OH SB326

Director of Budget and Management authorized to sell up to $1.25 billion in tax prepayment certificates to insurers, who prepay insurance premium taxes in exchange for future tax offsets.

Certificate holders earn vested offsets against future insurance premium tax liability equal to the prepaid amount, usable over a 10-year period beginning in the third year after purchase, with annual offsets not exceeding that year's tax liability.

Revenue from certificate sales, less manager costs of 150 basis points, deposits into a new Efficiency and Cost Reduction Fund to finance state agency and political subdivision projects certified by the Auditor of State as yielding efficiency gains or cost reductions with positive return on investment.

Certificates are transferable between insurers with 30-day notice to the Director, and unused offsets may be carried forward up to 10 years; if insurance premium tax is repealed or reduced, certificates may offset substitute tax liabilities.

Director may designate a manager through competitive bidding to configure, market, and sell certificates; manager must have prior experience with tax credit obligations, securities underwriting, minimum equity capital, and nationwide financing transactions.