OMA Government Affairs Committee -02-03-2010 mtls. · 2013-06-18 · OMA/Ohio Dept. of Agriculture Webinar: New Ohio Department of Agriculture Rules for Food Processing Establishments

OMA Government Affairs Committee February 3, 2010

AGENDA 9:00A.M. Special Briefing – Can Republicans Capture Ohio House?

• State Representative Matt Huffman (R – Lima) Caucus Campaign Chair • State Representative Ross McGregor (R – Springfield) • Mike Dittoe, Exec. Dir., Ohio House Republican Organizational Committee

Welcome & Self-Introductions

• Caroline Ramsey, Honda of America Manufacturing, Committee Chair OMA Counsel’s Report

• Kurtis Tunnell of Bricker & Eckler L.L.P., OMA General Counsel Federal Update

• Barry Doggett, Eaton Corp. NAM Public Affairs Steering Committee Regional Vice Chair Public Policy Report – Hot Topics

• Ryan Augsburger, OMA Staff • Kevin Schmidt, OMA Staff

Special Guests • Jo Ann Davidson, Former House Speaker, Former RNC Co-Chair, Third Frontier Proponent Discussion Agenda

• Governor’s State of the State Address • Third Frontier Renewal • Automotive Industry Response Efforts • 2010 Election Year Opportunities & Threats

Noon Lunch Presentation – Can Democrats Hold Ohio House? • State Representative Jay Goyal (D-Mansfield) Minority Whip • Liz Brown, Majority Caucus Political Director 2010 Committee Schedule (Remaining Meetings)

• Wednesday, May 19 • Wednesday, August 25 (Pre-Election Forecast) • Wednesday, November 3 (Post-Election Conference Call 3:00 p.m.) • Wednesday, December 8

Committee Meetings begin at 10:00 a.m. and conclude by 1:00 p.m. Lunch will be served. Please RSVP to attend meetings by contacting Judy: [email protected] or (614) 224-5111 or toll free at (800) 662-4463. Additional committee meetings or teleconferences, if needed, will be scheduled at the call of the Chair.Thanks to Today’s Meeting Sponsors:

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Table of Contents OMA Calendar of Events 3 Hot Topics 4 Miscellaneous Legislation 24 Third Frontier 31 Automotive Issues 33 Federal Lending Assistance 43 Governor’s State of State 49 Civil Justice Update 53 Campaign Finance Decision 63 NAM – Save the dat 65 Energy 69 Environment 78 Human Resources/Labor Issues 85 Tax Policy 92 Safety & Workers’ Comp 101

OMA Calendar of Events

BWC - Safety & Hygiene Training Center - Classes for Ohio Workers - Jan. - Mar. 2010

DMTC 2nd Annual Strategic Materials Conference (SMC 2010) - Cleveland - 02/01-02/2010

OMA/Ohio Dept. of Agriculture Webinar: New Ohio Department of Agriculture Rules for Food Processing Establishments - 02/02/2010

OMA Government Affairs Committee Meeting - 02/03/2010

OMA Environment Committee Meeting - 02/04/2010

OMA/Jackson Lewis Webinar: Lessons You Can Learn from (Others’) Employment Litigation War Stories - 02/16/2010

OSU Dept. of Agriculture, Environment & Development Economics - Cap & Trade Seminar - The Implications of Carbon Regulation & Pricing - 02/22/2010

OMA/BBK Webinar: Manufacturing Activities that Can Quickly Improve the Bottom Line - 02/23/2010

OMA/Roetzel & Andress Webinar: How to Protect Your Company from Unfair Import Competition - 02/25/2010

NA 2010 Supply Chain Summit - Cleveland - 04/26-29/2010

OMA Energy Committee Meeting - 04/28/2010

OSU/Clean Fuels Ohio: Moving Ahead 2010 - Sustainable Transportation for the 21st Century - 05/02/2010-05/04/2010

OMA Safety & Workers' Comp Committee Meeting - 05/06/2010

OMA Tax Committee Meeting - 05/13/2010


OMA Environmental Committee Meeting - 05/20/2010


OMA Energy Committee Meeting - 11/03/2010

OMA Tax Committee Meeting - 11/10/2010

OMA Environmental Committee Meeting - 11/11/2010

OMA Safety & Workers Comp Committee Meeting - 11/18/2010


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Hot Topics Current Public Policy in Brief

February 3, 2010

Overview Last month lawmakers returned to Columbus marking the second half of the 128th General Assembly. Legislative activity is scheduled through the month of June if needed. There is a good chance that session will not be needed and lawmakers will be able to return to their districts earlier in this tumultuous gubernatorial campaign year. Prior to concluding work late last year, lawmakers quarreled over the approach to balance the state budget, eventually agreeing to a temporary freeze of a final income tax rate reduction. Already this year, lawmakers have split on renewal of Ohio Third Frontier, the economic development program which will require voter approval this May. Third Frontier has been approved by Ohio voters twice in the past decade. The environment is politically charged and likely to become more so in approach to the General Election in 2010. State Budget and Revenue Last year the state operating budget, House Bill 1, was balanced through program cuts, utilization of federal and state one-time money and the expansion of gambling at race tracks (expected to generate $933 million over the biennium). When gambling was ruled unconstitutional, lawmakers scrambled to “correct” a forecast $851 million budget hole. HB 318 temporarily “froze” the final personal income tax reduction, plugging the hole. As we approach the 2012-2013 biennial budget real solutions will be needed to respond to a projected structural deficit of as much as $8 billion. Card Check and Congressional Labor Agenda Pending federal legislation such as the EFCA (card check), paid sick leave mandate, FMLA revisions and green house gas regulation, requires a greater level of engagement at the grass root level. The OMA continues to hold meetings with business leaders and policymakers around these issues. Energy Efficiency Energy continues to be a focus for manufacturers at the PUCO. The OMA intervened in commission proceedings to allow manufacturers that employ efficiency upgrades to avoid a new financial rider targeting efficiency. This has been an uphill battle as some parties (for example, Ohio Consumers’ Council) are intent on limiting industrial energy efficiency programs. While manufacturers may not be able to install energy efficienct equipment at this time, the rules are important because they define how utilities will spend your money – if energy efficiency is hard to come by through industrial programs because of illogical limitations, utilities will be forced to implement expensive programs that will raise your rates unnecessarily.

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The PUCO is set to rule on FirstEnergy’s rate case today(2/3) that will set rates for July 2011 timeframe and beyond. FirstEnergy was the first utility to file for this timeframe, it is expected that the other utilities will follow suit this year. Energy Leadership Program The OMA instituted the Energy Leadership Program this year to provide a forum and channel for manufacturers to become engaged at the PUCO. The program sets up utility specific groups of manufacturers to participate in every case that comes before the PUCO that could affect rates. Being engaged when rates are being developed is the most cost effective way to keep your rates affordable at your facility. Participation also has the benefit of you being able to voice your specific concerns and having the opportunity to have creative solutions being part of rate cases. Contact Kevin Schmidt at the OMA to learn how your company can be a part. . “Automotive Industry” Support Late last summer the General Assembly convened a panel to make policy recommendations which could impact manufacturing and auto dealer contracts. They are considering passage of legislation to add franchise law protections for auto dealers. Separately, Governor Strickland created the Ohio Automotive Industry Support Council and has tapped OMA president Burkland to co-chair the Council. This Council is handling issues related to automotive industry and will be acting to resolve problems and enhance competitiveness by cataloguing Ohio’s competitive and technological assets. Ohio is the nations number two ranked state for automotive production and auto supply chain. Among the related issues the OMA has been engaged in first hand are various federal and state efforts to enhance access to capital for manufacturers. Tax Policy Ever since passage of the tax reform package in 2005, groups have been attacking it. Most recently some groups sought to define the budget corrections bill (HB 318) as an attack on tax reform since it interferes with the phase-down schedule of the personal income tax. The OMA has been a steadfast opponent of any legislative, regulatory or judicial action that would undermine the broad-base, low-rate principles that define the Ohio CAT. Tax policy seems to be weaving its way into campaign rhetoric. While Governor Strickland has been touting the comparative improvements of Ohio tax climate, especially as it impacts business taxation, Republican challenger Kasich has been critical of the tax environment and is advancing proposals to abolish the personal income tax and the estate tax. Workers’ Compensation Policy Top issues include the BWC’s restructuring of rate-making, monitoring BWC new product implementation, and safe-guarding the guaranty fund paid by self-insured employers. Policymakers are examining for implementation work the recommendations contained in a comprehensive study performed by Deloitte that benchmarked Ohio’s

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system against industry best practices. Some changes will be controversial and will require legislation – the Deloitte study will likely drive reform initiatives for years. Cap and Trade It is unclear if Congress will enact climate change legislation this year. The Obama administration has continued to move forward with regulating carbon through the clean air act, first through its “endangerment finding” regarding carbon, and second through its proposed tailoring rule. The rule would limit the Clean Air Acts application regarding carbon to only those sources emitting over 250,000 tons. Even with this limitation the scope of the proposed regulations is huge. Further, the rules constitutionality is in serious question as it attempts to rewrite law through administrative rule. Health Care The Ohio House affirmatively voted on two healthcare mandates late last year – HB 81 regarding diabetes coverage, and HB 8 regarding autism coverage. The OMA has held firm and opposed these costly mandates at every step. It is unlikely that they will receive significant attention in the Ohio Senate. 2010 Election Outlook Candidates for the 2010 statewide and legislative elections are lining up with the filing deadline just weeks away (Feb 18 for candidates). Down ticket 2010 will be very important. The apportionment board which draws legislative districts is up for grabs. 2010 may give Democrats an opportunity to pick up a seat on the Supreme Court. Control of the Ohio House of Representatives may even be within reach for the Republicans. See below list of candidates at time of printing. Stay tuned. The OMA will have wide array of election year services to engage members.

Ohio Statewide Slate – Races to Watch

U.S. SENATOR Open Seat - Incumbent Republican George Voinovich Retiring D: Lee Fisher (Lt. Governor) OR Jennifer Brunner (Secretary of State) R: Rob Portman (Former Congressman / OMB Dir) OR Tom Ganley (Businessman) GOVERNOR Incumbent Strickland seeking re-election D: Ted Strickland, Incumbent Governor R: John Kasich, Former Congressman, Media Figure, Financial Figure ATTORNEY GENERAL Incumbent Richard Cordray seeking re-election D: Richard Cordray, Incumbent Attorney General R: Mike DeWine, Former US Senator AUDITOR OF STATE Open Seat – Incumbent Auditor Mary Taylor (R) Running Lt. Gov D: David Pepper, Cincinnati Area County Office Holder R: David Yost, Delaware County Prosecutor

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SECRETARY OF STATE Open Seat – Incumbent J.Brunner (D) running for US Senate D: Maryellen O'Shaughnessy, Franklin County Clerk of Courts R: Jon Husted, State Senator from Suburban Dayton, Former House Speaker TREASURER OF STATE Incumbent Kevin Boyce (D) Running to Retain D: Kevin Boyce, Incumbent, first-time on ticket R: Josh Mandel, State Representative Suburban Cleveland SUPREME COURT CHIEF JUSTICE Incumbent Chief Tom Moyer (R) Ineligible Run D: Eric Brown, Franklin County Probate Judge R: Maureen O’Connor, Current Associate Justice (Safe Seat) SUPREME COURT ASSOCIATE JUSTICE Incumbent Lanzinger seeking re-election D: Mary Jane Trap, Court of Appeals Judge, Geauga County R: Judith Ann Lanzinger, Current Associate Justice OHIO HOUSE Current Makeup 53Ds – 46Rs OHIO SENATE Current Makeup 21Rs – 12Ds

• 7th District Primary -- Incumbent Senator Shannon Jones (R) appointed to serve out term of Senator Robert Schuler (deceased). Former state representative Michelle Schneider is challenging Senator Jones to represent the Republican stronghold, nearly 70% R index according to OMA in 2006.

• 19th District Primary? Senate President Bill Harris (R) is term-limited.

State Representative Kris Jordan (R) of Delaware County is vying with former State Representative Tom Collier to represent this Senate district scored at nearly 64% republican by the OMA in 2006.

CONGRESSIONAL

• 1st Congressional District REMATCH of 2008 Incumbent one-term Steve Driehaus (D) is again challenged by former Republican Congressman Steve Chabot. In 2008, the OMA scored this district 53.04% Republican

• 15th Congressional District REMATCH of 2008

Incumbent one-term Mary Jo Kilroy (D) is again challenged by Republican Steve Stivers (R) who very narrowly lost the contest in 2008. In 2008, the OMA scored this district 49.82% Republican down from 57.75% Republican in 2008

• 18th Congressional District

Incumbent two-term Zack Space (D) will be challenged by Republican State Senator Bob Gibbs or former Ag Department Direct Fred Dailey. The OMA scored this district 51.68% Republican in 2008.

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Gongwer News Service, Inc. Volume #79, Report #19--Friday, January 29, 2010

STRICKLAND CAMPAIGN SAYS $6 MILLION ON HAND IS RECORD; GOVERNOR RAISED $2.8 MILLION IN LAST HALF OF 2009

Gov. Ted Strickland's campaign raised less during the last six months than his GOP opponent's but said Friday that the $6 million in available funding for the Democrat's reelection campaign is a record.

"Not only does Strickland's campaign have more cash on hand than any Ohio governor in history at this point in the campaign, but he also has more than any other Democratic Governor up for re-election in the nation," his campaign announced in a news release.

Mr. Strickland reported raising about $2.8 million in annual his campaign finance report, which was due Friday. The report details 2009 contributions and spending not covered in the semiannual filing, which was due last July.

"We are thrilled with the support that Ohioans have shown for Governor Strickland and his leadership during these tough economic times," Strickland for Governor Campaign Manager Aaron Pickrell said.

"They understand that he has made the right investments to ensure that our state emerges from this global economic recession stronger than ever and know that we simply cannot afford to bring back the failed trickle-down economic policies that benefited Wall Street at the expense of Ohio. In the coming months, we look forward to discussing Governor Strickland's record and his plans to ensure that our economy works for all Ohio families."

The Strickland campaign brought forward about $4 million from the prior reporting period and listed more than $2.6 million in contributions, $105,282 in other income and $167,206 in in-kind donations over the last six months. The committee reported $579,093 in spending and an on-hand balance of about $6.17 million.

The campaign said it raised a total of $6.4 million last year.

John Kasich, the presumed GOP nominee for governor, announced earlier in the week that he raised more than $5 million last year, including $4.5 million during the reporting period, and had an on-hand balance of more than $4 million. (See Gongwer Ohio Report, January 27, 2010)

State Auditor Mary Taylor, who dropped a reelection bid to become Mr. Kasich's running mate, reported zeroing out her campaign committee's funds. She listed $144,281 brought forward, $230,420 in contributions and $374,731 in spending, about half of which went to the Ohio Republican Party State Candidate Fund.

MANDEL, PEPPER TAKE FUND-RAISING ADVANTAGE INTO EARLY STAGE OF STATEWIDE RACES

Two newcomers to statewide elections staked considerable early fund-raising leads Friday based on their campaign filings with the secretary of state's office.

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Republican Rep. Josh Mandel, a state treasurer candidate, and Democrat David Pepper, a state auditor hopeful, have easily outdistanced their potential foes.

State Treasurer Kevin Boyce filed a report Friday reflecting cash on hand at $646,524. Although Mr. Boyce said this week he has yet to declare his candidacy for re-election, he received almost $200,000 in contributions, $50,000 in other income and forwarded $486,178 from the prior reporting period, his filing shows. The treasurer reported expenditures of $89,032 and in-kind contributions of almost $13,000.

However Rep. Mandel (R-Lyndhurst) listed more than $2 million on hand. The candidate reported expenditures of $232,525, contributions totaling $944,668 and a forwarded amount of more than $1.3 million.

Mr. Pepper reported $604,966 on hand for his campaign. He forwarded $268,389 from the prior period, raised $469,708, and spent $104,445, according to his filing.

The Hamilton County commissioner easily outdistanced GOP Delaware County Prosecutor David Yost's reported on-hand balance of $27,319. The Republican reported contributions of $47,621 for his race for state auditor, $51,174 in expenditures and $30,122 brought forward.

Mr. Yost, who originally planned to run for attorney general, announced Monday he would drop out of that race and instead seek the auditor's post. (See Gongwer Ohio Report, January 25, 2010). His decision followed State Auditor Mary Taylor's announcement that she would join GOP gubernatorial candidate John Kasich's ticket as his running mate.

A report for Rep. Seth Morgan (R-Huber Heights) also an announced candidate for auditor was not posted on the secretary of state's website prior to deadline. Franklin County Recorder Robert Montgomery's name has also recently surfaces as a potential state auditor candidate.

Attorney General Richard Cordray leads the pack financially among all candidates for state office, reporting $2.5 million on hand in his Friday campaign finance report.

The annual reports document campaign activities not previously reported through Dec. 31, 2009, and are required if a candidate raises or spends $1,000. Several candidates submitted their reports throughout the week prior to the Friday deadline.

With just more than $2 million forwarded, Mr. Cordray raised another $516,792 in contributions, $85,263 in other income and $8,057 as in-kind contributions. His expenditures totaled $32,477, according to the report.

Challenger Mike DeWine reports just more than $1 million on hand. He forwarded $39,500, received $770,510 in contributions and $500,589 in other income; he spent $279,510 and reported $25,509 in in-kind contributions. He also reported loaning himself $500,000.

Secretary of state candidate Sandra O'Brien's Tuesday filing showed $1,450 in contributions, $95,000 in other income - loans from herself - and expenditures of $50,065. With $95,530 forwarded, Ms. O'Brien's on-hand balance is $141,915.

Sen. Jon Husted (R-Kettering) announced Jan. 20 he has more than $2 million on hand for his campaign for secretary of state (See Gongwer Ohio Report, January 25, 2010).

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With $1.3 million forwarded, Mr. Husted also received $860,444 in contributions and spent $74,845. The senator also reported in-kind contributions of $86,679.

A filing for Rep. Jennifer Garrison (D-Marietta), who previously announced for secretary of state, was not available before publishing deadline.

Franklin County Clerk of Courts Maryellen O'Shaughnessy is also reportedly considering the secretary of state race.

There are three seats at stake on the Ohio Supreme Court this year, but first significant campaign finance reports will be those filed in advance of the May 4 primary.

The Code of Judicial Conduct provides that campaign committees of judicial candidates may begin soliciting contributions no earlier than 120 days before the primary.

CAUCUS MAJORITIES FLEX FUND-RAISING MUSCLES, ANNUAL CAMPAIGN FILINGS SHOW

House and Senate caucus campaign funds continued a trend Friday with the latest finance reports showing significant leads for the majorities.

The largest disparity was in the Senate, where Republicans have dominated for a quarter century and currently control 21 of the 33 districts.

The Republican Senate Campaign Committee brought forward more than $1.8 million from the prior reporting period and raised an additional $1.1 million since July, according to its filing. The committee spent $150,410 and has a balance of more than $2.75 million.

Ohio Senate Democrats reported contributions of $139,340 and a brought-forward total of $230,782. The committee spent $65,029, leaving $305,690 on hand.

The House Democratic Caucus Fund reported $2.05 million brought forward, $2.24 million in contributions, $247,307 in spending and more than $4 million on hand.

The Ohio House Republican Organizational Committee listed $901,700 brought forward, more than $1 million in contributions, $191,678 in expenditures and an on-hand total of $1.73 million.

House Democratic Caucus Campaign Chairman Rep. Jay Goyal (D-Mansfield) said in a statement that the committee's filing "represents the outpouring of support for our caucus' accomplishments and priorities in fighting for middle-class Ohioans. It also illustrates the commitment of folks around the state to help us retain a Democratic majority in the Ohio House of Representatives."

OHROC Chairman Rep. Matt Huffman (R-Lima) said GOP contributions came in part from "many new faces and staunch supporters expressing interest in helping our caucus regain the majority in the Ohio House of Representatives." Minority Leader Bill Batchelder (R-Medina) said, "Ohioans are fed up with the quagmire of the current leadership and are looking for representation in Columbus from people who share their values and truly understand the districts."

The annual reports detail financial activities that occurred through Dec. 31, 2009 but weren't reported in previous filings. For most candidates and political campaign committees, this covers the seven-month period not included in the semiannual filings, which were due last July.

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The state parties maintain several accounts, including those used for state and legislative candidates, federal candidates and the party's own political activities as well as local candidates. Additionally, the parties maintain restricted accounts used for operating expenses.

The Ohio Democratic Party State Candidate Fund brought forward $552,346 from the prior reporting period and listed $961,362 in contributions, $327,692 in other income, $1.82 million in spending and $19,535 on hand. Most of the spending was directed to the statewide campaigns of Gov. Ted Strickland, Treasurer Kevin Boyce and Attorney General Richard Cordray. The committee owes $175,000 in loans, according to its report.

The Ohio Democratic Party Committee reported bringing forward $31,741, collecting $752,803, spending $291,108 and having $499,510 on hand.

The Ohio Republican State Central & Executive Committee State Candidate Fund reported $591,183 brought forward, $199,881 in contributions, $329,715 in spending and an on-hand balance of $461,925.

The Ohio Republican State Central And Executive Committee State Account listed $78,896 brought forward, $59,825 in donations, $141,217 in expenditures and an on-hand balance of $4,612. The committee owes $209,189 in outstanding loans.

Ohio Democratic Party Chairman Chris Redfern said his party collected a total of $7.3 million last year - a record for a non-election year. When its candidates are included, the contributions total nearly $20 million, he said.

"The Ohio Democratic Party and its candidates are better positioned than ever at this point in an election cycle," Mr. Redfern said in a statement. "We are overwhelmed by the support we have received by Ohioans from all walks of life. Our stakeholders are fully invested in helping maintain the Ohio Democratic Party's status as the strongest state Party in the country and furthering our organizational advantage."

CONGRESS CAMPAIGNS: STIVERS LISTS $514,000 BALANCE; CRANLEY HAS $1.3 MILLION FOR SENATE BID

A federal campaign finance report showed Friday that Republican Steve Stivers entered 2010 with a cash balance of $514,320 in his campaign to unseat first-term U.S. Rep. Mary Jo Kilroy (D-Columbus) in the 15th Congressional District.

Their contest is viewed as a key race for the U.S. House from Ohio.

Mr. Stivers, a former state senator, raised $279,467 in the fourth quarter of 2009. For the election cycle to date, his report shows net contributions of $680,556.

A majority of the contributions for 2009 ($428,796) came from individuals, with the rest ($261,260) from political action committees.

His campaign said he has $111,000 more cash in the bank now than at the same time in the 2008 election cycle. He has about $175,000 less available than his Democratic opponent.

Mr. Stivers said nearly half of the contributors thus far were new to his campaign.

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"Voters are angry, and justifiably so," he said.

"Congress is passing bills left and right that kill jobs, grow government, increase taxes and add to our national doubt - they're not happy with what's going on in Washington," Mr. Stivers said in a news release.

Earlier this week, Rep. Kilroy's campaign said she raised over $344,000 in the fourth quarter of 2009, bringing the total for the year to $1.1 million. She listed a balance on hand of $689,000.

Candidate committees have until Jan. 31 to submit their 2009 year-end reports to the Federal Election Commission.

12th District: In the adjoining 12th Congressional District of central Ohio, U.S. Rep. Patrick Tiberi (R-Galena) listed net contributions of $1.13 million during 2009, expenditures of $477,068, and cash on hand of $1.21 million as the election year began.

A majority of Rep. Tiberi's contributions ($655,576) in 2009 came from political action committees, with the balance ($479,284) from individuals.

Among the PAC contributions were $5,000 each from Anheuser Busch, Limited Brands, Cardinal Health, and UPS. Procter & Gamble PAC donated $4,000.

A report from Democratic challenger Paula Brooks was not available Friday evening.

18th District: A report from Sen. Bob Gibbs (R-Lakeville) filed Friday reflected cash on hand of $156,923 in his campaign for the GOP nomination to challenge U.S. Rep. Zack Space (D-Dover).

Mr. Gibbs' tally was about three times that of Fred Dailey of Mount Vernon, his declared opponent in the May 4 Republican primary. Mr. Dailey listed a balance of $53,445 at the end of the reporting period.

Sen. Gibbs recorded net contributions for the cycle to date of $215,096, with $100,000 of the total collected during the fourth quarter of 2009. He said operating expenditures amounted to $58,171.

Mr. Dailey, a former state agriculture director who lost to Rep. Space two years ago, had net contributions of $67,555 for the cycle to date, and expenditures of $49,637.

A report from a third declared GOP candidate, Jeanette Moll of Zanesville, was not immediately available. She listed a cash balance of $70,409 in a third-quarter 2009 report.

Rep. Space listed a cash balance of $974,592 at the end of the third quarter.

U.S. Senate: The campaign of Cleveland businessman Tom Ganley said Friday his report would show receipts of $1.47 million during the fourth quarter of 2009 in his bid for the Republican nomination for the U.S. Senate.

Jeff Longstreth, campaign manager, estimated total fund-raising for the year at about $1.8 million, with $1.3 million on hand.

Mr. Ganley is challenging former U.S. Rep. Rob Portman for the GOP nomination. Mr. Portman said earlier he raised $7.6 million last year, and had about $6 million on hand.

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Mr. Ganley heads the Ganley Automotive Group that is made up of 32 dealerships employing at least 1,000 people.

Gongwer News Service, Inc. 17 S. High St., Suite 630 Columbus, Ohio, 43215

Phone: 614.221.1992 Fax: 614.221.7844 Email:[email protected]

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Leadership– Public Policy News

Manufacturing Central in State of the State

Together with advanced energy and education, manufacturing was a central theme of the State of the State address given by Governor Ted Strickland this week. Strickland called Ohio a “state that invents things, designs things, makes things, grows things,” and said “there is no product that wouldn’t benefit from having ‘Made in Ohio’ stamped on it.” He announced several new initiatives of interest to manufacturers.

Strickland said “we have small manufacturers in Ohio today who cannot afford to expand their companies and call back laid off workers, even as orders increase, because they lack capital.” He called the lack of access to capital the “single greatest factor inhibiting economic recovery.” He announced intention to create a new lending clearinghouse and a new working capital fund, under development with the state’s banking industry.

The governor announced the creation of a “Manufacturing Certificate” within the workforce development system, a program to support sourcing within Ohio (called “Insource Ohio), a small business development program modeled on a successful pilot at the Lorain County Community College (called “Build Your Own Business”), funding of co-op and internship programs from new revenue coming from casino licensing fees, a “groundbreaking agreement” between the University System of Ohio and Procter & Gamble on open innovation (which will be the model upon which a manufacturing technology network might be build), and a new funding program for advanced energy products and production. 01/28/2010

Gubernatorial Campaign Positioning Set

Over the next nine months, millions of dollars will buy millions of minutes of campaign ads in the gubernatorial race. But, the fundamental positioning of each candidate’s campaign was on display this week. Watch the State of the State address of Governor Strickland and the response from Republican challenger John Kasich to see it. 01/29/2010

Senate Passes Scaled Down Third Frontier

The Senate passed HJR 12 this week that would place the Third Frontier program on the ballot in May. The Senate's version of the ballot issue reduced the amount of debt allowed from the $950 million mark the House passed earlier to $500 million. The Senate also included $100 million in debt authority for the Ohio Public Works Program which funds local infrastructure projects.

The Senate cited concerns over increasing the state’s debt in the current economy, while the House has stated the nearly $1 billion is necessary to accelerate job creation in the state. The difference will require a conference committee between the chambers, which must resolve its work before February 3 to make it on the May ballot. 01/29/2010

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Ohio Auto Council Reports Progress

The Ohio Auto Support Council, established by Governor Strickland’s executive order last summer, met this week to report progress of its working groups. The council, co-chaired by OMA President Eric Burkland, had commissioned working groups on competitiveness, legacy issues, technology and access to credit.

The legacy work group is dealing with the issues that arose from bankruptcies and plant closures, including environmental remediation, job training, pensions and site re-use. The access to credit work group has worked with state and federal officials, and the financial services industry, to develop state and federal solutions to the credit scarcity problem. The competitiveness group is working on recommendations to improve Ohio’s competitive position to gain investments in research and manufacturing.

