OML UPDATE AT-A-GLANCE
 
Here are the top four things you need to know from this past week:
 
·        Late Thursday afternoon, the League received guidance from the National League of Cities (NLC) detailing the steps local governments must take to receive federal funds from the American Rescue Plan Act (ARPA). The U.S. Department of Treasury website, which you can access HERE, has laid out the steps that metropolitan cities and non-entitlement units of local government need to take to receive these funds. Municipalities should take these steps as soon as possible to receive their funds in a timely fashion. Read more in the article below.

·        This week, the House Ways and Means Committee adopted a substitute bill for HB 157, which was originally drafted to repeal Section 29 of HB 197, the temporary COVID-19 withholding provision. While the substitute bill extends the sunsetting of the of Sec. 29 until December 31, 2021, the rest of the provisions in the substitute bill would be detrimental to the stability of local budgets if the bill were to become law. You can read the full substitute bill HERE, the comparison document HERE and read more in the article below. We are providing our members with a sample letter HERE and a sample resolution HERE and encourage our members to contact their members of their legislative delegation regarding this issue.
 
·        Budget Watch: This week, the House Finance Committee adopted a substitute bill for HB 110, the state operating budget bill. The substitute bill contains several new provisions and changes that affect municipalities, such as funding for the MARCS local fee offset and authorizing municipalities to participate in the federal Treasury Offset Program (TOP). You can access the comparison document between the budget as introduced by the Governor and the House’s substitute bill HERE and read more in the article below.
 
·        League members should take note of two upcoming webinars for municipal officials. The first is a free webinar presented by the Ohio Municipal League and the Montrose Group LLC. The webinar will cover project funding strategies municipalities can use for revenues from the American Rescue Plan Act (ARPA). Click HERE to register and learn more in the article below. The second webinar will be hosted by League along with the Ohio Municipal Attorneys Association (OMAA). The presentation is entitled “Managing Your Employees: Laws and New Frontiers” and will be held on Wednesday, April 21. from 11 a.m. to 12 p.m. Click HERE to register and learn more in the article below.
 
 
 
GUIDANCE RELEASED FOR MUNICIPALITIES TO RECEIVE FEDERAL AMERICAN RESCUE PLAN ACT (ARPA) FUNDS FROM U.S. TREASURY
 
The National League of Cities (NLC) has distributed the following guidance from the U.S. Department of Treasury regarding what metropolitan cities and non-entitlement units of local government need to do to receive federal aid from the American Rescue Plan Act (ARPA). These steps should be taken as soon as possible to ensure local governments receive their funds in a timely fashion.
 
As soon as possible, metropolitan cities should take the steps below.
1.     Ensure the entity has a valid DUNS number. A DUNS number is a unique nine-character number used to identify an organization and is issued by Dun & Bradstreet. The federal government uses the DUNS number to track how federal money is allocated. A DUNS number is required prior to registering with the SAM database, which is outlined below. Registering for a DUNS number is free of charge.
If an entity does not have a valid DUNS number, please visit https://fedgov.dnb.com/webform/ or call 1-866-705-5711 to begin the registration process.
 
2.     Ensure the entity has an active SAM registration. SAM is the official government-wide database to register with in order to do business with the U.S. government. All Federal financial assistance recipients must register on SAM.gov and renew their SAM registration annually to maintain an active status to be eligible to receive Federal financial assistance. There is no charge to register or maintain your entity SAM registration.

If an entity does not have an active SAM registration, please visit, SAM.gov to begin the entity registration or renewal process. Please note that SAM registration can take up to three weeks; delay in registering in SAM could impact timely payment of funds.
 
3.     Gather the entity's payment information, including:
o   Entity Identification Number (EIN), name, and contact information
o   Name and title of an authorized representative of the entity
o   Financial institution information (e.g., routing and account number, financial institution name and contact information)
 
Eligible Non-entitlement Units of Local Government will receive a distribution of funds from their respective state government. "Non-entitlement units of local government" are defined in 42 U.S.C. 5302(a)(5) that are not metropolitan cities. For these Non-entitlement units of local government, Treasury will allocate and pay funds to state governments, and the state will distribute funds to non-entitlement units of local government in proportion to population. Non-entitlement units must have a valid DUNS number to meet reporting requirements under the program. If an entity does not have a valid DUNS number, please visit https://fedgov.dnb.com/webform/ or call 1-866-705-5711 to begin the registration process.
 
