to the platform if a health care worker accepts an  667
offer of employment from a health care facility.  668
       (13) The health care worker platform does not restrict a  669
health care worker from accepting shifts through another  670
platform or from a health care facility that does not offer  671
shifts on the platform, except that a health care worker  672
platform may remove from the platform a health care worker who  673
accepts simultaneous shifts on two different health care worker  674
platforms.  675
       (14) The health care worker platform maintains, or  676
verifies that the health care worker maintains, occupational  677
accident insurance that applies to the work of the health care  678
worker who books work through the health care worker platform.  679
       (15) The health care worker platform maintains, or  680
verifies that the health care worker maintains, general  681
liability insurance or professional liability insurance for work  682
booked through the health care worker platform.  683
       (C) Division (B) of this section does not apply to a  684
health care worker's relationship with a health care facility  685
for work booked through a health care worker platform by the  686
health care worker if the health care worker and health care  687
facility or its parent company have an existing employment  688
relationship and either of the following apply:  689
       (1) The health care worker has received compensation from  690
Am. S. B. No. 423  Page 25
As Passed by the Senate
the health care facility or parent company that must be reported  691
using internal revenue service form W-2 for any of the twenty-  692
one days immediately preceding the shift.  693
       (2) The health care worker books a shift at the health  694
care facility through a health care worker platform during a  695
period of employer-approved leave, including medical, parental,  696
family, or military leave, whether paid or unpaid.  697
       (D) A health care worker platform may advertise to the  698
public that the platform is seeking health care workers to use  699
the platform.  700
       Sec. 4121.01. (A) As used in sections 4121.01 to 4121.29  701
of the Revised Code:  702
       (1) "Place of employment" means every place, whether  703
indoors or out, or underground, and the premises appurtenant  704
thereto, where either temporarily or permanently any industry,  705
trade, or business is carried on, or where any process or  706
operation, directly or indirectly related to any industry,  707
trade, or business, is carried on and where any person is  708
directly or indirectly employed by another for direct or  709
indirect gain or profit, but does not include any place where  710
persons are employed in private domestic service or agricultural  711
pursuits which do not involve the use of mechanical power.  712
       (2) "Employment" means any trade, occupation, or process  713
of manufacture or any method of carrying on such trade,  714
occupation, or process of manufacture in which any person may be  715
engaged, except in such private domestic service or agricultural  716
pursuits as do not involve the use of mechanical power.  717
       (3) "Employer" means every person, firm, corporation,  718
agent, manager, representative, or other person having control  719
Am. S. B. No. 423  Page 26
As Passed by the Senate
or custody of any employment, place of employment, or employee.  720
"Employer" does not include a franchisor with respect to the  721
franchisor's relationship with a franchisee or an employee of a  722
franchisee, unless the franchisor agrees to assume that role in  723
writing or a court of competent jurisdiction determines that the  724
franchisor exercises a type or degree of control over the  725
franchisee or the franchisee's employees that is not customarily  726
exercised by a franchisor for the purpose of protecting the  727
franchisor's trademark, brand, or both. For purposes of this  728
division, "franchisor" and "franchisee" have the same meanings  729
as in 16 C.F.R. 436.1.  730
       (4)(a)(4) "Employee" means a person who may be required or  731
directed by any employer, in consideration of direct or indirect  732
gain or profit, to engage in any employment, or to go, or work,  733
or be at any time in any place of employment, including a person  734
described in division (A)(4)(b) of this section if a motor  735
carrier elects to consider the person to be an employee.  736
       (b) "Employee" does not include a either of the following:  737
       (a) A health care worker, with respect to a health care  738
worker platform or health care facility for work booked through  739
a health care worker platform, in accordance with section  740
4113.87 of the Revised Code.  741
       (b) A person who operates a vehicle or vessel in the  742
performance of services for or on behalf of a motor carrier  743
transporting property and to whom all of the following factors  744
apply:  745
       (i) The person owns the vehicle or vessel that is used in  746
performing the services for or on behalf of the carrier, or the  747
person leases the vehicle or vessel under a bona fide lease  748
Am. S. B. No. 423  Page 27
As Passed by the Senate
agreement that is not a temporary replacement lease agreement.  749
For purposes of this division, a bona fide lease agreement does  750
not include an agreement between the person and the motor  751
carrier transporting property for which, or on whose behalf, the  752
person provides services.  753
       (ii) The person is responsible for supplying the necessary  754
personal services to operate the vehicle or vessel used to  755
provide the service.  756
       (iii) The compensation paid to the person is based on  757
factors related to work performed, including on a mileage-based  758
rate or a percentage of any schedule of rates, and not solely on  759
the basis of the hours or time expended.  760
       (iv) The person substantially controls the means and  761
manner of performing the services, in conformance with  762
regulatory requirements and specifications of the shipper.  763
       (v) The person enters into a written contract with the  764
carrier for whom the person is performing the services that  765
describes the relationship between the person and the carrier to  766
be that of an independent contractor and not that of an  767
employee.  768
       (vi) The person is responsible for substantially all of  769
the principal operating costs of the vehicle or vessel and  770
equipment used to provide the services, including maintenance,  771
fuel, repairs, supplies, vehicle or vessel insurance, and  772
personal expenses, except that the person may be paid by the  773
carrier the carrier's fuel surcharge and incidental costs,  774
including tolls, permits, and lumper fees.  775
       (vii) The person is responsible for any economic loss or  776
economic gain from the arrangement with the carrier.  777
Am. S. B. No. 423  Page 28
As Passed by the Senate
       (5) "Frequenter" means every person, other than an  778
employee, who may go in or be in a place of employment under  779
circumstances which render the person other than a trespasser.  780
       (6) "Deputy" means any person employed by the industrial  781
commission or the bureau of workers' compensation, designated as  782
a deputy by the commission or the administrator of workers'  783
compensation, who possesses special, technical, scientific,  784
managerial, professional, or personal abilities or qualities in  785
matters within the jurisdiction of the commission or the bureau,  786
and who may be engaged in the performance of duties under the  787
direction of the commission or the bureau calling for the  788
exercise of such abilities or qualities.  789
       (7) "Order" means any decision, rule, regulation,  790
direction, requirement, or standard, or any other determination  791
or decision that the bureau is empowered to and does make.  792
       (8) "General order" means an order that applies generally  793
throughout the state to all persons, employments, or places of  794
employment, or all persons, employments, or places of employment  795
of a class under the jurisdiction of the bureau. All other  796
orders shall be considered special orders.  797
       (9) "Local order" means any ordinance, order, rule, or  798
determination of the legislative authority of any municipal  799
corporation, or any trustees, or board or officers of any  800
municipal corporation upon any matter over which the bureau has  801
jurisdiction.  802
       (10) "Welfare" means comfort, decency, and moral well-  803
being.  804
       (11) "Safe" or "safety," as applied to any employment or a  805
place of employment, means such freedom from danger to the life,  806
Am. S. B. No. 423  Page 29
As Passed by the Senate
health, safety, or welfare of employees or frequenters as the  807
nature of the employment will reasonably permit, including  808
requirements as to the hours of labor with relation to the  809
health and welfare of employees.  810
       (12) "Employee organization" means any labor or bona fide  811
organization in which employees participate and that exists for  812
the purpose, in whole or in part, of dealing with employers  813
concerning grievances, labor disputes, wages, hours, terms, and  814
other conditions of employment.  815
       (13) "Motor carrier" has the same meaning as in section  816
4923.01 of the Revised Code.  817
       (B) As used in the Revised Code:  818
       (1) "Industrial commission" means the chairperson of the  819
three-member industrial commission created pursuant to section  820
4121.02 of the Revised Code when the context refers to the  821
authority vested in the chairperson as the chief executive  822
officer of the three-member industrial commission pursuant to  823
divisions (A), (B), (C), and (D) of section 4121.03 of the  824
Revised Code.  825
       (2) "Industrial commission" means the three-member  826
industrial commission created pursuant to section 4121.02 of the  827
Revised Code when the context refers to the authority vested in  828
the three-member industrial commission pursuant to division (E)  829
of section 4121.03 of the Revised Code.  830
       (3) "Industrial commission" means the industrial  831
commission as a state agency when the context refers to the  832
authority vested in the industrial commission as a state agency.  833
       Sec. 4123.01. As used in this chapter:  834
Am. S. B. No. 423  Page 30
As Passed by the Senate
       (A)(1) "Employee" means:  835
       (a) Every person in the service of the state, or of any  836
county, municipal corporation, township, or school district  837
therein, including regular members of lawfully constituted  838
police and fire departments of municipal corporations and  839
townships, whether paid or volunteer, and wherever serving  840
within the state or on temporary assignment outside thereof, and  841
executive officers of boards of education, under any appointment  842
or contract of hire, express or implied, oral or written,  843
including any elected official of the state, or of any county,  844
municipal corporation, or township, or members of boards of  845
education.  846
       As used in division (A)(1)(a) of this section, the term  847
"employee" includes the following persons when responding to an  848
inherently dangerous situation that calls for an immediate  849
response on the part of the person, regardless of whether the  850
person is within the limits of the jurisdiction of the person's  851
regular employment or voluntary service when responding, on the  852
condition that the person responds to the situation as the  853
person otherwise would if the person were on duty in the  854
person's jurisdiction:  855
       (i) Off-duty peace officers. As used in division (A)(1)(a)  856
(i) of this section, "peace officer" has the same meaning as in  857
section 2935.01 of the Revised Code.  858
       (ii) Off-duty firefighters, whether paid or volunteer, of  859
a lawfully constituted fire department.  860
       (iii) Off-duty first responders, emergency medical  861
technicians-basic, emergency medical technicians-intermediate,  862
or emergency medical technicians-paramedic, whether paid or  863
Am. S. B. No. 423  Page 31
As Passed by the Senate
volunteer, of an ambulance service organization or emergency  864
medical service organization pursuant to Chapter 4765. of the  865
Revised Code.  866
       (b) Every person in the service of any person, firm, or  867
private corporation, including any public service corporation,  868
that (i) employs one or more persons regularly in the same  869
business or in or about the same establishment under any  870
contract of hire, express or implied, oral or written, including  871
aliens and minors, household workers who earn one hundred sixty  872
dollars or more in cash in any calendar quarter from a single  873
household and casual workers who earn one hundred sixty dollars  874
or more in cash in any calendar quarter from a single employer,  875
or (ii) is bound by any such contract of hire or by any other  876
written contract, to pay into the state insurance fund the  877
premiums provided by this chapter.  878
       (c) Every person who performs labor or provides services  879
pursuant to a construction contract, as defined in section  880
4123.79 of the Revised Code, if at least ten of the following  881
criteria apply:  882
       (i) The person is required to comply with instructions  883
from the other contracting party regarding the manner or method  884
of performing services;  885
       (ii) The person is required by the other contracting party  886
to have particular training;  887
       (iii) The person's services are integrated into the  888
regular functioning of the other contracting party;  889
       (iv) The person is required to perform the work  890
personally;  891
       (v) The person is hired, supervised, or paid by the other  892
Am. S. B. No. 423  Page 32
As Passed by the Senate
contracting party;  893
       (vi) A continuing relationship exists between the person  894
and the other contracting party that contemplates continuing or  895
recurring work even if the work is not full time;  896
       (vii) The person's hours of work are established by the  897
other contracting party;  898
       (viii) The person is required to devote full time to the  899
business of the other contracting party;  900
       (ix) The person is required to perform the work on the  901
premises of the other contracting party;  902
       (x) The person is required to follow the order of work set  903
by the other contracting party;  904
       (xi) The person is required to make oral or written  905
reports of progress to the other contracting party;  906
       (xii) The person is paid for services on a regular basis  907
such as hourly, weekly, or monthly;  908
       (xiii) The person's expenses are paid for by the other  909
contracting party;  910
       (xiv) The person's tools and materials are furnished by  911
the other contracting party;  912
       (xv) The person is provided with the facilities used to  913
perform services;  914
       (xvi) The person does not realize a profit or suffer a  915
loss as a result of the services provided;  916
       (xvii) The person is not performing services for a number  917
of employers at the same time;  918
Am. S. B. No. 423  Page 33
As Passed by the Senate
       (xviii) The person does not make the same services  919
available to the general public;  920
       (xix) The other contracting party has a right to discharge  921
the person;  922
       (xx) The person has the right to end the relationship with  923
the other contracting party without incurring liability pursuant  924
to an employment contract or agreement.  925
       Every person in the service of any independent contractor  926
or subcontractor who has failed to pay into the state insurance  927
fund the amount of premium determined and fixed by the  928
administrator of workers' compensation for the person's  929
employment or occupation or who is a self-insuring employer and  930
who has failed to pay compensation and benefits directly to the  931
employer's injured and to the dependents of the employer's  932
killed employees as required by section 4123.35 of the Revised  933
Code, shall be considered as the employee of the person who has  934
entered into a contract, whether written or verbal, with such  935
independent contractor unless such employees or their legal  936
representatives or beneficiaries elect, after injury or death,  937
to regard such independent contractor as the employer.  938
       (d) Every person who operates a vehicle or vessel in the  939
performance of services for or on behalf of a motor carrier  940
transporting property, unless all of the following factors apply  941
to the person:  942
       (i) The person owns the vehicle or vessel that is used in  943
performing the services for or on behalf of the carrier, or the  944
person leases the vehicle or vessel under a bona fide lease  945
agreement that is not a temporary replacement lease agreement.  946
For purposes of this division, a bona fide lease agreement does  947
Am. S. B. No. 423  Page 34
As Passed by the Senate
not include an agreement between the person and the motor  948
carrier transporting property for which, or on whose behalf, the  949
person provides services.  950
       (ii) The person is responsible for supplying the necessary  951
personal services to operate the vehicle or vessel used to  952
provide the service.  953
       (iii) The compensation paid to the person is based on  954
factors related to work performed, including on a mileage-based  955
rate or a percentage of any schedule of rates, and not solely on  956
the basis of the hours or time expended.  957
       (iv) The person substantially controls the means and  958
manner of performing the services, in conformance with  959
regulatory requirements and specifications of the shipper.  960
       (v) The person enters into a written contract with the  961
carrier for whom the person is performing the services that  962
describes the relationship between the person and the carrier to  963
be that of an independent contractor and not that of an  964
employee.  965
       (vi) The person is responsible for substantially all of  966
the principal operating costs of the vehicle or vessel and  967
equipment used to provide the services, including maintenance,  968
fuel, repairs, supplies, vehicle or vessel insurance, and  969
personal expenses, except that the person may be paid by the  970
carrier the carrier's fuel surcharge and incidental costs,  971
including tolls, permits, and lumper fees.  972
       (vii) The person is responsible for any economic loss or  973
economic gain from the arrangement with the carrier.  974
       (2) "Employee" does not mean any of the following:  975
Am. S. B. No. 423  Page 35
As Passed by the Senate
       (a) A duly ordained, commissioned, or licensed minister or  976
assistant or associate minister of a church in the exercise of  977
ministry;  978
       (b) Any officer of a family farm corporation;  979
       (c) An individual incorporated as a corporation;  980
       (d) An officer of a nonprofit corporation, as defined in  981
section 1702.01 of the Revised Code, who volunteers the person's  982
services as an officer;  983
       (e) An individual who otherwise is an employee of an  984
employer but who signs the waiver and affidavit specified in  985
section 4123.15 of the Revised Code on the condition that the  986
administrator has granted a waiver and exception to the  987
individual's employer under section 4123.15 of the Revised Code;  988
       (f)(i) A qualifying employee described in division (A)(14)  989
(a) of section 5703.94 of the Revised Code when the qualifying  990
employee is performing disaster work in this state during a  991
disaster response period pursuant to a qualifying solicitation  992
received by the employee's employer;  993
       (ii) A qualifying employee described in division (A)(14)  994
(b) of section 5703.94 of the Revised Code when the qualifying  995
employee is performing disaster work in this state during a  996
disaster response period on critical infrastructure owned or  997
used by the employee's employer;  998
