Tracked Senate Bills – October 2020
Bricker & Eckler LLP
News from the Statehouse:
New Round of Coronavirus Relief Fund Payments to Local Governments
House Bill 6 Repeal Effort(s), Civil Litigation & Business Groups Step Forward: Work continued in committees – the House Select Committee on Energy Policy & Oversight and the Senate Energy & Public Utilities Committee – on three bills (HB 738, HB 746 & SB 346, described below) to straight-repeal HB 6’s nuclear energy subsidy program. One issue that’s been raised in the House Select Committee hearings is HB6’s use of 2018’s peak revenue for FirstEnergy as a reference year for the company’s entitled annual revenue levels via ratepayer subsidy charges. The nuclear subsidy charges are set to appear on ratepayer bills on January 1.
In a separate move, Attorney General Dave Yost on September 23 filed a civil complaint against FirstEnergy Corp. and its subsidiaries, and Energy Harbor, as well as individual defendants, including Rep. Larry Householder and his four criminal co-defendants. The suit seeks an injunction to block Energy Harbor, operator of the two nuclear plants, from receiving the $150MM in annual subsidies to which it is entitled under HB6. If the injunction is granted, this could ease pressure on the General Assembly as considers whether and how to repeal or replace HB6. The complaint also would bar the named defendants from holding public or political office or lobbying for eight years.
During late September, the Ohio Manufacturers’ Association filed a rehearing request to the Public Utilities Commission of Ohio, alleging the State’s nuclear subsidy rider violates the plain language of HB 6. The OMA argues the PUCO should revisit the subsidy due to the ongoing criminal racketeering case. Separately, the Greater Cleveland Partnership added itself as the latest group backing efforts to repeal HB6.
Finally, on the last day of September, the fourth HB 6 repeal bill was introduced by Rep. Mark Romanchuk (R – Mansfield): HB 772, which is unique among the repeal efforts as it would leave in-place some provisions of HB6. This bill would include an emergency clause to prevent the levying of surcharges on customers’ bills in January 2021. Representative Romanchuk describes his plan as eliminating provisions of HB6 that created subsidies ($150MM/year) to Energy Harbor’s two nuclear plants, as well as eliminating extended cost recoveries for two coal-fired plants. Finally, his proposed bill would erase a “decoupling” provision that benefited FirstEnergy. Unlike the three proposed “straight repeal” bills (HB 738 & HB 746, SB 346), this bill would let stand HB6’s elimination of renewable energy and energy efficiency standards.
Clawback of GM Tax Credits & Awarding new LG Chem Tax Credits: The Ohio Tax Credit Authority on September 28 approved a clawback agreement with General Motors under which the automaker will repay $28MM in incentives resulting from the idling of its Lordstown assembly plant in 2019. The agreement also requires GM to provide another $12MM in “Ohio Community Support” in the form of scholarships or job training at Youngstown State University or schools and/or infrastructure assistance in the Mahoning Valley region.
In a related – but separate – action, the Tax Credit Authority approved a 15-year, 1.95% JCTC to Ultium Cells – a new joint venture between GM and South Korean-based LG Chem – to manufacture electric vehicle battery cells at the same Lordstown facility. The new project commits to create 1,000 full-time positions and generate $45MM in new annual payroll.
Final $650MM wave of Coronavirus Relief Fund Payments to Local Governments: Members of the Senate Government Oversight & Reform Committee rolled SB 357, which sought to appropriate the fourth and final tranche of the State’s allocation of federal COVID-19 aid dollars to local governments ($650MM), into HB 614, ostensibly an unemployment measure, which Governor DeWine signed on October 1.
This last legislative vehicle to distribute $650MM in federal CARES Act funds to Ohio units of local government modified some aspects of Coronavirus Relief Fund distributions (i.e., as compared to HB 481’s distribution of $350 million) by: (1) extending deadlines imposed on Ohio local governments to encumber their federal money; and (2) using a funds-distribution formula based on per capita, rather than the 2019 Local Government Fund formula (used under HB 481).
Of the overall $1.2 billion in Coronavirus Relief Fund payments sent to local governments in Ohio before and including the bill, 48.2% has gone to cities, 18.3% has gone to townships and 33.5% has gone to counties.
