Table of Contents Page # Government Agenda 2 Affairs Public Policy “Hot Topics” 3 Leadership News Articles 5 Committee Legislation Tracker 12 November 13, 2013 Counsel’s Report 20
Energy Policy Report 30 • SB 58 PowerPoint 40 • SB 58 Fact Sheet 68 • SB 58 Talking Points 71 • Akron Beacon Journal Editorial 72 • MGP Letter 74
Environment Policy Report 75 • Bell Case 82 • OMA Beneficial Use Comments 83
Human Resources Policy Report 87
Safety & Workers’ Compensation Report 98 • Silica Information 108
Tax Policy Report 112 • OMA Tax Reform Documents 126 • House Bill 5 Features 134 • OMA Advocacy Letters 137
2014 Government Affairs OMA Government Affairs Committee Meeting Sponsor: Committee Calendar Meetings will begin at 9:30 a.m.
Wednesday, Feb. 26, 2014 Wednesday, May 28, 2014 Wednesday, Aug. 20, 2014 Wednesday, Dec. 3, 2014
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OMA Government Affairs Committee November 13, 2013
AGENDA
Welcome & Self-Introductions Jeff Fritz of DuPont, OMA Committee Chair
Federal Minute: Amber Best of NewPage Corp., Regional Vice Chair NAM Ohio Brief Report on National Issues Region by National Partners
OMA Counsel’s Report Kurtis Tunnell, Managing Partner, Bricker & Eckler, LLP
Staff Reports Ryan Augsburger, OMA Staff Rob Brundrett, OMA Staff Committee Members
Special Guest: State Representative Matt Huffman, House Speaker Pro-Tem
Discussion / Action Agenda Member Discussion Encouraged Throughout Meeting
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:
Page 2 of 142 Public Policy “Hot Topics” November 13, 2013
Overview Since returning to Columbus after Labor Day, lawmakers have been in session and holding committee hearings. Medicaid expansion, election reforms, municipal income tax uniformity and a revision to Ohio alternative energy standards have topped the agenda. Soon the holiday recess will arrive and the focus will shift to mid-biennium reviews (MBRs) and a capital budget bill to follow in early 2014. The OMA staff focus has been directed on energy and tax policy.
SB 58 Alternative Energy Standards In late September, Senator Bill Seitz unveiled a substitute version of his bill to revise existing Ohio alternative energy standards. The standards apply to utility companies and require they achieve a specified amount of electricity from: 1) renewable sources; 2) customer energy efficiency, and 3) advanced energy. Following review and analysis of the bill for impact on the manufacturing sector, the OMA has been communicating strong opposition to the bill. The bill benefits utilities and denies customers of short-term and long-term term benefits of energy efficiency. Senator Seitz intends to move his bill before the end of the year. See OMA toolkit to learn more and take action.
Manufactured Gas Plants (MGP) Remediation Even as state leaders have stepped Ohio away from rates set via regulation, a law change was included in the budget that would have added costs to manufacturers’ energy bills (gas and electric). The budget language was line-item vetoed by Governor Kasich due to a drafting error, signaling a willingness to expand the parameters of some cost-recovery for obsolete utility assets. A work group of the OMA government affairs committee convened over five times since August 22 to study the proposal, and advocate against any incursion against a utility law that has protected consumers from being subjected to such charges in utility bills.
Medicaid Expansion In the state budget bill, HB 59, Governor Kasich proposed to expand Medicaid coverage using federal funds. His proposal was rejected by the General Assembly. In October, the Governor won approval of an administrative proposal to authorize expansion. Self-described “TEA party” Republicans were outspoken critics, calling the move an end-around.
Workers’ Comp & Industrial Commission The BWC is moving to prospective premium billing. The first 6 months of the new billing period will be paid by the BWC using surplus funds. Employers who get coverage from the state fund will soon begin seeing the billing statements. This follows dividends paid to employers over the summer.
Tax Policy House Bill 5, the municipal income tax uniformity bill appears ready for a House floor vote. In October a substitute version of the bill was accepted by the House Ways and Means Committee. The substitute bill was a product of intense negotiations between lawmakers, the business community and local governments. While cities still oppose the bill, mainly due to its Net Operating Loss provisions, passage from the House appears likely.
A slew of CAT attack bills have been introduced since the beginning of the year. These include CAT credits and deductions for a variety of things including food donations, hiring new employees and contributing to an economic development project. While some of these ideas
Page 3 of 142 may have good intentions driving them, the concern is that any deduction or credit puts strain on the low rate. Increased pressure on the rate may entice legislators to raise that rate.
AirBag Fraud The OMA joined with auto sector leaders in expressing support for legislation to stiffen the penalties on airbag fraud. The legislation stems from repeat safety problems resulting from unlicensed, counterfeit airbag products and technology, most often aftermarket- installed. Passage is expected in the Senate before the end of the year.
Civil Justice HB 238 (Rep. Jim Butler, R-Dayton) was introduced this summer to require public disclosure of most large contingency-fee contracts between government and personal injury attorneys. Known as the Transparency in Private Attorney Contracting (TiPAC) legislation is intended to address concerns about the propriety of contingency-fee arrangements for the prosecution of public claims. The OMA strongly supports the concept and will be advocating passage.
Elections The 2013 general election was clear of ballot issues but the 2014 election may be crowded and extra politically charged due to the statewide executive elections. Governor Kasich will face a challenge by Ed Fitzgerald, Cuyahoga County Executive. Other incumbent Republican statewide officeholders will face challengers. 2014 also marks term limits for House Speaker William G. Batchelder. In the contest to succeed him, veteran Representative Ron Amstutz appears to face challenge from Representative Cliff Rosenberger. OMA election services will compile and election guide and track campaigns in 2014.
Environment The House Bill 592 solid waste rewrite appears to have stalled in phase two. Ohio EPA was hoping to have introduced legislation by now, but the agency has moved back its timetable on legislative introduction.
Ohio EPA’s push for a comprehensive beneficial use program has also gone quiet. The agency promised draft permits by August or September and interested parties are still waiting to see what those permits might look like. The Director initially wanted to see rules ready by the end of the year but that timeframe no longer seems feasible.
Page 4 of 142 Leadership
NAM Offers 2013 Trade Toolkit (video) sufficiently similar to permit this under Ohio Evidence Rule 804(B). To help manufacturers communicate to employees, suppliers and within their communities about the The OMA filed an amicus brief in support of H.J. importance of global trade to U.S. manufacturing Heinz Co. because manufacturers are regularly prosperity, the National Association of Manufacturers forced to defend against testimony developed in a NAM) has developed an extensive tool kit. prior proceeding when neither they, nor their predecessors in interest, were parties in that proceeding. Elements available include a new 2-minute video and an online Trade Toolkit with sample letter to the editor, sample company newsletter, printable poster, This is unfair and is precisely the kind of hearsay and more. evidence that is precluded by the Ohio Rules of Evidence. And NAM urges all of us to use these advocacy resources to communicate with our Ohio Anne Marie Sferra, OMA counsel from Bricker & congressional delegation over the summer Eckler LLP, summarizes the case. 8/15/2013 recess. 8/15/2013 Ohio Steel Council Announces Officers OMA Asks Ohio Supreme Court to Hear Chiquita’s Appeal The Ohio Steel Council this week announced its officers who will serve a 2-year term. Chiquita Brands International, Inc. is in a heated dispute with its commercial general liability insurance Brenda R. Schulz, Controller at Nucor Steel Marion, carrier over the carrier’s refusal to pay defense costs Inc. will serve as Chair and President; Emily B. and denial of coverage for tort claims. The carrier Petrovich, Government Relations Manager at United denied that it has a duty to defend Chiquita because States Steel Corporation, will serve as Secretary; and the tort claimants alleged that Chiquita engaged in Ed D. Forshey, Director of Energy & Asset intentional conduct. Management, at AMG Vanadium Inc., will serve as Treasurer. In a broad-sweeping decision, the First District Court of Appeals effectively re-wrote the parties’ insurance Ohio Steel Council, an organization comprised of contract creating a new rule of law that is contrary to steel producers, processors and suppliers, works to well-established Ohio Supreme Court precedent promote the benefits of a healthy steel sector through regarding an insurer’s duty to defend its insured. the education of key constituents about the industry’s overall importance and significant economic The OMA joined several companies in urging the impact. 8/16/2013 Court to reconsider its decision and accept this discretionary appeal to bring clarity to the confusion McGladrey Reports on Pulse of OMA, Ohio & U.S. caused by the Court of Appeals on this issue that is Manufacturing important to all commercial general liability policyholders. OMA Connections Partner, McGladrey, annually produces a comprehensive study on middle market Here's a short summary by OMA counsel, Anne Marie manufacturers and distributors, the 2013 Sferra, of Bricker & Eckler LLP. 8/15/2013 Manufacturing and Distribution Monitor. More than 1,000 industry executives responded to this year’s And, OMA Asks Supreme Court to Restore survey. Protection from Improper Use of “Hearsay” Testimony Karen Kurek, McGladrey industrial products practice leader, says U.S. manufacturers are optimistic about their businesses but concerned over federal policy The Sixth District Court of Appeals permitted and government regulations. testimony from a previous asbestos case to be used against an employer, who was not a party in the previous asbestos case, in a workers’ compensation There were sufficient OMA participants as well as case where neither the parties nor motivations were Ohio participants for McGladrey to prepare an association and a state report.
Page 5 of 142 Among the OMA findings: OMA participants are another important class action decision, and which more adamant that government regulations will limit favored Comcast. growth (91%) than their peers across the country (74%). And, OMA participants are more likely to On remand, the Sixth Circuit reaffirmed its previous invest in equipment to maintain or improve profit decision certifying a class of more than 100,000 margins (76%) than are nationwide participants consumers. Some who follow class actions think this (56%). was a pretty bold move by the Sixth Circuit. Judge Stranch, a former class action plaintiff's attorney, With Ohio’s wealth of colleges and universities, OMA authored the Sixth Circuit's decision. 7/30/2013 members are more inclined to fill skills gaps in their workforces by collaborating with those institutions OMA Backs Lincoln Electric in Supreme Court (44%), as compared to 31% overall. 8/15/2013 Action on Insurance Coverage Rights
OU's Voinovich School Builds “Employment The OMA is joining with others to file an amici curiae Dashboard” brief in the Ohio Supreme Court in support of Lincoln Electric. At issue is the company's insurance The Voinovich School of Leadership and Public coverage rights. Affairs at Ohio University has developed a tool it calls an “Employment Dashboard.” You can use it to Lincoln Electric incurred more than $179 million in access industry employment data for different levels defense costs and $12 million in indemnity costs of geography in Ohio. (payments for settlements and adverse judgments) in connection with claims related to injury from alleged Good site for you data geeks. There's a free webinar exposure to harmful substances (e.g. asbestos and about how to use the site coming up next magnesium) in its welding products. Approximately week. 8/8/201 $87 million of these defense costs and $4.5 million of these indemnity costs have not been reimbursed by Glass Recycling will make a Big Difference insurance.
After Lincoln Electric settled with some of its primary OMA President, Eric Burkland, commended insurers, it sought reimbursement from some of its Columbus Mayor Michael B. Coleman and Ohio EPA umbrella policies to cover a portion of the Director Scott Nally in a letter to the editor of The unreimbursed defense and indemnity Columbus Dispatch for backing a new glass recycling costs. Ultimately, Lincoln Electric filed suit seeking a pilot program in Columbus. declaratory judgment and damages: The Lincoln Electric Company v. Travelers Casualty and Surety Burkland wrote: “Ohio manufacturers have a Company, N.D. voracious appetite for recycled materials. Manufacturers’ use of recycled products reduces OMA members, especially those whose products or energy consumption, conserves raw materials and processes give rise to exposure claims, are reduces greenhouse-gas and other policyholders whose insurance coverage rights will be emissions.” 7/29/2013 implicated by the Ohio Supreme Court’s action (if it decides to accept the case). Class Action Certification Decision Goes Against Whirlpool, Again OMA has an interest in ensuring that Ohio laws governing insurance coverage remain balanced and Here is a summary from OMA counsel, Bricker & predictable so that manufacturers doing business in Eckler LLP, of the most recent Sixth Circuit decision Ohio can protect against risks inherent in their in Whirlpool class action, in which the OMA previously businesses. OMA counsel, Bricker & Eckler LLP, participated as amicus curiae. This should be of provides this summary. 7/30/2013 interest to manufacturers of consumer goods, among others, whose products could be subject to class House Introduces TiPAC Legislation action litigation. State Rep. Jim Butler (R-Dayton) this week After the effort to have the full Sixth Circuit hear the introduced legislation to require public disclosure of case failed in 2012, Whirlpool appealed to the U.S. most large contingency-fee contracts between Supreme Court. The U.S. Supreme Court vacated government and personal injury attorneys. the decision (without briefing or further argument) in light of its recent decision in Comcast, which was
Page 6 of 142 Known as the Transparency in Private Attorney In this initial Bloomberg/McGladrey Economic Contracting (TiPAC) legislation, House Bill 238 is Outlook, McGladrey CEO Joe Adams and Bloomberg intended to address concerns about the propriety of Senior Economist Joe Brusuelas discuss issues and contingency-fee arrangements for the prosecution of trends facing the middle market, including regulatory public claims. hurdles, employment outlook, on-shoring, manufacturing renaissance, skills gap, the Chinese The OMA strongly supports the concept and will be economy, and more. advocating passage. 7/31/2013 OMA Connections Partner, McGladrey LLP, will report OMA Asks U.S. House to Pass Regulatory Reform the results of its annual manufacturing and distribution survey in an exclusive OMA webinar on Thursday, Measure August 15. Karen L. Kurek, Industrial Products Practice Leader at McGladrey, is the presenting The OMA has signed onto a National Association of subject matter expert. Learn more. Manufacturers (NAM) letter to members of the U.S. House of Representatives supporting legislation that Governor Releases $3B Transportation Plan protects small businesses from overly burdensome regulation. Governor Kasich released his plan for improving Ohio’s transportation system with a $3 billion The House will soon be considering the Regulatory investment in infrastructure over the next several Flexibility Improvements Act (H.R. 2542), which years. The governor’s “Jobs and Transportation strengthens the Regulatory Flexibility Act enacted Plan” will allow the state to eliminate long delays on more than 30 years ago and which has saved small some 41 new construction projects now slated to business billions of dollars in reduced regulatory begin as soon as next year in some cases. costs.
The plan eliminate project delays, sometimes Among other things, the bill expands the authority of decades long, by using revenues generated from the Small Business Administration’s Office of bonding of state turnpike receipts. Here is a complete Advocacy, a regulatory watchdog over agency list of projects and an ODOT web page with more rulemakings. The bill also requires that agencies details. 7/22/2013 consider a rule’s indirect effects on small businesses and hold small business panels before major rules are proposed. 7/30/2013 OMA Supports ODOT Revisions to Truck Shipment Regulations Ohio's Next Speaker? OMA members were invited to comment on an ODOT With somewhat more than a year to go before proposal to update regulations governing “overweight” Speaker House William G. Batchelder is term-limited vehicles. out of the Ohio House, behind the scenes jockeying to succeed him is on. The OMA has a long-standing position in support of greater shipping flexibility. Based on member A contest between State Representatives Ron comment, the OMA issued public comment to ODOT, Amstutz (R-Wooster) and Jim Buchy (R-Greenville) saying, “The rule proposal will simplify compliance was emerging, then last week, Buchy burdens.” Additionally, the OMA expressed support withdrew. Rep. Cliff Rosenberger (R-Clarksville), who for new regulations to facilitate shipments of had been a Buchy supporter, has entered the aluminum coils in excess of 80,000 lbs. race. The Cleveland Plain Dealer breaks it down. 7/31/2013 The issue is slated for review at the August 22 OMA Government Affairs Committee meeting. Interested McGladrey CEO on the Middle Market Economy manufacturers should contact Ryan Augsburger. 7/25/2013 (video)
OMA Asks Senator Brown to Cosponsor Chemical The middle market employs approximately 43 million Regulating Bill people, and accounts for about one-third of the total U.S. workforce. Treated separately, it would be the fifth largest economy in the world. Clearly, what This week the OMA sent a letter to Senator Sherrod happens in the middle market has a large impact on Brown requesting that he cosponsor the Chemical the overall economy. Safety Improvement Act of 2013 (CSIA).
Page 7 of 142 The CSIA makes commonsense reforms to the Toxic State Looking to Team with Businesses for Substances Control Act (TSCA) that has regulated Disaster Recovery chemicals since the 1970s. The bill would replace ineffective standards in the TSCA with a more transparent screening process and would provide Following the derecho storm event in 2012, the Ohio stronger protections for trade secrets and intellectual Emergency Management Agency began engaging property. 7/25/2013 with business, industry and associations in a collaborative planning effort. Ohio Third Frontier Programs Have Funding As a result, the agency created an Ohio Public Private Partnership (OH3P) to coordinate activities to get Norm Chagnon, Deputy Chief, Office of Technology businesses up and running as soon as possible Investments, Ohio Development Services Agency, following a disaster. advises that Ohio Third Frontier programs are funded and highlights these three opportunities for This coalition of government and businesses plans to manufacturers: meet on a quarterly basis to build necessary capabilities, including training, technology and best The Internship Program aims to provide Ohio practices. OHP3 members will be notified when the businesses with technically trained students in Ohio Emergency Operations Center is activated and targeted areas and allow students to explore career will be able to monitor incidents through WebEOC(R), opportunities within Ohio. the online system used by the state to track critical information during disaster response. The Commercial Acceleration Loan Fund supports Ohio for-profit companies addressing the technical OHP3 is currently seeking businesses to and cost barriers to commercialization of high-tech participate. Read more about the products and processes. opportunity. 7/25/2013
And the Technology Asset Grant provides support for Ohio Ranked 28th in CNBC’s “Top States for the creation of highly specialized technical equipment Business 2013” or unique technical facilities that Ohio for-profit companies have determined are critical to realizing the near-term commercial or government usage of Ohio dropped three spots in CNBC’s annual “Top new tech-based products or services that will be States for Business” rankings, coming in at 28th this produced in Ohio. year. Top ranking went to South Dakota, and the lowest to Hawaii. To see if there are Third Frontier programs that can benefit your company contact (614) 466-3887 or (800) Ohio’s lowest ranking came in workforce (47) and 848-1300 or email. 7/25/2013 quality of life (44). Highest rankings came for infrastructure (11) and education (12). Simulation Software Portal for Manufacturers Unveiled by PolymerOhio CNBC says its rankings are based on “51 measures of competitiveness developed with input from business groups including the National Association of Last week, PolymerOhio unveiled the Manufacturing Manufacturers and the Council on and Polymer Portal, a new web-based platform Competitiveness.” 7/24/2013 designed to provide affordable access to advanced simulation software to small- and medium-sized Ohio General Assembly Schedule manufacturers. Announced The software tools enable companies to predict manufacturing outcomes rapidly and at low cost. State lawmakers are home for a summer recess after completing work on the two-year state budget. For decades, simulation software has been used by large companies to reduce development costs. The A schedule for remaining session days has been Manufacturing and Polymer Portal lowers price published. The Senate plans to be in session up to barriers that have deterred small and medium 14 weeks and the House announced plans for up to manufacturers from accessing modeling tools. The 11 weeks of session. portal uses a pay-per-use model. 7/22/2013 This schedule can change. Governor Kasich wants a session this summer to work on Medicaid expansion;
Page 8 of 142 so far, no luck. The OMA supports the governor's Country of Origin of "Oil Country Tubular Goods" position on Medicaid. 7/11/2013 to be Disclosed
NAM Petitions U.S. House to Act on Immigration The General Assembly retained a Senate-added Reform provision in the final budget bill that requires oil and gas production companies to disclose to the state the The OMA signed onto a letter from the National country of origin of “oil country tubular goods.” Association of Manufacturers (NAM) to urge U.S. Representatives to move immigration reform. Collection and disclosure of this information will help ensure that Ohio's natural gas exploration systems NAM writes: “We support the goals of comprehensive are safe and of the highest quality without imposing immigration reform, which have been articulated by any form of purchasing mandates. the NAM as: a pathway to legal status or citizenship for the undocumented; high-skilled visa program View the conference report on this OMA-supported modernization; a lower-skilled worker program; border amendment. security enhancements; and an improved verification system. It is our belief all five of these areas should Congratulations to Emily Petrovich of U.S. Steel for be part of any effective update of U.S. immigration leading the charge. 6/27/2013 policy.” 7/10/2013
Supreme Court Will Hear NLRB Appeal on Board General Assembly Sends Budget to the Governor, Member Standing and Goes Home
This week, the U.S. Supreme Court agreed to hear Late Thursday afternoon the Ohio House approved a the National Labor Relations Board's (NLRB) appeal conference report on House Bill 59, the state budget, of the Noel Canning case regarding contested board on a vote of 51-43. The Senate accepted the member appointments. conference report, 21-11. The D.C. Circuit Court invalidated President Obama's The governor will sign the budget into law before January 2012 NLRB "recess appointments." Once Monday, when the state’s fiscal year begins. The the high court decides this case during its next term, governor may choose to exercise line-item veto which begins in October, we'll know if the recess authority on provisions of the budget. appointments were constitutional.
The budget bill exceeds 5,000 pages and includes Currently, the NLRB has three members, and can hundreds of law changes. View a comparison have up to five. The three current members include document of the changes organized by state the two recess appointed members. Since the recess agency. appointments were made, the NLRB has issued more than 290 published case decisions, all of which are The General Assembly has no firm session dates now called into question. scheduled and is unlikely to return to full-time lawmaking until September. 6/28/2013 According to the National Association of Manufacturers, the board continues to issue decisions Aluminum Coil Transport Approved for 120,000 in defiance of court rulings invalidating the appointments of two of its three members. lbs
To further complicate things, the president has re- Among the hundreds of law changes tucked into the nominated the three sitting members plus two budget is an OMA-supported provision to allow for Republicans. These nominations will be considered more efficient truck transportation of aluminum by the Senate at some point, likely before August coils. The Senate-added provision conditionally because the term of the board’s chairman, Mark increases the weight limit from 80,000 pounds to Pearce, expires in August. If he is not reconfirmed, 120,000 pounds. then the board will only have two members and will, presumably, not be able to conduct business or issue A special permit and other considerations must be decisions. 6/25/2013 obtained from ODOT to use the new 120,000 limit. Here's the conference report on the topic. 6/27/2013
Page 9 of 142 OMA Board Elects Vickers as Director Ohio Gets an “A” in Manufacturing Health
At its meeting this week, the OMA board of directors An Indiana outfit that produces an annual scorecard elected Billy R. Vickers to the board of now 25 on manufacturing in the states has given Ohio a directors. Vickers is president and chief executive grade of “A” for its “manufacturing industry officer of Dublin, Ohio based Modular Assemblies health.” The rankings were put together by Ball State Innovations (MAI). MAI provides manufacturing and University for Conexus, a non-profit based in assembly solutions, employing more than 250 Indianapolis. associates in East Liberty, OH, Lincoln, AL, and Greensburg, IN. Ohio rankings on particular dimensions: logistics: A; human capital: C-; worker benefit costs: D; tax In previous positions, Vickers owned Yale Inspection climate: C-; expected liability gap: C; global reach: A; Services, a company that provided engineering sector diversification: C+; and, productivity and services to the automotive supply base. Vickers also innovation: C. served as director of operations and general manager of New Haven Foundry. Previous to his employment Seven other states received an “A” for manufacturing with New Haven Foundry, Vickers served as plant health: Indiana, Michigan, Wisconsin, Iowa, superintendent for the Ironton Iron Casting plant. Nebraska, South Carolina and Oregon. 6/20/2013
Vickers attended North Carolina State University A Little Insight into JobsOhio Spending Plans where he earned a Bachelor of Science degree and played running back. He is the only OMA board member with this credential: He today ranks 14th on JobsOhio, the new private economic development of North Carolina State’s list of all time average yards the state, will have about $125 million a year to spend gained in a single season, 10th in all-time career in its work. The money comes from the states liquor yardage gains, and is tied for 11th in all-time rushing profits. attempts in a single game with 30 attempts. 6/19/2013 Read a brief interview of John Minor, the organization’s president, to get a little bit of Manufacturers Testify on Counterfeit Airbag information about how they plan to use the Legislation money. 6/20/2013
Last week, the OMA joined with Honda and the No More House Hearings on Right to Work Association of Global Automakers in expressing support for legislation to stiffen the penalties on airbag Rep. Kirk Schuring (R-Canton), the chairman of a fraud. The legislation stems from repeat safety House Manufacturing & Workforce Development problems resulting from unlicensed, counterfeit airbag Committee, announced that there will be no more products and technology, most often aftermarket- hearings on “right to work” legislation this year. installed. The committee heard testimony from co-sponsors House Bill 177 is sponsored by Rep. Dorothy Pelanda Rep. Kristina Roegner (R-Hudson) and Rep. Ron (R–Marysville). The House committee sent the bill to Maag (R-Lebanon) on a pair of proposals, House Bill the full House this week with no known opposition. 151 and House Joint Resolution 5, that would prohibit anyone from being required to join a union as a In his testimony, Steve Osborne of Honda said, condition of employment. “Unlike counterfeit songs or handbags, a consumer can suffer serious injuries or even die from counterfeit After the hearing, Schuring said he had polled the airbags.” Paul Scullion, Safety Manager, Association members of the committee, who apparently of Global Automakers, told the panel, “Those unanimously agreed not to continue deliberations on facilitating the installation of a counterfeit or non- the proposals. 6/4/2013 functional airbag are deliberately compromising the protection afforded to occupants in the event of a Proposed Law Would Crackdown on Counterfeit crash, exposing them to a higher risk of injury.” The Auto Alliance submitted this letter of Air Bags support. 6/14/2013 Representative Dorothy Pelanda (R-Marysville) introduced House Bill 177 to prohibit the sale or
installation of counterfeit or non-functional air bags. Similar legislation has been offered in other
Page 10 of 142 states and is supported by automakers, auto dealers, consolidation has resulted in regional monopolies that and insurance industry interests. Contact OMA’s Rob quash effective rail-to-rail competition. Brundrett to learn how to advocate for the measure. 6/6/2013 Committee members indicated that they favor policy changes at both the state and federal levels and plan State Auditor Not Seeking to Audit Private to work on the issue. Companies This article from Chemical and Engineering News amplifies the issues. 6/6/2013 There's been a continuing dust-up between Auditor Dave Yost and Governor Kasich over the auditor's authority to audit JobsOhio. If he can audit JobsOhio, Judicial Reform Proposal Discussed can he also audit private companies? OMA General Counsel Kurt Tunnell of Bricker & Appearing at the OMA Tax Policy Committee on Eckler described for members of the OMA Tuesday, Yost assured OMA members that he has no Government Affairs Committee this week a policy plans to audit private businesses, as he stated in a proposal offered by Chief Justice Maureen O’Connor recent letter to legislative leaders. that would alter how Ohioans elect judges. Read counsel’s memo. 6/6/2013 The auditor said that JobsOhio is unlike other private corporations in that it’s board members are appointed by the governor.
