Tracked House Bills – January 2022
Bricker & Eckler LLP
Final Rule released for local governments’ use of ARPA funds: On January 6, the U.S. Treasury issued its 437-page Final Rule on the use of ARPA – Local Fiscal Recovery Funds. The Treasury published a high-quality overview describing its new guidance.
But which form of guidance to follow? Interim Rule or Final Rule? Treasury states that its Final Rule takes effect on April 1, 2022; prior to that date, “recipients may take actions and use funds in a manner consistent with the final rule, and Treasury will not take action to enforce the interim final rule if a use of funds is consistent with the terms of the final rule, regardless of when the [Local Fiscal Recovery Funds] were used” (U.S. Treasury, Statement Regarding Compliance with the Coronavirus State & Local Fiscal Recovery Funds Interim Final Rule and Final Rule, Jan. 2022, at page 1).
Some noteworthy items in the Final Rule include:
Under the 1st bucket of use (responding to the COVID-19 emergency), the Treasury has set forth the fundamental criteria for assessing uses of funds: a two-part framework. Namely, (1) there must be a negative public health or economic impact resulting from or exacerbated by COVID; and (2) the local government’s response must be designed to address the identified health impact, which such response must be “reasonably proportional” (i.e., the scale of the response as compared to the scale of the harm). (See 31 CFR 35.6(b)(1))
Capital projects may be funded under this approach, so long as they, too, satisfy the two-part framework. And, if such capital projects are more than $1M in size, the local government must comply with heightened justification and reporting protocols. On January 14, Bricker published an article on this subject.
Under the 3rd bucket of use (provision of government services), the Treasury presumes up to $10 million in revenue has been lost by each local government due to the public health emergency; recipients are permitted to use up to that amount (not to exceed their respective awards) to fund “government services”. In turn, Treasury defines government services generally as “services provided by the recipient governments… unless Treasury has stated otherwise”.
But such broad swath of activities remain subject to the Final Rule’s Restrictions on Use, which are applicable to every ARPA dollar spent.
Under the 4th bucket of use (necessary investment in water, sewer, and broadband), the Treasury has expanded the breadth of eligible projects, to include specific call-out for lead line replacement of water pipes, dams and reservoirs, and cybersecurity investments.
General components applicable to every ARPA dollar spent:
Local governments must encumber their ARPA funds under any of the uses (including capital projects) no later than December 31, 2024, with full pay-out on such encumbrances (i.e., purchase orders) by December 31, 2026.
Treasury maintains its position that federal Davis-Bacon Act wage requirements are inapplicable to projects whose federal funding is comprised solely with ARPA – Local Fiscal Recovery Funds (although, if a state has a prevailing wage law – and Ohio does – that state’s prevailing wage requirements still apply).
Treasury makes clear the distinction between “subrecipients” (entities to which are transferred the local government’s ARPA funds to carry out programs or services) and “beneficiaries” (those assisted by ARPA funds from the local government). (See Final Rule, Supplementary Information, at pages 208 – 211)
If choosing to make loans with ARPA funds (such as seeding a RLF), Treasury has provided additional narrative as to how to treat such loans made. It matters whether such loans mature (i.e., are fully paid off) before or after December 31, 2026. (See Final Rule, Supplementary Information, at pages 366- 368)
State Capital Bill requests to be due by March 18 to your legislators: We now know of the timeline set by the General Assembly and Governor DeWine’s Administration for the capital budget for 2022. In December, Senate Finance Committee Chair Matt Dolan (R-Chagrin Falls) announced the plan to (i) complete the capital re-appropriations budget by March 31 of funding already authorized projects and (ii) appropriations for new capital projects are to be due to state legislators by March 18. For new projects, legislators will submit their priorities by April 1.
Traditionally, Ohio adopts a capital budget in even-numbered years, providing funding for state capital projects and community projects.
Although the General Assembly scheduled a spring break for the May primary from mid-April to early May, Bricker anticipates the Legislature will move quickly on the capital budget during spring 2022.
134TH GENERAL ASSEMBLY – PROPOSED & ENACTED LEGISLATION
(Changes from last month are noted in BOLD):
HR 19 INFRASTRUCTURE BANK (Sobecki, L., Stephens, J.) This resolution urges Congress to create a National Infrastructure Bank to finance urgently needed infrastructure projects.
During sponsor testimony on February 24 in the House Infrastructure & Rural Development Committee, sponsor Rep. Jason Stephens (R-Kitts Hill) noted this resolution is in response to state and local governments’ need for a source of low-interest loans to address infrastructure issues.
HR 35 PROPERTY TAX COMMITTEE (Troy, D.) This resolution seeks to authorize the creation of the temporary House Select Committee on Property Tax Education and Reform. The 10-member Committee would provide the Ohio General Assembly with a better understanding of the history and purpose of Ohio’s property tax laws, and would include a review of exemptions to property taxes. The resolution had its first hearing before the House Ways & Means Committee on May 18, 2021.
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 SB 8 in the upper chamber. Note further this legislation was dropped into the State’s biennial budget bill – HB 110 – via action by the House Finance Committee on April 13.