Working-from-Home Income Tax Obligations: Senate committee hearings have begun on SB 352, which would repeal a portion of the General Assembly’s COVID-19 response measure – HB 197 – requiring working-from-home employees to nevertheless pay income taxes to the municipalities in which their formal offices / workplaces are located. Sponsor testimony by Sen. Kristina Roegner (R-Hudson) asserted that HB 197 unfairly impacts residential (i.e., bedroom) communities like her own. Senate committee members questioned whether the legislation would create logistical and financial challenges for local governments and employers. Sen. Roegner acknowledged this would “certainly” shift income tax revenues away from large cities.
Federal COVID-19 Update:
Following the President’s directive-via-tweet order on Oct. 6 that Treasury Secretary Steve Mnuchin halt negotiations with House Speaker Nancy Pelosi over a fourth federal COVID-19 aid package, another round of such talks has taken place. That said Treasury Secretary Steve Mnuchin told members of the press that a new economic relief bill is unlikely before the November 3rd election. Mnuchin and Pelosi have been negotiating the framework of a comprehensive deal for the last few weeks, but it has become clear that both sides are too far apart on the main issues, preventing a deal from being reached. Nevertheless, the President last Thursday (Oct. 15) reissued his call for Congress to pass stimulus legislation in response to the COVID-19 outbreak, claiming in a tweet that he was “ready to sign” a bill. Go figure.
NON-COVID-19 BILLS (Changes from last month are noted 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, 2019. The bill passed the House State and Local Government Committee on May 6, 2020, but the Senate refused to concur in the House’s change to the legislation that seeks to rein in the Ohio Department of Health’s order-making authority. As such, Senators Schuring, Roegner, and Antonio were named as conferees to work on the bill with the House’s conferees of Representatives Wiggam, Seitz, and Kelly.
SB 4 SCHOOL FACILITIES (Rulli, M., Kunze, S.) This bill’s original contents had already been made law under the budget bill (HB 166), but during June 2020, state lawmakers sought to use this capital appropriation bill to fold in the provisions of HB 670 and authorize up to $555 million in one-year bonding authority for school construction ($300 million) and new public works projects ($255 million, of which $175 million is for the State Capital Improvement Program, known as Issue 2, for roads, bridges, water, wastewater, storm water and other projects; and $37.5 million for the Clean Ohio Program). Several amendments also were inserted into the bill related to (1) allowing municipalities and townships to borrow from TIF Funds; (2) allowing charter counties to side-step competitive bidding for their purchase of PPE; and (3) applying Prevailing Wage requirements to Transportation Improvement Districts. (This trio of amendments first appeared in SB 310, but they were not included in the final, as-passed version of that bill.) Senate Bill 4 was signed into law by Governor DeWine on July 24, 2020, with an effective date of October 12, 2020. Bricker has published a bulletin on the changes to TIF law, which can be accessed at this link: http://www.developohio.com/post/detail/little-noticed-change-to-tif-law-allows-municipalities-and-townships-to-redirect-up-to-25-percent-of-their-tif-funds-to-public-safety-road-and-bridge-maintenance-during-fy-2020-2021-234876
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, 2019 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, and the Senate passed a Substitute Bill June 26, 2019:
- 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 was 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.
The substitute bill was amended by the Committee February 5 to:
- Provide that the Ohio Tax Credit Authority would administer the program instead of the director of the Development Services Agency;
- Sunset the law on June 30, 2022;
- Give lien rights to commercial real estate brokers;
- Remove references to the Historic Preservation Tax Credit;
- Amend the rural area provisions to annually make $20 million of the proposed annual $100 million credits available to rural sites not located within 10 miles of a major city and specify that projects in those areas need only include buildings at least four stories in height with a total square footage of 75,000, and
- Provide for a $40 million tax credit per-project cap.
On February 12, 2020, the substitute bill was further amended to:
- Amend the rural area provisions to make projects eligible that are only two stories high;
- Extend eligibility for the credit to June 30, 2023, and
- Enlarge eligibility to include development sites located within ten miles of a major city if they will provide at least $4 million in annual payroll even if the building is not 15 stories in height or 350,000 square feet.
The bill remains in the House Economic and Workforce Development Committee.
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, make changes regarding STEM school report cards, prohibit the use of value-added data for evaluations of career-technical educators, revise the law on community school fiscal officer liability, make changes regarding school financing studies by the Department of Education, revise the eligibility and operation of the Educational Choice Scholarship program, rename the income-based expansion of the Educational Choice Scholarship program as the Buckeye Opportunity Scholarship program and modify the Ohio Revised Code sections relating to enterprise zone tax exemptions to 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 was assigned to the House Primary & Secondary Education Committee. The House chose the bill to be the vehicle to address concerns with the state’s EdChoice program, in which eligibility requirements had been loosened last fall due to changes made in HB 166 (the state budget bill). The EdChoice program provides vouchers and thus helps fund private school tuition for students at public schools that fail to meet state performance guidelines.