       (iii) As used in division (A)(2)(f) of this section,  999
"critical infrastructure," "disaster response period," "disaster  1000
work," and "qualifying employee" have the same meanings as in  1001
section 5703.94 of the Revised Code.  1002
       (g) A health care worker, with respect to a health care  1003
Am. S. B. No. 423  Page 36
As Passed by the Senate
worker platform or health care facility for work booked through  1004
a health care worker platform, in accordance with section  1005
4113.87 of the Revised Code.  1006
       Any employer may elect to include as an "employee" within  1007
this chapter, any person excluded from the definition of  1008
"employee" pursuant to division (A)(1)(d) or (A)(2)(a), (b),  1009
(c), or (e) of this section in accordance with rules adopted by  1010
the administrator, with the advice and consent of the bureau of  1011
workers' compensation board of directors. If an employer is a  1012
partnership, sole proprietorship, individual incorporated as a  1013
corporation, or family farm corporation, such employer may elect  1014
to include as an "employee" within this chapter, any member of  1015
such partnership, the owner of the sole proprietorship, the  1016
individual incorporated as a corporation, or the officers of the  1017
family farm corporation. Nothing in this section shall prohibit  1018
a partner, sole proprietor, or any person excluded from the  1019
definition of "employee" pursuant to division (A)(2)(a), (b),  1020
(c), or (e) of this section from electing to be included as an  1021
"employee" under this chapter in accordance with rules adopted  1022
by the administrator, with the advice and consent of the board.  1023
       In the event of an election, the employer or person  1024
electing coverage shall serve upon the bureau of workers'  1025
compensation written notice naming the person to be covered and  1026
include the person's remuneration for premium purposes in all  1027
future payroll reports. No partner, sole proprietor, or person  1028
excluded from the definition of "employee" pursuant to division  1029
(A)(1)(d) or (A)(2)(a), (b), (c), or (e) of this section, shall  1030
receive benefits or compensation under this chapter until the  1031
bureau receives written notice of the election permitted by this  1032
section.  1033
Am. S. B. No. 423  Page 37
As Passed by the Senate
       For informational purposes only, the bureau shall  1034
prescribe such language as it considers appropriate, on such of  1035
its forms as it considers appropriate, to advise employers of  1036
their right to elect to include as an "employee" within this  1037
chapter a sole proprietor, any member of a partnership, or a  1038
person excluded from the definition of "employee" under division  1039
(A)(1)(d) or (A)(2)(a), (b), (c), or (e) of this section, that  1040
they should check any health and disability insurance policy, or  1041
other form of health and disability plan or contract, presently  1042
covering them, or the purchase of which they may be considering,  1043
to determine whether such policy, plan, or contract excludes  1044
benefits for illness or injury that they might have elected to  1045
have covered by workers' compensation.  1046
       (B)(1) "Employer" means:  1047
       (a) The state, including state hospitals, each county,  1048
municipal corporation, township, school district, and hospital  1049
owned by a political subdivision or subdivisions other than the  1050
state;  1051
       (b) Every person, firm, professional employer  1052
organization, alternate employer organization, and private  1053
corporation, including any public service corporation, that (i)  1054
has in service one or more employees or shared employees  1055
regularly in the same business or in or about the same  1056
establishment under any contract of hire, express or implied,  1057
oral or written, or (ii) is bound by any such contract of hire  1058
or by any other written contract, to pay into the insurance fund  1059
the premiums provided by this chapter.  1060
       All such employers are subject to this chapter. Any member  1061
of a firm or association, who regularly performs manual labor in  1062
or about a mine, factory, or other establishment, including a  1063
Am. S. B. No. 423  Page 38
As Passed by the Senate
household establishment, shall be considered an employee in  1064
determining whether such person, firm, or private corporation,  1065
or public service corporation, has in its service, one or more  1066
employees and the employer shall report the income derived from  1067
such labor to the bureau as part of the payroll of such  1068
employer, and such member shall thereupon be entitled to all the  1069
benefits of an employee.  1070
       (2) "Employer" does not include a franchisor with respect  1071
to the franchisor's relationship with a franchisee or an  1072
employee of a franchisee, unless the franchisor agrees to assume  1073
that role in writing or a court of competent jurisdiction  1074
determines that the franchisor exercises a type or degree of  1075
control over the franchisee or the franchisee's employees that  1076
is not customarily exercised by a franchisor for the purpose of  1077
protecting the franchisor's trademark, brand, or both. For  1078
purposes of this division, "franchisor" and "franchisee" have  1079
the same meanings as in 16 C.F.R. 436.1.  1080
       (C) "Injury" includes any injury, whether caused by  1081
external accidental means or accidental in character and result,  1082
received in the course of, and arising out of, the injured  1083
employee's employment. "Injury" does not include:  1084
       (1) Psychiatric conditions except where the claimant's  1085
psychiatric conditions have arisen from an injury or  1086
occupational disease sustained by that claimant or where the  1087
claimant's psychiatric conditions have arisen from sexual  1088
conduct in which the claimant was forced by threat of physical  1089
harm to engage or participate;  1090
       (2) Injury or disability caused primarily by the natural  1091
deterioration of tissue, an organ, or part of the body;  1092
Am. S. B. No. 423  Page 39
As Passed by the Senate
       (3) Injury or disability incurred in voluntary  1093
participation in an employer-sponsored recreation or fitness  1094
activity if the employee signs a waiver of the employee's right  1095
to compensation or benefits under this chapter prior to engaging  1096
in the recreation or fitness activity;  1097
       (4) Injury or disability sustained by an employee who  1098
performs the employee's duties in a work area that is located  1099
within the employee's home and that is separate and distinct  1100
from the location of the employer, unless all of the following  1101
apply:  1102
       (a) The employee's injury or disability arises out of the  1103
employee's employment.  1104
       (b) The employee's injury or disability was caused by a  1105
special hazard of the employee's employment activity.  1106
       (c) The employee's injury or disability is sustained in  1107
the course of an activity undertaken by the employee for the  1108
exclusive benefit of the employer.  1109
       (5) A condition that pre-existed an injury unless that  1110
pre-existing condition is substantially aggravated by the  1111
injury. Such a substantial aggravation must be documented by  1112
objective diagnostic findings, objective clinical findings, or  1113
objective test results. Subjective complaints may be evidence of  1114
such a substantial aggravation. However, subjective complaints  1115
without objective diagnostic findings, objective clinical  1116
findings, or objective test results are insufficient to  1117
substantiate a substantial aggravation.  1118
       (D) "Child" includes a posthumous child and a child  1119
legally adopted prior to the injury.  1120
       (E) "Family farm corporation" means a corporation founded  1121
Am. S. B. No. 423  Page 40
As Passed by the Senate
for the purpose of farming agricultural land in which the  1122
majority of the voting stock is held by and the majority of the  1123
stockholders are persons or the spouse of persons related to  1124
each other within the fourth degree of kinship, according to the  1125
rules of the civil law, and at least one of the related persons  1126
is residing on or actively operating the farm, and none of whose  1127
stockholders are a corporation. A family farm corporation does  1128
not cease to qualify under this division where, by reason of any  1129
devise, bequest, or the operation of the laws of descent or  1130
distribution, the ownership of shares of voting stock is  1131
transferred to another person, as long as that person is within  1132
the degree of kinship stipulated in this division.  1133
       (F) "Occupational disease" means a disease contracted in  1134
the course of employment, which by its causes and the  1135
characteristics of its manifestation or the condition of the  1136
employment results in a hazard which distinguishes the  1137
employment in character from employment generally, and the  1138
employment creates a risk of contracting the disease in greater  1139
degree and in a different manner from the public in general.  1140
       (G) "Self-insuring employer" means an employer who is  1141
granted the privilege of paying compensation and benefits  1142
directly under section 4123.35 of the Revised Code, including a  1143
board of county commissioners for the sole purpose of  1144
constructing a sports facility as defined in section 307.696 of  1145
the Revised Code, provided that the electors of the county in  1146
which the sports facility is to be built have approved  1147
construction of a sports facility by ballot election no later  1148
than November 6, 1997.  1149
       (H) "Private employer" means an employer as defined in  1150
division (B)(1)(b) of this section.  1151
Am. S. B. No. 423  Page 41
As Passed by the Senate
       (I) "Professional employer organization" has the same  1152
meaning as in section 4125.01 of the Revised Code.  1153
       (J) "Public employer" means an employer as defined in  1154
division (B)(1)(a) of this section.  1155
       (K) "Sexual conduct" means vaginal intercourse between a  1156
male and female; anal intercourse, fellatio, and cunnilingus  1157
between persons regardless of gender; and, without privilege to  1158
do so, the insertion, however slight, of any part of the body or  1159
any instrument, apparatus, or other object into the vaginal or  1160
anal cavity of another. Penetration, however slight, is  1161
sufficient to complete vaginal or anal intercourse.  1162
       (L) "Other-states' insurer" means an insurance company  1163
that is authorized to provide workers' compensation insurance  1164
coverage in any of the states that permit employers to obtain  1165
insurance for workers' compensation claims through insurance  1166
companies.  1167
       (M) "Other-states' coverage" means both of the following:  1168
       (1) Insurance coverage secured by an eligible employer for  1169
workers' compensation claims of employees who are in employment  1170
relationships localized in a state other than this state or  1171
those employees' dependents;  1172
       (2) Insurance coverage secured by an eligible employer for  1173
workers' compensation claims that arise in a state other than  1174
this state where an employer elects to obtain coverage through  1175
either the administrator or an other-states' insurer.  1176
       (N) "Limited other-states coverage" means insurance  1177
coverage provided by the administrator to an eligible employer  1178
for workers' compensation claims of employees who are in an  1179
employment relationship localized in this state but are  1180
Am. S. B. No. 423  Page 42
As Passed by the Senate
temporarily working in a state other than this state, or those  1181
employees' dependents.  1182
       (O) "Motor carrier" has the same meaning as in section  1183
4923.01 of the Revised Code.  1184
       (P) "Alternate employer organization" has the same meaning  1185
as in section 4133.01 of the Revised Code.  1186
       Sec. 4141.01. As used in this chapter, unless the context  1187
otherwise requires:  1188
       (A)(1) "Employer" means any of the following, provided the  1189
individual or entity is subject to this chapter under section  1190
4141.011 of the Revised Code: any state, its instrumentalities,  1191
its political subdivisions and their instrumentalities, Indian  1192
tribes, and any individual or type of organization including any  1193
partnership, limited liability company, association, trust,  1194
estate, joint-stock company, insurance company, or corporation,  1195
whether domestic or foreign, or the receiver, trustee in  1196
bankruptcy, trustee, or the successor thereof, or the legal  1197
representative of a deceased person.  1198
       (2) Each individual employed to perform or to assist in  1199
performing the work of any agent or employee of an employer is  1200
employed by such employer for all the purposes of this chapter,  1201
whether such individual was hired or paid directly by such  1202
employer or by such agent or employee, provided the employer had  1203
actual or constructive knowledge of the work. All individuals  1204
performing services for an employer of any person in this state  1205
who maintains two or more establishments within this state are  1206
employed by a single employer for the purposes of this chapter.  1207
       (B)(1) "Employment" means service performed by an  1208
individual for remuneration under any contract of hire, written  1209
Am. S. B. No. 423  Page 43
As Passed by the Senate
or oral, express or implied, including service performed in  1210
interstate commerce and service performed by an officer of a  1211
corporation, without regard to whether such service is  1212
executive, managerial, or manual in nature, and without regard  1213
to whether such officer is a stockholder or a member of the  1214
board of directors of the corporation, unless it is shown to the  1215
satisfaction of the director that such individual has been and  1216
will continue to be free from direction or control over the  1217
performance of such service, both under a contract of service  1218
and in fact. The director of job and family services shall adopt  1219
rules to define "direction or control."  1220
       (2) "Employment" includes:  1221
       (a) Service performed after December 31, 1977, by an  1222
individual in the employ of the state or any of its  1223
instrumentalities, or any political subdivision thereof or any  1224
of its instrumentalities or any instrumentality of more than one  1225
of the foregoing or any instrumentality of any of the foregoing  1226
and one or more other states or political subdivisions and  1227
without regard to division (A) of section 4141.011 of the  1228
Revised Code, provided that such service is excluded from  1229
employment as defined in the "Federal Unemployment Tax Act," 53  1230
Stat. 183, 26 U.S.C.A. 3301, 3306(c)(7) and is not excluded  1231
under division (B)(3) of this section; or the services of  1232
employees covered by voluntary election, as provided under  1233
divisions (H) and (I) of section 4141.011 of the Revised Code;  1234
       (b) Service performed after December 31, 1971, by an  1235
individual in the employ of a religious, charitable,  1236
educational, or other organization which is excluded from the  1237
term "employment" as defined in the "Federal Unemployment Tax  1238
Act," 84 Stat. 713, 26 U.S.C.A. 3301 to 3311, solely by reason  1239
Am. S. B. No. 423  Page 44
As Passed by the Senate
of section 26 U.S.C.A. 3306(c)(8) of that act and is not  1240
excluded under division (B)(3) of this section;  1241
       (c) Domestic service performed after December 31, 1977,  1242
for an employer, as provided in division (C) of section 4141.011  1243
of the Revised Code;  1244
       (d) Agricultural labor performed after December 31, 1977,  1245
for a farm operator or a crew leader, as provided in division  1246
(D) of section 4141.011 of the Revised Code;  1247
       (e) Subject to division (B)(2)(m) of this section, service  1248
not covered under division (B)(1) of this section which is  1249
performed after December 31, 1971:  1250
       (i) As an agent-driver or commission-driver engaged in  1251
distributing meat products, vegetable products, fruit products,  1252
bakery products, beverages other than milk, laundry, or dry-  1253
cleaning services, for the individual's employer or principal;  1254
       (ii) As a traveling or city salesperson, other than as an  1255
agent-driver or commission-driver, engaged on a full-time basis  1256
in the solicitation on behalf of and in the transmission to the  1257
salesperson's employer or principal except for sideline sales  1258
activities on behalf of some other person of orders from  1259
wholesalers, retailers, contractors, or operators of hotels,  1260
restaurants, or other similar establishments for merchandise for  1261
resale, or supplies for use in their business operations,  1262
provided that for the purposes of division (B)(2)(e)(ii) of this  1263
section, the services shall be deemed employment if the contract  1264
of service contemplates that substantially all of the services  1265
are to be performed personally by the individual and that the  1266
individual does not have a substantial investment in facilities  1267
used in connection with the performance of the services other  1268
Am. S. B. No. 423  Page 45
As Passed by the Senate
than in facilities for transportation, and the services are not  1269
in the nature of a single transaction that is not a part of a  1270
continuing relationship with the person for whom the services  1271
are performed.  1272
       (f) An individual's entire service performed within or  1273
both within and without the state if:  1274
       (i) The service is localized in this state.  1275
       (ii) The service is not localized in any state, but some  1276
of the service is performed in this state and either the base of  1277
operations, or if there is no base of operations then the place  1278
from which such service is directed or controlled, is in this  1279
state or the base of operations or place from which such service  1280
is directed or controlled is not in any state in which some part  1281
of the service is performed but the individual's residence is in  1282
this state.  1283
       (g) Service not covered under division (B)(2)(f)(ii) of  1284
this section and performed entirely without this state, with  1285
respect to no part of which contributions are required and paid  1286
under an unemployment compensation law of any other state, the  1287
Virgin Islands, Canada, or of the United States, if the  1288
individual performing such service is a resident of this state  1289
and the director approves the election of the employer for whom  1290
such services are performed; or, if the individual is not a  1291
resident of this state but the place from which the service is  1292
directed or controlled is in this state, the entire services of  1293
such individual shall be deemed to be employment subject to this  1294
chapter, provided service is deemed to be localized within this  1295
state if the service is performed entirely within this state or  1296
if the service is performed both within and without this state  1297
but the service performed without this state is incidental to  1298
Am. S. B. No. 423  Page 46
As Passed by the Senate
the individual's service within the state, for example, is  1299
temporary or transitory in nature or consists of isolated  1300
transactions;  1301
       (h) Service of an individual who is a citizen of the  1302
United States, performed outside the United States except in  1303
Canada after December 31, 1971, or the Virgin Islands, after  1304
December 31, 1971, and before the first day of January of the  1305
year following that in which the United States secretary of  1306
labor approves the Virgin Islands law for the first time, in the  1307
employ of an American employer, other than service which is  1308
"employment" under divisions (B)(2)(f) and (g) of this section  1309
or similar provisions of another state's law, if:  1310
       (i) The employer's principal place of business in the  1311
United States is located in this state;  1312
       (ii) The employer has no place of business in the United  1313