The U.S. Department of Treasury has stated that program guidance for Coronavirus State and Local Fiscal Recovery Fund will be released in the coming weeks. We will keep our members apprised as more information is made available.
 
 
 
 
OHIO HOUSE WAYS AND MEANS COMMITTEE ADOPTS SUBSTITUTE BILL ALTERING COVID-19 MUNICIPAL INCOME TAX PROVISION
 
This week, the House Ways and Means Committee adopted a substitute bill for HB 157, which was originally drafted to repeal Section 29 of HB 197. This is the temporary COVID-19 provision instructing municipalities to continue withholding municipal income tax at a taxpayer’s place of work, even if the taxpayer is currently working from home in a different local jurisdiction due to the COVID-19 pandemic.
 
Sub. HB 157 amended the original bill to extend the expiration of the repeal of Sec. 29 until December 31, 2021. The other changes made by the substitute bill would alter the original intent of Sec. 29 and further undermine revenue stability for cities and villages across Ohio.
 
The House Ways and Means committee will be holding a fifth and what we expect to be the final hearing on Sub. HB 157 at their next meeting which we anticipate will be held Tuesday, April 20 at 1 p.m. in Statehouse Hearing Room 116. The League is urging officials to come to the Statehouse and testify in opposition to this bill.
 
Sub. HB 157 would do the following:
 
·        Specifies that the temporary withholding policy does not prohibit an employer from assigning a different “principal place of work” to the employee, which may change the employer’s withholding obligations towards the employee despite the Sec. 29 of HB 197. This language will require municipalities to grant requests for refunds from taxpayers.
 
·        States that the Sec. 29 rule applies solely for determining an employer’s withholding obligations and where an employer’s net profits are sitused and not for the purpose of determining the location where a nonresident employee’s wages are subject to municipal income tax.
 
·        Specifies that the temporary withholding policy does not prohibit an employer from withholding income tax to the actual municipal corporations where the employee works from home or at another location.  
 
·        Prohibits a municipal corporation from assessing taxes, penalties, or interest against an employer for the employer’s failure to properly withhold tax from an employee’s wages, as long as the employer does properly withhold in accordance with the special withholding rule, including the retrospective changes made by the substitute bill.
 
·        Applies the interest and penalty waiver and the changes to the withholding rule to all municipal income taxes withheld from March 9, 2020, to December 31, 2021, and states that these modifications are remedial in nature.
 
Sub. HB 157 would be detrimental for cities throughout Ohio for the following reasons:
 
·        The bill now removes the language in Sec. 29 of HB 197 that treated wages earned by employees temporarily working from home during the Governor’s declaration emergency as taxable to the principal place of work. However, the original Legislative Service Commission (LSC) analysis for HB 197 states on page 6, “For municipal income tax purposes, treats income earned by an employee required to work at a temporary worksite because of the emergency as being earned at the employee’s principal place of work, potentially affecting the municipal income tax withholding and liability of the employee and the employer.”
 
o  The analysis was clear that the intent of the bill was for employer withholding and liability for the employee to be taxable for the city where the principle place of work is located.
o  Per the Ohio Attorney General’s and City of Columbus Auditor’s legal briefs in the Buckeye Institute lawsuit, Sec. 29 and HB 197 considered those wages taxable to the principle place of work.
 
o  The change in this substitute bill could cause cities to issue a substantial amount of refunds to employees working from home during the emergency. Issuing refunds for a closed tax year could be devastating to municipalities, who were protected by the language in Sec 29 of HB 197.
 
·        A handful of lawsuits have been filed on the issue of refunds. The League strongly believes that the courts will decide this issue regarding refunds and that the legislature should not up-end the original intent of the legislation.
·        Businesses will suffer the additional administrative burden of having to certify each employee requesting a refund for the duration of the time they worked from home by tracking when and where every employee worked for both 2020 and 2021.
 
·        Cities would also face the added financial burden of taxpayers receiving money they have already taken as credit against their resident tax liability. Taxes for 2020 have already been filed and residents have already taken credits for taxes they paid to the principle place of work. This bill will allow those same taxpayers to go back and file for refunds against municipalities where their principle place of work is located. 
 
o  Ohio’s largest municipalities could face so many of these filings for returns that they will be unable to notify the resident municipality of the taxpayer.
 