The General Assembly just enacted a new chapter of law shielding JobsOhio from state audit authority.
OMA counsel Bricker & Eckler prepared this memo to respond to members' questions about the state's audit authority. 6/6/2013
Senate Allows Gifts to Legislative Caucuses for Offices
Buried in the Senate omnibus amendment to the state budget bill passed this week is a provision that would permit corporations and labor unions to make financial “gifts” to legislative campaign funds for certain uses: to pay for office facilities, furniture, equipment and supplies. Current law allows such gifts only for state and county political parties, not caucuses. 6/5/2013
Manufacturers Need More Rail Competition
With transportation productivity as an longtime policy priority, the OMA Government Affairs Committee this week discussed the lack of sufficient railroad competition.
Speaking on behalf of the American Chemical Council, Elaine Patterson shared an analysis of freight rail rates for chemical manufacturers.
At issue: Four railroads now control about 90% of the long-haul freight market, with only two carrying most of the eastern U.S. cargo. Shippers say this market
Page 11 of 142 Miscellaneous Legislation of Interest to Manufactuers Prepared by: The Ohio Manufacturers' Association Report created on November 12, 2013
HB4 LOCAL GOVERNMENT PERFORMANCE MEASUREMENT GRANT PROGRAM (STAUTBERG P, BLESSING III L) To establish the Local Government Performance Measurement Grant Program. Current Status: 10/8/2013 - House State and Local Government, (Second
Hearing)
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: 11/13/2013 - Senate Civil Justice, (Fifth Hearing)
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
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
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: 6/25/2013 - House Transportation, Public Safety and Homeland
Security, (Second Hearing)
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 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)
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.
Page 12 of 142 Current Status: 3/12/2013 - Senate Transportation, (Seventh Hearing)
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
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: 6/18/2013 - House Policy and Legislative Oversight, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_48
HB51 TRANSPORTATION BUDGET (MCGREGOR R, PATMON B) 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: 4/1/2013 - SIGNED BY GOVERNOR; Eff. 7/1/2013 or at later date if specified in bill; Other Sections Eff. 4/1/2013 (Exempt from Referendum)
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: 6/30/2013 - SIGNED BY GOVERNOR; Eff. 6/30/2013; Some Eff.
9/29/2013; Others Various Dates
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
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: 6/27/2013 - SIGNED BY GOVERNOR; Eff. 9/27/2013
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
Page 13 of 142 State to create an online voter registration system and to permit data sharing in order to maintain the statewide voter registration database. Current Status: 11/6/2013 - House Policy and Legislative Oversight, (Second
Hearing)
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)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_82
HB100 JOBSOHIO-NONPROFIT ECONOMIC DEVELOPMENT CORPORATIONS (CARNEY J) To allow the Auditor of State to conduct full audits of JobsOhio and to require all nonprofit economic development corporations that receive public funds to make annual disclosures related to both their public and private funds. Current Status: 6/25/2013 - SUBSTITUTE BILL ACCEPTED, House State and
Local Government, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_100
HB157 TOWNSHIP OFFICER RECALL (STAUTBERG P) To establish a procedure to recall an elective township officer. Current Status: 5/14/2013 - House State and Local Government, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_157
HB174 BEER MANUFACTURERS (BUCHY J, GERBERRY R) To prohibit a beer manufacturer from taking certain actions regarding the awarding or acquiring of beer distribution franchises or beer distribution territories prior to July 30, 2013, and to declare an emergency. Current Status: 5/29/2013 - House Commerce, Labor and Technology, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_174
HB194 AUTO INDUSTRY MONTH (LUNDY M, ADAMS J) To designate the month of November as "Auto Industry Month." Current Status: 6/25/2013 - House Transportation, Public Safety and Homeland
Security, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_194
HB218 ENTREPRENEUR IN RESIDENCE PILOT PROGRAM (ROSENBERGER C, DOVILLA M) To require the Small Business Advisory Council to establish an entrepreneur in residence pilot program. Current Status: 11/12/2013 - House Economic Development and Regulatory
Reform, (Third Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_218
HB261 OHIO COURT OF CLAIMS MODERNIZATION (BUTLER, JR. J, STINZIANO M) To abolish the office of the Court of Claims commissioner, to transfer the powers of a judge of the Court of Claims to the court; to specify certain powers of a Court of Claims magistrate, to modify the Attorney General's annual report on the crime victims compensation program, to conform existing law to the existing filing period for filing a claim for reparations by an adult, to eliminate the procedure for filing an affidavit of disqualification for a judge of a municipal
Page 14 of 142 or county court and instead include the disqualification of a judge of a municipal or county court and a judge of the court of claims within the procedure for filing an affidavit of disqualification for a probate judge, a judge of a court of appeals, and a judge of the court of common pleas, and to change the basis of the per diem compensation of a retired judge who serves on the Court of Claims from the annual compensation of a judge of a court of appeals to the annual compensation of a judge of a court of common pleas. Current Status: 11/13/2013 - House Judiciary, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_261
HB278 FREEWAY TRAVEL-VEHICLE GROSS WEIGHT (SLABY M) To require that a vehicle with a gross vehicle weight rating or an actual gross vehicle weight of more than 10,000 pounds be driven only in either of the two right-hand lanes of a freeway with three lanes of travel in the same direction, except in limited circumstances. Current Status: 11/12/2013 - House Transportation, Public Safety and Homeland
Security, (Third Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_278
HB292 AEROSPACE AND TECHNOLOGY STUDY COMMITTEE (PERALES R) To create the Aerospace and Technology Study Committee. Current Status: 11/12/2013 - House Economic Development and Regulatory
Reform, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_292
HB295 LEGISLATIVE AGENT (HAGAN R) To require a legislative agent to report to the Joint Legislative Ethics Committee compensation paid to the agent by the agent's employer. Current Status: 10/10/2013 - Referred to Committee House State and Local
Government
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_295
HB321 DATAOHIO BOARD (DUFFEY M, HAGAN C) To create the DataOhio Board, and to specify requirements for posting public records online. Current Status: 10/30/2013 - Referred to Committee House State and Local
Government
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_321
HB322 UNIFORM ACCOUNTING SYSTEM (DUFFEY M, HAGAN C) To require the Auditor of State to adopt rules regarding a uniform accounting system for public offices. Current Status: 10/30/2013 - Referred to Committee House State and Local
Government
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_322
HB323 ONLINE PUBLIC DATA CATALOG (DUFFEY M, HAGAN C) To establish an online catalog of public data at data.Ohio.gov. Current Status: 10/30/2013 - Referred to Committee House State and Local
Government
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_323
HB324 LOCAL GOVERNMENT INFORMATION EXCHANGE GRANT PROGRAM (DUFFEY M, HAGAN C) To establish the Local Government Information Exchange Grant Program and to make an appropriation. Current Status: 10/30/2013 - Referred to Committee House State and Local
Government
Page 15 of 142 State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_324
HCR11 INDEPENDENT BUSINESS MONTH (STEBELTON G) To designate July 2013 as Ohio Independent Business Month. Current Status: 10/29/2013 - REPORTED OUT, Senate Workforce and
Economic Development, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HCR_11
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
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: 6/18/2013 - House State and Local Government, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HJR_4
HJR7 ARTICLE V AMENDMENTS CONVENTION (HUFFMAN M) Applying for an Article V amendments convention. Current Status: 10/29/2013 - House Policy and Legislative Oversight, (Third
Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HJR_7
HJR8 OHIO CONSTITUTION-TERM LIMITS (BECKER J) Proposing to amend Sections 2 and 7 of Article II, Section 6 of Article IV, Section 9 of Article V, Sections 3 and 4 of Article VI, and Section 1 of Article XIV; to enact new Section 8 of Article V; to enact Section 5 of Article X and Section 15 of Article XVIII; and to repeal Section 8 of Article V of the Constitution of the State of Ohio to institute term limits for certain elected and appointed officials and to increase the term limits for members of the General Assembly. Current Status: 10/30/2013 - Referred to Committee House Policy and
Legislative Oversight
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HJR_8
SB3 RULE-MAKING REFORM (LAROSE F) To reform rule-making and rule-review procedures and regulatory processes. Current Status: 9/19/2013 - Referred to Committee House State and Local
Government
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: 4/10/2013 - Senate Public Safety, Local Government and
Veterans Affairs, (First Hearing)
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
Page 16 of 142 regarding polling places and voting machines. Current Status: 3/26/2013 - SIGNED BY GOVERNOR; Eff. 6/26/2013
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
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: 3/12/2013 - Senate Agriculture, (First Hearing)
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
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: 3/22/2013 - SIGNED BY GOVERNOR; Eff. 6/21/2013
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_47
SB70 OHIO CIVIL RIGHTS LAW (TAVARES C) To specify that discrimination by an employer against any person because of the person's credit history is an unlawful discriminatory practice under the Ohio Civil Rights Law. Current Status: 10/16/2013 - Senate Commerce and Labor, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_70
SB91 DRUG MARKETING DISCLOSURES (SKINDELL M) Regarding prescription drug marketing disclosures. Current Status: 3/20/2013 - Referred to Committee Senate Medicaid, Health and
Human Services
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_91
SB109 ELECTION LAW (OBHOF L) To revise the law regarding election administration, ballots, and candidates. Current Status: 10/17/2013 - REPORTED OUT AS AMENDED, House Policy
and Legislative Oversight, (Third Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_109
SB110 VOTING PREREGISTRATION (TURNER N) To permit sixteen and seventeen year olds to preregister to vote and to revise the law concerning compensated voter registration workers and petition circulators. Current Status: 4/17/2013 - Referred to Committee Senate State Government
Oversight and Reform
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_110
SB112 ENTERPRISE ZONE AGREEMENTS (BEAGLE B) To extend the authority of municipal
Page 17 of 142 corporations and counties to enter into enterprise zone agreements with businesses until October 15, 2014. Current Status: 7/11/2013 - SIGNED BY GOVERNOR; Eff. 10/11/2013
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_112
SB153 STATE AGENCY APPROPRIATIONS (JORDAN K) To require aggregate General Revenue Fund appropriations for state agencies to be reduced by specified amounts for the biennium. Current Status: 6/26/2013 - Referred to Committee Senate Finance
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_153
SB182 OHIO WORKS FIRST DRUG TESTING PROGRAM (SCHAFFER T) To require the Director of Job and Family Services to operate an Ohio Works First drug testing pilot program and to make an appropriation. Current Status: 9/26/2013 - Referred to Committee Senate Medicaid, Health and
Human Services
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_182
SB202 CONTROL SHARE ACQUISITION ACT (OBHOF L, KEARNEY E) To provide exceptions to the applicability of the Control Share Acquisition Act, to require board approval for Act opt-out amendments of a corporation's regulations or articles of incorporation, and to apply a three-year look-back period to ownership of shares for purposes of determining applicability of certain shareholder transaction laws. Current Status: 11/6/2013 - PASSED BY SENATE; Vote 33-0
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_202
SB216 PROVISIONAL BALLOTS (SEITZ B) To revise the law concerning provisional ballots and to specify permitted procedures for a voting location that serves more than one precinct. Current Status: 11/12/2013 - Senate State Government Oversight and Reform,
(Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_216
SCR2 RESHORING MONTH (BEAGLE B) Declaring March 2013 as Reshoring Month in Ohio. Current Status: 3/20/2013 - ADOPTED BY HOUSE; Vote 92-0
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: 6/25/2013 - REPORTED OUT AS AMENDED, Senate State
Government Oversight and Reform, (Third Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SJR_1
SJR4 OHIO CONSTITUTION-ARTICLE II (LAROSE F) Proposing to enact Section 1h of Article II of the Constitution of the State of Ohio to authorize the General Assembly to invalidate rules proposed or adopted under a statute, and to create and empower one or more joint committees of the Senate and House of Representatives to review rules that have been proposed or adopted under a statute and to make recommendations to the General Assembly regarding those rules. Current Status: 10/29/2013 - Senate State Government Oversight and Reform,
(First Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SJR_4
Page 18 of 142 SJR5 FEDERAL BALANCED BUDGET AMENDMENT (FABER K) Urging the Congress of the United States to propose a balanced budget amendment to the United States Constitution and applying to the Congress, pursuant to Article V of the United States Constitution, to call a convention for proposing amendments. Current Status: 11/13/2013 - House Policy and Legislative Oversight, (Second
Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SJR_5
Page 19 of 142 MEMORANDUM
To: Ohio Manufacturers’ Association Government Affairs Committee
COLUMBUSICLEVELAND CINCINNATI-DAYTON From: Bricker & Eckler LLP MARIETTA
BRICKER&ECKLERLLP Re: 2014 Statewide Ballot Issues and Pending Legislation 100 South Third Street Columbus, OH 43215-4291 MAIN: 614.227.2300 Date: November 12, 2013 FAX: 614.227.2390 www.bricker.com [email protected] 2014 Statewide Ballot Initiatives
Christopher N. Slagle 614.227.8826 Background: [email protected] In Ohio, Constitutional amendments may be initiated by legislative action or by citizen initiative. Over the past several years citizen initiated Constitutional amendments have become more popular and a fixture on November General Election ballots. The Ohio Constitution and Ohio Revised Code outline the process for a citizen initiated Constitutional amendment.
Citizens who desire to amend the Ohio Constitution must first create a Petitioners’ Committee and are commonly called “the Petitioners” throughout the process. The committee consists of three to five Ohioans. The petitioners file an “Initial Petition” with the Ohio Attorney General. That Initial Petition must be signed by at least 1,000 qualified Ohio electors. The Attorney General reviews the summary of the initiative contained in the petitions and determines if the summary is a “fair and truthful” statement as defined in Ohio Revised Code section 3519.01. If the Attorney General determines the summary is fair and truthful, the petition is certified and forwarded to the Ohio Ballot Board for review.
The Ohio Ballot Board, consisting of the Ohio Secretary of State and four appointed members, two from each major political party, then reviews the petition to determine if it contains only one Constitutional amendment. If the Ballot Board confirms that the petition presents only one Constitutional issue, the Ballot Board files a verified copy of the proposed amendment with the Secretary of State.
After Ballot Board verification, Petitioners can begin collecting the signatures needed to place the amendment on the ballot. For a Constitutional Amendment, Petitioners are required to gather signatures equaling ten percent of the total vote cast for the Office of Governor in the last gubernatorial election. Signatures must be distributed from at least 44 of Ohio’s 88 counties, and must equal at least five percent of the total vote cast for the
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Governor in each of those counties. If this minimum threshold of signatures is met, Petitioners must file the proposed amendment with the Secretary of State no later than 125 days prior to the next General Election. Petitioners have an opportunity to gather more signatures if they do not meet the required number of valid signatures after the first filing with the Secretary of State. Deficiencies can occur due to duplicate signatures, unregistered voters, or voter fraud.
Once the Secretary of State verifies that the signatures are valid, he or she passes the amendment back to the Ballot Board who determines the official language that will go on the ballot. The Secretary of State then places the official Constitutional language, along with an explanation and/or arguments for and against the amendment, on the ballot.
Prayer in Schools (Not Certified): On April 22, 2013, the Coalition to Return Prayer to Our Public Schools submitted a proposed Constitutional Amendment to the Attorney General for review. The amendment proposes to allow public school children to voluntarily pray in their schools and requires that all schools post the Bill of Rights.
Attorney General DeWine concluded the submission did not comply with state law because the petitions filed were not properly labeled nor did they contain the correct text or summary of the proposed amendment. In addition, he found the petitions did not comply with the state’s requirements for circulator statement and signature. He concluded that the petitions did not contain a fair and truthful statement of the amendment because of the reasons stated above. The Committee now must resubmit a new petition, with an additional 1,000 signatures and summary in proper form, thereby starting the Constitutional Amendment process over, to be considered for future ballots. The entire process, from Attorney General review, Secretary of State, Ballot Board, and eventual signature collection must run its course for the Prayer in Schools Amendment to reach the ballot.
Because the deadline to gather signatures for inclusion on the 2013 ballot was July 3, 2013, this proposal is delayed at least until November 2014.
Medical Marijuana (Certified): The Petitioner Committee “Ohio Rights Group” submitted petition language to the Attorney General to place a Constitutional Amendment on the ballot to legalize medicinal marijuana in Ohio. The Petitioners submitted “The Ohio Cannabis Rights Act” to Attorney General DeWine on May 7, 2013. On May 17, the Attorney General concluded that the summary was fair and truthful and sent the petition to Ohio Secretary of State Jon Husted for certification by the Ohio Ballot Board. The Ballot Board, in turn, certified the Ohio Cannabis Rights Act as one Constitutional Amendment on May 23, 2013 and the Committee now is free to create and circulate their petition to Ohio Electors. The Committee is still working to collect signatures in anticipation of inclusion on the November 2014 ballot.
Legalization of Marijuana (Not Certified): “The End Ohio Cannabis Prohibition Act of 2012” was submitted to the Attorney General on August 2, 2013 by Petitioner Committee “Responsible Ohioans for Cannabis.” The proposed Constitutional Amendment would permit any person, 18 years of age or older, to “produce, cultivate, possess, transport, distribute,
6611565v4 Page 21 of 142 Bricker & Eckler ATTORNEYSATLAW OMA Government Affairs Committee – 11/13/2013 Page 3 of 6 consume, or otherwise engage in the use of cannabis products for personal use and cannabis paraphernalia.”
The Attorney General rejected the summary of the proposed amendment for failing to meet the requirements of a “fair and truthful representation of the proposed amendment.” Portions of the summary cited by the Attorney General as problematic include failure to support claims of Ohio’s repudiation of federal law related to cannabis, claims that medical uses of cannabis products will be taught in classrooms, failure to address changes to the law dealing with persons under the influence of cannabis products, and failure to address rule-making duties and responsibilities of the Ohio Department of Agriculture and Ohio Department of Commerce.
The Petitioner Committee may resubmit a new petition, with these flaws corrected, for reconsideration in advance of the November 2014 election.
Same-Sex Marriage (Certified): On March 26, 2012 Freedom Ohio, the Petitioner Committee, submitted a proposed Constitutional Amendment to the Attorney General which would allow the marriage of two consenting adults, regardless of gender. This was a resubmission of an initiative petition that had been rejected on March 9, 2012 for being longer than the actual amendment text and for failing to meet the “spirit and purpose of the statute.” The proposal also includes language to allow religious institutions to choose whether or not to marry same-sex couples.
On April 3, 2012 the Attorney General certified the submitted summary as fair and truthful and on April 5, 2012 the Ohio Ballot Board certified the petition as a single issue. Since that time, the Petitioner Committee has engaged in strategic discussions with other interested groups around the state and is now considering putting this issue before voters on the November 2014 ballot. For the initiative to be included on the November 2014 ballot, Freedom Ohio will need to collect signature in advance of the July 2, 2014 deadline to submit initiative petitions to the Secretary of State’s office.
Sub. H.B. 7 (Internet Cafes) Referendum (Certified): The Petitioner Committee submitted an initiative petition for a referendum on Substitute House Bill 7, which effectively bans sweepstakes terminal device gaming conducted at Internet Cafes in Ohio. The Attorney General certified the summary submitted by the Petitioner Committee as fair and truthful on June 21, 2013 and, on the same day, the Ohio Ballot Board certified the petition as having 1,000 valid signatures.
The Petitioner Committee, Committee to Protect Ohio Jobs, submitted signatures, however, they fell 71,140 short of the number required to place the issue on the ballot and the law went into effect on September 4, 2013.
“Right to Work” (Certified & Collecting Signatures): In October 2013, the Columbus Dispatch reported that a group – the Ohioans for Workplace Freedom – had collected more than 100,000 signatures in its effort to place a “Right to Work” Constitutional Amendment on the
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2014 statewide ballot. The effort would permit employees to choose whether to join or continue as a member of a labor organization as a condition of employment. The group filed its initial paperwork with the Attorney General, on January 12, 2012, and was certified to begin collecting signatures on February 1, 2012. The group must submit at least 387,000 valid signatures to qualify for the 2014 ballot – thus far, no signatures have been filed with the Ohio Secretary of State.
“Right to Work” has been a national issue and ballot initiative in several states. Ohio rejected a “Right to Work” initiative in 1958. The measure – supported by the TEA Party- backed 1851 Center for Constitutional Law – would not ban unions, but would prohibit mandatory union membership and mandatory assessment of union dues from nonunion members. It is unknown whether the group will be able to collect sufficient valid signatures to qualify for next year’s ballot.
Politically, reaction has been mixed from Governor Kasich and legislatives leaders as to whether a “Right to Work” initiative – especially following the aftermath of the SB 5 referendum – would lead to additional conservative turnout or provide increasing intensity for labor interests in what Republican strategists would arguably expect to be a good year for Republican candidates.
Pending Legislation
H.B. 238 – Transparency in Private Attorney Contracts Act (“TiPAC”): Introduced by Representative Jim Butler (R-Dayton), H.B. 238 (“TiPAC”) is currently pending in the House Judiciary Committee. The bill includes provisions to prohibit the state from entering into a contract with a private attorney for any legal matter where the budget for legal fees is estimated to be in excess of $100,000, unless the Attorney General makes a written determination that he engagement of the private attorney would be in the public interest. The bill sets caps on contingency fees that a private attorney may receive and generally prohibits contingency fees from exceeding $50 million except in certain circumstances. A provision creating a preference for Ohio attorneys is included as is a requirement for the Attorney General to submit an annual report to the Senate President and Speaker of the House, describing the use of private attorneys during the preceding fiscal year. The goal of the legislation is to provide accountability and increased transparency in the Attorney General’s office so that the public can better understand when, why, and how public dollars are being used to contract with private sector attorneys. The bill has received three hearings and is still under consideration by the House committee.
TiPAC is an initiative supported by various tort reform groups, including the Ohio Alliance for Civil Justice(OACJ – of which the OMA is a member), the American Tort Reform Association (ATRA), the US Chamber of Commerce, the Institute for Legal Reform, and other business-backed interests dedicated to civil justice reform.
H.B. 317 – False Claims Act: Representative Barbara Sears (R-Sylvania) recently introduced HB 317 as an effort to reform certain aspects of Ohio’s Medicaid system. Included in
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H.B. 317 is language providing for an Ohio version of the federal False Claims Act. The OMA and other business groups have battled the False Claims Act over several General Assemblies in that it provides, generally, a private cause of action in “whistleblower” cases for recovery of public dollars allegedly inappropriately used. Provisions relating to false claims include a prohibition against making a false or fraudulent claim for payment or approval, using a false record or statement to make a claim, improperly avoiding or decreasing an obligation to pay or transmit money or property to the state, among other things. In addition to setting out the prohibitions, the legislation also prescribes civil penalties for violations and requires the Attorney General to investigate suspected violations and allows the Attorney General to bring civil enforcement actions on behalf of the state.
If, however, the Attorney General declines to prosecute a claim, a private action may be commenced giving rise to additional litigation costs, demands, and possible recovery against any private sector entity engaging in business with the State of Ohio.
S.B. 193 – Minor Political Parties: S.B. 193 was introduced by Senator Bill Seitz in mid- September and signed by the Governor on November 11. The bill underwent significant changes both in House Committee and on the House Floor and the final version reflects recommendations from the Conference Committee. These provisions include a requirement for a group wishing to form a political party to collect petition signatures from qualified electors equal in number to at least one percent of the total vote for the Governor or nominees for presidential electors in the most recent election for such office and requires that the petition be signed by no fewer than 500 qualified electors from each of at least half congressional districts in the state. However, for the 2014 general election, the a group wishing to form a political party need only have signatures from qualified electors numbering one-half of one percent of the total vote for nominees for the presidential electors at the 2012 general election, giving these groups additional time before the one percent requirement goes into effect. For current minor parties, the bill requires the party’s candidate for Governor or nominees for presidential elector to receive at least three percent of the entire vote cast for that office at the most recent regular state election for the party to remain qualified as a political party in Ohio, although this requirement is lowered to two percent for the 2014 election. Ohio’s previous laws related to minor parties were declared unconstitutionally restrictive in 2006, and this bill is attempts to put into place guidelines and rules for new and minor parties. This bill will become effective in January 2014.
