Legislative News

AIA Ohio Payment Assurance Legislation Receives Hearing – Feb. 23, 2021

Senators Vernon Sykes (left) and Jay Hottinger offer sponsor testimony for SB49 to the Senate Judiciary Committee

Senate Bill 49, AIA Ohio’s Payment Assurance Legislation (PAL), received its first hearing by the Senate Judiciary Committee on Feb. 23. The bill’s joint sponsors Sen. Vernon Sykes (D, Akron) and Sen. Jay Hottinger (R, Newark) testified that the bill would create a design professional lien right modeled after the brokers’ lien.

If passed, this legislation would establish a payment assurance program for registered design professionals. The design professional lien will:

  • Apply only to commercial property, and not to residential property;
  • Apply only to private work, and not to public construction; and
  • Will be subordinate to any real estate mortgage previously filed.

A proponent hearing has yet to be scheduled. Click here to read the full testimony of Senators Sykes and Hottinger.

Important Notice for K-12 from BBS

The Board of Building Standards has updated its BBS Memo regarding the moratorium for storm shelters in Group E occupancies to include the following:

September 2020 Update: HB 164 adopted by the Ohio General Assembly on June 11, 2020, amended R.C. 3781.1010 to extend the storm shelter moratorium to November 30, 2022.

The updated Memo can be found here. 

If you have questions related to information contained in the Memo, please contact the Board’s technical staff at 614-644-2613 or at bbs@com.state.oh.us.

AIA Responds to Trump Administration Rollback of Fair Housing Policy

HUD rollback of Fair Housing policy puts communities at risk

Housing inequities in American communities will be exacerbated by dismantled rule.

WASHINGTON – July 29, 2020 – The American Institute of Architects (AIA) condemns the recently announced rollback of the Affirmatively Furthering Fair Housing (AFFH) provision (2015) of the 1968 Fair Housing Act.

Under the Affirmatively Furthering Fair Housing (AFFH) rule, communities receiving federal subsidies were required to analyze racial segregation in housing and then submit plans to reverse such trends. The AFFH rule had been weakened in recent years. In 2018, the Department of Housing and Urban Development (HUD) eliminated the Local Government Assessment Tool, which was designed to help local governments combat racial segregation in subsidized housing. However, the Administration’s latest actions have officially nullified the original AFFH rule and its intent.

“AIA strongly opposes the Administration’s dismantling of this critical rule,” said AIA EVP/Chief Executive Officer Robert Ivy, FAIA. “Our federal government should confront the legacy of discriminatory housing policies as intended in the Fair Housing Act of 1968, not shrink away from the responsibility of ensuring our communities are equitable. At such a critical moment in time for addressing racial inequity, it’s clear we need to do more, not less, to provide equitable opportunity to all Americans, especially for a basic human need such as shelter.”

AIA has had a longstanding commitment to equitable communities, including advocating for affordable housing initiatives. On Jan. 24, AIA 2020 President Jane Frederick, FAIA, and AIA 2019 President Bill Bates, FAIA, met with the HUD assistant secretary for policy development and research to share AIA’s affordable housing priorities. Additionally, AIA provided comment on Jan. 31—following a request from HUD leadership—regarding the Administration’s call to eliminate regulatory barriers to affordable housing.

Learn more about AIA’s advocacy efforts online.

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Supreme Court Overturns Local Hiring Preferences

September 24, 2019

In a landmark decision, today the Ohio Supreme Court held that R.C. 9.75 is a lawful enactment of the Ohio General Assembly, in prohibiting local hiring preferences in construction projects.
That section provides that “No public authority shall require a contractor, as part of a prequalification process or for the construction of a specific public improvement or the provision of professional design services for that public improvement, to employ as laborers a certain number or percentage of individuals who reside within the defined geographic area or service area of the public authority.”
The City of Cleveland Ordinance Chapter 188 nevertheless remained on the books, requiring that a minimum of 20 percent of the total construction work hours be performed by Cleveland residents, and that no fewer than 4 percent of those resident work hours be performed by low-income persons.
Cleveland sued the State of Ohio claiming that its Ordinance prevailed over the state prohibition under Constitutional “home rule” authority.
The Eighth District Court of Appeals (Cuyahoga County) found the state statute unconstitutional, ruling that, “It is readily apparent that R.C. 9.75 is no more than an attempt to preempt powers of local self-government and to restrict the contract terms between public authorities and contractors who choose to bid on local public improvement contracts.”
The State of Ohio appealed. On June 29, 2018, AIA Ohio filed an amicus curiae (“friend of the court”) brief with the Ohio Supreme Court in support of the State of Ohio, to prevent local residency quota requirements in public works construction. 
The decision and briefing of the other parties are available on the Supreme Court’s website at: https://www.supremecourt.ohio.gov/Clerk/ecms/#/caseinfo/2018/0097

Opponents of Occupational Licensing Bill Testify (SB 255)

The Senate Oversight and Reform Committee took testimony April 11 on SB255 which would require standing committees of the General Assembly to periodically review occupational licensing boards regarding their sunset, and to require the Legislative Service Commission to perform assessments of occupational licensing bills and state regulation of occupations.

