Weekly Legislative Report Report created on April 14, 2014 Week in Review Friday, April 11, 2014

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1 Weekly Legislative Report Report created on April 14, 2014 Week in Review Friday, April 11, 2014 FY14-15 BUDGET State revenues continued to come in over estimates during the month of March, reaching a total of $370.8 million or 2.6 percent over estimates for the fiscal year to date. March itself was also over estimates by nearly $153.5 million or 12.4 percent. However, Office of Budget and Management (OBM) Director Tim Keen remains cautious as he said, via an from his spokesman David Pagnard, OBM continues to watch this trend with some caution as the tax-filing season unfolds. ECONOMIC DEVELOPMENT Gov. John Kasich and U.S. Rep. Marcia Fudge (D-Warrensville Heights) sent letters to U.S. Transportation Secretary Anthony Foxx urging the U.S. Department of Transportation (USDOT) to grant Ohio a waiver to the department's Disadvantaged Business Enterprise (DBE) program for upcoming projects in the city of Cleveland. ECONOMY According to the Ohio Department of Job and Family Services (ODJFS), the composite index of leading economic indicators for Ohio remained at 93.3 from November to December The lack of change in the composite index is suggesting weak employment growth in the coming months, according to ODJFS. ENERGY Energy aggregators, brokers and consultants announced the formation of a new trade association, Energy Professionals of Ohio (EPO), to lobby on the benefits of a competitive energy market. The group will also promote the interests of licensed energy brokers and consultants in Ohio. A bill that would freeze renewable energy and energy efficiency standards set in 127-SB221 (Schuler) at current levels while a study committee considers the effects of the mandates drew 16 opponents to testify at a Senate Public Utilities Committee hearing Wednesday. A common theme among opponents was that the standards set by SB221 are working well and that SB310 (Balderson) would effectively halt progress being made in moving to more efficient and clean forms of energy. ENVIRONMENT The Ohio Environmental Protection Agency (Ohio EPA) adopted new general permit air pollution control standards for oil and gas well site production operations, which EPA Deputy Communications Director Chris Abbruzzese said are an "evolution" of general permits first issued in 2011 to protect air quality. Abbruzzese said the modifications adopted in the new standards will help identify natural gas leaks earlier, which is beneficial for both the environment and the oil and gas industry.

2 The Land Trust Alliance Midwest Program presented the Conservation Movers and Shakers Award to the Coalition of Ohio Land Trusts (COLT) Steering Committee for its contributions to restore, protect and connect Ohio's natural and urban areas. MID-BIENNIUM REVIEW The main mid-biennium review spending and policy bill, HB483 (Amstutz), passed the House on Wednesday after two rounds of changes in committee earlier in the week. Republicans added a shortlived provision to dock counties 10 percent of their local government funding if they violate absentee ballot laws, a shot at Democratic gubernatorial candidate Ed FitzGerald's challenge to the ban on local governments' sending unsolicited absentee applications. The GOP lawmakers pulled it a day later in committee, after Gov. John Kasich objected, but said Auditor Dave Yost would still have the tools to penalize Cuyahoga County if it followed FitzGerald's plan. Lawmakers also dumped provisions allowing utilities to seek ratepayer recovery for the cost of cleaning up old manufactured gas facilities that date as far back as the 19th century. Some other controversial elements stayed in, like the voiding of a rule on campaign spending disclosure, a provision aimed at preventing unionization of college athletes, and the addition of chiropractors to the list of providers who can clear a student athlete to return to play under the state's youth concussion law. The House passed anti-addiction measures twice Wednesday as they replicated language of HB369 (Sprague), the addiction and mental health mid-biennium review (MBR) bill, in HB483, saying the duplication sends a message about the urgency of addressing the opiate epidemic to the Senate. They also used HB485 (Smith-Johnson), the human services MBR bill, as a vehicle to send House-passed addiction bills to the Senate again, attaching HB314, HB341 and HB366. They also included the language of HB352, which deals with licensing therapeutic wilderness camps. Wednesday's House session also included passage of mid-biennium review bills HB484 (Rosenberger- Brown), addressing higher education; HB486 (Baker-Stebelton), addressing economic and workforce development; HB487 (Brenner), addressing K-12 education; HB488 (Dovilla-Landis), on veterans; HB492 (Scherer), on tax administration; and HB493 (Sears-Henne), on workers' compensation. Ahead of Wednesday's House session, the House Insurance Committee on Tuesday saw members from both parties cross the aisle over unsuccessful amendments to HB493, the workers' compensation MBR, to require disclosure of premium calculation methods and to require savings from prospective billing to be directed to savings on future rates, among other proposals. The House Finance and Appropriations Committee amended both the higher education mid-biennium review (MBR) bill, HB484 (Rosenberger), and the addiction/mental health MBR bill, HB369 (Sprague), before reporting them out. Changes to HB484 included removing the requirement that higher education institutions recommend ways to increase faculty workload by 10 percent and creating a workgroup to study the Ohio College Opportunity Grant. Changes to HB369 redirected the $47.5 million appropriated in the original FY14-15 budget for mental health services before the state expanded its Medicaid program. The HB369 amendment used those funds as follows: - $24.85 million to fund development of about 900 recovery housing beds and six regional "step-down" crisis centers for people who are leaving psychiatric hospitals but need more time to stabilize. - $5 million for the Start Talking prevention initiative. - $3.75 million for the Residential State Supplement expansion. - About $5 million to assist the Ohio Department of Mental Health and Addiction Services (OhioMHAS) with the realignment of federal substance abuse grants.

