It was another busy week at the General Assembly as members begin to posture themselves to get the spring legislative agenda done before the summer. The General Assembly members are targeting mid-May for their summer break. Both chambers continue to move very quickly on important legislation. There has been much congratulations to the new committee chairs mentioned below.
MUNICIPAL INCOME TAX NET OPERATING LOSS REVIEW COMMITTEE TO HOLD FIRST HEARING NEXT WEEK
Late Thursday afternoon, State Tax Commissioner Joe Testa announced that a first hearing will be held Thursday, May 5 at 9:30 a.m. in hearing room #114 for the Municipal Income Tax Net Operating Loss Review Committee.
As our members will remember, the committee was established as part of HB5 to give further legislative review to the impact of the unfunded mandate included in the reform legislation, requiring all Ohio cities and villages to allow a 5 year NOL carry forward policy, as part of their local municipal income tax ordinance.
The committee agenda for Thursday's hearing includes introduction of committee members and discussion of a proposed data collection method. Whatever data collection method is agreed upon by the committee members will be the mechanism municipalities will be asked to use in order to provide the data to the legislative body for analysis.
Commissioner Testa, who also has been appointed to serve as the committee's Chairman has announced that the tax department staff has been working to develop a suggested method to propose to the committee as a starting point. Municipalities will have until September 30, 2016 to submit the required data for an analysis with the final method.
It remains unclear if all municipalities will be required to provide the data or only those with a zero NOL policy before the enactment of HB5, who will feel the full impact of the revenue losses. The league has not been asked to assist with the development of the data collection methodology at this point but we look forward to engaging with the committee to help roll-out the plan and promote the most effective and efficient data collection procedure.
Lastly, committee members were told Thursday that, "a decision on a method for the estimation would need to be prescribed by the committee by May 25th in order to ensure the Municipalities have adequate time to compile and submit the requested information."
The appointed legislative committee members include Senators Bob Peterson (R-Washington Court House) and Capri Cafaro (D-Hubbard), House members Kirk Schuring (R-Canton) and Jack Cera (D-Bellaire). Committee members representing municipal taxpayers include CPA's J. Matthew Yuskewich, Mark Bainbridge and Bret Dixon.
The municipal representatives that have been appointed by the Senate President are Mayor Jeffrey Hazel of Celina and New Albany City Manager Joseph Stefanov. The enacted language in HB5 called for three municipal representatives to be appointed to the committee and to the best of our knowledge the third appointment has yet to be made.
We will be sure to update our members on the proposals presented Thursday.
LEAGUE TESTIFIES BEFORE COMMISSION STUDYING OHIO HISTORIC PRESERVATION TAX CREDIT PROGRAM
The General Assembly formed a special commission as part of the last State operating budget bill called the 2020 Tax Policy Study Commission to review current state tax policies. Kent Scarrett, Executive Director of the league testified before the commission offering support for the current tax credit program, sharing with commission members the importance the program is to Ohio's Cities and Villages. The Commission is studying efficiencies with the current tax credit program and among other things are considering turning the program into a grant system. A copy of the Testimony presented Thursday is HERE
The league is hopeful that the Commission will continue the tax credit program as it currently exists. During the hearing yesterday commission members expressed a desire to improve upon this tax credit program and identified frustrations with the Federal Government administrative role. The league will continue to monitor this issue and keep our members aware of future action taken.
NEW WATER BILL REFERRED TO HOUSE COMMITTEE
The House Rules and Reference Committee referred HB 512, introduced by Representative Tim Ginter (R-Salem) to the House Energy and Natural Resources Committee. The bill would establish requirements governing lead and copper testing for community and non-transient non-community water systems, to revise the law governing lead contamination from plumbing fixtures, to make appropriations to the Facilities Construction Commission for purposes of providing grants for lead fixture replacement in eligible schools.The bill would also revise the laws governing the Water Pollution Control Loan and Drinking Water Assistance Funds.
STATE AUDITOR, SENATE PRESIDENT SEEK TO CHANGE PUBLIC RECORDS PROCEDURES
Yesterday morning, Senate President Keith Faber (R-Celina), State Auditor Dave Yost, representatives from the Ohio Attorney General's office, and the Ohio Newspaper Association held a press conference to discuss new legislation that is "designed to streamline disputes over public records and provide a more affordable, accessible process for citizens trying to obtain them. The bill is believed to be the first of its kind in the nation." The bill has not been introduced yet but is said to focus on creating an inexpensive mediation process for dispute in public records requests.