Dr. Giorgio Rizzoni of the OSU Center for Automotive Research presented the technology report. An initial meeting of this group took place in December, and was attended by more than 80 leaders from manufacturing, academia and government (meeting proceeding notes are available here). The technology group will continue to work to facilitate matchmaking between manufacturers’ needs for technical know-how and the state’s resources, including the Edison centers and state universities.

For more information on this work, contact Eric Burkland. 01/28/2010

Auto Dealers Testify in House on Franchise Bill

The Ohio Automobile Dealers Association (OADA) testified this week in support of HB 364, which modifies Ohio’s Motor Vehicle Dealer Franchise Law. HB 364 sponsored by Matt Lundy (D - HD 57, Lorain) is companion legislation to SB 204 sponsored by Mark Wagoner (R – SD 2, Toledo) which received a hearing last week in the Senate.

Generally, companion bills that are receiving hearings are considered to be on the “fast track” – with bipartisan support for these bills this may well be the case. The bills are seen by some industry observers to be perhaps the worst franchise bills in the country from an OEM perspective. 01/29/2010

Strickland Pushes for Credit for Manufacturers

Governor Ted Strickland was joined by five other governors in a letter to Treasury Secretary Tim Geithner urging “quick action” in helping manufacturers gain better access to credit “to prevent foreign countries from gaining a competitive advantage in emerging manufacturing sectors.”

The governors proposed making “use of available federal funding to develop innovative partnerships with states and financial institutions to increase credit access to small businesses and manufacturers.” Under the plan, funds would be made available to state-level intermediaries to back bank loans to manufacturers.

In the letter, the governors wrote that “we cannot fully recover if manufacturing does not regain its place in the U.S. economy as the employer of the great American middle class. The United States cannot fall behind as other countries invest in manufacturing and gain an advantage.”

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Joining Strickland in signing the letter were: Granholm of Michigan, Quinn of Illinois, Rendell of Pennsylvania, Perdue of North Carolina and Doyle of Wisconsin. 01/22/2010

Strickland Chooses Running Mate

Candidate Ted Strickland this week announced the selection of Yvette McGee Brown as his running mate for the lieutenant governorship of Ohio. Current Lt. Governor Lee Fisher is running for the U.S. Senate seat that will be vacated by the retiring Senator George Voinovich.

Yvette McGee Brown is the current and founding president of the Center for Child and Family Advocacy at Nationwide Children's Hospital. She is a former Franklin County Common Pleas Court judge; she was the first African-American and the second woman to be elected to the court.

Political observers see the selection as a move to connect the campaign more solidly with the Democratic base in the state. 01/22/2010

Campaign Spending Limits Rejected by Supreme Court

The United States Supreme Court this week held that corporations may use unlimited funds from their general treasuries to support or oppose candidates for president and Congress. This decision eases the federal limits imposed 20 years ago on their participation in federal campaigns. The decision is expected to impact corporate and union participation in federal campaigns and threatens the campaign limits imposed by 24 states, including Ohio. 01/21/2009

Third Frontier Advances through Ohio House

Several House Republicans joined with all House Democrats in voting to provide the necessary 3/5ths majority for House Joint Resolution 12 to place a renewal of the Ohio Third Frontier before Ohio voters, probably on the May ballot.

The Third Frontier, initially created in 2002, makes targeted investments to foster innovation. Voter approval is required to authorize the state to borrow funds. Ohioans last voted to reauthorize Third Frontier and borrow funds in 2005.

The Ohio Senate is expected to act on the measure next week. If Third Frontier renewal is important to your company, you should contact your state Senator to urge support. 01/15/2010

OMA and FirstEnergy Offer Low Cost Loans for Manufacturing Customers

The Ohio Manufacturers’ Association (OMA) and FirstEnergy Corp.’s Ohio utilities – Ohio Edison, Cleveland Electric Illuminating Company and Toledo Edison – will provide $7.5 million over three years to support economic development and job retention projects under an agreement reached by the two organizations to support economic development and jobs as part of their Electric Security Plan (ESP).

Under their agreement, the companies will provide a total of $2.5 million per year to three Ohio port authorities to support projects designated by the OMA. The port authorities – Cleveland-Cuyahoga County, Toledo-Lucas County and Summit County – will use the funds for low-interest loans to manufacturing companies for qualifying projects.

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To be eligible for loans, the manufacturers must be customers of one of FirstEnergy’s Ohio utility companies and members of the OMA. In addition, the funded projects must support new economic development and job retention, involve at least $1 million in capital investments, represent new electrical load of at least 100 kilowatts, and meet the established guidelines for the port authorities’ existing bond fund financing programs.

Contact OMA’s Kevin Schmidt for more information. 01/13/2010

Senate Considers Tightening Auto Franchisee "Protections"

Appearing before the Ohio Senate Insurance, Commerce and Labor Committee, the leader of the Ohio Auto Dealers Association delivered testimony in support of SB 204 to tighten "protections" for auto dealers from auto manufacturers. An identical bill is also pending in the Ohio House indicating the General Assembly's high level of interest in this issue.

Auto dealers are a formidable lobby. The bills before the General Assembly are seen by some industry observers to be perhaps the worst franchise bills in the country from an OEM perspective. 01/15/2010

Governor's Race Heats Up - Kasich Picks Taylor as Running Mate

Republican gubernatorial candidate John Kasich this week named State Auditor Mary Taylor as his running mate. The campaign announcement focused around economic message points calling for repeal of Ohio's estate tax and phase out the state income tax over an unspecified number of years, along with restructuring state government and limiting lawsuit awards.

Kasich's opponent, incumbent Democrat Governor Ted Strickland, is expected to announce his running mate soon with short list rumors recently including Youngstown Mayor Jay Williams and former Franklin County Judge Yvette McGee Brown. 01/15/2010

Ohio House Considers Another Health Care Mandate

The Ohio House heard sponsor testimony on HB 332 from Representative Dan Stewart. HB 332 mandates the coverage of prescription contraceptives in all health care policies that cover prescription drugs. In his testimony, Representative Stewart implies that federal courts have ruled that denial of this coverage is against the law.

The OMA sent a letter to Representative Stewart this week reaffirming its opposition to health care mandates and points out that the courts have, in fact, not definitively ruled in such a way. 01/15/2010

Obama Administration Unveils Manufacturing Policy

At its White House meeting with manufacturers Wednesday, the Obama Administration released its much-anticipated manufacturing policy report.

The report, titled “A Framework for Revitalizing American Manufacturing,” contains a key (and welcome) fundamental assumption: “Overall costs drive manufacturers’ location decisions. In today's increasingly competitive global marketplace, manufacturing activities will be undertaken by private actors who will locate factories where total all-in cost is lowest.”

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The report presents an identification of “cost drivers at each step in the manufacturing process” and “government’s role in each cost driver.” Examined cost drivers are: labor, technology and business practices, equipment, location, transportation, access to markets, and regulation and taxation. A series of corrective actions are proposed for each cost driver.

“Past manufacturing strategies have largely failed,” the report finds. “Two different views have dominated these past approaches. One view was that manufacturing industries needed to be protected and insulated. Not only was this approach ineffective but it also was counterproductive. An alternative view was laissez-faire, cutting critical research and support programs and hoping the market will take care of problems. This approach…threatens to rob us of the potential for greater innovation over future decades.”

The report proposes a middle strategy in which government “must help to create a competitive business climate,” “provide funds to make important investments that increase America’s competitiveness…investments that the private sector is unlikely to make on its own,” and provide “regulatory certainty.”

"What's important now is that we closely study the report, have a sense of urgency in taking appropriate actions, and hold government accountable for results," said McGregor. 12/17/2009

Finally ... A Focus on Manufacturing

Finally, a serious national conversation about American manufacturing is taking place, stimulated by industry leaders such as Robert A. McDonald, President and CEO of Procter & Gamble.

In a letter to the White House he writes: “We applaud the Administration’s support of innovation and the investment in basic applied research. Innovation is P&G’s lifeblood… In addition to fostering a favorable innovation environment, we need the right mix of competitive corporate tax policies, trade policies, health care reform, and sensible, science-based regulations that will continue to attract investment and allow us to compete on an equal footing in the U.S. and across the globe with our foreign competitors.”

Reacting to the Obama manufacturing report, Governor Ted Strickland stated in a press release: “The very foundation of America was built by manufacturers and manufacturing workers, and this industry is still the backbone of our national economy.” Strickland called out the need for access to working capital: “Our manufacturers need working capital to meet existing orders and to pay for the retooling and retrofitting necessary to innovate and compete by pursuing new markets, technologies and products.”

U.S. Senator Sherrod Brown in his press release stated: “Manufacturing is critical to the strength of our nation and the future of our middle class. After numerous conversations with President Obama, Vice President Biden, and Senior Counselor on Manufacturing Policy Ron Bloom, I am encouraged that the administration is invested in the future of American manufacturing.” 12/18/2009

Ohio Auto Support Council Reports Progress

At a meeting in Columbus this week, the Ohio Auto Support Council, created by executive order of Governor Strickland and co-chaired by OMA President Eric Burkland, presented reports by

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four work groups within the initiative. The council was established to determine ways to protect and grow the automotive industry and its large, networked supply chain.

Next up in the council’s work is a meeting of its technology work group which will take place at The Ohio State University on Monday, December 21. The technology work group will organize its work in four sub-groups: (1) Cataloging Ohio Technical Assets, (2) Creating an Ohio Technical Network, (3) Global Benchmarking, and (4) Innovation Ideas. The groups will be composed of participants from manufacturing, academia and government-supported labs and intermediaries.

For more information, or to participate in the technology initiative, contact Eric Burkland. 12/16/2009

"We Need Americans to Help Americans"

"America is in trouble today, and we need Americans to help Americans," said OMA Chairman Jim McGregor, vice chairman of McGregor Metalworking in Springfield at a White House forum on manufacturing on December 16.

McGregor was one of a dozen manufacturing leaders participating in the forum led by Vice President Joe Biden, and moderated by Commerce Secretary Gary Locke, Labor Secretary Hilda Solis, and National Economic Council Director Larry Summers.

The purpose of the meeting was for the Vice President and his team to hear from some of the nation's leading CEOs, small and medium enterprise owners, labor leaders, and academics about ideas for revitalizing American manufacturing.

McGregor was invited to represent small- and medium-sized manufacturers. He said, “"I am very proud to be here and congratulate the Obama Administration on releasing its Manufacturing Agenda. The proposals we are discussing today must ensure that small manufacturers become more cost-competitive with our overseas competition. We can compete with anyone in the world if we are on a level playing field."

Other participating manufacturing leaders with Ohio operations were: Robert McDonald, CEO, Procter & Gamble; Robert Keegan, CEO, Goodyear; Daniel DiMicco, CEO, Nucor; John Faraci, CEO, International Paper. Watch the meeting proceedings online here.12/17/2009

OMA Board Elects Alcoa’s Roegner

This week the OMA board of directors elected Eric Roegner, president, Alcoa Forged and Extrusions business unit, Cleveland, Ohio, to a three-year board term.

Eric formerly was president of Alcoa’s Global Hard Allow Extrusions where he had responsibility for Alcoa’s hard alloy extrusion assets in North America, Europe, Korea and Russia. His new role combines continued responsibility for extrusion assets as well as for the company’s forging assets. Eric joined Alcoa in 2006. Prior to joining Alcoa, Eric had a 12-year career with management

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consulting firm McKinsey & Company where he was a partner in its Cleveland office. Earlier in his career, Eric held engineering positions with Nordson Corporation and Schlumberger.

Eric has a BSE degree in mechanical and aerospace engineering with a minor in architecture from Princeton University and an MBA from Case Western Reserve.

He lives in Cleveland with his wife and three daughters.

OMA chairman, Jim McGregor, said that, “Eric brings exciting manufacturing experience to the OMA board as well as enthusiasm for working on behalf of the state’s manufacturers. He has hit the ground running. We are pleased and proud to have his service.” 12/08/2009

Manufacturers Engage on Radical Labor Agenda

OMA member company Sutphen Corporation hosted a meeting of central Ohio manufacturing leaders to discuss the radical labor threat pending at the federal level. At this fifth employer meeting held to draw attention to Congresswoman Mary Jo Kilroy’s support for the “Employee Free Choice Act” (EFCA), employers learned more about the threat and how to engage to fight it.

Don Keller of Bricker and Eckler provided an update on EFCA and described how recent action by the National Labor Relations Board (NLRB) is particularly worrisome.

“We’re committed to getting health care done... and then we’ll get to the Employee Free Choice Act in the wake of that. I feel very confident that in the wake of health care, you’ll see that we’ll get the Employee Free Choice Act done,” AFL-CIO President Rich Trumka said recently.

Make sure you are communicating your concerns with your member of Congress and Senators Brown and Voinovich. 12/11/2009

New State Regulations of Interest to Food Manufacturers

By passing State Issue 2, voters amended the Ohio Constitution to create the Ohio Livestock Care Standards Board. Now draft legislation to establish the new board is available for review and comment.

Manufacturers of commercial livestock feed will be particularly interested in a new fee proposed to cover operating expenses of the board. The inspection fee paid by “first distributors of commercial feed” is increased from $.25 to $.40 (cents) per ton; companies currently exempt from this fee would remain exempt. Legislative approval of the proposal is expected to be fast-tracked.

Separately, food processing manufacturers will want to review the new rule proposed by the Ohio Department of Agriculture to impose a new registration requirement and fee on food manufacturers. Comments provided to the department by the OMA were incorporated into the rule-filing. The new requirement will go into effect by February.

The OMA will be host a webinar for manufacturers to get compliance tips from agriculture department regulators and to ask questions concerning both issues. Click here to make sure we contact you about this January learning event. 12/11/2009

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Third Frontier Reauthorization Still Under Discussion

The renewal of the Third Frontier Program, credited with a return of $6.6 billion in economic development based on $681 million invested since 2002 and the creation of 41,300 new jobs, is currently under discussion at the General Assembly.

House Democrats have discussed proposals to put a renewal initiative on the May primary ballot. A ballot action is necessary to continue the program.

However, Bill Harris (R-19, Ashland), president of the Ohio Senate, recently questioned the timing of the initiative characterizing the Democrats’ move as “a campaign talking point to the resumes of all who are up for election in 2010 or about pleasing the power elite.” President Harris went on to state that he will support a responsible ballot initiative that he is confident voters will support and that doing so will require more work. 12/04/2009

Ohio Department of Development Trade Mission

The Global Markets Division of the Ohio Department of Development invites you to take part in a three-country trade mission to São Paulo, Brazil, Santiago, Chile, and Lima, Peru. The mission is scheduled April 10-20, 2010. The purpose of this mission is to assist small- to medium-sized companies from states in the Great Lakes region to export their products and services to these rapidly-growing markets. If you are not already active in these markets, or if you are looking to increase your existing market share in this region, now is the time to get involved. 12/04/2009

House and Senate Set Remaining Priorities for 2009

While the $800 million budget shortfall is the top priority for both chambers in the remainder of 2009, other issues have made the priority list. The remainder of 2009 promises to be busy.

Speaker Budish’s office has recently stated that HB 8 mandating unlimited autism healthcare coverage and HB 81 mandating “gold plated” diabetes coverage are under consideration for near-term action.

Senate President Bill Harris stated that implementing legislation for recently passed constitutional amendments (Issue 1: stipends for Middle East veterans, and Issue 2: livestock care oversight panel) will be priorities. Additionally, the Senate is considering legislation limiting BWC’s ability to manage the actuarial soundness of its rates (SB 213, Faber). 12/03/2009

New Plastics Industry Benchmarking Survey Points Up Trends and Success Drivers

OMA Connections Partner, Plante & Moran, has just published its annual North American Plastics Study, which it describes as an in-depth benchmarking survey linking profitability and performance in the plastics industry. The study measures key performance indicators in areas of strategy and marketing, financial performance, human resources and operations. The study is intended to provide an objective view of what drives success in the plastics industry.

The 2009 study tracked data from 179 plastics processors in the U.S., Mexico, and Canada. Participant data covered 265 facilities operating 6,612 injection presses in more than 13 million

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square feet of manufacturing space. Injection molders made up the largest group of companies in the study, which also included extrusion firms, blow molders, thermo formers, and compression molders.

The complete 77-page 2009 benchmarking report is available exclusively to survey participants. Here is the executive summary of the report and more information is available at http://plasticssurvey.plantemoran.com. 11/17/2009

Airbus Seeks Ohio Suppliers

The Ohio Aerospace Institute and Ohio's Edison Technology Centers invite Ohio manufacturers to Ohio's first-ever Airbus Procurement Summit on Monday, December 7th, 2009.

At this event, Ohio suppliers will learn more about opportunities to work with Airbus Americas, a leading aircraft manufacturer. Senator Sherrod Brown and Mr. Allan MacArtor, Chairman Airbus Americas, will explain the importance of the relationship between Airbus and Ohio and the opportunity to capitalize on existing and emerging Ohio aviation manufacturing capabilities to grow Ohio's value in the Airbus supply chain.

Airbus procurement executives and Tier 1 and Tier 2 suppliers will be available to explain how to contract with Airbus and its subcontractors. Small and mid-sized suppliers interested in joining the aerospace supply chain business will have an opportunity to learn about the requirements and current needs of the industry, meet supply chain executives, and sign up for one-on-ones with procurement managers. The event focus will be on suppliers with qualified products in four key procurement areas: structures, systems, propulsion and cabin.

The event will take place at the Ohio Aerospace Institute located at 22800 Cedar Point Road, Cleveland, OH. Online registration is open at http://www.oai.org/events. A similar event is being planned in Southwest Ohio during the first quarter of 2010. 11/16/2009

Regulatory Reforms Bills Compete and Stall

Two regulatory reform bills are currently pending in the General Assembly. The bills utilize competing approaches to the issue.

Senate Bill 3 was introduced earlier this year by Senator Keith Faber (R-Celina). The keystone of Senate Bill 3 is a cost-benefit analysis which is required when agencies propose a rule. The bill creates two new government entities, a Small Business Ombudsperson and a Small Business Regulatory Review Board, to monitor rule-making by state government agencies.

In June, Representatives Mike Moran (D-Hudson) and Jim Zahringer (R-Fort Recovery) sponsored legislation intended to codify most of the principles in Governor Strickland's 2008 Executive Order for "Common Sense Regulation of Business." The central approach of House Bill 230 (and of the executive order) is to create layers of opportunity for comment by the regulated community about a particular rule and about the regulated process in general.

Senate Bill 3 passed the Senate earlier this year and sits in the House. House Bill 230 passed the House and sits in the Senate. 11/13/2009

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Thank You, OMA Members, for Your Involvement

A recent posting of the Public Affairs Council discusses the financial (and involvement) difficulties of trade associations in America. It reminds us to thank you for your involvement in the OMA (and other manufacturing associations) through the challenges of the times. 11/13/2009

Ohioans Vote Yes on Issue Two

Nearly 64% of Ohio voters approved State Issue Two, a constitutional amendment that creates the “Ohio Livestock Care Standards Board” to regulate livestock practices. Food manufacturers have been concerned that the board not duplicate or conflict existing food processing regulations.

On Wednesday, Mike Eckhardt of the Ohio Department of Agriculture, which will be responsible for implementing the amendment, informed members of the OMA Government Affairs Committee that the Department intends to keep the new regulations focused on livestock (only) and will be working with the OMA to address food manufacturers’ concerns. Members can contact the OMA’s Ryan Augsburger with questions. 11/05/2009

Ohio Ranked as Fourth Best Business Climate

Site Selection magazine has ranked the Ohio business climate 4th among the states (after North Carolina, Texas and Virginia) in 2009, up three spots from where the state placed in 2008. The magazine’s annual state business climate rankings are computed from new plant construction data and a survey of site selectors.

In the executive survey portion of the ranking, Ohio improved from 17th in 2008 to eighth in 2009. According to the Site Selection surveys, Ohio’s transportation infrastructure and access, existing workforce skills, and state and local tax environment, including the full elimination of the corporate franchise and tangible personal property taxes, were the heaviest influences on executive polling. 11/05/2009

Check it out: New Online Magazine on Ohio Business

There’s a new source of information about technology and business in Ohio: a biweekly online magazine called hiVelocity. Here’s how the publishers describe it:

“hiVelocity tells the story of the new economy in Ohio. It's a narrative of creative people and businesses and what they are doing to create jobs for today and tomorrow. It's the story of a state on the move. Every other Thursday, hiVelocity will present original stories, video and photography to tell that story, from Cleveland to Cincinnati, Marietta to Maumee and parts in between.”

Get hiVelocity free in your e-mailbox by signing up here. 11/05/2009

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– Miscellaneous Bill Tracker

Miscellaneous Legislation of Interest to Manufactuers

Prepared by: The Ohio Manufacturers' Association Report created on January 29, 2010

HB2 TRANSPORTATION BUDGET

(UJVAGI, P) To make appropriations for the programs related to transportation and public safety for the biennium beginning July 1, 2009, and ending June 30, 2011.

Current

Status: 4/1/2009 - SIGNED BY GOVERNOR, eff. 4/1/2009 - (13 vetoes)

Comments: None HB7 BUILDING SUSTAINABILITY

STANDARDS (HARRIS, M) To require a building or structure erected or constructed using state capital moneys to adhere to certain sustainability standards.

Current

Status: 1/12/2010 - Referred to Committee Senate Finance and Financial Institutions

Comments: None HB8 AUTISM (CELESTE, T) To prohibit

health insurers from excluding coverage for specified services for individuals diagnosed with an autism spectrum disorder.

Current Status:

12/15/2009 - Referred to Committee Senate Insurance, Commerce and Labor

Comments: None HB40 COURT-ORDERED PARENTING

(LETSON, T) To require certain employers to allow a parent to exercise court-ordered parenting time without terminating employment, reducing pay, or taking other similar action against the parent.

Current

Status: 10/7/2009 - House Judiciary, (Third Hearing)

Comments: None

HB45 VEHICLE HEADLIGHTS (UJVAGI,

P) To require the headlights of a vehicle to be lighted when its windshield wipers are in use.

Current Status:

3/4/2009 - Referred to Committee House Transportation and Infrastructure

Comments: None HB56 COLORECTAL EXAMINATIONS

(MILLER, E) To require certain health care plans to provide benefits for colorectal examinations and laboratory tests for cancer.

Current

Status: 5/20/2009 - House Insurance, (Second Hearing)

Comments: None HB81 DIABETES (BOYD, B) To require

certain health care policies, contracts, agreements, and plans to provide benefits for equipment, supplies, and medication for the diagnosis, treatment, and management of diabetes and for diabetes self-management education.

Current Status:


Comments: None HB96 COOLING AGENT/ANTIFREEZE

(SKINDELL, M) To require the inclusion of a bittering agent in engine coolant and antifreeze.

Current Status:


Comments: None HB117 COMMERCIAL ACTIVITY TAX

(JONES, S) To require 30% of commercial activity tax revenue to be used indefinitely for local government purposes.

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Current

Status: 4/14/2009 - Referred to Committee House Ways and Means

Comments: None HB134 CANCER SCREENING EXAMS

(DEBOSE, M) To require certain health care insurers and plans, including the state's Medicaid program, to provide benefits for prostate, colorectal, cervical, and ovarian cancer screening examinations.

Current Status:

6/3/2009 - House HealthCare Access and Affordability, (First Hearing)

Comments: None HB136 OVARIAN CANCER SCREENING

(DEBOSE, M) To require certain health care insurers and plans, including the state's Medicaid program, to offer to provide benefits for ovarian cancer screening examinations.

Current Status:


Comments: None HB159 UNIVERSAL HEALTH CARE

(SKINDELL, M) To establish and operate the Ohio Health Care Plan to provide universal health care coverage to all Ohio residents.

Current Status:


Comments: None HB170 EMPLOYER RETALIATION (MURRAY,

D) Prohibit an employer from retaliating against the employer's employee for testifying in an unemployment compensation proceeding.

Current

Status: 1/12/2010 - House Commerce and Labor, (Fourth Hearing)

Comments: None

HB184 WORK ELIGIBILITY STATUS (COMBS, C) To require employers to register and participate in a status verification system to verify the work eligibility status of all new employees and to affirm their participation on their state income tax returns, to specify that an employer's failure to affirm their participation in the status verification system on their state income tax returnsconstitutes falsification or dereliction of duty, to require public agencies to cancel contracts with private employers who do not participate in a status verification system, to require jail officials to make a reasonable effort to verify the citizenship of confined persons, to collect electronic fingerprints of illegal aliens, and to notify the United States Department of Homeland Security in certain circumstances, to prohibit political subdivisions from restricting communication and cooperation with federal officials regarding a person's citizenship status, to require judges and magistrates to consider immigration status and other factors in determining a defendant's bail, and to declare an emergency.

Current

Status: 6/24/2009 - House Judiciary, (Second Hearing)

Comments: None HB229 COMPREHENSIVE CLEANING

SYSTEM FOR SCHOOLS (STEWART, D) To require the Department of Health to establish a pilot program to test the effectiveness of the "OS1" comprehensive cleaning system in public schools.

Current

Status: 10/14/2009 - House Health, (Third Hearing)

Comments: None HB230 COMMON SENSE REGULATION ACT

(MORAN, M) To enact the Common Sense Regulation Act to improve state agency regulatory processes, especially as they relate to small businesses, to require state departments to develop customer service training programs, and

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to require the director of environmental protection to provide environmental regulatory compliance assistance to small businesses.

Current Status:

11/17/2009 - Referred to Committee Senate State and Local Government and Veterans Affairs

Comments: None HB311 SMALL BUSINESS (MCGREGOR, R) To

require a rule-making agency to prepare cost-benefit and regulatory flexibility reports for rules that may have any adverse impact on small businesses and submit them to the new Ohio Small Business Ombudsperson in the Office of Small Business, to create the Small Business Regulatory Review Board to review objections to those rules and make recommendations to the Joint Committee on Agency Rule Review regarding the rules, and to require impact to the Governor and General Assembly.

Current

Status: 11/10/2009 - House State Government, (First Hearing)

Comments: None HB337 COMPANIES RELOCATING FROM

OHIO (BAKER, N) To require the Department of Development annually to compile a report of companies that relocated out of this state and to attempt to determine the motivation behind the relocations.

Current

Status: 12/9/2009 - House Economic Development, (Fourth Hearing)

Comments: None HB343 STATE GOVERNMENT OPERATING

EFFICIENCIES (SCHNEIDER, M) To conduct a study of potential operating efficiencies in state government.

Current


Comments: None

HB364 MOTOR VEHICLE DEALERS LAW

(LUNDY, M) Relative to the termination of franchises and prohibited acts under the Motor Vehicle Dealers Law.

Current

Status: 1/26/2010 - House Civil and Commercial Law, (Second Hearing)

Comments: None HB381 WORKFORCE DEVELOPMENT

INTERMEDIARY COMMITTEE (WILLIAMS, B) To create the Workforce Development Intermediary Committee.

Current

Status: 11/30/2009 - Referred to Committee House Commerce and Labor

Comments: None HB423 INDUSTRY SECTOR STRATEGY

TRAINING PROGRAM (WILLIAMS, S) To create the Industry Sector Strategy Training Program, to require the awarding of academic credit to individuals who complete the program, and to require the Department of Job and Family Services to streamline core services provided under the Federal Workforce Investment Act.

Current Status: 1/27/2010 - Introduced

Comments: None HB427 CLASS ACTION MONETARY

AWARDS (SCHNEIDER, M) To declare how monetary awards in class actions that are not paid over to members of the class are to be used.


Comments: None HCR24 JOINT SELECT COMMITTEE -

AUTOMOBILE INDUSTRY (LUNDY, M) To create the Joint Select Committee on the Impact of the Changing Automobile Industry in Ohio to study the automobile industry as it relates to manufacturers, suppliers, dealers, and consumers.

Current 6/25/2009 - ADOPTED

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Status: BY SENATE, Vote 31-0 Comments: None HCR27 COMMERCIAL DOCKET PILOT

(SNITCHLER, T) To express the General Assembly's support for the commercial docket pilot project established by the Supreme Court.

Current

Status: 11/18/2009 - House Judiciary, (First Hearing)

Comments: None HJR13 INITIATIVE/REFERENDUM

APPROVAL (DOMENICK, J) To require sixty-seven per cent of the electors voting in an initiative or referendum to vote in favor of the issue in order for the issue to be approved.

