Leadership ...... Page 03 Energy ...... Page 29 OMA Government Affairs Committee Environment ...... Page 39 September 22, 2010 Tax ...... Page 51 Safety & Workers’ Compensation . . . Page 62 AGENDA
Welcome & Self-Introductions Caroline Ramsey Honda of America Manufacturing Committee Chair
Ohio Senate Races Republican Campaign: • Matt Schuler • Vaughn Flasher Democrat Campaign: • Amanda Hoyt • Sara Kaminski Ohio House Races Republican Campaign: • Michael Dittoe Democrat Campaign: • Keary McCarthy Ohio Statewide Voter Trends Dr. Eric Rademacher http://www.pollster.com/polls/oh/10-oh-gov-ge-kvs.php Director, Ohio Poll, Department of Political Science, University of Cincinnati
OMA Counsel’s Report (Time Permitting) Kurtis Tunnell Bricker & Eckler LLP OMA General Counsel Federal Update (Time Permitting)
Public Policy Report (Time Permitting) Ryan Augsburger and Kevin Schmidt, OMA Staff
2010 Committee Schedule Wednesday, November 3 (Post-Election Conference Call 3:00 p.m.) Wednesday, December 8
Committee Meetings begin at 10:00 a.m. and conclude by 1:00 p.m. Lunch will be served. Please RSVP to attend meetings by contacting Judy: [email protected] or (614) 224-5111 or toll free at (800) 662-4463. Indicate if you will be participating in-person or by phone.
Additional committee meetings or teleconferences, if needed, will be scheduled at the call of the Chair.
Thanks to Today’s Meeting Sponsors: 2 of 64
Calendar of Events
• BWC Division of Safety & Hygiene Courses - Training Center quarterly flyer - July - September 2010 • DTMA Advanced Manufacturing & Technology Show: The Future of Manufacturing Takes Shape Here - FREE - Dayton, OH - 09/20/2010 • The Ohio Partnership for Excellence presents “Aligning Forces for Excellence” - Newark, OH - 9/20- 9/21/2010 • Fundamentals of Compressed Air Systems - Industrial training workshop - Dayton, OH - 09/21/2010 • Working Partners FREE Webinar Events: Lean About The New DFSP - 09/21/2010 • Roetzel & Andress, LPA Seminars: Employment Law and Workers' Compensation - Legal Update 2010 - 09/22/2010, 09/29/2010, 10/14/2010 • OU/OMA Workshop: The New Energy Climate for Ohio Manufacturers Series - Workshop 3 - Columbus, OH - 10/20/2010 • Safex Training: Incident Investigation Workshop - 09/22/2010 • IMAC Seminar: The Wisdom to Plan, The Strength to Prevail - Columbus, OH - 09/22/2010 • The Schneider Downs Women in Business Industry Group: We've Got the Scoop: The Flavors of Leadership with Velvet Ice Cream - Columbus, OH - 09/23/2010 • Plante & Moran, PLLC Webinar: Get the Latest Updates on Health Care Reform Requirements and Implications for Employers - 09/22/2010 • OMA Government Affairs Committee Meeting - 2:00 p.m. - 09/22/2010 • MAGNET/PNC/Skoda Minotti & Growth Capital Workshop: Financial Information & Resources for Smaller Manufacturers - Free - Cleveland - 09/22/2010 • Bricker & Eckler LLP presents FREE Human Resources Seminar: Second Annual Hot Topics in HR - 09/28/2010 • GE Aviation 2010 Toledo, OH Small Business Supplier Symposium - 09/28/2010 • GACCoM's Annual Renewable and Energy Efficiency Roadshow - Columbus, OH - 09/29/2010 • BWC Safety & Hygiene Training Courses -10/2010 to 12/2010 • Bricker & Eckler: 2010 Renewable Energy Finance Updates - Independence, OH - 10/07/2010 • Safex Open Enrollment OSHA 8-Hour Hazwoper Refersher Schedule - 10/08/2010 • Safex Training: Respirator Program Writing Workshop -10/12/2010 • Safex Training: How to Handle an OSHA Inspection - 10/14/2010 • Ohio State University Institute of Ergonomics: Putting Ergonomics Into Practice - 10/19-10/22/2010 • OMA/Ohio University: The New Energy Climate for Ohio Manufacturers Series - Workshop 3 - Columbus - 10/20/2010 • Taft Stettinius & Hollister LLP Save the Date: Taft's 2010 Government Contracts Seminar - 10/20 & 10/27/2010 & 11/3 & 11/10/2010 • PNC/Smart Business Webinar: Myths about Lean Manufacturing and the Impact to Your Bottom Line - 10/21/2010 • OMA Energy Committee Meeting - 11/03/2010 • Jackson Lewis Employment Law Conference - 11/03/2010 • The Success Group: Impact Ohio 2010 Post Election Conference - Columbus, OH - 11/04/2010 • OMA Tax Committee Meeting - 11/10/2010 • OMA Environmental Committee Meeting - 11/11/2010 • The Northwest Ohio Manufacturing Forum & Expo - Financing & New Business Opportunities - Bowling Green State University - 11/12/2010 • PNC/Smart Business Webinar: Exploring New Territories: Why Diversification is More Important than Ever for US Manufacturers - 11/17/2010 • OMA Safety & Workers Comp Committee Meeting - 11/18/2010 • OMA Government Affairs Committee Meeting - 12/08/2010 • Safex Training Assessments Workshop: Who has to do what training when? - 12/14/2010
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Hot Topics September 2010
Overview
The General Assembly has been in recess since early June. They will not return until after the election. Gridlock has prevented much legislation of consequence from moving this year.
The post-election or “lame duck” session always hold some threats and opportunities. The election outcome will determine the likelihood of legislation passing. The OMA is already on guard against possible threats such as mandatory cy pres and health care mandates.
With the gubernatorial race and apportionment board (which draws the boundaries) up for grabs in this election year, the environment is politically charged. Competition by candidates to be more “business friendly” is fierce.
Over the quarter the OMA-PAC has evaluated legislative candidates and made two rounds of endorsements. Additionally public policy position papers “Retooling Ohio” developed earlier in the year have been a useful tool for meetings with legislative candidates. Over 25 such in-the- district meetings are in the works.
State Budget and Revenue
Over this General Assembly session lawmakers have found plenty to quarrel over while ignoring the obvious train wreck facing the state. As we approach the 2012-2013 biennial budget real solutions will be needed to respond to a projected structural deficit of as much as $8 billion, approaching 20% reduction from current budget levels. Tax hikes and / or draconian cuts to social programs, education and local government will be necessary to balance. Liabilities such as unemployment compensation and public pensions are also of concern and could complicate solutions to the traditional budget options.
Incumbent state leaders nor their challengers have offered much specificity about dealing with the looming shortfall. So far for the current biennium, state revenue collection is tracking with estimates. Administration officials consider the variance to be manageable without legislating revisions to tax and service levels in the immediate timeframe. Other states are in similar straights.
Card Check and Congressional Agenda
Movement on EFCA stalled out early this year after intense opposition, a development that occurred in part due to OMA leadership in our state. There are rumors that Congress will pass the legislation later this year to engender voter support from labor groups, however, even absent the legislation, the National Labor Relations Board is already acting to administratively enact card-check. The NLRB has proposed allowing electronic voting on union organizing which effectively accomplishing card check. NAM staff is speculating the NLRB may next broaden the definition of union eligible employees to include supervisors – effectively accomplishing the so-called RESPECT Act which is also stalled in Congress.
On the energy and environment front, the news is similar. Congressional leaders appear to have lost their appetite to advance some form of cap and trade this year and into the future. A package of scaled down energy bills with targeted tax hikes on business or a national renewable standard seem more likely. In the meantime, the U.S. EPA has proposed rule after
4 of 64 rule that would have a potentially devastating effect on Ohio industry. Tighter ozone standards, carbon and other GHG standards, and new standards on boilers are among greatest threats. State groups like the OMA are playing a part in grassroots opposition. See GHG below.
Civil Justice Threatened – Plaintiffs Lawyers Use Charities
The state House of Representatives failed to vote the Cy Pres legislation before leaving town for the summer – a clear victory. The legislation is being advanced by a Lake County trial lawyer who has attracted support of dozens of charitable organizations because the law change promises to redistribute unpaid lawsuit settlement dollars to charities. Unfortunately, many charities have only half the story and may not be considering the harmful effects the bill imposes on Ohio's economic well-being.
Two identical bills are pending, one in the House and one in the Senate that would have a major impact on your company’s ability to settle class action lawsuits. These bills will give plaintiffs the upper hand in negotiating settlements and place the very same Ohio businesses, which already contribute millions of dollars to charities on a voluntary basis, at a greater risk of lawsuit abuse. These bills will increase the cost of class action lawsuits for defendants and could actually hurt the charities they purport to help.
The OMA has made this a top priority and met with several Lake County and NE Cuyahoga county manufacturers to educate and encourage engagement. The OMA leads the Ohio Alliance for Civil Justice, a coalition of 200 business and professional groups and companies focused on tort reform which is opposed to mandatory cy pres.
Workers’ Compensation Policy
A whole lot of noise is being made on campaign trail. Candidates are calling for privatization of the system to drive down costs, even though the real cost drivers are embedded in benefits and abusive loopholes – issues legislators are perennially afraid to address.
Meanwhile the Bureau of Workers’ Compensation has announced it is now charging lower base rates than in 20 years. This the result of rate reforms required by HB 100, Republican-passed legislation in the wake of the investment scandals. BWC managers are implementing the recommendations contained in a comprehensive study performed by Deloitte that benchmarked Ohio’s system against industry best practices – many now employed by the BWC.
At the statehouse, lawmakers continue to spend time considering the merits of allowing increased access to private insurance products instead of the monopoly state fund. Before recessing state legislators are also advancing legislation to block new BWC insurance-based rate-making practices that have driven down rates and promoted fairness. The OMA has provided lawmakers with a roadmap for real cost-based reform.
“Automotive Industry” Support
In late Spring the OEMs chose to work with lawmakers to fashion a less arduous compromise- version of the legislation which was unanimously accepted by the House and Senate. OMA member advocacy helped to bring about the pressure needed to make the bill palatable.
Separately, the Ohio Automotive Industry Support Council, created by Governor’s executive order continues its business. This Council, co-chaired by OMA President Burkland is handling a wide-range of issues related to OEM contraction and working to best position Ohio for recovery. Ohio is the nations number two ranked state for automotive production and auto supply chain.
5 of 64 Among the related issues; federal and state efforts to enhance access to capital for manufacturers, and facilitate technology transfer opportunities between industry and the public university system.
Health Care
As manufacturers try to glean the effects of federal “Obamacare” legislation on healthcare costs, the proliferation of state legislation to require coverage of certain health conditions continues. Depending on the outcome of the governor’s election we could see a few remaining mandates become political “horse trades” in the lame duck session.
Ozone Regulations
US EPA is proposing a tightening of the ozone limits. This proposal could put nearly every county in Ohio in non-attainment resulting in significant environmental compliance costs, reduced economic activity, and significant drag on the state’s competitiveness. A recent study published by the National Association of Manufacturers pegs Ohio’s compliance costs at $69 billion dollars by 2020. The OMA is drafting and will send a letter to Ohio’s congressional delegation citing concerns over this proposal.
Boiler MACT Rule
The OMA sent a letter to US Senator Sherrod Brown this week asking him to voice industry concerns over a proposed rule by US EPA that would significantly, and in some cases impossibly, tighten regulations for industrial boilers. US EPA is claiming that the format of the rule is required due to recent court decisions; however, OMA environmental counsel believes that measures could be adopted that would allow for greater flexibility while achieving environmental goals. The letter that the OMA sent is found in the energy section of this report.
Cap and Trade
The OMA joined a letter this week sent to Ohio EPA asking them to slow down on implementation of GHG regulations. As reported earlier, Ohio EPA has issued proposed rules that mirror the federal GHG rules and would for the first time ever, bring carbon regulations into your facilities air permits. The OMA repeated Governor Strickland and Ohio EPA’s concerns by stating GHG controls have not yet been identified.
In a letter sent to Ohio’s congressional delegation Governor Strickland repeated his strong concern over US EPA’s actions relating to this issue and noted that either Ohio EPA adopt its own program or turn over enforcement to US EPA. Governor Strickland’s letter can be found in the environment section of this report.
FirstEnergy Rate Case
FirstEnergy’s recent Standard Service Offer (rate case) was recently approved by the PUCO. The OMA was successful in limiting and shifting some of the costs traditionally borne by medium and smaller sized manufacturers. The SSO case will result in an auction being held later this fall that will set rates for those customers who do not shop. As the economy continues to struggle and the market for electricity continues to be weak it is anticipated that these basic rates will not increase and could possibly decrease. Time will tell.
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The PUCO issued an entry this week improving the process for getting industry “self-direct” applications approved. While not all of the OMA’s or other industry representative’s issues were addressed this latest entry represents a strong step in the right direction. A more detailed memo describing the order can be found in the energy section of this report.
Estate Tax Repeal
In June, OMA Directors voted to support the ballot issue to repeal the state estate tax. The OMA staff remains in touch with the campaign which is collecting signatures to place the matter on the ballot in November 2011.
2010 Election Outlook
Statewide officeholder contests will determine control of the Apportionment Board which draws legislative districts. Democrats are certain to pick up at least one seat on the Supreme Court even if Maureen O’Connor is elected as Chief Justice. Control of the Ohio House of Representatives may well be within reach for the Republicans. The OMA has produced documents and tools for members and candidates.
Ohio Statewide Slate – Races to Watch
U.S. SENATOR Open Seat - Incumbent Republican George Voinovich Retiring D: Lee Fisher (Lt. Governor) R: Rob Portman (Former Congressman / OMB Dir)
*GOVERNOR Incumbent Ted Strickland seeking re-election D: Ted Strickland, Incumbent Governor R: John Kasich, Former Congressman, Media Figure, Financial Industry
ATTORNEY GENERAL Incumbent Richard Cordray seeking re-election D: Richard Cordray, Incumbent Attorney General R: Mike DeWine, Former US Senator, Former Lt. Governor, Congressman
*AUDITOR OF STATE Open Seat – Incumbent Auditor Mary Taylor (R) Running Lt. Gov D: David Pepper, Cincinnati Area County Office Holder R: David Yost, Delaware County Office Holder
*SECRETARY OF STATE Open Seat – Incumbent J.Brunner (D) vacating D: Maryellen O'Shaughnessy, Franklin County Clerk of Courts R: Jon Husted, State Senator from Suburban Dayton, Former House Speaker
TREASURER OF STATE Appointed Incumbent Kevin Boyce (D) Running to Retain D: Kevin Boyce, Incumbent, first-time on statewide ticket (former city councilman) R: Josh Mandel, State Representative Suburban Cleveland
SUPREME COURT CHIEF JUSTICE Incumbent, the late Chief Justice Thomas Moyer (R) was barred from seeking office due to age, however Chief Justice Moyer passed away unexpectedly in April. Following bereavement, Governor Strickland appointed Franklin County Probate Judge Eric Brown, the declared Democrat candidate. D: Eric Brown, Incumbent Chief Justice (RUNNING TO RETAIN) R: Maureen O’Connor, Current Associate Justice (Safe Seat)
7 of 64 SUPREME COURT ASSOCIATE JUSTICE Incumbent Lanzinger seeking re-election D: Mary Jane Trap, Court of Appeals Judge, Geauga County R: Judith Ann Lanzinger, Current Associate Justice
SUPREME COURT ASSOCIATE JUSTICE Incumbent Pfiefer is seeking re-election D: No candidate filed R: Paul Pfeifer, Current Associate Justice
OHIO HOUSE Current Makeup 53Ds – 46Rs
OHIO SENATE Current Makeup 21Rs – 12Ds
CONGRESSIONAL • 1st Congressional District REMATCH of 2008 Incumbent one-term Steve Driehaus (D) is again challenged by former Republican Congressman Steve Chabot. The OMA scores this district 51.20% Republican including two bad Republican years (2008 and 2006).
• 13th Congressional District Incumbent Betty Sutton (D – Copley) must defend her seat against autodealer, Tom Ganley (R – Brecksville). The OMA scores this district in 2010 41.9% Republican but with generic tickets favoring Republicans in double digits, Ganley, a well-known and well-funded candidate, has the best chance ever of defeating Sutton in 2010.
• 15th Congressional District REMATCH of 2008 Incumbent one-term Mary Jo Kilroy (D) is again challenged by Republican Steve Stivers (R) who very narrowly lost the contest in 2008. OMA scores this district 47.80% Republican down from 57.75% Republican in 2006.
• 16th Congressional District Incumbent one-term John Boccieri (D – Alliance) is challenged by Republican Jim Renacci (R – Wadsworth). The OMA scores this a 50.60% republican index in 2010 even with two bad election cycles in 2008 and 2006.
• 18th Congressional District Incumbent two-term Zack Space (D) will be challenged by Republican State Senator Bob Gibbs. The OMA scored this district 51.2% Republican. This coal country district is especially sensitive over Space’s vote for cap and trade. Having said that Space has a sizable war chest and may be able to defend the seat.
POSSIBLE BALLOT ISSUES
• All ballot issues were averted before the state deadline.