This bill quickly cleared the House Finance Committee, where Sponsor Rep. Rick Carfagna (R – Genoa Township) called this repeat measure of House Bill 13 (133rd General Assembly) a “labor of love” as approximately 1 million Ohioans lack access to reliable broadband.
The bill establishes the Ohio Residential Broadband Expansion Grant Program (R.C. 122.40 et seq.), to be housed within ODOD, providing funds to broadband providers that otherwise would not pursue expansion in certain areas of Ohio without such support. Specifically, this will provides ODOD-vetted grants to cover broadband providers’ costs of providing hard-to-reach, last-mile connectivity.
The Committee adopted an amended bill that increased funding for the proposed program ($20MM in State Fiscal Year 2021 (i.e., current budget period); $170 MM in SFY 2022; and $20MM in SFY 2023). Specifically, the Committee added two (2) amendments: (1) using $150MM of the Governor’s proposed $290MM in broadband spending to arrive at the SFY 2022 appropriation ($170MM), while keeping the SFY 2023 appropriation as originally proposed ($20MM); and (2) inserting an emergency clause.
On February 18, the legislation cleared the House (88-5 vote).
On March 23, the Senate Financial Institutions & Technology Committee heard testimony suggesting changes to the measure, including: (1) AEP Ohio requesting that electric distribution utilities be allowed to apply to the ODOD for grant funds; and (2) both the Ohio Economic Development Association and AARP requesting that governmental entities be allowed to apply for grant funds (the statewide economic development organization noted, “Ohio needs an ‘all hands on deck’ solution” to close the digital divide).
On April 27, the Senate Committee unanimously reported out the bill, which then passed unanimously via floor vote on April 28. Amendments made by the Committee included stripping out funding for State Fiscal Year 2022 ($170MM) and SFY 2023 ($20MM), as those appropriations now are included in the state operating budget (HB 110). Thus, funding in this bill for SFY 2021 is $20MM (to be available immediately), sourced from ODOD’s Facilities Establishment Fund rather than the state’s General Revenue Fund. Administratively, one of the amendments creates a stand-alone fund account – the Residential Broadband Expansion Grant Program Fund – thereby enabling the fund to hold any other appropriations from the General Assembly that may be made in the future.
The measure, which includes an emergency clause, cleared the House’s concurrence vote on May 5, 2021. The bill was signed into law by the Governor on May 17, 2021; now signed, ODOD can immediately commence the Ohio Residential Broadband Expansion Program.
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 had its first hearing on February 17 in the House Public Utilities Committee.
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 had its first hearing on February 17 in the House Public Utilities Committee.
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 SB 32 in the upper chamber. This bill had its fourth hearing in the House Transportation & Public Safety Committee on June 22.
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 SB 13 in the upper chamber, which was signed into law on March 16, 2021. 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 had its first hearing on February 17 in the House Public Utilities Committee.
HB 58 UTILITY EARNINGS (Skindell, M., Denson, S.) Introduced on February 4, 2021, this bill pertains to the significantly excessive earnings determination for an electric distribution utility’s electric security plan. Note the similar HB 128 as well as SB 44 in the upper chamber. This House version introduced by Rep. Michael Skindell (D-Lakewood) and Rep. Sedrick Denson (D-Cincinnati) would not impact decoupling. This measure had its first hearing on February 17 in the House Public Utilities Committee.
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 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. This bill had its second hearing in the House Civil Justice Committee on March 2.
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 would require the Ohio Tax Commissioner’s biennial tax expenditure report to include data pertaining to local property tax exemption programs.
This measure passed the House on March 3 by unanimous vote. The matter had its third hearing before the Senate Ways & Means Committee on October 19, during which an amendment was accepted to eliminate any reference to the Tax Expenditure Review Committee, which no longer exists.
HB 74 TRANSPORTATION BUDGET (Oelslager, S.) Introduced February 9, 2021, this bill is the state’s $8.3B two-year transportation budget (State Fiscal Years 2022 and 2023).
The House Finance Committee in late February and early March accepted several changes to the initially proposed transportation budget. The provisions of the substitute bill include the following:
- More funding for public transit. Doubles the proposed investment for public transit to $193.7MM during the biennium
- Removed distracted driving language. All distracted driving provisions were remove from the as-introduced bill’s provisions; these had been a priority for Governor DeWine
- Dedicated funding for RTPOs. Regional Transportation Planning Organizations (RTPOs) would be allocated $2.6MM/year rural transportation planning grant programs
The House Finance Committee cleared the bill on March 3, with the entire Ohio House approving it by an 87-8 vote on March 4.
On March 24, the Senate Transportation Committee reported out the bill, and the entire Senate passed the measure by unanimous vote. (The House concurred on an 86-8 vote.) The bill was signed into law by Governor DeWine on March 31; there were no line-item vetoes. The appropriations go into effect immediately; the law change provisions go into effect 90 days hence. In its final form, the bill provided the following:
- Increases State GRF for public transit by $13.85MM each year, thus totaling $37 MM for State Fiscal Year 2022 and SFY 2023;
- Allows for state’s driver’s license renewal on an eight-year cycle, including online renewal options;
- Requires ODOT to reopen certain closed weigh stations as overnight parking for commercial vehicles;
- Makes the Cleveland metro’s RTA’s rail projects eligible for ODOT’s TRAC funding process;
- Increases capital appropriations for the Public Works Commission’s Local Public Infrastructure by $2MM; and,
- Directs OEPA to use $8MM from Volkswagen Clean Air Act Settlement for electronic vehicle charging station grant program.
