Tracked House Bills – April 2018

Chris Schmenk.
Bricker & Eckler LLP.

State Legal and Legislative Activity:

House Speaker to Resign Immediately: Ohio House Speaker Cliff Rosenberger announced April 12 that he was resigning from office effective immediately amid talk of an FBI investigation into his travel-related expenses and compliance with ethics laws.

Speaker Rosenberger, a term-limited Republican, said that while he believes all of his actions as speaker have been “ethical and lawful,” he understands the inquiry could take some time to resolve.  “Meanwhile, there are many important issues facing our state that deserve careful consideration and review, and Ohioans deserve elected leaders who are able to devote their full and undivided attention to these matters,” Rosenberger said in a statement.  Rosenberger told the Dayton Daily News on Friday that he hired Columbus attorney David Axelrod, a former federal prosecutor, “as a precautionary measure.” He said the FBI has been asking questions but has not subpoenaed him or told him he’s under investigation.

Speaker Rosenberger’s resignation now allows the House Republican caucus time to possibly elect his replacement this month.

State Capital Bill:  A $2.63 billion State Capital Bill for FY 2019-2020 was passed by the House March 7 and by the Senate March 21 as HB 529.  The bill was signed by the Governor March 30.

A list of funded community projects can be found at: https://www.lsc.ohio.gov/documents/budget/132/capital/projectsbycounty-communityprojectsonly.pdf

Early Voting: Early voting began April 10 for the May 8 Primary election.

Bills Being Tracked:  Changes from last month are noted below in bold

House Bills

HB 10 CROWDFUNDING  (Arndt, S.)  This bill would permit intrastate equity crowdfunding under certain circumstances.  The bill would provide an exemption from registration under the Ohio Securities Law for certain crowdfunding initiatives.  The bill passed in the House on June 21 and was referred in Senate to the Transportation, Commerce & Workforce Committee.  A fourth hearing occurred February 7 at which a substitute bill was offered which changes the culpable mental state for violations of the crowdfunding provisions from recklessly to knowingly. It also simplifies the process for pursuing civil remedies and clarifies the conditions a company must meet to qualify as an “OhioInvests Issuer.” The next Committee hearing is scheduled for April 18.

HB 53 UNION DUES/RIGHT TO WORK (Becker, J.) This bill is sponsored by Representative Pete Becker from Clermont County.  Co-sponsors include Representatives Hood, Brinkman, Dean, Thompson, Vitale, Goodman, Riedel, Roegner, Merrin, Antani, Zeltwanger and Keller.  It would remove any requirement under the Public Employees Collective Bargaining Law that public employees join or pay dues to any employee organization, prohibit public employers from requiring public employees to join or pay dues to any employee organization and prohibit an employee organization from being required to represent public employees who are not members of the employee organization.  The bill was referred to the House Finance Committee.  No hearings have yet occurred.

HB 102  SCHOOL FUNDING  (Brenner, A.)  This bill, referred to the House Finance Committee, would replace locally levied school district property taxes with a statewide property tax and require recipients of certain tax exemptions to reimburse the state for such levy revenue lost due to those exemptions.  It would also increase the state sales and use tax rates and allocate additional revenue to state education purposes; to repeal school district income taxes; require the Treasurer of State to issue general obligation bonds to refund certain school district debt obligations; create a new system of funding schools where the state pays a specified amount per student that each student may use to attend the public or chartered nonpublic school of the student’s choice, without the requirement of a local contribution; eliminate the School Facilities Commission; eliminate the Educational Choice Scholarship Pilot Program, Pilot Project Scholarship Program, Autism Scholarship Program, and Jon Peterson Special Needs Scholarship Program; eliminate interdistrict open enrollment; require educational service centers to transport students on a countywide basis, and permit school districts to enter into a memoranda of understanding for one district to manage another.  It was referred to the House Finance Committee, and a June 20 hearing was continued.  A second hearing occurred December 12.

HB 114 RENEWABLE ENERGY (Blessing, L.)    This bill is very similar to last year’s HB 554 except it would: convert the renewable energy standards to goals indefinitely, rather than for a two year period; permit residential customers of a distribution utility or electric services company to opt out of any rider, charge or other recovery mechanism designed to recoup the cost of renewable energy; clarify that renewables are bypassable charges, rather than nonbypassable charges, and specify that the 12.5% renewable energy goal to be attained by 2027 will end at that time and not continue indefinitely. The bill passed in the House March 30, 2017 and moved to the Senate, where it was referred to the Energy and Natural Resources Committee.  After stalling last fall, activity resumed on the bill January 10 with a fourth hearing featuring both proponent and opponent testimony.  Senate President Larry Obhof has apparently stated that he would like to see a Senate vote on this bill in January.