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OMA-PAC Endorsements for the Ohio General Assembly As of 9/15/2010
Ohio Senate Candidates:
District Candidate Name SD 1 – Delta Steve Buehrer SD 3 - Columbus Kevin Bacon (R) SD 9 - Cincinnati Eric Kearney (D) SD 17 – Greenfield Dave Daniels (R) SD 19 - Delaware Kris Jordan (R) SD 31 – Lancaster Tim Schaffer (R) SD 33 - Canfield Joe Schiavoni (D)
Ohio House Candidates
District Candidate Name HD 3 – Wooster Ron Amstutz (R) HD 4 – Lima Matt Huffman (R) HD 5 – Lancaster Gerald Stebelton (R) HD 6 – Bowling Green Randy Gardner (R) HD 8 – Beachwood Armond Budish (D) HD 20 – New Albany Matt Carle (R) HD 21 – Worthington Mike Duffey (R) HD 23 – Gove City Cheryl Grossman (R) HD 25 – Columbus Michael Stinziano (D) HD 28 – Cincinnati Mike Wilson (R) HD 29 – Cincinnati Lou Blessing (R) HD 30 – Cincinnati Bob Mecklenborg (R) HD 32 – Cincinnati Dale Mallory (D) HD 34 – Cincinnati Peter Stautberg (R) HD 38 – Centerville Terry Blair (R) HD 42 – Hudson Kristina Daley Roegner (R) HD 46 – Maumee Barbara Sears (R) HD 49 – Oregon Matt Szolllosi (D) HD 50 – Uniontown Todd Snitchler (R) HD 51 – Canton Kirk Schuring (R) HD 53 – Oxford Timothy Derickson (R) HD 54 – Hamilton Courtney Combs (R) HD 55 – Middletown Bill Coley (R) HD 58 – Norwalk Terry Boose (R) HD 62 – Willoughby Hills David Fiebig (R) 9 of 64
HD 63 – Leroy Ron Young (R) HD 66 – Loveland Joseph Uecker (R) HD 67 – Mason Peter Beck (R) HD 69 – Medina Bill Batchelder (R) HD 70 – Dayton Jarrod Martin (R) HD 71 – Newark Jay Hottinger (R) HD 72 – Springfield Ross McGregor (R) HD 73 – Mansfield Jay Goyal (D) HD 74 – Definace Burce Goodwin (R) HD 75 – Napoleon Lynn Wachtmann (R) HD 76 – Findlay Cliff Hite (R) HD 77 – Fort Recovery Jim Zehringer (R) HD 78 – Sidney John Adams (R) HD 79 – Troy Richard Adams (R) HD 80 – Sandusky Jeff Krabill (R) HD 81 – Freemont Rex Damschroder (R) HD 82 – Upper Sandusky Jeffrey McClain (R) HD 83 – Marysville Dave Burke (R) HD 84 – London Robert Hackett (R) HD 85 – Sabina Bob Peterson (R) HD 87 – Wellston John Carey (R) HD 88 – West Union Danny Bubp (R) HD 89 – Portsmouth Terry Johnson (R) HD 90 – Mt. Vernon Margaret Ruhl (R) HD 91 – New Lexington Dan Dodd (D) HD 93 – Marietta Andrew Thompson (R) HD 94 – Zanesville Troy Balderson (R) HD 95 – Steubenville Lou Gentile (D) HD 96 – Dover Al Landis (R) HD 97 – Killbuck Dave Hall (R) HD 98 – Chesterland Tim Grendell (R)
10 of 64 www.ohiopoweredbymanufacturing.com
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MEMORANDUM
To: Ohio Alliance for Civil Justice
COLUMBUS I CLEVELAND CINCINNATI-DAYTON From: Miranda C. Motter BRICKER & ECKLER LLP Bricker & Eckler LLP 100 South Third Street Columbus, Ohio 43215-4291 MAIN: 614.227.2300 Re: Legislative Update FAX: 614.227.2390 www.bricker.com Date: September 16, 2010 [email protected]
Miranda C. Motter Cy Pres Legislation -- Senate Bill 157 & House Bill 427 614.227.4810 [email protected] Legislation that would require undistributed class action proceeds to be donated to a charity organization is currently pending in both legislative chambers. Senate Bill 157, introduced by Senators Grendell and Seitz, and House Bill 427, introduced by Representatives Mark Schneider and Vernon Sykes, would codify the cy pres doctrine in Ohio. (Note, the only difference between Senate Bill 157 and House Bill 427 is the latter specifies that the charity organization must be a tax-exempt Section 501(c)(3) organization).
Because such codification would have a significant impact on Ohio’s class action system, the OACJ has been vigorously opposing both legislative measures and successfully held off a vote in the House Civil and Commercial Law Committee on House Bill 427 before the General Assembly adjourned for summer recess. Senate Bill 157 is pending in the Senate Insurance, Commerce and Labor Committee.
Cy pres proponents have been actively engaged over the summer months on this issue despite a period of legislative inactivity, and consequently, the OACJ has also spent a great deal of time educating Ohio companies and business leaders serving on Ohio’s non-profit boards about the negative impacts of the legislation.
Collateral Benefits Legislation – House Bill 361
In November 2009, Rep. Dennis Murray, a Democrat from Sandusky, introduced legislation limiting evidence of medical damages in personal injury and wrongful death cases to only the amount of the original pre-write-off medical bill, an amount which is almost never paid in full. Although the Ohio House of Civil and Commercial Law Committee reported the bill in February, House Bill 361 remains in the House Rules Committee.
4015473v1 Bricker & Eckler 12 of 64 ATTORNEYS AT LAW
In 2006, the Ohio Supreme Court ruled that limiting evidence in this way is impermissible (Robinson v. Bates (2006), 112 Ohio St.3d 17). The high Court affirmed the Robinson decision, in May of this year, specifically holding that a defendant in a personal injury lawsuit is not barred by Ohio’s collateral source statute from introducing evidence of medical bill “write-offs.” (Jaques v. Manton, Slip Opinion No. 2010-Ohio- 1838).
Subrogation – The OSBA Subrogation Task Force
In November 2009, the OSBA Council of Delegates rejected a proposal to significantly restrict an insurer’s right subrogation rights under Ohio law; however, the Council established a Subrogation Task Force to further examine the subrogation issue. The Task Force convened for the first time in March of this year and identified the following as its mission statement: “Parties injured by a wrongdoer often are not receiving what is perceived to be full or fair compensation in part because of issues in the subrogation laws of the State of Ohio.”
The Taskforce appears to have met for the last time this past week at least as currently structured. At that meeting, the Taskforce took testimony from the Ohio Association for Justice (OAJ), the Ohio Association of Civil Trial Attorneys (OACTA), the National Association of Subrogation Professionals (NASP) and a local practicing attorney. After the testimony was taken, the Taskforce was asked to vote to determine if its mission statement was still accurate. (A vote in the affirmative signified that the particular Taskforce member believed the mission statement was still accurate and that the Subcommittee should proceed to develop some sort of legislative resolution.)
After a 4-4 vote, the Taskforce decided to submit a final report to the OSBA President, which will summarize the Taskforce’s efforts on the issue and convey that a consensus could not reach on the issue of whether modifications of Ohio’s subrogation laws are warranted.
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Leadership News and Analysis
Senate Passes Small Business Act - September 17, 2010
As expected, Ohio Senator George Voinovich this week broke Republican ranks to support the Administration's proposal to spur lending assistance to manufacturers by creating a $30 billion lending pool that can be leveraged into $300 billion in loans to be administered by community banks. The OMA commends Senator Voinovich's leadership.
OMA Kicks Off Its 100 Year Celebration - September 17, 2010
The Ohio Manufacturers' Association marks its 100th birthday this year by celebrating manufacturing excellence in Ohio. Help celebrate by visiting the OMA’s 100 Years: Made in Ohio page on Facebook.
We invite you to post our 100 year banner and/or OMA logo on your web site.
Learn about the early days of the OMA, check out photos of the first OMA Chairman, Colonel J. G. Battelle, and see which Ohio manufacturers are 100 years old or older.
And watch your mail for more 100 year celebration news.
OMA Launches Renovated Website - September 17, 2010
OMA launched its renovated website, which is intended to make it much easier for members and manufacturers to understand and use OMA services.
“The new site is cleaner and easier to use,” said OMA president Eric Burkland. “Manufacturers are busy and the new site helps them find what they are looking for quickly. The management communities are the heart of the site and organize content by these segments: energy, environment, human resources, leadership, safety & workers’ compensation and tax. This is where members can find content relevant to their interests and work.”
Members should use the My OMA tool to customize their membership profiles and subscriptions. OMA services are available to all staff within member companies; encourage your colleagues to create a profile and subscribe to services.
GE Aviation to Hold September 28 Small Business Supplier Symposium - September 17, 2010
The University of Toledo and GE Aviation are collaborating on a small business supplier symposium to be held Tuesday, September 28 on the university campus. GE hopes to connect with 80 or more companies to provide direct or sub-tier materials to its supply chain. This is a list of the NAICS codes from which GE is interested in sourcing suppliers.
OMA Weighs-In For Heavy Truck Loads - September 17, 2010
A public hearing was held Monday at the Ohio Department of Transportation (ODOT) to consider an agency proposal to allow higher weight limits for trucks transporting sealed international shipping containers. Leading OMA members and partners have been working in support of the proposal and presented a letter of support at the hearing. Railroad lobbyists opposed the proposal.
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OMA Endorses Candidates for Ohio General Assembly - September 10, 2010
The OMA-PAC has released its first set of endorsements for the Ohio General Assembly. Candidates were evaluated based on their support of manufacturing issues, their record in the General Assembly, and the level of support from manufacturing leaders within their communities. To see the list of candidates that have received the OMA-PAC’s endorsement to date, click here.
OMA Visiting with Candidates Around the State - September 10, 2010
The OMA has been busy connecting candidates for the Ohio General Assembly with manufacturers this month. These meetings have the purpose of strengthening relationships between manufacturers, their candidates and elected officials, and the OMA. Effective relationships between manufacturers and legislators create accountability for results. The OMA will visit with more than 20 legislators in every corner of the state between now and Election Day; a list of recent visits can be found here.
Tool Kit Now Available for Educating Candidates about Manufacturing Issues - September 10, 2010
The OMA has developed a tool kit for members to use when visiting with Statehouse candidates. In today’s term-limited environment, it is more important than ever to educate your state legislators. And after they are elected it is important to follow their voting records on key manufacturing issues. Please use The OMA Candidate Interview Guide when you visit with the candidates.
Additionally, visit www.ohiopoweredbymanufacturing.com to access tools and resources to engage policymakers to protect your business.
OMA staff is interested in members’ opinions of the candidates. Please contact OMA lobbyists, Ryan Augsburger or Kevin Schmidt to share your impressions.
Voinovich Supports Manufacturing Over Politics - September 10, 2010
A congressional small business lending package has been stalled in the U.S. Senate. Ohio Senator George Voinovich this week announced he will break with Republican ranks and support the Administration's proposal to spur lending assistance to manufacturers by creating a $30 billion lending pool that can be leveraged into $300 billion in loans to be administered by community banks.
The legislation, known as the Small Business Jobs Act, also includes $12 billion in tax incentives. The measure is expected to pass the Senate narrowly in upcoming weeks. Media reports have described partisan pressure by Republicans to block the measure.
OMA Board Member, Jim McGregor, McGregor Metalworking Companies, Springfield, has been among manufacturers working tirelessly in support of the legislation, lobbying Congress, the Administration, and the Federal Reserve. “We appreciate Senator Voinovich’s big picture focus on this important measure,” said McGregor.
Honda Recognizes 2010 Suppliers of the Year, Includes OMA Members - August 20, 2010
The suppliers that met Honda's exacting requirements to become 2010 supplier-of-the-year award winners have a lot to celebrate. As Honda of America Senior Vice President Jim Wehrman said, "The events of the past year have fundamentally changed the auto industry, and there is no going back to normal." Honda presented MRO supplier awards and OEM supplier awards to the companies that
15 of 64 excelled even as the economy harshly tested them. Among the recipients were OMA members: Celina Aluminum Precision Tech, DuPont Company, Kennametal, and TFO Tech Co. LTD.
Obama Manufacturing Czar at Ohio Manufacturing Roundtable - August 20, 2010
OMA members participated in a manufacturing roundtable organized by U.S. Senator Sherrod Brown and Governor Ted Strickland this week in Cleveland. Ron Bloom, Senior Counselor to the President for Manufacturing Policy, presented the Obama administration's Framework for Revitalizing U.S. Manufacturing, and took feedback from attendees.
American manufacturing is being talked about seriously in Washington. Even by the Washington Post here.
Will the efforts be small beer or dramatic improvements needed to compete globally? Make a difference. Engage candidates for office on your issues today.
ODOT Proposes More Competitive Freight Shipping - August 20, 2010
A proposed rule change by the Ohio Department of Transportation will allow trucks to carry heavier international shipping containers. The OMA and leading member companies, including U.S. Steel, have been working to push the rule. Lobbyists for the railroad industry are opposing the proposal.
Included in the new proposal are new permit fees ($250 for a 45-day permit and $500 for a 90-day permit) that will need to be paid by the carrier. Since those fees will be passed along to the shipper, it will be important to ensure those fees be in-line with competitor states. Members that use international shipping containers are encouraged to communicate with their logistics providers and share feedback with the OMA .
The next step toward approval will be a public hearing in Columbus on Monday, September 12, at 2:00 p.m.
President Signs Miscellaneous Tariff Bill - August 20, 2010
(Courtesy of National Association of Manufacturers) On August 11, President Obama signed into law H.R. 4830, the U.S. Manufacturing Enhancement Act of 2010, better known as the Miscellaneous Tariff Bill, which removes duties on key products unavailable in the United States. The National Association of Manufacturers (NAM) had been working to educate Congress on the importance of the bill and how it will preserve and expand good American jobs, cut the costs of doing business in the United States and boost American manufacturing exports. To read more on the bill, click here.
Supply Chain Workshop for the U.S. Rail Industry - August 19, 2010
Congress has authorized $60 billion to begin the renewal of America's passenger rail network. By law, all new rolling stock must be traceable to 100% domestic content. Ohio, and the surrounding states, are uniquely positioned to provide the regional manufacturing concentration needed to revitalize this industry. The Ohio Edison Welding Institute (EWI) is sponsoring a Supply Chain Workshop on August 31 in Columbus.
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Webcast: Where is the economy headed - August 19, 2010
On Wednesday, August 25, 2010, 2:00 3:30 p.m. EST, join Dr. Ned Hill, Dean, Maxine Goodman Levin College of Urban Affairs and Manufacturers Extension Program Advisory Board member, when he provides an overview of the current economic landscape with a focus on the economic challenges and opportunities facing the manufacturing industry.
Ned's presentation is a blend of economics and public policy analysis that includes some insights gathered from recent conversations with manufacturers. Participants will gain a better understanding of the macroeconomic conditions impacting the manufacturing industry. Contact Natalie Turchi for access instructions for the no-charge webcast.
Brown to Obama: Enforce Trade Laws - August 06, 2010
Senator Sherrod Brown joined a bipartisan group of 11 U.S. Senators in a letter to President Obama urging "stronger action on behalf of U.S. businesses and workers competing against unfair trade practices conducted abroad."
"There is no doubt that the Chinese government is manipulating its currency to keep its value lower than it otherwise would be which gives its exports a significant price advantage over U.S. manufactured goods. We are gravely concerned by the Administration's failure to address China's currency practices and other predatory actions," the senators wrote. "In particular, the Administration has not actively used the trade enforcement authorities and tools it has to defend American manufacturers and workers against unfairly subsidized imports."
OMA Election Guide Available - August 06, 2010
The authoritative OMA 2010 Election Guide was published last week. Hard copies are available for purchase for $30 (included postage).
An online version of the guide is also available at no cost. This year's edition is chock full of data about the candidates and the districts. Past political performance and partisan political indices are included, as are insights from the political caucuses.
Get your copy today to be informed about the races. The OMA thanks the many publication sponsors for making this project possible.
Polls Predict Close Contests; Campaign Cash Pours In - August 06, 2010
In the race for campaign dollars, a pre-election report details fundraising activity of statewide candidates through July. In the month of July, gubernatorial challenger John Kasich posted a slight fundraising advantage over Governor Strickland, while Strickland holds $9.7 million on-hand to Kasich's $7.9 million.
Republicans Jon Husted and Josh Mandel comfortably outpaced their opponents in the races for Secretary of State and Treasurer of State. In the race for Attorney General, Republican Mike DeWine raised more funds in the period than did Democrat incumbent Richard Cordray; Cordray, however, enjoys a significant on-hand balance advantage.
A Rasmussen poll of statewide races released this week gives a 3-point advantage to challenger John Kasich, within the margin of error. A Quinnipiac University poll released a month ago gave Strickland a 5- point edge over Kasich. In late May, the Ohio Poll conducted by the University of Cincinnati also gave Strickland a narrow edge over Kasich.
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"Trapped Between Their Customers and Creditors" - July 30, 2010
Urging passage of the federal Small Business Emergency Loan Relief Act, Bill Gaskin, President of the Cleveland-based Precision Metalforming Association (PMA) said : "Small and medium sized manufacturers continue to bear the brunt of the financial crisis - trapped between their customers and creditors. We need this bill passed now because traditional lenders have either drastically reduced lines of credit or denied loans to companies that are healthy or temporarily impaired due to the global economic crisis."
