9:30 a.m. (EST) 1-866-362-9768 940-609-8246# OMA Government Affairs Committee August 22, 2019 AGENDA Welcome & Introductions Scott Corbitt, Region Vice President, Anheuser-Busch Committee Chair Josh Zabek, General Manager, Anheuser-Busch Host National Issue Minute Luke Harms, Senior Manager, Government Relations, Whirlpool Committee Vice Chair OMA Counsel’s Report Chris Slagle, Partner, Bricker & Eckler LLP, OMA General Counsel Staff Reports Ryan Augsburger, OMA Staff Rob Brundrett, OMA Staff Kim Bojko, Partner, Carpenter Lipps & Leland OMA Energy Counsel John Seryak, RunnerStone OMA Energy Engineer Committee Members Special Guest Gene Pierce, Pierce Communications Ohioans Against Corporate Bailouts Discussion Agenda • State Budget • Business Taxes in the Budget • HB 6 Electricity Power Plant Bailouts • HB 6 Referendum • 2019 Legislative Outlook • Lake Erie Bill of Rights • PTSD Coverage under Workers’ Comp • OMA Workforce Opportunities Sponsored by: Hosted by: 2019 Government Affairs Committee Calendar Meetings will begin at 9:30 a.m. Wednesday, November 13 Page 1 of 184 Public Policy “Hot Topics” August 22, 2019 Overview Activity has been high since the Government Affairs Committee met last on June 5. Budget legislation was the biggest bill, but a far-reaching and controversial bailout package for at-risk nuclear and coal power plants rivaled the budget as top priority dragging out completion of the state budget until mid-July. Both legislative debates significantly impact manufacturers and the OMA played a major advocacy role. Legislative Branch Composition & Control • Senate (Republicans control 24 – 9) • House of Representatives (Republicans control 61 – 38) A session calendar is included in member resource materials. Lawmakers are scheduled to have an active autumn and early winter. The Budget The state budget is actually a collection of budget bills, but under Ohio’s constitution, they must all be adopted before July 1. Surprisingly, the budget was not approved on time and a continuing resolution kept government operating during the Independence Day week. The sticking point for budget passage was House Bill 6, the electricity generation bailout. Also in the mix was horse trading related to benefit expansions in the workers comp budget bill. Main Operating Budget As expected, the main Operating Budget, HB 166 has become a Christmas tree for hundreds of law changes. The House approved the budget with widespread bipartisanship. The Senate completed work on the budget by middle of June, however an impasse between the House and Senate followed that went unresolved until mid-July. State Budget & Tax Policy Of interest to businesses was a tax increase on business “owners” who have enjoyed zero state tax liability on their first $250,000 of income since 2014. The intended justification: too many professionals are getting the tax holiday but not doing enough in their business to stimulate the economy. After a contentious debate the OMA and allies were able to retain the business income tax deduction at current levels. Only lawyers and lobbyists lose the benefit under the final legislation. See tax section. Also included in the House passed version of the budget were two tax amendments beneficial to manufacturers. One facilitates state support for capital reinvestment of existing companies. The other expands a favorable sales tax exemption for makers of food and beverage. These constitute some big wins for manufacturers. See tax section for more information. Numerous other more targeted issues that impact some group of manufacturers were debated within budget bill. Workers’ Comp Claims Expansion to Mental Injury The Workers’ Comp budget became a loaded political football over the course of its debate. Originally the bill contained very little policy and was mainly an appropriation vehicle. The Ohio House amended the bill to include to include coverage of PTSD for emergency first-responders, illegal alien provisions, settlement changes, and new severe penalties for employers who even mistakenly misclassify their employees. The PTSD extension sets a dangerous precedent for extending mental coverage into a system that has required a physical injury to receive treatment. The OMA has long opposed the extension of PTSD. Cooler heads prevailed and the Senate stripped the bill of all policy and eventually an agreement was made in conference committee to use the Senate version of the bill. Legislative leaders have expressed they would like to provide PTSD coverage for first responders. The business community is working to come up with a solution that would provide the necessary coverage outside of the BWC system. Page 2 of 184 Transportation Budget The Transportation Budget (House Bill 62) was completed in remarkable bipartisan fashion in early April. The bill contained an increase in motor fuel tax, bifurcating the tax on gasoline and diesel for the first time. While the OMA supported a reasonable gas tax adjustment to provide for needed