OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 302* Bill Analysis
134th General Assembly
Click here for S.B. 302’s Fiscal Note
Version: As Reported by House Technology and Innovation
Primary Sponsors: Sens. Hackett and Reineke
Effective Date:
Paul Luzzi, Attorney
SUMMARY
Delays by two years, from 2023 to 2025, the date by which the Department of Job and
Family Services (ODJFS) must begin to accept state income tax withholding requests
from unemployment compensation recipients.
Modifies the tax withholding information that ODJFS must report to the Tax
Commissioner.
Requires the ODJFS Director to request tax withholding information from an employer’s
tax returns when the employer fails to provide requested information within ten
working days.
Requires the ODJFS Director to enter data matching agreements with the Department of
Rehabilitation and Correction and the Department of Health under which the DRC
Director and ODH Director provide the ODJFS Director with current incarceration
information and death records, respectively.
Allows the Department of Public Safety to release its digitalized photographic records to
ODJFS if the records are necessary for ODJFS to carry out its functions under the
Unemployment Compensation Law.
Requires the ODJFS Director to establish a verification system that uses income tax
records for any federal program administered by the Director in a manner similar to the
Unemployment Compensation Law that provides money to an individual who loses
income but is not eligible for traditional unemployment benefits.
* This analysis was prepared before the report of the House Technology and Innovation Committee
appeared in the House Journal. Note that the legislative history may be incomplete.
December 13, 2022
Office of Research and Drafting LSC Legislative Budget Office
Allows the Unemployment Compensation Review Commission (UCRC) to appoint a
hearing officer to act as a temporary commissioner to decide an appeal when one of the
commissioners is unable or unavailable to hear the appeal.
Makes changes related to scheduling evening telephone hearings at both the hearing
officer and UCRC review appeal levels.
Requires that the appeal of a contribution rate or rate revision by an appealing party
who fails to appear at the hearing be dismissed, but allows the dismissal to be vacated if
written notice of the hearing was not sent to the party’s last known address, or if there
was good cause for the failure to appear.
Increases, from 52 to 208, the number of calendar weeks in which the ODJFS Director
may issue a corrected determination when an error in a previous determination was
typographical or clerical or was caused by an error in an employer’s report or incorrect
remuneration information received by the ODJFS Director.
Prohibits the ODJFS Director from disbursing unemployment benefits by direct deposit
to a financial institution unless the institution has a physical location in Ohio that the
individual requesting direct deposits can access for the purpose of resolving disputes
with the institution.
Requires the ODJFS Director to establish and maintain an online process through which
an employer can report that an applicant for or a recipient of unemployment benefits
has failed or is failing to meet the nonmonetary requirements for benefit eligibility.
Requires the ODJFS Director to prepare an annual report providing specified information
about claims and a summary of updates or changes to the technology used to
administer the unemployment compensation system.
DETAILED ANALYSIS
The bill makes two changes to the law governing state income tax withheld from a
taxpayer’s unemployment compensation benefits.
First, the bill delays, by two years, the date by which the Department of Job and Family
Services (ODJFS) must begin to accept state income tax withholding requests from
unemployment benefit recipients. Under continuing law, individuals may request that ODJFS
withhold federal income tax on their benefits. In early 2021, the General Assembly expanded
this law to allow individuals to request that state income tax be withheld from their benefits as
well. Initially, the provision applied to benefits paid on or after January 1, 2022, but the General
Assembly later extended that date to January 1, 2023. The bill further delays the provision by
an additional two years, allowing recipients to make state tax withholding requests for benefits
paid on or after January 1, 2025. The bill also delays, by two additional years − from December
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1, 2022, to 2024 − the date by which ODJFS must notify current unemployment recipients that
they will soon be eligible to make such requests.1
Second, the bill modifies the withholding information that ODJFS must report to the Tax
Commissioner. Under continuing law, once state tax withholding begins, ODJFS must report and
remit withheld taxes on a monthly basis. Under current law, the report must identify each
taxpayer from which tax was withheld, the amount of benefits the taxpayer received, and the
amount of taxes withheld. At the beginning of each year, continuing law requires ODJFS to
provide an information return to each taxpayer showing the total amount of taxes deducted
from that taxpayer’s benefits in the preceding year.