S.B. 205 – Absentee Ballots: Senator Bill Coley introduced S.B. 205, which would permit the Secretary of State to mail unsolicited applications for an absentee ballot only for a general election and only if the General Assembly has made an appropriation for that particular mailing, except for the 2014 election where the Secretary of State may send the applications regardless of whether an appropriation has been made. The bill further prohibits any other public official or employee from mailing unsolicited applications. The bill also provides that a board of election may not prepay for the return postage for an application for an absentee ballot. S.B. 205 also contains a provision allowing a person’s right to vote to be challenged on the ground that the identification statement is incomplete and, if it is found to be incomplete or insufficient, the vote must not be accepted or counted. This bill passed on the Senate floor on November 6 with a vote
6611565v4 Page 24 of 142 Bricker & Eckler ATTORNEYSATLAW OMA Government Affairs Committee – 11/13/2013 Page 6 of 6 of 22-11. It was introduced in the House on November 7, but has not yet been referred to a committee.
S.B. 109 – Election Administration: S.B. 109, introduced by Senator Larry Obhof, requires the Secretary of State to adopt rules and procedures related to the administration of elections and official oversight by the Secretary of State’s office. The bill makes changes to the appointment of precinct election officials (a new title for “judges of election” currently in law) and new members to boards of election. In addition, the legislation would require a political subdivision or other entity to certify ballot questions or issues to the board of elections in paper form and prohibits electronic submission. The bill also refers to electronic pollbooks and authorizes the Board of Voting Machine Examiners to test, and the Secretary of State to certify, electronic pollbooks being used in Ohio. S.B. 109 was passed by the Senate 23-10 and was reported out of the House Policy and Legislative Oversight Committee on October 22. It is currently waiting on a vote by the full House.
S.B. 228 – Controlling Board: Senator Chris Widener introduced Senate Bill 228, which would limit the Controlling Board’s authority to approve certain funds and to require state agencies to provide certain information to the Controlling Board regarding requested purchases from out-of-state suppliers. Authority to approve expenditures would be limited when expenditure of funds are in excess of the amount appropriated or are not anticipated in the current biennial budget passed by the legislature. The bill is currently pending in the Senate Finance Committee.
H.B. 328 – Controlling Board: In the wake of the Controlling Board’s approval of Medicaid expansion funds, Representatives Ron Young and Christina Hagan have introduced House Bill 328, which seeks to modify the authority of the Controlling Board to approve certain expenditures. Limitations include language that the Controlling Board may authorize the expenditure of excess federal funds so long as they do not exceed 3.5% of the amount already appropriated for that purpose. In addition, the amount of expenditures authorized may not exceed 1% of the total amount appropriated for the agency administering the fund. House Bill 328 was introduced on November 5, and has not yet been referred to a committee in the House.
6611565v4 Page 25 of 142 MEMORANDUM
To: Ohio Manufacturers’ Association Government Affairs Committee
COLUMBUSICLEVELAND CINCINNATI-DAYTON From: Bricker & Eckler LLP MARIETTA
BRICKER&ECKLERLLP Re: OMA Amicus Activities 100 South Third Street Columbus, OH 43215-4291 MAIN: 614.227.2300 Date: November 13, 2013 FAX: 614.227.2390 www.bricker.com [email protected] The OMA has not participated as amicus curiae in any new cases since the
Christopher N. Slagle last report in late August 2013. The report below reflects the current status of 614.227.8826 the four cases included in the August 2013 report. [email protected] I. Burton v. UniFirst Corporation - Ohio Supreme Court Case No. 2013-1275
Status: The OMA and others filed a Joint Memorandum in Support of Jurisdiction, asking the Ohio Supreme Court to accept UniFirst’s appeal. The jurisdictional issue has been fully briefed since September 6, 2013. The Court will soon decide whether to accept the appeal.
Case Summary: After an age discrimination trial in an employment case, the jury returned a defense verdict in favor of UniFirst Corporation. Shortly thereafter, the Plaintiff, Burton, moved for a new trial on the basis that one of the jurors did not give a truthful statement during the jury selection process (known as voir dire). The juror was a doctor who stated during voir dire that he had never been sued for malpractice in his more than 30 years of practice. The Plaintiff presented evidence to show that, in fact, in the past 19 years, the doctor had been named multiple times as a defendant in three medical malpractice cases. Each of these cases had multiple defendants (11, 20, and more than 50 named defendants, of which the doctor was one). The doctor was not the primary defendant in any of the 3 three cases and none resulted in a verdict or judgment against the doctor.
The trial court found, based on the evidence and arguments presented, and its observation of the juror during voir dire and the entire trial, that the juror’s misstatement was not prejudicial to the Plaintiff and, thus, denied the motion for a new trial.
The Eighth District Court of Appeals (Cleveland, Ohio) reversed and ordered a new trial, a decision that is contrary to well-established Ohio law which requires the trial court to determine that a juror’s misstatement during voir dire was both material and prejudicial to the losing party before ordering a new trial. In the UniFirst case, the trial court found no prejudice from the
6613318v3 Page 26 of 142 Bricker & Eckler ATTORNEYSATLAW OMA Government Affairs Committee – 11/13/2013 Page 2 of 4 doctor’s statements in voir dire, but the Court of Appeals disagreed stating that the trial court should have held a hearing on that question. Instead of remanding the decision to the trial court to hold only a hearing on the question of prejudice from the doctor’s statements, the Court of Appeals ordered an entire new trial.
This decision is also inconsistent with established Ohio law regarding the finality of jury verdicts and the fairness of verdict challenges and provides a new basis for litigants to seek new trials, thereby extending litigation and the costs associated with it.
Principle/Interest/Impact: Jurors should not be dismissed merely because they have previously been involved in litigation. This decision impacts any business that faces a jury trial. Litigation is costly and should not be needlessly extended.
II. Burkart v. H.J. Heinz Co. - Ohio Supreme Court Case No. 2013-0580
Status: The OMA filed an amicus merit brief in support of H.J. Heinz Co. The case has been fully briefed since September 27, 2013. Next, the Court will schedule oral argument.
Case Summary: In a workers’ compensation case, the Sixth District Court of Appeals (Toledo, Ohio) permitted testimony from a previous asbestos case to be used against an employer, who was not a party in the previous asbestos case and in the workers’ compensation matter where neither the parties nor motivations were sufficiently similar to permit this testimony under Ohio Evidence Rule 804(B). Ohio Rule of Evidence 804(B) allows testimony to be used in this manner only if (1) the party against whom the testimony is offered is a predecessor in interest to the party in the previous action, and (2) had an opportunity and similar motive to develop the testimony. By merging these two requirements, as the Court of Appeals did in H.J. Heinz, the court gave no meaning to the “predecessor in interest” requirement and misapplied the “similar motive” requirement.
The OMA filed its amicus brief in support of H.J. Heinz Co. because manufacturers are regularly forced to defend against testimony developed in a prior proceeding when neither they, nor their predecessors in interest, were parties in that proceeding. Even when a predecessor in interest is involved in the prior proceeding, the earlier testimony must be excluded in the subsequent action unless the predecessor had a similar motive in developing the testimony. In determining whether the similar motive requirement is met, the court must do more than make the observation, which the court did here in H.J. Heinz, that both defendants would benefit if the plaintiff’s claims are disproved. This litigation outcome is unfair and precisely the kind of hearsay evidence that is precluded by the Ohio Rules of Evidence.
Principle/Interest/Impact: Companies that are sued should be able to defend themselves based on the facts of the particular case and should not be saddled with testimony from another case in which they did not participate. This decision impacts any business that is sued.
6613318v3 Page 27 of 142 Bricker & Eckler ATTORNEYSATLAW OMA Government Affairs Committee – 11/13/2013 Page 3 of 4
III. Chiquita Brands International, Inc. v. National Union Fire Insurance Company of Pittsburg, PA. - Ohio Supreme Court Case No. 2013-0622
Status: On September 25, 2013, the Ohio Supreme Court denied the motion for reconsideration, leaving the decision of the court of appeals intact.
Case Summary: Chiquita Brands International, Inc. has been in a heated dispute with its commercial general liability insurance carrier over the carrier’s refusal to pay defense costs and denial of coverage for tort claims. The carrier denied that it has a duty to defend Chiquita because the tort claimants alleged that Chiquita engaged in intentional conduct.
Generally speaking, if a lawsuit includes at least one claim that is potentially covered by the insured’s liability insurance policy, the insurer has a duty to defend the entire suit. In this case, the Plaintiffs alleged negligence and intentional tort claims. The insurance policy also included a standard exclusion for expected or intended bodily harm.
In a broad-sweeping decision, the First District Court of Appeals (Cincinnati, Ohio) effectively re-wrote the parties’ insurance contract creating a new rule of law that is contrary to well- established Ohio Supreme Court precedent regarding an insurer’s duty to defend its insured. More specifically, under Ohio law, when there is an exclusion for expected or intentional injuries, an insurer is obligated to pay defense costs for tort claims alleging intentional conduct where other allegations or evidence suggest that the policyholder did not expect or intend to cause bodily injury. In Ohio, an intent to injure, not merely an intentional act is required for the claim to be uninsurable. This rule of law is important to policyholders because virtually all conduct is intentional, but “many unintended injuries result from intentional acts.” Allstate Ins. Co. v. Campbell, 128 Ohio St.3d 186 (2010).
The Court of Appeals repeatedly focused on the fact that the company’s acts were intentional, rather than on whether the ensuing harm was intentional. Additionally, the Court of Appeals rejected the argument that there was a duty to defend the negligence claims, finding that they were all based on the company’s intentional conduct.
The OMA joined several companies in urging the Court to reconsider its decision. The request to the Ohio Supreme Court to accept this discretionary appeal is needed to eliminate the confusion caused by the Court of Appeals on this issue that is important to all commercial general liability policyholders.
Principle/Interest/Impact: Established law regarding liability insurance coverage should be followed so that companies can plan and provide for the risks they will encounter in their businesses. This decision impacts all companies that have commercial general liability policies with the standard exclusion for expected or intentional injuries.
6613318v3 Page 28 of 142 Bricker & Eckler ATTORNEYSATLAW OMA Government Affairs Committee – 11/13/2013 Page 4 of 4
IV. The Lincoln Electric Company v. Travelers Casualty and Surety Company - Ohio Supreme Court Case No. 2013-1088
Status: The OMA joined with others to file an amicus brief with the Ohio Supreme Court in support of Lincoln Electric and its insurance coverage rights. The OMA amicus brief asked the Court to certify questions of state lase from the federal district court handling the underlying case. On September 25, 2013, the Court accepted the certified state law question. The record was filed on November 6, 2013. Briefing will begin within the next month or so.
Case Summary: Lincoln Electric incurred more than $179 million in defense costs and $12 million in indemnity costs (payments for settlements and adverse judgments) in connection with claims related to injury from alleged exposure to harmful substances (e.g. asbestos and magnesium) in its welding products. Approximately $87 million of these defense costs and $4.5 million of these indemnity costs have not been reimbursed by the insurance carriers.
After Lincoln Electric settled with some of its primary insurers, it sought reimbursement from some of its umbrella policies to cover a portion of the unreimbursed defense and indemnity costs. Ultimately, Lincoln Electric filed suit seeking a declaratory judgment and damages: The Lincoln Electric Company v. Travelers Casualty and Surety Company, N.D.
OMA members, especially those whose products or processes give rise to exposure claims, are policyholders whose insurance coverage rights will be implicated by the Ohio Supreme Court’s action (if it decides to accept the case).
The OMA and its members have an interest in ensuring that Ohio laws governing insurance coverage remain balanced and predictable so that manufacturers doing business in Ohio can protect against risks inherent in their businesses.
Principle/Interest/Impact: Established law governing insurance coverage must remain balanced and predictable so that companies can protect against risks inherent in their businesses. This decision especially impacts companies that are subject tort claims based on exposure or that accrue over an extended period of time.
6613318v3 Page 29 of 142 To: OMA Government Affairs Committee From: Ryan Augsburger / Rob Brundrett Re: Energy Public Policy Report Date: November 13, 2013
Electricity Rates and Regulation Utility cases approved in 2012 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. The OMA Energy Committee and OMA Energy Group will be providing tools for understanding and engagement for manufacturers.
Electricity Transmission Constraints Northern Ohio Capacity constraints facing the ATSI zone (within the PJM system) will boost rates beginning in 2015. System upgrades are addressing the constraints in part, but prices will be higher in the region. See attached document on capacity prices and the effect of energy efficiency.
Energy Efficiency Legislation (SB 58) The Ohio Senate is holding hearings on SB 58 to revise existing Ohio energy policy on renewables, efficiency, and advanced energy. The Senate Public Utilities Committee held five hearings earlier this year then constructed a legislative proposal. The OMA commissioned research and shared findings in late April.
A “substitute” version of the bill appeared in late September. OMA experts have reviewed the bill and provided analysis (included). The bill makes dozens of policy changes to the energy efficiency standards that will prove costly for manufacturers. Lobbying in opposition to SB 58 has been and will be a top OMA priority for at least the remainder of the year. Member engagement is encouraged!
Manufactured Gas Plant Remediation Costs Lawmakers are working on a legislative proposal to statutorily provide cost-recovery to utilities for remediation of obsolete manufactured gas plants. Governor Kasich used line-item veto authority to strike the cost expansion legislation contained in the state budget bill earlier this year but that will not deter the General Assembly from trying it again. In response to member concerns, the OMA formed a work group for manufacturers to study the issue and advocate industry concerns against any such proposal. See attached resource material.
Aside from a possible law change, a proposal is pending before the PUCO to grant utility cost recovery for the same thing. The legislation stems from Duke’s gas distribution case seeking recovery for Cincinnati area plant. The OMA Energy Group has intervened in the case.
Severance Tax -- Shale Gas Governor Kasich’s proposals to modernize the state severance tax (collected when oil and gas is extracted from the state) foundered twice in the wake of opposition from legislative Republicans; first in 2012 and again in 2013 in the context of the Governor’s budget proposal.
Page 30 of 142 An OMA work group comprised on OMA energy committee representatives evaluated these proposals and made recommendations to the OMA Board of Directors. Look for the issue to return.
“On-Bill” Financing of Efficiency Projects A proposal by the environmental defense fund and supported by one regional business group calls for using utility bills as a place to make payments on capital loans to finance energy efficiency projects. See attached resource material, “on-bill financing”.
Pipeline Tax Break? Ohio has seen billions of dollars in system upgrades stemming from Ohio’s proximity to shale gas production and gas markets. Various projects have been spotlighted at prior committee meetings. One company has expressed interest in changes to the state’s tax structure to provide financing incentives. See resource materials. OMA Tax Committee will also consider the issue at the November 12 meeting.
Notables Watch both PUCO action and General Assembly action on state policy governing electricity reasonable arrangements. The PUCO recently acted on a reasonable arrangement for ORMET (AEP) and has opened a case for Republic Steel (FirstEnergy). HB 312 would require all investor owned utility customers to cover costs rather than only customers in a utility service territory. HB 319 will create a new rider for gas utilities for infrastructure development.
Page 31 of 142 Energy
New Fact Sheet on Senate Bill 58, the Energy Consumers’ Council Testifies Against Senate Bill Policy Rewrite Bill 58
Senate Bill 58 seeks to overhaul Ohio’s energy Bruce Weston, the Ohio Consumers’ Council, testified efficiency policy, standards and requirements, which against Senate Bill 58, a bill which proposes broad among other things require each electric utility in Ohio changes to Ohio’s electricity statutes. Weston said to reduce demand by 22.5 percent by 2025 by the bill “makes energy efficiency more costly for Ohio working with customers to deploy energy efficiency consumers and more profitable for Ohio utilities.” projects. Under the bill, the council calculates that “customers OMA opposes Senate Bill 58 as its analyses will pay the utility over $22 in lost revenues for every demonstrate the provisions unjustifiably compact florescent light bulb that is installed as part overcompensate electric utility companies, eliminate of a utility's energy efficiency program. For a longer important consumer protections and will drive up lasting LED bulb of similar wattage, our calculations electricity costs for all customers for many years to are that consumers will pay more than $54 in lost come. revenues per bulb.”
Third-party studies commissioned by the OMA have Weston said “The bill diminishes the PUCO's authority shown that utilities are achieving the energy-reduction to balance the interests of customers and utilities in benchmarks and customers are saving money – and the ratemaking process, and increases the utilities' that continued compliance with Ohio’s Energy control over these issues.” 10/17/2013 Efficiency Resource Standards from 2010 through 2020 could yield almost $5.6 billion in actual and House Introduces Companion to Senate Energy projected savings for Ohio electricity consumers, Law Rewrite
If enacted in its current form, Senate Bill 58 could wipe out as much as $2.56 billion in net projected Rep. Peter Stautberg (R-Cincinnati) this week savings from energy efficiency from 2014 through introduced House Bill 302, nearly identical legislation 2020 and drive up electricity prices for all ratepayers, to Senator Seitz's energy policy overhaul, Senate Bill give utilities a guaranteed 33 percent profit on the net 58. Rep. Stautberg chairs the House Public Utilities benefits, while also eliminating numerous important Committee and has scheduled a hearing on the bill for consumer protections and opportunities for next Wednesday. stakeholder input currently included in the PUCO hearing process. Here’s a fact sheet. 10/31/2013 The OMA opposes Senate Bill 58. 10/18/2013
Understanding Capacity Costs & Controlling Your OMA Opposes Sub. Senate Bill 58 Cost of Electricity The OMA has taken a position to oppose Substitute Capacity is a cost component of the electric Senate Bill 58, as currently drafted. Here is an price. Today it accounts for around 5% of the cost. In executive overview of the bill. The bill proposes an the coming years it will increase to over 20% for most extensive rewrite of the state’s energy policy. The bill businesses in Ohio and nearly 45% for businesses makes significant changes in the method of utility located in FirstEnergy territory. compensation, the energy efficiency and demand response standards, the renewable and advanced energy standards, the assets that might be bid into There is something electricity consumers can do regional capacity auctions, and the ability to opt-out of about this: Understanding where these costs derive the energy efficiency rider. from and controlling usage during summer peaks will help mitigate capacity obligation and lower electric costs. This recorded OMA webinar with subject The bill is complex in its drafting and in the interaction matter expert, Scioto Energy, has the of its various provisions. The OMA has retained details. 10/21/2013 expertise to help it to fully understand the bill’s impact on Ohio manufacturing. Various analyses are still in process, and will be shared with members as completed. The bill will increase costs for Ohio manufacturers, and over-compensate utilities, now
and into the future.
Page 32 of 142 Meanwhile, there are problems in the operation of the about a bad idea that’s being considered in the state’s energy policy. The OMA is developing Statehouse. This particular bad idea would make statutory recommendations to address those gas company ratepayers pay the full cost of problems, including: larger electricity users are more environmental remediation of old, unused vulnerable to the cost and volatility of the energy manufactured gas plants. riders, and PUCO regulations should ensure cost- effective operations of the efficiency programs. One form of this idea would blow up the regulatory “used and useful” concept as applied to these OMA's contact on the issue is Ryan plants. Under that consumer protection standard, Augsburger. 10/10/2013 ratepayers don’t pay for things that aren’t used and useful to them. These manufactured gas plants are Oct. 17 Webinar to Give Electricity Cost Advice not. Ratepayers should not pay for the remediation of the plants. An unprecedented number of power plant closure announcements in the Midwest have caused future And, it would be a really bad precedent. 10/3/2013 capacity rates to rise significantly. The impact of these increases will be felt by most Ohio manufacturers OSU Study Quantifies Savings from Energy starting in June 2014 with another increase to come in Standards June 2015. A study by the Ohio State University Center for Customers of all Ohio investor-owned utilities will be Resilience says Ohioans saved 1.4% on their affected to one degree or another. Understanding electricity bill since 2008 due to the renewable and energy efficiency standards enacted that these increases and your options will be the focus of year. Average annual savings are estimated at about this webinar on Thursday, October 17 at 10:00 $300 million. a.m. Presented by the OMA in conjunction with subject matter expert, Scioto Energy. 10/7/2013 In performing the study, OSU researchers used a model called Dynamic Energy-Economic Policy OMA Members Invited to 2013 Fuel Cell Seminar & Simulation (DEEPS). OSU developed DEEPS for the Energy Exposition State of Ohio, in collaboration with the Consortium for Energy, Economics and the Environment at Ohio The Ohio Fuel Cell Coalition (OFCC) will host the University. The study was commissioned by 10/3/2013 2013 Fuel Cell Seminar & Energy Exposition Advanced Energy Economy Ohio Institute. (FCS&EE) October 21-24 at the Greater Columbus Convention Center. Energy Policy Rewrite Bill Released
OFCC is a group of industry, academic, and Senator Bill Seitz (R-Cincinnati) this week released a government leaders working to strengthen Ohio’s fuel rewrite of his Senate Bill 58, which has been the cell industry and accelerate the state’s transformation subject of hearings for months. The senator aims to into a global leader in fuel cell technology. This event make major changes to the state’s electricity policies is the premier international gathering of fuel cell and established by Senate Bill 221 (developed under hydrogen energy industries and their customers and Governor Strickland five years ago) and updated last stakeholders. year by Senate Bill 315 (developed under Governor Kasich’s leadership last year). OMA members are invited to Public Day at the FCS&EE on Wednesday, October 23, noon - 5:30 Also this week, the OMA released a report on a cost- p.m., where members can tour the exhibit hall, drive a benefit analysis of (and a media statement on) the fuel cell powered car, and be briefed on fuel cell impact on the state’s energy efficiency standards on technology through a Fuel Cells 101 short course. manufacturers’ electricity bills. The analysis shows a price suppression benefit for all types of To attend Public Day at no charge, contact OFCC manufacturing operations, large to small, that Executive Director, Pat Valente. 10/9/2013 outweighs the cost of the utility riders that support the energy efficiency programs. That is, the energy Manufacturers at Statehouse: Don’t Load More efficiency programs are saving all manufacturers money on their electricity bills. Costs on Ratepayers
The analysis shows that large electricity users receive A team of about a dozen OMA members visited the least benefits (and need some type of protection), legislative leaders and the governor’s staff to talk
Page 33 of 142 and that riders have had an unacceptable level of rider is needed to maintain its “financial integrity” due volatility over the years and across the state. The to customers that switch service to competitive OMA will seek to address those issues in the generation providers (shoppers). DP&L also legislature and PUCO. requested a new “switching tracker” charge to compensate it for lost revenues resulting from The OMA is analyzing the new version of Senate Bill customers that switch providers. 58, and will have it available for you next week. 9/26/2013 The PUCO authorized an SSR of $110 million per year for 2014, 2015, and 2016, which is $27.5 million Ormet Requests for More Electricity Subsidies a year less than DP&L’s initial request, but still significantly higher than DP&L’s current $73 million annual rate stabilization charge (RSC), which will be Ormet Corporation, an aluminum smelter in Hannibal replaced by the SSR. (on the Ohio River in eastern Ohio) is seeking permission for increased electricity discounts from The PUCO denied DP&L’s request for a switching AEP-Ohio. The Public Utilities Commission of Ohio tracker and denied, or significantly limited, other (PUCO) had previously approved a “unique requested riders that would have any significant arrangement” to reduce Ormet's cost of electric impact on manufacturers. Finally, similarly to services from 2010 through 2018. To date, the previous approved corporate structures for other Ohio subsidy has saved Ormet more than $150 investor-owned utilities, DP&L will separate its million. AEP-Ohio recovers the costs of this generation and transmission assets and become a arrangement through a rider charged to all customers distribution-only utility. in its service territory.
Here is a summary from OMA energy counsel, Bricker Earlier this year, Ormet filed for Chapter 11 & Eckler. 9/12/2013 bankruptcy. Shortly after filing bankruptcy, Ormet signed an Asset Purchase Agreement with Smelter Acquisition, LLC. The agreement is subject to certain Portman’s Leadership on National Energy Policy conditions, including satisfactory amendments to Getting Results Ormet’s unique arrangement. This week, Ohio Senator Rob Portman delivered Ormet claims that emerging from bankruptcy is remarks on the Senate floor highlighting his bipartisan contingent upon the PUCO approving its request in a Energy Savings and Industrial Competitiveness Act, timely manner. Politicians and labor leaders, seeking an energy efficiency bill he introduced with U.S. to protect the Ormet jobs, are urging PUCO approval Senator Jeanne Shaheen (D-NH). of additional subsidies, as reported by the Intelligencer / Wheeling News Register and the Times The OMA sent the senator its support in a letter Leader. saying: “Passage of the Shaheen-Portman energy legislation is a critical first step that will put The OMA Energy Group has intervened in the case at Washington on a balanced energy diet by adopting the PUCO to protect manufacturing energy-saving systems and best practices that make ratepayers. 9/19/2013 its operations more efficient and save taxpayer money and dollars for families nationwide.” The bill is an PUCO Approves Rate Plan for Dayton Power and important step toward more comprehensive national Light Company energy policy reforms.
Watch Portman’s floor remarks. 9/12/2013 Last week, the Public Utilities Commission of Ohio (PUCO) approved an electric security plan (ESP) for the Dayton Power and Light Company (DP&L) for Regional Energy Learning Events January 1, 2014 through May 31, 2017. The plan establishes generation rates or, alternatively, the Here's a couple opportunities for those responsible for default pricing for customers who do not shop in managing energy and learning about new DP&L’s service territory. applications.
