Governor DeWine, members of the General Assembly and fellow Ohioans:

Every day, employees of the Ohio Department of Commerce work hard to meet the Governor’s charge to build a stronger, better Ohio. The Department plays a key role in making this state a safe place to live and work. We accomplish this responsibility through regulation, promotion and education.

As the state’s chief regulatory agency, we impact the success of more than 6,000,000 licensees and regulated entities. Businesses operating safely and within regulations are in a better position to create and maintain jobs, which contribute to the state’s success. Through active and continuous outreach, we strive to ensure they understand their regulated obligations while encouraging their growth.

We promote business opportunities. For example, our contract liquor agency stores were given access to new branding and modernization of their storefronts as well as special releases and programs that bring hard-to-find products to Ohio. These new offerings improve the customer experience, which, in turn, boosts sales.

We help Ohioans safeguard their families, homes and assets. Whether it is an advisory warning of potential fire hazards or an alert about fraudsters trying to scam Ohioans into parting with their hard-earned money, we give citizens information they can use to protect themselves. The Department also connects individuals with their missing money - money they can use to purchase a home, attend college or start a business.

I am proud knowing that the work of our Department and employees makes a significant difference for Ohio citizens and businesses. Our efforts protect Ohioans and help businesses succeed, building a stronger, better Ohio.

Divisions and Programs

The Division of Financial Institutions (DFI) strives to provide quality outreach programs to its regulated industries. In FY19, DFI created a new workshop to educate Ohio’s credit unions on the exam process and how results are achieved.

The first Credit Union Directors Training took place Sept. 18, 2018 in Columbus, and 50 credit union executives from across the state attended. The workshop was designed to expose senior officers and directors of credit unions to the examination process, while enhancing the understanding of a director’s role in leadership of a banking organization and the risk management responsibilities in today’s banking environment.

During the workshop, DFI provided useful and relevant real-life examples to assist senior management with ongoing concerns and questions they may have during the examination process. It allowed attendees the opportunity to ask questions and establish a better relationship with DFI examiners to ensure credit union leaders feel confident throughout the exam process.

DFI received such an overwhelmingly positive response to the first workshop that the Division decided to provide the training yearly for state-chartered credit unions. Ultimately, the training gives DFI and credit unions the opportunity to communicate and troubleshoot any issues proactively so credit unions can provide the best services possible to their customers.

The Division of Financial Institutions’ Office of Consumer Affairs administers the Ohio Financial Literacy Education Grant Fund to support financial literacy education programs and provide outreach and consumer education around financial fraud issues.

In FY19, $12,938 in grant funds was awarded to Serving Our Seniors, an organization aiming to empower Erie County residents age 60 and over to maintain their independence.

The funds allowed the organization to provide financial literacy education to older Ohioans throughout Erie County with the goal of educating them on ways to successfully manage their finances, make informed choices, and plan and maintain long-term financial stability in retirement.

The Serving Our Seniors financial literacy program consisted of three key learning opportunities benefiting older adults and caregivers:

  • Community Education – Two public forums took place on financial literacy topics; ‘What are the Powers of Power of Attorney’ and ‘Social Security Retirement Basics.’
  • Money Matters: Ask an Expert – A four-week course was offered in the months of March, April, May and June, on financial literacy to help prepare nearly 600 individuals for successful retirement and to prevent financial instability in the future. Topics covered a variety of issues on successful retirement, including social security, elder financial abuse, investments, IRAs, debit and credit, budgeting, savings, taxes, and healthcare considerations.
  • Erie County Saves – A year-long program that offered intensive case management services for 15 older adults experiencing financial stress and who were committed to rebuilding financial stability.

Launched in June 2018, the Division of Industrial Compliance’s new DIC Public Portal is a hub for all licenses and permits related to construction projects. The portal allows customers to view real-time updates on all documents and approvals to keep projects moving on time.

Some of the most popular features of the portal include:

  • 24/7 access to all documents, permits, and invoices
  • Ability to request an inspection after business hours
  • Shared access of owner documents between designated users
  • Document archiving, including project documents and Certificates of Occupancy

A new feature being added to the portal is a “Pay Now” button, which will allow any customer with access to the invoice the ability to pay without needing to be an active portal user. This saves time and energy in an office environment where any staff member can accomplish bill paying tasks.

