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May 25, 2012

Local gov’t MBR does not change LGF formula Thanks to widespread concern and questions about a new, proposed undivided Local Government Fund (LFG) formula for distributing dollars within counties, the proposal was not incorporated into the Local Government Mid-Biennium Review (MBR) bill (House Bill 509). Senator Bill Seitz (R-Cincinnati) was hoping to modify the undivided LGF distribution formula in statute and the process for adopting an alternative formula with the general goal of lessening counties’ allocations while increasing allocations for townships and smaller municipalities. His proposal is predicated on the notion that counties will receive new revenue from casinos while municipalities and townships will experience a decline in revenue due to the elimination of the estate tax. Sen Bill Seitz

CCAO opposed the proposal. Others groups, like the Ohio Municipal League, argued that they needed to better understand the proposal and how it impacted local jurisdictions – who wins and

who losses. More time is needed to run examples with the proposed statutory formula as well as to better understand the level of casino revenues coming to counties and cities. Subsequently, Senator Seitz did not offer his new, proposed approach to distributing LGF dollars but did win approval for an amendment that requires county auditors to report to the Auditor of State, by November 1, 2012, their formula for allocating the county undivided local government fund and the dollar amount distributed in 2012. Senator Seitz declared he is “deadly serious” and steadfast in his effort to change the statutory formula and the process for adopting a local alternative. He hopes the data collected by the Auditor of State’s Office will assist in his future efforts.

On another front, the compromise on health department office space phase-out was not added to the Local Gov’t MBR bill. Moreover, the phase-out language originally in the MBR and

Senator Seitz

declared is he

“deadly serious” and

steadfast in his effort

to change the

statutory formula

and process for

adopting a local

alternative.

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supported by the Kasich Administration and the House was removed by the Senate State & Local Government & Veterans Affairs Committee. Even though CCAO and the Association of Ohio Health Commissioners (AOHC) reached an agreement last Friday, Senate Leadership contended that more time was needed to vet the compromise and assure that it was developed in a balanced manner. CCAO is disappointed that the compromise, which both CCAO and AOHC were honoring, was not a part of HB 509. HB 509 was expected to be passed this week, but instead will be held over until the legislature returns in early June. The legislation was taken up for Senate floor consideration on both Wednesday and Thursday; however, the bill was informally passed during the discussions. The delays are not tied to the current provisions in HB 509 but other business being considered by the General Assembly. When the bill is finalized in the near future, CCAO will report in Statehouse Report the many provisions impacting county government. In the meantime, CCAO Staff would like to thank the membership for responding to our grassroots call to lobby on the LGF and health department provisions. You are CCAO’s best and most effective asset! If you have questions about HB 509, please feel contact CCAO Managing Director of Policy Cheryl Subler at csubler@ccao.org.

Legislature passes main MBR bill (HB 487)

On Wednesday, the House and Senate took final action on the general state government

component of Gov. John Kasich's mid-biennium review budget (House Bill 487), as both

chambers adopted a conference report on the measure.

The House adopted the report on a vote of 56-38 despite continued

opposition from Democrats. The Senate voted 24-8 to send it to the

Governor's desk for his signature.

The final version of the bill did not include the Senate language creating a moratorium on commissioners undertaking new source-separated recycling initiatives as detailed in last week’s Statehouse Report. CCAO Policy Staff thanks those commissioners and staff who reached out to members of the conference committee to note our opposition to this language. Gov. John Kasich A few other items to particularly note include: 1) permissive authority for any county to merge JFS operations (currently restricted to Hocking, Ross, and Vinton Counties); 2) changes to court reporter transcript costs; 3) additional funding for Clean Ohio; and 4) changes to county investment authority. The following is an analysis of provisions within HB 487 affecting county government:

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General Local Government Provisions Streamlining Government Clearinghouse Website

Requires the Auditor of State to establish and maintain an online clearinghouse for political subdivisions about streamlining government operations, collaboration, and shared services to reduce the cost of government in the state. The bill requires the website, among other things, be free, searchable, and allow political subdivision input into site content.

