2021 Year in Review
On behalf of the Ohio Municipal League’s Board of Trustees and staff, we want to wish all our members Happy Holidays and a wonderful New Year. We want to thank our local leaders for their leadership as local communities continue to navigate important issues related to the COVID-19 pandemic. We also want to thank members of the General Assembly and the DeWine Administration for their continued partnership with Ohio’s municipalities. We are looking forward to continuing to advocate on the issues important to Ohio’s cities and villages next year!
Below is a list of state legislation, court cases and Federal relief packages that affected Ohio’s municipalities over the course of 2021.
Stay well and we wish everyone a bright and successful 2022!
Court Cases:
City of Maple Heights v. Netflix:
On July 22, the Ohio Supreme Court decided to hear the case of the City of Maple Heights v. Netflix, Inc., which will determine whether local governments can collect franchise fees from online streaming services.
Last year, the city of Maple Heights filed suit alleging that online streaming companies have not paid the municipality franchise fees for their use of public rights of way as cable providers are required to do. Cable providers in Ohio must pay a city or village up to 5% of the gross revenues they generate from their services within a municipality under the state’s Fair Competition in Cable Operations Act. The League supports the rights of municipalities to protect the interests of their citizens and recover the appropriate franchise fees from streaming companies.
The Ohio Supreme Court will answer two questions certified by federal court: whether Netflix and Hulu are video service providers under Ohio law, and whether Maple Heights can sue Netflix and Hulu to enforce Ohio’s video service provider provisions. There has been no indication as to when the court will issue its answer to these questions.
OneOhio Opioid Distributor Settlement:
On September 16, Ohio Attorney General Dave Yost announced that Ohio has reached its own agreement in the lawsuit against opioid distributors Cardinal Health, McKesson and AmerisourceBergen. The settlement will bring up to $808 million into Ohio over 18 years. According to the OneOhio plan, local governments will receive 85% of the funds, 30% of which will be through direct payments. The remaining 55% will be allocated though a foundation managed by local government leaders. The foundation will then distribute those funds to 19 regions across Ohio. The funds can only be used for abatement efforts like law enforcement, drug treatments and counseling services. The structure of the foundation and the regional representation component is still being developed. The League expects to provide members with the final organizational components of the OneOhio foundation at the first of the year.
Sec 29 of HB 197/Buckeye Institute Lawsuit:
On November 30, the Tenth District Court of Appeals upheld the constitutionality of Sec. 29 of HB 197, the temporary municipal income tax withholding provision. was a ruling on the appeal filed by the Buckeye Institute after the Franklin County Court of Common Pleas dismissed the Institute’s lawsuit against the City of Columbus challenging the constitutionality of Sec. 29 of HB 197. The Buckeye Institute has indicated that they plan to appeal the Tenth District’s decision to the Ohio Supreme Court. The Buckeye Institute has similar lawsuits pending in Cuyahoga and Lucas counties, and they have appealed the Hamilton County Court of Common Pleas’ ruling to dismiss the Institute’s lawsuit on the same issue.
Federal COVID-19 Relief:
American Rescue Plan Act (ARPA):
On March 11, President Biden signed into law H.R. 1315, the $1.9 trillion American Rescue Plan allocating COVID-19 pandemic relief. The bill allocated $130 billion for local governments. Specifically, the legislation allocates $65.1 billion in relief aid for cities, towns and villages across the country. Ohio municipalities were allocated $5.4 billion in aid while the state of Ohio received $5.7 billion.
Entitlement cities (with a population above 50,000) received 50% of the allocation within 60 days of the bill’s passage and will receive the other 50% in 2022.
Non-entitlement units of local government (NEUs) with populations under 50,000, had to apply for their funds through the state. The first tranche has been allocated and NEUs participating in the allocations will receive their second and final distribution in June, 2022. Funds do not have to be obligated until December 31, 2024, and unexpended funds are not subject to recapture or return until December 31, 2026.
Infrastructure Investment and Jobs Act (IIJA);
On November 15, President Biden signed the “Infrastructure Investment and Jobs Act” (IIJA), a $1.2 trillion package that includes $550 billion over 5 years in new federal investments for infrastructure nationwide. The bill is also projected to add an estimated two million jobs per year to the national economy.