Along with this feature is a search function allowing customers to search for a folder quickly when multiple folders exist. All modifications are designed to give the customers what they need, when they need it.

Customers also have the option of requesting electronic video inspections through the portal. Same-day inspections, reinspections and on-demand inspections can be conducted to keep projects on track, saving time and money.

The Division of Industrial Compliance oversees the yearly inspection process for the more than 60,000 boilers in Ohio, and recently made a change to the process that improved both customer service and efficiency.

Historically, yearly inspections were required within 30 days of the expiration date listed on the boiler’s certificate of operation. Each boiler expiration date was set 12 months after the previous inspection – meaning if the previous inspection was conducted any time outside 30 days, it changed the boiler’s next expiration month.

This variable created issues, not only for the customer – who was required to be present at the inspections – but also for inspectors, whose schedules were hard to coordinate due to the high volume of inspections all across the state.

The Division reviewed this process and determined change was needed due to the following inefficiencies:

  1. Expiration dates on the boiler's certificate of operation were variable, meaning boilers on the same property with different expiration months required multiple inspections throughout the year.
  2. Many boilers in the same area could not be inspected at the same time.
  3. Variable expiration could result in cost difference if the inspection was conducted outside of the 30-day timeframe.

This new process eliminates all of these issues, allowing inspectors to schedule boiler inspections in a similar area at the same time – saving time and fuel. As for the customer, they can get their boilers inspected anytime within the yearly inspection cycle and their certificate expiration month never changes.

This process is simpler, more efficient, and provides better customer service for inspecting boilers throughout Ohio.

The Division of Liquor Control (DOLC) made great strides in moving Ohio to the forefront of the high-proof spirituous liquor industry in FY19. After years of focusing on the internal inventory system, the Agency Operations section set its sights on enhancing the consumer experience.

New Look for Agencies

DOLC opened 22 new Contract Liquor Agencies in FY19. When combined, these new stores average $500,000 a week in sales. The stores range from big-box chains to small business shops. Agents were encouraged to raise the bar on their stores, creating a welcoming and clean environment for consumers.

The Ohio Liquor, or OHLQ, brand was launched in December 2018. The new look and feel for Agencies adds a level of sophistication to the shopping experience, and creates a welcoming, easy-to-navigate environment. The brand also includes elements to educate consumers on the spirituous liquor categories and offers cocktail suggestions.

This initiative aims to bring a cohesive element to the 481 stores, which are private businesses that sell high-proof liquor on the state’s behalf. The first fully branded Agency, Buehler’s Fresh Foods in Massillon, opened in April 2019, followed by a second, Kings Mils Liquor, in June 2019. Consumers can expect to see more stores implementing elements of the brand going forward.

To add to the consumer experience, DOLC launched OHLQ.com in December 2018 to increase transparency and improve consumer access to their favorite products. The website helps Ohioans find where they can purchase high-proof spirits and what products each Agency carries. Since it went live, there have been approximately 188,000 unique visitors to the site.

DOLC opened its first “Last Call” destination store in October 2018 with one-of-a-kind buys, discontinued, eclectic, and slow-selling products for sale at the location.

Thousands of Ohioans traveled from all over the state to the Columbus location to find their treasures. Sales topped $320,000 in the two-weekend event. Since then, two more locations were opened – one in Toledo (December 2018) and one in Cincinnati (March 2019).

The Ohio Department of Commerce is responsible for overseeing medical marijuana cultivators, processors, and testing laboratories.

The Medical Marijuana Control Program (MMCP) began as just words on a page in 2016 and, after years of building a new regulatory program, on Jan. 16, 2019 the state’s first patients were able to legally purchase medical marijuana in Ohio.

In just the first few months of sales, thousands of patients have been served and millions of dollars have been invested in Ohio’s economy.

The Ohio General Assembly passed House Bill 523 in 2016, which legalized medical marijuana in Ohio and created the MMCP. Three state agencies (Ohio Department of Commerce, Ohio Board of Pharmacy, and the State Medical Board) are responsible for regulating the program.