3 The House Military and Veterans Committee made final changes to veterans MBR measure HB488 (Dovilla-Landis) Tuesday ahead of passage Wednesday, including allowing employers to adopt preferential hiring policies for veterans and increasing the penalties for identity theft involving an active duty service member. Natural Resources Director James Zehringer and Environmental Protection Agency Director Craig Butler testified in favor of the administration's agricultural mid-biennium review proposals in HB490 (Hall- Thompson) Tuesday, with Zehringer saying it makes sense to transfer manure management authority to the Ohio Department of Agriculture for small farms, as the agency already oversees large farms and will also regulate fertilizer application once SB150 (Hite-Peterson) passes. Senate President Keith Faber (R-Celina) withheld comment Tuesday on the revised mid-biennium review legislation being sent to his chamber, saying he's yet to discuss changes with his own members or Speaker William Batchelder (R-Medina) or the governor but adding he's interested in ensuring the bills maintain "spending restraint." Tracked Bills HB5 HB9 HB24 HB46 HB59 HB81 HB135 MUNICIPAL CORPORATIONS INCOME TAXES (GROSSMAN C, HENNE M) To revise the laws governing income taxes imposed by municipal corporations. Current Status: 11/19/ Referred to Committee Senate Finance 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: 12/11/ Consideration of Senate Amendments; Did Not Concur Vote 0-94 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: 12/4/ House Ways and Means, (Third Hearing) SMALL CLAIMS DIVISION-TAX APPEALS BOARD (AMSTUTZ R) To create a small claims division of the Ohio Board of Tax Appeals. Current Status: 2/13/ Referred to Committee House Ways and Means 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/ SIGNED BY GOVERNOR; Eff. 6/30/2013; Some Eff. 9/29/2013; Others Various Dates TAX EXPENDITURES EFFECTIVENESS (DRIEHAUS D, FOLEY M) To provide for the periodic appraisal of the effectiveness of tax expenditures. Current Status: 2/27/ Referred to Committee House Policy and Legislative Oversight 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.

4 Current Status: 11/12/ SUBSTITUTE BILL ACCEPTED, Senate Ways and Means, (Second Hearing) HB138 HB198 HB212 HB219 HB277 HB284 HB289 HB299 TAX APPEALS BOARD LAW CHANGES (MCCLAIN J, LETSON T) To make changes to the law governing the Board of Tax Appeals Current Status: 7/11/ SIGNED BY GOVERNOR; Eff. 10/11/2013; Some Provisions Other Dates 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. Current Status: 4/1/ SUBSTITUTE BILL ACCEPTED & REPORTED OUT, House State and Local Government, (Sixth Hearing) SEVERANCE TAX-HORIZONTAL WELLS (HAGAN R) To levy a tax on the severance of oil, gas, condensate, and natural gas liquids from horizontal wells. Current Status: 1/21/ House Agriculture and Natural Resources, (First Hearing) 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: 12/4/ House Ways and Means, (Third Hearing) STATE-POLITICAL SUBDIVISION ANNEXATIONS (STAUTBERG P) To require that the state or a political subdivision real estate owner be included in determining the number of owners needed to sign a petition for an expedited type-ii annexation, unless the real estate is a road or road right-of-way. Current Status: 2/25/ REPORTED OUT, House State and Local Government, (Fourth Hearing) 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/ Referred to Committee House Ways and Means 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. Current Status: 4/8/ Senate Finance, (Third Hearing) PROPERTY VALUATION COMPLAINTS (GROSSMAN C) To require counties, municipal corporations, townships, and school boards that file complaints against the valuation of property they do not own to pass a resolution approving the complaint. Current Status: 1/14/ House State and Local Government, (First Hearing)