Ohio will receive the following infrastructure investments:
· $9.2 billion for Ohio’s roads and highways
· Approximately $500 million to assist with bridge repairs and $12.5 billion available in competitive grants
· At least $100 million to expand broadband to unreached areas of the state
· $1.4 billion for water infrastructure
· $1.2 billion for public mass transportation
· $253 million for airport improvements
· $140 million for the construction electric vehicle charging network in the state
· $1 billion for the Great Lakes Restoration Initiative to decrease pollution, prevent invasive species, and mitigate erosion and rising lake levels
The IIJA includes the following nationwide infrastructure investments:
· $110 billion for roads, bridges and other major infrastructure projects
· $40 billion for bridge repair, replacement and rehabilitation
· $66 billion for passenger and freight rail
· $39.2 billion for public transit
· $65 billion for broadband
· $55 billion for upgrading water systems, including replacing lead pipes
· $47.2 billion for cybersecurity
· $16.6 billion for port infrastructure
· $25 billion for airports
· $21 billion for brownfield remediation
· $50 billion for communities to deal with natural disasters like fires, floods, storms and droughts
· $11 billion for transportation safety, including a funding program to help states and local governments to reduce crashes and fatalities
· $7.5 billion for zero- and low-emission buses and ferries
· $7.5 billion for the construction of a nationwide network of electric vehicle chargers
· $65 billion to rebuild the electric grid nationwide
· $1 billion for reconnecting communities by removing barriers to opportunity caused by legacy infrastructure
· $8.3 billion for the Bureau of Reclamation western water infrastructure
· $16 billion for major projects that are too large or complex for traditional funding programs
134th General Assembly: Bills of Municipal Interest
Bills Signed by the Governor
· HB 172 – Fireworks Law. Sponsored by Rep. Baldridge (R – Winchester), revised the fireworks law. The bill maintained local control by allowing local governments to restrict the dates and times that individuals can discharge consumer-grade fireworks, or to impose a complete ban on the use of consumer-grade fireworks.
· HB 201 – Natural Gas. Sponsored by Rep. Stephens (R – Kitts Hill), preempts local governments from limiting natural gas use. The League requested a veto of this bill as a clear violation of Home Rule Authority.
· HB 2 – Broadband. Sponsored by Rep. Carfagna (R – Genoa Twp.) and Rep. Stewart (R – Ashville), created the Ohio Residential Broadband Expansion Grant Program within the Ohio Development Services Agency for broadband expansion throughout the state and allocates $20 million for FY21 to the program.
· HB 168 – Unemployment Debt. sponsored by Rep. Frazier (R – Newark) and Rep. Loychik (R – Cortland), distributed the first tranche of $422 million in American Rescue Plan Act (ARPA) funds to non-entitlement units of local government (NEUs) as well as $250 million for local sewer and water projects.
· SB 115 – Ohio Pooled Collateral Program. Sponsored by Sen. Schuring (R-Canton), revised the Ohio Pooled Collateral Program to ensure public depository collateral levels are in accordance with the required amount set by the State Treasurer’s office.
· HB 177 – Blockchain Technology. Sponsored by Rep. Carfagna (R – Genoa Twp.) and Rep. Fraizer (R – Newark), allowed government to use distributed ledger technology and blockchain.
Bills Passed by the General Assembly
· HB 169 – Pandemic Recovery. Sponsored by Rep. Cutrona (R – Canfield) and Rep. Swearingen (R – Huron), allocates a total of $4.19 billion in federal COVID-19 relief funds. Particularly for municipalities, the bill allocates $250 million in ARPA funding for grants for law enforcement and first responders to combat crime and address mental health issues. This bill is currently awaiting the Governor’s signature.
· HB 228 – Municipal Corporation Tax. Sponsored by Rep. Roemer (R – Richfield), would make changes related to state-administered municipal net profits taxes. This bill is currently awaiting the Governor’s signature.
Legislation Supported by OML
· HB 445 – 9-1-1. Sponsored by Rep. Carfagna (R – Genoa Twp.), would upgrade the states 9-1-1 system by funding and constructing a next-Generation 9-1-1 system (NG9-1-1) statewide. This bill has had three hearings in the House Transportation and Public Safety Committee.
· SB 225 – Tax Credits. Sponsored by Sen. Schuring (R – Canton), would temporarily modify the historic rehabilitation and the opportunity zone investment tax credits. This bill has had four hearings in the Senate Finance Committee.
· SB 83 – Brownfield Sites. Sponsored by Sen. Williams (D – Cleveland) and Sen. Rulli (R – Salem), would appropriate $150,000 to a voluntary program for Phase 1 property assessments for contamination at no cost to communities. This bill has had five hearings in the House Agriculture and Conservation Committee.
