Tracked House Bills – October 2017
Bricker & Eckler LLP.
Amidst campaigns, ballot issues and preparations for Election Day on November 7, the Legislature has continued its important work. New bills and changes are noted below in bold.
HB 10 CROWDFUNDING (Arndt, S.) This bill was introduced in the House February 1 and would permit intrastate equity crowdfunding under certain circumstances. The bill would provide an exemption from registration under the Ohio Securities Law for certain crowdfunding initiatives. The bill passed in the House on June 21 and was referred in Senate (6/28/2017) to the Transportation, Commerce & Workforce Committee. The Committee held its first hearing with sponsor testimony September 6 and a second hearing October 11. Proponents of the bill testified that this legislation authorizes the use of intrastate crowdfunding as a means of purchasing a ‘stake’ or a ‘share’ of the business, creating uniformity and guidelines on the practice. The legislation would allow Ohioans to invest directly in startup businesses through an online portal, known as the OhioInvests Portal. This portal will provide the intermediaries with a means to offer and sell the securities to investors. Proponents also said that more than 30 states have adopted similar legislation and that Ohio, North Dakota and South Dakota are the only Midwestern states that lack an intrastate crowdfunding program.
HB 49 BIENNIAL BUDGET (Smith, R.) Governor Kasich signed a state operating budget bill into law on June 30. Before doing so, however, he line-item vetoed 47 items. The House then reconvened July 6 and overrode 11 of the vetoes. The Senate reconvened August 22 and voted to concur with the House on 6 veto overrides, as noted below. The legislature now has until the end of the General Assembly (December of 2018) to override any of the remaining Governor’s vetoes. Compromise discussions are apparently occurring between the Legislature and the Administration on various topics including local revenue lost by counties and transit authorities due to the replacement of the Medicaid managed care sales tax (Item 33 below), other matters relating to Medicaid and a provision that would have given the legislature power to appoint members to the Oil and Gas Leasing Commission, instead of the governor.
The legislature announced in late September that a compromise may have been reached on replacing local revenue lost as part of the Medicaid managed care sales tax replacement. Senate President Larry Obhof said the proposal could be added to Senate Bill 8 (school technology and safety upgrades) that is headed to a conference committee in order to house budget changes. The Senate named Senators Scott Oelslager (R-N. Canton), Randy Gardner (R-Bowling Green) and Sandra Williams (D-Cleveland) to the conference committee. On October 2, the House named Representatives Ryan Smith, Kirk Schuring, and Jack Cera.
The 6 veto overrides with which the Senate concurred include those noted below:
Item 3 – Controlling Board Authority: Deletes limits on the Controlling Board’s ability to adjust appropriations and create new funds. Veto overridden by both House and Senate
Item 23 – Medicaid Coverage of Optional Eligibility Groups: Eliminates the prohibition on the Department of Medicaid from covering any new, optional groups “unless expressly permitted by statute” because this would violate federal law requiring there be a single state agency in charge of administering the Medicaid program. Veto overridden by both House and Senate
Item 26 – Medicaid Rates for Neonatal and Newborn Services: Eliminates the provision that would require that the Department of Medicaid set rates for certain neonatal and newborn services at levels equal to 75 percent of the Medicare rates for those services, and forces the Medicaid director to reduce the rates for other services to avoid an increase in Medicaid expenditures. Veto overridden by both House and Senate
Item 27 – Medicaid Rates for Nursing Facilities: Eliminates the provision that makes numerous changes in the formula used to determine Medicaid payment rates for nursing facility services, including eliminating portions of the reimbursement formula that are focused on quality and accountability measures. Veto overridden by both House and Senate
Item 31 – Behavioral Health Redesign: Eliminates the provision requiring the Ohio Department of Medicaid delay the addition of behavioral health services into managed care until July 1, 2018. Veto overridden by both House and Senate
Item 33 – Health Insuring Corporation Franchise Fee: Deletes the provision that would require the Department of Medicaid to ask the federal Centers for Medicare and Medicaid services whether the franchise fee may be increased through the health insuring corporation (HIC) franchise fee and, if the fee may be so increased, to request approval for the increase. Veto overridden by House (this is apparently the provision that would mitigate the loss of Medicaid managed care organization sales tax that goes to counties and regional transit authorities)
Item 34 – Controlling Board Authorization Regarding Medicaid Expenditures: Deletes the provision requiring the director of budget and management to transfer money from the General Revenue Fund to the Health and Human Services Fund and requiring the Medicaid director to request the Controlling Board to authorize expenditures from the Health and Human Services Fund for purposes of paying for the Medicaid program. Veto overridden by both House and Senate
HB 53 UNION DUES/RIGHT TO WORK (Becker, J.) This bill was introduced in mid-February by Representative Pete Becker from Clermont County. Co-sponsors include Representatives Hood, Brinkman, Dean, Thompson, Vitale, Goodman, Riedel, Roegner, Merrin, Antani, Zeltwanger and Keller. It would remove any requirement under the Public Employees Collective Bargaining Law that public employees join or pay dues to any employee organization, prohibit public employers from requiring public employees to join or pay dues to any employee organization and prohibit an employee organization from being required to represent public employees who are not members of the employee organization. The bill was referred Feb. 14 to the House Finance Committee. No hearings have yet occurred.