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 had its third hearing on September 29 in the House Infrastructure & Rural Development Committee, intended for opponent testimony; none was heard.
HB 110 BUDGET BILL (Oelslager, S.) Introduced on February 16, 2021, this bill was the legislative vehicle for Governor Mike DeWine’s executive budget proposal. The measure was helmed by the bill’s sponsor, Rep. Scott Oelslager (R-Canton). As widely reported, and detailed in prior months’ Bricker reports, the state budget bill gained and lost various provisions during budget negotiations.
In the late evening of Wednesday, June 30 (after having received the final, signed bill at 7pm that night), Governor DeWine signed the budget bill into law. The final enacted version had elements of particular interest to economic developers, which are described below.
Substantive Law Changes
- ODSA reverts back to its historic Ohio Department of Development name;
- Transfers compliance responsibilities from the Ohio Attorney General to the Auditor of State as to recipients’ compliance with state economic development awards (new R.C. 117.55);
- Creates within ODOD a Brownfield Remediation Program (newC. 122.6511), with project eligibility to be set via administrative rules issued by the Director; funds may cover up to 25% of a project’s total cost to remediate brownfield conditions; program must be operational and accepting application within 90 days of budget bill’s effective date (September 29, 2021), with $350MM appropriated for SFY 2022 to support the program statewide ($1M reserved for each Ohio county for one (1) year; all remaining funds awarded by ODOD on a first-come, first-served basis; authority to re-appropriate any unencumbered balance of funds in the program to SFY 2023);
- Creates within ODOD a Building Demolition and Site Revitalization Program (newC. 122.6512), for the demolition of commercial and residential buildings and adjacent, non-brownfield properties; project eligibility to be set via administrative rules issued by the Director; funds may cover up to 25% of a project’s total cost; program must be operational and accepting application within 90 days of budget bill’s effective date (September 29, 2021), with $150MM appropriated for SFY 2022 to support the program statewide ($500,000 reserved for each Ohio county for one (1) year; all remaining funds awarded by ODOD on a first-come, first-served basis; authority to re-appropriate any unencumbered balance of funds in the program to SFY 2023);
- Changes the ODOD’s Rural Business Growth Program (R.C. 122.151) eligibility criteria and investment requirements (e.g., referencing participating companies in the state’s border counties), bifurcating program funds as to before / after the effective date of these HB 110 changes, and requiring the new types of applications to be accepted by ODOD within 30 days of the budget bill’s effective date (on or after July 31, 2021);
- Inserts new “megaproject” designation in the state’s Job Creation Tax Credit program (newC. 122.17(A)(11) and (D)(2)(c)), allowing tax credits for very large projects (i.e., at least $1B in capital investment or $75MM/year in new payroll, average wages at least 300% of the federal minimum wage) for up to 30 years, as well as allows JCTC recipients to include work-from-home employees in their job creation calculations (new R.C. 122.17(T));
- Includes a new rank-ordering of Job Retention Tax Credit application priorities (newC. 122.171(C)(2)).
- Changes elements of the state’s Opportunity Zone tax credits (R.C. 122.84) to increase to $2MM the limits on credits awarded to individual taxpayers each budget biennium;
- Removes production contractors from those which may claim the state’s film and theater tax credit (R.C. 122.85);
- Drops in the provisions of proposed HB 174, which authorizes an income tax deduction for capital gains received by investors in certain Ohio-based venture capital operating companies (newC. 122.851);
- Extends the availability of the state’s Transformational Mixed Use Tax Credit (or TMUD, at R.C. 122.09) from 2023 to 2025 and sets at $100MM the maximum annual credit allotment during those two extra years (given that no TMUD credits were issued during 2020 to 2021, this amendment shifts those years’ allotments into the extended time period);
- Changes to JEDD law (newC. 715.72(A)(10) and (11); and (J)(2)) as to the means of creating a new or amending an existing JEDD (to add area) to require new notices, new JEDD Agreement terms, and exclusions of land from JEDDs that are in close proximity to, or subject to water / sanitary sewer service agreements by, a municipality which is not party to the JEDD Agreement. Unless an owner signs the JEDD Petition, such land must be excluded from the JEDD District;
- Changes to TIF law by adding language to “Public Infrastructure Improvement” definition (R.C. 5709.40(A)(8)): general use of TIF funds may now include off-street parking facilities, including those with reserved spaces (i.e., nonpublic);1
- Cleans-up language in urban redevelopment TIF (R.C. 5709.41) to specify that exemptions commence after the effective date of the municipality’s enabling ordinance, as well as to make explicit that TIF exemptions commence upon certain value being created or on a parcel-by-parcel basis, once improvements are made (rather than an entire urban redevelopment TIF’s exemption commencing based on improvements to a singular parcel); 1
- Inserts newC. 5713.083 to require owners of exempt property to notify their respective county auditor (on a to-be-developed OTAX form) as to the property’s ceasing to be exempt from real property taxes, with charges imposed for an owner’s failure to notify;
- Extends by two years (to December 31, 2024) the deadline by which renewable energy operators may apply to ODOD for a Qualified Energy Project tax exemption (R.C. 5727.75);
- Inserts “megaprojects” into the Community Reinvestment Area (CRA) program (newC. 3735.65(E)), authorizing local jurisdictions to award additional 15 years of tax exemptions to megaprojects.