Among the various non-bypassable riders DP&L America's Natural Gas Alliance invites you to the requested, the rider of most significant concern to Think About Energy Summit at the Columbus manufacturers is the service stability rider Convention Center on September 16-17. This event (SSR). DP&L requested an SSR of $137.5 million will feature national and local experts discussing how annually for a period of five years, arguing that this natural gas is changing our nation’s energy
Page 34 of 142 landscape, with a specific focus on: power generation, FirstEnergy Solutions Customers: Recent Bill transportation, industrial use of natural gas, pipeline Increases? Here's Potentially Why infrastructure, and more. FirstEnergy Solutions (FES) customers could be The Consortium for Energy, Economics and the seeing an increase in transmission charges of 17% or Environment (CE3) at the Ohio University Voinovich so as a result of AEP’s “NITS” rates jumping from School offers A Workshop for Efficiency, Emissions $75.15/MW-day to $87.75/MW-day in July. and Energy Choices in Ohio, a one-day workshop on September 27 in Columbus to help Ohio stakeholders achieve their energy cost-savings and emissions Here is an explanation of NITS (also known as SDI goals. There are two tracks: 1) efficiency & emissions transmission tags) and how they are calculated. and 2) shale energy. 9/5/2013 NITS charges are imposed by the utility on AEP-Ohio Holding Energy Efficiency Auction for deregulated suppliers. So, AEP is now charging all of Financial Incentives its deregulated suppliers an additional fee for NITS, and FES has elected to pass this charge through to customers. 8/16/2013 AEP-Ohio will be run a reverse auctions for very large energy-efficiency projects on October 9th and has Renewable Resources are Suppressing Ohio more planned for 2014. Wholesale Prices
The auctions could allow manufacturers with large energy efficiency projects to receive greater The staff of the Public Utilities Commission of Ohio incentives than they might qualify for under AEP's has run an analysis “to quantify the changes in custom energy efficiency program. More than $3.25 wholesale electricity prices and generator emissions million in incentives will be available. that are likely to occur as a result of the state’s Alternative Energy Portfolio Standard (AEPS) requirements.” Meanwhile, the reverse auction process ensures AEP acquires efficiency at a competitive rate, thus protecting customers. The findings? The renewable resources deployed under the portfolio standard are suppressing wholesale prices, benefiting the state’s electricity Projects can be bid individually or bundled, but must consumers. Through the effect of all Ohio Power result in at least 3,000,000 kWh/year in savings. Siting Board-approved renewable projects, wholesale Projects scheduled to be completed in 2013 could prices are reduced by approximately 0.51%, or just fetch a premium incentive. Projects planned for over one half of one percent, according to the staff 2014/15 can be bid into the auction as well. modeling.
Contact OMA's energy-efficiency engineering The staff wrote: “The economic theory that drives consultant, John Seryak, to learn more and to seek price suppression is actually quite simple. Renewable support to bid projects into the auction. Also, visit resources such as solar and wind are essentially zero AEP Energy Efficiency Auction. 8/22/2013 marginal cost generators, as their “fuel” costs (sunlight and wind) are free. As such, they will always Utica Shale Triggering Wealth Creation be dispatched first by the grid operator, thereby displacing units with higher operating costs. This Dr. Ned Hill and team at Cleveland State University results in lower wholesale market clearing prices than track the economic impacts of the developing Utica would have been experienced in the absence of the renewable resources.” 8/15/2013 shale play. This quarter’s “Ohio Utica Shale Gas Monitor” groups Ohio’s counties into four categories: strong shale, moderate shale, weak shale, and non- shale counties. The report finds that “strong shale counties are experiencing ongoing enhanced economic activity with job creation that, while slim, outpaces hiring in other areas of the state. “ 8/22/2013
Page 35 of 142 Energy Legislation Prepared by: The Ohio Manufacturers' Association Report created on November 11, 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: 10/31/2013 - SIGNED BY GOVERNOR
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: 6/25/2013 - House Agriculture and Natural Resources, (First
Hearing)
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: 6/25/2013 - House Agriculture and Natural Resources, (First
Hearing)
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: 6/30/2013 - SIGNED BY GOVERNOR; Eff. 6/30/2013; Some Eff.
9/29/2013; Others Various Dates
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
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_63
HB93 OIL AND GAS LAW (HAGAN R) 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: 6/25/2013 - House Agriculture and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_93
HB102 NATURAL GAS POLICY (ROEGNER K) To change state policy regarding natural gas competition, to require assessments on retail natural gas suppliers for subsidies granted in
Page 36 of 142 retail auctions, and to require the assessments to be distributed to nonmercantile customers. Current Status: 3/19/2013 - Referred to Committee House Public Utilities
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_102
HB124 OIL-GAS BAN-LAKE ERIE (ANTONIO N) To ban the taking or removal of oil or natural gas from and under the bed of Lake Erie. Current Status: 6/25/2013 - House Agriculture and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_124
HB148 OIL AND GAS LAW (DRIEHAUS D, HAGAN R) To prohibit land application and deep well injection of brine, to prohibit the conversion of wells, and to eliminate the injection fee that is levied under the Oil and Gas Law. Current Status: 6/25/2013 - House Agriculture and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_148
HB312 ELECTRIC LIGHT COMPANY-JOB RETENTION PROGRAM COSTS (JOHNSON T) To permit a public utility electric light company to recover costs of an economic and job retention program from all public utility electric light customers in Ohio. Current Status: 10/30/2013 - Referred to Committee House Public Utilities
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_312
HB319 INFRASTRUCTURE DEVELOPMENT RIDER-GAS COMPANIES (GROSSMAN C) To permit natural gas companies to apply for an infrastructure development rider to cover costs of certain economic development projects. Current Status: 10/30/2013 - Referred to Committee House Public Utilities
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_319
HB336 GASEOUS FUEL VEHICLE CONVERSION PROGRAM (O'BRIEN S, HALL D) To create the Gaseous Fuel Vehicle Conversion Program, to allow a credit against the income or commercial activity tax for the purchase or conversion of an alternative fuel vehicle, to reduce the amount of sales tax due on the purchase or lease of a qualifying electric vehicle by up to $500, to apply the motor fuel tax to the distribution or sale of compressed natural gas, to authorize a temporary, partial motor fuel tax exemption for sales of compressed natural gas used as motor fuel, and to make an appropriation. Current Status: 11/6/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_336
HCR9 KEYSTONE XL PIPELINE (ADAMS J) To urge the United States Department of State to approve the presidential permit application allowing the construction and operation of the TransCanada Keystone XL Pipeline between the United States and Canada. Current Status: 4/9/2013 - Referred to Committee Senate Public Utilities
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HCR_9
HCR30 COAL ACCOUNTABILITY AND RETIRED EMPLOYEE ACT (CERA J) To urge Congress to enact the Coal Accountability and Retired Employee Act. Current Status: 10/15/2013 - House Agriculture and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HCR_30
Page 37 of 142 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
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: 10/9/2013 - Senate Public Utilities, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_34
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: 6/19/2013 - SUBSTITUTE BILL ACCEPTED, Senate Energy
and Natural Resources, (First Hearing)
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: 11/13/2013 - Senate Public Utilities, (Sixth Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_58
SB59 EDUCATION ENERGY COUNCIL (BEAGLE B) To authorize an eligible regional council of governments to establish itself as an education energy council for the purpose of issuing debt to pay for school district energy purchases. Current Status: 9/25/2013 - Senate Public Utilities, (Third Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_59
SB87 OIL/NATURAL GAS-LAKE ERIE (SKINDELL M) To ban the taking or removal of oil or natural gas from and under the bed of Lake Erie. Current Status: 10/29/2013 - Senate Energy and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_87
SCR7 KEYSTONE XL PIPELINE (HITE C) To urge the United States Department of State to approve the presidential permit application allowing the construction and operation of the TransCanada Keystone XL Pipeline between United States and Canada. Current Status: 4/17/2013 - ADOPTED BY HOUSE; Vote 90-7
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SCR_7
SCR25 GREEN BUILDING RATING STANDARDS (UECKER J) To urge, for Ohio state agencies and other government entities, the use of green building rating systems, codes, or
Page 38 of 142 standards that are consistent with state energy efficiency and environmental performance objectives and policies and that meet American National Standards Institute voluntary consensus standard procedures. Current Status: 11/6/2013 - Referred to Committee Senate Energy and Natural
Resources
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SCR_25
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SB 58: Bad for Ohio Manufacturers
Key Talking Points
• Energy efficiency is a low-cost strategy for constraining manufacturers’ electricity costs and helping to mitigate price volatility in a competitive marketplace where electricity prices are set by auction rather than through regulation.
• Third-party studies show that Ohio’s current Energy Efficiency Standards (“standards”) are working as intended. Utilities are achieving the energy-reduction benchmarks and customers are thereby saving money. Direct and indirect financial benefits outweigh the cost of the energy efficiency riders.
• By radically overhauling and weakening the standards, SB 58 could wipe out $2.5 billion in projected savings from energy efficiency and increase electricity costs for manufacturers for years to come.
• SB 58 undermines the intent of the standards by enabling utilities to “count” new categories of efficiency that add no value for customer and produce no additional direct or indirect energy savings. This will make it easier for utilities to meet the targets without doing anything to reduce demand for power and achieve real energy savings.
• SB 58 provides unprecedented, unjustifiable energy efficiency cost recovery for utilities – four to five times higher than Ohio’s normal utility rates of recovery, and among the highest in the nation. Utilities will be guaranteed a 33% profit on net benefits regardless of whether they meet the energy efficiency standards or not.
• SB 58 severely limits utilities’ ability to bid energy efficiency – which functions as a generation asset – into regional capacity auctions and thereby suppress wholesale prices for electricity (as currently is occurring). This will lead to higher wholesale prices.
• SB 58 reduces important consumer protections and limits the ability of the Public Utilities Commission of Ohio (PUCO) and ratepayers to keep rates reasonable over time. By codifying into law many provisions that should be negotiated on a case-by-case basis through the PUCO hearing process and based on current circumstances, the bill limits the PUCO’s discretionary authority, its ability to receive stakeholder input and its flexibility to adapt to changing circumstances.
• As with any five-year-old law, current law has room for improvement, but SB 58 is the wrong mechanism for achieving that objective.
# # #
Page 71 of 142 Page 72 of 142 Page 73 of 142
November 13, 2013
TO: The Honorable John Kasich, Governor The Honorable William Batchelder, Speaker of the House The Honorable Keith Faber, Senate President The Honorable Tracy Maxwell Heard, House Minority Leader The Honorable Eric Kearney, Senate Minority Leader
Dear Governor Kasich, Speaker Batchelder, President Faber, Leader Heard and Leader Kearney:
We the undersigned submit this letter to you to voice our deep concerns about, and opposition to, efforts to modify and weaken Ohio’s longstanding “used and useful” utility rate-making legal standard.
Parties seeking this change are doing so for the purpose of allowing the Public Utilities Commission of Ohio (PUCO) to authorize natural gas utilities to charge customers for costs associated with the environmental clean-up of obsolete manufactured gas plants (MGPs). If successful, these efforts could lead to massive cost- shifting that would require customers who have received no utility service and no benefit from long-closed MGP sites to pay up to hundreds of millions of dollars in clean-up costs for such sites.
We urge instead continued adherence to Ohio’s traditional rate-making standards, including the “used and useful” principle that has served Ohio well and protected consumers for decades, as well as the current practice of allowing the PUCO to address cost-recovery on a case-by-case basis. In setting just and reasonable rates for consumers, the PUCO should only grant utilities recovery of clean-up costs that are prudently incurred and associated with property that is currently used and useful in providing utility service to Ohio customers.
If state policymakers for any reason determine that changes to the longstanding “used and useful” principle are needed, we strongly urge a very narrowly tailored exception to Ohio’s traditional rate-making standards – not a substitution for those standards.
Our companies support reasonable public policies that promote environmental clean-up. We are concerned, however, about any proposal that would allow a public utility to pass unlimited costs on to customers without having appropriate consumer protections in place that exist today. In the event that statutory revision is to be considered, we hope it would be considered free-standing of other legislation. Thank you.
Sincerely,
Ward J. (Tim) Timken Jane Neal Eric Hauge Edward J. Roth III Chairman of the Board Senior VP & General Manager VP & General Manager President & CEO The Timken Company AMG Vanadium ArcelorMittal Cleveland Aultman Health
Michael Robinson Eric Roegner Bart Eddy Bryan Vaughn VP, Sustainability & Reg. Affairs COO Alcoa Investment Castings VP, Corn Milling North America President General Motors Alcoa Cargill PRO-TEC
Gabby Bruno Emily Petrovich Brenda Schulz Jeff Fritz Ford Motor Company US Steel Nucor DuPont
cc: Ohio General Assembly Members, JobsOhio, PUCO Staff, OCC
Page 74 of 142 To: OMA Government Affairs Committee From: Ryan Augsburger / Rob Brundrett Re: Environment Policy Update Date: November 13, 2013
Overview The General Assembly returned to work in late September. They had been on summer break since passing the state budget in late June. Ohio EPA has not played a significant legislative role this General Assembly. Most of the agency’s action has taken place in the regulatory arena. There is still a slight chance Director Nally is going to introduce a solid waste rewrite bill, however the later we get into the fall, the less likely that appears.
General Assembly News and Legislation House Bill 59 – State Operating Budget The state budget bill passed in late June. It was introduced in early February and went through several amended versions before the House and Senate voted to approve the conference committee report that was submitted. Ohio EPA originally had a couple of provisions that Director Nally was excited to pursue including asking the General Assembly to authorize the Director on behalf of the state to apply to the US EPA for Ohio 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. This provision was removed early in the bill writing process and was not reinserted despite the agency’s best efforts.
The bill does cover several areas of environmental law including: • Hazardous waste clean-up fund • Scrap tires • Alternative fuels for school buses • The bill still outlines requirements for federal grant money for nonpoint source water pollution management. • Several measures updating current fee language.
The Senate also included an amendment in the budget that would eliminate the 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 if they self-report. The law was set to sunset January 1, 2014.
Attached to this summary is the Ohio EPA final bill analysis where you can learn more on each of these provisions.
House Bill 12 House Bill 12 was introduced earlier this year by Representative Roegner (R-Hudson). The introduced bill would ease the state’s boiler operator laws. The bill would have eliminated the licensed operator requirement for gaseous fuel and fuel oil fired boilers that comply with certain safety and engineering standards.
Page 75 of 142 The two types of boilers that would have been 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
The House of Representatives amended the bill so that it now requires the Board of Building Standards to adopt rules to prescribe the conditions and requirements for an automatically operated boiler directly fired with gas, oil, gas-oil, or electricity or for a stationary steam engine that would allow an owner to operate a low pressure steam boiler, power boiler, or stationary steam engine without the presence of a licensee under the Boiler Law.
The Senate passed the bill earlier this month.
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.
The agency appears to be stuck in phase II of the project, and continues to work on gathering some sort of consensus before moving forward. Phase III, which was supposed to have started this summer would be to issue a proposal for final feedback. Then we would see a legislative effort by the agency to pass the proposal.
LEED Standards This month state Sen. Joe Uecker (R-Miami Township) and Sen. Tim Schaffer (R-Lancaster) introduced Senate Concurrent Resolution 25 which urges Ohio state agencies to build green and energy efficient buildings that meet American National Standards Institute voluntary consensus standard procedures, instead of the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) (version 4) green building standards.
There has been some controversy with the version 4 LEED standards within some sectors of the manufacturing community.
Regulations Beneficial Use Ohio EPA has been working on new beneficial use draft rules for almost one year. Last summer they began asking for feedback and comments through the early stakeholder process. In the winter they held a series of interested party meetings to inform stakeholders on the process the agency was leaning toward. This summer the agency released draft conceptual language and an updated beneficial use concept paper.
Page 76 of 142 The agency has not issued any new updates regarding this effort since it released the draft conceptual language earlier this year. They had hoped to get a final draft for interested party review by the end of the year, but that timeframe appears to be a bit aggressive at this point.
Universal Waste At the end of last year Ohio EPA was soliciting comments through the early stakeholder outreach program on the expansion of universal waste in Ohio. The agency is examining on whether additional hazardous wastes should be designated as universal wastes and specifically if hazardous waste aerosol cans and spent antifreeze should be designated universal wastes. The OMA submitted initial comments on this topic requesting certain paint and paint related wastes. Best Available Technology This summer, Ohio EPA published notice of proposed revisions to its air pollution Best Available Technology (BAT) program. The litigation-delayed changes are intended to align Ohio’s BAT program with the law enacted in the OMA-advocated Senate Bill 265 in 2006. Ohio EPA had delayed making many of these changes while the court system heard and eventually allowed the ten-ton BAT rule, which permits the Ohio EPA to issue permits to sources that produce less than ten tons of emissions per year without first determining whether those sources will employ BAT. While the changes are not expected to impact members much, the OMA submitted coordinated comments the Ohio Chamber and Chemistry Council.
Startup Shutdown Malfunction Earlier this year the U.S. EPA proposed a state implementation plan call that requires 36 states including Ohio to revise their laws governing emissions associated with emission unit or control device startups, shutdowns and malfunction events.
The EPA is attempting to find the middle ground between the Sierra Club and industry by proposing that states are prohibited from allowing blanket exemptions for SSM events or affirmative defenses for emissions associated with startup and shutdown but would allow affirmative defenses for malfunctions.
The OMA partnered with the Chemistry Council and Ohio Chamber to comment on this call and Ohio EPA has submitted its own comments with align with Ohio industry.
Water Nutrient Work Group Ohio EPA has been working on reducing the amount of nutrients that enter in Ohio’s waterways. Attached to this report includes the agency’s water nutrient reduction plan. They recently announced an ad hoc group that is going to work together to try and responsibly address this issue. Earlier this year Ohio EPA sent out an Early Stakeholder Outreach document to gather comments from interested parties. This group is the next step in attempting to address this issue.
Agency Notes George Elmaraghy Resigns Long time Ohio EPA staffer George Elmaraghy resigned in September. Mr. Elmaraghy was most recently chief of the division of surface water at Ohio EPA. According to several reports Mr. Elmaraghy resigned over issues regarding permits. Ohio EPA has not yet named a permanent replacement but if your company has been dealing with Mr. Elmaraghy on any issues please note the change.
Page 77 of 142 Environment
Senators Introduce Resolution Urging Ohio Away U.S. Supreme Court Agrees to Hear Greenhouse from LEED Standards Gas Cases
This week state Sen. Joe Uecker (R-Miami Township) Last week the U.S. Supreme Court agreed to hear and Sen. Tim Schaffer (R-Lancaster) several appeals to various appeals related to introduced Senate Concurrent Resolution 25 which greenhouse gas emissions (GHGs). Several petitions urges Ohio state agencies to build green and energy for hearing were consolidated and the court agreed to efficient buildings that meet American National hear the cases under a single question, “Whether Standards Institute voluntary consensus standard EPA permissibly determined that its regulation of procedures, instead of the U.S. Green Building GHG emissions from new motor vehicles triggered Council's LEED (Leadership in Energy and permitting requirements under the Clean Air Act for Environmental Design) (version 4) green building stationary sources that emit GHGs.” standards. The Court’s ruling could profoundly impact EPA’s The LEED standards have come under criticism for permitting of GHGs. OMA environment counsel lack of rigor and questionable environmental benefit. Frank Merrill put together this memo for OMA members on the issue. 10/24/2013 Here is, in part, how the resolution critiques LEED v4: "WHEREAS, The U.S. Green Building Council's OMA Environment Committee Gathers (USGBC) LEED v4 green building system fails to conform to recognized voluntary standard The OMA Environment Committee gathered this week development procedures, including but not limited to to discuss the major environmental issues effecting American National Standards Institute (ANSI) Ohio manufacturers. OMA members Randy Puckett procedures, and fails to base environmental and from Campbell’s Soup and Bryson Cole health criteria on risk assessment methodology from Anheuser-Busch, gave presentations to the ..." 11/7/2013 group on what their respective companies are doing in regards to sustainability. Pepperidge Farm and Ohio EPA Team Up to Expedite New Permits The members also heard from the Department of Natural Resources including an update on the oil and Cooperation and communication were key ingredients gas drilling in eastern Ohio and what the Department used by OMA member, Pepperidge Farm, and the is doing to ensure no adverse impacts to Ohio’s Ohio EPA to ensure six necessary permits were environment. 10/24/2013 received on time to support the manufacturer's $93 million, 227,000-square-foot plant expansion to install Court Rules Company with Air Permit has a new Goldfish® cracker production line. Fifty new Nuisance Claim Exposure jobs are expected.
This summer, the Federal 3rd Circuit Court of Appeals One of those permits was to change the oven heat held that the Clean Air Act does not preempt state source from thermal oxidizers to catalytic oxidizers, nuisance claims. which are proposed to be installed in 2014. This will result in a significant reduction in fuel consumption, making the facility more energy efficient. In the case, Bell v. Cheswick Generating Station, originating out of Pennsylvania, the court ruled that although a power plant was operating under the This week Ohio EPA Director Scott Nally toured the proper permits, those permits do not preclude citizens facility in Willard. from suing if their properties are affected. The court stated that the Clean Air Act is simply the floor for Pepperidge Farm engaged Ohio EPA to ensure the operations and that it does not preclude a company project would be in compliance with all environmental from going above and beyond what the Act regulations. The cooperative approach benefited both requires. Thus, such companies are not protected parties by helping Ohio EPA understand the from nuisance lawsuits. company’s business plans, which contributed to meaningful discussion regarding the While Ohio is not in the 3rd Circuit and the holding is permits. 10/31/2013 not binding on the 6th Circuit in Ohio, it could still be influential and cited as persuasive authority in future cases in the district. This case could theoretically
Page 78 of 142 open up Ohio companies to common law and EPA to Award Recycling Grants statutory tort claims previously thought protected under their permits via the Clean Air Act. Ohio EPA will soon be accepting applications for the 2014 Recycling and Litter Prevention Grants which Concerned members will want to attend the October are awarded competitively to organizations to 24th OMA environment committee to learn more on implement recycling, recycling market development, the topic from OMA environment counsel, Frank litter prevention, and scrap tire recycling programs. Merrill of Bricker & Eckler. Here's a summary Frank drafted. Register at MyOMA. 10/10/2013 There will be an informational meeting on the grant application process on Thursday, Oct. 3, 2013 at U.S. EPA to Keep Pushing Carbon Limits 10:00 a.m. at the Ohio Department of Transportation, 1980 W. Broad Street, Columbus, in the Last week U.S. EPA Administrator Gina auditorium. No registration required, however, those McCarthy announced that the Obama administration attending should bring a photo ID. Or, contact, Chet would press ahead to enact federal carbon limits on Chaney, Ohio EPA Grants Administrator, at (614) power companies. 728-0043. 9/19/2013
The plan would limit new gas fired power plants to New Climate Report from Jones Day 1,000 pounds of carbon dioxide emissions per megawatt-hour and new coal plants to 1,100 pounds OMA Connections Partner, Jones Day, has just of carbon dioxide. published its Summer 2013 Climate Report which has good summaries of U.S. regulatory developments, McCarthy also announced a yearlong listening tour to climate change issues for management, and climate gather input from various groups to help the agency change litigation updates. 8/22/2013 determine limits on existing power plants. Slag Rocks! (video) Reaction to these proposals has been quick and fierce from Congressional Republicans vowing to Here's a new 3-minute video from the iron and steel prevent the agency from acting. 9/26/2013 industries about the sustainability and versatility of slag. Ohio EPA Opens Comment Period on Hazardous Waste Rules The Ohio Steel Council and the Ohio EPA met this week to share information about Ohio slag products The Ohio EPA Division of Materials and Waste and markets. 8/16/2013 Management (DMWM) announced an Early Stakeholder Outreach comment period regarding the Ohio EPA Lays Out Glass Recycling Plan of hazardous waste rules known as Subpart AA, BB and Action CC rules to be addressed in Ohio rulemaking. This week Ohio EPA hosted a stakeholder meeting to Certain hazardous waste treatment, storage and present its statewide glass recycling "Plan of Action," disposal facilities and large quantity generators of which focuses on creating sustainable market-based hazardous waste will be subject to these new Ohio solutions for increased glass recycling in Ohio. rules, as they are already subject to the existing federal rules. The rules address air emissions from tanks, containers, surface impoundments, and The plan includes establishing nine glass recovery process equipment that are used in the management centers around the state, providing grant funding to of organic hazardous waste. new or expanding glass recycling initiatives at Ohio restaurants, bars, and hotels, and seed money to undertake a glass recycling awareness/education Ohio EPA has prepared this fact sheet. Comments campaign in Ohio. 8/8/2013 will be accepted through November 12, 2013.
This topic will be on the agenda of the October 24 OMA Environment Committee meeting. Rob Brundrett is your OMA contact. 9/19/2013
Page 79 of 142 Environment Legislation Prepared by: The Ohio Manufacturers' Association Report created on November 11, 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: 10/31/2013 - SIGNED BY GOVERNOR
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: 6/30/2013 - SIGNED BY GOVERNOR; Eff. 6/30/2013; Some Eff.
