Table of Contents Page # Government Agenda 2 Affairs Guest Bios 3 Public Policy “Hot Topics” 6 Committee Leadership News Articles 11 March 6, 2013 Miscellaneous Legislation 19
Additional Materials 130th General Assembly Reference & Resources 27 21st Century Manufacturing Task Force 35 Transportation Budget Summary and Truck Weights 58 OMA Public Policy Priorities 67 NAM Public Affairs Conference 81 Manufacturing Evenings Event 82
Energy Policy Report 84
Environment Policy Report 135
Human Resources Policy Report 143
Safety & Workers’ Compensation Report 159
Tax Policy Report 169
2013 Government Affairs OMA Government Affairs Committee Meeting Sponsor: Committee Calendar Meetings will begin at 9:30 a.m.
Wed., Mar. 6, 2013 Wed., June 5, 2013 Thurs., Aug. 22, 2013 Wed., Nov. 13, 2013
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OMA Government Affairs Committee March 6, 2013
AGENDA
Welcome & Self-Introductions Jeff Fritz of DuPont Committee Chair
Federal Minute: Barry Doggett of Eaton Corp. Brief Report on National Issues Regional NAM Vice Chair by National Partners Members
OMA Counsel’s Report Kurt Tunnell Managing Partner, Bricker & Eckler LLP, OMA General Counsel
Staff Reports Ryan Augsburger, OMA Staff Rob Brundrett, OMA Staff Committee Members
Special Report: Mark Engel of Bricker & Eckler LLP, Tax Reform Provisions OMA Tax Counsel
Special Guest: Senator Bill Seitz, Chair, Senate Public Utilities Committee Senate Update and Senate Review Energy Standards
Special Guest: Matt Carle, Director of Legislative Affairs, Governor Kasich Governor Kasich’s Ohio Jobs Budget 2.0
Discussion / Action Agenda • HB 59 Main Operating Budget – Tax Reform / Medicaid Expansion • HB 35 (McGregor) Transportation Budget (Policy / Truck Weights) • Unemployment Trust Fund Solvency and Shared Work • SB 58 (Seitz) Legislative Review Efficiency & Renewable Energy • HB 5 (Grossman / Henne) Municipal Income Tax Uniformity • 130th General Assembly Resources and Action Recap / Outlook
Government Affairs Committee Meetings in 2013 begin at 9:30 a.m. and conclude by 1:00 p.m. Lunch will be served. Please RSVP to attend meetings by contacting Denise: [email protected] or (614) 224-5111 or toll free at (800) 662-4463. Indicate if you will be participating in-person or by phone.
Thanks to Today’s Meeting Sponsor:
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FOR IMMEDIATE RELEASE JANUARY 7, 2011
Governor-elect Kasich Names Senior Staff
COLUMBUS – Today Governor-elect John Kasich announced additional appointments to his staff. He previously named Beth Hansen to serve as Chief of Staff and Wayne Struble to serve as Director of Policy.
Matt Carle will serve as Director of Legislative Affairs where he will help develop the governor’s policy agenda and secure its support in the General Assembly. Carle also will work with cabinet directors on legislative issues in state agencies. He previously served as the Director of Development and Community Relations for the Ohio College Access Network (OCAN) and worked as a real estate development and zoning lawyer.
Carle has a bachelor’s degree from The Ohio State University and a law degree from Capital University Law School. He lives with his wife, Janette, in Gahanna.
Matt Carle Director, Legislative Affairs at Governor's Office [email protected] Office: 614-644-0856
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Senator Bill Seitz 8th Senate District
A lifelong resident of Western Hamilton County, State Senator Bill Seitz has worked to represent the best interests of the Greater Cincinnati area at the Statehouse. Known for his colorful floor speeches and legal acumen, in a ranking of all 132 legislators published by Columbus Monthly Magazine, Seitz was rated best speechmaker, funniest and was recognized for his effectiveness, his knowledge and his hard work. He has put these talents to good use on issues that matter to his constituents.
Seitz began his public service career as a member of the Cincinnati Board of Education and the St. Antoninus Parish Education Commission. He was twice elected Green Township Trustee, where he also served as President of the Hamilton County Township Association. He has never forgotten his local government roots nor wavered in his belief that government governs best when closest to the people.
Prior to joining the Ohio Senate in 2007, Seitz served in the Ohio House of Representatives for seven years. There, he rose through the ranks, serving as Majority Whip and Assistant Majority Whip and chair of the Civil and Commercial Law Committee.
In the Senate, Seitz serves as Chairman of the Public Utilities Committee and Vice-Chairman of the Criminal Justice Committee. He has also been named to the Transportation Committee, the State Government Oversight & Reform Committee, the Civil Justice Committee, the Commerce & Labor Committee and the Finance Subcommittee on General Government.
A fiscal conservative, Seitz is a champion of government efficiency. While others in Columbus talk about reducing the size of state government, Senator Seitz has put tangible ideas on the table, including now-enacted proposals that would reduce prison overcrowding and save the state $578 million through 2015.
Throughout his legislative career, Senator Seitz has been at the forefront of criminal and civil justice issues, leading the effort to reform Ohio's criminal sentencing laws and eliminate the barriers to employment many non- violent offenders face following their release from prison. He has also worked to enhance penalties for violent offenders and to keep sex predators away from our children. He was the key architect of Ohio's sweeping tort reforms by which nearly two dozen such bills between 2001-2004 transformed Ohio's civil justice landscape and
The Ohio Statehouse Columbus, Ohio 43215 (614) 466-8068 [email protected]
Page 4 of 203 made Ohio more business-friendly. In these endeavors, he has been aided by his legal background. Seitz is a partner in the Taft, Stettinius and Hollister law firm, with which he has been associated since 1978, and for the last several years, he has been listed in the Best Lawyers in America book.
Throughout his adult life, and despite increasing responsibilities in Columbus, Seitz has served organizations that promote livable neighborhoods and strong local communities. He served as President of the Westwood Civic Association and the Western Economic Council; Secretary of the Bridgetown Civic Association; a Cincinnati Recreation Commission Commissioner, and a trustee of Invest in Neighborhoods. He remains active with the Price Hill/Western Hills Kiwanis Club and has also been a strong supporter of law enforcement as a member of the Fraternal Order of Police Associates and past president and secretary of the Cincinnati District 3 Police- Community Relations Committee.
Senator Seitz is an alumnus of the University of Cincinnati, where he graduated summa cum laude with an undergraduate degree in history. He also earned his Juris Doctorate from the University of Cincinnati College of Law, where he distinguished himself as a member of the Order of the Coif and was selected to the Law Review.
Page 5 of 203 Public Policy “Hot Topics” March 6, 2013
Overview State lawmakers returned to the statehouse for a brief post-election session in November. The 130th General Assembly convened in early January. Having appointed leaders, committee chairs and set a calendar (all attached), the House and Senate have introduced over 100 bills and resolutions already. State budget legislation containing tax reform and Medicaid coverage expansion will consume statehouse business through June.
130th General Assembly See attached list of House and Senate elected leaders. In the House, Speaker William G. “Bill” Batchelder is now joined by Matt Huffman as Speaker ProTem. Both men are term-limited. The race to succeed them in leading the House majority caucus is on. Speaker Batchelder created a new standing committee on Manufacturing and Workforce Development, led by Kirk Schuring, who chaired the House 21st Century Manufacturing Task Force.
Keith Faber assumed the Presidency of the Senate and is joined by a new leadership team (see attached). Senator Faber was just reelected to a second full term that will expire December 2016 allowing for more continuity. Former Senate President Niehaus served as president for two years.
Priority Legislation Traditionally the top ten bills introduced by the House and Senate are dubbed “priority legislation” to reflect the top priorities of the caucuses. No less than four of the priority bills attempt to improve workforce development infrastructure. See attached list summary.
Main Operating Budget On February 4, Governor Kasich unveiled his executive budget proposal, coined the Ohio Jobs Budget 2.0. Introduced formally as HB 59, the bill contains sweeping changes to Ohio tax law, Medicaid, and education. Hundreds of other impactful policy changes will be included before the House and Senate complete their work. The state’s fiscal year begins on July 1; therefore HB 59 is expected to be completed in June. See separate article on Tax Reform and see tax section of meeting materials.
Transportation Budget While most public programs are funded by the main operating budget, transportation and highway safety (ODOT and Department of Public Safety) are funded in dedicated budget bill. Considered in tandem with the transportation budget is HB 51 to make changes to the Ohio turnpike, most notably borrowing money against the turnpike to fund roadway infrastructure projects.
HB 51 and HB 35 were approved by the House last week. The transportation sub-committee (of the House Finance Committee) added a provision to hike truck weights on Ohio roadways. The OMA is supportive of the amendment and working to enhance in the Senate. Member engagement will be needed to preserve the provision in the face of opposition by railroad interests.
Workers’ Comp & Industrial Commission Budget(s) The Bureau of Workers’ Compensation and the Industrial Commission are not included in the state’s operating budget bill. Both agencies have their own budget bills. These bills were
Page 6 of 203 introduced in the middle of February and have been voted out of the House. They could be voted out of the Senate as early as next week. The Workers’ Compensation budget initially included many medical reforms supported by the OMA. However House leaders removed all policy from the budget. Look for a medical reform bill from the General Assembly as soon as the end of March or beginning of April.
Tax Reform A package of tax “reforms” had been rumored from the Governor for over a year. The Governor has made clear from day one his desire to reduce the state income tax rates. It was unclear what other reforms may be on the table. Over the past year, the OMA Tax Committee had undertaken study of numerous important tax provisions such as the manufacturing sales and use exemption and the broad-base, low-rate commercial activity tax (CAT). Those provisions are untouched in the Governor’s proposal which reduces all personal income tax rates by at least 20% and shaves one half of the total income tax bill on the first $750,000 for owners of pass through entities, including many family-owned manufacturing enterprises.
At the same time the tax reform package reduces the state sales tax rate from 5.5% to 5% while expanding the sales tax base to cover services previously untaxed such as legal, accounting, engineering and design. The state also readjusts local sales tax rates to respond to the broadened sales tax base. Another controversial proposal “modernizes” severance taxes on gas and petroleum. (The OMA Board adopted a position on this proposal. September 2012).
Electric Utility Regulatory Structure Changes The PUCO approved significant rate plans in 2012. When considered together, the approved rate plans signal a sea change in the way Ohio regulates and prices electricity. Members will recall that electric companies took to the airwaves in 2012 to influence policymakers, illustrating the high stakes. In spite of the permanent move to empower market forces, several incongruent policy positions have been staked, raising potentially disturbing questions.
Manufacturers in NE Ohio will be among the first to experience capacity rate shock in part due to power plant retirements. Manufacturing leaders have been working together under the OMA Energy Group in support industry energy competitiveness. The OMA Energy Group is engaging energy experts including grid operator, PJM Interconnect who will have more control over electric supply and pricing than ever before. Contact OMA staff to learn how to become active with the OMA Energy Group.
Energy Efficiency / Alternative Energy Utility FirstEnergy launched an effort to revise the state’s energy efficiency benchmark during the lame duck session. The OMA issued a preliminary fact page which gained much notoriety among thought leaders. The amendment stalled out last issue but the issue remains a priority for House and Senate Republicans. Senator Bill Seitz has introduced SB 58 as placeholder legislation to deal with possible revisions to both the energy efficiency standard and the renewable energy standards. The OMA suggested sub topics for the Senator to review. The OMA has commissioned research to quantify the benefits of energy efficiency. See energy resource materials.
Civil Justice After years of complication, the General Assembly passed HB 380 late last year. The latest addition to tort reforms has been hailed as a model for disclosure in asbestos claims made against asbestos trusts.
Page 7 of 203 Ohio House 21st Century Manufacturing Task Force Following seven hearings held onsite at manufacturing facilities, the Task Force issued a final report in early February. See attached summary of task force testimony and official House report. A standing committee on manufacturing will now consider law changes in response to industry needs expressed.
Elections View November 14, 2012 Government Affairs Committee for election results recap. Copies of the 2012 OMA Election Guide cataloging state legislative and other contests are still available to members.
In 2013 the OMA will be watching for a ballot proposal to advance statewide workplace freedom (right-to-work). Also this year, revisions to the Ohio Constitution to allow for marijuana, impeding employers’ safety and drug policies may be on the 2013 ballot.
Ohio Senate Priority Bills of the 130th General Assembly
Senate Bill 1 – Workforce Development Revolving Loan Fund: Jointly sponsored by Senators Bill Beagle (R–Tipp City) and Troy Balderson (R–Zanesville), this bill uses $25 million in existing casino licensure fees to establish a revolving job training and education loan program to help Ohioans retool their skills and qualify them for expanding job opportunities.
Senate Bill 2 – Workforce Development Improvement Act: This legislation, jointly sponsored by Senators Peggy Lehner (R–Kettering) and Bill Beagle (R–Tipp City), partners the 90 different county “One-Stop” locations with the statewide OhioMeansJobs initiative to improve job training and placement programs. The OhioMeansJobs website currently has approximately 100,000 job listings.
Senate Bill 3 – Job Creation Empowerment Act: Sponsored by State Senator Frank LaRose (R–Copley), this legislation continues efforts to make Ohio a more attractive place to locate or expand jobs by ensuring that state regulations are regularly reviewed to eliminate unnecessary red tape. Specifically, the bill creates a “Rule Watch” system to make it easier for Ohioans and employers to be notified when a rule affecting them is up for review. It also authorizes the creation of a pilot program identifying three to five entrepreneurs annually to assist state agencies in strengthening coordination with small business employers.
Senate Bill 4 – Newborn Healthy Hearts Bill: This bill, supported by the Ohio Heart Association, ensures that all newborns receive a non-invasive pulse oximetry screening to identify congenital heart defects early. Congenital heart disease (CHD) is the most common birth defect in the United States and the leading cause of birth-defect related deaths. This legislation is jointly sponsored by Senators Gayle Manning (R–North Ridgeville) and Scott Oelslager (R–North Canton).
Page 8 of 203 Senate Bill 5 – Kelsey’s Law: Jointly sponsored by Senators Edna Brown (D–Toledo) and Gayle Manning (R–North Ridgeville), Senate Bill 5 allows law enforcement officers access to call location information, including GPS tracking, for a missing, abducted person. The bill is named after Kelsey Smith, an abducted and murdered Kansas teenager who might have been located sooner had legal questions not delayed investigators from obtaining cell data.
Senate Bill 6 – Fiscal Officer Integrity Act: At the recommendation of State Auditor Dave Yost, the bill, sponsored by Senator Tim Schaffer (R–Lancaster), establishes continuing education requirements for township and municipal fiscal officers to ensure the protection of public funds and the effective management of tax dollars. It also establishes a standard by which a fiscal officer can be removed from office when they betray the public’s trust.
Senate Bill 7 – Law Enforcement Protection Act: Sponsored by Senators Bill Beagle (R-Tipp City) and Chris Widener (R-Springfield), this bill requires courts to notify law enforcement officers of violent offenders who are sentenced to mental health treatment rather than incarceration. The information is essential to protecting officers who could potentially encounter these offenders during an investigation. The legislation was prompted by the death of a Clark County deputy sheriff who was shot and killed by an offender on conditional release.
Senate Bill 8 – Military Employment Assistance Bill: As part of Ohio’s commitment to supporting military families, this bill, sponsored by Senator Frank LaRose (R–Copley), modifies Ohio law to offer unemployment benefits to individuals who have become unemployed due to their military spouse’s relocation or deployment.
Senate Bill 9 – Health Insurance Accountability Act: Sponsored by Senator Kevin Bacon (R– Minerva Township), this bill adopts accountability standards and restrictions for federally mandated health insurance advisors. These “navigators” act as insurance agents who aid in searching and purchasing insurance under the federally mandated health insurance exchange.
Senate Bill 10 – Polling Access & Integrity Act: Sponsored by Senator Bill Coley (R–Liberty Township), this elections reform bill improves access to polling locations for disabled Ohioans. The proposed law also ensures that journalists have “reasonable access” to a polling location and clarifies that a person in line when a polling location closes is entitled to cast a ballot.
Ohio House of Representatives Priority Bills for the 130th General Assembly
House Bill 1 (Derickson, Romanchuk) – Ohio Means Jobs. This legislation rebrands Ohio’s patchwork of workforce centers, currently referred to as “One-Stops,” as “Ohio Means Jobs _____ County” to ensure consistency, reduce public confusion, and connect these centers directly to OhioMeansJobs. It also requires all workforce investment boards to use OhioMeansJobs as the only job matching tool by July 2013 to streamline job-matching services, reduce duplication, and maximize this increasingly important benefit to Ohioans.
House Bill 2 (Derickson, Brown) – Helping the unemployed get back to work. This bill requires that all applicants for unemployment insurance register with OhioMeansJobs prior to applying for benefits and requires applicants to make direct contact with their local One-Stop (or future OhioMeansJobs office) by the eighth week of unemployment benefits. This will ensure that unemployment insurance applicants are maximizing their job search opportunities and make it easier for the applicant to navigate the many different services that currently exist.
Page 9 of 203 House Bill 3 (Sears, Kunze) – Improving health insurance oversight. In order to protect our competitive marketplace, it is important that we control the regulatory authority over the sales, solicitation and recommendation of health insurance options. This legislation provides for the certification and oversight of health exchange navigators, and adjusts continuing education requirements for insurance agents. It outlines the scope of practice of a navigator, as well as specific requirements for licensure and ethics requirements.
House Bill 4 (Stautberg, Blessing) – Local Government Performance Measure Grant Program. This legislation creates 100 micro-grants to help Ohio’s local governments improve government efficiency, maintain vital services, and save taxpayer dollars in an effort to make Ohio more competitive. These grants will give local entities the tools to efficiently manage functions and services by using performance measurements and benchmarking. The funds will be repurposed from the existing appropriation of $36 million in unused loan dollars from the Local Government Innovation Fund.
House Bill 5 (Grossman, Henne) – Municipal income tax uniformity. This legislation seeks to make Ohio’s municipal income tax system as fair and uniform as possible throughout Ohio’s more than 600 taxing municipalities. Among other provisions, it creates uniform treatment of filing requirement, defines “resident” to eliminate the requirement that someone can be a resident of an Ohio city without being a legal resident of the state of Ohio, and creates a uniform net operating loss carry-forward period of five years.
House Bill 6 (Thompson, Green) – Local government agreed upon procedures. This legislation specifies that local government entities that qualify for an agreed-upon procedures audit must meet defined criteria. An agreed-upon procedures audit is a lower cost method that allows eligible government agencies to save money and time without sacrificing accountability. The Ohio Auditor of State’s office estimates that more than 1,000 government entities may qualify for this kind of audit.
House Bill 7 (Huffman) – Internet sweepstakes. This is a redrafted version of House Bill 605 from the previous General Assembly, taking into account concerns that the Ohio Attorney General and others have raised regarding the need for sweepstakes parlor or sweepstakes internet café regulation. This version tightens some of the definitions and adds the ability for businesses to obtain a waiver from being labeled a sweepstakes terminal device facility for their customer reward programs.
House Bill 8 (Roegner, Kunze) – Working to ensure safer schools. The provisions of this legislation will be drafted based on interested party input during the committee process. It will incorporate research and suggestions brought forth by the public.
House Bill 9 (Stautberg) – Commercial foreclosure updates. This bill adds to and clarifies the powers of a receiver (someone who, in the case of commercial foreclosure, is appointed by the court to serve as a caretaker of the real property) and enables a receiver to sell real property by modifying who can be appointed a receiver and what authorizations they have under the law to handle the property for which they are responsible.
House Bill 10 (C. Hagan) – Fiscal Integrity Act. This legislation increases accountability and penalizes wrong-doing from local fiscal officers. It creates a uniform removal provision and due process for county auditors and treasurers, municipal fiscal officers, and township fiscal officers. It also deals with provisions pertaining to dereliction of duty and local government audits.
Page 10 of 203 Leadership Kasich Delivers a Stemwinder
Medicaid Expansion Analysis Governor John Kasich delivered his third State of the State Address before a joint session of the Ohio The “Ohio Medicaid Expansion Study,” a partnership General Assembly at the Veterans Memorial Civic & between the Health Policy Institute of Ohio, the Ohio Convention Center in Lima on Tuesday. It was a State University, Regional Economic Models, Inc., stemwinder of a speech; you can watch it here. and the Urban Institute, has released a policy brief describing the impact of potentially expanding The OMA released a statement saying: “We were eligibility for Medicaid in Ohio. heartened by the Governor’s laser focus on the issues that are essential to creating an environment in which – This brief provides state policymakers with an Ohio manufacturers can succeed issues such as analysis of the impact of a potential Medicaid competitive taxes, accessible and affordable energy, expansion on the state budget, Ohio jobs and infrastructure improvements, upgraded workforce earnings, the number of uninsured in Ohio, and health training and vocational education, and initiatives that care costs for Ohio's employers and consumers. foster innovation and creativity. We applaud the Governor’s commitment to manufacturing as a necessary economic driver.” Read a summary here. 2/28/2013 Special interests are circling the Statehouse to pick MIT: Place Matters apart proposed reforms. Make sure you contact your legislators to urge support for pro-manufacturing Last week MIT released a preview of its Production in reforms. 2/21/2013 the Innovation Economy project. The project focuses on “pathways through which an invention or a new Manufacturing to Fuel Northeast Ohio Economic idea about a product or a way of improving a product Growth or process get made into goods and services for sale in the market.” It aims to create an agenda for public Manufacturing, hard hit over the past two decades, action to strengthen U.S. industry. will outpace the U.S. and accelerate growth in northeast Ohio, according to a recent report prepared Researchers conducted 255 interviews with company by Moody’s Analytics for Team NEO. executives. Of those, 37 were interviews in Ohio. Those interviews sought to “understand From the report: “From 1990 to 2010 there was a strategies for locating innovation, prototyping, pilot significant gap in the growth of manufacturing gross production, test and demonstration, early-stage product between Northeast Ohio and the US. Both the manufacturing and full-scale commercialization in the US and Northeast Ohio grew in the early ‘90s, but United States and abroad.” Northeast Ohio began to lag in the late ‘90s while the US continued to climb. Both Northeast Ohio and the The researchers report: “(W)hat’s held manufacturing US were hit hard by the 2007 recession. Northeast in the United States in the last resort—even as so Ohio manufacturing output is projected to reverse this much turned against it—was the advantage firms gain trend by growing faster than the US over the next from proximity to innovation and proximity to users. decade. The US is projected to grow 33% from 2010 Even in a world linked by big data and instant to 2020, Northeast Ohio is projected to grow 39%.” messaging, the gains from co-location have not disappeared.” “Projections indicate that all of the top ten sectors of Northeast Ohio manufacturing are expected to grow through 2020. Three of the top four sectors – plastics “It’s impossible to understand A note on Germany: and rubber, chemicals and fabricated metal – will the different fates of manufacturing in the U.S. and grow faster than total manufacturing, becoming even Germany without comparing the density and richness more important to the Northeast Ohio economy,” of the resources available in the industrial ecosystem according to Moody’s. 2/18/2013 across much of Germany to the thin and shrinking resources available to U.S. manufacturers across Obama Shout Out to Youngstown NAMII much of our country.”
In the president’s state of the union address last 2/28/2013 The full report is expected in the fall. week, he said, “Last year, we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of- the art lab where new workers are mastering the 3D
Page 11 of 203 printing that has the potential to revolutionize the way have access to the workforce that the 21st-century we make almost everything.” economy demands.
Almost a year ago, President Obama announced the NAM invites all of us to use the document to advance manufacturing among lawmakers and opinion leaders National Network for Manufacturing Innovation and others within our circles. 2/12/2013 (NNMI), with up to fifteen Institutes for Manufacturing Innovation located around the country. These House Manufacturing Task Force Releases Final institutes would bring together industry, universities Report and community colleges, federal agencies, and the states to accelerate innovation by investing in Chairman Kirk Schuring (R-Canton) this week “industrially relevant manufacturing technologies with released the final report of the House 21st broad applications.” The Youngstown National Manufacturing Task Force. The task force's five Additive Manufacturing Innovation Institute (NAMII), Republicans and four Democrats approved the report unanimously. which got legs last August, serves as the proof of concept site. 2/17/2013 The task force produced a comprehensive set of findings from testimony from manufacturing leaders Governor’s Budget Language Released during the latter half of last year: workforce development, research and development, regulation, Last week Governor Kasich unveiled a budget energy, tax, trade, transportation, workers’ proposal full of dramatic changes in the operation and compensation, and recycling. funding of state government. This week his budget took form as a bill, House Bill 59. Concludes the report: “Ohio has one of the strongest manufacturing sectors in the United States and the Read it here. Stay tuned to the OMA Leadership world. It is a large part of our state’s Gross Domestic Briefing, and the OMA policy committees, to engage Product (GDP) and stimulates growth in other sectors in understanding, improving and moving government of our economy. Unfortunately, there has been a reforms forward. 2/12/2013 trend over the years by those outside manufacturing to undermine its importance and improperly characterize it as old and unexciting. The truth is quite Campus Budget Breakdown the contrary.” The Ohio Office of Budget and Management released projected funding levels for Ohio’s colleges and The OMA thanks Speaker Batchelder, Chairman universities in the first year of the governor’s biennial Schuring, and all the members of the task force for budget. The budget proposes a 1.9%, or $33 million, their work and looks forward to achieving policy increase in state share of instruction in fiscal year outcomes that strengthen Ohio’s economic 2014 over the current year for both universities and engine. 2/8/2013 community colleges. FY 2015 projections are not available. 2/11/2013 Governor Decides Math Adds Up to Medicaid Expansion NAM Introduces New Manufacturing Policy Guide Governor Kasich decided to take the Medicaid expansion option in the federal Affordable Care Act. At the end of the analytic day, the financial This week the National Association of Manufacturers benefits to the state and to the poor were just too big (NAM) released its policy priorities in a document to decline. called A Growth Agenda: Four Goals for a Manufacturing Resurgence in America. According to The governor’s decision to extend Medicaid eligibility NAM CEO, Jay Timmons, "This policy blueprint has to adult Ohioans with incomes up to 138 percent of bipartisan appeal and features four central aspirations poverty will increase overall Medicaid appropriations upon which we all can agree." but decrease the state share. Approximately 366,000 Ohioans will become newly eligible for Medicaid, but The four central themes are: 1) The United States will 91,000 Ohioans who are eligible for Medicaid today be the best place in the world to manufacture and will move off the program (they will have the option to attract foreign direct investment; 2) Manufacturers in seek coverage on the new federal Health Insurance the United States will be the world’s leading Exchange). innovators; 3) The United States will expand access to global markets to enable manufacturers to reach These enrollment changes are expected to increase the 95 percent of consumers who live outside our Medicaid spending $500 million in FY 2014 and $1.9 borders; 4) Manufacturers in the United States will billion in FY 2015. However, the state share
Page 12 of 203 decreases $23 million in FY 2014 and $68 million in OMA Follows Critical Legislation – You Can, Too FY 2015 because the state saves from current enrollees leaving the program and the federal The OMA Public Policy staff evaluates every bill that government covers 100 percent of the cost of the is introduced in the Ohio General Assembly. Every newly eligible population. bill that has potential to impact manufacturing
competitiveness is flagged to follow. The expansion, then, will result in $2.4 billion in federal funds coming into the state during the next On OMA’s web page bill tracker, you can see the bills two years to cover those who are newly eligible. The – categorized by issue area – from the 130th General state also expects to net $235 million because of a Assembly which OMA is following, including bill status boost in tax revenue on the activity. and links to bill text and bill analysis. 02/6/2013
NAM CEO Testifies before House Education and The governor’s decision is supported by a broad Workforce Subcommittee coalition of chambers of commerce, health care organizations, and religious and civic groups. It is National Association of Manufacturers (NAM) being trashed by some in the national conservative president and CEO, Jay Timmons, testified this week media. 2/6/2013 before the U.S. House Education and Workforce Subcommittee; the hearing, entitled “Challenges Facing America's Workplaces and Classrooms,” was School District Budget Spreadsheets Released the committee’s first hearing of the new 113th Congress. The Office of Budget and Management released local district breakdowns of Governor Kasich’s school Timmons’ testimony highlighted labor policy, funding proposal. workforce development and immigration in support of The documents lay out school districts’ shares of the manufacturing. $6.2 billion and $6.4 billion in foundation funding for fiscal years 2014 and 2015. Regarding labor, Timmons testified that, “The
National Labor Relations Board’s (NLRB) aggressive See how the governor’s K-12 budget affects your districts, counties and joint vocational agenda threatens jobs and undermines employer– districts. 2/6/2013 employee relations.”
Transportation Budget Includes Turnpike Bonding About aligning education and workforce, Timmons promoted the NAM-endorsed Manufacturing Skills According to a state transportation planning Certification System, a series of nationally portable, commission, road construction financial constraints industry-recognized credentials based specifically on have pushed 21 “critically needed projects” as far employer-identified skills. back as a decade or more from their original start dates. The Kasich administration aims to float $1.5 On immigration, Timmons said, “Manufacturers need billion in turnpike-backed bonds to accelerate these and other transportation infrastructure projects. a functional legal immigration system that efficiently deals with the lack of necessary green cards and The turnpike plan is included in the transportation visas.” 2/6/2013 budget, House Bill 35. The bill is sponsored by Rep. Ross McGregor (R-Springfield). Kasich Unveils K-12 Ed Funding Plan Governor Kasich unveiled his biennial budget for K-12 The availability of these additional highway dollars, education this week. The budget proposes to primarily for use in northern Ohio, will permit the Ohio increase overall spending by 6% in the first year and Department of Transportation to apply its traditional 3% in the second year of the biennium. funding sources to accelerate completion of high- priority projects throughout the rest of the state. The governor aims to reduce financial disparity between high and low wealth districts. No district Infrastructure reinvestment is a priority issue for the would get less money year to year, and the lowest OMA. 2/6/2013 wealth districts would receive the largest funding increases.
Page 13 of 203 Taking a page from the federal Race to the Top D.C. Circuit Invalidates Obama NLRB program, the budget proposes a $300 million Appointments innovation fund from which districts would compete for one-time grants to improve education. The budget On January 25, 2013, in Noel Canning Div. of Noel targets additional money to poor students, elementary Corp. v. NLRB, the U.S. Court of Appeals for the students struggling with reading, gifted students, and District of Columbia held that President Obama’s special needs students. And, the budget expands the availability of private school vouchers for poor recess appointments of three members to the kindergarten children. National Labor Relations Board (NLRB) were invalid and that the NLRB lacks a quorum to issue decisions. In all, the budget proposes to send $7.4 billion in its first year and $7.7 billion in the second year to the According to a brief by OMA Connections Partner, state’s 613 school districts. Taft, when fully staffed, the NLRB has five members. Three members come from the president’s Watch the governor and his team discuss the budget party and two from the opposite party. A quorum in a town hall meeting. 1/31/2013 requires three members. The president can fill NLRB vacancies temporarily by making recess House Introduces Priority Legislation appointments while the Senate is in recess.
Noel Canning This week the Ohio House of Representatives In , the court ruled that the Senate was introduced ten bills it classified as priorities. not in recess on January 4, 2012 when the president made the alleged recess appointments and that the House Bill 1, typically reserved for the body's highest three attempted recess appointments – members priority, will be known as "OhioMeansJobs." Sharon Block (D), Terence Flynn (R) and Richard Griffin (D) – were invalid. The House's description: "This legislation rebrands Ohio’s patchwork of workforce centers, currently The court’s ruling leaves Chairman Mark Gaston referred to as “One-Stops,” as “Ohio Means Jobs _____ County” to ensure consistency, reduce public Pearce (D) alone on the Board without a quorum. If confusion, and connect these centers directly to the court ruling stands, the NLRB could not issue any OhioMeansJobs. It also requires all workforce decisions or rules until the Senate confirms NLRB investment boards to use OhioMeansJobs as the only nominees. The validity of many significant and job matching tool by July 2013 to streamline job- controversial NLRB decisions in the last year would matching services, reduce duplication, and maximize be in doubt. this increasingly important benefit to Ohioans." The Supreme Court will almost certainly address this Other priority House bills involve school safety, issue given its importance. Here's how the NLRB unemployment services, municipal income taxes and 1/29/2013 local government performance measure grants. described the situation. 1/31/2013 Nucor’s Brenda Schultz to Lead Ohio Steel Two Million Ohioans Live in Poverty Council Brenda Schultz, Controller of Nucor Steel Marion, this week was elected as Chairman of the Board and One in six Ohioans, two million people, live in poverty, President of the Ohio Steel Council. She has served according to a new report from the Ohio Association as treasurer of the council, which was created in 2011 of Community Action Agencies. Ohio’s poverty rate of to serve as the voice of Ohio’s strong steel industry. 16.4 percent exceeds the national average of 15.9 percent. Poverty in the state has increased by 57.7 percent since 1999. Schultz steps into the shoes of Sal Miraglia, President, Steel Business, The Timken Company. Miraglia is retiring after a long and An Ohio manufacturing resurgence, and Ohio’s shale distinguished career at Timken, where he worked for gas development, offer hope for helping Ohioans in poverty get out of it, says the association’s executive 40 years and 8 months. He was the founding Chairman and President of the council. director, Phil Cole. 1/31/2013
Congratulations, Brenda and Sal!
Sal said this week's Monday was his last Monday, not just in work but in his life: All the weeks in his future will be six Saturdays and one Sunday! 12/20/2012
Page 14 of 203 company exported $660 million worth of products from the United States to emerging markets. NAM Works to Avert Port Labor Strike “We have had to change the markets that we serve, National Association of Manufacturers (NAM) we’ve had to change the products we’ve served, President and CEO Jay Timmons issued this we’ve had to change the geographies we’ve served— statement regarding the labor talks between the and that’s required a radical change in the human International Longshoremen’s Association (ILA) and face of the company,” Griffith says. the United States Maritime Alliance (USMX): Timken’s journey is a microcosm of the dynamics and “A labor strike of the East and Gulf Coast ports would risk-and-reward opportunities facing manufacturers of be a devastating blow to manufacturing supply chains all stripes in a new manufacturing era marked by the and halt exports of U.S.-manufactured goods. This surging growth of emerging markets and their middle- spells bad news for manufacturers and the millions of class consumer base.” men and women who work directly in manufacturing and heavily depend on trade to remain competitive Watch the McKinsey video interview of Jim and to support jobs. here. 12/17/201
While there is no good time for a strike along our Judge French Appointed to Ohio Supreme Court nation’s ports, the economic damage could be even On Thursday, Governor Kasich appointed Judge more profound as we face the uncertainty of the fiscal Judi French of the Tenth District Court of Appeals to cliff. In the event of a strike, the NAM urges President the Ohio Supreme Court. Judge French replaces Justice Evelyn Lundberg Stratton, who is stepping Obama to invoke provisions under the Taft-Hartley down at the end of the year. Judge French has been Act. The President has appointed a federal mediator, an appeals court judge since 2004. and we are urging both sides to come to a resolution Judge French is well-known to the OMA. She will as quickly as possible to avoid further damage to our make an excellent justice. 12/20/2012 economy and to protect our exports.”
NAM's Joe Trauger urges manufacturers to share with Comeback: Why the Future of Industry is in him any information about the impacts to your America company from this labor uncertainty, such as The Atlantic’s cover story this month describes “The anticipated costs of holding additional inventory, Insourcing Boom” that is just starting and holds great diverting cargo, lost opportunities and other promise for the U.S. and Ohio economy. impacts. The strike threatens to halt all containerized and roll-on/roll-off cargo processed at East and Gulf The magazine uses General Electric’s Appliance Park Coast Ports. According to the Journal of Commerce, in Louisville as its feature: “After years of offshore bulk, break-bulk, cruise and military ships covered by production, General Electric is moving much of its far- local ILA agreements would not be flung appliance-manufacturing operations back impacted. 12/19/2012 home. It is not alone. An exploration of the startling, sustainable, just-getting-started return of industry to Manufacturing’s New Era the United States.”
New from the McKinsey Global Institute: A big reason for the insourcing boom is today’s short cycle product life and the need for quick and nimble “Timken, the iconic manufacturer of bearings, came product innovation: “In fact, insourcing solves a into being in the era of Henry Ford and the birth of the whole bundle of problems—it simplifies transportation; it gives people confidence in the competitive security US automobile industry. For much of the company’s of their ideas; it lets companies manage costs with 113-year history, it made a single product. But in the real transparency and close to home; it means a past ten years, under CEO James Griffith, Timken company can be as nimble as it wants to be, because the Pacific Ocean isn’t standing in the way of getting has transformed itself into a $5 billion diversified the right product to the right customer.” 12/17/2012 industrial corporation and built virtually all its new plant capacity in Asia, and in the last year the
Page 15 of 203 Directors Elected to OMA Board growth in future revenues, due to restrictions incorporated into the OTC’s bond trust indenture, which calculates bonding capacity based on the At its quarterly meeting this week, the OMA board of previous year’s net available revenue. By revising directors elected two new directors. such restrictions, the OTC may create additional borrowing capacity.” 12/13/2012 Jane Neal is senior vice president and general manager of AMG Vanadium in Cambridge. Jane has a degree in metallurgical engineering form The Ohio General Assembly Completes Work: Heads Home State University and an MBA from West Virginia th The 129 General Assembly completed business this University. Her extensive career in the metals week marking the end of the two-year legislative industry includes positions with both Weirton Steel session, and will go sine die next week after Corp., Weirton, WV, and Nucor Steel, Crawfordsville, Tuesday's non voting session. Dozens of bills were IN. advanced in the weeks since the November election, although only a few impacted OMA priorities. Therr Nowlin is the general manager of Nucor Steel, Marion, Inc. He holds a B.A. in psychology and An amendment was added to concealed carry criminal justice from the University of legislation House Bill 495 to authorize firearms to be Tennessee. Therr's extensive career with Nucor carried in the Statehouse parking garages; House Bill includes positions at its facilities in Berkeley, SC, 510 was enacted to modernize taxation on financial Hertford, NC, Decatur, IL and Tuscaloosa, AL as well institutions including finance arms of some large as Marion. manufacturers; House Bill 601 would have imposed standard definitions and practices on municipal OMA chairman Rick Schostek, Senior Vice President, income tax codes but failed to gain any traction due to Honda of America Manufacturing, said, "The diverse strong opposition from local government groups and experience and talent on the OMA board is sympathetic lawmakers. remarkable. It is a benefit to all Ohio manufacturers. The organization is so pleased to add Also: Republican sponsored health care mandate Jane and Therr to the OMA's leadership legislation requiring coverage of autism treatment body." 12/12/2012 (House Bill 598 and Senate Bill 381) stalled but looks poised for passage early next session; a resolution to Right to Work Not Governor Kasich's Priority revise the process of legislative redistricting cleared As lawmakers in Michigan enacted right-to-work the Ohio Senate but died without House action; a lobbying reform ethics bill (Senate Bill 391) was legislation, some Ohio political and business leaders th offered reaction. Responding to media inquiries finished by the Senate but not the House. The 130 about similar legislation in Ohio in 2013, Governor General Assembly will convene in early January. 12/13/2012 John Kasich indicated that right to work is not a priority for his administration at this time. Echoing the governor were leaders of Ohio’s metro chambers of commerce. Meanwhile an organization known as Brown and Portman Team Up on Steel Pipe Ohioans for Workplace Freedom is collecting Dumping signatures to push a constitutional amendment to U.S. Senators Sherrod Brown and Rob Portman this enact right-to-work in 2013. Subscribe to OMA's week led a group of senators in urging “ the Government Affairs Community to follow this issue in Department of Commerce to maintain the scope of 2013. 12/13/2012 antidumping (AD) and countervailing duty (CVD) orders on oil country tubular goods (OCTG) from China, and extend all efforts within your authority to Governor Proposes $1.5 Billion Turnpike Bonds prevent circumvention and evasion of these orders Governor Kasich this week proposed floating $1.5 which have provided relief to the U.S. industry and billion in bonds secured by future toll revenue from American workers hurt by dumped and subsidized OCTG imports from China.” the Ohio Turnpike. This proposal comes after a year- long study of the 241 mile long roadway by KPMG. The strongly pro-manufacturing Ohio senators wrote: “Unfortunately, these orders have been Ninety percent of the bond revenue would be used for undermined by a variety of schemes designed to road and bridge projects in northern Ohio. The weaken them. These efforts include outright evasion turnpike would remain an asset of a renamed Ohio and circumvention of the orders as well as less Turnpike and Infrastructure Commission. obvious but equally harmful attempts to narrow their scope. If successful, these ploys will enable Chinese KPMG summarizes how this new bonding revenue companies to dump massive quantities of subsidized can be raised: “Currently, the OTC (Ohio Turnpike Chinese OCTG into the United States without paying Commission) is not permitted to leverage the forecast
Page 16 of 203 the AD and CVD duties that they rightfully owe. The consequences are significant. Chinese actions will The task force heard from a panel of manufacturing result in further injury to the thousands of American leaders: representing Ohio’s aviation/aerospace workers and businesses as well as the weakening of manufacturing, Bob McEwan, General Manager, New U.S. trade law.” 12/13/2012 Product Introduction Value Stream, GE Aviation; representing the state’s food manufacturing, Bill Tom, Farm Service Group Leader, Cargill Manufacturing the Future AgHorizons; and representing Ohio consumer products manufacturing, Nick Nikolaides, Open McKinsey & Company recently released Innovation Manager, Global Academia, Procter & Gamble. “Manufacturing the future: The next era of global growth and innovation,” which finds manufacturing is Another panel presented on the state’s manufacturing “entering a dynamic new phase.” assistance programs: Rich Spivey, Senior Manager, Honda of America Mfg., Inc. (and more), and “By 2025, a new global consuming class will have Executive Director, Ohio Manufacturing Institute, The emerged, and the majority of consumption will take Ohio State University; Dan Berry, President and place in developing economies. This will create rich CEO, MAGNET; Alan Schultice, Technical Service new market opportunities. Meanwhile, in established Manager, Venture Plastics; Bruce Broxterman, markets, demand is fragmenting as customers ask for President, Richards Industry; Gary Conley, President greater variation and more types of after-sales and CEO, TechSolve. Here is this group's testimony service. A rich pipeline of innovations in materials and and presentation. processes—from nanomaterials to 3-D printing to advanced robotics—also promises to create fresh Finally, Ohio EPA Director Scott Nally discussed demand and drive further productivity gains across environmental regulations affecting Ohio’s industrial manufacturing industries and geographies,” McKinsey economy. 12/6/2012 finds.
Against these opportunities is “an extremely Asbestos Legislation Clears Latest Hurdle challenging environment. In some low-cost labor House Bill 380, legislation to prevent damages from being awarded twice for the same (asbestos markets, wage rates are rising rapidly. Volatile exposure) injury, will soon be presented to the resource prices, a looming shortage of highly skilled governor to sign into law. This week the Ohio Senate talent, and heightened supply-chain and regulatory voted the measure out of committee and off the Senate floor 19 to 14. Four Republicans (Hughes, risks create an environment that is far more uncertain LaRose, Manning, Oelslager) joined with Democrat than it was before the Great Recession.” 12/10/2012 senators in voting against the bill. The OMA supports HB 380 and had reported on this legislation to members. 12/6/2012
GE Hosts Ohio House Manufacturing Task Force Ohio House 21st Century Task Force on Manufacturing Marches On
GE Aviation hosted the final regional hearing of the st Ohio House 21 Century Manufacturing Task Force in Cincinnati today. This is the seventh in a series of regional hearings. Final public testimony will be taken by the task force next Tuesday in the Statehouse. This week, the intrepid Ohio House task force visited OMA member, Lincoln Electric, Cleveland, to continue Pictured: Jamie Regg, GE Aviation its education about and study of Ohio manufacturing.
Page 17 of 203 This was its sixth in a series of seven onsite public Speaking to the important Ohio competitiveness topic hearings hosted by manufacturing firms. of workers’ compensation, a panel of subject matter experts included: Stephen Buehrer, Administrator, (Pictured: John Stropki, Chairman, President & Chief Ohio Bureau of Workers’ Compensation (BWC); Executive Officer, The Lincoln Electric Company) Cathy Duhigg Gannon, Senior Manager Workers’ Compensation, Eaton Corporation; and Dave Johnson, CEO, Summitville Tile and BWC board Public Utilities Commission of Ohio Chairman, Todd member. Snitchler, presented a picture of the current state of electricity deregulation in Ohio. The next hearing of the Task Force will be held at the Sharonville City Hall on December 7. The public A panel of manufacturing executives spoke to their hearing begins at 1:00pm. Members are invited to industries’ and their companies’ Ohio strengths and attend. 11/28/2012 competitive requirements; the panel included Michele Kuhrt, Vice President Corporate Tax, Lincoln Electric; Brian Edwards, General Manager, Eaton Aerospace Engine Fuel Systems; and Joe Starck, President, The Great Lakes Towing Company. 130th General Assembly Leaders Elected
This week members of the Ohio House and Ohio Senate majority caucuses elected their leaders for the 130th General Assembly that will begin in January.
Republican Keith Faber (R-Celina) was elected Senate president and will lead the 33-member Ohio Senate. Senator Chris Widener (R-Springfield) was elected president pro tempore. Senator Tom Patton (R-Strongsville) will remain as majority floor leader and Senator Larry Obhof (R-Medina) will become majority whip. Senate Democrats re-elected Senator Eric Kearney (D-Cincinnati) as minority leader.