Joint Purchasing Online Clearinghouse

Requires DAS to establish and maintain a website to serve as an online clearinghouse with information about existing joint purchasing programs between or among political subdivisions. The bill requires the website, among other things, be free, searchable, and allow political subdivision input into site content.

DAS Role in County Personnel Administration

Clarifies that the Department of Administrative Services’ (DAS) authority over civil service matters extends only to state employees, and not counties or general health districts. CCAO was successful in working with DAS to amend the bill to further clarify that fall back rights for certain employees in the unclassified services of the state are applicable only to state, and not county, employees.

Compressed Natural Gas Study

Requires DAS to conduct a study of the use of compressed natural gas in the state and political subdivision motor fleets.

County Investment Authority

Modifies provisions regarding the investment of county inactive moneys that were adopted previously to ORC Section 135.35 in HB 225 which were effective on March 22, 2012.

Elevates the authority to invest in bonds or other obligations that have a maturity date beyond 5 years. HB 225 allowed up to 25% of the county’s average portfolio to be invested in obligations that matured after a period of 10 years or more.

Maintains the authority to invest in any bond of obligation of any political subdivision of the state as long as the maturity date is matched to the debt and the investment is approved by the county’s investment advisory committee. Prior to HB 225 the county could only invest in debt of a political subdivision located within that county.

Courts Eligibility Requirements for Judges

Establishes the requirement that a candidate for judge must either practice law or serve as a judge of a court of record for a combination of 6 years. The bill eliminates a previous requirement that only 2 of the years of practice of law had to be in Ohio and now requires all of the time in the practice of law to have been done in Ohio.

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Court Reporter Transcript Costs

Allows court reporters to charge only their actual costs of making copies, and requires them to provide electronic copies free of charge. Court reporters currently charge a per page fee for the original transcript prepared from their stenographic notes. They then are allowed to charge one half of that per page fee for all copies of the transcript that they provide. The law change is in line with the costs allowed for making copies under the public records law, and will reduce the costs of transcriptions that are provided to county prosecutors, and public defenders which are both paid for from the county general fund.

Agriculture and Natural Resources Clean Ohio funding

Includes a $42 million appropriation to the Clean Ohio Fund’s Agricultural Easement Program and Green Space Conservation Program (Under the executive proposal, only just $6 million was allotted this year for the Clean Ohio Trails Fund.)

Health and Human Services State agency reorganization and collaboration

Elevates the state Medicaid Director position to a cabinet level position, granting him the same authority as standing agency directors as the Director of the Office of Medical Assistance. Under current law, the Medicaid Director reports to the Director of the Ohio Department of Job and Family Services. The bill transfers ODJFS’ duties and authority regarding Medicaid to the Office of Medical Assistance.

Calls for a study to examine breaking the Office of Medical Assistance off from the Ohio Department of Job and Family Services, creating a separate stand-alone agency.

Requires the health and human services state agencies (i.e. the Departments of Job and Family Services, Aging, Health, Education, Mental Health, and so on) to collaborate on revising Medicaid eligibility standards and determination procedures to make both more uniform across the spectrum of programs and services.

Allows the exchange of individual’s information between state agencies and programs relating to an individual’s eligibility or enrollment in a health plan or government public benefit program, so long as the information is necessary or will improve such a program. The bill also imposes several conditions to protect individuals’ confidential information and safeguard the agencies’ use of such information, and creates a “health information exchange” and corresponding rule-making authority in terms of the use of a technical infrastructure to exchange such information between agencies/programs.

Job and Family Services

Authorizes the creation of a joint JFS district (merged county JFS departments) between any two counties, expanding on the authority previously limited in statute to Hocking, Ross, and Vinton counties.

Changes the laws governing sanctions for noncompliant participants in the Ohio Works First, or cash assistance, program. These changes are expected to better streamline the sanctioning process and assist counties in reaching their federally required work participation rates.

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Requires early childhood education providers to participate in the Step Up to Quality Program, administered by ODJFS.

Addiction Services

Establishes in one or more of seven specific counties the Biometric Enrollment and Verification System Pilot Project, for the purposes of reducing drug diversion and doctor shopping, and earmarks $500,000 to be used for the program. The seven counties are: Athens, Gallia, Jackson, Lawrence, Meigs, Scioto, and Vinton. Participating counties will be selected by a vendor on contract to implement the project.