HB 69 TIF DISTRICTS (Cupp, R.) This bill would require reimbursement of certain township fire and emergency medical service levy revenue forgone because of the creation of a municipal tax increment financing district. The board of township trustees may, by resolution, waive the application of the reimbursement or negotiate with the municipal corporation that created the district for a lesser amount of payments in lieu of taxes. In sponsor testimony, Representative Robert Cupp said the bill will assist townships that provide fire, emergency medical and ambulance services to both the township and to a municipal corporation located within the township that does not provide its own. This bill gives townships the choice of collecting the reimbursement, waiving it, or negotiating a partial reimbursement of the money the levy would have raised but for the TIF, Representative Cupp explained. The bill only applies prospectively and to incentive district TIFs created by municipal corporations where townships provide the fire, emergency, or rescue services pursuant to a levy enacted on or after January 1, 2006. The bill passed in the House June 21 and was referred in the Senate to the Ways & Means Committee where on October 4, a fourth hearing with Opponent’s Testimony was held. Tom Hart, legal counsel of the Building Industry Association of Central Ohio, said in written testimony the legislation is an attempt to erode TIF law and will have unintended consequences. He said the bill could make it more difficult to build affordable housing in central Ohio and “amounts to unilateral disarmament in the face of stiff challenges from regions and states we compete against.” A 5th Hearing with no testimony occurred October 11, and the Senate Ways and Means Committee apparently amended the bill to include language allowing for amendments to Joint Economic Development Zones, so residents of townships aren’t subject to double income taxation. Further information will be provided once a copy of the amendment is obtained.
HB 102 SCHOOL FUNDING (Brenner, A.) This bill, introduced March 1 and referred to the House Finance Committee, would replace locally levied school district property taxes with a statewide property tax and require recipients of certain tax exemptions to reimburse the state for such levy revenue lost due to those exemptions. It would also increase the state sales and use tax rates and allocate additional revenue to state education purposes; to repeal school district income taxes; require the Treasurer of State to issue general obligation bonds to refund certain school district debt obligations; create a new system of funding schools where the state pays a specified amount per student that each student may use to attend the public or chartered nonpublic school of the student’s choice, without the requirement of a local contribution; eliminate the School Facilities Commission; eliminate the Educational Choice Scholarship Pilot Program, Pilot Project Scholarship Program, Autism Scholarship Program, and Jon Peterson Special Needs Scholarship Program; eliminate interdistrict open enrollment; require educational service centers to transport students on a countywide basis, and permit school districts to enter into a memoranda of understanding for one district to manage another. It was referred to the House Finance Committee, and a June 20 hearing was continued.
HB 114 RENEWABLE ENERGY (Blessing, L.) This bill, introduced March 8, is very similar to last year’s HB 554 except it would: convert the renewable energy standards to goals indefinitely, rather than for a two year period; permit residential customers of a distribution utility or electric services company to opt out of any rider, charge or other recovery mechanism designed to recoup the cost of renewable energy; clarify that renewables are bypassable charges, rather than nonbypassable charges, and specify that the 12.5% renewable energy goal to be attained by 2027 will end at that time and not continue indefinitely. The bill passed in the House March 30 and moved to the Senate, where it was referred to the Energy and Natural Resources Committee. Hearings occurred June 7 and 14. A third hearing with Opponent’s Testimony will occur Wednesday, October 18 in the Senate Finance Hearing Room at 2:30 pm.
