Tracked House Bills – February 2020

Chris Schmenk
Bricker & Eckler LLP

Federal News:  To address the COVID-19 pandemic, on March 6, Congress passed and President Trump signed into law an $8 billion emergency funding measure for government entities such as the Department of Health and Human Services, the Center for Disease Control and Prevention, the National Institute of Health, the Indian Health Service, and the Food and Drug Administration. This measure is intended to develop and purchase vaccines, medical supplies and products, as well as provide state and local governments with preparedness grants, training and other forms of assistance.  On March 13, Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin announced an agreement on a second bill entitled the “Families First Coronavirus Response Act” (HR 6021).  This legislation would provide free testing, paid emergency leave to qualified employees, increased Medicaid funding and expanded unemployment insurance, nutritional assistance and small business loans.  It may include the expansion of the Family Medical Leave Act (FMLA) to cover 14 days paid sick leave, then 10 additional weeks of FMLA leave paid at two-thirds the regular pay rate.  Currently, it is proposed that employers with less than 50 employees and greater than 500 employees be exempted.The Senate is expected to pass this bill any day, and the President has announced he will sign the bill into law.  Congress is working on a third bill to provide assistance towards the adverse economic impacts of the coronavirus, including targeted economic relief through grants, loans, tax incentives, or tax credits to affected industries.  It may include relief checks to individuals, similar to what was done in the wake of the 2008 financial crisis.

State News:  Ohio Governor Mike DeWine continues to lead the nation in proactive steps taken by state governors to fight the community spread of COVID-19.  As of March 18, he announced that in addition to previous orders banning mass gatherings, postponing the state’s primary election, closing private businesses including gyms, fitness facilities, movie theaters, bowling alleys and restaurants (excepting takeout and delivery services), the state’s Bureau of Motor Vehicle offices, barbershops, spas and hair/nail salons will now be closed.

There are also now 88 confirmed cases in 19 counties in the state of Ohio. Ages of those affected range from 2 years to 91 years with a median age of 45.5.  There are 33 females and 55 males, with 26 hospitalizations, 0 deaths and 10 cases in Central Ohio. The state’s medical experts are currently estimating the COVID peak may be around May 1, 2020.

Other updates from Governor DeWine included:

• Volunteers coming together across the state: 350 schools and similar facilities have opened their doors to provide meals to kids.
• COVID Testing: Testing capacity is limited and will likely remain limited.  Tests will be reserved for the sickest and most at risk, including healthcare workers and first responders.
• Actions to Stop the Spread:
  • At close of business March 18, 181 BMV locations will close. 5 will remain open to issue commercial driver’s licenses.  All other services will be online or will be paused.
  • 52 drivers examination locations will close and the General Assembly is being asked to pass legislation to allow a grace period for those who can’t renew their license before closure.  All law enforcement are being asked to not issue tickets if a person has an expired license.
  • At close of business March 18, all barbershops, hair salons, nail salons, spas, tattoo parlors and similar services will be closed.
  • Banks are not being asked to close, so there should not be a financial panic.
  • A recommendation that any Ohio business that still has employees coming to work should ask those employees to take their temperature before they come to work.
  • The National Guard will be helping hospitals erect tents to isolate and check patients and provide assistance to foodbanks.
• Unemployment: There have been 78,000 requests for unemployment this week; last week there were only 6,500 requests.

• SBA Assistance Requested:   Governor DeWine and Lt. Governor Husted sent an application to the U.S. Small Business Administration (SBA) to qualify Ohio for the Economic Injury Disaster Loan program. This will allow small businesses impacted by COVID-19 to apply for low-interest loans up to $2 million.

• The Ohio Development Services Agency (DSA) has asked all Ohio businesses to complete this Economic Damage Assessment Survey to help state government leaders develop response plans.
• Schools:  It is possible that students may not go back this school year.

General Assembly: Ohio lawmakers are expected to return to session the week of March 23 to consider issues regarding COVID-19, including the extension of voting for the primary election.