Creates a pilot program to provide to certain opioid- and/or alcohol-dependent offenders within the criminal justice system medication to prevent relapse upon release. The program must be conducted in Franklin and Scioto counties, but may be operated in additional counties as well. The pilot program can serve up to 150 offenders who meet four specific criteria, and the bill includes a $1M earmark for the program.

Requires ODADAS to develop and administer a comprehensive statewide gambling addiction services plan. Veterans are included among the other examples of underserved groups to be addressed in the plan.

Bureau for Children with Medical Handicaps and Medicaid Managed Care

Changes the law prohibiting individuals in the BCMH program who have cystic fibrosis, hemophilia, or cancer from participating in Medicaid managed care.

Long-term care facilities/County homes/Aging Services

Provides an additional $30M to be spent on skilled nursing facility quality bonuses. Increases to $5000 (from $400) the maximum amount that may be in a county home’s

reserve fund at one time. Modifies the Certificate of Need law to reflect current practices and clarify certain

provisions, and makes changes to the processes and requirements regarding bed relocations.

Requires the Ohio Dept. of Aging to establish the Aging in Place pilot program in Butler, Clermont, Hamilton and Warren counties, to be operated for two years and enroll up to 180 eligible individuals to receive home repairs and modifications.

Modifies some eligibility criteria for the Home First component of the Assisted Living Program.

Environmental Issues Quick Take Authority for Water and Sewer Districts When under a Consent Decree

Specifies that a public exigency exists permitting quick take authority when an improvement is required as result of federally imposed or state imposed consent decree that prohibits future sewer inflows, combined sewer overflows, or sewer backups.

Authorizes a board of commissioners or regional water and sewer district to appropriate and take possession of land without a prior jury assessment of compensation and damages when such a public exigency exists. Supplements existing law which authorizes quick take authority in cases where a pollution abatement order has been issued to a sewer district by a health department or by Ohio EPA.

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Property Tax Issues Tax levy authority for subdivisions that withdraw from a regional transit authority

Authorizes a township or municipal corporation that withdraws from a regional transit authority (RTA) between July 1, 2011 and November 5, 2013 to place on the ballot the question of a property tax levy for the purpose of providing transportation services in the respective geographic area.

Provides that if the ballot issue is approved, the affected area’s participation in the RTA terminates on December 31 of the year in which the election is held, and the collection of property taxes on behalf of the RTA cease on that date.

Authorizes any affected township or municipal corporation to combine the withdrawal from a RTA and a new property tax levy for transportation services into a single ballot issue.

Increases property tax revenues for jurisdictions on a permissive basis and may reduce property tax revenues to an RTA where a portion of the service area has withdrawn.

Enterprise Zone Agreement Extension

Extends the time during which local governments may enter into enterprise zone agreements by one year, to October 15, 2013.

Reduces property tax revenue to counties and to schools where the enterprise zone agreement is not subject to school district approval.

Real Property Valuation

Provides that real property is to be valued on the true value of the fee simple estate as if the property is unencumbered by mortgages, liens and other claims on the property.

Allows county auditors to consider factors other than the sale price in determining true value, if the property has been the subject of an arm’s length sale between a willing seller and a willing buyer.

Specifies that the effective date of this change, for each county, is the first year after tax year 2012 when that county goes through a sexennial or triennial update.

Tends to result in higher real property valuations, since unencumbered sellers may tend to sell at prices more in line with their perceptions of long term valuation, and would not face short term pressures to sell at reduced prices in order to meet the terms of encumbrances

Tax Increment Financing Exemption for Residential Property

Allows townships to provide a property tax exemption for property consisting of at least four residential units pursuant to a tax increment financing resolution if construction on the project begins between April 1, 2012, and December 31, 2013, and if the tax increment financing resolution was adopted before December 14, 2001.

Sales and Use Taxes

Sales and Use Tax Exemption for Aerospace Vehicle Research and Development Activities

Creates a sales and use tax exemption for tangible personal property and services used or consumed in performing research and developmental activities with respect to

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aerospace vehicles, parts, components, equipment and technology associated with testing aerospace vehicles. (Current law exempts sales of materials, parts, equipment, or engines used in the repair and maintenance of aircraft.)

