Tracked Senate Bills – April 2021
Bricker & Eckler LLP
Ohio’s $162.57B biennial operating budget proceeds through the General Assembly: On April 13, the House Finance Committee accepted a substitute version of HB 110, which was introduced with Governor DeWine’s proposed two-year budget. The House has made many changes, including a decades’ long legislative fix to Ohio’s K-12 school funding. The budget is further described in the legislative updates, below.
The House increased the budget’s General Revenue Fund spending by approximately $410MM – to $74.67B. Beyond GRF, across all Ohio’s fund accounts, the House proposes to spend $162.57B, also representing an increase from the executive budget proposal (by $706.6MM).
This measure now includes the so-called Fair School Funding Plan and, in this Republican-dominated legislature, an obligatory tax cut (a 2% across-the-board cut to Ohio’s personal income tax; as well as a reinstatement of the sales tax exemption for sales of investment metal bullion and coins, repealed in the previous budget).
The proposed education funding overhaul will commence during the 2021-2022 school year, with phasing to occur across six years.
Similar to COVID relief elements included in President Biden’s American Rescue Plan, this state budget includes $100MM for restaurants and bars, $25MM for the lodging industry, $20MM for entertainment venues, and $10MM for new businesses. These programs would be administered by ODSA.
In a related note, the House budget changes include the creation of a Joint Legislative Oversight and Review Committee of Federal COVID Relief Aid to oversee the distribution and spending of federal COVID relief dollars. This committee would have authority to hold hearings, receive testimony, issue reports and make recommendations.
State Controlling Board to Create New Funds Accounts to Accept Federal Stimulus: On April 19, Ohio OBM asked that the Controlling Board approve the creation of three new funds to accept the American Rescue Plan Act’s state and local government stimulus payments.
The three new funds will be:
- State Fiscal Recovery Fund (5CV3) – To accept funds allocated to the state of Ohio from the State Fiscal Recovery Fund from the American Rescue Plan Act. Ohio is estimated to receive approximately $5.5B from the U.S. Treasury to be used for costs incurred through December 31, 2024. Payments are to be made to the State from the U.S. Treasury within 60 days of certification.
- Local Fiscal Recovery Fund (5CV4) – To accept non-entitlement funds allocated through the State of Ohio from the American Rescue Plan Act to non-entitlement units of local government. Ohio local governments are estimated to receive $815MM in funds to be distributed within 30 days of receiving the funds to the local governments. Counties and metro cities will receive Local Fiscal Recovery Fund allocations directly from U.S. Treasury and will not pass through the Ohio OBM.
- Coronavirus Capital Projects Fund (5CV5) – To accept funds allocated to the State of Ohio from the Coronavirus Capital Projects Fund from the American Rescue Plan Act. Ohio is estimated to receive $274MM to carry out critical capital projects directly enabling work, education, and health monitoring, including remote options, in response to the public health emergency. The U.S. Treasury is required to establish the application process for the funds no later than 60 days after the legislation’s enactment.
Notably, Ohio OBM’s request to create the funds “does not establish appropriation authority to expend funds.”
Ohio’s COVID relief measures make progress in the General Assembly: On April 15, the House unanimously approved four bills that are companions to measures originating in the upper chamber – SB 108, SB 109, SB 110, and SB 111 – to authorize more than $2B in funding from the federal CARES Act and Consolidated Appropriations Act of 2021 (signed by the President on December 27, 2020).
The bills seek to accomplish the following:
- HB 167: Sends $465MM to ODSA and ultimately to Community Action Agencies for rental and utility assistance.
- HB 168: Provides money for local fairs, veterans homes and child care centers, as well as supports new businesses and music / entertainment venues, including outdoor and hybrid venues.
- HB 169: Provides $125MM for bars, restaurants and lodging businesses, with grants to bars and restaurants in amounts of up to $30,000 each (amounts to be based on need, occupancy rates and lost revenue).
- HB 170: $857MM for schools.
