Tracked Senate Bills – June 2021
Bricker & Eckler LLP
Senate leader on how to use State’s $5.4B ARPA Allocation: Broadband & Brownfields: Not counting any American Rescue Plan Act funds to local governments, Ohio is expected to receive approximately $5.4B in federal COVID-19 relief stimulus funds. At the time of this writing, Ohio has received half ($2.7B) from the U.S. Treasury in the first tranche of funding; the funds must be committed by September 30. We expect these funds to be appropriated by the Ohio General Assembly in a stand-alone bill, outside the scope of the pending state operating budget (HB 110).
Senate President Matt Huffman (R-Lima) said during the week of May 24 the State will seek to first pay back the federal government for unemployment compensation outlays made during the pandemic (approximately $1.8B). As to the remaining $900MM in this first tranche of funding, Sen. Huffman noted his two priorities: broadband expansion and brownfield remediation. “There are a lot of buildings that are never going to be used again that need to be taken down,” he said. (Admittedly, this public statement by the Senator in May is somewhat at odds with his June handling of the state budget bill’s appropriations for broadband expansion. Such is politics.)
(Formal) bipartisan talks ended as of June 8 for federal infrastructure bill: President Biden cut off negotiations with lead Republican negotiator, Senator Shelley Moore Capito of West Virginia, via phone call on Tuesday, June 8. He made clear the gulf between the Senate Republicans and the Administration was too wide; the last counter-offer from Sen. Moore Capito was to add $50B to her last infrastructure spend amount.
The move to inject significant federal spending to the county’s network of roads, bridges, water pipes and other physical infrastructure now will proceed either (1) under the Senate’s budget reconciliation process to avoid the filibuster or (2) via a group of centrist senators who have been working separately on their own infrastructure plan. President Biden called the latter group individually and urged them to find a solution.
To this point in the process, President Biden had cut his proposal from $2.3T (initial) to $1.7T (formal counteroffer proffered during May), and finally to $928B. His last proposal seeks to fund the measure by enforcing tax evasion, closing a number of business tax loopholes, and imposing a new minimum tax on large corporations that don’t otherwise pay federal income taxes.
Another area of discussion is to kill two birds with one stone: namely, to repurpose at least some of the $350B Local Fiscal Recovery Fund allocations to roads, bridges, and public transit. The idea caught wind in Washington after first being proposed by Sen. Mitt Romney (R – Utah) during the week of May 17, who noted in reference to the current form of federal stimulus to counties, metro cities, and nonentitlement units of local government: “They don’t know how to use it. They could use that money to finance part of the[ir] infrastructure[.]”
Some states now are forecasting revenues that are above pre-pandemic levels, particularly among those that do not rely on the tourism or hospitality industries for tax revenues. One data point, prepared by the Committee for a Responsible Federal Budget, indicates state and local revenues are tracking +7% higher than their levels prior to the COVID-19 public health emergency.
Nation’s pivot to net-zero carbon emissions: With the Ohio General Assembly’s current consideration of wind and solar local referendum bills (HB 118 and SB 52, the latter of which now has been substantially rewritten), the country’s reshaping landscape to achieve net-zero emissions by 2050 deserves mention.
President Biden has re-committed the US to the Paris Accord and to bring down this country’s carbon emissions by 2050 to “net-zero,” meaning we would eliminate as much greenhouse gas as we emit each year.
According to Princeton University’s Net-Zero America Report, this country now has the technology and resources to reach net-zero emissions by 2050. But there are important considerations:
- How to distribute the renewable energy generated from wind and solar projects? Coal, natural gas, and nuclear projects were built near (or in tandem with) high-voltage transmission lines to carry power. The US does not have the infrastructure to move renewable energy along transmission lines across regions. Doing so is expensive and complicated, as transmission lines must be permitted and placed along site-assembled corridors. The current school of thought is to place more renewable energy generating projects near population centers, to avoid the transmission line riddle.
- Where are those renewable energy generation projects placed? To site a wind farm is to change the view, as strenuous testimony has made clear during committee hearings for HB 118 and SB 52. But farmers can generate as much as 20X’s the revenue, per acre, from wind or solar than from planting fields.
- Can publicly owned land accommodate a sufficient number of renewable energy projects? It is understood the places with the best sun and wind are in the US southwest and in the Rocky Mountains, on land owned by the public. Much will depend on the Biden Administration fast-tracking permits to allow wind and solar arrays to be built in short-order.
- What role for brownfields? Wind and solar projects can be built on remediated industrial sites, former landfills, and other brownfields. With the Ohio Senate President’s comments encouraging as least some of the state’s American Rescue Plan Act funds to brownfield remediation (see note, immediately below), coupled with the Ohio Senate’s unanimous passage of SB 83, to study and list all brownfields across the state, this may offer an interesting economic development opportunity.
134TH GENERAL ASSEMBLY – PROPOSED & ENACTED LEGISLATION
(Changes from last month are noted in BOLD):
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, which has been signed into law by Governor DeWine.
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 fourth hearing on the measure on June 15, 2021, during which amendments were made to reflect minor changes in this tax exemption’s application filing process. The measure has also been revised to include language from HB 51’s proposed process by which county auditors could initiate themselves (i.e., without need for property owner’s application) any changes to taxable value arising from destroyed / damaged property.
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. The bill is scheduled for its fourth hearing on May 19, 2021.