Gaskin, the PMA and U.S. manufacturers achieved a victory last week when the U.S. Senate passed the bill, which had already been approved by the House. The bill creates a $30 billion lending pool that community bankers can use for small businesses, and $12 billion in tax incentives. Ohio Senators Sherrod Brown and George Voinovich both voted for the bill, and a key amendment that reinserted the lending pool provision.
OMA engagement on the issue began a year ago, when then OMA Chairman Jim McGregor, President, McGregor Metalworking Companies, Springfield, and President Eric Burkland travelled to D.C. with Governor Strickland and Senator Brown to push for action on the issue of access to credit. McGregor, who sits on the manufacturing advisory council in the U.S. Department of Commerce, has been a national leader on this issue.
There's a lot of talk about helping American manufacturing in Washington. It is good to see some action, and Ohio made the difference.
Export Nation: U.S. Metros and National Export Growth - July 30, 2010
"As job growth continues to lag behind the economic recovery, new policies should emphasize innovative directions to rebalance the U.S. economy away from excessive consumption and toward exports, innovation and production." So says the Brookings Institute, which on July 27 released "Export Nation: How U.S. Metros Lead National Export Growth and Boost Competitiveness."
This report demonstrates the key role exports, particularly manufacturing exports, can play in stimulating our national economy. The study produces a list of broad policy recommendations for increasing U.S. exports.
Invest in Passenger Rail, Grow Ohio Manufacturing - July 16, 2010
Manufacturing is at the center of the debate about whether to invest in passenger rail development in Ohio. In January, the Ohio Department of Transportation was awarded $400 million in federal economic recovery money to implement a proposed cross-state Amtrak passenger train system. The trains would operate on a 256-mile route from Cleveland to Columbus, Dayton and Cincinnati.
Opponents call the plan a fiscally irresponsible boondoggle. Proponents claim the infrastructure investments will stimulate the Ohio economy and create jobs. The proposed project has become a political football in the 2010 electioneering.
Researchers at Duke University's Center on Globalization, Governance & Competitiveness (CGCC) mapped out the U.S. rail manufacture geography. Ohio ranked fifth in number of top-tier firms with 13 first- or second-tier locations in the state. Ohio Rail Development Commission research found 226 freight rail supply firms in Ohio, supporting 26,516 jobs.
A report from Policy Matters Ohio (an advocate of the rail project) summarizes these two studies.
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Strickland and Cordray to Obama: Stop Stalling, Save the Great Lakes - July 13, 2010
Governor Ted Strickland and Attorney General Richard Cordray last week wrote a stern letter to President Obama demanding action to protect the Great Lakes from the ecological and economic threat posed by the Asian carp.
Strickland and Cordray wrote: "Allowing further delay is, in our judgment, no longer acceptable... Economically speaking, the damage done by the Asian carp getting into Lake Erie would be like the Ohio motor vehicle industry, a $12.6 billion industry supporting 114,000 jobs, leaving the area."
The fish have been found on the wrong side of the electric barriers in the Calumet River basin six miles away from Lake Michigan. The Ohio governor and attorney general call this a "preventable disaster," needing immediate federal action.
Americans Care about Manufacturing - July 01, 2010
A recent poll conducted for the Alliance for American Manufacturing shows that Americans are increasingly concerned about the need for a manufacturing focus. A summary of the poll results also reveals that Americans believe too many jobs are being lost to low cost countries like China.
Across all demographics, voters' economic solutions center on trade enforcement, clean energy, tax credits for U.S. manufacturing and replacing aging infrastructure using American materials.
Ballot Issue on Animal Cruelty Averted - July 01, 2010
Manufacturers that sell or source from agricultural products will be interested to note that the Humane Society of the United States (HSUS) will not proceed with a constitutional amendment to ban several farming practices. A deal was reached to have the newly created Ohio Livestock Care Standards Board voluntarily promulgate some of the proposed prohibitions and limitations. Governor Strickland announced the development together with agricultural industry leaders and HSUS leaders on Wednesday.
NAM Calls for National Manufacturing Strategy - July 01, 2010
The United States remains the world's top manufacturing economy. However as other nations are seeing manufacturing activity increase, U.S. manufacturing has been hemorrhaging jobs.
The United States needs a manufacturing strategy according to the National Association of Manufacturers which this week released A Manufacturing Strategy for Jobs and a Competitive America. "The unprecedented challenge to U.S. manufacturing pre-eminence requires clear thinking, a global vision and a plan," says John Engler, NAM President.
Manufacturing has been and remains Ohio's leading economic sector. The OMA recently published Manufacturing Counts to inform leaders of the facts.
Supreme Court Affirms Insurers' Liability to Pay Manufacturer's Claims - June 24, 2010
In a 5-1 opinion authored by Justice Judith Ann Lanzinger, the Ohio Supreme Court this week affirmed a standard for apportioning liability among multiple insurance companies. In the case, Park-Ohio, an Ohio based manufacturer had liability insurance policies with several different insurers. The company chose to designate Pennsylvania General as the lead, or targeted, insurer. Secondary insurers, Nationwide and Continental, denied any obligation to reimburse the targeted insurer.
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At issue was the 'all-sums' approach to allocation which had been established in a 2002 case now referred to as "Goodyear." Failure to uphold this standard would have limited policyholder rights, said the OMA in a friend of the court brief. "The court's decision is a major victory for manufacturers," said the OMA's Ryan Augsburger. OMA congratulates and thanks the counselors who worked to defend this standard.
Click for a summary of the decision by OMA amicus counsel Paul Rose of Brouse McDowell.
Ohio Manufacturing Organizations Sponsor Innovation Event for Leaders - June 21, 2010
A gang of organizations that help Ohio manufacturers compete including TechSolve, Magnet, Cleveland State, and the Ohio Manufacturing Institute are sponsoring a 3-day learning event for leaders: Innovation Engineering Leadership Institute, July 12-14, in Columbus.
This event is for the leaders, and their direct reports, of companies of all sizes pursuing innovation as their core strategy . . . or should be.
Truck Weight Limit Boost Being Considered to Spur International Shipping - June 18, 2010
The OMA participated in a meeting hosted by the Ohio Department of Transportation to invite comment on a proposal to increase roadway weight limits (permitted) for international shipping containers. In attendance were state transportation and business development officials, port authorities, economic development officials, trucking industry interests, railroads, multimodal park operators, agribusiness and manufacturers.
The OMA, like virtually all other interests, supports an increase in the permitted weight limits for international shipping containers to improve shipping efficiency and bolster the supply of international containers. Railroad lobbyists and the state rail development commission were critical of any proposal to facilitate heavier trucks contending that further study on road degradation from heavy trucks is needed. For many years, railroad interests have used Ohio law and regulations to limit industrial freight traffic on Ohio roadways. Members are invited to review the proposal and other meeting materials and provide comment to OMA staff.
Think Manufacturing Doesn't Lead Ohio Economy? Get the Facts! - June 16, 2010
The Ohio Manufacturers' Association has prepared Ohio Manufacturing Counts 2010 to provide Ohioans with an understanding of the importance of manufacturing to the economic future of the state.
The conversation about Ohio manufacturing often polarizes: manufacturing vs. service jobs; manufacturing vs. high technology; manufacturing vs. the new economy ... it needn't.
With an appreciation of the true contribution that modern Ohio manufacturing makes to the state's economy and our quality of life, Ohioans will no longer talk about Ohio's manufacturing past but will acknowledge Ohio's manufacturing heritage and understand that manufacturing is critical to Ohio's future.
But, don't take our word for it ... the facts speak for themselves.
John Thompson Retires from OMA Board after 45 Years - June 15, 2010
John C. Thompson, who most recently served as Chairman of the Board of The Hall China Company, East Liverpool, retired from the OMA board of directors this month.
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John was appointed to the OMA board in 1965 and elected in 1966.
The OMA staff and board were inspired by John's love of Ohio manufacturing. He will be missed.
OMA Board Elects Directors and Officers - June 15, 2010
At its annual meeting the OMA Board re-elected its 'C Class' of directors, which is one-third of its directors; directors serve three-year terms and are divided into three classes to preserve institutional knowledge and provide governance stability.
Re-elected directors are: John L. Boylan, Treasurer, Lancaster Colony; Hoy E. Frakes, Jr., President, Metallurg Vanadium, David W. Johnson, President, Summitville Tiles, Inc., Robert J. Lapp, Vice President, Government Affairs, The Timken Company, James B McGregor, Sr., Vice Chairman, McGregor Metalworking Companies, Adrian Price, Plant Manager, Ford Motor Company, Greg Wolking, North America Supply Chain Leader, Proctor & Gamble.
Dave Pigion, Plant Manager, DuPont was elected to the board seat previously held by retiring DuPont plant manager, Tony Eichstadt. Also newly elected to the Board is Bryan Vaughn, President, Pro-Tec Coating Company, who replaces the retiring Pro-Tec Coating president, W. Paul Worstell.
Completing his two-year term as chairman of the OMA board of directors is James B. McGregor, Sr., Vice Chairman, McGregor Metalworking Companies. The Board elected Jeffrey L. Hollister, President, Vanguard Paints & Finishes, Inc. as chairman and Hoy E. Frakes, Jr., President, Mettalurg Vanadium as first vice chairman.
These leaders carry on the work of the OMA as it enters its 100th year.
OMA Board Endorses Supreme Court Justices - June 15, 2010
The OMA board of directors voted this week to endorse Justice Maureen O'Connor for election as Chief Justice of the Ohio Supreme Court and Justice Judith Ann Lanzinger for re-election as Justice of the Ohio Supreme Court.
Repeal Ohio's Estate Tax Says OMA Board - June 15, 2010
At its meeting this week, the OMA board of directors took a position against Ohio's estate tax. The board considers Ohio's estate tax a disincentive to investment in existing businesses and an impediment to capital formation necessary for the health of Ohio's economy. The tax is believed to encourage tax avoidance strategies that divert capital from productive Ohio uses.
The board says that Ohio's estate tax should be repealed.
Lawmakers Head Home for Summer - June 11, 2010
After several months of contentious Statehouse activity frequently punctuated by partisan politics, last week legislators completed last minute work, like the casino implementing statute, and headed home to
21 of 64 their districts, marking the beginning of the summer recess. They are not expected to return until after the November general election.
OMA's Leadership Briefing will be published as news is available during the recess.
Lawsuit Abuse: Cy Pres Bill Mercifully Stalled in House - June 11, 2010
Thanks to your calls and letters of concern, members of the Ohio House were unable to advance HB 427, which would mandate payments to charities in Ohio class action lawsuits. The OMA continues to urge lawmakers to defeat this legislation that will harm Ohio's quite-favorable legal climate.
Auto Dealer Legislation Sails Through HouseJune - 03, 2010
After passage by the Ohio Senate last week, the Senate "compromise" auto dealer franchise bill was unanimously approved by the House. OEMs signaled that the bill was satisfactory, as the most onerous proposed regulations were withdrawn or scaled back. The Governor, who has been supportive of the manufacturing position on the bill, is expected now to sign it. Your calls and emails to Senators and Representatives helped to bring about the improvements.
Compromise Reached on Auto Franchise Legislation - May 28, 2010
At the 11th hour, auto OEM's reached an accord with auto dealers, enabling the Ohio Senate to unanimously vote for the compromise version of the auto franchise bill this week. OMA members that contacted lawmakers helped to create conditions for the deal.
For nearly a year, state lawmakers have been considering action to aid auto dealers (at the expense of OEM's), following the bankruptcy filings of GM and Chrysler. The legislation is expected to advance in the Ohio House next week, with completion expected before the summer legislative recess.
Credit Assistance Proposal Floated - May 28, 2010
It's no secret that manufacturers have seen availability of credit restricted. In response to the credit crisis, state representative Jay Goyal (D Mansfield), the House Majority Whip, has proposed HB 521 to create a new state lending program. The bill leverages funds on deposit in the state treasury to provide working capital loans to firms that meet certain criteria. The program also envisions equity lending for acquisitions.
As drafted, the bill targets loans for companies with sales up to $50 million, and envisions an outsourced program administrator to establish loan criteria and work with participating financial institutions. The cost to the state would be foregone interest income.
Representative Goyal has asked the OMA to support his legislation. Members are invited to review the summary and share input. Contact Ryan.
OMA Key Vote Negative Civil Justice Reform - May 28, 2010
The Ohio House of Representative's did not take a vote on HB 427 which would codify the Cy Pres doctrine as the default preference in class-action lawsuits filed in Ohio. In anticipation of the House acting, the OMA issued a Key Vote earlier this week reaffirming the organization's opposition to the bill. Negotiations are currently underway to attempt to craft a compromise; it remains to be seen if one can occur.
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Harmful "Auto" Legislation Nearing Passage - May 21, 2010
A Senate panel which has been hearing testimony on a proposed auto dealer franchise bill, Senate Bill 204, this week unveiled a new substitute version of the bill. According to a comparative summary of the latest sub bill some of the most egregious new regulatory burdens have been reduced.
However, even with those improvements, the legislation continues to impose new burdens, restricting OEMs contracting terms with their dealers. That can have the effect of tying up OEM resources that might otherwise be devoted to product development and supply chain capital needs.
The OMA told Senators in testimony that giving special treatment to auto dealers (at the expense of auto manufacturers) will not fix, but would harm, Ohio's economy. Use the OMA's action alert to take action!
Lawsuit Payout Redistribution Mandate: "An Unacceptable Cost to the State's Competitiveness" - May 21, 2010
Members of the Ohio House Civil and Commercial Law Committee this week heard opponent testimony to H.B. 427, legislation to mandate charitable contributions in class-action lawsuits, including settlements. Together with a wide-array of business and professional groups, the OMA told the panel that the bill will increase the cost of litigation and disadvantage Ohio businesses.
In contrast, trial lawyers urged the committee to pass the bill, saying that it is needed to make corporations accountable and prevent "rewarding" corporate offenders.
"Keep in mind in settlements there is no finding of guilt so the trial lawyer motivation would seem to be self-serving and redistributionist," notes the OMA's Ryan Augsburger. If you have not yet taken action, please do so before next Wednesday.
Good News is .... Good News - May 07, 2010
OMA Daily Clips is a free subscription service for OMA members. We clip a bunch of daily news that is relevant to manufacturers and compile it into an easy to read digest. If you want to subscribe, email Judy Thompson.
Our staff Clips editor, Sam Heydinger, noticed there were a lot of good news headlines today and wanted you to know: (The item about PRO-TEC Coating is good news for retiring president Paul Worstell, but he will be mightily missed by OMA staff as a dedicated OMA board member.) Here are links to some good news:
PRO-TEC Coating president retiring.
AK Steel breaks world casting record.
Libbey cites 'lean' work in rebound.
O-I remains 'strong, stable'.
Manufacturing tax credit may be expanded.