Across the Rotunda, House Republicans re-elected William Batchleder (R-Medina) as speaker of the House. Rep. Matt Huffman (R-Lima) was elected speaker pro tempore, Rep. Barbara Sears (Sylvania) as majority floor leader, Rep. John Adams (R-Sidney) as assistant majority floor leader, Rep. Cheryl Grossman (R-Grove City) as majority whip, and Rep. Jim Buchy (R-Greenville) as assistant majority whip. House Democrats also selected their leaders re-electing Armond Budish (D-Beachwood) as minority leader. 11/30/2012
Thrive in Ohio Campaign
JobsOhio has implemented an advertising campaign touting Ohio’s job growth. The goal of the campaign is to highlight Ohio as a place where jobs can be found and businesses can grow. The Thrive in Ohio campaign ads appear in various media throughout multiple states. Here's a short commercial. 11/29/2012
Page 18 of 203 Miscellaneous Legislation of Interest to Manufactuers Prepared by: The Ohio Manufacturers' Association Report created on March 3, 2013
HB4 LOCAL GOVERNMENT PERFORMANCE MEASUREMENT GRANT PROGRAM (STAUTBERG P, BLESSING III L) To establish the Local Government Performance Measurement Grant Program. Current Status: 1/30/2013 - Referred to Committee House State and Local
Government All Bill Status: 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_4
HB9 RECEIVER'S POWERS (STAUTBERG P) To add to and clarify the powers of a receiver and to provide a procedure for a receiver's sale of real property. Current Status: 3/6/2013 - House Judiciary, (Third Hearing) All Bill Status: 2/27/2013 - House Judiciary, (Second Hearing) 2/6/2013 - House Judiciary, (First Hearing)
1/30/2013 - Referred to Committee House Judiciary 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_9
HB13 PROVISIONAL BALLOTS (REECE A) To require a provisional ballot to be remade and counted for the offices, questions, and issues for which the provisional voter was eligible to vote, if the election official assisting that provisional voter failed to direct the provisional voter to the correct precinct, and to revise the portion of the provisional ballot affirmation required to be completed by the election official. Current Status: 1/30/2013 - Referred to Committee House Policy and Legislative
Oversight All Bill Status: 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_13
HB17 LOCAL GOVERNMENT FUND (CERA J, GERBERRY R) To require that, for fiscal year 2014 and each fiscal year thereafter, the Local Government Fund must receive the same proportion of state tax revenue that the Fund received in fiscal year 2005. Current Status: 1/30/2013 - Referred to Committee House Finance and
Appropriations All Bill Status: 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_17
HB20 FINANCIAL RESPONSIBILITY PROOF (STINZIANO M) To permit a person to present proof of financial responsibility to the Registrar of Motor Vehicles, a peace officer, a traffic violations bureau, or a court through use of an electronic wireless communications device. Current Status: 2/12/2013 - House Transportation, Public Safety and Homeland
Security, (First Hearing) All Bill Status: 1/30/2013 - Referred to Committee House Transportation, Public Safety and Homeland Security 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_20
HB21 VOTING PROCESS-HEALTH CARE ISOLATION ELECTOR (STEBELTON G) To establish
Page 19 of 203 a process to permit an elector who is confined to a health care facility under isolation to vote with the assistance of bipartisan board of elections employees, and to permit the elector's facsimile signature, provided by the hospital, to be used for signature verification purposes. Current Status: 2/26/2013 - House Policy and Legislative Oversight, (First
Hearing) All Bill Status: 1/30/2013 - Referred to Committee House Policy and Legislative Oversight 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_21
HB35 TRANSPORTATION BUDGET (MCGREGOR R) To make appropriations for programs related to transportation and public safety for the biennium beginning July 1, 2013, and ending June 30, 2015, and to provide authorization and conditions for the operation of those programs. Current Status: 3/7/2013 - Senate Transportation, (Fifth Hearing) All Bill Status: 3/6/2013 - Senate Transportation, (Fourth Hearing) 3/5/2013 - Senate Transportation, (Third Hearing) 2/28/2013 - PASSED BY HOUSE; Vote 62-32 2/28/2013 - Bills for Third Consideration 2/28/2013 - Senate Transportation, (Second Hearing) 2/27/2013 - REPORTED OUT AS AMENDED, House Finance and Appropriations, (Fifth Hearing) 2/26/2013 - SUBSTITUTE BILL ACCEPTED, House Finance and Appropriations, (Fourth Hearing) 2/26/2013 - Senate Transportation, (First Hearing) 2/20/2013 - House Finance and Appropriations, (Third Hearing) 2/19/2013 - House Finance and Appropriations, (Second Hearing) 2/15/2013 - House Transportation Subcommittee, (Fourth Hearing) 2/13/2013 - House Transportation Subcommittee, (Third Hearing) 2/11/2013 - House Transportation Subcommittee, (Second Hearing) 2/7/2013 - House Transportation Subcommittee, (First Hearing) 2/6/2013 - Referred to Committee House Finance and Appropriations 2/6/2013 - SUBSTITUTE BILL ACCEPTED, House Finance and Appropriations, (First Hearing) 2/5/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_35
HB38 OHIO TURNPIKE COMMISSION TRANSPORTATION BUDGET (MCGREGOR R) To authorize the Ohio Turnpike Commission to issue revenue bonds for infrastructure projects, to rename the Ohio Turnpike Commission as the Ohio Turnpike and Infrastructure Commission, to repeal authority allowing the Director of Budget and Management and the Director of Transportation to execute a contract with a private entity for the purpose of outsourcing turnpike-related highway services, to make other changes in the law governing the Ohio Turnpike Commission, and to make an appropriation. Current Status: 2/6/2013 - Referred to Committee House Finance and
Appropriations
Page 20 of 203 All Bill Status: 2/6/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_38
HB48 POLITICAL CONTRIBUTIONS (MILKOVICH Z) To change the age at which an individual may make a political contribution, to reduce the amount of political contributions that may be made by a contributor, and to similarly reduce the amount of contributions that political entities may accept. Current Status: 2/13/2013 - Referred to Committee House Policy and Legislative
Oversight All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_48
HB51 OHIO TURNPIKE COMMISSION (MCGREGOR R, PATMON B) To authorize the Ohio Turnpike Commission to issue revenue bonds for infrastructure projects, to rename the Ohio Turnpike Commission as the Ohio Turnpike and Infrastructure Commission, to repeal authority allowing the Director of Budget and Management and the Director of Transportation to execute a contract with a private entity for the purpose of outsourcing turnpike-related highway services, to make other changes in the law governing the Ohio Turnpike Commission, and to make an appropriation. Current Status: 3/7/2013 - Senate Transportation, (Fourth Hearing) All Bill Status: 3/6/2013 - Senate Transportation, (Third Hearing) 3/5/2013 - Senate Transportation, (Second Hearing) 2/28/2013 - PASSED BY HOUSE; Vote 58-36 Bill Amended on Floor 2/28/2013 - Bills for Third Consideration 2/27/2013 - REPORTED OUT, House Finance and Appropriations, (Fourth Hearing) 2/26/2013 - House Finance and Appropriations, (Third Hearing) 2/26/2013 - Senate Transportation, (First Hearing)
2/20/2013 - House Finance and Appropriations, (Second Hearing) 2/19/2013 - House Finance and Appropriations, (First Hearing) 2/15/2013 - House Transportation Subcommittee, (Second Hearing) 2/14/2013 - House Transportation Subcommittee, (First Hearing) 2/13/2013 - Referred to Committee House Finance and Appropriations 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_51
HB59 BIENNIAL BUDGET (AMSTUTZ R) To make operating appropriations for the biennium beginning July 1, 2013, and ending June 30, 2015; to provide authorization and conditions for the operation of state programs. Current Status: 3/8/2013 - House Primary and Secondary Education
Subcommittee, (Ninth Hearing) All Bill Status: 3/7/2013 - House Health and Human Services Subcommittee, (Sixth Hearing) 3/7/2013 - , (Fourth Hearing)
3/7/2013 - House Higher Education Subcommittee, (Eighth Hearing) 3/7/2013 - House Transportation Subcommittee, (Eighth
Page 21 of 203 Hearing) 3/7/2013 - House Agriculture and Development Subcommittee, (Sixth Hearing) 3/7/2013 - House Primary and Secondary Education Subcommittee, (Eighth Hearing) 3/6/2013 - House Health and Human Services Subcommittee, (Fifth Hearing) 3/6/2013 - , (Third Hearing) 3/6/2013 - House Higher Education Subcommittee, (Seventh Hearing) 3/6/2013 - House Transportation Subcommittee, (Seventh Hearing) 3/6/2013 - House Agriculture and Development Subcommittee, (Fifth Hearing) 3/6/2013 - House Primary and Secondary Education Subcommittee, (Seventh Hearing) 3/5/2013 - Senate Ways and Means, (First Hearing) 3/5/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 3/5/2013 - , (Second Hearing) 3/5/2013 - House Higher Education Subcommittee, (Sixth Hearing) 3/5/2013 - House Transportation Subcommittee, (Sixth Hearing) 3/5/2013 - House Agriculture and Development Subcommittee, (Fourth Hearing) 3/5/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 3/1/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 2/28/2013 - , (Second Hearing) 2/28/2013 - House Primary and Secondary Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Agriculture and Development Subcommittee, (Third Hearing) 2/28/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/28/2013 - House Higher Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Transportation Subcommittee, (Fifth Hearing) 2/27/2013 - House Ways and Means, (First Hearing) 2/27/2013 - House Agriculture and Development Subcommittee, (Second Hearing) 2/27/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 2/27/2013 - House Transportation Subcommittee, (Fourth Hearing) 2/27/2013 - House Higher Education Subcommittee, (Fourth Hearing) 2/26/2013 - House Primary and Secondary Education Subcommittee, (Third Hearing) 2/26/2013 - House Agriculture and Development Subcommittee, (First Hearing) 2/26/2013 - House Health and Human Services Subcommittee,
Page 22 of 203 (Third Hearing) 2/26/2013 - House Transportation Subcommittee, (Third Hearing) 2/26/2013 - House Higher Education Subcommittee, (Third Hearing) 2/21/2013 - House Higher Education Subcommittee, (Second Hearing) 2/21/2013 - House Health and Human Services Subcommittee, (Second Hearing) 2/21/2013 - House Transportation Subcommittee, (Second Hearing) 2/21/2013 - House Primary and Secondary Education Subcommittee, (Second Hearing) 2/20/2013 - House Higher Education Subcommittee, (First Hearing) 2/20/2013 - House Health and Human Services Subcommittee, (First Hearing) 2/20/2013 - House Transportation Subcommittee, (First Hearing) 2/20/2013 - House Primary and Secondary Education Subcommittee, (First Hearing) 2/14/2013 - House Finance and Appropriations, (Fourth Hearing) 2/13/2013 - Referred to Committee House Finance and Appropriations 2/13/2013 - House Finance and Appropriations, (Third Hearing) 2/12/2013 - House Finance and Appropriations, (Second Hearing) 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
HB76 INSPECTOR GENERAL'S OFFICE (PILLICH C) To change the appointing process for the Inspector General, to clarify the offices over which the Inspector General has authority, and to prohibit partisan political activity by the Inspector General and employees in the office of the Inspector General. Current Status: 2/27/2013 - Referred to Committee House Policy and Legislative
Oversight All Bill Status: 2/20/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_76
HB77 MANUFACTURING MONTH (DOVILLA M, CELEBREZZE N) To designate October as "Manufacturing Month." Current Status: 2/27/2013 - Referred to Committee House Manufacturing and
Workforce Development All Bill Status: 2/20/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_77
HB78 ONLINE VOTER REGISTRATION SYSTEM (STINZIANO M) To require the Secretary of State to create an online voter registration system and to permit data sharing in order to maintain the statewide voter registration database. Current Status: 2/27/2013 - Referred to Committee House Policy and Legislative
Oversight All Bill Status: 2/26/2013 - Introduced
Page 23 of 203 State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_78
HB82 OHIO'S CIVIL RIGHTS LAW EXEMPTION (HAYES B, BLAIR T) To exempt religious corporations, associations, educational institutions, or societies from the definition of "employer" for the purpose of Ohio's Civil Rights law. Current Status: 3/6/2013 - House Judiciary, (First Hearing) All Bill Status: 2/27/2013 - Referred to Committee House Judiciary
2/26/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_82
HJR2 OHIO CONSTITUTION RIGHT TO VOTE (STINZIANO M) To set forth in the Constitution of the State of Ohio a specific right to vote and requirements attendant thereto. Current Status: 1/30/2013 - Referred to Committee House Policy and Legislative
Oversight All Bill Status: 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HJR_2
HJR4 U.S. CONSTITUTION-AMENDMENTS CONVENTION (RAMOS D) Applying for an amendments convention under Article V of the United States Constitution. Current Status: 2/28/2013 - Introduced All Bill Status:
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HJR_4
SB3 RULE-MAKING REFORM (LAROSE F) To reform rule-making and rule-review procedures and regulatory processes. Current Status: 3/5/2013 - Senate State Government Oversight and Reform,
(Second Hearing) All Bill Status: 2/20/2013 - Senate State Government Oversight and Reform, (First Hearing) 2/13/2013 - Referred to Committee Senate State Government Oversight and Reform 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_3
SB6 TOWNSHIP FISCAL OFFICERS EDUCATION PROGRAMS (SCHAFFER T) To establish education programs and continuing education requirements for the fiscal officers of townships and municipal corporations, to establish procedures for removing those fiscal officers, county treasurers, and county auditors from office, and to create fiscal accountability requirements for public schools, counties, municipal corporations, and townships. Current Status: 2/13/2013 - Referred to Committee Senate Public Safety, Local
Government and Veterans Affairs All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_6
SB10 POLLING PLACES-VOTING MACHINES LAW (COLEY W, SMITH S) To revise the law regarding polling places and voting machines Current Status: 2/27/2013 - PASSED BY SENATE; Vote 32-0 All Bill Status: 2/27/2013 - Bills for Third Consideration
Page 24 of 203 2/27/2013 - REPORTED OUT AS AMENDED, Senate State Government Oversight and Reform, (Third Hearing) 2/26/2013 - Senate State Government Oversight and Reform, (Second Hearing) 2/20/2013 - Senate State Government Oversight and Reform, (First Hearing) 2/13/2013 - Referred to Committee Senate State Government Oversight and Reform 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_10
SB20 ELECTION LAW (TURNER N) To revise the Election Law. Current Status: 2/13/2013 - Referred to Committee Senate State Government
Oversight and Reform All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_20
SB32 PURE FOOD AND DRUG LAW (SCHAFFER T) To exclude manufacturers and distributors of wine and distributors of beer from regulation as food processing establishments under the Pure Food and Drug Law. Current Status: 2/13/2013 - Referred to Committee Senate Agriculture All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_32
SB35 SPECIAL ELECTIONS (JORDAN K) To eliminate the ability to conduct special elections in February and August. Current Status: 2/13/2013 - Referred to Committee Senate State Government
Oversight and Reform All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_35
SB47 ELECTION LAW REVISION (SEITZ B) To revise the Election Law. Current Status: 3/5/2013 - Senate State Government Oversight and Reform,
(Third Hearing) All Bill Status: 2/27/2013 - Senate State Government Oversight and Reform, (Second Hearing) 2/26/2013 - Senate State Government Oversight and Reform, (First Hearing) 2/20/2013 - Referred to Committee Senate State Government Oversight and Reform 2/20/2013 - Senate State Government Oversight and Reform, (First Hearing) 2/19/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_47
SCR2 RESHORING MONTH (BEAGLE B) Declaring March 2013 as Reshoring Month in Ohio. Current Status: 2/27/2013 - ADOPTED BY SENATE; Vote 32-0 All Bill Status: 2/27/2013 - Bills for Third Consideration 2/26/2013 - REPORTED OUT, Senate Workforce and Economic Development, (First Hearing)
Page 25 of 203 2/13/2013 - Referred to Committee Senate Workforce and Economic Development 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SCR_2
SJR1 REDISTRICTING PROCESS (SAWYER T, LAROSE F) To revise the redistricting process for General Assembly and Congressional districts. Current Status: 2/13/2013 - Referred to Committee Senate State Government
Oversight and Reform All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SJR_1
Page 26 of 203 OHIO SENATE LEADERSHIP 130TH GENERAL ASSEMBLY
Majority Leadership Senate President - Keith Faber (R-Celina) Second Term President Pro Tempore - Chris Widener (R-Springfield) Second Term Majority Floor Leader - Tom Patton (R-Strongsville) Second Term Majority Whip - Larry Obhof (R-Medina) First Term
Minority Leadership Minority Leader - Eric Kearney (D-Cincinnati) Second Term Assistant Minority Leader - Joe Schiavoni (D-Youngstown) First Term Minority Whip - Nina Turner (D-Cleveland) First Term Assistant Minority Whip - Edna Brown (D-Toledo) First Term
OHIO HOUSE OF REPRESENTATIVES LEADERSHIP 130TH GENERAL ASSEMBLY
Majority Leadership Speaker of the House - William G. Batchelder (R-Medina) Fourth Term Speaker Pro Tempore - Matt Huffman (R-Lima) Fourth Term Majority Floor Leader - Barbara R. Sears (R-Monclova Township) Third Term Assistant Majority Floor Leader - John Adams (R-Sidney) Fourth Term Majority Whip - Cheryl L. Grossman (R-Grove City) Third Term Assistant Majority Whip - Jim Buchy (R-Greenville) Second Term
Minority Leadership Minority Leader - Armond Budish (D-Beachwood) Fourth Term Assistant Minority Leader - Matt Szollosi (D-Toledo) Fourth Term Minority Whip - Tracy Maxwell Heard (D-Columbus) Fourth Term Assistant Minority Whip - Debbie Phillips (D-Athens) Third Term
Page 27 of 203 HOUSE OF REPRESENTATIVES STANDING COMMITTEES OF THE 130TH GENERAL ASSEMBLY
Agriculture & Natural Resources Chair: Rep. Dave Hall (R-Millersburg) | Vice Chair: Rep. Andy Thompson (R-Marietta) Ranking Member: Rep. Jack Cera (D-Bellaire)
Commerce, Labor & Technology Chair: Rep. Ron Young (R-Leroy) | Vice Chair: Rep. Mike Duffey (R-Worthington) Ranking Member: Rep. B. Hagan (D-Youngstown)
Economic Development & Regulatory Reform Chair: Rep. Nan Baker (R-Westlake) | Vice Chair: Rep. Lou Terhar (R-Cincinnati) Ranking Member: Rep. Denise Driehaus (D-Cincinnati)
Education Chair: Rep. Gerald Stebleton (R-Lancaster) | Vice Chair: Rep. Andy Brenner (R-Powell) Ranking Member: Rep. Teresa Fedor (D-Toledo)
Finance & Appropriations Chair: Rep. Ron Amstutz (R-Wooster) | Vice Chair: Jeff McClain (R-Upper Sandusky) Ranking Member: Rep. Vernon Sykes (D-Akron)
Finance: Agriculture & Development Subcommittee Chair: Rep. Tim Derickson (R-Oxford) | Ranking Member: Rep. Mike Ashford (D-Toledo)
Finance: Health & Human Services Subcommittee Chair: Rep. Anne Gonzales (R-Westerville) | Ranking Member: Rep. Mike Foley (D- Cleveland)
Finance: Higher Education Subcommittee Chair: Rep. Cliff Rosenberger (R-Clarksville) | Ranking Member: Rep. Dan Ramos (D- Lorain)
Finance: Primary & Secondary Education Subcommittee Chair: Rep. Bill Hayes (R-Harrison Township) | Ranking Member: Rep. Matt Lundy (D- Elyria)
Finance: Transportation Subcommittee Chair: Rep. Ross McGregor (R-Springfield) | Ranking Member: Rep. Alicia Reese (D- Cincinnati)
Financial Institutions, Housing & Urban Development Chair: Rep. Dick Adams (R-Troy) | Vice Chair: Rep. Jay Hottinger (R-Newark) Ranking Member: Rep. Kevin Boyce (D-Columbus)
Health & Aging Chair: Rep. Lynn Wachtmann (R-Napoleon) | Vice Chair: Anne Gonzales Ranking Member: Rep. Mike Foley
Page 28 of 203
Insurance Chair: Rep. Bob Hackett (R-London) | Vice Chair: Rep. Mike Henne (R-Clayton) Ranking Member: Rep. John Carney (D-Columbus)
Judiciary Chair: Rep. Jim Butler (R-Oakwood) | Vice Chair: Rep. Dorothy Pelanda (R-Marysville) Ranking Member: Rep. Michael Stinziano (D-Columbus)
Manufacturing & Workforce Development Chair: Rep. Kirk Schuring (R-Canton) | Vice Chair: Rep. Mark Romanchuk (R-Mansfield) Ranking Member: Rep. Ronald Winburn (D-Dayton)
Military & Veterans’ Affairs Chair: Rep. Terry Johnson (R-McDermott) | Vice Chair: Rep. Al Landis (R-Dover) Ranking Member: Rep. Connie Pillich (D-Cincinnati)
Policy & Legislative Oversight Chair: Rep. Mike Dovilla (R-Berea) | Vice Chair: Rep. Jim Buchy (R-Greenville) Ranking Member: Rep. Ron Gerberry (D-Austintown)
Public Utilities Chair: Rep. Peter Stautberg (R-Cincinnati) | Vice Chair: Rep. Kristina Roegner (R-Hudson) Ranking Member: Rep. Sandra Williams (D-Cleveland)
Rules & Reference Chair: Rep. Matt Huffman (R-Lima) | Vice Chair: Speaker Batchelder (R-Medina) Ranking Member: Rep. Budish (D-Beachwood)
State & Local Government Chair: Rep. Terry Blair (R-Washington Township) | Vice Chair: Rep. Marlene Anielski (R- Walton Hills) Ranking Member: Rep. Kathleen Clyde (D-Kent)
State & Local Government Subcommittee on Shared Services and Government Efficiency Chair: Rep. Ron Maag (R-Lebanon) | Ranking Member: Rep. Stephen Slesnick (D-Canton)
Transportation, Public Safety & Homeland Security Chair: Rep. Rex Damschroder (R-Fremont) | Vice Chair: Rep. Margaret Ann Ruhl (R-Mt. Vernon) Ranking Member: Rep. Dale Mallory (D-Cincinnati)
Ways & Means Chair: Rep. Peter Beck (R-Mason) | Vice Chair: Rep. Terry Boose (R-Norwalk) Ranking Member: Rep. Tom Letson (D-Warren)
Page 29 of 203 SENATE STANDING COMMITTEES OF THE 130TH GENERAL ASSEMBLY
Agriculture Chair: Sen. Cliff Hite (R-Findlay) | Vice Chair: Sen. Troy Balderson (R-Zanesville) Ranking Member: Sen. Lou Gentile (D-Steubenville)
Energy & Natural Resources Chair: Sen. Troy Balderson | Vice Chair: Sen. Kris Jordan (R-Ostrander) Ranking Member: Sen. Joe Schiavoni (D-Youngstown)
Public Utilities Chair: Sen. Bill Seitz (R-Cincinnati) | Vice Chair: Sen. Frank LaRose (R-Copley) Ranking Member: Sen. Lou Gentile
Workforce & Economic Development Chair: Sen. Bill Beagle (R-Tipp City) | Vice Chair: Sen. Gayle Manning (R-North Ridgeville) Ranking Member: Sen. Charleta Tavares (D-Columbus)
Transportation Chair: Sen. Gayle Manning | Vice Chair: Sen. Tom Patton (R-Strongsville) Ranking Member: Sen. Capri Cafaro (D-Hubbard)
Public Safety, Local Government & Veterans Affairs Chair: Sen. Frank LaRose | Vice Chair: Sen. Jim Hughes (R-Columbus) Ranking Member: Sen. Lou Gentile
State Government Oversight & Reform Chair: Sen. David Burke (R-Marysville) | Vice Chair: Sen. Joe Uecker (R-Miami Township) Ranking Member: Sen. Shirley Smith (D-Cleveland)
Criminal Justice Chair: Sen. John Eklund (R-Munson Township) | Vice Chair: Sen. Bill Seitz Ranking Member: Sen. Joe Schiavoni
Civil Justice Chair: Sen. Bill Coley (R-Liberty Township) | Vice Chair: Sen. Larry Obhof (R-Medina) Ranking Member: Sen. Edna Brown (D-Toledo)
Commerce & Labor Chair: Sen. Kevin Bacon (R-Minerva Park) | Vice Chair: Sen. John Eklund Ranking Member: Sen. Edna Brown
Ways & Means Chair: Sen. Tim Schaffer (R-Lancaster) | Vice Chair: Sen. Bob Peterson (R-Sabina)
Page 30 of 203 Ranking Member: Sen. Charleta Tavares
Medicaid, Health & Human Services Chair: Sen. Shannon Jones (R-Springboro) | Vice Chair: Sen. David Burke Ranking Member: Sen. Capri Cafaro
Insurance & Financial Institutions Chair: Sen. Jim Hughes | Vice Chair: Sen. Kevin Bacon Ranking Member: Sen. Nina Turner (D-Cleveland)
Rules Chair: Sen. Keith Faber (R-Celina) | Vice Chair: Sen. Chris Widener (R-Springfield) Ranking Member: Sen. Eric Kearney (D-Cincinnati)
Reference Chair: Sen. Kris Jordan | Vice Chair: Sen. Scott Oelslager (R-North Canton) Ranking Member: Sen. Eric Kearney
Finance Chair: Sen. Scott Oelslager | Vice Chair: Sen. Bill Coley Ranking Member: Sen. Tom Sawyer (D-Akron)
Finance: Education Subcommittee Chair: Sen. Randy Gardner (R-Bowling Green) | Vice Chair: Sen. Peggy Lehner Ranking Member: Sen. Nina Turner
Finance: General Government Subcommittee Chair: Sen. Bob Peterson | Vice Chair: Sen. Tim Schaffer Ranking Member: Sen. Joe Schiavoni
Finance: Medicaid Subcommittee Chair: Sen. David Burke | Vice Chair: Sen. Shannon Jones Ranking Member: Sen. Capri Cafaro
Page 31 of 203 Session Schedule March 2013 Senate House Tue. Mar 05 Session at 1:30 p.m.
Wed. Mar 06 Session at 1:30 p.m. Session at 1:00 p.m. Tue. Mar 12 Session at 1:30 p.m.
Wed. Mar 13 Session at 1:30 p.m. Session at 1:00 p.m. Tue. Mar 19 Session at 1:30 p.m. Session at 11:00 a.m. Wed. Mar 20 Session at 1:30 p.m. Session at 1:00 p.m. Thu. Mar 21 Session at 1:00 p.m.
April 2013 Senate House Tue. Apr 09 Session at 1:30 p.m.
Wed. Apr 10 Session at 1:30 p.m. Session at 1:00 p.m. Tue. Apr 16 Session at 1:30 p.m.
Wed. Apr 17 Session at 1:30 p.m. Session at 1:00 p.m. Thu. Apr 18 Session at 1:00 p.m.
Tue. Apr 23 Session at 1:30 p.m.
Wed. Apr 24 Session at 1:30 p.m. Session at 1:00 p.m. Tue. Apr 30 Session at 1:30 p.m. Session at 11:00 a.m. May 2013 Senate House Wed. May 01 Session at 1:30 p.m. Session (if needed) Tue. May 07 Session at 1:30 p.m.
Wed. May 08 Session at 1:30 p.m. Session at 1:00 p.m. Tue. May 14 Session at 1:30 p.m.
Wed. May 15 Session at 1:30 p.m. Session at 1:00 p.m. Tue. May 21 Session at 1:30 p.m. Session at 11:00 a.m. Wed. May 22 Session at 1:30 p.m. Session at 1:00 p.m. Wed. May 29 Session at 1:30 p.m. Session at 1:00 p.m. Thu. May 30 Session at 11:00 a.m.
June 2013 Senate House Tue. Jun 04 Session at 1:30 p.m. Session at 11:00 a.m. Wed. Jun 05 Session at 1:30 p.m. Session at 1:00 p.m. Thu. Jun 06 Session (if needed)
Tue. Jun 11 Session at 1:30 p.m.
Wed. Jun 12 Session at 1:30 p.m. Session at 1:00 p.m. Thu. Jun 13 Session (if needed)
Tue. Jun 18 Session at 1:30 p.m. Session at 11:00 a.m. Wed. Jun 19 Session at 1:30 p.m. Session at 1:00 p.m. Thu. Jun 20 Session at 11:00 a.m. Session (if needed) Tue. Jun 25 Session at 1:30 p.m. Session at 11:00 a.m. Wed. Jun 26 Session at 1:30 p.m. Session at 1:00 p.m. Thu. Jun 27 Session at 11:00 a.m. Session (if needed) July 2013 Senate House Tue. Jul 09 Session (if needed)
Wed. Jul 10 Session (if needed)
Page 32 of 203 HOUSE COMMITTEES (continued) JOINT COMMITTEES OHIO SENATE Senate Office Bldg., Columbus, Ohio 43215 Judiciary (R8/D5), Clerk: 4-6008- Republican: C: Butler, State Controlling Board: Sens. Coley, Widener & Clerk: Vincent Keeran 6-4900 VC: Pelanda, Conditt, Hayes, Lynch, Slaby, Stautberg, Sawyer, Reps: Amstutz, Rosenberger & Redfern (Randy Cole, Stebelton- Democrat: RMM: Stinziano, Celebrezze, Letson, President - 6-5721) Pillich, Winburn SENATE LEADERSHIP Joint Committee on Agency Rule Review Manufacturing & Workforce Development (R8/D5), McGregor (C) Peterson (VC), Hayes, Duffey, Phillips, Heard, President – Keith Faber (R-Celina) Clerk: 2-2438 - Republican: C: Schuring, VC: Romanchuk, LaRose, Uecker, Skindell, Tavares (Larry Wolpert, Executive President Pro Tem– Chris Widener (R-Springfield) Derickson, Green, Grossman, Hall, Hottinger, Roegner - Director – 6-4086) Democrat: RMM: Winburn, Boyce, Letson, Patterson, Williams Ohio Retirement Study Council Members to be The Record of Capitol Square Since 1906 Maj. Flr. Leader – Thomas Patton (R-Strongsville) Military & Veterans Affairs (R8/D5), Clerk: 6-2124- appointed (Bethany Rhodes, Director – 228-1346) Majority Whip – Larry Obhof (R-Medina) Republican: C: Johnson, VC: Landis, Anielski, Dovilla, Perales, Legislative Service Commission Members to be Ohio Government Directory (2013-2014) Minority Leader – Eric Kearney (D-Cincinnati) Retherford, Rosenberger, Young - Democrat: RMM: Pillich, Asst. Min. Leader – Joe Schiavoni (D-Youngstown) appointed. (Mark Flanders, Director – 466-3615) (1st Edition: Jan. 22, 2013) Barborak, Bishoff, Fedor, Milkovich Correctional Institution Inspection Committee Ohio dialing prefixes: 466 (6) 644 (4) 752 (2) Minority Whip – Nina Tuner (D-Cleveland) Policy & Legislative Oversight (R8/D5), Clerk: 6-4895- Members to be appointed (Joanna Saul, Executive Director – Columbus Area Code - 614 Asst. Min. Whip – Edna Brown (D-Toledo) Republican: C: Dovilla, VC: Buchy, J. Adams, Blessing, 466-6649) Brenner, Huffman, Pelanda, Perales - Democrat: RMM: D.C. Area Code - 202 REPUBLICANS (23) Gerberry, Cera, Clyde, Curtin, Fedor Committee Designations: EXECUTIVE BRANCH Public Utilities (R14/D9), Clerk: 4-6886- Republican: C: C: Chair BACON, Kevin (3-Columbus) 6-8064 Governor: John Kasich (R) 6-3555 Stautberg, VC: Roegner, J. Adams, Amstutz, Blessing, Butler, V: Vice Chair BALDERSON, Troy (20-Zanesville) 6-8076 Lt. Governor: Mary Taylor (R) 6-3396 Conditt, Duffey, Gonzales, C. Hagan, Romanchuk, RMM: Ranking Minority Member BEAGLE, Bill (5-Tipp City) 6-6247 Rosenberger, Terhar, Thompson- Democrat: RMM: Williams, Attorney General: Mike DeWine (R) 6-4320 BURKE, Dave (26-Marysville) 6-8049 Ashford, Boyce, Celebrezze, Cera, O’Brien, Stinziano, Auditor: Dave Yost (R) 6-4514 COLEY, William (4-Middletown) 6-8072 Strahorn, Szollosi Secretary of State: Jon Husted (R) 6-2655 EKLUND, John (18th Chardon) 4-7718 Rules & Reference (R7/D4), Clerk: 6-9624- Republican: C: Treasurer: Josh Mandel (R) 6-2160 FABER, Keith (12-Celina) 6-7584 Huffman, VC: Batchelder, J. Adams, Brenner, Buchy, Kunze, GARDNER, Randy (2-Bowling Green) 6-8060 Pelanda - Democrat: RMM: Budish, Heard, Phillips, Szollosi SUPREME COURT OF OHIO HITE, Cliff (1-Findlay) 6-8150 State & Local Government (R12/D7), Clerk: 6-6504- ______Chief Justice Maureen O’Connor (R) 387-9060 Republican: C: Blair, VC: Anielski, R. Adams, Boose, Brown, HUGHES, Jim (16-Columbus) 6-5981 Justice Paul Pfeifer (R) 387-9020 Burkley, Damschroder, Grossman, Hackett, Hill, Maag, Young JONES, Shannon (7-Springboro) 6-9737 GONGWER NEWS SERVICE, INC. Justice Terrence O’Donnell (R) 387-9030 - Democrat: RMM: Clyde, Gerberry, Lundy, Patmon, Rogers, JORDAN, Kris (19-Powell) 6-8086 17 South High Street - Suite 630 Justice Judith Lanzinger (R) 387-9090 Slesnick, Sykes LaROSE, Frank (27-Copley Twp.) 6-4823 Columbus, Ohio 43215 Justice Sharon Kennedy (R) 387-9070 State & Local Government: Shared Services & LEHNER, Peggy (6-Kettering) 6-4538 614.221.1992 Justice Judith French (R) 387-9150 Government Efficiency Sub. (R3/D2), Clerk: 6-6023- www.gongwer-oh.com MANNING, Gayle (13-N. Ridgeville) 4-7613 Justice William O’Neill (D) 387-9040 Republican: C: Maag, VC: Anielski, Brown - Democrat: RMM: [email protected] OBHOF, Larry (22-Medina) 6-7505
Slesnick, Lundy OELSLAGER, Scott (29-N. Canton) 6-0626 Transportation, Public Safety & Homeland U.S. SENATE The Record of Capitol Square Since 1906 PATTON, Tom (24-Strongsville) 6-8056 Security (R8/D5), Clerk: 6-1374- Republican: C: BROWN, Sherrod (D-Avon) 224-2315 PETERSON, Bob (17-Sabina) 6-8156 Damschroder, VC: Ruhl , Becker, DeVitis, Green, Johnson, PORTMAN, Rob (R-Terrace Park) 224-3353 SCHAFFER, Tim (31-Lancaster) 6-5838 McGregor, Perales - Democrat: RMM: Mallory, Celebrezze, R. Gongwer is your trusted source for SEITZ, Bill (8-Cincinnati) 6-8068 Hagan, Milkovich, Patmon U.S. HOUSE UECKER, Joseph, (14-Loveland) 6-8082 Ways & Means (R12/D7), Clerk: 4-6027 - Republican: C: Ground-Breaking & Detailed Statehouse News REPUBLICANS (12) Beck, VC: Boose, Amstutz, Baker, Becker, Blair, Green, WIDENER, Chris (10-Springfield) 6-3780 Real-Time Bill Tracking & Alerts BOEHNER, John (8-West Chester) 225-6205 McClain, Scherer, Schuring, Sprague, Terhar - Democrat: Legislation History Reports CHABOT, Steve (1-Cincinnati) 225-2216 RMM: Letson, Barnes, Foley, Patmon, Rogers, Slesnick, DEMOCRATS (10) News Clips JORDAN, Jim (4-Urbana) 225-2676 Winburn Committee, Political & Fund-Raising Schedules JOHNSON, Bill (6-Poland) 225-5705 BROWN, Edna (11-Toledo) 6-5204 Legislator Contact Tools JOYCE, David (14-Russell Twp.) 225-5731 Legislative Archives CAFARO, Capri (32-Hubbard) 6-7182 GIBBS, Bob (18-Lakeview) 225-6265 GENTILE, Lou (30-Steubenville) 6-6508 Election & Candidate Information LATTA, Bob (5-Bowling Green) 225-6405 Government Directories & Contacts KEARNEY, Eric (9-Cincinnati) 6-5980 RENACCI, Jim (16-Alliance) 225-3876 News Archives SAWYER, Tom (28-Akron) 6-7041 Much More STIVERS, Steve (15-Columbus) 225-2015 SCHIAVONI, Joe (33-Youngstown) 6-8285 TIBERI, Patrick (12-Galena) 225-5355 SKINDELL, Michael (23-Lakewood) 6-5123 TURNER, Michael (3-Dayton) 225-6465 SMITH, Shirley (21-Cleveland) 6-4857 Use This Space To Add Your Logo And Information For WENSTRUP, Brad (2-Cincinnati) 225-3164 TAVARES, Charleta (15-Columbus) 6-5131
Distribution To Members & Clients TURNER, Nina (25-Cleveland) 6-4583
DEMOCRATS (4) Contact Gongwer To Find Out How BEATTY, Joyce (3-Columbus) 225-3164 SENATE COMMITTEES FUDGE, Marcia (11-Cleveland) 225-7032 KAPTUR, Marcy (9-Toledo) 225-4146 Agriculture (R6/D3), Clerk: 6-8150 – Rep.: C: Hite, VC: RYAN, Tim (17-Niles) 225-5261 Balderson, Burke, LaRose, Manning, Peterson – Dem.: RMM: Gentile, Cafaro, Smith Page 33 of 203 OHIO HOUSE OF REPRESENTATIVES PERALES, Rick (73-Beavercreek) 4-6020 HOUSE COMMITTEES SENATE COMMITTEES (continued) 77 South High St. RETHERFORD, Wes (51-Hamilton) 4-6721 ROEGNER, Kristina (37-Hudson) 6-1177 Columbus, Ohio 43266-0603 Agriculture & Natural Resources (R14/D9), Clerk: 6- Civil Justice (R7/D3), Clerk: 6-8072– Republican: C: ROMANCHUK, Mark (2-Mansfield) 6-5802 Clerk: Brad Young 6-3357 2994 - Republican: C: Hall, VC: Thompson, Boose, Buchy, Coley, VC: Obhof, Bacon, Eklund, Oelslager, Seitz, Uecker ROSENBERGER, Cliff (91-Clarksville) 6-3506 Burkley, Damschroder, C. Hagan, Hill, Landis, Lynch, Democrat: RMM: Brown, Skindell, Turner RUHL, Margaret Ann (68-Mt. Vernon) 6-1431 Pelanda, Retherford, Ruhl, Scherer Democrat: RMM: Cera, Commerce & Labor (R7/D3), Clerk: 6-8064– HOUSE LEADERSHIP SCHERER, Gary (92-Circleville) 4-7928 Barborak, Clyde, Curtin, O’Brien, Patterson, Redfern, Republican: C: Bacon, VC: Eklund, Jones, Jordan, Oelslager, SCHURING, Kirk (48-Canton) 2-2438 Strahorn, Winburn Seitz, Uecker Democrat: RMM: Brown, Schiavoni, Turner Speaker – Bill Batchelder (R-Medina) SEARS, Barbara (47-Sylvania) 6-1731 Commerce, Labor & Technology (R8/D5), Clerk: 4- Criminal Justice (R7/D3), Clerk: 4-7718– Republican: C: Speaker Pro Tem – Matt Huffman (R-Lima) SLABY, Marilyn (38-Copley Twp.) 4-5085 6074 - Republican: C: Young VC: Duffey, Baker, Blessing, Eklund, VC: Seitz, Hughes, LaRose, Lehner, Obhof, Schaffer Majority Leader – Barbara Sears (R-Sylvania) SMITH, Ryan (93-Gallipolis) 6-1366 Conditt, DeVitis, Hood, Landis- Democrat: RMM: R. Hagan, Democrat: RMM: Schiavoni, Sawyer, Smith Asst. Maj. Flr. Ldr. – John Adams (R-Sidney) SPRAGUE, Robert (83-Findlay) 6-3819 Barborak, Lundy, Milkovich, Ramos Education (R7/D3), Clerk: 6-4538 – Republican: C: Lehner, Majority Whip – Cheryl Grossman (R-Grove City) STAUTBERG, Peter (27-Cincinnati) 4-6886 Economic Development & Regulatory Reform VC: Hite, Balderson, Beagle, Coley, Gardner, Manning Asst. Majority Whip – Jim Buchy (R-Greenville) STEBELTON, Gerald (77-Lancaster) 6-8100 (R8/D5), Clerk: 6-0961 - Republican: C: Baker, VC: Terhar, Democrat: RMM: Sawyer, Schiavoni, Turner Minority Leader – Armond Budish (D-Beachwood) TERHAR, Louis (30-Cincinnati) 6-8258 Beck, Burkley, C. Hagan, Henne, Hood, Kunze - Democrat: Asst. Minority Leader – Matt Szollosi (D-Oregon) Energy & Natural Resources (R7/D3), 6-8076, Rep.: C: THOMPSON, Andy (95-Marietta) 4-8728 RMM: Driehaus, Barnes, Bishoff, Curtin, Williams Balderson, VC: Jordan, Eklund, Hite, Patton, Peterson, Minority Whip – Tracy Heard (D-Columbus) WACHTMANN, Lynn (81-Napoleon) 6-3760 Education (R12/D7), Clerk: 6-8100 - Republican: C: Schaffer, Uecker Dem.: RMM: Schiavoni, Cafaro, Gentile Asst. Minority Whip – Debbie Phillips (D-Athens) YOUNG, Ron (61-Leroy) 4-6074 Stebelton, VC: Brenner, Becker, Derickson, Hayes, Henne,
Finance (R9/D4), Clerk: 6-0626 – Rep.: C: Oelslager, VC: Huffman, Kunze, Roegner, Slaby, Smith, Thompson - Coley, Burke, Gardner, Hughes, Jones, LaRose, Patton, REPUBLICANS (60) DEMOCRATS (39) Democrat: RMM: Fedor, Antonio, Bishoff, Driehaus, Heard, Peterson Dem.: RMM: Sawyer, Schiavoni, Smith, Tavares Patterson, Strahorn Finance: Education Sub. (R8/D3), Clerk: 6-8060 – Rep.: ADAMS, John (85-Sidney) 6-1507 ANTONIO, Nickie (13-Lakewood) 6-5921 Finance & Appropriations (R20/D11), Clerk: 6-1474 - C: Gardner, VC: Lehner, Beagle, Hite, Hughes, Manning, ADAMS, Richard (80-Troy) 6-8114 ASHFORD, Mike (44-Toledo) 6-1401 Republican: C: Amstutz, VC: McClain, R. Adams, Anielski, Uecker, Widener Dem.: RMM: Turner, Sawyer, Skindell AMSTUTZ, Ron (1-Wooster) 6-1474 Beck, Derickson, Dovilla, Duffey, Gonzales, Grossman, Hall, Finance: General Government Sub. (R6/D3), Clerk: ANIELSKI, Marlene (6-Walton Hills) 4-6041 BARBORAK, Nick (5-Lisbon) 6-8022 BARNES, John (12-Cleveland) 6-1408 Hayes, Maag, McGregor, Rosenberger, Sears, Smith, Sprague, 6-8156 – Rep.: C: Peterson, VC: Schaffer, Balderson, Eklund, BAKER, Nan (16-Westlake) 6-0961 Stautberg, Stebelton - Democrat: RMM: Sykes, Antonio, Obhof, Seitz Dem.: RMM: Schiavoni, Gentile, Smith BATCHELDER, Bill (69-Medina) 6-8140 BISHOFF, Heather (20-Blacklick) 4-6002 BOYCE, Kevin (25-Columbus) 6-5343 Ashford, Carney, Clyde, Driehaus, Foley, Lundy, Phillips, Finance: Medicaid Sub. (R7/D3), Clerk: 6-8049 – BECK, Peter (54-Mason) 4-6027 Ramos, Reece Republican: C: Burke, VC: Jones, Bacon, Coley, Jordan, BOYD, Barbara (9-Cleveland Hts.) 4-5079 BECKER, John (65-Union Twp.) 6-8134 Agriculture & Development Sub. (R3/D2), Clerk: 4- LaRose, Patton Democrat: RMM: Cafaro, Brown, Tavares BUDISH, Armond (8-Beachwood) 6-5441 BLAIR, Terrence (42-Washington Twp.) 6-6504 5094 - Republican: C: Derickson, Hall, Smith - Democrat: Insurance & Financial Institutions (R9/D4), Clerk: CARNEY, John (22-Columbus) 6-2473 BLESSING, Louis (29-Cincinnati) 6-9091 RMM: Ashford, Driehaus 6-5981– Republican: C: Hughes, VC: Bacon, Beagle, Burke, - CELEBREZZE, Nicholas (15-Parma) 6-3485 BOOSE, Terry (57 Norwalk) 6-9628 Health & Human Services Sub. (R3/D2), Clerk: 6-4847- Hite, Jones, Manning, Obhof, Peterson Democrat: RMM: CERA, Jack (96-Bellaire) 6-3735 BRENNER, Andy (67-Powell) 4-6711 Republican: C: Gonzales, Sears, Sprague - Democrat: RMM: Turner, Brown, Gentile, Skindell CLYDE, Kathleen (75-Kent) 6-2004 BROWN, Tim (3-Bowling Green) 6-8104 Foley, Antonio Medicaid, Health & Human Services (R6/D3), CURTIN, Michael (17-Columbus) 4-6005 BUCHY, Jim (84-Greenville) 6-6344 Higher Education Sub. (R3/D2), Clerk: 6-3506- Clerk: 6-9737- Rep.: C: Jones, VC: Burke, Gardner, Jordan, DRIEHAUS, Denise (31-Cincinnati) 6-5786 BURKLEY, Tony (82-Paulding) 4-5091 Republican: C: Rosenberger, Dovilla, Duffey - Democrat: RMM: Lehner, Oelslager Dem.: RMM: Cafaro, Brown, Tavares BUTLER, Jim (41-Oakwood) 4-6008 FEDOR, Teresa (45-Toledo) 4-6017 Public Safety, Local Government & Veterans FOLEY, Mike (14-Cleveland) 6-3350 Ramos, Clyde CONDITT, Margaret (52-Liberty Twp.) 6-8550 Primary & Secondary Education Sub. (R3/D2), Affairs (R7/D3), Clerk: 6-4823– Republican: C: LaRose, GERBERRY, Ronald (59-Austintown) 6-6107 DAMSCHRODER, Rex (88-Fremont) 6-1374 Clerk: 6-2500 - Republican: C: Hayes, Maag, Stebelton- VC: Hughes, Bacon, Jordan, Patton, Schaffer, Uecker DERICKSON, Tim (53-Oxford) 4-5094 HAGAN, Robert (58-Youngstown) 6-9435 Democrat: RMM: Skindell, Brown, Tavares HEARD, Tracy (26-Columbus) 6-8010 Democrat: RMM: Lundy, Phillips DeVITIS, Anthony (36-Green) 6-1790 Transportation Sub. (R3/D2), Clerk: 6-2038 - Republican: Public Utilities (R9/D4), Clerk: 6-8068, Rep.: C: Seitz, VC: LETSON, Tom (64-Warren) 6-5358 DOVILLA, Mike (7-Berea) 6-4895 C: McGregor, R. Adams, Grossman – Democrat: RMM Reece, LaRose, Balderson, Coley, Eklund, Hite, Jones, Patton, Uecker DUFFEY, Mike (21-Worthington) 4-6030 LUNDY, Matt (55-Elyria) 4-5076 Dem.: RMM: Gentile, Cafaro, Sawyer, Smith Carney GONZALES, Anne (19-Westerville) 6-4847 MALLORY, Dale (32-Cincinnati) 6-1645 Reference (R7/D3), Clerk: 6-8086 – Republican: C: Financial Institutions, Housing & Urban GREEN, Doug (66-Mt. Orab) 4-6034 MILKOVICH, Zack (35-Akron) 4-6037 Jordan, VC: Oelslager, Bacon, Faber, Gardner, Patton, Development (R8/D5), Clerk: 6-8114 - Republican: C: R. GROSSMAN, Cheryl (23-Grove City) 6-9690 O’BRIEN, Sean (63-Brookfield) 6-3488 Widener Democrat: RMM: Kearney, Gentile, Schiavoni Adams, VC: Hottinger, Blair, Brenner, Brown, Hackett, Ruhl, HACKETT, Bob (74-London) 6-1470 PATMON, Bill (10-Cleveland) 6-7954 Rules (R8/D3), Clerk: 6-7584 – Republican: C: Faber, VC: Scherer - Democrat: RMM: Boyce, Barnes, Mallory, Pillich, HAGAN, Christina (50-Uniontown) 6-9078 PATTERSON, John (99-Jefferson) 6-1405 Widener, Burke, Coley, Hughes, Obhof, Oelslager, Patton Slesnick HALL, David (70-Millersburg) 6-2994 PHILLIPS, Debbie (94-Athens) 6-2158 Democrat: RMM: Kearney, Brown, Schiavoni, Turner Health & Aging (R12/D7), Clerk: 6-3760- Republican: C: HAYES, Bill (72-Harrison Twp.) 6-2500 PILLICH, Connie (28-Cincinnati) 6-8120 State Government Oversight & Reform (R8/D3), Wachtmann, VC: Gonzales, Brown, Hill, Hood, Hottinger, HENNE, Michael (40-Clayton) 4-8051 RAMOS, Dan (56-Lorain) 6-5141 6-8049– Rep.: C: Burke, VC: Uecker, Bacon, Coley, LaRose, Johnson, Lynch, Maag, Schuring, Sears, Slaby, Smith - HILL, Brian (97-Zanesville) 4-6014 REDFERN, Chris (89-Port Clinton) 4-6011 Obhof, Seitz, Widener Dem.: RMM: Smith, Brown, Skindell REECE, Alicia (33-Cincinnati) 6-1308 Democrat: RMM: Antonio, Barnes, Bishoff, Carney, R. Hagan, Transportation (R6/D3), Clerk: 4-7613 – Republican: C: HOOD, Ron (78-Ashville) 6-1464 Mallory, Ramos HOTTINGER, Jay (71-Newark) 6-1482 ROGERS, John (60-Mentor-on-the-Lake) 6-7251 Manning, VC: Patton, Balderson, Gardner, LaRose, Seitz, SLESNICK, Stephen (49-Canton) 6-8030 Insurance (R12/D7), Clerk: 6-1470- Republican: C: Hackett, Democrat: RMM: Cafaro, Gentile, Turner HUFFMAN, Matt (4-Lima) 6-9624 VC: Henne, J. Adams, Butler, DeVitis, Kunze, McGregor, JOHNSON, Terry (90-McDermott) 6-2124 STINZIANO, Michael (18-Columbus) 6-1896 Ways & Means (R7/D3), Clerk: 6-5838– Rep.: C: Schaffer, STRAHORN, Fred (39-Dayton) 6-1607 Retherford, Romanchuk, Sears, Slaby, Sprague - Democrat: VC: Peterson, Beagle, Eklund, Hite, Obhof, Widener Dem.: KUNZE, Stephanie (24-Hilliard) 6-8012 RMM: Carney, Ashford, Heard, O’Brien, Reece, Stinziano, LANDIS, Al (98-Dover) 6-8035 SYKES, Vernon (34-Akron) 6-3100 RMM: Tavares, Cafaro, Skindell SZOLLOSI, Matt (46-Oregon) 6-1418 Strahorn Workforce & Economic Development (R7/D3), LYNCH, Matt (76-Bainbridge Twp.) 4-5088 MAAG, Ron (62-Lebanon) 4-6023 WILLIAMS, Sandra (11-Cleveland) 6-1414 Clerk: 6-6247– Rep.: C: Beagle, VC: Manning, Balderson, WINBURN, Roland, (43-Dayton) 6-2960 Gardner, Lehner, Schaffer, Widener Dem.: RMM: Tavares, McCLAIN, Jeff (87-Upper Sandusky) 4-6265
Schiavoni, Skindell McGREGOR, Ross (79-Springfield) 6-2038 PELANDA, Dorothy L. (86-Marysville) 6-8147 Page 34 of 203 OHIO HOUSE OF REPRESENTATIVES 21ST CENTURY MANUFACTURING TASK FORCE
Task Force Leadership:
Chairman State Representative Kirk Schuring Vice Chairman State Representative Ross McGregor
Task Force Members:
State Representative Barbara Sears State Representative Anne Gonzales State Representative Christina Hagan State Representative Jack Cera State Representative Sean O’Brien State Representative Nickie Antonio State Representative Denise Driehaus
Task Force Hearing Locations:
The Timken Company, Canton, Ohio, August 9, 2012 O-I, Perrysburg, Ohio, September 27, 2012 Pentaflex, Springfield, Ohio, October 11, 2012 DuPont, Circleville, Ohio, October 18, 2012 Worthington Industries, Columbus, Ohio, November 15, 2012 Lincoln Electric, Cleveland, Ohio, November 26, 2012 GE Aviation, Cincinnati, Ohio, December 7, 2012 Ohio Statehouse, Columbus, Ohio, December 11, 2012
INTRODUCTION:
In June 2012, the Speaker of the Ohio House of Representatives, William G. Batchelder, announced the creation of the Ohio House’s 21st Century Manufacturing Task Force. The Task Force was designed to facilitate discussion and interaction between Ohio’s manufacturing community, public policy makers and interested parties regarding the state of manufacturing in Ohio and what can be done to improve Ohio’s manufacturing competitiveness in the 21st century.