road and bridge construction, the OMA did not support the taxing of diesel (now $0.47 / gallon) at a higher rate than gasoline ($0.385 / gallon). The OMA articulated concerns on disproportionate diesel fuel increases since diesel costs will be passed on to trucking customers (manufacturers) in the form of variable fuel costs. Electricity Bailouts / Market Distortion After being denied new subsidy payments for many years, proponents of nuclear power plant bailouts succeeded earlier this summer at winning approval of HB 6. The bill transfers money from customers to power plant owners and in so doing, distorts markets. The OMA has been a leading opponent to the various prior attempts and has been heavily engaged in the legislative advocacy effort. The legislative chapter has turned, but the book is not over. Now comes a referendum proposal and implementation. Stay tuned and stay engaged! See energy report. Other Priority Legislation Customarily the first bills introduced in a legislative session reflect the highest priorities of the chamber’s leadership. In the Senate, SB 1 is a regulatory reform bill taking aim at the number of regulations on the books. A version of SB 1 was included in the state budget bill. • SB 2 was introduced to complement the Governor’s H2Ohio program and deals Ohio water quality. The state budget also included portions of SB 2. • SB 3 deals with reform of drug sentencing laws. House Bill 2 impacts workforce development. The bill sets aside money for industry sector partnerships and industry recognized credentials. The OMA is supportive and is working with the House on improvements. • HB 1 is a House version of criminal sentencing reform and was passed at the end of the summer session and has moved on to the Senate. • HB 2 is a workforce development bill that the OMA has been supportive. This bill would be the implementing language for the money set aside in the state budget for industry sector partnerships and the new TechCred program. • HB 3 also know as Aisha’s Law is a domestic violence bill and currently remains in the House. Ballot Reform Last November Ohioans defeated a criminal sentencing constitutional amendment. The issue once again ignited the debate about how well-financed out of state interests are able to use Ohio’s constitution as a petri dish for policy experimentation. The initial interest in a fix to the ballot process has dissipated. Workforce Development A top priority for Ohio manufacturers, the OMA is in its third year supporting an industry sector partnership model on a regional basis. Your company is invited to opt-in to next steps and participate in 2019 activity. Please contact the OMA staff to get your team engaged in regional efforts to develop a modern manufacturing workforce. The OMA’s third annual summit will be held on October 29 and will build on the workforce successes over the past several years. Make sure your company is plugged in. See included sponsorship under Human Resources. The OMA was successful in securing $5 million in the state budget (HB 166) to help support the industry sector partnership approach. Another $30 in TechCred money can be used by individual companies to help upskill incumbent or prospective employees. Page 3 of 184 Environment The DeWine administration remains focused on water quality across Ohio. The Governor introduced the H2Ohio program which is designed to attack water quality through three agencies, EPA, AG, and ODNR. Each agency has a different focus to come at the problem. Funding for the program was included in the passed state budget. H2Ohio does not take the heavy handed regulatory approach we had seen previously. The budget also included an amendment that takes judicial standing away from bodies of water. This is in direct response to the Lake Erie Bill of Rights where Lake Erie was giving standing to sue parties who infringed on the Lake. See environment report. Unemployment Compensation The legislature remains on the sideline of true unemployment compensation reform. After some early comments on putting reform into the state budget, the issue has once again fallen to the wayside. There was a short-lived effort in the Senate to extend the current compromise but there was not the appetite in the House to continue the benefit freeze and temporary tax increase. There seems to be some support for reform in some smaller circles of the House but not enough to gather the steam necessary to tackle such a controversial issue. Tort Reform The OMA is supporting legislation to shorten the statute of limitations for business contracts. The OMA is also working to protect the advantageous statute of repose. Limitations on third party financing of class action litigation is also a priority. More recently legislation to revise Ohio’s whistleblower protections could morph into a false claims with a qi tam right for citizen initiated lawsuits of the State. We are watching this with concern. See counsel’s report. Right to Work No action anticipated.