The bill removes the requirement that ODJFS’s monthly reports include specific taxpayer
withholding information, and instead requires that, annually, ODJFS forward to the Tax
Commissioner a copy of each taxpayer information return issued for the preceding year. In
addition, the bill requires ODJFS to file an annual return each January with the Tax
Commissioner, showing the total amount of state taxes withheld in the preceding year and
reconciling any withholdings not already remitted.2
Additional eligibility screening for unemployment benefits
Background – application process
The bill requires the ODJFS Director to check specific sources of data when determining
an individual’s eligibility for unemployment benefits. Determining eligibility is a two-phase
process. In the first phase, an individual files an initial application for a determination of benefit
rights, which generally examines whether the individual worked and earned enough to be
eligible for benefits (“monetary eligibility”). On receiving the initial application, continuing law
requires the ODJFS Director to promptly notify the individual’s most recent employer and
request the reason for the individual’s unemployment. The ODJFS Director also may request
additional information from the individual and any employers identified in the application. An
employer must provide requested information within ten working days after the Director sends
the request. The ODJFS Director determines whether an initial application is valid using the
gathered information and any other available sources. This application is used to establish the
individual’s benefit year, which is the 52-week period during which the individual may file
claims for benefits based on satisfying the monetary eligibility requirements.
After filing a valid initial application and establishing a benefit year, an individual enters
the second phase of the process. In the second phase, the individual must file a claim for
benefits each week the individual seeks benefits during the individual’s benefit year. At this
1Section 8 of S.B. 18 of the 134th General Assembly, as subsequently amended by H.B. 110 of the 134th
General Assembly (Sections 4 and 5 of the bill). This provision currently has a 90-day effective date,
which means that the bill’s delay of the withholding start date will take effect after the current date
ODJFS is required to begin taking withholding requests (January 1, 2023).
2 R.C. 5747.065.
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point of the process, the individual must satisfy “nonmonetary requirements.” The
nonmonetary requirements concern filing appropriate paperwork, the reason why the
individual is unemployed, and work search requirements.3
Income tax information to resolve initial applications
Under the bill, if an employer fails to provide requested information within ten working
days, the ODJFS Director must provide to the Tax Commissioner the individual’s and employer’s
names, addresses, taxpayer identification numbers if available, and any other information
required by the Commissioner. The Commissioner must confirm to the ODJFS Director whether
the individual was included on the most recent annual income tax withholding return filed by
the employer. The Commissioner must inform the ODJFS Director if the Commissioner is unable
to provide the requested information.4 These information sharing requirements apply to
requests made on or after January 1, 2024.5
Unless an exception applies, continuing law specifies that any information in tax returns
is confidential and may not be disclosed by an employee of the Department of Taxation or any
other individual. The bill adds a new exception allowing Department employees to disclose
information requested by the ODJFS Director for the purpose of determining whether an initial
application is valid to the extent the information may be disclosed under federal law. 6
Data matching agreements
The bill requires the ODJFS Director to enter data matching agreements with the
Department of Rehabilitation and Correction (DRC) and the Director of Health (ODH). Under the
agreement with the DRC Director, the DRC Director must provide the ODJFS Director with a
searchable list, updated weekly, identifying all individuals committed to DRC institutions. DRC
must share its records with the ODJFS Director to the extent necessary to effectuate the
agreement. ODJFS has been in a contract with a private vendor since 2015 to do weekly
national incarceration cross matching to identify potential unemployment claimant ineligibility.
The Controlling Board approved the most recent renewal of the contract for FY 22 and FY 23 in
June 2021. The current contract is 100% federally funded.7
Under the agreement with the ODH Director, the ODH Director must allow the ODJFS
Director to match death records maintained by the ODH Director in accordance with continuing
law.
3 R.C. 4141.28 and R.C. 4141.01 and 4141.29, not in the bill.
4 R.C. 4141.28(B).
5 Section 3.
6 R.C. 5703.21 and 5747.18.
7 Controlling Board Operating Request, Controlling Board No. JFS0100604, which is available by
searching for the term “Appriss” on the Office of Budget and Management’s webpage for approved
Controlling Board requests: https://obm.ohio.gov/areas-of-interest/controlling-board/search-approved-
requests.