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

House Bills:

HB 7  WATER FUND  (Ghanbari, H., Patterson, J.)  This bill, introduced May 13, would create the H2Ohio Trust Fund for the protection and preservation of Ohio’s water quality, create the H2Ohio Advisory Council to disburse money from the Fund for water quality programs, and create the H2Ohio Endowment Board to make recommendations to the Treasurer of State regarding the issuance of securities to pay for costs related to the purposes of the Fund.  The bill authorizes the H2Ohio Advisory Council to disburse up to $50 million per fiscal year by issuing loans and awarding grants to applicants that apply for money to address water quality issues in Ohio. If Fund money is appropriated specifically to the Department of Natural Resources, Department of Agriculture, or the Environmental Protection Agency, it requires the Directors of those state agencies to each prepare an annual plan detailing how the money will be spent.  It also requires the Council to review and approve each agency’s annual plan before the agency may spend the appropriated money.  The bill was referred to the House Finance Committee where a substitute bill was approved on June 18. The revised bill passed in the House June 20 and would increase the cap on the annual disbursement of funds from $50 million to $100 million and eliminate the creation of the H2Ohio Advisory Council, instead vesting authority over the disbursements in the Ohio Water Development Authority.  It also included a provision allowing the Department of Natural Resources to establish a pilot program to study water withdrawals by using streamflow monitoring in Eastern Ohio and another provision which enables the Controlling Board to approve or deny an amount recommended by the director of the Office of Budget Management for year-end unspent balances. It has been referred to the Senate Finance Committee where a first hearing with sponsor testimony occurred October 22.

HB 13 BROADBAND (Carfagna, R., O’Brian, M.) Introduced May 16, this bill is based on a proposal that passed the House last year (HB 281, 132^nd GA) and would require the Development Services Agency (DSA) to establish the Residential Broadband Expansion (RBE) Program to provide grants to municipal corporations and townships (project sponsors) to help fund projects that provide broadband to any residential area within their boundaries that is without broadband (eligible area).  It excludes as an eligible area under the RBE Program, any area that has received, or is designated to receive, any other state or federally funded grants that are designed to encourage broadband deployment. The program would allow the Director of DSA to accept applications from project sponsors each fiscal year, review each application within 60 days, and fund applications on a first-come, first-served basis until all program funds for the fiscal year are awarded. Program funds, up to $2 Million per biennium, would come from currently-budgeted DSA funds.  It has been referred to the House Finance Committee where a third hearing occurred June 19.

HB 34   MINIMUM WAGE  (Kelly, B.)  This bill would increase the state minimum wage and allow municipalities, townships and counties to establish higher minimum wage requirements.  The bill has been referred to the House Commerce & Labor Committee, where initial hearings occurred January 22 and 23, 2020.

HB 48  ROAD IMPROVEMENT FUND  (Greenspan, D.)  This measure would provide for a new Local Government Road Improvement Fund for local governments to fund road improvements.  It has been referred to the Finance Committee.

HB 93  PUBLIC TRANSPORTATION (Skindell, M., Upchurch, T.)  Introduced February 21, in addition to any appropriations made for the 2020-2021 biennium, this bill would make additional appropriations related to public transportation in the amount of $100 million for public transportation and $50 million for the highway operating fund in both 2020 and 2021.  The bill has been referred to the House Finance Committee.

HB 98  LOAN FUND  (Jones, D., Cera, J.)  Similar to HB 695 introduced in the last General Assembly, this bill would reinstate the rural industrial park loan program under Ohio Development Services Agency, as detailed in ORC 122.23-.25, with an appropriation of $25 million.  The program would assist eligible applicants in financing the development and improvement of industrial parks by providing financial assistance in the form of loans and loan guarantees for land acquisition; constructing, reconstructing, rehabilitating, remodeling, renovating, enlarging, or improving industrial park buildings; and infrastructure improvements.  The bill has been assigned to the House Economic & Workforce Development where it had its first hearing March 27. The provisions of this bill were included in the signed Budget Bill (HB 166).

HB 116  TRANSPORTATION PLANNING  (Brinkman, T.)  Introduced March 4, in addition to any appropriations made for the 2020-2021 biennium, this bill would make additional appropriations related to transportation planning and research in the amount of $4.5 million for FY 2020 which shall be used to (1) study the Cincinnati Eastern Bypass Project, (2) review work done previously by the Kentucky Transportation Cabinet relative to the Brent Spence Bridge Project, and (3) make recommendations on moving forward with both projects cooperatively.  The bill has been referred to the House Finance Committee.