The Ohio Department of Commerce was tasked with establishing a regulatory framework to license cultivators, processors, and testing laboratories. With the goal of setting up a stable and sustainable program, countless hours were dedicated to drafting the regulations, reviewing applications, awarding licenses, and working with provisional licensees to ensure compliance in order to become operational.

Patient safety is always the highest priority. On the first day of sales, patients could be confident the product was safe for consumption because of the strict procedures implemented by MMCP.

Product safety starts at the seed and MMCP regulates each plant from seed to sale.

All plant material is tested at independent, certified labs to determine potency and to detect contaminants that may be harmful to patients. Plant material processed in the permitted forms (edibles, tinctures, lotions, and liquids or solids for vaporization) are subject to additional testing to determine potency and ensure the end product is safe. On top of that, processing facilities are subject to food safety inspections conducted by the Ohio Department of Agriculture.

Public health and community safety are also a top priority, as evidenced by the stringent security protocols licensees are required to implement.

MMCP’s seed-to-sale system monitors and tracks the product from the cultivation facilities to the dispensation of the product to patients.

Each licensed facility is under video surveillance, with multiple in-person inspections occurring throughout the year at each facility to ensure compliance and, ultimately, safety for patients.

Medical Marijuana Control Program numbers updated July 1, 2019

The Division of Real Estate & Professional Licensing (REPL) gained authority over four new programs in FY19. These programs further educate and protect consumers, providing verification that an individual credentialed by REPL has met certain qualifications to become registered, licensed or certified and is expected to operate according to certain industry standards.

House Bill 168 established the Cemetery Grant Program, which became effective in October 2018. Registered non-profit cemeteries will have the opportunity to seek funding for exceptional cemetery maintenance/repair and training of cemetery personnel – expenses which can often be overwhelming for a cemetery. This program is funded by $1 from each burial permit fee issued in Ohio.

REPL has been hard at work establishing this addition to the cemetery program, disseminating administrative rules, designing grant applications and other materials, and establishing the grant advisory committee.

The program helps support Governor DeWine’s initiative of creating jobs and prosperity by making funding available for cemeteries to support ongoing operations and to invest in the professional development and education of staff.

Appraisal Management Companies (AMC) work on behalf of a client, normally a lender, to facilitate appraisals. House Bill 213 was proposed in response to a federal requirement in the Dodd–Frank Wall Street Reform and Consumer Protection Act (Act) requiring AMCs to be licensed and regulated by the Ohio Real Estate Appraiser Board in order to provide services in Ohio.

This regulation provides another layer of oversight in the mortgage transaction, ensuring Ohio’s real estate appraisers are not unduly influenced during the process and the appraisal report is based on an independent opinion of value.

Since the regulation became effective in December 2018, REPL has licensed more than 100 AMCs!

Landmen, or Land Professionals, are agents who negotiate oil, gas and mineral rights, most often in the form of a lease. Although real estate law had always been interpreted to include landmen as a group to be regulated by both REPL and the Ohio Real Estate Commission, that interpretation was challenged during the boom in Ohio fracking.

After conflicting lower court decisions, in September 2018, the Ohio Supreme Court issued a decision affirming REPL’s interpretation that Ohio Revised Code 4735.01 activities requiring a real estate license include the negotiation of oil, gas and mineral leases. This opinion led to Amended Substitute Senate Bill 263, which structured the registration process for land professionals in Ohio.

In just two months, REPL registered more than 300 Land Professionals.

The Division is actively working to implement the Home Inspector Program, which established requirements for the licensing of home inspectors. This program, signed into law Jan. 4, 2019, as part of Senate Bill 255, adds a crucial layer of consumer protection previously missing from the home buying process.

In the second half of the fiscal year, REPL communicated with stakeholder groups, drafted administrative rules and created forms in preparation for a “go live” grandfathering period in early Fiscal Year 2020. By Nov. 1, 2019, any individual conducting residential inspections for a client, for a fee, will be required to be licensed.

The program aims to give potential homebuyers, making one of the biggest purchase of their lives, peace of mind in knowing any inspector they plan to hire is properly trained.