Appropriation Items of Interest
- Restores appropriation levels for the Ohio Rural Industrial Park Loan Program ($15MM in SFY 2022 and SFY 2023), expands eligibility beyond distressed areas by including rural areas, which are any county not within a statistical metropolitan area (MSA), as well as transfers $20MM in unencumbered funds to SFY 2022;
- As to ODOD’s Residential Broadband Expansion Grant Program (i.e., enacted HB 2):
- Modifies the current law’s provisions of OPERS contributions to members of the Residential Broadband Expansion Program Authority;
- Strips out the Senate’s proposed limits on existing and future municipal broadband networks;
- Replaces the Senate Finance Committee’s zeroed-out appropriations by providing $230MM in SFY 2022 and $20MM in SFY 2023 to ODOD for the new broadband expansion program;
- Earmarks $1M/year to the Lucas County Land Bank for its Commercial Site Clean-up Pilot Program to demolish vacant commercial or industrial buildings in the county, with $1:$1 local match required;
- Earmarks $250,000/year to Fulton County Land Bank to demolish vacant commercial or industrial buildings in the county;
- Creates a Main Street Job Recovery Program ($250,000/SFY) in ODOD for business and employment opportunities among LMI and prison re-entry populations;
- Directs ODOD to make available grants during SFY 2022 – in amounts of $10,000, $20,000, and $30,000 – for entertainment venues, bars and restaurants, and lodging industry businesses, based in-part on demonstrated losses of revenue from COVID-19, but now sources the funding from the ARPA – State Fiscal Recovery Fund;
- Directs to ODOD to make available grants during SFY 2022 – in amounts of $10,000 – for new businesses having commenced operations after January 1, 2020, but now sources the funding from the APRA – State Fiscal Recovery Fund;
- Appropriates $10MM in SFY 2022 in Sports Event Grant Program funds awarded under R.C. 122.12 and R.C. 122.121;
- Creates a new Meat Processing Program Fund in ODOD, to provide up to $250,000 grants to meat processing plants for facility improvements and equipment purchases.
HB 118 WIND FARMS (Riedel, C., Stein, D.) Introduced on February 16, 2021, this bill requires inclusion of safety specifications in wind farm certificate applications, to modify wind turbine setbacks, and to permit a township referendum vote on certain wind farm and solar facility certificates. Note the companion SB 52 in the upper chamber, which was signed into law on July 12.
In effect, this bill allows local voters to veto turbine projects approved by the Ohio Power Siting Board. Specifically, the measure requires a renewable developer to submit a plan to township trustees 30 days prior to submission to the Ohio Power Siting Board; township trustees could then approve the project or trigger a referendum process, whereby the siting question would advance to the ballot at the next primary or general election (so long as at least 8% of voters in the last gubernatorial election supported the referendum).
During its first hearing on February 23, House Public Utilities Committee members expressed concern the measure sends a bad message to the business community. Rep. Laura Lanese (R-Grove City) noted the plan would establish a “very dangerous precedent…. We’re saying that with this one energy generation – or in this case two – resources we’re going to have one set of rules,” she said. “Yet with all the other sources of energy generation we’re not. From a business point of view…we’re sending this anti-business message.”
On March 23, the House Public Utilities Committee held its third hearing on the measure, with significant written and in-person testimony submitted, including Columbus Partnership CEO Alex Fischer, who noted, “This is a job killing bill. I can’t put it any other way.” Other opponent testimony was offered by the Ohio Chamber of Commerce, economic development organizations, and the Ohio Farm Bureau Federation.
On May 12, the House Public Utilities Committee accepted a substitute bill from the sponsors, based on industry concerns. Under the new version of the bill, community action is moved to the beginning of the site-permitting process, with townships empowered to designate all or part of their jurisdiction as an energy development district; this latter action would be subject to referendum by the electors. The OPSB would be prohibited from approving a project not within such an energy development district.
HB 123 COMMUNITY REINVESTMENT AREAS (Fraizer, M., Cross, J.) Introduced on February 16, 2021, this bill modifies the law governing CRA areas and the terms under which property may be exempted in such areas.
The bill streamlines the process of creating a new CRA by eliminating Ohio Department of Development (ODOD) designation and agreement sign-off responsibilities. Instead, ODOD is charged with merely designing a model CRA Agreement for commercial or industrial projects. The bill increases abatement thresholds to 75% (from current 50%) equal to which a municipality or county can make awards without school board approval. Further, the bill eliminates the requirement that municipalities that impose an income tax share that revenue with school districts when payroll from new employees is greater than $1M/year.