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Miscellaneous Legislation of Interest to provide benefits for colorectal examinations Manufactuers and laboratory tests for cancer. Prepared by: The Ohio Manufacturers' Current 5/20/2009 - House Insurance,
Association Status: (Second Hearing) Report created on September 20, 2010 Comments: None
HB2 TRANSPORTATION BUDGET (UJVAGI, HB81 DIABETES (BOYD, B) To require certain P) To make appropriations for the programs health care policies, contracts, agreements, related to transportation and public safety for and plans to provide benefits for equipment, the biennium beginning July 1, 2009, and supplies, and medication for the diagnosis, ending June 30, 2011. treatment, and management of diabetes and Current 4/1/2009 - SIGNED BY for diabetes self-management education. Status: GOVERNOR, eff. 4/1/2009 - Current 12/15/2009 - Referred to (13 vetoes) Status: Committee Senate Insurance, Comments: None Commerce and Labor Comments: None HB7 BUILDING SUSTAINABILITY STANDARDS (HARRIS, M) To require a HB96 COOLING AGENT/ANTIFREEZE building or structure erected or constructed (SKINDELL, M) To require the inclusion of a using state capital moneys to adhere to bittering agent in engine coolant and certain sustainability standards. antifreeze. Current 5/18/2010 - Senate Finance Current 3/23/2010 - Senate Insurance, Status: and Financial Institutions, Status: Commerce and Labor, (Second (Second Hearing) Hearing) Comments: None Comments: None
HB8 AUTISM (CELESTE, T) To prohibit health HB117 COMMERCIAL ACTIVITY TAX (JONES, insurers from excluding coverage for specified S) To require 30% of commercial activity tax services for individuals diagnosed with an revenue to be used indefinitely for local autism spectrum disorder. government purposes. Current 12/15/2009 - Referred to Current 4/14/2009 - Referred to Status: Committee Senate Insurance, Status: Committee House Ways and Commerce and Labor Means Comments: None Comments: None
HB40 COURT-ORDERED PARENTING (LETSON, HB134 CANCER SCREENING EXAMS (DEBOSE, T) To require certain employers to allow a M) To require certain health care insurers and parent to exercise court-ordered parenting plans, including the state's Medicaid program, time without terminating employment, to provide benefits for prostate, colorectal, reducing pay, or taking other similar action cervical, and ovarian cancer screening against the parent. examinations. Current 10/7/2009 - House Judiciary, Current 6/3/2009 - House HealthCare Status: (Third Hearing) Status: Access and Affordability, (First Comments: None Hearing) Comments: None HB45 VEHICLE HEADLIGHTS (UJVAGI, P) To require the headlights of a vehicle to be HB136 OVARIAN CANCER SCREENING (DEBOSE, lighted when its windshield wipers are in use. M) To require certain health care insurers and Current 3/4/2009 - Referred to plans, including the state's Medicaid program, Status: Committee House to offer to provide benefits for ovarian cancer Transportation and screening examinations. Infrastructure Current 6/3/2009 - House HealthCare Comments: None Status: Access and Affordability, (First Hearing) HB56 COLORECTAL EXAMINATIONS (MILLER, Comments: None E) To require certain health care plans to 24 of 64
HB159 UNIVERSAL HEALTH CARE (SKINDELL, M) To establish and operate the Ohio Health HB230 COMMON SENSE REGULATION ACT Care Plan to provide universal health care (MORAN, M) To enact the Common Sense coverage to all Ohio residents. Regulation Act to improve state agency Current 6/3/2009 - House HealthCare regulatory processes, especially as they relate Status: Access and Affordability, (First to small businesses, to require state Hearing) departments to develop customer service Comments: None training programs, and to require the director of environmental protection to HB170 EMPLOYER RETALIATION (MURRAY, provide environmental regulatory compliance D) Prohibit an employer from retaliating assistance to small businesses. against the employer's employee for testifying Current 3/2/2010 - Senate State and Status: Local Government and in an unemployment compensation proceeding. Veterans Affairs, (First Current 1/12/2010 - House Commerce Hearing)
Status: and Labor, (Fourth Hearing) Comments: None Comments: None HB311 SMALL BUSINESS (MCGREGOR, R) To HB184 WORK ELIGIBILITY STATUS (COMBS, require a rule-making agency to prepare cost- C) To require employers to register and benefit and regulatory flexibility reports for participate in a status verification system to rules that may have any adverse impact on verify the work eligibility status of all new small businesses and submit them to the new employees and to affirm their participation on Ohio Small Business Ombudsperson in the their state income tax returns, to specify that Office of Small Business, to create the Small an employer's failure to affirm their Business Regulatory Review Board to review participation in the status verification system objections to those rules and make on their state income tax returns constitutes recommendations to the Joint Committee on falsification or dereliction of duty, to require Agency Rule Review regarding the rules, and public agencies to cancel contracts with to require impact to the Governor and private employers who do not participate in a General Assembly. Current 11/10/2009 - House State status verification system, to require jail officials to make a reasonable effort to verify Status: Government, (First Hearing) the citizenship of confined persons, to collect Comments: None electronic fingerprints of illegal aliens, and to notify the United States Department of HB337 COMPANIES RELOCATING FROM OHIO Homeland Security in certain circumstances, (BAKER, N) To require the Department of to prohibit political subdivisions from Development annually to compile a report of restricting communication and cooperation companies that relocated out of this state and with federal officials regarding a person's to attempt to determine the motivation citizenship status, to require judges and behind the relocations. magistrates to consider immigration status Current 12/9/2009 - House Economic and other factors in determining a Status: Development, (Fourth defendant's bail, and to declare an Hearing) emergency. Comments: None Current 6/24/2009 - House Judiciary,
Status: (Second Hearing) HB343 STATE GOVERNMENT OPERATING Comments: None EFFICIENCIES (SCHNEIDER, M) To conduct a study of potential operating efficiencies in HB229 COMPREHENSIVE CLEANING SYSTEM state government. FOR SCHOOLS (STEWART, D) To require Current 11/18/2009 - House State
the Department of Health to establish a pilot Status: Government, (First Hearing) program to test the effectiveness of the Comments: None "OS1" comprehensive cleaning system in
public schools. HB364 MOTOR VEHICLE DEALERS LAW (LUNDY, Current 10/14/2009 - House Health, M) Relative to the termination of franchises Status: (Third Hearing) and prohibited acts under the Motor Vehicle Comments: None Dealers Law. 25 of 64
Current 5/11/2010 - House Civil and good or service; to require the Council to Status: Commercial Law, (Seventh prepare an annual report; and to require the Hearing) Governor to select goods or services that Comments: None could be provided by a private contractor and submit the selections for Council review. Current 3/16/2010 - House State HB381 WORKFORCE DEVELOPMENT INTERMEDIARY COMMITTEE (WILLIAMS, Status: Government, (First Hearing) B) To create the Workforce Development Comments: None Intermediary Committee. Current 11/30/2009 - Referred to HB470 DISCRIMINATION AGAINST SMOKERS Status: Committee House Commerce (DYER, S) To prohibit employment and Labor discrimination against smokers. Comments: None Current 4/13/2010 - Referred to Status: Committee House Commerce HB423 INDUSTRY SECTOR STRATEGY and Labor TRAINING PROGRAM (WILLIAMS, S) To Comments: None create the Industry Sector Strategy Training Program, to require the awarding of academic HB490 UNIFORM COMMERCIAL CODE (DYER, credit to individuals who complete the S) To adopt the revisions to the general program, and to require the Department of provisions and documents of title portions of Job and Family Services to streamline core the Uniform Commercial Code that were services provided under the Federal recommended by the National Conference of Workforce Investment Act. Commissioners on Uniform State Laws and to Current 2/2/2010 - Referred to make related changes in the Uniform Status: Committee House Economic Commercial Code and the Revised Code. Development Current 5/26/2010 - SUBSTITUTE Comments: None Status: BILL ACCEPTED & REPORTED OUT, House
HB427 CLASS ACTION MONETARY AWARDS Financial Institutions, Real (SCHNEIDER, M) To declare how monetary Estate and Securities, (Second awards in class actions that are not paid over Hearing) to members of the class are to be used. Comments: None Current 5/25/2010 - House Civil and Status: Commercial Law, (Fourth HB523 UNIFORM DEFINITION OF EMPLOYEE Hearing) (PHILLIPS, D) To create a generally uniform Comments: None definition of employee for specified labor laws and to create a uniform standard to HB434 ADVANCE NOTICE-MASS LAYOFFS determine whether an individual performing (YUKO, K) To require certain employers to services for an employer is an employee of give advanced notice of mass layoffs, that employer. Current 5/25/2010 - House Commerce worksite closings, and transfers of operation. Current 2/8/2010 - Referred to Status: and Labor, (First Hearing) Status: Committee House Commerce Comments: None and Labor Comments: None HCR24 JOINT SELECT COMMITTEE - AUTOMOBILE INDUSTRY (LUNDY, M) To create the Joint Select Committee on the HB436 COUNCIL ON EFFICIENT GOVERNMENT Impact of the Changing Automobile Industry (BALDERSON, T) To contract out is provision in Ohio to study the automobile industry as it of a good or service to a private contractor relates to manufacturers, suppliers, dealers, under specific contractual provisions; to and consumers. require the state agency to prepare a Current 6/25/2009 - ADOPTED BY business case before executing such a contract; to create the Council of Efficient Status: SENATE, Vote 31-0 Government to review business cases, issue Comments: None advisory reports, and undertake other duties regarding contracting out the provision of a HCR27 COMMERCIAL DOCKET PILOT 26 of 64
(SNITCHLER, T) To express the General Assembly's support for the commercial docket SB4 PERFORMANCE AUDITS FOR pilot project established by the Supreme REGULATORY AGENCIES (SCHAFFER, Court. T) To require the Auditor of State to conduct Current 11/18/2009 - House Judiciary, performance audits of the Bureau of Workers'
Status: (First Hearing) Compensation, Environmental Protection Comments: None Agency, Department of Natural Resources, Department of Agriculture, and Department HJR13 INITIATIVE/REFERENDUM APPROVAL of Health, and to require the Auditor of State (DOMENICK, J) To require sixty-seven per to develop a schedule to provide for periodic cent of the electors voting in an initiative or performance audits of all state agencies. referendum to vote in favor of the issue in Current 2/2/2010 - Referred to order for the issue to be approved. Status: Committee House Finance and Current 2/2/2010 - House Elections Appropriations
Status: and Ethics, (First Hearing) Comments: None Comments: None SB9 FILM TAX CREDIT (PATTON, T) To SB1 BUILDING OHIO JOBS PART II (HUGHES, authorize income tax credits for investments J) To implement the additional debt authority in motion pictures produced in Ohio. Current 3/11/2009 - House Ways and for conservation and revitalization programs provided by Section 2q of Article VIII of the Status: Means, (First Hearing) Ohio Constitution, to authorize the issuance Comments: None of that debt, to make new appropriations for the purpose of continuing programs SB15 HEALTH CARE POLICIES (MILLER, D) To established by Am. Sub. H.B. 554 of the prohibit discrimination in health care policies, 127th General Assembly, the Bipartisan Job contracts, and agreements in the coverage Stimulus Act, and to declare an emergency. provided for the diagnosis and treatment of Current 3/5/2009 - Referred to mental illnesses and substance abuse or Status: Committee House Finance and addiction conditions. Appropriations Current 3/31/2009 - Senate Health, Comments: None Status: Human Services and Aging, (First Hearing) SB2 FEDERAL INFRASTRUCTURE FUNDING Comments: None (CAREY, JR., J) To provide for the distribution of moneys received by the state from the SB31 EMPLOYEE federal American Recovery and Reinvestment ORGANIZATION/BARGAINING UNIT Act of 2009 by making appropriations and to (PATTON, T) To create a testimonial privilege declare an emergency. for communication between a representative Current 3/18/2009 - Referred to of an employee organization and a bargaining Status: Committee House Finance and unit member. Appropriations Current 6/10/2009 - SUBSTITUTE Comments: None Status: BILL ACCEPTED, Senate
Judiciary - Civil Justice, SB3 SMALL BUSINESS EMPOWERMENT ACT (Second Hearing) (FABER, K) To require a rule-making agency Comments: None to prepare a cost-benefit report for, and regulatory flexibility analysis of, rules that SB34 HEALTH INSURANCE PROGRAMS may have any adverse impact on small (MILLER, D) To create a health insurance businesses, to create the Small Business program that allows municipal corporations, Regulatory Review Board. small employers, and nonprofit corporations Current 5/19/2010 - Consideration of or associations to purchase for their Status: House Amendments, House employees the same policies provided to state insists on amendments; employees. requests Committee of Current 3/31/2009 - Senate Insurance, Conference Status: Commerce and Labor, (First Comments: None Hearing) 27 of 64
Comments: None Status: and Transportation, (First Hearing) SB36 JUDGMENT OFFERS- CIVIL PROCEDURE Comments: None (KEARNEY, E) To amend the Ohio Rules of Civil Procedure regarding offers of judgment. SB131 BIOBASED SUPPLIES (GILLMOR, K) To Current 6/24/2009 - REPORTED OUT require the Director of Administrative Services Status: AS AMENDED, Senate establish a program that ensures that
Judiciary - Civil Justice, supplies composed of biobased products are (Fourth Hearing) purchased by DAS, state agencies, and state- Comments: None supported institutions of higher education. Current 2/27/2010 - SIGNED BY
SB52 EXECUTIVE BRANCH-STATE Status: GOVERNOR, eff. 5/31/10 GOVERNMENT (GRENDELL, T) To Comments: None reorganize the executive branch of state government. SB138 INSURANCE COVERAGE FOR Current 10/27/2009 - Senate State CHEMOTHERAPY (MILLER, R) To require Status: and Local Government and certain insurers that provide coverage for
Veterans Affairs, (Sixth cancer chemotherapy treatment to provide Hearing) coverage for certain prescribed, orally Comments: None administered anticancer medication on a basis no less favorable than intravenously SB64 COLORECTAL EXAMINATIONS administered or injected cancer medications (COUGHLIN, K) To require certain health care that are covered under the policy. policies, contracts, agreements, and plans, as Current 6/17/2009 - Referred to well as the state's Medicaid program, to Status: Committee Senate Insurance, provide benefits for colorectal examinations Commerce and Labor and laboratory tests for cancer. Comments: None Current 5/25/2010 - Senate Insurance, Status: Commerce and Labor, (First SB157 CLASS ACTION AWARDS (GRENDELL, Hearing) T) To declare how monetary awards in class Comments: None actions that are paid over to members of the class are to be used. SB76 LEAD HAZARD REMOVAL (KEARNEY, E) To Current 11/10/2009 - Senate establish a grant program to pay lead hazard Status: Insurance, Commerce and removal costs incurred by qualified Labor, (Second Hearing) homeowners and to make an appropriation. Comments: None Current 9/22/2009 - Senate Finance Status: and Financial Institutions, SB204 MOTOR VEHICLE DEALERS LAW (First Hearing) (WAGONER, M) Relative to the termination of Comments: None franchises and prohibited acts under the Motor Vehicle Dealers Law. Current 6/10/2010 - SIGNED BY SB117 MULTIPLE CHEMICAL SENSITIVITY (MILLER, D) To designate the month of May Status: GOVERNOR, eff. 9/10/2010 as "Multiple Chemical Sensitivity Awareness Comments: None Month." Current SB212 CLAIMS - UNPAID WAGES (MORANO, 6/3/2010 - Informally Passed Status: S) To allow the Director of Commerce to Comments: None investigate and enforce specified claims involving unpaid wages. SB121 TRANSPORTATION INNOVATION Current 12/2/2009 - Referred to AUTHORITIES (NIEHAUS, T) To authorize Status: Committee Senate Insurance, the creation of transportation innovation Commerce and Labor authorities by specified governmental entities Comments: None and to establish the powers and duties of such authorities. SB244 HEALTH INSURANCE (JONES, S) To Current 6/10/2009 - Senate Highways prohibit requiring an individual to obtain or 28 of 64
maintain a policy of health insurance. all groups regardless of their representation. Current 5/11/2010 - Referred to Current 2/24/2010 - ADOPTED BY
Status: Committee Senate Insurance, Status: SENATE, Vote 33-0 Commerce and Labor Comments: None Comments: None SJR5 REDISTRICTING PROCESS (HUSTED, SB269 RESTRUCTURING STATE GOVERNMENT J) To revise the redistricting process for (GRENDELL, T) Relative to joint purchasing General Assembly and Congressional districts. by members of a regional council of Current 1/13/2010 - House Elections
governmental; consolidation of boards and Status: and Ethics, (First Hearing) commissions for purposes of Central Service Comments: None Agency support services, privatization of governmental functions; and restructuring of SR21 ECONOMIC RECOVERY FUNDS (MORANO, state government. S) To encourage the use of federal economic 5/26/2010 - Referred to Current recovery funds to promote goods and Status: Committee Senate State and services made or performed by American Local Government and citizens and companies. Veterans Affairs Current 3/24/2009 - Referred to Comments: None Status: Committee Senate Finance and Financial Institutions SCR2 PRIVATE BALLOT UNION ELECTIONS Comments: None (GIBBS, B) To request the Ohio Congressional delegation to oppose legislation that
disenfranchises Ohio workers by removing
their right to a private ballot union election. Current 3/24/2009 - Senate Insurance, Status: Commerce and Labor, (Second Hearing) Comments: None
SCR19 SENIORS HEALTH CARE (GRENDELL, T) To urge the President and the Congress of the United States to protect the rights of seniors when considering proposals for health care reform. Current 9/29/2009 - Referred to Status: Committee Senate Health, Human Services and Aging Comments: None
SCR22 WAGE THEFT PREVENTION (MORANO, S) To urge the Congress of the United States to enact House Resolution 3303, the Wage Theft Prevention Act. Current 3/2/2010 - Senate Insurance, Status: Commerce and Labor, (First Hearing) Comments: None
SCR23 DELPHI RETIREES (CAFARO, C) To urge the President, the Secretary of the Treasury, the head of the Auto Task Force, and the members of Congress to treat all General Motors Delphi retirees fairly and provide for full earned pensions and other post- employment benefits in the same manner for 29 of 64
To: OMA Government Affairs Committee From: Kevin Schmidt, OMA Staff Re: Energy Update Date: 09/21/2010
1. General Assembly Actions
a. SB 232– SB 232 passed the General Assembly since the last meeting and was signed by the Governor. It included several provisions and incorporated SB 223 which expands the scope of Special Improvement Districts to allow for loans to be made to manufacturers for energy efficiency, peak demand, renewable energy, and other energy related projects. SB 232 also improved the tax status of certain renewable facilities (wind and solar). The OMA pushed for and saw incorporation of cogeneration facilities in this favorable tax treatment.
2. PUCO Actions
a. Self-Direct Filings – The PUCO issued an entry last week in an attempt to streamline the application process for self-direct filings. Recall, this process allows companies who have made energy efficiency improvements at their facilities to commit those savings to their electric utility and in return receive a monetary award. The process the PUCO released last week is common for all utilities, creates a 60 day review period, and requires participating companies to accept a up-front cash payment in lieu of opting out of the energy efficiency rider. Additionally, the PUCO made several business friendly clarifications including how energy efficiency is to be measured.
b. First Energy Rate Case – The PUCO approved First Energy’s latest rate case which sets up an auction process to set prices for those customers who do not use a 3rd party to supply their electricity requirements. The OMA was able to get several manufacturing provisions included in the rate case including reduced costs on small and mid sized manufacturers. 30 of 64
News and Analysis
PUCO Improves Energy Efficiency Programs - September 17, 2010
This week the PUCO created a program meant to ease the regulatory burden on manufacturers who have adopted energy efficiency measures.
The program creates a template application with set approval timelines for manufacturers to earn rebates based upon energy efficient equipment or processes installed within the past 3 years. Click here to read a detailed memorandum from OMA energy counsel.
