718.60 Municipal income tax net operating loss review committee.

(A) There is hereby created the municipal income tax net operating loss review committee for the purpose of evaluating and quantifying the potential fiscal impact to municipal corporations levying an income tax of requiring such municipal corporations to allow taxpayers to carry forward net operating losses for five years. The committee is a public body for the purposes of section 121.22 of the Revised Code.

(B) The committee shall be composed of the following members:

(1) Two members of the house of representatives who are not of the same political party, appointed by the speaker of the house of representatives;

(2) Two members of the senate who are not of the same political party, appointed by the president of the senate;

(3) Three members representing municipal income taxpayers, appointed by the speaker of the house of representatives;

(4) Three members representing municipal corporations that levy an income tax in calendar year 2016, appointed by the president of the senate. At least two of the members appointed under division (B)(4) of this section shall represent municipal corporations that do not allow taxpayers to carry forward net operating losses to future taxable years.

(5) One member appointed by the governor, who shall serve as the chairperson of the committee.

An appointed member shall serve until the member resigns or is removed by the member's appointing authority. Vacancies shall be filled in the same manner as original appointments. A vacancy on the committee does not impair the right of the other members to exercise all the functions of the committee.

The committee shall meet at the call of the chairperson. The presence of a majority of the members of the committee constitutes a quorum for the conduct of business of the committee. The concurrence of at least a majority of the members of the committee is necessary to approve the report issued by the committee under division (D) of this section. Members of the committee shall not be compensated or reimbursed for members' expenses.

(C)

(1) As used in this section, "reporting municipal corporation" means any municipal corporation that does not allow net operating losses incurred before January 1, 2017, to be carried forward and utilized to offset income or net profit generated in such municipal corporation in future taxable years.

(2) On or before August 31, 2021, each reporting municipal corporation shall report to the municipal income tax net operating loss review committee the difference between (a) the municipal corporation's actual municipal income tax revenue received for taxable years ending in 2018 and 2019 and (b) the projected amount of municipal income tax revenue that the municipal corporation would have received for taxable years ending in 2018 and 2019 if the municipal corporation were not required to allow net operating losses incurred in prior taxable years to be carried forward to taxable years ending in 2018 or 2019. Each municipal corporation's calculations shall be made using the microsimulation model adopted by the committee at its meeting on May 5, 2016, but applied to taxable years ending in 2018 and 2019.

(D) The municipal income tax net operating loss review committee shall review the information reported by municipal corporations under division (C) of this section and calculate the total of the revenue effects reported by such municipal corporations. On or before May 1, 2022, the committee shall issue a written report to the speaker and minority leader of the house of representatives and the president and minority leader of the senate reporting the committee's findings and the estimated revenue impact of requiring municipal corporations levying an income tax to allow net operating loss to be carried forward for five years. The report shall contain recommendations to address revenue shortfalls, which may include, but which shall not be limited to, the use of supplemental funds from the local government fund to mitigate those shortfalls.

(E) Nothing in this section delays or otherwise affects the taxable years to which division (D)(3) of section 718.01 of the Revised Code applies as prescribed in that division.

(F) The municipal income tax net operating loss review committee shall cease to exist on May 1, 2022.

Cite as R.C. § 718.60

Amended by 132nd General Assembly File No. TBD, HB 49, §101.01, eff. 9/29/2017.

Added by 131st General Assembly File No. TBD, SB 235, §1, eff. 3/28/2017.

Related Legislative Provision: See 132nd General Assembly File No. TBD, HB 49, §803.100.