9:30 a.m. (EST) 1-866-362-9768 940-609-8246# OMA Government Affairs Committee June 5, 2019 AGENDA Welcome & Introductions Scott Corbitt, Region Vice President, Anheuser-Busch Committee Chair Luke Harms, Senior Manager of Government Relations, Whirlpool Stephen Norton, Director Corp Comms & Gov’t Rel, STERIS Committee Vice Chairs Staff Reports Ryan Augsburger, OMA Staff Rob Brundrett, OMA Staff Committee Members OMA Counsel’s Report Chris Slagle, Partner, Bricker & Eckler LLP, OMA General Counsel Special Guest J.P. Nauseef President & Chief Investment Officer, JobsOhio Dana Saucier, Jr. Vice President & Head of Economic Development, JobsOhio Discussion Agenda • State Budget • Business Taxes in the Budget • Motor Fuel Tax • Electricity Power Plant Bailouts • Price Controls on Drug Products • Lake Erie Bill of Rights • PTSD Coverage under Workers’ Comp • OMA Workforce Opportunities 2019 Government Affairs Committee Calendar Our thanks to today’s meeting sponsor: Meetings will begin at 9:30 a.m. Thursday, August 22 Wednesday, November 13 Page 1 of 215 Executive Team J.P. Nauseef President and Chief Investment Officer [email protected] 614-568-6143 J.P. Nauseef is the president and chief investment officer of JobsOhio, where he leads a dedicated team responsible for business Dana A. Saucier, Jr. attraction, retention and expansion efforts Vice President & Head of Economic across the state. Development J.P. has significant executive leadership [email protected] experience in the private, public and nonprofit 614-362-3731 sectors. Before joining JobsOhio in March 2019, he was the chairman and co-founder of Krush Dana Saucier Jr. maintains a deep Media, a digital media company spun out of understanding of industry opportunities and Krush Technologies, another tech company he proactively works with energy, chemical and led and helped found. J.P. has served as food industry leaders to propel them to success president and CEO of the Dayton Development by leveraging his experience and industry Coalition (DDC), the chairman and co-founder of knowledge. the Military Heroes Foundation, and a co- founder of Hometown Heroes. Prior to joining JobsOhio, Dana co-founded Accent Energy which was acquired by Enron. J.P. graduated from the University of Dayton His past experience also includes co-founding with a bachelor’s degree in management Acceleris Group and leading DTE Energy information systems and then entered the Air Trading’s retail energy group, DTE Energy Force as an officer, where he served as a Supply. Dana holds a bachelor’s degree in technology development program manager. J.P. business administration and marketing from the later earned a master’s degree in systems University of Southern Maine. management from the University of Southern California. J.P. is married and has four sons. Dana enjoys the outdoors and has been a pilot for over 25 years. Page 2 of 215 Public Policy “Hot Topics” June 5, 2019 Overview Secord quarter is a busy time around state government. Budget legislation is the top priority, but a far- reaching and controversial bailout package for at-risk nuclear and coal power plants is also taking a lot of bandwidth. Both issues significantly impact manufacturers and the OMA is playing the role of an active advocate. Legislative Branch Composition & Control • Senate (Republicans control 24 – 9) • House of Representatives (Republicans control 61 – 38) The Budget The state budget is actually a collection of budget bills, but under Ohio’s constitution, they must all be adopted before July 1. Transportation Budget The Transportation Budget (House Bill 62) was completed in remarkable bipartisan fashion in early April. The bill contained an increase in motor fuel tax, bifurcating the tax on gasoline and diesel for the first time. While the OMA supported a reasonable gas tax adjustment to provide for needed road and bridge construction, the OMA did not support the taxing of diesel (now $0.47 / gallon) at a higher rate than gasoline ($0.385 / gallon). The OMA articulated concerns on disproportionate diesel fuel increases since diesel costs will be passed on to trucking customers (manufacturers) in the form of variable fuel costs. Main Operating Budget As expected, the main Operating Budget, HB 166 has become a Christmas tree for hundreds of law changes. The House approved the budget with widespread bipartisanship. The Senate will complete work on the budget by middle of June, allowing time for a brief conference committee phase before presenting the budget to the Governor. Perhaps most controversial is an income tax increase on business “owners” who have enjoyed zero state tax liability on their first $250,000 of income. The intended justification: too many professionals are getting the tax holiday but not doing enough in their business to stimulate the economy. The tax savings is being used in the bill to reduce lower income tax brackets. Also included in the House passed version of the budget were two tax amendments beneficial