First Energy Customers: Your Energy Efficiency Programs Can Protect Against Utility Charges - September 10, 2010
On August 26, OMA with FirstEnergy and OMA Connections Partner, Patrick Engineering, presented a webinar to help qualified FirstEnergy customers understand how to avoid costs associated with the FirstEnergy Demand Side Management and Electric Efficiency Rider.
Because utilities are required – under Ohio law (Senate Bill 221) - to meet energy efficiency targets, utilities are permitted by the Public Utilities Commission of Ohio to take credit for energy savings on customer-initiated energy efficiency projects. In exchange, the utilities will exempt those companies from paying a billed rider for a period of time determined by the overall MWh savings.
One program is available to FirstEnergy “mercantile” customers (commercial or industrial customers that consume more than 700,000 kWh of electricity a year, or are part of a national account involving multiple facilities in one or more states) with 500,000 kWh or more of identified annual savings on customer- initiated energy efficiency projects (implemented on or after January 1, 2006). Listen to the recorded webinar.
FirstEnergy Gets OK to Make Electricity from Biomass - August 20, 2010
The PUCO recently approved FirstEnergy s (FE) application for its Burger Plant to become a renewable energy resource generating facility, clearing the way for it to make electricity by burning wood and other biomass products. FirstEnergy's decision was tied to a consent decree issued by U.S. EPA that required FE to either modify the plant's operation or shut it down.
Concerns have been raised about whether switching to biomass is useful or sustainable as it causes utilities to compete with Ohio s paper industry for raw material and it has been claimed that burning biomass results in more emissions than coal. See the story published by Hannah News Service for more details.
FirstEnergy Rate Filing Promises Potential Benefits - July 30, 2010
The OMA signed onto a rate-making argument advanced by FirstEnergy. The stipulation filed on July 22 contains items that OMA Energy Counsel believes will be beneficial for FirstEnergy customers. Click for summary of the filing.
Senator Voinovich Calls for Nuclear Renaissance - July 30, 2010 31 of 64
Late last week, U.S. Senator George V. Voinovich introduced legislation to spur nuclear energy investment. The bill provides the private sector with financial incentives, trains our talented workforce, and allows nuclear to compete on a level playing field with renewable energy sources. Nuclear power provides 20 percent of our nation's electricity and 70 percent of our emission-free electricity, while wind and solar only currently provide about 3 percent. Members of the OMA Energy Resources Committee will discuss the matter.
"Excessive Earnings" in Electric Utility Rate Cases Delayed - July 16, 2010
July 14 had been the deadline for utilities to file with the Public Utilities Commission of Ohio (PUCO) to prove that rates charged to customers were not resulting in "significantly excessive earnings." The filing was an important step in the rate-making process enshrined in Ohio's electricity restructuring law (S.B. 221) to protect consumers.
But, July 14 came and went without a single filing by a utility on excessive earnings. The reason: The PUCO granted a delay until September 1.
In the Finding and Order issued this week, the PUCO granted the extension sought by Duke Energy. The PUCO also waived the July deadline for AEP and FirstEnergy. Days earlier, the OMA, together with the Ohio Hospital Association, Ohio Energy Group and the Ohio Consumers' Counsel, filed a motion opposing the request for delay. Read more.
Stay tuned and stay engaged with OMA. This process directly impacts your power costs.
Ohio Senators Urging Caution - Sudden Push for Climate Change - July 01, 2010
Both Ohio Senators, Sherrod Brown (D) and George Voinovich (R), were among a handful of senators summoned to a pivotal White House meeting with President Obama this week. In recent days, with Americans focused on the oil spill in the Gulf, some Senators are working to quickly advance the Kerry Lieberman climate change legislation.
Following the meeting, Senator Brown characterized that there is recognition that the legislation cannot compromise jobs or economic security. Senator Brown has been a leader on the need to protect manufacturing competitiveness and articulated needed revisions with Kerry-Lieberman in an April letter.
Senator Voinovich, one of a few Republicans included in the meeting, released a statement saying that "the lack of agreement sent a clear signal to the president, Senator Kerry and Senator Lieberman that the chances of passing their cap and trade legislation are quite slim." The Senator renewed calls to focus on nuclear energy development.
PUCO Punts on "Excessive Earnings" Threshold - June 30, 2010
The Public Utilities Commission of Ohio (PUCO) this week acted to define certain parameters for determining when an electric utility is making "significantly excessive earnings" on the backs of rate- payers. In such instances, the PUCO can order the utility to refund to customers that portion of the excessive earnings paid by customers over the previous year. This authority was granted to the PUCO under the landmark electric restructuring legislation, Senate Bill 221. The OMA supported this important provision and filed comments with the PUCO several months ago.
In its Finding and Order, the PUCO rejected a key recommendation of its staff that will be favorable for manufacturers. On the other hand, the Commission sidetepped for the time being the critically important question of how excessive earnings must be before they will be considered "significantly excessive." The 32 of 64
PUCO did preserve its ability to order refunds on a case-by-case basis, illustrating the need for manufacturers to regularly intervene on such matters before the PUCO. A summary of the order was prepared by OMA Counsel Tom O'Brien of Bricker & Eckler, L.L.P.
The order requires each utility file their proposed excessive earnings applications by July 15. The OMA will intervene and monitor these developments at the PUCO on behalf of our members.
PUCO Processing Backlog of Energy Efficiency Cases - June 24, 2010
The PUCO approved more than 200 applications by mercantile customers this week allowing them to opt- out of paying their utility's energy efficiency rider in exchange for committing their energy efficiency project savings to the utility. This option is commonly called the self-direct" option and can be for new projects or projects as old as three years.
The OMA put in significant work behind the scenes with PUCO staff and the Governor's office to break the log-jam. If you have undertaken a project at your facility that resulted in energy efficiency, contact Kevin Schmidt at the OMA to find out how you may be able to receive financial benefits from your utility.
OMA Lays Out Energy Policy Gains and Gaps for Lawmakers and Manufacturing Leaders - June 18, 2010
In light of the importance of competitively-priced, abundant energy to Ohio's competitiveness, the OMA's Energy Policy Committee thought it was important to review our state's energy policy. To this end, OMA has just published a new volume of ReTooling Ohio to document Ohio's energy policy gains and gaps from the manufacturers' perspective.
ReTooling Ohio attempts to address the most critical policy issues, provide relevant context, preserve institutional knowledge and offer thoughtful concepts for change. It always reflects the thinking of subject matter experts and has been developed by the broad-range of manufacturing leaders who serve on the OMA's public policy committees.
Legislature Wraps Up Session, Passes CoGen Fix - June 04, 2010
In a marathon meeting that stretched into the early hours of this morning, the Ohio General Assembly finished its work on a number of pressing pieces of legislation. Notably among those bills for manufacturers is SB 232, which grants favorable tax treatment to future advanced and renewable energy facilities.
The OMA worked hard to ensure the bill looked beyond just wind and solar power and included cogeneration facilities. The OMA-supported amendment exempts manufacturers' co-generated power from punitive utility property taxes, regardless of whether the power is used on-site or sold into the grid.
Governor Strickland announces plans for off-shore wind farm in Lake Erie - May 28, 2010
At the American Wind Energy Association's annual trade show in Dallas, Texas, Governor Ted Strickland announced plans for the placement of five wind turbines in Lake Erie by 2012. This experimental project features a unique partnership between the Lake Erie Energy Development Corp. (LEEDCo), a non-profit company in Cleveland, and General Electric, and would result in the first operating off-shore wind farm in the United States.
Read more in this blog posting from OMA counsel Bricker & Eckler.
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Learn about the Costs/Opportunities of AEP's Energy Efficiency Programs - May 28, 2010
On May 13th the PUCO approved AEP's energy efficiency and peak demand reduction plan. If you are an AEP customer, you will see a new charge on your bill to pay for this.
To learn what this charge will be and what the programs mean to you, check out OMA Energy Counsel Tom O'Brien's memo in OMA Groups. Tom's memo can be found in the Energy Efficiency Group and details the specific rider charge for the various industrial tariffs and what the opportunities mean to you.
Log into OMA Groups to read Tom's memo and start a conversation. 34 of 64
Energy Legislation assistance to small businesses. Prepared by: The Ohio Manufacturers' Current 3/2/2010 - Senate State and Association Status: Local Government and
Report created on September 20, 2010 Veterans Affairs, (First Hearing) HB87 OHIO ENERGY RESOURCE CENTER Comments: None (PHILLIPS, D) To create the Ohio Energy Resource Center at Ohio University's HB301 ADVANCED ENERGY FUND (FOLEY, M) To Voinovich School and to make an replace the current Advanced Energy Fund appropriation. revenue rider on retail electric distribution Current 3/16/2010 - Senate Energy and service rates with a new rider that will Status: Public Utilities, (Second terminate on January 1, 2025 and permit Hearing) aerospace institutes to receive Advanced Comments: None Energy Fund money for advanced energy projects and economic development. HB110 NATURAL GAS & OIL PERMITS (ADAMS, Current 1/19/2010 - House Alternative
J) Toauthorize the Director of Natural Status: Energy, (Fourth Hearing) Resources to issues permits and make leases Comments: None to take and remove natural gas and oil from under the bed of Lake Erie. HB426 OIL AND GAS LAW (SKINDELL, M) To Current 5/13/2009 - House Agriculture revise the Oil and Gas Law. Status: and Natural Resources, (First Current 2/2/2010 - Referred to Hearing) Status: Committee House Agriculture Comments: None and Natural Resources Comments: None HB113 SCHOOL ENERGY MEASURES (FOLEY, M) To authorize school boards, for on-site HB437 TAX CREDIT FOR BUSINESS-INCREASED renewable energy generation measures and PAYROLL (BAKER, N) To authorize a in the same manner as for energy nonrefundable tax credit for a business that conservation measures, to enter into increases payroll and expands into a vacant installment contracts subject to specified facility. terms of payment, to provide that energy Current 3/3/2010 - House Ways and conservation installment contracts are subject to those same terms, and to require that at Status: Means, (First Hearing) least twenty-five per cent of the schools in the Comments: None state's school districts have a long term supply of solar-sourced electricity. HB439 TAX EXEMPTION-RENEWABLE ENERGY Current 2/2/2010 - Senate Energy and (PHILLIPS, D) To exempt from property
Status: Public Utilities, (First Hearing) taxation the cost of energy-conservation or Comments: None renewable energy improvements to business property and to authorize an additional income tax deduction for the costs of such HB218 PUBLIC UTILITY TANGIBLE TAX improvements if the property is sold for a gain. VALUATION (WINBURN, R) To modify the Current 5/11/2010 - House Alternative tax valuation of public utility tangible personal property used to generate electricity from Status: Energy, (First Hearing) renewable resources. Comments: None Current 6/24/2009 - BILL AMENDED, Status: House Ways and Means, HB443 ENERGY EFFICIENCY (GERBERRY, R) To (Second Hearing) create the Energy Efficiency Stakeholder Comments: None Advisory Group to review energy efficiency and peak demand reduction programs and related matters and to require the group to HB230 COMMON SENSE REGULATION ACT make a recommendation regarding its (MORAN, M) To enact the Common Sense continuation to the General Assembly by Regulation Act to improve state agency December 31, 2024. regulatory processes, especially as they relate to small businesses, to require state Current 2/17/2010 - Referred to departments to develop customer service Status: Committee House Public training programs, and to require the Utilities director of environmental protection to provide Comments: None environmental regulatory compliance 35 of 64
HB464 WIND/SOLAR ENERGY FACILITIES Status: Committee House Environment (WINBURN, R) To exempt qualifying wind and and Brownfield Development solar energy facilities from property taxation Comments: None for up to 20 years and to require payments in lieu of taxes on the basis of each megawatt of HJR1 COMPENSATION FOR VETERANS production capacity of such facilities. (PRYOR, R) To provide compensation to Current 6/3/2010 - House Ways and veterans of the Persian Gulf, Afghanistan, and Status: Means, (Eighth Hearing) Iraq conflicts. Comments: None Current 2/19/2009 - House Veterans
Status: Affairs, (First Hearing) HB469 HOME ENERGY TAX CREDIT (PHILLIPS, Comments: None D) To allow a nonrefundable tax credit against the personal income tax for home energy SB232 RENEWABLE ENERGY FACILITIES audits. (WIDENER, C) To exempt from taxation Current 5/11/2010 - House Alternative renewable energy facilities that are not Status: Energy, (First Hearing) financed through the Ohio Air Quality Comments: None Development Authority and require a payment in lieu of taxes on the basis of each megawatt HB474 RENEWABLE ENERGY FACILITIES (HITE, of production capacity in such facilities. C) To exempt from property taxation Current 6/17/2010 - SIGNED BY
renewable energy facilities that are not Status: GOVERNOR, eff. immediately financed through the Ohio Air Quality Comments: None Development Authority and to require a payment in lieu of taxes on the basis of each SB236 ALL-ELECTRIC HOME DISCOUNTS megawatt of production capacity of such (GRENDELL, T) To restore discounts for facilities. customers with all-electric homes, to restore Current 4/13/2010 - Referred to electric, load-management programs, and to Status: Committee House Alternative declare an emergency. Energy Current 5/18/2010 - Senate Energy and Comments: None Status: Public Utilities, (Second Hearing) HB551 SURPLUS ELECTRICITY (SNITCHLER, Comments: None T) To require a municipal utility supplying surplus electricity to nonresidents to provide SB241 OIL AND GAS DEVELOPMENT (FABER, written notice of termination one year before K) To grant the Department of Natural terminating the service. Resources exclusive authority to enter into Current 6/15/2010 - Introduced leases for oil and gas development on state Status: land. Comments: None Current 5/19/2010 - Senate Status: Environment and Natural HCR28 URANIUM ENRICHMENT (DANIELS, D) To Resources, (Second Hearing) urge the President of the United States to Comments: None direct the United States Department of Energy to ensure the continuation SCR27 GREENHOUSE GASES (GIBBS, B) To urge of the uranium enrichment work being the Congress of the United States to adopt developed by the USEC, Inc., at its Piketon, legislation invalidating regulations of the Ohio plant by granting USEC's application for United States Environmental Protection a federal loan guarantee. Agency related to greenhouse gases. Current 11/17/2009 - House Alternative Current 6/3/2010 - ADOPTED BY
Status: Energy, (First Hearing) Status: SENATE, Vote 21-11 Comments: Non e Comments: None
HCR36 GREENHOUSE GAS REGULATIONS
(MARTIN, J) To urge the Congress of the United States to pass Senate Joint Resolution 26, which proposes to invalidate regulations of the United States Environmental Protection Agency related to greenhouse gases. Current 5/11/2010 - Referred to 36 of 64
MEMORANDUM
TO: Kevin Schmidt, FirstEnergy Leadership Group
FROM: Tom O’Brien and Matt Warnock
DATE: September 15, 2010
RE: Summary of the Public Utilities Commission of Ohio’s Entry adopting a “Pilot Program” in Case No. 10-834-EL-EEC
BACKGROUND
For nearly a year and a half, Ohio’s electric distribution utilities (EDUs) have been building “portfolios” of mercantile-based energy efficiency programs. To date, the PUCO has approved only a relatively small number of the mercantile-based applications that have been filed by the EDUs. A significant backlog of applications remains pending at the PUCO which is likely causing difficulties for the EDUs efforts to comply with the energy efficiency benchmarks imposed by Senate Bill (“SB”) 221.
A key component of the energy efficiency benchmarks in SB 221 was a provision allowing mercantile customers to “opt-out” of the responsibility for paying the EDUs’ costs of compliance with those energy efficiency benchmarks—costs recovered through an energy efficiency rider. The lone requirement was that the mercantile customer commit their demand- response or other customer-sited capabilities for integration into the EDU’s demand-response, energy efficiency, or peak demand reduction programs.
SUMMARY OF THE PILOT PROGRAM
On September 15, 2010, the Commission issued an Entry establishing an 18-month pilot program for applications filed by mercantile customers seeking to commit their energy efficiency and peak demand measures to the EDU’s programs. Designed to simplify the application process, the Commission committed to: 1) develop a “standard application template for use by mercantile customers; 2) expedite the approval process through the implementation of an automatic approval process; and 3) simplifying the incentives available to mercantile customers.
1. The Standard Application Template
Having previously directed the Commission Staff to develop a standardized application form, the Commission committed to posting the completed template and corresponding filing instructions on its website. The standardized application form will be used for all EDUs and all EDU service territories.
4012328v1 Bricker & Eckler 37 of 64 ATTORNEYS AT LAW
Summary of PUCO Entry, Case No. 10-834-EL-EEC September 15, 2010 Page 2
In addition, the Commission emphasized that all mercantile customer applications filed before September 15, 2010 should be refiled if the applicant wants to be considered for the automatic approval process. Mercantile customers that do not withdraw their pending application and refile will remain in the queue, but there was no guarantee of expedited approval.
2. The Automatic Approval Process
The automatic approval process only applies to a mercantile customer who agrees to take a cash incentive rather than an exemption from the applicable EDU’s energy efficiency rider. The significance of this requirement was emphasized by the Commission’s subsequent statement that all EDUs not currently offering a cash rebate “review whether a cash rebate option would assist the electric utility in meeting its statutory benchmarks.” From a procedural standpoint, the automatic approval process will function much like the analogous process for facilities seeking Commission-certification as a renewable energy generating facility. Once an mercantile customer application is filed, it will be approved on the 61st day after filing unless the automatic approval process is suspended or the application denied.
