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House approves majority of MBR bills prior to spring recess

The Ohio House this week placed its stamp of approval on nine bills included in the Governor’s Mid-Biennium Review (MBR) package. The governor’s original proposal was more than 1,600 pages, which the House broke up into 14 bills. Proposed increases to the state’s severance and commercial activities taxes are among the more controversial policies included in the governor’s MBR that have not yet received legislative attention.

The following bills have been approved by the House:

House Bill 369: Sponsored by Rep. Robert Sprague (R- Findlay), the bill includes various mental health/drug addiction components.

House Bill 483: Sponsored by Rep. Ron Amstutz (R- Wooster), the bill includes appropriation changes and general policy changes.

House Bill 484: Sponsored by Reps. Cliff Rosenberger (R- Clarksville) and Tim Brown (R- Bowling Green), the bill includes higher education reform and will be considered in the Finance and Appropriations Subcommittee on Higher Education.

House Bill 485: Sponsored by Reps. Ryan Smith (R- Gallipolis) and Terry Johnson (R- McDermott), the bill creates the Office of Human Services Innovation within the Department of Jobs and Family Services. The office will be tasked with breaking down silos within government to provide assistance to recipients in a holistic manner by examining ways to better coordinate services, remove disincentives to work within current programs and standardize the eligibility policies across programs.

House Bill 486: Sponsored by Reps. Nan Baker (R- Westlake) and Gerald Stebelton (R- Lancaster), the bill includes various workforce development reforms.

House Bill 487: Sponsored by Rep. Andrew Brenner (R- Powell), the bill includes changes to the state’s education policies. The bill includes provisions seeking to reduce the state dropout rate and provides new solutions for the one million Ohio adults who never finished high school to work with two-year colleges and earn their diplomas.

House Bill 488: Sponsored by Reps. Mike Dovilla (R- Berea) and Al Landis (R- Dover), the bill deals with veterans issues.

House Bill 492: Sponsored by Rep. Gary Scherer (R- Circleville), the bill includes tax corrective changes.

House Bill 493: Sponsored by Reps. Barbara Sears (R- Sylvania) and Mike Henne (R- Clayton), the bill includes workers’ compensation reforms. 

House Finance Committee Chairman Ron Amstutz (R- Wooster) said the chamber was holding back the five remaining MBR bills for additional attention. He indicated that more bills would be introduced in the coming weeks, as some provisions of the original proposal were removed because legislators feel they require additional debate in stand-alone legislation. Sub-metering language that would establish a rate ceiling for utility services to multi-family properties is among the provisions removed from House Bill 483 for future consideration. Representative Ross McGregor has announced his intention to introduce a bill on the subject.

The legislature is currently on break until after the May 6 primary. The Senate is expected to act on most, if not all, of these proposals prior to summer recess in early June.

BWC reforms approved

HB 493 includes portions of the governor’s MBR related to workers’ compensation reforms. While the Bureau of Workers’ Compensation (BWC) and its Administrator, Steve Buehrer, have drawn widespread praise from most stakeholders, HB 493 was met with some skepticism from members of the House Insurance Committee. The issue to some members of the committee are two proposals contained in the omnibus reform bill, one dealing with BWC’s pharmaceutical program, and the other with how it handles out-of-state coverage for Ohio employers.

The first change deals with BWC’s First Fill program. As proposed in HB 493, the program aims to provide prescription medications to injured workers who need medication before their claim can be adjudicated. In the past, injured workers have had to front money for these prescriptions or assign them to their health insurance or other insurance programs such as Medicaid, despite the fact that they are properly related to a workers’ compensation claim. First Fill seeks to allow the Bureau to cover the costs of up to 14 days of medication for injured workers. If the claim is later allowed, the cost will be incorporated into the employer's experience rating as part of the claim cost. If the claim is disallowed, it will be absorbed by the State Fund. BWC estimates the cost of the program to be approximately $110,000 per year. Legislators expressed concern that the program could contribute to Ohio’s opioid addiction problem. However, attempts to limit the program through various amendments to the legislation were rejected.