5 HB311 HB358 HB375 HB422 HB467 HB472 HB478 HB492 HB497 HCR14 TAX-RELATED LAW (BOOSE T, RETHERFORD W) To correct and modify recent amendments to tax-related law, to lengthen the maximum term of a property tax levy for the purpose of zoological parks operated or supported by a county, and to declare an emergency. Current Status: 12/19/ SIGNED BY GOVERNOR; Eff. 12/19/2013 JOINT ECONOMIC DEVELOPMENT ZONE CONTRACTS (SCHURING K) To impose a 90-day moratorium on the authority of townships and municipal corporations to approve new joint economic development zone contracts and new joint economic development district contracts devised under the nonrestricted procedures. Current Status: 12/10/ House State and Local Government, (First Hearing) MBR-SEVERANCE TAX-HORIZONTAL OIL AND GAS WELLS (HUFFMAN M) To levy a severance tax on well owners of oil and gas severed from horizontal wells, to create a nonrefundable income tax credit for the amount of horizontal well severance tax paid, and to repeal a cost recovery assessment imposed on oil and gas well owners. Current Status: 2/26/ House Ways and Means, (Seventh Hearing) TENNANT-MANUFACTURED HOME PARK RESIDENT-PUBLIC UTILITY SERVICE (FOLEY M, BLAIR T) To create requirements regarding the measurement and billing of tenant and manufactured home park resident public utility service. Current Status: 3/19/ House Public Utilities, (First Hearing) BIENNIAL BUDGET PREPARATION (BUTLER, JR. J, ROMANCHUK M) To provide for the preparation of a state biennial budget independent of that submitted by the Governor. Current Status: 3/18/ House Finance and Appropriations, (First Hearing) MBR-MID-BIENNIUM BUDGET REVIEW (MCCLAIN J) To make operating and other appropriations and to provide authorization and conditions for the operation of state programs. Current Status: 3/26/ House Ways and Means, (Third Hearing) NEW MARKETS TAX CREDIT (BOOSE T) To eliminate the requirement that a taxpayer receive a federal New Markets tax credit in order to qualify for the state New Markets tax credit. Current Status: 3/18/ Referred to Committee House Ways and Means MBR-TAXATION (SCHERER G) To provide authorization and conditions for the levy and administration of taxes in this state. Current Status: 4/9/ PASSED BY HOUSE; Vote 91-0 CAPITAL APPROPRIATIONS (AMSTUTZ R) To make capital appropriations and changes to the law governing capital projects and to make reappropriations for the biennium ending June 30, Current Status: 4/1/ SIGNED BY GOVERNOR STATE VOLUME CAP (ROMANCHUK M) To express the General Assembly's support of federal legislation to remove the State Volume Cap for Private Activity Bonds for water and wastewater infrastructure projects. Current Status: 4/1/ House State and Local Government, (Third Hearing)

6 SB1 SB2 SB14 SB52 SB88 SB98 SB210 SB309 OHIOMEANSJOBS WORKFORCE DEVELOPMENT REVOLVING LOAN FUND (BEAGLE B, BALDERSON T) To create the OhioMeansJobs Workforce Development Revolving Loan Fund, to create the OhioMeansJobs Workforce Development Revolving Loan Program, to allocate a portion of casino license fees to finance the loan program, and to make an appropriation. Current Status: 7/11/ SIGNED BY GOVERNOR; Eff. 10/11/2013 OHIO'S WORKFORCE DEVELOPMENT LAW (LEHNER P, BEAGLE B) To require a local workforce investment area to use OhioMeansJobs as the local workforce investment area's job placement system, to rename county one-stop systems, and to make other changes to Ohio's Workforce Development Law. Current Status: 4/10/ Referred to Committee House Manufacturing and Workforce Development 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. Current Status: 9/24/ Senate Finance, (First Hearing) PROPERTY TAX COMPLAINTS (COLEY W) To permit property tax complaints to be initiated only by the property owner. Current Status: 6/18/ Senate Ways and Means, (Fourth Hearing) 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/ Senate Insurance and Financial Institutions, (First Hearing) STATUTORY AGENTS (OBHOF L, KEARNEY E) To expand the list of entities that may serve as statutory agents. Current Status: 2/18/ SIGNED BY GOVERNOR; Eff. 5/20/2014 INCOME TAX RATE REDUCTION (WIDENER C) To provide for a permanent income tax rate reduction of 4% for all tax brackets beginning in Current Status: 2/25/ Senate Finance, (Fourth Hearing) NEW MARKETS TAX CREDIT (BEAGLE B, TAVARES C) To modify the qualifications for the New Markets Tax Credit and the schedule for receiving the credit. Current Status: 3/31/ Referred to Committee Senate Ways and Means