During sponsor testimony to the House Ways & Means Committee, Rep. Mark Fraizer (R-Newark) said the bill aims to update the Community Reinvestment Area law enacted in 1994, describing the bill’s focus as building consistency by aligning economic development tools like TIFs and CRA to default tax incentive percentages (to 75% with up to 100% available based on school board approval); reducing penalty years for relocating from 5 years to 2 years for relocating in the State; and cleaning up language and processes.
On May 26, the House voted 55-35 to approve a substitute version of the bill, which makes the following changes:
- Allows for limited home rule townships to establish CRAs (under current law, only municipalities and counties may do so);
- Does not require the use of ODOD model agreements, but requires CRA agreements to include ODOD’s “magic language” from its model document; and
- Allows for municipal-school district income sharing agreements when new payroll is more than $3MM/year, tied to inflation.
The Senate Ways & Means Committee held its second hearing, to receive proponent testimony, on October 26. Those speaking in favor of the bill included the Ohio Township Association (supporting the bill’s expansion of CRAs to limited home rule townships); the Ohio Chamber of Commerce (supporting the level of tax exemptions in a CRA that trigger local school board approval from 50% to 75%); the Ohio Real Estate Investors Association (supporting the removal of application fees); and the Ohio Municipal League. There were no questions raised by the Committee members.
HB 128 ELECTRIC LAWS (Hoops, J., Stein, D.) This bill seeks to make changes regarding electric utility service law, to repeal the $150MM/year in nuclear payments under HB 6, and to provide refunds to retail electric customers in the state. Note the companion SB 44 in the upper chamber.
House Public Utilities Chair Rep. James Hoops (R-Napoleon) introduced this separate plan to repeal decoupling provisions and the threshold at which a utility achieves significantly excessive earnings (the so-called SEET) that should be refunded; these elements had both specifically benefited FirstEnergy. The bill leaves intact the $20MM/year in annual solar subsidies provided under HB 6.
On March 10, the House voted 86-7 for the proposal. (Interestingly, one of the House members voting to approve this HB 6 repeal measure was Rep. Larry Householder (R-Glenford), the former speaker who has pleaded not guilty to a racketeering charge amid the scandal.)
On March 24 the Senate voted to approve the measure; the House voted unanimously in concurrence. The bill was signed into law by Governor DeWine on March 31, and it becomes effective 90 days hence (with revenue paid under the now-repealed HB 6 provisions to be refunded).
HB 133 TAX COMPLAINTS (Hillyer, B.) Introduced on February 17, 2021, this bill relates to commerce and property tax valuation complaints. This measure also seeks to repeal the version of R.C. 1322.24 taking effect October 9, 2021 that governs the granting of temporary permission to out-of-state mortgage lenders to originate loans in Ohio.
On March 17, this measure passed the House via unanimous vote. The bill then was heard three times in the Senate Financial Institutions & Technology Committee during late April to early May, and was reported out as an amended measure on May 11. That amended bill, with an emergency provision, passed the Senate unanimously on May 12. On June 2, 2021, the Governor signed the bill into law, and it will become effective 90 days hence.
HB 143 CLEAN OHIO FUND (Hillyer, B.) Introduced on February 23, 2021, this bill seeks to make changes to the law relating to the Clean Ohio Revitalization Fund. Note the companion SB 84 in the upper chamber.
This brownfield bill provides a dedicated funding source for the Clean Ohio Revitalization Fund (CORF). This is in response to the fact a dedicated funding source for brownfields was not included in the Governor’s introduced budget (HB 110). Sponsor Representative Hillyer (R – Uhrichsville) introduced this same legislation during the 133rd General Assembly.
HB 146 PREVAILING WAGE (Riedel, C., Manchester, S.) Introduced on February 23, 2021, this bill seeks to allow political subdivisions, special districts, and state institutions of higher education to elect to apply the Prevailing Wage Law to public improvement projects.
On June 23, this measure had its second hearing in the House Commerce & Labor Committee.
HB 155 LAND USE (Upchurch, T., Smith, M.) Introduced on February 25, 2021, this bill seeks to create the Land Reutilization Nuisance Abatement Program under R.C. Chapter 1724 (community improvement corporation statutes) to address nuisance structures by funding demolition, renovation, or remediation. Specifically, ODOD is charged with administering a $50MM grant program to county land banks for the abatement of nuisance structures on blighted parcels, including both residential and commercial properties.
On April 21, this measure had its second hearing in the House Economic & Workforce Development Committee, drawing widespread support from individuals across the state. Rep. Monique Smith (D-Fairview Park), a chief sponsor of the bill, said the issue of blight extends across the state. Additional supporting testimony was offered by witnesses from the City of Nelsonville, the Butler County Land Bank, the Western Reserve Land Conservancy, and the Mahoning County Land Bank.
Bricker published an article regarding the subject matter of this bill, available at the following link: https://www.bricker.com/insights-resources/publications/much-more-than-just-%E2%80%9Cdrug-houses%E2%80%9D-state-grants-to-fund-commercial-building-demolition-would-propel-county-land-banks-as-key-drivers-of-ohios-economic-development
The bill had its fourth committee hearing on June 16. Comments made by the committee chair, Rep. Jay Edwards (R-Nelsonville), generally were unfavorable to county land banks, as he noted the General Assembly should look at the current state of land banks and said that more guardrails, including a sheriff’s sale pre-requisite, are needed. Given the chair’s voiced concerns with land banking in general, there is doubt this bill will be reported out of his committee. But with the $500MM in brownfield remediation and building demolition funding provided in the state budget bill (HB 110, described above), this measure is moot at this point.
