OMA Government Affairs Committee November 29, 2017
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9:30 a.m. (EST) 1-866-362-9768 940-609-8246# OMA Government Affairs Committee November 29, 2017 AGENDA Welcome & Introductions Luke Harms, Senior Manager of Government Relations Whirlpool Corp, Government Affairs Committee Vice Chair OMA Counsel’s Report Kurt Tunnell, Managing Partner, Bricker & Eckler LLP, OMA General Counsel Chris Slagle, Partner, Bricker & Eckler LLP Special Guest Hon. Ryan Smith, Ohio House of Representatives Staff Reports Ryan Augsburger, OMA Staff Rob Brundrett, OMA Staff Committee Members Panel Presentation / Discussion State Issue 2: Drug Price Andy Corsig, PhRMA Mandates Curt Steiner, Steiner Public Relations Electricity Market Protection and Utility Subsidy Legislation 2018 Political Landscape Luke Harms, Whirlpool Federal Tax Reform Ryan Modlin, O-I Scott Corbitt, Anheuser-Busch Old Business Gun Rights vs Property Rights Workforce – Industry Sector Partnerships National Issues: Trade & Ex-Im Bank Lunch – provided by OMA 2018 Government Affairs Committee Our thanks to today’s meeting sponsors: Calendar Meetings will begin at 9:30 a.m. 2018 meeting schedule will be emailed by mid- December Page 1 of 185 Representative Ryan Smith 93rd House District State Representative Ryan Smith is serving his third term in the Ohio House of Representatives and currently serves as the Chairman of the Finance Committee. He represents the 93rd House District, which includes Jackson and Gallia counties, as well as portions of Lawrence and Vinton counties. Representative Smith graduated with a Bachelor's of Science in Finance from The Ohio State University. Upon graduation, he began working as a financial advisor. In 2005, he joined his current financial advising firm as Vice President and Partner. Representative Smith was twice elected to the Gallipolis City School Board, where he served as Board President. Representative Smith has been engaged in local economic development efforts as he was president of both the Gallia County Chamber of Commerce and the Gallia County Civic Improvement Corporation. Representative Smith was also a board member for Holzer Health Systems, one of the largest employers and healthcare providers in southeastern Ohio. Representative Smith is married to his wife Vicki and together they have four children, Blake, Grant, Kennedy and Camryn. They reside in Bidwell, just outside of Gallipolis, where they are active in their local church. The Ohio Statehouse Columbus, Ohio 43215 (614) 466-1366 [email protected] Page 2 of 185 Public Policy “Hot Topics” November 29, 2017 Overview The General Assembly returned to work in September. Energy legislation has been a key focus over the past three months. Included in these was Representative Mark Romanchuk’s House Bill 247 an OMA-supported bill to protect competitive energy markets. Other issues of note included a new unemployment compensation solvency bill, environmental regulations on point sources, and a variety of tax issues. As the year winds down the legislature will begin to look to 2018, a campaign year, which will alter the appetite from structural reforms. 132nd General Assembly Lawmakers returned in late September and have been meeting fairly consistently over the past two and a half months. The session calendar for the remainder of 2017 is included in the meeting materials. December dates remain mostly “if needed” save for December 13. The House and Senate leadership teams are expected to release their session calendar for the first half of 2018 in the near future. Expect lawmakers back in the office in January and working up until spring break and the primaries. A lameduck session is be expected after the November general election. Electric Utilities Seek $Billions for Power Plant Subsidies Last year the PUCO set a new precedent in awarding utility companies with billion dollar subsidies to prop up the companies and their subsidiaries. The OMA Energy Group (OMAEG) opposed the FirstEnergy proposal and has appealed the matter to the Supreme Court. Not satisfied with the action by the PUCO, FirstEnergy, AEP and other electric utilities are advocating for a series of legislative proposals forcing customers to pay billions in new above- market charges. The OMA is opposing these proposals. See Energy Section. Protect Competitive Electric Markets The OMA has been a proponent of markets, supporting the original deregulation legislation. Several noteworthy studies have demonstrated how the market delivers lower prices, choice and innovation without compromising reliability. But, customers have been denied the low cost benefits of competition due to proliferating above-market charges approved by state regulators. The OMA is supporting a legislative reform package to empower market forces to set power costs in Ohio. See Energy Section to learn more about HB 247. Unemployment Compensation Last year the legislature passed a provision (included in House Bill 390) guaranteeing that the state’s unemployment compensation loan would be paid back to the federal government by the November deadline. By paying the loan off a year early