Tracked Senate Bills – January 2020
Bricker & Eckler LLP
Legislature Resumes End of January: The House and Senate have resumed Committee activity and will resume full Statehouse activity at the end of January. Priorities are likely to include:
- Capital Appropriations Bill: The bill will provide capital appropriations for FY 2021-2022 to fund maintenance and improvements to Ohio’s physical buildings and properties. Often, additional funding is available for community projects, and House Speaker Larry Householder has indicated that about $150 million will be available this budget cycle. The Legislature set a January 10 deadline for submissions for projects, and the bill should be passed by April 1.
- Sports Gambling: Several bills have been introduced to legalize sports gambling activities in Ohio. House Bill 194 would also create a Sports Gaming Advisory Board to oversee regulation, and it would fall under the purview of the Ohio Lottery Commission. Alternatively, Senate Bill 111 would permit the Ohio Casino Control Commission to regulate sports wagering. Stakeholders from the collegiate level continue to request that college athletics in the state be excluded from both measures. However, no amendments have been accepted on either bill to remove college athletics. Sports gambling will continue to be discussed and debated in 2020. While there is considerable interest in moving forward on the issue, the chambers need to agree on the regulatory body best suited to oversee sports gambling in the state.
- Gun Reform Legislation: Governor DeWine has announced several legislative reforms to address gun violence and increase mental health access and treatment. Senate Bill 221 includes many of the announced reforms, including modifications to the “pink slip” law that allows individuals to be committed for mental health treatment. S.B. 221 allows probate courts to grant safety protection orders which would deny an individual’s eligibility to have a firearm based upon evidence of that individual suffering from mental illness. Speaker Householder has voiced opposition to Senate Bill 221, preferring to focus on the House’s own plan in House Bill 354, which requires information be reported into the background check system. With a group organizing for a possible ballot issue on universal background checks, the conversation surrounding these policies will continue in 2020.
- Ohio’s Energy Policies: There are several noteworthy energy policy items that the Legislature may consider this year. House Bill 246 is a placeholder bill to reform and modernize the Consumers’ Counsel and the Public Utilities Commission. Although a draft of the bill is not yet available, PUCO Chairman Sam Randazzo has mentioned that he wants to address ratemaking and general revised code cleanup for the Commission. Language is expected to be revealed during the first quarter of 2020. House Bill 247 proposes changes to competitive retail electric service in Ohio by allowing electric distribution utilities to offer customer-focused energy services or products and expanding the use of smart grid technology. After several hearings and interested party meetings, a revised version of H.B. 247 will be unveiled in early 2020 addressing concerns raised by opponents of the legislation. Speaker Householder, referring to H.B. 247, recently mentioned that grid modernization is “the next step in terms of electricity and utilities in the state of Ohio.” The House may also continue hearings on House Bill 401, which creates a referendum process in townships on Ohio Power Siting Board Certificates issued for wind farms. Finally, Senate Energy and Public Utilities Chairman Steven Wilson aims to enact a comprehensive energy policy for the state. To do so, the committee is continuing to hold a series of informational hearings in 2020, with topics likely to include fuel diversity, grid modernization, and energy markets and pricing.
- H2Ohio: In H.B. 166, H2Ohio was created as a water quality initiative to find long-term solutions to ensure clean and safe water in Lake Erie and throughout Ohio. This program has sparked several other pieces of legislation. H.B. 7 creates the H2Ohio Trust fund and the H2Ohio Advisory Council to disburse dollars from the trust fund for water quality programs. H.B. 7 was introduced as a solution for long term funding of H2Ohio. However, the Senate has also introduced S.B. 2 which would create a permanent program to protect Ohio’s watersheds under the Ohio Department of Agriculture. Although H.B. 7 and S.B. 2 tackle different problems, both bills attempt to find a permanent solution for water quality controls in Ohio. The Legislature will attempt to come to an agreement in 2020 regarding Ohio’s policy focus for tackling water quality issues.
Bills Being Tracked: Changes from last month are noted below in bold.