On May 19, 2021, the Committee accepted a substitute version of the bill that largely aligns with changes made to the companion HB 118. The revised measure replaces the proposed referendum process with provisions enabling township trustees – at the front end of the siting process – to adopt a resolution designating all or part of their community as an energy development district open to future projects.
Note that on May 18, the bill’s joint sponsor, Sen. Rob McColley (R – Napolean), was appointed chair of the committee reviewing the plan.
On May 25, the bill was again changed significantly by the Senate Energy & Public Utilities Committee, but a vote to report out the new substitute bill was delayed.
The prior substitute version of the bill – accepted only recently on May 19 by the Committee – has been rejected. This latest substitute bill consists of two concepts:
Under the 1st concept, the revised bill provides that a renewable energy developer must hold a public meeting in the proposed impacted community within six months prior to submitting a project application to the Ohio Power Siting Board. During the public hearing, the developer would have to provide county commissioners with project documentation, including maximum nameplate capacity and its proposed boundaries. Thereafter, county commissioners would have a 90-day window in which to: (i) do nothing (i.e., de facto approval); (ii) pass a resolution banning the project outright; or (iii) pass a resolution limiting the geographic area of the project.
Under the 2nd concept, county commissioners would be authorized to pass a resolution designating an energy development district that is open to that development (this element was contained in the May 19-version of the bill). In the alternative, county commissioners would be authorized to pass a resolution prior to any potential project, stating the community is closed to such wind and solar projects.
On June 2, the revised substitute bill was accepted by the Senate Energy & Public Utilities Committee, with a last-minute change: inserting new language to create two new ad-hoc voting seats on the Ohio Power Siting Board when voting on such projects (the new seats would be occupied, on a case-by-case basis, by a county commissioner and township trustee from areas within the footprint of the project being voted on).
Later that same day, a Senate floor vote passed the bill (20-13); five Republicans joined all eight Democrats in opposition.
Note the Senate-passed version removed a 3rd concept that had been proposed in the revised substitute bill (to have permitted within 60 days of a siting application, commissioners or township trustees to submit a resolution in opposition).
On June 16, the measure is scheduled for its first hearing in the House Public Utilities Committee.
SB 57 EXEMPT CERTAIN HOUSING FROM PROPERTY TAXATION (Hackett R., Antonio N.) Introduced on February 9, 2021, this bill modifies the law regarding property tax exemptions and procedures and to authorize COVID-19-related property tax valuation complaints.
Of particular note to economic developers, the bill includes language regarding TIF annual service payments in lieu of taxes (i.e., PILOTs), namely: a change to R.C. 5709.91 to render minimum service payments by developers as covenants running with the land (and therefore enforceable against subsequent owners), to be recorded with the county recorder, in those TIF projects in which developers agree to make minimum PILOTs under the terms of their development agreements.
The Senate unanimously passed the measure on February 24, 2021. And on March 25, following changes to the bill in the House the House likewise unanimously passed the bill and sent it back to the Senate. On April 21, the Senate unanimously concurred with the House’s changes to the measure, and Governor DeWine signed the measure into law on April 27, 2021 (to be effective 90 days hence).
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. The measure had its third committee hearing on May 11, 2021 and was reported out on May 18.
On May 19, the bill was passed unanimously by the Senate.
On June 15, 2021, the bill had its first hearing in the House Agriculture & Conservation Committee. During sponsor testimony, Sen. Sandra Williams (D-Cleveland) noted the $150,000 appropriation amount for the study is not enough to cover its cost; she stated an amendment to the bill has been drafted (but not yet shared) to appropriate $1M to the effort.
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. Note the similar bill in the lower chamber (HB 157). This bill had its first hearing in the Senate Ways & Means Committee on May 12.
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.
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 referred the bill in late April to the House Finance Committee, the latter of which reported out the measure on May 5. Later that same day, the House passed the bill on a 93-1 vote (the Senate concurred unanimously), and the bill was signed into law by the Governor on May 17, 2021.
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 on March 17, the Senate unanimously passed this spending proposal; the House Economic & Workforce Committee referred the bill in late April to the House Finance Committee. In turn, the House Finance Committee changed the bill: for entertainment venue ($20MM/SFY 2021) and new business ($10MM/SFY 2021) grant programs administered by ODSA, the source of funding replaced the General Revenue Fund with federal the State’s Coronavirus Relief Fund.
The bill includes $150MM to the ODSA to provide grants to eligible small businesses which did not receive COVID-19 relief funding in 2020.
The Committee reported out the measure on May 5. Later that same day, the House passed the bill on a 89-2 vote (the Senate concurred unanimously), and the bill was signed into law by the Governor on May 17, 2021.
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.
SB 166 VOCATIONAL SCHOOLS-COMMUNITY REINVESTMENT AREAS (Reineke, W.) Introduced on April 21, 2021, this bill generally regards career-technical education. The bill would require that school compensation agreements reached under commercial or industrial CRA abatements be provided on the same terms and conditions to joint vocational school districts. Note the companion bill in the lower chamber (HB 303).
This measure had its fourth hearing before the Senate Primary & Secondary Education Committee on June 15, 2021, during which the bill was reported out with new amendments.
SB 172 MUNICIPAL CORPORATION (Schaffer, T.) Introduced on May 4, 2021, this bill would require municipal corporations with more than $100 million in annual income tax collections to provide a tax credit to nonresident taxpayers.
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