9/29/2013; Others Various Dates
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
HB93 OIL AND GAS LAW (HAGAN R) 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: 6/25/2013 - House Agriculture and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_93
HB148 OIL AND GAS LAW (DRIEHAUS D, HAGAN R) To prohibit land application and deep well injection of brine, to prohibit the conversion of wells, and to eliminate the injection fee that is levied under the Oil and Gas Law. Current Status: 6/25/2013 - House Agriculture and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_148
HB205 BRINE RECYCLING FEE (GERBERRY R) To authorize a fee on the recycling of brine from oil and gas operations to benefit local governments. Current Status: 6/25/2013 - House Agriculture and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_205
HCR29 EPA REGULATIONS (THOMPSON A) To urge the President of the United States to halt the Environmental Protection Agency's costly and harmful pursuit of regulations that restrict fuel diversity for electricity generation and to pursue new fuel diversity policies. Current Status: 10/15/2013 - REPORTED OUT, House Agriculture and Natural
Resources, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HCR_29
SB59 EDUCATION ENERGY COUNCIL (BEAGLE B) To authorize an eligible regional council of governments to establish itself as an education energy council for the purpose of issuing debt to pay for school district energy purchases. Current Status: 9/25/2013 - Senate Public Utilities, (Third Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_59
Page 80 of 142
SB150 AGRICULTURAL ADDITIVES, LIME AND FERTILIZER LAW (HITE C, PETERSON B) To revise the law governing the abatement of agricultural pollution, to require a person that applies fertilizer for the purposes of agricultural production to be certified to do so by the Director of Agriculture, to provide for an agricultural pesticide-use category on commercial and private pesticide applicator licenses, and to make other changes to the Agricultural Additives, Lime, and Fertilizer Law. Current Status: 11/13/2013 - Senate Agriculture, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_150
SB178 DEEP WELL BRINE INJECTION (SKINDELL M) To prohibit land application and deep well injection of brine, to prohibit the conversion of wells, and to eliminate the injection fee that is levied under the Oil and Gas Law. Current Status: 10/29/2013 - Senate Energy and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_178
SCR9 ASIAN CARP (PATTON T) To urge the President of the United States and the Congress of the United States to take all actions necessary to prevent Asian carp from entering the Great Lakes, including Lake Erie. Current Status: 11/12/2013 - Senate Energy and Natural Resources, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SCR_9
SCR25 GREEN BUILDING RATING STANDARDS (UECKER J) To urge, for Ohio state agencies and other government entities, the use of green building rating systems, codes, or standards that are consistent with state energy efficiency and environmental performance objectives and policies and that meet American National Standards Institute voluntary consensus standard procedures. Current Status: 11/6/2013 - Referred to Committee Senate Energy and Natural
Resources
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SCR_25
Page 81 of 142 Page 82 of 142
June 28, 2013
(via email [email protected])
Michelle Braun Post Office Box 1049 Columbus, Ohio 43216-1049
Re: Comments from the Ohio Manufacturers’ Association to Ohio EPA Beneficial Use Regulatory Program Development (May 2013)
Dear Ms. Braun:
The Ohio Manufacturers’ Association (OMA) is hereby providing its written comments to Ohio EPA’s May 2013 “Early Stakeholder Outreach – Beneficial Use Regulatory Program Development” rule package and concept. OMA is dedicated to protecting and growing manufacturing in Ohio, and for more than 100 years, has supported reasonable, necessary, and transparent environmental regulations promoting the health and well-being of Ohio’s citizens.
The OMA, as a trade organization representing over 1,000 manufacturers throughout Ohio, appreciates Ohio EPA’s efforts in tackling the issue of regulating and authorizing the beneficial use of high volume, low toxicity waste materials. Certain members of the OMA and certain industries within the general manufacturing sector may have unique concerns with this rulemaking effort, and as a result, these comments, on behalf of the OMA in general, are being provided in a broader context allowing others to weigh in with specific concerns unique to their respective manufacturing processes.
In summary, the challenge we1 all face with these rules is how to develop a regulatory framework that encourages beneficial use of waste-like products while still maintaining adequate protection to the environment and human health. The OMA would like to emphasize the "encouragement" portion of this process. If the rules or requirements are too demanding or too complicated, they will have no "beneficial" use. So, for starters, OMA would like to caution Ohio EPA from over-complicating the issue. As currently drafted, the rule package includes some fairly stringent obligations and requirements that do not readily appear to be necessary, either for Ohio EPA or for the protection of the environment. If the requirements are too onerous without any corresponding purpose or benefit, there will be a disincentive for business to participate in the program, thereby defeating the purpose of the rule package, which is to encourage the beneficial use of industrial by-products in a safe and economical manner.
1 These rules should not only benefit the regulated community but are also in the best interests of Ohio EPA and the citizens of Ohio because they should encourage further reuse of valuable resources.
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A. Framework
The OMA suggests that the general framework be re-evaluated starting with what materials are subject to further regulation. Only "wastes" should be regulated. Ohio Rev. Code § 3734.01(E) defines "solid waste" as "unwanted" residual solid or semisolid material resulting from industrial, commercial, agricultural and community operations with specific exclusions, including nontoxic fly ash and bottom ash, spent nontoxic foundry sand, and slag. If a material or by-product is not "unwanted," it is not a waste. While Ohio EPA has previously indicated that the term "unwanted" is viewed from the perspective of the generator, even this limited interpretation means that if a generator "wants" the material or by-product, it is not a waste.
Therefore, if a material or by-product is sold in a commercially reasonable manner for value (e.g., slag), it is not "unwanted" by the generator, and should not be subject to further regulation under O.R.C. Chapter 3734 or O.R.C. Chapter 6111. There is no need to regulate the further disposition or use of such valuable material or by-product.
The beneficial use rules should only apply to true "wastes" to encourage their reuse in a constructive manner so as to avoid the costly and environmentally harmful landfilling of such waste streams. Even under Ohio EPA's interpretation, if a material or by-product is "unwanted" by the generator, the beneficial use of such material should still be allowed and encouraged to promote the "3 R's" (reduce, reuse, recycle), an underpinning of Ohio EPA's solid waste program.
B. Draft Rules
OMA strongly encourages Ohio EPA to drop the description of "select waste." The mere fact that these materials are going to be "beneficially used" takes them outside of the "waste" context. We suggest that the program be based on the reuse of "industrial by-products."
1. Exclusions
The program is currently set up to include three tiers, the first of which is pre-approved beneficial uses. We suggest that a new category (perhaps a Tier 0?) be incorporated into the rule package to clarify that certain industrial by-products are not "wastes" and are therefore exempt or excluded from further regulation. These materials include those discussed above that are not "unwanted" by the generator and are sold in a commercially reasonable manner in the stream of commerce. This concept could be incorporated into draft OAC 3745-599-10 ("Beneficial use - exclusion for select work incorporated into certain construction materials"), by revising the title to clarify that the listed materials are not wastes and are not regulated if sold in the stream of commerce. Clarification in this part of the rule would provide certainty to the regulated community
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that such materials are not regulated, which would encourage the greater beneficial use of such materials.
2. Tier 1 – Pre-Approved Uses
As noted above, the rules need to be simplified so as to promote the program's use. A rule needs to be drafted to address "Tier 1" materials. It is assumed that Ohio EPA has initially left OAC 3745-599-100 ("Pre-approval for beneficial use") blank or "reserved" for Tier 1 materials. This category should include those materials that are "unwanted" by the generator but wanted by the recipient, distributor or end user and are ultimately used in a manner constituting disposal (e.g., land application). There are many common applications of these types of materials that Ohio EPA has routinely approved under its Integrated Alternative Waste Management Program (IAWMP) (e.g., materials used as soil amendments).
This portion of the rule should identify what materials and uses are permitted and under what circumstances. The required testing (including intervals, parameters and acceptance levels) can be set forth in a separate rule. Since these are common applications widely accepted by both Ohio EPA and industry, the testing and recordkeeping should be simple and straight-forward. Inclusion of waste characterization and a waste analysis plan (WAP) is overkill for these types of materials.
3. Tier 2 – General Permits
The general permits also need to be simplified. The requisite testing and waste characterization can be set forth in the specific general permit. While some materials and uses may warrant more rigorous oversight, not all general permits should be burdened with all of these onerous requirements. Also, reporting of locations and amounts of disposition is unnecessary. If the material and use are approved, there is no reason to report where and how much.
OMA suggests that the following rules be deleted and, if necessary, aspects of these rules be customized for the particular material in the authorizing general permit:
1. 3745-599-40 Beneficial use – notice information for distribution. 2. 3745-599-45 Beneficial use – recordkeeping and reporting. 3. 3745-599-50 Select waste characterization and analysis plan.
Also, if an applicant qualifies for a general permit, there should be no need to wait for the Director’s written notification that the beneficial use is authorized. Similar to the stormwater general permits, coverage under the general permit should occur upon submittal of a “Notice of Intent” (NOI) to come under and comply with the general permit. The requirement to submit a NOI “not later than 60 days prior to the anticipated date of commencing beneficial use” of the material serves no useful purpose if one must
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still wait until the Director provides written authorization to qualify for the permit. Regardless of how much or how little advanced notice is given, an applicant can still not proceed under the permit until receipt of the Director’s authorization. Instead, the rule should be revised to require advance notice to Ohio EPA (e.g., 30 days) by filing a NOI to come under the general permit in question, but no need to wait for the Director’s authorization.
4. Tier 3 – Individual Permits
Finally, an individual permit is the appropriate place to require the more stringent oversight. These are materials and uses that are approved by the Director on a case- by-case basis, i.e., they are not common situations. Because they are not the typical situation, more protection may be warranted because of the unknown. Again, Ohio EPA should not burden common uses and materials with requirements that are only applicable to these unknown or unique situations. These should be handled in the individual permits.
If you have any questions regarding the foregoing or attached, please feel free to contact me or OMA's environmental counsel, Frank L. Merrill with Bricker & Eckler LLP (614-227-8871).
Sincerely yours,
Rob Brundrett Director, Public Policy Services Ohio Manufacturers’ Association
cc: Frank L. Merrill
6440312v1 Page 86 of 142 To: OMA Government Affairs Committee From: Ryan Augsburger / Rob Brundrett Re: Human Resources Update Date: November 13, 2013
General Assembly News and Legislation 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 • 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).
Medicaid Expansion The Governor initially tried to expand Medicaid in Ohio through the state budget bill. The General Assembly removed that language from the bill. They also inserted language that prevented the Governor from expanding Medicaid through administrative means. The Governor vetoed that language.
The General Assembly began introducing and working on different Medicaid reform bills however no real action took place in the summer and early fall. Finally Governor Kasich decided to push the measure through controlling board. After some political gamesmanship the controlling board approved expansion with a 5-2.
Some members of the General Assembly have sued regarding this maneuver. However Ohio is now one of the states that is currently working to implement an expanding Medicaid program.
Page 87 of 142 Human Resources
State School Superintendent Promotes Ohio Minimum Wage Increases January 1, 2014 Manufacturing Effective January 1, 2014, the Ohio minimum wage Dr. Richard Ross, Superintendent of Public will increase by 10 cents, from $7.85 per hour to Instruction, used his office to promote manufacturing $7.95 per hour. (The Ohio minimum wage for “tipped to the state’s education community. employees” will increase from $3.93 per hour to $3.98 per hour, plus tips.) Ross wrote: “We should begin working with local manufacturers to promote career options year-round If you are an Ohio employer with annual gross to our students. I urge your districts and schools to receipts of more than $292,000 (previously have middle and high school students tour a facility in $288,000), you must pay the Ohio minimum wage. If your community to see the opportunities available in you are an Ohio employer and your annual gross robotics and other kinds of high-tech, advanced receipts are $292,000 or less, then Ohio law requires manufacturing. Most students will be surprised to you to pay the federal minimum wage, which is learn that wages in manufacturing are 9 percent currently $7.25 per hour (unchanged since July 2009). higher than the state average. An updated Ohio minimum wage poster for 2014 can I also believe we need to raise the status and prestige be found here. Thank you to Bricker & Eckler for the of vocational careers to the same level as college and information. 10/17/2013 professional careers. One way of doing this is to strengthen our career-tech curricula and assessments to the extent that our students can graduate from high NLRB Sets Difficult Precedent for Employers school with important industry credentials already in hand.” 10/31/2013 OMA Connections Partner, Roetzel, tells us about a recent National Labor Relations Board (NLRB) Kasich Gets Medicaid Expansion decision that found an employer engaged in an unfair labor practice when it suspended and discharged an employee for making vulgar, offensive and potentially This week the state Controlling Board voted 5-2 threatening statements in the workplace. to approve Governor Kasich's proposal to expand Medicaid eligibility. Based upon confirmation of authorship, the company suspended and ultimately discharged the employee The OMA thanked the governor and members of for writing the statements and for falsely denying responsibility for such statements. the Controlling Board for their decision, "Simply put, this was the right decision at the right time for our fellow Ohioans in need and for the future The NLRB held that the employer violated the National Labor Relations Act by suspending and health and prosperity of our state." discharging the employee because such offensive comments constituted protected activity because they Previously, the OMA Board of Directors had were intended to encourage other employees to voted to support the governor's proposal to support the union in an upcoming decertification expand eligibility for Medicaid under the federal election. Affordable Care Act because of its economic and health benefits to the state of Ohio. The decision is a difficult precedent for employers. Per Roetzel: The takeaway is to tread carefully when considering discipline for offensive, The OMA encourages Ohio’s elected officials to vulgar and dishonest behavior where such behavior continue to explore alternative options to occurs in the context of union or concerted Medicaid expansion in order to mitigate impacts activity. 10/7/2013 on the federal debt and to contain Ohio’s Medicaid costs in future years. $30 Million Available in Incumbent Workforce Training Program The Ohio Senate introduced a bill to use savings expected to come from Medicaid expansion to Governor Kasich announced this week the launch of finance a personal income tax cut. (see story the second round of Ohio’s Incumbent Workforce below) 10/22/2013 Training Voucher Program; $30 million in training vouchers is now available to businesses and
Page 88 of 142 workers. The program is intended to help Ohioans The DOL identified four main causes for improper upgrade their skills and strengthens Ohio companies. unemployment payments, including untimely and/or incomplete job separation information due to the The program is administered by Ohio Development failure of employers or their third party administrators Services Agency (ODSA). ODSA reimburses to provide timely and complete information on the qualifying employers for up to 50 percent of the reason for the individuals’ separation from eligible training costs, up to $4,000 per employee, employment. after 1) the employer pays the full cost of the training, and 2) the employee successfully completes the In order to combat the issues contributing to improper training. The maximum amount an employer may payments, the DOL determined that "integrity qualify for in a fiscal year is $250,000. programs" must be designed.
Applications are now available. 9/30/2013 Ohio included some of these integrity provisions in House Bill 37. OMA employment counsel from $27 Million Available in Ohio Incumbent Bricker & Eckler drafted this memo outlining the law changes. Workforce Training Voucher Program
Manufacturers should pay close attention to any The Ohio Development Services Agency correspondence from the Ohio Department of Jobs just announced that $27 million in grants will be and Family Services regarding layoffs or other awarded on a first-come, first-served basis to separation actions in order to avoid possible businesses for incumbent worker penalties. 9/5/2013 training. Applications for the grant program will be accepted for review on September 30, 2013 beginning at 10:00 a.m. New Unemployment Insurance Brochure for Ohio Employers A pre-application and further details are now available. Here are the program guidelines, The Ohio Department of Jobs and Family Services which spell out which businesses can qualify for the has published a short brochure on unemployment funds. And here's an FAQ about the program. compensation. Manufacturers may find this brief, straightforward overview useful. 9/5/2013 For additional assistance, contact Shannon Vanderpool at (614) 644-8560, or Jennifer Spohr at NLRB’s Poster Rule Defeated Again in D.C. Circuit (614) 466-4184, or Ted Kalo at (614) 644- 6655. 9/5/2013 This week , the U.S. Court of Appeals for the D.C. Circuit denied the National Labor Relations Board’s New DOL Rules for Federal Contractors (NLRB) petition to have the notice of unionizing rights posting case reheard.
Joe Trauger, Vice President, Human Resources In May, by a uanimous decision, the Circuit Court Policy of the National Association of handed employers a victory by invalidating the notice Manufacturers, lets us know that the Department of posting rule. In July, the NLRB petitioned the Circuit Labor’s Office of Federal Contract Compliance to rehear the case. The NLRB now has until Programs has finalized two new rules regarding hiring December to appeal the case to the U.S. Supreme for federal contractors. Court.
One new rule applies to individuals with disabilities Thanks to the National Association of Manufacturers and the other protected veterans. Both rules are for keeping us updated. 9/4/2013 expected to take effect at the end of February 2014. 8/29/2013 Two New Studies of Pricing under Coming Health Exchanges Ohio Unemployment Law Changes Two studies were released this week on pricing of In June 2011, the U.S. Department of Labor (DOL) policies in the health insurance exchanges that go live issued an immediate call to action to all state on October 1. Ohio was one of the states looked at in administrators aimed at reducing improper payments both studies. of unemployment compensation benefits.
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The Kaiser Foundation study is “an early look at insurer participation and exchange premiums – both before and after tax credits – for enrollees in the 17 states plus the District of Columbia.” Twelve insurers are participating in the Ohio exchange.
A report by Avalere Health, a private data analysis firm, looks at actual pricing for bronze, silver, gold and platinum products on the exchanges in twelve states. 9/5/2013
Page 90 of 142 Human Resources, Health Care & Employment Law Legislation Prepared by: The Ohio Manufacturers' Association Report created on November 11, 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: 7/11/2013 - SIGNED BY GOVERNOR; Eff. 10/11/2013
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_2
HB3 HEALTH INSURANCE ACCOUNTABILITY ACT (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: 4/30/2013 - SIGNED BY GOVERNOR; Eff. 7/30/2013
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) 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: 7/11/2013 - SIGNED BY GOVERNOR; Eff. 7/11/2013
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: 11/13/2013 - Senate Medicaid, Health and Human Services,
(Second Hearing)
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)
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: 6/30/2013 - SIGNED BY GOVERNOR; Eff. 6/30/2013; Some Eff.
9/29/2013; Others Various Dates
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
Page 91 of 142 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)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_60
HB91 HEALTH CARE FREEDOM ACT (YOUNG R, THOMPSON A) To enact the Health Care Freedom Act. Current Status: 4/24/2013 - House Health and Aging, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_91
HB94 HEALTH CARE INSURANCE (GONZALES A) To require a health insuring corporation, public employee benefit plan, or sickness and accident insurer to reimburse a board of health for any services provided to an individual by the board that is covered by a plan issued to the individual by the health insuring corporation, public employee benefit plan, or sickness and accident insurer upon request submitted by the board of health. Current Status: 5/7/2013 - House Insurance, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_94
HB96 PUBLIC EMPLOYEES' COLLECTIVE BARGAINING LAW (STRAHORN F) To eliminate an exemption from the Public Employees' Collective Bargaining Law for specified educational employees. Current Status: 6/11/2013 - House Education, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_96
HB121 OHIO HEALTH SECURITY ACT (HAGAN R, FOLEY M) To enact the Ohio Health Security Act to establish and operate the Ohio Health Care Plan to provide universal health care coverage to all Ohio residents. Current Status: 4/17/2013 - Referred to Committee House Insurance
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_121
HB123 TELEHEALTH SERVICES (GONZALES A, WACHTMANN L) Regarding Medicaid and health insurance coverage of telehealth services. Current Status: 11/13/2013 - Senate Medicaid, Health and Human Services,
(First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_123
HB125 MEDICAID EXPANSION (CARNEY J, ANTONIO N) To permit the Medicaid program to cover the eligibility expansion group authorized by the Patient Protection and Affordable Care Act and to make an appropriation. Current Status: 4/17/2013 - Referred to Committee House Finance and
Appropriations
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_125
HB151 RIGHT TO WORK-PRIVATE EMPLOYERS (ROEGNER K) To prohibit any requirement that employees of private employers join or pay dues to any employee organization and to establish civil and criminal penalties against employers who violate that prohibition. Current Status: 6/4/2013 - House Manufacturing and Workforce Development,
(First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_151
Page 92 of 142
HB152 RIGHT TO WORK-PUBLIC EMPLOYEES (MAAG R) To remove any requirement under the Public Employees Collective Bargaining Law that public employees join or pay dues to any employee organization and to prohibit public employers from requiring public employees to join or pay dues to any employee organization. Current Status: 5/7/2013 - Referred to Committee House State and Local
Government
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_152
HB153 MEDICAL CANNABIS (HAGAN R) Regarding the medical use of cannabis. Current Status: 5/29/2013 - House Health and Aging, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_153
HB163 OHIO CIVIL RIGHTS LAW EXPANSION (MCGREGOR R, ANTONIO N) To prohibit discrimination on the basis of sexual orientation or gender identity, to create an exception for unlawful discriminatory practices concerning admission to or membership in certain religious organizations, to add mediation to the list of informal methods by which the Ohio Civil Rights Commission must attempt to induce compliance with Ohio's Civil Rights Law before instituting a public hearing. Current Status: 5/22/2013 - House Commerce, Labor and Technology, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_163
HB176 MEDICAID REFORMS (SEARS B) To require the Medical Assistance Director to implement Medicaid reforms, to permit the Medicaid program to cover an additional group under certain circumstances, to revise the duties of the Joint Legislative Committee on Medicaid Technology and Reform, and to make an appropriation. Current Status: 10/16/2013 - House Health and Aging, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_176
HB208 MEDICAID REFORMS (AMSTUTZ R, SYKES V) To require the Medicaid Director to implement certain reforms to the Medicaid program, to require the Director of Job and Family Services to implement certain reforms to workforce development activities, to create the Joint Medicaid Oversight Committee to review proposed rules regarding the Medicaid and workforce development activity reforms, to require the Joint Medicaid Oversight Committee to issue reports recommending certain changes to the Medicaid program, and to abolish the Joint Legislative Committee on Health Care Oversight and the Joint Legislative Committee on Medicaid Technology and Reform. Current Status: 6/18/2013 - Referred to Committee House Finance and
Appropriations
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_208
HB227 HEALTH CARE COMPACT (RETHERFORD W, BOOSE T) To enter into the Health Care Compact. Current Status: 9/19/2013 - Referred to Committee House State and Local
Government
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_227
HB235 EMPLOYMENT APPLICATIONS (WILLIAMS S) To prohibit employers from including on an employment application any question concerning whether an applicant has been convicted of or pleaded guilty to a felony. Current Status: 10/2/2013 - House Commerce, Labor and Technology, (First
Page 93 of 142 Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_235
HB253 PAYCHECK CARD (ROGERS J) To prohibit certain employers from requiring employees to accept the employees' pay in the form of a paycheck card. Current Status: 10/30/2013 - Referred to Committee House Commerce, Labor
and Technology
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_253
HB255 MEDICAID ELIGIBILITY (BECKER J) To revise the law governing eligibility for the Medicaid program and to abolish the Medicaid Buy-In for Workers with Disabilities Program. Current Status: 10/16/2013 - House Health and Aging, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_255
HB316 MEDICAID-COVERED COMMUNITY BEHAVIORAL HEALTH SERVICES (WACHTMANN L) Regarding Medicaid-covered community behavioral health services. Current Status: 10/30/2013 - Referred to Committee House Health and Aging
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_316
HB317 MEDICAID REFORM MEASURES (SEARS B) Regarding reforms relating to Medicaid, fraud committed against the state, penalties for certain drug offenses committed against pregnant women, non-opiate medication for released inmates, prescription-related identification requirements, and education for individuals without a high school diploma. Current Status: 10/30/2013 - Referred to Committee House Health and Aging
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_317
HB320 FREE CLINICS (YOUNG R) To create a state income tax deduction regarding certain health care services provided at a free clinic; to extend qualified immunity from civil liability for certain volunteer health care services provided to individuals eligible for or receiving Medicaid; to authorize a person practicing under a volunteer's certificate to provide health care services to any person; to create a volunteer's certificate for retired nurses; and to designate December as "Free Clinic Appreciation Month." Current Status: 11/13/2013 - House Health and Aging, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_320
HCR23 FEDERAL WORKFORCE INVESTMENT ACT (DERICKSON T, ROMANCHUK M) To urge the Congress of the United States to take action on the federal Workforce Investment Act to allow states greater flexibility to address current economic realities. Current Status: 10/22/2013 - REPORTED OUT, Senate Workforce and
Economic Development, (Third Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HCR_23
HJR5 RIGHT TO WORK (ROEGNER K, MAAG R) Proposing to enact Section 22 of Article I of the Constitution of the State of Ohio to prohibit employees from being forced to participate in a labor organization as a condition of employment. Current Status: 6/4/2013 - House Manufacturing and Workforce Development,
(First Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HJR_5
HJR6 MARIJUANA LEGALIZATION (HAGAN R) Proposing to enact Section 12 of Article XV of the Constitution of the State of Ohio to legalize the production, use, and sale of marijuana under specified conditions and to provide for the regulation and taxation of marijuana.