President Biden’s $2T infrastructure & climate plan update: The Biden Administration’s American Jobs Plan targets at least $1T worth of backlogged infrastructure improvements, according to the Biden Administration, including addressing a nearly 40-year backlog of bridge repairs. The measure would represent the largest increase in federal spending for research and development and public infrastructure since the 1960s.
This effort to rebuild the nation’s roads, bridges, rail lines, and utilities seeks to make a large-scale pivot to renewable energy sources. The plan is large enough that Democrats propose 15 years’ of higher taxes on corporations and wealthy individuals to pay for 8 years’ of infrastructure spending.
Advisors are looking to advance the Biden campaign’s Build Back Better agenda via separate Congressional measures, given the thin Democratic majorities in both the House and Senate. First will be this infrastructure improvement component, which already received condemnation from Congressional Republicans for its size, scope, and proposed funding via tax increases. (It remains whether the current effort to restore Congressional earmarks may help build any bipartisanship in this regard; see federal news item, below.) The President has tapped five cabinet secretaries, including Transportation Secretary Pete Buttigieg, to navigate the plan through Congress, including speaking with Republicans.
If Republican support remains non-existent, the Biden administration likely will pursue passage via reconciliation measure in the Senate to avoid Sen. Mitch McConnell’s threatened filibuster. Second will be a so-called American Family Plan to address income inequalities, child care, and other societal challenges.
The first phase would include funding for roads and bridges ($115B); public transit ($85B); Amtrak and freight rail ($80B): water ports ($17B); airports ($25B); broadband expansion ($100B); water infrastructure, including replacement of lead water pipes in the nation’s public water systems ($111B); and construction of up to 500,000 electrical vehicle charging stations. As to the last element, clean energy transformation courses through every aspect of the Biden administration’s infrastructure plan (rather than as a side issue in a stimulus plan or budget bill). Further illustrations: the measure includes $174B to induce the manufacture and purchase of electric vehicles; and the Plan includes incentives for improving existing buildings’ energy efficiencies (such as PACE-financed improvements).
The American Jobs Plan also includes $180B for basic, government-funded research and development. During the post-WWII era, the federal government funded large amounts of basic research (largely as a Cold War tool), but drastically reduced such investments during the past several decades.
Further, the Plan would spend $300B to promote advanced manufacturing, in direct response to aggressive efforts by the Chinese to dominate this market segment.
The plan’s cost may be offset, at least in part, by raising taxes on corporations, including increasing the corporate income tax rate to 28%, from 21% (the latter was the new, lower rate imposed under the 2017 tax cut bill, which cut the rate from 35%), and forcing multinationals to pay more in U.S. taxes by raising the rate of minimum tax on global income.
(Changes from last month are noted in BOLD):
PENDING LEGISLATION IN THE 134TH GENERAL ASSEMBLY
SJR 2 WATER QUALITY BONDS (Gavarone, T., Yuko, K.) This Resolution proposes to enact Section 2t of Article VIII of the Ohio Constitution to permit the issuance of general obligation bonds to fund clean water improvements.
SB 8 BROADBAND SERVICES (McColley, R.) Introduced on January 21, 2021, this bill addresses broadband expansion, including access to electric cooperative easements and facilities, and to make an appropriation. Note the companion HB 2 in the lower chamber.
This bill is a refresh of House Bill 13 (133rd General Assembly), which failed in the final stretch to enactment during the lame duck last session. Sponsor Sen. Rob McColley (R-Napoleon) notes this version represents a negotiated substitute bill that had been poised for adoption last December.
This bill seeks to establish an Ohio Residential Broadband Expansion Program (R.C. 122.40 et seq.) to induce internet providers to construct last-mile infrastructure to underserved areas, particularly in rural Ohio. Changes since the last General Assembly’s version include moving the program to ODSA, with the agency reviewing grant applications for the proposed Broadband Expansion Program Authority.
This Senate vehicle appropriates $20MM to the ODSA program in state fiscal year 2022.
After three hearings before the Senate Energy & Public Utilities Committee during late January and February, the Senate unanimously adopted the measure on February 10; it now moves to the House, where is has been referred to the House Finance Committee.
