Tracked House Bills – June 2021

Jeffry Harris
Bricker & Eckler LLP

 

State News:

Senate leader on how to use State’s $5.4B ARPA Allocation: Broadband & Brownfields:  Not counting any American Rescue Plan Act funds to local governments, Ohio is expected to receive approximately $5.4B in federal COVID-19 relief stimulus funds.  At the time of this writing, Ohio has received half ($2.7B) from the U.S. Treasury in the first tranche of funding; the funds must be committed by September 30.  We expect these funds to be appropriated by the Ohio General Assembly in a stand-alone bill, outside the scope of the pending state operating budget (HB 110).

Senate President Matt Huffman (R-Lima) said during the week of May 24 the State will seek to first pay back the federal government for unemployment compensation outlays made during the pandemic (approximately $1.8B).  As to the remaining $900MM in this first tranche of funding, Sen. Huffman noted his two priorities: broadband expansion and brownfield remediation.  “There are a lot of buildings that are never going to be used again that need to be taken down,” he said.  (Admittedly, this public statement by the Senator in May is somewhat at odds with his June handling of the state budget bill’s appropriations for broadband expansion.  Such is politics.)

Federal News:

(Formal) bipartisan talks ended as of June 8 for federal infrastructure bill:  President Biden cut off negotiations with lead Republican negotiator, Senator Shelley Moore Capito of West Virginia, via phone call on Tuesday, June 8.  He made clear the gulf between the Senate Republicans and the Administration was too wide; the last counter-offer from Sen. Moore Capito was to add $50B to her last infrastructure spend amount.

The move to inject significant federal spending to the county’s network of roads, bridges, water pipes and other physical infrastructure now will proceed either (1) under the Senate’s budget reconciliation process to avoid the filibuster or (2) via a group of centrist senators who have been working separately on their own infrastructure plan.  President Biden called the latter group individually and urged them to find a solution.

To this point in the process, President Biden had cut his proposal from $2.3T (initial) to $1.7T (formal counteroffer proffered during May), and finally to $928B.  His last proposal seeks to fund the measure by enforcing tax evasion, closing a number of business tax loopholes, and imposing a new minimum tax on large corporations that don’t otherwise pay federal income taxes.

Another area of discussion is to kill two birds with one stone: namely, to repurpose at least some of the $350B Local Fiscal Recovery Fund allocations to roads, bridges, and public transit.  The idea caught wind in Washington after first being proposed by Sen. Mitt Romney (R – Utah) during the week of May 17, who noted in reference to the current form of federal stimulus to counties, metro cities, and nonentitlement units of local government: “They don’t know how to use it.  They could use that money to finance part of the[ir] infrastructure[.]”

Some states now are forecasting revenues that are above pre-pandemic levels, particularly among those that do not rely on the tourism or hospitality industries for tax revenues.  One data point, prepared by the Committee for a Responsible Federal Budget, indicates state and local revenues are tracking +7% higher than their levels prior to the COVID-19 public health emergency.

Nation’s pivot to net-zero carbon emissions: With the Ohio General Assembly’s current consideration of wind and solar local referendum bills (HB 118 and SB 52, the latter of which now has been substantially rewritten), the country’s reshaping landscape to achieve net-zero emissions by 2050 deserves mention.

President Biden has re-committed the US to the Paris Accord and to bring down this country’s carbon emissions by 2050 to “net-zero,” meaning we would eliminate as much greenhouse gas as we emit each year.

