MICHAEL D.

DOVILLA
18 TH DISTRICT ______

VERNE R IFFE CENTER

77 S OUTH HIGH S TREET, 12 TH F LOOR COLUMBUS, OH 43215-6111
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ECONOMIC & SMALL B USINESS DEVELOPMENT STATE GOVERNMENT & E LECTIONS REDISTRICTING SUBCOMMITTEE W AYS & MEANS, V ICE -C HAIRMAN

T: (614) 466-4895
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F: (614) 719-6957

Ohio General Assembly

House of Representatives Columbus

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DISTRICT18@OHR .STATE.OH.US

Sponsor Testimony of Representative Mike Dovilla Regarding Government Reform and Economic Tourism (House Bill 489) Before the House Committee on State Government and Elections Tuesday, April 17, 2012 Chairman Maag, Ranking Member Gerberry, and members of the House State Government and Elections Committee, thank you for the opportunity to offer sponsor testimony on behalf of House Bill 489, which I am pleased to be sponsoring with Representative Hagan. A little over a year ago, we began to examine the way Ohio encourages or even discourages businesses to expand, locate, remain, and create the jobs in our state that we need to provide opportunity for future generations of Ohioans. What we discovered is that the chief organization responsible for this, the Ohio Department of Development, had grown well beyond its original scope and mission as established under Governor Rhodes in 1963. House Bill 1, introduced this session by Representative Duffey and signed into law by Governor Kasich began our focus on reforming government and revitalizing our ability to create an environment for job growth. H.B. 1 established JobsOhio, a private, nonprofit corporation designed to lead Ohios job creation efforts by singularly focusing on attracting and retaining jobs with an emphasis on strategic industry sectors of statewide and regional strength. In just the past year, JobsOhio and its partners have worked on 245 projects. These initiatives have created and retained more than 82,000 jobs with a total payroll of nearly $4.8 billion and almost $3.3 billion in new capital investment (JobsOhio Report). But there is much more which can be done to continue building on these successes. H.B. 1 tasked the Ohio Department of Development to evaluate all powers, functions, and duties of the department and make recommendations to improve the functions and efficiency of Development. Now, it is time to take the next step in transforming our state for job creation. House Bill 489 will continue the process of restructuring state government to make it more efficient and effective in supporting Ohios businesses and attracting new enterprises to our great state. It starts with recognizing the mission of the Department of Development has been refocused to actually provide services related solely to economic development which leads to its renaming as the Development Services Agency. House Bill 489 provides for more than just the renaming of a state agency. This bill serves to reinforce our commitment to economic development in multiple ways.

Tourism is the fourth largest industry in Ohio and has great potential for additional growth. To place this in perspective, Ohios tourism industry accounts for 439,000 jobs and $36 billion in spending each year. In 2011 alone, our state and local governments realized a $14 to $1 rate of return from the Too Much Fun for Just One Day advertising campaign. In order to set the stage for continued success and job creation, H.B. 489 establishes TourismOhio, a program which I believe will become a national model for tourism marketing. TourismOhio is a five-year pilot program designed to promote our state as a travel destination and encourage job growth in both tourism related industries and their supporting economic sectors. This five-year pilot program will directly link funding for our tourism marketing to the growth in sales tax revenues from tourism-related industries. We have received much support of this plan from Ohios tourism industry. In addition to the pilot program, the bill also establishes the TourismOhio Advisory Board to advise on strategies for promoting tourism in the state. This board will be comprised of individuals who possess at least five years of executive-level experience in the attractions, lodging, restaurant, transportation, or retail industry or with a destination marketing organization. In addition to the changes which will be made to advance economic development in the tourism industry, House Bill 489 also takes into consideration how we, as a state, may better serve minority-owned businesses. One such way is to offer minority-owned businesses increased access to capital. Currently, the Ohio Department of Development maintains two minority-owned business funds, the Enterprise Loan Fund and the Capital Access Loan Program. Based on an analysis of previous disbursements from both funds, it is possible for one programs funds to be completely depleted with the remaining program having more available funding than applicants require. House Bill 489 would permit the transfer of money between these two funds to assist more minority-owned businesses. However, during any fiscal year the total amount of money deposited into the Capital Access Loan Program Fund from the Enterprise Loan Fund cannot exceed $3 million. In addition, the reserve requirements for each fund would be decreased in order to make more money available to these businesses. Current law requires that the amount equal 80 percent of the loan principal. Under the bill, the amount cannot exceed 80 percent of the loan principal. At this time, Chairman Maag, Representative Hagan will address the new relationship between JobsOhio and DSA and the reforms House Bill 489 includes to make DSA more efficient in its tax credit and loan processing programs.