SB 1 REGULATIONS (McColley, R., Roegner, K.) This bill would require each state agency to reduce the regulatory restrictions contained in its rules by 30% by 2022, according to a schedule and criteria set forth in the bill. It also prohibits an agency from adopting new regulatory restrictions that would increase the percentage of restrictions in the agency’s rules and requires an agency that does not achieve a reduction in regulatory restrictions according to the required schedule to eliminate two restrictions before enacting a new rule containing a restriction. It allows the Joint Committee on Agency Rule Review (JCARR) to lessen an agency’s required reduction in regulatory restrictions if the agency fails to meet a reduction goal and show cause why the agency’s required reduction should be lessened. Effective January 1, 2023, it limits the total number of regulatory restrictions that may be in effect in Ohio. The bill passed in the Senate May 8 and has been referred to the House State and Local Government Committee, where a first hearing occurred June 12.
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, where a first hearing occurred May 8. The main provisions of this bill were included in the final Budget Bill (HB 166).
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. The bill passed in the Senate May 8 and was referred in the House to the Finance Committee. The main provisions of this bill were included in the Budget Bill.
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, which passed it out of committee with two amendments:
- allowing projects involving two or more connected buildings to qualify for the credit as long as they collectively meet the program’s square-footage requirements, and
- establishing public reporting requirements regarding projects supported by the program.
The bill passed in the Senate June 26 and has been referred to the House Economic & Workforce Development Committee, where a fourth hearing occurred November 6. A substitute bill was introduced December 11 which would:
- Limit the DSA director to approving only four TMUDs per fiscal year with a carryover provision (in lieu of a cap).
- Require ranking of applications by their economic value and transformational impact. Specific consideration will be given to the new state and local taxes generated from the project and its surrounding area. The project that has the most significant transformational impact and has a pro forma that shows the most expeditious schedule for the new state and local taxes to exceed the amount of the tax credit, will be the one that is approved.
- Require a project to go into construction no later than one year after the TMUD credit is approved by the DSA Director, and
- Increase the historic tax credit percentage from 25% to 35% for rural areas.
SB 89 CAREER-TECH EDUCATION AND ENTERPRISE ZONE TAX ABATEMENTS (Huffman, M.) This bill, introduced March 6, would make changes to Ohio’s career-tech education programs. Of interest to economic development, it 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. The bill passed in the Senate October 23 and has been assigned to the House Primary & Secondary Education Committee where second and third hearings occurred January 21 and 23, 2020.
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 from 15 to 30 years 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 (up to 30 years) property tax exemptions (enterprise zones or community reinvestment areas) 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 passed in the Senate June 12 and was referred to the House Ways and Means Committee where a second hearing occurred November 19.
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, where a second hearing occurred October 8.
SB 132 GAS TAX ALLOCATIONS (Williams, S.) This bill would modify the amount of revenue derived from any increase in the motor fuel tax rate that is allocated to local governments and to change the manner in which that revenue is divided between municipal corporations, counties, and townships. It was referred to the Senate Transportation, Commerce & Workforce Committee on May 1.
SB 153 TAX CREDITS (Dolan, M.) Introduced May 21, this bill focused on assisting manufacturers and entities with significant corporate administrative functions in Ohio by amending the state’s Job Retention Tax Credit program under ORC 122.171 to expand eligibility based on new capital investment rather than payroll or employee count. Manufacturers that invest the lesser of either $50 million or 5% of the book value of their tangible personal property used at the project site over a 3 year consecutive period would be eligible. If such manufacturers receive the credit, they must commit to maintain an agreed-upon number of full-time equivalent employees during the term of the credit. Entities with significant corporate administrative functions are eligible if: 1. They are either located in a foreign trade zone, employ at least five hundred full-time equivalent employees, or have an annual Ohio employee payroll of at least thirty-five million dollars; and 2. They make a capital investment of at least $20 million at the project site over 3 consecutive calendar years. Such entities must commit either: 1. To retain at least 500 FTEs at the project site during the term of the credit, or 2. Maintain an annual Ohio employee payroll of at least $35 million for the term of the credit or remain in a foreign trade zone for the entire term of the credit. The bill’s provisions were included in the final Budget Bill (HB 166), and the program should be available soon.