HB 157 MUNICIPAL TAXES (Jordan, K., Edwards, J.) Introduced on February 25, 2021, this bill modifies municipal income tax employer withholding rules for COVID-19-related work-from-home employees.
The bill would sunset – at the end of 2021 – a temporary rule that treated those working from a location other than their regular place of employment during the pandemic as working in the office for municipal income tax purposes. It would also require municipalities to approve employees’ requests for a refund of taxes withheld under the rule on and after January 1, 2021.
The bill had its sixth hearing on May 18, after which it was reported out along party lines for likely consideration on the floor by the entire House. The reported measure is now a substitute version of the bill, which sunsets the current emergency changes on municipal tax payments as of December 31, 2021 and clarifies that provisions of the bill are voluntary for businesses to follow. During the committee’s consideration, opposition testimony was offered by municipal government representatives, who noted the bill’s provisions regarding potential retroactive tax refunds could result in “very serious financial implications” for cities.
On May 26, the bill cleared the House in a party line vote; the measure now proceeds to the Senate.
HB 168 BUSINESS GRANTS (Fraizer, M., Loychik, M.) Introduced on March 2, this bill was written to provide grants to businesses, local fairs, child care providers, and veterans’ homes and to make an appropriation. Note the companion SB 109 in the upper chamber, which has been signed into law.
This bill was unanimously approved by the House on April 15, 2021, and on June 22, the Senate Finance Committee amended and reported-out this measure with a significant re-write of the entire bill. Namely, Sen. Jay Hottinger (R-Newark) proposed an amendment to remove the original contents of the bill, replacing that language with a directive to ODJFS to certify and retire the entire amount owed by the state of its unemployment assistance loan from the federal government. (During the COVID-19 pandemic, Ohio borrowed heavily to pay for the estimated $1.47B – $1.6B in unemployment compensation. Without this pay-off, interest would start accruing on the federal loan in September.) To-date, Ohio has received $2.7B State Fiscal Recovery Funds from the U.S. Treasury; another $2.7B will arrive within the year in a second and final installment.
Two days later (June 24), the bill unanimously passed the Senate after being amended on the floor in two material ways:
- To include SB 111’s provisions (described below) appropriating the first slug of $421.86MM in Local Fiscal Recovery Funds received by the State from the U.S. Treasury in late May (with the key inclusion of townships as so-called nonentitlement units of local government); and,
- To appropriate $250MM in State Fiscal Year 2022 to ODOD for a new Water and Sewer Quality grant program to counties, townships, municipal corporations, and other bodies politic in Ohio. Within 60 days of the bill’s effective date, county engineers are to submit to ODOD a list of eligible projects, ranked in order of priority.
On June 29, Governor DeWine signed the bill into law.
HB 169 BUSINESS GRANTS (Cutrona, A., Swearingen, D.) Introduced on March 2, this bill would provide grants to bars and restaurants and the lodging industry and make an appropriation. Note the companion SB 108 in the upper chamber.
On March 24, 2021, the measure was unanimously approved by the House. On December 7, 2021, the Senate Finance Committee loaded the legislative vehicle with $4.18B in appropriations of ARPA relief funds, reporting out a substitute version of the bill with the following:
- $2.49B designated for the Ohio Department of Education;
- Includes $92.2MM to establish a minimum per-pupil amount under ESSER for districts that heretofore have received little or no such funds; also includes $155.2MM in funding for nonpublic schools.
- $687MM for the Ohio Department of Job and Family Services;
- $529MM for the Ohio Department of Medicaid;
- $250MM for the Ohio Department of Public Safety;
- This funding represents Gov. Mike DeWine’s plan to provide the State’s portion of ARPA funding to first responders across the state:
- $175MM appropriated for law enforcement agencies to fight crime, which is an eligible use of ARPA funds announced by the Biden Administration during summer 2021; and,
- $75MM for wellness initiatives, recruitment and retainment efforts and technology;
- $142MM for the Ohio Department of Developmental Disabilities;
- $91.1MM for the Ohio Department of Health; and,
- $4MM for the Ohio Department of Higher Education.
- This funding represents Gov. Mike DeWine’s plan to provide the State’s portion of ARPA funding to first responders across the state:
The bill passed the Senate on a 29-1 vote on December 8; the House voted to concur in the Senate’s rewrite of the bill on December 9. The bill was signed into law on December 23, 2021.
Note: with these appropriations, there remains approximately $600MM from the U.S. Treasury’s first tranche (of two) of ARPA funding allocated to the State. The Ohio Office of Budget and Management expects to receive the second tranche of Ohio’s allocated funds, $2.7B, during the first-half 2022.
HB 174 AUTHORIZE INCOME TAX DEDUCTION FOR CERTAIN CAPITAL GAINS (Cross J, Lanese L) Introduced on March 3, this bill authorizes an income tax deduction for capital gains received by investors in certain Ohio-based venture capital operating companies.