·        This substitute bill allows the employer to determine the principle place of work for each employee during the declaration of emergency. Changing the principle place of work would now be at the discretion of the employer and not by definition under O.R.C. 718.011 and may cause a further reduction in tax revenues.
 
·        The substitute bill does not allow the wages earned at the employee’s home from creating a filing requirement to file a municipal net profit return.
 
o  The bill wants to treat wages as taxable to the residential taxing jurisdiction for withholding purposes, but not as taxable or as creating a municipal return filing requirement in the resident employee’s taxing jurisdiction.
 
o  This means the employee performing work for the business in a location other than the principle place of work is generating net profit for the business, would now be reportable and taxable to a location where the work was not performed.
 
·        Tax, penalties and interest may not be assessed by resident city taxing jurisdiction for failure to properly withhold to their jurisdiction during the emergency. This provision has a negative impact on cities to enforce their tax ordinances.
 
It is imperative that local officials testify in person on the bill’s negative impact to municipal budgets and the delivery of quality local services to Ohioans and businesses across the state. While it is critical that tax administrators testify in-person against these changes, those that cannot come to the Statehouse are encouraged to submit written testimony. The League also urges our municipal leaders to contact their own state representative and senator and share with them any concerns that you may have.
 
We will alert our members when the committee hearing is scheduled. Please submit testimony to the House Ways and Means Committee at ways&meanscommittee@ohiohouse.gov 24 hours before the committee hearing. If you have any questions about testifying, please contact League Director of Communications Ashley Ringle at aringle@omlohio.org.
 
 
 
 
 
OHIO HOUSE ADOPTS SUBSTITUTE BILL FOR STATE OPERATING BUDGET
 
This week, the House Finance Committee adopted a substitute bill for HB 110, the state operating budget bill. The substitute bill contains several new provisions and changes that affect municipalities.
 
Two of the new provisions in Sub. HB 110 would negatively impact municipalities. The League is requesting the following items be removed from the bill. The provisions are as follows:
 
·        Abolishes health districts in cities with a population below 50,000 and requiring that city to be represented by a board of health of a general health district that includes that city. The League is requesting that this language be removed from the bill. You can access a list of municipalities that would be impacted by this provision HERE. We will continue to update this list as we receive more information.
 
·        Removes an allocation of $100 million for community infrastructure from Governor’s initial Investing in Ohio plan, which originally allocated $450 million to Ohio’s local communities. The League is requesting be replaced into the budget
The League requested two provisions that have been included in Sub. HB 110. The provisions would:
 
·        Allow municipalities to participate in the Treasury Offset Program (TOP), a federal program whereby states can have eligible debts withheld from a taxpayer’s federal income tax return. The Ohio Attorney General’s office participates in the program to help recover state debt. The provision would grant municipalities the authority to participate in TOP in order to effectively recover the municipal revenues they are owed, which in turn funds local services. Taxpayers would also benefit from this, as could be saved from paying more than what they originally owe the municipalities because of penalties and interest.
 
·        Allocate $1.5 million each fiscal year over the biennium for the Multi-Agency Radio Communications System (MARCS) local fee offset. MARCS enables law enforcement departments to communicate with other law enforcement departments across the state. This critical capability enables law enforcement across the state to effectively work together to keep Ohioans safe. Funding the MARCS program’s local fee offset helps ensure that many of Ohio’s local first responders to remain in the program so that Ohio’s safety forces able to continue to communicate with one another.
 
The following are the remaining provisions in the budget bill supported by the League:
 
·        Incorporates HB 2 into the budget bill, which adds an additional $170 million allocated for broadband expansion.
 
·        The bill’s original investment in local law enforcement remains unchanged. This includes:
o  $10 million in grants for body cameras for local law enforcement agencies
o  $8 million to help reduce violent crimes
o  $1 million to support local agencies in recruiting and hiring
o  $6.5 million to expand the Ohio Narcotics Intelligence Center (ONIC) to further support local law enforcement and their partners.
The League thanks the Ohio House for continuing to support the bill’s initial investment in local governments through infrastructure, broadband and law enforcement. We also are grateful for the inclusion of the TOPS and MARCS provisions, which will enable municipalities to continue delivering quality local services to their residents and businesses. We will continue to work with the legislature to ensure the budget bill helps address the critical issues faced by cities and villages across the state.
 