Page 94 of 142 Current Status: 6/18/2013 - House State and Local Government, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_HJR_6
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: 6/27/2013 - SIGNED BY GOVERNOR; Eff. 9/27/2013
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: 9/19/2013 - Referred to Committee House Military and Veterans
Affairs
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_8
SB9 HEALTH INSURANCE LAWS (BACON K) To make changes to Ohio's health insurance laws related to implementation of the Federal Affordable Care Act. Current Status: 6/4/2013 - SIGNED BY GOVERNOR; Eff. 9/4/2013
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)
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: 9/24/2013 - Senate Finance, (First Hearing)
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: 4/24/2013 - SUBSTITUTE BILL ACCEPTED & REPORTED OUT, Senate Medicaid, Health and Human Services, (Third Hearing)
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: 4/10/2013 - Referred to Committee House Commerce, Labor
and Technology
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
Page 95 of 142 organizations and to declare an emergency. Current Status: 5/28/2013 - SIGNED BY GOVERNOR; Eff. 5/28/2013
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)
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)
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: 3/13/2013 - Senate Insurance and Financial Institutions, (Second
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_49
SB65 PUBLIC EMPLOYEES' COLLECTIVE BARGAINING LAW (TURNER N) To eliminate an exemption from the Public Employees' Collective Bargaining Law for specific educational employees. Current Status: 6/12/2013 - Senate Commerce and Labor, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_65
SB75 HEALTH CARE INSURERS (TAVARES C) To prohibit health insurers from denying payment for a service during or after the performance of the service if the insurer provided prior written authorization for the service. Current Status: 4/10/2013 - Senate Insurance and Financial Institutions, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_75
SB88 OHIO HEALTH BENEFIT EXCHANGE PROGRAM (SKINDELL M) To establish the Ohio Health Benefit Exchange Agency and to establish the Ohio Health Benefit Exchange Program consisting of an exchange for individual coverage and a Small Business Health Options Program. Current Status: 4/10/2013 - Senate Insurance and Financial Institutions, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_88
SB92 WAGE DISCRIMINATION (TURNER N, TAVARES C) To enact the "Fair and Acceptable Income Required (FAIR) Act" and to revise the enforcement of the prohibitions against discrimination in the payment of wages. Current Status: 6/18/2013 - Senate Commerce and Labor, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_92
SB117 MEDICAID PROGRAM (SMITH S) To permit the Medicaid program to cover the eligibility expansion group authorized by the Patient Protection and Affordable Care Act and to make
Page 96 of 142 an appropriation. Current Status: 5/8/2013 - Referred to Committee Senate Finance
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_117
SB119 DOMESTIC WORKERS PROTECTION (TAVARES C) To require that domestic workers be paid the minimum wage, as provided in Section 34a of Article II, Ohio Constitution, to require that domestic workers be paid overtime wages, to make certain conduct directed toward a domestic worker an unlawful discriminatory practice, and to require a weekly day of rest for domestic workers. Current Status: 6/18/2013 - Senate Commerce and Labor, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_119
SB125 OHIO CIVIL RIGHTS LAW EXPANSION (LAROSE F, SKINDELL M) To prohibit discrimination on the basis of sexual orientation or gender identity, to create an exception for unlawful discriminatory practices concerning admission to or membership in certain religious organizations, to add mediation to the list of informal methods by which the Ohio Civil Rights Commission must attempt to induce compliance with Ohio's Civil Rights Law before instituting a public hearing. Current Status: 6/26/2013 - Referred to Committee Senate Civil Justice
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_125
SB145 MEDICAID REFORMS (BURKE D, CAFARO C) To require the Medicaid Director to implement certain reforms to the Medicaid program, to require the Director of Job and Family Services to implement certain reforms to workforce development activities, to create the Joint Medicaid Oversight Committee to review proposed rules regarding the Medicaid and workforce development activity reforms, to require the Joint Medicaid Oversight Committee to issue reports recommending certain changes to the Medicaid program, and to abolish the Joint Legislative Committee on Health Care Oversight and the Joint Legislative Committee on Medicaid Technology and Reform. Current Status: 6/19/2013 - Senate Medicaid Finance Subcommittee, (First
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_145
Page 97 of 142
TO: OMA Government Affairs Committee FROM: Ryan Augsburger / Rob Brundrett SUBJ: Safety and Workers’ Compensation Policy Update DATE: November 13, 2013
Overview The General Assembly went on summer break shortly after putting the finishing touches on the House Bill 59, the state budget bill. They returned to work in late September and got back into the full swing of things in October. There continue to be rumors of new workers’ compensation legislation in the fall, but the reality of any of these bills moving fades with each passing week. The BWC continues to be active on the regulatory front but the opportunity for substantive legislative action appears to have past.
Legislation and Rules HB 59 State Operating Budget (Amstutz R-Wooster) HB 59 was introduced with a very limited number of BWC provisions. The General Assembly did include the changes announced by the Governor with the billion back campaign. The follow changes were made to the budget bill: • Makes changes to the Managed Care Organizations (MCO) contracts • Permits the Administrator to decertify an MCO if the MCO fails to do certain things • Rules for Waiver of Self-Insurance Eligibility Factors • Prospective Payment of Workers' Compensation Premiums • Safety and Hygiene Fund Increase and Safety Grant Expansion
HB 143 Workers’ Compensation Formulas (Dovilla R-Berea and Butler R-Oakwood) HB 143 would require the Administrator of Workers' Compensation to include in the notice of premium rate that is applicable to an employer for an upcoming policy year the mathematical equation used by the Administrator to determine the employer's premium rate. According to the BWC this information is already available on the web for all employers to review. There would be a compliance cost to the BWC to send out repeat information. The sponsors of the bill say it is necessary because not everyone has internet access.
SB 176 Worker’s Compensation Benefits (Seitz R-Green Township) SB 176 would prohibit illegal and unauthorized aliens from receiving compensation and certain benefits under Ohio's Workers' Compensation Law. Senator Seitz has introduced this bill in previous General Assemblies.
BWC Medical Reform Representative Barbara Sears (R-Sylvania) and Senator Bob Peterson (R-Sabina) were planning to reintroduce the BWC reform package as companion bills this spring. 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.
However, neither the House or Senate have moved to introduce the bills this fall and the flurry of interested party activity has dried up over the last few months. Both Peterson
Page 98 of 142 and Sears have become their caucuses point person on different issues, Medicaid reform and tax reform. The BWC has told the OMA they are operating as if the bills will not be introduced.
Self-Insurance Rule Changes The biennial budget for the State of Ohio (H.B. 59) requires two changes to the SI rules:
1. The Administrator must establish a rule with provisions for waiver of the requirement that SI applicants have 500 employees in Ohio. 2. The Administrator must establish a rule with provision for waiver of the requirement that SI applicants operate in Ohio for a minimum of two years.
Waiver of Requirement that Applicants Have 500 Employees in Ohio:
1. The employer demonstrates sufficient financial strength and administrative ability to manage workers’ compensation claims when considering following items set forth in ORC §4123.35: a. Whether the employer previously contributed to the State Insurance Fund or is a successor employer (ORC §4123.35(B)(1)(c)); b. The sufficiency of the employer’s assets located in Ohio (ORC §4123.35(B)(1)(d)); c. Financial records documents and data necessary to provide full financial disclosure (ORC §4123.35(B)(1)(e)); d. The applicant’s organizational plan for administration of a workers’ compensation program (ORC §4123.35(B)(1)(f)); e. The applicant’s proposed plan to educate employees about the change to SI, the applicant’s procedures for workers’ compensation claims, and the employee’s rights to compensation and benefits (ORC §4123.35(B)(1)(g)); and f. The applicant’s accounts with financial institutions (ORC §4123.35(B)(1)(h)). 2. The employer provides audited financial statements for the current year and four previous years. 3. The employer meets at least one of the following requirements: a. The employer has a substantial employee count outside of Ohio, as determined by the Bureau, or b. The employer has obtained excess insurance in an amount and with a retention level determined by the bureau to be appropriate.
Waiver of Requirement that Applicants Operate in Ohio for Two Years The bureau may waive the requirement that an SI applicant operate for at least two years in Ohio if a review of the applicant’s request indicates such waiver is appropriate.
Bureau of Workers’ Compensation Rebates and Dividends Earlier this year the BWC and the Governor made an announcement authorizing a one- time payment of $1 billion for private employers and public taxing districts.
They also announced they were expanding the agency’s successful Safety Grant Program to support expanded statewide efforts to promote workplace safety and
Page 99 of 142 encourage further investment in protecting Ohio’s workers. Finally they asked the legislature to allow the BWC to move toward a prospective-payment system and asking board approval for $900 million to mitigate transition costs. This switch will result in a rate reduction of 2% for private employers. The prospective request and the safety grant change were included in passed version of the state budget bill. The BWC Board of Directors approved the rebate/dividend concept in May at their monthly board meeting. The last of the checks were issues early last month.
Rate Reductions This spring the BWC proposed a 2.1% base-rate reduction for private employers at the BWC Board of Directors' Actuarial Committee. The recommendation reduces employer premiums by $29 million for the July 1, 2014 policy year. The BWC’s Board of Directors approved the proposal at their May board meeting. This is the third year in a row that workers' compensation insurance rates have remained steady or dropped.
Industrial Commission New Chairman Governor Kasich appointed Tim H. Bainbridge as an Industrial Commission Commissioner, effective July 1, 2013. Eight days later Mr. Bainbridge was appointed Chairman of the Industrial Commission by Governor Kasich. Mr. Bainbridge replaced Jodie Taylor who was serving as interim Chairman.
Chairman Bainbridge, who will serve a six-year term that expires in June 2019, brings over four decades of workers’ compensation experience to his role as the Chairman and Employee Member of the Commission.
Before arriving at the IC, he served as an attorney and managing partner at Ward, Kaps, Bainbridge, Maurer & Melvin from 1968 until 2009. He later served as a partner at the Bainbridge Firm from 2009 until 2013.
Originally from Steubenville, Ohio, Bainbridge earned his bachelor’s degree from Washington & Jefferson College in Washington, Pennsylvania, and then received his law degree from The Ohio State University. He was admitted to the Ohio Bar in 1967 and has also been admitted to practice before the US District Court in the Southern District of Ohio. Bainbridge resides in Columbus with his wife, Deidre. The couple has three grown sons.
Page 100 of 142 Safety & Workers’ Compensation
Ohio Workers' Compensation in the Courts State Support for Slips, Trips & Falls in Aging Workforce Here is a summary prepared by OMA workers' compensation counsel, Tom Sant, of Bricker & Eckler, The Bureau of Workers’ Compensation (BWC) BWC of workers' compensation cases that have been has teamed up with the Ohio Department of Aging to decided or heard in recent months by the Ohio create Steady U, a statewide collaborative aimed at Supreme Court. preventing slips, trips and falls in older Ohioans. Employees age 45 and up are more likely None of the cases reverse established precedents. to fall in the workplace than other workers. Work- related slips, trips and falls often result in workers’ compensation claims. In fact, the average BWC claim The Supreme Court has agreed to hear yet another for lost time related to slips, trips and falls is more intentional tort case, Pixley v. Pro-Pak Industries, Inc., than $31,000. et al, after its rulings which affirmed employers' positions in Kaminski and Hewitt, We'll keep you Ten ways to reduce falls in your workplace: Keep a posted. 11/7/2013 written housekeeping program; Ensure that floors are clean and dry; Employ proper floor cleaning Upcoming HazComm Training Compliance Due procedures; Wear slip-resistant shoes; Block entry Date into areas with wet floors; Maintain adequate lighting; Encourage employees to take their time and watch where they’re going; Maintain a written removal plan Any business that must comply with the OSHA for snow and ice; Place additional mats in entrances Hazard Communication standard must retrain all during inclement weather; Ask employees to use employees by December 1, 2013. The training must stepstools instead of standing on furniture. More include the changes to the standard that were information at Steady U. 10/25/2013 implemented in May 2012.
SBA Asks OSHA for Extension on Silica Rule The changes include new pictograms, new label requirements and new Safety Data Sheet format. Comment Period
There are two recorded webinars covering this The U.S. Small Business Administration’s Office of requirement in the OMA video library. Look under Advocacy sent a letter to OSHA requesting a 90-day Safety Management by OMA Connections Partner, extension to the comment period for its proposed Safex. (My OMA login in required.) silica rule, which is currently scheduled to close on December 11. The letter also requests the public hearing date be extended by 90 days. The National Additionally, OMA Connections Partner, Safex, is Association of Manufacturers requested a similar offering a train-the-trainer class on November 5 in extension earlier this month. Columbus. Attendees will receive an electronic copy of the materials for use in presenting the training in their facilities. The class maximum is 24 attendees; a The proposed rule will be a topic of discussion at the few seats remain. OMA members get a 10% discount upcoming OMA Safety & Workers' Compensation off the $250 fee. 10/31/2013 Committee meeting on Thursday, November 7. Committee meetings are open to all OMA members. 10/22/2013 New OMA Video on Appealed Claims & the Industrial Commission (video) BWC Board of Directors to Host Public Forum in Toledo Learn a lot in 15 minutes about how appealed workers' compensation claims are managed in Ohio in this new OMA video. The Ohio Bureau of Workers’ Compensation (BWC) Board of Directors will host a public forum Wednesday, October 16 in Toledo for area business The video features expert, Mike Squillace, Partner, at owners, medical providers, stakeholders, injured Dinsmore & Shohl, an OMA Connections workers and other interested parties. Partner. Mike reviews all claims that are scheduled for an Industrial Commission hearing for OMA members who purchase their workers' compensation This is an opportunity for the directors to learn which services through the OMA. 10/22/2013 issues are most important to stakeholders in the
Page 101 of 142 Toledo area, and the suggestions they may have for OMA Member Awarded BWC Safety Grant improvement. Here are the details. 10/10/2013 This week, the Ohio Bureau of Workers’ NAM Asks OSHA for Extended Comment Period Compensation (BWC) Administrator/CEO Steve on Silica Rule Buehrer announced nine safety intervention grants were awarded to employers in August. Last week the National Association of Manufacturers (NAM) sent a letter to the Occupational Safety and “We have more money available for safety-minded Health Administration (OSHA) requesting an businesses this year, thanks to Governor Kasich’s additional 90 days to file public comments on support of increased statewide efforts to promote the proposed crystalline silica rule, which would cut workplace safety and encourage further investment in protecting Ohio’s workers,” said Buehrer. “With triple the permissible exposure limit and require the dollars previously available, expanded eligibility, engineering controls to reduce exposures. If no and a $3 BWC match for every $1 an employer extension is granted, comments are due in early contributes, the safety grant program is a common December. sense solution for employers looking to keep their workers safe and reduce workers’ comp costs.” The NAM is working to draft comments and welcomes manufacturers to pass along information about the Congratulations to OMA member, Whitacre-Greer impact this rule would have on operations, particularly Company, Alliance, which was granted $40,000 to with regard to economic impact. Contact NAM's Joe purchase seven air cannons and a compressor to reduce the risk of injury to the upper and lower Trauger or Amanda Wood. 10/1/2013 extremities related to slips, trips and falls, awkward positions and manual material handling. Whitacre- BWC NE Ohio Safety Conference & Expo on Greer is a century old, family owned manufacturer of October 18 clay pavers and fire brick.
The Bureau of Workers’ Compensation (BWC) You can learn more about BWC grants in announces its sixth annual safety conference for this recorded webinar. 9/26/2013 employers and their employees in Northeast Ohio on Friday, October 18 from 8:00 a.m. – 3:30 p.m. at the BWC Soon to be Found at New URL Trumbull Career & Technical Center in Champion, Ohio. Effective September 25, the Bureau of Workers' Thirty-five courses to choose from to help you make Compensation (BWC) uniform resource locator (URL) your workplaces safer. Earn credit for the Industry is changing from www.ohiobwc.com Specific Safety Program (ISSP) and other BWC to www.bwc.ohio.gov. This change is part of a discount programs as well as human resource statewide initiative to make state agency web sites and online services more consistent. certification institute credit hours. Networking and vendor fair, too. 10/1/2013 BWC online services will remain the same. BWC Distributing Final $81.7 Million in “Billion Back” Rebates The .com address will continue to work after September 25; however you’ll be redirected to the new address, and you'll want to bookmark the new The “Billion Back” checks for employers that address. 9/16/2013 participate in the BWC’S group-retrospective rating program are scheduled to mail today, Oct. 4. Those with outstanding BWC balances will have their BWC Board to Vote DFSP Benefit Timing Change rebates first applied to satisfying those balances. The Bureau of Workers' Compensation (BWC) board The final piece of the BWC’s Billion Back plan of directors at its August meeting voted a rule change includes the modernization of BWC’s premium in the Drug Free Safety Program (DFSP) to provide collection model toward a prospective-payment an after-the-fact program rebate instead of the current system. The prospective plan switch, which begins in upfront premium discount. Directors will vote a early 2015, will result in a $900 million credit to second and final time this month. employers to avoid double billing. The switch will likely also result in rate reductions of two percent for Today, a participating employer gets a discount off of private employers and four percent for public their rates when they submit their premium employers. 10/3/02013 payment. And, an employer that fails to meet DFSP
Page 102 of 142 reporting, education, or testing requirements is (TPAs) to describe staff thinking on how the system retroactively removed from the program and is billed will changeover from retrospective premium payments additional premium based upon the non-discounted to prospective premium payments. rates. The August 2014 premium payments (for the 1st half The BWC Destination: Excellence programs are all of 2014) will be the last after-the-fact payments. The designed to offer the employer a rebate based off of first prospective payment will be due February 28, premium paid upon successful completion of program 2015, and employers will be paying for the entire requirements. The DFSP is the only program under 2014/2015 rating year. They will, however, be the Destination: Excellence package which does not granted a one-time credit equal to (probably) eight offer the premium benefit as a rebate after successful months’ premium (2/3 of the annual total). completion of all of the requirements. Here is a summary of some of the BWC's early Approved changes will be effective July 1, considerations documented by Dennis Davis, OMA’s 2014. 9/12/2013 Managing Director, Workers’ Compensation Services. This is the preliminary OSHA Proposes New Silica Exposure Rule proposal presentation used by the BWC (PA refers to private employers; PEC refers to public employers).
Late last month, the Occupational Safety and Health The OMA will assess the BWC's proposal and submit Administration (OSHA) announced a proposal to comments to the BWC. We’ll keep members posted lower worker exposure to crystalline silica, which is as BWC decisions are made and the implementation linked to lung cancer, silicosis, chronic obstructive timeline unfolds, and we'll help members analyze the pulmonary disease, and kidney disease. Here's resulting management decisions. 8/21/2013 OSHA's fact sheet.
Reminder: BWC Premiums Due September 3rd The agency currently enforces 40-year-old permissible exposure limits for crystalline silica. The proposed rule includes a new exposure limit for Ohio private employers have until September 3, 2013 respirable crystalline silica and details widely used to file payroll reports and submit workers’ methods for controlling worker exposure, conducting compensation premiums for the period starting medical surveillance, training workers about silica- January 1 and ending June 30, 2013. related hazards and record keeping measures. BWC offers a number of options for reporting payroll OSHA will accept public comments on the proposed and submitting payments. Pay online, in person at rule for 90 days following publication in the Federal any BWC location, or call 1-800-OHIOBWC. Register, followed by public hearings. OSHA has put up this related web page. 9/3/2013 The legislature approved BWC plans to switch to a prospective-payment system in late 2014. We'll keep Considering the BWC Drug-Free Safety Program? you posted. 8/15/2013
The next enrollment deadline for the Bureau of Get Up to Date on BWC Grants and Programs Workers' Compensation (BWC) Drug-Free Safety (video) Program (DFSP) is October 31. If you weren’t able to join this week’s OMA webinar OMA Connection Partner, Working Partners®, is with Bureau of Workers’ Compensation (BWC) staff to offering free webinars in October to help you learn learn about enhanced BWC grant opportunities and more. the BWC’s Destination Excellence discount and risk management services, you can watch the recorded Check our BWC program compatibility tool to see if webinar at the OMA Video Library. Use your My your company can qualify for the program OMA log in to access this and all previously recorded discounts. 9/4/2013 OMA webinars. 8/8/2013
BWC Plan Emerging for Switch to Prospective Premium Payment System
This week, the Bureau of Workers’ Compensation (BWC) held a meeting for third party administrators
Page 103 of 142 Thompson Steps In as Interim Workers’ Comp Ombuds
Michael Travis, the chief ombudsperson of the workers’ compensation ombudsperson system, has resigned. Travis was the subject of an investigation of the state Inspector General. The Inspector General concluded that Travis had committed “wrongful acts and omissions.”
At the request of the Industrial Commission Nominating Council (ICNC) (which hires the chief ombudsperson), Bill Thompson, the former chairman of the Industrial Commission and a former legislator from Northwest Ohio, stepped in as the interim ombudsperson. Thompson is highly regarded as a man of experience and integrity.
The ombuds office assists employees and employers with problems experienced with the Ohio workers’ compensation system. A search committee has been charged with finding a permanent chief ombudsperson. OMA's president, Eric Burkland, is the chairman of the ICNC. 8/8/2013
OMA Member Discounts on Drug-free Services from Working Partners(R)
As an OMA member you qualify for discounts on products and services to support your drug-free workplace program from Working Partners®, a full- service drug-free workplace consultation and training firm.
These products and services meet the requirements of the BWC’S Drug-Free Safety Program and the U.S. Department of Transportation and help you manage your drug-free program (even if you are not in the BWC discount program).
Accessing your 15-23% discount off all products and services is easy. Visit the Working Partners® website through this exclusive OMA portal to automatically get OMA discounts. Questions? Contact Working Partners' Scott Camp. 8/1/2013
Page 104 of 142 Workers' Compensation Legislation Prepared by: The Ohio Manufacturers' Association Report created on November 12, 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: 3/26/2013 - SIGNED BY GOVERNOR; Eff. 3/26/2013
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_33
HB34 WORKERS' COMPENSATION BUDGET (HACKETT R) 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: 3/26/2013 - SIGNED BY GOVERNOR; Eff. 3/26/2013
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: 6/30/2013 - SIGNED BY GOVERNOR; Eff. 6/30/2013; Some Eff.
9/29/2013; Others Various Dates
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_59
HB143 WORKERS' COMPENSATION (DEVITIS A, BUTLER, JR. J) To require the Administrator of Workers' Compensation to include in the notice of premium rate that is applicable to an employer for an upcoming policy year the mathematical equation used by the Administrator to determine the employer's premium rate. Current Status: 5/14/2013 - House Insurance, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_143
SB176 ILLEGAL ALIENS-WORKERS' COMPENSATION (SEITZ B) To prohibit illegal and unauthorized aliens from receiving compensation and certain benefits under Ohio's Workers' Compensation Law. Current Status: 11/6/2013 - Senate Commerce and Labor, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_176
Page 105 of 142 Industrial Commission -- News
January February March April May June July August September October November December
Wednesday, July 10, 2013
Thomas H. Bainbridge Named Chairman of the Ohio Industrial Commission
COLUMBUS, OH – The Ohio Industrial Commission (IC) announced today that Governor John Kasich appointed Thomas (Tim) H. Bainbridge as the Industrial Commission Chairman, effective July 9, 2013.
“I am privileged to be named Chairman at the Industrial Commission of Ohio,” Bainbridge said. “As chairman, I am looking forward to working with our customers and staff to simplify agency processes and continue to provide productive and well- organized hearings for employers and injured workers.”
Chairman Bainbridge, who will serve a six-year term that expires in June 2019, brings over four decades of workers’ compensation experience to his role as the Chairman and Employee Member of the Commission.
As an attorney, Bainbridge has spent a tremendous amount of time protecting the rights of Ohio’s workers and employers through his involvement with numerous organizations, which are dedicated to improving Ohio’s workers’ compensation system. He displayed his knowledge and expertise as the Chairman of the Columbus Bar Association Workers’ Compensation Committee from 1982 to 1983, and served as the Chairman of the Workers’ Compensation Section of the Ohio Association for Justice from 1991 to 1993. He also served as President of the Ohio Association for Justice. Later, he served Ohio’s injured workers and employers as the Commissioner for the Bureau of Workers’ Compensation Oversight Commission from 1995 to 2006.
Bainbridge’s passion for workers’ compensation has been evident throughout his career. Before arriving at the IC, he served as an attorney and managing partner at Ward, Kaps, Bainbridge, Maurer & Melvin from 1968 until 2009. He later served as a partner at the Bainbridge Firm from 2009 until 2013.
Bainbridge is a member of the Ohio State Bar Association, Columbus Bar Association, Ohio Association for Justice and the American Association for Justice.
Originally from Steubenville, Ohio, Bainbridge earned his bachelor’s degree from Washington & Jefferson College in Washington, Pennsylvania, and then received his law degree from The Ohio State University. He was admitted to the Ohio Bar in 1967 and has also been admitted to practice before the US District Court in the Southern District of Ohio. Bainbridge resides in Columbus with his wife, Deidre. The couple has three grown sons.
Monday, July 1, 2013
Thomas H. Bainbridge Named Commissioner of the Ohio Industrial Commission
COLUMBUS, OH – The Ohio Industrial Commission (IC) announced today that Governor John Kasich appointed Thomas (Tim) H. Bainbridge as an Industrial Commission Commissioner, effective July 1, 2013.
“I am honored to be named Commissioner at the Industrial Commission of Ohio,” Bainbridge said. “I am looking forward to working with the talented staff at this agency to improve the workers’ compensation appeals process while continuing to provide efficient and fair hearings for employers and injured workers.”
Bainbridge, who will serve a six-year term that expires in June 2019, brings over four decades of workers’ compensation experience to his role as the Employee Member of the Commission.
As an attorney, Bainbridge has spent a tremendous amount of time protecting the rights of Ohio’s workers and employers through his involvement with numerous organizations, which are dedicated to improving Ohio’s workers’ compensation system.
Page 106 of 142 https://www.ohioic.com/news/news2013/news07_13.html[11/3/2013 2:14:31 PM] Industrial Commission -- News
He displayed his knowledge and expertise as the Chairman of the Columbus Bar Association Workers’ Compensation Committee from 1982 to 1983, and served as the Chairman of the Workers’ Compensation Section of the Ohio Association for Justice from 1991 to 1993. He also served as President of the Ohio Association for Justice. Later, he served Ohio’s injured workers and employers as the Commissioner for the Bureau of Workers’ Compensation Oversight Commission from 1996 to 2007.
Bainbridge’s passion for workers’ compensation has been evident throughout his career. Before arriving at the IC, he served as an attorney and managing partner at Ward, Kaps, Bainbridge, Maurer & Melvin from 1968 until 2009. He later served as a partner at the Bainbridge Firm from 2009 until 2013.
Bainbridge is a member of the Ohio State Bar Association, Columbus Bar Association, Ohio Association for Justice and the American Association for Justice.
Originally from Mingo Junction, Ohio, Bainbridge earned his bachelor’s degree from Washington & Jefferson College in Washington, Pennsylvania, and then received his law degree from The Ohio State University. He was admitted to the Ohio Bar in 1967 and has also been admitted to practice before the US District Court in the Southern District of Ohio. Bainbridge resides in Columbus with his wife, Deidre. The couple has three grown sons.
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TO: OMA Government Affairs Committee FROM: Ryan Augsburger / Rob Brundrett SUBJECT: Tax Policy Highlights DATE: November 13, 2013
Overview The General Assembly took an extended summer recess following the passage of HB 59, the state budget. Aside from a couple of hearings on Medicaid expansion, and a summer tour on tax reform the legislature remained relatively quiet until the end of September. They began working a full slate in October and their agenda has been fairly full for the last two months. There have been several tax bills introduced and the Senate convened a tax reform committee.