SB 10 ELECTRIC RATES (Romanchuk, M.). This bill seeks to change to two (2) FirstEnergy-friendly rate provisions: (a) repealing HB 6’s so-called “decoupling mechanism” that allowed FirstEnergy to lock its annual guaranteed revenue at 2018 levels – or $978MM/year; and (b) repealing the prior state budget bill’s modification to the significantly excessive earnings test (or SEET) determination as to whether FirstEnergy utilities obtained significantly excessive earnings that must be refunded (the budget bill had allowed FirstEnergy to combine figures across its three companies, offsetting gains at Ohio Edison with those from less profitable companies under its umbrella). Note the companion HB 128 in the lower chamber. This legislation leaves unchanged HB 6’s nuclear subsidies for the FirstEnergy power plants.
During February, the Senate Energy & Public Utilities Committee held three hearings, with the Senate unanimously passing the bill on February 17. The bill has been referred to the House Public Utilities Committee.
SB 13 CONTRACT LIMITATIONS (Lang, G.). This bill shortens the period of limitations for actions upon a contract; makes changes to the borrowing statute pertaining to applicable periods of limitations; and establish a statute of repose for a legal malpractice actions. Note the companion HB 53 in the lower chamber. The bill was heard and reported out by the Senate Judiciary Committee in early February, passed the Senate by unanimous vote on February 3, and passed the House by unanimous vote on February 24. The measure was signed into law by Governor DeWine on March 16 and takes effect 90 days hence.
SB 19 TAX EXEMPTION (Schaffer, T.) Introduced on January 26, this bill establishes a property tax exemption for certain property used for wetland mitigation projects. Specifically, this legislation codifies into law a current practice for property used in wetland mitigation projects used by nonprofit organizations. Bill sponsor, Sen. Tim Schaffer (R-Lancaster), noted, “If counties decide that they can charge property taxes on these wetlands, we would drastically hurt development that would normally occur in our districts,”
After the Senate Ways & Means Committee quickly reported out the measure, the Senate unanimously passed the bill on February 24. The House Ways & Means Committee had its second hearing on the measure on March 16.
SB 32 CHARGING STATIONS (Rulli, M.) This bill would require the Director of ODOT to establish an electric vehicle charging station grant rebate program and to make an appropriation. Note the companion HB 47 in the lower chamber. This measure had its first hearing before the Senate Transportation Committee on February 17.
SB 44 ENERGY LAW (Rulli, M., Cirino, J.) Introduced on February 2, 2021, this bill seeks to repeal the nuclear resource credit payment provisions, and amend, and rename as solar resource, the renewable resource credit payment provisions of H.B. 6 of the 133rd General Assembly. Note the companion SB 128 in the lower chamber.
Sponsors Sen. Jerry Cirino (R-Kirtland) and Sen. Michael Rulli (R-Salem) note their proposal takes a more targeted approach to addressing the ongoing uncertainty over the future of last session’s HB 6. Specifically, this bill repeals the nuclear subsidies program portion of HB 6 while maintaining previous bill’s $20MM in annual solar subsidies. All other aspects of HB6 would remain in place. By design, Sen. Cirino noted, “It doesn’t open up the whole of House Bill 6 for negotiation”; the Senator represents a district in which is located one of the subject nuclear energy plants.
This measure was approved unanimously by the Senate on March 2. It was referred to the House on March 9.
SB 45 TAX INDUCEMENTS (Peterson, B., Kunze, S.) Introduced on February 2, 2021, this bill seeks to enhance state and local tax inducements for businesses making substantial fixed asset and employment investments and their suppliers. The measure had its third hearing before the Senate Ways & Means Committee on February 23.
SB 52 WIND FARMS (Reineke, B., McColley, R.) Introduced February 9, 2021, this bill requires inclusion of safety specifications in wind farm certificate applications, modifies wind turbine setbacks, and permits a township referendum vote on certain wind farm and solar facility certificates. Note the companion HB 118 in the lower chamber. In effect, this bill allows local voters to veto turbine and solar projects approved by the Ohio Power Siting Board.