When the legislation is introduced we will be sure to notfiy our members of the content and how the bill may effect them.
MUNICIPALITIES ROLE IN SB 11 VOLUNTEER POLICE OFFICER BENEVOLENT FUND
The League would like to remind our members that on March 23, 2016, SB 11 became effective as law. This bill did the following:
- Created the Volunteer Peace Officers' Dependents Fund to provide death benefits to survivors of volunteer, part-time, and reserve police officers, sheriffs' deputies, constables, and deputy marshals killed in the line of duty and disability benefits to such disabled officers and deputies.
- Made each political subdivision with a police or sheriff's department that employs volunteer peace officers a member of the Fund and requires each Fund member to establish a volunteer peace officers' dependents fund board to administer claims for benefits from the Fund.
- The bill requires the following benefit amounts to be paid from the Fund: (1) surviving spouses, a lump-sum award of $1,000, plus a benefit of $300 per month, (2) dependent children, a benefit of $125 per month, (3) disabled volunteer peace officers and disability benefit of $300 per month.
- To pay for benefits disbursed by the Fund, the bill requires each Fund member to pay the Treasurer of State an initial premium of $300 to $500, which is based on the member's assessed property valuation.
- If claims against the Fund have reduced it to 95% or less of its basic capital account, requires Fund members to pay additional premiums of $90 to $150, depending on the member's assessed property valuation.
Our members can access the analysis HERE
and fiscal impact statement HERE
for the enacted version of the bill.
SPEAKER APPOINTS NEW COMMITTEE CHAIRS
Yesterday, House Speaker Cliff Rosenberger (R-Clarksville) announced a shake-up of committee chairmanships. Much of the movement was intended to give newer members an opportunity to chair committees that were previously chaired by term-limited members (although there were some exceptions). The changes were as follows:
- Rep. Tim Ginter (R-Salem) was appoint to be Chair of the House Community and Family Advancement Committee
- Rep. Mark Romanchuk (R-Mansfield) was appoint to be Chair of the House Economic and Workforce Development Committee
- Rep. Mike Dovilla (R-Berea) was appoint to be Chair of the House Public Utilities Committee
- Rep. Tim Schaffer (R-Lancaster) was appoint to be Chair of the House Ways and Means Committee
- Rep. Robert McColley (R-Napoleon) was appoint to be Chair of the House Finance Transportation Subcommittee
The League wants to congratulate each of these deserving appointees. If one of these members is in your district, please reach out and congratulate them and offer your advice on municipal matters. Please contact the League if you would like their contact information and advice on reaching out.
HOUSE COMMITTEE PASSES EXPEDITED FORECLOSURES BILL
The House Financial Institutions and Housing and Urban Development Committee (FIHUD) held a fifth hearing for open testimony and passed HB 463, which would create an expedited foreclosure process for situations where nobody disputes that a property is abandoned and/or vacant. The bill was introduced by Representative Jonathan Dever (R-Cincinnati).
We reported last week on a number of amendments that were added to the bill. Before the Committee voted to pass the bill, the committee approved an amendment from Rep. Stephen Hambley (R-Brunswick) that made two changes. The first would give sheriffs five years to go onto the online system for real estate transactions referred to in the bill. The second change would permit a dual sale at both an online and physical location. The League did not offer supporting testimony because of the flurry of amendments to the bill. However, we are planning on offering supporting testimony in the Senate.
Committee members also held a fourth hearing for open testimony on HB 435, introduced by Rep. Jeff McClain (R-Upper Sandusky) which would authorize the Treasurer of State to issue revenue obligations of the state for the purpose of making loans to qualifying public entities for their acquisition of permanent improvements through the Treasurer of State's purchase of public obligations of those qualifying entities.
HOUSE FINANCE HEARS CAPITAL APPROPRIATIONS BILL TESTIMONY
The Director of the Office of Budget and Management Tim Keen gave detailed testimony about SB 310 the Capital Appropriations bill. Committee members asked for greater detail of Mr. Keen about particular expenditure items included in the spending bill. We expect the bill to move through the General Assembly and be passed before the legislature adjourns in late May. Vice Chair of the Committee Kirk Schuring (R-Canton) said he expects a vote next week.