According to Princeton University’s Net-Zero America Report, this country now has the technology and resources to reach net-zero emissions by 2050.  But there are important considerations:

• How to distribute the renewable energy generated from wind and solar projects?  Coal, natural gas, and nuclear projects were built near (or in tandem with) high-voltage transmission lines to carry power.  The US does not have the infrastructure to move renewable energy along transmission lines across regions.  Doing so is expensive and complicated, as transmission lines must be permitted and placed along site-assembled corridors.  The current school of thought is to place more renewable energy generating projects near population centers, to avoid the transmission line riddle.
• Where are those renewable energy generation projects placed?  To site a wind farm is to change the view, as strenuous testimony has made clear during committee hearings for HB 118 and SB 52.  But farmers can generate as much as 20X’s the revenue, per acre, from wind or solar than from planting fields.
• Can publicly owned land accommodate a sufficient number of renewable energy projects?  It is understood the places with the best sun and wind are in the US southwest and in the Rocky Mountains, on land owned by the public.  Much will depend on the Biden Administration fast-tracking permits to allow wind and solar arrays to be built in short-order.
• What role for brownfields?  Wind and solar projects can be built on remediated industrial sites, former landfills, and other brownfields.  With the Ohio Senate President’s comments encouraging as least some of the state’s American Rescue Plan Act funds to brownfield remediation (see note, immediately below), coupled with the Ohio Senate’s unanimous passage of SB 83, to study and list all brownfields across the state, this may offer an interesting economic development opportunity.

 

134^TH GENERAL ASSEMBLY – PROPOSED & ENACTED LEGISLATION
(Changes from last month are noted in BOLD):

HOUSE RESOLUTIONS:

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.

HOUSE BILLS:

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 ODSA, providing funds to broadband providers that otherwise would not pursue expansion in certain areas of Ohio without such support. Specifically, this will provides ODSA-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 ODSA 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 ODSA’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, ODSA 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 third hearing in the House Transportation & Public Safety Committee on June 15.

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 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.

This measure passed the House on March 3 by unanimous vote; it has been referred to the Senate Ways & Means Committee.

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 second hearing on April 28 in the House Infrastructure & Rural Development Committee.

HB 110 BUDGET BILL (Oelslager, S.) Introduced on February 16, 2021, this bill is the vehicle for Governor Mike DeWine’s executive budget proposal. The measure is now in the House Finance Committee, which is chaired by the bill’s sponsor, Rep. Scott Oelslager (R-Canton).

Economic development items of note (updated as the Budget Bill progresses):

• Name Change: The Ohio Development Services Agency will revert back to its Ohio Department of Development moniker.

• Rural Industrial Park Loan Program: Although this program was reinstated with $25MM in the current state operating budget, HB 110 zeroes out this program in SFY 2023. The as-introduced version of HB 110 appropriates $10MM to this loan fund for SFY 2022 and zero ($0) in SFY 2023.

On April 13, the House Finance Committee offered its set of changes to the executive budget via a substitute bill; this version includes the following relevant elements for economic development practitioners:

• Transferring compliance responsibilities from the Ohio Attorney General to the Auditor of State as to recipients’ compliance with state economic development awards;
• Folding in HB 2’s proposal for $170MM (State Fiscal Year 2022) and $20MM (SFY 2023) to expand residential broadband access;
• Increasing funding to the Rural Industrial Park Loan program, by  $8MM, for SFY 2022 (with $18MM in total appropriations), and leaving the program zeroed-out in SFY 2023;
• Including two (2) discrete appropriations to county land banks: $1M/SFY to the Lucas County Land Bank for its pilot Commercial Site Clean-up Program; and $250,000/SFY year to the Fulton County Land Bank for commercial / industrial building demolitions;
• Creates a Main Street Job Recovery Program ($250,000/SFY) in ODSA for business and employment opportunities among LMI and prison re-entry populations;
• ODOD to make available grants during SFY 2022 – in amounts of $10,000, $20,000, and $30,000 – for indoor entertainment venues, bars and restaurants, and lodging industry businesses, based in-part on demonstrated losses of revenue from COVID-19; and,
• ODOD to make available grants during SFY 2022 – in amounts of $10,000 – for new businesses having commenced operations after January 1, 2020.