Current

Status: 2/2/2010 - House Elections and Ethics, (First Hearing)

Comments: None SB1 BUILDING OHIO JOBS PART II

(HUGHES, J) To implement the additional debt authority for conservation and revitalization programs provided by Section 2q of Article VIII of the Ohio Constitution, to authorize the issuance of that debt, to make new appropriations for the purpose of continuing programs established by Am. Sub. H.B. 554 of the 127th General Assembly, the Bipartisan Job Stimulus Act, and to declare an emergency.

Current

Status: 3/5/2009 - Referred to Committee House Finance and Appropriations

Comments: None SB2 FEDERAL INFRASTRUCTURE

FUNDING (CAREY, JR., J) To provide for the distribution of moneys received by the state from the federal American Recovery and Reinvestment Act of 2009 by making appropriations and to declare an emergency.

Current


Comments: None

SB3 SMALL BUSINESS EMPOWERMENT

ACT (FABER, K) To require a rule-making agency to prepare a cost-benefit report for, and regulatory flexibility analysis of, rules that may have any adverse impact on small businesses, to create the Small Business Regulatory Review Board.

Current


Comments: None SB4 PERFORMANCE AUDITS FOR

REGULATORY AGENCIES (SCHAFFER, T) To require the Auditor of State to conduct performance audits of the Bureau of Workers' Compensation, Environmental Protection Agency, Department of Natural Resources, Department of Agriculture, and Department of Health.

Current

Status: 1/27/2010 - PASSED BY SENATE, Vote 31-0

Comments: None SB9 FILM TAX CREDIT (PATTON, T) To

authorize income tax credits for investments in motion pictures produced in Ohio.

Current

Status: 3/11/2009 - House Ways and Means, (First Hearing)

Comments: None SB15 HEALTH CARE POLICIES (MILLER,

D) To prohibit discrimination in health care policies, contracts, and agreements in the coverage provided for the diagnosis and treatment of mental illnesses and substance abuse or addiction conditions.

Current

Status: 3/31/2009 - Senate Health, Human Services and Aging, (First Hearing)

Comments: None SB31 EMPLOYEE

ORGANIZATION/BARGAINING UNIT (PATTON, T) To create a testimonial privilege for communication

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between a representative of an employee organization and a bargaining unit member.

Current Status:

6/10/2009 - SUBSTITUTE BILL ACCEPTED, Senate Judiciary - Civil Justice, (Second Hearing)

Comments: None SB34 HEALTH INSURANCE PROGRAMS

(MILLER, D) To create a health insurance program that allows municipal corporations, small employers, and nonprofit corporations or associations to purchase for their employees the same policies provided to state employees.

Current

Status: 3/31/2009 - Senate Insurance, Commerce and Labor, (First Hearing)

Comments: None SB36 JUDGMENT OFFERS- CIVIL

PROCEDURE (KEARNEY, E) To amend the Ohio Rules of Civil Procedure regarding offers of judgment.

Current Status:

6/24/2009 - REPORTED OUT AS AMENDED, Senate Judiciary - Civil Justice, (Fourth Hearing)

Comments: None SB52 EXECUTIVE BRANCH-STATE

GOVERNMENT (GRENDELL, T) To reorganize the executive branch of state government.

Current Status:

10/27/2009 - Senate State and Local Government and Veterans Affairs, (Sixth Hearing)

Comments: None SB64 COLORECTAL EXAMINATIONS

(COUGHLIN, K) To require certain health care policies, contracts, agreements, and plans, as well as the state's Medicaid program, to provide benefits for colorectal examinations and laboratory tests for cancer.

Current

Status: 3/10/2009 - Referred to Committee Senate

Insurance, Commerce and Labor

Comments: None SB76 LEAD HAZARD REMOVAL (KEARNEY,

E) To establish a grant program to pay lead hazard removal costs incurred by qualified homeowners and to make an appropriation.

Current Status:

9/22/2009 - Senate Finance and Financial Institutions, (First Hearing)

Comments: None SB117 MULTIPLE CHEMICAL SENSITIVITY

(MILLER, D) To designate the month of May as "Multiple Chemical Sensitivity Awareness Month."

Current Status:

10/20/2009 - SUBSTITUTE BILL ACCEPTED & REPORTED OUT, Senate Health, Human Services and Aging, (Fourth Hearing)

Comments: None SB121 TRANSPORTATION INNOVATION

AUTHORITIES (NIEHAUS, T) To authorize the creation of transportation innovation authorities by specified governmental entities and to establish the powers and duties of such authorities.

Current Status:

6/10/2009 - Senate Highways and Transportation, (First Hearing)

Comments: None SB131 BIOBASED SUPPLIES (GILLMOR,

K) To require the Director of Administrative Services establish a program that ensures that supplies composed of biobased products are purchased by DAS, state agencies, and state-supported institutions of higher education.

Current

Status: 2/3/2010 - House Agriculture and Natural

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Resources, (Third Hearing)

Comments: None SB138 INSURANCE COVERAGE FOR

CHEMOTHERAPY (MILLER, R) To require certain insurers that provide coverage for cancer chemotherapy treatment to provide coverage for certain prescribed, orally administered anticancer medication on a basis no less favorable than intravenously administered or injected cancer medications that are covered under the policy.

Current Status:


Comments: None SB157 CLASS ACTION AWARDS

(GRENDELL, T) To declare how monetary awards in class actions that are paid over to members of the class are to be used.

Current

Status: 11/10/2009 - Senate Insurance, Commerce and Labor, (Second Hearing)

Comments: None SB204 MOTOR VEHICLE DEALERS LAW

(WAGONER, M) Relative to the termination of franchises and prohibited acts under the Motor Vehicle Dealers Law.

Current


Comments: None SB212 CLAIMS - UNPAID WAGES

(MORANO, S) To allow the Director of Commerce to investigate and enforce specified claims involving unpaid wages.

Current Status:


Comments: None

SCR2 PRIVATE BALLOT UNION ELECTIONS (GIBBS, B) To request the Ohio Congressional delegation to oppose legislation that disenfranchises Ohio workers by removing their right to a private ballot union election.

Current


Comments: None SCR19 SENIORS HEALTH CARE (GRENDELL,

T) To urge the President and the Congress of the United States to protect the rights of seniors when considering proposals for health care reform.

Current Status:

9/29/2009 - Referred to Committee Senate Health, Human Services and Aging

Comments: None SCR22 WAGE THEFT PREVENTION

(MORANO, S) To urge the Congress of the United States to enact House Resolution 3303, the Wage Theft Prevention Act.

Current Status:


Comments: None SCR23 DELPHI RETIREES (CAFARO, C) To

urge the President, the Secretary of the Treasury, the head of the Auto Task Force, and the members of Congress to treat all General Motors Delphi retirees fairly and provide for full earned pensions and other post-employment benefits in the same manner for all groups regardless of their representation.

Current


Comments: None SJR5 REDISTRICTING PROCESS

(HUSTED, J) To revise the redistricting process for General Assembly and

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Congressional districts.

Current

Status: 1/13/2010 - House Elections and Ethics, (First Hearing)

Comments: None SR21 ECONOMIC RECOVERY FUNDS

(MORANO, S) To encourage the use of federal economic recovery funds to promote goods and services made or

performed by American citizens and companies.

Current


Comments: None

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Leadership – Additional Materials

Ohio Third Frontier

Ohio's largest-ever commitment to high-tech job creation and economic progress.

The Ohio Third Frontier is Ohio's largest-ever commitment to high-tech job creation and economic progress. Established in 2002, the 10-year, $1.6 billion initiative fosters the creation of high-paying jobs through innovation, research and development and the commercialization of next-generation products designed to improve the lives of Ohioans and people around the world.

The Ohio Third Frontier promotes economic growth by expanding the availability of investment capital needed to form new companies, supporting product innovation in established companies, facilitating commercialization of new products, funding collaborative projects between private companies and Ohio colleges and universities and nurturing Ohio's increasingly experienced pool of entrepreneurial management.

A recent independent study showed that the Ohio Third Frontier has:

• Generated $6.6 billion in economic activity in Ohio; • Created 41,300 total jobs through December 2008; • Significantly impacted the diversity and competitiveness of Ohio’s manufacturers; • Assisted in the formation, attraction, or initial capitalization of more than 570 companies; and • Leveraged a $10 return for every dollar invested during 2003 - 2008, with the expectation of

increased impacts in the years to come. • Contributed (with related initiatives) to the major growth of venture capital investment in Ohio,

from $243 million in 2004 to $446 million in 2008.

The Ohio Third Frontier offers 20 innovative programs for emerging and established high-tech companies, including grants for pre-seed funding, research initiatives, product development and commercialization. Ohio Third Frontier targets its investments to support technology areas that represent Ohio's key competitive opportunities:

• Advanced and Alternative Energy • Biomedical • Advanced Materials • Instruments - Controls - Electronics • Advanced Propulsion

The Ohio Third Frontier 2009 annual report (pdf 1.9 MB) outlines the performance metrics as measured by the Technology and Innovation Division at the Ohio Department of Development. The division is charged with administering the Ohio Third Frontier, the state's largest ever initiative to grow Ohio's innovative assets. On program expenditures from Ohio Third Frontier of slightly more than $400 million, the program has leveraged more than $3.5 billion in funding from outside sources, sustaining an investment leverage ratio of nearly nine additional dollars for every one Ohio Third Frontier dollar to date.

Ohio Third Frontier Success Stories

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Kent Displays Inc. is a successful spin-out from the Liquid Crystal Institute at Kent State University. In September 2008, Kent Displays, through funding from the Ohio Third Frontier, installed a roll-to-roll production line to enable the manufacturing of its Reflex™ flexible displays technology. The first of its kind in the world, the production line enables Kent Displays to produce vast quantities of its flexible LCDs rapidly and efficiently. Kent Displays is a leader in cholesteric liquid crystal displays and its technology has been successfully licensed to corporations worldwide. Read more Third Frontier success stories here.

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BMW Group Chrysler Group LLC Ford Motor Company General Motors Company Jaguar Land Rover

Mazda North American Operations Mercedes-Benz Mitsubishi Motors Porsche Toyota Volkswagen Group of America

1401 Eye Street, NW—Suite 900, Washington, DC 20005-6562 Phone 202.326.5500 Fax 202.326.5567 www.autoalliance.org

OH HB 364 – FRANCHISE LEGISLATION

CREATES INEQUALITY IN THE AUTOMOBILE

MANUFACTURER/DEALER RELATIONSHIP

OH HB 364, franchise legislation introduced by Representative Matt Lundy, includes a number of

onerous provisions that negatively impact the automobile industry. Current statute adequately and

effectively protects the contractual relationship between automobile manufacturers and dealers in the

State of Ohio. HB 364 greatly over-reaches to create an unequal advantage for automobile dealers in

this relationship.

Below is a list of 12 major areas of concern for the Alliance and its member companies regarding HB

364:

1. Prohibition on manufacturer recovery of costs involved with reimbursing dealers for their excessive

warranty rates. (Sec. 4517.52 (C)).

Parts used for warranty repairs are provided to dealers at a wholesale price. Manufacturers reimburse dealers for those parts when they are used in warranty repairs at the wholesale price plus a company determined markup. Dealers seek to establish rates beyond this manufacturer provided markup. This results in higher costs for consumers and manufacturers.

2. Requires payment of fair market value for the blue sky value of the franchise if a dealership is

terminated due to a “product line” discontinuation.

“Discontinuation of a product line” is defined as presumably including even the cessation a single model of vehicle.

In other words, a manufacturer will not have the ability to make a business decision to eliminate a single vehicle from a product line up without exposing itself to fair market value payments for the value of the dealer’s franchise. (Sec.4517.541 (I)(1)).

3. Imposes a complete ban on a manufacturer’s ability to deny a dualling request from a dealer (Sec.

4517.59 (A)(17)).

The proposed language seems to allow a dealer to establish a second location for the same line make without manufacturer approval.

Dualling is typically the presence of two or more line-makes from competing manufacturers in the same facility.

It is customary that a manufacturer should receive notice and an opportunity to analyze the proposal for the addition of a competing line-make to one of its dealership facilities.

There are significant concerns about protecting a manufacturer’s trademark, the impact on consumer-awareness, and sales and service staff knowledge base and/or bias.

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4. Doubles the timeframe for termination notices from a manufacturer to a dealer from 90 days to 180 days.

90 days is the norm in the industry and is the requirement in nearly every other state.

Plus, grossly expands the termination notice timeframe for dealer terminations due to dealer insolvency or the cessation of normal business operations from 15 days to 90 days. This is unprecedented. - These offenses are so egregious that immediate termination is appropriate and

recognized in most states. - To allow a poor performing dealer to continue to operate for an additional 75 days hurts

not only the manufacturer’s reputation but also other same line-make dealers. - Interestingly, this provision does not include language that appears in most states

allowing for 15 day termination notice in situations involving a dealer who has been convicted of a felony, a dealer who has had his license revoked or who has committed fraud. (Sec. 4517.54 (B)).

5. Termination assistance payments will be required for both involuntary (terminations by the manufacturer) and voluntary (terminations by the dealer) terminations. (Sec. 4517.541 (C)).

This requirement greatly expands typical manufacturer reimbursement obligations and provides no exception for those situations where a dealer is voluntarily terminating due to his/her sale or transfer of a dealership to another person.

These transactions contemplate the continuation of the dealership and consequently the transferred dealership will require all of the items listed under this provision.

It allows for a potential double-dip by the terminating dealer – payment for the items from both the manufacturer and the purchasing dealer.

6. Requires manufacturer to pay a dealer 2 years of rent regardless of whether or not a dealer owns or

leases a dealership facility. (Sec. 4517.541 (E))

This requirement applies to all terminations – involuntary AND voluntary.

And is to be paid in full within 30 days of the effective date of the termination.

The manufacturer has no right to occupy the space for which it is paying rent

7. The following factors are deemed “not good cause” for a manufacturer termination of a dealership: (Sec. 4515.55 (B)).

The sale of a manufacturer or change in ownership

“Product line” discontinuation – if a manufacturer makes the difficult decision to cease production of an entire line-make, most logically for financial reasons, it makes no sense to perpetuate a network of dealers to sell that extinguished line on the contrary, it makes perfect sense that those dealers should be terminated, with understandable good cause, because they will no longer have a product to sell. - This is perhaps the height of a good cause termination – there is no longer any product to

sell.

Dealer violation of a manufacturer export policy – dealers are well aware of manufacturer export policies; these policies are put in place to protect dealership networks outside this country and to protect US dealers from inappropriate foreign imports. - The knowledge standard in this provision should read “knew or reasonably should have

known” – as all states that have considered this issue have acknowledged.

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- Manufacturers continually work with dealers to educate them on how to avoid the trappings of export violations – and these violations are extremely costly to manufacturers.

- Terminations as a result of export violations would likely rise to the level of severe disregard of manufacturer policies by a dealer.

8. Temporary manufacturer ownership of dealership is limited to the time required to “wind up” dealership business post-termination. (Sec. 4517.59 (A)(5)).

It is common that temporary manufacturer ownership of a dealership include those instances where a dealer cannot identify a qualified buyer for a location and the manufacturer steps in for a period of time, all the while searching for a qualified candidate to take over the dealership.

This scenario is usually allowed for a period of 1-2 years, with a good cause showing.

Additionally, it often helps support the enhancement of minority dealer programs which allow a manufacturer and a minority dealer to jointly own a dealership for a period of time allowing the minority dealer to slowly increase their percentage of ownership over time.

9. A manufacturer may not require dealership renovations or alterations in order for a dealer to receive

all models - even if necessary to accommodate a certain vehicle. (Sec. 4517.59 (A)(8)(a)).

Often times, renovations or alterations are dictated by the technology or engineering of a vehicle. For example, if a dealer hopes to effectively display and service one of the new electric vehicles coming to market, it seems appropriate that the dealers can be required to make the necessary additions or alterations to his facility in order to most effectively display and service the vehicle to benefit the consuming public.

10. The dealers seek an unreasonably short 6 month timeframe for manufacturer audits of warranty and

sales incentives claims. (Sec. 4517.59 (A)(21)).

Twelve months is the norm in the majority of states.

It often takes several months to receive the necessary information from the dealer in order to accurately and efficiently conduct an audit.

Many manufacturer programs run for an entire year making the initiation of an audit within 6 months virtually impossible.

11. Seeks to require the disclosure of allocation procedures to other competing same line-make dealers

for the previous 5 yrs. (Sec. 4517.59 (A)(15)).

This is a completely irresponsible requirement and has significant anti-trust pitfalls that the state should be concerned about.

More appropriately manufacturers may discuss the “methods” used in their allocation procedures.

12. Precludes manufacturer reimbursement to non-franchised individuals or entities for warranty work

done to a vehicle. (Sec. 4517.59 (A)(13)).

This language can severely impact fleet vehicles, ie: rental car companies that carry a manufacturer vehicles and individuals if such repairs are needed in emergency situations.

This language would preclude a manufacturer from reimbursing a customer who had an emergency situation which required that the customer take the vehicle to the closest dealership, possible a non-franchised dealership, to get repaired quickly.

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1

Ohio Auto Industry Support Council Technology Working Group Report

Columbus, OH, December 21st, 2009 and

January 28th, 2010

•  Working group consisGng of Eric Burkland (OMA), Giorgio Rizzoni (OSU), Glenn Daehn (OSU), Noah Sudow (OBOR) and John Magill (ODOD) organized a Industry/State/Academia workshop on Dec 21 on the OSU campus to assess needs of manufacturing community and best pracGces to meet these needs.

•  In a series of meeGngs, the group structured the workshop in 4 key working groups related to: –  IdenGfying assets in an Ohio-‐region manufacturing innovaGon network

–  OperaGon of a manufacturing innovaGon network

–  Benchmarking other internaGonal best pracGces

–  Capturing other worthwhile innovaGons •  InvitaGons were sent to thought leaders in industry, academia and

governmental agencies. Over 80 aXended the 5-‐hour meeGng.

Dec 21st Workshop

2

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Principles •  Local manufacturing is a central issue in naGonal security and prosperity.

•  Marketplace is global. We must stay locally compeGGve.

•  Local innova3on is key for leadership. This takes investment.

•  Manufacturing is highly interconnected. •  The current lean environment presents innova3on challenges to industry of all sizes.

•  Shared investments in R&D assets can help make Ohio more compeGGve.

•  It is prudent to leverage the assets we have because it is too expensive and Gme consuming to build new faciliGes. 3

Workshop Key Findings •  State is rich in manufacturing resources. •  Companies are oaen too lean to invest in innovaGon, new processes and R&D.

•  Companies have many challenges in idenGfying resources matched to their needs.

•  University System of Ohio has deep resources in experGse and equipment, but access to these resources is oaen difficult to navigate.

•  Workshop summary: hXp://www.omi.osu.edu/autocouncil 4

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Primary Themes

5

Networks and Open

InnovaGon

Minimize Barriers &

Cost

Engage all Regional Technical Resources

Broad agreement on these three core concepts, but how do we implement?

PotenGal Crosscudng IniGaGves 1.  Distributed Manufacturing Innova3on Network companies may

enter through one of several one-‐stop points of entry.

2.  Dedicated acGvity to catalog USO strengths related to manufacturing, and facilitate working with Universi3es.

3.  IdenGfy/train Manufacturing Advocates – manufacturing professionals who are generalists and who can: –  assess company needs (free assessment is a best-‐pracGce from other states)

–  act as a full-‐service agent to link companies with resources

–  manage projects in University environments

4.  Establish IPA agreements (aaer Federal Intergovernmental Personnel Act) to allow personnel from service providers to spend extended periods of Gme at deep technical assets.

5.   Streamline project ini3a3on through rapid support and approval for cost shared innovaGon projects when industry cash is provided. 6

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1. Manufacturing InnovaGon Network •  Databases and Web 2.0 and social networking tools can help connect resources with problems, and Open Innova4on is becoming a well-‐accepted idea. –  Distributed Web 2.0 tools that encompass database func3ons and guided linkages to resources.

•  Technology Transfer Through People (modeled aaer GM) –  Interagency Personnel Agreements to allow organizaGons to get to deeply know one another through training of key personnel and Manufacturing Advocates, who can be a dedicated one-‐stop guide for companies into the network.

–  The goal is to apply the most relevant resources to each problem.

7

8

Polymer Ohio

EWI

MAGNET

TechSolve

EMTEC

Ohio U.

Univ. Toledo

ONU

YSU

UC

WPAFB

NASA

U. Akron

Example of Resource List

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5

9

OBOR is a key resource

2. Fully Engage University System of Ohio

•  USO has deep resources in experGse, equipment, research staff and students.

•  USO can serve as the engine for long-‐term innova3on, along with Edison Centers, MEP’s and other resources.

•  Today, barriers to the engagement of USO include managing projects to industry expectaGons, and quick and transparent contracGng. These issues can be addressed through: –  Manufacturing Advocates/Project Managers

–  Much deeper linkages between Edison Centers and MEP’s and USO research centers and labs (Technology Transfer Through People)

–  Simplified contracGng (see Governor Strickland comments) •  Rapid Engineering Service Agreements •  Simplified IP agreements

10

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Text from State of the State speech “My administra4on and A:orney General Rich Cordray are overseeing talks toward reaching a standing agreement between the en4re University System of Ohio and consumer product powerhouse P&G. With the contract in place, we will speed up and strengthen research collabora3ons between our university faculty and the company. P&G will get the benefit of our innova4ve thinkers. Our universi4es will get the benefit of unprecedented opportuni4es to collaborate with P&G on new products. And Ohioans will get the benefit of new economic development. And we can use this agreement as a model for other companies and industries that want to work with Ohio's innova4ve ins4tu4ons. Indeed, today I am calling on the Ohio Auto Industry Support Council to build on this historic agreement and create a network that will link Ohio's manufacturers to great research going on in Ohio.” 11

3. -‐ 4. Manufacturing Advocates, IPA 3.  IdenGfy/train Manufacturing Advocates – manufacturing

professionals who are generalists, and who can: –  assess company needs (free assessment is a best-‐pracGce from other

states)

–  act as a full-‐service agent to link companies with resources

–  manage projects in University or Industry environments

Candidates for this role will be drawn from exisGng organizaGons, e.g.: Edison Program, MEP, university research centers. Strong linkage with an Advocate should give companies expert guidance and voice, if needed.

4.  Establish IPA agreements (modeled aaer Federal Intergovernmental Personnel Act) to allow personnel from service providers to spend extended periods of Gme at deep technical assets.

12

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5. Streamline Project IniGaGon •  Short-‐term, modest size, rapid cost-‐share funding mechanism for

technical development projects when industry cash is provided. Modeled aaer Canadian benchmark.

•  Cost and Gme expended to engage a new resource and Gme to results are the key barriers to using a technical innovaGon network. SoluGons include: –  Funding – Mechanisms for quickly funding modest industrially-‐led programs

should be made available. Willingness of companies to invest matching cash in real technical development should be main hurdle.

–  Contracts – Streamline IP and contractual barriers to working with industry. Examples already in place at a few insGtuGons.

–  Transparency/accountability – Refine the process to evaluate the ease access, final quality and impact of work. Encourage customer-‐centered vs. bureaucracy-‐centered process. Advocates will play an important role.

–  Advocacy – Strong linkage with an Advocate should give companies expert guidance and voice, when needed. 13

Next steps •  Create a working group to idenGfy ways and means of implemenGng these recommendaGons.

•  Working group composed of: 1.  Industry leaders 2.  Edison, MEP Programs, ODOD Technology Division

3.  OBOR, USO 4.  OMA

With consulGng advice from AXorney General’s office

•  Present a detailed plan in 3-‐4 months.

14

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1

A Proposal to Increase Access to Credit for America’s Small and Medium Size

Businesses

I. EXECUTIVE SUMMARY

This White Paper proposes the establishment of a partnership program to provide

financing for small and medium size business working capital and capital investment

needs. Federal funds would be allocated to work in collaboration with funds from the

nation’s private lenders to increase access to capital by overcoming the continuing

challenges posed by the national economy and the increased regulatory requirements

placed on banks.

This is a program that will be worthwhile for six primary reasons:

1. Federal investment would be provided in partnership with private investment from the

nation’s banks and would leverage the market expertise, prudent risk management

practices, and financial capacity of private lenders while at the same time addressing

their current issues: lack of cash flow or lack of collateral for small and medium size

businesses.

2. The program will help those businesses who really need help: Small and medium size

businesses, particularly manufacturing businesses, including those in the auto supply

chain and other heavily impacted industry sectors, are having significant challenges

getting bank financing because of the condition of the industry, NOT because of the

business’ lack of management or capability.

3. States will have a strategic role in this program in two ways: First, to market the

program to lenders; and second, to serve as a state level intermediary for allocation of

funds.

4. The program will utilize existing networks of banks and economic development

lenders which will assure that federal funds will flow through to businesses quickly and

efficiently, while also providing the necessary underwriting, servicing, and accountability

infrastructure.

5. The program will work effectively with existing federal programs of the Small Business

Administration (7a, 504), the Treasury Department (CDFI) and Commerce (EDA). The

mechanisms of investment have all been utilized effectively in many other

public/private financing programs, such as the federal programs noted above, as well as

many state linked deposits and co-lending programs.

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2

6. This type of program has been successfully piloted by the Michigan Economic

Development Corporation through the Michigan Supplier Diversification Fund, which

has been well received by the lending and manufacturing communities in Michigan. In

less than six months since inception, 100 percent of the limited ($13.3 million) fund has

been committed and the pipeline of deal flow far exceeds the initial fund capitalization.

II. INTRODUCTION

Today, businesses in the United States are facing a perfect storm of decreased revenue,

decreased collateral value, and a frozen credit market. While some firms are cautiously

optimistic about the overall economic recovery, the persistent lag in credit markets continues to

pose a serious threat to manufacturers and to our country’s industrial capacity.

This scarcity of credit is particularly impactful on the manufacturing sector which is very capital

intensive and often requires the financing of inventories and receivables over long periods of

time. Additionally, today’s depressed asset values have been especially detrimental to

manufacturers that have historically used property, plant, and equipment and receivables as

collateral to finance operations.

This juncture is critical for three reasons: (1) manufacturers need capital to reorganize and

consolidate efficiently and in an orderly fashion to improve their financial health; (2) those

manufacturers who have ‘right-sized’ and are now seeking to fill new orders are finding that

with their reduced collateral value/borrowing bases, it is difficult to access capital to scale back

up; and (3) those manufacturers seeking to utilize their core competencies in advanced

manufacturing in non-traditional verticals (wind, solar, medical device, homeland defense) are

increasingly unable to finance this transition.

Even manufacturers whose revenues, margins, profits, suppliers, and customers are unaffected

by the downturn in the economy, especially industries such as auto, have found it impossible to

maintain their current borrowing base, let alone receive the financing needed to grow. These

firms are being penalized by the devaluation of their property, plant, and equipment, and—due

to a combination of market and regulatory factors— lenders moving to decrease their exposure

to manufacturing and certain geographical regions. This is especially true in areas hard hit by

the recession such as the upper Midwest and the South’s manufacturing belt.

We applaud many of the efforts of Congress and the Obama Administration to address these

issues. Increasing access to, cost of, and timing for capital to manufacturers will be an essential

part of our nation’s economic recovery. Increasing SBA guarantee levels, reducing fees, and

reducing administrative hurdles should continue to be Administration goals and we urge support

for them.

We feel that these measures already taken need to be enhanced to recognize the deep

interdependence between the health of banks and the health of borrowers. Making TARP funds

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3

available to community banks and many of the SBA adjustments described above focus on the

health of banks.

At the same time, we must also address the problem of helping our manufacturing sector to be

healthier as well.

To address this challenge, we do not need to change the fundamental business of banks:

making loans to borrowers with reliable cash flows and sufficient collateral values on a margin.

Our proposal does not suggest that underwriting standards be lowered at all.

Rather, our proposal seeks to support mechanisms targeted specifically at borrowers’

shortcomings: cash flow and collateral, while relying on the expertise of banks to adequately

assess the borrowers’ financial qualifications from a commercial loan underwriter’s perspective.

II. How a national program would support business growth:

This initiative would focus investment in four key areas:

• Working capital lending to support the operating needs of existing businesses to

meet existing contracts and obligations;

• Capital investment in equipment and tooling to meet the needs of existing

contracts;

• Capital investment in equipment, tooling and working capital to enable

diversification into new markets, technologies and products; and

• Capital investment to facilitate consolidation of operations to preserve jobs and

achieve efficiencies in operations.