The Task Force crisscrossed the state and conducted eight hearings. The Task Force sought to gather information about:
Resources to assist manufacturing Impediments to Ohio manufacturing Perceived future challenges to manufacturing The unique characteristics of each geographic section of the state that could foster new manufacturing opportunities Ways for manufacturing to partner with higher education research and development Trends in manufacturing and specific ways to capitalize on those trends
A final report with recommendations to the Speaker was initially scheduled to be completed by December 31, 2012. However, in light of the quality and quantity of information that was gathered, Chairman Schuring requested that the report be delayed in order to provide a thoughtful and accurate statement regarding the recommendations.
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ISSUE AND TOPIC REFERENCES OUTLINE FOR FINAL REPORT
What follows is a catalog of the issues raised in testimony, organized by subject area, using the actual words and phrasing of the people who testified. The names and companies of the specific presenters are captured to facilitate easy reference to their testimony.
ENERGY
Energy continues to be a major issue for the manufacturing sector. Ohio has recently gone through some of the most dramatic changes to the energy market the state has ever experienced – among them: a shift to market-based pricing, retirement of coal-fired generation facilities, mounting environmental regulation, and kWh reduction mandates on the investor- owned utilities. In order to be successful, manufacturers need reliable energy at a competitive price.
Shale Gas Ohio needs to foster responsible development of shale gas. Ohio has very few cost advantages when competing with the rest of the world. Shale gas offers us one. Let’s make sure we take advantage of that. Tom Shepard The Shepard Chemical Company
Shale gas can lead to new investment, jobs, wages and tax revenue for Ohio Cal Dooley American Chemical Council
The abundance of stable priced natural gas has provided many American companies to revitalize their workforce and bring manufacturing operations back to America Gas generation plants will have a stronger competitive position against coal Michelle Bloodworth American Natural Gas Alliance
Energy Efficiency Allow energy efficiency innovation Energy efficiency – 15% improvement of energy efficiency in purchased energy use by 2020 Richard Murrin International Paper
Combined heat and power (CHP) provides an opportunity to better utilize the conversion heat generated from fossil-fired power generation sources Favorable natural gas outlook CHP plants in the electric power sector typically have an arrangement with a neighboring industrial facility to purchase the waste heat Michelle Bloodworth American Natural Gas Alliance
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Renewable Energy and Alternative Energy Un-politicize renewable energy Companies like Parker are very selective about obtaining direct funding from government o Exception for facility expansions and improvements o More likely to be a supplier to a grant recipient Provide a stable environment o Market forces are driving renewables closer to grid parity o PTC’s, FIT’s, tax grants: provide continuity or eliminate o RES’s foster long term development Richard Nagel Parker Hannifin Corporation
General Energy Policy Competitive energy costs Predictability and reliability Jeff Durham Whirlpool Corporation
Upward pressure on electricity prices Michelle Bloodworth American Natural Gas Alliance
Cost of energy (electricity) John Burke OSCO Industries
Keep us competitive with a good energy policy for the state Mark Russell Worthington Industries
Provide priority status for manufacturers to secure energy rebates and participate in energy optimization programs Encourage economic development rates when tied to capital investments Michael Fedorka Chrysler Corporation
Concern over the instability of future electricity prices as Ohio moves to an unregulated market Keep costs competitive Stephen Lewis Ford Motor Company
Need a comprehensive energy policy Barry Racey AK Steel
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Support industrial co-generation as part of a distributed energy strategy Ned Hill Cleveland State University
Concern about new Ohio electricity markets Timken identifies four existing tools: 1) interruptible rates; 2) an opt-out for industrial customers from energy efficiency surcharges; 3) reasonable arrangements; and,4) reasonable load factor provisions. Peggy Claytor Timken Company
Ohio and Electricity Markets Ohio electric restructuring history Ohio’s current electricity market The benefits of electric competition Where the Ohio electric market is headed Todd Snitchler Chairman, PUCO
ENVIRONMENT
Manufacturers benefit from an environment that is clean and healthy. Industry typically leads the way when it comes to recycling and solid waste reduction. However there needs to be a common sense balance between regulation and business. Regulations that provide clarity, predictability and consistency based on scientific consensus leads to common sense standards and enforcement.
General Environmental Regulating Burdensome permitting process John Burke OSCO Industries
Corporate conservation and sustainability goals, e.g. o GHG emissions (Scope 1 and 2) associated with the production of our products by 2020; o Air Emissions – 10% reduction in criteria pollutant emissions (SO2, NOx, PM) by aligning with our Energy Efficiency Initiatives by 2020; o Solid Waste- 15% increase in the recovery of old corrugated containers by exploring new sources and diverting useable fiber from the landfill. Richard Murrin International Paper
Regional sources contribute more to the Northeast Ohio Air Quality than do local sources Rate of improvement limited by existing assets Brian Edwards Eaton Corporation
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While much regulation occurs on the federal level, our state officials need to advocate on behalf of Ohio manufacturing Michele Kuhrt Lincoln Electric
Emission regulation impacting non-utility boilers Michelle Bloodworth American Natural Gas Alliance
How Ohio EPA has been transforming their office to make things more efficient and less costly Challenging US EPA where it makes sense and is necessary for Ohio Scott Nally Director, Ohio EPA
We need a reasonable regulatory approach, one that enhances our global competitiveness Barry Racey AK Steel
Recycling Make more recycling friendly laws Jay Scripter O-I
FEDERAL ISSUES
Issues at the federal level impact Ohio and Ohio manufacturers each day. There is a value in understanding the impact of federal regulation on Ohio manufacturing so that as much commonsense integration between state and federal regulation as possible can be fostered.
General Federal Issue Policies Two threats o “Obamacare” o Sequestration Dr. Larry Dosser Mound Laser & Photonics Center, Inc.
Modern day federal tax policy that promotes increased investment in manufacturing and equipment Enforce existing trade laws Barry Racey AK Steel
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INFRASTRUCTURE
Ohio’s infrastructure plays a key role in the success of manufacturing. Ohio is blessed to have multiple highways, major airports, a Great Lake, and one of the most important inland waterways in the country. However in order to maximize these advantages, Ohio must do a better job of taking care of, repairing, and building new infrastructure systems.
General Infrastructure Improvements Over the years Ohio’s infrastructure system has eroded to dangerous levels, Ohio needs to upgrade its infrastructure (rail, roads and water) Tom Shepard The Shepard Chemical Company
Lower transportation costs Richard Murrin International Paper
Support for continued investment in multi-modal infrastructure – roads, railways, and waterways From an agribusiness perspective, the increase in freight movement by truck versus rail, as detailed in ODOT’s 2012 Freight Study is dependent on continued investment in road and bridge infrastructure Cargill is supportive of ODOT and the Ohio Rail Development Commission effort to preserve “strategic” economic corridors for business and for financing initiatives that enable rural communities to address rail infrastructure concerns Support incentives for short line railroads Railroads should reinvest earnings in rail infrastructure to maintain rail corridors Bill Tom Cargill AgHorizons
Repair roads and bridges Barry Racey AK Steel
Water Infrastructure Improvements Create a maritime division in the state Joe Starck Great Lakes Towing
Emphasize the need for water transportation and capital funding for inter-modal roadway connections to Ohio ports Assist agribusiness and other river shippers to raise the visibility for inland waterways investment with Congress Reliability of the system is fast becoming a questionable assumption Bill Tom Cargill AgHorizons
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CNG Infrastructure Policies to promote infrastructure development including incentives, loans and non-cash programs along key freeways and turnpikes Policies to promote annual fleet conversions for OEM-produced natural gas vehicles Michael Fedorka Chrysler Corporation
INNOVATION AND RESEARCH & DEVELOPMENT
New products and innovation are central to a manufacturer’s survival. Producing new products for new and existing markets preserves Ohio’s manufacturing’s competitiveness. Research and development plays a vital role in manufacturing’s ability to change and adapt. Ohio must support its manufacturers and use its assets to assist its companies move with the global economy.
General Research and Development Policies Create a two tier loan program where companies will still be able to get low interest loans to invest in new equipment without tying it to job creation, while an even lower rate could be given to those companies buying new equipment and creating new jobs through those purchases Ed Leventhal Valco Industries
Industry cannot afford to perform research and development. Universities have the facilities and the trained individuals to do this work We need to find a way to collaborate and innovate and tie the innovations to the region Glenn Daehn The Ohio State University
Innovation is essential to the growth and maturity of manufacturing in Ohio both as a destination for investment and employees Matthew Kinkley Rhodes State Community College
Continue to use Third Frontier and university partnerships for increased research and development Bob McEwan GE Aviation
Make universities and research institutions more “industry friendly” Cut down on the ”red tape” it takes to work with universities for research and development Nick Nikolaides The Proctor & Gamble Company
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TAX
Manufacturers are supportive of today’s broad-based state tax system, which enables lower rates. The General Assembly enacted major tax reforms in 2005 that improved a tax system that was outdated and eroded by loopholes and carve outs. The 2005 reforms included reducing overall tax rates, eliminating tax on investment, broadening the tax base, providing more stable and predictable revenues and simplifying compliance. Ohio is a leader in manufacturing and the state’s tax policies must support it.
Preserve the 2005 Tax Reforms and History of Tax Reform Preserve the broad base and low rate; no carve outs Jeff Durham Whirlpool Corporation
Ohio’s 2005 tax reform and elimination of the franchise and personal property tax gratefully improved Ohio manufacturers’ ability to compete in the global economy Ohio’s current tax structure is an important benefit to Lincoln Electric, on that has “tipped the scales” in several investment evaluations Michelle Kuhrt Lincoln Electric
History of the CAT Need to protect the CAT for manufacturers Mark Engel Bricker & Eckler
Consistent tax policy, preservation of 2005 reforms Rick Schostek Honda of America
2005 reforms significantly improved environment CAT should stay Mark Russell Worthington Industries
Preserve the tax exemption status for personal property like machining and equipment Michael Fedorka Chrysler Corporation
Keep the integrity of CAT tax, understand the role of the economic base Ned Hill Cleveland State University
Municipal Income Tax Uniformity Municipal uniformity – provide certainty for Ohio manufacturers and those seeking to invest in our state Michelle Kuhrt Lincoln Electric
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Municipal tax should be streamlined Mark Russell Worthington Industries
Complicated municipal tax system. Ford files numerous city tax returns and each return has a different set of rules. As an employer, differing municipal tax withholding rules are burdensome. It is overly complex and burdensome system and uniform rules would help. Stephen Lewis Ford Motor Company
Use Tax Definitions Use tax – there is significant complexity and uncertainty surrounding the definition of those two rather basic concepts. The current statutes offer little clarity as to what defines a manufacturing or research process. Michelle Kuhrt Lincoln Electric
Exempt gasoline fuel used at Ohio assembly plants from the sales and use tax Michael Fedorka Chrysler Corporation
The elimination of the personal property tax removed the penalty on manufacturing equipment being located in Ohio Since Ohio taxes on gross receipts and not net income, it is critical to preserve the low rate of the Commercial Activities Tax Stephen Lewis Ford Motor Company
General Tax Policies Encourage investment growth in Ohio Need tax consistency over time Brian Edwards Eaton Corporation
Find ways to incentivize innovation of the success of all Ohio manufacturers, like the Ohio 3rd frontier grant programs and tax rebate incentives for private R&D activities Steve Hatkevich American Trim
Ohio ranked 39th …far worse than our neighboring states (Tax Foundation) John Winch The Minster Machine Company
Expand cash-based incentives to encourage capital and equipment investments All the job retention tax credit to be refundable Michael Fedorka Chrysler Corporation
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TECHNICAL ASSISTANCE
Ohio has some the best technical assistance programs in the country but not a comprehensive distribution and deployment strategy. Spread across the state, these centers provide assistance that manufacturers would not be able to obtain on their own. Mutualizing the cost of technical innovation creates competitive advantage.
Technical Assistance Program Policies Ohio manufacturers continue to need and benefit from services that only the Edison Centers provide Maintaining and restoring funding for the Edison Center program should be a priority for the Administration and Legislature Additional funding should be provided to enable Edison Centers to better connect Ohio manufacturers to the Ohio University System capabilities and leverage the state’s $4.5 billion annual higher education expenditure Combined testimony of Dan Berry, MAGNET; Alan Schultice, Venture Plastics; Bruce Broxterman, Richards Industry; and Gary Conley TechSolve
Technical resources for suppliers Rick Schostek Honda of America
WORKERS’ COMPENSATION
Injured workers need to receive fair and timely benefits. When a worker is injured on the job it is to the benefit of all parties that they receive the best treatment available to get them back in the workplace. There is room for state lawmakers to improve processes for injured workers and employers to drive system costs down and provide best in class medical care and case management.
General Workers’ Compensation Policy Changes Improve worker’s compensation system Richard Murrin International Paper
Review of the WC system since the new administration took over Steve Buehrer Administrator, Ohio Bureau of Workers’ Compensation
Recorded hearings If each hearing provided a record of what transpired, it would not only ensure better accuracy in the orders, but would ensure better consistency in the outcome of the hearings, and likely fewer appeals Cathy Duhigg Gannon Eaton Corporation
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Permanent Partial Disability (PPD) While most states make this a one-time payment, our PPD process allows an injured worker to apply for an increase in the award as many times as they like and for as long as the claim is kept active. This results in multiple examinations and hearings as well as multiple increases in these awards, usually none of which are based on an actual percentage of impairment contained in one of the submitted reports. This process also contributes to keeping a claim open for many years, sometimes, decades. This repeated filing process is unique to Ohio. While Ohio may be one of the least expensive states when it comes to the calculation of the initial PPD benefit, by paying incremental increases we add significant value to the PPD award and significant cost to the PPD process. This also results in extending the timeline of these claims unnecessarily, which ultimately adds additional cost, sometimes significant. Cathy Duhigg Gannon Eaton Corporation
Permanent Total Disability (PTD) The great majority of states cap the number of weeks that a PTD benefit is paid. In many states, the PTD benefit ends when the clamant turns 65. Of those states that pay past age 65, there is an offset provision that allows the benefit to be reduced because the assumption is that the claimant can now receive social security retirement. Cathy Duhigg Gannon Eaton Corporation
That the task force be open to WC reforms. Adopting new measures that will make our WC system as state of the art as Ohio’s employers have been forced to become as a result of the ever more competitive world in which we live. Dave Johnson Summitville Tile
WORKFORCE DEVELOPMENT
A strong diversified economy requires an adequate and reliable supply of skilled workers. These workers must have the technical knowledge and life skills to meet the challenges faced by Ohio manufacturers in the global market place. At each hearing, one company after another testified that Ohio’s workforce needs to be better trained, better prepared, and better educated to participate effectively in today’s manufacturing workplace.
More Educational Programs Focused on Manufacturing Needs Company’s find it hard to find qualified workers who understand the high tech machines operating in industry. Because of this often positions of machine maintenance and electricians go unfilled. John Burke OSCO Industries
Ohio needs to emphasize effectiveness in education; promote competition (i.e. charter schools); promote STEM (Science, Technology, Engineering and Math) Tom Shepard The Shepard Chemical Company
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The legislature should enhance and promote the skilled trades career path within Ohio’s education institutions. This would include marketing the positive image of a career in the skilled trades, partnering with the State’s manufacturers to develop training programs and offering financial assistance for students seeking a career in manufacturing. Michelle Kuhrt Lincoln Electric
Education and training of existing employees in the manufacturing setting Steve Hatkevich American Trim
Continue to advocate a pro-manufacturing agenda through job training initiatives, capital investment opportunities, and infrastructure Promote a strong foundation for science and mathematics for technical vocational careers Jim Rumpf Navistar
Expand the reach and influence of career technical centers and continue to improve their image as job training programs helping to promote job creation Evaluate how the post-secondary system interfaces with manufacturing. The current model is not well structured to support engineering as it applies to manufacturing. Ed Leventhal Valco Industries
Mound Laser and Wright State University, with the support of the Ohio Board of Regents, signed an agreement to share a faculty member Engaged Sinclair Community College to assist with developing training curriculum Dr. Larry Dosser Mound Laser & Photonics Center, Inc.
Creation of a larger certified manufacturing workforce Kelly Wallace Career and Technology Education Centers of Licking County
Formally bridge high school curriculum so that all students in their high school career receive technical skills training in at technical area that can lead to employment or bridge to community and technical colleges Market the image of manufacturing to visibly and functionally change the image to one that is a career, with opportunity, stability and advancement Matthew Kinkley Rhodes State Community College
Develop and deploy manufacturing curriculums at community colleges Fund robust incumbent and new worker training programs Provide priority to the automotive industry for training assistance based on the high economic contribution and job multiplier associated with the industry Michael Fedorka Chrysler Corporation
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Educated workforce including maintenance technicians Rick Schostek Honda of America
Job retention credit not as robust as many other competing states Lack of federal resources for incumbent workers puts pressure on states to fill the void Ohio training voucher system is a good step Stephen Lewis Ford Motor Company
Support workforce initiatives that focus on: o Safety and health; o Education; and o Retraining workers so that we can continue to compete in the global marketplace Barry Racey AK Steel
Increase Internship, Co-ops and Apprenticeships We must structure new programs that are designed to strengthen and improve the existing worker The continuation of support if not the expansion of the Internship Programs offered by the State of Ohio Steve Hatkevich American Trim
State should encourage on the job training and provide greater flexibility in training programs that can be customized into manufacturers' needs Jeff Durham Whirlpool Corporation
Industry needs a bridge from technical training to hands on experience Good technical programs exist (Cleveland industrial training center, Auburn, etc.) Funding for one or two year apprentice programs is needed Brian Edwards Eaton Corporation
Investigate the development of apprenticeship programs modeled after the German model. Starting children 16 and 17 years old in apprenticeship programs. Ed Leventhal Valco Industries
Other programs that are of benefit include the Third Frontier Internship program, job creation tax credit, and rapid outreach grants Dr. Larry Dosser Mound Laser & Photonics Center, Inc.
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Provide more cooperative education and academic internships Increase service learning/civic engagement Develop more undergraduate research and get undergraduate students to participate in some form of experiential learning Anita Todd University of Cincinnati
Establish apprenticeships/apprenticeship like programs at community colleges that are content and industry specific where companies can sponsor, recruit, and engage individuals supported by the company and state Expand internship/co-op programs offered at community colleges for skilled trades and engineering technology students – supported by state and company support Matthew Kinkley Rhodes State Community College
Support experiential education and training o The labor market will work as long as there is baseline literacy and numeracy o Industry-recognized skill based credentials and certificates as complements to academic degrees o Apprentices, interns, cooperative education as essential parts, or alternatives to the traditional educational system o Find ways to allow younger workers into manufacturing workplaces Ned Hill Cleveland State University
Ohio’s Workforce Statistics 2012 CNBC special report ranked Ohio 49th in workforce issues Challenges at Minster as we try to hire o Skills gap – machinist and engineering openings with no qualified applicants o Lack of basic employment skills/work ethic o Brain drain – 50% of Ohio’s technical talent leaves Ohio after graduation and does not return John Winch The Minster Machine Company
The Ohio Manufacturers’ Association Thematic Summary of the Ohio House 21st Century Task Force on Manufacturing Hearings Page 48 of 203
21st Century Manufacturing Task Force
Report
February 7, 2013
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Table of Contents
I. Introduction
II. Task Force Members and Ohio House Staff Support
III. Report
Page 50 of 203 Introduction
The Ohio House of Representatives’ 21st Century Manufacturing Task Force was established in June of 2012. It was created to facilitate an interactive dialogue between Ohio’s manufacturing community, legislators, and interested parties to determine the current status of manufacturing in Ohio and actions that could be taken to improve Ohio’s manufacturing competitiveness.
Eight hearings were conducted over a course of five months. The first seven hearings were held in conjunction with various manufacturers across the state. Each visitation typically involved over seven hours of interaction with Task Force members consisting of a tour of the manufacturing facility in the morning, and a hearing in the afternoon. The eighth and final hearing was held at the Statehouse.
The following locations hosted tours and hearings:
The Timken Company – Canton Owens-Illinois – Perrysburg Pentaflex – Springfield DuPont – Circleville (Tour) Ohio Christian University (Hearing) Worthington Industries – Columbus Lincoln Electric – Cleveland General Electric – Cincinnati (Tour) City of Sharonville (Hearing)
Over 50 witnesses personally testified during the process and many others testified in writing. A variety of themes were discussed at each hearing with an emphasis on identifying challenges in manufacturing and the actions necessary to address those challenges.
Page 51 of 203 Task Force Members and Ohio House Staff Support
The Task Force was comprised of members representing all four quadrants of the state and central Ohio. It also was bi-partisan with five Republicans and four Democrats serving.
The following members served on the Task Force:
State Representative Nickie Antonio State Representative Jack Cera State Representative Denise Driehaus State Representative Anne Gonzales State Representative Christina Hagan State Representative Ross McGregor (Vice-Chair) State Representative Sean O’Brien State Representative Kirk Schuring (Chair) State Representative Barbara Sears
The following Ohio House staff assisted the Task Force:
Emily Williams Sean Chichelli Nick Muccio Madison Lisotto Chad Aronson Nick D’Angelo Micah Derry Aileen O’Donnell Joe Russell Ali Sehringer Kelly Smith Pam Wilson Kelsey Woolard
Special thanks to the Ohio Manufacturer’s Association for their assistance in coordinating the hearings at manufacturing locations across the state.
Page 52 of 203 Report
The Task Force unanimously approved the following report:
Workforce Development:
A properly educated and well-trained workforce is critically important to the long-term well-being of manufacturing in our state. Ohio’s manufacturers need to have access to a talent pool of workers who can meet the demands of a sophisticated 21st century manufacturing environment. Young people in Ohio should understand that a career in manufacturing offers a lucrative opportunity for significant income, stimulating challenges, and long-term job security. The stature of a manufacturing career should rise to the level of Germany where it is considered to be a profession, rather than just a job.
Action Items:
The Ohio Board of Regents and the Department of Education should develop initiatives to showcase the exciting career opportunities available in manufacturing. Encourage more collaboration and cooperation between Ohio’s education community and manufacturers to customize co-ops, internships, and apprenticeships to address the individual needs of specific manufacturers. These programs should be jointly funded by the state and the individual manufacturer. All co-ops, internships, and apprenticeships should include soft skills as part of their education and training. Establish a dual-credit program for students to attain an associate’s degree in manufacturing. Increase the number of certificates available for various trade skills pertaining to manufacturing. Encourage the use of virtual-reality training devices in lieu of using expensive and sometimes cost-prohibitive equipment to train skilled workers.
Research and Development:
Innovation is key to the growth and sustainability of manufacturing in our state. Ohio’s manufacturers must constantly endeavor to keep their products current with the ever-changing demands of customers in the 21st century marketplace. Innovation improves productivity, delivers desirable products, and creates a competitive edge that will enable Ohio’s manufacturers to win in the national and international arena.
Action Items:
Increase the opportunities for Ohio’s higher education community to be an instrument for Ohio’s manufacturers who are seeking research and development assistance.
Page 53 of 203 Encourage higher education/private sector partnerships to conduct demonstration products that test the viability of new products that are near market. This effort will help to move them to full commercialization and production. Both promote and grow the Edison Centers in our state as a valuable tool to assist manufacturing. Past Edison Center efforts have shown an excellent return on investment and their efforts should be augmented. Encourage more public/private research & development efforts to approve energy efficiencies in manufacturing. Encourage the utilization of high-speed fiber optic broadband and data centers to assist research and development in manufacturing. Explore more ways for Ohio to form a triple-helix partnership between higher education, state and local government, and manufacturing to produce an optimal ecosystem for manufacturing and deliver a multiplier-effect to other economic sectors in our state. Create public/private partnerships to improve advanced manufacturing. One such endeavor would be to further develop the additive manufacturing process that is evolving and holds high promise for new opportunities in manufacturing. Foster more public/private manufacturing accelerators to help emerging manufacturers to avoid the “valley of death” challenges associated with becoming viable.
Energy:
Energy costs are a major expense to manufacturing in Ohio and often times can be tremendously challenging and burdensome. The specter of looming higher energy costs could have a devastating effect on manufacturing in our state. To that end, Ohio must constantly strive to keep energy costs down in order for Ohio’s manufacturers to be competitive.
Action Items:
Encourage and support the shale energy exploration in our state as a way to supply low-cost energy to manufacturers. Encourage the necessary infrastructure improvements to transport shale energy to its end- users. Promote more combined heat and power (CHP) activities to lower energy costs and improve emissions. Create a transition plan for manufacturers to negotiate specific terms and conditions with electric utilities during the period that the electric utility is moving to market. Adopt market-driven strategies that will allow the expansion of renewable energy. Explore ways to optimize shale natural gas to grow Ohio’s petrochemical industry. Encourage the development of the infrastructure necessary to build a delivery system to accommodate the increased use of compressed natural gas (CNG) vehicles. Develop a program to assist high-energy manufacturers to stabilize or lower their energy costs over a long period of time.
Page 54 of 203 Regulation:
One of the most effective ways to enhance Ohio’s manufacturing competitiveness is to reform regulation so that it is fair, consistent, and is in harmony with other state and federal regulations. Regulations should be easy to understand and friendly towards compliance.
Action Items:
Continue strides made by Ohio regulators to make regulations understandable and provide a sensible and expeditious path towards compliance. Coordinate state regulations with federal regulations to avoid confusion and conflict in achieving compliance. Advocate that the federal government does not impose burdensome regulations that will put Ohio’s manufacturers at a competitive disadvantage.
Tax Structure:
The tax reform that created the Commercial Activity Tax (CAT) has been a great benefit to Ohio’s manufacturers and has enhanced its overall competitiveness. It’s important that the integrity of the CAT not be violated. However, additional tax reform should be adopted to encourage economic growth.
Action Items:
Encourage a uniform municipal tax policy to be adopted to eliminate multiple and confusing tax filings that are a burden and cost to manufacturers. Create tax incentives to promote capital investment. Create tax incentives to promote research and development. Create tax incentives to promote energy efficiencies. Allow an accelerated depreciation schedule to assist in capital formation. Make Ohio’s job retention tax credit more robust and effective.
Trade:
Free trade provides many exciting opportunities for Ohio’s manufacturers, but it also must be fair. When Ohio’s foreign competitors don’t abide by the rules, it hurts our manufacturers and costs jobs. Even though trade policy is largely a federal issue, Ohio needs to be a strong advocate for the type of trade policy that helps manufacturing and doesn’t put it at a competitive disadvantage.
Action Item:
Monitor federal trade activities and advocate for improvements that will open opportunities for more Ohio products to be exported. Also advocate for measures that will thwart unfair foreign competition that hurts Ohio’s manufacturers.
Page 55 of 203 Transportation:
Transporting goods and raw materials quickly, easily, and at the lowest possible cost is vital to Ohio’s manufacturers. A multimodal transportation system maximizing the use of our highways, railways, waterways and air can put Ohio in a strategic position to beat its competition.
Action Items:
Create a maritime department similar to the Ohio Rail Commission to enhance the use of our seaways and waterways as a viable mode of transportation. Explore new ways to fund improvements and repairs to Ohio’s highways and bridges. Support policies that will improve rail service to Ohio’s manufacturers. Advocate the federal government to assist in the building and maintenance of the multimodal infrastructure in our state.
Workers’ Compensation:
Ohio’s Workers’ Compensation system was designed to be a no-fault insurance plan that provides injured workers with the medical attention they need and a clear pathway to return to work. As with any other thing, Ohio’s Workers’ Compensation system should be periodically reviewed for improvement. Any recommendation that comes from that exercise should include all stakeholders in an effort to find consensus.
Action Items:
Explore ways to improve Ohio’s return to work ratio. Seek methods to enhance Ohio’s Industrial Commission’s hearing process so that disputed claims can be adjudicated with as much information and participation from both parties as possible.
Recycling:
Most of Ohio’s manufacturers are great recyclers and are seeking ways to increase their recycling activities. Recycling reduces energy costs, lowers emissions, and provides raw materials at a reduced cost.
Action Item:
Develop ways that will generate more recyclable materials to manufacturers who want to use them as feed stock.
Page 56 of 203 Manufacturing Clusters:
Ohio is fortunate to have some of the best manufacturing clusters in the nation. These clusters provide a manufacturing-specialized ecosystem that has a positive impact on the regional economy and also the region’s overall quality of life.
Action Item:
Support Ohio’s manufacturing clusters by focusing on their strengths and striving to build upon them.
Outreach:
Ohio has an abundance of programs and policies to assist manufacturing. However, many manufacturers are not aware of the various services that are available to assist them.
Action Item:
Develop a feature under the Ohio Development Services Agency (DSA) that will provide a mechanism for Ohio’s manufacturers to review the type of assistance that is available and also how to access it.
Manufacturing’s Image:
Ohio has one of the strongest manufacturing sectors in the United States and the world. It is a large part of our state’s Gross Domestic Product (GDP) and stimulates growth in other sectors of our economy. Unfortunately, there has been a trend over the years by those outside manufacturing to undermine its importance and improperly characterize it as old and unexciting. The truth is quite the contrary, and an effort is needed to change its overall image.
Action Item:
Launch a cooperative effort between the Development Services Agency (DSA), Ohio Manufacturer’s Association (OMA) and other interested parties to re-brand manufacturing. The emphasis of this effort will be to showcase the positive aspects of 21st century manufacturing in Ohio and the exciting career opportunities it has to offer.
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Ohio Jobs and Transportation Plan
Ohio Faces a Transportation Funding Shortfall Ohio’s transportation system – and the network of highways at its heart – is perhaps our state’s single most important asset for economic development and jobs growth. Virtually every sector of our economy – manufacturing, commerce, agriculture, small business, logistics – depends on this transportation network for access to its workforce, raw materials and markets.
But, like the vast majority of states, Ohio’s budget for maintaining and improving its transportation resource depends almost entirely on federal and state gas tax revenues. For many reasons beyond the state’s control, this source of funding is increasingly unable to keep pace with ever-rising costs of our transportation needs. Already, the resulting shortfall has delayed $1.4 billion in the state’s highest priority construction commitments, as projected by the state’s Transportation Review Advisory Commission (TRAC). In TRAC’s 2013 to 2016 program, 21 critically needed projects were delayed for a decade or more from their original start dates.
To accelerate projects in the TRAC program, the Ohio Department of Transportation (ODOT) evaluated a wide range of options for funding or financing its projects early in 2012 and identified $400 million in savings to help offset the projected funding shortfall. ODOT also launched the Division of Innovative Delivery, to explore a range of innovative methods for delivering projects. Other innovative solutions, such as unlocking the financial potential of the Ohio Turnpike, were explored as part of ODOT’s overall approach to addressing the state’s transportation system challenges.
Evaluation of Options for Leveraging the Turnpike One year ago, the Ohio Department of Transportation and the Office of Budget and Management, at the request of Governor Kasich, jointly commissioned the Ohio Turnpike Opportunity Analysis to assess options available to unlock the value of the Turnpike, while at the same time preserving its future viability and the quality of service that the toll road’s customers have come to expect.
The Turnpike Analysis assessed three options that sought to best achieve those goals. Option one would maintain the status quo, with modifications to the Turnpike Commission’s bonding capabilities. Second was a public option, which considered keeping the Turnpike in state hands, but with a closer alignment between the Turnpike Commission and ODOT. The third option to be evaluated was a long- term public/private partnership, which assumed leasing the Turnpike to a private concessionaire for a period of 50 years.
Ohio Jobs and Transportation Plan After more than ten months of study and deliberation – including multiple forums to gather input from the public and local officials – the decision was made to pursue the second option. As laid out in the Ohio Jobs and Transportation Plan, announced by Governor Kasich in December 2012, the Ohio Turnpike will remain in state hands, under control of a restructured Ohio Turnpike Commission, now to be called the Ohio Turnpike and Infrastructure Commission.
In accordance with the plan, the Ohio Turnpike and Infrastructure Commission will issue bonds backed by future Turnpike revenues. More than 90 percent of the bond proceeds will be directed toward transportation projects in northern Ohio, including maintenance and modernization of the Turnpike
Page 58 of 203 itself. Initial bond issuances are expected to total $1 billion over the next five to six years, from which a portion of the proceeds – about $70 million – will allow the Turnpike to accelerate its plans for a required and total reconstruction of the Turnpike’s base roadbed. A second bond issue of $0.5 billion is anticipated four to six years subsequently.
Other key details of the Ohio Jobs and Transportation Plan include: • Toll rates for local passenger trips paid with an EZ Pass will be frozen for 10 years; • All other toll rates will be capped at inflation, which is lower than historic toll increases; and • No Turnpike employee lay-offs are anticipated.
The availability of these additional highway dollars, primarily for use in northern Ohio, will permit ODOT to apply its traditional funding sources to accelerate completion of high-priority projects throughout the rest of the state. What’s more, ODOT projects that the $1.5 billion in Turnpike bond proceeds can potentially attract federal and local matching funds for additional investment in Ohio’s transportation system.
The Governor’s Executive Budget proposes changes in law required for this plan to move forward as well as appropriation authority allowing ODOT to spend the proceeds of bonds issued by the Ohio Turnpike and Infrastructure Commission. Among notable language changes:
• Change the name of the Ohio Turnpike Commission to ―The Ohio Turnpike and Infrastructure Commission. • Add a new definition for ―infrastructure projects,‖ which is separate and distinct from the existing turnpike ―project. • Add authority for the Commission to issue bonds and authorize agreements with ODOT for funding (in whole or in part) of infrastructure projects that have been recommended by the ODOT director. These are projects previously reviewed and recommended by TRAC. • Allow the Commission to adopt rules relating to the approval of infrastructure projects. These rules will establish the criteria to be used by the Commission in approving infrastructure projects. The Commission must find an anticipated economic or transportation-related impact. • Change the size and terms of some members of the Ohio Turnpike and Infrastructure Commission, including the addition of two new public members.
The Governor’s proposed budget requests appropriations of $200 million in FY 2014 and $300 million in FY 2015 to allow ODOT to spend bond proceeds provided by the Turnpike Commission.
The Ohio Jobs and Transportation Plan presents a balanced and forward-thinking strategy for Ohio, allowing the state to address a serious and growing shortfall between our transportation needs and our ability to meet those needs with existing revenue streams. By leveraging the value of Ohio’s Turnpike asset – while keeping the Turnpike under strong, independent public control – we will close our highway- funding gap for the lasting benefit of Ohio’s economy and move forward with essential transportation projects that will otherwise be held off for years.
TRUCK WEIGHT AMENDMENT
From: Ryan Augsburger Sent: Thursday, February 28, 2013 8:30 AM To: '[email protected]'; [email protected] Cc: Robert Brundrett; Ryan Augsburger Subject: Sub HB 35 HC-0058-1 Truck Weight Limits
Dear Representative Wachtmann:
Page 59 of 203
Thank you for your call concerning the referenced amendment now included in the pending transportation budget.
To remain competitive and maximize the economic benefits of Ohio’s manufacturing strength, the State must continue to update Ohio’s shipping flexibility. Your amendment is clearly intended to provide greater shipping flexibility and movement of freight.
The Ohio Manufacturers’ Association supports inclusion of the referenced amendment into the transportation budget. The OMA has advocated in support of federal law revisions to allow each state to increase its interstate weight limit from 80,000 to 97,000 lbs. for tractor-trailers fitted with an additional axle and brakes. The OMA would be pleased to work with you and members of the House and Senate Transportation Committees to determine if similar provisions should be included.
Improved shipping flexibility with necessary safeguards would allow manufacturers to safely and more efficiently ship their products using fewer truck loads, while reducing accidents, fuel use, congestion, vehicle miles traveled, CO2 emissions and road wear.
Please do not hesitate to contact OMA Director of Public Policy Services Robert Brundrett or myself if you would like to discuss the matter further. Thank you.
Sincerely,
Ryan Augsburger Managing Director, Public Policy Services
The Ohio Manufacturers' Association Protecting and growing Ohio manufacturing www.ohiomfg.com
33 N. High Street Columbus, OH 43215 Tel: 614.629.6817 Mobile: 614.348.1227 [email protected]
HB 35 AS PASSED BY HOUSE LSC Analysis
Vehicle weight and size limits (R.C. 4513.34, 5577.04, and 5577.05) Overall gross vehicle weight limit
Page 60 of 203 For roads that are part of the state highway system and are not interstate highways, the bill increases the maximum overall gross vehicle weight from 80,000 to 90,000 pounds. For interstates and other roads that are not part of the state highway system (county and township roads), the bill retains the existing maximum overall gross vehicle weight limit of 80,000 pounds. Vehicle size limits The bill increases from 40 to 50 feet the general maximum length for motor vehicles operating on public roads in Ohio that do not otherwise have a separate maximum length. In particular, this general maximum vehicle length applies to vehicles other than trailers, semitrailers, and certain other specified vehicles, including passenger buses and certain transporter combinations. A vehicle may exceed this maximum length only with a special hauling permit, issued under rules adopted by the Director of Transportation or a local authority. Legislative Service Commission -11- Sub. H.B. 35 As Reported by H. Finance & Appropriations Permits
Page 61 of 203 Permits The bill creates a new, mandatory special regional heavy hauling permit that the Director of Transportation and local authorities must issue for trips of 150 miles or less, unless the requested route is over a highway with a condition insufficient to bear the weight of the vehicle or combination of vehicles. Upon application in writing, the special regional heavy hauling permit must be issued authorizing the applicant to operate or move a vehicle or combination of vehicles as follows: (1) at a size or weight exceeding the maximum allowable under Ohio law, (2) upon any highway under the jurisdiction of ODOT or the local authority, except highways with a condition insufficient to bear the weight as stated on the application, (3) for regional trips at distances of 150 miles or less from a facility stated on the application as the applicant's point of origin, and (4) upon payment of a permit fee established by the Director or the local authority. The bill continues to allow the Director or a local authority to issue or withhold an existing special permit that is not a mandatory, regional heavy hauling permit and to establish conditions for the operation of a vehicle under a permit. Under current law, the issuance by the Director and local authorities of a special overweight or oversize vehicle permit is discretionary. Under rule, ODOT currently issues multiple types of permits based on what is being moved, size and weight, the routes, and the frequency of movement. Permits currently issued include trip permits, round trip permits, 90-day continuing permits, 365-day continuing permits, permits specific to an industry or product (construction equipment, farm equipment, manufactured buildings, and steel coils), and location specific permits (Toledo port area, Delta steel complex, and marinas). Each type of permit has a separate fee schedule and conditions for operation. (Ohio Administrative Code Chapter 5501:2-1.) Special permits and the Ohio Turnpike Under the bill, an overweight or oversize vehicle is not required to obtain a special permit to move a distance of two miles or less from the Ohio Turnpike if: (1) the vehicle or combination of vehicles was not required to have a special permit to operate on the Ohio Turnpike, and (2) the highway condition over which the vehicle is operating is sufficient to bear the weight of the vehicle. Current law allows the Ohio Turnpike Commission to adopt rules for the control and regulation of traffic on any turnpike project. The Commission rules in regard to axle loads, vehicle loads, and vehicle dimensions, including the issuance of special permits, apply on any turnpike project notwithstanding the general laws governing vehicle weight and size limits (R.C. 5537.16, not in the bill). Legislative Service Commission -12- Sub. H.B. 35 As Reported by H. Finance & Appropriations The bill establishes specific permit violations in place of a general prohibition against violating the law governing permits. The bill prohibits violation of the following terms of a permit: (1) gross load limits, (2) axle load by more than 2,000 pounds per axle or group of axles, and (3) the terms of a permit that relate to an approved route, except upon order of a law enforcement officer. The bill retains the existing penalties applicable to special permits; specifically, (1) a first violation is a minor misdemeanor, (2) a second offense within one year is a fourth degree misdemeanor, and (3) any subsequent offense within one year is a third degree misdemeanor (R.C. 4513.99, not in the bill).
Page 62 of 203 Penalties The bill establishes specific permit violations in place of a general prohibition against violating the law governing permits. The bill prohibits violation of the following terms of a permit: (1) gross load limits, (2) axle load by more than 2,000 pounds per axle or group of axles, and (3) the terms of a permit that relate to an approved route, except upon order of a law enforcement officer. The bill retains the existing penalties applicable to special permits; specifically, (1) a first violation is a minor misdemeanor, (2) a second offense within one year is a fourth degree misdemeanor, and (3) any subsequent offense within one year is a third degree misdemeanor (R.C. 4513.99, not in the bill). In addition, the bill specifies that a separate violation of the motor vehicle and traffic laws by a person operating a vehicle or combination of vehicles under an overweight or oversize special permit does not invalidate the operation in accordance with the terms and conditions of the permit.
HB 35 AS PASSED BY HOUSE Bill Language
Sec. 4513.34. (A) The (1) The director of transportation with respect to all highways that are a part of the state highway system and local authorities with respect to highways under their jurisdiction, upon application in writing, shall issue a special regional heavy hauling permit authorizing the applicant to operate or move a vehicle or combination of vehicles as follows: (a) At a size or weight of vehicle or load exceeding the maximum specified in sections 5577.01 to 5577.09 of the Revised Code, or otherwise not in conformity with sections 4513.01 to 4513.37 of the Revised Code; (b) Upon any highway under the jurisdiction of the authority granting the permit except those highways with a condition insufficient to bear the weight of the vehicle or combination of vehicles as stated in the application; (c) For regional trips at distances of one hundred fifty miles or less from a facility stated on the application as the applicant's point of origin. Issuance of a special regional heavy hauling permit is subject to the payment of a fee established by the director or local authority in accordance with this section. (2) In circumstances where a person is not eligible to receive a permit under division (A)(1) of this section, the director of transportation with respect to all highways that are a part of the state highway system and local authorities with respect to highways under their jurisdiction, upon application in writing and for good cause shown, may issue a special permit in writing authorizing the applicant to operate or move a vehicle or combination of vehicles of a size or weight of vehicle or load exceeding the maximum specified in sections 5577.01 to 5577.09 of the Revised Code, or otherwise not in conformity with sections 4513.01 to 4513.37 of the Revised Code, upon any highway under the jurisdiction of the authority granting the permit. (3) For purposes of this section, the director may designate certain state highways or portions of state highways as special economic development highways. If an application submitted to the director under this section involves travel of a nonconforming vehicle or combination of vehicles upon a special economic development highway, the director, in determining whether good cause has been shown that issuance of a permit is justified, shall
Page 63 of 203 consider the effect the travel of the vehicle or combination of vehicles will have on the economic development in the area in which the designated highway or portion of highway is located. (B) Notwithstanding sections 715.22 and 723.01 of the Revised Code, the holder of a special permit issued by the director under this section may move the vehicle or combination of vehicles described in the special permit on any highway that is a part of the state highway system when the movement is partly within and partly without the corporate limits of a municipal corporation. No local authority shall require any other permit or license or charge any license fee or other charge against the holder of a permit for the movement of a vehicle or combination of vehicles on any highway that is a part of the state highway system. The director shall not require the holder of a permit issued by a local authority to obtain a special permit for the movement of vehicles or combination of vehicles on highways within the jurisdiction of the local authority. Permits may be issued for any period of time not to exceed one year, as the director in the director's discretion or a local authority in its discretion determines advisable, or for the duration of any public construction project. (C)(1) The application for a permit issued under this section shall be in the form that the director or local authority prescribes. The director or local authority may prescribe a permit fee to be imposed and collected when any permit described in this section is issued. The permit fee may be in an amount sufficient to reimburse the director or local authority for the administrative costs incurred in issuing the permit, and also to cover the cost of the normal and expected damage caused to the roadway or a street or highway structure as the result of the operation of the nonconforming vehicle or combination of vehicles. The director, in accordance with Chapter 119. of the Revised Code, shall establish a schedule of fees for permits issued by the director under this section. (2) For the purposes of this section and of rules adopted by the director under this section, milk transported in bulk by vehicle is deemed a nondivisible load. (3)(a) Subject to division (C)(3)(b) of this section, a person who otherwise would be required to receive a permit under this section may move or operate a vehicle or combination of vehicles without that permit for a distance of two miles or less from the Ohio turnpike, provided the vehicle or combination of vehicles was operated without a special permit on the Ohio turnpike in accordance with rules adopted under section 5537.16 of the Revised Code. (b) The director or a local authority may prohibit the operation of a vehicle or combination of vehicles on any highway within two miles or less of the Ohio turnpike if the highway condition is insufficient to bear the weight of the vehicle or combination of vehicles. (c) As used in this division, "Ohio turnpike" has the same meaning as in section 5537.26 of the Revised Code. (D) The director or a local authority shall issue a special regional heavy hauling permit under division (A)(1) of this section upon application and payment of the applicable fee. However, the director or local authority may issue or withhold a special permit specified in division (A)(2) of this section. If a permit is to be issued, the director or local authority may limit or prescribe conditions of operation for the vehicle and may require the posting of a bond or other security conditioned upon the sufficiency of the permit fee to compensate for damage caused to the roadway or a street or highway structure. In addition, a local authority, as a condition of issuance of an overweight permit, may require the applicant to develop and enter
Page 64 of 203 into a mutual agreement with the local authority to compensate for or to repair excess damage caused to the roadway by travel under the permit. For a permit that will allow travel of a nonconforming vehicle or combination of vehicles on a special economic development highway, the director, as a condition of issuance, may require the applicant to agree to make periodic payments to the department to compensate for damage caused to the roadway by travel under the permit. (E) Every permit issued under this section shall be carried in the vehicle or combination of vehicles to which it refers and shall be open to inspection by any police officer or authorized agent of any authority granting the permit. No person shall violate any of the terms of a permit. (F) The director may debar an applicant from applying for a special permit under this section upon a finding based on a reasonable belief that the applicant has done any of the following: (1) Abused the process by repeatedly submitting false information or false travel plans or by using another company or individual's name, insurance, or escrow account without proper authorization; (2) Failed to comply with or substantially perform under a previously issued special permit according to its terms, conditions, and specifications within specified time limits; (3) Failed to cooperate in the application process for the special permit or in any other procedures that are related to the issuance of the special permit by refusing to provide information or documents required in a permit or by failing to respond to and correct matters related to the special permit; (4) Accumulated repeated justified complaints regarding performance under a special permit that was previously issued to the applicant or previously failed to obtain a special permit when such a permit was required; (5) Attempted to influence a public employee to breach ethical conduct standards; (6) Been convicted of a criminal offense related to the application for, or performance under, a special permit, including, but not limited to, bribery, falsification, fraud or destruction of records, receiving stolen property, and any other offense that directly reflects on the applicant's integrity or commercial driver's license; (7) Accumulated repeated convictions under a state or federal safety law governing commercial motor vehicles or a rule or regulation adopted under such a law; (8) Accumulated repeated convictions under a law, rule, or regulation governing the movement of traffic over the public streets and highways; (9) Failed to pay any fees associated with any permitted operation or move; (10) Deliberately or willfully submitted false or misleading information in connection with the application for, or performance under, a special permit issued under this section. If the applicant is a partnership, association, or corporation, the director also may debar from consideration for special permits any partner of the partnership, or the officers, directors, or employees of the association or corporation being debarred. The director may adopt rules in accordance with Chapter 119. of the Revised Code governing the debarment of an applicant.