On April 20, the House Finance Committee offered an omnibus amendment to the executive budget’s substitute HB 110.  On April 21, the House voted 70-27 to approve the measure, which includes the following relevant elements for economic development practitioners:

• Increases ODOD’s Local Development Projects appropriation line item by $100,000 for the Medina County Commissioners to support the financing of a homeless shelter;
• Clarifies that ODOD’s grants for entertainment venues is not limited to indoor operators, but to entertainment venues generally;
• Corrects references within the budget bill to ODOD, rather than ODSA;
• Extends by two years (to January 1, 2025) the deadline by which renewable energy operators may apply to ODOD for a Qualified Energy Project tax exemption;
• Clarifies the $1 million and $250,000 annual appropriations from ODOD’s Local Development Projects for SFY 2022 and 2023 to the Lucas County Land Bank and the Fulton County Land Bank, respectively, may be applied for by villages and townships in those counties;
• Appropriates $25MM in SFY 2022 to ODOD for the DeWine Administration’s TechCred Program;
• Shifts $10MM in appropriations for SFY 2022 from the Ohio Dept. of Agriculture to ODOD for a new Meat Processing Program Fund, to provide grants to meat processing plants for facility improvements and equipment purchases; and,
• Drops 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, into the budget bill.
• Would establish a Joint Legislative Oversight and Review Committee of Federal COVID Relief Aid with the responsibility of assessing the distribution and spending of federal stimulus.

On June 1, the Senate Finance Committee accepted a substitute version of HB 110.  The bill now totals $74.4B in General Revenue Fund expenditures ($160.8B across all funds) during the two-year biennium (SFY 2022 and SFY 2023).

The substitute bill includes the following relevant elements for economic development practitioners:

• Retains the name change to Ohio Department of Development (from ODSA);
• Requires that ODOD post on its website a description of its loans and grants programs, including eligibility factors;
• Strips out provisions for the ODOD’s Residential Broadband Program and eliminates $190MM of the Governor’s proposed broadband expansion program funding levels (which had been in earlier versions of HB 2), with reporting from the Statehouse indicating the move was facilitated to allow the Senate to insert a 5% personal income tax cut;
• Reduces by one-half the earmark to the Lucas County Land Bank for commercial building demolition (to $500,000/SFY), and eliminates the proposed earmark for the Fulton County Land Bank’s same program;
• Eliminates the House’s appropriation of $100,000 for the Medina County Commissioners to support the financing of a homeless shelter;
• Appropriates $150,000 (SFY 2022) to the City of East Liverpool (Columbiana County) for residential demolition;
• Creates a new Sports Event Grant Program in R.C. 121.12 and R.C. 121.121;
• Inserts language identical to SB 36 (133^rd General Assembly) to require federally subsidized residential rental property to be valued for tax purposes based on its market rent, without factoring in governmental actions such as rent subsidies.  (Note that LIHTC-financed properties are deed-restricted for 30 years or longer to charge below-market The Ohio Housing Council estimates this provision in the budget bill would double the valuation of low-income properties.)  The bill was introduced during the last General Assembly by Senate President Matt Huffman (R-Lima), who noted during sponsor testimony that a recent Ohio Supreme Court opinion in 2018 “sets a dangerous precedent…. Essentially, it allows property owners to lean on government subsidies to dramatically deflate their property values [and therefore LIHTC developers are] making a lot more than they should.”  The previous bill was subject to just three hearings before dying in committee.
• Restores funding to the Rural Industrial Park Loan program for SFY 2022 and SFY 2023 ($15MM/year), sourced in part from unexpended fund transfers;
• Drops in language similar to that used in HB 157 to allow retroactive tax refunds for remote workers. Specifically, this inserted provision would allow a person to seek a municipal income tax refund if they worked from home and lived outside of the municipality where their business was based and where their income tax was paid.  The tax refund would be available back to tax year 2020 (note HB 157 would only apply to tax year 2021);
• Changes to “Public Infrastructure Improvement” definition – added language to R.C. 5709.40(A)(8)’s voluminous / nonexhaustive list of eligible uses of TIF funds:  general use of TIF funds may now include off-street parking facilities, including those with reserved spaces (i.e., nonpublic); 
• Changes to urban redevelopment TIFs – new language in R.C. 5709.41(D): cleans-up the urban redevelopment TIF to specify that exemptions commence after the effective date of the muni’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); and,
• Changes to R.C. 715.72: the means of creating a new JEDD (or amending an existing JEDD to add area) has been changed to insert 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 muni which is not party to the JEDD Agreement.  Unless an owner signs the JEDD Petition, such land must be excluded from the JEDD District.