OML AND OMAA TO HOST WEBINAR ON MANAGING EMPLOYEES
 
On Wednesday, April 21. from 11 a.m. to 12 p.m., the League along with the Ohio Municipal Attorneys Association (OMAA) is hosting a webinar entitled “Managing Your Employees: Laws and New Frontiers.” The webinar will review recent decisions and laws impacting the workplace, presenting a view of the recent past to a view of what's on the horizon. The scope of the presentation includes vaccination to free speech, discrimination, and federal rules on leaves. To learn more and to register, click HERE
  
 
WEBINAR ON AMERICAN RESCUE PLAN ACT (ARPA) PROJECT FUNDING STRATEGIES
 
Please join the Ohio Municipal League along with the Montrose Group LLC for a free webinar to learn about how the recently enacted American Rescue Plan Act can develop critical projects in your community. The webinar will take place on April 27 at 11 a.m.
 
The American Rescue Plan provides $350 billion dollars in emergency funding for state, local, territorial, and Tribal governments to remedy the mismatch between rising costs and falling revenues. This includes $130 billion for local governments including funding for Ohio municipal governments that can be used for four purposes: public health costs triggered by COVID-19; revenue losses caused by COVID-19; financial assistance to households, small businesses and nonprofits, aid to impacted industries, and support for essential workers; and investments in infrastructure, including water, sewer, and broadband services.
 
The American Rescue Plan Act creates a once in a generation opportunity to support those impacted by COVID-19 as well as to redevelop local infrastructure tied to critical community projects. Please join the webinar to learn how to capitalize on this billion-dollar source of federal government funding.
 
The webinar will be presented by David J. Robinson, Principal; Nate Green, Director of Economic Development; Tim Biggam - Director of Government Relations; and Jamie Beier, Grant-Manager of Economic and Workforce Development.
 
Montrose Group LLC is a national economic development and lobbying consulting firm that represents municipalities on project financing, economic development and lobbying matters throughout Ohio. Montrose Group, LLC are experts on how to use local, state and federal funding to promote economic development.
 
After registering (link in bullet point above) you will receive a confirmation email containing information about joining the webinar.
 
 
 
OHIO EPA TO HOST WEBINAR ON DRINKING WATER AND WASTEWATER REGIONALIZATION
 
 
The Ohio EPA is hosting a webinar on April 20 at 2 p.m. on the opportunities and challenges of drinking water and wastewater regionalization in the state. Speakers will discuss the concept of regionalization and consolidation for drinking and wastewater utilities. Case examples of successful regionalization projects in Ohio will be discussed along with an analysis of the different funding agencies and programs available to communities. To learn more and to register, click HERE.
  
 
OHIO CORONAVIRUS RESPONSE UPDATE
 
·        As of Thursday afternoon, Ohio is reporting 1,048,109 cases of coronavirus, 18,917 resident deaths, 54,636 hospitalizations and 7,604 ICU admissions.
 
Variant Spread:
·        Governor DeWine announced that more than 36 percent of Ohioans have now received at least one dose of a coronavirus vaccine, however, Ohio's statewide case incidence number has reached 200 cases per 100,000 people as compared to 144 cases per 100,000 people four weeks ago.
o   There are currently more than 1,300 COVID-positive patients in Ohio's hospitals.
 
·        The majority of the counties with the highest incidence of cases in Ohio are in the northern region of the state which is seeing a high level of variant cases.
o   Lucas County is currently seeing the highest occurrence of cases with 341.1 cases per 100,000 county residents.
 
·        Franklin County increased to Alert Level 4 (purple) on Ohio Public Health Advisory System due to a sustained increase in COVID-related emergency room visits, outpatient visits, and hospital admissions.
 
Vaccination Opportunities:
·        There are a significant number of vaccine providers across the state with open vaccination appointments for this week and next week.
o  Several sites are also accepting walk-up appointments including the mass vaccination clinic at Summit County's fairgrounds, Franklin County's regional mass vaccination clinic, and the Youngstown clinics at the Covelli Centre and Congregation Rodef Sholom Temple.
 