States, but the employer is an individual who is a resident of  1314
this state; or the employer is a corporation which is organized  1315
under the laws of this state, or the employer is a partnership  1316
or a trust and the number of partners or trustees who are  1317
residents of this state is greater than the number who are  1318
residents of any other state; or  1319
       (iii) None of the criteria of divisions (B)(2)(f)(i) and  1320
(ii) of this section is met but the employer has elected  1321
coverage in this state or the employer having failed to elect  1322
coverage in any state, the individual has filed a claim for  1323
benefits, based on such service, under this chapter.  1324
       (i) For the purposes of division (B)(2)(h) of this  1325
section, the term "American employer" means an employer who is  1326
an individual who is a resident of the United States; or a  1327
Am. S. B. No. 423  Page 47
As Passed by the Senate
partnership, if two-thirds or more of the partners are residents  1328
of the United States; or a trust, if all of the trustees are  1329
residents of the United States; or a corporation organized under  1330
the laws of the United States or of any state, provided the term  1331
"United States" includes the states, the District of Columbia,  1332
the Commonwealth of Puerto Rico, and the Virgin Islands.  1333
       (j) Notwithstanding any other provisions of divisions (B)  1334
(1) and (2) of this section, service, except for domestic  1335
service in a private home not covered under division (C) of  1336
section 4141.011 of the Revised Code, with respect to which a  1337
tax is required to be paid under any federal law imposing a tax  1338
against which credit may be taken for contributions required to  1339
be paid into a state unemployment fund, or service, except for  1340
domestic service in a private home not covered under division  1341
(C) of section 4141.011 of the Revised Code, which, as a  1342
condition for full tax credit against the tax imposed by the  1343
"Federal Unemployment Tax Act," 84 Stat. 713, 26 U.S.C.A. 3301  1344
to 3311, is required to be covered under this chapter.  1345
       (k) Construction services performed by any individual  1346
under a construction contract, as defined in section 4141.39 of  1347
the Revised Code, if the director determines that the employer  1348
for whom services are performed has the right to direct or  1349
control the performance of the services and that the individuals  1350
who perform the services receive remuneration for the services  1351
performed. The director shall presume that the employer for whom  1352
services are performed has the right to direct or control the  1353
performance of the services if ten or more of the following  1354
criteria apply:  1355
       (i) The employer directs or controls the manner or method  1356
by which instructions are given to the individual performing  1357
Am. S. B. No. 423  Page 48
As Passed by the Senate
services;  1358
       (ii) The employer requires particular training for the  1359
individual performing services;  1360
       (iii) Services performed by the individual are integrated  1361
into the regular functioning of the employer;  1362
       (iv) The employer requires that services be provided by a  1363
particular individual;  1364
       (v) The employer hires, supervises, or pays the wages of  1365
the individual performing services;  1366
       (vi) A continuing relationship between the employer and  1367
the individual performing services exists which contemplates  1368
continuing or recurring work, even if not full-time work;  1369
       (vii) The employer requires the individual to perform  1370
services during established hours;  1371
       (viii) The employer requires that the individual  1372
performing services be devoted on a full-time basis to the  1373
business of the employer;  1374
       (ix) The employer requires the individual to perform  1375
services on the employer's premises;  1376
       (x) The employer requires the individual performing  1377
services to follow the order of work established by the  1378
employer;  1379
       (xi) The employer requires the individual performing  1380
services to make oral or written reports of progress;  1381
       (xii) The employer makes payment to the individual for  1382
services on a regular basis, such as hourly, weekly, or monthly;  1383
       (xiii) The employer pays expenses for the individual  1384
Am. S. B. No. 423  Page 49
As Passed by the Senate
performing services;  1385
       (xiv) The employer furnishes the tools and materials for  1386
use by the individual to perform services;  1387
       (xv) The individual performing services has not invested  1388
in the facilities used to perform services;  1389
       (xvi) The individual performing services does not realize  1390
a profit or suffer a loss as a result of the performance of the  1391
services;  1392
       (xvii) The individual performing services is not  1393
performing services for more than two employers simultaneously;  1394
       (xviii) The individual performing services does not make  1395
the services available to the general public;  1396
       (xix) The employer has a right to discharge the individual  1397
performing services;  1398
       (xx) The individual performing services has the right to  1399
end the individual's relationship with the employer without  1400
incurring liability pursuant to an employment contract or  1401
agreement.  1402
       (l) Service performed by an individual in the employ of an  1403
Indian tribe as defined by section 4(e) of the "Indian Self-  1404
Determination and Education Assistance Act," 88 Stat. 2204  1405
(1975), 25 U.S.C.A. 450b(e), including any subdivision,  1406
subsidiary, or business enterprise wholly owned by an Indian  1407
tribe provided that the service is excluded from employment as  1408
defined in the "Federal Unemployment Tax Act," 53 Stat. 183  1409
(1939), 26 U.S.C.A. 3301 and 3306(c)(7) and is not excluded  1410
under division (B)(3) of this section.  1411
       (m) Service performed by an individual for or on behalf of  1412
Am. S. B. No. 423  Page 50
As Passed by the Senate
a motor carrier transporting property as an operator of a  1413
vehicle or vessel, unless all of the following factors apply to  1414
the individual and the motor carrier has not elected to consider  1415
the individual's service as employment:  1416
       (i) The individual owns the vehicle or vessel that is used  1417
in performing the services for or on behalf of the carrier, or  1418
the individual leases the vehicle or vessel under a bona fide  1419
lease agreement that is not a temporary replacement lease  1420
agreement. For purposes of this division, a bona fide lease  1421
agreement does not include an agreement between the individual  1422
and the motor carrier transporting property for which, or on  1423
whose behalf, the individual provides services.  1424
       (ii) The individual is responsible for supplying the  1425
necessary personal services to operate the vehicle or vessel  1426
used to provide the service.  1427
       (iii) The compensation paid to the individual is based on  1428
factors related to work performed, including on a mileage-based  1429
rate or a percentage of any schedule of rates, and not solely on  1430
the basis of the hours or time expended.  1431
       (iv) The individual substantially controls the means and  1432
manner of performing the services, in conformance with  1433
regulatory requirements and specifications of the shipper.  1434
       (v) The individual enters into a written contract with the  1435
carrier for whom the individual is performing the services that  1436
describes the relationship between the individual and the  1437
carrier to be that of an independent contractor and not that of  1438
an employee.  1439
       (vi) The individual is responsible for substantially all  1440
of the principal operating costs of the vehicle or vessel and  1441
Am. S. B. No. 423  Page 51
As Passed by the Senate
equipment used to provide the services, including maintenance,  1442
fuel, repairs, supplies, vehicle or vessel insurance, and  1443
personal expenses, except that the individual may be paid by the  1444
carrier the carrier's fuel surcharge and incidental costs,  1445
including tolls, permits, and lumper fees.  1446
       (vii) The individual is responsible for any economic loss  1447
or economic gain from the arrangement with the carrier.  1448
       (viii) The individual is not performing services described  1449
in 26 U.S.C. 3306(c)(7) or (8).  1450
       (3) "Employment" does not include the following services  1451
if they are found not subject to the "Federal Unemployment Tax  1452
Act," 84 Stat. 713 (1970), 26 U.S.C.A. 3301 to 3311, and if the  1453
services are not required to be included under division (B)(2)  1454
(j) of this section:  1455
       (a) Service performed after December 31, 1977, in  1456
agricultural labor, except as provided in division (D) of  1457
section 4141.011 of the Revised Code;  1458
       (b) Domestic service performed after December 31, 1977, in  1459
a private home, local college club, or local chapter of a  1460
college fraternity or sorority except as provided in division  1461
(C) of section 4141.011 of the Revised Code;  1462
       (c) Service performed after December 31, 1977, for this  1463
state or a political subdivision as described in division (B)(2)  1464
(a) of this section when performed:  1465
       (i) As a publicly elected official;  1466
       (ii) As a member of a legislative body, or a member of the  1467
judiciary;  1468
       (iii) As a military member of the Ohio national guard;  1469
Am. S. B. No. 423  Page 52
As Passed by the Senate
        (iv) As an employee, not in the classified service as  1470
defined in section 124.11 of the Revised Code, serving on a  1471
temporary basis in case of fire, storm, snow, earthquake, flood,  1472
or similar emergency;  1473
        (v) In a position which, under or pursuant to law, is  1474
designated as a major nontenured policymaking or advisory  1475
position, not in the classified service of the state, or a  1476
policymaking or advisory position the performance of the duties  1477
of which ordinarily does not require more than eight hours per  1478
week.  1479
        (d) In the employ of any governmental unit or  1480
instrumentality of the United States;  1481
        (e) Service performed after December 31, 1971:  1482
        (i) Service in the employ of an educational institution or  1483
institution of higher education, including those operated by the  1484
state or a political subdivision, if such service is performed  1485
by a student who is enrolled and is regularly attending classes  1486
at the educational institution or institution of higher  1487
education; or  1488
        (ii) By an individual who is enrolled at a nonprofit or  1489
public educational institution which normally maintains a  1490
regular faculty and curriculum and normally has a regularly  1491
organized body of students in attendance at the place where its  1492
educational activities are carried on as a student in a full-  1493
time program, taken for credit at the institution, which  1494
combines academic instruction with work experience, if the  1495
service is an integral part of the program, and the institution  1496
has so certified to the employer, provided that this subdivision  1497
shall not apply to service performed in a program established  1498
Am. S. B. No. 423  Page 53
As Passed by the Senate
for or on behalf of an employer or group of employers.  1499
       (f) Service performed by an individual in the employ of  1500
the individual's son, daughter, or spouse and service performed  1501
by a child under the age of eighteen in the employ of the  1502
child's father or mother;  1503
       (g) Service performed for one or more principals by an  1504
individual who is compensated on a commission basis, who in the  1505
performance of the work is master of the individual's own time  1506
and efforts, and whose remuneration is wholly dependent on the  1507
amount of effort the individual chooses to expend, and which  1508
service is not subject to the "Federal Unemployment Tax Act," 53  1509
Stat. 183 (1939), 26 U.S.C.A. 3301 to 3311. Service performed  1510
after December 31, 1971:  1511
       (i) By an individual for an employer as an insurance agent  1512
or as an insurance solicitor, if all this service is performed  1513
for remuneration solely by way of commission;  1514
       (ii) As a home worker performing work, according to  1515
specifications furnished by the employer for whom the services  1516
are performed, on materials or goods furnished by such employer  1517
which are required to be returned to the employer or to a person  1518
designated for that purpose.  1519
       (h) Service performed after December 31, 1971:  1520
       (i) In the employ of a church or convention or association  1521
of churches, or in an organization which is operated primarily  1522
for religious purposes and which is operated, supervised,  1523
controlled, or principally supported by a church or convention  1524
or association of churches;  1525
       (ii) By a duly ordained, commissioned, or licensed  1526
minister of a church in the exercise of the individual's  1527
Am. S. B. No. 423  Page 54
As Passed by the Senate
ministry or by a member of a religious order in the exercise of  1528
duties required by such order; or  1529
       (iii) In a facility conducted for the purpose of carrying  1530
out a program of rehabilitation for individuals whose earning  1531
capacity is impaired by age or physical or mental disability or  1532
injury, or providing remunerative work for individuals who  1533
because of their impaired physical or mental capacity cannot be  1534
readily absorbed in the competitive labor market, by an  1535
individual receiving such rehabilitation or remunerative work.  1536
       (i) Service performed after June 30, 1939, with respect to  1537
which unemployment compensation is payable under the "Railroad  1538
Unemployment Insurance Act," 52 Stat. 1094 (1938), 45 U.S.C.  1539
351;  1540
       (j) Service performed by an individual in the employ of  1541
any organization exempt from income tax under section 501 of the  1542
"Internal Revenue Code of 1954," if the remuneration for such  1543
service does not exceed fifty dollars in any calendar quarter,  1544
or if such service is in connection with the collection of dues  1545
or premiums for a fraternal beneficial society, order, or  1546
association and is performed away from the home office or is  1547
ritualistic service in connection with any such society, order,  1548
or association;  1549
       (k) Casual labor not in the course of an employer's trade  1550
or business; incidental service performed by an officer,  1551
appraiser, or member of a finance committee of a bank, building  1552
and loan association, savings and loan association, or savings  1553
association when the remuneration for such incidental service  1554
exclusive of the amount paid or allotted for directors' fees  1555
does not exceed sixty dollars per calendar quarter is casual  1556
labor;  1557
Am. S. B. No. 423  Page 55
As Passed by the Senate
       (l) Service performed in the employ of a voluntary  1558
employees' beneficial association providing for the payment of  1559
life, sickness, accident, or other benefits to the members of  1560
such association or their dependents or their designated  1561
beneficiaries, if admission to a membership in such association  1562
is limited to individuals who are officers or employees of a  1563
municipal or public corporation, of a political subdivision of  1564
the state, or of the United States and no part of the net  1565
earnings of such association inures, other than through such  1566
payments, to the benefit of any private shareholder or  1567
individual;  1568
       (m) Service performed by an individual in the employ of a  1569
foreign government, including service as a consular or other  1570
officer or employee or of a nondiplomatic representative;  1571
       (n) Service performed in the employ of an instrumentality  1572
wholly owned by a foreign government if the service is of a  1573
character similar to that performed in foreign countries by  1574
employees of the United States or of an instrumentality thereof  1575
and if the director finds that the secretary of state of the  1576
United States has certified to the secretary of the treasury of  1577
the United States that the foreign government, with respect to  1578
whose instrumentality exemption is claimed, grants an equivalent  1579
exemption with respect to similar service performed in the  1580
foreign country by employees of the United States and of  1581
instrumentalities thereof;  1582
       (o) Service with respect to which unemployment  1583
compensation is payable under an unemployment compensation  1584
system established by an act of congress;  1585
       (p) Service performed as a student nurse in the employ of  1586
a hospital or a nurses' training school by an individual who is  1587
Am. S. B. No. 423  Page 56
As Passed by the Senate
enrolled and is regularly attending classes in a nurses'  1588
training school chartered or approved pursuant to state law, and  1589
service performed as an intern in the employ of a hospital by an  1590
individual who has completed a four years' course in a medical  1591
school chartered or approved pursuant to state law;  1592
       (q) Service performed by an individual under the age of  1593
eighteen in the delivery or distribution of newspapers or  1594
shopping news, not including delivery or distribution to any  1595
point for subsequent delivery or distribution;  1596
       (r) Service performed in the employ of the United States  1597
or an instrumentality of the United States immune under the  1598
Constitution of the United States from the contributions imposed  1599
by this chapter, except that to the extent that congress permits  1600
states to require any instrumentalities of the United States to  1601
make payments into an unemployment fund under a state  1602
unemployment compensation act, this chapter shall be applicable  1603
to such instrumentalities and to services performed for such  1604
instrumentalities in the same manner, to the same extent, and on  1605
the same terms as to all other employers, individuals, and  1606
services, provided that if this state is not certified for any  1607
year by the proper agency of the United States under section  1608
3304 of the "Internal Revenue Code of 1954," the payments  1609
required of such instrumentalities with respect to such year  1610
shall be refunded by the director from the fund in the same  1611
manner and within the same period as is provided in division (E)  1612
of section 4141.09 of the Revised Code with respect to  1613
contributions erroneously collected;  1614
       (s) Service performed by an individual as a member of a  1615
band or orchestra, provided such service does not represent the  1616
principal occupation of such individual, and which service is  1617
Am. S. B. No. 423  Page 57
As Passed by the Senate
not subject to or required to be covered for full tax credit  1618
against the tax imposed by the "Federal Unemployment Tax Act,"  1619
53 Stat. 183 (1939), 26 U.S.C.A. 3301 to 3311.  1620
        (t) Service performed in the employ of a day camp whose  1621
camping season does not exceed twelve weeks in any calendar  1622
year, and which service is not subject to the "Federal  1623
Unemployment Tax Act," 53 Stat. 183 (1939), 26 U.S.C.A. 3301 to  1624
3311. Service performed after December 31, 1971:  1625
        (i) In the employ of a hospital, if the service is  1626
performed by a patient of the hospital, as defined in division  1627
(W) of this section;  1628
        (ii) For a prison or other correctional institution by an  1629
inmate of the prison or correctional institution;  1630
        (iii) Service performed after December 31, 1977, by an  1631
inmate of a custodial institution operated by the state, a  1632
political subdivision, or a nonprofit organization.  1633
        (u) Service that is performed by a nonresident alien  1634
individual for the period the individual temporarily is present  1635
