10/22/2014

Legislative Update

Prepared by John T. McGough

Enacted Legislation

H.B. 483 (Effective 09/15/14)

OFDA successfully passes legislation to clarify Ohio Courtesy Card law

A provision in H.B. 481 that went into effect on March 22, 2013 authorized funeral directors from bordering states that have enacted a similar law, to obtain a Courtesy Card Permit that allows them to cross a state border into Ohio for the limited purposes of body removal, filing death certificates, and supervising funerals and interments.

In mid-April of this year, the OFDA became aware that funeral directors from Kentucky had been attempting to apply for a courtesy card permit in Ohio and the Ohio Embalmers and Funeral Directors Board was refusing to approve the permits under the belief that Ohio’s courtesy card permit language is unclear and may require out of state funeral directors to meet additional Ohio licensure requirements.  This was never intended and the State Board agreed, but they thought the law needed to be clarified.

In response, OFDA prepared legislative language to make it clear that a Courtesy Card Permit is not a license under Ohio law so the State Board can start approving courtesy card permit applications as was originally intended by H.B. 481.

Since the Legislature was going to go into recess in early June until after the November election (with maybe only a few session days in between) the OFDA worked successfully to include the clarifying courtesy card permit language as an amendment into H.B. 483 which was budget-related legislation that had passed the House and was having hearings in the Senate Finance Committee. The sponsor of our amendment was Senator Tom Patton who is the Senate Majority Floor Leader and a member of the Senate Finance Committee. Governor Kasich signed H.B. 483 into Ohio law on June 16, 2014 with an effective date of 09/15/2014.

H.B. 95 – Stillbirth Certificates

(Effective June 6, 2014)

H.B. 95 makes slight changes to current law relating to stillbirths. First, it retains the right of a parent to request the issuance of a certificate that recognizes the delivery of a stillborn infant but the law now prohibits the certificate from containing the word “stillborn” or “stillbirth”.

The law also requires that when a burial permit is issued “for the product of human conception of at least 20 weeks of gestation that suffers a fetal death, the local health department registrar shall inform the parent(s) listed on the death certificate, or provisional death certificate of the option of applying for a certificate that recognizes the delivery of a stillborn infant.

Pending Legislation

Municipal Income Tax Reform (H.B. 5)

Municipal Tax Reform Legislation

Why Ohio Needs to Reform:

• Ohio has the most complicated local income tax system in U.S.
• Ohio is one of only 10 states that tax both individuals and businesses.
• Ohio is the only state where each city/village can make its own rules and regulations –businesses must keep track of and comply with as many as 600 different sets of tax ordinances.
• It’s particularly burdensome for businesses whose employees work/travel in multiple cities.
• The high cost of complying hinders economic growth.
• Compliance often costs business more than they owe in tax.
• International site selectors say Ohio’s municipal tax system is the second highest negative factor when it comes to attracting new employers.

H.B. 5 – passed Ohio House on 11/13/2013

Pending in Senate Finance Committee

Key provisions in House-passed version of H.B. 5

• Treatment of Net Operating Losses

o   Requires all municipalities to permit taxpayers to deduct net operating losses (NOLs) and to carry excess NOLs forward for deduction for 5 subsequent years. (Current law allows municipalities to do this but does not require it).

o   Establishes a Municipal Income Tax Net Operating Loss Review Committee which is to evaluate and quantify the potential financial impact to municipalities of requiring allowance of NOLs to be carried forward for 5 years. The committee is to issue a report of its findings and recommendations to address any revenue shortfalls, which may include using supplemental funds from the Local Government Fund by May 1, 2015. After issuing the report the Committee ceases to exist.

• Casual Entrant Rule

o   Increases from 12 to 20 days in a calendar year that a non-resident may work in a municipality without incurring liability for the municipality’s income tax.

o   For businesses with annual gross income of $500,000 or more, the 20 day exemption applies only if: (1) the employee’s “principal place of work” is not located within the municipality where the employee worked on the 20 or fewer days; (2) the employer does not withhold taxes on the compensation for the municipality where the employee worked 20 or fewer days, but instead only for the municipality where the employee’s principal workplace is located; and (3) the employee does not request a refund of taxes withheld to the municipality where the employee’s principal workplace is located.

o   For businesses with under $500,000 in annual gross income, employers shall remit taxes on all non-resident employees only to the municipality where the employer has a fixed location.

o   Allocation of employee time – current law provides no guidance as to how to count when an employee has spent a “day” within a municipality. H.B. 5 states that an employee spends a day in a municipality only if, on that day, the employee spent more time working in that municipality than in any other municipality. So the practical effect is that an employee may work a “day” in no more than one municipality.

Update on Funeral Profession Fee increases to fund

Two State Board Employees to focus on Preneed

• Fee Increases enacted in FY 2014-2015 State Budget as follows:

o   Initial/biennial renewal of funeral director/embalmer licenses – from $140 to $150

o   Initial/biennial renewal license for funeral home facility from $250 to $350

o   Initial/biennial renewal license for embalming facility/crematory facility from $200 to $350

o   Issuance of duplicate license – from $4 to $10

• Fee increases projected to produce $215,099 over 2-year biennium.

• What happened – Fee increases took place but increased appropriation never occurred.

• OFDA working with Legislature and Kasich Administration to increase State Board’s appropriation by $215,099 (to reflect the fee increases) effective next fiscal year which starts on July 1, 2015.