III. The Partnership is designed to support bank lending to small and medium size

businesses

Each of the partners to this initiative plays a critical role:

• The federal government would provide resources that would be utilized to

supplement funds made available by private sector lenders, and state/community

based economic development organizations;

• State level intermediary (the state economic development organization) would be

responsible for establishing the network of partner/lenders, marketing the program

statewide and assuring the speedy allocation of funds for approved projects;

• Private sector lenders, including banks and credit unions, would make the primary

lending decisions, supported by the program funds;

• A strong network of community based economic development lenders would also

be partners, utilizing many of the exiting economic development loan, loan

guarantee and grant programs. Because these lenders have long-standing

partnerships with such key federal programs as Community Development Financial

Institutions (Treasury), Small Business Administration, Department of Housing and

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4

Urban Development and Economic Development Administration, they have strong

track records of being able to quickly put project funding together.

IV. Principles of the Program would be explicitly designed to respond quickly to the

credit needs of businesses. Critical to this concept would be:

1) Primary lending decisions would be made by the private sector lenders.

a. Banks would be responsible for loan underwriting, servicing, collection and

liquidation responsibility under its typical policies and procedures.

b. Funds would be provided to participating lenders to serve as loan guarantees,

cash flow support or additional collateral. Loans would be made by banks,

backed by cash deposits in the bank to make up for a lack of collateral or cash

flow.

2) The state level intermediary would be responsible for marketing the program and

developing the network of participating lenders and community based economic

development organizations.

a. The state level intermediary would also be responsible, through a letter of credit

mechanism with the appropriate federal agency, for developing a simple and

disbursal, monitoring and accountability system. This would assure that funds

are disbursed quickly to participating lenders and that clear and transparent

accountability mechanisms are in place.

b. Except to the extent that the state level intermediary is also an economic

development lender, the intermediary would not be making any credit

decisions.

3) In some circumstances, funds could also be provided by the state level intermediary to

community based economic development organizations for mezzanine financing, co-

lending or co-investment, or purchase of participation with bank financing.

4) Whether through participation in bank financing (1 above) or through economic

development organizations (3 above) the loans would require repayment of --- and

interest on --- it’s loan or investment. The form of this repayment would be based upon

the form of investment, and could include regular loan amortization, customized

repayment plans, “success fees” or royalties. In other words, this is NOT a grant

program.

5) Any return of – and on --- the federal funds would be required to be reinvested in other

business loans.

A limited amount of such funding would be allowed for administrative costs of the

program.

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Believing in Ohio – Governor Ted Strickland’s 2010 State of the State Highlights

In his 2010 State of the State Address, Governor Strickland outlined pragmatic solutions to address Ohio’s immediate economic challenges without breaking the bank – and how Ohio is laying a foundation for steady economic progress and a thriving middle class. He believes there isn’t a single thing wrong with Ohio that can’t be fixed by what’s right with Ohio. Governor Strickland is:

Accelerating Ohio’s Advanced Energy Economy to Create Jobs

Ohio has emerged as a leader in the advanced energy sector because of Governor Strickland’s strategic, targeted investments and aggressive energy plan, SB 221, to develop the energy industry in Ohio. Ohio’s advanced energy companies are investing in Ohio, growing and creating jobs. Ohio is ranked #1 in new green jobs created last year and #1 in renewable and advanced energy manufacturing projects. The Governor’s 2010 agenda builds on this foundation by: Establishing the Energy Gateway Fund, a $40 million commitment of state and federal stimulus funds to grow and sustain fuel cell, solar, wind, and energy storage industries. The fund will offer capital to advanced energy companies with products ready for the commercial market. And we will at least double the impact of the investments by requiring a minimum dollar‐for‐dollar match from private funds – supporting long‐term industry growth in Ohio. Enhancing Ohio’s competitiveness to attract wind and solar facilities by eliminating Ohio’s tangible personal property tax on generation for wind and solar facilities that begin construction in 2010, produce energy by 2012, and create Ohio jobs. Branding Ohio “America’s Energy Gateway” and showcasing Ohio’s position in renewable energy to visitors at Ohio Turnpike service plazas in Williams and Mahoning counties and future ODOT projects.

Supporting Entrepreneurs and Businesses to Innovate, Compete and Create Jobs

Ohio business taxes are the lowest in the Midwest. And by seeing the 2005 tax reforms through, the Strickland Administration has provided Ohioans with the largest tax cut in modern state

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history. The Strickland Administration continues to make strategic, targeted investments in growing industries – bioscience, agriculture and bioproducts, aerospace, logistics, insurance and financial services – and to support our small and minority businesses. Ohio is the only state where exports have grown each year since 1998. And Governor Strickland has made education the cornerstone of Ohio’s plan for long‐term economic growth and success. The Governor’s 2010 agenda builds on this foundation by: Renewing the Successful Third Frontier Program, which has created 48,000 jobs for Ohioans and leveraged more than $6.6 billion in outside investments. Addressing the credit crunch by creating the Small Business Growth Partnership, a business‐lending clearinghouse to help small businesses find the working capital they need to grow their businesses and create jobs. Because lack of access to capital is the single greatest factor inhibiting economic recovery, the Strickland administration and State Treasurer Kevin Boyce are working with lenders to establish a working capital jobs fund, a public‐private partnership to establish a new, dedicated source for business working capital. Establishing Insource Ohio, an effort between the state and Ohio companies currently outsourcing or considering outsourcing to demonstrate how our workforce can meet their needs within a business model that remains competitive. Developing a groundbreaking agreement between Cincinnati‐based P&G and the University System of Ohio aimed at strengthening research collaborations between our university faculty and students and P&G. This initiative will turn innovative ideas into economic development and new jobs in Ohio. The governor also charged the Ohio Auto Industry Support Council with building a similar network between Ohio’s manufacturers and the cutting‐edge research going on in Ohio. Implementing the Regulatory Reform Fast TRAC at the Ohio Department of Transportation to accelerate funding and final approval for Ohio’s most promising job‐creating transportation projects. The state will dedicate $100 million in cost savings to these Fast TRAC projects, putting more Ohioans to work building roads, repairing bridges and making Ohio move. Expanding Cleveland’s Jumpstart Program to a pilot project to assist high‐potential minority owned firms in developing business plans for sustained growth and in accessing venture capital in 21 Northeast Ohio counties.

Expanding Education, Training and Job Opportunities for Ohio Workers

Ohio’s workforce is second‐to‐none and Governor Strickland intends to keep it that way. Since 2007, the state helped train more than 140,000 Ohioans and improved job‐training efforts to match workers with jobs that are hard to outsource in high‐growth industry sectors. Enrollment to community colleges has grown 23 percent over the last three years and 65,591 more Ohioans are enrolled in our public colleges and universities than in 2006. The Governor’s 2010 agenda builds on this foundation by:

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Establishing Build Your Own Business, a statewide expansion of the highly successful program at Lorain County Community College where they offer business training and support to budding small business people – and where 60 of the 62 businesses they have mentored are succeeding. Through a partnership with Ohio’s Small Business Development Centers, state community colleges and adult career centers, the state will offer unemployed Ohioans courses and training on starting a business, and the opportunity to work with business mentors and access small start‐up loans of up to $5,000. Creating a Manufacturing Certificate that manufacturing workers can obtain to show employers their full range of job skills and experience. This official credential can also be used to earn credit toward additional job training and education. And working with the legislature to prioritize casino license revenue toward workforce development programs that work. The governor is asking the legislature to consider: Implementing Ohio’s Co‐op Internship program to give college students an opportunity to get invaluable experience in their field and encourage our young people to stay and build their lives in Ohio. Continuing support for the Ohio Workforce Guarantee program that averts layoffs and spurs business expansion by providing training resources to companies. Creating the Urban Workforce Initiative to provide incentives for Ohio companies to immediately put unemployed workers from our urban centers back to work.

Revitalizing our Cities and Rural Economies to Create Jobs

Ohio is home to proud, world‐class cities and small rural and farming communities, each with their own economic identities. Acknowledging that the success of Ohio rests on the growth of our cities and rural communities, the governor’s State of the State lays out strategic investments to move both forward: Establishing Hubs of Innovation and Opportunity in Ohio’s Largest Cities. The state will provide planning money and development assistance to further build connections between industry strengths anchored in Ohio’s urban cores and their surrounding regions. Urging legislative action on three Compact with Ohio Cities Task Force recommendations:

• Authorize the Creation of Transportation Innovation Authorities (TIAs), a new and unique tool for regional cooperation between the public and private sectors on significant transportation investments, like intermodal facilities, roadway and bridge projects, public transit‐oriented development, light rail or intercity rail.

• Expand Cuyahoga County’s successful pilot Land Banks program by allowing local and state governments to take ownership of vacant land parcels in order to make them available for future productive use.

• Pass a comprehensive bill to reduce foreclosures and assist Ohio homeowners.

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Launching the Ohio Neighborhood Harvest to do a better job getting Ohio‐grown and raised foods onto the dinner tables of Ohio families. Ohioans spend about $43 billion every year on food, but only 3 percent of that spending goes to products from Ohio farms. This program will improve access to Ohio‐grown products, ensure that people in every neighborhood have access to affordable, healthy food, and help boost our rural economies. Aggressively Pursue the Construction of a Biorefinery, building on Ohio’s agricultural output, knowledge and ideal location for the development of a biorefinery, which converts farm output into food, fuel and biopolymers. Just about any product made today from petroleum‐based plastic – toothbrushes, cell phones, printer cartridges – can be made from biopolymers.

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THE POLICY POINT: Civil Justice SystemFor manufacturers to invest and grow in Ohio, and to compete globally, Ohio’s civil justice system must be rational, fair and

predictable. Manufacturers must be free to innovate and pursue market opportunities without fear of unreasonable exposure

to costly lawsuits, while truly injured parties must have full recourse to appropriate measures of justice.

In the last decade, Ohio made significant progress in this policy area with a number of important civil justice reforms and

reinforcing court decisions. These achievements are helping to reduce the litigation cost burden on employers and, in turn,

paving the way toward a more competitive business climate in Ohio and a more robust state economy.

However, work to improve Ohio’s civil justice system is far from finished. An aggressive trial bar continues to push an agenda

to expand liability and repeal existing tort reform law. The OMA is monitoring those efforts, at both the Ohio Statehouse and

the courthouse, and advocating for additional legislative or judicial action to strengthen fairness and predictability where

weaknesses exist.

Note to Readers: Tort law is extremely complex. This document necessarily uses many examples of highly technical case law and

judicial rulings to illustrate how Ohio’s civil justice system has improved, what threats remain and what additional improvements

are needed. Readers unfamiliar with some of the legal terms used here still should be able to take away an overall perception of the

legal climate in Ohio and its potential impact on the state’s economy and the delivery of justice to Ohioan citizens.

RetoolingOHIOA bulletin for leaders on policy issues critical to Ohio manufacturers2010 Volume 7

RetoolingOHIO

A tort is wrongful act, either

intentional or negligent, for

which a civil (not criminal)

lawsuit may be filed, excluding

“breach of contract” actions.

Individuals who have been

harmed by a wrongful act may

use tort law to seek compensation

from the legally responsible (or

liable) party for the harm they

have suffered. Such liability

lawsuits are tried in Ohio’s civil

justice system.

A state’s legal climate can be a major inducement or a major deterrent to business investment, growth and job creation. It’s one factor among several key ones that businesses consider when making decisions about where to expand existing operations or locate new facilities. Specifically, companies are looking for fairness and predictability.

Legal climate and tort costs also impact competitiveness—nationally and internationally. Many of the America’s major global competitors and trading partners have comparatively lower tort litigation costs, which disadvantages U.S. companies in a fiercely competitive global economy.

According to the widely respected Pacific Research Institute (PRI), which

publishes an annual Tort Liability Index that measures tort liability costs and relative litigation risks across states, “An efficient tort system is an important part of a thriving free-enterprise economy. It ensures that firms have proper incentives to produce safe products in a safe environment, and truly injured people are fully compensated.”

On the other hand, PRI notes, “A poor tort system . . . imposes excessive costs on society not the least of which is the cost of foregone goods and services. . . . All of us shoulder the burden of an excessively expensive and inefficient tort liability system through higher prices, lower wages, decreased returns on investments in capital and land, restricted access to health care, and less innovation.”

continued inside

The Civil Justice System & Economic Competitiveness

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During the past ten tears, Ohio has come a long way in its efforts to create a globally competitive business environment through commonsense legislative reforms and a number of court decisions upholding those reforms. In PRI’s most recent Tort Liability Index1, Ohio was one of just five states to be categorized as “saints” (the other categories being sinners, salvageables and suckers), which PRI defines as states that have relatively low monetary tort losses and/or few litigation risks and relatively strong tort rules on the books.

Overall, Ohio ranked 11th for tort outputs (number of cases and attorneys, damage awards, settlement amounts—i.e., monetary costs and litigation risks) and 3rd for tort inputs (rules on the books that shape the tort system outputs). According to PRI, Ohio and the other “saint” states are “well positioned to contain their tort liability costs in the future if the rules are implemented as written.”

Why is this important? Because businesses stay away—and move away—from states where tort liability costs and the risks of litigation are high. The bottom line: A rational, fair and predictable civil justice system that minimizes tort costs and the risk of litigation can be a competitive advantage that attracts the investments necessary to support growth and prosperity. And that’s where Ohio should aspire to be.

“A broken tort system is one of the

biggest threats to entrepreneurship

and free enterprise. There’s far more

at stake in tort reform than just

the cost of settlements and legal

judgments. We’re talking about jobs,

and that affects everybody.”

1U.S. Tort Liability Index: 2008 Report, by Lawrence J. McQuillan and Hovannes Abramyan, Pacific Research Institute

Major Civil Justice Reform Achievements in Ohio Since 2000

Ohio’s position as a leader among states for having a legal climate that attracts investment and supports economic growth has been made possible by a number of significant legislative reforms and judicial rulings. Notable legislative victories since 2000 include the following:

• Senate Bill 120 (joint and several liability reform). SB 120 added fairness to Ohio’s civil justice system by modifying joint and several liability laws to apply liability more proportionately. For example, prior to SB 120, a defendant determined to be ten percent responsible for damages in a tort lawsuit could be required to pay up to 100 percent of the damages. Under SB 120, a defendant found to be 50 percent or less at fault for the harm caused to a plaintiff pays only damages commensurate with its percentage of fault. (Effective April 2003)

• Senate Bill 281 (medical malpractice law reform). The most notable provision of SB 281 was the establishment of caps on the amount of noneconomic damages a plaintiff can recover in a medical malpractice lawsuit. (The bill did not establish any limits on the amount of compensation a plaintiff can recover for economic damages such as past and future wages, medical bills, etc.) SB 281 was needed to help rein in skyrocketing medical malpractice insurance rates that were forcing increasing numbers of physicians to retire early, give up high-risk practice areas or leave Ohio for other states with more favorable legal climates. (Effective April 2003)

• House Bill 212 (prejudgment interest reform). Among other things, HB 212 reduced the amount of interest defendants would pay in civil jury trials and provided that judgment interest does not apply to the

portion of a jury award that is future damages—i.e., damages that have not yet accrued. The bill also revised the then-current interest rate of 10 percent on money due under certain contracts and judgments to a “floating” rate based on the federal short-term rate, and specified that the rate of interest shall be the rate in effect on the date of the judgment in a civil action and shall remain in effect until the judgment is satisfied. (Effective June 2004)

• House Bill 292 (asbestos personal injury litigation reform). HB 292 made the litigation process fairer for victims and employers in asbestos liability claims. Prior to HB 292, large numbers of asbestos-related lawsuits were being filed on behalf of plaintiffs who were not sick, forcing some companies into bankruptcy and increasing the likelihood that victims who really were sick from asbestos exposure would be unable to recover because unimpaired claimants were depleting available financial resources. HB 292 established objective medical criteria plaintiffs must meet in order to file an asbestos liability claim. The bill also suspended the statute of limitations for asbestos claims so individuals who do not yet show signs of physical impairment from asbestos exposure retain their right to file a claim if and when they ever do become ill. (Effective September 2004)

• House Bill 342 (silica and mixed dust litigation reform). Analysis showed that plaintiff attorneys were filling both asbestos claims and silica and mixed dust disease claims for the same alleged injury in anticipation of the likelihood that plaintiffs would not able to meet the new medical criteria for asbestos claims established by HB 292. Much as HB 292 established clear medical criteria for filing asbestos liability lawsuits, HB 342 established minimum medical requirements for filing certain silica or mixed dust disease claims. Under HB 342, victims

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Fortunately for Ohio businesses and consumers alike, the Ohio Supreme Court generally has preserved the past decade’s major legislative enactments in the civil justice arena and rejected continuing efforts by the trial bar to circumvent or unravel those laws.

Notable judicial rulings that have upheld key tort laws in Ohio in recent years include the following:

• Ohio Supreme Court, State ex. Rel. Ohio General Assembly v. Ohio Secretary of State Jennifer Brunner. This August 2007 ruling effectively overturned Governor Ted Strickland’s veto of SB 117, which clarified that Ohio’s product liability law, not the state’s public nuisance statutes, is the proper context for filing suit against product manufacturers (see Senate Bill 117 above). Ohio Secretary of State Jennifer Brunner had returned the bill to Governor Strickland after it had been filed unsigned by outgoing Governor Bob Taft with the Secretary of State’s office. The court ruled that Secretary of State Brunner’s actions did not pass constitutional muster, voiding Governor Strickland’s veto of this important legislation and paving the way for SB 117 clarifications to take effect.

• Ohio Supreme Court, In Re: Special Docket No. 73958, 2007-Ohio-5268. This October 2007 ruling addressed procedural issues related to legal challenges brought by organized labor and the trial bar to the retrospective application (i.e., to pending cases) of HB 292’s objective medical criteria for individuals filing a personal-injury asbestos claim (see House Bill 292 above). The Supreme Court held that the trial court’s findings regarding the constitutionality of HB 292’s prima facie filing requirements applicable to personal-injury asbestos claims constitute final, appealable orders when certain requirements are met. The Court remanded the case back

manufacturer or designer, and (c) allowed defendants to introduce evidence that a plaintiff has received, or will receive, compensation for the same damages from other “collateral sources.” (Effective April 2005)

• Senate Bill 117 (public nuisance statute reform). SB 117 helped bring to a halt the use of “public nuisance” statutes by plaintiffs’ attorneys to file suit against one-time manufacturers of a product. The bill clarified that a city’s ability to sue product manufacturers, including paint companies alleged to have contributed to lead poisoning, can be brought only under Ohio product liability law. SB 117 was designed to thwart plaintiff attorneys who sought to circumvent the requirement of SB 80 that plaintiffs filing product liability lawsuits must prove that a specific product of a specific manufacturer or supplier caused the plaintiff’s harm. SB 117 also permitted consumers to recover up to $5,000 of noneconomic damages, in addition to all actual out-of-pocket economic damages and attorney fees, under the Ohio Consumer Sales Protection Act. (Effective August 2007)

Collectively, these legislative efforts

have made a huge positive difference

in the legal climate within which

businesses operate in Ohio. However,

the trial bar has been dogged in

seeking to undo many of the reforms

through the court system.

Collectively, these legislative efforts have made a huge positive difference in the legal climate within which businesses operate in Ohio. However, the trial bar has been dogged in seeking to undo many of the reforms through the court system.

who truly are sick from exposure to silica and/or mixed dust have their claims processed more quickly. (Effective September 2004)

• House Bill 498 (employment intentional tort reform). HB 498 required employees suing their employers for a workplace injury to prove that the employer acted with an “intent to injure” or in the belief that an injury was substantially certain to occur. The bill was designed to address the impact on employers of the expansion of provisions for seeking damages for workplace injuries that had resulted from a series of Ohio Supreme Court decisions. In 1982 the Court created the “intentional tort” as a mechanism for workers to seek compensation for workplace injuries. Over the years, the Court relaxed the standards for intentional torts, which resulted in such suits becoming commonplace. As employers and their insurers increasingly chose to settle these cases to avoid the high costs of a trial, this in turn created a lottery atmosphere in which many employees filed intentional torts with the expectation of a windfall settlement even for minor injuries. (Effective April 2005)

• Senate Bill 80 (comprehensive tort reform). SB 80 brought added levels of fairness and predictability to Ohio’s civil justice system through a comprehensive package of commonsense award parameters that fairly compensate individuals who are injured while also providing safeguards to ensure that defendants are not unjustly penalized and plaintiffs and their attorneys are not unjustly enriched. Among other things, SB 80 (a) established reasonable caps on punitive and noneconomic damages for all tort actions, (b) established a 10-year statute of repose (i.e., time limit) within which product liability and construction-related lawsuits can be filed against the original

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• Franklin County Court of Appeals, Hanners v. Ho Wah Genting Wire & Cable SDN BHD, 2009-Ohio-6481. This December 2009 ruling upheld the constitutionality of the punitive damages bifurcation provision included in SB 80, which protects the right of a defendant to a separate trial on the issue of noneconomic damages without evidence related to possible punitive damages being considered at the same time.

These judicial rulings have played a vital role in protecting the integrity and intent of legislative reforms that improved the fairness and predictability of Ohio’s civil justice system, balancing the need to protect companies from frivolous lawsuits with the need to compensate victims fairly for any legitimate liability claims.

Scanning the Civil Justice Reform Landscape, 2010 and Beyond

For all the progress we have made in Ohio, additional improvements are needed and several important civil justice reform proposals are being advanced. At the same time, it’s important to understand that there also is no shortage of counterproductive efforts underway threatening to undermine and undo key reforms of recent years.

For all the progress we have made

in Ohio, additional improvements

are needed and several important

civil justice reform proposals are

being advanced.

Judicial rulings have played a

vital role in protecting the integrity

and intent of legislative reforms…

balancing the need to protect

companies from frivolous lawsuits

with the need to compensate

victims fairly for any legitimate

liability claims.

• Ohio Supreme Court, DiCenzo v. A-Best Products Co. In October 2009, the Court ruled that a seller’s or supplier’s liability for defective product sales does not apply to pre-1977 sales. Prior to 1977, Ohio did not permit claims against sellers/suppliers for defective products. The Court’s ruling in DiCenzo held that retroactive application of a 1977 Court decision allowing such suits would impose a significant financial burden on defendants without promoting the purpose of making products safer since the products in question had not been sold for nearly three decades.

• Ohio Supreme Court, Oliver v. Cleveland Indians Baseball Co. Ltd., Slip Opinion No. 2009-Ohio-5030. In October 2009, the Court ruled that the $250,000 cap on noneconomic damages awarded against political subdivisions (Chapter 2744 of the Ohio Revised Code) is constitutional because it is rationally related to the purpose of preserving the financial integrity of political subdivisions. The Court also held that the cap does not violate a plaintiff’s right to a jury trial or the right to equal protection under the law. The Court’s decision in this case drew attention to the fact that it’s not just private businesses but also the public sector that can be the victim of irrational, lottery-style jury awards.

to Ohio’s Eighth District Court of Appeals, which in September 2008 ruled that the retroactive application of HB 292 was not in violation of the Ohio Constitution and reversed the trial court’s finding.

• Ohio Supreme Court, Arbino v. Johnson & Johnson. In this December 2007 ruling, the Court upheld two major capping provisions of SB 80—the caps on jury awards for noneconomic damages and for punitive damages. The Court found that caps do not violate consumer rights, right to jury or separation of powers.

• Ohio Supreme Court, Groch v. General Motors Corporation, 2008-Ohio-546. In this February 2008 ruling, the Court held that SB 80’s 10-year statute of repose applicable to product liability actions is constitutional on its face although unconstitutional as applied to the specific facts in Groch. The Court rejected the plaintiff’s charge that the statute of repose provision in question violates the takings clause, the due process and right to remedy clauses, and the equal protection clause of the Ohio Constitution.

• Ohio Supreme Court, Ackison v. Anchor Packing Company. This October 2008 ruling upheld the retroactive applicability provisions of HB 292, Ohio’s landmark asbestos liability reform legislation. The Court’s decision affirmed that SB 292 could be applied to cases pending prior to the legislation’s effective date. Days following the Ackison decision, the Cuyahoga County Common Pleas Court dismissed 30,000 asbestos claims, unclogging a backlog of unwarranted suits and making possible more timely consideration of, and compensation for, legitimate personal injury claims related to alleged exposure to asbestos.

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Opportunities for Improvement: Priority Advocacy IssuesThree major priorities for legislative action merit mention here:

• Asbestos Bankruptcy Transparency. In Ohio, asbestos claimants have two potential means of recovery—by making a claim against an asbestos bankruptcy trust fund or by filing a civil suit against a solvent company in a state court. Frequently, judges and juries in civil suits do not have access to information disclosed in the bankruptcy system (a federal court jurisdiction). This lack of transparency and coordination compromises the ability of judges and juries to render justice on a consistent basis. Companion legislation introduced in 2008 (SB 370/HB 631) would have required asbestos claimants to make certain disclosures pertaining to claims that have been submitted to asbestos bankruptcy trusts. By providing for greater transparency, this OMA-supported legislation would have helped prevent “double dipping” without limiting or delaying the ability of asbestos claimants to seek recovery for their injuries. Status: SB 370 passed the Ohio Senate and the particular House committee but never went to a floor vote; HB 631 went to a House floor vote and was defeated by a vote of 48 to 45 in December 2008. To date, no new bill has been introduced.

• Private Attorney Retention Sunshine Act (PARSA). In Ohio and across the country, government officials increasingly are outsourcing legal work to private-sector personal injury attorneys on a contingency fee basis. The practice of entering into such contracts has raised legitimate questions about the propriety of contingency-fee arrangements for the prosecution of public claims. PARSA

is model legislation developed by the American Legislative Exchange Council (ALEC) that would require greater transparency and accountability when such agreements are made. PARSA would require legislative approval of most large contingency-fee contracts between government and personal injury attorneys; require personal injury attorneys to keep track of their time spent on government cases; and reassert the legislature’s regulatory oversight. Status: To date, no PARSA legislation has been introduced in the Ohio General Assembly.

• CSPA “Right to Cure” Provision. Many states across the nation have added “right to cure” (or “expedited remedy”) provisions to their Consumer Sales Practices Acts (CSPAs). “Right to cure” allows the defendant in a CSPA claim to voluntarily offer to remedy the problem before going to trial. If the plaintiff declines the offer and then is awarded a smaller award at trial, the defendant is not liable for paying the plaintiff’s attorney fees incurred after the offer was made, as currently required under the CSPA. “Right to Cure” provides an incentive to defendants to quickly and voluntarily step up to the plate to offer legitimate remedies to plaintiffs when issues arise, while the incentive for plaintiffs is a fair and quick resolution without waiting on a lengthy legal process to deliver an award that may be less than the original remedy offered by the defendant. The Ohio General Assembly should give consideration to amending Ohio’s CPSA with some comparable “right to cure” or “expedited remedy” provisions. Status: To date, no CSPA legislation has been introduced in the Ohio General Assembly.

The Legislative Arena: Recent Setbacks & Imminent ThreatsOhio has come a long way in developing a competitive business environment—in part through various tort reforms that have created a fairer and more stable and predictable legal environment. But make no mistake about it: Substantial efforts are underway to try to whittle away at those reforms and roll back the progress we have made as a state. Personal injury trial attorneys have been among the most active parties in trying to reverse gains that have helped make Ohio a fair place for businesses and injured parties alike.

Ohio has come a long way in

developing a competitive business

environment—in part through

various tort reforms that have

created a fairer and more stable

and predictable legal environment.

But make no mistake about it:

Substantial efforts are underway to

try to whittle away at those reforms.

Following is a list of recent setbacks and specific imminent threats that make it clear this is no time for Ohio manufacturers—or the broader business community—to be complacent about the tort landscape in our state:

• House Bill 631 (disclosure requirements in asbestos claims). This OMA-supported bill would have required asbestos claimants in civil suits to make certain disclosures pertaining to claims that have been submitted to asbestos bankruptcy trusts. Status: As noted above, HB 631 was defeated in a floor vote in the Ohio House in December 2008.