Page 65 of 203 (G) When the director reasonably believes that grounds for debarment exist, the director shall send the person that is subject to debarment a notice of the proposed debarment. A notice of proposed debarment shall indicate the grounds for the debarment of the person and the procedure for requesting a hearing. The notice and hearing shall be in accordance with Chapter 119. of the Revised Code. If the person does not respond with a request for a hearing in the manner specified in that chapter, the director shall issue the debarment decision without a hearing and shall notify the person of the decision by certified mail, return receipt requested. The debarment period may be of any length determined by the director, and the director may modify or rescind the debarment at any time. During the period of debarment, the director shall not issue, or consider issuing, a special permit under this section to any partnership, association, or corporation that is affiliated with a debarred person. After the debarment period expires, the person, and any partnership, association, or corporation affiliated with the person, may reapply for a special permit. (H)(1) No person shall violate the terms of a permit issued under this section that relate to gross load limits. (2) No person shall violate the terms of a permit issued under this section that relate to axle load by more than two thousand pounds per axle or group of axles. (3) No person shall violate the terms of a permit issued under this section that relate to an approved route except upon order of a law enforcement officer. (I) Whoever violates division (H) of this section shall be punished as provided in section 4513.99 of the Revised Code. (J) A permit issued under this section for the operation of a vehicle or combination of vehicles is valid for the purposes of the vehicle operation in accordance with the terms of the permit notwithstanding any other violation of the motor vehicle and traffic laws of this state by the operator of the vehicle or combination of vehicles.
Page 66 of 203 Public Policy Priorities 2012-2013
Manufacturing is the engine that drives Ohio’s economy, and the mission of the Ohio Manufacturers’ Association is to protect and grow Ohio manufacturing. In a fiercely competitive global economy—where the need for continuous quality improvement, enhanced efficiency and productivity, and constant innovation is relentless— every public policy decision that affects Ohio’s business climate affects Ohio’s manufacturing competitiveness.
Ohio manufacturers need public policies that help create global competitive advantage, attract investment and promote growth. These policies span a broad spectrum of conditions that shape the business environment within which manufacturers operate. Major policy goals include the following:
• An Effective, Competitive Ohio Tax System
• An Efficient, Effective Workers’ Compensation System
• Access to Reliable, Economical Energy
• A Fair, Stable, Predictable Civil Justice System
• Clear, Consistent, Predictable Environmental Regulations
• A Modernized Transportation Infrastructure
• An Educated, Highly Skilled Workforce
Contact OMA Public Policy Services at (800) 662-4463 or [email protected] Page 67 of 203 POLICY GOAL: An Effective, Competitive Ohio Tax System
For Ohio to be successful in a global economy, the state’s tax structure must encourage investment and growth and be competitive nationally and internationally. A globally competitive tax system is characterized by (a) certainty, (b) equity, (c) simplicity and (d) transparency. Economy of collections and convenience of payment also are important considerations.
Generally, manufacturers support efforts to broaden the tax base, which enables lower rates. To preserve the integrity of the broad tax base and ensure fairness, credits and exemptions should be reduced and discouraged. Where needed, government incentives are best structured as grants rather than as tax credits. And, in general, earmarking and dedicating tax revenues should be discouraged.
Good tax policy also generates necessary revenues to support the essential functions of government. To ensure transparency regarding the true cost of government and the rate of its growth, however, funding government programs with fee revenue instead of general fund revenue should be discouraged. Good budgeting and spending restraint at all levels of government are vital to ensure a competitive tax environment.
Major tax reforms approved by the Ohio General Assembly in 2005 have led to significant improvements to a tax system that was for many years widely regarded as outdated. Reforms included reducing overall tax rates, eliminating tax on investment, broadening the tax base, providing more stable and predictable revenues, and simplifying compliance. While progress has been made, additional policy reforms are needed to support manufacturing competiveness, economic growth and prosperity in Ohio.
Tax policy priorities include the following:
• Preserve the integrity of Ohio’s 2005 tax reforms, including a zero-tolerance response to any efforts via legislation or the court system to carve out exemptions or credits to (a) avoid paying the Commercial Activities Tax (CAT) or (b) earmark any portion of CAT revenues for specific government services.
• Improve Ohio’s tax appeals process, which due to bad economic conditions and subsequent state budget cuts, staffing cutbacks and increased caseloads, has contributed to such a backlog of cases at the Ohio Board of Tax Appeals that it routinely takes two years to advance from the date of filing an appeal to the date of the first hearing.
• Preserve the repeal of Ohio’s estate tax, which for so long served as a disincentive for business owners to invest in existing businesses and as an impediment to the capital formation that is so vital to Ohio’s economy.
• Streamline and simplify the sales tax, which over time has become riddled with exemptions, carve-outs and credits that result in some taxpayers subsidizing exempted taxpayers. Exemptions, carve-outs and credits should be reviewed periodically for economic justification.
Contact OMA Public Policy Services at (800) 662-4463 or [email protected] Page 68 of 203 • Promote taxpayer uniformity. Consolidate and streamline the collection of municipal income tax by creating a uniform statewide municipal tax code, with uniform definitions of taxable income, consistent rules and regulations and a generic municipal income tax form.
• Lower the effective tax rate in Ohio by reducing the number of government entities that are taxing jurisdictions. This will help address the problem of pancaking state and local state taxes, which puts Ohio at a competitive disadvantage with many other states.
TAX Page 69 of 203 POLICY GOAL: An Efficient, Effective Workers’ Compensation System
The Ohio Manufacturers’ Association works with its member companies, the Ohio Bureau of Workers’ Compensation (BWC or Bureau), and the Ohio General Assembly to continually improve processes for injured workers and employers and to drive system costs down. An efficient and effective workers’ compensation system is built on the following principles:
• Injured workers will receive fair and timely benefits they need for getting back to work quickly and safely.
• All businesses will pay fair workers’ compensation rates commensurate with the risk they bring to the system.
• Workers’ compensation rates will be driven by actuarial data, and the state’s workers’ compensation insurance system will remain stable, solvent and actuarially sound.
• Workers’ compensation rates will not be structured in a way that punishes one class of employers to benefit another (such as the historical subsidization of group-rated employers by non-group-rated employers).
• The Ohio Bureau of Workers’ Compensation will deploy best-in-class disability management practices to drive down costs for employers and improve service for injured parties.
These outcomes would be good for manufacturers and good for Ohio’s overall economy.
Workers’ compensation policy priorities include the following:
• Design and deploy a competitive process that requires Managed Care Organizations (MCOs) to (a) meet rigorous performance standards established by the BWC and (b) compete on price for contracts with the BWC.
• Eliminate the “reasonable suspicion” standard from Ohio’s rebuttable presumption drug statute.
• Incorporate the Louisiana Pacific standards of “voluntary abandonment” for benefits.
• Improve claims management processes, transparency and accountability associated with Ohio’s Self-Insured Employers’ Guaranty Fund.
• Require credentialing/certification of all claims management personnel based on accepted private insurance industry standards.
• Establish retirement benefit offsets and/or age or number-of-weeks caps for permanent total disability (PTD) awards.
Contact OMA Public Policy Services at (800) 662-4463 or [email protected] Page 70 of 203 • Require claimants to show new and/or changed circumstances when filing for permanent total disability (PTD) or permanent partial disability (PPD) benefits more than once.
• Require Industrial Commission hearings to be recorded to improve consistency in outcomes.
• Allow telephonic hearings for permanent partial disability (PPD) claims to lower transaction costs.
• Establish an impairment standard (no consideration of non-medical factors) for permanent partial disability (PPD) cases.
• Terminate the compensation paid for temporary total disability (TTD) effective the date determined by the medical evidence establishing maximum medical improvement.
• Specify that if a temporary total disability (TTD) claim is suspended due to a claimant’s refusal to provide a signed medical release or attend the employer’s medical examination, the claimant forfeits his or her right to benefits during the period of the suspension.
• Allow employers to pay compensation and medical bills without losing the right to contest a claim (payment without prejudice).
• Require permanent partial disability (PPD) claims to be resolved by choosing either the claimant’s medical exam determination or the defendant’s medical exam determination—explicitly prohibiting an averaging of, or compromise between, the two.
• Require MCOs to demonstrate their medical arrangements and agreements with a substantial number of medical, professional and pharmacy providers participating in the BWC’s Health Partnership Program. These providers should be selected on the basis of access, quality of care and cost, rather than solely claimant preference. The focus should be on getting injured workers back to work quickly and safely, benefitting both the employee and the employer.
• Allow the BWC to require claimants to pay out-of-plan co-payments for selecting medical providers outside the approved MCO panel of providers, beginning the 46th day after the date of injury or the 46th day after starting treatment. However, employees should be allowed to use a provider outside the approved panel if they are located in certain parts of the state or outside the state where approved MCO providers cannot reasonably be accessed.
• Allow the BWC to modify existing rules for the Bureau’s Health Partnership Program to include administrative and financial incentives that reward high- performing MCOs and other providers. Possible incentives include bonus payments to providers who greatly exceed quality benchmarks established by the BWC to help reduce costs without sacrificing quality of services or outcomes.
WORKERS’ COMPENSATION Page 71 of 203 • Collect and include in the BWC’s healthcare data program annual data measuring the outcomes and savings of MCOs and other providers participating in the Health Partnership Program. This data should be made available to employers and the public. The more performance data that are collected, the more efficient and effective the system will become.
• Allow the BWC to recoup treatment costs from claims that ultimately are denied under BWC law. The Bureau should be able to request that an employee’s personal insurance or third-party payer reimburse the BWC for treatment amounts the Bureau paid on behalf of the employee. These payments should be deposited in the Surplus Fund Account. This will ensure injured workers will receive the treatments they need in a timely manner, while providing the Bureau a path to recoup payments that ultimately should not have been paid out by the system.
• Allow the BWC to develop new rules permitting the BWC to pay for certain medical services within the first 45 days of an injury. This would ensure that injured employees receive treatment regardless of whether their claims are eventually denied in the process. Also allow the Bureau to create rules allowing for immediate payment of prescriptions in certain circumstances. If a claim is ultimately disallowed, the services paid must be charged to the Surplus Fund Account as long as the employer pays its assessments into the Surplus Fund Account in the State Insurance Fund.
• Require injured workers to participate in the treatment process in a timely manner. Employees who refuse or unreasonably delay required treatment such as rehabilitation services, counseling, medical exams or vocational evaluations without a valid reason should forfeit their right to have the claim considered or to receive any compensation or benefits during the period of non-cooperation.
WORKERS’ COMPENSATION Page 72 of 203 POLICY GOAL: Access to Reliable, Economical Energy
Energy policy can enhance—or hinder—Ohio’s ability to attract business investment, stimulate economic growth and spur job creation, especially in manufacturing. State and federal energy policies must strike an effective balance between (a) ensuring access to reliable, economical sources of energy and (b) conserving energy to protect and preserve our natural resources.
The Ohio Manufacturers’ Association’s energy policy advocacy efforts are guided by these principles:
• Predictable, stable energy pricing achieved though effective energy rate design attracts job-creating capital investments.
• A modernized energy infrastructure will help maximize energy supplies and stabilize energy pricing and reliability.
• Strategic and operational collaboration among utilities, government and manufacturers and their supply chains produces better economic outcomes than do confrontational and adversarial regulatory proceedings.
• Ohio’s traditional industrial capabilities enable global leadership in energy technology innovation and manufacturing.
• Sustainability requirements can create profitable new market opportunities but must be economically feasible.
• Effective government regulation recognizes technical and economic realities.
Shaping energy policy in Ohio that aligns with these principles will support manufacturing competitiveness, stimulate economic expansion and job creation, and foster environmental stewardship.
Energy policy priorities include the following:
• Design an economic development discount rate for energy-intensive manufacturers that makes Ohio competitive with other states. This refers to a discount off an electric utility’s tariff rate to incentivize capital investment and job creation.
• Revise PUCO rules to remove barriers to the use of self-help strategies and to enhance reliability.
• Revise PUCO rules governing energy efficiency – including cogeneration and demand-side management – to achieve least-cost implementation and to incentivize interested parties to undertake innovative and least-cost efficiency projects.
• Ensure that electric distribution utilities comply with Ohio’s three percent cost cap for renewable energy in a least-cost manner so customers are not forced to pay above-market prices for renewable energy.
Contact OMA Public Policy Services at (800) 662-4463 or [email protected] Page 73 of 203 • Ensure rigorous PUCO monitoring and regulation of dealings between electric distribution utilities and their affiliates.
• Remove/mitigate barriers electric distribution utilities have created to inhibit/ prevent shopping and ensure consumers have the information and tools they need to understand and take full advantage of market opportunities. For example, utilities should (a) be required to explain how customers’ peak load contribution, which is used by suppliers to price competitive generation contracts, is calculated; (b) provide the calculated peak load contribution not just to suppliers but also to customers; and (c) be held accountable for errors that affect the value to customers of competitive supply contracts. The PUCO also should require utilities to develop interactive tools that help demonstrate the “price to compare” and make apples-to-apples comparisons between competitive supply offers.
• Ensure close coordination among the PUCO, PJM Interconnection, Ohio EPA, the Ohio Power Siting Board and Ohio manufacturers to ensure least-cost and most efficient use of generation and transmission resources.
• Adopt a state-level consumer advocacy role with PJM Interconnection regarding critical transmission issues and needs.
ENERGY Page 74 of 203 POLICY GOAL: A Fair, Stable, Predictable Civil Justice System
A state’s legal climate can be a major inducement or a major deterrent to business investment, growth and job creation. For manufacturers to invest and grow in Ohio, and to compete globally, Ohio’s civil justice system must be rational, fair and predictable. Manufacturers must be free to innovate and pursue market opportunities without fear of unreasonable exposure to costly lawsuits, while injured parties must have full recourse to appropriate measures of justice.
The OMA supports policy reforms that strike a reasonable balance between protecting consumers without overly burdening businesses that provide needed jobs, while also positioning Ohio advantageously relative to other states. We encourage policymakers to evaluate all proposed civil justice reforms by considering these questions:
• Will the policy fairly and appropriately protect and compensate injured parties without creating a “lottery mentality”?
• Will the policy increase—or decrease—litigation burdens and costs?
• Will the policy promote—or reduce—innovation?
• Will the policy attract—or discourage—investment?
• Will the policy stimulate—or stifle—growth and job creation?
Most importantly, we encourage our public-sector partners to ask themselves: “Will my position on critical tort reform issues enhance—or undermine—Ohio’s competitiveness in the global economy?”
Civil justice reform policy priorities include the following:
• Preserve Ohio’s tort reform gains of the last decade, in areas such as punitive damages, successor liability, collateral sources and statute of repose, which have helped strike a reasonable balance between protecting consumers without unduly burdening businesses that provide needed jobs, while positioning Ohio as an attractive state for business investment.
• Require asbestos claimants to make certain disclosures pertaining to claims that have been submitted to asbestos bankruptcy trusts to prevent “double dipping” without limiting or delaying the ability of asbestos claimants to seek recovery for their injuries.
• Enact TIPAC legislation (Transparency in Private Attorney Contracting) that requires public disclosure of most large contingency-fee contracts between government and personal injury attorneys to address concerns about the propriety of contingency-fee arrangements for the prosecution of public claims.
• Require consistent language when statutes intend to explicitly create a private right of action (i.e., a right to file suit) to curtail court rulings that result in unexpected liability for companies.
Contact OMA Public Policy Services at (800) 662-4463 or [email protected] Page 75 of 203 • Amend Rule 68 of the Ohio Rules of Civil Procedure to mirror Rule 68 of the Federal Rules of Civil Procedure, which makes a plaintiff who rejects a defendant’s settlement offer liable for the defendant’s post-offer costs if the plaintiff does not improve on the offer at trial.
• Reject any efforts to codify in Ohio statute the cy pres doctrine—an existing tool that permits, but does not require, a judge and the parties to a class action lawsuit to donate all undistributed class action proceeds to a charity or other non-profit organization.
• Reject legislation to enact a state false claims act. A bill was introduced in the 129th Ohio General Assembly (SB 143) that would allow individuals with knowledge of possible fraudulent activity to (a) file suit in state courts against companies doing business with public entities and (b) recover a portion of the money recovered by the State. Under this bill, false claims suits could be filed against any business selling services or goods to state government. While fraud against the government is not to be condoned, there are preferable alternatives to creating a whole new category of state-level lawsuit.
CIVIL JUSTICE SYSTEM Page 76 of 203 POLICY GOAL: Clear, Consistent, Predictable Environmental Regulations
Where environmental standards and regulations are concerned, manufacturers have a critical need for the following:
• Clarity, predictability and consistency
• Policies that reflect scientific consensus
• Commonsense enforcement
• Careful cost-benefit analysis as part of the policymaking process
Manufacturers also urge policymakers to exercise restraint in establishing state environmental standards and regulations that exceed federal standards and regulations, and to avoid doing so altogether without clear and convincing evidence that more stringent standards or regulations are necessary. At the same time, manufacturers understand that fair and reasonable regulations must be balanced with responsible stewardship of our natural resources.
Industry leads the way in solid waste reduction and recycling. Reduction and recycling include source reduction activities, reuse, recycling, composting and incineration. Industry is an enormous consumer of recycled materials, such as metals, glass, paper and plastics; manufacturers thus are strong advocates for improving recycling systems in Ohio and the nation.
Environmental policy priorities include the following:
• Expand the focus of Ohio’s state implementation plan for attaining National Ambient Air Quality Standards (NAAQS) and for reducing releases of substances regulated by EPA to the environment (air, water and land) beyond industrial sources to also include controls for non-industrial and mobile sources of releases.
• Revise existing statute to allow companies to appeal Ohio EPA Notices of Violation (NOVs) to Ohio’s Environmental Review and Appeal Commission.
• Require Ohio EPA to evaluate and use best practices for implementation of federal environmental regulations to avoid putting Ohio manufacturers at a competitive disadvantage because they face greater regulatory burdens than competitors from other states do based on Ohio EPA’s stricter interpretation of federal regulations.
• Give companies whose environmental permits are appealed by third parties the option, for a fee, of a “fast track” process and expedited resolution of the appeal, which otherwise can discourage investors because Ohio’s appeals process can go on for years.
Contact OMA Public Policy Services at (800) 662-4463 or [email protected] Page 77 of 203 • Expand opportunities for industry to reuse non-harmful waste streams. Beneficial reuse policies can result in less waste and more recycling of industrial byproducts.
• Review Ohio’s solid waste regulations, including procedures for disposing universal waste streams, to ensure safe and uniform disposal practices that are consistent with best practices used in other states.
• Reject state-level efforts to implement product composition mandates. Such standards and requirements are best addressed at the federal level rather than through a patchwork of differing state-level requirements.
• Reject extended producer responsibility policies that would shift responsibility for recycling certain consumer products from consumers to manufacturers.
ENVIRONMENT Page 78 of 203 POLICY GOAL: A Modernized Transportation Infrastructure
To remain competitive and maximize the economic benefits of Ohio’s manufacturing strength, the State must continue to invest in updating and expanding Ohio’s multi-modal transportation infrastructure, including roads, bridges, rails and ports. Continued investment in these resources will be critical to providing Ohio businesses with flexible, efficient, cost-effective shipping options.
Transportation infrastructure policy priorities include the following:
• Modify Ohio’s rules and regulations to allow greater flexibility and efficiency in the truck permitting process and to ensure Ohio’s truck permitting standards and processes are competitive with other states with regard to requirements, fees and responsiveness.
• Enhance shipping flexibility by supporting the federal Safe and Efficient Transportation Act. This bill would allow states to tailor regulations to meet state-level transportation needs linked to a state’s particular economic assets and strengths.
Contact OMA Public Policy Services at (800) 662-4463 or [email protected] Page 79 of 203 POLICY GOAL: An Educated, Highly Skilled Workforce
A robust economy requires an adequate, reliable supply of skilled workers who have the technical knowledge and skills required to meet global standards for quality and productivity, and who are able to think critically, work collaboratively and drive innovation. Sustained growth in manufacturing productivity will require not only a new generation of globally competent workers interested in the variety of roles within manufacturing careers but also incumbent workers willing to embrace lifelong learning so they can continuously upgrade their competencies to keep pace with technological advancements and global competition.
Workforce development policy priorities include the following:
• Expand the use of the National Association of Manufacturers’ “Manufacturing Skills Certification System.” This system of nationally portable, industry recognized, “stackable” credentials is applicable to all sectors in the manufacturing industry. The credentials validate foundational skills and competencies needed to be productive and successful in entry-level positions in any manufacturing environment. Credentials can be earned from both secondary and postsecondary educational programs.
• Expand the use of cooperative education, internships and apprenticeships. These experiential learning programs enhance talent recruitment and retention because participating students are exposed to company-specific, real-world job expectations and experiences. Students develop strong leadership and management skills by working closely with company staff who serve as their mentors/supervisors, and participating companies benefit from reduced recruitment and training costs.
Contact OMA Public Policy Services at (800) 662-4463 or [email protected] Page 80 of 203 Save the Date
When: April 14-16, 2013
Where: Eden Roc Renaissance Miami Beach 4525 Collins Avenue Miami Beach, FL 33140
The hotel is located approximately 19 miles from the Miami International Airport (MIA) in Miami, FL and approximately 35 minutes from the Fort Lauderdale Airport (FLL) in Fort Lauderdale, FL. The hotel is located approximately 10 minutes from South Beach.
Rates: The hotel room rate will be available at $229.00 per night, plus applicable taxes for conference participants.
Time: The conference will begin at approximately 3:00 p.m. on Sunday, April 14 and end at approimately 12:00 p.m. on Tuesday, April 16.
The quarterly meeting of the National Public Affairs Steering Committee (NPASC) will begin at noon on Sunday, April 14.
Page 81 of 203
You are cordially invited to attend a
Manufacturers’ Evening Dinner Honoring House Speaker Bill Batchelder
Monday, March 18, 2013, 5:30 PM
G. Michael's Bistro & Bar, 595 S 3rd St. Columbus, OH 43215
Ohio House Republican Organizational Committee Treasurer: Matthew Yuskewich, 4679 Winterset Drive, Columbus, Ohio 43220
Batchelder for Representative Committee Treasurer: Homer Charles Davis, 4086 Irvine Oval, Medina, OH 44256
Contact Ryan Augsburger [email protected] or Rob Brundrett [email protected] at (614) 224-5111 to reserve a spot or for more information.
Paid for by the OMA PAC, Ryan Augsburger, Treasurer 33 N. High Street, 6th Floor, Columbus, Ohio 43215
Page 82 of 203
You are cordially invited to attend a Manufacturers’ Evening Dinner Honoring Senate Pro Tempore Chris Widener Senate Finance Chairman Scott Oelslager Senate Finance Vice Chair Bill Coley
Tuesday, June 4, 2013, 5:30 PM
Place: TBD
The Republican Senate Campaign Committee Treasurer: Matthew Yuskewich, 4679 Winterset Drive, Columbus, Ohio 43220
Committee to Elect Chris Widener Treasurer: Peggy Hupp, 23 South Center St., Springfield, OH 45502
Oelslager for Ohio Committee Treasurer: Christine Holder, 6706 Lake Cable Avenue NW, North Canton, OH 44720
Friends of Bill Coley Treasurer: Carolyn Coley 8265 Cherry Laurel Dr., Liberty Township, OH 45044
Contact Ryan Augsburger [email protected] or Rob Brundrett [email protected] at (614) 224-5111 to reserve a spot or for more information.
Paid for by the OMA PAC, Ryan Augsburger, Treasurer 33 N. High Street, 6th Floor, Columbus, Ohio 43215
Page 83 of 203 TO: OMA Government Affairs Committee FROM: Ryan Augsburger / Rob Brundrett DATE: March 6, 2013 SUBJ: Energy Public Policy Report
Electricity Rates Policy shifts in 2012 have transitioned Ohio from a state that sets electric rates based on state regulation towards a competitive pricing model where prices are set by market auction. The PUCO approved a modified AEP rate plan in August. The approved AEP plan paves the way for unlimited shopping while compensating the utility for the transition. Manufactures will be required to pay transition costs. The OMA Energy Group intervened in all cases to advocate for policies to protect the manufacturing sector as a whole and has filed appeals on many fronts.
While their rate plan was previously approved and in effect, Duke Energy recently filed to change (increase) capacity pricing, emulating the AEP decision. See counsel’s report.
The AEP cases considered together with Duke and FirstEnergy signals a sea change in the way Ohio regulates and prices electricity for all customer classes. The new environment raises questions on the role of government and the role of programs designed to help customers manage electricity consumption.
Electricity Transmission Constraints NE Ohio Last autumn Steve Herling, Vice President, Planning, for PJM Interconnection described to the OMA Energy Group the significant transmission constraints facing the greater Cleveland region. The constraints will require some combination of costly investments in new transmission lines and new generation. If you have operations in the region, you’ll want to pay attention to this issue in 2013. PJM presentation materials are available upon request.
Shale Gas In 2012 policymakers acted on law changes to facilitate exploration and production of Ohio’s shale gas resources. State public policy impacting the development of gas from shale, and downstream business opportunities will be a top state focus in 2013.
The OMA has held talks with industry leaders of the American Natural Gas Association. The national trade group is working to promote policies to increase demand and usage of natural gas. Possible areas for expanded utilization: power generation, transportation propulsion, fuel cell, fleet transportation. ANGA organized and hosted a natural gas vehicles summit in October to discuss options to promote natural gas as a fuel source for cars and trucks. A conference for manufacturing leaders is tentatively planned for September 2013.
Two rounds of pipeline infrastructure upgrades and investment have been announced over the past few months. Billions of dollars of system upgrades are literally in the pipeline to serve the abundant new supply.
Legislation (see energy bill tracker)
Page 84 of 203 HB 59 State Budget. The main operating budget will eclipse all state legislation from now through July. The bill makes significant changes to Ohio’s business tax structure. Notably, the bill proposes a new severance tax structure largely intended to levy a competitive tax on horizontal drilling. The new revenue would be used to help fund personal income tax reductions. The General Assembly took a dim view of the Governor’s proposal last year. see attached: severance tax modernization
The budget includes regulatory revisions related to shale gas including: regulations governing brine disposal and new regulations on radioactive material waste emanating from the hydraulic fracturing process.
Regarding electricity rates, the budget authorizes the PUCO to extend the existing (seven) reasonable arrangements through 2018. The PUCO is authorized to mutualize the cost of the delta revenue from all customers (combined) in investor-owned utility territory.
SB 58 Energy Efficiency & Renewable Energy Standards. Senator Bill Seitz (R – Cincinnati) chairs the Senate Public Utilities Committee. See attached memo from Senator Seitz announcing intentions to review renewable energy and energy efficiency standards enacted in SB 221. Also see OMA letter to Senator Seitz suggesting topics worthy of review.
Ohio House 21st Century Manufacturing Task Force The General Assembly has convened a task force to learn about manufacturing and make policy recommendations. The task force, supported by the OMA visited seven Ohio manufacturers and heard from dozens of others in testimony. Energy was a frequent topic. (See included summary of task force testimony)
Page 85 of 203 Energy The OMA shipped Senator Seitz a letter with a few AEP Offers Two New Industrial Energy Efficiency suggestions. The OMA thanks the senator for leading Incentives an open, deliberative process for review of the standards. 2/21/2013
Manufacturers planning to upgrade their hydraulic Senate to Evaluate Ohio's Renewable Energy & injection molding machines to all-electric equivalents Efficiency Standard this year should consider applying to AEP's pilot incentive program. AEP will reserve $0.05/kWh Senator Bill Seitz (R – Cincinnati), chairman of the saved for projects based on savings estimates, and Senate Public Utilities Committee, announced his will pay $0.07/kWh upon verification of savings. plans to "begin a meaningful review of the energy efficiency and renewable portfolio standard issues last AEP is limiting applications to 10 facilities for this pilot addressed by Senate Bill 221 in 2008 and Senate Bill program, and all applications are due by April 30, 315 in 2012." He intends to introduce legislation and 2013. A savings calculation is required for the conduct hearings. application. OMA's energy efficiency partner, Go Sustainable Energy LLC, is available to assist with the In his memo to interested parties, Senator Seitz savings calculation and application. Contact John invites input regarding various provisions of Ohio's Seryak at Go Sustainable Energy. energy efficiency policy, including: "Whether the annual targets for energy efficiency should be frozen in place given the changes occurring since And, manufacturers' HVAC and lighting systems are 2008; whether the “3% cost cap” contained in the eligible for AEP's Retro-commissioning legislation should be revised, and whether it has been program. Retro-commissioning targets low-cost/no- properly interpreted by the PUCO, and whether and to cost operations or controls changes. Incentives of 2 what extent utilities should be free to exceed the 3% $0.13/kWh saved, capped at $0.10 /ft , are available cost cap if they wish to do so; and whether and to for projects which payback in less than 2 years, what extent the cost incurred by utilities in complying including lighting controls, economizers, supply air with the energy efficiency/renewable portfolio temperature resets, demand control ventilation, and standard mandates are or should be bypassable or even scheduling changes and temperature non-bypassable charges," among other provisions. setbacks. More information is on AEP's website or contact OMA's energy efficiency engineer, John Interested members should contact OMA's Ryan Seryak. 2/27/2013 Augsburger, who will be coordinating manufacturers' response. Additionally, members can register for Join OMA Work Group to Boost Your Energy either in-person or phone participation in the OMA Efficiency Programs Energy Committee on February 21. 2/7/2013
Distributed Generation: High Cost of Standby OMA is offering members from all energy-supply Power is Obstacle territories in the state the opportunity to participate in one – or both – of two energy work groups in conjunction with OMA’s consulting energy efficiency Which technologies will be necessary to ensure engineer, John Seryak of Go Sustainable Energy plentiful, affordable energy for Ohio for the long- LLC. Participating members will have access to the term? most up-to-date information, contacts, and opportunities in Ohio in the areas of combined heat Andrew Thomas, Executive in Residence at the and power (CHP) and waste heat recovery (WER) or Energy Policy Center of the Levin College of Urban energy efficiency. Affairs at Cleveland State University, describes the opportunities of distributed generation for large Here's information that describes this opportunity for consumers, including energy intensive manufacturers, plant engineers and facility staff of OMA and the utilities’ financial challenges (standby costs) members. 2/27/2013 to supply backup power to these consumers if their OMA to Senator Seitz on Energy Efficiency onsite generation fails. 01/31/2013 AEP Endorses E3 Program for Manufacturers Senator Bill Seitz (R- Cincinnati) plans to introduce a bill which will serve as a vehicle to focus on possible (video) changes to the state’s energy efficiency standard for electric utility companies. He asked interested parties While available to a wide variety of manufacturers, not for suggested topics for his committee, the Public just AEP Ohio customers and not just central Ohio Utilities Committee, to study.
Page 86 of 203 based companies, AEP has gone on record as Augsburger to describe service interruptions and supporting the E3 program that helps manufacturers business impacts; the data could be useful in improve energy and operational efficiency. protecting manufacturing's interests in the case. 1/17/2013
Here is a video (7 min.) that highlights Ohio State Agencies Produce CNG Recommendations manufacturer, and OMA member, C.O.W. Industries, which has benefited from the program. State agencies charged by the legislature released a report this week on expanded use of compressed OMA engineering consultant, John Seryak, of Go natural gas (CNG) and natural gas vehicles (NGVs). Sustainable Energy LLC, says the best candidates for “Increased E3 include small to mid-size manufacturers interested The agencies recommended: and expanded usage of CNG and NGVs should be in identifying energy efficiency opportunities, reducing encouraged and actively pursued by the state and or reselling their waste stream, and identifying water- political subdivisions whenever it is economical and saving opportunities. practical to do so. As a result of the momentum generated thus far, the state should immediately For more information about related services and establish an advisory group comprised of available grant funding, contact Brandi Whetstone, stakeholders and interested parties, made up of both Mid-Ohio Regional Planning Commission; her number public and private entities, for the purpose of strategizing and determining how best to advance 1/30/2013 is (614) 233-4174. CNG and NGV development in Ohio.”
If You Have a FirstEnergy DSE2 Rider Exemption, This advisory group would look at issues of: fleet Read On transition, infrastructure expansion, incentives, financial assistance, and education. 1/17/2013 Manufacturers who have filed for an exemption from First Energy's DSE2 rider because of their Turning Point Solar Project Abruptly Comes to an documented energy efficiency projects are required to End file an annual report with FirstEnergy by January 31, 2013. The Turning Point solar project announced in October 2010 to much fanfare is on life support today. This The one-page form requests verification that the week, the Public Utilities Commission of Ohio (PUCO) energy savings that qualified your company for the voted 3-1 to strip the Turning Point Solar project from rider exemption are ongoing. Failure to file on time an AEP case. will result in the DSE2 rider being added to your bill. Although PUCO staff determined the project was Members who have filed for this exemption should necessary, the commissioners felt otherwise. The have received the annual report form by email from commissioners said that AEP needed to do more to FirstEnergy’s Rachel Greer; her phone number is justify Turning Point. Turning Point was at one time (330) 384-5534. envisioned to be one of the largest solar generating facilities east of the Mississippi River. This week’s If you need further information or assistance, contact decision prevents AEP from funding the project OMA’s John Laughman. through charges on consumers' utility bills and appears to put a hold on the project. 1/10/2013 AEP Seeks “Cost Recovery” for June Storm Damage OMA Signs Letter to the President Urging Keystone Pipe Action American Electric Power (AEP) has requested permission of the Public Utilities Commission of Ohio On Wednesday, the National Association of (PUCO) to charge customers for repairs resulting Manufacturers submitted a letter to the President from a series of storms in June and July last urging him to work to approve the Keystone XL year. The reimbursement request of $61.8 million Pipeline. The OMA and 151 other businesses and would be recouped from customers over one business groups signed on the letter. year. The OMA Energy Group will be intervening in the proceedings on behalf of manufacturers. The pipeline is estimated to create 20,000 manufacturing and construction jobs, and more than Meanwhile, another case is pending at the PUCO that 118,000 spin-off jobs. The project has been in limbo would determine a funding formula for electric utility for nearly five years and continues to be reviewed by distribution investments. Manufacturers in the AEP the current the administration. 12/20/2012 service area that have experienced ongoing reliability issues are encouraged to contact OMA’s Ryan
Page 87 of 203 The Cost of Lighting Up the Holidays resource acquisition have proven that energy efficiency resources can be calculated reasonably OMA Connections Partner, Duke Energy, compiled well and relied upon as a key resource to meet the costs associated with lighting up your home or electricity system demands. Costs, resource office this holiday. characteristics, and availability over time can be analyzed and determined with reasonable Assuming a cost of 10 cents per kWh, operating an certainty. As a result, to cite just one example, the average of five hours per day, a display that uses 10 four states of the U.S. Pacific Northwest are now 25-bulb strings of C7 lights would cost an estimated relying with confidence on energy efficiency to meet $19 dollars per month, while a similar display using 85% of their new demand for electricity over the next C9 bulbs might cost $26 per month. twenty years.”
Ten sets of 100 mini-lights lights operating at the The study analyses acquisition models from several same rate would cost $6 per month. states and Canadian provinces. 12/12/2012
The newer, light emitting diode (LED) holiday lights A View to 2040 use only 0.04 watts per bulb, or 1/10 the amount of miniature bulbs. Ten sets of 100 LED bulbs would ExxonMobil released its annual “Outlook for Energy,” cost only 60 cents per month to operate. which assesses “future trends in energy supply, demand and technology to help guide the long-term Duke Energy – and all investor-owned utilities - has investments that underpin our business resources to help you with your real lighting and strategy.” This one looks out to the year 2040. energy conservation projects. Contact OMA’s John Laughman so we can connect you. 12/18/2012 Key findings of this year's Outlook include: "Efficiency will continue to play a key role in solving our energy challenges; Energy demand in developing nations 39,000 Jobs Linked to Ohio Shale and Gas will rise 65 percent by 2040 compared to 2010, reflecting growing prosperity and expanding A new study finds that more than 39,000 Ohio jobs economies; Technology is enabling the safe will be created by the shale drilling industry. The development of once hard-to-produce energy study states that the number of jobs attributed to this resources, significantly expanding available supplies industry in Ohio could easily triple by the end of the to meet the world’s changing energy needs; and, Oil decade. The report was financed by groups that are will remain the No. 1 global fuel, while natural gas will advocating for shale drilling, including the American overtake coal for the No. 2 spot." 12/12/2012 Petroleum Institute and America’s Natural Gas Alliance. 12/20/12 Supreme Court Upholds AEP “Excessive Earnings” Order Energy Efficiency Opportunities for Manufacturers (Video) In a 6 to 1 decision, the Ohio Supreme Court this week upheld a PUCO decision that American Electric Power had profits that were excessive enough to If you are wondering what energy efficiency is all require a financial penalty. AEP had argued that the about, OMA has created a 14-minute video that law, Senate Bill 221, passed in 2008, was too vague summarizes the benefits and opportunities for Ohio to be enforceable. The PUCO had fined AEP $42 manufacturers. In this video, professional energy million. engineers succinctly describe which energy-reducing projects typically provide a good return on investment Justice Paul Pfeifer disagreed with his colleagues on in manufacturing settings. the adequacy of the level of the penalty: “Our deference to…the commission’s interpretation of To learn more about how you can investigate energy statutes diminishes this court’s role in reviewing the and cost-savings for your facility, contact OMA's John commission’s determinations and shifts the balance Laughman. 12/12/2012 too far in favor of the executive branch in the separation of powers. Ultimately, Ohio consumers Energy Efficiency Acquisition Models Compared pay the price for that deference. Judging from Ohio utilities’ status at the top of the heap in profits From a new study by the Institute for Industrial nationwide—Columbus & Southern Power (AEP) had Productivity: “Thinking about energy efficiency as a the highest equity return of 143 investor owned “resource” that can be purchased is a novel concept. regulated electric utilities in the United States in Energy savings resulting from more efficient use of 2009—that price is steep.” 12/6/2012 energy is indeed something that cannot be seen – it is energy that is not being consumed ... Over thirty years of practical experience in energy efficiency
Page 88 of 203 Are Electricity Markets Working? The OMA had circulated an energy efficiency fact sheet to call for more study of the issue before In the energy policy arena, there’s a simmering, and legislative action. The OMA has commissioned economically important, debate about whether research on the issue. 11/30/2012 electricity markets organized through “Regional Transmission Organizations” (RTO’s) are working, or Does Ohio Need Energy Efficiency Standards? whether RTO price signals fail to develop adequate generation resources. Andrew Thomas, Executive in Residence at the Recently, the American Public Power Association Energy Policy Center of the Levin College of Urban took issue with a white paper from the Compete Affairs at Cleveland State University, offers a good Coalition (made up of merchant electricity generators) perspective on the state’s energy efficiency standards that praised the RTO markets. enacted in Senate Bill 221 several years ago. 11/26/2012 “Instead of inducing new resource development, RTO price signals provide a financial incentive for Ohio’s Energy Efficiency Standards: Are They incumbent generation owners to keep supplies Working? constrained and drive up prices. The financial benefits of constrained supplies can be seen in the presentations by merchant generation owners to the Last week, Leadership Briefing reported that among financial community wherein factors that restrict items rumored for lame duck legislative consideration power supply, such as the potential closure of coal is a reversal on the state’s energy efficiency plants, are touted as a benefit to their earnings,” wrote standards enacted several years ago in Senate Bill APPA. 221. The standards were designed to help avoid or delay the high cost of building new generation plants. “Investment in new generation requires long-term contracting and not the volatile revenue streams from This week, the OMA, in collaboration with the the RTO markets, as confirmed by a recent APPA American Council for an Energy-Efficient Economy study finding that 98 percent of the new capacity (ACEEE), developed a fact sheet that includes data constructed in 2011 was built under utility or customer about the state’s progress against the standards. ownership and not for sales into RTO markets.” 12/6/2012 The OMA backs the lowest-cost electricity options for LNG export vs. Manufacturing Feedstock manufacturers and other consumers, and has commissioned comprehensive research about the effectiveness and affordability of energy efficiency A much anticipated, and twice delayed, federally- programs. That study is due early in 2013. commissioned study on the national economic effects of LNG exporting appears to give a green light for permitting LNG exporting facilities. In the meantime, OMA’s position is: Any proposal to weaken, reduce or dismantle the energy efficiency This controversial study outcome triggers a big requirements established in SB 221 should be concern: the rich asset that lies beneath Ohio, and received with caution and subjected to thoughtful, other shale formation regions of the country, might thorough, data-driven study and analysis, so all now be put on the balance sheet of other nations, stakeholders will have the information they need to rather than on developing the infrastructure that would determine what energy policies are best – and improve the competitiveness of U.S. manufacturing. produce the lowest-cost electricity – for Ohio And here is a Forbes piece on the issue. 12/7/2012 customers. 11/16/2012
No Lame Duck Energy Efficiency Amendment Large Capacity Costs Looming in Northern Ohio
The Cleveland Plain Dealer’s John Funk reports, Manufacturers with operations in FirstEnergy service “Ohio's energy efficiency standards will remain intact - territory should be preparing for significant increases - for now. FirstEnergy Corp. has abandoned its in capacity prices in 2015. An example: a one shift behind-the-scene lobbying campaign to persuade operation using 5,000,000 kWh with a 40% load factor lawmakers to gut a four-year-old law requiring utilities could go from an annual capacity cost of $10,500 to help customers use less electricity by switching to today to $181,000 starting June 2015, due to the energy efficient equipment and lighting.” results of the capacity auction for the period. 11/16/2012
Page 89 of 203 FirstEnergy and AMP Ohio to Build Gas Fired Energy Efficiency Standards Questioned Generator Among items rumored for lame duck legislative FirstEnergy Corporation inked an agreement with consideration is a reversal on the state’s energy American Municipal Power, Inc. (AMP) for the efficiency standards enacted several years ago in construction of a natural gas peaking facility in the Senate Bill 221. The standards were designed to company's Eastlake unit. The natural gas plant is avoid or delay the high cost of building new projected to come online by early 2016. generation plants.
FirstEnergy will oversee the construction phases of The Toledo Blade this week editorialized on the the four combustion turbine units having capacity issue. generation of 873 megawatts. AMP will provide finances for the construction and will hold 75% of the The OMA backs the lowest cost electricity options for output. FirstEnergy will bankroll the rest and own manufacturers and others and has commissioned 25% of the production. 11/16/2012 research on the effectiveness of energy efficiency programs. 11/02/2012 FirstEnergy to Make Big Transmission Upgrades
FirstEnergy Corp. has announced plans to build a series of transmission projects to help enhance service reliability across its five-state service area. The projects have been approved by PJM Interconnection (PJM), the regional transmission organization.
According to FirstEnergy, its "Energizing the Future" initiative will include “transmission projects – new or rebuilt high voltage power lines, new substations, and the installation of specialized voltage regulating equipment – in northern Ohio. PJM has determined the projects are needed to enhance system reliability as coal-fired power plants in the region are deactivated based on the U.S. EPA Mercury and Air Toxics Standards (MATS) and other environmental rules.”
One of the key projects involves building a new 345- kilovolt (kV) transmission line that will run more than 100 miles from the company's Bruce Mansfield Plant in Beaver County, Pa., to a new substation that will be built in the Cleveland suburb of Glenwillow. 11/16/2012
Page 90 of 203 Energy Legislation Prepared by: The Ohio Manufacturers' Association Report created on March 3, 2013
HB12 LICENSED OPERATOR REQUIREMENT (ROEGNER K) To eliminate the licensed operator requirement for gaseous fuel and fuel oil fired boilers that comply with certain safety and engineering standards. Current Status: 3/6/2013 - House Commerce, Labor and Technology, (Third
Hearing) All Bill Status: 2/20/2013 - House Commerce, Labor and Technology, (Second Hearing) 2/13/2013 - House Commerce, Labor and Technology, (First Hearing) 1/30/2013 - Referred to Committee House Commerce, Labor and Technology 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_12
HB41 OIL-GAS DRILLING HEALTH-SAFETY STANDARDS (HAGAN R) To authorize a political subdivision to enact and enforce health and safety standards for oil and gas drilling and exploration. Current Status: 2/13/2013 - Referred to Committee House Agriculture and
Natural Resources All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_41
HB42 OIL AND GAS LAW CHANGES (HAGAN R) To revise the requirements concerning an oil and gas permit application, an oil and gas well completion record, designation of trade secret protection for chemicals used to drill or stimulate an oil and gas well, and disclosure of chemical information to a health care professional or emergency responder, to require an owner to report all chemicals brought to a well site, and to make other changes in the Oil and Gas Law. Current Status: 2/13/2013 - Referred to Committee House Agriculture and
Natural Resources All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_42
HB59 BIENNIAL BUDGET (AMSTUTZ R) To make operating appropriations for the biennium beginning July 1, 2013, and ending June 30, 2015; to provide authorization and conditions for the operation of state programs. Current Status: 3/8/2013 - House Primary and Secondary Education
Subcommittee, (Ninth Hearing) All Bill Status: 3/7/2013 - House Health and Human Services Subcommittee, (Sixth Hearing) 3/7/2013 - , (Fourth Hearing) 3/7/2013 - House Higher Education Subcommittee, (Eighth Hearing) 3/7/2013 - House Transportation Subcommittee, (Eighth Hearing) 3/7/2013 - House Agriculture and Development Subcommittee, (Sixth Hearing)
Page 91 of 203 3/7/2013 - House Primary and Secondary Education Subcommittee, (Eighth Hearing) 3/6/2013 - House Health and Human Services Subcommittee, (Fifth Hearing) 3/6/2013 - , (Third Hearing) 3/6/2013 - House Higher Education Subcommittee, (Seventh Hearing) 3/6/2013 - House Transportation Subcommittee, (Seventh Hearing) 3/6/2013 - House Agriculture and Development Subcommittee, (Fifth Hearing) 3/6/2013 - House Primary and Secondary Education Subcommittee, (Seventh Hearing) 3/5/2013 - Senate Ways and Means, (First Hearing) 3/5/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 3/5/2013 - , (Second Hearing) 3/5/2013 - House Higher Education Subcommittee, (Sixth Hearing) 3/5/2013 - House Transportation Subcommittee, (Sixth Hearing) 3/5/2013 - House Agriculture and Development Subcommittee, (Fourth Hearing) 3/5/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 3/1/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 2/28/2013 - , (Second Hearing) 2/28/2013 - House Primary and Secondary Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Agriculture and Development Subcommittee, (Third Hearing) 2/28/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/28/2013 - House Higher Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Transportation Subcommittee, (Fifth Hearing) 2/27/2013 - House Ways and Means, (First Hearing) 2/27/2013 - House Agriculture and Development Subcommittee, (Second Hearing) 2/27/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 2/27/2013 - House Transportation Subcommittee, (Fourth Hearing) 2/27/2013 - House Higher Education Subcommittee, (Fourth Hearing) 2/26/2013 - House Primary and Secondary Education Subcommittee, (Third Hearing) 2/26/2013 - House Agriculture and Development Subcommittee, (First Hearing) 2/26/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/26/2013 - House Transportation Subcommittee, (Third Hearing)
Page 92 of 203 2/26/2013 - House Higher Education Subcommittee, (Third Hearing) 2/21/2013 - House Higher Education Subcommittee, (Second Hearing) 2/21/2013 - House Health and Human Services Subcommittee, (Second Hearing) 2/21/2013 - House Transportation Subcommittee, (Second Hearing) 2/21/2013 - House Primary and Secondary Education Subcommittee, (Second Hearing) 2/20/2013 - House Higher Education Subcommittee, (First Hearing) 2/20/2013 - House Health and Human Services Subcommittee, (First Hearing) 2/20/2013 - House Transportation Subcommittee, (First Hearing) 2/20/2013 - House Primary and Secondary Education Subcommittee, (First Hearing) 2/14/2013 - House Finance and Appropriations, (Fourth Hearing) 2/13/2013 - Referred to Committee House Finance and Appropriations 2/13/2013 - House Finance and Appropriations, (Third Hearing) 2/12/2013 - House Finance and Appropriations, (Second Hearing) 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
HB63 TAX CREDIT- OIL AND GAS PRODUCTION (CERA J, O'BRIEN S) To establish a nonrefundable commercial activity tax credit for companies involved in horizontal well drilling or related oil and gas production services that hire Ohio residents or dislocated workers who have enrolled in or completed a federally registered apprenticeship program. Current Status: 2/20/2013 - Referred to Committee House Ways and Means All Bill Status: 2/14/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_63
SB17 OIL-GAS LAW CHANGES (SKINDELL M) To revise the requirements concerning an oil and gas permit application, an oil and gas well completion record, designation of trade secret protection for chemicals used to drill or stimulate an oil and gas well, and disclosure of chemical information to a health care professional or emergency responder, to require an owner to report all chemicals brought to a well site, and to make other changes in the Oil and Gas Law. Current Status: 2/13/2013 - Referred to Committee Senate Energy and Natural
Resources All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_17
SB34 ELECTRIC DISTRIBUTION COMPANIES (JORDAN K) To repeal the requirement that electric distribution utilities and electric services companies provide 25% of their retail power supplies from advanced and renewable energy resources by 2025. Current Status: 2/13/2013 - Referred to Committee Senate Public Utilities All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_34
Page 93 of 203
SB46 OIL AND GAS LAW (SCHIAVONI J, LAROSE F) To increase criminal penalties for violations of the Oil and Gas Law relating to improper disposal, transport, and management of brine, to establish a criminal penalty for a negligent violation of certain provisions of the Solid, Hazardous, and Infectious Wastes Law, and to require the revocation of a violator's permits and registration certificate and denial of future permit and registration certificate applications under the Oil and Gas Law. Current Status: 2/20/2013 - Referred to Committee Senate Energy and Natural
Resources All Bill Status: 2/19/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_46
SB58 RETAIL ELECTRIC SERVICE (SEITZ B) To review and possibly modify the energy efficiency, peak demand reduction, and alternative energy resource provisions established by Ohio law governing competitive retail electric service. Current Status: 2/27/2013 - Introduced All Bill Status:
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_58
Page 94 of 203
Modernizing Ohio’s Severance Tax A Fair, Competitive Tax on Oil and Gas Drillers Will Mean Lower Income Taxes for Every Ohioan Asking energy corporations to pay a fair share of the profits they make by tapping Ohio’s oil and gas resources is a key part of Gov. John Kasich’s plan to cut state income taxes for every working Ohioan, including small-business owners who are key to job creation. At the same time, the governor’s plan will eliminate the severance tax rates for traditional, small-volume gas producers, who have long been the backbone of Ohio’s local oil and gas industry, and require companies that are using new high-volume horizontal drilling technology to pay a modest increase in severance taxes, which are still below other oil and gas producing states. The Kasich Plan Tackles an Urgent Problem: Ohio’s High Income Taxes Hold Back Job Creation: Ohio taxpayers carry one of the heaviest income tax burdens in America according to the Tax Foundation, which compares taxation rates in the 50 states. High income taxes not only limit the economic well-being and purchasing power of Ohio families, they also slow the state’s economic recovery and consume dollars that small-business owners could invest in new jobs. Gov. Kasich’s tax reform plan attacks this problem head-on by reducing income tax rates for every Ohioan – a 20 percent tax cut over the next three years. Fair and competitive severance tax rates on the largest crude oil and natural gas drillers are an important part of the plan. Ohio’s Obsolete Taxes on Oil and Gas Drilling Create a Windfall for Corporate Giants: It’s been nearly 30 years since the state has comprehensively updated the way it taxes oil and gas drillers, going back to an era when most Ohio producers ran small, local operations. But new technology allows producers to extract millions of dollars’ worth of natural gas, natural gas liquids and oil from beneath our feet. Today, Ohio’s mineral riches are traded in a vast global marketplace and the world’s largest and most important energy corporations are flocking here to drill. In fact, more than $3 billion has been invested in Ohio by these energy companies over the past year. Current severance tax rates are: 20 cents on a $96 barrel of oil (NYMEX Cushing price – 1/29/2013) 3 cents on a $3.23 MCF (million cubic feet) unit of natural gas – (NYMEX Henry Hub price – 1/29/2013) New Tax Rules on Oil and Gas Drilling Will Be Fair, Reasonable and Competitive with Other States: While the largest oil and gas producers will see modest tax increases on the resources they extract from Ohio, the new rates they pay will be lower than in almost every other oil- and gas-producing state. In fact, most other states with resource-rich shale formations – Pennsylvania (which assesses an impact fee on gas based on price and well production decline similar to a severance tax), West Virginia, Texas, and North Dakota – all have higher severance taxes than those proposed in this plan. In addition to maintaining Ohio’s competitive edge among other resource-rich states, the Kasich plan: Eliminates severance taxes for small-volume natural gas producers (less than 10 MCF per day). This means that almost all of the state’s small, conventional natural gas producers (90 percent of more than 44,000 wells) will no longer pay any severance tax on natural gas. Revenue generated through this severance tax modernization will allow virtually all small businesses in Ohio to benefit from the overall tax plan’s 50 percent cut in their taxes.
