Daily Court Reporter - News 'Rural Jobs' bill advances in spite of Kasich veto
'Rural Jobs' bill advances in spite of Kasich veto
KEITH ARNOLD, Daily Reporter Staff Writer
Access to ample capital is a problem in rural communities throughout the Buckeye State, according to a Findlay lawmaker seeking to turn around that reality.
Senate Bill 147, titled the Ohio Rural Jobs Act, would allow for a capital infusion of up to $75 million, the bill's sponsor, Republican Sen. Cliff Hite, told fellow senators seated on the Ways and Means Committee upon the bill's introduction this session.
Hite was responsible for a similar bill during the 131st General Assembly and for language added via conference to the most recently enacted operating budget.
Provisions of the additional language were stricken from resulting law, courtesy Gov. John Kasich's line-item veto power.
"In the spirit of working together and compromise, I am actively having discussions with the administration to address their concerns as outlined in the governor's veto message, and we are willing to make adjustments as necessary in order to see this important legislation across the goal line," Hite conceded.
SB 147 would authorize a nonrefundable tax credit for insurance companies that invest in rural business growth funds, which are certified to provide capital to rural and agricultural businesses.
Recognizing the fundamental impact small businesses have on the U.S. economy, he said growth of this sector in Ohio's rural regions is paramount.
"Small businesses employ nearly 50 percent of the private sector workforce, contributing two-thirds of new job creation annually," Hite said. "If we want to sustain and grow our communities, we must encourage the same small business production in rural Ohio.
"Small businesses need many tools, but, arguably, the most fundamental of those tools is capital. Engaging the private market to invest in underserved rural communities may be the best way to tackle poverty and spur economic growth in these areas."
His bill is based on the U.S. Department of Agriculture's Rural Business Investment Program, which creates a post-performance tax incentive for certified investors.
"The investors are USDA-certified Rural Business Investment Companies or Small Business Administration-certified Small Business Investment Companies with proven track records of performance," Hite explained. "The Rural Jobs Act would authorize up to $75 million of private capital to be raised and invested in Ohio."
The bill purposely leaves the investment decisions in the hands of the private sector.
Under strict statutory requirements, "qualified applicants are given permission to raise a state-only Rural Jobs Act fund that will be eligible for a 12 percent net annual tax credit that is delayed for the first two years and back-end loaded in years three to five," Hite detailed.
The plan would require private capital invested into the fund for leverage and to ensure that all parties have skin in the game.
"It is estimated that the creation of 100 manufacturing jobs can have an economic impact of over $20 million in the community," Hite said. "The creation, growth and sustainability of small and historically underutilized businesses are central to the economic growth and stability of Ohio and that is why I urge timely consideration of this important legislation.
"Our Ohio small businesses are real companies, run by real people, and their impact is pronounced in our communities."
Representatives from the Ohio Agribusiness Association, capital investment firms and BioHio also offered testimony in support of the bill.
SB 147, which has cosponsorship support of three fellow senators, was not schecduled for a third hearing at time of publication.
Date Published: November 2, 2017