SB 180 DEVELOPMENT BONDS (Schaffer, T.) Introduced August 5, 2019, this bill would authorize the issuance of industrial development bonds by a township and would authorize counties, townships, and municipal corporations to issue industrial development bonds without requiring the county, township, or municipal corporation to designate a community improvement corporation as its agency for industrial, commercial, distribution, and research development. On September 10, the bill was referred to the Senate Finance Committee where a first hearing occurred October 1.
SB 212 NEIGHBORHOOD DEVELOPMENT AREAS (Schuring, K.) Introduced October 7, this bill would authorize townships and municipal corporations to designate areas within which new homes and improvements to existing homes are wholly or partially exempted from property taxation. The designation would be done by a resolution or ordinance that includes the following:
(a) A description of the boundaries of the neighborhood development area;
(b) Identification of the municipal or township officer or employee who will accept applications;
(c) Findings to demonstrate that the designation of the area will encourage the construction of new single-family dwellings, or the improvement of existing single-family dwellings, that in either case would be unlikely to occur in the absence of such a designation;
(d) The number of years during which the area will be designated as a neighborhood development area or that the area will be designated as such for a continuing period of time;
(e) A description of how the designation of the neighborhood development area would (i) improve the overall quality of life in the township or municipal corporation and (ii) cause additional property tax revenue to be generated once exemptions no longer apply than if the area had not been designated;
(f) The percentage of value that will be exempt from taxation which shall be seventy per cent of assessed value or, if the approval of the board of education of each school district within which parcels in the area are located is obtained, one hundred per cent .
The legislative authority or board may not include in the designated areas any parcel that is already subject to an exemption authorized under a community reinvestment area (CRA) or tax increment financing (TIF).
If the intended exemption if 100%, written notice must be provided to the board of education of the affected school district, which may approve or disapprove the designation of the neighborhood development area not later than 14 days prior to the date intended for the proposed municipal or township action. If the board of education fails to timely certify a resolution to the board of township trustees or the legislative authority of the municipal corporation, the board of education shall be considered to have approved of the designation of the neighborhood development area. If all boards of education that receive notice approve the designation of the neighborhood development area, the board of township trustees or legislative authority of the municipal corporation may adopt a resolution or ordinance prescribing a percentage of value under division (B)(1)(f) of this section of one hundred per cent.
The bill has been assigned to the Senate Ways & Means Committee, where a third hearing occurred December 17. Concerns expressed in testimony included the ineligibility under the bill of rental housing, the lack of authority for counties to participate in the program, the possible adverse impact on the preservation of farmland and the need for the program given similarities to the existing CRA program.
SB 219 APPRENTICE PROGRAM (Williams, S.) Introduced October 15, this bill would empower the Ohio Departments of Education and Higher Education to establish a career pathways apprentice program for high school grades 9-12. The purposes of the program would be to establish partnerships between schools, businesses, communities, local government entities, and nonprofit organizations to create career pathways for apprenticeships in the following professions: (a) Manufacturing; (b) Information technology; (c) Financial services; (d) Business operation (e) Healthcare, and (f) Education. The program would also be charged with providing information and technical assistance to high school students who enroll in the program and reducing obstacles to and ensure compatibility with division (J)(3) of section 3313.603 of the Revised Code. The program may incorporate or work in conjunction with other apprentice and pre-apprentice programs already in operation under the Revised Code.
It has been referred to the Senate Education Committee.
SB 234 WIND REGULATIONS (McColley, R.) This bill, introduced November 6, is a companion bill to HB 401 and its provisions are identical. A first hearing occurred December 10 in the Energy and Public Utilities Committee.
SB 257 ELECTRIC VEHICLES (O’Brien, S., Rulli, M.) Introduced December 23, this bill would authorize tax incentives for the purchase of plug-in electric motor vehicles and charging stations. It has been referred to the Ways and Means Committee.
SJR 3 TAX INCREASES (Burke, D.) Introduced December 11, this Senate Resolution proposes to enact Section 7 of Article XII of the Constitution of the State of Ohio to require that any increase in income tax rates be approved by a supermajority (two-thirds) of the membership of each house of the General Assembly. If the Resolution is approved by three-fifths of the members of both the House and the Senate, then the proposed amendment would be submitted to the electors of the state to be voted on at the general election to be held on November 3, 2020. The measure was referred to the Ways and Means Committee December 17 where a first hearing occurred January 21, 2020.
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