The proposed changes to TIF and JEDD law were the subject of a Bricker-published article, 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

Notably absent (i.e., zero funding) from the Senate Finance Committee’s substitute version were two items: (1) the long-rumored-for-inclusion in the budget of a $100MM/year infrastructure program at ODOD, to be modeled on the JobsOhio Vibrant Communities Program; and (2) language similar to SB 95 (133^rd General Assembly) to allow for awarding of enhanced JCTC’s to so-called “mega projects.”

The Senate Finance Committee released its omnibus amendment to this measure on June 8 (the floor vote in the Senate expected to occur on June 9).

The omnibus amendment to the bill includes the following relevant elements for economic development practitioners:

• Restates the House Finance Committee’s direction for 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;
• Alters the effective date (from January 1 to February 11, 2022) of the 133^rd General Assembly’s changes to Ohio’s Limited Liability Company law;
• Technical correction to make clear the Senate’s elimination of $190MM of the Governor’s proposed broadband expansion program funding to the ODOD’s Residential Broadband Program;
• Changes elements of the state’s Opportunity Zone tax credits to (a) increase to $2MM the limits on credits awarded to individuals each budget biennium; and (b) make the credit available to non-taxpayer investors (i.e., any “person”);
• Removes production contractors from those which may claim the state’s film and theater tax credit;
• Extends the availability of the state’s TMUD (transformational mixed use tax credit) 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);
• Removes stipends and OPERS contributions to be paid to members of the ODOD’s Broadband Expansion Program Authority, and eliminates virtual attendance provisions (i.e., Zoom / teleconference) for the Authority’s members;
• Inserts new Ohio Revised Code Section 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;
• Changes the ODOD’s Rural Business Growth Program’s 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 increasing the program’s tax credit allocations by $45MM;
• Expands eligibility for the Ohio Rural Industrial Park Loan Program beyond distressed areas by including rural areas, which are any county not within a statistical metropolitan area (MSA); and,
• Inserts new language into just-enacted Ohio Residential Broadband Expansion Grant Program (new R.C. 122.4090 et seq.) to allow local governments which have their own broadband networks to provide services within their geographical boundaries to unserved areas, but disallows offering their broadband services outside their jurisdictional boundaries, as well as to prohibit those local governments from using federal funds (e.g., ARPA – Local Fiscal Recovery Funds) to fund the construction or operation of their networks.[1]

Leaders in the Ohio Senate and House now begin the conference committee process to work out the differences in the chambers’ respective versions of the bill.

As is custom, the conference committee members are comprised of the House and Senate Finance Chairs, Vice-Chairs, and Ranking Members.  The conference committee commenced its deliberations on June 15, with new budget estimates from Ohio OBM / LSC due to be released on June 17.

Once the conferees reach an agreement and issue the conference committee report, both chambers vote on the compromise HB 110 language and send the measure to Governor DeWine for his signature by June 30.  He will have limited time to review the final, final legislation and determine whether to issue line-item vetoes.

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.

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 Development Services Agency (ODSA) designation and agreement sign-off responsibilities. Instead, ODSA 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, noting the “overly bureaucratic nature of post-1994 CRAs with unnecessary State reporting.” He continued, describing the focus of his bill as “building consistency with economic development tools, aligning TIFs and CRA default tax incentive percentages to range from 75% to 100% based on school board approval[.]”

Rep. Troy said he chaired the committee in 1994 that processed the CRA law, and noted, “I don’t really see what’s broke here that needs to be fixed.”

During the House Ways & Means Committee’s second hearing on March 2, the sole proponent testimony heard was from Nate Green with the Montrose Group / Jobs Alliance, who advocated passage of the bill, noting Indiana does not impose restrictions on tax abatements as does Ohio under the CRA law. Rep. Daniel Troy (D-Willowick) questioned the school funding impacts of the bill, noting tax breaks would have the effect of shifting property tax burden on to residential homeowners.