Reduces state sales and use tax base and county permissive and transit authority tax receipts by an undetermined amount.

Sales Tax Exemption for Telecommunications Equipment

Removes the requirement that certain telecommunications equipment used in direct marketing must be purchased by a direct marketing vendor in order for the equipment to be exempt from the sales tax.

Reduces state sales and use tax base by $2.6 million per year and county and transit authority sales taxes by $0.6 million per year according to estimates from the Department of Taxation.

Provisions Removed from HB 487 with the support of CCAO Environmental Issues Solid Waste Districts – Source Separated Recyclable Material

Would have prohibited, from the effective date of the bill through December 31, 2012, the board of commissioners or board of directors of any SW district from designating any new facilities, exercising any rulemaking authority, or entering any new contract for the collection of source separated recyclables that requires source separated recyclables to be delivered to one or more facilities.

Would have defined source separated recyclable material to include any material such as paper, cardboard, metal, glass, plastic, or similar material that is segregated by the producer or generator of the material for reuse.

Would have required, on and after the effective date of the amendment through December 31, 2013, the board of commissioners or board of directors of a SW district proposing to construct or operate a new recycling processing facility to do so through a competitive selection process.

Property Tax Issues Use of TIF Payments for Local Government Innovation Fund Local Match Requirements or Loan Repayment

Would have allowed a county, municipal corporation, or township that receives a loan or grant from the Local Government Innovation Fund (LGIF) to use surplus payments in lieu of taxes received through tax increment financing (TIF) arrangements to repay the loan or provide matching funds for the grant. (Under current law, LGIF loans must be repaid using savings from the innovation project funded by the loan.)

General Local Government Provisions Performance management grants

Senate-passed version created the Local Government Performance Measurement Grant

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Program, which would have permitted the Local Government Innovation Council to award a total of $1M each biennium from the Innovation Fund as performance management grants.

Energy MBR sent to Governor; RUMA amendment not adopted Among the numerous bills sent to the Governor this week was the energy MBR measure, Senate Bill 315 (Jones R- Springboro) which provides for an update of oil and gas regulations in anticipation of the Marcellus and Utica shale development. Late Thursday, the bill cleared the House 73-19 with some minor tweaks before the Senate later concurred 21-8. On Monday, CCAO Senior Policy Analyst Josh Hahn and OTA Executive Director Matt DeTemple had once again offered testimony, this time before the House Public Utilities Committee, asking for a road and use management requirement including an arbitration process that would not delay the permit process as a condition for a permit to drill.

Mr. Hahn forewarned committee members of the numerous examples of the road damage that such states such as Texas, West Virginia, Arkansas and North Dakota have experienced with horizontal drilling, however and amendment including the CCAO/OTA proposal, offered for consideration by Representative Jack Cera (D-Bellaire) both in committee and on the House floor, was unfortunately tabled on both occasions. However, as CCAO reported in last week’s Statehouse Report, language was added during Senate deliberations to include CCAO, OTA, the County Engineers Association of Ohio (CEAO), along with state and industry representatives on a task force to monitor the effectiveness of the “good faith” requirement that the industry enter

Rep. Jack Cera into RUMA’s. The task force is to issue a report in a year. Thus, commissioners, trustees, and engineers should be diligent in recording any damage to roadways to share with task force members for purposes of this report. For more information on this issue, please contact Josh at jhahn@ccao.org.

Chambers of Commerce line up in support of coroner bill

Early this week, CCAO learned that the Ohio Chamber of Commerce and Ohio’s eight Metropolitan Chambers of Commerce have come out in support of House Bill 445 (Hill, R- Zanesville), CCAO’s legislation to authorize commissioners to contract with other counties for coroner services.