3. Simplified Incentives
While attempting to simplify the incentives available to mercantile customers, the Commission drew a distinction between mercantile customer programs that can be counted toward an EDU’s benchmarks, and those eligible for incentives. First, the Commission noted that incentives are only available for projects that involved a monetary investment by the customer programs, not projects resulting solely from behavioral changes (presumably, monetary investments causing behavior changes would count). Both types of projects, however, remain available to the utilities for benchmarking purposes.
Second, the Commission concluded that incentives will only be available upon the mercantile customer’s demonstration that “it has installed more efficient equipment than was otherwise available.” As a result, the replacement of failed equipment will not be available for an incentive, but could still be counted for benchmarking purposes. How or why a customer would make a commitment in the absence of an incentive is not clear. NOTE: The Commission also added that the incentive calculation for all equipment replacements will be based on the “as found” method, which calculates the energy baseline as the “efficiency rating of the existing equipment at the time of replacement.”
Finally, the Commission reversed course and allowed incentives for projects having a payback of less than one year. The sole caveat is that the incentive be less than 50 percent of the total project cost.
4. The “Baseline Comparison” Method
4012328v1 Bricker & Eckler 38 of 64 ATTORNEYS AT LAW
Summary of PUCO Entry, Case No. 10-834-EL-EEC September 15, 2010 Page 3
The most reasonable interpretation of R.C. 4928.66(C), and the view commonly held by industry participants, would exempt mercantile customer projects from the applicable rider for the benchmark period corresponding to the percentage reduction in energy usage produced by the mercantile project—a method known as the “baseline comparison method.” This is reasonable because the value of the opt-out to the customer should be the avoided cost of the rider; which, if set correctly, will never exceed the cost of the additional generation supply avoided by the efficiency measures implemented by the mercantile customer receiving the exemption. The baseline comparison method for determining the incentive should equalize the value of the incentive with the value of the avoided cost.
However, the Commission previously rejected the “baseline comparison” method for mercantile customer opt-out applications in its October 15, 2009 Opinion and Order in Case No. 09-512-EL-UNC. The effect of the Commission’s determination was to put the EDU programs in limbo because the Commission did not propose a clear alternative method for determining an appropriate basis for a mercantile project exemption.
As part of this pilot program, however, the Commission reversed course and authorized the use of the baseline comparison method. The Commission further explained that the use of this method included the “payment of standard incentive in the form of a fee per kWh of net savings or per kW of peak demand reduction.” This should add a degree of clarity to an otherwise untenable situation.
5. Expansion of the Administrator Concept
Currently, FirstEnergy is the only EDU utilizing energy efficiency administrators to efficiently and effectively spread the benefits of mercantile customer programs to its customers. As part of the Commission’s pilot program, the Commission recognized the value and importance of such administrator programs, and required “all electric utilities to review potential commitment payment programs [i.e. third-party administrator arrangements] and file an application based upon its review within 60 days.”
CONCLUSION
While unanswered questions remain as to how the EDUs will implement today’s directions from the Commission, the value of this guidance is a vast improvement from the regulatory limbo caused by the Commission’s prior pronouncements on the approval of energy efficiency programs and projects for mercantile customers.
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To: OMA Environment Committee From: Kevin Schmidt, OMA Staff Re: Environment Update Date: 9/22/2010
1. Ozone National Ambient Air Quality Standard (NAAQS)
The Obama administration has put out notice that it intends to revise the ground-level ozone NAAQS that was set in 2008 by the Bush administration. The proposed standard, between 60 and 70 ppb, would put virtually every county in Ohio out of attainment for ozone. The OMA will be sending a letter to Ohio’s congressional delegation this week regarding this proposal noting its punitive effect on Ohio. A recent study released by the National Association of Manufacturers shows that the total costs of attainment for a 60 ppb standard (attainment costs + reduction in state GDP) could be as much as $69 billion.
2. Boiler MACT Rule
US EPA is working on a new boiler MACT rule that would be incredibly costly for Ohio. In response to industry concern, Governor Strickland issued a letter to US EPA asking them to take a second look at the rule and consider more closely the economic effects of the rule. US EPA sent Governor Strickland a short letter in response nothing that they will take economic considerations under advisement, but that they must fulfill their duty under the statute. The OMA sent a letter to US Senator Sherrod Brown this week noting industry concerns and asking him to review the rule.
3. US EPA’s / Ohio EPA GHG Actions
US EPA issued its proposed tailoring rule earlier this year. More recently, Ohio EPA released a draft rule that would incorporate much of these regulations into Ohio’s air permitting system. The OMA, along with much of the business community, issued a letter to Ohio EPA asking them to slow down on the implementation of this rule noting that Ohio EPA had sent a letter to US EPA on its rule asking for them to slow down. The key issues remain unresolved; most notably, how should a manufacturer comply with carbon regulations when there are no clear guidelines for carbon controls.
The OMA has requested that Ohio EPA host a stakeholder meeting on this issue. This meeting has not been scheduled.
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Environmental News & Analysis
OMA Comments on Ohio’s GHG Rules - September 10, 2010
The OMA sent comments to Ohio EPA this week regarding the agency’s plans to implement U.S. EPA’s Greenhouse Gas (GHG) rules which will bring GHG regulations into your facilities' air permits. The OMA reported on Ohio EPA’s plans earlier this year noting that these actions are the result of U.S. EPA’s move towards GHG regulation in the absence of Congressional action. In its comments, the OMA asked Ohio EPA to remain firm in the agency’s and Governor Strickland’s earlier position: that congressional action, not hasty and illegal regulation, is the only legitimate path to address GHGs.
Five Steps to Protect Your Business from Being Liable for Your Supplier's or Distributor's Environmental Contamination - August 11, 2010
We're often asked how can a business limit its liability exposure for the cost to clean up environmental contamination when entering into supplier/distributor agreements where it's possible, maybe even likely, that some environmental contamination will result from the supplierís manufacturing or distributorís handling of the product? From OMA Connections Partner, Taft Stettinius & Hollister LLP
Ohio EPA Unveils Rule that Will Bring Carbon Regulations to Your Facility - August 06, 2010
Ohio EPA will be accepting comments on a proposed state rule that is required by the federal "tailoring rule" promulgated by U.S. EPA. This marks the beginning of formal greenhouse gas (GHG) regulations for stationary sources. Read this press release for more information.
Separately, the OMA joined a coalition of business interests formally challenging U.S. EPA's unilateral regulation of GHG's. That process was dealt a predictable blow when U.S. EPA refused to reconsider its decision to move ahead with GHG regulations.
U.S. EPA Continues Push on Environmental "Justice" - August 02, 2010
U.S. EPA recently released a guidance document on "environmental justice," a policy in which manufacturers would be required to implement environmental controls based on non-scientific data.
The OMA reported back in May of this year that environmental justice is a priority of Lisa Jackson, U.S. EPA Administrator. U.S. EPA reports that the policy goal is to "advance environmental justice for low- income, minority and indigenous communities and tribal governments who have been historically underrepresented in the regulatory decision-making process."
The OMA supports scientifically-based environmental regulations. Regulations that are based on politics lessen America's competitiveness.
OMA Educates Leaders on Ups and Downs of Environmental Regulation Requirements - July 01, 2010
The OMA is taking the opportunity to communicate to current and future leaders on the state of environmental regulation. Significant challenges need to be resolved to improve Ohio's competitiveness. In the just published new volume of ReTooling Ohio, the OMA documents Ohio's environmental regulation gains and gaps from the manufacturers' perspective.
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ReTooling Ohio attempts to address the most critical policy issues, provide relevant context, preserve institutional knowledge and offer thoughtful concepts for change. It always reflects the thinking of subject matter experts and has been developed by the broad-range of manufacturing leaders who serve on the OMA's public policy committees.
2009's 'Great Recession' Slashed Carbon Market in Half - June 22, 2010
OMA Connection Partner, RMT, a firm in the business of renewable energy development, facility siting and development, energy efficiency strategy and solutions, combustion optimization, air/water/waste services, remediation, EHS management, sustainability, and carbon management, reported this week that the economic recession had a marked impact on the part of the market primarily concerned with buying credits to offset emissions of companies and individuals.
It said: The value of the voluntary carbon market shrunk 47 percent to $387 million in 2009, as the recession shrank the amount of offsets purchased for corporate social responsibility purposes. Transactions for the year equaled 94 million tons of CO2 emissions reductions, a 26 percent decline from 2008, despite growth in emissions reductions bought for pre-compliance purposes, according to the State of the Voluntary Carbon Market Report 2010.
Taft/ Environmental Law Insight: Global Warming Lawsuit Thrown Out by Federal Court of Appeals - June 14, 2010
In a surprising turn of events, the Fifth Circuit has dismissed the plaintiffs' appeal in Comer v. Murphy Oil based on a procedural technicality, holding that the court lacked a quorum to hear the appeal. Comer v. Murphy Oil, --- F.3d ---, 2010 WL 2136658 (5th Cir., May 28, 2010). From OMA Connections Partner, Taft Stettinius & Hollister LLP
OMA Protecting Common-Sense Rules in 6th Circuit - June 10, 2010
The OMA was granted "intervenor" status this week in the Natural Resources Defense Council's (NRDC) challenge of Ohio's New Source Review Rules (NSR). Ohio's NSR rules were recently approved by U.S. EPA and include such common-sense ideas as a Plant - wide Applicability Limit that looks at a plant's overall emissions, rather than each individual emission source within the plant.
The NRDC's argument is that any revision or update of outdated rules is a violation of the federal Clean Air Act's anti - backsliding provisions. Rather, the NRDC argues, if a state wants to propose a new regulatory scheme, it must do so by layering it on the existing scheme. The OMA intervened to protect manufacturing's interest in manageable, common sense regulations.
Climate Change Regulation Via The Clean Air Act: EPA's New Greenhouse Gas Rule For Facilities - June 07, 2010
On May 13, 2010, U.S. EPA issued a 515-page rulemaking under the Clean Air Act that will, for the first time, require companies to incorporate the "best available control technology" to address emissions of carbon dioxide and other greenhouse gases from some new and modified facilities. Read more. From OMA Connections Partner, Jones Day.
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Ohio Senate Adopts Greenhouse Gas Resolution - June 04, 2010
Senate Concurrent Resolution 27, urging Congress to invalidate U.S. EPA regulations pertaining to Greenhouse Gas, passed the Ohio Senate this week. Resolutions are the tool that the Generally Assembly uses to formally communicate positions to Congress.
The OMA, along with nearly the entire business community, provided proponent testimony on the measure, noting that the issue of global warming should not be addressed through the Clean Air Act (CAA) under which U.S. EPA's recent regulations were promulgated. The CAA was designed to address local air emission problems and is an ill-suited tool for pervasive emissions such as carbon dioxide.
End-of-Life Recycling Mandate Affects Manufacturers' Liability - June 03, 2010
A bill pending in the Ohio House would require certain product manufacturers to operate a product "take- back" recycling program. The bill requires Ohio EPA to register and police these manufacturer-run programs for a fee.
Proponents have been pushing for a vote prior to the summer recess. As drafted, the bill applies to just a few products (computers, televisions and printers), but would allow the camel's nose under the tent. The OMA went on record this week to communicate concerns over the precedent the bill could set for other products.
Ohio Weighs in on Private Global Warming Lawsuits - May 28, 2010
Ohio Attorney General Richard Cordray brought Ohio into an amicus brief in the 5th Circuit in a case in which private citizens are suing industry under the Clean Air Act for harms allegedly caused by global warming. The brief notes that the U.S. Supreme Court has recently granted states, not private citizens, the right to sue under the Clean Air Act for this purpose. The brief states that granting this right to private citizens will flood the federal courts with complaints that ordinarily would lack standing.
With this brief, Attorney General Cordray has taken a strong stand in protecting jobs by protecting employers from frivolous lawsuits based on global warming claims.
OMA and Ohio EPA Intervene in Environmentalist Challenge - May 28, 2010
The OMA has previously reported that the National Resources Defense Council is challenging Ohio's New Source Review rules meant to improve regulatory flexibility by looking at plant-wide emissions, rather than individual sources (among other benefits).
This week, the OMA and other trade organization filed a motion to intervene in this case in order to protect these common sense, business-friendly rules. Additionally, Ohio EPA filed a motion to intervene so it has standing to protect its rules. Ohio EPA's move is a welcome development aimed at defending Ohio's economy against activist legal challenges.
NRDC Appeals Favorable Permit Rules - May 21, 2010
The Natural Resources Defense Council (NRDC) has appealed Ohio's New Source Review rules (NSR) recently approved by U.S. EPA that provide significant improvements in permit flexibility. The NRDC filed nearly the same action in Wisconsin a year ago in its relentless effort to challenge regulatory improvements at every step.
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The NRDC is arguing that the new NSR rules violate the Clean Air Act's various "backsliding" provisions meant to disallow environmental degradation. The practical result of the NRDC's challenge, if successful, would limit Ohio from ever revising state rules to remove outdated or ineffective regulations. Contact Kevin Schmidt Challenge at the OMA to learn what you can do.
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Environment Legislation Status: Committee House Finance and Prepared by: The Ohio Manufacturers' Appropriations Association Comments: None Report created on September 20, 2010
HB569 REMEDIATION OF CONTAMINATED SITE HB1 BIENNIAL BUDGET (SYKES, V) To make (SEARS, B) To authorize refundable tax appropriations for the biennium beginning credits through 2015 for the completion of a July 1, 2009, and ending June 30, 2011 for voluntary action to remediate a contaminated the operation of state programs. site and for the return of such sites to Current 7/17/2009 - SIGNED BY productive use, and to exempt persons Status: GOVERNOR, eff. 7/17/09 through 2015 who have been issued appropriations; other sections covenants not to sue under the Voluntary subject to referendum Action Program from certain fees and 10/16/09 penalties for one year after the issuance of Comments: Various fee changes that bear such a covenant. watching. Overall, budget Current increases resources dedicated 8/23/2010 - Introduced Status: to manufacturing needs Comments: None without directly raising fees on
manufacturers. HB583 ANHYDROUS AMMONIA STORAGE
FACILITIES (BATCHELDER, W) To establish HB230 COMMON SENSE REGULATION ACT requirements governing the design and (MORAN, M) To enact the Common Sense construction of anhydrous ammonia storage Regulation Act to improve state agency facilities. regulatory processes, especially as they relate Current to small businesses, to require state 9/16/2010 - Introduced Status: departments to develop customer service training programs, and to require the Comments: None director of environmental protection to provide environmental regulatory compliance HCR25 CAP AND TRADE LEGISLATION (JORDAN, assistance to small businesses. K) To urge the Congress of the United States Current 3/2/2010 - Senate State and to refuse to enact cap and trade legislation Status: Local Government and that would negatively impact Americans by
Veterans Affairs, (First increasing the costs of goods and services Hearing) and instead enact legislation that encourages Comments: None states to establish and develop their own renewable energy portfolio
standards. HB301 ADVANCED ENERGY FUND (FOLEY, M) To Current 6/17/2009 - Referred to replace the current Advanced Energy Fund Status: Committee House Public revenue rider on retail electric distribution Utilities service rates with a new rider that will terminate on January 1, 2025 and permit Comments: None aerospace institutes to receive Advanced Energy Fund money for advanced energy HCR36 GREENHOUSE GAS REGULATIONS projects and economic development. (MARTIN, J) To urge the Congress of the Current 1/19/2010 - House Alternative United States to pass Senate Joint Resolution
Status: Energy, (Fourth Hearing) 26, which proposes to invalidate regulations Comments: None of the United States Environmental Protection Agency related to greenhouse gases.
Current 5/11/2010 - Referred to HB324 ENVIRONMENTAL REVIEW APPEALS Status: Committee House COMMISSION (YATES, T) To eliminate the Environment and Brownfield schedule in accordance with which the Development Environmental Review Appeals Commission must issue written orders concerning certain Comments: None actions that were filed with the Commission and to make an appropriation. HJR1 COMPENSATION FOR VETERANS (PRYOR, Current 10/27/2009 - Referred to R) To provide compensation to veterans of 45 of 64
the Persian Gulf, Afghanistan, and Iraq and Labor conflicts. Comments: None Current 2/19/2009 - House Veterans
Status: Affairs, (First Hearing) SCR27 GREENHOUSE GASES (GIBBS, B) To urge Comments: None the Congress of the United States to adopt legislation invalidating regulations of the SB3 SMALL BUSINESS EMPOWERMENT ACT United States Environmental Protection (FABER, K) To require a rule-making agency Agency related to greenhouse gases. to prepare a cost-benefit report for, and Current 6/3/2010 - ADOPTED BY
regulatory flexibility analysis of, rules that Status: SENATE, Vote 21-11 may have any adverse impact on small Comments: None businesses, to create the Small Business Regulatory Review Board. Current 5/19/2010 - Consideration of Status: House Amendments, House insists on amendments; requests Committee of Conference Comments: None
SB4 PERFORMANCE AUDITS FOR REGULATORY AGENCIES (SCHAFFER, T) To require the Auditor of State to conduct performance audits of the Bureau of Workers' Compensation, Environmental Protection Agency, Department of Natural Resources, Department of Agriculture, and Department of Health, and to require the Auditor of State to develop a schedule to provide for periodic performance audits of all state agencies. Current 2/2/2010 - Referred to Status: Committee House Finance and Appropriations Comments: None
SB18 ENVIRONMENTAL LAWS (GIBBS, B) To require the proceeds of fines paid by certain political subdivisions under environmental laws to be expended by the state in the county that incurred the fine and require the proceeds of the fines to be deposited in the General Revenue Fund. Current 3/3/2009 - Senate Finance Status: and Financial Institutions, (Second Hearing) Comments: None
SCR15 AMERICAN JOBS (WIDENER, C) To urge the Congress of the United States to refuse to enact cap and trade legislation that would negatively impact Americans though the elimination of jobs and by increasing the costs of goods and services and instead enact legislation that encourages states to establish and develop their own renewable energy. Current 7/1/2009 - Referred to
Status: Committee House Commerce 46 of 64 47 of 64 48 of 64 49 of 64 50 of 64 51 of 64
PUBLIC POLICY REPORT – Tax Policy
TO: OMA Government Affairs Committee FROM: Ryan Augsburger, OMA Staff DATE: September 22, 2010 SUBJ: TAX POLICY HIGHLIGHTS
Overview Revenue collection continues to track estimates, occasionally outpacing estimates. Further corrections do not appear to be needed at this time. More serious budget questions are looming and will need to be dealt with beginning early 2011 when work on the two-year state budget must commence.