The second program in HB 493 that caught legislators’ attention was what BWC is calling their “fronting” proposal. This proposal seeks to streamline workers’ compensation coverage for employers who use Ohio employees to perform work out of state, or who hire out of state workers to perform work they undertake in those states. Currently, employers must rely on reciprocal arrangements with others states’ workers’ compensation systems, or must secure workers’ compensation coverage through a third party when performing work out of state. Under the BWC proposal, the Bureau would set up an arrangement with one or more private third party workers’ compensation providers and allow employers to utilize these insurers on a one-stop-shop basis. BWC would bill the third parties on the employers’ behalf, and the employers would receive one bill from BWC for in-state and out-of-state work. Despite the support of some business groups, some legislators expressed concern with this program. Again, legislative attempts to alter this program were rebuffed.

Ultimately, the House Insurance Committee did report HB 493 with only minor changes. As noted above, the full House voted to approve the bill. Barring any unforeseen circumstance, the legislature is expected to pass the bill this spring and send it to the governor for his signature. 

General MBR modified prior to passage

HB 483, the MBR bill which includes various appropriations and general policy reforms, was heavily amended prior to its passage this week. The most voluminous of the MBR proposals with roughly 800 pages, HB 483 was amended to include controversial provisions, such as clarification that college athletes are not considered employees under state law, and financial penalties for any county that sends out absentee voter ballot applications to all voters within the county. House Republicans deemed the college athlete language as a proactive response to Northwestern University football players being granted the right to unionize.

The absentee ballot language was pulled from the bill prior to committee passage, but would have reduced a county’s Local Government Fund allocation by 10 percent if the county does not follow state law in regards to procedures for providing absentee ballots. The language was heavily criticized by Cuyahoga County Executive Ed FitzGerald, who voted to mail absentee ballots to voters countywide this week. Governor Kasich also opposed the measure.

The following provisions were among those to be included in the omnibus amendment and remain in the bill:

  • Establishes a period of four years after the completion of an engagement to bring a malpractice action against a surveyor
  • Sets the permanent salary of the Casino Control Commissioners at $30,000 per year
  • Creates the Workforce Training Pilot Program for the Economically Disadvantaged and provides $3 million in fiscal year 2015 for the program
  • Removes language that would require an individual to electronically file an application and weekly claims for unemployment benefits
  • Increases the venture capital technology credit cap to $26.5 million from $20 million
  • Allows high school dropouts between ages 22 to 29 to earn a diploma from a dropout recovery community school, an adult career center or a community college 

Legislation to watch

Motor Fuel Tax: Sponsored by Representatives Ryan Smith (R –Gallipolis) and Cliff Rosenberger (R – Clarksville), House Bill 517 would change the motor fuel receipts tax, currently imposed on gross receipts, to a petroleum activity tax to be imposed on a hybrid of gallonage and the average wholesale price of gasoline and diesel fuel. Senate Bill 323 is companion legislation that has been introduced by Senators Cliff Hite (R- Findlay) and Bill Seitz (Cincinnati). S.B. 323 has been referred to the Senate Ways and Means Committee.

Epinephrine Autoinjectors: Sponsored by Representatives Terry Johnson (R – McDermott) and Mike Duffey (R – Worthington), House Bill 296 will permit public schools to procure epinephrine autoinjectors in accordance with prescribed procedures and exempt schools from licensing requirements related to the possession of epinephrine autoinjectors. The bill passed the Senate on April 8.

Agricultural Nutrient Management: Sponsored by Senators Cliff Hite (R – Findlay) and Bob Peterson (R- Sabina), Senate Bill 150 will revise the law governing the abatement of agricultural pollution. Among the provisions included, the bill would require a person that applies fertilizer for the purposes of agricultural production to be certified to do so by the Director of Agriculture. The bill passed the House on April 9.

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

Aaron Ockerman
614-458-0026
aockerman@mcdonaldhopkins.com

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