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• Senate Bill 309 (consistent language for creating private rights of action). This OMA-supported proposal would have required consistent language when statutes intend to explicitly create a private right of action (i.e., a right to file suit), helping to curtail court rulings that result in unexpected liability for companies. Status: SB 309 cleared committee but never came up for a floor vote by the time the 127th General Assembly adjourned in 2008.

• House Bill 361 (collateral source rule). This OMA-opposed legislative proposal would reverse the effect of a key provision of Senate Bill 80 (see p. 3) related to the accuracy of evidence presented to a jury. Specifically, HB 361 addresses the admissibility of evidence of a write-off—i.e., the amount of compensation accepted by a medical provider from an insurer as full payment for medical or hospital treatment—in personal injury or wrongful death lawsuits. HB 361 would limit evidence of medical damages to only the amount of the plaintiff’s original, pre-write-off medical bill. As such, HB 361 would enable plaintiff attorneys to create fictional damages that a claimant did not in fact incur, thereby confusing juries trying to determine appropriate damages and deliver fair and equitable results. If enacted, HB 361 would greatly increase litigation damages awards. Status: The bill has been referred to the Ohio House Civil & Commercial Law Committee.

• Senate Bill 36 (rejection of settlement offers & post-offer costs). This legislation requests the Ohio Supreme Court to amend Rule 68 of the Ohio Rules of Civil Procedure to mirror Rule 68 of the Federal Rules of Civil Procedure. Intended to encourage settlements, Federal Rule 68 allows a defendant

to make a settlement offer and makes the plaintiff who rejects such an offer liable for the defendant’s post-offer costs, as well as the plaintiff’s own costs and attorney fees, if he or she does not improve on the offer at trial. As originally introduced, this bill was supported by the business community; however, SB 36 was amended to go beyond the scope of Federal Rule 68 (by expanding the defendant’s offer of judgment to offers made by plaintiffs), and it was weakened by carving out exceptions for tort or medical malpractice actions in which noneconomic damages are capped. Status: The Ohio Senate Judiciary-Civil Justice Committee approved this bill in June 2009. The bill is pending a full Senate floor vote.

• Senate Bill 157 (Cy pres doctrine). Under SB 157, undistributed class action proceeds must be donated to a charity or nonprofit organization. Enacting SB 157 would codify existing cy pres doctrine in Ohio, which allows—but does not require—distribution of unclaimed settlement funds in this manner. Currently, when defendants agree to out-of-court settlements, the amount of the total settlement fund they actually pay out is determined by the number of class action claimants who come forward to claim their award. Under SB 157, defendants would pay the full amount of the settlement fund regardless of the number of claimants who are identified. There is no need to codify cy pres in statute, because it already exists as a discretionary tool that judges and parties to the class action can use to reach a settlement and designate part or all of any unclaimed funds to charity. Codifying cy pres would likely increase the number of class action lawsuits filed in Ohio (making the state less attractive to businesses); it would discourage companies from entering into settlement agreements (driving up legal costs for everyone and clogging the court system); and it could inflate plaintiff

attorney fees in claims-made settlements (thereby encouraging frivolous lawsuits). For these reasons, Ohio’s business community is united in its opposition to SB 157. Status: SB 157 is pending before the Ohio Senate Insurance, Commerce and Labor Committee. A similar proposal, HB 427, was introduced in the Ohio House of Representatives in January 2010.

The Judicial Arena: Defense of Achievements to DateIn addition to imminent threats at the Statehouse, there are a number of tort reform challenges working their way through lower courts, as well as some reform provisions that are likely to face future judicial challenges. These include, but are not limited to, the following:

• Ban on multiple punitive damage awards

• Ban on prejudgment interest on punitive damage awards

• Government standard defense against punitive damage awards

• Statute of repose for construction

• Successor liability provisions for successor-asbestos related liability

• Product liability provision that eliminates the consumer expectation test as a stand-alone test for design defect causes of action and creates an additional factor, which requires a “reasonable alternative design” analysis, to be considered in the risk-utility test for design defect causes of action

The OMA-supported reforms

described in this document strike a

reasonable balance between protecting

consumers and workers without

overly burdening businesses, while

positioning Ohio advantageously

relative to other states.

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The OMA encourages its public-

sector partners to ask themselves,

“Will my position on critical

tort reform issues enhance—or

undermine—Ohio’s competitiveness

in the global economy?”

Most importantly, we encourage our public-sector partners to ask themselves, “Will my position on critical tort reform issues enhance—or undermine—Ohio’s competitiveness in the global economy?” That’s the OMA’s—and Ohio’s—bottom line.

The Stakes Are High for Ohio—and for Ohio Job Creators

A rational, fair and predictable civil justice system pays substantial dividends. It attracts investment, removes barriers to innovation, promotes growth and stimulates job creation. The OMA-supported reforms described in this document—those enacted as well as those currently being advanced—strike a reasonable balance between protecting consumers and workers without overly burdening businesses, while positioning Ohio advantageously relative to other states.

To help protect and further strengthen this competitive advantage, and to advance manufacturing in Ohio, the OMA will continue its vigilant monitoring of, and advocacy in response to, the efforts of personal injury attorneys and judicial activists who seek to undo Ohio’s tremendous civil justice reform achievements of the past decade. Essential partners in this work are state policymakers whom we encourage to ask the following questions of every civil justice reform bill introduced in the General Assembly or challenged in the courts:

• Will these policies fairly and appropriately protect and compensate injured parties without creating a lottery mentality?

• Will these policies increase—or reduce—litigation burden and costs ?

• Will these policies promote—or thwart—innovation?

• Will these policies attract—or discourage—investment?

• Will these policies stimulate—or stifle—growth and job creation?

2010 Volume 759 of 116

33 N. High Street

Columbus, OH 43215-3005

800-662-4463 • 614-224-1012 fax

www.ohiomfg.com

The mission of The Ohio

Manufacturers’ Association is to

protect and grow Ohio manufacturing.

Through the OMA, manufacturers

and manufacturing stakeholders work

directly with the members of the Ohio

General Assembly, state regulatory

agencies, the judiciary community

and statewide media with the sole

focus of improving business conditions

for manufacturers in Ohio.

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Ohio Manufacturers’ Association Ohio NFIB

Ohio Chamber of Commerce Ohio State Medical Association

Ohio Council of Retail Merchants Ohio Society of CPAs

January 26, 2010 TO: Honorable Mark Okey, Chairman

Ohio House Civil & Commercial Law Committee On behalf of the membership of our respective organizations listed above and the numerous other member organizations of the Ohio Alliance for Civil Justice, we oppose House Bill 361, and urge all members of the committee to vote no should there be a vote on the measure. On April 7, 2005, Ohio’s legal climate changed significantly when Senate Bill 80, a new tort reform law, became effective. This comprehensive piece of legislation makes significant reforms to our legal system and ensures that both plaintiffs and defendants are treated fairly in the courts. House Bill 361 would reverse the effect of a key provision of Senate Bill 80 related to the accuracy of evidence presented to a jury. It would deny both plaintiffs and defendants the benefits of a fair and reasonable collateral source rule in Ohio. Our state’s legal climate is vital to every aspect of our access to health care, education, jobs and opportunity and we believe House Bill 361 would be a major blemish on Ohio’s new reputation as having a fair and reasonable legal climate. The contention has been made by proponents that the Ohio Supreme Court ruling in Robinson v. Bates (112 Ohio St.3d 17, 2006-Ohio-6362) has created great confusion regarding the application of Ohio Revised Code Section 2315.20 as amended by Senate Bill 80. In the Robinson v. Bates case, the Ohio Supreme Court held that Senate Bill 80’s collateral-source rule does not bar evidence of a write-off (the amount accepted by a medical provider from an insurer as full payment for medical or hospital treatment). According to the Court, both the original medical bill and the amount accepted as full payment are admissible to prove the reasonable value of the medical treatment. And, while a plaintiff’s medical bills are admissible prima facie evidence of the reasonable value of charges for medical services, they are rebuttable by the defendant. This unanimous decision allows juries to consider all of the information submitted as evidence of medical damages. By limiting evidence of medical damages in personal injury and wrongful death cases to only the amount of the original pre-write-off medical bill, we believe House Bill 361 would provide plaintiff lawyers with the ability to confuse jury’s in their determination of damages. We also believe House Bill 361 interferes with our state’s jury system’s ability to deliver fair and equitable results.

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We believe House Bill 361 would not “clarify” the statute, but would change it dramatically. House Bill 361 would create a legal fiction that a claimant incurred damages, as a matter of law, when the claimant did not incur such damages at all. For these reasons we are opposed to House Bill 361. Thank you for your consideration of our viewpoint. Respectfully,

Ryan Augsburger Managing Director of Public Policy Services Ohio Manufacturers’ Association Chairman, Ohio Alliance for Civil Justice

Roger R. Geiger Vice President/Executive Director NFIB/Ohio Vice Chairman, Ohio Alliance for Civil Justice

Barbara Benton Vice President, Governmental Affairs The Ohio Society of CPAs Treasurer, Ohio Alliance for Civil Justice

Linda Woggon Vice President, Governmental Affairs Ohio Chamber of Commerce Secretary, Ohio Alliance for Civil Justice

Tim Maglione Senior Director, Government Relations Group Ohio State Medical Association Assistant Secretary, Ohio Alliance for Civil Justice

Gordon M. Gough Executive Vice President Ohio Council of Retail Merchants Member at Large, Ohio Alliance for Civil Justice

Cc House Civil & Commercial Law Committee Honorable Armond Budish Honorable Bill Batchelder

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January 2010

Government Relations Bulletin

Bricker & Eckler LLP

100 South Third StreetColumbus, Ohio 43215-4291

Phone 614 . 227 . 2300Fax 614 . 227 . [email protected]

COLUMBUS CLEVELANDCINCINNATI-DAYTON

This document has been pre-pared as a general reference document for informational purposes. The information con-tained herein is not intended to be and should not be construed as legal advice. Each circum-stance should be considered and evaluated separately, and possibly with involvement of legal counsel.

Please contact Bricker & Eck-ler for permission to reprint this bulletin in part, or in its entirety.

Supreme Court Strikes Restrictions on the Use of Corporate Funds in Political SpeechIn a landmark decision issued on January 21, 2010, the United States Supreme Court struck down §441b of the Bipartisan Campaign Reform Act (BCRA) as violating the First Amendment. Citizens United v. Federal Election Commission, 588 U.S. _____ (2010). The decision affirms that corporations, trade associations, and labor unions may use general treasury funds to make indepen-dent communications that expressly advocate the election or defeat of a political candidate or to fund independent electioneering communications. Overturning years of precedent, the Court ruled that corporations have the same right as individu-als to engage in independent political speech, a decision that will have a ripple effect on similar laws, including those in Ohio.

Independent Corporate Expenditures The nonprofit corporation Citizens United cre-ated Hillary: The Movie and brought the case challenging BCRA’s ban on “electioneering com-munications.” Electioneering communications are a type of independent expenditure that is not coor-dinated with a candidate, and is broadcast shortly before a federal election that references a federal candidate, whether or not a direct message to vote for or against the candidate may be involved. In addition, the Opinion addressed other independent expenditures by corporations, such as more direct corporate messages urging a certain vote or mes-sages disseminated through other means.

Since Hillary: The Movie was produced using corporate funds, the BCRA prohibited its playing immediately prior to the 2008 federal election. Citizens United argued on narrow grounds that the ban did not apply on statutory grounds. The Supreme Court rejected the narrow statutory argument, instead taking a broader stance to find

the federal law and its sweeping ban on all independent corporate expenditures to be un-constitutional.

The Court reiterated previous case holdings that corporations enjoy First Amendment protection in various contexts and extended those protec-tions to corporate political speech. In doing so, the Court overruled an earlier precedent which held that a corporation’s unique character and access to large amounts of money allowed and even required corporations to be treated differ-ently in regard to political speech. “The rule that political speech cannot be limited based on a speaker’s wealth is a necessary consequence of the premise that the First Amendment gener-ally prohibits the suppression of political speech based on the speaker’s identity.” 588 U.S. _____ (2010), p. 34.

Justice Kennedy, writing for a majority of the Court, described §441b as an unconstitutional prior restraint on speech, holding that: “When the Government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought.” Id, p. 40.

As a result of the Opinion, federal laws that prohibit independent expenditures by corpo-rations are now unenforceable. Independent expenditures are not, and cannot be, subject to campaign finance limits. Thus, corporations, trade associations, and unions may now make independent expenditures without limitation related to federal elections.

Like the federal BCRA laws, Ohio law prohibits independent corporate political expenditures. While Citizens United applies strictly to federal law, the strength and breadth of the Opinion puts 63 of 116

August 2008 Government Relations Client Bulletin

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the enforceability of Ohio law on corporate indepen-dent expenditures into serious doubt. While Ohio’s ban on independent expenditures by corporations may remain on the books until addressed by the General Assembly, the ban cannot be effectively enforced against trade associations, or corporations.

Disclaimers and Reporting RequirementsThe Citizens United Opinion did not strike BCRA or the federal campaign finance laws in their entirety. BCRA requires the use of disclaimers on independent communications and electioneering communica-tions. Federal law also requires that expenditures be disclosed in various campaign finance reports, and places restrictions and reporting requirements on federal political action committees. Those provisions were upheld in Citizens United.

Thus, requirements for disclaimers showing the name of the entity sponsoring the communication are upheld. In addition, laws requiring that independent expenditures over certain threshold amounts must be publicly disclosed and list who paid for the communi-cation, which election the communication referenced, and the names of all contributors.

The Citizens United Court affirmatively upheld the reporting and disclosure requirements associated with electioneering communications, explaining, “The Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether.”

Ohio law contains similar reporting and disclosure requirements. Citizens United lends additional sup-port for finding provisions that regulate disclosure and reporting related to Ohio corporate independent expenditures are similarly constitutional.

Direct Corporate ContributionsWhile the federal ban on corporate independent expenditures is clearly addressed and stricken, the Citizens United Court did not rule upon the consti-tutionality of direct corporate contributions. Direct contributions from a corporate treasury to a political candidate or party are prohibited by federal law, as well as Ohio law. The constitutionality of that pro-hibition is now in question.

Without distinguishing between direct contributions and independent expenditures, the majority decision made clear that “No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.” Id. p. 50. Also, the Court gave a critical review of the “onerous restriction”

placed on the political action committee process used currently by corporations to have some limited political involvement, generally commenting that “the option to form PACs does not alleviate the First Amendment burden.”

The breadth of this holding allows for direct cor-porate participation in political campaigns in Ohio. Clearly, direct corporate contributions may be sub-ject to monetary limitations and may be subject to disclaimer and reporting requirements. However, the constitutionality of Ohio’s complete ban on direct corporate contributions seems to be in significant jeopardy.

Unlike federal law, Ohio law already treats unions differently than corporations, allowing them to make direct contributions as a “political contributing entity” or “PCE.”

Ohio law defines a PCE as “any entity, including a corporation or labor organization, that may lawfully make contributions and expenditures . . .” R.C. 3517.01(B)(25). Until the Citizens United decision was rendered, corporations were ineligible to make any direct political contributions. In light of the Citizens United Opinion, it appears that corporations that wish to make direct contributions in Ohio may now fall within the definition of a PCE.

As a result, while corporations, trade associations, and unions are now presumably free to make inde-pendent expenditures related to the political process, restrctions in Ohio law related to direct contributions by PCEs may now extend to corporations as well. Reporting and disclosure requirements, which al-ready apply to PCEs under Ohio law, will also apply. As a result of Citizens United, Ohio law contains several provisions which seem to conflict, not the least of which is the Ohio law prohibiting corporate contributions in their entirety.

ConclusionThe Citizens United Opinion will undoubtedly impact the campaign finance landscape in Ohio and across the country. The full extent of that impact remains to be seen, as legislators and elections commissions react and enact new regulations in response to the Opinion. At a minimum, this landmark decision cre-ates new opportunities for corporations, unions, and trade associations to become more directly involved in the political process.

For more information please contact Maria J. Armstrong at 614.227.8821 or [email protected].

Government Relations Group

Maria J. Armstrong, Chair 614.227.8821 [email protected]

Gregory J. Lestini 614.227.4893 [email protected]

Miranda C. Motter 614.227.4810 [email protected]

Terrence O’Donnell 614.227.2345 [email protected]

Hope M. Sharett 614.227. 8961 [email protected]

Christopher N. Slagle 614.227.8826 [email protected]

Jeffery E. Smith 614.227.2352 [email protected]

Elisabeth A. Squeglia 614.227.2396 [email protected]

Kurtis A. Tunnell 614.227.8837 [email protected]

Faith M. Williams 614.227.2374 [email protected]

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Annual Public Affairs Conference

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OVERVIEW The NAM holds an annual public affairs conference that focuses on grassroots involvement, best practices and policy initiatives over the course of 2 ½ days. This conference has become the nation’s premiere annual gathering of public affairs and government relations executives from corporations and associations.

DATES/TIMES March 21-23, 2010 The conference will begin at approximately 3:00 p.m. on Sunday, 3/21 and end at approximately 12:00 pm on Tuesday, 3/23.

CONFERENCE LOCATION The Ritz-Carlton Amelia Island 4750 Amelia Island Parkway Amelia Island, FL 32034 Map and Directions The hotel is located approximately 30 minutes from the Jacksonville Airport.

HOTEL RATES Hotel room rates will be available at $246 per night, plus taxes for conference participants.

REGISTRATION INFORMATION Conference Fees: $950 for NAM members; $850 for additional registrants from same organization $1100 for non-members; $1000 for additional registrants from same organization $300 for spouses/guests

Register now to take advantage of the early bird registration fees before the price increases on February 1, 2010.

To Register – Click Here.

CONTACT INFORMATION Colleen Vivori Director, Public Affairs, NAM (202) 637-3114 or [email protected]

© 2008 National Association of Manufacturers

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2010 Manufacturing Summit

Overview | Agenda | Registration Info

Hotel | Sponsorship Info

OVERVIEW

Last year, more than 300 manufacturers from across the United States gathered in Washington for the first National Association of Manufacturers (NAM) Manufacturing Summit. NAM members visited over 130 Congressional offices to emphasize the need for policies that will spur economic growth and improve our country’s competitiveness.

The event was a great success, but the stakes are getting higher. Please join the NAM and help legislators understand the critical role of manufacturing in our nation’s economic security. Mark your calendars and plan to attend the NAM’s Manufacturing Summit in Washington, DC, April 14-15, 2010.

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DATES/TIMES April 14-15, 2010

The conference will begin at approximately noon on Wednesday, April 14 and end at approximately 4:00 pm on Thursday, April 15.

CONFERENCE LOCATION Hyatt Regency Hotel 400 New Jersey Avenue, N.W. Washington, DC 20001 800-233-1234 www.hyatt.com

HOTEL RATES

Hotel room rates will be available at $289 per night, plus taxes for Summit participants.

CONTACT INFORMATION Tara Smith Director, Public Affairs, NAM (202) 637-3014 or [email protected]

© 2008 National Association of Manufacturers

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Energy – Public Policy Report To: OMA Energy Committee From: Kevin Schmidt, OMA Staff Re: Energy Update Date: 1/27/2010 With few exceptions, the General Assembly continues to be quite on energy related issues. As with the last report, this is not the same for the Public Utilities Commission of Ohio (PUCO). PUCO highlights can be found in the Counsel’s report. 1. General Assembly Actions

a. House Bill 301 – Representative Mike Foley (D-14, Cleveland) introduced HB 301 which would give new life to the Advanced Energy Fund (AEF) at the Ohio Department of Development. The AEF was set up in 1999 in Senate Bill 3, Ohio’s electricity deregulation bill. Each electric customer in Ohio is charged $.09 a month to provide the AEF with funds. HB 301 would extend the life of the AEF to 1/1/2025 and create a tiered funding stream with industrial customers paying $50 a month per meter, commercial customers paying $10 a month, and residential customers paying $1 a month.

The OMA has met with the sponsor and raised concerns over the administration of this fund, pointing out that nearly 80% of the funds disbursements have gone to residential customers, the tiered funding structure, and generally the need to continue a fund that was created to assist the renewable energy industry. Recall, SB 221 creates a government mandated market for renewable products. Representative Foley suggested that he would be amenable to reworking the fund so that monies are paid out in proportion to the amount a customer class puts in. The OMA is still reviewing the proposal. To date it has not been scheduled for a hearing. UPDATE – The OMA has learned that the Ohio Consumers’ Counsel may be promoting a move away from the flat fee structure currently outlined in HB 301. The proposal would set the fees on a per kWh basis. The OMA has a meeting with the representative on 1/27 to discuss this issue.

2. Proposals

The OCC is working with Representative Gerberry (HD 59, D – Mahoning County) on a proposal that would create a statewide collaborative for energy efficiency. The collaborative would be charged with working with utilities to “compare and review proposed energy efficiency and peak demand reduction programs.” Utilities would be required to submit their programs to the collaborative for review before submission to the PUCO.

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The OMA has not taken a position on the proposal yet. Its provisions are duplicative of the work done by utilities through their individual collaboratives and the PUCO process. Further, the collaborative would hire a “facilitator” for management of its activities. Additional regulatory duties that are not additive to the current process and costs additional dollars is generally not supported by the OMA.

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EnergyServices

The OMA’s Energy Leadership Program is an opt-in program for Ohio’s manufacturers to join with one another to participate in – and mitigate the costs of – electricity matters before the Public Utilities Commission of Ohio (PUCO).

Through the support provided by the Energy Leadership Program participants, the OMA will engage the legal experts needed to monitor and intervene in electricity issues at the PUCO that affect your electricity bill.

At any given time, there are issues before the PUCO that have a direct effect on manufacturers’ electricity costs. The utilities will present rate cases before the PUCO in 2010 that will determine rates beginning in 2011 and beyond. Clearly, by the time the rates hit your bill, it is too late to act. These rate cases contain numerous cost-driving issues, including:

How customer class rates will be set•

How customer classes will pay for mandated energy efficiency programs•

How customer classes will be charged for renewable energy•

What subsidies manufacturers will pay to other rate classes•

In addition to rate cases, the utilities will be negotiating other cost drivers that affect your bill. For example, to protect consumers’ costs, utilities are not permitted by law to have “excessive earnings.” However, the PUCO has not yet determined a working definition of “excessive earnings” that will govern rate making. The largest manufacturers independently participate at the PUCO in these and similar issues, as do environmental and state-funded residential advocates. One of the ways these active consumers protect themselves is by negotiating to transfer costs to other consumer groups. It is to your advantage to have expert representation and thus, rate protection.

Your company will be able to participate by collaborating through the OMA in an affordable way to help shape policy and electricity rates at the PUCO. This participation provides:

Rate Protection• – Your direct participation will ensure that your voice is heard and your issues are considered. By having a seat at the table, you mitigate other parties from shifting costs to you.

Regular• Updates – The program will provide members with regular updates regarding the status and affect of active cases at the PUCO. By staying abreast of PUCO activity, you will be in a better position to budget, forecast and manage your electricity bill.

What is the eneRgy LeadeRshiP PRogRam?

What’s at stake foR my comPany?

What aRe the benefits of joining the eneRgy LeadeRshiP PRogRam?

Built by Manufacturers for Manufacturers

800-662-4463fax: 614-224-1012ohiomfg.com

33 N. High StreetColumbus, OH 43215-3005

The Ohio Manufacturers’ Association

Energy Leadership Program

Manufacturing Member

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enhanced Visibility• – Members who choose to participate may be afforded the opportunity to present their unique concerns and issues to their utility in the context of rate cases or other transactions at the PUCO. This heightened visibility may provide you with a stronger voice resulting in better customer service from your electric utility.

conversation and • best Practice sharing – Communication and interchange with the manufacturing community could help you solve the energy problems on which you are working.

The main expense of the Energy Leadership Program is hiring the legal expertise needed to represent manufacturers’ interests at the PUCO. Sharing the costs among the program participants creates an affordable way for manufacturers to mutualize the costs of legal intervention, at a much lower expense than hiring your own energy attorneys.

A $5,000 annual investment is all that is required to ensure that your facility is off of the sidelines and taking an active role in all PUCO proceedings that can affect your electricity bill. consider whether $5,000 as a percent of your total electricity spend is worth it to protect your company.

Contact kevin schmidt to learn more about the oma’s energy Leadership Program.

Email: [email protected]: 614-629-6816 or 800-662-4463

What’s the cost?

hoW to join

EnergyServices

Built by Manufacturers for Manufacturers

800-662-4463fax: 614-224-1012ohiomfg.com

33 N. High StreetColumbus, OH 43215-3005

What aRe the benefits of joining the eneRgy LeadeRshiP PRogRam?(Continued)

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Energy – Public Policy News

Chairman Schriber at the OMA Energy Committee

PUCO Chairman Alan Schriber attended the OMA’s energy committee this week and discussed a wide range of topics, including his views on federal climate change policy and energy efficiency.

OMA's energy policy manager, Kevin Schmidt, directed the committee's attention to a number of legislative proposals that could negatively affect manufacturers: HB 301 which raises over $1 billion for the Advanced Energy fund by increasing riders on manufacturers from $.09 to $50.00 to pay for NASA’s operations in Cleveland and targeted renewable energy industries and a proposal by the Ohio Consumers’ Counsel to add red-tape and burdensome requirements on Ohio’s utilities' energy efficiency programs. Contact Kevin Schmidt at the OMA with questions. 01/28/2010

Bill Increasing Rider on Electric Bills Gets 4th Hearing in House

HB 301, which raises the Alternative Energy Fund rider on manufacturers' electric bills from pennies per meter to $50 per meter, received its fourth hearing in the House Alternative Energy Committee. The rider was set to expire at the end of 2010. The Edison Welding Institute testified in support stating "We believe use of the Advanced Energy Fund revenue rider as discussed in HB 301 is an appropriate funding approach..."

The OMA had previously sent a letter to the sponsor of the bill stating that SB 221 provisions already support advanced energy industries. This bill would add yet another rider (increase) on manufacturers' bills. 01/22/2010

OMA Raises Concerns with Electricity Rider Proposal

The OMA sent a letter to Representative Foley this week raising concerns with his proposal, HB 301, to increase a fee on electricity bills to provide additional dollars for the Advanced Energy Fund. HB 301 increases the current $.09 monthly fee on electricity bills to $50.00. In its letter, the OMA states the fund’s policy goals are already being met through government mandates on electric utilities for advanced and renewable energy products. 12/14/2009

OMA Asks PUCO to Fix FE Administrator Program

The OMA filed an application for rehearing this week regarding FirstEnergy’s “historic mercantile” program. The program was designed to allow manufacturers who had already adopted energy efficient technologies to receive credit for those projects. When the PUCO ruled on the program last month it eliminated the funding for administration of the mercantile program, leaving third parties, including the OMA, with no way to finance assistance to manufacturers to collect the voluminous data required by the PUCO.

In its application, the OMA states that the PUCO’s order was unreasonable and will lead to higher costs by requiring FirstEnergy to adopt more expensive programs. Contact Kevin Schmidt at the OMA with questions. 12/17/2009

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OMA Files Comments in Electric Utility Excessive Earnings Case

The OMA filed comments this week regarding the "excessive earnings" case before the PUCO urging the commission to adopt an approach that follows state law and protects Ohio’s consumers from unnecessary price spikes. SB 221, adopted into law in 2007, created the “significantly excessive earnings test” which commands the PUCO to review an electric utility’s overall earnings when considering price increases. If the utility is earning significantly more than peer companies, then the utility must make refunds to its customers.

While Ohio is technically deregulated, Ohio’s electric utilities still retain near monopoly control over service in their territories. The OMA’s comments urge the PUCO to adopt a uniform test for measuring excessive earnings that follows the intent of the law in order to maintain a competitive environment in Ohio for manufacturers. 12/17/2009

PUCO Puts FirstEnergy Energy Efficiency Program for Manufacturers on Hold

In a recent order, the PUCO undermined FirstEnergy’s "historic mercantile" program by removing the revenue stream for third-party administrators, such as the OMA. In its order, the PUCO stated that the revenue stream for administrators was “unreasonable.”

Ohio’s electric utilities must meet energy efficiency benchmarks pursuant to Ohio law. The OMA was instrumental in getting placed into this law a mechanism that recognizes the energy efficiency improvements that manufacturers have already made, so that they can avoid new energy efficiency rider costs.

