S Corporation Tax Break; Oil and Gas Zoning Grab Still in Forefront.

While the General Assembly is in recess, there are still a few hearings scheduled as committees try to prepare bills for the two-day session that will occur November 12 and 13. Those days may be the last session days for this calendar year.

HB 127, though not scheduled for a hearing next week, is still in play for the November session. Through an amendment added to that bill in the House, the state would further erode a municipality’s ability to tax the ordinary income of its residents if that income comes from an S Corporation. Though the original intent of the bill was to help municipalities in their efforts to redevelop abandoned property, something the League supports, this amendment does great damage to that effort. As it is currently written, the cost of paying a tax lien on such property is eliminated, while the income tax dollars needed for other development costs is diminished through a tax break to those who receive income from an S Corporation.

HB 127 is currently in the Senate Ways and Means Committee and is expected to come out of that committee for a Senate floor vote during the November session. Please, continue to let your member(s) of the Senate and members of the Senate Ways and Means Committee know that the S Corporation amendment is bad policy in a time when most municipalities are in very difficult financial circumstances. In a time, when the state found that it couldn’t balance its own budget without raising taxes, it is unfair to turn around in HB 127 and give a tax break on the backs of municipal governments. It is an action that screams, "We, the state need more money, but municipalities can do their job with even fewer dollars than they are getting today."

HB 278 is to be heard next week in the House Energy and Environment Committee (5^th hearing, proponents, opponents and interested parties). HB 278 is the legislation that would try to eliminate all municipal regulations, including zoning, regarding the drilling of oil and gas wells. Under the provisions of the bill, the Ohio Department of Natural Resources would become the all-knowing bureaucracy that would decide where in your municipality oil and gas wells could be inserted and what regulations they would operate under. We assume the strip-mining industry will be at the doors of the General Assembly next asking for the same comfortable one-stop shopping regulation.

The hearing on HB 278 will be held Wednesday, November 5 in House Hearing Room 122 at 10:30 a.m.