·        Ohio's mass vaccination clinic at the Wolstein Center in downtown Cleveland is also opening a satellite vaccination clinic on Friday and Saturday in Maple Heights which has many open appointments for the first dose of the Pfizer vaccine.
 
·        Visit gettheshot.coronavirus.ohio.gov to look for open appointments or call 833-4-ASK-ODH to book an appointment over the phone.
 
Johnson & Johnson Vaccine Update:
·        Governor Mike DeWine and Lt. Governor Jon Husted provided an update on Ohio's vaccination plans following the decision to pause the administration of the Johnson and Johnson (Janssen) vaccine.
 
·        The majority of the Ohio's Johnson and Johnson doses were directed to mass vaccination clinics and to 63 public and private 4-year colleges and universities, most of which have already completed their student vaccinations.
 
·        Of the mass vaccination clinics and college/university clinics that did plan to offer the Johnson and Johnson vaccine this week, most will proceed with their clinics by offering either the Pfizer or Moderna vaccine. 
o  A total of eight sites will not offer any vaccines this week as the health community works to recognize, report, and manage any adverse events related to the Johnson and Johnson vaccine. 
 
·        There are many other local providers with open appointments for the Pfizer or Moderna vaccine. Visit gettheshot.coronavirus.ohio.gov to look for open appointments.
 
·        Governor DeWine, Ohio Department of Health Director Stephanie McCloud, and Ohio Department of Health Chief Medical Officer Bruce Vanderhoff, M.D., directed all Ohio vaccine providers temporarily pause using the Johnson and Johnson vaccine following a recommendation by the Food and Drug Administration (FDA) and the Centers for Disease Control (CDC).
o  The recommendation was made after six people who received the Johnson and Johnson vaccine experienced an extremely rare blood-clotting condition in the United States. 
o  The cases have occurred in women between 18 and 48 and the reactions have taken place within 6-13 days after receiving the vaccine.
 
·        Approximately 6.8 million people have received the Johnson and Johnson vaccine in the U.S. 264,311 of those vaccinations were administered in Ohio.
 
Case Data & Vaccine Information:
·        In-depth COVID-19 data for Ohio: coronavirus.ohio.gov.
·        Ohio's central scheduling system: gettheshot.coronavirus.ohio.gov
·        Ohio mass vaccination information: coronavirus.ohio.gov/massvaccinationclinics
·        All vaccine providers: vaccine.coronavirus.ohio.gov
·        More vaccine information: coronavirus.ohio.gov/vaccine
 
 
 
COMMITTEE RECAP: BILLS OF MUNICIPAL INTEREST
 
·        HB 123 – Community Reinvestment Areas. Sponsored by Rep. Fraizer (R – Newark) and Rep. Cross (R – Kenton), would modify the law governing community reinvestment areas (CRA) and the terms under which property may be exempted in such areas. During its fourth hearing before the House Ways and Means Committee, a substitute bill as adopted that, among other changes, allows limited home rule townships to establish CRAs and authorizes income sharing agreements above $3 million. The League is neutral on this legislation.
 
·         HB 228 – Municipal Corporation Tax. Sponsored by Rep. Roemer (R – Richfield), would make changes related to state-administered municipal net profits taxes. During its first hearing before the House Ways and Means Committee, the bill’s sponsor stated that the bill is intended to make updates to “improve the relationship between the taxpayer, the municipality and the state.” The League is still looking into this legislation.
 
·        HB 177 – Ledger Technology. Sponsored by Rep. Carfagna, R – Genoa Twp.) and Rep. Fraizer (R – Newark), would allow a governmental entity to utilize distributed ledger technology, including blockchain technology. During its third hearing before the House Technology and Innovation Committee, the bill was reported out of committee. The League is neutral on this legislation.
·        HB 201 – Natural Gas. Sponsored by Rep. Stephens (R – Kitts Hill), would prevent local governments from limiting use of natural gas. During its first hearing before the House Energy and Natural Resources Committee, opponents including the League’s Legal Counsel Garry Hunter testified in opposition to the bill, citing the legislation’s violation of municipal Home Rule authority. You can read the testimony in full HERE.