Ohio’s Jobs Budget 2.0 | Modernizing Ohio’s Severance Tax 1
Page 95 of 203
Severance tax rates for natural gas produced by new horizontal wells will be changed from the current 3 cents per MCF to 1.0 percent of the average price of product produced each quarter. To help new horizontal-well drillers during the initial start-up year, they will pay a 1.0 percent severance tax rate on gas and a 1.5 percent special first-year rate on oil and natural gas liquids. Severance tax rates for crude oil from small producers will remain unchanged at the current 20 cents/barrel. Conventional gas severance tax will be 1.0 percent of price and is capped at 3 cents/MCF. Ohio currently does not apply a separate severance tax on natural gas liquids produced by small, vertical wells. That won’t change. These hydrocarbons are valuable, highly-sought raw materials for plastics and other advanced polymers. Ohio’s current severance tax rates are among the lowest in the country. Under this plan, Ohio will retain that competitive edge.
NEW SEVERANCE TAX RATES ARE FAIR AND COMPETITIVE High-Volume Horizontal Wells Product Conventional Wells (“Shale Wells”) 1.5% for first year, Crude Oil 20 cents per barrel (unchanged) 4% following years No tax for wells less than10MCF/day, Natural Gas 1% for wells more than10MCF/day, 1% capped at 3 cents/MCF Natural Gas 1.5% for first year, Currently no separate tax is applied (unchanged) Liquids 4% in following years
SEVERANCE TAX RATES IN OTHER OIL AND GAS STATES State Crude Oil Natural Gas Michigan 6.6% 5% North Dakota 5%/6.5%3 11.43 cents/MCF3 Texas 4.6% 7.5%4 West Virginia 5% 5% Pennsylvania n/a 2.2%5 3North Dakota Tax Department website (1/29/13) 4Lower rate is applied by Texas to certain high-cost gas wells until well construction costs have been recovered. 5 Based on estimated first year production of a Marcellus gas well.
BOTTOM LINE: Who should have lower taxes – out-of-state oil companies or Ohio families? ###
Ohio’s Jobs Budget 2.0 | Modernizing Ohio’s Severance Tax 2
Page 96 of 203 State Budget (HB 59) – Electric Service – Reasonable Arrangements
Summary of statutory change by Legislative Services Commission (LSC) as introduced
PUBLIC UTILITIES COMMISSION
Permits a public utility electric light company, through a financial device in a schedule or reasonable arrangement, to recover costs of an economic development and job retention program from Ohio retail electric service customers in addition to customers within its certified territory.
Permits the Public Utilities Commission (PUCO) to approve any application for, or modification or extension of, a schedule or arrangement that includes such a cost recovery device until January 1, 2018, but allows the schedule or arrangement to continue in effect after that date for any period approved by the PUCO.
Economic development and job retention program cost recovery (R.C. 4905.31) The bill allows a public utility electric light company, through a financial device in a schedule or reasonable arrangement, to recover costs that the utility incurred in conjunction with any economic development and job retention program from Ohio retail electric customers and not just within its certified territory. Under the bill, the Public Utilities Commission (PUCO) may approve applications for, or modifications or extensions of, a schedule or arrangement that includes such a cost recovery device from this larger group of customers during the period beginning on the effective date of the bill and ending on January 1, 2018. The bill permits a schedule or arrangement approved during that period and that includes such a cost recovery device to continue in effect after January 1, 2018 for any period approved by the PUCO. After that period, the PUCO can only authorize cost recovery for these programs from customers within the utility's certified territory in the manner provided in current law.
Current law permits a public utility to file a schedule or enter into any reasonable arrangement with another public utility or with one or more of its customers, consumers, or employees, or a mercantile customer or a group of mercantile customers of an electric distribution utility, to provide for a financial device that is advantageous to the interested parties. The financial device may permit a utility to recover costs incurred for economic development and job retention programs within its certified territory. Any schedule or arrangement to recover these costs must be filed with and approved by the PUCO.
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HB 59 Bill Language:
Sec. 4905.31. Chapters 4901., 4903., 4905., 4907., 4909., 4921., 4923., 4927., 4928., and 4929. of the Revised Code do not prohibit a public utility from filing a schedule or establishing or entering into any reasonable arrangement with another public utility or with one or more of its customers, consumers, or employees, and do not prohibit a mercantile customer of an electric distribution utility as those terms are defined in section 4928.01 of the Revised Code or a group of those customers from establishing a reasonable arrangement with that utility or another public utility electric light company, providing for any of the following: (A) The division or distribution of its surplus profits; (B) A sliding scale of charges, including variations in rates based upon stipulated variations in cost as provided in the schedule or arrangement. (C) A minimum charge for service to be rendered unless such minimum charge is made or prohibited by the terms of the franchise, grant, or ordinance under which such public utility is operated; (D) A classification of service based upon the quantity used, the time when used, the purpose for which used, the duration of use, and any other reasonable consideration; (E)(1) Any other financial device that may be practicable or advantageous to the parties interested. In the case of a schedule or arrangement concerning a public utility electric light company, such other financial device may include a any of the following: (a) A device to recover costs incurred in conjunction with any economic development and job retention program of the utility from customers within its certified territory, including recovery of revenue foregone as a result of any such program; any (b) Any development and implementation of peak demand reduction and energy efficiency programs under section 4928.66 of the Revised Code; any (c) Any acquisition and deployment of advanced metering, including the costs of any meters prematurely retired as a result of the advanced metering implementation; and compliance (d) Compliance with any government mandate. (2) During the period beginning on the effective date of this amendment and ending on January 1, 2018, the commission may approve any application for, or modification or extension of, a schedule or arrangement that provides for a device described in division (E)(1)(a) of this section that recovers costs from retail electric service customers in this state. The schedule or arrangement may continue in effect after that ending date for any period approved by the commission. No such schedule or arrangement is lawful unless it is filed with and approved by the commission pursuant to an application that is submitted by the public utility or the mercantile customer or group of mercantile customers of an electric distribution utility and is posted on the commission's docketing information system and is accessible through the internet. Every such public utility is required to conform its schedules of rates, tolls, and charges to such arrangement, sliding scale, classification, or other device, and where variable rates are provided for in any such schedule or arrangement, the cost data or factors upon which such rates are based and fixed shall be filed with the commission in such form and at such times as the commission directs. Every such schedule or reasonable arrangement shall be under the supervision and regulation of the commission, and is subject to change, alteration, or modification by the commission.
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Volume #82, Report #37, Article #5--Monday, February 25, 2013
Budget Would Expand Utility Recovery For Economic Development Incentives
Gov. John Kasich's new executive budget includes a proposal that would spread the cost of utilities' economic development incentives to electricity ratepayers all around the state.
The administration had originally planned to include the provision in last year's mid-biennium review measure, but ultimately decided to withhold the proposal to expand the so-called "reasonable arrangement" program until now. (See Gongwer Ohio Report, December 27, 2011)
Electric utilities can currently enter into agreements with commercial customers for a discounted rate for projects expected to bolster the economy, while other customers within the service territory pay an additional charge to subsidize the foregone revenue. However, language in the biennial budget (HB 59 ) would allow for recovery from ratepayers throughout the state until 2018.
Public Utilities Commission of Ohio Chairman Todd Snitchler said this week that the proposal was still a work in progress.
"The PUCO is currently working with legislators to continue crafting the specific language in this section," he said in an emailed statement.
"The commission has always worked towards balancing the best interest of consumers and that of the utilities. Therefore it is important, as we look at this recovery mechanism, that we consider areas of economic development and growth in the state for the benefit of all Ohioans," he said.
Chairman Snitchler previously said the idea grew out of a related effort to create an economic development tariff that would standardize the process so that companies would know what discounts were available, rather than having to negotiate each deal. (See Gongwer Ohio Report, September 15, 2011)
Sen. Bill Seitz (R-Cincinnati), chairman of the Senate Public Utilities Committee, said he was "agnostic" about the idea of expanding recovery for reasonable arrangements statewide, but has questions about how it would actually work.
For example, would the proposal apply recovery charges only to ratepayers in Ohio's four investor-owned utilities, or would people served by competitive providers and municipal and rural cooperatives also pay to offset the "delta revenue" resulting from discounted rates, he asked.
"I do have some questions about how we calculate the amount that gets passed on to Bob and Betty Buckeye," he said. "If the social goal here is to keep certain big dogs in the state because we don't want to lose their business, then it seems like we all ought to be paying our fair share to keep them here."
Page 99 of 203 Sen. Seitz anticipated hearing criticism that the proposal "smacks of corporate welfare." However, he said policymakers would also face condemnation for not doing enough if major industrial customers wind up leaving the state because electricity costs are too high.
Dave Rinebolt, executive director of Ohio Partners for Affordable Energy, said he would like to see stricter accountability requirements for the current reasonable arrangement program before policymakers consider an expansion.
"If we're going to have ratepayers subsidize large corporations, than I want to make sure we're getting what we paid for and that it's a good deal," he said.
The Development Services Agency, which oversees the state's economic development incentives, makes sure companies live up to the job creation and retention commitments they made, he said. By contrast, the PUCO's reasonable arrangements often don't have those employment requirements.
Mr. Rinebolt said customers in AEP's service territory currently pay $2.01 each month to offset discounted electricity prices for three large industrial customers.
"If we're going to expand this and have ratepayers around the state pay these costs, then there needs to be accountability. We need a commitment from these companies that they're going to increase jobs by a certain amount and we need to have the public understand how much it's going to cost them," he said.
Copyright, 2013 Gongwer News Service: The Record of Capitol Square Since 1906 17 S. High St., Suite 630, Columbus, Ohio, 43215 Phone: 614−221−1992 Fax: 614−221−7844 Email:[email protected]
Page 100 of 203 Page 101 of 203 Page 102 of 203
M E M O R A N D U M
TO: Interested Parties
FROM: Senator Seitz
DATE: February 25, 2013
RE: Commentary on Energy Efficiency/Renewable Portfolio Standards/Advanced Energy
Thank you for submitting comments regarding the structure of a
placeholder bill to be shortly introduced to examine relevant topics under the general
category shown above. Frankly, the volume of written commentary received by the
February 15 deadline exceeds the volume of written testimony taken in connection with
most bills heard in the General Assembly – and we have not even started!
I find that incredibly valuable, and would invite anyone who is interested in
reviewing all of the comments to request the opportunity to read them in my office, or to
receive copies, though this will be a major copying chore for my staff. The input is very
valuable to demonstrate the breadth of perspectives on these issues.
I have undertaken to redraft the list of topics, and if you do not see your
specific topic on the revised list, please be aware that your input was nonetheless
considered and sometimes referenced cryptically or will fit within one of the listed topics
anyway. I should add that the volume of materials that arrived after 4:00 p.m. on
February 15 was not seen by me until after the President’s Day holiday, and therefore
that input may not be as fully reflected in the as-introduced placeholder bill as was the
input received prior to the 4:00 p.m. deadline on Friday, February 15. As they say, “the
early bird gets the worm.”
13308812.1 Page 103 of 203
Following introduction of the placeholder bill, our first hearing will be information from the perspectives of the PUCO and the OCC. Thereafter, subsequent hearings will address groups of subtopics in such format as we may determine would be most useful to educate the members of the Committee and to have a robust debate in which people of different perspectives would be forced to defend their positions before persons of opposite perspectives. Thereafter, we would proceed to determine what, if anything, should replace the placeholder bill. Once again, thank you so much for submitting your comments and it would seem, given their volume, that we have certainly chosen a topic for review that is of wide interest.
13308812.1 - 2 - Page 104 of 203
Hands-on Opportunity to Boost Your Energy Efficiency Programs
OMA is offering members from all energy-supply territories in the state the opportunity to participate in one – or both – of two energy work groups in conjunction with OMA’s consulting energy efficiency engineering partner, Go Sustainable Energy LLC. Participating members will have access to the most up-to-date information, contacts, and opportunities in Ohio in the areas of combined heat and power (CHP) and waste heat recovery (WER) or energy efficiency.
OMA’s CHP/WER Work Group
OMA is recruiting interested plant engineers and facility staff for involvement in a combined heat and power (CHP) and waste-energy recovey (WER) work group. Facilities that may be able to benefit from CHP/WER projects typically have 3-shift operations, a sizable and year-round process heat-load, and benefit from carrying critical production equipment on a CHP system.
The work group would meet bi-monthly via web-conference for 1-2 hours, with additional one-on-one engagement with OMA's energy engineering consultant from time to time as needed.
The benefits to OMA’s CHP/WER work group participants include:
1. Learn about the Public Utilities Commission of Ohio (PUCO) rules, rule changes and new incentives for CHP, such as net-metering rules, interconnection and stand-by rates, efficiency program incentives, and financing. 2. Connect with professional resources, such as the Midwest Clean Energy Application Center, as well as financial resource,s as available. 3. Create a collaborative community for sharing and best practices among those that are developing or considering developing CHP or WER projects at their facilities. 4. Develop rule changes or legislative action for OMA to pursue with PUCO and/or the General Assembly based on the work group feedback. 5. Connect work group members with CHP and WER development companies and distributed generation suppliers (OMA has no self-serving financial arrangements with suppliers).
February 28, 2013
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Industrial Energy-Efficiency Work Group
OMA is recruiting interested plant engineers and facility staff for involvement in an industrial energy efficiency work group.
The work group would meet bi-monthly via web-conference for 1-2 hours, with additional one-on-one engagement with OMA's energy engineering consultant from time to time as needed.
The benefits to OMA’s energy efficiency work group participants include:
1. Peer-to-peer discussion on energy-saving technologies, projects, best practices and lessons learned. 2. Access to efficiency expertise regarding best-in-class technologies, incentive opportunities, and cost-effectiveness of program options. 3. Connect with electric utility, gas utility, and government financial resources and educational programs. 4. Opportunity to join pilot programs for new utility incentive programs and rebates. 5. Opportunity to develop pilot program concepts for utilities to consider. 6. Develop rule changes or legislative action for OMA to pursue with PUCO and/or the General Assembly based on the work group feedback.
Interested?
Please contact:
Ryan Augsburger John Seryak, MS, PE Managing Director, Public Policy Services Principal The Ohio Manufacturers’ Association Go Sustainable Energy LLC (614) 629-6817 (614) 268-4263 [email protected] [email protected]
February 28, 2013
Page 106 of 203 Maxine Goodman Levin College of Urban Affairs CLEVELAND STATE UNIVERSITY
REVIEW OF RESEARCH STUDIES
conducted for
The Ohio Manufacturers’ Association
February 21, 2013
Page 107 of 203 1 Presentation o Completed studies: o Moving Ohio Manufacturing Forward: Competitive Electricity Pricing
o Distributed Generation as a Response to Rising Electricity Costs in Ohio o Prospective studies: o Typology of Ohio Electricity Markets for Manufacturing Users
o Mapping the Demand of the Natural Gas Use in Ohio Transportation
Page 108 of 203 2 Moving Ohio Manufacturing Forward: Competitive Electricity Pricing
Center for Economic Development
Page 109 of 203 3 Goal
o To research a group of electricity-intensive manufacturing economic base (export) industries and their prospective eligibility for special electricity rates o Tasks:
o Define the list of electricity-intensive industries o Analyze the distribution and concentration of electricity- intensive industries across the state of Ohio o Model the sensitivity of manufacturing productivity to industrial electricity prices in Ohio and benchmark states
Page 110 of 203 4 Methodology:Approach Analysis of Ohio Electricity- Intensive Manufacturing Industries
Defining Electricity- Intensive Industries Defining Electricity- Intensive Manufacturing Mapping the Geographic Modeling Sensitivity of Export Industries Distribution of Electricity- Manufacturing Intensive Manufacturing Obtain IMPLAN’s input-output Productivity to Industrial technical coefficients of detailed Electricity Prices sectors: Electric Power Generation, Transmission and Distribution Define a common group of industries (Sector 31) that are:
Determine the distribution of Ohio’s Electricity-intensive manufacturing electricity-intensive manufacturing Regression analysis of Identify electricity-intensive industries export industries’ employment and manufacturing productivity on industries based on two criteria: GDP industrial electricity pries and control Criteria: (1) share of electricity cost factors in $1 cost of output and (2) total expenditures on electricity Export and high-growth Industries
Page 111 of 203 5 Methodology: Defining Electricity-Intensive Industries
o In order to identify electricity-intensive industries, IMPLAN's technical input-output coefficients were used o IMPLAN is a proprietary input-output economic model that provides information on supply relationships (backward linkages) between industries o Two indicators signify electricity-intensive industries: 1. Industry's total expenditure on electricity (electricity generation, transmission, and distribution industry), measured in dollars 2. The ratio of an industry's expenditure on electricity to the industry’s total expenditures, measured as a per unit expense on electricity
Page 112 of 203 6 Three Groups of Electricity Users: High, Moderate, and Low Electricity- Intensive Industries o Ohio's manufacturing industries were classified into three groups of electricity users: high, moderate, and low electricity-intensive industries
o Our definition of High and Moderate Electricity-Intensive industries came consistent with the Energy-Intensive and Non-Energy-Intensive Manufacturing groups defined for Industrial Demand Module of the National Energy Modeling System Source: Office of Energy Analysis, U.S. Energy Information Administration, 2011
Page 113 of 203 7 High-Electricity-Intensive Manufacturing Industries Identified by Unit Expenditures on Electricity o The High Electricity-Intensive Manufacturing group includes 10 manufacturing industries that annually spend 2% or more of their total expenditures on electricity
o The Alumina and Aluminum Production and Processing Industry (NAICS 3313) alone spends 5.7% of annual expenditures on electricity; this is almost twice as much as the next High Electricity- Intensive Manufacturing Industry, Pulp, Paper, and Paperboard Mills (NAICS 3221), which spends 3.5% of annual expenditures on electricity o The top 10 electricity-intensive manufacturing industries include three groups of industries:
o metal product manufacturing o chemical manufacturing o paper producing industries Page 114 of 203 8
Moderate-Electricity-Intensive Manufacturing Industries o The Moderate Electricity-Intensive Manufacturing group includes 17 manufacturing industries that annually spend at least 1% of their total expenditures on electricity o This group represents industries related to: o metal and equipment manufacturing o food manufacturing o resin and rubber industry o cement and concrete manufacturing
Page 115 of 203 9 Large Manufacturing Consumer Industries Identified by Total Expenditures on Electricity in Ohio o Twenty (20) manufacturing industries were identified as the largest consumers of electricity in Ohio o Each of these manufacturing industries spends over $40 million per year on electricity supplies. o Of those 20 industries, 11 were considered high electricity-consuming manufacturing industries o Each industry in this group spends over $67 million annually on electricity supplies. o This group is led by the industry Basic Chemical Manufacturing (NAICS 3251), which spends over $358 million annually on electricity supplies, followed by Iron and Steel Mills and Ferroalloy Manufacturing (NAICS 3311), which spends over $305 million annually.
o The other largest consumers of electricity in Ohio are industries producing such products as aluminum; petroleum and coal, plastic products, motor vehicle parts, paper, raisins, pesticides and fertilizers, dairy products, and general foundry products. Page 116 of 203 10 Moderate Electricity-Consuming Manufacturing Identified by Total Expenditures on Electricity in Ohio o The Moderate Electricity-Consuming Manufacturing group includes nine (9) industries that spend between $41 and $56 million annually on their electricity supply
o The largest electricity consumer in this group was Other Fabricated Metal Product Manufacturing (NAICS 3329), which pays about $56 million per year for the supply of electricity in Ohio
o Other industries in this group include those that manufacture steel products, converted paper products, glass, nonmetallic minerals, motor vehicles, and specialty food o A cross section of unit electricity-intensive industries and large consumers of electricity in Ohio identified 14 manufacturing industries
Page 117 of 203 11 Ohio Manufacturing Industries: Electricity-Intensive and Large Consumers of Electricity
NAICS Industry Name
3313 Alumina and Aluminum Production and Processing 3221 Pulp, Paper, and Paperboard Mills 3311 Iron and Steel Mills and Ferroalloy Manufacturing High Electricity-Intensive 3251 Basic Chemical Manufacturing and Consuming 3272 Glass and Glass Product Manufacturing Manufacturing 3315 Foundries 3279 Other Nonmetallic Mineral Product Manufacturing 3253 Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing 3112 Grain and Oilseed Milling Moderate Electricity-Intensive 3252 Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments and Consuming 3312 Steel Product Manufacturing from Purchased Steel Manufacturing 3115 Dairy Product Manufacturing
3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing
3314 Nonferrous Metal (except Aluminum) Production and Processing
Note: Ranked by unit expenses on electricity
Page 118 of 203 12 Ohio Manufacturing Industries: Large, Electricity-Intensive Consumers of Electricity o Industries that fit both criteria are large, intensive consumers of electricity. This group creates electricity-intensive products and purchases large volumes of electricity due to its size (relative to Ohio). o Fourteen (14) Ohio manufacturing industries are among both the 27 unit electricity-intensive industries and the 21 industries that are large consumers of electricity. o All industries in primary metal manufacturing sector (NAICS 331) are defined as large, electricity-intensive consumers of electricity (NAICS 3311, 3312, 3313, 3314, 3315). o The rest of the group includes three chemical manufacturing industries (NAICS 3251, 3252, 3253); three food manufacturing industries (NAICS 3112, 3114, 3115); and three paper, glass, and nonmetallic mineral product manufacturing industries (NAICS 3221, 3272, 3279).
Page 119 of 203 13 Ohio’s Economic Base
Ohio’s economic base is heavily represented by the following manufacturing industries:
o Food manufacturing (NAICS 311) o Chemical manufacturing (NAICS 325) o Nonmetallic mineral product manufacturing (NAICS 327) o Primary metal manufacturing (NAICS 331) o Fabricated metal product manufacturing (NAICS 332) o Machinery manufacturing (NAICS 333) o Electrical equipment, appliance, and component manufacturing (NAICS 335) o Transportation equipment manufacturing (NAICS 336)
Page 120 of 203 14 Ohio's Electricity-Intensive Base Manufacturing Industries
Electricity GSP LQ, NAICS Definition Intensity 2010 (per $, total $) 3313 Alumina and Aluminum Production and Processing H, H 1.397 3311 Iron and Steel Mills and Ferroalloy Manufacturing H, H 2.441 3251 Basic Chemical Manufacturing H, H 1.941 3272 Glass and Glass Product Manufacturing H, M 2.518 3315 Foundries H, H 2.449 3279 Other Nonmetallic Mineral Product Manufacturing H, M 2.931 3253 Pesticide, Fertilizer, and Other Agricultural Chemical Manuf H, H 1.825 3252 Resin, Synthetic Rubber,& Artificial Synthetic Fibers & Filaments M, H 1.775 3312 Steel Product Manufacturing from Purchased Steel M, M 3.198 3115 Dairy Product Manufacturing M, H 2.085 3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing M, M 2.490 3314 Nonferrous Metal (except Aluminum) Production and Processing M, M 1.671
Note: Ranked by per dollar expense on electricity The first letter in the Electricity Intensity column indicates the group of the electricity-intense industries (High (H) or Moderate (M)); the second letter indicates the group of the high(H) or Moderate (M) consumer of electricity in Ohio.
Page 121 of 203 15 Conclusions o Twelve Ohio industries manufacture highly electricity-intensive products and, at the same time, are part of the economic base of the state economy. o These industries belong to 4 broader sectors: o NAICS 311: Two industries in Food Manufacturing had total employment over 20,000 and were growing since 2000.1 Average GSP growth of these industries in 2009-2010 was 10%. o NAICS 325: Three industries in Chemical Manufacturing experienced GSP growth since 2000.1 Two of these three industries (NAICS 3251 & 3252) were also among the industries with the highest productivity in Ohio. Together, these three industries employed almost 15,000 people in Ohio in 2010. o NAICS 327: Two industries in Nonmetallic Mineral Product Manufacturing experienced GSP growth since 2007.2 These two industries employed almost 14,000 people in Ohio in 2010. o NAICS 331: Five industries in Primary Metal Manufacturing sector were not among those with GSP growth or high productivity. However, this industry sector employed 37,297 people in Ohio in 2010. 1 This statement implies that the industry was growing from 2000 to 2010, from 2007 to 2010, and from 2009 to 2010. 2 This statement implies that the industry was growing from 2007 to 2010 and from 2009 to 2010.
Page 122 of 203 16 Mapping the Geographic Distribution of Electricity-Intensive Manufacturing Industries in Ohio
Page 123 of 203 17 Map 1: Total Manufacturing Employment
Page 124 of 203 18 Map 3: Employment in Electricity-Intensive Manufacturing Industries
Page 125 of 203 19 Influence of Industrial Electricity Price on Manufacturing Productivity
o The model is based on 105 observations: Manufacturing Productivity as a function of o Industrial electricity price o Manufacturing employment o Presence of large manufacturing establishments o Size of power generation industry o Deregulation o Recession o Time period: 1990-2010 o Benchmark states: IN, KA, MI, PA
Page 126 of 203 20 Industrial Electricity Prices Affect Manufacturing Productivity o An increase in the industrial electricity price by 1 cent per kilowatt-hour (16.3% change in price) is likely, in 99% of cases, to decrease average manufacturing productivity in the five selected states by $2,527 of annual GSP per employee (2.2% change in productivity). o The productivity change resulting from industrial electricity price change has low elasticity: 2.2%/16.3%=0.13. o This means that for a 1% increase of industrial electricity prices, manufacturing productivity drops by 0.13%.
Page 127 of 203 21 Other Findings from the Model o Percentage change of employment in the manufacturing sector of the state (controls for changes in demand for electricity) is negatively related to manufacturing productivity. o The presence of large manufacturing establishments in the state is positively associated with productivity (at 99%). Reflects the economy of scale and ability of large electricity consumers to negotiate individual contacts. o Size of the Electric Power Generation, Transmission, and Distribution Industry (NAICS 2211) approximated by GSP, controls for the supply size of the state’s electricity market. It is positively related to manufacturing productivity (at 95%). o Control variables: deregulation is positively related to productivity growth (95%); recession negatively influences productivity (95%).
Page 128 of 203 22 Conclusions o Ohio’s economic base includes 12 large electricity consumer manufacturing industries in the sectors of primary metal manufacturing, chemical manufacturing, food manufacturing, and paper, glass, and nonmetallic mineral product manufacturing. o Industrial electricity price increases had a negative effect on manufacturing productivity in Ohio and 4 benchmark states: Indiana, Kentucky, Michigan, and Pennsylvania. o An increase in the industrial electricity price by 1 cent per kilowatt- hour (16.3%) is likely to decrease average manufacturing productivity, on average, by $2,527 of annual gross state product per employee (2.2%). For 1% increase of industrial electricity prices manufacturing productivity drops by 0.13%.
Page 129 of 203 23 Distributed Generation as a Response to Rising Electricity Cost in Ohio o Manufacturing is facing rising electricity costs due to rapidly increasing Regional Transmission Organization capacity charges and new EPA requirements for electricity, steam and heat generation. o One answer to these threats is the adoption of distributed generation, especially in the form of combined heat and power. o Before CHP can be adopted in Ohio, high standby charges and impediments to the marketing of surplus power must be addressed. o Senate Bill 315 makes CHP eligible for energy efficiency credits, however the value is diminished by tying it the energy efficiency rider waiver (DSE-2), which is dependent upon grid sales. o There is an array of enabling strategies for manufacturers to justify the long-term investment in CHP. These include, among other things, federal and state incentives, use of micro-grids and regional planning.
Page 130 of 203 24 Typology of Electricity Markets in Ohio: Mapping Technology Mix, Generation, Distribution and Consumption o Research how electricity markets are structured in Ohio. What are the results of deregulation on setting wholesale prices and capacity charges, and effects on developing capacity build out and throughput constraints on transmission? Assess the effectiveness of open access to transmission, and the supply side of electricity markets. o Assessments of the demand side of electricity markets. Research effects of demand side programs such as energy efficiency on deregulated and regulated markets. o Research retail markets, and the role of deregulation on setting retail pricing, including the impediments to creating retail competition, and the effects these impediments have had on determining total cost of electricity. o Map the contours of the electricity market, both in terms of submarkets and geography. Create a visual general framework how the electricity markets work and where the value and the cost of market transitions are born. Explain different segments of the market, main players in each segment, and the balance sheet interests of the players in each market segments.
Page 131 of 203 25
Mapping the Demand of the Natural Gas Use in Ohio Transportation
o The purpose of the study is to assess the distribution of natural gas demand as a fuel to better address the response in building necessary infrastructure. o Research the types and volumes of demand for natural as a fuel for likely early adopters: delivery services and supplies by trucking. What are the pick demand factors? o Overlay the distribution of the natural gas demand with the map of natural gas pipelines. o Project the stages of transportation infrastructure development: distribution and capacity of fueling stations, storage, and relation to the natural gas midstream infrastructure.
Page 132 of 203 26 Research Team
Cleveland State University Maxine Goodman Levin College of Urban Affairs Urban Center
Dr. Edward Hill, Dean, Professor
Dr. Iryna Lendel, Assistant Director, Center for Economic Development Andrew Thomas, Executive in Residency, Director of the Center for Electricity Policy and Applications
Page 133 of 203 27 Questions
Page 134 of 203 28 28 To: OMA Government Affairs Committee From: Ryan Augsburger/Rob Brundrett Re: Environment Policy Update Date: March 6, 2013
Overview The new General Assembly was sworn into office in early January. The legislature will be dominated by work on the state operating budget until the beginning of July. Most of the policy action involving the Ohio EPA will take place in a regulatory manner. However the agency is planning some large legislation in the summer/fall timeframe. It is going to consist of a rewrite of Ohio’s solid waste laws.
General Assembly News and Legislation House Bill 59 – State Operating Budget On February 4, the Governor unveiled his state budget proposal. House Bill 59 contains a lot of new policy changes. The budget revolves around three major issues, tax reform, Medicaid expansion, and a new school funding formula.
However the bill does impact all the state’s major agencies. Ohio EPA does have some policy changes tucked in the middle of the 4200 pages. Most of the agency’s issues deal with fees, but also includes sections dealing with hazardous waste, construction and demolition debris and water pollution control.
This bill impacts a wide variety of fees often time extending their sunset provisions: Crediting of application fees for state isolated wetlands permits Extension of solid waste transfer and disposal fees Sale of tire fees Extension of various air and water fees
The bill touches two areas of the hazardous waste law. The bill states that an action by the Director in response to a substantial threat to public health caused by hazardous waste or which hazardous waste contributes may include an issuance of an order to a violator. The order may include an agreement by the person to pay the cost incurred by the EPA as a result of a violation. The bill also adds to the purposes for which the existing Hazardous Waste Clean-up Fund is used.
The bill outlines requirements for federal grant money for nonpoint source water pollution management.
Finally the bill authorizes the Director on behalf of the state to apply to the US EPA for the state to assume responsibility for administering the section 404 permitting program for the discharge of dredged or fill material into navigable waters under the Federal Water Pollution Control Act.
House Bill 12 House Bill 12 was introduced last month by Representative Roegner (R-Hudson). The bill would ease the state’s boiler operator laws. The bill would eliminate the licensed operator requirement for gaseous fuel and fuel oil fired boilers that comply with certain safety and engineering standards.
Page 135 of 203 The two types of boilers that would be exempted from the licensed operator requirements are: 1. A boiler fired by gaseous fuel, fuel oil, or some combination thereof that complies with the CSD-1 standards contained in “Controls and Safety Devices for Automatically Fired Boilers,” by the American Society of Mechanical Engineers. 2. A boiler fired by gaseous fuel, fuel oil, or some combination thereof that complies with the National Fire Protection Association Standard No. 85, “Boiler and Combustion Systems Hazards Code,” published by the National Fire Protection Association
Current Ohio law prohibits a person from operating a low pressure boiler at more than 30 horsepower, unless the person is a licensed steam engineer, high pressure boiler operator, or low pressure boiler operator in accordance with Ohio Boiler Law or is working under the director supervision of someone who is licensed. The law also prohibits any person from operating a power boiler at more than 30 horsepower unless that person is licensed as a steam engineer or high pressure boiler operator or the person is working under the director supervision of someone who is licensed.
The bill has had several hearings in the House of Representatives.
Environmental Self Audit Sunset Since the 1990s Ohio has had an environmental self-audit privilege/immunity statute. The statute is used to encourage Ohio companies to self-report potential violations and begin corrective measures. The statute allows companies to perform self-audits and provides a mechanism where there is less fear is they self-report. The law is set to sunset January 1, 2014.
Senators Seitz (R-Cincinnati) and Schaffer (R-Lancaster) are discussing either extending the sunset or removing the sunset provision from the law. The Senators are looking for feedback on this topic.
House Bill 592 Review Ohio EPA continues to work on a rewrite of the old House Bill 592, which created most of Ohio’s current solid waste laws. Director Nally has made it priority to update this section of Ohio law and has had a taskforce working on the rewrite since last year. The Department is looking to push out legislation after the budget in the early portions of the summer. One thing to note is that Ohio EPA is seriously considering including language from Senator Lehner’s (R-Kettering) old Senate Bill 253 which created a post-consumer recycling liability for manufacturers of certain electronic products. The OMA opposed this legislation last year and has reiterated its opposition to Ohio EPA and Senator Lehner’s office.
Regulations Beneficial Use Ohio EPA continues working to develop a new beneficial use regulatory structure in Ohio. The Department conducted interested party meetings the last several months. They are going to start drafting the rules this month. They aim to publish draft rules by the end of April. Ohio EPA is encouraging interested parties to submit draft rule language.
Universal Waste Ohio EPA has just begun conducting early stakeholder outreach on the expansion of universal waste in Ohio. The OMA submitted initial comments on this topic requesting certain paint and paint related wastes.
Page 136 of 203 Environment manufacturers: universal waste, solid waste, permitting and his operating budget. NAM Releases Study on Carbon Tax Impacts Director Nally specifically invited committee members to submit language or concepts for beneficial use The National Association of Manufacturers (NAM) rules the agency is currently drafting. To contribute released a study this week conducted by NERA your thinking on beneficial use, contact OMA's Rob Economic Consulting that shows a carbon tax would Brundrett. 2/28/13 have a devastating impact on manufacturing and jobs. Ohio EPA Director, Scott Nally
Economic Outcomes of a U.S. The report, titled GOJO Industries Earns Environmental Excellence Carbon Tax, found that levying such a tax would Award impact millions of jobs and result in higher prices for natural gas, electricity, gasoline and other energy commodities. Nationally, manufacturing output in energy-intensive sectors could drop by as much as 15.0 percent and in non-energy-intensive sectors by as much as 7.7 percent.
Here is the executive summary and OMA's release which articulates the projected Ohio impacts. 2/27/2013
OMA Environment Committee Goes to School on New Boiler MACT Rules
This week at the OMA Environment Committee, OMA Connections Partner, Environ International, presented the new federal Boiler MACT rules. Ohio EPA Director, Scott Nally, recognized GOJO Industries for its efforts in sustainability at the OMA U.S. EPA released these rules late last Environment Committee meeting this week. December. The changes will have a wide and varying impact on manufacturing. If your company needs GOJO is one of the first companies in Ohio to receive compliance assistance, contact OMA's Rob Brundrett Ohio EPA's Encouraging Environmental Excellence 2/28/13 for resources. (E3) award. The E3 award recognizes companies that reduce waste, improve efficiency, and Director Nally Visits with OMA Environment continuously improve as environmental stewards. Committee Sunshine Scherer, GOJO's environmental manager, and Toni Stutler, environmental specialist, were on hand to talk about the company's sustainability program.
Companies can learn more about the E3 program on Ohio EPA’s website. 2/28/13 Sunshine Scherer, GOJO Environmental Manager
2013 Ohio EPA Compliance Assistance Conference
On May 21-22, Ohio EPA is hosting its 7th Compliance Assistance Conference in Columbus. The
event offers valuable information and contacts to help employers with environmental compliance When Ohio EPA Director, Scott Nally, sat down this week with the OMA Environment Committee, chaired responsibilities. by Joe Bulzan, Environmental Manager, RockTenn, he spoke to a range of topics of interest to A large part of the conference is targeted to businesses that need to know the basics of
Page 137 of 203 environmental compliance. However, this year's promote recycling and decrease the costs associated expanded agenda includes advanced topics, such as with managing hazardous wastes. Title V permits and reporting. For specific technical To comment on this proposal, please contact OMA’s questions, Ohio EPA staff will be available at an “Ask Rob Brundrett, who leads environmental policy. Also, the Experts” session. 2/20/2013 register to attend the OMA Environment Committee on Wednesday, February 27 by phone or in Legal Update: CERCLA Cost person. 2/7/2013 Recovery/Contribution Action Ohio EPA Begins Stakeholder Outreach on OMA Connections Partner, Bricker & Eckler LLP, Universal Waste reports that on February 8, 2013, the U.S. District The Ohio EPA is seeking stakeholder input to help Court for the Southern District of Ohio issued its decide if additional hazardous wastes should be decision in Hobart Corporation v. Waste Management added to Ohio’s list of universal wastes. Ohio EPA of Ohio, Inc., holding that a CERCLA 107 cost has prepared this fact sheet regarding this outreach. recovery action is not available if plaintiffs had a CERCLA 113 contribution action. To comment or participate, please contact OMA's Rob Brundrett. Comments to Ohio EPA are due by CERCLA refers to the Comprehensive Environmental February 8. 1/10/2013 Response, Compensation, and Liability Act, commonly known as Superfund. EPA Finalizes Stricter Clean Air Standards for Soot Emissions The Ohio federal court followed the emerging line of appellate court decisions in this area. The dichotomy OMA Connections Partner, Taft, reports New Clean and interrelationship between a CERCLA contribution Air Act standards for fine particulate matter (PM2.), claim and cost recovery claim has been the subject of considerable debate and litigation for the past five including soot, were recently announced by the years. 2/15/2013 United States Environmental Protection Agency (EPA). EPA reduced the National Ambient Air Quality Standard for PM2.5 from 15.0 micrograms per cubic Boiler Testimony Steams Ahead meter (µg/m3) to 12.0 µg/m3. EPA’s action came in On Wednesday Representative Tina Roegner (R- response to the U.S. Court of Appeals for the District Hudson) gave sponsor testimony on House Bill 12 of Columbia Circuit decision which required EPA to (see also, bill analysis). The proposal would modernize Ohio’s boiler operator standards, which clarify how the PM2.5 standard affords necessary date back to 1911. protection from short- and long-term exposures to soot, placing emphasis on protecting at-risk The bill exempts certain boilers that satisfy populations like children. 12/28/2012 recognized safety and engineering standards from the requirement that they be operated by a licensed boiler Ohio EPA Proposes Changing Hazardous Waste operator, or under the direct supervision of a licensed Reporting boiler operator. Ohio EPA is asking for interested parties to comment on a rule change regarding hazardous waste The OMA will have an update at the upcoming reporting requirements. The proposal would change Environment Committee meeting on February the frequency with which regulated facilities must 27. Register for phone or in-person submit a hazardous waste report to Ohio EPA from an attendance. 2/14/13 annual basis to a biennial basis.
OMA Makes Universal Waste Recommendations The change was authorized in environmental to Ohio EPA legislation that passed last summer and took effect in In a letter to Ohio EPA this week, OMA proposed an September. 12/20/2012 expansion of universal wastes to include paint and paint-related waste. OMA also proposed that Ohio’s Choosing an Environmental Consultant universal waste program would benefit by including a mechanism to petition Ohio EPA to designate a Ohio EPA's Office of Compliance Assistance and hazardous waste as a universal waste if such waste Pollution Prevention (OCAPP) has prepared a new has been designated a universal waste by U.S. EPA fact sheet about how to hire an environmental or any other state. consultant. It includes resources available to Ohio Other states have already expanded their universal businesses, some at no charge. And many more waste programs to take advantage of ways to resources are available at OCAAP's website. 12/20/2012
Page 138 of 203 Ohio Supreme Court Upholds Lower Court on Contact Rob Brundrett for more information on OMA's EPA Penalty Calculation involvement with this issue. 1/28/2012 The Ohio Supreme Court affirmed a ruling by the Tenth District Court of Appeals that confirmed it New Shale Wells Not Hurting Ohio Air employed the proper method for calculating civil penalties against an industrial facility for noncompliance with its air-pollution-control Ohioans can continue breathing easy for now, even permit. The Courts both ruled that it is proper to with all the new shale well drilling taking place. Late assess the penalty stated in the permit from the initial last week the Ohio EPA announced that air quality date of noncompliance until the facility demonstrates testing at a shale gas well site in Muskingum County it is no longer violating the permit. 12/6/12 has not found any violations of federal air standards.
Ohio EPA Seeks Stakeholder Input on Beneficial The Ohio EPA started collecting the data to determine Use if the wells were having an adverse effect on air This week the Ohio EPA held its second stakeholder quality. While the preliminary findings present good meeting regarding a new regulatory system for news, Ohio EPA plans to continue monitoring multiple beneficial use. A third, and final, preliminary meeting well sites for the next several years. 11/07/2012 will be held on December 11. The meetings are informational, and Ohio EPA is requesting feedback from interested parties, as well. To sign up for Ohio EPA’s beneficial use listserve please visit its website. If you would like to participate in future Ohio EPA meetings or have any feedback please contact Rob Brundrett. 12/6/12
New NAM Report: $1.3 billion Economic Impact of
U.S. EPA Proposals on Ohio
The National Association of Manufacturers (NAM) released a new study, A Critical Review of the Benefits and Costs of EPA Regulations on the U.S. Economy, that examines the harmful impact of several Environmental Protection Agency (EPA) on Ohio’s economy. regulations
The study finds that the annual compliance costs of the EPA’s proposed Utility MACT, Boiler MACT and Coal Combustion Residuals regulations on Ohio will be $1.3 billion. OMA co-released the study to Ohio media. 11/28/2012
Ohio EPA to Hold Stakeholder Information Session on Beneficial Use
The Ohio EPA Division of Materials and Waste Management (DMWM) is working on a beneficial use plan of industrial byproducts and stakeholders have shown considerable interest. Therefore, the DMWM has planned a 2-hour informational stakeholder meeting on Thursday, December 6. It is offered via webinar and in person (Lazarus Building, Conference Room B, Columbus).
Email Deb Hoffman or call her (614)728-5353 to learn more or RSVP. If there is sufficient interest among people who cannot attend the December 6 session, another session might be scheduled on December 11.
Page 139 of 203 Environment Legislation Prepared by: The Ohio Manufacturers' Association Report created on March 3, 2013
HB12 LICENSED OPERATOR REQUIREMENT (ROEGNER K) To eliminate the licensed operator requirement for gaseous fuel and fuel oil fired boilers that comply with certain safety and engineering standards. Current Status: 3/6/2013 - House Commerce, Labor and Technology, (Third
Hearing) All Bill Status: 2/20/2013 - House Commerce, Labor and Technology, (Second Hearing) 2/13/2013 - House Commerce, Labor and Technology, (First Hearing) 1/30/2013 - Referred to Committee House Commerce, Labor and Technology 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_12
HB59 BIENNIAL BUDGET (AMSTUTZ R) To make operating appropriations for the biennium beginning July 1, 2013, and ending June 30, 2015; to provide authorization and conditions for the operation of state programs. Current Status: 3/8/2013 - House Primary and Secondary Education
Subcommittee, (Ninth Hearing) All Bill Status: 3/7/2013 - House Health and Human Services Subcommittee, (Sixth Hearing) 3/7/2013 - , (Fourth Hearing) 3/7/2013 - House Higher Education Subcommittee, (Eighth Hearing) 3/7/2013 - House Transportation Subcommittee, (Eighth Hearing) 3/7/2013 - House Agriculture and Development Subcommittee, (Sixth Hearing) 3/7/2013 - House Primary and Secondary Education Subcommittee, (Eighth Hearing) 3/6/2013 - House Health and Human Services Subcommittee, (Fifth Hearing) 3/6/2013 - , (Third Hearing) 3/6/2013 - House Higher Education Subcommittee, (Seventh
Hearing) 3/6/2013 - House Transportation Subcommittee, (Seventh Hearing) 3/6/2013 - House Agriculture and Development Subcommittee, (Fifth Hearing) 3/6/2013 - House Primary and Secondary Education Subcommittee, (Seventh Hearing) 3/5/2013 - Senate Ways and Means, (First Hearing) 3/5/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 3/5/2013 - , (Second Hearing) 3/5/2013 - House Higher Education Subcommittee, (Sixth Hearing) 3/5/2013 - House Transportation Subcommittee, (Sixth Hearing) 3/5/2013 - House Agriculture and Development Subcommittee,
Page 140 of 203 (Fourth Hearing) 3/5/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 3/1/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 2/28/2013 - , (Second Hearing) 2/28/2013 - House Primary and Secondary Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Agriculture and Development Subcommittee, (Third Hearing) 2/28/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/28/2013 - House Higher Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Transportation Subcommittee, (Fifth Hearing) 2/27/2013 - House Ways and Means, (First Hearing) 2/27/2013 - House Agriculture and Development Subcommittee, (Second Hearing) 2/27/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 2/27/2013 - House Transportation Subcommittee, (Fourth Hearing) 2/27/2013 - House Higher Education Subcommittee, (Fourth Hearing) 2/26/2013 - House Primary and Secondary Education Subcommittee, (Third Hearing) 2/26/2013 - House Agriculture and Development Subcommittee, (First Hearing) 2/26/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/26/2013 - House Transportation Subcommittee, (Third Hearing) 2/26/2013 - House Higher Education Subcommittee, (Third Hearing) 2/21/2013 - House Higher Education Subcommittee, (Second Hearing) 2/21/2013 - House Health and Human Services Subcommittee, (Second Hearing) 2/21/2013 - House Transportation Subcommittee, (Second Hearing) 2/21/2013 - House Primary and Secondary Education Subcommittee, (Second Hearing) 2/20/2013 - House Higher Education Subcommittee, (First Hearing) 2/20/2013 - House Health and Human Services Subcommittee, (First Hearing) 2/20/2013 - House Transportation Subcommittee, (First Hearing) 2/20/2013 - House Primary and Secondary Education Subcommittee, (First Hearing) 2/14/2013 - House Finance and Appropriations, (Fourth Hearing) 2/13/2013 - Referred to Committee House Finance and Appropriations 2/13/2013 - House Finance and Appropriations, (Third Hearing)
Page 141 of 203 2/12/2013 - House Finance and Appropriations, (Second Hearing) 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
Page 142 of 203 To: OMA Government Affairs Committee From: Ryan Augsburger/Rob Brundrett Re: Human Resources Update Date: March 6, 2013
Overview The new General Assembly was sworn into office in early January. The legislature will be dominated by work on the state operating budget until the beginning of July. However there will continue to be legislation passed that is not included in the budget. Often several pieces of legislation impacting human resources are considered this time of year. One major bill has popped up in both the House and Senate recently; it is a carryover from the 129th General Assembly.