During sponsor testimony in the House Economic & Workforce Development Committee on March 24, Rep. Laura Lanese (R-Grove City) described the goal of the measure as joining 22 other states that offer tax credits to venture capital firms to encourage economic expansion. Rep. Jon Cross (R-Kenton) noted the COVID-19 pandemic has led to a movement away from the coasts.
HB 228 MUNICIPAL CORPORATION TAX (Roemer, B.) Introduced on March 23, 2021, this bill would seek to make changes related to state-administered municipal net profits taxes. The bill, in the form amended and reported-out by the House Ways & Means Committee, allows for the following:
- The Ohio Attorney General to charge and deduct its collection costs for any state-administered municipal net profits tax it collects.
- Codifies into state law an OTAX online services portal designed to securely exchange information between taxpayers and the state, and requires OTAX to notify municipal corporations through the portal when taxpayers opt in or out of centralized collection.
- Removes from state law the one piece of municipal income tax collections that was ruled unconstitutional by the Ohio Supreme Court in Athens v. McClain in 2020: an administrative filing fee.
- Permits pass-through entities to deduct pensions and retirement benefits paid to retired partners, shareholders, or members from their municipal net profits tax liability.
On May 26, the House passed the bill on an 88-1 vote. The Senate Ways & Means Committee reported-out an amended version of the bill on October 26, to which the House concurred, via unanimous vote; the Senate likewise passed the bill by unanimous vote on October 27. The bill was delivered on October 29 to Governor DeWine for his signature.
HB 237 COUNTY RECORDERS (Hillyer, B.) Introduced on March 31, this bill seeks to require counties to provide an electronic means of recording instruments and accessing them, to allow county recorders to charge a document preservation surcharge, to increase recording fees for certain instruments, and to make an appropriation. A substitute version of the bill (which removed language that had called for recording fee deposits being made into the Ohio Housing Trust Fund) was adopted by the House State & Local Government Track Committee; that committee referred the measure to the House Finance Committee to vet an appropriation provision.
In turn, the Finance Committee held its first hearing, to take sponsor testimony, on October 26. Rep. Brett Hillyer (R-Uhrichsville) stated this measure (first introduced as HB 797; 133rd General Assembly) would modernize county recorders’ offices. Specifically, the bill allows property conveyances to occur electronically in all of Ohio’s 88 counties, as well as ensures electronically accessible records back to 1980.
HB 241 TAX FORECLOSURES (Patton, T.) Introduced on March 31, this bill makes changes to the law relating to tax foreclosures and county land reutilization corporations. Note the companion SB 112 in the upper chamber. The bill has been referred to the House State & Local Government Committee.
HB 264 INCOME TAX (Smith, M., Sobecki, L.) Introduced on April 20, 2021, this bill would seek to modify the municipal income tax withholding rule for employees working at a temporary worksite.
HB 271 NATURAL GAS (Edwards, J.) Introduced on April 22, 2021, this bill would establish a natural gas infrastructure development program and fund to help meet Ohio’s natural gas supply needs. The measure had its first hearing in the House Energy & Natural Resources Committee on May 6.
HB 302 WIND FARMS (Skindell, M., Smith, K.) This measure, introduced on May 11, 2021, would alter the minimum setback requirement for wind farms of five or more megawatts.
The bill had its first hearing before the House Public Utilities Committee on May 19, 2021. During joint sponsor testimony, Rep. Kent Smith (D – Euclid) noted this measure would essentially reverse a 2014 floor amendment that extended wind turbine setbacks, reverting the setback limit for + 5MW turbines to the distance they were prior to that change.
HB 303 COMMUNITY REINVESTMENT AREAS (Swearingen, D.) Introduced on May 12, 2021, this bill generally regards career-technical education. The bill would require that school compensation agreements reached under commercial or industrial CRA abatements be provided on the same terms and conditions to joint vocational school districts. Note the companion bill in the upper chamber (SB 166).
The bill had its first hearing in the House Economic & Workforce Development Committee on June 16, during which sponsor testimony by Rep. D.J. Swearingen (R-Huron).
HB 358 REVISE ETHICS LAW REPORTING REQUIREMENTS (Lanese, L., Manning, G.). Introduced on June 22, 2021, this bill amends ethics reporting requirements. Certain public and elected officials are required to file disclosure statements as to their sources of income, property interests, debts, and the source of gifts received for the prior year having a value over $75 (with some exceptions). HB 358 increases this gift-disclosure-threshold to $150. The bill was referred to the House Government Oversight Committee on June 24, 2021 and has not seen movement since.
HB 369 PROPERTY TAX EXEMPTIONS (Weinstein, C.) Introduced on July 7, 2021, this bill seeks to enact the School Board Fairness Act, requiring school districts to approve certain residential community reinvestment area property tax exemptions.
HB 377 LOCAL FISCAL RECOVERY (Hall, T., Swearingen, D.) Introduced on July 15, 2021, this bill seeks to amend just-enacted HB 168 to appropriate the entirety of the U.S. Treasury’s allocation of Local Fiscal Recovery Funds ($844MM) to nonentitlement units of local government (NEUs), to be distributed by Ohio OBM.