FirstEnergy’s historic mercantile program was designed to give manufacturers this credit with technical support from administrators. With no revenue stream to pay administrators (the OMA contracted with Patrick Engineering to assist members with project verification paperwork) the program has been stalled.

The OMA is taking steps to get the PUCO to reverse its decision. Contact Kevin Schmidt at the OMA if you have questions about this issue. 12/10/2009

FirstEnergy’s Rate Case Packed with Increases for Manufacturers

On October 20th FirstEnergy filed a rate plan with the PUCO that is intended to set rates for June 1, 2011 and beyond. This rate plan contains numerous provisions that will raise manufacturers’ electricity rates.

An example: FirstEnergy has modified its “economic development” rider to subsidize municipalities on their street-lighting bills. Who pays? Manufacturers.

The OMA has created the "Energy Leadership Program" as a tool for manufacturers to join together and participate in this rate case (and other cases before the PUCO that can raise your electricity bills). Click here to learn more about FirstEnergy’s rate plan. Click here to learn how you can do something about it. 12/10/2009

Senator Brown Hears OMA Member Input to Cap & Trade Bill

This week, U. S. Senator Sherrod Brown held a meeting at the OMA offices in Columbus to listen to input from more than 30 OMA members about the Kerry-Boxer cap and trade bill. The

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Senator emphasized that there is no real manufacturing protections in the bill and that is his chief interest in hearing from manufacturers.

Brown said a bill would have to have a federal financial program to help industry retool, some sort of border equalization component to level trade issues, and research & development provisions for technology development. Additionally, he said that the bill must fund the allowances, subsidy mechanisms to shield certain consumer interests from rising energy costs.

Senator Brown noted that six industries are energy intensive and “trade exposed,” and that Ohio is potentially the only state that is prominent in all six; therefore, he said, Ohio industrial concerns are critical to passage of any climate change bill.

OMA members are encouraged to continue to communicate concerns with climate change legislation with Senator Brown. 11/19/2009

Who will Supply Parts for Next Generation Nuclear?

The organization AREVA, a global leader in non-carbon energy technologies, is hosting a forum December 3 and 4 in Columbus to brief potential suppliers to the nuclear generation industry. Mike Rencheck, CEO of AREVA NP, AREVA executives and new plant procurement managers will conduct information sessions about the opportunities for new build suppliers to its Evolutionary Power Reactor (U.S. EPR). AREVA NP, is working toward developing and deploying a proposed standardized fleet of advanced EPRs in the U.S. 11/16/2009

PUCO Commissioners Attend OMA Member Meeting

PUCO Commissioners Cheryl Roberto and Paul Centolella presented their views this week on energy efficiency to OMA's Energy Committee. The OMA has been critical of these commissioners' positions of being unrealistically stringent with respect to giving credit to manufacturers' energy efficiency initiatives; OMA commented recently that energy efficiency programs need to be based on common sense and simplicity. The OMA appreciates the commissioners' candid conversation with OMA. 11/12/2009

FirstEnergy Customer? Protect Your Electric Bill

FirstEnergy has recently filed a rate-case at the PUCO that will govern rates starting June 2011. The case encompasses a wide range of issues from general electric rates for manufacturing to industrial energy efficiency programs. These cases are perfect examples of the phrase “If you’re not at the table, you’re on the menu.” Residential and commercial interest groups will be involved and have historically sought to have their rates reduced at the expense of industrial customers. To protect your company's rates, consider joining the OMA’s FirstEnergy Opt-In Group. Contact Kevin Schmidt at the OMA. 11/12/2009

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Energy – Bill Tacker

Energy Legislation Prepared by: The Ohio Manufacturers' Association

Report created on January 29, 2010

HB87 OHIO ENERGY RESOURCE CENTER (PHILLIPS, D) To create the Ohio Energy Resource Center at Ohio University's Voinovich School and to make an appropriation.

Current

Status: 12/2/2009 - Referred to Committee Senate Energy and Public Utilities

Comments: None HB110 NATURAL GAS & OIL PERMITS

(ADAMS, J) Toauthorize the Director of Natural Resources to issues permits and make leases to take and remove natural gas and oil from under the bed of Lake Erie.

Current

Status: 5/13/2009 - House Agriculture and Natural Resources, (First Hearing)

Comments: None HB113 SCHOOL ENERGY MEASURES

(FOLEY, M) To authorize school boards, for on-site renewable energy generation measures and in the same manner as for energy conservation measures, to enter into installment contracts subject to specified terms of payment, to provide that energy conservation installment contracts are subject to those same terms, and to require that at least twenty-five per cent of the schools in the state's school districts have a long term supply of solar-sourced electricity.

Current

Status: 2/2/2010 - Senate Energy and Public Utilities, (First Hearing)

Comments: None HB218 PUBLIC UTILITY TANGIBLE TAX

VALUATION (WINBURN, R) To modify the tax valuation of public utility tangible personal property used to generate electricity from renewable resources.

Current Status:

6/24/2009 - BILL AMENDED, House Ways and Means, (Second Hearing)

Comments: None HB230 COMMON SENSE REGULATION ACT

(MORAN, M) To enact the Common Sense Regulation Act to improve state agency regulatory processes, especially as they relate to small businesses, to require state departments to develop customer service training programs, and to require the director of environmental protection to provide environmental regulatory compliance assistance to small businesses.

Current Status:


Comments: None HB301 ADVANCED ENERGY FUND (FOLEY,

M) To replace the current Advanced Energy Fund revenue rider on retail electric distribution service rates with a new rider that will terminate on January 1, 2025 and permit aerospace institutes to receive Advanced Energy Fund money for advanced energy projects and economic development.

Current

Status: 1/19/2010 - House Alternative Energy, (Fourth Hearing)

Comments: None HB426 OIL AND GAS LAW (SKINDELL, M) To

revise the Oil and Gas Law.


Comments: None HCR28 URANIUM ENRICHMENT (DANIELS,

D) To urge the President of the United States to direct the United States Department of Energy to ensure the

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continuation of the uranium enrichment work being developed by the USEC, Inc., at its Piketon, Ohio plant by granting USEC's application for a federal loan guarantee.

Current

Status: 11/17/2009 - House Alternative Energy, (First Hearing)

Comments: None HJR1 COMPENSATION FOR VETERANS

(PRYOR, R) To provide compensation to veterans of the Persian Gulf, Afghanistan, and Iraq conflicts.

Current

Status: 2/19/2009 - House Veterans Affairs, (First Hearing)

Comments: None

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Environment – Public Policy Memo

To: OMA Government Affairs Committee From: Kevin Schmidt, OMA Staff Re: Environment Update Date: 2/4/2010 Since the last meeting of the OMA’s Environment Committee meeting in November of 2009, the Ohio General Assembly has been quiet on environmental issues. A number of federal issues, explained in more detail in the Counsel’s report, are facing Ohio.

1. Ozone National Ambient Air Quality Standard (NAAQS) The Obama administration has put out notice that it intends to revise the ground-level ozone NAAQS that was set in 2008 by the Bush administration. The proposed standard, between 60 and 70 ppb, would put virtually every county in Ohio out of attainment classification for ozone. It has been noted that if the Obama administration uses the upper threshold as the new standard it will be incredibly difficult for Ohio to meet, while if the lower bounds of the proposal are implemented, it will be nearly impossible for Ohio to meet. Non-attainment carries with it significant economic development repercussions as businesses are subjected to enhanced permitting standards and restrictions. US EPA estimates that the new standards would cost utilities and industry as much as $90 billion in compliance costs and is accepting public comments on the proposed standards until March 22, 2010. US EPA intends to issue final standards by August 31, 2010, which would require compliance with the primary standard in 2014, at the earliest.

2. Sulfer Dioxide NAAQS The Obama administration has put out notice that it intends to review the SO2 NAAQS. The range the administration is reviewing is between 50 to 100 ppb measured over 1 hour. The National Association of Manufacturers has circulated draft comments regarding this rulemaking noting that the World Health Organization has set a 10-minute standard of 190 ppb. NAM cites the WHO as stating “at 200 ppb any change was minimal”. Further, the NAM notes that US EPA has stated that direct health benefits of a 75 ppb standard produce only $4.6 million in benefits while compliance costs would be roughly 1000 times that amount. The public comment period on the proposed rule will close on February 6, 2010, and US EPA intends to issue a final rule by June 2, 2010.

3. Carbon Emission Regulation The future of any type of carbon emission legislation seems to be in doubt with the recent election in Massachusetts removing the Democrats’ super-majority in the US Senate. US EPA, however, continues to move forward with regulating carbon emissions under the Clean Air Act. Since late last year there have been few developments. US EPA had proposed a “tailoring” rule that would administratively limit the clear language of the Clean Air Act tightening the statute’s scope for carbon emitting sources to only those

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emitting over 250,000 tons of CO2 and CO2 equivalents. Ohio EPA has noted in past OMA Environment Committee meetings that even with this “tailoring” rule the scope of regulatory applicability may be well broader than what US EPA expects subjecting many new sources to regulation.

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Environment – Public Policy News

Manufacturers Learn About Climate and Energy Policy at OMA/Ohio University Workshop

The OMA and Ohio University held their second “New Energy Climate for Ohio Manufacturers” workshop this week in Columbus, where manufacturers learned about pending climate change proposals being debated on Capitol Hill, policy issues behind those proposals, and how Ohio manufacturers are lowering their electricity bills through energy efficiency and sustainable operations.

Workshop funding came in part from Ohio EPA to help manufacturers learn how to address the challenges resulting from regulation. Click here for Ohio EPA’s presentation and here for John Rego’s (of OMA Connections Partner, Jones Day) presentation on climate change. All of the workshop’s materials will be on the OMA’s website next week. 01/15/2010

Feds Propose (even) Tighter Ozone Standards

U.S. EPA Administrator Lisa Jackson announced yesterday that the agency will revisit the ozone standards that were significantly tightened just last year under the Bush administration.

No ozone monitor in the state complies with the standards being proposed by the Obama administration. If the proposal were to become law every county in the state could be in jeopardy of “non-attainment.” “Non-attainment” status results in increased permitting standards for manufacturers and the potential for increased costs on consumers via auto testing programs and reformulated gasoline, among other programs. OMA’s Kevin Schmidt went on record with manufacturers' concerns. 01/08/2010

New Ohio Department of Agriculture Rules for Food Processing Establishments

The Ohio Department of Agriculture is implementing new rules that require compliance on the part of all food processing establishments (manufacturers and warehouses). Specifically, all food processing establishments must now register with the Ohio Department of Agriculture, whether or not they are licensed and inspected by the Ohio Department of Agriculture.

In addition to complying with the simple registration process, all food processing establishments will also be subject to an annual fee based on the square footage of their facilities. Annual fees are expected to range from $50 to $300/facility. The fees are intended to support the operations of the Division of Food Safety.

On February 2, OMA is offering a webinar-style learning event, in conjunction with the Ohio Department of Agriculture, which will help food processing establishments understand the new requirements and enable them to comply. 01/08/2010

Manufacturers’ Associations to the President on Copenhagen: Be Careful

The National Association of Manufacturers, the OMA and 28 other state associations wrote a letter to President Obama on the eve of his trip to the U. N. Conference on Climate Change.

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The associations asked the President to “carefully consider first and foremost the impact any commitments made will have on jobs and economic growth in the United States.”

“As our country struggles to emerge from the longest and deepest economic downturn since the Great Depression, we are opposed to any commitments that would give an edge to overseas competitors at the expense of domestic investment and job growth in the United States,” the associations wrote. “Moreover, we are concerned that the competitive damage would be especially severe if the United States acts unilaterally while other manufacturing economies do not limit their own emissions." 12/17/2009

OMA Educates State on Glass Recycling

As part of an Ohio Department of Natural Resources’ stakeholder meeting this month on glass recycling, the OMA, in conjunction with O-I and the Ohio Environmental Council, shared a white paper detailing the benefits to Ohio of robust and effective glass recycling programs. Ohio’s glass industry can benefit from improved recycling through reduced energy usage and a reduced carbon footprint.

The OMA is committed to educating policymakers about the benefits that cost-effective recycling programs can have on Ohio’s environment and economy by reducing reliance on landfills and providing Ohio manufacturers with raw materials for their processes. 12/18/2009

Economic Endangerment: U.S. EPA Finalizes GHG Endangerment Finding

This week, U.S. EPA announced its final endangerment finding regarding greenhouse gases (GHGs). This move paves the way for U.S. EPA to regulate carbon dioxide and other GHGs through the Clean Air Act.

The Clean Air Act requires U.S. EPA to regulate any emissions in excess of 250 tons that it finds endanger public health. While USA has a proposed “tailoring rule” that would limit regulation of GHGs to those sources emitting 25,000 tons are more, it is unclear if it has the statutory authority to do so.

"By forcing manufacturers to meet unrealistic goals and placing burdensome costs on them, the EPA is hurting America’s competitiveness," responded NAM.

The OMA is hosting a webinar with Bricker & Eckler and Environ on December 15 to discuss U.S. EPA GHG rules. 12/10/2009

Antifreeze Bill Passes Committee; OMA has Concerns

The House Public Safety Committee affirmatively voted out HB 96 (Skindell, D-13, Cleveland) this week which requires manufacturers that sell antifreeze in Ohio to include a bittering agent in the formula to help prevent pets from being poisoned. The OMA went on record opposing some bill provisions including the requirement that, upon request, specific chemical recipes be made public and that failure to do so would result in criminal penalties. It is unclear whether or not the bill will be voted out of the full House this year. Contact Kevin Schmidt if you have concerns or would like to learn more about this issue. 12/03/2009

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OMA Hears From Ohio EPA on Air Regulations

Bob Hodanbosi, Chief of the Division of Air Pollution at Ohio EPA, addressed the OMA’s Environment Committee this week. Mr. Hodanbosi discussed issues facing Ohio in the near future including ozone and particulate matter regulations, GHG regulations, and U.S. EPA’s proposed “tailoring” rule that would limit GHG regulations to facilities that emit 25,000 metric tons of CO2 equivalents. Regarding the tailoring rule, Mr. Hodanbosi expressed concern that the proposed 25,000 ton limit may include a lot more sources that U.S. EPA expects. Click here for the full committee materials from yesterday’s meeting. 11/19/2009

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Environment – Bill Tracker

Environment Legislation Prepared by: The Ohio Manufacturers' Association


HB1 BIENNIAL BUDGET (SYKES, V) To make appropriations for the biennium beginning July 1, 2009, and ending June 30, 2011 for the operation of state programs.

Current Status:

7/17/2009 - SIGNED BY GOVERNOR, eff. 7/17/09 appropriations; other sections subject to referendum 10/16/09

Comments: Various fee changes that bear watching. Overall, budget increases resources dedicated to manufacturing needs without directly raising fees on manufacturers.

HB230 COMMON SENSE REGULATION ACT

(MORAN, M) To enact the Common Sense Regulation Act to improve state agency regulatory processes, especially as they relate to small businesses, to require state departments to develop customer service training programs, and to require the director of environmental protection to provide environmental regulatory compliance assistance to small businesses.

Current Status:


Comments: None HB301 ADVANCED ENERGY FUND (FOLEY,

M) To replace the current Advanced Energy Fund revenue rider on retail electric distribution service rates with a new rider that will terminate on January 1, 2025 and permit aerospace institutes to receive Advanced Energy Fund money for advanced energy projects and economic development.

Current

Status: 1/19/2010 - House Alternative Energy, (Fourth Hearing)

Comments: None HB324 ENVIRONMENTAL REVIEW

APPEALS COMMISSION (YATES, T) To eliminate the schedule in accordance with which the Environmental Review Appeals Commission must issue written orders concerning certain actions that were filed with the Commission and to make an appropriation.

Current


Comments: None HCR25 CAP AND TRADE LEGISLATION

(JORDAN, K) To urge the Congress of the United States to refuse to enact cap and trade legislation that would negatively impact Americans by increasing the costs of goods and services and instead enact legislation that encourages states to establish and develop their own renewable energy portfolio standards.

Current

Status: 6/17/2009 - Referred to Committee House Public Utilities



Current


Comments: None SB3 SMALL BUSINESS EMPOWERMENT

ACT (FABER, K) To require a rule-making agency to prepare a cost-benefit report for, and regulatory flexibility

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analysis of, rules that may have any adverse impact on small businesses, to create the Small Business Regulatory Review Board.

Current




Current


Comments: None SB18 ENVIRONMENTAL LAWS (GIBBS,

B) To require the proceeds of fines paid by certain political subdivisions under environmental laws to be expended by the state in the county that incurred the fine and require the proceeds of the

fines to be deposited in the General Revenue Fund.

Current

Status: 3/3/2009 - Senate Finance and Financial Institutions, (Second Hearing)

Comments: None SCR15 AMERICAN JOBS (WIDENER, C) To

urge the Congress of the United States to refuse to enact cap and trade legislation that would negatively impact Americans though the elimination of jobs and by increasing the costs of goods and services and instead enact legislation that encourages states to establish and develop their own renewable energy.

Current

Status: 7/1/2009 - Referred to Committee House Commerce and Labor

Comments: None

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Human Resources Memo To: OMA Human Resources Committee From: Kevin Schmidt Re: HR PPS Report Date: February 3, 2009 The 128th General Assembly has continued to show an inclination to introduce, and now pass, health care mandates. The Ohio House passed two mandates in December before the Christmas break, HB 81 and HB 8. HB 81 mandates broad diabetes services coverage and HB 8 mandates broad autism services coverage. The OMA issued KEY VOTE notices for both of these bills. The OMA communicated early and often that health care mandates drive up the cost of health care premiums forcing employers to question whether they can afford the benefit at all. Both mandates there found a surprising level of Republican support. HB 81 found 8 supporters in the Republican caucus, while HB 81 found 7.

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Human Resources/Health Care – Public Policy News

NAM Asks Manufacturers to Oppose Becker NLRB Nomination

President Obama has re-nominated Craig Becker to serve on the National Labor Relations Board (NLRB). According to the National Association of Manufacturers (NAM), Becker, who serves as an attorney for labor groups, including the AFL-CIO and Service Employees International Union (SEIU), espouses radical interpretations of labor law. Last year the Senate allowed his nomination to die without a vote. If Becker is confirmed to serve on the board, NAM expects he will seek to impose aspects of the Employee Free Choice Act and other anti-employer efforts through Board action. NAM is collecting company names to be included in a joint letter to the Senate to urge each Senator to oppose the nomination of Craig Becker. To view the letter or to add your company name to this joint letter, please click here by Monday, February 1, at 5:00 p.m. For more information on this issue, please contact the NAM’s Keith Smith at [email protected] or (202) 637-3045. 01/28/2010

State Mini-COBRA Extension Proposed

Employer health plans with fewer than 20 employees are generally regulated under a state version of COBRA. The Federal government acted late last year to extend the federal COBRA subsidy from 9 months to 15 months.

In order for the federal COBRA subsidy extension to apply to group health plans subject to state mini-COBRA, the state mini-COBRA law needs to be extended again to mirror the period of COBRA continuation coverage under federal law. When the federal COBRA subsidy extension expires, the state mini-COBRA law will need to be restored.

This week the Ohio Department of Insurance provided the OMA with draft revisions and invited comment. Members wishing to express comment are asked to contact OMA’s Ryan Augsburger. 01/22/2010

Labor Union Expansion Debated in House Committee

Members of the Ohio House Commerce and Labor Committee this week heard proponent testimony on HB 365 to expand public collective bargaining to apply to adjunct professors and gradulate assistants.

The bill sponsor, Representative Kathleen Chandler, a Democrat representing the 68th district based in Kent, apparently thinks public universities are not adequately unionized. Speaking in support of the bill this week, Darold Johnson of the Ohio Federation of Teachers argued that the bill was necessary for educational competitiveness. Testifying on behalf of the Ohio Education Association, Professor Patrick McLaughlin, Ph.D. expressed need for the bill because the "current system perpetuates a system that creates a permanent white-collar underclass and settles for less than pedagogical excellence in the classroom."

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Skeptical of the proponents' rationale, state representative Lynn Wachtmann (R - Napoleon) suggested the bill had more to do with union membership than academic quality. 01/15/2010

No Increases to Ohio and Federal Minimum Wages in 2010

As reported by OMA Connections Partner, Bricker & Eckler, employers can look forward to a period of minimum wage status quo for 2010. The July 2009 increase in the federal minimum wage (to $7.25 per hour) marked the last of three increases under the 2007 Federal Fair Minimum Wage Act of 2007.

There are no additional increases anticipated for 2010. Likewise, Ohio’s minimum wage will remain unchanged for 2010. As was true for 2009, if you are an Ohio employer with annual gross receipts in excess of $267,000, you must pay the Ohio minimum wage, which is $7.30 per hour. If you are an Ohio employer and your annual gross receipts are $267,000 or less, then Ohio law requires you to pay the $7.25 per hour federal minimum wage. For questions, contact Bricker’s Betsy Swift at (614) 227-2300. 01/05/2010

COBRA Expansion and Extension Signed into Law - Employers have New Compliance Requirements

President Obama signed into law on December 21 an extension and expansion of the COBRA premium subsidy law that was due to expire on December 31. The expansion means new compliance obligations for employers since the program now runs through February 29, 2010. The subsidy period is expanded by six months and new notice requirements must be met within a tight timeframe. Attached are comments from OMA Connections Partner, One Source Advisors, Inc. (OSA) , about compliance obligations. Contact OSA at (866) 270-2441 or visit the OSA website for more information. 12/27/2009

2010 Standard Employment Forms Free to OMA Members

OMA offers Standard Employment Forms for 2010 which include the 2010 Application for Employment, 2010 Absentee Calendar, 2010 Health Questionnaire, 2010 State and Federal Posting Requirements and 2010 Vacation Schedule. These up-to-date reproducible templates assist your human resource department, managers and supervisors. The forms comply with federal and Ohio laws and have been reviewed by counsel for compliance as recently as December 2009. Best of all, they are free of charge to you as on OMA member.

The forms are located on our website www.ohiomfg.com. Click on Human Resources on the left side of our home page, then click on Tools for HR Managers, or print them from the links above. 12/16/2009

More Cost with More Mandates

The Ohio House of Representatives passed two mandates this week that will raise employer health care premiums. HB 81, mandating “gold plated” diabetes coverage (including dietician services), and HB 8, mandating expansive autism services coverage, sailed through the House, mainly along party lines. Individual member votes can be found here.

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The OMA communicated via letters, testimony, and Key Vote notices that health care mandates raise costs and jeopardize employers’ ability to offer health care coverage to their employees.

Once again, a legislative majority ignored practical reason and voted to erode competitiveness and ultimately harm the interests of all workers and their families. 12/10/2009

Unionizing Activity for 2009: Elections Down, Union Wins Up

A release from OMA Connections Partner, Bricker & Eckler LLP, reported that 2009 union organizing statistics as compared to 2008 reveal that fewer elections were held but those that were proved more successful for unions.

“It’s a good time to remind employers that the Employee Free Choice Act remains a threat. The unions have indicated that after the current Congressional debate on health care reform, they will make a real push on labor issues with ‘card check’ likely to be at the top of the list,” said OMA’s Ryan Augsburger. 12/04/2009

Tips for Workplace Management of Flu

The Occupational Health and Safety Administration (OSHA) has developed a new website http://www.osha.gov/h1n1 that contains several fact sheets on how to reduce the risk of exposure to the 2009 H1N1 virus, including steps that manufacturers can take to prevent further spread of this virus. Additionally, http://www.flu.gov/ from the Department of Health and Human Services provides general recommendations to address the public health concerns posed by the H1N1 outbreak.

In a webinar learning event presented by OMA Connections Partner, Jackson Lewis, OMA members learned:

• Employers can require employees to go home if employees are displaying these specific flu-like symptoms: fever or chills AND a cough or sore throat;

• Employers may not disclose to coworkers that an employee has the flu; • Employers cannot compel employees to get a flu shot; • Employers cannot take employees’ temperatures; • Employees may not refuse to work based on fear of being exposed to flu.

For your questions, contact Nicole Monachino of Jackson Lewis. 11/19/2009

NAM Opposes Senate Health Care Bill as Too Burdensome for Manufacturers

In a press release issued yesterday, the National Association of Manufacturers (NAM) president, John Engler, responded to the release of Senate Majority Leader Reid's (D-NV) Patient Protection and Affordable Care Act. Engler said, "Manufacturers entered into the health care debate supportive of the need for health care reform that lowers costs, but that is not the direction Congress is going."

The Senate is expected to take action on the bill tomorrow, Saturday. The NAM pledges to continue to work with Congress on behalf of manufacturers and your contact with Senator Sherrod Brown's office is encouraged. 11/20/2009

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Human Resources/Health Care – Bill Tracker

Human Resources, Health Care & Employment Law Legislation

Prepared by: The Ohio Manufacturers' Association Report created on January 28, 2010

HB8 AUTISM (CELESTE, T) To prohibit

health insurers from excluding coverage for specified services for individuals diagnosed with an autism spectrum disorder.

Current Status:


Comments: None HB56 COLORECTAL EXAMINATIONS

(MILLER, E) To require certain health care plans to provide benefits for colorectal examinations and laboratory tests for cancer.

Current


Comments: None HB66 STATE GOVERNMENT EFFICIENCY

COMMISSION (JORDAN, K) To create the State Government Efficiency Commission.

Current


Comments: None HB81 DIABETES (BOYD, B) To require

certain health care policies, contracts, agreements, and plans to provide benefits for equipment, supplies, and medication for the diagnosis, treatment, and management of diabetes and for diabetes self-management education.

Current Status:


Comments: None

HB134 CANCER SCREENING EXAMS (DEBOSE, M) To require certain health care insurers and plans, including the state's Medicaid program, to provide benefits for prostate, colorectal, cervical, and ovarian cancer screening examinations.

Current Status:


Comments: None HB135 PROSTATE CANCER SCREENINGS

(DEBOSE, M) To require certain health care insurers and plans, including the state's Medicaid program, to offer to provide benefits for prostate cancer screening examinations.

Current Status:


Comments: None HB136 OVARIAN CANCER SCREENING

(DEBOSE, M) To require certain health care insurers and plans, including the state's Medicaid program, to offer to provide benefits for ovarian cancer screening examinations.

Current Status:


Comments: None HB146 STATE EMPLOYEE HEALTH

INSURANCE PLAN (HAGAN, R) To allow counties to participate in a state employee health insurance plan sponsored by the Department of Administrative Services.

Current


Comments: None

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HB159 UNIVERSAL HEALTH CARE (SKINDELL, M) To establish and operate the Ohio Health Care Plan to provide universal health care coverage to all Ohio residents.

Current Status:


Comments: None HB256 SMALL BUSINESS HEALTH CARE

(GARDNER, R) To create the Small Business Health Care Affordability Task Force.

Current

Status: 12/8/2009 - House Insurance, (First Hearing)

Comments: None HB310 PROSTHESES (GARLAND, N) To

require health insurers to provide coverage for prostheses.

Current

Status: 12/9/2009 - House Health, (Fourth Hearing)

Comments: None HB332 CONTRACEPTIVE INSURANCE

COVERAGE (STEWART, D) To prohibit sickness and accident insurance policies, public employee benefit plans, and health insuring corporation policies, contracts, and agreements from limiting or excluding coverage for prescsription contraceptive devices and outpatient services related to the provision of such drugs and devices.

Current Status:


Comments: None HCR32 HEALTH CARE REFORM (HAGAN,

R) To request that all the members of the 128th General Assembly of the State of Ohio support the public option as part of national health care reform.

Current Status:

11/10/2009 - Referred to Committee House HealthCare Access and Affordability

Comments: None SB15 HEALTH CARE POLICIES (MILLER,

D) To prohibit discrimination in health care policies, contracts, and agreements in the coverage provided for the diagnosis and treatment of mental illnesses and substance abuse or addiction conditions.

Current

Status: 3/31/2009 - Senate Health, Human Services and Aging, (First Hearing)

Comments: None SB34 HEALTH INSURANCE PROGRAMS

(MILLER, D) To create a health insurance program that allows municipal corporations, small employers, and nonprofit corporations or associations to purchase for their employees the same policies provided to state employees.

Current

Status: 3/31/2009 - Senate Insurance, Commerce and Labor, (First Hearing)

Comments: None SB64 COLORECTAL EXAMINATIONS

(COUGHLIN, K) To require certain health care policies, contracts, agreements, and plans, as well as the state's Medicaid program, to provide benefits for colorectal examinations and laboratory tests for cancer.