in the United States as a nonimmigrant under division (F), (J),  1636
(M), or (Q) of section 101(a)(15) of the "Immigration and  1637
Nationality Act," 66 Stat. 163, 8 U.S.C.A. 1101, as amended,  1638
that is excluded under section 3306(c)(19) of the "Federal  1639
Unemployment Tax Act," 53 Stat. 183 (1939), 26 U.S.C.A. 3301 to  1640
3311.  1641
        (v) Notwithstanding any other provisions of division (B)  1642
(3) of this section, services that are excluded under divisions  1643
(B)(3)(g), (j), (k), and (l) of this section shall not be  1644
excluded from employment when performed for a nonprofit  1645
organization, as defined in division (X) of this section, or for  1646
Am. S. B. No. 423  Page 58
As Passed by the Senate
this state or its instrumentalities, or for a political  1647
subdivision or its instrumentalities or for Indian tribes;  1648
       (w) Service that is performed by an individual working as  1649
an election official or election worker if the amount of  1650
remuneration received by the individual during the calendar year  1651
for services as an election official or election worker is less  1652
than one thousand dollars;  1653
       (x) Service performed for an elementary or secondary  1654
school that is operated primarily for religious purposes, that  1655
is described in subsection 501(c)(3) and exempt from federal  1656
income taxation under subsection 501(a) of the Internal Revenue  1657
Code, 26 U.S.C.A. 501;  1658
       (y) Service performed by a person committed to a penal  1659
institution.  1660
       (z) Service performed for an Indian tribe as described in  1661
division (B)(2)(l) of this section when performed in any of the  1662
following manners:  1663
       (i) As a publicly elected official;  1664
       (ii) As a member of an Indian tribal council;  1665
       (iii) As a member of a legislative or judiciary body;  1666
       (iv) In a position which, pursuant to Indian tribal law,  1667
is designated as a major nontenured policymaking or advisory  1668
position, or a policymaking or advisory position where the  1669
performance of the duties ordinarily does not require more than  1670
eight hours of time per week;  1671
       (v) As an employee serving on a temporary basis in the  1672
case of a fire, storm, snow, earthquake, flood, or similar  1673
emergency.  1674
Am. S. B. No. 423  Page 59
As Passed by the Senate
       (aa) Service performed after December 31, 1971, for a  1675
nonprofit organization, this state or its instrumentalities, a  1676
political subdivision or its instrumentalities, or an Indian  1677
tribe as part of an unemployment work-relief or work-training  1678
program assisted or financed in whole or in part by any federal  1679
agency or an agency of a state or political subdivision,  1680
thereof, by an individual receiving the work-relief or work-  1681
training.  1682
       (bb) Participation in a learn to earn program as defined  1683
in section 4141.293 of the Revised Code.  1684
       (4) If the services performed during one half or more of  1685
any pay period by an employee for the person employing that  1686
employee constitute employment, all the services of such  1687
employee for such period shall be deemed to be employment; but  1688
if the services performed during more than one half of any such  1689
pay period by an employee for the person employing that employee  1690
do not constitute employment, then none of the services of such  1691
employee for such period shall be deemed to be employment. As  1692
used in division (B)(4) of this section, "pay period" means a  1693
period, of not more than thirty-one consecutive days, for which  1694
payment of remuneration is ordinarily made to the employee by  1695
the person employing that employee. Division (B)(4) of this  1696
section does not apply to services performed in a pay period by  1697
an employee for the person employing that employee, if any of  1698
such service is excepted by division (B)(3)(o) of this section.  1699
       (5) "Employment" does not include service performed by a  1700
health care worker, with respect to a health care worker  1701
platform or health care facility for work booked through a  1702
health care worker platform, in accordance with section 4113.87  1703
of the Revised Code.  1704
Am. S. B. No. 423  Page 60
As Passed by the Senate
       (C) "Benefits" means money payments payable to an  1705
individual who has established benefit rights, as provided in  1706
this chapter, for loss of remuneration due to the individual's  1707
unemployment.  1708
       (D) "Benefit rights" means the weekly benefit amount and  1709
the maximum benefit amount that may become payable to an  1710
individual within the individual's benefit year as determined by  1711
the director.  1712
       (E) "Claim for benefits" means a claim for waiting period  1713
or benefits for a designated week.  1714
       (F) "Additional claim" means the first claim for benefits  1715
filed following any separation from employment during a benefit  1716
year; "continued claim" means any claim other than the first  1717
claim for benefits and other than an additional claim.  1718
       (G) "Wages" means remuneration paid to an employee by each  1719
of the employee's employers with respect to employment; except  1720
that wages shall not include that part of remuneration paid  1721
during any calendar year to an individual by an employer or such  1722
employer's predecessor in interest in the same business or  1723
enterprise, which in any calendar year is in excess of nine  1724
thousand dollars on and after January 1, 1995; nine thousand  1725
five hundred dollars on and after January 1, 2018; and nine  1726
thousand dollars on and after January 1, 2020. Remuneration in  1727
excess of such amounts shall be deemed wages subject to  1728
contribution to the same extent that such remuneration is  1729
defined as wages under the "Federal Unemployment Tax Act," 84  1730
Stat. 714 (1970), 26 U.S.C.A. 3301 to 3311, as amended. The  1731
remuneration paid an employee by an employer with respect to  1732
employment in another state, upon which contributions were  1733
required and paid by such employer under the unemployment  1734
Am. S. B. No. 423  Page 61
As Passed by the Senate
compensation act of such other state, shall be included as a  1735
part of remuneration in computing the amount specified in this  1736
division.  1737
       (H)(1) "Remuneration" means all compensation for personal  1738
services, including commissions and bonuses and the cash value  1739
of all compensation in any medium other than cash, except that  1740
in the case of agricultural or domestic service, "remuneration"  1741
includes only cash remuneration. Gratuities customarily received  1742
by an individual in the course of the individual's employment  1743
from persons other than the individual's employer and which are  1744
accounted for by such individual to the individual's employer  1745
are taxable wages.  1746
       The reasonable cash value of compensation paid in any  1747
medium other than cash shall be estimated and determined in  1748
accordance with rules prescribed by the director, provided that  1749
"remuneration" does not include:  1750
       (a) Payments as provided in divisions (b)(2) to (b)(20) of  1751
section 3306 of the "Federal Unemployment Tax Act," 84 Stat.  1752
713, 26 U.S.C.A. 3301 to 3311, as amended;  1753
       (b) The payment by an employer, without deduction from the  1754
remuneration of the individual in the employer's employ, of the  1755
tax imposed upon an individual in the employer's employ under  1756
section 3101 of the "Internal Revenue Code of 1954," with  1757
respect to services performed after October 1, 1941.  1758
       (2) "Cash remuneration" means all remuneration paid in  1759
cash, including commissions and bonuses, but not including the  1760
cash value of all compensation in any medium other than cash.  1761
       (I) "Interested party" means the director and any party to  1762
whom notice of a determination of an application for benefit  1763
Am. S. B. No. 423  Page 62
As Passed by the Senate
rights or a claim for benefits is required to be given under  1764
section 4141.28 of the Revised Code.  1765
        (J) "Annual payroll" means the total amount of wages  1766
subject to contributions during a twelve-month period ending  1767
with the last day of the second calendar quarter of any calendar  1768
year.  1769
        (K) "Average annual payroll" means the average of the last  1770
three annual payrolls of an employer, provided that if, as of  1771
any computation date, the employer has had less than three  1772
annual payrolls in such three-year period, such average shall be  1773
based on the annual payrolls which the employer has had as of  1774
such date.  1775
        (L)(1) "Contributions" means the money payments to the  1776
state unemployment compensation fund required of employers by  1777
section 4141.25 of the Revised Code and of the state and any of  1778
its political subdivisions electing to pay contributions under  1779
section 4141.242 of the Revised Code. Employers paying  1780
contributions shall be described as "contributory employers."  1781
        (2) "Payments in lieu of contributions" means the money  1782
payments to the state unemployment compensation fund required of  1783
reimbursing employers under sections 4141.241 and 4141.242 of  1784
the Revised Code.  1785
        (M) An individual is "totally unemployed" in any week  1786
during which the individual performs no services and with  1787
respect to such week no remuneration is payable to the  1788
individual.  1789
        (N) An individual is "partially unemployed" in any week  1790
if, due to involuntary loss of work, the total remuneration  1791
payable to the individual for such week is less than the  1792
Am. S. B. No. 423  Page 63
As Passed by the Senate
individual's weekly benefit amount.  1793
       (O) "Week" means the calendar week ending at midnight  1794
Saturday unless an equivalent week of seven consecutive calendar  1795
days is prescribed by the director.  1796
       (1) "Qualifying week" means any calendar week in an  1797
individual's base period with respect to which the individual  1798
earns or is paid remuneration in employment subject to this  1799
chapter. A calendar week with respect to which an individual  1800
earns remuneration but for which payment was not made within the  1801
base period, when necessary to qualify for benefit rights, may  1802
be considered to be a qualifying week. The number of qualifying  1803
weeks which may be established in a calendar quarter shall not  1804
exceed the number of calendar weeks in the quarter.  1805
       (2) "Average weekly wage" means the amount obtained by  1806
dividing an individual's total remuneration for all qualifying  1807
weeks during the base period by the number of such qualifying  1808
weeks, provided that if the computation results in an amount  1809
that is not a multiple of one dollar, such amount shall be  1810
rounded to the next lower multiple of one dollar.  1811
       (P) "Weekly benefit amount" means the amount of benefits  1812
an individual would be entitled to receive for one week of total  1813
unemployment.  1814
       (Q)(1) "Base period" means the first four of the last five  1815
completed calendar quarters immediately preceding the first day  1816
of an individual's benefit year, except as provided in division  1817
(Q)(2) of this section.  1818
       (2) If an individual does not have sufficient qualifying  1819
weeks and wages in the base period to qualify for benefit  1820
rights, the individual's base period shall be the four most  1821
Am. S. B. No. 423  Page 64
As Passed by the Senate
recently completed calendar quarters preceding the first day of  1822
the individual's benefit year. Such base period shall be known  1823
as the "alternate base period." If information as to weeks and  1824
wages for the most recent quarter of the alternate base period  1825
is not available to the director from the regular quarterly  1826
reports of wage information, which are systematically  1827
accessible, the director may, consistent with the provisions of  1828
section 4141.28 of the Revised Code, base the determination of  1829
eligibility for benefits on the affidavit of the claimant with  1830
respect to weeks and wages for that calendar quarter. The  1831
claimant shall furnish payroll documentation, where available,  1832
in support of the affidavit. The determination based upon the  1833
alternate base period as it relates to the claimant's benefit  1834
rights, shall be amended when the quarterly report of wage  1835
information from the employer is timely received and that  1836
information causes a change in the determination. As provided in  1837
division (B) of section 4141.28 of the Revised Code, any  1838
benefits paid and charged to an employer's account, based upon a  1839
claimant's affidavit, shall be adjusted effective as of the  1840
beginning of the claimant's benefit year. No calendar quarter in  1841
a base period or alternate base period shall be used to  1842
establish a subsequent benefit year.  1843
       (3) The "base period" of a combined wage claim, as  1844
described in division (H) of section 4141.43 of the Revised  1845
Code, shall be the base period prescribed by the law of the  1846
state in which the claim is allowed.  1847
       (4) For purposes of determining the weeks that comprise a  1848
completed calendar quarter under this division, only those weeks  1849
ending at midnight Saturday within the calendar quarter shall be  1850
utilized.  1851
Am. S. B. No. 423  Page 65
As Passed by the Senate
       (R)(1) "Benefit year" with respect to an individual means  1852
the fifty-two week period beginning with the first day of that  1853
week with respect to which the individual first files a valid  1854
application for determination of benefit rights, and thereafter  1855
the fifty-two week period beginning with the first day of that  1856
week with respect to which the individual next files a valid  1857
application for determination of benefit rights after the  1858
termination of the individual's last preceding benefit year,  1859
except that the application shall not be considered valid unless  1860
the individual has had employment in six weeks that is subject  1861
to this chapter or the unemployment compensation act of another  1862
state, or the United States, and has, since the beginning of the  1863
individual's previous benefit year, in the employment earned  1864
three times the average weekly wage determined for the previous  1865
benefit year. The "benefit year" of a combined wage claim, as  1866
described in division (H) of section 4141.43 of the Revised  1867
Code, shall be the benefit year prescribed by the law of the  1868
state in which the claim is allowed. Any application for  1869
determination of benefit rights made in accordance with section  1870
4141.28 of the Revised Code is valid if the individual filing  1871
such application is unemployed, has been employed by an employer  1872
or employers subject to this chapter in at least twenty  1873
qualifying weeks within the individual's base period, and has  1874
earned or been paid remuneration at an average weekly wage of  1875
not less than twenty-seven and one-half per cent of the  1876
statewide average weekly wage for such weeks. For purposes of  1877
determining whether an individual has had sufficient employment  1878
since the beginning of the individual's previous benefit year to  1879
file a valid application, "employment" means the performance of  1880
services for which remuneration is payable.  1881
       (2) Effective for benefit years beginning on and after  1882
Am. S. B. No. 423  Page 66
As Passed by the Senate
December 26, 2004, but before July 1, 2022, any application for  1883
determination of benefit rights made in accordance with section  1884
4141.28 of the Revised Code is valid if the individual satisfies  1885
the criteria described in division (R)(1) of this section, and  1886
if the reason for the individual's separation from employment is  1887
not disqualifying pursuant to division (D)(2) of section 4141.29  1888
or section 4141.291 of the Revised Code. A disqualification  1889
imposed pursuant to division (D)(2) of section 4141.29 or  1890
section 4141.291 of the Revised Code must be removed as provided  1891
in those sections as a requirement of establishing a valid  1892
application for benefit years beginning on and after December  1893
26, 2004, but before July 1, 2022. Effective for benefit years  1894
beginning on and after July 1, 2022, any application for  1895
determination of benefit rights made in accordance with section  1896
4141.28 of the Revised Code is valid if the individual satisfies  1897
the criteria described in division (R)(1) of this section. A  1898
disqualification imposed pursuant to division (D)(2) of section  1899
4141.29 or section 4141.291 of the Revised Code does not affect  1900
the validity of an application.  1901
       (3) The statewide average weekly wage shall be calculated  1902
by the director once a year based on the twelve-month period  1903
ending the thirtieth day of June, as set forth in division (B)  1904
(3) of section 4141.30 of the Revised Code, rounded down to the  1905
nearest dollar. Increases or decreases in the amount of  1906
remuneration required to have been earned or paid in order for  1907
individuals to have filed valid applications shall become  1908
effective on Sunday of the calendar week in which the first day  1909
of January occurs that follows the twelve-month period ending  1910
the thirtieth day of June upon which the calculation of the  1911
statewide average weekly wage was based.  1912
       (4) As used in this division, an individual is  1913
Am. S. B. No. 423  Page 67
As Passed by the Senate
"unemployed" if, with respect to the calendar week in which such  1914
application is filed, the individual is "partially unemployed"  1915
or "totally unemployed" as defined in this section or if, prior  1916
to filing the application, the individual was separated from the  1917
individual's most recent work for any reason which terminated  1918
the individual's employee-employer relationship, or was laid off  1919
indefinitely or for a definite period of seven or more days.  1920
       (S) "Calendar quarter" means the period of three  1921
consecutive calendar months ending on the thirty-first day of  1922
March, the thirtieth day of June, the thirtieth day of  1923
September, and the thirty-first day of December, or the  1924
equivalent thereof as the director prescribes by rule.  1925
       (T) "Computation date" means the first day of the third  1926
calendar quarter of any calendar year.  1927
       (U) "Contribution period" means the calendar year  1928
beginning on the first day of January of any year.  1929
       (V) "Agricultural labor," for the purpose of this  1930
division, means any service performed prior to January 1, 1972,  1931
which was agricultural labor as defined in this division prior  1932
to that date, and service performed after December 31, 1971:  1933
       (1) On a farm, in the employ of any person, in connection  1934
with cultivating the soil, or in connection with raising or  1935
harvesting any agricultural or horticultural commodity,  1936
including the raising, shearing, feeding, caring for, training,  1937
and management of livestock, bees, poultry, and fur-bearing  1938
animals and wildlife;  1939
       (2) In the employ of the owner or tenant or other operator  1940
of a farm in connection with the operation, management,  1941
conservation, improvement, or maintenance of such farm and its  1942
Am. S. B. No. 423  Page 68
As Passed by the Senate
tools and equipment, or in salvaging timber or clearing land of  1943
brush and other debris left by hurricane, if the major part of  1944
such service is performed on a farm;  1945
       (3) In connection with the production or harvesting of any  1946
commodity defined as an agricultural commodity in section 15 (g)  1947
of the "Agricultural Marketing Act," 46 Stat. 1550 (1931), 12  1948
U.S.C. 1141j, as amended, or in connection with the ginning of  1949
cotton, or in connection with the operation or maintenance of  1950
ditches, canals, reservoirs, or waterways, not owned or operated  1951