2010 is a gubernatorial election year and that outcome will impact the direction of state tax policy over the next five years or more. Don’t lose sight of the fact that Ohio like other states will be facing large debts for unemployment that will need to be paid down.
Lastly, Ohio voters approved the renewal of Ohio’s “Third Frontier” economic development program in the Spring.
Should We Expect Tax Increases? No one knows whether state revenue collection will meet, exceed, of fall short of projections over the biennium. If revenue falls short, then lawmakers will need to revisit the budget again in a corrections bill which could increase taxes or make draconian cuts. So far revenue is behind projections by about $200 million. The Administration has signaled the shortfall is manageable without legislative revision.
All bets are off in the next biennial budget. Everything will need to be on the table as the state faces a structural deficit as high as $8 billion. Groups that depend on state revenue are likely to continue advocating for tax hikes. Taxpayer groups like the OMA are advocating for less costly and more efficient government services.
During the budget deliberations last year, social services advocates were buoyed by several newspaper editorials favoring tax increases before service cuts. Most tax hike talk has been focused on income tax and sales tax but some have eyed the Commercial Activity Tax paid exclusively by business. The OMA will continue to oppose tax hikes that deter manufacturing competitiveness.
While the struggle to correct Ohio’s budget imbalance was anything but calm, Governor Strickland and legislative leaders deserve credit for halting serious consideration of tax increases. A group of House Democrats broke with their leadership and were actively working in support of tax hikes, illustrating many lawmakers preference to raise taxes before making more painful cuts in services.
Attacks on Tax Reform The tax reform package has been under attack by other business taxpayers, as well as social groups or spenders. Most frequently targeted is the Commercial Activity Tax (CAT). The OMA has been a steadfast opponent of any legislation or other action that would undermine the broad-base, low-rate principles of the CAT which allowed for the elimination of tangible personal property tax, corporate franchise tax, reduction of personal income tax, and reduced state 52 of 64 revenue collection. Manufacturers are encouraged to talk up the attributes of Ohio’s tax reforms frequently.
Renewable Energy Just before the summer legislative recess, wind and solar farm developers successfully advocated to carve wind and solar farms from the tangible personal property tax (TPP). Investment on the generation of electricity (regardless of the fuel source) remains one of a few classifications still subjected to TPP. Renewable energy developers contended the rate is uncompetitive with other states. The legislation provides exemption from TPP but subjects them to CAT. The OMA has offered some support for the measure, but called on lawmakers to ensure such incentives are designed reasonably in reference to the relatively high cost of renewable energy. Additionally the OMA won support for inclusion of an amendment to free co- generation (from waste heat or steam) from the TPP.
Unemployment Compensation Like many states, Ohio’s fund to pay unemployment compensation claims was depleted early last year and the state has had to borrow federal funds that will need to be paid back. State law expansions of coverage were included in HB 1 and HB 2. The OMA has been focused against permanent expansions when only temporary federal relief is available. Eventually Ohio employers will be made to repay the federal loans and restore the state fund – look for a premium increase in time. States are required to begin paying interest by September 2011.
Third Frontier Voters approved renewal and expansion of the Third Frontier by wide margin in May. Third Frontier is a targeted economic development program financed with state debt. $750M was approved by voters after lawmakers haggled about the amount. Manufacturing has been a target for much of the investment. Now that the measure has been approved for another five years, manufacturers may want to learn about eligibility by working with economic development representatives.
Campaigns and Elections Tax Competitiveness has emerged as a favorite topic in the gubernatorial campaigns of Democrat incumbent Ted Strickland who is squaring off against Republican challenger John Kasich, a former Congressman. Governor Strickland has trumpeted his defense of and support for the tax reform package originally enacted by Republican lawmakers. While not commenting specifically on the tax reform package, the Kasich campaign contends Ohio’s tax code is punitive to business and driving business to other states. The Kasich campaign is calling for an end of personal income tax and the state estate tax. Similar messages are evident in races for state General Assembly.
Estate Tax Repeal A group calling themselves Citizens to End Ohio’s Death Tax has emerged to advance and lead a ballot repeal of the state estate tax in 2011. Past repeal efforts undertaken by the General Assembly have been unsuccessful due to fierce opposition from local governments (that benefit from the estate tax). The OMA Board of Directors is supportive of repeal.
Legislation Following voter approval of casino gambling in Ohio (November 2009), the General Assembly acted in the Spring to enact “implementing legislation.” Among the mostly focused legislation to create regulatory safeguards, an amendment was included to allow taxpayers to deduct gambling losses. 53 of 64
The Department is used House Bill 75 to make a few minor customer service revisions to the CAT.
Look for a capital bill to authorize public works later this year or early in 2011.
Outlook It is critical to begin to shape policymakers opinions about the willingness to reconsider the role of government and the need to inject real innovation into government services including local government. It is critical to extol the improvements to the tax code made over the past six years. Use Retooling Ohio to help inform candidates for office. 54 of 64
Tax News and Analysis
Unemployment Insurance Fund in Arrears $2 Billion – Employers to Pay? - September 07, 2010
For nearly a decade, Ohio’s unemployment compensation program has been taking in less premium than the fund has been paying out in benefits. This week the state official in charge of the program described the effect of inaction – the state fund is depleted and in the hole $2 billion and debt is expected to grow to $3 billion by the end of the 2010.
Many states have had to borrow from the federal program beginning in 2009, but in addition to the repayment of federal funds, is the need to replenish and shore up the state program so that it is sustainable. The OMA Tax Policy Committee will discuss the growing unemployment comp issue in detail at its May 13 meeting.
This week in Washington, Congress rushed through a short term extension of the UI related provisions of the American Recovery and Reinvestment Act, providing yet another short term extention. Here is the text of the bill. See cost estimates here. The Senate may act on the measure today.
Tax Collectors Rank Ohio’s Tax Burden - September 07, 2010
The Federation of Tax Administrators (FTA) released a report that ranks state tax burdens. The study uses recent data and factors Ohio’s sweeping tax reforms, enacted in 2005. According to the FTA analysis, Ohio’s state tax burden during fiscal year 2009 was 35th highest on a per capita basis. In other words, only 15 other states collected less in taxes per person than Ohio did last year. The study rated Ohio’s tax burden as 33rd highest when measured as a percentage of Ohioans’ personal income. By this measure, only 17 other states collected a lower percentage of taxes than Ohio. Click to learn more.
State Budget Panel - Lots of Talk, Little Signs of Action - July 16, 2010
Even though the formal state budget process does not begin until January, a legislative panel is trying to get a head start, given an estimated $8 billion forecasted revenue gap. At the committee's second meeting on July 7, the state budget director reminded lawmakers that 85% of the state budget is passed through to local government entities.
In her presentation, budget director Pari Sabety, said "We really need to focus on the fact that significant budget savings can only come from reform in major state-local systems." Those include: Medicaid and human services; rehabilitation and corrections; education; and local government services.
Despite the dire predictions, the state budget office yesterday began instructing state agencies to develop two different budget plans (one at 100% current funding level and one at 90% of current funding levels) for the 2012-2013 budget recommendations due later this year.
Separately, and compounding the budgeting difficulties, earlier in the week the state board of education called for an increase of nearly $1 billion for the next budget for primary and secondary education.
Also recently, the Columbus-based conservative think-tank, the Buckeye Institute, released a study on the level of compensation of public employees. The study looks at government and teacher wages, benefits, and retirement and quantifies total compensation levels compared with the private sector. The study offers solutions for paring back.
The study pegs average public employee total compensation at more than $66,000 or $17,000 more than a private sector counter-part. The liberal leaning think tank, Policy Matters Ohio, offered a contrasting 55 of 64 perspective that argues the compensation disparity is due generally to a higher level of education by public employees.
Legislators Consider State Budget Imbalance - July 01, 2010
Six state legislators on the Budget Planning and Management Commission began an initial meeting this week calling for bi-partisanship, but differing perspectives on the severity of Ohio's structural budget deficit quickly became apparent.
Republicans consider the variance to be over $8 billion while Democrats consider the gap to be about $5 billion. "It's an important disparity because it is the bogey that lawmakers will need to hit with either tax increases or service cuts for the next state budget that will fund government and public programs from July 2011 until June 2012," said OMA's Ryan Augsburger. Adjustments to business taxes and fees could be recommended by the panel.
A presentation by the non-partisan Legislative Service Commission this week apprised commission members of the most recent revenue and spending trends. The Commission will meet again on July 7 and hear a presentation from the state department of budget and management.
Think Tank Calls for Ohio Tax Hikes and Service Cuts - June 25, 2010
One thing campaigning politicians are not talking about is how to solve Ohio's looming state government budget deficit. The two-year budget to fund fiscal years 2012 and 2013 is forecast to be short by $8 billion, meaning 20% cuts would be needed in public expenditures to avoid adding new tax revenue.
The Cleveland-based Center for Community Solutions yesterday unveiled a proposal to address the structural deficit. The executive summary describes the need for an approach that makes cuts and increases revenue. The report urges lawmakers to begin by revisiting the 2005 tax reforms under the premise that business should be paying a greater proportion of taxes.
Specifically the report calls for the following:
• Increase the personal income tax by boosting the top marginal rate to 7.5% • Increase the commercial activity tax (CAT) rate by at least .08% to better fund schools and local governments • Increase temporarily sales tax by half a penny • Reinstate corporate franchise tax on business income • Sunset tax credits available to businesses
A few weeks ago the OMA distributed Retooling Ohio on tax policy to inform policymakers of the need for a competitive state tax code to protect and grow manufacturing and other job-creating businesses.
Ohio's Statutory Lien for Users of a Customer's Tools, Dies, Molds and Patterns May Help in Collections - June 23, 2010
Michael D. Zaverton, attorney with OMA Connections Partner, Walter & Haverfield LLP, has prepared an extensive article about a little-known, often ignored, and frequently overlooked provision in Ohio law intended to protect Ohio businesses that manufacture goods for their customers by utilizing the customer's tools, dies, molds and/or patterns.
The Ohio's Molder's Lien statute grants mold-users a "possessory" lien on a customer's molds to secure payment of all amounts due for making the mold or for products produced on the mold. An Ohio Molder's Lien even primes the blanket liens of the customer's senior secured lenders. This lien right can play a 56 of 64 significant role in ensuring that Ohio businesses that produce products using a customer's molds are paid by their customers. Such businesses, however, must be diligent in preserving and protecting their rights; read the brief to find out more.
Better Alignment of Tax Abatements Considered - June 18, 2010
The OMA attended a second meeting called by the Ohio Department of Development to consider revision to the Community Reinvestment Area (CRA), Enterprise Zone (EZ) and Tax Increment Financing (TIF) programs. A study of incentives conducted by the Department last year recommends allowing the EZ program to expire and consolidating some of the programs under a reformed CRA that would also allow funding for educational expenditures. Member input is invited. Please contact Ryan Augsburger.
U.S. Supreme Court Protects Federalism - June 10, 2010
The U.S. Supreme Court recently decided that a federal challenge to Ohio's taxation of natural gas independent marketers could not be brought because there is an adequate state-court forum.
A more complete summary of the case has been prepared by OMA Tax Counsel Mark Engel of Bricker & Eckler.
OMA on Working Capital - June 03, 2010
The House acted to create a lending assistance program for smaller businesses. H.B. 521 is sponsored by Representative Jay Goyal (D - Mansfield), whose family operates the manufacturing company, Goyal Industries. The bill leverages some funds on deposit with the state treasurer to guarantee loans made by partnering banks. A state panel would determine eligibility guidelines.
The OMA signaled support for the proposal which cleared the full House on Thursday.
Qualified Employers Benefit from New Tax Incentives - May 28, 2010
The Internal Revenue Service recently announced details about how qualified employers can benefit from the new HIRE Act (Hiring Incentives to Restore Employment Act). The new law provides both a partial payroll tax holiday for employers who hire unemployed workers and a tax credit for retaining those same workers for at least fifty-two weeks.
Read more in a tax alert from OMA Connections Partner Plante & Moran.
The Coming $8 Billion Shortfall - May 21, 2010
State Senator Bill Seitz (R – Cincinnati) http://www.ohiosenate.gov/bill-seitz.html this week penned a thoughtful column widely published in Ohio newspapers, framing the approaching state budget tsunami and challenging Ohioans to press politicians to address the problem. The Senator, is a lawyer with the Taft law firm, an OMA member. His column is well worth a read.