Current Status:


Comments: None SB133 HEALTH INSURANCE COVERAGE

(GILLMOR, K) Regarding health insurance coverage for orally administered cancer medications and the procedures insured persons are required or permitted to use in acquiring certain non-self-injectable and compounded medications.

Current Status:


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Comments: None SB134 DEPARTMENT OF HEALTH CARE

ADMINISTRATION (MILLER, R) To create the Department of Health Care Administration; to transfer the Medicaid Program, Childrenâ€™s Health Insurance Program, Childrenâ€™s Buy-In Program, Hospital Care Assurance Program, Disability Medical Assistance Program, Ohioâ€™s Best Rx Program, and Residential State Supplement Program to the new department; to require the new department to create a central pharmaceutical purchasing office; and to make an appropriation.

Current


Comments: None SB138 INSURANCE COVERAGE FOR

CHEMOTHERAPY (MILLER, R) To require certain insurers that provide coverage for cancer chemotherapy treatment to provide coverage for certain prescribed, orally administered anticancer medication on a basis no less

favorable than intravenously administered or injected cancer medications that are covered under the policy.

Current Status:


Comments: None SCR19 SENIORS HEALTH CARE (GRENDELL,

T) To urge the President and the Congress of the United States to protect the rights of seniors when considering proposals for health care reform.

Current Status:

9/29/2009 - Referred to Committee Senate Health, Human Services and Aging

Comments: None

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PUBLIC POLICY REPORT – Tax Policy TO: OMA Government Affairs Committee FROM: Ryan Augsburger, OMA Staff DATE: February 3, 2010SUBJ: TAX POLICY HIGHLIGHTS Overview Following a budget correction made late last year, all eyes are on revenue collection to determine if further corrections will be needed in the biennium. The affect of the budget correction, a “temporary” freeze of the final personal income rate reduction became a politically charged issue, offering a glimpse into possible 2010 campaign messages. Meanwhile more serious budget questions are looming. Renewal of Ohio’s Third Frontier is next on the agenda with statehouse approval likely to be approved this week, sending the economic development bond program to voters in May for approval. 2010 is a gubernatorial election year and that outcome will impact the direction of state tax policy over the next five years or more. Finally, Ohio like other states will be facing large debts for unemployment that will need to be paid down. Should We Expect Tax Increases? No one knows whether state revenue collection will meet, exceed, of fall short of projections over the next two years funded by HB 1 and corrected by HB 318. If revenue falls short, then lawmakers will need to revisit the budget again in a corrections bill which could increase taxes or make draconian cuts. So far revenue is on track with projections. Groups that depend on state revenue are likely to continue advocating for tax hikes. Taxpayer groups like the OMA are advocating for less costly and more efficient government services. Social services advocates were buoyed by several newspaper editorials favoring tax increases. Most tax hike talk has been focused on income tax and sales tax but some have eyed the Commercial Activity Tax paid exclusively by business. The OMA will continue to oppose tax hikes that deter manufacturing competitiveness. While the struggle to correct Ohio’s budget imbalance was anything but calmGovernor Strickland and legislative leaders deserve credit for halting serious consideration of tax increases. A group of House Democrats broke with their leadership and were actively working in support of tax hikes, illustrating many lawmakers preference to raise taxes before making more painful cuts in services. The concept of innovation in government and right-sizing gained little real attention but the OMA continues to advance the concepts. The final personal income tax rate reduction was “temporarily” frozen in the biennial budget last year which left tax rates mostly unchanged and preserved the tax reform package, a top OMA priority. But challenges abound with both Republican and Democrat lawmakers sniping at the reforms. Members are encouraged to talk up the attributes of Ohio’s tax reforms frequently.

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Attacks on Tax Reform The tax reform package has been under attack by other business taxpayers, as well as social groups or spenders. Most frequently targeted is the Commercial Activity Tax (CAT). The OMA has been a steadfast opponent of any legislation or other action that would undermine the broad-base, low-rate principles that describe the Ohio CAT which allowed for the elimination of tangible personal property tax, corporate franchise tax, reduction of personal income tax, and reduced state revenue collection. Unemployment Compensation Like many states, Ohio’s fund to pay unemployment compensation claims was depleted early last year and the state has had to borrow federal funds that will need to be paid back. State law expansions of coverage were included in HB 1 and HB 2. The OMA has been focused against permanent expansions when only temporary federal relief is available. Eventually Ohio employers will be made to repay the federal loans and restore the state fund – look for a premium increase in time. Third Frontier Voter approval (for borrowing money) is needed for renewal and expansion of the Third Frontier. Third Frontier is a targeted economic development program financed with state debt. The initial proposal was $1billion. House leaders paired that figure back to $950M and the Senate reduced funding to $500 million. A conference committee will negotiate differences and may pair it back further. Work must be concluded on the measure by Feb 3 to allow time for certification by the Ohio Secretary of State. Manufacturing has been a target for much of the investment. Supportive member companies are encouraged to engage lawmakers. Campaigns and Elections Tax Competitiveness is emerging as a favorite topic in the Gubernatorial campaigns of Democrat incumbent Ted Strickland who is squaring off against Republican challenger John Kasich, a former Congressman. In recent weeks Governor Strickland has trumpeted his defense of and support for the tax reform package originally enacted by Republican lawmakers. Contrasting messages are coming from the Kasich camp which is focusing largely on ending personal income tax and the state estate tax. Estate Tax Repeal A group calling themselves Americans for Prosperity has emerged to advance and lead a ballot repeal of the state estate tax. The issue would not likely appear earlier than the 2011 ballot. Outlook It is critical to begin to shape policymakers opinions about the willingness to reconsider the roleof government and the need to inject real innovation into government services including local government.

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Tax – Public Policy News

Budget Impasse Resolved

Concluding two months of consideration, the Ohio Senate approved a budget corrections bill pretty much as it was initially proposed by the Governor. House Bill 318 fills an $851 million budget hole mostly by delaying by two years a final 4.2% income tax rate reduction.

The Senate revisions stripped a provision to cut state legislator pay, implemented a new pilot project to evaluate public construction contracting reforms, and adopted an amendment clarifying the ability of school districts to obtain waivers from all-day kindergarten requirements enacted earlier in the year. Five Republican Senators joined with all Democrats to deliver the necessary 17 votes to approve the budget fix.

Watch a replay of the rancorous debate. 12/18/2009

Federal HUBZone Program Improved for Small Businesses in Distressed Communities

The Federal Historically Underutilized Business Zone Program or “HUBZone” Program, administered by the Small Business Administration (“SBA”), has the purpose of increasing employment opportunities, encouraging economic development and investing in distressed areas by giving a 10% price evaluation preference to small businesses, by SBA standards, whose principal offices are located in a HUBZone, if at least 35% of the employees live in any HUBZone area. To see if your operation is in a HUBZone, go to the SBA website. The SBA has recently liberalized the guidelines it will use to determine whether an employee should be counted for purposes of determining whether 35% of the employees reside in a HUBZone. The SBA will look at the “totality of the circumstances” to determine whether an employee should be counted. The new rule clarifies that leased or temporary employees obtained through temporary agencies, professional employee organization arrangements, or union agreements should be counted. An employee must work a minimum of 40 hours per month to be considered.

To apply for certification to participate in the HUBZone Program, the SBA uses an electronic application process. Please direct your inquiries to Barbara A. Duncombe, Attorney, with OMA Connections Partner, Taft Stettinius & Hollister LLP at (937) 228-2838. 12/04/2009

Senate Budget Alternative Apparently Flops for Now

After numerous false-starts Senate Majority Republicans gaveled the Senate Finance Committee to order on Thursday to unveil an alternative budget corrections proposal. Republican senators have made clear they do not favor House Bill 318, which delays for two years the final scheduled 4.2 % reduction in personal income tax rates. The delay was proposed by Governor Strickland to fill a biennial budget shortfall of $851million.

The Senate Republican alternative included nearly thirty new provisions. Included in the proposal are provisions related to drilling for oil and gas in Salt Fork State Park, casino licensure fees, school district report cards, workers' compensation reserves, ROTC high school credits, prison sentencing reforms, a study of privatizing state government functions, a study of

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privatizing workers’ compensation, a study of a state government restructuring plan, and a study of the possible fiscal effects of state government moving to a four-day work week.

Democrats united against the Republican proposal. And, it has been reported, the alternative plan lacks support within the GOP caucus itself. Thus, senators scrubbed plans to pass the bill this week. This will require the body to return in December to try again. 11/19/2009

CPAs Produce Ohio Budget Fix Recommendations

An Ohio Budget Advisory Task Force of the Ohio Society of CPAs this week released a report with tax and budget recommendations for state policymakers. The society applauded government leaders for making “hard decisions to cut costs and operate as efficiently as they deem possible without endangering essential or core services. As a result of these changes, the current biennium budget is approximately $3 billion lower than the 2012-13 biennium.”

“Ohio remains in a position of unsustainable spending,” the CPA group says. “Our state faces a shortfall estimated to be between $4 and $8 billion for the 2012-13 budget.” The group made a series of recommendations “to improve state revenue growth and reduce expenses.” Among the recommendations were agency performance audits, governmental unit consolidation, various possible tax changes to raise revenue, and school district consolidation.

The society found that “(O)f the various immediate remedies available to state government, delaying the last 4.2% of the state income tax decrease for two years is likely the least painful and easiest to implement. But it cannot be the only immediate change Ohio makes.” 11/17/2009

Tax Committee Considers New Audit Requirement

Members of the OMA Tax Policy Committee met yesterday to review current events impacting the tax environment. The link provides the materials reviewed by the committee.

Representatives of the Ohio Attorney General’s Office described the new audit requirement imposed on recipients of economic development incentives. OMA members can learn about compliance by participating in an upcoming December 3rd webinar featuring program administrators in the Attorney General’s Office.

OMA members also heard a presentation by OMA Connections Partner Plante & Moran on the significant tax consequences (Part One) (Part Two) of pending federal health care legislation and shared an online liquidity stress test calculator tool the firm has developed for manufacturers to gauge cash flow stress. 11/13/2009

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Tax – Bill Tracker

Taxation Legislation Prepared by: The Ohio Manufacturers' Association


HB1 BIENNIAL BUDGET (SYKES, V) To make appropriations for the biennium beginning July 1, 2009, and ending June 30, 2011 for the operation of state programs.

Current Status:

7/17/2009 - SIGNED BY GOVERNOR, eff. 7/17/09 appropriations; other sections subject to referendum 10/16/09

Comments: None HB6 MOTION PICTURE PRODUCTION

(PATTEN, M) To authorize refundable nontransferable credits against the corporation franchise tax or income tax for production of motion pictures in Ohio.

Current Status:

3/10/2009 - Referred to Committee Senate Ways and Means and Economic Development

Comments: None HB46 UNEMPLOYMENT COMPENSATION

(UJVAGI, P) To permit persons who quit work to accompany the person's spouse on a military transfer to be eligible for unemployment compensation benefits.

Current Status:


Comments: None HB66 STATE GOVERNMENT EFFICIENCY

COMMISSION (JORDAN, K) To create the State Government Efficiency Commission.

Current


Comments: None

HB117 COMMERCIAL ACTIVITY TAX (JONES, S) To require 30% of commercial activity tax revenue to be used indefinitely for local government purposes.

Current


Comments: None HB123 TAX CREDIT-SCIENCE DEGREE

(GOYAL, J) To grant an income tax credit to individuals who earn degrees in science, technology, engineering, or math-based fields of study and to authorize municipal corporations to grant a credit to individuals qualifying for the state credit.

Current

Status: 5/6/2009 - House Ways and Means, (Second Hearing)

Comments: None HB140 ENTREPRENEURIAL PROJECTS

(GOYAL, J) To permit institutions of higher education to facilitate and assist with entrepreneurial projects for economic development and to authorize the institutions to enter into agreements to induce development of, acquire ownership in, and make or guarantee loans and incur debt to fund the entrepreneurial projects.

Current

Status: 6/24/2009 - House Ways and Means, (Third Hearing)

Comments: None HB144 TAX CREDIT-BACCALAUREATE

DEGREE (GROSSMAN, C) To grant an income tax credit eliminating tax liability for five years for individuals who obtain a baccalaureate degree and who reside in Ohio.

Current


Comments: None

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HB166 TRANSPORTATION INNOVATION AUTHORITIES (CARNEY, J) To authorize the creation of transportation innovation authorities by specified governmental entities and to establish the powers and duties of such authorities.

Current

Status: 1/20/2010 - PASSED BY HOUSE, Vote 72-26

Comments: None HB218 PUBLIC UTILITY TANGIBLE TAX

VALUATION (WINBURN, R) To modify the tax valuation of public utility tangible personal property used to generate electricity from renewable resources.

Current Status:

6/24/2009 - BILL AMENDED, House Ways and Means, (Second Hearing)

Comments: None HB277 INCOME TAX WITHHOLDING

CREDIT (SNITCHLER, T) To authorize a $2,400 income tax withholding credit for an employer that hires and employs a previously unemployed individual.

Current


Comments: None HB284 INCOME TAX RATES (HAGAN, R) To

increase the marginal income tax rate applicable to income in excess of $200,000 to its pre-2005 rate.

Current


Comments: None HB285 SALES TAX EXEMPTIONS (BACON,

K) To provide a three-day period in August and in December each year during which sales of clothing, footwear, school supplies, personal computers and computer-related items, and sporting equipment are exempt from sales and use taxes.

Current


Comments: None

HB286 HOME IMPROVEMENTS-TAX EXEMPTION (FENDE, L) To exempt from real property taxation home improvements greater than $5,000 for five years.

Current


Comments: None HB308 MARGINAL INCOME TAX RATE

(FOLEY, M) To increase the marginal income tax rate applicable to individuals, estates, and trusts with taxable income greater than $200,000.

Current


Comments: None HB318 INCOME TAX FREEZE (SYKES, V) To

postpone for two years the last of five scheduled income tax rate reductions, to create the Construction Reform Demonstration Project, to provide for the granting of a delay in implementing all-day kindergarten, and to make an appropriation.

Current Status:

12/22/2009 - SIGNED BY GOVERNOR, Some sections eff. 12/22/09; others 3/23/10

Comments: None HB326 ESTATE TAX (HOTTINGER, J) To

reduce the estate tax, to authorize townships and municipal corporations, or electors thereof by initiative, to exempt from the estate tax any estate property located in the township or municipal corporation, and to distribute all estate tax revenue originating in a township or municipal corporation that does not exempt property from the tax to the township or municipal corporation.

Current


Comments: None HB328 SMALL BUSINESS PROFITS

(WILLIAMS, S) To authorize an income tax deduction for small business owners' reinvestment of undistributed profits to business property, employee training, or

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research and development.

Current

Status: 12/9/2009 - House Economic Development, (Fifth Hearing)

Comments: None HB329 JOB CREATION/RETENTION

CREDITS (WILLIAMS, S) To include employees working from home as employees employed in the project for purposes of the job creation and retention credits.

Current

Status: 12/9/2009 - House Economic Development, (Fifth Hearing)

Comments: None HB378 MUNICIPAL INCOME TAXATION

(YATES, T) To eliminate the authority of municipal corporations to exempt stock options and nonqualified deferred compensation from municipal income taxation.

Current


Comments: None HB396 STATE BUDGET (BLAIR, T) To prohibit

the Governor from proposing and the General Assembly from enacting a state budget with aggregate general revenue fund appropriations that exceed ninety-seven per cent of the total money received in aggregate revenue for the two most recent fiscal years, to prohibit the proposal and enactment of a state budget containing transfers from the Budget Stabilization Fund in excess of twenty-five per cent of the amount of the Fund, and to eliminate the state appropriation limitation.

Current


Comments: None HB400 PERSONAL INCOME TAX (ADAMS,

J) To phase out the personal income tax over ten years.

Current

Status: 2/2/2010 - House Ways and Means, (Second

Hearing) Comments: None HB401 PROPERTY TAX EXEMPTION

(LUNDY, M) To authorize property tax exemption for municipally owned facilities housing independent professional minor league baseball teams.

Current

Status: 2/2/2010 - House Ways and Means, (Second Hearing)

Comments: None HCR22 INCOME TAX WITHHOLDING

SCHEDULES (MANDEL, J) To memorialize the Congress of the United States, the Secretary of the Treasury, and the Internal Revenue Service to withdraw application of the new federal income tax withholding schedules to prisoners.

Current

Status: 5/6/2009 - Referred to Committee House Aging and Disability Services



Current


Comments: None SB1 BUILDING OHIO JOBS PART II

(HUGHES, J) To implement the additional debt authority for conservation and revitalization programs provided by Section 2q of Article VIII of the Ohio Constitution, to authorize the issuance of that debt, to make new appropriations for the purpose of continuing programs established by Am. Sub. H.B. 554 of the 127th General Assembly, the Bipartisan Job Stimulus Act, and to declare an emergency.

Current


Comments: None

98 of 116

SB9 FILM TAX CREDIT (PATTON, T) To

authorize income tax credits for investments in motion pictures produced in Ohio.

Current


Comments: None SB32 HYBRID VEHICLE PURCHASE

(TURNER, N) To create a nonrefundable tax credit for individuals who purchase a new hybrid vehicle.

Current Status:


Comments: None SB37 TOBACCO TAX (MILLER, D) To

increase the tobacco products excise tax rate and to credit some of the additional revenue to the Tobacco Use Prevention Fund.

Current Status:


Comments: None SB80 ACCOUNTANT-CLIENT PRIVILEGE

(SEITZ, B) To create an accountant-client testimonial privilege.

Current Status:

5/6/2009 - REPORTED OUT, Senate Judiciary - Civil Justice, (Fourth Hearing)

Comments: None SB109 REAL PROPERTY TAXATION (GIBBS,

B) To exempt from real property taxation the value of single-family residential property owned by a developer or builder until the developer or builder transfers possession or title.

Current Status:

6/17/2009 - Senate Ways and Means and Economic Development, (Third Hearing)

Comments: None SB111 PERSONAL PROPERTY TAX LOSSES

(STEWART, J) To make permanent the temporary reimbursements for local government and school district tangible personal property tax losses.

Current Status:

5/6/2009 - Senate Ways and Means and Economic Development, (First Hearing)

Comments: None SB145 EMPLOYER TAX CREDIT FOR

FELONS (MILLER, R) To create a tax credit for wages paid by employers to employees who have been convicted of felonies.

Current Status:


Comments: None SB177 TAX LAW CHANGES (SEITZ, B) To

partially decouple Ohio law from recent tax law changes, and to amend the version of section 5747.01 of the Revised Code that is scheduled to take effect January 1, 2010, to continue the provisions of this act on and after that effective date and to make appropriations.

Current Status:

11/5/2009 - Senate Finance and Financial Institutions, (Second Hearing)

Comments: None SB193 TAX CREDIT FOR HIRING

UNEMPLOYED (GIBBS, B) To authorize a $2,400 income tax withholding credit for an employer that hires and employs a previously unemployed individual.

Current Status:

1/20/2010 - Senate Finance and Financial Institutions, (Second Hearing)

Comments: None SB198 TAX CREDIT FOR CERTAIN

DEGREES (SCHIAVONI, J) To grant an income tax credit to individuals who earn degrees in science, technology, engineering, or math-based fields of study and to authorize municipal

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corporations to grant a credit to individuals qualifying for the state credit.

Current Status:

12/2/2009 - Senate Ways and Means and Economic Development, (First Hearing)

Comments: None SB221 PROPERTY TAX EXEMPTION

(MORANO, S) To authorize property tax exemption for municipally owned facilities housing independent professional minor league baseball teams.

Current

Status: 1/12/2010 - Referred to Committee Senate Ways

and Means and Economic Development

Comments: None SJR1 VETERANS' COMPENSATION

(GRENDELL, T) To provide compensation to veterans of the Persian Gulf, Afghanistan, and Iraq conflicts.

Current

Status: 3/3/2009 - PASSED BY HOUSE, Vote 92-3

Comments: None

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Safety & Workers' Comp - Public Policy Report

PUBLIC POLICY REPORT – SAFETY & WORKERS’ COMP TO: OMA Government Affairs Committee FROM: OMA Staff DATE: February 3, 2010 SUBJ: Safety / Workers’ Comp Update Overview Top issues the OMA is engaged include: the BWC’s restructuring of rate-making and affect on the group rating program, monitoring BWC new product implementation, and safe-guarding the guaranty fund paid by self-insured employers and focusing attention on the need to adopt legislation to structurally drive down costs. Bureau of Workers’ Comp Rate-making revisions affecting state fund employers for the 2009 and future plan years dominated policy activity in 2009. Revision to the group rating program was necessary due to actuarial shortcomings in the incumbent structure. Last autumn, rate reforms affecting group rating, were unanimously approved by the BWC Board of Directors for the 2010 / 2011 year. The stated objective of group reforms is to reduce base rates to enhance competitiveness and reflect the “right rate for the right risk.” The BWC Board acted on October 30 to adopt credibility reduction (from 77% to 65%), with a break-even factor to further true up the discount level to an effective top discount of 51%. For self-insured employers the sour economy and its affect on the auto industry is resulting in bankruptcy filings. When Ohio companies that self insure their workers’ comp program enter bankruptcy, the residual claims can be shed to the workers’ comp system. For this reason, a guaranty fund exists to pay claims; it is a pay as you go system. According to the Deloitte study, the current Self Insured Employers Guaranty Fund (SIEGF) is exposed to greater risk than prudent. An OMA-assembled group of self-insured company risk-managers has met with the BWC on possible solutions for dealing with the financial issues and continues in that dialogue. Since that time, some aggregated claims data has been made available and an ongoing report is envisioned. Recently the BWC has contacted many SI companies to request reserve data so that they may ascertain options for dealing with solvency challenges. See additional materials. Legislative Developments / Outlook The BWC and Industrial Commission budgets (HB 15 and HB 16) were enacted last year. A few other bills are pending:

• SB 4 (Schaffer) mandates performance audits by the state auditor at the BWC, a concept supported among Republican legislators. The OMA has questioned why current audit authority is insufficient and has reminded lawmakers that BWC funds are not state funds. The bill is likely to be voted in the Senate but House action in uncertain.

• HB 259 (Batchelder) to restrict BWC investments. Just gained its first hearing. • HB 249 (Heard) will undo the restrictions on BWC data being used by law firms,

chiropractors, and other third party industries vending services to injured workers. OMA staff met with Representative Heard to share concerns several months ago.

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• SR 118 (Grendell) to study the feasibility of allowing employers the option of using private insurance to cover workers comp obligations. A similar resolution is being considered in the House and the concept of privatization has been mentioned in campaign messaging. The resolution adopted by the Senate (only) and can be convened in the near future.

• SB 213 (Faber) to impose a moratorium on current BWC rate reforms. The OMA testified in opposition due to the rate inequity the bill would maintain and for ignoring actuarial considerations. The Senate passed this legislation on January 26 along party lines.

Aside from these introduced bills, the OMA is working to advance a series of meaningful cost cutting reforms to statutes governing workers’ compensation and we stand ready to advance legislation on the topic. The OMA Safety & Workers’ Comp Committee has identified several costly claims and abuses to the system ripe for improvement. These suggestions have been provided to interested lawmakers, but so far they have not been introduced. We will continue to advance those ideas and members are encouraged to highlight the issue with lawmakers. There is some reason for hope as lawmakers struggle to advance legislation to ease the burden on employers during the worst business recession in over sixty years. Both Republican and Democrat members of the General Assembly have expressed some interest in the OMA in this regard. Industrial Commission The Industrial Commission continues to advance efforts in support of enhanced customer service and is finalizing revision to their strategic plan by March. An interested parties meeting held in December yielded direction for added efficiency around the hearing / docketing process with the goal of minimizing continuances. Changes could be completed by the end the first quarter. Safety A comprehensive update of administrative rules governing state safety regulations was completed last summer. An alert is included in meeting materials detailing an OSHA record keeping deadline.

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THE POLICY POINT: Workers’ Comp Rate ReformOn October 30, 2009, the Ohio Bureau of Workers’ Compensation (BWC) Board of Directors approved rate reforms for the

2010–11 plan year designed to continue progress toward increasing the fairness of premiums paid by Ohio’s employers.

These most recent reforms include (a) lowering the maximum group-rating discount from 77 percent to 65 percent and

(b) modifying the “break even” factor so it applies to group-rated employers on a graduated scale that better aligns each

employer’s premium with the risk the company brings to the system.

As important as these changes are to the restructuring of Ohio’s workers’ compensation rate structure, additional improvements

are needed. The OMA both applauds the BWC for the significant progress that has been achieved in recent years and challenges

Bureau leadership to stay the course with continued reforms needed to enhance benefits for all participants.

RetoolingOHIOA bulletin for leaders on policy issues critical to Ohio manufacturers2009 Volume 6

RetoolingOHIO

inequities in its experience-rating methodology—were consistent with those in a report issued by the Office the Inspector General of Ohio in August 2007 (which noted, among other things that the “staggering” savings enjoyed by group-rated employers had long been “unfairly subsidized” by non-group-rated employers), as well as a number of other third-party studies. At least nine actuarial analyses during the past 20 years concluded that group-rating discounts have not generated adequate premiums to cover claims costs for group-rated employers and that non-group-rated employers have been paying higher rates than warranted in order to close that shortfall.

It was within this context that the BWC developed a master plan in June 2008 that outlined a number of significant reforms designed to bring fairness and equity to group-rated and non-group-rated employers alike. The Deloitte Report, along with comprehensive actuarial data, has served as the blueprint for these reforms.

When the Ohio General Assembly passed House Bill 100 in May 2007, with bipartisan support, the message from lawmakers was crystal clear: No longer would “business as usual” be tolerated at Ohio’s Bureau of Workers’ Compensation. It was a new day with new expectations for how the BWC would go about serving the needs of Ohio’s injured workers and their employers.

Among the changes provided for by House Bill 100 were the following:

• Abolishing the Workers’ Compensation Oversight Commission and replacing it with a newly created Workers’ Compensation Board of Directors

• Directing the Board to “safeguard and maintain” the solvency of the State Insurance Fund

• Directing the Board and the BWC Administrator to “fix and maintain” the lowest possible rate and premium consistent with maintaining a solvent fund and a reasonable surplus

House Bill 100 also required a thorough examination of the Bureau’s governance, processes, programs and rates. In response to that directive, Deloitte Consulting Inc. was engaged in January 2008 to conduct a comprehensive review of BWC operations.

The Deloitte study, which was released in April 2009, identified fairness, equity and solvency problems with the BWC’s group-rating program as priorities for reform. In particular, the report noted the following:

• A significant disparity existed in workers’ compensation rates paid by group-rated employers and non-group-rated employers.

• Non-group-rated employers were subsidizing a portion of group-rated employers’ premiums.

• Group-rated employers’ large premium discounts (up to a maximum of 95 percent) had no actuarial justification.

The findings —and recommendations that the Bureau take action to address

continued inside

An Imperative to Restore Ohioans’ Confidence in the BWC

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2

Group rating was introduced in 1991. It allows employers in similar industries to pool together for experience rating, a method of predicting an employer’s potential for incurring claims losses, used to set its workers’ compensation rates. Group rating has served a useful purpose in helping to improve workplace safety and in getting employers more actively involved in keeping their workers’ compensation costs down. Currently, Ohio has about 90,000 group-rated employers and about 115,000 to 120,000 non- group-rated employers statewide.

The problem with group rating as it has functioned over the past 20 years is pretty straightforward: There has been a lack of alignment between the premiums individual employers pay for workers’

compensation coverage and the cost of the claims they bring to the system. That problem has manifested itself in a number of ways, including a significant “gap” between the premiums paid by group-rated employers and the premiums paid by non-group-related employers. While it was never the intent or design of group rating to produce rate-making practices that would be unfair to any class of employers, that is exactly what evolved over time.

The disparity is clearly apparent, for example, when you look at loss ratio, which is a measure of the relationship between the cost of claims and the premium meant to cover those claims. Group-rated employers’ loss ratios historically have been more than twice as high as those generated by non-group-rated employers. This tells us that

group-rated employers have not been paying sufficient premium to cover the cost of their claims losses. And that has been due largely to the high discounts on premium the group-rating program historically has offered to employers—as high as 95 percent just four years ago before the BWC began to reduce the maximum allowable discount.