HB 122 ECONOMIC DEVELOPMENT (Hambley, S., Rogers, J.)  Introduced March 9, this bill would establish a Regional Economic Development Alliance Study Committee to study the benefits and challenges involved in creating regional economic development alliances. Senate Bill 97 is a companion to this bill and is the more likely bill to be approved by both chambers of the legislature.  The bill is relatively simple in that it creates a study committee to look at the pros and cons to establishing regional economic development alliances.  The committee is made up of 3 members of the House; 3 members of the Senate; the Governor, or his designee; 2 persons from academia engaged in a relevant field of study (appointed by the co-chairs of the committee); 2 economic development professionals (appointed by co-chairs of the committee); and the chair of the Regional Prosperity Initiative (or their designee) as a nonvoting member.  Specifically the committee is charged with studying enhancing collaboration for successful regional economic development; shared services; and also the mobilization of resources among alliance members. The committee is directed to consult with county commissioners, township trustees, city councils and mayors, members of statewide and regional organizations that represent political subdivision, and members of chambers of commerce.  The bill was reported out of House Committee May 10 and passed in the House September 13.  It was referred to the Senate Government Oversight & Reform Committee, where a fourth hearing occurred April 11, an amendment was accepted to add a representative from the Ohio Economic Development Association as an ex officio member of the study committee and the bill was passed by the Senate Committee.  The bill was then passed by the Senate, and the House concurred in the Senate’s amendments.

HB 155 COMMERCIAL VEHICLE TRAINING (Sprague, R., Howse, S.)  This bill would authorize a nonrefundable tax credit to be taken against either personal income tax or commercial activity tax liability for expenses incurred by an employer to train a commercial vehicle operator.  Under the proposed program, employers would submit to the Director of the Development Services Agency, by December 1, eligible training expenses expected to be incurred during the next calendar year. The ODSA Director would then certify up to $50,000 per employer of such expenses as being eligible for tax credits.  After incurring eligible training expenses, employers could then apply to ODSA for tax credits in amounts equal to one-half of the incurred eligible expenses.  On May 1, it was referred to the House Ways & Means Committee, where a hearing with sponsor’s testimony occurred May 16.

HB 166 WORKFORCE DEVELOPMENT  (Reineke, B., Cupp, R.)  This bill would revise the laws governing the state’s workforce development system. On March 7, 2018, a substitute bill was adopted by the House Higher Education & Workforce Committee that would categorize technical centers as higher education institutions, making them and their students eligible for state grant money.

HB 173 TAX CREDITS (LaTourette, S., Patton, T.)  This bill was introduced April 5, 2017 and would provide that compensation paid to certain home-based employees may be counted for purposes of an employer qualifying for and complying with the terms of a Job Creation Tax Credit.   It was referred on May 1 to the House Ways & Means Committee, and a first hearing with Sponsor’s testimony occurred May 9, 2017.

HB 178 NUCLEAR ENERGY (Devitis, T.)  This is a companion bill to SB 128 (see explanation there) and was introduced April 10.  It was referred to the House Public Utilities Committee, where several hearings have occurred. Sponsors in both chambers are continuing conversations with interested parties in order to earn support for these bills.  Representative Robert Cupp recently assumed the role as Chair of the House Public Utilities Committee and confirmed that talks are still ongoing.  Additionally, House Speaker Rosenberg recently appointed members to an ad hoc House task force charged with studying this bill and other energy issues in the coming months (Speaker’s Task Force on Energy Policy).

HB 203 SUMMER JOBS (Barnes, J.) This bill would require the Director of Development Services to establish a youth summer jobs pledging initiative to increase access to summer employment opportunities for high school and college youth.  On March 7, the Higher Education and Workforce Development Committee accepted an amendment that clarifies that the Development Services Agency director can accept grants and other contributions to assist with the effort.  A fourth hearing occurred April 11.

HB 281 BROADBAND EXPANSION (Carfagna, R.) This bill, introduced June 20, would establish the residential broadband expansion program within the Development Services Agency to award matching grants for last mile broadband expansion in municipal corporations and townships and to make an appropriation. It was referred to the House Finance Committee, where the first hearing with sponsor’s testimony occurred September 20, 2017.   Committee hearings also occurred November 28 and December 12, with a comprehensive substitute bill accepted December 12 that would offer more ways to fund the projects and remove funding ratio requirements. It also would reduce the speed of internet that must be available for an area to be considered “underserved” from 25 MBbs upload speed to 10 MBbs. The bill passed in House January 31, 2018 and was assigned to the Senate Finance Committee.