State Financial Condition Real GDP expanded at an annual rate of 2.5% in the second quarters, following gains of 1.1% in the first quarter and only 0.1% in last year’s fourth quarter. Year-over-year growth was a subdued 1.6%.
Ohio employment decreased by 8,200 jobs in August and the July change was revised downward. Ohio employment is up 25,600 jobs year-to-date., reversing much of the 26,500 jobs gained during the previous three months. The Ohio unemployment rate was 7.3% in August, and has been slowing trending upward over the last couple of reports.
Leading economic indicators remain consistent with uninterrupted growth at a modest pace across the country and especially in Ohio.
Tax Reform Hearings The House of Representatives created a Tax Reform Study Committee which held tax reform hearings across the state during the summer recess. The OMA and several OMA members provided testimony for the committee. Representative Gary Scherer (R- Circleville) who chaired the committee announced he would release his findings at the end of the year. However he has spoken publicly about the need to totally review the CAT to see if there are changes that need to be made to address what other industries consider “deficiencies” in its taxing method.
Not to be outdone by the House, the Ohio Senate began to have tax reform hearings in Columbus this fall. The OMA provided testimony for the Senators. Several industries have pushed the Senators to move away from the CAT and look at other forms of business taxation. This includes the warehouse distribution industry who already receives one of the most favorable taxing schemes in Ohio tax laws. Manufacturers continue to fight an uphill battle against term limited legislators who have no recollection of Ohio business tax history.
The Governor’s office continues to review Ohio’s taxes and is looking for an opportunity to lower the overall income tax burden in the state. Any major changes would probably take a three pronged approach reviewing the state sales tax, local taxes and a third
Page 112 of 142 prong consisting of all over taxes. There is a chance a proposal to lower income taxes might be included in any new MBR legislation in the spring.
Tax Legislation House Bill 5 After almost a year of hurry up and wait it appears that HB 5 is on the verge of a floor vote in the House. In October a substitute version of the bill was accepted by the committee that was the product on intense negotiations among lawmakers and interested parties, including the business community and local governments. The bill still is considered unfavorable to cities with a 5 year NOL provision that would be uniform across the state. The OMA submitted a letter in support of the bill.
House Bill 135 Representative Pelanda (R-Marysville) introduced a bill to rehab vacant industrial buildings. This is modeled on a bill from Indiana. The bill originally included a CAT credit which the OMA was able to successfully remove from the bill. It is currently pending in Senate committee and is expected to pass in committee prior to the holiday break.
Senate Bill 149/House Bill 219 Representative Butler (R-Oakwood) and Senator Beagle (R-Tipp City) have introduced companion bills that would authorize nonrefundable tax credits against the CAT for businesses that contribute to economic development projects undertaken by local governments and nonprofit businesses. The credit is equal to 60% of a business’ contribution to a project primarily benefiting a rural area, and 50% of a contribution to a project benefiting an urban area. There is concern with these bills that they will erode the CAT base creating more pressure to increase the CAT rate on businesses.
Senate Bill 210 Senator Widener (R-Springfield) quickly moved to introduce legislation following the Medicaid expansion controlling board vote that would take the expected savings from expansion and provide a permanent income tax rate reduction of 4% for all tax brackets beginning in 2014. That would put the highest bracket at 5.176%. The House is contemplating a bill that would apply the savings to the unemployment compensation trust fund which is operating in the red.
Senate Bill 228 Senator Widener (R-Springfield) introduced legislation in the wake of the controlling board Medicaid expansion vote that would limits the controlling board’s authority to approve the expenditure of certain federal and nonfederal funds that are received in excess of the amount appropriated or are not anticipated in the current biennial appropriations act. The bill would also require information about selected non Ohio companies and require agencies to contact Ohio entities who did not respond to an RFP.
House Bill 230 Representative Grossman (R-Grove City) has recently introduced and provided sponsor testimony on HB 230. This bill creates a refundable CAT credit for a business that donates food inventory to charitable organizations, equal to a percentage of a federal income tax deduction taken by the business for the same donation. This bill also puts pressure on the CAT rate. The OMA has expressed its concerns with Rep. Grossman and has offered language that could create a transparent grant program.
Page 113 of 142
House Bill 246 Representatives Blair (R-Washington Twp.) and Rogers (D-Mentor on the Lake) introduced HB 246 that allows an employer who hires a recent post-secondary graduate to deduct over five years, all or a percentage of the employer’s costs of employing that graduate from the employer’s gross receipts subject to the commercial activities tax. This is another concern for manufacturers. While not as bad as a credit is still creates a hidden deduction that could eventually impact the CAT rate. OMA met with Rep. Blair and Chairman Beck on this bill to stress our concerns.
House Bill 328 Representatives Young (R-Leroy) and C. Hagan (R-Alliance) introduced legislation from the House that would modify the authority of the controlling board to approve certain expenditures. This was reaction to the controlling board vote to expand Medicaid in the state of Ohio.
Pipeline Tax Energy companies who are building pipelines in Ohio are looking at ways to reduce the effective tax rate on these pipelines. Ohio taxes pipeline infrastructure at an 88% assessment plus local millage rates. Because Ohio has high millage rates at the local level the Ohio tax is much larger than most other states.
Tax news Tax Foundation Rankings The Tax Foundation, a nonprofit organization dedicated to tax analysis, recently released its 2014 State Business Tax Climate Index. The index purports to evaluate the business tax climate of the 50 states based on a series of factors. It values taxes on consumption over taxes on income; it generally favors broad tax bases with low rates; and exclusions, exemptions, and credits are generally disfavored.
Ohio came in at number 39 once again. Mark Engel, OMA’s tax counsel of Bricker & Eckler, explains: The primary criticisms of Ohio’s tax structure are its graduated income tax rates; its convoluted municipal income tax code; and its sales tax that is riddled with exemptions and exclusions.
Site Selection Site Selection magazine named Georgia as the state with the Top Business Climate for 2013, replacing North Carolina, which held the top slot last year. North Carolina placed second this year, followed by Texas, Ohio and Tennessee.
The magazine describes its methodology as: “The annual business climate rankings are determined 50 percent by an index of tax burden criteria according to the Tax Foundation and KPMG’s Location Matters analysis and the states’ performance in Conway Data’s New Plant Database, which tracks new and expanded business facility activity; and 50 percent by a survey of corporate site selectors.”
Ohio ranked second last year, and ninth the year before.
Page 114 of 142 Tax
House Bill 5 Finally Leaves Committee House Bill 5 (HB 5), the municipal income tax uniformity bill. The bill has gone through months After months of negotiations, House Bill 5 was of negotiations and contains several changes at finally reported out of the House Ways and the request of local government officials and will Means Committee this week. Only Rep. begin to receive hearings as early as next Stephen Slesnick (D-Canton) crossed party lines week. to vote in the affirmative. The bill would make Ohio’s municipal income tax system simpler and The bill contains numerous provisions including, more predictable. clarifying the residency test, providing uniform treatment of penalties, providing a 5 year NOL The committee accepted an omnibus technical carry forward, simplifying occasional entrants, amendment and a second amendment that and creating uniform tax due dates among a requires the Net Operating Loss study host of other changes. Local governments have committee, created by the bill, to make agreed to the majority of changes in the bill but recommendations to mitigate any fiscal impacts still oppose the bill. to local governments created by the net operating loss provisions. If you would like to testify on the importance of this bill and its impact on manufacturing, please The OMA submitted this letter in support of the contact Rob Brundrett and we can arrange for 10/24/2013 bill. Although the bill received strong support in your voice to be heard. committee, numerous legislators have yet to determine whether or not to support the bill. Senate Introduces Income Tax Reduction
Manufacturers should contact OMA's Rob This week Senator Chris Widener (R- Brundrett to learn how to help this beneficial Springfield) introduced Senate Bill 211. The bill measure, House Bill 5, to cross the finish provides a permanent income tax rate reduction line. 11/7/2013 of 4% for all of Ohio’s tax brackets beginning in 2014. The bill's source of revenue would be nd Ohio 22 in Gasoline Tax Rate state savings that will arise from the expansion of Medicaid. That is, Medicaid expansion is With an average tax rate of 28.0 cents per projected to generate enough unspent revenue nd gallon, Ohio ranks 22 among the states in to cover the cost of this tax cut. 10/25/2013 gasoline tax rates, according to the Tax Foundation. Ohio’s rate is lower than its five OMA Provides Tax Reform Testimony to contiguous neighbors: PA (32.3 cents), IN (38.2 Senate Committee cents), WV (34.7 cents), KY (32.3 cents), and MI (39.3 cents). John Konfala, Director of Tax, Emerson Network Power, presented testimony on behalf of the The highest rate in the nation comes in OMA this week at a Senate tax reform hearing, California at 53.2 cents per gallon. The lowest rate is in Alaska at 12.4 cents. stressing the importance of preserving the integrity of the commercial activities tax The foundation used a methodology of the (CAT). He stated, “Some of the most important American Petroleum Institute to calculate the aspects of the CAT are its broad-base, its low- average rates. 11/5/2013 rate, and its broad application to business entities.” And, “Those attributes can only be Substitute Version of Municipal Income Tax maintained when the state stands firm against Uniformity Bill Introduced pleas for individual carve-outs and exemptions.” The committee will continue to This week the House Ways and Means hold hearings throughout the fall. 10/17/2013 Committee accepted a substitute version of
Page 115 of 142 Tax Foundation Releases its Yearly And, Reps. John Rogers (D-Mentor on the Lake) Rankings: Ohio 39th and Terry Blair (R-Washington Twp.) provided sponsor testimony on House Bill 246. This bill authorizes an employer that hires a recent The Tax Foundation, a nonprofit organization graduate to deduct the costs of employing the dedicated to tax analysis, recently released its graduate from gross receipts subject to the 2014 State Business Tax Climate Index. The commercial activities tax. 10/3/2013 index purports to evaluate the business tax climate of the 50 states based on a series of factors. It values taxes on consumption over Senate Undertakes Tax Study taxes on income; it generally favors broad tax bases with low rates; and exclusions, Senator Bob Peterson (R-Sabina) conducted the exemptions, and credits are generally first hearing of the Senate Tax Reform disfavored. Committee. The committee was established, according to Chairman Peterson, to examine Ohio came in at number 39 once again. Mark Ohio’s taxes going forward and not to dwell on Engel, OMA's tax counsel of Bricker & Eckler, the tax changes that have taken place over the explains: The primary criticisms of Ohio’s tax last few years. structure are its graduated income tax rates; its convoluted municipal income tax code; and its The committee heard testimony from Ohio sales tax that is riddled with exemptions and University economist Richard Vedder as well as exclusions. 10/10/2013 others, including Rep. Gary Scherer (R- Circleville) who provided observations from the Yet Another CAT Credit Proposal House Tax Reform Study Committee, which he chaired this summer. Rep. Scherer said, “I House Bill 219, sponsored by Rep.Jim Butler (R- believe it is time to review how the CAT is Oakwood) is the latest bill to take aim at the imposed; the overall rate of the CAT, and what impact the CAT has on Ohio businesses.” commercial activity tax (CAT) base. Rep. Butler said in testimony that the bill would authorize a The Senate will be scheduling more hearings nonrefundable tax credit against various throughout the fall. 9/26/2013 business taxes, including the CAT, for businesses that contribute to economic IRS Filed Final Tangible Property “Repair” development projects undertaken by local Regulations governments and nonprofit corporations. 10/10/2013 OMA Connections Partner, GBQ Partners, LLC, reports that last week, the Internal Revenue Legislature Plays More CAT Games Service filed with the Federal Register the text of the 'much-anticipated' final tangible property The House Ways and Means Committee heard regulations. The final regulations provide sponsor testimony on Wednesday on two bills guidance to taxpayers on the treatment of costs that would create new carve outs to the commercial activity tax (CAT). paid to acquire, produce, or improve tangible property under sections 162(a) and House Bill 230, sponsored by Reps. Cheryl 263(a). 9/16/2013 Grossman (R-Grove City) and Marlene Anielski (R-Independence), authorizes an income tax or Ohio 12th in Top Marginal Tax Rate for Pass- commercial activity tax credit for businesses that Throughs donate food inventory to charitable organizations. According to sponsor testimony, The Tax Foundation this week released national a taxpayer could claim a refundable tax credit for maps of state rankings for the top marginal charitable food contributions from their business income tax rates for sole proprietorships and S- or trade with a tax credit of ten percent of the Corps. Ohio ranked 12th highest in the country. value of the contribution made to a nonprofit entity.
Page 116 of 142 The foundation says: “A “marginal” rate is the Rep. Scherer Talks Tax Reform at OMA amount that is taxed of the next dollar of income earned by pass-through businesses in each Rep. Gary Scherer (R-Circleville) updated the state’s highest tax bracket. These rates reflect OMA Government Affairs Committee this week the sum of federal, state, and local income taxes on the Ohio House Tax Reform Study (minus the state and local tax deduction); self- Committee that he is chairing. He thanked the employment taxes; and the limitation on OMA for its comprehensive testimony on the 9/10/2013 itemized deductions.” history and performance of the commercial activity tax. House Tax Study Committee Hears from Manufacturers He said that the committee is digesting testimony it is hearing across the state and will The Ohio House Study Committee Chaired by compile it’s report by year-end. The majority of Representative Gary Scherer (R-Circleville) was testimony has come from local governments in Bowling Green on Tuesday to hear more reacting to the past two state budgets. The testimony on Ohio’s tax structure. The OMA is one of the few organizations that is not a committee heard from OMA members O-I and local government to go on record with the Winzeler Stamping Company. committee.
Julie Flannagan, O-I Director of North America The next hearing is September 3 in Bowling Tax, testified in defense of the commercial Green. Rep. Scherer encouraged activity tax stating that, “O-I supports preserving manufacturers to testify on their perspectives of the 2005 tax reforms and opposes carve outs or the competitiveness of Ohio's business exemptions for individual industries.” Richard taxes. To testify at a future hearing, please Conrad from Winzeler Stamping testified on how contact OMA's Rob Brundrett. 8/22/2013 his company is benefiting from the small business tax cut included in the recent budget Ohio Among Worst in Outmigration of bill. Personal Income
The next hearing will take place in North The Tax Foundation released a map of the Ridgeville on September 12. If you are migration of personal income among the states interested in testifying, please contact OMA's from 2000 to 2010. Ohio ranked 46th, with a 9/5/2012 Rob Brundrett. $14.7 billion outflow.
State Sales and Income Tax Changes Now in Florida led the state winners, as interstate Effect migrants brought a net $67.3 billion dollars in annual income. The next two highest gainers The personal income tax reduction and sales tax were Arizona ($17.7 billion) and Texas ($17.6 increase established in the biennial budget took billion). Meanwhile, New York lost the most effect as of September 1. Here are the new income ($-45.6 billion), followed by California ($- employer withholding tables. The tables reflect 29.4 billion) and Illinois ($-20.4 a 9% reduction in the withholding rates billion). 8/20/2013 previously in effect for 2013, to conform with the 8.5% and 0.5% decrease in individual income Ohio House Holds First Summer Tax Hearing tax rates in effect for taxable years 2013 and 2014, respectively. The new tables are to be This week the Ohio House Tax Reform Study used for the remainder of the 2013 calendar Committee held its first hearing at Ohio year and for all of 2014. University - Chillicothe.
The state sales and use tax rate increased from OMA tax counsel, Mark Engel, from Bricker & 5.5% to 5.75%. 8/29/2013 Eckler LLP, provided comprehensive testimony about the history of, goals for, and outcomes
Page 117 of 142 produced by Ohio's commercial activity tax House to Study Taxes over the Fall (CAT). Speaker Bill Batchelder (R- Medina) created Engel summarized: "Since the enactment of three study committees that’ll work through the (2005) tax reform, OMA has maintained a fall: one on taxation, one on higher education, simple, consistent approach to tax policy in and one on health care and drug addiction. Ohio. That approach insists on certainty, equity, simplicity, and transparency. The erosion of the The chairman of the House Tax Reform tax reform legislation, in the form of carve-outs, Legislative Study Committee, Rep. Gary Scherer exclusions, and ear-marks, reduces certainty, (R-Circleville), announced the hearing schedule creates disparity by selecting winners and this week. He’ll have five hearings in August losers, renders the tax code more complicated, and September in various locations around the and reduces transparency as it becomes more state. The first four hearings will look at state difficult to determine who is entitled to which and local taxes (except municipal income taxes), exclusions." and the last one will focus on municipal taxes only. And Engel called for this specific, manufacturing-friendly sales tax reform: "... just Separately, Governor Kasich continues to push as wages are not subject to the CAT; and his agenda for continuing tax reforms; his aim is ingredients, machinery and equipment to have the most business competitive tax constituting business inputs are exempted from system in the country. More to come on that. the sales tax, so, too, should amounts paid for temporary employees engaged in activities that are otherwise exempt from the sales tax, be Contact OMA's Rob Brundrett for more 8/8/2013 excluded from that tax. Such employees are a information. business input; the sales tax should not apply to transactions by which such labor is obtained." Ohio House to Hold Special Study Hearings this Summer The committee will be in Batavia next week for its second hearing. Committee Chairman Rep. This week Speaker Bill Batchelder appointed Gary Scherer (R-Circleville) has reserved the three special study committees to hold summer final hearing in Columbus for input on the hearings around the state on ways to “reform” municipal income tax uniformity legislation, higher education, health care, and tax policy. Of House Bill 5. 8/15/13 special interest to manufacturers is the tax reform study committee, which will be chaired by North Carolina Passes Tax Reform Rep. Gary Scherer (R-Circleville).
OMA members with facilities in North Carolina The panels plan to hold hearings across the will want to read up on recently passed state in August and September to gather legislation in that state. House Bill 998, The Tax information to help lawmakers develop a final Simplification and Reduction Act of 2013, report and potential legislative generally reduces income taxes for both recommendations. corporations and individuals, and expands the scope of the sales and use tax to include certain OMA will coordinate on behalf of members to services. make sure relevant tax issues are elevated to the participating House members. With tax reform on the mind of Governor Kasich, it's instructive to monitor other manufacturing Hearing dates and locations will be determined states' tax law. in the near future. 7/31/2013
OMA Connections Partner, GBQ Partners, has a good analysis of the NC plan. 8/13/2013
Page 118 of 142 Taxation Legislation Prepared by: The Ohio Manufacturers' Association Report created on November 11, 2013
HB5 MUNICIPAL CORPORATIONS INCOME TAXES (GROSSMAN C, HENNE M) To revise the laws governing income taxes imposed by municipal corporations. Current Status: 11/6/2013 - House Ways and Means, (Twelfth Hearing)
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: 6/12/2013 - House Ways and Means, (First Hearing)
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: 6/5/2013 - House Ways and Means, (Second Hearing)
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
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
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: 3/12/2013 - Referred to Committee Senate Ways and Means
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: 3/12/2013 - House State and Local Government, (First Hearing)
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.
Page 119 of 142 Current Status: 6/30/2013 - SIGNED BY GOVERNOR; Eff. 6/30/2013; Some Eff.
9/29/2013; Others Various Dates
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
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
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_81
HB107 CAREER EXPLORATION INTERNSHIPS-TAX CREDIT (BAKER N) To authorize a tax credit for businesses that employ high school students in career exploration internships. Current Status: 11/6/2013 - Re-Referred to Committee
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_107
HB118 BOND ISSUES BALLOT LANGUAGE (ROEGNER K) To revise the ballot language requirements for bond issues. Current Status: 6/11/2013 - House State and Local Government, (Second
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_118
HB135 INCOME TAX CREDIT-VACANT INDUSTRIAL SITE (PELANDA D, CERA J) To authorize a nonrefundable credit against the income tax and certain business taxes for the rehabilitation of a vacant industrial site. Current Status: 11/12/2013 - Senate Ways and Means, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_135
HB138 TAX APPEALS BOARD LAW CHANGES (MCCLAIN J, LETSON T) To make changes to the law governing the Board of Tax Appeals, including authorizing a small claims division within the Board, requiring the Board to institute measures to manage certain appeals, requiring the Board to receive notices of appeal and statutory transcripts electronically, providing pleading standards for appeals to the Board, granting the Board authority to grant summary judgments and consider motions, vesting hearing examiners with the authority to determine credibility of witnesses and issue statements of fact and conclusions of law separately, and authorizing the Board to require parties to engage in mediation, 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: 7/11/2013 - SIGNED BY GOVERNOR; Eff. 10/11/2013; Some
Provisions Other Dates
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_138
HB189 JOBSOHIO ACCOUNTABILITY ACT (LUNDY M) To create the JobsOhio Accountability Act. Current Status: 6/4/2013 - Referred to Committee House Policy and Legislative
Oversight
Page 120 of 142 State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_189
HB198 TAX INCREMENT FINANCING (BUTLER, JR. J, BURKLEY T) To establish a procedure by which political subdivisions proposing a tax increment financing (TIF) incentive district are required to provide notice to the record owner of each parcel within the proposed incentive district before adopting the TIF resolution, and to permit such owners to exclude their parcels from the incentive district by submitting a written response. Current Status: 11/12/2013 - House State and Local Government, (Second
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_198
HB212 SEVERANCE TAX-HORIZONTAL WELLS (HAGAN R) To levy a tax on the severance of oil, gas, condensate, and natural gas liquids from horizontal wells, to distribute revenue from the tax to environmental and oil and gas regulatory purposes, local governments impacted and not impacted by horizontal well development, and a permanent fund to promote economic development, and to provide for the administration, investment, and use of the permanent fund. Current Status: 6/25/2013 - Referred to Committee House Agriculture and
Natural Resources
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_212
HB219 CONTRIBUTIONS-ECONOMIC DEVELOPMENT PROJECTS (BUTLER, JR. J) To authorize tax credits for contributions of money to economic and infrastructure development projects undertaken by local governments and nonprofit corporations. Current Status: 10/9/2013 - House Ways and Means, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_219
HB224 TAX CREDITS (GONZALES A, TERHAR L) To make various changes to the administration of the investment tax credit and the venture capital loan loss tax credit, including the increase of the maximum amount of the investment tax credit and the venture capital loan loss tax credit and the elimination of the Industrial Technology and Enterprise Advisory Councils. Current Status: 6/26/2013 - Referred to Committee House Ways and Means
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_224
HB230 TAX CREDIT-FOOD DONATIONS (GROSSMAN C, ANIELSKI M) To authorize an income tax or commercial activity tax credit for businesses that donate food inventory to charitable organizations. Current Status: 10/2/2013 - House Ways and Means, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_230
HB245 PROPERTY TAX ROLLBACK (BARBORAK N) To extend the 10% and 2.5% partial property tax "rollback" exemptions to new and replacement levies approved at the 2013 general election and to declare an emergency. Current Status: 9/19/2013 - Referred to Committee House Finance and
Appropriations
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_245
HB246 TAX DEDUCTION-COLLEGE GRADUATES (ROGERS J, BLAIR T) To allow recent college graduates to claim an income tax deduction for qualified higher education expenses and allow employers of recent college graduates to deduct the employer's costs of employing the graduate from the employer's gross receipts subject to the commercial
Page 121 of 142 activities tax. Current Status: 10/2/2013 - House Ways and Means, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_246
HB260 ELECTRONICALLY FILED TAX RETURNS (GONZALES A) To allow the Department of Taxation to provide taxpayers who file electronic returns the option of receiving their income tax refund in the form of a credit card, debit card, prepaid card, or other device used to electronically transfer funds. Current Status: 10/9/2013 - House Ways and Means, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_260
HB282 SALES-USE TAX LICENSE (ROGERS J) To authorize vendors and others required to hold a sales or use tax license whose business and home address is the same to apply to the Tax Commissioner to keep such address confidential. Current Status: 10/23/2013 - House Ways and Means, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_282
HB284 HISTORIC REHABILITATION TAX CREDIT INCREASE (SCHURING K) To increase the maximum historic rehabilitation tax credit allowed to a taxpayer, from $5 million to $25 million, and to limit the amount of such credit that may be claimed in each year to $5 million. Current Status: 10/10/2013 - Referred to Committee House Ways and Means
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_284
HB289 JOINT ECONOMIC DEVELOPMENT ZONE-DISTRICT (SCHURING K) To require subdivisions to obtain written approval from owners and lessees of real property located within a proposed or existing joint economic development zone (JEDZ) or joint economic development district (JEDD) before approving, amending, or renewing the JEDZ or JEDD contract, to require that income tax revenue derived from a JEDZ or JEDD approved, amended, or renewed after the bill's effective date be used to carry out the JEDZ or JEDD economic development plan before being used for other purposes, and to institute contiguity requirements for which subdivisions may create a JEDZ or JEDD. Current Status: 10/29/2013 - House State and Local Government, (Second
Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_289
HB312 ELECTRIC LIGHT COMPANY-JOB RETENTION PROGRAM COSTS (JOHNSON T) To permit a public utility electric light company to recover costs of an economic and job retention program from all public utility electric light customers in Ohio. Current Status: 10/30/2013 - Referred to Committee House Public Utilities
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_312
HB319 INFRASTRUCTURE DEVELOPMENT RIDER-GAS COMPANIES (GROSSMAN C) To permit natural gas companies to apply for an infrastructure development rider to cover costs of certain economic development projects. Current Status: 10/30/2013 - Referred to Committee House Public Utilities
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_319
HB336 GASEOUS FUEL VEHICLE CONVERSION PROGRAM (O'BRIEN S, HALL D) To create the Gaseous Fuel Vehicle Conversion Program, to allow a credit against the income or commercial activity tax for the purchase or conversion of an alternative fuel vehicle, to reduce the amount of sales tax due on the purchase or lease of a qualifying electric vehicle by up to $500, to apply the motor fuel tax to the distribution or sale of compressed natural
Page 122 of 142 gas, to authorize a temporary, partial motor fuel tax exemption for sales of compressed natural gas used as motor fuel, and to make an appropriation. Current Status: 11/6/2013 - Introduced
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_HB_336
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: 4/30/2013 - Referred to Committee Senate Medicaid, Health and
Human Services
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)
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: 3/22/2013 - SIGNED BY GOVERNOR; Eff. 3/22/2013
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)
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)
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)
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: 6/19/2013 - House Ways and Means, (Third Hearing)
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: 6/18/2013 - Senate Ways and Means, (Fourth Hearing)
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
Page 123 of 142 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)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_56
SB76 NONPROFIT CORPORATION CORRECTIONAL FACILITY TAX EXEMPTION (SCHIAVONI J) To specify that a nonprofit corporation, the principal purpose of which is operating a halfway house, community-based correctional facility, or other venue offering rehabilitative residential programming to criminal offenders is presumed to be a charitable institution exempt from property taxation. Current Status: 6/18/2013 - Senate Ways and Means, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_76
SB85 TAX EXEMPTION-INVESTMENT METAL BOUILLON-COINS (JORDAN K, BEAGLE B) To exempt from sales and use taxes the sale or use of investment metal bullion and coins. Current Status: 4/16/2013 - Senate Ways and Means, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_85
SB89 EARNED INCOME TAX CREDIT (SKINDELL M) To grant a state earned income tax credit equal to a percentage of the federal earned income tax credit. Current Status: 6/11/2013 - Senate Ways and Means, (First Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_89
SB108 INCOME TAX (JONES S) To repeal the income tax deduction for wagering losses, to increase the income tax credit for the legal adoption of a child to $10,000 for each child, and to increase the maximum income tax deduction for college savings contributions to $10,000 annually for each beneficiary. Current Status: 4/30/2013 - Senate Ways and Means, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_108
SB120 TECHNOLOGY INVESTMENT TAX CREDIT PROGRAM (KEARNEY E) To increase the total amount of credits that may be awarded under the Technology Investment Tax Credit Program from $45 to $145 million. Current Status: 5/8/2013 - Referred to Committee Senate Finance
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_120
SB149 CONTRIBUTIONS-ECONOMIC DEVELOPMENT PROJECTS (BEAGLE B) To authorize tax credits for contributions of money to economic and infrastructure development projects undertaken by local governments and nonprofit corporations. Current Status: 11/12/2013 - Senate Ways and Means, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_149
SB159 PROPERTY TAX ROLLBACK EXEMPTIONS (SCHIAVONI J) To extend the 10% and 2.5% partial property tax "rollback" exemptions to new and replacement levies approved at the 2013 general election and to declare an emergency. Current Status: 9/26/2013 - Referred to Committee Senate Ways and Means
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_159
SB203 INCOME TAX CREDIT-NONPROFITS (SCHAFFER T, TAVARES C) To authorize an income tax credit for individuals that earn a nonprofit management degree or certain professional designations and to allow a sales tax exemption for out-of-state nonprofit corporations that relocate jobs to Ohio.