HB 122 ECONOMIC DEVELOPMENT (Hambley, S., Rogers, J.) Introduced March 9, this bill would establish a Regional Economic Development Alliance Study Committee to study the benefits and challenges involved in creating regional economic development alliances. Senate Bill 97 is a companion to this bill. The bill is relatively simple in that it creates a study committee to look at the pros and cons to establishing regional economic development alliances. The committee is made up of 3 members of the House; 3 members of the Senate; the Governor, or his designee; 2 persons from academia engaged in a relevant field of study (appointed by the co-chairs of the committee); 2 economic development professionals (appointed by co-chairs of the committee); and the chair of the Regional Prosperity Initiative (or their designee) as a nonvoting member. Specifically the committee is charged with studying enhancing collaboration for successful regional economic development; shared services; and also the mobilization of resources among alliance members. The committee is directed to consult with county commissioners, township trustees, city councils and mayors, members of statewide and regional organizations that represent political subdivision, and members of chambers of commerce. The bill was reported out of House Committee May 10 and passed in the House September 13. Meetings have occurred with House Sponsor Representative Hambley regarding the possible addition of an OEDA representative as an ex officio member of the Study Committee.
HB 155 COMMERCIAL VEHICLE TRAINING (Sprague, R., Howse, S.) This bill was introduced March 23 and would authorize a nonrefundable tax credit to be taken against either personal income tax or commercial activity tax liability for expenses incurred by an employer to train a commercial vehicle operator. Under the proposed program, employers would submit to the Director of the Development Services Agency, by December 1, eligible training expenses expected to be incurred during the next calendar year. The ODSA Director would then certify up to $50,000 per employer of such expenses as being eligible for tax credits. After incurring eligible training expenses, employers could then apply to ODSA for tax credits in amounts equal to one-half of the incurred eligible expenses. On May 1, it was referred to the House Ways & Means Committee, where a hearing with sponsor’s testimony occurred May 16.
HB 166 WORKFORCE DEVELOPMENT (Reineke, B., Cupp, R.) Originally introduced in January, a substitute bill was introduced in April that would revise the laws governing the state’s workforce development system, programs that may be offered by primary and secondary schools, certificates of qualification for employment, and the Opportunities for Ohioans with Disabilities Agency, and would designate the first week of May as In-Demand Jobs Week. Many of those provisions were adopted in the Biennial Budget Bill, so another substitute version has been introduced, which shifts the focus to an In-Demand Jobs Week in May and revises the training requirements for alternative resident educator licenses, allowing for-profit entities such as Teach for Tomorrow to provide training to prospective alternative educators. A hearing is scheduled in the Higher Education and Workforce Development Committee September 20.
HB 173 TAX CREDITS (LaTourette, S., Patton, T.) This bill was introduced April 5 and would provide that compensation paid to certain home-based employees may be counted for purposes of an employer qualifying for and complying with the terms of a Job Creation Tax Credit. It was referred on May 1 to the House Ways & Means Committee, and a first hearing with Sponsor’s testimony occurred May 9.
HB 178 NUCLEAR ENERGY (Devitis, T.) This is a companion bill to SB 128 (see explanation there) and was introduced April 10. It was referred to the House Public Utilities Committee, where several hearings have occurred. Sponsors in both chambers are continuing conversations with interested parties in order to earn support for these bills. Representative Robert Cupp recently assumed the role as Chair of the House Public Utilities Committee and confirmed that talks are still ongoing. Additionally, House Speaker Rosenberg recently appointed members to an ad hoc House task force charged with studying this bill and other energy issues in the coming months (Speaker’s Task Force on Energy Policy).