General Assembly News and Legislation House Bill 37 and Senate Bill 25 – Ohio SharedWork program Both the House and Senate have introduced bills that would create a shared work program in Ohio. Representative Duffey (R-Worthington) is the sponsor of the House legislation and Senators Peterson (R-Sabina) and LaRose (R-Copley Township) are the Senate sponsors.
The bills would modify unemployment compensation laws to provide flexibility when reducing workforce. Instead of traditional layoffs, the employer would be allowed to reduce the hours of work each week among a specific group of employees. These bills would allow more employees to qualify for benefits, because employees could receive benefits even if their hours are reduced by only 10%. The federal government is funding state programs through the middle of 2015.
There is concern that using this program past the federal deadline could put more strain on Ohio’s mutualized account. However in Ohio, each employer is charged individually for their unemployment compensation. If an employer uses more per year than they paid then they are assessed at a higher rate the next year. An employer in Ohio can only use shared work if they are up to date with all unemployment tax responsibilities.
Unemployment Compensation Changes The federal Trade Adjustment Assistance Extension Act of 2011 (Sec 252) includes provisions that seek to improve the integrity of the state unemployment compensation programs by providing tools and resources to combat improper payments of benefits. The integrity provisions of this legislation require states to: 1. Impose a monetary penalty on claimants whose fraudulent acts result in overpayments; and 2. Prohibit relief from charges to an employer's unemployment compensation account when the actions of the employer or its agent have led to an improper payment to a UC claimant.
The U.S. Department of Labor has issued an advisory letter indicating that Ohio will be out of conformity with federal law if its unemployment laws do not include the requirements enacted by the TAAEA by October 21, 2013. Failure to enact conforming legislation by the deadline may result in: Loss of all FUTA reduction credits (i.e., the effective FUTA rate for Ohio employers will jump to the maximum of 6%); and/or
Page 143 of 203 Loss of the state’s UI administrative grant from the federal government (including earned contingency funding; this amount exceeds $100 million for the operation of Ohio’s unemployment program).
Page 144 of 203 Human Resources According to OMA Connections Partner, GBQ, the first question an employer needs to resolve is whether Refresher on Workplace Immigration Enforcement or not it has enough employees to be subject to the "shared responsibility" (commonly, pay-or-play) According to OMA Connections Partner, Roetzel & requirement of the Affordable Care Act (ACA). Andress, the U.S. Immigration and Customs Enforcement (ICE) has indicated that Form I-9 audits The simple definition - employers with 50 or more full- of employers increased from 250 in fiscal year 2007 time equivalent workers - doesn't provide the full to more than 3,000 in fiscal year 2012. And, the total answer. For example, "full-time equivalent" includes amount of fines assessed has grown to nearly $13 employees who average 30 (not 40) hours per week. million in fiscal year 2012 from $1 million in fiscal year 2009. Furthermore, the number of company The time period during which employers will calculate managers arrested as part of criminal investigations their number of employees for this requirement is the resulting from Form I-9 audits has increased. prior year. That is, 2013, for the purpose of determining whether the mandate applies in Therefore, while we wait for whatever immigration reform may be enacted, Roetzel offers a good 2014. Read more. summary of immigration compliance best practices as a way to protect your company now and prepare for On Thursday, March 14, OMA offers a one-hour potential new compliance requirements. 2/26/2013 webinar in conjunction with its Connections Partner, Jackson Lewis, to offer guidance on the employer Governor’s Office Testifies on Workforce shared responsibility requirement and other aspects Development of the ACA. Login to register. 2/20/2013
Last week Tracy Intihar, the governor’s Director of the NAM Opposes NLRB Decision Office of Workforce Transformation, testified before the House Manufacturing and Workforce The National Association of Manufacturers (NAM) Development Committee on House Bills 1 and brings to our attention a case currently before the 2. She provided an update on the work of the office National Labor Relations Board (NLRB) which would and its efforts to improve Ohio’s workforce affect how employees can exercise their “Beck” rights development system. to object to union dues’ expenditures.
Separately, Tracy is working with the OMA and has “Beck” refers to this U.S. Supreme Court decision: invited manufacturers' input into developing employees can object to a portion of union dues’ meaningful workforce development improvements. 2/21/13 expenditures if the dues are being used to fund political activity not related to collective bargaining or NAM Strong on Immigration Reform contract administration.
However, in a recent case, the United Nurses and In a 2010 survey, National Association of Manufacturers (NAM) members chose “creating a Allied Professionals (Kent Hospital) and Jeanette market based system to attract talent” as the most Geary, the NLRB decided an employee who objected to the union’s expenditures did not deserve to have important goal of immigration reform. any verification showing proof how the union was NAM has compiled all of its immigration reform policy spending its funds. goals – including promoting a legal workforce, not The NLRB also is proposing to give unions the upper displacing American workers, and shielding hand presuming the union is, indeed, spending all the employers from undue liability - in this fact sheet. dues correctly. In effect, the employee will have to Use NAM’s Manufacturing Works tools to tell your prove the union is spending money on lobbying and members of Congress what this issue means to your political activity with no means of independently business. 2/20/2013 verifying the union claims.
Figuring Out the Health Care “Pay or Play” Requirement
Page 145 of 203 NAM filed amicus comments to the NLRB. 2/20/2013 regulations relative to the large employer shared responsibility provisions, sometimes referred to as Legislature Hears Bill on a Good Idea: Shared “play or pay,” of the Patient Protection and Affordable Work Care Act of 2010 (PPACA).
An employer is a “large” employer if it employs at Representatives Mike Duffey (R-Worthington) and least 50 full-time employees, or a combination of full- Gary Scherer (R-Circleville) presented sponsor time and part-time employees who are “equivalent” to testimony this week on House Bill 37 (see also, bill at least 50 full-time employees. analysis), a proposal the OMA supports as a prudent alternative to layoffs. The regulations further define large employers that are subject to the shared responsibility provisions, In lieu of laying off workers, employers can reduce outline the requirements of a qualified health plan workers' hours, and under this proposal, those (QHP), and explain the penalties applicable to large workers would be able to collect a pro rated share of employers that fail to offer a QHP to their full-time employees. 1/29/2013 unemployment compensation, while still maintaining their employee benefits. It protects employers from losing their experienced and skilled workers to the Requirements for Health Insurance Policies marketplace during a time of economic strain. Summarized OMA members have experienced positive outcomes in other states that have passed comparable OMA Connections Partner, Bricker & Eckler, has legislation. The Ohio House passed this legislation in written this memorandum summarizing the recently issued regulations by the federal Department of the last General Assembly, but the bill stalled in the Health and Human Services which provide guidance Senate in lame duck. 2/14/13 on the health insurance coverage under the Affordable Care Act. U.S. DOL Issues Final Rule Expanding FMLA Military Leave Provisions Beginning in January 1, 2014, all non-grandfathered plans must (i) be equal in scope to the benefits The U.S. Department of Labor issued a final rule that covered by a "typical employer plan," (ii) cover all ten implements and interprets two statutory expansions of general categories of essential health benefits (EHB), FMLA protections. OMA Connections Partner, (iii) satisfy specific cost-sharing limits, and (iv) provide Roetzel & Andress, has summarized how the final a specific level of coverage based on actuarial rule relates to the military family leave value. 1/24/2013 provisions. 2/6/2013 Governor Kasich Announces Incumbent DOL Delays Employer State Health Insurance Workforce Training Voucher Program Exchange Posting Requirement The Incumbent Workforce Training Voucher Program According to this Employment Services Alert from will provide direct financial assistance to train workers OMA Connections Partner, Roetzel & Andress, the in order to improve the economic competitiveness of Ohio’s employers; the program will begin accepting Department of Labor (DOL) has postponed the employer applications on January 7 at 10:00 a.m. at deadline for employers to provide their employees this site, which will become active then: with written notice informing them of the existence of https://development.ohio.gov/IncumbentWorkforce/ state-based health insurance exchanges created by the Affordable Care Act (ACA). The voucher program will offset a portion of the employer’s costs to upgrade the skills of its incumbent The act originally required employers to provide the workforce and will provide reimbursement to eligible notice to current employees beginning March 1, 2013, employers for specific training costs accrued during and each employee at the time of hiring training. The program is focussed on ten targeted thereafter. However, the DOL delayed enforcement industries including: advanced manufacturing, of the notice requirement until the exchanges are up aerospace and aviation, automotive, bio-health, and running, presumably later this year. 1/29/2013 corporate headquarters, energy, food processing, information technology, and polymer/chemicals. New Regulations Provide ACA Guidance and Safe Harbors for “Large” Employers The funding is first come, first served. The caps on OMA Connections Partner, Plante Moran, has the program funding will be $500,000 per eligible prepared this summary of the IRS proposed company and/or $4,000 per eligible employee, with a
Page 146 of 203 reimbursement rate of up to 50%; all training must mental/behavioral health outpatient services begin and be completed between February 4, 2013 performed by a licensed psychologist, psychiatrist, or and June 30, 2013. physician. 1/3/2013
Eligible employers must demonstrate that by receiving Incumbent Workforce Training Voucher Program funding assistance through the program that their Fills Up business will not only obtain a skilled workforce but will improve their company processes and Ohio's Incumbent Workforce Training Voucher competitiveness. Program designed to provide direct financial assistance to train workers began accepting employer For more information contact the state's Shannon applications on Monday, January 7 at 10:00 a.m. and Vanderpool at (614) 644-8560 or Barbara Miller was over-subscribed by Tuesday. at (614) 644-6107 The Marion Star reported that there were 400 Employment Forms - Free and Updated for 2013 requests for training vouchers received, requesting $21.4 million, exceeding the $19.4 million set aside OMA provides free up-to-date reproducible forms to for the first year. assist your human resource department, managers and supervisors. These forms comply with federal and A spokesperson for the program encouraged Ohio laws and have been reviewed by OMA counsel, businesses to continue to apply online because some applicants might not meet the voucher’s Bricker & Eckler LLP, for compliance as recently as requirements. 1/10/2012 November 2012. Ohio 12th in K-12 Education Ranking The reproducible forms offered: Application for Employment, Health Questionnaire/Physical A study by the publication “Education Week” ranks Condition, Absentee Calendar/Bi-monthly Absence Ohio 12th in the nation, down from 11th place last Review, and Vacation Schedule. State & federal year, 10th place in 2011, and fifth place in Ohio’s 2013 score of 79.6%, a B posting requirements are also available. (Note that 2010. -minus, is up from last year’s 79.5%. you should now be posting the 2013 Ohio Minimum Wage poster reflecting the increase that was effective Ohio outperforms the nation in the study. The January 1, 2013. See source key A to source your national average is 76.9%, a C-plus. new poster.) Ohio ranked high in standards, assessment and Please read the special instructions to employers to accountability, but low on disparity in spending across protect your company when using these districts in the state and in the difference in per-pupil spending levels. 1/10/2013 forms. 1/3/2013
Spread Information, Not Flu Report: Workforce Development Sector Strategies Coming of Age The Occupational Safety & Health Administration The National Skills Coalition and the National offers guidance to employers about containing flu in Governors Association released a report on state 1/3/2013 the workplace. "sector strategies" (specific industry focused programs) for workforce development. Ohio to Require Autism Coverage Governor Kasich announced that Ohio will mandate The report “offers a snapshot of sector strategies autism therapy treatments for state employee health today, an overview of what makes them different from plans and for private insurers in 2014. The traditional workforce and economic development administration made the decision in conjunction with programs and a description of actions that state the Affordable Care Act (ACA) requirement that states administrators and policymakers can take as part of a determine covered services in their Essential Health policy framework to support the strategies’ creation Benefits benchmark plans which were due December and effective operation.” 26. The coverage for private insurers will take effect in 2014 along with other aspects of the ACA. Manufacturers engaged with workforce development initiatives will find the report’s national scan This new mandate will cover 20 hours of applied useful. 1/17/2013 behavior analysis weekly, 20 visits per year for speech and language therapy, 20 visits per year for occupational therapy and 30 visits per year for A Primer on Health Care Exchanges
Page 147 of 203 Since the Affordable Care Act was signed into law, private companies, nonprofit entities, and everyone has questions about what the health governmental entities. 12/4/2012 insurance exchanges are and the impact they are going to have when they go into effect January 1, Vote Scheduled on Asbestos Bill 2014. As the final session days of the 129th General This Exchanges 101 Guide helps answer many Assembly draw near, the Senate has again scheduled questions. Even though this is distributed by Anthem HB 380 for a vote in the Judiciary Committee for Blue Cross and Blue Shield, the information provided Tuesday, Dec 4 at 3pm. The bill had been scheduled is not Anthem specific and therefore a good resource for a vote this week, but was pulled at the 11th hour 12/20/02012 for general information. as a few late amendments are considered.
Proponents Testify on Autism Mandate The bill follows Ohio’s major asbestos reforms Both the House and Senate heard from proponents of enacted in 2004. “While those comprehensive the autism mandate included in House Bill 598 and reforms advanced by the OMA earlier this decade Senate Bill 381 this week. Numerous have been enormously helpful in mitigating exposure advocates provided the committees with information to frivolous lawsuits, the current law allows damages regarding autism in Ohio and its effects on the health from multiple trusts for the same injury. HB 380 care system. prevents someone from collecting more than they’re owed for their injury,” said the OMA’s Ryan The OMA submitted a letter to both committee Augsburger. chairmen requesting caution. Due to the unresolved intersection of state policy with the federal Affordable When Senate President Tom Niehaus visited the Health Care Act, requiring new state mandates at this OMA Government Affairs Committee earlier in time will create more uncertainty in the still developing November, he told manufacturers that, “the Senate health care reforms. 12/6/12 was poised to act on HB 380.” The Ohio Association for Justice (plaintiffs lawyers) opposes the bill and support among some members of the Republican Congressional Budget Office Releases Report on caucus has been wavering. The OMA fully supports Unemployment Comp Choices HB 380. OMA members can call your state senator today to express your support. 11/30/2012 The United States Congressional Budget Office recently released a report outlining possible options Governor’s Workforce Board Sets Focus Congress may consider in regards to extending the federal unemployment compensation program set to Governor Kasich’s Executive Workforce Board met expire at the end of the year. OMA counsel Bricker & this week and set out its areas of focus. Those areas Eckler put together this memo for members interested will be to: forecast the needs of the business in following any developments on this issue from community, streamline delivery and services of Washington. 12/6/12 workforce programs, and implement performance measurements for the workforce system.
ACA Form W-2 Reporting Required The board aims to “rationalize Ohio’s entire workforce OMA Connections Partner, Roetzel & Andress, has system and provide recommendations on how best to summarized how the Affordable Care Act (ACA) has streamline nearly 90 existing workforce programs created new taxes and changed some tax reporting currently scattered across 13 state requirements. agencies.” 11/30/2012
Beginning in January 2013, employers will be required to report the amount the value of certain Autism Mandate Bills Receive Sponsor Testimony health coverage costs on an employee's Form W- 2. These items must be reported on the Forms W-2 The Ohio General Assembly heard sponsor testimony for the 2012 tax year that are due to be issued by the for House Bill 598 and Senate Bill 381 on end of January 2013. Wednesday. Regarding the potential cost of the measure, Sponsor Senator Bill Seitz stated that the Employers that issue at least 250 Forms W-2 for 2012 evidence he has seen does not indicate any are required to implement these significant insurance premium increase. The senator requirements. Employers that issue fewer than 250 stressed that the bill holds intact a 1% cap on Forms W-2 for 2012 may voluntarily report, but are premium increases and the maximum dollar cap on not required to do so. This reporting obligation is on benefit coverage at $50,000. The bill also excepts all
Page 148 of 203 health plans from providing benefits in excess of those set forth in the Affordable Care Act.
The bill clarifies what costs Ohio would have to defray if required benefits exceed the essential health benefits defined in the federal act. Since it is unknown what the federal government is going to require as an essential health benefits, the complete cost impact of these bills is unknown. OMA will continue to monitor this legislation. 11/29/12
Page 149 of 203 Human Resources, Health Care & Employment Law Legislation Prepared by: The Ohio Manufacturers' Association Report created on March 3, 2013
HB2 UNEMPLOYMENT COMPENSATION CLAIMANT (DERICKSON T, BROWN T) To require an unemployment compensation claimant to register with OhioMeansJobs to be eligible for unemployment compensation benefits and to require a claimant to contact a local one-stop office beginning with the eighth week of filing for unemployment compensation benefits. Current Status: 3/5/2013 - House Manufacturing and Workforce Development,
(Fourth Hearing) All Bill Status: 2/26/2013 - House Manufacturing and Workforce Development, (Third Hearing) 2/12/2013 - House Manufacturing and Workforce Development, (Second Hearing) 2/5/2013 - House Manufacturing and Workforce Development, (First Hearing) 1/30/2013 - Referred to Committee House Manufacturing and Workforce Development 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_2
HB3 HEALTH BENEFIT EXCHANGE (SEARS B, KUNZE S) To specify licensing and continuing education requirements for insurance agents involved in selling, soliciting, or negotiating sickness and accident insurance through a health benefit exchange and to make changes to copayments, cost sharing, and deductibles for health insuring corporations. Current Status: 3/6/2013 - House Health and Aging, (Third Hearing) All Bill Status: 2/27/2013 - House Health and Aging, (Second Hearing) 2/13/2013 - SUBSTITUTE BILL ACCEPTED, House Health and Aging, (First Hearing) 1/30/2013 - Referred to Committee House Health and Aging 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_3
HB22 MILITARY SPOUSE UNEMPLOYMENT COMPENSATION (PILLICH C) To permit persons who quit work to accompany the person's spouse on a military transfer to be eligible for unemployment compensation benefits. Current Status: 2/13/2013 - House Commerce, Labor and Technology, (First
Hearing) All Bill Status: 2/6/2013 - Referred to Committee House Commerce, Labor and Technology 1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_22
HB37 SHAREDWORK OHIO PROGRAM (DUFFEY M, SCHERER G) To create the SharedWork Ohio Program and to declare an emergency. Current Status: 3/6/2013 - House Commerce, Labor and Technology, (Second
Hearing) All Bill Status: 2/13/2013 - House Commerce, Labor and Technology, (First Hearing)
2/6/2013 - Referred to Committee House Commerce, Labor and Technology
Page 150 of 203 2/6/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_37
HB44 PUBLIC HEALTH EMERGENCIES (MCCLAIN J) To develop protocols regarding the authority to administer, deliver, distribute, or dispense drugs during certain public health emergencies. Current Status: 3/6/2013 - House Health and Aging, (First Hearing) All Bill Status: 2/27/2013 - House Health and Aging, (First Hearing) 2/13/2013 - Referred to Committee House Health and Aging 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_44
HB55 UNEMPLOYMENT ELIGIBILITY-MILITARY SPOUSE (PILLICH C, TERHAR L) To permit persons who quit work to accompany the person's spouse on a military transfer to be eligible for unemployment compensation benefits. Current Status: 2/27/2013 - House Commerce, Labor and Technology, (Third
Hearing) All Bill Status: 2/20/2013 - House Commerce, Labor and Technology, (Second Hearing) 2/13/2013 - House Commerce, Labor and Technology, (First Hearing) 2/13/2013 - Referred to Committee House Commerce, Labor and Technology 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_55
HB59 BIENNIAL BUDGET (AMSTUTZ R) To make operating appropriations for the biennium beginning July 1, 2013, and ending June 30, 2015; to provide authorization and conditions for the operation of state programs. Current Status: 3/8/2013 - House Primary and Secondary Education
Subcommittee, (Ninth Hearing) All Bill Status: 3/7/2013 - House Health and Human Services Subcommittee, (Sixth Hearing) 3/7/2013 - , (Fourth Hearing) 3/7/2013 - House Higher Education Subcommittee, (Eighth Hearing) 3/7/2013 - House Transportation Subcommittee, (Eighth Hearing) 3/7/2013 - House Agriculture and Development Subcommittee, (Sixth Hearing) 3/7/2013 - House Primary and Secondary Education
Subcommittee, (Eighth Hearing) 3/6/2013 - House Health and Human Services Subcommittee, (Fifth Hearing) 3/6/2013 - , (Third Hearing) 3/6/2013 - House Higher Education Subcommittee, (Seventh Hearing) 3/6/2013 - House Transportation Subcommittee, (Seventh Hearing) 3/6/2013 - House Agriculture and Development Subcommittee, (Fifth Hearing)
Page 151 of 203 3/6/2013 - House Primary and Secondary Education Subcommittee, (Seventh Hearing) 3/5/2013 - Senate Ways and Means, (First Hearing) 3/5/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 3/5/2013 - , (Second Hearing) 3/5/2013 - House Higher Education Subcommittee, (Sixth Hearing) 3/5/2013 - House Transportation Subcommittee, (Sixth Hearing) 3/5/2013 - House Agriculture and Development Subcommittee, (Fourth Hearing) 3/5/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 3/1/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 2/28/2013 - , (Second Hearing) 2/28/2013 - House Primary and Secondary Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Agriculture and Development Subcommittee, (Third Hearing) 2/28/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/28/2013 - House Higher Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Transportation Subcommittee, (Fifth Hearing) 2/27/2013 - House Ways and Means, (First Hearing) 2/27/2013 - House Agriculture and Development Subcommittee, (Second Hearing) 2/27/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 2/27/2013 - House Transportation Subcommittee, (Fourth Hearing) 2/27/2013 - House Higher Education Subcommittee, (Fourth Hearing) 2/26/2013 - House Primary and Secondary Education Subcommittee, (Third Hearing) 2/26/2013 - House Agriculture and Development Subcommittee, (First Hearing) 2/26/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/26/2013 - House Transportation Subcommittee, (Third Hearing) 2/26/2013 - House Higher Education Subcommittee, (Third Hearing) 2/21/2013 - House Higher Education Subcommittee, (Second Hearing) 2/21/2013 - House Health and Human Services Subcommittee, (Second Hearing) 2/21/2013 - House Transportation Subcommittee, (Second Hearing) 2/21/2013 - House Primary and Secondary Education Subcommittee, (Second Hearing) 2/20/2013 - House Higher Education Subcommittee, (First
Page 152 of 203 Hearing) 2/20/2013 - House Health and Human Services Subcommittee, (First Hearing) 2/20/2013 - House Transportation Subcommittee, (First Hearing) 2/20/2013 - House Primary and Secondary Education Subcommittee, (First Hearing) 2/14/2013 - House Finance and Appropriations, (Fourth Hearing) 2/13/2013 - Referred to Committee House Finance and Appropriations 2/13/2013 - House Finance and Appropriations, (Third Hearing) 2/12/2013 - House Finance and Appropriations, (Second Hearing) 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
HB60 MATERNITY UNIT RULES (HUFFMAN M) To require that rules governing maternity units, newborn care nurseries, and maternity homes include certain provisions pertaining to the authority to make decisions regarding the transfer of patients to other facilities and to specify procedures for granting variances or waivers of any requirement in the rules governing operation of such facilities. Current Status: 2/27/2013 - House Health and Aging, (Third Hearing) All Bill Status: 2/19/2013 - House Health and Aging, (Second Hearing) 2/13/2013 - House Health and Aging, (First Hearing)
2/13/2013 - Referred to Committee House Health and Aging 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_60
SB4 PULSE OXIMETRY SCREENING (MANNING G, OELSLAGER S) To require a pulse oximetry screening for each newborn born in a hospital or freestanding birthing center. Current Status: 3/6/2013 - Senate Medicaid, Health and Human Services, (First
Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Medicaid, Health and Human Services 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_4
SB8 UNEMPLOYMENT COMPENSATION BENEFITS-MILITARY SPOUSE (LAROSE F) To permit persons who quit work to accompany the person's spouse on a military transfer to be eligible for unemployment compensation benefits. Current Status: 3/6/2013 - Senate Commerce and Labor, (Second Hearing) All Bill Status: 2/27/2013 - Senate Commerce and Labor, (First Hearing) 2/13/2013 - Referred to Committee Senate Commerce and Labor 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_8
SB9 INSURANCE AGENTS EDUCATION REQUIREMENTS (BACON K) To specify licensing and continuing education requirements for insurance agents involved in selling, soliciting, or negotiating sickness and accident insurance through a health benefit exchange and to make changes to copayments, cost sharing, and deductibles for health insuring corporations. Current Status: 3/6/2013 - Senate Insurance and Financial Institutions, (Second
Page 153 of 203 Hearing) All Bill Status: 2/27/2013 - Senate Insurance and Financial Institutions, (First Hearing) 2/13/2013 - Referred to Committee Senate Insurance and Financial Institutions 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_9
SB11 SUMMER MEAL PROGRAMS (BROWN E) To require school districts to allow alternative summer meal sponsors to use school facilities to provide food service for summer intervention services under certain conditions, to allow the distribution and consumption of meals on a school bus, and to create a healthy food license for child day-care centers and school child programs. Current Status: 3/6/2013 - Senate Medicaid, Health and Human Services, (First
Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Medicaid, Health and Human Services 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_11
SB14 UNEMPLOYMENT COMPENSATION LAW (KEARNEY E) To authorize programs and tax credits to encourage the hiring of unemployed individuals, to make changes to the Unemployment Compensation Law, to authorize grants and tax credits for the rehabilitation of distressed areas and the expansion of broadband connections to rural areas, to create a revolving loan fund and a bonding program for small businesses, to make changes to the Minority Business Bonding Program, to levy taxes, and to make an appropriation. Current Status: 2/13/2013 - Referred to Committee Senate Finance All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_14
SB23 ADOPTION RECORDS (BEAGLE B, BURKE D) Regarding access to adoption records. Current Status: 3/6/2013 - Senate Medicaid, Health and Human Services, (First
Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Medicaid, Health and Human Services 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_23
SB25 SHAREDWORK OHIO PROGRAM (PETERSON B, LAROSE F) To create the SharedWork Ohio Program and to declare an emergency. Current Status: 3/6/2013 - Senate Commerce and Labor, (Second Hearing) All Bill Status: 2/27/2013 - Senate Commerce and Labor, (First Hearing) 2/13/2013 - Referred to Committee Senate Commerce and Labor 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_25
SB26 HEAD INJURIES-YOUTH SPORTS (SCHAFFER T) To correct a cross reference with regard to concussions and head injuries in athletic activities organized by youth sports organizations and to declare an emergency. Current Status: 3/6/2013 - Senate Medicaid, Health and Human Services, (First
Page 154 of 203 Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Medicaid, Health and Human Services 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_26
SB39 HUMAN PAPILOMAVIRUS SCREENINGS AND VACCINES (BROWN E, SCHIAVONI J) To require insurance providers to cover human papillomavirus screenings and vaccines. Current Status: 2/27/2013 - Senate Insurance and Financial Institutions, (First
Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Insurance and Financial Institutions 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_39
SB45 PRIVATE ELECTRONIC ACCOUNTS ACCESS (TAVARES C) To prohibit employers, employment agencies, personnel placement services, and labor organizations from requiring an applicant or employee to provide access to private electronic accounts of the applicant or employee. Current Status: 3/6/2013 - Senate Commerce and Labor, (Second Hearing) All Bill Status: 2/27/2013 - Senate Commerce and Labor, (First Hearing) 2/20/2013 - Referred to Committee Senate Commerce and Labor 2/19/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_45
SB49 PHYSICIAN DESIGNATION STANDARDS (PATTON T) To establish standards for physician designations by health care insurers. Current Status: 3/6/2013 - Senate Insurance and Financial Institutions, (First
Hearing) All Bill Status: 2/27/2013 - Referred to Committee Senate Insurance and Financial Institutions 2/25/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_49
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Transforming Health Care OHIO’S HEALTH CARE SYSTEM IS UNDERPERFORMING: Ohio’s health care system in both the private and public markets is uncoordinated, with few incentives for quality and wellness, leading to waste and poor health and threatening our economic competitiveness. Ohio spends more on private and public health care than all but 17 states, yet 36 states are healthier. Waste in health care—mostly through the delivery of unnecessary or ineffective services—accounts for almost 30 percent of all costs, leading to unsustainable growth in Medicaid and other health programs. Approximately 5 percent of all Ohioans account for 50 percent of Ohio health care and Medicaid spending. Obamacare will lead to health insurance premium spikes of up to 80 percent in some private plans. OHIO IS MAKING PROGRESS IN TRANSFORMING HEALTH CARE: In 2011, Gov. John Kasich created the Office of Health Transformation to guide Ohio’s efforts to modernize Medicaid, streamline health and human services programs and improve overall health system performance. Using an innovative approach and collaboration among multiple state agencies and public- and private-sector partners, Ohio is improving care for vulnerable Ohioans, reducing costs, increasing efficiency and supporting the governor’s efforts to create jobs and reduce unemployment. Progress so far includes: Improving care for the most vulnerable: Ohio is integrating Medicaid/Medicare services, improving care for people with severe mental illness, and enabling seniors and people with disabilities to live at home. Streamlining health and human services programs: Ohio is modernizing eligibility determination systems and improving state agency operations, including developing a plan to combine the Department of Mental Health and Department of Alcohol and Drug Addiction Services. Improving overall health-system performance: Ohio has begun to pay for health care based on value, not volume, and is providing patient-centered medical homes statewide. Controlling costs: In the three years prior to Governor Kasich taking office, Medicaid spending increased 33 percent. The governor’s first budget helped bend this cost curve, saving Ohio taxpayers almost $2 billion. THIS BUDGET CONTINUES OHIO’S PROGRESS IN TRANSFORMING MEDICAID: Medicaid payment strategies have too often incentivized more services, not better care. Ohio’s Jobs Budget 2.0 continues the governor's efforts to reward value instead of volume and provide high-quality services in settings that individuals prefer. 1. Improving Program Integrity and Fighting Fraud: Nationally, fraud accounts for approximately 10 percent of all health care waste, so fighting fraud and maximizing integrity and accountability in Medicaid is a key to improving efficiency. Ohio will expand its efforts to improve program integrity through a series of reforms, saving $74 million over the biennium. Increase Medicaid’s audit capacity: Medicaid will develop additional program integrity capacity, allowing more on- site monitoring of Medicaid providers and increasing the amount of Medicaid overpayments that Ohio recoups. Require personal responsibility: The budget will make beneficiaries accountable to the taxpayers by requiring them to share some of the cost if they turn to emergency rooms for non-emergency care. Create a consolidated Medicaid budget: For the first time, this budget includes a unified, consolidated Medicaid budgeting and accounting system for all state Medicaid spending. This innovative approach to budgeting will improve accountability and efficiency in Medicaid.
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2. Improving Quality and Reducing Spending by Rewarding Value, Not Volume: This budget continues to reduce Medicaid costs by implementing innovative strategies for paying Medicaid providers. Reform health plan payments: Ohio Medicaid will double the amount of payments to managed care plans that are tied to meeting quality measures, and it will implement a performance-based payment structure for plans serving individuals enrolled in Medicare and Medicaid. The budget also proposes to adjust the rate paid by the state to managed care plans, creating significant cost savings. Reform nursing facility payments: The governor’s budget builds upon efforts over the past two years to link funding to quality, and it invests additional resources in nursing homes over the biennium. Reform hospital payments: Ohio Medicaid currently uses prospective hospital payment methods that were developed in the late 1980s. These outdated, volume-based payment methodologies do not allow Medicaid to reward hospitals for improved outcomes. This budget revises the methods of both inpatient and outpatient hospital reimbursement to drive Medicaid modernization and improve outcomes, encouraging efficiencies that will save taxpayer dollars. o Create a quality incentive program for children’s hospitals: The bill requires funds in a special children’s hospital line item to be distributed to hospitals that meet certain quality benchmarks. o Reduce avoidable hospital admissions: Ohio will limit the payments for hospital readmissions within 30 days of discharge and adjust payments related to preventable readmissions and preventable conditions. o Control costs of outpatient services: The budget sets fixed prices for all outpatient services that are currently reimbursed at hospitals’ cost, requiring greater efficiency in service delivery. 3. Extend Medicaid Coverage to Working, Low-Income Ohioans: Gov. John Kasich and Lt. Gov. Mary Taylor have opposed Obamacare and called for it to be repealed and replaced with reforms that reduce costs and improve health outcomes. Given the results of the presidential election, the Supreme Court’s decision and Washington’s inaction on real health care reform, Obamacare is the law of the land for now. Therefore, Ohio needs to reduce its impact as much as possible. Ohio has reduced the impact of Obamacare: Ohio has already said “no” to a state-run exchange and “no” to federal takeovers of our state’s right to regulate our own insurance industry and determine Medicaid eligibility. Continuing to call our own shots on additional changes to Medicaid—to the greatest extent possible—can help Ohio minimize Obamacare’s further impacts. Ohio will offer coordinated coverage through its Medicaid program: Low-income Ohioans, most of whom have jobs, earning up to 138 percent of the federal poverty level ($15,415 per year) will have access to health care coverage through Medicaid. The federal government will pay 100 percent of this cost for three years, decreasing to 90 percent in 2020 and beyond. If the federal government changes this agreement then Ohio will reverse this decision, as it would not be fiscally sustainable. Other benefits and details include: Supporting Ohio’s jobs-friendly climate: Giving low-income Ohioans who work or who are looking for work access to health care coverage keeps Ohioans’ $13 billion in federal tax dollars over seven years in Ohio where they can help keep Ohioans healthy, in the workforce and contributing to Ohio’s recovery. If Ohio doesn’t extend Medicaid, Ohioans’ federal tax dollars will be used to expand health coverage in other states, giving businesses there a competitive advantage and creating a healthier workforce that those states can use to attract and retain jobs. Holding the line on premium increases: Medicaid coverage for low-income Ohioans helps prevent uncompensated care costs from driving up private health insurance premiums. Obamacare is already projected to increase insurance premiums significantly, and the American Academy of Actuaries warns that states that do not extend Medicaid benefits could see individual market premiums go even higher—by 2 percent or more. Protecting hospitals: Extending Medicaid coverage will ensure that hospitals receive payment for all of the services they provide. Obamacare largely eliminates reimbursements to hospitals for uncompensated care, forcing them to absorb those losses or pass them on to the private sector in the form of higher costs. Some rural and safety-net hospitals could be pushed to the brink. Protecting businesses: Providing Medicaid coverage to more low-income, working Ohioans can spare employers job-killing penalties. Obamacare imposes a financial penalty on any employer with 50 or more workers if any of their full-time employees receives a premium subsidy for coverage on the Health Insurance Exchange. Shoring up the mental health safety net: Most Ohioans who receive services from county boards of mental health and addiction services will become eligible for Medicaid. This will free up an estimated $105 million statewide in
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county funds for other mental health services, such as affordable housing, and promote safer communities since more people will be receiving necessary mental health services and fewer people will be cycling in and out of the criminal justice system. Improve care: Today, uninsured, low-income Ohioans often turn to the emergency room for health care, sidestepping prevention and primary care for a high-cost option that should only be used as a last resort. By offering coordinated care to these individuals, mortality will be reduced by as much as 6 percent and Ohioans will live healthier and more productive lives. 4. Simplifying and Automating Medicaid Eligibility Determination: Current eligibility determination processes for health and human services programs in Ohio are fragmented, overly complex and rely on outdated, 30-year-old technology. Ohio will simplify the state’s current 150+ Medicaid eligibility categories into three groups and implement simplified eligibility processes and information technology systems. 5. Updating Provider Regulations to be More Person Centered: Ohio will continue to drive quality improvements in services that are administered in the community and in institutional settings. Ensure safety in home care: Ohio will ensure that direct-care workers meet core competency standards, providing extra safety for thousands of Ohioans who receive health care service in their homes. Improve nursing home monitoring: The budget will enhance quality in nursing homes by improving the process for administering and responding to plans of correction in response to survey deficiencies, creating consistent standards for specialized units in the Long-Term Care Consumer Guide and making the licensure process and standards more focused on the needs of residents. SHARING SERVICES ACROSS STATE AND LOCAL JURISDICTION IS THE KEY TO HEALTH AND HUMAN SERVICES PROGRAM IMPROVEMENT: Barriers to innovation are prevalent in health and human services, where policy, spending and administration are split across multiple state agencies and corresponding local systems. We will continue to break down these barriers, creating efficiencies that will improve overall health-system performance and save taxpayer dollars. 1. Creating a Cabinet-level Medicaid Department: The budget creates the new Department of Medicaid, effective July 1, 2013. This long-overdue improvement removes barriers that impede innovation and makes Ohio’s Medicaid program more efficient, effective and responsive to the needs of beneficiaries, stakeholders and Ohio taxpayers. 2. Consolidating Mental Health and Addiction Services: The budget consolidates ODADAS and ODMH into the Department of Mental Health and Addiction Services, providing additional efficiencies and improving support for local government partners, providers and clients who are participating in two treatment systems. 3. Coordinating Workforce Programs: The budget provides tools to better identify health sector workforce needs, align existing workforce programs, reform higher education training programs, and change payments for health services to support workforce priorities. These strategies will create a unified system that helps businesses in the health care sector meet their workforce needs. 4. Coordinating Programs for Children: The budget includes targeted initiatives to improve health and human services for children served within and outside of Medicaid, with a focus on reducing infant mortality, improving early childhood education, and assisting high-risk your successfully transition to adulthood. BOTTOM LINE: The governor’s proposals will continue the nationally recognized transformation of Ohio’s Medicaid program by improving care for vulnerable Ohioans, reducing costs for taxpayers and businesses, and making Ohio more attractive to job creators. BETTER CARE AND BETTER VALUE: By paying for value, not volume, Medicaid will control costs and improve program performance and health outcomes for vulnerable Ohioans. USE ALL THE TOOLS AT OUR DISPOSAL: The budget ensures that Ohioans’ federal tax dollars stay in Ohio, protecting jobs and improving health right here at home. BALANCE THE BUDGET: Strategic spending decisions and payment reform strategies help mitigate the $521 million state budget impact of the Obamacare “woodwork effect” and ensure the long-term financial stability of the Medicaid program. ###
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TO: OMA Government Affairs Committee FROM: Ryan Augsburger/Rob Brundrett DATE: March 6, 2013 SUBJ: Safety and Workers’ Compensation Policy Update
Overview The 130th General Assembly was sworn in early in January. The early part of the General Assembly will be dominated by the state’s operating budget. The budget will consume the vast majority of policy makers’ time. However the BWC and IC budgets will also be heard the first part of the year. The Bureau continues to fight the ruling in the San Allen lawsuit, where the common pleas court found the Bureau should pay restitution to the class for charging excessive amounts for premiums to certain employers over eight years.
Legislation BWC and IC Budgets Both the BWC and the IC budgets are expected to drop this week. These bills are separated from the traditional state operating budget. The BWC and IC bills are usually less controversial and move faster than the state operating budget. There is speculation that the BWC budget might include some of the reforms that were introduced in House Bills 516, 517 and 518 of the 129th General Assembly. These bills were introduced to great fanfare early last year but were abruptly pulled from the committee schedule due to backlash from organized labor.
The BWC budget was introduced and included several of the medical reform provisions contained in House Bill 517 from the 129th General Assembly. The House of Representatives stripped out all the policy from this bill and passed the BWC budget with only the agency’s appropriations. The Senate began hearings on these two bills this week and passage could come as soon as next week.
BWC Medical Reform Representative Barbara Sears (R-Sylvania) and Senator Bob Peterson (R-Sabina) are planning to reintroduce the BWC reform package as companion bills this spring. It appears the General Assembly is making a renewed push at some reform. Key to the package is a provision that requires an injured worker to visit a doctor within the MCO’s network if they have not returned to work within 45 days of the injury.
Committee Assignments Committee Changes With a new General Assembly, committee assignments have been reshuffled. The House decided not to bring back their Workers Compensation subcommittee this General Assembly. However Bob Hackett (R-London) who chaired that committee was appointed as the new chairman for the full House Insurance Committee. After two years leading the subcommittee Chairman Hackett should have a good handle on workers’ compensation issues.
In the Senate Jim Hughes (R-Columbus) and Kevin Bacon (R-Minerva Park) will serve as the Insurance chairman and vice chairman respectively. Both Senators have been around a long time and have a strong grasp of most insurance related issues.
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Bureau of Workers’ Compensation In response to the San Allen opinion handed down earlier this year. The BWC has marked $856 million dollars on its balance sheets as a possible payment to companies in the class action lawsuit. As discussed in the Counsel’s Report, the BWC has filed its notice of appeal. The appeal was denied by the Appeals Court due to timing issues. The Bureau plans to refile its appeal shortly. No payments will be made until the case comes to a conclusion.
Ballot Initiatives Medical marijuana advocates in Ohio were emboldened by the successes in Colorado and Oregon during the last election cycle. Ohio employers should take notice that this issue will not go away in Ohio, and proponents could be back with another attempt to get it on the ballot.
Page 160 of 203 Safety & Workers’ Compensation past 60 months for a potential discount of 1 percent (up to $1,000) every six months. 2013 Ohio Safety Congress Preview To see which of these and other BWC programs your The 2013 Ohio Safety Congress & Expo will be April 9 company could be eligible for, see OMA's BWC to 11 at the Greater Columbus Convention Program Eligibility tool. Center. Here's an event preview with the schedule of events and more details. Free registration at 1-800- Questions about which BWC programs are right for OHIOBWC or ohiobwc.com. 2/27/2013 your company? Contact OMA's Georgia Booth or Barb Raduege. 2/18/2013 BWC Marks Improvements in Self-Insured Management 8th District Dismisses BWC Appeal in Class Action Suit At the Bureau of Workers’ Compensation (BWC) Last week the 8th District Court of Appeals dismissed board of directors meeting last week, staff proposed several rule changes governing self-insured the Bureau of Workers' Compensation (BWC) appeal employers and updated directors about a series of in the San Allen class action lawsuit. The court's operating improvements made with respect to Ohio’s rationale: The appeal was premature as the hearing self-insured book of business. for damages had yet to take place at the trial court. The BWC plans to appeal after the March trial The rule changes proposed included permitting self- court hearing on damages. 2/21/13 insured employers in good standing to submit multiple forms of security and eliminating multiple Self-Insured OMA Member Haltec Earns Safety Recognition Employer Guaranty Fund (SIEGF) assessments on employers with subsidiaries. The Ohio Bureau of Workers' Compensation (BWC) recently recognized OMA member Haltec Corporation Among its operating improvements, the BWC reduced in Columbiana County for attaining Safety and Health the SIEGF assessment by 24% in 2012 by more Achievement Recognition Program (SHARP) status effectively managing defaulted claims. 2/23/2013 through the Occupational Health and Safety Administration (OSHA). The company is one of 26
Taylor to Lead Industrial Commission … Again SHARP-certified Ohio employers.
The company is a leading manufacturer of tire valves, Jodie Taylor was named chair of the Ohio Industrial tire management and inflation solutions, and employs Commission effective February 13, 2013. Taylor has more than 85 Ohioans in Salem. Congratulations been the employer member of the Commission since Haltec team! 2/11/2013 July 2009. She previously served as chair of the commission from January 2011 to July 2011. She Medical Reforms Stripped from BWC Budget replaces former chair Karen Gillmor who will remain The medical reform language contained in the budget one of the three appointed Commissioners. 2/21/13 proposed by the Ohio Bureau of Workers’ Compensation (BWC) did not last long. It has been BWC Premium Deadline is February 28 stripped out of the bill.
Ohio private employers have until February 28, 2013 The language would allow for better care to file payroll reports and pay workers’ compensation management of injured workers, something long premiums to the Bureau of workers' Compensation sought by the OMA and its members. The chairman (BWC) for the July 1 through December 31, 2012, of the committee that has House jurisdiction over period. workers’ compensation, Rep. Robert Hackett (R- London), indicated that the medical reforms will be The BWC offers these policy payment incentives: 1) incorporated in a separate bill to be introduced by Early payment discount (aka FlexPay) – pre-pay your Rep. Barbara Sears (R-Monclova 2/13/2013 premiums online and receive discounts for early Township). payment; 2) Go-green discount – report your company’s payroll electronically and pay your BWC Cuts Budget Again, Proposes Medical premiums in full on ohiobwc.com for a potential Reform discount of 1 percent (up to $1,000) every six In the budget bill for the Ohio Bureau of Workers’ months; 3) Lapse-free discount – pay your premiums on time and have no lapse in coverage during the Compensation (BWC), Administrator Steve Buehrer
Page 161 of 203 proposes to lower expenditures in the coming the claimant's attorney fees and court costs the biennium, just as occurred in the current biennium. employer was liable for.
The proposal would appropriate $283.6 million for Now former Justice McGee Brown determined that fiscal year 2014 and $267 million for FY 2015. This is the claimant could collect all statutory - not a nearly 5 percent decrease compared to the original apportioned - attorney fees and court costs because FY 2012 - 2013 appropriation, which was a 12 his pinky finger injury was a legitimate workers' percent decrease from the previous biennium. compensation injury, and therefore eligible to appeal into Ohio court system, even though all other alleged The bureau budget is contained in House Bill 34, conditions were found not compensable under the sponsored by Representative Bob Hackett (R- workers' compensation system. London).
Employers are urged to cautiously consider court The bill takes a small, but significant, step in medical appeals of workers' compensation disputes. Consult reform. It would require an injured worker to use a an OMA workers' compensation account health care provider within a managed care organization’s network if the individual shows no manager. 1/30/2013 improvement 45 days after the injury under treatment with his or her current provider. BWC Amends Two Hour Safety Training Rule
In other states, employers are able to closely manage For several years, the Bureau of Workers’ the quality of medical care of injured workers. Not in Compensation (BWC) has required an employer that Ohio. Ohio is stuck in an outdated adversarial model participates in a group experience rating or group of care that compromises quality and drives up retrospective rating plan, and that sustains a claim cost. 2/6/2013 within the "green year" or the previous year, to complete two hours of safety training.
BWC and IC Budgets Expected to be Unveiled Effective as of January 1, 2013, the BWC amended Next Week its administrative rule in two important ways: 1) only claims in the “green” year will now trigger the The Bureau of Workers’ Compensation (BWC) and incremental safety requirement and not claims in the prior year (right now, the green year is 2011), and 2) the Industrial Commission budgets are expected to be employers will be able to, in lieu of the two hours of introduced in the legislature next week. Look for safety training, complete the BWC’s online accident some administrative and medical reforms that would analysis form and the bureau's associated online improve performance of the system.
safety class.
