Ohio House Passes State Operating Budget
After thousands of potential amendments were reviewed, a substitute bill accepted, omnibus amendment added, and stand alone amendments included, HB 166 (State Budget) passed the House this week. The legislation totals approximately $68.8 billion in general revenue fund allocations. Receiving strong Democratic support, the House Finance committee reported the bill to the House floor unanimously where it was passed by a 85-9 vote count. The bill now goes to the Senate for further debate and more changes.
The House amendments incorporate a number of tax changes including tax cuts (mainly for incomes below $88,0000), changes to the small business tax exemptions, and reducing other specific tax exemptions.
The bill eliminates the income tax on income below $22,250 and provides a 6.6% reduction in every other tax bracket. The Ohio Senate has started hearings also on the legislation due to the tight timeframe to finish the bill which is July 1st. CEA’s lobbying team continues to attend multiple hearings and discuss CEA priorities with legislators.
Here are some of the provisions in the budget that may be of interest:
- Construction and Manufacturing Mentorship Program - REMOVED FROM BILL
The introduced bill created the Construction and Manufacturing Mentorship Program which attempted to expose minors who are 16-or 17-years old to construction occupations and manufacturing occupations in Ohio through temporary employment with an employer.
CEA had major safety and operational concerns with this provision and submitted opponent testimony and its lobbying team reached out to multiple members to remove this provision.
- Coordinated Vendor Debarment
The bill also provides for a general provision in state law that prohibits any vendor who has been debarred on any list of debarred vendors from participating in state contracts including those specific sections and any other section of the Revised Code. The bill defines “participate” and “state contract” for purposes of the general provision.
HB 166 expands the scope of activities that are subject to regulation by applying the law to activities involving more than 3 linear or square feet of asbestos-containing material, rather than more than 50 linear or square feet as in current law. The introduced bill was changed to add a reference to the Asbestos Hazard Emergency Response Act.
- Increased Funding for Short Term Certificates
This provision was removed to be dealt with in a separate bill.
- Ohio Facilities Construction Commission (OFCC)
The bill eliminates a provision of law stating that the Executive Director of the Ohio Facilities Construction Commission must exercise all powers that the Commission possesses.
- Opportunity Zone Investment
Authorizes a nonrefundable tax credit equal to 10% of a taxpayer’s investment in an Ohio Opportunity Zone fund. Limits individual credits to $1 million per fiscal biennium and total credits to $50 million per biennium. Reduces the total biennial cap on the existing small business investment credit from $100 million to $50 million and otherwise modifies that credit. The bill allows certain credit transfers, expands who can hold them, and allows excess credits to be carried forward five years. Note that SB 8 an Opportunity Zone bill was placed into HB 166.
- Structural Steel Welding Standards
The provision requires a contractor, subcontractor, or project manager responsible for the structural steel welding on a construction project to ensure welders have valid certification, steel welds meet minimum codes, and inspections listed in the project's job specifications are completed by an AWS certified welding inspector. The language exempts certain structures. The provision authorizes the Superintendent of Industrial Compliance to certify municipal, township, and county building departments or private third parties to inspect structural steel welding projects to determine that the welding complies with the requirements.
The department of Health plans a multi-prong effort to combat lead poisoning in children, including abating properties, demolishing lead-blighted properties and supporting the training of licensed lead workers and contractors. The bill increase monies for tax credits.
- Ohio Turnpike and Infrastructure Commission Contracts
Authorizes the Ohio Turnpike and Infrastructure Commission to use a value-based selection process for projects that involve both design and construction elements in a single contract, rather than being required to select the lowest responsive and responsible bidder, as under current law.
(2) Authorizes the Commission to enter into contracts via a competitive proposal process, when the Commission determines that competitive bidding is not practical or advantageous to the Commission
(3) Raises the threshold for when a bond is required for goods and services contracts from $150,000 to $500,000.
(4) Authorizes the Commission to enter into contracts for the purchase of equipment, materials, and services without public advertising for the following: (A) construction of a temporary bridge; (B) temporary emergency repairs to a highway or bridge after a storm, flood, landslide, or other natural disaster; and (C) in response to circumstances created by an extraordinary emergency, as determined by the Commission.
(5) Authorizes the Commission to use a shorter form of public notice, currently available to state agencies and political subdivisions.
EDGE Program Report Finalized
The Department of Administrative Services responded to the Ohio Inspector General’s investigation of the EDGE Program. The background of this situation is that a State review started when the Ohio Inspector General received a complaint questioning how CTL Engineering Inc, an engineering firm that made $35.5 million in 2016, qualified as a disadvantaged business and continued to be recertified into the EDGE program. The initial investigation started with looking at CTL, but the IG eventually expanded its review to the entire EDGE Program.
The Inspector General’s report listed ten corrective recommendations. Per the IG process, the Department of Administrative Services, which oversees the EDGE Program, was then given time to produce a response.
Here are a few of the remedies DAS proposed:
- The Equal Opportunity Division (EOD) is in the process of writing an RFP for a new operating software system.
- DAS is reviewing the 10 yr limit. One possible option is to repeal this rule.
- EOD notified EDGE businesses that have exceeded the 10 yr limit, but certifications will remain valid until December 31, 2020.
- EOD hired a business analyst to identify program needs and improvements to its software.
See the complete DAS response below
Opportunity Zone Bill Continues to Make Its Way Through the Legislature
Senate Bill 8 passed the Ohio Senate unanimously and is now undergoing hearings in the Ohio House Economic & Workforce Development Committee. The bill had its second hearing this week. SB 8 was also placed in the State Operating Budget.
The legislation does the following:
- Authorizes a nonrefundable income tax credit equal to 10% of a taxpayer’s investment in an Ohio opportunity zone.
- Limits the total credit allowed to any individual to $1 million per fiscal biennium, and limits the total credits allowed to all taxpayers in a biennium to $50 million.
- Reduces the total biennial cap on the existing small business investment credit from $100 million to $50 million.