Tracked House Bills – March 2019

Chris Schmenk
Bricker & Eckler LLP

JobsOhio: Governor Mike DeWine announced on March 13 that Richard J. “Rick” Platt of Newark (Licking Co.) has been appointed to the JobsOhio Board of Directors for a term beginning March 13, 2019, and ending July 5, 2019.  Rick serves as the President and CEO of the Heath-Newark-Licking County Port Authority and has a broad background in economic development.

Governor’s State of the State Address:  On March 5, 2019, Governor Mike DeWine (R) delivered his first State of the State address during a joint House and Senate session in the Statehouse.  The Governor restated his administration’s top priorities, which include Children’s Initiatives,  Opiate/Heroin Addition Prevention & Treatment, Lake Erie’s Water Quality, Economic Development/Workforce Development and Energy.  He also called for all Ohioans to work together to move the state forward.

Governor’s Budget Bill:  Governor DeWine announced details of his new two-year budget on Friday March 15. The actual budget bill will be introduced in the legislature shortly.  The proposed spending outline for Fiscal Years 2020-2021 includes nearly $70 billion in General Revenue Fund and $150.4 billion in all funds appropriations.  It includes a $500 million increase in public-school funding targeted to pay for services for at-risk students, a $900 million “H2 Ohio” water protection fund and $200 million on new initiatives aimed at addiction and mental health.  The bill will significantly boost funding for the Ohio College Opportunity Grant and provide up to $15 million per year to provide “Micro-degrees” (industry credentials) at no cost to a minimum of 10,000 Ohioans, as long as they remain in Ohio after completion. Micro-degrees are low-cost credentials that take a student less than a year to complete and quickly qualify Ohioans to work in growing industries. State support for indigent defense would also increase under the proposal, from $30 million to $90 million, a move that will help counties who have had to bear the brunt of spending in this area.  The bill does not cut or increase taxes, and spending increases are projected to be funded by increased revenues based on an expectation of slow but steady economic growth.  Further details can be found at http://budget.ohio.gov/.   Details about workforce and innovation proposals are at http://budget.ohio.gov/WorkforceInnovation.aspx.

Although the actual bill has not yet been released, members of the House Finance Committee heard testimony March 19 from OBM Director Kimberly Murnieks and Tax Commissioner Jeff McClain.  The budget proposes spending $250 million in the first year and $300 million in the second year for funding to support student wellness.  The H2Ohio program would include a planning process between the Department of Agriculture, Environmental Protection Agency and the Department of Natural Resources.

Transportation Budget Bill: On March 7, the Ohio House passed a two-year Transportation Budget (Amended Substitute HB 62) with a vote of 71-27.  The Budget bill was dramatically revised from the original proposed by Governor DeWine and Ohio Department of Transportation Director Jack Marchbanks.  Rather than providing for an 18 cents/gallon immediate increase in the state’s gas tax, the revised bill only provides for a 10.7/cents gallon increase to be phased in over two years.  The bill was opposed by 1/3 of Republican members of the House but passed due to support from most Democratic members. The revised bill also included a fee of $200/year on electric vehicles and $100 on hybrids; increased spending on public transit to $100 million/year; repeals the requirement that vehicles have front license plates; increases deputy registrar fees by $5; requires annual transfers of $5 million from the state Oil and Gas Fund to local governments in counties with at least one oil/gas well in the Utica or Marcellus shale formation for infrastructure needs, and several provisions assisting Ohio port authorities (allowing them to tow motor vehicles when necessary and removing a requirement to have contracts with a contractor signed in triplicate).

Senate President Larry Obhof (R-Medina) has announced that the 10.7 cents-per-gallon increase in the gas tax passed by the House is likely to be reduced even further by the time it gets through the Senate.  Hearings are ongoing in the Senate Transportation, Commerce and Workforce Committee.  Led by Chair Rob McColley, the Committee includes the following members: Republicans Joe Uecker, Frank Hoagland, Jay Hottinger, Stephanie Kunze, Nathan Manning, Kristina Roegner and Michael Rulli.   Democrats include Nicki Antonio, Tina Maharath and Vernon Sykes.

On March 19, a substitute bill was approved by the Committee that maintains the 10.7 cents per gallon increase (for now) but makes numerous changes to the House bill, including:

• Elimination of the language requiring annual transfers of $5 million from the state Oil and Gas Fund to local counties with shale oil and gas wells for infrastructure needs;
• Removal of language allowing municipalities and townships to levy an additional $5 license fee;
• Reduction of annual fees on electric vehicles from $200 to $175 and hybrids from $100 to $75, and
• Adding language specifying that the motor vehicle fuel tax may only be used for roads and bridges.

Committee members have until the end of Wednesday, March 20 to submit proposed amendments to the bill, then the committee will approve an omnibus amendment later this week or by Monday, March 25.

The increase in the state’s gas tax is needed due to a combination of problems, including the need to repay debt from Ohio Turnpike bonds, the lack of increases in the gas tax since 2005 in spite of inflation, and greater fuel efficiency.  About 44% of ODOT’s budget comes from the gas tax, and much of local government’s infrastructure funding does as well.  Concerns have been expressed that the decrease in funding will adversely affect new construction, ongoing maintenance, Roadwork Development Funds (629 Funds) administered by the Jobs & Commerce section of ODOT, and local funding. The bill will be passed by the end of March, so if members wish to provide input to your legislators, it should be done in the next week.

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

House Bills:

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

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

HB 62  TRANSPORTATION BUDGET  (Oelslager, S.)  This is the Transportation Budget bill and will make appropriations for programs related to transportation and public safety for the biennium beginning July 1, 2019 and ending June 30, 2021.  It will also provide authorization and conditions for the operation of those programs. As noted above, an amended substitute bill passed the House March 7, and hearings are occurring in the Senate Transportation, Commerce and Workforce Committee.

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

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

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

HB 149 TAX EXEMPTION (Merrin, D.)  Introduced March 19 and identical to HB 371 from the last General Assembly, this bill would amend ORC 5709.51 among other code sections and temporarily exempt from property tax the increased value of land subdivided for residential development until construction commences or the land is sold.  The bill would benchmark an “ascribed taxable value” of the newly subdivided parcel, and any increase in taxable value would be exempt from taxation until either (1) Construction of a residential building on that property commences, or (2) Title to the property is transferred for consideration by a qualifying owner to another person.  The construction of streets, sidewalks, curbs, or driveways or the installation of water, sewer, or other utility lines on a subdivided parcel would not cause construction of a residential building to commence for purposes of the bill, and the value of those improvements would thus automatically be exempted from taxation until construction of a residence begins or the property is sold.