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In addition to the Ohio Chamber of Commerce, the eight metro chambers include the following:

Greater Akron Chamber

Canton Regional Chamber of Commerce

Cincinnati USA Regional Chamber

Greater Cleveland Partnership

Columbus Chamber of Commerce

Dayton Area Chamber of Commerce

Toledo Regional Chamber of Commerce

Youngstown/ Warren Regional Chamber

In a letter (attached) to Representative Terry Blair, Chairman of the House Local Government Committee, the Chambers note that in December 2010 their respective organizations authorized a report entitled Redesigning Ohio: Transforming Government into a 21st Century institution. The report generally urges the state to push local governments to enact cost-cutting efficiencies. The Chambers note that HB 445 is in line with the goals outlined by the report. Wrote the chambers, “The proposal… encourages shared services and greater collaboration between and among Ohio counties. The requirement that every county must have its own elected coroner is an anachronism, and allowing counties to share coroner’s services can save taxpayer dollars by reducing administrative overhead and improving efficiency.”

For more information on this issue, please contact CCAO Senior Policy Analyst Josh Hahn at jhahn@ccao.org. “Host communities” to get video lottery money Under House Bill 386, passed by the General Assembly this week, communities with “racinos” - horse racing tracks that also have video lottery terminals (VLTs) - each would receive $1 million a year for the first two years. After that each host community of a VLT facility will receive $500,000 per year through a memorandum of understanding among the Governor, horsemen, and the racetracks which would outline a recurring source of revenue for the host communities. Columbus, since it has a casino, would not receive any funding for hosting a racino.

Funding for the first two years would come from the Casino Operator Settlement Fund. 50% of the funds for racino communities over the first two years would have to be used for infrastructure while the other half could go for discretionary purposes. The impacted jurisdictions would receive $1 million each by Dec. 31, 2012, and an additional $1 million by June 30, 2013, and then $500,000 per year with the first payment by Dec. 31, 2014.

Said the chambers,

“..allowing counties

to share coroner’s

services can save

taxpayer dollars by

reducing

administrative

overhead and

improving efficiency.”

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The constitutionality of a host community fee for communities with racinos was questioned since the Ohio Constitution calls for lottery funds entirely to go to the schools, and VLTs are considered to be lottery devices and are regulated by the Ohio Lottery Commission. For more information on HB 386, please contact CCAO Senior Policy Analyst John Leutz at jleutz@ccao.org.

Statehouse Etcetera

ODOT launches rest area privatization program. The Ohio Department of Transportation (ODOT) is hoping to generate millions of dollars in new money by launching a program that will permit advertising and sponsorship opportunities at interstate rest areas and welcome centers throughout Ohio. Beginning this week, the department is seeking competitive bids for the Sponsorship, Maintenance, and Advertising Revenue Targeted (SMART) program. Money generated from the SMART program will help ODOT offset a portion of the $30 to $50 million the agency spends each year to maintain the state’s 101 rest areas. This is the first major initiative ODOT has announced since it launched the Division of Innovative Delivery earlier this year. The department is exploring options to unlock the revenue potential of the Ohio Turnpike and non-interstate rest areas, in addition to developing a program to generate millions of dollars for the sponsorship and naming rights of certain state-owned assets such as bridges, interchanges and sections of highway.

Legislation of Interest

SB 350 CIVIL COMMITMENT (Burke, D.) To make changes to the laws governing the civil commitment

of and treatment provided to mentally ill persons. Am. 2151.011, 2151.23, 2923.125, 2923.1213, 2923.13, 2945.37, 2945.38, 2945.39, 2945.40, 2945.401, 2967.22, 5119.23, 5120.17, 5122.01, 5122.03, 5122.05, 5122.10, 5122.11, 5122.13, 5122.141, 5122.15, 5122.19, 5122.21, 5122.27, 5122.30, 5122.31, 5122.311, 5139.54, 5305.22, 5907.06, and 5907.09 and to enact section 5122.111 of the Revised Code and to amend the versions of sections 5122.01, 5122.27, and 5122.31

SB 351 EMPLOYEE ACCOUNTS (Tavares, C.) To prohibit employers, employment agencies, personnel

placement services, and labor organizations from requiring an applicant or employee to provide access to private electronic accounts of the applicant or employee. Am. 4112.02, 4112.05, 4112.08, 4112.14, 4112.15, and 4112.99

SB 352 MILITARY TRANSFERS (LaRose, F.) To permit persons who quit work to accompany the

person's spouse on a military transfer to be eligible for unemployment compensation benefits. Am. 4141.29

HB 556 TRUMBULL COUNTY COURT (O'Brien, S., Letson, T.) To abolish the Trumbull County County

Court, to create the Trumbull County Municipal Court, and to provide that the judge of the Trumbull County Municipal Court be nominated by petition. Am. 1901.01, 1901.02, 1901.03, 1901.07, 1901.08, and 1907.11.

