Home > Regions > North America > Ohio Statehouse Update: Week in Review — November 18, 2011

Ohio Statehouse Update: Week in Review — November 18, 2011

1.   Energy committees consider securitization legislation

The House Public Utilities Committee met on November 16, 2011 to hear sponsor testimony on House Bill 364, legislation establishing a framework to allow an electric distribution company to issue phase-in recovery bonds that would replace its current use of higher-interest debt. The bill’s sponsors, Representatives Kristina Roegner (R- Hudson) and Mike Duffey (R- Columbus) said the bill would lower electric bills for consumers. Rep. Duffey said the securitization of deferred fuel costs has the potential to reduce the typical AEP residential customer’s bill by $25 per year from 2013-2018.

The Senate Energy and Public Utilities Committee also met this week to hear proponent testimony for Senate Bill 248, companion legislation to House Bill 364. It was the second hearing for the bill, sponsored by Senator Troy Balderson (R- Zanesville). Renee Hawkins, managing director of corporate finance for American Electric Power told the committee the legislation would save ratepayers money because securitization of a utility’s assets would result in lower interest rates that would be repaid over a longer period of time than traditional regulatory assets recovery. David Boehm testified on behalf of the Ohio Energy Group, an organization of large energy intensive industrial corporations, saying the bill would mitigate the impact of what would otherwise be a sudden and significant increase in rates for consumers. He said his group “wholeheartedly supports the bill.”

2.   Senate committee hears tax expenditure presentations

The Senate Ways and Means Committee held its second oversight hearing for tax expenditures on November 17, 2011. The committee first heard historical background on tax expenditures from Deputy Tax Commissioner Frederick Church. Christine Schmenk, director of the Department of Development, also provided testimony on what she believes is the importance of the expenditures to stimulate economic development. Director Schmenk called the expenditures ‘tools’ necessary to incentivize companies to consider locating in Ohio. Without them, she said, businesses would be inclined to pass-over Ohio for surrounding states that offer more aggressive incentives.

The committee previously heard testimony from the Buckeye Institute, the Center for Community Solutions and Greater Ohio. The organizations revisited their three-part proposal submitted during budget process. The proposal presented a list of tax expenditures that the think tanks recommend and should be considered for immediate closure. Secondly, the group suggested the legislature apply a sunset provision to all tax expenditures and create a Joint Tax Expenditure Review Committee that would review existing and proposed tax expenditures. Finally, the proposal suggested the creation of a bipartisan State and Local Tax Study Commission to review the framework of state and local taxation in the state.

3.   People on the move

Aristotle Hutras, director of the Ohio Retirement Study Council, announced his resignation this week after 22 years with the council. Hutras, well-known around Capitol Square as an authority on Ohio’s pension systems, lead the council in assisting the state legislature, governor and other public officials in the formation of public pension policy. A search committee has been formed to find his replacement. Resumes could be accepted as soon as next month.

Three members of the Ohio House of Representatives are moving on. Two legislators won mayoral races earlier in the month, both running unopposed in the general election.

  • Representative Timothy DeGeeter (D- Parma) will step down from his seat representing the 15th House District in January to take office as Mayor of Parma.
  • Representative Richard Hollington (R- Hunting Valley) will also leave the legislature in January, resigning from his seat in the 98th House District. Hollington will take office as the Mayor of the Village of Hunting Valley.
  • Representative Todd McKenney (R- New Franklin) has been appointed by Governor Kasich to the Summit County Probate Court. He resigned his 34th House District seat this week, serving just under a year in the lower chamber.

Appointment processes have yet to be announced to replace the departing legislators. The Democratic Caucus will name a replacement for Representative DeGeeter, while the Republican Caucus will decide successors for Representatives Hollington and McKenney.

For more information, please contact:

Michael Caputo
(non-attorney professional)
216.348.5770
mcaputo@mcdonaldhopkins.com

Rebecca M. Kuhns
(non-attorney professional)
614.458.0043
rkuhns@mcdonaldhopkins.com

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