HB 292 OHIO RESIDENCY (Scherer, G.) This bill would modify the test for determining an individual’s state of residence for income tax purposes.  The bill would add to the requirements to prove out-of-state residency by requiring a showing that the applicant did not: 1) claim a federal depreciation deduction (which is available only for property used in business or held for the production of income — e.g., as rental property) for an abode located outside the state, which the person was required to have for the entire taxable year under current law; 2) hold a valid Ohio driver’s license or identification card; 3) receive the benefit of an Ohio homestead exemption or 4. receive a tuition discount based on residency for attending an Ohio institution of higher education.  The bill passed in the House November 1 and the Senate Ways and Means Committee amended the bill at its fourth hearing February 21 with two changes that were accepted without objection. The first, which was described as “largely technical,” changes the filing deadline for the homestead exemption from September of the impacted tax year to December of the year before. The second was described as a “belt-and-suspenders” amendment to clarify that the aggregation of common law domicile criteria only applies to that section of state law.  A fifth hearing occurred February 28.

HB 371  PROPERTY TAX (Merrin, D.) This bill, introduced October 4 would exempt from property taxation the increased value of land subdivided for residential development until construction commences or the land is sold.  The bill would benchmark an “ascribed taxable value” of the newly subdivided parcel, and any increase in taxable value would be exempt from taxation until either (1) Construction of a residential building on that property commences, or (2) Title to the property is transferred for consideration by a qualifying owner to another person.  The construction of streets, sidewalks, curbs, or driveways or the installation of water, sewer, or other utility lines on a subdivided parcel would not cause construction of a residential building to commence for purposes of the bill.  The bill was reported out of the Ways and Means Committee January 16, 2018 after being amended to reduce the maximum length of time for the exemption from 10 to eight years. The bill was reported on a 15-3 vote with Rep. Janine Boyd (D-Cleveland Hts.), Rep. Green and Rep. Steve Hambley (R-Brunswick) opposed.  On February 28, the bill was informally passed by the House, where a place was reserved for it on the House calendar.

HB 378 BROADBAND GRANTS (Smith, R., Cera, J.)  This bill would create the Ohio Broadband Development Grant Program to provide funds to extend broadband service to unserved areas of the state.  The program would be administered by the Ohio Development Services Agency.  The following entities could apply for a grant: (1) private businesses, (2) political subdivisions, (3) nonprofit entities organized to provide telecommunications services, and (4) co-ops organized to provide phone and Internet services.  Grant amounts cannot exceed the lesser of: (1) 50% of the total project cost, or (2) $5 million. Recipients could use funds to construct broadband infrastructure to serve unserved areas, including installing middle-mile or last-mile infrastructure, grant-project planning, obtaining construction permits, constructing facilities, purchasing equipment, and installing and testing the service.  The bill would appropriate $50 million per year for FYs 2018 and 2019 through the Third Frontier Research and Development Fund, to be used to award grants under the Program.  It would require $1 million of the appropriation in each fiscal year to be used to contract with one or more independent organizations that have experience working with Ohio broadband providers to collect and analyze state broadband data and do other activities regarding broadband service.  Seven hearings have occurred in the House Finance Committee and on March 6, the committee accepted an amendment that Rep. Scott Ryan (R-Newark) said encourages the director of the Department of Transportation to work with telecommunications providers to lay fiber optic cable in conjunction with state highway projects. The bill was passed by the House April 11.

HB 381 ZERO EMISSIONS (DeVitis, A.).  This is a third bill to propose the creation of a zero-emission nuclear credit program to benefit Ohio’s nuclear plants and is very similar to HB 178.  However, one of the major differences is new language capping a residential customer’s monthly nonbypassable charge at $2.50 and capping a nonresidential customer’s monthly charge to be the lesser of $3,500 or 5% of the total bill. It also downsizes the lifespan of the ZEN program – terminating the credits after 12 years on Dec. 31, 2030, unless extended by the General Assembly. HB178 would terminate the program after 16 years.  Other changes include requiring the Public Utilities Commission to conduct an inquiry in 2029 to determine if continuing the program is in the public interest, and removing language from HB178 requiring a PUCO evaluation during years six and 11 of the program.  It has been referred to the House Public Utilities Committee, where a first hearing occurred December 12.