On February 5, the Committee accepted an amendment that would change eligibility for vouchers to be based on family income, versus being based on whether schools meet state performance guidelines, and then the bill was passed in a House Session that same day. Other changes made by the amendment would, among other things, repeal a process established in the budget allowing residents within a township split between two or more school districts to petition to transfer territory to a new school district, and permit career centers to earn STEM and STEAM school designations.
The Senate did concur with the amended bill, rather moving to make the EdChoice changes through House Bill 9.
A conference committee was named to reconcile the matters. Numerous hearings of the committee occurred, and witnesses included private school students, parents and officials who continue to push for no change in the state’s voucher programs, while public school representatives continue to ask for tighter voucher eligibility requirements.
In September, Senator Matt Huffman, the bill’s sponsor, sought to strike the school voucher language in conference committee. He noted his desire to revert to the noncontroversial version of SB 89 to focus on changes to career-technical education regulations (which had cleared the Senate in a unanimous vote in October 2019).
The measure remains before conference committee, with committee members formally named in late September 2020 (House members Jones, Scherer, and Robinson; Senate members Peterson, Matt Huffman, and Fedor).
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, 2019. Thereafter, the House committee held another hearing on May 19, 2020 at which interested party testimony from Policy Matters, the Ohio Manufacturers’ Association, and the Ohio State Bar Association, among others, was presented.
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, 2019.
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, 2019.
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).
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, 2019, the bill was referred to the Senate Finance Committee where a first hearing occurred October 1, 2019.
SB 212 NEIGHBORHOOD DEVELOPMENT AREAS (Schuring, K.) Introduced October 7, 2019, this bill would authorize townships and municipal corporations to designate areas as “Neighborhood Development Areas” (NDAs) 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 was assigned to the Senate Ways & Means Committee, where a Substitute Bill was approved February 4, 2020. The changes made would require that before approving an area as an NDA, there must be showing that the community lacks housing and that development would not occur without an NDA. Also, projections must be presented showing how an NDA would generate funds. Finally, the amendment clarified the process to be followed in negotiating an agreement with the applicable school district if the NDA will offer a 100% tax exemption. At a hearing February 11 for interested parties testimony, a representative from the Greater Ohio Policy Center suggested that it may make more sense to amend the existing CRA statutes rather than enact a new NDA program. On February 25, the bill was further amended to add to the process of creating the NDAs by requiring at least three hearings on such proposals by cities or townships, and requiring notifications to any impacted taxing entities. It amendment also added the word “affordable” to the definition of public purpose in the bill. The bill passed in the Senate March 4 and moved to the House, where it was referred to the House Ways and Means Committee and subject to its first hearing on May 19, 2020.
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. The bill was referred to the Senate Education Committee where a first hearing occurred February 11, 2020. Sponsor Sandra Williams said that the program is similar to one in Colorado called “CareerWise Colorado” and that the goal of the measure is to help students obtain free college credit, receive industry certifications and earn wages while gaining relevant work experience.
SB 234 WIND REGULATIONS (McColley, R.) This bill, introduced November 6, 2019, 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. At a second hearing January 28, numerous proponents in favor of stronger local controls submitted testimony in favor of the bill. A third hearing February 11, 2020, caused numerous opponents to turn out, many of whom testified that providing a referendum process to local townships after a wind project has been approved by the Ohio Power Siting Board would deter future wind development.
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 where a first hearing occurred February 11. Thereafter, the Committee held its third hearing on June 9, 2020.
SB 316 CAPITAL APPROPRIATIONS (DOLAN, M.) This bill was introduced May 26 and would make $1.28 billion in capital appropriations. On June 10, the provisions of this bill were amended into HB 481 (see above).
SB 335 PROPERTY TAXES (Craig, H.) This bill seeks to reduce property taxes on owner-occupied homes to the extent that property taxes increase by more than 3% from the previous year. The measure was referred to the Senate Ways & Means Committee in late July.
SB 346 ENERGY REPEAL (O’BRIEN, S., KUNZE, S.) One of three HB 6-repeal measures (as of this writing), this bill is a straight repeal measure. The Senate Energy & Public Utilities Committee held two hearings on this bill in September 2020, with no further action taken.