for profit, used exclusively for supplying and storing water for  1952
farming purposes;  1953
       (4) In the employ of the operator of a farm in handling,  1954
planting, drying, packing, packaging, processing, freezing,  1955
grading, storing, or delivering to storage or to market or to a  1956
carrier for transportation to market, in its unmanufactured  1957
state, any agricultural or horticultural commodity, but only if  1958
the operator produced more than one half of the commodity with  1959
respect to which such service is performed;  1960
       (5) In the employ of a group of operators of farms, or a  1961
cooperative organization of which the operators are members, in  1962
the performance of service described in division (V)(4) of this  1963
section, but only if the operators produced more than one-half  1964
of the commodity with respect to which the service is performed;  1965
       (6) Divisions (V)(4) and (5) of this section shall not be  1966
deemed to be applicable with respect to service performed:  1967
       (a) In connection with commercial canning or commercial  1968
freezing or in connection with any agricultural or horticultural  1969
commodity after its delivery to a terminal market for  1970
distribution for consumption; or  1971
Am. S. B. No. 423  Page 69
As Passed by the Senate
       (b) On a farm operated for profit if the service is not in  1972
the course of the employer's trade or business.  1973
       As used in division (V) of this section, "farm" includes  1974
stock, dairy, poultry, fruit, fur-bearing animal, and truck  1975
farms, plantations, ranches, nurseries, ranges, greenhouses, or  1976
other similar structures used primarily for the raising of  1977
agricultural or horticultural commodities and orchards.  1978
       (W) "Hospital" means an institution which has been  1979
registered or licensed by the Ohio department of health as a  1980
hospital.  1981
       (X) "Nonprofit organization" means an organization, or  1982
group of organizations, described in section 501(c)(3) of the  1983
"Internal Revenue Code of 1954," and exempt from income tax  1984
under section 501(a) of that code.  1985
       (Y) "Institution of higher education" means a public or  1986
nonprofit educational institution, including an educational  1987
institution operated by an Indian tribe, which:  1988
       (1) Admits as regular students only individuals having a  1989
certificate of graduation from a high school, or the recognized  1990
equivalent;  1991
       (2) Is legally authorized in this state or by the Indian  1992
tribe to provide a program of education beyond high school; and  1993
       (3) Provides an educational program for which it awards a  1994
bachelor's or higher degree, or provides a program which is  1995
acceptable for full credit toward such a degree, a program of  1996
post-graduate or post-doctoral studies, or a program of training  1997
to prepare students for gainful employment in a recognized  1998
occupation.  1999
Am. S. B. No. 423  Page 70
As Passed by the Senate
       For the purposes of this division, all colleges and  2000
universities in this state are institutions of higher education.  2001
       (Z) For the purposes of this chapter, "states" includes  2002
the District of Columbia, the Commonwealth of Puerto Rico, and  2003
the Virgin Islands.  2004
       (AA) "Alien" means, for the purposes of division (D) of  2005
section 4141.011 of the Revised Code, an individual who is an  2006
alien admitted to the United States to perform service in  2007
agricultural labor pursuant to sections 214 (c) and 101 (a)(15)  2008
(H) of the "Immigration and Nationality Act," 66 Stat. 163, 8  2009
U.S.C.A. 1101.  2010
       (BB)(1) "Crew leader" means an individual who furnishes  2011
individuals to perform agricultural labor for any other employer  2012
or farm operator, and:  2013
       (a) Pays, either on the individual's own behalf or on  2014
behalf of the other employer or farm operator, the individuals  2015
so furnished by the individual for the service in agricultural  2016
labor performed by them;  2017
       (b) Has not entered into a written agreement with the  2018
other employer or farm operator under which the agricultural  2019
worker is designated as in the employ of the other employer or  2020
farm operator.  2021
       (2) For the purposes of this chapter, any individual who  2022
is a member of a crew furnished by a crew leader to perform  2023
service in agricultural labor for any other employer or farm  2024
operator shall be treated as an employee of the crew leader if:  2025
       (a) The crew leader holds a valid certificate of  2026
registration under the "Farm Labor Contractor Registration Act  2027
of 1963," 90 Stat. 2668, 7 U.S.C. 2041; or  2028
Am. S. B. No. 423  Page 71
As Passed by the Senate
       (b) Substantially all the members of the crew operate or  2029
maintain tractors, mechanized harvesting or crop-dusting  2030
equipment, or any other mechanized equipment, which is provided  2031
by the crew leader; and  2032
       (c) If the individual is not in the employment of the  2033
other employer or farm operator within the meaning of division  2034
(B)(1) of this section.  2035
       (3) For the purposes of this division, any individual who  2036
is furnished by a crew leader to perform service in agricultural  2037
labor for any other employer or farm operator and who is not  2038
treated as in the employment of the crew leader under division  2039
(BB)(2) of this section shall be treated as the employee of the  2040
other employer or farm operator and not of the crew leader. The  2041
other employer or farm operator shall be treated as having paid  2042
cash remuneration to the individual in an amount equal to the  2043
amount of cash remuneration paid to the individual by the crew  2044
leader, either on the crew leader's own behalf or on behalf of  2045
the other employer or farm operator, for the service in  2046
agricultural labor performed for the other employer or farm  2047
operator.  2048
       (CC) "Educational institution" means an institution other  2049
than an institution of higher education as defined in division  2050
(Y) of this section, including an educational institution  2051
operated by an Indian tribe, which:  2052
       (1) Offers participants, trainees, or students an  2053
organized course of study or training designed to transfer to  2054
them knowledge, skills, information, doctrines, attitudes, or  2055
abilities from, by, or under the guidance of an instructor or  2056
teacher; and  2057
Am. S. B. No. 423  Page 72
As Passed by the Senate
       (2) Is approved, chartered, or issued a permit to operate  2058
as a school by the director of education and workforce, other  2059
government agency, or Indian tribe that is authorized within the  2060
state to approve, charter, or issue a permit for the operation  2061
of a school.  2062
       For the purposes of this division, the courses of study or  2063
training which the institution offers may be academic,  2064
technical, trade, or preparation for gainful employment in a  2065
recognized occupation.  2066
       (DD) "Cost savings day" means any unpaid day off from work  2067
in which employees continue to accrue employee benefits which  2068
have a determinable value including, but not limited to,  2069
vacation, pension contribution, sick time, and life and health  2070
insurance.  2071
       (EE) "Motor carrier" has the same meaning as in section  2072
4923.01 of the Revised Code.  2073
       Sec. 5747.01. Except as otherwise expressly provided or  2074
clearly appearing from the context, any term used in this  2075
chapter that is not otherwise defined in this section has the  2076
same meaning as when used in a comparable context in the laws of  2077
the United States relating to federal income taxes or if not  2078
used in a comparable context in those laws, has the same meaning  2079
as in section 5733.40 of the Revised Code. Any reference in this  2080
chapter to the Internal Revenue Code includes other laws of the  2081
United States relating to federal income taxes.  2082
       As used in this chapter:  2083
       (A) "Adjusted gross income" or "Ohio adjusted gross  2084
income" means federal adjusted gross income, as defined and used  2085
in the Internal Revenue Code, adjusted as provided in this  2086
Am. S. B. No. 423  Page 73
As Passed by the Senate
section:  2087
       (1) Add interest or dividends on obligations or securities  2088
of any state or of any political subdivision or authority of any  2089
state, other than this state and its subdivisions and  2090
authorities.  2091
       (2) Add interest or dividends on obligations of any  2092
authority, commission, instrumentality, territory, or possession  2093
of the United States to the extent that the interest or  2094
dividends are exempt from federal income taxes but not from  2095
state income taxes.  2096
       (3) Deduct interest or dividends on obligations of the  2097
United States and its territories and possessions or of any  2098
authority, commission, or instrumentality of the United States  2099
to the extent that the interest or dividends are included in  2100
federal adjusted gross income but exempt from state income taxes  2101
under the laws of the United States.  2102
       (4) Deduct disability and survivor's benefits to the  2103
extent included in federal adjusted gross income.  2104
       (5) Deduct the following, to the extent not otherwise  2105
deducted or excluded in computing federal or Ohio adjusted gross  2106
income:  2107
       (a) Benefits under Title II of the Social Security Act and  2108
tier 1 railroad retirement;  2109
       (b) Railroad retirement benefits, other than tier 1  2110
railroad retirement benefits, to the extent such amounts are  2111
exempt from state taxation under federal law.  2112
       (6) Deduct the amount of wages and salaries, if any, not  2113
otherwise allowable as a deduction but that would have been  2114
Am. S. B. No. 423  Page 74
As Passed by the Senate
allowable as a deduction in computing federal adjusted gross  2115
income for the taxable year, had the work opportunity tax credit  2116
allowed and determined under sections 38, 51, and 52 of the  2117
Internal Revenue Code not been in effect.  2118
        (7) Deduct any interest or interest equivalent on public  2119
obligations and purchase obligations to the extent that the  2120
interest or interest equivalent is included in federal adjusted  2121
gross income.  2122
        (8) Add any loss or deduct any gain resulting from the  2123
sale, exchange, or other disposition of public obligations to  2124
the extent that the loss has been deducted or the gain has been  2125
included in computing federal adjusted gross income.  2126
        (9) Deduct or add amounts, as provided under section  2127
5747.70 of the Revised Code, related to contributions made to or  2128
tuition units purchased under a qualified tuition program  2129
established pursuant to section 529 of the Internal Revenue  2130
Code.  2131
        (10)(a) Deduct, to the extent not otherwise allowable as a  2132
deduction or exclusion in computing federal or Ohio adjusted  2133
gross income for the taxable year, the amount the taxpayer paid  2134
during the taxable year for medical care insurance and qualified  2135
long-term care insurance for the taxpayer, the taxpayer's  2136
spouse, and dependents. No deduction for medical care insurance  2137
under division (A)(10)(a) of this section shall be allowed  2138
either to any taxpayer who is eligible to participate in any  2139
subsidized health plan maintained by any employer of the  2140
taxpayer or of the taxpayer's spouse, or to any taxpayer who is  2141
entitled to, or on application would be entitled to, benefits  2142
under part A of Title XVIII of the "Social Security Act," 49  2143
Stat. 620 (1935), 42 U.S.C. 301, as amended. For the purposes of  2144
Am. S. B. No. 423  Page 75
As Passed by the Senate
division (A)(10)(a) of this section, "subsidized health plan"  2145
means a health plan for which the employer pays any portion of  2146
the plan's cost. The deduction allowed under division (A)(10)(a)  2147
of this section shall be the net of any related premium refunds,  2148
related premium reimbursements, or related insurance premium  2149
dividends received during the taxable year.  2150
       (b) Deduct, to the extent not otherwise deducted or  2151
excluded in computing federal or Ohio adjusted gross income  2152
during the taxable year, the amount the taxpayer paid during the  2153
taxable year, not compensated for by any insurance or otherwise,  2154
for medical care of the taxpayer, the taxpayer's spouse, and  2155
dependents, to the extent the expenses exceed seven and one-half  2156
per cent of the taxpayer's federal adjusted gross income.  2157
       (c) For purposes of division (A)(10) of this section,  2158
"medical care" has the meaning given in section 213 of the  2159
Internal Revenue Code, subject to the special rules,  2160
limitations, and exclusions set forth therein, and "qualified  2161
long-term care" has the same meaning given in section 7702B(c)  2162
of the Internal Revenue Code. Solely for purposes of division  2163
(A)(10)(a) of this section, "dependent" includes a person who  2164
otherwise would be a "qualifying relative" and thus a  2165
"dependent" under section 152 of the Internal Revenue Code but  2166
for the fact that the person fails to meet the income and  2167
support limitations under section 152(d)(1)(B) and (C) of the  2168
Internal Revenue Code.  2169
       (11)(a) Deduct any amount included in federal adjusted  2170
gross income solely because the amount represents a  2171
reimbursement or refund of expenses that in any year the  2172
taxpayer had deducted as an itemized deduction pursuant to  2173
section 63 of the Internal Revenue Code and applicable United  2174
Am. S. B. No. 423  Page 76
As Passed by the Senate
States department of the treasury regulations. The deduction  2175
otherwise allowed under division (A)(11)(a) of this section  2176
shall be reduced to the extent the reimbursement is attributable  2177
to an amount the taxpayer deducted under this section in any  2178
taxable year.  2179
       (b) Add any amount not otherwise included in Ohio adjusted  2180
gross income for any taxable year to the extent that the amount  2181
is attributable to the recovery during the taxable year of any  2182
amount deducted or excluded in computing federal or Ohio  2183
adjusted gross income in any taxable year.  2184
       (12) Deduct any portion of the deduction described in  2185
section 1341(a)(2) of the Internal Revenue Code, for repaying  2186
previously reported income received under a claim of right, that  2187
meets both of the following requirements:  2188
       (a) It is allowable for repayment of an item that was  2189
included in the taxpayer's adjusted gross income for a prior  2190
taxable year and did not qualify for a credit under division (A)  2191
or (B) of section 5747.05 of the Revised Code for that year;  2192
       (b) It does not otherwise reduce the taxpayer's adjusted  2193
gross income for the current or any other taxable year.  2194
       (13) Deduct an amount equal to the deposits made to, and  2195
net investment earnings of, a medical savings account during the  2196
taxable year, in accordance with section 3924.66 of the Revised  2197
Code. The deduction allowed by division (A)(13) of this section  2198
does not apply to medical savings account deposits and earnings  2199
otherwise deducted or excluded for the current or any other  2200
taxable year from the taxpayer's federal adjusted gross income.  2201
       (14)(a) Add an amount equal to the funds withdrawn from a  2202
medical savings account during the taxable year, and the net  2203
Am. S. B. No. 423  Page 77
As Passed by the Senate
investment earnings on those funds, when the funds withdrawn  2204
were used for any purpose other than to reimburse an account  2205
holder for, or to pay, eligible medical expenses, in accordance  2206
with section 3924.66 of the Revised Code;  2207
       (b) Add the amounts distributed from a medical savings  2208
account under division (A)(2) of section 3924.68 of the Revised  2209
Code during the taxable year.  2210
       (15) Add any amount claimed as a credit under section  2211
5747.059 of the Revised Code to the extent that such amount  2212
satisfies either of the following:  2213
       (a) The amount was deducted or excluded from the  2214
computation of the taxpayer's federal adjusted gross income as  2215
required to be reported for the taxpayer's taxable year under  2216
the Internal Revenue Code;  2217
       (b) The amount resulted in a reduction of the taxpayer's  2218
federal adjusted gross income as required to be reported for any  2219
of the taxpayer's taxable years under the Internal Revenue Code.  2220
       (16) Deduct the amount contributed by the taxpayer to an  2221
individual development account program established by a county  2222
department of job and family services pursuant to sections  2223
329.11 to 329.14 of the Revised Code for the purpose of matching  2224
funds deposited by program participants. On request of the tax  2225
commissioner, the taxpayer shall provide any information that,  2226
in the tax commissioner's opinion, is necessary to establish the  2227
amount deducted under division (A)(16) of this section.  2228
       (17)(a)(i) Subject to divisions (A)(17)(a)(iii), (iv), and  2229
(v) of this section, add five-sixths of the amount of  2230
depreciation expense allowed by subsection (k) of section 168 of  2231
the Internal Revenue Code, including the taxpayer's  2232
Am. S. B. No. 423  Page 78
As Passed by the Senate
proportionate or distributive share of the amount of  2233
depreciation expense allowed by that subsection to a pass-  2234
through entity in which the taxpayer has a direct or indirect  2235
ownership interest.  2236
       (ii) Subject to divisions (A)(17)(a)(iii), (iv), and (v)  2237
of this section, add five-sixths of the amount of qualifying  2238
section 179 depreciation expense, including the taxpayer's  2239
proportionate or distributive share of the amount of qualifying  2240
section 179 depreciation expense allowed to any pass-through  2241
entity in which the taxpayer has a direct or indirect ownership  2242
interest.  2243
       (iii) Subject to division (A)(17)(a)(v) of this section,  2244
for taxable years beginning in 2012 or thereafter, if the  2245
increase in income taxes withheld by the taxpayer is equal to or  2246
greater than ten per cent of income taxes withheld by the  2247
taxpayer during the taxpayer's immediately preceding taxable  2248
year, "two-thirds" shall be substituted for "five-sixths" for  2249
the purpose of divisions (A)(17)(a)(i) and (ii) of this section.  2250
       (iv) Subject to division (A)(17)(a)(v) of this section,  2251
for taxable years beginning in 2012 or thereafter, a taxpayer is  2252
not required to add an amount under division (A)(17) of this  2253
section if the increase in income taxes withheld by the taxpayer  2254
and by any pass-through entity in which the taxpayer has a  2255
direct or indirect ownership interest is equal to or greater  2256
than the sum of (I) the amount of qualifying section 179  2257
depreciation expense and (II) the amount of depreciation expense  2258
allowed to the taxpayer by subsection (k) of section 168 of the  2259
Internal Revenue Code, and including the taxpayer's  2260
proportionate or distributive shares of such amounts allowed to  2261
any such pass-through entities.  2262
Am. S. B. No. 423  Page 79
As Passed by the Senate
       (v) If a taxpayer directly or indirectly incurs a net  2263
operating loss for the taxable year for federal income tax  2264
purposes, to the extent such loss resulted from depreciation  2265
expense allowed by subsection (k) of section 168 of the Internal  2266
Revenue Code and by qualifying section 179 depreciation expense,  2267
"the entire" shall be substituted for "five-sixths of the" for  2268
the purpose of divisions (A)(17)(a)(i) and (ii) of this section.  2269
       The tax commissioner, under procedures established by the  2270
commissioner, may waive the add-backs related to a pass-through  2271
entity if the taxpayer owns, directly or indirectly, less than  2272