Page 124 of 142 Current Status: 10/15/2013 - Referred to Committee Senate Ways and Means
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_203
SB210 INCOME TAX RATE REDUCTION (WIDENER C) To provide for a permanent income tax rate reduction of 4% for all tax brackets beginning in 2014. Current Status: 10/30/2013 - Referred to Committee Senate Finance
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_210
SB211 INCOME TAX CREDIT (SCHAFFER T, PETERSON B) To authorize an income tax credit for donations to the permanent endowment fund of an eligible community foundation. Current Status: 11/12/2013 - Senate Ways and Means, (Second Hearing)
State Bill Page: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_211
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
State Bill Page: http://www.legislature.state.oh.us/res.cfm?ID=130_SCR_1
Page 125 of 142
BEFORE THE TAX REFORM LEGISLATIVE STUDY COMMITTEE OF THE OHIO HOUSE OF REPRESENTATIVES
REPRESENTATIVE GARY SCHERER, CHAIRMAN
TESTIMONY OF MARK ENGEL BRICKER & ECKLER OMA TAX COUNSEL
AUGUST 14, 2013
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Mr. Chairman and members of the Committee, my name is Mark Engel. I’m an attorney with the law firm of Bricker & Eckler LLP and I concentrate my practice in the areas of state and local taxation and economic development. I’m testifying here today on behalf of the Ohio Manufacturers’ Association to provide you with some background regarding the Commercial Activity Tax (CAT) and to emphasize the importance on preserving the integrity of the CAT against erosion caused by exemptions and credits.
Ohio’s Previous Tax Structure
Prior to 2005, Ohio’s tax structure was essentially unchanged since the 1930s. At that time, Ohio’s economy was driven by agriculture and manufacturing. Its tax structure reflected that economy. The major taxes were the real property tax, the sales and use taxes, the tax on tangible personal property used in business, and the corporation franchise tax measured on net worth. Both agriculture and manufacturing enjoyed generous exemptions from the sales tax. However, the franchise tax and the tangible personal property tax, especially, both hit capital-intensive industries harder than others and had to be paid whether the entity made, or lost, money. Thus, the manufacturing sector paid an inordinately high level of state tax when compared with other segments of the economy.
As services made up a larger share of Ohio’s economy over the years, the inequality in the state tax burden between manufacturing and other segments of the economy was exacerbated. Many service sector concerns operate without a significant investment in capital; hence, their tangible personal property and net worth franchise tax liabilities were minimal. Many of these services operate on more slender margins or can manipulate their finances to minimize income; as a result, little income tax was generated. In addition, many of these new service entities were organized as pass- through entities that were not subject to the franchise tax. As the demand for state services grew, the only recourse was to raise existing tax rates on existing taxpayers. In many cases, that meant an increasing tax burden for Ohio manufacturers.
Paradoxically, Ohio continued to add exemptions from, and exceptions to, the various taxes during this time. As a result, Ohio was saddled with a number of taxes that had
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high nominal rates, but struggled to raise sufficient levels of revenue for governmental operations. The discrepancies between taxpayers and economic segments also increased and compliance with the existing taxes became more complicated.
Calls for Reform
During the 1960s, calls for reform in Ohio’s tax structure began. Over the years, various band-aids were applied to Ohio’s tax structure in order to attempt to reduce its inequalities. Differences in the assessment rate applied to various types of business tangible personal property were reduced or eliminated, and the over-all assessment percentage was reduced. In the early 1970s the net income tax base for the franchise tax and the personal income tax were enacted on the basis that they were perceived as “more fair” because they were based on ability to pay. Ohio’s intangibles tax on investments was repealed during the early 1980s. A cap of $150,000 was placed on the franchise tax liability of a taxpayer as measured by net worth in the early 1990s.
At the same time, Ohio continued to enact exemptions from, or exceptions to, the various taxes, thereby creating increasing disparity and complexity.
With the dawn of a new millennium, calls for tax reform increased. They were reinforced by the movement of manufacturing jobs to the sunny south and outside the borders of the United States. Ohio lost over 200,000 high-paying manufacturing jobs in the early years after the turn of the century. In addition, Dr. Ned Hill of Cleveland State University independently conducted a study that examined the impact of state tax policy on Ohio’s economy and called for the elimination of the tangible personal property tax and existing dual-based franchise tax, to be replaced with a broad-based, low-rate tax based on payroll. The study also showed how capital-intensive segments of the economy, such as manufacturing, construction, and mining, paid anywhere from 3 to 11 times more state taxes than did members of many service industries.
Tax Reform Enacted
Finally, in early 2005, true tax reform was proposed. The goals of tax reform were:
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Eliminate tax on investment and shift to the taxation of consumption;
Broaden the over-all business tax base;
Reduce over-all business tax rates;
Provide a more stable and predictable flow of revenue; and
Simplify compliance.
The result was a comprehensive overhaul of Ohio’s tax system by H.B. 66. As enacted, the bill:
Eliminated the tangible personal property tax on new investment in manufacturing and phased out the tax on all general business property over 4 years;
Phased out the corporation franchise tax for most corporations over 5 years;
Phased in a 21% reduction in personal income tax rates ratably over 5 years (the last reduction was delayed 2 years in 2009 in an effort to balance the state budget, but was implemented in 2011); and
Enactment of the commercial activity tax (“CAT”), a broad-based, low-rate tax measured by gross receipts from virtually all business activities and entities.
H.B. 66 became law in June 2005. Although generally opposed to gross receipts taxes because of their compounding nature, most manufacturers soon found that the savings from replacing the onerous taxes on tangible personal property and corporation franchise with the extremely broad-based, low-rate CAT more than made up for the policy misgivings regarding a gross receipts tax. Other taxpayers that initially withheld support, such as retailers and those in construction, also warmed to the tax as the savings became clear. In addition, compliance costs were slashed as taxpayers no longer had to undertake the arduous process of preparing personal property tax returns or corporation franchise tax reports.
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CAT Facts
According to the Ohio Department of Taxation in a report dated March 12, 2013, in fiscal year 2012 (the latest year for which figures are available) manufacturers made up the third largest group of CAT taxpayers, at 10.1% and trailing only retail (12.8%) and unclassified (10.2%). At the same time, in terms of CAT liability manufacturers made up the largest share, at 27.3% of the total (retail was second at 20.1%).
In addition, CAT filers with taxable gross receipts of $1 million or less accounted for 68.8% of all filers during 2011, but only 0.9% of the total liability for that period. Clearly, small business benefits from the CAT, as well as the 21% reduction in personal income tax rates that was also part of the 2005 tax reform and the additional reductions enacted as part of Am. Sub. H.B. 59 earlier this year.
Results of Tax Reform
Due to the phased implementation of the provisions of H.B. 66 and the general economic slowdown that has gripped the country over the past few years, questions have been raised regarding the effectiveness of the tax reform efforts. OMA has been at the forefront in demonstrating that, indeed, the effort was worthwhile.
In 2009, Ohio won Site Selection magazine’s “Governor’s Cup” for an unprecedented fourth consecutive year. The Governor’s Cup is awarded annually to the state having the most major business expansions in the nation.
A January 2009 Ernst & Young study indicated that Ohio’s business tax burden rated between 18th and 23rd best on 3 different scales of comparison. Another Ernst & Young study conducted for the Ohio Business Development Coalition showed that Ohio had the lowest effective tax rates on new capital investment in the Midwest.
The Small Business & Entrepreneurship Council’s Business Tax Index in 2008 rated Ohio’s state tax system as 14th best nationally.
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In March 2010 the Federation of Tax Administrations released an analysis of new data from the U.S. Census Bureau showing that for FY 2009, Ohio’s per capita state tax burden was the 16th lowest; as a percentage of personal income, the burden was the 18th lowest.
In April 2011, Ernst & Young and the Council on State Taxation issued a report entitled “Competitiveness of State and Local Business Taxes on New Investment” in which they concluded that Ohio had the third lowest rate of state and local taxation on new business investment. The report laid this result directly at the feet of the 2005 tax reform law.
In early 2013, Site Selection Magazine honored Ohio as having the 5th most favorable tax climate for mature firms and the 3rd most favorable tax climate for new firms for fiscal year 2012.
Finally, according to the Ohio Department of Taxation, Ohio is one of only 6 states that do not tax corporate profits, and one of 10 that do not tax business personal property.
Proposed tax reform and CAT changes
As noted above, some of the most important aspects of the CAT are its broad base, its low rate, and its broad application to business entities. Those attributes can only be maintained when the state stands firm against pleas for individual carve-outs and exemptions. The CAT was enacted as a tax on commercial activity. All enterprises engaged in such activity should be paying the CAT; in fact, equality in the burden of taxation demands that they all remain subject to the tax.
It has also been suggested that the rate at which the CAT is imposed might be raised in order to “pay” for various other tax “reforms.” As a gross receipts tax, the CAT applies to every transaction in the chain of commerce. Thus, the tax is paid multiple times and is included in the price that the final consumer pays for a good or service. The distortive effect of taxing intermediate transactions is minimized when the tax rate is kept low. By raising the rate, this distortive effect is magnified. It renders Ohio tax structure less
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transparent and its business less competitive. The success stories related earlier in this testimony could not have happened with a higher rate. The rate must remain low for the CAT to work.
Proposed tax reform and sales tax changes
It has been suggested that in order to spur economic growth, consumption, rather than income, should be taxed. That is one of the reasons the CAT, which taxes commercial consumption, was enacted. Similarly, the sales tax taxes personal consumption. It is not intended to tax business inputs such raw materials, or machinery and equipment that are used in a manner that produces other outputs that are ultimately taxed. As commercial consumption is already subjected to taxation under the commercial activity tax, expansion of the sales tax base should be directed to personal consumption.
Moreover, just as wages are not subject to the CAT; and ingredients, machinery and equipment constituting business inputs are exempted from the sales tax, so, too, should amounts paid for temporary employees engaged in activities that are otherwise exempt from the sales tax, be excluded from that tax. Such employees are a business input; the sales tax should not apply to transactions by which such labor is obtained.
Summary:
Since the enactment of tax reform, OMA has maintained a simple, consistent approach to tax policy in Ohio. That approach insists on certainty, equity, simplicity, and transparency. The erosion of the tax reform legislation, in the form of carve-outs, exclusions, and ear-marks, reduces certainty, creates disparity by selecting winners and losers, renders the tax code more complicated, and reduces transparency as it becomes more difficult to determine who is entitled to which exclusions.
Everybody has a story; everybody has a reason why one tax or another is not fair to them. However, one cannot have an efficient and fair tax system that is different for every taxpayer. Nor is it fair to tax some segments of the economy at levels that are 10 times higher than those imposed on other segments. The 2005 tax reform legislation was directed at trying to reduce that inequity. Every time an exclusion or exemption
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from the CAT is created, that increases the tax burden on everybody else. The solution isn’t a tax system made of Swiss cheese; we tried that already, and it didn’t work. Hold fast to a broad-based, low-rate tax that is simple to enforce and simple to follow, and that treats all taxpayers the same.
The CAT subjects commercial consumption to taxation; the sales tax subjects personal consumption to taxation. Imposing the sales tax on commercial consumption essentially subjects such transactions to two levels of taxation. The sales tax should not be expanded to consumption in the form of business inputs, and such inputs as are already taxed should be excluded.
Thank you. I’ll be pleased to answer any questions you may have.
6569088v1 8 Page 133 of 142 Proposed Substitute House Bill 5 (130-1581-2) Features, Advantages & Benefits of Major Provisions
Topic Bill Features Policy Advantages Benefits for Ohio Small employers only withhold tax at their fixed location. Small employers are those with less than $500,000 of gross receipts.
Other employers must withhold payroll tax to principal place of work or withhold to other municipalities beginning on the 21st day that the employee is working in the other Reduces cost of compliance and municipality. administration.
Occasional Entrant Other employers may opt to withhold back to Increases simplicity. Treatment (20 Day Rule) the first day. Minimizes lost revenue for Ensures consistent treatment for construction municipalities. sites.
Ensures that an employee can only be treated as in one city for any given calendar day.
Ensures that tax is withheld to some city in almost all cases.
Establishes uniform due dates for all municipal Improves Ohio's competitiveness. tax returns. Uniform treatment. Tax Due Dates & Withholding Establishes uniform withholding requirements Reduces costs of compliance and Requirements administration by reducing for all employers. Increases simplicity. unnecessary returns. Current litigation will control treatment of Supplemental Employee Retirement Plans Results in no current revenue Pending Tax Legal Cases Uniform treatment.treatment (SERPs) and professional athletes. impact on municipalities.
{09021623-8 } 1 of 3 Page 134 of 142 Proposed Substitute House Bill 5 (130-1581-2) Features, Advantages & Benefits of Major Provisions
Topic Bill Features Policy Advantages Benefits for Ohio Provides uniform apportionment mechanism. Reduces cost of compliance and Allows use of alternative apportionment to administration. better reflect business activity in a municipality. Apportionment of Income Uniform treatment. Reinstates throwback rule that is similar to current law treatment. Mitigates negative revenue impact to municipalities. Allows affiliate group of corporations to elect Improves Ohio's competitiveness. consolidated tax treatment, using federal tax Uniform treatment. group. Consolidated Tax Returns Reduces costs of compliance and Allows group to choose whether pass-through administration by reducing entity income will be taxed as part of group. Increases simplicity. unnecessary returns.
Municipalities retain flexibility to Codifies eleven common-law elements of the determine residency, similar to domicile test. current law. Residency Test Adds a level of clarity. Permits tax administrator and taxpayers to use No negative revenue impact to other facts to show residency. municipalities.
Lowers cost of compliance and Creates uniform audit and appeal procedures. administration. Audit, Assessment & Uniform treatment. Appeals Procedures Adds Taxpayer Bill of Rights. Ensures fair and local enforcement of municipal tax.
Enhances current LGF reporting of tax amounts No increased cost for Increases government and Tax Data collected each calendar year for publication. municipalities to comply. municipal tax transparency.
Page 135 of 142 (00021623.8 } 2 of 3 Proposed Substitute House Bill 5 (130-1581-2) Features, Advantages & Benefits of Major Provisions
Topic Bill Features Policy Advantages Benefits for Ohio Establishes standard interest rate and penalty Prevents imposition of usurious provisions. interest rates. Penalty & Interest Uniform treatment. Requires interest be paid on assessments and Allows municipalities to enforce refunds. their ordinances locally. Only city of residence can tax an individual No new taxes. Treatment of Pass- partner. Creates single layer of tax, except Through Entities, such as in city of residence. Uniform treatment. Partnerships and Partners All other cities must tax partnership at the entity level. Easier compliance and audit. Increases simplicity.
Treatment of S- S-Corp owners are treated the same as current Eliminates tax increases contained Corporations and No new taxes. law. in original bill. Shareholders
Every city will provide a 5 year NOL Improves Ohio's competitiveness. carryforward period, but use of carryforwards is delayed until 2017 and then limited to 50% Uniform treatment. for 5 years. Reduces unfair taxes for many business taxpayers. NOLs generated prior to law change remain intact, based on local ordinances. Increases simplicity. Net-Operating Loss (NOL) Municipalities will have time to Permits current year offset of taxpayer gains adjust to new rules. and losses. No new taxes. Creates the Net Operating Loss Review General Assembly will have time Committee to evaluate potential future impact to make adjustments, if and report back before next budget. necessary.
(00021623-8 } 3 of 3 Page 136 of 142
August 30, 2013
To: Wayne Struble, Policy Director, Office of Ohio Governor
From: The Ohio Manufacturers’ Association
Re.: OMA Tax Principles and Policy Recommendations
Introduction
Thank you for the opportunity to submit our positions with respect to tax policy considerations and recommendations. This document reflects tax policy guiding principles and recommendations to increase the competitiveness of Ohio’s manufacturing economy, and therefore, the Ohio economy. The concepts in this document were developed by OMA members in conjunction with staff and OMA tax counsel.
Guiding Principles
For Ohio to be successful in a global economy, the state’s tax structure must encourage economic investment and growth and be competitive both 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, significantly reducing tax on investment, broadening the tax base, providing more stable and predictable revenues, and simplifying compliance. While
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progress has been made, additional policy reforms are needed to support manufacturing competiveness, economic growth and prosperity in Ohio.
Based on these guiding principles, the OMA’s members have developed the following additional principles to guide the organization in evaluating tax policy proposals:
Guiding Taxation Principles
1. Tax policy changes should only be made after a thorough collection and consideration of all the facts and competing interests.
2. Ohio should continue to reevaluate its tax structures to ensure a modern tax system for a modern economy. This includes modernizing tax provisions to ensure fair and responsible tax models.
3. It is generally poor tax policy to single out any one segment of the economy or group of taxpayers to bear the cost of tax relief for the general population. Any departure from standard policy needs a clear and convincing reason.
4. Except to resolve existing inequality, or in cases of other policy imperatives, Ohio tax policy should not create a windfall for any group of taxpayers at the expense of other groups of taxpayers.
5. Compliance and administration of any tax should be as simple and inexpensive as possible for taxpayers and tax administrators alike.
Recommendations
Commercial Activity Tax (CAT)
Prior to 2005, Ohio’s tax structure was essentially unchanged since the 1930s. Although the state’s economy had changed and services made up a larger share of the economy, Ohio was still levying taxes based on an agricultural and manufacturing economy. Many service businesses operate without a significant investment in capital, hence, their tangible personal property and net worth franchise tax liabilities were minimal. Because of Ohio’s antiquated tax system some sectors were able to avoid paying a comparable share of tax as manufacturers.
As the demand for state services grew, a heavier burden fell on manufacturing taxpayers. At the same time the state continued to add exemptions from, and exceptions to, the various taxes at this time. Ohio was saddled with high nominal rates, but struggled to raise sufficient levels of revenue for governmental operations. The discrepancies between taxpayers and economic segments also increased and compliance with existing taxes became more complicated.
The 2005 tax reforms achieved the goals of significantly reducing tax on investment and shifting to taxation of commercial consumption, broadening the business tax base, reducing business taxes, providing a more stable and predictable flow of revenue and simplifying compliance.
Preserve the integrity of Ohio’s 2005 tax reforms. This includes a zero-tolerance response to any efforts via legislation or the court system to carve out exemptions or
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credits to (a) avoid paying the CAT on receipts from commercial activity, or (b) earmark any portion of CAT revenues for specific government purposes. See addendum for CAT carve outs.
Sales Tax
It has been suggested that in order to spur economic growth, consumption, rather than income, should be taxed. That is one of the reasons the CAT, which taxes commercial consumption, was enacted. Similarly, a sales tax acts to tax personal consumption. It is not intended to tax business inputs such as raw materials, machinery and equipment that are used to produce other outputs that are ultimately taxed. Since commercial consumption is already subject to taxation under the CAT, expansion of the sales tax base should be directed at personal consumption.
Imposing the sales tax on commercial consumption essentially subjects such transactions to two levels of taxation. The sales tax should not be expanded to consumption in the form of business inputs, and such inputs as are already taxed should be excluded.
Ohio would benefit from a more streamlined and simplified 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 sound tax policy or economic justification.
Just as wages are not subject to the CAT; and business inputs, such as ingredients, machinery and equipment, are exempted from the sales tax, so too should amounts paid for temporary employees engaged in activities that are otherwise exempt from the sales tax. Such employees are a business input; the sales tax should not apply to transactions by which such labor is obtained.
Ohio also taxes industrial janitorial services. Manufacturers’ production facilities and the equipment components of their production processes require continuous repair and maintenance. Without the required cleaning, repairs and maintenance the machinery breaks down and fails to produce acceptable products for sale to customers. Cleaning industrial assets is absolutely critical to the manufacturing process. It is a necessary business input and sales tax should not apply.
Prior to any extension of the sales tax to services, state officials should be mindful of the often complex and costly consequences of extending a tax on personal consumption to businesses and manufacturers. Though not exclusively, many concerns fall into four main but often inter-related categories: (1) extending the tax to transactions between members of an affiliated group of entities; (2) extending the tax to intangibles; (3) the uncertainty surrounding situsing rules; and (4) the failure to afford to services and intangibles the benefit of existing exemptions for tangible property for purposes of resale or for business inputs. See addendum for additional details.
Severance Tax
The OMA recognizes that Ohio’s current severance tax structure makes Ohio very competitive, one of the most competitive and drilling-friendly states according to provided data. We note the
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severance tax provisions in Ohio law, having first been enacted in 1971, are 40 years old and have not been materially updated. Generally, manufacturers support the modernization of Ohio’s severance tax including a reasonable rate increase. Any changes to the severance tax should keep Ohio’s rate below our competitor states’ rates.
Income Tax
Ohio’s manufacturers understand the importance of lowering the state’s personal income tax rates and broadening its base. Lowering the tax rate and broadening its base increase Ohio’s overall competitiveness with other competing states when attempting to attract new or expanding businesses.
Uniform and consistent income tax rules across jurisdictions are a competitive necessity. Ohio needs to 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 generic municipal income tax forms.
Lower the effective 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 taxes, which puts Ohio at a competitive disadvantage compared to other states, few of which have any let alone hundreds of income tax jurisdictions. The tax itself notwithstanding, employers who operate in multiple Ohio communities have a significant tax administration and compliance cost under the current system.
Summary
Since the enactment of tax reform, OMA has maintained a simple, consistent approach to tax policy in Ohio. That approach insists on certainty, equity, simplicity, and transparency. The erosion of the tax reform legislation, in the form of carve outs, exclusions, and ear-marks, reduces certainty, creates disparity by selecting winners and losers, renders the tax code more complicated, and reduces transparency as it becomes more difficult to determine who is entitled to which exclusions.
Everybody has a story; everybody has a reason why one tax or another is not fair to them. However, one cannot have an efficient and fair tax system that is different for every taxpayer. Nor is it fair to tax some segments of the economy at levels that are multiple times higher than those imposed on other segments. The 2005 tax reform legislation was directed at trying to reduce that inequity. Every time an exclusion or exemption from the CAT is created, that increases the tax burden on everybody else. The solution isn’t a tax system made of Swiss cheese; we tried that already, and it didn’t work. Hold fast to a broad-based, low-rate tax that is simple to enforce and simple to follow, and that treats all taxpayers the same.
The CAT subjects commercial consumption to taxation; the sales tax subjects personal consumption to taxation. Imposing the sales tax on commercial consumption essentially subjects such transactions to two levels of taxation. The sales tax should not be expanded to consumption in the form of business inputs of any kind, and such inputs as are already taxed should be excluded.
OMA Tax Principles and Policy Recommendations Page 4
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