HB 469 TAX CREDIT (Schuring, K., Patton, T.) This bill, introduced January 17 and referred to the House Government Accountability & Oversight Committee would authorize a nonrefundable insurance company tax credit for contributions of capital to transformational mixed use development projects. The bill defines “transformational mixed use developments” (TMUDs) as multiple-purpose developments in which (1) the estimated development costs associated with the project exceed $400 million, (2) have a development plan that includes at least one building that is 20 or more stories high, (3) are on a site upon which is seven acres or less, and (4) more than one intended “use” associated with the project site is proposed. The bill directly names retail, office, residential, hotel, recreation, and structured parking as potential uses that could be incorporated into a TMUD, but none of those uses is required and they are not the only uses that would qualify a project for the credit. Under the bill, the Development Services Agency Director must review and certify projects as eligible.  In doing so, the Director also must consider the potential impact of the project in terms of “architecture, accessibility to pedestrians, retail entertainment architecture, retail entertainment and dining sales, job creation, property values, connectivity, and revenue from sales, income, lodging, and property taxes.”  If the project is certified, the property owner may sell or transfer the rights to “preliminarily approved” tax credits to one or more insurance companies in order to raise capital for the project. Once the TMUD is complete, the Director must issue tax credit certificates to the property owner or to the insurance companies that acquired the rights to the credit.  Six hearings have occurred with the most recent on April 10, and a substitute bill was adopted which changes to the definition of a “transformational mixed-use development” in the measure.  The new definition means a development must have a transformational impact from a quarter mile to a mile around, include a building that is 15 stories or more and have a development cost exceeding $50 million.  It also must generate more new taxes than it would receive through the tax credit. Sponsor Rep. Kirk Schuring (R-Canton) said the change stems from discussions with the Ohio Municipal League and other groups to ensure the credit is available to more cities across the state.

HB 500 TOWNSHIP LAWS (Carfagna, R.)  Introduced February 13, this bill would make changes to various township laws.  Of particular interest to economic development professionals is a proposed change to township laws regarding the formation of new community authorities (NCAs) to remove the requirement that NCA areas be at least 1000 acres in size.  HB 500 would also require 100% compensation for any post 2006 Township fire and EMS levy effective rates for any new Township incentive district TIFs (tax increment financing) enacted after the effective date of HB 500, but only if the Trustees choose to require that 100% compensation.  Four hearings have occurred in the House State & Local Government Committee with the most recent being on April 10 where two amendments were accepted by the Committee.  Two amendments were accepted by the committee. The first narrows the legislation to apply only to limited home rule townships – a change that makes the bill applicable to only 32 townships rather than the prior 1,308 townships.  The second change was requested by the Ohio Fire Chiefs Association and removes language that had required townships to designate legal counsel rather than a private citizen to investigate fire chief conduct and removal proceedings.

HB 512 EDUCATION DEPARTMENT  (Reineke, B.)  Introduced February 14, this bill would combine the functions of the Departments of Education and Higher Education and the Governor’s Office of Workforce Transformation to create the Ohio Department of Learning and Achievement.  The new agency would be headed by a director appointed by the governor and confirmed by the Senate.  The bill also includes language to limit the State Board of Education’s authority to making quasi-judicial decisions on licensure, disciplinary actions and school charters. Members would also still have the authority to hire a superintendent of public instruction to lead their work.  The bill was referred to the Government Accountability & Oversight Committee where five hearings have occurred.  A substitute bill is apparently expected.

HB 519 TRANSPORTATION TECHNOLOGY  (West, T., Kick, D.)  This bill, introduced February 21 would create the Ohio Council on Transportation Technology to make recommendations regarding state policies related to autonomous technology.  The Council’s role would be to examine and evaluate methods and changes in state policy that will ensure that the state is the world leader in autonomous, driverless, and connected vehicle technology. They will also be charged with issuing a report with their recommendations no later than 1 year following the effective date of the bill.  It has been referred to the Transportation and Public Safety Committee.

HB 525 TAX CREDIT  (Schuring, K.)  This bill was introduced  extend eligibility for the motion picture tax credit to certain live stage theater productions, to increase the maximum amount of credits that may be awarded from $40 million to $100 million per fiscal year, and to make other revisions to the law governing administration of the credit.  It was referred to the House Government Accountability and Oversight Committee when 5 hearings have occurred and a substitute bill was approved April 11.

HB 576  MINIMUM WAGE  (Kelly, B.)  Introduced March 28, this bill would increase the state minimum wage to $12.00/hour beginning January 1, 2019 and would further increase the minimum wage at future designated dates.  On April 10, it was referred to the Government Accountability & Oversight Committee.