OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 451 Bill Analysis
135th General Assembly
Click here for H.B. 451’s Fiscal Note
Version: As Introduced
Primary Sponsors: Reps. Wiggam and King
Effective date:
Carla Napolitano, Attorney
Zachary P. Bowerman, Attorney
SUMMARY
 Authorizes the Superintendent of Financial Institutions and the Director of Public Safety
to award grants to law enforcement agencies to defray costs related to undocumented
immigration, human trafficking, and drug trafficking.
 Funds the grants through a 7% remittance transfer fee imposed on licensed money
transmitters on international money transfers from a customer in Ohio to a person
outside of the United States.
 Requires the remittance transfer fee to be paid by the money transmitter to the Division
of Financial Institutions in the Department of Commerce on a quarterly basis.
 Authorizes the money transmitter to pass along the fee to its customers.
 Authorizes a refundable income tax credit for money transmitter customers who pay
the remittance transfer fee, up to $2,000 per year.
 Requires money transmitters to post a notice informing customers of their potential
eligibility for the tax credit.
DETAILED ANALYSIS
Overview
The bill imposes a fee on international transactions by money transmitters operating in
Ohio for the purpose of providing revenue in the form of grants to local law enforcement. Such
grants must be used to defray costs related to undocumented immigration, human trafficking,
and drug trafficking. The fee is imposed on money transmissions from a customer in Ohio to a
person outside of the U.S. Under the bill, this is called a “remittance transfer fee.” The money
transmitter is responsible for paying the remittance transfer fee but may pass it through to the
customer. If the money transmitter passes through the remittance transfer fee to the customer,
April 19, 2024
Office of Research and Drafting LSC Legislative Budget Office
the customer is eligible under the bill to claim a refundable income tax credit with respect to
the fee. The bill is named Ohio’s Withholding Illegal Revenue Entering Drug Markets (WIRED)
Act.1
Under continuing law, unchanged by the bill, money transmitters are overseen by the
Superintendent of Financial Institutions within the Department of Commerce (COM). Money
transmitters are any entity or person that is contracted “to receive, directly or indirectly and by
any means, money or its equivalent from a person and to deliver, pay, or make accessible, by
any means, method, manner or device, whether or not a payment instrument is used, the
money received or its equivalent to the same or another person, at the same or another time,
and at the same or another place.” Transactions in which the recipient of the money is the
principal or authorized representative of the principal in a transaction for which the money is
received are not considered a money transmission. All money transmitters are required to be
licensed by COM. Banks, credit unions, savings and loan institutions, and savings banks are
exempt from the license requirement and, therefore, would not be subject to the remittance
transfer fee.2
WIRED Fund
The bill creates the Withholding Illegal Revenue Entering Drug Markets (WIRED) Fund to
be administered by the Superintendent of Financial Institutions and the Director of Public
Safety. The Department of Public Safety must use the money in the WIRED Fund to award
grants to “law enforcement agencies” to defray costs incurred by those agencies related to
undocumented immigration, human trafficking, and drug trafficking. “Law enforcement
agency” is defined in the bill as an organized police department, sheriff’s office, or marshal’s
office of any county, municipal corporation, or township. The Director of Public Safety, in
consultation with the Superintendent of Financial Institutions, is authorized under the bill to
adopt rules to establish the guidelines for the grant program and for administering the fund.3
Remittance transfer fee
To provide revenue for the WIRED Fund, the bill imposes a 7% fee on money
transmissions from a customer in Ohio to a person outside of the U.S. For example, if the
customer sends $200 to a person in Mexico, there would be a $14 fee associated with the
transaction. The fee applies beginning on the first day of the first month that begins after the
bill’s 90-day effective date.
The bill allows a money transmitter to pass along the fee to its customers. However, any
money transmitter that does so must provide to the customer a receipt indicating the amount
1 Section 5.
2 R.C. 1315.01(G) and 1315.02(A), not in the bill.
3 R.C. 1315.131(D) and 5502.80.
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of the fee as a separate line item from any other amounts charged by the money transmitter in
connection with the transaction.4
Quarterly report and payment
The bill requires money transmitters, on a quarterly basis, to file a report of the money
transmitter’s transactions subject to the remittance transfer fee and pay the aggregate amount
due on all such transactions during the previous quarter to the Superintendent of Financial
Institutions. The report and fee must be submitted in a form and manner prescribed by the
Superintendent.5
Tax credit for money transmitter customers
A customer to which the fee was passed along may claim a refundable income tax credit
equal to the amount of such fees the customer paid during the year. Taking the example above,
if a customer transfers $200 internationally and, as part of the transaction, the money
transmitter requires the customer to pay the $14 fee, the customer can later claim a $14 tax
credit against their income tax liability, up to a maximum credit amount of $2,000 per year. If a
pass-through entity has paid the fees, the credit may be apportioned and claimed by the
entity’s investors, but the credit claimed by any particular investor may not exceed the $2,000
annual cap.
The credit is refundable, which means that any excess amount of credit may be
refunded to the customer if it reduces the customer’s tax liability below zero. The credit is not
available to money transmitters who pay the fee rather than pass it on to a customer. The Tax
Commissioner may require taxpayers to provide proof of eligibility for the credit, e.g., receipts
itemizing and verifying the amount of the fees paid.6
Annual report
The bill requires the Tax Commissioner, on or before July 30 of each year, to certify to
the Superintendent of Financial Institutions and the Director of Budget and Management the
amount of tax credits claimed in the preceding fiscal year. Within 15 days of that certification,
the Director is required to transfer that amount from the WIRED Fund to the GRF. This
mechanism essentially uses foreign remittance fee revenue to reimburse the GRF for amounts
forgone due to the refundable tax credit.7
Notice requirement
The bill requires money transmitters to post a notice informing customers of the tax
credit for any remittance transfer fee the customer pays. The Superintendent of Financial
4 R.C. 1315.131(A) and (B); Section 4.
5 R.C. 1315.131(C).
6 R.C. 5747.87(A) to (C) and 5747.98.
7 R.C. 5747.87(D).
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As Introduced
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Institutions will prescribe the form of the notice, and each money transmitter must
conspicuously post the notice in the transmitter’s place of business.8
State authority with respect to foreign commerce
Imposing a remittance transfer fee on international transactions may raise questions
under the Foreign Commerce Clause of the U.S. Constitution, which states, “The Congress shall
have Power . . . . To regulate Commerce with foreign Nations . . . .” The Foreign Commerce
Clause not only grants Congress authority over foreign commerce, it also directly limits the
power of the states to discriminate against foreign commerce.9 The U.S. Supreme Court has
held that for a state law that discriminates against foreign commerce to be upheld, the state
must show that “the discrimination is demonstrably justified by a valid factor unrelated to
economic protectionism.”10
HISTORY
Action Date
Introduced 03-20-24
ANHB0451IN-135/ks
8 R.C. 1315.131(E).
9 U.S. Constitution, Article I, Section 8, Clause 3; Emerson Elec. Co. v. Tracy, 90 Ohio St.3d 157 at 159-160
(2000).
10Kraft Gen. Foods v. Iowa Dep’t of Revenue & Fin., 505 U.S. 71 at 79 (1992) and Japan Line, Ltd. v.
County of Los Angeles, 441 U.S. 434 at 445-446 and 448-451 (1979).
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As Introduced


Statutes affected:
As Introduced: 5747.98