Ohio Budget bill includes many non-budget changes for ag

By: Peggy Kirk Hall, Attorney and Director, Agricultural & Resource Law Program

While Ohio’s “budget bill” is important for funding our agencies and programs, it always contain many provisions that aren’t at all related to the state’s budget. The budget bill provides an opportunity for legislators to throw in interests of all sorts, which tends to add challenges to reaching consensus. Though many worried about having the current budget approved in time, Ohio lawmakers did pass the two-year budget bill, H.B. 33, just ahead of its deadline on June 30.

We’ve been digging through the bill’s 6,000+ pages of budget and non-budget provisions and the Governor’s 44-item veto. Some of the provisions are proposals we’ve seen in other legislation that made their way into the budget bill. Not included in the final package were Senate-approved changes to the Current Agricultural Use Valuation law that would have adjusted reappraisals in 2023, 2024, and 2025. Here’s a summary of items we found of relevance to Ohio agriculture, not including the agency funding allocations. We also summarize three vetoes by the Governor that pulled items from the budget bill.

Township zoning referenda – ORC 519.12 and 519.25

There is now a higher requirement for the number of signatures needed on a petition to subject a township zoning amendment to referendum by placing it on the ballot for a public vote. The bill increased the number of signatures from 8% to 15% of the total vote cast in the township for all candidates for governor in the most recent general election for governor.

Legume inoculators – ORC 907.27 and 907.32

The bill eliminated Ohio’s annual Legume Inoculator’s License requirement for businesses and individuals that apply inoculants to seed. All other requirements for legume inoculants remain unchanged.

Agricultural commodity handlers–Grain Indemnity Fund – ORC 926.18

Ohio’s agricultural commodity handlers law provides reimbursement to a grain depositor if there is a bankruptcy or failure of the grain elevator. The bill revises several parts of the law that provide a depositor with 100% coverage of a grain deposit when there’s a failure:

If a commodity handler’s license is suspended and the handler failed to pay for the commodities by the date suspension occurred, the new law increases the number of days by which the commodities had to be priced prior to the suspension– from 30 to 45 days.
If a commodity handler’s license is suspended and there is a deferred payment agreement between the depositor and the handler, the new law:
Requires that the deferred payment agreement must be signed by both parties.
Increases the number of days by which the commodities had to be priced prior to the suspension — from 90 to 365 days; and
Increases the number of days by which payment for the commodity must be made pursuant to the deferred payment agreement — from 90 days to 365 days following the date of delivery.
Requiring 100% coverage when commodities were delivered and marketed under a delayed price agreement up to two years prior to a handler’s license suspension. The delivery date marked on the receipt tickets determine the two-year period. The bill also states that the Grain Indemnity Fund has no liability if the delayed price agreement was entered into more than two years prior to the commodity handler’s license suspension.
Two circumstances for 100% of loss coverage from the Grain Indemnity Fund remain unchanged by the bill: when the commodities were stored under a bailment agreement and when payment was tendered but subsequently denied. For all other losses, the new law will reduce the fund payment to 75% of the loss. Current law covers 100% of the first $10,000 of the loss and 80% of the remaining dollar value of that loss.

Office of the Migrant Agricultural Ombudsperson – ORC 3733

Current law establishes an Office of the Migrant Agricultural Ombudsperson under the authority of the Ohio Department of Jobs and Family Services (ODJFS), but the new law eliminates the Ombudsperson. Instead, a currently existing State Monitor Advocate in ODJFS will be responsible for migrant issues and needs, such as collecting and reviewing data on living and working conditions, receiving complaints and alleged violations, conducting on-site reviews, monitoring the provisions of employment services, and connecting job seekers to employers through the Agricultural Recruitment System.

Commercial driver’s license waiver for farm-related service industries – ORC 4506.24

The bill increases the validity period for the CDL waiver for farm-related service industries. Current law limits the total number of days a person may operate under the farm-related service industries waiver to 180, and the bill extends that period to 210 days per calendar year. The bill also allows online renewal of CDL licenses, revises several requirements for third-party CDL skills test examiners, and establishes several prohibitions and penalties for fraudulent acts related to CDL testing.

Income tax – ORC 5747.02

The law includes changes to Ohio’s income tax tables. For the 2023 taxable year, the bill combines the two lowest tax brackets into one and reduces the marginal tax rates. For tax year 2024, the bill further combines tax brackets and reduces the highest tax rate. The Legislative Service Commission provides this chart that summarizes the changes:

Drainage assessment fund – ORC 6133.15

A designated fund for holding funding from the legislature to cover the state’s share of any assessments for drainage improvement projects will be abolished.  The change removes only the fund and does not remove the duty of the state to pay its share of any drainage improvement assessments.

Urban Farmer Youth Initiative Pilot Program

A new Urban Farmer Youth Initiative Pilot Program will provide relevant programming and support on farming and agriculture to youth living in urban areas. The bill directs the Chancellor of Higher Education to collaborate with Ohio State University Extension and Central State University Extension to offer programming in two to four Ohio counties and to partner with local entities.  Funds may also be used to expand programming to urban youth by existing agricultural organizations.

Vetoes by Governor DeWine

The Governor vetoed the following three ag-related items and offered explanations of his reasoning for the vetoes.

Save our Farmland and Protect our National Security Act

The Governor removed a provision that required the Secretary of State to compile a registry of individuals, business, organizations, and governments that constitute a threat to the agricultural production or military defense of Ohio or the U.S. and prohibited anyone on the registry from acquiring agricultural land or acquiring real property located within 25 miles of a military base or land under the jurisdiction of the armed forces. The Act also required property acquired in violation of the bill to escheat to the state, to be sold at public auction.  The Governor stated that while “restricting ownership of Ohio farmland protects Ohio’s rich agricultural tradition from adverse interests,” the bill could create unintended economic development consequences by including other non-agricultural property in the foreign ownership restriction.

Auctioneer laws

Governor DeWine vetoed several revisions to Ohio auctioneer law, stating that the revisions removed consumer protections recently enacted in HB 321, which went into effect in 2022.  The primary purpose of the revisions was to further exempt internet auctions, including auctions that involve sales of real or personal property through an auction mediation company platform.

Commercial Activity Tax exclusions

The budget bill would have increased the $150,000 threshold for filers subject to the Commercial Activity Tax (CAT) to $3 million in 2024 and $6 million in 2025.  The Governor pointed out that the language in the bill was unclear, stating that “a technical veto is needed to clarify that the stated excluded amounts represent yearly tax periods,” and also noted that the veto would close an unintended potential loophole, open to exploitation through tax planning.

Visit this page on the Ohio General Assembly’s website for more information on the budget bill, HB 33.

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