07/01/2025

ACEC Ohio Legislative Update --July 1, 2025

Legislative Update

Governor Signs HB 96 – FY 2026-2027 GRF Budget Bill

On Monday, June 30, Governor Mike DeWine signed into law the $90.5 billion General Revenue Fund (GRF) Budget for Fiscal Years 2026-2027, House Bill 96. The Governor utilized his line-item veto authority in a significant way, striking 67 provisions.

Key Highlights of HB 96:

• Brownfield Remediation Program: $100 million per year, now expanded to support demolition and infrastructure development in addition to remediation.
• Demolition & Site Revitalization Program: $21.5 million annually to support site clearance and redevelopment.
• Public Transit Funding: $37 million per year.
• Residential Economic Development Districts: $12.5 million annually to fund large-scale housing projects (minimum 100 units) in municipalities and townships.
• Residential Development Revolving Loan Program: $50 million per year aimed at boosting single-family housing in smaller counties (under 75,000 population).
• Historic Preservation Tax Credit: Increased from $60 million to $75 million annually, benefiting design professionals involved in restoration and reuse projects.
• Welcome Home Ohio Program: Continues at $45 million per year to support workforce housing.
• Ohio Housing Trust Fund and Housing Finance Agency: Both maintained, ensuring continued funding streams for affordable housing initiatives.

H2Ohio Funding by Agency (Annual Allocations):

• Ohio Department of Agriculture: $53.6 million
• Ohio Department of Natural Resources (ODNR): $21 million
• Ohio EPA: $7.5 million

Notable Vetoes of Interest:

Governor DeWine vetoed several provisions that could have had long-term impacts on public policy, local governance, and infrastructure:

• Property Tax Reform Measures: Vetoed several provisions aimed at capping or adjusting school district levies and budget commission authorities.
• Partisan School Board Elections: Vetoed proposal to make local school board races partisan.
• Energy Policy Changes: Vetoed language on bypassable electric transmission charges.
• Eminent Domain Restrictions: Vetoed a provision prohibiting state/local governments from using eminent domain for recreational trail development.
• H2Ohio Limitations: Vetoed a provision banning ODNR from using H2Ohio funds to purchase land or conservation easements—preserving the state's ability to implement holistic water quality strategies.
• Oil & Gas Leasing and Orphan Well Remediation: Vetoed changes that conflicted with state goals for efficient resource management and lease revenue generation.

If you are interested in the Governors Veto Message click here.

The budget is in effect as of today, July 1, 2025.

U.S. Senate Passes Reconciliation Bill with Tax Provisions 

Today, the United States Senate passed the budget reconciliation bill by a vote of 51-50, with Vice President Vance breaking the tie. Key provisions for ACEC members:

• The corporate tax rate is retained at 21%.
• The Section 199A passthrough deduction is permanently extended at 20%.
• Language restricting the use of state workarounds to the state and local tax (SALT) cap for passthrough businesses was dropped.
• The SALT cap is increased from $10,000 to $40,000 (with annual adjustments) through 2029. The phaseout threshold for the increased SALT cap begins at incomes over $500,000.
• R&D deductibility is permanently restored starting in 2025. In addition, firms with less than around $31 million in gross receipts (this is the IRC Section 448(c) cash accounting threshold) are eligible for retroactive relief for 2022-2024. Firms with more than $31 million in gross receipts can elect to speed up unused deductions from 2022-2024.
• The Section 127 provision that allows employers to assist employees with educational expenses and student loan repayment is permanently extended and the $5,250 limit is indexed for inflation going forward.

If the House passes the Senate version, it will go to the President for his signature. If the House makes any changes to the bill, it will have to go back to the Senate for approval.

We will keep you updated.

July 3 UPDATE: Congress Passes Reconciliation Bill with Tax Provisions

See link for summary of bill signed by the President: 2025 Reconciliation Bill - Tax