HB 389 CREATING ENERGY EFFICIENT AND DEMAND REDUCTION PORTFOLIOS (Leland, D., and Bill S.). Introduced on August 12, 2021, the House Public Utilities Committee favorably reported a Substitute HB 389 to the full House by a vote of 17-0 on November 18, 2021 after five hearings.
As reported-out, Sub. HB 389 encourages electric distribution utilities to develop voluntary portfolios of energy savings programs to help their customers save energy. Each electric utility may submit an application to the PUCO for approval, including a description of the program.
If approved, a utility’s portfolio costs cannot result in a rate producing a monthly charge for “residential customers” greater than $1.50 per month; residential customers are automatically opted-in and can opt-out within a limited window of time (i.e., three (3) weeks). “Mercantile customers” (i.e., commercial or industrial users), by contrast, are automatically opted-out of any opportunity to participate in a portfolio—to participate, they must affirmatively choose to opt-in to the portfolio in writing.
Each portfolio program must be annually reviewed for cost-effectiveness and compliance with state law.
HB 399 TAX CREDIT (Smith, K., Callender, J.) This bill was introduced on August 24, 2021 to temporarily authorize a refundable income tax credit for investing in a sound recording production company.
HB 412 TAXATION (Stoltzfus, R., Roemer, B.) Introduced on September 8, 2021, this bill would require the online publication of mailing addresses to which certain tax complaints and appeals are filed. The measure had its second hearing in the House Ways & Means Committee on October 26.
HB 430 PROPERTY DEVELOPMENT (Cross, J.) Introduced on September 21, 2021, this bill enacts new R.C. 713.28 related to property development adjacent to natural gas transmission pipelines. This measure had its second hearing in the House Energy & Natural Resources Committee on December 8.
HB 434 NUCLEAR TECHNOLOGY (Stein, D.) This bill was introduced on September 29, 2021 to establish the Ohio Nuclear Development Authority. This measure had its second hearing in the House Energy & Natural Resources Committee on December 8.
HB 436 PORT AUTHORITIES (Jordan, K., Carfagna, R.) Introduced on September 28, 2021, this bill seeks to narrow the purposes for which a pre-1982 port authority (i.e., a port formed under R.C. 4582.01 to R.C. 4582.20) may issue revenue bonds beyond its limit of bonded indebtedness, as well as to exempt from sales/use taxes the sale of TPP or services used in fulfilling a public contract with a port authority. As to the latter change, the bill provides that the sales and use tax will not be applied on the sales of tangible personal property or services to a person under contract with a port authority.
In hearings before the House Ways & Means Committee (two such hearings through November 9), sponsor Rep. Kris Jordan (R-Ostrander) said the bill provides clarification regarding the scope of the “building and construction materials and services” exemption from the state sales and use tax (R.C. 5739.02(B)(13)); the Ohio Chamber testified in support of the measure.
HB 450 SOLAR PROJECTS (Baldridge, B., Lanese, L.) Introduced on October 12, 2021, this bill allows for the development of community solar projects. Specifically, the bill permits community solar in the territories of the electric distribution utilities (EDUs). (To date, community solar has not been available in EDU territories due to the inability for customers to participate in aggregate or virtual net metering; an EDU cannot control a community solar project but its affiliate may control the facility.)
This bill authorizes the PUCO to certify up to 2,000 MW of community solar projects, with additional authorization to certify another 1,000 MW of community solar project constructed exclusively on “distressed sites” (with a majority of such projects to be located in the Appalachian region).
A “community solar project” is one that meets all the following:
- It has at least three subscribers, with no subscriber holding more than a 40% proportional interest in the output of the facility;
- Has a nameplate capacity ≤ 10 MW (unless the project is located on a “distressed site,” it which case it may have a nameplate capacity of up to 45 MW); and,
- It is located on one or more adjacent or contiguous parcels of land and is not located within 1 mile of solar facilities under the control of the same entity.
The bill defines “distressed site” as contiguous parcels whereby the majority of acreage is: (i) a brownfield under R.C. 122.65; (ii) within NMTC area; or (iii) a closed solid waste facility. Community solar projects located on distressed sites may receive grant funds from ODOD under its new brownfield remediation program (new R.C. 122.6511) for construction and remediation.
The measure had its second hearing on November 10 in the House Public Utilities Committee.
HB 470 MULTI-FAMILY RESIDENTIAL HOUSING (Hillyer, B.) Introduced on October 27, 2021, this bill seeks to authorize the Ohio community investor credit for qualifying developers of multi-family residential housing projects. This measure had its first hearing in the House Ways & Means Committee on November 16.
HB 531 COUNTY PROSECUTOR (Ghanbari, H.) Introduced on January 12, 2022, this bill allows a county prosecutor to provide legal services to a metropolitan planning organization, regional transportation planning organization, or regional council of governments.
 The changes to JEDD and TIF law were the subject of a Bricker-authored article published during the budget bill’s consideration, available at the following link: https://www.bricker.com/resource-center/develop-ohio/publications/ohio-senate-committee-chefs-baking-economic-development-morsels-into-their-version-of-the-state-budget-bill
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