the business community is expected to save over $400 million in federal penalties. Unfortunately a solvency package aimed at shoring up the state’s unemployment trust fund and correcting the underlying issue was not passed during lame duck. A comprehensive solution for the underlying solvency issue was not included in the budget. However Representative Schuring recently introduced House Bill 382, which is a standalone effort not backed or supported by any of the interested parties. Rep. Schuring designed the bill to be a starting point of new discussions that are expected to begin again in 2018. The Senate has yet to provide a bill and have relied on Senator Peterson to work with the interested parties Page 3 of 185 on a solution. OMA continues to advocate against any solution that does not include comparable benefit reductions. State Budget & Tax Policy Governor Kasich introduced his final budget proposal in late January. The budget is actually a series of different bills. The main operating budget is called House Bill 49. Voluminous budget bills saw hundreds of unrelated law changes tacked on, impacting all sorts of policy issue areas. House Bill 49 again contained tax reforms proposed by Governor Kasich to reduce personal income tax rates, while increasing the sales tax rate and expanding the sales tax base, while condensing the number of income tax brackets, and simplifying municipal tax collections. The House and Senate stripped the budget of almost all of the Governor’s proposals. The final passed version took a more restrained status quo approach to the Ohio tax policy. However changes supported by OMA were included that allow manufacturers to file one single local business income tax filing at the state level. This provision has now been contested by a coalition of municipalities who have sued citing to the home rule section of the Ohio Constitution. Workforce Development In November, the OMA hosted 500 members, manufacturers and their workforce suppliers, including government, education and training, and economic development professions to work on improving the talent pipeline for Ohio’s leading industry: manufacturing. The OMA is supporting an industry sector partnership model on a regional basis. Your company is invited to opt-in to next steps and participate in 2018 activity. See HR section resource material. Patent Trolls On May 22, the U.S. Supreme Court held in the case of TC Heartland LLC vs. Kraft Foods Group Brands LLC that the patent venue statute is narrower than the general federal venue statute. This decision is generally favorable for Ohio’s manufacturers. The Court’s narrowing of the patent venue statute should be helpful in at least avoiding out of state litigation in a patent trolls preferred forum. Right to Work With the approval of right-to-work legislation in West Virginia following narrowly successful veto override, pressure would seem to be mounting on a similar proposal in the Buckeye State. Unions are running a quiet campaign to taint the term “right to work.” No action, again, and none is expected during the election year. Workers’ Comp & Industrial Commission The main state operating budget included a late amendment to raid BWC and IC accounts to balance the general revenue fund, an unprecedented move. These dollars are from employer assessments and premiums….not tax dollars. The OMA was prepared to pursue legal options to prevent the raid. Fortunately, an amicable outcome was reached in negotiations. The OMA was able to help secure an amendment to Senate Bill 8 forbidding the transfer of IC or BWC dollars to the GRF. See the Safety & Workers’ Comp section. Page 4 of 185 National Issues Over the past year, the OMA has been active in communicating manufacturing priorities on various topics including, support for infrastructure, support for a functional Ex-Im Bank, highlighting the widespread benefits from NAFTA, and the need for national tax reform. Race for Ohio Leadership in 2018 Jockeying for statewide office is underway in the race for US Senator, governor, attorney general, auditor, secretary of state and treasurer. Look for opportunities at the OMA to meet the candidates over the next year. Page 5 of 185 Leadership More “Good Jobs” for Non-B.A. Workers are in Dayton Area Rep. Introduces Ballot Reform Manufacturing in Ohio Resolution November 17, 2017 November 10, 2017 More than a quarter – 27% – of “good jobs” for non- Earlier this month Rep. Niraj Antani (R-Miamisburg) bachelor-degreed workers can be found in introduced Joint Resolution 5 to reform the manufacturing, above the national average of 16%, procedures for initiated statutes and constitutional according to a new report from Georgetown University amendments. Center on Education and the Workforce in partnership with JPMorgan Chase & Co. The Joint Resolution would increase the number of signatures needed for both initiated statutes and The report, “Good Jobs That Pay Without a BA: A constitutional amendments, increase the vote total State-by-State Analysis,” defines a “good job” as needed for passage to 60% and ban the paying of one paying $35,000 ($17 per hour for a full-time job) petition gatherers.