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Fiscal Note & Local Impact Statement

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Fiscal Note & Local Impact Statement HB 675 - As Passed by the House - CAP Page 1 of 19 Fiscal Note & Local Impact Statement 124 th General Assembly of Ohio Ohio Legislative Service Commission 77 South High Street, 9th Floor, Columbus, OH 43215-6136 ² Phone: (614) 466-3615 ² Internet Web Site: http://www.lsc.state.oh.us/ BILL: H.B. 675 DATE: December 5, 2002 STATUS: As Passed by the House SPONSOR: Rep. Calvert LOCAL IMPACT STATEMENT REQUIRED: No — Not required for budget bills CONTENTS: Capital appropriations for FY 2003-2004 and other changes to law State Fiscal Highlights STATE FUND – Appropriations/Expenditures FY 2003-2004 BIENNIUM Capital Appropriations Public School Building Fund $30,000,000 Highway Safety $2,150,000 Waterway Safety $9,421,093 Special Administrative $16,000,000 Veterans' Home Improvement $1,279,500 State Fire Marshal $3,300,000 Sports Facilities Building $14,500,000 Highway Safety Building $3,259,329 Administrative Building $84,126,327 Adult Correctional Building $40,000,000 Juvenile Correctional Building $10,000,000 Arts Facilities Building $48,327,833 Ohio Parks and Natural Resources $16,719,525 School Building Program Assistance $284,200,000 Mental Health Facilities Improvement $33,079,012 Higher Education Improvement $555,469,096* Parks and Recreation Improvement $22,654,520 Transportation Building $50,000 Clean Ohio Revitalization $50,000,000 Clean Ohio Revitalization $37,500,000 Clean Ohio Agricultural Easement $6,250,000 Clean Ohio Trails $6,250,000 TOTAL $1,274,536,235 *This number reflects the actual total of Higher Education Improvement Fund appropriations. The total appropriation for the Higher Education Improvement Fund listed in the bill, $554,469,095, is incorrect and should read $555,469,096. Nevertheless, the appropriations to each capital project are correct and are unaffected by the incorrect fund total. file://D:\CapitalBudgetHB0675IN\HousePassed\HB0675HP.HTM 12/5/2002 HB 675 - As Passed by the House - CAP Page 2 of 19 · This bill appropriates $1,274,536,235 for capital projects for FY 2003-2004. This amount is 29.7% lower than the approximately $1.8 billion appropriated for the FY 2001-2002 capital biennium. · The total amount of debt authorized by this bill is $1,060,490,800, which is 32% lower than the $1.56 billion of debt issued in the previous capital budget, Am. Sub. H.B. 640 of the 123rd General Assembly. Fiscal Effects of Other Law Changes STATE FUND FY 2003 FY 2004 FUTURE YEARS General Revenue Fund Revenues - 0 - $2.6 million loss from Annual loss from changes to changes to the job retention the job retention tax credit tax credit increasing by $2.6 million per year to $10.4 million in FY 2007 and thereafter Approximately $95,000 Approximately $100,000 Approximately $100,000 loss loss from extention of loss from extention of in FY 2005; approximately repayment schedule for repayment schedule for $43,000 annual gain for FY Hamilton County ADAS Hamilton County ADAS 2006 through FY 2012 Board Board Expenditures Potential minimal Potential minimal decrease Potential minimal decrease (744-321) decrease Innovation Ohio Loan Guarantee Fund (new) Revenues Potential gain Potential gain Potential gain Expenditures Potential increase Potential increase Potential increase Innovation Ohio Loan Fund (new) Revenues Potential gain Potential gain Potential gain Expenditures Potential increase Potential increase Potential increase Ride Inspection Fees (Fund 578) Revenues Gain of approximately Gain of approximately Gain of approximately $172,000 $172,000 $172,000 Expenditures - 0 - - 0 - - 0 - · Job Retention Tax Credit. The bill modifies the new job retention tax credit (Am. Sub. H.B. 405) and makes companies that invest in research and development eligible for the tax credit. The bill also decreases to $100 million the minimum amount of investment required to qualify for the credit. These changes to the job retention credit will decrease revenues to the General Revenue Fund. GRF receives 95.2 percent of corporate franchise tax revenues. · Hamilton County Alcohol and Drug Addiction Services Board. Current law authorizes the conveyance of specified state-owned real estate located in Hamilton County to the Hamilton County Alcohol and Drug Addiction Services Board for $600,000 with payments to be made over four years. As of June 30, 2002, a total of $195,000 in payments had been made. The outstanding balance ($405,000) is to be repaid in equal installments of $135,000 per fiscal year through FY 2005. Under the bill, the outstanding balance will be repaid in equal installments of $40,500 per fiscal year through FY 2012. Under the bill, the GRF will lose approximately $95,000 to $100,000 in revenue each year for fiscal years 2003 through 2005. The GRF will