On March 23, the measure had its third hearing before the Senate Energy & Public Utilities Committee, with significant written and in-person testimony submitted. Many of the same opponents in the HB 118 hearing appeared later in the day before this Senate committee to register their same concerns. Opponents offering testimony included the Ohio Chamber of Commerce, economic development organizations, and the Ohio Farm Bureau Federation.
SB 61 PLANNED COMMUNITIES (Blessing, L., Antonio, N.) Introduced on February 17, 2021, this bill concerns condominiums and planned community properties and seeks to make changes to the New Community Law (R.C. Chapter 349).
This measure had its second hearing on March 31 in the Senate Local Government & Elections Committee, during which proponent testimony was received.
SB 83 BROWNFIELD SITES (Williams, S., Rulli, M.) Introduced on February 23, 2021, this bill seeks to require OEPA to conduct a study to determine where brownfield sites are located in Ohio and to make an appropriation.
This measure had its first hearing on March 16 in the Senate Agriculture & Natural Resources Committee, during which joint sponsor testimony was offered from Sen. Michael Rulli (R-Salem) and Sen. Sandra Williams (D-Cleveland) indicated their plan would appropriate $150,000 from State GRF for an OEPA study of brownfield sites, with support from universities, to fill in the gaps in the current inventory program (which relies on voluntary reporting). The bill’s deadline for OEPA would be January 1, 2023.
The sponsors estimated there are approximately 9,000 such brownfield sites in existence in Ohio, but there is no single complete listing.
During the bill’s second hearing on March 23, support was expressed by the County Commissioners Association of Ohio, the Ohio Municipal League, and the Greater Ohio Policy Center.
SB 84 CLEAN OHIO FUND (Williams, S., Rulli, M.) Introduced on February 23, 2021, this bill seeks to make changes to the law relating to the Clean Ohio Revitalization Fund. Note the companion HB 143 in the lower chamber.
This measure had its first hearing on March 16 in the Senate Agriculture & Natural Resources Committee, during which joint sponsor testimony from Sen. Michael Rulli (R-Salem) and Sen. Sandra Williams (D-Cleveland). Outlining their bill, the sponsors noted this measure would re-fund the Clean Ohio Revitalization Fund for cleanup of the sites identified under SB 83 (above), by directing excess liquor profits received from JobsOhio and pledging tem for Clean Ohio bonds. Sponsors noted during the period 2002 through 2013, CORF provided $400MM in grant assistance for brownfield site redevelopment.
During the bill’s second hearing on March 23, support for the measure was expressed by the Greater Ohio Policy Center, the Ohio Land Bank Association, and the Ohio Chamber of Commerce.
SB 97 MUNICIPAL TAXES (Roegner, K.) Introduced on February 25, 2021, this bill seeks to modify municipal income tax employer withholding rules for COVID-19-related work-from-home employees. This measure has been referred to the Senate Ways & Means Committee.
SB 98 TAX EXEMPTION (Antani, N.) Introduced on February 24, 2021, this measure seeks to exempt from sales and use tax things used primarily to move completed manufactured products or general merchandise. The bill has been referred to the
Senate Ways & Means Committee.
SB 108 BUSINESS GRANTS (Huffman, S., Romanchuk, M.) Introduced on March 2, 2021, this bill would provide $100MM in grants to bars and restaurants and $25MM to the lodging industry and make such appropriations. Note the companion HB 169 in the lower chamber.
On March 17, the Senate unanimously passed this spending proposal; the House Economic & Workforce Committee has scheduled this matter for its second hearing to occur on April 21.
SB 109 GRANT PROGRAM (Manning, N., Rulli, M.) Introduced on March 2, 2021, this bill would provide $300MM in grants to small businesses, child care providers, and indoor entertainment venues and make such appropriations. Note the companion HB 168 in the lower chamber. On March 16, at its second hearing, this bill was reported out of the Senate Finance Committee and will proceed to the Senate for a full vote.