· SB 84 – Clean Ohio Fund. Sponsored by Sen. Williams (D – Cleveland) and Sen. Rulli (R – Salem), would make changes to the law relating to the Clean Ohio Revitalization Fund. This bill has had two hearings in the Senate Agriculture and Natural Resources Committee.
· HB 155 – Land Use. Sponsored by Rep. Upchurch (D – Cleveland) and Rep. Smith (D – Fairview Park), would create the Land Reutilization Nuisance Abatement Program and make an appropriation. This bill has had four hearings in the House Economic and Workforce Development Committee.
· HB 91 – Public Facility Partnerships. Sponsored by Rep. Patton (R – Strongsville), would authorize certain public entities to enter into public-private initiatives with a private party through a public-private agreement regarding public facilities. This bill has had three hearings in the House Infrastructure and Rural Development Committee.
· HB 175 – Water Pollution. Sponsored by Rep. Hillyer (R – Urichsville), would deregulate certain ephemeral water features under various water pollution control laws. This bill has had two hearings in the Senate Agriculture and Natural Resources Committee.
· HB 328 – Office of Drug Policy. Sponsored by Rep. Brown (D – Canal Winchester), would establish the Governor's Office of Drug Policy. This bill has had three hearings in the House Behavioral Health and Recovery Supports Committee.
· SB 15 – Fiscal Officers. Sen. Wilson (R - Maineville), would change the circumstances in which certain fiscal officers may be held liable for a loss of public funds. This bill has had one hearing in the House State and Local Government Committee.
· SB 8 – Broadband Services. Sponsored by Sen. McColley (R – Napoleon), is regarding broadband expansion, including access to electric cooperative easements and facilities, and make an appropriation. This bill was passed by the Senate but has received no hearings in the House.
· SB 38 – Tax Credit. Sponsored by Sen. Schaffer (R - Lancaster), would allow an income tax credit for law enforcement officials and volunteer firefighters who purchase safety or protective items to be used in the course of official law enforcement or firefighting activities. This bill has had three hearings in the Senate Ways and Means Committee.
Legislation Opposed by OML
· SB 277 - Motor Fuel Excise Tax. Sponsored by Sen. Huffman (R - Tips City), would temporarily reduce motor fuel excise tax rates and suspend collection of the additional motor vehicle registration taxes on electric and hybrid vehicles, both for five years, and to amend the version of section 4503.10 of the Revised Code that is scheduled to take effect on October 1, 2022, to continue the changes to that section on and after that date. This bill would temporarily suspend the gas tax increase that was passed in the 2019 transportation budget bill. This bill was just introduced and has not yet received any hearings. The League will be closely tracking this legislation and will let our members know when there is an opportunity to testify against this bill.
· HB 192 – Energy Generation. Sponsored by Rep. Cutrona (R – Canfield), would prohibit counties, townships, and municipal corporations from prohibiting energy generation from fossil fuels and gas pipelines. This bill has had three hearings in the House Energy and Natural Resources Committee.
· SB 185 – Emergency Powers. Sponsored by Sen. Schaffer (R – Lancaster) would preempt municipalities from restricting firearms possession, transportation, carrying, training, concealed handgun licensing processing, shooting range access, hunting and fishing during a declared emergency. This bill has had one hearing in the House Government Oversight Committee.
· HB 325 – Emergency Powers. Sponsored by Rep. Wiggam (R-Wooster), would preempt municipalities from restricting firearms possession, transportation, carrying, training, concealed handgun licensing processing, shooting range access, hunting and fishing during a declared emergency. This bill has had three hearings in the House Government Oversight Committee.
· HB 327 – Education Curriculum. Sponsored by Rep. Grendell (R – Chesterland) and Rep. Fowler (R – Rock Creek), would prohibit school districts, community schools, STEM schools, and state agencies from teaching, advocating, or promoting “divisive concepts”, such as critical race theory. This bill has had four hearings in the House State and Local Government Committee.
· HB 248 – Vaccinations. Sponsored by Rep. Gross (R – West Chester), would authorize an individual to decline a vaccination and name this act the Vaccine Choice and Anti-Discrimination Act. This bill would preempt municipalities regarding COVID-19 vaccinations. This bill as had six hearings in the House Health Committee.
· HB 424 – COVID-19 Vaccination Prohibition. Sponsored by Rep. Koehler (R – Springfield), would prohibit a political subdivision, public official, public school, state agency, or state institution of higher education from taking certain actions related to the COVID-19 vaccine, codify the qualified civil immunities under H.B. 606 of the 133rd General Assembly permanently, repeal section 3792.05 of the Revised Code on the date that is two years after the effective date of that section, and declare an emergency. This bill has not received any hearings.