five per cent of the pass-through entity.  2273
       (b) Nothing in division (A)(17) of this section shall be  2274
construed to adjust or modify the adjusted basis of any asset.  2275
       (c) To the extent the add-back required under division (A)  2276
(17)(a) of this section is attributable to property generating  2277
nonbusiness income or loss allocated under section 5747.20 of  2278
the Revised Code, the add-back shall be sitused to the same  2279
location as the nonbusiness income or loss generated by the  2280
property for the purpose of determining the credit under  2281
division (A) of section 5747.05 of the Revised Code. Otherwise,  2282
the add-back shall be apportioned, subject to one or more of the  2283
four alternative methods of apportionment enumerated in section  2284
5747.21 of the Revised Code.  2285
       (d) For the purposes of division (A)(17)(a)(v) of this  2286
section, net operating loss carryback and carryforward shall not  2287
include the allowance of any net operating loss deduction  2288
carryback or carryforward to the taxable year to the extent such  2289
loss resulted from depreciation allowed by section 168(k) of the  2290
Internal Revenue Code and by the qualifying section 179  2291
depreciation expense amount.  2292
Am. S. B. No. 423  Page 80
As Passed by the Senate
       (e) For the purposes of divisions (A)(17) and (18) of this  2293
section:  2294
       (i) "Income taxes withheld" means the total amount  2295
withheld and remitted under sections 5747.06 and 5747.07 of the  2296
Revised Code by an employer during the employer's taxable year.  2297
       (ii) "Increase in income taxes withheld" means the amount  2298
by which the amount of income taxes withheld by an employer  2299
during the employer's current taxable year exceeds the amount of  2300
income taxes withheld by that employer during the employer's  2301
immediately preceding taxable year.  2302
       (iii) "Qualifying section 179 depreciation expense" means  2303
the difference between (I) the amount of depreciation expense  2304
directly or indirectly allowed to a taxpayer under section 179  2305
of the Internal Revised Code, and (II) the amount of  2306
depreciation expense directly or indirectly allowed to the  2307
taxpayer under section 179 of the Internal Revenue Code as that  2308
section existed on December 31, 2002.  2309
       (18)(a) If the taxpayer was required to add an amount  2310
under division (A)(17)(a) of this section for a taxable year,  2311
deduct one of the following:  2312
       (i) One-fifth of the amount so added for each of the five  2313
succeeding taxable years if the amount so added was five-sixths  2314
of qualifying section 179 depreciation expense or depreciation  2315
expense allowed by subsection (k) of section 168 of the Internal  2316
Revenue Code;  2317
       (ii) One-half of the amount so added for each of the two  2318
succeeding taxable years if the amount so added was two-thirds  2319
of such depreciation expense;  2320
       (iii) One-sixth of the amount so added for each of the six  2321
Am. S. B. No. 423  Page 81
As Passed by the Senate
succeeding taxable years if the entire amount of such  2322
depreciation expense was so added.  2323
       (b) If the amount deducted under division (A)(18)(a) of  2324
this section is attributable to an add-back allocated under  2325
division (A)(17)(c) of this section, the amount deducted shall  2326
be sitused to the same location. Otherwise, the deduction shall  2327
be apportioned using the apportionment factors for the taxable  2328
year in which the deduction is taken, subject to one or more of  2329
the four alternative methods of apportionment enumerated in  2330
section 5747.21 of the Revised Code.  2331
       (c) No deduction is available under division (A)(18)(a) of  2332
this section with regard to any depreciation allowed by section  2333
168(k) of the Internal Revenue Code and by the qualifying  2334
section 179 depreciation expense amount to the extent that such  2335
depreciation results in or increases a federal net operating  2336
loss carryback or carryforward. If no such deduction is  2337
available for a taxable year, the taxpayer may carry forward the  2338
amount not deducted in such taxable year to the next taxable  2339
year and add that amount to any deduction otherwise available  2340
under division (A)(18)(a) of this section for that next taxable  2341
year. The carryforward of amounts not so deducted shall continue  2342
until the entire addition required by division (A)(17)(a) of  2343
this section has been deducted.  2344
       (19) Deduct, to the extent not otherwise deducted or  2345
excluded in computing federal or Ohio adjusted gross income for  2346
the taxable year, the amount the taxpayer received during the  2347
taxable year as reimbursement for life insurance premiums under  2348
section 5919.31 of the Revised Code.  2349
       (20) Deduct, to the extent not otherwise deducted or  2350
excluded in computing federal or Ohio adjusted gross income for  2351
Am. S. B. No. 423  Page 82
As Passed by the Senate
the taxable year, the amount the taxpayer received during the  2352
taxable year as a death benefit paid by the adjutant general  2353
under section 5919.33 of the Revised Code.  2354
       (21) Deduct, to the extent included in federal adjusted  2355
gross income and not otherwise allowable as a deduction or  2356
exclusion in computing federal or Ohio adjusted gross income for  2357
the taxable year, military pay and allowances received by the  2358
taxpayer during the taxable year for active duty service in the  2359
armed forces of the United States, as defined in section 5907.01  2360
of the Revised Code, or reserve components thereof or the  2361
national guard. The deduction may not be claimed for military  2362
pay and allowances received by the taxpayer while the taxpayer  2363
is stationed in this state.  2364
       (22) Deduct, to the extent not otherwise allowable as a  2365
deduction or exclusion in computing federal or Ohio adjusted  2366
gross income for the taxable year and not otherwise compensated  2367
for by any other source, the amount of qualified organ donation  2368
expenses incurred by the taxpayer during the taxable year, not  2369
to exceed ten thousand dollars. A taxpayer may deduct qualified  2370
organ donation expenses only once for all taxable years  2371
beginning with taxable years beginning in 2007.  2372
       For the purposes of division (A)(22) of this section:  2373
       (a) "Human organ" means all or any portion of a human  2374
liver, pancreas, kidney, intestine, or lung, and any portion of  2375
human bone marrow.  2376
       (b) "Qualified organ donation expenses" means travel  2377
expenses, lodging expenses, and wages and salary forgone by a  2378
taxpayer in connection with the taxpayer's donation, while  2379
living, of one or more of the taxpayer's human organs to another  2380
Am. S. B. No. 423  Page 83
As Passed by the Senate
human being.  2381
       (23) Deduct, to the extent not otherwise deducted or  2382
excluded in computing federal or Ohio adjusted gross income for  2383
the taxable year, amounts received by the taxpayer as retired  2384
personnel pay for service in the uniformed services or reserve  2385
components thereof, or the national guard, or received by the  2386
surviving spouse or former spouse of such a taxpayer under the  2387
survivor benefit plan on account of such a taxpayer's death. If  2388
the taxpayer receives income on account of retirement paid under  2389
the federal civil service retirement system or federal employees  2390
retirement system, or under any successor retirement program  2391
enacted by the congress of the United States that is established  2392
and maintained for retired employees of the United States  2393
government, and such retirement income is based, in whole or in  2394
part, on credit for the taxpayer's uniformed service, the  2395
deduction allowed under this division shall include only that  2396
portion of such retirement income that is attributable to the  2397
taxpayer's uniformed service, to the extent that portion of such  2398
retirement income is otherwise included in federal adjusted  2399
gross income and is not otherwise deducted under this section.  2400
Any amount deducted under division (A)(23) of this section is  2401
not included in a taxpayer's adjusted gross income for the  2402
purposes of section 5747.055 of the Revised Code. No amount may  2403
be deducted under division (A)(23) of this section on the basis  2404
of which a credit was claimed under section 5747.055 of the  2405
Revised Code.  2406
       (24) Deduct, to the extent not otherwise deducted or  2407
excluded in computing federal or Ohio adjusted gross income for  2408
the taxable year, the amount the taxpayer received during the  2409
taxable year from the military injury relief fund created in  2410
section 5902.05 of the Revised Code.  2411
Am. S. B. No. 423  Page 84
As Passed by the Senate
       (25) Deduct, to the extent not otherwise deducted or  2412
excluded in computing federal or Ohio adjusted gross income for  2413
the taxable year, the amount the taxpayer received as a veterans  2414
bonus during the taxable year from the Ohio department of  2415
veterans services as authorized by Section 2r of Article VIII,  2416
Ohio Constitution.  2417
       (26) Deduct, to the extent not otherwise deducted or  2418
excluded in computing federal or Ohio adjusted gross income for  2419
the taxable year, any income derived from a transfer agreement  2420
or from the enterprise transferred under that agreement under  2421
section 4313.02 of the Revised Code.  2422
       (27) Deduct, to the extent not otherwise deducted or  2423
excluded in computing federal or Ohio adjusted gross income for  2424
the taxable year, Ohio college opportunity or federal Pell grant  2425
amounts received by the taxpayer or the taxpayer's spouse or  2426
dependent pursuant to section 3333.122 of the Revised Code or 20  2427
U.S.C. 1070a, et seq., and used to pay room or board furnished  2428
by the educational institution for which the grant was awarded  2429
at the institution's facilities, including meal plans  2430
administered by the institution. For the purposes of this  2431
division, receipt of a grant includes the distribution of a  2432
grant directly to an educational institution and the crediting  2433
of the grant to the enrollee's account with the institution.  2434
       (28) Deduct from the portion of an individual's federal  2435
adjusted gross income that is business income, to the extent not  2436
otherwise deducted or excluded in computing federal adjusted  2437
gross income for the taxable year, one hundred twenty-five  2438
thousand dollars for each spouse if spouses file separate  2439
returns under section 5747.08 of the Revised Code or two hundred  2440
fifty thousand dollars for all other individuals.  2441
Am. S. B. No. 423  Page 85
As Passed by the Senate
        (29) Deduct, as provided under section 5747.78 of the  2442
Revised Code, contributions to ABLE savings accounts made in  2443
accordance with sections 113.50 to 113.56 of the Revised Code.  2444
        (30)(a) Deduct, to the extent not otherwise deducted or  2445
excluded in computing federal or Ohio adjusted gross income  2446
during the taxable year, all of the following:  2447
        (i) Compensation paid to a qualifying employee described  2448
in division (A)(14)(a) of section 5703.94 of the Revised Code to  2449
the extent such compensation is for disaster work conducted in  2450
this state during a disaster response period pursuant to a  2451
qualifying solicitation received by the employee's employer;  2452
        (ii) Compensation paid to a qualifying employee described  2453
in division (A)(14)(b) of section 5703.94 of the Revised Code to  2454
the extent such compensation is for disaster work conducted in  2455
this state by the employee during the disaster response period  2456
on critical infrastructure owned or used by the employee's  2457
employer;  2458
        (iii) Income received by an out-of-state disaster business  2459
for disaster work conducted in this state during a disaster  2460
response period, or, if the out-of-state disaster business is a  2461
pass-through entity, a taxpayer's distributive share of the  2462
pass-through entity's income from the business conducting  2463
disaster work in this state during a disaster response period,  2464
if, in either case, the disaster work is conducted pursuant to a  2465
qualifying solicitation received by the business.  2466
        (b) All terms used in division (A)(30) of this section  2467
have the same meanings as in section 5703.94 of the Revised  2468
Code.  2469
        (31) For a taxpayer who is a qualifying Ohio educator,  2470
Am. S. B. No. 423  Page 86
As Passed by the Senate
deduct, to the extent not otherwise deducted or excluded in  2471
computing federal or Ohio adjusted gross income for the taxable  2472
year, the lesser of three hundred dollars or the amount of  2473
expenses described in subsections (a)(2)(D)(i) and (ii) of  2474
section 62 of the Internal Revenue Code paid or incurred by the  2475
taxpayer during the taxpayer's taxable year in excess of the  2476
amount the taxpayer is authorized to deduct for that taxable  2477
year under subsection (a)(2)(D) of that section.  2478
       (32) Deduct, to the extent not otherwise deducted or  2479
excluded in computing federal or Ohio adjusted gross income for  2480
the taxable year, amounts received by the taxpayer as a  2481
disability severance payment, computed under 10 U.S.C. 1212,  2482
following discharge or release under honorable conditions from  2483
the armed forces of the United States, as defined in section  2484
5907.01 of the Revised Code.  2485
       (33) Deduct, to the extent not otherwise deducted or  2486
excluded in computing federal adjusted gross income or Ohio  2487
adjusted gross income, amounts not subject to tax due to an  2488
agreement entered into under division (A)(2) of section 5747.05  2489
of the Revised Code.  2490
       (34) Deduct amounts as provided under section 5747.79 of  2491
the Revised Code related to the taxpayer's qualifying capital  2492
gains and deductible payroll.  2493
       To the extent a qualifying capital gain described under  2494
division (A)(34) of this section is business income, the  2495
taxpayer shall deduct those gains under this division before  2496
deducting any such gains under division (A)(28) of this section.  2497
       (35)(a) For taxable years beginning in or after 2026,  2498
deduct, to the extent not otherwise deducted or excluded in  2499
Am. S. B. No. 423  Page 87
As Passed by the Senate
computing federal or Ohio adjusted gross income for the taxable  2500
year:  2501
        (i) One hundred per cent of the capital gain received by  2502
the taxpayer in the taxable year from a qualifying interest in  2503
an Ohio venture capital operating company attributable to the  2504
company's investments in Ohio businesses during the period for  2505
which the company was an Ohio venture operating company; and  2506
        (ii) Fifty per cent of the capital gain received by the  2507
taxpayer in the taxable year from a qualifying interest in an  2508
Ohio venture capital operating company attributable to the  2509
company's investments in all other businesses during the period  2510
for which the company was an Ohio venture operating company.  2511
        (b) Add amounts previously deducted by the taxpayer under  2512
division (A)(35)(a) of this section if the director of  2513
development certifies to the tax commissioner that the  2514
requirements for the deduction were not met.  2515
        (c) All terms used in division (A)(35) of this section  2516
have the same meanings as in section 122.851 of the Revised  2517
Code.  2518
        (d) To the extent a capital gain described in division (A)  2519
(35)(a) of this section is business income, the taxpayer shall  2520
apply that division before applying division (A)(28) of this  2521
section.  2522
        (36) Add, to the extent not otherwise included in  2523
computing federal or Ohio adjusted gross income for any taxable  2524
year, the taxpayer's proportionate share of the amount of the  2525
tax levied under section 5747.38 of the Revised Code and paid by  2526
an electing pass-through entity for the taxable year.  2527
        Notwithstanding any provision of the Revised Code to the  2528
Am. S. B. No. 423  Page 88
As Passed by the Senate
contrary, the portion of the addition required by division (A)  2529
(36) of this section related to the apportioned business income  2530
of the pass-through entity shall be considered business income  2531
under division (B) of this section. Such addition is eligible  2532
for the deduction in division (A)(28) of this section, subject  2533
to the applicable dollar limitations, and the tax rate  2534
prescribed by division (A)(4)(a) of section 5747.02 of the  2535
Revised Code. The taxpayer shall provide, upon request of the  2536
tax commissioner, any documentation necessary to verify the  2537
portion of the addition that is business income under this  2538
division.  2539
       (37) Deduct, to the extent not otherwise deducted or  2540
excluded in computing federal or Ohio adjusted gross income for  2541
the taxable year, amounts delivered to a qualifying institution  2542
pursuant to section 3333.128 of the Revised Code for the benefit  2543
of the taxpayer or the taxpayer's spouse or dependent.  2544
       (38) Deduct, to the extent not otherwise deducted or  2545
excluded in computing federal or Ohio adjusted gross income for  2546
the taxable year, amounts received under the Ohio adoption grant  2547
program pursuant to section 5180.451 of the Revised Code.  2548
       (39) Deduct, to the extent included in federal adjusted  2549
gross income, income attributable to amounts provided to a  2550
taxpayer for any of the purposes for which an exclusion would  2551
have been authorized under section 139 of the Internal Revenue  2552
Code if the train derailment near the city of East Palestine on  2553
February 3, 2023, had been a qualified disaster pursuant to that  2554
section, or to compensate for lost business resulting from that  2555
derailment, if such amounts are provided by any of the  2556
following:  2557
       (a) A federal, state, or local government agency;  2558
Am. S. B. No. 423  Page 89
As Passed by the Senate
       (b) A railroad company, as that term is defined in section  2559
5727.01 of the Revised Code;  2560
       (c) Any subsidiary, insurer, or agent of a railroad  2561
company or any related person.  2562
       Notwithstanding any provision to the contrary, the  2563
derailment is not required to meet the definition of a  2564
"qualified disaster" pursuant to section 139 of the Internal  2565
Revenue Code to qualify for the deduction under this section.  2566
       (40) Deduct, to the extent included in federal adjusted  2567
gross income, income attributable to loan repayments on behalf  2568
of the taxpayer under the rural practice incentive program under  2569
section 3333.135 of the Revised Code.  2570
       (41) Add any income taxes deducted in computing federal or  2571
Ohio adjusted gross income to the extent the income taxes were  2572
derived from income subject to a tax levied in another state or  2573
the District of Columbia when such tax was enacted for purposes  2574
of complying with internal revenue service notice 2020-75.  2575
       Notwithstanding any provision of the Revised Code to the  2576
contrary, the portion of the addition required by division (A)  2577
(41) of this section related to the apportioned business income  2578
of the pass-through entity shall be considered business income  2579
under division (B) of this section. Such addition is eligible  2580
for the deduction in division (A)(28) of this section, subject  2581
to the applicable dollar limitations, and the tax rate  2582
prescribed by division (A)(4)(a) of section 5747.02 of the  2583
Revised Code. The taxpayer shall provide, upon request of the  2584
tax commissioner, any documentation necessary to verify the  2585
portion of the addition that is business income under this  2586
division.  2587
Am. S. B. No. 423  Page 90
As Passed by the Senate
       (42) Deduct amounts contributed to a homeownership savings  2588