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Taxation Legislation engineering, or math-based fields of study Prepared by: The Ohio Manufacturers' and to authorize municipal corporations to Association grant a credit to individuals qualifying for the Report created on September 20, 2010 state credit. Current 5/6/2009 - House Ways and
HB1 BIENNIAL BUDGET (SYKES, V) To make Status: Means, (Second Hearing) appropriations for the biennium beginning Comments: None July 1, 2009, and ending June 30, 2011 for the operation of state programs. HB140 ENTREPRENEURIAL PROJECTS (GOYAL, Current 7/17/2009 - SIGNED BY J) To permit institutions of higher education Status: GOVERNOR, eff. 7/17/09 to facilitate and assist with entrepreneurial appropriations; other sections projects for economic development and to subject to referendum authorize the institutions to enter into 10/16/09 agreements to induce development of, Comments: None acquire ownership in, and make or guarantee loans and incur debt to fund the HB6 MOTION PICTURE PRODUCTION entrepreneurial projects. (PATTEN, M) To authorize refundable Current 6/24/2009 - House Ways and
nontransferable credits against the Status: Means, (Third Hearing) corporation franchise tax or income tax for Comments: None production of motion pictures in Ohio. Current 3/10/2009 - Referred to HB144 TAX CREDIT-BACCALAUREATE DEGREE Status: Committee Senate Ways and (GROSSMAN, C) To grant an income tax Means and Economic credit eliminating tax liability for five years for Development individuals who obtain a baccalaureate Comments: None degree and who reside in Ohio. Current 6/24/2009 - House Ways and
HB46 UNEMPLOYMENT COMPENSATION Status: Means, (First Hearing) (UJVAGI, P) To permit persons who quit work Comments: None to accompany the person's spouse on a military transfer to be eligible for HB166 TRANSPORTATION INNOVATION unemployment compensation benefits. AUTHORITIES (CARNEY, J) To authorize Current 5/18/2010 - Senate Insurance, the creation of transportation innovation Status: Commerce and Labor, (Second authorities by specified governmental entities Hearing) and to establish the powers and duties of Comments: None such authorities. Current 2/3/2010 - Referred to HB66 STATE GOVERNMENT EFFICIENCY Status: Committee Senate Highways COMMISSION (JORDAN, K) To create the and Transportation State Government Efficiency Commission. Comments: None Current 11/10/2009 - House State
Status: Government, (First Hearing) HB218 PUBLIC UTILITY TANGIBLE TAX Comments: None VALUATION (WINBURN, R) To modify the tax valuation of public utility tangible personal HB117 COMMERCIAL ACTIVITY TAX (JONES, property used to generate electricity from S) To require 30% of commercial activity tax renewable resources. revenue to be used indefinitely for local Current 6/24/2009 - BILL AMENDED, government purposes. Status: House Ways and Means, Current 4/14/2009 - Referred to (Second Hearing) Status: Committee House Ways and Comments: None Means Comments: None HB277 INCOME TAX WITHHOLDING CREDIT (SNITCHLER, T) To authorize a $2,400 HB123 TAX CREDIT-SCIENCE DEGREE (GOYAL, income tax withholding credit for an employer J) To grant an income tax credit to individuals that hires and employs a previously who earn degrees in science, technology, unemployed individual. 58 of 64
Current 10/28/2009 - House Ways and estate property located in the township or
Status: Means, (First Hearing) municipal corporation, and to distribute all Comments: None estate tax revenue originating in a township or municipal corporation that does not HB284 INCOME TAX RATES (HAGAN, R) To exempt property from the tax to the township increase the marginal income tax rate or municipal corporation. Current 11/4/2009 - House Ways and applicable to income in excess of $200,000 to its pre-2005 rate. Status: Means, (First Hearing) Current 10/6/2009 - Referred to Comments: None Status: Committee House Ways and Means HB328 SMALL BUSINESS PROFITS (WILLIAMS, Comments: None S) To authorize an income tax deduction for small business owners' reinvestment of HB285 SALES TAX EXEMPTIONS (BACON, K) To undistributed profits to business property, provide a three-day period in August and in employee training, or research and December each year during which sales of development. Current 3/24/2010 - House Economic clothing, footwear, school supplies, personal computers and computer-related items, and Status: Development, (Sixth Hearing) sporting equipment are exempt from sales Comments: None and use taxes. Current 1/19/2010 - House Ways and HB329 JOB CREATION/RETENTION CREDITS
Status: Means, (First Hearing) (WILLIAMS, S) To include employees working Comments: None from home as employees employed in the project for purposes of the job creation and HB286 HOME IMPROVEMENTS-TAX retention credits. EXEMPTION (FENDE, L) To exempt from Current 5/26/2010 - Senate Ways and real property taxation home improvements Status: Means and Economic greater than $5,000 for five years. Development, (First Hearing) Current 10/28/2009 - House Ways and Comments: None
Status: Means, (First Hearing) Comments: None HB378 MUNICIPAL INCOME TAXATION (YATES, T) To eliminate the authority of municipal HB308 MARGINAL INCOME TAX RATE (FOLEY, corporations to exempt stock options and M) To increase the marginal income tax rate nonqualified deferred compensation from applicable to individuals, estates, and trusts municipal income taxation. with taxable income greater than $200,000. Current 11/30/2009 - Referred to Current 10/28/2009 - House Ways and Status: Committee House Ways and
Status: Means, (First Hearing) Means Comments: None Comments: None
HB318 INCOME TAX FREEZE (SYKES, V) To HB396 STATE BUDGET (BLAIR, T) To prohibit the postpone for two years the last of five Governor from proposing and the General scheduled income tax rate reductions, to Assembly from enacting a state budget with create the Construction Reform aggregate general revenue fund Demonstration Project, to provide for the appropriations that exceed ninety-seven per granting of a delay in implementing all-day cent of the total money received in aggregate kindergarten, and to make an appropriation. revenue for the two most recent fiscal years, to prohibit the proposal and enactment of a Current 12/22/2009 - SIGNED BY state budget containing transfers from the Status: GOVERNOR, Some sections Budget Stabilization Fund in excess of twenty- eff. 12/22/09; others 3/23/10 five per cent of the amount of the Fund, and Comments: None to eliminate the state appropriation limitation. Current 1/12/2010 - Referred to HB326 ESTATE TAX (HOTTINGER, J) To reduce the Status: Committee House Finance and estate tax, to authorize townships and Appropriations municipal corporations, or electors thereof by Comments: None initiative, to exempt from the estate tax any 59 of 64
renewable energy improvements to business HB400 PERSONAL INCOME TAX (ADAMS, J) To property and to authorize an additional phase out the personal income tax over ten income tax deduction for the costs of such years. improvements if the property is sold for a Current 5/26/2010 - House Ways and gain. Current 5/11/2010 - House Alternative Status: Means, (Third Hearing) Comments: None Status: Energy, (First Hearing) Comments: None HB401 PROPERTY TAX EXEMPTION (LUNDY, M) To authorize property tax exemption for HB454 TAX DATABASE (ADAMS, R) To require the municipally owned facilities housing creation of a tax database and calculator to independent professional minor league allow individuals and business to determine baseball teams. their current tax rates and potential tax Current 3/10/2010 - House Ways and liabilities. Current 3/3/2010 - House Ways and Status: Means, (Third Hearing) Comments: None Status: Means, (First Hearing) Comments: None HB432 SHARED WORK UNEMPLOYMENT COMPENSATION (PRYOR, R) To create the HB456 ESTATE TAX (OKEY, M) To repeal the estate shared work unemployment compensation tax effective January 1, 2011. program. Current 2/24/2010 - Referred to Current 3/9/2010 - House Commerce Status: Committee House Ways and
Status: and Labor, (Second Hearing) Means Comments: None Comments: None
HB436 COUNCIL ON EFFICIENT GOVERNMENT HB491 PROPERTY TAX COMPLAINTS (COLEY, (BALDERSON, T) To contract out is provision W) To permit property tax complaints to be of a good or service to a private contractor initiated only by the property owner. under specific contractual provisions; to Current 5/11/2010 - Referred to require the state agency to prepare a Status: Committee House Ways and business case before executing such a Means contract; to create the Council of Efficient Comments: None Government to review business cases, issue advisory reports, and undertake other duties HB516 SCHOOL DISTRICT REIMBURSEMENT regarding contracting out the provision of a (PILLICH, C) To modify the school district good or service; to require the Council to reimbursement schedule for the loss of prepare an annual report; and to require the revenue from the tangible personal property Governor to select goods or services that tax phase out. could be provided by a private contractor and Current 5/18/2010 - Referred to submit the selections for Council review. Status: Committee House Finance and Current 3/16/2010 - House State Appropriations Status: Government, (First Hearing) Comments: None Comments: None
HB521 SMALL BUSINESS WORKING CAPITAL HB437 TAX CREDIT FOR BUSINESS-INCREASED (GOYAL, J) To create the Small Business PAYROLL (BAKER, N) To authorize a Capital Loan Program, and to declare an nonrefundable tax credit for a business that emergency. increases payroll and expands into a vacant Current 6/3/2010 - PASSED BY facility. Status: HOUSE, Vote 87-11 Current 3/3/2010 - House Ways and Comments: None Status: Means, (First Hearing)
Comments: None HCR22 INCOME TAX WITHHOLDING
SCHEDULES (MANDEL, J) To memorialize HB439 TAX EXEMPTION-RENEWABLE ENERGY the Congress of the United States, the (PHILLIPS, D) To exempt from property Secretary of the Treasury, and the Internal taxation the cost of energy-conservation or Revenue Service to withdraw application of 60 of 64
the new federal income tax withholding schedules to prisoners. SB80 ACCOUNTANT-CLIENT PRIVILEGE Current 5/6/2009 - Referred to (SEITZ, B) To create an accountant-client Status: Committee House Aging and testimonial privilege. Disability Services Current 5/6/2009 - REPORTED OUT, Comments: None Status: Senate Judiciary - Civil Justice, (Fourth Hearing) HJR1 COMPENSATION FOR VETERANS (PRYOR, Comments: None R) To provide compensation to veterans of the Persian Gulf, Afghanistan, and Iraq SB109 REAL PROPERTY TAXATION (GIBBS, conflicts. B) To exempt from real property taxation the Current 2/19/2009 - House Veterans value of single-family residential property
Status: Affairs, (First Hearing) owned by a developer or builder until the Comments: None developer or builder transfers possession or title. SB1 BUILDING OHIO JOBS PART II (HUGHES, Current 6/17/2009 - Senate Ways and J) To implement the additional debt authority Status: Means and Economic for conservation and revitalization programs Development, (Third Hearing) provided by Section 2q of Article VIII of the Comments: None Ohio Constitution, to authorize the issuance of that debt, to make new appropriations for SB111 PERSONAL PROPERTY TAX LOSSES the purpose of continuing programs (STEWART, J) To make permanent the established by Am. Sub. H.B. 554 of the temporary reimbursements for local 127th General Assembly, the Bipartisan Job government and school district tangible Stimulus Act, and to declare an emergency. personal property tax losses. Current 3/5/2009 - Referred to Current 5/6/2009 - Senate Ways and Status: Committee House Finance and Status: Means and Economic Appropriations Development, (First Hearing) Comments: None Comments: None
SB9 FILM TAX CREDIT (PATTON, T) To SB145 EMPLOYER TAX CREDIT FOR FELONS authorize income tax credits for investments (MILLER, R) To create a tax credit for wages in motion pictures produced in Ohio. paid by employers to employees who have Current 3/11/2009 - House Ways and been convicted of felonies.
Status: Means, (First Hearing) Current 6/17/2009 - Referred to Comments: None Status: Committee Senate Ways and
Means and Economic SB32 HYBRID VEHICLE PURCHASE (TURNER, Development N) To create a nonrefundable tax credit for Comments: None individuals who purchase a new hybrid vehicle. SB177 TAX LAW CHANGES (SEITZ, B) To partially Current 2/12/2009 - Referred to decouple Ohio law from recent tax law Status: Committee Senate Ways and changes, and to amend the version of section
Means and Economic 5747.01 of the Revised Code that is Development scheduled to take effect January 1, 2010, to Comments: None continue the provisions of this act on and after that effective date and to make SB37 TOBACCO TAX (MILLER, D) To increase the appropriations. tobacco products excise tax rate and to credit Current 11/5/2009 - Senate Finance some of the additional revenue to the Status: and Financial Institutions, Tobacco Use Prevention Fund. (Second Hearing) Current 2/12/2009 - Referred to Comments: None Status: Committee Senate Ways and
Means and Economic SB193 TAX CREDIT FOR HIRING UNEMPLOYED Development (GIBBS, B) To authorize a $2,400 income tax Comments: None withholding credit for an employer that hires 61 of 64
and employs a previously unemployed Current 8/9/2010 - Introduced individual. Status: Current 1/20/2010 - Senate Finance Comments: None Status: and Financial Institutions, (Second Hearing) SJR1 VETERANS' COMPENSATION (GRENDELL, Comments: None T) To provide compensation to veterans of the Persian Gulf, Afghanistan, and Iraq SB198 TAX CREDIT FOR CERTAIN DEGREES conflicts. (SCHIAVONI, J) To grant an income tax credit Current 3/3/2009 - PASSED BY
to individuals who earn degrees in science, Status: HOUSE, Vote 92-3 technology, engineering, or math-based fields Comments: None of study and to authorize municipal corporations to grant a credit to individuals qualifying for the state credit. Current 12/2/2009 - Senate Ways and Status: Means and Economic Development, (First Hearing) Comments: None
SB221 PROPERTY TAX EXEMPTION (MORANO, S) To authorize property tax exemption for municipally owned facilities housing independent professional minor league baseball teams. Current 2/24/2010 - Senate Ways and Status: Means and Economic
Development, (Second Hearing) Comments: None
SB232 RENEWABLE ENERGY FACILITIES (WIDENER, C) To exempt from taxation renewable energy facilities that are not financed through the Ohio Air Quality Development Authority and require a payment in lieu of taxes on the basis of each megawatt of production capacity in such facilities. Current 6/17/2010 - SIGNED BY
Status: GOVERNOR, eff. immediately Comments: None
SB266 INCOME TAX RATE-CAPITAL GAINS (SCHURING, K) To reduce the income tax rate on capital gains reinvested in Ohio-based investments. Current 5/25/2010 - Referred to Status: Committee Senate Ways and
Means and Economic Development Comments: None
SB288 COMMERCIAL ACTIVITY TAX CREDIT (KEARNEY, E) To authorize a commercial activity tax credit for underserved community grocery stores. 62 of 64
Safety & Workers' Comp - Public Policy Report
PUBLIC POLICY REPORT – SAFETY & WORKERS’ COMP
TO: OMA Government Affairs Committee FROM: OMA Staff DATE: Sept 22, 2010 SUBJ: Safety / Workers’ Comp Update
Overview Top issues of engagement include: the BWC’s restructuring of rate-making and affect on the group rating program, monitoring BWC new product implementation, enhancement to the solvency and administration of the SI guaranty fund, discussions on privatization, and focusing attention on the need to adopt legislation to structurally drive down costs.
Bureau of Workers’ Comp Rate-making revisions continue to dominate policy activity at the BWC. Pursuant to HB 100 last session the BWC continues controversial revision to the group rating program due to actuarial shortcomings in the incumbent structure.
The BWC Board of Directors continues its drive to reduce base rates to enhance competitiveness and reflect the “right rate for the right risk.” The BWC Board acted in late October to adopt credibility reduction (from 77% to 65%), with a break-even factor to further true up the discount level to an effective top discount of 51%. The BWC is now touting (rightly so) the record low-level of premium – lowest in two decades.
For self-insured employers work continues to improve the soundness of the SI Employers Guaranty Fund which is responsible for claims management of residual claims coming from bankrupt firms. It is a pay as you go system and according to the Deloitte study, the current Self Insured Employers Guaranty Fund (SIEGF) is exposed to greater risk than prudent.
An OMA-assembled group of self-insured company risk-managers has met with the BWC on possible solutions for dealing with the financial issues and continues in that dialogue. Since that time, aggregated claims data has been made available and an ongoing report is envisioned. Discussion on a more formal structure for SI oversight is ongoing.
Legislative Developments / Outlook Other than the required budget bills to fund the BWC and the Industrial Commission (HB 15 and HB 16), few workers comp bills were introduced. See bill tracker on next pages.
Members of the Ohio House and the Ohio Senate are spending energy on the following trends of note: • Senate held hearings and wrote letters to deter continued BWC rate reform. No further action. 63 of 64
• Senate passed legislation (SB 213) to delay BWC rate reform. The bill is stalled in the House. No further action. • A Senate-created study committee to delve into allowing competitive options has been meeting monthly. The committee has no authority and is stacked with vendors to the workers’ comp system. • Senate and House leaders have clashed over the management of a legislative agency responsible for workers’ comp oversight. The legislative agency recently settled a lawsuit filed by disgruntled former employees, who had alleged they were victims of religious discrimination. • House Democrats have proposed “unfunding” the Workers’ Comp Council, the agency described in the above bullet.
A few individual legislators have advanced topics of interest. The OMA formally commented in opposition to HB 249 to allow trial lawyers to masquerade as “journalists” and thereby request claimant information. A similar issue is pending in litigation. A court recently sided with trial lawyers ordering the release of bulk claimant lists. The decision is being appealed.
A House Republican is advancing a so-called privatization proposal to be introduced later in the year. SB 238 (Bill Seitz - R) flew through the Senate in April and excludes illegal immigrants from the no-fault workers’ comp coverage system. The law change could spell added compliance burdens for employers.
In spite of this activity at the statehouse, not a single bill to advance meaningful cost cutting reforms to statutes governing workers’ compensation has surfaced so far. The OMA included a list of such items in the OMA Retooling Policy Paper (included) and has been a lone voice pushing such proposals.
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Workers' Compensation Legislation funds. Prepared by: The Ohio Manufacturers' Current 1/13/2010 - House Insurance,
Association Status: (First Hearing) Report created on September 20, 2010 Comments: None
HB15 WORKERS' COMPENSATION BUDGET SB4 PERFORMANCE AUDITS FOR (SYKES, V) To create the Deputy Inspector REGULATORY AGENCIES (SCHAFFER, General for the Bureau of Workers' T) To require the Auditor of State to conduct Compensation and Industrial Commission performance audits of the Bureau of Workers' Fund; to make other changes to the Workers' Compensation, Environmental Protection Compensation Law; to make appropriations Agency, Department of Natural Resources, for the Bureau of Workers' Compensation for Department of Agriculture, and Department the biennium beginning July 1, 2009, and of Health, and to require the Auditor of State ending June 30, 2011; and to provide to develop a schedule to provide for periodic authorization and conditions for the operation performance audits of all state agencies. of the Bureau's programs. Current 2/2/2010 - Referred to Current 6/30/2009 - SIGNED BY Status: Committee House Finance and Status: GOVERNOR, Eff. 6/30/2009 Appropriations (some secs. different dates) Comments: None Comments: None
SB213 WORKERS' COMPENSATION PREMIUMS HB16 INDUSTRIAL COMMISSION BUDGET- (FABER, K) To require the Administrator of INTERIM BUDGET (SYKES, V) To make Workers' Compensation to make specified appropriations for the Industrial Commission changes concerning workers' compensation for the biennium beginning July 1, 2009, and premium rates and to prohibit the Bureau of ending June 30, 2011, and to provide Workers' Compensation Board of Directors authorization and conditions for the operation from issuing a refund or rebate to subscribers of Commission programs. to the State Insurance Fund without approval Current 6/30/2009 - SIGNED BY of the General Assembly. Status: GOVERNOR, Eff. 6/30/2009 Current 2/17/2010 - House Insurance, (some secs. different dates) Status: (First Hearing) Comments: None Comments: None
HB249 WORKERS' COMPENSATION RECORDS SB238 WORKERS' COMP. - ILLEGAL ALIENS (HEARD, T) To clarify the method by which (SEITZ, B) To prohibit illegal and journalists may request Bureau of Workers' unauthorized aliens from receiving Compensation records for multiple claimants, compensation and benefits under Ohio add to the definition of "journalist," and allow Workers' Compensation Law. a person to solicit authority from a claimant Current 6/2/2010 - Referred to or employer to represent the claimant or employer in any claim or appeal filed with the Status: Committee House Insurance Bureau. Comments: None Current 1/19/2010 - House Civil and Status: Commercial Law, (Second SR118 COMPETITIVE WORKERS' Hearing) COMPENSATION TASK FORCE Comments: None (GRENDELL, T) To create the Competitive Workers' Compensation Task Force to review the feasibility of allowing employers the HB259 WORKERS' COMPENSATION option to obtain private insurance to insure INVESTMENTS (BATCHELDER, W) To their obligation under the workers' specify the classes of investments in which compensation system of Ohio. the Administrator of Workers' Compensation may invest the funds specified in the Workers' Current 11/18/2009 - ADOPTED BY Compensation Law and to require the Status: SENATE, Adopted, as Administrator to have criminal records checks amended; Vote 19-14 conducted for employees of investment Comments: None consultants with whom the Administrator contracts to facilitate the investment of those