Most Ohioans may be surprised to learn the Division of Securities has a criminal justice function.

The Division’s Enforcement Section has the power to issue subpoenas for testimony and documents – such as bank records and other materials relevant to a case – to examine as part of a criminal investigation. The goal is to bring justice to aggrieved Ohio investors who have lost hard-earned money to fraudsters.

To accomplish this goal, the Enforcement Section collaborates with local, state and federal law enforcement agencies – as well as county prosecutors – to investigate and prosecute investment fraud.

A great example of how the Division successfully collaborated on a case involved the Ohio Attorney General’s Bureau of Criminal Investigation, the Jackson Township Police Department, and the Stark County Prosecutor’s Office, to investigate and prosecute a former investment adviser for a $1.6 million fraud in northeastern Ohio.

Rather than express regret for his misconduct, the defendant plotted new schemes to repay the investors, including brazenly soliciting Division staff and other officials. The Division assisted the prosecutor’s office to successfully convict the person on 53 criminal counts, which resulted in a 20-year prison sentence and a restitution order of $1,695,255 for the Ohio victims.

Through its outreach efforts, the Division of Securities educates Ohioans about safe investing practices and the steps they can take to avoid becoming victims of investment fraud.

During FY19, staff connected with more than 4,800 Ohioans at 34 events, which targeted seniors, law enforcement representatives, prosecuting attorneys, financial industry representatives, social workers and adult protective services staff, church groups and social clubs.

Oftentimes after these events and presentations, Division staff are approached by individuals who want help looking into the background of their investment professional, or because they believe they may have lost money in a fraud.

The Division increased outreach efforts to law enforcement and county prosecutors to educate them on how to work with the Division to investigate and prosecute suspected cases of investment fraud. Presentations were given at the annual conferences of the Ohio Prosecuting Attorneys Association, the Ohio Association of Chiefs of Police, the Ohio Crime Prevention Association, and the Division also participated in the annual Attorney General’s Law Enforcement conference.

As a result, many law enforcement officials and county prosecutors have contacted the Division – based on what they learned from a presentation – on potential cases of securities fraud.

The State Fire Marshal’s (SFM) Forensic Laboratory recently added another service to their digital forensic capabilities – extracting data from mobile devices involved in criminal activity. To further enhance these new services, SFM’s Fire and Explosion Investigations Bureau hired a criminal analyst to leverage this digital evidence and assist field investigators.

With cellphones, tablets and GPS devices becoming a fundamental part of people’s daily lives, the use of mobile devices in criminal activity has increased exponentially. This technological leap forward will aid Ohio law enforcement and fire service personnel in obtaining digital evidence that could prove valuable in furthering investigations and securing convictions in arson cases.

The information recovered from these types of devices includes: calendar entries, call logs, chats, contact lists, location information, installed applications, notes, potential passwords, internet browser search history, SMS and MMS text messages, cloud accounts and data, voicemails, web bookmarks, history of websites visited, Wifi connections, media files including audio, pictures, and videos, timeline of phone events, malware/viruses on the device, social graphs of closest contacts and number of communications made.

The information recovered from these types of devices includes: call history, chats, contact lists, location information, installed applications, notes, passwords, internet history, text messages, cloud data, voicemails, Wifi connections, photos, and videos. SFM analysts can establish the timeline of phone events, determine travel patterns of individuals, construct social graphs of closest contacts and analyze the frequency of communications between two parties.

Depending on the device type, even deleted data from these categories can often be recovered. SFM lab personnel have also successfully recovered data devices heavily damaged by fire. Adding these capabilities was a joint effort between SFM’s Forensic Lab and the Fire and Explosion Investigation Bureau (FEIB).

While this program is still in its infancy, the Forensic Lab has already taken on nearly 20 cases involving mobile devices as evidence.

Throughout FY19, the State Fire Marshal’s Fire Prevention Bureau instituted processes to improve the quality of Ohio’s fire incident response data that has both drastically reduced and corrected reporting errors from the state’s fire departments.