HB 149 TAX EXEMPTION (Merrin, D.)  Introduced March 19 and identical to HB 371 from the last General Assembly, this bill would amend ORC 5709.51 among other code sections and temporarily exempt from property tax 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, and the value of those improvements would thus automatically be exempted from taxation until construction of a residence begins or the property is sold.  The bill was referred to the House Economic and Workforce Development Committee, and its provisions were then included in the Conference Committee version of the state budget bill, HB 166.  However, after concerns were expressed by numerous local government groups including the Mid-Ohio Regional Planning Commission, the Ohio Library Council, the Ohio Association of School Board Officials, the Ohio Township Association, the County Commissioners Association and the County Auditors Association, Governor DeWine line-item vetoed the provisions of the bill.

HB 162 TAX CREDIT (Patton, T.)  This bill would increase the overall cap on the motion picture tax credit from $40 million per fiscal year to $100 million per fiscal biennium.  The bill has been referred to the Finance Committee.

HB 163 WATER/SEWER SERVICE (Brinkman, T.) This bill, introduced March 25, 2019 would create a process for withholding local government funds and state water and sewer assistance from municipal corporations that engage in certain water and sewer practices (for example, charging higher rates for nonresident customers) with respect to extraterritorial service.  The bill was referred to the House Public Utilities Committee, where 5 hearings have occurred.  On September 26, the committee accepted three amendments.  The first would specify that the civil action referenced in the bill is a declaratory judgment action.  The second would create a safe harbor for municipalities charging no more than 25% above rates charged to residents.  The third would final ensure the bill has no effect on existing contracts.  The bill had its sixth hearing January 29, 2020 during which an amendment was accepted that clarifies that nonresident rates that are no higher than 125% of residential rates are deemed to be reasonable.

HB 166 STATE BUDGET BILL (Oelslager, S.) This is the Biennial Budget Bill which was enacted July 18. 

HB 168 BONA FIDE PURCHASER (Arndt, S.)  This bill should assist with brownfield development by incorporating into Ohio law the federal Bona Fide Purchaser Defense (BFPD) established under CERCLA, which provides prospective buyers of contaminated property with an option to establish a defense to environmental liability after completing the All Appropriate Inquires and proper due diligence.  The bill passed the House May 30 and had its third hearing November 13, where an amendment was approved that would provide the director of the Ohio Environmental Protection Agency the ability to issue an order voiding a covenant not to sue if a property subject to institutional controls or use limitations fails to comply with those requirements.  A fourth hearing occurred December 4, and the bill was reported out of Committee.

HB 185 JOBSOHIO (Ingram, C.)  Introduced April 4, this bill would establish that records kept by JobsOhio are public records subject to inspection and copying under Ohio Public Records Law and to require all meetings of the JobsOhio Board of Directors to be open to the public, except when in an executive session.  It has been referred to the Economic and Workforce Development Committee where a first hearing occurred May 15.

HB 190 BROADBAND PROGRAM  (Smith, R.) This bill, introduced May 9 and identical to HB 378 which passed in the House during the 132^nd GA, 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 2020 and 2021 from the Facilities Establishment Fund, to be used to award grants under the Program.  It has been referred to the Finance Committee.

HB 218 PUBLIC-PRIVATE AGREEMENTS (Patton, T.) Introduced April 24, this bill would  authorize certain public bodies, including state agencies, state institutions of higher education, counties, townships, municipal corporations, school districts, community schools, STEM schools, college-preparatory boarding schools, library districts, and port authorities, to execute a public-private agreement (“PPA”) with a private party for the planning, acquisition, financing, development, design, construction, reconstruction, replacement, improvement, maintenance, management, repair, leasing, or operation of a “facility”.  “Facility” is defined to include a new or existing public building, public improvement, or public infrastructure used by a public body, by the public at large, in support of a public purpose, or for the delivery of services, and it must be owned by the public body or owned by the private party through a lease agreement under which the facility reverts to the public body upon expiration of the agreement.  A public body that has authority to issue bonds/obligations may issue them for the purpose of funding the development or financing of a facility under a PPA. A public body may accept a grant, loan, or other financial assistance from the United States or any of its agencies or may enter into agreements with the United States as necessary to fund the facility. A public body may also accept from any source any grant, donation, gift, or other form of conveyance of land, money, other real or personal property or other items of value, and the public body may use federal, state, local, and private funds to finance a facility. Finally, a facility may be financed in whole or in part by contribution of any funds or property made by any operator or an affected jurisdiction that is a party to a PPA.  The bill has been referred to the State and Local Government Committee where a second hearing occurred June 19.