HOUSE COMMITTEE HOLDS FURTHER HEARINGS ON MEDICAL MARIJUANA
On Wednesday, the Ohio House Select Committee on Medical Marijuana heard testimony from a number of advocates of legalization of medical marijuana. The League is monitoring the legislation to ensure that municipalities will retain the ability to regulate dispensaries and other aspects of the sales and use of the drugs. Much of this week's testimony was centered around the differences between the approved ballot initiative and the current HB 523.
Generally, HB 523 creates a committee that will make regulatory decisions related to the sales and use of the drug, whereas the ballot initiative addresses much more of those issues directly. Specific issues of regulation include: what physical ailments will give people access to the drug, personal possession quantities, allowable forms of the drug, allowable forms of procurement, caregiver possession, what criminal penalties may revoke a person's possession rights, the right of marijuana users to organ transplants, certain assets, child custody, and certain licenses, definition of "medical purpose," physician reporting requirements, financial institution rules, and makeup of the oversight commission.
HOUSE STATE GOVERNMENT COMMITTEE TAKING AMENDMENTS TO TOWING BILL
The House State Government Committee did not hold a hearing, but did hold discussion related to HB 341, which would require the Public Utilities Commission to raise the existing statutorily designated towing and storage fees annually by the percentage increase in the consumer price index, would establish a $35 fee for the retrieval of non-medical personal items from a motor vehicle, would modify the civil penalties applicable to violations of the towing law, would modify the calculation of the value of an abandoned vehicle to which a towing service or storage facility seeks to take title, and make other changes to the towing law. The Committee is considering a number of amendments. The League is engaging with the sponsor, Ron Young (R-Leroy Township), to facilitate some amendments offered by our members.
SENATE MOVES ON IMPORTANT BILLS THAT EFFECT MUNICIPALITIES
The Senate Agriculture Committee heard its third round of testimony on SB 151 which would revise provisions of the Dogs Law governing nuisance, dangerous, and vicious dogs, to revise enforcement of that Law, and to establish a notification process regarding complaints of certain violations of that Law. Supporters of the bill praised the bill, but asked for two things: that the bill do more to punish negligent owners and allow more remedies for dogs that might otherwise be put to sleep.
The Senate passed SB 220 which would authorize the Ohio Public Employees Deferred Compensation Board and local governments to establish designated Roth account features and other tax-deferred or non-tax-deferred features permitted for government deferred compensation plans. The bill was introduced by Senator Jay Hottinger (R-Pataskala) who said the bill would provide needed flexibility and clarity regarding the law on this issue. The bill now moves to the House.
The Senate Finance Committee held its first hearing on HB 277 which passed the House last week. The bill was introduced by Representative Andrew Brenner (R-Powell) and it would authorize a county, township, or municipal corporation to impose a 9-1-1 system levy in only the portion of the subdivision that would be served by the 9-1-1 system.
The Senate Reference Committee referred HB 413 to the Senate State and Local Government Committee. The bill was introduced by Representative Tom Brinkman (R-Mt. Lookout) and is mainly a bill that make minor alteration to township regulation, but also has a provision that would expand the public infrastructure improvements townships, municipal corporations, and counties may pay for using money from their public improvement tax increment equivalent funds.
The Senate Ways and Means Committee held hearings on four bills related to municipalities. First, HB 166, introduced by Representative Doug Green (R-Mt. Orab), would change multiple laws relative to the collection of local property taxes. The bill underwent three amendments, first to correct ambiguities related to foreclosure costs and a requirement that county auditors seek unpaid taxes on land bank acquisitions. Also, amendments were accepted that eliminated a requirement regarding estate taxes, changes who received certain notices when there is a satisfaction of mortgage, change when agricultural land use reviews are done, and provide clarity regarding what happens with special election fund accounts when the election is over.