The OMA Safety and Workers’ Compensation Here is BWC’s FAQ about this change. The sixth Committee will discuss these budgets when it meets question contains guidance about how to access the on February 6. Additionally, BWC Chief Actuary, online accident form and safety class. Chris Carlson, will address the committee about initiatives under his leadership. Register For employers that need to comply and that opt for here. 1/31/2013 the two hours of training, the OMA will have qualifying no-charge safety webinars in March, April and May, and will communicate separately to affected Ohio Safety Congress 2013 Registration Opens employers in time to take advantage of these webinars. 1/16/2013 Ohio's largest safety learning event, the Ohio Safety Congress, sponsored by the Ohio Bureau of Workers' Help with OSHA Recordkeeping (video) Compensation, will be held April 9 -11 at the Greater Columbus Convention Center. Registration is now OMA just posted a new recorded webinar to its Online open. 1/30/2013 Video Library, Recordkeeping and Reporting Occupational Injuries and Illnesses. Subject matter Ohio Supreme Court Told Employer to Pay expert, Dianne Grote Adams (MS, CSP, CIH, CPEA) Claimant's Court Fees and Costs of OMA Connections Partner, Safex, gives practical advice about what is and what is not recordable. In this blog by OMA Connections Partner, Roetzel & Andress, we learn that Holmes v. Crawford Machine, Start your year of OSHA reporting on the right Inc., was heard by the Ohio Supreme Court to resolve foot. Content in the OMA Online Video Library is free, conflicting lower court decisions about how much of but members must log in.
Page 162 of 203 And don't forget to post your OSHA 300A log in a additions are the result of BWC's engagement with conspicuous location, certified by the highest ranking healthcare professionals. company executive in your facility, February 1 through 01/12/2013 April 30. Provider certification requirements have been strengthened to bring them more in line with nationally Another Legal Summary of the Class Action Case recognized standards. These include an expanded Against the BWC review of all providers' credentials to identify those whose licenses are under suspension or revocation, or are subject to disciplinary restrictions in another OMA Connections Partner, Dinsmore, attorney, state. George Wilkinson, offers his summary of the San Allen et. al. v. Steven Buehrer, Administrator, Bureau of Workers' Compensation class action decision Decertification protocols for providers with repeated which says that employers that did not participate in violations of workers' compensation rules or statutes group experience rating from 2001 - 2009 were have been clarified. 1/10/2012 overcharged premium and are owed restitution. Judge Finds BWC Overcharged Premium in Class Due to the significant sum, and the calculation Action Suit complexities, this case will be in litigation for a long time to come. 1/10/2013 In the Court of Common Pleas of Cuyahoga County, Judge Richard McGonagle has issued an opinion in San Allen, Inc. et al. v. Stephen Buehrer, BWC Service Offices to Implement Claims Triage Administrator, Ohio Bureau of Workers’ Approach Compensation (BWC), agreeing with the plaintiffs that the BWC overcharged employers not participating in With its new focus, "Prevention + Care," the Bureau of group experience rating (group) during the years of Workers’ Compensation (BWC) is rolling out a claims 2001-2009. triage program in its customer services offices in the first quarter of this year. The opinion found that the BWC undercharged premium to employers in group, and overcharged The BWC says that claims triage is its new model of employers not in group. handling claims based on their levels of The Court has ordered the BWC to make restitution to complexities. It involves moving from a "generalist employers in the class, refunding any overpaid concept to a specialist concept." premium offset by any amount of underpayment for employers that benefited from group participation in The roles of the claims service specialists (CSSs) in the coverage years of the case. The plaintiffs did not the service offices will become: intake specialists, present a winning argument regarding interest on the return-to-work (RTW) specialists, and remain-at-work overpayments. (RAW) specialists. A final global figure of restitution has yet to be As part of the claims triage process BWC indicates its submitted to the Court. The plaintiffs are to use the “Schwartz formula,” referring to Allen Schwartz, the staff will work closely with managed care plaintiff’s actuarial expert, to calculate its final organizations, employers, and injured workers to help restitution figure, less interest, and are to submit that return injured workers to work. Here’s a model letter figure to the Court by January 28, 2013. The BWC is BWC says it will send to some employers. 1/10/2013 given until February 28, 2013 to object. A hearing on the final restitution figure is set for March 14, 2013 at BWC Adds Rules to Strengthen Medical 1:00 p.m. 12/31/2012 Treatment Ohio Court Rules that BWC Overcharged Thousands The Bureau of Workers' Compensation announced that it is adding or clarifying rules that are intended to improve access to and quality of medical services for OMA Connections Partner, Roetzel & Andress, the state's injured workers. provides additional detail about the class action suit filed against the Bureau of Workers Compensation (BWC): "The case was filed in 2007 by Corky & One set of rules add a number of healthcare Lenny's, a suburban Cleveland deli, on behalf of a professionals to those that can be certified to treat class that may include up to 270,000 small Ohio injured workers, including adult day care facilities, employers. The plaintiffs claimed that employers that anesthesiologist assistants, independent diagnostic were not permitted into groups organized by third- testing facilities, and sleep laboratories. The
Page 163 of 203 party administrators throughout the state paid associated online safety class. This is intended to tie excessive premiums into the BWC's state insurance the learning directly to the risk. fund in order to subsidize deep discounts that were offered to employers that did qualify for group BWC administrator, Steve Buehrer, said ”BWC can membership." then use the data to better identify statewide trends and design loss prevention programs that meet the needs of Ohio employers.” And: "While the complaint initially alleged that damages to those employers could exceed $1.7 billion, counsel for the plaintiffs conceded that the For now, affected employers need to comply with this damages were actually more in the neighborhood of current administrative rule. 12/6/2012 $800 million." 1/3/2012 U.S. DOT Clarifies Position on Use of Marijuana Ohio Recognized for Reductions in Workers' The U.S. Department of Transportation (DOT) has Compensation Rates received inquiries about its regulation of the use of marijuana by safety‐sensitive transportation The Ohio Bureau of Workers' Compensation (BWC) employees as a result of some state-passed initiatives announced this week that Ohio workers’ to permit use of marijuana for “recreational” purposes. compensation rates have dropped from 17th to 28th in the most recent Oregon Premium Rate Ranking The DOT clarified that the state initiatives will have no Study, a biennial review of workers’ compensation bearing on its regulated drug testing program. The rates that is used as a national benchmark. Department of Transportation’s Drug and Alcohol Testing Regulation – 49 CFR Part 40 – does not In addition, rate-setting actions taken by the BWC authorize the use of Schedule I drugs, including over the past two years has resulted in the lowest marijuana, for any reason. 12/7/2012 collectible rates for private employers in 24 years. 12/20/2012 Court Limits Definition of “Deliberate Removal of Safety Guard” for Intentional Tort Claims Ohio Supreme Court Clarifies the Employer Intentional Tort Statute OMA Connections Partner, Roetzel & Andress, offers a good summary of a recent Ohio Supreme Court In the recent decision of Houdek v. ThyssenKrupp case, Hewitt v. L.E. Myers Company, that Materials, N.A., Inc., the Ohio Supreme Court clarified substantially limits the definition of “deliberate removal that in order to recover under Ohio’s employer of an equipment safety guard” necessary to create a intentional tort statute, a plaintiff must show that the rebuttable presumption of intent under Ohio’s employer acted with deliberate and specific intent to Employer Intentional Tort Statute. injure him. The Court’s holding is a significant result for employers and comes after a temporary period of In Hewitt, the injured employee argued that the confusion on the state of the law. employer deliberately removed an equipment safety guard by failing to instruct him to wear protective OMA Connections Partner, Roetzel & Andress, offer a good summary of a decision that manufacturers will rubber gloves and sleeves while working near welcome. 12/13/2012 energized electric lines. The Eighth District Court of Appeals accepted this broadened definition of BWC to Alter 2-Hour Safety Training Requirement “equipment safety guard,” construing this phrase to for 2013-14 Policy Year include freestanding items of personal protective Today the Bureau of Workers’ Compensation (BWC) equipment. The Ohio Supreme Court rejected this requires employers participating in group experience attempt to broaden the scope and brought the rating or group retrospective rating programs and definition of “deliberate removal of equipment safety he “green” year (now, 2011) having a claim in either t guard” back in line with the intent of the General or the prior year to complete two hours of additional safety training annually. Assembly. 11/21/2012
Starting in the next BWC policy year, July 1 2013 to Supreme Court Extends Thanksgiving and Keeps June 30, 2014, the BWC will modify the administrative the Gravy Coming rule in two ways. One is that claims outside of the green year will no longer trigger compliance, and two, A week after Thanksgiving and the injured worker there will be an additional way to gain compliance plaintiff attorneys continue eating gravy. This week other than taking two hours of safety the Ohio Supreme Court handed down its highly training. Employers will be able to complete a BWC anticipated decision in the Holmes vs. Crawford online post-accident analysis form and BWC’s
Page 164 of 203 Machine, Inc. case. The OMA submitted an amicus Managing Claims in the IC Process Critical brief on behalf of the appellee, Crawford Machine, Inc. The Court ruled against the OMA and its This blog post from OMA Connections Partner, interests. Roetzel & Andress, reminds employers to keep tabs on the disposition of all workers’ compensation claims The Court ruled that once a claimant’s right to moving through the Industrial Commission participate in the workers’ compensation fund is process. In this case, State ex rel. KPGW Holding established on appeal, the Ohio Revised Code Co., L.L.C. v Indus. Comm., the Tenth Appellate requires the trial court to award the claimant his costs. District of the Court of Appeals held that mandamus The trial court is not required to apportion costs based relief was not available when a party had failed to on the outcome or a particular claim or condition. appeal an order of the Industrial Commission.
The Holmes case sets the precedent that when a In this case, the claimant had filed two claims claimant can prove he is entitled to participate in the requesting that each be allowed for bilateral carpal workers’ compensation system for aclaim but is syndrome. The first claim was denied by a District denied participation for other conditions, he can still Hearing Officer. Seven months later the claimant filed collect maximum attorney fees and a claim for the same medical condition and that claim reimbursements. A more equitable system would was allowed by a District Hearing Officer. The require apportioning the costs. 11/29/12 employer did not appeal this order; since the employer had the right to appeal and did not, no relief BWC Launches New “My Profile Page” was available to the employer in the state court system. This week the Bureau of Workers’ Compensation (BWC) launched a new home page that employers If you have questions about any contested workers’ will see when they log in to their BWC account with compensation claims, contact OMA’s Barb Raduege username and password. From this page employers or Georgia Booth for an opinion, whether or not OMA is your workers’ compensation services will be able to update demographic information, supplier. 11/3/2012 review financial information, report payroll and pay premiums, review their claims history, and BWC Amends Policy and Gives Guidance on more. 11/14/2012 Medicare Set-Aside Rep. Sears Reviews Reform Bill at OMA Safety & Bureau of Workers’ Compensation (BWC) Workers' Comp Committee administrator, Stephen Buehrer, has caused revisions to be made to the confusing Medicare set-aside This week State Representative Barbara Sears (R – provision of workers’ compensation Monclova Township) headlined the OMA Safety & settlements. Here is his letter that gives guidance Workers’ Compensation Committee. Rep. Sears reviewed her proposal contained in House Bill 517 and generally improves the policy. 11/8/2012 and discussed the workers' compensation reforms the legislature is planning in the upcoming General Assembly. She asked OMA members to provide reform ideas big and small. To have your voice heard, contact OMA's Rob Brundrett.
Also addressing the committee were the new Bureau of Workers' Compensation Chief Legal Counsel, Sarah Morrison, and Assistant General Counsel, Tom Sico. Some of the cases they reviewed are summarized in this report from OMA counsel, Tom Sant of Bricker & Eckler LLP.
Next year’s Safety &Workers' Compensation committee dates are set; please put these dates on your 2013 calendar: February 6, May 30, and November 7. To join the committee to follow developments in your inbox, by phone or in-person, subscribe here. 11/08/2012
Page 165 of 203 Workers' Compensation Legislation Prepared by: The Ohio Manufacturers' Association Report created on March 4, 2013
HB33 INDUSTRIAL COMMISSION BUDGET (HACKETT R) To make appropriations for the Industrial Commission for the biennium beginning July 1, 2013, and ending June 30, 2015, and to provide authorization and conditions for the operation of Commission programs. Current Status: 3/6/2013 - Senate Commerce and Labor, (First Hearing) All Bill Status: 2/28/2013 - PASSED BY HOUSE; Vote 97-0 2/28/2013 - Bills for Third Consideration 2/27/2013 - Re-Referred to Committee 2/27/2013 - House Finance and Appropriations, (Second Hearing) 2/26/2013 - REPORTED OUT, House Insurance, (Second Hearing) 2/26/2013 - House Finance and Appropriations, (First Hearing) 2/12/2013 - House Insurance, (First Hearing) 2/6/2013 - Referred to Committee House Insurance 2/5/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_33
HB34 WORKERS' COMPENSATION BUDGET (HACKETT R) To allow the Administrator of Workers' Compensation to pay for specified medical benefits during an earlier time frame, to make changes to the Health Partnership Program, to eliminate the $15,000 Medical-Only Program, to make other changes to the Workers' Compensation Law, and to make appropriations for the Bureau of Workers' Compensation for the biennium beginning July 1, 2013, and ending June 30, 2015; and to provide authorization and conditions for the operation of the Bureau's programs. Current Status: 3/6/2013 - Senate Commerce and Labor, (First Hearing) All Bill Status: 2/28/2013 - PASSED BY HOUSE; Vote 96-0 2/28/2013 - Bills for Third Consideration 2/27/2013 - Re-Referred to Committee 2/27/2013 - House Finance and Appropriations, (Second Hearing) 2/26/2013 - REPORTED OUT, House Insurance, (Second
Hearing) 2/26/2013 - House Finance and Appropriations, (First Hearing) 2/12/2013 - SUBSTITUTE BILL ACCEPTED, House Insurance, (First Hearing) 2/6/2013 - Referred to Committee House Insurance 2/5/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_34
HB59 BIENNIAL BUDGET (AMSTUTZ R) To make operating appropriations for the biennium beginning July 1, 2013, and ending June 30, 2015; to provide authorization and conditions for the operation of state programs. Current Status: 3/8/2013 - House Primary and Secondary Education
Subcommittee, (Ninth Hearing) All Bill Status: 3/7/2013 - House Health and Human Services Subcommittee, (Sixth Hearing)
3/7/2013 - , (Fourth Hearing) 3/7/2013 - House Higher Education Subcommittee, (Eighth
Page 166 of 203 Hearing) 3/7/2013 - House Transportation Subcommittee, (Eighth Hearing) 3/7/2013 - House Agriculture and Development Subcommittee, (Sixth Hearing) 3/7/2013 - House Primary and Secondary Education Subcommittee, (Eighth Hearing) 3/6/2013 - House Health and Human Services Subcommittee, (Fifth Hearing) 3/6/2013 - , (Third Hearing) 3/6/2013 - House Higher Education Subcommittee, (Seventh Hearing) 3/6/2013 - House Transportation Subcommittee, (Seventh Hearing) 3/6/2013 - House Agriculture and Development Subcommittee, (Fifth Hearing) 3/6/2013 - House Primary and Secondary Education Subcommittee, (Seventh Hearing) 3/5/2013 - Senate Ways and Means, (First Hearing) 3/5/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 3/5/2013 - , (Second Hearing) 3/5/2013 - House Higher Education Subcommittee, (Sixth Hearing) 3/5/2013 - House Transportation Subcommittee, (Sixth Hearing) 3/5/2013 - House Agriculture and Development Subcommittee, (Fourth Hearing) 3/5/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 3/1/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 2/28/2013 - , (Second Hearing) 2/28/2013 - House Primary and Secondary Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Agriculture and Development Subcommittee, (Third Hearing) 2/28/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/28/2013 - House Higher Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Transportation Subcommittee, (Fifth Hearing) 2/27/2013 - House Ways and Means, (First Hearing) 2/27/2013 - House Agriculture and Development Subcommittee, (Second Hearing) 2/27/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 2/27/2013 - House Transportation Subcommittee, (Fourth Hearing) 2/27/2013 - House Higher Education Subcommittee, (Fourth Hearing) 2/26/2013 - House Primary and Secondary Education Subcommittee, (Third Hearing) 2/26/2013 - House Agriculture and Development Subcommittee,
Page 167 of 203 (First Hearing) 2/26/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/26/2013 - House Transportation Subcommittee, (Third Hearing) 2/26/2013 - House Higher Education Subcommittee, (Third Hearing) 2/21/2013 - House Higher Education Subcommittee, (Second Hearing) 2/21/2013 - House Health and Human Services Subcommittee, (Second Hearing) 2/21/2013 - House Transportation Subcommittee, (Second Hearing) 2/21/2013 - House Primary and Secondary Education Subcommittee, (Second Hearing) 2/20/2013 - House Higher Education Subcommittee, (First Hearing) 2/20/2013 - House Health and Human Services Subcommittee, (First Hearing) 2/20/2013 - House Transportation Subcommittee, (First Hearing) 2/20/2013 - House Primary and Secondary Education Subcommittee, (First Hearing) 2/14/2013 - House Finance and Appropriations, (Fourth Hearing) 2/13/2013 - Referred to Committee House Finance and Appropriations 2/13/2013 - House Finance and Appropriations, (Third Hearing) 2/12/2013 - House Finance and Appropriations, (Second Hearing) 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
Page 168 of 203
TO: OMA Government Affairs Committee FROM: Ryan Augsburger/Rob Brundrett DATE: March 6, 2013 SUBJECT: Tax Policy Update
Overview The 130th General Assembly was sworn into office at the beginning of January. The legislature will be dominated by the debate surrounding the state operating budget until July. The Governor unveiled the plan in early February. It consists of three major proposals: tax reform, Medicaid expansion and a new school funding formula
State Financial Condition Real GDP growth was essentially unchanged in the fourth quarter of 2012 following a 3.1% increase in the third quarter
U.S. total nonfarm employment increased by 157,000 jobs in January, and gains in previous months were revised upward considerably. The unemployment rate increased to 7.9% from 7.8% during the two previous months.
Ohio total nonfarm payroll employment decreased by 9,400 jobs in December, but increased by 90,700 on the year. The Ohio unemployment rate decreased from 6.8% to 6.7% ending at 1.1 percentage points below the national unemployment rate in December.
Leading economic indicators have weakened recently, but remain consistent with uninterrupted growth at a modest pace across the country and especially in Ohio.
State Budget Proposal The Governor released his state budget proposal on February 4. The proposal contains a new income tax cut and service tax structure. The plan moves the tax base further from income and puts more of the burden on consumption based taxes.
Income tax The Governor’s income tax cut has two parts. The first part would cut the income tax for all payers by 20 percent. This would reduce the top marginal tax rate from 5.925 percent to 4.74 percent. The cut would be phased in over three years.
The second part of the income tax would be targeted at small businesses. Owners of pass through entities would be allowed a deduction of 50 percent of their annual income up to $750,000 with the deduction capped at $375,00.
Sales tax The Governor’s plan would expand the sales tax base to include a wide range of services but would exempt certain services essential to all families. The overall sales tax rate for Ohio would drop from 5.5 percent to 5.0 percent.
Page 169 of 203 Severance Tax/Income Tax Reduction The Governor is also pushing an increase in the severance tax. Last year he attempted to raise the severance tax on horizontal wells operating in Ohio and tied that income generated to a fluctuating income tax reduction. This plan introduced in the budget would also raise the severance tax but is not tied to a fluctuating drop in income tax rates. The proposed income tax rate in this budget is permanent at 20 percent.
130th General Assembly Legislation House Bill 46 Representative Amstutz (R-Wooster) introduced a bill this session that would install some much needed reforms within the Board of Tax Appeals. The bill would allow parties us email or facsimile to file notice of appeals, require the Board to establish a case management schedule for appeals, and authorize the Tax Commissioner to expedite and issue final determinations for certain property value appeals. The OMA has long advocated for reforms to the BTA.
The state operating budget bill has similar reforms included within its proposals. Look for the first steps of BTA reform to take place this summer with the passage of either of these bills.
Lame Duck Legislation House Bill 601 House Republicans introduced House Bill 601 which was billed as an attempt to create more uniformity amongst local government income taxes. The bill received only one hearing in early December. The House decided not push the issue at the end of the session and the coalition of business groups supporting the bill including the OMA agreed not to push until the next General Assembly.
Representatives Grossman and Henne have reintroduced the bill in this General Assembly (HB 5). The House has designated this bill a priority issue. Local Governments have mobilized and are fighting the legislation and have made inroads with many of their local legislators. As of now the bill appears to be headed for a major fight. House Republicans are considering putting the bill on hold after it receives sponsor testimony until after the House passes the state operating budget. Senate Republicans have not indicated whether this is a priority issue or not for their caucus. There is rumored to be at least two other bills with Republican support that might be introduced with support from local governments.
House Bill 510 During lame duck the General Assembly passed House Bill 510 which was originally part of the Governors’ Mid-Biennium Review bill package. The legislation reforms and updates the manner in which Ohio taxes its financial institutions. The bill creates a new financial institutions tax replacing the corporation franchise tax and tax on dealers in intangibles. The modernization on how these institutions are taxed lowers the rate in which they are taxed.
House Bill 472 During lame duck the General Assembly passed HB 472 that included a midnight amendment providing a new carve out in the Commercial Activities Tax (CAT). The bill
Page 170 of 203 allowed businesses who operate precious metal smelters to be exempt from the CAT. This amendment appears to favor a single business in southeast Ohio.
CAT Refunds The Governor announced in December that the Department of Taxation is changing its policies and procedures regarding CAT overpayments. Current Ohio law requires businesses to request a refund. The law does not obligate the state to notify a taxpayer if a refund is available. The Department is now researching to see if companies have made overpayments and are sending refund checks regardless if a company has requested their refund.
Estate Tax Repeal The Estate Tax was repealed as a rider to the state budget last General Assembly. The repeal went into effect January 1, 2013. The OMA advocated in support of repeal. This was a significant policy gain during the last General Assembly.
General Assembly Committee Assignments The Ohio House and Senate have made their committee assignments for the 130th General Assembly. Both the House and Senate have returned the previous Ways and Means Committee Chairmen. Peter Beck (R-Mason) and Tim Schaffer (R-Lancaster) will be back with gavel in hand for the 130th. Both committee chairs could play a large role in the tax reform package the Governor has proposed in his budget. We will continue monitoring the both Ways and Means Committees for any news and updates.
Beaver Case – CAT and the Department of Transportation The Ohio Supreme Court ruled in Beaver that the CAT on receipts related to motor fuel transactions violated a portion of the Ohio Constitution. This tax related to motor fuel and should be devoted to a specific purpose. It appears through the decision $140 million annually will come to the Department of Transportation. They indicated at their budget testimony that they will use the new money to pay down agency debt.
Page 171 of 203 Tax governor’s sales tax proposal and his personal income tax reforms. 2/21/2013
Manufacturers Go to Work on Governor's Budget Municipal Tax Reform Debate Returns to Legislature: It's Time for OMA Members to Act OMA Chairman Rick Schostek, Senior Vice President, Honda North America, is creating a task force to This week Representatives Cheryl Grossman (R- manage OMA advocacy for the governor's tax Grove City) and Mike Henne (R-Clayton) provided proposal. The task force will be chaired by OMA sponsor testimony on House Bill 5, an updated Treasurer Rick Jones, Vice President-Finance, version of the municipal tax reform bill introduced late Worthington Steel. in the last General Assembly.
The task force will take OMA member input on ways The sponsors quoted Stephen Lewis of Ford Motor to improve the governor's tax reforms. Send your Company, Mark Russell of Worthington Industries, recommendations to Rob Brundrett, who is staffing and Michelle Kuhrt of Lincoln Electric, who each the task force. 3/1/2013 urged making the municipal income taxes more consistent and uniform in testimony before the Ohio Board of Tax Appeals to Become Less Taxing? House 21st Century Manufacturing Task Force in 2012.
Representative Ron Amstutz (R-Wooster) recently OMA tax counsel Mark Engel of Bricker & Ecker LLP introduced House Bill 46, a bill designed to improve has provided a summary of the new bill. the speed and efficiency of the Ohio Board of Tax Appeals. The bill creates a small claims division, Manufacturers who support reforming the municipal allows parties to file appeals via email, requires the income tax should immediately contact their state board to establish a case management schedule for representatives and senators. Legislators are being appeals, and allows the tax commissioner to expedite pressured by municipalities that oppose the bill. They final determinations for property value appeals. need to hear about the positive effect the proposal will have on your company. The OMA has long advocated for improvements at the board and finally it looks like the General Find your state legislators here. Assembly might act. 2/21/13 Please copy Rob Brundrett on any And More Analysis of Ohio Tax Change Proposals correspondence. Rob manages OMA’s Tax Committee and will head up OMA tax advocacy in the 2/14/13 OMA Connections Partner, Taft, has prepared a General Assembly. summary of how the proposed Ohio tax changes might affect you and your business. Tax Officials Brief OMA Members on Governor's Taft notes: "From the state’s standpoint, the Budget combination of tax rate reductions and broadening of This week the OMA Tax Committee heard an analysis the tax base would be a net reduction in taxes paid of the governor’s proposed tax reform package from and collected. Proposed tax increases of $5.7 billion three Ohio Department of Taxation officials: Deputy over a three-year period (state fiscal years 2014- Commissioner, Nick Cipiti, Deputy Counsel, Charlie 2016) would be more than offset by over $7 billion in Rhilinger, and Assistant Administrator, Steve Russell, tax reductions over that same period. From an who attended the meeting on behalf of Commissioner individual business’ standpoint, the results could be Joe Testa. significantly different. For example, if a service business does not currently pay state sales taxes, The department representatives said the the budget what amounts to a five plus percent tax on their gross framework is balanced but that implementation details receipts (or a substantial portion of them) is not likely of its provisions are still being ironed out. OMA Tax to be offset by the income tax reductions." 2/18/2013 Committee chairman, Allan Thompson, Manager - Corporate Taxes, AK Steel, suggested that a working group of manufacturers be formed to advise the
department about the affects of new administrative Brief Summaries of Governor’s Sales and Income and regulatory reforms. The department officials Tax Proposals welcomed the OMA input. 2/13/14 OMA tax counsel Mark Engle of Bricker & Eckler LLP has prepared these two brief summaries of the
Page 172 of 203 Kasich Taxation Innovation Municipal Income Tax Reform Legislation Reintroduced On February 4, as he unveiled his biennial budget, Governor Kasich proposed a 50 percent personal Among the priority bills of the House of income tax exclusion from the first $750,000 of Representatives is a municipal income tax reform bill income for owners of pass-through entities. The OMA from the last General Assembly. Re-introduced by Representatives Cheryl Grossman (R-Grove City) and called the governors’ plan “truly innovative.” Michael Henne (R-Clayton), House Bill 5 seeks to make Ohio’s municipal income taxes more uniform “The effect of this specific proposal would be to free across the more than 600 taxing municipalities. up much-needed working capital for small businesses across Ohio, increasing job-creating investment in The OMA is participating in a coalition that supports those companies. The proposed personal income tax uniformity to ease the administrative burden on firms reduction also would help entrepreneurs in early- operating in multiple municipalities. The bill received stage businesses where the risks are high and heavy criticism last year from local governments and working capital often is in short supply,” said OMA the Ohio Municipal League, which fear a loss of revenue and control. president Eric Burkland in a release to the media. Join the OMA Tax Committee on February 12 to learn The governor’s proposal includes a 20 percent how to help enact House Bill 5. Tax Commissioner reduction in all personal income tax rates. The Joe Testa will present perspectives on this bill as well governor pays for the personal income tax rate as other tax policy proposals in the governor’s newly reductions by broadening the sales tax base to proposed budget. Register here. 1/31/2013 services and increasing the state severance tax on the extraction of oil and gas using horizontal drilling. JobsOhio (Finally) to Issue Bonds Broadening the sales tax base also allows the It was reported this week that JobsOhio will move governor to lower the sales tax rate from 5.5 percent forward in issuing $1.5 billion in bonds to complete its to 5 percent. leasing of Ohio’s wholesale liquor profits, which it plans to use in its economic development activity. OMA tax counsel Mark Engle of Bricker & Eckler LLC writes in a summary of the governor’s proposal: “This The private agency announced it received a favorable proposal reflects a policy decision to shift Ohio’s rating from two bond agencies. revenue sources from income and investment to consumption.” This is a welcome policy decision for JobsOhio continues to face a legal threat as it awaits Ohio manufacturing. 2/6/2013 an Ohio Supreme Court decision that will determine whether several Democratic legislators and Progress Contact Your Legislator. Now. Ohio, a policy think tank, have standing to sue the organization to prevent its use of liquor profits. 1/10/2013 acturers who support Governor Kasich’s call for Manuf reform of the personal income tax should immediately contact their state representatives and Fiscal Cliff Legislation – Experts Run Down What senators. Legislators are being bombarded by Happened to Taxes special interests that oppose the reforms. They need to hear from business leaders about the positive effect the governor’s proposal will have on the Ohio OMA Connections Partner, GBQ Partners, reports economy. that the bill that averted the"fiscal cliff" passed by the U.S. House and Senate provides greater certainty Find your state legislators here. with regard to income tax rates, which "hopefully will allow business owners and individuals an opportunity Please copy Rob Brundrett on any to plan for the future. In many respects the deal is not correspondence. Rob manages OMA’s Tax a temporary fix, as many thought might happen at the Committee and will head up the manufacturing tax last minute. Changes to tax rates on ordinary income, advocacy effort in the General Assembly. estate tax, dividends, capital gains, and the Alternative Minimum Tax patch, are intended to be The Tax Committee meets on Tuesday, February permanent in nature." Here's their rundown. 12. All OMA members can register here for phone or 2/6/2013 in-person attendance. And another OMA Connections Partner, Plante Moran, offers this version of the tax impacts. 1/2/2013
Page 173 of 203 Tangible Property Regulation Delayed - Taxpayers Going forward the state must use this revenue for May Benefit from Early Adoption road projects. The ruling is estimated to shift $140 million a year to road projects. Here's a summary by 12/13/12 OMA Connections Partner, Plante Moran, reports that OMA tax counsel Bricker & Eckler LLP. the IRS has deferred the effective date of new tangible property regulations from tax years beginning on or after January 1, 2012, to tax years beginning on OMA Calls on Congress to Hold the Line on or after January 1, 2014. The new regulations were Federal Payroll Taxes issued in late December 2011 to guide taxpayers on On December 10, the OMA and other national and how to account for amounts paid to acquire, produce, state business organizations urged leaders in or improve tangible property. Congress not to increase the Federal Unemployment Tax (FUTA). The letter asked congressional With the announced delay in the effective date, leadership to maintain current FUTA rates and base, taxpayers may benefit from the early adoption of protect employer financed federal unemployment trust either the entire regulations or select fund accounts, and eliminate restrictions on state provisions. Plante Moran offers a summary of the solvency measures. The business coalition urged new guidance and potential planning opportunities Congress to prevent any further increases to the tax and a comprehensive article covering the tangible burden and provide states the flexibility to address property regulations. 12/18/2012 state unemployment trust fund solvency issues. 12/13/12
Legislature Doles Out More CAT Exemptions for Christmas Uniform Municipal Income Taxes?...Not so Fast
As the General Assembly was winding down late last This week the Ohio House of Representatives heard week, the Senate slipped an amendment into House sponsor testimonies on House Bill 601, which would Bill 472 that exempts precious metal smelters from create more uniformity throughout Ohio’s various the commercial activity tax (CAT). The amendment municipal income tax codes. While the bill has the apparently is targeted to benefit a smelter in support of a broad coalition of business groups southeast Ohio. including the OMA, cities continue to oppose the bill arguing that the bill erodes home-rule and reduces This latest carve-out emphasizes the importance of local income tax revenues. defending the CAT during the budget process next year. 12/20/2012 The sponsors of the bill indicated that they are not
seeking passage of the legislation in the lame duck session, but instead want to engage all stakeholders Ohio Refunding Overpaid CAT in a public forum in the hope that they can pass the bill in the next General Assembly. The House has Earlier this week, Governor Kasich and Tax shown interest in continuing hearings through the Commissioner Joe Testa held a press conference to lame duck session to hear from the various announce a new policy whereby the Ohio Department stakeholders. 11/29/2012 of Taxation (ODOT) is proactively identifying business tax refunds and contacting taxpayers so that they may request those funds back from the State of Ohio. The initial focus is on overpaid commercial Thompson Takes the Reins activity tax (CAT).
OMA Connections Partner, GBQ Partners, offers this summary of the potential opportunity. 12/20/2012
Beaver Attacks CAT Late last week the Ohio Supreme Court issued its ruling on Beaver Excavating Co. v. Testa. In a 6-1 decision the Court ruled that the state could no longer use the money generated by the commercial activity tax (CAT) on sale of motor vehicle fuel. The court found that the state was violating the constitution's ban on using gas tax revenues for non highway purposes. Allan Thompson, Manager, Corporate Taxes, AK Steel Corporation, was installed as chairman of the
Page 174 of 203 OMA Tax Committee this week. Allan takes over from Anthony Long, Assistant Counsel, Honda of America Manufacturing. Before passing the gavel to Allan, Tony recounted the momentous period that saw the elimination of personal property tax, elimination of corporate franchise tax, 21% reduction of personal income tax, elimination of estate tax, and defense of the broad-base, low-rate commercial activity tax.
“OMA members owe Tony a debt of gratitude for his decade of tax policy leadership and I look forward to working with committee members to build on the strong foundation,” said Chairman Thompson.
The committee discussed: a proposal to make municipal income tax collection practices more uniform; a proposal to revise to the Board of Tax Appeals processes; and principles for potential restructuring of severance taxes on “fracked” oil and gas production.
Governor Kasich’s budget director, Timothy Keen, visited with the group about the upcoming state budget. Contact the OMA’s Rob Brundrett at any time to discuss tax matters of concern or interest. 11/16/201
A Snapshot of the New Auditing Clarity Standards
According to OMA Connections Partner, GBQ Partners LLC, the auditing world has been abuzz lately with the Clarity Standards, an initiative the American Institute of CPAs has been working on since 2004; the new standards are finally effective for December 31, 2012 year-ends. The goal is to converge the U.S. generally accepted auditing standards (GAAS) with the international standards on auditing, making GAAS easier to apply for nonpublic companies and making the standards more consistent throughout the world.
There are two significant differences under the new standards that will be clearly visible to management of an audited entity. They relate to the auditor's opinion report and the management representation letter. These differences are designed to help the auditor better communicate with management. Read more. 11/13/2012
Page 175 of 203 Taxation Legislation Prepared by: The Ohio Manufacturers' Association Report created on March 3, 2013
HB5 MUNICIPAL CORPORATIONS INCOME TAXES (GROSSMAN C, HENNE M) To revise the laws governing income taxes imposed by municipal corporations. Current Status: 2/13/2013 - House Ways and Means, (First Hearing) All Bill Status: 1/30/2013 - Referred to Committee House Ways and Means
1/30/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_5
HB24 TAX EXPENDITURE REVIEW COMMITTEE (BOOSE T) To create a Tax Expenditure Review Committee for the purpose of periodically reviewing existing and proposed tax expenditures. Current Status: 2/6/2013 - Referred to Committee House Ways and Means All Bill Status: 2/5/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_24
HB26 SALES-USE TAX EXEMPTION (MAAG R) To exempt from sales and use taxes the sale or use of investment metal bullion and coins. Current Status: 2/6/2013 - Referred to Committee House Ways and Means All Bill Status: 2/5/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_26
HB40 INVESTIGATION OF LOST FUNDS-LIBOR (FOLEY M) To require the Treasurer of State to investigate whether state treasury funds, custodial funds, or funds of state institutions of higher education were lost as a result of fraudulent manipulations to the LIBOR and to declare an emergency. Current Status: 2/13/2013 - Referred to Committee House Policy and Legislative
Oversight All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_40
HB46 SMALL CLAIMS DIVISION-TAX APPEALS BOARD (AMSTUTZ R) To create a small claims division of the Ohio Board of Tax Appeals, to allow for parties to file a notice of appeal to the Board by facsimile or electronic transmission using electronic mail, to require the Board to establish a case management schedule for appeals, and to authorize the Tax Commissioner to expedite and issue a final determination for residential property value appeals with written consent of the parties. Current Status: 2/13/2013 - Referred to Committee House Ways and Means All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_46
HB54 INTERNAL REVENUE CODE (BECK P) To expressly incorporate changes in the Internal Revenue Code since December 20, 2012, into Ohio law, and to declare an emergency. Current Status: 2/27/2013 - REPORTED OUT AS AMENDED, House Ways and
Means, (Second Hearing) All Bill Status: 2/13/2013 - Referred to Committee House Ways and Means 2/13/2013 - House Ways and Means, (First Hearing) 2/12/2013 - Introduced
Page 176 of 203 State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_54
HB56 BUSINESS PROPERTY TAX EXEMPTION (GERBERRY R) To allow a board of township trustees to reduce the percentage or term of a property tax exemption granted to a business under a tax increment financing agreement if the business fails to create the number of new jobs the business agreed to create in the agreement. Current Status: 2/13/2013 - Referred to Committee House State and Local
Government All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_56
HB59 BIENNIAL BUDGET (AMSTUTZ R) To make operating appropriations for the biennium beginning July 1, 2013, and ending June 30, 2015; to provide authorization and conditions for the operation of state programs. Current Status: 3/8/2013 - House Primary and Secondary Education
Subcommittee, (Ninth Hearing) All Bill Status: 3/7/2013 - House Health and Human Services Subcommittee, (Sixth Hearing) 3/7/2013 - , (Fourth Hearing) 3/7/2013 - House Higher Education Subcommittee, (Eighth Hearing) 3/7/2013 - House Transportation Subcommittee, (Eighth Hearing) 3/7/2013 - House Agriculture and Development Subcommittee, (Sixth Hearing) 3/7/2013 - House Primary and Secondary Education Subcommittee, (Eighth Hearing) 3/6/2013 - House Health and Human Services Subcommittee, (Fifth Hearing) 3/6/2013 - , (Third Hearing) 3/6/2013 - House Higher Education Subcommittee, (Seventh Hearing) 3/6/2013 - House Transportation Subcommittee, (Seventh Hearing)
3/6/2013 - House Agriculture and Development Subcommittee, (Fifth Hearing) 3/6/2013 - House Primary and Secondary Education Subcommittee, (Seventh Hearing) 3/5/2013 - Senate Ways and Means, (First Hearing) 3/5/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 3/5/2013 - , (Second Hearing) 3/5/2013 - House Higher Education Subcommittee, (Sixth Hearing) 3/5/2013 - House Transportation Subcommittee, (Sixth Hearing) 3/5/2013 - House Agriculture and Development Subcommittee, (Fourth Hearing) 3/5/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 3/1/2013 - House Primary and Secondary Education Subcommittee, (Sixth Hearing) 2/28/2013 - , (Second Hearing)
Page 177 of 203 2/28/2013 - House Primary and Secondary Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Agriculture and Development Subcommittee, (Third Hearing) 2/28/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/28/2013 - House Higher Education Subcommittee, (Fifth Hearing) 2/28/2013 - House Transportation Subcommittee, (Fifth Hearing) 2/27/2013 - House Ways and Means, (First Hearing) 2/27/2013 - House Agriculture and Development Subcommittee, (Second Hearing) 2/27/2013 - House Health and Human Services Subcommittee, (Fourth Hearing) 2/27/2013 - House Transportation Subcommittee, (Fourth Hearing) 2/27/2013 - House Higher Education Subcommittee, (Fourth Hearing) 2/26/2013 - House Primary and Secondary Education Subcommittee, (Third Hearing) 2/26/2013 - House Agriculture and Development Subcommittee, (First Hearing) 2/26/2013 - House Health and Human Services Subcommittee, (Third Hearing) 2/26/2013 - House Transportation Subcommittee, (Third Hearing) 2/26/2013 - House Higher Education Subcommittee, (Third Hearing) 2/21/2013 - House Higher Education Subcommittee, (Second Hearing) 2/21/2013 - House Health and Human Services Subcommittee, (Second Hearing) 2/21/2013 - House Transportation Subcommittee, (Second Hearing) 2/21/2013 - House Primary and Secondary Education Subcommittee, (Second Hearing) 2/20/2013 - House Higher Education Subcommittee, (First Hearing) 2/20/2013 - House Health and Human Services Subcommittee, (First Hearing) 2/20/2013 - House Transportation Subcommittee, (First Hearing) 2/20/2013 - House Primary and Secondary Education Subcommittee, (First Hearing) 2/14/2013 - House Finance and Appropriations, (Fourth Hearing) 2/13/2013 - Referred to Committee House Finance and Appropriations 2/13/2013 - House Finance and Appropriations, (Third Hearing) 2/12/2013 - House Finance and Appropriations, (Second Hearing) 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
HB63 TAX CREDIT- OIL AND GAS PRODUCTION (CERA J, O'BRIEN S) To establish a
Page 178 of 203 nonrefundable commercial activity tax credit for companies involved in horizontal well drilling or related oil and gas production services that hire Ohio residents or dislocated workers who have enrolled in or completed a federally registered apprenticeship program. Current Status: 2/20/2013 - Referred to Committee House Ways and Means All Bill Status: 2/14/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_63
HB81 TAX EXPENDITURES EFFECTIVENESS (DRIEHAUS D, FOLEY M) To provide for the periodic appraisal of the effectiveness of tax expenditures. Current Status: 2/27/2013 - Referred to Committee House Policy and Legislative
Oversight All Bill Status: 2/26/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_81
HCR6 FEDERAL EXCISE TAX-MEDICAL DEVICES (BRENNER A, HUFFMAN M) To urge the Congress of the United States and the President of the United States to repeal the new federal excise tax on medical devices. Current Status: 2/27/2013 - Referred to Committee House Health and Aging All Bill Status: 2/27/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HCR_6
SB27 PROPERTY TAX EXEMPTION-MILITARY VETERANS (SCHAFFER T) To exempt from property taxation the primary residences of military veterans who are 100% disabled from a service-connected disability. Current Status: 2/27/2013 - Senate Ways and Means, (First Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Ways and Means
2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_27
SB28 INTERNAL REVENUE CODE (OBHOF L) To expressly incorporate changes in the Internal Revenue Code since December 20, 2012, into Ohio law, and to declare an emergency. Current Status: 2/27/2013 - REPORTED OUT AS AMENDED, Senate Ways and
Means, (First Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Ways and Means
2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_28
SB29 INCOME TAX REFUND-JUDGMENT DEBTOR TENANT (SCHAFFER T) To enable a judgment creditor landlord to obtain a court order directing the Tax Commissioner to pay the judgment debtor tenant's income tax refund to the landlord. Current Status: 2/27/2013 - Senate Ways and Means, (First Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Ways and Means
2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_29
SB30 AMERICAN RED CROSS CONTRIBUTIONS (SCHAFFER T) To allow taxpayers to make contributions to the American Red Cross Ohio Disaster Response Readiness and preparedness Fund through their income tax returns. Current Status: 2/27/2013 - Senate Ways and Means, (First Hearing)
Page 179 of 203 All Bill Status: 2/13/2013 - Referred to Committee Senate Ways and Means
2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_30
SB31 INCOME TAX CREDIT-TEACHERS (SCHAFFER T) To allow a credit against the personal income tax for amounts spent by teachers for instructional materials. Current Status: 2/27/2013 - Senate Ways and Means, (First Hearing) All Bill Status: 2/13/2013 - Referred to Committee Senate Ways and Means
2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_31
SB42 PROPERTY TAXES-SCHOOL SECURITY (MANNING G, GARDNER R) To authorize school districts to levy a property tax exclusively for school safety and security purposes. Current Status: 3/5/2013 - Senate Ways and Means, (Second Hearing) All Bill Status: 2/27/2013 - Senate Ways and Means, (First Hearing) 2/20/2013 - Referred to Committee Senate Ways and Means 2/14/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_42
SB52 PROPERTY TAX COMPLAINTS (COLEY W) To permit property tax complaints to be initiated only by the property owner. Current Status: 3/5/2013 - Senate Ways and Means, (First Hearing) All Bill Status: 2/27/2013 - Referred to Committee Senate Ways and Means
2/25/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_52
SB56 INCOME TAX REFUNDS (KEARNEY E) To require the Department of Taxation to provide taxpayers the option of receiving their income tax refund in the form of a prepaid debit card. Current Status: 3/5/2013 - Senate Ways and Means, (First Hearing) All Bill Status: 2/27/2013 - Referred to Committee Senate Ways and Means
2/25/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_56
SCR1 FEDERAL EXCISE TAX-MEDICAL DEVICES (JORDAN K) To urge the Congress of the United States and the President of the United States to repeal the new federal excise tax on medical devices. Current Status: 2/13/2013 - Referred to Committee Senate Medicaid, Health and
Human Services All Bill Status: 2/12/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SCR_1
Page 180 of 203 Ohio Legislative Service Commission Budget In Brief H.B. 59 – As Introduced
GRF Revenues by Source ($ in millions)
$12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Personal Income Tax Sales & Use Tax Other Taxes Non-Tax State Federal Grants Receipts FY 2012 (Actual) FY 2013 (Estimate) FY 2014 (Forecast) FY 2015 (Forecast)
FY 2012 FY 2013 FY 2014 FY 2015 Revenue Source (Actual) (Estimate) (Forecast) (Forecast)
Personal Income Tax $8,432.9 $9,250.5 $7,733.7 $7,182.0
Sales & Use Tax $8,087.0 $8,367.9 $10,199.3 $11,171.9
Other Taxes $2,485.3 $2,986.2 $2,868.1 $3,006.7
State Non-Tax Receipts $817.4 $1,001.1 $453.5 $481.1 Federal Grants $7,363.0 $7,608.6 $9,423.3 $10,982.1
Total $27,185.5 $29,214.3 $30,677.9 $32,823.8
Total (State and Federal) GRF Appropriations ($ in millions) $20,000 $17,500 $15,000 $12,500 $10,000 $7,500 $5,000 $2,500 $0 K-12 Education Human Services Higher Education Corrections General Government
FY 2012 (Actual) FY 2013 (Estimate) FY 2014 (Appropriation) FY 2015 (Appropriation)
FY 2012 FY 2013 FY 2014 FY 2015 Program Area (Actual) (Estimate) (Appropriations) (Appropriations)
K-12 Education $7,631.8 $7,992.1 $8,399.8 $8,668.8 Human Services $13,398.7 $13,868.8 $16,252.4 $17,969.5 Higher Education $2,182.7 $2,308.0 $2,323.0 $2,376.1 Corrections $1,660.6 $1,709.4 $1,718.9 $1,712.6 General Government $1,520.8 $1,777.4 $1,878.1 $1,934.9
Total $26,394.6 $27,655.6 $30,572.2 $32,662.0 Note: Revenues may not equal expenditures due to factors such as carryover balances, encumbrances, and transfers.
Page 181 of 203 Appropriation Highlights
The executive budget provides total state and federal GRF appropriations of $30.57 billion in FY 2014 and $32.66 billion in FY 2015, increases of 10.6% and 6.9%, respectively. Human Services and K-12 Education account for 54.1% and 27.0% of the biennial total. State-source GRF appropriations total $21.11 billion in FY 2014 and $21.63 billion in FY 2015, increases of 5.4% and 2.5%, respectively. K-12 Education and Human Services represent 39.9% and 32.1% of the state-source GRF biennial total. Across all funds, the appropriations total $59.63 billion in FY 2014 and $62.56 billion in FY 2015, increases of 6.2% and 4.9%, respectively. Medicaid and Other Human Services Across all funds in six agencies, Medicaid funding totals $22.35 billion in FY 2014 and $24.50 billion in FY 2015, increases of $2.58 billion and $2.15 billion, respectively. The majority of the Medicaid budget is funded by the state and federal GRF appropriations – $15.05 billion in FY 2014 and $16.77 billion in FY 2015. The state share of the GRF is $5.63 billion in FY 2014 and $5.78 billion in FY 2015. The budget extends Medicaid eligibility to adult Ohioans with income up to 138% of the federal poverty level and assumes that a net of about 275,000 “newly eligible” Ohioans will enroll in Medicaid by June 2015. Pursuant to the federal Affordable Care Act (ACA), the federal government will pay 100% of the costs of those newly eligible in the next biennium; these costs are estimated to total $2.6 billion. Due to an ACA requirement, the budget includes $320.9 million in FY 2014 and $261.9 million in FY 2015 of GRF Medicaid appropriation to pay certain primary care physicians at the higher Medicare rate. The federal government will reimburse 100% of the increased costs. The budget transitions the Office of Medical Assistance currently within the Department of Job and Family Services to the Department of Medicaid to lead and improve efficiency of Ohio Medicaid. The budget includes numerous cost avoidance initiatives and assumes that these initiatives will reduce Medicaid costs by $517.1 million in FY 2014 ($190.5 million state share) and $801.3 million in FY 2015 ($296.3 million state share). The budget includes $492.9 million ($181.6 million state share) in FY 2014 and $298.5 million ($110.4 million state share) in FY 2015 for an Integrated Care Delivery System to provide coordinated care for 114,000 individuals who are eligible for both Medicare and Medicaid. Enrollment is to begin in FY 2014. The budget formally merges the current two separate departments to form the new Department of Mental Health and Addiction Services to better serve individuals with mental illness and substance abuse disorders and to better support county boards of mental health and addiction services. The budget estimates that the Medicaid expansion will make about $70 million in existing county levy or state subsidy dollars available annually for county boards of mental health and addiction services to serve individuals who are not eligible for Medicaid. The budget provides $1.0 million per year in GRF funding for the Employment First Pilot Program to increase employment opportunities for Ohioans with disabilities. The pilot program will be jointly administered by the Department of Developmental Disabilities and the Opportunities for Ohioans with Disabilities Agency. K-12 Education The budget proposes a new school funding formula, which is summarized below. Total formula allocations for school district resident students are estimated at $6.24 billion in FY 2014 and $6.45 billion in FY 2015, increases of 6.0% and 3.4%, respectively. Core opportunity aid. This aid equalizes a district’s first 20-mill (2%) property tax levies to the $250,000 per pupil valuation level. That is, with the combination of state and local dollars, the formula guarantees $5,000 in per pupil core opportunity aid regardless of a district’s actual property wealth level. Targeted assistance. This provision equalizes additional millage up to the 80th percentile district’s wealth level, a measure that weighs each district’s property and income wealth equally. The additional equalized millage ranges from about 5 mills to almost 16 mills in FY 2014 and from about 6 mills to almost 18 mills in FY 2015, depending on each district’s wealth. Additional per pupil funding for students and schools with unique needs. Additional funding for students with disabilities and students with limited English proficiency is shared between the state and school districts. There is no local share for additional funding for economically disadvantaged students, gifted students, or early learning programs. Fifteen percent of the additional funding allocation for students with disabilities is pooled at the state level to fund exceptional cost reimbursement for special education services. Caps. The cap provisions limit a district’s total formula aid to the lesser of 25% of the prior year’s aid or 10% of the district’s total state and local operating resources in FY 2012. Guarantees. Notwithstanding the caps, the guarantee provisions ensure that all districts receive their core opportunity aid allocations and that the formula allocate at least the same amount of total formula aid for a district’s resident students as it allocated in the prior year.