HB 247 ELECTRIC SERVICE (Stein, D.) Introduced May 15, this bill would permit electric distribution utilities (EDUs) to offer customer-focused energy services or products, which may include energy efficiency, energy monitoring, electric vehicle charging stations, the installation and management of smart grid technology, and other items.  These products may be offered if either the PUCO has approved them under certain sections of the Ohio Revised Code or the products are optional, the EDU maintains separate accounting for the products, and the EDU does not include incremental costs directly related to the products in base distribution rates but instead recovers incremental costs through charges to customers who elect to subscribe to those services.  The bill would also allow an EDU’s electric security plan to include provisions for the EDU’s recovery of costs for the products and smart grid technology deployment, including lost revenue, shared savings, and avoided costs, and a just and reasonable rate of return on smart grid technology deployment.  Additionally, it would lift the corporate separation requirements that currently apply to the offering of a product or service other than retail electric service, effectively allowing an EDU to offer such a product or service directly, rather than through a fully separated affiliate.  

Finally, it authorizes nonbypassable electric riders for: (1) infrastructure development costs for state and local economic development projects and (2) facilities of mercantile customers that are locating or expanding in Ohio.  The bill grants an EDU timely recovery of infrastructure development costs necessary to support or enable a state or local economic development project, including any project approved, certified, or funded by “the agency” (presumably the Development Services Agency). The bill defines “infrastructure development costs” as any cost of infrastructure development, including, if applicable, an allowance for funds used during construction. The bill defines “infrastructure development” as the planning, development, and construction of substation facilities and extensions of transmission or distribution facilities that an EDU owns and operates and the performance of load studies.  The bill requires the EDU, before beginning the infrastructure development, to file a notice with the PUCO that contains all of the following:

• A description of the economic development project;
• A summary of the infrastructure development costs;
• A statement from the state or local entity involved that the infrastructure development is necessary to support or enable the economic development project.

The costs are to be recovered through a nonbypassable rider charged to all distribution customers regardless of whether the infrastructure development is used and useful at the time constructed. 

The bill also expands the definition of “smart grid” to include capital investment in equipment deployed in conjunction with an EDU’s distribution infrastructure that facilitates intelligent city designs, such as traffic sensors, infrastructure monitoring equipment, data management systems, and similar technology as well as the deployment, adaptation, replacement, or subsequent reinforcement of any technology that facilitates the storage, control, or delivery of electric energy.

A third hearing on the bill occurred October 23 in the House Public Utilities Committee, where opponent testimony was heard from the OMA, IGS, Direct Energy, ChargePoint, the Environmental Law & Policy Center, the Ohio Environmental Council, the Consumers Council, the  Retail Energy Supply Association and others. 

HB 255 TAX EXPENDITURES (Hoops, J.)  Introduced May 23, this bill would require the Tax Commissioner’s biennial tax expenditure report to include information on local property tax exemptions and to require the Tax Expenditure Review Committee to periodically review each such property tax exemption.  It has been referred to the Ways & Means Committee where a third hearing occurred January 28, 2020.

HB 264 INFRASTRUCTURE LOANS (Wilkin, S., O’Brien, M.)  Introduced May 28, this bill would authorize the Ohio Water Development Authority (OWDA) to make loans and grants to persons and government agencies for the refinancing of certain public water and waste water infrastructure projects.  The bill also authorizes the OWDA to issue water development revenue bonds and notes for the purpose of paying any part of refinancing of these projects.  The bill was passed by the House December 12 and now moves to the Senate.

HB 283  GRANT PROGRAM (Miller, A., Sweeney, B.) Introduced June 11, this bill would require JobsOhio to establish and administer the Competitive Global Air Service Development Grant Program. Under the program, JobsOhio would be required to:

• Provide grants to air carriers to support the establishment of new direct international and domestic air service to and from Ohio airports;
• Ensure that grants made under the program provide minimum revenue guarantees and marketing assistance to air carriers;
• Give priority consideration to air carriers that propose to establish new direct air service between Ohio and destinations located in the European Union or Japan;
• Establish eligibility requirements; and
• Prepare, and submit to the General Assembly, a written report not later than the last business day of January of each year detailing all aspects of the program occurring during the immediately preceding year.