On March 17, the Senate unanimously passed this spending proposal; the House Economic & Workforce Committee has scheduled this matter for its second hearing to occur on April 21.
SB 112 TAX FORECLOSURES (Dolan, M.) Introduced on March 2, 2021, this bill seeks to make changes to the law relating to tax foreclosures and county land reutilization corporations. This measure is a re-introduction of the county land bank law changes proposed in August 2020 under companion bills in the previous Ohio General Assembly (HB 755 and SB 356).
Note the companion HB 241 in the lower chamber.
As was the case with the previously introduced bills, SB 112 seeks to make large-scale changes to county land banking law (R.C. Chapter 5722) and the law relating to tax foreclosures (R.C. Chapter 323). This measure was written in coordination with the Cuyahoga County Land Bank and other land bank leaders in Ohio.
During sponsor testimony on March 16 in the Senate Local Government & Elections Committee, Sen. Matt Dolan (R-Chagrin Falls) described his bill as a modernization of land banking in Ohio. Land banking statutes in Ohio were last updated in 2015 by removing population requirements first put in place in 2009, thus making all counties eligible to form county land banks. At present, 59 counties have established land banks across Ohio.
Via written testimony, the Greater Ohio Policy Center stated SB 112 seeks to balance county auditors’ interests across large and small population counties. Specifically, SB 112 requires county auditors to conduct sales of properties from their Forfeited Lands List at least 1X/year, but county auditors would be allowed to exclude certain properties from those sales: “Where a municipal or county land reutilization corporation requests an auditor to exclude a property from a forfeiture sale, SB 112 allows the auditor to so withhold the property, but with a limitation that requires exposure to sale at least once every three years.”
The Committee also received proponent testimony from the Montgomery County Land Bank, the Butler County Land Bank, the Richland County Land Bank, and the Ohio Land Bank Association.
The measure had its second hearing, for opponent testimony, on March 31. No witnesses appeared, although Cuyahoga County Land Bank President & General Counsel Gus Frangos appeared to answer committee members’ general questions.
SB 144 CONSUMER PROTECTIONS (Rulli, M., Williams, S.) Introduced on March 23, this bill would enact the Consumer Protection Call Center Act as to notices required by employers relocating a call center to a foreign country and their eligibility to receive state grants, loans, and other benefits.
SB 152 Task Force Establishment (Hoagland, F.) Introduced on April 6, 2021, this bill would establish the Fraud, Waste, and Abuse Task Force in the office of the Attorney General. This 10-person office would investigate instances of fraud by entities applying for public funds, including grants.
OEDA announces and congratulates the 2021 class of OhioCEDS — Best in Class Ohio Certified Economic Developers
Congratulations to the 2021 Certified OhioCED Economic Development Professionalsread more
(Wilmington, Ohio) The Clinton County Port Authority is pleased to congratulate David Riggs, Director of the SBDC at Miami Regionals, for being named Ohio’s SBDC State Star in 2021.
America’s SBDC, the national association that represents the nationwide network of Small Business Development Centers (SBDCs), annually recognizes one outstanding SBDC employee from each of its 62 members. This outstanding employee exhibits exemplary performance, makes a significant contribution to their state or regional SBDC program, and shows a strong commitment to small business. Using a peer-based selection process, the Ohio SBDC network selected David Riggs for Ohio’s SBDC State Star.read more
Tiffin Foundry and Machine has announced it will purchase new machinery and hire more staff with assistance from a $50,000 JobsOhio Inclusion Grant. Tiffin Foundry has eight employees in Tiffin, and has an additional operation in North Ridgeville, Ohio.
JobsOhio’s grant, secured with assistance from the Regional Growth Partnership, will support a planned $321,923 in machinery and equipment upgrades and three new jobs. In addition, Tiffin Foundry and Machine worked with Tiffin-Seneca Economic Partnership and OhioMeansJobs – Seneca County on other potential incentives to support the company’s growth.read more