· HB 218 –Vaccines. Sponsored by Rep. Cutrona (R – Canfield), would address medical requirements for employees and students; address qualified civil immunity regarding certain coronaviruses; authorize emergency medical technicians to administer COVID-19 tests; expressly cover COVID-19 vaccine injuries under the workers' compensation system; and repeal sections 3792.05, 3792.07, and 3792.08 of the Revised Code on September 30, 2025. This bill would preempt municipalities regarding COVID-19 vaccinations. This bill has received two hearings in the Senate General Government Budget Committee.
· HB 243– Knife Regulation. Sponsored by Rep. Cutrona (R – Canfield) would retroactively repeal local rules issued by municipalities regarding knife restrictions. This bill was passed by the House and is awaiting committee hearings in the Senate.
· SB 156 – Knife Regulation. Sponsored by Sen. Roenger (R – Hudson), would retroactively repeal local rules issued by municipalities regarding knife restrictions. This bill was passed by the Senate and is awaiting committee hearings in the House.
Transportation Budget
On March 31, Governor DeWine signed Sub. HB 74, the Transportation Budget for fiscal years 2022-2023. The bill allocated over $8 billion in transportation spending over the biennium and appropriated $193.7 million over the biennium for public transit, plus an additional $13.85 million in General Revenue Fund (GRF) revenues each year of the biennium. The bill also:
· Increased the capital appropriation for the Public Works Commission’s Local Public Infrastructure to a total of $14 million for emergency road-slip remediation projects.
· Allocated $357 million each fiscal year to local programs,
· Allocated $126 million in federal aid to local governments to cover some of the gas tax revenue lost due to the COVID-19 pandemic’s travel restrictions.
· Added an automatic increase of 3% over the biennium in force account thresholds for local governments every two years.
· Created a Joint Committee on Force Accounts to study, hear testimony and discuss issues regarding force account limits for local governments. The committee was required to submit a report of its findings by May 15, 2021, and then dissolve.
Budget Bill
On July 1, Governor DeWine signed Sub. HB 110, the $75 billion two-year state operating budget bill. The bill impacted municipalities in the following provisions:
Provisions OML Opposed:
· Retroactive Treatment of Temporary Withholding Policy: Allowed for the retroactive treatment of Sec. 29 of HB 197, the temporary municipal income tax withholding provision, authorizing taxpayers to request for refunds for tax year 2021. Although this language also includes an extension of the temporary withholding policy until December 30, 2021, which the League supported, it also fundamentally altered the purpose of the emergency authority by allowing taxpayers to file refund requests for tax year 2021 for withholdings lawfully provided.
· “Bag Tax” Preemption: Made permanent the preemption on Ohio’s political subdivisions including municipalities to imposing a tax, fee, assessment or other charge on auxiliary containers, also called the “bag tax”, and the sale or consumption of auxiliary containers. HB 242 of the 133rd General Assembly enacted a temporary preemption on communities instituting a bag tax, but that provision was set to expire on January 15, 2022.
Provisions OML Supported:
· Broadband Expansion Funding: Funded the Ohio Residential Broadband Expansion Grant Program to provide roughly $250 million in grants to expand broadband service.
· Brownfield Funding: Allocated $350 million in FY2022 for the creation of the Brownfield Redevelopment Program through the Ohio Department of Development. The program will reserve $1 million for each of Ohio’s 88 counties for brownfield remediation to be used within one year. The remaining funds will be available as grants from the Brownfield Remediation Fund created by the bill and will be awarded on a first-come, first-served basis and can be used to cover 75% of the project costs.
· Building Demolition and Site Revitalization: Creates the Building Demolition and Site Revitalization Program through an amendment by the Conference Committee. The provision allocates $150 million in FY2022 for the demolition of commercial and residential building and revitalization of surrounding properties on sites that are not brownfields. $500,000 will be reserved for each of Ohio’s 88 counties to be used within one year. As with the Brownfield Redevelopment Program. the remaining funds will also be available on a first-come, first-served basis and can also be used to cover 75% of the project costs.
· Opportunity Zones: Changed the existing income tax credit for investments in federally authorized opportunity zones in Ohio by increasing the limit on the amount of credits an individual can be awarded during a fiscal biennium from $1 million to $2 million.
· Health Districts: Required a city health district with a population of less than 50,000 to study a merger with the general health district that includes the city and contract with the general health district for the administration of city health affairs if the study indicates that the merger is advisable. The bill exempted a city health district from these requirements if it is either accredited or in the process of applying for accreditation and receives it by December 31, 2025.
