06/28/2021

ACEC Ohio Legislative Update-June 29, 2021

House Bill 110 GRF Budget Bill:

The conference committee voted unanimously on its compromise report yesterday afternoon, and last night the Ohio Senate voted 32-1 and the Ohio House 82-13 to send the final bill to the governor.

In total, the measure appropriates just under $74.1 billion over Fiscal Years 2022 and 2023 from the General Revenue Fund. (Appropriation Spreadsheet and Comp Doc)

Highlights include:

• The committee restored $250 million in earmarked federal dollars for broadband grants through HB 2 ($230 million in FY22 and $20 million in FY23), and removed the government-owned broadband network provisions
• The legislature DID NOT extend the ability of public bodies to meet remotely, so the current authority to do so expires July 1st
• Keeps Senate provision removing requirement that the line item Public Transportation – State be used for grants to support public transit
• Appropriates $150 million for demolition and site revitalization and $350 million for Brownfields
• Require H2Ohio Agency Directors (Ag, ODNR, EPA, Lake Erie Commission) to testify on their annual report of H2Ohio-funded activities before the General Assembly 

The General Assembly also finalized a 3% tax cut and eliminated the state’s highest tax bracket as well as increasing the income minimum at which tax brackets begin.

• For taxable years beginning in 2021, reduces tax rates by 3%. There is no further reduction in 2022.
• In 2021 and thereafter, eliminates the highest tax bracket (reducing the number of brackets from five to four).
• Further reduces the tax rate of the new highest bracket, to 3.99%. If current rates were only reduced by 3%, the rate applicable to that bracket (income greater than $110,650 in 2021) would be 4.281%.
• Increases the income level at which the first tax bracket begins, from $22,150 to $25,000 in 2021.

Other highlights:

• Removes Senate-added force account limit provisions
• Authorizes a new type of “mega project” to be eligible for the job creation tax credit if it pays over 300% of FPL and either includes at least $1 billion in capital investment or creates at least $75 million in annual payroll
• Restores House funding for local development projects ($10 million per year to the Foundation for Appalachian Ohio, $4 million per year to GRIT without earmarks)
• Keeps the municipal tax withholding provisions but changes the language to have it only apply to tax year 2021 (making 2020 refunds prohibited)
• Restores House provisions prohibiting use of eminent domain in Lake and Mahoning Counties
• Retained the Senate’s expansion of Rural Industrial Park Loan Fund, clarifying counties currently eligible will continue to be eligible in additional to all other rural counties

The Legislature also went with the Cupp-Patterson Fair School Funding Plan in terms of school funding (funded just through the biennium in this budget).

Appropriating funds from the federal American Rescue Plan Act (ARPA), in House Bill 168:

• Water and Sewer Quality Program to provide grants to Ohio's counties, townships and municipal governments to address serious water issues and ensure communities have clean and safe water.  $250 million will be administered by the Ohio Department of Development. 
• $422 million will be available to every community across the state to support local and regional economic recovery initiatives.  This is the first of two rounds of funding local governments will receive as a result of ARPA to address the economic impact of the pandemic.  The Office of Budget and Management will launch an application portal with payments expected to begin in early July. 
• Approximately $1.5 billion will be used to repay the Unemployment Insurance Trust Fund advancement from the federal government. This will help relieve Ohio businesses from experiencing large increases in their federal unemployment payroll taxes.
• $84 million to support infrastructure improvements at Ohio's pediatric behavioral health care facilities.  The Ohio Department of Mental Health and Addiction Services will administer this program.

Congressional Infrastructure Bills:

Just released an ACEC Report on the various infrastructure spending proposals and the impact on the Engineering Industry. The ACEC study estimates that $1.2 trillion bipartisan agreement would create more than 82,000 full and part time jobs in engineering and design services industries, generate $62 billion in A/E industry wages and add $75 Billion to GDP.  See ACEC Report  here.

See Legislative Update from June 25th for more Congressional Information at Legislative Updates