Tracked Senate Bills – April 2019

Chris Schmenk
Bricker & Eckler LLP

JobsOhio: Governor Mike DeWine announced April 15 the appointment of Robert C. Smith as chairman of the JobsOhio Board of Directors. Smith is partner and market leader of Cerity Partners’ Cleveland office and has more than 40 years of experience in investing, finance, accounting and business management. Smith has held a number of past and current board roles, including appointments to the boards of Team NEO where he is currently Chair, the Ohio Public Employees Retirement System, the Port of Cleveland and the Ohio Bureau of Workers’ Compensation. Smith has an MBA in finance from Duquesne University and a bachelor’s degree in business administration from Ohio Northern University (ONU), which also awarded him an honorary doctorate of business administration for his years of service as chair of the ONU board of trustees.

Governor’s Budget Bill:  The Biennial Operating Budget Bill (HB 166) was introduced in the House March 25 and under Ohio’s Constitution, must be signed by the Governor by June 30.   The proposed budget appropriates total spending of $69.56 billion in FY 2020, an increase of 4.1% from the current budget, and $71.29 billion in FY 2021, or a 2.5% increase.  A link to the full bill can be found at:  https://www.legislature.ohio.gov/legislation/legislation-documents?id=GA133-HB-166 and the Legislative Service Commission’s Analysis is at: https://www.legislature.ohio.gov/download?key=11470&format=pdf

Transportation Budget Bill:  The Transportation Budget Bill (HB 62) was signed into law by Governor DeWine on April 3.  The bill provides for an additional 10. 5 cents per gallon on gas, 7.5 cents short of the 18-cent increase originally requested by the Governor.  Diesel taxes will rise by 19 cents a gallon.  Both new tax rates will take effect July 1.  Annual fees for electric vehicles will be $200, and fees for hybrids will be $100.

The final bill also provides that:

• front vehicle license plates on vehicles will no longer required as of July 1, 2020;
• the Department of Transportation will conduct a study of an Eastern Bypass in the state;
• the earned income tax credit will be increased;
• compressed natural gas will be taxed at the diesel rate after a five-year phase-in;
• $500,000 funding will be provided for repairs to the North Bass Island docks on Kenny Road;
• ODOT must study the Ohio River’s economic impact, and
• Municipalities and townships may levy an additional $5 license fee.

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

Senate Bills:

SB 1 REGULATIONS  (McColley, R., Roegner, K.)  This measure would require certain agencies to reduce the number of regulatory restrictions and to amend the versions of sections 106.021 and 106.03 of the Revised Code that are scheduled to take effect August 18, 2019, to continue the provision of this act on and after that effective date.  It was referred to the Senate Government Oversight & Reform Committee where a hearing occurred March 5.

SB 8 OPPORTUNITY ZONES  (Schuring, K.)  This bill would authorize tax credits for investments in an Ohio Opportunity Zone.  As introduced, to qualify for the tax credit, investors must invest at least $250,000 during the taxable year, and the amount of the credit allowed shall be equal to one percent of the amount invested.  At a fourth hearing in the Senate Ways & Means Committee, a substitute bill was introduced March 12 which establishes an Opportunity Zone Investment Tax Credit program and a new opportunity zone fund that must be used exclusively for projects in opportunity zones. The new program creates a non-refundable 10% tax credit that that would be capped at $50 million over the course of a biennium. The revisions would prohibit a single entity from utilizing both the proposed program and the Invest Ohio program credit. The bill was passed by the Senate April 3 and referred to the House Economic and Workforce Development Committee on April 16.

SB 37 TAX CREDIT  (Schuring, K.)  This bill would  extend eligibility for and make other changes to the motion picture tax credit.  Among other changes, “Broadway theatrical productions” would become eligible for the credit, the types of expenses upon which the credit is based would be broadened to include post-production, advertising, and promotional expenditures, and the Director of Ohio Development Services Agency would begin awarding motion picture and Broadway theatrical production tax credit certificates in two competitive rounds each fiscal year. The first round of applications would be approved by July 31, and the second round would be approved by January 31.  Five hearings have occurred in the Senate Ways & Means Committee.

SB 39 INSURANCE TAX  (Schuring, K.)  This measure would authorize an insurance premiums tax credit for capital contributions to transformational mixed use development projects.  To qualify, projects must:

(a)        have a transformational economic impact within  the project area approved by the director of the development  services agency;

(b)       be a mixed use development that integrates some  combination of retail, office, residential, recreation,  structured parking, and other similar uses; and

(c)        include at least one building that is fifteen or more stories in height or has a floor area of at least three hundred  fifty thousand square feet.

The bill was assigned to the Senate Finance Committee where a  second hearing occurred April 2.

SB 89   CAREER-TECH EDUCATION AND ENTERPRISE ZONE TAX ABATEMENTS (Huffman, M.) This bill, introduced March 6, would modify the Ohio Revised Code sections relating to enterprise zone tax exemptions and require that if an agreement is negotiated between the legislative authority and the school district in which the project is located to compensate the district for all or part of the taxes exempted, the legislative authority must also compensate the joint vocational school district within which the property is located at the same rate and under the same terms received by the school district.  It has been assigned to the Senate Education Committee where a second hearing occurred April 2.

SB 95 BUSINESS INVESTMENTS  (Peterson, B., Kunze, S.) Introduced as SB 309 in the last General Assembly, this bill would lengthen the maximum term of the job creation tax credit available under ORC 121.171 for businesses making substantial fixed asset and employment investments (and meeting the definition of “megaprojects” as set forth in the bill) and for their suppliers,  authorize commercial activity tax exclusions for receipts of those suppliers from sales to such businesses, and authorize local governments to grant longer term property tax exemptions for such businesses or suppliers.  To qualify as a “megaproject”, projects must involve unique sites, extremely robust utility service, and a technically skilled workforce;  the megaproject operator of the project must compensate the project’s employees at an average hourly wage of at least three hundred per cent of the federal minimum wage under U.S.C. 206, exclusive of employee benefits, at the time the tax credit authority approves the project for a credit under this section; and the project must satisfy either of the following by the metric evaluation date applicable to the project : (i) The megaproject operator makes at least one billion dollars in fixed-asset investments in the project, or (ii) The megaproject operator creates at least seventy-five million dollars in Ohio employee payroll at the project.  The bill has been referred to the Senate Ways & Means Committee.

SB 109  TAX CREDITS  (Schuring, K.)  Introduced on March 13, this bill would establish a Workforce Scholarship Program and authorize the Chancellor of Higher Education to designate five public or private institutions to participate in the program.  It also authorizes the granting of scholarships and tax credits to students who pursue and complete the training programs for in-demand jobs at these designated institutions.  The bill was referred to the Finance Committee on March 21.