AIA Ohio is working with interested parties on an amendment to the bill that would emphasize the level of national licensure and the substantial equivalency of the license.  Sen. McColley has indicated he might accept such an amendment to section 101.63(c)(6).

During the Committee hearing, Joseph Warino, representing the Ohio Society of Professional Engineers (OSPE), testified as an opponent to the bill. He said the bill would “threaten licensing of engineers in the state.

“Adopting a policy of ‘least restrictive regulation’ guidelines for registration could only serve to reduce the knowledge and experience necessary, resulting in substandard qualified engineers to preserve the health and safety of Ohio’s residents.”

Warino added, “The practice of professional licensure has worked well over many years and it should remain in place.”

Also testifying on the bill as an interested party was David Pritchard of the American Society of Civil Engineers, who said the current system of licensure within Ohio is working well and has since 1933.

The committee also received written testimony from Wade Baer of the Ohio Auctioneers Association and Keith Kerns of the Ohio Optometric Association.

Tax Expenditure Review Committee Commences Hearings

The Tax Expenditure Review Committee that eventually will concern itself with Ohio’s Historic Preservation Tax Credit held its first meeting April 11 with an examination of $4.03 billion in forfeited tax revenues, the lion’s share consumed by the sales and use tax exemption on tangible personal property whose buyers manufacture other tangible personal property for sale.

Sen. Scott Oelslager (R-Canton), chairman of the committee, checked off the first three items on the agenda with no testimony: sales to churches and certain other nonprofit organizations, with state revenue losses estimated at $600.1 million and county and transit authority losses at $147 million in FY18; sales by churches and certain types of nonprofit organizations, with state losses of $45.7 million and county and transit authority losses of $11.2 million in the current fiscal year; and sales to the state, any of its political subdivisions and to certain other states, with state losses of $122.9 million and county and transit authority losses of $30.1 million in FY18.

The tangible personal property (TPP) item — with estimated state losses of $2.21 billion and county and transit authority losses of $541.6 million in FY18 — drew testimony from five witnesses.

Senior Project Director Wendy Patton of Policy Matters Ohio presented testimony on tax expenditures as a whole, urging members to take a harder look at the exemptions they review. “HB9 outlined specific criteria for the committee to consider in deciding whether each expenditure should be continued, repealed, modified or scheduled for further review.”

“In conducting your review, the committee should look into more detailed questions ,” said Patton. “For instance, in examining whether a tax break ‘promotes or would promote growth or retention of high-wage jobs in the state,’ one of the factors permitted under the law, the committee should request data on wage levels for employees at recipient companies, and whether they are paid enough that they and the family members do not need public benefits such as Medicaid and food aid. In considering possible modifications, the committee should consider whether guard rails should be added to ensure that recipients are paying taxes, complying with state laws and providing information that allows for appropriate review of the tax break.”

Patton broadened her focus to address the larger impact of tax expenditures relative to tax reductions.

“The state has cut funding for libraries and local governments and underfunded early childhood education, public transit and other services relative to need. Yet tax expenditures — which have every bit as much impact on the state budget — have continued to grow and proliferate. Beyond a review of specific tax expenditures, the Tax Expenditure Review Committee should look to cut back on tax breaks,” she said. “As the tax counsel to the Ohio Manufacturers’ Association told the 2020 Tax Policy Commission two years ago, ‘To preserve the integrity of the broad tax base and ensure fairness, credits and exemptions should be reduced and discouraged.'”

Responding to Patton the LSC economist was asked for examples of expenditures created with related metrics. LSC staff responded that the commission would have to research the question for “specific goals” linked to certain expenditures that might be subject to some form of measurement.

Public Design Contract Indemnity Bill Heard (HB554)

The House Civil Service Committee took testimony April 12 regarding HB554 that would regulate the use of indemnity provisions in professional design contracts related to public improvements.

Rep. Seitz provided sponsor testimony on the bill, which he said would clarify the indemnity provisions in contracts entered into by professional design firms.

“The fundamental purpose of this bill is fairness. Right now, design professionals are being asked to defend public entities against third party claims before there is a determination that the design professional has committed error. The costs of such defense can be staggering and are beyond the control of the design professional. Just like the presumption of innocence, a design professional should not be presumed responsible for a cost without a determination of wrong-doing,” Seitz said.

“Moreover, this bill is entirely necessary in order to prevent the use of overbroad indemnity clauses to end-run our hard-won tort reform statutes that created a statute of repose,” he continued. “Under today’s law, an architect or engineer is not liable in tort for negligence for more than 10 years after completion of the public improvement. We made this decision — and it has been upheld by the Ohio Supreme Court — to make clear that injuries occurring later than that are due to defective maintenance, not defective design. However, when local governments use overbroad indemnity clauses, they resurrect the architect-engineer’s liability beyond the 10-year statute of repose as a matter of contract law, thus frustrating the public policy of our state.”