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The ODJFS Director must check the list provided by the DRC Director and the death
records when determining the validity of an initial application or a claim for benefits.8
Under continuing law, an individual, among other requirements, must be available for
suitable work to receive unemployment benefits. While a deceased individual cannot be
available for suitable work, an individual in DRC custody may be available under certain
circumstances. The availability determination depends on the facts and circumstances of each
case.9
Department of Public Safety photo sharing
The bill allows the Department of Public Safety (DPS) to release its digitalized
photographic records to ODJFS if the records are necessary for ODJFS to carry out its functions
under the Unemployment Compensation Law. Under current law, DPS may only release its
digitized photographic records to the following entities:
A state, local, or federal government agency for criminal justice purposes;
Any court;
The American Association of Motor Vehicle Administrators to allow state department of
motor vehicles participating in the association’s state-to-state verification services and
digital image access and exchange program to use the records for identity verification
purposes.10
Income verification system for federal benefit programs
The bill requires the ODJFS Director to establish a verification system for any federal
program similar to the Unemployment Compensation Law administered by the Director that
provides money to an individual who loses income but is not eligible for traditional benefits.
The system must verify whether an individual has filed annual income tax returns using income
tax records maintained by the Tax Commissioner.
The ODJFS Director must enter a data sharing agreement with the Commissioner
allowing the ODJFS Director to provide to the Commissioner the name, Social Security number,
and any other information required by the Commissioner for an individual applicant. The ODJFS
Director may request information from the Commissioner regarding whether an individual has
filed an annual income tax return. The ODJFS Director may request the information for the
most recent taxable year for which a return was due or either of the two preceding taxable
years.
8 R.C. 4141.287, 4141.288, and 5120.212.
9 R.C. 4141.29, not in the bill; and see, e.g., Hageman v. Administrator, Ohio Bureau of Employment
Services, 1991 Ohio App. Lexis 1576, 1991 WL 53835 (6th Cir. 1991).
10 R.C. 4507.53.
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On receiving the request, the Commissioner must provide the ODJFS Director with the
requested information. If the Commissioner is unable to provide any portion of the requested
information, the Commissioner must inform the ODJFS Director. These information sharing
requirements apply to requests made on or after January 1, 2024.
The income verification system does not apply to a federal program for which income
verification is not required.11
As with the bill’s provisions requiring the use of income tax information to confirm
eligibility for traditional benefits (see “Income tax information to resolve initial
applications,” above), the bill specifies that the Commissioner or a Department of Taxation
employee may disclose income tax information to the ODJFS Director, to the extent the
information may be disclosed under federal law, when the information is used to verify an
individual’s eligibility for a federal program covered by the system.12
Unemployment Compensation Review Commission hearings
The bill allows the Unemployment Compensation Review Commission (UCRC) to appoint
a hearing officer as a temporary commissioner to fulfill a missing commissioner’s duties with
respect to an appeal when the missing commissioner is unable or unavailable to consider the
appeal. The UCRC may not appoint the hearing officer who decided the appeal at the hearing
officer level.
The UCRC is the appellate body that hears appeals of hearing officer determinations of
benefit rights or determinations of claims for benefits. Under continuing law, the UCRC has
three members, and two members constitute a quorum.13 Final decisions from the UCRC are
appealable in court.14
The bill requires, at both the hearing officer and UCRC review appeal levels, that
hearings be held during normal business hours unless the UCRC grants a request for an evening
telephone hearing. The bill requires the UCRC to grant or deny a request for an evening
telephone hearing if an interested party who is regularly employed throughout normal business
hours requests an evening telephone hearing. Current law requires the UCRC to schedule an
evening hearing during hours that a party is not employed if the party is employed during the
day and makes such a request. Under continuing law, if a conflict concerning a request for an
evening hearing and an in-person hearing arises, the UCRC must schedule the hearing to be an
evening telephone hearing.15
11 R.C. 4141.163 and Section 3.
12 R.C. 5703.21 and 5747.18.
13 R.C. 4141.281(C)(5) and R.C. 4141.06, not in the bill.
14 R.C. 4141.282, not in the bill.
15 R.C. 4141.281(D)(4).
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