Tracked House Bills – March 2021
Bricker & Eckler LLP
More COVID Relief proposed in Ohio General Assembly: Lawmakers are proposing another $2.15B in funding for statewide distribution as President Biden’s federal package (totaling $1.9T) winds through the U.S. Congress.
Bills were proposed March 2 in the Ohio House and Senate to push funding out to schools, businesses and a variety of other Ohio entities. This state-level aid is sourced from the federal COVID relief package signed by the former president on December 27, 2020, with the state’s General Revenue Fund as another funding source.
Relevant to economic developers, this state aid package includes:
Senate Bill 109 / House Bill 168:
- $150MM for a second round of small business grants;
- $112MM for child care providers;
- $20MM for indoor entertainment grants; and,
- $10MM for new business grants.
Senate Bill 108 / House Bill 169:
- $100MM for bars and restaurants, and,
- $25MM for lodging businesses.
Debate rages regarding township referenda of wind & solar projects: We’re closely tracking the companion bills in the Ohio General Assembly (SB 52 and HB 118, each described below) that would subject wind and solar projects to potential referenda by township electors.
On March 9, the Senate Energy & Public Utilities Committee and the House Public Utilities Committee received nearly 100 pieces of testimony, most of it in written form. In-person testimony tended to reflect arguments around property values and a distrust in the power siting process, with proponents testifying that wind and solar projects should be located in industrial zoned areas or secure special use permits for areas of the respective townships. Commercial developers and business groups are arguing their opposition to the measures. Noted one witness, there are “deep seeded hard feelings” on both sides.
Debate rages regarding CRA law changes: On March 9, the House Ways and Means Committee heard opponent testimony from witnesses who argued HB 123 (described below) would disrupt the balance between economic developers and school districts.
The Ohio Association of School Business Officials (OASBO) acknowledged the role of CRAs and other economic development tools, noting they must be “implemented carefully” to protect school districts and their students. In particular, OASBO expressed its concern with increasing from 50% to 75% those CRA abatement thresholds requiring school board approval. Further, HB 123 proposes eliminating the requirement to share income taxes if the enabling municipality imposes an income tax; to this point, OASBO pointed out the original drafters of the 1994 law change “put a lot of effort into it.” Finally, OASBO noted the current CRA law gives school districts a “seat at the table” and they want those provisions to be maintained. These comments were joined by the Buckeye Association of School Administrators (BASA) and the Ohio School Boards Association (OSBA).
Private broadband access expansion effort announced: Charter Communications announced it will expand high-speed internet availability to 112,000 unserved homes and businesses across Ohio. Funded by $450MM in private dollars and $106MMM in federal funding via the Federal Communication Commission’s Rural Digital Opportunity auction, this is part of a national expansion by private providers.
Congress gives final approval to President Biden’s $1.856T American Rescue Plan Act of 2021 (ARPA): On Wednesday, March 10, nearly on a party-line vote, the U.S. House passed the Senate’s version of the American Rescue Plan Act of 2021. This is the second-largest pandemic aid bill, following the $2.2T stimulus package passed in 2020. President Biden then signed the measure the next day, Thursday, March 11.
Formally, Section 9901 of HR 1319 (117th Congress) provides $350B to state and local governments, to be available through December 31, 2024. The first tranche of these funds are to arrive to political subdivisions within 30 days of the State receiving ARPA funds (which themselves are to arrive to the State within 60 days of ARPA’s passage).
The entire ARPA measure includes the following levels of COVID relief:
- $350B to state and local governments;
- $10B for critical infrastructure projects;
- $14B for vaccine distribution efforts;
- $130B to school districts;
- $30B to public transit agencies;
- $45B in rental, utility, and mortgage assistance payments;
- Up to $1,400/recipient in direct payments to taxpayers, with caps set at:
- Individuals making $80,000/year
- Single parents making $120,000/year
- Couples with household income of $160,000/year
- Unemployment benefits have been extended (but not increased) through September 6, 2021; and,
- A 1-year expansion to all taxpayers of child tax credits of $300/child up to age 5 and $250/child ages 6 to 17.
This is a far larger stimulus plan than the ARRA package passed during the early stages of the Obama Administration (in response to the home mortgage loan crisis). That plan ($787B) is widely viewed by economists as having been too small to effect any lasting impact on the economy. From a political perspective, Democrats in Washington have a dim view the 2008 deal, as that stimulus package had been reduced to gain Republican support – which never materialized. In this current aid package, Democrats charged ahead, concluding there was no deal to be had with Republicans that would meet the current needs of the pandemic-ravaged economy.