SB 352 MUNICIPAL TAXES (Roegner, K.) This bill, introduced at the end of July, would modify municipal income tax employer withholding rules for COVID-19-related work-from-home employees by repealing Section 29 of HB 197. The Senate Local Government, Public Safety & Veterans Affairs Committee held its first hearing on this measure on September 22 (featuring sponsor testimony, described above in the introduction).
SB 354 BROWNFIELD SITES (Williams, S.) This bill requires the Ohio Environmental Protection Agency to conduct a study to determine where brownfield sites are located throughout Ohio and makes an appropriation. The measure was referred to the Senate Finance Committee on September 1.
SB 355 CLEAN OHIO GRANTS (Williams, S.) This measure makes an appropriation to the Development Services Agency to award Clean Ohio Revitalization Grants. The measure was referred to the Senate Finance Committee on September 1.
SB 356 TAX FORECLOSURES (Dolan, M.) This bill 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. The House corollary measure is HB 755. This bill was referred to the Senate Local Government, Public Safety and Veterans Affairs Committee on September 1.
SB 357 CORONAVIRUS FUNDS (Dolan, M.) This bill is the fourth means of distributing federal Coronavirus Relief Fund payments to local subdivisions in Ohio; this measure builds on previous distributions of federal CARES Act dollars to counties, townships and municipalities (e.g., HB 481 (appropriated $350 million) and a Controlling Board approval in late August (another $175 million)). The funds provided in this measure are to those units of local government which did not receive direct payments from the U.S. Treasury (i.e., large units of local governments with populations exceeding 500,000 in 2019). The use of Coronavirus Relief Funds still must adhere to the CARES Act’s three-part test: namely, funds can be used to cover local governments’ expenses (1) that were incurred due to the COVID-19 emergency, (2) were not previously budgeted for, and (3) were incurred between March and the end of 2020 (i.e., the so-called covered period).
On September 2, less than a week after it was introduced, SB 357 passed the Senate by unanimous vote. The passage included the following amendments: (1) change the process by which unspent money is redistributed to other entities within a given county by moving the deadline from October 15 to November 20 for political subdivisions within a county to spend funds; (2) allowing a county to keep 50% if less than a quarter of its subdivisions are eligible for receiving more funding (current law, under HB 481, allows a county to keep up to 25% of the unspent money to redistribute); and (3) changes the date when all unspent money must be returned to the state from Dec. 28 to Dec. 30, and clarifies units of local government have until February 1, 2021 to complete the necessary accounting. Further, the Senate-passed measure clarifies that local entities that passed a resolution in order to accept the previous CARES Act money need not pass another one. The provisions of this bill were amended into HB 614 – described above – and signed into law on October 1.
SB 362 TAX CREDITS (Peterson, B.) This bill was introduced on September 2 and would increase the total amount of tax credits that may be awarded to insurance companies that invest in rural business growth funds. The measure was referred to the Senate’s Insurance & Financial Institutions Committee in late September.
COVID-19 RELATED BILLS (Changes from last month are noted in BOLD):
SB 308 CIVIL IMMUNITY (HUFFMAN, M.) This bill would revise the law governing immunity from civil liability and professional discipline for health care providers during disasters or emergencies and provide qualified civil immunity to service providers providing services during and after a government-declared disaster. The bill passed the Senate in June 2020 and has been referred to the House Civil Justice Committee. The elements of this Senate vehicle were reconciled by conference committee under the companion HB 606, described above, the latter of which was sent to Governor DeWine for his signature on September 2.
SB 310 FEDERAL FUNDS (DOLAN, M.) This bill was introduced May 5 and received fast-tracked approval by the Senate Finance Committee and full Senate the same day. The bill would provide for the distribution of federal coronavirus relief funding from the CARES Act to local subdivisions. $4.55 billion was set aside for Ohio, with approximately $2 billion earmarked for local governments. Through the federal legislation, six jurisdictions – the city of Columbus and Cuyahoga, Franklin, Hamilton, Montgomery and Summit counties – received $775 million in funding directly, leaving about $1.2 billion for the remaining local governments in the state. This bill appropriates $350 million of that amount to local governments at this time. State legislators are holding the remaining funds in hopes that the federal government will loosen restrictions on use. Under current guidelines, the money must be spent on COVID-19 related expenses such as personal protective equipment or overtime for first responders and cannot be used to replace lost revenues. Local government officials have warned that without flexible federal aid, they will be forced to make steep budget cuts. On June 10, the provisions of this bill were amended into HB 481 (see above).
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