Rep. Troy, involved in writing the 1994 CRA law changes, noted those changes were enacted to prevent enterprises from “shopping” for CRAs after their initial benefit period runs out; this bill, he described, removes the requirement that a business relocating into a CRA-abated site notify its former community in advance of the move. Mr. Green stated that shopping for CRA abatements is “not as big of an issue as it was before.”

Opponent testimony submitted on March 9 included significant comment from representatives of Ohio’s school districts, as well as testimony from the Medina County economic development team.

During interested party discussions with Bricker on March 11, Rep. Frazier noted the 75% threshold for requiring school board approval (increased from the current law’s 50%) is “non-negotiable; there will cease to be a bill if that figure changes.”

On April 13, the House Ways & Means Committee offered 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 ODSA model agreements, but requires CRA agreements to include ODSA’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 bill had its fifth hearing on April 20, after which the measure was reported-out by the House Ways & Means Committee strictly along a party-line vote.

On May 26, the House passed the bill on a 55-35 vote; it now proceeds to the Senate for consideration.

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, which now heads to the Senate for consideration.  (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 March 3, this measure had its first 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, ODSA 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 third committee hearing on June 9, 2021, for which OML submitted written proponent testimony; the measure is scheduled for another hearing on June 16.

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 would 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.

On March 24, this bill was reported out of the House Economic & Workforce Committee.

On April 15, the measure was reported out by the House Finance Committee, which amended the bill to replace state GRF appropriation for two grant programs with appropriation from the Coronavirus Relief Fund. The measure was unanimously approved by the House the same day, and has gone to the Senate.

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, this bill was reported out of the House Economic & Workforce Committee.

On April 15, the measure was reported out by the House Finance Committee, which amended the bill to appropriate $10MM in Coronavirus Relief Fund dollars that were previously unspent for the purpose of helping liquor permit holders pay for renewal fees. The measure was unanimously approved by the House the same day, and has gone to the Senate.

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 had its fourth hearing before the House Ways & Means Committee on May 18, 2021, after which it was reported out for possible consideration on the floor by the entire House.  The reported measure was an amended version of the bill, which now allows the Ohio Attorney General to charge and deduct its collection costs for any state-administered municipal net profits tax it collects.

On May 26, the House passed the bill on a 88-1 vote; it now proceeds to the Senate for consideration.

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.   The bill had its fourth hearing before the House State & Local Government Committee on June 15, during which the Committee accepted a substitute version.  The revised bill removed language that had called for recording fee deposits being made into the Ohio Housing Trust Fund; the Committee also proposed funding implementation of the bill among county recorders by using ARPA – State Fiscal Recovery Funds.

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 is scheduled for its first hearing in the House Economic & Workforce Development Committee on June 16.

[1] Bricker notes this change would make it difficult for local governments to run municipal-owned broadband networks; development of fiber conduit should not be impacted.  Ohio would join 18 other states that have restricted local government-owned broadband networks.

House Bill 2’s Residential Broadband Expansion Program established a grant funds pipeline to expand broadband access into unserved/underserved areas. As enacted, HB 2 omits governmental and quasi-governmental entities from the definition of Broadband Provider.  As such, local governments are prohibited from applying for the ODOD grants.  But HB 2 was silent on whether a governmental entity could operate its own broadband network (it can).

This change in HB110 amends the Broadband Expansion Program by placing restrictions on government-owned broadband networks:

• Prohibits a political subdivision from establishing a government-owned broadband network (including public private partnerships) except to provide service to unserved areas within the boundaries of the political subdivision – those areas lacking access to Tier 1 (at least 10 but less than 25 Mbps download and at least 1 but less than 3 Mbps upload) or Tier 2 broadband service (at least 25 Mpbs download and at least 3 Mbps upload).
• Prohibits the approximately 30 government-owned broadband networks in Ohio from providing service outside of such unserved areas.
• Establishes a specific process for a political subdivision to establish a government-owned broadband network.