· Transformational Mixed-Use Development Projects (TMUD): Modified an existing insurance premium tax credit for capital contributions to the construction of a transformational mixed use development (TMUD) by extending the sunset date for certifying new TMUD projects by two years, to June 30, 2025; and setting the maximum annual credit allotment for fiscal years 2024 and 2025 at $100 million.
· Treasury Offset Program (TOP): Allowed municipalities to participate in the Treasury Offset Program (TOP), which is a federal program whereby states can have eligible debts withheld from a taxpayer’s federal income tax return. Municipalities can participate through the Ohio Attorney General’s office and effectively recover the municipal revenues they are owed, which in turn funds local services. Taxpayers will also benefit from this, as could be saved from paying more than what they originally owe the municipalities because of penalties and interest.
· Local Law Enforcement Funding: Allocated $15 million for a one-year police training pilot program to assist law enforcement agencies with training costs and creates a 12-member Law Enforcement Training Funding Safety Commission to study possible long-term methods for providing state aid to law enforcement agencies for training police. Also allocated:
o $10 million in grants to local law enforcement agencies across the state to implement or enhance body-worn camera programs, including the body cameras themselves and other associated expenses.
o $8 million to help reduce violent crimes through state and local law enforcement agencies through flexible grant funding
o $1 million to support state and local law enforcement agencies in recruiting and hiring new peace officers.
o $13 million to expand the Ohio Narcotics Intelligence Center (ONIC) to further support local law enforcement and their partners.
· Multi-Agency Radio Communications System (MARCS): Allocated $2.5 million each fiscal year, up from $1.5 million, to fund the MARCS program’s local fee offset.
· Local Government Fund: Continued funding for the Local Government Fund (LGF) at current statutory levels.
· H2Ohio Funding:
o $20 million to the Ohio Environmental Protection Agency (EPA) over the biennium.
o $50 million to the Ohio Department of Natural Resources (ODNR) over the biennium.
o $83 million to the Ohio Department of Agriculture over the biennium.
Other Municipal Provisions:
· Liens for Unpaid Municipal Garbage Collection: Allowed a municipal corporation to place as a lien on property the amount of unpaid garbage/trash collection charges, when the unpaid amount is greater than the annual charge for the services, in addition to the ability to do so when the unpaid amount is at least $250 as under current law. The limitations above do not apply to a municipal corporation that collects all garbage/trash charges (not only unpaid amounts) via the tax list.
· TIF and Downtown Development Districts: Modified the law governing tax increment financing districts (TIF) and downtown redevelopment districts (DRD) to allow subdivisions to use TIF or DRD service payments for off-street parking facilities. The amendment also allows municipalities that create certain types of TIFs the discretion to designate the beginning date of the TIF exemption, rather than the exemption automatically beginning on the effective date of the designating ordinance. (This latter discretion is already allowed to subdivisions creating other types of TIFs and DRDs.)
· Joint Economic Development District (JEDD) Requirements: Modified the notice and opt-out procedures for certain property that is located within half a mile of the JEDD or receives water or sewer services under certain agreements from a municipality that is not part of the JEDD. Also required that the JEDD contract include certain information relating to the district's public utility infrastructure, if the proposed JEDD would include any property in which any non-JEDD party would provide water or sewer services.
· Rural Business Growth Program: Made changes to the existing insurance premiums tax credit for investments in rural business growth funds, including an increase in the amount of tax credits by $45 million that may be awarded by the Department of Development and modifying the eligibility criteria and investment criteria for the new credit allocation. The tax credits and associated revenue losses to the General Revenue Fund (GRF), the Local Government Fund (LGF), and the Public Library Fund would first occur in FY24.
· State and Local Government Expenditure Database: Required the Treasurer of State to establish and maintain the Ohio State and Local Government Expenditure Database, which is to include detailed data on expenditures of state government and those of volunteering political subdivisions and state retirement systems.
· Tourism Development Districts (TDD): Clarified that a municipality or township may enlarge the territory of an existing Tourism Development District (TDD) after December 31, 2020, the deadline under continuing law for creating a new TDD.
· Municipal Fiscal Officer Continuing Education: Required appointed municipal fiscal officer to complete 18 hours of continuing education during the first term of office and 12 hours each subsequent term, matching the requirements for elected municipal fiscal officers.
· Serving Containers Permitted for Use in DORAs: Required qualified liquor permit holders in designated outdoor refreshment areas (DORAs) to serve beer or intoxicating liquor in plastic bottles or other “non-glass” containers, rather than only in plastic containers.