Last week, Jamie Dimon, chief executive of JPMorgan Chase, noted his inflation concerns as the economy may overheat with President Biden’s level of COVID stimulus; this has been voiced by many political talking heads and Wall Street traders. But the Federal Reserve Chairman, Jerome Powell, has expressly stated there is little cause for worries about inflation: the Fed will not raise interest rates until it sees the economy at full employment (i.e., less than 5% unemployment), inflation above 2% (i.e., consumer price index increases in the costs of goods), and evidence such price increases are poised to remain permanent. Chairman Powell said this month, “There’s a difference between a one-time surge in prices and ongoing inflation.”
PENDING LEGISLATION IN THE 134TH GENERAL ASSEMBLY
HB 2 BROADBAND SERVICES (Carfagna, R., Stewart, B.) Introduced on February 4, 2021, this bill concerns broadband expansion, including access to electric cooperative easements and facilities. Note the companion SB 8 in the upper chamber.
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). Now in the Senate, the measure had its third hearing before the Financial Institutions & Technology Committee on March 16.
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 second hearing in the House Transportation & Public Safety Committee on March 2.
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. 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 two-year transportation budget (State Fiscal Years 2022 and 2023). Proposed by the DeWine Administration, this budget includes $3.5B in expenditures during SFY 2022 (4% increase) $3.3B in SFY 2023 (8% decrease).
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. The measure has been referred to the Senate Transportation Committee, where it will have its first hearing on Wednesday, March 17.
HB 91 PUBLIC FACILITY PARTNERSHIPS (Patton, T.) Introduced on February 9, 2021, this bill would authorize certain public entities to enter into public-private initiatives with a private party through a public-private agreement regarding public facilities. This bill had its first hearing on March 10 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).
The measure was scheduled for its fourth House Finance Committee hearing on March 11.
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 under the as-introduced bill.
- Rural Industrial Park Loan Program: Although this program was reinstated with $25 million in the current state operating budget, HB 110 zeroes out this program in SFY 2023. As of this writing, the as-introduced version of HB 110 appropriates $10MM to this loan fund for SFY 2022 and zero ($0) in SFY 2023.
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 9, the House Public Utilities Committee held its second hearing on the measure, with significant written and in-person testimony submitted, for-and-against.
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.”
HB 128 ELECTRIC LAWS (Hoops, J., Stein, D.) This bill seeks to make changes regarding electric utility service law, to repeal certain provisions of 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.
On March 10, the House voted 86-7 for the proposal, which now heads to the Senate for consideration (and senators have already unanimously passed similar language in SB 10 and SB 44).
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.
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 16, this measure was reported out of the House Financial Institutions Committee; a House floor vote is scheduled for Wednesday, March 17.
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.
On March 10, this measure had its first hearing in the House Economic & Workforce Development Committee.
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.
During sponsor testimony before the House Ways & Means Committee on March 10, Rep. Jay Edwards (R-Nelsonville) and Rep. Kris Jordan (R-Ostrander) stated the bill repeals the temporary law change enacted last session (HB 197, 133rd General Assembly) as a COVID response. That bill provided that cities where the remote workers were employed before the pandemic would continue to receive income tax revenue for 30 days after the end of Ohio’s emergency health declaration, irrespective of the location of workers’ residences, where they have been working from home.
On March 16, the bill was to have its third hearing before the Committee.
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 10, this bill had its first hearing in the House Economic & Workforce Committee; this measure is scheduled for its second committee hearing on Wednesday, March 17.
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 10, this bill had its first hearing in the House Economic & Workforce Committee; this measure is scheduled for its second committee hearing on Wednesday, March 17.
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. This measure has been referred to the House Economic & Workforce Development Committee.
Sometimes it only takes a simple conversation, a spark that lights the fire of collaboration and community partnerships. The simple conversations between OhioMeansJobs-Paulding County and the Paulding County Economic Development Office led to a meeting of the minds between the aforementioned pair, Vancrest of Payne, and Northwest State Community College.read more
The Ohio Department of Development (Development) announced today that the application for the new Transformational Mixed-Use Development Program is open. The program provides a tax credit for major, mixed-use developments in Ohio. Applications are now available on Development’s website.read more
Ohio’s 2022-2023 budget recently signed by Governor DeWine, allocates $500 million in new brownfield funding. Funding will be administered by the Ohio Department of Development (ODOD) which must adopt rules for allocation of brownfield funding and the demolition program. The rules will determine project eligibility and administration of the program.read more