Legislative Wrap-Up
June 2010
Economic Recovery Must Be Top Priority
A strong economic recovery must be our top priority. That means using the power of government to stimulate an economic resurgence, not expanding government’s regulatory function in a way that undermines a recovery. Finding that balance is not a new challenge. But, today it’s playing out at all levels of government during one of the worst economic recessions in recent history and in an environment fueled by an unprecedented level of division among our citizens.
As you read the following summary of the Ohio Chamber’s recent activities, you will see this same theme unfolding at the Ohio Statehouse. It’s time to let our government officials know that revitalizing our state’s economy must become the number one item on their agenda. It is the Ohio Chamber’s top priority and we urge you to help us get the message out.
Here’s some of what we’ve achieved this year and a brief glimpse of the challenges that lie ahead.
Energy and Environment
Ohio’s oil and gas industry is a significant contributor to the state’s economy. These independent producers employ nearly 5,000 Ohioans in exploration and production activities. Regulated by the Ohio Department of Natural Resources, the industry has more than 60,000 wells in operation that annually produce over 5 million barrels of crude oil and 88 billion cubic feet of natural gas.
This year the Ohio Chamber was pleased to partner with the Ohio Oil and Gas Association to support common-sense legislation that takes a balanced and responsible approach to address present-day health, safety and social issues related to oil and gas development. With overwhelming support from both the Senate and House, SB 165 was signed by Governor Strickland on March 31. It significantly strengthens protections for public safety and the environment while ensuring a robust and viable industry.
In stark contrast to the balanced regulatory approach taken by SB 165, U.S. EPA is barreling ahead with its unreasonable attempt to regulate greenhouse gases (GHG) under the Clean Air Act (CAA). U.S. EPA’s proposal would create a costly new regulatory scheme for all energy users. The CAA does not authorize the use of cap-and-trade or other market-based approaches that could help defray the cost of compliance, nor does U.S. EPA have the authority to arbitrarily increase the CAA’s defined thresholds as proposed. Nonetheless, the agency is not backing down. If successful, this inflexible and cost-prohibitive maneuver will create a high level of uncertainty for businesses of all sizes and will surely spur legal challenges.
On May 26th the Ohio Chamber testified on behalf of a large industry coalition in support of SCR 27, an Ohio Senate resolution urging Congress to enact legislation that would prohibit U.S. EPA from regulating GHG emissions under the CAA. In addition, the Chamber has been actively involved in supporting federal legislation that would also deter this line of attack.
In another battle with U.S. EPA, the Ohio Chamber is fighting its proposal to increase the ozone standard for the second time in two years. For Ohio, this change would be significant. More than one-third of the state will be unable to meet the new standard and face more stringent air pollution control requirements and extensive permitting restrictions on new or expanding businesses. The Ohio Chamber strongly believes U.S. EPA should be helping states comply with the existing ozone standard rather than imposing a new one.
Health Care
Despite unprecedented challenges for the U.S. economy, Congress and the President have been engaged in a divisive war over reforming the health care system that culminated in passage of a massive reform package in March. Ohio Chamber members aggressively campaigned against the bill, generating more than 10,000 letters to members of Congress and physically taking our message right to Capitol Hill.
The final product, the Patient Protection and Affordable Care Act (PPACA), may provide some protections but it is far from affordable. It will add millions of people to the health insurance rolls while requiring business and industry to pay for the added coverage. The legislation does little to reign in the underlying cost of health care, ultimately adding more people to an already unsustainable system. Now that the PPACA has passed, the Ohio Chamber is focusing its efforts on ensuring that the implementing rules are as business friendly as possible.
Implementing the sweeping changes required by the PPACA present significant challenges for both the state and federal governments. One aspect of the legislation, for example, allows states to require additional coverage benefits above the levels the PPACA mandates. But doing so creates conflicts between federal and state law that can be confusing and costly for employers and insurers to understand and administer. That’s why the Ohio Chamber’s long standing opposition to state-imposed insurance mandates for specific treatments will become even more important than ever. During this legislative session alone, the Ohio House has already passed two mandates, and countless more are being debated in legislative committees. The Ohio Chamber aggressively lobbies against all mandates because they are funded mostly on the backs of those who can least afford to pay for additional coverage – small businesses.
Human Resources & Benefits
Ohio employers face an onslaught of bills introduced this legislative session that would create new protected classes of employees and job applicants ranging from smokers, to victims of domestic violence and stalking, to employees who are lactating. If enacted, these bills will mean more lawsuits against Ohio employers based on state anti-discrimination laws. The Ohio Chamber has worked hard to weaken or prevent these costly legislative proposals from being enacted.
For example, HB 167, as introduced, would make victims of domestic violence and stalking a new protected class. Employers would be prohibited from refusing to hire such victims or discharging them based on their protected status. Although this bill passed the House, the Ohio Chamber is working diligently with the Senate committee chairman on an amendment that removes the protected class specifications. If the bill sees further action, the Chamber’s amendment will prevent yet another protected class from being added to Ohio’s discrimination laws and save Ohio employers from more costly discrimination law suits.
Legal & Business Regulation
In recent years, Ohio businesses have experienced a much improved and more predictable legal climate. This is the result of a more conservative Ohio Supreme Court majority and the enactment of significant civil justice reforms. But much work lies ahead to improve the state’s regulatory climate and protect our hard-won legal reforms.