Page 182 of 203 Appropriation Highlights
In addition to the main formula, the budget provides $375.8 million per year to help school districts transport regular students to and from school. It also provides $126.9 million per year for career-technical planning districts to provide career-technical education services. These two components were included in prior school funding formulas. The budget includes a similar new formula for joint vocational school districts. Total formula aid is estimated to amount to $209.6 million in FY 2014 and $214.4 million in FY 2015, increases of 10.2% and 2.3%, respectively. The budget provides $100.0 million in FY 2014 and $200.0 million in FY 2015 for a newly created competitive grant program, the Straight A Fund, for projects that aim to achieve significant advancement in student achievement, spending reduction, and utilization of a greater share of resources in the classroom. The budget expands the Ed Choice scholarship program beginning with the 2013-2014 school year, to qualify students with family incomes at or below 200% of the federal poverty guidelines, regardless of the academic rating of the district school they would otherwise attend. In the first year, kindergarten students are eligible and an additional grade is added to the eligibility in each subsequent year. The budget provides $8.5 million in FY 2014 and $17.0 million in FY 2015 from lottery profits to directly support the scholarship awards. The budget provides $510.0 million per year to school districts to maintain tangible personal property tax direct reimbursement at the FY 2013 level as provided under current law. The budget increases assessment funding by $20.0 million in FY 2015 for new assessments that will include both formative and summative assessments to better inform teachers and students of progress made over the course of the school year. It also provides $10.0 million in FY 2014 to connect schools to the state broadband network to support the online assessments, blended learning, and other mobile technology initiatives in schools. Higher Education The budget caps annual in-state undergraduate tuition increases at the greater of 2.0% or $188 for university main campuses, the greater of 2.0% or $114 for university regional campuses, and $100 for community and technical colleges. The state share of instruction (SSI) funding totals $1.78 billion in FY 2014 and $1.82 billion in FY 2015, an increase of approximately 1.9% per year. The budget increases the degree completion allocation of the university SSI formula from 20% in FY 2013 to 50% beginning in FY 2014. Beginning in FY 2015, there will be one formula for university main and regional campuses. At-risk weights will be applied at the student level instead of a general campus index. The current SSI formula for community and technical colleges is based primarily on enrollment. This will change to a formula based on success points and course completions; in FY 2014, these two factors will determine 50% of SSI funding. The budget provides $88.0 million per year for the Ohio College Opportunity Grant (OCOG), a need-based student financial aid program. The budget creates the OCOG Reserve Fund to carry over unexpended and unencumbered appropriations from the prior year. The budget requires colleges and universities to participate in College Credit Plus, a program that allows a student to earn credit toward a college degree while enrolled in high school. Institutions may count students in the program for purposes of SSI funding and receive up to 50% of their respective sector’s statewide average tuition per credit hour transferred from the state aid of the student’s educating school district or school. Other The budget provides $7.2 million in FY 2014 and $7.35 million in FY 2015 to a newly created GRF appropriation item in the Department of Natural Resources budget to help fund the agency’s regulatory responsibilities of oil and gas drilling activities in the state. Total GRF and non-GRF funding for the program amounts to $21.5 million in FY 2014 and $22.0 million in FY 2015, increases of 102.4% and 2.5%, respectively. The budget provides GRF and non-GRF funding totaling $10.1 million in FY 2014 and $10.2 million in FY 2015 for Ohio Shared Services (OSS), a division of the Office of Budget and Management. This funding represents increases of 3.3% and 0.9%, respectively. OSS provides various centralized back-office services to state agencies. The budget provides $155.4 million in FY 2014 and $159.3 million in FY 2015 for community correction programs, increases of 5.9% and 2.5%, respectively. It also authorizes transfers of $14.0 million per year from the Department of Rehabilitation and Correction’s (DRC) institutional operations appropriations to provide additional funding for community correction programs. Criminal sentencing reforms enacted in H.B. 86 of the 129th General Assembly are expected to reduce the size of the DRC inmate population by diverting low-level, nonviolent offenders from prison into community-based sanctions. The Local Government Fund (LGF) and Public Library Fund (PLF) shares of total GRF tax receipts are estimated at 1.69% and 1.67%, respectively, during the FY 2014-FY 2015 biennium. The budget appropriates $363.6 million in FY 2014 and $376.4 million in FY 2015 to the LGF and $359.3 million and $369.0 million, respectively, to the PLF. In FY 2013, LGF and PLF distributions are estimated to be about $348 million and $345 million, respectively. The budget provides $152.1 million in FY 2014 and $113.5 million in FY 2015 to reimburse local governments for the phase-out of the tangible personal property tax. Reimbursement stays at the TY 2013 level as provided under current law.
Page 183 of 203 Total (State and Federal) GRF Appropriations by Agency
FY 2012 FY 2013 FY 2014 FY 2015 Agency (Actual) (Estimate) (Appropriation) (Appropriation) K-12 Education Department of Education $7,483,874,446 $7,633,946,944 $8,031,983,496 $8,275,446,651 Ohio Facilities Construction Commission $120,581,098 $332,587,358 $387,408,251 $409,464,951 Ohio School for the Deaf $8,586,004 $8,727,657 $8,727,657 $8,727,657 Ohio State School for the Blind $6,830,765 $7,278,579 $7,278,579 $7,278,579 eTech Ohio $11,973,972 $12,253,394 $0 $0 Human Services Department of Medicaid $0 $0 $14,547,998,048 $16,259,120,217 Department of Job and Family Services $12,465,738,708 $12,926,640,150 $752,298,675 $752,298,675 Department of Developmental Disabilities $302,856,910 $513,656,934 $520,186,339 $525,937,865 Department of Mental Health and Addiction Services $485,048,359 $307,086,335 $315,711,367 $315,944,767 Department of Alcohol and Drug Addiction Services $36,693,724 $7,889,633 $0 $0 Department of Health $81,353,127 $85,720,926 $85,720,926 $85,720,926 Opportunities for Ohioans with Disabilities Agency $13,197,645 $13,211,069 $15,956,070 $15,956,070 Department of Aging $13,796,298 $14,547,425 $14,547,425 $14,547,425 Higher Education Board of Regents $2,182,688,385 $2,307,974,102 $2,322,959,052 $2,376,131,797 Corrections Department of Rehabilitation and Correction $1,436,683,121 $1,480,691,448 $1,487,839,928 $1,479,794,707 Department of Youth Services $223,870,015 $228,733,563 $231,048,263 $232,823,163 General Government Department of Taxation $700,500,143 $715,202,146 $737,886,530 $761,452,132 Public Works Commission $109,574,978 $237,868,400 $261,186,900 $263,396,600 Department of Administrative Services $108,848,690 $148,005,736 $158,052,951 $163,247,551 Judiciary/Supreme Court $130,237,558 $136,308,695 $141,602,706 $143,818,909 Development Services Agency $97,628,265 $117,789,745 $114,060,145 $135,126,145 Department of Natural Resources $74,270,168 $97,384,351 $105,180,489 $108,618,536 Attorney General $46,176,372 $44,203,589 $45,703,589 $45,703,589 Department of Veterans Services $31,978,657 $39,590,944 $37,021,444 $39,393,644 Treasurer of State $29,189,113 $29,318,459 $29,206,559 $29,206,559 Auditor of State $27,018,657 $28,234,452 $28,234,452 $28,234,452 Legislative Service Commission $19,017,892 $21,350,530 $21,500,530 $21,500,530 House of Representatives $16,924,338 $21,031,091 $21,031,091 $21,031,091 Department of Agriculture $13,942,419 $14,554,231 $15,254,231 $15,054,231 Ohio Public Defender Commission $5,596,494 $6,674,425 $14,430,966 $14,566,485 Senate $10,537,811 $11,947,822 $11,947,822 $11,947,822 Environmental Protection Agency $0 $0 $10,923,093 $10,923,093 Department of Public Safety $0 $0 $10,500,000 $10,500,000 Department of Transportation $10,333,856 $10,050,000 $10,050,000 $10,050,000 Ohio Arts Council $7,234,393 $9,605,704 $9,599,204 $9,599,204 Adjutant General $9,140,034 $9,359,648 $8,594,883 $8,594,883 Ohio Historical Society $8,512,091 $7,762,091 $7,871,521 $8,371,521 State Library Board $5,474,798 $5,764,270 $5,759,947 $5,759,947 Office of Budget and Management $2,312,014 $3,402,418 $4,741,675 $4,601,054 Ohio Civil Rights Commission $4,725,784 $4,725,784 $4,725,784 $4,725,784 State Employment Relations Board $3,573,718 $3,761,457 $3,761,457 $3,761,457 Capitol Square Review and Advisory Board $1,819,167 $1,801,408 $3,578,565 $3,578,565 Office of the Governor $2,738,191 $2,851,552 $2,851,552 $2,851,552 Court of Claims $2,969,680 $2,501,052 $2,501,052 $2,501,052 Secretary of State $2,143,989 $2,378,226 $2,378,226 $2,378,226 Veterans' Organizations $1,887,914 $1,887,986 $1,887,986 $1,887,986 Board of Tax Appeals $1,479,475 $1,700,000 $1,700,000 $1,700,000 Inspector General $764,364 $1,125,598 $1,650,598 $1,525,598 Commission on Minority Health $1,535,020 $1,580,637 $1,580,637 $1,580,637 Ethics Commission $1,305,222 $1,409,751 $1,409,751 $1,381,556 Judicial Conference of Ohio $799,939 $801,700 $824,900 $847,200 Joint Legislative Ethics Committee $531,535 $550,000 $550,000 $550,000 Environmental Review Appeals Commission $482,342 $545,530 $545,530 $545,530 Controlling Board $0 $475,000 $475,000 $475,000 Joint Committee on Agency Rule Review $347,097 $435,168 $455,858 $456,376 Ohio Elections Commission $335,461 $333,117 $333,117 $333,117 Commission on Hispanic/Latino Affairs $295,706 $324,922 $324,922 $324,922 Commission on Service and Volunteerism $129,915 $126,664 $286,661 $294,072 Expositions Commission $249,393 $1,250,000 $250,000 $250,000 Ohioana Library Association $120,000 $120,000 $135,000 $140,000 Air Quality Development Authority $47,491 $0 $0 $0 Legal Rights Service $175,326 $42,872 $0 $0 Ohio Cultural Facilities Commission $27,904,981 $28,563,636 $0 $0
Total (State and Federal) GRF $26,394,583,024 $27,655,646,324 $30,572,211,400 $32,661,980,058
Page 184 of 203
Helping Small Businesses Cutting Taxes, Strengthening the Workforce and Improving Infrastructure to Help Job Creators Small businesses are the drivers of our economy, making up roughly 98 percent of all Ohio businesses and employing half of our state’s private-sector workforce. Over the past two years, a lot has been done to help small businesses in Ohio – reinstating a $450 million income tax cut, saving taxpayers more than $300 million by eliminating the death tax, and cutting overly burdensome regulations are just a few examples. In the process, we’ve seen Ohio swing from 48th in job creation to one of the top job creators in the country and 1st in the Midwest. In order to keep our state moving forward, Ohio’s Jobs Budget 2.0 proposes several new reforms that will help small businesses continue to grow and create jobs. $1.9 Billion Small Business Tax Cut: Income taxes on virtually all Ohio small businesses will be cut in half. Personal income taxes paid by owners of small business will be reduced 50 percent on the first $750,000 of earnings. This dramatic tax cut frees significant amounts of new capital ($1.9 billion over three years) for small businesses to better leverage the expanding economic recovery and make new investments and increase hiring to improve their competitiveness. For example, a small business with $750,000 in annual net income would save approximately $20,000 through tax reductions under the Kasich plan. Reducing the Cost of Government: Treating every tax dollar as if it was his own, Gov. Kasich has regularly challenged his Administration to identify opportunities to reduce the cost and size of government. Reforms in the governor’s proposal will result in a $1.3 billion net tax cut for Ohioans over three years, largely achieved by making innovative reductions in spending and identifying opportunities for cost savings. Reining in the cost of government reduces the reliance on tax dollars, giving job creators more money to hire additional people and invest in their operations. Sales Tax Rate Cut: The state sales tax rate will be cut from 5.5 percent to 5.0 percent, saving Ohioans an estimated $2.4 billion over three years. Ohio’s strong consumer products companies and retailers will be positively impacted by this reduction as well, since Ohio consumers will see less of their money taken by government and more available for their purchases. Producing a Better Educated Workforce: A well-educated workforce is key to small-business success and Ohio’s ongoing economic recovery. Gov. Kasich’s budget builds upon the Administration’s efforts to improve education outcomes for those in both the K-12 and higher education systems, better preparing Ohioans for work opportunities and providing job creators with the talent they need to be successful. Children in grades K-12 will get the support they deserve to be successful, and funding for Ohio’s two- and four-year universities will be tied to degree completion rather than enrollment. These steps will keep the emphasis of our education system on outcomes rather than inputs, ultimately producing a stronger workforce. Improving Ohio’s Infrastructure without a Tax Increase: Ohio’s job creators depend on the ability to efficiently ship raw materials and goods throughout the state and across the country. We face a $1.6 billion deficit in our infrastructure budget. Under Gov. Kasich’s proposal, Ohio could access as much as $3 billion for major Ohio transportation projects through $1.5 billion in new bonds—issued by the Ohio Turnpike Commission and backed by future Turnpike revenues—and an additional $1.0 to $1.5 billion generated from matching local and federal funds.
Ohio’s Jobs Budget 2.0 | Helping Small Businesses 1
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While transportation projects in northern Ohio, including the Turnpike, will receive most of the new Turnpike funds, this plan frees up the Dept. of Transportation to spend the state’s gas tax and federal funds on highways downstate— allowing all projects to move forward faster and helping businesses throughout Ohio gain access to better roads, bridges, and rail systems. BOTTOM LINE: Cutting taxes, producing a well-educated workforce and fixing Ohio’s infrastructure without a tax increase will give job creators, especially small businesses, more opportunities to grow and create jobs across the state.
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Ohio’s Jobs Budget 2.0 | Helping Small Businesses 2
Page 186 of 203 Governor John R. Kasich JOBS Budget 2.0 Sales taxability of services
The following spreadsheet compares the taxability of services before and after Jobs Budget 2.0. The services listed here are services used in a 2007 survey on sales taxation of services among the states by the Federation of Tax Administrators (FTA) and additional services reflected in the North American Industry Classification System (NAICS) classifications. The spreadsheet is for illustrative purposes only. It does not constitute a legal opinion. Each statutory exemption has specific requirements that must be met in order to qualify for exemption. The cited statutory exemption applies only if the taxpayer meets all the requirements set forth in the referenced statute.
Legend E = Exempt from taxation Gray = Remains exempt from sales tax Blue = Service already subject to sales tax Before After Legislation Current law (R.C.) *Proposed law (R.C.) State Sales Tax Rate 5.50% 5.00%
Services currently subject to sales taxation
900 Number services (calls to 900 numbers) 5.50% 5.00% H.B. 298 (1991) 5739.01(B)(3)(i) 5739.01(X) Aircraft rental to individual pilots, long term (without operator) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Aircraft rental to individual pilots, short term (without operator) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Armored car services 5.50% 5.00% H.B. 298 (1991) 5739.01(B)(3)(h) 5739.01(X) Auto service 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(c) 5739.01(X) Automotive road service and towing services 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(s) 5739.01(X) Automotive storage 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(9) 5739.01(X) Automotive washing and waxing 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(c) 5739.01(X) Bulldozers, draglines and const. mach., long term (without operator) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Bulldozers, draglines and const. mach., short term (without operator) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Carpet and upholstery cleaning 5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(j) 5739.01(X) Cellular telephone services 5.50% 5.00% S.B. 143 (2002) 5739.01(B)(3)(f) 5739.01(X) Cold storage 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(9) 5739.01(X)
Page 187 of 203 Commercial linen supply (rental) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Custom fabrication labor 5.50% 5.00% H.B. 694 (1937) 5739.01(B)(5) 5739.01(B)(7) Data processing services (only if used in business) 5.50% 5.00% H.B. 291 (1983) 5739.01(B)(3)(e) 5739.01(X) Diaper service 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(d) 5739.01(X) Employment agencies 5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(l) 5739.01(X) Exterminating (includes termite services) 5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(m) 5739.01(X) Fur storage 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(9) 5739.01(X) Garment services (altering & repairing) 5.50% 5.00% 1935 5739.01(B)(3)(a) 5739.01(X) Health, recreation, sports clubs 5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(n)+(o) 5739.01(X) Heating oil (other than motor vehicle fuel) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Hotels, motels, lodging houses 5.50% 5.00% S.B. 376 (1959) 5739.01(B)(2) 5739.01(B)(2) Household goods storage 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(9) 5739.01(X) Information services (only if used in business) 5.50% 5.00% H.B. 291 (1983) 5739.01(B)(3)(e) 5739.01(X) Installation charges - other than seller of goods 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(b) 5739.01(X) Installation charges by persons selling property 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(b) 5739.01(X) Internet Service Providers-Dialup (only if used in business) 5.50% 5.00% H.B. 291 (1983) 5739.01(B)(3)(e) 5739.01(X) Internet Service Providers-DSL or other broadband (only if used in busine 5.50% 5.00% H.B. 291 (1983) 5739.01(B)(3)(e) 5739.01(X) Interstate telephone & communications (subject to sourcing rules) 5.50% 5.00% H.B. 171 (1987) 5739.01(B)(3)(f) 5739.01(X) Intrastate chartered flights (with pilot) 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(r) 5739.01(B)(5) Intrastate telephone & communications 5.50% 5.00% H.B. 171 (1987) 5739.01(B)(3)(f) 5739.01(X) Intrastate transportation of persons 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(r) 5739.01(X) Labor charges - repairs other tangible property 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(a) 5739.01(X) Labor charges - repairs to intrastate vessels 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(a) 5739.01(X) Labor charges on repairs delivered under warranty 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(a) 5739.01(X) Labor charges on repairs to motor vehicles 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(a) 5739.01(X) Labor on radio/TV repairs; other electronic equip. 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(a) 5739.01(X) Landscaping services (including lawn care) 5.50% 5.00% H.B. 298 (1991) 5739.01(B)(3)(g) 5739.01(X) Laundry and dry cleaning services, non-coin op 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(d) 5739.01(X) Limousine service (with driver) 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(r) 5739.01(B)(5) Long term automobile lease (without operator) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Mainframe computer access and processing serv. (only if used in business) 5.50% 5.00% H.B. 291 (1983) 5739.01(B)(3)(e) 5739.01(X) Maintenance and janitorial services 5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(j) 5739.01(X) Marina Service (dry docking, storage, cleaning, repair) 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(9) 5739.01(X) Massage services (without medical prescription) 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(q) 5739.01(X)
Page 188 of 203 Membership fees in private clubs 5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(o) 5739.01(X) Mini storage 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(9) 5739.01(X) Online data processing services (only if used in business) 5.50% 5.00% H.B. 291 (1983) 5739.01(B)(3)(e) 5739.01(X) Personal care services 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(q) 5739.01(X) Personal property, long term (generally) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Personal property, short term (generally) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Photo finishing 5.50% 5.00% S.B. 376 (1959) 5739.01(B)(4) 5739.01(X) Photocopying services 5.50% 5.00% S.B. 376 (1959) 5739.01(B)(4) 5739.01(X) Printing 5.50% 5.00% S.B. 376 (1959) 5739.01(B)(4) 5739.01(X) Private investigation (detective) services 5.50% 5.00% H.B. 298 (1991) 5739.01(B)(3)(h) 5739.01(X) Rental of hand tools to licensed contractors 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Rental of video tapes for home viewing 5.50% 5.00% 5739.01(B)(1) 5739.01(B)(1) Repair labor, generally 5.50% 5.00% H.B. 694 (1981) 5739.01(B)(3)(a) 5739.01(X) Repair material, generally 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Satellite TV & radio (direct to consumers) 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(p) 5739.01(X) Security services 5.50% 5.00% H.B. 298 (1991) 5739.01(B)(3)(h) 5739.01(X) Service contracts sold at the time of sale of TPP 5.50% 5.00% H.B. 298 (1991) 5739.01(B)(7) 5739.01(X) Shoe repair 5.50% 5.00% 1935 5739.01(B)(3)(a) 5739.01(X) Short term automobile rental (without operator) 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Sign construction and installation 5.50% 5.00% 1935 5739.01(B)(3)(b) 5739.01(X) Software - pre-written 5.50% 5.00% Administrative rule 5739.01(B)(1) 5739.01(B)(1) Software - pre-written & downloaded 5.50% 5.00% Case law 5739.01(B)(3)(e) 5739.01(X) Swimming pool cleaning & maintenance **5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(j) 5739.01(X) Tanning parlors 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(q) 5739.01(X) Taxi operations 5.50% 5.00% H.B. 95 (2003) 5739.01(B)(3)(r) 5739.01(B)(5) Taxidermy 5.50% 5.00% 1935 5739.01(B)(1) 5739.01(B)(1) Temporary help agencies 5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(k) 5739.01(X) Tire recapping and repairing 5.50% 5.00% 1935 5739.01(B)(3)(a) 5739.01(X) Window cleaning 5.50% 5.00% H.B. 904 (1993) 5739.01(B)(3)(j) 5739.01(X)
Services subject to exemptions including health and well-being Adult and child day care services EE 5739.01(X)(6) Carpentry, painting, plumbing and similar trades (real property) E E 5739.01(X)(3) Consumer lease/rental of consumer's primary residence EE 5739.01(X)(4)
Page 189 of 203 Custom meat slaughtering, cutting and wrapping E E 5739.01(B)(42)(n) Dentists E E 5739.01(X)(1) Electricity E E 5739.02(B)(7) Food storage E E Ohio Const. XII § 3 Funeral services E E 5739.01(X)(11) Interstate air courier (billed in-state) E E 5739.02(B)(10) Labor - repairs or remodeling of real property E E 5739.01(X)(3) Labor - repairs to commercial fishing vessels E E 5739.02(B)(42)(d) Labor charges - repairs to interstate vessels E E 5739.01(B)(10) Labor charges on repair of aircraft E E 5739.02(B)(49) Labor charges on repairs to railroad rolling stock E E 5739.02(B)(14) Local transit (intra-city) buses E E 5739.01(B)(3)(r) 5739.01(B)(5) Medical and health care services EE 5739.01(X)(1) Medical test laboratories E E 5739.01(X)(1) Metal, non-metal and coal mining services EE 5739.01(X)(8) Natural gas (sold by public utility) E E 5739.02(B)(7) Nursing services out-of-hospital E E 5739.01(X)(1) Oil field services EE 5739.01(X)(8) Personal instruction (dance, golf, tennis, etc.) E E 5739.01(X)(2) Physicians E E 5739.01(X)(1) Preschool through twelve, post-secondary, and tutoring EE 5739.01(X)(2) Radio & television, national advertising E E 5739.02(B)(10) Real property construction services E E 5739.01(X)(3) Residential trash pick-up and disposal EE 5739.01(X)(9) Seismograph & geophysical services EE 5739.01(X)(8) Services used directly in producing oil and gas EE 5739.01(X)(8) Social assistance services EE 5739.01(X)(7) Soil prep., custom baling, other ag. services E E 5739.02(B)(42)(n) 5739.02(B)(42)(n) Transactions by which consumer obtains insurance E E 5739.01(X)(5) Typesetting & platemaking for the print trade EE 5739.02(B)(42)(f) 5739.02(B)(42)(f) Veterinary services (livestock) E E 5739.02(B)(42)(n) 5739.02(B)(42)(n) Water (including sewer) E E 5739.02(B)(7) Water well drilling (real property) EE 5739.01(X)(3)
Page 190 of 203 Services added as taxable services
Accounting and bookkeeping E 5.00% 5739.01(X) Admission to cultural events E 5.00% 5739.01(X) Admission to professional sports events E 5.00% 5739.01(X) Admission to school and college sports events E ***5.00% 5739.01(X) Advertising agency fees (other than ad placement) E 5.00% 5739.01(X) Amusement park admission & rides E 5.00% 5739.01(X) Architectural, engineering, and related services E 5.00% 5739.01(X) Attorneys E 5.00% 5739.01(X) Bail bond fees E 5.00% 5739.01(X) Billiard parlors E 5.00% 5739.01(X) Books - downloaded E 5.00% 5739.01(B)(6) Bowling alleys E 5.00% 5739.01(X) Cable TV services E 5.00% 5739.01(X) Call center E 5.00% 5739.01(X) Check & debt collection E 5.00% 5739.01(X) Circuses and fairs -- admission and games E 5.00% 5739.01(X) Coin operated video games E 5.00% 5739.01(X) Commercial art and graphic design E 5.00% 5739.01(X) Credit information, credit bureaus E 5.00% 5739.01(X) Credit rating svc E 5.00% 5739.01(X) Cutting, coloring, styling of hair E 5.00% 5739.01(X) Data mining services E 5.00% 5739.01(X) Dating services E 5.00% 5739.01(X) Debt counseling E 5.00% 5739.01(X) Fishing and hunting guide services E 5.00% 5739.01(X) Horse boarding and training E 5.00% 5739.01(X) Insurance services (insurance policy purchases remain exempt under 5739.01(X)(5)) E 5.00% 5739.01(X) Interior design and decorating E 5.00% 5739.01(X) Intrastate courier service E 5.00% 5739.01(X) Investment counseling E 5.00% 5739.01(X) Land surveying E 5.00% 5739.01(X) Laundry and dry cleaning services, coin-op E 5.00% 5739.01(X)
Page 191 of 203 Legal services E 5.00% 5739.01(X) Loan broker fees E 5.00% 5739.01(X) Lobbying and consulting E 5.00% 5739.01(X) Magazine subscriptions E 5.00% 5739.01(X) Mailbox rentals E 5.00% 5739.01(X) Mailroom services E 5.00% 5739.01(X) Marine towing service (incl. tugboats) E 5.00% 5739.01(X) Marketing E 5.00% 5739.01(X) Movies/digital Video - downloaded E 5.00% 5739.01(B)(6) Music - downloaded E 5.00% 5739.01(B)(6) Other electronic goods - downloaded E 5.00% 5739.01(B)(6) Packing and crating E 5.00% 5739.01(X) Pari-mutuel racing events. E 5.00% 5739.01(X) Parking lots & garages E 5.00% 5739.01(X) Pet grooming E 5.00% 5739.01(X) Pinball and other mechanical amusements E 5.00% 5739.01(X) Process server fees E 5.00% 5739.01(X) Property sales agents (real estate or personal) E 5.00% 5739.01(X) Public relations, management consulting E 5.00% 5739.01(X) Real estate management fees (rental agents) E 5.00% 5739.01(X) Real estate title abstract services E 5.00% 5739.01(X) Refuse collection (industrial) E 5.00% 5739.01(X) Rental of films and tapes by theaters E 5.00% 5739.01(X) Sales of advertising time or space: Billboards E 5.00% 5739.01(X) Magazine E 5.00% 5739.01(X) Newspaper E 5.00% 5739.01(X) Radio & television, local advertising E 5.00% 5739.01(X) Secretarial and court reporting services (excludes temporary hiring) E 5.00% 5739.01(X) Service charges of banking institutions E 5.00% 5739.01(X) Software - custom programs - programming E 5.00% 5739.01(X) Software - modifications to pre-written programs E 5.00% 5739.01(X) Sound recording E 5.00% 5739.01(X) Stenographic services E 5.00% 5739.01(X)
Page 192 of 203 Tax return preparation E 5.00% 5739.01(X) Telemarketing services on contract E 5.00% 5739.01(X) Telephone answering service E 5.00% 5739.01(X) Test laboratories (excluding medical) E 5.00% 5739.01(X) Tickertape reporting (financial reporting) E 5.00% 5739.01(X) Trailer parks - overnight E 5.00% 5739.01(X) Travel agent services E 5.00% 5739.01(X) *Sales tax is imposed on services under proposed R.C. 5739.01(B)(3) and proposed R.C. 5739.01(X) defines "service." **Indoor swimming pool cleaning and maintenance is currently taxable. ***R.C. 5739.02(B)(9)(a) + (b) concerns exemptions for sales of certain services by churches, charities, and school organizations that will continue under proposed law.
Corrected and Reformatted: February 13, 2013
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Personal Income Tax Provisions of H.B. 59 Mark A. Engel Bricker & Eckler LLP As part of his budget proposal for the next two years, Governor Kasich proposes two significant changes to the personal income tax law. In H.B. 59, one proposal reduces all tax rates 20% over three years; the other provides a deduction of up to $375,000 to the owners of a pass-through entity. Other minor changes are also proposed. Here’s how those proposals work.
Reduction in Income Tax Rates:
Beginning with tax year 2013, the bill proposes to reduce all personal income tax rates by a total of 20% over three years. For taxable years beginning in 2013, tax rates will be reduced 7.5%. For taxable years beginning in 2014, rates will be reduced an additional 7.5%. For taxable years beginning in 2015 and later, rates would be reduced another 5%. The reductions apply to all tax brackets. When the reduction is fully implemented, the top marginal rate on incomes above $200,000 would be reduced from 5.925% to 4.74%.
Deduction for Income from Pass-Through Entity:
The bill also provides a deduction of one-half of a taxpayer’s “Ohio small business investor income.” “Ohio small business investor income” means the portion of a taxpayer’s adjusted gross income that is reduced by deductions from business income and allocated and apportioned to Ohio. It applies to the business income of the owners of pass-through entities and sole proprietors. The deduction is capped at $375,000 per owner; if the individual owner is married and the spouses file separate returns, each spouse is entitled to a deduction for one-half of the income, up to $187,500 each.
For example, if a pass-through entity has net income of $1,500,000 for the year and has three equal owners, each owner would be entitled to a deduction of one-half of their share of the net income, or $250,000. If the same entity had only two equal owners, each owner would be entitled to the maximum deduction of $375,000.
There is no limit to the number of owners who may claim the deduction; the only limitation is the deduction that each individual owner may claim. Nor is there any requirement that the business take any particular actions, such as investing in equipment or creating jobs. This deduction is made in computing Ohio taxable income. This means the deduction is taken before the tax is calculated and is in addition to the 20% reduction in rates discussed in the previous section.
Other Revisions:
Several other revisions are proposed. Under current law, an individual may be claimed as a dependent of another for purposes of the dependent exemption and credit, and may also claim him or herself as a dependent for both purposes on the individual’s own tax return. The bill eliminates that situation by specifying that if the individual is claimed on the return of another person, the individual may not claim the exemption or the credit on the individual’s own return.
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Under existing law, a pass-through entity may elect to file a tax return on behalf of all investors and to pay the tax on behalf of the investors. However, the tax commissioner has the authority to require such an investor to file individual returns and to pay the tax indicated on that return. However, taxpayers do not have a similar option to file a separate return. The bill proposes to expressly permit taxpayers to make that same election.
Under current law, interest is allowed on refunds that result from an illegal or erroneous assessment from the date of the illegal or erroneous payment; however, with respect to refunds resulting from the filing of a return or report, interest begins to accrue 90 days after the final due date of the report or return. This difference is eliminated and in all cases, interest runs from the date of the over-payment.
The bill proposes to require that a request to deviate from the statutory allocation and apportionment provisions must be made in writing with a timely-filed return or timely-filed amended return. Under current law, there is no requirement that either the return or the amended return be filed in a timely fashion.
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Expansion of the Ohio sales tax to services: Implications Mark A. Engel Bricker & Eckler LLP
One of the more wide-ranging aspects of the tax measures included in the Governor’s budget, H.B. 59, is the extension of the sales tax to virtually all services and to transfers of rights in intangible property, such as patents and copyrights. The Ohio tax rate will be reduced from 5.5% to 5%, and local rates will be reduced in order to prevent a windfall with the expansion of the tax base. This represents a seismic shift in the taxation of services in Ohio, as under current law, services are generally exempt from sales tax unless they are specifically made subject to the tax. Under the proposal, all services will be subject to tax unless they are specifically exempted from the tax. This change may have some profound implications for businesses in Ohio.
Expansion of the Tax Base
The definition of a “sale” is expanded to include all transactions by which a service is, or is to be, provided. The term “service” means any act performed for another person for any type of consideration. Thus, virtually any activity for which a fee is paid will become subject to sales tax.
The bill specifically excludes from the tax a few services, most notably services rendered by employees to employers. However, all other services will be taxable. This includes services such as financial consulting, marketing, debt collection, legal and accounting, real estate and insurance brokering, and all other services for which any payment is made. Although not specifically addressed, the exclusion of residential rental transactions implies that commercial real estate rental transactions will also be subject to tax.
In addition to services, the bill also expands the sales tax to transactions involving digital goods and the licensing of intangible property. For example, electronic downloads of video clips, sound recordings, and written materials will fall within the tax. In addition, payments for the right to use patents, copyrights, trademarks and other intellectual property and rights will also be taxed.
New Taxes on Services Used in Business
Under current law, transfers of tangible personal property and the selected services that are subject to tax are not taxed if they are acquired for the purpose of being resold. For example, a wholesaler does not pay sales tax on tangible products that it is going to sell to a retailer. However, under the bill, the definition of a “consumer” is revised so that a person who provides a service that is subject to the tax is deemed the consumer of all tangible property and all services purchased or consumed in the course of providing that service, and the resale exemption is specifically made inapplicable to those persons. This specific provision appears to negate the application of the more general resale provision. That means, for example, that a business that performs facilities management services not only will charge sales tax on the entire cost of its services to its customer, but it will also pay sales tax on all property and services that it acquires in order to perform the agreement.
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In addition, a number of tangible business inputs are excluded from the tax for a person selling tangible items that are subject to the tax. For example, manufacturers may acquire various tangible items used in the manufacturing activity without the payment of sales tax. However, this provision is limited to the acquisition of “things” or property and, with the exception of the existing exemption for repair services to manufacturing equipment is not amended to exclude the acquisition of services used in these activities.
As a result, a manufacturer that licenses a patent for use in its manufacturing operation will now pay tax on the payments made for the use of the patent. Legal or financing services incurred to acquire a piece of manufacturing equipment will be subject to the tax. A manufacturer that contracts with a third party to perform testing services on raw materials, on in-process materials, or on finished goods will now pay sales tax on those services. In addition, “intangible property” includes investment vehicles, such as cash, stocks, or mutual funds. Transactions by which a manufacturer manages its cash functions will also be subject to the tax.
These provisions mean that transparency is lost as the tax pyramids on intermediate transactions.
Related Parties
Under the current law, there is an exclusion from the tax for certain taxable services, such as electronic information services and employment services that are provided to other members within a related group. This language is stricken from the bill, making these and other service transactions between the members of a related group subject to the tax. Thus, the members of a family of businesses that use a common services center to provide payroll, accounting, legal, or other centralized services, will all have to pay sales tax on those transactions within the group if there is any sort of cost allocation or charge-back. Similarly, if intangible property is owned by one member of a related group and licensed to other members of the group, those transactions will be subject to the tax.
For example, a group of business entities with common ownership has one member that provides employment, payroll, information technology, accounting, collection, and other services to the other members of the group, the cost of which is allocated to the other members. Or, the group may lodge all of its intangible property, such as trademarks and copyrights, within a single member that licenses the use of the intangible property to the other members of the group. These services will now be taxable.
Location of the Sale
In addition to statewide sales tax, counties and transit authorities may also impose local sales tax at various rates. Therefore, it becomes important to determine where a sale takes place for both state and local tax purposes so that the correct tax can be collected and paid.
Under existing law, there are some general guidelines as to where a sale takes place: As a general rule, the sale is taxed at the location where the tangible property is located, or where the benefit of the service is received. Under the existing law, this rule, although inexact, generally works. However, with the inclusion of nearly all services and intangibles within the tax base, it will become more and more difficult to determine where a sale takes place and the correct tax, if any, to apply to the transaction. For example, a corporation with its headquarters in Ohio and
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locations inside and outside Ohio retains a regional accounting firm, with locations inside and outside Ohio, to prepare its annual audit statement and materials for filings with federal regulatory agencies in Washington, D.C. Or, a business with facilities in several locations in Ohio retains a national accrediting firm as it seeks financing to acquire additional assets or locations. It will be difficult to determine how much, if any, of the benefit of those services is received in Ohio, or in the various counties.
With respect to intangibles, there are no situsing provisions included in the existing law, or in the bill. The common law rule is that intangibles are used at the domicile of the owner of the property. Under the commercial activity tax, receipts from intangibles are located at the location at which the licensee uses the intangible property. It is possible that the benefit of the use of intangible property could be at the domicile of the owner of the property; it could be at the principle place of business of the licensee; or it could be at the location (or locations) where the intangible property is used.
Responsibilities
If the bill becomes law, persons who provide services will have to register as vendors and will be required to charge and collect tax from their customers and pay the tax to the state. Consumers who are not charged the tax by their vendors will be required to register and to self-pay the tax directly to the state. Compliance will become more difficult and will require additional resources.
The bill also contains language providing that, if an entity fails for any reason to pay its tax liability, the partners in a partnership or the officer or shareholders of a corporation that is “tax- canceled” will be personally liable for the unpaid tax.
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Bill to Amend Municipal Income Tax Law Reintroduced Mark A. Engel, Bricker & Eckler LLP
Last year, a bill was introduced in the Ohio General Assembly to revise Ohio law regarding municipal income taxation. Although several hearings were held, the bill died in Committee. A new bill, H.B. 5, has been introduced during the current session. Like its predecessor, the bill proposes several changes to existing R.C. Chapter 718, which governs the imposition of income taxes by municipalities. The bill is an effort to reach additional consistency and uniformity among communities that impose an income tax. The bill, the culmination of several months of discussions between business and municipal stakeholders, proposes some significant changes in existing law. Many of these changes are modeled on existing state law relating to the state personal income tax. This memorandum addresses a number of those changes as reflected in the bill as introduced.
Net Operating Loss: Under current law, each municipality decides whether to recognize net operating losses (NOLs), and how long to permit them to carry forward. Under the bill, beginning with taxable years beginning after 2014 R.C. 718.01(E)(8) and (9) authorize unused net operating losses to be carried forward up to 5 years. The provision is phased in over 5 years in 20 percent increments, beginning with taxable years beginning after 2015. NOLs under existing laws must be used prior to NOLs incurred beginning in 2015 and must be used prior to NOLs incurred after 2014. NOLs may not be used to offset qualifying wages.
Income apportionment: Current law provides for the apportionment of business income according to a three-factor formula that considers property, payroll, and sales, and provides rules for determining when those items are within or without the municipality in question. Language does permit variation from this formula, but it is vague and its application varies from city to city. Under the bill, R.C. 718.02 is amended to provide more specific guidance regarding when and how a taxpayer, or the tax administrator, may request or require deviation from the standard three-factor apportionment formula. An alternative apportionment formula may be claimed on an original return, or by the filing of an amended return or a petition to contest an assessment. An election by a taxpayer to use separate accounting must be allowed if the taxpayer uses separate accounting in all municipalities in which it is subject to tax. The bill also changes the measure of the sales factor to mirror state income tax law, basing the location of receipts on the location where the customer receives the goods or services in question. The existing rule that “throws back” sales to the city of shipment if the taxpayer did not solicit the sales at the customer’s place of business is eliminated.
Pass-Through Entities: Under current law, municipalities may elect to tax pass-through entities (“PTEs”) and their owners either at the entity level, or at the individual level. Under the bill, for tax years beginning on and after January 1, 2015, R.C. 718.01(L)(1) provides that except as provided in R.C. 718.43, the term “taxpayer” excludes PTEs, resulting in taxation at the individual owner level. Trusts, estates, and grantor trusts are not included in the definition of a PTE. Under R.C. 718.43, the law requires PTEs to collect and remit the tax with respect to share of net income, whether or not distributed, of all owners. Any tax that is paid by the entity on behalf of its owners is treated as tax paid by the owners for all purposes. If the PTI is the only source of income in a municipality for an owner, the owner shall not be required to file a return or to pay any additional tax in the municipality. The PTE is required to make estimated
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payments of the tax by the 15th day of April, June and September of the current year, and by January 15 of the following year. R.C. 718.01(L)(2) provides that a single-member LLC that is a disregarded entity may be taxed as an entity separate from its single member under certain limited circumstances.
Consolidated Returns: Under current law, each municipality may determine whether to permit taxpayers to file consolidated returns and the terms under which such election may be made. Under the bill, R.C. 718.06 provides that beginning with taxable years beginning on or after January 1, 2015, a taxpayer that is a member of an affiliated group of corporations may elect to file a consolidated return if at least one member of the affiliated group is subject to municipal taxation and the group filed a consolidated return for federal income tax purposes for that taxable year. All members of the consolidated group must be included in the return, and all members are jointly and severally liable for any tax that is owed. Furthermore, once consolidated status is elected, the taxpayer must continue to file in that manner until written permission to file individually is obtained from the municipality.
If 80% or more of the net profit or loss of a PTE is included in the federal taxable income of a consolidated group, then the PTE need not collect and pay the tax imposed by R.C. 718.43 to the extent the income is included in the net profit of the consolidated group, and the apportionment factors for the PTE must be included in those for the consolidated group. If less than 80% of the net profit or loss of the PTE is included in the federal taxable income of the consolidated group, then the PTE must collect and remit the tax on behalf of its members or owners and its apportionment factors are excluded from those of the consolidated group.
Residency: Under current law, each municipality is free to determine whether a taxpayer is domiciled within the city, regardless of whether the individual is domiciled in Ohio for Ohio personal income tax purposes. Under the bill, R.C. 718.01(J) provides that “resident” means an individual who is both domiciled in Ohio for purposes of the personal income tax, and within the municipality.
Transient Taxpayers: Under existing law, other than a professional athlete or entertainer, an individual may perform services within a municipality for up to 12 days before the individual’s employer is required to withhold tax for that municipality. There is no guidance as to what constitutes a day for these purposes. R.C. 718.011 is amended to extend that threshold to 20 days. Moreover, an employee is considered to have spent a day providing services within a municipality only if the individual spends more time during the day in that municipality than in any other; there are special rules relating to how travel time during the day is considered. If an employee is based in a municipality that imposes a tax, the 20-day safe harbor applies only if tax is withheld on behalf of the municipality in which the employee is based. An employer must begin to withhold tax on the 21st day that an employee spends in a municipality that imposes a tax, but there is no requirement to go back to withhold for the prior 20 days.
Minimum Payments: Under the bill, several provisions are revised regarding minimum amounts. For taxable years beginning after 2014, R.C. 718.05(G) provides that no return needs to be filed, and no tax is due, with respect to net profits if (i) the average apportionment ratio for the year is less than 1%; (ii) but for this provision the taxpayer would owe less than $50; and (iii) the total amount of qualifying wages paid to employees for services performed within the
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municipality during the taxable year is less than $50,000. R.C. 718.19 provides that no refund needs to be issued, and no interest on a refund needs to be paid, if the amount of the refund is less than $5. New R.C. 718.41 provides that if the additional amount due as a result of a federal RAR adjustment is $5 or less, no amended return or additional tax payment is owed to the municipality.
Winnings from Casinos and Video Lottery Terminals: New R.C. 718.031 provides that if a person’s winning at a casino facility or video lottery terminal trigger reporting requirements for federal income tax purposes, then the casino operator or video lottery terminal agent shall withhold tax on the winnings for the municipality in which the facility is located. All amounts withheld must be reported and paid to the municipality by the 10th day of the following month. Annual reports to both the municipality and winners from whom amounts are withheld are also required.
Audit and Assessment Provisions: Under current law, there is no consistent period for assessment or refund purposes. Under the bill, R.C. 718.12(B) provides for a 3-year statute of limitations for assessments, and R.C. 718.19 provides for a similar statute for refund claims. R.C. 718.12 also provides an absolute limitation of 10 years for any assessment not covered by the 3-year statute, and provides for various safeguards and procedures to protest the assessment, similar to those found in state law. Uniform penalty and interest provisions are set forth in R.C. 718.27.
Under current law, assessment appeal procedures are largely undefined. Under the bill, R.C. 718.11 provides for the issuance of written assessments; appeals to the local board of review within 60 days of receipt of an assessment; a hearing before the local board of review within 45 days and representation by an attorney or other representative; and a written decision that must be issued within 90 days of the hearing and can be appealed to the state board of tax appeals.
Modeled on existing state law, the bill contains provisions regarding a taxpayer bill of rights (R.C. 718.12(D), 718.36); for a problem resolution officer for larger cities (R.C. 718.37); for formal tax opinions (R.C. 718.38); and for taxpayer suits for violation of various provisions (R.C. 718.39). There is also a provision for adjustments associated with federal or state income tax audits that result in changes to items of income or expense, with the requirement of an amended return to reflect the changes, in R.C. 718.41. In a novel twist, R.C. 718.44 provides that the prevailing party in any assessment and appeal may recover attorney fees and litigation expenses from the other party. In the case of a case where neither side is completely victorious, fees and expenses are to be equitably divided.
Powers & Duties: Under current law, the authority and duties of tax administrators are virtually undefined. Under the bill, R.C. 718.30 provides express authority to promulgate rules of procedure; R.C. 718. 31 provides authority to inspect records; R.C. 718.23 provides for authority to issue subpoenas; R.C. 718.24 provides a laundry list of powers and duties similar to those found in existing law for the state tax commissioner; and R.C. 718.20 authorizes the issuance of jeopardy assessments in specified cases.
Municipal Tax Policy Board: Under the bill, R.C. 718.42 calls for the formation of a municipal tax policy board. The membership of the board consists of seven representatives of
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municipalities of varying sizes, each appointed by the governor for a term of three years. The board may adopt rules regarding the administration of municipal income tax laws that are binding upon all municipalities imposing a tax; may designate working committees; promulgate common forms, reports, schedules and attachments; forms for signature and declarations by taxpayers; and provide instruction booklets. The board is required to meet at least quarterly.
Implementation: Under the bill, R.C. 718.04 provides that in the case of a tax that is first imposed after January 1, 2015, the ordinance or resolution levying the tax must include certain language, including that the tax is being levied in accordance with the limitations specified, and incorporates by reference the provisions of, R.C. Chapter 718. In the case of municipality that currently imposes a tax, before January 1, 2015, the municipality must either repeal the tax; or amend the existing law to include the provisions required of a new tax, including the references to R.C. Chapter 718. If a municipality that currently levies a tax fails to take either action by January 1, 2015, its tax is repealed by operation of law. Other provisions relating to the imposition of a tax, including the rate, any credit provision, and voter approval for rates in excess of one percent, remain similar to existing law.
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TAKE ACTION NOW!
Manufacturers who support reforming the municipal income tax should immediately contact their state representatives and senators. Legislators are being pressured by municipalities that oppose the bill. They need to hear about the positive effect the proposal will have on your company.
You can find your legislator on the OMA website at: https://www.bipac.net/lookup.asp?g=oma&parent=ohio
Please copy Rob Brundrett ([email protected]) on any correspondence. Rob manages OMA’s Tax Committee and will head up OMA tax advocacy in the General Assembly.
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