HB 203 SUMMER JOBS (Barnes, J.) This bill was introduced May 9 and would require the Director of Development Services to establish a youth summer jobs pledging initiative to increase access to summer employment opportunities for high school and college youth. It was referred to the Higher Education and Workforce Development Committee, where one hearing has occurred and a second hearing with proponents’ testimony occurred September 20.
HB 281 BROADBAND EXPANSION (Carfagna, R.) This bill, introduced June 20, would establish the residential broadband expansion program within the Development Services Agency to award matching grants for last mile broadband expansion in municipal corporations and townships and to make an appropriation. It was referred to the House Finance Committee, where a first hearing with sponsor’s testimony occurred September 20. Sponsor Representative Rick Carfagna said the measure would help make expensive connections for broadband internet less of a stretch for communities where there is currently no online access. According to a recent Ohio State University study, about a million Ohio households don’t have access to an internet connection, many of them being in rural areas where companies have determined it’s not financially feasible to build infrastructure, the sponsor said. Under the bill, municipalities could work with service providers to share funding of the expansion through matching state grants and video service provider fees that municipalities charge. He said he expects to amend the bill to require a minimum 10 mbps download and a 1 mbps upload speed, but it’s possible companies will offer higher speeds.
HB 292 OHIO RESIDENCY (Scherer, G.) Introduced June 27, this bill would modify the test for determining an individual’s state of residence for income tax purposes. It was referred to the House Ways & Means Committee, where a first hearing with sponsor’s testimony occurred September 19. The bill would add to the requirements to prove out-of-state residency by requiring a showing that the applicant did not: 1) claim a federal depreciation deduction (which is available only for property used in business or held for the production of income — e.g., as rental property) for an abode located outside the state, which the person was required to have for the entire taxable year under current law; 2) hold a valid Ohio driver’s license or identification card; 3) receive the benefit of an Ohio homestead exemption or 4. receive a tuition discount based on residency for attending an Ohio institution of higher education. A second hearing occurred October 10, where proponents testified that the bill would “restore certainty” for taxpayers by addressing a lingering issue created by a 2015 Supreme Court ruling. The court determined that even if an individual’s circumstances falls under the “bright-line residency statute,” common law domicile principles still apply and may rebut the statute’s otherwise irrefutable presumption of non-Ohio residency.
HB 342 TAX LEVIES (Merrin, D.) Introduced September 11, this bill would permit local tax-related proposals to appear only on general and primary election ballots and not on an August special election ballot and would also modify the information conveyed in election notices and ballot language for property tax levies.
HB 371 PROPERTY TAX (Merrin, D.) This bill, introduced October 4 would exempt from property taxation 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. The bill was referred October 10 to the Ways and Means Committee.
HB 378 BROADBAND GRANTS (Smith, R., Cera, J.) This bill, introduced October 10, would create the Ohio Broadband Development Grant Program within the Development Services Agency and would provide funds to extend broadband service to unserved areas of the state. The program would provide incentives for competing providers of telecommunications service to provide advanced, high-quality telecommunications service construction of broadband infrastructure to serve unserved areas. Construction shall include the acquisition and installation of middle-mile or last-mile infrastructure, grant project planning, obtaining construction permits, construction of facilities, purchasing equipment, and installation and testing of the broadband service. Those eligible to apply for grants include Private businesses, Political subdivisions, Nonprofit entities organized to provide telecommunications services and Co-ops organized to provide phone and internet services. Grant amounts awarded under section shall not exceed the lesser of Fifty per cent of the total project cost or Five million dollars.
A new program — the Ohio Maritime Assistance Program program — is providing funding to ports along the Ohio River and Lake Erie or businesses within ports.
The Program began accepting applications from ports in late January and will continue through March 27. The program is making available $11 million through June 30 and an additional $12 million for the 12 months ending June 30, 2021.read more
During fall 2019, the General Assembly changed Ohio law governing tax increment financing (“TIF”) exemptions in a big way. For certain TIF projects, local communities can extend the exemptions – and therefore continue to redirect property tax millage to necessary public infrastructure improvements – up to 30 additional years.read more
(COLUMBUS, Ohio)—Lt. Governor Jon Husted, in his capacity as Director of the Governor’s Office of Workforce Transformation, today announced the launch of the Industry Sector Partnership grant program, which was funded through the state operating budget.read more