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Bill would provide grants for small, medium-sized manufacturers

Special to the Legal News

Published: July 11, 2024

Legislation pending in the Ohio House of Representatives would establish a grant program to support the modernization and growth of small and medium-sized manufacturers throughout the state.
The Manufacturing Technologies Assistance Grant Program, or MTAP, calls for an appropriation of $12 million from the Department of Development for the 2025 fiscal year to provide assistance grants in the amount of $150,000 each to eligible small and medium-sized manufacturers to increase sales, create jobs and generate cost savings through technological innovation, workforce training and improved management practices, according to House Bill 435.
“As the world modernizes and technology becomes increasingly more essential, Ohio manufacturers need to invest in new equipment that will allow them to modernize their production processes,” Rep. Nick Santucci, R-Howland Township, said during a recent Finance Committee hearing. “Some smaller manufacturing companies may struggle to fund the purchase of the new or more advanced manufacturing technology that would allow them to continue to be competitive in the industry. House Bill 435 would provide support to these companies.”
Santucci, a sponsor of the bill, said the program comes at a crucial time as employers struggle with persistent workforce shortages.
“These grants provide essential support to manufacturers by enabling them to automate repetitive tasks and upskill employees so they can adapt to evolving demands and circumstances,” the lawmaker said. “This program would also catalyze economic growth and innovation by providing smaller companies with the means to facilitate upgrades, including robot integration and Enterprise Resource Planning system modernization, allowing them to expand operations and meet increased demand.”
According to analysis of the bill, half of the funds in the program would be available to eligible companies that employ 50 or fewer full-time workers, while the other half would be available to manufacturers that employ 51 to 500 full-time workers.
The bill stipulates that an eligible manufacturer:
• Manufactures, processes, assembles or refines goods at a facility located in Ohio;
• Has operated as a manufacturer in Ohio for at least three years before the application date;
• For three years before the application date, has derived at least 51 percent of the company’s gross revenue from the sale of the manufactured goods;
• As of the application date, employs not more than 500 full-time employees at one or more locations; and
• Demonstrates an ability to provide matching funds from private sources equal to the requested grant amount.
Additionally, an eligible manufacturer must be in compliance with all federal, state and local requirements applicable to the manufacturing business––including tax payments and code enforcement––and has no outstanding tax or other liabilities owed to Ohio and is not in bankruptcy.
HB 435’s other sponsor, Rep. Steve Demetriou, R-Bainbridge Township, told committee members that Iowa and Indiana have seen success with the model.
“Iowa recently dedicated another $2 million to their Technology Investment Program using funding derived from the federal American Rescue Plan Act,” he said. “Indiana’s program, launched in 2020, has awarded at least $22.8 million to support $190.4 million in projects in 66 counties.”
Santucci said 72 percent of the projects funded by the program in Indiana have supported businesses with fewer than 100 employees, while 79 percent the of grant recipients have been businesses that have operated for more than a decade.
“The workforce in Indiana has also benefitted, as companies that have taken advantage of the program to implement manufacturing technologies in their businesses have added an average of five new jobs each,” Santucci added.
HB 435 stipulates that an eligible manufacturer must obtain an assessment of the proposed project from the Department of Development’s Ohio Manufacturing Extension Partnership before applying for such a grant.
“Considering the competitive national landscape and Ohio’s long history and culture of successful manufacturing businesses, we have a great opportunity to create an environment to organically grow businesses that already call Ohio home,” Demetriou said.
Republican Reps. Brian Lorenz of Powell, Andrea White of Kettering and Josh Williams of Sylvania co-sponsor the bill.
The Ohio Chamber of Commerce and Ohio Manufacturers’ Association previously backed the measure before it was omitted from the budget bill approved earlier this session.
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