In the past, to offset the group-rating discounts, the BWC simply increased the base rate for all employers. Because the Bureau is a revenue neutral entity, the premium shortfall was made up by collecting additional premium from non-group-rated employers. The result was that group-rated employers’ discounts essentially were being subsidized by non-group-rated employers—a subsidy that totaled nearly $300 million dollars in 2008.

Lack of Alignment of Claims Costs with Premium Rate Level

A Closer Look at the Rationale for Rate Reform

StatewideAverage

StatewideAverage

Non-group-ratedEmployers

Group-ratedEmployers

Non-group-ratedEmployers

Group-ratedEmployers

Claims Costs Premium Rate Level

Claims Costs Premium Rate Level

30% higher than state average

costs

BUT 59% higher than state average

premium

20% lower than state average

costs

BUT 41% lower than state average

premium

Historically, non-group-ratedemployers have paid much higher

premiums, relative to the state average,than their claims costs have been,

relative to the state average.

Historically, group-ratedemployers have paid much lower

premiums, relative to the state average,than their claims costs have been,

relative to the state average.

Historically, employers’ workers’ compensation premiums have not aligned with the risk and costs they bring to the system.

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3

Phased-in Reductions in Group Rating’s Maximum Discount

Plan Year Maximum Group Discount

2005-06 95% 2006-07 93% 2007-08 90% 2008-09 85% 2009-10 77% 2010-11 65%

As a result of these reductions in the maximum group-rating discount—spread out over a number

of years to soften the impact on group-rated employers—the historical cost shifting among

employers has been reduced.

Two major focal points for the BWC’s reform efforts have been (a) gradual reductions in the maximum group-rating discount and (b) closing the gap between what group-rated employers and non-group-rated employers pay for workers’ compensation premiums.

Reducing group-rating’s maximum discountMultiple actuarial studies have shown that reducing group-rating’s maximum discount would better align premium with claims costs of individual employers—and improve pricing equity among employers. The BWC began phasing in a reduction of group rating’s maximum discount in the 2006-07 plan year, gradually cutting it from 95 percent to the current maximum of 77 percent (for plan year 2009–10). On October 30, 2009, the BWC Board approved an additional reduction, from 77 percent to 65 percent, effective in the 2010–11 plan year.

As a result of these reductions—spread out over a number of years to soften the impact on group-rated employers—the historical cost shifting among employers has been reduced (though not totally eliminated).

compensation rates. The desired outcomes of these reforms have been to (a) treat all employers fairly and equitably by ensuring that every employer pays a premium based on the risk it brings to the system, (b) protect the stability and solvency of the State Insurance Fund to ensure that the needs of injured workers’ are met, and (c) position Ohio with a competitively priced workers’ compensation system that will support the state’s continuing ability to attract economic development.

The historical group-rating

methodology and experience-rating

system have created substantial

income and political influence

for “third-party administrators”

and group-rating sponsors. Not

surprisingly, those constituencies

have been reluctant to give up

either in the interest of moving

Ohio forward.

The solution was clear and simple: The BWC needed to collect its premium in an equitable manner. And the Bureau needed to set rates for both group-rated and non-group-rated employers at levels that are actuarially sound—i.e., at levels commensurate with the risk these employers present to the system.

The problem with group rating

as it has functioned over the past

20 years is that there has been

a lack of alignment between

the premiums individual employers

pay for workers’ compensation

coverage and the cost of the claims

they bring to the system.

Saying goodbye to politically driven rate-setting

Unfortunately, politics have had a hand in workers’ compensation rates. Despite clear actuarial evidence that reducing group-rating’s maximum discount was needed to ensure fairness and equity, certain groups have been resisting these and other reforms. The historical group-rating methodology and experience-rating system have created substantial income and political influence for “third-party administrators” (TPAs) and group-rating sponsors. Not surprisingly, those constituencies have been reluctant to give up either in the interest of moving Ohio forward.

And yet, despite strong opposition and vigorous lobbying by some TPAs and group-rating sponsors, progress is being made.

Over the past two years, the BWC has approved and implemented a number of welcome reforms to the policies and formulas used to set employers’ workers’

2009 Volume 6105 of 116

OHIORetooling

4

However, that is not the case in Ohio. In 2008, group-rated employers’ rate level was 41 percent lower than the statewide average rate level (compared to claims costs that were just 20 percent lower than average). Non-group-rated employers’ rate level was 59 percent higher than the average statewide rate level (compared to claims costs that were just 30 percent higher than average). These discrepancies clearly illustrate the problem of group-rated employers being subsidized by non-group-related employers.

To help close this gap and achieve better alignment of premium with risk, the BWC created a so-called “break-even factor”—a mechanism for applying an assessment to every group-rated employer to ensure that adequate premium is collected from those employers and to further reduce the unfair subsidization of group-rated employers by non-group-rated employers.

For the 2009–10 plan year, the BWC applied a flat break-even factor across the board on premium rates for all group-rated employers. This, in combination with the reduction of the group-rating maximum discount from 85 percent to 77 percent and other adjustments to the rate-setting methodology, resulted in the following changes:

• Nearly a 25 percent reduction in premium for non-group-rated employers

• A 9.6 percent increase in premium for group-rated employers

• An overall, system-wide reduction in base rates of about 12 percent

For the 2010–11 plan year, the BWC Board approved an important modification to the break-even factor. Instead of a flat assessment applied evenly across the board to all group-related employers regardless of an individual employer’s premium discounts or claims experience, in 2010 the break-even factor will be assessed in a graduated fashion. Employer groups with higher discounts (i.e., those contributing

actuarially sound system, you would expect to see premium rates that reflect the two groups’ respective impact on system costs.

To better align premium with risk,

the BWC created a so-called “break-

even factor”—a mechanism for

applying an assessment to group-rated

employers to ensure adequate premium

is collected from them and to further

reduce the unfair subsidization of

group-rated employers by non-group-

rated employers.

Applying a ”break-even factor” to further narrow the premium gapLowering group rating’s maximum discount has helped to restore a large measure of balance and fairness to worker’s compensation rates, but it has not been enough to completely close the gap between group-rated employers’ premiums and non-group-rated employers’ premiums. Nor has it produced premium rates that are completely aligned with the risk each employer brings to the system.

To better understand the gap, consider that historical claims costs for group-rated employers are about 20 percent lower than the statewide average, and claims costs for non-group-rated employers are about 30 percent higher than the statewide average. In a properly aligned and

Estimated Subsidization of Group-Rated Employers by Non-Group-Rated Employers

July 1, 2008Policy Year

July 1, 2010Policy Year

$295 million

Estimated Subsidization of Group-Rated Employers By Non-Group-Rated Employers

$51 million

Rate reforms implemented by the BWC have helped reduce, but not totally eliminate, the unfair subsidization of group-rated employers by non-group-rated employers.

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5

more to the off balance) will be assessed a higher break-even factor, and groups with lower discounts will be assessed a lower break-even factor.

Overall, the break-even factor for 2010 will be slightly lower, on average, than it is for 2009. More importantly, it will be applied more fairly and equitably. Some TPAs and group sponsors lobbied hard to have the break-even factor abolished, but actuarial analysis indicated that base rates likely would have increased for all employers under such a scenario.

While it’s too early to know for certain the precise impact on rates that the BWC Board’s October 2009 actions will have, overall the change will be revenue neutral.

Restoring fairness and equity to rate-settingWith these latest rate reforms, the BWC has achieved a number of important objectives:

• A rate structure in which premium costs are applied more fairly and equitably among all employers in the system

• A rate structure in which employers pay premiums more closely aligned with the risk and costs they bring to the system

• A system that fully pays for itself

• A system that is more stable and solvent

• Lower base rates that enhance Ohio’s competitive position in the Midwest

Just as critically, Ohio now has a workers’ compensation rate structure that will serve as a solid foundation for additional reforms that will further strengthen the system, better serve injured workers and employers, and make Ohio even more attractive for economic expansion and development.

The OMA has long believed that a professionally and efficiently operating Bureau of Workers’ Compensation is critical to retaining and creating jobs in Ohio. That’s why the OMA was an advocate for House Bill 100, legislation passed in 2007 establishing new models for governance, transparency and accountability at the BWC and also requiring the use of sound actuarial science in the Bureau’s rate-setting. Among other things, HB 100 created a new Board of Directors to serve as the BWC’s governing body and, along with the BWC Administrator, to share fiduciary responsibility for Ohio’s workers’ compensation system.

Under the leadership of the new Board and Administrator, rate reform has been a major focus of work at the Bureau during the last two-plus years, and the number-one accomplishment at the BWC during this time has been bringing greater parity to both group-rated and non-group-rated employer premium rates (the primary focus of this edition of Retooling Ohio). However, the BWC and the Industrial Commission of Ohio (the claims adjudication arm of Ohio’s workers’ compensation system) have been working on multiple additional reforms. Following are selected improvements since 2008.

Selected BWC Improvements

• Launching of MIRA II reserving system that provides more responsive, accurate claims reserves

• Back-to-back rate decreases for private employers (5 percent in 2008, 12 percent in 2009—the first average decreases since 2001)

• An average 25.3 percent rate decrease for non-group-rated private employers

• Two rate decreases for state agencies, universities and university hospitals (10 percent in 2008, 3.75 percent in 2009—their first average decreases since 1999)

• A 5 percent premium rate decrease for public employers

• A 100 percent cap option on premium increases due to an employer’s claims history, to limit extreme cost swings for affected employers

• Beginning a transition to a multi- split experience-rating plan that will take into account the frequency as well as the severity of an employer’s claims, thus improving experience rating accuracy

• Two new insurance options—deductible and group retrospective—designed to lower out-of-pocket costs for employers and improve safety for workers

• Updated inpatient hospital fee schedules for physicians and other medical professionals who provide care for injured workers

• Elimination of redundancies in the alternative dispute resolution process to ensure timely, quality care for injured workers

• Monthly Enterprise Report to provide a transparent record of agency-wide financial and operational performance metrics

• New investment policy statement to strengthen investment returns

• New implementation strategy for diversifying State Insurance Fund fixed-income and equity investments

2009 Volume 6

Rate Reform Just One Dimension of Effort toBuild Operational Excellence Into the BWC

continued on next page

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OHIORetooling

6

• Implemented technological advances that have made it easier to file appeals on the Web and to submit questions to IC’s Customer Service Department

• Implemented a new automated tracking system for customer service

• Implemented new Customer Service and Word Processing Pools to provide a more flexible, efficient way of doing business and managing changing workloads

There is much more to be done, but these many improvements to Ohio’s workers’ compensation system are helping to ensure more equitable and accurate rates and improved services, which in turn will aid Ohio’s efforts to retain existing jobs and attract new investment and additional jobs.

o Consolidated several district offices (Springfield/Dayton, Canton/Akron, Bridgeport/Zanesville/Cambridge, Hamilton/Cincinnati)

o Consolidated office space in IC’s Columbus office, which will save $800,000 annually

o Converted standard telephone service to Voice-Over Internet Protocol telephone service, which is expected to save $865,000 over five years

o Reduced employee overtime and overnight delivery, saving more than $58,000 annually

o Consolidated and streamlined IC’s supply ordering process, which has reduced supply purchases by more than $60,000 annually

• Launched a new Web site that enhances and accelerates customer service

Selected Industrial Commission (IC) Improvements

• Continued IC’s long history of minimal budget increases that have averaged just six-tenths of one percent annually

• Decreased IC workforce by more than 150 employees (over the last several years) while continuing to meet and exceed statutory requirements for timely service

o For example, from the date an appeal was filed to the date of the hearing, first-level hearings averaged 29.5 days, and second-level hearings averaged 27.5 days, both well within the statutorily mandated 45-day time frame.

• Implemented a variety of cost-saving measures that are expected to save IC more than $15 million over the next five years

Why The OMA Supports Rate Reform

The OMA is a provider of workers’ compensation group-rating services. Yet, unlike many other group-rating sponsors, we fully support the BWC’s recent rate reforms. Many have asked why this is so.

The OMA’s mission is to protect and grow manufacturing in Ohio, and we support public policy that improves Ohio’s manufacturing competitiveness. We are fundamentally opposed to government policies in any area that pick winners and losers, or that punish one class of manufacturers to benefit another. Unfortunately, however unintentional, that has been the case with workers’ compensation group rating in our state.

The OMA believes workers’ compensation rates should be driven by actuarial data. And we agree with the many actuarial studies that have concluded that historical group-rating discounts are too high and

cause non-group-rated employers to pay too much premium. That’s why the OMA has supported the BWC’s reengineering of its rate structure—in particular the continued, phased-in reduction of the maximum group-rating discount and the application of a graduated break-even factor to eliminate the continued subsidizing of group-rated employers by non-group-rated employers.

These changes will help ensure that each Ohio employer will pay the right premium for the risk the company brings to the system. They will lower base rates across the whole workers’ compensation system and distribute them more fairly among employers based on actuarial experience. Employers with low claims will enjoy lower rates, while employers will higher claims (and thus greater costs to the system) will pay higher rates. This will bring not just fairness but also stability to the system.

Our bottom line? The OMA is committed to helping to ensure that all businesses pay fair workers’ compensation rates commensurate with the risk they bring to the system, that injured workers receive fair and timely benefits and the support they need for getting back to productive work quickly and safely, and that the state’s workers’ compensation insurance fund remains actuarially sound. Those are good outcomes for Ohio manufacturers‚—and good outcomes for Ohio’s overall economy.

These changes will help ensure

that each Ohio employer will pay

the right premium for the risk the

company brings to the system. This

will bring not just fairness but also

stability to the system.

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7

• Actuarial integrity: Eliminate BWC programs that have no actuarial foundation.

• Managed Care Organization reforms: Study the effectiveness of the Managed Care Organization system in Ohio, including possibly requiring MCOs to unbundle their services and compete on price.

• BWC claims management problems: Improve consistency in delivery against claims management performance standards.

• Rate-making transparency: Develop data and reporting on component costs within premium rates.

• Permanent total disability as retirement benefit: Establish retirement benefit offsets and/or age or number-of-weeks capping.

• Permanent total disability (PTD) multiple applications: Require claimants to show new and changed circumstances when filing for PTD benefits more than once.

• Permanent partial disability transaction costs: Lower transaction costs by allowing telephonic hearings.

• Permanent partial disability impairment standard: Establish impairment standard (no consideration of non-medical factors).

• Permanent partial disability (PPD) multiple applications: Require claimants to show new and changed circumstances when filing for PPD benefits more than once.

• Temporary total disability (TTD): Terminate the compensation paid for TTD as of the date established by the medical evidence establishing maximum medical improvement.

• Temporary total disability: If a claim for workers’ compensation is suspended due to a claimant’s refusal to provide a signed medical release or attend the employer’s medical examination, the claimant forfeits his or her right to benefits during the period of suspension.

• Payment without prejudice: Allow employers to pay compensation and medical bills without losing the right to contest a claim.

Rate reform was the necessary prelude to additional structural reforms at the BWC that are needed to eliminate unnecessary costs within the system and provide enhanced benefits to all Ohio employers and injured workers. We know additional reforms are needed, and there is no reason to delay action on other critical fronts.

The OMA intends to work with its

member companies, the BWC and

the legislature to enact reforms that

will improve processes for injured

workers and employers and continue

to drive system costs down.

The Deloitte study released in January 2009 included a large inventory of recommended system improvements, including a number that will require statutory changes that the Ohio General Assembly will need to take up. The OMA intends to work with its member companies, the BWC and the legislature to enact those reforms that will improve processes for injured workers and employers and continue to drive system costs down. Among the next-phase reform concepts for consideration are the following:

• Rebuttable presumption drug statute: Eliminate the “reasonable suspicion” standard and incorporate the Louisiana Pacific standard of “voluntary abandonment” for benefits.

• Self-Insured Employers’ Guaranty Fund: Solve securitization, claims management and accountability problems.

• Industrial Commission hearing inconsistencies: Require hearings to be recorded for improved consistency in outcomes.

2009 Volume 6

Next Steps in Workers’ Compensation Reform

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33 N. High Street

Columbus, OH 43215-3005

800-662-4463 • 614-224-1012 fax

www.ohiomfg.com

The mission of The Ohio

Manufacturers’ Association is to

protect and grow Ohio manufacturing.

Through the OMA, manufacturers

and manufacturing stakeholders work

directly with the members of the Ohio

General Assembly, state regulatory

agencies, the judiciary community

and statewide media with the sole

focus of improving business conditions

for manufacturers in Ohio.

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Workers’ Comp – Public Policy News

BWC Board Approves Rules for New Large Deductible Program

Last week the Bureau of Workers’ Compensation (BWC) board of directors approved the final rules for the new large deductible program. This program extends the current deductible program, which permits deductibles up to $10,000, by adding four more levels: $25,000, $50,000, $100,000 and $200,000. By accepting a deductible and its future cost risk, qualified employers can reduce their premiums, in some cases up to 60% or more.

OMA has communicated with its members who buy workers’ comp services through the association and which are potentially eligible to participate in the new large deducible program. OMA intends to run a new analysis report for its customers indicating how much they might save under the various deductible levels, including the stop loss option which limits financial risk. The BWC’s deadline to enroll in the program is April 30.

If your state fund company’s 2008-09 premium was at least $62,500 and you want to know more about this program, contact OMA’s Greg Vergamini or Sam Heydinger. 01/29/2010

Senate Passes Workers’ Comp Rate-setting Bill

The Ohio Senate this week passed Senate Bill 213, which would restrict the rate-setting responsibilities of the Bureau of Workers’ Compensation (BWC) for two years. The bill, sponsored by Senator Keith Faber (R-Celina), prohibits the BWC from adjusting the rate-making credibility tables or making any changes to the group-rating program for two years. Essentially, if the bill were to become law, the basic rate-setting function of the BWC would be frozen for the period.

The bill also requires the BWC to conduct an actuarial study of the rate-making system. Ten other actuarial studies have been conducted since the inception of group-rating. Five were done during the Voinovich administration (1990, 1991, 1993, 1994, 1995). Four were produced in the Taft administration (2001, 2004, 2006, 2007). The most recent was mandated by House Bill 100 in 2008 and was released in 2009 during the Strickland administration.

These studies were produced by six different actuarial firms. All came to the same conclusion: the rate-making function of the BWC is broken, base rates are unnecessarily high, and the historic structure of the group-rating program causes unfair and economically damaging variations in rates from year to year.

Senate Bill 213 now goes to the House for consideration. 01/29/2010

Trial Lawyers and Chiropractors Masquerade as Journalists

A few years ago the Ohio General Assembly wisely shut off access to personal information on injured workers at the Bureau of Workers’ Compensation. This OMA-supported action protected the privacy of the workers. It also protected the workers and their employers from unscrupulous marketing practices of those that feed off the injured.

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Now the trial bar and chiropractors are attempting to pass legislation, House Bill 249, sponsored by Rep. Tracy Heard (D-Columbus), which would twist the definition of “journalist” to include them. Why? Journalists are allowed access to the information.

The trial lawyers and the chiropractors say they are only trying to help injured workers. The OMA opposes the bill. 01/22/2010

BWC Draws Up New Drug Free Program Concept

The Bureau of Workers’ Compensation Division of Safety & Hygiene, under the leadership of its superintendent, Abe Tarawneh, is using stakeholder input to draw up a new program concept to replace the existing Drug-Free Workplace Program and Drug-Free EZ Program for small employers.

Goals of the new program are simplification of design and better incorporation of safety elements. The proposed program will be called the Drug Free Safety Program. The BWC board will hear a first read of the new program rules this quarter; however, no implementation date has yet been announced.

The new program is proposed to have two levels, basic and advanced, instead of the three-tiered current program. There will be no expiration of the program for employers; today, employers can participate for only four years. Employers would be able to exit and re-enter the new program. To increase safety performance, participating employers would complete online safety assessments and online accident analyses. An 11-panel drug test would replace the current 5-panel drug test, and only those employers choosing the advanced level of the program would need to randomly drug test.

The BWC has not yet worked with its actuarial firm, Deloitte, to determine any appropriate discounts for the new program.

OMA staff members, Lisa Schaaf and Jay Kemo, have been part of the stakeholder input team. 01/14/2010

Get New BWC Safety Leader's Discussion Guide Online

Annually, the Bureau of Workers' Compensation (BWC) Division of Safety & Hygiene publishes the Safety Leader's Discussion Guide. The Guide offers monthly discussion suggestions that are written in a style that encourages participation and interaction; includes additional resources.

2010 Discussion Guide topics include: electrical safety, three-point technique, ICE – In Case of Emergency, how did it happen?, employee safety orientations, reacting to a worker’s emergency, handling chemicals safely and material handling (push/pull).

The 2010 Discussion Guide is available at the BWC website. 12/27/2009

All BWC Computer Systems Go Down for Maintenance Sunday, January 17

All BWC computer systems will be unavailable Sunday, January 17 due to scheduled maintenance. This outage may cause a delay in delivery of e-mails you may send to the agency; emails are scheduled to deliver to BWC on Tuesday, January 19. Here’s a partial list of

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systems and applications that will be unavailable on Sunday: BWC e-mail, ohiobwc.com, 1-800-OHIO-BWC and all applications on BWC’s network. 01/07/2010

OMA’s Davis Testifies to Protect Rate Reform

OMA Director for Workers’ Compensation Services Dennis Davis testified before the Senate Insurance Committee against Senate Bill 213 (Faber, R-Celina). The bill would prohibit, for two years, the Bureau of Workers’ Compensation (BWC) from implementing key aspects of rate reforms, which are stopping the massive annual cost-shifting from group-rated employers to those employers not in groups. The bill would also mandate another study of the issue.

Davis testified that the freeze in rate reform would cause an increase in base rates, making Ohio’s costs even less competitive. He also stated: “We don’t need another study; we need action to improve the system. We also need to hold all responsible parties accountable for those improvements.” 12/10/2009

OMA Seeks to Educate Audiences about BWC Rate Reform

OMA has produced a new publication to establish a perspective about why the Bureau of Workers’ Compensation (BWC) rate reforms were necessary and what benefits they bring to Ohio’s state fund employers. OMA’s ReTooling is being distributed this week to the Ohio legislature and to OMA members via this Leadership Briefing.

The OMA believes that workers’ comp rates, prior to reform, punished some classes of employers, namely those not in group-rating. OMA has agreed with the unanimous findings of commercial actuarial study after study that confirmed the rate-making was flawed. The rate reforms will help ensure the each Ohio employer will pay the right premium for the risk it brings to the system.

OMA holds that with rate reform fundamentally battened down, the BWC, legislature and stakeholders should get busy addressing the next wave of reform concepts that will reduce costs and improve outcomes for injured workers and employers. A summary of potential reform concepts are found in the ReTooling. 12/3/2009

BWC has Marketing Requirements for Workers’ Compensation Group Rating Proposals

This year the Ohio Bureau of Workers’ Compensation has cracked down on group-rating marketing practices to increase truth and reliability in group-rating offers. According to this document on www.ohiobwc.com, all group rating offers must reflect the effective group discount. The effective group discount is the actual discount after the BWC breakeven factor is applied. The BWC imposes a breakeven factor on all group-rating groups in order to collect sufficient premium from group-rated employers. The highest gross discount available for the plan year that starts July 1, 2010 is 65% and the highest effective discount is 51%. If you receive an offer higher than 51%, the BWC wants to know about it.

Further, only legitimate organizations that exist for purposes other than offering group-rating can sponsor group-rating groups. This is the list of sponsors the BWC has approved. Please note that The Ohio Manufacturers' Association is listed as Ohio Mfgs Assoc and we have asked the BWC to spell out our name so there is no mistaking that the OMA is a certified group-rating sponsor.

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OMA members who are currently group-rating members of the OMA should watch their mail for their 2010/11 offers which were mailed this week. 11/17/2009

BWC Board Hears First Reading of Large Deductible Program Rules

This week the Bureau of Workers’ Compensation (BWC) board heard the proposed rules for a large deductible program that BWC plans to roll out July 1, 2010. Earlier this year the BWC launched a small deductible option for employers that has deductibles from $500 to $10,000. The large deductible option will have deductible options of $25,000, $50,000, $100,000 and $200,000.

Underwriting criteria will apply and, unlike the smaller deductible program, employers that choose this option will not be eligible for a group-rating plan. Premium discounts for choosing the large deductible option have not been set but are purported to be in the range of 15% - 57% depending on the deductible selected, increasing as the deductible increases. Lower premium discounts will apply if the employer chooses an optional stop loss feature of three times the deductible selected.

The next and ostensibly final reading of the rules will occur at the December BWC board meeting and then OMA can begin modeling the program for interested members. OMA is now in the process of modeling the small deductible program for members and will have analyses ready for distribution early in 2010. Contact OMA’s Dennis Davis with questions. 11/18/2009

Senate Votes to Study Private Workers’ Comp Insurance

The Senate this week voted to pass Senate Resolution 118 to “create the Competitive Workers' Compensation Task Force to review the feasibility of allowing employers the option to obtain private insurance to insure their obligations under the workers' compensation system of Ohio.” As a Senate resolution, the measure is effective without action by the House of Representatives or the Governor.

This task force will be composed of 19 members, four of whom will be employers, who pay for the insurance. Other members include two claimants’ representatives, two lawyers, a third-party administrator, a managed care organization and two insurance company representatives.

The resolution allows the task force to contract with a firm with “insurance actuarial evaluation experience.” It is unclear how the firm will be paid. It is clear, however, that a credible study of this matter is in the best interest of Ohio, as it has been informally debated for years.

The resolution requires the task force to produce a report by June 30, 2010. 11/19/2009

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Workers’ Comp – Bill Tracker

Workers' Compensation Legislation Prepared by: The Ohio Manufacturers' Association


HB15 WORKERS' COMPENSATION BUDGET (SYKES, V) To create the Deputy Inspector General for the Bureau of Workers' Compensation and Industrial Commission Fund; to make other changes to the Workers' Compensation Law; to make appropriations for the Bureau of Workers' Compensation for the biennium beginning July 1, 2009, and ending June 30, 2011; and to provide authorization and conditions for the operation of the Bureau's programs.

Current Status:

6/30/2009 - SIGNED BY GOVERNOR, Eff. 6/30/2009 (some secs. different dates)

Comments: None HB16 INDUSTRIAL COMMISSION

BUDGET-INTERIM BUDGET (SYKES, V) To make appropriations for the Industrial Commission for the biennium beginning July 1, 2009, and ending June 30, 2011, and to provide authorization and conditions for the operation of Commission programs.

Current Status:

6/30/2009 - SIGNED BY GOVERNOR, Eff. 6/30/2009 (some secs. different dates)

Comments: None HB249 WORKERS' COMPENSATION

RECORDS (HEARD, T) To clarify the method by which journalists may request Bureau of Workers' Compensation records for multiple claimants, add to the definition of "journalist," and allow a person to solicit authority from a claimant or employer to represent the claimant or employer in any claim or appeal filed with the Bureau.

Current

Status: 1/19/2010 - House Civil and Commercial Law, (Second Hearing)

Comments: None HB259 WORKERS' COMPENSATION

INVESTMENTS (BATCHELDER, W) To specify the classes of investments in which the Administrator of Workers' Compensation may invest the funds specified in the Workers' Compensation Law and to require the Administrator to have criminal records checks conducted for employees of investment consultants with whom the Administrator contracts to facilitate the investment of those funds.

Current

Status: 1/13/2010 - House Insurance, (First Hearing)



Current


Comments: None SB213 WORKERS' COMPENSATION

PREMIUMS (FABER, K) To require the Administrator of Workers' Compensation to make specified changes concerning workers' compensation premium rates.

Current


Comments: None SR118 COMPETITIVE WORKERS'

COMPENSATION TASK FORCE (GRENDELL, T) To create the Competitive Workers' Compensation Task Force to review the feasibility of allowing employers the option to obtain private insurance to insure their obligation under the workers' compensation system of Ohio.

Current 11/18/2009 - ADOPTED

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Status: BY SENATE, Adopted, as amended; Vote 19-14

Comments: None

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Documents

OMA Government Affairs Committee -02-03-2010 mtls. · 2013-06-18 · OMA/Ohio Dept. of Agriculture Webinar: New Ohio Department of Agriculture Rules for Food Processing Establishments