The bill has been assigned to the House Economic and Workforce Development Committee.

HB 382 MUNICIPAL TAXES (Jordan, K.)  Introduced October 29, this bill would prohibit municipal corporations from levying an income tax on nonresidents’ compensation for personal services or on net profits from a sole proprietorship owned by a nonresident.

HB 386 TRUCK DRIVER STUDENTS (Hoops, J., Sobecki, L.) Introduced November 5, this bill would establish the Commercial Truck Driver Student Aid program and allocate funds for a grant and loan program to individuals seeking a Commercial Drivers License.  If students meet the eligibility requirements, they can receive a grant equal to one-half of the remaining state cost of attendance after the student’s federal Pell grant and expected family contribution are applied to instructional and general charges for the student’s enrollment in a certified commercial driver’s license school. They can also receive a loan in an amount equal to the grant, repayable if they do not complete the program and stay in Ohio for at least a year after completion.  It was referred to the Economic & Workforce Development Committee where a second hearing occurred February 12.

HB 401 WIND REGULATIONS (Reineke, B.)  Introduced November 6, this bill would apply to “economically significant wind farms” and would require inclusion of certain safety specifications in wind farm certificate applications to the Ohio Power Siting Board, would modify their wind turbine setback requirements and would permit a township referendum vote on these wind farm certificates issued by the Siting Board. The bill defines that term as already defined in ORC 4906.13, which is as follows:  “economically significant wind farm” means wind turbines and associated facilities with a single interconnection to the electrical grid and designed for, or capable of, operation at an aggregate capacity of five or more megawatts but less than fifty megawatts.” The term excludes any such wind farm in operation on June 24, 2008. The term also excludes one or more wind turbines and associated facilities that are primarily dedicated to providing electricity to a single customer at a single location and that are designed for, or capable of, operation at an aggregate capacity of less than twenty megawatts, as measured at the customer’s point of interconnection to the electrical grid.  If passed, the legislation would enable township residents by referendum to overturn a wind project already approved by the Ohio Power Siting Board. Amendments to approval certificates from the Power Siting Board for existing turbine projects would also be subject to potential referendum if they add more turbines, increase the height of a turbine or the diameter of a turbine tower’s base, or relocate any turbine. The bill also revises wind turbine setbacks with the distance to be equivalent to the manufacturer’s safety recommendations rather than current law which provides the greater of either 1.1 times total turbine height or at least 1,125 feet from the tip of the nearest blade to the property line of the nearest adjacent property.  The bill has been assigned to the House Energy & Natural Resources Committee, where a first hearing occurred November 13 and a second one is scheduled for November 19.  Senator Rob McColley has introduced companion Senate Bill 234.  A third hearing occurred December 3 at which lawmakers discussed possibly revising the bill to move a proposed township referendum process to the Power Siting Board.

HB 440 TAX EXEMPTION (Miranda, J., Carruthers, S.) Introduced December 9, this bill would authorize sales tax exemptions for property and services used to clean or maintain manufacturing machinery and for employment services used to operate manufacturing machinery.  It has been referred to the Ways & Means Committee where an initial hearing occurred January 28.

HB 507 TAX LIENS (Manning, D.)   Introduced February 13, this bill would prohibit enforcement of delinquent property tax liens against owner-occupied homesteads and require that any delinquent tax be paid before the title to a homestead may be transferred. The bill has been referred to the Ways and Means Committee.

HB 523 LOAN PROGRAM (Patterson, J., Carfagna, R.)  Introduced February 21, this bill would establish the STEM Degree Loan Repayment Program, providing a refundable tax credit for employers who make payments on student loans obtained by graduates to earn a STEM degree.  The bill was referred to the House Finance Committee March 10.

HB 531 JOBSOHIO (Rogers, J.) Introduced March 3, this bill would establish that JobsOhio must submit to audits by the Auditor of State, and that an audit of JobsOhio must include an audit of the revenues, receipts, and expenditures of JobsOhio associated with the enterprise acquisition project.  The bill has been referred to the House State & Local Government Committee.