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1. Turnpike bonding legislation heading to Senate 

This week the Ohio House passed House Bill 51, which authorizes the Ohio Turnpike Commission to issue revenue bonds for infrastructure projects. Following a rancorous debate on whether 90 percent of the bond revenue would go towards infrastructure improvements in Northern Ohio, as Governor Kasich had previously stated, members adopted an amendment requiring projects to have a nexus to the Turnpike in order for bond revenue to be used. The so called “guardrail” was previously absent from the bill due to concerns the provision could negatively affect the project’s bond rating.

Under the legislation, the Turnpike’s toll revenues are used to support the issuance of $1.5 billion in bonds that, when matched with local and federal funds, will provide $3 billion for road and bridge projects. The plan also directs $70 million of the bond proceeds to speed up the replacement of the Turnpike’s base pavement, of which some portions have not been repaired or repaved since its completion nearly 60 years ago.

The bill changes the name of the commission to the Ohio Turnpike and Infrastructure Commission. In order for a project to be considered for funding by the commission, it must first be reviewed and recommended through the Transportation Review and Advisory Council, which places needed projects into a list of tiers.

The governor will appoint two new public members for the commission.  Additionally, the bill shortens the terms for members appointed after July 1, 2013 to three years instead of eight. The legislation is scheduled for public testimony in the Senate Transportation Committee on March 5, 2013.

2. Department of Natural Resources pushes for expanded oil and gas requirements

In his testimony to the House Finance Subcommittee on Agriculture and Development, Ohio Department of Natural Resources (ODNR) Director James Zehringer outlined the areas in which the department has proposed expanding Ohio’s oil and gas requirements in House Bill 59, the biennium budget bill.

The following budget proposals were among the items outlined in Zehringer’s testimony:

Recording and notification of oil and gas leases:

Under the bill, once a contract is signed or later transferred, the transaction must be recorded with the County Recorder’s office and written notification must be provided to the landowner and/or mineral interest owner within 30 days. Additionally, it requires if a well has been permitted, the Division of Oil and Gas Resource Management must receive written notification of the transfer.

Technologically Enhanced Naturally Occurring Radioactive Material (TENORM):

HB 59 requires well owners to analyze the radium in TENORM-associated waste streams that are used in or result from the construction, operation or plugging of a horizontal well. Additionally, it requires that the material cannot be removed from the production location until it is analyzed.

Quarterly filing of oil and gas production records:

The department proposes that all owners of horizontal wells provide a statement of production of oil, gas and brine each quarter to ODNR rather than on an annual basis.

Prohibiting the transfer of treated brine without proper permit authorization:

The bill states that brine cannot be transferred for disposal to any entity unless the receiving entity is granted the necessary permit or authorization from ODNR through an administrative order. Zehringer said the language is intended to clarify ODNR’s position that underground injection remains the safest method for brine disposal.

Prohibiting the spreading of brine produced from horizontal wells on roads for dust and ice control:

Since 1985, the use of oilfield brine for road spreading to control dust and ice has been permitted upon approval by resolution of a local jurisdiction authority. HB 59 prohibits brine produced from horizontal wells to be spread on roads, while continuing to permit the brine from convention, vertical wells for this use.

According to Zehringer, the department’s preliminary estimates show 464 horizontal wells permitted—up from 118 in 2011. Of the wells permitted, 215 are estimated to have been drilled and 65 are currently producing.

HB 59 increases funding for the plugging of orphan wells—abandoned wells that have reached the end of their production life. The budget proposes increasing the Oil and Gas Well Plugging line item from $800,000 in Fiscal Year (FY) 2013 to $1.5 million in FY 2014 and 2015.

 3. Legislation to watch

Unemployment compensation: Sponsored by Representatives Derickson and Tim Brown (R- Bowling Green), House Bill 2 would require an unemployment compensation claimant to register with OhioMeansJobs—the electronic job placement system operated by the state—to be eligible for unemployment compensation benefits and require that a claimant contact a local one-stop office beginning with the eighth week of filing for unemployment compensation benefits. The bill is scheduled for possible amendments and a possible vote in the House Manufacturing and Workforce Development Committee on March 5, 2013.

Workforce Development Loan Fund: Sponsored by Senators Bill Beagle (R- Tipp City) and Troy Balderson (R- Zanesville), Senate Bill 1 creates the OhioMeansJobs Workforce Development Revolving Loan Fund. Under the bill, the Director of Development Services must administer the program and award funds to institutions, such as universities or proprietary schools. The institution must use the funds to award loans to individuals participating in a workforce training program that is administered by the institution and that has been approved by the Director. SB 1 is scheduled for a possible hearing in the Senate Workforce and Economic Development Committee on March 5, 2013.

Employer access: Sponsored by Senator Charleta Tavares (D- Columbus), Senate Bill 45 would prohibit employers, employment agencies, personnel placement services, and labor organizations from requiring an applicant or employee to provide access to their private electronic accounts. Additionally, the bill prohibits employers from penalizing an employee that refuses to provide access or refuses to provide the username and password to the employee's private electronic account. Under the bill, a violation of any of the bill's prohibitions is considered an unlawful discriminatory practice under Ohio's Civil Rights Law. The bill is scheduled for a hearing in the Senate Commerce and Labor Committee on March 6, 2013.

Insurance navigators: Sponsored by Representatives Barbara Sears (R- Sylvania) and Stephanie Kunze (R- Hilliard), House Bill 3 provides for the certification of navigators for the purpose of assisting individuals in purchasing health insurance through a health insurance exchange established under the Affordable Care Act. The bill is scheduled for a possible vote in the House Health and Aging Committee on March 6, 2013.

Powers of a receiver: Sponsored by Representative Peter Stautberg (R- Cincinnati), House Bill 9 makes various changes to the powers of a receiver. The legislation expands the powers of receivers to include the execution of deeds, leases, or other documents of conveyance of real or personal property. Additionally, HB 9 authorizes a court to order that property be sold free of all liens—other than a lien for real estate taxes and assessments—if a court finds it is in the best interest of the receivership estate that the property be sold clear of the liens. The bill is scheduled for possible amendments and a possible vote in the House Judiciary Committee on March 6, 2013.

For more information, please contact:

Michael Caputo

(non-attorney professional)

216.348.5770

mcaputo@mcdonaldhopkins.com

Rebecca M. Kuhns

(non-attorney professional)

614.458.0043

rkuhns@mcdonaldhopkins.com

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