Tracked House Bills – February 2021
Bricker & Eckler LLP
State Budget introduced by Governor DeWine: On February 1, the DeWine Administration introduced its executive budget plan for State Fiscal Years 2022 – 2023, to be considered by the Ohio General Assembly. With planned expenditures of $85.76B in SFY 2022 and $85.81B in SFY 2023, the budget neither proposes an increase in taxes (other than a $10 fee increase to register motor vehicles), deploying the state’s $2.69B rainy day fund, nor a significant reduction in spending. The biennial budget is somewhat “normal” in most respects, despite the current circumstances, because one-time resources – such as the federal government’s assumption of a greater share of the state’s Medicaid spending (approximately $300MM in federal assistance each calendar quarter) – are being utilized.
The budget is pending an Ohio General Assembly legislative bill assignment.
The budget plan includes $1B in one-time spending by the state to address the impacts of the COVID-19 public health emergency:
- $460MM for small business relief, including: $200MM in grants for bars and restaurants, $50MM for grants for lodging industry businesses, $40MM for indoor entertainment venues; and $20MM for new businesses that started in 2020.
- Enhanced services to minority businesses
- $200MM for “Ohio Community” infrastructure projects such as drinking water infrastructure improvements, preparing job ready sites, and blighted property removal
- $250MM for expanding broadband access
- $50MM to promote the state by “telling Ohio’s story to the rest of the country”
Ohio’s tax exemptions forego more than $9B/year in lost revenue: According to a formal report published by the state’s Tax Expenditure Review Committee, the state will forego an estimated $9.16B in State Fiscal Year 2022 and $9.54B in SFY 2023 under 138 exemptions and credits available under Ohio law. These estimates represent an increase over similar tallies in recent years. Such reports are required to be published along with the Governor’s executive budget proposals.
Exemptions of sales and use taxes comprise the largest portion of the expenditures ($5.94B in SFY 2022 and $6.16B in SFY 2023, or 65% of each respective year’s costs of foregone revenue).
Other so-called tax expenditures (i.e., foregone revenue) include:
- Income tax – $2.3B (SFY ’22)
- Commercial Activity Tax (CAT) – $693.5MM (SFY ’22)
- Public Utility Excise Tax – $108.8MM (SFY ’22)
- Insurance Premium Tax – $47.7MM (SFY ’22)
- Financial Institutions Tax – $19.9MM in both SFY ’22 and ‘23.
Established by the 131st General Assembly, the Tax Expenditure Review Committee is required to review all tax expenditures during an eight-year period, with reporting deadlines set for July 1 each even-numbered year. (Note the 2020-required report was delayed by the COVID-19 pandemic. That said, the Committee has suffered since its inception from a lack of attention or a sense of urgency by the legislature.)
House Bill 6 legislative repeal measures multiply like rabbits: No less than five (5) bills have been introduced thus far in the General Assembly’s two chambers to repeal elements of House Bill 6’s nuclear plant subsidies. Specifically, HB 10, HB 18, HB 57, SB 10, and SB 44 – all described in more detail, below – have been introduced early in the 134th General Assembly to remove elements of now-tainted HB 6 enacted during the previous session.
For the Senate’s part, President Matt Huffman (R-Lima) desires relatively quick action to resolve the HB6 dilemma, with his preferred approach to make a value judgment as to each provision of HB 6 separately, rather than pursue a larger comprehensive repeal plan.
New Round of COVID Relief: House Democrats are drafting a new COVID-19 relief bill modeled after President Biden’s proposed $1.9T in federal response announced in January. A floor vote in the U.S. House is expected next week (the week of Feb. 22.); Congressional leaders are intending for the final bill to be signed by President Biden in early March.
As of this report, the Biden plan – via the House – includes an extension of unemployment benefits through September 2021, $1,400 direct payments to individuals (which will phase out slowly for individuals earning more than $75,000, and checks are limited to households earning less than $200,000), and providing $350B in revenue replacement aid to state and local governments.
An alternate $618B plan was presented February 1 by a group of ten Republican senators to lower the direct payments to $1,000 (to persons making less than $50,000/year), extend federal unemployment insurance to June (not September), and removing the revenue replacement for state and local governments.
In the midst of this negotiation, the nonpartisan Congressional Budget Office projected on February 1 the nation’s economy likely would return to its pre-COVID size by the middle of 2021, even if Congress was not to approve this additional round of pandemic relief. That said, the same report noted the national economy could absorb substantial new federal assistance without impact on inflation or causing the Federal Reserve to increase interest rates on borrowing. The positive outlook stems from the CBO determining that large sectors of the nation’s economy adapted better and more rapidly to the pandemic than original expected. Further, these projections saw benefit to the $900B relief package passed in late December, which included $600/person direct payments distributed and extended unemployment benefits.