Each year, the United States Fire Administration (USFA) tasks each state with verifying the accuracy of data submitted by its fire departments. Inaccurate incident reports often contain some of the following errors: high response or incident duration times, structures with a large number of stories, high-dollar losses, large number of casualties, and duplicated incidents.

In 2017, the USFA released a report rating the quality of incident reporting among the nation’s fire departments between 2009-2011. In the report, Ohio was ranked below the 50th percentile. To improve this, the State Fire Marshal's Fire Prevention Bureau instituted a quarterly validation process where incident reports are reviewed and returned to fire departments for validation on an ongoing basis.

Through this initiative, staff discovered more than 300,000 incidents missing out of the federal National Fire Incident Reporting System (NFIRS) compared to the Ohio Fire Incident Reporting System (OFIRS). Nearly 170 fire departments were failing to report – all due to technical problems with third party reporting software vendors.

As a result of this initiative, the Fire Prevention Bureau has corrected most of those vendor issues, leading to a 100 percent reporting rate. Additionally, FPB staff has presented 22 fire incident training sessions to 289 fire service individuals to help ensure accurate incident data reporting.

These efforts will have a lasting impact on Ohio’s fire departments as more accurate reporting will ensure better eligibility for grant programs, help track fire incident causes, and better measure Ohio’s fire service activities.

The State Fire Marshal’s (SFM) Testing and Registration (T&R) Bureau modernized its testing process in early FY19, increasing availability and ease of access for licensees.

On July 26, 2018, staff began offering electronic exams for all applicants seeking fire protection and fireworks exhibitor licenses through a partnership with PSI Testing Services. This allows those stakeholders to utilize any of PSI’s seven exam sites in Ohio, as well as locations all throughout the country, any day of the week.

This process also saves applicants a considerable amount of time as many could complete their application, schedule an exam and receive their license within the same week.

This initiative was widely supported by stakeholders in SFM’s regulated industries and was done in response to their requests for more testing opportunities in more locations. Nearly 3,000 licensees will benefit from this effort each year.

Additionally, in June 2019, staff began offering underground storage tank inspector and installer applicants the opportunity to take their exams electronically on SFM’s campus. Not only does this provide those applicants with immediate results, but it has provided staff with more robust reports for evaluating the effectiveness of the exams.

The Division of Unclaimed Funds continues to look for ways to improve customer service through advancements in technology.

This past year has seen enhancements to the Ohio Business Gateway (OBG), which is a one-stop shop for all Ohio businesses to conduct multiple transactions with government agencies -- allowing for seamless regulatory compliance. One such transaction is the reporting of unclaimed funds to the Division.

OBG’s user-friendly functionality, easier interfacing, and the familiarity of this “global” portal has allowed more companies to report unclaimed funds. Businesses are required by law to report and remit unclaimed funds, the Division’s enforcement is also a civic duty.

Greater compliance allows the Division to direct resources toward reconnecting lost and forgotten funds with the rightful owner. Thus, this mission can have a significant impact on the financial wellbeing of both individuals and the economy.

The Division is also improving its overall customer experience through streamlining processes/procedures and improving its computer system. Such changes have included an ongoing effort to transition to paperless back-office claims processing and the review and standardization of payment requirements. Early efforts have already improved turnaround times and created greater clarity and a better experience for citizens attempting to claim funds.

On top of all this, there was an enhancement to the Division’s claim search engine, missingmoney.com. This improvement yielded a sleeker design, simpler, more effective searches, and captured more information necessary in expediting the claims process.

In FY19, the Division increased its outreach team, allowing the Division’s efforts to be both strategic and expansive. Throughout the coming year, the Division will continue to concentrate its resources about expanded outreach to educate the public on the Division and further identify possible claimants.

The Division is pacing to more than double the average number of outreach events for the fiscal year in an effort to reach more Ohioans directly and reunite them with their forgotten assets. This has included working in areas of Ohio with fewer resources – such as Athens and Lawrence counties – to provide Ohioans an opportunity to claim their funds.

The reward for these enhancements is seen as more than just numbers on a spreadsheet. Through these updates, the Division has been able to help many Ohioans in times of need. One claimant was able to cover his wife’s medical expenses. Another achieved a dream of purchasing a home.


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