June 27, 2023

Ohio Chamber Pushes Back Against Bill Forcing Unionization at Ohio Refineries

The Ohio Chamber of Commerce joined with Ohio’s refineries and many other statewide business groups last week to oppose House Bill 205, legislation aggressively pushed by organized labor which would, in the words of Laborers’ Local 329, “secure our market share” on refinery construction jobs. 

House Bill 205 purports to boost worker safety on construction projects at Ohio’s refineries, but instead is a clever backdoor attempt at forced unionization, creating government-mandated quotas of union workers at a time when Ohio already faces crippling workforce shortages. Even more troubling, the bill would establish an appalling precedent of government inserting itself into the hiring practices of private businesses, dictating not just whom they must employ but also the ratios of employees among that company’s staff.

HB 205 arbitrarily limits the pool of eligible individuals who can work on contracted construction jobs at Ohio’s oil refineries to only those in registered apprenticeship programs or who qualify as either a class A or class B journeyperson. Furthermore, the bill mandates that refineries must adhere to strict worker proportionality, which places additional hurdles to building an adequate workforce at Ohio’s four oil refineries. By giving preferential treatment to workers having completed an apprenticeship program over workers with years’ worth of experience, these government-imposed pre-qualifications will substantially reduce the labor market in this industry and add yet another hurdle businesses must overcome to address their workforce challenges.

The bill also contains a host of new tracking and reporting requirements for refineries regarding the nature of this workforce and the details of contracted work, particularly troubling when formerly confidential information would now be subject to public records requests.

As noted by SVP Rick Carfagna in his opposition testimony, Ohio’s refinery facilities have long been, and remain, highly regulated at the local, state, and federal levels. The industry has made significant investments in programs, training, standards and practices, and equipment reliability that have improved occupational and process safety performance. The U.S. Bureau of Labor Statistics reports the nonfatal workplace injury and illness incidence rates for Ohio’s petroleum refineries in 2021 amounted to 2.7 cases per 100 full-time workers. By contrast, forging and stamping was at 3.0 cases per 100, food manufacturing in Ohio was at 3.2 cases per 100, animal slaughtering and processing was at 3.4 cases per 100, and motor vehicle manufacturing was at 3.7 cases per 100.

Despite the third hearing on HB 205 in the House Homeland Security Committee being the first opportunity for opponents to testify, the committee ended the proceeding with a vote on the measure of 10-0 in favor. Prior to the committee hearing, the Ohio House took the unusual step of referring the bill to the House floor for a full vote the same day. House Bill 205 passed out of the House with a vote of 64 yes votes, 30 no votes, and 5 members not voting. The bill was particularly divisive among the 67-member House GOP caucus, with all 30 no votes coming from Republican members and the remaining 36 voting in favor.

Shortly before the House floor vote, Ohio Chamber of Commerce CEO Steve Stivers released the following statement regarding House Bill 205:

“The Ohio Chamber of Commerce stands in opposition to House Bill 205 because the legislation is nothing more than a backdoor attempt at forced unionization.   At a time when Ohio already faces crippling workforce shortages, HB 205 instead holds back extensively trained and qualified non-union employees from gainful employment at Ohio’s refineries. Disruption of refinery operations by our own state government through quotas and burdensome compliance costs does nothing to improve worker safety, however it will result in higher energy prices passed down to consumers. When it comes to costs at the gas pump, our state leaders should be providing Ohioans with relief, not more pain.”

House Bill 205 now heads to the Ohio Senate for consideration, where it awaits committee referral.

Business Community Testifies on Vicarious Liability Legislation

Through the Ohio Alliance for Civil Justice, the Ohio Chamber submitted interested party testimony on legislation that alters the procedure for filing vicarious liability lawsuits. The legislation, HB 179, had a fourth hearing before the House Civil Justice Committee last week where one of the bill’s joint-sponsors, Rep. Adam Mathews, offered an amendment that was ultimately adopted before the bill received a favorable vote from the committee. The Ohio Chamber worked directly with Rep. Mathews on the amendment and support its inclusion in the bill because it assures the legislation cannot be used by judges to modify longstanding requirements of vicarious liability and find businesses liable for acts of their agents without first finding the agent liable.

With the amendment added to HB 179, the Ohio Chamber is an interested party in the legislation but will continue working with legislators to fine tune the bill to limit any potential negative impacts of the procedural changes.

Energy Update

Last Tuesday, the Ohio Chamber held a lunch & learn event on the developments in the large-scale solar industry in partner with the Utility Scale Solar Energy Coalition of Ohio (USSEC). The event included an opening conversation on the veteran workforce in the solar industry. Veterans account for 11% of the workforce. That conversation was followed by two panels. The first panel discussed the economic impact of solar projects, including future forecasts from the PILOT as compared to traditional tax payments and the benefits for local communities. The second panel focused on land use and development practices, including Agrivoltaics (planting between or under panels), pollinators, farm styled fencing and soil health. The audience, which included a number of legislators and their aides, learned that there are 30 acres of soybeans currently growing under solar panels here in Ohio. The audience included a number of legislators and their aides.

House Bill 197 received sponsor testimony and will return in the fall session for additional hearings. HB 197 would establish a pilot program to develop community solar projects. Ohio University has completed a study of the economic impact of these projects, which General Counsel Tony Long can share via email (tlong@ohiochamber.com). According to sponsor testimony, if HB 197 is enacted, it would make Ohio the 22 state to allow 3 party community solar development.

House Bill 79 (Energy Efficiency) was modified and then reported out of committee. The bill now goes to the Rules & Refence Committee and awaits a date for a full House vote. A change from the amendments clarifies that the customer incentives apply only to the funds utilities actually collect for those programs. These programs are opt-out for residential customers if a utility seeks to begin a program with approval from the PUCO.

Senate Bill 102 (Utility Rate Making Overhaul) received its third hearing last week. Several opponents, including 3 utilities, testified against the measure. This measure continues the work of the legislature on the subject of utility ratemaking cases and regulation. Last session, House Bill 317 attempted to tackle the same subject matter. This version would require new rate cases every five years, require the PUCO to decide the case within a year of the filing, and cap riders at 4% of base distribution revenues, among other changes.

Tax Policy

Although a quiet week on individual measures, there are several priorities of the Ohio Chamber in HB 33 (Operating Budget). A letter on these priorities was delivered to the Conference Committee this past week. The letter included a request to retain the residential credit for SALT cap deduction for taxes paid to other states, a request to retain the 2022 start date for the municipal income tax net profit safe harbor apportionment formula, a request to restore the House language that allowed the full deduction of bonus depreciation expensing, and a request to retain the sports gaming at 10%. The current language proposes doubling the tax to 20%. The conference committee will work to fashion a final budget proposal this week for a vote by both chambers.