account and calculated pursuant to divisions (B) and (C) of  2589
section 5747.85 of the Revised Code.  2590
       (43) If the taxpayer is the account owner of a  2591
homeownership savings account, upon withdrawal or transfer of  2592
funds from the account, or closure of the account containing  2593
funds that are not used for eligible expenses, add the amount of  2594
such funds not used for an eligible expense. The addition  2595
required under this division shall not exceed the sum of the  2596
amounts deducted by the taxpayer for such account under division  2597
(A)(42) of this section in any taxable year and the amount of  2598
any funds deposited in the account by a contributor other than  2599
the account owner. As used in division (A)(43) of this section,  2600
"homeownership savings account," "contributor," "account owner,"  2601
and "eligible expenses" have the same meanings as in section  2602
5747.85 of the Revised Code.  2603
       (44) Deduct, to the extent not otherwise deducted or  2604
excluded in computing federal or Ohio adjusted gross income  2605
during the taxable year, up to seven hundred fifty dollars of  2606
contributions the taxpayer makes to a pregnancy resource center  2607
that meets the criteria in division (B) of section 5180.71 of  2608
the Revised Code.  2609
       (B) "Business income" means income, including gain or  2610
loss, arising from transactions, activities, and sources in the  2611
regular course of a trade or business and includes income, gain,  2612
or loss from real property, tangible property, and intangible  2613
property if the acquisition, rental, management, and disposition  2614
of the property constitute integral parts of the regular course  2615
of a trade or business operation. "Business income" includes  2616
income, including gain or loss, from a partial or complete  2617
Am. S. B. No. 423  Page 91
As Passed by the Senate
liquidation of a business, including, but not limited to, gain  2618
or loss from the sale or other disposition of goodwill or the  2619
sale of an equity or ownership interest in a business.  2620
       As used in this division, the "sale of an equity or  2621
ownership interest in a business" means sales to which either or  2622
both of the following apply:  2623
       (1) The sale is treated for federal income tax purposes as  2624
the sale of assets.  2625
       (2) The seller materially participated, as described in 26  2626
C.F.R. 1.469-5T, in the activities of the business during the  2627
taxable year in which the sale occurs or during any of the five  2628
preceding taxable years.  2629
       (C) "Nonbusiness income" means all income other than  2630
business income and may include, but is not limited to,  2631
compensation, rents and royalties from real or tangible personal  2632
property, capital gains, interest, dividends and distributions,  2633
patent or copyright royalties, or lottery winnings, prizes, and  2634
awards.  2635
       (D) "Compensation" means any form of remuneration paid to  2636
an employee for personal services.  2637
       (E) "Fiduciary" means a guardian, trustee, executor,  2638
administrator, receiver, conservator, or any other person acting  2639
in any fiduciary capacity for any individual, trust, or estate.  2640
       (F) "Fiscal year" means an accounting period of twelve  2641
months ending on the last day of any month other than December.  2642
       (G) "Individual" means any natural person.  2643
       (H) "Internal Revenue Code" means the "Internal Revenue  2644
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.  2645
Am. S. B. No. 423  Page 92
As Passed by the Senate
       (I) "Resident" means any of the following:  2646
       (1) An individual who is domiciled in this state, subject  2647
to section 5747.24 of the Revised Code;  2648
       (2) The estate of a decedent who at the time of death was  2649
domiciled in this state. The domicile tests of section 5747.24  2650
of the Revised Code are not controlling for purposes of division  2651
(I)(2) of this section.  2652
       (3) A trust that, in whole or part, resides in this state.  2653
If only part of a trust resides in this state, the trust is a  2654
resident only with respect to that part.  2655
       For the purposes of division (I)(3) of this section:  2656
       (a) A trust resides in this state for the trust's current  2657
taxable year to the extent, as described in division (I)(3)(d)  2658
of this section, that the trust consists directly or indirectly,  2659
in whole or in part, of assets, net of any related liabilities,  2660
that were transferred, or caused to be transferred, directly or  2661
indirectly, to the trust by any of the following:  2662
       (i) A person, a court, or a governmental entity or  2663
instrumentality on account of the death of a decedent, but only  2664
if the trust is described in division (I)(3)(e)(i) or (ii) of  2665
this section;  2666
       (ii) A person who was domiciled in this state for the  2667
purposes of this chapter when the person directly or indirectly  2668
transferred assets to an irrevocable trust, but only if at least  2669
one of the trust's qualifying beneficiaries is domiciled in this  2670
state for the purposes of this chapter during all or some  2671
portion of the trust's current taxable year;  2672
       (iii) A person who was domiciled in this state for the  2673
Am. S. B. No. 423  Page 93
As Passed by the Senate
purposes of this chapter when the trust document or instrument  2674
or part of the trust document or instrument became irrevocable,  2675
but only if at least one of the trust's qualifying beneficiaries  2676
is a resident domiciled in this state for the purposes of this  2677
chapter during all or some portion of the trust's current  2678
taxable year. If a trust document or instrument became  2679
irrevocable upon the death of a person who at the time of death  2680
was domiciled in this state for purposes of this chapter, that  2681
person is a person described in division (I)(3)(a)(iii) of this  2682
section.  2683
        (b) A trust is irrevocable to the extent that the  2684
transferor is not considered to be the owner of the net assets  2685
of the trust under sections 671 to 678 of the Internal Revenue  2686
Code.  2687
        (c) With respect to a trust other than a charitable lead  2688
trust, "qualifying beneficiary" has the same meaning as  2689
"potential current beneficiary" as defined in section 1361(e)(2)  2690
of the Internal Revenue Code, and with respect to a charitable  2691
lead trust "qualifying beneficiary" is any current, future, or  2692
contingent beneficiary, but with respect to any trust  2693
"qualifying beneficiary" excludes a person or a governmental  2694
entity or instrumentality to any of which a contribution would  2695
qualify for the charitable deduction under section 170 of the  2696
Internal Revenue Code.  2697
        (d) For the purposes of division (I)(3)(a) of this  2698
section, the extent to which a trust consists directly or  2699
indirectly, in whole or in part, of assets, net of any related  2700
liabilities, that were transferred directly or indirectly, in  2701
whole or part, to the trust by any of the sources enumerated in  2702
that division shall be ascertained by multiplying the fair  2703
Am. S. B. No. 423  Page 94
As Passed by the Senate
market value of the trust's assets, net of related liabilities,  2704
by the qualifying ratio, which shall be computed as follows:  2705
       (i) The first time the trust receives assets, the  2706
numerator of the qualifying ratio is the fair market value of  2707
those assets at that time, net of any related liabilities, from  2708
sources enumerated in division (I)(3)(a) of this section. The  2709
denominator of the qualifying ratio is the fair market value of  2710
all the trust's assets at that time, net of any related  2711
liabilities.  2712
       (ii) Each subsequent time the trust receives assets, a  2713
revised qualifying ratio shall be computed. The numerator of the  2714
revised qualifying ratio is the sum of (1) the fair market value  2715
of the trust's assets immediately prior to the subsequent  2716
transfer, net of any related liabilities, multiplied by the  2717
qualifying ratio last computed without regard to the subsequent  2718
transfer, and (2) the fair market value of the subsequently  2719
transferred assets at the time transferred, net of any related  2720
liabilities, from sources enumerated in division (I)(3)(a) of  2721
this section. The denominator of the revised qualifying ratio is  2722
the fair market value of all the trust's assets immediately  2723
after the subsequent transfer, net of any related liabilities.  2724
       (iii) Whether a transfer to the trust is by or from any of  2725
the sources enumerated in division (I)(3)(a) of this section  2726
shall be ascertained without regard to the domicile of the  2727
trust's beneficiaries.  2728
       (e) For the purposes of division (I)(3)(a)(i) of this  2729
section:  2730
       (i) A trust is described in division (I)(3)(e)(i) of this  2731
section if the trust is a testamentary trust and the testator of  2732
Am. S. B. No. 423  Page 95
As Passed by the Senate
that testamentary trust was domiciled in this state at the time  2733
of the testator's death for purposes of the taxes levied under  2734
Chapter 5731. of the Revised Code.  2735
       (ii) A trust is described in division (I)(3)(e)(ii) of  2736
this section if the transfer is a qualifying transfer described  2737
in any of divisions (I)(3)(f)(i) to (vi) of this section, the  2738
trust is an irrevocable inter vivos trust, and at least one of  2739
the trust's qualifying beneficiaries is domiciled in this state  2740
for purposes of this chapter during all or some portion of the  2741
trust's current taxable year.  2742
       (f) For the purposes of division (I)(3)(e)(ii) of this  2743
section, a "qualifying transfer" is a transfer of assets, net of  2744
any related liabilities, directly or indirectly to a trust, if  2745
the transfer is described in any of the following:  2746
       (i) The transfer is made to a trust, created by the  2747
decedent before the decedent's death and while the decedent was  2748
domiciled in this state for the purposes of this chapter, and,  2749
prior to the death of the decedent, the trust became irrevocable  2750
while the decedent was domiciled in this state for the purposes  2751
of this chapter.  2752
       (ii) The transfer is made to a trust to which the  2753
decedent, prior to the decedent's death, had directly or  2754
indirectly transferred assets, net of any related liabilities,  2755
while the decedent was domiciled in this state for the purposes  2756
of this chapter, and prior to the death of the decedent the  2757
trust became irrevocable while the decedent was domiciled in  2758
this state for the purposes of this chapter.  2759
       (iii) The transfer is made on account of a contractual  2760
relationship existing directly or indirectly between the  2761
Am. S. B. No. 423  Page 96
As Passed by the Senate
transferor and either the decedent or the estate of the decedent  2762
at any time prior to the date of the decedent's death, and the  2763
decedent was domiciled in this state at the time of death for  2764
purposes of the taxes levied under Chapter 5731. of the Revised  2765
Code.  2766
        (iv) The transfer is made to a trust on account of a  2767
contractual relationship existing directly or indirectly between  2768
the transferor and another person who at the time of the  2769
decedent's death was domiciled in this state for purposes of  2770
this chapter.  2771
        (v) The transfer is made to a trust on account of the will  2772
of a testator who was domiciled in this state at the time of the  2773
testator's death for purposes of the taxes levied under Chapter  2774
5731. of the Revised Code.  2775
        (vi) The transfer is made to a trust created by or caused  2776
to be created by a court, and the trust was directly or  2777
indirectly created in connection with or as a result of the  2778
death of an individual who, for purposes of the taxes levied  2779
under Chapter 5731. of the Revised Code, was domiciled in this  2780
state at the time of the individual's death.  2781
        (g) The tax commissioner may adopt rules to ascertain the  2782
part of a trust residing in this state.  2783
        (J) "Nonresident" means an individual or estate that is  2784
not a resident. An individual who is a resident for only part of  2785
a taxable year is a nonresident for the remainder of that  2786
taxable year.  2787
        (K) "Pass-through entity" has the same meaning as in  2788
section 5733.04 of the Revised Code.  2789
        (L) "Return" means the notifications and reports required  2790
Am. S. B. No. 423  Page 97
As Passed by the Senate
to be filed pursuant to this chapter for the purpose of  2791
reporting the tax due and includes declarations of estimated tax  2792
when so required.  2793
        (M) "Taxable year" means the calendar year or the  2794
taxpayer's fiscal year ending during the calendar year, or  2795
fractional part thereof, upon which the adjusted gross income is  2796
calculated pursuant to this chapter.  2797
        (N) "Taxpayer" means any person subject to the tax imposed  2798
by section 5747.02 of the Revised Code or any pass-through  2799
entity that makes the election under division (D) of section  2800
5747.08 of the Revised Code.  2801
        (O) "Dependents" means dependents as defined in the  2802
Internal Revenue Code.  2803
        (P) "Principal county of employment" means, in the case of  2804
a nonresident, the county within the state in which a taxpayer  2805
performs services for an employer or, if those services are  2806
performed in more than one county, the county in which the major  2807
portion of the services are performed.  2808
        (Q) As used in sections 5747.50 to 5747.55 of the Revised  2809
Code:  2810
        (1) "Subdivision" means any county, municipal corporation,  2811
park district, or township.  2812
        (2) "Essential local government purposes" includes all  2813
functions that any subdivision is required by general law to  2814
exercise, including like functions that are exercised under a  2815
charter adopted pursuant to the Ohio Constitution.  2816
        (R) "Overpayment" means any amount already paid that  2817
exceeds the figure determined to be the correct amount of the  2818
Am. S. B. No. 423  Page 98
As Passed by the Senate
tax.  2819
       (S) "Taxable income" or "Ohio taxable income" applies only  2820
to estates and trusts, and means federal taxable income, as  2821
defined and used in the Internal Revenue Code, adjusted as  2822
follows:  2823
       (1) Add interest or dividends, net of ordinary, necessary,  2824
and reasonable expenses not deducted in computing federal  2825
taxable income, on obligations or securities of any state or of  2826
any political subdivision or authority of any state, other than  2827
this state and its subdivisions and authorities, but only to the  2828
extent that such net amount is not otherwise includible in Ohio  2829
taxable income and is described in either division (S)(1)(a) or  2830
(b) of this section:  2831
       (a) The net amount is not attributable to the S portion of  2832
an electing small business trust and has not been distributed to  2833
beneficiaries for the taxable year;  2834
       (b) The net amount is attributable to the S portion of an  2835
electing small business trust for the taxable year.  2836
       (2) Add interest or dividends, net of ordinary, necessary,  2837
and reasonable expenses not deducted in computing federal  2838
taxable income, on obligations of any authority, commission,  2839
instrumentality, territory, or possession of the United States  2840
to the extent that the interest or dividends are exempt from  2841
federal income taxes but not from state income taxes, but only  2842
to the extent that such net amount is not otherwise includible  2843
in Ohio taxable income and is described in either division (S)  2844
(1)(a) or (b) of this section;  2845
       (3) Add the amount of personal exemption allowed to the  2846
estate pursuant to section 642(b) of the Internal Revenue Code;  2847
Am. S. B. No. 423  Page 99
As Passed by the Senate
        (4) Deduct interest or dividends, net of related expenses  2848
deducted in computing federal taxable income, on obligations of  2849
the United States and its territories and possessions or of any  2850
authority, commission, or instrumentality of the United States  2851
to the extent that the interest or dividends are exempt from  2852
state taxes under the laws of the United States, but only to the  2853
extent that such amount is included in federal taxable income  2854
and is described in either division (S)(1)(a) or (b) of this  2855
section;  2856
        (5) Deduct the amount of wages and salaries, if any, not  2857
otherwise allowable as a deduction but that would have been  2858
allowable as a deduction in computing federal taxable income for  2859
the taxable year, had the work opportunity tax credit allowed  2860
under sections 38, 51, and 52 of the Internal Revenue Code not  2861
been in effect, but only to the extent such amount relates  2862
either to income included in federal taxable income for the  2863
taxable year or to income of the S portion of an electing small  2864
business trust for the taxable year;  2865
        (6) Deduct any interest or interest equivalent, net of  2866
related expenses deducted in computing federal taxable income,  2867
on public obligations and purchase obligations, but only to the  2868
extent that such net amount relates either to income included in  2869
federal taxable income for the taxable year or to income of the  2870
S portion of an electing small business trust for the taxable  2871
year;  2872
        (7) Add any loss or deduct any gain resulting from sale,  2873
exchange, or other disposition of public obligations to the  2874
extent that such loss has been deducted or such gain has been  2875
included in computing either federal taxable income or income of  2876
the S portion of an electing small business trust for the  2877
Am. S. B. No. 423  Page 100
As Passed by the Senate
taxable year;  2878
       (8) Except in the case of the final return of an estate,  2879
add any amount deducted by the taxpayer on both its Ohio estate  2880
tax return pursuant to section 5731.14 of the Revised Code, and  2881
on its federal income tax return in determining federal taxable  2882
income;  2883
       (9)(a) Deduct any amount included in federal taxable  2884
income solely because the amount represents a reimbursement or  2885
refund of expenses that in a previous year the decedent had  2886
deducted as an itemized deduction pursuant to section 63 of the  2887
Internal Revenue Code and applicable treasury regulations. The  2888
deduction otherwise allowed under division (S)(9)(a) of this  2889
section shall be reduced to the extent the reimbursement is  2890
attributable to an amount the taxpayer or decedent deducted  2891
under this section in any taxable year.  2892
       (b) Add any amount not otherwise included in Ohio taxable  2893
income for any taxable year to the extent that the amount is  2894
attributable to the recovery during the taxable year of any  2895
amount deducted or excluded in computing federal or Ohio taxable  2896
income in any taxable year, but only to the extent such amount  2897
has not been distributed to beneficiaries for the taxable year.  2898
       (10) Deduct any portion of the deduction described in  2899
section 1341(a)(2) of the Internal Revenue Code, for repaying  2900
previously reported income received under a claim of right, that  2901
meets both of the following requirements:  2902
       (a) It is allowable for repayment of an item that was  2903
included in the taxpayer's taxable income or the decedent's  2904
adjusted gross income for a prior taxable year and did not  2905
qualify for a credit under division (A) or (B) of section  2906
Am. S. B. No. 423  Page 101
As Passed by the Senate
5747.05 of the Revised Code for that year.  2907
       (b) It does not otherwise reduce the taxpayer's taxable  2908
income or the decedent's adjusted gross income for the current  2909
or any other taxable year.  2910
       (11) Add any amount claimed as a credit under section  2911
