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What's New: Advocacy

Ohio Budget Bill Enacted with Surety Issues

Tuesday, August 27, 2019  

Ohio Budget Bill Enacted with Surety Issues

Ohio’s budget bill, HB 166, includes clarifications that SFAA and Ohio Insurance Institute (OII) sought concerning an increase to the bond threshold for the Ohio Turnpike Commission (Commission) projects from $150,000 to $500,000 to ensure it only applies to goods and not construction. The new law requires contracts for the purchase of goods to have a bid bond if they are in excess of $500,000. A performance bond also will be required for such contracts in excess of $500,000 for at least 50% of the contract price. The new law allows the Commission to bypass the competitive bidding process for purchases of goods when the Commission determines that competitive bidding was not practical or advantageous to it.

SFAA also worked with the Ohio Insurance Institute (OII) to address a provision included in the new law that requires a regulatory review process that could impact certain license bonds and potentially impact the insurance code. The requirement compels all state agencies to compile a broad inventory of regulatory restrictions containing the words "shall," "must," "require," "shall not," "may not," or "prohibit." The inventory is due on December 31, 2019, and it will be subject to review by the Joint Committee on Agency Rule Review, the Speaker of the House, and the President of the Senate. The inventory of regulatory restrictions is aimed at requirements that are not in the laws or that expand/implement the law. Notably, the new law does not include provisions contemplated in other legislation requiring a 30% reduction in the amount of regulatory restrictions over the course of three years.

State agencies will be prohibited, however, from adopting a new regulatory restriction unless it simultaneously removes two or more other existing regulatory restrictions until June 30, 2023. State agencies cannot merge two or more existing regulatory restrictions into one regulatory restriction to meet this requirement. The regulatory restriction provisions drew interest from several groups so that the scaled back provisions are the result of broader negotiations among these groups. OII noted that there is a preference for surety bonds in last year's occupational licensing law as a consumer protection tool, but it remains to be seen how the implementation of this year’s law will impact bonding.

Members should visit Advocacy / What's New for more information.

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