Portage County Legal News

Disaster relief bill advances in Senate, raises constitutional question

KEITH ARNOLD
Special to the Legal News
Published: December 11, 2017

A House bill devised to make it easier for out-of-state businesses and employees to come to the aid of Ohioans during a disaster landed a first hearing recently before Senate committee members, who presumably will have to address a constitutional defect.

Rep. Scott Ryan, a Newark Republican, offered sponsor testimony of his proposed Disaster Relief Act, which would exempt non-Ohio businesses and qualifying employees from certain taxes and laws with respect to disaster work on critical infrastructure in the Buckeye State during a declared disaster.

"This legislation will allow communications companies, utilities, and other infrastructure companies to rapidly deploy resources and out-of-state personnel without being hindered and delayed by regulatory and tax paperwork," Ryan told senators seated for the Ways and Means Committee. "This is meant to accelerate restoration efforts and get the state's citizens, businesses and infrastructure on the road to recovery at a faster rate."

Filed as House Bill 133, would amend the public services law, state law and tax law, in relation to thresholds for establishing presence, residency or doing business in the state for out-of-state employees and businesses that temporarily provide resources and personnel in the state during a state of emergency.

"HB 133 gives these businesses a greater ability to focus on quickly responding to the needs of the state and its citizens during an emergency," the lawmaker added. "At least 26 other states have enacted similar legislation."

The bill passed the House of Representatives unanimously in late summer.

Subsequent to clearing the House, the Ohio Legislative Service Commission noted a constitutional defect with provisions of the state's home-rule authority for municipalities.

"Under Article XVIII, Section 3 of the Ohio Constitution, municipal corporations 'have the authority to exercise all powers of local self-government and adopt and enforce within their limits such local police, sanitary, and other similar regulations, as are not in conflict with general laws,'" commission analyst Maura McClelland wrote. "Accordingly, a statute enacted by the General Assembly that purports to limit that constitutional authority, such as by preempting any local occupational licensing requirements, raises questions under this provision.

McClelland cited the Supreme Court of Ohio's holding in Canton v. State, 2002-Ohio-2005, 95 Ohio St.3d 149.

During a hearing before the House Public Utilities Committee, Kent Scarrett, executive director of the Ohio Municipal League, expressed the concerns of the association's constituency.

"The language in HB 133 is not only a preemption upon municipalities' local licensing authority, but it would also create what we believe are unanticipated consequences that would hurt our local businesses in the long term," Scarrett wrote.

He added that, of course, the Municipal League wants to see municipal utilities and communications infrastructure repaired after a natural disaster as soon as possible.

"... No other entity (however) is better situated to ensure the safety and quality of repairs to local infrastructure and businesses than our local governments," Scarrett continued. "Barring municipalities from this licensing could compromise the health, safety and welfare of the communities in which these providers are operating."

He wrote that he believed HB 133 additionally would give out-of-state disaster relief services providers a distinct advantage over in-state providers by making it easier for out-of-state businesses to underbid in-state businesses.

"The bill leaves several unanswered questions that concern Ohio's municipalities," Scarrett concluded. "How realistic will it be to monitor the individual employees of a business to determine if they qualify? What if an employee worked for another company in the previous year in Ohio and was not part of a disaster relief project?

"Will a list of employees and their Social Security numbers be provided from the business to review if there was withholding in the prior year for any of them? We ask this legislation not be passed before these concerns can be addressed."

His request for further study failed to influence the House committee's unanimous vote of members present.

A second Senate committee hearing of HB 133 had not been scheduled at the time of publication.

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