Secondly, the Committee held its first hearing for sponsor testimony on HB 182 which seeks to revise the law governing the creation and operation of joint economic development districts (JEDDs) and enterprise zones. The bill has already passed the House. According to the sponsor Rep. Kirk Schuring (R-Canton) the following represents the bill's key items:
- Easy Read - the legislation harmonizes various sections of the JEDD law to eliminate the patchwork of sections that must be put together to read the statewide JEDD statute. Under the bill the statewide JEDD law is located in one section of the ORC and easier to read.
- Redevelopment - the bill adds economic redevelopment as a purpose for the establishment of a JEDD.
- Mixed use - HB 182 modifies the prohibition of residents being allowed in a JEDD by stipulating that residents are allowed if they live in a mix-use building combining residential with retail/office space. Mix use is defined in the bill.
- Swiss cheese - the legislation allows the JEDD to carve out properties within the district that don't want to be a part of the JEDD. These carve outs would put holes in the JEDD that would create a "Swiss Cheese" effect.
- Annexation - the bill expands the restrictions on annexation to include the territory within the JEDD.
- Out of Town Owners - the bill stipulates that out of town business and/or property owners will be contacted by certified mail during the petitioning process. If they don't respond in 30 days, it will be assumed that they agree with the establishment of the JEDD. However, the bill stipulates that the certified mail must be signed by the record property owner to ensure that the petition is going to the appropriate decision maker.
- Opt out - this provision allows a business or property owner to "opt out" of a JEDD if it can be proven that the business or property owner has received little or no economic benefit from the JEDD. The Development Services Agency will determine if the opt out is warranted. The bill also allows the decision to be appealed to the Common Pleas if disputed.
- Enterprise Zone Waiver - the bill creates a waiver for enterprise zone tax abatements if the abatement doesn't qualify under current Ohio law. The waiver would be granted if the local school board approves the abatement.
Third, the Committee took its first hearing sponsor testimony on HB 390 introduced by Representative Tim Schaffer (R-Lancaster) and Wes Retherford (R-Hamilton). The bill would exempt the sale of natural gas by a municipal gas company from the sales and use tax. The bill stems from a Department of Taxation effort to recoup sales taxes from natural gas sales made by municipal utilities to residents of Lancaster, Hamilton, and the villages of Deshler, McComb, Verona and Williamsport.
As we have previously reported, the Department of Taxation informed the above municipalities that millions of dollars in money that was supposed to be collected and remitted by these municipalities for sales and use tax on natural gas sales. The cities would have had to impose extraordinary taxes to meet this demand. The bill intends to prevent that. The bill also addresses a tax abatement needed by the Youngstown Metropolitan Housing Authority for errors made in accounting. The bill has already passed the House unanimously.
Fourth, and lastly, the Senate had no testimony but took amendments during a sixth hearing on SB 235 which would exempt from property tax the increased value of property on which industrial or commercial development is planned until construction of new commercial or industrial facilities at the property commences. The amendment caps the freeze period in the bill at 10 years. There are two primary concerns the League has regarding this bill. First, is the local control issue and the non preemption of existing local ordinances. Secondly, we are concerned with the impact the legislation would have on current economic development opportunities.
The Senate Insurance Committee held a hearing, took amendments, and passed HB 207 which would allow a state fund employer to have a workers' compensation claim that is likely to be subrogated by a third party paid from the surplus fund account in the state insurance fund rather than charged to the employer's experience. The bill was introduced by Representative Rob McColley (R-Napolean) and Mike Henne (R-Clayton). The first amendment eliminates the 500 employee minimum on self-insurance. The second would have a claim charged to the BWC's surplus fund if it is not paid within 180 days. The league continues to support the bill.
LEAGUE PROPOSING WORKERS COMPENSATION WORKING GROUP TO BE FORMED
With all the activity in the workers compensation area lately, the OML will be forming a working group of municipal professionals who are have expertise in the workers compensation and risk management area and a desire to be involved in helping the League and its members influence policy in this area. It is imperative that public management exercise a strong voice in this area as legislators continue to address difficulties in the current system.
At the beginning, this working group will merely be an email list that will receive and respond to specialized communications about state activity in the workers compensation area in particular. Subscribers may be called upon to talk to engage in technical discussions, communicate with legislators, write letters, give testimony, and apply to serve on various committees.
Please forward this request to any in-house or private parties who would be well-suited for this communication list. Please send a request to firstname.lastname@example.org
to be placed on this list or call (614) 284-4394 for more information.