Two pending bills are adamantly opposed by the Ohio Chamber because they would significantly damage the state’s legal climate. HB 427 would increase the cost of settling class action lawsuits for Ohio-based businesses. The bill mandates that unclaimed class action awards in both judgments and settlements be given to a charity of the judge’s choosing rather than remaining with the defendant.
HB 361 would also drive up legal costs for Ohio businesses. It would prevent a defendant from letting a jury know the discounted amount accepted by a medical provider for the plaintiff’s medical treatment. Instead, the jury would only be told the full, undiscounted amount of the medical bill and, as a result, would be more likely to increase the amount of the award. Strong grassroots campaigns by Ohio Chamber members against HB 361 and HB 427 have kept both bills bottled up in House committees.
On the regulatory front, the Ohio Chamber was instrumental in helping to forge a compromise on SB 204. This bill was passed by the House and Senate and imposes new controls on many aspects of the business relationship between auto manufacturers and their dealer networks. As introduced, it clearly jeopardized Ohio manufacturing jobs. The Chamber opposed three contentious provisions that would have significantly increased an auto manufacturer’s cost of doing business and endangered future investment. The Chamber’s successful advocacy on this bill shows its solid commitment to the manufacturing sector of our state’s economy.
The Ohio Chamber has also steadfastly worked to protect another industry – the short-term, small loan industry – from damaging government regulation that would cost Ohio more jobs. These companies, many of them small businesses, provide vital access to short-term cash loans for many Ohioans who can’t meet more stringent credit eligibility requirements. The Ohio Chamber is opposing legislation imposing new industry restrictions, HB 486, because it would drive these lenders out of business. The job loss that would result from passage of this bill is clear. After passage of a 2008 referendum on prior legislation regulating this industry, nearly half of the 1,600 lenders operating in Ohio closed their businesses and more than 2,000 Ohioans lost their jobs.
On a positive front, the Ohio Chamber strongly supported legislation that will modernize the regulation of telephone companies. SB 162, passed by the House and Senate, will result in a more competitive communications marketplace, as well as stimulate greater infrastructure investments and job creation.
Small Business
The Ohio Chamber and its Small Business Council (OSBC) recognize that Ohio’s regulatory structure is crucial to attracting new businesses and creating and retaining jobs. Because of this, the Chamber and OSBC have been very supportive of efforts to streamline the state’s regulatory climate, including two bills that are working their way through the legislature. SB 3 and HB 230 take different approaches to regulatory reform, but both contain important provisions that will ease the difficulty small businesses face when complying with state regulations and ensure that new regulations do not disproportionately impact small businesses. The Ohio Chamber and OSBC will continue to encourage the legislature to work out the differences between SB 3 and HB 230 and enact the primary provisions of both bills before concluding the current legislative session.
Workers’ Compensation
Ohio’s workers’ compensation system was originally established as a no-fault insurance system that would make sure employees receive compensation for workplace injuries without the need to sue their employer. However, over time, courts have allowed employees to collect from the workers’ compensation system, as well as sue their employers for injuries that were “intentionally” caused on the job. Unfortunately for employers, efforts by the General Assembly to restrict these workers’ compensation “intentional tort” suits were consistently found to be unconstitutional by the Ohio Supreme Court.
However, on March 23rd of this year the Ohio Supreme Court issued two decisions that upheld the legislature’s latest attempt to limit intentional tort suits for workplace injuries. The Ohio Chamber filed friend of the court briefs in both cases. The Court agreed with the Chamber and held that the statute limiting intentional tort actions for workplace injuries is constitutional. These decisions should go a long way toward reducing lawsuits brought against employers for workplace injuries.
Election Victories
Leading up to May’s primary election, the Ohio Chamber endorsed and actively advocated for two statewide ballot initiatives. The first renewed the Third Frontier Program, Ohio’s extremely successful technology-based economic development program. It passed with over 61 percent of the vote. The second authorized the relocation of a previously-approved Columbus casino. It received 68 percent of the vote. The Ohio Chamber utilized its ever-growing grassroots network of local chambers and businesses to turn-out-the-vote for both of these job creating issues.
Additionally, the Ohio Chamber weighed in on nine legislative primaries on behalf of the candidate in each race who best represented business issues. In seven of those races, including two contested Ohio Senate seats, the Chamber’s advocacy has well positioned the candidates going into the November election.
But, the big political news of the year came from the U.S. Supreme Court. In a landmark decision, the Court affirmed the right of a corporation to use corporate dollars to fund advertisements supporting or opposing a political candidate. The Court’s decision in Citizens United v. Federal Election Commission, opens the door for full participation in the political process by Ohio corporations. Although it is still illegal in Ohio to give corporate money directly to candidates, it can be used to pay for advertisements that expressly advocate for the election or defeat of a candidate. Such independent expenditures cannot, however, be coordinated with a candidate, campaign committee or political party.
So the November 2010 election cycle is certain to bring tremendous excitement along with new opportunities for corporate involvement. The Ohio Chamber will be front and center in advocating for the election of candidates who put a strong economy and business climate at the top of their list of priorities.
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