June 14, 2021 Monday Message from the McDonald Hopkins Public Law Team

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Monday, June 14, 2021

To our friends, clients and colleagues in local and regional government, local and higher education, and the nonprofit sector, welcome to our latest Monday Message from the Public Law Group at McDonald Hopkins. In today’s email, assembled by attorneys Amy Wojnarwsky and Kevin Butler, you’ll find insights into areas of law we’re watching on your behalf.

In today’s edition:

  • Portions of latest version of state budget bill threaten municipalities, other political subdivisions
  • Bill would allow retirement plans to use ESG investments
  • Upcoming MH events and webinars

Portions of latest version of state budget bill threaten municipalities, other political subdivisions

Of primary importance to Ohio’s political subdivisions is H.B. 110, the state operating budget bill that’s now been voted out of the Senate with changes to the House version. The measure, which has been sent to conference committee for negotiation among the House, Senate and governor’s office before its end-of-month due date, contains several provisions that affect public entities. In its Senate-backed form, the measure preserves the Local Government Fund formula on which cities and villages rely, but it also features the following items of concern to political subdivisions:

  • It would permit employees who’ve been turned into temporary telecommuters during the pandemic to request municipal income tax refunds from their employer cities for any amounts paid into those employers since March 2020 – all despite heavy pressure from the Ohio Municipal League and Ohio’s mayors and city managers against this and similar bills that, if passed, would deal a significant financial blow to some of the state’s largest centers of employment.
  • It would sunset on July 1 the ability for public entities that must follow the Open Meetings Act to conduct virtual deliberations. The House version of the budget bill would’ve extended virtual public meetings until the end of 2021, and a separate bill (H.B. 43) that would make remote meetings a permanent part of the code is stalled in its House committee.
  • It would create a preemption forbidding political subdivisions from creating their own broadband infrastructure in an effort to protect the market share of incumbent internet service providers.
  • It would make permanent the temporary measure, enacted last year, that prohibits home-rule counties, limited home-rule townships and municipalities from imposing a tax or fee on “auxiliary containers” – plastic and paper bags, Styrofoam cups, plastic straws and cardboard containers. Then and now, the state legislation directly responds to Cuyahoga County’s countywide retail plastic bag ban, which was to have taken effect on January 1, 2021, but was delayed based on the temporary statewide preemption.

Because the budget bill must be in the governor’s hands by June 30, negotiations will move quickly over the next two weeks. We’ll provide updates here.

Bill would allow retirement plans to use ESG investments

Democrats in the U.S. Senate and House introduced a bill last month that would amend ERISA to make clear that retirement plans may consider environmental, social and governance factors in their investment decisions and that ESG investments are permitted as qualified default investment alternatives in ERISA-covered plans. If enacted, the proposed law would effectively give ESG criteria equal status for investment decision-makers in default retirement investment funds.

The sponsors of the Financial Factors in Selecting Retirement Plan Investment Act point to the growing interest in ESG investing and the need for Congress to provide legal certainty as to retirement plan fiduciaries’ ability to invest in ESG funds. If enacted, this bill would reverse the Trump administration’s controversial rule that severely limited investors’ ability to consider ESG criteria in most retirement investing and thus effectively prevented ESG investments from being included in such portfolios.

Within the firm’s Social Corproate Governance and Impact Investing practice, which is allied with our Public Law group, we’re monitoring the progress of this bill and other relevant legislation, and we’ll continue to update you here. Please feel free to reach out to our colleagues John Wirtshafter and Amy Wojnarwsky for more information.

Upcoming MH events and webinars

You’re always welcome to sign up for upcoming online, free McDonald Hopkins events targeted to those across a broad array of industries that may appeal to you.

On June 24, for example, members of the firm’s Business and Intellectual Property practices continue their IP Plus series of webinars by leading a roundtable discussion with two company founders on the role innovation played as they launched their companies and continues to play today. Register here.

Missed the second installment of our Public Law in Practice seminar series? Not to worry: Replay the hourlong June 9 webinar here, where you’ll hear from our Public Law colleagues Mike Wise and Amanda Gordon. They helmed an expert panel on the unique financial benefits and efficiencies created by forming special improvement districts to curb shoreline erosion – a tool we’ve deployed successfully along the lakefront that’s now poised to move to inland waterways if the state budget bill passes in its current form. It’s worth a viewing for anyone dealing with erosion issues in municipalities and townships along Ohio’s lakes, rivers and streams.

Feel free to contact any member of the McDonald Hopkins Public Law team if you have questions or need assistance on any of the matters we’ve covered above or with your legal needs in general.

Teresa Metcalf Beasley
Chair, Public Law

©2021 McDonald Hopkins LLC All Rights Reserved
This Publication is designed to provide current information for our clients, friends and their advisors regarding important legal developments. The foregoing discussion is general information rather than specific legal advice. Because it is necessary to apply legal principles to specific facts, always consult your legal advisor before using this discussion as a basis for a specific action.

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