to manufacturers. One amendment would exempt all manufacturers from sales and use tax on any supplies or janitorial services purchased to clean machinery in a manufacturing facility. This has long been an OMA Tax Committee priority. This provision would bring certainty to the current exemption law. Another provision in the budget bill would create parity among all food manufacturers by allowing a sales- and-use tax exemption for equipment and supplies used to clean equipment that produces or processes food for human consumption. Currently the exemption is only for dairy food manufacturing. The OMA is also working with Senators for the inclusion of Senate Bill 153, which expands manufacturer eligibility for the Job Retention Tax Credit (see below). The OMA has advocated for numerous provisions within the budget important to manufacturers. See included state budget issues table. Page 3 of 215 Workers’ Comp Claims Expansion to Mental Injury The Workers’ Comp budget remains pending in the House. The bill was recently amended in committee to include coverage of PTSD for emergency first-responders. The extension sets a dangerous precedent for extending mental coverage into a system that has required a physical injury to receive treatment. The OMA opposes the extension of PTSD. State Budget & Tax Policy The OMA Tax and Finance Committee has been working to draft legislation that would benefit manufacturers by taking advantage of the under-utilized (Job Retention Tax Credit). Senate Bill 153 would expand manufacturers eligibility of the JRTC by focusing the credit’s on new capital investment as opposed to employment numbers or total wages. Electricity Bailouts / Market Distortion After being disappointed by state leaders for many years, proponents of nuclear power plant bailouts think they have the stars in alignment for a bill to transfer a massive amount of money from customers to power plant owners. The OMA has been a steadfast leading customer opponent to the various prior attempts and has been busy over the past six weeks in analyzing and communicating concerns with House Bill 6, priority legislation to fund bailouts / handouts to at risk power plants. The bill was approved by the House on May 29 and is now pending in the Senate. Nuclear power plant owners have asked lawmakers to complete the bill by August 1 to facilitate the deadline for refueling. Under the bill, manufacturers will be exposed to new costs and new forms of costs. See Energy Section. Priority Legislation Customarily the first bills introduced in a legislative session reflect the highest priorities of the chamber’s leadership. In the Senate, SB 1 is a regulatory reform bill taking aim at the number of regulations on the books. SB 2 was introduced to complement the Governor’s H2Ohio program and deals Ohio water quality. SB 3 deals with reform of drug sentencing laws. House Bill 2 impacts workforce development. The bill sets aside money for industry sector partnerships and industry recognized credentials. The OMA is supportive and is working with the House on improvements. Ballot Reform Last November Ohioans defeated a criminal sentencing constitutional amendment. The issue once again ignited the debate about how well-financed out of state interests are able to use Ohio’s constitution as a petri dish for policy experimentation. The initial interest in a fix has dissipated. Workforce Development A top priority for Ohio manufacturers, the OMA is in its third year supporting an industry sector partnership model on a regional basis. Your company is invited to opt-in to next steps and participate in 2019 activity. Please contact the OMA staff to get your team engaged in regional efforts to develop a modern manufacturing workforce. The OMA’s third annual summit will be held on October 29 and will build on the workforce successes over the past several years. Make sure your company is plugged in. See included sponsorship under Human Resources. Environment The DeWine administration is focused heavily on water quality across Ohio. The Governor introduced the H2Ohio program which is designed to attack water quality through three agencies, EPA, AG, and ODNR. Each agency has a different focus to come at the problem. Funding for the program was included in the introduced state budget. The House removed the funding and introduced House Bill 7 which creates a new funding mechanism for H2Ohio. H2Ohio does not take the heavy handed regulatory approach we had seen previously. The House added a budget amendment that takes judicial standing away from bodies of water. This is in direct response to the Lake Erie Bill of Rights where Lake Erie was giving standing to sue parties who infringed on the Lake. Page 4 of 215 The OMA is working in the Senate to get an affirmative defense against certain lawsuits if a manufacturer is in total compliance of their air contaminant permits. Unemployment Compensation The legislature remains on the sideline of true unemployment compensation reform.