gain $42,788 in revenue each year for fiscal years 2006 through 2012. However, in FY 2006, the gain in revenue will be slightly offset by a loss of an estimated $7,628 in interest earnings. The GRF will gain a file://D:\CapitalBudgetHB0675IN\HousePassed\HB0675HP.HTM 12/5/2002 HB 675 - As Passed by the House - CAP Page 3 of 19 small amount of interest earnings in FY 2013. After all of the payments have been received, the net fiscal effect to the GRF will be zero (assuming a flat earnings rate and spending of all GRF revenues each year). · Innovation Ohio Loan Guarantee Fund and Innovation Ohio Loan Fund. Creates the Innovation Ohio Loan Guarantee Fund and the Innovation Ohio Loan Fund as special revenue funds and trust funds, used to implement the Innovation Ohio Loan Program in the Department of Development and permits the issuance of revenue bonds to pay the costs of the program. Neither of these funds shall be comprised in any part of moneys raised by taxation. This program will result in an increase in expenditures when money is lent for projects and a gain in revenue when the money is paid back with interest. It is unknown at this time how much money will be spent. · Department of Agriculture. According to the Department of Agriculture, the Ride Inspection Fees Fund (Fund 578) will realize an increase of approximately $172,000 as a result of this bill. This is due to the increase of inspection fees for most amusement rides, as well as the creation of fees for expedited inspection services per ride, failure to cancel a scheduled appointment, and failure to have a ride ready for inspection. · Department of Natural Resources’ Division of Mineral Resources Management (744-321). The Department of Natural Resources’ Division of Mineral Resources Management may see a minimal decrease in expenditures as a result of the changes made to the notification and review procedures for findings regarding mine safety violations. · Self -insurance for Purposes of Workers’ Compensation. The bill allows school districts, state institutions of higher education and other educational entities the right to self-insure for purposes of workers’ compensation for construction projects estimated to cost over $25 million. These employers would be required to make a contribution to the Self-Insuring Guaranty Fund in order to protect the State Insurance Fund from defaults by the employer. The bill could lead to savings or costs to these educational entities, dependent on the number of injury and death claims they experience as a result of these projects. · Fund M87 of the Tobacco Master Settlement Agreement Fund Group. Fund M87 of the Tobacco Master Settlement Agreement Fund Group will receive no net change to its appropriations. The bill eliminates the Board of Regents FY 2003 appropriation of $25.5 million within appropriation item 235-405, Biomedical Research and Technology Transfer Commission, and it creates a $25.5 million FY 2003 appropriation item 195-435, Biomedical Research and Technology Transfer Trust Fund, within the Department of Development. · Definition Change. The bill changes the definition of “making retail sales.” While it is unlikely to do so, this change does have the potential to increase the number of facilities eligible for enterprise zone agreements and incentive agreements for remediation of property. · Taxation of Certain Trusts. The bill clarifies the definitions and procedures regarding the taxation of certain trusts under the Ohio personal income tax. Among the changes is a narrowing of the definition of trusts subject to the income tax, which may reduce revenues from the tax on trusts. · Land Conveyances—Kent State and University of Cincinnati. The bill permits the State to convey a .86- acre property to the East Liverpool Young Men’s Christian Association (YMCA). The State would receive property of roughly the same acreage in exchange, for the benefit of Kent State University. The State is required to pay for the county recorder’s costs associated with this property exchange. The bill also permits the State to sell a property located in Hamilton County, the proceeds of which are deposited in the University of Cincinnati’s William Gray Endowment Fund. file://D:\CapitalBudgetHB0675IN\HousePassed\HB0675HP.HTM 12/5/2002 HB 675 - As Passed by the House - CAP Page 4 of 19 · Elimination of the Budget Study Committee. The bill eliminates the Budget Study Committee. · OAKS. Temporary law allows the state to acquire the Ohio Administrative Knowledge System (OAKS) software and pay for its installation, using a lease-purchase agreement, spreading out the cost over a number of years. Initial cost estimates range from $120 - $160 million. No appropriation for OAKS is made in this bill. LOCAL GOVERNMENT FY 2003 FY 2004 FUTURE YEARS Counties and other local governments Revenues Minimal
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