5747.059 of the Revised Code to the extent that the amount  2912
satisfies either of the following:  2913
       (a) The amount was deducted or excluded from the  2914
computation of the taxpayer's federal taxable income as required  2915
to be reported for the taxpayer's taxable year under the  2916
Internal Revenue Code;  2917
       (b) The amount resulted in a reduction in the taxpayer's  2918
federal taxable income as required to be reported for any of the  2919
taxpayer's taxable years under the Internal Revenue Code.  2920
       (12) Deduct any amount, net of related expenses deducted  2921
in computing federal taxable income, that a trust is required to  2922
report as farm income on its federal income tax return, but only  2923
if the assets of the trust include at least ten acres of land  2924
satisfying the definition of "land devoted exclusively to  2925
agricultural use" under section 5713.30 of the Revised Code,  2926
regardless of whether the land is valued for tax purposes as  2927
such land under sections 5713.30 to 5713.38 of the Revised Code.  2928
If the trust is a pass-through entity investor, section 5747.231  2929
of the Revised Code applies in ascertaining if the trust is  2930
eligible to claim the deduction provided by division (S)(12) of  2931
this section in connection with the pass-through entity's farm  2932
income.  2933
       Except for farm income attributable to the S portion of an  2934
electing small business trust, the deduction provided by  2935
Am. S. B. No. 423  Page 102
As Passed by the Senate
division (S)(12) of this section is allowed only to the extent  2936
that the trust has not distributed such farm income.  2937
        (13) Add the net amount of income described in section  2938
641(c) of the Internal Revenue Code to the extent that amount is  2939
not included in federal taxable income.  2940
        (14) Add or deduct the amount the taxpayer would be  2941
required to add or deduct under division (A)(17) or (18) of this  2942
section if the taxpayer's Ohio taxable income was computed in  2943
the same manner as an individual's Ohio adjusted gross income is  2944
computed under this section.  2945
        (15) Add, to the extent not otherwise included in  2946
computing taxable income or Ohio taxable income for any taxable  2947
year, the taxpayer's proportionate share of the amount of the  2948
tax levied under section 5747.38 of the Revised Code and paid by  2949
an electing pass-through entity for the taxable year.  2950
        (16) Add any income taxes deducted in computing federal  2951
taxable income or Ohio taxable income to the extent the income  2952
taxes were derived from income subject to a tax levied in  2953
another state or the District of Columbia when such tax was  2954
enacted for purposes of complying with internal revenue service  2955
notice 2020-75.  2956
        (T) "School district income" and "school district income  2957
tax" have the same meanings as in section 5748.01 of the Revised  2958
Code.  2959
        (U) As used in divisions (A)(7), (A)(8), (S)(6), and (S)  2960
(7) of this section, "public obligations," "purchase  2961
obligations," and "interest or interest equivalent" have the  2962
same meanings as in section 5709.76 of the Revised Code.  2963
        (V) "Limited liability company" means any limited  2964
Am. S. B. No. 423  Page 103
As Passed by the Senate
liability company formed under former Chapter 1705. of the  2965
Revised Code as that chapter existed prior to February 11, 2022,  2966
Chapter 1706. of the Revised Code, or the laws of any other  2967
state.  2968
       (W) "Pass-through entity investor" means any person who,  2969
during any portion of a taxable year of a pass-through entity,  2970
is a partner, member, shareholder, or equity investor in that  2971
pass-through entity.  2972
       (X) "Banking day" has the same meaning as in section  2973
1304.01 of the Revised Code.  2974
       (Y) "Month" means a calendar month.  2975
       (Z) "Quarter" means the first three months, the second  2976
three months, the third three months, or the last three months  2977
of the taxpayer's taxable year.  2978
       (AA)(1) "Modified business income" means the business  2979
income included in a trust's Ohio taxable income after such  2980
taxable income is first reduced by the qualifying trust amount,  2981
if any.  2982
       (2) "Qualifying trust amount" of a trust means capital  2983
gains and losses from the sale, exchange, or other disposition  2984
of equity or ownership interests in, or debt obligations of, a  2985
qualifying investee to the extent included in the trust's Ohio  2986
taxable income, but only if the following requirements are  2987
satisfied:  2988
       (a) The book value of the qualifying investee's physical  2989
assets in this state and everywhere, as of the last day of the  2990
qualifying investee's fiscal or calendar year ending immediately  2991
prior to the date on which the trust recognizes the gain or  2992
loss, is available to the trust.  2993
Am. S. B. No. 423  Page 104
As Passed by the Senate
       (b) The requirements of section 5747.011 of the Revised  2994
Code are satisfied for the trust's taxable year in which the  2995
trust recognizes the gain or loss.  2996
       Any gain or loss that is not a qualifying trust amount is  2997
modified business income, qualifying investment income, or  2998
modified nonbusiness income, as the case may be.  2999
       (3) "Modified nonbusiness income" means a trust's Ohio  3000
taxable income other than modified business income, other than  3001
the qualifying trust amount, and other than qualifying  3002
investment income, as defined in section 5747.012 of the Revised  3003
Code, to the extent such qualifying investment income is not  3004
otherwise part of modified business income.  3005
       (4) "Modified Ohio taxable income" applies only to trusts,  3006
and means the sum of the amounts described in divisions (AA)(4)  3007
(a) to (c) of this section:  3008
       (a) The fraction, calculated under section 5747.013, and  3009
applying section 5747.231 of the Revised Code, multiplied by the  3010
sum of the following amounts:  3011
       (i) The trust's modified business income;  3012
       (ii) The trust's qualifying investment income, as defined  3013
in section 5747.012 of the Revised Code, but only to the extent  3014
the qualifying investment income does not otherwise constitute  3015
modified business income and does not otherwise constitute a  3016
qualifying trust amount.  3017
       (b) The qualifying trust amount multiplied by a fraction,  3018
the numerator of which is the sum of the book value of the  3019
qualifying investee's physical assets in this state on the last  3020
day of the qualifying investee's fiscal or calendar year ending  3021
immediately prior to the day on which the trust recognizes the  3022
Am. S. B. No. 423  Page 105
As Passed by the Senate
qualifying trust amount, and the denominator of which is the sum  3023
of the book value of the qualifying investee's total physical  3024
assets everywhere on the last day of the qualifying investee's  3025
fiscal or calendar year ending immediately prior to the day on  3026
which the trust recognizes the qualifying trust amount. If, for  3027
a taxable year, the trust recognizes a qualifying trust amount  3028
with respect to more than one qualifying investee, the amount  3029
described in division (AA)(4)(b) of this section shall equal the  3030
sum of the products so computed for each such qualifying  3031
investee.  3032
       (c)(i) With respect to a trust or portion of a trust that  3033
is a resident as ascertained in accordance with division (I)(3)  3034
(d) of this section, its modified nonbusiness income.  3035
       (ii) With respect to a trust or portion of a trust that is  3036
not a resident as ascertained in accordance with division (I)(3)  3037
(d) of this section, the amount of its modified nonbusiness  3038
income satisfying the descriptions in divisions (B)(2) to (5) of  3039
section 5747.20 of the Revised Code, except as otherwise  3040
provided in division (AA)(4)(c)(ii) of this section. With  3041
respect to a trust or portion of a trust that is not a resident  3042
as ascertained in accordance with division (I)(3)(d) of this  3043
section, the trust's portion of modified nonbusiness income  3044
recognized from the sale, exchange, or other disposition of a  3045
debt interest in or equity interest in a section 5747.212  3046
entity, as defined in section 5747.212 of the Revised Code,  3047
without regard to division (A) of that section, shall not be  3048
allocated to this state in accordance with section 5747.20 of  3049
the Revised Code but shall be apportioned to this state in  3050
accordance with division (B) of section 5747.212 of the Revised  3051
Code without regard to division (A) of that section.  3052
Am. S. B. No. 423  Page 106
As Passed by the Senate
       If the allocation and apportionment of a trust's income  3053
under divisions (AA)(4)(a) and (c) of this section do not fairly  3054
represent the modified Ohio taxable income of the trust in this  3055
state, the alternative methods described in division (C) of  3056
section 5747.21 of the Revised Code may be applied in the manner  3057
and to the same extent provided in that section.  3058
       (5)(a) Except as set forth in division (AA)(5)(b) of this  3059
section, "qualifying investee" means a person in which a trust  3060
has an equity or ownership interest, or a person or unit of  3061
government the debt obligations of either of which are owned by  3062
a trust. For the purposes of division (AA)(2)(a) of this section  3063
and for the purpose of computing the fraction described in  3064
division (AA)(4)(b) of this section, all of the following apply:  3065
       (i) If the qualifying investee is a member of a qualifying  3066
controlled group on the last day of the qualifying investee's  3067
fiscal or calendar year ending immediately prior to the date on  3068
which the trust recognizes the gain or loss, then "qualifying  3069
investee" includes all persons in the qualifying controlled  3070
group on such last day.  3071
       (ii) If the qualifying investee, or if the qualifying  3072
investee and any members of the qualifying controlled group of  3073
which the qualifying investee is a member on the last day of the  3074
qualifying investee's fiscal or calendar year ending immediately  3075
prior to the date on which the trust recognizes the gain or  3076
loss, separately or cumulatively own, directly or indirectly, on  3077
the last day of the qualifying investee's fiscal or calendar  3078
year ending immediately prior to the date on which the trust  3079
recognizes the qualifying trust amount, more than fifty per cent  3080
of the equity of a pass-through entity, then the qualifying  3081
investee and the other members are deemed to own the  3082
Am. S. B. No. 423  Page 107
As Passed by the Senate
proportionate share of the pass-through entity's physical assets  3083
which the pass-through entity directly or indirectly owns on the  3084
last day of the pass-through entity's calendar or fiscal year  3085
ending within or with the last day of the qualifying investee's  3086
fiscal or calendar year ending immediately prior to the date on  3087
which the trust recognizes the qualifying trust amount.  3088
       (iii) For the purposes of division (AA)(5)(a)(iii) of this  3089
section, "upper level pass-through entity" means a pass-through  3090
entity directly or indirectly owning any equity of another pass-  3091
through entity, and "lower level pass-through entity" means that  3092
other pass-through entity.  3093
       An upper level pass-through entity, whether or not it is  3094
also a qualifying investee, is deemed to own, on the last day of  3095
the upper level pass-through entity's calendar or fiscal year,  3096
the proportionate share of the lower level pass-through entity's  3097
physical assets that the lower level pass-through entity  3098
directly or indirectly owns on the last day of the lower level  3099
pass-through entity's calendar or fiscal year ending within or  3100
with the last day of the upper level pass-through entity's  3101
fiscal or calendar year. If the upper level pass-through entity  3102
directly and indirectly owns less than fifty per cent of the  3103
equity of the lower level pass-through entity on each day of the  3104
upper level pass-through entity's calendar or fiscal year in  3105
which or with which ends the calendar or fiscal year of the  3106
lower level pass-through entity and if, based upon clear and  3107
convincing evidence, complete information about the location and  3108
cost of the physical assets of the lower pass-through entity is  3109
not available to the upper level pass-through entity, then  3110
solely for purposes of ascertaining if a gain or loss  3111
constitutes a qualifying trust amount, the upper level pass-  3112
through entity shall be deemed as owning no equity of the lower  3113
Am. S. B. No. 423  Page 108
As Passed by the Senate
level pass-through entity for each day during the upper level  3114
pass-through entity's calendar or fiscal year in which or with  3115
which ends the lower level pass-through entity's calendar or  3116
fiscal year. Nothing in division (AA)(5)(a)(iii) of this section  3117
shall be construed to provide for any deduction or exclusion in  3118
computing any trust's Ohio taxable income.  3119
       (b) With respect to a trust that is not a resident for the  3120
taxable year and with respect to a part of a trust that is not a  3121
resident for the taxable year, "qualifying investee" for that  3122
taxable year does not include a C corporation if both of the  3123
following apply:  3124
       (i) During the taxable year the trust or part of the trust  3125
recognizes a gain or loss from the sale, exchange, or other  3126
disposition of equity or ownership interests in, or debt  3127
obligations of, the C corporation.  3128
       (ii) Such gain or loss constitutes nonbusiness income.  3129
       (6) "Available" means information is such that a person is  3130
able to learn of the information by the due date plus  3131
extensions, if any, for filing the return for the taxable year  3132
in which the trust recognizes the gain or loss.  3133
       (BB) "Qualifying controlled group" has the same meaning as  3134
in section 5733.04 of the Revised Code.  3135
       (CC) "Related member" has the same meaning as in section  3136
5733.042 of the Revised Code.  3137
       (DD)(1) For the purposes of division (DD) of this section:  3138
       (a) "Qualifying person" means any person other than a  3139
qualifying corporation.  3140
       (b) "Qualifying corporation" means any person classified  3141
Am. S. B. No. 423  Page 109
As Passed by the Senate
for federal income tax purposes as an association taxable as a  3142
corporation, except either of the following:  3143
        (i) A corporation that has made an election under  3144
subchapter S, chapter one, subtitle A, of the Internal Revenue  3145
Code for its taxable year ending within, or on the last day of,  3146
the investor's taxable year;  3147
        (ii) A subsidiary that is wholly owned by any corporation  3148
that has made an election under subchapter S, chapter one,  3149
subtitle A of the Internal Revenue Code for its taxable year  3150
ending within, or on the last day of, the investor's taxable  3151
year.  3152
        (2) For the purposes of this chapter, unless expressly  3153
stated otherwise, no qualifying person indirectly owns any asset  3154
directly or indirectly owned by any qualifying corporation.  3155
        (EE) For purposes of this chapter and Chapter 5751. of the  3156
Revised Code:  3157
        (1) "Trust" does not include a qualified pre-income tax  3158
trust.  3159
        (2) A "qualified pre-income tax trust" is any pre-income  3160
tax trust that makes a qualifying pre-income tax trust election  3161
as described in division (EE)(3) of this section.  3162
        (3) A "qualifying pre-income tax trust election" is an  3163
election by a pre-income tax trust to subject to the tax imposed  3164
by section 5751.02 of the Revised Code the pre-income tax trust  3165
and all pass-through entities of which the trust owns or  3166
controls, directly, indirectly, or constructively through  3167
related interests, five per cent or more of the ownership or  3168
equity interests. The trustee shall notify the tax commissioner  3169
in writing of the election on or before April 15, 2006. The  3170
Am. S. B. No. 423  Page 110
As Passed by the Senate
election, if timely made, shall be effective on and after  3171
January 1, 2006, and shall apply for all tax periods and tax  3172
years until revoked by the trustee of the trust.  3173
       (4) A "pre-income tax trust" is a trust that satisfies all  3174
of the following requirements:  3175
       (a) The document or instrument creating the trust was  3176
executed by the grantor before January 1, 1972;  3177
       (b) The trust became irrevocable upon the creation of the  3178
trust; and  3179
       (c) The grantor was domiciled in this state at the time  3180
the trust was created.  3181
       (FF) "Uniformed services" means all of the following:  3182
       (1) "Armed forces of the United States" as defined in  3183
section 5907.01 of the Revised Code;  3184
       (2) The commissioned corps of the national oceanic and  3185
atmospheric administration;  3186
       (3) The commissioned corps of the public health service.  3187
       (GG) "Taxable business income" means the amount by which  3188
an individual's business income that is included in federal  3189
adjusted gross income exceeds the amount of business income the  3190
individual is authorized to deduct under division (A)(28) of  3191
this section for the taxable year.  3192
       (HH) "Employer" does not include a franchisor with respect  3193
to the franchisor's relationship with a franchisee or an  3194
employee of a franchisee, unless the franchisor agrees to assume  3195
that role in writing or a court of competent jurisdiction  3196
determines that the franchisor exercises a type or degree of  3197
Am. S. B. No. 423  Page 111
As Passed by the Senate
control over the franchisee or the franchisee's employees that  3198
is not customarily exercised by a franchisor for the purpose of  3199
protecting the franchisor's trademark, brand, or both. For  3200
purposes of this division, "franchisor" and "franchisee" have  3201
the same meanings as in 16 C.F.R. 436.1.  3202
       (II) "Modified adjusted gross income" means Ohio adjusted  3203
gross income plus any amount deducted under divisions (A)(28)  3204
and (34) of this section for the taxable year.  3205
       (JJ) "Qualifying Ohio educator" means an individual who,  3206
for a taxable year, qualifies as an eligible educator, as that  3207
term is defined in section 62 of the Internal Revenue Code, and  3208
who holds a certificate, license, or permit described in Chapter  3209
3319. or section 3301.071 of the Revised Code.  3210
       (KK) "Professional employer organization," "professional  3211
employer organization agreement," and "professional employer  3212
organization reporting entity" have the same meanings as in  3213
section 4125.01 of the Revised Code.  3214
       (LL) "Alternate employer organization" and "alternate  3215
employer organization agreement" have the same meanings as in  3216
section 4133.01 of the Revised Code.  3217
       (MM) "Casino gaming" has the same meaning as in section  3218
3772.01 of the Revised Code, "lottery sports gaming" has the  3219
same meaning as in section 3770.23 of the Revised Code, "sports  3220
gaming" has the same meaning as in section 3775.01 of the  3221
Revised Code, and "video lottery terminal" has the same meaning  3222
as in section 3770.21 of the Revised Code.  3223
       (NN) "Employee" does not include a health care worker,  3224
with respect to a health care worker platform or health care  3225
facility for work booked through a health care worker platform,  3226
Am. S. B. No. 423  Page 112
As Passed by the Senate
in accordance with section 4113.87 of the Revised Code.  3227
       Section 2. That existing sections 4111.03, 4111.14,  3228
4113.15, 4121.01, 4123.01, 4141.01, and 5747.01 of the Revised  3229
Code are hereby repealed.  3230