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Upcoming Legislative Committee Calendar Tuesday, May 29 Joint Committee on Agency Rule Review (Committee Record), (Chr. LaRose, F., 466-4086), Senate Finance Hearing Rm., 1:30 pm Senate Judiciary, (Chr. Wagoner, M., 466-8060), North Hearing Rm, 3:15 pm HB 247 COURT COSTS (Butler, J.) To authorize a court to cancel claims for uncollectible amounts due

the court, to authorize a sentencing court to waive, suspend, or modify payment of the costs of prosecution, to define "case" in connection with the imposition of costs in a criminal case, and to abolish the Felony Sentence Appeal Cost Oversight Committee. --4th Hearing-All testimony-Possible vote

HB 262 HUMAN TRAFFICKING (Fedor, T.) To require the Attorney General annually to publish statistical

data on human trafficking cases in Ohio, to provide for peace officer training and public awareness programs relative to human trafficking, to authorize a juvenile court to hold a delinquent child complaint in abeyance pending the child's completion of diversion actions if the alleged delinquent child is charged with prostitution-related conduct or is a victim of trafficking in persons, to ensure that minor victims of trafficking in persons are not prohibited from receiving awards from the Victims of Crime Fund, etc. --3rd Hearing-All testimony-Possible vote

Wednesday, May 30 Senate Session, (Chr. Niehaus, T., 466-4900), Senate Chamber, 1:30 pm

If needed

May 22, 2012 The Honorable Terry Blair Chairman, House Local Government Committee Ohio House of Representatives 77 S. High St. Columbus, OH 43215 Dear Chairman Blair, In December 2010, the Ohio Chamber of Commerce and Ohio’s eight Metropolitan Chambers of Commerce produced a report entitled Redesigning Ohio: Transforming Government into a 21st Century institution. The report offered a road map for long-term, transformational change. Specifically, it urges the state to push local governments to enact cost-cutting efficiencies. Ohio’s more than 3,700 local governmental units must become smarter, cheaper, and more effective at delivering the services they provide. Our current local government system encourages costly redundancies and often means lower quality, higher cost public services. That’s why the Ohio Chamber and the metro chambers support House Bill 445, legislation sponsored by Rep. Brian Hill that permits boards of county commissioners to contract with another board of county commissioners for the services of that county's coroner. This bill is currently pending in the House Local Government Committee. This proposal is in keeping with the Redesigning Ohio recommendation that encourages shared services and greater collaboration between and among Ohio counties. The requirement that every county must have its own elected coroner is an anachronism, and allowing counties to share coroner’s services can save taxpayer dollars by reducing administrative overhead and improving efficiency. In addition, many smaller counties already contract with larger ones for the purpose of performing autopsies. House Bill 445 would allow for the consolidation of all coroners’ operations, such as investigating causes of deaths. In so doing, HB 445 may not only provide additional cost savings to smaller counties, it may provide larger counties with additional resources to invest in modern equipment and state-of-the-art technology at the same time.

Ohio’s local government system is out-dated, unsustainable, and must be brought into the 21st century. HB 445 is a step in the right direction. We encourage your support of this legislation. Sincerely,

Daniel C. Colantone, CCE Dennis P. Saunier Ellen van der Horst

President & CEO President & CEO President

Greater Akron Chamber Canton Regional Cincinnati USA Regional

Chamber of Commerce Chamber

Joseph Roman Michael Dalby Philip L. Parker, CAE, CCE

Chief Executive Officer President and CEO President & CEO

Greater Cleveland Partnership Columbus Chamber Dayton Area Chamber of

Commerce

Andrew Doehrel Mark A. V’Soske Thomas Humphries

President & CEO President President & CEO

Ohio Chamber of Toledo Regional Youngstown/Warren

Commerce Chamber of Commerce Regional Chamber

cc: State Representative Brian Hill