Relatedly, Federal Reserve Bank officials have stated they will maintain current interest rates at near 0% and continue buying government-backed debt to stoke growth.
PENDING LEGISLATION IN THE 134TH GENERAL ASSEMBLY
HB 2 BROADBAND SERVICES (Carfagna, R., Stewart, B.) Introduced on February 4, 2021, this bill concerns broadband expansion, including access to electric cooperative easements and facilities. Note the companion Senate Bill 8 in the upper chamber. This bill already has been heard twice by the House Finance Committee, with sponsor Rep. Rick Carfagna (R – Genoa Township) calling this repeat measure of House Bill 13 (133rd General Assembly) a “labor of love” as 300,000 households in Ohio lack adequate broadband access. This measure is scheduled for two House Finance Committee hearings the week of February 15.
HB 10 UTILITY LAWS (Leland, D.) Introduced by the House Democrats on February 4, 2021, this bill makes changes regarding electric utility service law, to allow the implementation of energy waste reduction programs, and to repeal certain provisions of H.B. 6 of the 133rd General Assembly. Sponsor Rep. David Leland (D-Columbus) seeks to repeal and refund HB 6’s subsidies as well as the decoupling charges. This measure is scheduled for its first hearing in the House Public Utilities Committee on February 17.
HB 18 ENERGY LAW REPEAL (Lanese, L.) Introduced on February 4, 2021, this bill seeks to repeal the changes made by H.B. 6 of the 133rd General Assembly to the laws governing electric service, renewable energy, and energy efficiency and the changes made to other related laws. This measure is scheduled for its first hearing in the House Public Utilities Committee on February 17.
HB 43 PUBLIC MEETINGS (Sobecki, L., Hoops, J.) Introduced on February 4, 2021, this bill seeks to permanently authorize public bodies to meet via teleconference and video conference beyond the currently July 1, 2021 sunset. The House Government Oversight Committee heard this measure for the first time on February 11.
HB 47 CHARGING STATIONS (Loychik, M.) Introduced on February 4, 2021, this bill requires the Director of ODOT to establish an electric vehicle charging station grant rebate program and to make an appropriation. Note the companion Senate Bill 32 in the upper chamber. This bill has been referred to the House Transportation & Public Safety Committee.
HB 53 CONTRACT LIMITATIONS (Hillyer, B.) Introduced on February 4, 2021, this bill seeks to shorten the period of limitations for actions upon a contract; to make changes to the borrowing statute pertaining to applicable periods of limitations; and to establish a statute of repose for a legal malpractice action. Note the companion Senate Bill 13 in the upper chamber. This bill has been referred to the House Civil Justice Committee.
HB 57 ENERGY REPEAL (Skindell, M., O’Brien, M.) Introduced on February 4, 2021, this bill seeks to repeal the changes made by H.B. 6 of the 133rd General Assembly to the laws governing electric service, renewable energy, and energy efficiency. This measure is scheduled for its hearing in the House Public Utilities Committee on February 17.
HB 63 EMINENT DOMAIN (Cutrona, A., Stoltzfus, R.) This bill will amend the law regarding eminent domain and to declare an emergency. During sponsor testimony on February 9 to the House Civil Justice Committee, Rep. Reggie Stoltzfus (R – Paris Twp.) noted the bill allows residents impacted by eminent domain to seek relief from township trustees, rather than via court procedures.
HB 66 PROPERTY TAX EXEMPTIONS (Hoops, J.) Introduced on February 4, 2021, this bill requires the reporting of information on and legislative review of property tax exemptions. This bill had its first hearing in the House Ways & Means Committee on February 9, with the sponsor, Rep. Jim Hoops (R – Napoleon), noting this would require the Ohio Tax Commissioner’s biennial tax expenditure report to include data pertaining to local property tax exemption programs.
HB 74 TRANSPORTATION BUDGET (Oelslager, S.) Introduced February 9, 2021, this bill is the state’s two-year transportation budget (State Fiscal Years 2022 and 2023). Proposed by the DeWine Administration, this budget includes $3.5B in expenditures during SFY 2022 (4% increase) $3.3B in SFY 2023 (8% decrease).
During testimony to the House Finance Committee on February 9, ODOT Director Jack Marchbanks stated the recent 10 ½ cent increase in the motor fuel tax enabled ODOT to withstand disruption caused by the COVID-19 pandemic (despite the projected loss of $200MM during 2020 due to decreased traffic volumes). This bill is scheduled for its next committee hearing on February 17.
HB 91 PUBLIC FACILITY PARTNERSHIPS (Patton, T.) Introduced on February 9, 2021, this bill would authorize certain public entities to enter into public-private initiatives with a private party through a public-private agreement regarding public facilities. This bill has been referred to the House Infrastructure & Rural Development Committee.
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